Pointers for Civil Law 2014 Bar Exams by Professor Victoria V.

Loanzon
Preliminary Title:
Effect and Application of Laws
General rule when a law takes effect: 15 days after publication in a newspaper of general circulation(Basa v.
Mercado, 61 Phil. 636) ; except when the law provides another date of effectivity; remember that a law which
produces a burden on an individual must be published to make liable (Lara v. Del Rosario, 154); even during
the period of Martial Law, S.C. required publication of issuances of President Marcos directives (Tanada v.
Tuvera, 1985);interpretative in nature, internal rules (CIR v. Lhullier, 2003 - when administrative agency goes
beyond merely providing for a means for facilitating transactions but substantially increases the burden on the
affected party, then it is no longer covered) and matters which affect reassignment and movement of personnel
need not be published(exceptions cited in Tanada v. Tuvera); Municipal ordinances shall be governed by the
Local Government Code (Hagonoy Market Vendors Assn v. Mun of Hagonay, 2002 this is the exception to
the rule on publication in newspaper of general circulation and Official Gazette)
Please note:
Nagkakaisang Maralita ng Sitio Masigasing, Inc. v. Military Shrine Services- PVAO (June 2013) The court held
that the publication must be in full or it is no publication at all since its purpose is to inform the public of the contents of
the laws. As correctly pointed out by the petitioners, the mere mention of the number of the presidential decree, the title of
such decree, its whereabouts (e.g., "with Secretary Tuvera"), the supposed date of effectivity, and in a mere supplement of
the Official Gazette cannot satisfy the publication requirement.1wphi1 This is not even substantial compliance. This was
the manner, incidentally, in which the General Appropriations Act for FY 1975, a presidential decree undeniably of
general applicability and interest, was "published" by the Marcos administration. The evident purpose was to withhold
rather than disclose information on this vital law. Applying the foregoing ruling to the instant case, this 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.
Lim v. DBP (July 1, 2013) The court held that unless the parties stipulate, personal notice to the mortgagor in

extrajudicial foreclosure proceedings is not necessary because Section 3 of Act 3135 only requires the posting
of the notice of sale in three public places and the publication of that notice in a newspaper of general
circulation.
What is a newspaper of general circulation?
1. It is published for dissemination of local news and general information.
2. It has bonafide subscription list of paying subscribers
3. It is published at regular intervals. (Newspapers of this nature are normally accredited by the courts)
4. It is not a newspaper devoted to the interests or published for entertainment of a particular class,
profession, trade, calling, race or religious denomination.
Waiver of Rights (Article 6) to be valid there must be:
1. A vested right
2. A voluntary relinquishment of such vested right
3. The person waiving must know of the existence of his right
General Rule: It is not possible to waive rights and obligations except:
1. When authorized by law (Read Articles 488 and 662 of the Civil Code)
2. When authorized by the holder of the correlative right
Please check distinction between substitute parental authority and special parental authority
Liability of schools for acts done by students under the Civil Code versus those covered under the Family
Code.

Conflict of Laws: Take note of the procedure on how a foreign judgment can be recognized in Philippine
jurisdiction; Review Article 26; study the effects of mixed marriages and the adoption of a Filipino child by
aliens (Read R.A. 8043).
Fujiki v. Marinay, June 26, 2013: The Court held that the Rule on Declaration of Absolute Nullity of Void
Marriages and Annulment of Voidable Marriages (A.M. No. 02-11-10-SC) does not apply in a petition to
recognize a foreign judgment relating to the status of a marriage where one of the parties is a citizen of a foreign
country. Moreover, in Juliano-Llave v. Republic, this Court held that the rule in A.M. No. 02-11-10-SC that only
the husband or wife can file a declaration of nullity or annulment of marriage "does not apply if the reason
behind the petition is bigamy."

The Court further said that for Philippine courts to recognize a foreign judgment relating to the status of a
marriage where one of the parties is a citizen of a foreign country, the petitioner only needs to prove the foreign
judgment as a fact under the Rules of Court. To be more specific, a copy of the foreign judgment may be
admitted in evidence and proven as a fact under Rule 132, Sections 24 and 25, in relation to Rule 39, Section
48(b) of the Rules of Court. Petitioner may prove the Japanese Family Court judgment through (1) an official
publication or (2) a certification or copy attested by the officer who has custody of the judgment. If the office
which has custody is in a foreign country such as Japan, the certification may be made by the proper diplomatic
or consular officer of the Philippine Foreign Service in Japan and authenticated by the seal of office.

Roehr v. Rodriguez (2003): Divorce decrees obtained in foreign countries by foreigners married to Filipino
citizens are recognizable in our jurisdiction but the legal effects thereof custody, care and support of children
must still be determined by Philippine courts.
Van Dorn v. Romillo (1985): 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 police and morality. However, aliens may obtain divorces abroad, which may be
recognized in the Philippines, provided they are valid according to their national law. In this case, the divorce
in Nevada released private respondent from the marriage from the standards of American law. Thus, pursuant to
his national law, private respondent is no longer the husband of petitioner. He would have no standing to sue in
the case below as petitioner's husband entitled to exercise control over conjugal assets. As he is bound by the
Decision of his own country's Court, which validly exercised jurisdiction over him, and whose decision he does
not repudiate, he is estopped by his own representation before said Court from asserting his right over the
alleged conjugal property.

Check the facts presented in the question and take note of the effectivity of the Family Code as the
situation may call for a different ruling if marriage took place prior to the effectivity.

Human Relations
Human Relations While there are only three (3) provisions under this topic, it is a staple question in bar
examinations. Anticipate a question which may involve a situation which may raise issues related to differences
of religion or cultural practice which may affect public morals.
Abuse of Right
California Clothing, Inc.et al. v. Quinones (October 23, 2013): The Court held that in the sphere of our law
on human relations, the victim of a wrongful act or omission, whether done wilfully or negligently, is not left
without any remedy or recourse to obtain relief for the damage or injury he sustained. Incorporated into our
civil law are not only principles of equity but also universal moral precepts which are designed to indicate
certain norms that spring from the fountain of good conscience and which are meant to serve as guides for
human conduct. First of these fundamental precepts is the principle commonly known as "abuse of rights" under
Article 19 of the Civil Code. It provides that Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due and observe honesty and good faith."x x x The

elements of abuse of rights are as follows: (1) there is a legal right or duty; (2) which is exercised in bad faith;
(3) for the sole intent of prejudicing or injuring another.
Under the abuse of rights principle found in Article 19 of the Civil Code, a person must, in the exercise of legal
right or duty, act in good faith. He would be liable if he instead acted in bad faith, with intent to prejudice
another. Good faith refers to the state of mind which is manifested by the acts of the individual concerned. It
consists of the intention to abstain from taking an unconscionable and unscrupulous advantage of another.35
Malice or bad faith, on the other hand, implies a conscious and intentional design to do a wrongful act for a
dishonest purpose or moral obliquity.
Compare and contrast:
Shookat v. C.A. and Hermosisima v. C.A.: Breach of promise to marry is not actionable.
Pe v. Pe and Wassmer v. Velez: Breach of promise to marry coupled with some positive act or event can make
the party liable for damages.
Unjust Enrichment
Rivelisa Realty v. First sta. Ana Builders, Corp., January, 2014): The Court concurs with the CA that First
Sta. Clara is entitled to be compensated for the development works it had accomplished on the project based on
the principle of quantum meruit. Case law instructs that under this principle, a contractor is allowed to recover
the reasonable value of the thing or services rendered despite the lack of a written contract, in order to avoid
unjust enrichment. Quantum meruit means that, in an action for work and labor, payment shall be made in such
amount as the plaintiff reasonably deserves. The measure of recovery should relate to the reasonable value of
the services performed because the principle aims to prevent undue enrichment based on the equitable postulate
that it is unjust for a person to retain any benefit without paying for it. In this case, it is undisputed that First Sta.
Clara already performed certain works on the project with an estimated value of P4, 578, 152.10. Clearly, to
completely deny it payment for the same would result in Rivelisa Realty's unjust enrichment at the formers
expense.
Gonzalo v. Tarnate, Jr. (January 15, 2014): Unjust enrichment exists, according to Hulst v. PR Builders, Inc.,
"when a person unjustly retains a benefit at the loss of another, or when a person retains money or property of
another against the fundamental principles of justice, equity and good conscience." The prevention of unjust
enrichment is a recognized public policy of the State, for Article 22 of the Civil Code explicitly provides that
"[e]very person who through an act of performance by another, or any other means, acquires or comes into
possession of something at the expense of the latter without just or legal ground, shall return the same to him."
It is well to note that Article 22 "is part of the chapter of the Civil Code on Human Relations, the provisions of
which were formulated as basic principles to be observed for the rightful relationship between human beings
and for the stability of the social order; designed to indicate certain norms that spring from the fountain of good
conscience; guides for human conduct that should run as golden threads through society to the end that law may
approach its supreme ideal which is the sway and dominance of justice."
Locsin III v. Mekeni Food Corp., (December 2013): The Court held that petitioner cannot recover the
monetary value of Mekenis counterpart contribution to the cost of the vehicle; that is not property or money
that belongs to him, nor was it intended to be given to him in lieu of the car plan. In other words, Mekenis
share of the vehicles cost was not part of petitioners compensation package. To start with, the vehicle is an
asset that belonged to Mekeni. Just as Mekeni is unjustly enriched by failing to refund petitioners payments, so
should petitioner not be awarded the value of Mekenis counterpart contribution to the car plan, as this would
unjustly enrich him at Mekenis expense.
There is unjust enrichment when a person unjustly retains a benefit to the loss of another, or when a person
retains money or property of another against the fundamental principles of justice, equity and good conscience.
The principle of unjust enrichment requires two conditions: (1) that a person is benefited without a valid basis
or justification, and (2) that such benefit is derived at the expense of another.
Article 36: Prejudicial Question
Review elements of prejudicial question
When asked about precedence of a prejudicial question,
1. Immediately determine if the two cases are criminal and civil in nature;

2. Filing of civil case prior to criminal case will allow suspension of criminal proceedings
3. Determine the elements of the offense committed in the criminal case
4. Review the reliefs sought in the civil case, if the case is decided in favor of the accused, would it have any
effect on the elements of the crime.
If civil case will have an effect on the elements of the crime, then there is a prejudicial question. If none,
then there is no prejudicial question. (Can be asked in Criminal Law)

Book I Persons
Capacity to Act:
Even if one has juridical capacity, the capacity to act is restricted and if one has a capacity to act; it can
enter into a juridical relationship.
Incapacity: natural (minority, insanity, deaf-mute, impotency); and civil (civil interdiction, absence,
insolvency, family relations, domicile)
Formalities of Marriage Review the requirements prior to celebration of marriage, the solemnities of
marriage and registration of act of marriage. Relate the vows of marriage with the obligations under the Civil
Code and constitutional protection of the family as basic unit of society. Anticipate a question on property
relations of the spouses in the event no pre-nuptial agreement is executed.
Macua vda de Avenido v. Tecla Hoybia Avenido, January 22, 2014: While a marriage certificate is considered
the primary evidence of a marital union, it is not regarded as the sole and exclusive evidence of marriage.
Jurisprudence teaches that the fact of marriage may be proven by relevant evidence other than the marriage
certificate. Hence, even a persons birth certificate may be recognized as competent evidence of the marriage
between his parents. In the present case, due execution was established by the testimonies of Adela Pilapil, who
was present during the marriage ceremony, and of petitioner herself as a party to the event. The subsequent loss
was shown by the testimony and the affidavit of the officiating priest, Monsignor Yllana, as relevant, competent
and admissible evidence. Since the due execution and the loss of the marriage contract were clearly shown by
the evidence presented, secondary evidencetestimonial and documentarymay be admitted to prove the fact of
marriage.

Republic v. Albios, October 16, 2013: Under Article 2 of the Family Code, for consent to be valid, it must be
(1) freely given and (2) made in the presence of a solemnizing officer. A "freely given" consent requires that the
contracting parties willingly and deliberately enter into the marriage. Consent must be real in the sense that it is
not vitiated nor rendered defective by any of the vices of consent under Articles45 and 46 of the Family Code,
such as fraud, force, intimidation, and undue influence. Consent must also be conscious or intelligent, in that the
parties must be capable of intelligently understanding the nature of, and both the beneficial or unfavorable
consequences of their act. Their understanding should not be affected by insanity, intoxication, drugs, or
hypnotism.

The avowed purpose of marriage under Article 1 of the Family Code is for the couple to establish a conjugal
and family life. The possibility that the parties in a marriage might have no real intention to establish a life
together is, however, insufficient to nullify a marriage freely entered into in accordance with law. The same
Article 1 provides that the nature, consequences, and incidents of marriage are governed by law and not subject
to stipulation. A marriage may, thus, only be declared void or voidable under the grounds provided by law.
There is no law that declares a marriage void if it is entered into for purposes other than what the
Constitution or law declares, such as the acquisition of foreign citizenship. Therefore, so long as all the

essential and formal requisites prescribed by law are present, and it is not void or voidable under the grounds
provided by law, it shall be declared valid.

Republic v. Cantor, December 10, 2013: Before a judicial declaration of presumptive death can be obtained, it
must be shown that the prior spouse had been absent for four consecutive years and the present spouse had a
well-founded belief that the prior spouse was already dead. Under Article 41 of the Family Code, there are four
(4) essential requisites for the declaration of presumptive death:

1.That the absent spouse has been missing for four consecutive years, or two consecutive years if the
disappearance occurred where there is danger of death under the circumstances laid down in Article 391, Civil
Code;
2. That the present spouse wishes to remarry;
3. That the present spouse has a well-founded belief that the absentee is dead; and
4. That the present spouse files a summary proceeding for the declaration of presumptive death of the absentee.

The present spouse has the burden of proof to show that all the requisites under Art. 41, Family Code are
present. In terms of declaration of presumptive death under Art. 41, a stricter standard is imposed.
Well-founded belief depends upon the circumstances of each case. The present spouse must prove that his/her
belief was the result of diligent and reasonable efforts and inquiries to locate the absent spouse and that based
on these efforts and inquiries, he/she believes that under the circumstances, the absent spouse is already dead. It
requires exertion of active effort (not a mere passive one).

Recent jurisprudence on Property Relations in a regime of marriage:

Philip Matthews vs. Benjamin A. Taylor and Joselyn C. Taylor, G.R. No. 164584, June 22, 2009. The
Supreme Court ruled: . . . we find and so hold that Benjamin has no right to nullify the Agreement of Lease
between Joselyn and petitioner. Benjamin, being an alien, is absolutely prohibited from acquiring private and
public lands in the Philippines. In any event, he had and has no capacity or personality to question the
subsequent lease of the Boracay property by his wife on the theory that in so doing, he was merely exercising
the prerogative of a husband in respect of conjugal property. To sustain such a theory would countenance
indirect contraversion of the constitutional prohibition. If the property were to be declared conjugal, this would
accord the alien husband a substantial interest and right over the land, as he would then have a decisive vote as
to its transfer or disposition. This is a right that the Constitution does not permit him to have.

The situation here can be distinguished from the situation in Borromeo vs. Descallar, G.R. No. 159310,
February 24, 2009. In Borromeo, the ex-boyfriend (who is a non-Philippine national and who funded the
purchase of the parcel of land) already sold the land to a qualified Philippine national; thus, the Supreme Court
reiterated its earlier rulings that the while the acquisition of land by a foreigner violates the Constitution, its
subsequent transfer to a qualified Philippine national cured the defect in the original transaction.
Bobby Tan v. Grace Andrade et al (August 2013): The Court held that Article 160 of the Civil Code provides
that "[a]ll 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." For this presumption to apply, the party invoking the same
must, however, preliminarily prove that the property was indeed acquired during the marriage.

Lim v. PCIB now known as BDO, January 15, 2014: the Court held that it is not unaware that all property of
the marriage is presumed to be conjugal, unless it is shown that it is owned exclusively by the husband or the
wife; that this presumption is not overcome by the fact that the property is registered in the name of the husband
or the wife alone; and that the consent of both spouses is required before a conjugal property may be mortgaged.
However, the Court found it iniquitous to apply the foregoing presumption especially since the nature of the
mortgaged property was never raised as an issue before the RTC, the CA, and even before this Court. In fact,
petitioner never alleged in his Complaint that the said property was conjugal in nature. Hence, respondent bank
had no opportunity to rebut the said presumption.

Sevilla, Jr. v. Aguila, September 23, 2013. In Dio v. Dio, the Court held that Article 147 of the Family Code
applies to the union of parties who are legally capacitated and not barred by any impediment to contract
marriage, but whose marriage is nonetheless declared void under Article 36 of the Family Code, as in this case.
The same shall be shall be governed by the rules on co-ownership.

In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have
been obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. For purposes
of this Article, a party who did not participate in the acquisition by the other party of any property shall be
deemed to have contributed jointly in the acquisition thereof if the formers efforts consisted in the care and
maintenance of the family and of the household.

Neither party can encumber or dispose by acts inter vivos of his or her share in the property acquired during
cohabitation and owned in common, without the consent of the other, until after the termination of their
cohabitation.

Bangayan v. Bangayan, July 2013: The Court saw no inconsistency in finding the marriage between Benjamin
and Sally null and void ab initio and, at the same time, non-existent. Under Article 35 of the Family Code, a
marriage solemnized without a license, except those covered by Article 34 where no license is necessary, "shall
be void from the beginning." In this case, the marriage between Benjamin and Sally was solemnized without a
license. The marriage between Benjamin and Sally was also non-existent. Applying the general rules on void or
inexistent contracts under Article 1409 of the Civil Code, contracts which are absolutely simulated or fictitious
are "inexistent and void from the beginning."Thus, the Court of Appeals did not err in sustaining the trial courts
ruling that the marriage between Benjamin and Sally was null and void ab initio and non-existent.
Benjamin and Sally cohabitated without the benefit of marriage. Thus, only the properties acquired by them
through their actual joint contribution of money, property, or industry shall be owned by them in common in
proportion to their respective contributions in accordance with Art.148 of the Family Code.

Paternity and Filiations Expect a question on filiations/parental authority/support and this might be related
parental authority and the right to succession. Check your provisions on admissibility of DNA to prove
paternity.

Grande v. Antonio, February 2014): Art. 176. Illegitimate children shall use the surname and shall be under
the parental authority of their mother, and shall be entitled to support in conformity with this Code. However,
illegitimate children may use the surname of their father if their filiation has been expressly recognized by their
father through the record of birth appearing in the civil register, or when an admission in a public document or
private handwritten instrument is made by the father. Provided, the father has the right to institute an action
before the regular courts to prove non-filiation during his lifetime. The legitime of each illegitimate child shall
consist of one-half of the legitime of a legitimate child.

From the foregoing provisions, it is clear that the general rule is that an illegitimate child shall use the surname
of his or her mother. The exception provided by RA 9255 is, in case his or her filiation is expressly recognized
by the father through the record of birth appearing in the civil register or when an admission in a public
document or private handwritten instrument is made by the father. In such a situation, the illegitimate child may
use the surname of the father.

Persons and Personality Since the Political Exam did not cover the viability of a person, check the relevant
provisions on this and the S.C. ruling on the constitutionality of the RH Bill. Review Geluz ruling on this.
Review also Cagandahan and Silvestre ruling on gender as it relates to Civil Registrar; use of surnames.
Recent jurisprudence on Annulment of Marriage:

The grounds for annulment of marriage are:

1. Absence of Parental Consent. A marriage was solemnized and one or the other party was eighteen (18) years
of age or over but below twenty-one (21) and consent was not given by the parents, guardian or person having
substitute parental authority. The Petition of Annulment must be filed within five (5) years of having attained
the age twenty-one. However, if the parties freely cohabited with the other as husband and wife after having
reached the age of twenty-one (21) a Petition of Annulment can no longer be filed.

2. Mental Illness. One or the either party was of unsound mind at the moment of the marriage. But if the parties
freely cohabited with each other after he or she came to reason the law prohibits the filing of a Petition.

3. Fraud. That the consent of either party was obtained by fraud, unless such party once having knowledge of
the fraud freely cohabited with the other as husband and wife. The petition must be filed within five (5) of
finding out the facts of the fraud.

4. That the consent of either party was obtained by force, intimidation or undue influence. Except when the
same has ceased and the party filing the petition freely cohabited with the other as husband and wife. The
injured party must file within five (5) years from the point in time the force, intimidation or undue influence
disappeared or came to an end.

5. One or the other party was physically incapable of consummating the marriage, and such incapacity
continues and appears to be incurable. The filing of the Petition of Annulment must be filed within five (5)
years after the marriage.

6. Either party was at the time of marriage afflicted with a sexually-transmitted-disease (STD) found to be
serious and seems to be incurable. This may also constitute fraud. The filing of the Petition of Annulment must
be filed within five (5) years after the marriage.

SEPARATION: being separated from your spouse with or without communication is not grounds for
annulment. It does not matter how many years you are separated. There is no law that annuls or voids a
marriage automatically. Only a judge in a court of law can annul, void or nullify a marriage.

INFIDELITY: is not a ground for annulment

Republic of the Philippines v. Rodolfo O. De Gracia, G.R. No. 171557. February 12, 2014.Psychological
incapacity; concept of; characterizations. Psychological incapacity, as a ground to nullify a marriage under
Article 36 of the Family Code, should refer to no less than a mental not merely physical incapacity that
causes a party to be truly incognitive of the basic marital covenants that concomitantly must be assumed and
discharged by the parties to the marriage which, as so expressed in Article 68 of the Family Code, among
others, include their mutual obligations to live together, observe love, respect and fidelity and render help and
support. There is hardly any doubt that the intendment of the law has been to confine the meaning of
psychological incapacity to the most serious cases of personality disorders clearly demonstrative of an utter
insensitivity or inability to give meaning and significance to the marriage. To the Courts mind, Natividads
refusal to live with Rodolfo and to assume her duties as wife and mother as well as her emotional immaturity,
irresponsibility and infidelity do not rise to the level of psychological incapacity that would justify the
nullification of the parties marriage. Indeed, to be declared clinically or medically incurable is one thing; to
refuse or be reluctant to perform ones duties is another. To hark back to what has been earlier discussed,
psychological incapacity refers only to the most serious cases of personality disorders clearly demonstrative of
an utter insensitivity or inability to give meaning and significance to the marriage.
Dedel v. CA. The Court held that respondents emotional immaturity and irresponsibility could not be equated
with psychological incapacity as it was not shown that these acts are manifestations of a disordered personality
which make her completely unable to discharge the essential marital obligations of the marital state, not merely
due to her youth, immaturity or sexual promiscuity. Although expert opinions furnished by psychologists
regarding the psychological temperament of parties are usually given considerable weight by the courts, the
existence of psychological incapacity must still be proven by independent evidence.

Renato Reyes So vs. Lorna Valera, G.R. No. 150677, June 5, 2009: The spouses had a common law
relationship for 18 years and had three children before contracting marriage which they sought to annul but the
Court did not grant the annulment.

The Supreme Court noted that there was no proof that Lornas psychological disorder was incurable since the
psychologists testimony itself glaringly failed to show that the respondents behavioral disorder was medically
or clinically permanent or incurable as established jurisprudence requires. Neither did the psychologist testify
that the disorder was grave enough to bring about the disability of the party to assume the essential obligations
of marriage.

In Molina, we ruled that mild characterological peculiarities, mood changes and occasional emotional
outbursts cannot be accepted as indicative of psychological incapacity. The illness must be shown as downright
incapacity or inability, not a refusal, neglect or difficulty, much less ill will. In other words, the root cause
should be a natal or supervening disabling factor in the person, an adverse integral element in the personality
structure that effectively incapacitates the person from really accepting and thereby complying with the
obligations essential to marriage. In the present case, the psychologist simply narrated adverse snapshots of
the respondents life showing her alleged failure to meet her marital duties, but did not convincingly prove her
permanent incapacity to meet her marital duties and responsibilities; the root or psychological illness that gave
rise to this incapacity; and that this psychological illness and consequent incapacity existed at the time the
marriage was celebrated.
Iwasawa v. Gangan et al., September 2013: As correctly pointed out by the OSG, the documentary exhibits
taken together concretely establish the nullity of the marriage of petitioner to private respondent on the ground
that their marriage is bigamous. The exhibits directly prove the following facts: (1) that private respondent
married Arambulo on June 20, 1994 in the City of Manila; (2) that private respondent contracted a second
marriage this time with petitioner on November 28, 2002 in Pasay City; (3) that there was no judicial
declaration of nullity of the marriage of private respondent with Arambulo at the time she married petitioner; (3)
that Arambulo died on July 14, 2009 and that it was only on said date that private respondents marriage with
Arambulo was deemed to have been dissolved; and (4) that the second marriage of private respondent to
petitioner is bigamous, hence null and void, since the first marriage was still valid and subsisting when the
second marriage was contracted.

Book II: Property and Related Transactions (Registration of Property (Land Titles and
Deeds)/Lease/Mortgage)
Basically review: Modes of acquiring property/ Registration of Property. The significance of the Torrens
system of titling of lands; classification of lands; what lands may be available for disposition (Read Boracay
Island Case penned by Justice Ruben Reyes. Take note of the constitutional provision that it is the sole
prerogative of the President to reclassify land of public domain.); Citizenship requirement; liens, encumbrances,
annotation, attachment, foreclosure (judicial and extrajudicial), exercise of right of redemption
Ownership and related transactions: Read on accession, accretion and reclamation; easement of right of
way; how usufruct is effected (by government and private parties); right to possession and other contracts which
may affect the exercise of the right of ownership (lease, mortgage, legacy); foreclosure; right of redemption
Please pay special attention to delayed accession, avulsion and uprooted trees in case of accession.
Recent jurisprudence on Property:
1. On Regalian Doctrine and disposition of land of public domain
Republic of the Philippines v. Emmanuel C. Cortez, G.R. No. 186639. February 5, 2014. The Court held that
to prove that the land subject of an application for registration is alienable; an applicant must establish the
existence of a positive act of the government. The annotation in the survey plan is not a conclusive proof.
The Civil Code makes it clear that patrimonial property of the State may be acquired by private persons through
prescription. This is brought about by Article 1113, which states that [a]ll things which are within the
commerce of man are susceptible to prescription, and that [p]roperty of the State or any of its subdivisions not
patrimonial in character shall not be the object of prescription.Nonetheless, Article 422 of the Civil Code states

that [p]roperty of public dominion, when no longer intended for public use or for public service, shall form
part of the patrimonial property of the State. Without such express declaration, the property, even if classified as
alienable or disposable, remains property of the public dominion, pursuant to Article 420(2), and thus incapable
of acquisition by prescription. It is only when such alienable and disposable lands are expressly declared by the
State to be no longer intended for public service or for the development of the national wealth that the period of
acquisitive prescription can begin to run. Such declaration shall be in the form of a law duly enacted by
Congress or a Presidential Proclamation in cases where the President is duly authorized by law.

Sps. Antonio Fortuna and Erlinda Fortuna v. Republic of the Philippines,G.R. No. 173423, March 5, 2014.
Jurisprudence has required that an applicant for registration of title acquired through a public land grant
must present incontrovertible evidence that the land subject of the application is alienable or disposable by
establishing the existence of a positive act of the government. Thus, it is essential for any applicant for
registration of title to land derived through a public grant to establish foremost the alienable and
disposable nature of the land. The Public Land Act provisions on the grant and disposition of alienable public
lands, specifically, Sections 11 and 48(b), will find application only from the time that a public land has been
classified as agricultural and declared as alienable and disposable.

Republic of the Philippines represented by Aklan National Colleges of Fisheries (ANCF) and Dr. Elenita R.
Adrade, in her capacity as ANCF Superintendent v. Heirs of Maxima Lachica Sin, namely: Salvacion L. Sin,
Rosario S. Enriquez, Francisco L. Sin, Maria S. Yuchintat, Manuel L. Sin, Jaime Cardinal Sin, Ramon L.
Sin, and Ceferina S. Vita,G.R. No. 157485, March 26, 2014.The requirements for judicial confirmation of
imperfect title are found in Section 48(b) of the Public Land Act, as amended by Presidential Decree No. 1073.
The two requisites for judicial confirmation of imperfect or incomplete title under CA No. 141, namely: (1)
open, continuous, exclusive, and notorious possession and occupation of the subject land by himself or through
his predecessors-in-interest under a bona fide claim of ownership since time immemorial or from June 12, 1945;
and (2) the classification of the land as alienable and disposable land of the public domain.
Republic of the Philippines v. Remman Enterprises, Inc. represented by Ronnie P. Inocencio, G.R. No.
199310. February 19, 2014. Section 14(1) of P.D. No. 1529 refers to the judicial confirmation of imperfect or
incomplete titles to public land acquired under Section 48(b) of Commonwealth Act (C.A.) No. 141, or the
Public Land Act, as amended by P.D. No. 1073. Under Section 14(1) of P.D. No. 1529, applicants for
registration of title must sufficiently establish: first, that the subject land forms part of the disposable and
alienable lands of the public domain; second, that the applicant and his predecessors-in-interest have been in
open, continuous, exclusive, and notorious possession and occupation of the same; and third, that it is under a
bona fide claim of ownership since June 12, 1945, or earlier.
2. Cases on Co-ownership:
Teodoro S. Teodoro, et al. v. Danilo Espino, et al., G.R. No. 189248, February 5, 2014. The court held that there is coownership whenever the ownership of an undivided thing or right belongs to different persons. Art. 1078. When there are
two or more heirs, the whole estate of the decedent is, before its partition, owned in common by such heirs, subject to the
payment of debts of the deceased.. Neither party can exclude the other from possession.

Raul V. Arambulo and Teresita Dela Cruz v. Genaro Nolasco and Jeremy Spencer Nolasco, G.R. No. 189420,
March 26, 2014. The Court held that Article 493 of the Code defines the ownership of the co-owner, clearly
establishing that each co-owner shall have full ownership of his part and of its fruits and benefits. Pertinent to
this case, Article 493 dictates that each one of the parties herein as co-owners with full ownership of their parts
can sell their fully owned part. The sale by the petitioners of their parts shall not affect the full ownership by the
respondents of the part that belongs to them. Their part which petitioners will sell shall be that which may be
apportioned to them in the division upon the termination of the co-ownership. The sale may be resorted to (a)
when the right to partition the property is invoked by any of the co-owners but because of the nature of the
property, it cannot be subdivided or its subdivision would prejudice the interests of the co-owners, and (b)

the co-owners are not in agreement as to who among them shall be allotted or assigned the entire property upon
proper reimbursement of the co-owners.
3. Cases on Purchaser in Good Faith:
Homeowners Savings and Loan Bank v. Asuncion P. Felonia and Lydia C. De Guzman, rep. by Maribel
Frias, et al., G.R. No. 189477. February 26, 2014. The Court held that.when a prospective buyer is faced
with facts and circumstances as to arouse his suspicion, he must take precautionary steps to qualify as a
purchaser in good faith. In Spouses Mathay v. CA, we determined the duty of a prospective buyer: Although it
is a recognized principle that a person dealing on a registered land need not go beyond its certificate of title, it is
also a firmly settled rule that where there are circumstances which would put a party on guard and prompt him
to investigate or inspect the property being sold to him, such as the presence of occupants/tenants thereon, it is
of course, expected from the purchaser of a valued piece of land to inquire first into the status or nature of
possession of the occupants, i.e., whether or not the occupants possess the land en concepto de dueo, in the
concept of the owner.. The failure of a prospective buyer to take such precautionary steps would mean
negligence on his part and would thereby preclude him from claiming or invoking the rights of a purchaser in
good faith.
Homeowners Savings and Loan Bank v. Asuncion P. Felonia and Lydia C. De Guzman, rep. by Maribel
Frias, et al., G.R. No. 189477. February 26, 2014. The Court said that lis pendens is a Latin term which
literally means, a pending suit or a pending litigation while a notice of lis pendens is an announcement to
the whole world that a real property is in litigation, serving as a warning that anyone who acquires an interest
over the property does so at his/her own risk, or that he/she gambles on the result of the litigation over the
property. It is a warning to prospective buyers to take precautions and investigate the pending litigation.
Bank of Commerce v. Spouses San Pablo, Jr. (550 Phil. 805, 821 (2007)), The Court has in the past declared
that a mortgagee has a right to rely in good faith on the certificate of title of the mortgagor of the property
offered as security, and in the absence of any sign that might arouse suspicion, the mortgagee has no obligation
to undertake further investigation. The Court also ruled that [i]n cases where the mortgagee does not directly
deal with the registered owner of real property, the law requires that a higher degree of prudence be exercised
by the mortgagee. Specifically, the court cited Abad v. Sps. Guimba (503 Phil. 321, 331-332 (2005)), where it
held: x x x While one who buys from the registered owner does not need to look behind the certificate of title,
one who buys from one who is not the registered owner is expected to examine not only the certificate of title
but all factual circumstances necessary for [one] to determine if there are any flaws in the title of the transferor,
or in [the] capacity to transfer the land.
4. Cases involving Mortgage over Property

Macaria Arguelles and the Heirs of the Deceased Petronio Arguelles v. Malarayat Rural Bank, Inc., G.R.
No. 200468, March 19, 2014. The Court said that although the instant case does not involve a sale but only a
mortgage, the same rule applies inasmuch as the law itself includes a mortgagee in the term purchaser. Thus,
where the mortgagor is not the registered owner of the property but is merely an attorney-in-fact of the same, it
is incumbent upon the mortgagee to exercise greater care and a higher degree of prudence in dealing with such
mortgagor..
Ursal v. Court of Appeals (509 Phil. 628, 642 (2005)), The court held that where the mortgagee is a bank, it
cannot rely merely on the certificate of title offered by the mortgagor in ascertaining the status of mortgaged
properties. Since its business is impressed with public interest, the mortgagee-bank is duty-bound to be more
cautious even in dealing with registered lands. Indeed, the rule that person dealing with registered lands can rely
solely on the certificate of title does not apply to banks.
Homeowners Savings and Loan Bank v. Asuncion P. Felonia and Lydia C. De Guzman, rep. by Maribel
Frias, et al., G.R. No. 189477. February 26, 2014. The Court held the mortgagor be the absolute owner of the
thing mortgaged is an essential requisite of a contract of mortgage. Article 2085 (2) of the Civil Code specifically says so:
Art. 2085. The following requisites are essential to the contracts of pledge and mortgage: x x x x (2) That the pledgor or
mortagagor be the absolute owner of the thing pledged or mortgaged. Succinctly, for a valid mortgage to exist, ownership
of the property is an essential requisite. Reyes v. De Leon cited the case of Philippine National Bank v. Rocha where it
was pronounced that a mortgage of real property executed by one who is not an owner thereof at the time of the
execution of the mortgage is without legal existence. Such that, according to DBP v. Prudential Bank, there being no
valid mortgage, there could also be no valid foreclosure or valid auction sale.

5. Action for Quieting of Title

Heirs of Pacifico Pocido, et al. v. Arsenia Avila and Emelinda Chua, G.R. No. 199146, March 19, 2014.
Having established that the disputed property is public land, the trial court was therefore correct in dismissing
the complaint to quiet title for lack of jurisdiction. The trial court had no jurisdiction to determine who among
the parties have better right over the disputed property which is admittedly still part of the public In an action
for quieting of title, the complainant is seeking for an adjudication that a claim of title or interest in property
adverse to the claimant is invalid, to free him from the danger of hostile claim, and to remove a cloud upon or
quiet title to land where stale or unenforceable claims or demands exist..
6. Cases on Recovery of Possession of Real Property
Carmencita Suarez v. Mr. and Mrs. Felix E. Emboy, Jr. and Marilou P. Emboy-Delantar, G.R. No.
187944, March 12, 2014 . Citing, Sps. Bonifacio R. Valdez, Jr. et al. vs. Hon. Court of Appeals, et al. (523 Phil.
39 (2006)), the Court is instructive anent the three kinds of actions available to recover possession of real
property, viz: (a) accion interdictal; (b) accion publiciana; and (c) accion reivindicatoria.
Accion interdictal comprises two distinct causes of action, namely, forcible entry (detentacion) and unlawful
detainer (desahuico) [sic]. In forcible entry, one is deprived of physical possession of real property by means of
force, intimidation, strategy, threats, or stealth whereas in unlawful detainer, one illegally withholds possession
after the expiration or termination of his right to hold possession under any contract, express or implied. The
two are distinguished from each other in that in forcible entry, the possession of the defendant is illegal from the
beginning, and that the issue is which party has prior de facto possession while in unlawful detainer, possession
of the defendant is originally legal but became illegal due to the expiration or termination of the right to possess.
The jurisdiction of these two actions, which are summary in nature, lies in the proper municipal trial court or
metropolitan trial court. Both actions must be brought within one year from the date of actual entry on the land,
in case of forcible entry, and from the date of last demand, in case of unlawful detainer. The issue in said cases
is the right to physical possession.

Accion publiciana is the plenary action to recover the right of possession which should be brought in the proper
regional trial court when dispossession has lasted for more than one year. It is an ordinary civil proceeding to
determine the better right of possession of realty independently of title. In other words, if at the time of the
filing of the complaint more than one year had elapsed since defendant had turned plaintiff out of possession or
defendants possession had become illegal, the action will be, not one of the forcible entry or illegal detainer,
but an accion publiciana. On the other hand, accion reivindicatoria is an action to recover ownership also
brought in the proper regional trial court in an ordinary civil proceeding.
Spouses Eulogio N. Antazo and Nelia C. Antazo vs. Leonides Doblada, et al., G.R. No. 178908, February 4,
2010. Unlawfully entering the subject property, erecting a structure thereon and excluding therefrom the prior
possessor would necessarily imply the use of force. In order to constitute force, the trespasser does not have to
institute a state of war. No other proof is necessary. Petitioners contend that respondents claim is not supported
by competent evidence. In ejectment cases, possession means nothing more than actual physical possession, not
legal possession in the sense contemplated in civil law. Prior physical possession is the primary consideration
in a forcible entry case. A party who can prove prior possession can recover such possession even against the
owner himself. Whatever may be the character of his possession, if he has in his favor prior possession in time,
he has the security that entitles him to remain on the property until a person with a better right lawfully ejects
him. The party in peaceable quiet possession shall not be thrown out by a strong hand, violence or terror. We
are convinced that respondents were in prior possession of the property and that petitioners deprived them of
such possession by means of force.
Nelson Lagazo vs. Gerald B. Soriano and Galileo B. Soriano, G.R. No. 170864, February 16, 2010. The
Court held that prior physical possession is an indispensable element in forcible entry cases. Thus, the ultimate
question in a case of this nature is who had prior physical possession of the disputed land.
8. Case on Prescription of Action over Real Property

Spouses Morris Carpo and Socorro Carpo vs. Ayala Land, Incorporated, G.R. No. 166577, February 3, 2010.
By laches is meant the negligence or omission to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has abandoned it or declined to assert it. It does not involve
mere lapse or passage of time, but is principally an impediment to the assertion or enforcement of a right, which
has become under the circumstances inequitable or unfair to permit. In the instant case, plaintiffs-appellees, as
well as their predecessor-in-interest, have not shown that they have taken judicial steps to nullify OCT No. 242,
from which ALIs title was derived, for forty-five (45) years. To allow them to do so now, and if successful,
would be clearly unjust and inequitable to those who relied on the validity of said OCT, the innocent purchasers
for value, who are protected by the precise provisions of P.D. 1529.
9. Sale of Property on Installment
Philippine National Bank v. Teresita Tan Dee, et al., G.R. No. 182128, February 19, 2014. The Court held
that a bank dealing with a property that is already subject of a contract to sell and is protected by the provisions
of P.D. No. 957 It is bound by the contract to sell. intended to be the subject of any other contract involving
buyers or potential buyers. In granting the loan, [the Bank] should not have been content merely with a clean
title, considering the presence of circumstances indicating the need for a thorough investigation of the existence
of buyers x x x. Wanting in care and prudence, the [Bank] cannot be deemed to be an innocent mortgagee. x x
x
Prescription/ Compromise
Prescription based on written agreement; statute of limitations; estoppel (by action and waiver); what may be
compromised; effect of a compromise
Book III: Different Modes of acquiring Ownership; Succession
Reserva Troncal: Pabalan et al v. The Heirs of simeon A.B. Maamo, March 20, 1013.Reserva troncal is a
special rule designed primarily to assure the return of a reservable property to the third degree relatives
belonging to the line from which the property originally came, and avoid its being dissipated into and by
relatives of the inheriting ascendant. The reservoir has the legal title and dominion to the reservable property
but subject to the resolutory condition that such title is extinguished if the reservoir predeceased the reserve.
The reservoir is a usufructuary to the reservable property. He may alienate it subject to reservation. The
transfree gets the revocable and conditional ownership of the reservoir. The transferees rights are revoked
upon the survival of the reserves at the time of the death of the reservoir but become indefeasible when
reservees predecease the reservoir.
Advance Inheritance: Bangayan v. Bangayan, July 3, 2013. In a common law relationship, the spouse cannot
claim any benefit on advance inheritance given by the other spouses father to the children born out of the
common law relationship as advance inheritance of the said grandchildren.
Effect of Act of the Deceased prior to death: Inocencion v. Hospicio de San Jose, September 25, 2013. A
lease contract is not essentially personal in character. Thus, the rights and obligations therein are

transmissible to the heirs. The general rule, therefore, is that 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. In the subject Contract of Lease, not only were there no
stipulations prohibiting any transmission of rights, but its very terms and conditions explicitly provided for the
transmission of the rights of the lessor and of the lessee to their respective heirs and successors. The contract is
the law between the parties. The death of a party does not excuse nonperformance of a contract, which involves
a property right, and the rights and obligations thereunder pass to the successors or representatives of the
deceased. Similarly, nonperformance is not excused by the death of the party when the other party has a
property interest in the subject matter of the contract.
Constantino et al v. Heirs of Pedro Constantino October 2, 2013. Section 23, Rule 130 of the Rules of Court
provides: Sec. 23. Disqualification by reason of death or insanity of adverse party. Parties or assignors of
parties to a case, or persons in whose behalf a case is prosecuted, against an executor or administrator or other
chay

representative of a deceased person, or against a person of unsound mind, upon a claim or demand against the
estate of such deceased person or against such person of unsound mind, cannot testify as to any matter of fact
occurring before the death of such deceased person or before such person became of unsound mind.
chanro

Ventura v. Heirs of Endaya, October 2, 2013: A contract to sell is defined as a bilateral contract whereby the
prospective seller, while expressly reserving the ownership of the subject property despite delivery thereof to
the prospective buyer, binds himself to sell the said property exclusively to the latter upon his fulfillment of the
conditions agreed upon, i.e., the full payment of the purchase price50 and/or compliance with the other
obligations stated in the contract to sell. Given its contingent nature, the failure of the prospective buyer to make
full payment and/or abide by his commitments stated in the contract to sell prevents the obligation of the
prospective seller to execute the corresponding deed of sale to effect the transfer of ownership to the buyer from
arising. As discussed in Sps. Serrano and Herrera v. Caguiat:
A contract to sell is akin to a conditional sale where the efficacy or obligatory force of the vendor's obligation
to transfer title is subordinated to the happening of a future and uncertain event, so that if the suspensive
condition does not take place, the parties would stand as if the conditional obligation had never existed. x x x.
V

alawlibrary

6. Obligations and Contracts

- Elements of a contract; enforcement of rights/warranties under a contract; what may be the subject matter of
contracts
- What are the sources of obligation; what is joint and solidary obligation and under what circumstances may
parties be held jointly and solidarily liable; Read Articles 141 and 142 of the Revised Penal Code in conjunction
of liabilities of innkeepers, etc; and employers and teachers.
- Extinguishment of Obligations; manner voluntary and involuntary.
Recent cases: (Lexoterica): Contract law; principle of relativity. The basic principle of relativity of contracts is
that contracts can only bind the parties who entered into it, and cannot favor or prejudice a third person, even if
he is aware of such contract and has acted with knowledge thereof Where there is no privity of contract, there
is likewise no obligation or liability to speak about. Philippine National Bank v. Teresita Tan Dee, et al., G.R.
No. 182128, February 19, 2014.
Article 1308 of the Civil Code; principle of mutuality of contracts. The credit agreement executed succinctly
stipulated that the loan would be subjected to interest at a rate determined by the Bank to be its prime rate plus
applicable spread, prevailing at the current month. This stipulation was carried over to or adopted by the
subsequent renewals of the credit agreement. PNB thereby arrogated unto itself the sole prerogative to
determine and increase the interest rates imposed on the Spouses Manalo. Such a unilateral determination of the
interest rates contravened the principle of mutuality of contracts embodied in Article 1308 of the Civil
Code.Philippine National Bank v. Sps. Enrique Manalo & Rosalinda Jacinto, et al., G.R. No. 174433,
February 24, 2014
Contracts; a contract where there is no mutuality between the parties partakes of the nature of a contract of
adhesion. The Court has declared that a contract where there is no mutuality between the parties partakes of the
nature of a contract of adhesion, and any obscurity will be construed against the party who prepared the
contract, the latter being presumed the stronger party to the agreement, and who caused the obscurity. PNB
should then suffer the consequences of its failure to specifically indicate the rates of interest in the credit
agreement. We spoke clearly on this in Philippine Savings Bank v. Castillo, to wit: The unilateral determination
and imposition of the increased rates is violative of the principle of mutuality of contracts under Article 1308 of
the Civil Code, which provides that [t]he contract must bind both contracting parties; its validity or compliance
cannot be left to the will of one of them. A perusal of the Promissory Note will readily show that the increase or
decrease of interest rates hinges solely on the discretion of petitioner. It does not require the conformity of the
maker before a new interest rate could be enforced. Any contract which appears to be heavily weighed in favor
of one of the parties so as to lead to an unconscionable result, thus partaking of the nature of a contract of
adhesion, is void. Any stipulation regarding the validity or compliance of the contract left solely to the will of
one of the parties is likewise invalid. Philippine National Bank v. Sps. Enrique Manalo & Rosalinda Jacinto,
et al., G.R. No. 174433, February 24, 2014

Breach of contract; gross negligence.The record reveals, however, that Union Bank was grossly negligent in the
handling and prosecution of Civil Case No. Q-52702. Its appeal of the December 12, 1991 Decision in said case
was dismissed by the CA for failure to file the required appellants brief. Next, the ensuing Petition for Review
on Certiorari filed with this Court was likewise denied due to late filing and payment of legal fees. Finally, the
bank sought the annulment of the December 12, 1991 judgment, yet again, the CA dismissed the petition for its
failure to comply with Supreme Court Circular No. 28-91. As a result, the December 12, 1991 Decision became
final and executory, and Bignay was evicted from the property. Such negligence in the handling of the case is
far from coincidental; it is decidedly glaring, and amounts to bad faith. [N]egligence may be occasionally so
gross as to amount tomalice [or bad faith]. Indeed, in culpa contractual or breach of contract, gross negligence
of a party amounting to bad faith is a ground for the recovery of Damages by the injured party.Bignay EX-IM
Philippines, Inc. v. Union Bank of the Philippines / Union Bank of the Philippines v. Bignay EX-IM
Philippines, Inc., G.R. No. 171590 & G.R. No. 171598, February 12, 2014.
Fraud; concept of; Article 1338 of the Civil Code. According to Article 1338 of the Civil Code, there is fraud
when one of the contracting parties, through insidious words or machinations, induces the other to enter into the
contract that, without the inducement, he would not have agreed to. Yet, fraud, to vitiate consent, must be the
causal (dolo causante), not merely the incidental (dolo incidente), inducement to the making of the contract. In
Samson v. Court of Appeals (G.R. No. 108245, November 25, 1994, 238 SCRA 397), causal fraud is defined as
a deception employed by one party prior to or simultaneous to the contract in order to secure the consent of the
other.
Fraud cannot be presumed but must be proved by clear and convincing evidence. Whoever alleges fraud
affecting a transaction must substantiate his allegation, because a person is always presumed to take ordinary
care of his concerns, and private transactions are similarly presumed to have been fair and regular. To be
remembered is that mere allegation is definitely not evidence; hence, it must be proved by sufficient evidence.
Metropolitan Fabrics, Inc., et al. v. Prosperity Credit Resources, Inc. et al., G.R. No. 154390, March 17,
2014.
Fraud; Article 1390, in relation to Article 1391 of the Civil Code; consent obtained through fraud; action for
annulment; prescriptive period. Article 1390, in relation to Article 1391 of the Civil Code, provides that if the
consent of the contracting parties was obtained through fraud, the contract is considered voidable and may be
annulled within four years from the time of the discovery of the fraud. Metropolitan Fabrics, Inc., et al. v.
Prosperity Credit Resources, Inc. et al., G.R. No. 154390, March 17, 2014.
Unenforceable contract; entering into a contract without or beyond authority; sale of property despite objection
of laymens committee.The Court finds it erroneous for the CA to ignore the fact that the laymens committee
objected to the sale of the lot in question. The Canons require that ALL the church entities listed in Article IV
(a) thereof should give its approval to the transaction. Thus, when the Supreme Bishop executed the contract of
sale of petitioners lot despite the opposition made by the laymens committee, he acted beyond his powers.
This case clearly falls under the category of unenforceable contracts mentioned in Article 1403, paragraph (1) of
the Civil Code, which provides, thus: Art. 1403. The following contracts are unenforceable, unless they are
ratified: (1) Those entered into in the name of another person by one who has been given no authority or legal
representation, or who has acted beyond his powers; In Mercado v. Allied Banking Corporation, the Court
explained that: x x x Unenforceable contracts are those which cannot be enforced by a proper action in court,
unless they are ratified, because either they are entered into without or in excess of authority or they do not
comply with the statute of frauds or both of the contracting parties do not possess the required legal capacity. x
x x. Iglesia Felipina Independiente v. Heirs of Bernardino Taeza,G.R. No. 179597, February 3, 2014.
Unenforceable contract; analogous cases. Closely analogous cases of unenforceable contracts are those where a
person signs a deed of extrajudicial partition in behalf of co-heirs without the latters authority; where a mother
as judicial guardian of her minor children, executes a deed of extrajudicial partition wherein she favors one
child by giving him more than his share of the estate to the prejudice of her other children; and where a person,
holding a special power of attorney, sells a property of his principal that is not included in said special power of
attorney. Iglesia Felipina Independiente v. Heirs of Bernardino Taeza,G.R. No. 179597, February 3, 2014.

Dacion en pago; concept of.Dacion en pago or 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. It is a
mode of extinguishing an existing obligation and partakes the nature of sale as the creditor is really buying the
thing or property of the debtor, the payment for which is to be charged against the debtors debt. Dation in
payment extinguishes the obligation to the extent of the value of the thing delivered, either as agreed upon by
the parties or as may be proved, unless the parties by agreement express or implied, or by their silence
consider the thing as equivalent to the obligation, in which case the obligation is totally extinguished.Philippine
National Bank v. Teresita Tan Dee, et al., G.R. No. 182128, February 19, 2014.
Deed of mortgage; effect when the authorized agent failed to indicate in the mortgage that she was acting for
and on behalf of her principal. Similarly, in this case, the authorized agent failed to indicate in the mortgage that
she was acting for and on behalf of her principal. The Real Estate Mortgage, explicitly shows on its face, that it
was signed by Concepcion in her own name and in her own personal capacity. In fact, there is nothing in the
document to show that she was acting or signing as an agent of petitioner. Thus, consistent with the law on
agency and established jurisprudence, petitioner cannot be bound by the acts of Concepcion. Nicanora G. v.
Rural Bank of El Salvador, Inc. et al., G.R. No. 179625. February 24, 2014.
Bank; negligence of. At this point, we find it significant to mention that respondent bank has no one to blame
but itself. Not only did it act with undue haste when it granted and released the loan in less than three days, it
also acted negligently in preparing the Real Estate Mortgage as it failed to indicate that Concepcion was signing
it for and on behalf of petitioner. We need not belabor that the words as attorney-in-fact of, as agent of, or
for and on behalf of, are vital in order for the principal to be bound by the acts of his agent. Without these
words, any mortgage, although signed by the agent, cannot bind the principal as it is considered to have been
signed by the agent in his personal capacity. Nicanora G. v. Rural Bank of El Salvador, Inc. et al., G.R. No.
179625. February 24, 2014.
Agent; liability when deed of mortgage is signed in personal capacity. Concepcion, on the other hand, is liable
to pay respondent bank her unpaid obligation under the Promissory Note dated June 11, 1982, with interest. As
we have said, Concepcion signed the Promissory Note in her own personal capacity; thus, she cannot escape
liability. She is also liable to reimburse respondent bank for all damages, attorneys fees, and costs the latter is
adjudged to pay petitioner in this case. Nicanora G. v. Rural Bank of El Salvador, Inc. et al., G.R. No.
179625. February 24, 2014.
Actions; action for reformation of instrument; requisites. For an action for reformation of instrument to
prosper, the following requisites must concur: (1) there must have been a meeting of the minds of the parties to
the contract; (2) the instrument does not express the true intention of the parties; and (3) the failure of the
instrument to express the true intention of the parties is due to mistake, fraud, inequitable conduct or accident.
Petitioner having admitted the existence and execution of the instrument, what remains to be resolved is
whether the contract expressed the true intention of the parties; if not, whether it was due to mistake, fraud,
inequitable conduct or accident. The onus probandi is upon the party who insists that the contract should be
reformed. Notarized documents, like the deed in question [i.e., Sale and Transfer of Rights over a Portion of a
Parcel of Land], enjoy the presumption of regularity which can be overturned only by clear, convincing and
more than merely preponderant evidence. This petitioner failed to discharge. Flordeliza Emilio vs.
Bilma Rapal, G.R. No. 181855, March 30, 2010.
7. Sales
Essential Elements of a Contract of Sale; enforceable and unenforceable contracts; who bears the loss; how
ownership is transferred; how may defective contracts be reformed; liability for breach of contracts
Recent cases (Lexoterica)
Sale; warranties of sellers.Indeed, this Court is convinced from an examination of the evidence and by the
concurring opinions of the courts below that Bignay purchased the property without knowledge of the pending
Civil Case No. Q-52702. Union Bank is therefore answerable for its express undertaking under the December
20, 1989 deed of sale to defend its title to the Parcel/s of Land with improvement thereon against the claims of
any person whatsoever. By this warranty, Union Bank represented to Bignay that it had title to the property,

and by assuming the obligation to defend such title, it promised to do so at least in good faith and with
sufficient prudence, if not to the best of its abilities. Bignay EX-IM Philippines, Inc. v. Union Bank of the
Philippines / Union Bank of the Philippines v. Bignay EX-IM Philippines, Inc., G.R. No. 171590 & G.R.
No. 171598, February 12, 2014
Contract to sell; ownership; right to mortgage the property by the owner. Note that at the time PEPI mortgaged
the property to the petitioner, the prevailing contract between respondents PEPI and Dee was still the Contract
to Sell, as Dee was yet to fully pay the purchase price of the property. On this point, PEPI was acting fully well
within its right when it mortgaged the property to the petitioner, for in a contract to sell, ownership is retained
by the seller and is not to pass until full payment of the purchase price. In other words, at the time of the
mortgage, PEPI was still the owner of the property. Thus, in China Banking Corporation v. Spouses Lozada the
Court affirmed the right of the owner/developer to mortgage the property subject of development, to wit: [P.D.]
No. 957 cannot totally prevent the owner or developer from mortgaging the subdivision lot or condominium
unit when the title thereto still resides in the owner or developer awaiting the full payment of the purchase price
by the installment buyer. Philippine National Bank v. Teresita Tan Dee, et al., G.R. No. 182128, February
19, 2014.
Partnership/Agency/Insolvency
Who may form partnerships; what are the rights of partners; how partnership may be dissolved; what are the
rights of creditors in case of insolvency; how assets may be assigned
Appointment of Agents; powers under a general power of attorney and those in special power of attorney; how
agency is revoked
Credit Transactions
What is suretyship; obligations of a surety; liabilities of parties under suretyship; review provisions on
antichresis (have not been asked in recent bar exams)
Recent jurisprudence (Lexoterica)
Surety; solidary debtor. The fundamental reason therefor is that a contract of suretyship effectively binds the
surety as a solidary debtor. This is provided under Article 2047 of the Civil Code which states: By guaranty a
person, called the guarantor, binds himself to the creditor to fulfill the obligation of the principal debtor in case
the latter should fail to do so. Thus, since the surety is a solidary debtor, it is not necessary that the original
debtor first failed to pay before the surety could be made liable; it is enough that a demand for payment is made
by the creditor for the suretys liability to attach. Trade and Investment Development Corporation of the
Philippines (Formerly Philippine Export and Foreign Loan Guarantee Corporation) v. Asia Paces
Corporation, et al., G.R. No. 187403. February 12, 2014.
Surety; distinguished from guarantor. Comparing a suretys obligations with that of a guarantor, the Court, in
the case of Palmares v. CA, illumined that a surety is responsible for the debts payment at once if the principal
debtor makes default, whereas a guarantor pays only if the principal debtor is unable to pay, viz. : A surety is an
insurer of the debt, whereas a guarantor is an insurer of the solvency of the debtor. A suretyship is an
undertaking that the debt shall be paid; a guaranty, an undertaking that the debtor shall pay. Stated differently, a
surety promises to pay the principals debt if the principal will not pay, while a guarantor agrees that the
creditor, after proceeding against the principal, may proceed against the guarantor if the principal is unable to
pay. A surety binds himself to perform if the principal does not, without regard to his ability to do so. A
guarantor, on the other hand, does not contract that the principal will pay, but simply that he is able to do so. In
other words, a surety undertakes directly for the payment and is so responsible at once if the principal debtor
makes default, while a guarantor contracts to pay if, by the use of due diligence, the debt cannot be made out of
the principal debtor. Trade and Investment Development Corporation of the Philippines (Formerly Philippine
Export and Foreign Loan Guarantee Corporation) v. Asia Paces Corporation, et al., G.R. No. 187403.
February 12, 2014.
Surety; extension given to debtor without consent of guarantor; effect of. Despite these distinctions, the Court in
Cochingyan, Jr. v. R&B Surety & Insurance Co., Inc., and later in the case of Security Bank, held that Article
2079 of the Civil Code, which pertinently provides that [a]n extension granted to the debtor by the creditor
without the consent of the guarantor extinguishes the guaranty, equally applies to both contracts of guaranty

and suretyship. becoming insolvent during the extended period. Trade and Investment Development
Corporation of the Philippines (Formerly Philippine Export and Foreign Loan Guarantee Corporation)
v. Asia Paces Corporation, et al., G.R. No. 187403. February 12, 2014.

Constructive trust; concept of. A deeper analysis of Article 1456 reveals that it is not a trust in the technical
sense for in a typical trust, confidence is reposed in one person who is named a trustee for the benefit of another
who is called the cestui que trust, respecting property which is held by the trustee for the benefit of the cestui
que trust. A constructive trust, unlike an express trust, does not emanate from, or generate a fiduciary relation.
While in an express trust, a beneficiary and a trustee are linked by confidential or fiduciary relations, in a
constructive trust, there is neither a promise nor any fiduciary relation to speak of and the so-called trustee
neither accepts any trust nor intends holding the property for the beneficiary. Iglesia Felipina Independiente v.
Heirs of Bernardino Taeza,G.R. No. 179597, February 3, 2014.
Constructive trust; prescriptive period.A constructive trust having been constituted by law between respondents
as trustees and petitioner as beneficiary of the subject property, may respondents acquire ownership over the
said property? The Court held in the same case of Aznar, that unlike in express trusts and resulting implied
trusts where a trustee cannot acquire by prescription any property entrusted to him unless he repudiates the trust,
in constructive implied trusts, the trustee may acquire the property through prescription even if he does not
repudiate the relationship. Iglesia Felipina Independiente v. Heirs of Bernardino Taeza, G.R. No. 179597,
February 3, 2014. The essence of a continuing surety has been highlighted in the case of Totanes v. China
Banking Corporation in this wise: Comprehensive or continuing surety agreements are, in fact, quite
commonplace in present day financial and commercial practice. A bank or financing company which anticipates
entering into a series of credit transactions with a particular company, normally requires the projected principal
debtor to execute acontinuing surety agreement along with its sureties. By executing such an agreement, the
principal places itself in a position to enter into the projected series of transactions with its creditor; with such
suretyship agreement, there would be no need to execute a separate surety contract or bond for each financing
or credit accommodation extended to the principal debtor. Mariano Lim v. Security Bank Corporation,G.R.
No. 188539, March 12, 2014.
Interest; interest should be computed from the time of the judicial or extrajudicial demand; rule when there is no
demand. Indeed, the Court said in Eastern Shipping Lines, Inc. v. Court of Appeals that interest should be
computed from the time of the judicial or extrajudicial demand. However, this case presents a peculiar situation,
the peculiarity being that the Spouses Manalo did not demand interest either judicially or extrajudicially.
Spouses Manalo made no judicial or extrajudicial demand from which to reckon the interest on any amount to
be refunded to them. Such demand could only be reckoned from the promulgation of the CAs decision because
it was there that the right to the refund was first judicially recognized. Nevertheless, pursuant to Eastern
Shipping Lines, Inc. v. Court of Appeals, the amount to be refunded and the interest thereon should earn interest
to be computed from the finality of the judgment until the full refund has been made.Philippine National Bank
v. Sps. Enrique Manalo & Rosalinda Jacinto, et al., G.R. No. 174433, February 24, 2014.
Interest; Monetary Board Circular No. 799 reduced the interest rates from 12% per annum to 6% per
annum. Anent the correct rates of interest to be applied on the amount to be refunded by PNB, the Court, in
Nacar v. Gallery Frames and S.C. Megaworld Construction v. Parada, already applied Monetary Board Circular
No. 799 by reducing the interest rates allowed in judgments from 12% per annum to 6% per annum. Philippine
National Bank v. Sps. Enrique Manalo & Rosalinda Jacinto, et al., G.R. No. 174433, February 24, 2014.
Interest; prospective application of Monetary Board Circular No. 799. According to Nacar v. Gallery Frames,
MB Circular No. 799 is applied prospectively, and judgments that became final and executory prior to its
effectivity on July 1, 2013 are not to be disturbed but continue to be implemented applying the old legal rate of
12% per annum. Hence, the old legal rate of 12% per annum applied to judgments becoming final and
executory prior to July 1, 2013, but the new rate of 6% per annum applies to judgments becoming final and
executory after said date. Philippine National Bank v. Sps. Enrique Manalo & Rosalinda Jacinto, et al.,
G.R. No. 174433, February 24, 2014.

Book V: Torts and Damages

- What is tort; quasi-delict; when liability attaches; definition of proximate cause; chain of events leading to
injury; negligence, how proved;
- How act of omission may lead to tort; special liability for tort of local governments or other persons
- Damages; what may damages may be awarded please note that the court may not award damages if not
included in the prayer (may be asked as part of Legal Ethics question in Civil Law)-; proofs needed to award
damages; when may the Court reduce or increase the award; nature of liquidated damages under contract

Recent Jurisprudence (Lexoterica):

Negligence, the Court said in Layugan v. Intermediate Appellate Court (G.R. No. L-73998, November 14,
1988), is the omission to do something which a reasonable man, guided by those considerations which
ordinarily regulate the conduct of human affairs, would do, or the doing of something which a prudent and
reasonable man would not do, or as Judge Cooley defines it, (t)he failure to observe for the protection of the
interests of another person, that degree of care, precaution, and vigilance which the circumstances justly
demand, whereby such other person suffers injury. In order that a party may be held liable for damages for
any injury brought about by the negligence of another, the claimant must prove that the negligence was the
immediate and proximate cause of the injury. BJDC Construction, represented by its Manager/Proprieto
Janet S. Dela Cruz v. Nena E. Lanuzo, et al., G.R. No. 161151, March 24, 2014.
Negligence; Medical negligence; four elements the plaintiff must prove by competent evidence. An action upon
medical negligence whether criminal, civil or administrative calls for the plaintiff to prove by competent
evidence each of the following four elements, namely: (a) the duty owed by the physician to the patient, as
created by the physician-patient relationship, to act in accordance with the specific norms or standards
established by his profession; (b) the breach of the duty by the physicians failing to act in accordance with the
applicable standard of care; (3) the causation, i.e., there must be a reasonably close and causal connection
between the negligent act or omission and the resulting injury; and (4) the damages suffered by the patient. Dr.
Fernando P. Solidum v. People of the Philippines, G.R. No. 192123, March 10, 2014.
The Court aptly explained in Cruz v. Court of Appeals that: Whether or not a physician has committed an
inexcusable lack of precaution in the treatment of his patient is to be determined according to the standard of
care observed by other members of the profession in good standing under similar circumstances bearing in mind
the advanced state of the profession at the time of treatment or the present state of medical science. In the recent
case of Leonila Garcia-Rueda v. Wilfred L. Pacasio,et. al., this Court stated that in accepting a case, a doctor in
effect represents that, having the needed training and skill possessed by physicians and surgeons practicing in
the same field, he will employ such training, care and skill in the treatment of his patients. He therefore has a
duty to use at least the same level of care that any other reasonably competent doctor would use to treat a
condition under the same circumstances. It is in this aspect of medical malpractice that expert testimony is
essential to establish not only the standard of care of the profession but also that the physicians conduct in the
treatment and care falls below such standard. Further, inasmuch as the causes of the injuries involved in
malpractice actions are determinable only in the light of scientific knowledge, it has been recognized that expert
testimony is usually necessary to support the conclusion as to causation.
Res ipsa loquitor; applicability in medical negligence cases. The applicability of the doctrine of res ipsa
loquitur in medical negligence cases was significantly and exhaustively explained in Ramos v. Court of Appeals,
where the Court saidMedical malpractice cases do not escape the application of this doctrine. Thus, res ipsa
loquitur has been applied when the circumstances attendant upon the harm are themselves of such a character as
to justify an inference of negligence as the cause of that harm. The application of resipsa loquitur in medical
negligence cases presents a question of law since it is a judicial function to determine whether a certain set of
circumstances does, as a matter of law, permit a given inference. Resort to res ipsa loquitur is allowed because
there is no other way, under usual and ordinary conditions, by which the patient can obtain redress for injury
suffered by him. Dr. Fernando P. Solidum v. People of the Philippines, G.R. No. 192123, March 10, 2014.

Res ipsa loquitor in cases involving accidents. For the doctrine to apply, the following requirements must be
shown to exist, namely: (a) the accident is of a kind that ordinarily does not occur in the absence of
someones negligence; (b) it is caused by an instrumentality within the exclusive control of the defendant or
defendants; and (c) the possibility of contributing conduct that would make the plaintiff responsible is
eliminated. BJDC Construction, represented by its Manager/Proprieto Janet S. Dela Cruz v. Nena E. Lanuzo, et
al., G.R. No. 161151, March 24, 2014.
Damages; actual or compensatory damages. Article 2199 of the Civil Code states that [e]xcept as provided by
law or by stipulation, one is entitled to an adequate compensation only for such pecuniary loss suffered by him a
he has duly proved. Such compensation is referred to as actual or compensatory damages. Actual damages are
compensation for an injury that will put the injured party in the position where it was before the injury. They
pertain to such injuries or losses that are actually sustained and susceptible of measurement. Except as provided
by law or by stipulation, a party is entitled to adequate compensation only for such pecuniary loss as is duly
proven. Basic is the rule that to recover actual damages, not only must the amount of loss be capable of proof; it
must also be actually proven with a reasonable degree of certainty, premised upon competent proof or the best
evidence obtainable. International Container Terminal Services, Inc. v. Celeste M. Chua, G.R. No.
195031, March 26, 2014.
Damages; Attorneys fees; when allowed. Article 2208 of the Civil Code does not prohibit recovery of
attorneys fees if there is a stipulation in the contract for payment of the same. Thus, in Asian Construction and
Development Corporation v. Cathay Pacific SteelCorporation (CAPASCO), the Court, citing Titan Construction
Corporation v. Uni-Field Enterprises, Inc., noted that the law allows a party to recover attorneys fees under a
written agreement. In Barons Marketing Corporation v. Court of Appeals, the Court ruled that attorneys fees
are in the nature of liquidated damages and the stipulation therefor is aptly called a penal clause. It has been said
that so long as such stipulation does not contravene law, morals, or public order, it is strictly binding upon
defendant. The attorneys fees so provided are awarded in favor of the litigant, not his counsel. On the other
hand, the law also allows parties to a contract to stipulate on liquidated damages to be paid in case of breach. A
stipulation on liquidated damages is a penalty clause where the obligor assumes greater liability in case of
breach of an obligation. The obligor is bound today the stipulated amount without need for proof on the
existence and on the measure of damages caused by the breach. However, even if such attorneys fees are
allowed by law, the courts still have the power to reduce the same if it is unreasonable. Mariano Lim v.
Security Bank Corporation,G.R. No. 188539, March 12, 2014.
Damages; Attorneys fees; when proper. An award of attorneys fees has always been the exception rather than
the rule and there must be some compelling legal reason to bring the case within the exception and justify the
award. The policy of the Court is that no premium should be placed on the right to litigate. Even when a
claimant is compelled to litigate with third persons or to incur expenses to protect his rights, still, attorneys fees
may not be awarded where no sufficient showing of bad faith could be reflected in a partys persistence in a
case other than an erroneous conviction of the righteousness of his cause. International Container Terminal
Services, Inc. v. Celeste M. Chua, G.R. No. 195031, March 26, 2014.
Damages; moral damages. Certainly, an award of moral damages must be anchored on a clear showing that
the party claiming the same actually experienced mental anguish, besmirched reputation, sleepless
nights, wounded feelings, or similar injury. In the case herein under consideration, the records are bereft of
any proof that respondent in fact suffered moral damages as contemplated in the afore-quoted provision of the
Civil Code. Since an award of moral damages is predicated on a categorical showing by the claimant that she
actually experienced emotional and mental sufferings, it must be disallowed absent any evidence thereon.
International Container Terminal Services, Inc. v. Celeste M. Chua, G.R. No. 195031, March 26, 2014.
Damages; Nominal damages; when awarded; Network Bank did not violate any of Barics rights. Nominal
damages are recoverable under article 2221 of the Civil Code where a legal right is technically violated and
must be vindicated against an invasion that has produced no actual present loss of any kind or where there has
been a breach of contract and no substantial injury or actual damages whatsoever have been or can be shown.
One Network Rural Bank, Inc. v. Danilo G. Baric,G.R. No. 193684, March 5, 2014.

Damages; Temperate damages. In the absence of competent proof on the amount of actual damages suffered, a
party is entitled to receive temperate damages. Article 2224 of the New Civil Code provides that: Temperate or
moderate damages, which are more than nominal but less than compensatory damages, may be recovered
when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the
case, be proved with certainty. The amount thereof is usually left to the sound discretion of the courts but the
same should be reasonable, bearing in mind that temperate damages should be more than nominal but less than
compensatory. International Container Terminal Services, Inc. v. Celeste M. Chua, G.R. No. 195031,
March 26, 2014
.

Tips from UST

Article 1159. Obligations arising from contracts have the force of law between the contracting parties and
should be complied with in good faith. (1091a)
Article 1164. The creditor has a right to the fruits of the thing from the time the obligation to deliver it arises.
However, he shall acquire no real right over it until the same has been delivered to him. (1095)
Article 1165. When what is to be delivered is a determinate thing, the creditor, in addition to the right granted
him by article 1170, may compel the debtor to make the delivery.
If the thing is indeterminate or generic, he may ask that the obligation be complied with at the expense of the
debtor.
If the obligor delays, or has promised to deliver the same thing to two or more persons who do not have the
same interest, he shall be responsible for any fortuitous event until he has effected the delivery. (1096)
Article 1166. The obligation to give a determinate thing includes that of delivering all its accessions and
accessories, even though they may not have been mentioned. (1097a)
Article 1167. If a person obliged to do something fails to do it, the same shall be executed at his cost.
This same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore, it
may be decreed that what has been poorly done be undone. (1098)
Article 1168. When the obligation consists in not doing, and the obligor does what has been forbidden him, it
shall also be undone at his expense. (1099a)
Article 1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or
extrajudicially demands from them the fulfillment of their obligation.
However, the demand by the creditor shall not be necessary in order that delay may exist:
(1) When the obligation or the law expressly so declare; or
(2) When from the nature and the circumstances of the obligation it appears that the designation of the
time when the thing is to be delivered or the service is to be rendered was a controlling motive for the
establishment of the contract; or
(3) When demand would be useless, as when the obligor has rendered it beyond his power to perform.

In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to
comply in a proper manner with what is incumbent upon him. From the moment one of the parties
fulfills his obligation, delay by the other begins. (1100a)
Article 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and
those who in any manner contravene the tenor thereof, are liable for damages. (1101)
Article 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for
future fraud is void. (1102a)
Article 1172. Responsibility arising from negligence in the performance of every kind of obligation is also
demandable, but such liability may be regulated by the courts, according to the circumstances. (1103)
Article 1173. 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. When negligence shows bad faith, the provisions of articles 1171 and 2201, paragraph 2, shall apply.
If the law or contract does not state the diligence which is to be observed in the performance, that which is
expected of a good father of a family shall be required. (1104a)
Article 1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or
when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events
which could not be foreseen, or which, though foreseen, were inevitable. (1105a)
Article 1175. Usurious transactions shall be governed by special laws. (n)
Article 1176. The receipt of the principal by the creditor without reservation with respect to the interest, shall
give rise to the presumption that said interest has been paid.
The receipt of a later installment of a debt without reservation as to prior installments, shall likewise raise the
presumption that such installments have been paid. (1110a)
Article 1177. The creditors, after having pursued the property in possession of the debtor to satisfy their claims,
may exercise all the rights and bring all the actions of the latter for the same purpose, save those which are
inherent in his person; they may also impugn the acts which the debtor may have done to defraud them. (1111)
Article 1178. Subject to the laws, all rights acquired in virtue of an obligation are transmissible, if there has
been no stipulation to the contrary. (1112)
CHAPTER 3
Different Kinds of Obligations
SECTION 1
Pure and Conditional Obligations
Article 1179. Every obligation whose performance does not depend upon a future or uncertain event, or upon a
past event unknown to the parties, is demandable at once.
Every obligation which contains a resolutory condition shall also be demandable, without prejudice to the
effects of the happening of the event. (1113)
Article 1180. When the debtor binds himself to pay when his means permit him to do so, the obligation shall be
deemed to be one with a period, subject to the provisions of article 1197. (n)

Article 1181. In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those
already acquired, shall depend upon the happening of the event which constitutes the condition. (1114)
Article 1182. When the fulfillment of the condition depends upon the sole will of the debtor, the conditional
obligation shall be void.
If it depends upon chance or upon the will of a third person, the obligation shall take effect in conformity with
the provisions of this Code. (1115)
Article 1183. Impossible conditions, those contrary to good customs or public policy and those prohibited by
law shall annul the obligation which depends upon them. If the obligation is divisible, that part thereof which is
not affected by the impossible or unlawful condition shall be valid.
The condition not to do an impossible thing shall be considered as not having been agreed upon. (1116a)
Article 1184. The condition that some event happen at a determinate time shall extinguish the obligation as soon
as the time expires or if it has become indubitable that the event will not take place. (1117)
Article 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should
not comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should
become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in
accordance with articles 1385 and 1388 and the Mortgage Law. (1124)
Article 1219. The remission made by the creditor of the share which affects one of the solidary debtors does not
release the latter from his responsibility towards the co-debtors, in case the debt had been totally paid by anyone
of them before the remission was effected. (1146a)
Article 1245. Dation in payment, whereby property is alienated to the creditor in satisfaction of a debt in money,
shall be governed by the law of sales. (n)
Article 1278. Compensation shall take place when two persons, in their own right, are creditors and debtors of
each other. (1195)
Article 1279. In order that compensation may be proper, it is necessary:
(1) That each one of the obligors be bound principally, and that he be at the same time a principal
creditor of the other;
(2) That both debts consist in a sum of money, or if the things due are consumable, they be of the same
kind, and also of the same quality if the latter has been stated;
(3) That the two debts be due;
(4) That they be liquidated and demandable;
(5) That over neither of them there be any retention or controversy, commenced by third persons and
communicated in due time to the debtor. (1196)
Article 1280. Notwithstanding the provisions of the preceding article, the guarantor may set up compensation as
regards what the creditor may owe the principal debtor. (1197)
Chapter 5
Form of Contracts

Article 1356. Contracts shall be obligatory, in whatever form they may have been entered into, provided all the
essential requisites for their validity are present. However, when the law requires that a contract be in some
form in order that it may be valid or enforceable, or that a contract be proved in a certain way, that requirement
is absolute and indispensable. In such cases, the right of the parties stated in the following article cannot be
exercised. (1278a)
Article 1357. If the law requires a document or other special form, as in the acts and contracts enumerated in the
following article, the contracting parties may compel each other to observe that form, once the contract has been
perfected. This right may be exercised simultaneously with the action upon the contract. (1279a)
Article 1358. The following must appear in a public document:
(1) Acts and contracts which have for their object the creation, transmission, modification or
extinguishment of real rights over immovable property; sales of real property or of an interest therein are
governed by articles 1403, No. 2, and 1405;
(2) The cession, repudiation or renunciation of hereditary rights or of those of the conjugal partnership
of gains;
(3) The power to administer property, or any other power which has for its object an act appearing or
which should appear in a public document, or should prejudice a third person;
(4) The cession of actions or rights proceeding from an act appearing in a public document.
All other contracts where the amount involved exceeds five hundred pesos must appear in writing, even a
private one. But sales of goods, chattels or things in action are governed by articles, 1403, No. 2 and 1405.
(1280a)
Article 1381. The following contracts are rescissible:
(1) Those which are entered into by guardians whenever the wards whom they represent suffer lesion by
more than one-fourth of the value of the things which are the object thereof;
(2) Those agreed upon in representation of absentees, if the latter suffer the lesion stated in the preceding
number;
(3) Those undertaken in fraud of creditors when the latter cannot in any other manner collect the claims
due them;
(4) Those which refer to things under litigation if they have been entered into by the defendant without
the knowledge and approval of the litigants or of competent judicial authority;
(5) All other contracts specially declared by law to be subject to rescission. (1291a)
CHAPTER 7
Voidable Contracts
Article 1390. The following contracts are voidable or annullable, even though there may have been no damage
to the contracting parties:
(1) Those where one of the parties is incapable of giving consent to a contract;
(2) Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud.
These contracts are binding, unless they are annulled by a proper action in court. They are susceptible of
ratification. (n)
Article 1391. The action for annulment shall be brought within four years.
This period shall begin:
In cases of intimidation, violence or undue influence, from the time the defect of the consent ceases.

In case of mistake or fraud, from the time of the discovery of the same.
And when the action refers to contracts entered into by minors or other incapacitated persons, from the time the
guardianship ceases. (1301a)
Article 1392. Ratification extinguishes the action to annul a voidable contract. (1309a)
Article 1393. Ratification may be effected expressly or tacitly. It is understood that there is a tacit ratification if,
with knowledge of the reason which renders the contract voidable and such reason having ceased, the person
who has a right to invoke it should execute an act which necessarily implies an intention to waive his right.
(1311a)
Article 1394. Ratification may be effected by the guardian of the incapacitated person. (n)
Article 1395. Ratification does not require the conformity of the contracting party who has no right to bring the
action for annulment. (1312)
Article 1396. Ratification cleanses the contract from all its defects from the moment it was constituted. (1313)
Article 1397. The action for the annulment of contracts may be instituted by all who are thereby obliged
principally or subsidiarily.
However, persons who are capable cannot allege the incapacity of those with whom they contracted; nor can
those who exerted intimidation, violence, or undue influence, or employed fraud, or caused mistake base their
action upon these flaws of the contract. (1302a)
Article 1398. An obligation having been annulled, the contracting parties shall restore to each other the things
which have been the subject matter of the contract, with their fruits, and the price with its interest, except in
cases provided by law.
In obligations to render service, the value thereof shall be the basis for damages. (1303a)
Article 1399. When the defect of the contract consists in the incapacity of one of the parties, the incapacitated
person is not obliged to make any restitution except insofar as he has been benefited by the thing or price
received by him. (1304)
Article 1400. Whenever the person obliged by the decree of annulment to return the thing can not do so because
it has been lost through his fault, he shall return the fruits received and the value of the thing at the time of the
loss, with interest from the same date. (1307a)
Article 1401. The action for annulment of contracts shall be extinguished when the thing which is the object
thereof is lost through the fraud or fault of the person who has a right to institute the proceedings.
If the right of action is based upon the incapacity of any one of the contracting parties, the loss of the thing shall
not be an obstacle to the success of the action, unless said loss took place through the fraud or fault of the
plaintiff. (1314a)
Article 1402. As long as one of the contracting parties does not restore what in virtue of the decree of annulment
he is bound to return, the other cannot be compelled to comply with what is incumbent upon him. (1308)
Fortuitous Events
Article 184. The loss or deterioration of the movables belonging to either spouse, although through fortuitous
event, shall be paid from the conjugal partnership of gains, should there be any.

Those suffered by real property shall not be reimbursable in any case, except those on paraphernal property
administered by the husband, when the losses were due to his fault. He shall pay for the same. (1425a
Article 552. A possessor in good faith shall not be liable for the deterioration or loss of the thing possessed,
except in cases in which it is proved that he has acted with fraudulent intent or negligence, after the judicial
summons.
A possessor in bad faith shall be liable for deterioration or loss in every case, even if caused by a fortuitous
event. (457a)
Article 1154. The period during which the obligee was prevented by a fortuitous event from enforcing his right
is not reckoned against him. (n)
Article 1165. When what is to be delivered is a determinate thing, the creditor, in addition to the right granted
him by article 1170, may compel the debtor to make the delivery.
If the thing is indeterminate or generic, he may ask that the obligation be complied with at the expense of the
debtor.
If the obligor delays, or has promised to deliver the same thing to two or more persons who do not have the
same interest, he shall be responsible for any fortuitous event until he has effected the delivery. (1096)
Article 1198. The debtor shall lose every right to make use of the period:
(1) When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty or security
for the debt;
(2) When he does not furnish to the creditor the guaranties or securities which he has promised;
(3) When by his own acts he has impaired said guaranties or securities after their establishment, and when
through a fortuitous event they disappear, unless he immediately gives new ones equally satisfactory;
(4) When the debtor violates any undertaking, in consideration of which the creditor agreed to the period;
(5) When the debtor attempts to abscond. (1129a)
Article 1205. When the choice has been expressly given to the creditor, the obligation shall cease to be
alternative from the day when the selection has been communicated to the debtor.
Until then the responsibility of the debtor shall be governed by the following rules:
(1) If one of the things is lost through a fortuitous event, he shall perform the obligation by delivering that
which the creditor should choose from among the remainder, or that which remains if only one subsists;
(2) If the loss of one of the things occurs through the fault of the debtor, the creditor may claim any of those
subsisting, or the price of that which, through the fault of the former, has disappeared, with a right to damages;
(3) If all the things are lost through the fault of the debtor, the choice by the creditor shall fall upon the price of
any one of them, also with indemnity for damages.
The same rules shall be applied to obligations to do or not to do in case one, some or all of the prestations
should become impossible. (1136a)
Article 1221. If the thing has been lost or if the prestation has become impossible without the fault of the
solidary debtors, the obligation shall be extinguished.
If there was fault on the part of any one of them, all shall be responsible to the creditor, for the price and the
payment of damages and interest, without prejudice to their action against the guilty or negligent debtor.

If through a fortuitous event, the thing is lost or the performance has become impossible after one of the
solidary debtors has incurred in delay through the judicial or extrajudicial demand upon him by the creditor, the
provisions of the preceding paragraph shall apply. (1147a)
SECTION 2
Loss of the Thing Due
Article 1262. An obligation which consists in the delivery of a determinate thing shall be extinguished if it
should be lost or destroyed without the fault of the debtor, and before he has incurred in delay.
When by law or stipulation, the obligor is liable even for fortuitous events, the loss of the thing does not
extinguish the obligation, and he shall be responsible for damages. The same rule applies when the nature
of the obligation requires the assumption of risk. (1182a)
Article 1263. In an obligation to deliver a generic thing, the loss or destruction of anything of the same
kind does not extinguish the obligation. (n)
Article 1264. The courts shall determine whether, under the circumstances, the partial loss of the object
of the obligation is so important as to extinguish the obligation. (n)
Article 1265. Whenever the thing is lost in the possession of the debtor, it shall be presumed that the loss
was due to his fault, unless there is proof to the contrary, and without prejudice to the provisions of
article 1165. This presumption does not apply in case of earthquake, flood, storm, or other natural
calamity. (1183a)
Article 1266. The debtor in obligations to do shall also be released when the prestation becomes legally or
physically impossible without the fault of the obligor. (1184a)
Article 1267. When the service has become so difficult as to be manifestly beyond the contemplation of
the parties, the obligor may also be released therefrom, in whole or in part. (n)
Article 1268. When the debt of a thing certain and determinate proceeds from a criminal offense, the
debtor shall not be exempted from the payment of its price, whatever may be the cause for the loss, unless
the thing having been offered by him to the person who should receive it, the latter refused without
justification to accept it. (1185)
Article 1269. The obligation having been extinguished by the loss of the thing, the creditor shall have all
the rights of action which the debtor may have against third persons by reason of the loss. (1186)

Article 1569. If the thing sold had any hidden fault at the time of the sale, and should thereafter be lost by a
fortuitous event or through the fault of the vendee, the latter may demand of the vendor the price which he paid,
less the value which the thing had when it was lost.
If the vendor acted in bad faith, he shall pay damages to the vendee. (1488a)
Article 1655. If the thing leased is totally destroyed by a fortuitous event, the lease is extinguished. If the
destruction is partial, the lessee may choose between a proportional reduction of the rent and a rescission of the
lease. (n)
Article 1680. The lessee shall have no right to a reduction of the rent on account of the sterility of the land
leased, or by reason of the loss of fruits due to ordinary fortuitous events; but he shall have such right in case of
the loss of more than one-half of the fruits through extraordinary and unforeseen fortuitous events, save always
when there is a specific stipulation to the contrary.

Extraordinary fortuitous events are understood to be: fire, war, pestilence, unusual flood, locusts, earthquake, or
others which are uncommon, and which the contracting parties could not have reasonably foreseen. (1575)
Article 1681. Neither does the lessee have any right to a reduction of the rent if the fruits are lost after they have
been separated from their stalk, root or trunk. (1576)
Article 1718. The contractor who has undertaken to put only his work or skill, cannot claim any compensation if
the work should be destroyed before its delivery, unless there has been delay in receiving it, or if the destruction
was caused by the poor quality of the material, provided this fact was communicated in due time to the owner. If
the material is lost through a fortuitous event, the contract is extinguished. (1590a)
Obligations of the Bailee
Article 1941. The bailee is obliged to pay for the ordinary expenses for the use and preservation of the thing
loaned. (1743a)
Article 1942. The bailee is liable for the loss of the thing, even if it should be through a fortuitous event:
(1) If he devotes the thing to any purpose different from that for which it has been loaned;
(2) If he keeps it longer than the period stipulated, or after the accomplishment of the use for which the
commodatum has been constituted;
(3) If the thing loaned has been delivered with appraisal of its value, unless there is a stipulation
exempting the bailee from responsibility in case of a fortuitous event;
(4) If he lends or leases the thing to a third person, who is not a member of his household;
(5) If, being able to save either the thing borrowed or his own thing, he chose to save the latter. (1744a
and 1745)
Article 1943. The bailee does not answer for the deterioration of the thing loaned due only to the use thereof and
without his fault. (1746)
Article 1944. The bailee cannot retain the thing loaned on the ground that the bailor owes him something, even
though it may be by reason of expenses. However, the bailee has a right of retention for damages mentioned in
article 1951. (1747a)
Article 1945. When there are two or more bailees to whom a thing is loaned in the same contract, they are liable
solidarily. (1748a)
Article 1979. The depositary is liable for the loss of the thing through a fortuitous event:
(1) If it is so stipulated;
(2) If he uses the thing without the depositor's permission;
(3) If he delays its return;
(4) If he allows others to use it, even though he himself may have been authorized to use the same. (n)
Article 2070. If the guarantor has paid without notifying the debtor, and the latter not being aware of the
payment, repeats the payment, the former has no remedy whatever against the debtor, but only against the
creditor. Nevertheless, in case of a gratuitous guaranty, if the guarantor was prevented by a fortuitous event
from advising the debtor of the payment, and the creditor becomes insolvent, the debtor shall reimburse the
guarantor for the amount paid. (1842a)
Article 2147. The officious manager shall be liable for any fortuitous event:
(1) If he undertakes risky operations which the owner was not accustomed to embark upon;
(2) If he has preferred his own interest to that of the owner;
(3) If he fails to return the property or business after demand by the owner;
(4) If he assumed the management in bad faith. (1891a)

Article 2148. Except when the management was assumed to save property or business from imminent danger,
the officious manager shall be liable for fortuitous events:
(1) If he is manifestly unfit to carry on the management;
(2) If by his intervention he prevented a more competent person from taking up the management. (n)
Article 2170. When by accident or other fortuitous event, movables separately pertaining to two or more
persons are commingled or confused, the rules on co-ownership shall be applicable.
SUBSECTION 3. Tender of Payment and Consignation
Article 1256. 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 the consignation of the thing or sum due.
Consignation alone shall produce the same effect in the following cases:
(1) When the creditor is absent or unknown, or does not appear at the place of payment;
(2) When he is incapacitated to receive the payment at the time it is due;
(3) When, without just cause, he refuses to give a receipt;
(4) When two or more persons claim the same right to collect;
(5) When the title of the obligation has been lost. (1176a)
Article 1257. In order that the consignation of the thing due may release the obligor, it must first be announced
to the persons interested in the fulfillment of the obligation.
The consignation shall be ineffectual if it is not made strictly in consonance with the provisions which regulate
payment. (1177)
Article 1258. Consignation shall be made by depositing the things due at the disposal of judicial authority,
before whom the tender of payment shall be proved, in a proper case, and the announcement of the consignation
in other cases.
The consignation having been made, the interested parties shall also be notified thereof. (1178)
Article 1259. The expenses of consignation, when properly made, shall be charged against the creditor. (1179)
Article 1260. Once the consignation has been duly made, the debtor may ask the judge to order the cancellation
of the obligation.
Before the creditor has accepted the consignation, or before a judicial declaration that the consignation has been
properly made, the debtor may withdraw the thing or the sum deposited, allowing the obligation to remain in
force. (1180)
Article 1261. If, the consignation having been made, the creditor should authorize the debtor to withdraw the
same, he shall lose every preference which he may have over the thing. The co-debtors, guarantors and sureties
shall be released. (1181a)
TITLE III
NATURAL OBLIGATIONS
Article 1423. Obligations are civil or natural. Civil obligations give a right of action to compel their
performance. Natural obligations, not being based on positive law but on equity and natural law, do not grant a
right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the
retention of what has been delivered or rendered by reason thereof. Some natural obligations are set forth in the
following articles.

Article 1424. When a right to sue upon a civil obligation has lapsed by extinctive prescription, the obligor who
voluntarily performs the contract cannot recover what he has delivered or the value of the service he has
rendered.
Article 1425. When without the knowledge or against the will of the debtor, a third person pays a debt which the
obligor is not legally bound to pay because the action thereon has prescribed, but the debtor later voluntarily
reimburses the third person, the obligor cannot recover what he has paid.
Article 1426. When a minor between eighteen and twenty-one years of age who has entered into a contract
without the consent of the parent or guardian, after the annulment of the contract voluntarily returns the whole
thing or price received, notwithstanding the fact that he has not been benefited thereby, there is no right to
demand the thing or price thus returned.