PALS Civil Law (Persons, Property & Oblicon)

CIVIL LAW The Law on Persons and Family Relations Course Outline I.

Preliminary Title; Human Relations; Personality; Domicile;

Art. 2 NCC; Art.5 Labor Code; Sec. 3(1) & 4, Ch. 2, Book VII, Administrative Code of 1987; BSP Circular 799 Effects and application of law Tanada vs Tuvera, 136 SCRA 27 (1985) Article 2 of the NCC does not preclude the requirement of publication in the Official Gazette even if the law itself provides for the date of its effectivity. Tanada vs Tuvera,146 SCRA 446 (1986) If the law provides for its own effectivity date, then it takes effect on the said date, subject to the requirement of publication. The clause “unless otherwise provided” refers to the date of effectivity and not the to the requirement of publication itself, which cannot in any event be omitted. Basa vs Mercado, 61 Phil 632 To be a newspaper of general circulation, it is enough that it is published for the dissemination of local news and general information, that it has bona fide subscription list of paying subscribers, and that it is published at regular intervals. PASEI vs. Torres, G.R. NO. 101279,Aug. 06, 1992 212 SCRA 298 Although the questioned circulars are a valid exercise of the police power as delegated to the executive branch of Government, they are legally invalid, defective and unenforceable for lack of proper publication and filing in the Office of the National Administrative Register as required in Article 2 of the Civil Code, Article 5 of the Labor Code and Sections 3(1) and 4, Chapter 2, Book VII of the Administrative Code of 1987 Rep. vs. Extelcom, G.R. NO. 147096,Jan. 15, 2002 373 SCRA 316 Thus, publication in the Official Gazette or a newspaper of general circulation is a condition sine qua non before statutes, rules or regulations can take effect. There is nothing in the Administrative Code 1

of 1987 which implies that the filing of the rules with the UP Law Center is the operative act that gives the rules force and effect. Cojuangco, Jr. vs. Rep., G.R. NO. 180705, Nov. 27,2012 686 SCRA 472 In this case, while it incorporated the PCA-Cojuangco AG.R.eement by reference, Section 1 of P.D. 755 did not in any way reproduce the exact terms of the contract in the decree. Neither was acopy thereof attached to the decree when published. We cannot, therefore, extend to the said AG.R.eement the status of a law. NMSMI vs. DND,G.R. NO. 187587,June 5, 2013 697 SCRA 359 – The Court cannot rely on a handwritten note that was not part of Proclamation No. 2476 as published. Without publication, the note never had any legal force and effect. Roy vs CA, G.R. NO 80718 Jan. 29, 1988 The term “laws” do not include decisions of the Supreme Court because lawyers in the active practice must keep abreast of decisions, particularly where issues have been clarified, consistently reiterated and published in advanced reports and the SCRA.

Arts.3, 4, 5, 6, 7 NCC; Arts. 105, 256 Family Code; Vested Rights; Substantive & Procedural Laws; Retroactive Application; Express and Implied Repeal; Effect of declaration of Unconstitutionality Marcella-Bobis vs Bobis, 336 SCRA 747 (2000) The accused is prosecuted for the crime of bigamy for not obtaining a judicial declaration of nullity of his first marriage before entering into another marriage. Ignorance of the existence of article 40 of the Family Code canno enve be successfully invoked as an excuse. Bernabe v. Alejo G.R. NO. 140500, Jan. 21, 2002 374 SCRA 180 An illegitimate child filed an action for recognition pursuant to article 285 of the NCC during the effectivity of the Family Code. illegitimate children who were still minors at the time the Family Code took effect and whose putative parent died during their minority are thus given the right to seek recognition (under Article 285 of the Civil Code) for a period of up to four years from attaining majority age and this vested right was not impaired or taken away by the passage of the Family Code. Rep. v. Miller G.R. NO. 125932, Apr. 21, 1999 306 SCRA 183 2

Whether or not, an alien, who is qualified to adopt at the time of filing the petition, can be disqualified by the new provisions of the family code. An alien qualified to adopt under the Child and Youth Welfare Code, which was in force at the time of the filing of the petition, acquired a vested right which could not be affected by the subsequent enactment of a new law disqualifying him. Vested rights include not only legal or equitable title to the enforcement of a demand, but also an exemption from new obligations created after the right has vested. Atienza vs. Brillantes, AM MTJ 92-706, Mar. 29,1995 243 SCRA 32 Article 40 is applicable to remarriages entered into after the effectivity of the Family Code on August 3, 1988 regardless of the date of the first marriage. The fact that procedural statutes may somehow affect the litigants' rights may not preclude their retroactive application to pending actions. Ty v. Cam G.R. NO. 127406, Nov. 27, 2000 The two marriages involved in this case was entered during the effectivity of the New Civil Code. The Family Code has retroactive effect unless there be impairment of vested rights. Compare the case of TY vs CA and Atienza vs Brillantes Systems Factors Corp vs NLRC, 346 SCRA 149 (2000) The retroactive application of procedural laws is not violative of any right of a person who may feel that he is adversely affected. The reason is that as a general rule, no vested right may attach nor arise from procedural laws. Agujetas vs CA, 261 SCRA 17 (1996) Implied repeals are not to be favored because they rest only on the presumption that because the old and the new laws are incompatible with each other, there is an intention to repeal the old. There must be a plain, unavoidable and irreconcilable repugnancy between the two. Laguna Lake Development Authority vs CA, 251 SCRA 42 (1995) When there is a conflict between a general law and a special statute, the special statute should prevail since it evinces the legislative intent more clearly than the general statute. The special law is to be taken as an exception to the general law in the absence of special circumstances forcing a contrary conclusion. De Agbayani vs PNB, 38 SCRA 429 3

The Supreme Court declared the moratorium law unconstitutional but it did not allow to toll the prescriptive period of the right to foreclose the mortgage. The court adopted the view that before an act is declared unconstitutional it is an operative fact which can be the source of rights and duties.

Article 8. Stare Decisis; Case Law; See also Article 36, FC; article 9, 10, 11, 12 , 13, 14 NCC

Ting v. Velez-Ting, G.R. NO. 166562, Mar. 31, 2009 582 SCRA 694 The rule of stare decisis is not inflexible, whether it shall be followed or departed from, is a question entirely within the discretion of the court, which is again called upon to consider a question once decided. It is only when a prior ruling of this Court is overruled, and a different view is adopted, that the new doctrine may have to be applied prospectively in favor of parties who have relied on the old doctrine and have acted in good faith, in accordance therewith under the familiar rule of "lex prospicit, non respicit Floresca vs Philex Mining Corp.,G.R. 30642, April 30, 1985 The application or interpretation placed by the Supreme Court upon a law is part of the law as of the date of its enactment since the court’s application or interpretation merely establishes the contemporaneous legislative intent that the construed law purports to carry into effect. Mendiola vs CA, 258 SCRA 492 Equity, which has been described as “justice outside legality” is applied only in the absence of, and never against statutory law or judicial rules of procedure. Articles 15, 16, 17, 50, 51 (New Civil Code); Article 26, Family Code Van Dorn vs. Romillo G.R. NO.L-68470 October 8, 1985 139 SCRA 139 It is true that owing to the nationality principle embodied in Article 15 of the Civil Code, only Philippine nationals are covered by the policy against absolute divorces the same being considered contrary to our concept of public policy and morality. However, aliens may obtain divorces abroad,

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which may be recognized in the Philippines, provided they are valid according to their national law. Pilapil vs. Ibay-Somera, G.R. NO. 80116 June 30, 1989 174 SCRA 652 Whether or not, the complainant, a foreigner, qualify as an offended spouse having obtained a final divorce decree under his national law prior to his filing the criminal complaint. The person who initiates the adultery case must be an offended spouse, and by this is meant that he is still married to the accused spouse, at the time of the filing of the complaint. Recio vs. Recio G.R. NO. 138322. October 2, 2001 366 SCRA 437 Whether or not the divorce must be proved before it is to be recognized in the Philippines. Before a foreign divorce decree can be recognized by our courts, the party pleading it must prove the divorce as a fact and demonstrate its conformity to the foreign law allowing it. Presentation solely of the divorce decree is insufficient. Roehr v. Rodriguez,G.R. NO. 142820 ,Jun. 30, 2003 404 SCRA 495 As a general rule, divorce decrees obtained by foreigners in other countries are recognizable in our jurisdiction, but the legal effects thereof, e.g. on custody, care and support of the children, must still be determined by our courts. Morigo v. People, G.R. NO. 145226 , Feb. 6, 2004 422 SCRA 376 The mere private act of signing a marriage contract bears no semblance to a valid marriage and thus, needs no judicial declaration of nullity. Such act alone, without more, cannot be deemed to constitute an ostensibly valid marriage for which petitioner might be held liable for bigamy unless he first secures a judicial declaration of nullity before he contracts a subsequent marriage. (Pro hac vice case) Rep. v. Orbecido, G.R. NO. 154380, Oct. 05, 2005 472 SCRA 114 – Whether or not, a Filipino Spouse can remarry under ARTICLE 26 OF THE FAMILY CODE where his,her spouse is later naturalized as a foreign citizen and obtains a valid divorce decree capacitating him or her to remarry. The reckoning point is not the citizenship of the parties at the time of the celebration of the marriage, but their citizenship at the time a valid divorce is obtained abroad by the alien spouse capacitating the latter to remarry.

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Corpuz v. Sto. Tomas, G.R.NO. 186571, Aug. 11, 2010 628 SCRA 266 In Gerbert’s case, since both the foreign divorce decree and the national law of the alien, recognizing his or her capacity to obtain a divorce, purport to be official acts of a sovereign authority, Section 24, Rule 132 of the Rules of Court comes into play. This Section requires proof, either by (1) official publications or (2) copies attested by the officer having legal custody of the documents. If the copies of official records are not kept in the Philippines, these must be (a) accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippine foreign service stationed in the foreign country in which the record is kept and (b) authenticated by the seal of his office. Human Relations; Abuse of Rights, Unjust Enrichment; Malicious Prosecution; Independent Civil Action; Arts. 1724; 2142; 2154; 2164; 2176, NCC

Amonoy vs Gutierrez, 351 SCRA 731 (2001) One who merely exercises one;s rights does no actionable injury and cannot be held liable for damages. Albenson Enterprises Corp. vs CA,217 SCRA 18 (1993) The elements of an abuse of right under article 19are the following: 1. There is a legal right or duty; 2. Which is exercised in bad faith; 3. For the sole intent of prejudicing or injuring another. RCPI vs CA, 143 SCRA 657 (1986) Dionela filed a complaint for damages against RCPI alleging that the defamatory words on the telegram sent to him not only wounded his feelings but also caused him undue embarrassment and affected his business as well as because other people have come to know of said defamatory words. There is a clear case of breach of contract by the petitioner in adding extraneous and libelous matters in the message sent to Dionela. Constantino vs Mendez 209 SCRA 18 (1992) Mere sexual intercourse is not by itself a basis for recovery. Damages could only be awarded if sexual intercourse is not a product of voluntariness and mutual desire. Gashme Shookat Baksh vs CA,219 SCRA115 (1993) 6

Where a man’s promise to marry is in fact the proximate cause of the acceptance of his love by a woman and his representation to fulfill that promise thereafter becomes the proximate cause of the giving of herself unto him a sexual congress, proof that he had, in reality, no intention of marrying her and that the promise was only a subtle scheme or deceptive device to entice or inveigle her to accept him and to obtain her consent to the sexual act, could justify the award of damages pursuant to article 21 of the new civil code not because of such promise to marry but because of the fraud and deceit behind it and the wilful injury to her honor and reputation which followed thereafter. Figueroa vs. Barranco, SBC Case NO. 519. July 31, 1997 276 5CRA 445 - His engaging in premarital sexual relations with complainant and promises to marry suggests a doubtful moral character on his part but the same does not constitute grossly immoral conduct. University of the East vs Jader, G.R. NO. 132344, Feb. 7, 2000 325 SCRA 805 A law student was allowed to graduate by his school with a failing grade but was later on prohibited by the said school to take the bar exams. The negligent act of a professor who fails to observe the rules of the school, for instance by not promptly submitting a student's grade, is not only imputable to the professor but is an act of the school, being his employer.

UP v. Philab, G.R. NO. 152411, Sept. 29, 2004 439 SCRA 467 Whether or not UP is liable to pay PHILAB considering that it is only a donee of FEMF, FEMF being the one which funded the project, and despite being a donee, unjust enrichment still applies to UP. In order that accion in rem verso may prosper, the essential elements must be present: (1) that the defendant has been enriched, (2) that the plaintiff has suffered a loss, (3) that the enrichment of the defendant is without just or legal ground, and (4) that the plaintiff has no other action based on contract, quasi-contract, crime or quasi-delict. Beumer vs. Amores, G.R. NO. 195670, Dec. 03, 2012 686 SCRA 770 An action for recovery of what has been paid without just cause has been designated as an accion in rem verso. This provision does not apply if, as in this case, the action is proscribed by the Constitution or by the application of the pari delicto doctrine.

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Padalhin vs. Laviña, G.R. NO. 183026,Nov. 14, 2012 685 SCRA 549 Nestor himself admitted that he caused the taking of the pictures of Lavina's residence without the latter's knowledge and consent. Nestor violated the New Civil Code prescriptions concerning the privacy of one's residence and he cannot hide behind the cloak of his supposed benevolent intentions to justify the invasion.

Civil Personality; Birth; Death; Arts 37, 38, 39 40, 41, 42; 390, 391, 712, 777 NCC; Art. 41, 96 &124, 99 & 126, 142 FC

Geluz vs CA, July 20, 1961 It is unquestionable that the appellant’s act in provoking the abortion of appellee’s wife, without medical necessity to warrant it, was a criminal and morally reprehensible act, that cannot be to severely condemned; and the consent of the woman or that of her husband does not excuse it. But the immorality or illegality of the act does not justify an award of damage that, under the circumstances on record, have no factual or legal basis. Quimiguing vs ICAO, 34 SCRA 132 (1970 A conceived child, although as yet unborn, is given by law a provisional personality of its own for all purposes favorable to it, as explicitly provided under article 40 of the civil code. Continental Steel v. Montaño, G.R. NO. 182836 , Oct.13, 2009 603 SCRA 621 Whether or not, a death of a fetus is considered a death of a dependent of the parent. One need not acquire civil personality first before he/she could die. Even a child inside the womb already has life. No less than the Constitution recognizes the life of the unborn from conception, that the State must protect equally with the life of the mother. If the unborn already has life, then the cessation thereof even prior to the child being delivered, qualifies as death. Domicile; Arts 50 & 51 NCC; Arts. 68 & 69, FC; Residence v. Domicile; Annulment or Nullity of Marriages – AM 02-11-10 SC; Settlement of Estate 8

Marriage Definition, Marriage as contract and social institution, Presumption of Marriage, Proof of Marriage,Offer of Marriage

Tuazon vs CA, 256 SCRA 158 Our Family Law is based on the policy that marriage is not a mere contract, but a social institution in which the State is vitally interested. Perido vs Perido, 63 SCRA 97 It is the union (and inviolable social institution) of one man with one woman for the reciprocal blessings of a domestic home life, and for the birth, rearing, and education of children. In one case, the Supreme Court ruled that marriage is also a new relation in the maintenance of which the general public is interested. People v. Casao, 220 SCRA 362 The offer of the accused to marry the victim establishes his guilt. As a rule in rape cases, an offer of marriage is an admission of guilt People vs. Borromeo,133 SCRA 106, 109 (1984) Persons living together in apparent matrimony are presumed, in the absence of any counter-presumption or evidence special to the case, to be in fact married. The reason is that such is the common order of society, and if the parties were not what they thus hold themselves out as being, they would be living in the constant violation of decency and of law. People v. Ignacio, 81 SCAD 138 (1997) Appellant’s own admission that she was married to the victim was a confirmation of the semper praesumitur matrimonio and the presumption that a man and a woman so deporting themselves as husband and wife had verily acted into a lawful contract of marriage. Proof of Marriage; Marriage Certificate v. Presumption of Marriage; Torrens Title Entry “Single, Civil Status’’; Villanueva vs. CA, 198 SCRA 472 (1991) 9

The best documentary evidence of a marriage is the marriage contract. A marriage contract renders unnecessary the presumption that a man and a woman deporting themselves as husband and wife have entered into a lawful contract of marriage. Balogbog vs. CA, 269 SCRA 259, 266 (1997) Although a marriage contract is considered primary evidence of marriage, the failure to present it is not, however, proof that no marriage took place, as other evidence may be presented to prove marriage. People vs. Borromeo, 133 SCRA 106, 110 (1984) The mere fact that no record of the marriage exists in the registry of marriage does not invalidate said marriage, as long as in the celebration thereof, all requisites for its validity are present. The forwarding of a copy of the marriage certificate to the registry is not one of said requisites. Pugeda vs. Trias, 4 SCRA 849, 855 (1962) The defendants questioned the marriage of plaintiff by presenting the records of the municipality of Rosario, Cavite to show that there is no record of the alleged marriage. The court admitted evidence consisting of the testimonies of witnesses. Trinidad vs. Court of Appeals, et. al., 289 SCRA 188 (1998) The Supreme Court held that the following may be presented as proof of marriage: (a) testimony of a witness to the matrimony; (b) the couple’s public and open cohabitation as husband and wife after the alleged wedlock; (c) the birth and baptismal certificate of children born during such union; and (d) the mention of such nuptial in subsequent documents. Hernandez vs. CA, 320 SCRA 76. The law favors the validity of marriage because the State is interested in the preservation of the family and sanctity of the family is a matter of constitutional concern. The burden of proof to show the nullity of the marriage rests upon the party seeking its nullity Añonuevo v. Estate of Jalandoni G.R. NO. 178221, Dec. 1, 2010 636 SCRA 420

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The birth certificate of Sylvia was presented to prove the marriage between Isabel and John despite the absence of the marriage certificate. The court held that the birth certificate may serve as evidence to prove the marriage between Isabel and John , as it contains the following notable entries: (a) that Isabel and John Desantis were "married" and (b) that Sylvia is their "legitimate" child. Villatuya v. Tabalingcos, A.C. NO. 6622 676 SCRA 37 A lawyer was married three times, while the first marriage was still subsisting, his marriage contracts as certified by the NSO was presented in the disbarment proceeding to prove his subsequent marriages. For purposes of disbarment proceeding, these marriage contracts bearing the name of respondent are competent and convincing evidence proving that he committed bigamy. Compare the case of Añonuevo v. Estate of Jalandoni and Villatuya v. Tabalingcos A.C. NO. 6622 676 SCRA 37 Cariño v. Cariño, G.R. NO. 132529 , Feb. 02, 2001 351 SCRA 127 Whether or not the certification by the registrar of the non-existence of marriage license is enough to prove non-issuance thereof. The records reveal that the marriage contract of petitioner and the deceased bears no marriage license number and, as certified by the Local Civil Registrar of San Juan, Metro Manila, their office has no record of such marriage license. Requirements of Marriage Essential requisite Legal Capacity and Consent Formal Requisite Marriage License ; Civil Wedding v. Church Wedding; Certificate of Civil Registrar; Alcantara v. Alcantara, G.R. NO. 167746 , Aug. 28,2007 531 SCRA 446 Whether or not, a marriage license issued by a municipality or city to a non-resident invalidates the license. Issuance of a marriage license in a city or municipality, not the residence of either of the contracting parties, and issuance of a marriage license despite the absence of publication or prior to the completion of the 10-day period for publication are

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considered mere irregularities that do not affect the validity of the marriage Abbas v. Abbas, G.R. NO. 183896 , Jan. 30, 2013 689 SCRA 636 The Municipal Civil Registrar of Carmona, Cavite, where the marriage license of Gloria and Syed was allegedly issued, issued a certification to the effect that no such marriage license for Gloria and Syed was issued, and that the serial number of the marriage license pertained to another couple, Arlindo Getalado and Myra Mabilangan. The fact that the names in said license do not correspond to those of Gloria and Syed does not overturn the presumption that the registrar conducted a diligent search of the records of her office. Compare the case of Abbas v. Abbas and Alcantara v. Alcantara Sy v. CA, G.R. NO. 127263 , Apr. 12, 2000 330 SCRA 550 In this case the marriage license was issued on September 17,1974, almost one year after the ceremony took place on November 15, 1973. The ineluctable conclusion is that the marriage was indeed contracted without a marriage license.

Marriages Exempted from the License Requirement Art. 27 – 34 FC Cruz v. Catandes, C.A., 39 O.G. NO. 18, p. 324 In a marriage in articulo mortis, while it is advisable that a witness to the marriage should sign the dying party’s signature if the latter be physically unable to do so, still if upon order of the solemnizing official, another person should so sign, the marriage is still valid. The law as much as possible intends to give legal effect to a marriage. As a matter of fact, no particular form for a marriage celebration is prescribed. Soriano v. Felix, L-9005, June 20, 1958 The affidavit is for the purpose of proving the basis for exemption from the marriage license. Even if there is failure on the part of the solemnizing officer to execute the necessary affidavit, such irregularity will not invalidate the marriage for the affidavit is not being required of the parties. People v. Dumpo, 62 Phil. 246 No judicial notice can be taken of Mohammedan rites and customs for marriage. They must be alleged and proved in court. 12

Borja-Manzano vs. Sanchez, 354 SCRA 1, 5 (2001) The solemnizing officer must execute a sworn statement that he had ascertained the qualifications of the parties and that he had found no legal impediment to their marriage. Niñal vs. Bayadog 328 SCRA 122, March 14, 2000 In this case, at the time of Pepito and respondent’s marriage, it cannot be said that they have lived with each other as husband and wife for at least five years prior to their wedding day because their cohabitation is not exclusive. The Court ruled that the cohabitation contemplated under said provisions must be in the “nature of a perfect union that is valid under the law but rendered imperfect only by the absence of the marriage contract” and “characterized by exclusivity meaning nothird party was involved at anytime within the 5 years andcontinuity that is unbroken.

Marriage Ceremony Morigo vs People, 422 SCRA 376 (2004) Petitioner and Lucia Barrette merely signed the marriage contract on their own. The mere act of signing a marriage contract by the contracting parties without the presence of the solemnizing officer will not result to marriage. Infante vs Arenas, June 29, 1951 The failure of the solemnizing officer to ask the parties whether they take each other as husband and wife cannot be regarded as a fatal omission if the parties nonetheless signed the marriage contract in the presence of the solemnizing officer. A declaration of word of mouth of what the parties and already stated in writing would be a mere repetition, so that its omission should not be regarded as fatal. People v. Opeña, L-34954, Feb. 20, 1981 If a man and a woman deport themselves as if they were husband and wife, they are presumed to be validly and legally married to each other and this presumption is not rebutted by a mere denial by the man (or woman) of the fact of marriage.

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Persons who may solemnize Marriages Arañes v. Occiano, A.M. 02-1390 , April 11, 2002 380 SCRA 402 The respondent Judge solemnized marriage without the requisite marriage license. Where a judge solemnizes a marriage outside his court’s jurisdiction, there is a resultant irregularity in the formal requisite laid down in article 3, which while it may not affect the validity of marriage, may subject the officiating official to administrative liability. OCA vs. J. Necessario et al, A.M. NO. 07-1691,April 2, 2013 695 SCRA The court does not accept the arguments of the respondent judges that the ascertainment of the validity of the marriage license is beyond the scope of the duty of a solemnizing officer especially when there are glaring pieces of evidence that point to the contrary. As correctly observed by the OCA, the presumption of regularity accorded to a marriage license disappears the moment the marriage documents do not appear regular on its face. Compare the ruling of the court in the case of Cariño v. Cariño and OCA vs. J. Necessario et al as to the duty of the solemnizing officer to examine the validity of marriage license. Marriage in good faith Effect of Absence of Essential and Formal requisite Arts. 15-17,50-5, NCC; Art.26, FC; Divorce [Filipino; Foreigner; Parenting; Children, Property Rights; Succession rights]; Declaratory Relief; Rule 108;; Art. 412 NCC Rep. v. Orbecido, G.R. NO. 154380, Oct. 05, 2005 472 SCRA 114 – Whether or not, a Filipino spouse of an alien, who is a Filipino at the time of marriage, remarry after the latter acquires a foreign divorce that allows her to remarry. The reckoning point is not the citizenship of the parties at the time of the celebration of the marriage, but their citizenship at the time a valid divorce is obtained abroad by the alien spouse capacitating the latter to remarry. Corpuz v. Sto. Tomas, G.R. NO. 186571, Aug. 11, 2010 628 SCRA 266 A judgment of divorce is a judicial decree, although a foreign one, affecting a person’s legal capacity and status that must be recorded. But while the law requires the entry of the divorce decree in the civil registry, 14

the law and the submission of the decree by themselves do not ipso facto authorize the decree’s registration. Classification of Marriages, Relationships. Parties In Interest; NCC;FC;AM 02-11-10 SC Valid Voidable Void Terminable Others Classifications Legal Separation Separation in Fact Common Law Relationship Void Marriages vs Voidable Marriages Suntay vs. Conjuangco-Suntay, 300 SCRA 760, 770 (1998) The fundamental distinction between void and voidable marriages is that a void marriage is deemed never to have taken place at all and cannot be the source of rights. On the other hand, a voidable marriage, is considered valid and produces all its civil effects, until it is set aside by final judgment of a competent court in an action for annulment Declaration of Nullity; NCC v. FC, AM 02-11-10 SC; Civil Code and Muslim Code [PD 1083] Proper party to petition for nullity of marriage; AM 02-11-10 SC Ablaza v. Republic, G.R. NO. 158298 , Aug. 11, 2010 628 SCRA 27 Indeed, a brother like the petitioner, albeit not a compulsory heir under the laws of succession, has the right to succeed to the estate of a deceased brother under the conditions stated in Article 1001 and Article 1003 of the Civil Code Necessarily, therefore, the right of the petitioner to bring the action hinges upon a prior determination of whether Cresenciano had any descendants, ascendants, or children (legitimate or illegitimate), and of whether the petitioner was the late Cresenciano’s surviving heir. Such prior determination must be made by the trial court, for the inquiry thereon involves questions of fact.

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Juliano-Llave v. Republic, G.R. NO. 169766 , Mar. 30, 2011 646 SCRA 637 The marriage between the late Sen. Tamano and Zorayda was celebrated in 1958, solemnized under civil and Muslim rites. The only law in force governing marriage relationships between Muslims and non-Muslims alike was the Civil Code of 1950, under the provisions of which only one marriage can exist at any given time. Procedure in declaration of nullity of marriage Carlos v. Sandoval G.R. NO. 179922 , Dec. 16, 2008 574 SCRA 116 Whether a marriage may be declared void ab initio through a judgment on the pleadings or a summary judgment and without the benefit of a trial. The grounds for declaration of absolute nullity of marriage must be proved. Neither judgment on the pleadings nor summary judgment is allowed. So is confession of judgment disallowed. Bolos v. Bolos, G.R. NO. 186400 , Oct. 20, 2010 634 SCRA 429 Whether or not A.M. NO. 02-11-10-SC “RULE ON DECLARATION OF ABSOLUTE NULLITY OF VOID MARRIAGES AND ANNULMENT OF VOIDABLE MARRIAGES” is applicable to marriages solemnized before the effectivity of Family Code. NO. The Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages as contained in A.M. NO. 02-11-10-SC which the Court promulgated on March 15, 2003 Article 36, FC; AM 02-11-10 SC; See also Articles 48, 68-71, 220-221 & 225 FC Psychological Incapacity –Definition Salita vs Hon. Magtolis ,June 13, 1994 The Committee did not give any examples of psychological incapacity for fear that the giving of examples would limit the applicability of the provision under the principle of ejusdem generis. Rather, the Committee would like the judge to interpret the provision on a case-to-case basis, guided by experience, the findings of experts and researchers in psychological disciplines, and by decisions of church tribunals which, although not binding on the civil courts, may be given persuasive effect since the provision was taken from Canon Law.” Characteristics of Psychological Incapacity

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Santos v. Court of Appeals, 240 SCRA 20 (1995) The Supreme Court enumerated the three basic requirements of “psychological incapacity” as a ground for declaration of nullity of the marriage: (a) gravity; (b) juridical antecedence; and (c) incurability. Guidelines in the interpretation and application of Article 36; AM 02-11-10 SC Republic of the Philippines vs. Court of Appeals and Molina, 268 SCRA 198, 212 (1997) The burden of proof to show the nullity of the marriage belongs to the plaintiff. Any doubt should be resolved in favor of the existence and continuation of the marriage and against its dissolution and nullity. Republic vs. Quintero-Hamano, 428 SCRA 735 (2004). According to the appellate court, the requirements in Molina and Santos do not apply here because the present case involves a ‘mixed marriage,’ the husband being a Japanese national. The court held that in proving psychological incapacity, we find no distinction between an alien spouse and a Filipino spouse.

Failure to comply with the Essential Marital Obligations Chi Ming Tsoi vs CA, 266 SCRA 324 (1997) In this case, there was no sexual contact between the parties since their marriage on May 22, 1988 up to Mar. 15, 1989 or for almost a year. The senseless and protracted refusal of one of the parties of sexual cooperation for the procreation of children is equivalent to psychological incapacity. Marable v. Marable G.R. NO. 178741, Jan. 17, 2011 639 SCRA 557

The appellate court correctly ruled that the report of Dr. Tayag failed to explain the root cause of petitioner’s alleged psychological incapacity. The evaluation of Dr. Tayag merely made a general conclusion that 17

petitioner is suffering from an Anti-social Personality Disorder but there was no factual basis stated for the finding that petitioner is a socially deviant person, rebellious, impulsive, self-centered and deceitful.

Ochosa v. Alano, G.R. NO. 167459 , Jan. 26, 2011 640 SCRA 517 In this case the court proved that respondent was the sex partner of many military officials. In view of the foregoing, the badges of Bona’s alleged psychological incapacity, i.e., her sexual infidelity and abandonment, can only be convincingly traced to the period of time after her marriage to Jose and not to the inception of the said marriage. Yambao v. REP., G.R. NO. 184063 , Jan. 24, 2011 640 SCRA 355 Article 36 contemplates incapacity or inability to take cognizance of and to assume basic marital obligations and not merely difficulty, refusal, or neglect in the performance of marital obligations or ill will. Rep. v. Galang G.R. NO. 168335 , Jun. 6, 2011 650 SCRA 524 In like manner, Juvy’s acts of falsifying the respondent’s signature to encash a check, of stealing the respondent’s ATM, and of squandering a huge portion of the P15,000.00 that the respondent entrusted to her, while no doubt reprehensible, cannot automatically be equated with a psychological disorder, especially when the evidence shows that these were mere isolated incidents and not recurring acts.

Aurelio v. Aurelio, G.R. NO. 175367 , Jun. 6, 2011 650 SCRA 561 Whether or not a petition for nullity of marriage on the ground of psychological incapacity may be dismiss for failure to comply with the guidelines set forth in the Molina Ruling. Let it be remembered that each case involving the application of Article 36 must be treated distinctly and judged not on the basis of a priori assumptions, predilections or generalizations but according to its own attendant facts. Kalaw v. Fernandez, G.R. NO. 166357 , Sept 19, 2011 657 SCRA 822 He presented the testimonies of two supposed expert witnesses who concluded that respondent is psychologically incapacitated, but the conclusions of these witnesses were premised on the alleged acts or behavior of respondent which had not been sufficiently proven. Sexual

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infidelity per se is a G.R.ound for legal separation, but it does not necessarily constitute psychological incapacity. Toring v. Toring, G.R. NO. 165321 , Aug. 03, 2010 626 SCRA 389 We are in no way convinced that a mere narration of the statements of Ricardo and Richardson, coupled with the results of the psychological tests administered only on Ricardo, without more, already constitutes sufficient basis for the conclusion that Teresita suffered from Narcissistic Personality Disorder. This Court has long been negatively critical in considering psychological evaluations, presented in evidence, derived solely from one-sided sources, particularly from the spouse seeking the nullity of the marriage. Baccay v. Baccay, G.R. No 173138 , Dec, 1, 2010 636 SCRA 350 In this case, the totality of evidence presented by Noel was not sufficient to sustain a finding that Maribel was psychologically incapacitated. Noel’s evidence merely established that Maribel refused to have sexual intercourse with him after their marriage, and that she left him after their quarrel when he confronted her about her alleged miscarriage.

Agraviador v. Agraviador G.R.NO.170729 , Dec. 08, 2010 637 SCRA 519 In the present case, the petitioner’s testimony failed to establish that the respondent’s condition is a manifestation of a disordered personality rooted on some incapacitating or debilitating psychological condition that makes her completely unable to discharge the essential marital obligations. If at all, the petitioner merely showed that the respondent had some personality defects that showed their manifestation during the marriage; his testimony sorely lacked details necessary to establish that the respondent’s defects existed at the inception of the marriage.

Mendoza v. Republic, G.R. NO. 157649,Nov 12, 2012 685 SCRA 16 Here, the expert’s testimony on Dominic’s psychological profile did not identify, much less prove, the root cause of his psychological incapacity because said expert did not examine Dominic in person before completing her report but simply relied on other people’s recollection and opinion for that purpose. Expert evidence submitted here did not establish the precise cause of the supposed psychological incapacity of Dominic, much less show that the psychological incapacity existed at the inception of the marriage. 19

Republic v. Encelan, G.R. NO. 170022 , Jan. 9, 2013 688 SCRA 215 In any event, sexual infidelity and abandonment of the conjugal dwelling, even if true, do not necessarily constitute psychological incapacity; these are simply grounds for legal separation. To constitute psychological incapacity, it must be shown that the unfaithfulness and abandonment are manifestations of a disordered personality that completely prevented the erring spouse from discharging the essential marital obligations. Evidentiary requirement Marcos vs Marcos, 343 SCRA 755 (2000) If the totality of evidence presented is enough to sustain a finding of psychological incapacity, then actual medical examination of the person concerned need not be resorted to. Award of Moral Damages Buenaventura vs CA, 454 SCRA 261 (2005) By declaring the petitioner as psychologically incapacitated, the possibility of awarding moral damages on the same set of facts was negated. The award of moral damages should be predicated, not on the mere act of entering into the marriage, but on specific evidence that it was done deliberately and with malice by a party who had knowledge of his or her disability and yet willfully concealed the same. Prescription Niñal v. Bayadog G.R. NO. 133778=, Mar. 14, 2000 328 SCRA 122 The action or defense for nullity is imprescriptible, unlike voidable marriages where the action prescribes. Only the parties to a voidable marriage can assail it but any proper interested party may attack a void marriage. Declaration of Nullity; Art.40; Prejudicial Question- Section 7, Rule 117, 2000 Rules of Criminal Procedure; Arts.35 (4) & 41, FC; Art.349 RPC; Civil & Criminal Bigamy; Art. 83, NCC Judicial Declaration of nullity of marriages Ablaza v. Republic, G.R. NO. 158298 , Aug. 11, 2010 628 SCRA 27

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Other than for purposes of remarriage, no judicial action is necessary to declare a marriage an absolute nullity. For other purposes, such as but not limited to determination of heirship, legitimacy or illegitimacy of a child, settlement of estate, dissolution of property regime, or a criminal case for that matter, the court may pass upon the validity of marriage even in a suit not directly instituted to question the same so long as it is essential to the determination of the case. Atienza vs. Brillantes, Jr., 243 SCRA 32,35 (1995) Article 40 is applicable to remarriages entered into after the effectivity of the Family Code on August 3, 1988 regardless of the date of the first marriage. Mercado vs. Tan, 337 SCRA 122 (2000) A judicial declaration of nullity of a previous marriage is necessary before a subsequent one can be legally contracted and that one who enters into a subsequent marriage without first obtaining such judicial declaration is guilty of bigamy. Morigo v. People, G.R. NO. 145226, Feb. 06, 2004 422 SCRA 376 The existence and the validity of the first marriage being an essential element of the crime of bigamy, it is but logical that a conviction for said offense cannot be sustained where there is no first marriage to speak of. Jarillo v.People, G.R. NO.164435 , Sept. 29, 2009 601 SCRA 236 Whether or not the declaration of the first marriage as void ab initio on the ground of psychological incapacity is a defense for the crime of bigamy. In this case, even if petitioner eventually obtained a declaration that his first marriage was void ab initio, the point is, both the first and the second marriage were subsisting before the first marriage was annulled. Tenebro v. CA, G.R. NO. 150758 , Feb. 18, 2004 423 SCRA 272 Whether or not, the nullity of the second marriage on the G.R.ound of PI is a valid defense for the crime of bigamy. The declaration of the nullity of the second marriage on the ground of psychological incapacity is not an indicator that petitioner’s marriage to Ancajas lacks the essential requisites for validity. Antone v. Beronilla, G.R. NO.183824, Dec. 08, 2010 637 SCRA 615

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To conclude, the issue on the declaration of nullity of the marriage between petitioner and respondent only after the latter contracted the subsequent marriage is, therefore, immaterial for the purpose of establishing that the facts alleged in the information for Bigamy does not constitute an offense. Following the same rationale, neither may such defense be interposed by the respondent in his motion to quash by way of exception to the established rule that facts contrary to the allegations in the information are matters of defense which may be raised only during the presentation of evidence. Teves v. People, G.R. NO. 188775 , Aug 24, 2011 656 SCRA 307 The crime of bigamy was committed by petitioner on 10 December 2001 when he contracted a second marriage with Edita. The finality on 27 June 2006 of the judicial declaration of the nullity of his previous marriage to Thelma cannot be made to retroact to the date of the bigamous marriage. Nollora v. People, G.R. NO.191425 , Sept. 7, 2011 657 SCRA 330 Indeed, Article 13(2) of the Code of Muslim Personal Laws states that "[i]n case of a marriage between a Muslim and a non-Muslim, solemnized not in accordance with Muslim law or this Code, the [Family Code of the Philippines, or Executive Order NO. 209, in lieu of the Civil Code of the Philippines] shall apply." Thus, regardless of his professed religion, Nollora cannot claim exemption from liability for the crime of bigamy. Villatuya v. Tabalingcos, A.C. NO. 6622 , July 10, 2012 676 SCRA 37 Respondent exhibited a deplorable lack of that deG.R.ee of morality required of him as a member of the bar. He made a mockery of marriage, a sacred institution demanding respect and dignity.

Subsequent Bigamous Marriage under art. 41 Arts. 41- 44, 49 FC; Art.83 (2) NCC; Judicial Declaration of Presumptive Death Armas v. Calisterio, G.R. NO.136467, Apr. 06, 2000 330 SCRA 201 Whether or not, the rule under the FC, that a judicial declaration of presumptive death of the absent spouse is necessary before the present spouse can remarry, has a retroactive effect. A judicial declaration of absence of the absentee spouse is not necessary as long as the prescribed period of absence is met. It is equally noteworthy that the marriage in these exceptional cases are, by the explicit mandate of Article

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83, to be deemed valid "until declared null and void by a competent court." Requisites for declaration of presumptive Death Rep. v. Nolasco, G.R. NO. 94053 , Mar. 17, 1993 220 SCRA 20 In the case at bar, the Court considers that the investigation allegedly conducted by respondent in his attempt to ascertain Janet Monica Parker's whereabouts is too sketchy to form the basis of a reasonable or well-founded belief that she was already dead. When he arrived in San Jose, Antique after learning of Janet Monica's departure, instead of seeking the help of local authorities or of the British Embassy, he secured another seaman's contract and went to London, a vast city of many millions of inhabitants, to look for her there. Retroactive application of Art. 41 Valdez v. Republic, G.R. NO.180863 , Sept. 08, 2009 598 SCRA 646 Since death is presumed to have taken place by the seventh year of absence, Sofio is to be presumed dead starting October 1982. To retroactively apply the provisions of the Family Code requiring petitioner to exhibit "well-founded belief" will, ultimately, result in the invalidation of her second marriage, which was valid at the time it was celebrated. Effects of Declaration of Presumptive Death Effects of Recording of Affidavit of Reapperance Procedural rules of declaration of Presumptive Death Rep. v. Tango, G.R. NO.161062 , Jul. 31, 2009 594 SCRA 560 By express provision of law, the judgment of the court in a summary proceeding shall be immediately final and executory. As a matter of course, it follows that no appeal can be had of the trial court’s judgment in a summary proceeding for the declaration of presumptive death of an absent spouse under Article 41 of the Family Code Navarro v. Domogtoy, A.M. NO.MTJ-96-1088, Jul. 19, 1996 259 SCRA 129 Even if the spouse present has a well-founded belief that the absent spouse was already dead, a summary proceeding for the declaration of presumptive death is necessary in order to contract a subsequent marriage, a mandatory requirement which has been precisely incorporated into the Family Code to discourage subsequent marriages where it is not proven that the previous marriage has been dissolved or a

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missing spouse is factually or presumptively dead, in accordance with pertinent provisions of law. Rep. v. Bermudez-Lorino, G.R. NO. 160258 , Jan. 19, 2005 449 SCRA 57 Although the result of the Court of Appeals’ denial of the appeal would apparently be the same, there is a big difference between having the supposed appeal dismissed for lack of jurisdiction by virtue of the fact that the RTC decision sought to be appealed is immediately final and executory, and the denial of the appeal for lack of merit. In the former, the supposed appellee can immediately ask for the issuance of an Entry of Judgment in the RTC, whereas, in the latter, the appellant can still raise the matter to this Court on petition for review and the RTC judgment cannot be executed until this Court makes the final pronouncement. Rep. v. Granada, G.R. NO. 187512, June 13, 2012 672 SCRA 432 As a matter of course, it follows that no appeal can be had of the trial court's judgment in a summary proceeding for the declaration of presumptive death of an absent spouse under Article 41 of the Family Code. It goes without saying, however, that an agG.R.ieved party may file a petition for certiorari to question abuse of discretion amounting to lack of jurisdiction. Terminable Marriage; Art. 43 – 44 FC Effects of termination of subsequent marriage Effects of Bad Faith Armas v. Calisterio, G.R. NO.136467, Apr. 06, 2000 330 SCRA 201 Bad faith imports a dishonest purpose or some moral obliquity and conscious doing of wrong it partakes of the nature of fraud, a breach of a known duty through some motive of interest or ill-will. Voidable Marriages; Art. 45- 49 FC Definition Suntay vs. Cojuangco-Suntay, 300 SCRA 760, 771 (1998) A voidable marriage is considered valid and produces all its civil effects until it is set aside by final judgment of a competent court in an action for annulment. The terms “annul” and “null and void” have different legal connotations and implications. Annul means to reduce to nothing; to nullify; to abolish; to do away with; whereas, null and void is something that does not exist from the beginning. 24

Characteristics of Voidable Marriages Proper party to file annulment of Marriage G.R.ounds Ratification and prescription – Procedural rules of annulment of marriage and declaration of nullity Tuazon vs. Court of Appeals, 256 SCRA 158 (1996) The prosecuting attorney or fiscal may oppose the application for legal separation or annulment (or declaration of nullity of marriages) through the presentation of his own evidence, if in his opinion, the proof adduced is dubious and fabricated. Effects of judicial declaration of nullity of Marriage ; Art. 50-54 Title II. LEGAL SEPARATION (Articles 55-67) Concept Distinction of annulment and absolute divorce G.R.ounds Ong v. Ong, G.R. NO. 153206 , Oct. 23, 2006 505 SCRA 76 Also without merit is the argument of William that since Lucita has abandoned the family, a decree of legal separation should not be granted, following Art. 56, par. (4) of the Family Code which provides that legal separation shall be denied when both parties have given ground for legal separation. The abandonment referred to by the Family Code is abandonment without justifiable cause for more than one year. De facto Separation vs. Legal Separation,Article 63 Manzano vs. Sanchez, A.M. NO.00-1329, Mar. 08, 2001 354 SCRA 1 The fact that Manzano and Payao had been living apart from their respective spouses for a long time already is immaterial. Article 63(1) of the Family Code allows spouses who have obtained a decree of legal separation to live separately from each other, but in such a case the marriage bonds are not severed. SSS v. Aguas, G.R. NO. 165546 , Feb. 27, 2006 483 SCRA 383 25

On the claims of Rosanna, it bears stressing that for her to qualify as a primary beneficiary, she must prove that she was "the legitimate spouse dependent for support from the employee, whether one is actually dependent for support upon the other is something that has to be shown; it cannot be presumed from the fact of marriage alone. The obvious conclusion then is that a wife who is already separated de facto from her husband cannot be said to be "dependent for support" upon the husband, absent any showing to the contrary. Defenses in Legal Separation Art. 56- 57 Cooling off period; Art. 58 – 59 Pacete vs. Carriaga, Jr., G.R. NO. L-53880, March 17, 1994. In this interim, the court should take steps toward getting the parties to reconcile. Somosa-Ramos vs. Vamenta, Jr., G.R. NO. L-34132, July 29,1972 During this period, the court where the action is pending shall remain passive and is precluded from hearing the suit. Rule of Procedure on Legal Separation (A.M. NO. 02-11-11 SC); Rule on Provisional Orders (AM 02-11-12 SC); Bañez vs. Bañez, G.R. NO. 132592 , Jan. 23, 2002 374 SCRA 340 The effects of legal separation, such as entitlement to live separately, dissolution and liquidation of the absolute community or conjugal partnership, and custody of the minor children, follow from the decree of legal separation. They are not separate or distinct matters that may be resolved by the court and become final prior to or apart from the decree of legal separation. Pacete vs. Carriaga, G.R. NO. 53880, Mar. 17, 1994 231 SCRA 321 Whether or not, the order declaring in default a respondent in a legal separation case amounts to grave abuse of discretion. In case of nonappearance of the defendant, the court shall order the prosecuting attorney to inquire whether or not a collusion between the parties exists. If there is no collusion, the prosecuting attorney shall intervene for the State in order to take care that the evidence for the plaintiff is not fabricated. Quiao vs. Quiao, G.R. NO.176556 , July 4, 2012 675 SCRA 642 26

When the trial court issued its order dated November 8, 2006, it held that although the Decision dated October 10, 2005 has become final and executory, it may still consider the Motion for Clarification because the petitioner simply wanted to clarify the meaning of "net profit earned." Title III. RIGHTS AND OBLIGATIONS BETWEEN HUSBAND & WIFE (Arts 68-73) Ilusorio v. Bildner, G.R. NO. 139789 , May 12, 200 332 SCRA 169 Marital rights including coverture and living in conjugal dwelling may not be enforced by the extra-ordinary writ of habeas corpus. With his full mental capacity coupled with the right of choice, Potenciano Ilusorio may not be the subject of visitation rights against his free choice. Otherwise, we will deprive him of his right to privacy. Go vs. CA G.R. NO.114791, May 29, 1997 272 SCRA 752 Under Article 117 of the Civil Code (now Article 73 of the Family Code), the wife may exercise any profession, occupation or engage in business without the consent of the husband. In the instant case, we are convinced that it was only petitioner Nancy Go who entered into the contract with private respondent. Family expenses and management of the household TITLE IV. PROPERTY RELATIONS BET. HUSBAND & WIFE (Articles 74- 148) CHAPTER 1. GENERAL PROVISIONS; (Articles 74-81, FC; Art. 119, NCC)

Pre-nuptial

Agreement;

Concept Property regime by default Marriage settlement Parties to Marriage settlement Laws governing Property Relations CHAPTER 2. DONATIONS BY REASON OF MARRIAGE (Articles 8287) Donation Propter Nuptias Serrano vs. Solomon, G.R. NO. L-12093, June 29, 1959

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The following donations are not donations propter nuptias: (1) those made in favor of the spouses after the celebration of marriage; (2) those executed in favor of the future spouses but not in consideration of the marriage; and (3) those Ggranted to persons other than the spouses even though they may be founded on the marriage Rules governing Donation propter nuptias Heirs of Segunda Maningding vs. CA, 276 SCRA 601 (1997) Even if the donation proper nuptias is void for failure to comply with formal requisites, it could still constitute as legal basis for adverse possession. Valencia v. Locquiao, G.R. NO. 122134, Oct. 3, 200 412 SCRA 600 Under the Old Civil Code, donations propter nuptias must be made in a public instrument in which the property donated must be specifically described. However, Article 1330 of the same Code provides that "acceptance is not necessary to the validity of such gifts". In other words, the celebration of the marriage between the beneficiary couple, in tandem with compliance with the prescribed form, was enough to effectuate the donation propter nuptias under the Old Civil Code. Donation between the parties Donation of future properties Revocation of Donation Propter Nuptias Donation between Spouses Agapay vs. Palang, G.R. NO. 116668 , Jul. 28, 1997 276 SCRA 340 Article 87 of the Family Code expressly provides that the prohibition against donations between spouses now applies to donations between persons living together as husband and wife without a valid marriage, for otherwise, the condition of those who incurred guilt would turn out to be better than those in legal union. Arcaba vs. Batocael, G.R. NO.146683 , Nov.22, 2001 370 SCRA 414 Respondents having proven by a preponderance of evidence that Cirila and Francisco lived together as husband and wife without a valid marriage, the inescapable conclusion is that the donation made by Francisco in favor of Cirila is void under Art. 87 of the Family Code.

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CHAPTER 3. SYSTEM OF ABSOLUTE COMMUNITY (Articles 88-104); R.A. 8369 Section 1. General Provisions (Articles 88-90) Section 2. What constitutes Community Property (Articles 91-93) Section 3. Charges Upon & Obligations of the Absolute Community (Articles 94-95) Section 4. Ownership, Administration, Enjoyment & Disposition of the Community Property (Articles 96-98) Section 5. Dissolution of Absolute Community Regime (Arts 99-101) Section 6. Liquidation of the Absolute Community Assets & Liabilities (Arts 102-104); Succession; Probate; Sec. 3, Rule 87 Rules governing ACP Commencement of the ACP Prohibition on waiver of Rights, Interest, Shares and Effects Abalos vs Macatangay Jr., 439 SCRA 649, 662-663 (2004). Prior to the liquidation of the conjugal partnership, the interest of each spouse in the conjugal assets is inchoate, a mere expectancy, which constitutes neither a legal nor an equitable estate, and does not ripen into title until it appears that there are assets in the community as a result of the liquidation and settlement. The interest of each spouse is limited to the net remainder or “remanente liquido” (haber ganancial) resulting from the liquidation of the affairs of the partnership after its dissolution. CHAPTER 3. SYSTEM OF ABSOLUTE COMMUNITY (Articles 88-104); R.A. 8369 Section 1. General Provisions (Articles 88-90) Section 2. What constitutes Community Property (Articles 91-93) Section 3. Charges Upon & Obligations of the Absolute Community (Articles 94-95)

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Section 4. Ownership, Administration, Enjoyment & Disposition of the Community Property (Articles 96-98) Section 5. Dissolution of Absolute Community Regime (Arts 99-101) Section 6. Liquidation of the Absolute Community Assets & Liabilities (Arts 102-104); Succession; Probate; Sec. 3, Rule 87 Concept Homeowners Savings & Loan Bank vs. Dailo, 453 SCRA 283, 290 (2005) The regime of conjugal partnership of gains is a special type of partnership, where the husband and wife place in a common fund the proceeds, products, fruits and income from their separate properties and those acquired by either or both spouses through their efforts or by chance. Rules governing CPG Commencement of CPG Prohibition on waiver of Rights, Interest, Shares and Effects Quiao vs. Quiao G.R. NO. 176556 , July 4, 2012 675 SCRA 642 In this provision, net profits "shall be the increase in value between the market value of the community property at the time of the celebration of the marriage and the market value at the time of its dissolution."

General Provisions Dewara v. Lamela G.R. NO. 179010, Apr. 11, 2011 647 SCRA 483 All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife. Registration in the name of the husband or the wife alone does not destroy this presumption. De Leon v. De Leon G.R. NO. 185063 , Jul. 23, 2009 593 SCRA 768 – In the case at bar, ownership over what was once a PHHC lot and covered by the PHHC-Bonifacio Conditional Contract to Sell was only 30

transferred during the marriage of Bonifacio and Anita. Evidently, title to the property in question only passed to Bonifacio after he had fully paid the purchase price on June 22, 1970. Section 2. Exclusive Property of Each Spouse (Articles 109-115) Villegas v. Lingan G.R. NO. 153839 , Jun. 29, 2007 526 SCRA 63 Consequently, as correctly held by the CA, Marilou acquired ownership of the subject property. All rights and title of the judgment obligor are transferred upon the expiration of the right of redemption. And where the redemption is made under a property regime governed by the conjugal partnership of gains, Article 109 of the Family Code provides that property acquired by right of redemption is the exclusive property of the spouses redeeming the property.

Section 3. Conjugal Partnership Property (Articles 116-120); Article 160 NCC Presumption in Favor of Conjugality Tan vs. CA, 273 SCRA 229, 236 (1997) For the presumption to apply, it is not even necessary to prove that the property was acquired with funds of the partnership. In fact, even when the manner in which the property was acquired does not appear, the presumption applies and it will be considered conjugal property. Imani v. MBTC, G.R. NO.187023,Nov. 17, 2010 635 SCRA 357 The party who invokes it must first prove that the property was acquired during the marriage. Proof of acquisition during the coverture is a condition sine qua non to the operation of the presumption in favor of the conjugal partnership. Pisueña vs. Heirs of Petra Unating, G.R. NO. 132803 , Aug. 31, 1999 313 SCRA 384 The words "married to" were merely descriptive of Petra Unating's status at the time the lot was awarded and registered in her name. Since Petra Unating did not leave any other property, will or debt upon her demise in 1948, the property in question was thus inherited by her children, Felix and Catalina Villar; and her husband, Aquilino Villar.

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Improvement on Separate Property Determination of Ownership Ferrer v. Ferrer, G.R. NO.166496 , Nov. 29, 2006 508 SCRA 570 The obligation to reimburse rests on the spouse upon whom ownership of the entire property is vested. There is no obligation on the part of the purchaser of the property, in case the property is sold by the ownerspouse. Section 4.Charges Upon & Oblig.of the Conjugal Partnership (Articles 121-123) Alipio vs. Court of Appeals, G.R. NO. 134100, Sept. 29, 2000. A creditor cannot sue the surviving spouse of a decedent in an ordinary proceeding for the collection of a sum of money chargeable against the conjugal partnership and that the proper remedy is for him to file a claim in the settlement of estate of the decedent. Homeowner’s Savings & Loan Bank vs. Dailo, 453 SCRA 283 (2005) The burden of proof that the debt was contracted for the benefit of the conjugal partnership of gains lies with the creditor-party litigant claiming as such. Ayala Investment & Development Corp. vs. Court of Appeals, 286 SCRA 272 (1998) Where the husband contracts obligations on behalf of the family business, the law presumes, and rightly so, that such obligation will redound to the benefit of the conjugal partnership. Ching vs. CA, G.R. NO. 124642 , Feb. 23, 2004 423 SCRA 356

The barefaced fact that the shares of stocks were registered in the corporate books of Citycorp Investment Philippines solely in the name of the petitioner-husband does not constitute proof that the petitionerhusband, not the conjugal partnership, owned the same. Carlos vs. Abelardo, G.R. NO. 146504 , Apr. 09, 2002 380 SCRA 361 On the same principle, acknowledgment of the loan made by the defendant-wife binds the conjugal partnership since its proceeds 32

redounded to the benefit of the family. Hence, defendant-husband and defendant-wife are jointly and severally liable in the payment of the loan.

SBTC v. Mar Tierra Corp., G.R. NO. 143382 , Nov. 29, 2006 508 SCRA 419 To hold the conjugal partnership liable for an obligation pertaining to the husband alone defeats the objective of the Civil Code to protect the solidarity and well being of the family as a unit. The underlying concern of the law is the conservation of the conjugal partnership. Hence, it limits the liability of the conjugal partnership only to debts and obligations contracted by the husband for the benefit of the conjugal partnership. Ros v. PNB Laoag Br., G.R. NO.170166, Apr. 06, 2011 647 SCRA 334 It is enough that the benefit to the family is apparent at the signing of the contract. From the very nature of the contract of loan or services, the family stands to benefit from the loan facility or services to be rendered to the business or profession of the husband. Pana v. Heirs of Jose Juanite G.R. NO. 164201,Dec. 10, 2012 687 SCRA 414 Contrary to Efren’s contention, Article 121 above allows payment of the criminal indemnities imposed on his wife, Melecia, out of the partnership assets even before these are liquidated. Indeed, it states that such indemnities "may be enforced against the partnership assets after the responsibilities enumerated in the preceding article have been covered." No prior liquidation of those assets is required.

Section 5. Administration of the Conjugal Partnership Property (Articles 124-125) Joint Administration of CPG Disposition or Encumbrance of CPG Rules under the Civil Code Tinitigan vs. Tinitigan, Sr., NO. L- 45418, October 30, 1980, 100 SCRA 619. A husband may sell property belonging to the conjugal partnership even without the consent of the wife if the sale is necessary to answer for a big conjugal liability which might endanger the family’s economic standing. 33

This is one instance where the wife’s consent is not required and, impliedly, no judicial intervention is necessary. Spouses Guiang vs. Court of Appeals, G.R. No. 125172. June 26, 1998, Under the Civil Code, the encumbrance or alienation of a conjugal real property by the husband absent the wife’s consent, is voidable and not void. Roxas vs. CA G.R. NO. 92245, Jun. 26, 1991 198 SCRA 541 The joinder of the wife, although unnecessary for an oral lease of conjugal realty which does not exceed one year in duration, is required in a lease of conjugal realty for a period of more than one year, such a lease being considered a conveyance and encumbrance within the provisions of the Civil Code requiring the joinder of the wife in the instrument by which real property is conveyed or encumbered Guiang vs. CA, G.R. NO. 125172, Jun. 26, 1998 291 SCRA 372 The sale of a conjugal property requires the consent of both the husband and the wife. The absence of the consent of one renders the sale null and void, while the vitiation thereof makes it merely voidable. Only in the latter case can ratification cure the defect. Jader-Manalo vs. Camaisa, G.R. NO. 147978, Jan. 23, 2002 374 SCRA 498 Respondent Norma Camaisa admittedly did not give her written consent to the sale. Even G.R.anting that respondent Norma actively participated in negotiating for the sale of the subject properties, which she denied, her written consent to the sale is required by law for its validity. Significantly, petitioner herself admits that Norma refused to sign the contracts to sell.

Rules under the Family Code Uy vs. CA, G.R. NO. 10955, Nov. 29, 2000 346 SCRA 246 In regular manner, the rules on summary judicial proceedings under the Family Code govern the proceedings under Article 124 of the Family Code. The situation contemplated is one where the spouse is absent, or separated in fact or has abandoned the other or consent is withheld or cannot be obtained. Such rules do not apply to cases where the non34

consenting spouse is incapacitated or incompetent to give consent. In this case, the trial court found that the subject spouse "is an incompetent" who was in comatose. Ravina v. Villa Abrille G.R. NO. 160708, Oct. 16, 2009 604 SCRA 120 Just like the rule in absolute community of property, if the husband, without knowledge and consent of the wife, sells conjugal property, such sale is void. If the sale was with the knowledge but without the approval of the wife, thereby resulting in a disagreement, such sale is annullable at the instance of the wife who is given five (5) years from the date the contract implementing the decision of the husband to institute the case. De la Cruz v. Segovia, G.R. NO. 149801, Jun. 26, 2008 555 SCRA 453 While Florinda’s husband did not affix his signature to the abovementioned Agreement, we find no ground to disturb the uniform findings of the trial court and appellate court that Renato, by his actuations, agreed and gave his conformity to the Agreement. As found by the courts below, Renato’s consent to the Agreement was drawn from the fact that he was present at the time it was signed by the sisters and their witnesses; he had knowledge of the Agreement as it was presented to him for his signature, although he did not sign the same because his wife Florinda insisted that her signature already carried that of her husband; Renato witnessed the fact that Leonila contributed her hard earned savings in the amount of P36,000.00 to complete their share in the purchase price of the properties in question in the total amount of P180,000.00. Section 6. Dissolution of the Conjugal Partnership Regime (Articles 126-128) MBTC v. Pascual, G.R. NO. 163744, Feb. 29, 2008 547 SCRA 246 Termination of Conjugal Property Regime does not ipso facto End the Nature of Conjugal Ownership. While the declared nullity of marriage of Nicholson and Florencia severed their marital bond and dissolved the conjugal partnership, the character of the properties acquired before such declaration continues to subsist as conjugal properties until and after the liquidation and partition of the partnership. Diño v. Diño, G.R. NO. 178044, Jan. 19, 2011 640 SCRA 178 The trial court erred in ordering that a decree of absolute nullity of marriage shall be issued only after liquidation, partition and distribution of the parties’ properties under Article 147 of the Family Code. The ruling 35

has no basis because Section 19(1) of the Rule does not apply to cases governed under Articles 147 and 148 of the Family Code. Espinosa v. Omaña, AC. 9081, Oct 12, 2011 659 SCRA 1 Extrajudicial dissolution of the conjugal partnership without judicial approval is void. The Court has also ruled that a notary public should not facilitate the disintegration of a marriage and the family by encouraging the separation of the spouses and extrajudicially dissolving the conjugal partnership, which is exactly what Omaña did in this case. The "Kasunduan Ng Paghihiwalay" has no legal effect and is against public policy. Section 7. Liquidation of the Conjugal Partnership Assets & Liabilities (Articles 129-133); Agtarap v. Agtarap, G.R. NO. 177099, Jun. 8, 2011 651 SCRA 455 We hold that the general rule does not apply to the instant case considering that the parties are all heirs of Joaquin and that no rights of third parties will be impaired by the resolution of the ownership issue. More importantly, the determination of whether the subject properties are conjugal is but collateral to the probate court’s jurisdiction to settle the estate of Joaquin.

Go v. Servacio, G.R. NO. 157537, Sept. 7, 2011 657 SCRA 10 There being no dispute that Protacio, Sr. and Marta were married prior to the effectivity of the Family Code on August 3, 1988, their property relation was properly characterized as one of conjugal partnership governed by the Civil Code. Upon Marta’s death in 1987, the conjugal partnership was dissolved, pursuant to Article 175 (1) of the Civil Code, and an implied ordinary co-ownership ensued among Protacio, Sr. and the other heirs of Marta with respect to her share in the assets of the conjugal partnership pending a liquidation following its liquidation.

CHAPTER 5.SEPARATION OF PROP. OF THE SPOUSES & ADMINISTRATION OF COMMON PROPERTY BY ONE SPOUSE DURING THE MARRIAGE (Arts 134-142) CHAPTER 6. REGIME OF SEPARATION OF PROPERTY (Articles 143146) Grounds

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Voluntary Separation of Property Maquilan v. Maquilan, G.R. NO. 155409, Jun. 08, 2007 524 SCRA 166 – Under Article 143 of the Family Code, separation of property may be effected voluntarily or for sufficient cause, subject to judicial approval. The questioned Compromise Agreement which was judicially approved is exactly such a separation of property allowed under the law. Effects of Decree Granting Separation of Property

CHAPTER 7. PROPERTY REGIMES OF UNIONS WITHOUT MARRIAGE (Articles 147-148) Valdes vs. RTC Br. 102, QC G.R. NO. 122749, Jul. 31, 1996 260 SCRA 221 Whether or not, Articles 50, 51 and 52 in relation to Articles 102 and 129 of the Family Code govern the disposition of the family dwelling in cases where a marriage is declared void ab initio, including a marriage declared void by reason of the psychological incapacity of the spouses. The rules set up to govern the liquidation of either the absolute community or the conjugal partnership of gains, the property regimes recognized for valid and voidable marriages (in the latter case until the contract is annulled), are irrelevant to the liquidation of the co-ownership that exists between common-law spouses. Mallilin, Jr. vs. Castillo, G.R. NO. 136803, Jun. 16, 2000 333 SCRA 628 – The Family Code, in addition to providing that a co-ownership exists between a man and a woman who live together as husband and wife without the benefit of marriage, likewise provides that, if the parties are incapacitated to marry each other, properties acquired by them through their joint contribution of money, property or industry shall be owned by them in common in proportion to their contributions which, in the absence of proof to the contrary, is presumed to be equal. Diño v. Diño, G.R. NO. 178044,Jan. 19, 2011 640 SCRA 178 Petitioner’s marriage to respondent was declared void under Article 36 of the Family Code and not under Article 40 or 45. Thus, what governs the liquidation of properties owned in common by petitioner and respondent 37

are the rules on co-ownership. In Valdes, the Court ruled that the property relations of parties in a void marriage during the period of cohabitation is governed either by Article 147 or Article 148 of the Family Code. The rules on co-ownership apply and the properties of the spouses should be liquidated in accordance with the Civil Code provisions on coownership. Under Article 496 of the Civil Code, partition may be made by aG.R.eement between the parties or by judicial proceedings. It is not necessary to liquidate the properties of the spouses in the same proceeding for declaration of nullity of marriage. Lacbayan v. Samoy, G.R. NO. 165427, Mar. 21, 2011 645 SCRA 677 A careful perusal of the contents of the so-called Partition AG.R.eement indicates that the document involves matters which necessitate prior settlement of questions of law, basic of which is a determination as to whether the parties have the right to freely divide among themselves the subject properties. Moreover, to follow petitioner’s argument would be to allow respondent not only to admit against his own interest but that of his legal spouse as well, who may also be lawfully entitled co-ownership over the said properties. Cariño v. Cariño, G.R. NO. 132529, Feb. 02, 2001 351 SCRA 127 As to the property regime of petitioner Susan Nicdao and the deceased, Article 147 of the Family Code governs. This article applies to unions of parties who are legally capacitated and not barred by any impediment to contract marriage, but whose marriage is nonetheless void for other reasons, like the absence of a marriage license San Luis v. San Luis G.R. NO. 133743, Feb. 06, 2007 514 SCRA 294 In the instant case, respondent would qualify as an interested person who has a direct interest in the estate of Felicisimo by virtue of their cohabitation, the existence of which was not denied by petitioners. If she proves the validity of the divorce and Felicisimo’s capacity to remarry, but fails to prove that her marriage with him was validly performed under the laws of the U.S.A., then she may be considered as a co-owner under Article 144 76 of the Civil Code

TITLE V. THE FAMILY HOME CHAPTER 1. THE FAMILY AS AN INSTITUTION (Articles 149-151)

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Tuason vs. CA, 256 SCRA 158 (1996) Our family law is based on the policy that marriage is not a mere contract but a social institution in which the state is vitally interested. Hontiveros vs. RTC Iloilo City, G.R. NO. 125465, Jun. 29, 1999 309 SCRA 340 Religious relationship and relationship by affinity are not given any legal effect in this jurisdiction. Consequently, private respondent Ayson, who is described in the complaint as the spouse of respondent Hontiveros, and petitioner Maria Hontiveros, who is admittedly the spouse of petitioner Augusto Hontiveros, are considered strangers to the Hontiveros family, for purposes of Art. 151. Gayon v. Gayon, 36 SCRA 104 (1970) The enumeration of "brothers and sisters" as member of the same family does not comprehend "sisters-in-law." In that case, then Chief Justice Concepcion emphasized that "sisters-in-law" (hence, also "brother-inlaw") are not listed under Art. 217 of the New Civil Code as members of the same family.

Magbaleta vs. Gonong, 76 SCRA 511 Efforts to compromis are not a jurisdictional prerequisite for the maintenance of an action whenever a stranger to the family is a party thereto, whether as necessary or indispensable one. Tiggangay v. Wacas, AM OCA 09-3243, April 1, 2013 694 SCRA 264 Indeed, "there is no affinity between the blood relatives of one spouse and the blood relatives of the other. A husband is related by affinity to his wife’s brother, but not to the wife of his wife’s brother. There is no affinity between the husband’s brother and the wife’s sister; this is called affinitas affinitatis." CHAPTER 2. THE FAMILY HOME (Arts 152-162)

Taneo, Jr. vs. CA, CA, 304 SCRA 308 Family home is a real right, which is gratuitous, inalienable and free from attachment, constituted over the dwelling place and the land on 39

which it is situated, which confers upon a particular family the right to enjoy such properties, which must remain with the person constituting it and his heirs. Taneo vs. Court of Appeals, G.R. NO. 108562, Mar. 09, 1999 304 SCRA 308 By the very definition of the law that the “family home is the dwelling house where a person and his family resides and the land on which it is situated,” it is understood that the house should be constructed on a land not belonging to another.

Arriola v. Arriola, G.R. NO. 177703, Jan. 28, 2008 542 SCRA 666 Furthermore, Articles 152 and 153 specifically extend the scope of the family home not just to the dwelling structure in which the family resides but also to the lot on which it stands. Thus, applying these concepts, the subject house as well as the specific portion of the subject land on which it stands are deemed constituted as a family home by the deceased and petitioner Vilma from the moment they began occupying the same as a family residence 20 years back Modequillo vs. Breva, G.R. No. 86355, May 31, 1990. There is no need to constitute the same judicially or extrajudicially as required in the Civil Code. If the family actually resides in the premises, it is, therefore, a family home as contemplated by law Patricio vs. Dario, G.R. NO. 170829, November 20, 2006. Three requisites must concur before a minor beneficiary is entitled to the benefits of Art. 159: (1) the relationship enumerated in Art. 154 of the Family Code; (2) they live in the family home, and (3) they are dependent for legal support upon the head of the family.

Cabang v. Basay, G.R. NO. 180587, Mar. 20, 2009 582 SCRA 172 The family home must be established on the properties of (a) the absolute community, or (b) the conjugal partnership, or (c) the exclusive property of either spouse with the consent of the other. It cannot be established 40

on property held in co-ownership with third persons. However, it can be established partly on community property, or conjugal property and partly on the exclusive property of either spouse with the consent of the latter. Olivia De Mesa v. Acero, G.R. NO. 185064 Jan. 16, 2012 663 SCRA 40 The family home’s exemption from execution must be set up and proved to the Sheriff before the sale of the property at public auction. The petitioners now are barred from raising the same. Failure to do so estop them from later claiming the said exemption. Manacop vs. CA, 277 SCRA 57 (1997) Articles 152 and 153 of the Family Code do not have a retroactive effect such that all existing family residences are deemed to have been constituted as family homes at the time of their occupation prior to the effectivity of the Family Code and are exempt from execution for the payment of obligations incurred before the effectivity of the Family Code.

TITLE VI. PATERNITY & FILIATION Chapter I Legitimate Children Types of Filiation Status of Children Distinction between Paternity and Filiation Laws governing Paternity and Filiation Presumption of Legitimacy How to impugn Child’s Legitimacy

Benitez-Badua vs. CA G.R. NO. 105625, Jan. 24, 1994 229 SCRA 468 Article 170 of the Family Code is inapplicable to this case because this is not an action to impugn the legitimacy of a child, but an action of the private respondents to claim their inheritance as legal heirs of their childless deceased aunt. They do not claim that petitioner Violeta Cabatbat Lim is an illegitimate child of the deceased, but that she is not the decedent's child at all.

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Liyao vs. Tanhoti-Liyao,G.R. NO. 138961, Mar. 07, 2002 378 SCRA 563 The grounds for impugning the legitimacy of the child mentioned in Article 255 of the Civil Code may only be invoked by the husband, or in proper cases, his heirs under the conditions set forth under Article 262 of the Civil Code. Labagla vs. Santiago, G.R. NO. 132305, Dec. 04, 2001 371 SCRA 360 A baptismal certificate, a private document, is not conclusive proof of filiation. More so are the entries made in an income tax return, which only shows that income tax has been paid and the amount thereof. Macadangdang vs. Court of Appeals, 100 SCRA 73 In this case the husband and the wife continued to live in the same province after their alleged separation, the Court did not discount the possibility of physical access to each other considering their proximity to each other and considering further that the wife still visited and recuperated in her mother’s house where her spouse resided with their children. Andal vs. Macaraig, 89 Phil 165 The court held that just because tuberculosis is advanced in a man does not necessarily mean that he is incapable of sexual intercourse. There are cases where persons suffering from tuberculosis can do the carnal act even in the most crucial stage of health because then they seemed to be more inclined to sexual intercourse. Tison vs CA, 276 SCRA 582 (1997) The issue of legitimacy cannot be attacked collaterally. CHAPTER 2. PROOF OF FILIATION (Articles 172-174) Solinap vs. Locsin Jr. G.R. NO. 146737 , Dec. 10, 2001 371 SCRA 711 Whether or not the certificate of live birth (Exhibit D) as presented by the respondent, including the photograph showing that he and his mother attended the deceased funeral, is sufficient to proof filiation of the 42

petitioner to the deceased. A birth certificate offers only prima facie evidence of filiation and may be refuted by contrary evidence. Verceles v. Posada, G.R. NO.159785, Apr. 27, 2007 522 SCRA 518 The court held that the due recognition of an illegitimate child in a record of birth, a will, a statement before a court of record, or in any authentic writing is, in itself, a consummated act of acknowledgement of the child, and no further court action is required De Asis vs CA, 303 SCRA 176 Paternity or filiation, or the lack of it, is a relationship that must be judicially established and it is for the court to declare its existence or absence. Lucas v. Lucas, G.R. NO. 190710, Jun. 6, 2011 650 SCRA 667 Although a paternity action is civil, not criminal, the constitutional prohibition against unreasonable searches and seizures is still applicable, and a proper showing of sufficient justification under the particular factual circumstances of the case must be made before a court may order a compulsory blood test. Rodriguez vs. CA, G.R. NO. 85723, Jun. 19, 1995 245 SCRA 150 When a recognition has been made by one parent, the name of the other parent may be revealed in an action by the child to compel such other parent to recognize him also.

Heirs of Cabais vs. CA, G.R. NO. 106314-15,Oct. 08, 1999 316 SCRA 338 A baptismal certificate, a private document, which, being hearsay, is not a conclusive proof of filiation.

Cenido vs. Apacionado, G.R .NO. 132474, Nov. 19, 1999 318 SCRA 688 Under the law, this statement must be made personally by the parent himself or herself, not by any brother, sister or relative; after all, the concept of recognition speaks of a voluntary declaration by the parent, or if the parent refuses, by judicial authority, to establish the paternity or maternity of children born outside wedlock.

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Tayag v. Tayag-Gallor, G.R. NO. 174680, Mar. 24, 2008 549 SCRA 68 Petitioner, however, overlooks the fact that respondent’s successional rights may be established not just by a judicial action to compel recognition but also by proof that she had been voluntarily acknowledged and recognized as an illegitimate child. Respondent in this case had not been given the opportunity to present evidence to show whether she had been voluntarily recognized and acknowledged by her deceased father because of petitioner’s opposition to her petition and motion for hearing on affirmative defenses.

Puno v. Puno Ent. Inc., G.R. NO. 177066, Sept. 11, 2009 599 SCRA 585 A certificate of live birth purportedly identifying the putative father is not competent evidence of paternity when there is no showing that the putative father had a hand in the preparation of the certificate. The local civil registrar has no authority to record the paternity of an illegitimate child on the information of a third person.

Gotardo v. Buling, G.R. NO. 165166, Aug. 15, 2012 678 SCRA 436 We have held that such other proof of one's filiation may be a "baptismal certificate, a judicial admission, a family bible in which [his] name has been entered, common reputation respecting his pediG.R.ee, admission by silence, the testimonies of witnesses, and other kinds of proof admissible under Rule 130 of the Rules of Court." In this case, the respondent established a prima facie case that the petitioner is the putative father of Gliffze through testimony that she had been sexually involved only with one man, the petitioner, at the time of her conception. Rodulfo corroborated her testimony that the petitioner and the respondent had intimate relationship.

Lucas v. Lucas, G.R . NO. 190710, Jun. 6, 2011 650 SCRA 667 Although a paternity action is civil, not criminal, the constitutional prohibition against unreasonable searches and seizures is still applicable, and a proper showing of sufficient justification under the particular factual circumstances of the case must be made before a court may order a compulsory blood test.

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CHAPTER 3. ILLEGITIMATE CHILDREN (Articles 175-176) Rights of Illegitimate Children Tonog vs. CA, G.R. NO. 122906 , Feb. 07, 2002 376 SCRA 523 In the case at bar, bearing in mind that the welfare of the said minor as the controlling factor, the appellate court did not err in allowing her father to retain in the meantime parental custody over her. Meanwhile, the child should not be wrenched from her familiar surroundings, and thrust into a strange environment away from the people and places to which she had apparently formed an attachment.

Guy v. CA, G.R. NO. 163707, Sept. 15, 2006 502 SCRA 151 It is clear therefore that the resolution of the issue of prescription depends on the type of evidence to be adduced by private respondents in proving their filiation. However, it would be impossible to determine the same in this case as there has been no reception of evidence yet.

De La Cruz v. Gracia G.R. NO. 177728, Jul. 31, 2009 594 SCRA 648 Where the private handwritten instrument is the lone piece of evidence submitted to prove filiation, there should be strict compliance with the requirement that the same must be signed by the acknowledging parent. Where the private handwritten instrument is accompanied by other relevant and competent evidence, it suffices that the claim of filiation therein be shown to have been made and handwritten by the acknowledging parent as it is merely corroborative of such other evidence. Uy v. Chu, G.R. NO. 183965, Sept. 18, 2009 600 SCRA 806 It is settled, then, in law and jurisprudence, that the status and filiation of a child cannot be compromised. Public policy demands that there be no compromise on the status and filiation of a child. Paternity and filiation or the lack of the same, is a relationship that must be judicially established, and it is for the Court to declare its existence or absence. It cannot be left to the will or aG.R.eement of the parties.

CHAPTER 4. LEGITIMATED CHILDREN (Articles 177-182); 45

See RA 9858 Legitimation Concept and Definition Who can be Legitimated Procedure and effects of Legitimation Abadilla vs. Tabiliran, Jr. A.M NO. MTJ-92-716, Oct. 25, 1995 249 SCRA 447 Whether or not, a child born out of wedlock, by parents who have a legal impediment to marry each other, can be legitimated. As a lawyer and a judge, respondent ought to know that, despite his subsequent marriage to Priscilla, these three children cannot be legitimated nor in any way be considered legitimate since at the time they were born, there was an existing valid marriage between respondent and his first wife, Teresita B. Tabiliran. TITLE VII. ADOPTION Domestic Adoption Act of 1988 (RA 8552) as amended by RA 9523 (March 2009) A.M. NO. 02-6-02-SC - Re: Proposed Rule on Domestic Adoption Inter country Adoption Act of 1995 (RA 8043) Amended IRR on Inter-Country Adoption (January 8, 2004) Definition and concept of Adoption Domestic Adoption and Inter country Adoption Law governing Domestic Adoption Who are qualified to adopt and to be adopted Effects of Adoption Rescission of Adoption Procedure under ICA and DAA Republic vs. Vergara, G.R. NO. 95551, Mar. 20, 1997 270 SCRA 206 The law here does not provide for an alien who is married to a former Filipino citizen seeking to adopt jointly with his or her spouse a relative 46

by consanguinity, as an exception to the general rule that aliens may not adopt. Rosalina Dye cannot, on her own, adopt her brother and sister for the law mandates joint adoption by husband and wife, subject to exceptions.

Republic vs. Miller, G.R. NO.125932, Apr. 21, 1999 306 5CRA 183 An alien qualified to adopt under the Child and Youth Welfare Code, which was in force at the time of the filing of the petition, acquired a vested right which could not be affected by the subsequent enactment of a new law disqualifying him. Republic vs. Toledano, G.R. NO.94147, Jun. 08, 1994 233 SCRA 9 The Family Code reiterated the rule by requiring that husband and wife "must" jointly adopt, except in the cases mentioned before. Under the said new law, joint adoption by husband and wife is mandatory

Cang vs. CA, G.R. NO.105308, Sept. 25, 1998 296 SCRA 128 Physical estrangement alone, without financial and moral desertion, is not tantamount to abandonment. While admittedly, petitioner was physically absent as he was then in the United States, he was not remiss in his natural and legal obligations of love, care and support for his children. In re: Adoption of Michelle & Michael Lim G.R. NO.168992-93, May 21, 2009 588 SCRA 98 The filing of a case for dissolution of the marriage between petitioner and Olario is of no moment. It is not equivalent to a decree of dissolution of marriage. Until and unless there is a judicial decree for the dissolution of the marriage between petitioner and Olario, the marriage still subsists. That being the case, joint adoption by the husband and the wife is required.

Republic vs. CA & Bobiles, G.R. NO.92326, Jan. 24, 1992 205 SCRA 356 Under the Child and Youth Welfare Code, private respondent had the right to file a petition for adoption by herself, without joining her

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husband therein. When Mrs. Bobiles filed her petition, she was exercising her explicit and unconditional right under said law. Lahom vs. Sibulo, G.R. NO. 143989, July 14, 2003 R.A. NO. 8552 has unqualifiedly withdrawn from an adopter a consequential right to rescind the adoption decree even in cases where the adoption might clearly turn out to be undesirable. TITLE VIII. SUPPORT Concept of Support G.R.ounds for Action for Support Right to support Order of liability for support Contractual support vs Legal Support Mangonon v. CA, G.R. NO. 125041 , June.30, 2006 494 SCRA 1 The grandparents are liable to support their grandchildren if the parent cannot give support or sufficient support. Lim v. Lim, G.R. NO. 163209, Oct. 30, 2009 604 SCRA 691 The inability of the parents to sufficiently provide for their children shifts a portion of their obligation to the ascendants in the nearest degree, both in the paternal (petitioners) and maternal lines, following the ordering in Article 199. Gan vs. Reyes, G.R. NO.145527, May.28, 2002 382 SCRA 357 A judgment ordering for support is immediately executory despite pendency of appeal. De Asis vs. CA, G.R. NO.127578, Feb. 15, 1999 303 SCRA 176 Whether or not, a renunciation of the existence of filiation of the child and the putative father, made by the mother, is valid. It is true that in order to claim support, filiation and,or paternity must first be shown between the claimant and the parent, however, paternity and filiation or the lack of the same is a relationship that must be judicially established and it is for the court to declare its existence or absence.

TITLE IX. PARENTAL AUTHORITY CHAPTER 1. GENERAL PROVISIONS (Articles 209-215) 48

Concept Effects of Parental Authority Santos Sr. v. CA, G.R. NO. 113054, Mar. 16, 1995 242 SCRA 407 When a parent entrusts the custody of a minor to another, such as a friend or godfather, even in a document, what is given is merely temporary custody and it does not constitute a renunciation of parental authority. Even if a definite renunciation is manifest, the law still disallows the same. Parents who exercises Parental Authority Joint Parental Authority Rule in case of Separation of Parents Perez v. CA, G.R. NO. 118870, Mar. 29, 1996 255 SCRA 661 Only the most compelling of reasons shall justify the court's awarding the custody of such a child to someone other than his mother, such as her unfitness to exercise sole parental authority. In the past the following grounds have been considered ample justification to deprive a mother of custody and parental authority: neglect, abandonment, unemployment and immorality, habitual drunkenness, drug addiction, maltreatment of the child, insanity and being sick with a communicable disease. Laxamana v. Laxamana, G.R. NO. 144763, Sept. 3, 2002 388 SCRA 296 It is clear that every child [has] rights which are not and should not be dependent solely on the wishes, much less the whims and caprices, of his parents. His welfare should not be subject to the parents' say-so or mutual agreement alone. Where, as in this case, the parents are already separated in fact, the courts must step in to determine in whose custody the child can better be assured the rights granted to him by law. The need, therefore, to present evidence regarding this matter, becomes imperative.

Beckett v. Sarmiento, Jr. AM NO. RTJ-12-2326, Jan. 30, 2013 689 SCRA 494 In a very real sense, then, a judgment involving the custody of a minor child cannot be accorded the force and effect of res judicata. Now to another point. In disputes concerning post-separation custody over a minor, the well-settled rule is that no child under seven (7) years of age

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shall be separated from the mother, unless the court finds compelling reasons to order otherwise. CHAPTER 2. SUBSTITUTE & SPECIAL PARENTAL AUTHORITY (Arts 216-219) Parental Preference Rule Concept Who may exercise Substitute Parental Authority Liability of persons exercising special Parental Authority St. Mary’s Academy v. Carpitanos, G.R. NO. 143363, Feb. 6, 2002 376 SCRA 473 The liability for the accident, whether caused by the negligence of the minor driver or mechanical detachment of the steering wheel guide of the jeep, must be pinned on the minor’s parents primarily. The negligence of petitioner St. Mary’s Academy was only a remote cause of the accident. CHAPTER 3. EFFECT OF PARENTAL AUTHORITY UPON THE PERSONS OF THE CHILDREN Right to Child’s Custody Sagala-Eslao vs. CA, 266 SCRA 317, 323 (1997). It is a rule long accepted by the courts that the right of parents to the custody of their minor children is one of the natural rights incident to parenthood, a right supported by law and sound public policy. Cang vs. CA, 296 SCRA 128 (1998). Parental authority cannot be entrusted to a person simply because he could give the child a larger measure of material comfort than his natural parent. Duty to Provide Support Duty of Representation Obedencio vs. Murillo, A.M. NO. RTJ-03-1753. Feb. 5, 2004 422 SCRA 21

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Licel was only 14 years old, definitely a minor, on May 22, 2001, when she was presented before respondent’s sala to affirm the execution of her affidavit of desistance. This being the case, said affidavit should have been executed with the concurrence of her parents. Licel could not validly give consent to an affidavit of desistance, for a minor is incompetent to execute such an instrument.

Liability of Parents for damages caused by their minor children CHAPTER 4. EFFECT OF PARENTAL AUTHORITY UPON THE PROPERTY OF THE CHILDREN (Articles 225-227)

Lindain v. CA, G.R. NO. 95305 , Aug. 20, 199 212 SCRA 725 Under the law, a parent, acting merely as the legal (as distinguished from judicial) administrator of the property of his/her minor children, does not have the power to dispose of, or alienate, the property of said children without judicial approval. Neri v. Heirs of Hadji Yusop, G.R. No 194366, Oct. 10, 2012 683 SCRA 253 Administration includes all acts for the preservation of the property and the receipt of fruits according to the natural purpose of the thing. Any act of disposition or alienation, or any reduction in the substance of the patrimony of child, exceeds the limits of administration. Thus, a father or mother, as the natural guardian of the minor under parental authority, does not have the power to dispose or encumber the property of the latter CHAPTER 5. SUSPENSION AUTHORITY (Arts 228-233)

OR

TERMINATION

OF

PARENTAL

G.R.ounds for termination and suspension of parental authority Bondagjy vs. Bondagjy, G.R. NO. 140817, Dec. 07, 2001 371 SCRA 64 Indeed, what determines the fitness of any parent is the ability to see to the physical, educational, social and moral welfare of the children, and the ability to give them a healthy environment as well as physical and financial support taking into consideration the respective resources and social and moral situations of the parents. 51

Cang vs CA,296 SCRA 128 In reference to abandonment of a child by his parent, the act of abandonment imports “any conduct of the parent which evinces a settled purpose to forego all parental duties and relinquish all parental claims to the child.” It means “neglect or refusal to perform the natural and legal obligations of care and support which parents owe their children.” Title X. EMANCIPATION AND AGE OF MAJORITY; See RA 6809; 2176 & 2180 NCC Concept Effects of Emancipation Title XI SUMMARY JUDICIAL PROCEEDINGS IN THE FAMILY LAW Family Courts Act and SC AM Orders and Circulars CHAPTER 1. SCOPE OF APPLICATION (Article 238) CHAPTER 2. SEPARATION IN FACT BETWEEN HUSBAND AND WIFE (Articles 239-248) See RA 9262 (Anti Violence against Women and Children [VAWC]) and Implementing Rules & Regulations CHAPTER 3. INCIDENTS (Articles 249-252)

INVOLVING

PARENTAL

AUTHORITY

See RA 9262 (Anti Violence against Women and Children [VAWC]) & IRR A.M. NO. 02-11-12-SC- Re: Proposed Rule on Provisional Orders (March 4, 2003) A.M. NO. 03-02-05-SC- Re: Proposed Rule on Guardianship of Minors (April 1, 2003) A.M. NO. 03-04-SC- Re: Proposed Rule on Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors (April 30, 2003) CHAPTER 4. OTHER MATTERS PROCEEDINGS (Article 253)

SUBJECT

TO

SUMMARY

52

Uy (Jardeleza) vs. CA, G.R. NO. 109557, Nov. 29, 2000 346 SCRA 246 Rule 95 of the ROC, not the Rule on Summary Proceedings in the Family Code, shall apply in a sale of a conjugal property where one spouse is is an incompetent. A comatose spouse is incompetent.

Republic v. Tango, G.R. NO.161062, Jul. 31, 2009 594 SCRA 560 By express provision of law, the judgment of the court in a summary proceeding shall be immediately final and executory. As a matter of course, it follows that no appeal can be had of the trial court’s judgment in a summary proceeding for the declaration of presumptive death of an absent spouse under Article 41 of the Family Code.

Rep. v. Bermudez-Lorino G.R. NO. 160258 , Jan. 19, 2005 449 SCRA 5 In Summary Judicial Proceedings under the Family Code, there is no reglementary period within which to perfect an appeal, precisely because judgments rendered thereunder, by express provision of Section 247, Family Code, supra, are "immediately final and executory". It was erroneous, therefore, on the part of the RTC to give due course to the Republic’s appeal and order the transmittal of the entire records of the case to the Court of Appeals.

Title X. FUNERAL (Articles 305 -310, NCC) Title XII. CARE AND EDUCATION OF CHILDREN (Articles 356 – 363, NCC) PD 603 – “The Child and Youth Welfare Code” RA 9262 (Anti Violence against Women and Children [VAWC]) and IRR; RA 9523

Title XIII. USE OF SURNAMES (Articles 364-380, NCC) RA 9255 – “An Act Allowing Illegitimate Children to Use the Surname of their Father (Amending Art. 53

176 of the Family Code)”; IRR of 9255; Passport Law (RA 8239) Title XIV. ABSENCE (Articles 381-396, NCC); See Article 41 FC; Rules (Section 4) 73, 74,107, Revised Rules of Court; Arts.774 & 777; Art. 1456; Arts 22, 2142-2175; Wills & Succession

Chapter 1. Provisional Measures in Case of Absence Chapter 2. Declaration of Absence Chapter 3. Administration of the Property of the Absentee Chapter 4. Presumption of Death Chapter 5. Effect of Absence Upon the Contingent Rights of the Absentee TITLE XII FINAL PROVISIONS (Articles 254-257)

PROPERTY

Title I. CLASSIFICATION OF PROPERTY PRELIMINARY PROVISIONS

Concept of Property Classification of Property Immovable vs Movable Properties Laurel vs. Abrogar,

G.R. NO. 155076,

Jan.

13,

2009

International telephone calls placed by Bay Super Orient Card holders, the telecommunication services provided by PLDT and its business of providing said services are not personal properties under Article 308 of the Revised Penal Code. The construction by the respondents of Article 308 of the said Code to include, within its coverage, the aforesaid international telephone calls, telecommunication services and business is contrary to the letter and intent of the law. 54

The words "Personal property" under the Revised Penal Code must be considered in tandem with the word "take" in the law. The statutory definition of "taking" and movable property indicates that, clearly, not all personal properties may be the proper subjects of theft. The general rule is that, only movable properties which have physical or material existence and susceptible of occupation by another are proper objects of theft. Kinds of Immovable Properties Bicerra vs. Teneza, 6 SCRA 649, 651 (1962). A house (or a building) is classified as immovable property by reason of its adherence to the soil on which it is built. Thus, a building which is merely superimposed on the soil is not a real property. Punzalan, Jr. v. Vda. De Lacsamana, 121 SCRA 331 (1983) A building treated separately from the land on which it stood is immovable property and the mere fact that the parties to a contract seem to have dealt with it separate and apart from the land on which it stood in no wise changed its character as immovable property. Tsai vs. CA, 366 SCRA 324 In the instant case, the parties: (1) executed a contract styled as “Real Estate Mortgage and Chattel Mortgage,” instead of just “Real Estate Mortgage” if indeed their intention is to treat all properties included therein as immovable, and (2) attached to the said contract a separate “LIST OF MACHINERIES & EQUIPMENT”. These facts, taken together, evince the conclusion that the parties’ intention is to treat these units of machinery as chattels. Caltex Phils.,

Inc.,

vs.

CBAA, May

31,

1982

SC held that the said equipment and machinery, as appurtenances to the gas station building or shed owned by Caltex (as to which it is subject to realty tax) and which fixtures are necessary to the operation of the gas station, for without them the gas station would be useless, and which have been attached or affixed permanently to the gas station site or embedded therein, are taxable improvements and machinery within the meaning of the Assessment Law and the Real Property Tax Code. MERALCO vs.

CBAA,

May

31,

1982 55

While the two storage tanks are not embedded in the land, they may, nevertheless, be considered as improvements on the land, enhancing its utility and rendering it useful to the oil industry. It is undeniable that the two tanks have been installed with some deG.R.ee of permanence as receptacles for the considerable quantities of oil needed by Meralco for its operations. Rights as property MBTC v. Alejo, 364 SCRA 812, 819 (2001) A real estate mortgage is a real right and a real property by itself. Chapter 2 Movable Property Concept Kinds of Movable Property Chapter 3 Property in Relation to the Person to whom it belongs Public Dominion vs Private Ownership Classification of Property depending on ownership Constitutional basis of State Ownership – Jura Regalia Chavez v. Public Estates Authority, 415 SCRA 403 (2003) Submerged lands are part of the State’s inalienable natural resources and classified as property of public dominion. Republic v. 144

Santos, G.R. NO. 180027,July

18, 2012 677 SCRA

Jura Regalia simply means that the State is the original proprietor of all lands and, as such, is the general source of all private titles. Thus, pursuant to this principle, all claims of private title to land, save those acquired from native title, must be traced from some grant, whether express or implied, from the State. Absent a clear showing that land had been let into private ownership through the State’s imprimatur, such land is presumed to belong to the State Public ownership vs State Ownership 56

Public Service vs Public Use Villarico v. Sarmiento, 442 SCRA 110, 115 2004 Public use” means “use which is not confined to privileged individuals, but is open to the indefinite public. Characteristics of Properties of Public Dominion Menchavez vs Teves, Jr, 449 SCRA 380 Properties of public dominion may not be alienated but may be subject to joint venture, or production-sharing agreements with private individuals or corporations for their exploration, development and utilization. Dacanay vs Asistio,Jr 208 SCRA 404 Properties of public dominion is outside the commerce of mend and it cannot be alienated or leased or otherwise be the subject matter of contracts. Manila Lodge 761 vs CA, 73 SCRA 162 An intention to devote it to public use or to public service is sufficient and it is not necessary that it must actually be used as such. Republic vs CA, 132 SCRA 514 Properties of public dominion is not susceptible to private appropriation and cannot be acquired by acquisitive prescription and thus they cannot be registered under the Land Registration Law and be the subject of a torrents title. Manila International Airport Authority vs CA, 495 SCRA 591 Properties of public dominion, being for public use, are not subject to levy, encumbrance or disposition through public or private sale. Any encumbrance, levy on execution or auction sale of any property of public dominion is void for being contrary to public policy. Tufexis v. Olaguera 32 Phil. 654. The usufruct of the public market was not subject to attachment on account of its being of a public character. 57

Kinds of Properties of Public Dominion Santos vs Moreno, 21 SCRA 1141 Canals constructed by private persons within their private lands and devoted exclusively for private use are of private ownership. Almagro vs.

Kwan, G.R. NO. 175806, Oct.

20,

2010

To qualify as foreshore land, it must be shown that the land lies between the high and low water marks and is alternately wet and dry according to the flow of the tide. The land's proximity to the waters alone does not automatically make it a foreshore land. Binalay v. Manalo, 195 SCRA 374, 384 (1991) The buyer did not acquire private ownership of the bed of the eastern branch of the Cagayan River even if it was included in the deeds of absolute sale executed by the sellers since the sellers “could not have validly sold land that constituted property of public dominion.” Hilario vs City of Manila, G.R. No. L-19570, April 27, 1967 The phrase “banks of a river” is understood to be those “lateral strips orzones of its beds which are washed by the stream only during such highfloods as do not cause inundations.” In other words, the banks refer to the lateral lines or strips reached by the waters when the river is at high tide. Manila International Airport Authority vs. CA, 495 SCRA 591 No one can dispute that properties of public dominion mentioned in Article 420 of the Civil Code, like ‘roads, canals, rivers, torrents, ports and bridges constructed by the State,’ are owned by the State. The term ‘ports’ includes seaports and airports. The MIAA Airport Lands and Buildings constitute a ‘port’ constructed by the State. Reclaimed Properties Republic vs. Parañaque, G.R. NO. 191109,July 18, 2012 677 SCRA 246 The subject reclaimed lands are still part of the public domain, owned by the State and, therefore, exempt from payment of real estate taxes. Here, the subject lands are reclaimed lands, 58

specifically portions of the foreshore and offshore areas of Manila Bay. As such, these lands remain public lands and form part of the public domain. Patrimonial Property of the State Conversion of Property of Public Dominion to Patrimonial Property Yu Chang v. Republic, G.R. NO. 171726. Feb. 23, 2011 The classification of land is descriptive of its legal nature or status and does not have to be descriptive of what the land actually looks like. The fact that the area within which the subject parcels of land are located is being used for residential and commercial purposes does not serve to convert the subject parcels of land into aG.R.icultural land. It is fundamental that before any land may be declassified from the forest G.R.oup and converted into alienable or disposable land for aG.R.icultural or other purposes, there must be a positive act from the government. Laurel v. Garcia,187 SCRA 797 Any conveyance of a real property falling under the patrimonial property of the State must be authorized and approved by a law enacted by the ConG.R.ess. Property for public use of Provinces, Cities, and Municipalities Patrimonial Property of Political Subdivision Title II Ownership Ownership in General Concept of Ownership Attributes of Ownership Recovery of Property Accion Reinvindicatoria; Ejectment Del Fierro v. Seguiran G.R. NO. 152141,Aug. 8, 2011 –The first requisite in an accion reinvindicatoria requires that the person who 59

claims that he has a better right to the property must first fix the identity of the land he is claiming by describing the location, area and boundaries thereof. Anent the second requisite, i.e., the claimant's title over the disputed area, the rule is that a party can claim a right of ownership only over the parcel of land that was the object of the deed. Del Rosario NO. 170575,June

8,

v. Roxas 2011

Foundation,

G.R.

In forcible entry, the possession is illegal from the beginning and the only issue is who has the prior possession de facto. In unlawful detainer, possession was originally lawful but became unlawful by the expiration or termination of the right to possess and the issue of rightful possession is the one decisive, for in such action, the defendant is the party in actual possession and the plaintiff's cause of action is the termination of the defendant's right to continue in possession. Jose v. Alfuerto, G.R. No 169380, Nov. 26, 2012 Acts merely tolerated are "those which by reason of neighborliness or familiarity, the owner of property allows his neighbor or another person to do on the property; they are generally those particular services or benefits which one’s property can give to another without material injury or prejudice to the owner, who permits them out of friendship or courtesy. Barrientos v.Rapal, G.R. NO. 169594,July

20,

2011

A person who occupies the land of another at the latter's tolerance or permission, without any contract between them, is necessarily bound by an implied promise that he will vacate the same upon demand, failing which a summary action for ejectment is the proper remedy against them. Doctrine of Self Help German Management & Services, Inc. v. CA. 177 SCRA 495 (1989) The doctrine of self-help can only be exercised at the time of actual or threatened dispossession, and not when possession has already been lost. Right to Enclose or Fence Limitations on Ownership 60

Right to sub-surface and airspace Republic of the Philippines v. Court of Appeals, 160 SCRA 228 Rights to the sub-surface or sub-soil are indivisible, and, consequently, require a definitive and categorical classification. National Power Corporation v. Ibrahim, 526 SCRA 149 (2007) The landowners’ right extends to such height or depth where it is possible for them to obtain some benefit or enjoyment, and it is extinguished beyond such limit as there would be no more interest protected by law. In this case, the landowners could have dug upon their property motorized deep wells but were prevented from doing so by the authorities precisely because of the construction and existence of the tunnels underneath the surface of their property.

Right to Hidden Treasure Palero-Tan v. Urdaneta AM NO. P--‐07--‐2399, Jun. 18, 2008 - When a person who finds a thing that has been lost or mislaid by the owner takes the thing into his hands, he acquires physical custody only and does not become vested with legal possession. In assuming such custody, the finder is charged with the obligation of restoring the thing to its owner. It is thus respondent’s duty to report to his superior or his officemates that he found something. Right to Airspace Chapter 2 Right of Accession General Provision Accession Definition Kinds of Accession Right of Accession with respect to what is produced by property Accession Discreta 61

Kinds of Fruits Right of Accession with respect to immovable property Accession Continua Fundamental rules Industrial Accession Building, Planting, and Sowing (BPS) Rules in BPS in the presence of good faith and bad faith Concept of Good Faith Rules governing BPS Floreza v. Evangelista, 96 SCRA 130 The rule under article 448 of the NCC applies only when the builder, planter or sower believes he had the right so to build, plant or sow because he thinks he owns the land or believes himself to have a claim of title. Mercado v. CA, 162 SCRA 75, 85 1988 To be deemed a builder in good faith, it is essential that a person asserts title to the land on which he builds, i.e., it is essential that he be a possessor in concept of owner and that he be unaware that there exists in his title or mode of acquisition any flaw which invalidates it. Bulacanag v. Francisco, 122 SCRA 498, 502 (1983) Article 448 applies only to a case where one builds on land in the belief that he is the owner thereof and it does not apply where one’s only interest in the land is that of a lessee under a rental contract. PNB vs De Jesus, 411 SCRA 557 The landowner cannot refuse to exercise either option and compel instead the owner of the building or improvement to remove it from the land. Javier v. Concepcion, Jr 94 SCRA 212 (1979) 62

The value of the useful improvements consisting of various fruits, bamboos, a house and camarin made of strong materials based on the market value of the said improvements. Nuguid v. CA, 452 SCRA 243, 252 (2005) The right of retention is considered as one of the measures devised by the law for the protection of builders in good faith. Its object is to guarantee full and prompt reimbursement as it permits the actual possessor to remain in possession while he has not been reimbursed (by the person who defeated him in the case for possession of the property) for those necessary expenses and useful improvements made by him on the things possessed. Ballatan v. Court of Appeals 304 SCRA 37 (1999)- In the event the landowner elects to sell the land to the builder in good faith, the price must be fixed at the prevailing market value at the time of payment. In the event of the failure of the builder to pay the land, after the owner thereof has chosen this alternative, the builder’s right of retention provided in Article 546 is also lost. Natural Accession Kinds of Natural Accession Alluvion Rules governing Alluvion Heirs of Emiliano Navarro v. IAC, 268 SCRA 74, 85 (1997) Riparian owners are, strictly speaking, distinct from owners, the latter being owners of lands bordering the shore of the sea or lakes or other tidal waters.

Vda. de Nazareno v. CA, 257 SCRA 598 (1996) Since the subject land was the direct result of the dumping of sawdust by the Sun Valley Lumber Co., the accretion was man-made, hence, Art. 457 does not apply. Ergo, the subject land is part of the public domain. Roxas v. Tuason, 9 Phil. 408. 63

The right of the owners of the bank adjacent to rivers to the accretion which they receive by virtue of the action of the waters of the river is ipso jure and there is no need of an action of the owner of the bank to possess the new addition since it belongs to him by the very fact of the addition. Cureg v. IAC, 177 SCRA 313 (1989) The accretion to registered land does not preclude acquisition of the additional area by another person through prescription. Avulsion Definition Avulsion vs Alluvion Rules Governing Avulsion Change of course of River Agne v. Director of Lands, 181 SCRA 793, 805 (1990) There need be no act on their part to subject the old river bed to their ownership, as it is subject thereto ipso jure from the moment the mode of acquisition becomes evident, without need of any formal act of acquisition. Such abandoned riverbed had fallen to the private ownership of the owner of the land through which the new river bed passes even without any formal act of his will and any unauthorized occupant thereof will be considered as a trespasser. Formation of Island Right of Accession with respect to Movable Property Adjunction or Conjunction Rules governing Adjunction or Conjunction Presence and absence of badfaith Commixtion or Confusion Specification

64

Chapter 3 Quieting of Title Action to Quiet Title Requisites Chung Jr. vs. Mondragon, G.R. 179754,Nov.

21,

2012

The issues in a case for quieting of title are fairly simple; the plaintiff need to prove only two things, namely: "(1) the plaintiff or complainant has a legal or an equitable title to or interest in the real property subject of the action; and (2) that the deed, claim, encumbrance or proceeding claimed to be casting a cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy. Stated differently, the plaintiff must show that he has a legal or at least an equitable title over the real property in dispute, and that some deed or proceeding beclouds its validity or efficacy." Baha’is v.

Pascual, G.R. 169272,July

11,

2012

Under Articles 476 and 477 of the Civil Code, the two (2) indispensable requisites in an action to quiet title are: (1) that the plaintiff or complainant has a legal or an equitable title to or interest in the real property subject of the action; and (2) that a deed, claim, encumbrance or proceeding is claimed to be casting cloud on his title. In this case, an action to quiet title is not the proper remedy because petitioner no longer had any legal or equitable title to or interest in the lots. The petitioner’s status as possessor and owner of the lots had been settled in the final and executory December 4, 1985 decision of the Bureau of Lands that the DENR Secretary and the OP affirmed on appeal. Thus, the petitioner is not entitled to the possession and ownership of the lots.

Vda.de Aviles v. CA, 264 SCRA 473 ‘An action for quieting of title may not be brought for the purpose of settling a boundary dispute.

65

Title III- Co-ownership Definition Requisites Nature of Co-ownership Alejandrino v. Court of Appeals, 295 SCRA 536, 548, Sept. 17, 1998 Each co-owner of property which is held pro indiviso exercises his rights over the whole property and may use and enjoy the same with no other limitation than that he shall not injure the interests of his co-owners. Sources of Co-ownership Rules Governing Co-ownership De Guia v. CA, 413 SCRA 114, 124 (2003). A co-owner of an undivided thing or right is an owner of the whole and over the whole he exercises the right of dominion. Bailon-Casilao v. CA, 160 SCRA 738, 745, April 15, 1988 The appropriate recourse of co-owners in cases where their consent were not secured in a sale of the entire property as well as in a sale merely of the undivided shares of some of the co-owners is an action for partition under Rule 69 of the Revised Rules of Court. Gapacan v. Omipet, 387 SCRA 383. A state of co-ownership exists only because there is unity of the object or property and plurality of subjects. Extinguishment of Co-ownership Adille v. Court of Appeals, 157 SCRA 455, Jan. 29, 1988. The rule in this jurisdiction is that the redemption by one co-heir or coowner of the property in its totality does not vest in him ownership over it since redemption is not a mode of terminating a co-ownership. 66

Sanchez v. Court of Appeals, 404 SCRA 541, 548, June 20, 2003 Co-ownership is a form of trust and every co-owner is a trustee for the others, hence, the relationship of such co-owner to the other co-owners is fiduciary in character and attribute. Pangan v. Court of Appeals, 166 SCRA 375, 382, Oct. 17, 1988 If the co-owner actually holding the property asserts exclusive dominion over it against the other co-owners, the corollary of the rule is that he can acquire sole title to it after the lapse of the prescribed prescriptive period. Heirs of Flores Restar v. Heirs of Dolores R. Cichon 475 SCRA 731, Nov. 22, 2005 While the action to demand partition of a co-owned property does not prescribe, a co-owner may acquire ownership thereof by prescription where there exists a clear repudiation of the co-ownership, and the coowners are apprised of the claim of adverse and exclusive ownership. Delima v. Court of Appeals, 201 SCRA 641, Sept. 24, 1991 From the moment one of the co-owners claims that he is the absolute and exclusive owner of the properties and denies the others any share therein, the question involved is no longer one of partition but of ownership Maritegui v. Court of Appeals 205 SCRA 337, When a co-owner or co-heir registered the properties in his name in fraud of other co-owners or co-heirs, prescription can only be deemed to have commenced from the time the latter discovered the former’s act of defraudation. Lacbayan v.

Samoy, G.R. NO. 165427,

Mar.

21,

2011

The first phase of a partition and,or accounting suit is taken up with the determination of whether or not a co-ownership in fact exists, and a partition is proper (i.e., not otherwise legally proscribed) and may be made by voluntary aG.R.eement of all the parties interested in the property. This phase may end with a declaration that plaintiff is not entitled to have a partition either because a co-ownership does not exist, or partition is legally prohibited. 67

Cruz v.

Catapang G.R. 164110,

Feb.

12,

2008

Alterations include any act of strict dominion or ownership and any encumbrance or disposition has been held implicitly to be an act of alteration. The construction of a house on the co-owned property is an act of dominion. Santos v. Heirs of Lustre, G.R. NO. 151016, Aug. 06, 2008 - any adverse ruling in the earlier case will not, in any way, prejudice the heirs who did not join, even if such case was actually filed in behalf of all the co-owners. In fact, if an action for recovery of property is dismissed, a subsequent action by a coheir who did not join the earlier case should not be barred by prior judgment.

Title V Possession Concept of Possession Elements of Possession Kinds of Possession Possession in Good Faith and Bad Faith PNB v. De Jesus, G.R. NO. 149295, September 23, 2003 - One is considered in good faith if he is not aware that there exists in his title or mode of acquisition any flaw which invalidates it. Parilla v. Pilar, G.R. NO. 167680, Nov. 30, 2006 - One whose interest is merely that of a holder, such as a mere tenant, agent or usufructuary, is not qualified to become a possessor builder in good faith. Abalos v. Heirs of Torio, G.R. NO. 175444, Dec. 14, 2011 - Acts of possessory character executed due to license or by mere tolerance of the owner are inadequate for purposes of acquisitive prescription. Possession, to constitute the foundation of a prescriptive right, must be en concepto de dueño, or, to use the common law equivalent of the term, that possession should be adverse, if not, such possessory acts, no matter how long, do not start the running of the period of prescription. Chapter 2 Acquisition of Possession 68

Bunyi v. Factor, G.R. NO. 591 SCRA 350

172547,

Jun.

30,

2009

For one to be considered in possession, one need not have actual or physical occupation of every square inch of the property at all times. Possession can be acquired not only by material occupation, but also by the fact that a thing is subject to the action of one’s will or by the proper acts and legal formalities established for acquiring such right, possession can be acquired by juridical acts. People v.

Peñaflorida, G.R. NO.

175604,

Apr.

10,

2008

Knowledge refers to a mental state of awareness of a fact. Since courts cannot penetrate the mind of an accused and thereafter state its perceptions with certainty, resort to other evidence is necessary. Animus possidendi, as a state of mind, may be determined on a case-to-case basis by taking into consideration the prior or contemporaneous acts of the accused, as well as the surrounding circumstances. Soledad v. People, G.R. NO. 184274, Feb 23, 2011 - The acquisition of possession involves two elements: the corpus or the material holding of the thing, and the animus possidendi or the intent to possess it. Animus possidendi is a state of mind, the presence or determination of which is largely dependent on attendant events in each case. It may be inferred from the prior or contemporaneous acts of the accused, as well as the surrounding circumstances.

Chua--‐Bruce

v.

CA, G.R. NO.

109595,

Apr.

27,

2000 –

Juridical possession means a possession which gives the transferee a right over the thing which the transferee may set up even against the owner.In this case, petitioner was a cash custodian who was primarily responsible for the cash-in-vault. Her possession of the cash belonging to the bank is akin to that of a bank teller, both being mere bank employees Effects of Possession EDCA Publ. 184 SCRA

V. 614

Santos, G.R. NO.

80298,

Apr.

26,

1990

Actual delivery of the books having been made, Cruz acquired ownership over the books which he could then validly transfer to the private respondents. The fact that he had not yet paid for them to EDCA was a 69

matter between him and EDCA and did not impair the title acquired by the private respondents to the books. BPI Family

v.

Franco, G.R. NO.

123498,

Nov.

23,

2007

Bad faith does not simply connote bad judgment or negligence; it imports a dishonest purpose or some moral obliquity and conscious doing of wrong; it partakes of the nature of fraud. We have held that it is a breach of a known duty through some motive of interest or ill will. Title VI Usufruct Characteristics and Nature Rights and Obligations of the Parties Title VII. Easements or Servitude Different kind of Easement Restrictive Covenant Fajardo v. Freedom

to Build, G.R. NO.

134692, Aug. 1, 2000

While it may be correct to state that restrictive covenants on the use of land or the location or character of buildings or other structures thereon may broadly be said to create easements or rights, it can also be contended that such covenants, being limitations on the manner in which one may use his own property, do not result in true easements, but a case of servitudes (burden), sometimes characterized to be negative easements or reciprocal negative easements. Abellana v. CA, G.R. NO.

97039, Apr.24, 1992

The use of a footpath or road may be apparent but it is not a continuous easement because its use is at intervals and depends upon the acts of man. It can be exercised only if a man passes or puts his feet over somebody else's land. Bicol Agro--‐Ind v. Obias, G.R. NO. 172077, Oct. 09, 2009 - The easement of right of way – the privilege of persons or a particular class of persons to pass over another’s land, usually through one particular path or linen – is characterized as a discontinuous easement because its use is in intervals and depends on the act of man.

70

Because of this character, an easement of a right of way may only be acquired by virtue of a title. Quintanilla v.

Abangan, G.R. NO. 160613, Feb.12, 2008

As between a right of way that would demolish a fence of strong materials to provide ingress and egress to a public highway and another right of way which although longer will only require a van or vehicle to make a turn, the second alternative should be preferred. Mere convenience for the dominant estate is not what is required by law as the basis for setting up a compulsory easement. Quimen v.

CA, G.R. NO.

112331,

May

29,

1996

As between a right of way that would demolish a store of strong materials to provide egress to a public highway, and another right of way which although longer will only require an avocado tree to be cut down, the second alternative should be preferred. Unisource

v.

Chung, G.R. NO.

173252,

Jul.

17,

2009

Registration of the dominant estate under the Torrens system without the annotation of the voluntary easement in its favor does not extinguish the easement. On the contrary, it is the registration of the servient estate as free, that is, without the annotation of the voluntary easement, which extinguishes the easement. Title VIII Nuisance Classification of Nuisance Remedies Telmo v.

Bustamante, G.R. NO.

182567,

Jul.

13,

2009

A nuisance per se is that which affects the immediate safety of persons and property and may be summarily abated under the undefined law of necessity. Evidently, the concrete posts summarily removed by petitioner did not at all pose a hazard to the safety of persons and properties, which would have necessitated immediate and summary abatement. Gancayco v.

Quezon

City, G.R. NO. 177807,Oct

11,

2011

The wing walls do not per se immediately and adversely affect the safety of persons and property. The fact that an ordinance may declare a structure illegal does not necessarily make that structure a nuisance. 71

Perez v. Madrona G.R. NO. 184478, Mar. 21, 2012 Respondents’ fence is not a nuisance per se. By its nature, it is not injurious to the health or comfort of the community. It was built primarily to secure the property of respondents and prevent intruders from entering it.

Donation Nature of Donations Classification of Donations Persons who may giver or receive a Donation Formalities of Donation Effects and limitation of Donation

Republic v. Guzman, G.R. No. 132964, February 18, 2000 The donation is null and void when (a) the deed of donation fails to show the acceptance, or (b) where the formal notice of the acceptance made in a separate instrument is either not given to the donor or else noted in the deed of donation, and in the separate acceptance. Villanueva vs. Spouses Branoco, G.R. No. 172804, January 24, 2011 When the donor used the words that the gift "does not pass title during my lifetime; but when I die, she shall be the true owner of the two aforementioned parcels"] the donor meant nothing else than that she reserved of herself the possession and usufruct of said two parcels of land until her death, at which time the donee would be able to dispose of them freely. Central Philippines University vs. CA, G.R. No. 112127 July 17, 1995 If there was no fulfillment or compliance with the condition, the donation may now be revoked and all rights which the donee may have acquired under it shall be deemed lost and extinguished.

Insular

Life

v.

Ebrado, G.R. NO.

44059,

Oct.

28,

1977

72

In essence, a life insurance policy is no different from a civil donation insofar as the beneficiary is concerned. Both are founded upon the same consideration: liberality. A beneficiary is like a donee, because from the premiums of the policy which the insured pays out of liberality, the beneficiary will receive the proceeds or profits of said insurance. Zamboanga

v.

Plagata, G.R. NO. 148433,

Sept.

30,

2008

Since Article 1306 of said Code authorizes the parties to a contract to establish such stipulations, . . . not contrary to law, . . . public order or public policy, we are of the opinion that, at the very least, that stipulation of the parties providing for automatic revocation of the deed of donation, without prior judicial action for that purpose, is valid subject to the determination of the propriety of the rescission sought. Where such propriety is sustained, the decision of the court will be merely declaratory of the revocation, but it is not in itself the revocatory act. Quijada vs.

CA, G.R. NO.

126444,

Dec.

4,

1998.

Since no period was imposed by the donor on when must the donee comply with the condition, the latter remains the owner so long as he has tried to comply with the condition within a reasonable period. Only then - when the non-fulfillment of the resolutory condition was brought to the donor's knowledge - that ownership of the donated property reverted to the donor as provided in the automatic reversion clause of the deed of donation.

PRESCRIPTION

OBLIGATIONS

I. DEFINITION MAKATI STOCK EXCHANGE vs. CAMPOS, G.R. NO. 138814, April 16, 2009

73

Respondent used the terms "right and obligation" in his Petition from which he concluded that that such Petition sufficiently states a cause of action. Right and obligation are legal terms with specific legal meaning; A right is a claim or title to an interest in anything whatsoever that is enforceable by law, while an obligation is defined in the Civil Code as a juridical necessity to give, to do or not to do and in the words of Arias Ramos "An obligation is a juridical relation whereby a person (called the creditor) may demand from another (called the debtor) the observance of a determinative conduct (the giving, doing or not doing), and in case of breach, may demand satisfaction from the assets of the latter." II. ELEMENTS OF AN OBLIGATION DEGAÑOS vs. PEOPLE OF THE PHILIPPINES, G.R. NO. 162826, October 14, 2013 Degaños claims that his partial payments to the complainants novated his contract with them from agency to loan, thereby converting his liability from criminal to civil. The incompatibility in novation must take place in any of the essential elements of the obligation, such as its object, cause or principal conditions thereof; otherwise, the change would be merely modificatory in nature and insufficient to extinguish the original obligation. ASUNCION vs. CA, G.R. NO. 109125, December 2, 1994 An obligation is a juridical necessity to give, to do or not to do (Art. 1156, Civil Code) and is constituted upon the concurrence of the essential elements thereof, viz: (a) The vinculum juris or juridical tie which is the efficient cause established by the various sources of obligations (law, contracts, quasi-contracts, delicts and quasi-delicts); (b) the object which is the prestation or conduct; required to be observed (to give, to do or not to do); and (c) the subject-persons who, viewed from the demandability of the obligation, are the active (obligee) and the passive (obligor) subjects. III. DIFFERENT KINDS OF PRESTATIONS SSS vs MOONWALK DEVELOPMENT & HOUSING CORPORATION, G.R. NO. 73345. April 7, 1993. For failure to pay on time the amortization, SSS imposed the 12% penalty contained in the penal clause of the contract entered into between the parties. Inpositive obligations, (to give and to do), the 74

penalty is demandable when the debtor is in mora; hence, the necessity of demand by the debtor unless the same is excused. ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION vs. PHILIPPINE COMMERCIAL INTERNATIONAL BANK, G.R. NO. 153827 April 25, 2006 The [petitioner] may have experienced financial difficulties because of the "1997 economic crisis" that ensued in Asia, however, the same does not constitute a valid justification for the [petitioner] to renege on its obligations to the [respondent], and [petitioner] cannot even find solace in Articles 1266 and 1267 of the New Civil Code, since it is applicable only to obligations "to do," and not obligations "to give." An obligation "to do" includes all kinds of work or service; while an obligation "to give" is a prestation which consists in the delivery of a movable or an immovable thing in order to create a real right, or for the use of the recipient, or for its simple possession, or in order to return it to its owner. IV. CLASSIFICATION OF OBLIGATIONS AS TO BASIS AND ENFORCEABILITY 1.NATURAL OBLIGATIONS ANSAY vs. BOARD OF DIRECTORS, G.R. NO. L-13667, April 29, 1960 Appellants filed against appellees in the CFI a complaint praying for a 20% Christmas bonus, contending that there exists a cause of action in their complaint because their claim rests on moral grounds or what in brief is defined by law as a natural obligation. Article 1423 of the New Civil Code classifies obligations into civil or natural, "Civil obligations are a right of action to compel their performance, while Natural obligations, not being based on positive law but on equity and natural law, do not grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by reason thereof". DBP vs. CONFESSOR, G.R. NO. L-48889 May 11, 1989 Appellee refuses to pay his obligation despite his execution of a new promissory note in consideration of a previous promissory note which remained unpaid even after the lapse of 10 years on the ground of prescription. When a debt is already barred by prescription, it cannot be 75

enforced by the creditor but a new contract recognizing and assuming the prescribed debt with full knowledge of the prescription would be valid and enforceable and he thereby waives the benefit of prescription. 2. CIVIL OBLIGATIONS ANSAY vs. NDC, G.R. NO. L-13667, April 29, 1960 Appellants contend that there exists a cause of action in their complaint because their claim rests on moral grounds or what in brief is defined by law as a natural obligation. Article 1423 of the New Civil Code classifies obligations into civil or natural. "Civil obligations are a right of action to compel their performance. Natural obligations, not being based on positive law but on equity and natural law, do not grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by reason thereof". V. SOURCES OF OBLIGATIONS ABS-CBN vs. OFFICE OF THE OMBUDSMAN, G.R. NO. 133347 April 23, 2010 Petitioner asserts that a criminal complaint may continue and be prosecuted as an independent civil action. The claim for civil liability survives notwithstanding the death of accused, if the same may also be predicated on a source of obligation other than delict. Article 1157 of the Civil Code enumerates these other sources of obligation from which the civil liability may arise as a result of the same act or omission: a) law. b) contracts. c) quasi-contracts. d) xxx xxx xxx. e) quasi-delicts. 1. OBLIGATIONS ARISING FROM LAW SALEN vs. BALCE, G.R. NO. L-14414, April 27, 1960 Delfin, the father, was held jointly and severally liable with his minor son Dante arising from the criminal act committed by the latter. The civil liability which the law imposes upon the father and, in case of his death or incapacity, the mother, for any damages that may be caused by the minor children who live with them, is a necessary consequence of the parental authority they exercise over them which imposes upon the parents the "duty of supporting them, keeping them in their company, 76

educating them in proportion to their means", while, on the other hand, gives them the "right to correct and punish them in moderation" . 2. OBLIGATIONS ARISING FROM CONTRACTS SALUDAGA vs. FEU, G.R. NO. 179337 April 30, 2008 Saludaga, a sophomore law student of respondent FEU filed a case for damages against it after he was shot by one of the security guards on duty at the school premises. When an academic institution accepts students for enrollment, there is a established contract between them, resulting in bilateral obligations which both parties are bound to comply with but which FEU failed to perform when it did not provide a safe and secure environment to its students.

MERALCO vs RAMOY, G.R. NO. 158911, March 4, 2008 The respondents' cause of action against MERALCO is anchored on culpa contractual or breach of contract for the latter's discontinuance of its service to respondents. In culpa contractual the mere proof of the existence of the contract and the failure of its compliance justify, prima facie, a corresponding right of relief from law, recognizing the obligatory force of contracts, the law will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof. 3. OBLIGATIONS ARISING FROM QUASI CONTRACT CRUZ vs.TUASON, G.R. NO. L-23749 April 29, 1977 Cruz alleged that Tuason had been enriched at the expense of Cruz by virtue of an agreement made by Cruz and the Deudors in the clearing, improving, subdividing and selling the large tract of land for the reasons that said improvements are being used and enjoyed by Tuason. A presumed quasi-contract cannot emerge as against one party when the subject matter thereof is already covered by an existing contract with another party. A. NEGOTIORUM GESTIO 77

ADILLE vs. CA, G.R. NO. L-44546 January 29, 1988 Petitioner claims exclusive ownership on a land after exercising his right of repurchase to the prejudice of the co owners. The redemption by one co-heir or co-owner of the property in its totality does not vest in him ownership over it but the petitioner, in taking over the property, did so either on behalf of his co-heirs, in which event, he had constituted himself a negotiorum gestor under Article 2144 of the Civil Code, or for his exclusive benefit, in which case, he is guilty of fraud, and must act as trustee, the private respondents being the beneficiaries, under the Article 1456. B. SOLUTIO INDEBITI ANDRES vs. MANUFACTURERS HANOVER & TRUST CORPORATION, G.R. NO. 82670 September 15, 1989 Petitioner refuses to return the second remittance to the respondent bank when the respondent bank mistakenly remitted a certain amount for a specific transaction twice on behalf of the buyer on the premise that the buyer still owes the petitioner money. For quasi-contract of solutio indebiti to apply the following requisites must concur: "(1) that he who paid was not under obligation to do so; and, (2) that payment was made by reason of an essential mistake of fact", hence petitioner must return to the bank the amount which was mistakenly remitted for it is the buyer not the respondent bank who has the obligation to the petitioner and not the bank. PUYAT & SONS, INC. vs. CITY OF MANILA, G.R. NO. L-17447, April 30, 1963 The City Treasurer of Manila refused to refund the retail dealer's tax erroneously paid by the petitioner on it's belief that it was not exempted from such, on the ground that the tax was voluntarily paid and not under protest which was a condition sine qua non in order that a legal basis may arise. Voluntariness is incompatible with mistake being a case of solutio indebiti, protest is not required as a condition sine qua non for its application. 4. OBLIGATIONS ARISING FROM DELICT 78

CINCO vs. CANONOY, G.R. NO. L-33171, May 31, 1979 Respondent Judge acted with grave abuse of discretion when he upheld the Decision of the Lower court suspending the civil action based on a quasi-delict until after the criminal case is finally terminated. When the civil action is based on an obligation not arising from the act or omission complained of as a felony, such civil action may proceed independently of the criminal proceedings and regardless of the result of the latter. 5. OBLIGATIONS ARISING FROM QUASI DELICT NAPOCOR vs. CA, G.R. NO. 124378, March 8, 2005 The negligence of NPC as a result of its inability to maintain the level of water in its dams has been satisfactorily and extensively established. In crimes and quasi-delicts, the defendant shall be liable for all damages, which are the natural and probable consequences of the act or omission complained of and it is not necessary that such damages have been foreseen or could have reasonably been foreseen by the defendant.

NAPOCOR vs. THE HONORABLE COURT OF APPEALS, G.R. NO. 124378. March 8, 2005 NPC as a result of its inability to maintain the level of water in its dam brought damages to defendants but asserts that the damages, if any, were due to the heavy rains and should be regarded as a fortuitous event. Negligence or imprudence is human factor which makes the whole occurrence humanized, as it were, and removed from the rules applicable to acts of God JIMENEZ vs. CITY OF MANILA, G.R. NO. 71049, May 29, 1987 Respondent alleged that it is the Asiatic Integrated Corporation that is managing the public market. Hence, it cannot be liable for the injuries sustained by the petitioner when he fell into an open drainage hole. The City of Manila is likewise liable for damages under Article 2189 of the Civil Code, respondent City having retained control and supervision over the Sta. Ana Public Market and as tort-feasor under Article 2176 of the Civil Code on quasi-delicts Respondent City of Manila and Asiatic 79

Integrated Corporation being joint tort-feasors are solidarily liable under Article 2194 of the Civil Code. JIMENEZ vs. CITY OF MANILA, G.R. NO. 71049, May 29, 1987 Petitioner fell into the open drainage holes, causing him physical injuries, in a public market being managed by Asiatic Integrated Corporation but such public market is still under the control and supervision of the City of Manila. As a defense against liability on the basis of a quasi-delict, one must have exercised the diligence of a good father of a family. (Art. 1173 of the Civil Code). VI. NATURE AND EFFECTS OF OBLIGATION A. OBLIGATION TO GIVE A DETERMINATE THING vs A GENERIC THING SANCHEZ vs. RIGOS, G.R. NO. L-25494 June 14, 1972 In his complaint, plaintiff alleges that, by virtue of the option under consideration, "defendant agreed and committed to sell" and "the plaintiff agreed and committed to buy" the land described in the option, hence, plaintiff maintains that the promise contained in the contract is "reciprocally demandable. "A promise to buy and sell a determinate thing for a price certain is reciprocally demandable and an accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promissor if the promise is supported by a consideration distinct from the price. GAISANO CAGAYAN, INC. vs INSURANCE COMPANY OF NORTH AMERICA, G.R. NO. 147839, June 8, 2006 Petitioner’s argument is that it is not liable for the unpaid accounts because the fire is a fortuitous event. If the obligation is generic in the sense that the object thereof is designated merely by its class or genus without any particular designation or physical segregation from all others of the same class, the loss or destruction of anything of the same kind even without the debtor’s fault and before he has incurred in delay will not have the effect of extinguishing the obligation, based on the principle that the genus of a thing can never perish, (Genus nunquan perit) and an obligation to pay money is generic; therefore, it is not excused by fortuitous loss of any specific property of the debtor. 80

GAISANO CAGAYAN, INC. vs INSURANCE COMPANY OF NORTH AMERICA, G. R. NO. 147839, June 8, 2006 Petitioner’s argument is that it is not liable for the unpaid accounts because the fire is a fortuitous event. The rule that an obligor should be held exempt from liability when the loss occurs thru a fortuitous event only holds true when the obligation consists in the delivery of a determinate thing and there is no stipulation holding him liable even in case of fortuitous event and it does not apply when the obligation is pecuniary in nature. B. FAILURE OF PERFORMANCE ART 1170 ARRIETA vs. NARIC, G.R. NO. L-15645, January 31, 1964 It is clear upon the records that the sole and principal reason for the cancellation of the allocation of rice contracted by the appellee herein in Burma, was the failure of the letter of credit to be opened by NARIC within the contemplated period which resulted in the consequent damage. Every debtor who fails in performance of his obligations due to fraud, negligence, or delay is bound to indemnify for the losses and damages caused thereby. TELEFAST vs. CASTRO, G.R. NO. 73867, February 29, 1988 Petitioner and private respondent entered into a contract whereby, for a fee, petitioner undertook to send said private respondent's message overseas by telegram but which petitioner did not do, despite performance by said private respondent of her obligation by paying the required charges. Those who in the performance of their obligations are guilty of fraud, negligence or delay, and those who in any manner contravene the tenor thereof, are liable for damages. C. DELAY 1. MORA SOLVENDI ART 11 SANTOS VENTURA HOCORMA FOUNDATION, INC., vs. SANTOS, G.R. NO. 153004, November 5, 2004

81

When respondents wrote a demand letter to petitioner, the obligation was already due and demandable, and when the petitioner failed to pay its due obligation after the demand was made, it incurred delay. Delay as used in this article is synonymous to default or mora solvendi which means delay in the fulfillment of obligations with respect to time and in order for the debtor to be in default, it is necessary that the following requisites be present: (1) that the obligation be demandable and already liquidated; (2) that the debtor delays performance; and (3) that the creditor requires the performance judicially or extrajudicially. 2. MORA ACCIPIENDI MANUEL vs. CA, G.R. NO. 95469

July 25, 1991

Petitioner contends that private respondents are in mora accipiendi. The failure of the owners to collect or their refusal to accept the rentals are not valid defenses, since consignation under such circumstances, is necessary, and by this we mean one that is effected in full compliance with the specific requirements of the law therefor. 3. COMPENSATIO MORAE CORTES vs. CA, G.R. NO. 126083, July 12, 2006 Cortes’ admission agreed that the Corporation’s full payment of the sum would depend upon his delivery of the TCTs of the three lots. Considering that their obligation was reciprocal, performance thereof must be simultaneous and the mutual inaction of Cortes and the Corporation therefore gave rise to a compensation morae or default on the part of both parties because neither has completed their part in their reciprocal obligation.

UNLAD RESOURCES DEVELOPMENT CORPORATION vs. DRAGON, G.R. NO. 149338, July 28, 2008 Petitioners contend that they have fully complied with their obligation under the Memorandum of Agreement but due to respondents’ failure to increase the capital stock of the corporation to an amount that will accommodate their undertaking, it had become impossible for them to 82

perform their end of the Agreement. In reciprocal obligations, failure of the other party to perform the obligation renders the other party to demand fulfillment of the obligation or asked for the rescission of the contract, but not simply not performing their part of the Agreement. D. NEGLIGENCE 1. DEGREE OF DILIGENCE SICAM vs. JORGE, G.R. NO. 159617, August 8, 2007 Sicam exempts himself from liability on the ground that the robbery of his pawnshop is a fortuitous event which is by definition is an extraordinary event not foreseeable or avoidable. In order for a fortuitous event to exempt one from liability, it is necessary that one has committed no negligence or misconduct that may have occasioned the loss and robbery per se, just like carnapping, is not a fortuitous event for it does not foreclose the possibility of negligence on the part of herein petitioners. MERALCO vs. RAMOY, G.R. NO. 158911, March 4, 2008 The respondents' cause of action against MERALCO is anchored on culpa contractual or breach of contract for the latter's discontinuance of its service to respondents. Article 1173 also provides that the fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place, hence, as a public utility, MERALCO has the obligation to discharge its functions with utmost care and diligence.

MINDANAO TERMINAL AND BROKERAGE SERVICE, INC. vs. PHOENIX ASSURANCE COMPANY OF NEW YORK,MCGEE & CO., INC., G.R. NO. 162467, May 8, 2009 Mindanao Terminal was required to observe ordinary diligence only in loading and stowing the cargoes of Del Monte Produce aboard M,V Mistrau since there is nothing in the contract which requires a higher degree of diligence. If the law or contract does not state the degree of 83

diligence which is to be observed in the performance of an obligation then that which is expected of a good father of a family or ordinary diligence shall be required. 2. FORTUITOUS EVENT NAKPIL & SONS v. CA, G.R. NO. L-47851 April 15, 1988 There was an earthquake which caused the building heavy damage but the other nearby structures had less damages as compared to the said building, the architects, engineers and contractors are claiming fortuitous event as a defense. To be exempt from liability due to an act of God, the ff must occur: 1) cause of breach must be independent of the will of the debtor 2) event must be unforeseeable or unavoidable 3) event must be such that it would render it impossible for the debtor to fulfill the obligation 4) debtor must be free from any participation or agG.R.avation of the industry to the creditor. 3. EXTRAORDINARY INFLATION ALMEDA vs. BATHALA MARKETING,G.R.NO.150806, January 28, 2008 The lower court denied petitioner’s right to pass on to respondent the burden of paying the VAT and their right to collect the demanded increase in rental, there being no extraordinary inflation or devaluation as provided for in the seventh clause of the contract. Extraordinary inflation exists when there is a decrease or increase in the purchasing power of the Philippine currency which is unusual or beyond the common fluctuation in the value of said currency, and such increase or decrease could not have been reasonably foreseen or was manifestly beyond the contemplation of the parties at the time of the establishment of the obligation.

4. BREACH FOR RESCISSION UNIVERSAL FOOD CORPORATION vs. THE COURT OF APPEALS, G.R. NO. L-29155 May 13, 1970

84

Respondent patentee was dismissed as the permanent chief chemist of the corporation without any fault or negligence on his part after the execution of the Bill of Assignment, prompting him to rescind the contract. The general rule is that rescission of a contract will not be permitted for a slight or casual breach, but only for such substantial and fundamental breach as would defeat the very object of the parties in making the agreement.

VII. KINDS OF CIVIL OBLIGATIONS A. PURE OBLIGATIONS ART 1179 HONGKONG AND SHANGHAI BANKING CORP. vs. BROQUEZA, G.R. NO. 178610 November 17, 2010 Respondents executed undated promissory notes. They were not able to pay the monthly amortizations of their respective loans, which were suppose to be paid through salary deduction, to the petitioner because of their dismissal. Loans secured by their future retirement benefits to which they are no longer entitled are reduced to unsecured and pure civil obligations and the absence of a period within which to pay the obligation, the fulfillment of which is demandable at once. PAY vs. PALANCA, G.R. NO. L-29900June 28, 1974 Oppositor-appellee alleged that the rights of the petitioner-creditor had already prescribed when the action based on a dated promissory note was filed 15 years after. The wordings of the promissory note being "upon demand," the obligation was immediately due and had prescribed upon the lapse of ten years from the date on the promissory note. B. CONDITIONAL OBLIGATIONS SUSPENSIVE CONDITION 183 SCRA 171 Art. 1181 JAVIER vs. CA, G.R. No. L-48194 March 15, 1990 When a contract is subject to a suspensive condition, its birth and effectivity can take place only if and when the event which constitutes the condition happens or is fulfilled, and if the suspensive condition does 85

not take place, the parties would stand as if the conditional obligation had never existed. HEIRS OF PAULINO ATIENZA vs. ESPIDOL, G.R. NO. 180665 First, since Espidol failed to pay the installment on a day certain fixed in their agreement, the Atienzas can afterwards validly cancel and ignore the contract to sell because their obligation to sell under it did not arise. Since the suspensive condition did not arise, the parties stood as if the conditional obligation had never existed. Second, it was not a pure suspensive condition in the sense that the Atienzas made no undertaking while the installments were not yet due. Mr. Justice Edgardo L. Paras gave a fitting example of suspensive condition: “I’ll buy your land for P1,000.00 if you pass the last bar examinations.” This he said was suspensive for the bar examinations results will be awaited. Meantime the buyer is placed under no immediate obligation to the person who took the examinations. Here, however, although the Atienzas had no obligation as yet to turn over title pending the occurrence of the suspensive condition, it was implicit that they were under immediate obligation not to sell the land to another in the meantime. When Espidol failed to pay within the period provided in their agreement, the Atienzas were relieved of any obligation to hold the property in reserve for him.

REYES vs. TUPARAN, G.R. NO. 188064, June 1, 2011 The petitioner was rescinding the subject Deed of Conditional Sale pursuant to Article 1191 of the Civil Code because of the respondent’s failure,refusal to pay the balance of the total purchase price of the petitioner’s properties within the stipulated period. The full payment of the purchase price is the positive suspensive condition, the failure of which is not a breach of contract, but simply an event that prevented the obligation of the vendor to convey title from acquiring binding force. SPS. SANTOS vs. CA, G.R. NO. 120820, August 1, 2000 In view of our finding in the present case that the aG.R.eement between the parties is a contract to sell, it follows that the appellate court erred when it decreed that a judicial rescission of said aG.R.eement was necessary. In a contract to sell, the payment of the purchase price is a positive suspensive condition and failure to pay the price agreed upon is 86

not a mere breach, casual or serious, but a situation that prevents the obligation of the vendor to convey title from acquiring an obligatory force.

CONDITION PRECEDENT PARKS vs. PROVINCE OF TARLAC, G.R. NO. L-24190, July 13, 1926 Appellant contends that a condition precedent having been imposed in the donation and the same not having been complied with, the donation never became effective. The characteristic of a condition precedent is that the acquisition of the right is not effected while said condition is not complied with or is not deemed complied with, consequently, when a condition is imposed, the compliance of which cannot be effected except when the right is deemed acquired, such condition cannot be a condition precedent but a condition subsequent.

RESOLUTORY CONDITION ART 1181 CENTRAL PHILIPPINE UNIVERSITY vs. CA, G.R. NO. 112230. July 17, 1995 Petitioner failed to comply to build a school on the donated land given by the private respondent, which prompted the private respondent to rescind the donation. On conditional obligations, the acquisition of rights as well the extinguishment or loss of those already acquired shall depend upon the happening of the event which constitutes the condition, thus, when a person donates land to another on the condition that the latter would build upon the land a school is such a resolutory one and if there was no fulfillment with the condition such as what obtains in the instant case, the donation may be revoked & all rights which the donee may have acquired shall be deemed lost & extinguished. C. OBLIGATIONS WITH A PERIOD RADIOWEALTH FINANCE COMPANY vs. Spouses DEL ROSARIO, G.R. NO. 138739. July 6, 2000 87

Petitioner claimed that respondents are liable for the whole amount of their debt and the interest thereon, after they defaulted on the monthly installments, due to acceleration clause therein. Respondents, on the other hand, countered that the installments were not yet due and demandable, evidenced by the blank space left for the date on which the installments should have commenced and theorized that fulfillment of the obligation is dependent on the sole will of the debtor, hence proper court should first fix a period for payment. The act of leaving blank the due date of the first installment did not necessarily mean that the debtors were allowed to pay as and when they could, since the presence of an acceleration clause and a late payment penalty, showed the intention of the parties that the installments should be paid at a definite date, this is an obligation with a period. LIM vs.PEOPLE OF THE PHILIPPINES, G.R. NO. L-34338 November 21, 1984 Petitioner seeks the reversal of the decision of the lower court which convicted her of the crime of Estafa when she failed to give the proceeds of the sale of the tobacco in accordance with their agreement which says that ''...payment should be given as soon as the tobaccos are sold...'' and contended that the court should first fix the period. It is clear in the aG.R.eement, that the obligation was immediately demandable as soon as the tobacco was disposed of hence, Article 1197 of the New Civil Code, which provides that the courts may fix the duration of the obligation if it does not fix a period, does not apply. ART 1197 ARANETA, INC., vs.PHILIPPINE SUGAR ESTATES, G.R. NO. L-22558 May 31, 1967 Araneta, who was not able to comply with his obligation to create side streets on the sides of the land which were sold to the PSE due to the presence of squatters, questions the decision of the lower court ordering him to comply with his obligation within 2 years from the finality of the decision. It must be recalled that Article 1197 of the Civil Code involves a two-step process, the Court must first determine that "the obligation does not fix a period", or from the nature and the circumstances it can be inferred that a period was intended, because courts can not fix a period merely because in its opinion it is or should be reasonable and the complaint not having sought that the court should set a period, but must set the time that the parties are shown to have intended. 88

4. OBLIGATIONS WITH A PENAL CLAUSE SSS vs. MOONWALK DEVELOPMENT & HOUSING CORPORATION, G.R. NO. 73345, April 7, 1993. Is the penalty demandable even after the extinguishment of the principal obligation? For all purposes the principal obligation of defendantappellee was deemed extinguished as well as the accessory obligation of real estate mortgage, the penal clause which is also an accessory obligation must also be deemed extinguished, it would be otherwise, if the demand for the payment of the penalty was made prior to the extinguishment of the obligation because by then the debtor would be in mora and therefore liable for the penalty. THE BACHRACH MOTOR CO., INC., vs. ESPIRITU, G.R. NO. L-28497 November 6, 1928 Defendant alleged that the decision of the lower court to pay 25 percent of the amount of the trucks in addition to the amount of the trucks plus 12 per cent per annum is unconscionable and exceeds the rate fixed by law. The penalty agreed upon does not include the interest, and which may be demanded separetely and the penalty is not to be added to the interest for the determination of whether the interest exceeds the rate fixed by the law, since said rate was fixed only for the interest. ROBES-FRANCISCO REALTY & DEVELOPMENT CORPORATION vs. CFI, G.R. NO. L-41093, October 30, 1978 Petitioner corporation questions the award for nominal damages and attorney's fee since the contract agreed upon indicated an interest at 4% per annum of the total amount to be paid which should be considered as penalty clause for failure to comply with the obligation hence, the vendee cannot recover more than what is agreed upon. Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages and nominal damages are not intended for indemnification of loss suffered but for the vindication or recognition of a right violated or invaded. 5. RECIPROCAL OBLIGATION AGCAOILI vs. GSIS, G.R. NO. L-30056, August 30, 1988 89

GSIS sold a house to Agcaoili, and required him to immediately occupy it under pain of cancellation of the sale, but Agcaoili found out that the house was uninhabitable hence payment was suspended which prompted GSIS to cancel the sale. It is axiomatic that "(i)n reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him." UNLAD RESOURCES DEVELOPMENT CORPORATION vs. DRAGON, G.R. NO. 149338, July 28, 2008 Petitioners contend that they have fully complied with their obligation under the Memorandum of Agreement but due to respondents’ failure to increase the capital stock of the corporation to an amount that will accommodate their undertaking, it had become impossible for them to perform their end of the Agreement. In reciprocal obligations, failure of the other party to perform the obligation renders the other party to demand fulfillment of the obligation or asked for the rescission of the contract, but not simply not performing their part of the Agreement. AGCAOILI vs. GSIS, G.R. NO. L-30056, August 30, 1988 GSIS sold a house to Agcaoili, and required him to immediately occupy it under pain of cancellation of the sale, but Agcaoili found out that the house was uninhabitable hence payment was suspended which prompted GSIS to cancel the sale. It is axiomatic that "(i)n reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him."

VIII. JOINT AND SOLIDARY OBLIGATIONS SOLIDARY OBLIGATION INIMACO vs. NLRC, G.R. NO. 101723, May 11, 2000

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The absence of the word "solidary" in the dispositive portion of the Decision, renders the liability joint. Well-entrenched is the rule that solidary obligation cannot lightly be inferred, and there is a solidary liability only when the obligation expressly so states, when the law so provides or when the nature of the obligation so requires.

PNB vs. INDEPENDENT PLANTERS ASSOCIATION, INC., G.R. NO.L28046. May 16, 1983 PNB assails the order of dismissal of the lower court dismissing its complaint against several solidary debtors on the gr.ound that one of the defendants died during the pendency of the case and therefore the complaint, being a money claim based on contract, should be prosecuted in the testate or intestate proceeding for the settlement of the estate of the deceased. The choice is undoubtedly left to the solidary creditor to determine against whom he will enforce collection and in case of the death of one of the solidary debtors, the creditor may, if he so chooses, proceed against the surviving solidary debtors without necessity of filing a claim in the estate of the deceased debtors. JOINT OBLIGATIONS TOPIC: JOINT and SOLIDARY OBLIGATIONS RONQUILLO vs.CA, G.R. NO. L-55138September 28, 1984

Respondent filed a modification of the order of the lower court in a collection case praying for the "execution of the decision in its entirety against all defendants, jointly and severally." In the absence of a finding of facts that the defendants made themselves individually liable for the debt incurred they are each liable only for one-fourth of said amount, the obligation being described as "individually and jointly". JOINT and SOLIDARY OBLIGATIONS CALANG vs. PEOPLE OF THE PHILIPPINES, G.R. NO. 190696 August 3, 2010 Philtranco Bus has been held solidarily liable with its bus driver, Calang, when Calang accidentally collided with a jeepney killing a bystander and 91

two jeepney passengers while other passengers were seriously injured. Since the cause of action against Calang was based on delict, Philtranco cannot be held jointly and severally liable with Calang, based on quasidelict under Articles 2176 and 2180 of the Civil Code which pertain to the vicarious liability of an employer for quasi-delicts that an employee has committed. IX. EXTINGUISHMENT OF OBLIGATIONS MODES OF EXTINGUISHING OBLIGATIONS SAURA IMPORT and EXPORT CO., INC. vs. DEVELOPMENT BANK OF THE PHILIPPINES, G.R. NO. L-24968 April 27, 1972 RFC turned down the request of Saura, Inc. for an additional loan which prompted Saura, Inc. to ask that the mortgage be cancelled, which was done. The action thus taken by both parties was in the nature mutual desistance — what Manresa terms "mutuo disenso" — which is a mode of extinguishing obligations, a concept that derives from the principle that since mutual aG.R.eement can create a contract, mutual disaG.R.eement by the parties can cause its extinguishment. A. EXTINGUISHMENT BY PAYMENT OR PERFORMANCE AZCONA vs. JAMANDRE, G.R. NO. L-30597, SCRA, June 30, 1987 The rental stipulated therein was P7,200.00 but payment being acknowledged in the receipt was P7,000.00 only, yet no mention was made in the receipt of the discrepancy and, on the contrary, the payment was acknowledged "as per contract". When the obligee accepts the performance, knowing its incompleteness or irregularity, and without expressing any protest or objection, the obligation is deemed fully complied with. J. M. Tuason & Co., Inc. vs. Javier, NO. L-28569, February 27, 1970 Apart from the initial installment of P396.12, paid upon the execution of the contract, the defendant religiously satisfied the monthly installments accruing thereafter, for a period of almost eight (8) years and although the principal obligation under the contract was P3,691.20, the total payments made by the defendant including stipulated interest, aggregated P4,134.08.

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If the obligation has been substantially performed in good faith, the obligor may recover as though there had been a strict and complete fulfillment, less damages suffered by the obligee. ART 1240 TO WHOM PAYMENT SHOULD BE MADE SPOUSES MINIAN0 vs. CONCEPCION, G.R. 172825, October 11, 2012 Admittedly, payment of the remaining balance of P200,000.00 was not made to the creditors themselves, but rather, it was allegedly made to a certain Losloso who was the authorized agent of petitioners. Respondent’s obligation consists of payment of a sum of money, and in general, a payment in order to be effective to discharge an obligation, must be made to the proper person, thus, payment must be made to the obligee himself or to an agent having authority, express or implied, to receive the particular payment. Payment made to one having apparent authority to receive the money will, as a rule, be treated as though actual authority had been given for its receipt. If payment is made to one who by law is authorized to act for the creditor, it will work as a discharge. ARANAS vs. TUTAAN, 127 SCRA 828 All dividends accruing to the said shares after the rendition of judgment belonged to Aranas but UTEX paid the co-defendants despite its knowledge and understanding of the final judgment. It is elementary that payment made by a judgment debtor to a wrong party cannot extinguish the obligation of such debtor to its creditor. PAYMENT NOT IN PHIL CURRENCY HYDRO RESOURCES vs. NATIONAL IRRIGATION ADMINISTRATION, G.R. NO. 160215, November 10, 2004 The contract between NIA and Hydro is an internationally tendered contract considering that it was funded by the International Bank for Reconstruction and Development (IBRD). As a contract funded by an international organization, particularly one recognized by the Philippines,3 the contract is exempt from the provisions of R.A. No. 529, as amended by. R.A. No. 4100 (Act To Assure Uniform Value to Philippine Coin And Currency). PONCE vs. THE HONORABLE COURT OF APPEALS, G.R. NO. L-49494 May 31, 1979 93

The promissory note in question provided on its face for payment of the obligation in Philippine currency, but the aG.R.eement between the parties originally involved a dollar transaction. If there is any agreement to pay an obligation in a currency other than Philippine legal tender, the same is null and void as contrary to public policy, pursuant to Republic Act No. 529, and the most that could be demanded is to pay said obligation in Philippine currency, hence, a creditor herein cannot oblige the debtor to pay him in dollars, even if the loan were given in said currency. KALALO vs. LUZ, G.R. NO. L-27782, July 31, 1970 Appellant claims that lower court erred in declaring and holding that the balance owing from defendant-appellant to plaintiff-appellee on the IRRI Project should be paid on the basis of the rate of exchange of the U.S. dollar to the Philippine peso at the time of payment of judgment. Even if the obligation assumed by the defendant was to pay the plaintiff a sum of money expressed in American currency, the indemnity to be allowed should be expressed in Philippine currency at the rate of exchange at the time of judgment rather than at the rate of exchange prevailing on the date of defendant's breach. LEGAL TENDER TIBAJIA vs. CA, G.R. NO. 100290, June 4, 1993 Checks representing deposit money do not have legal tender power and their acceptance in the payment of debts, both public and private, is at the option of the creditor. ROMAN CATHOLIC vs. INTERMEDIATE APPELLATE COURT, G.R. NO. 72110. November 16, 1990. Since a negotiable instrument is only a substitute for money and not money, the delivery of such an instrument does not, by itself, operate as payment. A check, whether a manager’s check or ordinary check, is not legal tender, and an offer of a check in payment of a debt is not a valid tender of payment and may be refused receipt by the obligee or creditor. PAPA vs. VALENCIA, G.R. NO. 105188, January 23, 1998 Petitioner received the payment partly in cash and partly in check but was not able to encash the check, and now questions the said payment 94

after 10 years. Respondents, on the other hand, want the petitioner to deliver to them the owner’s duplicate of the title and the peaceful possession and enjoyment of the lot in question. The geneal rule is delivery of a check produces the effect of payment only when it is cashed, pursuant to Art. 1249 of the Civil Code. The rule does not apply, however, if the debtor is prejudiced by the creditor’s unreasonable delay in the presentment of the check. Acceptance of a check implies an undertaking of due diligence in presenting it for payment, and if he from whom it is received sustains loss by want of such diligence, it will be held to operate as actual payment of the debt or obligation for which it was given. B. CONSIGNATION ART 1257 SOCO vs. MILITANTE, G.R. NO. L-58961 June 28, 1983 Defendant authorized the Commercial Bank and Trust Company to issue checks to the plaintiff for the payment of rentals, but the plaintiff refused to accept them. In view of such refusal, defendant instructed said bank to make consignation with the Clerk of Court of the City Court, but the bank did not send notice to Soco that the checks will be deposited in consignation with the Clerk of Court. The purpose of the notice, which is essential to the validity of the consignation, is in order to give the creditor an opportunity to reconsider his unjustified refusal and to accept payment thereby avoiding consignation and the subsequent litigation, hence, failure to give such notice renders the consignation void. DALTON vs. FG.R. and DEVELOPMENT CORP, G.R. NO. 172577 January 19, 2011 The withdrawal by the creditor of the amounts consigned was subject to the express reservation of assailing the validity of the consignation. In such case, the creditor is not deemed to have waived the claims he reserved against his debtor. When the amount consigned does not cover the entire obligation, the creditor may accept it, reserving his right to the balance. ART 1258 SOCO vs. MILITANTE, G.R. NO. L-58961 June 28, 1983

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If the creditor to whom tender of payment has been made refuses without just cause to accept it, the debtor shall be released from responsibility by consignation which is the act of depositing the thing due with the court or judicial authorities but it generally requires a prior tender of payment. ART 1259 SOCO vs. MILITANTE, G.R. NO. L-58961 June 28, 1983 Defendant contended that payments of rental thru checks were made to the plaintiff but the latter refused to accept them, hence defendant authorized the bank to make consignation with the Clerk of Court. In order to be valid, the tender of payment must be made in lawful currency, but payment in check by the debtor may be acceptable as valid, if no prompt objection to said payment is made. SOCO vs. MILITANTE, G.R. NO. L-58961 June 28, 1983 The decision subject of the present petition for review holds the view that there was substantial compliance with the requisites of consignation and so ruled in favor of private respondent. Substantial compliance is not enough and the essential requisites of a valid consignation, under Articles 1256 to 1261 of the New Civil Code must be complied with fully and strictly in accordance with the law and must be accorded a mandatory construction. Immaculata vs. Navarro, G.R. NO.L-42230, April 15, 1988 Respondents alleged that the offer to redeem was not sincere, because there was no consignation. The right to redeem is a RIGHT, not an obligation, therefore, there is no consignation required to preserve the right to redeem. TENDER OF PAYMENT SPOUSES CACAYORIN vs. ARMED FORCES AND POLICE MUTUAL BENEFIT ASSOCIATION, INC., G.R. NO.171298, April 15, 2013 Petitioner alleged that the lack of prior tender of payment to their consignation case is because they were at a loss as to which between the two the Rural Bank or AFPMBAI was entitled to such a tender of payment. Article 1256 authorizes consignation alone, without need of prior tender of payment, where the ground for consignation is that the creditor is unknown, or does not appear at the place of payment; or is 96

incapacitated to receive the payment at the time it is due; or when, without just cause, he refuses to give a receipt; or when two or more persons claim the same right to collect; or when the title of the obligation has been lost. SPOUSES TEOFILO vs. REYES, G.R. NO. 150913, February 20, 2003 Petitioners failed to (a) offer a valid and unconditional tender of payment; (b) notify respondents of the intention to deposit the amount with the court; and (c) show the acceptance by the creditor of the amount deposited as full settlement of the obligation, or in the alternative, a declaration by the court of the validity of the consignation. In order that consignation may be effective the debtor must show that (a) there was a debt due; (b) the consignation of the obligation had been made because the creditor to whom a valid tender of payment was made refused to accept it; (c) previous notice of the consignation had been given to the person interested in the performance of the obligation; (d) the amount due was placed at the disposal of the court; and, (e) after the consignation had been made the person interested was notified thereof. SPOUSES CACAYORIN vs. ARMED FORCES AND POLICE MUTUAL BENEFIT ASSOCIATION, INC., G.R. NO.171298 : April 15, 2013 Petitioner alleged that the lack of prior tender of payment to their consignation case was because they were at a loss as to which between the two the Rural Bank or AFPMBAI was entitled to such a tender of payment. Article 1256 authorizes consignation alone, without need of prior tender of payment, where the ground for consignation is that the creditor is unknown, or does not appear at the place of payment; or is incapacitated to receive the payment at the time it is due; or when, without just cause, he refuses to give a receipt; or when two or more persons claim the same right to collect; or when the title of the obligation has been lost. C. DACION EN PAGO CALTEX (PHILIPPINES), INC., vs. CA, G.R. NO. 72703, November 13, 1992 Dation in payment does not necessarily mean total extinguishment of the obligation but only up to the value of the thing given and the obligation is 97

totally extinguished only when the parties, by aG.R.eement, express or implied, or by their silence, consider the thing as equivalent to the obligation. PNB vs. PINEDA, G.R. NO. L-46658 May 13, 1991 Dation in payment is the delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation. The repossession of the machinery and equipment in question was merely to secure the payment of TCC's loan obligation and not for the purpose of transferring ownership thereof to PNB in satisfaction of said loan. FILINVEST vs PHILIPPINE ACETYLENE, G.R. NO. L-50449 January 30, 1982 In the absence of clear consent of appellee to the proferred special mode of payment, there can be no transfer of ownership from appellant to appellee by mere delivery to and acceptance by him of the vehicle and should not be construed as actual payment or more specifically, dacion en pago.

CITIZENS SURETY vs. COURT OF APPEALS, G.R. NO. L-48958 June 28, 1988 In opposing the money claim, Respondent alleged that the surety bonds and the indemnity agreements had been extinguished by the execution of the deed of assignment, because this amounted to dation in payment whereby the former is considered to have alienated his property in favor of the latter in satisfaction of a monetary debt (Artide 1245). The transaction could not be dation in payment because the deed of assignment was executed on December 4, 1959, the obligation of the assignor to refund the assignee had not yet arisen, hence, there was no obligation yet on the part of the petitioner. D. COMPENSATION SOLINAP vs. DEL ROSARIO, G.R. No. L-50638 July 25, 1983 For compensation to take place, it is required that the amount involved be certain and liquidated. Compensation cannot take place where one's claim against the other is still the subject of court litigation. 98

ART 1980 BPI vs CA, G.R. NO. 136202, January 25, 2007 Petitioner, as a collecting agent, debited Salazar's account. The account was different from the original account to which the proceeds of the check were credited but both accounts belonged to Salazar. The debited account was the account of the sole proprietorship she owns. The other account was her personal account. A bank generally has a right of set-off over the deposits therein for the payment of any withdrawals on the part of a depositor, because fixed, savings, and current deposits of money in banks and similar institutions are governed by the provisions concerning simple loan, hence, the relationship between banks and depositors is that of creditor and debtor. Legal compensation under Article 1278 of the Civil Code may take place when all the requisites mentioned in Article 1279 are present. GAN TION vs. HON. COURT OF APPEALS, G.R. NO. L-22490, May 21, 1969 The award for attorney's fees is made in favor of the litigant, not of his counsel, hence, it is the litigant, not his counsel, who is the judgment creditor and who may enforce the judgment by execution, such credit, therefore, may properly be the subject of legal compensation. ART 1278 PNB vs VDA. DE ONG ACERO, G.R. NO. L-69255, February 27, 1987 PNB's main thesis is that when it opened a savings account for ISABELA, it (PNB) became indebted to ISABELA, so that when ISABELA itself subsequently came to be indebted to it on account of ISABELA's breach of the terms of the Credit Agreement, ISABELA and PNB became at the same time creditors and debtors of each other, thus compensation automatically took place between them, in accordance with Article 1278 of the Civil Code. Compensation shall take when two persons, in their own right, are creditors and debtors of each other and that compensation may transpire by operation of law, as when all the requisites therefor, set out in Article 1279, are present. Nonetheless these legal provisions can not apply if it has not proven by competent evidence that PNB is a creditor of ISABELA. 99

FRANCIA vs. IAC, G.R. NO. L-67649 June 28, 1988 Francia contends that his tax delinquency has been extinguished by legal compensation and claims that the government owed him when a portion of his land was expropriated, hence, his tax obligation had been set-off by operation of law. The general rule based on grounds of public policy is well-settled that no set-off admissible against demands for taxes levied for general or local governmental purposes because taxes are not in the nature of contracts between the party and party but grow out of duty to, and are the positive acts of the government to the making and enforcing of which, the personal consent of individual taxpayers is not required. SYCIP vs. HONORABLE COURT OF APPEALS, G.R. NO. L-38711, January 31, 1985 Petitioner contends that respondent Court of Appeals erred in not applying the provisions on compensation or setting-off debts despite evidence showing that Lapuz, an agent of Albert Smith and/or Dr. Dwight Dill, owed him. Compensation takes place only when two persons in their own right are creditors and debtors of each other, and that each one of the obligors is bound principally and is at the same time a principal creditor of the other. MINDANAO PORTLAND CEMENT CORPORATION vs. CA, G.R. NO. L62169, February 28, 1983 It is clear from the record that both corporations, petitioner Mindanao Portland Cement Corporation (appellant) and respondent Pacweld Steel Corporation (appellee), were creditors and debtors of each other, their debts to each other consisting in final and executory judgments of the Court of First Instance in two (2) separate cases, ordering the payment to each other of the sum of P10,000.00 by way of attorney's fees. The two (2) obligations, therefore, respectively offset each other, compensation having taken effect by operation of law and extinguished both debts to the concurrent amount of P10,000.00, pursuant to the provisions of Arts. 1278, 1279 and 1290 of the Civil Code, since all the requisites provided in Art. 1279 of the said Code for automatic compensation "even though the creditors and debtors are not aware of the compensation" were duly present. THE INTERNATIONAL CORPORATE BANK INC. vs. IAC, G.R. NO. L69560 June 30, 1988 100

Petitioner contended that, after extrajudicially foreclosing the mortgage, private respondent still owes the former an amount, by way of deficiency. Petitioner also claimed that it has the right to apply or set off private respondent's money market claim despite the fact that the validity of the extrajudicial foreclosure sale and petitioner's claim for deficiency are still in question. Article 1279 of the Civil Code requires among others, that in order that legal compensation shall take place, "the two debts be due" and "they be liquidated and demandable", because compensation is not proper where the claim of the person asserting the set-off against the other is not clear nor liquidated. MONDRAGON vs. SOLA, JR., G.R. NO. 174882 January 21, 2013 Respondent reneged on his promise to pay petitioner. Petitioner thereafter withheld the payment of respondent's service fees and applied the same as partial payments of the debt by way of compensation. Compensation is a mode of extinguishing to the concurrent amount the obligations of persons who in their own right and as principals are reciprocally debtors and creditors of each other. Legal compensation takes place by operation of law when all the requisites are present, as opposed to conventional compensation which takes place when the parties aG.R.ee to compensate their mutual obligations even in the absence of some requisites. MONTEMAYOR vs. MILLORA, G.R. NO. 168251.

July 27, 2011

Jesus contends that offsetting cannot be made because the judgment of the RTC failed to specify the amount of attorney’s fees and maintains that for offsetting to apply, the two debts must be liquidated or ascertainable and the trial court merely awarded to Vicente attorney’s fees based on quantum meruit without specifying the exact amount thereof. A debt is considered liquidated, not only when it is expressed already in definite figures which do not require verification, but also when the determination of the exact amount depends only on a simple arithmetical operation. E. NOVATION LBP vs. ONG, , G.R. NO. 190755, November 24, 2010 Land Bank faults the CA for finding that novation given that substitution of debtors was made without its consent, thus, it was not bound to recognize the substitution under the rules on novation. Novation which 101

consists in substituting a new debtor in the place of the original one, may be made even without the knowledge or against the will of the latter, but not without the consent of the creditor. BOYSAW vs. INTERPHIL PROMOTIONS, G.R. NO. L-22590, March 20, 1987 The assignment and transfer, first to Araneta, and subsequently, to appellant Yulo, Jr., of the managerial rights over Boysaw is without the knowledge or consent of Interphil. The consent of the creditor to the change of debtors, whether in expromision or delegacion is an, indispensable requirement , since substitution of one debtor for another may delay or prevent the fulfillment of the obligation by reason of the inability or insolvency of the new debtor, hence, the creditor should agree to accept the substitution in order that it may be binding on him. CALIFORNIA BUS LINES, INC. vs. STATE INVESTMENT HOUSE, INC., G.R. NO. 147950. December 11, 2003 There was no change in the object of the prior obligations in the restructuring agreement since it merely provided for a new schedule of payments and additional security giving Delta authority to take over the management and operations of CBLI in case CBLI fails to pay installments equivalent to 60 days. With respect to obligations to pay a sum of money, this Court has consistently applied the well-settled rule that the obligation is not novated by an instrument that expressly recognizes the old, changes only the terms of payment, and adds other obligations not incompatible with the old ones, or where the new contract merely supplements the old one. AJAX MARKETING vs. HON. COURT OF APPEALS, G.R. NO. 118585 September 14, 1995 In their interrelated first and second assignment of errors, petitioners argue that a novation occurred when their three (3) loans, which are all secured by the same real estate property were consolidated into a single loan of P1 million under Promissory Note, thereby extinguishing their monetary obligations and releasing the mortgaged property from liability. The well settled rule is that novation is never presumed and it will not be allowed unless it is clearly shown by express agreement, or by acts of equal import, thus, to effect an objective novation it is imperative that the new obligation expressly declare that the old obligation is thereby extinguished, or that the new obligation be on every point incompatible with the new one. 102

F. RESCISSION UNIVERSAL FOOD CORPORATION vs. CA, G.R. NO. L-29155, May 13, 1970 Respondent patentee was dismissed as the permanent chief chemist of the corporation without any fault or negligence on his part after the execution of the Bill of Assignment, prompting him to rescind the contract. The general rule is that rescission of a contract will not be permitted for a slight or casual breach, but only for such substantial and fundamental breach as would defeat the very object of the parties in making the agreement. ART 1191 DEL CASTILLO Vda. DE MISTICA vs. SPOUSES NAGUIAT, G.R. NO. 137909, December 11, 2003 In the present case, the failure of respondents to pay the balance of the purchase price within ten years from the execution of the Deed did not amount to a substantial breach. Under Article 1191 of the Civil Code, the right to rescind an obligation is predicated on the violation of the reciprocity between parties, brought about by a breach of faith by one of them however, rescission is allowed only where the breach is substantial and fundamental to the fulfillment of the obligation.

, PALAY vs. CLAVE , G.R. NO. L-56076 September 21, 1983 The contract agreed upon by the parties provided for automatic extrajudicial rescission upon default in payment without need of notice and with forfeiture of all installments paid. Upon default of the respondent, petitioner rescinded the contract. Respondent questioned the validity of the rescission. The judicial action for the rescission of a contract is not necessary where the contract provides that it may be revoked and cancelled for violation of any of its terms and conditions, however there should be at least a written notice sent to the defaulter informing him of the rescission. ART 1169,1191

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SOLAR HARVEST, INC., vs DAVAO CORRUGATED CORPORATION, G.R. NO. 176868. July 26, 2010

CARTON

The CA added that even assuming that the agreement was for respondent to deliver the boxes, respondent would not be liable for breach of contract as petitioner had not yet demanded from it the delivery of the boxes. Without a previous demand for the fulfillment of the obligation, petitioner would not have a cause of action for rescission against respondent as the latter would not yet be considered in breach of its contractual obligation, since the right to rescind a contract arises once the other party defaults in the performance of his obligation. OSMEÑA III vs SSS, September 13, 2007 The Letter-Agreement, the SPA, the SSC resolutions assailed in this recourse, and the Invitation to Bid sent out to implement said resolutions, all have a common subject: the Shares – the 187.84 Million EPCIB common shares, which, as a necessary consequence of the BDOEPCIB merger which saw EPCIB being absorbed by the surviving BDO, have been transferred to BDO and converted into BDO common shares under the exchange ratio set forth in the BDO-EPCIB Plan of Merger. As thus converted, the subject Shares are no longer equity security issuances of the now defunct EPCIB, but those of BDO-EPCI, which, needless to stress, is a totally separate and distinct entity from what used to be EPCIB. Under the law on obligations and contracts, the obligation to give a determinate thing is extinguished if the object is lost without the fault of the debtor, and per Art. 1192 (2) of the Civil Code, a thing is considered lost when it perishes or disappears in such a way that it cannot be recovered. VILLAMAR vs. MANGAOIL, G.R. NO. 188661 : April 11, 2012 Petitioner alleged that the absence of stipulations in the aG.R.eement and absolute deed of sale entered into by Petitioner and Respondent expressly indicating the consequences of the former's failure to deliver the physical possession of the subject property and the certificate of title covering the same, the Respondent is not entitled to demand for the rescission of their contract pursuant to Article 1191 of the NCC. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him", 104

this remains true notwithstanding the absence of express stipulations in the agreement indicating the consequences of breaches which the parties may commit. AYSON-SIMON vs. ADAMOS, G.R. NO. L-39378, August 28, 1984 Defendants contend (1) that the fulfillment and the rescission of the obligation in reciprocal ones are alternative remedies, and plaintiff having chosen fulfillment in the Civil Case, she cannot now seek rescission; and (2) that even if plaintiff could seek rescission the action to rescind the obligation has prescribed. The rule that the injured party can only choose between fulfillment and rescission of the obligation, and cannot have both, applies when the obligation is possible of fulfillment, if the fulfillment has become impossible, Article 1191 (3) allows the injured party to seek rescission even after he has chosen fulfillment. ART 1234 ANGELES, ET AL vs. CALASANZ, G.R. NO. L-42283, March 18, 1985 The breach of the contract adverted to by the defendants-appellants is so slight and casual when we consider that apart from the initial downpayment of P392.00 the plaintiffs-appellees had already paid the monthly installments for a period of almost nine (9) years. If the obligation has been substantially performed in good faith, the obligor may recover as though there had been a strict and complete fulfillment, less damages suffered by the obligee. UP vs. DE LOS ANGELES, G.R. NO. L-28602, September 29, In the first place, UP and ALUMCO had expressly stipulated in the "Acknowledgment of Debt and Proposed Manner of Payments" that, upon default by the debtor ALUMCO, the creditor (UP) has "the right and the power to consider, the Logging Agreement dated as rescinded without the necessity of any judicial suit." The party who deems the contract violated may consider it resolved or rescinded, and act accordingly, without previous court action, but it proceeds at its own risk, for it is only the final judgment of the corresponding court that will conclusively and finally settle whether the action taken was or was not correct in law. G. RESTITUTION

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UNIVERSAL FOOD CORPORATION vs. THE COURT OF APPEALS, MAGDALO V. FRANCISCO, SR., and VICTORIANO N. FRANCISCO, G.R. NO. L-29155, May 13, 1970 Petitioner contends that the Court of Appeals erred in ordering the corporation to return to the respondents the trademark and formula for Mafran sauce. Rescission creates the obligation to return the things which were the object of the contract. C O N T R A C T S

I. A. DEFINITION SPOUSES BALILA vs. IAC, G.R. NO. L-68477 October 29, 1987 A contract is a meeting of minds between two persons whereby one binds himself with respect to the other to give something or render some service, the Central Bank of the Philippines in the exercise of its Administrative power did not create any contractual obligations. B. CONTRACTS AS A SOURCE OF OBLIGATIONS BATCHELDER vs. THE CENTRAL BANK OF THE PHILIPPINES, G.R. NO. L-25071, July 29, 1972 Obligations arise from 1) law; 2) contracts; 3) quasi-contracts; 4) acts or omissions punished by law and 5) quasi-delicts, the circular issued by the Central Bank has the force and effect of the law. Obligations arising from law, however, is never presumed. II. ESSENTIAL ELEMENTS OF A CONTRACT SPOUSES TONGSON vs. EMERGENCY PAWNSHOP BULA, G.R. 167874. January 15, 2010 A valid contract requires the concurrence of the following essential elements: (1) consent or meeting of the minds, that is, consent to transfer ownership in exchange for the price; (2) determinate subject matter; and (3) price certain in money or its equivalent. 106

In the present case, there is no question that the subject matter of the sale is the 364-square meter Davao lot owned by the Spouses Tongson and the selling price agreed upon by the parties is P3,000,000, but the existence of the remaining element, which is consent of the contracting parties, to sell the property, claiming that their consent was vitiated by fraud, renders the contract of sale void. A. CONSENT LAND BANK vs. HEIRS OF SPOUSES SORIANO, G.R. NO. 178312. January 30, 2012 Pending resolution of the case, both parties freely and voluntarily entered into an agreement for the purpose of finally settling their dispute in this case. As a contract, a compromise is perfected by mutual consent, however, a judicial compromise, while immediately binding between the parties upon its execution, is not executory until it is approved by the court and reduced to a judgment. LAGUNZAD vs. VDA. DE GONZALES, G.R. NO. L-32066 August 6, 1979 Petitioner takes the position that he was pressured into signing the Agreement because of private respondent's demand, for payment for the "exploitation" of the life story of Moises Padilla, otherwise, she would "call a press conference declaring the whole picture as a fake, fraud and a hoax and would denounce the whole thing in the press, radio, television and that they were going to Court to stop the picture." It is necessary to distinguish between real duress and the motive which is present when one gives his consent reluctantly because a contract is valid even though one of the parties entered into it against his own wish and desires, or even against his better judgment. VELASCO vs. HONORABLE COURT OF APPEALS, G.R. NO. L-31018 June 29, 1973 The material averments of petitioners' complaint disclose lack of complete "agreement in regard to the manner of payment" of the lot in question. A definite agreement on the manner of payment of the purchase price is an essential element in the formation of a binding and enforceable contract of sale. PALATTAO vs. CA, G.R. NO. 131726, May 7, 2002 107

Appellant made a qualified acceptance of appellee’s letter-offer of a parcel of land but appellee made a new proposal to pay the amount in staggered amounts within two years in quarterly amortizations. To convert the offer into a contract, the acceptance must be absolute and must not qualify the terms of the offer, for a qualified acceptance constitutes a counter-offer and is a rejection of the original offer and such acceptance is not sufficient to generate consent. B. CAUSE OF CONTRACTS ART 1354 LAW vs. OLYMPIC SAWMILL CO., G.R. NO. L-30771, May 28, 1984 The defendants admitted the principal obligation but claimed that the additional amount constituted usurious interest. Under Article 1354 of the Civil Code, the agreement of the parties relative to the additional amount is presumed to exist and is lawful, unless the debtor proves the contrary. Since no evidentiary hearing had been held, the defendants therefore had not proven that the obligation was illegal. C. CONSIDERATION ART. 1354 PENTACAPITAL INVESTMENT CORPORATION vs. MAHINAY, G.R. NO. 171736, July 5, 2010 As proof of lack of consideration, respondent (a) denied under oath that he owed petitioner a single centavo, (b) represented that he did not apply for a loan and (c) said that when he signed the promissory notes, they were all blank forms thus rendering the notes ineffective. It is presumed that consideration exists and is lawful unless the debtor proves the contrary and the presumption that a contract has sufficient consideration cannot be overthrown by the bare, uncorroborated and self-serving assertion of respondent that it has no consideration. HEIRS OF URETA, SR. vs. HEIRS OF LIBERATO URETA, G.R. NO. 165748. September 14, 2011 Although the contract states that the purchase price of ₱2,000.00 was paid by Policronio to Alfonso for the subject properties, it has been 108

proven that no such payment was made. It is well-settled that where a deed of sale states that the purchase price has been paid but in fact has never been paid, the deed of sale is null and void for lack of consideration. III. FORMALITIES ART 1724 DUE OBSERVANCE OF PRESCRIBED FORMALITIES WELDON CONSTRUCTION CORPORATION vs. COURT OF APPEALS, G.R. NO. L-35721 October 12, 1987 There was no written agreement on the additional price to be paid for said "extra works," hence, private respondent claims that the contractor aG.R.eed to make the additions without additional cost. In the absence of a written authority by the owner for the changes in the plans and specifications of the building and of a written agreement between the parties on the additional price to be paid to the contractor, as required by Article 1724, the claim for the cost of additional works must be denied. LAO SOK vs. SABAYSABAY, G.R. NO. L-61898 August 9, 1985 Petitioner Lao Sok promised to give his employees their separation pay, as soon as he receives the insurance proceeds for his burned building, but contends that the contract was orally made hence unenforceable since it does not comply with the Statute of Frauds. Contracts in whatever form they may have been entered into are binding on the parties unless form is essential for the validity and enforceability of that particular contract. ART 1356 GALLARDO vs.HONORABLE INTERMEDIATE APPELLATE COURT, G.R. NO. L-67742 October 29, 1987 The issue here is whether or not the unnotarized deed of sale can be considered as a valid instrument for effecting the alienation by way of sale of a parcel of land registerd under the Torrens System. The general rule enunciated in said Art. 1356 is that contracts are obligatory, in whatever form they may have been entered, provided all the 109

essential requisites for their validity are present, except when the law so requires requiring a contract to be in some form for validity or enforceability. IV. STAGES , PERFECTION Bugatti v. Court of Appeals, G.R. No. 138113. October 17, 2000 A contract undergoes three distinct stages – preparation or negotiation, its perfection, and finally, its consummation. Negotiation begins from the time the prospective contracting parties manifest their interest in the contract and ends at the moment of agreement of the parties. The perfection or birth of the contract takes place when the parties agree upon the essential elements of the contract. The last stage is the consummation of the contract wherein the parties fulfill or perform the terms agreed upon in the contract, culminating in the extinguishment thereof. ART 1315 , 1319 TONG BROTHERS CO., vs. IAC, G.R. NO. 73918 December 21, 1987 From the exchange of telegrams between the two parties, there was not yet a meeting of the minds as to the cause of the contract. The cause of a contract has been defined "as the essential reason which moves the contracting parties to enter into it (8 Manresa, 5th Edition, p. 450). In other words, the cause is the immediate, direct and proximate reason which justifies the creation of an obligation thru the will of the contracting parties (3 Castan, 4th Edition, p. 347)." (General Enterprises, Inc. v. Lianga Bay Logging Co., Inc., 11 SCRA 733, 739). For the private respondent, the cause of the contract was the repair of its vessel Zamboanga-J while for the petitioner the cause would be its commitment to repair the vessel and make it seaworthy. The telegrams dated January 17, January 20, and January 28, 1975 sent by the petitioner to the private respondent, however, indicate that the former had not accepted the repair of Zamboanga-J, the reason being that the extent of the repair to be made necessitated a major expense so that the petitioner insisted on the presence of the private respondent for evaluation before it accepted the repair of the wooden vessel. That the petitioner had not yet consented to the contract is evident when on January 28, 1975, it sent a telegram stating: "... NO AGREEMENT AS TO THE EX TENT OF REPAIRS AND PAYMENT WILL UNDOCK VESSEL." The fact that the private respondent who received this telegram ignored it, confirms that there was no perfected contract to repair Zamboanga-J.

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SANCHEZ vs. RIGOS, G.R. NO. L-25494 June 14, 1972 Since there may be no valid contract without a cause or consideration, the promisor is not bound by his promise and may, accordingly, withdraw it, and pending notice of its withdrawal, his accepted promise partakes, however, of the nature of an offer to sell which, if accepted, results in a perfected contract of sale.

V. INTERPRETATION OF CONTRACTS CITIZENS SURETY and INSURANCE COMPANY, INC., vs. COURT OF APPEALS, G.R. NO. L-48958 June 28, 1988 It is a basic and fundamental rule in the interpretation of contract that if the terms thereof are clear and leave no doubt as to the intention of the contracting parties, then the literal meaning of the stipulations shall control but when the words appear contrary to the evident intention of the parties, the latter shall prevail over the former and in order to judge the intention of the parties, their contemporaneous and subsequent acts shall be principally considered. ART 1375 , 1377 LIM YHI LUYA vs. COURT OF APPEALS, G.R. NO. L-40258 September 11, 1980 Words which may have different significations shall be understood in that which is most in keeping with the nature and object of the contract and in the interpretation of obscure words or stipulations in a contract shall not favor the party who caused the obscurity. VI. DEFECTIVE CONTRACTS A. VOID CONTRACTS ART 1411, 1420 BRIONES vs. CAMMAYO, ET AL., G.R. NO. L-23559, October 4, 1971 Stipulations authorizing the imposition of iniquitous or unconscionable interest are contrary to morals, if not against the law for these contracts are inexistent and void from the beginning. 111

ASIAN CATHAY FINANCE AND LEASING CORPORATION vs. SPOUSES G.R.AVADOR et al, G.R. NO. 186550, July 5, 2010 A contract of adhesion may be struck down as void and unenforceable for being subversive to public policy, when the weaker party is completely deprived of the opportunity to bargain on equal footing.

TIU vs. PLATINUM PLANS PHIL., INC., G.R. NO. 163512 February 28, 2007 Respondent contends that the inclusion of the two-year non-involvement clause in petitioner’s contract of employment was reasonable and needed since her job gave her access to the company’s confidential marketing strategies. A non-involvement clause is not necessarily void for being in restraint of trade as long as there are reasonable limitations as to time, trade, and place. CARIÑO vs. COURT OF APPEALS, G.R. NO. L-47661, July 31, 1987 Contracts of sale are void and produce no effect whatsoever where the price, which appears therein as paid, has in fact never been paid by the vendee to the vendor. TOPIC: SIMULATED CONTRACTS URETA vs. URETA, G.R. No. 165748, September 14, 2011 -Lacking in an absolutely simulated contract is consent which is essential to a valid and enforceable contract. Thus, where a person, in order to place his property beyond the reach of his creditors, simulates a transfer of it to another, he does not really intend to divest himself of his title and control of the property; hence, the deed of transfer is but a sham. Similarly, in this case, Alfonso simulated a transfer to Policronio purely for taxation purposes, without intending to transfer ownership over the subject lands. RUBIAS vs. BATILLER, G.R. NO. L-35702 May 29, 1973 The lower court held that the purchase by a lawyer of the property in litigation from his client is categorically prohibited by Article 1491, paragraph (5) of the Philippine Civil Code, and that consequently, plaintiff's purchase of the property in litigation from his client was void 112

and could produce no legal effect, by virtue of Article 1409, paragraph (7) of our Civil Code. Contracts "expressly prohibited or declared void by law' are "inexistent and that "(T)hese contracts cannot be ratified, neither can the right to set up the defense of illegality be waived." ART 1410 TONGOY vs. THE HONORABLE COURT OF APPEALS, G.R. NO. L45645 June 28, 1983 The issue in this case is whether or not the rights of herein respondents over subject properties, which were the subjects of simulated or fictitious transactions, have already prescribed. A void or inexistent contract is one which has no force and effect from the very beginning, as if it had never been entered into, and which cannot be validated either by time or by ratification. LITA ENTERPRISES, INC.,vs. IAC, G.R. NO. L-64693 April 27, 1984 Unquestionably, the parties herein operated under an arrangement, commonly known as the "kabit system", whereby a person who has been granted a certificate of convenience allows another person who owns motors vehicles to operate under such franchise for a fee, and the petitioner prays that private respondents be declared liable to petitioner for whatever amount the latter has paid. It is a fundamental principle of in pari delicto that the court will not aid either party to enforce an illegal contract, but will leave them both where it finds them. ARSENAL vs. IAC, G.R. NO. L-66696 July 14, 1986 Petitioner questions the validity of the sale between the respondent and Suralta but the lower court held that the benefit of said prohibition in the Public Land Act against the disposal of any land granted to a citizen under that law does not inure to any third party. The right to set up the nullity of a void or non-existent contract is not limited to the parties as in the case of annulable or voidable contracts. The right to set up the nullity of a void or non-existent contract is extended to third persons who are directly affected by the contract. MANOTOK REALTY, INC., vs. THE HON. COURT OF APPEALS, G.R. NO. L-45038 April 30, 1987 Don Legarda sold the paraphernal property of Dona Clara to the respondent. It was sold three months after he was appointed as administrator of the estate of Dona Clara Tambunting. The sale between Don Vicente Legarda and the private respondent is void ab initio, the 113

former being neither an owner nor administrator of the subject property, and the sale cannot be the subject of the ratification by the probate court. PORTUGAL vs. IAC, G.R. NO. 73564 March 25, 1988 Respondent, through fraudulent means was able to transfer the lot from his parents to himself without consideration or cause through a purported deed of The IAC held that the action had already prescribed because an action to annul a contract based on fraud prescribes in four years. The SC, however, held that the alleged contract of sale is vitiated by the total absence of a valid cause or consideration which is an indispensable requisite for the existence of a valid contract. Thus, Article 1410 of the Civil Code provides that '(T)he action or defense for the declaration of the inexistence of a contract does not prescribe. PHILIPPINE BANKING CORPORATION vs. LUI SHE, G.R. NO. L17587, September 12, 1967 The illicit purpose becomes the illegal causa rendering the contracts void. TEJA MARKETING vs. IAC, G.R. NO. L-65510 March 9, 1987 The parties operated under an arrangement, commonly known as the "kabit system" whereby a person who has been granted a certificate of public convenience allows another person who owns motor vehicles to operate under such franchise for a fee. Although not outrightly penalized as a criminal offense, the kabit system is invariably recognized as being contrary to public policy and, therefore, void and in existent and it is a fundamental principle that the court will not aid either party to enforce an illegal contract, but will leave both where it finds then. B. VOIDABLE CONTRACTS ART 1327 FRANCISCO vs. HERRERA, G.R. NO. 139982, November 21, 2002 The vendor Eligio, Sr. entered into an agreement with petitioner, but that the former’s capacity to consent was vitiated by senile dementia. Insane or demented persons cannot give consent to a contract, but if an insane 114

or demented person does enter into a contract, the legal effect is that the contract is voidable or annullable. CORONEL vs. CONSTANTINO, G.R. NO. 121069, February 7, 2003 Applying Articles 1317 and 1403 of the Civil Code, the Court of Appeals ruled that through their inaction and silence, the three sons of Emilia are considered to have ratified the aforesaid sale of the subject property by their mother. Ratification means that one under no disability voluntarily adopts and gives sanction to some unauthorized act or defective proceeding, which without his sanction would not be binding on him , hence, an alleged silence and inaction may not be interpreted as an act of ratification on their part. C. UNENFORCEABLE CONTRACTS YUVIENCO vs. DACUYCUY, G.R. NO. L-55048 May 27, 1981 Respondent judge assumed that as long as the requirements of perfection of a contract are present in a contract which involves payment in installments, the Statute of Frauds would no longer apply as long as the total price or consideration is mentioned in some note or memorandum and there is no need of any indication of the manner in which such total price is to be paid. In any sale of real property on installments, the Statute of Frauds read together with the perfection requirements of Article 1475 of the Civil Code must be understood and applied in the sense that the idea of payment on installments must be in the requisite of a note or memorandum therein contemplated. BISAYA LAND TRANSPORTATION CO., INC., vs. SANCHEZ, G.R. NO. 74623 August 31, 1987 In the case at bar, it is undisputed that Atty. Adolfo Amor was entrusted, as receiver, with the administration of BISTRANCO and it business, but the act of entering into a contract is one which requires the authorization of the court which appointed him receiver. The questioned contracts can rightfully be classified as unenforceable for having been entered into by one who had acted beyond his powers, due to Receiver Amor's failure to secure the court's approval of said Contracts. STATUTE OF FRAUDS AINZA vs. SPOUSES PADUA, G.R. NO. 165420, June 30, 2005 115

The contract of sale between Eugenia and Concepcion was evidenced by a receipt signed by Eugenia. The verbal contract of sale between did not violate the provisions of the Statute of Frauds because when a verbal contract has been completed, executed or partially consummated, its enforceability will not be barred by the Statute of Frauds, which applies only to an executory agreement, thus, where one party has performed his obligation, oral evidence will be admitted to prove the agreement. ORDUÑA vs. FUENTEBELLA, G.R. NO. 176841, June 29, 2010 Gabriel Sr., during his lifetime, sold the subject property to Antonita, the purchase price payable on installment basis, thus, Gabriel Sr. appeared to have been a recipient of some partial payments but after his death, his son questions the verbal sale contract between Gabriel Sr. and Antonita, and alleged that the contract is unenforceable for non-compliance with the Statute of Frauds. The Statute of Frauds, in context, provides that a contract for the sale of real property or of an interest therein shall be unenforceable unless the sale or some note or memorandum thereof is in writing and subscribed by the party or his agent. Where the verbal contract of sale, however, has been partially executed through the partial payments made by one party duly received by the vendor, as in the present case, the contract is taken out of the scope of the Statute. HERNANDEZ vs. COURT OF APPEALS, G.R. NO. L-41132 April 27, 1988 Both courts were of the view essentially that the evidence did not bear out the claim of fraud; that under the Statute of Frauds, the parties' covenant as to their properties' metes and bounds was unenforceable since it was not reduced to writing. Not every agreement "affecting land" must be put in writing to attain enforceability, under the Statute of Frauds, Article 1403(2) (e) of the Civil Code, such formality is only required of contracts involving leases for longer than one year, or for the sale of real property or of an interest therein. D. RESCISSIBLE CONTRACTS CABALIW vs. SADORRA, G.R. NO. L-25650 June 11, 1975 The conveyances made by Sadorra in favor of his son-in-law were fraudulent since about seven months after a judgment was rendered 116

against him in and without paying any part of that judgment, Sadorra sold the only two parcels of land belonging to the conjugal partnership to his son-in-law. Contracts by virtue of which the debtor alienates property by gratuitous title or alienations by onerous title when made by persons against whom some judgment has been rendered in any instance or some writ of attachment has been issued, are presumed to be made in fraud of creditors, and the decision or attachment need not refer to the property alienated and need not have been obtained by the party seeking rescission. AIR FRANCE vs. HONORABLE COURT OF APPEALS, G.R. NO. 104234 June 30, 1995 Petitioner moved for the issuance of an alias writ of execution on the ground of unsatisfied judgment against respondents and It likewise moved to declare the sale to a third party of a parcel of land in the name of the private respondent as one in fraud of creditors which was granted by the lower court. Rescissible contracts, not being void, they remain legally effective until set aside in a rescissory action and may convey title, and an action for rescission may not be raised or set up in a summary proceeding through a motion, but in an independent civil action and only after a full-blown trial. VII. EFFECT OF CONTRACTS DOCTRINES , PRINCIPLES 1. CONSENSUALITY OF CONTRACTS ART 1306 , 1336 , 1337 REPUBLIC OF THE PHILIPPINES vs. PLDT G.R. NO. L-18841 January 27, 1969 , The Republic commenced suit against the PLDT commanding the PLDT to execute a contract with it for the use of the facilities of latter's telephone system throughout the Philippines. Parties can not be coerced to enter into a contract where no agreement is had between them as to the principal terms and conditions of the contract since freedom to stipulate such terms and conditions is of the essence of our contractual system, and by express provision of the statute, a contract may be annulled if tainted by violence, intimidation, or undue influence (Articles 1306, 1336, 1337). 2. AUTONOMY OF CONTRACTS ART 1306 WILLIAM GOLANGCO CONSTRUCTION CORPORATION vs. 117

PHILIPPINE COMMERCIAL INTERNATIONAL BANK, G.R. NO. 142830 March 24, 2006 The provision in the construction contract providing for defects liability period was not shown as contrary to law, morals, good customs, pubic order or public policy, and by the nature of the obligation in such contract, the provision limiting liability for defects and fixing specific guaranty periods was not only fair and equitable but was also necessary. TIU vs. PLATINUM PLANS PHIL., INC., G.R. NO. 163512 February 28, 2007 Respondent contends that the inclusion of the two-year non-involvement clause in petitioner’s contract of employment was reasonable and needed since her job gave her access to the company’s confidential marketing strategies. A non-involvement clause is not necessarily void for being in restraint of trade as long as there are reasonable limitations as to time, trade, and place.

LEAL vs.IAC, G.R. NO. L-65425 November 5, 1987 It is admitted by both parties that the phrase "they shall not sell to others these three lots but only to the seller Vicente Santiago or to his heirs or successors" is an express prohibition against the sale of the lots described in the "Compraventa" to third persons or strangers to the contract. Parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. DEL CASTILLO Vda. DE MISTICA vs. SPOUSES NAGUIAT, G.R. NO. 137909. December 11, 2003 In the Kasulatan, it was stipulated that payment could be made even after ten years from the execution of the Contract, provided the vendee paid percent interest. The stipulations of the contract constitute the law between the parties; thus, courts have no alternative but to enforce them as aG.R.eed upon and written. MARIMPERIO vs. COURT OF APPEALS, G.R. NO. L-40234 December 14, 1987

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A contract is the law between the contracting parties, and when there is nothing in it which is contrary to law, morals, good customs, public policy or public order, the validity of the contract must be sustained.

ART 1159 OCCENA vs. HON. JABSON, G.R. NO. L-44349, October 29, 1976 Respondent's complaint seeks that the court "render judgment modifying the terms and Conditions of the Contract by fixing the proper shares that should pertain to the herein parties out of the gross proceeds from the sales of subdivided lots of subject subdivision", citing ART 1267 of the New Civil Code. The cited article does not grant the courts this authority to remake, modify or revise the contract between the parties as contractually stipulated with the force of law between the parties, so as to substitute its own terms for those covenanted by the parties themselves. CABAHUG vs NAPOCOR, G.R. NO. 186069, January 30, 2013 Disregarding the stipulations in the contract allowing additional compensation for easement fee, the CA ruled that Cabahug's attempt to collect further sums by way of additional easement fee and,or just compensation is violative of said contract. It is settled that a contract constitutes the law between the parties who are bound by its stipulations which, when couched in clear and plain language, should be applied according to their literal tenor and the courts cannot supply material stipulations, which contradict the intent of the parties. 3. MUTUALITY OF CONTRACTS BANCO FILIPINO SAVINGS vs. NAVARRO, G.R. NO. L-46591, July 28, 1987 Escalation clauses to be valid should specifically provide: (1) that there can be an increase in interest if increased by law or by the Monetary Board; and (2) in order for such stipulation to be valid, it must include a provision for reduction of the stipulated interest "in the event that the applicable maximum rate of interest is reduced by law or by the Monetary Board" in order to be valid which is known as deescalation clause. 119

SPOUSES FLORENDO vs. COURT OF APPEALS, G.R. NO. 101771 December 17, 1996 In order that obligations arising from contracts may have the force of law between the parties, there must be mutuality between the parties based on their essential equality, hence, a contract containing a condition which makes its fulfillment dependent exclusively upon the uncontrolled will of one of the contracting parties, is void. ART 1308 PHILIPPINE NATIONAL BANK vs. SPOUSES AGUSTIN, G.R. NO. 164549 September 18, 2009 The spouses Rocamora posit that their loan would not have bloated to more than double the original amount if PNB had not increased the interest rates and had it immediately foreclosed the mortgages. Any increase in the rate of interest made pursuant to an escalation clause must not be left solely to the will of one of the parties, but must be the result of a mutual agreement between the parties, hence, a de-escalation clause that would authorize a reduction in the interest rates corresponding to downward changes made by law or by the Monetary Board must be included, otherwise, the change carries no binding effect. 4. RELATIVITY , PRIVITY OF CONTRACTS DKC HOLDINGS CORPORATION vs. COURT OF APPEALS, G.R. NO. 118248 April 5, 2000 Being an heir there is privity of interest between the heir and the deceased, hence, heirs are bound by contracts entered into by their predecessors-in-interest except when the rights and obligations arising therefrom are not transmissible by (1) their nature, (2) stipulation or (3) provision of law. METROPOLITAN BANK vs. REYNADO, G.R. NO. 164538, August 9, 2010 Respondents are not parties to the agreement, nor assigns or heirs of either of the parties but who rely on the debt settlement agreement petitioner and Universal to preclude prosecution of the offense of estafa or prevent the incipience of any liability that may arise from the criminal offense. The civil law principle of relativity of contracts provides that 120

"contracts can only bind the parties who entered into it, and it cannot favor or prejudice a third person, even if he is aware of such contract and has acted with knowledge thereof." PRUDENTIAL BANK AND TRUST COMPANY vs. ABASOLO, G.R. NO. 186738, September 27, 2010 Contracts take effect only between the parties, their assigns and heirs, and if a contract should contain some stipulation in favor of a third person, the contracting parties must have clearly and deliberately conferred a favor upon the third person. VIII. KINDS OF CONTRACTS A. INNOMINATE CONTRACTS ART 1307 CORPUS vs. COURT OF APPEALS, G.R. NO. L-40424 June 30, 1980 There was no express contract between the parties for the payment of attorney's fees, but the respondent rendered legal services to petitioner. The payment of attorney's fees to respondent may be justified by virtue of the innominate contract of facio ut des (I do and you give which is based on the principle that "no one shall unjustly enrich himself at the expense of another" and under Article 1307 such contracts shall be regulated by the stipulations of the parties, by the general provisions or principles of obligations and contracts, by the rules governing the most analogous nominate contracts, and by the customs of the people. B. DIVISIBLE CONTRACTS BRIONES vs. CAMMAYO, ET AL., G.R. NO. L-23559, October 4, 1971 According to the appellants, a usurious loan is void due to illegality of cause or object, the rule of pari delicto applies, so that neither party can bring action against each other. A contract of loan with usurious interest consists of two stipulations which are divisible in the sense that the former can still stand without the latter, the principal and the accessory stipulations; the principal one is to pay the debt; the accessory stipulation is to pay interest thereon, and in case of a divisible contract, if the illegal terms can be separated from the legal ones, the latter may be enforced." C. CONTRACT OF ADHESION ART 1750 121

ONG YIU vs. HONORABLE COURT OF APPEALS, G.R. NO. L-40597 June 29, 1979 Petitioner contends that respondent Court committed grave error when it limited PAL's carriage liability to the amount of P100.00 as stipulated at the back of the ticket and argues that he had not actually entered into a contract with PAL limiting the latter's liability for loss or delay of the baggage of its passengers. While it may be true that petitioner had not signed the plane ticket he is nevertheless bound by the provisions thereof it being a contract of "adhesion", wherein one party imposes a ready made form of contract on the other and the one who adheres to the contract is in reality free to reject it entirely, but if he adheres, he gives his consent. ART 1326 C & C COMMERCIAL CORPORATION vs. MENOR, G.R. NO. L-28360 January 27, 1983 Advertisements for bidders are simply invitations to make proposals, and the advertiser is not bound to accept the highest or lowest bidder, unless the contrary appears. ART 1332 TANG vs. COURT OF APPEALS, G.R. NO. L-48563 May 25, 1979 It is the position of the petitioner that because Lee See Guat was illiterate and spoke only Chinese, she could not be held guilty of concealment of her health history because the applications for insurance were in English and the insurer has not proved that the terms thereof had been fully explained to her. The obligation to show that the terms of the contract had been fully explained to the party who is unable to read or understand the language of the contract, when fraud or mistake is alleged, devolves on the party seeking to enforce it. BUENAVENTURA ANGELES, ET AL. vs. URSULA TORRES CALASANZ, ET AL., G.R. NO. L-42283 March 18, 1985 The plaintiffs-appellees, eager to acquire a lot upon which they could build a home, affixed their signatures and assented to the terms and conditions of the contract and they had no opportunity to question nor change any of the terms of the agreement since it was offered to them on a "take it or leave it" basis. Such contracts are called contracts of adhesion, because the only participation of the party is the signing of his 122

signature or his "adhesion" thereto hence must be construed against the party causing it.

IX.

STIPULATION POR AUTRUI

BONIFACIO BROS., INC., ET AL., vs. MORA, ET AL., G.R. NO. L20853 May 29, 1967 The appellants seek to recover the insurance proceeds, relying upon the insurance contract executed by and between the State Bonding & Insurance Company, Inc. and Mora. Contracts take effect only between the parties thereto, except where the contract contains some stipulations, known as stipulations por atrui, in favor of a third person, who is allowed to avail himself of a benefit granted to him by the terms of the contract, provided that the contracting parties have clearly and deliberately conferred a favor upon such person, however such third person not a party to the contract has no action zagainst the parties thereto, and cannot generally demand the enforcement of the same, if he did not communicate his acceptance thereto to the obligor before the revocation. FLORENTINO vs. ENCARNACION, SR., G.R. NO. L-27696 September 30, 1977 To constitute a valid stipulation pour autrui it must be the purpose and intent of the stipulating parties to benefit the third. It is not sufficient that the third person may be incidentally benefited by the stipulation. G.R. NO. 120554 September 21, 1999 SO PING BUN vs. COURT OF APPEALS Petitioner prevailed upon DCCSI to lease the warehouse to his enterprise at the expense of respondent corporation. Although petitioner took interest in the property of respondent corporation and benefited from it, nothing on record imputes deliberate wrongful motives or malice on him. Any third person who induces another to violate his contract shall be liable for damages to the other contracting party, lack of malice, however, precludes damages.

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