3189
1. How do we determine the nationality of a Corp. ?
There are several ways to determine this, which are the following:
Incorporation test – This test determines nationality by considering the state of incorporation,
regardless of the nationality of the stockholders.
Domiciliary test – Nationality is determined by the principal place of business of the
corporation.
Control test – Nationality is determined by the nationality of the controlling stockholders or
members. This test is applied in times of war.
Grandfather rule – Nationality is attributed to the percentage of equity in the corporation
used in nationalized or partly nationalized areas.
2.When do we use the Control Test?
We use the control test as the go-to rule, when nothing is being challenged or questioned.
We only resort to the grandfather rule when there are problems that would arise from
applying the control test.
3. Can a Corporation be liable for TORT?
A corporation is civilly liable in the same manner as natural persons for torts, because
generally speaking, the rules governing the liability of a principal or master for a tort
committed by an agent or servant are the same whether the principal or master be a natural
person or a corporation, and whether the servant or agent be a natural or artificial person.
4. Can Corp. claim moral damages?
A corporation is not entitled to moral damages because it has no feelings, no emotions and
no senses. The exception here is when the corporation has a good reputation that is
debased, resulting in its humiliation in the business realm. This means that it enjoyed a good
reputation before the offender debased and besmirched it by his accusations.
5. Can a mass media corp. like GMA 7 sells shares to non - citizen or foreign corp. ?
Yes, as long as 60% of the corporation belongs to Filipinos.
3188
LABOR LAWS:
Labor standards: laws that are minimum requirements for employers set forth to protect
employees. Minimum is required for a standard of equality. Includes wages, hours of work,
allowances, and other monetary and welfare benefits, including those set by occupational
safety and health hazards.
Labor relations: deals with the “how” of applying the labor standards. Relationship between
employer and employees, mechanism by which terms and conditions are negotiated,
adjusted, and enforced, and [interactions and processes on how rights and duties are
exercised].
Welfare legislation: benefits provided to employees arising from their employment
conditions.
Social Justice - backbone of labor laws
- Promotion of the welfare of all the people, the adoption of measures calculated to
ensure economic stability of all the component elements of society
- Balancing of all interests of all sectors (includes the rights of both the management
AND the employee)
Labor Policy under the constitution
-
The state shall afford [full protection] to labor, local and overseas
Shall guarantee the rights of all workers to self organization, collective bargaining,
and negotiations (aka unions).
Entitled to security of tenure, humane conditions of work, and a living wage
Security of tenure (for provisionary employees, they enjoy security of tenure during
the six month period. After that, they may be terminated without due process.)
[people of age voted to approve the 1987 consti]
Right of management - property right
No person shall be deprived of life, liberty, and property, (including the management of
business). Allowing other individuals to interfere with your property right, like in managing
your business, infringes this right.
The right of workers to participate is limited to those rights that can affect them.
Labor relations - The state shall promote the principle of shared responsibility between
workers and employers.
- The state shall regulate the relations between workers and employers, recognizing
the right of labor to its just share in the fruits of production.
- It is the policy of the state that the relation between capital and labor is stable. stateemployers-employees
- To make sure there is industrial peace in the end. This is the shared responsibility of
workers and employers. (without industrial peace, economy down, people are
affected)
- The state shall promote preferential use of voluntary modes in settling disputes,
including conciliation and shall enforce their mutual compliance. (iwas complications,
iwas unneeded litigation. No need to disagree.)
- The state shall regulate the relations between workers and employers, recognizing
the right of labor to its just share in the fruits of production and the right of
enterprises.
The human resources are the most important resource. The worker’s right to proper
compensation is in the constitution.
[labor contract is vested with public interest, not solely determined by the agreement
between the parties]
Classification of employment
Categories: - agricultural v.s. Non-agricultural
- Why the distinction? - they are governed by different sets of laws. Non-agri is
governed by labor code.
- Agri - involves any activity related to tilling of the soil. Otherwise, it’s non-agri
-
According to responsibilities: managerial, supervisory, confidential, managerial, rank
and file
According to tenureship: regular, casual (activity is not usually necessary, work does
not last more than one year, if lumampas ng 1 year, magiging regular), seasonal,
probationary (6 months, must be made aware of the conditions they should meet
upon engagement), and project
Managerial vs rank and file - managerial has higher pay, but no OT pay
The contract of employment - relationship premised on voluntary agreement.
-----
31814
Borromeo - wag magmagaling. Mapapahamak ka lang.
- Right to counsel can be waived.
DECS VS SAN DIEGO - kebs na yan (NAGING DOCTOR SI SAN DIEGO???!!!)
Aquinas - law hindi dahil basta basta naisip, these laws have to make sense (ordinance of
reason). Reaction to events. an ordinance of reason for the common good, made by him who
has care of the community, and promulgated by those in authority.
When we say common good, we don’t count the number of people who benefit (direct and
indirect benefit). For the best interest of the majority.
3rd republic - after ww2 july 4 1946. First republic act. Prior to that we had commonwealth
acts. Prior to that we had acts only
Implementing rules and regulations - from executive. Because the executive branch is
tasked to implement the law, so implementing rules and regulations are needed to properly
implement the laws. [These are rules and regulations for implementing.]
Movable v.s. Immovable v.s. thing
The calls are not physical pero PLDT’s business itself is property. If not under the
classification in article 415, it is movable
Things:
Res nullius - owned by no one
Res communes - owned by all
Res alicujus - owned by someone or some people
Companies are only allowed compelled to have employees get involved if it affects their
rights.
Article 415 par. 10, servitudes include easements (right of way)
____________________________________________________
[outside the commerce of man and for the purpose of preservation. Tamaraw technically
consumable, but since prinepreserve, pwede siyang i-appropriate ng government. No private
ownership]
ARTICLE 416
The following things are deemed to be personal property:
(1) Those movables susceptible of appropriation which are not included in the preceding
article; (anything that is not listed in article 415 is considered personal property)
(2) Real property which by any special provision of law is considered as personalty
(3) Forces of nature which are brought under control by science; and
(4) In general, all things which can be transported from place to place without
impairment of the real property to which they are fixed
[BASICALLY YUNG HINDI NABANGGIT SA 415, MGA SPINECIFY NG BATAS,
CONTROLLED FORCE OF NATURE (?), AT HINDI NAKAKASIRA KAPAG NILILIPAT]
ARTICLE 417
The following are also considered as personal property:
(1) Obligations and actions which have for their object movables or demandable sums;
and
(2) Shares of stock of agricultural, commercial, and industrial entities, although they may
have real estate.
[1, objects of contracts. Yung obligation mismo is counted as a personal property. 2 IS SELF
EXPLANATORY (STONKS)]
RULE OF EXCLUSION - simply put, for as long as it is not mentioned, it is not included. (if it
is not mentioned in the list of immovable, it is movable)
RULE OF DESCRIPTION - a property is movable as long as it can be transferred without
any injury to it, “unless it is expressly included in article 415”
ARTICLE 418
Movable property is either consumable or non-consumable. To the first class belong those
movables which cannot be used in a manner appropriate to their nature without their being
consumed; to the second class belong all the others
[CONSUMABLE KAPAG NA-USED UP]
CONSUMABLE/NON-CONSUMABLE V.S. FUNGIBLE/NON-FUNGIBLE?
Ekis. kasi fungible is like common nouns, (e.g. in a recipe, “rice” lang, so pwede dinorado,
jasmine rice, etc.). non fungible is like proper nouns (e.g. in a recipe, sabi “dinorado”
specifically, so di pwede i-substitute ng NFA ganorn).
Consumable (eating food, using raw materials to create finished products (?), spending
money)
ARTICLE 419
Property is either of public dominion or of private ownership.
WHEN IS IT PUBLIC DOMAIN? - when it is owned by the state for public use and benefit
(when owned by the state but not for public use and benefit, it’s called patrimonial property)
WHEN IS IT PRIVATE OWNERSHIP? - when owned by private individual
ARTICLE 420
The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads, and others of similar
character
(2) Those which belong to the State, without being for public use, and are intended for
some public service or for the development of the national wealth.
[PUBLIC DOMAIN =/= PATRIMONIAL. PUBLIC DOMAIN IF FOR THE BENEFIT OF THE
PEOPLE WHETHER IT MAY BE FOR PUBLIC USE OR NOT]
ARTICLE XII SECTION 2 & 3 OF CONSTITUTION
SECTION 2. All lands of the public domain, waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned by the State. With the exception of agricultural
lands, all other natural resources shall not be alienated. The exploration, development, and
utilization of natural resources shall be under the full control and supervision of the State.
The State may directly undertake such activities, or it may enter into co-production, joint
venture, or production-sharing agreements with Filipino citizens, or corporations or
associations at least sixty per centum of whose capital is owned by such citizens. Such
agreements may be for a period not exceeding twenty-five years, renewable for not more
than twenty-five years, and under such terms and conditions as may be provided by law. In
cases of water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, beneficial use may be the measure and limit of the grant.
The State shall protect the nation’s marine wealth in its archipelagic waters, territorial sea,
and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino
citizens.
The Congress may, by law, allow small-scale utilization of natural resources by Filipino
citizens, as well as cooperative fish farming, with priority to subsistence fishermen and
fishworkers in rivers, lakes, bays, and lagoons.
The President may enter into agreements with foreign-owned corporations involving either
technical or financial assistance for large-scale exploration, development, and utilization of
minerals, petroleum, and other mineral oils according to the general terms and conditions
provided by law, based on real contributions to the economic growth and general welfare of
the country. In such agreements, the State shall promote the development and use of local
scientific and technical resources.
The President shall notify the Congress of every contract entered into in accordance with
this provision, within thirty days from its execution.
SECTION 3. Lands of the public domain are classified into agricultural, forest or timber,
mineral lands, and national parks. Agricultural lands of the public domain may be further
classified by law according to the uses which they may be devoted. Alienable lands of the
public domain shall be limited to agricultural lands. Private corporations or associations may
not hold such alienable lands of the public domain except by lease, for a period not
exceeding twenty-five years, renewable for not more than twenty-five years, and not to
exceed one thousand hectares in area. Citizens of the Philippines may lease not more than
five hundred hectares, or acquire not more than twelve hectares thereof by purchase,
homestead, or grant.
Taking into account the requirements of conservation, ecology, and development, and
subject to the requirements of agrarian reform, the Congress shall determine, by law, the
size of lands of the public domain which may be acquired, developed, held, or leased and
the conditions therefor.
----------G.R. No. 163072
April 2, 2009
MANILA INTERNATIONAL AIRPORT AUTHORITY, Petitioner,
vs.
CITY OF PASAY, SANGGUNIANG PANGLUNGSOD NG PASAY, CITY MAYOR OF
PASAY, CITY TREASURER OF PASAY, and CITY ASSESSOR OF PASAY, Respondents.
-so in short, City of Pasay told MIAA to pay up kasi according to the local government code,
di na sila exempt. Then na-grant, then ngayon nagpetition for certiorari ang MIAA.
Meritorious ang petition ng MIAA kasi public dominion ang NAIA.
-Kaso sabi ng SC magbayad sila ng tax para dun sa mga property nila sa pasay na naka
loan lang
-MIAA is not a government-owned or controlled corporation under Section 2(13) of the
Introductory Provisions of the Administrative Code because it is not organized as a stock or nonstock corporation. Neither is MIAA a government-owned or controlled corporation under Section
16, Article XII of the 1987 Constitution because MIAA is not required to meet the test of
economic viability. MIAA is a government instrumentality vested with corporate powers and
performing essential public services pursuant to Section 2(10) of the Introductory Provisions of
the Administrative Code. As a government instrumentality, MIAA is not subject to any kind of tax
by local governments under Section 133(o) of the Local Government Code.
-Furthermore, the airport lands and buildings of MIAA are properties of public dominion intended
for public use, and as such are exempt from real property tax under Section 234(a) of the Local
Government Code. However, under the same provision, if MIAA leases its real property to a
12
taxable person, the specific property leased becomes subject to real property tax. In this case,
only those portions of the NAIA Pasay properties which are leased to taxable persons like private
parties are subject to real property tax by the City of Pasay.
--------
G.R. No. 92013 July 25, 1990
SALVADOR H. LAUREL, petitioner,
vs.
RAMON GARCIA, as head of the Asset Privatization Trust, RAUL MANGLAPUS, as
Secretary of Foreign Affairs, and CATALINO MACARAIG, as Executive Secretary,
respondents.
Other properties involved:
(1) The Nampeidai Property at 11-24 Nampeidai-machi, Shibuya-ku, Tokyo which has an
area of approximately 2,489.96 square meters, and is at present the site of the Philippine
Embassy Chancery;
(2) The Kobe Commercial Property at 63 Naniwa-cho, Kobe, with an area of around 764.72
square meters and categorized as a commercial lot now being used as a warehouse and
parking lot for the consulate staff; and
(3) The Kobe Residential Property at 1-980-2 Obanoyama-cho, Shinohara, Nada-ku, Kobe, a
residential lot which is now vacant.
-essentially, the property na pinoproblema nila is yung of the 3,179 square meters of land at
306 Roppongi, 5-Chome Minato-ku Tokyo, Japan.
-gusto nila ibenta kesho daw japanese law chuchu.
-hindi pwede kasi yung lupa na yun is public dominion, outside the commerce of man. Di
talaga pwede ibenta regardless kung hindi ginagamit. Di pa siya patrimonial property, kaya
di pa siya pwede ibenta. Kung gusto ibenta, kailangang dumaan sa proseso.
---------WHAT IS CONSIDERED PATRIMONIAL PROPERTY? - when owned by the state but not
for public use and benefit, it’s called patrimonial property
Article 422 - property of public dominion becomes patrimonial when it is no longer intended
for public use or public service
Article 423 - property of provinces, cities, and municipalities is divided into property for public
use and patrimonial property
Article 424 - property for public use, in the provinces, cities, and municipalities, consist of the
provincial roads, city street, municipal streets, the squares, fountains, public waters,
promenades, and public works for public service paid for and by said provinces, cities, or
municipalities.
POLITICAL SUBDIVISIONS are local governments created by the states to help fulfill their
obligations. Political subdivisions include counties, cities, towns, villages, and special
districts such as school districts, water districts, park districts, and airport districts
WHAT IS REGALIAN DOCTRINE? - The regalian doctrine is to the effect that all lands of the
public domain belong to the State, and that the State is the source of any asserted right to
ownership in land and charged with the conversation of such patrimony. [very old]
--------G.R. No. 167707
October 8, 2008
THE SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES, THE REGIONAL EXECUTIVE DIRECTOR, DENR-REGION VI, REGIONAL
TECHNICAL DIRECTOR FOR LANDS, LANDS MANAGEMENT BUREAU, REGION VI
PROVINCIAL ENVIRONMENT AND NATURAL RESOURCES OFFICER OF KALIBO, AKLAN,
REGISTER OF DEEDS, DIRECTOR OF LAND REGISTRATION AUTHORITY, DEPARTMENT
OF TOURISM SECRETARY, DIRECTOR OF PHILIPPINE TOURISM AUTHORITY, petitioners,
vs.
MAYOR JOSE S. YAP, LIBERTAD TALAPIAN, MILA Y. SUMNDAD, and ANICETO YAP, in
their behalf and in behalf of all those similarly situated, respondents.
So basically, people lived in boracay for a long time. They even paid taxes for the land they
lived on. BUT, the government claims that boracay is public domain, therefore inalienable.
And since they dont have titles to their land, they dont “own” it.
Except for lands already covered by existing titles, Boracay was an unclassified land of
the public domain prior to Proclamation No. 1064. Such unclassified lands are considered
public forest under PD No. 705.
But then there’s the matter of Boracay being unclassified, and the power of the executive
only states “reclassification”, making boracay an exception.
In the end, the law is the law (?). Regalian doctrine ang pinairal
ARTICLE XII SECTION 7. Save in cases of hereditary succession, no private lands shall be
transferred or conveyed except to individuals, corporations, or associations qualified to
acquire or hold lands of the public domain.
-
-
Who are qualified? As a general rule only Filipino citizens and
Corporations/Partnerships where at least 60% of the Authorized Capital Stocks
(ACS) of which is owned by Filipino citizens.
Rationale for prohibiting foreigners from acquiring lands in the country? Article XII
Section 1. the State shall protect Filipino enterprises against unfair foreign
competition and trade practices.
--------G.R. No. 113539 March 12, 1998
CELSO R. HALILI and ARTHUR R. HALILI, petitioners,
vs.
COURT OF APPEALS, HELEN MEYERS GUZMAN, DAVID REY GUZMAN and EMILIANO
CATANIAG, respondents.
In the first place, yung ownership is deemed invalid kasi hindi naman filipino citizens yung
sina meyers-guzman. Tas ngayon, sina halili, they’re reclaiming the land kasi it technically
never belonged to the foreigners
Yun nga lang, urban yung lupa. Only rural land can be reclaimed. Then, valid yung
subsequent sale kay cataniag kasi na-”cure” yung invalidity ng ownership ng foreigner by
way of selling the land to a proper filipino citizen.
-------Section 5 of Republic Act No. 8179
Sec. 5. The Foreign Investments Act is further amended by inserting a new section
designated as Section 10 to read as follows:
"Sec. 10. Other Rights of Natural Born Citizen Pursuant to the Provisions of Article XII, Sec.
8 of the Constitution. – Any natural born citizen who has the legal capacity to enter into a
contract under Philippine laws may be a transferee of a private land up to a maximum area
of five thousand (5,000) square meters in the case of urban land or three (3) hectares in the
case of rural land to be used by him for business or other purposes. In the case of married
couples, one of them may avail of the privilege herein granted: provided, that if both shall
avail of the same, the total area acquired shall not exceed the maximum herein fixed.
"In case the transferee already owns urban or rural land for business or other purposes, he
shall still be entitled to be a transferee of additional urban or rural land for business or other
purposes which when added to those already owned by him shall not exceed the maximum
areas herein authorized.
"A transferee under this Act may acquire not more than two (2) lots which should be situated
in different municipalities or cities anywhere in the Philippines: provided, that the total land
area thereof shall not exceed five thousand (5,000) hectares in the case of rural land for use
by him for business or other purposes. A transferee who has already acquired urban land
shall be disqualified from acquiring rural land area and vice versa."
In the PH may political and geographical subdivision. Different but related. Political is local
govts. Geographical is the physical division, territories
-------ARTICLE 427 - Ownership may be exercised over things or rights
Ownership - the independent and general power of a person over a thing for purposes
recognized by law and within the limits established thereby.
RIGHTS INCLUDED IN OWNERSHIP? - Right to enjoy, right to dispose, right of action
against the holder and possessor of a thing in order to recover it
Full ownership may enjoy these bundle of rights as elements or attributes of ownership:
a. Right to Possess (jus possedendi)
b. Right to Use and Enjoy (jus utendi)
c. Right to Receive the Fruits & Accessories (jus fruendi)
d. Right to Abuse and Consume (jus abutendi)
e. Right to Dispose or Alienate (jus disponendi)
f. Right to Recover Possession and/or Ownership (jus vindicandi)
g. Right to Construct any work or make plantation or excavation
h. Right to have ownership of the Hidden treasures found in the property;
i. Right to Exclude others; and
j. Right to Fence the property.
SUBJECT OF OWNERSHIP - material and immaterial things? Property?
BENEFICIAL OWNERSHIP VS NAKED OWNERSHIP - Naked ownership—ownership
where the right to the use and the fruits have been denied (sayo nakapangalan pero di ikaw
nagbebenefit). Beneficial ownership has been defined as ownership recognized by law and
capable of being enforced in the courts at the suit of the beneficial owner.
ARTICLE 428 - The owner has the right to enjoy and dispose of a thing, without other
limitations than those established by law. The owner has also a right of action against the
holder and possessor of the thing in order to recover it.
3 RIGHTS OF AN OWNER - Right to enjoy, right to dispose, right of action against the
holder and possessor of a thing in order to recover it
ACTIONS FOR RECOVERY OF POSSESSION OF REAL AND PERSONAL PROPERTY For real: (a) accion interdictal; (b) accion publiciana; and (c)accion reivindicatoria. Personal
property: Replevin
FORCIBLE ENTRY VS ACCION PUBLICIANA Forcible entry/unlawful detainer
Action for recovery of material possession of real property when a person originally in
possession was deprived thereof by force, intimidation, strategy, threat or stealth
ACCION PUBLICIANA
Ordinary civil proceeding to recover the better right of possession, except in cases of forcible
entry and unlawful detainer. The involved is not possession de facto but possession de jure.
PRESCRIPTION PERIOD FOR FILING OF ACCION PUBLICIANA AND ACCION
REINVINDICATORIA - For accion publiciana: Must be brought within a period of 10
years otherwise the real right to possess is lost. For accion reinvindicatoria: It must be
brought within 10 or 30 years as the case may be
When may accion publiciana or accion reinvindicatoria be filed? - one year after
dispossession
ANCILLARY REMEDIES?
WRIT OF POSSESSION
Used in connection with the Land Registration Law is an order directing the
sheriff to place a successful registrant under the Torrens system in possession of the
property covered by a decree of the Court
PRELIMINARY MANDATORY INJUNCTION
A preliminary injunction is an order granted at any stage of an action or proceeding
prior to the judgment or final order, requiring a party or a court, agency or a person to refrain
from a particular act or acts. It may also require the performance of a particular act or acts, in
which case it shall be known as a preliminary mandatory injunction.
LIMITATIONS ON THE RIGHT OF OWNERSHIP?
Limitations:
1. General limitations imposed by the State for its benefit - inherent powers of the state,
police power, eminent domain, taxation
2. Specific limitations imposed by law - legal easement, zoning regulations, building code,
rent control, urban and agrarian reform, subdivision regulations, escheat
3. Limitations imposed by the owner himself - as voluntary servitudes, mortgages, pledges,
lease and deed of restrictions.
4. Limitations imposed by the party transmitting the property either by contract or by will such as donation, usufruct
ARTICLE 429 - The owner or lawful possessor of a thing has the right to exclude any person
from the enjoyment and disposal thereof. For this purpose, he may use such force as may
be reasonably necessary to repel or prevent an actual or threatened unlawful physical
invasion or usurpation of his property
DOCTRINE OF SELF-HELP
The right to counter force with force
Comparable with self-defense under justifying circumstances in Criminal Law
ARTICLE 430 - Ever owner may enclose or fence his land or tenements by means of walls,
ditches, live or dead hedges, or by any other means without detriment or servitudes
constituted therein
ARTICLE 431 - The owner of a thing cannot make use thereof in such manner as to injure
the rights of a third person.
ARTICLE 432 - The owner of a thing has no right to prohibit the interference of another with
the same, if the interference is necessary to avert an imminent danger and the threatened
damage, compared to the damage arising to the owner from the interference, is much
greater. The owner may demand from the person benefited indemnity for the damage to him.
Discuss state of necessity - ANALOGOUS TO THE RULE UNDER CRIMINAL LAW
Any person who, in order to avoid an evil or injury, does an act which causes
damage to another doesn't incur criminal liability provided that the following requisites are
present:
BASIS OF LIABILITY
1. That the evil sought to be avoided actually exists
2. That the injury feared be greater than that done to avoid it
3. That there be no other practical or less harmful means of preventing it
ARTICLE 433 - Actual possession under claim of ownership raises disputable
presumption of ownership. The true owner must resort to judicial process for the recovery of
the property.
When does disputable presumption of ownership arise under Article 433? - Actual
possession under claim of ownership raises disputable presumption of ownership
What are the requirements in substantiating an action to recover property?
REQUISITES IN AN ACTION TO RECOVER
1. Identity of the property
2. Strength of the plaintiff’s title
ARTICLE 434 - In an action to recover, the property must be identified, and the plaintiff
must rely on the strength of his title and not on the weakness of the defendant's claim.
Why is the plaintiff not allowed to rely on the weakness of defendant’s title? - because we
need to have preponderance of evidence in civil cases. The burden of proof lies on the
person claiming to be the owner
ARTICLE 435 - No person shall be deprived of his property except by competent
authority and for public use and always upon payment of just compensation.
Should this requirement be not first complied with, the courts shall protect and, in a proper
case, restore the owner in his possession.
EMINENT DOMAIN VS EXPROPRIATION - eminent domain is the inherent power of the
state to take private property for public use with just compensation, while expropriation is the
action itself of taking the property
EXPROPRIATION VS SALE - expropriation is taking private property for public use, while
sale is the exchange of goods for money, so although you are technically exchanging your
property and being compensated with money, sale is different because the intent is different.
What are the two stages in an expropriation proceeding? - Governed by Rule 67 of the Rules
of Court, the proceedings therefor consist of two (2) stages: (a) the condemnation of the
property after it is determined that its acquisition will be for a public purpose or public use;
and, (b) the determination of just compensation to be paid for the taking of private property
to be made by the court with the assistance of not more than three commissioners.
What are the requisites of eminent domain?
(1) the property taken must be private property; (2) there must be genuine necessity to take
the private property; (3) the taking must be for public use; (4) there must be payment of just
compensation; and (5) the taking must comply with due process of law.
__
MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY and AIR TRANSPORTATION
OFFICE, Petitioners,
vs.
BERNARDO L. LOZADA, SR., and the HEIRS OF ROSARIO MERCADO, namely,
VICENTE LOZADA, MARIO M. LOZADA, MARCIA L. GODINEZ, VIRGINIA L. FLORES,
BERNARDO LOZADA, JR., DOLORES GACASAN, SOCORRO CAFARO and ROSARIO
LOZADA, represented by MARCIA LOZADA GODINEZ, Respondents.
First, si deiparine yung may ari. Then, na-expropriate yung lupa. Kaso during the pendency
period, binenta niya yung lupa sa mag asawa. Ngayon yung mag asawa, may ari sila ng
lupa. Then, na-expropriate lupa nila for an airport. Ayaw nila noong una pero in the end, naeminent domain sila. Then di pala nagamit yung lupa for the airport. Sabi ng govt
mapaprioritize sila kapag ibebenta dahil di nagamit. Kaso, ang dapat, mabalik sa kanila yung
lupa kasi nga di nagamit.
Facts:
Subject of this case is Lot No. 88-SWO-25042 (Lot No. 88), with an area of 1,017 square
meters, more or less, located in Lahug, Cebu City.
Its original owner was Anastacio Deiparine when the same was subject to expropriation
proceedings, initiated by the Republic of the
Philippines (Republic), represented by the then Civil Aeronautics Administration (CAA), for
the expansion and improvement of the Lahug Airport. The case was filed with the then Court
of First Instance of Cebu, Third Branch, and docketed as Civil Case No. R-1881.
During the pendency of the expropriation proceedings, respondent Bernardo L. Lozada, Sr.
acquired Lot No. 88 from Deiparine.
On December 29, 1961, the trial court rendered judgment in favor of the Republic and
ordered the latter to pay Lozada the fair market value of Lot No. 88, adjudged at P3.00 per
square meter, with consequential damages by way of legal interest computed from
November 16, 1947--the... time when the lot was first occupied by the airport.
Lozada, with the other landowners, contacted then CAA Director Vicente Rivera, Jr.,
requesting to repurchase the lots, as per previous agreement.
On November 29, 1989, then President Corazon C. Aquino issued a Memorandum to the
Department of Transportation, directing the transfer of general aviation operations of the
Lahug Airport to the Mactan International Airport before the end of 1990 and, upon such
transfer, the... closure of the Lahug Airport.
From the date of the institution of the expropriation proceedings up to the present, the public
purpose of the said expropriation (expansion of the airport) was never actually initiated,
realized, or implemented.
Thus, on June 4, 1996, petitioners initiated a complaint for the recovery of possession and
reconveyance of ownership of Lot No. 88.
On October 22, 1999, the RTC rendered its Decision, disposing as follows... he Court hereby
renders judgment in favor of the plaintiffs, Bernardo L. Lozada, Sr.,... Aggrieved, petitioners
interposed an appeal to the CA.
fter the filing of the necessary appellate briefs, the CA rendered its assailed Decision dated
February 28, 2006, denying petitioners' appeal and affirming in toto the Decision of the RTC,
Branch 57, Cebu City.
Issues:
(1) the respondents utterly failed to prove that there was a repurchase agreement or
compromise settlement between them and the Government; (2) the judgment in Civil Case
No. R-1881 was absolute and unconditional, giving title in fee simple to... the Republic;
Ruling:
The petition should be denied.
Indeed, the Decision in Civil Case No. R-1881 should be read in its entirety, wherein it is
apparent that the acquisition by the Republic of the expropriated lots was subject to the
condition that the Lahug Airport would continue its operation. The condition not having...
materialized because the airport had been abandoned, the former owner should then be
allowed to reacquire the expropriated property.
More particularly, with respect to the element of public use, the expropriator should commit
to use the property pursuant to the purpose stated in the petition for expropriation filed,
failing which, it should file another petition for the new purpose.
In light of these premises, we now expressly hold that the taking of private property,
consequent to the Government's exercise of its power of eminent domain, is always subject
to the condition that the property be devoted to the specific public purpose for which it was
taken.
Corollarily, if this particular purpose or intent is not initiated or not at all pursued, and is
peremptorily abandoned, then the former owners, if they so desire, may seek the reversion
of the property, subject to the return of the amount of just compensation received. In such...
a case, the exercise of the power of eminent domain has become improper for lack of the
required factual justification.
It bears stressing that both the RTC, Branch 57, Cebu and the CA have passed upon this
factual issue and have declared, in no uncertain terms, that a compromise agreement was,
in fact, entered into between the Government and respondents, with the former undertaking
to resell Lot
No. 88 to the latter if the improvement and expansion of the Lahug Airport would not be
pursued.
the testimony of Lozada was based on... personal knowledge as the assurance from the
government was personally made to him.
As regards the position of petitioners that respondents' testimonial evidence violates the
Statute of Frauds, suffice it to state that the Statute of Frauds operates only with respect to
executory contracts, and does not apply to contracts which have been completely or
partially... performed,... The right of respondents to repurchase Lot No. 88 may be enforced
based on a constructive trust constituted on the property held by the government in favor of
the former.
WHEREFORE, the petition is DENIED.
ARTICLE 436 - When any property is condemned or seized by competent authority in the
interest of health, safety or security, the owner thereof shall not be entitled to compensation,
unless he can show that such condemnation or seizure is unjustified.
ARTICLE 437 - The owner of a parcel of land is the owner of its surface and of everything
under it, and he can construct thereon any works or make any plantations and excavations
which he may deem proper, without detriment to servitudes and subject to special laws and
ordinances. He cannot complain of the reasonable requirements of aerial navigation.
ARTICLE 438 - Hidden treasure belongs to the owner of the land, building, or other property
on which it is found. Nevertheless, when the discovery is made on the property of another, or
of the state or any of its subdivisions, and by chance, one half thereof shall be allowed to the
finder. If the finder is a trespasser, he shall not be entitled to any share of the treasure. If the
things found to be of interest to science or the arts, the state may acquire them at their just
price, which shall be divided in conformity with the rule stated.
ARTICLE 439 - By treasure is understood, for legal purposes, any hidden and unknown
deposit of money, jewelry, or other precious objects, the lawful ownership of which does not
appear
======================================================================
ART 440 The ownership of property gives the right by accession to everything which is
produced thereby, or which is incorporated or attached thereto, either naturally or artificially.
WHAT IS RIGHT OF ACCESSION? - from the word accession, which is similar in definition
to acquisition, the right of accession means that the person is entitled to all the fruits that
would come from their property. Right to own the accessory to the principal
KINDS OF ACCESSION - Accession Discreta – the right pertaining to the owner of a thing
over everything produced thereby [fruits]
Accession Continua – the right pertaining to the owner of a thing over everything that is
incorporated or attached thereto either naturally or artificially; by external forces.
-
UNDER ACCESSION CONTINUA
- Accession as to immovables - accession industrial - building, planting or
sowing, and accession natural - alluvium (a deposit of clay, silt, sand, and
gravel left by flowing streams in a river valley or delta, typically producing
fertile soil)., avulsion (the rapid abandonment of a river channel and the
formation of a new river channel). , change of river course, and formation of
islands
- Accession as to movables adjunction or conjuction - process by virtue of which 2 movable
things belonging to different owners are united in such a way that they
form a single object and that they cannot be separated without injury
commixtion or confusion - method of acquiring property by mixing or
blending substances belonging to different proprietors.
Specification - turning one thing into another, giving it a new form
DIFFERENT KINDS OF ADJUNCTION
1. Inclusion/engraftment
2. Soldadura/soldering
3. Escritura/writing
4. Pintura/painting
5. Weaving/tejido
JUSTIFICATION FOR ACCESSION? - for discreta it is only just that the owner of a thing
should also own whatever it produces, and for continua, it is based on necessity and utility
ARTICLE 441. To the owner belongs:
(1) The natural fruits; [di mo tinanim pero inani mo + young of animals]
(2) The industrial fruits;
(3) The civil fruits. [RENT] (354)
EXCEPTION TO THE RULE THAT THE FRUITS BELONG TO THE OWNER? 1.
Possession in good faith by another
2. Usufruct (the right to enjoy the use and advantages of another's property short of the
destruction or waste of its substance), where the usufructuary gets the fruits
3. Lease, in which the lessee gets the fruits of the property directly and the owner receives
civil fruits in the form of rent
4. Antichresis, in which the creditor receives the fruits
ARTICLE 442 Natural fruits are the spontaneous products of the soil, and the young and
other products of animals.
Industrial fruits are those produced by lands of any kind through cultivation or labor.
Civil fruits are the rents of buildings, the price of leases of lands and other property and the
amount of perpetual or life annuities or other similar income.
3 KINDS OF FRUITS AND EXAMPLES?
Natural - borne out of the land without human intervention, like the fruits on pre-existing fruit
trees on a newly acquired piece of land
Industrial - borne out of the land after labor has been put into it, like the fruit from fruit trees
that were subsequently planted after acquiring a piece of land, or vegetables from crops
cultivated on the land
Civil - rent of land or buildings, or any other form of income obtained from the land or
building itself
ART 443 He who receives the fruits has the obligation to pay the expenses made by a third
person in their production, gathering, and preservation
WHO IS THE THIRD PERSON - people who, without their help in the production, gathering,
and preservation, the recipient would not have fully enjoyed the fruits of their property
WHEN ARE FRUITS CONSIDERED IN EXISTENCE IN ARTICLE 444? Only such as are
manifest or born are considered as natural or industrial fruits. (can be perceived by the
senses, therefore they exist)
With respect to animals, it is sufficient that they are in the womb of the mother, although
unborn.
ARTICLE 445 Whatever is built, planted or sown on the land of another and the
improvements or repairs made thereon, belong to the owner of the land, subject to the
provisions of the following articles.
PRESUMPTIONS UNDER ARTICLE 446 - “all works” include not only the construction,
planting, and sowing of the land, but also the improvement, or repair of buildings and any
other related work, such as the placing of industrial machinery.
-
all works (construction) that exists on a piece of land is presumed to be made by its
owner and at his expense
RIGHTS AND OBLIGATIONS OF PARTIES UNDER ART. 447
If the owner of the land uses the materials of another to benefit himself, he is obligated to
pay their value. If he acted in bad faith, he is also obliged to pay the reparations of damages.
The owner of the materials has the right to remove them as long as they do not cause injury
to the work constructed. However, if the landowner acted in bad faith, he may remove them
in any event with a right to be compensated for damages
ARTICLE 448 The owner of the land on which anything has been built, sown or planted in
good faith, shall have the right to appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built
or planted to pay the price of the land, and the one who sowed, the proper rent. However,
the builder or planter cannot be obliged to buy the land if its value is considerably more than
that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the
land does not choose to appropriate the building or trees after proper indemnity. The parties
shall agree upon the terms of the lease and in case of disagreement, the court shall fix the
terms thereof.
G.R. No. 211170
SPOUSES MAXIMO ESPINOZA and WINIFREDA DE VERA, Petitioners
vs.
SPOUSES ANTONIO MAYANDOC and ERLINDA CAYABYAB MAYANDOC, Respondents
Petitioners sold a piece of land to respondents under a fictitious deed of sale without their
knowledge on July 9, 1977. Years later, due to this flaw, the petitioners filed an action for
annulment of document with prayer for the nullification of the transfer certificate of title at
RTC, Branch 40, Dagupan City, which rendered a Decision in favor of petitioners and
ordering respondents to reconvey the land in dispute and to pay attorney's fees and the cost
of the suit.
Thus, the respondents asserted that they were builders in good faith as they were not
informed of the flaw in their ownership until after they had finished constructing their house
on that land some time in 1996. They also said that the petitioners never stopped them from
building their house after having to tear down the old house that belonged to respondent
Erlinda Mayandoc’s father despite this flaw in their ownership. As such, they claimed that
they are entitled to reimbursement of the construction cost of the house in the amount of
₱800,000.00. They further asserted that at the time that their house was constructed, they
were possessors in good faith, since they had lived there for years.
The petitioners claimed that they were indeed aware of this defect, and thus they were
builders in bad faith and would lose the rights over everything built over the land without any
compensation.
However, the burden of proof lies on the petitioners to prove that the respondents were
indeed builders in bad faith.
Issue - whether or not the respondents were builders in bad faith / whether or not the
respondents were subject to compensation
Decision/Held - the law has provided a just solution by giving the owner of the land the
option to acquire the improvements after payment of the proper indemnity, or to oblige the
builder or planter to pay for the land and the sower the proper rent
RATIONALE OF ARTICLE 448? - To ensure that the owner of the improvements is
protected without causing injustice to the owner of the land. Essentially, keeping things
between fair and just between them.
ARTICLE 449 - He who builds, plants or sows in bad faith on the land of another, loses what
is built, planted or sown without right to indemnity.
EXCEPTION TO THE RULE OF LACK OF INDEMNITY? - Unless the landowner insists in
the absolute compliance of article 449, the builder, planter, or sower may remove his
materials, paying the landowner damages he may suffer, provided that the land does not
suffer any injury from the removal
REMEDIES OF THE LANDOWNER WHOSE LAND SOMEBODY BUILT UPON IN BAD
FAITH? - They may either appropriate what was built, demand the demolition of what was
built on the land to restore it to its previous state at the expense of the builder, or compel the
builder to pay the value of the land where the thing was built.
ARTICLE 451 - In the cases of the two preceding articles, the landowner is entitled to
damages from the builder, planter or sower
WHY IS THE BUILDER IN BAD FAITH ENTITLED TO REIMBURSEMENT OF FOR
NECESSARY EXPENSES? - If the builder in bad faith has made the necessary expenses
for the preservation of the land itself, he is entitled to reimbursement for such expenses,
though he loses the accessory or improvement for himself. This is so that he is not deprived
of his right to collect what he has spent to preserve the principal.
WHAT ARE THESE NECESSARY EXPENSES? - expenses made in preservation of the
land or property, such as renovation costs, repairs, and maintenance (?)
EFFECT IF BOTH BUILDER AND LAND OWNER WERE IN BAD FAITH? (ARTICLE 453) If there was bad faith, not only on the part of the person who built, planted or sowed on the
land of another, but also on the part of the owner of such land, the rights of one and the
other shall be the same as though both had acted in good faith.
It is understood that there is bad faith on the part of the landowner whenever the act was
done with his knowledge and without opposition on his part
IF THE LAND OWNER IS IN BAD FAITH INSTEAD OF THE BUILDER? - When the
landowner acted in bad faith and the builder, planter or sower proceeded in good faith, the
provisions of article 447 shall apply. (besides paying for what materials he used, he must
also pay damages)
PARTIES INVOLVED UNDER ARTICLE 455? DISCUSS THEIR RIGHTS? - If the materials,
plants or seeds belong to a third person who has not acted in bad faith, the owner of the land
shall answer subsidiarily for their value and only in the event that the one who made use of
them has no property with which to pay.
This provision shall not apply if the owner makes use of the right granted by article 450. If
the owner of the materials, plants or seeds has been paid by the builder, planter or sower,
the latter may demand from the landowner the value of the materials and labor.
Parties involved - the land owner, the builder/sower/planter, and the third party
Rights - land owner may pay for the materials belonging to the third party only if the
one who made use of them is unable to pay. If the owner of the materials (the third party)
was paid for by the builder, the builder may demand from the landowner the value of the
materials and labor.
ARTICLE 456 - In the cases regulated in the preceding articles, good faith does not
necessarily exclude negligence, which gives right to damages under article 2176. (basically,
you are still required to pay for damages even if the damage was caused unintentionally.
Negligence still may exist despite being in good faith, as it is the cause of damage
unintentionally while bad faith is the cause of damage intentionally.)
======================================================================
a. Discuss Article 457.
To the owners of lands adjoining the banks of rivers belong the accretion which they
gradually receive from the effects of the current of the waters. - very straightforward, the
accretion that gets carried towards their lands would be considered theirs, whatever the
effects may be
b. What is alluvium? - a deposit of clay, silt, sand, and gravel left by flowing streams in a
river, typically producing fertile soil
b.1. What are the essential elements of alluvium?
- That the deposit be gradual and imperceptible
-
That it be made through the effects of the current of the water
That the land where accretion takes place is adjacent to the banks of the river
c. What is accretion? - The addition of soil to the land already in possession of the owner by
gradual accumulation due to natural causes
d. What is avulsion? - the sudden separation of land from one property and its attachment to
another, especially by flooding or a change in the course of a river.
e. Why is soil deposited granted to owners of lands adjoining river banks? - Nobody can
prove ownership over such accumulation of sediment and nobody can tell from whose land
they came from, so for the sake of expediency, they are given to the owner of the land where
they get deposited since that owner is the one who can utilize it the best
f. Discuss Article 458 - The owners of estates natural collection of waters, arising from
springs or fountains, which flow in a bed or canal of considerable width and length, towards
the sea.s adjoining ponds or lagoons do not acquire the land left dry by the natural decrease
of the waters, or lose that inundated by them in extraordinary floods.
g. What is a pond? - a small body of stagnant water
h. What is a lagoon? - a stretch of salt water separated from the sea by a low sandbank or
coral reef.
i. Discuss Article 459 - Whenever the current of a river, creek or torrent segregates from an
estate on its bank a known portion of land and transfers it to another estate, the owner of the
land to which the segregated portion belonged retains the ownership of it, provided that he
removes the same within two years.
j. What is a river? - A natural collection of waters, arising from springs or fountains, which
flow in a bed or canal of considerable width and length, towards the sea.
k. What is a creek? - a natural stream of water normally smaller than and often connected to
a river.
l. What is a torrent? - a stream of water flowing with great speed and violence
m. Discuss the effects of avulsion. - a known or identifiable piece of land is detached from
one’s property and attached to another person’s property due to the effect of a stream of
water. As a general rule, the owner retains the title, but they must remove the transferred
portion within two years to retain ownership
n. Distinguish between avulsion and alluvium? - alluvium is the deposit of sediment itself
while avulsion is the event of the transfer
o. What is the effect of detachment without attachment? - the owner does not lose ownership
p. Discuss Article 460.- Trees uprooted and carried away by the current of the waters belong
to the owner of the land upon which they may be cast, if the owners do not claim them within
six months. If such owners claim them, they shall pay the expenses incurred in gathering
them or putting them in a safe place. - it’s their property, it’s their responsibility to claim and
handle them
r. Discuss Article 461 - River beds which are abandoned through the natural change in the
course of the waters ipso facto [by that fact] belong to the owners whose lands are occupied
by the new course in proportion to the area lost. However, the owners of the lands adjoining
the old bed shall have the right to acquire the same by paying the value thereof, which value
shall not exceed the value of the area occupied by the new bed.
s. What is the effect of change of river bed? t. What is the effect of change or abandonment? - the riverbed of public streams remain to
be public domain
u. What is the rationale of Article 461? - dried up riverbeds appear to provide additional
surface area on land, and so, there is a need for rules that govern who gets to own the land.
v. Discuss the right of riparian owners to the abandoned river bed.
v.1. Discuss Celestial v. Cachopero.
RACHEL C. CELESTIAL v. JESSE CACHOPERO
Petitioner Rachel Celestial is the sister of defendant Jesse Cachopero.
They had a dispute over a piece of land which was a dried-up creek, as Cachopero was
trying to obtain a Miscellaneous Sales Application (MSA) to the Department of Environment
and Natural Resources (DENR) alleging that he had been the owner of that land whereon he
built a house and other improvements. However, Celestial protests that she has preferential
right over the land because it is adjacent to and is the only outlet from her house. According
to the Bureau of Land, the land in dispute was a creek and is therefore outside the
commerce of man. The first MSA was denied by the Municipal Trial Court (MTC) prompting
Cachopero to obtain another MSA which was granted by the DENR. Due to conflicting
interests of the parties, the land in dispute must be sold in a public auction.
Cachopero then filed a petition for certiorari, prohibition and mandamus
against the DENR with the Regional Trial Court (RTC) but was denied. On appeal, the Court
of Appeals reversed and set aside the decision of the RTC.
Celestial contends that the RTC had no jurisdiction over Cachopero‘s petition
for certiorari as it is in the nature of an appeal falling within the jurisdiction of the CA and that
the Cachopero has not exhausted all administrative remedies.
ISSUE:
(a) Whether or not the RTC has jurisdiction over petition for certiorari, mandamus
and prohibition
(b) Whether or not the land in question owned by one of the parties when it is
classified as outside the commerce of man
HELD:
RTCs have concurrent jurisdiction with the CA and SC over original petitions for
certiorari, prohinition and mandamus.
Celestial has apparently confused the separate and distinct remedies of an appeal
(i.e. through a petition for review of a decision of a quasi judicial agency under Rule 43 of the
Rules of Court) and a special civil action for certiorari (i.e. through a petition for review under
Rule 65 of the Rules of Court).
Concomitantly, appellate jurisdiction is separate and distinct from the jurisdiction to
issue the prerogative writ of certiorari. An appellate jurisdiction refers to a process which is a
continuation of the original suit and not a commencement of a new action. In contrast, to
invoke a court’s jurisdiction to issue the writ of certiorari requires the commencement of a
new and original action therefore, independent of the proceedings which gave rise to the
questioned decision or order. As correctly held by the Court of Appeals, the RTCs have
concurrent jurisdiction with the Court of Appeals and the Supreme Court over original
petitions for certiorari, prohibition and mandamus under Section 21 of B.P. 129.
The Court finds no reason to disturb the Court of Appeals’ conclusion that the instant
case falls under the recognized exceptions to the rule on exhaustion of administrative
remedies, which provides “that such is inapplicable if (1) it should appear that an irreparable
injury or damage will be suffered by a party if he should await, before taking court action, the
final action of the administrative official concerned on the matter as a result of a patently
illegal order or (2) where appeal would not prove to be speedy and adequate remedy”.
This requirement of prior exhaustion of administrative remedies is not absolute, there
being instances when it may be dispensed with and judicial action may be validly resorted to
immediately, among which are: 1) when the question raised is purely legal; 2) when the
administrative body is in estoppel; 3) when the act complained of is patently illegal; 4) when
there is urgent need for judicial intervention; 5) when the claim involved is small; 6) when
irreparable damage will be suffered; 7) when there is no other plain, speedy and adequate
remedy; 8) when strong public interest is involved; and 9) in quo warranto proceedings.
A dried up creek is property of public dominion and not susceptible to acquisitive
prescription
As for Celestial‘s claim of ownership over the subject land, admittedly a dried-up bed
of the Salunayan Creek, based on (1) her alleged long term adverse possession and that of
her predecessor-in-interest, Marcelina Basadre, even prior to October 22, 1966, when she
purchased the adjoining property from the latter, and (2) the right of accession under Art.
370 of the Spanish Civil Code of 1889 and/or Article 461 of the Civil Code, the same must
fail.
Since property of public dominion is outside the commerce of man and not
susceptible to private appropriation and acquisitive prescription, the adverse possession
which may be the basis of a grant of title in the confirmation of an imperfect title refers only
to alienable or disposable portions of the public domain. It is only after the Government has
declared the land to be alienable and disposable agricultural land that the year of entry,
cultivation and exclusive and adverse possession can be counted for purposes of an
imperfect title.
w. Discuss Article 462 - Whenever a river, changing its course by natural causes, opens a
new bed through a private estate, this bed shall become of public dominion.
v. Discuss the effects of abandonment of the subsequent or new river bed.
w. Discuss Article 463 - Whenever the current of a river divides itself into branches, leaving a
piece of land or part thereof isolated, the owner of the land retains his ownership. He also
retains it if a portion of land is separated from the estate by the current.
x. Discuss the consequences of a river dividing into branches.
- Parts that can be isolated
- Some may be secured in their location
- Some may be separated and pushed away
y. Discuss Article 464 - Islands which may be formed on the seas within the jurisdiction of
the Philippines, on lakes, and on navigable or floatable rivers belong to the State.
z. What is a navigable or floatable river? - a river that is wide and deep enough for a boat to
travel along safely
aa. Discuss Article 465 - Islands which through successive accumulation of alluvial deposits
are formed in non-navigable and non-floatable rivers, belong to the owners of the margins or
banks nearest to each of them, or to the owners of both margins if the island is in the middle
of the river, in which case it shall be divided longitudinally in halves. If a single island thus
formed be more distant from one margin than from the other, the owner of the nearer margin
shall be the sole owner thereof.
bb. Who owns the islands formed in non-navigable and non-floatable rivers through
successive accumulation of alluvial deposits? - the islands formed in this manner belong to
whichever margin is closest
cc. Discuss Article 466 - Whenever two movable things belonging to different owners are,
without bad faith, united in such a way that they form a single object, the owner of the
principal thing acquires the accessory, indemnifying the former owner thereof for its value.
dd. What is adjunction or conjunction? - the union of one thing belonging to one person and
another thing belonging to another person and cannot be separated without causing damage
to the them.
ee. Who is the owner of the resulting object? - the owner of the principal thing
ff. Discuss the classes of adjunction or conjunction? Give an example each.
1. Inclusion/engraftment 2. Soldadura/soldering 3. Escritura/writing 4. Pintura/painting 5. Weaving/tejido gg. Discuss Article 467 - The principal thing, as between two things incorporated, is deemed
to be that to which the other has been united as an ornament, or for its use or perfection.
hh. Discuss the primary factor to determine the principal and the accessory - the principal is
the object that is perfected or ornamented by the accessory, much like how quite literally, a
christmas tree would be the primary and the accessory would be it’s decorations
ii. Discuss Article 468 -.If it cannot be determined by the rule given in the preceding article
which of the two things incorporated is the principal one, the thing of the greater value shall
be so considered, and as between two things of equal value, that of the greater volume. In
painting and sculpture, writings, printed matter, engraving and lithographs, the board, metal,
stone, canvas, paper or parchment shall be deemed the accessory thing.
kk. Discuss the secondary factors to determine principal and accessory - the object of
greater value shall be the principal, much like how when we are referring to rings with
gemstones on them, we do not give much thought to the metal ring itself. As for things with
equal value, we consider their volume. We can see an example of this when we are pouring
water. Between two containers with differing volumes of water in them, we do not pour the
greater amount of water into the container with less water. We top up the container with
more water.
ll. Discuss Article 469. Whenever the things united can be separated without injury, their
respective owners may demand their separation.
Nevertheless, in case the thing united for the use, embellishment or perfection of the other,
is much more precious than the principal thing, the owner of the former may demand its
separation, even though the thing to which it has been incorporated may suffer some injury.
mm. When is separation without injury allowed? nn. Discuss Article 470. Whenever the owner of the accessory thing has made the
incorporation in bad faith, he shall lose the thing incorporated and shall have the obligation
to indemnify the owner of the principal thing for the damages he may have suffered.
If the one who has acted in bad faith is the owner of the principal thing, the owner of the
accessory thing shall have a right to choose between the former paying him its value or that
the thing belonging to him be separated, even though for this purpose it be necessary to
destroy the principal thing; and in both cases, furthermore, there shall be indemnity for
damages.
If either one of the owners has made the incorporation with the knowledge and without the
objection of the other, their respective rights shall be determined as though both acted in
good faith. [essentially, this is like the landowner and builder/planter/sower]
oo. Discuss the consequences when an owner of the accessory acts in bad faith. - to
summarize what was stated in article 470, the owner of the accessory loses their thing and
will have to pay the owner of the principal for any damages incurred
pp. Discuss the consequences when an owner of the principal acts in bad faith - the owner
of the accessory may simply ask to be paid the value of the thing, separate their things
regardless of whether it will be damaged in the process, and shall also be asked to pay for
any damages
qq. Discuss Article 471. Whenever the owner of the material employed without his consent
has a right to an indemnity, he may demand that this consist in the delivery of a thing equal
in kind and value, and in all other respects, to that employed, or else in the price thereof,
according to expert appraisal.
rr. Discuss the ways of paying indemnity.
- Cash payment
- Repair
- replacement
ss. Discuss Article 472. If by the will of their owners two things of the same or different kinds
are mixed, or if the mixture occurs by chance, and in the latter case the things are not
separable without injury, each owner shall acquire a right proportional to the part belonging
to him, bearing in mind the value of the things mixed or confused.
tt. Discuss the classes of mixture.
-
Commixtion - when two substances are combined but can be separated
Confusion - when two substances are combined but cannot be separated (without
injury?)
uu. Discuss Article 473. If by the will of only one owner, but in good faith, two things of the
same or different kinds are mixed or confused, the rights of the owners shall be determined
by the provisions of the preceding article.
If the one who caused the mixture or confusion acted in bad faith, he shall lose the thing
belonging to him thus mixed or confused, besides being obliged to pay indemnity for the
damages caused to the owner of the other thing with which his own was mixed.
vv. What is the effect on ownership of the things mixed or confused when the mixture or
confusion occured with one owner acting in good faith? - if one owner acted in good faith,
both parties shall be entitled to a right proportional to how much of the component parts
belonged to them
ww. Discuss the sanctions against an owner who mixed the things in bad faith. - besides
being made to pay indemnity, the owner who mixed the things in bad faith will lose the thing
they mixed.
xx. Discuss Article 474. One who in good faith employs the material of another in whole or in
part in order to make a thing of a different kind, shall appropriate the thing thus transformed
as his own, indemnifying the owner of the material for its value.
If the material is more precious than the transformed thing or is of more value, its owner
may, at his option, appropriate the new thing to himself, after first paying indemnity for the
value of the work, or demand indemnity for the material.
If in the making of the thing bad faith intervened, the owner of the material shall have the
right to appropriate the work to himself without paying anything to the maker, or to demand
of the latter that he indemnify him for the value of the material and the damages he may
have suffered. However, the owner of the material cannot appropriate the work in case the
value of the latter, for artistic or scientific reasons, is considerably more than that of the
material.
yy. What is specificatio? A giving of form to materials; the process of making something new
from existing property. A mode of acquisition by which a person made something new from
existing material
zz. Discuss the rules in specificatio
-
If one uses the material of another to make a new thing, they can appropriate the
thing as their own, but not without compensating the owner of the material
If the material is of greater value than the new thing, the owner of the material may
appropriate the new thing for themselves, paying the other party indemnity for the
work or demanding indemnity for the material used
aaa. What is sentimental value? is the value of an object that is derived from personal or
emotional association rather than its material worth. It is the inflated opinion value based on
what the sellers want. The fair market value differs from sentimental value, as both parties to
a transaction must agree to its worth.
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a. Discuss the concept of quieting of title. What is its justification?
An action of quieting of title is meant to put an end to vexatious (denoting an action or the
bringer of an action that is brought without sufficient grounds for winning, purely to cause
annoyance to the defendant.) litigation in respect to the property involved. It’s justification is
that it must prevent litigation, protect the true title and possession, and the real interest of
both of the parties.
REASONS FOR ALLOWING THE ACTION
1.
2.
3.
The prevention of litigation
The protection of the true title and possession
The promotion of right and justice
b. What is the nature of the action.
Quasi in rem - Of note, in a quasi in rem case the court may lack personal jurisdiction over
the defendant, but it has jurisdiction over the defendant's property.
c. Discuss Article 476.
Whenever there is a cloud on title to real property or any interest therein, by reason of any
instrument, record, claim, encumbrance or proceeding which is apparently valid or effective
but is in truth and in fact invalid, ineffective, voidable, or unenforceable, and may be
prejudicial to said title, an action may be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon title to real property
or any interest therein.
d. What are the two kinds of actions contemplated in Article 476?
Remedial
Preventive
OR
Quieting of Title
Removal of Cloud
e. What is a cloud on a title? How does it emerge?
A cloud on title is an outstanding instrument, record, claim, encumbrance or proceeding
which is actually invalid or inoperative, but which may nevertheless impair or affect
injuriously the title to property. The matter complained of must have a prima facie
appearance of validity or legal efficacy.
f. What is the test to determine whether a cloud exists?
If the contract itself is invalid, then there is no cloud. But, if there is a need to present
evidence to prove that it is invalid, then there is a cloud on the title.
g. What are the requisites for the action?
1. Title or interest
2. Defendant is bent on creating a cloud
3. Unless the defendant is restrained or stopped, the title of the plaintiff will be
prejudiced or adversely affected
g.1. Discuss Mananquil v. Moico.
G.R. No. 180076 : November 20, 2012
FACTS:
Lots 18 and 19 in Dagat-Dagatan, Navotas form part of the land previously expropriated by
the National Housing Authority (NHA). Lots 18 and 19 were awarded to spouses Iluminardo
and Prescilla Mananquil under a Conditional Contract to Sell.
After the death of the spouses in 1991, it turned out that Prescilla had a child by a previous
marriagenamely Eulogio Francisco Maypa (Eulogio). Iluminardos supposed heirs (Mananquil
heirs) his brothers and sisters and herein petitioners Dionisio and Estanislao Mananquil
(Estanislao), Laudencia Mananquil-Villamor (Laudencia), and Dianita Mananquil-Rabino
(Dianita) executed an Extrajudicial Settlement Among Heirs and adjudicated ownership over
Lots 18 and 19 in favor of Dianita. They took possession of Lots 18 and 19 and leased them
out to third parties.
Sometime later, the Mananquil heirs discovered that in 1997, Eulogio and two others, on the
claim that they are surviving heirs of Iluminardo and Prescilla, had executed an Extrajudicial
Settlement of Estate with Waiver of Rights and Sale, and a Deed of Absolute Sale in favor of
Roberto Moico (Moico). Moico began evicting the Mananquils tenants. Thus, the Mananquils
filed a case for quieting of title.
The RTC ruled in favor of the Mananquils. On appeal, the CA reversed the RTC.
The Mananquils argue that since they are the legal heirs of Iluminardo Mananquil, then they
possess the requisite legal or equitable title or interest in Lots 18 and 19, which thus permits
them to file an action to quiet title; and whatever rights Iluminardo had over the lots were
transmitted to them from the moment of his death, per Article 777 of the Civil Code.
ISSUE: Whether or not the action to quiet title should prosper?
HELD: The petition lacks merit.
CIVIL LAW: quieting of title
An action for quieting of title is essentially a common law remedy grounded on equity. The
competent court is tasked to determine the respective rights of the complainant and other
claimants, not only to place things in their proper place, to make the one who has no rights
to said immovable respect and not disturb the other, but also for the benefit of both, so that
he who has the right would see every cloud of doubt over the property dissipated, and he
could afterwards without fear introduce the improvements he may desire, to use, and even to
abuse the property as he deems best. But for an action to quiet title to prosper, two
indispensable requisites must concur, namely: (1) the plaintiff or complainant has a legal or
an equitable title to or interest in the real property subject of the action; and (2) the deed,
claim, encumbrance, or proceeding claimed to be casting cloud on his title must be shown to
be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy.
From the evidence adduced below, it appears that the petitioners have failed to show their
qualifications or right to succeed Iluminardo in his rights under the NHA program/project.
They failed to present any title, award, grant, document or certification from the NHA or
proper government agency which would show that Iluminardo and Prescilla have become
the registered owners/beneficiaries/ awardees of Lots 18 and 19, or that petitioners are
qualified successors or beneficiaries under the Dagat-Dagatan program/project, taking over
Iluminardos rights after his death.
Petitioners should have shown, to the satisfaction of the courts that under the NHA program
project governing the grant of Lots 18 and 19, they are entitled and qualified to succeed or
substitute for Iluminardo in his rights upon his death.
DENIED.
g.2. Discuss Vda. De Aviles v. CA and Aviles.
FACTS:
Eduardo Aviles, the predecessor of the petitioners is the bother of defendant Camilo. They
inherited their lands from their parents and have agreed to subdivide the same amongst
themselves. The area alloted (sic) to Eduardo Aviles is 16,111 square meters more or less,
to Anastacio Aviles is 16,214 square meters more or less, while the area alloted to
defendant Camilo Aviles is 14,470 square meters more or less.
Defendant’s land composed of the riceland portion of his land is 13,290 square meters, the
fishpond portion is 500 square meters and the residential portion is 680 square meters, or a
total of 14,470 square meters.
The Petitioners claim that they are the owners of the fish pond which they claim is within
their area. Defendant Camilo Aviles asserted a color of title over the northern portion of the
property with an area of approximately 1,200 square meters by constructing a bamboo fence
(thereon) and moving the earthen dikes, thereby molesting and disturbing the peaceful
possession of the plaintiffs over said portion.
Petitioners say that the fences were created to unduly encroach to their property but the
defendant said that he merely reconstructed the same.
Petitioners brought an action to quiet title but were denied thus this case.
ISSUE: Whether or not Petitioners filed the right action
RULING:
No, Petitioners filed the wrong action. This is obviously a boundary dispute and as such the
action must fail.
Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason
of any instrument, record, claim, encumbrance or proceeding which is apparently valid or
effective but is, in truth and in fact, invalid, ineffective, voidable, or unenforceable, and may
be prejudicial to said title, an action may be brought to remove such cloud or to quiet the
title.
An action may also be brought to prevent a cloud from being cast upon a title to real property
or any interest therein.
Petitioners fail to point out any any instrument, record, claim, encumbrance or proceeding
that could have been a “cloud” to their title. In fact, both plaintiffs and defendant admitted the
existence of the agreement of partition dated June 8, 1957 and in accordance therewith, a
fixed area was allotted to them and that the only controversy is whether these lands were
properly measured.
A special civil action for quieting of title is not the proper remedy for settling a boundary
dispute, and that petitioners should have instituted an ejectment suit instead. An action for
forcible entry, whenever warranted by the period prescribed in Rule 70, or for recovery of
possession de facto, also within the prescribed period, may be availed of by the petitioners,
in which proceeding the boundary dispute may be fully threshed out.
h. May an action for ejectment be maintained even if there is a pending action for quieting of
title involving the same property?
Yes
i. Discuss Article 477.
The plaintiff must have legal or equitable title to, or interest in the real property which is the
subject matter of the action. He need not be in possession of said property.
j. Why must plaintiff have legal or equitable title to or interest in the subject real property to
be able to maintain an action for quieting of title?
It is because a legal remedy is ordinarily available to one because of such possession.
k. Discuss Article 478.
There may also be an action to quiet title or remove a cloud therefrom when the contract,
instrument or other obligation has been extinguished or has terminated, or has been barred
by extinctive prescription.
l. Discuss Article 479.
The plaintiff must return to the defendant all benefits he may have received from the latter, or
reimburse him for expenses that may have redounded to the plaintiff's benefit.
m. Why is there a need for restoration of benefits?
“He who seeks equity must do equity.” If person A benefited from something before the act
of quieting the title, person B deserves to be reimbursed of such benefits to keep things fair.
n. Read Article 480 to 481.
Article 480. The principles of the general law on the quieting of title are hereby adopted
insofar as they are not in conflict with this Code.
Article 481. The procedure for the quieting of title or the removal of a cloud therefrom shall
be governed by such rules of court as the Supreme Court shall promulgate.
o. What is the obligation of an owner of a ruinous building under Article 482?
If a building, wall, column, or any other construction is in danger of falling, the owner shall be
obliged to demolish it or to execute the necessary work in order to prevent it from falling.
If the proprietor does not comply with this obligation, the administrative authorities may order
the demolition of the structure at the expense of the owner, or take measures to insure
public safety.
p. What is the obligation of the owner of a large tree in danger falling under Article 483?
The owner of the tree shall be obliged to fell and remove it, and if they don’t, it shall be done
at their expense by order of the administrative authorities
r. Discuss Article 484.
There is co-ownership whenever the ownership of an undivided thing or right belongs to
different persons.
In default of contracts, or of special provisions, co-ownership shall be governed by the
provisions of this Title.
s. Discuss the concept of co-ownership.
- Straightforward, very clear. One thing, more than one owner. Not distinct from
ownership, but rather, a manifestation of ownership
t. What are the requisites of co-ownership?
- Plurality of subjects
- Unity of or material indivision
- The recognition of ideal shares which determines the rights and obligations of the coowners
u. How is a co-ownership established?
- The Law
- Contracts
- Succession
- Fortuitous event or chance
- Occupancy
v. Distinguish a co-ownership from conjugal partnership of gains.
In a conjugal partnership of gains, properties owned by each side during their singlehood
remain to be theirs, and only those acquired after they get married count as conjugal
property. The property relations of conjugal partnership of gains applies only when the future
spouses agree to it in the marriage settlement, if any.
Co-ownership in and of itself simply refers to one thing being owned by more than one
person
w. What is the presumption on the extent of ownership of a co-owner under Article 485?
It is presumed that each co-owner will receive equal portions unless the contrary is provided.
w.1. Discuss Tan v. Rodriguez.
Rodriguez siblings want to take out half of their deceased father’s share from a joint account
he had with anita ong tan. However, anita ong tan states that she essentially owned all of it
because the whole amount deposited in the account was hers, backed up by testimony and
evidence, and that after the opening of the account and the depositing of the money by anita
ong tan, no other transaction was made
Basically, although presumed that co-owners will receive equal portions, anita ong tan was
available to prove the contrary
v. Discuss Article 486.
Each co-owner may use the thing owned in common, provided he does so in accordance
with the purpose for which it is intended and in such a way as not to injure the interest of the
co-ownership or prevent the other co-owners from using it according to their rights. The
purpose of the co-ownership may be changed by agreement, express or implied.
w. Discuss the two restrictions on the right of a co-owner to use the property owned in
common.
1. Must be used without prejudice to the interests of the co ownership
2. Must be used without preventing the other co owners from making use thereof
according to their own rights
x. Read Article 487.
Any one of the co-owners may bring an action in ejectment. (a lawsuit brought to remove a
party who is occupying real property. This is not the same as an unlawful detainer (eviction)
suit against a non-paying or unsatisfactory tenant. It is against someone who has tried to
claim title to the property)
y. Discuss Article 488.
Each co-owner shall have a right to compel the other co-owners to contribute to the
expenses of preservation of the thing or right owned in common and to the taxes. Any one of
the latter may exempt himself from this obligation by renouncing so much of his undivided
interest as may be equivalent to his share of the expenses and taxes. No such waiver shall
be made if it is prejudicial to the co-ownership.
z. What is the remedy of the co-owner who refuses to contribute his share under Article 488?
They may renounce so much of their undivided interests equivalent to their shares of the
expenses for the preservation of taxes. They are allowed to partially or even fully renounce
their interests, but they won’t be allowed to do so if it spelled the doom of the co-ownership
aa. Discuss Article 489.
Repairs for preservation may be made at the will of one of the co-owners, but he must, if
practicable, first notify his co-owners of the necessity for such repairs. Expenses to improve
or embellish the thing shall be decided upon by a majority as determined in article 492.
bb. What are considered as repairs necessary for preservation?
Whatever may be deemed necessary as long as the co-owner notifies the others of the
repairs
cc. Discuss the rules under Article 490.
Whenever the different stories of a house belong to different owners, if the titles of
ownership do not specify the terms under which they should contribute to the necessary
expenses and there exists no agreement on the subject, the following rules shall be
observed:
(1) The main and party walls, the roof and the other things used in common, shall be
preserved at the expense of all the owners in proportion to the value of the story belonging
to each;
(2) Each owner shall bear the cost of maintaining the floor of his story; the floor of the
entrance, front door, common yard and sanitary works common to all, shall be maintained at
the expense of all the owners pro rata;
(3) The stairs from the entrance to the first story shall be maintained at the expense of all the
owners pro rata (referring to a share to be received or an amount to be paid based on the
fractional share of ownership, responsibility or time used.), with the exception of the owner of
the ground floor; the stairs from the first to the second story shall be preserved at the
expense of all, except the owner of the ground floor and the owner of the first story; and so
on successively.
dd. Discuss Article 491.
None of the co-owners shall, without the consent of the others, make alterations in the thing
owned in common, even though benefits for all would result therefrom. However, if the
withholding of the consent by one or more of the co-owners is clearly prejudicial to the
common interest, the courts may afford adequate relief.
ee. What is an alteration?
A change in the material state of the thing or even a change in the use of the thing that was
not initially agreed upon
ff. What is the remedy against unreasonable holding of consent?
Whatever is useful to the co-ownership shall remain, but everything else that was not agreed
upon shall be demolished by the one who pushed their will without compensation
gg. Discuss the rules under Article 492.
For the administration and better enjoyment of the thing owned in common, the resolutions
of the majority of the co-owners shall be binding.
There shall be no majority unless the resolution is approved by the co-owners who represent
the controlling interest in the object of the co-ownership.
Should there be no majority, or should the resolution of the majority be seriously prejudicial
to those interested in the property owned in common, the court, at the instance of an
interested party, shall order such measures as it may deem proper, including the
appointment of an administrator.
Whenever a part of the thing belongs exclusively to one of the co-owners, and the remainder
is owned in common, the preceding provision shall apply only to the part owned in common.
hh. Discuss the rights of a co-owner on his ideal share under Article 493.
Each co-owner shall have the full ownership of his part and of the fruits and benefits
pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except when personal rights are involved. But the effect of
the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion
which may be allotted to him in the division upon the termination of the co-ownership.
hh1. Discuss Cuizon v. Remoto.
Petitioners-spouses Encarnacion L. Cuizon and Salvador Cuizon rely on Transfer Certificate
of Title (TCT) No. RT-3121 in the name of Encarnacion L. Cuizon, married to Salvador
Cuizon, issued by the Registry of Deeds of Agusan del Norte on March 15, 1984,[1]
pursuant to a notarized Extra-Judicial Settlement with Sale dated August 3, 1983 (1983
Extra-Judicial Settlement with Sale) executed by the heirs of Placida Tabada-Lambo
(Placida), wherein they adjudicated unto themselves the one-fourth share of Placida, and, at
the same time, sold said portion to their co-heir, Encarnacion L. Cuizon.[2]
On the other hand, respondents have in their favor a notarized Deed of Sale of Real
Property dated September 19, 1968, (1968 Deed of Sale) involving a portion of the same
property covered by TCT No. RT-183, measuring 4,300 square meters, executed by Placida
in favor of Angel Remoto (Angel), husband of respondent Mercedes C. Remoto, and father
of the other respondents, Leonida R. Meynard, Celerina R. Rosales and Remedios C.
Remoto.[4]
RTC rendered a decision in favour of respondents which was affirmed by the Court of
Appeals.
ISSUE:
Who has a better right to the property in dispute?
RULING:
As correctly ruled by both the trial court and the CA, the 1968 Deed of Sale executed by
Placida in favor of Angel should prevail over the 1983 Extra-Judicial Settlement with Sale
made by the heirs of Placida in favor of petitioners-spouses Cuizon. Prior tempore, potior
jure. It simply means, He who is first in time is preferred in right. The only essential requisite
of this rule is priority in time, and the only one who can invoke this is the first vendee.[14]
Records bear the fact that when Placida sold her one-fourth portion of the property covered
by TCT No. RT-183 in 1968, the 1983 Extra-Judicial Settlement with Sale was still inexistent,
and more importantly, said portion was yet to be transferred by succession to Placidas heirs.
The records also show that after Placida sold her portion to Angel, the latter immediately
took possession of the same. Applying the principle of priority in time, it is clear that Angel,
and consequently his heirs, the respondents herein, have a superior right to the property.
ii. Discuss Article 494.
No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at
any time the partition of the thing owned in common, insofar as his share is concerned.
Nevertheless, an agreement to keep the thing undivided for a certain period of time, not
exceeding ten years, shall be valid. This term may be extended by a new agreement.
A donor or testator may prohibit partition for a period which shall not exceed twenty years.
Neither shall there be any partition when it is prohibited by law.
No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs
so long as he expressly or impliedly recognizes the co-ownership.
kk. Why is perpetual co-ownership against public policy?
It is because it is a cause of conflicts in management and possession among the co-owners,
hence, no co-owner is obliged to remain in the co-ownership indefinitely
ll. Discuss Article 495.
Notwithstanding the provisions of the preceding article, the co-owners cannot demand a
physical division of the thing owned in common, when to do so would render it unserviceable
for the use for which it is intended. But the co-ownership may be terminated in accordance
with article 498.
mm. Discuss Article 496.
Partition may be made by agreement between the parties or by judicial proceedings.
Partition shall be governed by the Rules of Court insofar as they are consistent with this
Code.
nn. Define partition.
A partition is an act, by a court order or otherwise, to divide up a concurrent estate into
separate portions representing the proportionate interests of the owners of property so that
they may enjoy and possess it separately
oo. How is partition effected?
An agreement of partition may be made orally or in writing.
oo1. Discuss Vda. De Espina v. Abaya.
pp. Discuss Article 497.
The creditors or assignees of the co-owners may take part in the division of the thing owned
in common and object to its being effected without their concurrence. But they cannot
impugn any partition already executed, unless there has been fraud, or in case it was made
notwithstanding a formal opposition presented to prevent it, without prejudice to the right of
the debtor or assignor to maintain its validity.
qq. Discuss Article 498.
Whenever the thing is essentially indivisible and the co-owners cannot agree that it be
allotted to one of them who shall indemnify the others, it shall be sold and its proceeds
distributed.
rr. Discuss Articles 499.
The partition of a thing owned in common shall not prejudice third persons, who shall retain
the rights of mortgage, servitude or any other real rights belonging to them before the
division was made. Personal rights pertaining to third persons against the co-ownership shall
also remain in force, notwithstanding the partition.
ss. What is the effect of partition on subsisting rights of third persons?
They shall retain their rights even after the partition of the property
tt. Read Article 500.
Upon partition, there shall be a mutual accounting for benefits received and reimbursements
for expenses made. Likewise, each co-owner shall pay for damages caused by reason of his
negligence or fraud.
uu. Discuss the obligations of co-owners after partition under Article 501.
Every co-owner shall, after partition, be liable for defects of title and quality of the portion
assigned to each of the other co-owners.
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a. Discuss Article 523.
Possession is the holding of a thing or the enjoyment of a right.
b. What is the meaning of possession?
Possession is the holding of a thing or the enjoyment of a right. In general, it is the holding of
a thing or of a right, whether by material occupation or by the fact that the thing or the right is
subjected to the action of our will.
c. What are the kinds of possession?
c.1. according to the name used as to its exercise. - in one’s name or in another’s
name
c.2. according to the concept of possession. - in the concept of a holder and in the
concept of an owner
c.3. according to the condition of the mind. - in good faith or bad faith
d. Distinguish between right to possession and right of possession.
Right to possession (jus posidendi) - a person’s right to own things
Right of possession (jus posisionis) - a person’s right to possess over a specific thing
e. What are the essential elements of possession?
- Occupancy, apprehension, or taking,
- Intent to possess
OR
1. There must be holding or control of a thing or right
2. There must be a deliberate intention to possess or animus possidendi
3. The possession must be by virtue of one’s own right
f. Why does a possessor of a thing need not be its owner?
Because possession may be exercised in one’s own name or in that of a holder. A person
may be allowed to possess an object without being its owner (art 524). The rights of
possession may be exercised through agents, either necessary or voluntary as long as it is
approved of by the owner
g. Discuss Sabio v. The International Corporate Bank, Inc.
h. What are the classifications or degrees of possession? Discuss each.
-
-
Mere holding, or possession without title whatsoever, and in violation of the right of
the owner. (both the possessor and the public know that the possession is wrongful)
[EG: THEFT, LAND USURPING]
Possession with juridical title, but not that of ownership (tenant, depositary, or a
pledgee)
Possession with a just title, or a title sufficient to transfer ownership, but not from the
true owner (the possession of a vendee of a piece of land from one who pretends to
be the owner but is in fact not the owner thereof)
i. Discuss Article 524.
The possession of things or rights may be had in one of two concepts: either in the concept
of owner, or in that of the holder of the thing or right to keep or enjoy it, the ownership
pertaining to another person.
j. Distinguish between direct possession and indirect possession.
Direct possession - the thing is possessed directly by the owner
Indirect possession - the thing is possessed by an agent of the owner
k. Discuss Article 525.
The possession of things or rights may be had in one of two concepts: either in the concept
of owner, or in that of the holder of the thing or right to keep or enjoy it, the ownership
pertaining to another person.
l. Discuss Distinguish between possession in the concept of a holder and possession in the
concept of an owner.
Possession of holder - one who possesses as a mere holder, acknowledges that someone
else owns what they are holding, whether that acknowledgement is right or not.
Possession of an owner - a possessor in concept of owner may be the owner himself or one
who claims to be so. If one is convinced or believes that they acquired the thing by just title,
they are a possessor in the concept of owner.
L.1. Discuss Carlos v. Republic of the Philippines
On December 19, 2001, petitioner Maria Carlos, represented by her daughter,
Teresita Carlos Victoria, filed an application for registration and confirmation of title over a
parcel of land with an area of 3,975 square meters located at Pusawan, Ususan, Taguig,
Metro Manila. She alleged that she openly, exclusively and notoriously possessed and
occupied since July 12, 1945 or earlier under a bona fide claim of ownership and even
brought documentary and testimonial evidence which corroborated with her claim.
Teresita Carlos Victoria also stated that in 1996, her mother Maria Carlos sold the
land to Ususan Development Corporation and that they were securing the application for
registration and confirmation of title to fulfill their commitment to the corporation to deliver the
certificate of title. Their application was granted.
However as early as 1996, possession and occupation of the land in question
pertains not to the applicant but to Ususan Development Corporation, thus it can be said that
the applicant has no registrable title over the land in question.
Which brings up the issue of whether or not they could file the application for
registration and confirmation of title
In the end, the court ruled that they were not in actual possession because they sold
the land to Ususan Development Corporation in 1996, therefore, they cannot file for the
application for registration and confirmation of title.
m. Distinguish between possession in good faith and possession in the concept of an owner.
A possessor in good faith is unaware of the existence of a flaw in their acquisition of
the thing. On the other hand, possession in the concept of an owner may or may not be
aware of a flaw, but they exercise acts of ownership anyway.
n. Discuss the effect of good faith or bad faith in acquisitive prescription resulting from
possession in the concept of an owner. Read related provisions of the Civil Code (Arts.
1106, 1117, 1118, and 1137) on acquisitive prescription
Need good faith to give rise to acquisitive prescription
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a. Memorize Article 725.
Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in
favor of another, who accepts it.
b. What are the essential elements of a donation
1. Reduction in the patrimony of the donor
2. Increase in the patrimony of the donee
3. Intent to do an act of liberality or animus donandi - important kasi kung walang intent to
donate, edi di siya gift. Baka ibang rules ang ma-apply
Note:
Patrimony = Property
Animus Donandi = “The intention of making a gift”.
c. What are the requisites of consent in donation?
-
It should be intelligent or with an exact notion of the matter to which it refers;
-
It should be free;
-
It should be spontaneous.
d. What is the significance of acceptance?
Acceptance is necessary to make a donation complete. If it is not accepted, then the
donation fails. One is also not compelled to accept donations.
e. Discuss the classifications of donations.
e.1. From the viewpoint of effectivity:
e.1.a. Donations mortis causa - takes effect after the death of the donor
e.1.b. Donations inter vivos - takes effect during the lifetime of the donor
e.2. From the point of view of object
e.2.a. Donations of real property - buildings, houses, fishponds, factory
e.2.b. Donations of personal property - jewelry, flowers, kid’s toys
e.2.c. Donations of alienable rights - falls under transfer of rights of ^^^?
e.3. From the viewpoint of its relation to marriage
e.3.a. Donation propter nuptias - Unlike ordinary donations, donations propter
nuptias or donations by reason of marriage are those "made before its celebration, in
consideration of the same and in favor of one or both of the future spouses." The
distinction is crucial because the two classes of donations are not governed by
exactly the same rules, especially as regards the formal essential requisites.
e.3.b. Ordinary donation - everything else???
f. Discuss the kinds of donations inter vivos.
f.1. Simple - one is not subject to any condition
f.2. Remuneratory - remunerates the past services of the donee, which don’t
constitute demandable debts against the donor
f.3. Conditional - quite self explanatory. A donation will be given after a certain
condition is met, or an event occurs. Required that the condition is very reasonably
attainable
f.4. Modal - donation is not worth the condition
f.5. Onerous - one is subject to burdens, charges, or future services equal to or more
in value than the thing donated
g. Discuss Article 726.
When a person gives to another a thing or right on account of the latter's merits or of the
services rendered by him to the donor, provided they do not constitute a demandable debt,
or when the gift imposes upon the donee a burden which is less than the value of the thing
given, there is also a donation.
h. Discuss the effect of an illegal or impossible condition in simple and remunaratory
donations? (ART 727)
Impossible conditions and those contrary to law or good customs shall be considered as not
imposed and shall in no manner prejudice the heir, even if the testator should otherwise
provide
i. What is an impossible condition?
Illegal or impossible conditions in simple and remuneratory donations shall be considered as
not imposed.
j. What law governs donations mortis causa? (Art. 728)
Donations which are to take effect upon the death of the donor partake of the nature of
testamentary provisions, and shall be governed by the rules established in the Title on
Succession.
k. What are the characteristics of a donation mortis causa?
- Takes effect after the death of the donor
- Must follow the formalities of wills and codicils
- Can be revoked anytime and for any reason while the donor is still alive
- In case the legitime is impaired, donations mortis causa are reduced ahead of
donations inter vivos, the latter being preferred
- The right of disposition isn’t transferred to the donee while the donor is still alive
- Acceptance by donee mortis causa can be only be done upon donor’s death
l. Discuss Article 729.
When the donor intends that the donation shall take effect during the lifetime of the donor,
though the property shall not be delivered till after the donor's death, this shall be a donation
inter vivos. The fruits of the property from the time of the acceptance of the donation, shall
pertain to the donee, unless the donor provides otherwise.
m. Distinguish between a donation mortis causa and a donation inter vivos.
INTER VIVOS
●
MORTIS CAUSA
Takes effect during lifetime of
●
Takes effect after the death of the donor
donor Must follow the
●
Must follow the formalities of wills and
formalities of donations
●
Cannot be revoked except for
codicils
●
grounds provided for by law
●
In case of impairment of the
reason while the donor is still alive
●
donations mortis causa are reduced
are preferred to donations
ahead of donations inter vivos, the latter
The right of disposition is
being preferred
●
completely transferred to the
donee
●
In case the legitime is impaired,
legitime, donations inter vivos
mortis causa
●
Can be revoked anytime and for any
Acceptance by donee must be
during lifetime of donor
The right of disposition isn’t transferred to
the donee while the donor is still alive
●
Acceptance by donee mortis causa can
be only be done upon donor’s death
n. Discuss the tests to determine if whether a donation is mortis causa or inter vivos.
Inter Vivos
-
If the act is one of disposition, and effective independently of the donor’s death, it is a
donation inter vivos.
-
If what is reserved is only the usufruct, it is donation inter vivos.
-
The donation is effective during the lifetime of the donor, but the delivery of the
possession of the property shall be after the death of the donor. Thus it is a donation
inter vivos.
Mortis Causa
-
If it is one of disposition, but its effectivity is dependent upon the death of the donor, it
is a mortis causa donation.
-
If the ownership of property is reserved to the donor during his lifetime, donation is
mortis causa.
-
When the donor reserved the right to revoke the donation, it is mortis causa.
o. What is the rule if there is doubt on the nature of a donation?
If there is doubt on the nature of the donation, the doubt should be resolved in favor of
donation inter vivos, rather than mortis causa to avoid uncertainty as to the ownership of the
property subject to the deed of donation.
o.1. Discuss Del Rosario v. Ferrer.
“He could not give what he no longer had”
Spouses Leopoldo and Guadalupe Gonzales executed a document entitled “Donation Mortis
Causa” in favor of their two children, Asuncion and Emiliano, and their granddaughter,
Jarabini del Rosario covering the spouses’ 126-square meter lot and the house on it in equal
shares. After the death of Guadalupe, The donor husband then executed a deed of
assignment of his interest and property to his daughter Asuncion.
Jarabini would then file a petition for probate of the deed.
Leopoldo’s assignment of his rights and interests in the property to her. After trial, the RTC
rendered a decision finding that the donation was in fact one made inter vivos. On
Asnuncion’s appeal to the CA, the latter rendered a decision reversing that of the RTC. It
held that Jarabini cannot, through her petition for the probate of the deed of donation mortis
causa , collaterally attack Leopoldo’s deed of assignment in Asuncion’s favor.
Issue: Whether or not the spouses Leopoldo and Guadalupe’s donation was a donation
mortis causa.
Held: Yes. It was a donation inter vivos. The fact that the document in question was
denominated as a donation mortis causa is not controlling if a donation by its terms is inter
vivos. In Austria Magat v. Court of Appeals, the Court held that “irrevocability” is a quality
absolutely incompatible with the idea of conveyances mortis causa, where “revocability”is
precisely the essence of the act. In the present case, the donors plainly said that it is”our will
that this Donation Mortis Causa shall be irrevocable and shall be respected by the surviving
spouse.” The intent to make the donation irrevocable becomes even clearer by the proviso
that a surviving donor shall respect the irrevocability of the donation. Thus, given that the
donation was indeed inter vivos, Leopoldo’s subsequent assignment of his rights and
interests in the property to Asuncion is void.
p. What is the effect of a suspensive condition taking place beyond the natural life of the
donor on the donation? (Art. 730)
The fixing of an event or the imposition of a suspensive condition, which may take place
beyond the natural expectation of life of the donor, does not destroy the nature of the act as
a donation inter vivos, unless a contrary intention appears.
(A suspensive condition is a condition which suspends rights and obligations (or
the validity of the entire contract) until a certain future event occurs. Upon the
occurrence of the event, the suspended part of the contract (or indeed the entire
contract) is brought to life)
r. What is the effect of a resolutory condition of the donor’s survival on the donation? (Art.
731)
When a person donates something, subject to the resolutory condition of the donor's survival,
there is a donation inter vivos.
(Resolutory condition refers to a condition whereby, upon fulfillment terminates an
already enforceable obligation. It also entitles the parties to be resorted to their
original positions.)
s. Distinguish between a suspensive condition and a resolutory condition?
Suspensive condition suspends rights and obligations, or parts of such rights and
obligations. until a certain future event occurs. Upon the occurrence of the event, the
suspended obligation or part/s of obligation shall be in effect once more.
Resolutory condition, on the other hand, terminates an already enforceable obligation.
t. Discuss Article 732.
Donations which are to take effect inter vivos shall be governed by the general provisions on
contracts and obligations in all that is not determined in this Title.
u. Discuss onerous donation and its kinds. (Article 733)
Donations with an onerous cause shall be governed by the rules on contracts and
remuneratory donations by the provisions of the present Title as regards that portion which
exceeds the value of the burden imposed.
Onerous Donation/s
● This is a donation given for which the donor received a valuable consideration
which is the equivalent of the property donated.
● These kinds of donations are essentially contracts in themselves, that is why,
they are governed by the rules on contracts.
Kinds Of Onerous Donations
Note: Generally, every donation which has a burden is a onerous donation.
1. Totally Onerous - The burden is equal to or greater than the value of the
property donated.
2. Partially Onerous - The burden is lesser than the value of donation. Under this
class will fall the modal donations where a presentation is imposed upon the
donee.
v. When is the moment of perfection of a donation? (Art. 734).
The donation is perfected from the moment the donor knows of the acceptance by the
donee.
w. Discuss the qualifications of a donor? (Article 735).
All persons who may contract and dispose of their property may make a donation.
(capacity to enter contracts and capacity to dispose of property. In short, full civil capacity)
x. Dicuss Article 736.
Guardians and trustees cannot donate the property entrusted to them. Concept of holder
lang sila
y. Why are guardians and trustees prohibited from donating trust property?
Because they are not the true owners of the property, thus they cannot donate
z. When does implied trust arise in a donation?
Accdg to article 1441 of the civil code, implied trusts come into being by operation of law.
Article 1449 --vvv-- There is an implied trust when a donation is made to a person but it appears that
although the legal estate is transmitted to the donee, he nevertheless is either to
have no beneficial interest or only a part thereof.
aa. When is a determining moment for a donor’s capacity? (Article 737)
The donor's capacity shall be determined as of the time of the making of the donation.
bb. Who may accept donations? (Article 738)
All those who are not specially disqualified by law there for may accept donations.
Disqualification does not include circumstances like minority and imbecility, but people who
are specifically barred by the law.
cc. Memorize and explain the void donations under Article 739.
(1) Those made between persons who were guilty of adultery or concubinage at the
time of the donation;
(2) Those made between persons found guilty of the same criminal offense, in
consideration thereof;
(3) Those made to a public officer or his wife, descendants and ascendants, by
reason of his office.
In the case referred to in No. 1, the action for declaration of nullity may be brought by
the spouse of the donor or donee; and the guilt of the donor and donee may be proved
by preponderance of evidence in the same action.
dd. Discuss Article 740.
Incapacity to succeed by will shall be applicable to donations inter vivos.
ee. May minors and others who are incapcitated allowed to enter into a contract become
donees? Who will accept on their behalf? (Article 741)
Minors and others who cannot enter into a contract may become donees but acceptance
shall be done through their parents or legal representatives.
ff. Discuss Article 742.
Donations made to conceived and unborn children may be accepted by those persons who
would legally represent them if they were already born.
gg. Who are the incapacitated persons referred to in Article 743?
Donations made to incapacitated persons shall be void, though simulated under the guise of
another contract or through a person who is interposed.
Incapacitated persons are people who do not have full legal capacity, like minors or adults
who cannot financially manage themselves.
hh. Why are the transfers to incapacitated persons void under Article 743?
Because the incapacitated persons are lacking the capability to give proper consent and are
incapable of acting on behalf of themselves
ii. When is double donation present? (Article 744)
Donations of the same thing to two or more different donees shall be governed by the
provisions concerning the sale of the same thing to two or more different persons.
kk. What are the rules to be followed in case of double donation?
Article 1544
If the same thing should have been sold to different vendees, the ownership shall be
transferred to the person who may have first taken possession thereof in good faith, if it
should be movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it who
in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith
was first in the possession; and, in the absence thereof, to the person who presents the
oldest title, provided there is good faith.
ll. What is the effect of a donee’s failure to accept the donation? (Article 745)
The donee must accept the donation personally, or through an authorized person with a
special power for the purpose, or with a general and sufficient power; otherwise, the
donation shall be void.
mm. What are the modes of acceptance?
Accepting personally or through an authorized person with a special power for the purpose,
or with a general and sufficient power
oo. When must acceptance be made? (Article 746)
Acceptance must be made during the lifetime of the donor and of the donee.
pp. What is the requirement for acceptance of donations by representatives? (Article 747)
Persons who accept donations in representation of others who may not do so by
themselves, shall be obliged to make the notification and notation of which article 749
speaks.
rr. What are the formalities required in the donation of a movable property? (Article 748)
The donation of a movable may be made orally or in writing.
An oral donation requires the simultaneous delivery of the thing or of the document
representing the right donated.
If the value of the personal property donated exceeds five thousand pesos, the donation and
the acceptance shall be made in writing. Otherwise, the donation shall be void.
- Property Worth Exactly 5,000.00 Or Less
When the property is worth exactly 5,000, or less, there must be simultaneous delivery of the
thing or the document representing the right donated to the donee.
-
-
Oral donation is allowed here because the value of the movable property
does not exceed 5,000.00
-
But there is no prohibition to accept the donation in writing even if the
property is less than 5,000.00
Property Worth More Than 5,000.00
If the value of the movable property is more than 5,000.000 the donation
must be effected in writing, although it need not be in a public instrument. Or
else, the donation shall be void. In oral donation, the delivery to the donee is
the equivalent of acceptance.
If the donation was made in writing but the acceptance was not made in the same
form, the donation is void.
ss. What are the formalities required in the donation of an immovable property? (Article 749)
In order that the donation of an immovable may be valid, it must be made in a public document,
specifying therein the property donated and the value of the charges which the donee must satisfy.
The acceptance may be made in the same deed of donation or in a separate public document, but
it shall not take effect unless it is done during the lifetime of the donor.
If the acceptance is made in a separate instrument, the donor shall be notified thereof in an
authentic form, and this step shall be noted in both instruments.
ss.1. Discuss Sumipat v. Banga.
SUMIPAT vs BANGA
G.R. No. 155810. August 13, 2004
FACTS: The spouses Placida Tabo-tabo and Lauro Sumipat acquired three parcels
of land.
The couple was childless.
Lauro Sumipat, however, sired five illegitimate children out of an extra-marital affair,
namely: herein defendants-appellees.
Lauro Sumipat executed a document denominated “DEED OF ABSOLUTE
TRANSFER AND/OR QUIT-CLAIM OVER REAL PROPERTIES” (the assailed document) in
favor of defendants-appellees covering the three parcels of land (the properties). On the
document appears the signature of his wife Placida indicating her marital consent thereto.
It appears that when the assailed document was executed, Lauro Sumipat was
already very sick and bedridden; that upon defendant-appellee Lydia’s request, their
neighbor Benjamin Rivera lifted the body of Lauro Sumipat whereupon Lydia guided his
(Lauro Sumipat’s) hand in affixing his signature on the assailed document which she had
brought; that Lydia thereafter left but later returned on the same day and requested Lauro’s
unlettered wife Placida to sign on the assailed document, as she did in haste, even without
the latter getting a responsive answer to her query on what it was all about.
After Lauro Sumipat’s death, his wife Placida, hereinafter referred to as plaintiffappellant, and defendants-appellees jointly administered the properties 50% of the produce
of which went to plaintiff-appellant.
As plaintiff-appellant’s share in the produce of the properties dwindled until she no
longer received any and learning that the titles to the properties in question were already
transferred/made in favor of the defendants-appellees, she filed a complaint for declaration
of nullity of titles, contracts, partition, recovery of ownership now the subject of the present
appeal.
Defendant-appellee Lydia disclaims participation in the execution of the assailed
document, she claiming to have acquired knowledge of its existence only five days after its
execution when Lauro Sumipat gave the same to her.
RTC decided the case in favor of defendants-appellees holding that by virtue of the
assailed document the due execution of which was not contested by plaintiff-appellant, the
properties were absolutely transferred to defendants-appellees.
ISSUE: Whether the questioned deed by its terms or under the surrounding
circumstances has validly transferred title to the disputed properties to the petitioners?
HELD: NO. A perusal of the deed reveals that it is actually a gratuitous disposition of
property — a donation — although Lauro Sumipat imposed upon the petitioners the
condition that he and his wife, Placida, shall be entitled to one-half (1/2) of all the fruits or
produce of the parcels of land for their subsistence and support.
Title to immovable property does not pass from the donor to the donee by virtue of a
deed of donation until and unless it has been accepted in a public instrument and the donor
duly notified thereof. The acceptance may be made in the very same instrument of donation.
If the acceptance does not appear in the same document, it must be made in another.
Where the deed of donation fails to show the acceptance, or where the formal notice of the
acceptance, made in a separate instrument, is either not given to the donor or else not noted
in the deed of donation and in the separate acceptance, the donation is null and void.
In this case, the donees’ acceptance of the donation is not manifested either in the
deed itself or in a separate document. Hence, the deed as an instrument of donation is
patently void.
Neither can we give effect to the deed as a sale, barter or any other onerous
conveyance, in the absence of valid cause or consideration and consent competently and
validly given.
tt. When is a document considered to be in a public instrument?
When the document is recorded with and authenticated by a public office or employee
uu. What is the effect of ratification of donation by the heirs of the donor on the donation?
If the heirs of the donor ratified the donation and the donee accepted, the donations
subsists, although, in reality, it is a new and valid one. Although, the ratification is binding
upon the heirs who ratified the donation, the ratification cannot have any retroactive effect to
the prejudice of the creditors.
vv. Discuss Shopper’s Paradise Realty and Dev’t. Corp. v. Roque
FACTS:
Petitioner Shopper’s Paradise Realty & Development Corporation, represented by its
president, Veredigno Atienza, entered into a twenty-five year lease with Dr. Felipe C. Roque,
now deceased, over a parcel of land, situated at Plaza Novaliches, Quezon City, in the name
of Dr. Roque. Petitioner issued a check for reservation payment. Simultaneously, petitioner
and Dr. Roque likewise entered into a memorandum of agreement for the construction,
development and operation of a commercial building on the property.
The contract of lease and memorandum of agreement were both notarized but were not
annotated due to the death of Dr. Roque. Respondent Efren Roque, one of the heirs of the
deceased, dealt with the petitioners but never came to an agreement. Efren alleged that he
was the owner of the subject property by virtue of a deed of donation inter vivos executed by
his parents in 1978 and that Dr. Roque was only delegated with the administration of the
property when the respondent left for the United States but the title of the property was not
transferred in the name of the respondent until 1994.
ISSUE:Whether the deceased was an authorized agent.
RULING:A person dealing with registered land may thus safely rely on the correctness of the
certificate of title issued therefore, and he is not required to go beyond the certificate to
determine the condition of the property but, where such party has knowledge of a prior
existing interest which is unregistered at the time he acquired a right thereto, his knowledge
of that prior unregistered interest would have the effect of registration as regards to him.
The appellate court was not without substantial basis when it found petitioner to have had
knowledge of the donation at the time it entered into the two agreements with Dr. Roque.
During their negotiation, petitioner, through its representatives, was apprised of the fact that
the subject property actually belonged to respondent.
It was not shown that Dr. Felipe C. Roque had been an authorized agent of respondent.
In a contract of agency, the agent acts in representation or in behalf of another with the
consent of the latter. Article 1878 of the Civil Code expresses that a special power of
attorney is necessary to lease any real property to another person for more than one year.
The lease of real property for more than one year is considered not merely an act of
administration but an act of strict dominion or of ownership. A special power of attorney is
thus necessary for its execution through an agent.
==============================================
1. Province of Camarines Sur v. Bodega Glassware, G.R. No. 194199, 22 March 2017.
2. Calanasan v. Sps. Dolorito, G.R. No. 171937, 25 November 2013.
a. Discuss Article 750.
The donation may comprehend all the present property of the donor, or part thereof,
provided he reserves, in full ownership or in usufruct, sufficient means for the support of
himself, and of all relatives who, at the time of the acceptance of the donation, are by law
entitled to be supported by the donor. Without such reservation, the donation shall be
reduced in petition of any person affected.
b. What is present property?
-property that is currently on hand, can be disposed of at the time of donation
c. What are the donations not covered by Article 750?
-donations that will adversely affect the donor and people they are supporting financially
d. What is accion pauliana?
-an action where the creditor files an action in court for the rescission of acts or contracts
entered into by the debtor designed to defraud the former.
e. What is the effect of failure to make the reservation required under Article 750 on the
donation? Why is there a need to make a reservation?
The donation would be reduced. There is a need to make a reservation because there would
be insufficient means to support himself and those relative entitled by law to be supported by
the donor.
f. What is a future property? May it be the subject of a donation? (Art. 751)
-Donations cannot comprehend future property.
-By future property is understood as anything which the donor cannot dispose of at the time
of the donation.
g. Memorize and explain the two restrictive acts under Article 752.
The provisions of article 750 notwithstanding, no person may give or receive, by way of
donation, more than he may give or receive by will.
The donation shall be inofficious in all that it may exceed this limitation.
h. What is the effect of an inofficious donation?
-the amount that was intended to be donated shall be reduced
i. Discuss Article 753.
When a donation is made to several persons jointly, it is understood to be in equal shares,
and there shall be no right of accretion among them, unless the donor has otherwise
provided.
j. What is the right of accretion? Is it applicable to a donation where there are joint donees?
-means the right of the heirs to add to their shares in the inheritance, the share of any coheir. Not applicable unless otherwise provided
k. Discuss the subrogation of a donee to all the rights and actions pertaining to the donor, in
case of eviction. (Article 754)
-The donee is subrogated (the substitution of one person or group by another in respect of a
debt or insurance claim, accompanied by the transfer of any associated rights and duties) to
all the rights and actions which in case of eviction would pertain to the donor. The latter, on
the other hand, is not obliged to warrant the things donated, save when the donation is
onerous, in which case the donor shall be liable for eviction to the concurrence of the
burden.
-The donor shall also be liable for eviction or hidden defects in case of bad faith on his part.
l. What is the effect of the donor’s failure to his right to dispose a portion of the property or
the amount donated in a deed of donation because of his death? (Article 755)
-The right to dispose of some of the things donated, or of some amount which shall be a
charge thereon, may be reserved by the donor; but if he should die without having made use
of this right, the property or amount reserved shall belong to the donee.
m. May the ownership of a property and the usufruct over the same property be donated to
different persons? (Article 756)
-The ownership of property may also be donated to one person and the usufruct to another
or others, provided all the donees are living at the time of the donation.
n. Discuss the rules on reversion as stated in Article 757.
-Reversion may be validly established in favor of only the donor for any case and
circumstances, but not in favor of other persons unless they are all living at the time of the
donation.
-Any reversion stipulated by the donor in favor of a third person in violation of what is
provided in the preceding paragraph shall be void, but shall not nullify the donation.
n.1. Discuss Province of Camarines Sur v. Bodega Glassware.
o. Discuss the rules on the imposition upon the donee the obligation to pay the donor’s
debts. (Art. 758)
-When the donation imposes upon the donee the obligation to pay the debts of the donor, if
the clause does not contain any declaration to the contrary, the former is understood to be
liable to pay only the debts which appear to have been previously contracted. In no case
shall the donee be responsible for the debts exceeding the value of the property donated,
unless a contrary intention clearly appears.
p. Discuss Art. 759.
-There being no stipulation regarding the payment of debts, the donee shall be responsible
therefor only when the donation has been made in fraud of creditors.
-The donation is always presumed to be in fraud of creditors, when at the time thereof the
donor did not reserve sufficient property to pay his debts prior to the donation.
r. When is a donation presumed to be in fraud of creditors?
- when the donor did not have enough property to pay his debts prior to the donation
s. When may a donation inter vivos be revoked or reduced under Article 760?
-Every donation inter vivos, made by a person having no children or descendants,
legitimate or legitimated by subsequent marriage, or illegitimate, may be revoked or reduced
as provided in the next article, by the happening of any of these events:
(1) If the donor, after the donation, should have legitimate or legitimated or
illegitimate children, even though they be posthumous;
(2) If the child of the donor, whom the latter believed to be dead when he made the
donation, should turn out to be living;
(3) If the donor should subsequently adopt a minor child.
t. Discuss Article 761.
In the cases referred to in the preceding article, the donation shall be revoked or reduced
insofar as it exceeds the portion that may be freely disposed of by will, taking into account
the whole estate of the donor at the time of the birth, appearance or adoption of a child.
u. What is disposable free portion?
The portion that remains after the parts that are automatically granted to legal heirs have
been given.
v. What are the obligations of the donee upon revocation or deduciton of donation? (Art.
762)
-Upon the revocation or reduction of the donation by the birth, appearance or adoption of a
child, the property affected shall be returned or its value if the donee has sold the same.
-If the property is mortgaged, the donor may redeem the mortgage, by paying the amount
guaranteed, with a right to recover the same from the donee.
-When the property cannot be returned, it shall be estimated at what it was worth at the time
of the donation.
w. Discuss the rules on prescription of actions stated in Article 763.
-The action for revocation or reduction on the grounds set forth in article 760 shall prescribe
after four years from the birth of the first child, or from his legitimation, recognition or
adoption, or from the judicial declaration of filiation, or from the time information was
received regarding the existence of the child believed dead.
-This action cannot be renounced, and is transmitted, upon the death of the donor, to his
legitimate and illegitimate children and descendants.
x. Discuss revocation of donations under Article 764.
-The donation shall be revoked at the instance of the donor, when the donee fails to comply
with any of the conditions which the former imposed upon the latter.
-In this case, the property donated shall be returned to the donor, the alienations made by
the donee and the mortgages imposed thereon by him being void, with the limitations
established, with regard to third persons, by the Mortgage Law and the Land Registration
laws.
-This action shall prescribe after four years from the noncompliance with the condition, may
be transmitted to the heirs of the donor, and may be exercised against the donee’s heirs.
y. May revocation be done unilaterally by the donor?
No. A court action is essential, if the donee refuses to return the property voluntarily
z. When is ingratitude on the part of the donee considered as a ground for revocation of the
donation at the instance of the donor? (Article 765)
(1) If the donee should commit some offense against the person, the honor or the property of
the donor, or of his wife or children under his parental authority;
(2) If the donee imputes to the donor any criminal offense, or any act involving moral
turpitude, even though he should prove it, unless the crime or the act has been committed
against the donee himself, his wife or children under his authority;
(3) If he unduly refuses him support when the donee is legally or morally bound to give
support to the donor.
z.1. Discuss Calanasan v. Sps. Dolorito.
aa. What is the reason for Article 765?
bb. What is the effect of the revocation of the donation due to ingratitude on alienations or
mortgages made by the donee? (Arts. 766-767)
-ARTICLE 766. Although the donation is revoked on account of ingratitude, nevertheless, the
alienations and mortgages effected before the notation of the complaint for revocation in the
Registry of Property shall subsist.
-Later ones shall be void. (649)
-ARTICLE 767. In the case referred to in the first paragraph of the preceding article, the
donor shall have a right to demand from the donee the value of property alienated which he
cannot recover from third persons, or the sum for which the same has been mortgaged.
-The value of said property shall be fixed as of the time of the donation. (650)
cc. What are the things to be returned after revocation of donation? (Art. 768).
-When the donation is revoked for any of the causes stated in article 760, or by reason of
ingratitude, or when it is reduced because it is inofficious, the donee shall not return the fruits
except from the filing of the complaint.
If the revocation is based upon noncompliance with any of the conditions imposed in the
donation, the donee shall return not only the property but also the fruits thereof which he
may have received after having failed to fulfill the condition.
dd. May the donor make an advance renunciation of action to revoke a donation on ground
of ingratitude? (Art. 769).
The action granted to the donor by reason of ingratitude cannot be renounced in advance.
This action prescribes within one year, to be counted from the time the donor had knowledge
of the fact and it was possible for him to bring the action.
ee. Discuss Article 770.
This action shall not be transmitted to the heirs of the donor, if the latter did not institute the
same, although he could have done so, and even if he should die before the expiration of
one year.
Neither can this action be brought against the heir of the donee, unless upon the latter’s
death the complaint has been filed.
ff. Read Articles 771 to 773.
-ARTICLE 771. Donations which in accordance with the provisions of article 752, are
inofficious, bearing in mind the estimated net value of the donor’s property at the time of his
death, shall be reduced with regard to the excess; but this reduction shall not prevent the
donations from taking effect during the life of the donor, nor shall it bar the donee from
appropriating the fruits.
For the reduction of donations the provisions of this Chapter and of articles 911 and 912 of
this Code shall govern. (654)
-ARTICLE 772. Only those who at the time of the donor’s death have a right to the legitime
and their heirs and successors in interest may ask for the reduction or inofficious donations.
Those referred to in the preceding paragraph cannot renounce their right during the lifetime
of the donor, either by express declaration, or by consenting to the donation.
The donees, devisees and legatees, who are not entitled to the legitime and the creditors of
the deceased can neither ask for the reduction nor avail themselves thereof. (655a)
-ARTICLE 773. If, there being two or more donations, the disposable portion is not sufficient
to cover all of them, those of the more recent date shall be suppressed or reduced with
regard to the excess. (656)
======================================================================
12 & 13
a. What is an intellectual property according to the World Intellectual Property Organization?
- Intellectual property (IP) refers to creations of the mind – everything from works of art to
inventions, computer programs to trademarks and other commercial signs.
b. What is the statutory definition of intellectual property rights according to RA No. 8293?
a) Copyright and Related Rights;
b) Trademarks and Service Marks;
c) Geographic Indications;
d) Industrial Designs;
e) Patents;
f) Layout-Designs (Topographies) of Integrated Circuits; and
g) Protection of Undisclosed Information (n, TRIPS).
c. Distinguish between trademarks, copyrights, and patents.
Trademark - a symbol, word, or words legally registered or established by use as
representing a company or product. Visible sign enabling the goods to be distinguished
Copyright - the exclusive legal right, given to an originator or an assignee to print, publish,
perform, film, or record literary, artistic, or musical material, and to authorize others to do the
same.
Patent - a government authority or license conferring a right or title for a set period,
especially the sole right to exclude others from making, using, or selling an invention.
c.1. Discuss Kho v. CA.
-Petitioner filed a complaint for injunction and damages with a prayer for the issuance
of a writ of preliminary injunction against Summerville General Merchandising and Company
and Ang Tiam Chay.
-Alleging that petitioner owns copyrights on the branding and container of the product
and patent rights on the main product both sides were selling
-that respondent’s selling of the product negatively affected petitioners sales
-respondents claimed however that petitioner’s copyrights on the branding and the
product were acquired through misrepresentation and falsification as summerville was the
only authorized importer, re-packer and distributor
-initally, petitioner’s prayer for the issuance of a writ of preliminary injunction was
granted, but after the respondents petition for certiorari to nullify the preliminary injunction
was granted, petitioners filed a petition for certiorari, which is the case at bar
-at the end of the day, copyright and patent are not interchangeable terms
-In order to be entitled to exclusively use the same in the sale of the beauty cream
product, the user must sufficiently prove that she registered or used it before anybody else
did. The petitioner’s copyright and patent registration of the name and container would not
guarantee her the right to the exclusive use of the aforementioned product for the reason
that they are not appropriate subjects of the said intellectual rights. Consequently, a
preliminary injunction order cannot be issued for the reason that the petitioner has not
proven that she has a clear right over the said name and container to the exclusion of
others, not having proven that she has registered a trademark thereto or used the same
before anyone did.
-petition denied. The decision being assailed is affirmed
d. What is a trademark? What is the term of protection of a registered trademark?
“Mark” means any visible sign capable of distinguishing the goods (trademark) or services
(service mark) of an enterprise and shall include a stamped or marked container of goods
A trademark can be protected in perpetuity if regularly monitored and properly maintained.
The period of protection is ten (10) years from the date of issuance and is renewable for a
period of ten (10) years at a time.
e. What is a mark (trademark and service mark)?
“Mark” means any visible sign capable of distinguishing the goods (trademark) or services
(service mark) of an enterprise and shall include a stamped or marked container of goods;
f. What is a collective mark?
g. What is a trade name.
“Trade name” means the name or designation identifying or distinguishing an enterprise;
h. What are the non-registrable marks (Sec. 123 of RA No. 8293)?
1. A mark cannot be registered if it:
(a) Consists of immoral, deceptive or scandalous matter, or matter which may
disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or
national symbols, or bring them into contempt or disrepute;
(b) Consists of the flag or coat of arms or other insignia of the Philippines or any of its
political subdivisions, or of any foreign nation, or any simulation thereof;
(c) Consists of a name, portrait or signature identifying a particular living individual
except by his written consent, or the name, signature, or portrait of a deceased President of
the Philippines, during the life of his widow, if any, except by written consent of the widow;
(d) Is identical with a registered mark belonging to a different proprietor or a mark
with an earlier filing or priority date, in respect of:
(i) The same goods or services, or
(ii) Closely related goods or services, or
(iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion;
(e) Is identical with, or confusingly similar to, or constitutes a translation of a mark
which is considered by the competent authority of the Philippines to be well-known
internationally and in the Philippines, whether or not it is registered here, as being already
the mark of a person other than the applicant for registration, and used for identical or similar
goods or services: Provided, That in determining whether a mark is well-known, account
shall be taken of the knowledge of the relevant sector of the public, rather than of the public
at large, including knowledge in the Philippines which has been obtained as a result of the
promotion of the mark;
(f) Is identical with, or confusingly similar to, or constitutes a translation of a mark
considered well-known in accordance with the preceding paragraph, which is registered in
the Philippines with respect to goods or services which are not similar to those with respect
to which registration is applied for: Provided, That use of the mark in relation to those goods
or services would indicate a connection between those goods or services, and the owner of
the registered mark: Provided, further, That the interests of the owner of the registered mark
are likely to be damaged by such use;
(g) Is likely to mislead the public, particularly as to the nature, quality, characteristics
or geographical origin of the goods or services;
(h) Consists exclusively of signs that are generic for the goods or services that they
seek to identify;
(i) Consists exclusively of signs or of indications that have become customary or
usual to designate the goods or services in everyday language or in bona fide and
established trade practice;
(j) Consists exclusively of signs or of indications that may serve in trade to designate
the kind, quality, quantity, intended purpose, value, geographical origin, time or production of
the goods or rendering of the services, or other characteristics of the goods or services;
(k) Consists of shapes that may be necessitated by technical factors or by the nature
of the goods themselves or factors that affect their intrinsic value;
(l) Consists of color alone, unless defined by a given form; or
(m) Is contrary to public order or morality.
-
-
-
-
h.1. False suggestion of connection.
Discuss Fredco Manufacturing Corp. v. President and Fellows of Harvard College.
Essentially, Fredco Manufacturing Corp was producing clothes and other products
that bore the logo and name of Harvard College along with its year of establishment
and location, claiming that they owned the trademark in the Philippines, as it was first
used in the country on 2 January 1982 by New York Garments Manufacturing &
Export Co., Inc. (New York Garments), a domestic corporation and Fredco’s
predecessor-in-interest, who subsequently registered the mark of “Harvard” on 24
January 1985
Harvard however, claimed that it was the lawful owner of the name and mark of
“Harvard” in numerous countries including the Philippines.
On 20 April 2004, Harvard University filed an administrative complaint against Fredco
before the IPO for trademark infringement and/or unfair competition with damages.
However, in a Decision7 dated 22 December 2006, Director Estrellita BeltranAbelardo of the Bureau of Legal Affairs, IPO cancelled Harvard University’s
registration of the mark "Harvard", saying that Fredco’s goods were not confusingly
similar to Harvard’s goods.
Then, Harvard filed an appeal before the Office of the Director General of the IPO. In
a Decision dated 21 April 2008, the Office of the Director General, IPO reversed the
decision of the Bureau of Legal Affairs, IPO, saying that the applicant must be the
owner of the mark sought to be registered. The Director General ruled that the right
to register a trademark is based on ownership and when the applicant is not the
owner, he has no right to register the mark.
The reasoning in the case at bar is that Fredco should not have been allowed to
register the trademark for Harvard in the first place since it will cause false
suggestion of connection to the actual college in America since Fredco has no
affiliations with the college.
h.2. Identical with a registered trademark.
Discuss Mighty Corporation v. E & J Gallo Winery.
FACTS:
On March 12, 1993, E. & J. GALLO WINERY and THE ANDRESONS GROUP, INC
(respondents) sued MIGHTY CORPORATION and LA CAMPANA FABRICA DE
TABACO, INC. (petitioners) in the RTC-Makati for trademark and trade name
infringement and unfair competition, with a prayer for damages and preliminary
injunction.
They claimed that petitioners adopted the Gallo trademark to ride on Gallo Winery’s
and Gallo and Ernest & Julio Gallo trademark’s established reputation and popularity,
thus causing confusion, deception and mistake on the part of the purchasing public
who had always associated Gallo and Ernest and Julio & Gallo trademarks with Gallo
Winery’s wines.
In their answer, petitioners alleged, among other affirmative defenses that: petitioners
Gallo cigarettes and Gallo Winery’s wine were totally unrelated products. To wit:
1. Gallo Winery’s GALLO trademark registration certificates covered wines only, and
not cigarettes;
2. GALLO cigarettes and GALLO wines were sold through different channels of
trade;
3. the target market of Gallo Winery’s wines was the middle or high-income bracket
while Gallo cigarette buyers were farmers, fishermen, laborers and other low-income
workers;
4. that the dominant feature of the Gallo cigarette was the rooster device with the
manufacturer’s name clearly indicated as MIGHTY CORPORATION, while in the
case of Gallo Winery’s wines, it was the full names of the founders-owners ERNEST
& JULIO GALLO or just their surname GALLO;
The Makati RTC denied, for lack of merit, respondent’s prayer for the issuance of a
writ of preliminary injunction. CA likewise dismissed respondent’s petition for review
on certiorari.
After the trial on the merits, however, the Makati RTC held petitioners liable for
committing trademark infringement and unfair competition with respect to the GALLO
trademark.
On appeal, the CA affirmed the Makati RTC’s decision and subsequently denied
petitioner’s motion for reconsideration.
ISSUE/S: Whether GALLO cigarettes and GALLO wines were identical, similar or
related goods for the reason alone that they were purportedly forms of vice.
RULING: NO.
Wines and cigarettes are not identical, similar, competing or related goods.
In resolving whether goods are related, several factors come into play:
·
the business (and its location) to which the goods belong
·
the class of product to which the good belong
·
the product’s quality, quantity, or size, including the nature of the package,
wrapper or container
·
the nature and cost of the articles
·
the descriptive properties, physical attributes or essential characteristics with
reference to their form, composition, texture or quality
·
the purpose of the goods
·
whether the article is bought for immediate consumption, that is, day-to-day
household items
·
the field of manufacture
·
the conditions under which the article is usually purchased and
·
the articles of the trade through which the goods flow, how they are distributed,
marketed, displayed and sold.
The test of fraudulent simulation is to the likelihood of the deception of some persons
in some measure acquainted with an established design and desirous of purchasing
the commodity with which that design has been associated. The simulation, in order
to be objectionable, must be as appears likely to mislead the ordinary intelligent
buyer who has a need to supply and is familiar with the article that he seeks to
purchase.
The petitioners are not liable for trademark infringement, unfair competition or
damages.
h.3. Colorable Imitation of a registered mark.
Discuss McDonald’s Corporation v. L.C. Big Mak Burger, Inc.
-
-
-
Basically, McDonalds is asking Big Mak Burger Inc. to not register the name Big Mak
as a mark for its burger sandwiches, citing that it is a colorable imitation of a
registered mark.
Big Mak Burger Inc. reasoned that it is also the name of the company, not just the
burger item itself, and that they were not trying to pass off their Big Mak burgers as
the McDonalds Big Mac. Additionally, they pointed out that the Isaiyas Group of
Corporations ("Isaiyas Group") registered the same mark for hamburger sandwiches
with the Philippine Bureau of Patents, Trademarks and Technology on 31 March
1979, prior to McDonald's registration on 18 July 1985.
In the end, after much back and forth in the lower courts, the supreme court resorted
to the dominancy test to determine confusing similarity, and found that there were too
many similarities, citing the “stark similarity in words” of the marks, seeing that Big
Mak simply replaced the letter C with K, and the fact that both products are burgers.
Additionally, verbally speaking both names will surely cause confusion as they both
sound the same. Thus, the supreme court ruled that the respondent was liable for
trademark infringement and unfair competition.
h.4. Marks that are considered generic.
Discuss Lyceum of the Philippines v. Court of Appeals, G.R. No. 101897, 05 March
1993.
-
-
-
Basically, Lyceum of the Philippines instituted proceedings before the SEC to get a
great number of other educational institutions that also have the word Lyceum in their
name.
However, they dont have the right to do that. Petitioner claims that the word Lyceum
has taken a secondary meaning associating it with the petitioner and that other
educational institutions may cause confusion to the general public.
However, petitioner failed to prove the existence of the secondary meaning.
Additionally, the word lyceum is a latin word that finds its root in the greek word
lykeion, which is a place in greece where aristotle used to hold his lectures, which
eventually led to the word lyceum being associated as another general term for an
institute of learning.
i. What are the two types of confusion in trademark infringement? Explain each.
Confusion of product - mistaking a product for another
Confusion of business - mistaking a business for another
j. What are the tests to determine confusing similarity? Discuss each.
-
The dominancy test focuses on 'the similarity of the prevalent or dominant features of
the competing trademarks that might cause confusion, mistake, and deception in the
mind of the purchasing public. Duplication or imitation is not necessary; neither is it
required that the mark sought to be registered suggests an effort to imitate. Given
more consideration are the aural and visual impressions created by the marks on the
buyers of goods, giving little weight to factors like prices, quality, sales outlets, and
market segments.(3)
-
The holistic or totality test necessitates a 'consideration of the entirety of the marks
as applied to the products, including the labels and packaging, in determining
confusing similarity. The discerning eye of the observer must focus not only on the
predominant words, but also on the other features appearing on both labels so that
the observer may draw conclusion on whether one is confusingly similar to the
other.(4)
j.1. Discuss Skechers USA, Inc. v. Inter Pacific Industrial Trading Corp. G.R. No.
164321, 23 March 2011.
-petitioner filed with Branch 24 of the Regional Trial Court (RTC) of Manila an
application for the issuance of search warrants against an outlet and warehouse operated by
respondents for infringement of trademark
-thus, more than 6000 pairs of shoes were seized, all bearing the stylized oval S
logo.
-Later, respondents moved to quash the search warrants, arguing that there was no
confusing similarity between petitioner’s "Skechers" rubber shoes and its "Strong" rubber
shoes, subsequently leading to the RTC issuing an order to quash the search warrants and
return the seized goods. The petitioner filed a petition for certiorari, but the assailed decision
was still upheld.
-Thus leading to the case at bar, where the petitioner asks for reexamination of the
facts of the case.
-In the end, it was found that the lower courts applied the holistic or totality test in
concluding that there is no confusing similarity. However, the supreme court finds that the
similarities were too blatant, outweighing the differences.
j.2. Discuss Philip Morris, Inc. v. Fortune Tobacco Corp., G.R. No. 158589, 27 June
2006.
-Petitioner Philip Morris Inc., has registered "MARK VII," "MARK TEN" and "LARK"
as trademarks for their cigarette products. Fortune Tobacco Corp registered a trademark for
their cigarette products under one called “MARK”
-The legal dispute between the parties started when the herein petitioners, on the
claim that an infringement of their respective trademarks had been committed, filed on
August 18, 1982, a Complaint for Infringement of Trademark and Damages against
respondent Fortune Tobacco Corporation,
-they argued that their trademarks were internationally known, thus claiming bad faith
on the respondent when they registered their trademark under the name “MARK” to fool
people into thinking they were going buying the petitioner’s cigarette products.
-however, they also claimed that they didnt sell their products in the philippines, thus
showing that regular consumers in the philippines would not have a secondary meaning with
their trademarks, leaving the respondent in the clear
-in the end, they were not able to prove that there was confusing similarity due to a
lack of convincing proof on the part of the petitioners regarding actual use of their registered
trademarks prior to respondent’s use of its mark and for petitioners’ failure to demonstrate
confusing similarity between said trademarks
j.3. Discuss Berries Agricultural Co, Inc. v. Norvy Abyadang. G.R. No. 183404, 13
October 2010.
-On January 16, 2004, respondent Norvy A. Abyadang (Abyadang) filed with the
Intellectual Property Office (IPO) a trademark application for the mark "NS D-10 PLUS" for
use in connection with Fungicide (Class 5) with active ingredient 80% Mancozeb. The
application was given due course and was published in the IPO e-Gazette for opposition on
July 28, 2005.
-On August 17, 2005, petitioner Berris Agricultural Co., Inc. (Berris), IPO Bureau of
Legal Affairs (IPO-BLA) a Verified Notice of Opposition against the mark because allegedly
"NS D-10 PLUS" is similar and/or confusingly similar to its registered trademark "D-10 80
WP," also used for Fungicide (Class 5) with active ingredient 80% Mancozeb.
-After an exchange of pleadings, on April 28, 2006, a decision was issued where
Abyadang’s trademark application was rejected, but after an unsuccessful motion for
reconsideration and yet another unsuccessful appeal, Abyadang filed an issue for review
before the court of appeals who granted the petition on the grounds that 1) petitioner’s mark
"NS D-10 PLUS" is not confusingly similar with respondent’s trademark "D-10 80 WP"; 2)
respondent failed to establish its ownership of the mark "D-10 80 WP" and 3) respondent’s
trademark registration for "D-10 80 WP" may be cancelled in the present case to avoid
multiplicity of suits, thus leading to the case at bar.
- The ownership of a trademark is acquired by its registration and its actual use by
the manufacturer or distributor of the goods made available to the purchasing public, and
with this in mind, Berris was able to prove that they were indeed already selling the product
before Abyadang’s application. Berris was able to show that it was using its mark "D-10 80
WP" since June 20, 2002, even before it filed for its registration with the IPO on November
29, 2002, as shown by its date of actual use, which was under oath and notarized, bearing
the stamp of the Bureau of Trademarks of the IPO on April 25, 2003,
j.4. Discuss Diaz v. People, G.R. No. 180677, 18 February 2013.
-Basically, Diaz was accused of making fake Levi Strauss jeans, despite his label “LS
Jeans Tailoring” was registered with the Intellectual Property Office; that his shops received
clothes for sewing or repair; that his shops offered made-to-order jeans, whose styles or
designs were done in accordance with instructions of the customers; that since the time his
shops began operating in 1992, he had received no notice or warning regarding his
operations; that the jeans he produced were easily recognizable because the label "LS
Jeans Tailoring," and the names of the customers were placed inside the pockets, and each
of the jeans had an "LSJT" red tab; that "LS" stood for "Latest Style;" and that the leather
patch on his jeans had two buffaloes, not two horses.
-he was charged guilty
-but then he was allowed to appeal
-where the supreme court did point out that LS Jeans Tailoring with its entirely
different name and logo with the buffalo would definitely not be mistaken for the Levi’s brand,
despite the Levi Strauss company’s insistence that their designs and trademarks were
imitated.
J.5. Discuss Etepha v. Director of Patents,
-this case talks about the dispute between the respondent Westmont
Pharmaceuticals, Inc and Petitioner, Etepha caused by the similarities of their trademarks for
Atussin and Pertussin respectively.
-petitioner claims that Atussin will cause confusion because it sounds similar to
Pertussin
-However, Pertussin sounds nothing like Atussin. And their presentations look
nothing alike, with the horizontal plain, block letters of Atussin and the diagonally and
artistically upward writing of Pertussin leaving distinct visual impressions.
k. What is the doctrine of secondary meaning?
"Under the doctrine of secondary meaning, a word or phrase originally incapable of
exclusive appropriation with reference to an article in the market, because geographical or
otherwise descriptive might nevertheless have been used so long and so exclusively by one
producer with reference to this article that, in that trade and to that group of the purchasing
public,
k.1. Discuss Shang Properties Realty Corporation v. St. Francis Development
Corporation, G.R. No. 190706, 21 July 2014.
-G.R. No. 190706 | July 21, 2014
Commercial Law: Law on Intellectual Property: Unfair Competition
DOCTRINE
Unless secondary meaning has been established, a geographically-descriptive mark,
due to its general public domain classification, is perceptibly disqualified from
trademark registration.
FACTS
Respondent, the developer of the St. Francis Square Commercial Center, filed a
complaint against petitioners before the Bureau of Legal Affairs (BLA) for violation of
intellectual property for unfair competition arising from petitioners’ use and filing of
applications for the marks “THE ST. FRANCIS TOWERS” and “THE ST. FRANCIS
SHANGRI-LA PLACE.” Respondent alleged that it has used the mark “ST.
FRANCIS” to identify its numerous property development projects located at Ortigas
Center, and that as a result of its continuous use of the mark “ST. FRANCIS,” it has
gained substantial goodwill with the public that consumers and traders closely
identify the said mark with its property development projects. Accordingly,
respondent claimed that petitioners could not have the subject mark registered in
their names, and that petitioners’ use of such mark constitutes unfair competition as
well as false or fraudulent declaration. Petitioner contended that respondent is barred
from claiming ownership and exclusive use of the mark “ST. FRANCIS” because the
same is geographically descriptive of the goods or services for which it is intended to
be used. The BLA and The IPO-Director General ruled in favor of the respondent.
The CA affirmed the decision of the IPO-Director General, stating that even on the
assumption that “ST. FRANCIS” was indeed a geographically descriptive mark,
adequate protection must still be given to respondent pursuant to the Doctrine of
Secondary Meaning.
ISSUE
Whether or not petitioners are guilty of unfair competition in using the marks “THE
ST. FRANCIS TOWERS” and “THE ST. FRANCIS SHANGRI-LA PLACE.”
HELD
No. The mark “ST. FRANCIS” has a geographically-descriptive nature which thus
bars its exclusive appropriability, unless a secondary meaning is acquired. As its use
of the mark is clearly limited to a certain locality, it cannot be said that there was
substantial commercial use of the same recognized all throughout the country, as
required by Section 123.2(a) of the IP Code in order to conclude that a
geographically-descriptive mark has acquired secondary meaning. Neither is there
any showing of a mental recognition in buyers’ and potential buyers’ minds that
products connected with the mark “ST. FRANCIS” are associated with the same
source — that is, the enterprise of respondent. Thus, absent any showing that there
exists a clear goods/service-association between the realty projects located in the
aforesaid area and herein respondent as the developer thereof, the latter cannot be
said to have acquired a secondary meaning as to its use of the “ST. FRANCIS” mark.
Also, assuming that secondary meaning had been acquired, this does not
automatically trigger the concurrence of the element of fraud. There can be no unfair
competition without this element.
l. What names cannot be used as a tradename? (Section 165.1, RA 8293).
A name or designation may not be used as a trade name if by its nature or the use to which
such name or designation may be put, it is contrary to public order or morals and if, in
particular, it is liable to deceive trade circles or the public as to the nature of the enterprise
identified by that name.
m. Is a tradename protected even without registration?
Even where trademarks can be protected through use, you are well advised to register the
trademark by filing the appropriate application for m at the IP Philippines. Registering a
trademark will provide stronger protection, particularly in case of conflict with an identical or
confusingly similar trademark
n.1. Discuss Coffee Partners, Inc. v. San Francisco Coffee & Roastery, Inc.
Facts:
Petitioner Coffee Partners entered into a franchise agreement with Coffee Partners Ltd. to
operate coffee shops in the country using the trademark ‘San Francisco Coffee.’ Respondent
on the other hand, is a local corporation engaged in the wholesale and retail sale of coffee
and uses the business name ‘San Francisco Coffee & Roastery’ registered with the DTI.
Later, respondent filed an infringement and/or unfair competition complaint against petitioner
alleging that the latter was about to open a coffee shop under the name ‘San Francisco
Coffee’ causing confusion in the minds of the public as it bore a similar name and is
engaged also in selling of coffee. Petitioner contended no infringement would arise because
respondent’s tradename was not registered.
Issue:
Whether or not petitioner’s trademark would infringe respondent’s tradename.
Ruling: YES.
In Prosource International, Inc. v. Horphag Research Management SA, this Court laid down
what constitutes infringement of an unregistered trade name, thus:
(1) The trademark being infringed is registered in the Intellectual Property Office; however, in
infringement of trade name, the same need not be registered;
(2) The trademark or trade name is reproduced, counterfeited, copied, or colorably imitated
by the infringer;
(3) The infringing mark or trade name is used in connection with the sale, offering for sale, or
advertising of any goods, business or services; or the infringing mark or trade name is
applied to labels, signs, prints, packages, wrappers, receptacles, or advertisements intended
to be used upon or in connection with such goods, business, or services;
(4) The use or application of the infringing mark or trade name is likely to cause confusion or
mistake or to deceive purchasers or others as to the goods or services themselves or as to
the source or origin of such goods or services or the identity of such business; and
(5) It is without the consent of the trademark or trade name owner or the assignee thereof.
RA 8293, which took effect on 1 January 1998, has dispensed with the registration
requirement. Section 165.2 of RA 8293 categorically states that trade names shall be
protected, even prior to or without registration with the IPO, against any unlawful act
including any subsequent use of the trade name by a third party, whether as a trade name or
a trademark likely to mislead the public.
It is the likelihood of confusion that is the gravamen of infringement. Applying the dominancy
test or the holistic test, petitioner’s “SAN FRANCISCO COFFEE” trademark is a clear
infringement of respondent’s “SAN FRANCISCO COFFEE & ROASTERY, INC.” trade name.
The descriptive words “SAN FRANCISCO COFFEE” are precisely the dominant features of
respondent’s trade name. Petitioner and respondent are engaged in the same business of
selling coffee, whether wholesale or retail. The likelihood of confusion is higher in cases
where the business of one corporation is the same or substantially the same as that of
another corporation. In this case, the consuming public will likely be confused as to the
source of the coffee being sold at petitioner’s coffee shops.
o. What is trademark infringement?
-
Trademark infringement is the unauthorized use of a trademark or service mark on or
in connection with goods and/or services in a manner that is likely to cause
confusion, deception, or mistake about the source of the goods and/or services.
p. What are its elements?
1. The trademark being infringed is registered in the Intellectual Property Office;
2. The trademark is reproduced, counterfeited, copied, or colorably imitated by the
infringer;
3. The infringing mark is used in connection with the sale, offering for sale, or
advertising of any goods, business or services; or the infringing mark is applied to labels,
signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon
or in connection with such goods, business or services;
4. The use or application of the infringing mark is likely to cause confusion or mistake
or to deceive purchasers or others as to the goods or services themselves or as to the
source or origin of such goods or services or the identity of such business; and
5. The use or application of the infringing mark is without the consent of the
trademark owner or the assignee thereof.
q. What is unfair competition?
(a) Any person, who is selling his goods and gives them the general appearance of goods of
another manufacturer or dealer, either as to the goods themselves or in the wrapping of the
packages in which they are contained, or the devices or words thereon, or in any other
feature of their appearance, which would be likely to influence purchasers to believe that the
goods offered are those of a manufacturer or dealer, other than the actual manufacturer or
dealer, or who otherwise clothes the goods with such appearance as shall deceive the public
and defraud another of his legitimate trade, or any subsequent vendor of such goods or any
agent of any vendor engaged in selling such goods with a like purpose;
(b) Any person who by any artifice, or device, or who employs any other means calculated to
induce the false belief that such person is offering the services of another who has identified
such services in the mind of the public; or
(c) Any person who shall make any false statement in the course of trade or who shall
commit any other act contrary to good faith of a nature calculated to discredit the goods,
business or services of another.
r. What are the elements of unfair competition?
(1) confusing similarity in the general appearance of the goods, and
(2) intent to deceive the public and deceive a competitor.
r.1. Discuss Superior Commercial Enterprises, Inc. v. Kunnan Enterprises Ltd. and
Sports Concept & Distributor.
FACTS: On February 23, 1993, SUPERIOR filed a complaint for trademark
infringement and unfair competition with preliminary injunction against KUNNAN and
SPORTS CONCEPT with the RTC, docketed as Civil Case No. Q-93014888.
In support of its complaint, SUPERIOR first claimed to be the owner of the
trademarks, trading styles, company names and business names “KENNEX”, “KENNEX &
DEVICE”, “PRO KENNEX” and “PRO-KENNEX” (disputed trademarks). Second, it also
asserted its prior use of these trademarks, presenting as evidence of ownership the Principal
and Supplemental Registrations of these trademarks in its name. Third, SUPERIOR also
alleged that it extensively sold and advertised sporting goods and products covered by its
trademark registrations. Finally, SUPERIOR presented as evidence of its ownership of the
disputed trademarks the preambular clause of the Distributorship Agreement dated October
1, 1982 (Distributorship Agreement) it executed with KUNNAN, which states: HCI
Whereas, KUNNAN intends to acquire the ownership of KENNEX trademark
registered by the [sic] Superior in the Philippines. Whereas, the [sic] Superior is desirous of
having been appointed [sic] as the sole distributor by KUNNAN in the territory of the
Philippines.” [Emphasis supplied.]
In its defense, KUNNAN disputed SUPERIOR’s claim of ownership and maintained
that SUPERIOR — as mere distributor from October 6, 1982 until December 31, 1991 —
fraudulently registered the trademarks in its name. KUNNAN alleged that it was incorporated
in 1972, under the name KENNEX Sports Corporation for the purpose of manufacturing and
selling sportswear and sports equipment; it commercially marketed its products in different
countries, including the Philippines since 1972. It created and first used “PRO KENNEX,”
derived from its original corporate name, as a distinctive trademark for its products in 1976.
KUNNAN also alleged that it registered the “PRO KENNEX” trademark not only in the
Philippines but also in 31 other countries, and widely promoted the “KENNEX” and “PRO
KENNEX” trademarks through worldwide advertisements in print media and sponsorships of
known tennis players.
On October 1, 1982, after the expiration of its initial distributorship agreement with
another company, KUNNAN appointed SUPERIOR as its exclusive distributor in the
Philippines under a Distributorship Agreement whose pertinent provisions state:
Whereas, KUNNAN intends to acquire ownership of KENNEX trademark registered
by the Superior in the Philippines. Whereas, the Superior is desirous of having been
appointed [sic] as the sole distributor by KUNNAN in the territory of the Philippines.
Even though this Agreement clearly stated that SUPERIOR was obligated to assign
the ownership of the KENNEX trademark to KUNNAN, the latter claimed that the Certificate
of Registration for the KENNEX trademark remained with SUPERIOR because Mariano Tan
Bon Diong (Mr. Tan Bon Diong), SUPERIOR’s President and General Manager, misled
KUNNAN’s officers into believing that KUNNAN was not qualified to hold the same due to
the “many requirements set by the Philippine Patent Office” that KUNNAN could not meet.
KUNNAN further asserted that SUPERIOR deceived it into assigning its applications for
registration of the “PRO KENNEX” trademark in favor of SUPERIOR, through an Assignment
Agreement dated June 14, 1983 whose pertinent provisions state:
1. In consideration of the distributorship relationship between KUNNAN and Superior,
KUNNAN, who is the seller in the distributorship relationship, agrees to assign the following
trademark applications owned by itself in the Philippines to Superior who is the buyer in the
distributorship relationship.
2. Superior shall acknowledge that KUNNAN is still the real and truthful owner of the
abovementioned trademarks, and shall agree that it will not use the right of the
abovementioned trademarks to do anything which is unfavourable or harmful to KUNNAN.
3. Superior agrees that it will return back the abovementioned trademarks to
KUNNAN without hesitation at the request of KUNNAN at any time. KUNNAN agrees that
the cost for the concerned assignment of the abovementioned trademarks shall be
compensated by KUNNAN. TAHIED
4. Superior agrees that the abovementioned trademarks when requested by
KUNNAN shall be clean and without any incumbency.
5. Superior agrees that after the assignment of the abovementioned trademarks, it
shall have no right to reassign or license the said trademarks to any other parties except
KUNNAN. [Emphasis supplied]
Prior to and during the pendency of the infringement and unfair competition case
before the RTC, KUNNAN filed with the now defunct Bureau of Patents, Trademarks and
Technology Transfer separate Petitions for the Cancellation of Registration Trademark Nos.
41032, SR 6663, 40326, 39254, 4730 and 49998, docketed as Inter Partes Cases Nos.
3709, 3710, 3811, 3812, 3813 and 3814, as well as Opposition to Application Serial Nos.
84565 and 84566,docketed as Inter Partes Cases Nos. 4101 and 4102 (Consolidated
Petitions for Cancellation) involving the KENNEX and PRO KENNEX trademarks. In
essence, KUNNAN filed the Petition for Cancellation and Opposition on the ground that
SUPERIOR fraudulently registered and appropriated the disputed trademarks; as mere
distributor and not as lawful owner, it obtained the registrations and assignments of the
disputed trademarks in violation of the terms of the Distributorship Agreement and Sections
2-A and 17 of Republic Act No. 166, as amended.
On December 3, 1991, upon the termination of its distributorship agreement with
SUPERIOR, KUNNAN appointed SPORTS CONCEPT as its new distributor. Subsequently,
KUNNAN also caused the publication of a Notice and Warning in the Manila Bulletin’s
January 29, 1993 issue, stating that (1) it is the owner of the disputed trademarks; (2) it
terminated its Distributorship Agreement with SUPERIOR; and (3) it appointed SPORTS
CONCEPT as its exclusive distributor. This notice prompted SUPERIOR to file its Complaint
for Infringement of Trademark and Unfair Competition with Preliminary Injunction against
KUNNAN.
The RTC Ruling
On March 31, 1998, the RTC issued its decision holding KUNNAN liable for
trademark infringement and unfair competition. The RTC also issued a writ of preliminary
injunction enjoining KUNNAN and SPORTS CONCEPT from using the disputed trademarks.
The CA Ruling
On June 22, 2005, the CA issued its decision in CA-G.R. CV No. 60777, reversing
and setting aside the RTC’s decision of March 31, 1998. It dismissed SUPERIOR’s
Complaint for Infringement of Trademark and Unfair Competition with Preliminary Injunction
on the ground that SUPERIOR failed to establish by preponderance of evidence its claim of
ownership over the KENNEX and PRO KENNEX trademarks. The CA found the Certificates
of Principal and Supplemental Registrations and the “whereas clause” of the Distributorship
Agreement insufficient to support SUPERIOR’s claim of ownership over the disputed
trademarks.
ISSUES:
A. WON THERE WAS INFRINGEMENT
B. WON THERE WAS UNFAIR COMPETITION
HELD:
A. NONE. Thus, we have previously held that the cancellation of registration of a
trademark has the effect of depriving the registrant of protection from infringement from the
moment judgment or order of cancellation has become final.
In the present case, by operation of law, specifically Section 19 of RA 166, the
trademark infringement aspect of SUPERIOR’s case has been rendered moot and academic
in view of the finality of the decision in the Registration Cancellation Case. In short,
SUPERIOR is left without any cause of action for trademark infringement since the
cancellation of registration of a trademark deprived it of protection from infringement from the
moment judgment or order of cancellation became final. To be sure, in a trademark
infringement, title to the trademark is indispensable to a valid cause of action and such title is
shown by its certificate of registration. With its certificates of registration over the disputed
trademarks effectively cancelled with finality, SUPERIOR’s case for trademark infringement
lost its legal basis and no longer presented a valid cause of action.
Even assuming that SUPERIOR’s case for trademark infringement had not been
rendered moot and academic, there can be no infringement committed by KUNNAN who
was adjudged with finality to be the rightful owner of the disputed trademarks in the
Registration Cancellation Case. Even prior to the cancellation of the registration of the
disputed trademarks, SUPERIOR — as a mere distributor and not the owner — cannot
assert any protection from trademark infringement as it had no right in the first place to the
registration of the disputed trademarks. In fact, jurisprudence holds that in the absence of
any inequitable conduct on the part of the manufacturer, an exclusive distributor who
employs the trademark of the manufacturer does not acquire proprietary rights of the
manufacturer, and a registration of the trademark by the distributor as such belongs to the
manufacturer, provided the fiduciary relationship does not terminate before application for
registration is filed.
To establish trademark infringement, the following elements must be proven: (1) the
validity of plaintiff’s mark; (2) the plaintiff’s ownership of the mark; and (3) the use of the
mark or its colorable imitation by the alleged infringer results in “likelihood of confusion.”
Based on these elements, we find it immediately obvious that the second element —
the plaintiff’s ownership of the mark — was what the Registration Cancellation Case decided
with finality. On this element depended the validity of the registrations that, on their own, only
gave rise to the presumption of, but was not conclusive on, the issue of ownership.
In no uncertain terms, the appellate court in the Registration Cancellation Case ruled
that SUPERIOR was a mere distributor and could not have been the owner, and was thus an
invalid registrant of the disputed trademarks. Significantly, these are the exact terms of the
ruling the CA arrived at in the present petition now under our review. Thus, whether with one
or the other, the ruling on the issue of ownership of the trademarks is the same. Given,
however, the final and executory ruling in the Registration Cancellation Case on the issue of
ownership that binds us and the parties, any further discussion and review of the issue of
ownership — although the current CA ruling is legally correct and can stand on its own
merits — becomes a pointless academic discussion.
B. NONE. From jurisprudence, unfair competition has been defined as the passing
off (or palming off) or attempting to pass off upon the public of the goods or business of one
person as the goods or business of another with the end and probable effect of deceiving the
public. The essential elements of unfair competition are (1) confusing similarity in the general
appearance of the goods; and (2) intent to deceive the public and defraud a competitor.
Jurisprudence also formulated the following “true test” of unfair competition: whether
the acts of the defendant have the intent of deceiving or are calculated to deceive the
ordinary buyer making his purchases under the ordinary conditions of the particular trade to
which the controversy relates. One of the essential requisites in an action to restrain unfair
competition is proof of fraud; the intent to deceive, actual or probable must be shown before
the right to recover can exist.
In the present case, no evidence exists showing that KUNNAN ever attempted to
pass off the goods it sold (i.e., sportswear, sporting goods and equipment) as those of
SUPERIOR. In addition, there is no evidence of bad faith or fraud imputable to KUNNAN in
using the disputed trademarks. Specifically, SUPERIOR failed to adduce any evidence to
show that KUNNAN by the above-cited acts intended to deceive the public as to the identity
of the goods sold or of the manufacturer of the goods sold. In McDonald’s Corporation v.
L.C. Big Mak Burger, Inc., we held that there can be trademark infringement without unfair
competition such as when the infringer discloses on the labels containing the mark that he
manufactures the goods, thus preventing the public from being deceived that the goods
originate from the trademark owner. In this case, no issue of confusion arises because the
same manufactured products are sold; only the ownership of the trademarks is at issue.
Furthermore, KUNNAN’s January 29, 1993 notice by its terms prevents the public from being
deceived that the goods originated from SUPERIOR since the notice clearly indicated that
KUNNAN is the manufacturer of the goods bearing the trademarks “KENNEX” and “PRO
KENNEX.”
s. What is the penalty for unfair competition?
Independent of the civil and administrative sanctions imposed by law, a criminal penalty of
imprisonment from two (2) years to five (5) years and a fine ranging from Fifty thousand
pesos (P50,000) to Two hundred thousand pesos (P200,000), shall be imposed on any
person who is found guilty of committing any of the acts mentioned in Section 155, Section
168 and Subsection 169.1.
_________________________
WEEK 14
a. What is a copyright?
-the exclusive legal right, given to an originator or an assignee to print, publish, perform, film,
or record literary, artistic, or musical material, and to authorize others to do the same.
a.1. Discuss Pearl and Dean v. Shoemart.
P&D owned the copyright to the technical design of a light box. SMI was making
these light boxes for their own purposes. P&D sued SMI asserting their copyright. Only issue
is that they owned the copyright to the technical design only, not the patent. They can’t sue
SMI for building the light boxes. They would need to have registered a patent for the light
boxes if they wanted to have exclusive right to build the light boxes
b. What is the scope of a copyright under Sec. 172 of RA 8293?
72.1. Literary and artistic works, hereinafter referred to as “works”, are original intellectual
creations in the literary and artistic domain protected from the moment of their creation and
shall include in particular:
(a) Books, pamphlets, articles and other writings;
(b) Periodicals and newspapers;
(c) Lectures, sermons, addresses, dissertations prepared for oral delivery, whether or not
reduced in writing or other material form;
(d) Letters;
(e) Dramatic or dramatico-musical compositions; choreographic works or entertainment in
dumb shows;
(f) Musical compositions, with or without words;
(g) Works of drawing, painting, architecture, sculpture, engraving, lithography or other works
of art; models or designs for works of art;
(h) Original ornamental designs or models for articles of manufacture, whether or not
registrable as an industrial design, and other works of applied art;
(i) Illustrations, maps, plans, sketches, charts and three-dimensional works relative to
geography, topography, architecture or science;
(j) Drawings or plastic works of a scientific or technical character;
(k) Photographic works including works produced by a process analogous to photography;
lantern slides;
(l) Audiovisual works and cinematographic works and works produced by a process
analogous to cinematography or any process for making audio-visual recordings;
(m) Pictorial illustrations and advertisements;
(n) Computer programs; and
(o) Other literary, scholarly, scientific and artistic works.
172.2. Works are protected by the sole fact of their creation, irrespective of their mode or
form of expression, as well as of their content, quality and purpose.
c. What is a derivative work?
In copyright law, a derivative work is an expressive creation that includes major
copyrightable elements of an original, previously created first work. The derivative work
becomes a second, separate work independent in form from the first.
d. What is a publisher’s right?
Right to distribute a copyrighted work given by the copyright owner
e. What are the non-copyrightable works under Sec. 175 of RA 8293?
-Unprotected Subject Matter. ‑ Notwithstanding the provisions of Sections 172 and 173, no
protection shall extend, under this law, to any idea, procedure, system, method or operation,
concept, principle, discovery or mere data as such, even if they are expressed, explained,
illustrated or embodied in a work; news of the day and other miscellaneous facts having the
character of mere items of press information; or any official text of a legislative,
administrative or legal nature, as well as any official translation thereof.
f. What are the rules on copyright ownership under Section 178 of RA 8293?
Copyright ownership shall be governed by the following rules:
178.1. Subject to the provisions of this section, in the case of original literary and artistic
works, copyright shall belong to the author of the work;
178.2. In the case of works of joint authorship, the co-authors shall be the original owners of
the copyright and in the absence of agreement, their rights shall be governed by the rules on
co-ownership. If, however, a work of joint authorship consists of parts that can be used
separately and the author of each part can be identified, the author of each part shall be the
original owner of the copyright in the part that he has created;
178.3. In the case of work created by an author during and in the course of his employment,
the copyright shall belong to:
(a) The employee, if the creation of the object of copyright is not a part of his regular duties
even if the employee uses the time, facilities and materials of the employer.
(b) The employer, if the work is the result of the performance of his regularly-assigned
duties, unless there is an agreement, express or implied, to the contrary.
178.4. In the case of a work commissioned by a person other than an employer of the author
and who pays for it and the work is made in pursuance of the commission, the person who
so commissioned the work shall have ownership of the work, but the copyright thereto shall
remain with the creator, unless there is a written stipulation to the contrary;
178.5. In the case of audiovisual work, the copyright shall belong to the producer, the author
of the scenario, the composer of the music, the film director, and the author of the work so
adapted. However, subject to contrary or other stipulations among the creators, the producer
shall exercise the copyright to an extent required for the exhibition of the work in any
manner, except for the right to collect performing license fees for the performance of musical
compositions, with or without words, which are incorporated into the work; and
178.6. In respect of letters, the copyright shall belong to the writer subject to the provisions
of Article 723 of the Civil Code.
g. What is copyright infringement?
the use of works protected by copyright law without permission for a usage where such
permission is required
g.1. Discuss ABS-CBN Corporation v. Gozon, et al.
ABS-CBN had an embargo agreement with Reuters to do coverage of the
homecoming of Filipino overseas worker and hostage victim Angelo dela Cruz on July 22,
2004
ABS-CBN "conducted live audio-video coverage of and broadcasted the arrival of
Angelo dela Cruz at the Ninoy Aquino International Airport (NAIA) and the subsequent press
conference."[8] ABS-CBN allowed Reuters Television Service (Reuters) to air the footages it
had taken earlier under a special embargo agreement.[9]
ABS-CBN alleged that under the special embargo agreement, any of the footages it
took would be for the "use of Renter's international subscribers only, and shall be considered
and treated by Reuters under 'embargo' against use by other subscribers in the Philippines. .
. . [N]o other Philippine subscriber of Reuters would be allowed to use ABS-CBN footage
without the latter's consent."[10]
GMA-7, to which Gozon, Duavit, Jr., Flores, Soho, Dela Peña-Reyes, and
Manalastas are connected, "assigned and stationed news reporters and technical men at the
NAIA for its live broadcast and non-live news coverage of the arrival of dela Cruz."[11] GMA-
7 subscribes to both Reuters and Cable News Network (CNN). It received a live video feed
of the coverage of Angelo dela Cruz's arrival from Reuters.[12]
Ang GMA may subscription sa Reuters tas brinoadcast nila yung footage ng ABS.
Sabi ng GMA pwede nila gawin yun kasi you cant copyright news. Pero, may copyright sila
sa footage na tinake nila
h. What are the acts that do not constitute copyright infringement under Sec.184 of RA
8293?
the following acts shall not constitute infringement of copyright:
(a) The recitation or performance of a work, once it has been lawfully made accessible to the
public, if done privately and free of charge or if made strictly for a charitable or religious
institution or society; (Sec. 10(1), P.D. No. 49)
(b) The making of quotations from a published work if they are compatible with fair use and
only to the extent justified for the purpose, including quotations from newspaper articles and
periodicals in the form of press summaries: Provided, That the source and the name of the
author, if appearing on the work, are mentioned; (Sec. 11, third par., P.D. No. 49)
(c) The reproduction or communication to the public by mass media of articles on current
political, social, economic, scientific or religious topic, lectures, addresses and other works of
the same nature, which are delivered in public if such use is for information purposes and
has not been expressly reserved: Provided, That the source is clearly indicated; (Sec. 11,
P.D. No. 49)
(d) The reproduction and communication to the public of literary, scientific or artistic works as
part of reports of current events by means of photography, cinematography or broadcasting
to the extent necessary for the purpose; (Sec. 12, P.D. No. 49)
(e) The inclusion of a work in a publication, broadcast, or other communication to the public,
sound recording or film, if such inclusion is made by way of illustration for teaching purposes
and is compatible with fair use: Provided, That the source and the name of the author, if
appearing in the work, are mentioned;
(f) The recording made in schools, universities, or educational institutions of a work included
in a broadcast for the use of such schools, universities or educational institutions: Provided,
That such recording must be deleted within a reasonable period after they were first
broadcast: Provided, further, That such recording may not be made from audiovisual works
which are part of the general cinema repertoire of feature films except for brief excerpts of
the work;
(g) The making of ephemeral recordings by a broadcasting organization by means of its own
facilities and for use in its own broadcast; (means Records created solely for the purpose of
facilitating a transmission of a public performance of a Record.)
(h) The use made of a work by or under the direction or control of the Government, by the
National Library or by educational, scientific or professional institutions where such use is in
the public interest and is compatible with fair use;
(i) The public performance or the communication to the public of a work, in a place where no
admission fee is charged in respect of such public performance or communication, by a club
or institution for charitable or educational purpose only, whose aim is not profit making,
subject to such other limitations as may be provided in the Regulations; (n)
(j) Public display of the original or a copy of the work not made by means of a film, slide,
television image or otherwise on screen or by means of any other device or process:
Provided, That either the work has been published, or, that the original or the copy displayed
has been sold, given away or otherwise transferred to another person by the author or his
successor in title; and
(k) Any use made of a work for the purpose of any judicial proceedings or for the giving of
professional advice by a legal practitioner.
184.2. The provisions of this section shall be interpreted in such a way as to allow the work
to be used in a manner which does not conflict with the normal exploitation of the work and
does not unreasonably prejudice the right holder’s legitimate interests.
i. What is fair use of copyrighted work?
is any copying of copyrighted material done for a limited and “transformative” purpose, such
as to comment upon, criticize, or parody a copyrighted work. Such uses can be done without
permission from the copyright owner.
j. What is plagiarism?
-taking another person’s work and claiming it as your own
k. Distinguish plagiarism different from copyright infringement.
-plagiarism is claiming that you are the owner or creator of something while copyright
infringement is reproducing a copyrighted work without proper authorization
l. When is reproduction of published work allowed?
-exclusively for research and private study and not the whole book
-court decisions, yung kaso mismo
m. When is reproduction by libraries allowed?
-when the physical book needs to be preserved or replace copy, kapag may need na
ipahiram tas di pwede yung og, kapag sa composite works tas kailangan mo yung parts
n. When is reproduction of a computer software/program allowed?
-when it is a backup copy or adaptation (kapag iiimprove yung program) of a computer
program
-kapag mag iinstall ng copy sa bagong computer
o. Define moral rights. What is its scope?
-personal rights that connect a creator to their work
-scope - attribution right (put name on work), make alterations on their work or withhold from
publication, object to changes to their work, restrain the use of their name with respect to
any work not their own
p. What is the term of protection of a copyright?
-Lifetime of author + 50 years after death.
q. What is a patent?
-a government authority or license conferring a right or title for a set period, especially the
sole right to exclude others from making, using, or selling an invention.
r. What is the term of protection of a patent?
-20 years from date of filing, non-renewable
s. What is a patentable invention?
-Patentable inventions are any technical solution of a problem in any field of human activity
that is new, involves an inventive step, and is industrially applicable.
t. What are the non-patentable inventions?
-discoveries, scientific theories, mathematical methods, mere discovery of a new form or
new property of a known substance
u. What are the elements of patentability?
-novelty (new), inventive step, industrial applicability
v. What is the first-to-file rule?
-In a first-to-file system, the right to the grant of a patent for a given invention lies with the
first person to file a patent application for protection of that invention, regardless of the date
of actual invention. (first come first serve)
w. What is patent infringement?
-unauthorized use, sale, creation of a registered patent
w.1. Discuss del Rosario v. Court of Appeals.
Roberto del rosario was the patentee of an audio equipment and improved audio equipment
commonly known as the sing-along System or karaoke. Respondent was manufacturing
something that was almost same to his patent but with small differences. (miyata). Asked for
writ of preliminary injunction to stop respondent, was given. Rtc agreed. On appeal by
respondent, CA reversed RTC, saying that karaoke machines have already existed long
before the patent of petitioner,
Petitioner has sufficiently established his patent contrary to the CA’s findings.
Respondent corporation was unable to provide evidence that petitioner had no patent rights.
Respondent had patent infringement because he made, used, and sold karaoke without the
patent rights. Additionally, the designs were strikingly similar, with only names and small
designs being changed. Equivalence test, same function, same modes of operation, with
only minor diff
Siya din nag imbento ng minus 1, eh gumamit din yung miyata ng minus 1, lalong
nabokya
x. What are the tests to determine infringement?
-literal - kung ano yung nakaregister tas pag kinompare sa product at pareho lang yung
ginagawa
-doctrine of equivalence - slight differences but same function
x.1. Discuss Godines v. CA.
Facts:
Respondent SV-Agro Industries acquired a letter patent issued to one Magdalena Villaruz
which covers a utility model for hand tractor or power tiller by virtue of a deed of assignment
executed by the latter in its favor. Respondent after suffering a decline in sales of the
patented power tillers, investigated and discovered that petitioner Godines was
manufacturing the same power tillers as they have. Respondent thus filed a complaint for
patent infringement and unfair competition against petitioner Godines. The trial court held
petitioner liable for infringement. CA affirmed.
Issue:
Whether or not petitioner’s products infringe upon the patent of respondent SV-Agro.
Ruling: YES.
Tests have been established to determine infringement. These are (a) literal infringement;
and (b) the doctrine of equivalents. In using literal infringement as a test, “. . . resort must be
had, in the first instance, to the words of the claim. If accused matter clearly falls within the
claim, infringement is made out and that is the end of it.” To determine whether the particular
item falls within the literal meaning of the patent claims, the court must juxtapose the claims
of the patent and the accused product within the overall context of the claims and
specifications, to determine whether there is exact identity of all material elements. It
appears from the observation of the trial court that these claims of the patent and the
features of the patented utility model were copied by petitioner: In appearance and form,
both the floating power tillers of the defendant and the turtle power tiller of the plaintiff are
virtually the same. Viewed from any perspective or angle, the power tiller of the defendant is
identical and similar to that of the turtle power tiller of plaintiff in form, configuration, design
and appearance. The parts or components thereof are virtually the same. In operation, the
floating power tiller of the defendant operates also in similar manner as the turtle power tiller
of plaintiff.
Petitioner’s argument that his power tillers were different from private respondent’s is that of
a drowning man clutching at straws. Recognizing that the logical fallback position of one in
the place of defendant is to aver that his product is different from the patented one, courts
have adopted the doctrine of equivalents. Thus, according to this doctrine, “(a)n infringement
also occurs when a device appropriates a prior invention by incorporating its innovative
concept and, albeit with some modification and change, performs substantially the same
function in substantially the same way to achieve substantially the same result.” In this case,
the trial court observed: But a careful examination between the two power tillers will show
that they will operate on the same fundamental principles.
We are compelled to arrive at no other conclusion but that there was infringement.
y. What is a utility model?
-new and industrially applicable, no inventive step because they’re just developments on
existing design. Minor patent or innovation patent or petty patent or small patent
z.1. Discuss Ching v. Salinas.
aa. What is an industrial design?
-special appearance, purely ornamental function, pa-extra. Like a chair with massage
function
bb. What is the term of protection for a utility model and an industrial design?
-7 years from the date of filing (utility) (non-renewable)
-5 years from the date of filing (industrial) (renewable but only once)
31812
Management accounting - identification, measurement, accumulation, preparation,
interpretation, and communication of financial communication, which is used by the
management to plan, evaluate, and control activities within an organization
-
-
Involves application of appropriate techniques and concepts to economic data so as
to assist management in establishing plans for reasonable economic objectives and
in the making of rational decisions with a view toward achieving these objectives
ESSENTIALLY, using financial info to make decisions. Only to serve the internal
parties.
[no format]
Scope - reporting and interpreting financial information - to make assessments of the
situations in the corporation
- Problem solving - to solve those problems after assessing the situation from the
financial reports
- Data accumulation or scorekeeping
Administrative functions of management accountant
-
Planning - evaluating, choosing best way to meet goals - [thinking] - a key activity for
all companies - quantitative, but supported by qualitative - profit planning [break even
analysis, projected income statement] - resource planning [cash budget capital
budget, balance sheet]
-
Controlling - evaluation on whether actual performance goes with plan - [deciding if it
will work] - control is achieved by evaluating the performance of the managers and
the operations - performance reports [used to evaluate managers and operations] accounting control reports inform managers when activities deviate from the plan
-
Decision making - determination of recommendations or predictive information that
will help the management in decision making - [putting forward actual decision] - how
well the company makes decisions will determine future profitability, survival of the
company, and viability of operations - integral part of planning and control process
[General appropriations act - from department of finance that goes to congress]
Management accounting vs financial accounting
Management acc - concerned with providing financial info to persons within the organization
to help in decisions.
Financial acc - standard accounting
FA
MA
External and internal users
Internal only
Uses historical data [e.g. 2019 info for 2019
statement]
Historical and projected data
Reports the company as a whole
Reports parts and segments only
Required by law (external reports)
Not mandatory (because only top
management needs it)
Summaries of past financial transactions
Future oriented
In compliance with IFRS (international
financial reporting standard)
May not conform to IFRS
Must be precise
Timeliness over precision
Objectivity and verifiability are emphasized
Relevance is emphasized
Line vs staff relationship function
Line authority - authority to give command down to subordinate
Staff authority - authority to advise but not command, either laterally or upward
Functional authority - right to command laterally or downward on how to apply procedures,
or with regard to specific function or specialty
---------------1. What are the very important reasons why an internal accountant analyzes the
financial statements of the company?
tracking payments to internal and external stakeholders
manage all financial transactions from fixed payments to budgets
=not only the responsibility to prepare and audit for bookkeeping purpose but also to
know the company's financial health and liquidity
--- assess operational efficiency and strengths and weakness - to improve strategies for
the company.
It is important for accountant to analyze the financial statementt because it serves as an
overview of a corporation's financial standing at a particular point in time, giving insight into its
performance, operations, cash flow, and overall conditions. Furthermore, it could also be used as
a point of reference in decision making.
External Larger organizations typically have both functions, thereby ensuring that their records,
processes, and financial statements are closely examined at regular intervals.
2. Why is financial statement analysis of interest to creditors, investors, and financial
institutions? - FS analysis helps to know the financial health of the company based
on the transactions.
as capital providers they rely on these matters speaking both of safety and profitability pf
their investments - financial statement analysis provides information about company's asset
investment
where their money went
creditors
entity that allows or permits another to borrow money to be repaid in the future. lender
not only to know if you have the means to apply for a loan but its bec they have the right
to take possession to the properties na nasecure if ever you dont meet ur obligations. in that way
interested sila sa assets ng isang tao.
The objective of financial statements is to provide information about the financial position,
performance and changes in financial position of an enterprise that is useful to a wide range of
users in making economic decisions. It is of interest becasue it dictates the performance of the
company whether it is thriving or not. Ofcourse, the investors, stakeholders, creditors, and
financial insitutions are very much interested sinc ethey are the ones who are investing in the
company.
Creditors use financial statements to determine if the business represents a sound credit
risk, as well as its ability to repay debt as agreed.
Analyzing the statements not only helps investors determine if a company is making
money, but it also helps to identify a reasonable cost per share.
Internal vs. external - internal has access to the raw financial information while external only has
access to what is given to them. Internal can tell management how the business can do better,
while external do not have such responsibility. They only need to review statements if they
conform to generally accepted accounting principles and then report the findings to
shareholders instead of management.
______
The Financial Statements
Reasons for Financial statement analysis:
- To indicate the financial health of the company because it has bearing upon
the following:
- LPGSS - liquidity [ability to pay short term loans] profitability
[seen in income statement] growth [whether assets are growing
or depleting] solvency [ability to pay long term loans] stability
[balance sheet]
- Price earnings ratio
- Bond rating - [bond is evidence of long term investment,
indicator ng financial health kasi rating.]
- Cost of financing - interest being paid to the money you’re
paying back to creditors or the bank
- Availability of financing -
To indicate areas requiring audit attention
Financial statement [income statement, balance sheet, statement of changes in
equity, statement of cash flows]
- Presents the summarized data of its assets, liabilities, and equities in the
balance sheet [LPGSS]
- Present the summarized data of revenue and expense in the income
statement [profitability]
- If not analyzed, may lead to incorrect conclusion about the company’s
financial condition
Financial statements are vital
Stability of company can be seen in the balance sheet
The income statement - tells about the performance of a business over a period of
time as a result of its activities.
- Represents the revenues and expenses of a business during one accounting
period
- If revenues exceed expenses, it produces net income
- If expenses exceed revenues, it is called net loss
Income statement first before balance sheet to find out if the company got a net
income or net loss.
The Balance sheet
- Prepared to show its financial position on a specific date which is normally the
last day of the month, last day of the quarter, or the last day of the year.
- Reflects the assets, liabilities, and capital balances of the company
- Assets are normally classified as current assets [cash, receivables, anything
that can be converted into cash for a period of one year or less], long term
investments [can be collected beyond one year], fixed assets [equipment,
fixtures, buildings, long term use, subject to depreciation] intangibles, and
other assets
- Liabilities are classified as current liabilities [less that one year, includes
payables] and long term liabilities [more than one yea, mortgage payabler]
- Capital shows the investments, withdrawal, net income, or net loss in a
business
[impractical to do accounting daily because some transactions come to you on
regular basis like paying monthly for utilities]
If current and long term assets are not separated, they can impact the computation
of liquidity and solvency
Depreciation
Balance sheet components
Assets
Liabilities
Capital - excess of assets over liabilities, represents the claim of the business
owner or owners
Statement of cash flows
- Shows the inflow and outflow of cash
- How these funds have been used
- 3 types: operating cash flow [revenues, salaries, utilities, advertising and
promotions, insurance, GAE/DOE Capex, Project Capex], investing cash flow
[purchase and sale of equipment, investments and securities and time
deposit, other non current assets, corporate capex, equity infusion/redemption
of shares, dividends paid/dividends received], financing cash flow [proceeds
from loans/payment on loans, sale of capital stock/repurchase of stock
- Formula for operating: Beginning balance and cash, add operating activities
inflow, minus operating activities outflow, add investing activities inflow, minus
investing activities outflow, add financing activities inflow, minus financing
activities outflow = net cash balance
FINANCIAL STATEMENT ANALYSIS: computations that measure the company’s
LPGSS.
2 techniques - horizontal [comparison of 2 or more accounting periods] - comparative
analysis [difference in absolute amount and in percentage, two or more accounting
periods] and trend analysis [uses indexes and ratios]
- Vertical [only one accounting period] - common size statement and financial
ratios
HORIZONTAL VS VERTICAL [add yung pic galing messenger]
VERTICAL ANALYSIS:
1. Common size statement - gets the proportion in percentage for all figures
reported in the balance sheet and income statement [assets = liabilities +
capital]
a. Balance sheet - 100% base is the total assets
b. Income statement - 100% base in the net sales [NET SALES =
GROSS SALES - SALES DISCOUNT - SALES RETURNS AND
ALLOWANCES]
c. Cash flow statement - 100% base is the total cash available for use
2. Financial ratios - measures the company profitability, liquidity, growth, and
stability through the use of financial mix ratios
a. Liquidity ratios - measures the ability of the company to raise funds and
pay its current obligations within one year or less
i.
ii.
iii.
[Current ratio = current assets / current liabilities]
[Working capital = current assets - Current Liabilities]
[Acid assets ratio = quick assets / current liabilities] quick assets
are current assets that are easier to liquidate than others. [Quick
assets = cash + marketable securities + trade receivables]
b. Profitability ratio - measures the company’s ability to earn from its
business operations
i.
ii.
iii.
iv.
[Gross profit rate = gross profit / net sales]
[Return on Investment = net income / average investments]
average investment [(start of year investment + end of year
investment) / 2]
[Return on assets = net income / average assets]
[Return on equity = net income / average stockholder’s equity]
c. Stability and Leverage ratios = measures the ability of the company to
maximize stockholder’s equity through capital investment or use of
debt
i.
ii.
iii.
iv.
[Debt to equity ratio = Total debt / net stockholder’s equity]
[Debt to assets ratio = total debt / total assets]
[Equity to assets rato = nET STOCKHOLDER’S EQUITY / total
assets]
[Assets to liabilities ratio = Total assets / total liabilities]
d. Cash flow ratios
i.
ii.
iii.
iv.
[Cash flow adequacy = cash from operations / long term debt +
purchases of assets]
[Long term debt payment = Long term debt payments / cash
from operations]
[Cash flow to net income - cash from operations / income from
ordinary operations]
[Reinvestment ratio = purchase of assets / cash from operations]
Higher accounts receivable turnover = better
Lower average collection period = better
Common size statement - [insert pic sa messenger]
=================================================
COST
- The value foregone for the purpose of achieving economic benefit which will
lead to profitability of a company
- It is an outlay or expenditure of money to acquire goods or services that assist
in performing operations
- In management accounting, cost may be used in various ways. For instance,
external reports require the use of historical data whereas decision making
may require current cost data
COST OBJECT
- Any product, service, or organizational unit to which cost are assigned for
some management purpose
-
Any item to where costs can be traced and has a key role in management
strategy can be considered a cost object
- Products and services are generally cost objects
COST POOLS
- Cost classified into meaningful groups
- By type of cost - labor cost in one, material cost in another
- By source - territory 1, territory 2, department 1, department 2, etc.
- By responsibility - department manager 1, department manager 2, etc
COST DRIVERS
- Any factor that has the effect of changing the level of total cost
- Essential for a firm that competes on cost leadership
- Focusing attention to the key cost driver contributes directly to the success of
the firm
COST ASSIGNMENT - assigning costs to cost people or from cost pools to cost
objects
COST ALLOCATION - is the assignment of indirect costs to cost pools
ALLOCATION BASES - are cost drivers used to allocate cost
COSTS ACCDNG TO NATURE
Manufacturing costs - costs associated with production of goods
Direct materials - materials for finished product
Direct labor - labor to make material into
Manufacturing or Factory overhead.
Indirect materials - does not form a finished products
Indirect labor - cannot be directly identifiable to a finished
product
Nonmanufacturing costs - costs relating to selling and other activities not
related to production of goods.
Marketing costs
General and Administrative costs - all other costs associated with the
general management of the business
COSTS ACCORDING TO COSTS BEHAVIOR
[Cost behavior - how a cost will react or respond to changes in the business activity]
Fixed costs - costs that remain unchanged regardless of volume of production
Variable costs - costs that change directly in proportion to the volume of
production
Semi variable or mixed costs - contains both fixed and variable
elementsACCDNG TO TYPES OF INVENTORY
- Raw materials
- Work in process
- Finished goods inventory
===================================================
COMPONENTS OF RESPONSIBILITY ACCOUNTING
-
Costs and revenues can be directly linked to a specific level of responsibility
Costs and revenues can be controlled at that level of responsibility
Budget data can be used for evaluation
RESPONSIBILITY ACCOUNTING FOCUSES ON CONTROLLABLE COSTS AT
DIFFERENT LEVELS OF MANAGEMENT
Major component of responsibility accounting is the creation of responsibility centers.
RESPONSIBILITY CENTERS - a manager that controls a set of activities in an
organization
RESPONSIBILITY REPORTS - are types of flexible budgets that are used to
evaluate managers
3 TYPES OF RESPONSIBILITY CENTERS
- Cost centers - incurs only costs and does not help generate revenue
- Profit centers - incurs cost but also generates revenue
- Investment centers - incurs both revenues and costs and the manager has the
ability to control asset related decisions
================================================================
Fixed Total cost - 120000
Variable cost per unit - 5
Unit selling price - `10
1. Breakeven units = total fixed costs / CM per unit (selling price per unit variable cost per unit) = 120000 / 5 = 24000 units
2. Breakeven sales =
Desired Unit Sales = Total Fixed Costs + Desired Profit / CM per unit
Desired Peso Sales = Total Fixed Costs + Desired Profit / CM ratio
Desired Profit after taxes = Fixed Cost + (Target profit after tax/1 - tax rate)
CM ratio
[CM = Contribution margin]
E.g. tax rate is 20%
Sales per unit - 250
Variable cost per unit - 150
Fixed costs - 50000
Target profit after tax - 30000
50000 + (30000/1 - 20) =
.40
Margin of Safety = Actual Sales - Breakeven sales
- To help identify the company’s “wiggle room”, meaning how much their sales
can go down without losing any money
Degree of Operating Leverage = Contribution Margin / Net income
- Tells companies how net income changes in relation to changes in sales
numbers.
- Lower DOL is better because higher DOL means higher risk due to larger
decrease in sales numbers
Sales (20000 units)
Variable Costs
Contribution Margin
Fixed costs
Net Income
1200000
(900000)
300000
(240000)
60000
60 per unit
(45) per unit
15 per unit
1. CM ratio = either total contribution margin / total sales or contribution margin
per unit / sales per unit = .25
2.
3.
4.
5.
Variable cost ratio = total variable costs / sales = 900000 / 1200000 = .75
Breakeven units = total fixed costs / cm per unit = 240000 / 15 = 16000 units
Break even pesos = total fixed costs / cm ratio = 240000 / .25 = 960000 pesos
If they wanted to earn 100000 pesos, how many units? = total fixed costs +
desired profit / cm per unit = 240000 + 100000 = 340000 / 15 = 22666.66
repeating, so 22667
6. Margin of safety = actual sales - break even sales = 1200000 - 960000 =
240000
7. DOL = 300000 / 60000 = 5
=======
Sales
600,000
Variable Costs
420,000
Contribution Margin 180,000
Fixed Costs
150,000
Net Income
30,000
40 per unit
28 per unit
12 per unit
1. What is the monthly break-even point in units and in peso sales
Cm ratio = cm / sales = 180000 / 600000 = .30
Break even units = total fixed costs / cm per unit = 150000 / 12 = 12500 units
Break even peso sales = total fixed costs / cm ratio = 150000 / .30 = 500000
pesos
Monthly BE units = 12500 / 12 = 1041.6666 repeating so 1042 units
Monthly BE peso sales = 500000 / 12 = 41666.67 pesos
2. What is the total contribution margin at break even point?
If contribution margin is at 12 per unit, and break even units are at 12500
units, 12 x 12500 = 150000
3. How many units each month to earn a target profit of 18000?
1042 units to break even times sales per unit of 40, total of 41680 break even
peso sales each month. Profit of 18000, add it to break even peso sales =
59680 pesos. Divide 59680 by 40 per unit = 1492 units
4. Company’s margin of safety in both peso and percentage terms
Margin of safety = actual sales - breakeven sales = 600000 - 500000 =
100000. 100000 pesos margin of safety. Relative to actual sales, 16.67 percent.
Relative to breakeven sales, 20 percent
5. Company’s cm ratio? If monthly sales increase by 80000 and there is no
change in fixed expenses, by how much would you expect monthly net
operating income to increase?
Cm ratio = 180000 / 600000 = .30
Monthly sales increase by 80000, if total of 600000, then monthly would be
50000 + 80000 = 130000 monthly, making it 15,600,000 total. Subtract from total
fixed cost and total variable cost = 15,030,000 net operating income. Original net
operating income is 30000, so if monthly, 30000/12 = 2500. New total net operating
income is 15,030,000, so 15030000/12 = 1,252,500. Therefore, monthly net total
operating income increases by [1,250,000 pesos].
6. Desired peso sales if the company would like to earn 40000 after tax? Tax
rate is 20%
Desired peso sales = total fixed costs + (target profit after tax/1-tax rate)/cm
ratio
= 150000 + (40000/1-.20)/ .30 = 666,666.67
______________
31811
Judicial System. Not only founded on the law, but also the consti.
3 branches, executive: executing laws , judiciary: interprets , legislative: makes the
laws. [interdependent]
In impeachment, lower house filed the charges then transferred to senate, senate
acts as judge, to be presided by the chief justice of the supreme court. [basically
mga constitut
ional body members are subject to impeachment]
Laws. lower house 3 readings → upper house 3 readings →
Construction of the supreme court
In the expanded definition of judicial power,
Distinction between justiciable and political question - political needs the wisdom of
other branches of govt, falling within the discretion of the other branch of govt.
1. Distinguish between justiciable and political question by enumerating and
explaining the elements.
Elements of justiciable question:
Elements of political question:
2. Give at least 4 examples of each.
========================
NEW ANTI TERRORISM LAW. WHAT’S YOUR STAND REGARDING THIS LAW.
INDUCTIVE--facts to justify AND DEDUCTIVE--as many premises as possible,
discuss the thought elements in each premise REASONING. TOULMIN.
==================================
ARTICLE 1849. After the formation of a limited partnership, additional limited
partners may be admitted upon filing an amendment to the original certificate in
accordance with the requirements of article 1865.
ARTICLE 1850. A general partner shall have all the rights and powers and be
subject to all the restrictions and liabilities of a partner in a partnership without limited
partners. However, without the written consent or ratification of the specific act by all
the limited partners, a general partner or all of the general partners have no authority
to:
(1) Do any act in contravention of the certificate;
(2) Do any act which would make it impossible to carry on the ordinary business of
the partnership;
(3) Confess a judgment against the partnership;
(4) Possess partnership property, or assign their rights in specific partnership
property, for other than a partnership purpose;
(5) Admit a person as a general partner;
(6) Admit a person as a limited partner, unless the right so to do is given in the
certificate;
(7) Continue the business with partnership property on the death, retirement,
insanity, civil interdiction or insolvency of a general partner, unless the right so to do
is given in the certificate.
ARTICLE 1851. A limited partner shall have the same rights as a general partner to:
(1) Have the partnership books kept at the principal place of business of the
partnership, and at a reasonable hour to inspect and copy any of them;
(2) Have on demand true and full information of all things affecting the partnership,
and a formal account of partnership affairs whenever circumstances render it just
and reasonable; and
(3) Have dissolution and winding up by decree of court.
A limited partner shall have the right to receive a share of the profits or other
compensation by way of income, and to the return of his contribution as provided in
articles 1856 and 1857.
ARTICLE 1852. Without prejudice to the provisions of article 1848, a person who has
contributed to the capital of a business conducted by a person or partnership
erroneously believing that he has become a limited partner in a limited partnership, is
not, by reason of his exercise of the rights of a limited partner, a general partner with
the person or in the partnership carrying on the business, or bound by the obligations
of such person or partnership; provided that on ascertaining the mistake he promptly
renounces his interest in the profits of the business, or other compensation by way of
income.
ARTICLE 1853. A person may be a general partner and a limited partner in the same
partnership at the same time, provided that this fact shall be stated in the certificate
provided for in article 1844.
A person who is a general, and also at the same time a limited partner, shall have all
the rights and powers and be subject to all the restrictions of a general partner;
except that, in respect to his contribution, he shall have the rights against the other
members which he would have had if he were not also a general partner.
ARTICLE 1854. A limited partner also may loan money to and transact other
business with the partnership, and, unless he is also a general partner, receive on
account of resulting claims against the partnership, with general creditors, a pro rata
share of the assets. No limited partner shall in respect to any such claim:
(1) Receive or hold as collateral security any partnership property, or
(2) Receive from a general partner or the partnership any payment, conveyance, or
release from liability, if at the time the assets of the partnership are not sufficient to
discharge partnership liabilities to persons not claiming as general or limited
partners.
The receiving of collateral security, or payment, conveyance, or release in violation
of the foregoing provisions is a fraud on the creditors of the parnership.
-------------------------
Research Design
Quantitative research shall be observed. In alignment with the significance stated
previously in this paper, the method to be applied in this situation would be a survey
questionnaire to be able to get the information that is relevant to the research. It has
been mentioned earlier in the paper that there is significance in gauging the informal
and formal economy, and so, statistical data acquired through such survey
questionnaires would be helpful in that endeavor.
================================================================
================================================================
31817
Resources are scarce
-
Scarcity - nature’s resources are limited
Economics - study of how society manages its scarce resources
How people make decisions:
1. people face tradeoffs.
- Making decisions
- Trade off one goal against another
- Like a student giving up sleep time to be early to class
- Or a company sacrificing efficiency for quality
2. Efficiency vs equality
- Efficiency - society getting the most it can from limited resources
- Equality - distributing economic prosperity uniformly among members of
society
3. The cost of something is what you give up to get it
-
opportunity cost - what must be given up in order to gain something
How much is a human life worth? - Value of statistical life which indicates how willingly people will pay to reduce
their chance of dying or how much extra pay they demand to take on a job
with a higher risk of death.
3rd principle: rational people think at the margin
Rational people systematically and purposefully do the best why can to achieve their
objectives
Marginal changes - incremental changes to a plan of action
Rational people take actions only if - marginal benefits > marginal costs
4th principle: people respond to incentives
Incentive - something that induces a person to act. Induces a change in behavior
-
-
Higher price
- Buyers consume less
- Sellers produce more
Public policy
- Change costs or benefits
- Change people’s behavior
5th principle: trade can make everyone better off
- Trade - allows each person to specialize in the activities he or she does best
- Enjoy a greater variety of goods and services at lower cost
- Trade Provides us with more choices
6th principle: markets are usually a good way to organize economic activity
- Communist countries - central planning (govt officials make all the decisions)
- -what to produce, how much, and for whom to produce
7th principle: govt’s can sometimes improve market outcomes
- The govt: enforce rules and maintain institutions, enforce property rights,
promote efficiency, avoid market failure, promote equality, avoid disparities in
economic well being
8th: a country’s standard of living depends on its ability to produce goods and
services.
- Large differences in living standards among countries over time
- Key: Differences in productivity
9th: prices rise when the govt prints too much money
- Causes inflation
- Growth in quantity of money, leading to the value of money falling
10: society faces a short run tradeoff between inflation and unemployment
--Economics
- Social science
Economists
- Scientists
- Devise theorise
- Collect data
- Analyzes this data to verify or refute the theories
The role of assumptions
Assumptions
- Can simplify the complex world - make it easier to understand
- Focus our thinking - essence of the problem
Different assumptions
- To answer different questions
- Short-run or long-run effects
Economic models
- Diagrams and equations
Circular flow diagram
- Visual model of the economy
- Shows how money flows thru the markets, among households and firms
- Decision makers - firms and households
- Markets in a simple economy - for goods and services, for factors of
production
-
The production possibilities frontier
- Shows the combinations of output that the economy can possibly produce.
The economy can produce any combination on or inside the frontier. Points
outside the frontier are not feasible given the economy’s resources
- If inside the curve, di nasasagad yung use of their resources
- If outside, not feasible
Microeconomics
- The study of how households and firms make decisions
- And how they interact in markets
Macroeconomics
- The study of economy-wide phenomena, including inflation, employment, and
economic growth
Positive vs. Normative analysis
Positive
- Attempts to describe the worlds as it is
- Descriptive
- Confirm or refute by examining evidence
Normative
- Attempt to prescribe how the world should be
- prescriptive
================================================================
31819
a. Discuss In re: Joaquin Borromeo, 241 SCRA 405, A.M. No. 93-7-696-0, 21
February 1995.
b. Discuss Department of Education Culture and Sports v. San Diego, G.R. No.
89572, 21 December 1989.
c. What is law as defined by St. Thomas Aquinas?
"an ordinance of reason for the common good, made by him who has care of the
community, and is promulgated.
d. Discuss the hierarchy of laws. (Article 7, Republic Act No. 386 or the Civil Code of
the Philippines)
Laws are repealed only by subsequent ones, and their violation or non-observance
shall not be excused by disuse, or custom or practice to the contrary.
When the courts declare a law to be inconsistent with the Constitution, the former
shall be void and the latter shall govern.
Administrative or executive acts, orders and regulations shall be valid only when they
are not contrary to the laws or the Constitution.
e. Discuss the hierarchy of courts.
f. What is an obligation according to the Civil Code?
An obligation is a juridical necessity to give, to do or not to do
g. Is the Civil Code’s definition of an obligation complete?
No because the definition only refers to contracts that can be enforced by the court.
It does not tell the remedies in the event of a breach.
h. Give the definition of an obligation according to Arias Ramos?
According to Arias Ramos, obligation is nothing more than the duty of a person
(debtor or obligor) to satisfy a specific and demandable claim of another person
(creditor or obligee) which if breached is enforced in court.
i. What are the sources of an obligation? Explain each.
Law
Contracts
Quasi-contracts - an obligation of one party to another imposed by law independently
of an agreement between the parties.
Acts or omissions punished by law
Quasi delicts - An act whereby a person, without malice, but by fault, negligence or
imprudence not legally excusable, causes injury to another.
j. Discuss Article 19 of the Civil Code.
Every person must, in the exercise of his rights and in the performance of his duties,
act with justice, give everyone his due, and observe honesty and good faith.
k. What is the principle of abuse of rights?
Using a legal right to annoy and infringe the right of others (essentially the right is
legal, but being used in a prejudiced manner)
l. What is the rationale for the principle of abuse of rights?
every person must, in the exercise of his rights and in the performance of his duties,
act with justice, give everyone his due, and observe honesty and good faith. A right,
although legal, may nevertheless become a source of illegality when such right is not
exercised in accordance with the norms enshrined in Article 19 and injures another.
m. What are the elements to hold a defendant liable under the principle of abuse of
rights?
(1) there is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole
intent of prejudicing or injuring another
1. Discuss University of the East v. Jader, G.R. No. 132344, 17 February 2000.
FACTS:
Plaintiff was enrolled in the defendants’ College of Law from 1984 up to 1988. In the
first semester of his last year (School year 1987-1988), he failed to take the regular
final examination in Practice Court I for which he was given an incomplete grade . He
enrolled for the second semester as fourth year law student and on February 1, 1988
he filed an application for the removal of the incomplete grade given him by
Professor Carlos Ortega which was approved by Dean Celedonio Tiongson after
payment of the required fee. He took the examination on March 28, 1988. On May
30, 1988, Professor Carlos Ortega submitted his grade. It was a grade of five (5).
The 35th Investitures & Commencement Ceremonies for the candidates of Bachelor
of Laws was scheduled on the 16th of April 1988, and in the invitation for that
occasion the name of the plaintiff appeared as one of the candidates. At the foot of
the list of the names of the candidates there is an annotation stating that the same is
a tentative list.
The plaintiff attended the investiture ceremonies and he was thereafter handed by
Dean Celedonio a rolled white sheet of paper symbolical of the Law Diploma. He
tendered a blow-out that evening which was attended by neighbors, friends and
relatives who wished him good luck in the forthcoming bar examination. He
thereafter prepared himself for the bar examination. He took a leave of absence
without pay from his job from April 20, 1988 to September 30, 1988 and enrolled at
the pre-bar review class in Far Eastern University . Having learned of the deficiency
he dropped his review class and was not able to take the bar examination.
Consequently, respondent sued petitioner for damages alleging that he suffered
moral shock, mental anguish, serious anxiety, besmirched reputation, wounded
feelings and sleepless nights when he was not able to take the 1988 bar
examinations arising from the latter’s negligence. He prayed for an award of moral
and exemplary damages, unrealized income, attorney’s fees, and costs of suit.
RTC’s Decision:
WHEREFORE, in view of the foregoing judgment is hereby rendered in favor of the
plaintiff and against the defendant ordering the latter to pay plaintiff the sum of
THIRTY FIVE THOUSAND FOUR HUNDRED SEVENTY PESOS (P35,470.00) with
legal rate of interest from the filing of the complaint until fully paid, the amount of
FIVE THOUSAND PESOS (P5,000.00) as attorney’s fees and the cost of suit.
CA’s Decision:
WHEREFORE, in the light of the foregoing, the lower Court’s Decision is hereby
AFFIRMED with the MODIFICATION that defendant-appellee, in addition to the sum
adjudged by the lower court in favor of plaintiff-appellant, is also ORDERED to pay
plaintiff-appellant the amount of FIFTY THOUSAND (P50,000.00) PESOS for moral
damages. Costs against defendant-appellee.
ISSUE:
Whether or not UE has liability to Romeo Jader, considering that the proximate and
immediate cause of the alleged damages incurred by the latter arose out of his own
negligence in not verifying from the professor concerned the result of his removal
exam.
RULING:
Petitioner, in belatedly informing respondent of the result of the removal examination,
particularly at a time when he had already commenced preparing for the bar exams,
cannot be said to have acted in good faith.
Article 19 was intended to expand the concept of torts by granting adequate legal
remedy for the untold number of moral wrongs which is impossible for human
foresight to provide specifically in statutory law. Schools and professors cannot just
take students for granted and be indifferent to them, for without the latter, the former
are useless.
Petitioner’s liability arose from its failure to promptly inform respondent of the result
of an examination and in misleading the latter into believing that he had satisfied all
requirements for the course.
“It is apparent from the testimony of Dean Tiongson that defendant-appellee
University had been informed during the deliberation that the professor in Practice
Court I gave plaintiff-appellant a failing grade. Yet, defendant-appellee still did not
inform plaintiff-appellant of his failure to complete the requirements for the degree
nor did they remove his name from the tentative list of candidates for graduation.
Worse, defendant-appellee university, despite the knowledge that plaintiff-appellant
failed in Practice Court I, again included plaintiff-appellant’s name in the “tentative”
list of candidates for graduation which was prepared after the deliberation and which
became the basis for the commencement rites program. Dean Tiongson reasons out
that plaintiff-appellant’s name was allowed to remain in the tentative list of
candidates for graduation in the hope that the latter would still be able to remedy the
situation in the remaining few days before graduation day. Dean Tiongson, however,
did not explain how plaintiff-appellant Jader could have done something to complete
his deficiency if defendant-appellee university did not exert any effort to inform
plaintiff-appellant of his failing grade in Practice Court I.
However, while petitioner was guilty of negligence and thus liable to respondent for
the latter’s actual damages, we hold that respondent should not have been awarded
moral damages. We do not agree with the Court of Appeals’ findings that respondent
suffered shock, trauma and pain when he was informed that he could not graduate
and will not be allowed to take the bar examinations. At the very least, it behooved
on respondent to verify for himself whether he has completed all necessary
requirements to be eligible for the bar examinations. As a senior law student,
respondent should have been responsible enough to ensure that all his affairs,
specifically those pertaining to his academic achievement, are in order. Given these
considerations, we fail to see how respondent could have suffered untold
embarrassment in attending the graduation rites, enrolling in the bar review classes
and not being able to take the bar exams. If respondent was indeed humiliated by his
failure to take the bar, he brought this upon himself by not verifying if he has satisfied
all the requirements including his school records, before preparing himself for the bar
examination. Certainly, taking the bar examinations does not only entail a mental
preparation on the subjects thereof; there are also prerequisites of documentation
and submission of requirements which the prospective examinee must meet.
WHEREFORE, the assailed decision of the Court of Appeals is AFFIRMED with
MODIFICATION. Petitioner is ORDERED to PAY respondent the sum of Thirty-five
Thousand Four Hundred Seventy Pesos (P35,470.00), with legal interest of 6% per
annum computed from the date of filing of the complaint until fully paid; the amount
of Five Thousand Pesos (P5,000.00) as attorney’s fees; and the costs of the suit.
The award of moral damages is DELETED.
2. Discuss University of San Carlos v. CA, G.R. No. L-79237, 18 October 1988.
3. Discuss Tan v. Valeriano, G.R. No. 185559, 02 August 2017.
n. What is the principle of damnum absque injuria?
Under the principle of damnum absque injuria, the legitimate exercise of a person's
right, even if it causes loss to another, does not automatically result in an actionable
injury and the law does not prescribe a remedy for the loss. However, this principle
admits of exception as when there is an abuse of a person's right.The exercise of
one's right should be done in a manner that will not cause injustice to another.
n.1. Discuss Heirs of Nala v. Cabansag, G.R. No. 161188, 13 June 2008.
Injury - broken law or smth
Damages - yung effect ng injury
---------------------------------------------------
a. Discuss Article 20 of the Civil Code.
Every person who, contrary to law, wilfully or negligently causes damage to another,
shall indemnify the latter for the same.
b. Discuss Article 21 of the Civil Code.
Any person who wilfully causes loss or injury to another in a manner that is contrary
to morals, good customs or public policy shall compensate the latter for the damage.
c. What are the elements of acts contra bonus mores?
(1) an act which is legal; (2) but which is contrary to morals, good custom, public
order or public policy; and (3) is done with intent to injure.
d. Is breach of promise to marry actionable?
- No
d.1. Discuss Hermosisima v. CA, L-14628, 30 September 1960.
d.2. Discuss Wassmer v. Velez, L-20089, 26 December 1964.
d.3. Discuss Bunag v. CA, G.R. No. 101749, 10 July 1992.
d.4. Discuss Baksh v. CA, G.R. No. 97336, 19 February 1993.
e. What is malicious prosecution?
initiating a criminal prosecution or civil suit against another party with malice and
without probable cause
f. What are the elements of malicious prosecution?
malice (1) and lack of probable cause (2)
f.1. Discuss Manila Gas Corp. v. CA, G.R. No. L-44190, 30 October 1980.
f.2. Discuss Carpio v. Valmonte, G.R. No. 151866, 9 September 2004.
g. What is Article 22?
Every person who through an act of performance by another, or any other means,
acquires or comes into possession of something at the expense of the latter without
just or legal ground, shall return the same to him.
h. What is unjust enrichment?
the retaining of a benefit (as money) given by another when principles of equity and
justice call for restitution to the other party
h.1. Discuss University of the Philippines v. Philab Industries, Inc., G.R. No.
152411, 29 September 2004.
i. What is an accion rem verso?
Accion In Rem Verso. It is an action for recovery of what has been paid without just
cause.
j. What are the requisites of accion rem verso?
(1) that the defendant has been enriched, (2) that the plaintiff has suffered a loss, (3)
that the enrichment of the defendant is without just or legal ground, and (4) that the
plaintiff has no other action based on contract, quasi-contract, crime or quasi-delict.
k. What is Article 23?
Even when an act or event causing damage to another’s property was not due to the
fault or negligence of the defendant, the latter shall be liable for indemnity if through
the act or event he was benefited.
l.What is Article 24?
In all contractual, property or other relations, when one of the parties is at a
disadvantage on account of his moral dependence, ignorance, indigence, mental
weakness, tender age or other handicap, the courts must be vigilant for his
protection.
m. What is Article 26?
Every person shall respect the dignity, personality, privacy and peace of mind of his
neighbors and other persons. The following and similar acts, though they may not
constitute a criminal offense, shall produce a cause of action for damages,
prevention and other relief:
(1) Prying into the privacy of another’s residence;
(2) Meddling with or disturbing the private life or family relations of another;
(3) Intriguing to cause another to be alienated from his friends;
(4) Vexing or humiliating another on account of his religious beliefs, lowly station in
life, place of birth, physical defect, or other personal condition.
n. What is Article 27?
Any person suffering material or moral loss because a public servant or employee
refuses or neglects, without just cause, to perform his official duty may file an action
for damages and other relief against the latter, without prejudice to any disciplinary
administrative action that may be taken.
o. What is Article 28?
Unfair competition in agricultural, commercial or industrial enterprises or in labor
through the use of force, intimidation, deceit, machination or any other unjust,
oppressive or highhanded method shall give rise to a right of action by the person
who thereby suffers damage.
p. What is Article 29?
When the accused in a criminal prosecution is acquitted on the ground that his guilt
has not been proved beyond reasonable doubt, a civil action for damages for the
same act or omission may be instituted. Such action requires only a preponderance
of evidence. Upon motion of the defendant, the court may require the plaintiff to file a
bond to answer for damages in case the complaint should be found to be malicious.
If in a criminal case the judgment of acquittal is based upon reasonable doubt, the
court shall so declare. In the absence of any declaration to that effect, it may be
inferred from the text of the decision whether or not the acquittal is due to that
ground.
q. What is Article 30?
When a separate civil action is brought to demand civil liability arising from a criminal
offense, and no criminal proceedings are instituted during the pendency of the civil
case, a preponderance of evidence shall likewise be sufficient to prove the act
complained of.
r. What is Article 31?
When the civil action is based on an obligation not arising from the act or omission
complained of as a felony, such civil action may proceed independently of the
criminal proceedings and regardless of the result of the latter.
s. What is Article 32?
Any public officer or employee, or any private individual, who directly or indirectly
obstructs, defeats, violates or in any manner impedes or impairs any of the following
rights and liberties of another person shall be liable to the latter for damages:
(1) Freedom of religion;
(2) Freedom of speech;
(3) Freedom to write for the press or to maintain a periodical publication;
(4) Freedom from arbitrary or illegal detention;
(5) Freedom of suffrage;
(6) The right against deprivation of property without due process of law;
(7) The right to a just compensation when private property is taken for public use;
(8) The right to the equal protection of the laws;
(9) The right to be secure in one’s person, house, papers, and effects against
unreasonable searches and seizures;
(10) The liberty of abode and of changing the same;
(11) The privacy of communication and correspondence; cd
(12) The right to become a member of associations or societies for purposes not
contrary to law;
(13) The right to take part in a peaceable assembly to petition the Government for
redress of grievances;
(14) The right to be free from involuntary servitude in any form;
(15) The right of the accused against excessive bail;
(16) The right of the accused to be heard by himself and counsel, to be informed of
the nature and cause of the accusation against him, to have a speedy and public
trial, to meet the witnesses face to face, and to have compulsory process to secure
the attendance of witness in his behalf;
(17) Freedom from being compelled to be a witness against one’s self, or from being
forced to confess guilt, or from being induced by a promise of immunity or reward to
make such confession, except when the person confessing becomes a State
witness;
(18) Freedom from excessive fines, or cruel and unusual punishment, unless the
same is imposed or inflicted in accordance with a statute which has not been
judicially declared unconstitutional; and
(19) Freedom of access to the courts.
In any of the cases referred to in this article, whether or not the defendant’s act or
omission constitutes a criminal offense, the aggrieved party has a right to commence
an entirely separate and distinct civil action for damages, and for other relief. Such
civil action shall proceed independently of any criminal prosecution (if the latter be
instituted), and may be proved by a preponderance of evidence.
The indemnity shall include moral damages. Exemplary damages may also be
adjudicated.
The responsibility herein set forth is not demandable from a judge unless his act or
omission constitutes a violation of the Penal Code or other penal statute.
t. What is Article 33?
In cases of defamation, fraud, and physical injuries, a civil action for damages,
entirely separate and distinct from the criminal action, may be brought by the injured
party. Such civil action shall proceed independently of the criminal prosecution, and
shall require only a preponderance of evidence.
u. Distinguish between a dependent civil action and an independent civil action?
v.1. Discuss Casupanan v. Laroya, G.R. No. 145391, August 26, 2002.
------------------------
Third week
a. What is Article 2176?
ARTICLE 2176. Whoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done. Such fault or negligence,
if there is no pre-existing contractual relation between the parties, is called a quasidelict and is governed by the provisions of this Chapter. (1902a)
b. What is quasi-delict?
Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there
is no pre-existing contractual relation between the parties, is called a quasi-delict.
(Art. 2176 of the Civil Code) In other words, compensation must be paid to a person
suffering damage because of the act or omission of another, there being no preexisting obligation arising from contracts.
Article 2176 of the Civil Code, which defines a quasi-delict is limited to negligent acts
or omissions and excludes the notion of willfulness or intent
c. What are the elements of quasi-delict?
[1] The plaintiff has suffered damage and injury (damnum et injuria, meaning a
violation of right and a harm, physical or otherwise, as a result of such violation);
[2] An act or omission on the part of the defendant has resulted in such damage and
injury. Authors say that the act or omission must be negligent in nature, considering
that Article 2176 requires "fault or negligence"; and
[3] There is a causal connection of the cause and effect between the fault/negligence
of the defendant and the damage and injury suffered by the plaintiff.
d. What is damage?
-injury caused
-damages - the sum of money which the law awards or imposes as a compensation,
a recompense, or satisfaction for an injury done or a wrong sustained as a
consequence either of a breach of a contractual obligation or a tortious act.
e. What is fault?
Fault signifies voluntary act or omission causing damages to the right of another
giving rise to an obligation of the actor to repair such damage. (Execution which
causes damage)
f. What is negligence?
Negligence consist in the omission to do certain acts which result to the damage to
another. (involuntary)
g. Explain causal connection between the fault/negligence or damage?
There should be enough evidence showing that the fault or negligence led to the
damage to the plaintiff
h. What is the test of determining negligence?
The test by which to determine the existence of negligence in a particular case may
be stated as follows: Did the defendant in doing the alleged negligent act use that
reasonable care and caution which an ordinarily prudent person would have used in
the same situation? If not, then he is guilty of negligence.
h.1. Discuss Picart v. Smith, G.R. No. L-12219, 15 March 1918
FACTS:
Amado Picart was riding on his pony over Carlatan Bridge in San Fernando, La
Union When Smith approached from the opposite direction in an automobile with
rate of speed of about ten or twelve miles per hour. As the Smith neared the bridge
he saw a horseman on it and blew his horn to give warning of his approach. He
continued his course and after he had taken the bridge he gave two more successive
blasts, as it appeared to him that the man on horseback before him was not
observing the rule of the road.
Picart saw the automobile and heard the warning signals. Being perturbed by the
rapid approach of the vehicle, he pulled the pony closely up against the railing on the
right side of the bridge instead of going to the left. The bridge is about 75 meters and
a width of only 4.80 meters. The vehicle approached without slowing down. Smith
quickly turned his car sufficiently to the right to escape hitting the horse alongside of
the railing where it as then standing; but due to the automobile’s close proximity to
the animal, the animal became frightened and turned its body across the bridge with
its head toward the railing. In so doing, it as struck on the hock of the left hind leg by
the flange of the car and the limb was broken.
The horse fell and its rider was thrown off. As a result of its injuries the horse died.
The plaintiff received contusions which caused temporary unconsciousness and
required medical attention for several days.
ISSUE:
Whether Smith was guilty of negligence and liable for civil obligations
HELD:
Yes. The control of the situation had then passed entirely to the defendant; and it
was his duty either to bring his car to an immediate stop or, seeing that there were
no other persons on the bridge, to take the other side and pass sufficiently far away
from the horse to avoid the danger of collision. Instead of doing this, the defendant
ran straight on until he was almost upon the horse.
A prudent man, placed in the position of the defendant, would in our opinion, have
recognized that the course which he was pursuing was fraught with risk, and would
therefore have foreseen harm to the horse and the rider as reasonable consequence
of that course. Under these circumstances the law imposed on the defendant the
duty to guard against the threatened harm.
It goes without saying that the plaintiff himself was not free from fault, for he was
guilty of antecedent negligence in planting himself on the wrong side of the road. But
as we have already stated, the defendant was also negligent; and in such case the
problem always is to discover which agent is immediately and directly responsible.
Under these circumstances the law is that the person who has the last fair chance to
avoid the impending harm and fails to do so is chargeable with the consequences,
without reference to the prior negligence of the other party.
Test of Negligence:
Did the defendant in doing the alleged negligent act use that person would have
used in the same situation? If not, then he is guilty of negligence.
“last clear chance” rule is applicable. In other words, when a traveler has reached a
point where he cannot extricate himself and vigilance on his part will not avert the
injury, his negligence in reaching that position becomes the condition and not the
proximate cause of the injury and will not preclude a recovery. (Note especially Aiken
vs. Metcalf [1917], 102 Atl., 330.)
i. What is the applicable standard of conduct?
The standard of conduct is that pater familias or referred to as diligence of a good
father of a family. Kaya father kasi tatay nag aalaga sa pamilya. Will not let anything
happen to his family.
j. Can there be a tort or quasi-delict in breach of contract?
Generally, as explained in article 2176, “such fault or negligence, if there is no preexisting contractual relation between the parties, is called a quasi-delict”, but in the
case below, although the relation of passenger and carrier is "contractual both in origin and
nature" nevertheless "the act that breaks the contract may be also a tort".
j1. Discuss Air France v. Carrascoso, GR No. L21438, 28 September 1966
Carrascoso, a civil engineer, was a member of a group of 48 Filipino pilgrims that left
Manila for Lourdes on March 30, 1958. On March 28, 1958, the defendant, Air
France, through its authorized agent, Philippine Air Lines, Inc., issued to plaintiff a
"first class" round trip airplane ticket from Manila to Rome. From Manila to Bangkok,
plaintiff travelled in "first class", but at Bangkok, the Manager of the defendant airline
forced plaintiff to vacate the "first class" seat that he was occupying because, in the
words of the witness Ernesto G. Cuento, there was a "white man", who, the Manager
alleged, had a "better right" to the seat. When asked to vacate his "first class" seat,
the plaintiff, as was to be expected, refused, and told defendant's Manager that his
seat would be taken over his dead body; a commotion ensued, and, according to
said Ernesto G. Cuento, "many of the Filipino passengers got nervous in the tourist
class; when they found out that Mr. Carrascoso was having a hot discussion with the
white man, they came all across to Mr. Carrascoso and pacified Mr. Carrascoso to
give his seat to the white man" and plaintiff reluctantly gave his "first class" seat in
the plane.
Then, the Court of First Instance of Manila sentenced petitioner to pay respondent
Rafael Carrascoso P25,000.00 by way of moral damages; P10,000.00 as exemplary
damages; P393.20 representing the difference in fare between first class and tourist
class for the portion of the trip Bangkok-Rome, these various amounts with interest
at the legal rate, from the date of the filing of the complaint until paid; plus P3,000.00
for attorneys' fees; and the costs of suit.
On appeal, the Court of Appeals slightly reduced the amount of refund on
Carrascoso's plane ticket from P393.20 to P383.10, and voted to affirm the appealed
decision "in all other respects", with costs against petitioner. Thus, this petition for
certiorari.
Petitioner contends that the purchase of a first class ticket was not a guarantee of
being accommodated in the first class for all the legs of the connecting flights. (which
tbh defeats the purpose of buying a first class ticket). Furthermore, defendant's own
witness Rafael Altonaga testified that the reservation for a "first class"
accommodation for the plaintiff was confirmed. The court cannot believe that after
such confirmation defendant had a verbal understanding with plaintiff that the "first
class" ticket issued to him by defendant would be subject to confirmation in
Hongkong.
On the question of bad faith, the Court of Appeals declared:
That the plaintiff was forced out of his seat in the first class compartment of the plane
belonging to the defendant Air France while at Bangkok, and was transferred to the
tourist class not only without his consent but against his will, has been sufficiently
established by plaintiff in his testimony before the court, corroborated by the
corresponding entry made by the purser of the plane in his notebook which notation
reads as follows:
"First-class passenger was forced to go to the tourist class against his will, and that
the captain refused to intervene",
and by the testimony of an eye-witness, Ernesto G. Cuento, who was a copassenger. The captain of the plane who was asked by the manager of defendant
company at Bangkok to intervene even refused to do so. It is noteworthy that no one
on behalf of defendant ever contradicted or denied this evidence for the plaintiff. It
could have been easy for defendant to present its manager at Bangkok to testify at
the trial of the case, or yet to secure his disposition; but defendant did neither.
Issue
Whether or not the breach of contract of carriage between Air France and
Carrascoso would hold Air France liable for damages.
Ruling
The foregoing substantially aver: First, That there was a contract to furnish plaintiff a
first class passage covering, amongst others, the Bangkok-Teheran leg; Second,
That said contract was breached when petitioner failed to furnish first class
transportation at Bangkok; and Third, That there was bad faith when petitioner’s
employee compelled Carrascoso to leave his first class accommodation berth “after
he was already seated” and to take a seat in the tourist class, by reason of which he
suffered inconvenience, embarrassment and humiliation, thereby causing him mental
anguish, serious anxiety, wounded feelings and social humiliation, resulting in moral
damages. It is true that there is no specific mention of the term bad faith in the
complaint. But, the inference of bad faith is there; it may be drawn from the facts and
circumstances set forth therein. The contract was averred to establish the relation
between the parties. But the stress of the action is put on wrongful expulsion.
k. Distinguish culpa aquiliana from culpa contractual?
Culpa Aquiliana:
1.
Only private concern.
2.
Repairs the damage by indemnification.
3.
Covers all acts that are faulty or negligent.
4.
Preponderance of evidence.
5.
No reservation – it’s independent from crime. (Andamo vs IAC, 191 SCRA 203)
6.
Employer’s liability is solidary (Fabre Jr. vs CA, 259 SCRA 426, ‘ 96)
[[an act or omission which causes damages to another, there being fault or
negligence and there being no pre-existing contractual relationship between the
parties. Whoever causes such act or omission is obliged to pay for the damage
done.]]
Culpa Contractual
(i) Pre-existing obligation between the parties
(ii) Fault or negligence is incidental to the performance of the obligation
(iii) Defense of having exercised diligence of a good father of a family is not
available, just like in criminal action. Applied doctrine of Respondent Superior, or
Master and Servant Rule.
l. What is the doctrine of res ipsa loquitur? What are its requisites?
Res ipsa loquitur is Latin for “the thing speaks for itself.” In legal terms, res ipsa
loquitur is a doctrine of law that establishes a presumption of negligence if the
individual had exclusive control over what caused the injury, even without evidence
of negligence.
The elements of res ipsa loquitur are: (1) the accident is of such character as to
warrant an inference that it would not have happened except for the defendant's
negligence; (2) the accident must have been caused by an agency or instrumentality
within the exclusive management or control of the person charged with the
negligence complained of; and (3) the accident must not have been due to any
voluntary action or contribution on the part of the person injured.
OR
1. The accident is of a kind which ordinarily does not occur in the absence of
someone’s negligence;
2. It is caused by an instrumentality within the exclusive control of the defendant or
defendants; and
3. The possibility of contributing conduct which would make the plaintiff responsible
is eliminated.
l.1. Discuss Cantre v. Go, G.R. No. 160889, 27 April 2007.
m. What is the captain-of-the-ship doctrine?
Under the “Captain of the Ship” rule, the operating surgeon is the person in complete
charge of the surgery room and all personnel connected with the operation. Their
duty is to obey his orders.
In this jurisdiction, res ipsa loquitur is not a rule of substantive law, hence, does not
per se create or constitute an independent or separate ground of liability, being a
mere evidentiary rule. In other words, mere invocation and application of the doctrine
does not dispense with the requirement of proof of negligence. Here, the negligence
was proven to have been committed by Dr. Ampil and not by Dr. Fuentes.
m.1. Discuss Ramos v. Court of Appeals, G.R. No. 124354, 29 December 1999.
n. What is the doctrine of corporate negligence?
Corporate negligence is the legal doctrine that holds health-care facilities, such as
hospitals, nursing homes and medical clinics, responsible for the well-being of
patients. If a health-care facility fails to maintain a clean and safe environment, hire
competent and properly trained employees, oversee care and implement safety
policies, it can be held liable for any harm to patients. Any small health-care
business could theoretically be sued under the doctrine of corporate negligence for
the actions of its employees.
n.1. Discuss Professional Services, Inc. v. Agana, G.R. No. 126297, 31 January
2007. (Discuss also the portions tackling the doctrine of res ipsa loquitur and the
captainof-the-ship doctrine)
o. What is Article 2177?
ARTICLE 2177. Responsibility for fault or negligence under the preceding article is
entirely separate and distinct from the civil liability arising from negligence under the
Penal Code. But the plaintiff cannot recover damages twice for the same act or
omission of the defendant.
p. Distinguish criminal negligence from civil negligence?
Civil negligence is the failure of a person to act with reasonable care or due
diligence. The standard is measured by what a reasonable person - sometimes
referred to as a person of ordinary prudence - would do under the same or similar
circumstances.
Criminal negligence means that a person fails to be aware of a substantial and
unjustifiable risk. The risk must be of such nature and degree that the failure to be
aware of it constitutes a gross deviation from the standard of care that a reasonable
person would observe in the situation.
So in short, the difference between the two is the degree of harm caused by the
negligence.
Duty - The defendant owed a legal duty to the plaintiff under the circumstances;
Breach - The defendant breached that legal duty by acting or failing to act in a
certain way;
Causation - It was the defendant's actions (or inaction) that actually caused the
plaintiff's injury; and
Damages - The plaintiff was harmed or injured as a result of the defendant's actions.
q. What is the legal restriction on the recovery of damages?
Article 2177, where one cannot recover damages twice from the same act or
omission of the defendant.
-------------------------------------------------------------------------------------------------------------
a. What is Article 2178?
b. What is Article 2179?
c. What is proximate cause?
c.1. Discuss Vda. De Bataclan v. Medina, G.R. No. L-10126, 22 October 1957.
c.2. Discuss Kim v. Aerial Taxi Co., G.R. No. L39309, 24 November 1933.
c.3. Discuss Urbano v. Intermediate Appellate Court, G.R. No. 72964, January 7,
1988.
c.4. Discuss Philippine National Railways v. Vizcara, G.R. No. 190022, 15 February
2012.
c.5. Discuss Sps. Latonio v. Mc George Food Industries, Inc., G.R. No. 206184, 06
December 2017.
d. What are the tests to determine existence of proximate cause? Discuss each.
e. What is contributory negligence?
e.1. Discuss Umali v. Bacani, G.R. No. L40570, 30 January 1976.
e.2. Discuss Jarco Marketing Corp. v. CA, G.R. No. 129792, 21 December 1999.
e.3. Discuss Philippine National Railways v. Ethel Brunty, G.R. No. 169891,
November 2, 2006.
e.4. Discuss Dela Cruz v. Octa Viano, G.R. No. 219649, 26 July 2017.
f. What is the Doctrine of comparative negligence?
f.1. Discuss Allied Banking Corporation v. BPI, G.R. No. 188363, 27 February 2013.
g. What is an attractive nuisance?
g.1. Discuss Hidalgo Enterprises v. Balandan, G.R. NO. L-3422, 13 June 1952.
-----a. What is the doctrine of last clear chance?
When both sides have exhibited negligence but one side’s negligent act happens
after the other within a noticeable interval of time, the one who has the last clear
opportunity to avoid the impending harm can be charged with the consequences,
without reference to the other party’s negligence
Simply put, just because the claimant was also negligent doesnt mean they arent
allowed to ask for a recovery from the defendant
b. What are the elements for the application of the doctrine of last clear chance?
1. Plaintiff puts himself in a dangerous situation because of his own negligent
acts and he is unable to get out of it by any means
2. Defendant knows that the plaintiff is in danger and knows (or should have
know) that he could not get himself out of it
3. Defendant had the last clear chance or opportunity to avoid the accident
through the exercise of ordinary care but was unable to do so, causing the
accident
b.1. Discuss Glan People’s Lumber and Hardware v. IAC, G.R. No. 70493, May 18,
1989.
b.2. Discuss Pantranco North Express v. Baesa, G.R Nos. 79050-51, November 14,
1989.
b.3. Discuss Philippine Bank of Commerce v. CA, G.R. N. 97626, March 14, 1997.
b.4. Discuss Tiu v. Arriesgado, G.R. No. 138060, September 1, 2004.
b.5. Discuss Lapanday Agricultural and Development Corporation v. Angala, G.R.
No. 153076, June 21, 2007.
c. What is the emergency rule?
When one has to act in response to suddenly finding himself in a place of danger
without ample time to consider the best course of action to avoid the impending
danger, he is not considered negligent if there is found to be a better course of action
after the incident, unless his negligence is the cause of the dangerous situation.
c.1. Discuss McKee v. IAC, G.R. No. L-68102, 16 July 1992.
c.2. Discuss Markina Autoline Transport Corp. v. People of the Phils., G.R. No.
152040, Mar. 31, 2006.
d. What is assumption of risk?
Having knowledge of the dangers associated with the situation, but still willingly
exposing oneself to it, therefore making them unable to recover damages
d.1. Discuss Afialda v. Hisole, G.R. No. L-2075, 29 November 1949.
d.2. Discuss Abrogar v. Cosmos Bottling Company, G.R. No. 164749, 15 March
2017.
e. What is volenti non fit injuria?
“To which a person assents is not esteemed in law as injury”, or “one is not legally
injured if he has consented to the act complained of or was willing that it shall occur”.
e.1. Discuss Ilocos Norte Electric Co. v. CA, G.R. No. L-53401, 06 November 1989
e.2. Discuss Nikko Hotel Manila Garden v. Reyes, G.R. No. 154259, 28 February
2005.
----------------------------------------
a. Discuss Article 2181 of the Civil Code.
ARTICLE 2181. Whoever pays for the damage caused by his dependents or
employees may recover from the latter what he has paid or delivered in satisfaction
of the claim.
-di porket ibang tao nagbayad sa kasalanan mo, eh lusot ka na sa kahit anong
pagbayad. Pwede kang singilin nung nagbayad para sayo kasi at the end of the day,
ikaw parin may kasalanan
b. Discuss Article 2182 of the Civil Code.
If the minor or insane person causing damage has no parents or guardian, the minor
or insane person shall be answerable with his own property in an action against him
where a guardian ad litem shall be appointed.
-guardian ad litem - person appointed by the court to protect the child’s best
interests, representing them in the case
c. Discuss Article 2183 of the Civil Code.
The possessor of an animal or whoever may make use of the same is responsible
for the damage which it may cause, although it may escape or be lost. This
responsibility shall cease only in case the damage should come from force majeure
or from the fault of the person who has suffered damage.
-note: possessor, hindi owner or caretaker
c.1. Discuss Article Vestil v. IAC, G.R. No. 74431 November 6, 1989
d. What is Article 2184?
In motor vehicle mishaps, the owner is solidarily liable with his driver, if the former,
who was in the vehicle, could have, by the use of the due diligence, prevented the
misfortune. It is disputably presumed that a driver was negligent, if he had been
found guilty of reckless driving or violating traffic regulations at least twice within the
next preceding two months.
a. What is Article 2185?
Unless there is proof to the contrary, it is presumed that a person driving a motor
vehicle has been negligent if at the time of the mishap, he was violating any traffic
regulation.
b. What is Article 2186?
Every owner of a motor vehicle shall file with the proper government office a bond
executed by a government-controlled corporation or office, to answer for damages to
third persons. The amount of the bond and other terms shall be fixed by the
competent public official.
c. What is the rationale for Articles 2184-86?
-to cope with the alarming increase of vehicular mishaps
d. Discuss the liability of the car owner.
-if the owner was in the vehicle with the driver, and they could have prevented the
accident with due diligence but didnt do so, they are also held liable
-if not in the vehicle, they may still be sued under imputed liability, and they may
avail of the defense of having exercised the diligence of a good father of a family to
prevent damage
e. What kind of presumption is involved under Article 2185?
-if a person driving a motor vehicle violated a traffic regulation at the time of accident,
they are presumed negligent
e.1. Discuss Mallari Sr. v. Court of Appeals, G.R. No. 128607, 31 January 2000.
e.2. Discuss Añonuevo v. Court of Appeals, G.R. No. 130003, 20 October 2004.
f. What is Article 2187?
Manufacturers and processors of foodstuffs, drinks, toilet articles and similar goods
shall be liable for death or injuries caused by any noxious or harmful substances
used, although no contractual relation exists between them and the consumers.
g. What is the principle of strict liability?
-proof of negligence is not necessary. It applies even if the defendant manufacturer
or processor
h. What are the requisites of strict liability?
-defendant is the manufacturer or processor of foodstuff, drinks, toilet articles and
similar goods
-the defendant used noxious or harmful substances in the process of making the
goods
-plaintiff consumed or used product unaware of its dangerous contents
-plaintiffs injury or death was caused by the product
-forms or kinds of damages suffered and the amount thereof
i. What is the basis of a consumer’s cause of action under Article 2187?
-principle of strict liability
j. What is Article 2188?
There is prima facie presumption of negligence on the part of the defendant if the
death or injury results from his possession of dangerous weapons or substances,
such as firearms and poison, except when the possession or use thereof is
indispensable in his occupation or business.
k. What is Article 2189?
Provinces, cities and municipalities shall be liable for damages for the death of, or
injuries suffered by, any person by reason of the defective condition of roads,
streets, bridges, public buildings, and other public works under their control or
supervision.
k.1. Discuss City of Manila v. Teotico, G.R. No. L-23052, January 29, 1968.
k.2. Discuss Jimenez v. City of Manila, G.R. No. 71049, May 29, 1987.
k.3. Discuss Quezon City v. Dacara, G.R. No. 150304, June 15, 2005.
k.4. Discuss Municipality of San Juan v. Court of Appeals, G.R. No. 121920, August
9, 2005.
------------------------------------------------------------------------------
a. Discuss Articles 2190, 2191, and 2192 in
relation to Art. 1723?
b. Discuss De Roy v. Court of Appeals, G.R. No.
80718, 29 January 1988.
c. Discuss Nakpil & Sons v. Court of Appeals,
G.R. No. L-47851, October 3, 1986.
d. What is the principle of created risks? - when a person introduces a dangerous
object for necessity or profit, he exposes them to danger.
e. What is the principle of presumed
Negligence? f. What is Article 2193?
g. What is the nature of liability under Art.
2193?
h. What are the purposes of the absoluteness of
Article 2193?
i. What is Article 2194?
i.1.Discuss PNCC v. Court of Appeals, G.R. No.
159270, August 22, 2005.
i.2.Discuss Chan, Jr. v. Iglesia ni Cristo, G.R.
No. 160283, October 14, 2005.
i.3. Discuss Sps. Pereña v. Sps. Zarate, G.R.
No. 157917, August 29, 2012.
j. What is Article 2195?
k. What is damage?
l. Discuss the applicability of Article 2195 to
Article 1157?
m. What is Article 2196?
n. What are the kinds of damages generally
recoverable?
o. What is Article 2198?
================================================================
31816 BTL
Nature and form of sales contract
Contract of sale is reciprocal
A sale is not a one time thing, hindi parang contract of marriage.
In a sale: - negotiation → consent/perfection → delivery/consummation(assumes
payment)
-
Seller delivers →
← buyer pays
Services are a special case. The product of services made in excess become
contract of sale
If you’re going to say measured, that is for a thing that is not specific. If an object is
determinate, measurement is assumed. The issue of measurement occurs on things
which are not specific. The immediate answer of a logical person would be it may not
be, since you have to tell me how much (like a cavan of rice). In this law, the
opposite of specific is not necessarily generic. It is fungible. However, if the object is
not specific, it is already one mass and you sell it, the absence of measurement will
not make a problem in the sale, but it is always important to measure nonetheless.
To turn a barter into a sale, the value of the items must be equivalent
But under the law, a barter is still just a sale
You cannot have a contract of sale without a price. Without a price, the contract is
inefficacious. Inefficacious contract means that the contract is already perfected,
however, it will be fixed once the price is settled
Note article 1472. Keyword- exchange or market
A contract of sale is a : 1. Process
2. Reciprocal process
k
The deliverer’s obligation is theirs only. The buyer’s obligation is theirs only.
Contract of sale is perfected once there is consent. It is a consensual contract
Auction - the auction is perfected at the fall of the hammer. A bid cannot be
withdrawn at any time. It must be withdrawn before the fall of the hammer.
----------------
Sale by description. Sale by sample.
a sale that is made without the buyer seeing the goods and having only a description
of them from the seller:
the buyer purchases goods under an agreed condition that goods sold are as good
as one shown to the buyer as a sample.
Earnest money
Deposit of money made by buyer to the seller to secure the acquisition
Statute of Fraud. When must a sale be in writing.
Article 1403 - a sale must be in writing if:
(a) An agreement that by its terms is not to be performed within a year from the
making thereof;
(b) A special promise to answer for the debt, default, or miscarriage of another;
(c) An agreement made in consideration of marriage, other than a mutual promise to
marry;
(d) An agreement for the sale of goods, chattels or things in action, at a price not
less than five hundred pesos, unless the buyer accept and receive part of such
goods and chattels, or the evidences, or some of them, of such things in action, or
pay at the time some part of the purchase money; but when a sale is made by
auction and entry is made by the auctioneer in his sales book, at the time of the sale,
of the amount and kind of property sold, terms of sale, price, names of the
purchasers and person on whose account the sale is made, it is a sufficient
memorandum;
(e) An agreement for the leasing for a longer period than one year, or for the sale of
real property or of an interest therein;
(f) A representation as to the credit of a third person.
Expropriation compared to sale
Exchange of property between the state and private individual, with said property
used for public use and benefit - eminent domain
Sale - exchange between two private individuals
1489-1494
ARTICLE 1489. All persons who are authorized in this Code to obligate themselves,
may enter into a contract of sale, saving the modifications contained in the following
articles.
Where necessaries are sold and delivered to a minor or other person without
capacity to act, he must pay a reasonable price therefor. Necessaries are those
referred to in article 290. (1457a)
ARTICLE 1490. The husband and the wife cannot sell property to each other,
except:
(1) When a separation of property was agreed upon in the marriage settlements; or
temuim
(2) When there has been a judicial separation of property under article 191. (1458a)
ARTICLE 1491. The following persons cannot acquire by purchase, even at a public
or judicial auction, either in person or through the mediation of another:
(1) The guardian, the property of the person or persons who may be under his
guardianship;
(2) Agents, the property whose administration or sale may have been intrusted to
them, unless the consent of the principal has been given;
(3) Executors and administrators, the property of the estate under administration;
(4) Public officers and employees, the property of the State or of any subdivision
thereof, or of any government-owned or controlled corporation, or institution, the
administration of which has been intrusted to them; this provision shall apply to
judges and government experts who, in any manner whatsoever, take part in the
sale;
(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and
other officers and employees connected with the administration of justice, the
property and rights in litigation or levied upon an execution before the court within
whose jurisdiction or territory they exercise their respective functions; this prohibition
includes the act of acquiring by assignment and shall apply to lawyers, with respect
to the property and rights which may be the object of any litigation in which they may
take part by virtue of their profession;
(6) Any others specially disqualified by law. (1459a)
ARTICLE 1492. The prohibitions in the two preceding articles are applicable to sales
in legal redemption, compromises and renunciations. (n)
ARTICLE 1493. If at the time the contract of sale is perfected, the thing which is the
object of the contract has been entirely lost, the contract shall be without any effect.
But if the thing should have been lost in part only, the vendee may choose between
withdrawing from the contract and demanding the remaining part, paying its price in
proportion to the total sum agreed upon. (1460a)
ARTICLE 1494. Where the parties purport a sale of specific goods, and the goods
without the knowledge of the seller have perished in part or have wholly or in a
material part so deteriorated in quality as to be substantially changed in character,
the buyer may at his option treat the sale:
(1) As avoided; or
(2) As valid in all of the existing goods or in so much thereof as have not
deteriorated, and as binding the buyer to pay the agreed price for the goods in which
the ownership will pass, if the sale was divisible. (n)
-
Who may enter into a contract of sale
People with juridical capacity and the capacity to act
Absolute vs relative incapacity
ARTICLE 1327. The following cannot give consent to a contract:
(1) Unemancipated minors;
(2) Insane or demented persons, and deaf-mutes who do not know how to write.
(1263a)
Relative incapacity: (husband and wife not allowed to sell to each other, but they can
sell to others) (guardian, limited yung capacity kasi di niya pwede bilhin yung
ipinagkatiwala sa kanya)
Incapacity due to relationship (mag asawa, guardianship)
Effect of sale in violation of prohibition
Pag nag violate, illegal siya, therefore, void kasi illegal (1409?)
(1490, void kasi bawal sa mag-asawa and 1491, voidable)
Effect of loss of object at time of sale
1493 and 1494
Effect of loss if object is either generic or specific
ARTICLE 1262. An obligation which consists in the delivery of a determinate thing
shall be extinguished if it should be lost or destroyed without the fault of the debtor,
and before he has incurred in delay. (non-fungible)
When by law or stipulation, the obligor is liable even for fortuitous events, the loss of
the thing does not extinguish the obligation, and he shall be responsible for
damages. The same rule applies when the nature of the obligation requires the
assumption of risk. (1182a) (pag specific nawala, nateterminate ang contract)
ARTICLE 1263. In an obligation to deliver a generic thing, the loss or destruction of
anything of the same kind does not extinguish the obligation. (fungible) (n)
Contrary rule in Art. 1504
ARTICLE 1504. Unless otherwise agreed, the goods remain at the seller’s risk until
the ownership therein is transferred to the buyer, but when the ownership therein is
transferred to the buyer the goods are at the buyer’s risk whether actual delivery has
been made or not, except that:
(1) Where delivery of the goods has been made to the buyer or to a bailee for the
buyer, in pursuance of the contract and the ownership in the goods has been
retained by the seller merely to secure performance by the buyer of his obligations
under the contract, the goods are at the buyer’s risk from the time of such delivery;
(2) Where actual delivery has been delayed through the fault of either the buyer or
seller the goods are at the risk of the party in fault. (n)
Additional notes in discussing chapter 3 of Sales: Effects of the Contract when the
thing Sold has been Lost
1. 1493 & 1494 covers loss at the time of perfection.
2. Should loss happen a) before perfection or b) after delivery, observe "res perit
domino" (the owner bears the loss)
3. For Loss after perfection but before delivery, see 1480 & 1504
Read 1493, 1494, 1480 & 1504
1480, kung sino may hawak, siya liable. BUT, 1504, kung sino may ownership
regardless ng delivery, siya liable.
------=-=-=-=-=-=-=-=-=-=-=-=-=-=
1495 The five obligations of the vendor
Delivery: effect and definition of actual delivery 1496 - 1497
Forms of delivery 1498-1501
Sale on return vs sale on trial 1502
Sale by one without title or with voidable title 1505-1506
Delivery by common carrier; shipment rules, bailees, bill of lading 1503 - 1504
International Commercial Terms INCO terms - 1523
Place, time, hour of delivery, related to price payment
1521, 1524, 1536-1538
Quantity and quality of goods delivered 1522
Sale of real property of different area from contract 1539-1543
De Leon Law on Sales
Res Perit Domino
-------Article 1544. If the same thing should have been sold to different vendees, the
ownership shall be transferred to the person who may have first taken possession
thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person acquiring
it who in good faith first recorded it in the Registry of Property.
Commented [1]: Double Sale 1544
Rules of preference as to movables
Rules of preference as to immovables
Possession, meaninga
Registration requirement; actual knowledge
Good faith requirement
When 1544 applicable
Warranties and Conditions 1545
Express warranty 1546
Implied warranties 1547
When inapplicable
Warranty against eviction
Elements 1548
Need for a judgement
No need to appeal 1549
Adverse possession 1550
Tax sales 1551
Judicial sales 1552;
Waiver of the warranty against eviction 1553- 1554
Good faith
Conciente
Intencionada
Rights and liabilities in case of eviction 1555-1556
Full eviction
Partial eviction
Procedure 1557-1560
Should there be no inscription, the ownership shall pertain to the person who in good
faith was first in the possession; and, in the absence thereof, to the person who
presents the oldest title, provided there is good faith. (1473)
Generally, if movable, whoever has possession in good faith.
If immovable, whoever registered first in the registry of property in good faith.
If not registered, whoever was in possession first. If no one possessed,
whoever presents the oldest title provided there is good faith.
Art. 531. Possession is acquired by the material occupation of a thing or the
exercise of a right, or by the fact that it is subject to the action of our will, or by
the proper acts and legal formalities established for acquiring such right.
Article 1545. Where the obligation of either party to a contract of sale is subject to
any condition which is not performed, such party may refuse to proceed with the
contract or he may waive performance of the condition. If the other party has
promised that the condition should happen or be performed, such first mentioned
party may also treat the nonperformance of the condition as a breach of warranty.
Where the ownership in the thing has not passed, the buyer may treat the fulfillment
by the seller of his obligation to deliver the same as described and as warranted
expressly or by implication in the contract of sale as a condition of the obligation of
the buyer to perform his promise to accept and pay for the thing. (n)
If there are conditions that are not performed, the contract may be allowed to
not proceed or the performance of the condition may be waived. However, if it
was agreed that the condition was to be performed by the other party, the
nonperformance may be considered as a breach of warranty.
The fulfillment of the obligation of the seller to deliver may be considered the
same as the buyer’s obligation to accept and pay for the thing
Article 1546. Any affirmation of fact or any promise by the seller relating to the thing
is an express warranty if the natural tendency of such affirmation or promise is to
induce the buyer to purchase the same, and if the buyer purchases the thing relying
thereon. No affirmation of the value of the thing, nor any statement purporting to be a
statement of the seller's opinion only, shall be construed as a warranty, unless the
seller made such affirmation or statement as an expert and it was relied upon by the
buyer. (n)
Promises made by the seller to convince the buyer to buy their product is an
express warranty; the same goes if the buyer purchases the thing based on
such promise. Confirming the value of the thing nor the seller’s opinion on the
thing is construed as a warranty, unless such statements were made by the
seller as an expert and was relied upon by the buyer.
Article 1547. In a contract of sale, unless a contrary intention appears, there is:
(1) An implied warranty on the part of the seller that he has a right to sell the thing at
the time when the ownership is to pass, and that the buyer shall from that time have
and enjoy the legal and peaceful possession of the thing;
(2) An implied warranty that the thing shall be free from any hidden faults or defects,
or any charge or encumbrance not declared or known to the buyer.
This article shall not, however, be held to render liable a sheriff, auctioneer,
mortgagee, pledgee, or other person professing to sell by virtue of authority in fact or
law, for the sale of a thing in which a third person has a legal or equitable interest.
(n)
(1) The seller has the right to sell the thing at the time the ownership is
transferred, and from that point the buyer shall have legal and peaceful
possession of the thing
(2) Self explanatory
SUBSECTION 1. Warranty in Case of Eviction
Article 1548. Eviction shall take place whenever by a final judgment based on a right
prior to the sale or an act imputable to the vendor, the vendee is deprived of the
whole or of a part of the thing purchased.
The vendor shall answer for the eviction even though nothing has been said in the
contract on the subject.
The contracting parties, however, may increase, diminish, or suppress this legal
obligation of the vendor. (1475a)
Eviction - deprivation of the buyer to the thing or part of the thing purchased
caused by the vendor
Elements: (a) there must be a final judgment; (b) the purchaser has been
deprived of the whole or part of the thing sold; (c) said deprivation was by
virtue of a prior right to the sale made by the vendor; and (d) the vendor has
been summoned and made co-defendant in the suit for eviction at the instance
of the vendee.
Vendor shall answer for the eviction
Commented [2]: Double Sale 1544
Rules of preference as to movables
Rules of preference as to immovables
Possession, meaninga
Registration requirement; actual knowledge
Good faith requirement
When 1544 applicable
Warranties and Conditions 1545
Express warranty 1546
Implied warranties 1547
When inapplicable
Warranty against eviction
Elements 1548
Need for a judgement
No need to appeal 1549
Adverse possession 1550
Tax sales 1551
Judicial sales 1552;
Waiver of the warranty against eviction 1553- 1554
Good faith
Conciente
Intencionada
Rights and liabilities in case of eviction 1555-1556
Full eviction
Partial eviction
Procedure 1557-1560
But the parties may agree to increase, diminish, or suppress this legal
obligation
Article 1549. The vendee need not appeal from the decision in order that the vendor
may become liable for eviction. (n)
An appeal is not mandatory from the buyer
Article 1550. When adverse possession had been commenced before the sale but
the prescriptive period is completed after the transfer, the vendor shall not be liable
for eviction. (n)
Adverse possession - the occupation of land to which another person has title with the
intention of possessing it as one's own.
Article 1551. If the property is sold for nonpayment of taxes due and not made
known to the vendee before the sale, the vendor is liable for eviction. (n)
Sold because the vendor needed money to pay for unpaid taxes?
Article 1552. The judgment debtor is also responsible for eviction in judicial sales,
unless it is otherwise decreed in the judgment. (n)
Judicial sale - a sale forced by a court of law to in order to satisfy a debt
Article 1553. Any stipulation exempting the vendor from the obligation to answer for
eviction shall be void, if he acted in bad faith. (1476)
Consciente – the waiver is voluntarily made by the vendee without the
knowledge and assumption of the risks of eviction. If the waiver was only
conscious, the vendor shall pay only the value which the thing sold had at the
time of eviction – this is a case of solution indebiti – the effect is to deprive the
purchaser of the benefits mentioned in Nos. 2, 3, 4 and 5 of Article 1555.
Intencionada – the waiver is made by the vendee with knowledge of the risks
of eviction and assumption of its consequence. The vendor is exempted from
the obligation to answer for eviction, provided he did not act in bad faith
[Andaya vs. Manansala, 107 Phil. 1151].
Article 1554. If the vendee has renounced the right to warranty in case of eviction,
and eviction should take place, the vendor shall only pay the value which the thing
sold had at the time of the eviction. Should the vendee have made the waiver with
knowledge of the risks of eviction and assumed its consequences, the vendor shall
not be liable. (1477)
Article 1555. When the warranty has been agreed upon or nothing has been
stipulated on this point, in case eviction occurs, the vendee shall have the right to
demand of the vendor:
(1) The return of the value which the thing sold had at the time of the eviction, be it
greater or less than the price of the sale;
(2) The income or fruits, if he has been ordered to deliver them to the party who won
the suit against him;
(3) The costs of the suit which caused the eviction, and, in a proper case, those of
the suit brought against the vendor for the warranty;
(4) The expenses of the contract, if the vendee has paid them;
(5) The damages and interests, and ornamental expenses, if the sale was made in
bad faith. (1478)
Rights of the vendee against the vendor in case eviction occurs (Art. 1555)
return of the value of the thing sold at the time of eviction;
income or fruits if he has been ordered to deliver them to the party who won
the suit against him;
costs of the suit;
expenses of the contract;
damages and interests and ornamental expenses if the sale was made in bad
faith.
Article 1556. Should the vendee lose, by reason of the eviction, a part of the thing
sold of such importance, in relation to the whole, that he would not have bought it
without said part, he may demand the rescission of the contract; but with the
obligation to return the thing without other encumbrances that those which it had
when he acquired it.
He may exercise this right of action, instead of enforcing the vendor's liability for
eviction.
The same rule shall be observed when two or more things have been jointly sold for
a lump sum, or for a separate price for each of them, if it should clearly appear that
the vendee would not have purchased one without the other. (1479a)
Total eviction is an eviction in which the possessor or the tenant is wholly
deprived of any right in the premises. It is different form a partial eviction in
which the tenant is evicted from a portion of the tenant's premises.
Article 1557. The warranty cannot be enforced until a final judgment has been
rendered, whereby the vendee loses the thing acquired or a part thereof. (1480)
Article 1558. The vendor shall not be obliged to make good the proper warranty,
unless he is summoned in the suit for eviction at the instance of the vendee. (1481a)
Article 1559. The defendant vendee shall ask, within the time fixed in the Rules of
Court for answering the complaint, that the vendor be made a co-defendant. (1482a)
Article 1560. If the immovable sold should be encumbered with any non-apparent
burden or servitude, not mentioned in the agreement, of such a nature that it must be
presumed that the vendee would not have acquired it had he been aware thereof, he
may ask for the rescission of the contract, unless he should prefer the appropriate
indemnity. Neither right can be exercised if the non-apparent burden or servitude is
recorded in the Registry of Property, unless there is an express warranty that the
thing is free from all burdens and encumbrances.
Within one year, to be computed from the execution of the deed, the vendee may
bring the action for rescission, or sue for damages.
One year having elapsed, he may only bring an action for damages within an equal
period, to be counted from the date on which he discovered the burden or servitude.
(1483a)
SUBSECTION 2. Warranty Against Hidden Defects of or Encumbrances Upon the
Thing Sold
Article 1561. The vendor shall be responsible for warranty against the hidden defects
which the thing sold may have, should they render it unfit for the use for which it is
intended, or should they diminish its fitness for such use to such an extent that, had
the vendee been aware thereof, he would not have acquired it or would have given a
lower price for it; but said vendor shall not be answerable for patent defects or those
which may be visible, or for those which are not visible if the vendee is an expert
who, by reason of his trade or profession, should have known them. (1484a)
Requisites - 1. The defect is important or serious to the point that the thing
sold is unusable or would not have been purchased in the first place. 2. The
defect is hidden. 3. Defect exists at the time of sale. 4. The vendor was given
notice to the defect within a reasonable time 5. No waiver was made
Commented [3]: Warranty against hidden defects
1561- 1567
- Requisites 1561
Characteristic of the warranty 1562 - 1566
- Merchantability - fit for a general purpose.
- Fit for a special purpose
- Patent goods or sold under trade name. No fitness for
a special purpose
- Implied warranty based on usage of trade
- Vendor liable even if unaware of the h.d. Must also be
unaware to be free from liability (good faith required)
1567 Remedies of vendee
1568 - 1569 Effect of loss of the thing a) due to h.d. or
b) fortuitous event or vendee's fault
Sale of animal with redhibitory defect 1572-1581
1. Rule when two or more animals together
2. Sale in fairs, public auctions, sold as condemned
3. Not discoverable by expert knowledge
4. Animals dying within 3 days
5. Vendee's obligation
6. Remedies
Obligation of the Vendee: Accept the goods and pay the
price 1582-1593
Accept the goods
1583 Delivery by installments
1584 Right to examine
1585 How are goods accepted
1586 Effect of acceptance
1587 Return to Vendor
1588 Delivery thru carrier
Pay the price
1589 When is interest due
1590 Suspension of payment of price
1591 Vendor's remedy in case of fear of loss of goods
or the price
Merchantable - fit for the general purpose of similar products
Article 1562. In a sale of goods, there is an implied warranty or condition as to the
quality or fitness of the goods, as follows:
(1) Where the buyer, expressly or by implication, makes known to the seller the
particular purpose for which the goods are acquired, and it appears that the buyer
relies on the seller's skill or judgment (whether he be the grower or manufacturer or
not), there is an implied warranty that the goods shall be reasonably fit for such
purpose;
(2) Where the goods are brought by description from a seller who deals in goods of
that description (whether he be the grower or manufacturer or not), there is an
implied warranty that the goods shall be of merchantable quality. (n)
Implied na pag umasa sa seller yung buyer sa knowledge ng seller, may
implied warranty na fit yung binebenta ng seller, plus pag bought in
description, may implied warranty na merchantable yung product
Article 1563. In the case of contract of sale of a specified article under its patent or
other trade name, there is no warranty as to its fitness for any particular purpose,
unless there is a stipulation to the contrary. (n)
I think kapag specialized yung object? Like personalized or one of its kind? a
government authority or license conferring a right or title for a set period, especially the
sole right to exclude others from making, using, or selling an invention.
Article 1564. An implied warranty or condition as to the quality or fitness for a
particular purpose may be annexed by the usage of trade. (n)
A usage of trade is a practice or method of dealing having such regularity of
observance in a place, vocation, or trade as to justify an expectation that it will
be observed with respect to the transaction. business law.
Article 1565. In the case of a contract of sale by sample, if the seller is a dealer in
goods of that kind, there is an implied warranty that the goods shall be free from any
defect rendering them unmerchantable which would not be apparent on reasonable
examination of the sample. (n)
Medyo self explanatory na kapag sale by sample na nakikita mo yung product
mismo. Dapat walang defect na hindi nakikita after inspecting the sample
Article 1566. The vendor is responsible to the vendee for any hidden faults or defects
in the thing sold, even though he was not aware thereof.
This provision shall not apply if the contrary has been stipulated, and the vendor was
not aware of the hidden faults or defects in the thing sold. (1485)
Vendor is liable for any hidden faults or defects kahit hindi niya alam unless
napagkasunduan na hindi siya magiging liable and hindi niya alam na may
defects
Article 1567. In the cases of articles 1561, 1562, 1564, 1565 and 1566, the vendee
may elect between withdrawing from the contract and demanding a proportionate
reduction of the price, with damages in either case. (1486a)
Pwedeng hindi ituloy or bawasan nalang yung babayaran + damages
Article 1568. If the thing sold should be lost in consequence of the hidden faults, and
the vendor was aware of them, he shall bear the loss, and shall be obliged to return
the price and refund the expenses of the contract, with damages. If he was not
aware of them, he shall only return the price and interest thereon, and reimburse the
expenses of the contract which the vendee might have paid. (1487a)
Pag nawala dahil sa hidden defects tas alam ng vendor na may defects, siya
liable and ibabalik niya yung binayad ng buyer + damages, pero kung hindi
siya aware, ibabalik niya lang yung binayad and any interest
Article 1569. If the thing sold had any hidden fault at the time of the sale, and should
thereafter be lost by a fortuitous event or through the fault of the vendee, the latter
may demand of the vendor the price which he paid, less the value which the thing
had when it was lost.
If the vendor acted in bad faith, he shall pay damages to the vendee. (1488a)
Kung may hidden defect pero nawala dahil sa fortuitous event or dahil
kasalanan ng buyer, pwede niya hingiin yung binayad niya minus yung value
nung object at the time of loss
Article 1570. The preceding articles of this Subsection shall be applicable to judicial
sales, except that the judgment debtor shall not be liable for damages. (1489a)
Article 1571. Actions arising from the provisions of the preceding ten articles shall be
barred after six months, from the delivery of the thing sold. (1490)
Six month prescription period
Article 1572. If two or more animals are sold together, whether for a lump sum or for
a separate price for each of them, the redhibitory defect of one shall only give rise to
its redhibition, and not that of the others; unless it should appear that the vendee
would not have purchased the sound animal or animals without the defective one.
The latter case shall be presumed when a team, yoke pair, or set is bought, even if a
separate price has been fixed for each one of the animals composing the same.
(1491)
First situation - pag yung isa defective, hiwalay siya dun sa iba, siya lang
mareredhibit, unless hindi bibili yung buyer kung hindi kasama yung defective
Article 1573. The provisions of the preceding article with respect to the sale of
animals shall in like manner be applicable to the sale of other things. (1492)
Redhibition - the rescission of the sale of or a reduction in the purchase price of a thing
that has a redhibitory defect
Article 1574. There is no warranty against hidden defects of animals sold at fairs or
at public auctions, or of live stock sold as condemned. (1493a)
Condemned livestock - like, may birth defects or may sakit, sold as
condemned to be slaughtered
Why no warranty? Idk, maybe kasi nagpapauction para nalang mabenta.
Article 1575. The sale of animals suffering from contagious diseases shall be void.
A contract of sale of animals shall also be void if the use or service for which they
are acquired has been stated in the contract, and they are found to be unfit therefor.
(1494a)
Baka exception to sa 1574 since makakasama yung contagious disease sa
mga healthy and fit animals, tas yung pangalawa, medyo obvious kung
malaman mong hindi pala mapasunod yung hayop, so hindi mo siya magamit
Article 1576. If the hidden defect of animals, even in case a professional inspection
has been made, should be of such a nature that expert knowledge is not sufficient to
discover it, the defect shall be considered as redhibitory.
But if the veterinarian, through ignorance or bad faith should fail to discover or
disclose it, he shall be liable for damages. (1495)
Commented [4]: Warranty against hidden defects
1561- 1567
- Requisites 1561
Characteristic of the warranty 1562 - 1566
- Merchantability - fit for a general purpose.
- Fit for a special purpose
- Patent goods or sold under trade name. No fitness for
a special purpose
- Implied warranty based on usage of trade
- Vendor liable even if unaware of the h.d. Must also be
unaware to be free from liability (good faith required)
1567 Remedies of vendee
1568 - 1569 Effect of loss of the thing a) due to h.d. or
b) fortuitous event or vendee's fault
Sale of animal with redhibitory defect 1572-1581
1. Rule when two or more animals together
2. Sale in fairs, public auctions, sold as condemned
3. Not discoverable by expert knowledge
4. Animals dying within 3 days
5. Vendee's obligation
6. Remedies
Obligation of the Vendee: Accept the goods and pay the
price 1582-1593
Accept the goods
1583 Delivery by installments
1584 Right to examine
1585 How are goods accepted
1586 Effect of acceptance
1587 Return to Vendor
1588 Delivery thru carrier
Pay the price
1589 When is interest due
1590 Suspension of payment of price
1591 Vendor's remedy in case of fear of loss of goods
or the price
Medyo self explanatory, na kung dinala na sa expert pero hindi parin nalaman
issue, oks lang na mag redhibition, pero magiging liable yung vet kung
sinadyang sabihing walang problem or di talaga inexamine ng maayos
Article 1577. The redhibitory action, based on the faults or defects of animals, must
be brought within forty days from the date of their delivery to the vendee.
This action can only be exercised with respect to faults and defects which are
determined by law or by local customs. (1496a)
Within reasonable period to
Article 1578. If the animal should die within three days after its purchase, the vendor
shall be liable if the disease which cause the death existed at the time of the
contract. (1497a)
Nasa buyer magfafall yung pag prove na yung disease ay nag exist at the time
of the contract
Article 1579. If the sale be rescinded, the animal shall be returned in the condition in
which it was sold and delivered, the vendee being answerable for any injury due to
his negligence, and not arising from the redhibitory fault or defect. (1498)
Medyo self explanatory
Article 1580. In the sale of animals with redhibitory defects, the vendee shall also
enjoy the right mentioned in article 1567; but he must make use thereof within the
same period which has been fixed for the exercise of the redhibitory action. (1499)
Pwedeng hindi na ituloy yung contract or babaan nalang yung presyo ng
bayad niya
Article 1581. The form of sale of large cattle shall be governed by special laws.
Obligations of the Vendee
Article 1582. The vendee is bound to accept delivery and to pay the price of the thing
sold at the time and place stipulated in the contract.
If the time and place should not have been stipulated, the payment must be made at
the time and place of the delivery of the thing sold. (1500a)
Accept delivery and pay the price at the time and place. If not specified where
and when, must be at the time and place the delivery took place
Article 1583. Unless otherwise agreed, the buyer of goods is not bound to accept
delivery thereof by installments.
Where there is a contract of sale of goods to be delivered by stated instalments,
which are to be separately paid for, and the seller makes defective deliveries in
respect of one or more instalments, or the buyer neglects or refuses without just
cause to take delivery of or pay for one or more instalments, it depends in each case
on the terms of the contract and the circumstances of the case, whether the breach
of contract is so material as to justify the injured party in refusing to proceed further
and suing for damages for breach of the entire contract, or whether the breach is
severable, giving rise to a claim for compensation but not to a right to treat the whole
contract as broken. (n)
Generally, hindi tumatanggap ang buyer ng deliveries in installment unless
agreed upon. Pag yung deliveries are in installments tas may defects in some
of them or hindi nagbayad ng ayos yung buyer, pwedeng hindi ituloy ng
injured party yung contract
Article 1584. Where goods are delivered to the buyer, which he has not previously
examined, he is not deemed to have accepted them unless and until he has had a
reasonable opportunity of examining them for the purpose of ascertaining whether
they are in conformity with the contract if there is no stipulation to the contrary.
Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he
is bound, on request, to afford the buyer a reasonable opportunity of examining the
goods for the purpose of ascertaining whether they are in conformity with the
contract.
Where goods are delivered to a carrier by the seller, in accordance with an order
from or agreement with the buyer, upon the terms that the goods shall not be
delivered by the carrier to the buyer until he has paid the price, whether such terms
are indicated by marking the goods with the words "collect on delivery," or otherwise,
the buyer is not entitled to examine the goods before the payment of the price, in the
absence of agreement or usage of trade permitting such examination. (n)
Acceptance of a previously unexamined product comes through when the
buyer has reasonable opportunity to examine them for quality and conformity
to the contract.
Unless otherwise agreed, the seller is bound to let the buyer examine the
goods upon delivery
Article 1585. The buyer is deemed to have accepted the goods when he intimates to
the seller that he has accepted them, or when the goods have been delivered to him,
and he does any act in relation to them which is inconsistent with the ownership of
the seller, or when, after the lapse of a reasonable time, he retains the goods without
intimating to the seller that he has rejected them. (n)
Medyo self explanatory
Article 1586. In the absence of express or implied agreement of the parties,
acceptance of the goods by the buyer shall not discharge the seller from liability in
damages or other legal remedy for breach of any promise or warranty in the contract
of sale. But, if, after acceptance of the goods, the buyer fails to give notice to the
seller of the breach in any promise of warranty within a reasonable time after the
buyer knows, or ought to know of such breach, the seller shall not be liable therefor.
(n)
If no agreements were made, acceptance of the goods by the buyer does not
let the seller off the hook regarding liability, but if the buyer fails to give notice
within a reasonable time, lusot na yung seller
Article 1587. Unless otherwise agreed, where goods are delivered to the buyer, and
he refuses to accept them, having the right so to do, he is not bound to return them
to the seller, but it is sufficient if he notifies the seller that he refuses to accept them.
If he voluntarily constitutes himself a depositary thereof, he shall be liable as such.
(n)
If there is just cause to refuse, buyer is not bound to return them to the seller
Article 1588. If there is no stipulation as specified in the first paragraph of article
1523, when the buyer's refusal to accept the goods is without just cause, the title
thereto passes to him from the moment they are placed at his disposal. (n)
Article 1589. The vendee shall owe interest for the period between the delivery of the
thing and the payment of the price, in the following three cases:
(1) Should it have been so stipulated;
(2) Should the thing sold and delivered produce fruits or income;
(3) Should he be in default, from the time of judicial or extrajudicial demand for the
payment of the price. (1501a)
Article 1590. Should the vendee be disturbed in the possession or ownership of the
thing acquired, or should he have reasonable grounds to fear such disturbance, by a
vindicatory action or a foreclosure of mortgage, he may suspend the payment of the
price until the vendor has caused the disturbance or danger to cease, unless the
latter gives security for the return of the price in a proper case, or it has been
stipulated that, notwithstanding any such contingency, the vendee shall be bound to
make the payment. A mere act of trespass shall not authorize the suspension of the
payment of the price. (1502a)
Article 1591. Should the vendor have reasonable grounds to fear the loss of
immovable property sold and its price, he may immediately sue for the rescission of
the sale.
Should such ground not exist, the provisions of article 1191 shall be observed.
--------------------============-----------------=============--------------------------===
Article 1591. Should the vendor have reasonable grounds to fear the loss of
immovable property sold and its price, he may immediately sue for the rescission of
the sale.
Should such ground not exist, the provisions of article 1191 shall be observed.
(1503)
Im not quite sure pero from what i can understand, this may be referring to
civil loss, where the lands existence is unknown, or physical, where there is
enough damage to render the land unusable
SCRATCH THAT
Turns out this is referring to the loss of the object and its price as in mawawala
sa vendor yung immovable without even getting paid.
a. There is delivery of immovable
b. Vendee has not paid the price
c. Vendor has reasonable ground to fear the non-payment of the price and
the loss of the immovable
Commented [5]: Warranty against hidden defects
1561- 1567
- Requisites 1561
Characteristic of the warranty 1562 - 1566
- Merchantability - fit for a general purpose.
- Fit for a special purpose
- Patent goods or sold under trade name. No fitness for
a special purpose
- Implied warranty based on usage of trade
- Vendor liable even if unaware of the h.d. Must also be
unaware to be free from liability (good faith required)
1567 Remedies of vendee
1568 - 1569 Effect of loss of the thing a) due to h.d. or
b) fortuitous event or vendee's fault
Sale of animal with redhibitory defect 1572-1581
1. Rule when two or more animals together
2. Sale in fairs, public auctions, sold as condemned
3. Not discoverable by expert knowledge
4. Animals dying within 3 days
5. Vendee's obligation
6. Remedies
Obligation of the Vendee: Accept the goods and pay the
price 1582-1593
Accept the goods
1583 Delivery by installments
1584 Right to examine
1585 How are goods accepted
1586 Effect of acceptance
1587 Return to Vendor
1588 Delivery thru carrier
Pay the price
1589 When is interest due
1590 Suspension of payment of price
1591 Vendor's remedy in case of fear of loss of goods
or the price
Commented [6]: Recission by the Vendor after delivery
1591-1593
1591-1592 rescission of a sale of immovables
1593 recission of a sale of movables
Actions for Breach of Contract of Sales 1594-1599
Action for price 1595
Action for damages for non-acceptance 1596
Rescission before delivery 1597
Specific performance to deliver 1598
Breach of warranty 1599
Rights of an Unpaid Seller 1525-1535
Who is an unpaid seller 1525
What are his rights 1526
Possessory lien 1527 - 1528
Stoppage in transit 1529
Resale 1533
Rescind 1534
Third party sales 1535
Article 1592. In the sale of immovable property, even though it may have been
stipulated that upon failure to pay the price at the time agreed upon the rescission of
the contract shall of right take place, the vendee may pay, even after the expiration
of the period, as long as no demand for rescission of the contract has been made
upon him either judicially or by a notarial act. After the demand, the court may not
grant him a new term. (1504a)
Even though it has been stipulated that the contract will be rescinded if not
paid at the right time, the vendee can still pay so long as he has not been
demanded judicially or by notarial act. The court may not grant a new term
because the vendee already had the time before the demand to pay.
(i think this accounts for any reasonable delays the vendee may have had
which caused the delay in paying at the agreed time)
Article 1593. With respect to movable property, the rescission of the sale shall of
right take place in the interest of the vendor, if the vendee, upon the expiration of the
period fixed for the delivery of the thing, should not have appeared to receive it, or,
having appeared, he should not have tendered the price at the same time, unless a
longer period has been stipulated for its payment. (1505)
Rescission happens here if the vendee refused to receive the thing without
just cause or if the vendee fails to pay (unless granted a longer time within
which to pay)
No need for judicial or notarial act because movables do not have stable
prices in the market. Any delay in their disposal will prejudice the vendor.
CHAPTER 6
Actions for Breach of Contract of Sale of Goods
Article 1594. Actions for breach of the contract of sale of goods shall be governed
particularly by the provisions of this Chapter, and as to matters not specifically
provided for herein, by other applicable provisions of this Title. (n)
Actions available to vendor when there is breach of contract of sale on the part
of the vendee: (PDR)
1. Action for payment of the price of the goods [1595]
2. Action for damages due to wrongful neglect and refusal to accept and pay
for the goods [1596]
3. Action for rescission if buyer has repudiated the contract or has manifested
his inability to perform his obligation [1597]
Actions available to the vendee, in case of breach by the vendor (SDR)
1. Action for specific performance in case of failure of the vendor to deliver the
goods [1598]
2. Action for damages for breach of warranty but accepting the goods [1599]
3. Action for rescission for breach of warranty where the vendee may validly
refuse acceptance of the goods, or even if the goods had already been
received, he may return them [1599 par. 4]
Article 1595. Where, under a contract of sale, the ownership of the goods has
passed to the buyer and he wrongfully neglects or refuses to pay for the goods
according to the terms of the contract of sale, the seller may maintain an action
against him for the price of the goods.
Where, under a contract of sale, the price is payable on a certain day, irrespective of
delivery or of transfer of title and the buyer wrongfully neglects or refuses to pay
such price, the seller may maintain an action for the price although the ownership in
the goods has not passed. But it shall be a defense to such an action that the seller
at any time before the judgment in such action has manifested an inability to perform
the contract of sale on his part or an intention not to perform it.
Although the ownership in the goods has not passed, if they cannot readily be resold
for a reasonable price, and if the provisions of article 1596, fourth paragraph, are not
applicable, the seller may offer to deliver the goods to the buyer, and, if the buyer
refuses to receive them, may notify the buyer that the goods are thereafter held by
the seller as bailee for the buyer. Thereafter the seller may treat the goods as the
buyer's and may maintain an action for the price. (n)
1. When the ownership of the goods has passed to the buyer and he
wrongfully neglects or refuses to pay for the price according to the terms of
the contract
2. When the price is payable irrespective of delivery or transfer of title, on a
certain day and the buyer wrongfully neglects or refuses to pay such price.
Defense of Buyer: He may establish the fact that the seller has at
anytime before judgment, manifested his inability not to comply with the
contract
3. When the goods cannot readily be resold for a reasonable price and the
buyer refuses to receive the goods when offered for delivery except when 1596
par. 4 is applicable (there is notice of stopping the contract), with notification
that the seller is holding them as bailee for the buyer
Article 1596. Where the buyer wrongfully neglects or refuses to accept and pay
for the goods, the seller may maintain an action against him for damages for
nonacceptance.
The measure of damages is the estimated loss directly and naturally resulting
in the ordinary course of events from the buyer's breach of contract.
Where there is an available market for the goods in question, the measure of
damages is, in the absence of special circumstances showing proximate damage of
a different amount, the difference between the contract price and the market or
current price at the time or times when the goods ought to have been
accepted, or, if no time was fixed for acceptance, then at the time of the refusal to
accept.
If, while labor or expense of material amount is necessary on the part of the seller to
enable him to fulfill his obligations under the contract of sale, the buyer repudiates
the contract or notifies the seller to proceed no further therewith, the buyer shall be
liable to the seller for labor performed or expenses made before receiving notice of
the buyer's repudiation or countermand. The profit the seller would have made if the
contract or the sale had been fully performed shall be considered in awarding the
damages. ((if the goods were manufactured by the seller, the buyer is liable to
paying for the labor, expenses for materials used before receiving notice of
repudiation, and unrealized profits))
Proximate damages ( damages other than unrealized profits )
Article 1597. Where the goods have not been delivered to the buyer, and the buyer
has repudiated the contract of sale, or has manifested his inability to perform his
obligations thereunder, or has committed a breach thereof, the seller may totally
rescind the contract of sale by giving notice of his election so to do to the buyer. (n)
1597 = option to rescind
Article 1598. Where the seller has broken a contract to deliver specific or
ascertained goods, a court may, on the application of the buyer, direct that the
contract shall be performed specifically, without giving the seller the option of
retaining the goods on payment of damages. The judgment or decree may be
unconditional, or upon such terms and conditions as to damages, payment of the
price and otherwise, as the court may deem just. (n)
Seller must perform their side of the contract, with no option to pay damages
to retain the goods.
Article 1599. Where there is a breach of warranty by the seller, the buyer may, at his
election:
(1) Accept or keep the goods and set up against the seller, the breach of
warranty by way of recoupment in diminution or extinction of the price;
(2) Accept or keep the goods and maintain an action against the seller for
damages for the breach of warranty;
(3) Refuse to accept the goods, and maintain an action against the seller for
damages for the breach of warranty;
(4) Rescind the contract of sale and refuse to receive the goods or if the goods
have already been received, return them or offer to return them to the seller
and recover the price or any part thereof which has been paid.
When the buyer has claimed and been granted a remedy in anyone of these ways,
no other remedy can thereafter be granted, without prejudice to the provisions of the
second paragraph of article 1191.(only one remedy can be used at a time)
Where the goods have been delivered to the buyer, he cannot rescind the sale if
he knew of the breach of warranty when he accepted the goods without
protest, or if he fails to notify the seller within a reasonable time of the election
to rescind, or if he fails to return or to offer to return the goods to the seller in
substantially as good condition as they were in at the time the ownership was
transferred to the buyer. But if deterioration or injury of the goods is due to the
breach or warranty, such deterioration or injury shall not prevent the buyer from
returning or offering to return the goods to the seller and rescinding the sale.
Where the buyer is entitled to rescind the sale and elects to do so, he shall cease to
be liable for the price upon returning or offering to return the goods. If the price or
any part thereof has already been paid, the seller shall be liable to repay so much
thereof as has been paid, concurrently with the return of the goods, or immediately
after an offer to return the goods in exchange for repayment of the price.
Where the buyer is entitled to rescind the sale and elects to do so, if the seller
refuses to accept an offer of the buyer to return the goods, the buyer shall thereafter
be deemed to hold the goods as bailee for the seller, but subject to a lien to secure
the payment of any portion of the price which has been paid, and with the remedies
for the enforcement of such lien allowed to an unpaid seller by article 1526.
(5) In the case of breach of warranty of quality, such loss, in the absence of special
circumstances showing proximate damage of a greater amount, is the difference
between the value of the goods at the time of delivery to the buyer and the value
they would have had if they had answered to the warranty. (n)
Breach of warranty is the violation of an express or implied contract of
warranty, and thus it is a breach of contract. In other words, it occurs when the
warrantor fails to provide the assurance warranted. A seller can expressly or
implicitly assure the buyer about the quality or title of an item sold.
BUYERS REMEDIES IN A BREACH OF WARRANTY BY THE SELLER
1. Recoupment—whereby the buyer accepts the goods but he sets up against
the seller the reduction or extinction of the purchase price.
2. Action for damages—whereby the buyer may (a) accept the goods but w/
damages or (b) refuse to accept the goods for the breach of warranty but also
with damages.
3. Rescission—whereby the buyer seeks the cancellation of the sale and as a
consequence there will be restoration on both sides.
**Situations when buyer cannot choose or elect rescission (KNR)
1. If he knows of the breach of warranty when he accepted the goods w/o
protest
2. If he fails to notify the seller w/in a reasonable time of the election to rescind
3. If he fails to return or offer to return the goods to the seller in substantially
the same condition as they were at the time the ownership was transferred to
him.
1525-1535
Article 1525. The seller of goods is deemed to be an unpaid seller within the
meaning of this Title:
(1) When the whole of the price has not been paid or tendered;
Commented [7]: Rights of an Unpaid Seller 1525-1535
Who is an unpaid seller 1525
What are his rights 1526
Possessory lien 1527 - 1528
Stoppage in transit 1529
Resale 1533
Rescind 1534
Third party sales 1535
(2) When a bill of exchange or other negotiable instrument has been received as
conditional payment, and the condition on which it was received has been broken by
reason of the dishonor of the instrument, the insolvency of the buyer, or otherwise.
In articles 1525 to 1535 the term "seller" includes an agent of the seller to whom the
bill of lading has been indorsed, or a consignor or agent who has himself paid, or is
directly responsible for the price, or any other person who is in the position of a
seller. (n)
An unpaid seller is one who has not been paid or tendered the whole price or
has received a negotiable instrument or a bill of exchange (promissory note)
and the condition on it has been broken by reason of the dishonor of the
instrument, the insolvency of the buyer, or otherwise
Article 1526. Subject to the provisions of this Title, notwithstanding that the
ownership in the goods may have passed to the buyer, the unpaid seller of goods, as
such, has:
(1) A lien on the goods or right to retain them for the price while he is in
possession of them;
(2) In case of the insolvency of the buyer, a right of stopping the goods in
transitu after he has parted with the possession of them;
(3) A right of resale as limited by this Title;
(4) A right to rescind the sale as likewise limited by this Title.
Where the ownership in the goods has not passed to the buyer, the unpaid seller
has, in addition to his other remedies a right of withholding delivery similar to and
coextensive with his rights of lien and stoppage in transitu where the ownership has
passed to the buyer. (n)
Article 1527. Subject to the provisions of this Title, the unpaid seller of goods who is
in possession of them is entitled to retain possession of them until payment or tender
of the price in the following cases, namely:
(1) Where the goods have been sold without any stipulation as to credit;
(2) Where the goods have been sold on credit, but the term of credit has
expired;
(3) Where the buyer becomes insolvent.
The seller may exercise his right of lien notwithstanding that he is in
possession of the goods as agent or bailee for the buyer. (n)
Article 1528. Where an unpaid seller has made part delivery of the goods, he may
exercise his right of lien on the remainder, unless such part delivery has been
made under such circumstances as to show an intent to waive the lien or right of
retention. (n)
Article 1529. The unpaid seller of goods loses his lien thereon:
(1) When he delivers the goods to a carrier or other bailee for the purpose of
transmission to the buyer without reserving the ownership in the goods or the
right to the possession thereof;
(2) When the buyer or his agent lawfully obtains possession of the goods;
(3) By waiver thereof.
The unpaid seller of goods, having a lien thereon, does not lose his lien by reason
only that he has obtained judgment or decree for the price of the goods. (n)
Article 1533. Where the goods are of perishable nature, or where the seller expressly
reserves the right of resale in case the buyer should make default, or where the
buyer has been in default in the payment of the price for an unreasonable time, an
unpaid seller having a right of lien or having stopped the goods in transitu may resell
the goods. He shall not thereafter be liable to the original buyer upon the contract of
sale or for any profit made by such resale, but may recover from the buyer damages
for any loss occasioned by the breach of the contract of sale.
Where a resale is made, as authorized in this article, the buyer acquires a good title
as against the original buyer.
It is not essential to the validity of resale that notice of an intention to resell the goods
be given by the seller to the original buyer. But where the right to resell is not based
on the perishable nature of the goods or upon an express provision of the contract of
sale, the giving or failure to give such notice shall be relevant in any issue involving
the question whether the buyer had been in default for an unreasonable time before
the resale was made.
It is not essential to the validity of a resale that notice of the time and place of such
resale should be given by the seller to the original buyer.
The seller is bound to exercise reasonable care and judgment in making a resale,
and subject to this requirement may make a resale either by public or private sale.
He cannot, however, directly or indirectly buy the goods. (n)
Article 1534. An unpaid seller having the right of lien or having stopped the goods in
transitu, may rescind the transfer of title and resume the ownership in the goods,
where he expressly reserved the right to do so in case the buyer should make
default, or where the buyer has been in default in the payment of the price for an
unreasonable time. The seller shall not thereafter be liable to the buyer upon the
contract of sale, but may recover from the buyer damages for any loss occasioned
by the breach of the contract.
The transfer of title shall not be held to have been rescinded by an unpaid seller until
he has manifested by notice to the buyer or by some other overt act an intention to
rescind. It is not necessary that such overt act should be communicated to the buyer,
but the giving or failure to give notice to the buyer of the intention to rescind shall be
relevant in any issue involving the question whether the buyer had been in default for
an unreasonable time before the right of rescission was asserted. (n)
Article 1535. Subject to the provisions of this Title, the unpaid seller's right of lien or
stoppage in transitu is not affected by any sale, or other disposition of the goods
which the buyer may have made, unless the seller has assented thereto.
If, however, a negotiable document of title has been issued for goods, no seller's lien
or right of stoppage in transitu shall defeat the right of any purchaser for value in
good faith to whom such document has been negotiated, whether such negotiation
be prior or subsequent to the notification to the carrier, or other bailee who issued
such document, of the seller's claim to a lien or right of stoppage in transitu. (n)
---------------------------------------------------------------------------------------------------------------31815
Financial leverage
Degre of financial leverage (DFL)
DFLE = percent change in EPS / Percent change in EBIT
Where EPS - earnings per share.
EBIT - earnings before interest and tax
“High DFL = High Risk”
Pag tumaas leverage, tataas utang, tataas DFL
Leverage = obtain a debt to finance an income generating project.
- Good debt - generates income higher than interest expense
- Increases the wealth
-
Bad debt - interest expense is higher than the income that may be generated
Reduces the wealth
Higher risk of leverage comes from the fact na marami kang utang
Savings - take advantage of your assets. Do not let it sit idle.
- Decide on what to do with your savings
- Earn income
You can use your savings to get income thru financial markets.
Savings → financial markets → users of funds
Financial claims: stocks
Debt instruments: bonds
Using the funds to ultimately raise EPS
Financial markets include: banks, stock exchange
Treasury Bills (T-Bills)
- Short term fixed income securities (not more than 1 year)
- Issued by the republic of the PH
- Issued thru bureau of treasury
- Risk: risk-free because backed by the GOVT
Treasury Bonds
- Medium to long term govt securities (more than one yr)
- Pay interest regularly (interest coupon payments_
- Risk: risk free as well
Treasury notes
- Range of maturity: more than 1year to 10years
- With lower yields compared to t-bonds
Treasury bonds
- Range of maturity more than 10years
- Highest yields compared to t-bills and t-notes
Why t-bonds offer the highest yield
- Risk is directly proportional to term
- Longer maturities = higher risk
Term/Maturity period
- Short term less than 1 yr
- Medium term 1-3 yr
- Long term more than 3 yr
Commercial paper
- Unsecured short-term promissory note issued by private corporation
- Another option of raising funds, aside from obtaining a loan from a bank
- Only companies with excellent credit ratings will be able to sell it
Reasons why private companies will issue bonds instead of stock
- It will not affect ownership of the company
- The earnings per share will not be affected
Read sarbane-oxley act of 2002 and determine why it was enacted
The Sarbanes-Oxley Act of 2002 cracks down on corporate fraud. It created the
Public Company Accounting Oversight Board to oversee the accounting industry.1 It
banned company loans to executives and gave job protection to
whistleblowers.2 The Act strengthens the independence and financial literacy of
corporate boards. It holds CEOs personally responsible for errors in accounting
audits.
The Act is named after its sponsors, Senator Paul Sarbanes, D-Md., and
Congressman Michael Oxley, R-Ohio. It's also called Sarbox or SOX.3 It became law
on July 30, 2002. The Securities and Exchange Commission enforces it.4
Many thought that Sarbanes-Oxley was too punitive and costly to put in place. They
worried it would make the United States a less attractive place to do business. In
retrospect, it's clear that Sarbanes-Oxley was on the right track. Deregulation in the
banking industry contributed to the 2008 financial crisis and the Great Recession.
Determine the rates of bonds and treasury bills issued by the ph govt (in the
bureau of treasury website)
https://www.treasury.gov.ph/wp-content/uploads/2021/02/Treasury-Bills-AuctionResults-on-08-February-202.pdf
https://www.treasury.gov.ph/wp-content/uploads/2021/01/Treasury-Bonds-PublicOffering-on-02-February-2021.pdf
Know the distinction between primary market and secondary market
The primary market is where securities are created, while the secondary market is
where those securities are traded by investors.
In the primary market, companies sell new stocks and bonds to the public for the first
time, such as with an initial public offering (IPO).
The secondary market is basically the stock market and refers to the New York
Stock Exchange, the Nasdaq, and other exchanges worldwide.
--------Role of investment bankers
- Brings together firms (source of securities) and investors.
- Usually, investment bankers are not really bankers, and generally do not
invest on the securities they are selling
Initial Public Offering
- First sale of common stock to the public
- Primary market
Underwriting
- buying the securities with the intention of selling the same to the general
public
Best Efforts Agreement
- There is no guarantee
Role of Securities and Exchange Commission
- Protect the investing public
Why Sarbanes-Oxley Act was created?
(sa act) Sec. 906 Corporate Responsibility for Certification of Periodic Financial
Reports
-
Because there could be connivance between auditor and top management of
company
Sec. 1001 - the federal income tax return of a corporation should be signed by the
chief executive officer of such corporation
The PH also has something like sarbanes-oxley.
Statement of Management’s responsibility for annual tax return. Management is
likewise responsible for all information and representations contained in the financial
statements accompanying the annual income tax return or annual information return
covering the same reporting period. (para makaiwas sa pangloloko ng pagreport ng
income)
It must be signed by the president, CEO, and CFO
In the website of SEC, there is constant monitoring of unscrupulous companies.
Primary - serves as entity that raises funds
1. Inquire From at least 3 different banks, the information about the mutual funds
- Minimum investment
- Previous performance (e.g. past three years)
2. PAG-IBIG MP2 Savings
Bale,
1. history ng ponzi scheme at bakit siya tinawag na ganoon
2. Feel ko i compare natin siya sa pyramiding scheme para malinaw?
3. Tapos ipasok natin history niya sa Pilipinas tapos magbigay tayo ng example na
parang nag trending para mas maganda.
4. Magbigay tayo ng pang-malakasang advice to avoid this kind of scheme.
Insurance =/= mutual funds
- Different purposes for depositing. Mutual funds are invested in to gain profit.
Insurance is invested in for security.
Mutual funds
-
They will not tell you if sure yung profit sa mutual fund unless gusto mo mag
invest explicitly sa bonds
Compared sa MP2 ng PAG-IBIG,
https://www.pagibigfund.gov.ph/Membership_ModifiedPagIBIG2.html
SECURITIES MARKETS
If the company would want additional funds, pwede loan from bank, issue bonds, or
require existing stockholders to increase their investments if willing
Another way is to issue shares of stock to the investing public.
Originating house and Syndicate
Originating house - a firm (investment bankers) that manages the underwriting
Syndicate - a group of brokerage houses
- That underwrite and market securities
- Advantage - having a wide association or scope of area where you can offer
shares of stock
Broker - middle man, tagahanap ng buyer, madali trabaho
Market Maker - tagapili ng product coming from issuing company. Siya bibili ng lahat
ng shares of stock bago ibenta sa secondary market
Commission
Spread = Bid Price (buyer) - Ask Price (seller)
Download mo yung mga ppt tangina ka
Another example of spread: foreign currency transaction
It is not easy to be involved in being a market maker. Need ng license from SEC
INVESTING IN STOCKS:
First - find a stockbroker
- Traditional
- Online
Second - open a trading account
- Fill out the Customer Account Information Form (CAIF)
Third - discuss your investment plan (buy/sell) with your stockbroker
Fourth - give orders to your stockbroker
- Market order
- Day order
- Good-til-cancelled order
Fift - ?
Tignan mo nalang uli ppt bobo
Sixth - Deliver the stocks
- Pay the purchase price
- Receive the payment
- Thru the clearing house
Clearing house - an entity that will ensure that the seller will receive payment
properly and that the buyer will receive the shares completely
Settlement date - the date to pay the purchased securities, which is the same day
which the said securities will be delivered (facilitated by clearing house as well)
FACTORS THAT AFFECT SECURITY PRICE:
-
Supply and demand - syempre pag mataas demand, mataas price. Pag
mababa supply, mataas price.
Bank rate
Financial performance (earnings) of the company - high income means high
dividends
Stock’s apparent risk - e.g., yung ABS-CBN shutdown
Trend - uptrends and downtrends
Market sentiments - overall consensus of investors about a particular stock or
the stock market as a whole
- Bullish - increasing prices of share
- Bearish - decreasing prices of share
RISK AND ITS MEASUREMENT
Money begets money. We invest and we anticipate return (profit).
Return on Investment (ROI) - gains generated by an investment.
- Evaluates the performance of an investment
ROI = NROI / COI [nroi - net return on investment. Coi - cost of investment]
Download mo din yung mga excel file bobo
Wag mo kalimutang i-dowbnload yung mga ppt bobo
Annualized roi = ((COI+NROI)/COI)^(365/DI)-1
Annualized aroi - the need to annualize the roi to have a meaningful comparison
RISKY RISKY WIGI WIGGY
Risk - a possibility that the actual return is lower than the expected return
- A possibility of incurring loss
Kinds of risk - diversifiable (unsystematic)
- Undiversiafiable (systematic)
Diversifiable - risk associated with the individual asset
- May be controlled
- Business risk - refers to the operation of the business
- Financial risk
Non-diversifiable risk - cannot be controlled
- Fluctuations in securities prices
- Changes in interest rats
- Inflation
- Fluctuations in exchange rates
STANDARD DEVIATION - method of assessing risk of investment
Low standard dev - low risk of investment--|
|
|---------- STILL NOT GUARANTEES
|
High standard dev - very volatile, riskier------|
Low standard dev may not be preferable to some investors (kasi may mga
aggressive)
WHAT IS CRYPTOCURRENCY
FORM AN OPINION ON THE VIABILITY OF INVESTING IN
CRYPTOCURRENNCY. APPLY THE CONCEPT OF RISK AND RETURN
----====----=-=-=-=--==--=-=-==-==-=---=-=-=--=---
Money - currency
Functions - medium of exchange - facilitates business transaction
- Measure of value - remove valuation problem in barter
- Store of value - may be kept for future use
Objects that were used as money back then - salt (Rome), shells, silver, gold, paper
Characteristics of money - durable, portable, divisible, difficult to counterfeit,
acceptable in particular jurisdiction
Problem on durability - it is unlawful to willfully deface, mutilate, tear, burn, or destroy
in any manner currency notes and coins issued by the central bank of the PH, and
you can get punished for it
Problem on counterfeit money - punishable by law
May limit yung sa legal tender sa coins
Legal tender - checks do not have legal tender power, and their acceptance as
payment is at the option of a creditor provided that the check has been cleared and
credited to the account to the creditor shall be equivalent to the amount
Cryptocurrency shit
READ BSP CIRCULAR NO. 1108 SERIES OF 2021
NORMALCY CHARGES
imprison ment punishnnetmnt of BP22
---------------------BIL
----------------------ITLP
Autonomy of contracts - you are free to have stipulations in a contract as long as it is
not contrary to law
Not everything within the commerce of man is subject of a legal contract if it is illegal.
In international and local transactions, the subject matter of the transaction must
always be legal.
Tangible and intangible are different from movable and immovable.
International trade normally handles movables (plus patents and intellectual
property)
Natural - human beings delivered completely from the mother’s womb
Juridical - creation of law
If fetus has intrauterine life of less than 7 months, has to be alive for 24 hours, in
order for the baby to gain personality, to be treated as a natural person. (relevant to
succession)
Succession - the right of the heirs to succeed on the properties left behind by the
decedent (even without a will). Intestate succession kapag walang will. Pag may will,
testamentary.
Will - a document with recitals of the wishes of the testator/testatrix (yung gumawa
ng will)
Pag yung baby di nabuhay after 24 hours,, babalik yung donation sa decedent.
PERO, pag umabot ng 25 hours, nagka personality yung bata, so mapupunta sa
parents yung donation.
If you have juridical capacity, you can be subject to legal relation, and with the
capacity to act, you can act with legal effects. A corporation may do trade, an
individual may do trade. It is relevant to know in international trade and relations
because you can sue and you can be sued as juridical and natural persons.
Trading talks about sales, in short. PERO, it becomes complicated in the interrelations of things. In international trade, you consider natural and juridical persons
being sellers and buyers.
Domestic vs international trade
Domestic - local purchases within a country
International - imports and exports. Cross-border trade relations. The products are
crossing borders. Increases dollar reserves
Tariff - revenue generation from international trading, the quota imposed on the
goods we import from other countries. The amount paid by importers for the goods.
Customs duties.
[[Hatshepsut - female pharaoh, established trade routes during her time]]
Pag nagbabayad ang bansa ng utang, debt servicing.
Goods and services that cross borders fall under international trade.
Different jurisdictions have different laws, which is where international trade laws
come in.
-GATT - general agrements on tariffs and trade
WTO - world trade organization
ADB - asian development bank
WB - world bank
NAFTA - north atlantic free trade agreement
EFTA - european free trade agreement - Switzerland, Norway , iceland, and
Lichtenstein
“PH-EFTA Free Trade Agreement”
PH and JP - PJEPA (Philippines Japan Economic Partnership Agreement) - two
parties, bilateral agreement.
ASEAN
International trades are governed by treaties (+ listed above)
-Pag maraming bansa, multilateral agreement.
GATT is under WTO
WTO-GPA - Government Procurement Agreement
Parties to agreements may opt out (the PH signed the GATT, but we did not sign the
GPA) - plurilateral agreement. We opted out because we have laws on
procurement, and our laws are different and in conflict with the GPA.
In conflict because we have the domestic preference laws.
We (the PH) are not signatories, but we are being an observer to the WTO-GPA. Not
under the agreement, but now allowed to observe the agreement. Once we are
ready, we can sign. WTO-GPA calls for non-discrimination, which opposes our
domestic preference laws. The problem is that we were under so many rulers before.
During the commonwealth era, nagkaron ng batas called the Commonwealth Act
138 - kauna-unahang domestic preference law (1936). It made its way into the 1987
consti, though not directly, saying we should prefer filipino goods and services
Signing the WTO-GPA would contradict the consti.
Globalization - open trading paves way to this
Silk Road - trade route from china to europe. International trade.
They say they want to change the economic provisions of the consti. They want to
do Cha-Cha, which is dangerous. They want to remove domestic preference.
GATT opened up opportunities for imported products because it lowered tariffs.
Trans Pacific Partnership Agreement
-------------------------------------------
12 single spaced
-------------------------------------------COGSA
Carriage of Goods by Sea Act (1936) - applied within the PH.
- Passed by the 74th congress of the U.S.
- Industrialized nations recognized the need to reconcile the relationship
between carriers and shippers.
[bill of lading a document issued by a carrier facilitating the transfer of goods from
shipper to consignee]
Downloaded na yung report ng grp 1. Note mo nalang yung mga ibubutt in ni sir.
HARTER LAW - american legislation. There is a bigger problem here that the US did
not recognize, making the US create COGSA. Had no package limitations. No
statute of limitation. More protective of the carrier.
TACKLE-TO-TACKLE principle
When talking about carriage of goods - port of origin, port of call, port of destination.
The moment the goods are transferred on board the ship whether the ship is at berth
or in transit, COGSA will apply provided it is a foreign transfer of goods until the
goods are unloaded at the port of destination. As long as the goods remain on the
vessel, COGSA will apply.
LIMITATIONS on the liability of the common carrier and the shipper - defined in the
COGSA (in the PH we adopt it suppletorily because of the civil code
Difference from the Hague rule - COGSA amends the hague act giving by more
protection to the shippers and their cargo (e.g. ship owners must pay shipers for
damaged cargo. COGSA increased amount owed for each container)
PH Adoption of COGSA
-
Shippers had little power.
Ship owners (steelboats, etc.) had the power to dictate the loading of the
cargo, insurance, and the liability they will cover, which is why COGSA was
made.
Where COGSA applies. - foreign trade
- Covered by a negotiable bill of lading; BCO, NVOCC
- Only under its own power. If non-negotiable bill of lading, no application of
COGSA
- Negotiable vs non-negotiable - [i-google mo bobo AY NEED PALA IDIFFERENTIATE. NEGOTIABLE INSTRUMENTS LAW]
- Bill of lading intended but cargo damaged before issuance, the COGSA will
apply contractually
Where it doesn’t apply - contract of carriage not covered by charter party
-
If bill of lading only used as a receipt
Duration - when goods are loaded onto the ship until its discharge from the ship
- Sometimes extended by the terms and conditions of the bill of lading to
include a larger amount of time
- Allows carrier to limit liability
[who is a common carrier, and their responsibilities ART. 1732]
Duties of the carrier
- Seaworthy ship
- Manned by a skilled crew and a master that is qualified
- Proper condition of ship for crew and cargo
- Must make holds, refrigerating and cooling chambers, and parts of the ship
where goods are carried much be properly stored in proper areas
- Must carefully load and discharge goods
- Must issue to the shipper a bill of lading showing requirements
---------------------------===-=-=-=-=-=-=-=-=-=-=
31817
In a free market, with the multitude of interactions between buyers and sellers,
mahirap i-monitor lahat, so dapat may pricing mechanism.
Because of the market, people can get products elsewhere (because not all places
can entirely self sustain. They can acquire products thru trade to sufficiently sustain
themselves.)
The Market forces of Supply and Demand
- Market - a group of buyers and sellers of a particular good or service
- Not a physical venue.
- Buyers - determine the demand for the product
- Sellers - determine the supply of the product
- Competitive market - there are many buyers and sellers
-
The law of supply and demand only works where no one is dictating the price
Demand
- Quantity demanded - amount of a good that buyers are willing and able to
purchase
- Law of demand - “when other things are equal, when the price of the good
rises, the quantity demanded goes down”
- Demand schedule - a table, relationship of quantity demanded and quantity of
product.
Shifts in the demand curve
- Increase in demand
- Any change that increases the quantity demanded at every price
- Demand curve shifts right
- Decrease in demand
- Any change that decreases the quantity demanded at every price
- Demand curve shifts left
Factors that influence the demand curve
- Income - when income increases, we are more willing and more able to buy.
However, mas likely tayo na umiwas sa inferior goods pag mataas income
- Normal good - increase in demand
- Inferior good - decrease in demand
- Prices of related goods - Substitutes - pwede ipagpalit.
- Complementary - dapat sabay bilhin
- Tastes
- Changes in taste leads to changes in demand
- Pag uso, tataas demand, pag laos, bababa
- Expectations about the future
- Expectation in an increase of income - increase in current demand
- Expectation in a higher price - increase in current demand (kasi mag
iistock up ka bago tumaas presyo sa susunod)
- Number of buyers
Supply
- Quantity supplied - amount of good sellers are willing and able to sell
- When price of good rises, quantity of supplied good rises (supplier pov)
-
Shift of the curve to the right - increase of supply
Shift to the left - decrease
Variables that affect supply curve
- Input prices (costs)
- Higher input prices = decrease in supply
-
Technology
- Advance in technology - increase in supply
Expectations about the future
- Affect current supply
- Expected higher prices - decrease in current supply
Equilibrium
- A situation where the supply and demand forces are in balance
- Quantity supplied = quantity demanded
- Where supply and demand curves intersect (giving you equilibrium price and
equilibrium quantity)
Surplus
- Quantity supplied > quantity demanded
Shortage
- Quantity supplied < quantity demanded
Sometimes there is no need for government intervention in temrs of surpluses and
shortages. Eventually, the market will correct itself. Pero minsan pag may crisis
kailangan talaga mag intervene ng govt (pero di pwede matagal)
3 steps to analayzing changes in equilibrium
1. Decide whether the event shifts the demand curve, supply curve, or both
curves
2. Decide whether the curve shifts to the right or the left
3. Use the supply and demand diagram to compare the initial and new
equilibrium, and find out the effects on equilibrium price and quantity
---
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=--=
31818
Human Resource Management
Hr managers are underappreciated.
Basically, covid fucked everyone over.