Civil Law Review Lecture and Recitation Notes
Glenn Tuazon, 4-A
Atty. Ruben F. Balane
SY 2010-11
Midterms – Succession
Finals
– Obligations and Contracts
T
ABLE OF
C
ONTENTS
:
1.
P RELIMINARY T ITLE
2.
P ERSONS AND F AMILY R ELATIONS
3.
P ROPERTY
4.
S UCCESSION
5.
O BLIGATIONS AND
C ONTRACTS
PRELIMINARY TITLE
Publication

When do laws become effective? o 15 days after publication in OG or newspaper of general circulation (EO 200), unless otherwise provided

Is 15 days mandatory? o No. It can be some other time period, less or more. What is mandatory is fact of publication.

Can the law provide that there is no need for publication? o No. The phrase “unless otherwise provided” only refers to the number of days, not fact of publication.

What is required to be published? o The entire text of the law.

What is the interpretation of the term “law”? o It can be executive issuances, regulations, et. al., and not just republic acts, as long as it affects the public in general and it requires public interest.

Can a law affect just one person? o Yes, for instance, declarations of citizenship. It still has to be published. Same rule applies, even if only one locality is affected

Read Tanada v. Tuvera.
o It is not whether you read the publication or not. It not whether you understand the law or not. As long as there is opportunity to read it, there is compliance with publication requirements.

Garcillano v. House: o The rules of procedure for legislative inquiries of Senate must be published in accordance to Art. 2 of the Civil Code, as mandated by the constitution (“duly published”).

SEC v. GMA Network : o A memorandum circular regulating filing fees for submission of articles of incorporation or extension of corporate life must be published because it regulates public rights at large.
Mistake of fact v. mistake of law

Mistake of fact can be a ground for vitiation of consent. But mistake of law is not a defense for vitiated consent.

Specific instances where a mistake of law can have some effect?
o Good faith defense
– must show that it is a difficult provision of law to interpret, and this gave rise to mistake (Art. 526). BUT this only gives rise to mitigation of liability, not complete excuse there from. o Mistake of payment or solutio indebiti
Prospectivity of laws

General rule: laws are prospective in nature.

When did the Family Code take effect?
o August 3, 1988

When did the Civil Code take effect? o August 30, 1950

Exceptions to non-retroactivity? o Regardless of what kind of law, it MUST have a retroactivity clause. (IMPT) o 1. Procedural laws o 2. Curative laws

o 3. Tax laws o 4. Penal laws which benefit the accused o 5. Substantive laws that do not impair vested rights

Liam Law v. Olympic Sawmill: o Ineffectivity of usury law should retroact as to change the
Rules of Court as to this matter.
Three types of termination of laws

Effectivity of laws is a shared legislative and judicial function.

(1) Repeal : Requires another law passed by Congress declaring that the law is repealed, or a new law that is irreconcilable with the old law.
Implied repeal is not favored.

What happens if the repealing law is itself repealed?
o It depends on law number 2. If law number 2 is a case of express repeal, then law number 1 is not revived. There must be a specific provision reviving it. o If law number 2 is a case of implied repeal, then law number 1 is revived unless law number 3 is likewise incompatible or law number 3 revives law 1.

(2) When does a law lapse? o When the law itself provides for its own lifespan. There is no need for a further statute to give effect to its lapse.

(3) Unconstitutionality declared by courts. How does this differ? o When the court declares that a law is unconstitutional, it is null and void from the beginning. Exception: operative fact, which is based on equity.
Judicial decisions

Considered as part of the law of the land. Stare decisis, however, only applies to SC decisions.
 It does not, however, become a “law” per se – no need to publish.

De Roy v. CA: o Judicial decisions need not be published first in the OG before becoming effective and binding jurisprudence. A lawyer must keep abreast with judicial decisions.
Computation of period of laws

Ordinary contracts: you can define your terms any way you want
(example, a year can be 300 days) For laws, however, a year is 365 days. o UNLESS, one specifically names the year

First day excluded, last day included.

For contracts, it does not matter if the last day falls on a weekend.
Contrast with Rules of Court, where it adjusts to the next business day.
Principle of nationality

What are the things covered by the principle of nationality?
o Family rights and duties, o status and condition, (ex. legitimacy, whether marriage is valid) o Legal capacity

Wherever a Filipino citizen is, Philippine law governs the three realms above.

When there is an alien within our country, we still apply their national laws as regards family rights and duties, status and condition, and legal capacity.

For purposes of legal capacity, when will the principle of nationality not apply? o Marriages – lex loci celebrationis but only as to authority of solemnizing officer, marriage license, marriage ceremony
 General rule: still governed by nationality (IMPT) o Contracts involving real or personal properties
– lex situs
 Exception: when reason of acquisition of the thing is succession: nationality of the decedent governs o For the formal validity of wills
– lex loci celebrationis

3 things to determine: o What law governs legal capacity o What law governs extrinsic validity o What law governs intrinsic validity

CONTRACTS o Legal capacity
– nationality

Except: contracts referring to properties, which is governed by lex situs o Extrinsic validity – lex loci celebrationis o Intrinsic validity
– there is freedom to stipulate governing law

WILLS

o Legal capacity
– national law of decedent, not successor o Extrinsic validity
– lex loci celebrationis
 Aliens’ choices – national law, domicile, Philippine law, lex loci celebrationis
 NOTE: for aliens’ wills, these refer to wills presented for probate in the Philippines; we don’t care otherwise o Intrinsic validity – national law of the decedent

When does renvoi usually apply? o This usually applies when an alien dies in the Philippines.
Basing this on general principle, basing it on the law of nationality of decedent. If based on national law of decedent, it refers back to the law of the domicile (which is the Philippines), then we accept the renvoi and apply Philippines

Llorente v. CA: o A married Filipino man joined the US army and became a US citizen. He divorced his wife after his wife cheated on him.
The divorce was valid because under American national laws, he could initiate divorce.
Human relations

Pardo de Tavera case
– human relations chapter are just general concepts guiding particular human conduct. In the absence of any specific law or contract, then you use these provisions. You cannot immediately use these provisions, if there is a specific governing law or contract.

Chato v. Fortune Tobacco Corp: o In order for Art. 32 to apply, where a private individual can hold a public officer personally liable of an act or omission only if there is a particular injury to that person .

Duty to act with justice, observe honesty, and good faith: o Every person in the exercise of his rights and in the performance of his duties must act with justice, give everyone his due, and observe honesty and good faith.
o Lorente v. Sandiganbayan: An official who cleared three other terminated employees for unpaid liabilities (which is offset by gratuities later) and then suddenly “went legal” on another employee for no apparent reason was not acting with justice, honesty, good faith.
o Leads to civil liability even if perfectly legal.

What is the difference between Art 20 and 21?
o Article 20 has to be contrary to law. Article 21 is legal, but contrary to morals, public policy, customs.
o Article 20, the act is either done willfully or negligently. Article
21, intentional.

Article 21 – breach of promise to marry. Is there any law that says you have to comply with the promise to marry?
o No. You cannot demand for specific performance that the other marry you.
o But you can recover actual damages for expenses, such as down-payment for venue, dress, food, etc. But not moral damages, in general.
o Exception: moral damages when there is deceit or fraud.
(Baksh case)

There was breach of promise to marry. The teacher became pregnant, and was dismissed from her job because she got pregnant without a husband. Can she recover from the man loss of income?
o Yes (old case).
o But now, you cannot be dismissed for this anymore, so it’s moot.

Hospital expenses
– who is liable?
o Shared expenses, since it takes two to get pregnant.

When are moral damages allowed?
o Criminal or moral seduction.
Provisions Dean Del just breezed through:
1.
Unjust enrichment a.
Garcia v. PAL: If a dismissed employee is reinstated, and then the reinstatement is reversed, the employee is not bound to return salaries received. This is a case where social justice outweighs unjust enrichment provisions.
2.
Less in life = more in law
3.
Thoughtless extravagance
4.
Violation of privacy
Public officers


Articles 19-21 bind even public officers. Take note. Though there are specific provisions.

Can a public officer invoke acting in public capacity as a defense?
o Aberca v. Ver o No. “Your official function does not include acting with injustice and being unfair”

What actions can you file against public officers?
o Action for nonfeasance

But this action cannot be brought against those officers exercising ministerial functions, ex. Register of Deeds o Violation of basic rights o Policemen
– failure to come to the aid of persons in danger
Civil liability in criminal prosecutions

Civil liability is always included

There is a distinction between being acquitted – o For reasonable doubt: there is still civil liability o Because one did not commit the crime: no civil liability

General rule: civil case is simultaneously filed along with criminal case.
Criminal case suspends separate civil action.

Independent civil actions o NOT suspended upon filing criminal case. o When a civil case is filed ahead, it proceeds independently and need not wait for resolution of the criminal case. o Assuming the criminal case is instituted ahead, the civil case can still be prosecuted separately.

Prejudicial questions: o Opposite – suspend criminal case, and wait for civil case to be resolved first, which is determinative of guilt or innocence of accused in the criminal case. o Questions on annulment or nullity of marriage are NOT prejudicial questions for bigamy. Because now, before you get married, you need a judicial declaration of nullity for the prior marriage. o Classic case: ownership of property v. crime of theft. o Ching
– civil case was for annulment of K, and criminal case is for violation of trust receipts law. HELD: not considered as prejudicial question because the criminal case can still proceed, because the act can be considered as ordinary estafa.
Persons
Natural persons

Juridical capacity o Passive subject
– the ability to be the subject of legal relations o UPON BIRTH o Exceptions: unborn fetus

(A) Beneficial
 (B) subsequent birth o Birth
 7 months + = just born alive

Less than 7 months = survive for 24 hours

Capacity to Act o 18 years old, in general
 Although you cannot marry without consent of parents

End of judicial capacity AND capacity to act = upon death of person

Doubt as to who between two or more persons called to succeed each other, as to who died first, whoever alleges the death must prove it o PRESUMPTION: died at the same time
Juridical persons

Birth and death: from when created by law or for ordinary corporations, upon registration/dissolution
Restrictions and limitations

Mere restrictions, which do not exempt the person from certain obligations: o Minority, insanity and imbecility, deaf-mutism, prodigality, civil interdiction o [For juridical persons – this is the issue of ultra vires acts]

Modifications, which affect a person depending on the type of transaction, who one is dealing with: o Age (because it is not minority per se), etc. (See Art. 39)

o Ex. foreigners’ ownership of land
Domicile

* Very little relevance in civil law now, but usually just for elections, etc.

Domicile – place of habitual residence; based on intention and actual connection

Residency
– based on actual facts

Domicile is acquired from moment of birth o Legitimate child
– domicile of parents (correct the reviewer) o Illegitimate – of mother o Legitimated – of parents o Foundling – wherever found

One never loses a domicile under a new one is acquired.

It is possible to be without residence, but one always has a domicile

Domicile of juridical person o Provided in charter o If none, place of business or place of legal representation

PERSONS AND FAMILY RELATIONS
M
ARRIAGE

Took effect 3 August 1988 o Does not change the regime of property relations of those who got married prior to the FC o But those who selected CPG, they are affected by the new provisions as to this property relation, post 3 Aug 1988

Definition of marriage (elements) o 1. Special contract
 Compare and contrast marriage from ordinary contracts?
 As a general rule, ordinary contracts are subject to parties’ stipulations, as long as not against law, PP, morals. But marriage contract is governed by law, and is only subject to stipulation for regime of property relations
– at the moment of marriage. o 2. Permanent union
 Only terminated by death
 Grounds for voiding or avoiding a marriage: because the marriage was never deemed to have existed o 3. Between man and woman

Note: P v. Silverio and other spec pro cases on change of sex in registry o 4. In accordance with law o 5. Purpose: establish conjugal and family rights
Essential and formal requirements of marriage:

Effect of absence or defect: o Essential:

Lack/absence
– void
 Defect – voidable o Formal:
 Lack/absence – void
 Irregularity – still valid, but the person responsible is liable
What are the essential and formal requisites of marriage?

Essential requirements: o 1. Legal capacity
 A) Age

Under 18: void

18 to under 21: need parental consent o Without: voidable o Whose consent is required?
Ideally, both. But one is allowed to decide, if one is absent, has passed away, lost capacity, etc. Ignore the provision on legal guardians here, because upon turning 18, then he already has legal capacity.

21 to under 25: need parental advice o Without: issuance of ML is delayed for three months
 B) Sex
 C) Absence of legal impediments: (see full discussion below)

37. Incestuous relationships

38. Relationships against PP

35. Prior existing marriage

36. Psychological incapacity

52, 53. Failed to comply with distribution of properties and presumptive legitimes
 Is there such a thing as defective legal capacity?
No, it’s either you have it or not. o 2. Consent freely given
 Before a solemnizing officer, at the time of the celebration of marriage
 Do you have to speak out your consent? No need to verbally explicate it; as long as you can communicate your consent effectively to the solemnizing officer

Is there such a thing as defective consent? Yes, when it is vitiated. Ex. when one is of unsound mind.
A person actually said yes, but there was problem in the voluntariness.


Is it possible for a party not to give consent at all?
No. Ex. mistake in identity
– there is total absence of consent.

Formal requirements: o 1. Authority of solemnizing officer

When does the good faith exemption apply, and when does it not?
Will NOT apply for mistakes of law, such as if you thought one designation of people
(ex. president or senator) can solemnize a marriage, when in fact he cannot. It applies to mistakes of fact.
(ex. you thought the janitor posing as a priest was the parish priest.) Also, even if only one party believed in good faith that the solemnizing officer had authority, the marriage is valid.

If the solemnizing officer committed fraud or an irregularity in obtaining authority, it has no validity in the marriage solemnized. o 2. Valid marriage license

A party thinks that the marriage license is valid, when it is not. Can the rule on good faith apply?
No. There is no good faith exemption for marriage license. The exceptions provided by the FC are not based on GF, but on law.
 Aranes v. Occiano: A ML gotten after a marriage without an ML does not cure the lack thereof. It is still void.
o 3. Marriage ceremony
 There is no particular requirement for the ceremony, except for:

1. Both must personally appear before the solemnizing officer
 2. Must openly declare that they take each other as husband and wife
 3. Two witnesses of legal age

In the absence of two witnesses, what is the effect? Is it an absence or an irregularity? No resolution yet.

Other requirements: o 1. Marriage certificate

What is this?
The document signed after marriage ceremony. It is the evidence of the celebration of marriage. This is neither a formal or essential requisite. It is merely evidentiary, although the best evidence.

What is the difference between a ML and a MC?
The absence of a ML results in a void marriage. The absence of a MC will not affect the marriage.
o 2. Place of celebration
 What about article 8?
It is merely directory. If the solemnizing officer agrees to marry you in another place, then it is perfectly fine.

Is there any instance where the place of the celebration of marriage affects the marriage?
Yes, for those marriages celebrated by persons with limited jurisdiction. For instance, the ship captain or airplane captain can only solemnize the marriage in the vessel or during a stopover. For instance, for military commanders, it must be within the zone of military operations.

What about members of the judiciary?
Within their judicial region. If it is SC, CA, or Sandiganbayan, it is nationwide.
 What is the effect of marriages celebrated by judges outside judicial regions?
As of now, it is a mere irregularity, according to the SC. This rule is different as opposed to ship captains, etc. (Navarro v. Domagtoy)

Can this decision apply to mayors? For instance, the mayor of Makati solemnized a marriage in QC.
According to Dean Del, the SC rule on judges must not extend to mayors
– they must strictly comply with their territorial jurisdiction.

Legal impediments (in depth) o A) Incestuous relationships:

1. Ascendants and descendants, regardless of degree

How many degrees does this rule cover?
Unlimited.
 2. Brothers and sisters, whether full or half blood

o B) Marriages against public policy

By blood:

1. Between collateral blood relative, up to fourth civil degree (whether legitimate or illegitimate)
 Created by marriage:
 2. Between step-parents and step-children

NOTE: no prohibition for step-brother and step-sister

3. Between parent-in-law and children-in-law

If your wife dies, can you now marry your parent in law?
No. Not even death terminates this relationship. Not unless you terminate your marriage first through court declaration that the marriage was not valid in the first place.

Created by adoptive relationship:
 4. Adopter and adopted
 5. SS of the adopter and adopted
 6. Adopter and SS of adopted
 7. Legitimate child of adopter and adopted

NOTE: the reason is because legitimate children are asked to give their consent to the adoption. Illegitimate children are not asked.

Hence the illegitimate children and adopted children may marry.

8. Between adopted children of same adopter

Created by criminal intent
 9. When one party kills his own spouse or the other party’s spouse, with the intention of marrying the other

If the killing was to obtain insurance benefits, but there was subsequent marriage, is the latter valid?
Yes, because the killing was not with intent to marry.
o C) Prior existing marriage
 What if the prior marriage has a problem?
There must still be a judicial declaration that the prior marriage is a nullity or is annulled. You have to wait for this.

Wiegel v. Sempio-Diy: Need to have prior judicial declaration of nullity or annulment first, or else the second marriage is bigamous.
 If the purpose is some other thing, like succession issues, then there is no need for prior judicial declaration prior to questioning the marriage.
Authority of solemnizing officer:

Who can solemnize: o 1) Any member of the judiciary, as long as:
 Incumbent

When does incumbency start?
From when one has taken his oath of office.

What if the judge was on leave or is on vacation? Still incumbent.

Is there a need for further authority or license? None; it is an inherent function of office.

Within territorial jurisdiction
 Who in particular? RTC, MTC, CA, CTA, SC,
Sandiganbayan, etc. Even if their jurisdiction is limited, like the CTA. Contrast this to executive branch, where only the mayor can. o 2) Member of religious group, authorized by religious group.

Is the ordinary per se coming with the authority to solemnize marriage?
No. The authority does not come from the office itself. They need special authority from the group or sect first.
 What is the requirement for the group or sect?
The church, sect or group must be recognized.
 Either or both of the parties must be part of that religion or church.
 What if both are not members of that religion?
Strictly, invalid. But a lot of people are invoking that this is a gray area, where the good faith defense can apply, or one can treat this as a mere irregularity.

o 3) Ship captain or airplane chief
 Who is the captain or chief?
The head of the ship, or the chief pilot.
 When can they solemnize marriages?
In articulo mortis, where one or both are at the point of death.

A person is diagnosed as terminally ill, and given two weeks to live. Is he in articulo mortis?
No, the person is not yet at the point of death. Terminal illness is still uncertain.
 Who can they solemnize?

Members of crew or passenger

What about stowaways?

Can still marry them, as long as on board the vessel.
 When and where can they solemnize?

During the voyage, from the point of embarkation, until one reaches the final destination, including stops-over.

The stop-over must be in a continuous flight.
This is different from a break where one disembarked and put down all the luggage and went around already.

For purposes of marriage, do we adopt transportation laws?

No decision yet.
o 4) Military commander
 Who is a military commander?

Commissioned officer, at least second lieutenant up, must be the head of a battalion
 There is a person who is preferred, before the military commander is allowed. Who is this?

There has to be a chaplain assigned to the battalion in the zone of operations, and he has to be absent.

If he is present, then the chaplain must be the one to solemnize.

What if there is no chaplain assigned?

Dean Del prefers the liberal interpretation: when there is no chaplain assigned, then the military commander can solemnize.

What is military operation?

Involves State action. This is different from mere police operations for petty crimes.
 Who?

No need to be a member of the military or a combatant. As long as someone is within the zone of military operation.
o 5) Consuls

No need to be dying

As long as abroad o 6) Mayors

Reinstated in the LGC of 1991
Marriage license

Valid marriage license o What is the consequence of lying in the place of residence?

It is a public document, so one can be charged for falsification of a public document.
 BUT this is a mere irregularity, and should not affect validity o If you lie about your age, and you are not yet 18?

VOID marriage, not because of the irregularity in the
ML, but because of lack of capacity.
Procedure to obtain a Marriage License

1. What do you need to present when you get married (FIRST
MARRIAGE)? o 1. Birth certificate, but just for the purpose of verifying legal capacity based on age. Absent this, you can submit a baptismal certificate.

If none, either:

Residence certificate


Instrument containing sworn declaration of two witnesses of lawful age testifying on this o 2. Additional requirements:
 18-21: consent of parents; order –

Father

Mother

Surviving parent

Legal guardian (but ignore this provision, since when they turn 18, there is no more need for a legal guardian since he is of full capacity.)

What is the nature of the consent given by the parents? The consent is with respect to a specific person. If the child decides to marry someone else, he or she cannot use that same consent.
 21-25: parental advice o 3. Certificate of marriage counseling.

What if one party is 80 years old, but the other is 23? BOTH must attend, even if the other party is older than 25.

Lack thereof results in 3 month suspension of issuance of Marriage License

2. What do you need to present for a SUBSEQUENT MARRIAGE?
o Proof of termination of marriage:

Death certificate
 Judicial declaration of nullity
 Judicial declaration of annulment o If one is previously married but is still 18-21 years old, do you still need parental consent? Not anymore, because the prior marriage has fully emancipated the person. o What about those between 21-25, and this is the second marriage, do you still need parental advice?
Yes, because there is no stated exception of emancipation for prior marriage, unlike for parental consent. This is not anymore based on parental authority, but is based on filial love and respect from parents.

3. What about alien applicants? o The diplomatic or consular officials will issue a certificate of legal capacity . This is usually taken by face value.

4. What about Stateless persons? o For these people without citizenship and if they can prove that they are political refugees, all one needs is an affidavit declaring oneself as having legal capacity. Again, this is taken by face value.

What is the nature of a marriage license? o It is a license to marry a specific person. You cannot use it to marry another person. The impediments and capacities of people are different.
o There is no good faith exemption for a ML. A fake marriage license is no good.

What is the validity of the ML? o For 120 days, then automatically cancelled after o In any part of the Philippines o An expired license is NOT a mere irregularity but an absence of a requirement.
Marriages exempt from requirement of ML
What are the marriages exempt from the ML requirement?

1. Marriages in articulo mortis . o Because there is no time. o The only exemption is the ML. There is no exception as to other essential and formal requisites. o The solemnizing authority determines whether there is legal capacity between the parties to be married. o Can the solemnizing officer refuse to solemnize the marriage?
Yes, the solemnizing officer has discretion to refuse. There is no law compelling solemnizing officers to marry. o Are marriages in articulo mortis exempt from requirement of ML limited to those in an airplane, military operation, etc? No. It can occur anywhere, and the ML requirement is still waived.
o If the person miraculously survives, is the marriage valid?
Yes.


2. People who have been living together as husband and wife for at least five years. o Purpose: to save face, because they have already presented themselves as husband and wife. o When must there be an absence of impediment?
The entire five-year period of cohabitation. (Ninal v. CA) o Another issue in Ninal: do the children have standing to ask for the nullification of the parents’ marriage based on lack of ML?
The court held that the children have standing.
BUT this has been changed when the administrative rules came out. Ninal was decided before these rules came out.
o What are the requisites:
 1. Exclusivity – absence of 3 rd parties

2. Continuity
– cohabitation as husband and wife 5 years immediately preceding marriage

3. No impediments during the 5 year period

3. Parties who live in a remote place o Ratio: no means of transportation to get to LCR o Not based on distance: it doesn’t matter how many kilometers there are. What matters is lack of means of transportation. o Means of transportation need not be public.

4. Muslims and cultural minorities o Look into customs, rites, practices

For marriages in articulo mortis and where a party lives in a remote place, the law requires that the solemnizing officer state the circumstances of the marriage in an affidavit. What is the effect of the lack of such?
o No effect. It is merely evidentiary. It is not a replacement to the ML requirement.
Marriages celebrated outside the Philippines

What is the general rule?
o Art 26: Lex loci celebrationis. When the marriage is valid in that country, it is valid in the Philippines.

Does this provision apply to marriages of aliens outside the country? o No. It doesn’t matter, our law doesn’t care. Their own national laws determine whether the marriage is valid.

Two Filipinos get married outside the country. Do we apply Art
26? o Yes.
o Art 26 only applies ONLY when at least one of the parties is a
Filipino.

What are the exceptions to this rule? o Art 35 (1, 4, 5, 6), Art 36, Art 37, Art 38

(1)
– under 18

(4)
– bigamous
 (5) – mistaken identity
 (6) – void under Art 53 o All of these exceptions deal with the essential requisites of marriage. But as to the formal requisites, then that is determined by the law of the place where the marriage is celebrated.

What if two male people get married abroad? o No settled rule yet.

What is the rule on divorces obtained abroad? o If the alien obtained a divorce decree abroad allowing him to subsequently remarry, then the Filipino may remarry as well.
o Van Dorn v. Romillo and Pilapil v. Ibay-Somera

In Van Dorn, alien husband got a divorce abroad, but sought to administer community property in the
Philippines. The basis of the court was estoppel
 Pilapil: “she is married to you but you are not married to her”

NOTE: both cases were decided before the Family
Code

Requisites ?
o 1. Marriage between Alien and Filipino o 2. Alien files for divorce o 3. Divorce decree capacitated the alien to remarry

What if the Filipino obtains the divorce?
o Not allowed. The article only applies if the alien was the one who obtained the divorce.

The requirement that one is an alien and one is Filipino: must it occur during the time of marriage, during the time of divorce, or both?

Time of marriage Time of divorce Effect
2 Fil
2 Fil
2 Fil
2 Fil
1 Alien, 1 Fil
2 Aliens
X
Old view: not allowed to circumvent the law through this
NOW: the Alien is not anymore under our jurisdiction, so he can obtain divorce. Then Art. 26 applies.
Amor-Catalan case: recognize as being a divorce entered into by 2 aliens. Art. 26 does not apply because there is no Filipino to equalize.
1 Alien 1 Fil
1 Alien 1 Fil
1 Alien 1 Fil
2 Aliens
Art. 26
Valid as well
Difference between void and voidable marriages:
VOID
Inexistent from the beginning
Does not prescribe
No ratification
No community property. Only coownership.
Directly or collaterally attacked
[ but subject to recent rules: check discussion below ]
VOIDABLE
Valid until annulled
Generally, 5 years prescription
May be ratified by free cohabitation or prescription
ACP – unless provided otherwise
Must be directly attacked

The common statement is that void marriages can be collaterally attacked. But what does Art. 40 say?
o Art. 40 – For purposes of remarriage, one has to obtain a judicial declaration of nullity. o So there has to be a direct proceeding. You cannot do this by collateral attack.

RULES ON STANDING re: nullity – o SC 02-11-10 – only husband and wife have standing in a direct action

EXCEPT: a) for those commenced before 15 March
2003, b) marriages under CC

EXCEPT: for intestate and testate proceedings, allow collateral attack
 So the rule in Ninal was technically not changed o BUT the main determinant is whether the person has standing
(as in an heir) o In Carlos v. Sandoval, since the one questioning was the brother of the deceased, it doesn’t matter if the marriage was valid or not because he only inherits in default of descendants or ascendants.

What are the grounds for nullity? o Arts. 35, 36, 37, 38

When is a marriage entered into without termination of a previous marriage valid?
o When there is a declaration of presumptive death. Article 41 is the only article which provides for a situation where there can be 2 valid subsisting marriages.
 Four years for ordinary situations

Two years for extraordinary situations o The declaration is not of DEATH but of PRESUMPTIVE
DEATH. o This takes the place of the usual requirement of death certificate to allow the other spouse to remarry.
 The declaration of presumptive death obviously only empowers the present spouse to remarry. o For other grounds, any subsequent marriage is automatically null and void .
Art. 41

What if the spouse who was declared presumptively dead reappears? o If no one does anything, we have a situation where there are two valid subsisting marriages o Reappearing spouse files an affidavit of reappearance

But other people may file an objection to the affidavit


If there is no objection: then the subsequent marriage is deemed terminated upon filing of the affidavit

Who can file
– reappearing spouse or persons interested (ex. children in first marriage)
 Legal effect: not void ab initio , just terminated o If there are objections, then a court of law must rule on the objections. The LCR cannot rule upon the objections. o What is the basis for objection or opposition?
 The only basis: “this is an impostor.” o Is there a prescriptive period for filing an objection for the affidavit of reappearance?
 These questions have not been settled yet.

What is required to be proved in declaration of presumptive death? o Proof that there is reasonable ground to believe that the spouse has died.
o Republic v. Nolasco: Not enough to just ask people around and say that the people haven’t seen her to prove that a person is presumptively dead. Need more than that.
Mistake in identity as ground for nullity

Spirit of provision
– consent to marriage is for a SPECIFIC person. If there is mistaken identity, there is no consent.

This is NOT mistake in particulars of a person (ex. you thought he was rich, but he was actually a pauper)
Psychological incapacity

One that has a lot of cases. Members of the committee who drafted the
FC did not define what psychological incapacity. They wanted jurisprudence to develop the concept.

What is the distinction between physical and psychological incapacity?
o Psychological incapacity is NOT physical incapacity, which is impotence. It is a ground for voidable marriage only. o It is NOT mental incapacity, which is also for voidable marriage.

What is psychological incapacity?
o He is normal under any other circumstance, but he cannot carry out the essential obligations of marriage o “Narcissistic complex” o Inability to perform obligations to the spouse and obligations to the family (220, 221, 225)

Santos: It was a cut and paste case from different sources. In the end, it did not say how we should define it in the Philippines. Only value is that it gave the 3 requirements: o 1) gravity o 2) juridical antecedence o 3) incurability

There is no case yet where the court says that psychological incapacity is such that he will never be able to perform marital obligations. So after declaration of nullity, both parties can still marry again. So psychological incapacity is relative.

Molina: Eight point test. This is the first case where the court actually set down, point by point, what one should look for to establish Art. 36: o 1) plaintiff has burden of proof to show P.I. o 2) Root cause must be something medically proven and clinically identified and clearly explained in the decision

This has received so much flip-flopping from other decisions o 3) it must exist at the time of the celebration of the marriage o 4) the PI is incurable [ from Santos case ] o 5) it is grave and it prevents him from performing essential marital obligations

Molina included obligations to family and children too, not just to the spouse o 6) Essential marital obligations are Arts. 68-71 of FC, and Arts.
220, 221, 225 of FC o 7) Interpretation of the National Marital Tribunal must be given weight
 But its decision is not public in character; so its effect is really just to the parties, and is not jurisprudence

Paras: This should be the case to read if you want to know what is NOT psychological incapacity. In this case the manifestation relied upon is infidelity of the spouse, going out having drinks with friends, falsifying signature – all these were struck down by Paras


Marcos v. Marcos:
You don’t need to have a psychiatrist or psychologist to examine the party. Absence of such is not fatal. What you need is the totality of evidence . (Totality of evidence approach)
You can use whatever evidence to prove PI.

Te v. Te: Courts must be allowed to make a decision on a case-by-case basis without being tied down by the Molina requirements. This came out strong. “Molina gave us a straitjacket and we don’t want this.”

Suazo v. Suazo : You don’t have to be strictly bound by cases ( open case policy ). “We are not throwing away Molina” but the court must be open to situational differences. o The SC is not bound to accept with finality the findings of fact by the TC.

What is the end result of all this jurisprudence?
o It is still case-to-case. There is no set doctrine.
Declaration of nullity

Domingo v. CA: o Judicial declaration of nullity only needed for remarriage. o Otherwise, no need for judicial declaration to establish nullity of the marriage.

Tamano v. Ortiz: o RTC has jurisdiction over all actions relating to marriage and marital relations. o Jurisdiction based on allegations of the plaintiff in the complaint; not dependent on the defenses set up. The complaint said that the parties were married under the civil code.

Ninal v. Bayadog: o There must be no impediment or interruption in the five-year cohabitation period in the marriage license exemption.
o Declaration of nullity may be collaterally attacked after the death of either party. (Ex. heirs, in succession.)

De Castro v. De Castro o As in Ninal, the nullity of a void marriage may be established even collaterally in an action not for that purpose. (ex. support). Here, the affidavit stating circumstances establishing
5-year cohabitation contained false statements; hence, there was no ground to exempt from ML requirement. No ML = void.
Declaration of nullity v. bigamy

Marbella-Bobis v. Bobis o The question of nullity of a previous marriage not judicially declared void is NOT a prejudicial question to a charge of bigamy. The marriage lawfully subsists.

Mercado v. Tan o Subsequently getting a declaration of nullity will not invalidate a conviction for bigamy.

Morigo v. People o The parties merely signed a marriage contract on their own, without any ceremony – there is no semblance of any valid marriage. No need for prior declaration of nullity. Bigamy dismissed.

Tenebro v. CA o The subsequent declaration of nullity of the second marriage under Art. 36 does not negate the criminal action for bigamy.
(The mere act of contracting a second marriage during the first’s subsistence is punishable.) Article 36 marriages are not completely without effect (ex. legitimacy of children). So this means that there can be prosecution for bigamy.
Voidable marriages
Grounds
1.
Lack of parental consent a.
Who has standing? i.
Parent/guardian who did not give consent ii.
Party whose parent/guardian did not give consent b.
What if both parties didn’t get parental consent? i.
Both can file, separate or joint ii.
Pari delicto doesn’t apply c.
When can the party who didn’t get consent file? i.
Upon reaching 21 years old d.
When can the action be filed? i.
BEFORE reaching 21
– parent or guardian who didn’t consent

ii.
UPON reaching 21, until 26
– party whose parent or guardian didn’t consent e.
How is marriage ratified? i.
Free cohabitation by the parties upon reaching 21. f.
Specific rules on form of consent: i.
Mere attendance in wedding is not automatically consent. Must be in ML application. ii.
Consent must be before wedding.
2.
Insanity a.
When should insanity exist?
i.
Time of marriage b.
When is there a presumption of insanity? i.
If the party was insane right before and after the precise moment of giving consent. c.
Who may file? i.
Sane spouse
– if no knowledge of insanity ii.
Relative, guardian, etc.
1.
No need to have no knowledge of insanity iii.
Insane spouse d.
What are the periods? i.
Sane spouse – 5 years from discovery of insanity of the other spouse [because no period was provided] ii.
Relative, guardian, etc.
1.
Anytime before death of either party iii.
Insane spouse – 5 years from regaining sanity
[because no period was provided] e.
How is the marriage ratified? i.
Free cohabitation by the parties upon regaining of sanity by the insane spouse
3.
Fraud a.
Grounds: i.
Non-disclosure of a previous conviction by FJ of the other party for crime involving moral turpitude ii.
Concealment by wife that at the time of marriage, she was pregnant with another man iii.
Concealment of STD, regardless of nature, at time of marriage iv.
Concealment of drug addiction, habitual alcoholism, homosexuality, lesbianism at time of marriage b.
No other misrepresentation is ground for fraud. c.
If the conviction is pending appeal, is the non-disclosure fraudulent?
i.
No. It must be by FINAL judgment. d.
What if the crime was alleged in the same annulment case? i.
Can’t apply because there must be previous conviction by final judgment.
e.
Ratification? i.
Free cohabitation upon knowledge of fraud
4.
Force, intimidation, undue influence a.
Intimidation: must be evil and imminent and based on a wellgrounded fear b.
What if intimidation has a legal basis?
i.
It does not count. Ex. “I will prosecute you for rape,” and the guy really committed rape anyway. c.
Prescriptive period?
i.
5 years from cessation of cause d.
Standing? i.
Injured party e.
Ratification? i.
Free cohabitation after cause ceases.
5.
Impotency a.
Potency must be at the point of marriage. Becoming impotent after is not a ground for annulment.
b.
What if both are impotent? i.
Sempio-Diy: there is no “injured party” ii.
Dean Del: both are injured parties and can file c.
Period? i.
5 years after marriage d.
Cannot be ratified by cohabitation.
6.
Serious and incurable STD a.
Differentiate: if it is a ground for fraud, it has to be concealed, but it need not be serious or incurable b.
Who can file? i.
Injured party c.
Cannot be ratified by cohabitation

Ground
Lack of parental consent
Insanity
Fraud
Force, intimidation, undue influence
Impotence
Serious and incurable STD
Who can file When
Underaged party Within 5 years upon turning 21
Parent, guardian who did not consent
Sane party
Until child or ward turns 21
Insane party
Parent or guardian, relative of insane party
Injured party
Injured party
Potent party
Healthy party
Within 5 years of discovery of insanity
Within 5 years of lucid interval
Before death of either party
5 years from cessation of cause
5 years from cessation of cause
5 years from marriage
5 years from marriage
Ratification
Yes, but only upon reaching
21
No
Yes, but only in a lucid interval
Yes
Yes
No
No
Procedure and effects of termination of marriage
Procedure

For all cases of nullity or annulment: o Court orders prosecutor or fiscal to appear on behalf of the
State o Take steps to:

1. Prevent collusion between parties

2. Make sure evidence snot fabricated or suppressed

No judgment based on stipulation of facts or confession of judgment

Pendency of action: o Follow written agreement between spouses o 1. Court provides for support of spouses o 2. Custody and support of common children

Consider mutual written agreement first

Consider best interest of children

And Tender Years Doctrine
 And choice of parent
 Visitation rights for other parent
Effects, et. al.

Effects: o 1) share of party in BF over net profits forfeited in favor of:

Common children

If none, children of guilty spouse in previous marriage
 If none, innocent spouse o 2) donations propter nuptias: valid
 Donations in favor of guilty spouse revoked by operation of law o 3) designation of guilty spouse as beneficiary in life insurance: may be revoked
 Even if deemed irrevocable o 4) spouse in BF cannot inherit from innocent spouse by testate or intestate succession o 5) if both spouses guilty, revoke by operation of law:

Donations propter nuptias to each other

Testamentary dispositions to each other

[N.B. these two provisions were just included because
Art. 43 mentions an innocent and guilty spouse; in Art.
44, both are guilty]

Final judgment provides: o 1) liquidation, partition, distribution of properties of spouses

Includes adjudication of common lot o 2) custody and support of common children o 3) delivery of presumptive legitime
 Computed based as of date of final judgment
 Delivered through cash, property, or sound securities

Unless there was a judicially approved mutual agreement
 Who may ask for enforcement of judgment:

1. Children


2. Guardian

3. Trustee of property
 Will not prejudice ultimate successional rights – delivered presumptive legitimes are deemed advances

Record judgment, partition, distribution, delivery of presumptive legitime
 OR ELSE , it will not affect third persons o Register in appropriate civil registry o Registry of properties in places where they are located

NON COMPLIANCE with this

any subsequent marriage is null and void

Which children are legitimate: o Those born before annulment o Those born before Art. 36 nullity o Those born of subsequent marriage which doesn’t comply with
Art. 53 (registration) o Also, those who were born before reappearance of presumptively dead spouse
 “SUPER DOCTRINE” c/o Breakfast Club, who painstakingly analyzed this particular provision: o When do you not have to deliver presumptive legitime?
 1. Legal separation (because marriage not dissolved)
 2. Death (failure to liquidate and stuff will only make dispositions post-one-year void and mandate separation of properties for marriage #2)

3. Presumptive death (which has the same effects of death)
L EGAL S EPARATION
Grounds:

Violent stuff o 1. Repeated physical violence or grossly abusive behavior v. spouse, common child, or child of spouse o 2. Physical violence or moral pressure to change religious/political affiliation o 3. Attempt to corrupt or induce to engage in prostitution: spouse, common child, child of spouse

Or connivance in such o 4. Attempt against the life of spouse

Character stuff o 5. Final judgment of more than 6 years in prison
 Even if pardoned o 6. Drug addiction or habitual alcoholism o 7. Abandonment of spouse without justified cause for more

Sex stuff than a year o 8. Lesbianism or homosexuality o 9. Contracting bigamous marriage o 10. Sexual infidelity or perversion
Defenses:

1. Condonation o Forgiveness/pardon o May be express or implied o Sexual intercourse is implied condonation
 But not when it was just to save the marriage, and it was unsuccessful o Each sexual intercourse with another person is a separate act of adultery. Forgiveness for the first does not extend to subsequent acts

2. Consent o Express or implied o Prior to the act o Agreement between spouses against law and morals may be null and void, but it may be considered consent that would bar litigation.

3. Connivance o “Luring” but not entrapment

4. Mutual guilt o May be on different grounds o Even when one party has pardoned the other and the other has not

5. Collusion o Agreement between the spouses

o Covered by proscription of legal separation based on stipulation of facts

6. Prescription o Even if not alleged, court can take judicial notice o If there are multiple acts, count from the last separate act o From knowledge of the ground, not just from mere hearsay

Prescription: within 5 years of occurrence of cause
Procedure
 “Cooling off period” o Only try an action for LS after 6 months have elapsed since filing of petition

Court must take steps towards reconciliation of the spouses, and satisfy itself that despite such efforts, reconciliation is highly improbable

No decree of LS based on: o Stipulation of facts o Confession of judgment

Prosecutor or fiscal assigned to take steps to prevent collusion between parties and ensure evidence is not fabricated or suppressed
Effects pendente lite/after finality

Pendency o After filing petition:
 Spouses entitled to live separately from each other
 Administration:

Based on written agreement

If none, court designates either or a third person

Same powers and duties as those of a guardian o Support of spouses
 Lerma v. CA: The court may make a preliminary ruling of the case during its pendency, to determine whether support is justified. In this case, where one spouse was adulterous, the court deemed it proper to deny him support pendente lite.

Sabalones v. CA: A decree of LS was issued, where the husband was denied share in the profits and denying him support from the wife. The husband appealed. Pendente lite of the appeal, the wife filed a petition for preliminary injunction against the husband alienating conjugal properties. The court said this was valid to preserve the wife ’s rights in the pendency of the appeal o Support and custody of children

Effect of death of a party: o Action is dismissed o Since action is purely personal between the spouses o Lapuz v. Eufemio:

Spouse died during pendency of LS case. The proceeding was dismissed. o Macadangdang v. CA:

Spouse died after the decree of LS was issued but before liquidation. The LS was deemed final o However, now Rules say that if this happens, the decision in the LS case, where there has been entry of judgment is final and binding, and will be accorded such finality in the settlement of the estate proceedings. o Dean Del’s interpretation: Because the finding in LS case is final, even in the settlement of estate, one may invoke forfeiture provisions. o You don’t do liquidation and partition in the same LS case anymore when one party dies after entry of judgment. But the decision of the LS case is already final and binding in the settlement of estate proceedings of the deceased person.
(IMPT!!)

Effects of decree: o 1. Spouses entitled to live separately o 2. Dissolve ACP or CPG

Offending spouse not entitled to net profits
 Siochi v. Gozon: what is forfeited are net profits and not the undivided share in the community property o 3. Custody of minor children to innocent spouse

o 4. Disqualify offending spouse from inheriting by intestate succession AND revoke testamentary provisions by operation of law

Optional effects: o 1. Innocent spouse may revoke his or her donations to offending spouse  FIVE YEAR period

Record revocations in the registries of property where located

Alienations, liens, encumbrances prior to recording the revocation are respected o 2. May revoke designation of spouse as beneficiary in life insurance policy
 Takes effect upon written notification to the insured o [N.B. so while life insurances are still optionally revocable, the difference between Art. 43/44 and this provision in LS
 donations are just revocable here]
Reconciliation

Procedure o Joint manifestation under oath o Signed by both o Filed with court in same proceeding

Effects: o If proceedings pending, terminate in whatever stage o If final, set aside final decree o What shall persist:
 Separation of property
 Forfeiture of shares o UNLESS spouses agree to revive former property regime

Agreement to revive former property regime: o Under oath o Will specify:
 1. Properties contributed anew to restored regime
 2. What are retained as separate properties of each spouse

3. Names of all known creditors (addresses, amounts) o Filed in the same proceeding for legal separation
 Copies furnished to creditors

Creditors protected by court o Record order in proper registries of property

Will not prejudice a creditor not listed or notified

Unless debtor-spouse has sufficient separate properties to satisfy debtor’s claim
R IGHTS AND OBLIGATIONS BETWEEN HUSBAND AND WIFE

Became important due to Molina doctrine (if you cannot perform these, it can indicate psychological incapacity)

Obligations: o 1. Live together o 2. Mutual love, respect, fidelity o 3. Render mutual help and support

Family residence: jointly fixed by husband and wife o Otherwise, court decides
 If you don’t want to live in the same dwelling, what is the consequence?
o As a rule, they must live together. If they cannot, they go to court, and ask for an exemption. Can only be granted exemption for valid and compelling reasons. o Consequences:

You are not going to be entitled to support.

You can be charged with abandonment.
 There can be transfer of administration
 “Respect”: o Lack thereof can lead to criminal and civil consequences o Includes the woman being allowed to work and exercise her profession o When can a spouse object to profession?
 Valid, serious, moral grounds

What happens when you incur liability pursuant to this profession objected to? Who bears the liability and charges? o RULE: no prior consent necessary o This should be the rule:

Before any objection

absolute community
 After objection  liabilities towards separate property o BUT this is what was erroneously printed:
 Before any objection  separate property

o Nancy Go case: obligations charged against separate property.
Principle: because this is a separate endeavor by the liable spouse and the contract cannot bind both spouses. (This is the fall back analysis)

Support of the family comes from: o 1. Community or conjugal property o 2. Income from separate property o 3. Separate property
Administration of community properties

Who is the admin of the community properties? o Spouses, jointly o Regardless of ACP or CPG

There are certain cases where it is possible for one spouse to have admin of the community property. When does this happen?
o Before the marriage
– place in the marriage settlement that the
H or W alone will administer the property. o During the marriage –
 In case of disagreement, decision of H prevails. No need to go to court for this.

What is the relief the wife and ask for in court?

Must establish in court that it amounts to mismanagement and it prejudices the community property

Can ask for receivership, transfer of admin, or in extreme cases, separation of property

NOTE: NOT to overturn the husband, but to get certain reliefs (stated above) o Need approval of court

became guardian of the other spouse, etc. o ONLY ground where there is no need for court approval: when there is incapability of spouse to jointly administer

Acts of ownership: o Both spouses MUST give consent.

Other spouse must give written consent
 Or there must be court order o Ex. selling the house. o Ex. making donation, except for small donations o What is the effect if one of the spouses does not give consent to these acts?
 It’s void.
 It’s a continuing offer from the spouse who gave consent and the third party.
 It can be validated by the objecting spouse’s consent. o How much time does the non-consenting spouse have?

The law does not provide. But the parties (consenting spouse or third party) may withdraw the offer any time.

Rule on donations? o General rule: cannot donate to each other o To third party: must be a joint act

Except moderate donations for charity or family rejoicing

What about making a donation to the children? o As long as it is for education, etc.
o But it would need consent of the other spouse.
o Otherwise, still valid, but charged to the separate property of the other spouse.

Management of household: o Used to be traditional role of wife.
o Now, it is a joint role between both spouses.

On professions: o Either spouse may exercise any legitimate profession without consent of the other.
o Only grounds to object: valid, serious, moral grounds o In case of disagreement:
 1) Court decides whether objection is proper
 2) Court decides whether benefit accrued to family before objection or not

If benefit prior to objection  obligation enforced against community

If after

enforced against separate property of spouse who did not get consent
P ROPERTY RELATIONS BETWEEN HUSBAND AND WIFE

How governed
In the ff order:
1.
MS executed before the marriage
2.
FC provisions
3.
Local customs
Marriage settlements (MS)

When can you enter into marriage settlement? o Anytime before you celebrate marriage.
o And as long as you have legal capacity to enter into contracts o And as long as the marriage takes place after

Can the parents enter into a marriage settlement on behalf of minor children? o No, it must be the parties themselves who enter into the contract.
o If it’s 18-21, the parents must be part of the marriage settlement.

When can there be a change of property regime? o 1, separation of property o 2. Legal separation o 3. Ordinary dissolution

Is there need for judicial approval? o No. Only need to register with the civil registrar o To bind third persons
 If the marriage doesn’t take place, what happens to the MS?? o Void.
o Except for provisions not dependent on the marriage taking place (ex. recognition of children)

Formalities? o 1. In writing
 Else, unenforceablee o 2. Registered in civil registry  to have effect on third parties

Choices: o 1. ACP o 2. CPG o 3. CSP o 4. Other regime

ACP governs: o When none chosen o When regime chosen is void. Examples:
 Prohibited one party from marrying another, or a second marriage for surviving spouse

Spouses live separately

Imposing fine on infidelity

Depriving parties from asking for LS when there is sufficient ground to do so
 Third person will manage conjugal properties
 All properties of the wife belong to the husband

N.B.
Invalidity of some provisions will not nullify valid ones.

When a regime is chosen, all properties are governed by that regime.
Cannot exclude particular properties from the regime.

When parties expressly rejected ACP but did not agree on any system to govern: o Determine intent of the parties. If it cannot be ascertained, then apply local custom. When there is no local custom, apply co-ownership.

Any modification in marriage settlements are valid only if made before the celebration of marriage. o Subject to exception: judicial separation of property
 In any case, the only change is from ACP/CPG 
CSP, with court approval

There can be no situation where CSP changes to
ACP or CPG because what is only allowed is revival of the old property regime o Extrajudicial agreement between spouses to separate their properties: void

Formal requisites for MS: o 1. In writing [private/public document, but it must be public document for it to be registered]

If not in writing

unenforceable
 Can compel to be reduced to writing o 2. Signed by the parties


NOTE: general rule is ONLY the future spouses are parties to the MS o 3. Executed before the marriage o 4. Those who need parental consent

make parents party to the MS
 Otherwise, MS is void (for lack of consent) o 5. If under civil interdiction or disability  make guardian party to the MS

Otherwise, MS is void

To affect third persons: o 1. All above requirements o 2. MS registered in LCR where marriage contract is recorded and in the property registries of property o N.B.
or else, as to these third persons, ACP will be presumed to govern

General rule: Property relations of spouses governed by Philippine laws o Regardless of place of celebration of marriage o And regardless of residence o In absence of contrary stipulation in MS

Exceptions: o 1. Both spouses are aliens o 2. Extrinsic validity of contracts affecting property located abroad, executed there o 3. Extrinsic validity of contracts affecting property located abroad, executed here

Rule if marriage does not take place: o Everything stipulated in MS in consideration of future marriage is void o Including donations between respective spouses contained therein o Does NOT invalidate stipulations that do not depend on celebration of the marriage
Donations by reason of marriage

Requisites: o 1. Made before marriage o 2. In consideration of the marriage o 3. To one or both of future spouses
Donations propter nuptias (DPN) Ordinary donations
Does not require express acceptance
May be made by minors
May include future property
Requires express acceptance
Cannot be made by minors
Cannot include future property
If present property donated and regime is not ACP, limited to 1/5
Only limit: non-impairment of legitimes
Grounds for revocation in FC Grounds for revocation in CC

If future spouses agree upon regime other than ACP , cannot donate to each other in MS more than 1/5 of present property. o Excess: considered void o Reason: in ACP, their properties will become part of AC anyway (except for some)

Donations of future property: governed by law on wills o Therefore, these are revocable, unlike donation of present properties in MS

Property subject to encumbrances can be donated. If foreclosed to secure an obligation: o In case of deficiency, donee not liable for difference o In case of excess, donee entitled to difference
Possibilities – i.e. how to resolve whether the DPN is revoked by operation of law (43, 81) or by option (86)
1: Marriage is not celebrated

Art. 81 and 86

If DPN is included in MS, then the DPN is considered void if the marriage does not result

86: revocable if not in MS
2: Marriage is celebrated, but then terminated

43: By operation of law if the donee is in bad faith
 Everything else covered by 86: if you’re the spouse in GF, it remains to be revocable due to 86

Grounds for revocation of DPN: o N.B.
“MAY be revoked” so it is not automatic.

o 1. Marriage not celebrated, declaration of nullity

Except donations in MS

governed by Art. 81
(automatically revoked if the marriage does not take place)
 Declaration of nullity  if donor is one spouse and donee is in bad faith, automatically revoked by operation of law

Prescriptive period:

Written donation

10 years

Oral donation  6 years o 2. No consent of parents or guardians to the marriage
 Prescriptive period: 4 years o 3. Marriage annulled and donee in bad faith

Again, if donor is other spouse, then donation is revoked by operation of law

Prescriptive period: 4 years o 4. LS and donee is guilty spouse
 Prescriptive period: 5 years o 5. Resolutory condition attached is complied with
 Prescriptive period:

Written

10 years

Oral

6 years o 6. Donee commits act of ingratitude:
 Offense against person, honor, or property of donor, spouse, children under parental authority
 Donee imputes to donor criminal offense or any act involving moral turpitude, even if proven

Except if act is against donee, spouse, children under authority
 Donee unduly refuses to support donor when legally or morally bound to do so o Prescriptive period: 1 year from knowledge of the fact

Donations during marriage between spouses: VOID o EXCEPT: moderate gifts on family rejoicing
 Determined by social position of the family, and customs o Same prohibition applies to persons living as spouses without valid marriage

Ex. common law marriage

Ex. adulterous relationship o Prohibitions include grants of gratuitous advantage, direct or indirect

Ex. donation to a child of the other spouse by another marriage (since if the child dies, the other spouse inherits) o Who has standing to question: ONLY persons prejudiced, like the donor or his heirs

Case: husband donates a car to his wife. The wife insured it. It was destroyed and the wife sought to collect insurance. The insurance company challenged the validity of the donation. HELD: The insurance company has no standing to question, since it has no rights or interests over the car in question.

Donor is included in those with standing since there can be a case where the weaker spouse is taken advantage of by the stronger
Absolute Community of Property (ACP)

ACP commences at the precise moment of celebration of marriage o Any stipulation which makes the commencement at any other time is VOID

Basic concept: all properties brought into marriage and acquired during marriage are included in ACP o Upon dissolution, the entire common mass is divided between the spouses o Contra: in CPG, only the net profits are divided between them

Waiver of rights, interests, shares, and effects of ACP: DISALLOWED o Except:
 Judicial separation of property
 Dissolution of marriage (ex. death) or annulled o How made:
 1. In a public instrument
 2. Recorded in LCR o Provided: creditors of waiving spouse may petition to the court to rescind the waiver to extent of amount sufficient to cover credits


What is included in AC: o All properties belonging to spouses before marriage and during marriage o Cannot exclude specific properties from the community

Exclude: o 1. Property acquired during marriage by gratuitous title
(donation, succession)

Exclude fruits and income as well

Except if the donor expressly provides that the property is included in the AC o 2. Property for personal and exclusive use by either spouse
 Except jewelry o 3. Property acquired before marriage of spouse with legitimate descendants from prior marriage

Exclude fruits and income as well

Property acquired during marriage are presumed to be included in the
AC, unless proven otherwise o There must be strong, clear, and convincing evidence

Apply rules on co-ownership , suppletorily
Conjugal Property of Gains (CPG)

What does onerous mean? o There is a consideration.
o Barter is a consideration. o Including redemption and pacto de retro. o When will retirement benefits be conjugal or exclusive?

If the employees contribute, this is considered onerous
– conjugal

If the employees do not contribute, this is gratuitous
– exclusive o What about tips?
 If it is beyond the service charge, which he is entitled to, then it is separate (gratuitous) o What about damages?

If actual damages

conjugal

But can be separate if losses are based on losses from separate/exclusive funds

If moral, etc.

separate because these are paid for suffering, etc. and not actual loss

What is the rule on gambling? o Winnings – conjugal o Losses – separate

What is the rule on industry/skill? o Conjugal

Rule on fruits? o Fruits from conjugal

gross fruits belong to conjugal property o Fruits from separate  net fruits (total fruits minus expenses incurred) are conjugal [IMPT!!!]

Compare with ACP?
There, fruits from separate properties are always separate

Hidden treasure rules? o Finders’ fee is always conjugal since it involves effort

Rule on improvements? o Goes against usual rules on accession (“accessory follows the principal”)  usual rule doesn’t care about value, just which attaches to what o In CPG, whichever is more valuable becomes the principal

NOTE that this rule only applies if the land is separate
 So if the conjugal house is more valuable than the separate land, then the land becomes conjugal o When should reimbursement be made?
 Not required UNTIL there is liquidation of the CP property.

But there is no prohibition against early reimbursement.
o If the land is conjugal, the usual rule on property applies (the land is always the principal)

CPG applies when chosen by the spouses in the MS (and those marriages before the FC, by default)

What is included in COMMON FUND: o 1) Fruits, income, proceeds, products of separate property o 2) Acquired through their efforts o 3) Acquired through chance


Upon dissolution: divide net gains equally, unless they agreed to a different division in the MS o Each spouse has a mere inchoate right over conjugal property.
Cannot alienate ½ of the interest. Cannot be attached by creditors. Only ripens into actual title upon dissolution and liquidation of partnership.

Apply same rules on: o Commencement: upon precise moment of marriage o No waiver of rights, shares, interest unless in JSP or dissolution, and only in public instrument recorded in LCR

Apply rules on contract of partnership , suppletorily o If the CP is not enough, use separate properties o But unlike ordinary partnership (pro rata), liability is solidary

Exclusive property: o Property by direct acquisition as exclusive:
 1. Brought into marriage as his or her own

Includes installment-basis property, if ownership vested before marriage (but reimburse CP for payments on installments)

Includes property alienated before marriage but reacquired through rescission, annulment, or revocation of contract
 2. Acquired during marriage through gratuitous title

Includes unearned increments

Includes moral damages (but not hospitalization expenses, medical assistance, or loss of salary) o Property by substitution:
 3. Acquired by right of redemption, barter, or exchange of exclusive property

If money used for redemption was CP, just reimburse CP
 4. Purchased with exclusive money of wife or husband

Spouses retain ownership, possession, administration, enjoyment of exclusive properties o But may transfer administration to other spouse (or even another person) by public instrument

Record in registry of property, where property located o Alienation of the property terminates administration by the other spouse. Obviously, proceeds go to the owner-spouse

May mortgage, encumber, alienate, dispose separate property without consent of other spouse. May appear in court alone to litigate it.

Join donations of property to the spouses o If shares therein are designated, those shares are their exclusive property (NOTE: because the disposition is gratuitous) o If no designation of shares, it is 50-50 o Right of accretion exists
 A) when one spouse refuses to accept
 B) incapacitated to accept

C) predeceases or dies before perfection of donation

Onerous donations: o Still exclusive property of donee-spouse o But reimburse CP for advances made

On benefits, pensions, annuities, usufructs, etc.: o General rule applies. Gratuitous = exclusive; onerous = conjugal. o Annuities:

The annuity itself (ex. purchased for P100K) is exclusive property
 Pensions from that annuity (ex. P5K a month) is conjugal o Usufruct: the harvests or fruits of the land given as usufruct is conjugal

All property acquired during marriage is presumed to be conjugal. o Regardless of registration.

Specific enumeration of conjugal property: o 1) Those acquired by onerous title through common fund
(EFFORTS)

Even if placed in the name of one spouse o 2) obtained from labor, industry, work of either spouse
(EFFORTS) o 3) fruits (natural, industrial, civil) from common property and net fruits of exclusive property of each spouse (FRUITS)
 Net fruits only because use the income first to pay for administration, preservation, etc.

o 4) share of either spouse in hidden treasure
(EFFORTS/CHANCE)

Even if it belongs to the exclusive property of either spouse, because effort was involved o 5) acquired through occupation such as hunting or fishing
(EFFORTS) o 6) livestock in excess of number of each kind brought into the marriage of each spouse (only matters upon dissolution)
(FRUITS) o 7) acquired by chance (CHANCE)

But losses borne exclusively by the loser spouse

Rules on life insurance: o If the beneficiary is the insured himself or his estate:

If paid out of conjugal funds, proceeds are conjugal

If paid out of separate funds, proceeds are separate

If party conjugal, part separate, proceeds are part conjugal and part separate o If the beneficiary is the other spouse
 Proceeds belong to the beneficiary spouse, even if paid out of conjugal funds

Deemed a donee of the premiums paid.
(Must return ½ of premiums to conjugal partnership)
 If both spouses are jointly insured in a single policy, proceeds belong to the surviving spouse (obviously), even if paid from conjugal funds
 No obligation to return ½ of the premiums, because it is deemed a reciprocal donation

If the insured is a third person, then the beneficiary spouse owns it as separate property (deemed a donation)

Special cases: o For SSS, the beneficiary is the exclusive owner of the proceeds o Intellectual property like copyright and patent is the exclusive property of the creator-spouse (since it is part of one’s person and is just external manifestation of his genius)

For loans and credit: o Principal

exclusive property of lending spouse (if form own money) o Interests falling during marriage

conjugal property

On improvements upon separate property of either spouse: o If increase in value exceeds original value, then it becomes conjugal (subject to reimbursement) o Otherwise, still exclusive (subject to reimbursement) o BUT change in ownership only vests upon respective reimbursements, which only happens during liquidation of the partnership
 But determine whether there is a change in ownership upon the time the improvement was made
Charges upon the ACP/CPG
ACP
Support of: a) spouses, b) common children, c) LC of either spouse
Debts and obligations: a) contracted by both spouses, or b) by one spouse for benefit of community
Expenses, taxes, repairs: a) major or minor upon CP; b) for mere preservation during marriage of separate property used by the family
Expenses for: a) either spouse’s self-improvement b) what both spouses donated or promised to common LC
’s self-improvement
Ante-nuptial debts of either spouse that redounded to the benefit of the family
Expenses of litigation between spouses, unless found to be groundless
If community property is insufficient, but subject to deduction of share of debtor-spouse upon liquidation: 1) ante-nuptial debts not redounding to benefit of family; 2) support for illegitimate children; 3) liabilities due to crime or quasi-delict
CPG
Same
Same
Same, except for: b) for mere preservation during marriage of separate property (no qualification)
Same
Same
Same
N/A


No need to prove first that the other obligations of the
AC have been covered
(unlike in CPG where the other charges must first be covered), because usually there are no separate properties in ACP

Rule for ACP: if community property insufficient to cover for expenses
(except for the last one, which has a special rule), then spouses are solidarily liable with separate properties for unpaid portion o Reimbursement from AC due upon liquidation

For CPG: debts (ante-nuptial or during marriage) not redounding to benefit of family, support of IC, and liabilities for crimes

will only be covered by CP after covering other charges
Administration of property
CONJUGAL PROPERTY

Administration of property
– jointly by the spouses

In case of disagreement: o Husband’s decision prevails o But wife may file for proper remedy within 5 years of contract implementing the decision

If one spouse is unable to participate or incapacitated: o Other spouse may assume sole powers of administration (no need for judicial declaration) o Does not automatically include power to encumber or dispose, unless:
 With consent of other spouse  in writing
 With judicial authorization o Without this, deemed void. But it is a continuing offer on the part of the offering spouse and the third person. Perfected by other spouse’s consent or judicial authorization.

Donation: o Cannot make donations from community/conjugal property unless with other spouse’s consent o Exception: MODERATE donations for

Charity

Family rejoicing or distress

Only for AC  may dispose by will interest in the community property o Not specific properties
EXCLUSIVE PROPERTY BY SPOUSES

Administration of exclusive property may be transferred by the court to the other spouse, when: o 1. Spouse becomes the other’s guardian o 2. Spouse judicially declared an absentee o 3. Spouse sentenced to penalty carrying with it civil interdiction o 4. Spouse becomes fugitive from justice or in hiding as accused in criminal case

If other spouse is incompetent, has conflict of interest, or for any other just cause

court appoints other person as administrator

N.B.
Distinguish this from administration of conjugal property where there is no need for court approval to assume administration
 Administrating spouse cannot dispose of other spouse’s separate properties
Dissolution of ACP/CPG

same rules

Grounds o Where marriage is dissolved:
 1. Death of one party
 2. Nullity

3. Annulment o Where marriage is not dissolved:

4. LS

5. Judicial separation of property

Grounds for judicial separation of property: o 1. Civil interdiction o 2. Judicially declared an absentee o 3. Judicial declaration of loss of parental authority o 4. Abandonment by spouse or failure to comply with familial obligations

o 5. Administrator-spouse has abused privilege o 6. At time of petition, spouses are sep-in-fact for at least 1 year and reconciliation is highly improbable o N.B.
For grounds 1, 2, and 3  enough to present judicial declaration

Voluntary dissolution: o May be jointly filed in a verified petition by the parties o Notify all creditors. Court takes measures to protect them.

Contra: mere separation in fact. This does not affect the property regime, except that: o 1) spouse who leaves conjugal home without just cause  no right to be supported o 2) when consent is needed from that spouse by law, judicial authorization is in summary procedure o 3) in absence of sufficient community property, separate property of spouses are solidarily liable for support. Present spouse, in summary proceedings, may be given judicial authority to administer or encumber specific separate property of the other spouse and use fruits/proceeds to cover absent spouse’s share.

Compare to: abandonment by one spouse, or failure to comply with familial obligations (marital, parental, property) o Aggrieved spouse may petition court for:
 1. Receivership
 2. Judicial separation of property
 3. Sole administration of the AC/CP o Abandonment: left conjugal dwelling without intention of returning

Prima facie assumed: left conjugal dwelling for 3 months
 or failed to give any information about his whereabouts for same period
Liquidation of ACP/CPG and liabilities

ACP o 1. Inventory
– list community properties and exclusive properties o 2. Debts and obligations of community paid from assets

If insufficient, solidarily liable with separate properties o 3. Deliver remaining exclusive property o 4. Deliver net assets of community (those remaining)

According to agreed division
 If none, equal division
 Unless there is voluntary waiver
 TAKE NOTE of forfeiture of net profits (increase of value of community property at time of dissolution from time of marriage)

for:

Termination of subsequent marriage and spouse in BF

Void ab initio and spouse in BF

Annulment and spouse in BF

LS and spouse is offender o 5. Deliver presumptive legitimes of children o 6. Conjugal dwelling and lot delivered to spouse with majority of common children
 Children below 7 deemed to choose mother unless court decides otherwise

If no majority, court decides based on best interest of children

CPG o 1. Inventory – list community properties and exclusive properties o 2. Credit CP for amou nts advanced to cover spouses’ personal obligations and debts o 3. Reimburse spouses for:

Use of exclusive funds for acquiring CP
 For value of exclusive property which became part of
CP o 4. Debts and obligations of CP paid from assets
 If insufficient, solidarily liable with separate properties o 5. Deliver remaining exclusive properties o 6. Pay spouse for deterioration of movables used to benefit family from conjugal funds

Unless indemnified from some other source o 7. Net remainder of CP  profits:
 Divide according to agreement
 If none, equally


Unless there is waiver or forfeiture of share o 8. Deliver presumptive legitimes o 9. Conjugal home

same rules as ACP

Rule on dissolution by death (ACP and CPG) o Liquidation in judicial proceeding to settle estate of deceased o In no judicial proceeding, within one year, must:

Judicially liquidate AC/CP

Or extra-judicially liquidate AC/CP o If no liquidation within 1 year period:

Any disposition or encumbrance of the community/conjugal property = VOID o If there is subsequent marriage without liquidation = mandatory regime of CSP for the subsequent marriage

Simultaneous liquidation of two marriages contracted before FC: o Depending on agreement o If none, determine the capital, fruits, income of each community  prove by evidence o If there is doubt, divide between two communities in proportion to capital and duration of each

For CPG  support during liquidation: o Taken from fruits and income pertaining to their shares in properties under liquidation o If the support exceeds fruits and income pertaining to them  excess is considered advances on shares o If the liabilities of the CP exceed the assets, SS is not entitled to any support during liquidation
Separation of properties during marriage

GENERAL RULE: o Separation of property can only take place by judicial order o Either: voluntary or for sufficient cause
 List of sufficient causes [see above]
 Voluntary dissolution [see above]

How to [see above]

Procedure for voluntary separation: o 1. Spouses file verified joint petition to court o 2. Petition lists all creditors o 3. Creditors personally notified

No need for publication o 4. Pendency: AC or CP supports spouses or children o 5. Court enters decree

converts regime to CSP o 6. Record in LCRs and registries of property

Effects: o ACP or CPG dissolved and liquidated o CSP will apply o Liability of creditors

spouses still solidary with separate properties o Mutual obligation to support still continues unless there was LS o Rights of creditors not prejudiced

Revival of prior property regime: o File motion in court for decree of revival o When:

1. Civil interdiction terminates

2. Absentee returns
 3. Court satisfied that abusive admin will not abuse again
 4. Parental authority restored
 5. Abandoner returns

6. Separated-in-fact spouses resume common life

7. Agreement, after voluntarily dissolving regime

NO voluntary separation may be granted again
CSP Regime

Chosen through MS

Kinds of separation of property: o Extent:
 1. Total
 2. Partial  those not agreed upon as separate shall be AC property o As to kinds of property:

1. Present property

2. Future property

Simple rules:

3. Both

o Each spouse administers and owns, disposes, encumbers, etc. own property without other’s consent o Each spouse gets his earnings from profession, business, and all fruits from property

Family expenses: o Borne by both spouses, in proportion to income o In case of insufficiency or default: in proportion to market value of separate properties

Liability to creditors: o Liability is solidary [note!]
P ROPERTY REGIME OF UNIONS WITHOUT MARRIAGE
Parties capacitated to marry and living together exclusively (147)

Requisites: o 1. Man and woman capacitated to marry each other o 2. Live exclusively with each other as husband and wife o 3. Without marriage or under void marriage
 Void marriage  except having existing valid marriage with someone else

Effect: o Wages and salaries

owned in equal shares o Property acquired jointly through work or industry

governed by co-ownership ( proportionate ownership)
 Thus, according to shares actually put in
 Presumption: party who did not participate in acquisition of property contributed jointly (through care and maintenance of family and household)

DOES NOT apply to:

Gratuitous title

Acquired in exchange for exclusive properties o Disposition of properties owned in common 
 Cannot dispose unless with consent of the other (this is different from normal co-ownership)

Until termination of cohabitation

If marriage is void, and only one party is in GF: o Share of party in BF in co-ownership forfeited in favor of:

1. Common children

2. In case of predecease of common child, to descendants of that child

Repudiation  leads to representation for descendants
 3. If none, to innocent party o Forfeiture upon termination of cohabitation
Parties not capacitated to marry or not living together exclusively

Applies to: o Bigamous marriages o Adultery or concubinage o Both man and woman are married to other persons o Multiple alliances of same married man

ONLY properties actually acquired by joint contribution is owned in common, proportionate to contributions. So: o Wages and salaries are EXCLUSIVE o Care by other party to home, children, etc. or moral inspiration is not included o Default: actual contributions deemed to be equal

If one party is married to another: o Share in co-owned properties accrue to AC or CP of prior marriage o If party in BF, forfeit shares to:
 1. Common children
 2. Descendants of that child in case of predecease

3. Innocent party o If both are in BF

rules on forfeiture still apply. [Dean Del:
“ so magpapalitan lang sila ng property .”]
P ATERNITY AND FILIATION
Kinds of filiation

1. By nature o Legitimate o illegitimate

2. Adoption

Children by nature

Legitimate: o During marriage of parents:
 Conceived
 Born o Includes children conceived through artificial insemination of wife

Either:
 with sperm of husband
 or donor
 or both
 must authorize or ratify procedure in written instrument
 record in civil registry, with birth certificate
 before the birth of the child

Illegitimate: o Conceived AND born outside valid marriage o Not counted as illegitimate:

Void marriages where solemnizing officer had no authority, but at least one spouse in GF
 Art. 36 nullity
 Art. 53 nullity

Legitimated o Children conceived and born outside of wedlock of parents
NOT disqualified by any impediment to marry each other o Through subsequent valid marriage between the parents
 Annulment of voidable marriage does not affect this o Effects retroact to time of child’s birth o Legitimation of children who died before the marriage:
 Benefit descendants o Action to impugn legitimation:

Only by those prejudiced in their rights

Ex. testamentary and intestate heirs

Creditors excluded – because they only step into the picture when there is repudiation of inheritance by heirs

From five years from time their cause of action arises

Cause of action accrues from death of putative parent (From minutes of committee meeting)
Actions regarding filiation

To claim filiation (LC/IC) o Legitimate children:

Primary methods:

1. Record of birth in civil registrar

2. Admission of legitimate filiation in: o Public document o Private handwritten instrument and signed by parent concerned

Secondary:

1. Open and continuous possession of status of legitimate child

2. Other means in ROC and special laws
 When to bring action:

By child, during his or her lifetime

Transmitted to heirs (for up to FIVE years), if: o Child dies during minority o Or in state of insanity

Action filed by child survives even if either party dies o Illegitimate children:

Establish illegitimate filiation in same way and same evidence
 When to bring action:
 PRIMARY methods: up to child’s lifetime

SECONDARY methods: up to alleged parent’s lifetime

To impugn filiation o NOTE: legitimacy of child can only be attacked in a direct action or proceeding. (Sayson v. CA) o Who may impugn:

1. Husband ONLY, by default

2. Heirs of husband, if:


Husband dies before expiration of period fixed to bring action

Husband dies after filing complaint, and did not desist

Child born after death of husband o Only on the following grounds:

1. Physically impossible for H to have sexual intercourse with W within first 120 days of 300 days which immediately preceded birth of the child; due to:

Physical incapacity of H to have sexual intercourse with W

H and W living separately, and sexual intercourse not possible

Serious illness of H preventing sexual intercourse with W
 2. Proved for biological or scientific reasons, that the child could not have been that of the H

Human Leukocyte Antigen (HLA) test
 conclusive determination

Blood tests can disestablish paternity

DNA tests  A.M. No. 06-11-5-SC o CONCLUSIVE of non-paternity o If probability of paternity value is less than 99.9% = corroborative o If probability of paternity value =
99.9% or higher, then it creates a disputable presumption of paternity
 3. Artificial insemination: no written authorization or ratification

Or gotten through mistake, fraud, violence, intimidation, undue influence o When to impugn:
 Within 1 year from knowledge of birth or recording in civil register

If husband (or heirs) reside in city where birth took place or was recorded

2 years, if residing in Philippines but not in place of birth or recording

3 years, if abroad
 If birth concealed or unknown, when do you start counting the period?

From knowledge of birth or recording, whichever came first o Considered legitimate even if:

Mother declared against its legitimacy

Or mother has been sentenced as adulteress o Mother contracting a second marriage within 300 days after termination of first marriage:
 First marriage:

Child born within first 180 days after second marriage is solemnized

AND MUST BE within 300 days after first marriage terminated

Second marriage:

Child born after 180 days after second marriage solemnized

{Even if within 300 days after first marriage terminated)

So the rule is: BOTH periods must concur for the first marriage to have the child. Else, second marriage wins.

N.B.
these are mere presumptions. And regardless, the child will be legitimate o Child born after 300 days of termination of first marriage: no default status. Up to the one alleging legitimacy or illegitimacy.
A DOPTION
RA 8552
Who may adopt

Filipino: o 1. Legal age o 2. Full civil capacity and legal rights o 3. GMC, and not convicted of crime involving moral turpitude o 4. Emotionally and psychologically capable of caring for children

o 5. At least 16 years older than adoptee, except if:

Adopter is biological parent
 Spouse of adoptee’s parent o 6. In position to provide care/support

Alien: o 1. SAME as above o 2. Country has diplomatic relations with Philippines o 3. Living in Philippines at least 3 years before adoption application, and maintains residence until adoption decree entered, except:
 Former Filipino who seeks to adopt relative by consanguinity within 4 th degree
 Adopting legitimate son/daughter of Filipino spouse

Married to Filipino spouse and seeks to jointly adopt a relative by consanguinity within 4 th degree of Filipino spouse o 4. Certified by diplomatic/consular office that he has legal capacity to adopt under his laws and that the country allows the adoptee to become his son/daughter

Guardians o With respect to ward o After termination of guardianship and clearance of liabilities

Default rule: H and W must jointly adopt. Except: o 1. Spouse adopted legitimate child of the other o 2. Spouse seeking to adopt own child
 Other spouse must consent o 3. Spouses legally separated
Who may be adopted

1. Person below 18 judicially or administratively declared available for adoption

2. Legitimate child of one spouse by the other spouse

3. Illegitimate child of adopter, to improve status

4. Person of legal age, if prior to adoption and since minority, consistently treated and considered as own child by adopter

5. Child whose adoption has been previously rescinded

6. Child whose biological/adoptive parents died o But not within 6 months of death
Whose consent needed

Adoptee, if 10 years old or above

Biological parents of child if known or government instrumentality caring for the child

Legitimate/adopted children of adopter and adoptee, if over 10 years old

Illegitimate children, if over 10 years old and living with adopter and spouse

Spouse of adopter or adopted, if any
Rescission of adoption

Grounds: o 1. Repeated physical or verbal abuse by adopter o 2. Attempt on life of adoptee o 3. Sexual assault or violence o 4. Abandonment/failure to comply with obligations

Adopter CANNOT rescind adoption. Only adopted.

Restores parental authority of biological parents, if adoptee is still a minor/incapacitated
Inter-country adoption act (RA 8043)
Sec. 9.
Who May Adopt. — An alien or a Filipino citizen permanently residing abroad may file an application for inter-country adoption of a Filipino child if he/she:
(a) is at least twenty-seven (27) years of age and at least sixteen (16) years older than the child to be adopted, at the time of application unless the adopter is the parent by nature of the child to be adopted or the spouse of such parent:
(b) if married, his/her spouse must jointly file for the adoption;
(c) has the capacity to act and assume all rights and responsibilities of parental authority under his national laws, and has undergone the appropriate counseling from an accredited counselor in his/her country;

(d) has not been convicted of a crime involving moral turpitude;
(e) is eligible to adopt under his/her national law;
(f) is in a position to provide the proper care and support and to give the necessary moral values and example to all his children, including the child to be adopted;
(g) agrees to uphold the basic rights of the child as embodied under
Philippine laws, the U.N. Convention on the Rights of the Child, and to abide by the rules and regulations issued to implement the provisions of this Act;
(h) comes from a country with whom the Philippines has diplomatic relations and whose government maintains a similarly authorized and accredited agency and that adoption is allowed under his/her national laws; and
(i) possesses all the qualifications and none of the disqualifications provided herein and in other applicable Philippine laws.
Sec. 10.
Where to File Application. — An application to adopt a Filipino child shall be filed either with the Philippine Regional Trial Court having jurisdiction over the child, or with the Board, through an intermediate agency, whether governmental or an authorized and accredited agency, in the country of the prospective adoptive parents, which application shall be in accordance with the requirements as set forth in the implementing rules and regulations to be promulgated by the Board.
The application shall be supported by the following documents written and officially translated in English.
(a) Birth certificate of applicant(s);
(b) Marriage contract, if married, and divorce decree, if applicable;
(c) Written consent of their biological or adoptive children above ten (10) years of age, in the form of sworn statement;
(d) Physical, medical and psychological evaluation by a duly licensed physician and psychologist;
(e) Income tax returns or any document showing the financial capability of the applicant(s);
(f) Police clearance of applicant(s);
(g) Character reference from the local church/minister, the applicant's employer and a member of the immediate community who have known the applicant(s) for at least five (5) years; and
(h) Recent postcard-size pictures of the applicant(s) and his immediate family;
The Rules of Court shall apply in case of adoption by judicial proceedings.
SUPPORT

Everything necessary for sustenance o Food, clothing, medicine, education, transportation
 Support doesn’t end at age of majority o It is still the parents’ obligation

There is a system of priority in support o This is valuable if there is not much resources to provide support with o System of priority found in FC

Who are the persons required to support each other? o 1. Ascendants and descendants

No matter how far removed

In the case of illegitimate ascendants or descendants in the direct line:

Seems to stop at parents, and their children, whether legitimate or illegitimate, and their descendants, whether legitimate or illegitimate

But the effect is really just the same. The code just wants to make it clear that there are no illegitimate parents or illegitimate ascendants. But basically it is the same. o 2. Collateral relatives: limited to brothers and sisters

No other collateral relatives


Half-brothers and sisters are considered legitimate and are entitled to support

If the illegitimate brother or sister is a minor, you are required to support him or her
 If he or she is no longer a minor, you ask for the reason why he needs support

E.g. he is indolent, then you are not required

E.g. he is a paraplegic, sick, and has no job opportunities, then you are required to o 3. Spouses
 The only thing that binds them together is the marriage contract. If you remove the validity of the marriage, then there is no obligation to give support.

This is why the guilty spouse may still be required to provide support to the innocent spouse.
 Can you refuse to give support to a philandering spouse?

No. Unless there is actual LS, there is no legal defense to deny support.

However , an unjustifiable refusal to live with one’s spouse is a ground to refuse to give support.

Priority of support: o 1. Spouse
 Different from succession, where spouse is only #4 o 2. Nearest descendant o 3. Nearest ascendant o 4. Brothers/sisters o Order:
 Spouse
 Children
 Parents

Grandchildren

Grandparents

Etc.
 N.B. Thus the rule is you do not exhaust going down before going up. It alternates

Rule on plurality: o When you have enough, you do not have to worry about the priority of support. Just give enough to everyone. o It will be prorated based on the ability of the provider to give.
So a child who earns more must support the parent more than the child who earns less. o The court can demand one person to advance, and then the person demands from the rest.

Legal support is exempt from attachment and execution. But contractual and testamentary support is NOT exempt from attachment and execution. o The latter are in excess of what one is required to give
PARENTAL AUTHORITY

Time-bound
– only until the children reach age of majority o Thus, the only “freak” situation is the giving of consent for marriage, even until 21 years old. This is the outlier.

Parental authority: o 1. Custody o 2. Discipline (proportionate to offense)

Obligations o Support o Moral and spiritual guidance o Provide good environment, etc. (PD 603)

Two types: o 1. Parental authority over the person

Parents

ARE ALWAYS FIRST

Parents only lose if shown to be unfit

Having more resources has never been the criteria

Take note of tender years doctrine
 If parents are gone, substitute parental authority
(BOTH parents must be gone)

1. Grandparents – no preference, whether parental or maternal line. If there is clash, they go to court


2. Eldest B/S over 21

3. Anyone with custody over the child
 And concomitantly, special parental authority

Teacher, in the classroom or outside the classroom, for recognized school activity

Implication: responsible for injury or death over child o Defense: due diligence

The teacher exercising special parental authority is SOLIDARILY AND PRIMARILY liable. The parents and those with substitute parental authority: subsidiarily liable o 2. Parental authority over property of the children

Legal guardianship
 Automatic if value of child’s assets are less than P50,000

If more than P50,000: required to file a bond and must be appointed by the court in a summary proceeding

Even if you are granted authority by the court, legal guardianship authorizes only acts of administration; NOT acts of ownership
 There is separate approval if you want to sell the child’s properties

Rules on property of minor children:

1. Properties of children (regardless of how acquired) o OWNED by the children. Even minors can own property. o Parents only have legal guardianship. They can administer it, and must account in a fiduciary capacity. o If LC – joint admin by F and M; if disagreement, M wins, but F can seek court redress

2. Fruits and income of the property
Funerals

just read
Emancipation

out already; just reaching 18

Still pegged at 21: o Can be used by the parents o Not for their own; ONLY to support the child o If there is excess, it can be used for collective needs of the family

3. Properties owned by parents o There can be minor children tasked to administer certain parents’ properties o OWNED by parents o Fruits and income  go to:
 Parents (but parents must pay the children, which should be the same amou nt they would’ve paid a 3 rd person administrator)

Children (as earnings, not treated as advance on legitime) o A) Parental consent for marriage o B) Art. 2180 of civil code
Retroactivity of the FC

as long as not affecting vested rights (ex.
Illegitimate children)
Surnames

Purpose: o 1. Interest of the State: because it seeks to prevent confusion of identity

o 2. To prevent escaping from criminal liability

What is the legal name of a person? o What appears in the birth certificate

To change: Rule 103 of ROC
What can you use as surname?

Legitimate and legitimated children: o MUST use father’s surname

Illegitimate children: o Only mother’s surname o Revilla law: allows use of father’s surname even if illegitimate, if recognized in a private handwritten instrument or public document

This is not mandatory

Adopted children: o If adopted by both H and W, use husband’s surname o If solely adopted, use sole adopter’s surname o If solely adopted by married woman, use married woman’s surname

Married women: o Not required to use surname of the husband. Can retain maiden name
 If you change your surname to your husband’s, o Options: there’s no turning back

1. Keep maiden name

Ms. Gloria Macapagal

2. Use maiden name plus husband’s surname

Ms. Gloria Macapagal-Arroyo
 3. Use Mrs., then husband’s surname

Mrs. Jose Miguel Arroyo

Remo v. DFA o Woman adopted legally her husband’s surname. Her passport was under that name. In renewal, she asked the DFA if she can return to her maiden surname. But there is no annulment, or whatever ground to revert. She claimed that she had the option. o HELD: Cannot do this.

Rules: o ANNULMENT
–
 If guilty spouse, MANDATED to return to maiden surname
 If innocent spouse, may retain husband’s surname or revert, unless she or the husband has remarried o NULLITY
– same o LEGAL SEPARATION

Whether guilty or not, retain since they are still married o DEATH of husband
 Can still use the husband’s surname
 May revert to maiden name
 Or add “Vda. de
Surname
”

What is the rule on junior? o You can only give junior to the son. o There is no rule on giving daughters “junior”
Absence
Stages:

1. Provisional absence o An ad hoc stage, since there are certain things that have to be done (ex. Signing contracts, withdrawing from bank) o Legal representation: spouse is preferred
 Only exception: when there is legal separation
 But court can appoint someone else if there is reasonable ground

2. Declaration of absence o Two years from time of disappearance, unless administration of power of attorney was left with someone else, then five years o Procedure; prove that he has been missing/absent for a certain period of time
 Administrator of absentee is appointed o If he reappears, he takes back his properties

3. Presumptive death o Here, transfer to administrator of presumptively dead person

o If proven to be dead, then transfer to administrator or executor of estate

Then proceed to settlement of estate o New periods:
 4 years for ordinary absence
 2 years for extraordinary absence o What is the difference?

Four years
– there is no danger of death o If the person reappears, return his assets to him

If the spouse remarried, then follow Arts. 42 and 43 of
FC

PROPERTY
CLASSIFICATION OF PROPERTY

How does the code define property? o Those subject to appropriation by man.
o “Things” would thus be a broader concept since it covers even those not subject to appropriation.
o The code weirdly interchanges the use of these two words.

What are the classifications? o Real/immovable or personal/movable properties o Public dominion or private ownership

What are real properties? o Those under Art. 415 o 1. Immovable by nature

Land o 2. Immovable by incorporation
 Buildings, constructions adhered to the soil
 Trees, plants and growing fruits, while attached to the land
 Those that cannot be separated without damage o 3. Immovable by destination

Ornaments

Machines
 Animal houses
 Loading docks
 Fertilizer actually used o 4. Immovable by analogy

Contracts for public works

Servitudes and other real rights over immovable property

Actually, the only one that is real property by its very nature is land.

Buildings, etc. only become immovable property because they are incorporated/adhered to the soil. o If the bahay kubo can easily be moved and transported, then it is personal property, not real property.

Incorporation can be to another immovable; need not be to the soil per se . Also, a consideration is if it cannot be separated without breaking the material or the object (this refers to the attached object, obviously, because even if land breaks, it still has value.)

Machines placed in a chocolate-making factory were subjected to a writ of seizure, which can only apply to personal property. The lease agreement stated that they are considered personal property.
What are they?
o Personal property, based on stipulation between the two parties.
o As to third persons in GF, they are real property, consistent with the code.

What is the controlling factor for immovable by destination? o Intention of the owner of the property in question.

Give examples of immovable properties by destination. o Statues, etc, used for embellishment.

If a painting is embedded into the cement wall of a house, thus becoming part of the wall, what happens to it? o The painting becomes immovable by incorporation . Because the painting will be destroyed when you try to remove it.
o It doesn’t matter what the intent is; the fact of incorporation is the controlling factor.
o Does ownership of the painting and the wall matter?

No. The fact of incorporation is what matters.

X constructs a building on a piece of land he is leasing from Y. Is it real or personal?
o Real. It doesn’t matter that who owns the land if by incorporation.

But if X and Y enter into a contract that deems the building as chattel, can it be treated as such?
o Yes (Navarro v. Pineda). So while constructing the building on leased property does not per se affect the building’s status, coupled with the declaration, it can. (Tumalad v. Vicencio) o But as to third persons, it’s considered real property. So if it’s publicly sold, one must compl with conditions precedent for the sale of real property. Else, it is void. (Manarang v. Ofilada) o When there is a chattel mortgage between two persons over a building and a real estate mortgage over the same property towards another, the latter wins out because the CM is void as regards third persons. (Associated Insurance v. Isabel Iya)

What about a CM over machinery?
o It can be valid even as to third persons, since the machine is only real property by destination if it directly meets the needs of

the business. If it’s just stored in the factory, then it’s personal property.
 If I hang the painting on the wall of Justitia (and I don’t own
Justitia)? o It does not become immovable by destination because it has to be placed by the owner of the place where the painting is found, and he intends that it be an embellishment.

Ateneo owns a St. Thomas More painting and hangs it in the walls of Justitia. What happens? o It is immovable property by destination, because there is intent to make it an ornament and to keep it there indefinitely.

Machinery/equipment/receptacles placed in building or tenement where work or industry is done.

Also by destination .
o They are immobilized by intent of the owner.
o Ex. Computers used in a computer shop, and owned by the owner of the building.
o NOTE: does not apply to rented spaces in malls, because you do not own the place; it is just for lease.
o Ex. Sewing machines in a clothing manufacturing warehouse, if the machines and the warehouse are both owned by the person.

Animal houses: o If you intend to keep it there forever, then it and the animals become immovable property. o Ex. Dog house in one’s house, and the dog himself become immovable property.

Loading docks o This covers, for instance, a floating platform made of wood and metal where machinery of a petroleum corporation are attached. The platform was tethered to a ship, which was anchored on the seabed. Real or personal?

If intended to remain at a fixed place, real.

If it can be moved around and towed to other vessels, personal.

Fertilizers

What are those by analogy?
o Contracts for public works, and real rights over immovable properties. o Is a mortgage on land movable or immovable?

Immovable if registered in ROP

Movable if just between parties

What about shares of stock for real estate property? o PERSONAL property. Shares of stock are always personal property.

What are the tests to determine personal property? o 1. Exclusion test

If not included in the list of immovable property, it is personal property o 2. Description test
 Can move from one place to another without impairment to the real property to which they are fixed o 3. Considered movable properties by law

Ex. Growing fruits and plants
– because under Chattel
Mortgage Law, they are movables
 Even if they are listed as immovable property in 415.
 How to resolve: only considered as chattels under
Chattel Mortgage Law. Otherwise, immovable under
415 o 4. Considered as personal property by analogy

Contracts, choses of action (right to sue or be sued)

Radio frequencies
 Shares of stock of ANY corporation, even if the corporation owns immovable property

Classification in fungible or non-fungible/consumable or nonconsumable: o Only applies to personal or movable properties o Fungible/non-fungible: based on intent of the parties
 Fungible: can be substituted by others of same kind or quality o Consumable/non-consumable: based on nature
 Cannot be used in manner appropriate to their nature without being consumed o Money is ALWAYS fungible
 Although “Arrovo” bills are not fungible

Other classifications? o Constitution:
 Public domain


Private land o Civil Code: - for purposes of ownership

A. Properties of public dominion

1. Properties intended for public use

2. Properties intended for public service o Being used by the government to render some service to the people, but not open to everybody o Ex. Police car

3. Patrimonial property o “Private property” of the State; used for entering into some business or utility o Also includes those from first two classifications that are not anymore for public use/service
 B. Privately-owned property

What are the characteristics of property of public dominion?
o 1. Cannot be appropriated o 2. Cannot be subject matter of contracts (no alienation or encumbrance) o 3. Cannot be acquired by prescription o 4. Cannot be subject to attachment or execution o 5. Cannot be burdened by voluntary easement
OWNERSHIP

What are the rights of the owner? o 1. Right to enjoy the property
 Jus possidendi
 Jus fruendi
 Jus utendi

Jus abutendi o 2. Right to dispose of the property (Jus disponendi)

Sell, encumber, dispose, etc.
o 3. Right of action to recover (Jus vindicandi )

Note: there is no such thing as absolute ownership. What are these restrictions? o 1. Those in the Constitution

Eminent domain

Police power

National economy/patrimony powers o 2. Contractual restrictions o 3. Provisions in the NCC
 Nuisance
 Right of way

Art 431: use property the way you want it, but not in manner injurious to others

Art 432: doctrine of incomplete privilege
– the greater right of more people can prevail
 Ex. Destroying one’s fence to fervent flooding
 What are means to protect one’s rights? o Doctrine of self-help Art 429: can use reasonable force to repel actual or imminent aggression
 Elements?

1. Force employed by owner or lawful possessor

2. Actual or threatened physical invasion

3. Invasion/usurpation is unlawful

4. Force employed is necessary to repel

When does this not apply?

When the property has already been stolen.
The provision only applies to repel the aggressor. o What are your actions when you lose your property?
 Accion publiciana
 Accion reivindicatoria

Physical boundaries of property o Horizontal aspect o Vertical aspect

Until Rules of Aerial Navigation
 Ex. If your property is near an airport, you have special requirements to comply with

What are the rules on hidden treasure? o If you own the building, it is yours o Unless it is deemed to have been part of national treasure

o If of interest to the science or arts, the State may acquire it at their just price
– divided 50-50 as well o Ownership must not be indicated

Ex. Golden spoon engraved: Imelda Marcos o Only manufactured products
 Because if it is gold in raw state  belongs to State

To whom does the property belong to, and what are the rules on finder’s fee? o Finder owns property
– 100% o Finder and owner
– split 50/50
 As long as the finder is NOT a trespasser

X owned a piece of land. He knew Y had a metal detector that could be used to find treasure. Y agreed and he found treasure.
To whom does it belong?
o To X. For there to be 50-50 split, the other person must have found the treasure by mere chance. Remember, the requisites are:
 1. Treasure is money, jewelry, precious objects
 2. Hidden and unknown
 3. Lawful ownership does not appear

4. Discovery is by chance

5. Discover is not a trespasser o If the thing is of interest to science or the arts, the State may acquire it by paying just price.
Accession
 It’s an incident of ownership. Not a means of acquiring originally.

Two things: o 1. Those produced from property (fruits) whether real or personal (Accession discreta)
 “internally generated accession”
 Natural fruits
 Industrial fruits

Civil fruits o 2. Those attached or incorporated into one’s property and cannot be separated without damage (Accession continua)

External forces or additions to the property

Accessory follows the principal
Accession discreta

What are the kinds of fruits (accession discreta)? o 1. Natural o 2. Industrial o 3. Civil

What are civil fruits? o Income from use of property, ex. Lease, rent of buildings o These are synthetic because it is based on income of property.
o Who gets dividends?

For corporate law
– whoever is the registered owner as far as dividends are concerned,

For civil law
– if you only bought the shares the day before, you don’t get all the dividends. You have to split it proportionately.

What is the difference between natural and industrial fruits? o Natural fruits
– spontaneous products of the soil; products and the young of animals
 “Spontaneous” – they just grow, without planting, effort, cultivation
 “Spontaneous” only qualifies soil products. No need to qualify animal products and young.

For young of animals, what is the rule?

If one person owns both father and mother, then it doesn’t matter.

If there are different owners, the owner of the mother gets the young.
o Industrial fruits – products of the land through cultivation or labor

These are mostly products of the soil. Does not cover animals.

One must cultivate, process, plant, etc.

But the difference between natural and industrial fruits is mostly academic, unlike planting and sowing. What is the difference between planting and sowing?

o Planting
– produces something relatively long-term or permanent, like trees o Sowing
– a one-crop harvest like rice, corn, etc.
o N.B.
the rules that apply to planting differ from rules applicable to sowing.

How does the rule differ? o When someone plants something in one’s property, there is a situation where you can compel the person to buy your property. o In contrast, there is NEVER a situation where a sower can be compelled to buy the property. You can only require him to pay rents.

What is the rule as to expenses for planting and sowing? Who pays for cost of the seeds, labor, gathering, preservation, etc.? o In general, these are charged to the person who receives the fruits.
o And as a general rule, it is the owner who gets these. But there are instances when the law gives these fruits away to some other person apart from the owner.
o What is the exception?

Antichretic creditor (antichresis)
– the fruits are given to the creditor, and the creditor deducts it from the amount of the obligation, first to interest then the principal

KNOW Planter and sower in good faith <stepped out>

Know difference of Art. 443 and 449 o 449
– you don’t get reimbursement if it’s not yet harvested

Fruits have not yet been harvested o 443 – even if you’re in BF you still get compensated for necessary expenses
 Those fruits already harvested

448
– planter or builder in good faith o Gets the fruits by law, regardless of whether fruits have been harvested or not
Accession continua

General rules in accession continua: o 1. Owner receives the extension/increase o 2. Accessory follows the principal o 3. The things must be so united that they cannot be separated without injuring or destroying the property o 4. Punitive liability attaches to the party in BF; party in GF is not punished

Accession continua – those external in character, forming one single object o Apply the “accessory follows the principal” rule o There are different accessions for movable and immovable o Immovable property:
 Accession industrial – persons who employ industry to make certain constructions, plantations, sowings
 Accession natural – brought about by forces of nature; no industry involved

Alluvium

Avulsion

Change in river course

Formation of islands o Movable property:

-ions

Accession industrial o Building, planting, or sowing o Building – constructions, improvements using unnatural materials o Does it matter whether the building construction is permanent or transient (ex. Slums, kubo)?

For purposes of accession, yes. Because for there to be accession, the joining together must have some degree of permanence. o How many persons are involved in the B/P/S problems?
 2 or 3

There is always a land owner (LO)

Second personality is B/P/S (BPS)

Third person is the owner of the materials (OM)
LO/BPS/OM scenarios


1. The ideal scenario is the LO, BPS, and OM is just one person. There is no problem here. Accessory follows the principal. The presumption is that the LO is also the BPS and OM.

2. LO and BPS is the same person; OM is a second person o When is the LO in GF here?
 When he does not know the materials do not belong to him.
o When is the OM in GF here?

When he does not know someone else is using it, or he thinks the materials used by the LO+BPS belongs to the LO+BPS.
o FIRST THING TO DO: determine whether accession exists. If the materials can be removed, then there is no problem. (Ex.
Light bulbs
– take them out and return them) o Note the basic rule: when two persons are involved and both are in GF, give preference to the LO. o If both are in GF, what are the rights of the LO?
 Can acquire materials by paying indemnity to the owner of the materials. Measure of expenses: cost of the materials at the time of payment.
o If the LO was in GF and the OM was in BF, what happens?

Anyone who is in BF loses everything. He loses the value of the materials and the owner can acquire the materials without need for payment.
o If the LO was in BF and the OM was in GF, what happens?
 OM can remove the materials, whether or not this causes damage

AND at the same time, OM is entitled to damages. Measure: cost of materials.
 Or if OM doesn’t want to remove the materials, the LO has to pay the OM cost of materials + damages.
o If both are in BF, what happens?
 Both are in GF.

3. LO is one person; BPS+OM is another person o When is the LO in GF here?

He is not aware that someone has B/P/S in his property.
o When is the BPS in GF here?
 He doesn’t know he is not the owner of the land. (So he has to own land in the same area also, to think the
LO’s land was his.) This is why most cases involving this involves only portions or property and boundary disputes.
o In all likelihood, there is going to be accession here, unlike in scenario 2 since here, he builds, plants, or sows. But if it can be removed without damage, just allow removal.
o If both are in GF, what happens?

1. LO can acquire what was built, planted, or sown, but pay indemnity.

This option is always present.

Building  o If necessary improvement
–

Measure of indemnity: actual costs. o If useful improvement –
 Measure of indemnity: actual costs or plus value
(amount of increase of value in land). o If luxurious improvement
–

Measure of indemnity: value at the time you enter into possession.
 (Strange rule because it gives the LO option to acquire the property or not. But it would have to stay in the property regardless, because there is accession.)
 2. LO can compel the BPS to purchase the land.

NOTE: you can only exercise this option when the value of the land is not considerably [key word] higher than what is planted or built. (Depra v. Dumlao)

Alternative: Can ask for rentals instead.

o Value
– agree on a lease contract, or if they cannot, court decides. o When the lease period is done, cannot compel to renew. o If he cannot pay the rentals, then you can eject him.
 BPS’s rights:

1. Receive indemnity

2. If there has been no indemnity given yet, there is right of retention and no need to pay rents.

When is there right of removal by the LO against a
BPS, if both are in GF?

Note that this is NOT a principal remedy. It is subsidiary: you have to choose option #2, and then the BPS is unable to pay the purchase value of the land.
o If the LO is in GF, and the BPS is in BF?
 NOTE: EVEN IF what was built, planted, or sown can be removed without damage, it cannot be removed.

1. LO can acquire what was built, planted, or sown,
BUT with different rules.

The only time he must pay indemnity is for
NECESSARY improvements.

MWSS case: for USEFUL expense
– can acquire without indemnity.

LUXURIOUS improvements
– LO will pay, if he wants it. If LO doesn’t want it, he doesn’t have to take it. Problem is, of course, it’s going to be attached so LO really gets it free of charge.

2. LO can always compel the BPS to purchase the land, regardless of valuation.

For sower in BF – cannot be compelled to purchase the land, whether in GF or in BF.
Sower only pays rent. If in GF, just rentals.
If in BF, rentals and payment of damages.
 3. LO can demolish/remove what was built or planted.

This is now a principal remedy in this case.

BPS:

If LO takes first option: o Is entitled to indemnification ONLY for necessary expenses. o BPS also has no right of retention, even if not paid.

If LO takes second option: o BPS must purchase it. If he doesn’t pay, LO may sue.
 Sulo ng Nayon v. Nayong Filipino: rights of parties in this case not governed by these NCC rules. Instead, the rights are governed by the lease agreement existing between the two entities. The lease is an acknowledgement of the rights of the parties; thus, a lessee neither a builder in GF or BF. He is just a lessee, governed by the laws on lease.
o If the LO is in BF, and the BPS is in GF?
 First, ask the BPS in GF what he wants to do. He has first dibs.
 BPS can:
 1. Ask for removal. It doesn’t matter whether it causes damage or not.
 2. If he doesn’t want to remove it, the ball passes to the LO, who has the following choice [just one valid] –
 LO’s choice:

1. LO can acquire it, with indemnity plus damages.

2. N/A. NOTE: cannot compel the BPS to purchase the land

3. N/A. NOTE: cannot compel the BPS to remove what was built or planted.

BPS here cannot compel the LO to sell him the land.
It is just an option available to the LO. o If they are both BF?
 Then both are in GF.

4. Three persons: LO, BPS, and OM o When is the LO in GF?
 If he did not know that some BPS’ed in his land.

o When is the BPS in GF?

He thought he owned the land.
o When is the OM in GF?

He did not know someone used his materials.
o As a general rule, the claims are:
 OM, as against the BPS
 BPS, as against the LO o First thing to consider: Is there accession? The BPS can remove if there is no damage to materials AND the LO did not choose to buy what was built, planted, or sown.
o What if they are all in GF?
 Primary option belongs to the LO.
 1. LO can acquire was has been built, planted, or sown with payment of indemnity including for materials (to the OM).

2. LO can sell the land, as long as not considerably more valuable. Etc.
 NOTE: These are the same rules as scenario 3.
 BPS:

IF LO chooses to acquire the thing, BPS has no right to remove the thing.

OM


LO chooses OPTION #1: o Principal remedy is against the
BPS, since he took your materials. o Subsidiary remedy is against the
LO if the BPS is insolvent. (Basis:
“material rent lien” because in this case, the LO received what was built or planted)

LO chooses OPTION #2: o OM can choose to remove the thing if there is no damage suffered. o If there is damage suffered
–

Remedy is against the
BPS.

There is no subsidiary remedy against LO. o For the scenarios in BF,

Just apply the rules in scenarios #2 and #3.
Illustration of LO, BPS, OM all in GF:
LO
Can acquire BPS (pay indemnity for materials
+ labor)
Can sell land (if not considerably more expensive)
BPS OM
Until payment, has right of retention;
Pays OM for cost of materials
BPS pays for land.
Becomes new owner of the land and what was built or planted

Cannot remove what was built/planted, regardless of whether there would be damage of not.

Right to receive payment from
BPS. If BPS is insolvent, can subsidiarily go after LO. [In latter scenario, LO in effect pays twice for the same materials]

No right of retention in case of non-payment
Right of removal comes in (if it wouldn’t cause any damage only, since both in GF).
No subsidiary liability of
LO.
Illustration of LO, BPS, OM; OM in BF:
LO BPS OM (in BF)
Can acquire BPS (pay Until payment, has right Loses everything. Not

indemnity for materials
+ labor) of retention;
Pays OM for cost of materials
LO
Can acquire BPS. No indemnity, except for necessary improvements.
Can sell land regardless.
BPS (in BF)
Receive payment only for necessary improvements. No right of retention.
Pays for land. even subsidiary action against LO.
Can sell land (if not considerably more expensive)
BPS pays for land.
Becomes new owner of the land and what was built or planted
Loses everything
Illustration of LO, BPS, OM; BPS and OM both in BF:
OM (in BF)
Entitled to receive indemnity from BPS, who used his materials.
[Since both in BF
– becomes in GF as regards BPS]
But no right to subsidiarily go against
LO [since LO in GF]
Can exercise right of removal only when it does not cause damage. [Since both
OM and BPS in BF – becomes in GF]

When does subsidiary liability of LO occur? o Three requisites:

1) LO chose to acquire what was built or planted

2) BPS is insolvent [not mere refusal to pay]

3) OM is in good faith

What is the basic rule on BPS liability in favor of LO?
o BPS is always liable in favor of the LO, if the LO is in GF. o [Or both BPS and LO are in BF – becomes GF]

When is there right of removal?
o Only enforceable against BPS, by the OM. So the LO has to always choose option 1. o The only modification: whether BPS is in GF or BF

If in GF
– must not cause damage
 If in BF – regardless

What are the remedies of the LO-gf if the chooses to compel the BPS-gf to buy the land, and the BPS-gf fails to pay? o 1. Leave things as they are and assume lessor-lessee relation ( Miranda v. Fadullan ) o 2. LO entitled to have improvement removed when the
BPS-gf fails to pay ( Ignacio v. Hilario ) o 3. Sale of land and improvement in public auction, applying proceeds to payment of value of land first to LOgf, and the excess delivered to BPS-gf

There is LO-gf, and BPS-gf. LO-gf filed an action to recover the lot, including the portion upon which the BPS-gf built his house. The Trial Court ordered the BPS-gf to vacate and pay monthly rental until the time they vacate. Correct? o NO. First since, both are in GF, look at the options of the
LO. Since th e LO doesn’t want to buy the house, it looks as if the LO chose option 2.
o The TC mistakenly ordered the BPS to pay monthly rental, because being in GF, he has the right of retention until the
LO pays for the value of the expenses incurred by the
BPS.
Alluvium

Alluvium is gradual deposit.

Four things to remember: o 1. Gradual deposit of SOIL o 2. Must deposit in banks of rivers (and maybe lakes and creeks, since they empty into a larger body of water too)


Not applicable to seas, etc. since these are public property

For banks of inland waters (like lagoons), do not apply alluvium o 3. Deposit must be done on basis of natural current of the river
 Meaning, not man-made o 4. Right of ownership belongs to the riparian owner

No need to report, ask permission, etc. By provision of law, the gradual deposit becomes yours, automatically.

Does this mean you are protected in this additional area?
o No. Any land in the additional area is unprotected. o So better if you subject it to the Torrens system, or else you can lose it through acquisitive prescription. o Even if the land receiving the alluvion is registered, the new land is not yet. So it can be acquired by prescription by other people. ( Grande v. CA )
Avulsion

This is abrupt. The transfer of a perceptible piece of land caused by the current of the river, but involving a VIOLENT and SUDDEN action of the water.

Prescription: two years to remove o Or for uprooted trees carried by the current to another land: six months to remove

What happens if you don’t take it out after two years? o Dean Del thinks if you don’t remove it after two years, it’s gone.
It’s not yours anymore.
o It belongs to the person to whom that property is incorporated into o BUT some commentators don’t think it will belong to the person

What about trees? o If trees were uprooted and transferred to the other side, they do not become trees. They are just logs.
o Same two year rule
 I’m not sure if I heard this right, because the codal says six months.
Change of river course

Anything beneath the river is public property. So by default, when a river bed dries up, it’s public land. The “change in river course provision” is an exception.
 Example, a river goes through A’s property. But it changed course to
B’s and C’s properties.

What happens? o B and C, the ones who lost property, own the new dry land due to the change of course.
o In proportion to the land lost (ex. 2 meters of water for B, 4 meters for C, so 1:2 ratio for B and C on the new dry land)
 What is A’s right? o He can choose to acquire the new dry land. Pay B and C what is due, in proper proportion.

The government may choose to redirect the water.

Under the Water Code: the owners of the affected lands may undertake to return the river/stream to its old bed at their own expense; but they have to secure a permit from the Minister of Public Works, and they must commence works within 2 years of the change in course
 If the new area is smaller or bigger than the land lost, it doesn’t make a difference. The law doesn’t qualify.
Formation of islands

How are islands formed? o When the water goes to a lower level

What is the rule? o If in the seas or navigable rivers, they become part of public property.
o If not in seas or navigable rivers, then the island belongs to the nearest riparian owner near the island.
 Ex. A and B on opposite river banks, are riparian owners. If the island appears on the left side, it goes to A. If on the right, to B. If in the middle, split equidistantly
Accession in movable properties

N.B. Just one set of rules

1. Adjunction

Ex. The table and the varnish

Form one single object – cannot distinguish one from the other.

The two objects must belong to different owners

Who owns the single object?
o If you can separate them without injury (close to impossible)
– then just return o If it cannot be separated without damage
– the accessory follows the principal

How do you know why is the principal, which is the accessory?
o First test: What property is attached to what? o Second test: What is more valuable?

Only apply this if you cannot determine which is attached to what o Third test: Based on volume
 Only apply this is values are the same or you cannot determine what is more valuable.

In a diamond ring, which is the accessory and which is the principal? o The band is the principal, the diamond is the accessory. This is notwithstanding relative values.

But if the accessory is worth much more than the principal, owner of the accessory can ask for separation, but he has to pay for the value of the principal since there would be damage caused. o Ex. Diamond ring

For art, and similar materials which employ skill: o DIFFERENT rule. o The work of art or intellect is the principal. The canvass or medium is the accessory.

If one of the parties is in bad faith, how do the rules change? o If the owner of the accessory is in BF, the owner of the accessory simply loses his accessory without remuneration, and he is liable for damages.
o If the owner of the principal is in BF, the owner of the A has two choices:
 1. Demand return of the accessory whether there is damage or not

2. Demand value of accessory, plus damages

Measure of indemnity: o Of same kind and quality, or give cash equivalent based on valuation.
2.
Mixture

The two properties must lose their respective identities, so you cannot determine which is which.

Ex. Two piles of rice get mixed together. You cannot determine who owns which grain.

Two types of mixture: o 1. Commixtion – If solids are mixed o 2. Confusion
– if liquids are mixed

What is the rule on mixture? o 1. If the mixture occurred with the will of each owner:

There is a co-ownership on the basis of the agreement.
 They agree on the sharing. If there is none, determine by proportion of contribution. o 2. If not by the will of parties, but by chance:

Pro-rata sharing by both

Determine proportionate share
– based on VALUE, and not anything else o 3. If only one owner was the cause of the mixture – determine if in GF or BF:
 In GF (thought other sack of rice was his): apply same rule on co-ownership by chance

In BF: he loses whatever is his share in the mixture, and he can be required to pay damages
3.
Specification

There is a thing, and it is turned into a finished product through the labor of another
 (“Labor of one + material of another”)

The labor is ALWAYS the principal, and the material, the accessory – regardless of value

What is the rule? o Determine whether the worker is in GF or BF.

o If in GF, he gets the appropriate the thing, but indemnify the other guy for the cost of the materials o If the worker is in BF, the owner of the materials can simply get his stuff, and charge the worker with damages
 Exception: work of art or scientific work – the worker can appropriate the whole thing:

But if with BF
– pay damages + value of materials

But if with GF – no damages
Quieting of title

Requisites for quieting? o 1. Plaintiff has legal or equitable title, or interest in the real property o 2. There is cloud on such title o 3. Cloud is due some instrument, record, claim, encumbrance, or proceeding which is apparently valid or effective but is actually invalid, ineffective, voidable, unenforceable, and prejudicial to plaintiff’s title o 4. Plaintiff must return to defendant all benefits he received from latter or reimburse defendant for expenses that benefited plaintiff

Are tax declarations conclusive evidence of ownership? o No. It’s just an indicia of possession in concept of an owner at best, but it’s not considered as title to property per se.
Co-ownership

What are the elements of co-ownership?
o 1. Two or more owners o 2. Unity of object o 3. Recognition that there is a co-ownership
 If I say “this part is yours, this part is mine, etc.” – is it a coownership? o No. Because there has to be undivided, aliquot shares.

How is co-ownership created? o 1. By law
 Ex. Party walls, etc.
o 2. By succession

Ex. Co-heirs before there is actual partition o 3. By agreement of the parties o 4. By chance
 Ex. Mixture by chance o 5. By occupation
 Ex. Getting a wild pig together

Distinguish partnership from co-ownership.
o You cannot register a co-ownership as having separate juridical personality. o Co-ownership can be created by various ways (above), while partnership must be based on agreement (since it is based on fiduciary relationship, trust, confidence)

What is the right of a co-owner over the entire property? o A coowner has “borderless” rights; one can use the entire thing. So an owner of one third of a table can use the whole table.

What are the limitations on the right to use the thing owned in common?
o 1. It must be according to the purpose for which it was intended o 2. It must not injure the interest of the co-ownership o 3. It must not prevent other co-owners from using it according to their rights

Does he have right to possession? o Yes, over the whole thing.
o You cannot prevent other co-owners from using the thing. o One co-owner can file for a suit for ejectment, no need to bring in the others.
 If he wins the ejectment suit, it will benefit the other co-owners.

If he loses the ejectment suit, what happens?

This is a point of contention among authors.

Can a co-owner sell the entire property? o No, not without the consent of other co-owners.
o But if one does, the sale is only over the undivided share of the co-owner
 What is one’s right over one’s aliquot share?

o As far as one’s share is concerned, this is aliquot – so there is no specific possession. One talks about RIGHTS. You are an absolute owner of that right; you can sell or transfer it without the others’ consent.
o The buyer will stand in the same shoes as you did before the disposition.

Do the co-owners have a right of first refusal? o No. They do not have right of first refusal or preemptive right to purchase one’s share, under law.
o N.B. Of course if there is an agreement otherwise, respect that.

What is the right of redemption? o Co-owners have right to redeem.
o Upon receipt of notice of sale.
o Ratio: the law does not like co-ownership. As long as there is a means to constrict co-ownership, the law favors that.
Redemption brings the thing back to the original co-owners; thus there will be fewer co-owners.

How do you exercise this right? o Provided the buyer is a third person (not one of the original coowners) o Within 30 days from notice of sale o Can repurchase the thing from the buyer
– pay amount that was paid by the purchaser o But if one paid a value grossly excessive, pay reasonable prince – as determined by courts

Is there any preference among the remaining co-owners as to who can exercise of redemption? o Ex. There are 5 of us, 1 sold his 1/5 share. How do you divide this? o Take the proportion among the remaining co-owners. So if the other four have equal shares, each can purchase 1/20 of the
1/5 th share. o If one does not exercise
– example, only 3 want to exercise his right, what happens the other 1/20?

The 1/20 is divided into 3. It becomes 1/60.

What if one of the co-owners advances the share of the others to the purchaser
– does he gain interest over the whole redeemed thing? o No. He acquires only his own share, and he has right to get reimbursement from the others. o If the others don’t pay their share, the shares still do not go to the one person
– he can attach over their properties:
 Properties
 And even the pro rata share over the co-ownership

Cabales case
– was a minor at time of sale. He became of age, the court told him he had 30 days to exercise right of redemption. [Re-check facts]
 How do you determine one’s pro rata share in the co-ownership? o Respective interest in the property
– how much the person actually contributed o Can you agree over the proportionate interest of each? Or should you fix it to the amount of contribution?

Yes, you can agree over the proportionate interest; it need not correspond to amount of contribution.
 Ex. A gave 1M, B gave 2M, C gave 3M. They can all own the thing by 1/3.
 If there is no agreement, it is pro rata (1/6, 1/3, 1/2) o But with respect to income and expenses, can the parties stipulate?

Nope. The law renders it void.
o So you can agree on the proportionate interest, but you cannot stipulate on the share on income and expenses, which must follow the proportionate interest.

Property must be used for the purpose that it is intended for.

For an act of alteration, what is the rule?
o To change the purpose of the thing, there must be unanimous consent of the co-owners. o Same with sale, mortgage, or another act tantamount to alteration o What is the rule on lease?
 If it is either recorded in the ROP or is more than one year: it is an act of ownership and requires unanimous consent.

If neither: it is an act of administration and just requires a majority.

A, B, C co-own a house and lot in equal shares. What is the status of the following acts?

o A repaired the foundation of the house, which was tilting to one side – Binding upon B and C. They must contribute 23 of the expense, since it is for preservation.
o B and C mortgaged the house and lot to secure a loan –
Will only bind B’s and C’s interest, so A’s 1/3 is not covered by the mortgage.
o B built a concrete fence around the lot
–
Not binding upon B and C since expenses to improve the thing must be decided by majority of the controlling interest.
o C built a grotto in the garden – Does not bind A and B, since it is for mere embellishment, and it was not decided by majority of the controlling interest.
o A and C sold the land to X
– The sale does not bind B’s 1/3 share of the property. B can redeem the 2/3 share sold by A and C to X, since X is a third person.

Distinguish: o Preservation : may be at the will of any one co-owner; but he must notify other co-owners first as far as practicable o Administration : only with concurrence of majority of coowners
 But they may designate one co-owner as administrator; the latter becomes an agent o Alteration : only with unanimous concurrence of the other coowners

If you perform an act of ownership or administration, and you do not get the required number of votes, what happens? o Your act is considered not authorized, and the other co-owners can require you to undo what you have done.
o The other co-owners can ask you to destroy what you have built, and you have to restore it in its original condition.

What if a co-owner wants to make an improvement on the property but he cannot secure the majority’s consent, or if the majority resolution is seriously prejudicial? o At the instance of an interested co-owner, may petition the court to order measures it deems proper
– ex. Appointing an administrator

If you want to get out of the co-ownership, what is the remedy? o 1. Sell your undivided share.
o 2. Partition – absolute right of any co-owner

No need to give a reason

It is a RIGHT by any co-owner

The other co-owners can remain to be co-owners as to the remaining shares, after there was distribution to the “outing” co-owner of his share.

Is there a way to prevent a co-owner from asking for partition? o Providing a provision preventing partition until a certain time is valid.
o Any prohibition for division including transfer
– good only for
TEN YEARS o Can extend again, but for another 10 year period. In the intervals, those who want out can get out again.
o N.B. For testators – can stipulate a longer period (20 years) but this is not extendable o What is the exception provided in the FC?

For family homes, there can be no partition of FH as long as there are still minor beneficiaries.

What is the rule on party walls? o You cannot partition party-walls, and it will continue forever.
Partitioning it would injure the building. So as long as someone is using it, it will persist.

If partition would render the thing chop-chopped, what should one do? o Sell the entire thing, and then divide the proceeds among the co-owners.

How does a co-ownership terminate?
o 1. Consolidation of ownership in one co-owner o 2. Destruction of the thing o 3. Prescription in favor of a third person or a co-owner o 4. Partition

How do you terminate the co-ownership? o Main way: by partition.

As to the process of partition, see the ROC. There is judicial and extra-judicial partition.

No need for a reason. You can ask anytime. o What happens about total partition?
 There is obligation of mutual accounting for the coowners. This is for the benefits and profits earned by the co-ownership.


E.g. If one lot is divided into three equal parts (30 sqm. Each)
– A, B, and C, then A loses his part to a real owner with title, because it wasn’t actually part of the co-ownership, he can receive 10 sqm. each from
B and C. Same if A ends up with a ravine, as opposed to B’s and C’s flatlands. Same rule for proceeds (150K for B, 150K for C, 0K for A, but they agreed to equal sharing
– 50K each from the p roceeds of B’s and C’s lands.) o Another way: prescription

Requisites:

1. Repudiates the rights of other co-owners

2. Repudiation is brought to the knowledge of the other co-owners

3. Evidence is clear and conclusive that he may acquire exclusive ownership

4. After lapse of period fixed by law
 One co-owner sets up prescription against the other co-owners, claiming the property to be entirely his.

You must have an act considered adverse to the coowners; you repudiate the co-ownership through overt acts or express communication to the other coowners.
 From the time of repudiation, count the period necessary provided for by law for acquisitive prescription. If completed without protest by the others, a co-owner can acquire the entire property.

If you expressly start in co-ownership and you repudiate it after, then you are surely in BF, so you have to follow the 30 year period.

Spouses H and W mortgaged their house to a bank. They failed to pay, so the bank foreclosed the property. They died and left behind 3 heirs. One of the heirs redeemed the property within the one year period for redemption. Is she the sole owner or a coowner?
o Co-owner with her co-heirs. Redemption by one would benefit the others.

What should the heir do to receive sole ownership?
o Wait for redemption period to expire, and then wait for the mortgagee/purchaser to consolidate his title, and a new title is issued in the mortgagee/purchaser’s name. Then the heir can offer to purchase the property from the mortgagee.
Condominium Act

There is an aspect of co-ownership in the Condo Act.

Art. 490 is the predecessor of the Condo Act. (Building with several stories, and with different owners. There are common areas, too.) o Art. 490: You only share on the expenses of the stairs that you actually use. So GF person spends nothing on stairs. 2 nd F person and up spend on the first floor stairs. And so on.

Two things in condominium system: o 1. Interest in separate and independent unit (inside inner wall)
– you get a CCT (Condominium Certificate of Title) o 2. Interest in the common areas (elevator, lobby, gym, etc.)

NOTE: there is constitutional restriction on ownership of land (not the building). But the land is always part of the common area, since it is constructed on the land.

Two options in so far as ownership of common areas: o 1. Direct ownership
– unit owners own the common area in common (1 unit, and there are 20, you own 1/20 of the common areas, including the lot) o 2. Indirect ownership – Condominium corporation, and the unit owner owns shares in proportion to the number of units owned
(see below)

How do you get around the restriction on land?
o “Condominium Corporation”: it is a corporate entity. As long as
60% of the ownership is for Filipinos, then the condominium corporation can own land. o Transfer of this land to the Condominium Corporation is not subject to transfer taxes (tax incentive)

Can you build a condominium on leased land? o Not many are, but actually, in this case, there are no ownership restrictions unlike if the land is owned.
o But apparently, this is not marketable; some people think that when the lease expires, there would be no security.

How do you register a condominium project?

o 1. Master deed

Indicates how many units, how big each is, etc.

Because in the Condo Act, 1 unit = 1 share/vote regardless of the size of unit
 The master deed changes this, usually: a studio gets
1 vote, two bedroom condominiums get 2 votes, penthouses get 3 votes, etc. o 2. Deed of restrictions o Most of these documents are drawn up by the developers before the building has been constructed.
 It’s hard to physical partition for common areas. So the only way you can partition is to sell the entire project (the whole building, including your units), because there is no one who will just buy the common areas.

How do you partition if there is direct co-ownership?
o If DIRECT co-ownership: It is not like ordinary co-ownership where a partition can be for no reason. There has to be a ground under Sec. 8 of the Condominium Act. (ex. Destruction or damage for period of three years; 50% damage or injury and more than 30% are opposed to repairing the building, etc.) o If owned by a CONDOMINIUM CORP: Unlike Corp. Code where 2/3 vote would lead to dissolution regardless. But here, you need any of the grounds in Sec. 13 (similar to grounds in
Sec. 8). So it’s vote + reason for partition.
 Another difference with other corporations, where there is a 50 year maximum life span; condominium corporations have no life span and will exist as long as the project exists
Water Code

Waters are owned by the State (waters in their natural state – not commodity water)

Right to appropriate water – based on beneficial use o You have to ask for a water permit before you can draw water from these natural sources of water (if commercial), not small drawings of water

For those who want to bathe/swim in the waters
POSSESSION

Requisites of possession: o 1) modes of possession o 2) intention to possess o 3) own rights

How do you determine GF/BF?
o GF: 1) possessor acquired thing through title or mode of acquisition, 2) there is a flaw or defect in the title or mode, 3) he is not aware of it o BF: 1) Same, 2) Same, 3) he is aware of it o When does possession cease to be in GF?
 When facts exist which show that the possessor is aware that he possesses the thing wrongly

Else, from the moment possessor receives judicial summons to appear in trial

What are the modes of possession? o 1) Actual possession o 2) Symbolic delivery

Ex. Giving someone a key to a car
– it’s symbolic possession of the thing the key pertains to

Ex.
Pointing to a property and saying “that is yours” o 3) Constructive delivery
 On the basis of execution of legal formalities

What does intention to possess mean?
o Subjective element
 What does “own rights” mean?
o Excludes those who possess something on behalf of other people (so the principal is actually the one in possession of the thing possessed). Example:
 Agent
 Guardian

Attorney-in-fact

Etc. o An agent’s possession could never ripen into ownership, unless ratified by the principal

What are the kinds of possession?

o 1) Possession with no title

Has no legal right at all.

Ex. Squatter
 Ex. Your phone was stolen by a thief. You took efforts to get it back. After a week you gave up.
Does the thief gain legal possession of the property?

The property becomes res nullius, because it has been abandoned. Thus, occupation is the mode of acquiring ownership.

Contrast: this cannot ripen into ownership through acquisitive prescription because he is not considered to be in legal possession of a property, because the law does not consider him as such.

Possession acquired through violence can never ripen into ownership.
o 2) Possession with juridical title
 You recognize that ownership belongs to another person, but has turned over possession to you

Ex. A lessee

Generally, this does not and cannot ripen into ownership.

Exception: repudiation of juridical title – may lead into acquisition of the property

Can fall under #3 under extraordinary acquisitive prescription (always BF) o 3) Possession with a just title
 Possession acquired through just title but there a flaw in the title

Ex. The transferor has no right to transfer

Basis of just title: there is a mode of acquisition

Ex. Tradition (through sale), donation, succession o 4) possession with just title and there is no flaw
 Titulo verdadero
 In the concept of an owner, just like #3, but in this case, he really is the owner

Need two things:

A) Just title

B) possession in the concept of an owner o Movables: 4 years (GF) 8 years
(BF) o Immovables: 10 years (GF) 30 years (BF)

In case of conflict between 2 persons regarding possession of a certain property, who shall be preferred?
o As a general rule, there can be no simultaneous possession of more than 2 distinct personalities, except for co-possession
(see below) o Rules:

1. Present possessor

2. If both are present, longer possession

3. If same length, one with a title

4. If all are equal, place the thing in judicial deposit pending determination by court

What kind of possession can serve as title for acquiring dominion?
o ONLY possession acquired and enjoyed in the concept of an owner. Must be Titulo verdadero y valido. o BUT it’s possible that one acquires possession by some recognized mode, but from a person who could not transfer right of ownership – yet he can still become an absolute owner.
But he has to prove acquisitive prescription, whether ordinary or extraordinary. The title here can be Titulo Colorado.

Acquisitive prescription
– must it be only your own possession that could lead to this? o No. There is principle o f “tacking.” – Those that came before the person claiming possession.
o You have to trace your title directly to those preceding you.
 There must be someone before you and you can point at the relationship of the predecessor with you
(there must be privity of title) o If all the possessors are in possession of such character (ex.
BF), just add all of the years together to figure out how many years are left
 Ex. A = 3 years, B = 3 years, C = 3 years  21 years left o Once the line is broken, you have to start counting again.

o On issue of ratio: you cannot take credit for BF possession preceding yours. No credit, no tacking, no ratio.

While Paras says you can use ratio (ex. Credit 1 year of possession for 3 years of BF possession), Dean
Del Castillo disagrees. If the preceding possession is in BF, your possession is already tainted.
Inheritance
- If repudiated, deemed to have never possessed it in the first place.
- Transfer of possession, once accepted, is seamless. You are deemed to have possessed it since death of decedent.
Rights of Legal Possessor

Peaceful and uninterrupted possession o Co-possession
 Is there such a thing as co-possession? In copossession, you don’t have rights of ownership.
Transfer to them, but no title, since there is a flaw.
The difference with co-ownership is that in there, there is right of ownership.

Can co-possession ripen to co-ownership?

YES. Same rules on acquisitive prescription will apply.
 If there is partition, before ownership is acquired, the co-possessors can take credit for the years of possession before partition, in counting acquisitive prescription,
 It is possible that one co-possessor is possessor in
BF, and one co-possessor is possessor in GF. Each of you will have to take your own character of possession. If you have 3 years of co-possession, and you are in BF, and other is GF, then the BF doesn’t affect period or number of years of GF copossessors.
 Interruption

Two kinds: natural interruption and legal interruption

How long should natural interruption be before you say that acquisitive prescription is lost? 1 year. If gone for 6 months, but you came back and redeemed possession, you are deemed never to have lost possession. 6 months will be counted in favor of acquisitive period.

In legal interruption, there are judicial summons against you. o Actions in case of deprivation of possession:
 For immovable property?

Forcible entry/unlawful detainer
– within 1 year from cause of action o Within 10 days from filing this complaint, may secure preliminary mandatory injunction to restore possession

Accion publiciana – within 10 years after possession was lost o Plenary action to recover possession of property

Accion reivindicatoria – within 10 or 30 years, as the case may be o Action to recover possession based on ownership of the property

For movable property?

Action for replevin
Fruits

Civil fruits
– rents, profits, and other forms of compensation for use of property during time when you were in possession o When do you not give the civil fruits back?
 From time you start possession until time you lost good faith
 Possessor in GF gets to appropriate fruits, and there is no need to pay rentals for possession. o What happens when GF is lost?

Once good faith is lost, you have to give the fruits after that to the owner, and you have to pay rent. o What is the effect of a legal interruption?
 If legal interruption, you have to allocate time when you received summons and were still in GF. After summons, you have to turn over fruits and pay rent.

Natural and Industrial Fruits

o What is the rule on gathered fruits?
 Possessor in GF entitled to gathered fruits during possession.

Possessor in BF is not entitled to such and he must deliver the gathered fruits from time he lost GF or reimburse the true owner for their value. He is also liable also for interest.

He shall also reimburse the true owner for fruits the true owner could have received with exercise of due diligence.

But he can deduct expenses he incurred in production, gathering, harvesting. o What about pending fruits?

Pending fruits are those that have not been gathered, and are still standing in the property.

2 options if possessor is in GF:

(1) allow previous possessor to cultivate or o If the previous possessor refuses this concession, he loses all indemnity

(2) sharing based on period of possession, but possession not from the time you actually took possession, but from time of pending fruits.
 Possessor in BF:

Only entitled to be reimbursed for necessary expenses.
Indemnity for Necessary, Useful, Luxurious Expenses

What is the right of a possessor who was dispossessed of his property, from the person who defeated his possession, if he introduced necessary improvements?
o Rights of possessor in GF:
 1) Right of reimbursement

2) Right of retention o Rights of possessor in BF:

1) Right of reimbursement only
 No right of retention

Useful improvements? o Rights of possessor in GF:

1) Right of reimbursement

Either actual amount of expenses

OR the increase in value of the property

2) Right of retention
 3) Limited right of removal

There must be no damage caused

And the new possessor must not have chosen to reimburse the prior possessor o Rights of the possessor in BF:
 NONE.

Luxurious improvements? o Rights of possessor in GF:
 Limited right of removal. o Rights of possessor in BF:

Limited right of removal as well.

For deterioration or loss? o Rights of possessor in GF:
 No liability

Unless due to fault or negligence after he had become possessor in BF.
o Rights of possessor in BF:
 Always liable, even if due to his fault or negligence, or fortuitous event

Once acquired property through acquisitive prescription all bets are off it is now his.
Special Rule re: movables
1.
Rules on acquisitive prescription applies to movables and immovables.
Only that the period for immovables is longer.
2.
Legal Interruption
–a suit of replevin. Still need summons, still have rules on legal interruption.
3.
Natural Interruption
– even if lose physical possession as long as it remains under your control. As long you did not abandon property it is still subject to your control. You are still trying to gain back possession. a.
Control means - Patrimonial Control? b.
Misplaced
– still have possession c.
Unlawful Deprivation – still have possession but you have to recover a.
Mere physical possession, by force, intimidation, violence

What is the rule on recovery of movables? o If the possessor is in BF:
 The owner can recover it from him without any obligation whatsoever o If the possessor is in GF:


The owner cannot recover it because possession in
GF is equivalent to title.

Two exceptions: - where the true owner can still recover without obligation

1) True owner lost the movable

2) True owner unlawfully deprived thereof
 Exception to the exceptions: when the present possessor acquired the movable in GF in a public sale

Remedy: true owner has to reimburse the price paid for it

Sample problem: G lost his ring. After a few days, he found it in the possession of H who had loaned money to Z and received the ring as security, in GF. What are the relative rights of G and H?
o Default rule: possession of movable in GF is already equivalent to title. o BUT in this case, G lost the ring. So he can still recover from
H without obligation. o The exception to the exception does not apply because H received it as pledge, and not from purchase in a public sale.
Besides, only the lawful owner can pledge a movable, so the pledge is void.

A agreed to sell his car to B, and they registered it in the name of
B. While waiting to get paid money in B’s sala, A never saw B or the papers again. B sold the car to C, who sold it to D, both in GF.
Can A recover the car from D?
o Yes, since A was unjustly deprived of his car. The usual common law rule that where two people (A and D here) would suffer from a fraud, the one whose acts enabled the fraud to be committed should suffer does not apply by mandate of Art.
559.

What if the car above was bought in a public sale?
o The possessor is entitled to reimbursement
 What if the car was bought from a merchant’s store? o The possessor wins. As between a purchaser at a mechant’s store and a legitimate oner of the thing who lost it, the former wins (Art. 1505, NCC)

When can the owner of a movable who has lost it or who has been unlawfully deprived thereof can no longer recover it? o 1) Prescription o 2) Possessor acquired thing from a person whose authority the owner is estopped from denying o 3) Possessor acquired the thing from a merchant’s store, fairs, markets, etc.
o 4) Thing is a negotiable instrument and possessor is purchaser in GF and for value o 5) Possessor is owner of thing in accordance with finderskeepers principle in Art 719
How do you lose possession of property, aside from interruption:
(1) Absolute loss or destruction
(2) Assignment
(3) Abandonment
(4) Possession by another
Usufruct

A person owning right over property owned by another person

Because you have been given the right to use

A real right

What is the most important aspect of usufruct?
o The right of possession over property held in usufruct is not matter of legal necessity. What will make it usufruct, where you are entitled to, is the right to receive fruits.

Creation of usufruct o Voluntary act of owner not possessor. Possessor can lease, but not usufruct. o Legal usufruct. But no more na to.

If children, mere act of administration by parents.
 Husband now no longer owns properties of wife.

Ta-da!

Usufruct has ABSOLUTE right over fruits of property.

Preservation of substance and form of thing: only if you have been granted possession of property in the first place. If not, you only really get the fruits.

You cannot control how usufruct uses the fruits.

There can be usufruct over movable, immovable properties, or even rights, but not personal rights

Usufruct v. easement. Easement only for immovable properties.
 What is the usufructuary’s obligation?
o Preserve the form and substance of the thing lent in usufruct. o Substance: no operation, except with consent of owner, that would prejudice the thing given

o Cannot appropriate the thing subject of usufruct o But can appropriate the fruits

What are the exceptions? o 1. Can appropriate the thing
 “Abnormal usufruct” o 2. Can alter the form of the thing, leading to a slightly deteriorated form
 “Quasi usufruct”

What is a abonormal usufruct? o For consumable things. So when returned, there is some or all of it consumed.
o Instead, you have to pay the property’s value based on appraisal (for movable properties)

If there was appraisal at the beginning, that is.

If there was no appraisal, replace with another object of same quality and quantity

What is quasi usufruct? o For properties that easily depreciate
 Ex. Cars o You cannot really return the thing in the same form and substance. o Instead, you return the object itself. As long as it’s normal wear and tear, you have no other obligation to the owner.

Is the fact that a property has been encumbered, can it still be subject to usufruct? o Yes. o The usufructuary does not compete with the mortgagee as far as fruits. o There is no inconsistency.

If the mortgagor defaults in the principal obligation, what happens? o The mortgagee can foreclose the property. This is his right.

If you are the usufructuary, how do you stop the foreclosure?
Should you pay the obligation? o No need; there is no legal obligation to pay for the principal obligation. o His right to usufruct continues. It is a real right and can be enforced against any mortgagee.

Can there be usufruct over pledged properties? o No. There is a conflict. o Pledged property
– it is the pledgee who is entitled to the fruits.
The fruits stand as security as well for the obligation. o So you cannot give the fruits to a usufructuary.

What about a leased property? Can it be given in usufruct? (Ex. A leased to B, A gave usufructuary rights to C) o Yes. o Use and possession goes to the lessee. o The usufructuary need not have use and possession; all he needs to get are fruits. The usufructuary gets the rentals from that property.

Requirements for usufruct? o Form is not a matter of validity, just a matter of convenience.
o It is valid between the parties.
o You want it to be in a public instrument, so that you can register it.

Bottomline: the owner has parted with not of his rights over his property: o Jus affruendi o [And if giving use and possession: Jus utendi and jus possidendi]

Modes of extinguishing a usufruct?
o 1. Death of usufructuary, unless contrary intent appears o 2. Expiration of period or fulfillment of resolutory condition o 3. Merger of usufruct and ownership in one person o 4. Renunciation of usufruct o 5. Total loss of the thing o 6. Termination of the right of the person constituting usufruct o 7. Prescription

A sold a parcel of land to B. There were two buildings on the land.
There was a condition that 1/3 of the rents of the two buildings should go to A. Subsequently, without B’s fault, the buildings were totally destroyed. Did this extinguish the obligation?
o No. What was constituted was a usufruct. Rentals are not only due from buildings, but also the land. There can be no building without land. So the loss was not a total loss that would extinguish the usufruct.
o A is thus entitled to 1/3 of the land + materials thereon, as a temporary measure until the buildings are reconstituted.

Default provisions of usufruct

The other provisions in the Code: are those that apply by default, in the absence of specific stipulations of the parties.

If the property has pending fruits, when the contract of usufruct was entered into, to whom do these belong? o Growing fruits at the time usufructuary enters into the property: belong to the usufructuary o No indemnification

At the time the usufruct terminates, what happens to the pending fruits? o Belongs to the owner o Owner pays indemnification for expenses to plant, cultivate, and other expenses for the fruits

Gathered fruits? o Belong to the usufructuary.
 What is the nature of the usufructuary’s possession? o Possession with juridical title

Can the usufructuary grant possession to another person (ex.
Lease)? o Yes. Here, it is mere possession that is transferred, the right of which the usufructuary possesses

What is the exception to this right? o Caution juratoria - Giving possession to a person who has nothing

What happens if the period of the lease is longer than the period of the usufruct? o Rentals after termination of the usufruct belong to the owner.
o If the lease has become a real right, then the owner must respect
 1. Leases longer than 1 year

2. Leases of property registered in the ROD

Obligations of the usufructuary?
o 1. Make an inventory of the property o 2. Give necessary security

Exceptions to bond requirement?

1. No one will be injured by lack thereof

2. Donor has reserved usufruct of the property donated

[3. Parents, who are usufructuaries of unemancipated children’s property, except when the parents contract a second marriage] – I don’t think this applies anymore

4. Caucion juratoria

Obligations of the usufructary during the usufruct?
o 1. Take care of the property as a GFF o 2. Make ordinary repairs o 3. Inform owner for extraordinary repairs o 4. Pay annual charges and taxes and those considered as lien on fruits
 Note: if the taxes, charges, or liens are over the property itself, the owner is liable o 5. Notify owner of any act of a third person that may be prejudicial to right of ownership o 6. Pay expenses, costs, liabilities in suits with regard to usufruct

Obligations upon termination of the usufruct?
o 1. Deliver the thing to the owner o 2. Right to retention for taxes and extraordinary expenses, which must be reimbursed

Rights over necessary, useful, and luxurious expenses?
o Necessary expenses: right to demand reimbursement o Useful and luxurious:
 No reimbursement

But may remove these if there is no damage to property caused o May set-off these improvements against damage on the property
Easements

Also a real right. The right attaches to a specific property until the right is extinguished. Only difference from usufruct: it is something that attaches to personal property, while easement only applies to real property

o Further qualify: easement is applicable to land, buildings, tenements, and not other kinds of immovables o No easement over another easement, for instance, even if the easement is also a real property. Likewise, those by analogy: cannot receive easements.

What is an easement? o It is an encumbrance over an immovable property, for the benefit of: o Another immovable property belonging to someone else (Real easement) o Or a person or community (Personal easement)

Dominant estate is the one benefited.

Is there any difference between easement and servitudes?
o For purposes of the NCC, these are used interchangeably o Servitude
– used in common law (personal and real easements), and they only use “easement” only for real properties

Distinguish between positive and negative easements: o Positive
– the servient estate is either obliged to allow someone to do something on his property, or to do it himself o Negative
– the servient estate is prohibited from doing something on his property which he could otherwise do

Give examples of positive easement. o Right of way, because the servient estate is required to let other people pass through his property o Tree with branch hanging out over neighbor’s property – required to cut

Give examples of negative easement. o Easement of light and view – cannot block neighbor’s view

Distinguish from continuous and discontinuous. o Discontinuous
– only used in intervals, and with intervention of man o Continuous
– constant, no need for intervention of man

Apparent from non-apparent. o Non-apparent – no external signs o Apparent – made known and with external signs

Why is the classification needed? o Positive/negative
– determines rights o Continuous/discontinuous and apparent/non-apparent
– determines how to acquire

Prescription only applies to apparent continuous

How to acquire easement? o Title
 Juridical act (there is a mode of acquiring ownership ex. Donation, succession, etc.)

Or law o Prescription

10 years of use of servient estate
 Only covers apparent continuous easements

E.g. Easement of right of way can never be acquired by prescription, because it is apparent, but discontinuous

Ex. On another note, easement over aqueducts can never be acquired by prescription even if it is A + C, by express provision of the Water Code.
 If you are entitled to acquire it by prescription (A + C),
 Positive: Count period from actual use

For negative: from notarial act

will contain the prohibition. Not just sending a letter to a neighbor.
You have to have a basis; that you are a dominant estate.

X owned a piece of property, where there was a house on the southern portion overlooking the northern portion through doors and windows. X subdivided the property into two: the empty northern portion and the southern portion with the house. He sold it to Y and Z respectively. Y wanted to build a house on the northern property. Z said that it should be not less than 3 m from their boundary. Who wins?
o Z wins. Under the NCC, when there is an apparent sign of easement between two properties maintained by the same owner and these are subsequently alienated to different owners
– and there is no intent to the contrary – the new owners must respect the easement.
o Apparent easement here is of light and view: demonstrated by the windows and doors overlooking the northern portion.

Title
– is there a specific form?

o Under Statute of Frauds, any transaction over real right over immovable property, it must be put into writing

E.g. if you acquire it through tradition, you have to put it into writing
 If not put into writing, it is unenforceable o If granted on basis of donation: it must be a public writing (both donation and acceptance) and in writing

Otherwise, it is void o If through succession, it must be through a will

What is the meaning of permanence as a characteristic of easement? o General use: non-use will not extinguish easement o Although, non-user for ten years will also extinguish the right

E.g. drainage
– you are required to have neighbor’s water pass by you. You see the water and block it. It is an act contrary to the easement. Non-use kicks in upon the blocking.

Inseparability? o You cannot separate the easement from the immovable.

When you sell the servient estate, what is the effect when you do not tell the buyer that there is an easement? o If the easement is not registered, it dies o If it’s registered, then it persists

When you sell property, and you do not inform the buyer about the registered encumbrance? o The encumbrance exists o But you are guilty for breach of warranty, and the buyer can sue you for not telling him about the encumbrance

Indivisibility o Increase in number of owners do not increase the burden on the servient estate. There is just one easement.
o If servient estate partitioned or alienated, it still doesn’t change anything.

Rights of the Dominant Estate o To make all works necessary for the use and preservation of the servitude

Obligations of the Dominant Estaete o 1. Can’t alter the easement (only for the benefit of the movable originally contemplated) o 2. Can’t make the easement more burdensome

Villanueva v. Velasco
– it is the need of the dominant estate that determines the width of the easement

Rights of the Servient Estate o To register the easement, even without permission from dominant estate

If servient estate registers land without mentioning easement, the voluntary easement is extinguished. If dominant estate registers his land without mention of the easement, the easement still subsists.
o [complete this]

How does an easement terminate?
o 1. Merger in the same person of ownership of both dominant and servient estates o 2. Non-use for 10 years o 3. When either or both of the estates fall into condition that the easement cannot be used
 But it shall revive if the condition of either or both should again permit its use
 Except if prescription has set it o 4. Expiration of term or fulfillment of condition o 5. Renunciation of owner of dominant estate o 6. Redemption agreed upon both owners
Legal easements

Not an exclusive list. There are other kinds.
o Ex. Easements for aerial navigation

1. Easements relating to waters o Water code governs o To extent not covered by Water code, use Civil Code o So lower estates still obliged to receive waters from higher estates; and higher estates cannot construct something to hasten down-flow of water
 Addition by Water Code: servient estate can block this flow, but must provide an alternative method of drainage o Banks of rivers, etc. – 3 m, etc. covered by Water code

2. Right of way

o Most common right of way: road right of way o Requisites:

1. Dominant estate surrounded by other immovables and there is no adequate outlet to a public highway

There must be NO outlet, not merely inconvenient

2. Payment of proper indemnity

3. Isolation not due to acts of dominant estate

4. Right of way claimed is at the point least prejudicial to the servient estate
 5. Shortest distance to public highway o Generic rule: you have to pay indemnity to get road right of way

You are not paying rentals, because you have a right of way

It is a one-time indemnity o Exception: Isolation on account of sale/transfer or donation
[ N.B. the rules on sale and donation are inverse ]
 If you are the buyer of the property and you property is in the middle, and is isolated. You are entitled to ask the vendor to give you a right of way. You do not have to pay for that.
 If the one that is isolated is the seller’s property, he is also entitled to demand right of way. But he has to pay
 Donation: if you receive property through donation, you can demand for right of way, but you have to pay, because it’s too much to ask if you get it for free na nga , you burden the donor more pa .
 If it’s the donee’s property that surrounds the property of the donor, the donor can demand right of way and he doesn’t have to pay indemnity.

3. Party walls o Rules on co-ownership can apply o You cannot open a window on a party-wall

If someone does and the other does not object, you can acquire it after 10 years by prescription o Ma’am did not choose to discuss the dimensions, heights, etc. of windows in detail.
Modes of acquiring ownership
 How do you acquire property? o Occupation o Law o Donation o Tradition o Intellectual Creation o Prescription o Succession
 Sale is not a mode, it is tradition
 Mode: o Process of acquiring ownership o Mode does not need a corresponding title

Title: o Juridical justification for a mode o Title needs a corresponding mode

Formalities of donation o Movable:
 Orally or written
 Simultaneous delivery + document representing o Personal property above 5,000 pesos

Law does not require delivery

Private instrument
 But some people think delivery is still necessary.
 Succession is a mode, because you do not need a prior title
 Occupation

Original Mode
– not dependent on former owner o Occupation

Seizing of the property physically

Not owned by anyone or because there is a previous owner and has abandoned it
 You do not occupy land; you occupy corporeal things.
Land is never without an owner – the State owns it by default. Except if land was previously owned and it has been abandoned: this does not revert to the
State.


If intangible
– acquired by (1) intellectual creation, or
(2) tradition

Occupation of animals

If the animal is wild – a person becomes the owner upon capture.

Occupation over domesticated animals, after
20 days, unless claim has been made.
Domesticated animals are those taken from the wild and then tamed.

Occupation over domestic animals cannot be acquired by occupation unless they had been abandoned. Domestic means that they are never wild to begin with.
o Intellectual creation o Acquisitive Prescription

Possession + just title (acquired through mode of acquiring ownership) + 30 years
 So valid only if acquired through res nullius (in this case, it’s really occupation)

Derivative Mode
– dependent on former owner or title of another person o Succession
– from whom you inherit o Donation – from donor o Law o Tradition
Donation

Requisites of donation: o 1. Decrease or reduction in the patrimony of the donor o 2. Increase of patrimony of the donee o 3. Animus donandi or intent to make a donation

Classes of donation: o 1. Donations inter vivos

Simple
 pure liberality
 Remunerative

On account of services rendered by the donee, but not a demandable debt

Conditional

Imposes a charge or burden on the donee less than the thing given
 Onerous

Given in consideration of demandable debt

Actually governed by rules on contract o 2. Donations mortis causa

Actually governed by rules on wills

Distinguish between inter vivos and mortis causa donations:
Inter vivos Mortis causa
Takes effect independently of donor’s death
Title or ownership conveyed before death of transferor
Takes effect upon death of donor
Title or ownership conveyed only upon death of the transferor
Valid if transferor survives transferee Void if transferor survives transferee
Generally irrevocable Always revocable
Comply with formalities on donations Comply with formalities on wills

A donation provides that it will take effect after the death of the donor, that the donor will not dispose of it or take it away from the donee, that he had beneficial ownership while he lived. Is it inter vivos or mortis causa?
o Inter vivos, since the donor intended to part with ownership during his lifetime. Providing that the donor will not dispose of it or take it away means that the donation is irrevocable; thus, inter vivos. It is also clear that he parted with naked title, while maintaining beneficial ownership.

What does a habendum clause and a reddendum clause signify? o Inter vivos. Habendum cause indicates a grant of the property before death of the donor, while the reddendum, in so far as it imposes a condition on how the donees should spent some of the income of the property and limits on how to dispose it

indicates that the donor parted with ownership of the land prior to his death.
 Property is donated in a deed named “donation inter vivos.” It said that the land donated shall be delivered immediately to X upon the perfection of the donation, with all the fruits thereof, but
“title shall only pass to the donee upon the donor’s death.” What is this? o Mortis causa: the fact that no title or ownership is conveyed until the death of the transferor controls.

Capacity of donor and donee: o Donor:
 1. Must have capacity to enter into contracts
 2. Must be able to dispose of property

3. Must not be prohibited or disqualified by law from making the donation o Donee:
 1. Must not be prohibited or disqualified by law from accepting the donation

A, from Manila, offered B, who lived in Cebu, in writing to donate his car. Two days after , B’s letter of acceptance reached A, but before it reached A, A has been confined in the psychiatric/mental ward. Is the donation binding?
o No. The donor’s capacity is determined from the perfection of donation. A donation is perfected the moment the donor knows of the acceptance. Here, before he found out, he already lost capacity.

Prohibited donations: o By reason of relationship
 1. Between husband and wife, except moderate gifts in family rejoicing or distress
 2. And those with amorous relationships, living together as husband and wife [here, there is no criminal act, unlike adultery/concubinage] o By reason of public policy

1. Parties guilty of adultery/concubinage at the time the donation is made

Do they have to be convicted?
No.

If they have already parted, then it is valid.

2. Guilty of committing the same crime AND in consideration thereof
 You don’t have to be both principals

When must it be given?
o It can be given before committing a crime (donation as the inducement) o It can be during or after (reward)

Distinguish: for adultery/concubinage
– it cannot be after, and it must be in consideration of the relationship. Here, it can be after, but it must be in consideration of the crime.

3. Made to public officers, spouses, etc. by reason of his office

4. Those disqualified under wills apply as well:

A. Priest who heard confession or minister who extended spiritual aid during last illness

B. The relatives within 4 th degree of abovementioned person, or his church/sect

C. Ward to guardian, before final accounting o Except if guardian is ascendant, descendant, or sibling

D. Physician, or other health officer who took care of donor during last illness

E. Made by individuals, associations, corporations not permitted by law to do so

Formalities of a donation: o MOVABLE
 Oral

Must have simultaneous delivery of thing

Or simultaneous delivery of document representing the right
 Writing
 If the property’s value exceeds P5K

Acceptance must be in writing too o IMMOVABLE

Public document
– specifying the property + charges
 Acceptance must be:


In same deed

Or separate public document. Here, the donor must be notified in an authentic form, and the step noted in both instruments. o Special rules on form:
 Onerous donation  ordinary contract

Mortis causa donation

formality of wills

What is the effect of non-registration? Registration? Actual knowledge?
o Non-registration, although the donation of immovable is in a public document  only binds the parties thereto o Registration  binds the whole world o Third party with actual knowledge

bound by the donation between the parties, even if unregistered

X wrote Y, donating in the letter a piece of land. Y accepted by means of public instrument. X died. His surviving son, B, wanted to cure the defect of the donation by executing a public instrument of ratification. Effect?
o No effect. A void contract cannot be ratified. The contract is void because it was not in a public instrument.

X donated land to Y in a public instrument. Y accepted in a separate public instrument. X died before the acceptance could be communicated to him. Valid?
o No. The constancia autentica (notification of the donor in authentic form) is an essential formal requisite not complied with. The donation has no effect.

X donated land to Y. Y accepted in a separate instrument, but did not communicate it formally to the donor. Y paid taxes over the land, since it was in the black list for non-payment of taxes. Was it an onerous donation? Was the donation valid?
o It was a gratuitous donation, because payment of the taxes was not a condition/burden imposed upon Y. It was just a consequence of the donation. o Thus, since it was NOT an onerous donation, it must follow the formal requisites of a contract. The formal requisite of constancia autentica was not complied with; thus, the donation was invalid until communicated formally.

Incapacity that would prevent a person from succeeding: o Testamentary
– Art. 1027

Applicable to testamentary succession, but not to donation: Witnesses to the will, because there are no witnesses required to a donation o Intestate
– unworthiness (Art. 1032)

Limitations on donations: o 1. Donor must reserve sufficient means to support himself and all relatives, who at the time of the acceptance of the donation, are entitled to support

Reduce upon petition of such persons o 2. Donations cannot comprehend future property o 3. No more than he may give or receive by will
 Reduce what is inofficious

A donated all his property to a foundation bearing his name, ignoring claims of wife and children, except for a provision for their maintenance and education during their lifetime. Effects of this donation during A’s lifetime and after A’s death?
o Valid during lifetime of A. The donee can appropriate all the fruits.
o Once A dies, it is inofficious. It must be reduced to avoid impairing the heirs’ legitimes, upon petition.

Is there a right of accretion in donation?
o None, by default.
o Exception: H and W jointly.

Revocation of donations: o As a general rule, these are irrevocable. These cover donations inter vivos. Donations mortis causa are really based on succession, so they are revocable.
o 1. BAR
 A. Birth
 B. Adoption
 C. Reappearance of child
 These apply to those who have made donations thinking they will not have successors, and these would affect their legitime.

Subject to reduction or revocation. This ground does not consider the donation per se as revoked. It is only reduced to the extent that it is inofficious


Determine the legitimate at that point in time (this is where presumptive legitime is first introduced in the
NCC), then determine if what was given exceeded.

Period of four years
– can be brought by any of the children whose legitime has been affected o 2. Ingratitude:
 1. Donee commits an offense against person or property of donor, spouse, or children under parental authority

2. Imputation of a crime involving moral turpitude

Is veracity of the claim a defense? No.

The only time it is a defense, is if the crime is committed to the donee, his spouse, or children under parental authority.

3. When donee unduly refuses to support the donor when there is a legal or moral obligation
 Prescriptive period?
One year from knowledge of the donor.

It is purely personal and thus intransmissible to one’s heirs.

What are the exceptions to intransmissibility?
o 1. Donor already brought action but died o 2. Donor prevented from filing action due to sickness, fortuitous event, etc.
o 3. Donee killed the donor o 4. Donor died without knowing act of ingratitude o 5. Donor already instituted criminal proceedings but died before filing civil case for revocation o 3. Inofficiousness of the donation

This action ONLY arises when the donor dies

Only compulsory heirs and heirs/successors in interest may bring action
 Prescription of four years is counted from the death of the donor. So even if he donated the inofficious donation in 1960, and he died in 1984, the heirs have up until 1988 to challenge the donation.
o 4. Non-compliance with a condition imposed

This is a modal issue
 The donor has discretion
 The action also prescribes in four years

X donated property to Y, with a condition. Y failed to comply. X sold the property to Z. Valid?

No. He has to file a judicial action first within
4 years to revoke, unless there is an automatic revocation clause in the donation.

Rule on fruits for these revoked donations?
o Based on BAR  donee entitled to fruits until filing of complaint o Based on non-fulfillment of condition

donee must return the fruits which he may received after failing to fulfill the condition, along with the property o Based on inofficiousness  done entitled to fruits while the donor lives
CIVIL LAW

We are part of the civil law tradition. This is our mindset in approaching problems.

Most of Western Europe countries follow the civil law tradition, as well
South America
– except for the former British Colonies. Include:
Louisiana, Quebec, and parts of Black Africa (Senegal, Ivory Coast,
Congo). Asia: Philippines (Spain), Indonesia (Portuguese/Dutch influence), China, Japan.

Common Law: UK, Ireland, All of US except for Louisiana, etc.

Civil Law was founded in 450 BC. It is older than the Church. “Rome conquered the world 3 times: by its arms, faith, and law.” - Thus what we study are developments of the Civil Law tradition.

Common Law began around 1066 AD.

SUCCESSION
General provisions

(774) A mode of acquiring ownership o It is not delivery (tradition) that vests ownership. Succession itself is the mode. You do not need delivery of the thing to the successors. o In due time, the successor acquires a right to possession of the thing, which may be in the hands of someone else. But this is an action of assertion/vindication of possession based on ownership.

What is transferred?
o The inheritance. o Inheritance is defined in 776 as the transmissible rights and obligations of a person o Are there intransmissible rights and obligations?

Yes.

1. Purely personal;

2. Intransmissible by stipulation

3. Intransmissible by operation of law
 Are these conveyed by succession?

No.

What are examples?

A purely personal obligation or right

Ex. R ight to receive support from one’s parents
 Give an example of a transmissible obligation.

X entered into a perfect contract to sell his car to Y, but it has not been consummated.
X died. This transfers to his heirs. o Is a money debt a transmissible obligation?

Yes.
 But is it transmitted directly to the heirs?

No. It is paid by the estate, upon claim by the creditor. (Unionbank v. Santibanez)

Does this not violate Article 774?

No. Although the creditors do not claim directly from the heirs, the effect is the same
– what the heirs would have otherwise gotten is diminished, so they are indirectly and ultimately paying the debt.
 Does this provision on money claims affect other claims?

No. They are still transmitted to the heirs.

When does transmission take place? o (777) Transmission takes place from the moment of death o This is legal fiction, because you don’t really physically get it the inheritance at the moment of death. o Why is it proper to say the rights to succession “vest” instead of “get transmitted”?
 Because you already have that right, albeit inchoate.
It only vests upon death of the predecessor.

What are the consequences of Art. 777? o 1. Determination of who the heirs will be is determined at the moment of death; also, what law is in effect; what portions they will get, etc.
 Uson v. Del Rosario : Decedent died during effectivity of the old Civil Code, so the spurious children are excluded (unlike in the NCC, where they would get something) o 2. Even before the actual partition of the estate, the heir can dispose can dispose of his/her interest over the inheritance.
 De Borja v. De Borja – the heir was allowed to onerously dispose of her share even if she did not know how much exactly she would get.

Could she have disposed of it gratuitously?

Yes.
o 3. Heirs have a right to substitute their predecessor in an action that survives.
 Bonilla v. Barcena

Patrimonial right
– right to prosecute an action

Updates on the abovementioned jurisprudence: o Lee v. RTC (423 SCRA 497)

An heir can sell his right/interest in property under administration. However, an heir can only alienate such portion of the estate allotted to him in the division of estate.


So he can only sell his ideal or undivided share in the estate, and not specific properties.
o Liu v. Loi (405 SCRA 316)
 An heir can sell his interest in the decedent’s estate, but always subject to the rights of the creditors and the result of the partition.
 So if you end up having no share in the estate, then what you sold is subject to the creditor’s claim.
o Heirs of Conti v. CA (300 SCRA 345)

Reiterated Bonilla case: prior settlement of estate not necessary for heirs to commence action or continue action pertaining to the estate.
o Heirs of Pinchay [?] v. Del Rosario
 Prevented from filing action because the plaintiffs have not established proof that they are the decedent’s heirs.

How to resolve: you can continue an action if you are indisputably an heir.

What are the three kinds of succession?
o 1. Compulsory o 2. Testamentary o 3. Intestate

In absence or default of valid will

(781)  is a WRONG provision. The heirs acquire rights to the inheritance upon death. Any fruits/accruals after will indeed belong to the heirs, but not through succession, but through accession discrete or continua .

What is the importance of distinguishing between heirs and legatees/devisees?
o This is an important distinction because of the rules on preterition.
o Heirs – succeeds to an aliquot part of the estate, whether through testate or intestate
COMPULSORY SUCCESSION
Legitimes

(886) Legitime – o A part of the testator’s property

An aliquot or fractional part o Which he cannot dispose of gratuitously
 Why is “gratuitously” underlined?

Because he can dispose of it onerously. He cannot donate to an extent that will eat into the value of the legitime.

But he can sell his properties. Onerous dispositions do not impair the legitime.
(Joaquin v. CA)
 So he can gratuitously dispose?

YES. But, he cannot eat into the legitime.

Manongsong v. Estimo: Sale does not affect the value of the decedent’s estate. There is an exchange of value.

Who are the compulsory heirs? – (887) o 1. LC and descendants o 2. LPs and ascendants (in default of #1) o 3. Widow or widower o 4. ICs

Which are primary and which are secondary? o Primary – those who are never excluded
 Legitimate children/descendants o Secondary – those who receive only in default of the primary
 Legitimate parents/ascendants

Illegitimate parents

N.B. does not go beyond parents o Concurring compulsory heirs
 Surviving spouse
 Illegitimate children/descendants

What are the two principles? o A) Exclusion and B) concurrence o These two principles simultaneously operate to establish combinations of compulsory heirs

Legitimary combinations
–
[recit]
1 LC, 1 IC
1 LC, 2 IP
3 IC, 2 LP, SS
LC = ½; IC = ¼
LC = ½
LP = ¼ each; 3 IC = 1/12 each; SS =

2 IP; SS
2 AC; 1 LC; 1 IC
1 LC; 2 IC; SS
6 LC; 3 IC
5 IC; SS
1 AC; 2 LP; SS
3 LGP; SS
1 IC; SS
2 AC; 2 LP
3 LC; 2 IC; SS
1/8
IP = 1/8 each; SS = ¼
LC = 1/6 each; IC = 1/12
LC = ½; SS = ¼; IC = 1/4 each, but reduced to 1/8
LC = 1/12; IC = 1/24
SS = 1/3; IC = 1/15
AC = ½; SS =1/4; LP = 0
1 LGP (one line) = ¼; 2 LGP (other line
) = 1/8; SS = ¼
IC = 1/3; SS =1/3
AC = ¼ each
LC = 1/6 each; IC = 1/12 each; SS =
1/6
AC = ¼ each; SS = ¼ 2 AC; 1 LP; SS

Legitimate children or descendants o Get a constant ½
 Note: There are only three cases where nobody gets
½ :

SS
– 1/3; IC – 1/3

SS, exceptional circumstance of in articulo mortis – 1/3

SS – 1/4; IP – 1/4 o They are the primary compulsory heir o The nearer exclude the more remote. So children exclude grandchildren. o BUT the grandchildren can inherit if representation is proper
 Predecease
 Disinheritance
 Incapacity/Unworthiness o N.B. If all the children renounce, then the grandchildren will all inherit equally (per capita)

But if only a few renounce and not all, the remaining child/children will get what is left to the exclusion of the grandchildren o The adopted child is, for purposes of succession, in the exact position as a LC

Must be legally, not de facto adopted o Does the adopted child retain the right to succeed his biological parents?

This is still an open question. There is an obiter in the
Stephanie Garcia case that the adopted child does, but it is a mere obiter, and it cites a Family Code provision that might have been repealed by the
Domestic Adoption Act.

Legitimate parents or ascendants o Nearer exclude more remote. Parents exclude grandparents. o Equal division by line. So paternal and maternal lines split by half then divide between the parents.

Surviving spouse o Before, in the Spanish Code, she cannot concur with LC; she would only get usufructuary right over the property of the LC.
Now, she can concur, and is in fact always an heir. But her share is variable. o What kind of marriage is needed to become a SS?
 Valid or voidable o What is the effect of legal separation?
 Final decree will disqualify the guilty spouse from inheriting through compulsory, testamentary, or intestate succession.

Unless there is reconciliation.
 Lapuz v. Eufemio : If pending a case for legal separation, one of the spouses dies, the action is automatically extinguished and there will be no LS.
o What are the prerequisites to have the SS inherit only 1/3?

1. SS inherits alone

2. The marriage was in articulo mortis
 3. Decedent dies within 3 months of the marriage
 4. Couple did not live together for at least 5 years
 5. The decedent was the one at the point of death upon marriage

Illegitimate Children or descendants o No more distinction between natural and spurious children.
o What if they concur with legitimate children?
 Always get ½ of one LC’s share


Their share can be reduced pro rata if the shares exceed 1 whole. They are less preferred than SS and
LC.
o What if they do not concur with legitimate children?
 Variable shares. If with SS, then 1/3. If with IP, then
¼. Alone, ½ collectively. If with LP and SS, then ¼. o What is the rule on representation?

The illegitimate children of an illegitimate child can represent the latter. The illegitimate children of a legitimate child cannot represent the latter.

Illegitimate Parents o Excluded by BOTH legitimate and illegitimate children.
o No succession for illegitimate ascendants beyond IPs
Preterition (854)

What is preterition? o Total omission of a compulsory heir in the direct line from the inheritance. o What is the mistake of the judge in Seangio?
 He said that it is total omission from the will. It must be total omission from the inheritance.

When is a compulsory heir completely omitted? o When he gets nothing in the way of:

1. testamentary (institution of heir) disposition
 2. legacy or devise
 3. intestate succession

4. donation inter vivos
 Don’t forget donation inter vivos!
 …and he was not disinherited.
 Why does it mention “compulsory heirs in the direct line”? Who is a compulsory heir not in the direct line?
o The surviving spouse. o So who is covered?

It can be LC, IC, and as circumstances apply, LP or
IP o How do you determine who are the compulsory heirs?
 Determine only at the time of death because that is only when the rights to succession vest.

What if there is something is given but is insufficient? o Remedy is completion of legitime (906)

What is the effect of preterition? o Annulment of the institution of heir. But legacies and devises are valid in so far as they are not inofficious.
o If there are no legacies or devises, the entire estate is thrown open to intestacy.

Does the fact that an heir is not mentioned in the will mean that he is preterited?
o No, if the will does not dispose of the entire estate. ( Seangio )

If someone dies intestate, can there be preterition? o No.

Does the fact that an heir is mentioned in the will mean he is not preterited? o Not always! [ex. there was no disposition in his favor]

X has two children, A and B.
X made a will giving B ½ of his estate, and the other half to Ateneo. X did not give A anything by way of donation inter vivos either. But A predeceased X. Is there preterition? o No. A predeceased. You only determine fact of preterition upon death of testator. ( JLT Agro)

[Same facts] A, however, had a son A1. A predeceased X still. Is there preterition? o Yes. But not of A, but of A1.
o Does it matter than A1 was born after the will was made?

It does not matter. The reckoning point is still time of death of the testator, not time of making the will.
o What is the effect?
 The entire estate is thrown open to intestacy because there are no legacies or devises.
 X said “I will disinherit my son B because he took up law, not medicine.” Is this a valid disinheritance?
o No. It is not one of the grounds. It is rendered ineffective, and therefore, there is no preterition.
 [Same facts] But the second sentence now says, in addition, “…so
I give ½ of my estate to Ateneo, and the other 1/2 to my brother Z.”
What happens here?

o There was no preterition. So X will get his legitime because the disinheritance is ineffective. The dispositions in favor of
Ateneo and Z are valid but inofficious, so these will just be reduced but not rendered invalid. [ Take note of this scenario] o Why does it become like this?
Because preterition will only apply when there is inadvertent omission from the will (“without the heir being expressly disinherited”). An ineffective disinheritance, thus only results into the heir being able to demand his rightful share. Preterition does not vest.
Disinheritance (915-923)

What is the effect of disinheritance? o Primary effect – exclusion from the legitime o Actual effect
– TOTAL exclusion of the heir from all manner of succession: exclusion of the heir from the legitime and the intestate portion, if any, and also from testamentary succession is instituted in an earlier will.

Requisites? o 1. Made in a will

Can you disinherit in a medium other than a will?

No. ONLY through a will.
o 2. Done for a cause specified by law.
o 3. Specify the cause o 4. Must be unconditional o 5. Must be total o 6. Cause must true o 7. If the truth of the cause is challenged, the truth of the cause must be proved by the proponent
 What is the policy of the law?

It is reluctant to grant disinheritance. This is why the burden of proof is automatically with the proponent of the will. The rebutting heir is not tasked to prove the denial.

Take note of the following: o 1. Some of the requisites require conviction by final judgment.
 Example: Number 1. Mere attempt to take the life is not enough; there must be conviction.

But some do not need final conviction, like
–

Maltreatment by word or deed

Living a dishonorable life o 2. The grounds are exclusive.
o Self-study the grounds
– RFB

Is there representation in disinheritance? o Yes, if the disinherited heir is a descendant.
o No, if the disinherited heir is an ascendant.
o N.B. representation does not apply to testamentary succession
(obviously).

How can disinheritance be lifted? o Reconciliation between the parties.
o It may be oral, in writing, or by conduct (implied).

What is the effect of reconciliation? o It removes the disinheritance.
o Does he recover legitime?
 Definitely. The heir recovers his right to the legitime.
o Does he receive anything by intestate succession?
 He recovers the right to the intestate portion, if there is any left.
o Does it revive testamentary dispositions in a prior will?
 Yes, unless it was revoked.
Unworthiness (1032-1040)

1032 enumerates causes for incapacity to succeed/unworthiness and there is a close parallel with disinheritance. As with disinheritance, there is need for final conviction for some, not for others, and one requires exoneration.

First ground (actually three): o 1. Abandonment of child o 2. Inducement by parent for daughters to live a corrupt or immoral life o 3. Attempt against virtue of daughter

This article refers to unworthiness of compulsory heirs. Parents who have abandoned their children. But what if the child is under the authority of grandparents, will this apply?
o RFB thinks so. It should probably be “ascendants who abandon descendants.”


Abandonment has no precise meaning. How do we understand it here?
o When the parent/ascendant culpably neglects the support of the child. “Culpably” means without justification. o What about giving consent to adoption, is it abandonment?

No. It is not a culpable act. It is encouraged by law.

Re: inducement. What about grandchildren/granddaughters?
What about grandsons? o A liberal interpretation would include all these.

Attempt against virtue? o This should include grandparents o Does this need conviction?

No. o What does “attempt” cover?

All stages of commission.
 Also not limited to rape: it should cover other offenses against chastity.

Are the grounds exclusive? o Yup.

Do you need actual disinheritance? o No. The law itself excludes the heir.

What is the extent of the disqualification? o Total, like in disinheritance
– no compulsory, testamentary, intestate

Is there representation here? o Yes, in the same way as disinheritance. But again, it has to be a descendant.

How does one set aside unworthiness? o 1. Written condonation o 2. Execution by offended party of a will with knowledge of the cause of unworthiness

Why is the code stricter in unworthiness than disinheritance? o This is an inconsistency, because there are many grounds common between both unworthiness and disinheritance. This happens when if the offended party avails himself of that ground and actually disinherits.
o Ex. X is the son of Y. X attempts to take Y’s life. A case for frustrated parricide was filed, and he was convicted with final judgment. It is a common ground in unworthiness and disinheritance. So in this case, he is automatically unworthy.
But Y still disinherits X, which he can do. There is no problem here; he is just “double dead.” But what if X and Y reconcile?
Y admitted X back into his house, and forgave him orally.
Under the rules on disinheritance, reconciliation is enough to set aside the disinheritance. But because there is no written pardon, the unworthiness persists.
o How do we resolve this?
 Commentators like Tolentino say that it is the rules on disinheritance that prevail, because disinheritance is the express will of the aggrieved party. It should prevail over unworthiness.

If the facts are the same but Y did not disinherit X, unworthiness will apply. So there has to be a written pardon.
D of child/des
Attempt against life
Accusation of crime
Adultery/conc.
Force to change will
Refuse to support
Maltreatment by word/deed
D of parent/as
Attempt against life
Accusation of crime
Adultery/conc.
Force to change will
Refuse to support
Dishonorable life
Crime with civil interdiction
Abandoned, induced to corrupt life, attempt v. virtue
Loss of P.A.
Attempt by one parent against
D of spouse
Attempt against life
Accusation of crime
Force to change will
Refuse to support
Loss of P.A.
Unworthiness
Attempt against life
Accusation of crime
Adultery/conc.
Force to change will
Abandoned, induced to corrupt life, attempt v. virtue

life of other
Cause for LS
Prevent from making will or revoking one
Falsification or forgery of will
Representation

Definition of representation?
o Article 970. o Comment on “fiction of law”?

This is unnecessary. It is a right created by law, after all. o Comment on the term “representation”?
 It’s a misnomer. Because what he gets in succession belongs to him! He is actually subrogated.

When does representation apply?
o ONLY Predecease, Disinheritance, Unworthiness/incapacity o There is no representation in renunciation

In what kinds of succession does representation operate? o 1. Compulsory o 2. Intestate

In what lines does representation obtain? o N.B. In both compulsory and intestate succession there is a direct line and a collateral line. The direct line you have the ascending and descending. Collateral are not ascendants or descendants, but are related to you up to the 5 th degree.
o Representation
–
operates ONLY in the descending direct line. NEVER in ascending.

What is the rule on adopted children? o Cannot represent nor be represented, because the legal relationship in adoption is strictly between adopter and adopted.

What is the rule on representation by illegitimate children? o This is the “iron curtain” provision.
o An illegitimate child of a legitimate child cannot represent the latter.
o An illegitimate child of an illegitimate child can represent the latter.
o If the child is legitimate, he can obviously represent either illegitimate or legitimate parent.

What is the rule on shares of the succeeding representatives? o Since they are only stepping into the shoes of the person represented, they could get unequal shares. Ex. A had 2 children, B had 3. Both A and B predecease their father, X.
The 2 children of A split A’s share by ½ each and the 3 children of B split B’s share by 1/3 each.
o N.B.
Take note that the rule changes when ALL, not just some, of the children renounce. The grandchildren will inherit per capita.
o What if all children predecease?

The grandchildren still inherit by representation, and not per capita.
o IMPT. How does the rule change for the sole case of representation in the collateral line?
 A, B, and C are brothers and sisters of X. If A and B predecease X, then the children of A and B inherit per representation.

But if ALL of A, B, and C predecease
– the nieces and nephews of X will inherit per capita. NOTE that this is different because in the descending line, it will be still succession by representation.
o Is it even relevant to talk about disinheritance or unworthiness for collateral heirs?
 It’s not. You cannot disinherit a brother or sister because he’s not a compulsory heir.
o What if there is renunciation by all collateral heirs?
 Same rule as direct line heirs: the nephews and nieces will inherit per capita.

What are the 3 rules on qualification? o 1. Representative must be qualified to succeed the decedent
(e.g. C must be qualified to represent A) o 2. Representative need not be qualified to succeed the person represented (e.g. C need not be qualified to succeed B) o 3. The person represented need not be qualified to succeed the representative (e.g. B need not be qualified to succeed C)


What is the difference between representation OF and BY a renouncer?
o Representation OF renouncer

does not happen o Representation BY renouncer  can happen.
 Illustrate this rule. A  B  C. C renou nced B’s inheritance. But C can represent B if B predeceases
A, because C is inheriting from A, not B.
Reserva troncal

What is Reserva Troncal?
o See Article 891
 What’s the purpose of reserve troncal? o To keep property or return property to the line of origin.
(Sanchez Roman view)

What are the requisites of RT? o 1. Person acquires property from ascendant or brother/sister through gratuitous title o 2. Dies without legitimate issue o 3. Inherited by another ascendant through operation of law o 4. There are relatives within the 3 rd degree of consanguinity belonging to the line from where the property came

Why is the reserve troncal included in compulsory succession? o The RT can limit the operation of the legitime o If that part which is reservable passes as legitime, the law says that it should pass with no burden. But if it passes as RT, it will be under the burden of RT because the law says so. o It’s better to take it up as part of compulsory succession because it can become an encumbrance on the legitime.

What are the two transmissions that have to take place? o 1. By gratuitous title, from the origin to the prepositus
 This can include donation or any kind of succession o 2. By operation of law, from the prepositus to the reservista
 ONLY compulsory or intestate succession

What if there is only one transmission? o There is no RT. There have to be two transmissions for there to be RT.
o Solivio : there was just one transmission from the mother to the son, by donation. When the son died, he had no ascendants at all or descendants either. Because there was no other ascendant, the second transmission could not happen. The closest relatives are two aunts, who are not ascendants.

Who are the parties in RT? o But first, two basic rules:
 1. All of these parties must be legitimate. If any of the relationships is illegitimate, there can be no RT.

2. No further inquiry beyond the origin is required o 1. The origin
–

Ascendant of prepositus, of any degree, of either line

Or brother/sister of prepositus, either full or half blood
 If full blood, Manresa says “yes.” JBL says
“no, because there is no possibility of the property leaving the line. The ascendant lines are common.
” 1 o 2. Prepositus o 3. Reservista
 Has to be a different ascendant from the origin

Must he be another ascendant from another line or can it be same line?

If another line, no question he can be a reservista. (Ex. F

S

M)

If same line (Ex. GF

grandson

F [same line as grandfather, since he is the son of the grandfather]), according to JBL, there is no
RT. According to Manresa and Sanchez-
Roman, there is an RT.
2 o 4. Reservatarios

They must be related within the third degree, in relation to the prepositus
1
2


Of course exclude legitimate descendants, since if the prepositus had decendants, there would have been no RT
 Who are these possible reservatarios?

Parent, grandparent, great grandparent

Brother, sister, nephew, nieces, uncles, aunts

Note: in the situation that JBL seeks to exclude (but
Manresa favors), there is no need to make a distinction since there is no change in lines.
 When do you determine who the reservatarios?

When the reservista dies. They do not have to exist when the prepositus dies.

If there are several, but of different degrees, how do you determine who gets what?

Tolentino: Selection is made on preferential basis, not integral and indiscriminate, as
Scaevola believed.

Apply the rules on intestate succession
(direct over collateral). Another rule of intestacy that applies is representation of nephews or nieces of brothers/sisters [so the brothers/sisters do not exclude nieces/nephews].

What is the consequence?

Gonzales: The reservista cannot choose, by will who the reservatarios will be. The law chooses for her.

Should the reservatario be related to the origin?

A1 and A2 have a child, B1. B1 is married to
B2, and have a child C. A1 donates property to C. B1 died, when C dies, it goes to B2.
Thus, there is an RT here. When B2 dies,
A2 survives and claims the property as reservataria (since she is related by 2 nd degree to C, the prepositus).

MANRESA – she is a reservataria, she meets the purpose and requirements

SANCHEZ ROMAN
– she is not, because you did n’t return it to A1’s line and A1’s relatives. A2 is not related .
 So what is the majority view?

The reservatarios must be related by blood to the origin.

This is not yet established by jurisprudence, but this is a good view point.

What is the nature of the right of the reservista? ( Edroso ) o 1. Right of ownership o 2. Subject to the resolutory condition that there will be reservatarios present upon the reservista’s death o 3. The right is alienable, subject to the same resolutory condition
4. The right of ownership is registrable

What is the right of the reservatarios? ( Sienes ) o 1. Right of expectancy o 2. Subject to a suspensive condition, that there will be reservatarios present upon the reservista’s death o 3. The right is alienable, subject to the same suspensive condition o 4. The right of expectancy is registrable o Don’t these two rights of registration conflict with each other?
 No. There’s only one title. The right of the reservista is annotated as ownership; the right of the reservatario is annotated as an encumbrance.

What kind of property can be reserved?
o Any type

What are the rights and obligations of the reservatarios and reservistas?
o Reservista prepares inventory o Right of reservatarios to annotate in case the reservista alienates (within 90 days from acceptance by the reservista) o Appraise the movables o Secure by means of mortgage o Registration is demandable Sumaya

What are the causes for extinguishment of RT?
o 1. Death of reservista (causes it to transfer)

o 2. Death of all the reservatarios o 3. Renunciation by all the reservatarios, and none is born subsequently o 4. Total fortuitous loss of the property o 5. Merger or confusion of rights o 6. Prescription or adverse possession
TESTAMENTARY SUCCESSION
In general

Testamentary succession can never impair the legitime

What is a will?
o An act whereby a person is permitted, with the formalities prescribed by law, to control to a certain degree the disposition of his estate to take effect after his death o Why is this inaccurate?
 “Act” is too broad. Instrument is a better word.

What are the two kinds of wills? o Holographic and attested/notarial

What are the three common requisites (first two, textual; one is non-textual)? o 1. It must be in writing ( textual requirement ) o 2. Executed in a language or dialect understood by the testator( textual requirement )
 Is this rule mandatory?

Definitely.

So can the will be translated to the testator?

No. It must be written in a language known to him. Do not confuse this with the attestation clause, which can be translated.

Must the will state it was written in a language known to the testator?

No. It can be shown by extraneous evidence/evidence aliunde.
o 3. Testamentary capacity
 Who can make a will?

Natural person (juridical person cannot make a will)

Who are the two classes of disqualified persons?

Those below 18 years old

Those of unsound mind
 Putting it positively, one must be a natural person 18 years old or above and of sound mind.

What must you know to establish a sound mind?

1. Character of estate

2. Proper objects of your body

3. Nature of the testamentary act

Is there a presumption?

Yes, a rebuttable presumption of testamentary capacity

When is there no presumption? o 1. If the testator, 1 month or less before the making of the will, was publicly known to be of unsound mind o 2. When the testator has been placed under guardianship for insanity

What is the presumption then? o There is a presumption of insanity, not just a presumption of sanity.
Again, this is rebuttable

A requirement is that the testator must sign the will and every page at the left hand margin, except the last.

How can the testator usually sign?
o He writes his name

What are the other recognized ways? o Affixing thumbmark (Matias v. Salud)
 Is the thumbmark for the testator always a valid way to sign the will?

Yes. Under all circumstances, even if not infirm or ill.
o Is a cross allowed (Garcia v. Lacuesta)?

No, in general.
 THE EXCEPTION: If that is his usual way of signing.

 There are two ways of interpreting the word “the end,” where the testator’s signature should be. What are these? o 1. The physical end, where the writing stops o 2. The logical end, if there are non-dispositive portions written in the will

Must the signing always be at the left margin? o No. It can be any margin.
o Why is there no requirement for marginal signing on the last page?
 Because it would be superfluous. He also signs at the end.

The testator must sign in the presence of the witnesses. The witnesses must also sign in the presence of the testator and of one another. What does the law mean by “in the presence”? o Nera: The requirement of presence does not mandate that the person must actually see the other party signing; what is required is that he could have seen, by casting his eyes in the proper direction (without changing his physical position).

One of the options given to the testator is that he/she may ask someone else to sign for him, provided some conditions are present (1. Express direction; 2. In his presence) . o Should the testator be physically prevented from signing or have any particular reason to get an agent?
 No.
o What should the agent write?
 He must write the testator’s name
 It must be in the agent’s own handwriting o Must the agent write his own name?
 It is not required.

Must the attestation clause be signed? o Yes.
o By whom?

The witnesses.
o What about the testator?

No. The attestation clause is purely an affair of the witnesses.

Where should the witnesses sign the attestation? o At the end of the attestation clause.
o Can they sign at the margin or elsewhere (beside)?

No. The attestation clause is deemed unsigned.

What must the attestation clause state?
o 1. Number of pages of the will o 2. Fact that the testator signed the will and all the pages thereof, or caused some other person to write his name under his express direction, and in the presence of the instrumental witnesses o 3. That the witnesses signed the will and all the pages thereof in the presence of the testator and of one another

Must the attested will bear a date? o No.
o Why?
 The certification of the acknowledgement will be dated anyway.
o Who certifies?

The notary public
– as required by the notarial law.

Should a holographic will be dated? o Yes.

What if the notary public acted outside his notarial jurisdiction? o It is void and tantamount to not being notarized.

If the will was notarized by one of the witnesses, who was also a notary public, will this make the will void? o No, if there are three other witnesses apart from the notary. o If there are less than three witnesses including him?
 The will is void. There is a failure to meet the required number of witnesses. o But can a notary public be a witness?

Definitely. But the notary public cannot be counted as a witness, and the witness cannot be the notary public too. For the latter, you are undermining the notary public’s impartiality.

What is the requirement if the testator is blind? o Two readings
– by the notary public and by one of the attesting witnesses.
o Is this mandatory?
 Yes. Non compliance makes the will void.

Should this mandatory nature extend to illiterate deaf mutes?

Yes.

o Must the will or attestation clause mention compliance with this mandatory requirement?

No. It can be established by extrinsic evidence.
o Garcia: The lawyer who assisted the testator read the will.
It was read only once. The lawyer, however, read it aloud in the presence of the attesting witnesses and the notary public, who had their own copies of the will. The testator was also listening. Art. 808 was hence not complied with.
But is this valid?

This is valid, because there was substantial compliance. The intent of the law was achieved
– to prevent fraud upon the testator. o Alvarado: Invalid because it was done by the lawyer who drafted the will who read it aloud, so it wasn’t even one of the two parties enumerated. And he read it out loud only once.

Art 809 is the provision on substantial compliance with respect to the attestation clause, which needs three things (# of pages, fact that the testator signed at the end in the presence of the witnesses, and that the witnesses did the same in the presence of the testator and of one another). How strict must this be in light of Art. 809?
o In the code itself, there is no clear rule about how liberal interpretation could be. o Caneda : defect was failure to state that the witnesses signed in the presence of the testator and of one another. HELD:
This was a fatal defect. Adopting JBL Reyes’s suggested standard, it could not be remedied by visually examining the will. o Azuela: Deficiency was failure of the clause to state the number of pages, which was left blank. HELD: valid omission, because it can be supplied by a visual examination of the will.

Requirements of a Holographic will? o Completely written, dated, and signed by the testator o Roxas v. de Jesus: Feb/61 was held as a sufficient date
– this is a problematic decision. Fortunately, there was no other will also made in Feb/61, which could have possibly repealed it. In a very liberal decision, it was upheld. o Where should the date be?
 There was no mention where it should be. It could be in the body. o Can you sign by a thumbmark, as in an attested will?
 Seems unlikely. It must be “written by the hand” – not a thumbmark. Though there is no jurisprudence on this.

813-4
– dispositions after the signature o Some commentators say that this implies that the signature must be at the bottom of the holographic will.
o If there is only one additional disposition, it must be written and signed by the testator.
o If there are several, what is the rule?
 1. Dated and signed
 2. Or each additional disposition may be signed, provided the last one is dated and signed

Kalaw v. Relova: Cancellation of the name of the original heir and writing above it of the name of another heir
– invalid because it was not validated, because it was not signed. o But the court weirdly held that the cancellation was valid! But it was not signed. This is an odd decision, because it had an internal contradiction.

Rules on probate 

Codicils and incorporation by reference (825 and 827) o Article 825 defines a codicil. This is exam material. It assumes the existence of a prior will. You cannot have a codicil without a prior will. It can explain or alter the prior will. o Sometimes it’s hard to determine whether it is a codicil or a second will.

If it makes an independent disposition, it is a second will.
 If it alters, modifies, changes, it is a codicil. o But honestly, this distinction is academic, because the requirements of a codicil and a will are just the same. o 827 – An incorporated document. It is attached to a will and is intended to explain. It cannot make a testamentary disposition because otherwise, it has to comply with the requisites and form of a will.
 Requisites?

1. It must predate the will


2. It must be signed on every page by the testator and witnesses, except if it is voluminous

3. It must be clearly referred to in the will

4. It must referred to in probate as that document
 So since it requires witnesses, can you not have an incorporated document with holographic wills?

Some say you cannot because there are no witnesses. RFB says that you must interpret it liberally, and since there are no witnesses, then it just means it’s just the testator that signs.

Two modes of testamentary succession: o 1. Institution of an heir o 2. Institution of devisee or legatee

What is the permissible form of instituting a successor, whether heir, devisee, or legatee? o Only thing required is that the identity of the successor is adequately determined in the will. No need to mention by name, as long as the successor’s identity is determinable.
 “I institute my brothers and sisters to ½ of the share of my estate.”
What does this mean? o Siblings, whether legitimate, illegitimate, or half, inherit in equal shares.
o This is different from intestacy, where whole, half, and illegitimate siblings inherit in 2:1:0 ratio. (You cannot inherit from your illegitimate sibiling)

What is the rule on statement of false causes on a will? o In general, it is deemed not written.
o Unless it is shown that:

1. Cause must be false

2. It must be shown to be false
 3. It must appear on the face of the will that the testator would not have made the institution had he known of the falsity of the cause

If heirs are given different fractions each, and the total is less than the free portion, what happens? (852/3) o The rest of the free portion goes into intestacy.
o But what if it is shown that the testator intended to dispose the entire free portion?

If the disposition is less than the portion, you increase proportionately. If more, you decrease proportionately.
924-959
– Legacies and devises

Some provisions are inaccurate. It is estate that is liable for legacies and devises, not compulsory heirs as 925 says. You cannot charge the compulsory heir for the legacies and devises. Exception: indirect legacy

929-937 outline: o 1. General rule: you give away what your interest covers. No more, no less. If you own the whole thing, you give the whole thing.

Exception
– you can give more than you own. This estate will attempt to acquire it, but if the estate fails, the monetary equivalent is given.
 Exception 2 – you give less than you own. o 2. Legacy or devise of a thing belonging to another – under the ff rules, you can:

A) if the testator gives an order to acquire it, the estate tries. If the owner refuses to sell, the estate gives the monetary equivalent.
 B) If the testator wrongfully believed he owned the thing, the disposition is void.

Exception
– if subsequent to making the disposition, the testator acquires the thing gratuitously or onerously.

If he knew he did not own it, but did not order for its acquisition  there is an implied order to acquire. o 3. The legacy or devise of a thing already belongs to the devisee or legatee
 If a thing given already belongs to the legatee or devisee, the disposition is void

Subsequent alienation is not validated, unless as Manresa says, the alienation is to the testator himself


If the thing belongs to somebody else when the will was made, and he erroneously believed it belong to him, and later, the legatee or devisee acquired the thing
–

It is still void, because the testator was in error

If the testator knew it did not belong to him, and the thing was acquired onerously by the devisee/legatee, the estate pays o Except – if acquired gratuitously, then there is nothing else to be done
 If the thing was owned by the testator at the making of the will, but the legatee/devisee acquired the thing from the testator after, the disposition is void
(because subsequent disposition, even to the recipient himself, renders the legacy/devise useless) o 4. Legacy/devise directing the estate to remove the encumbrance of property of another  the estate pays for it
 Pledge/mortgage  estate must pay for it first

Any other kind of encumbrance like easement or encumbrance

passes with the things o 5. Legacy of credit or remission
 i.e. giving to the recipient the debt owed to me by another person  effective as to remaining debt owed upon the testator when he dies
 If the testator sues after making the disposition  ipso facto the legacy is revoked. Mere filing revokes the disposition. Extrajudicial demand does not revoke the disposition. It must be a complaint for collection.
 If generic, on the debts existing when the disposition was made. Ex. X owed Y 2 debts in 1999. Y, in his will, gave Z the debts X owed Y. X owed Y 3 more debts in 2001. Y died. What debts transfer?

Just the 2 existing when the will was made.

What is the order in 950 for reduction?
o 1. Remuneratory o 2. Preferred o 3. Legacy for support o 4. Education o 5. Specific o 6. All other, pro rata

What is the rule in 911? o 1. Reduce pro rata non-preferred legacies and devises o 2. Reduce pro rata preferred legacies and devises

When do you use which? o If the reason for reduction is impairment of legitimes, use Rule in 911. o If the reason for reduction is something else, use Rule 950. o What other reasons could exist?
 A testator has no compulsory heirs, but he gave away too many legacies and devises, by sheer mathematical necessity. Rule 950 is followed.

Or maybe the testator already covered for the compulsory heirs’ legitimes through donations inter vivos, so the remaining parts are all free portion.

When is a legacy or devise without effect?
o 1. Transformation
–
 Converted the thing o 2. Alienation
 Either onerous or gratuitous, and even if the thing reverts to the testator

Exceptions?

1. Reversion was caused by annulment of alienation because there was vitiated consent

2. Reversion due to redemption in a pacto de retro sale o 3. Total loss before the testator’s death
Rules common to heirs, legatees, and devisees

Capacity to succeed: o In fact, the basic rules are common to all kinds of succession
(Alive + qualified to succeed at the time succession opens.
There is no exception here.)


Art 1025 – The heir, legatee, or devisee must be living when the testator dies. There is NO exception, contrary to what this provision suggests. o Representation is not an exception because the representative must at least be conceived already. o For juridical persons, it must exist juridically when the testator dies.

1027
– First 5 paragraphs are important because they enumerate instances where one is incapacitated to succeed in testamentary succession. It does not apply to other kinds of succession. o Just memorize this list :
 1. Priest who head confession of testator during last illness or minister of gospel extending spiritual aid in this period. Requisites:

A. Will executed during last illness

B. Spiritual ministration extended during last illness

C. Will executed during or after the spiritual ministration

2. Relatives of priest/minister within 4 th degree or his institution
 3. Guardian, from ward before final accounts of guardianship approved

Except if guardian is A/D/sibling/spouse
 4. Attesting witness to the execution of a will, spouse, parents, children, or anyone claiming under that witness, spouse, parent, or children

Put in the exception, where there are three other competent witnesses to the will, under here too
 5. Physician or health officer who took care of the testator during last illness o Take note especially for the priest and the doctor .

1028 – only applies to testamentary succession: extend to prohibited donations in 739

1032 disqualifications
– these are general ; these bar the DQ heir from compulsory, testamentary, or intestate succession
Substitutions

857-870
– Substitutions. You cannot have substitution in compulsory and intestate succession.

What are the two kinds of substitutions?
o 1. Vulgar o 2. Fideicomissary o The code seems to enumerate two more:

1. Reciprocal

2. Compendious

(Several heirs one substitute)
 …but these actually are just variations. They go into mode.

What is substitution vulgar?
o Instituting an heir in default of the one instituted

Predecease, incapacity, renouncement o How do you make it?
 Enumerate all the three causes o Can you restrict vulgar to 1 or 2 grounds?
 Yes. Just specify.

What are the requisites for fideicomissary? o 1. First heir takes the inheritance o 2. Second heir takes the thing after tenure of the first heir o 3. The second heir must be one degree from the first heir
 What does “first degree” mean?

It refers to relationship. o 4. The first heir must have absolute obligation to preserve and transmit o 5. Both heirs are alive and capacitated at the death of the testator

What is the tenure of the first heir?
o What is specified by the testator o If not specified, it is the lifetime of the testator

Does the first heir have a right to alienate? o NO. This rule is unlike the reserve troncal.
Conditions, terms, modes

These all burdens in succession, especially since the testator has free disposal of his property.

What are the types of conditions?

o Suspensive o Resolutory

What are the special rules on suspensive conditions? o An impossible condition (873) – considered not imposed. The disposition is valid and becomes pure.
o What about condition not to contract first marriage?

ALWAYS considered not written o What about subsequent marriages?

Generally void, unless imposed by the deceased spouse or the latter’s ascendants/descendants o BUT what is allowed is to impose a usufruct or some personal prestation as long as one remains unmarried or a widow is valid.
o A disposition on condition that the heir/legatee/devisee must also in turn make a disposition in favor of the testator or another person?

The entire disposition is void. Take note of this. The purpose is to prevent the whole system from being corrupt.

When does a suspensive condition take effect? o If both conditions exist: 1) the heir is alive when the testator dies, 2) the heir is alive when the condition happens

What happens while waiting for the suspensive condition to happen? o Place the property under administration of executor/administrator

What is the difference between a term and condition? o A term is certain, a condition is not.

What are the two types of terms? o Suspensive term o Resolutory term

When does an institution based on a term vest? o A disposition with a term vests upon the death of the testator, unlike a conditional disposition (esp. suspensive) which only vests upon the happening of the condition. Since a term is certain to happen, it follows the general rule in 777 that it vests upon death.

So must the heir be alive when the term arrives?

No. Just when the testator dies.

So he can transfer his vested right upon his own successors.

What do you do as you wait for a suspensive term to arrive? o Governed by 885. While you wait for the term to arrive, you give it to the legal heirs (intestate heirs).

For resolutory terms? o After the testator’s death, you give it to the instituted heirs, and when the term arrives, they turn it over to the legal heirs.

A condition suspends, but not obligates. A term obligates, but does not suspend. A term does not delay the efficacy of the disposition, but it places an obligation upon the instituted heir (even suspensive, since the instituted heirs have an obligation to turn the property over to the instituted heir when the term arrives).

What is a mode? o You have to do something alongside the disposition.

What if the heir fails or refuses to perform the act required? o The beneficiary can ask for the performance of the obligation.
o The legal heirs can ask for the forfeiture of the disposition.

How must a mode be stated? o It must be a clear command, not just a request.

When is a caucion muciana needed? o 1. In a potestative suspensive condition (879)
 It is under the sole control of the heir (ex. I give X my house and lot, as long as he doesn’t use it as a drug den. In order to guarantee that the legal heirs, who will then be entitled to the property upon violation of the condition, then X has to put up a bond – the caucion muciana). o 2. Resolutory term, before the term arrives
 The legal heirs have the right to enjoin disposition of the property, but they have to put up a caucion muciana o 3. In case of a mode (882)
 As security for compliance with the testator’s wishes
Accretion (1015-23)

To which kinds of succession does it apply? o Applies only to testamentary and intestate succession.


Requisites? o 1. Two or more heirs, legatees, devisees, called to the same inheritance or portion thereof pro indiviso
 What does “pro indiviso” here mean?

Some commentators say they must have equal shares (like Tolentino), but this is wrong. There’s no requirement of equality, just as long as they have aliquot shares.
This means even the shares can be unequal.

There is no accretion is the shares are earmarked.
o 2. One or more must predecease the testator, become incapacitated, or renounce the inheritance.

X gives his BPI account to A, Citibank account to B, PNB to C. C predeceases. Is there accretion? o No. The shares are earmarked.
 X gives ½ of his estate to A, 1/3 to B, 1/6 to C. C predeceases. Is there accretion? o Yes, because they got aliquot shares. A and B rec eive C’s shares according to the proportion they received their shares.

In testamentary disposition, what wins out, accretion or substitution?
o Substitution

In intestate disposition, what wins out, accretion or representation? o Representation, when proper
Revocation of wills (828-834)

There is no such thing as an irrevocable will. It only becomes irrevocable when the testator dies.

What are the three ways of revoking a will, whether total or partial?
o 1. By operation of law

Legal separation (offending party is instituted as a beneficiary in a will)
 Preterition
 Where the testator disposes property that is given as legacy or devise in a will (the legacy/devise is revoked) o 2. Subsequent will/codicil

1. The will must comply with the requirements of wills

2. Testamentary capacity

3. Either an express revocatory clause or incompatibility in the dispositions
 4. The will must be admitted to probate o 3. Physical destruction

Either by the testator personally or in the case of attested wills, it can be done by his agent acting under his express direction and in his presence
 Molo : There must be both a) corpus (actual destruction), and b) animus (intent)

What if the revocation was unauthorized? o If it is an attested will, it can be proved, if there are people available who can attest to the contents of the will o If it is a holographic will, too bad if no copies survive
. There’s no way of probating it.
Republication and revival

835 and 836 are inconsistent with each other.

Republication/revival is giving efficacy to a will which somehow lost its efficacy? o Ex. it has been revoked, and now you want to revive it.

If it is defective as to form?
o You have to reproduce it in the form of a valid will or codicil. o You cannot revive it by reference.

What if it is inoperative by some other reason other than form? o You can merely revive it by reference.
Executors and administrators (1058-1060)

What if the decedent dies with a will? With no will? o It has to be probated, and if the will has appointed someone to take care of the estate, then he becomes the executor.
o If there is none appointed or no will, then the court appoints an administrator.
Probate


Two aspects of validity of a will? o Formal (Extrinsic validity)
 including capacity of witnesses o Substantive (intrinsic validity)
 Ex. impairment of legitimes, preterition, capacity of heirs, legality or possibility of conditions

What is probate? o Mandatory proceeding to determine only the formal validity of the will o There is no substitute for probate.
o Guevarra v. Guevarra, Seangio v. Reyes, Heirs of Lasam:
All lay down the rule that probate is mandatory.

Probate is determinative or conclusive of the validity and due execution of the will.

How does it become final?
o Just like any decision of court. o Once it becomes final, it becomes res judicata – it becomes unassailable as to matters of form of the will. o Even if the decision is wrong.

What cannot be assailed after finality of probate decree?
o 1. Testamentary capacity o 2. That he acted freely o 3. Followed all the requirements of the will, as to witnesses, etc. o 4. It is genuine and not forged

For probate of holographic wills, what must one remember?
o 1. You have to present the will itself ( Gan v. Yap )
 Except there is a photocopy that survives ( Rodella v.
Aranza ) o 2. If the holographic will is contested as probate, three witnesses who can identify the will and attest to its validity must be presented.
 Is this mandatory?

The leading case of Azaola says that it is only directory

Godoy: Says that it is mandatory, although it is criticized
 When is it deemed contested?

If it is challenged as a forgery. If it is admitted as genuine but admitted on other grounds such as mistake, fraud, or duress, it is not a contest under 811 and you do not need three witnesses.
Conflicts rules

Substantive validity? o Time
– law as of time of death o Place
– law of citizenship of decedent

Formal validity? o There are always five choices: o 1. Law of citizenship o 2. Philippine law o 3. Law of residence o 4. Law of place of execution o 5. Law of domicile
INTESTATE SUCCESSION
In general

What is intestate succession? o Takes place by operation of law in default of a valid will

Look at the instances in 960 where total or partial intestacy occur: o 1. No will, void will, or ineffectual will o 2. Does not dispose of all property (partial intestacy) o 3. Suspensive condition did not occur, predecease, repudiation
 And there is no substitution (testate)

And there is no accretion (testate/intestate) o 4. Heir is incapacitated/unworthy o 5. Resolutory condition happens o 6. Resolutory term expires o 7. Preterition

What are the principles of intestacy? o Exclusion and concurrence, just like compulsory succession

What is the rule of relationship? o The intestate heir must be related to the decedent

o Jus familiae (ascendant/descendant) o Jus sanguinis (collaterals up to fifth degree) o Jus xxx (husband and wife) o Jus imperii (decedent and State)

Just familiae and sanguinis requires blood relationship. What is the exception? o Legally adopted children and legally adoptive parent

What are the limits? o Going down, there is no limit o Going up, there is no limit o Collateral line, the limit is up to the fifth degree

How do you count degrees? o For direct line, count degrees o For collaterals, count up to the nearest ancestor

2 nd – brothers, sisters

3 rd – nephews, nieces, uncles, aunts
 And so on

Rule of preference of lines? o Direct excludes collaterals o As a general rule, descending excludes ascending

Except: legitimate ascendants not excluded by illegitimate descendants o Is there representation in the direct line?
 Yes, only in the descending o Collateral – nearer excludes more remote o Is there representation if the collateral line?

Nephews and nieces exclude predeceased or unworthy brothers/sisters of decedent

What is the nature of the spouse?
o Concurs with both direct and collateral (up to third degree)

What is the rule of proximity of degree?
o Nearer exclude the more remote o What is the exception?

Representation (see above
– direct descending and nephews/nieces only for collateral)

What is rule of equality of relatives of the same degree? o Relatives of equal degree inherit equally o Exceptions?

1. Preference of lines
 ex. legitimate direct descendant of 1 degree excludes legitimate direct ascendant of 1 degree
 2. In collateral relationships, full blood and half-blood distinction

Siblings

Nephews and nieces

3. Representation

See the combinations in the book.

Can the adopted succeed to his biological parents?
o This is the same problem as in compulsory succession so see the discussion above .

Combinations 2 and 4 in the book are dangerous, so take note that here (children and illegitimate children) – each legitimate child gets double what the illegitimate children will get. What is the usual pitfall?
o If you observe the 2:1 ratio intestacy, remember that you still have the legitimes. You might end up impairing the legitime of the legitimate children, which cannot be impaired. The illegitimate children can suffer impairment if there are a lot of them, but never the legitimate children. o This problem doesn’t apply in any other instance apart from these two cases.

What is the successional bar? o Art. 992. 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. o Manuel v. Ferrer: Article 1006 [?] applies as an exception if both are … [something like if both are illegitimate. I spaced out]

Situations to take note of: o In case of the concurrence of the SS and 1 LC, the SS will get
½, and the LC gets ½.
o SS, brothers, sisters, nephews, nieces – SS gets ½, brothers sisters nephews nieces get ½.
 According to the rules of division.

o Nephews and nieces concurring with aunts/uncles of the decedent
– nephews and nieces exclude the aunts/uncles even if they are in the same degree.

What is the difference in rules for brothers/sisters in testate and intestate succession? o TESTACY: Difference in the rule of brothers and sisters – if they are instituted indiscriminately, they receive equal shares whether full or half blood. o INTESTACY: Take note of the 2:1 ratio [for full and half blood] and the successional bar.

Is partial intestacy possible? o Yes, there is a will but it doesn’t dispose of the entire free portion.

Give an example of the difference between total and partial intestacy. o Full intestacy:
 Legitimes – ½ to LC, ¼ to SS
 Thus, ½ to LC, ½ to SS (entire ¼ free portion went to the SS) o Partial intestacy: Ex. I gave 1/8 of my estate to Ateneo.
Note that the legitimes are ½ to LC, ¼ to SS.
 ½ to legitimate children, 1/8 to Ateneo, 3/8 to spouse
 Note: the entire remaining free portion of 1/8 went to the SS.
Acceptance and repudiation of the inheritance (1041-57)

Acceptance and repudiation are always free acts. A person may always accept or reject, whether compulsory, testatamentary, intestate.

Exception: accion pauliana o If there are creditors and the decedent does not have enough property to pay the creditors, the creditors can compel the heir to accept to the extent of the credit

What is the difference in form?
o Laxer rules in acceptance, and stricter rules in renouncement, because it is prejudicial
 There is need for judicial approval for renouncement of incapacitated person. For acceptance, no need. o Acceptance
– there can be express acceptance in writing, oral, or there can be tacit acceptance (by doing nothing). o Renouncement
– you have to do it in writing or by judicial approval.
Partition

What is the effect upon death of the decedent? o The immediate effect of death is the vesting of successional rights. But at this point, nobody knows what part of the estate goes to whom. o The heirs co-own the mass of properties.

You have to collate: o 1. Inventory
 What results are his gross assets o 2. Deduct debts

This is where the Santibanez and Hemady doctrines come in. The estate, after all pays money debts, prior to the heirs receiving their shares.
 What results: available assets o 3. Add the value of donations inter vivos
 Net hereditary estate results.
 What if the recipients of the donations are the compulsory heirs?

You impute against their legitimes what they have received as donations inter vivos.

What if the recipients of the donations are strangers?

You impute it against the free portion.
 What if the donation to the compulsory heir exceeds his legitime?

The excess is taken out of the free portion

What if the free portion can accommodate all those donations?

You take it all out from there

Does collation mean you have to physically obtain the assets? o No. Collating means a purely mathematical computation.

If he died with a will and the free portion cannot accommodate all the dispositions?

o Reduce testamentary dispositions o First to be reduced are the non preferred testamentary dispositions

After reducing them to zero, what if the legitimes are still impaired? o Reduce the donations to strangers or donations to compulsory heirs considered strangers o How do you reduce?

NOT pro rata but in reverse order. The latest donation gets reduced first.

Afterwards, the heirs can agree on a partition or go to settlement proceedings. Partition here is the physical division of the estate.

OBLIGATIONS
Trends in Obligations and Contracts:

1. Obligations have been progressively spiritualized o There is very little requirement as to form. Upon meeting of the minds, in general, there is a K.

2. The principle of autonomy of will, which is still the general rule in K law, has been restricted. o There are prohibited obligations from being entered into o Art. 1306 – Contracting parties may establish clauses and terms as they may deem convenient
 Provided they are not contrary to law, morals, public order, good customs, or public policy
 There are five categories of restrictions. They restrict freedom but promote the greater good.

Ex. labor contract with consideration less than the minimum wage.
 Ex. Those that violate environmental considerations, social justice, gender issues, etc.

3. Mitigation of the principle that the debtor must answer with all his property o Before: you enter into a K and the creditor can pursue all your properties to exact fulfillment of the obligation o Now: In the interest of social justice, there are many things that the creditor cannot levy upon, although the principle is still good – the creditor csan pursue the property of the debtor to exact fulfillment of the obligation o In the Rules of Court, there is a list of properties exempt from attachment, for instance:

1. The Family Home

2. What you receive from support
 Etc.

4. Weakening of the principle that liability results from responsibility o In general, under the law, you are only liable if you are responsible. Ex. if you are guilty of driving recklessly. o Ex. employer can be responsible for employee’s wages if not paid

5. Unity in modern legislation o This is especially important in global commerce o Ex. Bills of Lading, Trust Receipts, Intellectual Property, etc.
Essential requisites of obligations

What are the requisites of obligations?
o Four generally accepted requisites: o 1. Active subject
 A.K.A. Creditor (to give) or obligee (to do)
 Has right to demand that the obligation be performed o 2. Passive subject

A.K.A. Debtor or obligor

Has to perform the obligation (reciprocal obligations)

Note: In a sale of a thing, both parties are debtors and creditors of each other, with correlative obligations (as to the thing; and as to the money) o 3. Object o 4. Vinculum juris

For both the active and passive subject, what is required? o They must be determined or determinable.

What are the types of determined/determinable subjects? o 1. Obligations where subjects are completely and absolutely determined at the birth of the obligation

Most common type o 2. One of the parties is determined, but one is determinable with a previously-established criterion
 Ex. Negotiable instrument: “I promise to pay X or order the amount of P5000, on November
15, 2011.”
One of the parties (i.e., me) is determined. The other is determinable, because X can negotiate it. The instrument lays down the criterion. o 3. Subject/s is/are determined in accordance with their relation to a thing. (Real contracts)
 The subject/s may change at the thing passes from one person to another.

Ex. X borrowed 3M from Y, and placed his house and lot as security. There is a K of loan and a K of mortgage, which is registered. X sold his house and lot to Z, who registered the property in her name. The

mortgage in favor of Y is still annotated.
X doesn’t pay by the due date. Y sought to foreclose the mortgage, and Z cannot deny the mortgage, because
Z is the mortgagor now.

What is the object of the obligation?
o It’s the prestation. It consists of conduct or an activity to be performed by the debtor or obligor. o It’s not the physical thing to be delivered in an obligation to give. That is merely the object of the prestation. o Ex. Y has to deliver a car to X on Feb 15, 2011. The object of the obligation of sale is the act of delivering to X the ownership the car (tradition). The car is the object of the prestation. o This distinction is, not, however always observed even by the
NCC. o What are the requisites for the prestation?

1. Licit

Cannot enter into contract of sale for shabu , because the object of the prestation is illicit.
 2. Possible

Cannot deliver Mount Apo

3. Determinate or determinable

Cannot enter into a K with no defined prestation
 4. With pecuniary value

What is the vinculum juris?
o The compulsive element; the obligatory element in an obligation. It makes an obligation an obligation. o This is why an obligation dependent solely on one’s will is void. o Ex. X tells Y, “I will sell my car to you when I feel like it.” Here, there is no obligatory force.

Yu v. Asuncion: Enumerated requisites of an obligation. o 1. Vinculum juris, “the efficient cause of the obligation” o 2. The object (prestation/conduct to be observed) o 3. Subject persons, the active and passive subject
 Combined #s 1 and 2 into one.

What is the fifth element, according to Castan?
o The causa
. It is the “why” of the contract. o Ex. Why is Y bound to deliver the car to X? Because X will deliver P400000 to Y. Why is X bound to give P400000 to X?
Because Y will deliver the car to X. o What is the causa for a gratuitous contract?
 Liberality. o What is the causa for a quasi-delict?
 Causing an injury to the other.

What is the sixth requisite? o The form. But it does not refer to a specific form, like putting it in writing. It refers to the outward or external manifestation of the obligation.
Sources of obligations

Art 1157
–
Obligations arise from: o 1. Law o 2. Contracts o 3. Quasi-contracts o 4. Crimes o 5. Quasi-delicts

Arts. 1158-62 regulate these five sources

Is this list exclusive?
o Sagrada Orden v. NACOCO: The Japanese during the war seized the Sagrada Orden’s property during the war. Upon liberation, the US seized enemy property, which included
Sagrada’s property. The US entered into a custodianship agreement with NACOCO. Sagrada Orden wanted to collect rentals from NACOCO. Issue: is there an obligation to pay rentals to Sagrada? HELD: No obligation to pay rentals. The court, to arrive at this answer, the court looked at the five sources of obligations
– there was no contract, quasi-delict, no provision of law that requires payment of rental, crime, or quasi-contract. The implication the court forwarded is that this is a closed list.

But is it, really? Or should it, really?
o Many commentators believe it is not exclusive.

What are the other obligations?
o Public offer is a sixth source of obligation, for instance
( auslobung in the German code
– or the unaccepted offer). A

person who by public notice advertises an award in exchange for a particular result is bound to grant this award.

Ex.
Proctor and Gamble announces on TV: “For 30 wrappers of Tide, you get a glass imported from
Switzerland. Offer good until Feb 28, 2011 only!” X saw this advertisement, and on Feb 27, 2011, presents 30 wrappers to the P&G office. Issue: is there an obligation here? Held: yes. There is a public offer here.

Ex. X left his important papers inside a cab. X advertised that whoever returns his papers will get a
P20000 reward. – There is a public offer here.

Some commentators say there are only two sources: law and contract.
Some say: laws and acts of persons (whether voluntary or involuntary).

What is the nature of a contract as a source of obligation? o What the contracting parties establish has the force of law between them, and must be complied with in GF. They are free to enter into any contract, provided the stipulations do not violate Art. 1306. In general, there is no specific form needed.
o How must compliance be done?

1. It must be complied with according to its terms ( ius civile
– pacta sunt servanda
)
 2. And according to good faith ( ius gentium – bona fide ).

What is the general rule for obligations arising from delicts
(crimes)? o If you commit a crime, you are liable both criminally and civilly, except if there is no private offended party.

Distinguish a quasi-delict form a contractual obligation: o Quasi-delict only arises when there is a violation. The breach itself gives rise to the obligation.
o In contractual obligations, the obligation precedes breach and is not dependent on one in order to exist.

Are quasi-delicts and contracts mutually exclusive? o No.
o They can co-exist separately.
 Ex. a bus and car collided, and a bus passenger suffered injuries. The car’s driver was a minor and incompetent driver. The passenger sued them all.
The liability of the owner of the bus and bus driver rests on contract. The father’s responsibility for his child’s act is based on quasi-delict. o They can also overlap.
 Ex. A bus driver drives recklessly and the bus hits a tree. A passenger is injured and sues. The bus driver is liable based on quasi-delict or crime (criminal negligence). The bus company is liable based on contract of carriage or quasi-delict (negligence is selection and supervision of driver).

You are driving a car. Your car gets into an accident with a bus.
Who do you sue? What are your options? o 1. Bus driver o 2. Bus company o 3. Sue both
– because they’re joint tortfeasors, and thus solidarily liable

Do you have to prove negligence when you sue under quasidelict? o Yes, you have to prove negligence of the bus driver. It is not presumed.

Do you also have to prove the negligence of the bus company? o Yes, in the selection and supervision of the bus driver. (Culpa in eligiendo, culpa in vigilando) o This is a rebuttable/disputable presumption.
 As opposed to conclusive and quasi-conclusive presumptions

In a situation where damage or injury is caused to a party, and there is a contract between him and the person who caused the damage, there is no question he can sue under contract. But can he also sue under quasi-delict? o There is an old line of SC decisions in this country which says that you cannot sue under quasi-delict if there is a contract.
There is some basis for this, because Art. 2176 says that the act or omission must occur “when there is no pre-existing contractual relation between the parties.” o There is, however, the theory of concentric circles (the smaller circle of contract is always within the bigger circle of quasidelict). So if you sue under quasi-delict, you are disregarding the contract between the parties. This is valid.

o You can sue under quasi-delict if it is the tort breaches the contract. If an act that constitutes breach of contract would in itself constitute the source of a quasi-delictual liability had there been no contract, then there is breach of contract through tort. o So you can choose to sue under quasi-delict or contract.

Theory of vicarious liability: o If you sue under quasi-delict and you choose to sue the company and not the employee, you are really suing under Art.
2180. o This is actually a wrong term because vicarious means you are answering for the liability of someone else. o But the theory under 2180 is that the company/employer itself is negligent as well.
Nature and effect of obligations

What are the kinds of prestations?
o 1. To give

To give a determinate thing
 To give a generic thing o 2. To do o 3. To not do

What is the primary obligation in giving a determinate thing? The accessory obligations?
o Primary obligations
– give what must be given o Accessory obligations:
 1. After constitution of obligation and before delivery: take care of the thing with diligence of GFF

Except when law or stipulation requires another standard

If the thing is damaged, debtor is liable for damages
 2. Account and deliver to creditor the fruits of the thing from the time of obligation to deliver

What is the nature of the right of the creditor?
o Before delivery, merely personal o Upon delivery, real o A sold B a mango orchard to be delivered Jan 1. A did not deliver on Jan 1, and instead sold fruits to C, a buyer in GF. B sued for specific performance and won.
Can B recover the fruits?
 As against A, yes.

But as against C, no because B’s right is merely personal, not real. He can sue A for the fruits’ value.
 3. To deliver accessories

What are the creditor’s remedies for an obligation to give a determinate thing? o 1. Specific performance o 2. Equivalent performance
– damages

Either exclusively or in addition to specific performance

Rules on improvement, deterioration, and loss o When do these rules apply
– requisites?

1. Obligation has suspensive condition (1189), resolutory condition (1190), or a term (1194)

2. Obligor is obligated to deliver a determinate thing
 3. There is improvement, loss, or deterioration before the fulfillment of the condition or arrival of the period
 4. The condition is fulfilled or period arrives o What are the rules on loss?

Without fault of debtor:

Extinguish obligation
 With fault of debtor:

Pay damages o What are the rules on deterioration?
 Without fault of debtor:

Creditor must accept the thing (bear loss)

With fault of debtor, either:

1. Resolution and damages

2. Fulfill obligation and damages o What are the rules on improvement?

Improved by time or nature:


Creditor benefits
 Improved by debtor’s expense:

Same rights as a usufructuary o ( 579 ) he can remove improvements if no damage is caused to the property o ( 580 ) he may set-off the improvements he made against any damage to the same
 What are the creditors’ remedies if the obligation is to give a generic thing?
o 1. Specific performance o 2. Substitute performance
 Done by someone else at the debtor’s expense o 3. Equivalent performance

Damages, by itself
 Damages in addition to #1 and #2
 What are the creditors’ remedies if the obligation is to do?
o Something only the obligor can do (personal):

Equivalent performance (damages) o Anyone else can do it:

1. Substitute performance
 2. Equivalent performance
 What are the creditor’s remedies if the obligation is not to do? o 1. Substitute performance o 2. Equivalent performance

Exclusive or in addition
To give
Determinate thing
Determinable
SPECIFIC
PERFORMANCE
Yes
Yes thing
To do
Very personal No
Not very personal
Not to do
No
No
EQUIVALENT
PERFORMANCE
Yes
Yes
Yes
Yes
Yes
SUBSTITUTE
PERFORMANCE
No
Yes
No
Yes
Yes
Irregularity in performance

What are the types of irregularity of performance? o I. Culpable (1170)
 1. Malice (fraud)
 2. Negligence
 3. Delay o II. Non-culpable

Fortuitous event/force majeure

MALICE (FRAUD): o Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future fraud is void. o What about waiver of malice already committed?

This can be waived. o What is another word for “fraud”?

Malice (This means it is intentional or deliberate evasion of the normal fulfillment of an obligation.) o Differentiate this from the other kind of fraud mentioned in
Obligations and Contracts (1338).
 Deceit. This refers to vitiation of consent by a party
(through insidious words or machinations without which the other party would not be induced to enter into the contract). o Is there a difference in effect?
 Yes.
 Deceit makes the obligation annullable, because it preceded the obligation.

Malice only succeeds the obligation. The creditor may insist on performance (specific or substitute), resolution, and in either case, damages. o What are the effects of malice?
 1. Creditor may insist on specific/substitute performance, whichever applies
 2. Resolution [for reciprocal obligations]

3. Damages, either way

NEGLIGENCE:

o Always refers to the omission of something that should be there

required degree of diligence. This differs depending on attendant circumstances. o What are the kinds of negligence?
 Simple
 Gross/wanton – if it is so reckless, that it practically amounts to malice, and is treated as such o What is the default standard of diligence required?
 The fictional standard of a “good father of a family.”
(In common law, they refer to it as “diligence of a prudent businessman.”) o Is waiver of future negligence allowed?
 Accepted view: waiver of future gross negligence is not allowed, because it’s tantamount to malice
 Waiver of future simple negligence is allowed o Effects of negligence?

1. Creditor may insist on specific/substitute performance, whichever applies
 2. Resolution [for reciprocal obligations]
 3. Damages, either way

DELAY/DEFAULT (MORA) o What are the three kinds of mora?

1. Solvendi

Delay in performance

This applies here, in this provision
 2. Accipiendi

Delay of creditor in accepting performance.

This applies in payment/performance
(particularly, consignation).
 3. Compensatio morae

Reciprocal delay. (Taken alongside mora solvendi) o What is mora solvendi?

Non-performance with respect to time, whereas malice and negligence are with respect to quality. o What are the requisites?
 1. Obligation is liquidated and demandable
 2. Debtor delays in the performance due to dolo or culpa (thus, w/o justifiable reason)

3. The creditor requires performance, judicially or extra-judicially (demand)

General rule: demand is required prior to mora solvendi applying (this requirement is called mora solvendi ex persona.
If demand is not required mora solvendi ex re ).

When is demand not required? o 1. The obligation/law expressly so declares.
 It is not enough that the contract states specific dates. Mere setting of date is not enough. Need to demand still.
o 2. Time is of the essence.

Look at intent of the parties and attendant circumstances.
o 3. Demand is useless o Can you have mora solvendi in negative obligations?

You cannot have mora in negative obligations o What are the effects of mora solvendi?

Obligations to deliver a determinate thing: place the risk on the debtor
 Liable for damages
 Basic remedy: performance or resolution

The pr ovision also mentions “contravene the tenor of the obligation.” What is this?
o Just as all-around term that encapsulates all the culpable violations. But actually nothing will get through the three above.

What is compensatio morae?
o If both sides are in delay, these cancel out. o But when one party complies or is ready to comply with his obligation, delay by the other begins

FORCE MAJEURE o What are the requisites of casa fortuito?
 1. The cause was unforeseen and unexpected and was independent of human will


2. Impossible to foresee, or if foreseen, impossible to avoid

3. Impossible for the debtor to fulfill his obligation in the normal manner
 4. Obligor must be free from participation in the aggravation of the injury to the creditor o If any of the four is not present, there is no fortuitous event o If there is a fortuitous event, what is the effect?

As a general rule, the debtor is free from liability
 What are the exceptions?

1. If the parties agree

2. If the law so declares (ex. in delay)

3. Nature of the obligation requires assumption of risk o Ex. insurance
Other provisions

What are the presumptions re: interest and debt?
o 1. If principal has been received without reservation re: interest
– presume the interest has been paid o 2. If later installment has been received without reservation re: prior installments
– presume the prior installments have been paid o N.B.
these are rebuttable presumptions

What are the fourt types by which creditors can satisfy their claims? o 1. Levy and execution on debtor’s non-exempt property o 2. Accion subrogatoria

Creditor sues on behalf of his debtor, against his debtor’s debtor

Requisites?

1. Creditor has credit against the debtor

2. Credit is due and demandable

3. Failure of debtor to collect his own credit from a third person (through malice or negligence)

4. Insufficiency of assets of debtor to satisfy creditor’s credit

5. Right is not intuit personae o 3. Accion pauliana
 Right of creditors to rescind alienations by their debtors to defraud them

Requisites?

1. There is credit in favor of plaintiff

2. Debtor performed an act subsequent to the contract giving advantage to other persons
 3. Creditor is prejudiced by the debtor’s act

4. Creditor has no other legal remedy
 5. Debtor’s acts are fraudulent o 4. Accion directa

Direct action by the creditor against his debtor’s debtor – the creditor acts in his own name
 Exception to relativity of contracts

Give examples:

1. Lessor against sublessee (skip lessee)

2. Laborer against principal (skip independent contractor)

3. Principal against subagent (skip agent)

4. Vendor-a-retro against transferee of vendee (skip vendee)
Types of obligations

Classes of obligations? o Pure o Conditional
 Happening gives birth/death to the obligation o With a term

Happening makes it demandable

What is a potestative condition? o Something that depends solely on one of the parties

What is casual? o Depends solely on chance or a third party’s will.

What condition will make obligation void? o Suspensive, potestative, and is dependent on the sole will of the debtor  the obligation is void.

o Ex. “I will sell you my car when I feel like it.” o Because there is no juridical tie here.
 What if it’s a suspensive, potestative condition dependent on the sole will of the creditor? o Ex. “I will sell you my car when you feel like it.” o It’s VALID. In fact, it becomes pure.

Obligation that depends on an impossible or illegal suspensive condition o What is contemplated by this provision, original or supervening impossibility?
 ORIGINAL impossibility.
 The supervening impossibility does not annul the obligation; it just extinguishes it.
o A positive obligation to do an impossible thing:

Both the condition and obligation are void.
o Negative obligation not to do an impossible thing:

Condition is disregarded. The obligation is valid.
 Ex. X sells Y his house and lot on condition that Y does not transfer the house and lot to California.
o Negative condition not to do an illegal thing:
 Both the condition and obligation are valid.

Ex. X sells Y his house and lot on condition that Y does not turn the house into a shabu den.

Obligations with supensive conditions: o That X will happen by a certain time –
 Extinguished when time passes
 Or indubitable that it will happen o That X will not happen by a certain time
–

Extinguished when time passes

Or indubitable that it will not happen

What are the requisites of constructive compliance/fulfillment? o 1. Intent of the obligor to prevent fulfillment of the obligation o 2. Actual prevention o What is the effect?

The condition is deemed complied with.
o To which does constructive compliance apply?

Only to potestative conditions or mixed conditions with potestative conditions.

Ex. X sells Y a lot, if Y builds a road from the lot to the highway. The only road Y can build must go through
X’s property, but X refuses to allow.

X sells Y a piece of land in year 2000, subject to the condition that
Y pass the Bar examinations. Y passes the Bar in 2005. What is the effect? o The condition is deemed to have arisen in year 2000.
o But not fruits.

X sold the land to Z in 2001, when the condition had not yet happened.
Y sold the land to W in 2002. Y’s sale wins out because the sale of X to Y retroacted to
2000. o What is the right of the creditor in the mean time?

The creditor can take any action that protects his rights.

Ex. He can put an adverse annotation on the title.

When can the debtor recover due to payment by mistake? o 1. Performance by mistake o 2. Action for recovery is brought before condition happened or it’s apparent the condition will not happen

What are the rules re: deterioration and improvement and loss before the happening of the suspensive condition? o 1. Fortuitous loss – obligation is extinguished o 2. Culpable loss – debtor liable for damages o 3. Fortuitous deterioration – borne by creditor o 4. Culpable deterioration – creditor chooses:

A) rescission with damages

B) fulfillment with damages o 5. Fortuitous improvement
– benefit to the creditor o 6. Intentional improvement – governed by Art. 579 of the usufruct
 Can take it out if it does not lead to damage
 If it would cause damage, no compensation

Rule on fruits: o Those produced from the constitution of the obligation to the happening of the condition: not covered by the rule on retroactivity

Resolution in 1191
– what is the effect? o Mutual restitution. They are returned to status quo ante.


1191
– o Compare rescission and resolution:
 Resolution – primary remedy
 Rescission – subsidiary

There must be no other remedy

It has to be a last recourse o Compare the basis:

Resolution
– non-fulfillment of obligation

Rescission
– based on economic prejudice (lesion) o Resolution can be extrajudicial or judicial. Either is valid, but extrajudicial resolution is always subject to court checks and balance, so it’s at the risk of the party who resolution.
o Is an express provision allowing extra-judicial resolution mandatory?

No. Parties can resolve even without an express provision allowing so.

Outline of 1191 (resolution): o 1. Only applies to reciprocal obligations

Elements:

1. 2 prestations arising from same source

2. Each prestation designed to be the counterpart or equivalent of the other
 Ex. Contract of sale o 2. There is a tacit resolutory condition: breach o 3. The party seeking to rescind must be ready to comply with the obligation, otherwise he is in BF o 4. The injured party can elect resolution even without court action o 5. Effect: mutual restitution –

What if the other party does not want to return what you have given him, after resolution?

Go to the court to recover. The action is not for resolution, but recovery, because resolution does not need court action.

Obligations with a term/period
– what is the difference from a condition?
o Term is certain, condition is uncertain. They are alike in the sense that they’re both future. o Only demandable when the day arrives.

In case of loss, deterioration, or improvement before the day certain, what do you follow? o Follow the same rules as in suspensive conditions.

Anything paid before the day arrives o If made consciously, what is the implication?
 Nothing can be recovered, because the term was effectively waived.
o What if it was made out of mistake?

Old code: only fruits and interests can be recovered
 Now: The thing and the fruits and interests can be recovered.

Who is entitled to the fruits received from the constitution of the obligation until the arrival of the term? o One view: fruits belong to the debtor o Other view: fruits belong to the creditor, even if they should not be delivered ‘til the term arrives o RFB’s view:
The debtor keeps the fruits in the interim.

What are the instances when the fruits cannot be recovered notwithstanding premature delivery? o 1. When the obligation is reciprocal and there is pre-payment on both sides (so both things are fruit producing) o 2. The obligation is a loan where the debtor is bound to pay interest o 3. When the period is exclusively for the benefit of the creditor o 4. When the debtor, aware that the period has not yet arrived, pays anyway

When is a term for the benefit of the debtor? For the creditor? o Presumption: a term is beneficial for both o What is the consequence of this?
 The creditor cannot demand, and the debtor cannot insist on pre-payment o If it is for the benefit of the debtor:
 “I promise to pay you on or before March 2011” – this is for the benefit of the debtor.

This is an example of a term benefit for the debtor

When can the court fix the duration of the period? o 1. If it does not fix a period but a term is assumed to have been intended o 2. If the period entirely depends upon the will of the debtor

o Two requisites for the application of this article?

1. Parties did not fix the period but from the nature of the circumstances, it can be inferred that the period was intended by them

OR there was a period, but it was made dependent on the will of the debtor

2. The court must decide what period the parties probably intended. The court cannot decide for itself, it must infer the parties’ intent o Action for 1197 can only be for the fixing of the period. It cannot be for fixing of the period and specific performance at the same time, because the period is presumed not to have arrived yet. o Exception : if a separate action for performance would be only dilatory (i.e. whatever the period was, it already has passed)

When can the court fix the period for an obligation? o 1. 1197, par. 1 (above)

Exceptions:

A. 1682, 1687
– these are leases payable monthly or yearly; these terminate at the end of the month/year (the K fixed the period)

B. Pacto de retro under 1606
– the law fixes the period of redemption for four years

C. Contracts of service for indefinite period
(involuntary servitude) o 2. 1197, par. 2 (above) o 3. 1191, par. 3

This is resolution
– instead of decreeing the resolution, the court decides to fix a period instead o 4. 1687
 Contracts of lease falling under the 2 nd -4 th sentences o 5. 1180

If the debtor binds himself to pay when his means allow him to do so

Deemed to be one with a term

Supposing the court fixes a period, can the parties agree to extend it further?
o Yes, it is contractual freedom. It is a novation – there has to be an agreement between the parties, however.

When does the debtor lose right to avail of the period? – these obligations become pure o 1. After the obligation have been contracted, he becomes insolvent, unless he gives security/guarantee for the debt
 This is not limited to judicial insolvency o 2. He does not furnish to the creditor the guarantees/securities promised o 3. By his own acts, he impaired said guarantees/securities, and by fortuitous event, they are lost. UNLESS he replaces them with securities just as good. o 4. He violates undertaking in consideration of which the creditor agreed to a period. o 5. He attempts to abscond. o 6. Article 2109
– Creditor is deceived as to the substance or quality of the thing

Classification according to number of prestations.
o Conjunctions
– 2 or more prestations, all of which must be performed. No special rules apply here. o Alternative
– 1199-1205 o Facultative
– 1206

What is an alternative obligation? o Two or more obligations are agreed upon but one, some, or not all have to be performed. o Who has the choice?
 Depending on whom the parties name as having to make that choice.

If there is no choice, the debtor chooses.
o How must a choice be made?
 Any form – writing, oral, or implied/passive o Why must a choice be communicated?
 If it depends on the creditor, duh, because the debtor is not a mind reader.

Ong: But even if it depends on the debtor, it gives the creditor the chance to consent to or impugn the choice. RFB does not agree with this, because the creditor has no right to impugn because the debtor is acting within his right.

What is the real reason?


1. To give the creditor the chance to prepare for acceptance.

2. Because once the choice is communicated, it is irrevocable – and the obligation ceases to be alternative

Implications when debtor has right of choice? o 1. Limitation of choice
 What if there is one choice left due to the fortuitous event?

The debtor has no choice but to perform it

What if is limitation of choice left due to the creditor’s acts?

Right to resolution, with damages.
o 2. Own fault
 If all of the things are lost due to the debtor’s fault?

Creditor entitled to damages
 If some of the things are lost due to the debtor’s fault?

Can perform what remains o 3. All lost

If all are lost due to fortuitous event?

Obligation is extinguished

If all but one are lost due to fortuitous event, and the last one lost due to debtor’s fault?

Creditor can demand damages.
 If all but one are lost due to debtor’s fault, and the last one lost due to fortuitous event?

Obligation is extinguished

Implications when creditor has right of choice? o 1. Some lost
 If some lost due to fortuitous event?

Perform what remains

If some are lost due to debtor’s fault?

Creditor can ask for performance of any of them or value of one of them + damages
 If some are lost due to creditor ’s fault?

Creditor can choose from remainder o 2. All lost
 If all are lost due to debtor’s fault?

Creditor can choose value of any of them + damages

If all lost due to fortuitous event?

Obligation extinguished
 If all lost due to creditor’s fault?

Obligation extinguished

What is a facultative obligation? o There is only one obligation agreed upon, but the debtor has the right to substitution. o What is the difference from alternative obligation?

If one or some of the obligations are impossible or illegal, then there can still be performance of the others.
 In facultative, if the principal obligation is impossible or illegal, then the obligation is extinguished o Who has the right to substitution?

Always the debtor. o What if through the debtor’s fault, the principal prestation is lost? Can you compel him to perform the substitute obligation?
 No. You cannot compel substitution – it always belongs to the debtor as a choice. But you can ask for damages. o What if the substitu te prestation is lost due to the debtor’s fault, and then before the due date, the main prestation is lost due to fortuitous event?
 You cannot, unless there is abuse of right. Because even if the substitute prestation has not been lost, loss of the main prostation due to fortuitous event will extinguish the obligation anyway.

What is a joint obligation? (or mancomunada or pro rata) o The debtors are liable only for a proportionate part of the debt o Or the creditors are entitled only for a proportionate part of the debt

What is a solitary obligation? (or joint and several, in solidum, or solidaria)

o Debtors can be held liable for the entire part of the debt o Or the creditors can demand the entire part of the debt o What does “individually and jointly” mean?

Solidary o Where there are several debtors and the obligation mentions a singular (“I” or “notice to me
”) and then signed by several people, what does this mean?

Solidary

What is the essential nature of jointness? o Active joint (many creditors, one debtor)
– You have as many obligations as creditors multiplied by debtors o Passive joint (many debtors, one creditor) o Mixed joint (many debtors, many creditors)

What is the essential nature of solidarity? o Active
– There is mutual agency, up to a certain point (because if there are multiple creditors, and one collects, he must deliver what is not his. So it’s not complete agency because he keeps some for himself) o Passive – There is mutual guarantee among the multiple debtors, as to the single creditor o Mixed solidary
–

What is the presumption? o In favor of joint obligations.

When is there soldarity? o 1. When the law so states (ex. joint tortfeasors) o 2. When parties stipulate o 3. When the nature of the obligation demands solidarity

What is the effect of demand by any of the solidary creditors? o The debtor may pay any of the creditors, but if any demand, judicial or extrajudicial, is made on him, he must pay only the one demanding payment o What is the problem here?

If one of the creditors demands, but fails to follow up on it, the rest cannot demand anymore. The debtor will get off scot-free. o What if the debtor paid the wrong creditor (non-demanding creditor)? Can the demanding creditor still demand?
 He can only recover the amount the whole obligation minus the share of the creditor whom he paid . In effect, the debtor pays a little less than twice the amount o Commentary: if the debtor paid the share of the wrong creditor, this is fine. The demanding creditor can still recover the whole amount minus the share of the creditor whom he had paid.
o What if there are multiple creditors (A B C) and debtors (X
Y Z), and A demanded Z. Can B demand X?
 Yes, and X can pay B. A’s demand on Z is moot and academic.

What is the conflict between 1212 and 1215? o According to 1212, in the case of active solidarity, the solidary creditors can do what is beneficial but not prejudicial o Whereas in 1215, the creditor can perform acts like remission, novation, compensation, or confusion and this extinguishes the debt o Ex. (A B and C) are soldiary creditors, X is the debtor. Can
B remit X’s debt?
 1212 disallows this because B’s remission is prejudicial to A and C.
 1215 seems to allow it.
o How do you reconcile these?

The remission was a true remission. The debt is extinguished. But B will be liable for A and C for their shares.
 A remits one of the solidary debtor’s shares. o Can A go against one of the other debtors for the remaining amount?

Yes.
o Can A go against the debtor whose share he remitted for the remaining amount?
 Yes, because that debtor can recover form the rest anyway.
o One of the other solidary debtors becomes insolvent. Will the debtor whose share was remitted share in covering for the insolvent debtor’s share?

Yes.
The remission only extended to that debtor’s original shares, and not to that insolvent debtor’s shares which has to be covered for now.

What defenses are available to a solidary co-debtor?

o 1. From nature of obligation o 2. Personal to him o 3. Personal to a co-debtor

What is the effect of each of these defenses? o Nature of the obligation – total defense (ex. the obligation is void because the prestation is illegal) o Person to him
– partial (ex. there is a special term or condition as to him) o Person as to a co-debtor
– partial (ex. when the co-debtor entered into the obligation, he was insane)

What is a divisible obligation? o One susceptible of partial performance o It does not follow that because the object of the prestation is divisible that the obligation is also divisible

What is the general rule? o Obligations are indivisible, as a general rule because the law says so

When are obligations divisible? o 1. Parties provide so o 2. Nature of the obligation necessarily entails performance in parts (Ex. 1225, par. 2
– first clause) o 3. The law provides otherwise
 See these in “payment or performance” under the topic of indivisibility of payment

Obligations with a penal clause: o This is especially common in construction projects o Sometimes there is an incentive too o What is the nature of the punishment?
 Civil punishment. Usually a penalty or a fine. o Purposes?
 1. To provide for liquidated damages, saving him the trouble of having to prove damages

2. To strengthen the coercive force of the obligation o What is the safeguard?

The courts can reduce it if unconscionable o Characteristics?
 1. Subsidiary

Only upon non-performance can the penalty be demanded, nothing else

Debtor cannot save himself from performing the obligation by paying the clause

Exception: cumulative, when both the principal obligation and the penalty can be demanded

2. Exclusive

It takes the place of liquidated damages.

When are the cases when both the penalty and actual damages can be demanded?
o 1. Express stipulation o 2. Debtor refuses to pay the penalty o 3. Debtor is guilty of fraud in the fulfillment of the obligation (fraud as malice) o Pamintuan: There was an obligation with a penalty clause.
It called for liquidated damages or penalty in the form of
100K. There was fraud in the fulfillment of the obligation.
The aggrieved party was able to prove actual damages in the amount of 190K. HELD: Since the amount of actual damages is bigger (190K), it absorbs the 100K. So if greater, it absorbs the penalty. BUT this is wrong. o Country Bankers: interpreted the rule corrected. The aggrieved party can collect BOTH, without absorption.
Extinguishment of obligations

What are enumerated? o 1. Payment o 2. Loss o 3. Condonation/remission o 4. Confusion/merger o 5. Compensation/set-off o 6. Novation

Is this an exclusive enumeration?
o It’s not.

What else are there?

o 1. Death, for certain obligations (purely personal) o 2. Renunciation by the creditor o 3. Compromise o 4. Arrival of resolutory term o 5. Mutual desistance/dissent
 Ex. Landlord and lessee agree to cut short the lease o 6. Unilateral withdrawal

Ex. partnership o 7. Change of civil status o 8. Rebus sic stantibus o 9. [spaced out] o 10. Judicial insolvency
PAYMENT

Payment or performance: (1232-1251) o This is the “normal” way of extinguishing an obligation o Distinguish payment from performance.

Payment is the proper term for obligations to give
 Performance is the proper term for obligations to do o Outline this provision:
 I. As to prestation

Identity

Integrity

Indivisibility
 II. As to parties

Payer

Payee

III. As to time/place o Special forms of payment:
 A. Dacion en pago
 B. Imputacion
 C. Cession
 D. Consignation

Requisites of payment? o For the prestation:
 1. Identity
 2. Integrity
 3. Indivisibility

What does identity mean? o The very thing itself must be done or delivered o If it’s a specific thing?
 Cannot compel the creditor to receive the same thing, even if it’s the same value

Cathay Pacific: Business class has been fully booked, so X was being upgraded to first class, but X refused. Cathay bumped them off. X sued for damages. HELD: Won, because you can demand the very thing to be done or delivered
– even if the alternative was superior.
o If it’s a generic obligation?
 Cannot demand what is superior and cannot be given what is inferior.

What is the special rule on money debts? o Made in the currency stipulated o If not possible, whatever is legal tender in the Philippines o There was a time when you cannot stipulate currency other than peso, but now you can.

What about payment in negotiable paper? o General rule: payment of money debt must be in legal tender o Seneris: Manager’s check  same as legal tender
 Corrected in subsequent cases which said that manager’s, cashier’s, or certified check is not legal tender and can be rejected by the creditor o BUT the creditor can accept, and if he does, this payment is only provisional.
o X issued a check to Y or order. Y endorsed it to Z. Z lets it go stale and he goes to the depositary bank and gets refused.
This is the case where due to the creditor’s fault, there was prejudice.
 Namarco: Impairment has to be by someone else, because if it was Y who impaired, X can just issue again.

Rule on inflation or deflation?
o It must be extraordinary
– there must be a declaration from the
Bangko Sentral.

What are the exceptions to the requirement of identity?
o 1. Dacion en pago

o 2. Novation

What does integrity mean?
o One must deliver the whole prestation o Exceptions to integrity?
 1. Substantial performance in good faith
 2. Waiver by the debtor/obligee

3. Application of payments/ imputacion (several debts are equally onerous)

What does indivisibility mean?
o Performance must be in one act o Exceptions to indivisibility?
 1. Waiver/agreement between the parties
 2. Prestations that necessarily entail partial performance

3. Cases when the law itself provides for divisibility:

A. Debt is liquidated in part and unliquidated in part (1248)

B. Joint divisible obligation (you have as many obligations as creditors divided by debtors)

C. Solidary obligation where the debtors are bound under different terms and conditions

D. Compensation, where there is a balance left

E. Work is to be delivered partially

F. Where there are several guarantors that demand division (2065)

G. Impossibility or difficulty of single performance o This is an equity measure

The payor (1236-8) – o Who can the payor be (and the payee cannot refuse)?
 The debtor/obligor himself
 Debtor’s heir or assignee
 Debtor’s agent (provided there is proof of agency)
 Anyone interested in the fulfillment of the obligation
(ex. guarantor) o Who can the payor be with the pay ee’s consent?

Anyone. o What is effect of payment by a third person, if accepted?
 If it is done with the debtor’s consent, then there is subrogation. The one who pays becomes the creditor and he can go after the debtor.

Exception: if the third person intended it as a donation.
 What if it is without the debtor’s consent?

Payment, but only to the extent of the benefit.

Ex. X has a debt to Y for P70K. Y reduced the debt to P50K. Z did not know about this, so Z paid Y P70K on X’s behalf.
How much can Z demand from X?
o Only P50K. o [Beyond topic: Z can demand as the P20K from Y as solution indebiti]

Who can you pay?

1. Creditor/obligee

2. His successor or transferee

3. Agent

4. Third person, as long as: o It redounded to the creditor’s benefit, and the payment is good only to the extent of the benefit o When is the benefit deemed to be total?
 [Check the law]

5. Anyone in possession of the credit o Ex. NIL
 What if the debt has been garnished?

The payment is no good, provided that the notice of garnishment has been served on the payee. This is because the funds are held in escrow on behalf of another person.

When is time/place of payment?
o Time
– when it is due


Generally, when there is judicial or extra-judicial demand
 Except – the three exceptions on mora solvendi ex re o Place
–
 Primary rule: stipulated place

Secondary rule: place where the thing was located at the time of constitution of obligation (only if the obligation is to deliver a determinate thing)
 Tertiary rule: (for instance, if it is a generic thing, or an obligation to do)
– debtor’s domicile

1. Dacion en pago (dation in payment) o Filinvest: The delivery and transmission of the ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of an obligation.
o Go: A special form of payment by virtue of which the debtor offers another thing to the creditor who accepts it as the equivalent of payment for an outstanding debt.
o Note: There is no requirement that it must be to satisfy a money debt. It can be for some other obligation.
o What is the legal effect, as stated before?
 The debtor becomes the seller, the creditor becomes the buyer, and the debt becomes the purchase price

Since it is governed by the law of sales, there are implications: warranty against eviction, etc.
 This has been criticized precisely because of this. o What is the other point of view?
 Dacion en pago is a novation.
 This has also been criticized because in a novation, the original obligation is extinguished and a new one takes its place. Here, there is no new obligation that takes the place of the old one.
o So what is it, really (Castan)?
 It’s a special form of payment.
 Because it departs from the rule on identity o To what extent is the obligation extinguished?

To the extent of the value of the thing given

Unless the parties agree on total extinguishment
– generally the parties do o What is the essential requirement?

Both parties must consent o What are the requisites of dacion en pago ?

1. Performance of a prestation in lieu of payment

2. Some difference between the prestation due and that which is given
 3. Agreement between the debtor and creditor that the debt is extinguished by the performance of the substitute prestation

2. Imputacion (application of payment) o What is it?
 Designation of debt which is being paid by the debtor who has several debts of the same kind to the creditor who is paid o Give an example.

X owes Y four debts: 10k, 20k, 30k, 40k. They are all due. X remits 100k to Y. No need to apply the rules on imputacion.
 X remits 90k to Y. In this case, this is less than what he owes in total. How is the payment applied?
o What are needed?
 1. Debtor

2. Creditor

3. Several debts which are due
 4. Remittance of a payment which is less than the total o How do you apply the amount paid to the several debts?
 Primary rule – apply according to the agreement of the parties (1)

Next
– the debtor may apply if there is no agreement, subject to rules on indivisibility of performance (2)
 What if the debtor does not apply?

The creditor may apply (3)

What if neither the debtor nor creditor applies?

Apply to the most onerous first. (4)

Ex. interest-bearing debt > non-interest bearing debt

Ex. secure debt > non-secure debt

Ex. debt with penal clause > without one

What if there are equally onerous?


Apply proportionally to all (5) o What makes imputacion a special form of payment?
 It departs from the rule on indivisibility and integrity

3. Payment by cession o When does it apply?
 When there is one debtor and many creditors.
o What happens?

The debtor turns over all his assets to the creditors, allows them to sell the assets, and then the creditors divide the proceeds proportionally o Does cession require creditor’s acceptance?
 Yes.
o Does ownership over the thing pass to the creditors?

No, they just receive authority to sell.

As opposed to dacion en pago, where ownership transfers.
o What is the extent of extinguishment of the debts?
 Only to the extent of the proceeds.
 Unless there is an agreement that the entire debt is extinguished.
o Why is it a special form of payment?

Departs from integrity and indivisibility o Does this contemplate voluntary or legal cession?
 Voluntary. It is extra-judicial.
 It is legal if the debtor goes to court and applies for public auction and receives an acquittal (under
Insolvency Law)

4. Consignation o N.B. “Tender of payment on consignation” is not the correct term o What is this?
 Act of depositing the thing due with the court or judicial authorities whenever the creditor cannot accept or refuses to accept payment

It generally presupposes or requires prior tender of payment o Requisites?
 1. There must be a debt due
 2. Consignation was made due to some legal cause

There was a prior tender which was unjustly refused

Or there exist circumstances that make a prior tender unnecessary or impossible
 3. First notice of consignation given to interested parties

4. Actual deposit with court

5. Second notice given after consignation o What is a tender?
 Manifestation made by debtor of his desire/willingness and ability to make immediate payment o When is prior of tender dispensed with?
 1. Creditor is absent or unknown or does not appear in place of payment

2. Creditor incapacitated during time of payment

3. When without just cause, he refuses to give a receipt

Odd: this still presupposes tender of payment
 4. When two or more persons claim the same right to collect

5. Title of the obligation has been lost o Why is consignation a special form of payment?
 Departs from requisite of parties o What if it is a case of mora accipiendi, where the creditor unjustifiably refuses payment?

Go to court and consign it there. (The French and
German Codes just provide that the obligation is extinguished. This is probably better and easier.)
LOSS/IMPOSSIBILITY (fortuitous event)

When is it loss, when is it impossibility? o Loss, if to give o Impossibility, if to do

What happens when loss occurs in an obligation to give a determinate thing (1262)? o The obligation is extinguished

Does it apply to an obligation to give a generic thing? (1263)

o No.
o Genus nunquam perit - the genus never perishes
 Except : if the thing is deemed contraband before delivery, so the genus perished o Ex. X had an obligation to deliver a sack of rice, and the stocks perished. X just has to buy rice.

What about a limited generic thing? o The obligation can be extinguished.
o Ex. X entered into an agreement to sell Y one of his cars. If he lost all of them in a fortuitous event, the obligation perishes.

What about obligations to do? (1266) o Released from the obligation is the prestation becomes impossible.

What do all of these presuppose? o That when the obligation was entered into, the obligation was possible. The loss or impossibility simply supervened.
o If the obligation was initially impossible, there is no obligation to begin with.

In a reciprocal obligation, one of the prestations is lost under fortuitous event. Does it affect the other obligation? (Ex. X promised to sell Y his Innova for P1M. Does Y still have the obligation to give the money?) o One view (Germanic view) – the entire obligation is extinguished
 Res perit domino – the debtor in effect bears the burden o Other view (Romanic view)
– Y still has to pay the money

Res perit creditori
– the creditor in effect bears the burden

Exceptions: o 1504 – sales of goods: just look at the provisions o 1655
– destruction of the thing lease o 1717
– contract for a piece of work, where the contractor furnishes the material

What is another mode of extinguishment hidden in the folds of this provision? o Rebus sic stantibus – When the services become so difficult as to be manifestly beyond the contemplation of the parties, the obligor is excused o Contracts which have stipulations on successive performances
(several prestations) or dependent on the future o Must interpreted in accordance with the situation that existed when the obligation was entered into o Requisites?
 1. The event of change could not have been foreseen at the time of the agreement

2. Makes the performance extremely difficult, but not impossible

What if it makes it impossible? o You can invoke impossibility of performance o You do not need to invoke rebus sic stantibus

3. The event was not due to the act of any of the parties

4. The K of the obligation was a future prestation o To what kind of obligation does it apply?
 Only to do, but not to give
 But in the Philippines, it has evolved into including even obligations to give, see Naga Telephone
 Because it just says “obligations” in general
CONDONATION/REMISSION

What is this? o Act of liberality wherein without receiving any equivalent, the creditor renounces the debt o Extinguishes the debt in whole or in part

Requisites? o 1. Debt existing at the time the remission is made
 No need for the debt to be due, as long as it exists o 2. The remission or the waiver must be gratuitous o 3. Acceptance by the debtor o 4. Capacity between the parties to enter into a contract of donation

What is the form? o If it is express remission, it must follow the rules on donations as to form

o If it is an implied remission, and thus not governed by any form. (Here, the creditor just does not collect)

In case there is a debt evidenced by a private document and then later on, it is voluntarily surrendered by the creditor to the debtor, what is the implication? o The creditor is impliedly remitting the obligation

Because he will lose his proof to collect o It does not apply to a public document because there will be a copy of the document in the notarial archives o What if there is delivery by mistake?
 The creditor can claim this and rebut the presumption
 What is the debtor’s defense in this case?

He can claim that he actually paid the debt o What is the presumption that gives rise to this presumption above?

If the debtor has the instrument in his possession, it is presumed the creditor delivered it to him
MERGER/CONFUSION

What is this? o When the debtor and the creditor in the obligation is the same person

Requisites? o 1. Takes place between the creditor and the principal debtor o 2. The very same obligation is involved

What is the most common cause of merger? o Intestate succession, where you inherit your own debt/credit.
Ex. X owes his brother Y a sum of money. Y dies intestate and
X receives the credit, so there is confusion.

Y has a debt to X. The debt is guaranteed by Z. X assigns the debt to Z. Did remission happen? o No. Z is not the principal debtor, he was just a guarantor.
o The guaranty is extinguished, and Z can go after Y.
COMPENSATION/SET-OFF

What is this? o Concurrent amount of two persons who in their own right are reciprocal debtors and creditors of each other

How similar is this to merger? o There are at least two debts in both, but in merger, it is concentrated in one person. In compensation, in two persons.

What are the kidns of compensation?
o 1. Legal compensation (1279)
–

Automatically when all requisites are present o 2. Facultative compensation
 Can only be claimed by one party, but not the other
( READ 1287-8) o 3. Conventional/contractual compensation
 Parties agree to compensate, even if the requisites are not complete (1282) o 4. Judicial compensation

By means of court order/decree

What is legal compensation? o 1. Parties are mutually debtors and creditors of each other
 as principals
 and in their own right o 2. Both debts consist of sum of money, or fungible goods of the same kind/quality
 Note: it must be “fungible” – the code wrongly says
“consumable” o 3. The two debts are due o 4. They be liquidated and demandable

Liquidated

the amount is determined already o 5. Neither of the debts must be garnished o 6. Must not be prohibited by law

Conventional
– requisites? o 1. Each of the parties … o 2. The parties agree to mutually extinguish the credit

( See 1285) Assignment of credits
– confusing wording in the provision, so here’s the explanation o Y owes a debt to X (credit 1). X owes a debt to Y (credit 2).
In any other case, when both debts fall due, there is automatic compensation. This is not the concern of 1285.

o But now, before legal compensation takes place, X assigns to A credit 1. So for credit 1, A becomes the new creditor. There are three possibilities:

1.
The assignment was with Y’s consent –

A goes against Y when the assigned credit becomes due. Can Y set up against A credit 2 (what X owes Y)? o No, because Y consented to the assignment.

2. The assignment was with
Y’s knowledge, but without his consent –

A goes against Y. Can Y set up against A credit 2? o Yes, as long as credit 2 existed by the time credit 1 was assigned.
Does not cover subsequent debts.
 3. The assignment was without Y’s knowledge –

A goes against Y. Can Y set up against A credit 2? o Yes, as long as it arose before he learned of the assignment

Facultative compensation o 1287 – when legal compensation does not automatically take place

1. Deposit

X deposited 1000kg rice with Y (depositary).
In another unrelated transaction, Y owes X
1000kg rice.
– There is no legal compensation here because one of the contracts is a contract of deposit.

But the depositor can claim in his favor compensation. (Facultative in his favor)
 2. Commodatum
 3. Support o 1288 – one of the debts arises from civil liability from a crime
 The victim of the crime from which the liability arises can invoke this

When do the modes of compensation take place?
o 1. Legal
– when all the requisites concur o 2. Conventional
– upon agreement of the parties o 3. Facultative
– when the creditor entitled to the option communicates his decision o 4. Judicial
– final judgment
NOVATION

When does it arise?
o 1. Changing object or principal conditions o 2. Changing the debtor o 3. Subrogating third person to rights of the creditor

Types?
o 1. Subjective/personal novation
 Change in one or more parties
 Active subjective – change in person of creditor

Passive subjective
– change in person of debtor

Expromission

Delegacion o 2. Objective/real novation
 Change in the object or in the principal conditions o 3. Mixed novation

Requisites of novation? o 1. Previous valid obligation

Includes voidable o 2. Agreement by the parties to the new obligation o 3. Extinguishment of the old obligation
 This is actually a consequence o 4. Validity of new

Two types of novation? o 1. Express o 2. Implied
 The two obligations must be incompatible

What is expromission? o The consent of the creditor and the new debtor are required, but the consent of the old debtor is not required o X owes Y 50000. Z approaches Y and tells him that he will pay the debt. Is this valid?
 Yes.
o Consequence?


The release of the old debtor is absolute, even if the new debtor becomes insolvent.

What is delegacion? (conventional subrogation) o The consent of all three – creditor, original debtor, new debtor
– are all required. The initiative comes from the old debtor.
 Delegante – old debtor

Delegatario
– creditor

Delegado
– new debtor o X owes Y 50000. X approaches Z to ask him to pay for his debt. Y agreed. Is this valid?
 Yes.
o Consequence?

The old debtor is absolved, in general. Exceptions:

1. If the new debtor was already insolvent at the time of the novation AND

2. Such insolvency was known to the old debtor or public knowledge o What about assignment of credit, do you need the consent of all three parties too?
 No. Just the old creditor and the new creditor. The consent of the debtor is not required. He must just be notified.

When the principal obligation is extinguished, are the accessory obligations extinguished too? o As a general rule, yes. (Art. 1296) o So pledge, mortgage, antichresis, guaranty, etc. are extinguished.
o Exception?
 When there is benefit for a third person (stipulations pour autrui) o What is problem, as to subrogation?
 In subrogation, Art. 1303, the guarantors, sureties, mortgagors, etc. continue to be bound.

How to resolve the conflict
– Art. 1303 is the exception to 1296. It only refers to one kind of novation: active subjective novation. (When the change is just from one creditor to another.)
CONTRACTS

Definition of contract? o Meeting of the minds between two or more parties o Can one contract with oneself?
 Yes, an “auto-contract” – one person acting as two parties . (Ex. an agency to borrow money: he can also act as the lender)
 This is why “party” is the proper term.

Characteristics of obligations? o 1. Obligatory force o 2. Mutuality
 Performance cannot be left to the will of one of the parties o 3. Relativity o 4. Autonomy of parties

Elements of contract? o A. Essential
 1. Consent
 2. Subject matter
 3. Cause o B. Natural

Those incorporated by law into the contract automatically

Ex. Warranties in sales (against eviction, of fitness, etc.)

Ex. Right to resolve in reciprocal contracts o C. Accidental

Need to be stipulated by the parties

Ex. Purchase price in sales

Ex. Conditions for performance of the contract

Classification of contracts?
o A. Degree of dependence
 1. Preparatory

One intended to lead into another K (ex. K of agency)

2. Principal

Complete in themselves


3. Accessory

Cannot exist alone (ex. mortgage) o B. According to perfection
 1. Consensual

Most Ks are consensual o Ex. Sales

2. Real

Perfected by consent + delivery of the property o Ex. deposit, pledge, commodatum
 3. Formal

Need form for validity o Ex. donation of property o C. According to purpose [just theoretical]

1. Transfer of ownership
 2. Conveyance of use
 3. Rendition of service o D. According to subject matter

1. Involving things

2. To render service o E. According to the nature of the obligation produced

1. Bilateral
 2. Unilateral

Ex. commodatum o F. According to cause

1. Onerous

2. Gratuitous/lucrative
 Implication?

Can determine degree of diligence required.
For instance a gratuitous deposit requires less diligence o G. According to risk

1. Commutative

Exchange of value, so there is no risk
 2. Aleatory

Contract of risk/chance/hazard o Ex. buying a lotto ticket o H. According to name

1. Nominate

Ex. sales, lease, etc.

2. Innominate
 “Do ut des” – I give, you give
 “Do ut facias” – I give, you do
 “Facio ut des” – I do, you give
 “Facio ut facias” – I do, you do

What is autonomy of will?
o Generally, you can enter into contracts depending on what you want o This principle, however yields to various restrictions:

1. Law

2. Public policy

3. Public order

4. Morals
 5. Good customs

What is the rule on usury?
o It’s now not a crime anymore. o The only limit is that it is not unconscionable o When is it unconscionable?

It changes from decision to decision. Some decisions say that 5.5%/month is invalid, while some say
7%/month is valid

Latest
–
Macalinaw v. BPI: Interest rate of the credit card is 3%/month (36%/annum). HELD: Any interest of 3%/month and above is invalid, and will be reduced to 1%.

What is mutuality of contracts? o The K must bind both contracting parties. The legal tie must be mutual.
o What about contracts with escalation clause (adjustment of interest)?

It is valid as long as it is tied to a factor not entirely dependent on the will of the creditor (purely potestative)

What is relativity of contracts? o Acts between two persons cannot affect, positively or negatively, a third person

o Third persons neither can sue or be sued for the benefits of the contract o What if the contract is transmissible?

If the contract is transmissible, it can pass on to heirs, assignees, or successors-in-interest o When do contracts affect third parties?
 1. Stipulation pour autrui

2. Accion pauliana

3. Accion directa

4. Contracts involving real rights

Ex. mortgages, etc.

What is a stipulation pour autrui
– requisites? o 1. Contracting parties clearly and deliberately conferred a favor/benefit to a third person

Not merely incidental o 2. The stipulation in favor of a third person is a part, not the whole of the entire contract o 3. It must not be compensated by any obligation whatsoever o 4. Neither of the contracting parties must bear the legal representation of the third party o 5. The third party communicated his acceptance to the obligor before the revocation by the original parties

Give examples showing/not showing stipulations pour autrui. o There were squatters living in Krus na Ligas, near UP. For humanitarian considerations, UP entered into a contract with the QC government to develop the area. The contracting parties are QC and UP. The informal settlers were third parties. Later on, there were snags in the arrangements, so the squatters filed a suit under the contract to carry out the project. HELD : it is a stipulation pour autrui
 N.B.
the most important element is the clear and deliberate benefit conferred o There was a sale of two parcels of property which was on a precipice. The sale was eventually rescinded because the land was unsuitable. The commission agents protested, saying that their commissions must be paid nonetheless, suing under the contract. HELD : not a stipulation pour autrui because there was no deliberate benefit intended for the agents.

When can you sue a third party for damages due to tortuous interference? o 1. There is a valid contract o 2. Knowledge by the third party of the existence of that contract o 3. Interference by that third person on the contractual relationship without legal justification

Is it required that third person act malicious?

No. As long as it was deliberate.

For instance, in an old case, the Augustinian fathers thought an old lady was being cheated in a contract so they induced her to break it.

What if one enters into a contract in the name of another without authority or beyond the scope of his authority? o The contract is unenforceable
Consent

What are the elements of consent? o 1. Plurality of subjects o 2. Capacity o 3. Intelligent and free will o 4. Express/tacit manifestation of the will o 5. Conformity of the internal will and its manifestation

What are the requisites of a valid offer? o 1. Definite o 2. Complete o 3. Intentional

What are the requisites of acceptance? o 1. Unequivocal o 2. Unconditional
 If it is qualified, it is a counter-offer

What about an amplified acceptance?

It may or may not be an acceptance. It depends on the circumstances o Is silence acceptance?
 Depends on the circumstances. For instance, X delivers rice to A and B, who own rice stalls. X delivers rice to A every Sunday, and when A is not

there, his employee takes the rice. There is no such prior arrangement with B. If both A’s and B’s employees were silent when X delivered rice to them,
A is deemed to have accepted, and B not.

What is the cognition theory of acceptance? o Offer and acceptance take effect only from the time knowledge is acquired by the other person. If during the intervening time, the party dies or becomes insane, the acceptance (or offer) has no effect.
o X made an offer in Davao on Feb 1, through mail to Y, who received it Feb 5. Y accepted the offer Feb 5 through mail to X. On Feb 8 Y becomes insane. The mail reaches X on
Feb 13. Is the offer accepted?

No, under the cognition theory.
o X made an offer in Davao on Mar 1, through mail to Y, who received in Mar 3. On Mar 4, Y sent his acceptance to X.
On Mar 5, X countermanded the offer. Both the acceptance and countermand are in the mail. Which prevails?
 Whichever reaches the other party first.

Can an offeror withdraw his offer even if he gave the offeree a certain time to accept? o In general, yes.

What is the exception? o When there is an option contract, which is supported by a separate consideration.
o Give an example.

S is offering to sell B a car. B asked for 30 days to think about it and paid S P5000 for this period. This is a distinct contract – an option contract.
 What if S sells the car to someone before the period is done?

S is guilty of contractual breach.
 What if there is no consideration given?

S can withdraw the offer anytime.

Does S still have to communicate the withdrawal? o No. There is no separate option contract that requires him to do so.

Original facts (B gave consideration). Within the
30 day period, B told S that he wanted to buy the car. S refused. What is B’s remedy?

Specific performance.

What if S had already sold the car to X when B communicated his acceptance
– what is B’s remedy? o Recover damages from S.
o He cannot sue for specific performance because X is an innocent purchaser.

Differentiate an option contract from the Right of First Refusal
(RFR): o RFR is the right to have first opportunity to purchase, or the right to meet any other offer.
o An option contract limits the offeror’s power to revoke the offer.
o What is determined in an RFR? What is undetermined?
 The object is determined.
 The terms are not.

Does RFR need separate consideration? o Equatorial v. Mayfair says no. RFB disagrees with this.
o Lintonjua v. CA says that the consideration for the loan or mortgage is already the consideration for the RFR.

Does RFR allow actions for specific performance? o Yes. The actual vendee may be required to sell the property to the holder of the RFR at the price which he bought it for.
o Contrast : not allowed for option contracts.

What if the one with the RFR refuses to exercise his option? o If the one with the RTFR refuses to exercise his option, the seller cannot sell the property to another person on better terms. It has to be equal or more onerous.

Who cannot give consent to a contract? o 1. Minors
 Only the minor can sue to annul the contract.
 What about a minor who actively misrepresents himself as a non-minor? Can the minor still sue to annul the contract?


He still can. If he is too young to enter into a contract, he is also too young to be held in estoppel.
o 2. Insane or demented persons, and illiterate deaf-mutes

N.B. Different from insanity of in testamentary law
 Being a deaf-mute is not enough; you have to be illiterate too.
 What is the exception to the insanity rule?

When he entered into the contract during a lucid interval

What are the situations where there is vitiation of consent?
o 1. Mistake

If the mistake is mutual and it frustrates the real intent of the parties
 To which must the mistake refer to?

1. Substance of the thing which is the object of the contract

2. Conditions which principally moved either or both parties to enter into the contract
 What if mistake is as to identity?

Generally, not a ground to annul a contract.

EXCEPT if the identity or qualifications is the principal cause of the contract o 2. Fraud

Different from fraud in 1170

It must be dolo causante, or one that has a decisive effect on the giving of consent
 Requisites:

1. Employed by one party against the other

2. Induced the other to enter into the contract

3. It must have been serious
 Compare with dolo incidente?

Does not annul the contract because it did not induce the giving of consent

The consequence of incidental fraud is merely damages
 What about dolus bonus?
 This is “tolerable fraud” and does not lead to damages

(Usual exaggerations in trade, when the other party had an opportunity to know the facts) – Art.1340 o 3. Violence
 Requisites of violence?

1. Physical force is irresistible

2. It is the determining factor to give consent o 4. Intimidation

Requisites?

1. Threat is determining factor to give consent

2. Threat is unjust and unlawful o What if the threatened act is lawful, for i nstance, “You, Mr. X from Surigao Institute of Law, got my daughter pregnant. You better marry her, or I will report to the SC that you got her pregnant”?
 This is a lawful threat, so it does not vitiate consent. o When will there be intimidation even if the threatened act is lawful?

When there is no connection between the threatened act and the situation behind it (ex. sell me your house or else I will report the crime I saw you did).

3. Threat is real and serious

4. Threat produces a well-grounded fear that the person making it can and will inflict harm o 5. Undue influence
 What do you consider for undue influence?


Consider both the person invoking influence and one being influenced

Consider: o Confidentiality, family, relations

If the person was mentally weak, ignorant, or financially distressed

It must be influence that deprives one of freedom. So it can’t be lawful or due influence (ex. parental guidance).

What is the effect of violence if perpetrated by a third person (Art.
1336)?
o It still makes it voidable. The contract is still voidable even if employed by a third person who did not take part in the contract. o What about undue influence by a third person?
 By analogy, same rule. o What about fraud by a third person (Art. 1342)?
 Does not vitiate consent

Unless it led to substantial mistake and it is mutual

What are the two kinds of simulation of contract?
o 1. Absolute
 There is no underlying contract, and no intent to be bound

What is the effect?

It is void, because there is no consent o 2. Relative

They intend to be bound, but concealing the real agreement

Ex. making a donation to a son seem like a sale as to not make siblings jealous

What is the effect?

It will be treated in accordance with the rules of the concealed contract
Object

Requisites of object of contract? o 1. It must be within the commerce of man, whether existing or in potency
Causa

What is the causa in onerous reciprocal obligation, like a contract of sale?
o For the seller, the payment of the money to him o For the buyer, the delivery of the thing bought

What about a remuneratory obligation? o The service performed

For donations? o Gratuity or liberality

Distinguish object form causa: o Object is – what is owed?
o Causa – the proximate “why” of the contract.

Requisites?
 Not the ultimate “why,” which is motive o 1. It must exist o 2. It must be real o 3. It must be licit

Is there any instance when failure of the motive will lead the contract to fail? o Yes.
o 1. When the motive is stipulated to be a suspensive condition o 2. The realization of the motive is the cause of the contract and there is an intervening serious mistake of fact
Form o 2. It must be licit o 3. It must be possible

At the time of perfection of the contract

What if it is impossible from the very start?

The contract does not exist because the prestation does not exist

What if it becomes impossible in the middle of the contract?

Extinguishes the obligation o 4. It must be determinate as to its kind and determinable as to quantity


General rule: no specific form required

When is it required?
o Donation of property o Sale of large cattle o Antichresis
 Requires statement of the principal and interest in writing o Interests in mutuum

Must be expressly stipulated o Sale of land by an agent o Can one party require the other to follow the correct form?
 No, because that would presuppose a valid contract.
There is none here for failure of form.

There are cases when form is required but not for validity but for registration. What are these?
o Those in Art. 1358
 [Learn this enumeration] o Failure to follow form makes it valid and enforceable but cannot be registered o Can one party require the other to follow the correct form?

Yes. One party can require the other party to follow the correct form needed (since they are valid)
Defective contracts

What are the types of defective contracts? o 1. Rescissible o 2. Voidable o 3. Unenforceable o 4. Void/inexistent

When is it rescissible?
o When there is particular economic damage to one of the parties or a third person

How does the law treat the contract?
o It is intrinsically valid but external factors allow it to be rescinded

When is it voidable? o Defect in consent in one of the parties

How does the law see it? o Valid until annulled

When is it unenforceable?
o For lack of authority, or writing, or incompetence of parties

How does the law see it? o Cannot be given effect unless ratified

When is it void? o Lack of requisites

Which can be cured? o Voidable and unenforceable
Rescissible

What is rescission?
o A process or remedy designated to render inefficacious a contract validly entered into and normally binding by reason of external conditions creating an economic prejudice, either to a party or to his creditors

What are the requisites for rescission?
o 1. The contract must be rescissible under 1381-2 o 2. The plaintiff must have no other legal means to obtain reparation for damages suffered (it is a last resort) o 3. Plaintiff must be able to return what he would be obliged to return if rescission takes effect
 Sometimes, there is nothing to return, like a creditor in action pauliana o 4. The object of the contract must not have passed to an innocent third person

What are the rescissible contracts?
o 1. Entered into by guardians when wards suffer lesion by more than ¼ of the value of the thing

Ex. the guardian of a ward who owns harvest with value of P100K sells it for P80K.

Is there lesion?
o Yes.

Is there rescissible lesion?
o No, because P20K is less than ¼ of the harvest’s property.

A guardian is judicially appointed. If the sale is made with court consent, what is the effect?


There can be no rescission.

Sale of fruits and personalties are acts of administration. These do not need judicial approval, so lesion can result. But for sale of real property, for instance, where there must be court approval, there can be no rescission. o 2. Same, but for representatives of absentees o 3. Disposition in favor of third person in fraud of creditors
 What is the extent of rescission?

Only to the extent of creditor prejudice o 4. Refer to things under litigation if entered into without knowledge of litigants or consent of judicial authority
 Rescissible at plaintiff’s instance o 5. By special provision of law o (1382) 6. Payments made under state of insolvency for obligations to whose fulfillment the debtor would not be compelled at the time they were effected

Does this require judicial insolvency?

No, just actual insolvency

What is the effect?
o Return what he may be obliged to return o When does it apply?
 Only instances #3 and 4 since for the rest there is nothing to return
Voidable contract

What are the characteristics of voidable contracts?
o 1. Effective unless set aside o 2. It may be assailed only for an action specifically for that purpose
 Cannot attack it collaterally o 3. It can be confirmed

N.B.
the law uses “ratify” – “confirm” is a better term

Ratification is for 1403 par. 1

Acknowledgement is for 1403 par. 2 o 4.
May be assailed only by the party with vitiated consent, his heirs, or subsidiaries

What are the requisites of confirmation? o 1. Contract is voidable o 2. Confirmation made with knowledge voidability o 3. The cause for voidabilty has been removed o 4. The one who is doing so if the one whose consent is defective

When will action for annulment not prosper? o 1. If it has been confirmed o 2. Prescription o 3. Loss of the thing due to fraud or fault of person with right to institute proceedings o 4. Estoppel

1400 and 1401
– In a voidable contract, upon annulment, there must be mutual restitution (just like resolution and rescission).
Are there any instances when the duty of mutual restitution is not present?
o The thing is lost due to de fendant’s fault or fraud
 Return the fruits, value of the thing at the time of the loss, interest

What if it is lost fortuitously?

Return fruits and value of the thing at the time of the loss, but no interest
 What if the thing the plaintiff must return is lost through fault or fraud?

Action is extinguished

What if it is lost fortuitously?

Tolentino: action is extinguished unless the plaintiff offers to pay the value of the thing

Caguioa: plaintiff can still recover
Unenforceable

What are the kinds?
o 1. Entered into in the name of another by one with no authority or legal representation, or acting beyond powers o 2. Both parties are incapable of giving consent
 What if one becomes capacitated and confirms it?

It becomes voidable

And if the other does so too?

Becomes valid

o 3. Falling under the Statute of frauds

A. Agreement whereby its terms, cannot be begun within one year from the agreement

Refers to commencement, not completion
 B. Special promise to answer for debt, default, or miscarriage of others

Contract of guaranty or suretyship

C. Agreement made in consideration of marriage except mutual promise to marry
 D. Sale of chattel/goods/things in action for price
P500 or more

Unless there is payment of price or delivery of goods

E. Agreement for leasing for period longer than 1 year or sale of real property/interest therein

Amount is immaterial for real property
 F. Representation as to the credit of a third person
 G. (Art. 1443) – no express trust concerning an immovable or any interest therein may be proved by parol evidence

What are the rules re: Statute of frauds?
o 1. Only applies to actions which are for specific performance or breach o 2. Does not make void the contracts falling under the enumeration if not in writing. It just bars action for specific performance or breach o 3. Applies only to executory, and not executed contracts in whole or in part
 Executory – one where there is no performance in either side
 If either side has performed, then it gets out of SOF
(1405
– acceptance of benefit) o 4. Cannot be proved by parol evidence.

How do you resist a claim on an unenforceable contract?
o File a motion to dismiss o Or use SOF as affirmative defense o Or object to presentation of parol evidence during trial
Void

What is it? o No force and effect, as if never entered into o Never validated, either by time or ratification

See enumeration in 1409 o See #3 – it says “those whose cause or object did not exist at the time of the transaction.” This is wrong, because there can be a contract over a future thing.
It must be “cause or object could not exist” – original impossibility.

Characteristics? o 1. No effect whatsoever o 2. No action for annulment necessary because the nullity exists ipso jure

Judgment of nullity is merely declaratory o 3. It cannot be confirmed, ratified, or acknowledge o 4. If performed, the restoration of what has been given is in order o 5. Right to set-up defense of nullity cannot be waived

What are the special instances of void contracts? o 1490, 1491
– ex. contract between husband and wife

What is the pari delicto rule (1411-2)?
o It literally means “in equal fault.”
 If the act constitutes a criminal offense, it’s a void contract which happens to constitute a criminal offense. If they are in pari delicto, there can be no action for specific performance, nor restitution on either side o What if only one party is guilty?

For the guilty party, no action for restitution

For the innocent party, there can be

What if the object/cause is unlawful but not criminal? o There can be no specific performance or restitution.
o What if only one party is guilty?
 For the guilty party, no action for restitution

For the innocent party, there can be

N.B. So whether criminal offense or not, no action for specific performance. Restitution depends on guilt/innocence.

Article 1412-19: exceptions to pari delicto rule o The parties are in pari delicto, but despite that, due to social considerations, allows one of the parties recovery. o [See enumeration]

o Ex. employer and employee voluntarily agreeing on wages below the minimum wage.