CIVIL LAW

EXECUTIVE COMMITTEE
Alyanna A. Shi
Over-all Academics Chairperson

Kimberley Jhoanna V. Li
Chairperson for Bar Matters and Logistics

Aileen L. Fabian
Chairperson for Finance

Moira Lou J. Clemente

Elijah Christiane M. Fajardo
Chairpersons for Electronic Data Processing

ACADEMIC COMMITTEE

Ashley Lorraine R. Ganitano Subject Chair for Political Jayson Jonh P. Buenviaje Subject Chair for Legal
Law Ethics

Sebastian Luigi T. Mendoza Subject Chair for Labor Marian Austriaco Obog Subject Chair for Commercial
Law Law

Jeianna Janella A. Virrey Subject Chair for Civil Law Sheena Alaine B. Ariola Subject Chair for Taxation
Law
Aaron Justin R. Palpal-latoc Subject Chair for Remedial
Law Louise Alexandra Dia Subject Chair for Criminal Law

SAN BEDA UNIVERSITY COLLEGE OF LAW

ADMINISTRATORS

Atty. Marciano G. Delson

Dean

Atty. Francesca Lourdes M. Señga

Vice Dean

Atty. Adonis V. Gabriel

Prefect of Student Affairs

Atty. Peter Joey B. Usita

Legal Aid Bureau Director

Atty. Lyan David M. Juanico

Administrative Office

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E Commerce Act.

ALL RIGHTS RESERVED

That In All Things God May Be Glorified
I. EFFECT AND APPLICATION OF LAWS

RETROACTIVITY OF LAWS; VESTED RIGHTS PRINCIPLE

(1) What is the rule with respect to the application of laws?

As a rule, laws shall have no retroactive effect (CIVIL CODE, Art. 4). They must be applied
prospectively. One of the exceptions to the rule is when the law itself provides that it shall be
applied retroactively. However, even where the law provides for retroactivity, the law cannot be
applied retroactively when it would work to impair vested rights (Heirs of Zari v. Santos, G.R.
Nos. L-21213-14, March 28, 1968).

A vested right is one whose existence, effectivity and extent does not depend upon events
foreign
to the will
of the
holder.
The term

expresses the concept of present fixed interest which in right reason and natural justice should
be protected against arbitrary State action, or an innately just and imperative right which
enlightened free society, sensitive to inherent and irrefragable individual rights, cannot deny.
These include not only legal or equitable title to the enforcement of a demand, but also an
exemption from new obligations created after the right has vested (Republic v. CA, G.R. No.
92326, January 24, 1992).

A right is vested when the right to enjoyment, present or prospective, has become the property
of some particular person or persons as a present interest (Diglas v. Bugnay, Sr., G.R. No.
209691, January 16, 2023).

REPEAL OF LAWS

(2) What is the effect when a law is declared unconstitutional?

When the courts declare a law to be inconsistent with the Constitution, the former shall be void
and the latter shall govern (CIVIL CODE, Art. 7). As a rule, an unconstitutional act is not a law; it
confers no rights; it imposes no duties; it affords no protection; it creates no office; it is
inoperative as if it has not been passed at all (Film Development Council of the Philippines v.
Colon Heritage Realty Corp., G.R. No. 203754, October 15, 2019).

(3) The Disbursement Acceleration Program (DAP) was introduced by the Department of
Budget and Management. The funds under the DAP were usually taken from the savings
pooled by the Executive from unreleased appropriations, unprogrammed funds, carry
over appropriations, and budgets for slow-moving items or projects that had been
realigned to support faster-disbursing projects and to augment items pertaining to other
departments. The Supreme Court later struck down the transfers of funds under the DAP
as unconstitutional for violation of the provisions on valid transfer of appropriated funds
under Section 25(5), Article VI of the 1987 Constitution. What is the effect of the
declaration of unconstitutionality to the disbursements already made?
While the transfers are recognized as unconstitutional, pursuant to the doctrine of operative fact,
its effects prior to its declaration of nullity, may be left undisturbed as a matter of equity and fair
play. Rights vested prior to unconstitutionality shall be considered valid (League of Cities of the
Philippines v. COMELEC, G.R. No. 176951, April 24, 2010). The doctrine of operative fact
recognizes the existence of the law or executive act prior to the determination of its
unconstitutionality as an operative fact that produced consequences that cannot always be
erased, ignored or disregarded. In short, it nullifies the void law or executive act but sustains its
effects. It provides an exception to the general rule that a void or unconstitutional law produces
no effect. But its use must be subjected to great scrutiny and circumspection, and it cannot be
invoked to validate an unconstitutional law or executive act, but is resorted to only as a matter of
equity and fair play. It applies only to cases where extraordinary circumstances exist, and only
when the extraordinary circumstances have met the stringent conditions that will permit its
application (Araullo v. Aquino III, G.R. No. 209207, July 1, 2014).

Here, the doctrine of operative fact is applicable to the adoption and implementation of the DAP.
Its application to the DAP proceeds from equity and fair play. The consequences resulting from
the DAP and its related issuances could not be ignored or could no longer be undone. The
implementation of the DAP resulted into the use of savings pooled by the Executive to finance

Page 4
 the PAPs that were not covered in the GAA, or that did not have proper appropriation covers, as
well as to augment items pertaining to other departments of the Government in clear violation of
the Constitution. To declare the implementation of the DAP unconstitutional without recognizing
that its prior implementation constituted an operative fact that produced consequences in the
real as well as juristic worlds of the Government and the Nation is to be impractical and unfair.
Unless the doctrine is held to apply, the Executive as the disburser and the offices under it and
elsewhere as the recipients could be required to undo everything that they had implemented in
good faith under the DAP. That scenario would be enormously burdensome for the
Government. Equity alleviates such burden (Araullo v. Aquino III, G.R. No. 209207, July 1,
2014).

LEGAL PERIODS

(4) Did Article 31 of the Administrative Code of 1987 impliedly repeal Article 13 of the Civil
Code?
No.
Article 13
of the
Civil Code
and
Section
31 of the

Administrative Code of 1987 are not entirely repugnant or irreconcilable, such that one cannot
be enforced without nullifying the other. Section 31 of the Administrative Code, being a specific
provision pertaining to administrative cases, is an exception to Article 13 of the Civil Code,
which has been intended for general application in the interpretation of the laws (Abello v.
Banco Filipino Savings and Mortgage Bank, G.R. No. 232706, July 18, 2022).

Note: If the controversy involves the application of the Administrative Code, a year is composed
of 12 calendar months. If the controversy involves the application of the Civil Code or other laws,
a year consists of 365 days.

(5) In computation of periods as to calendar years, which rule between Article 13 of the Civil
Code and Article 31 of the Administrative Code prevails?
The Administrative Code, being the later law, prevails. Lex posteriori derogat priori. Under the
Administrative Code of 1987, a year is composed of 12 calendar months. The number of days is
irrelevant (Commissioner of Internal Revenue v. Primetown Property Group, Inc., G.R. No.
162155, August 28, 2007).

CONFLICT OF LAWS

(6) May a court immediately or dismiss a case outright upon the mere invocation of the
doctrine of forum non conveniens?
No. While the matter of jurisdiction rests on the sound discretion of the court, neither the mere
invocation of forum non conveniens nor the averment of existence of foreign elements operates
to automatically divest a court of jurisdiction. Therefore, a court should renounce jurisdiction only
after vital facts are established to determine whether special circumstances require the court’s
desistance (Saudi Arabian Airlines v. Rebesencio et. al, G.R. No. 198587, January 14, 2015).
(7) Petitioner CMI is a foreign corporation licensed to do business in the Philippines.
Respondent Joe Basso is a US citizen who was offered the position of General Manager
of the Philippine Branch of Continental Airlines. Basso filed a complaint for illegal
dismissal with moral and exemplary damages before the NLRC. CMI filed a Motion to
Dismiss, alleging presence of foreign elements, and lack of jurisdiction of the person of
CMI and subject matter of the controversy. May a foreigner employee resort to Philippine
Labor Tribunals?
Yes, Basso may conveniently resort to labor tribunals in the Philippines as he and CMI had
physical presence in the Philippines. Labor tribunals can make an intelligent decision as to the
law and the facts because the incident subject of this case, that is, Basso’s alleged dismissal,
happened in the Philippines and the surrounding circumstances of which can be ascertained
without having to leave the Philippines. As to the law, Philippine law is the proper law of the
forum. An essential element of conflict rules is the indication of a "test" or "connecting factor" or
"point of contact". Choice-of-law rules invariably consist of a factual relationship – such as
property right, contract claim – and a connecting fact or point of contact, such as the situs of the
res, the place of celebration, the place of performance, or the place of wrongdoing. The contract
of employment was negotiated and was perfected in the Philippines when Basso accepted the
terms and conditions thereof as offered. The place of performance relative to Basso’s
contractual duties was

Page 5
in the Philippines (Continental Micronesia, Inc. v. Basso, G.R. No. 178382, September 23,
2015). Therefore, Philippine Labor Tribunals have jurisdiction.

(8) What is the doctrine of processual presumption?

Under the doctrine of presumed-identity approach or processual presumption, where a foreign
law is not pleaded or, even if pleaded, is not proved, the presumption is that foreign law is the
same as ours.

The Philippines does not take judicial notice of foreign laws, hence, they must not only be
alleged; they must be proven. To prove a foreign law, the party invoking it must present a copy
thereof and comply with Sections 24 and 25 of Rule 132 of the Revised Rules of Court (Kucskar
v. Sekito, Jr., G.R. No. 237449, December 2, 2020; M. Lopez case).

(9) Aida, a naturalized American citizen, executed a will in California, where she died. A
petition for the probate of the will was filed with the Philippine courts. The foreign law
governing the formalities of the will was not alleged and proven. Should compliance with
the formalities of the will be determined according to the foreign law?
No. While it is true that a foreign will can be given legal effects in our jurisdiction, foreign laws do
not prove themselves in this jurisdiction, and our courts are not authorized to take judicial notice
of them. Like any other fact, they must be properly pleaded and proved. In this case, Aida is a
naturalized American citizen who executed the will in California, United States of America where
she was residing at the time of her death. As such, the Philippine courts may examine the
formalities of Aida's will in accordance with California law. However, for failure to properly plead
and prove, Philippine laws shall govern in determining whether the will should have been
considered for probate. (Kucskar v. Sekito, Jr., G.R. No. 237449, December 2, 2020; M. Lopez
case).

(10) What are the different principles that may govern in a Conflict of Laws issue?
Principle Definition

Nationality The Nationality Principle states that laws relating to family rights and
principle or duties, or the status, condition, and legal capacity of persons are binding
lex nationalii upon citizens of the Philippines, even though living abroad (CIVIL
CODE, Art. 15).

Lex Rei Sitae The rule of Lex Rei Sitae states that the real property as well as personal
property is subject to the law of the country where it is situated (CIVIL
CODE, Art. 16).

As exceptions, however, the following shall be governed by the national

law of the person whose succession is under consideration and not by
the law of the country where the subject property is situated:
1. Capacity to succeed (CIVIL CODE, Art. 1039);
2. Intrinsic validity of testamentary provisions;
3. Amount of successional rights; and
4. Order of succession (CIVIL CODE, Art. 16).
 Lex The doctrine of lex contractus or lex loci contractus means the "law of the
Contractus place where a contract is executed or to be performed” (Hasegawa v.
Kitamura, G.R. 149177, November 23, 2007). As a rule, contracts are
subject to the law stipulated by the parties to be their choice of law. In the
absence of a stipulation, the default law is the law of the place where the
contract was executed or the lex loci contractus. This is so because the
parties would have specified a particular law if they did not want local law
to govern their contractual relationship (PE BENITO, Conflict of Laws
(2020), p. 109 [hereinafter PE BENITO, Conflict]).

Lex Loci The rule of lex loci celebrationis means that the forms and solemnities of
Celebrationis contracts, wills, and other public instruments are governed by the laws of
the country in which they are executed (CIVIL CODE, Art. 17, Par. 1).

Page 6
Principle Definition

Lex Domicilii Lex domicilii refers to the law of a person's domicile. Under the
domiciliary theory, the status, condition, rights, obligations, and capacity
of a person are governed by the law of his domicile or the lex domicilii
(SEMPIO-DIY, Handbook on Conflict of Laws (2004), p. 51 [hereinafter,
SEMPIO-DIY, Conflict of Laws])
 Lex Fori Lex fori is an approach where the rights and liabilities of the parties are
governed by the law of the forum (PE BENITO, Conflict, supra at 129).

Lex Loci The conflict of laws rule of lex loci delicti commissi states that matters
Delicti affecting the substantive rights of the parties are governed by the law of
the place of the wrong. (Vda. De Alcañeses v. Alcañeses, G.R. No.
187847, June 30, 2021).

Lex Loci Lex Loci Solutionis is the law of the place where the contract is to be
Solutionis performed or celebrated. Since the contract is to be performed in a
particular place or state, it is logical that the law of that state governs the
relationship of the parties. (PE BENITO, Conflict, supra at 112).

(11) Summarize the conflict of laws rules covering the following activities or subject matters
regulated by law:
1. Family rights and duties, or the status, condition and legal capacity of persons;
2. Crimes, public security and safety, committed within the Philippine territory; 3.
Real and personal properties;
4. Intestate and testamentary succession, with respect to order of succession, amount of
successional rights, and intrinsic validity of testamentary provisions;
5. Formalities, forms and solemnities of contracts, wills and other public instruments; and
6. Intrinsic validity of contracts, its nature and construction.

The conflict of laws rules may be summarized as follows:

 Activity or Persons Involved Governing Applicable Law
Matter Rule
Regulated by
Law

1. Family rights Filipino citizens Lex nationalii - Philippine laws apply,

and duties, national law of even though Filipino
or the person citizens are living abroad
the status, involved (CIVIL CODE, Art. 15)
condition, and
legal capacity Foreign national Law of the foreign national
of persons

2. Crimes, 1. Filipino citizens; Generality Philippine laws but subject

public security 2. Foreigners living principle of to the principles of
and and sojourning in criminal laws international laws, treaties
safety, the Philippines and laws of preferential
committed application (REVISED
within the PENAL CODE, Art. 2).
Philippine
territory

3. Real and 1. Filipino citizens; Lex rei sitei - Philippine law shall apply
personal or 2. Foreign law where the for properties situated in
properties national real or the Philippines
personal
property is
situated

4. Intestate Filipino citizens Lex nationalii - Philippine law applies

and national law of (CIVIL CODE, Art. 16)
testamenta the person
ry Foreign national whose National law of the foreign
succession, succession is national but subject to the
with respect to Renvoi Doctrine when the
order of
succession,

Page 7
Activity or Persons Involved Governing Applicable Law
Matter Rule
Regulated by
Law

amount of under foreign national is

successional consideration domiciled in the
rights, and Philippines.
intrinsic
validity of Note: The law of the
testamentary foreign national applies
provisions even if he was a former
Filipino.

5. Formalities, 1. Filipino citizens; Lex loci Law of the country where

forms and or 2. Foreign celebrationis - they are executed
solemnities of national law of the
contracts, wills country where Exception: A joint will
and other the contract, executed by Filipinos in a
public will, or public foreign country shall not be
instruments instrument is valid in the Philippines,
(extrinsic executed even though the same is
validity) valid in the place of
execution (CIVIL CODE,
Arts. 818 and 819)

6. Intrinsic 1. Filipino citizens; Lex loci Law voluntarily agreed

validity of or 2. Foreign contractus - upon by the parties, or the
contracts, its national law voluntarily law intended by the
nature and agreed upon parties either expressly or
construction by the parties explicitly (Hasegawa v.
Kitamura, G.R. No.
 149177, November 23,
2007).

(AQUINO, Reviewer on Civil

Law (2023), p. 11-13
[hereinafter AQUINO, Reviewer
on Civil Law]).

(12) What are

the

distinctions between Recognition and Enforcement of Foreign Judgments? The following

are the distinctions:
Recognition of Enforcement of
Foreign Judgment Foreign Judgment

The defendant or respondent is The plaintiff or petitioner wants the court to

presenting the foreign judgment merely positively carry out and make effective the
as a defense, on the basis of res foreign judgment.
judicata.

Invokes merely a sense of justice Implies an act of sovereignty.

(Perkins v. Benguet Consolidated
Mining, G.R. No. L-1981, May 28,
1954).

Needs no proceeding or action but Requires a separate action brought precisely to

 implies that the same has already been make the foreign judgment effective.
filed against the defendant who is
invoking the foreign judgment.

Recognition is a passive effect of Enforcement is an active recognition and

foreign judgment. implementation of the foreign judgment from the
local court, rendering the foreign judgment as a
domestic judgment and seeking its enforcement
by the sheriff in accordance with the Rules of
Court.

(SEMPIO-DIY, Conflict, supra at 151-152).

Note: In the recognition of foreign judgments, Philippine courts are incompetent to substitute
their judgment on how a case was decided under foreign law. They are limited to the question of
whether to extend the effect of the foreign judgment in the Philippines. Philippine courts will only
determine: 1) whether the foreign judgment is contrary to an overriding public policy in the
Philippines; and 2) whether any alleging party is able to prove an extrinsic ground to repel the
foreign judgment, i.e., want of jurisdiction, want of notice to the party, collusion, fraud, or clear

Page 8
 mistake of law or fact (Suzuki v. Office of the Solicitor General, G.R. No. 212302, September 2,
2020).

II. HUMAN RELATIONS

ABUSE OF RIGHTS

(13) Is breach of promise to marry an actionable wrong?

The existing rule is that a breach of promise to marry per se is not an actionable wrong (Baksh
v. Court of Appeals, G.R. No. 97336, February 19, 1993). However, it is actionable if there are
additional circumstances that make the act fall within the ambit of Articles 19, 20, 21, or 2176 of
the Civil Code because in such cases there is another act independent of the breach of promise
to marry which gives rise to liability (AQUINO, Torts and Damages (2024), p. 468 [hereinafter
AQUINO,
Torts and

Damages]).

(14) Jan, a German citizen, met Jhonna in the Philippines. He went on to court Jhonna, visiting
her almost every day, giving her gifts, and eventually telling her that he intended to marry
her. What Jan did not tell Jhonna, however, was that he had still been married to his third
wife then. Instead, he told her that he was a divorced man. He also concealed his true
identity and made Jhonna and her family believe that his name was Roger Brawner. The
two agreed to get married, and Jan sent Jhonna P500,000.00 to buy a lot for their conjugal
home. When Jhonna found out about Jan's lies and deception, she broke up with him.
Jan filed an action for damages, invoking the human relations provisions in the Civil
Code, particularly Articles 20, 21, and 22. Will the action prosper?
No, the action for damages predicated on Articles 20, 21, and 22 will not prosper. A mere breach
of a promise to marry is not an actionable wrong, as long as it is not of such extent as would
palpably and unjustifiably contradict good customs. However, the human relations provisions in
the New Civil Code presuppose that the party seeking damages must have acted in good faith.
Here, Jhonna called off the engagement after she had discovered Jan's lies and deception.
Jan's actions were tainted with fraud and deceit; he did not have the purest intentions in
marrying Jhonna. He lied about his marital status, and even hid his true name from Jhonna.
These acts suffice to justify the wedding's cancellation. Finding out that one's betrothed is still
married to another person, and that they are not who they say they are, are reasons enough to
conclude bad faith. Since respondent himself did not act in good faith, he cannot claim damages
under the New Civil Code (Guevarra v. Banach, G.R. No. 214016, November 24, 2021).

UNJUST ENRICHMENT

(15) ABC Corp. obtained a loan from XYZ Bank. As security for the loan, ABC Corp. executed a
deed of Real Estate Mortgage over its two condominium units. Upon default, XYZ Bank
applied for the extrajudicial foreclosure of the properties. After the issuance of the
Certificate of Sale in XYZ Bank's favor but prior to the lapse of the redemption period,
 condominium certificates of title were issued in favor of XYZ Bank and it took possession
of the property. ABC Corp. prayed to have the titles annulled, which the court granted. In
the computation of the redemption price to be paid by ABC Corp. The court excluded the
real estate taxes that XYZ Bank paid. Is the court correct?
No, the court is not correct. The redemption price must consist of the following: (1) the principal
obligation or the amount due under the mortgage deed; (2) interest at the rate specified in the
mortgage; (3) expenses of foreclosure, i.e., Judicial Commission, Publication Fee, and Sheriff's
Fee; and (4) other expenses as a result of the custody of the property less the income received.

The real estate taxes that XYZ Bank paid must be included as part of the redemption price. The
premature consolidation of ownership will only result in the reinstatement of the certificates of
title in favor of ABC Corp. The effect cannot be extended to the forfeiture of XYZ Bank's right of
reimbursement for the real estate taxes paid, lest it undermines the principle of unjust
enrichment. The payment of real estate taxes is based on the actual or beneficial use and
possession of the property independent of ownership (Bank of the Philippine Islands v. LCL
Capital Inc., G.R. No. 243396, September 14, 2021; M. Lopez case).

Page 9
(16) What is an accion in rem verso?
An accion in rem verso is an action against a 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 (CIVIL CODE, Art. 22). An accion in rem verso is
considered merely an auxiliary action, available only when there is no other remedy on contract,
quasi
contract, crime, and quasi-delict. If there is an obtainable action under any other institution of
positive law, that action must be resorted to, and the principle of accion in rem verso will not lie
(Shinryo (Philippines) Company, Inc. v. RRN, Inc., G.R. No. 172525, October 20, 2010).

In order that accion in rem verso may prosper, the essential elements must be present:
(ELJA) 1. That the defendant has been Enriched;
2. That the plaintiff has suffered a Loss;
3. That the enrichment of the defendant is without Just or legal ground;
4. That the plaintiff has no other Action based on contract, quasi-contract, crime or quasi delict
(Nation
al
Power
Corp.
v.

Benguet Electric Cooperative, G.R. No. 218378, June 14, 2021; M. Lopez case).

(17) National Power Corporation (NPC) supplies power to Benguet Electric Cooperative
(BENECO) under a Transition Contract. NPC erroneously billed BENECO due to an error
 in the metering device. BENECO refused to pay the underbilling and argued that it
resulted from NPC's failure to discover the error in the metering device. Does the non-
payment of the underbilling constitute unjust enrichment?
No. The non-payment of the underbilling is based on contract, not the principle of unjust
enrichment. Unjust enrichment exists when a person unfairly retains a benefit, money, or
property against the fundamental principles of justice, equity, and good conscience. The
principle against unjust enrichment is embodied in Article 22 of the Civil Code, which provides
that a person who acquires or comes into possession of something at the expense of another
without just or legal ground must return it. To be applicable, Article 22 requires that: (a) a person
is benefited without a valid basis or justification, and (b) such benefit is derived at another's
expense or damage. However, the principle of unjust enrichment does not automatically apply
when one party benefits from the efforts or obligations of another. It is necessary to show that
the enrichment of one party is without a just or legal ground, and that the plaintiff has no other
action against the other party. In other words, there is no unjust enrichment when the person
who benefited has a valid claim to such benefit.

In this case, NPC and BENECO executed a Contract of Sale of Electricity and a Transition
Contract for the Supply of Electricity to govern their rights and obligations in the supply of electric
power and energy. Therefore, any action that one may bring against the other shall be based on
the provisions of their contract. The principle of unjust enrichment will not apply.

The principle of unjust enrichment under Article 22 of the Civil Code is not a catch-all provision
that can be conveniently invoked when a party has suffered a loss. This is especially true when
a contract exists between the parties (National Power Corp. v. Benguet Electric Cooperative,
G.R. No. 218378, June 14, 2021; M. Lopez case).

TORTIOUS INTERFERENCE

(18) What is the concept of tortious interference?

While it is true that a third person cannot possibly be sued for breach of contract because only
parties can breach contractual provisions, a contracting party may sue a third person not for
breach but for inducing another to commit such breach (Go v. Cordero, G.R. No. 164703, May
4, 2010). The rule on tort interference is embodied in the Civil Code which provides that any
third person who induces another to violate his contract shall be liable for damages to the other
contracting party (CIVIL CODE, Art. 1314). The interference is penalized because it violates the
property rights of a party in a contract to reap the benefits that should result therefrom ( Lagon v.
CA, G.R. No. 119107, March 18, 2005).

Note: However, a third person cannot commit tortious interference with a contract when a
legitimate reason exists behind their conduct (GMA Network, Inc. v. Cruz-Valdes, G.R. No.
205498, May 10, 2021).

Page 10
 The elements of unjust enrichment are as follows: (EKI)
1. Existence of a valid contract;
2. Knowledge on the part of the third person of the existence of contract; and 3. Interference
of the third person is without legal justification or excuse (So Ping Bun v. CA, G.R. No.
120554, September 21, 1999).

(19) GMA and C entered into a Talent Agreement, with an exclusivity clause, prohibiting the
latter from rendering services for other media entities without GMA's prior written
consent. C resigned from GMA. Upon receiving the resignation letter, C was advised to
avail her terminal leave and was told that she no longer needed to report to work. She
was also asked to turn over the company-issued items, and her company email account
was terminated. Subsequently, C joined ABS-CBN as its Vice President for News. GMA
contended that C breached the Talent Agreement by transferring to ABS-CBN without
written
consent,
and it
sought

damages. It also argued that there was tortious interference on the part of ABS-CBN
when the latter hired C as its Vice President for News. Is GMA correct?
No. A contracting party cannot insist that the other party has breached their contract when it has
stopped fulfilling its own obligations. Here, when the supposed interference took place, petitioner
had already asked C to go on terminal leave, required her to surrender company properties, cut
off her access to her company email, and replaced her with other talents on her shows. By doing
so, it prevented her from complying with her obligations under the Talent Agreement; it
unilaterally terminated the contract. Moreover, a third person cannot commit tortious
interference with a contract when a legitimate reason exists behind their conduct. There is
tortious interference when a third person's interference is without any legal justification or
excuse. "It is sufficient justification if the impetus of their conduct lies in a proper business
interest rather than in wrongful motives." Hence, as long as a proper economic or financial
interest exists, the third person cannot be held liable for tortious interference. In this case, ABS-
CBN had been in need of a news executive who could train employees and supervise its news
department. C, a media veteran but was only employed as a production unit manager by GMA,
had been a good candidate. Additionally, ABS CBN hired respondent C as a news executive,
and not as a talent. It needed C for a completely different position performing different tasks.
Thus, the Talent Agreement between her and GMA was of no consequence to ABS-CBN's
decision to hire her as the Vice President for News. This would not have affected her work as
GMA's talent (GMA Network, Inc. v. Cruz-Valdes, G.R. No. 205498, May 10, 2021).

(20) Is actual knowledge of the contract and proof of malice necessary in order that there be
tortious interference?
While it is not necessary to prove actual knowledge, he must nonetheless be aware of the facts
which, if followed by a reasonable inquiry, will lead to a complete disclosure of the contractual
relations and rights of the parties in the contract (Lagon v. CA, G.R. No. 119107, March 18,
2005).

Malice in some form is generally supposed to be an essential ingredient in cases of interference

with contract relations. But upon the authorities it is enough if the wrongdoer, having knowledge
 of the existence of the contract relation, in bad faith sets about to break it up. Whether his motive
is to benefit himself or gratify his spite by working mischief to the employer is immaterial. Malice
in the sense of ill-will or spite is not essential (Daywalt v. La Corporacion de los Padres
Agustinos Recoletos, G.R. No. 13505, February 4, 1919). It is sufficient that the defendant must
have been driven by purely impious reasons to injure the plaintiff. In other words, his act of
interference cannot be justified (Lagon v. CA, G.R. No. 119107, March 18, 2005).

III. PERSONS AND FAMILY RELATIONS

NATURAL PERSONS

(21) Does an unborn child have an enforceable right to be supported?

Yes. A conceived child, although yet unborn, is given by law a provisional personality of its own
for all purposes favorable to it. The unborn child, therefore, has a right to support from its
progenitors, just as a conceived child, even if as yet unborn, may receive donations as
prescribed by Article 742 of the same Code, and its being ignored by the parent in his testament
may result

Page 11
in preterition of a forced heir that annuls the institution of the testamentary heir, even if such
child should be born after the death of the testator (Quimiguing v. Icao, G.R. No. 26795, July
31, 1970).

(22) Can parents invoke the provisional personality of a conceived child to obtain damages on
behalf of an aborted child?
No. A parent cannot invoke the concept of “provisional personality’’ of a conceived child to
obtain damages for and on behalf of an aborted child considering that the conditions set in
Articles 40 and 41 were not met. However, the parents can obtain damages in their own right
against the doctor who caused the abortion (Geluz v. CA, G.R. No. L-16439, July 20, 1961).

(23) Can an employer, granting bereavement leave and other death benefits to employees in
case of death of a child, validly disallow an application for the same when sought for by
the employee due to miscarriage, for the reason that the child did not acquire civil
personality?
 No. The
issue of
civil

personality is not relevant therein. It is not a question whether the unborn child acquired any
rights or incurred any obligations prior to his/her death that were passed on to or assumed by
the child’s parents. The rights to bereavement leave and other death benefits pertain directly to
the parents of the unborn child upon the latter’s death (Continental Steel Manufacturing Corp. v.
Montaño, G.R. No. 182836, October 13, 2009).

Note: An unborn child has life and may therefore die while inside the mother’s womb. The status
of legitimacy also attaches to an unborn child.

DOMICILE AND RESIDENCE

(24) Differentiate residence from domicile.

Residence means actual residence, in contrast with domicile, which pertains to a permanent
abode. Note, however, that both terms imply a relation between a person and a place.
Determining which connotation applies depends on the statute in which it is found. Residence, in
this sense, pertains to a place of abode, whether permanent or temporary, or as the Civil Code
aptly describes it, a place of habitual residence. Actual residence for purposes of civil rights and
obligations may be further delineated into residence in the Philippines, or residence in a
municipality in the Philippines, depending on the purpose of the law in which they are employed.
In election laws or in the exercise of political rights, the term "residence" is synonymous with
domicile (Poe-Llamanzares v. COMELEC, G.R. Nos. 221697 & 221698-700, April 5, 2016).

MARRIAGE

(25) Rolando filed a petition for the declaration of nullity of his marriage with Luz. He alleged
that he married Luz not out of love but because he was forced to marry her in order to lift
the hold departure order made by the POEA and to be able to work abroad as a seaman,
hence, he is psychologically incapacitated to comply with the essential marital
obligations of marriage. Does the absence of a real intention of the parties to establish a
life together affect the status of the marriage?
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.

Motives for entering into a marriage are varied and complex. The State does not and cannot
dictate on the kind of life that a couple chooses to lead. Any attempt to regulate their lifestyle
would go into the realm of their right to privacy and would raise serious constitutional questions.
The right to marital privacy allows married couples to structure their marriages in almost any way
they see fit, to live together or live apart, to have children or no children, to love one another or

Page 12
 not, and so on. Thus, marriages entered into for other purposes, limited or otherwise, such as
convenience, companionship, money, status, and title, provided that they comply with all the
legal requisites, are equally valid. Love, though the ideal consideration in a marriage contract, is
not the only valid cause for marriage. Other considerations, not precluded by law, may validly
support a marriage. (Republic v. Albios, G.R. No. 198780, October 16, 2013).

(26) Raquel filed a Petition for Declaration of Nullity of his marriage with Veronica. He alleged
that no marriage license could have been validly issued. Among the pieces of evidence
presented by Raquel is a Certification issued by the Municipal Civil Registrar which
attested to the fact that the Office of the Local Civil Registrar "has neither record nor
copy of a marriage license" issued to Raquel and Veronica with respect to their marriage.
The OSG argues that the absence of a categorical statement in the certification that the
document does not exist in the said office despite diligent search is not sufficient. Is the
certification sufficient to prove the non-issuance of the marriage license? The certification
of the
Local Civil
Registrar,
that their
office had
no record
of a
marriage
license,
was
adequate
to prove
the non-
issuance
of said
license.
The

certification issued by the Local Civil Registrar may be considered as a certification of due
search and inability to find the record or entry sought by the parties despite the absence of a
categorical statement that "such document does not exist in their records despite diligent
search." The certification of due search and inability to find a record or entry as to the purported
marriage license, issued by the civil registrar, enjoys probative value, he being the officer
charged under the law to keep a record of all data relative to the issuance of a marriage license.

Here, Raquel was able to present a Certification issued by the Municipal Civil Registrar. On the
basis of such certification, the presumed validity of the marriage of Raquel and Veronica has
been overcome and it becomes the burden of Veronica to prove that their marriage is valid as it
is she who alleges such validity (Kho v. Republic, G.R. No. 187462, June 1, 2016).

MARRIAGES SOLEMNIZED ABROAD

(27) Angelita left the Philippines to work in Germany as a nurse. There, she met Georg, a
German national. After a few years, Angelita became a naturalized German citizen.
Angelita and Georg got married in Germany. Shortly thereafter, they decided to reside in
the Philippines. However, the marriage did not last. Angelita filed a petition for annulment
of marriage on the ground of Georg's alleged psychological incapacity. Will the petition
prosper?
A fundamental and obvious defect of Angelita's petition for annulment of marriage is that it seeks
a relief improper under Philippine law in light of both Georg and Angelita being German citizens,
not Filipinos, at the time of the filing thereof. Based on the Nationality Principle, which is followed
in this jurisdiction, and pursuant to which laws relating to family rights and duties, or to the
status, condition and legal capacity of persons are binding upon citizens of the Philippines, even
though living abroad, it was the pertinent German law that governed. In short, Philippine law
finds no application herein as far as the family rights and obligations of the parties who are
foreign nationals are concerned.
 An absolute divorce obtained abroad by a couple who are both aliens may be recognized in the
Philippines, provided it is consistent with their respective national laws. Here, what governs the
marriage of the parties is German, not Philippine, law, and this rendered it incumbent upon
Angelita to allege and prove the applicable German law. Angelita did not comply with the
requirements for pleading and proof of the relevant German law. Furthermore, Angelita
overlooked that German and Philippine laws on annulment of marriage might not be the same.
In other words, the remedy of annulment of the marriage due to psychological incapacity
afforded by Article 36 of the Family Code might not be available for her. In the absence of a
showing of her right to this remedy in accordance with German law, therefore, the petition
should be dismissed (Simundac-Keppel v. Keppel, G.R. No. 202039, August 14, 2019).

(28) Paul, a U.S. citizen, married Louella in Manila, Philippines. Paul filed a Petition for
Declaration of Nullity of Marriage against Louella on the ground of psychological

Page 13
incapacity under Article 36 of the Family Code. Would the petition initiated by the
foreigner spouse prosper?
Lex loci celebrationis is a latin term, literally translated as the law of the place of the ceremony. It
means that the validity of a contract is governed by the place where it is made, executed, or to
be performed. It is adhered to by Philippine law, as enunciated under the first paragraph of
Article 26 of the Family Code. A marriage formally valid in the place it is celebrated is valid in
the Philippines.

Applied to this controversy, the marriage between the parties having been celebrated in the
Philippines, is governed by Philippine laws. The same laws hold true with its incidents and
consequences. Thus, all matters relating to the validity of the contract of marriage, such as the
presence or absence of requisites, forms, or solemnities are to be judged in relation to the law in
which it has been celebrated or performed. Herein, it is indubitable that the action relates to the
validity of the marriage celebrated in the Philippines. The petitioner's action assails the

psychological incapacity of the respondent to perform the essential marital obligations.

Ultimately, therefore, the result of the action would have an effect on the personal status of the
respondent. With this, there is no reason to foreclose the petitioner's right to institute the instant
petition for nullity of marriage (Ambrose v. Suque-Ambrose, G.R. No. 206761, June 23, 2021).

(29) Marelyn was married to Yoshino, a Japanese national. By virtue of a judgment of divorce
rendered by a Japanese court, Marelyn filed a petition for recognition and enforcement of
a foreign judgment. The trial court denied the petition and ruled that the divorce obtained
by Marelyn in Japan should not be recognized as the Philippine law does not afford
 Filipinos the right to file for a divorce pursuant to Article 15 of the Civil Code which
provides that national law shall govern family rights and duties and the determination of
the condition and legal capacity to enter into contracts and civil relations. Is the trial
court correct?
No, a Filipino citizen has the capacity to remarry under Philippine law after initiating a divorce
proceeding abroad and obtaining a favorable judgment against his or her alien spouse who is
capacitated to remarry. Paragraph 2 of Article 26 speaks of "a divorce x x x validly obtained
abroad by the alien spouse capacitating him or her to remarry." Based on a clear and plain
reading of the provision, it only requires that there be a divorce validly obtained abroad.
The letter of the law does not demand that the alien spouse should be the one who initiated the
proceeding wherein the divorce decree was granted. It does not distinguish whether the Filipino
spouse is the petitioner or the respondent in the foreign divorce proceeding (Republic v.
Manalo, G.R. No. 221029, April 24, 2018).

Note: Whether the Filipino spouse initiated the foreign divorce proceeding or not, a favorable
decree dissolving the marriage bond and capacitating his or her alien spouse to remarry will
have the same result: the Filipino spouse will effectively be without a husband or wife. Thus, the
foreign divorce is recognized whether it is the Filipino or alien spouse who initiates the divorce
(Id.).

(30) May an Acceptance Certificate issued by a mayor of a foreign country stating that the
written notification of divorce had been accepted be sufficient to establish the fact of
divorce, such that a foreign (court) judgment is no longer necessary to be presented?
Yes, an Acceptance Certificate already suffices as proof of the fact of divorce. Applying the
doctrine laid down in Moraña v. Republic, since the Acceptance Certificate was issued by the
Mayor of Sakado City, the same is deemed an act of an official body in Japan. By whatever
name it is called, the Acceptance Certificate is clearly the equivalent of the "Divorce Decree" in
Japan, hence, the best evidence of the fact of divorce obtained by petitioner and her former
husband. (Republic v. Kikuchi, G.R. No. 243646, June 22, 2022, citing Moraña v. Republic,
G.R. No. 227605, December 5, 2019).

Note: In Republic v. Kikuchi, the Acceptance Certificate was what was issued to the spouses
when they filed their divorce before the Mayor of Sakado City, Saitama Prefecture. The divorce
was coursed not through Japanese courts but through the Mayor of Sakado City, Saitama
Prefecture.

Additional Note: In Moraña v. Republic, the Divorce Report is what the Government of Japan
issued to the spouses when they applied for divorce. There was no "divorce judgment" to speak

Page 14
 of because the divorce proceeding was not coursed through Japanese courts but through the
Office of the Mayor of Fukuyama City in Hiroshima Prefecture, Japan.

VOID MARRIAGES, VOIDABLE MARRIAGES, AND LEGAL SEPARATION

(31) What is psychological incapacity?

Psychological incapacity depicts an enduring aspect of a spouse's personality structure, existing
at the time of the celebration of marriage, that renders them incapable of understanding and
complying with their essential marital obligations, manifested through clear acts of
dysfunctionality that undermines the family (Mutya-Sumilhig v. Sumilhig, G.R. No. 230711,
August 22, 2022; M. Lopez case).

(32) What are the things to be considered in invoking and proving psychological incapacity?
The
guidelines
in the

interpretation and application of Article 36 of the Family Code which provides that a marriage may be
declared void on the ground of psychological incapacity are as follows:
1. The plaintiff-spouse in an action to nullify a valid marriage based on Article 36 of the Family
Code has the burden of proving his or her case with clear and convincing evidence; 2. Proof of
the durable or enduring aspects of a person's personality, called "personality structure," which
manifests itself through clear acts of dysfunctionality that undermines the family;

Note: Psychological incapacity is neither a mental incapacity nor a personality disorder that
must be proven through expert opinion. The spouse's personality structure must make it
impossible for him or her to understand and, more important, to comply with his or her essential
marital obligations. Proof of these aspects of personality need not be given by an expert.
Ordinary witnesses who have been present in the life of the spouses before the latter contracted
marriage may testify on behaviors that they have consistently observed from the supposedly
incapacitated spouse. From there, the judge will decide if these behaviors are indicative of a
true and serious incapacity to assume the essential marital obligations.

3. Psychological incapacity must be proven to be existing at the time of the celebration of

marriage;
4. Psychological incapacity must be incurable, not in the medical, but the legal sense;

Note: The requirement of incurability means that the incapacity is so enduring and persistent
with respect to a specific partner and contemplates a situation where the couple's respective
personality structures are so incompatible and antagonistic that the only result of the union
would be inevitable and irreparable breakdown of marriage. An undeniable pattern of such
persisting failure to be a present, loving, faithful, respectful, and supportive spouse must be
established as to demonstrate that there is indeed a psychological anomaly or incongruity in the
spouse relative to the other.

5. The illness must be grave enough to bring about disability to assume essential marital
 obligations;

Note: There must be a clear and convincing evidence showing that such incapacity is caused by
a genuinely serious psychic cause.

6. Marital obligations refer to Articles 68-71 the Family Code as regards the husband and wife
as well as Articles 220, 221, and 225 of the same code in regard to parents and their
children;

Note: It must be clearly shown that it is of such grievous nature that it reflects on the capacity of
one of the spouses for marriage. The easy cases are when one of the spouses sexually abuses
one of their children; or, when unknown to the other spouse, a child is subjected to domestic
violence; or when due to the spouse's refusal to go through counseling or rehabilitation, his or
her substance abuse puts a child through a situation of neglect or outright danger. As in all
cases, the context of the whole case, shown by clear and convincing evidence, should be taken
into consideration (Tan-Andal v. Andal, G.R. No. 196359, May 11, 2021). Such non-complied
marital

Page 15
obligation(s) must also be stated in the petition, proven by evidence and included in the text of
the decision.

Additional Note: Irreconcilable differences, conflicting personalities, emotional immaturity and

irresponsibility, physical abuse, habitual alcoholism, sexual infidelity or perversion, and
abandonment, by themselves, also do not warrant a finding of psychological incapacity (Carullo
Padua v. Padua, G.R. No. 208258, April 27, 2022).

7. Interpretations given by the National Appellate Matrimonial Tribunal of the Catholic Church
in the Philippines, while not controlling or decisive, is persuasive ; and
8. The trial court must order the prosecuting attorney or fiscal and the Solicitor General to
appear as counsel for the state (Santos-Macabata v. Macabata, G.R. No. 237524, April 6,
2022).

(33) Must
psychological
incapacity be proven
through expert
opinion?
No.

Psychological incapacity is neither a mental incapacity nor a personality disorder that must be
proven through expert opinion (Tan-Andal v. Andal, G.R. No. 196359, May 11, 2021). Proof of
this aspect of personality may be given by ordinary witnesses who have been present in the life
of the supposed incapacitated spouse before the latter contracted marriage. These witnesses
may testify on behaviors that they have consistently observed. The judge will then decide if
 these behaviors are indicative of a true and serious incapacity to assume the essential marital
obligations. (Mutya-Sumilhig v. Sumilhig, G.R. No. 230711, August 22, 2022; M. Lopez case).

Note: Expert opinions furnished by psychiatrists or psychologists on the psychological

temperament of parties are not indispensable. It is enough that the totality of clear and
convincing evidence proves that an enduring aspect of a spouse's personality, exjsting at the
time of the celebration of marriage, render him or her incapable of understanding or performing
essential marital obligations (Dedicatoria v. Dedicatoria, G.R. No. 250618, July 20, 2022; M.
Lopez case).

Nevertheless, a psychologist or psychiatrist may help prove certain facts for courts to arrive at a
legal conclusion of psychological incapacity by assessing and evaluating the psychological
condition of the parties. Thus, although expert opinion is not mandatory, due regard must be
given to expert opinion on the psychological disposition of the respondent when it is presented
in Article 36 cases (Mutya-Sumilhig v. Sumilhig, G.R. No. 230711, August 22, 2022; M. Lopez
case).

(34) Is there a requirement that the spouse be personally examined by a physician to be

declared psychologically incapacitated if evidence presented is sufficient? No. There is no
requirement that a person be examined by a physician before they can be declared to be
psychologically incapacitated. What matters is that the totality of evidence presented
establishes the party's psychological condition (Mutya-Sumilhig v. Sumilhig, G.R. No. 230711,
August 22, 2022; M. Lopez case).

(35) Antonio filed a Petition for Declaration of Nullity of Marriage. He alleged that he and his
wife Maribel are both psychologically incapacitated to comply with the basic marital
obligations. In her Answer, Maribel denied the allegations in the Petition and said that
Antonio voluntarily left their conjugal dwelling to pursue his womanizing and perennial
nocturnal gambling. The trial court held that although there was a reference made in the
psychiatric evaluation regarding the extra-marital affairs of Antonio's biological father,
still, his own infidelity throughout his marriage with Maribel does not equate to
psychological incapacity as it was not shown to be existing prior to the union. Can
infidelity be considered a form of psychological incapacity?
While it is true that infidelity is a ground for legal separation, the same may also be an indication
of a psychological incapacity if, for the same reason, one is completely unable to discharge the
essential obligations of marriage. Infidelity is not measured in terms of frequency. To be
considered as a form of psychological incapacity, infidelity must satisfy the requirements of (1)
gravity or severity, (2) antecedence, and (3) legal incurability or persistence during the marriage
(Quiogue, Jr. v. Quiogue, G.R. No. 203992, August 22, 2022; M. Lopez case).

Page 16
(36) When is a judicial declaration of nullity of marriage necessary?
The judicial declaration of nullity of a previous void marriage, as required under Article 40 of the
Family Code, is of limited application — i.e., it is only necessary for purposes of remarriage
(Pulido v. People, G.R. No. 220149, July 27, 2021).

Note: While a judicial declaration of absolute nullity may be invoked in other instances for
purposes other than remarriage, such as in action for liquidation, partition, distribution, and
separation of property, custody and support of common children and delivery of presumptive
legitimes, other evidence, testimonial or documentary, may also prove the absolute nullity of the
previous marriage in the said instances. (Pulido v. People, G.R. No. 220149, July 27, 2021).

Additional Note: For other purposes, such as but not limited to determination of heirship,
legitimacy or illegitimacy of a child, settlement of estate, dissolution of property regime, or a
criminal
case for
that
matter,
the court
may pass
upon the
validity of
marriage
even in a
suit not
directly
instituted
to
question
the same
so long as
it is
essential
to the

determination of the case (Niñal v. Bayadog, G.R. No. 133778, March 14, 2000).

(37) Can an accused in a bigamy case collaterally attack the validity of a prior void marriage in
the same criminal proceedings for bigamy?
Yes, the accused in a bigamy case can collaterally attack the validity of a prior void marriage in
the same criminal proceedings for bigamy. The parties are not required to obtain a judicial
declaration of absolute nullity of a void ab initio first and subsequent marriages in order to raise it
as a defense in a bigamy case. Consequently, a judicial declaration of absolute nullity of the first
and/or subsequent marriages obtained by the accused in a separate proceeding, irrespective of
the time within which they are secured, is a valid defense in the criminal prosecution for bigamy
(Pulido v. People, G.R. No. 220149, July 27, 2021).

Note: The same rule applies to all marriages celebrated under the Civil Code and the Family
Code. Article 40 of the Family Code did not amend Article 349 of the RPC, and thus, did not
deny the accused the right to collaterally attack the validity of a void ab initio marriage in the
criminal prosecution for bigamy. (Pulido v. People, G.R. No. 220149, July 27, 2021).

(38) What are the four requisites for a grant of a petition for declaration of presumptive death
under Article 41 of the Family Code? (4RWS)
The four requisites for a grant of a petition for declaration of presumptive death are the following:
1. The absent spouse has been missing for 4 consecutive years, or two consecutive years if
the disappearance occurred where there is danger of death under the circumstances laid
down in Article 391 of the Civil Code;
2. The present spouse wishes to Remarry;
3. The present spouse has a Well-founded belief that the absent spouse is dead; and 4. The
present spouse files a Summary proceeding for the declaration of presumptive death of the
absentee.

Note: The well-founded belief in the absentee's death requires the present spouse to prove that
 his/her belief was the result of diligent and reasonable efforts 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 necessitates exertion of active effort (not a mere passive one).
Mere absence of the spouse (even beyond the period required by law), lack of any news that the
absentee spouse is still alive, mere failure to communicate, or general presumption of absence
under the Civil Code would not suffice. The burden of complying with the stringent requirement
of "well-founded belief" can only be discharged upon a showing of proper and honest-to
goodness inquiries and efforts to ascertain not only the absent spouse's whereabouts but, more
importantly, whether the absent spouse is still alive or is already dead (Republic v. Ponce-
Pilapil, G.R. No. 219185. November 25, 2020).

(39) If the first marriage is merely voidable, can the accused interpose an annulment decree as
a defense in the criminal prosecution for bigamy?
No, since the voidable first marriage is considered valid and subsisting when the second
marriage was contracted. The crime of bigamy, therefore, is consummated when the second
marriage was celebrated during the subsistence of the voidable first marriage. The same rule
applies if the

Page 17
second marriage is merely considered as voidable (Pulido v. People, G.R. No. 220149, July 27,
2021).

(40) Alphonso, an American citizen, married Rachel. In 1997, the marriage was declared void
by the RTC on the ground of bigamy because of Alphonso's subsisting marriage to
Nancy. Relying on the dissolution of the marriage with Rachel, Alphonso cohabited with
Jocelyn and they had a child, Charnnel. Alphonso and Jocelyn got married to make their
union legal and to legitimize the status of the Charnnel. When Alphonso died, Jocelyn
requested for the certified true copies of the RTC Decision declaring Earl's marriage with
Rachel as void; however, the RTC discovered that the OSG was not furnished with the
Decision. Thus, the RTC furnished the OSG with a copy of the Decision and gave it 15
days from receipt to perfect an appeal or file a Motion for Reconsideration. The OSG
sought reconsideration of the Decision contending that the marriage with Nancy was not
proven with competent evidence. The RTC reversed the 1997 Decision and ruled that the
marriage
between

Alphonso and Rachel was valid. Charnnel then filed a Petition for Annulment of
Judgment of the RTC Decision with the CA but the same was dismissed. Can Charnnel
assail the marriage of Alphonso and Rachel even after the death of either party?
Void marriages governed by the New Civil Code can be questioned even after the death of
either party. The death of a party does not extinguish the action for petition for declaration of
absolute nullity of marriage as the deceased may have heirs with legal standing to assail the
 void marriage. To hold otherwise would be tantamount to depriving a then innocent child, now
rightfully asserting her rights, of due process of law. Here, Charnnel, as an heir of Alphonso, is
vested with the legal standing to assail the marriage of Alphonso and Rachel by seeking the
annulment of the RTC's Order (Thomas v. Trono, G.R. No. 241032 (Resolution), March 15,
2021; M. Lopez case).

(41) What is the effect of death of a party in a legal separation proceeding? An action for legal
separation which involves nothing more than the bed-and-board separation of the spouses is
purely personal. Being personal in character, it follows that the death of one party to the action
causes the death of the action itself — actio personalis moritur cum persona.

A further reason why an action for legal separation is abated by the death of the plaintiff, even if
property rights are involved, is that these rights are mere effects of decree of separation, their
source being the decree itself; without the decree such rights do not come into existence, so that
before the finality of a decree, these claims are merely rights in expectation. If death supervenes
during the pendency of the action, no decree can be forthcoming, death producing a more
radical and definitive separation; and the expected consequential rights and claims would
necessarily remain unborn (Lapuz Sy v. Eufemio, G.R. No. L-30977, January 31, 1972).

PROPERTY RELATIONS BETWEEN SPOUSES

(42) How is the interest of each spouse in the CPG characterized?

Prior to the liquidation of the conjugal partnership, the interest of each spouse in the conjugal
assets is inchoate, a mere expectancy, which constitutes neither a legal nor an equitable estate,
and does not ripen into a title until it appears that there are assets in the community as a result
of the liquidation and settlement. The interest of each spouse is limited to the net remainder
resulting from the liquidation of the affairs of the partnership after its dissolution. Thus, the right
of the husband or wife to one-half of the conjugal assets does not vest until the dissolution and
liquidation of the conjugal partnership, or after dissolution of the marriage, when it is finally
determined that, after settlement of conjugal obligations, there are net assets left which can be
divided between the spouses or their respective heirs (Strong Fort Warehousing Corp. v. Banta,
G.R. Nos. 222369 and 222502, November 16, 2020; M. Lopez case).

However, if the husband is an alien, the wife may sell private land, which was sold to the
spouses, because the alien spouse had no right to the land under Art. XII, Sec. 7 of the 1987
Constitution (Cheesman v. IAC, G.R. No. 74833, January 21, 1991).

Page 18
(43) What is the effect of the alienation or encumbrance of conjugal property without the
authority of the court or the written consent of the other spouse under Articles 96 and
124 of the Family Code?
Any alienation or encumbrance of the conjugal property concluded after the effectivity of the
Family Code requires the other spouse's written consent or a court order allowing the
transaction, otherwise, the disposition is void.

This is because before the liquidation of the conjugal partnership, the interest of each spouse in
the conjugal assets is inchoate, a mere expectancy, which constitutes neither a legal nor an
equitable estate, and does not ripen into a title until it appears that there are assets in the
community as a result of the liquidation and settlement. The interest of each spouse is limited to
the net remainder resulting from the liquidation of the affairs of the partnership after its
dissolution. Thus, the right of the husband or wife to one-half of the conjugal assets does not
vest until the dissolution and liquidation of the conjugal partnership, or after dissolution of the
marriage,
when it is
finally

determined that, after settlement of conjugal obligations, there are net assets left which can be
divided between the spouses or their respective heirs (Alexander v. Sps. Escalona, G.R. No.
256141, July 19, 2022; M. Lopez case).

Note: The retroactive effect of Article 124 of the Family Code to existing conjugal partnerships is
without prejudice to vested rights in the property acquired before August 3, 1988 (Alexander v.
Sps. Escalona, G.R. No. 256141, July 19, 2022; M. Lopez case).

(44) In 2000, Vuj mortgaged his alleged portion of the conjugal partnership. At this point in
time, his marriage with Murielle was still existing and the conjugal partnership was not
yet dissolved. Is the mortgage valid?
No, the mortgage is void because his right to one-half of the conjugal assets does not vest until
the liquidation of the conjugal partnership. The right of the husband or wife to one-half of the
conjugal assets does not vest until the dissolution and liquidation of the conjugal partnership, or
after dissolution of the marriage, when it is finally determined that, after settlement of conjugal
obligations, there are net assets left which can be divided between the spouses or their
respective heirs.

Any disposition or encumbrance of a conjugal property by one spouse must be consented to, by
the other; otherwise, it is void. Prior to the liquidation of the conjugal partnership, the interest of
each spouse in the conjugal assets is inchoate, a mere expectancy, which constitutes neither a
legal nor an equitable estate, and does not ripen into a title until it appears that there are assets
in the community as a result of the liquidation and settlement. The interest of each spouse is
limited to the net remainder resulting from the liquidation of the affairs of the partnership after its
dissolution.

In this case, it still could not be determined yet which of the conjugal assets belong to Vuj that
he can validly mortgage. (Strong Fort Warehousing Corp. v. Banta, G.R. Nos. 222369 &
222502, November 16, 2020; M. Lopez case).
(45) What rules shall govern the status of a contract when the husband and the wife were
married during the effectivity of the Civil Code but the alienation or encumbrance of the
conjugal property, without the other spouse's consent, transpired after the effectivity of
the Family Code?
The date of alienation or encumbrance of the conjugal property is material in determining the
applicable law. For purposes of determining the status of the contract, the applicable law must
be reckoned on the date of the alienation or encumbrance of the conjugal property made
without the consent of the other spouse.

The rules can be summarized as follows:

1. The alienation or encumbrance of the conjugal property, without the wife's consent, made
before the effectivity of the Family Code, is not void but merely voidable. The applicable
laws are Articles 166 and 173 of the Civil Code. the spouse may file an action for
annulment of contract within 10 years from the transaction; and
2. The alienation or encumbrance of the conjugal property, without the authority of the court
or the written consent of the other spouse, made after the effectivity of the Family Code is

Page 19
void. The applicable law is Article 124 of the Family Code without prejudice to vested
rights in the property acquired before August 3, 1988. Unless the transaction is accepted
by the non-consenting spouse or is authorized by the court, an action for declaration of
nullity of the contract may be filed before the continuing offer on the part of the consenting
spouse and the third person becomes ineffective (Alexander v. Sps. Escalona, G.R. No.
256141, July 19, 2022; M. Lopez case).

Note: The rules provided under Articles 96 and 124 of the Family Code with respect to ACP and
CPG are the same.

(46) Spouses X and Y were married prior to the effectivity of the Family Code. The spouses
owned a lot - Lot 1. On June 1998, X waived his right over Lot 1 in favor of his illegitimate
son, B. In turn, on August 2005, B relinquished his right over Lot 1 in favor of G. Is the
alienation of Lot 1 void?
 Yes. The
contract
is void

notwithstanding the fact that Spouses X and Y were married during the effectivity of the Civil
Code. In the case of Alexander v. Sps. Escalona, the Court held that the date of alienation or
encumbrance of the conjugal property is material in determining the applicable law with respect
to the status of the transactions. Hence, in this case, the applicable law is Article 124 of the
Family Code, not the Civil Code, which renders void any alienation or encumbrance of the
conjugal property without the consent of the other spouse. Under Article 124 of the Family
Code, the sale of a conjugal property requires the consent of both the husband and wife. The
absence of the consent of one renders the entire sale null and void, including the portion of the
conjugal property pertaining to the husband who contracted the sale.

As to the status of the transaction over Lot 1, the absence of the written consent of one spouse
renders the alienation void. Absent any vested right over Lot No. 1 acquired before August 3,
1988 that exempted B and G's situation from the retroactive application of the Family Code, the
ownership of Lot 1 remains with Spouses X and Y. (Alexander v. Sps. Escalona, G.R. No.
256141, July 19, 2022; M. Lopez case).

(47) What are the distinctions between Articles 147 and 148 of the Family Code (Property
Regime of Unions Without Marriage)?
Article 147 Article 148

As to The provision applies to parties who are The provision applies to parties
Applicability capacitated to marry each other, but who are incapacitated to marry
live exclusively with each other as due to some legal impediments
husband and wife without benefit of (i.e., adulterous relationships
marriage or in a void marriage. and marriages which are
bigamous, incestuous, or void
Note: Void marriages under this by reason of public policy
provision do not contemplate a void under Art. 38).
marriage that may occur due to non-
observance of Article 40 of the Family
Code, which shall be governed by ACP
or CPG (FAMILY CODE, Arts. 50 and
43).

As to Owned in equal shares. Separately owned by the

Salaries parties. If any of them is
and married, his/her salary is the
Wages property of the absolute
community or the conjugal
partnership of the legitimate
marriage.
 As to Belongs to such party subject to proof Belongs to such party.
Property of acquisition by the use of exclusive
Acquired funds.
by Either
Spouses

Page 20
Article 147 Article 148

Exclusively
through
their Own
Funds

As to Governed by rules on co-ownership. Owned by them in common

Property in proportion to respective
Acquired by contributions.
Both
Spouses
through
their
Work/Indust
ry

As to Presumed to be obtained by their joint No presumption of joint

Property efforts, work, or industry and shall be acquisition. When there is
Acquired owned by them in equal shares. Efforts evidence of joint acquisition but
While in care and maintenance of family and none as to the extent of actual
Living household are considered contributions. contribution, there is a
Together presumption of equal sharing.

As to When only one of parties to a void 1. If one of parties is validly

Forfeiture marriage is in good faith, the share of married to another, his or
the party in bad faith in the co- her share in the co-
ownership shall be forfeited: ownership shall accrue to
1. In favor of their common children; 2. the CP or CPG existing in
In case of default or waiver by any or such valid marriage;
all common children or their 2. If the party who acted in bad
descendants each vacant share shall faith is not validly married to
belong to respective surviving another, his/her share shall
descendants; or be forfeited in the same
3. In their absence, to the innocent party. manner provided for in
Article 147; or
In all cases, forfeiture takes place upon 3. The above rules apply even if
termination of cohabitation. both parties are in bad faith.
RIGHTS AND OBLIGATIONS BETWEEN HUSBAND AND WIFE

(48) A and B are husband and wife. One day, after attending a corporate meeting, A did not
return and instead lived in another place. B filed a petition for habeas corpus to have the
custody of A as B was prohibited from seeing and visiting A. Can B secure a writ of
habeas corpus to compel A to live with her in conjugal bliss?
No. Marital rights including coverture and living in conjugal dwelling may not be enforced by the
extraordinary writ of habeas corpus. Furthermore, no court is empowered as a judicial authority
to compel a husband to live with his wife. Coverture cannot be enforced by compulsion of a writ
of habeas corpus carried out by sheriffs or by any other process. That is a matter beyond judicial
authority and is best left to the man and woman's free choice (llusorio v Bildner, G.R. Nos,
139789 & 139808, May 12, 2000).

While the spouses are obliged to live together, the court is powerless to enforce such obligation
(RABUYA, Persons and Family Relations (2021), p. 641). It is not within the province of the
courts of this country to attempt to compel one of the spouses to cohabit with, and render
conjugal rights to, the other (Arroyo v. Vasquez-Arroyo, G.R. No. L-17014, August 11, 1921).

PATERNITY AND FILIATION

(49) How is the filiation of legitimate/illegitimate children established?

The filiation of legitimate or illegitimate children is established by any of the
following: 1. The record of birth appearing in the civil register or a final judgment;
or
2. An admission of legitimate (or illegitimate) filiation in a public document or a private
handwritten instrument and signed by the parent concerned (FAMILY CODE, Art. 172).

Page 21
In the absence of any of the foregoing evidence, such legitimate or illegitimate filiation shall be
proved by:
1. Open and continuous possession of the status of a legitimate or illegitimate child; 2. Any
other means allowed by the Rules of Court and special laws (FAMILY CODE, Art. 172).

(50) Who may bring an action to claim legitimacy?

An action to claim legitimacy may be brought by:
1. Child – exclusive and personal right of child which may be brought anytime during his
lifetime;
2. The heirs of the child within a period of 5 years in case:
a. Child dies during minority;
b. Child dies in a state of insanity; or
c. Child dies after action has already been instituted (FAMILY CODE, Art. 173). 3. Heirs may
continue the action if the child dies after the action has already been instituted.
 (51) Who may impugn
the legitimacy of the
child?

Impugning the legitimacy of the child is a strictly personal right of the husband, or in exceptional
cases, his heirs (Liyao, Jr. v. Tanhoti-Liyao, G.R. No. 138961, March 7, 2002). Generally, only
the husband may impugn. However, the heirs of the husband may impugn the filiation of the
child in any of the following cases:
1. If the husband should die before the expiration of the period fixed for bringing his action;
2. If he should die after the filing of the complaint without having desisted therefrom; or 3. If
the child was born after the husband’s death (FAMILY CODE, Art. 171).

Note: The mother who was in a valid and subsisting marriage at the time of conception or giving
birth to her child is prohibited under Article 167 of the Family Code from impugning the
legitimacy of her child. The proscription remains even if the mother is an estranged wife. The
child who was conceived or born during a valid and existing marriage has no right to impugn his
own legitimacy under the Family Code. He cannot choose his own filiation (Ordoña v. Local
Civil Registrar of Pasig City, G.R. No. 215370, November 9, 2021).

(52) What are the requisites for legitimation?

The requisites for legitimation are the following:
1. The child was conceived and born out of wedlock;
2. The parents at the time of child’s conception, were not disqualified by any impediment to
marry each other or were disqualified only because either or both of them were below 18;
and
3. There is a valid marriage subsequent to the child’s birth (STA. MARIA, Persons and Family
Relations Law (2022), pp. 804-805).

Note: The effects of legitimation shall retroact to the time of the child’s birth (FAMILY CODE,
Art. 180).

(53) Will the annulment of a voidable marriage affect the legitimation of the child? The
annulment of a voidable marriage shall not affect the legitimation of the child (FAMILY CODE,
Art. 178).

DOMESTIC ADOPTION

(54) Who may adopt under R.A. No. 11642?

The following may adopt under R.A. No. 8552:
1. Any Filipino citizen at least 25 years of age, who is in possession of full civil capacity and
legal rights; has not been convicted of any crime involving moral turpitude; is of good
moral character and can model the same; is emotionally and psychologically capable of
caring for children; at least 16 years older than the adoptee; and who is in a position to
support and care for adopted children in keeping with the means of the family;

Note: The requirement of 16-year difference between the age of the adopter and the
adoptee may be waived when the adopter is the biological parent of the adoptee, or is the
spouse of the adoptee’s parent.

Page 22
 2. The legal guardian with respect to the ward after the termination of the guardianship and
clearance of financial accountabilities;
3. The legal guardian / foster parent with respect to the foster child;
4. Philippine government officials and employees deployed or stationed abroad: Provided,
that they are able to bring the child with them; and
5. Foreign nationals who are permanent or habitual residents of the Philippines for at least 5
years possessing the same qualifications as above stated for Filipino nationals prior to the
filing of the petition: Provided, That they come from a country with diplomatic relations with
the Republic of the Philippines and that the laws of the adopter’s country will acknowledge
the Certificate of Adoption as valid, acknowledge the child as a legal child of the adopters,
and allow entry of the child into such country as an adoptee (R.A. No. 11642, Sec. 21).

Note: The requirements of residency may be waived in the following cases:

1. A former
Filipino
citizen,

habitually residing in the Philippines, who seeks to adopt a relative within the 4th civil
degree of consanguinity or affinity; or
2. One who seeks to adopt the legitimate child of the Filipino spouse; or
3. One who is married to a Filipino citizen and seeks to adopt jointly with the spouse a relative
within the 4th degree of consanguinity or affinity of the Filipino spouse (R.A. No. 11642,
Sec. 21).

Note: Spouses shall jointly adopt, except in the following cases:

1. If one spouse seeks to adopt the legitimate child of the other; or
2. If one spouse seeks to adopt own illegitimate child: Provided, That the other spouse has
signified consent thereto; or
3. If the spouses are legally separated from each other (R.A. No. 11642, Sec. 21).

(55) Who may be adopted under R.A. No. 11642?

The following may be adopted under R.A. No. 11642:
1. Any child who has been issued a CDCLAA;
2. The marital child of one spouse by the other spouse;
3. A non-marital child by a qualified adopter to improve status to legitimacy;
4. A Filipino of legal age, if prior to the adoption, said person has been consistently considered
and treated by the adopters as their own child prior to reaching the age of majority for a
period of at least 3 years prior to the filing of the petition;
5. A foster child who has been declared as legally available for adoption;
6. A child whose adoption has been previously rescinded;
7. A child whose biological or adoptive parent have died. Provided, That, no proceedings shall
be filed within 6 months from the time of death of said parent/s; or
8. A relative of the adopter. (IRR, R.A. No. 11642, Sec. 31).

(56) What are the effects of a Decree of Adoption?

 Under Sections 41, 42, and 43 of RA 11642, the following are the effects of adoption: 1.
Legitimacy – The adoptee shall be considered the legitimate child of the adopter for all
intents and purposes and as such is entitled to all the rights and obligations provided by law
to legitimate children born to them without discrimination of any kind. To this end, the adoptee
is entitled to love, guidance, and support in keeping with the means of the family. The
legitimate filiation that is created between the adopter and adoptee shall be extended to the
adopter’s parents, adopter’s legitimate siblings, and legitimate descendants.

The adopter is also given the right to choose the name by which the child is to be known,
consistent with the best interest of the child.

2. Parental Authority – Upon issuances of the Order of Adoption, adoption shall cease as
alternative care and becomes parental care. Adoptive parents shall now have full parental
authority over the child. Except in cases where the biological parent is the spouse of the
adopter, all legal ties between the biological parents and the adoptee shall be severed and
the same shall then be vested on the adopters.

Page 23
In case spouses jointly adopt or one spouse adopts the legitimate child of the other, joint
parental authority shall be exercised by the spouses.

3. Succession – In testate and intestate succession, the adopters and the adoptee shall have
reciprocal rights of succession without distinction from legitimate filiations. However, if the
adoptees and their biological parents have left a will, the law on testamentary succession
shall govern.

Note: Since the provisions of Article 189 and 190 of the Family Code on intestate succession to
the estate of an adopted were not expressly repealed, it is opined that they are still effective in
the absence of clear incompatibility with the provisions of RA 11462.

INTER-COUNTRY ADOPTION

(57) Did R.A.

No.
11642
repeal
the Inter-
Country
Adoption
Act (R.A.
No.
8043)?
No. R.A.
No.
11642 did
not
repeal
the Inter-
Country
Adoption
Act. It
simply
provided
and
allowed
for a
simpler
and

inexpensive domestic administrative adoption proceedings which streamline services for

alternative child care. It also created the National Authority for Child Care which exercises all
powers and functions relating to alternative child care, including, declaring a child legally
available for both domestic, administrative adoption and inter-country adoption, foster care,
kinship care, family-like care or residential care (R.A. No. 11642, Secs. 3 and 62).
(58) Who may adopt under R.A. No. 8043? What are the conditions?
The following persons may adopt under R.A. No. 8043:
1. Any alien; or
2. Filipino citizen, both permanently residing abroad.

The conditions are:

1. At least 27 years of age and at least 16 years older than the child to be adopted, at the time
of the application, unless the adopter is:
a. Parent by nature of the child to be adopted; or
b. Spouse of such parent.
Note: Under R.A. 11642, the age requirement is 25 years old (R.A. 11642, Sec. 21).

2. If married, his/her spouse must jointly file for the adoption;

3. Capacity to act and assume all rights and responsibilities of parental authority under his/her
national laws, and has undergone the appropriate counselling from an accredited
counselor in his/her country;
4. Has not been convicted for a crime involving moral turpitude;
5. Eligible to adopt under his/her national law;
6. In a position to provide the proper care and support and to give the necessary moral values
and examples to all his children, including the child to be adopted;
7. Agrees to uphold the basic rights of the child as embodied under Philippine laws, the U.N.
Convention on the Rights of a Child, and to abide by the rules and regulations issued to
implement the Inter-Country Adoption Act;
8. Comes from a country with whom the Philippines has diplomatic relations and whose
government maintains a similarly authorized and accredited agency and that the adoption
is allowed under his/her national laws; and
9. Possesses all the qualifications and none of the disqualifications under the Inter-Country
Adoption Act and other applicable Philippine laws (R.A. No. 8043, Sec. 9).

(59) Who may be adopted under R.A. No. 8043?

A child who has been declared by the NACC as legally available for adoption may be adopted.
The certification shall be, for all intents and purposes, the primary evidence that the child is
legally available in an inter-country adoption proceeding as provided in R.A. No. 8043 (R.A. No.
8043, Sec. 8, as amended by R.A. No. 11642).

Note: No child shall be matched to a foreign adoptive family unless it is satisfactorily shown that
the child cannot be adopted locally (R.A. No. 8043, Sec. 11).

Page 24
ADOPTION FOR SIMULATED BIRTHS

(60) Define "Simulation of birth record" under R.A. No. 11222.

Simulation of birth record refers to the tampering of the civil registry to make it appear in the
record of birth that a child was born to a person who is not such child's biological mother,
causing the loss of the true identity and status of such child (R.A. No. 11222, Sec. 3(b)).

(61) How may a person be exempted from criminal, civil, and administrative liability arising
from simulation of birth record?
Notwithstanding any provision of law to the contrary, a person or persons who, prior to the
effectivity of this Act, simulated the birth of a child, and those who cooperated in the execution of
such simulation, shall not be criminally, civilly, or administratively liable for such act, provided:
1. That the simulation of birth was made for the best interest of the child and that the child has
been

consistently considered and treated by such person or persons as her, his, or their own
daughter or son; and
2. That such person or persons has or have filed a petition for adoption with an application for
the rectification of the simulated birth record within 10 years from the effectivity of this Act
(R.A. No. 11222, Sec. 4).

Note: All the benefits of R.A. No. 11222 shall also apply to adult adoptees (R.A. No. 11222,
Sec. 4).

(62) What are the qualifications required for adopters under R.A. No. 11222?
Adopters under R.A. No. 11222 must:
1. Be Filipino citizens;
2. Be of legal age;

Note: Under R.A. 11642, the age requirement is 25 years old (R.A. 11642, Sec. 21).

3. Possess full civil capacity and legal rights;

4. Be of good moral character;
5. Not have been convicted of any crime involving moral turpitude;
6. Be emotionally and psychologically capable of caring for children;
7. Be in a position to support and care for the child in keeping with the means of the family;
and
8. In case of adoption by a married couple, where one of the adopters is a foreign national
married to a Filipino, the foreign national must have been. residing in the Philippines for at
least 3 continuous years prior to the filing of the petition for adoption and application for
rectification of simulated birth record child (R.A. No. 11222, Sec. 7).

SUPPORT
(63) May an action for support resolve an issue of paternity?
Yes, an action for support may resolve an ineluctable issue of paternity if it involves the same
parties, is brought before a court with the proper jurisdiction, prays to impel recognition of
paternal relations, and invokes judicial intervention to do so. Filiation proceedings need not be
separately instituted first to ascertain the minor child’s paternity before a complaint for support
could be filed. The direct filing of an action for support, where the issue of compulsory
recognition may be integrated and resolved, is allowed (Abella v. Cabañero, G.R. No. 206647,
August 9, 2017).

PARENTAL AUTHORITY

(64) What is the tender-age presumption?

No child under seven years of age shall be separated from the mother unless the court finds
compelling reasons to order otherwise (CIVIL CODE, Art. 213). The so-called “tender-age
presumption” under Article 213 of the Family Code may be overcome only by compelling
evidence of the mother's unfitness. The mother has been declared unsuitable to have custody
of her children in one or more of the following instances: neglect, abandonment, unemployment,

Page 25
immorality, habitual drunkenness, drug addiction, maltreatment of the child, insanity or affliction
with a communicable disease (Pablo-Gualberto v. Gualberto, G.R. No.154994, June 28, 2005).

Sexual preference or moral laxity alone does not prove parental neglect or incompetence. Not
even the fact that a mother is a prostitute or has been unfaithful to her husband would render
her unfit to have custody of her minor child. To deprive the wife of custody, the husband must
clearly establish that her moral lapses have had an adverse effect on the welfare of the child or
have distracted the offending spouse from exercising proper parental care disease (Pablo-
Gualberto v. Gualberto, G.R. No.154994, June 28, 2005).

(65) Is the exercise of parental authority limited to the parents of the child?
Parent When Who may exercise
al exercised
author
ity

Substitu Exercised In default of parents or a judicially appointed guardian, the

te only in case following person shall exercise substitute parental authority
parental of over the child in the order indicated:
authority death, 1. The surviving grandparent, as provided in Art. 214; 2.
absence or The oldest brother or sister, over twenty-one years of age,
unsuitability unless unfit or disqualified; and
of the 3. The child’s actual custodian, over twenty-one years of
parents. age, unless unfit or disqualified (FAMILY CODE, Art. 216).

Note: The preference accorded by Article 216 of the Family

Code does not automatically attach to the grandparents, and is
conditioned upon the determination of their fitness to take care
of their grandchild (Masbate v. Relucio, G.R. No. 235498, July
30, 2018).

Special Exercised Special parental authority is exercised by the school, its

parental only while administrators and teachers, or the individual, entity or
authority the child is institution engaged in child care over the child while under their
under supervision, instruction or custody.
supervisio
n, Note: This special parental authority and responsibility applies
instruction to all authorized activities, whether inside or outside the
or premises of the school, entity or institution. Thus, such authority
custody. and responsibility applies to field trips, excursions and other
affairs of the pupils and students outside the school premises
Co-exists whenever authorized by the school or its teachers (St. Mary’s
with Academy v. Carpitanos, G.R. No. 143363, February 6, 2002).
parental
authority of
parents.

(66) Queenie was born to Renalyn and Ricky, who had been living together without the benefit
of marriage. When the relationship ended, Renalyn pursued her studies in Manila and
Queenie was left in the actual care and custody of Ricky. Upon verbal instructions of
Renalyn, the latter’s parents obtained the custody of Queenie while the child was in
school and did not anymore return the child to Ricky. Ricky filed a petition for habeas
corpus and child custody. The trial court ruled that Queenie was born out of wedlock, for
which reason she shall be under the parental authority of her mother pursuant to Article
176 of the Family Code. Is the trial court correct?
While Article 176 of the Family Code has effectively disqualified the father of an illegitimate child
from exercising substitute parental authority under Article 216 of the Family Code, to adopt a
rigid view would run afoul to the overarching consideration in custody cases, which is the best
interest of the minor. Here, Ricky was in actual physical custody of Queenie when Renalyn left
for Manila to pursue her studies until the instant controversy took place. As such, Ricky James
had already assumed obligations and enjoyed privileges of a custodial character, giving him a
cause of action to file a case of habeas corpus to regain custody of Queenie as her actual
custodian.

Page 26
 Queenie’s best interest demands that a proper trial be conducted to determine if she had,
indeed, been neglected and abandoned by her mother, rendering the latter unfit to exercise
parental authority over her, and in the event that Renalyn is found unsuitable, whether it is in
Queenie’s best interest that she be in the custody of her father rather than her grandparents
upon whom the law accords a far superior right to exercise substitute parental authority. The
preference accorded by Article 216 of the Family Code does not automatically attach to the
grandparents, and is conditioned upon the determination of their fitness to take care of their
grandchild (Masbate v. Relucio, G.R. No. 235498. July 30, 2018).

IV. PROPERTY, OWNERSHIP, AND ITS MODIFICATIONS

CLASSIFICATION OF PROPERTY

(67) What is the difference between lands of the public domain and lands of public dominion?
While
lands of
the
public
domain
under the

Constitution pertain to all lands owned or held by the State both in its public and private
capacity, lands forming part of the public dominion under the Civil Code pertain only to those
which are intended for public use, public service, or the development of national wealth, and
excludes patrimonial property. Therefore, property of public dominion and patrimonial property,
as defined by the Civil Code, both fall within the scope of public domain contemplated under the
1987 Constitution. Excepted from the scope of public domain are lands subject of a claim of
ownership based on native title (Republic v. Pasig Rizal Co., Inc., G.R. No. 213207, February
15, 2022).

(68) How can property of public dominion, when no longer intended for public use or service,
be classified as patrimonial property of the state?
Article 422 of the Civil Code is not self-executing and cannot be inferred from non-use alone.
There must be a formal declaration by the executive or possibly the legislative department that
the property of the State is no longer needed for public use or public service before the same
can be classified as patrimonial or private property of the State (Laurel v. Garcia, G.R. No.
92013, July 25, 1990).

Note: Commonwealth Act No. 141 or the Public Land Act is the country's primary law on matters
concerning classification and disposition of lands of the public domain. It provides that the
President, upon the recommendation of the Secretary of Environment and Natural Resources,
may designate by proclamation any tract or tracts of land of the public domain as reservations
for the use of the Republic or any of its branches, or for quasi-public uses or purposes. The tract
or tracts of land thus reserved shall be non-alienable and shall not be subject to sale or other
disposition until again declared alienable (Philippine Navy Golf Club, Inc. v. Abaya, G.R. No.
235619, July 13, 2020; M. Lopez case).

Additional Note: All alienable and disposable lands enumerated in Section 59, from (a) to (d) of
the Public Land Act (C.A. No. 141), suitable for residence, commercial, industrial or other
 productive purposes other than agricultural, under Chapter VIII of the same Act, must be subject
to a presidential declaration that such are exempt from public use or public service before they
can be sold or leased, as the case may be, but such need not be solely through a presidential
proclamation. Section 63, in relation to Section 61, of the Act gives leeway to the President and
the DENR Secretary in choosing the manner, mechanism or instrument in which to declare
certain alienable or disposable public lands as unnecessary for public use or public service
before these are disposed through sale or lease to private parties, entities or corporations.
(Alde v. City of Zamboanga, G.R. No. 214981, November 4, 2020).

QUIETING OF TITLE

(69) What are the requisites for an action to quiet title to prosper? (T-I)
Two indispensable requisites must concur for an action for quieting of title to prosper, namely:
1. The plaintiff has a legal or an equitable Title to or interest in the real property subject of the
action; and
2. The deed, claim, encumbrance, or proceeding claimed to be casting cloud on their title
must be shown to be in fact invalid or inoperative despite its prima facie appearance of

Page 27
validity or legal efficacy (Sps. Velarde v. Heirs of Candari, G.R. No. 190057, October 17,
2022; M. Lopez case).

(70) X sold several parcels of land to Y with a right to repurchase. After failing to redeem the
lots, X executed a Deed of Quitclaim with Waiver of Rights, where she relinquished
absolute ownership of the lots in favor of Y. After Y's death, X began to represent herself
as the owner of lands by instituting tenants on portions of vast lands, collecting rentals,
and appropriating the lands' produce. The heirs of Y filed an action for quieting of title.
Will the action prosper?
No, the action for quieting of title will not prosper. The cause of action is grounded upon their
claims of ownership, which they argue to have been clouded by X's exercise of proprietary rights
— instituting tenants and collecting rentals and products. What they perceive as clouds over
their title were X's intrusive acts of dominion over the properties. Physical intrusion is not a
ground for quieting of title. With an allegation of a violation (physical intrusion) of a right
(ownership), the heirs of Y clearly do not seek a declaratory relief or mere removal of cloud over
their title.

Ultimately, they seek to recover full possession of the properties as an element of their
ownership, which was disturbed by X's physical intrusion. The proper action is an accion
reivindicatoria to recover full possession of a parcel of land as an element of ownership (Sps.
Velarde v. Heirs of Candari, G.R. No. 190057, October 17, 2022, M. Lopez Case).
(71) What is the prescriptive period of an action for quieting of title?
As a general rule, an action for quieting of title, being a real action, prescribes thirty (30) years
after accrual. However, by way of exception, an action to quiet title involving property in the
possession of the plaintiff is imprescriptible (Gatmaytan v. Misibis Land, Inc., G.R. No. 222166,
June 10, 2020).

CO-OWNERSHIP

(72) What is the effect if a co-owner sells the property owned in common without the consent
of all co-owners?
Alienation by a co-owner shall be limited to the portion which may be allotted to him in the
division upon the termination of the co-ownership. Until a partition is made among co-owners,
no one of them can claim any particular portion of an undivided property as exclusively as his
own. The portion can only be ascertained upon termination (Gonzales v. Ichon, G.R. Nos. L-
3272-73, November 29, 1951; CIVIL CODE, Art. 493).

(73) When may a co-owner exercise the right of redemption?

A co-owner of a thing may exercise the right of redemption in case the shares of all the other co
owners or of any of them are sold to a third person (CIVIL CODE, Art. 1620).

(74) What is the effect of redemption?

Redemption of the whole property by the co-owner does not vest in him sole ownership over the
said property. Redemption duly made within the period prescribed by law inures to the benefit of
the co-ownership and does not put an end to its existence (Mariano v. CA, G.R. No. 101522,
May 28, 1993).

CONDOMINIUM ACT

(75) Are foreigners prohibited from owning condominium units and shares in condominium
corporations?
No. The Condominium Act expressly allows foreigners to acquire condominium units and shares
in condominium corporations up to not more than 40% of the total and outstanding capital stock
of a Filipino-owned or controlled corporation. Under this set up, the ownership of the land is
legally separated from the unit itself. The land is owned by a Condominium Corporation and the
unit owner is simply a member in this Condominium Corporation. As long as 60% of the
members of this Condominium Corporation are Filipino, the remaining members can be
foreigners (Hulst v. PR Builders Inc., G.R. No. 156364, September 25, 2008).

Page 28
 The transfer or conveyance to foreigners are subject to the following qualifications: 1. Where the
common areas in the condominium project are held by the owners of separate units as
co-owners thereof, and not by a condominium corporation: The condominium units cannot be
conveyed or transferred to persons other than Filipino citizens or corporations at least 60% of
the capital stock of which belong to Filipino citizens (R.A. No. 4726, Sec. 5).

As an exception, the condominium unit may be conveyed or transferred to an alien in

cases of hereditary succession.

2. Where the common areas in a condominium project are held by a corporation: The
appurtenant membership or stockholding in the corporation must not cause the alien
interest in such corporation to exceed 40% of the total and outstanding capital stock (R.A.

No. 4726, Sec. 5).

ACTIONS TO RECOVER OWNERSHIP AND POSSESSION OF PROPERTY

(76) What is the remedy for the recovery of possession of movable property? Replevin is an
action whereby the owner or person entitled to repossession of personal property such as
goods or chattels may recover these from one who has wrongfully distrained or taken, or who
wrongfully detains such goods or chattels. It is designed to permit one having right to
possession to recover property in specie from one who has wrongfully taken or detained the
property. The term may refer either to the action itself, for the recovery of personalty, or to the
provisional remedy traditionally associated with it, by which possession of the property may be
obtained by the plaintiff and retained during the pendency of the action (Smart Communications,
Inc. v. Astorga, G.R. Nos. 148132, 151079 & 151372, January 28, 2008).

(77) What are the distinctions among accion interdictal, accion publiciana and accion
reinvidicatoria?
The following are the distinctions:
Accion Accion Accion Reinvidicatoria
Interdictal Publiciana

As to A summary action An ordinary civil Accion reivindicatoria is

Nature which may be either for proceeding to recover a suit to recover
forcible entry the better right of possession of a parcel
(detentacion) or possession of property of land as an element
unlawful detainer and is resorted to when of ownership.
(desahucio) to recover the dispossession has (Philippine Navy Golf
physical or material lasted for more than 1 Club, Inc. v. Abaya,
possession of property year. The issue G.R. No. 235619, July
where the involved is not 13, 2020; M. Lopez
 dispossession has not possession de facto but case).
lasted for more than possession de jure of
one year. The issue realty independent of
involved is limited to the the title.
question of possession
de facto (De Guzman-
Fuerte v. Sps. Estomo,
G.R. No. 223399, April
23, 2018).

As to It must be brought in Depends on the Depends on the

which the proper MTC or assessed value. assessed value.
Court has MeTC (B.P. Blg. 129,
Jurisdicti Sec. 33 (2)) MTC/MeTC MTC/MeTC
on If the assessed value is If the assessed value is
equal to or less than equal to or less than
₱400,000 (R.A. No. ₱400,000 (R.A. No.
11576, Sec. 2). 11576, Sec. 2).

RTC: RTC:

Page 29
Accion Accion Accion Reinvidicatoria
Interdictal Publiciana

If the assessed value If the assessed value

exceeds ₱400,000 exceeds ₱400,000
(R.A. No. 11576, Sec. (R.A. No. 11576, Sec.
1). 1).

As to the Within 1 year from the Within a period of 10 Prescriptive periods:

Time time the cause of action years from the time the Four (4) years – if
when arises. cause of action arises. based on fraud from
the the issuance of
Action In forcible entry, the certificate of title over
Must be cause of action arises property.
Brought from the date of actual Ten (10) years – if
to Court entry on the land. based on implied or
constructive trust.
In case of strategy or
stealth, the cause of Imprescriptible - when
action arises from the plaintiff is in possession
date of discovery of of the property (PEZA
such strategy or stealth v. Fernandez, G.R. No.
(2 PARAS, Property, 138971, June 6, 2001)
supra at 96).

In unlawful detainer,
the same arises from
the date of last
demand to vacate.
 (DE
LEON &
DE
LEON,
JR.,

Comments and Cases on Property (2015), pp. 84-98 [hereinafter DE LEON, Property]).

(78) What requisites must be present for an action for unlawful detainer to prosper? A complaint
for unlawful detainer must sufficiently allege and prove the following key jurisdictional facts:
1. Initially, possession of property by the defendant was by contract with or by tolerance of
the plaintiff;
2. Eventually, such possession became illegal upon notice by plaintiff to defendant of the
termination of the latter's right of possession;
3. Thereafter, the defendant remained in possession of the property and deprived the plaintiff
of the enjoyment thereof; and
4. Within one year from the last demand on defendant to vacate the property, the plaintiff
instituted the complaint for ejectment (Galacgac v. Bautista, G.R. No. 221384, November
9, 2020; M. Lopez case).

Note: A person who occupies the land of another at the latter's permission or tolerance, without
any contract between them, is necessarily bound by an implied promise that he will vacate upon
demand, failing which, a summary action for ejectment may be filed against him. It is essential
in ejectment cases of this kind that the plaintiff's supposed acts of tolerance must have been
present right from the start of the possession which is later sought to be recovered (Galacgac v.
Bautista, G.R. No. 221384, November 9, 2020; M. Lopez case).

(79) Marvin alleged that Sebastian’s four (4) heirs (the “Heirs”) partitioned and adjudicated a
lot in his favor in consideration of his legal services. In the meantime, Nicole was made
the caretaker of the lot, and she occupied the land based on the Heirs’ express
permission. Later, Marvin learned that Nicole's daughter, Chelsea, started building a
house of strong materials. Accordingly, Marvin sent demand letters to Chelsea asking to
defer the construction and to vacate the premises. Chelsea maintained that two (2) of the
Heirs sold to her their shares over the land. Eventually, Marvin filed an action for
unlawful detainer against Chelsea. Will the action for unlawful detainer prosper?
No, the unlawful detainer will not prosper. One of the key jurisdictional facts that a complaint for
unlawful detainer must sufficiently allege and prove is the fact that, initially, possession of
property

Page 30
 by the defendant was by contract with or by tolerance of the plaintiff. It is essential in ejectment
cases of this kind that the plaintiff's supposed acts of tolerance must have been present right
from the start of the possession which is later sought to be recovered.

From the facts, Marvin and Chelsea have no agreement on the disputed area and even asserted
opposing claims over its ownership. Since Nicole was made the caretaker of the lot and she
occupied the land based on the Heirs' express permission, she has no reason to ask permission
from Marvin. More importantly, Marvin did not extend the purported tolerance to Chelsea. A case
for unlawful detainer alleging tolerance must definitely establish its existence from the start of
possession. Otherwise, a case for forcible entry can mask itself as an action for unlawful
detainer and permit it to be filed beyond the required one year prescription period from the time
of forcible entry (Galacgac v. Bautista, G.R. No. 221384, November 9, 2020; M. Lopez case).

EASEMENTS;
EASEMENT OF RIGHT
OF WAY

(80) What are the

classifications of
easements?
The classifications
of easements are
as follows:
1. According to
the recipient of
the benefit:

a. Real servitude - those imposed upon an immovable for the benefit of another
immovable belonging to a different owner (CIVIL CODE, Art. 613); or
b. Personal servitude - those imposed for the benefit of a community, or of one or more
persons to whom the encumbered estate does not belong (CIVIL CODE, Art. 614). 2.
According to the source:
a. Legal easements - those established by law (CIVIL CODE, Art. 619); or
b. Voluntary easements - those established by the will of the owners (CIVIL CODE, Art.
619).
3. According to the manner in which they are exercised:
a. Continuous easements - those the use of which is or may be incessant, without the
intervention of any act of man (CIVIL CODE, Art. 615); or
b. Discontinuous easements - those which are used at intervals and depend upon the
acts of man (CIVIL CODE, Art. 615).
4. According to the presence of physical signs:
a. Apparent easements - those which are made known and are continually kept in view
by external signs that reveal the use and enjoyment of the same (CIVIL CODE, Art.
615); or
b. Non-apparent easements - those which show no external indication of their existence
(CIVIL CODE, Art. 615).
5. According to duty of the servient owner:
a. Positive easements - those which impose upon the owner of the servient estate the
obligation of allowing something to be done or of doing it himself (CIVIL CODE, Art.
616); or
b. Negative easements - those which prohibit the owner of the servient estate from doing
something which he could lawfully do if the easement did not exist (CIVIL CODE,
Art. 616).

(81) What are the modes of acquiring an easement of right of way?

The modes of acquisition on easement of right of way are as follows:
 1. By a voluntary title (CIVIL CODE, Arts. 688-693); or
2. By compulsory title (CIVIL CODE, Arts. 649-657; RABUYA, Property (2021), p. 714
[hereinafter RABUYA, Property]).

(82) When may the owner of the dominant estate demand a compulsory right of way? (OI-PL)
The owner of the dominant estate may validly claim a compulsory right of way only after he has
established the existence of four requisites, to wit:
1. The (dominant) estate is surrounded by other immovables and is without adequate Outlet
to a public highway;
2. After payment of the proper Indemnity;
3. The isolation was not due to the Proprietor's own acts; and
4. The right of way claimed is at a point Least prejudicial to the servient estate.

Page 31
Note: Additionally, the burden of proving the existence of the foregoing pre-requisites lies on the
owner of the dominant estate (Costabella Corp. v. CA, G.R. No. 80511, January 25, 1991). An
easement of right of way does not permit the owner of the dominant estate to make excavations
on the servient estate to install water pipes (Prosperity Credit Resources, Inc., v. CA, G.R. No.
114170, January 15, 1999).

NUISANCE

(83) What is a nuisance? (IA-SOH)

A nuisance is any act, omission, establishment, business, condition of property, or anything else
which:
1. Injures or endangers the health or safety of others;
2. Annoys or offends the senses;
3. Shocks, defies or disregards decency or morality;
4.
Obstruc
ts or

interferes with the free passage of any public highway or street, or any body of water; or
5. Hinders or impairs the use of property (CIVIL CODE, Art. 694).

(84) How may a nuisance be classified?

A nuisance may be classified in two ways:
1. According to the object it affects; or
a. Public nuisance - one which affects a community or neighborhood or any considerable
number of persons, although the extent of the annoyance, danger or damage upon
individuals may be unequal (CIVIL CODE, Art. 695); or
 b. Private nuisance - one which violates only private rights and produces damages to but
one or few persons (Cruz v. Pandacan Hiker's Club, G.R. No. 188213, January 11,
2016).
2. According to its susceptibility to summary abatement.
a. Nuisance per se - one which affects the immediate safety of persons and property,
which may be summarily abated under the undefined law of necessity; or
b. Nuisance per accidens - one which depends upon certain conditions and
circumstances, and its existence being a question of fact, it cannot be abated without
due hearing thereon in a tribunal authorized to decide whether such a thing does in
law constitute a nuisance (Cruz v. Pandacan Hiker's Club, G.R. No. 188213, January
11, 2016).

(85) Is the doctrine of attractive nuisance applicable to bodies of water? Generally, it is not
applicable to bodies of water, artificial as well as natural, in the absence of some unusual
condition or artificial feature other than the mere water and its location. Thus, a swimming pool
or pond or reservoir of water is not considered an attractive nuisance (DE LEON, Property,
supra at 570).

(86) Spouses A and B, together with their children, X and Y, who were five and three years old,
respectively, went to Sofitel to check in. The children were brought to the hotel's kiddie
pool which is proximate to the slides. As X was stepping into the water, he slipped which
resulted to his head hitting the rugged edge of the pool. Y mounted the kiddie pool slide
and thereafter bumped his head. Both sustained injuries which caused their head to
bleed. Four months later, Y started having seizures and was admitted to a hospital. A
then filed a complaint for damages against Sofitel, alleging that Sofitel should be held
liable for the injuries sustained by his children and that the presence of a slide within the
pool's premises made it an attractive nuisance. Will the action prosper?
Yes, the action will prosper because the installation of the slides with slopes ending over the
swimming pool's waters makes it an attractive nuisance. The doctrine of attractive nuisance
provides that one who maintains on his premises dangerous instrumentalities or appliances of a
character likely to attract children in play, and who fails to exercise ordinary care to prevent
children from playing therewith or resorting thereto, is liable to a child of tender years who is
injured thereby, even if the child is technically a trespasser in the premises.

Although the swimming pool alone may not be considered as an attractive nuisance, the kiddie
pool's close proximity to the slides formed an unusual condition or artificial feature intended to

Page 32
 attract children. In other words, the installation of the slides with slopes ending over the
swimming pool's waters makes it an attractive nuisance. For this reason, Sofitel was duty bound
to undertake protective measures to ensure the children's safety. It was Sofitel's responsibility to
guarantee that appropriate safeguards were in place within the attractive nuisance in order to
protect children against the injury from unknown or unseen dangers (Aleta v. Sofitel Philippine
Plaza Manila, G.R. No. 228150, January 11, 2023).

V. DIFFERENT MODES OF ACQUIRING OWNERSHIP

OCCUPATION

(87) What are the requisites of occupation as a mode of acquiring ownership? (SCAWIL) In
order for occupation be a mode of acquiring ownership, the following requisites must be
present:
1. There must be Seizure
of a thing;
2. The thing seized must
be Corporeal personal
property;
3. The thing must be
susceptible of
Appropriation by nature;
4. The thing must be
Without an owner;
5. There must be an
Intention to appropriate;
and
6. Requisites laid down by Law
must be complied with (DE
LEON, Property, supra at 602).

Note:
Material
holding not
being
essential as
long as the
possessor
considers
the thing as
subjected to
his control
or
disposition
(Id. at 603).

DONATION

(88) What are the formalities observed in donations of immovable and movable properties?
The following are the formalities for:
1. Movables:
a. If donation is oral, simultaneous delivery of property donated is required if the value
is ₱5,000 or less. Acceptance may be oral or written;
b. If donation is in writing, simultaneous delivery of property donated is NOT required
regardless of value. Acceptance may be oral or written; or
c. If the value exceeds ₱5,000 the donation and acceptance must be in writing.
Simultaneous delivery of property donated is not required (CIVIL CODE, Art. 748). 2.
Immovables:
a. Must be in a public instrument specifying the property donated and the burdens
assumed by the donee, regardless of value;
b. Acceptance must be either:
i. In the same deed of donation; or
ii. In a separate instrument. In which case, the donor shall be notified thereof in
an authentic form, and this step shall be noted in both instruments (CIVIL
CODE, Art. 749).

Note: Under the Family Code, donation in consideration of marriage of present property must
comply with the rules of ordinary donation, while donation of future property must comply with
the formalities of a will (FAMILY CODE, Arts. 82-84).

(89) What is the effect of failure to comply with the formalities prescribed by law in a donation?
The purported donation is void. Unlike ordinary contracts, which are perfected by the
concurrence of the requisites of consent, object and cause, solemn contracts like donations of
immovable property are valid only when they comply with legal formalities. Absent the solemnity
requirements for validity, the mere intention of the parties and concurrence to the agreement will
 not give rise to a contract When the law requires that a contract be in some form to be valid, that
requirement is absolute and indispensable. Its non-observance renders the contract void and of
no effect (Patenia-Kinatac-an v. Patenia-Decena, G.R. No. 190057, October 17, 2022; M. Lopez
case).

Note: A defective notarization will strip the document of its public character and reduce it to a
private instrument. Thus, a defective notarization renders the donation of an immovable property

Page 33
invalid since the requirement that such contract must appear in a public instrument is absent
(Patenia-Kinatac-an v. Patenia-Decena, G.R. No. 190057, October 17, 2022; M. Lopez case).

PRESCRIPTION

(90) What are the prescriptive periods under the Civil Code?
The prescriptive periods under the Civil Code are as follows:
Actions Movable Immovabl
e

Action to recover (CIVIL CODE, Arts. 1140-1141) 8 years 30 years

from the
time
possessi
on is
lost

Foreclosure of Mortgage (CIVIL CODE, Art. 1142) 10 years

All other actions whose periods are not fixed in the Code Within 5 years from
(CIVIL CODE, Art. 1149) the time the right of
action accrues

1. Upon a written contract; 10 years from the time

the right of action
Note: A "writing" for the payment of money sued in an accrues
action, within the meaning of the ten-year statute of
limitations, is one which contains either an express
promise to pay or language from which a promise to pay
arises by fair implication (Alba v. Arollado, G.R. No.
237140; October 5, 2020; M. Lopez case).

2. Upon an obligation created by law; and

3. Upon an judgment (CIVIL CODE, Art. 1144).

1. Upon an oral contract; and 6 years

2. Upon a quasi-contract (CIVIL CODE, Art. 1145).

1. Upon an injury to the rights of the plaintiff (CIVIL CODE, 4 years

Art. 1146);
2. Upon quasi-delict (CIVIL CODE, Art. 1146);
3. Revoke or reduce donation based on the birth appearance
or adoption of a child (CIVIL CODE, Art. 763);
4. Revoke donation based on non-compliance with a
condition (CIVIL CODE, Art. 764);
5. Rescission (CIVIL CODE, Art. 1389, par. 1); and
6. Annul a contract (CIVIL CODE, Art. 1391, par.
1).

1. Forcible entry and detainer (CIVIL CODE, Art. 1 year

1147); 2. Defamation (CIVIL CODE, Art. 1147);
3. Recover possession de facto (CIVIL CODE, Art. 764); 4.
Revoke a donation on the ground of ingratitude (CIVIL
CODE, Art. 769);
5. Rescind or recover damages if immovable is sold with non
apparent burden or servitude (CIVIL CODE, Art. 1560); and
6. Enforce warranty of solvency in assignment of credits
(CIVIL CODE, Art. 1629).

(91) When is there an interruption of prescription of actions? (FDA)

The prescription of an action is interrupted in any of the three cases:
1. When the action is Filed before the court;
2. When there is a written extrajudicial Demand by the creditors; or
3. When there is any written Acknowledgment of the debt by the debtor (Alba v. Arollado,
G.R. No. 237140, October 5, 2020; M. Lopez case).

Page 34
 Note: Not all acts of acknowledgment of debt interrupt prescription. To produce such effect, the
acknowledgment must be written, so that payment if not coupled with a communication signed
by the payor, would not interrupt the running of the period of the prescription (Id.; M. Lopez
case).

(92) Regina and Gretchen entered into a verbal contract for the former to sell to the latter
petroleum products on credit, which is not evidenced by a formal written agreement. As
payment, Gretchen issued three checks which were subsequently dishonored on April 4,
2009. Are the three checks the kind of "writing" or "written agreement" contemplated by
law for the 10-year limitation to apply?
No. A "writing" for the payment of money sued in an action, within the meaning of the ten-year
statute of limitations, is one which contains either an express promise to pay or language from
which a promise to pay arises by fair implication. It must affirmatively appear that the promise of
payment was given by the language of the writing itself. Thus, Regina's right to collect a sum of
money
against
Gretchen
must be
enforced
within six
years
under
Article
1145 of
the Civil
Code.

Note: The
dishonor
of the
three
checks
resulted
in a
breach of
contract
for non-
payment.
It is at
this point
that the
right to
bring an
action for
collection
of a sum
of money
accrues.
Under
Article 1150 of the Civil Code, the prescriptive period for actions which have no special
provision ordaining otherwise shall be counted from the day they may be brought. It is the legal
possibility of bringing the action that determines the starting point for the computation of the
period of prescription (Alba v. Arollado, G.R. No. 237140, October 5, 2020; M. Lopez case).

(93) What is laches?

Laches has been defined as the failure or neglect, for an unreasonable and unexplained length
of time, to do that which, by exercising due diligence, could or should have been done earlier. It
is not concerned only with the mere lapse of time, but with the inequity caused by the relief
seeker's inaction (Rama v. Sps. Nogra, G.R. No. 219556, September 14, 2021; M. Lopez
case).

VI. LAND TITLES AND DEEDS

REGALIAN DOCTRINE

(94) What is the Regalian Doctrine?

The Regalian doctrine espouses that lands not appearing to be clearly under private ownership
are generally presumed to form part of the public domain belonging to the State. This general
rule admits of a single exception: native title to land. Claims of private ownership pursuant to
native title are presumed to have been held even before the Spanish conquest. Thus, lands
subject of native titles are deemed excluded from the mass of lands forming part of the public
domain. (Republic v. Pasig Rizal Co, In, G.R. No. 213207, February 15, 2022).

(95) Can all lands of public domain be alienated and disposed of by the State? No. Section 3,
 Article XII of the 1987 Constitution mandates that only lands classified as agricultural may be
declared alienable and susceptible of private ownership. It bears noting, however, that private
ownership contemplates not only ownership by private persons, but also ownership by the
State, provinces, cities, and municipalities in their private capacity (Republic v. Pasig Rizal Co,
In, G.R. No. 213207, February 15, 2022).

(96) In 1957, a Presidential Proclamation was issued excluding portions of the Fort Andres
Military Reservation and declaring the AFP Officers' Village to be disposed of in order to
provide housing for the AFP retired and active members. The proclamation also provided
an exclusionary clause wherein areas being used or earmarked for public or quasi-public
purposes shall not be disposed. In 1976, the Philippine Navy developed a part of the
village into a golf course. In 1996, the DENR awarded lots situated in the AFP Officers'
Village to Terry who was a former military officer. Terry found out that the Philippine
Navy and the Golf Club (PNGC) was already occupying the land. Terry filed an accion
reinvindicatoria against the PNGC. PNGC contends that: (1) the exclusionary clause
applies to the golf course because it is needed for public service, serving as a security
buffer and training

Page 35
ground and thus the land remains inalienable; and (2) the order of award in favor of Terry
is invalid. Rule on the contentions.
The first contention is untenable. Under the Public Land Act, the President, upon the
recommendation of the Secretary of Environment and Natural Resources, may designate by
proclamation any tract or tracts of land of the public domain as reservations for the use of the
Republic or any of its branches, or for quasi-public uses or purposes. The exclusionary clause
applies only to areas that are being used or earmarked for public or quasi-public purposes. Here,
the golf course did not yet exist at the time the Proclamation was issued in 1965. The golf course
was developed only in 1976. As such, the empty land, on which the golf course now stands,
remains part of the alienable and disposable public land of the AFP Officers' Village. The
exclusionary clause cannot comprehend the golf course which is inexistent at the time the
proclamation was issued. There is no basis to identify whether the empty land is being used for
public or quasi-public purposes. Thus, the land remains to be alienable and disposable public
land of the AFP Officers' Village.
 The
second

contention is also untenable. The case originated from an accion reinvindicatoria — or a suit to
recover possession of a parcel of land as an element of ownership. However, this proceeding is
not the proper forum to assail the DENR's orders of award. The Public Land Act explicitly
provides that any action for reversion to lands of public domain should be instituted before the
proper courts, and any objection to the application or concession may be filed before the proper
government administrative offices in observance with the doctrine of exhaustion of
administrative remedies (Philippine Navy Golf Club, Inc. v. Abaya, G.R. No. 235619, July 13,
2020; M. Lopez case).

NATIONALITY RESTRICTIONS ON LAND OWNERSHIP

(97) What is the rule on private corporations holding alienable lands of the public domain?
Private corporations or associations may not hold such alienable lands of the public domain
except by lease, for a period not exceeding 25 years, renewable for not more than 25 years, and
not to exceed 1,000 hectares in area (CONST. Art. XII, Sec. 3, Par. 1).

Note: The prohibition in the Constitution applies only to ownership of land. It does not extend to
immovable or real property as defined under Article 415 of the Civil Code (J.G. Summit Holdings
Inc., v. CA, G.R. No. 124293, January 31, 2005).

(98) The Philippine Reclamation Authority (PRA) and ABC Corp. entered into a Joint Venture
Agreement (JVA) to develop submerged areas of Manila Bay. The JVA was nullified by the
Supreme Court (SC) on the ground of violation of the constitutional prohibition on
alienation of natural resources and the acquisition of public domain land by private
corporations. ABC Corp. was allowed to recover from PRA costs incurred prior to the SC
Decision. A Compromise Agreement was agreed upon by PRA and ABC Corp. As
payment for the Php 1B money claim, PRA offered to transfer a portion of the reclaimed
land to ABC Corp.'s qualified assignee. Is the compromise agreement valid?
No, the compromise agreement is not valid. Section 3, Article XII of the 1987 Constitution
provides that private corporations "may not hold such alienable lands of the public domain
except by lease, for a period not exceeding twenty-five years, renewable for not more than
twenty-five years, and not to exceed one thousand, hectares in area." In this case, the
Compromise Agreement obliged PRA to transfer the reclaimed land to ABC Corp.'s qualified
assignee. Yet, this scheme grants ABC Corp. beneficial ownership or equitable title defined as
"a title derived through a valid contract or relation, and based on recognized equitable
principles; the right in the party, to whom it belongs, to have the legal title transferred to him."
Indeed, the provision in the Compromise Agreement allowing conveyance to the qualified
assignee clearly means that ABC Corp. will hold the reclaimed land other than by lease which
the constitutional ban seeks to avoid. Further, the stipulation presupposes that ABC Corp., as
an assignor, is qualified by law to exercise ownership of the land and transfer it to another party
(Central Bay Reclamation and Development Corp. v. COA, G.R. No. 252940, April 5, 2022; M.
Lopez case).
Page 36
REGISTRY OF PROPERTY

(99) What is the purpose of the Registry of Property?

The Registry of Property has for its object the inscription or annotation of acts and contracts
relating to the ownership and other rights over immovable property (CIVIL CODE, Art. 708). The
titles of ownership, or of other rights over immovable property, which are not duly inscribed or
annotated in the Registry of Property shall not prejudice third persons (CIVIL CODE, Art. 709).

(100) What is the purpose of registration?

The purpose of registration is merely to notify and protect the interests of strangers to a given
transaction, who may be ignorant thereof, and the non-registration of the deed evidencing said
transaction does not relieve the parties thereto of their obligations thereunder (STA. MARIA,
Property (2021), p. 516, citing Casica v. Villaseca, G.R. No. L-9590, April 30, 1957 [hereinafter
STA.
MARIA,

Property]).

Registration is not a mode of acquiring ownership. Registration does not vest title. It is only a
procedure to establish evidence of title over realty (AGCAOILI, Reviewer in Property
Registration and Related Proceedings (2022), p. 8 [hereinafter AGCAOILI, Reviewer in
Property Registration]).

TORRENS SYSTEM; CERTIFICATE OF TITLE

(101) What is the effect of registration under the Torrens System?

Registration under the Torrens system, not being a mode of acquiring ownership, does not
create or vest title. The Torrens certificate of title is merely evidence of ownership or title in the
particular property described therein (Casimiro Development, Corp. v. Mateo, G.R. No. 17585,
July, 27, 2011). Registration merely confirms ownership and does not create it (Heirs of Doronio
v. Heirs of Doronio, G.R. No. 169454, December 27, 2007) because registration is not a mode
of acquiring ownership.

ORIGINAL REGISTRATION

(102) Who may apply for land registration? (OPA)

The following may apply for original registration:
1. Those who by themselves or through their predecessors-in-interest have been in Open,
continuous, exclusive and notorious possession and occupation of alienable and
disposable lands of the public domain not covered by existing certificates of title or patents
under a bona fide claim of ownership for at least twenty (20) years immediately preceding
the filing of the application for confirmation of title except when prevented by war or force
majeure. They shall be conclusively presumed to have performed all the conditions
essential to a Government grant and shall be entitled to a certificate of title under this
section;
 2. Those who have acquired ownership of Private lands or abandoned riverbeds by right of
accession or accretion under the provisions of existing laws; and
3. Those who have acquired ownership of land in Any other manner provided for by law

Note: Where the land is owned in common, all the co-owners shall file the application

jointly.

Where the land has been sold under pacto de retro, the vendor a retro may file an application for
the original registration of the land: Provided, however, That should the period for redemption
expire during the pendency of the registration proceedings and ownership to the property is
consolidated in the vendee a retro, the latter shall be substituted for the applicant and may
continue the proceedings.

A trustee on behalf of the principal may apply for original registration of any land held in trust by
the trustee, unless prohibited by the instrument creating the trust (P.D. No. 1529, Sec.14 as
amended by R.A. 11573).

Page 37
(103) What is the mirror doctrine?
The mirror doctrine provides that every person dealing with registered land may safely rely on
the correctness of the certificate of title issued therefor and is in no way obliged to go beyond
the certificate to determine the condition of the property (Dy v. Aldea, G.R. No. 219500, August
9, 2017).

(104) Who may invoke the mirror doctrine?

Only an innocent purchaser for value may invoke the mirror doctrine. Every registered owner
and every subsequent purchaser for value in good faith holds the title to the property free from
all encumbrances except those noted in the certificate. As such, a defective title, or one the
procurement of which is tainted with fraud and misrepresentation — may be the source of a
completely legal and valid title, provided that the buyer is an innocent third person who, in good
faith, relied on the correctness of the certificate of title, or an innocent purchaser for value (Dy v.

Aldea, G.R. No. 219500, August 9, 2017).

(105) Who is an innocent purchaser for value?

 A purchaser in good faith and for value is one who buys the property of another without notice
that some other person has a right to or interest in such property and pays a full and fair price for
the same, at the time of such purchase, or before he has notice of the claims or interest of some
other person in the property. Under Section 32 of P.D. 1529, the definition of an innocent
purchaser for value has been expanded to include an innocent lessee, mortgagee, or other
encumbrancer for value (Heirs of Macalalad v. Rural Bank of Pola, Inc., G.R. No. 200899, June
20, 2018).

Every registered owner and every subsequent purchaser for value in good faith holds the title to
the property free from all encumbrances except those in the certificate (Dy v. Aldea, G.R. No.
219500, August 09, 2017). An innocent purchaser for value also has indefeasible rights over the
title (Macadangdang v. Martinez, G.R. No. 158682, January 31, 2005).

(106) Is the presence of good faith only at the time of the purchase or sale sufficient to be
deemed “purchasers in good faith and for value”?
For purchasers of registered lands to be considered as purchasers in good faith and for value,
they must remain in good faith “until they have dutifully registered the conveyance”. As it stands,
the good faith of a purchaser must be present not only at time of the purchase or sale, but until
the property bought has been duly registered. If prior to the registration of the conveyance, a
purchaser of a registered land discovers a claim or interest by a third person, or a defect in the
title of the seller, the good faith ceases to be present. The good faith during the purchase must
concur with the buyer's good faith at the time of registration (AFP Retirement and Separation
Benefits System v. Plastic King Industrial Corp., G.R. No. 231395, June 26, 2023).

CONFIRMATION OF IMPERFECT TITLES

(107) What is the required proof to establish the status of land as alienable and disposable? For
purposes of judicial confirmation of imperfect titles filed under P.D. No. 1529, a duly signed
certification by a duly designated DENR geodetic engineer that the land is part of alienable and
disposable agricultural lands of the public domain is sufficient proof that the land is alienable.
Said certification shall be imprinted in the approved survey plan submitted by the applicant in the
land registration court. The imprinted certification in the plan shall contain a sworn statement by
the geodetic engineer that the land is within the alienable and disposable lands of the public
domain and shall state the applicable Forestry Administrative Order, DENR Administrative
Order, Executive Order, Proclamations and the Land Classification Project Map Number
covering the subject land.

Should there be no available copy of the Forestry Administrative Order, Executive Order or
Proclamation, it is sufficient that the Land Classification (LC) Map Number, Project Number, and
date of release indicated in the land classification map be stated in the sworn statement
declaring that said land classification map is existing in the inventory of LC Map records of the
National Mapping and Resource Information Authority (NAMRIA) and is being used by the
DENR as land classification map (R.A. 11573, Sec. 7).

Page 38
SUBSEQUENT REGISTRATION

(108) What are the distinctions between an adverse claim and a notice of lis pendens?
The main distinctions between the two are as follows:
1. An adverse claim protects the right of a claimant during the pendency of a controversy
while a notice of lis pendens protects the right of the claimant during the pendency of the
action or litigation; and
2. An adverse claim may only be cancelled upon filing of a petition before the court which
shall conduct a hearing on its validity while a notice of lis pendens may be cancelled
without a court hearing (Valderama v. Arguelles, G.R. No. 223660, April 2, 2018).

NON-REGISTRABLE PROPERTIES

(109) Is there a
need for
an
express

government manifestation that the land constitutes patrimonial property before it can be
registered?
The answer must be qualified. Once property of public dominion is classified by the State as
alienable and disposable land of the public domain, it immediately becomes open to private
acquisition, since "alienable lands of the public domain form part of the patrimonial property of
the State." The operative act which converts property of public dominion to patrimonial property
is its classification as alienable and disposable land of the public domain, as this classification
precisely serves as the manifestation of the State's lack of intent to retain the same for some
public use or purpose.

However, and to be clear, where the property subject of the application had been previously
utilized by the State for some public purpose, proof of conversion requires the establishment of a
positive fact — the abandonment by the State of its use and the consequent withdrawal of the
property from the public dominion. To establish this positive fact, it becomes incumbent upon the
applicant to present an express government manifestation that the land subject of his application
already constitutes patrimonial property, or is no longer retained for some public purpose
(Republic v. Pasig Rizal Co., Inc., G.R. No. 213207, February 15, 2022).

DEALINGS WITH UNREGISTERED LAND

(110) Can a sale of an unregistered land be valid?

The sale of unregistered land is valid between the parties. No deed, conveyance, mortgage,
lease, or other voluntary instrument affecting land not registered under the Torrens system shall
be valid, except as between the parties thereto, unless such instrument shall have been
recorded in the office of the Register of Deeds for the province or city where the land lies (PD
1529, Sec. 113).

VII. WILLS AND SUCCESSION

TESTAMENTARY SUCCESSION

(111) What are the requisites for a notarial will to be valid? (W2-SAMPAL)
A notarial will is valid when the following requisites are complied with:
1. In Writing;
2. Attested and subscribed by 3 or more credible Witnesses in the presence of the testator
and of one another;

Note: It is sufficient if the witnesses are together for the purpose of witnessing the
execution of the will, and in a position to actually see the testator write, if they choose to
do so (Jaboneta v. Gustilo, G.R. No. 1641, January 19, 1906). The true test of presence
of the testator and the witnesses in the execution of a will is not whether they actually saw
each other sign, but whether they might have been seen each other sign, had they
chosen to do so, considering their mental and physical condition and position with relation
to each other at the moment of inscription of each signature (Nera v. Rimando, G.R. No.
L-5971, February 27, 1911).

Page 39
3. Subscription – Subscribed at the end thereof by the testator himself or by testator’s name
written by some other person in his presence and by his express direction;
4. Attestation clause executed by the witnesses;

Note: The attestation refers to the act of three or more witnesses themselves who certify
to the execution of the will before them, and to the manner of its execution (Kucskar v.
Sekito, Jr., G.R. No. 237449, December 2, 2020; M. Lopez Case).

The attestation shall state the number of pages used upon which the will is written, and
the fact that the testator signed the will and every page thereof, or caused some other
person to write his name, under his express direction, in the presence of the instrumental
witnesses, and that the latter witnessed and signed the will and all the pages thereof in the
presence of the testator and of one another (CIVIL CODE, Art. 805).

5. Marginal

signature – All of the pages are signed, except the last, on the left margin by: a. The
testator or the person requested by him to write his name, in the presence of the
witnesses; and
b. The instrumental witness, in the presence of the testator and of one another;

Note: Failure to have the marginal signatures of the testator and of the witnesses, when
 needed, is a fatal defect. However, if the whole will, including the attestation clause,
consists of only one page, the marginal signatures are not needed since these would be
purposeless as the page already has at the end thereof, all the necessary signatures (3
PARAS, Civil Code of the Philippines Annotated, (2021), p. 93-94) [hereinafter 3 PARAS,
Succession]).

6. Page numbering – All the pages are numbered correlatively in letters placed on the upper
part of each page;
7. Acknowledgment – Properly acknowledged before a notary public by the testator and the
said witnesses; and

Note: The acknowledgment is the act of the one who executed the will in going to a
competent officer and declaring that the will is [his/her] act or deed. The subscribing or
attesting witnesses are likewise required to acknowledge the will before the notary public
(Kucskar v. Sekito, Jr., G.R. No. 237449, December 2, 2020; M. Lopez Case).

8. Executed in a Language or dialect known to the testator (CIVIL CODE, Arts. 804-806).

Note: The law does not require that the language or dialect be known to the witnesses.
The witness does not have to know the contents of the will; thus, he does not have to
understand the language concerned (3 PARAS, Succession, supra at 128).

(112) What is the rule on substantial compliance with respect to a notarial will? In the absence of
bad faith, forgery, or fraud, or undue and improper pressure and influence, defects and
imperfections in the form of attestation or in the language used therein shall not render the will
invalid if it is proved that the will was in fact executed and attested in substantial compliance
with all the requirements of article 805 (CIVIL CODE, Art. 809).

Substantial compliance is acceptable where the purpose of the law has been satisfied, the
reason being that the solemnities surrounding the execution of wills are intended to protect the
testator from all kinds of fraud and trickery but are never intended to be so rigid and inflexible as
to destroy the testamentary privilege (Alvarado v. Gaviola, G.R. No. 74695, September 14,
1993).

(113) Aida, a naturalized American citizen, executed a will in California, where she also died. A
petition for the probate of the will was filed in the Philippine courts. Because of failure to
plead and prove the foreign law, the probate court applied Philippine laws in determining
compliance with the formalities of a will. In the execution of the will, two witnesses were
present. The witnesses did not sign each and every page. The attestation clause did not
state the total number of pages. The will was not acknowledged before a notary public.
Should the will be admitted to probate?

Page 40
 No, the will should be disallowed for failure to comply with the legal formalities required by
Philippine law. Pursuant to Articles 805 and 806 of the Civil Code, a notarial will must comply
with solemnities including attestation, subscription and acknowledgment. The attestation refers
to the act of three or more witnesses themselves who certify to the execution of the will before
them, and to the manner of its execution. The acknowledgment is the act of the one who
executed the will in going to a competent officer and declaring that the will is [his/her] act or
deed. The subscribing or attesting witnesses are likewise required to acknowledge the will
before the notary public. These requirements are indispensable for the validity of the will. In this
case, only two witnesses attested its execution. The witnesses did not sign on each and every
page of the will. The attestation clause failed to state the total number of pages. Furthermore,
Aida and the witnesses did not acknowledge the will before a notary public. Thus, the will
should not have been admitted to probate as there was no substantial compliance with the
formalities required by law (Kucskar v. Sekito, Jr., G.R. No. 237449, December 2, 2020; M.
Lopez Case).

(114) What is the

doctrine of dependent
relative revocation?
If a

testator revokes a will with a present intention of making a new one immediately and as a
substitute, and the new one is not made, or, if made, fails to take effect for any reason, the
failure of the new testamentary disposition, upon whose validity the revocation depends, is
equivalent to the non-fulfillment of a suspensive condition, and hence prevents the revocation of
the original will. The theory on which this principle is predicated is that the testator did not intend
to die intestate (Vda. de Molo v. Molo, G.R. No. L-2538, September 21, 1951).

(115) When is there preterition? (CTS)

There is preterition when:
1. The heir omitted is a Compulsory heir in the direct line;
2. The omission is complete and Total in character (that the omitted heir does not and has not
received anything at all from the testator by any title whatsoever); and
3. The compulsory heir omitted Survives the testator (JURADO, Succession (2009), p. 174
[hereinafter JURADO, Succession]).

(116) What are the effects of preterition?

The effects of preterition are:
1. It annuls the institution of heir;
2. The devises and legacies are valid insofar as they are not inofficious;
3. If the omitted compulsory heir should die before the testator, the institution shall be
effectual, without prejudice to the right of representation (CIVIL CODE, Art. 854); and 4.
Intestate succession ensues (Nuguid v. Nuguid, G.R. No. L-23445, June 23, 1966).

INTESTATE SUCCESSION

(117) What is the rule regarding the barrier between legitimate and the illegitimate family (iron
curtain rule)?
The iron-curtain rule states that an illegitimate child has no right to inherit ab intestato from the
 legitimate children and relatives of his father or mother; nor shall such children or relatives
inherit in the same manner from the illegitimate child (CIVIL CODE, Art. 992). However,
children, regardless of the circumstances of their births, are qualified to inherit from their direct
ascendants—such as their grandparent—by their right of representation, since both marital and
nonmarital children are blood relatives of their parents and other ascendants (Aquino v. Aquino,
G.R. Nos. 208912 & 209018, December 7, 2021).

PROVISIONS COMMON TO TESTATE AND INTESTATE SUCCESSION

(118) What is disinheritance? (LV-CUTS-RED)

It is the act of the testator in depriving a compulsory heir of his legitime for causes expressly
stated by law (CIVIL CODE, Art. 915). The requisites are the following:
1. Cause must be expressly stated by Law;
2. Effected only through a Valid will;
3. Cause must be Certain and true;
4. Unconditional;
5. Total or complete;

Page 41
6. Cause must be Stated in the will itself;
7. Will must not have been Revoked;
8. For an Existing cause; and
9. The heir disinherited must be Designated in such a manner that there can be no doubt as
to his identity (3 PARAS, Succession, supra at 380-381).

(119) What are the effects of disinheritance?

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

constitutes the legitime (JURADO, Succession, supra at 343).

VIII. OBLIGATIONS AND CONTRACTS

GENERAL PROVISIONS
(120) Can there be a criminal liability but no civil liability?
Yes. Where there are no damages to be compensated or there is no private person injured by
the crime, no civil liability arises on the part of the offender (Occena v. Icamina, G.R. No. 82146,
January 22, 1990). Criminal liability will give rise to civil liability only if the felonious act or
omission results in damage or injury to another and is the direct and proximate cause thereof
(Romero v. People of the Philippines, G.R. No. 167546, July 17, 2009).

Note: As a rule, every person criminally liable is also civilly liable. However, an acquittal will not
bar a civil action in the following cases: (1) where the acquittal is based on reasonable doubt as
only preponderance of evidence is required in civil cases; (2) where the court declared that the
accused's liability is not criminal, but only civil in nature; and (3) where the civil liability does not
arise from, or is not based upon the criminal act of which the accused was acquitted. (Collado v.
Dela Vega, G.R. No. 219511 (Resolution), December 2, 2020; M. Lopez case).

NATURE AND EFFECT OBLIGATIONS

(121) What is fault or negligence?

Negligence is a comparative and relative concept highly dependent on the surrounding facts.
Negligence is the omission to do something that a reasonable man, guided upon those
considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of
something which a prudent man and a reasonable man could not do. It is want of care required
by the circumstances. Negligence is, therefore, a relative or comparative concept highly
dependent on the surrounding facts. Its application depends upon the situation the parties are in,
and the degree of care and vigilance which the prevailing circumstances reasonably require
(Angeles v. COA, G.R. No. 228795, December 1, 2020; M. Lopez case).

(122) Roxy, the revenue collection officer of the Office of the Treasurer of the Municipality of
San Mateo, was on board a service vehicle en route to the office after withdrawing payroll
money from the bank. She was accompanied only by the cashier and the municipal
driver. They used the service vehicle driven by the municipal driver in going to and from
the bank. They followed the existing practice of securing travel pass and the procedure
in withdrawing the payroll money. They were robbed by armed men. She applied for relief
from accountability for the lost money. The Commission on Audit denied the request,
stating that Roxy was fell short of the necessary diligence in handling government funds
when she travelled without a security escort. Should the request for relief be granted?
Yes, the request for relief should be granted. Negligence is a comparative and relative concept
highly dependent on the surrounding facts. Its application depends upon the situation the parties
are in, and the degree of care and vigilance which the prevailing circumstances reasonably
require. In this case, the officers exercised the reasonable care and caution that an ordinary
prudent person would have observed in a similar situation. They have performed what is
humanly possible under the circumstances.

Page 42
 The violent robbery, which resulted in injuries to the driver and the death of the cashier, could
not have been prevented. Furthermore, the absence of security escort alone does not indicate
negligence. Reasonable men govern their conduct by the circumstances which are before them
or known to them. They can be expected to take care only when there is something before them
to suggest or warn of danger. Here, there is nothing that could have prompted them to request a
security escort for that particular transaction (Angeles v. COA, G.R. No. 228795, December 1,
2020; M. Lopez case).

DIFFERENT KINDS OF OBLIGATIONS

(123) What are the instances when the debtor loses the benefit of the period? (IF-IF-VA)
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;

Note: The insolvency need not be judicially declared in an insolvency proceeding.

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;

Note: Should the loss of the securities be by reason of a fortuitous event, there must be
total disappearance to deprive the debtor of the benefit of the term.

4. When the debtor Violates any undertaking, in consideration of which the creditor agreed to
the period; or
5. When the debtor Attempts to abscond (CIVIL CODE, Art. 1198).

(124) What are the distinctions between joint and solidary obligations?
Joint Obligations Solidary Obligations

As to The demand by one creditor Each one of the solidary creditors

demand by produces the effects of default only may do whatever may be useful to
the with respect to the creditor who the others, but not anything which
creditor demanded and the debtor on may be prejudicial to the latter
whom the demand was made (CIVIL CODE, Art. 1212). Hence,
each solidary creditor may
constitute the debtor in default
 As to 1. In case of a joint divisible If there was fault on the part of any
breach of obligation, the other debtors one of the solidary debtors, all shall
obligation cannot be compelled to answer be responsible to the creditor, for
by reason for the liability of others as the the price and the payment of
of debt is divided into as many damages and interest, without
the act of equal shares as there are prejudice to their action against the
one of the debts (CIVIL CODE, Art. guilty or negligent debtor (CIVIL
debtors 1208); or CODE, Art. 1221 Par. 2)
2. In case of a joint indivisible
obligation, it gives rise to
indemnity for damages from
the time any one of the
debtors does not comply with
his undertaking. The debtors
who may have been ready to
fulfill their promises shall NOT
contribute to the indemnity
beyond the corresponding
portion of the price of the thing
or

Page 43
Joint Obligations Solidary Obligations

of the value of the service in

which the obligation consists
(CIVIL CODE, Art. 1224)

As to If one of the joint debtors should be When one of the solidary debtors
insolvency insolvent, the others shall not be cannot, because of his insolvency,
of debtor liable for his share (CIVIL CODE, reimburse his share to the debtor
Art. 1209) paying the obligation, such share
shall be borne by all his co-debtors,
in proportion to the debt of each
(CIVIL CODE, Art. 1217, Par. 3)

As to The vices of each obligation arising A solidary debtor may avail himself
personal from the personal defect of a of all defenses which personally
defenses particular debtor or creditor do not belong to the others only as
affect the obligation or the right of regards that part of the debt for
the others which the latter are responsible
(CIVIL CODE, Art. 1222)

As to Presumed by law (CIVIL CODE, Not presumed. Must be expressly

presumpti Art. 1208). stipulated by the parties, or when
on by law the law or the nature of the
obligation requires solidarity
(CIVIL CODE, Art. 1207)

As to Proportionate part of the entire Obliged to pay the entire obligation

liability of debt.
each
debtor

As to right Each creditor, if there are several, Each creditor has the right to
of the is entitled only to a proportionate demand from any of the debtors,
creditor to part of the credit the payment or fulfillment of the
the entire obligation.
fulfillment
of the
obligation

EXTINGUISHMENT OF OBLIGATIONS

(125) What is dacion en pago?

Dation in payment (adjudication or dacion en pago) is where property is alienated to the
creditor in satisfaction of a debt in money. It shall be governed by the law of sales (CIVIL
CODE, Art. 1245). The requisites of dacion en pago are the following: (PDA)
1. There must be Performance of the prestation in lieu of payment (animo solvendi) which
may consist in the delivery of a corporeal thing or a real right or a credit against a third
person;
 2. There must be some Difference between the prestation due and that which is given in
substitution (aliud pro alio); and
3. There must be an Agreement between the creditor and the debtor that the obligation is
immediately extinguished by reason of the performance of a prestation different from that
due (Lo v. KJS Eco-Formwork System Phil., Inc., G.R. No. 149420, October 8, 2003).

(126) What is condonation?

Condonation or remission of debt is an act of liberality, by virtue of which, without receiving any
equivalent, the creditor renounces the enforcement of the obligation, as a result of which it is
extinguished in its entirety or in that part or aspect of the same to which the remission refers
(Dizon v. Court of Tax Appeals, G.R. No. 140944, April 30, 2008).

The requisites for a remission or condonation to result in the total or partial extinguishment of the
obligation: (GADCIF)
1. It must be Gratuitous;
2. It must be Accepted by the obligor;

Page 44
 3. The obligation must be Demandable;
4. Parties must have the Capacity;
5. It must not be Inofficious (governed by rules regarding inofficious donations - CIVIL CODE,
Arts. 750-752 and 771); and
6. It must comply with the Formalities prescribed for donation (CIVIL CODE, Arts. 748-749) if
remission is express (CIVIL CODE, Art. 1270).

(127) What is compensation?

Compensation is the extinguishment in the concurrent amount of the obligations of those
persons who are reciprocally debtors and creditors of each other (4 PARAS, Civil Code of the
Philippines Annotated (2021), p.460 [hereinafter PARAS, Obligations and Contracts).

The requisites for legal compensation are: (PS-DL-NoNo)

1. There must be two Parties, who, in their own right, are PRINCIPAL creditors and

PRINCIPAL debtors of each other (CIVIL CODE, Art. 1279) except in case of a guarantor
(CIVIL CODE, Art. 1280);
2. Both debts must consist in a Sum of money, or if the things due are consumables, they
must be of the same kind and quality (CIVIL CODE, Art. 1279);
3. Both debts must be Due (CIVIL CODE, Art. 1279), except voluntary compensation (CIVIL
CODE, Art. 1282);
4. Both debts must be Liquidated and demandable (CIVIL CODE, Art. 1279); 5. There must be
No retention or controversy commenced by third persons over either of the debts and
communicated in due time to the debtor (CIVIL CODE, Art. 1279); and 6. The compensation
must Not be prohibited by law (CIVIL CODE, Arts. 1287-1288).

ESSENTIAL REQUISITES OF CONTRACTS AND PRINCIPLES OF CONTRACTS

(128) Does a party’s failure to prove payment of the contract price render the contract void for
lack of consideration?
Non-payment of an obligation does not render a contract void, in which case, the remedy of the
injured party is simply demand fulfillment, or rescission of the contract under Article 1191 of the
Civil Code. Failure to pay consideration is different from lack of consideration; actual payment of
the obligation is not one of the three (3) essential requisites of a valid contract (Chingkoe v.
Chingkoe, G.R. No. 244076, March 16, 2022; M. Lopez case).

(129) What are the kinds of simulated contracts?

Simulation of a contract may be absolute or relative. The former takes place when the parties do
not intend to be bound at all; the latter, when the parties conceal their true agreement (CIVIL
CODE, Art. 1345).

(130) Spouses Khen and Farah were the registered owners of a parcel of land. Upon the
request of their mother, Khen signed an undated Deed of Sale over the property in favor
 of his brother, Thalnie. According to Khen, his mother even asked him to assure Thalnie
that a house on the land will eventually be the latter's property. After 5 years of
occupation, Thalnie purchased the subject property from Khen. Both parties then signed
the Deed of Sale before a notary public. Khen, however, refused to surrender the
Certificate of Title and mortgaged the property. Was the Deed of Sale absolutely
simulated?
No. The main characteristic of an absolute simulation is that the apparent contract is not really
desired or intended to produce a legal effect or alter the parties' juridical situation.

Here, Khen fully intended to be bound by the Deed of Sale. Khen conceded that there was such
a Deed of Sale, but only that he and his wife were induced by his mother to draw up the
document and sign it. Furthermore Khen’s mother even asked him to assure his brother that the
house in question will eventually be the latter's property. These circumstances support the true
nature of the document (Chingkoe v. Chingkoe, G.R. No. 244076, March 16, 2022; M. Lopez
case).

(131) What is the principle of autonomy of contracts?

Under the principle of autonomy of contracts, parties to an agreement are allowed to establish
such stipulations, clauses, terms, and conditions as they may deem convenient, provided that
these are not contrary to law, morals, good customs, public order, or public policy. Thus, the

Page 45
principle of autonomy in contracts is not absolute (Manila Credit Corp. v. Viroomal, G.R. No.
258526, January 11, 2023; M. Lopez case).

(132) What is a contract of adhesion?

In a contract of adhesion, one imposes a ready-made contract to the other whose sole
participation is either to accept or reject the agreement. The parties do not bargain on equal
footing in the execution of this kind of contract given that the debtor is limited "to take it or leave
it" option and there is no room for negotiation. However, such contract is not entirely prohibited.
The one adhering is free to give his consent inasmuch as he is also free to reject it completely
(Quiambao v. China Banking Corp., G.R. No. 238462, May 12, 2021; M. Lopez case).

REAL VS. CONSENSUAL CONTRACTS

(133) What are the classifications of a contract according to their perfection?

There are two classifications of a contract according to their perfection:
Consensual contract Real contract

A consensual contract is one which is A real contract is one which is perfected

perfected by mere consent or upon meeting only upon delivery of the object of the
of the minds (RABUYA, Obligations and contract (RABUYA, Obligations and
Contracts (2019), p. 368-369 [hereinafter Contracts, supra at 368-369).
RABUYA, Obligations and Contracts]).

The essential requisites of a consensual The essential requisites of a real contract

contract are the following: are the following:
1. Consent of the contracting parties; 2. 1. Consent of the contracting parties; 2.
Object certain which is the subject matter Object certain which is the subject matter
of the contract; of the contract;
3. Cause of the obligation which is 3. Cause of the obligation which is
established (CIVIL CODE, Art. 1318) established; and
4. Delivery (CIVIL CODE, Art. 1316).

Examples of consensual contract: Contract Examples of real contract: Commodatum,

of sale, Contract of lease Deposit, Pledge

FORMS OF CONTRACTS

(134) What is the rule on the form of contracts?

The general rule is that contracts are consensual. They are perfected by mere consent (CIVIL
CODE, Art. 1315). No specific form is required so long as the elements of consent, object, and
consideration are present (BALANE, Jottings and Jurisprudence in Civil Law (Obligations and
Contracts) (2020), p. 664 [hereinafter BALANE, Obligations and Contracts]). Thus, contracts
shall be obligatory, in whatever form they may have been entered into, provided all the essential
requisites for their validity are present (CIVIL CODE, Art. 1356).

The exceptions to the rule that no specific form is required for contracts are the following:
(VEE) 1. Contracts in which a specific form is essential for Validity;
 2. Contracts in which a specific form is required for Enforceability; and
3. Contracts which are required to be in a public document, not for validity nor for
enforceability, but for Effectivity against third persons or for registration (BALANE,
Obligations and Contracts, supra at 665).

REFORMATION OF INSTRUMENTS AND INTERPRETATION OF CONTRACTS

(135) What are the requisites to avail of reformation? (MIM)

An action for reformation of instrument may prosper only upon the concurrence of the following
requisites:
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

Page 46
 3. The failure of the instrument to express the true intention of the parties is due to Mistake,
fraud, inequitable conduct or accident (Banico v. Stager, G.R. No. 232825, September 16,
2020; M. Lopez case).

The onus probandi is upon the party who insists that the contract should be reformed (Id.; M.
Lopez case).

(136) Lydia owned a property situated in Boracay Island. Lydia offered to sell the entire lot to
Ulysses who only agreed to buy an area suitable for building a beach resort. Accordingly,
they executed a Deed of Sale over a certain portion of the lot. Ulysses took possession of
the flat terrain. However, Ulysses discovered that the land described in the Deed of Sale
refers to the elevated and rocky portion and not the flat area which he bought and
occupied. Ulysses filed against Lydia an action for specific performance before the RTC
so that Lydia be ordered to execute an amended contract reflecting all the stipulations
between
the
parties.
Is

reformation proper?
Yes, because there was a meeting of the minds between the parties to the contract but the deed
did not express their true intention due to mistake in the technical description of the lot. An action
for reformation of instrument may prosper only upon the concurrence of the following requisites:
(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. The
onus probandi is upon the party who insists that the contract should be reformed.

First, there was a meeting of the minds when Lydia conveyed a portion of the lot to Ulysses who
accepted it for a valuable consideration. Second, the written instrument did not express the true
intention of the parties. Ulysses bought an area suitable for building a beach resort, and Lydia
promised to rectify the erroneous description of the lot in the Deed of Sale. Third, there is a
mistake in identifying the exact location of the lot which caused the failure of the instrument to
disclose the parties' real agreement. This is an error occasioned by the failure of the parties to
describe the subject property, which is correctible by reformation and does not indicate the
absence of the principal object as to render the contract void (Banico v. Stager, G.R. No.
232825, September 16, 2020; M. Lopez case).

(137) What are the rules in the interpretation of contracts?

If the terms of a contract are clear and leave no doubt upon the intention of the contracting
parties, the literal meaning of its stipulations shall control. Where the language of a contract is
plain and unambiguous, its meaning should be determined without reference to extrinsic facts
or aids. The intention of the parties must be gathered from that language, and from that
language alone. Stated differently, where the language of a written contract is clear and
unambiguous, the contract must be taken to mean that which, on its face, it purports to mean,
unless some good reason can be assigned to show that the words used should be understood
in a different sense. The process of interpreting a contract requires the court to make a
preliminary inquiry as to whether the contract before it is ambiguous. A contract provision is
 ambiguous if it is susceptible of two reasonable alternative interpretations. Where the written
terms of the contract are not ambiguous and can only be read one way, the court will interpret
the agreement as a matter of law (Privatization and Management Office v. Nocom, G.R. No.
250477, November 9, 2020; M. Lopez case).

DEFECTIVE CONTRACTS

(138) What are the instances when a contract is unenforceable? (NSI)

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;

Note: Unauthorized contracts are governed by Article 1317 and the principles of agency.

2. Those that do not comply with the Statute of Frauds as set forth in Article 1403 of the Civil
Code; and

Page 47
Note: In those cases, an agreement made shall be unenforceable by action, unless the
same, or some note or memorandum, thereof, be in writing, and subscribed by the party
charged, or by his agent; evidence, therefore, of the agreement cannot be received
without the writing, or secondary evidence of its contents.

3. Those where both parties are Incapable of giving consent to a contract (CIVIL CODE, Art.
1403).

(139) How may unenforceable contracts be ratified?

Ratification of unenforceable contracts may be made expressly or impliedly.
1. In case of an unauthorized contract, it may be ratified expressly or impliedly, by the person
on whose behalf it has been executed, before it is revoked by the other contracting party
(CIVIL CODE, Art. 1317);
2. In case of contracts under the Statute of Frauds, they are ratified impliedly by: a.

The failure to object to the presentation of oral evidence to prove the same; b. By the
acceptance of benefits under them (CIVIL CODE, Art. 1405);

Note: The Statute of Frauds applies only to executory contracts and not to those which
have been executed either fully or partially (Heirs of Godines v. Demaymay, G.R No.
 230573, June 28, 2021). The basis of this rule is the fact that in consummated contracts,
there is already a ratification of the contract by acceptance of benefits within the meaning
of Article 1405 (Heirs of Villeza v. Aliangan, G.R. Nos. 244667-69, December 2, 2020).
This is called the doctrine of partial performance (Ringor v. Ringor, G.R. No. 147863,
August 13, 2004).

3. In case of contracts when both parties are incapable of giving consent, the express or
implied ratification by the parent, or guardian, as the case may be, of one of the
contracting parties shall give the contract the same effect as if only one of them were
incapacitated. Consequently, the contract becomes voidable. If ratification is made by the
parents or guardians, as the case may be, of both contracting parties, the contract shall
be validated from the inception (CIVIL CODE, Art. 1407).

IX. CONTRACT OF SALE

NATURE AND FORM

(140) How is a contract of sale distinguished from a contract to sell?

Contract of Sale Contract to Sell

As to the Gives rise to reciprocal demandable Only gives rise to a reciprocal

effect of obligations: suspensive conditional
perfection of 1. On seller – to transfer ownership obligation on the seller to
contract and deliver possession of the thing transfer ownership only when
2. On buyer – to pay a price certain the buyer has paid the price in
(CIVIL CODE, Art. 1458) full

As to Title passes to the buyer upon Ownership will pass only upon
transfer of delivery of the thing sold (CIVIL fulfillment of certain condition
ownership CODE, Art, 1496) such as full payment of the
price (CIVIL CODE, Art. 1478)

As to effect Non-payment of an obligation does It is not a breach of the

of non- not render a contract void, in which contract but an event that
payment of case, the remedy of the injured party prevents the obligation of the
price is simply demand fulfillment, or vendor to convey the title from
rescission of the contract under acquiring a binding force
Article 1191 of the Civil Code. (Manuel Uy & Sons, Inc., v.
(Chingkoe v. Chingkoe, G.R. No. Valbueco, Inc., G.R. No.
244076, March 16, 2022; M. Lopez 179594, September 11, 2013).
case).

Page 48
Contract of Sale Contract to Sell

Note: The failure to pay in full the

purchase price stipulated in a deed of
sale does not ipso facto grant the
seller the right to rescind the
agreement. Unless otherwise
stipulated by the parties, rescission is
allowed only when the breach of the
contract is substantial and
fundamental to the fulfillment of the
obligation. (Vda. de Mistica v.
Spouses Naguiat, G.R. No. 137909,
December 11, 2003).

As to 1. Specific performance; or Action to recover possession –

remedy in 2. Rescission (CIVIL CODE Art. 1191) if the buyer refuses to
case of non surrender the thing to the
payment of seller
price

As to Vendor has lost and cannot recover Title remains with the vendor if
ownership the ownership until and unless the the vendee does not comply
of vendor contract of sale itself is resolved and with the condition precedent
set aside
 As to Vendee becomes the owner of the Vendor needs to execute
execution of property upon delivery of the thing another instrument conveying
sale sold the property to the vendee
document (e.g., deed of absolute sale)

As to Consent is present Consent will be present only

presence of upon fulfillment of condition
consent stipulated

(141) What is an option contract?

An option contract is an agreement granting a privilege to buy or sell within an agreed time and
at a determined price. It is a separate and distinct contract from that which the parties may enter
into upon the consummation of the option. It must be supported by consideration (Equatorial
Realty Dev. Corp v. Mayfair Theater, Inc, G.R. No. 106063, November 21, 1996).

(142) What is earnest money?

Earnest money is something of value given by the buyer to the seller to show that the buyer is
really in earnest, and to bind the bargain. It is actually a partial payment of the purchase price
and is considered as proof of the perfection of the contract (DE LEON, Comments and Cases
on Sales and Lease (2021), p. 134 [hereinafter DE LEON, Sales and Lease]).

(143) Differentiate earnest money in a contract of sale and in a contract to sell. Earnest money is
ordinarily given in a perfected contract of sale (Racelis v. Sps. Javier, G.R. No. 189609,
January 29, 2018). Whenever earnest money is given in a contract of sale, it shall be
considered as part of the price and as proof of the perfection of the contract (CIVIL CODE, Art.
1482).

In a contract to sell, earnest money is generally intended to compensate the seller for the
opportunity cost of not looking for any other buyers. It is a show of commitment on the part of the
party who intimates his or her willingness to go through with the sale after a specified period or
upon compliance with the conditions stated in the contract to sell (Racelis v. Sps. Javier, G.R.
No. 189609, January 29, 2018).

CAPACITY TO BUY OR SELL

(144) Who are disqualified to enter a contract of sale?

The following are disqualified from entering into a contract of sale:
1. Those who are disqualified either by absolute incapacity, relative incapacity and other
special disqualifications (CIVIL CODE, Arts. 1327 and 1329);

Page 49
2. Sale between guardians and wards - the contract is void and not merely voidable. The
prohibition exists only when the guardianship exists (CIVIL CODE, Art. 1491); 3. Sale between
agents and principals (CIVIL CODE, Art. 1491);
4. Sale between executors and administrators of estate of the deceased (CIVIL CODE, Art.
1491);
5. Sale involving property of the government (CIVIL CODE, Art. 1491); and
6. Sale of property in litigation (CIVIL CODE, Art. 1491). The prohibition applies only to a sale
or assignment to the lawyer by a client of the property which is the object of litigation.

(145) Jose filed a civil case against Concepcion for the reconveyance of property originally
owned by Fe (subject property). He alleged that he was the sole heir of Fe for being the
latter's first cousin by blood, while Concepcion was not related by blood to the deceased.
Atty. PS, assisted by his father Atty. BS, filed a complaint-in-intervention on behalf of the
Maguigads, alleging that they were the true and rightful sole heirs of Fe.
 During
the

pendency of the case, Concepcion executed a Deed of Confirmation of Attorney's Fees

(Deed) in favor of Atty. BS and transferred to him 10 hectares of the subject property.
This was received by Atty. BS as compensation for the legal services rendered during
the lifetime of Fe. Atty. BS, for himself and on behalf of his son Atty. PS, applied for
retention of 10 hectares of the subject property before the Department of Agrarian
Reform (DAR), which was granted. Concepcion likewise applied for the retention of 7
hectares of the subject property.

Later, a Compromise Agreement (Agreement) was agreed upon by the Heirs of Jose,
Concepcion, and the Maguigads, whereby the subject property was partitioned among
them. The Agreement was approved by the court. On the same day, Concepcion executed
Deeds of Absolute Sale covering a portion in the subject property in favor of Atty. PS,
which consisted of the 7 hectares of the subject property retained by Concepcion. The
Heirs of Jose filed an application for retention of the portion awarded to them by virtue of
the Compromise Agreement before the DAR. However, the application was not granted as
the portion of the property was already retained by Concepcion, Atty. BS, and Atty. PS.
May Atty. PS acquire a portion of the subject property?
No. Atty. PS acquired a portion of the subject land in violation of Article 1491 of the Civil Code
which provides for the prohibition against lawyers in acquiring properties of their clients which
were subject of a litigation that they took part in. The prohibition, which rests on considerations
of public policy and interests, is intended to curtail any undue influence of the lawyer upon his
client on account of his fiduciary and confidential relationship with him.

Here, Atty. PS acquired by purchase from Concepcion a portion of the contested property as
evidenced by the Deeds of Absolute Sale executed on the same day that the Compromise
Agreement was judicially approved. It can be gleaned from this that Atty. PS has had interest
over the property even while the case was pending and immediately grabbed the opportunity to
buy it upon approval of the Compromise Agreement so as to avoid the prohibition under Article
1491. The fact that the property was bought at the same date as the approval of the
Compromise Agreement shows the propensity of Atty. PS to circumvent the mandate of the law
which is that Atty. PS, as a lawyer, is prohibited from acquiring, either by purchase or
assignment, the property and rights of his client that were involved in a litigation in which he
took part in. Further, Atty. PS
violated Article 1491 of the Civil Code when he and his father, Atty. BS, illegally retained about 7
hectares of the land subject of the litigation while the case was still pending (Melad-Ong v.
Sabban, A.C. No. 10511, January 4, 2022).

(146) Who are persons specially disqualified by law to enter a contract of sale? The following
persons are specially disqualified by law to enter a contract of sale: 1. Aliens who are
disqualified to purchase private agricultural lands (CONST. Art. XII, Secs. 3 and 7);
2. Unpaid seller having a right of lien or having stopped the goods in transit is prohibited from
buying the goods either directly or indirectly in the resale of the same at public/private sale
which he may make (CIVIL CODE, Art. 1533, par. 5; Art. 1476, par. 4);
3. Officer holding the execution or deputy cannot become a purchaser or be interested directly
or indirectly on any purchase at an execution (RULES OF COURT, Rule 39, Sec. 21); and

Page 50
 4. In sale by auction, seller cannot bid unless notice has been given that such sale is subject
to a right to bid on behalf of the seller (CIVIL CODE, Art. 1476).

DOUBLE SALES

(147) What is the rule on double sales for movables?

The rule on double sales for movables are:
1. Ownership is acquired by the vendee who first takes possession in good faith; 2. In the
absence of possession, preference should be given to the first buyer (prius tempore potior
jure) (CIVIL CODE, Art. 1544).

(148) What is the rule on double sales for immovables?

The rule on double sales for immovables are:
1. The ownership shall
belong to the first
registrant in good faith;

Note: In
Heirs of
Gonzales
v.
Spouses
Basas,
the SC
elucidated
that

purchasers must continuously possess their status as buyers in good faith from the time they
acquired the property until they register the property under their name. Thus, they must both
be buyers and registrants in good faith (G.R. No. 206847, June 15, 2022).

2. If there is no such inscription, to the first possessor in good faith; and

3. In the absence thereof, the buyer who presents the oldest title in good faith. (CIVIL CODE,
Art. 1544).

(149) What are the requisites for double sales to apply? (VS-CSR)
The requisites for double sales to apply are:
1. There must be 2 or more Valid sales;
2. The 2 or more sales must pertain to exactly the same Subject matter;
3. The 2 or more buyers at odds over the rightful ownership must each represent Conflicting
interests;
4. The 2 or more buyers at odds over the rightful ownership must each have bought from the
very same Seller (decedent to heir applies); and
5. With land, the same must be Registered under the Torrens System (CIVIL CODE, Art.
1544).

EFFECTS OF LOSS OF THING SOLD

(150) Who bears the risk of loss?

“Res perit domino” is a Latin term which literally means, “the thing perishes with the owner”.
Under the doctrine of res perit domino, which is now covered under Article 1504 of the Civil
Code, “unless otherwise agreed, the goods remain at the seller’s risk until the ownership therein
is transferred to the buyer, but when the ownership therein is transferred to the buyer the goods
are at the buyer’s risk whether actual delivery has been made or not.”
 When the loss Who bears risk of loss
occurred

Before perfection The seller and not the one who intends to purchase it bears the loss
in accordance with the principle that the thing perishes with the
owner. Res perit domino applies because there is no delivery or
transfer of ownership yet (Roman v. Grimalt, G.R. No. L-2412, April
11, 1906).

Upon perfection The party who owns it at the time of perfection bears the risk of loss.
Res perit domino applies because the contract is void or inexistent
(CIVIL CODE, Art. 1409, Par.3).

Note: If at the time the contract of sale is perfected, the thing which is
the object of the contract has been entirely lost, the contract shall be
without any effect (CIVIL CODE, Art. 1493 Par. 1).

Page 51
When the loss Who bears risk of loss
occurred

After delivery The buyer bears the risk of loss following the general rule of res perit
domino, i.e., the thing perishes with the owner (CIVIL CODE, Art.
1504).

RECTO LAW

(151) What are the remedies of the seller under the Recto Law? (FCF)
Under Article 1484 or the Recto Law, in a contract of sale of personal property the price of which
is payable in INSTALLMENTS, the vendor may exercise any of the following remedies: 1. Exact
Fulfillment of the obligation, should the vendee fail to pay;
2. Cancel the sale, should the vendee's failure to pay cover two or more installments; OR 3.
Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the
vendee's
failure to
pay cover
two or
more

installments. In this case, he shall have no further action against the purchaser to recover any
unpaid balance of the price. Any agreement to the contrary shall be void (CIVIL CODE, Art.
1484).
 Note: The remedies under Article 1484 are alternative, not cumulative, in that the exercise of
one would bar the exercise of the others (Delta Motor Sales Corp. v. Niu Kim Duan, G.R. No.
61043, September 2, 1992).

(152) What are the requisites for the application of the Recto Law? (CP-IF)
In order for the Recto Law to apply, the following requisites must concur:
1. There is a Contract of Sale;
2. The sale involves Personal property;
3. The purchase price is payable on Installments; and
4. In the case of the second and third remedies, that there has been a Failure to pay two or
more installments (CIVIL CODE, Art. 1484).

Note: The rules and limits under Article 1484 apply to contracts purporting to be leases of
personal property with option to buy, when the lessor has deprived the lessee of the possession
or enjoyment of the thing (CIVIL CODE, Art. 1485).

(153) When is Recto Law inapplicable? (Pe-MoReTo)

The Recto Law is inapplicable in the following instances:
1. Sale of Personal property payable in straight terms - When there is an initial payment and
the balance is payable in the future (Levy Hermanos, Inc., v. Gervacio, G.R. No. 46306,
October 27, 1939);
2. Sale or Mortgage of real estate;
3. Action for Replevin; and
4. Contracts To sell of movables (VILLANUEVA & TIANSAY, Law on Sales (2016), p. 349
[hereinafter VILLANUEVA & TIANSAY, Law on Sales]).

(154) Will the Recto Law apply if the price is to be paid partly in cash and partly in one term?
No. The law is aimed at those sales where the price is payable in several installments, for,
generally, it is in these cases that partial payments consist in relatively small amounts,
constituting thus a great temptation for improvident purchasers to buy beyond their means.
There is no such temptation where the price is to be paid in cash, or, as in the instant case,
partly in cash and partly in one term, for, in the latter case, the partial payments are not so small
as to place purchasers off their guard and delude them to a miscalculation of their ability to pay
(Levy Hermanos v. Lazaro Blas Gervacio, G.R. No. L-46306, October 27, 1939).

MACEDA LAW

(155) What are the four requisites in order that the seller may cancel the contract pursuant to
R.A. No. 6552 or Maceda Law?
Section 4 of R.A. No. 6552 requires four (4) conditions before the seller may actually cancel the
contract thereunder:
1. The defaulting buyer has paid less than two (2) years of installments;

Page 52
 2. The seller must give such defaulting buyer a (60)-day grace period, reckoned from the date
the installment became due;
3. If the buyer fails to pay the installments due at the expiration of the said grace period, the
seller must give the buyer a notice of cancellation and/or a demand for rescission by
notarial act; and
4. The seller may cancel the contract only after the lapse of thirty (30) days from the buyer's
receipt of the said notice of cancellation and/or demand for rescission by notarial act
(Pryce Properties Corp. v. Nolasco, Jr., G.R. No. 203990, August 24, 2020).

Note: The transaction or contract must involve the sale or financing of real estate on installment
payments, including residential condominium apartments but excluding industrial lots,
commercial buildings and sales to tenants under R.A. No. 3844, as amended by R.A. No. 6389
(Sec. 3, R.A. No. 6552).

(156) In what instances

does Maceda Law
apply? (C2F)
The Maceda Law
applies in the
following instances:
1. Contract of
sale;
2. Contract to
sell; and

3. Financing transactions (VILLANUEVA & TIANSAY, Law on Sales, supra at 382-383).

RIGHTS OF UNPAID SELLER

(157) What are the remedies available to an unpaid seller? (SLR2)

The remedies available to an unpaid seller are:
1. Right of Stopping the goods in transitu in case of insolvency of the buyer (CIVIL CODE,
Arts. 1526, 1530);
2. Lien on the goods or right to retain them for the price while in his possession (CIVIL CODE,
Arts. 1526-1529);
3. Right of Resale (CIVIL CODE, Arts. 1526, 1533);
4. Right to Rescind the sale (CIVIL CODE, Arts. 1526, 1534).

CONVENTIONAL REDEMPTION AND LEGAL REDEMPTION

(158) Discuss the concept of a pacto de retro sale.

The essence of a pacto de retro sale is that title and ownership of the property sold are
immediately vested in the vendee a retro, subject only to the resolutory condition of repurchase
by the vendor a retro within the stipulated period. Once the vendor a retro fails to redeem the
property within the agreed period, absolute ownership is vested upon the vendee a retro by
operation of law (Sps. Velarde v. Heirs of Candari, G.R. No. 190057, October 17, 2022; M.
Lopez case).

(159) What is conventional redemption? (PEONU)

Conventional redemption is the right which the vendor reserves to himself, to reacquire the
property sold provided he returns to the vendee:
1. Price of the sale;
2. Expenses of the contract;
 3. Any Other legitimate payments made therefore;
4. Necessary expenses made on the thing sold; and
5. Useful expenses made on the thing sold (CIVIL CODE, Arts. 1601 and 1616).

(160) What is the right of legal redemption? (PDA)

The right of legal redemption is the right to be subrogated, upon the same terms and conditions
stipulated in the contract, in the place of one who acquires a thing by Purchase, Dation in
payment, or Any other transaction whereby ownership is transferred by onerous title (CIVIL
CODE, Art. 1619).

(161) What are the instances where legal redemption may be exercised?
The following are the instances where legal redemption may be
exercised:
1. Sale of an heir of his hereditary rights to a stranger (CIVIL CODE, Art. 1088);

Page 53
2. Exercise of the co-owner’s right to redeem in case the other co-owner/s sell his/their shares
(CIVIL CODE, Art. 1620);
3. Exercise of the owner of the adjoining rural land to redeem (CIVIL CODE, Art. 1621); and
4. Sale of adjacent small urban lands brought only for speculation (CIVIL CODE, Art. 1622).

(162) Within what period must the right of pre-emption or redemption regulated by Articles
1620 to 1622 be exercised?
The right must be exercised within 30 days from the notice in writing by the prospective vendor,
or by the vendor, as the case may be (CIVIL CODE, Art. 1623).

(163) A parcel of land is registered under the Heirs of Donato, Sr., namely Erlinda, Marion,
Donato, Jr., and Isabel. In 1992, Donato, Jr. sold to Jay his 1/4 undivided share over the
lot. Erlinda, Marion, and Isabel (the “Other Heirs”) only found out about the sale during

barangay conciliation proceedings conducted on July 25, 2007 and September 9, 2007.
After the conciliation proceedings, Jay initiated the survey of the property for partition.
On September 26, 2007, Donato, Jr. gave the Other Heirs a copy of the Deed of Sale, after
being confronted by the Other Heirs. On October 16, 2007, the Other Heirs filed a
complaint for annulment of sale and redemption and consigned the full redemption price
on October 26, 2007. Did the Other Heirs properly exercise their right of redemption by
filing the complaint on October 26, 2007?
Yes. As a rule, the required written notice by the seller is mandatory and indispensable for the
 30-day redemption period to commence. The explicit requirement of written notice may only be
dispensed with upon a showing that the co-owners already had sufficient knowledge of the sale
and they were guilty of laches in the exercise of their redemption right. Absent these factors, the
strict letter of the law must apply—the written notice from the seller remains to be an
indispensable requirement to commence the running of the 30-day redemption period. The
rationale behind the mandatory written notice is to remove all uncertainties as to the sale, its
terms, and its validity, and to quiet any doubts that the alienation is not definitive. Thus, mere
knowledge of the fact of sale is insufficient to serve the purpose of the law.

In this case, the Other Heirs cannot be faulted for exercising her redemption right upon receipt
of the Deed of Absolute Sale because it is only at that time when all the uncertainties as to the
sale, its terms, and validity were settled. Jay did not demonstrate any physical act of dominion
over the property that would have evoked the Other Heirs' inquiry on the alienation of Donato,
Jr.'s share. There was nothing that could have given the Other Heirs the knowledge, or at least
an indication to elicit inquiry, that Donato, Jr. had already sold his share in the co-owned
property. Furthermore, the Other Heirs are not guilty of laches. They seasonably took steps to
verify the sale and its particulars. Prelude to their right of redemption, they took the initiative to
bring the parties together before the barangay to remove any question relating to the sale.
However, they were refused to be given a copy of the Deed of Absolute Sale, as well as the
pertinent details of the sale. (Rama v. Sps. Nogra, G.R. No. 219556, September 14, 2021; M.
Lopez case).

EQUITABLE MORTGAGE

(164) What are the requisites for presumption of equitable mortgage? (CS)
For a presumption of an equitable mortgage to arise, the requisites are:
1. That the parties entered into a Contract denominated as a contract of sale with a right of
repurchase or purporting to be an absolute sale; and
2. That their intention was to Secure an existing debt by way of mortgage of the property (DE
LEON, Sales and Lease, supra at 505-506).

X. CONTRACT OF LEASE

RIGHTS AND OBLIGATIONS OF THE LESSOR AND LESSEE

(165) What are the requisites of an implied new lease? (ENE)

An implied new lease or tacita reconduccion will set in when the following requisites are found to
exist:
1. The term of the original contract of lease has Expired;
2. The lessor has not given the lessee a Notice to vacate; and

Page 54
 3. The lessee continued Enjoying the thing leased for 15 days with the acquiescence of the
lessor (Samelo v. Manotok Services, Inc., G.R. No. 170509, June 27, 2012).

(166) What are the modes of termination of a lease? (ELWR)

A lease contract is terminated under any of the following instances:
1. Expiration of the term of the lease contract (CIVIL CODE, Art. 1669);

Note: If the lease was made for a determinate time, it ceases upon the day fixed, without
the need of a demand (Privatization and Management Office v. Nocom, G.R. No. 250477,
Novermber 9, 2020; M. Lopez case).

2. Total Loss of the thing leased (CIVIL CODE, Art. 1655);

3. Will of the parties (CIVIL CODE, Arts. 1676 and 1677); and
4. Rescission of contract of lease
on account of substantial breach
(CIVIL CODE, Art. 1659).

(167) Marla, as
lessee,
and BRB
Office, as
lessor,
executed
a lease
contract
involving
a 5-
storey
building.
The
contract
of lease
covers a
period of
20 years
to

commence on October 1, 1993, and to end on September 30, 2013. The contract may be
renewed for another 20 years upon agreement of the parties, provided the lessee notifies
in writing the lessor within 90 days before its expiration. In 1995, the COA disallowed the
lease because Marla did not submit a duly approved construction/rehabilitation plan.
BRB Office refused to accept rental payments. This caused a dispute which ultimately
led to the execution of a compromise agreement, which was approved by the court on
February 12, 1998. The amended contract of lease provided for the extension of the lease
period corresponding to the time covered from refusal to accept rental payments on
March 7, 1995, up to the approval of the compromise agreement which is 2 years, 11
months, and 3 days. BRB Office informed Marla that the contract of lease will expire on
September 3, 2016. On September 6, 2016, Marla notified BRB Office of her intention to
renew the contract for another 20 years. Did Marla timely exercise her right to renew the
lease contract?
No. Marla only notified the BRB Office of the renewal of the contract on September 6, 2016, or
three days after its expiration on September 3, 2016. Thus, there was no longer any lease which
could be renewed. Under Art. 1669 of the Civil Code, if the lease was made for a determinate
time, it ceases upon the day fixed, without the need of a demand.

In this case, the suspended period when tacked to the original date of expiration (September 30,
2013), results on the date September 3, 2016. Similarly, the remaining period of the contract (18
years, 6 months and 21 days), when added to the date it was ratified (February 12, 1998), falls
on the same date September 3, 2016. Otherwise, to reckon the expiration date on February 11,
2018, will give Marla a period of possession for more than 20 years which is contrary to the tenor
of the compromise agreement which ratified the provisions of the amended contract of lease
(Privatization and Management Office v. Nocom, G.R. No. 250477, November 9, 2020; M.
Lopez case).

SUBLEASE AND ASSIGNMENT OF LEASE

(168) When can a lessee sublet the thing leased?
When there is no express prohibition, the lessee may sublet the thing leased, in whole or in part,
without prejudice to his responsibility for the performance of the contract toward the lessor
(CIVIL CODE, Art. 1650).

(169) Distinguish subleasing and assignment of lease.

In a sublease, there are two leases and two distinct judicial relations although intimately
connected and related to each other, unlike in a case of assignment of lease, where the lessee
transmits absolutely his right, and his personality disappears; there only remains in the juridical
relation two persons, the lessor and the assignee who is converted into a lessee (Marimperio
Compaña Naviera v. CA, G.R. L-40234, December 14, 1987).

Page 55
(170) Under what instances may the lessor bring an action directly against the sublessee? The
lessor may bring an action directly against the sublessee under the following instances: 1. Without
prejudice to his obligation toward the sublessor, the sublessee is bound to the lessor for all acts which
refer to the use and preservation of the thing leased in the manner stipulated between the lessor and
the lessee (CIVIL CODE, Art. 1651); and
2. The sublessee is subsidiarily liable to the lessor for any rent due from the lessee. However,
the sublessee shall not be responsible beyond the amount of rent due from him, in
accordance with the terms of the sublease, at the time of the extrajudicial demand by the
lessor. Payments of rent in advance by the sublessee shall be deemed not to have been
made, so far as the lessor's claim is concerned, unless said payments were effected in
virtue of the custom of the place (CIVIL CODE, Art. 1652).

XI. AGENCY

(171) When is the special power of attorney necessary? (PECWEM-L2-B2OCARO)

The special power of attorney is necessary in the following cases:
1. To make such Payments as are not usually considered as acts of administration; 2. To
Effect novations which put an end to obligations already in existence at the time the agency
was constituted;
3. To Compromise, to submit questions to arbitration, to renounce the right to appeal from
judgment, to waive objections to the venue of an action or to abandon a prescription
 already acquired;
4. To Waive any obligation gratuitously;
5. To Enter into any contract by which the ownership of an immovable is transmitted or
acquired either gratuitously or for a valuable consideration;
6. To Make gifts, except customary ones for charity or those made to employees in the
business managed by the agent;
7. To Loan or borrow money, unless the latter act be urgent and indispensable for the
preservation of the things which are under administration;
8. To Lease any real property to another person for more than one year;
9. To Bind the principal to render some service without compensation;
10. To Bind the principal in a contract of partnership;
11. To Obligate the principal as a guarantor or surety;
12. To Create or convey real rights over immovable property;
13. To Accept or repudiate an inheritance;
14. To Ratify or recognize obligations contracted before the agency; and
15. Any Other act of strict dominion (CIVIL CODE, Art. 1878).

(172) What are the rules to be followed when an agent exceeds his authority or effects a
contract outside the scope of his authority?
Where the agent has exceeded his power, the principal is not bound thereby (CIVIL CODE, Art.
1910). A contract entered into in the name of another by one who has no authority or legal
representation or who has acted beyond his powers shall be unenforceable (CIVIL CODE, Art.
1317).

Exceptions: The principal is still bound in the following instances: (RAG)

1. When the principal Ratifies the contract expressly and tacitly (CIVIL CODE, Art. 1910); 2.
When the principal Allowed the purported agent to act as if he had full powers (CIVIL CODE,
Art. 1911); and
3. When the principal has revoked the agency but the third party has acted in Good faith
without notice of revocation (CIVIL CODE, Art. 1931).

Note: If the agent contracts in the name of the principal, exceeding the scope of his authority,
and the principal does not ratify the contract, it shall be void if the party with whom the agent
contracted is aware of the limits of the powers granted by the principal. In this case, however,
the agent is liable if he undertook to secure the principal’s ratification (CIVIL CODE, Art. 1898).

Insofar as third persons are concerned, an act is deemed to have been performed within the
scope of the agent’s authority, if such act is within the terms of the power of attorney, as written,

Page 56
 even if the agent has in fact exceeded the limits of his authority according to an understanding
between the principal and the agent (CIVIL CODE, Art. 1900).

(173) When is the principal not liable for expenses incurred by the agent? As a general rule, the
principal is liable for the expenses incurred by the agent (CIVIL CODE, Art. 1912).

Exceptions: (CF-KS)
1. If the agent acted in Contravention of the principal’s instructions, unless the latter should
wish to avail himself of the benefits derived from the contract;
2. When the expenses were due to the Fault of the agent;
3. When the agent incurred them with Knowledge that an unfavorable result would ensue, if
the principal was not aware thereof; and
4. When it was Stipulated that the expenses would be borne by the agent, or that the latter
would
be
allowed
only a
certain
sum
(CIVIL
CODE,
Art.
1918).

XII. CREDIT
TRANSACTIONS

MUTUUM AND COMMODATUM

(174) What is a credit card?

A credit card
is a form of
credit

accommodation granted by the credit card company to the card holder for the latter's use in the
purchase of goods and services (Rico v. Union Bank of the Philippines, G.R. No. 210928.
February 14, 2022).

Note: Although the relationship between the card company and the card holder is that of
creditor debtor which exists upon the acceptance by the cardholder of the terms of the card
membership agreement, this creditor-debtor relationship arises only after the credit card issuer
has approved the cardholder's purchase request (Rico v. Union Bank of the Philippines, G.R.
No. 210928. February 14, 2022).

(175) What are the guidelines on the imposition of legal interest?

With regard to an award of interest in the concept of actual and compensatory damages, the
rate of interest, as well as the accrual thereof, is imposed, as follows:
A. In obligations consisting of loans or forbearances of money, goods or credit: 1. The
compensatory interest due shall be that which is stipulated by the parties in writing as
the penalty or compensatory interest rate, provided it is not unconscionable. In the
absence of a stipulated penalty or compensatory interest rate, the compensatory
interest due shall be that which is stipulated by the parties in writing as the conventional
interest rate, provided it is not unconscionable. In the absence of a stipulated penalty or
a stipulated conventional interest rate, or if these rates are unconscionable, the
compensatory interest shall be the prevailing legal interest rate prescribed by the
Bangko Sentral ng Pilipinas. Compensatory interest, in the absence of a stipulated
reckoning date, shall be computed from default, i.e., from extrajudicial or judicial
demand, until full payment.
2. Interest on conventional/monetary interest and stipulated compensatory interest shall
accrue at the stipulated interest rate (compounded interest) from the stipulated
reckoning point or, in the absence thereof, from extrajudicial or judicial demand until
full payment, provided it is not unconscionable. In the absence of a stipulated
compounded interest rate or if this rate is unconscionable, the prevailing legal
 interest rate prescribed by the Bangko Sentral ng Pilipinas shall apply from the time
of judicial demand until full payment.

B. In obligations not consisting of loans or forbearances of money, goods or credit:

1. For liquidated claims:
The compensatory interest due shall be that which is stipulated by the parties in writing
as the penalty or compensatory interest rate, provided it is not unconscionable. In the
absence of a stipulated penalty or compensatory interest rate, or if these rates are
unconscionable, the compensatory interest shall be at the rate of 6%. Compensatory

Page 57
interest, in the absence of a stipulated reckoning date, shall be computed from default,
i.e., from extrajudicial or judicial demand, until full payment.

a. Interest on stipulated compensatory interest shall accrue at the stipulated

interest rate (compounded interest) from the stipulated reckoning point or in
the absence thereof, from extrajudicial or judicial demand until full payment,
provided it is not unconscionable. In the absence of a stipulated compounded
interest rate or if this rate is unconscionable, legal interest at the rate of 6%
shall apply from the time of judicial demand until full payment.

2. For unliquidated claims:

Compensatory interest on the amount of damages awarded may be imposed in the
discretion of the court at the rate of 6% per annum. No compensatory interest,
however, shall be adjudged on unliquidated claims or damages until the demand can
be established with reasonable certainty. Thus, when such certainty cannot be so

reasonably established at the time the demand is made, the interest shall begin to run
only from the date of the judgment of the trial court (at which time the quantification of
damages may be deemed to have been reasonably ascertained) until full payment.
The actual base for the computation of the interest shall, in any case, be on the
principal amount finally adjudged (Lara's Gifts & Decors, Inc. vs. Midtown Industrial
Sales, Inc. (Resolution), G.R. No. 225433, September 20, 2022).

(176) In just compensation cases, should the difference between the final amount as adjudged
by the court and the initial payment made by the government earn interest? Yes, the
difference — which is part and parcel of the just compensation due to the property owner —
should earn legal interest as a forbearance of money. The delay in the payment of just
compensation is a forbearance of money and, as such, is necessarily entitled to earn interest.
The interest involved in just compensation cases is not consensual in nature, or that stipulated in
 signed agreements between contracting parties. The interest to which the landowner is entitled
runs as a matter of law and follows as a matter of course from the right of the landowner to be
placed in as good a position as money can accomplish as of the date of the taking. (Republic v.
Tamparong, Jr., G.R. No. 232169, March 8, 2023; M. Lopez case).

(177) What is the effect if the interest rate in a contract of loan is unconscionable? If the interest
rate in a contract of loan is unconscionable, iniquitous, unconscionable and exorbitant, the
same must be equitably reduced. Thus, a stipulated interest of 5.5% per month on a loan was
reduced to 12% per annum in consonance with justice and fair play (Medel v. CA, G.R. No.
131622, November 27, 1998).

Note: While the contracting parties may depart from the legal interest rate, any deviation
therefrom must be reasonable and fair. If the stipulated interest for a loan is more than twice the
prevailing legal rate of interest, it is for the creditor to prove that this rate is justified under the
prevailing market conditions. The willingness of the debtor in assuming an unconscionable rate
of interest is inconsequential to its validity.

Stipulations authorizing the imposition of iniquitous or unconscionable interest are contrary to

morals, if not against the law. Under Article 1409 of the Civil Code, these contracts are inexistent
and void from the beginning. They cannot be ratified nor the right to set up their illegality as a
defense be waived. The unconscionable interest rate is therefore, nullified and is deemed not
written in the contract of loan. It must be emphasized that, based on Article 1420 of the Civil
Code, the obligation to pay the principal and the valid monetary interest subsists as this can be
separated from the void interest rates and charges (Manila Credit Corp. v. Viroomal, G.R. No.
258526, January 11, 2023; M. Lopez case).

Additional note: Generally, the nullity of the unconscionable interests and charges does not
affect the terms of the real estate mortgage. The creditor's right to foreclose the mortgage
remains, and such right can be exercised upon the failure of the debtors to pay the debt due
(Id.; M. Lopez case).

Page 58
DEPOSIT

(178) What is the nature of the contract for rent of safety deposit boxes?
A contract for rent of safety deposit boxes is not an ordinary contract of lease of things but a
special kind of deposit; hence, it is not to be strictly governed by the provisions on deposit. It
cannot be characterized as an ordinary contract of lease under Article 1643 of the Civil Code
because the full and absolute possession and control of the safety deposit box was not given to
the joint renters. The guard key of the box remains with the bank; without this key, neither of the
renters could open the box. On the other hand, the bank could not likewise open the box without
the renter’s key (CA Agro-Industrial Development Corp. v. CA, G.R. No. 90027, March 3, 1993).

(179) Are deposits of money in banks and similar institutions, such as savings deposits and
current account deposits, contracts of depositum?
No. Deposits of money in banks and similar institutions, such as savings deposits and current
account
deposits
are in the
nature of
a simple
loan or
mutuum
(The

Metropolitan Bank and Trust Company v. Rosales, G.R. No. 183204, January 13, 2014). In fact,
fixed, savings, and current deposits of money in banks and similar institutions are governed by
the provisions concerning simple loan (CIVIL CODE, Art. 1980).

GUARANTY AND SURETYSHIP

(180) What obligations may be secured by a guaranty?

A guaranty cannot exist without a valid obligation. Nevertheless, a guaranty may be
constituted: 1. To guarantee the performance of a voidable, or an unenforceable contract;
2. To guarantee the performance of a natural obligation (CIVIL CODE, Art. 2052); 3. As
security for future debts, the amount of which is not yet known (CIVIL CODE, Art. 2053); and
4. Over conditional obligations (CIVIL CODE, Art. 2053).

(181) What are the rights and benefits of a guarantor? (EDIS-GC)

The following are the rights of a guarantor:
1. Benefit of Excussion (CIVIL CODE, Art. 2058);

Note: The benefit of excussion is the right in which the guarantor cannot be compelled to
pay the creditor unless the latter has exhausted all the properties of the principal debtor
and has resorted to all the legal remedies against such debtor (CIVIL CODE, Art. 2058). It
is not applicable to a contract of suretyship (CIVIL CODE, Arts. 2047, Par. 2 and 2059,
Par. 2).

2. Benefit of Division (CIVIL CODE, Art. 2065);

Note: Should there be several guarantors of only one debtor and for the same debt, the
obligation to answer for the same is divided among all. The creditor cannot claim from the
guarantors except the shares which they are respectively bound to pay (CIVIL CODE, Art.
 2065).

3. Right of Indemnity or reimbursement (CIVIL CODE, Art. 2066);

4. Right to Subrogation (CIVIL CODE, Art. 2067);
5. Right of Guarantor to proceed against debtor before payment (CIVIL CODE, Art. 2071);
and
6. Right to Contribution of a guarantor who pays if there is solidary liability (CIVIL CODE, Art.
2073).

(182) Distinguish surety and guaranty.

Guaranty Surety

As to A guarantor is the insurer of the A surety is an insurer of the debt, and

What is solvency of the debtor and thus binds he obligates himself to pay when the
Insured himself to pay if the principal is unable insurer does not pay
to pay

Page 59
Guaranty Surety

As to A guarantor’s liability depends upon an A surety assumes the liability as a

Liability independent agreement to pay the regular party to the undertaking
obligation if the primary debtor fails to
do so

As to A guarantor assumes only a A surety is an original promisor

Assumpti collateral undertaking and debtor from the beginning
on of
Liability

As to Secondarily liable Primarily liable

Extent of
Liability

As to A guarantor is not bound to take notice A surety is ordinarily held to know

Knowledge of the non-performance of his principal every default of his principal
of Non
performan
ce of the
Principal

As to A guarantor is not liable unless notified A surety will not be discharged either by
Discharge of the default of the principal the mere indulgence of the creditor of
for Lack of the principal or by want of notice of the
Notice default of the principal

As to The guarantors are released from their Cannot claim release under Art. 2080
Release obligation whenever by some act of the of the Civil Code (DE LEON, Credit,
from creditor they cannot be subrogated to supra at 394, citing Bicol Savings v.
Obligation the rights, mortgages, and preference Guinhawa, G.R. No. 62415, August
of the latter (CIVIL CODE, Art. 2080) 20, 1990)

(DE LEON, Comments and Cases on Credit Transactions (2016), p. 296-297 [hereinafter DE LEON,
Credit]).

REAL ESTATE MORTGAGE

(183) What is a contract of real mortgage?

A real mortgage is a contract whereby the debtor secures to the creditor the fulfillment of a
principal obligation, specially subjecting to such security immovable property or real rights over
immovable property in case the principal obligation is not complied with at the time stipulated
(DE LEON, Credit, supra at 473).

Note: A mortgage is merely an accessory agreement and does not affect the principal contract
of loan. The liability on the principal contract of the loan however subsists notwithstanding the
illegality of the mortgage. Indeed, where a mortgage is not valid, the principal obligation which it
guarantees is not thereby rendered null and void (Strong Fort Warehousing Corp. v. Banta, G.R.
Nos. 222369 and 222502, November 16, 2020; M. Lopez case).
(184) Explain the doctrine of mortgagee in good faith.
Under the doctrine of mortgagee in good faith, despite the fact that the mortgagor is not the
owner of the mortgaged property, his title being fraudulent, the mortgage contract and any
foreclosure sale arising therefrom are given effect by reason of public policy. This is based on
the rule that all persons dealing with property covered by a Torrens Certificate of Title, as
buyers or mortgagees, are not required to go beyond what appears on the face of the title. The
public interest in upholding the indefeasibility of a certificate of title, as evidence of the lawful
ownership
of the land or of any encumbrance thereon, protects a buyer or mortgagee who, in good faith,
relied upon what appears on the face of the certificate of title (Jimenez v. Jimenez, Jr., G.R. No.
228011, February 10, 2021; M. Lopez case).

Page 60
(185) What are the requisites for the applicability of the doctrine of mortgagee in good faith?
(NT-MR2)
The doctrine of mortgagee in good faith applies when the following requisites concur,
namely: 1. The mortgagor is Not the rightful owner of, or does not have valid title to, the
property; 2. The mortgagor succeeded in obtaining a Torrens title over the property;
3. The mortgagor succeeded in Mortgaging the property to another person;
4. The mortgagee Relied on what appears on the title and there exists no facts and
circumstances that would compel a reasonably cautious man to inquire into the status of
the property; and
5. The mortgage contract was Registered (Id.; M. Lopez case).

(186) Jennifer, Reynaldo, and Amor inherited a lot from their deceased father, Nicanor. A Deed
of Donation was allegedly executed by the mother in favor of Reynaldo. Reynaldo

mortgaged the property in favor of Violeta as security for a loan. The mortgage was
registered on the certificate of title of the lot. After learning about the mortgage, Amor
registered her affidavit adverse claim which was annotated on the certificate of title.
Subsequently, after foreclosure sale of the property, the title was ultimately consolidated
in favor of Violeta. Does the doctrine of mortgagee in good faith still apply even if Violeta
had knowledge of the adverse claim prior to the foreclosure sale?
Yes. A subsequent lien or encumbrance annotated at the back of a certificate of title of a
foreclosed property will not affect the rights of a purchaser in a foreclosure sale because such
sale retroacts to the date of the registration of the mortgage, making the sale prior in time to the
lien or encumbrance. The foreclosure sale retroacts to the date of registration of the mortgage
because it is incidental to the fulfilment of the mortgagor's obligation in the mortgage contract
upon his default. In turn, the purchaser in a foreclosure sale essentially derives his right from the
previously registered mortgage.

In this case, the adverse claim that was annotated after the registered mortgage in favor of
Violeta cannot prevail over the mortgagees' rights as mortgagees in good faith and purchasers
in the foreclosure sale. Being a mortgagee in good faith, Violeta has a superior lien over that of
Amor, and their right to foreclose is reserved. Her knowledge of the adverse claim is of no
moment because her right as a mortgagee in good faith extends up to the time of the
foreclosure sale and in her capacity as a purchaser. (Id.; M. Lopez case).

Note: Furthermore, the nullity of the mortgagor's certificate of title does not automatically carry
with it the nullity of a registered mortgage if the mortgagee acted in good faith. Once the
mortgagor defaulted in the fulfillment of his obligation, the mortgagee in good faith can still cause
the foreclosure of the mortgage. In such case, the purchaser in the foreclosure sale acquires the
right of the mortgagee in good faith, making the sale prior in time as against any subsequent lien
or encumbrance. (Id.; M. Lopez case).

(187) What is a blanket mortgage or dragnet clause?

 A "blanket mortgage clause" or "dragnet clause" subsumes all debts of past or future origins and
makes additional funds available to a borrower without the need to execute separate security
documents, thus, saving time, costs, and other resources (Quiambao v. China Banking Corp.,
G.R. No. 238462, May 12, 2021; M. Lopez case).

Note: As a general rule, a mortgage liability is usually limited to the amount mentioned in the
contract. However, the amounts named as consideration in a contract of mortgage do not limit
the amount for which the mortgage may stand as security if from the four corners of the
instrument the intent to secure future and other indebtedness can be gathered. Alternatively,
while a real estate mortgage may exceptionally secure future loans or advancements, these
future debts must be specifically described in the mortgage contract (Panacan Lumber Co. v.
Solidbank Corp., G.R. No. 226272. September 16, 2020).

(188) Daniel and Elena executed a real estate mortgage ("REM") over a parcel of land to secure
a loan obligation with China Bank. The REM was amended several times. The
amendments contained a "blanket mortgage clause" stating that the REM would secure
the payment of obligations already incurred or which may be subsequently incurred.
Daniel and Elena procured additional loans covered by promissory notes, which failed to
allude to Elena

Page 61
and Daniel's liability under the latest amendment to the REM. Does the blanket mortgage
clause cover the succeeding loans?
No, the subsequent loans are not covered by the blanket mortgage clause. The PNs do not even
make any reference to the REM as a security. While an REM may exceptionally secure future
loans or advancements, these future debts must be specifically described or must come fairly
within the terms of the mortgage contract. A mortgage containing a dragnet clause will not be
extended to cover future advances, unless the document evidencing the subsequent advance
refers to the mortgage as providing security therefor, or unless there are clear and supportive
evidence to the contrary (Quiambao v. China Banking Corp., G.R. No. 238462, May 12, 2021;
M. Lopez case).

(189) Discuss the prohibition against pactum commissorium.

 The mortgagee's consolidation of ownership over the mortgaged property upon the mortgagor's
mere failure to pay the obligation is the essence of pactum commissorium. The mortgagor's
default
does not
operate
to

automatically vest on the mortgagee the ownership of the encumbered property. Such
arrangements as contrary to morals and public policy and thus void. If a mortgagee in equity
desires to obtain title to a mortgaged property, the mortgagee's proper remedy is to cause the
foreclosure of the mortgage in equity and buy it at a foreclosure sale (Dacquel v. Sps. Sotelo,
G.R. No. 203946, August 4, 2021).

Note: In a pactum commissorium arrangement, there is an automatic appropriation by the

creditor of the thing mortgaged or pledged in the event of non-payment of the principal
obligation. (Sps. Velarde v. Heirs of Candari, G.R. No. 190057, October 17, 2022; M. Lopez
case).

(190) What is extrajudicial foreclosure?

Extrajudicial foreclosure happens when the mortgagee is given a special power of attorney to
sell the mortgaged property by public auction, under Act No. 3135. It must be stipulated in the
contract (Act No. 3135, otherwise known as “An Act to Regulate the Sale of Property Under
Special Powers Inserted in or Annexed to Real-Estate Mortgages", Secs. 1 and 6).

(191) Spouses Villanueva executed a real estate mortgage ("REM") as security for the loan in
favor of TCL Corp. ("TCL"). The REM expressly provides that the mortgaged property
shall be foreclosed, judicially or extra judicially, upon failure to satisfy the debt, and that
TCL, the mortgagee, is appointed as attorney-in-fact of Spouses Villanueva, the
mortgagors, "to take any legal action as may be necessary to satisfy the mortgage debt".
The Spouses Villanueva failed to settle the obligation, prompting TCL to apply for the
foreclosure of the REM. An auction sale was held and the mortgaged properly was sold
to TCL as the sole bidder. Spouses Villanueva filed an action against TCL to annul the
extrajudicial foreclosure sale, certificate of sale and final deed of sale, alleging that TCL
had no right to foreclose the mortgaged property because the REM did not expressly
grant it the power to sell. Has the required special power of attorney to sell been
sufficiently incorporated in the REM?
Yes, because the REM sufficiently incorporated the required special power of attorney to sell.
While a power of sale will not be recognized as contained in mortgage unless it is given by
express grant and in clear and explicit terms, and that there can be no implied power of sale
where a mortgage holds by a deed absolute in form, it is generally held that no particular
formality is required in the creation of the power of sale. Any words are sufficient which evince
an intention that the sale may be made upon default or other contingency.

In extrajudicial foreclosure of real estate mortgage, a special power to sell the property is
required which must be either inserted in or attached to the deed of mortgage. In extrajudicial
foreclosure, the sale is made through the sheriff by the mortgagees acting as the agents of
mortgagors owners. Hence, there must be a written authority from the mortgagor-owners in favor
of the mortgagees. Otherwise, the sale would be void. No particular formality is required in the
creation of the power of sale. Any words are sufficient which evince an intention that the sale
may be made upon default or other contingency (The Commoner Lending Corp v. Sps.
Villanueva., G.R. No. 235260, August 27, 2020; M. Lopez case).

Page 62
PERSONAL PROPERTY SECURITY ACT

(192) What are the transactions governed by the Personal Property Security Act? The Personal
Property Security Act applies to all transactions of any form that secure an obligation with
movable collateral, except interests in aircrafts subject to R.A. No. 9497, or the "Civil Aviation
Authority Act of 2008," and interests in ships subject to P.D. No. 1521, or the "Ship Mortgage
Decree of 1978." (R.A. No. 11057, Sec. 4).

(193) What is a "security agreement"?

The security agreement is the written contract signed by the parties that expresses the intent of
the parties to create a security interest over the collateral to secure the payment of the obligation
of the grantor to the secured creditor. The agreement states the terms and conditions of the
agreement, including the description of the collateral (AQUINO, Essentials of Credit

Transactions and Insolvency Law (2021), p. 436-437; R.A. No. 11057, Sec. 6).

(194) Who is a "grantor" under the Personal Property Security Act? (G-BOL)
The grantor is:
1. The person who Grants a security interest in collateral to secure its own obligation or that
of another person;
2. A Buyer or other transferee of a collateral that acquires its right subject to a security
interest; 3. A transferor in an Outright transfer of an accounts receivable; or
4. A Lessee of goods (R.A. No. 11057, Sec. 3(c)).

(195) Who is a "secured creditor"?

A secured creditor is a person that has a security interest. For the purposes of registration and
priority only, it includes a buyer of account receivable and a lessor of goods under an operating
lease for not less than 1 year (R.A. No. 11057, Sec. 3 (i)).

(196) What is a "Security interest"?

Security Interest is a property right in collateral that secures payment or other performance of an
obligation, regardless of whether the parties have denominated it as a security interest, and
regardless of the type of asset, the status of the grantor or secured creditor, or the nature of the
secured obligation; including the right of a buyer of accounts receivable and a lessor under an
operating lease for not less than 1 year (R.A. No. 11057, Sec. 3(j)).

(197) When does a security interest become effective against third parties? A security interest
becomes effective against third parties the moment it is perfected (R.A. No. 11057, Sec. 11 (b)).

The security interest shall be perfected when:

1. It has been created; and
2. The secured creditor has taken one of the following actions (R.A. No. 11057, Sec. 11):
a. Registration of a notice with the Registry;
 b. Possession of the collateral by the secured creditor; and
c. Control of investment property and deposit account.

Note: A security interest in any tangible asset may be perfected by registration or possession. A
security interest in investment property and deposit account may be perfected by registration or
control (R.A. No. 11057, Sec. 12).

(198) What happens to the security interest in case the collateral is disposed of? A security
interest shall continue in collateral notwithstanding sale, lease, license, exchange, or other
disposition of the collateral (R.A. No. 11057, Sec. 9).

Exceptions to the continuity of security interest:

1. If the party obtains the collateral, in the ordinary course of business, in good faith, he shall
take the movable property free of the security interest; and

Note: No such good faith shall exist if the security interest in the movable property was
registered prior to his obtaining the property (R.A. No. 11057, Sec. 21).

Page 63
2. If agreed upon by the parties (R.A. No. 11057, Sec. 9).

(199) What is a notice under the Personal Property Security Act?

A notice is a statement of information that is registered in the Registry relating to a security
interest or lien. The term includes an initial notice, amendment notice, and termination notice
(R.A. No. 11057, Sec. 3 (e)).

Note: A notice which substantially complies with the requirements shall be effective unless it is
seriously misleading. Seriously misleading notices include notices which do not provide the
identification number of the grantor. A notice that may not be retrieved in a search of the
Registry against the correct identifier of the grantor shall be ineffective with respect to that
grantor (IRR of R.A. No. 11057, Sec. 5.07).

(200) How is a security interest enforced? (R2ED)

A security interest may
be enforced:
1. By Retention of the
collateral (R.A. No.
11057, Sec. 54);
2. By Recovery in
special cases (R.A.
No. 11057, Sec. 48);
3. By Expedited
repossession (R.A.
No. 11057, Sec. 47);
and
4. By Disposition (R.A.
No. 11057, Sec. 49).

(201) Who has the right to

redeem the collateral?
Any
person
who is
entitled to
receive a

notification of disposition is entitled to redeem the collateral (R.A. No. 11057, Sec. 45).

XIII. COMPROMISE AGREEMENT

(202) What is the effect of a compromise on the parties?
A compromise has upon the parties the effect and authority of res judicata. However, a judicial
compromise is necessary for the execution of the compromise agreement (CIVIL CODE, Art.
2037).

(203) What are the instances where compromise is not allowed? (SMaL-FuCoLeC)
No compromise upon the following questions shall be valid:
1. The civil Status of persons;
2. The validity of a Marriage or a legal separation;
3. Any ground for Legal separation;
4. Future support;
5. The jurisdiction of Courts;
6. Future Legitime (CIVIL CODE, Art. 2035); and
7. Criminal Liability (CIVIL CODE, Art. 2034).

XIV. QUASI-CONTRACTS

SOLUTIO INDEBITI

(204) What are the requisites of Solutio Indebiti?

The essential requisites of solutio indebiti are as follows:
1. Payment is made when there exists no binding relation between the payor, who has no
duty to pay, and the person who received the payment, and
2. Payment is made through mistake, and not through liberality or some other cause (1
RABUYA, Civil Law Reviewer (2024), p. 41 [hereinafter 1 RABUYA, Civil Law Reviewer]).

(205) The Department of Agrarian Reform (DAR) Secretary and the DAR Employees Association
executed an agreement whereby the DAR officials and employees shall receive incentives
for reaching certain targets. The Commission on Audit (COA) disallowed the
disbursements because they were illegally charged against the Comprehensive Agrarian
Reform Program Fund in violation of the law. Do the Civil Law principles of solutio
indebiti and unjust enrichment apply?

Page 64
 Yes, the principles apply. The receipt of public funds without valid basis or justification is already
an undue benefit that gives rise to the obligation to return. This obligation is founded by the civil
law principles of solutio indebiti and unjust enrichment. The recipients' good faith or bad faith is
immaterial in the determination of their liability.

In this case, the fact that there was no valid basis for the release of the incentives to the
prejudice of the government already constitutes unjust enrichment that obligates the recipients
to refund (Department of Agrarian Reform Employees Association v. COA, G.R. No. 217285,
November 10, 2020; M. Lopez Case).

(206) Employees of ABC Hospital received hazard allowances which went above the 5% rate
prescribed by the Magna Carta of Public Health Workers. The hazard allowances paid
were disallowed in the Notice of Disallowance (ND) issued by Commission on Audit
(COA).
The

employees sought to be relieved from liability under the ND. Should the employees be
required to refund the disallowed amounts that they individually received?
No, the employees are not required to refund the disallowed amounts that they individually
received. As a rule, the recipients' liability to refund disallowed amounts on the basis of the
principles of solutio indebiti and unjust enrichment is warranted due to the receipt of public funds
without valid basis to rectify the prejudice caused to the government by the undue disbursement
of public funds. However, the recipients' liability may be excused (1) upon a showing that the
questioned benefits or incentives were genuinely given in consideration of services rendered; or
(2) when excused by the Court on the basis of undue prejudice, social justice considerations,
and other bona fide exceptions depending on the purpose, nature, and amount of the
disallowed benefit or incentive relative to the attending circumstances, because under these
circumstances, the concept of unjust enrichment or mistake in payment is negated. Such
exceptions shall be limited to disbursements adequately supported by factual and legal bases,
but were nonetheless validly disallowed on account of procedural infirmities.

Here, while the fixed amount of hazard pay granted should be disallowance because it based on
a void administrative issuance, there is sufficient justification to excuse the employees' liability
on equitable grounds. The petitioners were entitled to the grant of hazard pay under the law.
There is a clear, direct, and reasonable connection of the fair amount of hazard allowances to
the actual performance of the employees' official work. It is only the DOH's irregular
implementation of such grant that caused the disallowance of the overpayments.

Thus, the deplorable inequity that will be caused to the employees if ordered to refund the
disallowed amounts, which were purposely given to compensate the life-threatening risks that
they had to endure in the performance of their duties and service to the public, cannot be
brushed aside (Abrenica v. COA, G.R. No. 218185, September 14, 2021; M. Lopez case).

Note: Recent jurisprudence allows recipients' absolution from the liability to refund when
three (3) years have already lapsed from the time of receipt of the disallowed allowances or
 benefits before a Notice of Disallowance or any similar notice indicating illegality or irregularity of
the disbursement was issued. (Abella v. Commission on Audit Proper, G.R. No. 238940, April
19, 2022; M. Lopez Case).

Additional Note: The recipients do not incur liability to refund when they can prove their
entitlement to what they received as a matter of fact and law because in such situation, there is
no undue payment and the government incurs no loss. The essence of solutio indebiti and
unjust enrichment is thereby negated. (Department of Agrarian Reform Employees Association
v. COA, G.R. No. 217285, November 10, 2020; M. Lopez Case).

OTHER QUASI-CONTRACTS

(207) Discuss the principle of quantum meruit.

The principle of quantum meruit allows recovery of an amount to the extent of the reasonable
value of the thing or services rendered, regardless of any agreement as to the value.
Determination of such value is a purely factual matter, which necessitates reception and
evaluation of competent evidence. (Central Bay Reclamation and Development Corp. v.
Commission on Audit, G.R. No. 252940, April 5, 2022; M. Lopez case).

Page 65
Payment for services done on account of the government cannot be avoided despite irregularity
or nullity of the contract (Metro Laundry Services v. COA, G.R. No. 252411, February 15, 2022;
M. Lopez case).

(208) Metro Laundry Services won the public bidding conducted by the City of Manila to
procure laundry services for Ospital ng Maynila Medical Center (OMMC). When the
contract already expired, the hospital retained Metro Laundry's services by virtue of a
Contract of Extension. Subsequently, Metro Laundry was not compensated due to the
city's lack of funds. Metro Laundry filed a money claim with the Commission on Audit
(COA) which was denied due to failure to comply with the mandatory requirements for
procurement of services under pertinent laws. Was COA correct in denying the claim due
to the irregularities of the contract extension?
No, the outright denial of Metro Laundry's legitimate claim for compensation is unjustified.
Compensation to contractors who have entirely or substantially accomplished their obligation
under the
contract
on the
basis of
quantum
meruit
must be
granted,

regardless of any invalidity or irregularity in its procurement. Payment for services done on
account of the government cannot be avoided despite irregularity or nullity of the contract.

Although the extended contract was entered into without public bidding and thus violated the
 procurement law, the OMMC and the City of Manila recognized the entitlement of Metro Laundry
to payment for its actual services rendered as shown by series of certifications, indorsements,
and vouchers issued. Insofar as Metro Laundry is concerned, it has fulfilled the services it was
contracted for, and in doing so, no evidence of bad faith or collusion with the approving OMMC
officials was presented against it. The government has admittedly benefited from Metro
Laundry's services. Thus, there is no obstacle in ruling for the payment of Metro Laundry's
services based on quantum meruit (Metro Laundry Services v. COA, G.R. No. 252411,
February 15, 2022; M. Lopez case).

XV. TORTS AND DAMAGES

COMMON PRINCIPLES

(209) How are Culpa Aquiliana, Culpa Contractual, and Culpa Criminal distinguished from one
another?
The following are their distinctions:
Culpa Aquiliana Culpa Culpa Criminal
Contractual

As to Fault or negligence resulting Obligation arises Existence of a law

basis of in damage or injury to from the breach clearly punishing the
liability another (CIVIL CODE, Art. of the contract act (Nullum crimen
2176) because of sine lege)
defendant’s
failure to
exercise due
care in its
performance
(CIVIL CODE,
Art. 1173)

As to the Direct, substantive, and Negligence is Direct, substantive,

nature of independent merely incidental and independent
the to the
negligence performance of
an existing
obligation
because of a
contract

As to Not necessary Not necessary Necessary

criminal
intent

Page 66
Culpa Aquiliana Culpa Culpa Criminal
Contractual

As to Preponderance of evidence Preponderance Proof beyond

quantum (RULES OF COURT, RULE of evidence reasonable doubt
of proof 133, Sec. 1) (RULES OF (Barredo v. Garcia,
COURT, RULE G.R. No. L-48006, July
133, Sec. 1) 8, 1942)

As to the None Exists None

existence
of pre
contractu
al
obligatio
n

As to A complete and proper Not a complete Not a proper defense

defense defense as regards vicarious and proper
of liability (CIVIL CODE, Art. defense in the
“Good 2180, Par. 8) selection and
father of a supervision of
family” employees but
can mitigate
liability for
damages
 (Cangco
v. Manila
Railroad Co.,
G.R. No. L
12191, October
14, 1918)

As to None. Injured party must Presumption of None, the innocence of

presumpti prove the negligence of the negligence the accused is
on of defendant (Cangco v. immediately presumed until
negligence Manila Railroad Co., supra) attaches by a contrary is proven
failure of a
Negligence is presumed in covenant or its
the following instances: tenor (FGU
1. It is disputably presumed Insurance Corp.
that a driver was negligent, if v. G.P.
he had been found guilty of Sarmiento
reckless driving or violating Trucking Corp.,
traffic regulations at least G.R. No. 141910,
twice within the next August 6, 2002)
preceding two months
(CIVIL CODE, Art. 2184);
2. Unless there is proof to
the contrary, it is presumed
that a person driving a
motor vehicle has been
negligent if at the time of the
mishap, he was violating
any traffic regulation (CIVIL
CODE, Art. 2185); and
3. There is prima facie
presumption of negligence
on the part of the defendant
if the death or injury results
from his possession of
dangerous weapons or
substances, such as
firearms and poison, except
when the possession or use
thereof is indispensable in
his occupation or business
(CIVIL CODE, Art. 2188).

Page 67
Culpa Aquiliana Culpa Culpa Criminal
Contractual

As to Private Right Private Right Public Right

nature of
right
violated

As to Art. 2176; Arts. 1172-1174 of Arts. 1170-1174 Art. 365 of the Revised
Governi the Civil Code of the Civil Code Penal Code
ng Law

CLASSIFICATION OF
TORTS

(210) What are the

classifications of torts?
(INS):
The classifications of
torts are as follows:
1.
Inte
ntio
nal
– It
 includes conduct where the actor desires to cause the consequences of his act or
believes the consequences are substantially certain to result from it. Intentional torts
include assault, battery, false imprisonment, defamation, invasion of privacy, and
interference of property.
2. Negligent – It involves voluntary acts or omissions that result in injury to others, without
intending to cause the same. The actor fails to exercise due care in performing such acts
or omissions.
3. Strict Liability – It is when the person is made liable independent of fault or negligence upon
submission of proof of certain facts. When strict liability is imposed, the conduct is
generally not wrongful in itself but the wrong consists in causing harm by engaging in
certain types of risky activities (AQUINO, Torts and Damages, supra at 2-8).

CONSUMER ACT

(211) What are the liabilities under the Consumer Act?

DEFINITION LIABILITY DEFENSES

DEFECTIVE PRODUCTS

A product is defective when it Any Filipino or foreign The

does not offer the safety rightfully manufacturer, producer, and manufacturer,
expected of it. any importer shall be liable for builder, producer
redress, independently of fault, or importer shall
The relevant circumstances to be for damages caused to not be held
taken into consideration include, consumers by: liable when it
but are not limited to: 1. Defects resulting from evidences:
1. Presentation of product; design, manufacture, 1. That it did
2. Use and hazards reasonably construction, assembly and not place
expected of it; erection, formulas and the
3. The time it was put into handling and making up, product on the
circulation (R.A. No. 7394, presentation or packing of market;
Art. 97). their products; and 2. That although
2. Insufficient or inadequate it did place
Note: The fact that another better information on the use and the
quality product has been placed in hazards thereof (R.A. No. product on the
the market will not render the 7394, Art. 97). market such
product defective (R.A. No. 7394, product has no
Art. 97). The tradesman/seller is liable defect;
for defective products when: 3. That the
1. It is not possible to identify the consumer or
manufacturer, builder, a
producer or importer; third party is
2. The product is supplied, solely at fault
without clear identification of (R.A. No.
the manufacturer, producer, 7394, Art. 97).
builder or importer;

Page 68
DEFINITION LIABILITY DEFENSES

3. He does not adequately

preserve perishable goods
(R.A. No. 7394, Art. 98).

Note: The liability of the

tradesman or seller making
payment to the damaged party is
without prejudice to their right to
reimbursement of a part of the
payment against other
responsible parties in
accordance with their part or
responsibility in the cause of the
damage effected (R.A. No.
7394, Art. 98).

DEFECTIVE SERVICES
The service is defective when it The service supplier is liable for The supplier of
does not provide the safety the redress, independently of fault, the services
consumer may rightfully expect of for damages caused to shall not be held
it, taking the relevant consumers by: liable when it is
circumstances into consideration, 1. Defects relating to the proven:
including but not limited to: rendering of the services; and 2. 1. That there is
1. The manner in which it is Insufficient or inadequate no defect in
provided; information on the fruition and the service
2. The result of hazards which hazards thereof (R.A. No. rendered;
may reasonably be expected of 7394, Art. 99). 2. That the
it; 3. The time when it was consumer or
provided (R.A. No. 7394, Art. third party is
99). solely at fault
(R.A. No.
Note: A service is not considered 7394, Art.
defective because of the use or 99).
introduction of new techniques
(R.A. No. 7394, Art. 99).
 LIABILITY REMEDY

PRODUCT AND SERVICE IMPERFECTION

The suppliers of durable or The consumer is allowed demand replacement to the

non-durable consumer imperfect parts (R.A. No. 7394, Art. 100).
products are jointly liable
for If the imperfection is not corrected within thirty (30) days, the
imperfections in quality consumer may alternatively demand at his option: (R3) 1. The
that: 1. Render the Replacement of the product by another of the same kind, in a
products unfit or perfect state of use;
inadequate for
consumption for which Note: If the consumer opts for this option and
they are designed or replacement of the product is not possible, it may be
decrease their value; replaced by another of a different kind, mark or model.
2. Result from The difference in price may result thereof shall be
inconsistency with the supplemented or reimbursed by the party which caused
information provided the damage.
on the container,
packaging, labels or 2. The immediate Reimbursement of the amount paid, with
publicity monetary updating, without prejudice to any losses and
messages/ damages; or
advertisement, with 3. A proportionate price Reduction (R.A. No. 7394, Art. 100).
due regard to the
variations resulting from
their nature (R.A. No.
7394, Art. 100).
 Page 69
LIABILITY REMEDY

Note: The period to correct the imperfection may be reduced

or increased upon the agreement of the parties, but in no
case shall the period be less than 7 days nor more than 180
days (R.A. No. 7394, Art. 100). The 30-day period may also
be disregarded, and the options exercised immediately when
by virtue of the extent of the imperfection, the replacement of
the imperfect parts may jeopardize the product quality or
characteristics, thus decreasing its value (R.A. No. 7394, Art.
100).

PRODUCT QUANTITY IMPERFECTION

Suppliers are jointly liable For product quantity imperfections, the consumer may
for imperfections in the alternatively demand at his own option: (PS-R2)
quantity of the product 1. The proportionate Price;
when, in due regard for 2. The Supplementing of weight or measure differential;
variations inherent thereto, 3. The Replacement of the product by another of the
their net content is less same kind, mark or model, without said imperfections;
than that indicated on the 4. The immediate Reimbursement of the amount paid,
container, packaging, with monetary updating without prejudice to losses
labeling or advertisement and damages if any (R.A. No. 7394, Art. 101).
(R.A. No. 7394, Art. 101).

SERVICE QUALITY IMPERFECTION

The service supplier is The consumer may alternatively demand at his own option:
liable for any quality (P R2)
imperfections that: 1. The Performance of the services, without any
1. Render the services additional cost and when applicable;
improper for
consumption or Note: Reperformance of services may be entrusted
decrease their value; to duly qualified third parties, but the supplier shall
and bear the risk and cost.
2. Result from
inconsistency with the 2. The immediate Reimbursement of the amount paid,
information contained with monetary updating without prejudice to losses
in the offer or and damages, if any;
advertisement (R.A. 3. A proportionate price Reduction (R.A. No. 7394, Art.
No. 7394, Art. 102). 102).

(212) What are improper services?

Improper services are those which prove to be inadequate for purposes reasonably expected of
them and those that fail to meet the provisions of the Consumer Act regulating service rendering
(R.A. No. 7394, Art. 102).

THE TORTFEASOR; JOINT AND DIRECT LIABILITIES

(213) X and Y are lessees of Z. Upon the expiration of the lease period stipulated in the
contract, and despite several demands by Z to vacate the property, X and Y refused to
heed such demands. May X and Y be held jointly and severally liable to pay for the use of
the property?
Yes, X and Y can be held jointly and severally liable to pay for the use of the property. Where
the lessees or sublessees refuse to vacate the leased property after the expiration of the lease
period and despite due demands by the lessor, they can be held jointly and severally liable to
pay for the use of the property. The basis of their solidary liability is not the contract of lease or
sublease but the fact that they have become joint tortfeasors (Alipio v. CA, G.R. No. 134100,
September 29, 2000).

Note: It would not be an excuse for any of the joint tortfeasors to assert that her individual
participation in the wrong was insignificant as compared to those of the others. Joint tortfeasors
are not liable pro rata. The damages cannot be apportioned among them, except by themselves.

Page 70
 They cannot insist upon an apportionment, for the purpose of each paying an aliquot part. They
are jointly and severally liable for the whole amount (People v. Velasco, G.R. No. 195668, June
25, 2014).

The liability of joint tortfeasors is solidary since the responsibility of two or more persons who are
liable for quasi-delict is solidary (CIVIL CODE, Art. 2194).

PROXIMATE CAUSE AND DOCTRINE OF LAST CLEAR CHANCE

(214) What is proximate cause?

Proximate cause refers to that cause, which, in natural and continuous sequence, unbroken by
any efficient intervening cause, produces the injury, and without which the result would not have
occurred (VDM Trading, Inc., v. Carungcong, G.R. No. 206709, February 6, 2019).

(215) What is the

Doctrine of Last Clear
Chance?
The

Doctrine of Last Clear Chance is a principle which states that where both parties are guilty of
negligence, but the negligent act of one succeeds that of the other by an appreciable interval of
time, the one who has the last reasonable opportunity to avoid the impending harm and fails to
do so, is chargeable with the consequences without reference to the prior negligence of the
other party (Picart v. Smith, G. R. No. L-12219, March 15, 1918).

VICARIOUS LIABILITY

(216) What are the requisites of vicarious liability of employers? (ELP)

Vicarious liability will attach if the following elements are established:
1. Employer-employee relationship between the person sought to be made vicariously liable
and the negligent employee;
2. Liability for quasi-delict of the employee; and
3. Performance by the employee of the assigned task by the employer or the latter’s
authorized representative where damage or injury was inflicted through fault or negligence
(AQUINO, Torts and Damages, supra at 820).

Note: This vicarious liability is applicable only if there is an employer-employee relationship

(Metro Manila Transit Corp. v. CA, G.R. No. 144408, June 21, 1993). This employer-employee
relationship cannot be presumed but must be sufficiently proven by the plaintiff. The plaintiff
must also show that the employee was acting within the scope of his assigned task when the
tort complained of was committed (Reyes v. Doctolero, G.R. No. 185579, August 2, 2017).

(217) What is the nature of the responsibility of an employer for the negligence of his
employees?
The responsibility of an employer for the negligence of his employees in the performance of his
duties is primary, that is, the injured party may recover from the employer directly, regardless of
the solvency of his employees (Philtranco Service Enterprises, Inc., v. CA, G.R. No. 120553,
June 17, 1997).
 The liability is likewise solidary with the employee consistent with Article 2194 of the Civil Code
(Sps. Hernandez v. Sps. Dolor, G.R. No. 160286, July 30, 2004). Consequently, the employee is
not even an indispensable party in a case against the employer. It is not necessary for the court
to acquire jurisdiction over the employee because there is no merger or renunciation of rights
but only mutual representation (AQUINO, Torts and Damages, supra at 819). The employee is
also not even a necessary party because complete relief is available from either (Cerezo v.
Tuazon, G.R. No. 141538, March 23, 2004).

(218) How is the Registered Owner Rule applied in quasi-delict cases?

In quasi-delict cases, the registered owner of a motor vehicle is the employer of its driver in
contemplation of law. The registered owner of any vehicle, even if not used for public service,
would primarily be responsible to the public or to third persons for injuries caused while the
vehicle was being driven on highways or streets. The purpose of motor vehicle registration is
precisely to identify the owner so that if any injury is caused by the vehicle, responsibility can be
imputed to the registered owner (Josefa v. Manila Electric Company, G.R. No. 182705, July 18,
2014).

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In cases where both the registered-owner rule and Article 2180 apply, the plaintiff must first
establish that the employer is the registered owner of the vehicle in question. Once the plaintiff
successfully proves ownership, there arises a disputable presumption that the requirements of
Article 2180 have been proven. As a consequence, the burden of proof shifts to the defendant to
show that no liability under Article 2180 has arisen (Caravan Travel and Tours International v.
Abejar, G.R. No. 170631, February 10, 2016).

(219) What are the rules for the liability of schools, their teachers, and administrators, and the
individual or entity engaged in childcare for damages caused by their pupils and students
or apprentices?
For minor children, under the Family Code, the school, its administrators and teachers, or the
individual, entity or institution engaged in childcare:
1. Shall have special parental authority and responsibility over the minor child while under
their

supervision, instruction or custody (FAMILY CODE, Art. 218);

2. Such authority and responsibility shall apply to all authorized activities whether inside or
outside the premises of the school, entity or institution (FAMILY CODE, Art. 218); and 3. They
shall be principally and solidarily liable for damages caused by the acts or omissions of the
unemancipated minor while the parents, judicial guardians, or the persons exercising
substitute parental authority over said minor shall be subsidiarily liable (FAMILY CODE, Art.
219).
Note: The respective liabilities of those referred to in the preceding paragraph shall not apply if it
is proved that they exercised the proper diligence required under the particular circumstances
(FAMILY CODE, Art. 219).

Article 218 of the Family Code does not make any distinction as to the kind of school that has
substitute parental authority over minor children (2 ALBANO, Civil Law Reviewer (2022), p. 694-
695).

Under Article 2180 of the Civil Code, teachers or heads of establishments of arts and trades: 1.
Shall be liable for damages caused by their pupils and students or apprentices, so long as
they remain in their custody (CIVIL CODE, Art. 2180, Par. 7);

Note: “So long as the students remain in their custody” means the protective and
supervisory custody that the school and its heads and teachers exercise over the pupils
and students for as long as they are at attendance in the school, including recess time
(Palisoc v. Brillantes, G.R. No. L-29025, October 4, 1971).

In line with the case of Palisoc, a student not “at attendance in the school” cannot be in
“recess” thereat. Likewise, the mere fact of being enrolled or being in the premises of a
school without more does not constitute “attending school” or being in the “protective and
supervisory custody” of the school (Salvosa v. IAC, G.R. No. 70458, October 5, 1988).

2. Where the school is academic rather than technical or vocational in nature, responsibility
for the tort committed by the student will attach to the teacher-in-charge of such student
(St. Joseph’s College v. Miranda, G.R. No. 182353, June 29, 2010); and
3. Where the school is an establishment of arts and trades, it is the head thereof, and only he,
who shall be held liable (Amadora v. CA, G.R. No. L-47745, April 15, 1988).

Note: The law does not require that the offending student be of minority age. Unlike the parent,
who will be liable only if his child is still a minor, the teacher is held answerable by the law for the
act of the student under him, regardless of the student's age. The nature of the responsibility
imposed on teachers and heads of establishment in this case is primary and direct (Amadora v.
CA, G.R. No. L-47745, April 15, 1988).

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RES IPSA LOQUITUR

(220) What is Res Ipsa Loquitur?

Res Ipsa Loquitur translates to "the thing or transaction speaks for itself." It is a maxim for the
rule that the fact of the occurrence of an injury, taken with the surrounding circumstances, may
permit an inference or raise a presumption of negligence, or make out a plaintiff’s prima facie
case, and present a question of fact for defendant to meet with an explanation (Ramos v. CA,
G.R. No. 124354, December 29, 1999).

Note: The doctrine of res ipsa loquitur can be applied in medical malpractice cases. The
application of res ipsa 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 an inference of negligence as the cause of a harm (Ramos v. CA, G.R. No. 124354,

December 29, 1999).

Additional Note: Res ipsa loquitur is not applicable in cases where the defendant's alleged
failure to observe due care is not immediately apparent to a layman (Borromeo v. Family Care
Hospital, G.R. No. 191018, January 25, 2016).

(221) What are the requisites of Res Ipsa Loquitur? (A-EC-E)

The following are the requisites of Res Ipsa Loquitur:
1. The Accident is of a kind which ordinarily does not occur in the absence of someone's
negligence;
2. It is caused by an instrumentality within the Exclusive Control of the defendant or
defendants; and
3. The possibility of contributing conduct which would make the plaintiff responsible is
Eliminated (Ramos v. CA, G.R. No. 124354, December 29, 1999).

DAMNUM ABSQUE INJURIA

(222) What is the principle of Damnum Absque Injuria?

The principle of Damnum Absque Injuria provides that there can be no damage without injury
when the loss or harm was not the result of a violation of a legal duty (Rico v. Union Bank of the
Philippines, G.R. No. 210928, February 14, 2022). In other words, in order that the law will give
redress for an act causing damage, that act must be not only hurtful, but wrongful. There must
be damnum et injuria. If, as may happen in many cases, a person sustains actual damage, that
is, harm or loss to his person or property, without sustaining any legal injury, that is, an act or
omission which the law does not deem an injury, the damage is regarded as damnum absque
injuria (Sps. Custodio v. CA, G.R. No. 116100, February 9, 1996).

DEFENSES IN TORT ACTIONS

(223) What are the defenses in negligence cases? (FAV-P2IC)
The defenses applied in negligence cases are the following:
1. Fortuitous event - an event which could not be foreseen, or which though foreseen, was
inevitable (CIVIL CODE, Art. 1174);
2. Assumption of risk (volenti non fit injuria) - A person who voluntarily exposes himself to an
obvious, known and appreciated danger assumes the risk of injury that may result
therefrom (Abrogar v. Cosmos Bottling Company, G.R. No. 164749, March 15, 2017);
3. Violation of statute by the victim - It is treated generally as negligence per se, except when
the law or rules specifically provide for a different rule. The effect would depend on
whether the violation is:
a. Merely contributory negligence – partial defense
b. The proximate cause of the loss – complete defense; or
c. Neither contributory nor the proximate cause of the loss – proof of causation required
(AQUINO, Torts and Damages, supra at 346-348);
4. Prescription - An action based on quasi-delict prescribes in four (4) years from the date of
the accident (CIVIL CODE, Art. 1146) – to be counted from the last element of the
commission of an act or omission violative of the right of the plaintiff;

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5. Plaintiff’s
own negligence - When the plaintiff's own negligence was the immediate and
proximate cause of his injury, he cannot recover damages (CIVIL CODE, Art. 2179); 6.
Involuntariness – a complete defense in quasi-delict cases (AQUINO, Torts and Damages,
supra at 370-372); and
7. Contributory Negligence – when the party’s act showed lack of ordinary care and foresight
that such act could cause him harm or put his life in danger (Estacion v. Bernardo, G.R.
No. 144723, February 27, 2006), (AQUINO, Torts and Damages, supra at 332-345).

(224) What is the emergency rule?

Under the emergency rule, one who suddenly finds himself in a place of danger, and is required
to act without time to consider the best means that may be adopted to avoid the impending
danger, is not guilty of negligence, if he fails to adopt what subsequently and upon reflection
may appear to have been a better method, unless the danger in which he finds himself is
brought about by his own negligence (Delsan Transport Lines, Inc., v. C&A Construction, Inc.,
G.R. No. 156034, October 1, 2003).

MEDICAL NEGLIGENCE
AND MALPRACTICE

(225) What is medical

malpractice?
Medical

malpractice is a particular form of negligence which consists in the failure of a physician or

surgeon to apply to his practice of medicine that degree of care and skill which is ordinarily
employed by the profession generally, under similar conditions, and in like surrounding
circumstances (De Jesus v. Uyloan, G.R. No. 234851, February 15, 2022).
 Note: In order to successfully pursue such a claim for medical malpractice, a patient must prove
that a health care provider, in most cases a physician, either failed to do something which a
reasonably prudent health care provider would have done, or that he or she did something that a
reasonably prudent provider would not have done; and that that failure or action caused injury to
the patient (Li v. Spouses Soliman, G.R. 165279, June 7, 2011).

(226) Is a mere reference to an implied contract between the physician and the patient in
general sufficient for pleading a cause of action under the contract theory of
professional malpractice?
No. A mere reference to an implied contract between the physician and the patient in general is
insufficient for pleading a cause of action under the contract theory of professional malpractice.
An action for medical malpractice based on contract must allege an express promise to provide
medical treatment or achieve a specific result. Thus, there is no cause of action for breach of
implied contract or implied warranty arising from an alleged failure to provide adequate medical
treatment. This allegation clearly sounds in tort, not in contract.

Where the complaint contains averments of the four elements involved in medical negligence
cases, namely: duty, breach, injury, and proximate causation, and the defendant doctor failed to
observe such degree of care which caused damage or harm to the plaintiff patient, the cause of
action is one for medical negligence under the law on torts rather than contract (De Jesus v.
Uyloan, G.R. No. 234851, February 15, 2022).

Note: In De Jesus v. Uyloan, the SC affirmed the ruling of the CA which held that the applicable
prescriptive period is four years on the prescriptive period of actions based on quasi-delict under
Art. 1146 of the Civil Code, and not six or ten years on prescription of contracts in accordance
with Arts. 1145 and 1144 of the Civil Code.

(227) What is the degree of diligence required from a medical professional? A medical
professional has the duty to observe the standard of care and exercise the degree of skill,
knowledge, and training ordinarily expected of other similarly trained medical professionals
acting under the same circumstances. A breach of the accepted standard of care constitutes
negligence or malpractice and renders the defendant liable for the resulting injury to his patient.
The standard is based on the norm observed by other reasonably competent members of the
profession practicing the same field of medicine (Borromeo v. Family Care Hospital, G.R. No.
191018, January 25, 2016).

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(228) What is the doctrine of informed consent?
Informed consent evolved into a general principle of law that a physician has a duty to disclose
what a reasonably prudent physician in the medical community in the exercise of reasonable
care would disclose to his patient as to whatever grave risks of injury might be incurred from a
proposed course of treatment, so that a patient, exercising ordinary care for his own welfare, and
faced with a choice of undergoing the proposed treatment, or alternative treatment, or none at
all, may intelligently exercise his judgment by reasonably balancing the probable risks against
the probable benefits (Alano v. Magud-Logmao, G.R. No. 175540, April 6, 2014).

The plaintiff must prove the following elements in a malpractice action based upon the doctrine
of informed consent: (DF-CI)
1. The physician had a Duty to disclose material risks;
2. He Failed to disclose or inadequately disclosed those risks;
3. As a direct and proximate result of the failure to disclose, the patient Consented to

treatment she otherwise would not have consented to; and

4. Plaintiff was Injured by the proposed treatment.

The gravamen in an informed consent case requires the plaintiff to point to significant
undisclosed information relating to the treatment which would have altered her decision to
undergo it (Li v. Spouses Soliman, G.R. 165279, June 7, 2011).

(229) May the hospital be held vicariously liable under Article 2180 of the Civil Code in medical
negligence cases notwithstanding that the medical professional is a consultant or guest
doctor?
Yes, the hospital may be vicariously liable even if there is no employer-employee relationship
between the doctor and the hospital. This cannot automatically excuse the hospital from any
liability under the doctrine of apparent authority. When the doctrine of apparent authority is
adopted in medical negligence cases, "the hospital need not make express representations to
the patient that the treating physician is an employee of the hospital; rather a representation may
be general and implied." (Allarey v. Dela Cruz, G.R. No. 250919, November 10, 2021).

DAMAGES

(230) What are the different kinds of damages?

Damages Definition
 Actual or Actual damages are compensation for an injury that will put the injured party
compensato in the position where it was before the injury. They pertain to such injuries
ry damages or losses that are actually sustained and susceptible of measurement.
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).

The requisites for the award of actual damages are: (CPAB) 1. Amount of
loss must be actually proven with a reasonable degree of Certainty,
premised upon competent proof or the best evidence obtainable;
2. There must be Pleading and proof of actual damages suffered for the
same to be recovered;
3. The Amount of loss must be capable of proof; and
4. Courts are required to state the factual Bases of the award
(Oceaneering Contractors v. Barretto, G.R. No. 184215, February
9, 2011).

Moral Moral damages include: (PM-FA-RFS-HS)

damages 1. Physical suffering;
2. Mental anguish;

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Damages Definition

3. Fright;
4. Serious Anxiety;
5. Besmirched Reputation;
6. Wounded Feelings;
7. Moral Shock;
8. Social Humiliation; and
9. Similar injury.

Note: Though incapable of pecuniary computation, moral damages may be

recovered if they are the proximate result of the defendant’s wrongful act or
omission (CIVIL CODE, Art. 2217).

Moral damages may be recovered in an action predicated on a breach of

contract in the following cases:
1. A criminal offense resulting in physical injuries;
2. Quasi-delicts causing physical injuries;
3. Seduction, abduction, rape, or other lascivious acts;
4. Adultery or concubinage;
5. Illegal or arbitrary detention or arrest;
6. Illegal search;
7. Libel, slander or any other form of defamation;
8. Malicious prosecution;
9. Acts mentioned in article 309;
10. Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34,
and 35.

Nominal Nominal damages are adjudicated in order that a right of the plaintiff, which
damages has been violated or invaded by the defendant, may be vindicated or
recognized, and not for the purpose of indemnifying the plaintiff for any loss
suffered by him (CIVIL CODE, Art. 2221). Its award is thus not for the
purpose of indemnification for a loss but for the recognition and vindication
of a right (Libcap Marketing Corp. v. Baquial, G.R. No. 192011, June 30,
2014).

The court may award nominal damages:

1. In every obligation arising from any source enumerated in article
1157 (i.e. law, contract, quasi-contract, delicts, and quasi-delicts); and
2. In every case where any property right has been invaded (CIVIL
CODE, Art. 2222).
Temperate Temperate damages are damages which are more than nominal but less
damages than compensatory, and may be recovered when the court finds that some
pecuniary loss has been suffered but its amount cannot be proved with
certainty (CIVIL CODE, Art. 2224).

Liquidated Liquidated damages are those agreed upon by the parties to a contract, to
damages be paid in case of breach thereof (CIVIL CODE, Art. 2226).

Exemplary Exemplary damages are also known as punitive or vindictive damages.

or Exemplary or corrective damages are intended to serve as a deterrent to
corrective serious wrongdoings, and as a vindication of undue sufferings and wanton
damages invasion of the rights of an injured or a punishment for those guilty of
outrageous conduct (People v. Combate, G.R. No. 189301, December 15,
2010).

Exemplary damages may be claimed:

1. In criminal offenses, exemplary damages as a part of the civil liability
may be imposed when the crime was committed with one or more
aggravating circumstances (CIVIL CODE, Art. 2230).

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Damages Definition

2. In quasi-delicts, exemplary damages may be granted if the defendant

acted with gross negligence (CIVIL CODE, Art. 2231).

In contracts and quasi-contracts, the court may award exemplary damages

if the defendant acted in a wanton, fraudulent, reckless, oppressive or
malevolent manner (CIVIL CODE, Art. 2232).
(231) What kinds of damages cannot co-exist?
Damages Reason
which
cannot co-
exist

Nominal Nominal damages are recoverable where a legal right is technically violated
damages and must be vindicated against an invasion that has produced no actual
and actual present loss of any kind or where there has been a breach of contract and
damages no substantial injury or actual damages whatsoever have been or can be
shown but actual damages must be proved with a reasonable degree of
certainty.

Nominal In nominal damages, it is recoverable where a legal right is technically

damages violated and must be vindicated against an invasion that has produced no
and moral actual present loss of any kind or where there has been a breach of
damages contract and no substantial injury have been or can be shown but in moral
damages, it must be shown that plaintiff suffered mental anguish, serious
anxiety, wounded feelings, moral shock and other similar injuries.

Nominal In nominal damages, it is recoverable where a legal right is technically

damages violated and must be vindicated against an invasion that has produced no
and actual present loss of any kind but in temperate damages, it may be
temperate recovered when the court finds that some pecuniary loss has been
damages suffered.

Temperate Temperate damages may be recovered when the court finds that some
damages pecuniary loss has been suffered but its amount cannot, from the nature of
and actual the case, be proved with certainty while actual damages must be proved
damages with a reasonable degree of certainty.

As a matter of exception, temperate damages can be awarded on top of

actual damages in instances where the injury is chronic and continuing
(AQUINO, Torts and Damages, supra at 1044).

(233) What is the Doctrine of Avoidable Consequences?

 The Doctrine of Avoidable Consequences provides that a party cannot recover damages flowing
from consequences which the party could reasonably have avoided (AQUINO, Torts and
Damages, supra at 1006-1007). Damages resulting from avoidable consequences of the breach
of a contract or other legal duty are not recoverable. It is the duty of one injured by the unlawful
act of another to take such measures as prudent men usually take under such circumstances to
reduce the damages as much as possible (Cerrano v. Tan Chuco, G.R. No. L-12907, August 1,
1918).

Note:
The
burden of
proof
rests
upon the

defendant to show that the plaintiff might have reduced the damages. The injured party is not
required to make extraordinary efforts or to do what is unreasonable or impracticable in his
efforts to minimize the damages. What is required is reasonable diligence and ordinary care to
allow full recovery of all the damages caused by the defendant's wrongful activity (AQUINO,
Torts and Damages, supra at 1007).

(234) How is the Doctrine of Avoidable Consequences different from contributory negligence?
In contributory negligence, the plaintiff’s act or omission occurs before or at the time of the act or
omission of the defendant. Under the Doctrine of Avoidable Consequences, the acts of the
plaintiff occur after the act or omission of the defendant (AQUINO, Reviewer on Civil Law, supra
at 941).
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