toaz bar q & a

ANSWERS TO BAR EXAMINATION QUESTIONS IN CIVIL LAW ARRANGED BY TOPIC (1975 – 2004) Edited and Arranged by: Janette Laggui-Icao and Alex Andrew P. Icao (Silliman University College of Law) From the ANSWERS TO BAR EXAMINATION QUESTIONS by the UP LAW COMPLEX July 26, 2005 Page 1 of 391 This work is not intended for sale or commerce. This work is freeware. It may be freely copied and distributed. It is primarily intended for all those who desire to have a deeper understanding of the issues touched by the Philippine Bar Examinations and its trend. It is specially intended for law students from the provinces who, very often, are recipients of deliberately distorted notes from other unscrupulous law schools and students. Share to others this work and you will be richly rewarded by God in heaven. It is also very good karma. We would like to seek the indulgence of the reader for some Bar Questions which are improperly classified under a topic and for some topics which are improperly or ignorantly phrased, for the authors are just Bar Reviewees who have prepared this work while reviewing for the Bar Exams under time constraints and within their limited knowledge of the law. We would like to seek the reader’s indulgence for a lot of typographical errors in this work. The Authors July 26, 2005 Page 2 of 391 Table of Contents Persons ..........................................................................................................11 Conflict of laws ............................................................................................25 Adoption .........................................................................................................52 Family Code ..................................................................................................58 Succession ..................................................................................................112 Donations ...................................................................................................157 Modes of Acquiring Ownership ...........................................................167 Property .......................................................................................................169 LTD .................................................................................................................211 Prescription .................................................................................................245 Contracts ....................................................................................................250 Estoppel .......................................................................................................263 Natural obligations ...................................................................................265 Obligations .................................................................................................265 Trusts ............................................................................................................297 Sales .............................................................................................................301 Lease .............................................................................................................324 Common carriers ......................................................................................335 Agency ..........................................................................................................339 Partnership ..................................................................................................346 Commodatum & Mutuum .......................................................................352 Deposit ..........................................................................................................356 Surety ............................................................................................................358 Antichresis Mortgage Pledge ...........................................................................................................363 Quasi-contracts .........................................................................................367 Torts and damages ...................................................................................372 Aleatory contracts; gambling ...............................................................390 Compromises and arbitration ...............................................................390 Page 3 of 391 Detailed Table of Contents Persons ..........................................................................................................11 civil register...................................................................................................12 conclusive presumption of knowledge of the law ..........................................13 decisions of inferior courts ............................................................................14 duty of judges to render judgment ................................................................14 effect of obiter and dissenting opinion; decisions of the SC..........................14 effectivity of laws...........................................................................................14 emancipation ................................................................................................15 equity ............................................................................................................16 human relations ............................................................................................16 ignorance of the law vs mistake of fact ........................................................17 independent civil action ................................................................................17 juridical capacity vs capacity to act ...............................................................18 natural persons .............................................................................................19 prejudicial question .......................................................................................19 presumption of simultaneous death ..............................................................20 prospectivity of laws; exceptions...................................................................22 restrictions on capacity to act........................................................................22 use of surnames ...........................................................................................23 waiver ...........................................................................................................23 Conflict of laws ............................................................................................25 Art. 15, 16 & 17 ............................................................................................ 25 cognovit; borrowing statute; characterization................................................32 effect of divorce granted to former Filipinos ..................................................32 effect of divorce secured abroad...................................................................33 forum non conveniens & lex loci contractus & long arm statute....................34 laws governing contracts ..............................................................................36 laws governing contracts of carriage ............................................................36 laws governing divorce .................................................................................37 laws governing marriages .............................................................................38 laws governing real and personal property ...................................................40 laws governing succession ...........................................................................40 laws governing wills ......................................................................................43 nationality theory...........................................................................................44 naturalization ................................................................................................45 operation of foreign laws upon resident ........................................................46 processual presumption................................................................................47 renvoi doctrine ..............................................................................................47 significant relationships theory......................................................................49 theory of effective nationality ........................................................................49 torts; prescriptive period ...............................................................................49 Adoption .........................................................................................................52 qualifications of adopter................................................................................52 successional rights of adopted child .............................................................55 who are considered as natural parents.........................................................56 Family Code ..................................................................................................58 Annulment effects; requisites before remarriage .....................................................59 fraud ......................................................................................................60 grounds..................................................................................................62 judicial declaration .................................................................................62 Page 4 of 391 Legal Separation; prescription of actions...............................................63 proper party ...........................................................................................63 psychological incapacity ........................................................................64 art. 26 ...........................................................................................................64 declaration of nullity: annulment: legal separation: separation of property – grounds.........................................................................................................66 divorce; void marriages.................................................................................67 donations by reason of marriage; effect of declaration of nullity ...................67 effect of divorce; void marriages ...................................................................68 emancipation ................................................................................................69 family ............................................................................................................69 family home ..................................................................................................70 legal separation ............................................................................................71 grounds..................................................................................................71 proper party ...........................................................................................72 nullity; annulment; legal separation; grounds................................................72 parental authority ..........................................................................................73 paternity and filiation.....................................................................................75 presumptive legitime.....................................................................................80 property regime of unions without marriage..................................................81 property relations ..........................................................................................83 charges..................................................................................................91 conjugal partnership pf gains.................................................................92 dissolution of partnership; custody of children .......................................93 donations between spouses ..................................................................94 marriage settlements .............................................................................94 separation of property............................................................................96 requisites of marriage ...................................................................................97 retroactive application; vested rights...........................................................103 rights and obligations of husband and wife.................................................103 special parental authority; liability of teachers.............................................105 support........................................................................................................105 void marriages ............................................................................................106 legal personality to seek declaration of nullity......................................109 property regime ...................................................................................110 psychological incpacity ........................................................................110 Succession acceptance, repudiation, collation...............................................................112 amount of successional rights.....................................................................112 barrier between illegitimate and legitimate relatives ...................................112 capacity to inherit; conditional devise .........................................................113 collation ......................................................................................................114 disinheritance..............................................................................................115 donation of a spouse’s share ......................................................................120 incapacity....................................................................................................121 intestate heirs .............................................................................................121 intestate proceedings; jurisdiction...............................................................123 intestate succession ...................................................................................123 joint wills .....................................................................................................136 legal separation; effect................................................................................136 legitime .......................................................................................................136 order of succession and sharing; right of representation, institution, accretion ....................................................................................................................138 partition .......................................................................................................139 preterition....................................................................................................139 probate .......................................................................................................141 renunciation; compromise...........................................................................144 Page 5 of 391 representation.............................................................................................144 reserva troncal ............................................................................................145 right of representation.................................................................................148 testate succession ......................................................................................148 transmission of rights to succession ...........................................................149 when death takes place; pesumptive legitime.............................................150 wills.............................................................................................................151 codicil...................................................................................................151 formalities ............................................................................................151 revocation ............................................................................................154 testamentary intent ..............................................................................155 witnesses to holographic wills..............................................................156 Donations Donation & Sales ownership of the thing donated ......................................157 Annulment...................................................................................................157 donations mortis causa...............................................................................160 donee’s civil personality..............................................................................161 effect of illegal and immoral conditions .......................................................161 kinds ...........................................................................................................162 mortis causa; formalities .............................................................................163 requisited for perfection ..............................................................................163 revocation ...................................................................................................164 valid acceptance .........................................................................................165 Modes of Acquiring Ownership ...........................................................167 Property accession....................................................................................................169 chattel mortgage over immovables .............................................................173 co-ownership ..............................................................................................173 easements ..................................................................................................180 good faith/ bad faith ....................................................................................189 hidden treasure...........................................................................................196 immovable properties; chattel mortgage over immovables.........................198 nuisance .....................................................................................................199 possession vs occupation ...........................................................................201 possession; 559..........................................................................................201 possession; squatting .................................................................................204 real vs personal property ............................................................................205 rights of a property owner; limitations .........................................................207 usufruct .......................................................................................................207 LTD .................................................................................................................211 acquisition of lands; citizenship requirement ..............................................211 Act 3344 .....................................................................................................212 amendment of entries in a certificate of title ...............................................212 annotation of lis pendens............................................................................213 annotations; classification ...........................................................................213 foreshore lands ...........................................................................................214 homestead ..................................................................................................214 increase of area by accession ....................................................................217 indefeasibility of title....................................................................................217 IPV adverse claims ......................................................................................217 buyer in good faith; laches.....................................................................218 collateral attack .....................................................................................218 constructive trust ...................................................................................219 effect of entry in day book; acquisitive prescription; laches ...................219 effect of laches ......................................................................................220 Page 6 of 391 foreclosure of registered lands; prescription..........................................220 forged deed as a root or title..................................................................221 forgery; innocent purchaser for value ....................................................223 fraud in the procurement of patent ........................................................224 free patents; jurisdiction of Director of Lands ........................................225 government lands..................................................................................225 innocent purchaser for value .................................................................226 lis pendens ............................................................................................227 mirror principle.......................................................................................227 notice of lis pendens; transferee pendente lite ......................................228 reconveyance ........................................................................................229 registration as the operative act of conveying the land..........................230 remedies; prescriptive period ................................................................230 remedies; reconveyance .......................................................................231 reopening of a decree of registration.....................................................232 sale of unregistered lands .....................................................................236 unregistered land...................................................................................236 use of fraud in aplication of title; prescriptive period for reconveyance .237 judicial confirmation of imperfect title ..........................................................238 judicial reconstitution of title ........................................................................239 ministerial duty of the Register of deeds to register ....................................240 procedure; consulta ....................................................................................241 reclamation of foreshore lands....................................................................241 redemption..................................................................................................242 scope of registration ...................................................................................242 torrens vs recording ....................................................................................243 writ of possession .......................................................................................243 Prescription .................................................................................................245 acquisitive; movable ...................................................................................246 just title .......................................................................................................246 laches .........................................................................................................247 real rights ....................................................................................................248 Contracts annulment of contracts; capacity to sue......................................................250 annulment of contracts; prescriptive period ................................................250 consensual vs real contracts.......................................................................251 consent; invitation to bid .............................................................................251 consideration; validity .................................................................................252 form of contracts .........................................................................................252 inducing another to violate a contract .........................................................253 innominate contracts...................................................................................253 obligatory nature of contracts......................................................................254 perfection of contracts; obligations with a period ........................................255 privity of contract.........................................................................................255 reformation of instruments ..........................................................................256 rescission of contracts; capacity to sue ......................................................256 Statute of Frauds ........................................................................................257 stipulation pour atrui ...................................................................................259 void contracts; in pari delicto principle ........................................................260 void contracts; usurious interests................................................................260 void vs voidable contracts...........................................................................261 void/unenforceable contracts ......................................................................261 voidable contracts.......................................................................................261 Estoppel .......................................................................................................263 Natural obligations ...................................................................................265 Obligations Page 7 of 391 alternative/ facultative obligations ...............................................................265 alternative/facultative obligations ................................................................265 civil vs natural oblig.....................................................................................266 conditional obligations ................................................................................267 exemption from liability due to fortuitous events; exceptions ......................270 extinguishment of a cause of action............................................................270 extinguishment assignment of rights ............................................................................270 compensation ......................................................................................271 compensation vs payment............................................................272 compensation: payment: confusion: set-off ..................................273 condonation .........................................................................................273 dation...................................................................................................274 dation in payment vs assignment .................................................275 extraordinary inflation or deflation........................................................275 loss ......................................................................................................276 loss; impossible service................................................................277 novation ...............................................................................................277 payment...............................................................................................281 consignation, set-off .....................................................................283 application ....................................................................................284 consignation, when applicable......................................................284 fortuitous events .........................................................................................285 joint/ solidary liability ...................................................................................286 loss of the thing due....................................................................................290 loss of the thing due; force majeure............................................................290 nature and effect of obligations...................................................................291 obligation to deliver a determinate thing; effect of loss ...............................291 obligation to deliver a generic thing ............................................................292 obligation to give; obligation to do...............................................................293 obligations with a penal clause ...................................................................294 obligations with a period .............................................................................295 suspensive period dependent upon will of debtor................................297 Trusts ............................................................................................................297 Sales Sales & Donation; ownership of the thing sold............................................301 Art. 1592 .....................................................................................................301 assignment of credit....................................................................................302 conditional sale vs absolute sale ................................................................302 contract of sale vs agency to sell ................................................................303 contract of sale vs contract to sell...............................................................303 contract to sell.............................................................................................303 contract to sell vs contract of sale...............................................................304 double sales................................................................................................304 effect of oral sale ........................................................................................306 equitable mortgage .....................................................................................307 Maceda law.................................................................................................310 option contract ............................................................................................312 option; earnest money; Art. 1592................................................................312 pacto de retro; when not .............................................................................313 perfected sale .............................................................................................314 Recto law ....................................................................................................315 redemption (conventional and legal)...........................................................317 redemption; legal; by co-owners..........................................................318 right of first refusal ......................................................................................319 right of repurchase......................................................................................320 tradition .......................................................................................................320 Page 8 of 391 transfer of ownership ..................................................................................321 vendor’s lien................................................................................................322 who bears risk of loss .................................................................................322 Lease .............................................................................................................324 Lease of urban lands ..................................................................................325 contract for a piece of work.........................................................................326 contract for a piece of work; liability of architects/contractors................326 contract of labor ..........................................................................................327 effect of death of lesee ...............................................................................327 ejectment ....................................................................................................327 extinguishment............................................................................................328 implied new lease .......................................................................................328 lease of rural lands .....................................................................................329 lease with a term.........................................................................................329 liability for hidden defects ...........................................................................330 option to buy ...............................................................................................331 reduction of rent..........................................................................................331 rights and obligations of leasee and lessor .................................................332 sublease .....................................................................................................332 sublease; delay in payment of rentals ...................................................333 Common carriers ......................................................................................335 Agency ..........................................................................................................339 agency vs sale ............................................................................................339 appointment of sub-agent ...........................................................................339 authority to sell does not include authority to collect...................................340 commission.................................................................................................340 coupled with an interest ..............................................................................340 general vs special agency ..........................................................................342 liability of an agent ......................................................................................342 to render an account .............................................................................343 powers of the agent ....................................................................................343 termination; death or principal: double sales ..............................................344 termination; effect of death of agent ...........................................................344 Partnership ..................................................................................................346 conveyance of a partner’s share dissolution ...............................................346 dissolution...................................................................................................346 effect of death of partner.............................................................................347 obligations of a partner ...............................................................................347 partner by estoppel .....................................................................................348 partner vs lender (debtor) ...........................................................................348 revocation of manager’s power; liability of an industrial partner..................349 who can form partnerships; spouses; corporations.....................................350 Commodatum & Mutuum .......................................................................352 Commodatum .............................................................................................352 Commodatum vs usufruct......................................................................352 Commodatum; liabilties of a bailee.......................................................353 Mutuum vs commodatum ....................................................................................353 interests.................................................................................................353 Deposit ..........................................................................................................356 Surety ............................................................................................................358 recovery of deficiency .................................................................................358 Antichresis vs pledge and mortgage .............................................................................359 Mortgage Page 9 of 391 Chattel mortgage ........................................................................................360 chattel mortgage vs pledge.........................................................................360 effect of loss of thing mortgaged upon principal oblig .................................361 pactum commissorium................................................................................361 real & chattel; future loans ..........................................................................362 real estate mortgage vs sale with repurchase.............................................362 right of redemption vs equity of redemption ................................................363 Pledge ...........................................................................................................363 effect of loss of thing pledged upon principal obligation: immediate demandability of principal oblig...................................................................364 vs mortgage; antichresis .............................................................................365 use of the thing pledged .............................................................................365 Quasi-contracts .........................................................................................367 Negotiorium gestio......................................................................................367 1474; reasonable value ..............................................................................370 solutio indebiti .............................................................................................370 Torts and damages ...................................................................................372 abuse of right ..............................................................................................373 acts contrary to morals ...............................................................................374 actual and moral damages .........................................................................374 breach of contract .......................................................................................375 collapse of structures..................................................................................375 common carriers .........................................................................................376 damages .....................................................................................................376 damages arising from death of unborn child ...............................................377 damages; moral damages & atty fees ........................................................378 death indemnity ..........................................................................................378 defense; due diligence in selection .............................................................379 filing of separate civil action; need for reservation ......................................379 human relations ..........................................................................................380 insurance; subrogation ...............................................................................382 loss of an unborn child ................................................................................382 product liability ............................................................................................383 quasi- delict.................................................................................................383 vicarious liability..........................................................................................384 defenses; fortuitous event...........................................................................385 liability of employer for damage caused by employees; defense of due diligence ....................................................................................................................385 motor vehicle mishaps; solidary liability of owner who was in the vehicle...386 primary liability vs subsidiary liability of employers .....................................387 vicarious liability..........................................................................................388 Aleatory contracts; gambling ...............................................................390 Compromises and arbitration ...............................................................390 Page 10 of 391 00; Civil law vs common law; trend and governance 1997 No. 1: How would you compare the Civil Law system in its governance and trend with that of the Common Law system? Answer: As regards "governance": Governance in Civil Law is codal, statutory and written law. It is additionally derived from case law. Common law is basically derived from case law. As regards "trend": Civil law is now tending to rely more and more on decisions of the courts explaining the laws. Common law is now codifying laws more and more. So they are now merging towards similar systems. Additional Answers: 1. Common law refers to the traditional part of the law as distinct from legislation; it refers to the universal part of law as distinct from particular local customs (Encyclopedia Americana, Vol. 7). On the other hand, civil law is understood lo be that branch of law governing the relationship of persons in respect of their personal and private interests as distinguished from both public and international laws. In common law countries, the traditional responsibility has for the most part been with the judges; in civil law countries, the task is primarily reposed on the lawmakers. Contemporary practices, however, so indicate a trend towards centralizing that function to professional groups that may indeed, see the gradual assimilation in time of both systems. [Vitug, Civil. Law and Jurisprudence, p. XX) 2. In Civil Law. the statutes theoretically take precedence over court decisions interpreting them; while in Common Law, the court decisions resolving specific cases are regarded as law rather than the statutes themselves which are, at the start, merely embodiments of case law. Civil Law is code law or written law, while Common Law is case law. Civil Law adopts the deductive method from the general to the particular, while the Common Law uses the inductive approach - from the particular to the general. Common Law relies on equity. Civil Law anchors itself on the letter of the law. The civilists are for the judge-proof law even as the Common Law Is judge-made law. Civil Law judges are merely supposed to apply laws and not interpret them. 00; Civil law; definition; sources 1977 No. I-a What is civil law? What are the sources of the New Civil Code of the Philippines? Answer Civil Law is defined as the mass of precepts which determines and regulates those relations of assistance, authority and obedience existing among members of a family as well as among members of a society for the protection of private interests. The sources of the Civil Code of the Philippines are: (1) Civil Code of Spain of 1889; (2) Codes and laws of other countries, such as Spain, the various states of the United States, especially California and Louisiana, France, Argentina, Germany, Mexico, Switzerland, England and Italy; (3) Judicial decisions of the Supreme Courts of the Philippines, of various states of the United States, of Spain, and of other countries; (4) Philippine laws or statutes, such as the Code of Civil Procedure (Act No. 190), the Rules of Court, the Marriage Law (Act No. 3613), and the Divorce Law (Act No. 2710); (5) Works of jurists of various nations; (6) Filipino customs and traditions; and (7) The Code Commission itself. 00; Persons Page 11 of 391 1988 No 1; (c) As a rule, once the criminal action has been commenced, the civil action for damages arising from the offense charged shall be suspended until the final termination of the criminal action. What are the exceptions to said rule as provided by the Civil Code? Answer: (c) The exceptions are as follows: (1) Where the civil action is based on an obligation not arising from the act or omission complained of as a felony, such as when the basis of the civil action is culpa contractual, culpa aquiliana, etc. (Arts. 31, 2177, CC). (2) Where the law grants to the injured party the right to institute a civil action which is entirely separate and independent from the criminal action, such as when the action is based on (a) interferences by public officers or employees or by private individuals with civil rights and liberties; (b) defamation; (c) fraud; (d) physical injuries; or (e) refusal or neglect of a city or municipal police officer to "render aid or protection in case of danger to life or property (Arts. 32,33, 34, CC). (3) Where the question to be resolved in the civil action is prejudicial to the criminal action (Art. 36, CC). Alternative Answers to: No. 1 (a) and (b) (a) A prejudicial question is a question which arises in a civil suit, the resolution of which is determinative of the guilt or innocence of the accused. Its essential elements, as prescribed by Section 5 of Rule 111 are: (a) the civil action involves an issue raised in the criminal action; and (b) the resolution of such issue determines whether or not the criminal action may proceed. Its effect upon a criminal case is to suspend the criminal case if one has already been commenced. (b) Considering that the acquittal is not based on reasonable doubt but on a positive finding of innocence (he was not negligent) the civil action can no longer prosper. The civil liability arising from the act complained of as a felony is barred by the finding of innocence. However, the civil action for damages based on an obligation ex-contractu is not deemed barred because of article 31 of the Civil Code. 00; Persons; civil register 1975 No. VIII An illegitimate child of a Chinese father and a Filipino mother was registered in the Civil Registry as a Chinese. She filed a petition for the correction of the entry to make her citizenship read 'Filipino" in view of the absence of marriage between her parents. Will the petition prosper? Why? Answer Not the petition will not prosper. While ostensibly, the action seeks a mere correction of an entry in the Civil Registry, it in effect requests the judicial declaration of Philippine citizenship. The correction is not merely of a clerical error and therefore cannot be made through a petition for the correction of an entry in the civil register. In a line of decisions the Supreme Court has consistently refused to entertain petitions of this nature. (China v. Republic, 27 SCRA 447) 00; Persons; civil register; correction of entries Page 12 of 391 1987 No. 3: Celso Lim would like to correct an allegedly wrong entry in the birth certificate of one of his sons, Celso Jr., describing the latter as a Chinese national and not as a Filipino. Among the evidence Celso Lim had are his own birth certificate describing him as a Filipino, the birth certificate of his other children, all describing them as Filipinos and a court decision describing his father (Celso, Jr.'s grandfather) as a Filipino. (a) What action must Celso Lim take to ensure the effective correction of the allegedly wrong entry in his son's birth certificate? (b) Who should be made parties to such action or proceeding? Answer: a, Celso must file a petition in an adversary proceeding to correct the erroneous entry. In the case of Republic v. Valencia, (L-32181, March 5, 1986), it was ruled that not only clerical errors can be the subject-matter of the petition, but even the controversial entries can be corrected. b. Under Rule 108 of the Rules of Court, he should notify the Civil Registrar and all the persons affected or who have an interest in the subject matter of the petition, including the Solicitor General. 00; Persons; civil registry 1981 No. 18 (c) True or false? -- The records of a person's birth, as kept by the Civil Registrar, is a public record and may be inquired into by a person interested. Answer (c) False. According to the Child and Youth Welfare Code, the records of a person's birth shall be kept strictly confidential and no information relating thereto shall be issued except in certain cases enumerated in the law. (See Art. 7). 00; Persons; conclusive presumption of knowledge of the law 1985 No. 1 A) Although far from reality, everyone is conclusively presumed to know the law pursuant to Article 3 of the New Civil Code which states that "ignorance of the law excuses no one from compliance therewith." Discuss the underlying philosophy behind said pro vision. Answers: A) 1. The philosophy of the law is founded upon public policy. The rule excludes ignorance as an excuse for not complying with the law. Acts contrary to law should not have the same effects as when done conformably with the law merely because of ignorance, 2. The philosophy of the law is founded upon public policy. The rule excludes ignorance as an excuse for not complying with the law. Acts contrary to law should not have the same effects as when done conformably with the law merely because of ignorance. It is based on necessity and expediency. 3. Ignorance of the law does not excuse compliance with the law of the land (Art. 3, Civil Code) whether civil or penal and whether substantive or remedial. This principle is founded not only on expediency and public policy but on necessity; otherwise, an easy shelter from a disregard of the law may easily and conveniently be available. Page 13 of 391 4. Ignorance of the law does not excuse compliance with the law of the land (Art. 8, Civil Code) whether civil or penal and whether substantial or remedial (People vs. Malvar, 21 SCRA 1119). This principle is founded not only on expediency and public policy but on necessity (see Zulueta vs. Zulueta, 1 Phil 256); otherwise an easy shelter from a disregard of the law may easily and conveniently be available. 00; Persons; decisions of inferior courts 1994 No. 4: 1) Are decisions of the Court of Appeals considered laws? Alternative Answers: 1) a) No, but decisions of the Court of Appeals may serve as precedents for inferior courts on points of law not covered by any Supreme Court decision, and a ruling of the Court of Appeals may become a doctrine. (Miranda u. Imperial 77 Phil. 1066). b) No. Decisions of the Court of Appeals merely have persuasive, and therefore no mandatory effect. However, a conclusion or pronouncement which covers a point of law still undecided may still serve as judicial guide and it is possible that the same maybe raised to the status of doctrine. If after it has been subjected to test in the crucible of analysis, the Supreme Court should find that it has merits and qualities sufficient for its consideration as a rule of jurisprudence (Civil Code, Paras). 00; Persons; duty of judges to render judgment 1977 No. XX-b According to the Civil Code, no judge or court shall decline to render judgment by reason of the silence, obscurity or insufficiency of the laws. How should the judge or court then decide the controversy before him? Answer The judge shall apply the custom of the place. This can easily be inferred from the Civil Code (Arts. 9, et seq., Civil Code). In default thereof, he shall apply the general principles of law and justice. 00; Persons; effect of obiter and dissenting opinion; decisions of the SC 1994 No. 4: 2) What are the binding effects of an obiter dictum and a dissenting opinion? 3) How can a decision of the Supreme Court be set aside? Alternative Answers: 2) None. Obiter dictum and opinions are not necessary to the determination of a case. They are not binding and cannot have the force of official precedents. It is as if the Court were turning aside from the main topic of the case to collateral subjects: a dissenting opinion affirms or overrules a claim, right or obligation. It neither disposes nor awards anything it merely expresses the view of the dissenter. (Civil Code, Paras] 3) A decision of a division of the Supreme Court maybe set aside by the Supreme Court sitting en banc, a Supreme Court decision may be set aside by a contrary ruling of the Supreme Court itself or by a corrective legislative act of Congress, although said laws cannot adversely affect those favored prior to the Supreme Court decision. [Civil Code, Paras). 00; Persons; effectivity of laws Page 14 of 391 1990 No 14: After a devastating storm causing widespread destruction in four Central Luzon provinces, the executive and legislative branches of the government agreed to enact a special law appropriating P1 billion for purposes of relief and rehabilitation for the provinces. In view of the urgent nature of the legislative enactment, ft is provided in its effectivity clause that it shall take effect upon approval and after completion of publication in the Official Gazette and a newspaper of general circulation in the Philippines. The law was passed by the Congress on July 1, 1990. signed into law by the President on July 3, 1990, and published in such newspaper of general circulation on July 7, 1990 and in the Official Gazette on July 10, 1990. (a) As to the publication of said legislative enactment, is there sufficient observance or compliance with the requirements for a valid publication? Explain your answer. (b) When did the law take effect? Explain your answer. (c) Can the executive branch start releasing and disbursing funds appropriated by the said law the day following its approval? Explain your answer. Answer: (a) Yes, there is sufficient compliance. The law itself prescribes the requisites of publication for its effectivity, and all requisites have been complied with. (Article 2, Civil Code) (b) The law takes effect upon compliance with all the conditions for effectivity, and the last condition was complied with on July 10, 1990. Hence, the" law became effective on that date. (c) No. It was not yet effective when it was approved by Congress on July 1, 1990 and approved by the President on July 3, 1990. The other requisites for its effectivity were not yet complete at the time. 00; Persons; emancipation 1986 No. 2: Mr, Mamirapal, 19 years old and married, seeks to do the following: 1. Lend his money at interest 2. Donate a piece of his land to his infant son. 3. Sell his car. 4. Sue his neighbor for damages. The land, money, and car are Mamirapal's separate property derived from his own income. He is not sure whether he can legally do all these things without his father's consent and assistance. He comes to you for advice. What advice will you give him? Answer: I will advice Mamirapal: (1) to lend his money at interest without securing his father's consent or assistance; (2) to donate a piece of his land to his infant son. but with father's consent; (3) to sell his car without father's consent or assistance; and (4) to sue his neighbor for damages, but with his father's assistance. Although Mamirapal is already emancipated, his emancipation is not perfect or plenary in character. Under the law, he cannot borrow money or alienate or encumber real property without the consent of his father. Neither can he sue or be sued without the assistance of his father. It is obvious that only Nos. (2) and (4) fall within the purview of these exceptions. Page 15 of 391 (Note - The above answer is based upon Art. 399 of the Civil Code). Answer The C.C. provides that an emancipated minor cannot borrow money, alienate or encumber real property without the consent of his parent or guardian. Neither can he sue or be sued without the assistance of his parent or guardian. Therefore, the answer to questions: 1) Yes, he can legally do it alone; 2) No, because donation is a form of alienation; 3) Yes, as property is movable; 4) He needs the assistance of his father. 00; Persons; equity 2003 No I It is said that “equity follows the law” What do you understand by this phrase, and what are its basic implications? Suggested Answer: “Equity Follows the law” means that courts exercising equity jurisdiction are bound by rules of law and have no arbitrary discretion to disregard them. (Arsenal v IAC, 143 SCRA 40 [1986]). Equity is applied only in the absence of but never against statutory law. (Toyota Motor Phil. V CA 216 SCRA 236 [1992]). 5% 00; Persons; human relations 1978 No. I-a B, a married man, by force and intimidation, succeeded in having sexual intercourse with A, single, without her consent. As a result, A became pregnant. A sued B for damages, Is B liable for damages? Why? Answer B is liable for damages. From the factual setting stated in the problem, it is clear that B's act is contrary to law and that he has willfully caused damage to A. As a matter of fact, he has committed the crime of rape. According to the Civil Code, every person who, contrary to law, willfully or negligently causes damage to another, shall indemnify the latter for the same. Consequently, B is liable for compensatory damages, moral damages, exemplary damages and attorney's fees. (NOTE: The above answer is based on Art. 20 of the Civil Code and on the corresponding provisions of the Code on damages, such as Arts. 2202 and 2204 with respect to compensatory damages, Arts. 2219 with respect to moral damages, Arts. 2230 and 2234 with respect to exemplary damages, and Art. 2208 with respect to attorney's fees.) Alternative Answer B is liable for damages. It must be observed that his act which has caused damage to A may be considered as a crime or as a quasi-delict. It is now wellsettled doctrine in this jurisdiction that his act gives rise to two separate and independent liabilities—first, the civil liability arising from crime (culpa criminal) and second, the civil liability arising from quasi-delict (culpa aquilana). These two liabilities may be enforced by A against B simultaneously or successively. What is barred by the law is double recovery. Whether based on the crime or on the quasidelict, B is liable for compensatory damages, moral damages, exemplary damages and attorney's fees. Page 16 of 391 (NOTE: The above answer is based on Elcano v. Hill, 77 SCRA 98. It has also been suggested that an answer based on Article 21 of the Civil Code should also be accepted as a correct answer.) 00; Persons; ignorance of the law vs mistake of fact 1996 No. 1: 1) Is there any difference in their legal effect between ignorance of the law and ignorance or mistake of fact? Answer; Yes, there is a difference. While ignorance of the law is not an excuse for not complying with it, ignorance of fact eliminates criminal intent as long as there is no negligence (Art, NCC). In addition, mistake on a doubtful or difficult question of law may be the basis of good faith (Art. 526. NCC). Mistake of fact may, furthermore, vitiate consent in a contract and make it voidable (Art. 1390. NCC). Alternative Answer: Yes. ignorance of the law differs in legal effect from Ignorance or mistake of fact. The former does not excuse a party from the legal consequences of his conduct while the latter does constitute an excuse and is a legal defense. 00; Persons; independent civil action 1983 No. 1 After an altercation with B, A hit B's car with a piece of wood, breaking the windshield. When C came along and tried to pacify A, the latter stabbed the former, causing injuries which would have been fatal were it not for timely medical attention. A was charged with frustrated homicide and malicious mischief. Two separate civil actions for damages were also filed against him, one by B and the other by C. A moved for the suspension of the civil actions until after the termination of the criminal cases. Resolve with reasons. Answer It should be denied in so far as the civil action for damages arising from B's injuries is concerned. In cases of physical injuries, which have been held to include homicide, whether consummated or frustrated, a civil action for damages, entirely separate and distinct from the criminal action may be brought by the injured party and shall proceed independently of the criminal proceeding. It should, however, be sustained as to the civil action to recover indemnity for the damage to the taxi, it not being one of the cases specified in the Code in which an independent civil action may be maintained. For this reason, it must be held in abeyance until the termination of the criminal action. 00; Persons; independent civil actions 1976 No. I-a During a brawl in a basketball game, A Attacks B with a bottle and causes physical injuries. If B files a civil case against A for damages and during its pendency a criminal case is filed against A, should the civil case be suspended meanwhile? Explain. (Abellana vs. Marave, 57 SCRA 106) Answer Page 17 of 391 No, because the civil action for damages arising from physical injuries is an independent civil action and is entirely separate and distinct from the criminal action. (Article 33) 00; Persons; independent civil actions 1976 No. I-b If a criminal case is filed first, may the civil case be filed during the pendency of the criminal case or later, even without a reservation? Explain. Answer Yes. The civil case may be filed during the pendency of the criminal case even without a reservation, it being an independent, civil action. It is a substantive right and cannot be affected or modified by the Rules of Court. (Abellana v. Marave, 57 SCRA 106) 2. If the criminal case is no longer pending, there are two possibilities. There is either an acquittal or conviction. If there is an acquittal based on a positive finding of innocence with a pronouncement that the facts from which the civil case might arise do not exist, then the civil action cannot be filed; but if it is an acquittal based on reasonable doubt, then the civil action may still prosper. If the criminal cage resulted in conviction, whether damages were awarded or not, the civil case may no longer prosper, if any of the following circumstances took place: (a) If a private prosecutor appeared in the criminal case, which is an indication that the civil action was instituted together with the criminal case; or (b) If the injured party in the civil case actively participated intervened in the criminal case. (Manio vs. Gaddi, 44 SCRA 198 (1972) and/or 00; Persons; independent civil actions 1976 No. I-c Does Article 33 of the Civil Code on separate civil action for damages arising from injuries require that there be a reservation in the criminal case to file a separate civil action? Explain Answer Best Answer: No, because Article 33 provides that it is separate and distinct from the criminal action and may proceed independently of the criminal action. It is a substantive right and cannot be rendered nugatory by the Rules of Court. The power of the Supreme Court to promulgate rules is limited to pleadings, practice and procedure. (Abellana vs-Marave, supra) Alternative Answer 1. Yes, because Section 2, Rule 111 in relation to Article 33 requires a reservation in order to take out the civil case from the jurisdiction of the criminal court. The civil liability resulting from damages and the law accord the injured party an option to reserve or not to reserve. (Padua v. Robles) 2. Yes, because the general rule is that when a criminal action is filed, the civil action is impliedly instituted in the same criminal case, 00; Persons; juridical capacity vs capacity to act 1996 No. 1: Page 18 of 391 2) Distinguish juridical capacity from capacity to act, Answer: Juridical capacity is the fitness to be the subject of legal relations while capacity to act Is the power or to do acts with legal effect. The former is inherent in every natural person and is lost only through death while the latter is merely acquired and may be lost even before death (Art. 37, NCC). Alternative Answer; Juridical capacity, as distinguished from capacity to act: (a) the former is passive while the latter is active, (b) the former is inherent in a person while the latter is merely acquired, (c) the former is lost only through death while the latter may be lost through death or restricted by causes other than death, and Id) the former can exist without capacity to act while the latter cannot exist without juridical capacity. 00; Persons; natural persons 1999 No I. Elated that her sister who had been married for five years was pregnant for the first time, Alma donated P100,000.00 to the unborn child. Unfortunately, the baby died one hour after delivery. May Alma recover the P100.000.00 that she had donated to said baby before it was born considering that the baby died? Stated otherwise, is the donation valid and binding? Explain. (5%) ANSWER: The donation is valid and binding, being an act favorable to the unborn child, but only if the baby had an intra-uterine life of not less than seven months and provided there was due acceptance of the donation by the proper person representing said child. If the child had less than seven months of intra-uterine life, it is not deemed born since it died less than 24 hours following its delivery, in which ease the donation never became effective since the donee never became a person, birth being determinative of personality. ALTERNATIVE ANSWER: Even if the baby had an intra-uterine life of more than seven months and the donation was properly accepted, it would be void for not having conformed with the proper form. In order to be valid, the donation and acceptance of personal property exceeding five thousand pesos should be in writing. (Article 748, par. 3) 00; Persons; prejudicial question 1988 No 1; (a) What is' a prejudicial question? What are its elements? What is its effect upon a criminal action? Answer: (a) A prejudicial question is a question which arises in a case, the resolution of which is a logical antecedent of the issue involved in said case, and the cognizance of which pertains to another tribunal (People vs. Aragon 94 Phil. 357; Jimenez vs. Aceria 22 SCRA 1380). It has two elements. They are: First, that it must be determinative of the guilt or innocence of the accused in the criminal case; and second, jurisdiction to try said question must be lodged in another tribunal (Ibid.) Its effect upon a criminal case is to suspend it if one has already been commenced (Article 36, CC). This is of course, the reverse of the ordinary rule of procedure. The reason for this is that the resolution of the question is determinative of the guilt or innocence of the accused in the criminal case. Page 19 of 391 00; Persons; prejudicial questions 1997 No. 3: In the context that the term is used in Civil Law, state the (a) concept, (b) requisites and (c) consequences of a prejudicial question, Answer: (a) Concept A prejudicial question is one which must be decided first before a criminal action may be instituted or may proceed because a decision therein is vital to the judgment in the criminal case. In the case of People vs. Adelo Aragon (L-5930, Feb. 17, 1954), the Supreme Court defined it as one which arises in a case, the resolution of which question is a logical antecedent of the issues involved in said case and the cognizance of which pertains to another tribunal (Paras, Vol. 1, Civil. Code Annotation, 1989 ed. p, 194). (b) Requisites 1, The prejudicial question must be determinative of the case before the court. 2. Jurisdiction to try said question must be lodged in another tribunal. Additional Answer: 1. The civil action involves an issue similar or intimately related to the issue raised in the criminal action, and 2. the resolution of such issue determines whether or not the criminal action may proceed. (c) Consequences The criminal case must be suspended. Thus, in a criminal case for damages to one's property, a civil action that involves -the ownership of said property should first be resolved (De Leon vs. Mabanag. 38 Phil. 202) 00; Persons; presumption of simultaneous death 1998 No III. Jaime, who is 65, and his son, Willy, who is 25, died in a plane crash. There is no proof as to who died first. Jaime's only surviving heir is his wife, Julia, who is also Willy's mother. Willy's surviving heirs are his mother, Julia and his wife, Wilma. 1. In the settlement of Jaime's estate, can Wilma successfully claim that her late husband, Willy had a hereditary share since he was much younger than his father and, therefore, should be presumed to have survived longer? [3%] 2. Suppose Jaime had a life insurance policy with his wife, Julia, and his son, Willy, as the beneficiaries. Can Wilma successfully claim that one-half of the proceeds should belong to Willy's estate? |2%J Answer: 1. No, Wilma cannot successfully claim that Willy had a hereditary share in his father's estate. Under Art. 43, Civil Code, two persons "who are called to succeed each other" are presumed to have died at the same time, in the absence of proof as to which of them died first. This presumption of simultaneous death applies in cases involving the question of succession as between the two who died, who in this case are mutual heirs, being father and son. Answer: Page 20 of 391 2. Yet, Wilma can invoke the presumption of survivorship and claim that onehalf of the proceeds should belong to Willy's estate, under Sec. 3 (jj) par. 5 Rule 131, Rules of Court, as the dispute does not involve succession. Under this presumption, the person between the ages of 15 and 60 years is deemed to have survived one whose age was over 60 at the time of their deaths. The estate of Willy endowed with juridical personality stands in place and stead of Willy, as beneficiary. 00; Persons; presumption of simultaneous death 1999 No II. Mr. and Mrs. Cruz, who are childless, met with a serious motor vehicle accident with Mr. Cruz at the wheel and Mrs. Cruz seated beside him, resulting in the instant death of Mr. Cruz. Mrs. Cruz was still alive when help came but she also died on the way to the hospital. The couple acquired properties worth One Million (PI ,000,000.00) Pesos during their marriage, which are being claimed by the parents of both spouses in equal shares. Is the claim of both sets of parents valid and why? (3%) (b) Suppose in the preceding question, both Mr. and Mrs. Cruz were already dead when help came, so that no-body could say who died ahead of the other, would you answer be the same to the question as to who are entitled to the properties of the deceased couple? (2%) ANSWER: (a) No, the claim of both parents is not valid. When Mr. Cruz died, he was succeeded by his wife and his parents as his intestate heirs who will share his estate equally. His estate was 0.5 Million pesos which is his half share in the absolute community amounting to 1 Million Pesos. His wife, will, therefore, inherit O.25 Million Pesos and his parents will inherit 0.25 Million Pesos. When Mrs. Cruz died, she was succeeded by her parents as her intestate heirs. They will inherit all of her estate consisting of her 0.5 Million half share in the ab-solute community and her 0.25 Million inheritance from her husband, or a total of 0.750 Million Pesos. In sum, the parents of Mr. Cruz will inherit 250,000 Pesos while the parents of Mrs. Cruz will inherit 750,000 Pesos. (b) This being a case of succession, in the absence of proof as to the time of death of each of the spouses, it is presumed they died at the same time and no transmission of rights from one to the other is deemed to have taken place. Therefore, each of them is deemed to have an estate valued at P500,000,00, or one-half of their conjugal property of PI million. Their respective parents will thus inherit the entire PI Million in equal shares, OT P5OO,000.00 per set of parents. 00; Persons; presumption of simultaneous death 2000 No III. b) Cristy and her late husband Luis had two children, Rose and Patrick, One summer, her mother-in-law, aged 70, took the two children, then aged 10 and 12, with her on a boat trip to Cebu. Unfortunately, the vessel sank en route, and the bodies of the three were never found. None of the survivors ever saw them on the water. On the settlement of her mother-in-law's estate, Cristy files a claim for a share of her estate on the ground that the same was inherited by her children from their grandmother in representation of their father, and she Inherited the same from them. Will her action prosper? (2%) SUGGESTED ANSWER: Page 21 of 391 No, her action will not prosper. Since there was no proof as to who died first, all the three are deemed to have died at the same time and there was no transmission of rights from one to another, applying Article 43 of the New Civil Code. ALTERNATIVE ANSWER: No, her action will not prosper. Under Article 43 of the New Civil Code, inasmuch as there is no proof as to who died first, all the three are presumed to have died at the same time and there could be no transmission of rights among them. Her children not having inherited from their grandmother. Cristy has no right to share in her mother-in-law's estate. She cannot share in her own right as she is not a legal heir of her mother-in-law. The survivorship provision of Rule 131 of the Rules of Court does not apply to the problem. It applies only to those cases where the issue involved is not succession. 00; Persons; prospectivity of laws; exceptions 1977 No, I-b Give five (5) exceptions to the rule that laws shall have no retroactive effects. Answer The following are the exceptions to the rule that laws shall have no retroactive effect: (1) When the law itself expressly provides for its retroactivity (Art. 4, CC). (2) When the law is penal insofar as it favors the accused who is not a habitual criminal, even though at the time of the enactment of such law final sentence has already been rendered (Art. 22, Rev. Penal Code). (3) When the law is procedural so long as it does not affect or change vested rights (Aguillon vs. Dir. of Lands, 17 Phil. 560). (4) When the law creates new substantive rights (Arts. CC; Bona vs. Briones, 38 Phil. 276). 2253, 2263, (5) When the law Is curative in character in the sense that the purpose for its enactment is to cure defects or imperfections in judicial or administrative proceedings. 00; Persons; restrictions on capacity to act 1985 No. 1 B) Among the restrictions on capacity to act are minority, insanity, deafmutism, prodigality and civil interdiction, all of which do not exempt the incapacitated person from "certain obligations." Explain and discuss the said rule and illustrate its application by specific examples. Answers: B) 1. Such incapacitated person is not exempt from all obligations except those arising from contracts. In other words, he is liable if the obligation arises from law, from delicts, from quasi-delicts. 2. The general rule may be illustrated as follows: An incapacitated person is not exempt from civil liability except those arising from contracts; so he can be liable for a crime committed by him. He may not be criminally liable but he is a civilly liable. One may be insane but does not exempt him from his legal obligation to support his family, Page 22 of 391 3. A minor under 15 may commit a crime. He might have committed it without discernment and therefore would be free or exempt from the civil liability. With regard to property relations, a 5-year-old child may inherit property and the fact that the new owner of the property is incapacitated does not exempt the property and himself from the burden of easement. 4. The rule is based upon lack of voluntariness of the act due to physical or mental defects, and upon the necessity of protection by the State because of disabilities. Despite incapacity, a minor may be liable for crime. An insane person must recognize legal easements on his property. A person civilly interdicted may be liable for quasi-delict. 5. Minority, Insanity, deaf-mutism, prodigality and civil interdiction are mere restrictions on capacity to act and do not necessarily exempt the incapacitated person from certain obligations. Among such obligations are those arising from his acts or from property relations. Accordingly, a minor may be estopped by his misrepresentations; and an infant may be held civilly liable for his tortious conduct, a rule that is more preferable than to let the guiltless victim suffer the loss. 6. Minority, insanity, deaf-mutism, prodigality and civil interdictions are mere restrictions on capacity to act and do not necessarily exempt the incapacitated person from certain obligations. Among such obligations an those arising from his acts or from property relations (Arts. 38-39, Civil Code). Accordingly, a minor may be estopped by his misrepresentation (Mercado vs. Espiritu, 37 Phil. 215); and an infant may be held liable for his tortious conduct, a rule that is preferable than to let the guiltless victim suffer the lost (See Magtibay vs. Tiangco, 74 Phil. 676), 00; Persons; use of surnames 1975 No. VII A mother who had a natural child subsequently married a man other than the child's father. The child filed a petition to change his surname from the father's name to that of the step-father who has no objection thereto. May the petition be granted? Why? Answer Yes, the petition may be granted. While it is true that a natural child shall employ the surname of the recognizing parent or that of the father if acknowledged by both parents, this does not mean that such child is prohibited by law from taking another surname for justifiable reasons. The purpose of the law in allowing a change of name is to give a person an opportunity to improve his personality and promote his best interests. To allow the child here to change his name would eliminate the stigma of illegitimacy which he would continue to bear if his surname were to be that of his illegitimate father. Furthermore, the stepfather is agreeable to the child's using his surname. The court, therefore, in the sound exercise of its discretion may grant the petition. (Calderon v. Republic, 19 SCRA 721) 00; Persons; waiver 1978 No. V-b A was a consistent scholar and honor student for three (3) years in Manuel L. Quezon (MLQ) University and he enjoyed free tuition privileges. In his fourth year, he decided to study in a University in Davao as his father died and he had to stay with his mother. He needed the transcripts of his records in MLQ University, but MLQ refused to issue them until he had refunded the whole amount of tuition fees given to him for three (3) years of his stay, alleging that he had signed an agreement Page 23 of 391 beforehand and waiving his right to transfer to another university without having refunded the cash equivalent of his scholarship. A was forced to refund the amount as he did not want to be late for his enrollment in the Davao University. Later, he sued for its return. Can A recover the amount he refunded to MLQ University? Reasons for your answer. Answer Yes, A can recover the amount he refunded to MLQ University. The waiver signed by A is contrary to public policy, and therefore, null and void. Scholarship grants are awarded in recognition of merit and not to attract and keep brilliant students in school for their propaganda value. To look at such grants as a business scheme designed to increase the business potential of an educational institution is not only inconsistent with sound public policy bat also good morals. (NOTE: The above answer is based on Cui vs. Arellano University, L-15127, May 30, 1961 applying Art. 1306 of the New Civil Code.) 00; Persons; waiver of rights 2004 No. IX B. DON, an American businessman, secured parental consent for the employment of five minors to play certain roles in two movies he was producing at home in Makati. They worked at odd hours of the day and night, but always accompanied by parents or other adults. The producer paid the children talent fees at rates better than adult wages. But a social worker, DEB, reported to OSWD that these children often missed going to school. They sometimes drank wine, aside from being exposed to drugs. In some scenes, they were filmed naked or in revealing costumes. In his defense, DON contended all these were part of artistic freedom and cultural creativity. None of the parents complained, said DON. He also said they signed a contract containing a waiver of their right to file any complaint in any office or tribunal concerning the working conditions of their children acting in the movies. Is the waiver valid and binding? Why or why not? Explain. (5%) 00; Persons; waiver of rights 1977 No. XX-a Rights may be waived In what cases may waiver be prohibited and declared null and void? Answer Waiver is prohibited when it is contrary to law, public order, public policy, morals or good customs, or prejudicial to a third person with a right recognized by law, (Art. 6, Civil Code). Page 24 of 391 01; Conflict of laws 1981 No. 18 (b) True or false? -- A woman loses her citizenship when she marries a foreigner and under the national law of the husband she automatically acquires his citizenship by marriage. Answer (b) False. Under the 1973 Constitution, a female citizen of the Philippines who marries an alien shall retain her citizenship. Consequently, she does not necessarily acquire her husband's nationality. 01; Conflict of laws; Art. 15 1998 No II. Francis Albert, a citizen and resident of New Jersey, U.S.A., under whose law he was still a minor, being only 20 years of age, was hired by ABC Corporation of Manila to serve for two years as its chief computer programmer. But after serving for only four months, he resigned to join XYZ Corporation, which enticed him by offering more advantageous terms. His first employer sues him in Manila for damages arising from the breach of his contract of employment. He sets up his minority as a defense and asks for annulment of the contract on that ground. The plaintiff disputes this by alleging that since the contract was executed in the Philippines under whose law the age of majority is 18 years, he was no longer a minor at the time of perfection of the contract. 1, Will the suit prosper? [3%] 2. Suppose XYZ Corporation is impleaded as a co-defendant, what would be the basis of its liability, if any? [2%] Answer: 1. The suit will not prosper under Article 15, Civil Code, New Jersey law governs Francis Albert's capacity to act, being his personal law from the standpoint of both his nationality and his domicile. He was, therefore, a minor at the time he entered into the contract. Alternative Answer: 1. The suit will not prosper. Being a U.S. national, Albert's capacity to enter into a contract is determined by the law of the State of which he is a national, under which he to still a minor. This is in connection with Article 15 of the Civil Code which embodies the said nationality principle of lex patriae. While this principle intended to apply to Filipino citizens under that provision, the Supreme Court in Recto v. Harden is of the view that the status or capacity of foreigners is to be determined on the basis of the same provision or principle, i.e., by U.S. law in the present problem. Plaintiffs argument does not hold true, because status or capacity is not determined by lex loci contractus but by lex patriae. Another Answer: 1. Article 17 of the Civil Code provides that the forms and solemnities of contracts, wills and other public instruments shall be governed by the laws of the country in which they are executed. Since the contract of employment was executed in Manila, Philippine law should govern. Being over 18 years old and no longer a minor according to Philippine Law, Francis Albert can be sued. Thus, the suit of ABC Corporation against him for damages will prosper* Page 25 of 391 Answer: 2. XYZ Corporation, having enticed Francis Albert to break his contract with the plaintiff, may be held liable for damages under Art. 1314, Civil Code. Alternative Answer: 2. The basis of liability of XYZ Corporation would be Article 28 of the Civil Code which states that: "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." Another Answer: 2. No liability arises. The statement of the problem does not in any way suggest intent, malice, or even knowledge, on the part of XYZ Corporation as to the contractual relations between Albert and ABC Corporation. 01; Conflict of laws; Art. 15; legal capacity 1995 No, 2: 3. What law governs the capacity of the Filipino to buy the land? Explain your answer and give its legal basis. Answer: Philippine law governs the capacity of the Filipino to buy the land. In addition to the principle of lex rei sitae given above. Article 15 of the NCC specifically provides that Philippine laws relating to legal capacity of persons are binding upon citizens of the Philippines no matter where they are. 01; Conflict of laws; Art. 15; legal capacity; capacity to contract 1995 No, 2: 2. What law governs the capacity of the Japanese to sell the land? Explain your answer and give its legal basis. Answer: Japanese law governs the capacity of the Japanese to sell the land being his personal law on the basis of an interpretation of Art. 15, NCC. Alternative Answers; a) Since capacity to contract is governed by the personal law of an individual, the. Japanese seller's capacity should be governed either by his national law (Japanese law) or by the law of his domicile, depending upon whether Japan follows the nationality or domiciliary theory of personal law for its citizens. b) Philippine law governs the capacity of the Japanese owner in selling the land. While as a general rule capacity of persons is governed by the law of his nationality, capacity concerning transactions involving property is an exception. Under Article 16 of the NCC. the capacity of persons in transactions involving title to property is governed by the law of the country where the property is situated. Since the property Is in the Philippines, Philippine law governs the capacity of the seller. 01; Conflict of laws; Art. 16 2001 No I Page 26 of 391 Alex was born a Filipino but was a naturalized Canadian citizen at the time of his death on December 25,1998. He left behind a last will and testament in which he bequeathed all his properties, real and personal, In the Philippines to his acknowledged illegitimate Fillpina daughter and nothing to his two legitimate Filipino sons. The sons sought the annulment of the last will and testament on the ground that it deprived them of their legitimes but the daughter was able to prove that there were no compulsory heirs or legitimes under Canadian law. Who should prevail? Why? (5%) SUGGESTED ANSWER The daughter should prevail because Article 16 of the New Civil Code provides that intestate and testamentary succession shall be governed by the national law of the person whose succession is under consideration. 01; Conflict of laws; Art. 16 1995 No, 2: While in Afghanistan, a Japanese by the name of Sato sold to Ramoncito, a Filipino, a parcel of land situated in the Philippines which Sato inherited from his Filipino mother. 1. What law governs the formality in the execution of the contract of sale? Explain your answer and give its legal basis. Answer: Under Art. 16 par. 1, NCC, real property is subject to the law of the country where it is situated. Since the property is situated in the Philippines, Philippine law applies. The rule of lex rei sitae in Article 16 prevails over lex loci contractu in Article 17 of the NCC. Alternative Answer: Afghanistan law governs the formal requirements of the contract since the execution is in Afghanistan. Art. 17 of the Civil Code provides that the forms and solemnities of contracts, wills, and other public Instruments shall be governed by the laws of the country in which they are executed. However, if the contract was executed before the diplomatic or consular officials of the Republic of the Philippines in Afghanistan, Philippine law shall apply. 01; Conflict of laws; Art. 16 1985 No. 11 A, a Filipino, 18 years of age, married and residing in a foreign country, having run out of money, borrowed P60,000.00 from B and to secure its payment, executed a real mortgage on a house and lot owned by him in Manila. Under the law of the country where he resides., he is deemed to be of age and the real estate mortgage is valid. The loan not having been paid on maturity, B brought an action in Manila to foreclose the mortgage and recover what is due him. a) May the real estate mortgage be foreclosed? Reasons. b) May B recover the loan of P50.000.00 due him as an unsecured debt and have the mortgaged property levied upon and sold for the satisfaction thereof? Discuss. Answers: (a) and (b) 1. Since A is 18 years of age and is a minor in our country, his real property is governed by our law, and therefore, the mortgage is voidable and can be Page 27 of 391 enforced subject to the defense of minority. The law provides that an emancipated minor cannot borrow money. By analogy with the ruling in the case of a conveyance of conjugal real property by the husband without the consent of the wife that held that conveyance void, the mortgage is likewise void. 2. Laws relating to family rights and duties or to the status, condition and legal capacity of persons are binding upon the citizens of the Philippines even though living abroad. A is a minor emancipated by marriage. Hence, he cannot borrow money or alienate or encumber real property without the consent of his father, mother or guardian. The real estate mortgage cannot be foreclosed and there can be no recovery because both contracts were not validly executed. 3. The law provides that an emancipated minor cannot borrow money or alienate or encumber real property without the consent of his father or mother, or guardian (Art. 399). Applying by analogy the ruling in the case of conveyance of conjugal real property by the husband without the wife's consent that held that conveyance void (Garcia re. Court of Appeals), the loan and the real estate mortgage contracted by A should be declared void. The real estate mortgage may not thus be foreclosed. For the reason addressed above, the rules on void contracts would apply that may generally negate recovery by either party thereunder (Art, 1412, Civil Code), 4. The loan is merely voidable under Art. 1390 being a contract where one is incapable of giving consent. Until annulled, the loan, as well as the real estate mortgage are binding between the parties. When & contract is voidable because of such incapacity, the incapacitated is "not obliged to make any restitution except insofar as he has benefited by the thing or price received by him" (Art. 1399, Civil Code). 01; Conflict of laws; Art. 17; contracts contrary to public policy 1996 No 18: Alma was hired as a domestic helper in Hongkong by the Dragon Services, Ltd., through its local agent. She executed a standard employment contract designed by the Philippine Overseas Workers Administration (POEA) for overseas Filipino workers. It provided for her employment for one year at a salary of US$1,000.00 a month. It was submitted to and approved by the POEA. However, when she arrived In Hongkong, she was asked to sign another contract by Dragon Services, Ltd. which reduced her salary to only US$600.00 a month. Having no other choice. Alma signed the contract but when she returned to the Philippines, she demanded payment of the salary differential of US$400.00 a month. Both Dragon Services, Ltd. and its local agent claimed that the second contract is valid under the laws of Hongkong, and therefore binding on Alma. Is their claim correct? Explain. Answer: Their claim is not correct. A contract is the law between the parties but the law can disregard the contract if it is contrary to public policy. The provisions of the 1987 Constitution on the protection of labor and on social justice (Sec. 10. Art II) embody a public policy of the Philippines. Since the application of Hongkong law in this case is in violation of that public policy, the application shall be disregarded by our Courts. (Cadalin v. POEA. 238 SCRA 762) Alternative Answers; a) Their claim is not correct. Assuming that the second contract is binding under Hongkong law, such second contract Is invalid under Philippine law which Page 28 of 391 recognizes as valid only the first contract. Since the case is being litigated in the Philippines, the Philippine Court as the forum will not enforce any foreign claim obnoxious to the forum's public policy. There is a strong public policy enshrined in our Constitution on the protection of labor. Therefore, the second contract shall be disregarded and the first contract will be enforced. (Cadalin v. POEA, 238 SCRA 762). b) No, their claim is not correct. The second contract executed In Hongkong, partakes of the nature of a waiver that is contrary to Philippine law and the public policy governing Filipino overseas workers. Art. 17, provides that our prohibitive laws concerning persons, their acts, or their property or which have for their object public order, public policy and good customs shall not be rendered ineffective by laws or conventions agreed upon in a foreign country. Besides. Alma's consent to the second contract was vitiated by undue influence, being virtually helpless and under financial distress in a foreign country, as indicated by the given fact that she signed because she had no choice. Therefore, the defendants claim that the contract is valid under Hongkong law should be rejected since under the doctrine of processual presumption a foreign law is deemed similar or identical to Philippine law in the absence of proof to the contrary, and such is not mentioned in the problem as having been adduced. 01; Conflict of laws; Art. 17; labor contracts 1991 No 7; A. The Japan Air Lines (JAL), a foreigner corporation licensed to do business in the Philippines, executed in Manila a contract of employment with Maritess Guapa under which the latter was hired as a stewardess on the aircraft plying the Manila-Japan-Manila route. The contrast specifically provides that (1) the duration of the contract shall be two (2) years, (2) notwithstanding the above duration, JAL may terminate the agreement at any time by giving her notice in writing ten (10) days in advance, and (3) the contract shall be construed as governed under and by the laws of Japan and only the court in Tokyo, Japan shall have the jurisdiction to consider any matter arising from or relating to the contract. JAL dismissed Maritess on the fourth month of her employment without giving her due notice. Maritess then filed a complaint with the Labor Arbiter for reinstatement, backwages and damages. The lawyer of JAL contends that neither the Labor Arbiter nor any other agency or court In the Philippines has jurisdiction over the case in view of the above provision (3) of the contract which Maritess voluntarily signed. The contract Is the law between her and JAL. Decide the issue. B. Where under a State's own conflicts rule that domestic law of another State should apply, may the courts of the former nevertheless refuse to apply the latter? If so, under what circumstance? Answer, A, Labor Legislations are generally intended as expressions of public policy on employer-employee relations. The contract therefore, between Japan Air Lines (JAL) and Maritess may apply only to the extent that its provisions are not inconsistent with Philippine labor laws intended particularly to protect employees. Under the circumstances, the dismissal of Maritess without complying with Philippine Labor law would be invalid and any stipulation in the contract to the contrary is considered void. Since the law of the forum in this case is the Philippine law. the issues should-be resolved in accordance with Philippine law. B. The third paragraph of Art. 17 of the Civil Code provides that: Page 29 of 391 "Prohibitive laws concerning persons, their acts or property, and those which have for their object public order, public policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country." Accordingly, a state's own conflict of laws rule may, exceptionally be inapplicable, given public policy considerations by the law of the forum. Going into the specific provisions of the contract in question, I would rule as follows: 1. The duration of the contract is not opposed to Philippine law and it can therefore be valid as stipulated; 2. The second provision to the effect that notwithstanding duration, Japan Air Lines (JAL) may terminate her employment is invalid, being inconsistent with our Labor laws; 3. That the contract shall be construed as governed under and by the laws of Japan and only the courts of Tokyo, Japan shall have jurisdiction, is invalid as clearly opposed to the aforecited third paragraph of Arts. 17 and 1700 of the Civil Code, which provides: "Art. 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects." Alternative Answer; A. When a contract has a foreign element such as in the factual setting stated in the problem where one of the parties is a foreign corporation, the contract can be sustained as valid particularly the stipulation expressing that the contract is governed by the laws of the foreign country. Given this generally accepted principle of international law, the contract between Maritess and JAL is valid and it should therefore be enforced. 01; Conflict of laws; Arts 15, 16 & 17 1998 No I. Juan is a Filipino citizen residing in Tokyo, Japan. State what laws govern: 1. His capacity to contract marriage in Japan, [ 1%] 2. His successional rights as regards his deceased Filipino father's property in Texas, U.S.A. [1%] 3. The extrinsic validity of the last will and testament which Juan executed while sojourning in Switzerland. [2%] 4. The intrinsic validity of said will. (1%) Answer: 1. Juan's capacity to contract marriage is governed by Philippine law - i.e., the Family Code -pursuant to Art. 15, Civil Code, which provides that our laws relating to, among others, legal capacity of persons are binding upon citizens of the Philippines even though living abroad. Answer: 2. By way of exception to the general rule of lex rei sitae prescribed by the first paragraph of Art. 16. Civil Code, a person's successional rights are governed by the national law of the decedent (2nd par.. Art. 16). Since Juan's deceased father was a Filipino citizen, Philippine law governs Juan's successional rights. Page 30 of 391 Another Answer: 2. Juan's successional rights are governed by Philippine law, pursuant to Article 1039 and the second paragraph of Article 16, both of the Civil Code. Article 1039, Civil Code, provides that capacity to succeed shall be governed by the "law of the nation" of the decedent, i.e.. his national law. Article 16 provides In paragraph two that the amount of successional rights, order of succession, and intrinsic validity of testamentary succession shall be governed by the "national law" of the decedent who is identified as a Filipino in the present problem. Answer: 3. The extrinsic validity of Juan's will is governed by (a) Swiss law, It being the law where the will was made (Art. 17. 1st par. Civil Code), or (b) Philippine law, by implication from the provisions of Art. 816, Civil Code, which allows even an alien who is abroad to make a will in conformity with our Civil Code. Answer: 4. The intrinsic validity of his will is governed by Philippine law, it being his national law. (Art. 16, Civil Code) 01; Conflict of laws; Arts 15, 16, 17 2002 No III Felipe and Felisa, both Filipino citizens, were married in Malolos, Bulacan on June 1, 1950. In 1960 Felipe went to the United States, becoming a U.S. citizen in 1975. In 1980 the obtained a divorce from Felisa, who was duly notified of the proceedings. The divorce decree became final under California Law. Coming back to the Philippines in 1982, Felipe married Sagundina, A Filipino Citizen. In 2001, Filipe, then domiciled in Los Angeles, California, died, leaving one child by Felisa, and another one by Sagundina. He left a will which he left his estate to Sagundina and his two children and nothing to Felisa. Sagundina files a petition for the probate of Felipe’s will. Felisa questions the intrinsic validity of the will, arguing that her marriage to Felipe subsisted despite the divorce obtained by Felipe because said divorce is not recognized in the Philippines. For this reason, she claims that the properties and that Sagundina has no successional rights. A. Is the divorce secured by Felipe in California recognizable and valid in the Philippines? How does it affect Felipe’s marriage to Felisa? Explain. (2%). B. What law governs the formalities of the will? Explain. (1%) C. Will Philippine law govern the intrinsic validity of the will? Explain. (2%) SUGGESTED ANSWER: A. (1.) The divorce secured by Felipe in California is recognizable and valid in the Philippines because he was no longer a Filipino at that time he secured it, Aliens may obtain divorces abroad which may be recognized in the Philippines provided that they are valid according to their national law (Van Dorn V. Romillo, Jr., 139 SCRA 139 [1985]; Quita v. Court of Appeals, 300 SCRA 406 [1998]; Llorente v. Court of Appeals, 345 SCRA 595 [2000] ). (2). With respect to Felipe the divorce is valid, but with respect to Felisa it is not. The divorce will not capacitate Felisa to remarry because she and Felipe were both Filipinos at the time of their marriage. However, in DOJ Opinion No. 134 series of 1993, Felisa is allowed to remarry because the injustice sought to be corrected by Article 26 also obtains in her case. Page 31 of 391 B. The foreigner who executes his will in the Philippines may observed the formalities described in: 1. The Law of the country of which he is a citizen under Article 817 of the New Civil Code, or 2. the law of the Philippines being the law of the place of execution under Article 17 of the New Civil Code. C. Philippine law will not govern the intrinsic validity of the will. Article 16 of the New Civil Code provides that intrinsic validity of testamentary provisions shall be governed by the National Law of the person whose succession is under consideration. California law will govern the intrinsic validity of the will. 01; Conflict of laws; cognovit; borrowing statute; characterization 1994 No 1; In Private International Law (Conflict of Laws) what is: 1} Cognovit? 2) A borrowing statute? 3) Characterization? Alternative Answers; 1) a) Cognovit is a confession of judgment whereby a portion of the complaint is confessed by the defendant who denies the rest thereof (Philippine law Dictionary, 3rd Ed.) (Ocampo v. Florenciano, L-M 13553, 2/23/50), b) Cognovit Is a "statement of confession" Oftentimes, it is referred to as a "power of attorney" or simply as a "power", it is the written authority of the debtor and his direction to the clerk of the district court, or justice of the peace to enter judgment against the debtor as stated therein. (Words and Phrases, vol. 7, pp. 115166). c) Cognovit is a plea in an action which acknowledges that the defendant did undertake and promise as the plaintiff in its declaration has alleged, and that it cannot deny that it owes and unjustly detains from the plaintiff the sum claimed by him in his declaration, and consents that judgment be entered against the defendant for a certain sum. [Words and Phrases, vol. 7, pp. 115-166). d) Cognovit is a note authorizing a lawyer for confession of judgment by defendant. 2) "Borrowing Statute" - Laws of the state or jurisdiction used by another state in deciding conflicts questioned involved in the choice of law (Black's Law Dictionary, 5th ed. 1979). 3) a) "Characterization" is otherwise called "classification" or "qualification." It is the process of assigning a disputed question to its correct legal category (Private International Law, Salonga). b) "Characterization" is a process in determining under what category a certain set of facts or rules fall. (Paras, Conflict of Laws, p. 94. 1984 ed.) 01; Conflict of laws; effect of divorce granted to former Filipinos 1997 No. 2: In 1977, Mario and Clara, both Filipino citizens, were married in the Philippines. Three years later, they went to the United States of America and established their residence in San Francisco, California. In 1987, the couple applied for, and were granted, U.S. citizenship. In 1989, Mario, claiming to have been Page 32 of 391 abandoned by Clara, was able to secure a decree of divorce in Reno, Nevada, U.S.A. In 1990, Mario returned to the Philippines and married Juana who knew well Mario's past life. (a) Is the marriage between Mario and Juana valid? (b) Would the renvoi doctrine have any relevance to the case? Answer; (a) Yes, because Phil law recognizes the divorce between Mario and Clara as valid. (b) No, (pls see renvoi) 01; Conflict of laws; effect of divorce secured abroad 1978 No. X Ana and Basilio, both Filipino citizens and of legal age, were married in 1950 in Antique but they never lived together. Ana subsequently left the Philippines and secured a divorce in Nevada, United States in 1953 on the ground of extreme mental cruelty. In 1955, Ana sought papal dispensation of the marriage and then married Carl, an American, in Nevada. She lived with him in California and begot children. She acquired American citizenship in 1959. 1. Will the divorce decree obtained abroad be accorded validity in the Philippines? What law supports your answer? 2. What is the status of the marriage of Ana and Carl under our laws? Reasons for your answer. Answer 1. The divorce decree obtained abroad is not accorded validity in the Philippines. The following laws support this answer: (a) The Civil Code states that laws relating to family rights and duties, or to the status, condition and legal capacity of persona are binding upon citizens of the Philippines, even though living abroad. It is clear that the divorce decree, which affects the status and conditions of Ana and Basilio, is not valid under Philippine laws. (b) It is a well-settled rule in this jurisdiction that absolute divorce is contrary to public policy. The Civil Code states that a declaration of public policy cannot be rendered ineffective by a judgment promulgated in a foreign country. (NOTE: The above answer is based on Arts. I5 and 17, par. 3, Civil Code and on decided cases.) 2. The marriage of Ana and Carl is void under the Philippine laws for the following reasons: (a) Ana is still married to Basilio under Philippine laws. The decree of absolute divorce which she obtained in Nevada is not valid in the Philippines for the reasons stated above. The papal dispensation which she also obtained is not also valid under Philippine laws. (b) True, the Civil Code provides that a marriage celebrated outside of the Philippines in accordance with the laws in force in the country where it is celebrated, and valid there as such, shall also be valid in this country. But there are exceptions to this rule. This rule cannot be applied if the marriage is bigamous, polygamous, or incestuous as determined by Philippine laws. The marriage of Ana and Carl is certainly bigamous as determined by Philippine laws. Page 33 of 391 (NOTE: The above answer is based on Arts. 83 and 71 of the Civil Code.) 01; Conflict of laws; effect of divorce secured abroad 1983 No. 19: A, a Filipino woman, and B, an American, were married and initially lived in Manila. They later established their domicile in Texas, of which state B is a citizen, and there obtained an absolute divorce in accordance with the laws of Texas. A afterwards returned to the Philippines and married a Filipino. Evaluate the validity of the divorce and the subsequent marriage of A, citing reasons. Answer B will succeed. The divorce granted in Texas cannot be recognized in the Philippines, in so far as A is concerned. She is a Filipino and is bound by local law which does not sanction an absolute divorce. B, therefore, remains to be her husband notwithstanding the divorce. However, the contrary view is not without legal basis. By adopting the principle of nationality in Art. 15, under which one's personal law is the law of his nation, the Civil Code accepts, that an alien woman married to a Filipino may validly obtain a divorce abroad in accordance with her national law. By recognizing the validity of such a divorce, it in effect admits its effectiveness in respect of both spouses. No other solution is possible except the contrary one which, as the problem above posed shows, leaves one party married to a man or woman who has ceased to be a spouse and gives rise to bizarre social problems as well as intricate legal questions. 01; Conflict of laws; forum non conveniens & lex loci contractus 2002 No XIII. Felipe is a Filipino citizen. When he went to Sydney for vacation, he met a former business associate, who proposed to him a transaction which took him to Moscow. Felipe brokered a contract between Sydney Coals Corp. (Coals), an Australian firm, and Moscow Energy Corp. (Energy), a Russian firm, for Coals to supply coal to Energy on a monthly basis for three years. Both these firms were not doing, and still do not do, business in the Philippines. Felipe shuttled between Sydney and Moscow to close the contract. He also executed in Sydney a commission contract with Coals and in Moscow with Energy, under which contracts he was guaranteed commissions by both firms based on a percentage of deliveries for the three-year period, payable in Sydney and in Moscow, respectively, through deposits in accounts that he opened in the two cities. Both firms paid Felipe his commission for four moths, after which they stopped paying him. Felipe learned from his contacts, who are residents of Sydney and Moscow, that the two firms talked to each other and decided to cut him off. He now files suit in Manila against both Coals and Energy for specific performance. A. Define or explain the principle of “lex loci contractus”. (2%) B. Define or explain the rule of “forum non conveniens” (3%) C. Should the Philippine court assume jurisdiction over the case? Explain. (5%) SUGGESTED ANSWER: A. Lex loci contractus may be understood in two senses, as follows: Page 34 of 391 (1) It is the law of the place where contracts, wills, and other public instruments are executed and governs their “forms and solemnities”, pursuant to the first paragraph, Article 17 of the New Civil Code; or (2) It is the proper law of the contract; e.i., the system of law intended to govern the entire contract, including its essential requisites, indicating the law of the place with which the contract has its closest connection or where the main elements of the contract converge. As illustrated by Zalamea v. Court of Appeals (228 SCRA 23 [1993]), it is the law of the place where the airline ticket was issued, where the passengers are nationals and residents of, and where the defendant airline company maintained its office. ALTERNATIVE ANSWER: A. Under the doctrine of lex loci contractus, as a general rule, the law of the place where a contract is made or entered into governs with respect to its nature and validity, obligation and interpretation. This has been said to be the rule even though the place where the contract was made is different from the place where it is to be performed, and particularly so, if the place of the making and the place of performance are the same (United Airline v. CA, G.R. No. 124110, April 20, 2001). SUGGESTED ANSWERS: B. Forum non conveniens means that a court has discretionary authority to decline jurisdiction over a cause of action when it is of the view that the action may be justly and effectively adjudicated elsewhere. C. No, the Philippine courts cannot acquire jurisdiction over the case of Felipe. Firstly, under the rule of forum non conveniens, the Philippine court is not a convenient forum as all the incidents of the case occurred outside the Philippines. Neither are both Coals and Energy doing business inside the Philippines. Secondly, the contracts were not perfected in the Philippines. Under the principle of lex loci contractus, the law of the place where the contract is made shall apply. Lastly, the Philippine court has no power to determine the facts surrounding the execution of said contracts. And even if a proper decision could be reached, such would have no biding effect on Coals and Energy as the court was not able to acquire jurisdiction over the said corporations. (Manila Hotel Corp. v. NLRC. 343 SCRA 1, 13-14[2000]) 01; Conflict of laws; forum non-conveniens; long-arm statute 1994 No. 2: 1) What is the doctrine of Forum non conveniens? 2) What is a "long arm statute"? Alternative Answers: 1) a) Forum non conveniens is a principle in Private International Law that where the ends of justice strongly indicate that the controversy may be more suitably tried elsewhere, then jurisdiction should be declined and the parties relegated to relief to be sought in another forum. (Moreno. Philippine Law Dictionary, p. 254, 1982 ed.). b) Where in a broad sense the ends of justice strongly indicate that the controversy may be more suitably tried elsewhere, then jurisdiction should be declined and the parties relegated to relief to be sought in another forum. (Handbook on Private International Law, Aruego). c) Forum non conveniens means simply that a court may resist imposition upon Its jurisdiction even when jurisdiction Is authorized by the letter of a general venue statute. (Salonga. Private International Law. p, 51. 1967 ed.) d) Forum non conveniens is a doctrine whereby a court of law having full Jurisdiction over a case brought in a proper venue or district declines to determine Page 35 of 391 the case on its merits because Justice would be better served by the trial over the case in another jurisdiction. (Webster's Dictionary) (2} a) Long arm statute is a legislative act which provides for personal jurisdiction, via substituted service or process, over persons or corporations which are non-residents of the state and which voluntarily go into the state, directly or by agent or communicate with persons in the state for limited purposes, inactions which concern claims relating to performance or execution of those purposes (Black's Law Dictionary, 5th Ed. 1979). b) Long arm statute refers simply to authorized substituted service. 01; Conflict of laws; laws governing contracts 1992 No 14: X and Y entered into a contract in Australia, whereby it was agreed that X would build a commercial building for Yin the Philippines, and in payment for the construction, Y will transfer and convey his cattle ranch located In the United States in favor of X. What law would govern: a) The validity of the contract? b) The performance of the contract? c) The consideration of the contract? Answer: (a) The validity of the contract will be governed by Australian law, because the validity refers to the element of the making of the contract in this case. (Optional Addendum:"... unless the parties agreed to be bound by another law".} (b) The performance will be governed by the law of the Philippines where the contract Is to be performed. (c) The consideration will be governed by the law of the United States where the ranch is located. (Optional Addendum: In the foregoing cases, when the foreign law would apply, the absence of proof of that foreign law would render Philippine law applicable under the "eclectic theory".) 01; Conflict of laws; laws governing contracts of carriage 1995 No. 10: On 8 December 1991 Vanessa purchased from the Manila office of Euro-Aire an airline ticket for its Flight No. 710 from Dallas to Chicago on 16 January 1992. Her flight reservation was confirmed. On her scheduled departure Vanessa checked in on time at the Dallas airport. However, at the check-in counter she discovered that she was waitlisted with some other passengers because of intentional overbooking, a Euro-Aire policy and practice. Euro-Alre admitted that Vanessa was not advised of such policy when she purchased her plane ticket. Vanessa was only able to fly two days later by taking another airline. Vanessa sued Euro-Aire In Manila for breach of contract and damages. EuroAire claimed that it cannot be held liable for damages because Its practice of overbooking passengers was allowed by the U.S. Code of Federal Regulations. Vanessa on the other hand contended that assuming that the U.S. Code of Federal Regulations allowed Intentional overbooking, the airline company cannot invoke the U.S. Code on the ground that the ticket was purchased in Manila, hence, Philippine Page 36 of 391 law should apply, under which Vanessa can recover damages for breach of contract of carriage. Decide. Discuss fully. Answer; Vanessa can recover damages under Philippine law for breach of contract of carriage, Philippine law should govern as the law of the place where the plane tickets were bought and the contract of carriage was executed. In Zalamea v. Court of Appeals (G.R No. 104235, Nov. 10, 1993) the Supreme Court applied Philippine law in recovery of damages for breach of contract of carriage for the reason that it is the law of the place where the contract was executed. Alternative Answer: If the violation of the contract was attended with bad faith, there is a ground to recover moral damages. But since there was a federal regulation which was the basis of the act complained of, the airline cannot be in bad faith. Hence, only actual damages can be recovered. The same is true with regards to exemplary damages. 01; Conflict of laws; laws governing divorce 1987 No. 1: Alma, a Filipino citizen went to the United States on a tourist visa. Wanting to legalize her stay and obtain permanent employment, she married John, an American citizen, for a fee, with the understanding that after a year, John would divorce her. As agreed upon the two obtained a divorce in Reno, Nevada. (a) Suppose that after the divorce Alma consults you on the question of how she can now marry her childhood sweetheart Rene, in the Philippines preferably, or if that cannot to done, in some other country where Alma and Rene are prepared to go so that they can be joined in wedlock and live the life they had dreamed about. What advice will you give Alma. Explain. (b) Suppose on the other hand that Alma and John decided to give their marriage a try. They had seven years of marriage. Alma eventually became an American citizen, but the marriage soured and ended up in a divorce, just the same. This time Alma wants a marriage for keeps, so she comes back to the Philippines to Rene who, ever faithful, has waited for seven long years. Can she and Rene contract a valid marriage? Explain. Answer: (First Assumption) a. Assuming that the marriage of Alma and John is valid, then the divorce obtained by them is void because of Article 15 of the Civil Code. Hence a marriage between Alma and Rene in the Philippines or elsewhere will be bigamous. The advice to Alma, therefore, is for her not to marry Rene. b. Since Alma became an American citizen and presumably she had that citizenship at the time of the divorce, if the divorce is valid under the American law or the law of her nationality at that time, then she would be released from her marriage with John. Alma and Rene can contract a valid marriage when she comes back to the Philippines. (Second Assumption) a. Assuming that the marriage of Alma and John is fictitious, there having been no real intent to enter into the marriage, and there having been no consent at all since Alma's intention was merely to legalize her stay and obtain permanent employment, the marriage between Alma and John is void. On this premise, my Page 37 of 391 advice to Alma would be that she can now marry her childhood sweetheart Rene in the Philippines or in any other country for that matter. b. Assuming, upon the other hand, that Alma and John did intend to marry and give their marriage a try, and Alma eventually became an American citizen, the divorce would be valid. Hence, she and Rene can contract a valid marriage upon her return to the Philippines. 01; Conflict of laws; laws governing marriages 1992 No 1: In 1989, Maris, a Filipino citizen, married her boss Johnson, an American citizen, In Tokyo in a wedding ceremony celebrated according to Japanese laws. One year later, Johnson returned to his native Nevada, and he validly obtained in that state an absolute divorce from his wife Maris. After Maris received the final judgment of divorce, she married her childhood sweetheart Pedro, also a Filipino citizen, in a religious ceremony in Cebu City, celebrated according to the formalities of Philippine law. Pedro later left for the United States and became naturalized as an American citizen. Maris followed Pedro to the United States, and after a serious quarrel, Marts filed a suit and obtained a divorce decree issued by the court in the state of Maryland. Maris then returned to the Philippines and in a civil ceremony celebrated in Cebu City according to the formalities of Philippine law, she married her former classmate Vincent likewise a Filipino citizen. a) Was the marriage of Maris and Johnson valid when celebrated? Is their marriage still validly existing now? Reasons. Answer: (a) The marriage of Mans and Johnson was valid when celebrated because all marriages solemnized outside the Philippines (Tokyo) in accordance with the laws in force in the country where they are solemnized (Japan), and valid there as such, are also valid in the Philippines. Their marriage no longer validly subsists, because it has been dissolved by the absolute divorce validly obtained by Johnson which capacitated Maris to remarry (Art. 26. Family Code). 01; Conflict of laws; laws governing marriages celebrated abroad 1975 No. 1 X and Y, both Filipino citizens and cousins within the fourth degree of consanguinity entered into a marriage contract in Hongkong. Assuming that the marriage is valid in Hongkong, is such marriage valid in the Philippines? Why? Answer: No, the marriage will be considered void in the Philippines. Under Article 71 of the Civil Code, all marriages performed outside the Philippines in accordance with the laws in force in the country where they were performed, and valid there as such, shall also be valid in the country, except bigamous, polygamous, or incestuous marriages as determined by Philippine Law. A marriage between first cousins is incestuous and void ab initio under Article 81 of the Civil Code. Moreover, under Article 15 of the Civil Code, laws relating to family rights and duties, or to the status, condition and legal capacity of persons are binding upon citizens of the Philippines, even though living abroad. Article 81(3), which provides that marriages between collaterals within the fourth civil degree are void ab initio is a Page 38 of 391 law relating to the legal capacity of persons and is thus binding upon Filipinos, even though they are abroad. 01; Conflict of laws; laws governing marriages; forms and solemnities 2003 No II Gene and Jane, Filipino, met and got married in England while both were taking up post-graduate courses there. A few years after their graduation, they decided to annul their marriage. Jane filed an action to annul her marriage to Gene in England on the ground of latter’s sterility, a ground for annulment of marriage in England. The English court decreed the marriage annulled. Returning to the Philippines, Gene asked you whether or not he would be free to marry his former girlfriend. What would your legal advice be? 5% Suggested Answer: No, Gene is not free to marry his former girlfriend. His marriage to Jane is valid according to the forms and solemnities of British law, is valid here (Article 17, 1st par., NCC). However, since Gene and Jane are still Filipinos although living in England, the dissolution of their marriage is still governed by Philippine law (Article 15, NCC). Since, sterility is not one of the grounds for the annulment of a marriage under Article 45 of the Family Code, the annulment of Gene’s marriage to Jane on that ground is not valid in the Philippines (Article 17, NCC) Alternative Answer: Yes, Gene is free to marry his girlfriend because his marriage was validly annulled in England. The issue of whether or not a marriage is voidable, including the grounds therefore, is governed by the law of the place where the marriage was solemnized (lex loci celebrationis). Hence, even if sterility is not a ground to annul the marriage under the Philippine law, the marriage is nevertheless voidable because sterility makes the marriage voidable under English law. Therefore, annulment of the marriage in England is valid in the Philippines. 01; Conflict of laws; laws governing marriages; forms and solemnities 1989 No. 1: (1) Robert and Evelyn, both Filipinos, met in Los Angles, California. They agreed to get married on June 10, 1989. On June 7, 1989, Robert flew to New York due to an urgent business matter but intended to return to Los Angeles on June 9, 1989, in time for the wedding. The business emergency of Robert, however, lasted longer than he expected so that he failed to return to Los Angeles as planned. In order not to postpone the wedding, Robert immediately called his brother Val who was also residing at Los Angeles to stand as his proxy at the wedding, which the latter did. Is the marriage of Robert and Evelyn valid in the Philippines? Give your reasons, Answer: If the marriage was performed in accordance with the laws of California and valid there, then the marriage is likewise valid in the Philippines. Alternative Answer: Since the problem does not state the California law on marriage by proxy, the presumption in Private International Law is that the California law is the same as the Philippine law. Therefore, the marriage would be void. (2) While "X", an Associate Justice of the Court of Appeals, was vacationing in Cebu City, he was requested to solemnize the marriage of Serge and Joan in the residence of Serge's parents. "X" could not refuse the request of both the parents of Page 39 of 391 the couple because they were his relatives. On the day set for the wedding, there were so many visitors at the residence of Serge's parents so that "X" decided to solemnize the marriage at the kiosk of the public plaza located nearby, Is the marriage of Serge and Joan valid? Give your reasons. Answer: Yes, because the requirement that the marriage be solemnized in a public place is not an essential requisite of the law. 01; Conflict of laws; laws governing real and personal property 1988 No. 12: (a) Pursuant to private international law or conflict of laws, to what law is real property as well as personal property subject? Are there any exceptions to the rule? If there are, name them. Answer: (a) Real property as well as personal property is subject to the law of the country where it is situated (Art. 16, par. 1, CC). There are, however, two exceptions to this rule. They are: (1) under the second paragraph of Art. 16, which declares that testamentary and intestate succession, both with respect to the order of succession, the amount of successional rights and the intrinsic validity of testamentary provisions shall be regulated by the national law of the decedent; and (2) under No. 2 Art. 124, which declares that if the husband is a foreigner and the wife is a Filipino, their property relations shall be governed by the husband's national law, without prejudice to the provisions of the Civil Code with regard to immovable property. 01; Conflict of laws; laws governing succession 1986 No. 13: Mr. Burnside, a citizen of the State of California but domiciled in the Philippines, made a will in Manila providing that his estate should be distributed in accordance with Philippine law. At the time of his death, Burnside's estate consisted of bank accounts in various Philippine banks. Is the testamentary provision valid? Explain. What law would govern if Burnside had not made such a testamentary provision. Explain. Answer: The testamentary provision is not valid. According to the Civil Code, there are four aspects of succession which are governed by the national law of the decedent if he is a foreigner. They are: first, the order of succession; second, the amount of successional rights; third, the intrinsic validity of testamentary provisions; and fourth, the capacity to succeed. It is obvious that the proviso in Burnside's will providing that his estate shall be distributed in accordance with Philippine Law is contrary to the explicit mandate of the Civil Code. Therefore, it is void. If Burnside had not made the above-stated testamentary provision, applying the doctrine of single renvoi, the law of the Philippines shall be applied. Under the law of the Philippines, the national law of Burnside shall govern. That means the law of California. Now, what does the law of California say? According to the conflictsrule-law of California, the internal law of Burnside's domicile shall govern and not the law of California. So, the case is referred back (renvoi) to the internal law of the Philippines. The law of the Philippines shall, therefore, be applied in the distribution of Burnside's estate, Page 40 of 391 (Note: .The answer to the first question is based upon Arts. 16, par. 2, and 1039 of the Civil Code and upon Bellis vs. Bellis, 20 SCR A 358. The answer to the second question is based upon Art. 16, par. 2, of the Civil Code and upon Aznar vs. Christensen-Garcia, 7 SCRA 95.) Answer - The validity of the testamentary provision would depend on whether the law of California allows such choice. If Burnside had not made such testamentary provision, Philippine law would govern, as in the case of Aznar, it was found that California adopts the domiciliary theory. As the decedent is domiciled in the Philippines, the Philippine law on succession will apply. Answer - The laws of the country of which a person is a citizen shall govern the intrinsic validity of his will — as to the order of succession and amounts to be distributed to his heirs. The testamentary provision is therefore invalid. However, the provision shall be given effect not by reason of its validity but because of Philippine laws which have to govern property situated in the Philippines. Because his estate consisted only of bank accounts in Philippine banks, Philippine law should still govern. 01; Conflict of laws; laws governing succession 1988 No. 12: (b) What are the four aspects of succession which are governed by the national law of the decedent if he is a foreigner? Answer: (b) The four aspects of succession which are governed by the national law of the decedent if he is a foreigner are: first, the order of succession; second, the amount of successional rights; third, the intrinsic validity of testamentary provisions; and fourth, the capacity to succeed. (Arts, 16, par. 2, 1039, CC; sec Bellis vs. Bellis. 20 SCRA 358.) 01; Conflict of laws; laws governing succession 1976 No. V-b Which law shall govern the successional rights? Explain. Answer Article 16, paragraph 2 provides that successional rights shall be regulated by the national law of the person whose succession is under consideration. Since B is a citizen of Texas, the law that should govern successional rights should be the law of Texas. However, if the law of Texas recognizes the domiciliary rule that successional rights shall be governed by the law of the domicile of the decedent, then, Philippine Law on Succession shall apply. 01; Conflict of laws; laws governing succession 1980 No. VI (b) "U", an American citizen who used to stay in New York, married "V", a Filipina. They lived in Manila, "U" died leaving a will disposing of his real and personal properties both in Manila and New York according to the laws of New York. The will was presented for probate in Manila, "V" assailed the validity of the will claiming that the properties of "U" must be distributed according to Philippine laws where "U" was domiciled at the time of his death. How would you resolve the issue? Answer Page 41 of 391 (b) The will itself should be admitted to probate. It must be observed that the issue raised by "V" involves the intrinsic validity of testamentary provisions. It is well-settled that a probate court cannot, as a general rule, inquire into the validity of testamentary provisions. Its area of inquiry is limited. It can only inquire into the following: (a) the due execution of the will; and (b) the testamentary capacity of the testator. There are, however, some exceptions to the above rule. Assuming then that the case at bar falls under one of these exceptions, as far as the contention of "V" is concerned, we must distinguish. Thus — If under New York law, there is no conflicts law rule declaring that it will be the decedent's domiciliary law that will govern, then "V" is not correct. This is so because according to our Civil Code, it will be the .decedent's national law that will govern. (Art. 16, par. 2, Civil Code). However, if under New York law, there is a conflicts law rule declaring that it will be the decedent's domicilliary law that will govern, then "V" is correct. It is now a settled doctrine in this jurisdiction that when the Civil Code says that it will be the decedent's national law that will govern, it refers not only to the internal law of the decedent's state with respect to succession but even to the conflicts law rule. So, the case is referred back (renvoi) to the internal law of the Philippines where the decedent was domiciled at the time of his death. Consequently, as far as the distribution of "U's" properties is concerned, it should be the law of the Philippines that will govern and not the law of New York, (Agnar vs. Christensen-Garcia, 7 SCRA 95; Bellis vs. Bellis, 20 SCRA S58.) (Note: If the bar candidate attacks the problem directly by invoking the provision of the second paragraph of Art. 16 of the Civil Code, the Committee respectfully recommends that the answer should be considered as correct. If the candidate attacks the problem from the procedural point of view, basing his answer on Art. 838 of the Civil Code in relation to the Rules of Court, the Committee respectfully recommends that due credit should -be given.) 01; Conflict of laws; laws governing succession of aliens 1984 No, 20 A, a foreigner, married B, a Filipino, and settled in the Philippines. They begot a son, C. Under the laws of A's country, the system of complete separation of property is followed, and the husband can freely dispose of his properties without restriction. During the marriage, A bought a large number of shares of Philex Mining Company out of his salary as a World Bank consultant. Upon A's death, it was found that he left a will leaving all his Philex shares — the only property acquired during his marriage — exclusively to his brother D, totally omitting B and C. B and C, therefore, opposed the will on the ground of the preterition of C, among others. Additionally, B claimed that 1/2 of the Philex shares of stock should pertain to her as her conjugal share. Is the will valid? If you were the judge, how would you rule on the issues raised by B and C? Answer: A. Furnished by Office of Justice Palma Under Article 16 of the Civil Code, in testamentary succession, the intrinsic validity of testamentary shall be regulated by the national law of A's country. Thus, since the laws of A's country allow him to freely dispose of his property, the Page 42 of 391 testamentary dispositions in favor of his brother would be valid even though he totally omits his wife and son. B, is also not entitled to one-half of the Philex shares. Under Art. 124, the law of the husband's country shall govern their property relations, which, in this case, was the system of complete separation of property. Since the Philex shares were acquired by A out of his salary, the shares belonged exclusively to him. B. Comments and Suggested Answer We agree with the answer of the Bar Examiner, However, if the bar candidate will hold that the will is valid on the ground that the questions of preterition and intrinsic validity of testamentary provisions are questions which a probate court cannot determine, and then, he finally resolves the issues of preterition and intrinsic validity of testamentary provisions correctly, said answers should be considered a correct answer. 01; Conflict of laws; laws governing sucession of aliens 1995 No. 15: Michelle, the French daughter of Penreich, a German national, died in Spain leaving real properties in the Philippines as well as valuable personal properties in Germany. 1. What law determines who shall succeed the deceased? Explain your answer and give its legal basis. 2. What law regulates the distribution of the real properties in the Philippines? Explain your answer and give its legal basis. 3. What law governs the distribution of the personal properties in Germany? Explain your answer and give its legal basis. Answer: Assuming that the estate of the decedent is being settled in the Philippines) 1. The national law of the decedent (French law) shall govern in determining who will succeed to his estate. The legal basis is Art. 16 par. 2, NCC. Alternative Answer: French law shall govern the distribution of his real properties in the Philippines except when the real property is land which may be transmitted to a foreigner only by hereditary succession. 2. The distribution of the real properties in the Philippines shall be governed by French law. The legal basis is Art. 16, NCC). 3. The distribution of the personal properties in Germany shall be governed by French law. The legal basis is Art. 16, NCC). 01; Conflict of laws; laws governing wills executed abroad 1975 No. II A, while traveling in Tokyo, Japan executed his will before a diplomatic official of the Philippines. Only two witnesses signed the attestation clause. Upon his return to the Philippines A filed a petition to probate the will. The petition is opposed on the ground that the will is not attested by three witnesses. Assuming that in Japan only two witnesses are required to attest a will, may the will of A be admitted to probate? Why? Answer Page 43 of 391 No, A's will may not be admitted to probate in the Philippines. Although under Article 815, a Filipino in a foreign country is authorized to make a will in any form established by the law of the country in which he may be. Article 17 of the Civil Code is more explicit and provides that when acts, such as will are executed in a foreign country before diplomatic or consular officials of the Philippines, the solemnities established by Philippine laws shall be observed in their execution. Article 17, paragraph 2, is more of a special provision while Article 815 is but a reiteration of the general principle of lex loci celebraciones embodied in the first paragraph of Article 17. One of title solemnities required by our laws regarding wills is the attestation and subscription of at least three witnesses. (Art 805, par. 1) 01; Conflict of laws; laws governing wills of an alien 1985 No. 10: C) An Englishman, who had resided in the Philippines for a long time, executed a will in France, disposing of his real and personal properties in the Philippines. What law governs the validity of his will? Discuss. Answers: C) 1. With respect to the intrinsic validity of the will, it is English law in force at the time of his death. That rule is absolute without any exception. With respect however to the extrinsic or formal validity of the will, it is the law of England or of France or of the Philippines in force at the time of the execution of the will 2. Article 16—Real property as well as personal property is subject to the law of the country where it is situated. However, the order of succession, the amount of successional rights and the intrinsic validity of the testamentary provisions shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found. 3. Article 16 and Article 1039 provide as follows: "Art. 16. Real property as well as personal property is subject to the law of the country where it is situated. "However, intestate and testamentary Successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country wherein said property may be found," "Art. 1039. Capacity to succeed is governed by the law of the nation of the decedent." 4. The extrinsic validity of a will of an alien is governed by the law of the place where the will is executed, where he resides, where he is a national or by the Civil Code (Arts, 17 and 816). The intrinsic validity of the will, however, shall be governed by the law of England since the nationality law governs (Art. 16, Civil Code). 01; Conflict of laws; nationality theory 2004 No. VII A. PH and LV are HK Chinese. Their parents are now Filipino citizens who live in Manila. While still students in MNS State, they got married although they are first cousins. It appears that both in HK and in MNS State first cousins could marry legally. Page 44 of 391 They plan to reside and set up business in the Philippines. But they have been informed, however, that the marriage of first cousins here is considered void from the beginning by reason of public policy. They are in a dilemma. They don’t want to break Philippine law, much less their marriage vow. They seek your advice on whether their civil status will be adversely affected by Philippine domestic law? What is your advice? (5%) 01; Conflict of laws; nationality theory; effect of divorce secured abroad 1981 No. 4: Spouses, husband "H" and wife "W", Filipinos, with a child, decided that "H", a doctor, would go to the U.S. to find employment there and then "W" would join him. When in the U.S., "H" wrote that to establish U.S. residence, he would have to obtain a divorce, marry an American girl, and once a U.S. resident, divorce his American wife and then remarry "W" "W" agreed. Four years later, "H", now a U.S. resident and having divorced his American wife, returns to the Philippines and finds that his wife, "W", has married a wealthy man in a ceremony celebrated in Hongkong and is happily living with him in Manila. a) Was the marriage and divorce obtained by "H" in the U.S. valid? b) Was the marriage of "W" in Hongkong valid? Answer (a) Both divorce and marriage are not valid in the Philippines. The divorce is not valid for the following reasons: (1) We adhere to the nationality theory. The Civil Code declares that laws relating to family rights and duties, or the status, condition and legal capacity of persona are binding upon citizens of the Philippines even though living abroad. Divorce certainly affects the status and condition of persons. Since absolute divorce is not recognized in this country except among Muslims, therefore, the decree of absolute divorce obtained by "H" is not valid (2) It is well-settled that absolute divorce is contrary to public policy. According to the Civil Code, this declaration of public policy cannot be rendered ineffective by a judgment promulgated in a foreign country, The marriage of "H" to an American woman is not also valid. True, we adhere to the principle of locus regit actum— a marriage valid where celebrated is also valid in the Philippines, but excepted from this rule are bigamous, polygamous and incestuous marriages as determined by Philippine law. Since the divorce obtained by "H" from "W" is not valid in this country as stated above, the subsequent marriage to an American woman is dearly bigamous as determined by Philippine law. Therefore, the marriage is not valid. (Note: The above answers are based on Arts. 15,17, par. 3, and 71 of the Civil Code and on decided cases.) (b) Using the same line of reasoning, "W's" marriage to another man in Hongkong is not also valid. Since the decree of absolute divorce obtained by her husband "H" in the U.S. is not valid under Philippine law for the reasons stated above, her marriage in Hongkong to another man is clearly bigamous as determined by Philippine law. Therefore, it is not valid. (Note: The above answer is based on Arts. 16 and 71 of the Civil Code.) 01; Conflict of laws; naturalization 2003 No III Page 45 of 391 Miss Universe, from Finland, came to the Philippines on a tourist visa. While in this country, she fell in love with and married a Filipino doctor, Her tourist visa having been expired and after the maximum extension allowed therefore, the Bureau of Immigration and Deportation (BID) is presently demanding that she immediately leave the country but she refuses to do so, claiming that she is already a Filipino Citizen by her marriage to a Filipino citizen. Can the BID still order the deportation of Miss Universe? Explain. 5% Suggested Answer: Yes, the BID can order the deportation of Miss Universe. The marriage of an alien woman to a Filipino does not automatically make her a Filipino Citizen. She must first prove in an appropriate proceeding that she does not have any disqualification for Philippine citizenship. (Yung Uan Chu v. Republic of the Philippines, 158 SCRA 593 [1988]). Since Miss Universe is still a foreigner, despite her marriage to a Filipino doctor, she can be deported upon expiry of her allowable stay in the Philippines. Another suggested Answer: No, the Bureau of Immigration cannot order her deportation. An alien woman marrying a Filipino, native-born or naturalized, becomes ipso facto a Filipino if she is not disqualified to be a citizen of the Philippines (Mo Ya Lim v Commission of Immigration, 41 SCRA 292 [1971]), (Sec 4, Naturalization Law). All that she has to do is prove in the deportation proceeding the fact of her marriage and that she is not disqualified to become a Filipino Citizen. Another suggested Answer: It depends. If she is disqualified to be a Filipino citizen, she may be deported. If she is not disqualified to be a Filipino citizen, she may not be deported. An alien woman who marries a Filipino citizen becomes one. The marriage of Miss Universe to the Filipino doctor did not automatically make her a Filipino citizen. She still has to prove that she is not disqualified to become a citizen. 01; Conflict of laws; operation of foreign laws upon resident 1977 No, I-c Cite five (5) provisions of the New Civil Code which recognize the operation of foreign laws upon residents of the Philippines. Answer Some of the provisions of the Civil Code which sanction the operation of foreign laws upon Philippine residents are: (a) Art. 16, paragraph 2, which states that intestate and testamentary successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration. (b) Art. 17, paragraph 1, which states that the forms and solemnities of contracts, wills, and other public instruments shall be governed by the laws of the country in which they are executed. (c) Art. 66, which states that when either or both of the contracting parties (to a marriage contract) are citizens or subjects of a foreign country, it shall be necessary, before a marriage license can be obtained, to provide themselves with a certificate of legal capacity to contract marriage, to be issued by their respective diplomatic or consular officials. Page 46 of 391 (d) Art. 71, which states that all marriages performed outside the Philippines in accordance with the laws in force in the country where they were performed, and valid there as such, shall also be valid in this country, except bigamous, polygamous, or incestuous marriages as determined by Philippine law. (e) Art. 124, No. (2), which states that if the husband is a foreigner and the wife is a citizen of the Philippines, (as far as their property relations are concerned), the laws of the husband's country shall be followed without prejudice to the provisions of the Civil Code with regard to immovable property. (f) Art. 815, which states that when a Filipino is in a foreign country, he is authorized to make a will in any of the forms established by the law of the country in which he may be. Such will may be probated in the Philippines. (g) Art. 816, which states that the will of an alien who is abroad produces effect in the Philippines if made with the formalities prescribed by the law of the place in which he resides, or according to the formalities observed in his country, or in conformity with those which the Civil Code of the Philippines prescribes. (h) Art. 817, which states that a will made in the Philippines by a citizen or subject of another country, which is executed in accordance with the law of the country of which he is a citizen or subject, and which might be proved and allowed by the law of his own country, shall have the same effect as if executed according to the laws of the Philippines. (i) Art. 1039, which states that capacity to succeed is governed by the law of the nation of the decedent. (j) Art. 1753, which states that the law of the country to which the goods are to be transported shall govern the liability of the common carrier for their loss, destruction, or deterioration. 01; Conflict of laws; processual presumption 1976 No. V-c May our courts take judicial notice of the laws of Texas, U.S.A.? Explain. Answer No, because our courts may take judicial notice only of local laws, arid foreign laws must be pleaded and proved in evidence. However, in the absence of proof of what the foreign law is, it shall be presumed that the foreign law is the same as the Philippine law. (Miciano vs. Brimo) 01; Conflict of laws; renvoi doctrine 1997 No. 2: In 1977, Mario and Clara, both Filipino citizens, were married in the Philippines. Three years later, they went to the United States of America and established their residence in San Francisco, California. In 1987, the couple applied for, and were granted, U.S. citizenship. In 1989, Mario, claiming to have been abandoned by Clara, was able to secure a decree of divorce in Reno, Nevada, U.S.A. In 1990, Mario returned to the Philippines and married Juana who knew well Mario's past life. (a) Is the marriage between Mario and Juana valid? (b) Would the renvoi doctrine have any relevance to the case? Answer; Page 47 of 391 (a) Yes, because Phil law recognizes the divorce between Mario and Clara as valid. (b) No, The renvoi doctrine is relevant in cases where one country applies the domiciliary theory and the other the nationality theory, and the issue involved is which of the laws of the two countries should apply to determine the order of succession, the amount of successional rights, or, the intrinsic validity of testamentary provisions. Such issue is not involved in this case. Alternative Answer; Yes. "Renvoi" - which means "referring back" is relevant because here, we are applying U.S. law to Mario, being already its citizen, although the formalities of the second marriage will be governed by Philippine law under the principle of lex loci celebrationis. 01; Conflict of laws; renvoi doctrine 1988 No. 12: (c) A, a citizen of California, U.S.A. but domiciled in the Philippines, died testate in Manila, survived by two acknowledged natural children, B and C. In his will, he left more than P500,000.00 to B and only P3,000.00 to C. It is admitted that under the Civil Code of California, the domiciliary law of the decedent shall govern questions involving the validity of testamentary provisions, C, who is contesting the validity of the disposition in favor of B now contends that the Philippine laws with respect to succession are applicable. Is this correct? Give your reasons. Answer: (c) Yes, this is correct. The doctrine of renvoi is applicable in the instant case. Although the Civil Code in Art, 16 states that the intrinsic validity of testamentary provisions shall be regulated by the decedent's national law, nevertheless, the Civil Code of California declares that the decedent's domiciliary law shall govern. Hence, the question shall be referred back to the decedent's domicile. In other words, the laws of the Philippines with respect to succession shall govern. Consequently, in the partition of the estate, C shall be given a share which must not be less than his legitime. (Aznar vs. Garcia, 7 SCRA 93). 01; Conflict of laws; renvoi doctrine 1976 No. V-a A and B, husband and wife respectively, are both citizens of Texas, U.S.A. and domiciled in Manila. B dies in Quezon City, leaving properties in Makati, Rizal. Illustrate how the renvoi doctrine operates. Answer According to the Civil Code which follows the Nationality Theory (Article 16), successional rights are governed by the law of the nation of the decedent; but according to the domiciliary theory, successional rights are determined by the law of his domicile. B, being an American citizens but domiciled in Manila, there lies the conflict. If the Texas law follows the domiciliary theory, therefore, the Texas law will refer the matter to Philippine Law, the situs of B's domicile, in which case the Philippine law will apply. This is how the renvoi doctrine operates. 01; Conflict of laws; renvoi doctrine; characterization 1977 No. XIX-a When the conflicts rule of the forum refers a matter to a foreign law for decision, is the reference to the corresponding conflicts rule of that foreign law, or is the reference to the purely internal rules of the foreign system? Page 48 of 391 Answer The reference is to the corresponding conflicts rule of the foreign law. This was the answer of the Supreme Court in the Christensen case (Aznar vs. Christensen-Garcia) where it accepted the renvoi. If such conflicts rule says that the internal law of the decedent's domicile shall govern, and he was domiciled in the Philippines at the time of his death, the case is referred back (renvoi) to the internal law of the Philippines. The Philippine court must, therefore, apply the law of the Philippines. 01; Conflict of laws; significant relationships theory 1994 No. 20: Able, a corporation domiciled in State A, but, doing business in the Philippines, hired Eric, a Filipino engineer, for its project in State B. In the contract of employment executed by the parties in State B, it was stipulated that the contract could be terminated at the company's will, which stipulation is allowed in State B. When Eric was summarily dismissed by Able, he sued Able for damages in the Philippines. Will the Philippine court apply the contractual stipulation? Alternative Answers: a) Using the "significant relationships theory", there are contacts significant to the Philippines. Among these are that the place of business is the Philippines, the employee concerned is a Filipino and the suit was filed in the Philippines, thereby justifying the application of Philippine law. In the American Airlines case the Court held that when what is involved is paramount state Interest such as the protection of the rights of Filipino laborers, the court can disregard choice of forum and choice of law. Therefore the Philippine Court should not apply the stipulation in question. b) No, lex fori should be applied because the suit is filed in Philippine courts and Eric was hired in the Philippines. The Philippine Constitution affords full protection to labor and the stipulation as to summary dismissal runs counter to our fundamental and statutory laws. 01; Conflict of laws; theory of effective nationality 1977 No. XIX-b A was considered a Chinese citizen under Nationalist China laws and a Japanese under the laws of Japan. He died in Manila, leaving properties in the Philippines. Before his death, he was domiciled in Japan, How should a Philippine Court adjudicate the successional rights to his estate? Answer The Philippine Court should adjudicate the successional rights to A's estate in accordance with Japanese law. This solution is in conformity with the theory of effective nationality and the conflict of nationality laws of the Hague Convention. It is obvious that A himself preferred Japanese law to Chinese law because he was not only a citizen but also a domiciliary of Japan. True, we adhere to the nationality theory (Art. 16, Civil Code), but here, the domiciliary theory merely comes to the rescue of the nationality theory. 01; Conflict of laws; torts; prescriptive period 2004 No. VII B. In a class suit for damages, plaintiffs claimed they suffered injuries from torture during martial law. The suit was filed upon President EM’s arrival on exile in HI, a U.S. state. The court in HI awarded plaintiffs the equivalent of P100 billion Page 49 of 391 under the U.S. law on alien tort claims. On appeal, EM’s Estate raised the issue of prescription. It argued that since said U.S. law is silent on the matter, the court should apply: (1) HI’s law setting a two-year limitation on tort claims; or (2) the Philippine law which appears to require that claims for personal injury arising from martial law be brought within one year. Plaintiffs countered that provisions of the most analogous federal statute, the Torture Victims Protection Act, should be applied. It sets ten years as the period for prescription. Moreover, they argued that equity could toll the statute of limitations. For it appeared that EM had procured Constitutional amendments granting himself and those acting under his direction immunity from suit during his tenure. In this case, has prescription set in or not? Considering the differences in the cited laws, which prescriptive period should be applied: one year under Philippine law, two years under HI’s law, ten years under U.S. federal law, or none of the above? Explain. (5%) 01; Conflicts of law; Art. 15 2004 No. II A. Distinguish briefly but clearly between: 5. Domiciliary theory and nationality theory of personal law. (5%) 01; Conflicts of Law; art. 16; capacity to succeed 1991 No 8: Jacob, a Swiss national, married Lourdes, a Filipina, in Berne, Switzerland. Three years later, the couple decided to reside in the Philippines. Jacob subsequently acquired several properties in the Philippines with the money he inherited from his parents. Forty years later. Jacob died intestate, and is survived by several legitimate children and duly recognized illegitimate daughter Jane, all residing in the Philippines. (a) Suppose that Swiss law does not allow illegitimate children to inherit, can Jane, who is a recognized illegitimate child, inherit part of the properties of Jacob under Philippine law? (b) Assuming that Jacob executed a will leaving certain properties to Jane as her legitime in accordance with the law of succession in the Philippines, will such testamentary disposition be valid? Answer: A. Yes. As stated in the problem. Swiss law does not allow illegitimate children to inherit Hence, Jane cannot inherit the property of Jacob under Philippine law. B. The testamentary disposition will not be valid if it would contravene Swill law; otherwise, the disposition would be valid. Unless the Swiss law is proved, it would be presumed to be the same as that of Philippine law under the doctrine of processual presumption. 01; Conflicts of Law; art. 17; laws governing wills executed abroad 1993 No. 3; A, a Filipino, executed a will in Kuwait while there as a contract worker. Assume that under the laws of Kuwait, it is enough that the testator affix his signature to the presence of two witnesses and that the will need not be acknowledged before a notary public. May the will be probated in the Philippines? Answer: Page 50 of 391 Yes. Under Articles 815 and 17 of the Civil Code, the formality of the execution of a will is governed by the law of the place of execution. If the will was executed with the formalities prescribed by the laws of Kuwait and valid there as such, the will is valid and may be probated in the Philippines. Page 51 of 391 02; Adoption; qualification of adopter 1977 No. II-b Spouses H and W filed a petition to adopt S, the 4-year old brother of W. The City Fiscal objected, because "the adoption would result in an incongruity, where S would be the son of his own sister". Should the petition be granted? Answer Yes, the petition should be granted assuming that all of the requisites of a valid adoption arc present and that the adoption is for the best interest of S, There is no law which prohibits it. True, such adoption would result in a dual relationship between W and S, but this should not prevent the adoption. One is by nature, while the other is by legal fiction. (Santos, Jr. vs. Rep., 21 SCRA 379.) 02; Adoption; qualifications of adopter 1996 No. 6: 2) Tess, a former Fillpina, now a naturalized American, and Gary, her American husband, filed a petition for adoption of her three-year old nephew, one of the eleven children of her destitute sister in Tondo. She had been supporting the child since his birth, and being childless, she and her husband have come to love him as their own son. They are both well-employed in the United States. If you were the judge, will you grant the adoption? Explain. Answer: No, I will not grant the adoption. Tess and Gary must adopt jointly under Art. 185 of the Family Code. They do not fall in any of the exceptions to this rule. In addition, both Tess and Gary must be qualified to adopt. While Tess is qualified to adopt under Article l84[3](a) of the FC, Gary is not so qualified because he Is an alien and he does not fall under any of the exceptions. Hence, the adoption must be denied (Toledano v. CA. 233 SCRA 9; Republic v. CA. 22 7 SCRA 401). 02; Adoption; qualifications of adopter 2000 No V. Sometime in 1990, Sarah, born a Filipino but by then a naturalized American citizen, and her American husband Tom, filed a petition In the Regional Trial Court of Makati, for the adoption of the minor child of her sister, a Filipina. Can the petition be granted? (5%) SUGGESTED ANSWER; It depends. If Tom and Sarah have been residing in the Philippines for at least 3 years prior to the effectivity of RA 8552, the petition may be granted. Otherwise, the petition cannot be granted because the American husband is not qualified to adopt. While the petition for adoption was filed in 1990, it was considered refiled upon the effectivity of RA 8552, the Domestic Adoption Act of 1998. This is the law applicable, the petition being still pending with the lower court. Under the Act, Sarah and Tom must adopt jointly because they do not fall in any of the exceptions where one of them may adopt alone. When husband and wife must adopt jointly, the Supreme Court has held in a line of cases that both of them must be qualified to adopt. While Sarah, an alien, is qualified to adopt under Section 7(b)(i) of the Act for being a former Filipino citizen who seeks to adopt a relative within the 4th degree of consanguinity or affinity, Tom, an alien, is not qualified because he is neither a former Filipino citizen nor married to a Filipino. One of them not being qualified to adopt, their petition has to be denied. However, if they have Page 52 of 391 been residents of the Philippines three years prior to the effectivity of the Act and continues to reside here until the decree of adoption is entered, they are qualified to adopt the nephew of Sarah under Section 7(b) thereof, and the petition may be granted. ALTERNATIVE ANSWER; Since the petition was filed before the effectivity of the Domestic Adoption Act of 1998, the Family Code is the law applicable. Under the FC, Sarah and Tom must adopt jointly because they do not fall in any of the exceptions where one of them may adopt alone. Under a long line of cases decided by the Supreme Court, when husband and wife must adopt Jointly, both of them must be qualified to adopt. While Sarah is qualified to adopt under Article 184(3) (a) for being a former Filipino citizen who seeks to adopt a relative by consanguinity, Tom is not. He is not a former Filipino citizen and neither is he married to a Filipino. One of them not being qualified to adopt, the petition must be denied. 02; Adoption; qualifications of adopter 2001 No II A German couple filed a petition for adoption of a minor Filipino child with the Regional Trial Court of Makati under the provisions of the Child and Youth Welfare Code which allowed aliens to adopt. Before the petition could be heard, the Family Code, which repealed the Child and Youth Welfare Code, came into effect. Consequently, the Solicitor General filed a motion to dismiss the petition, on the ground that the Family Code prohibits aliens from adopting. If you were the judge, how will you rule on the motion? (5%) SUGGESTED ANSWER The motion to dismiss the petition for adoption should be denied. The law that should govern the action is the law in force at the time of filing of the petition. At that time, it was the Child and Youth Welfare Code that was in effect, not the Family Code. Petitioners have already acquired a vested right on their qualification to adopt which cannot be taken away by the Family Code. (Republic v. Miller G.R. No. 125932, April 21, 1999, citing Republic v. Court of Appeals, 205 SCRA 356) ALTERNATIVE ANSWER The motion has to be granted. The new law shall govern their qualification to adopt and under the new law, the German couple is disqualified from adopting. They cannot claim that they have already acquired a vested right because adoption is not a right but a mere privilege. No one acquires a vested right on a privilege. [Note: If the examinee based his answer on the current law, RA 8552, his answer should be considered correct. This question is based on the repealed provision of the Family Code on Adoption.] 02; Adoption; qualifications of adopter 2003 No VII. Lina, a former Filipina who became an American citizen shortly after her marriage to an American husband, would like to adopt in the Philippines, jointly with her husband, one of her minor brothers. Assuming that all the required consents have been obtained, could the contemplated joint adoption in the Philippine prosper? Explain. SUGGESTED ANSWER: Page 53 of 391 Yes, Lina and her American husband can jointly adopt a minor brother of Lina because she and her husband are both qualified to adopt. Lina, as a former Filipino citizen, can adopt her minor brother under Sec. 7(b)(i) of RA 8552 (Domestic Adoption Act of 1998), or under Art. 184 (3)(1) of the Family Code. The alien husband can now adopt under Sec. 7(b) of RA8552. The Supreme Court has held in several cases that when husband and wife are required to adopt jointly, each one of them must be qualified to adopt in his or her own right (Republic v. Toledano, 233 SCRA 9 (1994). However, the American husband must comply with the requirements of the law including the residency requirement of three (3) years. Otherwise, the adoption will not be allowed. 02; Adoption; qualifications of adopters 1976 No. IV-b If A is a non-resident Italian, may he adopt a Filipino child? Explain. Answer It depends, if he is qualified by the law of Italy to adopt, then he may so adopt provided that the Philippines has not broken off diplomatic relations with Italy; but if he is so disqualified, then he may not adopt. 02; Adoption; qualifications of adopters 1976 No. IV-c Who may not adopt? Answer Under Article 28, P.D. 603, the following persons may not adopt : (a) A married person without the written consent of the spouse; (b) accounts; The guardian with respect to the ward prior to final approval of his (c) Any person who has been convicted of & crime involving moral turpitude; (d) An alien who is disqualified to adopt according to the laws of his own country or one with whose government the Republic of the Philippines has broken diplomatic relations. 02; Adoption; qualifications of the adopter 1976 No IV-a A wishes to adopt B but has certain doubts on the following matters: May A adopt B if A has already 3 legitimate children? Explain. Answer Yes, under Article 27 of P.D. 603, any person of age and in full possession of his civil rights may adopt: Provided, (1) That he is in a position to support and care for his legitimate, legitimated, acknowledged natural children by legal fiction, or other illegitimate children, in keeping with the means, both material and otherwise, of the family; and (2) The children by nature, 14 years and above of the adopting parents give written consent to the adoption. 02; Adoption; qualifications of the adopters 1995 No. 3: In 1980 spouses Felisa and George, both Filipino citizens, migrated to the United States. Six years later they became American citizens. In 1989 they jointly filed a petition before the Regional Trial Court of Malabon seeking to adopt Gildah Page 54 of 391 the 10-year old daughter of Helen, Felisa's younger sister. The government opposed the petition on the ground that Felisa and George were disqualified since they were already American citizens. 1, How will you resolve the petition? Explain. 2. Will your answer be the same if George were a natural-born American citizen? Explain. 3. Will your answer be the same if Felisa were the Illegitimate parent of Gilda? Explain. 4. Going back to the basic facts, suppose Felisa acquired her American citizenship during the pendency of the petition for adoption, will your answer be the same as in Question No 1? Explain. Answer; 1. The petition should be denied because George is not qualified to adopt. As husband and wife, they have to adopt Jointly under Article 185 of the Family Code. Their case does not fall in any of the exceptions where a spouse may adopt alone. In Republic u. Toledano, (233 SCRA 9), the Court ruled that both spouses must be qualified to adopt when required by law to adopt Jointly. Being aliens, Fellsa and George are, as a rule, disqualified to adopt under Art. 184 of the FC. While Fellsa falls In one of the exceptions to this rule, being a former Filipino who seeks to adopt a relative by consanguinity, George does not. He does not seek to adopt his relative by consanguinity, or a legitimate child of his spouse and neither Is his spouse a Filipino. One of the spouses being disqualified to adopt, the petition has to be denied. Alternative Answer; Since the adopters are former Filipino citizens and the child sought to be adopted is a relative by consanguinity of one of them, and since the rule of joint adoption by spouses Is duly complied with, the petition should be granted. 2. The answer will be the same if George were a natural-born American. He will still not fall in any of the exceptions to the disqualification of aliens. Alternative Answer; No, my answer will be different because in that case, while Fellsa Is qualified to adopt, the petition for joint adoption cannot be granted. It should be converted into a petition only by Felisa. It cannot be granted as a joint petition but can be granted as an individual petition. 3. No. the answer will be different. In such a case, Felisa may adopt alone. Her case falls under the exception to the rule in Art, 185 requiring husband and wife to adopt jointly, because she seeks to adopt her own illegitimate child. She is qualified to adopt alone under Art, 184 because she is a former Filipino citizen who seeks to adopt a relative by consanguinity. Hence, the court may decree the adoption of Gilda by Felisa. 4. Yes, the answer will be the same as in No. 1. The adopter must be qualified to adopt not only on the date of filing of the case, but also on the date of judgment. 02; Adoption; successional rights of adopted child 2004 No. VIII A. A Filipino couple, Mr. and Mrs. BM, Jr., decided to adopt YV, an orphan from St. Claire’s orphanage in New York City. They loved and treated her like a Page 55 of 391 legitimate child for they have none of their very own. However, BM, Jr., died in an accident at sea, followed to the grave a year later by his sick father, BM, Sr. Each left a sizable estate consisting of bank deposits, lands and buildings in Manila. May the adopted child, YV, inherit from BM, Jr.? May she also inherit from BM, Sr.? Is there a difference? Why? Explain. (5%) 02; Adoption; successional rights of adopted child 1979 No. XV H died intestate leaving his legal wife, W, and his legally adopted son AS. In the proceedings for the settlement of his estate, M the widowed mother of H, intervened and claims for a share in the estate of H, AS opposes the claim of M contending that since under the law he is given the same rights as if he were a legitimate child, he excludes M from the estate of H. Should this opposition be sustained? Why? Answer The opposition of AS should not be sustained. True, under our law, an adopted child shall be entitled to the same successional rights as a legitimate child, but then there is an exception. According to the law, if the adopter is survived by legitimate parents or ascendants and by an adopted child, the latter shall not have more successional rights than an acknowledged natural child. This merely means that the adopted child cannot exclude the legitimate parents or ascendants in the succession and that his legitimate or legal share shall be the same as that to which an acknowledged natural child would be entitled. In the instant case, since H died intestate, the share of M will therefore be 1/2; W, 14-; and AS, 1/4. (Art. 1000, Civil Code; Del Rosario vs, Conanan, 76 SCRA 136). 02; Adoption; who are considered as natural parents 1981 No. 3 "M", an unwed mother, gave her child for adoption to a childless couple, "BC", for which "B-C" paid "M" P20.000.00. In the civil register of births, the father was listed as "father unknown." Two years later, after "B-C" learned to love the child as their own and adoption proceedings commenced with the required publication, "F", father of the child appeared to oppose the adoption and to seek custody of the child. "M" sided with "B-C" claiming that "F" had abandoned her when he learned that she was pregnant and declaring that she wanted "B-C" to keep the child a) Could "F" frustrate the adoption and custody of the child? Explain. b) Could "B-C" recover the P20,000.00 they had paid from either "F" or "M"? Reasons. Answer (a) "F" cannot frustrate the adoption and custody of the child. The Child and Youth Welfare Code, which is now the governing law on adoption, expressly states that the written consent of the maternal parents is necessary. Correlated with pertinent provisions of both the Welfare Code and the Civil Code, the words "natural parents" can refer only to the parent or parents with parental authority. Thus, if the child is spurious, the one with parental authority would be the mother; if the child is natural, the one with parental authority would be the parent who is the first to' recognize the child. In the instant case, it is obvious that "M", not "F", has parental authority over the child. Consequently, her written consent to the adoption would be sufficient. Besides, "F" has clearly abandoned the Page 56 of 391 child. Even on that score alone, he could not resist the adoption and custody of the child by "B-C" (Note: The above answer is based on Art. 31 of PD 603 and on Arts. 288 and 311, par. 2, of the Civil Code.) (b) "B-C" cannot recover the P20,000.00 which they had paid to "M" from either "F" or "M", The reason is obvious. They bought the child from "M"; the latter sold the child to them. Under the law, "M" is criminally liable. The principle of pari delicto (insofar as the money is concerned) is now applicable. The law will not aid either party to an illegal agreement; it leaves them where they are. (Note: The above answer is based on Art. 14-11 of the Civil Code in relation to Art. 59 of the Child and Youth Welfare Code.) Page 57 of 391 02; Family Code 1987 No. 2: A to was the registered owner of a passenger jeepney, which was involved in a collision accident with a vegetable truck, resulting in the death of four passengers and injuries to three. At the time of the accident, Ato was legally married to Maria but was cohabiting with Tonia in a relationship akin to that of husband and wife. Could the heirs of the dead passengers and the injured persons recover damages from: (a) Ato? (b) Maria? (c) Tonia? Explain each case. Answer: a. Ato - Yes. Insofar as the dead passengers are concerned, the heirs can recover damages on the basis of culpa contractual. If the injured persons are also passengers, Ato is likewise liable on the same basis of culpa contractual. However, if the injured persons are not passengers, then the liability for damages of Ato will be on the basis of a quasi-delict. b. Maria - In view of the ruling in Juaniza v. Jose (89 SCRA 306) that the passenger jeepney acquired by the husband during an illicit cohabitation with the paramour is conjugal property, Maria is liable to the same extent as Ato insofar as the conjugal property in the marriage between Ato and Maria could be answerable. But as regards her paraphernal property, Maria cannot be held answerable. c. Tonia - No, In Juaniza v. Jose the paramour of the owner of the passenger jeepney that figured in an accident was held to be not a co-owner, and therefore not liable for damages. Article 144 is inapplicable. 02; Family Code 1987 No. 16: Manny and Nita, husband and wife, decided to separate by mutual agreement. They had a contract prepared, signed it and had it notarized, providing for their separation and for the extra-judicial liquidation of their conjugal assets. They likewise agreed to live separately and that if either spouse should find a more compatible partner, the other would raise no objection and would refrain from taking any judicial action against the other. Determine the validity of each of the provisions of the agreement. Explain briefly. Answer: 1. The provision for their separation is void. 2. The provision for the extra-judicial liquidation of their conjugal assets is void. 3. The agreement to live separately is void. 4. The agreement that should either spouse find a more compatible partner, the other would raise no objection and would refrain from taking any judicial action against the other is void. Page 58 of 391 The aforementioned stipulations are all void because they are contrary to law, morals, good custom, public order and public policy. The specific provision of law is Article 221 of the Civil Code. 02; Family Code; annulment; effects; requisites before remarriage 1990 No 10: The marriage of H and W was annulled by the competent court. Upon finality of the judgment of nullity. H began looking for his prospective second mate. He fell in love with a sexy woman S who wanted to be married as soon as possible, i.e., after a few months of courtship. As a young lawyer, you were consulted by H, (a) How soon can H be joined in lawful wedlock to his girlfriend S? Under existing laws, are there certain requisites that must be complied with before he can remarry? What advice would you give H? (b) Suppose that children were born from the union of H and W, what would be the status of said children? Explain your answer. (c) If the subsequent marriage of H to S was contracted before compliance with the statutory condition for its validity, what are the rights of the children of the first marriage (i.e., of H and W) and of the children of the subsequent marriage (of H and S)? Answer: (a) H, or either spouse for that matter, can marry again after complying with the provisions of Article 52 of the Family Code, namely, there must be a partition and distribution, of the properties of the spouses, and the delivery of the children's presumptive legitimes. which should be recorded in the appropriate civil registry and registries of property. H should be so advised. Alternative Answer: for (a) The following are the requisites prescribed by law and I the advice to H is to comply with them, namely: (1) If either spouse contracted the marriage in bad faith, his or her share of the net profits of the community property : or conjugal partnership property shall be forfeited in favor of the common children or, if there are none, the children of the guilty spouse by a previous marriage or, in default of children, the innocent spouse; (2) Donations by reason of marriage shall remain valid except that if the donee contracted the marriage in bad faith, such donations made to said donee are revoked by operation of law; (3) The spouse who contracted the subsequent marriage in bad faith shall be disqualified to inherit from the innocent spouse by testate and intestate succession; (4) If both spouses of the subsequent marriage acted in bad faith all donations by reason of marriage and testamentary dispositions made by one in favor of the other are revoked by operation of law. (5) The judgment of annulment of the marriage, the partition and distribution of the properties of the spouses, and the delivery of the children's presumptive legitimes shall be recorded in the appropriate civil registry and registers of property, (Articles 53. 52, 43. 44. Family Code). Page 59 of 391 (b) The children born from the union of H and W would be legitimate children if conceived or born before the decree of annulment of the marriage (under Art. 45 of the Family Code) has become final and executory (Art. 54, Family Code}. (c) The children of the first marriage shall be considered legitimate children if conceived or born before the Judgment of annulment of the marriage of H and W has become final and executory. Children conceived or born of the subsequent marriage shall likewise be legitimate even if the marriage of H and S be null and void for failure to comply with the requisites of Article 52 of the Family Code (Article 53, Family Code). As legitimate children, they have the following rights; (1) To bear the surnames of the father and the mother in conformity with the provisions of the Civil Code on Surnames; (2) To receive support from their parents, their ascendants, and in proper cases, their brothers and sisters, in conformity with the provisions of this Code on Support; and (3) To be entitled to the legitime and other successional rights granted to them by the Civil Code (Article 174, Family Code). 02; Family Code; annulment; fraud 1986 No. 3: After a whirlwind courtship of two weeks, Marikit, starry-eyed and captivated, got married to Mr. Masanting. Soon after the honeymoon, however, Marikit discovers that Masanting was not the knight in shining armor she thought she married. She received official information that Masanting had been dishonorably discharged from the army for desertion. She also learned that Masanting had a string of liaisons with all kinds of women during his army career. What infuriated Marikit was that Masanting had concealed all of these from her and, in fact, had woven tales of gallantry on the battlefield and of deep religious conviction which made him lead a pure life. Promptly upon discovering the truth about Masanting and within the first year of their marriage, Marikit sues to annul the marriage on grounds of deception and fraud. Will her action prosper? Explain, Answer: Her action for annulment will not prosper. The fraud and deceit do not constitute fraud as a ground for annulment of a marriage. The C.C. provides that no other misrepresentation or deceit as to character, rank, fortune or chastity other than those enumerated shall constitute fraud as well as a ground for annulment of marriage. Answer - Marikit's action will not prosper. According to the Civil Code, any of the following shall constitute fraud which will entitle a contracting party to ask for the annulment of the contract of marriage: (1) misrepresentation as to the identity of the contracting parties; (2) non-disclosure of the previous conviction of the other party of a crime involving moral turpitude, and the penalty imposed was imprisonment for two years or more; (3) concealment by the wife of the fact that at the time of the marriage, she was pregnant by a man other than her husband. No other misrepresentation with respect to character, rank, fortune or chastity shall entitle a contracting party to ask for the annulment of the marriage. Page 60 of 391 It is clear that the misrepresentation employed by Masanting are merely deceptions with respect to character and chastity. Therefore, there is no ground for Marikit's asking for the annulment of her marriage to Masanting. (Note — The above answer is based on Art. 86 of the Civil Code.) 02; Family Code; annulment; fraud 1975 No. IV The plaintiff, a first year law student, met the defendant in March, 1968. After several meetings, they became engaged on September 19, 1968 and were married on November 28, 1968. After living together for only 88 days, the defendant gave birth to a child of nine (9) months on February 23, 1969. As a result, the plaintiff abandoned the defendant and then filed a suit for annulment of marriage alleging that his consent to. the marriage was secured by the assurance of the defendant that she was a virgin. Decide the case. Answer Annulment should not be granted. To constitute fraud as a ground for annulment, the wife must have concealed the fact that at the time of marriage, she was pregnant by another man. The wife having given birth less than 3 months after the marriage was already 6 months pregnant at the time of the marriage so that the husband knowing of the pregnancy of the wife at the time of marriage is deemed to have acknowledged the paternity of the child. (Art. 258) 02; Family Code; annulment; fraud 1976 No. II-b A and B married. May it be annulled if B concealed the fact that she was no longer a virgin at the time of the marriage or if A became impotent afterwards. Explain. Answer The marriage cannot be annulled on either ground because concealment of non-virginity does not constitute fraud. It is concealment by the wife that at the time of marriage she was pregnant by a man other than her husband, which constitute fraud. Misrepresentation as to chastity does not constitute a ground for annulment. Impotence, to be considered a ground for annulment, must exist at time of the marriage. As A became impotent after the marriage, it is not a ground for annulment. 02; Family Code; annulment; fraud 1978 No. II-a 1. Is the non-disclosure to a wife by her husband of pre-marital relationship with another woman a ground for annulment of marriage? Give reasons for your answer. 2. Is the fact of pregnancy of the wife at the time of the marriage by a man other than her husband a ground for annulment of marriage? Explain fully. Answer 1. The non-disclosure to a wife by her husband of pre-marital relationship with another woman is not a ground for annulment of marriage. True, under our law on marriage, fraud is a ground for annulment. However, it has a very technical and limited meaning. There are only three instances of fraud enumerated by the law which will justify or entitle a spouse in proceeding against the other for the annulment of their marriage and the above-mentioned non-disclosure is not one of them. Besides, and this is decisive, the law itself declares that no other Page 61 of 391 misrepresentation or deceit as to chastity shall constitute such fraud as will give a ground for the annulment of marriage. 2. The fact of pregnancy of the wife at the time of the marriage by a man other than the husband is not in itself a ground for annulment of marriage. The law is explicit. It is the concealment by the wife of the fact that at the time of the marriage, she was pregnant by a man other than her husband which is a ground for annulment. So, if there was no concealment or even the possibility of concealment, such as when the wife was already six months pregnant at the time of the celebration of the marriage, there would be no ground for annulment. At such an advanced stage of pregnancy, concealment would be impossible. (NOTE: The above answers are based on Articles 85, No. 5, and 86 of the Civil Code and on Buccat vs. Buccat, 72 Phil. 19.) 02; Family Code; annulment; grounds 1991 No 4: A. One of the grounds for annulment of marriage is that either party, at the time of their marriage was afflicted with a sexually-transmissible disease, found to be serious and appears incurable. Two (2) years after their marriage, which took place on 10 October 1988, Bethel discovered that her husband James has a sexually-transmissible disease which he contracted even prior to their marriage although James did not know it himself until he was examined two [2) years later when a child was already born to them. Bethel sues James for annulment of their marriage. James opposes the annulment on the ground that he did not even know that he had such a disease so that there was no fraud or bad faith on his part. Decide. B. Suppose that both parties at the time of their marriage were similarly afflicted with sexually-transmissible diseases, serious and Incurable, and both knew of their respective infirmities, can Bethel or James sue for annulment of their marriage? Answer; A. The marriage can be annulled. because good faith is not a defense when the ground is based upon sexually-transmissible disease on the part of either party. B. Yes. the marriage can still be annulled because the feet that both of them are afflicted with sexually-transmissible diseases does not efface or nullity the ground. Alternative Answer; B. No, the marriage can no longer be annulled, because the fact that both were afflicted and that both knew of their respective infirmities constitutes a waiver of that ground. 02; Family Code; annulment; judicial declaration 1993 No. 19: Maria and Luis, both Filipinos, were married by a Catholic priest in Lourdes Church, Quezon City in 1976, Luis was drunk on the day of his wedding. In fact, he slumped at the altar soon after the ceremony. After marriage, Luis never had a steady job because he was drunk most of the time. Finally, he could not get employed at all because of drunkenness. Hence, it was Maria who had to earn a living to support herself and her child begotten with Luis. In 1986, Maria filed a petition in the church matrimonial court in Quezon City to annul her marriage with Page 62 of 391 Luis on the ground of psychological incapacity to comply with his marital obligation. Her petition was granted by the church matrimonial court. 1) Can Maria now get married legally to another man under Philippine laws after her marriage to Luis was annulled by the church matrimonial court? Explain. 2) What must Maria do to enable her to get married lawfully to another man under Philippine laws? Answers; 1) No, Maria cannot validly contract a subsequent marriage without a court declaration of nullity of the first marriage. The law does not recognize the church declaration of nullity of a marriage. 2) To enable Maria to get married lawfully to another man. she must obtain a judicial declaration of nullity of the prior marriage under Article 36 Family Code. 02; Family Code; annulment; Legal Separation; prescription of actions 1996 No. 5: 2) Bert and Baby were married to each other on December 23,1988. Six months later, she discovered that he was a drug addict. Efforts to have him rehabilitated were unsuccessful. Can Baby ask for annulment of marriage, or legal separation? Explain. Answer; No, Baby cannot ask for annulment of her marriage or for legal separation because both these actions had already prescribed. While concealment of drug addiction existing at the time of marriage constitutes fraud under Art. 46 of the FC which makes the marriage voidable under Art. 45 of the FC, the action must, however, be brought within 5 years from the discovery thereof under Article 47(3), FC, Since the drug addiction of Bert was discovered by Baby In June 1989, the action had already prescribed in June of 1994. Although drug addiction is a ground for legal separation under Art. 55(5) and Art. 57 of the FC requires that the action must be brought within 5 years from the occurrence of the cause. Since Bert had been a drug addict from the time of the celebration of the marriage, the action for legal separation must have been brought not later than 23 December 1993. Hence, Baby cannot, now, bring the action for legal separation. 02; Family Code; annulment; proper party 1995 No. 14: Yvette was found to be positive for HIV virus, considered sexually transmissible, serious and incurable. Her boyfriend Joseph was aware of her condition and yet married her. After two (2) years of cohabiting with Yvette, and in his belief that she would probably never be able to bear him a healthy child, Joseph now wants to have his marriage with Yvette annulled. Yvette opposes the suit contending that Joseph is estopped from seeking annulment of their marriage since he knew even before their marriage that she was afflicted with HIV virus. Can the action of Joseph for annulment of his marriage with Yvette prosper? Discuss fully. Answer; No Joseph knew that Yvette was HIV positive at the time of the marriage. He is, therefore, not an injured party. The FC gives the right to annul the marriage only to an injured party. [Art. 47 (5), FC] Page 63 of 391 Alternative Answer: The action for annulment can prosper because the prescriptive period of five (5) years has not yet lapsed. [Art. 45 (6), FC]. 02; Family Code; annulment; proper party 1990 No 13: D and G, age 20 and 19, respectively, and both single, eloped and got married to each other without parental consent in the case of G, a teenaged student of an exclusive college for girls. Three years later, her parents wanted to seek judicial annulment on that ground. You were consulted and asked to prepare the proper complaint. What advice would you give G's parents? Explain your answer. Answer: G himself should file the complaint under Article 45 of the Family Code, and no longer the parents because G is already 22 years of age. 02; Family Code; annulment; psychological incapacity 1996 No. 3: On April 15, 1983, Jose, an engineer, and Marina, a nurse, were married to each other in a civil ceremony in Boac. Marinduque. Six months after their marriage, Jose was employed in an oil refinery in Saudi Arabia for a period of three years. When he returned to the Philippines. Marina was no longer living in their house, but In Zamboanga City, working in a hospital. He asked her to come home, but she refused to do so, unless he agreed not to work overseas anymore because she cannot stand living alone. He could not agree as in fact, he had signed another three year contract. When he returned In 1989, he could not locate Marina anymore. In 1992. Jose filed an action served by publication Ina newspaper of general circulation. Marina did not file any answer, A possible collusion between the parties was ruled out by the Public Prosecutor. Trial was conducted* and Marina neither appeared nor presented evidence In her favor. If you were the judge, will you grant the annulment. Explain. Answer: As judge, I will not grant the annulment. The facts do not show any taint of personality disorder on the part of the wife Marina so as to lend substance to her husband's averment of psychological Incapacity within the meaning of Art 36 of the Family Code. In Santos vs. CA (240 SCRA 20), this particular ground for nullity of marriage was held to be limited only to the most serious cases of personality disorders (dearly demonstrative of utter sensitivity or inability to give meaning and significance to the marriage. Marina's refusal to come home to her husband unless he agreed not to work overseas, far from being indicative of an insensitivity to the meaning of marriage, or of a personality disorder, actually shows a sensitive awareness on her part of the marital duty to live together as husband and wife. Mere refusal to rejoin her husband when he did not accept the condition imposed by her does not furnish any basis for concluding that she was suffering from psychological Incapacity to discharge the essential marital obligations. Mere intention to live apart does not fall under Art. 36, FC. Furthermore, there is no proof that the alleged psychological incapacity existed at the time of the marriage. 02; Family Code; art. 26 1999 No IV. Page 64 of 391 Ben and Eva were both Filipino citizens at the time of their marriage in 1967, When their marriage turned sour, Ben went to a small country in Europe, got himself naturalized there, and then divorced Eva in accordance with the law of that country, Later, he returned to the Philippines with his new wife. Eva now wants to know what action or actions she can file against Ben. She also wants to know if she can likewise marry again. What advice can you give her? {5%) ANSWER: Considering that Art. 26(2nd par.) contemplates a divorce between a foreigner and a Filipino, who had such respective nationalities at the time of their marriage, the divorce in Europe will not capacitate the Filipino wife to remarry. The advice we can give her is either to file a petition for legal separation, on the ground of sexual infidelity and of contracting a bigamous marriage abroad, or to file a petition to dissolve the conjugal partnership or absolute community of property as the case maybe. ALTERNATIVE ANSWER: Eva may file an action for legal separation on the grounds of sexual infidelity of her husband and the contracting by her husband of a bigamous marriage abroad. She may remarry. While a strict interpretation of Article 26 of the Family Code would capacitate a Filipino spouse to remarry only when the other spouse was a foreigner at the time of the marriage, the DOJ has issued an opinion (Opinion 134 s. of 1993) that the same injustice sought to be cured by Article 26 is present in the case of spouses who were both Filipino at the time of the marriage but one became an alien subsequently. Said injustice is the anomaly of Eva remaining married to her husband who is no longer married to her. Hence, said Opinion makes Article 26 applicable to her case and the divorce obtained abroad by her former Filipino husband would capacitate her to remarry. To contract a subsequent marriage, all she needs to do is present to the civil registrar the decree of divorce when she applies for a marriage license under Article 13 of the Family Code. 02; Family Code; art. 26 1996 No. 5: 1) Flor and Virgillo were married to each other in Roxas City in 198O. In 1984, Flor was offered a teaching Job in Canada, which she accepted. In 1989, she applied for and was granted Canadian citizenship. The following year, she sued for divorce from Virgilio in a Canadian court. After Virgilio was served with summons, the Canadian court tried the case and decreed the divorce. Shortly thereafter, Flor married a Canadian. Can Virgilio marry again in the Philippines? Explain. Answer; No, Virgilio cannot validly remarry. His case is not covered by Article 26 of the Family Code, For said Article to be applicable, the spouse who filed for divorce must be a foreigner at the time of the marriage. Since both of them were Filipinos at the time of the marriage, the divorce obtained by Flor did not capacitate Virgilio to remarry. The fact that Flor was already an alien at the time she obtained the divorce does not give Virgilio the capacity to remarry under Philippine Law. Alternative Answers; a) Yes, Virgilio can validly remarry. Art. 26 of the FC, merely States the alien spouse without taking into consideration his or her nationality at the time of the marriage. While his case is not covered by the letter of Article 26 FC, it is, however, covered by the spirit of said Article, The injustice to the Filipino spouse sought to be Page 65 of 391 cured by said Article Is present in this case. (Department of Justice Opinion No. 134 Series of 1993). b) Although the marriage originally involved Filipino citizens, it eventually became a marriage between an alien and a Filipino after Flor became a Canadian citizen. Thus, the divorce decree was one obtained by an alien spouse married to a Filipino. Although nothing is said about whether such divorce did capacitate Flor to remarry, that fact may as well be assumed since the problem states that she married a Canadian shortly after obtaining the divorce. Hence, Virgillo can marry again under Philippine law, pursuant to Art. 26. FC which applies because Flor was already an alien at the time of the divorce. 02; Family Code; declaration of nullity: annulment: legal separation: separation of property – grounds 2003 No VI Which of the following remedies, i.e., (a) declaration of nullity of marriage, (b) annulment of marriage, (c) legal separation, and/or (d) separation of property, can an aggrieved spouse avail himself/herself of(i) If the wife discovers after the marriage that her husband has “AIDS”. (ii) If the wife goes (to) abroad to work as a nurse and refuses to come home after the expiration of her three-year contract there. (iii) If the husband discovers after the marriage that his wife has been a prostitute before they got married. (iv) If the husband has a serious affair with his secretary and refuses to stop notwithstanding advice from relatives and friends. (v) If the husband beats up his wife every time he comes home drunk. 5% SUGGESTED ANSWER: (i) Since AIDS is a serious and incurable sexually-transmissible disease, the wife may file an action for annulment of the marriage on this ground whether such fact was concealed or not from the wife, provided that the disease was present at the time of the marriage. The marriage is voidable even though the husband was not aware that he had the disease at the time of marriage. (ii) If the wife refuses to come home for three (3) months from the expiration of her contract, she is presumed to have abandoned the husband and he may file an action for judicial separation of property. If the refusal continues for more than one year from the expiration of her contract, the husband may file the action for legal separation under Art. 55 (10) of the Family Code on the ground of abandonment of petitioner by respondent without justifiable cause for more than one year. The wife is deemed to have abandoned the husband when she leaves the conjugal dwelling without any intention of returning (Article 101, FC). The intention not to return cannot be presumed during the 30year period of her contract. (iii) If the husband discovers after the marriage that his wife was a prostitute before they got married, he has no remedy. No misrepresentation or deceit as to character, health, rank, fortune or chastity shall constitute fraud as legal ground for an action for the annulment of marriage (Article 46 FC). (iv) The wife may file an action for legal separation. The husband’s sexual infidelity is a ground for legal separation 9Article 55, FC). She may also file an action for judicial separation of property for failure of her husband to comply with his martial duty of fidelity (Article 135 (4), 101, FC). Page 66 of 391 (v) The wife may file an action for legal separation on the ground of repeated physical violence on her person (Article 55 (1), FC). She may also file an action for judicial separation of property for failure of the husband to comply with his marital duty of mutual respect (Article 135 (4), Article 101, FC). She may also file an action for declaration of nullity of the marriage if the husband’s behavior constitute psychological incapacity existing at the time of the celebration of marriage. 02; Family Code; divorce; void marriages 1992 No 1: In 1989, Maris, a Filipino citizen, married her boss Johnson, an American citizen, In Tokyo in a wedding ceremony celebrated according to Japanese laws. One year later, Johnson returned to his native Nevada, and he validly obtained in that state an absolute divorce from his wife Maris. After Maris received the final judgment of divorce, she married her childhood sweetheart Pedro, also a Filipino citizen, in a religious ceremony in Cebu City, celebrated according to the formalities of Philippine law. Pedro later left for the United States and became naturalized as an American citizen. Maris followed Pedro to the United States, and after a serious quarrel, Marts filed a suit and obtained a divorce decree issued by the court in the state of Maryland. Maris then returned to the Philippines and in a civil ceremony celebrated in Cebu City according to the formalities of Philippine law, she married her former classmate Vincent likewise a Filipino citizen. b) Was the marriage of Maris and Pedro valid when celebrated? Is their marriage still valid existing now? Reasons. c) Was the marriage of Marts and Vincent valid when celebrated? Is their marriage still validly existing now? Reasons. d) At this point in time, who is the lawful husband of Marts? Reasons. Answer: (b) The marriage of Maris and Pedro was valid when celebrated because the divorce validly obtained by Johnson in Manila capacitated Maris to marry Pedro. The marriage of Maris and Pedro is still validly existing, because the marriage has not been validly dissolved by the Maryland divorce [Art. 26, Family Code). (c) The marriage of Maris and Vincent is void ab initio because it is a bigamous marriage contracted by Maris during the subsistence of her marriage with Pedro (Art 25 and 41, Family Code). The marriage of Maris and Vincent does not validly exist because Article 26 does not apply. Pedro was not a foreigner at the time of his marriage with marts and the divorce abroad (in Maryland) was initiated and obtained not by the alien spouse, but by the Filipino spouse. Hence, the Maryland divorce did not capacitate Marts to marry Vincent. (d) At this point in time, Pedro is still the lawful husband of Maris because their valid marriage has not been dissolved by any valid cause (Art. 26. Family Code), 02; Family Code; donations by reason of marriage; effect of declaration of nullity 1996 No. 6: 1) On the occasion of Digna's marriage to George, her father gave her a donation propter nuptias of a car. Subsequently, the marriage was annulled because of the psychological immaturity of George. Page 67 of 391 May Digna's father revoke the donation and get back the car? Explain, Answer: No, Digna's father may not revoke the donation because Digna was not in bad faith, applying Art. 86(3) of the Family Code. Alternative Answer; a) Yes, the donation is revocable. Since the ground for the annulment of the marriage is the psychological immaturity of George, the judgment was in the nature of a declaration of nullity under Art. 36 of the FC and, therefore, the donation may be revoked under Art. 86( 1) of the FC for the reason that the marriage has been judicially declared void ab initio. b) No, the donation cannot be revoked. The law provides that a donation by reason of marriage may be revoked by the donor if. among other cases, the marriage is judicially declared void ab initio [par. (1) Art. 86. Family Code], or when the marriage is annulled and the donee acted in bad faith [par. (3), Id.]. Since the problem states that the marriage was annulled and there is no intimation of bad faith on the part of the donee Digna. the conclusion is that the donor cannot revoke the donation. c) Yes, the donation can be revoked. The ground used in dissolving the marriage was the psychological immaturity of George, which is not a ground for annulment of marriage. If this term is equated with psychological Incapacity as used In Art. 36 of the Family Code, then it is a ground for declaration of nullity of the marriage. Consequently, par. (1) of Art. 86, FC, is the applicable law. Since Art. 86 of the FC makes no qualification as to who furnished the ground or who was in bad faith in connection with the nullification of the marriage, the conclusion is that Digna's father may revoke the donation and get back the car. 02; Family Code; effect of divorce; void marriages 1980 No. II (b) "E" and "F", Filipino citizens, were married in the Philippines. Later, they separated. "E", the husband, went to San Francisco, California, to live there permanently. He obtained a divorce in California from "F" on grounds of desertion and mental cruelty. Thereafter, he married "G", a Filipina, who did not know that "E" was previously married. "E" and "G" had two children "H" and "I". They came back to the Philippines where "E" died. Discuss (1) the validity of the divorce obtained by '"E" in California; (2) the validity of the marriage of "E" to "G"; and (3) the legal status of "H" and "I". Answer (b) 1. The decree of absolute divorce obtained by "'E" in California is not valid in the Philippines for the following reasons: (a) Absolute divorce is not recognized in the Philippines. According to the Civil Code, laws resulting to family rights and duties, or to the status, condition, and legal capacity of persons are binding upon citizens of the Philippines, even though living abroad (Art. 15). (b) Well-settled is the rule that absolute divorce is contrary to public policy. According to the Civil Code, this declaration of public policy cannot be rendered nugatory by the decree of absolute divorce obtained by "E" in California (Art. 17, par. 3). Page 68 of 391 2. The marriage of "E" to "G" is not valid. It is void from the very beginning by reason of a prior subsisting marriage (Art. 83, par. l Civil Code), From the point of view of Philippine law, since the decree of absolute divorce obtained by "E" in California is not valid, he is still married to "F". 3. "H" and "I" are natural children by legal fiction. The reason is that they are children born of a marriage which is void (Art. 89, Civil Code). 02; Family Code; emancipation 1993 No. 15: Julio and Lea, both 18 years old, were sweethearts. At a party at the house of a mutual friend. Lea met Jake, also 18 years old, who showed interest in her. Lea seemed to entertain Jake because she danced with him many times. In a fit of jealousy. Julio shot Jake with his father's 38 caliber revolver which, before going to the party he was able to get from the unlocked drawer Inside his father's bedroom. Jake died as a result of the lone gunshot wound he sustained. His parents sued Julio's parents for damages arising from quasi-delict. At the time of the incident, Julio was 18 years old living with his parents. Julio's parents moved to dismiss the complaint against them claiming that since Julio was already of majority age, they were no longer liable for his acts. 1) Should the motion to dismiss be granted? Why? 2) answer. What is the liability of Julio's parents to Jake's parents? Explain your Answer: 1) No, the Motion to Dismiss should not be granted. Article 236 of the Family Code as amended by Republic Act 6809, provides in the third paragraph that "nothing in this Code shall be construed to derogate from the duty or responsibility of parents and guardians for children and wards below twenty-one years of age mentioned in the second and third paragraphs of Article 2180 of the Civil Code". 2) The liability of Julio's parents to Jake's parents arises from quasi-delict (Arts. 2176 and 2180 Civil Code) and shall cover specifically the following: a) P50,000.00 for the death of the son; b) such amount as would correspond to lost earning capacity; and c) moral damages. 02; Family Code; family 1991 No 1: A. How does the 1987 Constitution strengthen the family as an Institution? B. Do the Constitutional policy on the family and the provision that marriage is the foundation of the family and shall be protected by the State bar Congress from enacting a law allowing divorce in the Philippines? Answer: A. Sec, 2, Article II of the Constitution provides that: The State recognizes the sanctity of family life and shall protect and strengthen the family as a basic autonomous social institution. It shall equally protect the life of the mother and the life of the unborn from conception. The natural and primary right and duty of parents in the rearing of the youth for civic efficiency and the development of moral character shall receive the support of the Government. Section I, Article XV, further provides that: Page 69 of 391 The State recognizes the Filipino family as the foundation of the nation. Accordingly, it shall strengthen its solidarity and actively promote its total development. (Note: The Committee recommends that a citation of either one of the provisions be credited as a complete answer). Answer; B, No, the Constitutional policy, as well as the supporting provision, does not amount to a prohibition to Congress to enact a law on divorce. The Constitution only meant to help the marriage endure, to "strengthen its solidarity and actively promote its total development." Alternative Answer; B. Yes. Congress is barred from enacting a law allowing divorce, since Section 2 of Article XV provides: "Sec. 2. Marriage, as an inviolable social institution, is the foundation of the family and shall be protected by the State." Since marriage is "Inviolable", it cannot be dissolved by an absolute divorce. 02; Family Code; family home 1989 No. 4: (2) What is "Family Home" and when is it deemed constituted? Who are the beneficiaries thereof? Answer: The "Family Home" is the dwelling house where the husband, the wife, and their family including the unmarried head of the family reside and the land on which it is situated. The "Family Home" is deemed constituted on a house and lot from the time it is occupied as a family residence. The beneficiaries of a family home are: (1) The husband and wife, or an unmarried person who is the head of a family; and (2) Their parents, ascendants, descendants, brothers and sisters, whether the relationship be legitimate or illegitimate, who are living in the family home and who depend upon the head of the family for legal support. 02; Family Code; family home 1994 No. 13: In 1991, Victor established judicially out of conjugal property, a family home in Manila worth P200.000.00 and extrajudicially a second family home in Tagaytay worth P50.000.00. Victor leased the family home in Manila to a foreigner. Victor and his family transferred to another house of his in Pasig. Can the two family homes be the subject of execution on a judgment against Victor's wife for non-payment of the purchase in 1992 of household appliances? Answer; The two (2) so-called family homes can be the subject of execution. Neither of the abodes are considered family homes because for purposes of availing the benefits under the Family Code, there can only be one (1) family home which is defined as the "dwelling house" where the husband and the wife and their family Page 70 of 391 actually "reside" and the land on which it is situated. (Arts. 152 and 161, Family Code) 02; Family Code; legal separation 2002 No II. C. If drug addiction, habitual alcoholism, lesbianism or homosexuality should occur only the marriage, would this constitute grounds for a declaration of nullity or for legal separation, or would they render the marriage voidable? (1%). SUGGESTED ANSWER: C. In accordance with law, if drug addiction, habitual alcoholism, lesbianism or homosexuality should occur only during the marriage, they: 1. Will not constitute as ground for declaration of nullity (Art. 36, Family 2. Will constitute as grounds for legal separation (Art. 56, FC) and Code); 3. will not constitute as grounds to render the marriage voidable (Art.45and 46, FC) 02; Family Code; legal separation 1989 No. 4: {1} Cadio and Corona contracted marriage on June 1, 1982. A few days after the marriage, Corona discovered that Cadio was a homosexual. As homosexuality was not a ground for legal separation under the Civil Code, there was nothing that Corona could do but bear with her problem. The couple, however, stated to live separately. With the enactment of the Family Code, Corona decided to be legally separated from Cadio based on the new ground of homosexuality. Corona brought her action for legal separation on September 15, 1988. Will the action prosper? Give your reasons. Answer: Yes, the action will prosper because the "cause" arose only on August 3, 1988, the effectivity of the Family Code and the action had not yet prescribed. Alternative Answer: The action will prosper. The offense of homosexuality as a continuing offense can be a ground for legal separation. The prescriptive period of five years will apply only when the offense has a fixed period of time and, therefore, the date of its occurrence can be computed. 02; Family Code; legal separation; grounds 1975 No. V What are the grounds for legal separation? Answer Under Article 97 of the Civil Code, a petition for legal separation may be filed: (1) For adultery on the part of the wife and for concubinage on the part of the husband as defined in the Penal Code; and (2) An attempt by one spouse against the life of the other. 02; Family Code; legal separation; grounds; prescriptive period 1994 No 12; Page 71 of 391 Rosa and Ariel were married in the Catholic Church of Tarlac, Tarlac on January 5. 1988. In 1990, Ariel went to Saudi Arabia to work. There, after being converted into Islam, Ariel married Mystica, Rosa learned of the second marriage of Ariel on January 1, 1992 when Ariel returned to the Philippines with Mystica. Rosa filed an action for legal separation on February 5, 1994, 1) Does Rosa have legal grounds to ask for legal separation? 2) Has the action prescribed? Alternative Answers; 1) a) Yes, the abandonment of Rosa by Ariel for more than one (1) year is a ground for legal separation unless upon returning to the Philippines, Rosa agrees to cohabit with Ariel which is allowed under the Muslim Code. In this case, there is condonation. b) Yes. The contracting of a subsequent bigamous marriage whether in the Philippines or abroad is a ground for legal separation under Article 55(7) of the Family Code. Whether the second marriage is valid or not, Ariel having converted into Islam, is immaterial. 2) No. Under Article 57 of the Family Code, the aggrieved spouse must file the action within five (5) years from the occurrence of the cause. The subsequent marriage of Ariel could not have occurred earlier than 1990, the time he went to Saudi Arabia. Hence, Rosa has until 1995 to bring the action under the Family Code. 02; Family Code; legal separation; proper party 1979 No. III PB, a good for nothing gigolo, married RH, a rich old maid who inherited considerable properties from both her deceased parents. Even after the marriage, PB continued his philandering ways. When RH caught him having scandalous relations with another woman, they had a terrible quarrel, so RH filed an action for legal separation. After the evidence for both parties have already been submitted but before the court had rendered a decision, RH died in an automobile accident leaving no heirs but her husband and another spinster sister. PB then moved for the dismissal of the action so the only sister of RH filed an opposition thereto and prayed that she be substituted for RH contending that if the action were to be dismissed, PB would be able to inherit a sizeable sum from the estate of the deceased. Should the opposition and prayer for substitution be sustained? Answer The opposition and prayer for substitution cannot be sustained. An action for legal separation which involves nothing more than the bed-and-board separation of the spouses is purely personal. The Civil Code recognizes this. Being personal in character it follows that the death of a party to the action causes the death of the action. Even if the action involves property rights, the abatement will still apply. A review of the effects of legal separation and the corresponding rights thereunder shows that they are solely the effects of legal separation; hence, they cannot survive the death of the plaintiff if it occurs prior to the decree. (Lapuz Sy vs. Eugemio, 43 SCRA 1771), 02; Family Code; nullity; annulment; legal separation; grounds 1997 No. 5; Page 72 of 391 Under what conditions, respectively, may drug addiction be a ground, if at all, (a) for a declaration of nullity of marriage, (b) for an annulment of the marriage contract, and (c) for legal separation between the spouses? Answer: (a) Declaration of nullity of marriage: 1. The drug addiction must amount to psychological incapacity to comply with the essential obligations of marriage; 2. incurable: It must be antecedent (existing at the time of marriage),, grave and 3. The case must be filed before August 1. 1998. Because if they got married before August 3, 1998, it must be filed before August 1, 1998. (b) Annulment of the Marriage Contract: 1. The drug addiction must be concealed; 2. It must exist at the time of marriage; 3. There should be no cohabitation with full knowledge of the drug addiction; 4. The case is filed within five (5) years from discovery. (c) Legal Separation; 1. There should be no condonation or consent to the drug addiction; 2. The action must be filed within five (5) years from the occurrence of the cause. 3. Drug addiction arises during the marriage and not at the time of marriage. 02; Family Code; parental authority 2004 No. II A. Distinguish briefly but clearly between: 2. Substitute parental authority and special parental authority. 02; Family Code; parental authority; custody 1979 No. I Boy and Girlie were married when "both were barely 20 years old, Boy being then merely a student, while Girlie worked as a clerk in a business firm. They lived with Boy's parents. Boy stopped schooling so he did not finish college and did not have any job, but had tried but failed in all kinds of business. On the contrary he incurred huge gambling debts. Girlie on the other hand had been continuously promoted and rose to become executive secretary of the company where she worked, receiving P5,000.00 a month salary. They begot one son to whom Boy's parents became very attached. When the child was 6 years old, Boy's parents brought the child with them to Baguio for the summer vacation. At this time, because of the suspicious conduct of Girlie, Boy accused her of having an affair with another man so they had a terrible quarrel. Girlie therefore went to live with her own parents. After Boy's parents returned from Baguio with the child, Girlie went to fetch him but Boy and his parents refused to surrender the child to her, saying that she is unfit to have custody of the child because of her affair with another man. After serious efforts for an amicable settlement failed, Girlie filed an action for custody of the child. Will her action prosper? Why? Answer Girlie's action will prosper. True, the child is already six years old, and therefore, the principle of custodial preference for the mother is not applicable. Page 73 of 391 According to the law, this principle is applicable only to children under five years of age (Child and Youth Welfare Code), But then, in cases involving custody of children, the welfare or interest of the child is always paramount. With this as criterion, the custody of the child should be awarded to the more suitable parent. Morally and materially, Girlie has a definite edge over her husband Boy. She is selfreliant. She had been continuously promoted and rose to become secretary of the company where she works, and is now receiving P5,000.00 a month salary. That she is having an affair with another man is baseless. There is no evidence which will support it. Boy, on the other hand, is not a suitable guardian of his child. He is addicted to gambling; he has no job; obviously, he has no character to speak of. True, the parents of Boy are attached to the child, but if custody is awarded to Boy, it will be Boy and not his parents who will exercise parental authority over the person and property of the child. Alternative Answer Assuming that Girlie is having an affair with another man and that this can be established by competent evidence, it is submitted that Girlie's action will not prosper. It must be observed that the child is already six years old. Therefore, he can be separated from his mother. Under the Child and Youth Welfare Code, the principle of custodial preference for the mother is applicable only to children under five years of age. Hence the paramount criterion to consider is the welfare of the child. True, Boy is a gambler and has no job. But his parents who are well-to-do and are attached to the child can supply the deficiency. Besides, Boy is still young. He can still reform; he can still find a job. Furthermore, as between a father who is a gambler and a mother who is immoral, preference should be given to the former. 02; Family Code; parental authority; custody 1981 No. 4: Spouses, husband "H" and wife "W", Filipinos, with a child, decided that "H", a doctor, would go to the U.S. to find employment there and then "W" would join him. When in the U.S., "H" wrote that to establish U.S. residence, he would have to obtain a divorce, marry an American girl, and once a U.S. resident, divorce his American wife and then remarry "W" "W" agreed. Four years later, "H", now a U.S. resident and having divorced his American wife, returns to the Philippines and finds that his wife, "W", has married a wealthy man in a ceremony celebrated in Hongkong and is happily living with him in Manila. c) Could "H" obtain custody of the child? d) Could "H" charge "W" with bigamy or adultery? Explain each of your answers? Answer (c) If the child is under five years old, "H" cannot obtain custody over him. According to the law, no child under five years of age shall be separated from the mother unless the court finds compelling reasons to do so. ."Compelling reasons" refer to reasons of health rather than reasons of morality. However, if the child is already five years old or over, then it is the best interest of the child that will be considered, taking into account the respective resources and the social and moral situations of the contending parents. (Note: The above answer is based on Art. 17, par. 3 PD 603 and on decided cases, notably Unson vs. Navarro, L-52242, Nov. 17,1980.) (d) "H" can charge "W" with adultery but not with bigamy. Undoubtedly, all of the elements of adultery as deemed and punished in the Revised Penal Code are Page 74 of 391 present. It is different in the case of bigamy. Since the bigamy was committed outside of our territorial jurisdiction, it is not triable by our courts. (Note: The above answer is based on the Revised Penal Code, especially Art. 2 of said Code. See also, Salonga's Private International Law and Paras' Conflict of Laws.) 02; Family Code; parental authority; rescission of adoption 1994 No, 7: In 1975, Carol begot a daughter Bing, out of wedlock. When Bing was ten years old, Carol gave her consent for Bing's legal adoption by Norma and Manuel, which was granted by the court in 1990. In 1991, Carol learned that Norma and Manuel were engaged in a call-girl-ring that catered to tourists. Some of the girls lived with Norma and Manuel. Carol got Bing back, who in the first place wanted to return to her natural mother. 1) Who has a better right to the custody of Bing. Carol or Norma? 2) Aside from taking physical custody of Bing, what legal actions can Carol take to protect Bing? Alternative Answers; 1) a) It depends on whether or not Bing was at least 18 years old at the time Carol asserts the prerogative to take custody of Bing. If she was at least 18 years old. then she is no longer under parental authority and neither Carol nor Norma can assert the prerogative to take custody. However, if she was less than 18 years old, then Norma has a better right since the adoption by Norma of Bing terminates the parental authority of Carol over Bing. b) The natural mother, Carol, should have the better right in light of the principle that the child's welfare is the paramount consideration in custody rights. Obviously, Bing's continued stay in her adopting parents' house, where interaction with the call girls is inevitable, would be detrimental to her moral and spiritual development. This could be the reason for Bing's expressed desire to return to her natural mother. It should be noted, however, that Bing is no longer a minor, being 19 years of age now. It is doubtfu1 that a court can still resolve the question of custody over one who is sui juris and not otherwise incapacitated. 2) a) On the assumption that Bing is still a minor or otherwise incapacitated, Carol may petition the proper court for resolution or rescission of the decree of adoption on the ground that the adopting parents have exposed, or are exposing, the child to corrupt influence, tantamount to giving her corrupting orders or examples. She can also ask for the revesting in her of parental authority over Bing. If. however. Bing Is already 19 years of age and therefore no longer a minor, it is not Carol but Bing herself who can petition the court for judicial rescission of the adoption, provided she can show a ground for disinheritance of an ascendant. b) Carol may file an action to deprive Norma of parental authority under Article 231 of the Family Code or file an action for the rescission of the adoption under Article 191 in relation to Article 231 (2) of the Family Code. 02; Family Code; paternity and filiation 1999 No VI. (a) Two (2) months after the death of her husband who was shot by unknown criminal elements on his way home from office,( Rose married her childhood boyfriend, and seven (7) months after said marriage, she delivered a baby. In the absence of any evidence from Rose as to who is her child's father, what status does the law give to said child? Explain. (2%) Page 75 of 391 (b) Nestor is the illegitimate son of Dr. Perez. When Dr. Perez died, Nestor intervened in the settlement of his father's estate, claiming that he is the illegitimate son of said deceased, but the legitimate family of Dr. Perez is denying Nestor's claim. What evidence or evidences should Nestor present so that he may receive his rightful share in his father's estate? (3%) ANSWER: (a) The child is legitimate of the second marriage under Article 168(2) of the Family Code which provides that a "child born after one hundred eighty days following the celebration of the subsequent marriage is considered to have been conceived during such marriage, even though It be born within three hundred days after the termination of the former marriage." (b) To be able to inherit, the illegitimate filiation of Nestor must have been admitted by his father In any of the following: (1) the record of birth appearing in the civil register, (2) a final judgment, (3) a public document signed by the father, or (4) a private handwritten document signed by the lather (Article 17S in relation to Article 172 of the Family Code). 02; Family Code; paternity and filiation 2004 No. III A. RN and DM, without any impediment to marry each other, had been living together without benefit of church blessings. Their common-law union resulted in the birth of ZMN. Two years later, they got married in a civil ceremony. Could ZMN be legitimated? Reason. (5%) 02; Family Code; paternity and filiation 1989 No. 5: (1) What are the grounds for impugning the legitimacy of a child? Answer: Legitimacy of a child may be impugned only on the following grounds: (1) That it was physically impossible for the husband to have sexual intercourse with his wife within the first 120 days of the 300 days which immediately preceded the birth of the child because of: (a) his wife; the physical incapacity of the husband to have sexual intercourse with (b) the fact that the husband and wife were living separately in such a way that sexual intercourse was not possible; or (c) serious illness of the husband, intercourse: which absolutely prevented sexual (2) That it is proved that for biological or other scientific reasons, the child could not have been that of the husband, except in the instance provided in the second paragraph of Art. 164; or (3) That in case of children conceived through artificial insemination, the written authorization or ratification of either parent was obtained through mistake, fraud, violence, Intimidation, or undue influence. {4) Felix, a Filipino doctor of medicine, married Monique, an Italian nurse, in 1985. It was later discovered that Monique cannot bear a child so that the couple decided to adopt one. Can they jointly adopt Marie, the 19-year old niece of Monique? Explain. Answer: Page 76 of 391 Since the child to be adopted is an Italian citizen, the joint adoption cannot be effected. Had the child been a relative by consanguinity of the Filipino spouse, the adoption would have been valid under the Philippine law. 02; Family Code; paternity and filiation 1995 No. 7: Abraham died intestate on 7 January 1994 survived by his son Braulio. Abraham's older son Carlos died on 14 February 1990. Danilo who claims to be an adulterous child of Carlos intervenes in the proceedings for the settlement of the estate of Abraham in representation of Carlos. Danilo was legally adopted on 17 March 1970 by Carlos with the consent of the " latter's wife. 1. Explain. Under the Family Code, how may an illegitimate filiation be proved? 2. Explain. As lawyer for Danilo, do you have to prove Danilo's illegitimate filiation? 3. Explain. Can Danilo inherit from Abraham in representation of his father Carlos? Answer: 1. Under Art. 172 in relation to Art. 173andArt. 175 of the FC, the filiation of illegitimate children may be established in the same way and by the same evidence as legitimate children. Art. 172 provides that the filiation of legitimate children is established by any of the following: (1) the record of birth appearing in the civil register or a final Judgment; or (2) an admission of legitimate filiation in a public document or a private handwritten instrument and signed by the parent concerned. In the absence of the foregoing evidence, the legitimate filiation shall be proved by: (1) the open and continuous possession of the status of a legitimate child; or (2) any other means allowed by the Rules of Court and special laws. 2. No. Since Danilo has already been adopted by Carlos, he ceased to be an illegitimate child. An adopted child acquires all the rights of a legitimate child under Art, 189 of the FC. 3. No, he cannot. Danilo cannot represent Carlos as the latter's adopted child in the inheritance of Abraham because adoption did not make Danilo a legitimate grandchild of Abraham. Adoption is personal between Carlos and Danilo. He cannot also represent Carlos as the latter's illegitimate child because in such case he is barred by Art. 992 of the NCC from inheriting from his illegitimate grandfather Abraham. Alternative Answer; An adopted child's successional rights do not include the right to represent his deceased adopter in the inheritance of the latter's legitimate parent, in view of Art. 973 which provides that in order that representation may take place, the representative must himself be capable of succeeding the decedent. Adoption by itself did not render Danilo an heir of the adopter's legitimate parent. Neither does his being a grandchild of Abraham render him an heir of the latter because as an illegitimate child of Carlos, who was a legitimate child of Abraham, Danilo is Incapable of succeeding Abraham under Art. 992 of the Code. 02; Family Code; paternity and filiation 1979 No. IV Page 77 of 391 SL, a widower, died intestate leaving a big estate. In due course, his only legitimate son, BL, executed an affidavit extrajudicially adjudicating unto himself title to all the properties of the estate on the basis of which the properties were registered in his name. CL, claiming to be an acknowledged natural child, filed an action demanding for a share of the properties. As proof of her claim of being an acknowledged natural child, she presented her marriage contract when she was married at the age of 16, wherein it is stated that her father, SL, had given his consent to said marriage. Will her action prosper? Why? Answer CL's action will not prosper. Under the Civil Code, voluntary recognition is effected either by the record of birth, or by a will or by a statement before a court of record, or by means of any authentic writing. By authentic writing, the law refers to any genuine instrument, whether public or private, written in the handwriting of the maker or duly signed by the maker in his handwriting Obviously, in this sense, a marriage contract is not an authentic writing within the meaning of the law. Therefore, CL is not an acknowledged natural child of SL. It would be different if she had presented as additional evidence of her status the written consent of SL to her marriage. That would have been sufficient to establish the fact of voluntary recognition effected by means of an authentic writing. Her action in such a case will then prosper. 02; Family Code; paternity and filiation 1982 No. 2 "A" and "B", man and woman not related to each other, both single and of age, had an illicit relation. A child "C" was born out of that relation. Subsequently "A" married "X". Notwithstanding the marriage, "A" and "B" continued their illicit relation, and two years later, another child "D" was born to them. After the death of "X", "A" married "B". (a) What is the legal status of the children "C" and "D"? (b) After the marriage, "A" and "B" recognized "C" and "D". What effect has such recognition on the legal status of "C" and "D"? Reasons. Answer (a) "C" is a natural child, while "D" is an illegitimate child not natural (spurious child). According to the Civil Code, children born outside wedlock of parents, who, at the time of the conception of the former, were not disqualified by any impediment to marry each other are natural. It is clear that "C" falls within the purview of this definition. However, in the case of "D", it is different. Since he was conceived at a time when his father "A" was already married to "X", he is clearly an adulterous child. He is, therefore, an illegitimate child not natural (spurious child). (Note: The above answer is based on Arts. 269 and 287 of the Civil Code. The Committee respectfully recommends that if the bar candidate attacks the problem from the point of view of the two requisites which must be present in order that child shall be considered as a natural child, it should be considered a correct answer.) (b) "C" is now promoted to the category of a legitimated child. "D", on the other hand, is still an illegitimate child not natural (spurious child). All of the requisites of legitimation are present in the case of "C". In the first place, he is a natural child; in the second place, there was a .subsequent marriage of the parents to each other; and in the third place, he was recognized by both of his Page 78 of 391 parents as their child after the celebration of their marriage. Consequently, he is now a legitimated child. However, in the case of "D", being a spurious, and not a natural, child, he can never be legitimated. Consequently, he is still an illegitimate child not natural (spurious child). (Note: The above answer is based on Arts, 269, 270 and 271 of the Civil Code.) 02; Family Code; paternity and filiation 1983 No. 3 Out of the illicit relations between A, a married man, and B, an unmarried woman, a child, C, was born two months before the death of A's wife. A month after his wife's death, A married B. What is C's status? Why? Answer C is a spurious child, its parents being incapable of marrying each other at the time of its conception. Their subsequent marriage cannot, therefore, legitimize C. 02; Family Code; paternity and filiation 1985 No. 2 A and B were married on January 1, 1980, Two weeks later, on their way home from honeymoon, the car A was driving turned turtle. A died instantly while B was unharmed. A month thereafter, B had illicit relations with C. On October 15, 1980, B gave birth to X. In X's birth certificate, B declared that X's father is C. Resolve the issue of X's paternity with reasons. Answers: 1. X is presumed to be the legitimate child of A because X was born after 180 days from the celebration of the marriage and within 300 days after the dissolution of the marriage due to the death of A. The declaration of B (the mother) has no legal effect 2. A child born after 180 days following the celebration of a marriage, and before 300 days following its dissolution, or the separation of the spouses, is quasiconclusively presumed to be legitimate. Against this presumption, no evidence shall be admitted other than that of the physical impossibility of the husband having access to his wife within the first 120 days (period of conception) of the 300 days which preceded the birth of the child. (Macadangdang vs. Court of Appeals, L40542, 12 Sept. 1980). This physical impossibility may be caused by— 1) The impotence of the husband; 2) The fact of the husband and wife living separately in such a way that access was not possible; or 3) The serious illness of the husband. (Art. 255, Civil Code). None of the above exclusionary instances are shown. Accordingly, X must be considered a legitimate child of A and B. 02; Family Code; paternity and filiation; rights of legitimate children 1990 No 8: Page 79 of 391 B and G (college students, both single and not disqualified to marry each other) had a romantic affair, G was seven months in the family way as of the graduation of B. Right after graduation B went home to Cebu City. Unknown to G, B had a commitment to C (his childhood sweetheart) to marry her after getting his college degree. Two weeks after B marriage In Cebu City, G gave birth to a son E in Metro Manila. After ten years of married life in Cebu, B became a widower by the sudden death of C in a plane crash. Out of the union of B and C, two children, X and Y were born. Unknown to CT while on weekend trips to Manila during the last 5 years of their marriage, B Invariably visited G and lived at her residence and as a result of which, they renewed their relationship. A baby girl F was born to B and G two years before the death of C. Bringing his family later to Manila, B finally married G. Recently. G died. What are the rights of B's four children: X and Y of his first marriage; and E and F, his children with G? Explain your answer. Answer: Under the facts stated, X and Y are legitimate children of B and G. E is the legitimate children of B and G. E is the legitimated child of B&G. F is the illegitimate child of B and C. As legitimate children of B and C, X and Y have the following rights: (1) To bear the surnames of the father and the mother, in conformity with the provisions of the Civil Code on Surnames; (2) To receive support from their parents, their ascendants, and in proper cases, their brothers and sisters, in-conformity with the provisions of the Family Code on Support; and (3) To be entitled to the legitime and other successional rights granted to them by the Civil Code. (Article 174, Family Code). E is the legitimated child of B and G. Under Art. 177 of the Family Code, only children conceived and born outside of wedlock of parents who, at the time of the conception of the former, were not disqualified by any impediment to marry each other may be legitimated. E will have the same rights as X and Y. F is the illegitimate child of B and G. F has the right to use the surname of G, her mother, and is entitled to support as well as the legitime consisting of 1/2 of that of each of X, Y and E. (Article 176, Family Code) 02; Family Code; presumptive legitime 1999 No V What do you understand by "presumptive legitime", in what case or cases must the parent deliver such legitime to the children, and what are the legal effects in each case if the parent fails to do so? (5%) ANSWER Presumptive legitime is not defined in the law. Its definition must have been taken from Act 2710, the Old Divorce Law, which required the delivery to the legitimate children of "the equivalent of what would have been due to them as their legal portion if said spouse had died intestate immediately after the dissolution of the community of property." As used in the Family Code, presumptive legitime is understood as the equivalent of the legitimate children's legitimes assuming that the spouses had died immediately after the dissolution of the community of property. Presumptive legitime is required to be delivered to the common children of the spouses when the marriage is annulled or declared void ab initio and possibly, when the conjugal partnership or absolute community is dissolved as in the case of Page 80 of 391 legal separation. Failure of the parents to deliver the presumptive legitime will make their subsequent marriage null and void under Article 53 of the Family Code. 02; Family Code; property regime of unions without marriage 1998 No V. In 1973. Mauricio, a Filipino pensioner of the U.S. Government, contracted a bigamous marriage with Erlinda, despite the fact that his first wife, Carol, was still living. In 1975. Mauricio and Erlinda jointly bought a parcel of riceland, with the title being placed Jointly in their names. Shortly thereafter, they purchased another property (a house and lot) which was placed in her name alone as the buyer. In 1981, Mauricio died, and Carol promptly filed an action against Erlinda to recover both the riceland and the house and lot, claiming them to be conjugal property of the first marriage. Erlinda contends that she and the late Mauricio were co-owners of the riceland; and with respect to the house and lot, she claims she is the exclusive owner. Assuming she fails to prove that she had actually used her own money in either purchase, how do you decide the case? [5%] Answer; Carol's action to recover both the riceland and the house and lot is wellfounded. Both are conjugal property, in view of the failure of Erlinda, the wife In a bigamous marriage, to prove that her own money was used In the purchases made. The Supreme Court In a case applied Art. 148. Family Code, despite the fact that the husband's death took place prior to the effectivity of said law. However, even under Art. 144, Civil Code, the same conclusion would have been reached in view of the bigamous nature of the second marriage. Another Answer: Under Article 148 of the Family Code, which applies to bigamous marriages, only the properties acquired by both parties through their actual joint contribution of money, property or industry shall be owned by them in common in proportion to their respective contributions. Moreover, if one of the parties is validly married to another, his share In the co-ownership shall accrue to the absolute community /conjugal partnership existing in such valid marriage. Thus, in this case, since Erlinda failed to prove that she used her own money to buy the riceland and house and lot, she cannot claim to be the co-owner of the riceland nor the exclusive owner of the house and lot. Such properties are Mauricio's. And since his share accrues to the conjugal partnership with Carol, Carol can validly claim such properties to the exclusion of Erlinda. (Art. 144, Civil Code). 02; Family Code; property regime of unions without marriage 2000 No II. For five years since 1989, Tony, a bank Vice-president, and Susan, an entertainer, lived together as husband and wife without the benefit of marriage although they were capacitated to many each other. Since Tony's salary was more than enough for their needs, Susan stopped working and merely "kept house". During that period, Tony was able to buy a lot and house in a plush subdivision. However, after five years, Tony and Susan decided to separate. a) ANSWER: Who will be entitled to the house and lot ? (3%) SUGGESTED Tony and Susan are entitled to the house and lot as co-owners in equal shares. Under Article 147 of the Family Code, when a man and a woman who are capacitated to marry each other lived exclusively with each other as husband and wife, the property acquired during their cohabitation are presumed to have been Page 81 of 391 obtained by their joint efforts, work or industry and shall be owned by them in equal shares. This is true even though the efforts of one of them consisted merely in his or her care and maintenance of the family and of the household. b) Would it make any difference if Tony could not marry Susan because he was previously married to Alice from whom he is legally separated? (2%) SUGGESTED ANSWER; Yes, it would make a difference. Under Article 148 of the Family Code, when the parties to the cohabitation could not marry each other because of an impediment, only those properties acquired by both of them through their actual joint contribution of money, property, or Industry shall be owned by them in common in proportion to their respective contributions. The efforts of one of the parties in maintaining the family and household are not considered adequate contribution in the acquisition of the properties. Since Susan did not contribute to the acquisition of the house and lot, she has no share therein. If Tony cohabited with Susan after his legal separation from Alice, the house and lot is his exclusive property. If he cohabited with Susan before his legal separation from Alice, the house and lot belongs to his community or partnership with Alice. 02; Family Code; property regime of unions without marriage 1992 No, 2: In 1989, Rico, then a widower forty (40) years of age, cohabited with Cora, a widow thirty (30) years of age. While living together, they acquired from their combined earnings a parcel of riceland. After Rico and Cora separated, Rico lived together with Mabel, a maiden sixteen (16) years of age. While living together. Rico was a salaried employee and Mabel kept house for Rico and did full-time household chores for him. During their cohabitation, a parcel of coconut land was acquired by Rico from his savings. After living together for one (1) year, Rico and Mabel separated. Rico then met and married Letty, a single woman twenty-six (26) years of age. During the marriage of Rico and Letty, Letty bought a mango orchard out of her own personal earnings. a) Who would own the riceland, and what property regime governs the ownership? Explain. b) Who would own the coconut land, and what property regime governs the ownership? Explain. c) Who would own the mango orchard, and what property regime governs the ownership? Explain. Answer: (a) Rico and Cora are the co-owners of the riceland. The regime is that of coownership (Art. 147, Family Code, first paragraph). (Optional Addendum: However, after Rico's marriage to Letty, the half interest of Rico in the riceland will then become absolute community property of Rico and Letty.) (b) Rico is the exclusive owner of the coconut land. The regime is a sole/single proprietorship (Art. 148. Family Code, first paragraph is applicable, and not Art. 147 Family Code). (Optional Addendum: However, after Rico's marriage to Letty, the coconut land of Rico will then become absolute community property of Rico and Letty.) Page 82 of 391 (c) Rico and Letty are the co-owners. The regime is the Absolute Community of Property (Arts, 75,90and9l, Family Code). 02; Family Code; property regime of unions without marriage 1978 No. II-b A and B lived together publicly as husband and wife for fifteen (15) years in a house in Bel Air Subdivision acquired during that time. A died intestate. His legitimate wife C and his two (2) legitimate children sought to include said house in the estate of the deceased. B objected on the ground that it was acquired during the period of their cohabitation. 1. What rules govern the relationship of A and B with regard to property acquired by them during the period of their cohabitation? 2. What conditions must be shown before B can claim any right over property acquired during that relationship? Answer 1. The relationship of A and B with regard to property acquired by either or both of them through their work or industry or their wages and salaries shall be governed by the rules on co-ownership. 2. B must show that she and A were living together as husband and wife without getting married; that the property was acquired by either or both of them through their work or industry or their wages and salaries during the period of her cohabitation with A; and that she and A had really contributed to the acquisition of the property. (NOTE: The above answers are based on Article 144 of the Civil Code and on Yaptinchay vs. Torres, 28 SCR A 489.) 02; Family Code; property relations 1997 No. 4: Luis and Rizza, both 26 years of age and single, live exclusively with each other as husband and wife without the benefit of marriage, Luis is gainfully employed, Rizza is not employed, stays at home, and takes charge of the household chores. After living together for a little over twenty years, Luis was able to save from his salary earnings during that period the amount of P200,000.00 presently deposited in a bank. A house and lot worth P500,000.00 was recently purchased for the same amount by the couple. Of the P500.000.00 used by the common-law spouses to purchase the property, P200.000.00 had come from the sale of palay harvested from the hacienda owned by Luis and P300.000,00 from the rentals of a building belonging to Rizza. In fine, the sum of P500.000.00 had been part of the fruits received during the period of cohabitation from their separate property, A car worth P100.000.00. being used by the common-law spouses, was donated Just months ago to Rizza by her parents. Luis and Rizza now decide to terminate their cohabitation, and they ask you to give them your legal advice on the following: (a) How, under the law. should the bank deposit of P200,000.00t the house and lot valued at P500.000.00 and the car worth P100.000.00 be allocated to them? (b) What would your answer be (to the above question) had Luis and Rizza been living together all the time, ie., since twenty years ago, under a valid marriage? Answer: Page 83 of 391 a) Art. 147 of the Family Code provides in part that when a man and a woman who are capacitated to marry each other, live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be owned by them In equal shares and the property acquired by both of them through their work or Industry shall be governed by the rules of co-ownership. In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been obtained by their Joint efforts, worker Industry, and shall be owned by them In equal shares. A party who did not participate in the acquisition by the other party of any property shall be deemed to have contributed Jointly in the acquisition thereof if the former's efforts consisted in the care and maintenance of the family and of the household. Thus: 1) the wages and salaries of Luis in the amount of P200,000.00 shall be divided equally between Luis and Rizza. 2) the house and lot valued at P500.000.00 having been acquired by both of them through work or industry shall be divided between them in proportion to their respective contribution, in consonance with the rules on co-ownership. Hence, Luis gets 2\5 while Rizza gets 3\5 of P500.000.00. 3) the car worth P100,000.00 shall be exclusively owned by Rizza, the same having been donated to her by her parents. (b) The property relations between Luis and Rizza, their marriage having been celebrated 20 years ago (under the Civil Code) shall be governed by the conjugal partnership of gains, under which the husband and wife place in a common fund the proceeds, products, fruits and income from their separate properties and those acquired by either or both spouses through their efforts or by chance, and upon dissolution of the marriage or of the partnership, the net gains or benefits obtained by either or both spouse shall be divided equally between them (Art. 142. Civil Code). Thus: 1) The salary of Luis deposited in the bank in the amount of P200.000.00 and the house and lot valued at P500,000.00 shall be divided equally between Luis and Rizza. 2) However, the car worth P1OO.000,00 donated to Rizza by her parents shall be considered to her own paraphernal property, having been acquired by lucrative title (par. 2, Art. 148, Civil Code). 02; Family Code; property relations 1975 No. VI The husband sold with right of repurchase a parcel of land belonging to the conjugal partnership without his wife's consent. Later the wife consented to the extension of the period of conventional redemption agreed to by the buyer and her husband. Is the sale valid or void? Why? Answer The sale, although originally voidable under Articles 166 and 173 for having been entered into without the wife's consent, was ratified or validated when the wife gave her conformity to the extension of the period of redemption. (Lanuza v. de Leon, 20 SCRA 369) 02; Family Code; property relations Page 84 of 391 1975 No. IX A husband and his wife, with conjugal funds, constructed a building on a lot owned by the wife's parents. Subsequently, the parents donated said lot to the wife. Who now owns the land? Explain. Answer: When the lot was donated to the wife by her parents, it became her paraphernal property as it was acquired by lucrative title during marriage under Art. 148(2) and the donation transmitted to her the rights of a land-owner over a building constructed on it. Art. 158, paragraph 2 applies when the building was constructed on land belonging to one of the spouses. Since the lot belongs to the wife's parents at the time the building was constructed. Article 158, paragraph 2 of the Civil Code is not applicable. (Caltex v. Felias, 108 Phil. 873) 02; Family Code; property relations 1976 No. III-a After a whirlwind courtship, A and B decide to marry each other and consult you on property rights. Will a Mercedez-Benz sedan that A bought while still single, continue to be his exclusive property? Explain. Answer Yes, according to Article 148, paragraph 1, the following shall be the exclusive property of each spouse: 1. That which is brought to the marriage as his or her own; "x x x xx x" 02; Family Code; property relations 1976 No. III-b A & B married. Will the prizes of Fremyo Savings bonds purchased during the marriage, be considered conjugal property? Answer Yes, according to Article 160, properties acquired during marriage is presumed to belong to the conjugal partnership unless it is proved that it was bought by exclusive funds of either spouse. Hence prizes of the bond shall be considered an increment of the conjugal property. 02; Family Code; property relations 1976 No. III-c May gambling debts contracted by either spouse without the consent of the other, be charged against the community? Explain. Answer No, according to Article 164, whatever may be lost during the marriage in any kind of gambling, betting or game, whether permitted or prohibited by law, shall be borne by the loser, and shall not be charged to the conjugal partnership. 02; Family Code; property relations 1977 No. II-c There are cases where the husband as administrator of the conjugal partnership need not secure the consent of the wife in order to dispose or encumber conjugal property. Mention five (5) of said cases. Page 85 of 391 Answer The husband does not have to secure his wife's consent in the following cases: a. Alienations or encumbrances of personal property belonging to the conjugal partnership, except donations which are not moderate donations for charity (Art. 174, CC). b. Alienations or encumbrances of real property belonging to the conjugal partnership acquired before the effectivity of the new Civil Code (Art. 166, CC), except donations which are not moderate donations for charity (Art, 174, CC). c. Alienations or encumbrances of real property belonging to the conjugal partnership acquired after the effectivity of the new Civil Code in the following cases: (1) When the wife has been declared a non composmentis; (2) When the wife has been declared a spendthrift; (3) When the wife is under civil interdiction; (4) When the wife is confined in a leprosarium; (5) Moderate donations for charity; (6) Donations made or promised to the common children for securing their future or the finishing of a career; and (7) Those made in order to pay the obligations of the conjugal partnership. (See Arts. 166, 162, 171, 174, CC.) The wife may bind the conjugal partnership in the following cases; (1) When the obligation is contracted for the daily expenses of the family (Art. 115, CC). (2) When the obligation is contracted in her business or profession, provided that it has redounded to the benefit of the family. (Art. 117, CC). (3) When she acts as the agent of her husband. (4) When the administration of the conjugal partnership has been transferred to her (Arts. 112, 168, 196, CC). (5) Moderate donations for charity (Art. 174. CC). 02; Family Code; property relations 1978 No. III-a A and B, a year after marriage, built a residential house on land belonging to the latter as her paraphernal property, using conjugal funds for its construction. Their marital life proving unhappy, they agreed to separate. Neither took the trouble to obtain judicial separation. Sometime later, a big fire reduced the house to ashes. Upon the death of B, the wife, there was a liquidation of the conjugal property. A, the surviving spouse, contended that the lot should form part of the conjugal estate. The heirs of B, the deceased wife, claimed that after the house was burned, having the lot vacant once more, it reverted to its status of being paraphernal. Decide the case with reasons. Answer A's contention that the lot should form part of the conjugal estate is not correct. Under the Civil Code, B retains her right of ownership of the lot until she is paid its value. It is now a well-settled doctrine that payment of the value of the lot Page 86 of 391 can be made only once the conjugal partnership is dissolved and there is a subsequent liquidation of the conjugal partnership properties. In other words, before the lot can be converted or transformed into conjugal property, it is essential that the condition that its value shall be reimbursed to B or her legal heirs must be complied with. Such reimbursement can only take place during the liquidation proceedings. Obviously, compliance with this condition presupposes that the building constructed on the lot must still be in existence at the time of liquidation of the conjugal partnership properties. In the instant case, the building was destroyed before the condition could be complied with. The lot, therefore, never ceased to be paraphernal. (NOTE: The above answer is based on Art. 158, par. 2, Civil Code and on Vda. de Padilla vs. Paterno, 113 Phil 656. See also Maramba vs. Lorenzo, 20 SCR A 474.) 02; Family Code; property relations 1985 No. 3 At the time of the dissolution of the marriage by the death of (the husband) A, he and his wife, B, were possessed of the following properties: 1) A house and lot 1/3 of the price of which A paid before his marriage, 1/3 during the marriage from his salary, and the balance also during the marriage from money B received in payment of a loan obtained from her while still single; and 2) An apartment house constructed on a parcel of lot donated to 6 prior to the marriage. Who owns the foregoing properties and what obligations, if any, does the owner have for the improvements introduced thereon? Discuss. Answer: I) 1. The house and lot is a separate property of A subject to reimbursement of 1/3 of the price to the conjugal partnership and another 1/3 to his wife B. 2. If the sale was made before the marriage and there is no reservation of the ownership then the property is capital of the husband but he must reimburse the conjugal partnership for 1/3 of the price and wife another 1/3 of the price. 3. If there is a reservation of ownership and the ownership will transfer after the full payment of the price, then the property is 1/3 capital, 1/3 conjugal and 1/3 paraphernal. 4. If it was acquired during the marriage, then the property is 1/3 separate, 1/3 conjugal and 1/3 paraphernal. 5. Inasmuch as the property was acquired and 1/3 of the price was paid out of exclusive property, 1/3 from the conjugal property, and 1/3 from the exclusive property of B, then each will own the property proportionately—1/3 to A, 1/3 to the conjugal partnership and 1/3 to B. 6. The house and lot is exclusive in nature, but A shall reimburse the conjugal partnership of gains for the 1/3 price paid during the marriage which came from conjugal funds {salary of A) and B for the 1/3 balance which was sourced from her paraphernal (see Art. 148, in relation to Art. 153, Civil Code; Lorenzo vs. Nicolas, 91 Phil 686). 2) 1. The apartment house is owned by the conjugal partnership subject to reimbursement to B for the value of the land. Improvements made on separate property from advancements of the conjugal partnership or the industry of either spouse belong to the conjugal partnership. Page 87 of 391 2. If the house was constructed at the expense of the conjugal funds, the land become automatically conjugal property but the payment of the price could be nude after the liquidation. 3. If the house was constructed before the donation, then the house and lot are paraphernal. 4. The apartment house is conjugal if it was constructed during the marriage utilizing conjugal funds. In this event, the lot shall also be considered conjugal and B shall be considered a creditor of the partnership for the value of the lot payable upon liquidation of the conjugal partnership (Art. 158, Civil Code; Calimlim-Canullas vs. Judge Fortun) under other circumstances, or where the above conditions do not concur, .said pieces of property may be or remain exclusive in nature. 02; Family Code; property relations 1994 No. 6; Paulita left the conjugal home because of the excessive drinking of her husband, Alberto. Paulita, out of her own endeavor, was able to buy a parcel of land which she was able to register under her name with the addendum "widow." She also acquired stocks in a listed corporation registered In her name. Paulita sold the parcel of land to Rafael, who first examined the original of the transfer certificate of title. 1) Has Alberto the right to share in the shares of stock acquired by Paulita? 2) Can Alberto recover the land from Rafael? Alternative Answers: 1. a) Yes. The Family Code provides that all property acquired during the marriage, whether the acquisition appears to have been made, contracted or registered in the name of one or both spouses, is presumed to be absolute community property unless the contrary is proved. b) Yes. The shares are presumed to be absolute community property having been acquired during the marriage despite the fact that those shares were registered only in her name. Alberto's right to claim his share will only arise, however, at dissolution. c) The presumption is still that the shares of stock are owned in common. Hence, they will form part of the absolute community or the conjugal partnership depending on what the property regime is. d) Since Paulita acquired the shares of stock by onerous title during the marriage, these are part of the conjugal or absolute community property, as the case maybe (depending on whether the marriage was celebrated prior to. or after, the effectivity of the Family Code). Her physical separation from her husband did not dissolve the community of property. Hence, the husband has a right to share in the shares of stock. 2) a) Under a community of property, whether absolute or relative, the disposition of property belonging to such community is void if done by just one spouse without the consent of the other or authority of the proper court. However, the land was registered in the name of Paulita as "widow". Hence, the buyer has the right to rely upon what appears in the record of the Register of Deeds and should, consequently, be protected. Alberto cannot recover the land from Rafael but would have the right of recourse against his wife, b) The parcel of land is absolute community property having been acquired during the marriage and through Paulita's industry despite the registration being only in the name of Paulita. The land being community property, its sale to Rafael without Page 88 of 391 the consent of Alberto is void. However, since the land is registered in the name of Paulita as widow, there is nothing in the title which would raise a suspicion for Rafael to make inquiry. He, therefore, is an innocent purchaser for value from whom the land may no longer be recovered. c) No. Rafael is an innocent purchaser in good faith who, upon relying on the correctness of the certificate of title, acquires rights which are to be protected by the courts. Under the established principles of land registration law, the presumption is that the transferee of registered land is not aware of any defect in the title of the property he purchased. (See Tojonera v. Court of Appeals, 103 SCRA 467). Moreover, the person dealing with registered land may safely rely on the correctness of its certificate of title and the law will in no way oblige him to go behind the certificate to determine the condition of the property. [Director of Lands v. Abache, et al. 73 Phil. 606). No strong considerations of public policy have been presented which would lead the Court to reverse the established and sound doctrine that the buyer in good faith of a registered parcel of land does not have to look beyond the Torrens Title and search for any hidden defect or inchoate right which may later Invalidate or diminish his right to what he purchased. (Lopez v. Court of Appeals. 189 SCRA 271) d) The parcel of land is absolute community property having been acquired during the marriage and through Paulita's industry despite registration only in the name of Paulita. The land being community property, its sale to Rafael without the consent of Alberto is void. 02; Family Code; property relations 1987 No. 12: Spouses Martin and Tecla bought a parcel of land on installment. At the time the total sale price was paid, Martin had left the conjugal abode and was cohabiting with Tina. Notwithstanding such separation, Tecla religiously paid the installments as they fell due out of her earnings from a small sari-sari store. After the total purchase price had been paid, Martin had the property titled in the name of "Martin married to Tina." Tecla died and her two children by Martin demanded partition of the property and their mother's share. Mariin and Tina refused, claiming that the property belonged to their "conjugal partnership." No proof was presented that Martin married Tina during or after the death of Tecla. To whom does the property titled in the name of "Martin married to Tina belong? How would the property be divided among Martin, the two children of Martin and Tecla and Tina? Explain. Answer: The property is conjugal property,— 1/2 belongs to Martin and the other half of Tecla. However, 1/2 belonging to Tecla will be divided among Martin and the two children, each of them getting 1/3 of that 1/2. 02; Family Code; property relations 1989 No, 3: (1) What properties are excluded from the regime of absolute community of property between spouses? Answer: The following shall be excluded from the community property: Page 89 of 391 (1) Property acquired during the marriage by gratuitous title by either spouse, and the fruits as well as the income thereof, if any, unless it is expressly provided by the donor, testator or grantor that they shall form part of the community property; (2) Property for personal and exclusive use of either spouse; however, jewelry shall form part of the community property; (3) Property acquired before the marriage by either spouse who has legitimate descendants by a former marriage, and the fruits as well as the income, if any, of such property. (2) When should the property relations of the spouses be mandatorily governed by the regime of complete separation of property? Answer: Should the surviving spouse contract a subsequent marriage without complying with the requirement that the community or conjugal property be liquidated judicially or extra-judicially within one year from the death of the deceased spouse, a mandatory regime of complete separation of property shall govern the property relations of the subsequent marriage. 02; Family Code; property relations 1995 No. 9: 2. Suppose Tirso and Tessie were married on 2 August 1988 without executing any ante nuptial agreement. One year after their marriage, Tirso while supervising the clearing of Tessie's inherited land upon the latter's request, accidentally found the treasure not in the new river bed but on the property of Tessie. To whom shall the treasure belong? Explain. Answer: 2. Since Tirso and Tessie were married before the effectivity of the Family Code, their property relation is governed by conjugal partnership of gains. Under Art. 54 of the Civil Code, the share of the hidden treasure which the law awards to the finder or the proprietor belongs to the conjugal partnership of gains. The one-half share pertaining to Tessie as owner of the land, and the one-half share pertaining to Tirso as finder of the treasure, belong to the conjugal partnership of gains. 02; Family Code; property relations 1980 No. I (a) "A" and "B" were husband and wife. During their marriage, they built a house on a lot exclusively owned by "B", the wife, with funds earned by "A", the husband. They had no children. Upon the death of "B", her relatives claimed the house and lot from "A", the husband. The husband refused. Decide the controversy. Answer (a) "A", the husband, is correct when he refused to give the house and lot to the relatives of "B". The funds used in constructing the house are conjugal. This is so because such funds were earned by "A". Therefore, the house is conjugal True, the lot upon which the house is constructed is paraphernal But then, according to the Civil Code, it will also become conjugal upon compliance with the condition that its value shall be reimbursed by the conjugal partnership to the wife. This condition can be fulfilled only during the liquidation of the conjugal partnership. This is well-settled. Assuming then that this condition has been fulfilled, both house and lot are conjugal in Page 90 of 391 character. One-half (1/2) thereof belongs to "A", while the other one-half (1/2) belongs to the estate of "B". To whom shall the estate of "B" pass? Assuming that "B" died intestate and assuming further that the relatives of "B" are brothers and sisters and/or nephews and nieces, one-half (1/2) thereof shall pass to "A" and the other one-half (1/2) shall pass to such relatives in accordance with the rules of intestacy. However, if such relatives are not brothers and sisters and/or nephews and nieces, the entire estate shall pass to "A" alone in accordance with the rules of intestacy. (NOTE: The above answer is based on Art. 158, par. 2, Civil Code, and on the cases of Coingco vs. Flores, 84 Phil 284; Vda. de Padilla vs. Paterno, 113 Phil. 656; and Maramba vs. Lozano, 20 SCR A 474). 02; Family Code; property relations; charges 2000 No I a) As finance officer of K and Co., Victorino arranged a loan of P5 Million from PNB for the corporation. However, he was required by the bank to sign a Continuing Surety Agreement to secure the repayment of the loan. The corporation failed to pay the loan, and the bank obtained a judgment against it and Victorino, jointly and severally. To enforce the judgment, the sheriff levied on a farm owned by the conjugal partnership of Victorino and his wife Elsa. Is the levy proper or not? (3%) SUGGESTED ANSWER: The levy is not proper there being no showing that the surety agreement executed by the husband redounded to the benefit of the family. An obligation contracted by the husband alone is chargeable against the conjugal partnership only when it was contracted for the benefit of the family. When the obligation was contracted on behalf of the family business the law presumes that such obligation will redound to the benefit of the family. However, when the obligation was to guarantee the debt of a third party, as in the problem, the obligation is presumed for the benefit of the third party, not the family. Hence, for the obligation under the surety agreement to be chargeable against the partnership it must be proven that the family was benefited and that the benefit was a direct result of such agreement, (Ayala Investment v. Ching, 286 SCRA 272) 02; Family Code; property relations; charges 1979 No. V H was engaged in the business of buying and selling rice. In the course thereof, he incurred a P20,000.00 indebtedness from his supplier of rice. Because of his gambling losses, his business went bankrupt and soon thereafter, he and his wife W quarreled and live separately ever since. A year after they had separated, H's creditor sued him and obtained a favorable judgment which however cannot be enforced against H because he had no property at all. H's creditor now seeks to enforce the judgment against W's brand new car which she had bought out of her salary from the company where she works. The car is registered in W's maiden name which she had resumed using. May the car be levied upon to answer for the judgment? Why? Answer Yes, W's car may be levied upon to answer for the judgment. It must be observed that the obligation of H is an obligation which had redounded to the benefit of his family. Under the Civil Code, the conjugal partnership is liable for the payment of such obligation. The fact that H's business went bankrupt because of his gambling losses does not affect the liability of the partnerships for the obligation. Neither does Page 91 of 391 the separation de facto of H and W have any effect. Under the law, such separation does not terminate the conjugal partnership of grains existing between them. But how about the fact that the car was bought to W out of her salary? Under the Civil Code, W's salary is conjugal. Subsequently, heir car which she bought with her salary would then be classified as properly acquired during the marriage with conjugal funds by onerous title. As to the same Code, the car is also conjugal. Being conjugal, it may be levied upon to answer for the judgment. 02; Family Code; property relations; charges and expenses 1985 No. 4 A) Aside from the foregoing assets, A and B in the preceding question had these obligations outstanding at the time of A's death— 1) A debt contracted by B for the repair of the house and building above referred to; and apartment 2) A shortage in A's account as cashier of the firm where he was employed: Against whom are these obligations chargeable? Score your reasons. Answers: A) 1. With respect to the house since it is a separate property of the husband, minor repairs are to be shouldered by the conjugal partnership but major repairs are for the account of the owner (husband A). With respect to the apartment building, which is conjugal, then the major and minor repairs are for the account of the conjugal partnership. 2) The debt is chargeable against the conjugal partnership since it redounds to the benefit of the partnership. 3) The debt contracted by B for the repair of the house is an exclusive obligation of the husband A, but the repair cost on the apartment house being conjugal in nature, although contracted by B, the debt shall be borne by the conjugal partnership (Art. 161, Civil Code). 2) 1. If this shortage is a civil liability and the obligation is contracted by A in his employment as cashier from which he derives the support of the family then the shortage is chargeable against the conjugal partnership. But if A was convicted and ordered to pay the shortage, it is chargeable against his separate property, 2. If the shortage wag incurred due to fraud or crime, it is chargeable against the separate property of A. But if A acted in good faith, the shortage is chargeable against the conjugal partnership since the obligation was incurred in the exercise of his profession, which redounds to the benefit of the family. 3) Fines and pecuniary indemnities imposed upon the spouses shall not be charged to the conjugal partnership; if, however, the spouse liable therefore has no sufficient exclusive property, said obligation may be enforced against the partnership assets after the responsibilities mentioned in Art. 151 would have been covered, but at the time of .the liquidation of the partnership, the said spouse shall be charged for such payment (Art. 161, Civil Code). 02; Family Code; property relations; conjugal partnership pf gains 1998 No VI. In 1970, Bob and Issa got married without executing a marriage settlement. In 1975, Bob inherited from his father a residential lot upon which, in 1981, he constructed a two-room bungalow with savings from his own earnings. At that time, the lot was worth P800.000.00 while the house, when finished cost P600,000.00. In Page 92 of 391 1989t Bob died, survived only by his wife, Issa and his mother, Sofia. Assuming that the relative values of both assets remained at the same proportion: 1. State whether Sofia can rightfully claim that the house and lot are not conjugal but exclusive property of her deceased son. [3%] 2. Will your answer be the same if Bob died before August 3, 1988? [2%] Answer; 1. Since Bob and Sofia got married In 1970, then the law that governs is the New Civil Code (Persons), in which case, the property relations that should be applied as regards the property of the spouses is the system of relative community or conjugal partnership of gains (Article 119, Civil Code). By conjugal partnership of gains, the husband and the wife place in a common fund the fruits of their separate property and the income from their work or Industry (Article 142, Civil Code). In this instance, the lot inherited by Bob in 1975 is his own separate property, he having acquired the same by lucrative title (par. 2, Art. 148, Civil Code). However, the house constructed from his own savings in 1981 during the subsistence of his marriage with Issa is conjugal property and not exclusive property in accordance with the principle of "reverse accession" provided for in Art. 158, Civil Code. Another Answer: 1. Sofia, being her deceased son's legal heir concurring with his surviving spouse (Arts. 985, 986 and 997, Civil Code), may rightfully claim that the house and lot are not conjugal but belong to the hereditary estate of Bob. the value of the land being more than the cost of the improvement (Art. 120, Family Code). Answer: 2. Yes, the answer would still be the same. Since Bob and Issa contracted their marriage way back in 1970, then the property relations that will govern is still the relative community or conjugal partnership of gains (Article 119, Civil Code). It will not matter if Bob died before or after August 3. 1988 (effectivity date of the Family Code], what matters is the date when the marriage was contracted. As Bob and Issa contracted their marriage way back in 1970. the property relation that governs them is still the conjugal partnership of gains. (Art. 158, Civil Code) Another Answer: 2. If Bob died be fore August 3, 1988. which is the date the Family Code took effect, the answer will not be the same. Art. 158. Civil Code, would then apply. The land would then be deemed conjugal, along with the house, since conjugal funds were used in constructing it. The husband's estate would be entitled to a reimbursement of the value of the land from conjugal partnership funds. 02; Family Code; property relations; dissolution of partnership; custody of children 1978 No I-b Ester Santos and Pedro Reyes were married on September 7, 1962 and had two (2) children, a girl of four (4) years and a boy of eleven (11) years of age. In 1976, Ester left the conjugal home in Zamboanga and resided in Manila. Ester and Pedro reached an amicable settlement respecting custody of children, support, separation of property and dissolution of the conjugal partnership. It was agreed that the custody of the girl be given to the mother and that of the boy to the father. Subsequently, the mother questioned in court the validity of the agreement with respect to the custody of her son. 1. Is the amicable settlement valid with respect to the separation of property and dissolution of the conjugal partnership? Reasons, Page 93 of 391 2. Is the amicable settlement valid with respect to the custody of the children? Reasons. Answer 1. The amicable settlement with respect to the separation of property and dissolution of the conjugal partnership is not valid unless judicially approved. The Civil Code is explicit. According to one provision, separation of property between the spouses during the marriage shall not take place save by virtue of a judicial order. According to another provision, every extrajudicial agreement, during marriage, for the dissolution of the conjugal partnership between husband and wife shall be void and of no effect. (NOTE: The above answer is based on Articles 190 and 221 of the Civil Code.) 2. The amicable settlement with respect to the custody of the children is valid provided that it is for their best interest and welfare. It is a well-settled rule in this jurisdiction that in questions involving- custody of children, their interest and welfare are always paramount. As a matter of fact, the law now declares it. Here, the custody of the girl, who is four years aid, is given to the mother. There is no violation of the law either under the Civil Code or under the Child and Youth Welfare Code. The custody of the boy, who is eleven years old, is given to the father. There is also no violation of the law either under the Civil Code or under the Child and Youth Welfare Code. (NOTE: The above answer is based on decided cases as well as pertinent provisions of the Welfare Code, such as Articles 8 and 17.) 02; Family Code; property relations; donations between spouses 1977 No. III-b H donated a parcel of land to W, his common-law wife. Later, they married, but soon afterwards H died, survived only by a sister, S and W. S sued to recover the property donated, but W resisted. Decide with reasons. Answer The action will prosper but only with respect to one-half of the property. As held by the Court of Appeals in a 1954 decision (Buenaventura vs. Bautista, 60 Off Gaz, 3679), the prohibition of donations between spouses during the marriage is applicable to common-law relationship for the following reasons: The reason behind the law that the donation was probably due to undue and improper influence is also true with greater force in extra-marital relations. Besides, so long as marriage remains the cornerstone of our family law, reason and morality demand that the disabilities which are attached to marriage should likewise be attached to extramarital relation. The lack of validity of the donation made by H to W, however, does not mean that the entire property shall be given to S Because of her marriage to H, W is entitled to one-half of the property and the plaintiff, as the surviving sister, to the other half (Art. 1001, Civil Code). 02; Family Code; property relations; marriage settlements 1995 No, 6; On 10 September 1988 Kevin, a 26-year old businessman, married Karla. a winsome lass of 18. Without the knowledge of their parents or legal guardians, Kevin and Karla entered into an ante-nuptial contract the day before their marriage stipulating that conjugal partnership of gains shall govern their marriage. At the time Page 94 of 391 of their marriage Kevin's estate was worth 50 Million while Karla's was valued at 2 Million. A month after their marriage Kevin died in a freak helicopter accident. He left no will, no debts, no obligations. Surviving Kevin, aside from Karla, are his only relatives: his brother Luis and first cousin Lilia. 1. Explain. What property regime governed the marriage of Kevin and Karla? 2. Determine the value of the estate of Kevin, 3. Who are Kevin's heirs? 4. How much is each of Kevin's heirs entitled to inherit? Answer; 1. Since the marriage settlement was entered into without the consent and without the participation of the parents (they did not sign the document), the marriage settlement is Invalid applying Art. 78, F.C. which provides that a minor who according to law may contract marriage may also enter into marriage settlements but they shall be valid only if the person who may give consent to the marriage are made parties to the agreement. (Karla was still a minor at the time the marriage settlement was executed In September 1988 because the law, R.A. 6809, reducing the age of majority to 18 years took effect on 18 December 1989). The marriage settlement being void, the property regime governing the marriage Is, therefore, absolute community of property, under Art. 75 of the FC. 2. All the properties which Kevin and Karla owned at the time of marriage became community property which shall be divided equally between them at dissolution, Since Kevin owned 50 Million and Karla. 2 Million, at the time of the marriage, 52 Million constituted their community property. Upon the death of Kevin, the community was dissolved and half of the 52 Million or 26 Million is his share in the community. This 26 Million therefore is his estate. 3. Karla and Luis are the Intestate heirs of Kevin. 4. They are entitled to share the estate equally under Article 1001 of the NCC. Therefore. Karla gets 13 Million and Luis gets 13 Million. 02; Family Code; property relations; marriage settlements 1991 No 3: Bar Candidates Patricio Mahigugmaon and Rowena Amor decided to marry each other before the last day of the 1991 Bar Examinations. They agreed to execute a Marriage Settlement. Rowena herself prepared the document in her own handwriting. They agreed on the following: (1) a conjugal partnership of gains; (2) each donates to the other fifty percent (50%) of his/her present property, (3) Rowena shall administer the conjugal partnership property; and (4) neither may bring an action for the annulment or declaration of nullity of their marriage. Both signed the agreement in the presence of two (2) witnesses. They did not, however, acknowledge it before a notary public. (a) As to form, is the Marriage Settlement valid? May it be registered in the registry of property? If not, what steps must be taken to make it registerable? (b) Are the stipulations valid? (c) If the Marriage Settlement is valid as to form and the above stipulations are likewise valid, does it now follow that said Marriage Settlement Is valid and enforceable? Answer: Page 95 of 391 A. Yes, it is valid as to form because it is in writing. No, it cannot be registered in the registry of property because it is not a public document. To make it registerable, it must be reformed and has to be notarized. B. Stipulations (1) and (3) are valid because they are not contrary to law. Stipulation (4) is void because it is contrary to law. Stipulation (2) is valid up to 1/5 of their respective present properties but void as to the excess (Art 84, Family Code). C. No. on September 15,1991. the marriage settlement is not yet valid and enforceable until the celebration of the marriage, to take place before the last day of the 1991 bar Examinations. Alternative Answers: A. Yes, it is valid as between the parties but not as against third persons. No, because it is not a public document. To make it registerable, it must be reformed and has to be notarized. B. It depends. As between the parties, stipulations (1) and (3) are valid because they are not contrary to law. Stipulation (2) is void because it is contrary to law. Stipulation (2) is valid up to 1/5 of their respective present properties but void as to the excess (Art. 84, Family Code). 02; Family code; property relations; separation of property 1984 No. 1 Spouses Pedro and Maria decided to separate, and to voluntarily dissolve their conjugal partnership. Hence, they executed a public document wherein they declared that they had no debts, that they were voluntarily dissolving their conjugal partnership, and that each of them would thereafter be free to acquire or dispose of any property independently of the other. Thereafter, they lived apart. Pedro engaged in business which unfortunately failed. On the other hand, Maria continued to be gainfully employed and was able to acquire properties through her own efforts. The creditors of Pedro obtained a judgment against the latter which they could not satisfy because Pedro was insolventCould the creditors of Pedro obtain satisfaction of the judgment out of the properties of Maria? Explain. Answer: A. Furnished by the Office of Justice Palma Yes, Under Act 190, the separation of properties between spouses during the marriage shall not take place save in virtue of a judicial order. Not having been submitted to the court for approval, the agreement to dissolve the conjugal partnership is void and cannot have any legal effects. The properties acquired by Maria, being conjugal in character, would therefore be answerable for the debts incurred by Pedro in business. B. Comments and Suggested Answer We agree with the answer of the Bar Examiner. However, we suggest that the following should also be accepted as a correct answer: Yes, the creditors can obtain satisfaction of the judgment out of the properties of Maria. It is obvious that the properties of Maria are conjugal because they were acquired through her own effort or industry (Art. 153, No. (2), Civil Code). It is also Page 96 of 391 obvious that the obligations of Pedro are conjugal obligations because they have benefited his family (Art. 1G1, No. (1), Civil Code). Therefore, creditors of Pedro can proceed after the properties acquired by Maria. But how about the agreement between Pedro and Maria to separate and dissolve their conjugal partnership voluntarily? This agreement is void because it was never approved by a competent court. Consequently, it cannot produce any affect. 02; Family Code; requisites for valid marriages 1999 No III. What is the status of the following marriages and why? (a) A marriage between two 19-year olds without parental consent, (2%) (b) A marriage between two 21-year olds without parental advice. (2%) (c) A marriage between two Filipino first cousins in Spain where such marriage is valid. (2%) (d) A marriage between two Filipinos in Hongkong before a notary public. (2%) (e) A marriage solemnized by a town mayor three towns away from his jurisdiction, (2%) ANSWER: (a) The marriage is voidable. The consent of the parties to the marriage was defective. Being below 21 years old, the consent of the parties is not full without the consent of their parents. The consent of the parents of the parties to the marriage is indispensable for its validity. (b) Between 21-year olds, the marriage is valid de-spite the absence of parental advice, because such absence is merely an irregularity affecting a formal requisite—i.e., the marriage license-and does not affect the validity of the marriage itself. This is without prejudice to the civil, criminal, or administrative liability of the party responsible therefor. (c) By reason of public policy, the marriage between Filipino first cousins is void [Art. 38, par. (1), Family Code], and the fact that it is considered a valid marriage in a foreign country in this case, Spain— does not validate it, being an exception to the general rule in Art. 96 of said Code which accords validity to all marriage solemnized outside the Philippine x x x and valid there as such. ALTERNATIVE ANSWER The marriage it void. Under Article 96 of the Family Code, a marriage valid where celebrated is valid in the Philippines except those marriages enumerated in said Article which marriages will remain void even though valid where solemnized. The marriage between first cousins is one of those marriages enumerated therein, hence, it is void even though valid in Spain where it was celebrated. By reason of Art. 15 in relation to Article 38 of the Civil Code, which applies to Filipinos wherever they are, the marriage is void. (d) It depends. If the marriage before the notary public is valid under Hongkong Law, the marriage is valid in the Philippines. Otherwise, the marriage that is invalid in Hongkong will be invalid in the Philippine!. ALTERNATIVE ANSWER: If the two Filipinos believed in good faith that the Notary Public is authorized to solemnize marriage, then the marriage is valid. Page 97 of 391 (e) Under the Local Government Code, a town mayor may validly solemnize a marriage but said law is silent as to the territorial limits for the exercise by a town mayor of such authority. However, by analogy, with the authority of members of the Judiciary to solemnize a marriage, it would seem that the mayor did not have the requisite authority to solemnize a marriage outside of his territorial jurisdiction. Hence, the marriage is void, unless it was contracted with either or both parties believing in good faith that the mayor had the legal authority to solemnize this particular marriage (Art 35, par 2 Family Code). ALTERNATIVE ANSWER: The marriage is valid. Under the Local Government Code, the authority of a mayor to solemnize marriages is not restricted within his municipality implying that he has the authority even outside the territory thereof. Hence, the marriage he solemnized outside his municipality is valid. And even assuming that his authority is restricted within his municipality, such marriage will nevertheless, be valid because solemnizing the marriage outside said municipality is a mere irregularity applying by analogy the case of Navarro v Domagtoy, 259 Scra 129. In this case, the Supreme Court held that the celebration by a judge of a marriage outside the jurisdiction of his court is a mere irregularity that did not affect the validity of the marriage notwithstanding Article 7 of the Family Code which provides that an incumbent member of the judiciary is authorized to solemnize marriages only within the court’s jurisdiction. ANOTHER ALTERNATIVE ANSWER: The marriage is void because the mayor has no authority to solemnize marriage outside his jurisdiction. 02; Family Code; requisites of marriage 1989 No. 2: (1) Paul, a 17-year old Filipino and a permanent resident in the United States, married Jean, a 16-year old American in Las Vegas, Nevada. The parents of both gave their consent to the marriage. The marriage is valid in Nevada. Is its also valid in the Philippines? Give your reasons. Answer: No, the marriage is not valid. Under the Family Code, the law requires that the contracting parties are at least eighteen (18) years of age. Alternative Answer: If the marriage took place before the effectivity of the Family Code, the marriage will be valid since under the provisions of the Civil Code a marriage valid in the place of celebration is valid in the Philippines except bigamous, polygamous, and incestuous marriages as determined by Philippine law. The minimum age under the old law was sixteen (16) for the male and fourteen (14) for the female. 02; Family Code; requisites of marriage 1995 No. 18: Isidro and Irma, Filipinos, both 18 years of age, were passengers of Flight No. 317 of Oriental Airlines. The plane they boarded was of Philippine registry. While en route from Manila to Greece some passengers hijacked the plane, held the chief pilot hostage at the cockpit and ordered him to fly Instead to Libya. During the hijacking Isidro suffered a heart attack and was on the verge of death. Since Irma was already eight months pregnant by Isidro, she pleaded to the hijackers to allow the assistant pilot to solemnize her marriage with Isidro. Soon after the marriage, Page 98 of 391 Isidro expired. As the plane landed in Libya Irma gave birth. However, the baby died a few minutes after complete delivery. Back in the Philippines Irma Immediately filed a claim for Inheritance. The parents of Isidro opposed her claim contending that the marriage between her and Isidro was void ab initio on the following grounds: (a) they had not given their consent to the marriage of their son; (b) there was no marriage license; (c) the solemnizing officer had no authority to perform the marriage; and, (d) the solemnizing officer did not file an affidavit of marriage with the proper civil registrar. 1. Resolve each of the contentions ([a] to [d]) raised by the parents of Isidro. Discuss fully. Answer; 1. (a) The fact that the parents of Isidro and of Irma did not give their consent to the marriage did not make the marriage void ab initio. The marriage is merely voidable under Art 45 of the FC. (b) Absence of marriage license did not make the marriage void ab initio. Since the marriage was solemnized in articulo mortis, it was exempt from the license requirement under Art. 31 of the FC. (c) On the assumption that the assistant pilot was acting for and In behalf of the airplane chief who was under disability, and by reason of the extraordinary and exceptional circumstances of the case [ie. hostage situation), the marriage was solemnized by an authorized officer under Art. 7 (3) and Art. 31. of the FC. (d) Failure of the solemnizing officer to file the affidavit of marriage did not affect the validity of the marriage. It is merely an irregularity which may subject the solemnizing officer to sanctions. Alternative Answer: Considering that the solemnizing officer has no authority to perform the marriage because under Art. 7 the law authorizes only the airplane chief, the marriage is void, hence, a, c, and d are immaterial. 02; Family Code; requisites of marriage 1976 No. II-a A, 19, male and B, 17, female contract marriage. May the marriage be annulled an the ground of underage? Explain. Answer It depends on whether the parental consent was given to the marriage. If the parents did not give their consent, the marriage may be annulled; otherwise it cannot be annulled. 02; Family Code; requisites of marriage 1976 No. II-c If B is only 13 but her parents give their consent, is the marriage valid? Explain. Answer No, The marriage is void. 02; Family Code; requisites of marriage 1984 No. 2 Page 99 of 391 In 1974, Alfredo married Alicia, then only 16 years old, without the consent of the latter's parents. After the birth of their only child, Alice, they separated. In 197G, Alfredo married Benita with whom he begot one child, Benedicta. Again, the union was not successful and the couple eventually separated. In 1978, Alfredo married for the third time, His new bride, Consuelo, bore him one child, Connie. Unknown to Alfredo, his first wife, Alicia, died in 1977. Discuss the validity of each of the three marriages of Alfredo and the status of each of his children. Answer: A, Furnished by Office of Justice Palma The marriage of Alfredo to Alicia is voidable, but at the instance only of Alicia who was only 16 years old at the time (Art. 85, par. 1). Alfredo cannot ask for the annulment of this marriage. The child Alice is legitimate (Art. 89). The marriage of Alfredo to Benita is void, for being bigamous (Art. 80, par. 4). The child Benedicta is a natural child by legal fiction (Art. 89). The marriage of Alfredo to Consuelo is valid, since there was no pre-existing marriage, in view of the dissolution of the marriage to Alicia upon the latter's death, coupled with the fact that the marriage to Benita is void. The child Connie is legitimate. B, Comments and Suggested Answer We agree with the answer of the Bar Examiner. However, we suggest that the following should also be accepted as a correct answer; The marriage of Alfredo to Alicia is voidable because of lack of parental consent (Art. 85, No. (1), Civil Code), Hence, it is valid and binding until it is annulled by a competent court. The child Alice is, therefore, legitimate since the marriage of Alfredo and Alicia was never annulled. The marriage of Alfredo to Benita is void because Alfredo married Benita when his marriage to Alicia was still subsisting in the sense that it has not yet been annulled. Consequently, the marriage is bigamous, and therefore, void (Art. 80, No. (4), Civil Code . Hence, the child Benedicta is a natural child by legal fiction (Art. 89, Civil Code). The marriage of Alfredo to Consuelo is valid because there was no longer any legal impediment to said marriage when it was celebrated. Alicia was already dead and, of course, Alfredo's marriage to Benita is void. The child Connie is, therefore, legitimate. 02; Family Code; requisites of marriage & void marriage 1993 No. 1: A and B, both 18 years old, were sweethearts studying in Manila. On August 3, 1988, while in first year college, they eloped. They stayed in the house of a mutual friend in town X, where they were able to obtain a marriage license. On August 30, 1988, their marriage was solemnized by the town mayor of X in his office. Thereafter, they returned to Manila and continued to live separately in their respective boarding houses, concealing from their parents, who were living in the province what they had done. In 1992, after graduation from college, A and B decided to break their relation and parted ways. Both went home to their respective towns to live and work. Page 100 of 391 1) Was the marriage of A and B solemnized on August 30, 1988 by the town mayor of X in his office a valid marriage? Explain your answer. 2) Can either or both of them contract marriage with another person without committing bigamy? Explain your answer. Answer; 1) The marriage of A and B is void because the solemnizing officer had no legal authority to solemnize the marriage. But if either or both parties believed in good faith that the solemnizing officer had the legal authority to do so, the marriage is voidable because the marriage between the parties, both below 21 years of age, was solemnized without the consent of the parents. (Art. 35, par. (2) and Art. 45 par. (1), Family Code) 2) Either or both of the parties cannot contract marriage In the Philippines with another person without committing bigamy, unless there is compliance with the requirements of Article 52 Family Code, namely: there must be a judgment of annulment or absolute nullity of the marriage, partition and distribution of the properties of the spouses and the delivery of their children's presumptive legitimes. which shall be recorded in the appropriate Civil Registry and Registry of Property, otherwise the same shall not affect third persons and the subsequent marriage shall be null and void. (Arts. 52 and 53. Family Code) Alternative Answer: 2) Yes, they can. The subsequent marriage contracted by one of the parties will not give rise to bigamy even in the absence of a court declaration of nullity of the first marriage. The subsistence of a prior valid marriage is an indispensable element of the crime of bigamy. The prior court declaration of nullity of the first marriage is required by the Family Code only for the purpose of the validity of the subsequent marriage, not as an element of the crime of bigamy. 02; Family Code; requisites of marriage; marriage license 1996 No. 4: On Valentine's Day. 1996. Ellas and Fely, both single and 25 years of age, went to the city hall where they sought out a fixer to help them obtain a quickie marriage. For a fee, the fixer produced an ante-dated marriage license for them, Issued by the Civil Registrar of a small remote municipality. He then brought them to a licensed minister in a restaurant behind the city hall, and the latter solemnized their marriage right there and then. 1) Is their marriage valid, void or voidable? Explain. Answer: The marriage is valid. The irregularity in the issuance of a valid license does not adversely affect the validity of the marriage. The marriage license is valid because it was in fact issued by a Civil Registrar (Arts. 3 and 4. FC). Alternative Answer: It depends. If both or one of the parties was a member of the religious sect of the solemnizing officer, the marriage Is valid. If none of the parties is a member of the sect and both of them were aware of the fact, the marriage is void. They cannot claim good faith In believing that the solemnizing officer was authorized because the scope of the authority of the solemnizing officer is a matter of law. If, however, one of the parties believed in good faith that the other was a member of the sect, then the marriage Is valid under Article 35 (2), FC. In that case, the party in good faith is acting under a mistake of fact, not a mistake of law, 2) Would your answer be the same if it should turn out that the marriage license was spurious? Explain. Page 101 of 391 Answer; No, the answer would not be the same. The marriage would be void because of the absence of a formal requisite. In such a case, there was actually no valid marriage license. 02; Family Code; requisites of marriage; marriage license 2002 No I. On May 1, 1978 Facundo married Petra, by whom he had a son Sotero. Petra died on July 1, 1996, while Facundo died on January 1, 2002. Before his demise, Facundo had married, on July 1, 2002, Quercia. Having lived together as husband and wife since July 1, 1990, Facundo and Quercia did not secure a marriage license but executed the requisite affidavit for the purpose. To ensure that his inheritance rights are not adversely affected by his father second marriage, Sotero now brings a suit to seek a declaration of the nullity of the marriage of Facundo and Quercia, grounded on the absence of a valid marriage license. Quercia contends that there was no need for a marriage license in view for her having lived continuously with Facundo for five years before their marriage and that has Sotero has no legal personality to seek a declaration of nullity of the marriage since Facundo is now deceased. A. Is the marriage of Facundo and Quercia valid, despite the absence of a marriage license? Explain. (2%) SUGGESTED ANSWER: A. The marriage with Quercia is void. The exemption from the requirement of a marriage license under Art, 34, Family Code, requires that the man and woman must have lived together as husband and wife for at least five years and without any legal impediment to marry each other during those five years. The cohabitation of Facundo and Quercia for six years from 1990 to July 1, 1996 when Petra died was one with a legal impediment hence, not in compliance with the requirement of law. On other hand, the cohabitation thereafter until the marriage on July 1, 2000, although free from legal impediment, did not meet the 5-year cohabitation requirement. ALTERNATIVE ANSWER: A. The marriage of Facundo and Quercia is VALID. The second marriage was solemnized on July 1, 2000, when the Family code was already affective. The family code took effect on August 3, 1988. Under the Family Code, no marriage license is required if the parties have been cohabiting for the period of five years and there is no legal impediment. There must no legal impediment ONLY AT THE TIME OF THE SOLEMNIZATION OF THE MARRIAGE, and not the whole five years period. This is clearly the intent of the code framers (see Minutes of the 150th joint Civil Code of the Family Law Committees held on August 9, 1986). Also, in Manzano V. Sanchez, AM NO. MT –00-129, March 8, 2001, the Supreme Court said that, as one of the requisites for the exception to apply, there must be no legal impediment at the time of the marriage. The Supreme Court did not say that the legal impediment must exist all throughout the five-year period. This is different from the case of Nināl V. Bayadog, (328 SCRA 122 [2000]). In the said case, the situation occurred during the regime of the new Civil Code where Article 76 thereof clearly provides that during the five-year cohabitation, the parties must be unmarried. This is not so anymore in the Family Code. The Change in the Family Code is significant. If the second marriage occurred before the effectivity of the Family Code, the answer would that be that the marriage is void. 02; Family Code; requisites of marriage; solemnizing officers Page 102 of 391 1994 No. 9: 1} The complete publication of the Family Code was made on August 4, 1987. On September 4. 1987. Junior Cruz and Gemma Reyes were married before a municipal mayor. Was the marriage valid? 2) Suppose the couple got married on September 1, 1994 at the Manila Hotel before the Philippine Consul General to Hongkong, who was on vacation in Manila. The couple executed an affidavit consenting to the celebration of the marriage at the Manila Hotel. Is the marriage valid? Answer; 1) a) Yes, the marriage is valid. The Family Code took effect on August 3, 1988. At the time of the marriage on September 4, 1987, municipal mayors were empowered to solemnize marriage under the Civil Code of 1950. 2) a) The marriage is not valid. Consuls and vice-consuls are empowered to solemnize marriages between Philippine citizens abroad in the consular office of the foreign country to which they were assigned and have no power to solemnize marriage on Philippine soil. b) A Philippine consul is authorized by law to solemnize marriages abroad between Filipino citizens. He has no authority to solemnize a marriage in the Philippines. Consequently, the marriage in question is void, unless either or both of the contracting parties believed in good faith that the consul general had authority to solemnize their marriage in which case the marriage is valid. 02; Family Code; retroactive application; vested rights 2000 No I b) On April 15, 1980, Rene and Angelina were married to each other without a marriage settlement. In 1985, they acquired a parcel of land in Quezon City. On June 1, 1990, when Angelina was away in Baguio, Rene sold the said lot to Marcelo. Is the sale void or voidable? (2%) SUGGESTED ANSWER: The sale is void. Since the sale was executed in 1990, the Family Code is the law applicable. Under Article 124 of the FC, the sale of a conjugal property by a spouse without the consent of the other is void. Alternative Answer; The sale is voidable. The provisions of the Family Code may apply retroactively but only if such application will not impair vested rights. When Rene and Angelina got married in 1980, the law that governed their property relations was the New Civil Code. Under the NCC. as interpreted by the Supreme Court in Heirs of Felipe v. Aldon, 100 SCRA 628 and reiterated in Heirs of Ayuste v. Malabonga, G.R No, 118784, 2 September 1999, the sale executed by the husband without the consent of the wife is voidable. The husband has already acquired a vested right on the voidable nature of dispositions made without the consent of the wife. Hence, Article 124 of the Family Code which makes the sale void does not apply. 02; Family Code; rights and obligations of husband and wife 1983 No. 2 The wife, A, left her husband, B, taking along their 2-year old son, and demanded separate maintenance for herself and their child. B refused, alleging that A abandoned him without cause (a claim she denies), that his income is small and inadequate for his own support and that of his wife and child, if they lived apart from him, and prayed that his wife and child return to the conjugal home where he would Page 103 of 391 support them and that, if she is not willing to do so, to surrender to him the custody of their son, she being- unfit to take care of him. (a) May A be compelled to live with B again? Why? Is the existence of a just cause far her abandonment of the conjugal home decisive of this question? Why? (b) Are A and the child entitled to separate maintenance even if B's income is small? Why? Answer (Examiner's Answer) (a) A cannot be compelled, irrespective of whether she left the conjugal home with or without a just cause. The law has not prescribed a remedy by which the wife may be forced to live with her husband again. (b) If A abandoned B for a just cause, she may demand separate maintenance; otherwise, she cannot. The child must be supported regardless of where he is and of the amount of the father's income. If A is entitled to support, she too has a right to it irrespective of how much the husband earns. Whether big or small, he must share it with his wife and child. (Committee's Answer) (a) A cannot be compelled to live with B again. The reason is that the obligation of cohabitation is a purely personal obligation, an obligation to do. In this type of obligation, there can be no such thing as an action for specific performance. To compel the wife to return to the conjugal home would constitute an infringement of her liberty. This is well-settled. The existence of a just cause for A's abandonment of the conjugal home is not decisive of the question of whether or not A can be compelled to live again with B. The existence of a just cause for A's abandonment is material only when it comes to the question of whether or not a wife can be compelled to comply with his obligation of cohabitation. (Note: The above answer is based on Arts. 109, 178 no. 1, Civil Code andon decided cases.) 02; Family Code; rights and obligations of husband and wife; family residence; support; custody 1984 No. 3 Spouses Mario and Lorna and their five-year old child Max, were living with Lorna’s mother in Manila, Mario was offered an attractive job in Baguio City and wanted to relocate his family. Lorna, however, refused to go with him. Accepting the offer, Mario left alone for Baguio City and started working, where he did well. After six months, Lorna filed a case against Mario for support for Max and herself. Mario answered that he was willing to support them in his house in Baguio City. He asked the court to award to him the custody of his son should Lorna refuse to live in Baguio City. What are the rights and obligations of Mario and Lorna under the circumstances? Explain. Answer: A. Furnished by Office of Justice Palma Mario has the right to fix the residence of the family (Art. 110). Having chosen to live and work in Baguio, Mario is deemed to have selected that place as the location of the family residence. The husband and wife are obliged to live together Page 104 of 391 and render mutual help and support (Art. 109). However, Lorna cannot be forced to live with Mario by court order (Arroyo vs. Vasquez de Arroyo 42 Phil. 54). The person obliged to give support may, at his option, fulfill his obligation either by paying the allowance fixed, or by receiving and maintaining in his house the person who has a right to receive support (Art. 299). Hence, should Lorna refuse to live in Baguio, Mario's obligation to give support will be discharged. In all questions regarding the care and custody of Max, his welfare shall be the paramount consideration (Art 8, Child and Youth Welfare Code). However, even if Mario is not awarded the custody of Max, he win still be required to give support. B. Comments and Suggested Answer We agree with the answer of the Bar Examiner. 02; Family Code; special parental authority; liability of teachers 2003 No VIII. If during class hours, while the teacher was chatting with other teachers in the school corridor, a 7 year old male pupil stabs the eye of another boy with a ball pen during a fight, causing permanent blindness to the victim, who could be liable for damages for the boy’s injury: the teacher, the school authorities, or the guilty boy’s parents? Explain. SUGGESTED ANSWER: The school, its administrators, and teachers have special parental authority and responsibility over the minor child while under their supervision, instruction or custody (Article 218, FC). They are principally and solidarily liable for the damages caused by the acts or omissions of the unemancipated minor unless they exercised the proper diligence required under the circumstances (Article 219, FC). In the problem, the teacher and the school authorities are liable for the blindness of the victim, because the student who cause it was under their special parental authority and they were negligent. They were negligent because they were chatting in the corridor during the class period when the stabbing incident occurred. The incident could have been prevented had the teacher been inside the classroom at that time. The guilty boy’s parents are subsidiarily liable under Article 219 of the Family Code. 02; Family Code; support 1980 No. I (b) A wife filed against her husband a complaint for legal separation on the ground that the latter had attempted on her life, with a prayer for support pendente lite. The husband opposed the grant of support on the ground of adultery on the part of the wife. Over the husband's opposition, the Juvenile and Domestic Relations Court granted support pendente lite. The husband instituted certiorari proceedings before the Court of Appeals seeking to annul the award. Is the wife entitled to support pendente lite? Answer (b) Yes, the wife is entitled to support pendente lite. It is true that adultery of the wife is a valid defense against an action for support commenced by a wife against her husband. This is well-settled. However, the alleged adultery must be established by competent evidence. The mere allegation that the wife has committed adultery will not bar her from the right to receive support pendente lite. (NOTE: The above answer is based on Reyes vs. Ines-Luciano, 88 SCRA 803. A contrary answer may also be correct provided that the bar candidate qualifies his answer by assuming that the husband was able to prove adultery of his wife. See Page 105 of 391 Quintana vs. Lerma, 24 Phil. 285; Sanchez vs. Zulueta, 68 Phil. ,110; Mangoma vs. Macadaeg, 90 Phil. 508). 02; Family Code; support 1985 No. 4 B) His fortune having been wiped out by business reverses, A demands support from C, the descendant of A's deceased illegitimate son Is C bound to give support to A? Discuss. Answers: B) 1. Yes, C is bound to give support to A since the descendants of acknowledged natural children and natural children by legal fiction are obliged to support their grandparents. The exception arises in case of descendants of illegitimate children who are not natural who do not have to support their grandparents. 2. No, C is not bound to give support to A since descendants of illegitimate children who are not natural do not have to support their grandparents. 3. No, because in the case of illegitimate children the support is only between the two—between the parent and child. In case however, the illegitimate is an acknowledged natural child or a natural child by legal fiction, then, C is bound to support A. 4. We must distinguish whether the illegitimate is an acknowledged natural son or a natural son by legal fiction or a spurious son. C is not bound to support A if the illegitimate son is spurious. In the other two cases, C is bound to support A. 5. A parent may demand support from his acknowledged natural children and the legitimate or illegitimate of the latter. But if the illegitimate child is not natural, the descendants of the latter may not be obligated to sup-port said parent. (Art 291, in relation to Art, 287, Civil Code). Accordingly, the right of A to demand support from C would depend on whether or not B is a natural or non-natural child of A. 02; Family Code; void marriages 2004 No. X A. BONI and ANNE met while working overseas. They became sweethearts and got engaged to be married on New Year’s Eve aboard a cruise ship in the Caribbean. They took the proper license to marry in New York City, where there is a Filipino consulate. But as planned the wedding ceremony was officiated by the captain of the Norwegian-registered vessel in a private suite among selected friends. Back in Manila, Anne discovered that Boni had been married in Bacolod City 5 years earlier but divorced in Oslo only last year. His first wife was also a Filipina but now based in Sweden. Boni himself is a resident of Norway where he and Anne plan to live permanently. Anne retains your services to advise her on whether her marriage to Boni is valid under Philippine law? Is there anything else she should do under the circumstances? (5%) 02; Family Code; void marriages 1986 No. 20: Makisig and Marikit, who are first cousins, are Filipino citizens. They had a romantic affair and begot a child Maganda, in the Philippines. They decided to migrate to the Republic of Helios where marriages between first cousins are allowed. They got married there. Subsequently, they drew up a joint affidavit Page 106 of 391 recognizing and legitimizing Maganda. Years later, they returned to the Philippines. They never lost their Philippine citizenship. What is the status of the marriage between Makisig and Marikit? What is Maganda's status? Explain. Answer: The marriage is void. Filipino citizens are bound by the laws of the Philippines with regard to their capacity to marry, regardless of where the marriage is celebrated. This is an incestuous marriage which under Philippine laws is void from the very beginning. The child is an illegitimate child other than natural, or spurious. Answer — The marriage between first cousins is void even if valid in the place where celebrated. Philippine law follows the citizen even if abroad, and such marriage is considered incestuous under Philippine law. The child cannot be legitimated because she is not a natural child as her parents suffered from a legal impediment to marry each other at the time of her conception. She is an illegitimate child, who is not a natural child. 02; Family Code; void marriages 1987 No, 14: Lina married Hugo in a church ceremony, Hugo discovered that five years before, Lina married Sixto in a civil ceremony. Lina however, did not know at the time she married Sixto that the latter was already married, Upon learning that Sixto was already married Lina immediately left Sixto and since then had not seen nor heard from him. Lina, however, did not take any step to have her marriage with Sixto annuled before she married Hugo. Could Hugo successfully sue for a declaration of nullity of his marriage with Lina? Explain, Answer: No, Hugo cannot sue for a declaration of nullity of his marriage with Lina. The marriage of Lina with Sixto was void, so the marriage of Hugo with Lina is valid. There was no need for a prior court action to declare the marriage with Sixto as void (Yap vs. Court of Appeals, 145 SCRA 229). Answer: Yes, because the marriage of Hugo with Lina is not valid, for the reason that there was no prior judicial declaration that the marriage with Sixto is void. Such judicial declaration is required by law (Wiegel vs. Sempio Dy 143 SCR A 49 9 \ 02; Family Code; void marriages 1989 No. 2: (2) Cesar and Baby contracted marriage on June 15, 1983. A year later, Baby bore a child, "X" The following year, the couple acquired a car and a residential lot in Metro Manila. On September 1, 1988, the marriage was declared void from the beginning by a competent court because Cesar was below 16 years of age at the time of the marriage. Sometime in December, 1988, Cesar met Rosa with whom he fell in love, Cesar married Rosa on January 15, 1989. On September 1, 1989, Rosa gave birth prematurely to a child, "Y". Is the marriage of Cesar and Rosa valid? What is the status of the child "Y?" Give your reasons. Answer: If there was a liquidation of the properties of the first marriage and the presumptive legitime of "X" was duly delivered, the second marriage is valid. If there Page 107 of 391 was no such compliance, then the marriage is void. The child is legitimate since "Y" was born a full year after the termination of the first marriage and during the second marriage. Alternative Answers: A. The Family Code requires the registration of the judgment of nullity, the partition of the properties and the delivery of the legitimes to be made with the appropriate civil registry and registries of property. It further provides that failure to comply with the said requirement shall render the marriage null and void. If there was such a recording, the marriage is valid. Otherwise, the marriage is void. Nevertheless, child "Y" is a legitimate child because it was born during the marriage of Cesar and Rosa, B. Since the problem does not state that there was compliance with the requirements as to recording of judgment of nullity and the liquidation and delivery of the presumptive legitime of the child "X", the marriage of Cesar and Rosa is void. However, the child "Y" is legitimate because it was born during the marriage of Cesar and Rosa. 02; Family Code; void marriages 1982 No. 1 "S", the son of "A", married "D", the daughter of "X". "X" is a sister of "A". "S" and "D" begot a daughter "C". In 1979, while "D" was still living, "S" married "M", and during their covertures, a child "E" was born. What is the legal status — (a) of the marriage of "S" to "M" ? (b) of "C", the child of "S" and "D"? (c) of "E", the child of "S" and "M"? Reasons. Answer (a) The marriage of "S" to "M" is valid. The reason is obvious. The previous marriage of "S" to "D" is void from the very beginning. Consequently, there is no legal impediment to the marriage of "S" to "M". It must be observed that "X", the mother of "D", is a sister of "A", the father of "S". Hence, "S" and "D" are first cousins. They are, therefore, collateral relatives within the fourth degree. Under the Civil Code, their marriage is incestuous, and as a consequence, void from the very beginning. No judicial declaration of nullity is necessary in order that it is void. Hence, "S" was free to marry "M" despite his previous marriage to his first cousin "D". (b) "C", the child of "S" and "D", is a natural child by legal fiction. According to the Civil Code, children conceived or born of marriage which are void from the beginning shall have the same status, rights and obligations as acknowledged natural children and are called natural children by legal fiction. Since as stated above, the marriage of "S" and "D" is void, it is clear that "C" is a natural child by legal fiction, (c) "E" is a legitimate child. As we have stated above, the marriage of "S" and "M" is valid. As a consequence, their child "E" is a legitimate child. (Note; The answer to (a) is based on Art. 81, Civil Code; the answer to (b) is based on Art. 89, Civil Code, while the answer to (c) necessarily follows from the answer to (a).) 02; Family Code; void marriages Page 108 of 391 1982 No. 6 Nora, the 13-year old daughter of Mr. and Mrs. Garcia eloped with her first cousin, Rene, to Hongkong where they got married. Upon their return to the Philippines a month later, they set up residence in Quezon City. Mr. and Mrs. Garcia lost no time in filing with the proper court a petition for a writ of habeas corpus to regain custody of Nora. Nora opposes said petition contending that her marriage to Rene has emancipated her from the authority of her parents-petitioners. Is the contention of Nora legally tenable? Reasons. Answer The contention of Nora is legally untenable. The reason is crystal clear. Her marriage to Rene in Hongkong has not emancipated her from the parental authority of her parents for the simple reason that said marriage is not valid in the Philippines. According to the Civil Code, marriages performed outside the Philippines in accordance with the laws in force in the country where they were performed, and valid there as such, shall also be valid in this country, except bigamous, polygamous, or incestuous marriages as determined by Philippine law. The instant case falls within the purview of the general rule. The marriage of Nora and Rene is incestuous as determined by Philippine law. According to the Civil Code, marriages between collateral relatives within the fourth civil degree are incestuous, and therefore, void ab initio. Nora and Rene are first cousins. Therefore, they are collateral relatives within the fourth civil degree. Hence, their marriage is incestuous, and therefore, void ab initio. (Note; The above answer is based on Art, 71 of the Civil Code. The committee respectfully recommends that an answer based on Art. 15 of the Code, arriving at the same conclusions, should also be considered correct.) 02; Family Code; void marriages; legal personality to seek declaration of nullity 2002 No I. On May 1, 1978 Facundo married Petra, by whom he had a son Sotero. Petra died on July 1, 1996, while Facundo died on January 1, 2002. Before his demise, Facundo had married, on July 1, 2002, Quercia. Having lived together as husband and wife since July 1, 1990, Facundo and Quercia did not secure a marriage license but executed the requisite affidavit for the purpose. To ensure that his inheritance rights are not adversely affected by his father second marriage, Sotero now brings a suit to seek a declaration of the nullity of the marriage of Facundo and Quercia, grounded on the absence of a valid marriage license. Quercia contends that there was no need for a marriage license in view for her having lived continuously with Facundo for five years before their marriage and that has Sotero has no legal personality to seek a declaration of nullity of the marriage since Facundo is now deceased. A. Is the marriage of Facundo and Quercia valid, despite the absence of a marriage license? Explain. (2%) B. Does Sotero have the personality to seek the declaration of nullity of the marriage, especially now that Facundo is already deceased? Explain. (3%) SUGGESTED ANSWER: A. It is void (abs of marriage license) B. A void marriage may be questioned by any interested party in any proceeding where the resolution of the issue is material. Being a compulsory heir, Soterro has the personality to question the validity of the marriage of Facundo and Page 109 of 391 Quercia. Otherwise, his participation in the estate on Facundo would be affected. (Ninãl V. Bayadog, 328 SCRA 122 [2000] ). 02; Family Code; void marriages; property regime 1991 No 3; In June 1985, James married Mary. In September 1988, he also married Ophelia with whom he begot two (2) children, A and B, In July 1989, Mary died. In July 1990, he married Shirley and abandoned Ophelia, During their union. James and Ophelia acquired a residential lot worth P300,000.00. Ophelia sues James for bigamy and prays that his marriage with Shirley be declared null and void James, on the other hand, claims that since his marriage to Ophelia was contracted during the existence of his marriage with Mary, the former is not binding upon him, the same being void ab initio he further claims that his marriage to Shirley is valid and binding as he was already legally capacitated at the time he married her. (a) Is the contention of James correct? (b) What property regime governed the union of James and Ophelia? (c) Is the estate of Mary entitled to a share in the residential lot acquired by James and Ophelia? Answer; A. Yes. His marriage to Ophelia is void ab initio because of his subsisting prior marriage to Mary, His marriage to Shirley, after Mary's death, is valid and binding. Alternative Answer; A. No. The contention of James is not correct. Art. 40, Family Code, provides that the "absolute nullity of a previous marriage may be invoked for purposes of remarriage on the basis solely of a final judgment declaring such previous marriage void." It can be said, therefore, that the marriage of James to Shirley is void since his previous marriage to Ophelia, although itself void, had not yet been judicially declared void, Alternative Answer: A. No. The contention of James is not correct. He cannot set up as a defense his own criminal act or wrongdoingAnswer; B. The provisions of Art 148 of the Family Code, shall govern: Art. 148. In cases of cohabitation not falling under the preceding Article, only the properties acquired by both of the parties through their actual joint contribution of money, property, or industry shall be owned by them in common in proportion to their respective contributions. In the absence, of proof to the contrary, their contributions and corresponding shares are presumed to be equal. The same rule and presumption shall apply to joint deposits of money and evidences of credit. C. It should be distinguished when the property was acquired. If it was acquired before Mary's death, the estate of Mary is entitled to 1/2 of the share of James. If it was acquired after Mary's death, there will be no share at all for the estate of Mary. 02; Family Code; void marriages; psychological incpacity Page 110 of 391 2002 No II. A. Give a brief definition or explanation of the term “psychological incapacity” as a ground for the declaration of nullity of a marriage. (2%) B. If existing at the inception of marriage, would the state of being of unsound mind or the concealment of drug addiction, habitual alcoholism, homosexuality or lesbianism be considered indicia of psychological incapacity? Explain. (2%). SUGGESTED ANSWER: A.” Psychological incapacity” is a mental disorder of the most serious type showing the incapability of one or both spouses to comply the essential marital obligations of love, respect, cohabitation, mutual help and support, trust and commitment. It must be characterized by Juridical antecedence, gravity and incurability and its root causes must be clinically identified or examined. (Santos v. CA, 240 SCRA 20 [1995]). B. In the case of Santos v. Court of Appeals, 240 SCRA 20 (1995), The Supreme Court held that being of unsound mind, drug addiction, habitual alcoholism, lesbianism or homosexuality may be indicia of psychological incapacity, depending on the degree of severity of the disorder. However, the concealment of drug addiction, habitual alcoholism, lesbianism or homosexuality is a ground of annulment of marriage. Page 111 of 391 03; Succession; acceptance, repudiation, collation 1977 No. XIII-a Distinguish acceptance and repudiation of inheritance from collation. Answer Acceptance is the act of an heir, legatee or devisee in manifesting his desire in accordance with the formalities prescribed by law to succeed to the inheritance, legacy or devise, while repudiation is the act of an heir, legatee or devisee in manifesting his desire in accordance with the formalities prescribed by law not to succeed to such inheritance, legacy or devise. Collation, on the other hand, refers to the act of restoring to the common mass of the hereditary estate, either actually or fictitiously, any property or right, which a compulsory heir, who succeeds with other compulsory heirs, may have received by way of donation or any other gratuitous title from the decedent during the lifetime of the latter, but which is understood for legal purposes as an advance of his legitime. (NOTE: The above answer may be stated substantially). 03; Succession; amount of successional rights 2004 No. VIII B. Mr. XT and Mrs. YT have been married for 20 years. Suppose the wife, YT, died childless, survived only by her husband, XT. What would be the share of XT from her estate as inheritance? Why? Explain. (5%) 03; Succession; barrier between illegitimate and legitimate relatives 1984 No. 9 A had two sons, one legitimate (B) and the other illegitimate (C), who both died in a car accident. At the time of the accident, B was not married but had an illegitimate son, D. C also had an illegitimate son, E. Upon learning of the death of his sons, A suffered a heart attack and died. Can D and E inherit from A? Explain Answer: A. Furnished by Office of Justice Palma, D, cannot inherit. The illegitimate child cannot inherit from the legitimate relatives of his father or mother, {Art. 992). E can inherit. The rights of illegitimate children are transmitted upon their death to their descendants, legitimate or illegitimate. (Art 990). B. Comments and Suggested Answer We agree with the answer of the Bar Examiner. 03; Succession; barrier between illegitimate and legitimate relatives 1996 No. 11: Cristina. the illegitimate daughter of Jose and Maria, died Intestate, without any descendant or ascendant. Her valuable estate is being claimed by Ana, the legitimate daughter of Jose, and Eduardo, the legitimate son of Maria. Is either, both, or neither of them entitled to inherit? Explain. Answer; Neither Ana nor Eduardo is entitled to inherit of ab intestato from Cristina. Both are legitimate relatives of Cristina's illegitimate parents and therefore they fall Page 112 of 391 under the prohibition prescribed by Art. 992, NCC (Manuel v. Ferrer, 242 SCRA 477; Diaz v. Court of Appeals, 182 SCRA 427). 03; Succession; barrier between illegitimate and legitimate relatives 1993 No. 2; A is the acknowledged natural child of B who died when A was already 22 years old. When B's full blood brother, C, died he (C) was survived by his widow and four children of his other brother. D. Claiming that he is entitled to inherit from his father's brother. C, A brought suit to obtain his share in the estate of C. Will his action prosper? Answer: No, the action of A will not prosper. On the premise that B, C and D are legitimate brothers, as an illegitimate child of B, A cannot inherit in intestacy from C who is a legitimate brother of B. Only the wife of C in her own right and the legitimate relatives of C (i.e. the children of D as C's legitimate nephews inheriting as collateral relatives) can inherit in intestacy. (Arts. 992, 1001, 1OO5 and 975, Civil Code) Alternative Answer: The action of A will not prosper. Being an illegitimate, he is barred by Article 992 of the Civil Code from inheriting ab intestato from the legitimate relatives of his father. 03; Succession; barrier between legitimate and illegitimate relatives 1983 No. 9 A, a spurious child, died intestate survived by B, the brother of his deceased mother, and C, his mother's legitimate granddaughter. May B and C inherit from A? Reasons. Answer B cannot because uncles have no right to inherit from their illegitimate nephews. C cannot succeed either because legitimate relatives have no right to inherit from an illegitimate child and vice versa. 03; Succession; capacity to inherit; conditional devise 1980 No. VII (a) In his will, Reverend Father "R' devised a parcel of riceland in favor of "his nearest male relative who would study for the priesthood." The Will was duly probated. No nephew of the testator claimed the devise and the testate proceeding remained pending. In the interim, the riceland was to be administered by the Parish Priest of the locality pursuant to a project of partition approved by the Probate Court. Twenty-one years after the testator's death, the Parish Priest filed a petition before the Court for delivery of the riceland to the Church as trustee. The legal heirs of Father "R" objected and prayed instead that the bequest be declared inoperative and that they be adjudged entitled to the riceland. It also turned out that the testator had a grandnephew (a grandson of his first cousin) who was taking the holy orders in a Seminary. Would you construe the testamentary provision liberally so as to render the trust operative and to prevent intestacy, or would you declare the bequest inoperative and the legal heirs entitled to the riceland? Answer (a) It depends. Page 113 of 391 If the Seminarian, who is presently studying for the priesthood, was born before the death of Father "R", it is submitted that the testamentary provision should be liberally construed so as to prevent intestacy. The land should be delivered to the Parish Priest as trustee or administrator. The reason is obvious. There is always the possibility that the seminarian might not become a priest. True, Father "K" devised the land to his nearest nephew male relative who would study for the priesthood. Apparently, the condition has already been fulfilled. It is however, submitted that the testatorial intention is clear. The devisee must not only study for the priesthood; he must become a priest. Once he becomes a priest, the land should then be delivered to him. If the seminarian was born after the death of Father "R", bequest is certainly inoperative and the legal heirs of the testator shall, therefore, be entitled to the riceland. In other -words, the land shall be merged in the mass of the hereditary estate, and from there, it shall pass to the legal heirs in accordance with the rules of intestacy (Art. 956, Civil Code). The reason is clear. The seminarian cannot inherit from Father "R", Under our law, in order to be capacitated to inherit, the heir, legatee or devisee must be living at the moment the succession opens, except in case of representation when it is proper. (Art. 1025, Civil Code). (NOTE: The above problem is obviously a modification of the problem resolved in Parish Priest of Victoria vs. Rigor, 89 SCRA 493. Because of the fact that only one out of several conditions imposed by the testator was retained by the Honorable Bar Examiner in the above hypothetical problem, the Committee respectfully prays that either one of the above assumptions should be considered as a correct answer. The Committee further prays that if a bar candidate assumes that the seminarian was born before the death of Father "R" and then advances the opinion that the land should be delivered to him because the condition has already been fulfilled, such an answer should be considered as a correct answer.) 03; Succession; collation 1993 No. 17; Joaquin Reyes bought from Julio Cruz a residential lot of 300 square meters in Quezon City for which Joaquin paid Julio the amount of P300,000.00, When the deed was about to be prepared Joaquin told Julio that it be drawn in the name of Joaquina Roxas. his acknowledged natural child. Thus, the deed was so prepared and executed by Julio. Joaquina then built a house on the lot where she, her husband and children resided. Upon Joaquin's death, his legitimate children sought to recover possession and ownership of the lot. claiming that Joaquina Roxas was but a trustee of their father. Will the action against Joaquina Roxas prosper? Answer: Yes, because there is a presumed donation in favor of Joaquina under Art. 1448 of the Civil Code (De los Santos v. Reyes, 27 January 1992, 206 SCRA 437). However, the donation should be collated to the hereditary estate and the legitime of the other heirs should be preserved. Alternative Answer; Yes, the action against Joaquina Roxas will prosper, but only to the extent of the aliquot hereditary rights of the legitimate children as heirs. Joaquina will be entitled to retain her own share as an illegitimate child, (Arts. 1440 and 1453. Civil Code; Art. 176, F. C.) 03; Succession; collation 1978 No. VII-a Are the following subject to collation? Explain fully your answers. Page 114 of 391 1. Gifts bestowed by the deceased father during his lifetime for the debts of a son, 2. Money paid by the deceased parent during his lifetime for the debts of a son. Answer 1. Gifts bestowed by the deceased father during his lifetime to the spouse of his son should not be subject to collation. This means that the law will not consider such gifts as advances made by the decedent of the legitime of his son, and therefore, chargeable against such legitime during the partition of the hereditary estate. Instead, the law considers such gifts as ordinary donations inter vivos made to a stranger, and therefore, chargeable against the disposable free portion of the estate. It would be different if the gifts are bestowed to the spouses jointly. In such case, one-half (1/2) of the value of such gifts would then be charged against the legitime of the son and the other one-half (1/2) against the disposable free portion. 2. Money paid by the deceased parent during his lifetime for the debts of a son should be brought to collation. In reality, what we have here is a donation inter vivos made to a compulsory heir. From the point of view of the law, the money is considered as an advance of the legitime. Consequently, in the portion of the hereditary estate, the amount should be charged against the legitime of the son. (NOTE: The above answers are based on Arts. 1066 and 1069 of the Civil Code and on the view sustained by practically all commentators on the real meaning of collation under Arts. 1061, et seq., of the Civil Code.) 03; Succession; disinheritance 1999 No VIII, (a.) Mr. Palma, widower, has three daughters D, D-l and D-3. He executes a Will disinheriting D because she married a man he did not like, and instituting daughters D-1 and D-2 as his heirs to his entire estate of P 1,000,000.00, Upon Mr, Raima's death, how should his estate be divided? Explain. (5%) ANSWER: (a) This is a case of ineffective disinheritance because marrying a man that the father did not approve of is not a ground for disinheriting D. Therefore, the institution of D-l and D-2 shall be annulled insofar as it prejudices the legitime of D, and the institution of D-l and D-2 shall only apply on the free portion in the amount of P500,000.00. Therefore, D, D-l and D-2 will get their legitimes of P500.000.00 divided into three equal parts and D-l and D-2 will get a reduced testamentary disposition of P250,OOO.OO each. Hence, the shares will be: D - P166,666.66 D-l P166,666.66 + P25O.OOO.OO D-2 P166,666.66 + P250,000.00 03; Succession; disinheritance vs preterition 2000 No IV In his last will and testament, Lamberto 1) disinherits his daughter Wilma because "she is disrespectful towards me and raises her voice talking to me", 2) omits entirely his spouse Elvira, 3) leaves a legacy of P100,000.00 to his mistress Rosa and P50,000.00 to his driver Ernie and 4) institutes his son Baldo as his sole heir. How will you distribute his estate of P1,000,000.00? (5%) SUGGESTED ANSWER: Page 115 of 391 The disinheritance of Wilma was ineffective because the ground relied upon by the testator does not constitute maltreatment under Article 919(6) of the New Civil Code. Hence, the testamentary provisions In the will shall be annulled but only to the extent that her legitime was impaired. The total omission of Elvira does not constitute preterition because she is not a compulsory heir in the direct line. Only compulsory heirs in the direct line may be the subject of preterition. Not having been preterited, she will be entitled only to her legitime. The legacy in favor of Rosa is void under Article 1028 for being in consideration of her adulterous relation with the testator. She is, therefore, disqualified to receive the legacy of 100,000 pesos. The legacy of 50,000 pesos in favor of Ernie is not inofficious not having exceeded the free portion. Hence, he shall be entitled to receive It. The institution of Baldo, which applies only to the free portion, shall be respected. In sum, the estate of Lamberto will be distributed as follows: Baldo----------------- 450,000 Wilma--------------- 250,000 Elvira----------------- 250,000 Ernie----------------- 50,000 1,000,000 ALTERNATIVE ANSWER; The disinheritance of Wilma was effective because disrespect of, and raising of voice to, her father constitute maltreatment under Article 919(6) of the New Civil Code. She is, therefore, not entitled to inherit anything. Her inheritance will go to the other legal heirs. The total omission of Elvira Is not preterition because she is not a compulsory heir in the direct line. She will receive only her legitime. The legacy in favor of Rosa is void under Article 1028 for being in consideration of her adulterous relation with the testator. She is, therefore, disqualified to receive the legacy. Ernie will receive the legacy In his favor because it is not inofficious. The institution of Baldo, which applies only to the free portion, will be respected. In sum, the estate of Lamberto shall be distributed as follows: Heir Legitime Baldo 500,000 Legacy Institution 200.000 Elvira 250,000 Ernie 50,000 50,000 TOTAL 750,000 50,000 TOTAL 700,000 250,000 200,000 1,000,000 ANOTHER ALTERNATIVE ANSWER: Same answer as the first Alternative Answer except as to distribution. Justice Jurado solved this problem differently. In his opinion, the legitime of the heir who was disinherited Is distributed among the other compulsory heirs in proportion to their respective legitimes, while his share in the intestate portion. If any, is distributed among the other legal heirs by accretion under Article 1018 of the NCC in Page 116 of 391 proportion to their respective intestate shares. In sum the distribution shall be as follows: Heir Legitime Distribution of Wilma’s Legacy Institution TOTAL Legitime Baldo 250,0000 Wilma (250.000) Elvira 250,000 125,000 125.000 Ernie TOTAL 200,000 375.000 50,000 500,000 250,000 575,000 50,000 50.000 200,000 1,000,000 03; Succession; disinheritance vs preterition 1993 No. 7: Maria, to spite her husband Jorge, whom she suspected was having an affair with another woman, executed a will, unknown to him, bequeathing all the properties she inherited from her parents, to her sister Miguela. Upon her death, the will was presented for probate. Jorge opposed probate of the will on the ground that the will was executed by his wife without his knowledge, much less consent, and that it deprived him of his legitime. After all, he had given her no cause for disinheritance, added Jorge in his opposition. How will you rule on Jorge's opposition to the probate of Maria's will. If you were the Judge? Answer; As Judge, I shall rule as follows: Jorge's opposition should be sustained in part and denied in part. Jorge's omission as spouse of Maria is not preterition of a compulsory heir in the direct line. Hence, Art. 854 of the Civil Code does not apply, and the institution of Miguela as heir is valid, but only to the extent of the free portion of one-half. Jorge is still entitled to one-half of the estate as his legitime. (Art. 1001, Civil Code) Alternative Answers; a) As Judge, I shall rule as follows: Jorge's opposition should be sustained in part and denied in part. This is a case of ineffective disinheritance under Art, 918 of the Civil Code, because the omission of the compulsory heir Jorge by Maria was intentional. Consequently, the institution of Miguela as heir is void only insofar as the legitime of Jorge is prejudiced. Accordingly, Jorge is entitled to his legitime of onehalf of the estate, and Miguela gets the other half. b) As Judge. I shall rule as follows: Jorge's opposition should be sustained. This is a case of preterition under Article 854 Civil Code, The result of the omission of Jorge as compulsory heir having the same right equivalent to a legitimate child "in the direct line" is that total intestacy will arise, and Jorge will inherit the entire estate. Page 117 of 391 c) As Judge, I shall rule as follows: the opposition should be denied since it is predicated upon causes not recognized by law as grounds for disallowance of a wll, to wit: 1) that the will was made without his knowledge; 2) that the will was made without his consent; and 3) that it has the effect of depriving him of his legitime. which is a ground that goes into the intrinsic validity of the will and need not be resolved during the probate proceedings. However, the opposition may be entertained for, the purpose of securing to the husband his right to the legitime on the theory that the will constitutes an ineffective disinheritance under Art. 918 of the Civil Code, d) As Judge. I shall rule as follows: Jorge is entitled to receive his legitime from the estate of his wife. He was not disinherited in the will even assuming that he gave ground for disinheritance, hence, he is still entitled to his legitime. Jorge, however, cannot receive anything from the free portion. He cannot claim preterition as he is not a compulsory heir in the direct line. There being no preterition, the institution of the sister was valid and the only right of Jorge is to claim his legitime. 03; Succession; disinheritance, ineffective 1982 No. 13 "X"' s only living relatives are his brothers "A" and "B". "X" executed a will providing as follows: "I institute my brother "A" as my sole and universal heir; and I am disinheriting my brother "B" because he refused to support me when I had nothing." After "X"' s demise, is "B" entitled to share in the inheritance on the ground that the disinheritance was ineffective because "X" had not proved that he in fact refused to support the testator? Reason. Answer "B" is not entitled to share in the inheritance not on the ground that the disinheritance was ineffective because "X" had not proved that he in fact refused to support the testator. The reason is evident, "B" is not a compulsory heir. The law on disinheritance applied only to compulsory heirs, never to voluntary heirs or to legatees or devisees. Consequently, even assuming that indeed "X" had not proved that "B" refused to support him, such fact would not have only effect whatsoever. The act of "X" in disinheriting "B" is clearly a surplusage. (Note: The above answer is based on Arts, 915, et seq. of the Civil Code.) 03; Succession; disinheritance, ineffective 1984 No, 10 A had two legitimate children, namely, B and C. He made a will, instituting G and a friend, D, as his heirs and giving a P10,000 legacy to E, his former driver. He, however, expressly disinherited B without specifying the reason therefore. Assuming that A's net estate is worth P100,000 upon his death, how will it be distributed? Answer. A. Furnished by Office of Justice Palma The disinheritance of B is invalid, because there is no specification of the cause therefore. However, the institution of the heirs will only be partially annulled insofar as it may prejudice his legitime (Art. 918). The legacies and other Page 118 of 391 testamentary dispositions remain valid insofar as it will not impair his legitime. B therefore gets his legitime which is 1/4 of the estate, or P25,000.00. The legacy of P10,000 to E will be paid. The balance of the estate of P65,000 will, be divided equally between the instituted heirs, C and D. B. Comments and Suggested Answer We suggest that the following should be accepted as a correct answer: The disinheritance of B is defective or imperfect because there is no specification of the cause in the will as required by law. However, the institution of heirs will only be partially annulled insofar as it may prejudice his legitime (Art 918, Civil Code). Therefore B will still be entitled to his legitime which is 1/2 of 1/2 of P100,000, or P25,000. The legacies, however, are valid so long as they are not inofficious (Ibid.) It is obvious that the legacy of P10,000 given to E is not inofficious because it can easily be contained in the free portion of P50,000. Therefore, E will be entitled to such legacy. Since A had instituted as heirs his child C and his friend D as heirs without designation of shares, therefore, applying the view of Manresa, which has been adopted by commentators in this country, Tolentino among them (6 Manresa 98-99; 3 Tolentino 161; Art. 846, Civil Code), the legitime of C, which is 1/2 of 1/2 of P100,000 or P25,000, must first be separated and allotted to him because the testator cannot deprive him of not. Then, the remainder of P40,000 which is the disposable free portion, will be divided equally between C and D, the two instituted heirs. Consequently, the estate of P100,000.00 will be distributed as follows: B — P25,000 as compulsory heir; C—P25,000 as compulsory heir; P20,000 as voluntary heir; D—P20,000 as voluntary heir; E— P10,000 as legatee. 03; Succession; disinheritance; compulsory heirs 1977 No. XII-c Who are compulsory heirs? Give five (5) instances which shall be sufficient causes for the disinheritance of children and descendants, legitimate as well as illegitimate. Answer In general, compulsory heirs are those for whom the law has reserved a portion of the testator's estate which is known as the legitime. In particular, the following are compulsory heirs: (1) Legitimate children and descendants, with respect to their legitimate parents and ascendants; (2) In default of the foregoing, legitimate parents and ascendants, with respect to their legitimate children and descendants; (3) The widow or widower; (4) Acknowledged natural children and natural children by legal fiction; (5) Other illegitimate children referred to in Art. 287. Compulsory heirs mentioned in Nos. 3, 4, and 5 are not excluded by those in Nos, 1 and 2; neither do they exclude one another. In all cases of illegitimate children, their filiation must be duly proved. Page 119 of 391 The father or mother of illegitimate children of the classes mentioned shall inherit from them in the manner and to the extent established by the Civil Code. (Art. 887, Civil Code). The following shall be sufficient causes for the disinheritance of children and descendants, legitimate as well as illegitimate: (1) When a child or descendant has been found guilty of an attempt against the life of the testator, his or her spouse, descendants, or ascendants; (2) When a child or descendant has accused the testator of a crime for which the law prescribes imprisonment for six years or more if the accusation has been found groundless; (3) When a child or descendant has been convicted of adultery or concubinage with the spouse of the testator; (4) When a child or descendant by fraud, violence, intimidation, or undue influence causes the testator to make a will or to change one already made; (5) A refusal without justifiable cause to support the parent or ascendant who disinherits such child or descendant; (6) Maltreatment of the testator by word or deed, by the child or descendant; (7) When a child or descendant leads a dishonorable or disgraceful life; (8) Conviction of a crime which carries with it the penalty of civil interdiction. {Art. 919, Civil Code). 03; Succession; disinheritance; grounds 1989 No. 11: (2) Jose and Ana are husband and wife. On January 10, 1980, Jose learned that Ana was having illicit relations with Juan, In fact, Jose personally saw his wife and Juan leaving a motel on one occasion. Despite all the evidence he had at hand, Jose did not bring any action for legal separation against Ana. Instead, Jose simply prepared a will wherein he disinherited Ana for her acts of infidelity. The validity of the disinheritance was questioned by Ana upon Jose's death. If you were the judge, how would you resolve this question? Give your reasons. Answer: The disinheritance is valid. Under the Civil Code, the legal ground for disinheriting a spouse is that the spouse has given cause for legal separation. Therefore, a final judgment is not needed. Alternative Answer: The disinheritance is not valid. The facts indicate that there was condonation by Jose of Ana's illicit relationship with Juan since they appear to have continued to live together, 03; Succession; donation of a spouse’s share 1982 No. 10 "H" and "W" are husband and wife. They have neither descendants or ascendants. "H" died and while the conjugal partnership was under judicial administration and pending liquidation, "W" donated all her share in her husband's estate to a friend "F". "W" died while the proceeding for the settlement of the conjugal partnership was pending. The collateral heirs of "W" and the administrator of the estate brought an action against the donee, "F", to set aside the donation on the ground that it is void, as it is a donation of future property. Decide with reasons. Page 120 of 391 Answer: The contention of the collateral heirs of "W" and the administrator of the estate that the donation made by "W" to her friend "F" is void because the donation is a donation of future property is untenable. The reason is crystal clear. According to the Civil Code, by future property is understood anything which the donor cannot dispose of at the time of the donation. Obviously, "W's" share in her husband's estate does not fall within the purview of the definition. Because of the principle that successional rights are transmitted at the very moment of the death of the decedent, it is evident that "W" had a perfect right to donate her share in her husband's estate to her friend "F". (Note: The above answer is based on Arts 777 and 751 of the Civil Code. The Committee recommends most respectfully that if the bar candidate arrives at the same conclusion by invoking the provisions of Art. 493 of the Civil Code, he or she should be properly credited.) 03; Succession; incapacity 1988 No. 7: (b) Suppose that the beneficiary in a will is the wife of the minister of the gospel who rendered aid to the testator during the letter's last illness, would she be disqualified from inheriting from the testator? Explain. Answer: (b) We believe that the wife of the minister would not be disqualified from inheriting from the testator. Under No. 2 of Art. 1027 of the Civil Code, the law extends the disqualification of priests and ministers of the gospel to their relatives within the fourth degree as well as to the church, order, chapter, community, organization or institution to which they may belong. The spouse is not included. Consequently, such spouse is not disqualified. Otherwise, we would be reading into the law what is not found there. Besides, capacity to succeed is the general rule, while incapacity to succeed is the exception. Hence, the rules on incapacity must always be strictly construed. Suggested Alternative Answer To: No. 7(b): (b) If the testamentary disposition was actually intended to favor the Minister as a disqualified person and was ostensibly made thru an intermediary, namely, the wife, then the Minister is considered disqualified as the real and intended heir. 03; Succession; incapacity; effect of legal separation 1976 No. VI-c In case of a legal separation between A and the widow, will the surviving widow inherit? Explain. Answer It depends. If the widow is the guilty spouse, she cannot inherit. If she is the innocent spouse, she may inherit. (Article 106, paragraph 4 1002) 03; Succession; intestate heirs 1995 No. 18: Isidro and Irma, Filipinos, both 18 years of age, were passengers of Flight No. 317 of Oriental Airlines. The plane they boarded was of Philippine registry. While en route from Manila to Greece some passengers hijacked the plane, held the chief pilot hostage at the cockpit and ordered him to fly Instead to Libya. During the hijacking Isidro suffered a heart attack and was on the verge of death. Since Irma was already eight months pregnant by Isidro, she pleaded to the hijackers to allow Page 121 of 391 the assistant pilot to solemnize her marriage with Isidro. Soon after the marriage, Isidro expired. As the plane landed in Libya Irma gave birth. However, the baby died a few minutes after complete delivery. Back in the Philippines Irma Immediately filed a claim for Inheritance. The parents of Isidro opposed her claim contending that the marriage between her and Isidro was void ab initio on the following grounds: (a) they had not given their consent to the marriage of their son; (b) there was no marriage license; (c) the solemnizing officer had no authority to perform the marriage; and, (d) the solemnizing officer did not file an affidavit of marriage with the proper civil registrar. 2. Does Irma have any successional rights at all? Discuss fully. Answer; 2. Irma succeeded to the estate of Isidro as his surviving spouse to the estate of her legitimate child. When Isidro died, he was succeeded by his surviving wife Irma, and his legitimate unborn child. They divided the estate equally between them, the child excluding the parents of Isidro. An unborn child is considered born for all purposes favorable to it provided it is born later. The child was considered born because, having an intra-uterine life of more than seven months, it lived for a few minutes after its complete delivery. It was legitimate because it was born within the valid marriage of the parents. Succession is favorable to it. When the child died, Irma inherited the share of the child. However, the share of the child in the hands of Irma is subject to reserva troncal for the benefit of the relatives of the child within the third degree of consanguinity and who belong to the line of Isidro. Alternative Answer: If the marriage is void. Irma has no successional rights with respect to Isidro but she would have successional rights with respect to the child. 03; Succession; intestate heirs and sharing 1977 No. XIII-b Should brothers and sisters of the full blood survive together with brothers and sisters of the half blood, how much is the former entitled compared to that of the latter? Answer The former shall be entitled to a share double that of the latter (Art. 1006, Civil Code). 03; Succession; intestate heirs; shares 2003 No XII. (b) Luis was survived by two legitimate children, two illegitimate children, his parents, and two brothers. He left an estate of P1 million. Luis died intestate. Who are his intestate heirs, and how much is the share of each in his estate? SUGGESTED ANSWER: (b) The intestate heirs are the two (2) legitimate children and the two (2) illegitimate children. In intestacy the estate of the decedent is divided among the legitimate and illegitimate children such that the share of each illegitimate child is one - half the share of each legitimate child. Their share are : For each legitimate child – P333,333.33 For each illegitimate child – P166,666.66 Page 122 of 391 (Article 983, New Civil Code; Article 176, Family Code) 03; Succession; intestate proceedings; jurisdiction 2004 No. X B. In his lifetime, a Pakistani citizen, ADIL, married three times under Pakistani law. When he died an old widower, he left behind six children, two sisters, three homes, and an estate worth at least 30 million pesos in the Philippines. He was born in Lahore but last resided in Cebu City, where he had a mansion and where two of his youngest children now live and work. Two of his oldest children are farmers in Sulu, while the two middle-aged children are employees in Zamboanga City. Finding that the deceased left no will, the youngest son wanted to file intestate proceedings before the Regional Trial Court of Cebu City. Two other siblings objected, arguing that it should be in Jolo before a Shari’a court since his lands are in Sulu. But Adil’s sisters in Pakistan want the proceedings held in Lahore before a Pakistani court. Which court has jurisdiction and is the proper venue for the intestate proceedings? The law of which country shall govern succession to his estate? (5%) 03; Succession; intestate succession 1992 No 5: F had three (3) legitimate children: A, B, and C. B has one (1) legitimate child X. C has two (2) legitimate children: Y and Z. F and A rode together in a car and perished together at the same time in a vehicular accident, F and A died, each of them leaving substantial estates in intestacy. a) shares? Who are the intestate heirs of F? What are their respective fractional b) shares? Who are the intestate heirs of A? What are their respective fractional c) If B and C both predeceased F, who are Fs intestate heirs? What are their respective fractional shares? Do they inherit in their own right or by representation? Explain your answer. d) If B and C both repudiated their shares in the estate of Ft who are F's intestate heirs? What are their respective fractional shares? Do they inherit in their own right or by representation? Explain your answer, Answer: (a) B = 1/2 (c) = 1/4 by representation of C (b) B = 1/2 X = 1/2 by representation of B Z = 1/4 by representation of C C=l/2 Y C= 1/2 Article 982 of the Civil Code provides that grandchildren inherit by right of representation. (d) X - 1/3 in his own right Y- 1/3 in his own right 2 - 1/3 in his own right Article 977 of the Civil Code provides that heirs who repudiate their share cannot be represented. 03; Succession; intestate succession 1976 No. VI-a Page 123 of 391 A dies without a will, leaving a modern hotel, a fleet of air-conditioned buses and three helicopters. If his widow and brothers survive, how will they inherit the estate? Answer One-half (1/2) to the widow and 1/2 to the brothers and sisters, regardless of their number. (Article 1001) 03; Succession; intestate succession 1976 No. VI-b If the widow and three legitimate children are left, what will be the share of the widow? Answer Under Article 996, each shall receive 1/4 as the Civil Code provides that the widow shall have the same share as that of each legitimate child. Alternative Answer Under the theory of exclusion advocated by some authors, 1/6 shall go to the widow and 5/6 shall be received by the three children, shared equally by each child. Or, stated otherwise: Each child receives his legitime; the children getting 1/2 of the estate and the widow getting a share equivalent to the share of one child, and the remaining free portion shall be divided equally among the three legitimate children. 03; Succession; intestate succession 2000 No XI Eugenio died without issue, leaving several parcels of land in Bataan. He was survived by Antonio, his legitimate brother; Martina, the only daughter of his predeceased sister Mercedes; and five legitimate children of Joaquin, another predeceased brother. Shortly after Eugenio's death, Antonio also died, leaving three legitimate children. Subsequently, Martina, the children of Joaquin and the children of Antonio executed an extrajudicial settlement of the estate of Eugenio, dividing it among themselves. The succeeding year, a petition to annul the extrajudicial settlement was filed by Antero, an illegitimate son of Antonio, who claims he is entitled to share in the estate of Eugenio. The defendants filed a motion to dismiss on the ground that Antero is barred by Article 992 of the Civil Code from inheriting from the legitimate brother of his father. How will you resolve the motion? (5%) SUGGESTED ANSWER: The motion to dismiss should be granted. Article 992 does not apply. Antero is not claiming any inheritance from Eugenio. He is claiming his share in the inheritance of his father consisting of his father's share in the inheritance of Eugenio (Dela Merced v, Dela Merced, Gr No. 126707, 25 February 1999). ALTERNATIVE ANSWER: It depends. If Antero was not acknowledged by Antonio, the motion to dismiss should be granted because Antero is not a legal heir of Antonio, If Antero was acknowledged , the motion should be denied because Article 992 is not applicable. This is because Antero is claiming his inheritance from his illegitimate father, not from Eugenio. 03; Succession; intestate succession 1978 No. VI-b Page 124 of 391 A, deceased, is survived by a half-sister B on his father's aide and an aunt C his mother's sister. He left as his only property that which was inherited from his mother. He died intestate. Who shall succeed to A's estate? Reasons for your answer. Answer B shall succeed to A's estate. The law of intestate succession is explicit. Since both B and C are collateral relatives of the decedent A, therefore, the rule of proximity is applicable. Relatives nearest in degree exclude the more distant ones, B is a second degree relative of A, while C is a third degree relative. Besides, under the general order of intestate succession, brothers and sisters, whether of the full or half blood, are always preferred to uncles or aunts. (NOTE: The above answer is based on Art. 967, Civil Code, and on Arts. 1004 to 1009, Civil Code. It is suggested that if a bar candidate should also discuss the question of whether or not there is a reserva troncal, this should not prejudice him, provided that he will arrive at the correct conclusion that A's estate is not reservable.) 03; Succession; intestate succession 1997 No. 11: "T" died intestate on 1 September 1997.He was survived by M (his mother), W (his widow), A and B (his legitimate children), C (his grandson, being the legitimate son of B), D (his other grandson, being the son of E who was a legitimate son of, and who predeceased, "T"), and F (his grandson, being the son of G, a legitimate son who repudiated the inheritance from "T"). His distributable net estate Is P120.000.00. How should this amount be shared in intestacy among the surviving heirs? Answer: The legal heirs are A, B, D, and W. C is excluded by B who is still alive. D Inherits in representation of E who predeceased. F is excluded because of the repudiation of G, the predecessor. M is excluded by the legitimate children of T. The answer may be premised on two theories: the Theory of Exclusion and the Theory of Concurrence. Under the Theory of Exclusion the legitimes of the heirs are accorded them and the free portion will be given exclusively to the legitimate descendants. Hence under the Exclusion Theory: A will get P20.000.00. and P 13.333.33 (1/3 of the free portion) B will get P 20,000.00. and P13. 333.33 (1/3 of the free portion) D will get P20.000.00. and P13. 333.33 (1/3 of the free portion) W, the widow is limited to the legitime of P20.000.00 Under the Theory of Concurrence. In addition to their legitimes. the heirs of A, B, D and W will be given equal shares in the free portions: A: P20.000.00 plus P10.000.00 (1 /4 of the free portion) B: P20,000.00 plus P10.000.00 (l/4 of the free portlon) C: P20,000.00 plus P10.000.00 (1/4 of the free portion) W: P20,000.00 plus P10,000.00 (l/4 of the free portion) Alternative Answer: Shares in Intestacy T - decedent Estate: P120.000.00 Page 125 of 391 Survived by: M - Mother............................None W - Widow.............................P 30,000.00 A - Son.................................P 30,000.00 B - Son.................................P3O.OOO.OO C - Grandson (son of B).............None D - Grandson (son of E who predeceased T)................P 30,000.00 F - Grandson (son from"T").......................None of G who repudiated the Inheritance Explanation: 1) The mother (M) cannot inherit from T because under Art. 985 the ascendants shall inherit in default of legitimate children and descendants of the deceased. 2) The widow's share is P30.000.00 because under Art, 996 it states that if the widow or widower and legitimate children or descendants are left, the surviving spouse has in the succession the same share as that of each of the children, 3) C has no share because his father is still alive hence succession by representation shall not apply (Art. 975). 4) D inherits P30.000 which is the share of his father E who predeceased T by virtue of Art. 981 on the right of representation. 5) F has no share because his father G repudiated the inheritance. Under Article 977 heirs who repudiate their share may not be represented. 03; Succession; intestate succession 1998 No XII Enrique died, leaving a net hereditary estate of P1.2 million. He is survived by his widow, three legitimate children, two legitimate grandchildren sired by a legitimate child who predeceased him, and two recognized illegitimate children. Distribute the estate in intestacy. [5%] Answer: Under the theory of Concurrence, the shares are as follows: A (legitimate child) = P200.OOO B (legitimate child) = P2OO.OOO C (legitimate child) = P2OO,OOO D (legitimate child) = O (predeceased] E (legitimate child of D) = P100.0OO - by right of representation F (legitimate child of D) = P100.OOO - by right of representation G (illegitimate child) = P1OO.OOO - 1/2 share of ft legitimate child H (illegitimate child) = P100.OOO - 1/2 share of a legitimate child W (Widow) = P200.0OO - same share as legitimate child Another Answer: Page 126 of 391 Under the theory of Exclusion the free portion (P300.OOO) is distributed only among the legitimate children and is given to them in addition to their legitime. All other Intestate heirs are entitled only to their respective legitimes. The distribution is as follows: Legitime Free Portion Total A [legitimate child) P15O.OOO + P 75,OOO - P225.OOO B {legitimate child) P15O.OOO + F15O.OOO - P225.OOO C (legitimate child) P15O.OOO + P 75.OOO - P225.OOO D (legitimate child) 0 0 0 E (legitimate child of D) P 75,OOO + P35.5OO - P112.5OO F (legitimate child of D) P 75.OOO + P 37.5OO - P112,5OO G (illegitimate child) P 75.OOO 0 -P 75.5OO H (illegitimate child) P 75.OOO O - P 75.5OO P15O.OOO 0 W (Widow) P15O.OOO - 03; Succession; intestate succession 1984 No, 8 Spouses Guillermo and Pacita had three sons, namely, A, B and C. Beset by quarrels, their marriage broke up. Guillermo left for and obtained a divorce in the United States, where he subsequently married Juana, by whom he had a son, D. Guillermo later died in the United States without even knowing that C had died earlier, leaving a wife, E, and a legitimate son, F, State the shares, if any, of the following: in the estate of Guillermo: A, B, D, E, F, Pacita and Juana. Answers: A. Furnished by Office of Justice Palma The legitimate sons are entitled to one (1) share each, together with the surviving spouse, Pacita. Since divorce is not recognized, Juana, the second wife, is not an heir and gets nothing. D is a spurious child and will get 2/5 of the share of a legitimate son, C having predeceased Guillermo, F, the legitimate son of C, will inherit by right of representation. E the wife of C, has no right of representation and will get nothing. Hence, the estate will be divided as follows: A —5/22 B —5/22 F — 5/22 Pacita — 5/22 D — 2/22 B. Comments and Suggested Answer We suggest that the following should be accepted as a correct answer: A shall be entitled to the share of a legitimate child. B shall also be entitled to the share of a legitimate child. D, being a natural child by legal fiction, shall be entitled to one-half (1/2) of the share of A or B. It must be observed that Guillermo's marriage to Juana id void Page 127 of 391 from the point of view of Philippine Law since the decree of absolute divorce obtained by him against Pacita is not recognized as a valid decree (see Arts. 15, 71, 80, No. (4). E shall not participate in the inheritance because she is not a legal heir of Guillermo. Pacita however, shall be entitled to the same share as A or B, being the surviving spouse of Guillermo (Art. 999, Civil Code). F, the legitimate son of C, will inherit by right of representation. Juana shall not participate in the inheritance because she is not a legal heir of Guillermo. Hence, the proportionate shares of A, B, F, Pacita, and D in the inheritance will be: (2 for A, 2 for B; 2 for F, 2 for Pacita, and 1 for F or (2:2:2:2:1). A's share will be 2/9 of the estate; D's share will be 2/9 of the estate; F's share will be 2/9 of the estate; Pacita's share will be 2/9 of the estate; and D's share will be 1/9 of the estate. 03; Succession; intestate succession 1985 No. 9 A) Among the properties in the estate of A, who died intestate and without issue, were a farm, which came from his father, B, and a house, which he acquired from C, B's father. In the partition of A's inheritance, the house was allotted to B and the farm to D, A's mother. Upon the death of B and D, who were simultaneously killed in a car accident, the farm was claimed by C and X, a child of B And D born after A's death, while the house was claimed also by C and X and Y, D's child by a prior marriage. Decide the conflicting claims over the farm and the house in controversy with reasons. B) By a letter written before his death, the deceased distributed and partitioned among his three (3) legitimate sons. A, B, and C, his property in such manner that A received 17/24 thereof, B, 1/6 and C, 1/8. The letter not having been made in accordance with the formalities required for the execution of wills, B and C claimed that their father died intestate and his inheritance should be divided equally among his children. Decide their claims and distribute the estate among A, B and C stating the reasons in support of your disposition. C) A, a bachelor, named his brother, B as heir if his sister, S, dies within 10 years after A's death. B died 2 years after A's death while S died 1 year later, A's estate" is claimed by B's only child and S's 6 children. Who are entitled to it and how much will each receive? Discuss, Answers: A) 1. As regards the house, this property was acquired by A from his grandfather C and was transmitted by A to B, his father. There is no reserva troncal because there is no change of line. Hence, X alone is entitled to inherit the house. With respect to the farm, the farm originally came from B, the father of A, and from A it went to his mother D, There is a change of line from the paternal to the maternal line. The farm is reservable property and must be acquired by relatives within the third degree of the propositus and belonging to the paternal line. Regarding the sharing, there are two theories. In the "delayed intestacy doctrine," the preferences in the rules of intestate succession must be observed. The second theory is to the effect that relatives in the same degree inherit in equal Page 128 of 391 shares without distinction as to the direct or collateral line. Under the first theory, the "delayed intestacy theory," C alone will inherit the farm because in intestacy, the direct line excludes the collateral line. Hence, C, the grandfather, should exclude X, the brother of A. Under the second theory; which allows no distinction as to direct or collateral line, C and X will inherit the farm in equal shares since they are both 2nd degree relatives of A, both belonging to the paternal line. In any case Y does not inherit, since Y is not a reservatario. 2. With respect to the house, the property was inherited by B who belongs to the paternal line. There will be no reason for making the property reservable because there is no danger of the property going to another line. Hence, when B died, C and X belonging to the same line from which the property came will inherit it equally. With respect to the house, not being reservable, the heir of B will be X alone as the descendant excludes the ascendant. With respect to the farm being reservable in character, C and X belonging to the same line from which the property came will inherit equally. 3. With respect to the farm it will go to X and Y. With respect to the house, it will go to X as the lone child and legal heir of B. 4. There is no reserva and the properties will go by intestate succession, the farm going to X and the house going to C, since there is no showing that the properties were received by B and D by operation of law as the question merely says that they were "allotted" in the partition, and by the propositus A by gratuitous title as the question merely says that the farm "came" from his father B and a house which he "acquired" from C, B's father without stating whether it "came" or was "acquired" by gratuitous title. 6. In the event that both farm and house were acquired by gratuitous title and were inherited by B and D by operation of law, there is in both cases reserva because reserva can exist although the properties come from the same line. Hence, the farm will go to C because the direct line excludes the collateral line. As regards the house, there is also reserva although it came from the same line and will also go to C for the same reason. 8. The farm should be awarded to X, the legitimate child of B, who is preferred over C, the surviving parent of B. The farm is not reservable property having origin-ally come from a line to which B likewise belongs (B in fact, was the donor of the property). The house shall be awarded to C as the preferred reservatario. The requisites of reserva troncal concurred in the case of the house since the property was acquired by gratuitous title by B from C, a paternal ascendant, and upon the death of A (propositus) the same property went by operation of Law to D (reservista), his mother. Both X and C are reservatarios since they belong to the line where the property originally came from and related within three degrees from the propositus but since C belongs to the direct line of A and X being only a collateral relative, C would be preferred over X. B) 1. Under Art, 1080 of the Civil Code, a person may partition his property by an act inter vivos or by will. Under our present law, there is no need for the owner of the property to make a valid will. However, the partition inter vivos made by him must not prejudice the legitimes. In this particular case, the partition prejudices the legitime of C because actually each one should get 1/6, or 1/3 of 1/2, of his estate or 4/24. The partition made here is 17/24 which is 1/24 in excess of what he ought to get, therefore, the final distribution should be: A = 16/24 which includes the whole 1/2 plus 1/3 of the other half B = is entitled only to 4/24 and C = 4/24 Page 129 of 391 2. Since the letter was not made in accordance with the formalities required for the execution of wills, the father died intestate. Hence, A, B and C will divide the inheritance equally. 3. Despite the fact that a will is no longer required for the execution of a partition inter vivos within the meaning of the law, nevertheless, the different formalities which are necessary in order to convey property must still be complied with. Hence, A, B and C will divide the inheritance equally. 4. B and C are correct. While it is very true that the letter of the deceased did not comply with the formalities required for the, execution of the wills, nevertheless, under the law, a partition inter vivos may be effected provided, of course, that there will be compliance with all of the formalities required for ordinary conveyance of properties such as when real properties are involved. In other words, the partition that was effected by means of a letter does not state that all of the formalities prescribed for ordinary conveyances of properties are complied with. 5. This is not a partition because partition presupposes a division/separation of a property. This is merely assigning an aliquot portion of the property. Therefore, it is not a real partition contemplated under Article 1080. It should follow the requirements of a will, and because it does not comply with the requirements of the will, intestate succession will follow. 6. A shall be entitled to 4/6, B to 1/6 and C to 1/6 of the estate. Under Art, 1080 of the Civil Code, a person may partition his estate during his lifetime. Unlike that which obtained during the regime of the old Civil Code, the present Code would appear to permit a person to distribute his estate during his lifetime without having to execute a will. A conflict of views among Civil Law commentators arises only where the participants in the partition, or some of them, are voluntary heirs. Since those who were given entitlement under the partition were all legitimate children, and there being no one apparently preterited the partition can take effect but without prejudice to their respective legitimes. The share given to C is less than his legitime for which reason that share must be increased to 1/6 of the estate. C) 1. The estate of A will be distributed in intestacy among the 6 children of S and the child of B. The condition embodied by A was ineffective because B died ahead of S. Hence, the condition was not fulfilled while B was alive. Intestate succession for B and S will be determined as to the rights existing on A's death, hence, one-half will go to the children of S and the other half to the child of B. 2. Only the 6 children of 3 will get the property because the heir died before the fulfillment of the condition. 3. From the wording of the facts in the case, it would appear that S is the heir and that if 3 died within 10 years after A's death, then B gets it, not the children of S. If S died after B, the children of S get it 4. In a conditional institution, such as what has arisen in the problem, the instituted heir must survive not only the testator but likewise the fulfillment of the condition in the will (Art. 1034). Since B did not survive that condition, the institution in his favor could not be operative. The estate, therefore, assuming that there are no other relatives other than those named in the problem, would be the child of B and the six children of S, who would get it in equal shares (per capita), each receiving 1/7 of the estate (Art. 975). 03; Succession; intestate succession 1998 No XI. Tessie died survived by her husband Mario, and two nieces, Michelle and Jorelle, who are the legitimate children of an elder sister who had predeceased her. Page 130 of 391 The only property she left behind was a house and lot worth two million pesos, which Tessie and her husband had acquired with the use of Mario's savings from his income as a doctor. How much of the property or its value, if any, may Michelle and Jorelle claim as their hereditary shares? [5%] Answer: Article 1001 of the Civil Code provides, "Should brothers and sisters or their children survive with the widow or widower, the latter shall be entitled to one-half of the inheritance and the brothers and sisters or their children to the other half." Tessie's gross estate consists of a house and lot acquired during her marriage, making it part of the community property. Thus, one-half of the said property would have to be set aside as Mario's conjugal share from the community property. The other half, amounting to one million pesos, is her conjugal share (net estate), and should be distributed to her intestate heirs. Applying the above provision of law, Michelle and Jorelle, Tessie's nieces, are entitled to one-half of her conjugal share worth one million pesos, or 500,000 pesos, while the other one-half amounting to P5OO,OOO will go to Mario, Tessie's surviving spouse. Michelle and Jorelle are then entitled to P250,000 pesos each as their hereditary share. 03; Succession; intestate succession 1977 No. XII-a X is the adulterous son of A and B and when he died in 1970 without a will, he was survived only by his father A and his widow W: How would you divide his estate valued at P100,000.00? Answer A shall be entitled to 1/2 of the estate, while W shall be entitled also to 1/2. True, there is no express provision of the New Civil Code which directly governs this situation, but this solution is the most equitable. Besides, in testamentary succession, the legitime of A is 1/2 of X's estate, while the legitime of W is also 1/2 (Art. 903, Civil Code); and in intestate succession, had A been a legitimate parent, his share would have been only 1/2, while the share of W would also be 1/2 (Art. 997, Civil code). These rules should be applied by analogy. 03; Succession; intestate succession 1977 No. XI-c State the order of intestate succession. Answer We must distinguish between the order of intestate succession if the decedent is a legitimate person and the order if said decedent is an illegitimate person, If the decedent is a legitimate person, the order is: (1) Legitimate children or descendants. (2) Legitimate parents or ascendants, (3) Illegitimate children or descendants. (4) The surviving spouse subject to the concurrent right of brothers and sisters, nephews and nieces. (5) Brothers and sisters, nephews and nieces. (6) Other collateral relatives within the fifth degree. (7) The state. Page 131 of 391 If the decedent is an illegitimate person, the order is: (1) Legitimate children or descendants. (2) Illegitimate children or descendants. (3) Parents by nature, (4) The surviving spouse subject to the concurrent right of brothers and sisters, nephews and nieces. (5) Brothers and sisters, nephews and nieces. (6) The State. If the decedent is an adopted person, and his natural parents are already dead, then the adopter shall take the place of such parents in the above orders of succession (Art. 39, No. 4, P.D. No. 603), 03; Succession; intestate succession 1999 No II. Mr. and Mrs. Cruz, who are childless, met with a serious motor vehicle accident with Mr. Cruz at the wheel and Mrs. Cruz seated beside him, resulting in the instant death of Mr. Cruz. Mrs. Cruz was still alive when help came but she also died on the way to the hospital. The couple acquired properties worth One Million (PI ,000,000.00) Pesos during their marriage, which are being claimed by the parents of both spouses in equal shares. Is the claim of both sets of parents valid and why? (3%) ANSWER: (a) No, the claim of both parents is not valid. When Mr. Cruz died, he was succeeded by his wife and his parents as his intestate heirs who will share his estate equally. His estate was 0.5 Million pesos which is his half share in the absolute community amounting to 1 Million Pesos. His wife, will, therefore, inherit O.25 Million Pesos and his parents will inherit 0.25 Million Pesos. When Mrs. Cruz died, she was succeeded by her parents as her intestate heirs. They will inherit all of her estate consisting of her 0.5 Million half share in the ab-solute community and her 0.25 Million inheritance from her husband, or a total of 0.750 Million Pesos. In sum, the parents of Mr. Cruz will inherit 250,000 Pesos while the parents of Mrs. Cruz will inherit 750,000 Pesos. 03; Succession; intestate succession 1999 No VIII, (b.) Mr. Luna died, leaving an estate of Ten Million (PI 0,000,000.00) Pesos, His widow gave birth to a child four months after Mr, Luna's death, but the child died five hours after birth. Two days after the child's death, the widow of Mr. Luna also died because she had suffered from difficult childbirth. The estate of Mr. Luna is now being claimed by his parents, and the parents of his widow. Who is entitled to Mr. Luna'a estate and why? (5%) ANSWER: (b.) Half of the estate of Mr. Luna will go to the parents of Mrs. Luna as their inheritance from Mrs. Luna, while the other half will be inherited by the parents of Mr. Luna as the reservatarios of the reserved property inherited by Mrs. Luna from her child. When Mr. Luna died, his heirs were his wife and the unborn child. The unborn child inherited because the inheritance was favorable to it and it was born alive later Page 132 of 391 though it lived only for five hours. Mrs. Luna inherited half of the 10 Million estate while the unborn child inherited the other half. When the child died, it was survived by its mother, Mrs. Luna. As the only heir, Mrs. Luna inherited, by operation of law, the estate of the child consisting of its 5 Million inheritance from Mr. Luna. In the hands of Mrs. Luna, what she inherited from her child was subject to reserva troncal for the benefit of the relatives of the child within the third degree of consanguinity and who belong to the family of Mr. Luna, the line where the property came from. When Mrs. Luna died, she was survived by her parents as her only heirs. Her parents will inherit her estate consisting of the 5 Million she inherited from Mr. Luna. The other 5 Million she inherited from her child will be delivered to the parents of Mr. Luna as beneficiaries of the reserved property. In sum, 5 Million Pesos of Mr. Luna's estate will go to the parents of Mrs. Luna, while the other 5 Million Pesos will go to the parents of Mr. Luna as reservatarios. ALTERNATIVE ANSWER: If the child had an intra-uterine life of not less than 7 months, it inherited from the father. In which case, the estate of 10M will be divided equally between the child and the widow as legal heirs. Upon the death of the child, its share of 5M shall go by operation of law to the mother, which shall be subject to reserva troncal. Under Art. 891, the reserva is in favor of relatives belonging to the paternal line and who are within 3 degrees from the child. The parents of Mr, Luna are entitled to the reserved portion which is 5M as they are 2 degrees related from child. The 5M inherited by Mrs. Luna from Mr. Luna will be inherited from her by her parents. However, if the child had intra-uterine life of less than 7 months, half of the estate of Mr. Luna, or 5M, will be inherited by the widow (Mrs. Luna), while the other half, or 5M, will be inherited by the parents of Mr. Luna. Upon the death of Mrs. Luna, her estate of 5M will be inherited by her own parents. 03; Succession; intestate succession 1986 No. 12: Carlos, legitimate son of Jaime and Maria, was legally adopted by Josefa. Both Jaime and Maria died soon after the adoption. Carlos, himself died in 1986. His survivors are Josefa, his legitimate maternal grandparents Daniel and Rosa, his wife Fe and his acknowledged natural son, Gerardo. How should the estate of Carlos worth P800,000.00 be apportioned among the above survivors? Explain. Answer: The estate of Carlos worth P800,000 should be apportioned as follows: 1. Josefa - one-half, or P400.000.00; 2. Fe - one-fourth, or P200.000.00, and 3. Gerardo - one-fourth, or P200.000.00. As a rule, the adopter cannot inherit from the adopted child by intestate succession. If the adopted child dies intestate, leaving no child or descendant, his parents and relatives by consanguinity and not by adoption shall be his legal heirs. There is, however, an exception to has rule According to the law, if the parents by nature of the adopted child are both dead, the adopter takes place of such parents in the line of succession, whether testate or intestate. Therefore, in the instant problem, Josefa shall take place of Jaime and Maria. The grandparents Daniel and Rosa are therefore- excluded. Consequently, applying the rules of intestacy, Josefa Page 133 of 391 shall be entitled to one-half (1/2) of the estate by substitution; Fe shall be entitled to one-fourth (1/4) as surviving spouse; and Gerardo shall be entitled to one-fourth (1/4) as illegitimate child, (Note: The above answer is based upon Arts, 984 and 100 Civil Code and upon Art. 39, No. (4), P.D. 603). Answer - Under P.D. 603, the adopter takes place of the parents by nature if the latter are dead, both as a compulsory and a legal heir. Therefore, as the adopted is survived by his wife, an acknowledged son and his maternal grandparents, adopter inherits in the same way as a legitimate parent, and they will share as follows: Josefa-----------------------------1/2 Fe(wife)—---------------------- 1/4 Gerardo-------------------------- 1/4 (acknowledged natural child) 03; Succession; intestate succession 1987 No. 4: Angel died intestate leaving considerable properties accumulated during 25 years of marriage. He is survived by his widow, a legally adopted son, the child of a deceased legitimate daughter, two illegitimate children duly recognized by Angel before his death and his ailing 93-year old mother who has wholly dependent on him. How would you distribute the estate indicating by fractions the portions of the following who claim to be entitled to inherit: (a) the widow? (b) the adopted son? (c) the child of the deceased legitimate daughter? (d) the two recognized illegitimate children? (e) the mother? Answer: a. the widow - 1/4 b. the adopted son - 1/4 c. the child of the deceased legitimate daughter - 1/4 d. the two "recognized illegitimate children" — we must distinguish: Assuming that the two recognized illegitimate children are natural children, then each of them will get 1/8. Upon the other hand, if they are recognized spurious children then each of them will get 2/5 of 1/4 of the estate. The remaining 1/5 of 1/4 will be distributed as follows: Under the theory of concurrence, that 1/5 of 1/4 will be divided equally among the widow, the adopted son and the child of the deceased legitimate daughter. Under the theory of exclusion that 1/5 of 1/4 will be divided equally between the adopted son and the child of the deceased legitimate daughter. e. the mother - will get nothing, 03; Succession; intestate succession 1979 No. II Page 134 of 391 RD and BG, both Filipinos were married and lived in Manila. They begot 2 children and after some years of marriage, RD, being a physician, went to the United States. After staying there for two years, RD got attached to a Filipina nurse. He got a quick divorce on the ground of desertion and then married the Filipina nurse with whom he also begot 2 children. RD died intestate in an automobile accident in the United States leaving valuable properties in the Philippines both inherited by him from his parents as well as acquired during his marriage to BG. How would BG and her two children and the Filipina nurse and her two children share in the estate of RD. Give reasons for your answer. Answer Before we can determine the shares of the claimants to the estate of RD, let us first determine what is the estate of RD and what is the status of the claimants in relation to RD, Estate of RD: As far as the properties acquired by RD during his marriage to BG are concerned, 1/2 thereof should be included in his estate and 1/2 should be given to BG since they are conjugal in character. As far as the properties inherited by him from his parents are concerned, since they are exclusive or separate in character, they must also be included in his estate, Status of the claimants: BG is the surviving spouse of RD. The decree of absolute divorce secured by RD in the United States is not valid. In the first place, we adhere to the nationality theory. Philippine laws shall be binding upon Filipino citizens wherever they are with respect to family rights and duties as well as status, condition and legal capacity. And in the second place, there is a declaration of public policy in this country against absolute divorce. Such a declaration of public policy cannot be rendered nugatory by the decree of absolute divorce secured RD in a foreign country. Therefore, the marriage of RD to the Filipina nurse is not valid. It is bigamous under the Philippine law. Hence, the nurse is not related to RD under our law of succession. It is different in the case of the two children. Being born of a void marriage, they are classified as natural children by legal fiction, and are, therefore, entitled to the same rights as acknowledged natural children, Division of the estate of RD: It is clear that only BG, as surviving spouse, the two legitimate children of RD and BG, and the two natural children by legal fiction of RD will be able to inherit. The Filipina nurse cannot. Since RD died intestate, the proportions established under our law on legitime is applicable. In the instant case, the proportions will be 10 for BG; 10 for each of the legitimate children; and 5 for each of the natural children. Stated in another way, the two legitimate children shall be entitled to 1/2, or 1/4, each, of the entire estate of RD; BG shall be entitled to the same share as each of the legitimate children, or 1/4 of the entire estate; and the two natural children by legal fiction shall be entitled to the balance of 1/4 or 1/8 each of the entire estate. 03; Succession; intestate succession; order of succession and sharing 1982 No. 14 "X" died intestate, leaving two sons "A" and "B"; two grandchildren "C" and "D", the children of the deceased daughter of "B"; and another grandchild "F", the daughter of "A". Who will succeed to the estate of "X" and how will they divide the inheritance? Answer Among the survivors, only the following shall participate in the division of the inheritance: "A", in his own right; "B", in his own right; and "C" and "D", by right of representation, "F", the daughter of "A", cannot participate because she is excluded Page 135 of 391 by the latter applying the rule of proximity. Consequently, the inheritance shall be divided as follows: "A" — one-third (1/3) of the inheritance; "B" — one-third (1/3) of the inheritance; "C" — one-half (1/3) of the inheritance by right of representation; "D" —one-half representation. (1/2) of one-third (1/3) (1/2) of one-third of the inheritance by right of 03; Succession; joint wills 2000 No III. a} Manuel, a Filipino, and his American wife Eleanor, executed a Joint Will in Boston, Massachusetts when they were residing in said city. The law of Massachusetts allows the execution of joint wills. Shortly thereafter, Eleanor died. Can the said Will be probated in the Philippines for the settlement of her estate? (3%) SUGGESTED ANSWER; Yes, the will may be probated in the Philippines insofar as the estate of Eleanor is concerned. While the Civil Code prohibits the execution of Joint wills here and abroad, such prohibition applies only to Filipinos. Hence, the joint will which is valid where executed is valid in the Philippines but only with respect to Eleanor. Under Article 819, it is void with respect to Manuel whose joint will remains void in the Philippines despite being valid where executed. ALTERNATIVE ANSWER: The will cannot be probated in the Philippines, even though valid where executed, because it is prohibited under Article 818 of the Civil Code and declared void under Article 819, The prohibition should apply even to the American wife because the Joint will is offensive to public policy. Moreover, it is a single juridical act which cannot be valid as to one testator and void as to the other. 03; Succession; legal separation; effect 1982 No. 5 The husband was granted a decree of legal separation on the ground of adultery on the part of the wife. May the wife inherit from the husband — (a) By intestate succession? (b) By will? Reasons. Answer (a) The wife in the instant case cannot inherit from her husband by intestate succession. According to the Civil Code, the offending spouse shall be disqualified from inheriting from the innocent spouse by intestate succession. (b) It depends. If the will was executed prior to the legal separation, it is clear that in effect the wife cannot inherit from her husband. According to the Civil Code, provisions in favor of the offending spouse made in the will of the innocent one shall be revoked by operation of law. However, if the will was executed subsequent to the legal separation, undoubtedly, the wife will then be able to inherit from her husband. The reason is obvious. There is a tacit or implied pardon. (Note: The above answers are based on No. 4 of Art. 106 of the Civil. The last part regarding tacit pardon — is based on Art. 1033 by analogy.) 03; Succession; legitime Page 136 of 391 2003 No XII. (a) Luis was survived by two legitimate children, two illegitimate children, his parents, and two brothers. He left an estate of P1 million. Who are the compulsory heirs of Luis, how much is the legitimate of each, and how much is the free portion of his estate, if any? SUGGESTED ANSWER: (a) The compulsory heirs are the two legitimate children and the two illegitimate children. The parents are excluded by the legitimate children, while the brothers are not compulsory heirs at all. Their respective legitimate are: (1) The legitimate of the two (2) legitimate children is one half (1/2) of the estate (P500,000.00) to be divided between them equally, or P250,000.00 each. (2) The legitimate of each illegitimate child is one-half (1/2) the legitimate of each legitimate child or P125,000.00. Since the total legitimate of the compulsory heirs is P750,000.00, the balance of P250,000.00 is the free portion. 03; Succession; legitime 1997 No. 12: "X", the decedent, was survived by W (his widow). A (his son), B (a granddaughter, being the daughter of A) and C and D (the two acknowledged illegitimate children of the decedent). "X" died this year (1997) leaving a net estate of PI 80.000.00. All were willing to succeed, except A who repudiated the inheritance from his father, and they seek your legal advice on how much each can expect to receive as their respective shares in the distribution of the estate. Give your answer. Answer: The heirs are B, W, C and D. A inherits nothing because of his renunciation. B inherits a legitime of P90.000.00 as the nearest and only legitimate descendant, inheriting in his own right not by representation because of A's renunciation. W gets a legitime equivalent to one-half (1 / 2) that of B amounting to P45.000. C and D each gets a legitime equivalent to one-half (1/2) that of B amounting to P45.000.00 each. But since the total exceeds the entire estate, their legitimes would have to be reduced corresponding to P22.500.00 each (Art. 895. CC). The total of all of these amounts to P180.000.00. Alternative Answer: INTESTATE SUCCESSION ESTATE: P180,000.00 W- (widow gets 1/2 share) P90.000.00 (Art. 998) A- (son who repudiated his inheritance) B - (Granddaughter) None (Art. 977) None C - (Acknowledged illegitimate child) P45.000.00 (Art.998) D - (Acknowledged illegitimate child) P45,000.00 (Art. 998) The acknowledged illegitimate child gets 1/2 of the share of each legitimate child. 03; Succession; legitime 1982 No. 12 Page 137 of 391 The testator has three children "A", "B", and "C"; a wife "W"; a father "F"; an acknowledged natural child "N"; and an adulterous child "T". "A" is a handicapped child, and the testator wants to leave to him as much of his estate as he can legally do under the law. State the specific aliquot parts of the estate that the testator can leave "A", "B", and "C", as well as to his other aforementioned relatives. State how you arrive at the result. (Assume a net estate of P1,200,000.00 and that all of the above named relatives survived the testator.) Answer Under the law on legitime, the survivors shall be entitled to the following legitime: 1. "A", "B" and "C"-one-half of the estate which they shall divide in equal shares. Since the net value of the estate is Pl,200,000.00 each of them shall, therefore, be entitled to P200,000.00. 2. "W" — the same as each of the legitimate children, or P200,000. 3. "F" — none.- "F" cannot participate in the succession because he is excluded by the legitimate children of the testator. 4. "N" — one-half of the legitime of each of the legitimate children, or P100,000.00. 5. "T" _ four-fifths of the legitimate of "N" or two-fifths of the legitime of either "A" or "B" or "C", or P80,000.00 Thus, the disposable free portion is P220,000. If the testator so desires, he can leave this disposable portion to his son "A". (Note: The above answer is based on Art. 888, 892, 895, 897 and 898 of the Civil Code,) 03; Succession; order of succession and sharing; right of representation, institution, accretion 1985 No. 8 In a will executed in 1970, A instituted his two (2) legitimate brothers, B and C, as sole heirs to all the properties he then owned. B died in 1975, survived by his legitimate daughter, D, while A died last year, leaving an estate, 1/2 of which was acquired after the execution of his will. Who will succeed A, how much and by what right will the heir or each of the heirs, if more than one, inherit? Reason out your answer. Answer: 1. Regarding 1/2 acquired after the execution of the will it will be inherited by both D and C( C in his own right and D by right of representation because this 1/2 is inherited by intestate succession. With regard to the 1/2 already owned at the time of the execution of the will, C alone will get the property by right of institution and accretion. 2. The half of the property existing at the time of the execution of the will should go to C, the portion pertaining to him in his own right and the portion pertaining to B by right of accretion. The other half acquired after the execution of the will passes by intestacy, equally to C in his own right and to D in representation of B. 3. The whole estate will go to the second brother C by right of accretion and B gets nothing. Page 138 of 391 4. With respect to the will as made by the testator B is a voluntary heir. He transmits no right to his heir D, therefore his share in the will 'goes to the other heir by right of accretion. As to the properties which are not covered by the will, intestate succession will follow and therefore the legal heirs will be the brother and the niece to inherit equally. 5. The 1970 will appears to nave only covered the property which the testator had at the time of its execution. Accordingly, the half which wag acquired by him after the execution of the will would be governed by the law on intestacy. As regards the other half, disposed under the will, the property should go to C by right of accretion considering that the institution in favor of B and C was pro-indiviso (Art. 1015). The other half, acquired after the execution of the will, will be distributed in intestacy and assuming that the only legal heirs are those named in the problem, such portion shall be equally divided between C (legitimate brother of the deceased) and D (niece of the deceased) by right of representation (Art. 1005). 03; Succession; partition 1977 No. XI-b Discuss briefly the right of a testator to partition his estate among his heirs in the last will. Answer (NOTE: Either of the following should constitute a sufficient answer.) First Answer If the testator has no compulsory heirs, he may partition his estate in favor of any person having capacity to succeed. If he has compulsory heirs, he may partition his estate provided that he does not contravene the provisions of the Civil Code with regard to the legitime of said heirs. (See Art. 842, Civil Code,) Second Answer Under the Civil Code, the testator may partition his estate either by an act inter vivos or by a will. In either case, such partition shall be respected, insofar as it does not prejudice the legitime of his compulsory heirs (Art. 1080). He may even entrust the mere power to make the partition to a third person (Art. 1081); and if he so desires, he may even prohibit the partition, in which case the period of indivision shall not exceed -twenty years (Art. 1083). 03; Succession; preterition 1999 No VII. (a) Mr, Cruz, widower, has three legitimate children, A, B and C. He executed a Will instituting as his heirs to his estate of One Million (P1,QOO,000.00) Pesos his two children A and B, and his friend F. Upon his death, how should Mr. Cruz's estate be divided? Explain. (3%) (b) In the preceding question, suppose Mr. Cruz instituted his two children A and B as his heirs in his Will, but gave a legacy of P 100,000.00 to his friend F. How should the estate of Mr, Cruz be divided upon his death? Explain, (2%) ANSWER: (a) Assuming that the institution of A, B and F were to the entire estate, there was preterition of C since C is a compulsory heir in the direct line. The preterition will result in the total annulment of the institution of heirs. Therefore, the institution of A, B and F will be set aside and Mr. Cuz's estate will be divided, as in intestacy, equally among A, B and C as follows: A • P333,333.33; B - P333.333.33; and C P333,333.33. Page 139 of 391 (b| On the same assumption as letter (a), there was preterition of C. Therefore, the institution of A and B is annulled but the legacy of P100.000.00 to F shall be respected for not being inofficious. Therefore, the remainder of P900.000.00 will be divided equally among A, B and C. 03; Succession; preterition 2001 No VI Because her eldest son Juan had been pestering her for capital to start a business, Josefa gave him P100,000. Five years later, Josefa died, leaving a last will and testament In which she instituted only her four younger children as her sole heirs. At the time of her death, her only properly left was P900,000.00 in a bank. Juan opposed the will on the ground of preterition. How should Josefa's estate be divided among her heirs? State briefly the reason(s) for your answer. (5%) SUGGESTED ANSWER There was no preterition of the oldest son because the testatrix donated 100,000 pesos to him. This donation is considered an advance on the son's inheritance. There being no preterition, the institutions in the will shall be respected but the legitime of the oldest son has to be completed if he received less. After collating the donation of P100.000 to the remaining property of P900,000, the estate of the testatrix is P1,000,000. Of this amount, one-half or P500,000, is the legitime of the legitimate children and it follows that the legitime of one legitimate child is P100,000. The legitime, therefore, of the oldest son is P100,000. However, since the donation given him was P100,000, he has already received in full his legitime and he will not receive anything anymore from the decedent. The remaining P900,000, therefore, shall go to the four younger children by institution in the will, to be divided equally among them. Each will receive P225,000. ALTERNATIVE ANSWER Assuming that the donation is valid as to form and substance, Juan cannot invoke preterition because he actually had received a donation inter vivos from the testatrix (III Tolentino 188,1992 ed.). He would only have a right to a completion of his legitime under Art. 906 of the Civil Code. The estate should be divided equally among the five children who will each receive P225,000.00 because the total hereditary estate, after collating the donation to Juan (Art. 1061, CC), would be P1 million. In the actual distribution of the net estate, Juan gets nothing while his siblings will get P225,000.00 each. 03; Succession; preterition; substitutions; compulsory heirs 1988 No. 6: (a) What is preterition? What are its requisites? What is its effect? (b) What are the different limitations imposed by law upon fideicommissary substitutions? (c) Who are compulsory heirs? Answer: Preterition or pretermission, as it is sometimes called may be defined as the omission in the testator's will of one, some, or all of the compulsory heirs in the direct line, whether living at the time of the execution of the will or born after the death of the testator (Art. 854, CC). Stated in another way, it consists in the omission in the testator's will of the compulsory heirs in the direct line, or of anyone of them, either because they are not mentioned therein, or, though mentioned, they Page 140 of 391 are neither instituted as heir nor expressly disinherited (Neri vs. Akutin, 74 Phil 185; Nuguid vs. Nuguid, 17 SCRA449). Its requisites are: (1) The heir omitted must be a compulsory heir in the direct line; (2) The omission must be total and complete; and (3) The omitted heir must survive the testator. The effect is to annul entirely the institution of heirs but legacies and devises shall be valid insofar as they are not inofficious, (Art, 854, CC.) (b) There are four limitations. They are: (1) The substitution must not go beyond one degree from the heir originally instituted (Art. 863, CC). (2) The fiduciary and the fideicommissary must be living at the time of the death of the testator (Ibid). (3) The substitution must not burden the legitime of compulsory heirs (Art. 864, CC). (4) The substitution must be made expressly (Art. 865, par. l. CC.) (c) In general, compulsory heirs are those for whom the law has reserved a portion of the testator's estate which is known as the legitime. In particular, the following are compulsory heirs: {1} Legitimate children and descendants, with respect to their legitimate parents and ascendants; (2) In default of the foregoing, legitimate parents and ascendants, with respects to their legitimate children and descendants; (3) The widow or widower; (4) Acknowledged natural children and natural children by legal fiction; (5) Other illegitimate children referred to in article 287. Compulsory heirs mentioned in numbers 3, 4, and 5 are not excluded by those in numbers 1 and 2; neither do they exclude one another. Compulsory heirs mentioned in numbers 3, 4, and 5 are not excluded by those in numbers 1 and 2; neither do they exclude one another. In all cases of illegitimate children, their filiation must be duly proved. The father or mother of illegitimate children of the classes mentioned shall inherit from them in the manner and to the extent established by the Civil Code. (Art. 887, CC.) Committee's Recommendation Re: No. 6 (c): (c) It is recommended that an enumeration of numbers one to five without the mention of the additional last three paragraphs should merit full credit for this question. 03; Succession; probate 1988 No. 5: (a) In probate proceedings, what are the only questions which a probate court can determine? (b) A presented for probate a will purporting to be the last will and testament of his deceased wife. The will was admitted to probate without any opposition. Sixteen months later, the brothers and sisters of the deceased discovered that the Page 141 of 391 will was a forgery. Can A now be prosecuted for the criminal offense of forgery? Give your reasons. Answer: (a) Under our law, there are only three possible questions which can be determined by the probate court. They are; (1) Whether or not the instrument which is offered for probate is the last will and testament of the decedent; in other words, the question is one of identity. (2) Whether or not the will has been executed in accordance with the formalities prescribed by law; in other words, the question is one of due execution. (3) Whether or not the testator had the necessary testamentary capacity at the time of the execution of the will; in other words, the question is one of capacity. Consequently, the probate court cannot inquire into the intrinsic validity of testamentary dispositions. (b) A can no longer be prosecuted for the criminal offense of forgery. This is so because, according to the last paragraph of Art. 838 of the Civil Code, subject to the right of appeal the allowance of the will, either during the lifetime of the testator or after his death, shall be conclusive as to its due execution. Since sixteen months have already elapsed from the allowance of the will to the time when the forgery was discovered, there is now no possible remedy of impugning the validity of the will. Even a petition to set aside a judgment or order of a Court of First Instance on the ground of fraud in accordance with Secs. 2 and 3 of Rule 38 of the Rules of Court is no longer possible because more than six months from the time of the promulgation of the judgment or order have already elapsed. (Mercado vs. Santos, 66 Phil 215.) Committee's Recommendation Re: No. 5 (a) (a) It is recommended that a mention of numbers (2) or (3) should merit a full credit for this question. Suggested Alternative Answer To: No, 5 (b): The criminal action can still prosper because the question of probate is a civil law matter while the question of forgery is a penal matter. That does not preclude the determination of guilt of the forger because the two are founded on different legal bases. Besides, in a criminal case, proof beyond reasonable doubt is required while in civil cases, only preponderance of evidence is required. 03; Succession; probate of notarial and holographic wills 1997 No. 10: Johnny, with no known living relatives, executed a notarial will giving all his estate to his sweetheart. One day, he had a serious altercation with his sweetheart. A few days later, he was introduced to a charming lady who later became a dear friend. Soon after, he executed a holographic will expressly revoking the notarial will and so designating his new friend as sole heir. One day when he was clearing up his desk, Johnny mistakenly burned, along with other papers, the only copy of his holographic will. His business associate, Eduardo. knew well the contents of the will which was shown to him by Johnny the day it was executed. A few days after the burning Incident, Johnny died. Both wills were sought to be probated in two separate petitions. Will either or both petitions prosper? Answer: The probate of the notarial will will prosper. The holographic will cannot be admitted to probate because a holographic will can only be probated upon evidence of the will Itself unless there Is a photographic copy. But since the holographic will Page 142 of 391 was lost and there was no other copy, it cannot be probated and therefore the notarial will will be admitted to probate because there is no revoking will. Additional Answers; 1. In the case of Gan vs. Yap (104 Phil 509), the execution and the contents of a lost or destroyed holographic will may not be proved by the bare testimony of witnesses who have seen or read such will. The will itself must be presented otherwise it shall produce no effect. The law regards the document itself as material proof of authenticity. Moreover, in order that a will may be revoked by a subsequent will, it is necessary that the latter will be valid and executed with the formalities required for the making of a will. The latter should possess all the requisites of a valid will whether it be ordinary or a holographic will, and should be probated in order that the revocatory clause thereof may produce effect. In the case at bar, since the holographic will itself cannot be presented, it cannot therefore be probated. Since it cannot be probated, it cannot revoke the notarial will previously written by the decedent. 2. On the basis of the Rules of Court, Rule 76, Sec. 6, provides that no will shall be proved as a lost or destroyed will *** unless its provisions are clearly and distinctly proved by at least two (2) credible witnesses. Hence, if we abide strictly by the two-witness rule to prove a lost or destroyed will, the holographic will which Johnny allegedly mistakenly burned, cannot be probated, since there is only one witness, Eduardo, who can be called to testify as to the existence of the will. If the holographic will, which purportedly, revoked the earlier notarial will cannot be proved because of the absence of the required witness, then the petition for the probate of the notarial will should prosper. 03; Succession; probate of wills of aliens 1989 No. 10: (2) "X", a Spanish citizen and a resident of Los Angeles, California, executed a will in Tokyo, Japan. May such will be probated in the Philippines? May his estate located in the Philippines be distributed in conformity with the provisions of the said will? Give your reasons. Answer: A. Yes, it may be made according to the formalities of Spanish law, California law, Japanese law, or Philippine law. B. Yes, provided that the provisions conform to the order of succession and the amount of successional rights as regulated by Spanish law. 03; Succession; probate; intrinsic validity 1990 No 9: H died leaving a last will and testament wherein it is stated that he was legally married to W by whom he had two legitimate children A and B. H devised to his said forced heirs the entire estate except the free portion which he gave to X who was living with him at the time of his death. In said will he explained that he had been estranged from his wife W for more than 20 years and he has been living with X as man and wife since his separation from his legitimate family. In the probate proceedings, X asked for the issuance of letters testamentary in accordance with the will wherein she is named sole executor. This was opposed by W and her children. (a) Should the will be admitted in said probate proceedings? Page 143 of 391 (b) Is the said devise to X valid? (c) Was it proper for the trial court to consider the intrinsic validity of the provisions of said will? Explain your answers, Answer: (a) Yes. the will may be probated if executed according to the formalities prescribed by law. (b) The institution giving X the free portion is not valid, because the prohibitions under Art. 739 of the Civil Code on donations also apply to testamentary dispositions (Article 1028, Civil Code), Among donations which are considered void are those made between persons who were guilty of adultery or concubinage at the time of the donation. (c) As a general rule, the will should be admitted in probate proceedings if all the necessary requirements for its extrinsic validity have been met. and the court should not consider the intrinsic validity of the provisions of said will. However, the exception arises when the will in effect contains only one testamentary disposition. In effect, the only testamentary disposition under the will is the giving of the free portion to X, since legitimes are provided by law. Hence, the trial court may consider the intrinsic validity of the provisions of said will. (Nuguid v. Nuguid, etal.. No. L23445, June 23, 1966, 17 SCRA; Nepomuceno v. CA, L-62952, 9 October 1985. 139 SCRA 206). 03; Succession; renunciation; compromise 1979 No. XIII MN, a wealthy haciendero died leaving to his four legitimate children and his widow an estate worth about P2 million. When the proceedings for the settlement of his estate were pending, Rosie, a child he begot with his lavandera, filed a claim for a share in the estate. The widow and four children contested the claim on the ground that in a previous action for support filed by the lavandera when Rosie was still a minor, the lavandera agreed to dismiss the case and signed an agreement acknowledging that the sum of P50,000.00 paid thereunder included payment for whatever inheritance Rosie was to have. Should Rosie's claim be granted? Why? Answer Rosie's claim should be granted but subject to the condition that the portion of the P50,000 paid to her mother as her inheritance shall be brought to collation. It must be observed that the agreement is actually a renunciation or compromise as regards a future legitimate or inheritance between the person owing it and a compulsory heir. According to the Civil Code, such a renunciation or compromise is void, and the latter may claim the same upon the death of the former, but he must bring to collation whatever he may have received by virtue of the renunciation or compromise. (Art. 905, Civil Code). (NOTE: If the bar candidate invokes either Art. 1347, par. 2, or Art. 2035, No. 6 of the Civil Code, instead of Art. 905, his answer should be considered correct because the result would be the same). 03; Succession; representation 1988 No. 7: (a) When does the right of representation take place? Answer: The right of representation shall take place in the following cases: (1) In testamentary succession: Page 144 of 391 (a) In case a compulsory heir in the direct descending line dies before the testator survived by his children or descendants (Art. 856, CC). (b) In case a compulsory heir in the direct descending line is incapacitated to succeed from the testator and he has children or descendants. (Arts. 856,1035, CC). (c) In case a compulsory heir in the direct descending line is disinherited and he has children or descendants. (Art. 923, CC). (2) In intestate succession: (a) In case a legal heir in the direct descending line dies before the decedent survived by his children or descendant (Arts. 981, 982, CC), or in the absence of other heirs who can exclude them from the succession, a brother or sister dies before the decedent survived by his or her own children. (Arts. 972,975, CC). (b) In case a legal heir in the direct descending line is incapacitated to succeed from the decedent and he has children or descendants (Art. 1035, CC), or in the absence of other heirs who can exclude them from the succession, a brother or sister is incapacitated to succeed from the decedent and he or she has children, (Arts, 972, 975,1035, CC), 03; Succession; reserva troncal 1987 No. 13: Lilia and Nelia are relatives, Ulia being the grand niece of Nelia. They had a common ancestor, Bonong, father of Nelia and great-grandfather of Lilia. Bonong had a sister, Rosa, who donated gratuitously a parcel of land to her niece Mely, sister of Nelia and grandmother of Lilia. Mely died intestate, leaving aforementioned parcel of land, survived by her husband Jose and their two children, Rico and Nina. Bonong died intestate survived by his legitimate grandchildren, Rico and Nina. In the adjudication of his estate, the portion pertaining to Mely, who had predeceased her father, went to her two legitimate children, Rico and Nina. Rico died intestate, single, and without any issue, leaving his share in the inheritance to his father, Jose, subject to a reserva troncal duly annotated on the tide. Thereafter Nina died intestate and her rights and interests were inherited by her only legitimate child, Lilia. Thereafter, Jose died intestate survived by his only descendant, Lilia. Nelia, aunt of Rico, would like to lay claim as reservatario to a portion of the one-half pro indiviso share of the property inherited by Jose from his son Rico, How should the estate of Jose, including the property subject to reserva troncal be adjudicated? Explain. Answer: This is a proper case of reserva troncal. The propositus is Rico, the reservista is Jose and the reservatarios are-Lilia (a niece) and Nelia (an aunt), both of them being relatives within the 3rd degree of Rico (the propositus)and belonging to the maternal line represented by Mely. Accordingly, Nelia as reservatario cannot claim any portion of the pro-indiviso share of the property inherited by Jose from Rico. Lilia alone should inherit because in reserva troncal, the successional rights of relatives who are reservatarios are determined by the rules of intestate succession. In intestacy, nephews and nieces exclude uncles and aunts. Hence, Lilia the niece, excludes Nelia, the aunt, from the reservable property (De Papa vs. Camacho 144 SCRA 281), The rest of Jose's estate, not subject to reserva, will be inherited by his granddaughter Lilia as sole intestate heir. Answer; Page 145 of 391 This is. a proper case of reserva troncal. The propositus is Rico, the reservista and the reservatarios are Lilia and Nelia, both of them being relatives within the 3rd degree computed from Rico and belonging to the maternal line represented by Mely. Under the doctrine of "reserva integral'" all the reservatarios in the nearest degree will inherit in equal shares the reservable portion of the proindiviso share of the property inherited by Jose from Rico. The properties transmitted to Jose by Rico are-the following: Firstly, the property which Rico obtained from Mely consisted of his share in Mely's interest as donee of Rosa's land. The interest acquired by Rico was 1/3, because 1/3 thereof was inherited by Jose and 1/3 by Nina. So the property that was obtained by Jose from Rico is the latter's 1/3 interest of the land. In the case of Bonong's estate, the share of Mely was 1/2 and Nelia's was the other half. Out of Mely's share, 1/2 belonged to Rico and the other half belonged to Nina, both Inheriting by right of representation. Summarizing, the reservable estate is the 1/3 share of Rico in Rosa's land which was donated to Mely, and the 1/2 interest of Rico in Mely's share of the estate of Bonong. These reservable properties should be divided equally between Nelia and Lilia (Article 891). 03; Succession; reserva troncal 1979 No. XIV A married B in 1950 bringing into the marriage a 10-hectare piece of unregistered land in Antipolo which he inherited from his father. Of the marriage two daughters were born. On February 10, 1956 A and his two daughters went to Baguio. On the way they met an accident and A died instantly on the spot while the two daughters died two days later in the hospital where they were brought. In 1960 B sold the land .to C. In 1977 B died so D, the only brother of A, asked C to reconvey the land to him. Upon C's refusal, D filed a complaint for recovery of the land. C raised the defense of prescription. Should the defense be sustained? Why? Answer The defense should be sustained but only with respect to one-third of the subject property; however, with respect to the other two-thirds, it should not be sustained. It must be observed that when A died the subject property passed by intestate succession to his wife B and his two daughters in the proportion of onethird for each. When the two daughters died two hours later, their one-third shares passed by intestate succession to their mother B. These shares which B acquired by operation of law from her two daughters became reservable. In other words, by mandate of the law, upon acquiring the two-thirds share of her daughters she was obliged to reserve such share for the benefit of relatives of her two deceased daughters who are within the third degree and who belong to the live from whence the reservable property came. All of the requisites of reserva troncal are, therefore, present. In the first place, the property was acquired by a descendant from an ascendant or from a brother or sister by gratuitous title; in the second place, said descendant died without any legitimate issue in the direct descending line who can inherit from him; in the third place, the property is inherited by another ascendant by operation of law; and in the fourth place, there are relatives of the descendant who are within the third degree and who belong to the line from which said property came. Consequently, when C bought the subject property from B in I960, he acquired only that which B had and nothing more. In other words, when B, the ascendant reservista sold the property to C in 1960, the latter acquired the one-third share which B had inherited from A without any condition whatsoever. However, with Page 146 of 391 respect to the other two-thirds share which is reservable, C acquired a limited and revocable title only. Therefore, when B, the ascendant-reservista vendor finally died in 1977, automatically, by operation of law, the two-thirds share which is reservable passed to D, who is the reservee or reservatario. Premises considered, the defense of prescription can only be sustained with respect to the one-third share of B which she had inherited from A in 1955. The computation of the 10-year period of prescription must commence from 1960. In the case of the two-thirds share which is reservable, the computation must commence from 1977 when B, the ascendant-reservista, died. When D, the reservatario, therefore, filed his action after the death of B, he was very much in time to do so. (Chua vs. CFI, 78 SCRA 412). 03; Succession; reserva troncal 1982 No. 4 (A) What is the reason or rationale for reserva troncal? (B) May the reservor/reservista dispose of the reservable property — (1) By acts inter vivos? (2) By acts mortis causa.? Reasons. Answer (A) The reason or rationale for reserva troncal is evident: it is to reserve certain property in favor of certain relatives. Hence, its name reserva lineal or troncal. It seeks to prevent persons outside a family from securing, by some special accident of life, property that would otherwise remained therein. Its principal aim is to maintain as absolutely as is possible, with respect to the property to which it refers, a separation between the paternal and maternal lines, so that property of one line may not pass to the other, or through them to strangers. (Note: The above answer is lifted from 6 Sanchez Roman 1015 and 14 Scaevola 213,) (B) (1) The reservista may dispose of the reservable property by acts inter vivos. This is logical because he acquires the ownership of the reservable property upon the death of the descendant-propositus subject to the resolutory condition that there must exist at the time of his death relatives of the descendant who are within the third degree and who belong to the line from which the property came. He can, therefore, alienate or encumber the property if he so desires, but he will only alienate or encumber what he has and nothing more. As a consequence, the acquirer will only receive a limited and revocable title. Therefore, after the death of the reservista, the reservatarios may then rescind the alienation or encumbrance, because the resolutory condition to which the reserva is subject has already been fulfilled. (Note: The above answer is based on Edroso vs. Sablan, 25 Phil. 295 and Lunsod vs. Ortega, 46 Phil. 664. It is also based on comments of recognized commentators.) (2) The reservista cannot dispose of the reservable property by acts mortis causa. The reason is crystal clear. Upon the death of said ascendant-reservist, reservable property does not belong to his or her estate. Because the resolutory condition to which the reserva is subject has already been fulfilled, therefore, the reservatarios or reservees nearest the descendant- propositus have already become automatically and by operation of law owners of the reservable property. (Note: The above answer is based on Cano vs. Director of Lands (105 Phil 1) and on Gonzales vs. Legarda (May 19, 1981). The Committee respectfully Page 147 of 391 recommends that if the bar candidate will support his answer by saying that the reservista is merely a usufructuary as stated by Mr. Justice Aquino in Gonzales vs. Legarda, the answer should be properly credited.) 03; Succession; right of representation 1977 No. XIII-c What is meant by the right of representation in succession? In what line does it take place? Representation is a right created by fiction of law, by virtue of which the representative is raised to the place and the degree of the person represented, and acquires the rights which the latter would have if he were living or if he could have inherited (Art. 970, Civil Code). The right of representation takes place in the direct descending line, but never in the ascending. In the collateral line, it takes place only in favor of the children of brothers or sisters, whether they be of the full or half blood. (Art. 972, Civil Code). When children of one or more brothers or sisters of the deceased survive, they shall inherit from the latter by representation, if they survive with their uncles or aunts. But if they alone survive, they shall inherit in equal portions. (Art, 975, Civil Code). 03; Succession; testate succession; institution of heirs; substitution of heirs 2002 No VIII. By virtue of a Codicil appended to his will, Theodore devised to Divino a tract of sugar land, with the obligation on the part of Divino or his heirs to deliver to Betina a specified volume of sugar per harvest during Betina’s lifetime. It is also stated in the Codicil that in the event the obligation is not fulfilled, Betina should immediately seize the property from Divino or latter’s heirs and turn it over to Theodore’s compulsory heirs. Divino failed to fulfill the obligation under the Codicil. Betina brings suit against Divino for the reversion of the tract of land. A. Distinguish between modal institution and substation of heirs. (3%) B. Distinguish between simple and fideicommissary substitution of heirs. C. Does Betina have a cause of action against Divino? Explain (5%) (2%) SUGGESTED ANSWER: A. A modal institution is the institution of an heir made for a certain purpose or cause (Arts. 871 and 882, NCC). Substitution is the appointment of another heir so that he may enter into the inheritance in default of the heir originality instituted. (Art. 857, NCC). B. In a simple substitution of heirs, the testator designates one or more persons to substitute the heirs instituted in case such heir or heirs should die before him, or should not wish or should be incapacitated to accept the inheritance. In a fideicommissary substitution, the testator institutes a first heir and charges him to preserve and transmit the whole or part of the inheritance to a second heir. In a simple substitution, only one heir inherits. In a fideicommissary substitution, both the first and second heirs inherit. (Art. 859 and 869, NCC) C. Betina has a cause of action against Divino. This is a case of a testamentary disposition subject to a mode and the will itself provides for the consequence if the mode is not complied with. To enforce the mode, the will itself Page 148 of 391 gives Betina the right to compel the return of the property to the heirs of Theodore. (Rabadilla v. Conscoluella, 334 SCRA 522 [2000] GR 113725, 29 June 2000). 03; Succession; testate succession; order of succession and sharing 1983 No. 7 The deceased, A left a gross estate worth P360,000 and debts amounting to P60,000. He was survived by his widow, three legitimate children, an acknowledged natural child and an adulterous child. In his will, he bequeathed P6,000 to a friend, leaving the remainder of his estate to his widow and children, legitimate as well as illegitimate. Divide A's estate among the persons entitled thereto. Give reasons for your division. Answer The net estate is worth P300,000.00 [P360.000.00 (gross estate) -P60,000.00 (debts)] Each of the legitimate children will receive P50,000 as legitime. The widow will receive the same amount as legitime. The legitime of the acknowledged natural child is 1/2 of that of each legitimate child or P25.000.00 The share of the spurious child is 4/5 of that of the acknowledged natural child or P20,000.00, In addition, the legitimate children, the widow, the acknowledged natural child, and the adulterous child will each receive P8,166.66 2/3 as their share of the remainder of the free portion, after deducting therefrom the legitimes of the surviving spouse, the illegitimate children and the legacy. The legatee, will get P6,000.00-Explanation: Since the legitime of the legitimate children, which is 1/2 of the estate, cannot be impaired, only the free portion, the other half of A's property, is available for the satisfaction of the shares of the other distributees. From that part must first be taken the legitimes of the surviving spouse and of the illegitimate children which total P95,000,00. To the remainder of the free portion, or P55,000 is likewise chargeable the legacy. The remainder of the free portion will then be P49,000.00 which shall be divided equally among the children, legitimate as well as illegitimate and the widow, it having been left to them without any designation of the shares, 03; Succession; transmission of rights to succession 1983 No. 8 On A's death last year, his nearest of kin were a legitimate daughter born in 1945 and a spurious son born and recognized by A in 1949. May the daughter oppose her brother's claim to their father's estate on the ground that it would impair her right under the old Civil Code to succeed him to the exclusion of spurious children? Why? Answer No. The rights to the succession are transmitted only from the moment of the death of the decedent. Since A died last year when the old Civil Code was no longer in force, she did not acquire the right granted by it to exclude her brother from A's inheritance. Her right thereto is governed by the new Civil Code, the statute in force at the time of the opening of the succession of A, under which spurious children inherit together with legitimate descendants. Page 149 of 391 03; Succession; when death takes place; pesumptive legitime 1991 No 6: (a) For purposes of succession, when is death deemed to occur or take place? (b) May succession be conferred by contracts or acts inter vivos? Illustrate. (c) Is there any law which allows the delivery to compulsory heirs of their presumptive legitimes during the lifetime of their parents? If so, in what instances? Answer: A. Death as a fact is deemed to occur when it actually takes place. Death is presumed to take place in the circumstances under Arts. 390-391 of the Civil Code. The time of death is presumed to be at the expiration of the 10-year period as prescribed by Article 390 and at the moment of disappearance under Article 391 B. Under Art. 84 of the Family Code amending Art 130 of the Civil Code, contractual succession is no longer possible since the law now requires that donations of future property be governed by the provisions on the testamentary succession and formalities of wills, Alternative Answer: B. In the case of Coronado vs.CA(l91 SCRA81), it was ruled that no property passes under a will without its being probated, but may under Article 1O58 of the Civil Code of 1898, be sustained as a partition by an act inter vivos [Many-Oy vs. CA 144SCRA33). And in the case of Chavez vs, IAC 1191 SCRA211), it was ruled that while the law prohibits contracts upon future inheritance, the partition by the parent, as provided in Art. 1080. is a case expressly authorized by law. A person has two options in making a partition of his estate: either by an act inter vivos or by will. If the partition is by will, it is imperative that such partition must be executed in accordance with the provisions of the law on wills; if by an act inter vivos, such partition may even be oral or written, and need not be in the form of a will, provided the legitime is not prejudiced, "Where several sisters execute deeds of sale over their 1 /6 undivided share of the paraphernal property of their mother, in favor of another sister, with their mother not only giving her authority thereto but even signing said deeds, there is a valid partition inter vivos between the mother and her children which cannot be revoked by the mother. Said deeds of sale are not contracts entered into with respect to future inheritance. "It would be unjust for the mother to revoke the sales to a son and to execute a simulated sale in favor of a daughter who already benefited by the partition." Answer: C. Yes, under Arts. 51 and 52 of the New Family Code. In case of legal separation, annulment of marriage, declaration of nullity of marriage and the automatic termination of a subsequent marriage by the reappearance of the absent spouse, the common or community property of the spouses shall be dissolved and liquidated. Art, 51. In said partition, the value of the presumptive legitimes of all common children, computed as of the date of the final judgment of the trial court, shall be delivered in cash, property or sound securities, unless the parties, by mutual agreement, judicially approved, had already provided for such matters. Page 150 of 391 The children of their guardian, or the trustee of their property, may ask for the enforcement of the judgment. The delivery of the presumptive legitimes herein prescribed shall In no way prejudice the ultimate successional rights of the children accruing upon the death of either or both of the parents; but the value of the properties already received under the decree of annulment or absolute nullity shall be considered as advances on their legitime. Art. 52. The judgment of annulment or of absolute nullity of the marriage, the partition and distribution of the properties of the spouses, and the delivery of the children's presumptive legitimes shall be recorded in the appropriate civil registry and registries of property; otherwise, the same shall not affect third persons. 03; Succession; wills 1989 No. 10: (1) What are the characteristics of a will? Answer: A will is — 1. Personal 2. Unilateral 3. Formal or Solemn 4. Ambulatory or revocable 5. Individual, not joint 6. Free and voluntary 7. Mortis causa RECOMMENDATION OF THE COMMITTEE: Since this is not a codal provision, it is recommended that an answer of three (3) be given full credit. 03; Succession; wills; codicil 1977 No. XII-b What is a codicil and how shall it be executed in order that it may be effective? Aimer A codicil is a supplement or addition to a will, made after the execution of a will and annexed to be taken as a part thereof, by which any disposition made in the original will is explained, added to, or altered (Art. 825, Civil Code). The formalities which are required in the execution of a codicil are the same as those required in the execution of a will (Art. 826, Civil Code). 03; Succession; wills; formalities 1975 No. XII The attestation clause of the will omits to state that testator signed in the presence of the witnesses and that the latter signed in the presence of the testator and of one another. May evidence aliunde be admitted to prove these facts to allow the probate of the will? Explain. Answer No, evidence aliunde may not be admitted to prove that the testator and the witnesses signed in one another's presence because such fact cannot be determined from an examination of the will itself. The reason for this is that oral evidence does not possess the reliability of an express statement in the attestation Page 151 of 391 clause. It is for this reason that Article 805 of the Civil Code requires the attestation clause to state these facts, (Uy Coque v. Sioca, 43 Phil. 405; Tenefrancia v. Abaya, 47 O.CT. No. 12 Suppl. p. 327) 03; Succession; wills; formalities 1986 No. 14: Busalsal executed a will in his handwriting, signed by him at the end of each page on the left marginal space of every page except the last page. The document bore no date. However, below Busalsal's every signature, were the signatures of two witnesses, who later testified that the will was executed in their presence on January 1, 1985, New Year's Day, and that Busalsal was in full possession of his faculties at that time and even explained to them details of the will he was writing down. Is the will formally valid? Explain. Answer: The will is not valid either as a notarial will or a holographic will. It is not valid as a notarial will because this requires 3 attesting witnesses. Neither is it a valid holographic will because the will must be entirely written, dated and signed in the handwriting of the testator. The fact that the witnesses testified as the date of execution did not cure the defect. Answer - The will is not formally valid. Whether we consider the will in the instant problem as a notarial will or as a holographic will, it cannot be considered as a valid will. If we consider it as a notarial will, it is not be valid because there are only two instrumental witnesses. Under the law on notarial or ordinary wills, the will should have been subscribed to and attested by three or more credible witnesses. Therefore, it is void. If we consider it as a holographic will, it is not also valid because it is not dated. Under the law on holographic wills, the will should have been entirely written, dated and signed by the hand of the testator himself. Therefore, it is void. (Note: The above answer is based upon Arts. 805 and 810 of the Civil Code and upon decided cases.) Answer - The C.C. provides that a holographic will must be entirely in the handwriting of the testator, signed and dated by him. It need not be witnessed. Hence lacking the date, it cannot be allowed to probate. The law does not allow extrinsic evidence to supply the omission. 03; Succession; wills; formalities 1990 No 11; (1) If a will is executed by a testator who is a Filipino citizen, what law will govern if the will is executed in the Philippines? What law will govern if the will is executed in another country? Explain your answers. (2) If a will is executed by a foreigner, for instance, a Japanese, residing In the Philippines, what law will govern if the will is executed in the Philippines? And what law will govern if the will is executed in Japan, or some other country, for instance, the U.S.A.? Explain your answers. Answer: (1) a. If the testator who is a Filipino citizen executes his will in the Philippines, Philippine law will govern the formalities. b. If said Filipino testator executes his will in another country, the law of the country where he maybe or Philippine law will govern the formalities. (Article 815, Civil Code} Page 152 of 391 (2) a. If the testator is a foreigner residing in the Philippines and he executes his will in the Philippines, the law of the country of which he is a citizen or Philippine law will govern the formalities. b. If the testator is a foreigner and executes his will in a foreign country, the law of his place of residence or the law of the country of which he is a citizen or the law of the place of execution, or Philippine law will govern the formalities (Articles 17. 816. 817. Civil Code). Possible Additional Answers: a. In the case of a Filipino citizen, Philippine law shall govern substantive validity whether he executes his will in the Philippines or in a foreign country. b. In the case of a foreigner, his national law shall govern substantive validity whether he executes his will in the Philippines or in a foreign country. 03; Succession; wills; formalities 1975 No. XI Through negligence, one of the three witnesses to a will forgot to sign on the third page of the original of a five-page will, but was able to sign on all the pages of the duplicate. All other requisites were complied with. Can the will be admitted to probate? Explain. Answer The will may be admitted to probate. Although the requirements of Article 805 of the Civil Code were not strictly complied with, the purposes of the law have been satisfied. Impossibility of substitution is assured by the fact that the testator and the two other witnesses signed the defective page. The law should not be strictly and literally interpreted as to penalize the testator on account of the inadvertence of a single witness over whose conduct he had no control, where the purpose of the law to guarantee the identity of the testament and its component pages is sufficiently attained and no intentional or deliberate deviation exists. (Icasiano v. Icasiano, 11 SCRA 422) Besides, the signed duplicate copy has the same effect as the original. 03; Succession; wills; formalities; Holographic wills; effect of unauthenticated insertions and cancellations 1996 No. 10: 1) Vanessa died on April 14. 1980. leaving behind a holographic will which is entirely written, dated and signed in her own handwriting. However, it contains Insertions and cancellations which are not authenticated by her signature. For this reason, the probate of Vanessa's will was opposed by her relatives who stood to inherit by her intestacy. May Vanessa's holographic will be probated? Explain. Answer; Yes, the will as originally written may be probated. The insertions and alterations were void since they were not authenticated by the full signature of Vanessa, under Art. 814, NCC. The original will, however, remains valid because a holographic will is not invalidated by the unauthenticated insertions or alterations (Ajero v. CA, 236 SCRA 468]. Alternative Answer: It depends. As a rule, a holographic will is not adversely affected by Insertions or cancellations which were not authenticated by the full signature of the testator (Ajero v. CA, 236 SCRA 468). However, when the insertion or cancellation amounts to revocation of the will, Art.814 of the NCC does not apply but Art. 830. Page 153 of 391 NCC. Art. 830 of the NCC does not require the testator to authenticate his cancellation for the effectivity of a revocation effected through such cancellation (Kalaw v. Relova, 132 SCRA 237). In the Kalaw case, the original holographic will designated only one heir as the only substantial provision which was altered by substituting the original heir with another heir. Hence, if the unauthenticated cancellation amounted to a revocation of the will, the will may not be probated because it had already been revoked. 03; Succession; wills; formalities; revocation of wills 2003 No XI. Mr. Reyes executed a will completely valid as to form. A week later, however, he executed another will which expressly revoked his first will, which he tore his first will to pieces. Upon the death of Mr. Reyes, his second will was presented for probate by his heirs, but it was denied probate due to formal defects. Assuming that a copy of the first will is available, may it now be admitted to probate and given effect? Why? SUGGESTED ANSWER: Yes, the first will may be admitted to probate and given effect. When the testator tore first will, he was under the mistaken belief that the second will was perfectly valid and he would not have destroyed the first will had he known that the second will is not valid. The revocation by destruction therefore is dependent on the validity of the second will. Since it turned out that the second will was invalid, the tearing of the first will did not produce the effect of revocation. This is known as the doctrine of dependent relative revocation (Molo v. Molo, 90 Phil 37.) ALTERNATIVE ANSWERS: No, the first will cannot be admitted to probate. While it is true that the first will was successfully revoked by the second will because the second will was later denied probate, the first will was, nevertheless, revoked when the testator destroyed it after executing the second invalid will. (Diaz v. De Leon, 43 Phil 413 [1922]). 03; Succession; wills; revocation 1981 No. 7 A testator, a bachelor of 60, executed a Will bequeathing a ricefield to the Church worth P100,000.00. The Will further provided that "all other assets owned by me after death shall be equally divided among my two brothers "A" and "B". The testator subsequently married a young woman, begot a son, and left another Will designating his wife and son as his heirs in equal shares. The second Will did not expressly revoke the first Will. He left an estate worth P300,000.00 (including the ricefield). a) Who is entitled to the ricefield? Reasons. b| Who acquires the rest of the assets? Explain. Answer (a) It must be observed that the testator left two wills. In his first will, he bequeathed the ricefield to the Church and instituted as heirs in equal shares his two brothers "A" and "B" with respect to the rest of his estate. In his second will, he instituted his wife and his son as heirs in equal shares. Under our law on revocation of wills, a will may be revoked by another will- The revocation may be effected either expressly or impliedly. Since there is no express revocation, is there an implied revocation in the instant case? It is undeniable that there is an implied revocation if the testamentary dispositions found in the first will are totally or partially incompatible with those found in the second will. It is also undeniable that the incompatibility must be absolute in character in the sense that the testamentary dispositions cannot Page 154 of 391 stand together. The real issue, therefore, is whether the two testamentary dispositions found in the first will can stand together with the single testamentary disposition found in the second will. There are two views. According to one view, reading the two wills together it is clear that the testatorial intention is that only the testator's wife and son shall inherit. They are instituted as universal heirs with respect to the hereditary estate in its totality. Therefore, the second will in its totality cannot stand together with the first will in its totality. Consequently, the incompatibility between the testamentary dispositions found in the, first will and those found in the second will is both total and absolute in character. Hence, the first will is impliedly revoked by the second will. The testator's widow and his son are, therefore, entitled to the ricefield According to a second view, only the institution of "A" and " B'' in the firs t will as heirs and that portion or part of the bequest given to the Church which will impair the legitime of the testator's son and widow are revoked by the second will. The reason is that it is only to that extent that there is absolute incompatibility between the testamentary dispositions found in the first will and those found in the second will. Consequently, the Church shall be entitled to the ricefield but only to the extent that it does not encroach upon the legitime of the testator's son and widow. (Nme: The above answers are based on the law on revocation of wills, such as Arts. 830. et. seq.. Civil Code and on well settled principles in American jurisprudence. The Committee respectfully recommends that whether the bar candidate will solve the problem either in accordance with the first view or in accordance with the second view, it should be considered as a correct answer.) (b) Suggested answer for those who adhere to the first view stated above: There are two views with regard to the distribution of the entire estate, including the ricefield. According to one view, one-half (1/2) shall be given to the testator's widow and the other one-half (1/2) shall be given to the testator's son. This division would be more in conformity with the testatorial intention. According to another view, first satisfy the legitime of the two heirs. The testator's widow shall be entitled to one-fourth (1/4) of P300,000, or P75,000, while the testator's son shall be entitled to one-half, or P150,000. The disposable free portion shall then be divided equally between the two. This would be more in conformity with the testatorial intention. (Note: The Committee recommends that either answer should be considered correct.) Suggested answer for those who adhere the second view stated above: The testator's son shall be entitled to a legitime of one-half |l/2) of the entire estate, or P150.000; the widow shall be entitled to a legitime of one-fourth on the entire estate, or P75,000. That means that the bequest in favor of the Church is inofficious to the extent of P25.000, considering that the value of the ricefield is P100,000. Consequently, said bequest or devise should be reduced by one-fourth (1/4). Therefore, the Church shall be entitled only to an undivided share of threefourth (3/4) of the ricefield. 03; Succession; wills; testamentary intent 1996 No. 10: 2) Alfonso, a bachelor without any descendant or ascendant, wrote a last will and testament in which he devised." all the properties of which I may be Page 155 of 391 possessed at the time of my death" to his favorite brother Manuel. At the time he wrote the will, he owned only one parcel of land. But by the time he died, he owned twenty parcels of land. His other brothers and sisters insist that his will should pass only the parcel of land he owned at the time it was written, and did not cover his properties acquired, which should be by intestate succession. Manuel claims otherwise. Who is correct? Explain. Answer: Manuel is correct because under Art. 793, NCC, property acquired after the making of a will shall only pass thereby, as if the testator had possessed it at the time of making the will, should it expressly appear by the will that such was his intention. Since Alfonso's intention to devise all properties he owned at the time of his death expressly appears on the will, then all the 20 parcels of land are included in the devise. 03; Succession; wills; witnesses to holographic wills 1989 No. 11: (1) The probate of the will of Nicandro is contested on the ground that the notary public before whom the will, was acknowledged was also one of the three instrumental witnesses. If you were the probate judge, how would you decide the contest? Give your reasons. Answer: The will is void. The acknowledging officer cannot serve as attesting witness at the same time. In effect there are only two witnesses since the notary cannot swear before himself. 03; Succession; wills; witnesses to holographic wills 1994 No. 10: On his deathbed, Vicente was executing a will. In the room were Carissa, Carmela, Comelio and Atty. Cimpo, a notary public. Suddenly, there was a street brawl which caught Comelio's attention, prompting him to look out the window. Cornelio did not see Vicente sign a will. Is the will valid? Alternative Answers: a) Yes, The will is valid. The law does not require a witness to actually see the testator sign the will. It is sufficient if the witness could have seen the act of signing had he chosen to do so by casting his eyes to the proper direction. b) Yes, the will is valid. Applying the "test of position", although Comelio did not actually see Vicente sign the will, Cornelio was in the proper position to see Vicente sign if Cornelio so wished. Page 156 of 391 04; Donation & Sales ownership of the thing donated 2003 No XV. (a) May a person sell something that does not belong to him? Explain. (b) May a person donate something that does not belong to him? Explain. 5% SUGGESTED ANSWERS: (a) Yes, a person may sell something which does not belong to him. For the sale to be valid, the law does not require the seller to be the owner of the property at the time of the sale. (Article 1434, NCC). If the seller cannot transfer ownership over the thing sold at the time of delivery because he was not the owner thereof, he shall be liable for breach of contact. (b) As a general rule, a person cannot donate something which he cannot dispose of at the time of the donation (Article 751, New Civil Code). 04; Donation; annulment 1982 No. 3 "H", the husband, during the marriage to his second wife, donated a parcel of land to "A", a son of the second wife by her first marriage. (Assume that the formalities required by law had been complied with). After the death of the husband donor, his brother, "B", his nearest living relative, brought an action to annul the donation. Will the action prosper? Reason. Answer: Yes, the action will prosper. According to the Civil Code, a donation during the marriage by one of the spouses to the children whom the other spouse had by another marriage, or to persons of whom the other spouse is a presumptive heir at the time of the donation is voidable at the instance of the donor's heirs after his death. Since the problem says that "B", a brother of the decedent donor, is the nearest living relative of said donor, it is clear that he can now institute the action for annulment. (Note: The above answer is based on Art. 134 of the Civil Code.) 04; Donations 1999 No I. Elated that her sister who had been married for five years was pregnant for the first time, Alma donated P100,000.00 to the unborn child. Unfortunately, the baby died one hour after delivery. May Alma recover the P100.000.00 that she had donated to said baby before it was born considering that the baby died? Stated otherwise, is the donation valid and binding? Explain. (5%) ANSWER: The donation is valid and binding, being an act favorable to the unborn child, but only if the baby had an intra-uterine life of not less than seven months and provided there was due acceptance of the donation by the proper person representing said child. If the child had less than seven months of intra-uterine life, it is not deemed born since it died less than 24 hours following its delivery, in which ease the donation never became effective since the donee never became a person, birth being determinative of personality. ALTERNATIVE ANSWER: Even if the baby had an intra-uterine life of more than seven months and the donation was properly accepted, it would be void for not having conformed with the Page 157 of 391 proper form. In order to be valid, the donation and acceptance of personal property exceeding five thousand pesos should be in writing. (Article 748, par. 3) 04; Donations 2003 No X. In 1950, Dr. Alba donated a parcel of land to Central University on condition that the latter must establish a medical college on the land to be named after him. In the year 2000, the heirs of Dr. Alba filed an action to annul the donation and for the reconveyance of the property donated to them for the failure, after 50 years, of the University to established on the property a medical school named after their father. The University opposed the action on the ground of prescription and also because it had not used the property for some purpose other than that stated in the donation. Should the opposition of the University to the action of Dr. Alba’s heirs be sustained? Explain. SUGGESTED ANSWER: The donation may be revoked. The non-established of the medical college on the donated property was a resolutory condition imposed on the donation by the donor. Although the Deed of Donation did not fix the time for the established of the medical college, the failure of the donee to establish the medical college after fifty (50) years from the making of the donation should be considered as occurrence of the resolutory condition, and the donation may now be revoked. While the general rule is that in case the period is not fixed in the agreement of the parties, the period must be fixed first by the court before the obligation may be demanded, the period of fifty (50) years was more than enough time for the donee to comply with the condition. Hence, in this case, there is no more need for the court to fix the period because such procedure with the condition. (Central Philippine University v. CA. 246 SCRA 511). ANOTHER SUGGESTED ANSWER: The donation may not as yet revoked. The establishment of a medical college is not a resolutory or suspensive condition but a “charge”, obligation”, or a “mode”. The noncompliance with the charge or mode will give the donor the right to revoke the donation within four (4) years from the time the charge was supposed to have been complied with, or to enforce the charge by specific performance within ten (10) years from the time the cause of action accrued. Inasmuch as the time to established the medical college has not been fixed in the Deed of Donation, the donee is not yet default in his obligation until the period is fixed by order of the court under Article 1197 of the New Civil Code. Since the period has not been fixed as yet, the donee is not yet default, and therefore the donor has no cause of action to revoke the donation. (Dissenting opinion of Davide, CJ, Central Philippine University v. Court of Appeals, 246 SCRA 511 [1995]) 04; Donations 1988 No. 4: (b) A donated to X a parcel of land in 1975. The donation was made in a public instrument, while the acceptance made by X was embodied in the same public instrument. The Deed of Donation was entitled "Donation Inter Vivos." There is however a provision in the deed to the effect that, although the land donated shall be delivered immediately to X upon the perfection of the donation with full right to enjoy all of the fruits thereof, "title shall pass to the donee only upon the donor's death." Upon the death of A, his widow and only heir, B, brought an action for the recovery of the property on the ground that the donation is a donation mortis causa and not a donation inter vivos. Will the action prosper? Give your reasons. Page 158 of 391 Answer: (b) Yes, the action will prosper. In Bonsato vs. Court of Appeals, and Howard vs. Court of Appeals, the Supreme Court declared that in order that a donation will be considered a disposition post mortem, it should reveal any or all of the following characteristics: (1) Convey no title or ownership to the transferee before the death of the transferor; or, what amounts to the same thing, that the transferor should retain the ownership, full or naked, and control the property while alive; (2) That before his death the transfer should be revocable by the transferor at will, ad nutum; but revocability may be provided for indirectly by means of a reserved power in the donor to dispose of the property conveyed: (3) That the transfer should be void if the transferor should survive the transferee. It is clear from the facts stated in the problem that the donation reveals the first characteristic. Hence, it is a disposition, post mortem. Therefore, in order that the donation can take effect it is essential that it must be made in a will executed in accordance with all of the formalities prescribed by law (Art. 728. CC}. Since this requisite has not been complied with, the donation in the instant case is void or inexistent. Committee's Recommendations Re: No. 4 (b) (b) It is recommended that the mention of the first characteristic of the three mentioned above, should merit a full credit for this question. 04; Donations 1982 No. 8 "A", residing in Manila, and having the capacity to enter into a contract and dispose of his properties, donated a parcel of land to "B", a resident of Davao. The deed of donation was sent to "B" in Davao. One year later, "B" accepted and notified the donor. In the meantime, the donor became insane, and was still insane at the time he received the notice of acceptance. (Assume that all other formalities of the donation and acceptance had been complied with). The donor died a few days later, without having recovered his sanity. The heirs refused to deliver the land to "B" on the ground that the donation had not been perfected for lack of capacity of the donor at the time he received the notice of acceptance. Decide with reasons. Answer There are two views. According to one view, the donation is binding. The exponents of this view maintain that there is only one moment which must be considered in order to determine the donor's capacity to make the donation and that is "the time of the making of the donation" in accordance with the literal tenor of Art. 737 of the Civil Code. According to them, when the law speaks of the making of the donation, it can only refer to that precise moment when the donor manifests his offer to make the donation to the donee. And besides, even if the donor becomes insane subsequently, the acceptance can always be conveyed to his legal representative. According to another view, the donation is not binding for the following reasons: (1) Art. 737 of the Civil Code declares that the donor's capacity shall be determined as of the time of the making of the donation. Correlating this with Art. 734 which declares that a donation is perfected from the moment the donor knows Page 159 of 391 of the acceptance by the donee, it is clear that when the law speaks of the making of a donation, it refers not only to that moment when the donor manifest to the donee his offer to make the donation but also to that more decisive moment — the moment of perfection of the contract — the moment the donor knows of the acceptance by the donee. (2) Furthermore, if the donation in the instant case is binding, by parity of reasoning, a donation made by one who dies subsequent to his offer to make a donation would also be binding. Such a situation would, of course, be juridically absurd. This is clear from Art, 1323 of the Civil Code which declares that an offer becomes ineffective upon the death, civil interdiction, insanity, or insolvency of either party before acceptance is conveyed. We believe that the latter view is more logical. Consequently, the contention of the heirs of "A" is correct (Note: The above answer is based on the opinions of commentators on the New Civil Code.) 04; Donations 1993 No. 6; On January 2t 1986, A executed a deed of donation inter vivos of a parcel of land to Dr. B who had earlier constructed thereon a building in which researches on the dreaded disease AIDS were being conducted. The deed, acknowledged before a notary public, was handed over by A to Dr. B who received it. A few days after, A flew to Davao City. Unfortunately, the airplane he was riding crashed on landing killing him. Two days after the unfortunate accident. Dr. B, upon advice of a lawyer, executed a deed acknowledged before a notary public accepting the donation. Is the donation effective? Explain your answer. Answer: No, the donation is not effective. The law requires that the separate acceptance of the donee of an immovable must be done in a public document during the lifetime of the donor (Art. 746 & 749, Civil Code) In this case, B executed the deed of acceptance before a notary public after the donor had already died 04; Donations; donations mortis causa 1998 No IX. Ernesto donated in a public instrument a parcel of land to Demetrio, who accepted it in the same document. It is there declared that the donation shall take effect immediately, with the donee having the right to take possession of the land and receive its fruits but not to dispose of the land while Ernesto is alive as well as for ten years following his death. Moreover, Ernesto also reserved in the same deed his right to sell the property should he decide to dispose of it at any time - a right which he did not exercise at all. After his death, Ernesto's heirs seasonably brought an action to recover the property, alleging that the donation was void as it did not comply with the formalities of a will. Will the suit prosper? [5%] Answer: Yes, the suit will prosper as the donation did not comply with the formalities of a will. In this instance, the fact that the donor did not intend to transfer ownership or possession of the donated property to the donee until the donor's death, would result in a donation mortis causa and in this kind of disposition, the formalities of a will should be complied with, otherwise, the donation is void. In this Instance, donation mortis causa embodied only in a public instrument without the formalities of a will could not have transferred ownership of disputed prop-city to another. Page 160 of 391 Alternative Answer One of the essential distinctions between a donation inter vivos and a donation mortis causa is that while the former is irrevocable, the latter is revocable. In the problem given, all the clauses or conditions mentioned in the deed of donation, except one, are consistent with the rule of irrevocability and would have sustained the view that the donation is inter vivos and therefore valid. The lone exception is the clause which reserves the donor's right to sell the property at any time before his death. Such a reservation has been held to render the donation revocable and, therefore, becomes a donation mortis causa (Puig vs. Penqflorida, 15 SCRA 276, at p. 286). That the right was not exercised is immaterial; its reservation was an implied recognition of the donor's power to nullify the donation anytime he wished to do so. Consequently, it should have been embodied in a last will and testament. The suit for nullity will thus prosper. 04; Donations; donee’s civil personality 1981 No. 2 "D" donated P100,000.00 to the unborn child of his pregnant girlfriend, which she accepted. After six months of pregnancy, the fetus was born and baptized Angel. Angel died twenty (20) hours after birth "D" sought to recover the P100,000. Is "D" entitled to recover? Explain. Answer "D" is entitled to recover the P100,000. The reason is that there is no donee. The supposed donee never acquired any civil personality. Consequently, the donation is void or in-existent. According to the Civil Code, for civil purposes, the fetus is considered born if it is alive at the time it is completely delivered from the mother's womb. However, if the fetus had an intra-uterine life of less than seven months, it is not deemed born if it dies within twenty-four hours after its complete delivery from the maternal womb. The facts show that the fetus in the instant case had an intra-uterine life of less than seven months and that it died twenty hours after birth. Therefore, the provisional or conditional civil personality which is accorded to a conceived child under both the Civil Code and the Child and Youth Welfare Code is not present here. In other words, Angel has not acquired any civil personality. Therefore, the donation by "D" never produced any legal effect. It is in-existent. {Note: The above answer is based on Arts. 40 and 41 of the Civil Code and on Art. 5 of PD 603.) 04; Donations; effect of illegal and immoral conditions 1997 No. 9: (b) Are the effects of illegal and immoral conditions on simple donations the same as those effects that would follow when such conditions are imposed on donations con causa onerosa? Answer: (b) No, they don't have the same effect. Illegal or impossible conditions In simple and remuneratory donations shall be considered as not imposed. Hence the donation is valid. The donation will be considered as simple or pure. The condition or mode is merely an accessory disposition, and its nullity does not affect the donation, unless it clearly appears that the donor would not have made the donation without the mode or condition. Page 161 of 391 Donations con causa onerosa is governed by law on obligations and contracts, under which an impossible or Illicit condition annuls the obligation dependent upon the condition where the condition is positive and suspensive. If the impossible or illicit condition Is negative, it is simply considered as not written, and the obligation is converted into a pure and simple one. However, in order that an illegal condition may annul a contract, the Impossibility must exist at the time of the creation of the obligation; a supervening impossibility does not affect the existence of the obligation. Additional Answer; No. In simple or pure donation, only the illegal or Impossible condition is considered not written but the donation remains valid and becomes free from conditions. The condition or mode being a mere accessory disposition. Its nullity does not affect the donation unless it clearly appears that the donor would not have made the donation without the mode or condition. On the other hand, onerous donation is governed by the rules on contracts. Under Article 1183, Impossible or illegal conditions shall annul the obligation which depends upon them. In these cases. both the obligation and the condition are void. 04; Donations; kinds 1982 No. 9 Classify the following donations, stating your reasons for the classification: (a) "1 hereby donate to 'A' mortis causa a parcel of land (here follows the description) on the condition that this donation shall be deemed revoked if he fails to build a house on the land worth at least P50,000.00 within two (2) years from date hereof." (b) "In consideration of the services rendered to me for which he refused to accept my remuneration, I hereby donate to "A" the following parcel of land (description follows)". (c) "I hereby donate to "A" the following parcels of land (description follows) with the obligation on his part to defray the expenses for my subsistence during my lifetime, and the burial expenses after my death." Answer (a) This donation is a conditional donation inter vivos. It is clear that the donor in the instant case has imposed upon the donee a burden or charge whose value is less than the value of the thing given. According- to the Civil Code, such a donation inter vivos is conditional. True, the donor designated the donation as a donation mortis causa, but this is not controlling. It merely indicates when the delivery to the donee shall be effected. The condition imposed by the donor, on the other hand, indicates that the donation is immediately operative. Hence, it is intervivos in character. The same is also true with the specification that the donation will be deemed revoked if the donee does not comply with the condition. This indicates that the donation is inter vivos in character. (b) This donation is clearly a remuneratory donation inter vivos because it is given by a person to another on account of the services rendered by the latter to the former, provided that they do not constitute a demandable debt. According to the Civil Code, such a donation is a remuneratory donation inter vivos. (c) First Answer: This donation is an onerous donation inter vivos. The obligation of the donee to defray the expenses for the donor is subsistence during his entire lifetime and the burial expenses indicates that such obligation is the consideration for the donation and vice versa. The properties donated are the consideration for the obligation. Page 162 of 391 Second Answer: This donation is a conditional donation inter vivos. It is clear that the obligation imposed upon the donee is merely a charge or burden whose value is less than the value of the thing given. According to the Civil Code, such a donation is a conditional donation inter vivos. (Note: The answer to (a) is based on Art. 726 of the Civil Code and on decision of the Supreme Court such as Laureta vs. Mata, 46 Phil. 668, Concepcion vs. Concepcion, 91 Phil. 823; Cuevas vs, Cuevas, 98 Phil. 68, Zapanta vs. Posadas, 62 Phil. 557, and Puig vs. Penaflorida, 15 SCRA 876. The answer to (b) is based on Art. 726 of the Civil Code. The two answers to (c) are based on Arts. 7S3 and 726 of the Civil Code respectively. The Committee respectfully recommends that both answers should be considered correct.) 04; Donations; mortis causa; formalities 1990 No 3: B donated to M a parcel of land in 1980. B made the deed of donation, entitled “Donation Inter Vivos,” in a public instrument and M accepted the donation in the same document. It was provided in the deed that the land donated shall be immediately delivered to M and that M shall have the right to enjoy the fruits fully. The deed also provided that B was reserving the right to dispose of said land during his (B’s) lifetime, and that M shall not register the deed of donation until after B’s death. Upon B’s death, W, B’s widow and sole heir, filed an action for the recovery of the donated land, contending that the donation made by B is a donation mortis causa and not a donation inter vivos. Will said action prosper? Explain your answer. Answer: Yes, the action will prosper. The donation is a donation mortis causa because the reservation is to dispose of all the property donated and, therefore, the donation is revocable at will. Accordingly, the donation requires the execution of a valid will, either notarial or holographic (Arts 755, 728 NCC). 04; Donations; requisited for perfection 1998 No VIII. On July 27, 1997, Pedro mailed in Manila a letter to his brother, Jose, a resident of Hollo City, offering to donate a vintage sports car which the latter had long been wanting to buy from the former. On August 5, 1997, Jose called Pedro by cellular phone to thank him for his generosity and to inform him that he was sending by mail his letter of acceptance. Pedro never received that letter because it was never mailed. On August 14,1997, Pedro received a telegram from Iloilo informing him that Jose had been killed in a road accident the day before (August 13, 1997) 1. Is there a perfected donation? [2%] 2. Will your answer be the same if Jose did mail his acceptance letter but it was received by Pedro in Manila days after Jose's death? [3%] Answer: 1. None. There is no perfected donation. Under Article 748 of the Civil Code, the donation of a movable may be made orally or in writing. If the value of the personal property donated exceeds five thousand pesos, the donation and the acceptance shall be made in writing. Assuming that the value of the thing donated, a vintage sports car, exceeds P5.OOO.OO, then the donation and the acceptance must be in writing. In this instance, the acceptance of Jose was not in writing, therefore, the donation is void. Upon the other hand, assuming that the sports car Page 163 of 391 costs less than P5.00O.OO. then the donation maybe oral, but still, the simultaneous delivery of the car is needed and there being none, the donation was never perfected. Answer: 2. Yes, the answer is the same. If Jose's mail containing his acceptance of the donation was received by Pedro after the former's death, then the donation is still void because under Article 734 of the Civil Code, the donation is perfected the moment the donor knows of the acceptance by the donee. The death of Jose before Pedro could receive the acceptance Indicates that the donation was never perfected. Under Article 746 acceptance must be made during the lifetime of both the donor and the donee. 04; Donations; requisites b) Anastacia purchased a house and lot on installments at a housing project in Quezon City. Subsequently, she was employed in California and a year later, she executed a deed of donation, duly authenticated by the Philippine Consulate in Los Angeles, California, donating the house and lot to her friend Amanda. The latter brought the deed of donation to the owner of the project and discovered that Anastacia left unpaid installments and real estate taxes. Amanda paid these so that the donation in her favor can be registered in the project owner's office. Two months later, Anastacia died, leaving her mother Rosa as her sole heir. Rosa filed an action to annul the donation on the ground that Amanda did not give her consent in the deed of donation or in a separate public instrument. Amanda replied that the donation was an onerous one because she had to pay unpaid installments and taxes; hence her acceptance may be implied. Who is correct? (2%) SUGGESTED ANSWER: Rosa is correct because the donation is void. The property donated was an immovable. For such donation to be valid, Article 749 of the New Civil Code requires both the donation and the acceptance to be in a public Instrument. There being no showing that Amanda's acceptance was made in a public instrument, the donation is void. The contention that the donation is onerous and, therefore, need not comply with Article 749 for validity is without merit. The donation is not onerous because it did not impose on Amanda the obligation to pay the balance on the purchase price or the arrears in real estate taxes. Amanda took it upon herself to pay those amounts voluntarily. For a donation to be onerous, the burden must be imposed by the donor on the donee. In the problem, there is no such burden imposed by the donor on the donee. The donation not being onerous, it must comply with the formalities of Article 749. ALTERNATIVE ANSWER: Neither Rosa nor Amanda is correct. The donation is onerous only as to the portion of the property corresponding to the value of the installments and taxes paid by Amanda. The portion in excess thereof is not onerous. The onerous portion is governed by the rules on contracts which do not require the acceptance by the donee to be in any form. The onerous part, therefore, is valid. The portion which is not onerous must comply with Article 749 of the New Civil Code which requires the donation and the acceptance thereof to be in a public instrument in order to be valid. The acceptance not being in a public instrument, the part which is not onerous is void and Rosa may recover it from Amanda. 04; Donations; revocation 1991 No 14; Page 164 of 391 Spouses Michael and Linda donated a 3-hectare residential land to the City of Baguio on the condition that the city government would build thereon a public park with a boxing arena, the construction of which shall commence within six (6) months from the date the parties ratify the donation. The donee accepted the donation and the title to the property was transferred in its name. Five years elapsed but the public park with the boxing arena was never started. Considering the failure of the donee to comply with the condition of the donation, the donor-spouses sold the property to Ferdinand who then sued to recover the land from the city government. Will the suit prosper? Answer: Ferdinand has no right to recover the land. It is true that the donation was revocable because of breach of the conditions. But until and unless the donation was revoked, it remained valid. Hence, Spouses Michael and Linda had no right to sell the land to Ferdinand. One cannot give what he does not have. What the donors should have done first was to have the donation annulled or revoked. And after that was done, they could validly have disposed of the land in favor of Ferdinand. Alternative Answer: A. Until the contract of donation has been resolved or rescinded under Article 1191 of the Civil Code or revoked under Art. 764 of the Civil Code, the donation stands effective and valid. Accordingly, the sale made by the donor to Ferdinand cannot be said to have conveyed title to Ferdinand, who, thereby, has no cause of action for recovery of the land acting for and in his behalf. B. The donation is onerous, And being onerous, what applies is the law on contracts, and not the law on donation (De Luna us. Abrigo, 81 SCRA 150). Accordingly, the prescriptive period for the filing of such an action would be the ordinary prescriptive period for contacts which may either be six or ten depending upon whether it is verbal or written. The filing of the case five years later is within the prescriptive period and, therefore, the action can prosper, Alternative Answer; The law on donation lays down a special prescriptive period in the case of breach of condition, which is four years from non-compliance thereof (Article 764 Civil Code). Since the action has prescribed, the suit will not prosper, 04; Donations; valid acceptance 1985 No. 6 As a token of affection and esteem for his friend, B, A donated to him by means of a public document his lot at No. 2 Dart, Paco, Manila. In the same instrument, he also donated to B an apartment of the Towers Condominium, Makati, in consideration of his services as manager of Aps business during his long illness. B accepted the two donations in a separate public instrument executed on the same day A died but sent to him a day later. B thereafter demanded the delivery of the lot and apartment donated to him but A's heirs objected on the ground that the donations were void because the donor did not come to know of the acceptance prior to his death. Discuss the validity of the questioned donations. Answer: 1. The donation of the lot is out of pure liberality and therefore governed by the provisions of donation wherein it is required that the donor must be notified of the acceptance during his lifetime. There is, here, no valid acceptance, hence the donation of the lot is not valid. Page 165 of 391 The donation of the apartment to B is an onerous or remuneratory donation governed by general provisions On contract. There is no need of knowledge of the acceptance by the other party because the services have already been, rendered. The donation of the apartment being in consideration of services is an onerous donation governed by the rules on Contracts which requires knowledge of the acceptance. 2. The donation of the lot is not valid because it was not properly accepted since the donor died before knowing of the acceptance. 3. The donation of the lot (Art. 726) cannot be said to have been validly perfected. The donation is perfected from the moment the donor knows of the acceptance (Art. 734) which the law requires must be made during the lifetime of the donor and of the donee (Art. 746). Since the donor never came to know of the acceptance, the contention of the heirs of A that the donation did not become operative is well-taken. The same is true as regards the apartment unit 4. The donation of the lot (Art. 726) cannot be said to have validly perfected. The donation is perfected from the moment the donor knows of the acceptance (Art. 734) which the law requires must be made during the lifetime of the donor and of the donee (Art. 746). Since the donor never came to know of the acceptance, the contention of the heirs of A that the donation did not become operative is well-taken. As regards the apartment unit, the "donation" therefore may be interpreted as dacion en pago (Art. 1245) on the assumption that the services rendered to the "donor" constituted a demandable debt (Art. 726). Hence, the donation is valid. 5. Considering the management of A's business during his long illness, the donations are in contemplation of death, and therefore void. Page 166 of 391 04; Intellectual creation 2004 No. III B. Dr. ALX is a scientist honored for work related to the human genome project. Among his pioneering efforts concern stem cell research for the cure of Alzheimer’s disease. Under corporate sponsorship, he helped develop a microbe that ate and digested oil spills in the sea. Now he leads a college team for cancer research in MSS State. The team has experimented on a mouse whose body cells replicate and bear cancerous tumor. Called “oncomouse”, it is a life-form useful for medical research and it is a novel creation. Its body cells do not naturally occur in nature but are the product of man’s intellect, industry and ingenuity. However, there is a doubt whether local property laws and ethics would allow rights of exclusive ownership on any life-form. Dr. ALX needs your advice: (1) whether the reciprocity principle in private international law could be applied in our jurisdiction; and (2) whether there are legal and ethical reasons that could frustrate his claim of exclusive ownership over the life-form called “oncomouse” in Manila? What will be your advice to him? (5%) 05; “Law” as a mode of acquiring ownership 1988 No. 4: (a) What is meant by "law" as a mode of acquiring ownership? What are the different instances under the Civil Code whereby there is an acquisition of ownership by operation of law? State at least three. Answer: (A) When the Civil Code speaks of law as a distinct mode of acquiring ownership, it refers to those instances where the law, independently of the other modes of acquiring ownership, automatically and directly vests the ownership of the thing in a certain individual once the prescribed requisites or conditions are present or complied with. Examples of this are: (1) Land which belongs exclusively to either of the spouses where a building is constructed with conjugal funds. Here, the ownership of the land is vested automatically in the conjugal partnership once the condition that its value has been reimbursed to the owner has been complied with (Art. 158, par. 2, CC.) (2) Hidden treasure which a stranger discovers by chance on another's property. Here, one-half of the treasure belongs by right of occupation to the stranger, while the other half belongs by operation of law to the proprietor. (Art. 438, par. 2, CC.) (3) Abandoned beds, when a river or stream suddenly changes its course to traverse private lands. The former owners of the new bed shall be the owners of the abandoned bed in proportion to the area lost by each. (Art. 58, P.D. No. 1067.) (4) Fruits naturally falling from a tree upon adjacent land. Here, the ownership of the fruits is vested automatically in the owner of the adjacent land. (Art. 681, CC.) Committee's Recommendations Re: No. 4 (a) (a) It is recommended that the following be likewise considered as instances whereby there is acquisition of ownership by operation of law: (1) The acquisition of property in co-ownership under a marriage governed by the absolute community regime. (2) Estoppel under article 1434 of the Civil Code which provides that: Page 167 of 391 "When a person who is not the owner of a thing sells or alienates and delivers it, and later the seller or grantor acquires title thereto, such title passes by operation of law to the buyer or grantee".; and (3) Registration of land under Act 496 where the applicant is not the real owner. 05; Modes of acquiring ownership 1977 No. VI-a What are the modes of acquiring ownership and other real rights under the New Civil Code of the Philippines? Answer Under our Civil Code, the modes of acquiring ownership and other real rights are the following: (1) Occupation; (2) Intellectual creation; (3) Prescription; (4) Law; (5) Donation; (6) Testate and intestate succession; and (7) In consequence of certain contracts, tradition. (Art. 712, Civil Code). Page 168 of 391 05; Property; accession 1977 No. III-c Distinguish the following concepts: Accession, accretion, alluvion, avulsion. Answer Accession is the right pertaining to the owner of a thing over everything which is produced thereby, or which is incorporated or attached thereto, either naturally or artificially (Art. 440, Civil Code). As applied to accession continua with respect to immovable property {accession natural), accretion refers to that which is added or attached to the principal thing due to natural causes. Alluvion refers to the accretion which land adjoining the banks of rivers, lakes, creeks or torrents gradually receive from the effects of the current of the water (Art. 467, Civil Code). Avulsion refers to the accretion which takes place whenever the current of a river, lake, creek or torrent segregates from an estate on its bank a known portion of land and transfers it to another estate (Art. 459, Civil Code), 05; Property; accession 1981 No. 18 (d) True or false? -- To the owners of lands adjoining the sea belong the accretion which they gradually receive from effects of the current on the waters. Answer (d) False. The principle of alluvium cannot be applied to accretions due to the action of the current of the sea. It can be applied only to accretions due to the action of the current of a river, lake, creeks or torrent. (Art. 457, Civil Code) 05; Property; accession; accretion 1989 No. 6: (2) Spouses "A" and "B" are registered owners of lot "1" consisting of 20,000 square meters while spouses "C" and "D" are owners of lot "2". These lots arc separated by a river. For a period of more than 40 years, the river overflowed its banks yearly and the property of the spouses "C" and "D* gradually received deposits of soil from the effects of the current of the river so that an alluvial deposit of 29,000 square meters was added to their lot, 11,000 square meters of which used to be part of lot "1." Spouses "A" and "B" contend that accretion should not extend to registered land because to allow the spouses "C" and "D" to acquire title over the accretion will be in derogation of the indefeasibility of the Torrens Title of spouses "A" and "B". Is this contention correct? Explain. Answer: No, the contention of A and B is not correct because the registration under the Torrens Law does not protect the owner against the diminution of his land through gradual changes due to the effects of the current of the river. The accretion will benefit C and D. 05; Property; accession; accretion 1979 No. VI In 1951, PE occupied the bank of the river in San Mateo which wag called Libis. By force of the current of the river, silt was deposited on this river bank so that it gradually became wider and wider until it measured about 2 hectares. In 1976, VA, Page 169 of 391 the registered owner of the land adjoining the old river bank, demanded that PE vacate the land but the latter refused claiming he had acquired the alluvial deposits by prescription. VA then filed an action to quiet the title and recover possession. Will the action prosper? Why? Answer The action will prosper. According to the Civil Code, 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. The silt or alluvial deposit occupied by defendant PE, therefore, belongs to VA, the riparian owner. However, since the latter never sought registration of the accretion in accordance with the Land Registration Law, said accretion never became registered property. It was therefore possible for PE to become absolute owner thereof by extraordinary acquisitive prescription. Since obviously, he was in bad faith, thirty years of continuous, public and peaceful possession in concept of owner would be necessary in order that he shall become the absolute owner of the accretion by prescription. He took possession of the property in 1951; the action of VA against him was filed in 1976, That means that he has been in continuous possession for only twenty five years. The defense of acquisitive prescription, therefore, is untenable. (See Grande vs. CA L-17652, June 30,1962). 05; Property; accession; avulsion 1985 No. 7 After one week of torrential rains, a portion of A's plantation, with an area of one (1) hectare and planted to 100 coconut trees, was eroded, while to B's farm, on the other bank of the same river, a tract of land, also one (1) hectare in area, on which stood 50 coconut trees, was added. An equal number of trees, their roots exposed, were found lying on the ground in B's property. Seven months later, A, alleging that the one-hectare lot and 100 coconut trees were his, demanded their return but B, who had previously token possession of them, refused, claiming that the land was formed by alluvion and, therefore, belongs to him and that A has lost his right to the coconut trees because he did not lay claim to them in due time. A thereupon sued B for the recovery of the land and the coconuts. Will the action prosper? State the legal basis of your answer. Answers: 1. The one hectare land and the fifty coconut trees still standing thereon, if identifiable as the same property detached from A's plantation can be recovered by A since the two-year period of prescription of the action has not yet lapsed. The 50 uprooted coconut trees and the coconuts can no longer be claimed by A since the claim has already prescribed, such claim having been made beyond the period of six months. 2. A can recover the land and the standing coconut trees provided he prove three things: a. a known portion of land b. (that it was detached by the current of the river c. that he recover the land within 2 years, This is a case of avulsion and not alluvion. 3. There is no alluvion because the addition to B's land was not gradual and imperceptible. There is no avulsion because the detachment of the land was not due to the action of the current of the river but due to torrential rains. Page 170 of 391 However, A may recover land and standing trees if he can identify the same due to the principle of unjust enrichment because he was damaged and B was enriched without just cause due to fortuitous event. As regards to uprooted trees, A's action is lost because he did not claim them within 6 months. 4. The provisions on avulsion, rather than alluvion apply. Accordingly, the action for the recovery of the land will still prosper. The law allows the owner of the segregated land to remove the same within two years from the time avulsion takes place (Art. 459). A, however, had lost his right to recover the coconut trees which can only be claimed within six months (Art. 460). 05; Property; accession; commixtion 1986 No. 7: Mr. Magabun and Mr. Ortelano each delivered 1,000 kilos of palay to Mr. Kono for milling. Magabun's rice was Milagrosa quality and was worth three times more per kilo than the rice of Ortelano. Before Mr, Kono could mill the rice, an accidental fire broke out in the mill. Kono was able to save one half of the rice of both Magabun and Ortelano but in the confusion, the rice ended up mixed and commingled. What are the respective rights of Magabun and Ortelano over the mixture? Explain. Answer: Magabun, owner of the Milagrosa rice, shall own 3/4 interest of the mixture, while Ortelano, the owner of the regular rice shall own 1/4 interest in the mixture. This is because the Milagrosa rice was worth three times more than the ordinary rice. Answer - This is a case of commixtion under C.C, Both Magabun and Ortelano will be owners of the rice saved, in the proportion of 3:1. Answer - Magabun and Ortelano shall each acquire a right proportional to the part belonging to him, bearing in mind the value of the things mixed. We have here a perfect example of what the law calls commixtion effected by chance. That means that each shall be considered as having acted in good faith. Since the rice belonging to Magabun is worth three times more- per kilo than the rice belonging to Ortelano, therefore, the mixture will be divided between the two in the proportion of three is to one. Magabun shall be entitled to three-fourths (3/4) of the mixture, while Ortelano shall be entitled to one-fourth (1/4). (Note - The above answer is based upon Art. 472 of the Civil Code.) 05; Property; accession; rivers 1977 No. IV-b A's land is bounded on the South by the sea and on the East by a river. Both sides have grown by accretion. What should A do to obtain a certificate of title to the enlarged areas? Answer A cannot do anything with respect to the accretion on the south by the sea. He has no right over it. Such accretion is property of public dominion (Art. 420, Civil Code). As such, it is outside the commerce of man. Therefore, it cannot be appropriated; neither can it be acquired by prescription. (Ignacio vs. Dir. of Lands, 108 Phil. 335.) However, as far as the accretion on the east by the river is concerned, assuming that all of the requisites of alluvion under the Civil Code (Art. 457) are present, A is now ipso jure the owner of such accretion. In order that he can acquire Page 171 of 391 a certificate of title (or an amendment thereof), he should now comply with all of the different steps dictated by the Land Registration Law (Act No. 496) in order that there will be a judicial confirmation of his title over the accretion. 05; Property; accretion 2003 No IX. Andres is a riparian owner of a parcel of registered land. His land, however, has gradually diminished in area due to the current of the river, while the registered land of Mario on the opposite bank has gradually increased in area by 200-square meters. (a) Who has the better right over the 200-square meter area that has been added to Mario’s registered land, Mario or Andres? (b) May a third person acquire said 200-square meter land by prescription? SUGGESTED ANSWER: a. Mario has a better right over the 200 square meters increase in area by reason of accretion, applying Article 457 of the New Civil Code, which provides that “to the owners of lands adjoining the banks of rivers belong the accretion which they gradually received from the effects of the current of the waters”. Andres cannot claim that the increase in Mario’s land is his own, because such is an accretion and not result of the sudden detachment of a known portion of his land and its attachment to Mario’s land, a process called “avulsion”. He can no longer claim ownership of the portion of his registered land which was gradually and naturally eroded due to the current of the river, because he had lost it by operation of law. That portion of the land has become part of the public domain. b. Yes, a third party may acquire by prescription the 200 square meters, increase in area, because it is not included in the Torrens Title of the riparian owner. Hence, this does not involve the Imprescriptibility conferred by Section 47, P.D. No. 1529. The fact that the riparian land is registered does not automatically make the accretion thereto a registered land. (Grande v. CA, 115 521 (1962); Jagualing v. CA, 194 SCRA 607 (1991). 05; Property; accretion; alluvion 2001 No IV For many years, the Rio Grande river deposited soil along its bank, beside the titled land of Jose. In time, such deposit reached an area of one thousand square meters. With the permission of Jose, Vicente cultivated the said area. Ten years later, a big flood occurred In the river and transferred the 1000 square meters to the opposite bank, beside the land of Agustin. The land transferred is now contested by Jose and Agustin as riparian owners and by Vicente who claims ownership by prescription. Who should prevail,? Why? (5%) SUGGESTED ANSWER Jose should prevail. The disputed area, which is an alluvion, belongs by right of accretion to Jose, the riparian owner (Art. 457 CC). When, as given in the problem, the very same area" was "transferred" by flood waters to the opposite bank, it became an avulsion and ownership thereof is retained by Jose who has two years to remove it (Art. 459, CC). Vicente's claim based on prescription is baseless since his possession was by mere tolerance of Jose and, therefore, did not adversely affect Jose's possession and ownership (Art. 537, CC). Inasmuch as his possession is merely that of a holder, he cannot acquire the disputed area by prescription. Page 172 of 391 05; Property; chattel mortgage over immovables 1994 No. 15: Vini constructed a building on a parcel of land he leased from Andrea. He chattel mortgaged the land to Felicia. When he could not pay Felicia. Felicia initiated foreclosure proceedings. Vini claimed that the building he had constructed on the leased land cannot be validly foreclosed because the building was, by law, an immovable. Is Vini correct? Alternative Answers': a) The Chattel Mortgage is void and cannot be foreclosed because the building is an immovable and cannot be an object of a chattel mortgage. b) It depends. If the building was intended and is built of light materials, the chattel mortgage may be considered as valid as between the parties and it may be considered in respect to them as movable property, since it can be removed from one place to another. But if the building is of strong material and is not capable of being removed or transferred without being destroyed, the chattel mortgage is void and cannot be foreclosed. c) If it was the land which Vini chattel mortgaged, such mortgage would be void, or at least unenforceable, since he was not the owner of the land. If what was mortgaged as a chattel is the building, the chattel mortgage is valid as between the parties only, on grounds of estoppel which would preclude the mortgagor from assailing the contract on the ground that its subject-matter Is an immovable. Therefore Vini's defense is untenable, and Felicia can foreclose the mortgage over the building, observing, however, the procedure prescribed for the execution of sale of a judgment debtor's immovable under Rule 39, Rules of Court, specifically, that the notice of auction sale should be published in a newspaper of general circulation. d) The problem that Vini mortgaged the land by way of a chattel mortgage is untenable. Land can only be the subject matter of a real estate mortgage and only an absolute owner of real property may mortgage a parcel of land. (Article 2085 (2) Civil Code). Hence, there can be no foreclosure. But on the assumption that what was mortgaged by way of chattel mortgage was the building on leased land, then the parties are treating the building as chattel. A building that uis not merely superimposed on the ground is an immovable property and a chattel mortgage on said building is legally void but the parties cannot be allowed to disavow their contract on account of estoppel by deed. However, if third parties are involved such chattel mortgage Is void and has no effect. 05; Property; co-ownership 2000 No XVII. In 1955, Ramon and his sister Rosario inherited a parcel of land in Albay from their parents. Since Rosario was gainfully employed in Manila, she left Ramon alone to possess and cultivate the land. However, Ramon never shared the harvest with Rosario and was even able to sell one-half of the land in 1985 by claiming to be the sole heir of his parents. Having reached retirement age in 1990 Rosario returned to the province and upon learning what had transpired, demanded that the remaining half of the land be given to her as her share. Ramon opposed, asserting that he has already acquired ownership of the land by prescription, and that Rosario is barred by laches from demanding partition and reconveyance. Decide the conflicting claims. (5%) SUGGESTED ANSWER: Page 173 of 391 Ramon is wrong on both counts: prescription and laches. His possession as co-owner did not give rise to acquisitive prescription. Possession by a co-owner is deemed not adverse to the other co-owners but is, on the contrary, deemed beneficial to them (Pongon v. GA, 166 SCRA 375). Ramon's possession will become adverse only when he has repudiated the co-ownership and such repudiation was made known to Rosario. Assuming that the sale in 1985 where Ramon claimed he was the sole heir of his parents amounted to a repudiation of the co-ownership, the prescriptive period began to run only from that time. Not more than 30 years having lapsed since then, the claim of Rosario has not as yet prescribed. The claim of laches is not also meritorious. Until the repudiation of the co-ownership was made known to the other co-owners, no right has been violated for the said co-owners to vindicate. Mere delay in vindicating the right, standing alone, does not constitute laches. ALTERNATIVE ANSWER: Ramon has acquired the land by acquisitive prescription, and because of laches on the part of Rosario. Ramon's possession of the land was adverse because he asserted sole ownership thereof and never shared the harvest therefrom. His adverse possession having been continuous and uninterrupted for more than 30 years, Ramon has acquired the land by prescription. Rosario is also guilty of laches not having asserted her right to the harvest for more than 40 years. 05; Property; co-ownership 2002 No IV. Antonio, Bart, and Carlos are brothers. They purchased from their parents specific portions of a parcel of land as evidenced by three separates deeds of sale, each deed referring to a particular lot in meter and bounds. When the deeds were presented for registration, the Register of Deeds could not issue separate certificates of Title had to be issued, therefore, in the names of three brothers as coowners of the entire property. The situation has not changed up to now, but each of the brothers has been receiving rentals exclusively from the lot actually purchased by him. Antonio sells his lot to a third person, with notice to his brothers. To enable the buyer to secure a new title in his name, The deed of sale was made to refer to undivided interest in the property of the seller (Antonio), with the metes and bounds of the lot sold being stated. Bart and Carlos reacted by signifying their exercise of their right of redemption as co owners. Antonio in his behalf and in behalf of his buyer, contends that they are no longer co-owners, although the title covering the property has remained in their names as such. May Bart and Carlos still redeem the lot sold by Antonio? Explain. (5%) SUGGESTED ANSWER: No, they may not redeem because there was no Co-ownership among Antonio, Bart, and Carlos to start with. Their parents already partitioned the land in selling separate portions to them. The situation is the same as in the case Si v. Court of Appeals, (342 SCRA 653 [2000]). 05; Property; co-ownership 1986 No. 6: Magaling, Malugod and Masanting are co-owners in equal shares, pro indiviso, of a 9,000 square meter residential lot in Quezon City. Magaling needs money badly and sold a specified 3,000 square meter portion of the lot, describing in the deed the metes and bounds of the part sold. When the buyer demanded the portion sold to him, Malugod and Masanting argued that under no circumstances Page 174 of 391 whatsoever may any part of the lot be sold without the consent of the two other coowners. Is their contention correct? Explain. Answer: A co-owner can always sell his share in the co-ownership without the consent of the other co-owners. However, the sale is limited to the ideal share or pro-indiviso share of the vendor, subject to partition later on. The sale of Magaling would, therefore, only pertain to 1/3 share of the property and the buyer cannot demand a specific portion of the lot. Answer - Under Art. 493, a co-owner may sell his undivided interest in the thing owned in common, without the consent of her co-owners. However, what was sold here was a determinate portion of the land, which cannot be sold by a co-owner until the property is partitioned. Answer - I would like to qualify my answer. If by "part of the lot," Malugod and Masanting refer to a specific portion of the property owned in common, then they are correct. The buyer cannot now demand for the delivery of the property sold by Magaling to him. However, if by, "part of the lot", Malugod and Masanting refer to the undivided or pro indiviso share of Magaling, then they are not correct. Under the law, each co-owner may alienate his "part," but the effect 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. (Note - The above answer is based upon Art. 493 of the Civil Code. We recommend that an answer declaring that Malugod and Masanting are correct using Art. 493 as reason should also be considered correct.) Answer - The sale is valid (Clarin vs. Rulona 127 SCRA 512). The Supreme Court has ruled that sale of a definite portion is valid (Per J. Gutierrez). 05; Property; co-ownership 1992 No 6; A, B and C are the co-owners in equal shares of a residential house and lot. During their co-ownership, the following acts were respectively done by the coowners: 1. A undertook the repair of the foundation of the house, then tilting to one side, to prevent the house from collapsing. 2. B and C mortgaged the house and lot to secure a loan. 3. B engaged a contractor to build a concrete fence all around the lot. 4. C built a beautiful grotto In the garden. 5. A and C sold the land to X for a very good price. a) Is A's sole decision to repair the foundation of the house binding on B and C? May A require B and C to contribute their 2/3 share of the expense? Reasons. b) What is the legal effect of the mortgage contract executed by B and C? Reasons. c) Is B's sole decision to build the fence binding upon A and C? May B require A and C to contribute their 2/ 3 share of the expense? Reasons. d) Is C's sole decision to build the grotto binding upon A and B? May C require A and B to contribute their 2/ 3 share of the expense? Reasons. Page 175 of 391 e) What are the legal effects of the contract of sale executed by A. C and X? Reasons. Answer: (a) Yes. A's sole decision to repair the foundation is binding upon B and C. B and C must contribute 2/3 of the expense. Each co-owner has the right to compel the other co-owners to contribute to the expense of preservation of the thing (the house) owned in common in proportion to their respective interests (Arts. 485 and 488, Civil Code). (b) The mortgage shall not bind the 1/3 right and Interest of A and shall be deemed to cover only the rights and Interests of B and C in the house and lot. The mortgage shall be limited to the portion (2/3) which may be allotted to B and C in the partition (Art. 493, Civil Code). (c) B's sole decision to build the concrete fence is not binding upon A and C. Expenses to improve the thing owned in common must be decided upon by a majority of the co-owners who represent the controlling interest (Arts. 489 and 492. Civil Code). (d) C's sole decision to build the grotto is not binding upon A and B who cannot be required to contribute to the expenses for the embellishment of the thing owned in common if not decided upon by the majority of the co-owners who represent the controlling interest (Arts. 489 and 492, Civil Code). (e) The sale to X shall not bind the 1 /3 share of B and shall be deemed to cover only the 2/3 share of A and C in the land (Art. 493, Civil Code). B shall have the right to redeem the 2/3 share sold to X by A and C since X is a third person (Art. 1620, Civil Code). 05; Property; co-ownership 1975 No. X A lot containing an area of 1,561 square meters located in Plaza Sta. Cruz and Escolta in Manila is owned in common by six (6) persons. One of the co-owners asked for a physical segregation of his one-sixth (1/6) share. The five (5) co-owners objected on the ground that the lot being commercial, its value would be greatly impaired should there be a physical partition. Decide. Answer The co-owner who asked for a partition is entitled to the segregation of his share. The general rule enunciated in Article 494 of the Civil Code is applicable, namely that each co-owner may demand at any time the partition of the thing owned in common, insofar as his share is concerned. The objection of the five other co-owners is obviously based on Article 495 which provides that notwithstanding the provisions of Article 494, the co-owners can not 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. Article 495, however, can not apply to this case for if the one-sixth share of the co-owner is segregated, there will still remain over 1,300 square meters for the remaining five co-owners and a real estate of this size in the heart of Manila is not inconsequential. (Ramirez v. Ramirez, 20 SCRA 384) 05; Property; co-ownership 1981 No. 5 In a partition between brothers of inherited property, brother "A" got the property north of the river. Brother "B" received the property south of the river. Without the knowledge of the brothers, squatters had moved into the property north of the river allotted to "A". "A" also learned that "B" was about to sell his property. Page 176 of 391 a) "A" wanted "B" to join him in the ejectment case against the squatters and share in litigation expenses. "B" refused. Was "B's" refusal valid? Why? b) Could "A" prevent the sale by "B" of his portion of the property? Reasons. Answer (a) "B's" refusal is valid. The reason is obvious. There was already a partition. In the partition, brother "A" was awarded the property north of the river, while brother "B" was awarded the property south of the river. Consequently, the tie of coownership or indivision was dissolved completely- Thus, the problem of squatters in the portion allotted to "A" has become his exclusive problem. (Note: The above answer is based on general principles of co-ownership and partition. The Committee, however, respectfully recommends that if the bar candidate invokes Art. 501 of the Civil Code or the principle of warranty among partitioners, it should be properly credited. |. (b) " A'' cannot prevent the sale of "B'' of the portion allotted to him. That would constitute a violation of the jus disponendi or right of disposition of "B". As a matter of fact, "A" cannot even avail of the right of legal redemption of adjacent owners. Such right is not available because the two lands are separated by a river. (Note: The above answer is based on the general principles of ownership {Art. 428, Civil Code) and on Art. 1621, Civil Code.) 05; Property; co-ownership 1983 No. 6 Three of four brothers, the sole heirs of their deceased parents, agreed to convert a ricefield in the estate into a subdivision and spend the money, also left by their parents, for developing the subdivision. The fourth son disagreed and brought a suit to enjoin his brothers from proceeding with the subdivision and spending the money they inherited for its development. Will the action prosper? Why? Answer It will, in so far as it seeks to stop the conversion of the ricefield into a subdivision, for this is an alteration which requires the consent of all the co-owners. But if the refusal of the plaintiff is clearly prejudicial to the common interest, the alteration may be allowed. It will also prosper in so far as it prays that the money of the estate be not diverted to the development of the subdivision. The expenditure is not a mere act of administration but of dominion which requires the consent of all. With respect to the lease, the action will succeed if It created a real right; otherwise, it will fail. 05; Property; co-ownership vs partnership 1988 No. 2: (a) Distinguish co-ownership from partnership. (b) Is the lease of the entire community property in co-ownership an act of administration or an act of ownership or alteration? Explain, in relation to the need of consent of the co-owners. Answer: (a) Co-ownership is distinguished from an ordinary partnership in the following ways: Page 177 of 391 (1) As to creation; Whereas co-ownership may be created by law, contract, succession, fortuitous event or occupancy, partnership is always created by contract. (2) As to purpose: Whereas the purpose of co-ownership is the common enjoyment of the thing or right owned in common, the purpose of a partnership is to obtain profits (3) As to personality; Whereas a co-ownership has no juridical personality which is separate and distinct from that of the owners, a partnership has. (4) As to duration: Whereas an agreement not to divide the community property for more than ten years is not allowed by law, such an agreement would be perfectly valid in the case of partnerships. This is so, because under the law, there is no limitation upon the duration of partnerships, (5) As to power of members; Whereas a co-owner has no power to represent the co-ownership, unless there is an agreement to that effect, a partner has the power to represent the partnership, unless there is a stipulation to the contrary. (6) As to effect of disposition of shares; If a co-owner transfers his share to a third person, the latter becomes automatically a co-owner, but if a partner transfers his share to a third person, the latter does not become a partner, unless agreed upon by all of the partners. (7) As to division of profits: Whereas in co-ownership the division of the benefits and charges is fixed by law, in a partnership the division of profits and losses may be subject to the agreement of the partners. (8) As to effect of death: Whereas the death of a co-owner has no effect upon the existence of the co-ownership, the death of a partner shall result in the dissolution of the partnership. (b) Lease of personal property is a mere act of administration, and, therefore, requires the resolution of the majority of the co-owners. However, Lease of real property may be an act of administration or an act of alteration depending upon the circumstances of each particular case. (1) If the lease is recorded in the Registry of Property, whatever may be the duration thereof, it is an act of ownership, and therefore, requires the unanimous consent of all the co-owners, since under the law, a special power of attorney is required (See Art. 1647, CC). (2) If the lease is not recorded in the Registry of Property, but the duration thereof is more than one year, it is also an act of ownership, and therefore, requires the unanimous consent of all the co-owners, since, again, under the law, a special power of attorney is required (See Art. 1878 No. 8, CC). (3) If the lease, however, is not recorded in the Registry of Property and the duration thereof is only one year or less, it is an act of administration, and therefore, merely requires the resolution of the majority of the co-owners. Committee's Recommendation Re: No, 2 (a): (a) It is recommended that a mention of three distinctions should merit a full credit for this question. 05; Property; co-ownership; acts of administration 1984 No. 6 Brothers A, B and C are co-owners of a two-story building which they inherited from their deceased parents A, the eldest, requested B and C to contribute for the repair of the roof which was already leaking and for the renovation of the first floor of the building so that the same could be rented out. B and C refused. Page 178 of 391 Nevertheless, A had the repair and renovation dams at his own expenses. Consequently, the brothers were able to lease out the first floor and generate rental in-come. What are the right of A, B and C with respect to the expenditures made by A and the subsequent rental income? Explain. Answer: A. Furnished by Office of Justice Palma The repairs of the building are a necessary expenses for its preservation. Hence, A can proceed to incur the expenses for such repairs even without the consent of the co-owners (Art. 489). He can recover the proportionate share of the others in these expenses. Since B and C, who constitute the majority in interest in the co-ownership, refused to have the renovation of the ground floor made, A, had no authority to undertake the renovation (Art. 492). Since be proceeded to do so anyway, he must bear the costs thereof without right to reimbursement. The co-owners would be entitled to the rentals in proportion to their interest in the co-ownership. B. Comments and Suggested Answer: We agree with the answer of the Bar Examiner. 05; Property; co-ownership; prescription 2002 No V. Senen and Peter are brothers. Senen migrated to Canada early while still a teenager. Peter stayed in Bulacan to take care of their widowed mother and continued to work on the Family farm even after her death. Returning to the country some thirty years after he had left, Senen seeks a partition of the farm to get his share as the only co-heir of Peter. Peter interposes his opposition, contending that acquisitive prescription has already set in and that estoppel lies to bar the action for partition, citing his continuous possession of the property for at least 10 years, for almost 30 years in fact. It is undisputed that Peter has never openly claimed sole ownership of the property. If he ever had the intention to do so , Senen was completely ignorant of it. Will Senen’s action prosper? Explain. (5%). SUGGESTED ANSWER: Senen’s action will prosper. Article 494 of the New Civil Code provides that “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 nor notified Senen of his having repudiated the same. ALTERNATIVE ANSWER: Senen’s action will prosper. This is a case of implied trust. (Art 1441, NCC) For purposes of prescription under the concept of an owner (Art. 540, NCC). There is no such concept here. Peter was a co-owner, he never claimed sole ownership of the property. He is therefore estopped under Art. 1431, NCC. 05; Property; co-ownership; redemption 2000 No X a) Ambrosio died, leaving his three daughters, Belen, Rosario and Sylvia a hacienda which was mortgaged to the Philippine National Bank. Due to the failure of the daughters to pay the bank, the latter foreclosed the mortgage and the hacienda was sold to it as the highest bidder. Six months later, Sylvia won the grand prize at the lotto and used part of it to redeem the hacienda from the bank. Thereafter, she took possession of the hacienda and refused to share its fruits with her sisters, Page 179 of 391 contending that it was owned exclusively by her, having bought it from the bank with her own money. Is she correct or not? (3%) SUGGESTED ANSWER! Sylvia is not correct. The 3 daughters are the co-owners of the hacienda being the only heirs of Ambrosio. When the property was foreclosed, the right of redemption belongs also to the 3 daughters. When Sylvia redeemed the entire property before the lapse of the redemption period, she also exercised the right of redemption of her co-owners on their behalf. As such she is holding the shares of her two sisters in the property, and all the fruits corresponding thereto, in trust for them. Redemption by one co-owner inures to the benefit of all (Adille v. CA.157 SCRA 455). Sylvia, however, is entitled to be reimbursed the shares of her two sisters in the redemption price. 05; Property; co-ownership; redemption by co-owners 1993 No. 4; In 1937, A obtained a loan of P20,000.00 from the National City Bank of New York, an American-owned bank doing business in the Philippines. To guarantee payment of his obligation, A constituted a real estate mortgage on his 30-hectare parcel of agricultural land. In 1939, before he could pay his obligation. A died intestate leaving three children. B, a son by a first marriage, and C and D, daughters by a second marriage. In 1940. the bank foreclosed the mortgage for non-payment of the principal obligation. As the only bidder at the extrajudicial foreclosure sale, the bank bought the property and was later issued a certificate of sale. The war supervened in 1941 without the bank having been able to obtain actual possession of the property which remained with A's three children who appropriated for themselves the income from it. In 1948, B bought the property from the bank using the money he received as back pay from the U. S. Government, and utilized the same in agribusiness. In 1960, as B's business flourished, C and D sued B for partition and accounting of the income of the property, claiming that as heirs of their father they were co-owners thereof and offering to reimburse B for whatever he had paid in purchasing the property from the bank. In brief, how will you answer the complaint of C and D, if you were engaged by D as his counsel? Answer; As counsel of B, I shall answer the complaint as follows: When B bought the property, it was not by a right of redemption since the period therefore had already expired. Hence, B bought the property in an independent unconditional sale. C and D are not co-owners with B of the property. Therefore, the suit of C and D cannot prosper. Alternative Answer: As counsel of B, I shall answer the complaint as follows: From the facts described, it would appear that the Certificate of sale has not been registered. The one-year period of redemption begins to run from registration. In this case, it has not yet even commenced. Under the Rules of Court, the property may be released by the Judgment debtor or his successor in interest. (Sec. 29, Rule 27). It has been held that this includes a joint owner. (Ref. Magno vs.Ciola, 61 Phil. 80). 05; Property; easement vs usufruct 1995 No. 1; 1. What is easement? Distinguish easement from usufruct. Page 180 of 391 2. Can there be (a) an easement over a usufruct? (b) a usufruct over an easement? (c) an easement over another easement? Explain. Answer; 1. An easement or servitude is an encumbrance imposed upon an immovable for the benefit of another Immovable belonging to a different owner. (Art. 613, NCC) Usufruct gives a right to enjoy the property of another with the obligation of preserving its form and substance, unless the title constituting it or the law otherwise provides. (Art. 562, NCC). An easement or servitude is an encumbrance imposed upon an immovable for the benefit of another immovable belonging to a different owner (Art. 613, NCC). Alternative Answer; Easement is an encumbrance imposed upon an immovable for the benefit of another immovable belonging to a different owner in which case it is called real or predial easement, or for the benefit of a community or group of persons in which case it is known as a personal easement. The distinctions between usufruct and easement are: a. Usufruct includes all uses of the property and for all purposes, including jus fruendi. Easement is limited to a specific use. b. Usufruct may be constituted on immovable or movable property. Easement may be constituted only on an immovable property. c. Easement is not extinguished by the death of the owner of the dominant estate while usufruct is extinguished by the death of the usufructuary unless a contrary intention appears. d. An easement contemplates two (2) estates belonging to two (2) different owners; a usufruct contemplates only one property (real or personal) whereby the usufructuary uses and enjoys the property as well as its fruits, while another owns the naked title during the period of the usufruct. e. A usufruct may be alienated separately from the property to which it attaches, while an easement cannot be alienated separately from the property to which it attaches. NOTE: It is recommended by the Committee that any two (2) distinctions should be given full credit. Answer: 2. (a) There can be no easement over a usufruct. Since an easement may be constituted only on a corporeal immovable property, no easement may be constituted on a usufruct which is not a corporeal right (b) There can be no usufruct over an easement. While a usufruct maybe created over a right, such right must have an existence of its own independent of the property. A servitude cannot be the object of a usufruct because It has no existence independent of the property to which It attaches. Alternative Answers: There cannot be a usufruct over an easement since an easement presupposes two (2) tenements belonging to different persons and the right attaches to the tenement and not to the owner. While a usufruct gives the usufructuary a right to use, right to enjoy, right to the fruits, and right to possess, an easement gives only a limited use of the servient estate. Page 181 of 391 However, a usufruct can be constituted over a property that has in its favor an easement or one burdened with a servitude. The usufructuary will exercise the easement during the period of usufruct. (c) There can be no easement over another easement for the same reason as in (a). An easement, although it is a real right over an immovable, is not a corporeal right. There is a Roman maxim which says that: There can be no servitude over another servitude. 05; Property; easements; basic 1998 No XVI. Distinguish between: 1. Continuous and discontinuous easements; |2%] 2. Apparent and non-apparent easements; and [2%] 3. Positive and negative easements. [1%] Answer: 1. Continuous easements are those the use of which is or may be incessant, without the intervention of any act of man, while discontinuous easements are those which are used at intervals and depend upon the acts of man. (Art. 615, Civil Code) Answer: 2. Apparent easements are those which are made known and are continually kept in view by external signs that reveal the use and enjoyment of the same, while non-apparent easements are those which show no external indication of their existence. (Art. 615, Civil Code) Answer: 3. Positive easements are those which impose upon the owner of the servient estate the obligation of allowing something to be done or of doing it himself, while negative easements are those which prohibit the owner of the servient estate from doing something which he could lawfully do if the easement did not exist. (Art. 615. Civil Code) 05; Property; easements; basic 1977 No. IV-a Discuss briefly five (5) instances of legal easements. Answer (NOTE: There are many legal easements regulated by both the Civil Code and the Water Code. It is the consensus that in answering the above question it will be sufficient for the bar candidate to give merely the essence of the easement or to state the substance of the codal provisions regulating them.) Among the legal easements which may be discussed are: (1) Easement of drainage of waters (Art. 637); (2) easement of public use in the interest of navigation, floatage, fishing and salvage (Art. 638) ; (3) easement of tow-path (Art. 638); (4) easement of abutment of a dam (Art. 639); (5) easement for drawing water or watering of animals (Art. 640); (6) easement of aqueduct (Arts. 642, 643); (7) easement of right of way (Arts 649, 650); (8) easement of a party wall (Arts. 659, 666); (9) easement of tight and view (Arts. 668, 670, 673); (10) easement of drainage of buildings (Art. 676); (11) easement against nuisance (Art. 682); and (12) easement of lateral and subjacent support (Art. 684). 05; Property; easements; light and view Page 182 of 391 1979 No. VII FS was the owner of a big lot in Dagupan Street, Tondo, Manila. On the southern portion of the lot was a home with doors and windows overlooking the northern portion of the lot on which a small house was standing. FS subdivided the lot into two, and sold the southern portion to JB and the northern portion to TV. TY demolished the small house and obtained a permit to construct a four story building on his portion which would thus obstruct the view from the doors and windows of JB's house. JB therefore filed an action to enjoin TY from constructing his building unless it is at a distance of not less than 3 meters from the boundary lines of the two portions. Will the action prosper? Why? Answer The action will prosper. According to the Civil Code, the existence of an apparent sign of easement between two estates established or maintained by the owner of both shall be considered, should either of them be alienated, as a title in order that the easement shall continue actively and passively, unless at the time the ownership of the two estates is divided, the contrary should be provided in the title of conveyance of either of them or the sign should be removed before the execution of the deed. All of the requisites prescribed by the law are present in the instant case. There is an apparent sign of the existence of an easement of light and view involving two estates originally owned by one and the same person. This is indicated by the doors and windows of the house in the southern portion overlooking the northern portion. The sign was established by the original owner. The southern portion was subsequently alienated to JB and the northern portion was also alienated to TY. furthermore, nothing contrary to the easement was stated in the deed of conveyance; neither was the sign removed. Therefore, the easement of light and view shall now be protected by the law. TY cannot construct his building unless he complies with the three-meter rule as provided by law. (Gargantos vs. Tan Yanon, 108 Phil. 888). 05; Property; easements; light and view 1988 No. 3: (a) How are easements acquired? (b) In acquiring easement by prescription, how shall the period of possession be computed? (c) About fifteen years ago, Adelaida constructed a house on her lot at Quezon City adjoining a lot owned by Bernie. She provided it with several windows overlooking Bernie's lot half a meter away from the boundary line. A month ago, Bernie brought an action against Adelaida for the closure of the windows alleging that they violate the law on distances. 1. Has Adelaida acquired an easement of light and view by prescription? 2. Will the action of Bernie prosper? 3. If the action will not prosper, will that not be tantamount to saying that Adelaida has already acquired an easement of light and view? Answer: (a) Continuous and apparent easements are acquired either by virtue of a title or by prescription of ten years (Art. 620, CC), while continuous nonapparent easements and discontinuous easements whether apparent or nonapparent, can only be acquired by virtue of a title (Art. 622, CC). (b) In order that an easement may be acquired by prescription, the time of possession shall be computed thus: In positive easements, from the day on which Page 183 of 391 the owner of the dominant estate, or. the person who may have made use of the easement, commenced to exercise it upon the servient estate; and in negative easements, from the day on which the owner of the dominant estate forbade, by an instrument acknowledged before a notary public, the owner of the servient estate, from executing an act which would be lawful without the easement. (Art. 621, CC.) (c) (1) Adelaide has not acquired an easement of light and view by prescription after ten years. There are two reasons for this, In the first place, there was no formal prohibition as required by law. This should have been done by means of an instrument acknowledged before a notary public wherein she should have prohibited Bernie from obstructing his light and view. She did not. In the second place, she did not observe the legal requirement that there should be a distance of at least two meters between the windows and Bernie's lot, since the view is direct. According to the Civil Code, non-observance of this distance does not give rise to prescription. (2) The action will not prosper because more than ten years has already elapsed from the time of the opening of the windows. Bernie's right of action has already prescribed. (3) This is not tantamount to saying that Adelaida has already acquired an easement of light and view. Under the Civil Code, nobody can prevent Bernie from obstructing Adelaida's light and view by constructing a building on his lot or by raising a wall thereon contiguous to the windows of Adelaida. 05; Property; easements; light and view 1985 No. 5 A is the owner of a four-story building which adjoins a three-story house owned by B, A story of the two buildings has a height of 3 meters. In 1950, A opened in the dividing wall of the edifices two windows each measuring one meter square, the first in the fourth story of his building close to the ceiling, and the second in the third story, the window directly overlooking a small open terrace in the third floor of B's house In 1981, B demanded the closure of the two (2) windows. As A's counsel, what legal advice will you extend to him and the reasons in support thereof? Answers: 1. We have to qualify as to which window, the first window or the second window. With regard to the first window on the fourth floor, the action will prosper because A has not acquired any legal easement of light and view. He did not make any notarial demand and the window opens through a wall belonging exclusively to A, not a party wall. On the other hand, with respect to the second window, the wall is a party wall and it has been existing there for 30 years, therefore A has already acquired a legal easement 2. As regards the easement of light and view, opening of windows which violate the provisions of the Civil Code with respect to distances to the boundary line do not give rise to prescription by express provision of law. 3. The dividing- wall appears to be owned by A exclusively. Accordingly, Art. 670 will apply. If it were not a party wall, Art, 669 would apply. If it is a party wall, since the dividing wall is evidently the common party wall of these two edifices, the easement of light and view has been acquired by prescription after the lapse of 31 years from the opening through the party wall. Page 184 of 391 4. As counsel for A, I would advise him to resist the demand of B on the ground that A has an easement in regard to these openings, it appearing that A had continuous use thereof that lasted for over 30 years. 5. The dividing wall appears to be owned by A. Art. 670 provides that "No windows, apertures, balconies, or other similar projections which afford a direct view upon or towards an adjoining land or tenement can be made, without leaving a distance of two meters between the wall in which they are made and such contiguous property. Neither can side or oblique views upon or towards such conterminous property be had, unless there be a distance of sixty centimeters. The non observance of these distances does not give rise to prescription". Art. 669 states that "when the distances in Article 670 are not observed, the owner of a wall which is not a party wall, adjoining a tenement or piece of land belonging to another, can make in it openings to admit light at the height of the ceiling joints or immediately under the ceiling, and of the size of thirty centimeters square, and, in every case, with an iron grating imbedded in the wall and with a wire screen." 6. Since the dividing wall is evidently the common wall {party wall) of the two adjoining edifices, the easement of fight and view has been acquired by prescription after the lapse of 31 years from the opening through the party wall (Art. 668, Civil Code). Nevertheless, the owner of the tenement or property adjoining the wall in which the openings are made can close them should he acquire part-ownership thereof, if there is no stipulation to the contrary. 7. As A's legal counsel, I would advise him to resist B's demand as the action to close the openings has already prescribed although the easement itself of light and view has not been acquired by prescription. 05; Property; easements; prescriptive period 1982 No. 7 "A" built a house on his residential lot up to the boundary line. In the presence of "B", the adjoining owner, "A" opened windows with a direct view over the lot of "B". Twelve (12) years later, "B" built a house on his own lot also right up to the boundary line "A" brought an action against "B" to enjoin the latter from building a house up to the boundary line, alleging that "B" cannot build less than three (3) meters from the boundary line (a) as he had acquired an easement of light and view by prescription; and (b) the action of "B", if any, had already prescribed. Decide with reasons. Answer (a) I shall decide against the contention of "A" that he has already acquired an easement of light and view by prescription after ten years. There are two reasons for this. In the first place, there was no formal prohibition as required by law. This should have been done by means of an instrument acknowledged before a notary public wherein he should have prohibited "B" from obstructing his light and view. He did hot. In the second place, he did not observe by legal requirement that there should be a distance of at least two meters between the windows, since the view is direct, and "B's" lot. According to the Civil Code, non-observance of this distance does not give rise to prescription. (Note: The above answer is based on Arts 668 and 67Q of the Civil Code and on Cortes vs. Yutivo, 2 Phil. 24; Fabie vs. Lichauco, 11 Phil. 14; Cid vs. Javier, IDS Phil. 850). (b) However, I agree with the contention of "A" that "B's" right of action to compel "A" to close the windows has already prescribed. The period of prescription Page 185 of 391 for such action is ten years to be counted from the time that the windows were constructed. Nevertheless, this will not help "A" very much. Since he has not acquired an easement of light and view, nobody can prevent "B" from obstructing "A's" light and view either by constructing his own house up to the boundary line or by constructing a wall at the boundary line contiguous to the windows of "A". (Note: The above answer is based on Art, 670 of the Civil Code and on Sternberg vs. Soriano, 41 Phil. 210.) 05; Property; easements; right of way 1993 No. 16: Tomas Encarnacion's 3.000 square meter parcel of land, where he has a plant nursery, is located just behind Aniceta Magsino's two hectare parcel land. To enable Tomas to have access to the highway, Aniceta agreed to grant him a road right of way a meter wide through which he could pass. Through the years Tomas' business flourished which enabled him to buy another portion which enlarged the area of his plant nursery. But he was still landlocked. He could not bring in and out of his plant nursery a jeep or delivery panel much less a truck that he needed to transport his seedlings. He now asked Aniceta to grant him a wider portion of her property, the price of which he was willing to pay, to enable him to construct a road to have access to his plant nursery. Aniceta refused claiming that she had already allowed him a previous road right of way. Is Tomas entitled to the easement he now demands from Aniceta? Answer: Art. 651 of the Civil Code provides that the width of the easement must be sufficient to meet the needs of the dominant estate, and may accordingly change from time to tune. It is the need of the dominant estate which determines the width of the passage. These needs may vary from time to time. As Tomas' business grows, the need for use of modern conveyances requires widening of the easement. Alternative Answer: The facts show that the need for a wider right of way arose from the increased production owing to the acquisition by Tomas of an additional area. Under Art. 626 of the Civil Code, the easement can be used only for the immovable originally contemplated. Hence, the increase in width is Justified and should have been granted. 05; Property; easements; right of way 2000 No VI The coconut farm of Federico is surrounded by the lands of Romulo. Federico seeks a right of way through a portion of the land of Romulo to bring his coconut products to the market. He has chosen a point where he will pass through a housing project of Romulo. The latter wants him to pass another way which is one kilometer longer. Who should prevail? (5%) SUGGESTED ANSWER: Romulo will prevail. Under Article 650 of the New Civil Code, the easement of right of way shall be established at the point least prejudicial to the servient estate and where the distance from the dominant estate to a public highway is the shortest. In case of conflict, the criterion of least prejudice prevails over the criterion of shortest distance. Since the route chosen by Federico will prejudice the housing project of Romulo, Romulo has the right to demand that Federico pass another way even though it will be longer. Page 186 of 391 05; Property; easements; right of way 1981 No. 6 "A", owner of an agricultural land, which had no connection with a public road, has been passing through a pathway across the land of "B" with the latter's tolerance for over twenty years. "A" subdivided his property into 20 residential lots and sold them to different persons. "B" blocked the pathway and refused to let the buyers pass. a) Did "A" acquire an easement of right of way? Why? b) Reason. Could "B" close the pathway and refuse to let the lot buyers pass? c) What are the rights of the lot buyers, if any? Explain. Answer (a) Answer No. 1 - "A" did not acquire an easement of right of way. According to the Civil Code, continuous and apparent easements are acquired either by virtue of a title or by prescription after ten years. Continuous non-apparent easements and discontinuous easements, whether apparent or not, may be acquired only by virtue of a title. It is obvious that an easement of right of way is discontinuous in character because it is used only at intervals and its use requires the acts or intervention of man. It is also obvious that use by tolerance is not equivalent to a title. Consequently, since "A" never acquired any title from "B" and since the easement cannot be acquired by prescription because of its discontinuous character, "A " did not acquire any easement of right of way. Answer No. 2 — "A" did not acquire an easement of right of way. Obviously, he does not possess any title to pass through the property of "B". So, the only possible basis for the acquisition of the easement would be prescription after ten years. In order that the easement can be acquired by prescription after ten years, it is essential that it may be both continuous and apparent at the same time. An easement of right of way is discontinuous. Therefore, it cannot be acquired by prescription after ten years. (Note: The above answers are based on Arts. 620 and S22 of the Civil Code and on Cuayang vs. Benedicto vs. Benedicto, 37 Phil. 781, and Ronquillo vs. Roco, 103 Phil. 84. The Committee, however, respectfully recommends that if the bar candidate answers the problem by invoking Tolentino's opinion that if the right of way is permanent and has on apparent sign, there is no reason why it cannot be acquired by prescription, it should be properly credited.) (b) Yes. "B" could close the pathway and refuse to let the buyers pass. The pathway belongs to him. Under the Civil Code, every owner may enclose or fence his land or tenement by means of walls, ditches, live or dead hedges, or by other means without detriment to servitudes constituted thereon. (Note: The above answer is based on Art. 430 of the Civil Code. The Committee again recommends that if the bar candidate comes out with an answer in accordance with Tolentino's opinion (supra), it should be properly credited.) (c) The lot buyers can now demand for the establishment of a legal or compulsory easement of right of way. Since their lots are surrounded by other immovables without adequate outlet to the public highway and this is not imputable to their own acts, they now have a perfect right to do so. However, they must comply with two other requisites. They must pay to "B" the proper indemnity. The right of way must be at a point least prejudicial to the servient estate, and, insofar as Page 187 of 391 consistent with the rule, where the distance to the public highway may be the shortest. (Note: The above answer is based on Arts. 649 and 650 of the Civil Code and on Locsin vs. Climaco, 26 SCRA 816). 05; Property; easements; right of way; inseparability 2001 No V Emma bought a parcel of land from Equitable-PCI Bank, which acquired the same from Felisa, the original owner. Thereafter, Emma discovered that Felisa had granted a right of way over the land in favor of the land of Georgina, which had no outlet to a public highway, but the easement was not annotated when the servient estate was registered under the Torrens system. Emma then filed a complaint for cancellation of the right of way, on the ground that it had been extinguished by such failure to annotate. How would you decide the controversy? (5%) SUGGESTED ANSWER The complaint for cancellation of easement of right of way must fall. The failure to annotate the easement upon the title of the servient estate is not among the grounds for extinguishing an easement under Art. 631 of the Civil Code. Under Article 617, easements are inseparable from the estate to which they actively or passively belong. Once it attaches, it can only be extinguished under Art. 631, and they exist even if they are not stated or annotated as an encumbrance on the Torrens title of the servient estate. (II Tolentino 326, 1987 ed.) ALTERNATIVE ANSWER Under Section 44, PD No. 1529, every registered owner receiving a certificate of title pursuant to a decree of registration, and every subsequent innocent purchaser for value, shall hold the same free from all encumbrances except those noted on said certificate. This rule, however, admits of exceptions. Under Act 496, as amended by Act No. 2011, and Section 4, Act 3621, an easement if not registered shall remain and shall be held to pass with the land until cutoff or extinguished by the registration of the servient estate. However, this provision has been suppressed in Section 44, PD No. 1529. In other words, the registration of the servient estate did not operate to cut-off or extinguish the right of way. Therefore, the complaint for the cancellation of the right of way should be dismissed. 05; Property; easements; right of way; requisites 1996 No. 8: David is the owner of the subdivision in Sta. Rosa, Laguna, without an access to the highway. When he applied for a license to establish the subdivision, David represented that he will purchase a rice field located between his land and the highway, and develop it into an access road. But. when the license was already granted, he did not bother to buy the rice field, which remains unutilized until the present. Instead, he chose to connect his subdivision with the neighboring subdivision of Nestor, which has an access to the highway. Nestor allowed him to do this, pending negotiations on the compensation to be paid. When they failed to arrive at an agreement, Nestor built a wall across the road connecting with David's subdivision. David filed a complaint In court, for the establishment of an easement of right of way through the subdivision of Nestor which he claims to be the most adequate and practical outlet to the highway. 1) What are the requisites for the establishment of a compulsory easement of a right of way? Page 188 of 391 Answer: Art, 649, NCC. The owner, or any person who by virtue of a real right may cultivate or .use any immovable which is surrounded by other immovables pertaining to other persons and without adequate outlet to a public highway, is entitled to demand a right of way through the neighboring estates, after payment of the property indemnity. Should this easement be established in such a manner that its use may be continuous for all the needs of the dominant estate, establishing a permanent passage, the indemnity shall consist of the value of the land occupied and the amount of the damage caused to the servient estate. In case the right of way is limited to the necessary passage for the cultivation of the estate surrounded by others and for the gathering of its crops through the servient estate without a permanent way, the indemnity shall consist In the payment of the damage cause by such encumbrance. This easement is not compulsory If the isolation of the Immovable is due to the proprietor's own acts. (564a). The easement of right of way shall be established at the point least prejudicial to the servient estate, and insofar as consistent with this rule, where the distance from the dominant estate to a public highway may be the shortest (Art. 650, NCC: Vda. de Baltazar v. CA. 245 SCRA 333} Alternative Answer: The requisites for a compulsory easement of right of way are: (a) the dominant estate is surrounded by other immovables and is without an adequate outlet to a public street or highway; (b) proper indemnity must be paid; (c) the isolation must not be due to the acts of the owner of the dominant estate; and (d) the right of way claimed is at a point least prejudicial to the servient estate and, insofar as is consistent with this rule, where the distance to the street or highway is shortest. 2) Is David entitled to a right of way in this case? Why or why not? Answer; No, David is not entitled to the right of way being claimed. The isolation of his subdivision was due to his own act or omission because he did not develop into an access road the rice field which he was supposed to purchase according to his own representation when he applied for a license to establish the subdivision (Floro us. Llenado, 244 SCRA713). 05; Property; good faith/ bad faith 1999 No IX. (a) Because of confusion as to the boundaries of the adjoining lots that they bought from the same subdivision company, X constructed a house on the adjoining lot of Y in the honest belief that it is the land that he bought from the subdivision company. What are the respective rights of X and Y with respect to X's house? (3%) (b) Suppose X was in good faith but Y knew that X was constructing on his (Y's) land but simply kept quiet about it, thinking perhaps that he could get X's house later. What are the respective rights of the parties over X's house in this case? (2%) ANSWER: (a) The rights of Y, as owner of the lot, and of X, as builder of a house thereon, are governed by Art. 448 of the Civil Code which grants to Y the right to choose between two remedies: (a) appropriate the house by indemnifying X for its Page 189 of 391 value plus whatever necessary expenses the latter may have incurred for the preservation of the land, or (b) compel X to buy the land if the price of the land is not considerably more than the value of the house. If it is, then X cannot be obliged to buy the land but he shall pay reasonable rent, and in case of disagreement, the court shall fix the terms of the lease. (b) Since the lot owner Y is deemed to be in bad faith (Art 453), X as the party in good faith may (a) remove the house and demand indemnification for damages suffered by him, or (b) demand payment of the value of the house plus reparation for damages (Art 447, in relation to Art 454). Y continues as owner of the lot and becomes, under the second option, owner of the house as well, after he pays the sums demanded. 05; Property; good faith/ bad faith 2000 No IX a) Demetrio knew that a piece of land bordering the beach belonged to Ernesto. However, since the latter was studying in Europe and no one was taking care of the land, Demetrio occupied the same and constructed thereon nipa sheds with tables and benches which he rented out to people who want to have a picnic by the beach. When Ernesto returned, he demanded the return of the land. Demetrio agreed to do so after he has removed the nipa sheds. Ernesto refused to let Demetrio remove the nipa sheds on the ground that these already belonged to him by right of accession. Who is correct? (3%) SUGGESTED ANSWER; Ernesto is correct, Demetrio is a builder in bad faith because he knew beforehand that the land belonged to Ernesto, Under Article 449 of the New Civil Code, one who builds on the land of another loses what is built without right to indemnity. Ernesto becomes the owner of the nipa sheds by right of accession. Hence, Ernesto is well within his right in refusing to allow the removal of the nipa sheds. 05; Property; good faith/ bad faith 2000 No IX b) In good faith, Pedro constructed a five-door commercial building on the land of Pablo who was also in good faith. When Pablo discovered the construction, he opted to appropriate the building by paying Pedro the cost thereof. However, Pedro insists that he should be paid the current market value of the building, which was much higher because of inflation. 1) Who is correct Pedro or Pablo?(1%) 2) In the meantime that Pedro is not yet paid, who is entitled to the rentals of the building, Pedro or Pablo? (1%) SUGGESTED ANSWER: Pablo is correct. Under Article 448 of the New Civil Code in relation to Article 546, the builder in good faith is entitled to a refund of the necessary and useful expenses incurred by him, or the increase in value which the land may have acquired by reason of the improvement, at the option of the landowner. The builder is entitled to a refund of the expenses he incurred, and not to the market value of the Improvement The case of Pecson v. CA, 244 SCRA 407, is not applicable to the problem, In the Pecson case, the builder was the owner of the land who later lost the property at a public sale due to non-payment of taxes. The Court ruled that Article 448 does not apply to the case where the owner of the land is the builder but who later lost the Page 190 of 391 land; not being applicable, the indemnity that should be paid to the buyer must be the fair market value of the building and not just the cost of construction thereof. The Court opined in that case that to do otherwise would unjustly enrich the new owner of the land. ALTERNATIVE ANSWER: Pedro is correct. In Pecson a CA, it was held that Article 546 of the New Civil Code does not specifically state how the value of useful Improvements should be determined in fixing the amount of Indemnity that the owner of the land should pay to the builder in good faith. Since the objective of the law is to adjust the rights of the parties in such manner as "to administer complete justice to both of them in such a way as neither one nor the other may enrich himself of that which does not belong to him", the Court ruled that the basis of reimbursement should be the fair market value of the building. SUGGESTED ANSWER: 2) Pablo is entitled to the rentals of the building. As the owner of the land, Pablo is also the owner of the building being an accession thereto. However, Pedro who is entitled to retain the building is also entitled to retain the rentals. He, however, shall apply the rentals to the indemnity payable to him after deducting reasonable cost of repair and maintenance. ALTERNATIVE ANSWER: Pablo is entitled to the rentals. Pedro became a possessor in bad faith from the time he learned that the land belongs to Pablo. As such, he loses his right to the building, including the fruits thereof, except the right of retention. 05; Property; good faith/ bad faith 1992 No 4: A owns a parcel of residential land worth P50O,OOO.OO Unknown to A, a residential house costing P 100,000.00 is built on the entire parcel by B who claims ownership of the land. Answer all the following questions based on the premise that B is a builder in good faith and A is a landowner in good faith. a) May A acquire the house built by B? If so, how? b) If the land increased in value to P5OO,OOO.OO by reason of the building of the house thereon, what amount should be paid by A in order to acquire the house from B? c) Assuming that the cost of the house was P900,000.00 and not P100,000.00, may A require B to buy the land? d) If B voluntarily buys the land as desired by A, under what circumstances may A nevertheless be entitled to have the house removed? e) In what situation may a "forced lease" arise between A and B. and what terms and conditions would govern the lease? Give reasons for your answers. Answer; (a) Yes, A may acquire the house build by B by paying Indemnity to B. Article 448 of the Civil Code provides that 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 546 of the Civil Code. Page 191 of 391 (b) A should pay B the sum of P50,000. Article 548 of the Civil Code provides that useful expenses shall be refunded to the possessor In good faith with the right of retention, the person who has defeated him in the possession having the option of refunding the amount of the expenses or of paying the Increase in value which the thing may have acquired by reason thereof. The increase in value amounts to P50,000.00. (c) Yes, A may require B to-buy the land. Article 448 of the Civil Code provides that the owner of the land on which anything has been built in good faith shall have the right to oblige the one who built to pay the price of the land if its value is not considerably more than that of the building, (d) If B agrees to buy land but fails to pay, A can have the house removed ( Depra vs. Dumlao, 136 SCRA 475). (e) Article 448 of the Civil Code provides that the builder cannot be obliged to buy the land if its value is considerably more than that of the building. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building after proper indemnity, The parties shall agree upon the terms of the lease and in case of disagreement, the court fix the terms thereof. 05; Property; good faith/ bad faith 1984 No. 5 Believing that a piece of land belonged to him, A erected thereon a building, using materials belonging to C. B, the owner of the land, was aware of the construction being made by A, but did not do anything to stop it. What are the rights of A, B and C with respect to the building and as against each other? Answer: A. Furnished by Office of Justice Palma. B, regardless of his good or bad faith, becomes the owner of the building (Art, 445 and 448). However, A, a builder in good faith, will be entitled to reimbursement of his necessary and useful expenses, with a right to retain the same until paid. He may also remove the construction, since B, the landowner, acted in bad faith in not stopping the construction (Art. 454, 447). C, the owner of the materials shall have the right to reimbursement C may also remove them but only if he can do so without injury to the work (Art. 447). B. Comments and Suggested Answer We suggest that the following should be accepted as a correct answer: A can choose between (1) reimbursement by B of the value of the building plug damages, or (2) removal of the materials, with or without injury to the building, plus damages. It must be observed that B is in bad faith. According to the law (Art. 454, Civil Code), when the landowner acted in bad faith and the builder acted in good faith, the provision of Art. 447 of the Civil Code shall apply. The rights of B, owner of the land, will depend upon the option selected by A. If A decides to demand reimbursement of the building plus damages, of course, B becomes the owner of the building. If A decides to remove the materials regardless of whether or not there is injury to the .building, plus damages, B does not become the owner of the building. In the case of C, owner of the materials, assuming that he was in good faith, obviously, he can proceed against A for the value of his materials and against E for damages. If A cannot pay him the valve of his materials, he (C) can then proceed Page 192 of 391 against B for the value of said materials (Art. 455, Civil Code). In other words, B will then be liable not only for the value of C's materials but also for damages, 05; Property; good faith/ bad faith 1977 No. V-c Discuss briefly the effects of possession in good faith and possession in bad faith with respect to the fruits, the charges, the expenses, and deterioration or loss. Answer A. Fruits received: 1. Possessor in good faith is entitled to fruits received while his possession is still in good faith (Art. 644, Civil Code). 2. Possessor in bad faith shall reimburse fruits received or which legitimate possessor could have received, subject to Art. 443 (Art. 549, Civil Code). B. Pending fruits: 1. Possessor in good faith and legitimate possessor shall be liable for expenses of cultivation and shall share in net harvest in proportion to the time of their possession (Art. 545, par. l, Civil Code). 2. Possessor in bad faith shall not have any right, C. Charges: Possessor, whether in good or bad faith, and legitimate possessor shall share charges in proportion to the time of their possession (Art, 545, par. 1, Civil Code). D. Expenses: 1. Necessary expenses— a. Rights of possessor in good faith: (1) Right of reimbursement (Art. 546, par. 1, Civil Code). (2) Right of retention (Art, 546, par. 1, Civil Code). b. Rights of possessor in bad faith: Right of reimbursement only (Art. 546, par. 1, Civil Code). 2. Useful expenses— a. Rights of possessor in good faith: (1) Right of reimbursement. (2) Right of retention (Art. 546, par. 2, Civil Code). (3) Limited right of removal (Art 547, Civil Code). b. Rights of possessor in bad faith: None. 3. Ornamental expenses— a. Rights of possessor in good faith: Limited right of removal (548, Civil Code), b. Rights of possessor in bad faith: Limited right of removal (549, Civil Code). E. Deterioration or loss: 1. Possessor in good faith — No liability, unless due to his fault or negligence after he had become possessor in bad faith (Art. 552, Civil Code). 2. Possessor in bad faith — Always liable, whether due to his fault or negligence or due to a fortuitous event (Art. 552, Civil Code). Page 193 of 391 (NOTE: One way of making the above answer a short one would be to look at the question only from the point of view of the defendant possessor, and then, determine whether he is entitled to the fruits or not, whether he can demand reimbursement or not, and whether he may be held liable or not.) 05; Property; good faith/ bad faith; expenses 1983 No. 4 A, a squatter who is sought to be evicted by the landowner, B, seeks reimbursement from the latter for the improvements he made on the property, while B demands the value of all the fruits A gathered from the land during his occupancy thereof. Is A entitled to the indemnity he prays for? Is he bound to pay for the fruits he received? Why? Answer (Examiner's Answer) As a possessor in bad faith, A may recover only the necessary expenses he may have incurred while in possession and reimbursement for useful improvements introduced by him if the owner chooses to retain them and he must pay him the value of all the fruits he received. (Committee's Answer) A is entitled to reimbursement for ail expenses incurred by him for necessary improvements. Under the law, this is the only right to which a possessor in bad faith (builder in bad faith) is entitled as against the legitimate owner or possessor. (Note: The above answer is based on Arts. 546, par. 1 and 452, Civil Code. We submit most respectfully that A is not entitled to reimbursement for useful expenses. If B chooses to retain the useful improvements, Arts. 449 and 451, Civil Code, are directly applicable. The second paragraph of Art. 546, Civil Code is applicable only to a possessor in good faith.) Yes, A is bound to pay for the fruits received and those which B could have received minus necessary expenses and expenses for the production, gathering and preservation of the fruits. This is expressly ordained by the law. (Note: The above answer is based on Arts. 549, 546, par. 1 and 442, Civil Code) 05; Property; good faith/ bad faith; presumption of good faith : builder in good faith 2001 No III Mike built a house on his lot in Pasay City. Two years later, a survey disclosed that a portion of the building actually stood on the neighboring land of Jose, to the extent of 40 square meters. Jose claims that Mike is a builder in bad faith because he should know the boundaries of his lot, and demands that the portion of the house which encroached on his land should be destroyed or removed. Mike replies that he is a builder in good faith and offers to buy the land occupied by the building instead. 1) Is Mike a builder in good faith or bad faith? Why? (3%) 2) Whose preference should be followed? Why? (2%) SUGGESTED ANSWER 1) Yes, Mike is a builder in good faith. There is no showing that when he built his house, he knew that a portion thereof encroached on Jose's lot. Unless one is Page 194 of 391 versed in the science of surveying, he cannot determine the precise boundaries or location of his property by merely examining his title. In the absence of contrary proof, the law presumes that the encroachment was done in good faith [Technogas Phils, v. CA, 268 SCRA 5, 15 (1997)]. 2} None of the preferences shall be followed. The preference of Mike cannot prevail because under Article 448 of the Civil Code, it is the owner of the land who has the option or choice, not the builder. On the other hand, the option belongs to Jose, he cannot demand that the portion of the house encroaching on his land be destroyed or removed because this is not one of the options given by law to the owner of the land. The owner may choose between the appropriation of what was built after payment of indemnity, or to compel the builder to pay for the land if the value of the land is not considerably more than that of the building. Otherwise, the builder shall pay rent for the portion of the land encroached. ALTERNATIVE ANSWER 1) Mike cannot be considered a builder in good faith because he built his house without first determining the corners and boundaries of his lot to make sure that his construction was within the perimeter of his property. He could have done this with the help of a geodetic engineer as an ordinary prudent and reasonable man would do under the circumstances. 2) Jose's preference should be followed. He may have the building removed at the expense of Mike, appropriate the building as his own, oblige Mike to buy the land and ask for damages in addition to any of the three options. (Articles 449, 450, 451, CC) 05; Property; good faith/ bad faith; rights of a possessor (gf/bf) vs usufructuary 1996 No. 7: Bartolome constructed a chapel on the land of Eric. What are Bartolome's rights if he were: 1) a possessor of the land in good faith? 2) a possessor of the land in bad faith? 4) a lessee of the land? 3) a usufructuary of the land? Answer: 1) possessor in good faith --A chapel is a useful improvement. Bartolome may remove the chapel if it can be removed without damage to the land, unless Eric chooses to acquire the chapel. In the latter case, Bartolome has the right to the reimbursement of the value of the chapel with right of retention until he is reimbursed. [Art. 448 in relation to Art. 546 & 547. NCC). Alternative Answer; Assuming that Eric acted in good faith, Bartolome's rights will depend upon what option Eric chooses. Eric, the owner of the land, may choose to acquire the chapel, which Is a useful expense or to sell the land to the builder (Bartolome), If Eric chooses to acquire the chapel, he has the right to reimbursement for useful expenses, with a right of retention until paid. Page 195 of 391 If Eric chooses to sell the land to Bartolome. Bartolome may refuse to buy the land if the value of the land is considerably more than the value of the building, in which case, there will be a forced leased between them, Additional Answer: If Eric acted in bad faith, then Bartolome has the right of absolute removal of the chapel, plus damages. However, if Eric chooses to acquire the chapel, then Bartolome has the right to reimbursement, plus payment of damages, with right of retention (Art. 454 in relation of Art. 447. NCC) 2) Possessor in bad faith --Bartolome, under Art. 449 of the NCC, loses whatever he built, without any right to indemnity. Alternative Answer: It is the owner of the land who has the right to acquire the chapel without paying indemnity, plus damages, or to require Bartolome to remove the chapel, plus damages or to require Bartolome to buy the land, without any option to refuse to buy it. (Arts. 449 and 458, NCC) If Eric acted in bad faith, then his bad faith cancels the bad faith of Bartolome, and both will be taken to have acted in good faith. (Art. 453, NCC) 3) Lessee --Bartolome has the right to remove the improvement if it is possible to do so without causing damage to the property (Art. 579, NCC). He may also set off the improvement against any damages which the property held in usufruct suffered because of his act or the acts of his assignee. (Art. 580, NCC). 4) Usufructuary --The owner of the land, as lessor, can acquire the improvement by paying for one-half of its value. Should the lessor refuse to reimburse said amount, the lessee may remove the Improvement, even though the principal thing may suffer damage thereby (Art. 1678. NCC). 05; Property; good faith/ bad faith; sower in good faith 2000 No X b) Felix cultivated a parcel of land and planted it to sugar cane, believing it to be his own. When the crop was eight months old, and harvestable after two more months, a resurvey of the land showed that it really belonged to Fred. What are the options available to Fred? (2%) SUGGESTED ANSWER: As to the pending crops planted by Felix in good faith, Fred has the option of allowing Felix to continue the cultivation and to harvest the crops, or to continue the cultivation and harvest the crops himself. In the latter option, however, Felix shall have the right to a part of the expenses of cultivation and to a part of the net harvest, both in proportion to the time of possession. (Art. 545 NCC), ALTERNATIVE ANSWER: Since sugarcane Is not a perennial crop. Felix is considered a sower in good faith. Being so, Art. 448 applies. The options available to Fred are: (a) to appropriate the crop after paying Felix the indemnity under Art. 546, or (b) to require Felix to pay rent. 05; Property; hidden treasure Page 196 of 391 1995 No. 9: Tim came into possession of an old map showing where a purported cache of gold bullion was hidden. Without any authority from the government Tim conducted a relentless search and finally found the treasure buried in a new river bed formerly part of a parcel of land owned by spouses Tirso and Tessie. The old river which used to cut through the land of spouses Ursula and Urbito changed its course through natural causes. 1. To whom shall the treasure belong? Explain. Answer: 1. The treasure was found in a property of public dominion, the new river bed. Since Tim did not have authority from the government and, therefore, was a trespasser, he is not entitled to the one-half share allotted to a finder of hidden treasure. All of it will go to the State. In addition, under Art. 438 of the NCC. in order that the finder be entitled to the 1/2 share, the treasure must be found by chance, that is by sheer luck. In this case, since Tim found the treasure not by chance but because he relentlessly searched for it, he is not entitled to any share in the hidden treasure. Alternative Answer: The law grants a one-half share to a finder of hidden treasure provided he is not a trespasser and the finding is by chance. It is submitted that Tim is not a trespasser despite his not getting authority from the government, because the new river bed where he found the treasure is property for public use (Art. 420 NCC), to which the public has legitimate access. The question, therefore, boils down to whether or not the finding was by chance in view of the fact that Tim "conducted a relentless search" before finding the treasure. The strict or literal view holds that deliberate or Intentional search precludes entitlement to the one-half share allotted by law to the finder since the phrase "by chance" means "by accident", meaning an unexpected discovery. The liberal view, however, would sustain Tim's right to the allocated share Interpreting the phrase in question as meaning "by a stroke of good fortune", which does not rule out deliberate or intentional search. It is submitted that the liberal view should prevail since In practical reality, hidden treasure is hardly ever found without conscious effort to find it, and the strict view would tend to render the codal provision In question Illusory. 05; Property; hidden treasure 1976 No. X-b Under a tip that hidden treasure is burned in the land of A, B leases the property and conducts excavation thereon. If in the land valuable gold coins are found, is B entitled to the same? Explain. Answer No, it was not found "by chance". (Article 438) B deliberately searched for it. Moreover, treasure is defined as hidden and unknown deposit of precious objects, the lawful ownership of which does not appear. There being a "tip", the deposit is "known". (Article 439) Alternative Answer As a "tip" is not certain, the finding could still be considered as by chance or a stroke of fortune. Hence, B is entitled to 1/2. 05; Property; hidden treasures 1997 No, 7: Page 197 of 391 Marcelino, a treasure hunter as just a hobby, has found a map which appears to indicate the location of hidden treasure. He has an idea of the land where the treasure might possibly be found. Upon Inquiry, Marcelino learns that the owner of the land, Leopoldo, is a permanent resident of Canada, Nobody, however, could give him Leopoldo's exact address. Ultimately, anyway, he enters the land and conducts a search. He succeeds. Leopoldo. learning of Marcelino's "find", seeks to recover the treasure from Marcelino but the latter Is not willing to part with it. Falling to reach an agreement, Leopoldo sues Marcelino for the recovery of the property. Marcelino contests the action. How would you decide the case? Answer; I would decide in favor of Marcelino since he is considered a finder by chance of the hidden treasure, hence, he is entitled to one-half (1/2) of the hidden treasure. While Marcelino may have had the intention to look for the hidden treasure, still he is a finder by chance since it is enough that he tried to look for it. By chance in the law does not mean sheer luck such that the finder should have no intention at all to look for the treasure. By chance means good luck, implying that one who intentionally looks for the treasure is embraced in the provision. The reason is that it is extremely difficult to find hidden treasure without looking for it deliberately, Marcelino is not a trespasser since there is no prohibition for him to enter the premises, hence, he is entitled to half of the treasure. Alternative Answers: 1. Marcelino did not find the treasure by chance because he had a map, he knew the location of the hidden treasure and he intentionally looked for the treasure, hence, he is not entitled to any part of the treasure. 2. Marcelino appears to be a trespasser and although there may be a question of whether he found it by chance or not, as he has found the hidden treasure by means of a treasure map, he will not be entitled to a finder's share. The hidden treasure shall belong to the owner. 3. The main rule is that hidden treasure belongs to the owner of the land, building or other property on which It is found. If it is found by chance by a third person and he is not a trespasser, he is entitled to one-half (1/2). If he is a trespasser, he loses everything. 05; Property; immovable properties; chattel mortgage over immovables 2003 No XIX. X constructed a house on a lot which he was leasing from Y. Later, X executed a chattel mortgage over said house in favor of Z as security for a loan obtained from the latter. Still later, X acquired ownership of the land where his house was constructed, after which he mortgaged both house and land in favor of a bank, which mortgage was annotated on the Torrens Certificate of Title. When X failed to pay his loan to the bank, the latter, being the highest bidder at the foreclosure sale, foreclosed the mortgage and acquired X’s house and lot. Learning of the proceedings conducted by the bank, Z is now demanding that the bank reconvey to him X’s house or pay X’s loan to him plus interests. Is Z’s demand against the bank valid and sustainable? Why? 5% SUGGESTED ANSWER: No, Z’s demand is not valid. A building is immovable or real property whether it is erected by the owner of the land, by a usufructuary, or by a lessee. It may be treated as a movable by the parties to chattel mortgage but such is binding only Page 198 of 391 between them and not on third parties (Evangelista v. Alto Surety Col, inc. 103 Phil. 401 [1958]). In this case, since the bank is not a party to the chattel mortgage, it is not bound by it. as far as the Bank is concerned, the chattel mortgage, does not exist. Moreover, the chattel mortgage does not exist. Moreover, the chattel mortgage is void because it was not registered. Assuming that it is valid, it does not bind the Bank because it was not annotated on the title of the land mortgaged to the bank. Z cannot demand that the Bank pay him the loan Z extended to X, because the Bank was not privy to such loan transaction. ANOTHER SUGGESTED ANSWER: No, Z’s demand against the bank is not valid. His demand that the bank reconvey to him X’s house presupposes that he has a real right over the house. All that Z has is a personal right against X for damages for breach of the contract of loan. The treatment of a house, even if built on rented land, as movable property is void insofar as third persons, such as the bank, are concerned. On the other hand, the Bank already had a real right over the house and lot when the mortgage was annotated at the back of the Torrens title. The bank later became the owner in the foreclosure sale. Z cannot ask the bank to pay for X’s loan plus interest. There is no privity of contract between Z and the bank. ALTERNATIVE ANSWER: The answer hinges on whether or not the bank is an innocent mortgagee in good faith or a mortgagee in bad faith. In the former case, Z’s demand is not valid. In the latter case, Zl’s demand against the bank is valid and sustainable. Under the Torrens system of land registration, every person dealing with registered land may rely on the correctness of the certificate of title and the law will not in any way oblige to him to look behind or beyond the certificate in order to determine the condition of the title. He is not bound by anything not annotated or reflected in the certificate. If he proceeds to buy the land or accept it as a collateral relying on the certificate, he is considered a buyer or a mortgagee in good faith. On this ground, the Bank acquires a clean title to the land and the house. However, a bank is not an ordinary mortgagee. Unlike private individuals, a bank is expected to exercise greater care and prudence in its dealings. The ascertainment of the condition of a property offered as collateral for a loan must be a standard and indispensable part of its operation. The bank should have conducted further inquiry regarding the house standing on the land considering that it was already standing there before X acquired the title to the land. The bank cannot be considered as a mortgagee in good faith. On this ground, Z’s demand against the Bank is valid and sustainable. 05; Property; nuisance 2002 No VI. Lauro owns an agricultural land planted mostly with fruit trees. Hernando owns an adjacent land devoted to his piggery business, which is two (2) meters higher in elevation. Although Hernando has constructed a waste disposal lagoon for his piggery, it is inadequate to contain the waste water containing pig manure, and it often overflows and inundates Lauro’s plantation. This has increased the acidity of the soil in the plantation, causing the trees to wither and die. Lauro sues for damages caused to his plantation. Hernando invokes his right to the benefit of a natural easement in favor of his higher estate, which imposes upon the lower estate Page 199 of 391 of Lauro the obligation to receive the waters descending from the higher estate. Is Hernando correct? (5%) SUGGESTED ANSWER: Hernando is wrong. It is true that Lauro’s land is burdened with the natural easement to accept or receive the water which naturally and without interruption of man descends from a higher estate to a lower estate. However, Hernando has constructed a waste disposal lagoon for his piggery and it is this waste water that flows downward to Lauro’s land. Hernando has, thus, interrupted the flow of water and has created and is maintaining a nuisance. Under Act. 697 NCC, abatement of a nuisance does not preclude recovery of damages by Lauro even for the past existence of a nuisance. The claim for damages may also be premised in Art. 2191 (4) NCC. ANOTHER ANSWER: Hernando is not correct. Article 637 of the New Civil Code provides that the owner of the higher estate cannot make works which will increase the burden on the servient estate. (Remman Enterprises, Inc. v. CA, 330 SCRA 145 [2000]). The owner of the higher estate may be compelled to pay damages to the owner of the lower estate. 05; Property; nuisance 1977 No. V-b P built a house on a lot close to his place of work, an electric plant. Years later, after his retirement, the plant bought additional equipment; P brought suit for abatement of nuisance and damages, claiming that the new units were so powerful that the noise and the vibrations they caused bothered the whole neighborhood. Is the defendant liable? Answer The defendant electric plant is liable for damages. In a similar case, Velasco vs; Manila. Electric Co., 40 SCRA 342, the Supreme Court held that the general rule is that everyone is bound to bear the habitual or customary inconveniences that result from the proximity of others, and so long as this level is not surpassed, he may not complain against them. But if the prejudice exceeds the inconveniences that such proximity habitually brings, the neighbor who causes such disturbance is held responsible for the resulting damages, being guilty of causing nuisance. The noise continuously emitted by a Meralco sub-station day and night, constitutes an actionable nuisance for which the plaintiff is entitled to damages and other relief. (NOTE: An opposite answer may be sustained by first recognizing the fact that sound may now constitute an actionable nuisance, but plaintiff assumed all of the risks by constructing his house close to the plant.) 05; Property; nuisance 1980 No. III (b) "J" and his family lived in his house in Metro Manila. Adjoining "J's" house was a vacant lot MERALCO purchased this lot and built thereon a substation, which reduced high voltage electricity to a current suitable for distribution to its customers. The sub-station transformers made a lot of noise during all hours of the day and night and made life miserable for "J" and his family. "J" filed an action against MERALCO to stop the operation of the sub-station and for damages. Decide the case. Answer Page 200 of 391 (b) Meralco must take appropriate measures to reduce to normal sound levels. At the same time, it is also liable to "J" and to the members of "J's" family for damages plus attorney's fees. That sound may constitute an actionable nuisance is not settled (Velasco vs. Manila Electric Co., 40 SCRA 342). However, it must be a noise which affects injuriously the health and comfort of ordinary people to an unreasonable extent. The test, therefore, is whether the health and comfort of "J" and the members of his family are so injuriously affected by the noise in question so that they are subjected to a loss which goes beyond reasonable limits. Applying this test, it is clear that Meralco has not taken the necessary precaution to reduce the intensity level of the noise to normal or reasonable level. Consequently, the noise constitutes an actionable nuisance. 05; Property; possession vs occupation 1997 No. 9: (a) Distinguish between "possession" and "occupation" as these terms are commonly used in Book II and Book III of the Civil Code. Answer: (a) Possession is a real right, while occupation is one of the original modes of acquiring ownership and other real rights. Possession, the holding of a thing or the exercise of a right, does not in itself constitute ownership. Whereas, occupation is a mode of acquiring ownership. There can be possession without ownership. Additional Answer; Possession is the holding of a thing or the enjoyment of a right (Art 532, CC). It can refer to all kinds of property whether with or without an owner while occupation can take place only with respect to property without an owner (Articles 531 & 713). Occupation in itself, when proper, confers ownership but possession does not by itself give rise to ownership. 05; Property; possession; 559 1987 No. 9 Rita owned a valuable painting which was stolen from her house. The theft was duly reported to the authorities. A year after, Rita saw the painting hanging in the office of Mario. When queried, Mario said that he bought the painting in a gallery auction. The painting was positively identified as the one stolen from the house of Rita. (a) Could Rita recover the painting? If so, would Mario be entitled to reimbursement of the amount he paid for the painting? Explain. (b) Supposing Mario bought the painting from a friend, would your answer be the same? Explain. Answer: a. Yes, Rita could recover the painting, but Mario is not entitled to reimbursement because a gallery auction is a public sale (Article 559). b. Yes. insofar as recovery of the painting is concerned. Rita can recover it. No, as regards reimbursement, because, the painting was not bought at a public sale as provided under Article 559 of the Civil Code. Mario is entitled to reimbursement. 05; Property; possession; 559 1978 No. III-b Page 201 of 391 A bought a white gold ring with a two-karat emerald from La Estrella del Norte in 1964. In 1966, said ring was stolen from her house. She traced the ring to B whom she saw was wearing the same at a party in 1967. B, on the other hand, claimed that she bought the ring from her aunt. It was established, however, that it was the very same ring. Can A recover the ring from B, without reimbursing the price paid by B? Reasons for your answer. Answer Yes, A can recover the ring from B, without reimbursing the price paid by B to his aunt. According to the law, one who has lost any movable or has been deprived thereof, may recover it from any possessor without any obligation at all. The only exception is when there is acquisition in good faith by the possessor at a public sale, in which case the owner cannot obtain its return without reimbursing the price paid therefore. The right of the owner to recover personal property acquired in good faith by another is based in his being dispossessed without his consent. The common law principle that where one of two innocent persons must suffer by a fraud perpetrated by another, the law imposes the loss upon the party who by misplaced confidence, has enabled the fraud to be committed, cannot be applied in a case which is covered by an express provision of the Civil Code. Between a common law principle and a statutory provision, the latter must prevail. (NOTE: The above answer is based on De Garcia vs. Court of Appeals, 37 SCR A 129.) 05; Property; possession; 559 1998 No IV Using a falsified manager's check, Justine, as the buyer, was able to take delivery of a second hand car which she had just bought from United Car Sales. Inc. The sale was registered with the Land Transportation Office. A week later, the seller learned that the check had been dishonored, but by that time, Justine was nowhere to be seen. It turned out that Justine had sold the car to Jerico, the present possessor who knew nothing about the falsified check. In a suit by United Car Sales, Inc. against Jerico for recovery of the car, plaintiff alleges it had been unlawfully deprived of its property through fraud and should, consequently, be allowed to recover it without having to reimburse the defendant for the price the latter had paid. Should the suit prosper? [5%] Answer: The suit should prosper as to the recovery of the car. However, since Jerico was not guilty of any fraud and appears to be an innocent purchaser for value, he should be reimbursed for the price he paid. This is without prejudice to United Car Sales, Inc. right of action against Justine. As between two Innocent parties, the party causing the Injury should suffer the loss. Therefore, United Car Sales, Inc. should suffer the loss. Alternative Answer: Yes, the suit will prosper because the criminal act of estafa should be deemed to come within the meaning of unlawful deprivation under Art. 559, Civil Code, as without It plaintiff would not have parted with the possession of its car. Another Answer: No, the suit will not prosper. The sale is valid and Jerico is a buyer in good faith. Another Answer: Page 202 of 391 Under the law on Sales, when the thing sold is delivered by the seller to the buyer without reservation of ownership, the ownership is transferred to the buyer. Therefore in the suit of United Car Sales, Inc. against Jerico for the recovery of the car, the plaintiff should not be allowed to recover the car without reimbursing the defendant for the price that the latter paid. (EDCA Publishing and Distributing Corp. vs. Santos, 184 SCRA 614, April 26, 1990) 05; Property; possession; 559 1986 No. 5: Mahinhin lost her diamond ring when the bus she was riding on was help up by a band of brigands who divested the passengers of all their money and valuables. The ring found its way to the Pasanglaan pawnshop, where one of the robbers had pawned it. The pawnshop, in due time, foreclosed the pledge and sold the ring at public auction to Maya-man, the highest bidder. Three years after the loss, Mahinhin was able to trace the ring to Mayaman and demanded that the latter give the ring back to her. Mayaman refused, saying that he had acquired the ring in good faith. Who was the better right to the ring? Explain, Answer: Mahinhin, the owner, still has a better right to the ring. She had been unlawfully deprived of the ring, therefore, not even an innocent purchaser in a pawnshop can claim a better right. However, Mayaman has to be reimbursed. Answer — Art. 559 will apply as the owner was unlawfully deprived on her right and may recover it even from an innocent purchaser. However, as the buyer bought it in a public sale, Mahinhin is duty bound to reimburse the price paid before she can recover the ring. Answer - Mahinhin has the better right to the ring, but he must reimburse Mayaman the price paid by the latter in acquiring said ring at the public auction sate. True, Mayaman acquired the ring in good faith. His possession, therefore, is equivalent to a title. But then, Mahinhin was unduly deprived of the ring. Under the law, one who has lost any movable or who has been unduly deprived thereof can recover the movable even from a possessor in good faith. The only exception the law allows is when the possessor had acquired the movable in good faith at a public sale. In such case, the owner cannot obtain its return without reimbursing the price paid therefor. As held in so many notable decisions, even the common law principle (that were one of two innocent persons must suffer by fraud perpetrated by another, the law imposes the loss upon the party who, by misplaced confidence, has enabled the fraud to be committed) cannot be applied in a case which is covered by an express provision of the Civil Code. Between a common law principle and a statutory provision, the latter must prevail. (Note — The above answer is based on Art, 559 of the Civil Code and on a long line of decisions of the Supreme Court.) 05; Property; possession; 559 1993 No. 5; A, about to leave the country on a foreign assignment, entrusted to B his brand new car and its certificate of registration. Falsifying A's signature. B sold A's car to C for P200,000.00. C then registered the car in his name. To complete the needed amount, C borrowed P100.000.00 from the savings and loan association in his office, constituting a chattel mortgage on the car. For failure of C to pay the amount owed, the savings and loan association filed in the RTC a complaint for collection with application for issuance of a writ of replevin to obtain possession of Page 203 of 391 the vehicle so that the chattel mortgage could be foreclosed. The RTC issued the writ of replevin. The car was then seized from C and sold by the sheriff at public auction at which the savings and loan association was the lone bidder. Accordingly, the car was sold to it. A few days later, A arrived from his foreign assignment. Learning of what happened to his car, A sought to recover possession and ownership of it from the savings and loan association. Can A recover his car from the savings and loan association? Explain your answer. Answer: Under the prevailing rulings of the Supreme Court, A can recover the car from the Savings and Loan Association provided he pays the price at which the Association bought the car at a public auction. Under that doctrine, there has been an unlawful deprivation by B of A of his car and, therefore, A can recover it from any person in possession thereof. But since it was bought at a public auction in good faith by the Savings and Loan Association, he must reimburse the Association at the price for which the car was bought. Alternative Answer: Yes, A can recover his car from the Savings and Loan Association. In a Chattel Mortgage, the mortgagor must be the absolute owner of the thing mortgaged. Furthermore, the person constituting the mortgage must have the free disposal of the property, and in the absence thereof, must be legally authorized for the purpose. In the case at bar, these essential requisites did not apply to the mortgagor B, hence the Chattel Mortgage was not valid. 05; Property; possession; 559 1977 No. IX-a A entrusted a diamond ring to S to sell. S pledged it instead in a pawnshop. Can A recover the ring from the pawnshop? Can the pawnshop insist on payment first of the loan from A? Answer Yes, A can recover the ring from the pawnshop. The Civil Code is explicit. The legitimate owner who had lost the thing or who had been unduly deprived thereof can recover it even from a possessor in good faith. (Art. 559.) And the pawnshop owner cannot insist on reimbursement of the amount for which the ring was pledged. In the first place, the contract of pledge is void because the pledgor is not the owner of the thing pledged; neither has he been duly authorized to pledge it. Consequently, an essential requisite is lacking (Art. 2085). In the second place, because of enormous profits, pawnshop operators must necessarily assume the corresponding risks. The things pledged might have been robbed, stolen or embezzled. Hence, the pawnshop cannot insist, on reimbursement of the amount for which the thing was pledged, (Dizon vs. Suntay, 47 SCRA 160.) 05; Property; possession; squatting 1980 No. III (a) Several families had erected their houses on the river bank portion of a lot owned by "X". The construction of the houses was with the knowledge and consent of "X". The latter did not collect rentals. About five years later, "X" being in need of the lot, demanded that the families vacate. The latter refused contending that they were not squatters considering that "X" had allowed their occupation and is, therefore, estopped from ejecting them. Page 204 of 391 1) Are the families "squatters"? 2) Do they have a right to continue in the occupation of the land? Answer (a) (1) Whether they are possessors by tolerance or squatters, will not make any difference. Legally, they are squatters. A squatter is one who settles on land of another without any legal authority. This definition contemplates a right that owes its source from the law, and which accordingly may be protected by and under the law. In the instant case, it is clear that the families settled down on the land without any legal authority (Buonavente vs. Melchor, 89 SCR A 222), (2) They do not have a right to continue in the occupation of the land. Their occupation by mere tolerance, can not give rise to a right that the law should protect in their favor as against the true legal owner. Besides, the owner "X" is certainly not barred, under any known principle of law, either by estoppel or waiver, to demand that the law should protect in their favor as against the true legal owner. (Ibid). (Note: The Committee respectfully recommends that an answer based on the provisions of Arts. 449, 450 and 451 of the Civil Code should also be considered as correct. Objectively considered, the families in the above problem are builders or possessors in bad faith. They cannot assert any right as against the legal owner.) 05; Property; real vs personal property 1995 No. 13: Salvador, a timber concessionaire, built on his lot a warehouse where he processes and stores his timber for shipment. Adjoining the warehouse is a furniture factory owned by NARRAMIX of which Salvador is a majority stockholder. NARRAMIX leased space In the warehouse where it placed its furniture-making machinery. 1. How would you classify the furniture-making machinery as property under the Civil Code? Explain. 2. Suppose the lease contract between Salvador and NARRAMIX stipulates that at the end of the lease the machinery shall become the property of the lessor, will your answer be the same? Explain. Answer: 1. The furniture-making machinery is movable property because it was not installed by the owner of the tenement. To become immovable under Art. 415 (5) of the NCC, the machinery must be installed by the owner of the tenement. Alternative Answer: It depends on the circumstances of the case. If the machinery was attached in a fixed manner, in such a way that it cannot be separated from the tenement without breaking the material or causing deterioration thereof, It is Immovable property [Art. 415 (3), NCC]. However, if the machinery can be transported from place to place without Impairment of the tenement to which they were fixed, then it is movable property. [Art. 416 (4), NCCJ 2. It is immovable property. When there is a provision in the lease contract making the lessor, at the end of the lease, owner of the machinery installed by the lessee, the said machinery is considered to have been installed by the lessor through the lessee who acted merely as his agent. Having been installed by the owner of the tenement, the machinery became immovable .under Art. 415 of the NCC. (Davao Sawmill v. Castillo 61 Phil. 709) 05; Property; real vs personal property Page 205 of 391 1997 No. 6: Pedro is the registered owner of a parcel of land situated in Malolos. Bulacan. In 1973, he mortgaged the land to the Philippine National Bank (PNB) to secure a loan of PI00.000.00. For Pedro's failure to pay the loan, the PNB foreclosed on the mortgage in 1980, and the land was sold at public auction to PNB for being the highest bidder. PNB secured title thereto in 1987. In the meanwhile, Pedro, who was still in possession of the land, constructed a warehouse on the property. In 1988, the PNB sold the land to Pablo, The Deed of Sale was amended in 1989 to include the warehouse. Pedro, claiming ownership of the warehouse, files a complaint to annul the amended Deed of Sale before the Regional Trial Court of Quezon City, where he resides, against both the PNB and Pablo. The PNB filed a motion to dismiss the complaint for improper venue contending that the warehouse is real property under Article 415(1) of the Civil Code and therefore the action should have Instead been filed in Malolos, Bulacan. Pedro claims otherwise. The question arose as to whether the warehouse should be considered as real or as personal property. If consulted, what would your legal advice be? Answer: The warehouse which is a construction adhered to the soil is an immovable by nature under Art. 415 (1). and the proper venue of any case to recover ownership of the same, which is what the purpose of the complaint to annul the amended Deed of Sale amounts to, should be the place where the property is located, or the RTC of Bulacan. Additional Answers; 1. Buildings are always immovable property, and even in the instances where the parties to a contract seem to have dealt with it separate and apart from the land on which it stood in no wise does it change its character as immovable property. A building is an immovable even if not erected by the owner of the land. The only criterion Is union or incorporation with the soil. (Ladera vs. Hodges (CA) 48 O.G. 4374) (Reyes and Puno, Outline of Philippine Civil Law, Vol. 2. p.7) 2. The warehouse built by Pedro on the mortgaged property Is real property within the context of Article 415 of the New Civil Code, Although it was built by Pedro after the foreclosure sale without the knowledge and consent of the new owner which makes him a builder in bad faith, this does not alter the character of the warehouse as a real property by incorporation. It is a structure which cannot be removed without causing injury to the land. So, my advice to Pedro is to file the case with the RTC of Bulacan, the situs of the property, (Note: If the examinee does not mention that the structure was built by a builder In bad faith, it should be given full credit). 05; Property; real vs personal property 1983 No. 5 To secure the payment to B of a loan, A, the owner of a lot, executed a chattel mortgage on the building he erected thereon as well as on some newly bought machinery stored therein. Thereafter, a judgment was rendered against A in favor of C who had the building and machinery levied upon to satisfy the judgment, Is the chattel mortgage binding on C? Explain, Answer It is, in so far as the machinery is concerned but void as to the building. The machinery is movable property as it does not appear that A introduced it in the Page 206 of 391 building in connection with any industry or works being carried on therein, while the building is immovable property and consequently cannot be the subject of a chattel mortgage, 05; Property; rights of a property owner; limitations 1977 No. III-a The rights of a person over his property are: a. The right to enjoy, which includes: (1) Jus utendi, or the right to use; (2) Jus fruendi, or the right to enjoy the fruits; (3) Jut abutendi, or the right to consume the by its use. b. The right to dispose (jus disponendi)t or the right to alienate, encumber, transform, or even to destroy the property. c. The right to vindicate (jus vindicandi), or the right of action available to the owner to recover the property against the holder or possessor. (Art 428, Civil Code). The limitations upon the right of ownership are: (1) General limitations imposed by the State for its benefit, such as the power of eminent domain, the police power, and the power of taxation; (2) Specific limitations imposed by law, such as legal servitudes; (3) Limitations imposed by the party transmitting the property either by contract or by will; (4) Limitations imposed by the owner himself, such as voluntary servitudes, mortgages, pledges, and lease rights; and (5) Inherent limitations arising from conflict with other rights, such as those caused by contiguity of property. We might add to the above enumeration the Constitutional prohibition regarding acquisition of private land by aliens and other Constitutional limitations. 05; Property; usufruct 1997 No. 8: On 1 January 1980, Minerva, the owner of a building, granted Petronila a usufruct over the property until 01 June 1998 when Manuel, a son of Petronila, would have reached his 30th birthday. Manuel, however, died on 1 June 1990 when he was only 26 years old. Minerva notified Petronila that the usufruct had been extinguished by the death of Manuel and demanded that the latter vacate the premises and deliver the same to the former. Petronila refused to vacate the place on the ground that the usufruct in her favor would expire only on 1 June 1998 when Manuel would have reached his 30th birthday and that the death of Manuel before his 30th birthday did not extinguish the usufruct. Whose contention should be accepted? Answer: Petronila's contention is correct. Under Article 606 of the Civil Code, a usufruct granted for the time that may elapse before a third person reaches a certain age shall subsist for the number of years specified even if the third person should die unless there is an express stipulation in the contract that states otherwise. In the case at bar, there is no express stipulation that the consideration for the usufruct is Page 207 of 391 the existence of Petronila's son. Thus, the general rule and not the exception should apply in this case. Alternative Answer; This is a usufruct which is clearly intended for the benefit of Manuel until he reaches 30 yrs. of age. with Petronila serving only as a conduit, holding the property in trust for his benefit. The death of Manuel at the age of 26. therefore, terminated the usufruct. 05; Property; usufruct 1989 No. 6: (1) What is USUFRUCT? How is usufruct extinguished? Answer: Usufruct gives a right to enjoy the property of another with the obligation of preserving its form and substance, unless the title constituting it or the law otherwise provides. Usufruct is extinguished: (1) appears; By the death of the usufructuary, unless a contrary intention clearly (2) By the expiration of the period for which it was constituted, or by the fulfillment of any resolutory condition provided in the title creating the usufruct; (3) By merger of the usufruct and ownership in the same person; (4) By renunciation of the usufructuary; (5) By the total loss of the thing in usufruct; (6) By the termination of the right of the person constituting the usufruct; (7) By prescription. RECOMMENDATION OF THE COMMITTEE: An enumeration of four (4) should be given full credit. 05; Property; usufruct 1977 No VI-c What are the requisites of usufruct? How is it constituted and how do you distinguish it from ownership and from lease? What are the modes of extinguishing them? Answer There are two requisites of usufruct — the essential and the accidental. The essential requisite is the right to enjoy the property of another, while the accidental requisite is the obligation of preserving the form and substance of such property. The latter is accidental, because the title constituting the usufruct or the law may otherwise provide as in the case of abnormal usufruct. (4 Manresa 322.) A usufruct may be constituted: (1) by law, (2) by the will of private persons expressed in acts inter vivos, (3) by the will of private persons expressed in a last will and testament, and (4) by prescription (Art. 563, Civil Code). While ownership has for its attributes (1) the right to enjoy (jus utendi, jus fruendi, jus abutendi), (2) the right to dispose (jus disponendi), and (3) the right to vindicate or recover the property (jus vindicandi), usufruct is limited merely to the enjoyment of the property (jus utendi and jus fruendi), Page 208 of 391 Usufruct is distinguished from lease as follows : (1) As to nature of right — Usufruct is always a real right, whereas lease becomes a real right only when registered; (2) As to constitution — Usufruct is constituted by law, by the will of private persons expressed in acts inter vivos or in a last will and testament, and by prescription, whereas lease is as a rule constituted by contract; (3) As to the -person constituting it —- In usufruct the person constituting it is the owner, whereas in lease the person constituting it need not be the owner; (4) As to extent — Usufruct includes the right to use and to enjoy the fruits (jus utendi and jus fruendi) of the thing, whereas lease is more limited; (5) As to duration — There is no limitation to the duration of a usufructuary right, whereas there is a limitation to the duration of a lease right; (6) As to repairs — The usufructuary is responsible for ordinary repairs, whereas the lessee is not; and (7) As to taxes — The usufructuary is responsible for taxes on the fruits, whereas in lease the lessee is not. Usufruct is extinguished: (1) By the death of the usufructuary, unless a contrary intention clearly appears; (2) By the expiration of the period for which it was constituted, or by the fulfillment of any resolutory condition provided in the title creating the usufruct; (3) By merger of the usufruct and ownership in the same person; (4) By renunciation of the usufructuary; (6) By the total loss of the thing in usufruct; (6) By the termination of the right of the person constituting the usufruct; and (7) By prescription, (Art. 603, Civil Code). 05; Property; usufruct 1978 No. IV-a A. sold a parcel of land with two (2) buildings thereon to B for P50,000 subject to the condition that A shall receive from B by way of life pension one-third (1/3) of the rents of the two (2) buildings. Without B's fault, the two (2) buildings were totally destroyed by fire. B now alleges that the right to receive a life pension was extinguished upon the loss of the buildings. Is such a contention valid? Reasons for your answer. Answer The right to receive a life pension was not extinguished upon the loss of the buildings. It must be observed that under the condition agreed upon by and between A and B that A shall receive from B by way of life pension one-third (1/3) of the rents of the two buildings, in reality, what was created was a life usufruct, with A as usufructuary, over the two buildings under an arrangement whereby A shall always be entitled during his lifetime to one-third (1/3) of the rents of the two buildings. Now, it is well-settled that rents constitute earnings of both buildings and the land on which it is constructed. There can be land without building, but there can be no building without land. Therefore, in the case before us, the things in usufruct are the two buildings and the land on which the buildings are constructed. Under our law, in Page 209 of 391 order that there will be an extinguishment of the usufruct, it is essential that the things in usufruct must be totally lost or destroyed. Here, there was no total loss. The land remains intact. Therefore, pursuant to the law on usufructs, A the usufructuary, shall now have the right to make use of one-third of the land and the materials. This is a temporary measure calculated to maintain the usufruct alive until the very things destroyed are reconstructed or replaced. (NOTES: The above answer is based on Arts. 603. No. 5, and 607, Civil Code, and on Vda, de Albur vs. Fabie, 106 Phil. 855, which is almost identical to the above problem.) 05; Property; usufruct 1979 No. XVII On June 5, 1960, DP delivered possession of his house and lot in the Poblacion of Polo, Bulacan to AB who in turn delivered to the former possession of his 2-hectare rice land. Both properties were unregistered. They executed a document entitled "Barter" which, among others provided that both parties shall enjoy the material possession of their respective properties; that neither party shall encumber, alienate or dispose of their respective properties as bartered without the consent of the other; and that DP shall be obliged to return the property to AB when the latter's son shall attain majority and decide to return DP's property. After AB's death and his son S attained majority in 1977, the latter demanded for the return of the 2 hectares of rice land which had then increased tremendously in value. DP refused and 30 S filed an action for recovery of the land. Will the action prosper? Why? Answer Yes, the action will prosper. The stipulations in the barter agreement are clear. All that the parties intended was to transfer the material possession and use of the subject properties to the other. There was, therefore, no conveyance of their right of ownership. In fact the parties retained their right to, alienate their right of ownership, a right which is an element of ownership. What was, therefore, transferred was merely their right of usufruct. But then, the document also says that DP shall be obliged to return the property to AB when the latter's son shall attain majority and decide to return DP's property. The mutual agreement, therefore, was subject to a resolutory condition the happening of which would extinguish or terminate their right of usufruct over the subject properties. The facts are clear. Said condition has already been fulfilled. Page 210 of 391 06; LTD 1988 No. 14: (a) 1) Is title to registered land subject to prescription? Explain your answer. 2) How about the right of the registered owner to recover possession, is it equally imprescriptible? Why? 3) What effect has the equitable principle of laches on the imprescriptibility of Torrens Title? Explain. (b) In passing upon the registrability of a document sought to be registered, what formal requisites is the Register of Deeds charged to determine, under his responsibility, whether or not they have been complied with? Answer: (a) 1) No because under Section 47, P.D, 1529, no title to registered land in derogation of that of the registered owner shall be acquired by prescription or adverse possession. A similar provision is found in the Civil Code. The reason is that once a piece of land is registered under the Torrens System, it operates as a notice to the whole world. All persons are bound by it. No one can plead ignorance of the registration. (2) The right to recover the land from another person holding it is equally imprescriptible, the reason being that possession is a mere consequence of ownership. (3) While a Torrens Title is imprescriptible, under certain exceptional circumstances, it may yield to the equitable principle of laches. In other words, certain circumstances such as inaction or utter neglect on the part of the owner and the intervention of rights by third parties may, for reasons of equity, convert the claim of imprescriptibility into a stale demand, (Mejia vs. Gamponia, 100 Phil. 277; Miguel vs. Catalino, G.R. L-23072, Nov. 29, 1968; Heirs of Batiog Lacamen vs. Heirs of Laruan, G.R. L-27058, July 31,1985). (b) To be registerable, a voluntary document affecting registered land must be sufficient in law. (Section 51, P.D. 1529) Sufficiency refers to both substance and form. As to form, it is the ROD's responsibility to check such items as the full name and signature of vendor or grantor, the marital consent of the wife if the land sold is conjugal, the full name, nationality, the civil status, the name of spouse, if married, the resident and postal address of the grantee. If the grantee is a corporation, the deed must be accompanied with the Articles of Incorporation, a board resolution authorizing the corporation to buy and another resolution of the Board naming the corporate officer authorized to execute and sign the contract. This is not to mention the proper observance of the requirements in the acknowledgment portion of the deed. 06; LTD; acquisition of lands; citizenship requirement 2003 No XVIII. In 1970, the spouses Juan and Juana de la Cruz, then Filipinos, bought the parcel of unregistered land in the Philippines on which they built a house which became their residence. In 1986, they migrated to Canada and became Canadian citizens. Thereafter, in 1990, they applied, opposed by the Republic, for the registration of the aforesaid land in their names. Should the application of the spouses de la Cruz be granted over the Republic’s opposition? Why? 5% SUGGESTED ANSWER: Page 211 of 391 Yes, the application should be granted. As a rule, the Constitution prohibits aliens from owning private lands in the Philippines. This rule, however, does not apply to the spouses Juan and Juana de la Cruz because at the time they acquired ownership over the land, albeit imperfect, they were still Filipino citizens. The application for registration is a mere confirmation of the imperfect title which the spouses have already acquired before they became Canadian citizens. (Republic v. CA, 235 SCRA 567 [1994]). 06; LTD; Act 3344 1994 No. 3; 3) How do you register now a deed of mortgage of a parcel of land originally registered under the Spanish Mortgage Law? Alternative Answers; 3) a) After the Spanish Mortgage Law was abrogated by P.D. 892 on February 16.1976, all lands covered by Spanish titles that were not brought under the Torrens system within six 16] months from the date thereof have been considered as "unregistered private lands." Thus, a deed of mortgage affecting land originally registered under the Spanish Mortgage Law is now governed by the system of registration of transactions or instruments affecting unregistered land under Section 194 of the Revised Administrative Code as amended by Act No. 3344. Under this law, the instrument or transaction affecting unregistered land is entered in a book provided for the purpose but the registration thereof is purely voluntary and does not adversely affect third persons who have a better right. b) By recording and registering with the Register of Deeds of the place where the land is located, in accordance with Act 3344. However, P.D. 892 required holders of Spanish title to bring the same under the Torrens System within 6 months from its effectivity on February 16, 1976. 06; LTD; amendment of entries in a certificate of title 1981 No. 17 In a verified petition filed before the Court of First Instance, sitting as a land registration Court, and under the summary proceeding for amendment or alteration outlined in section 112 of the Land Registration Act, husband "H", being the registered owner of three parcels of land, sought to strike out the words "married to W" appearing in the said titles, and to place in Lieu thereof the word "single" on the ground that the phrase "married to W" was entered by reason of clerical error or oversight. Opposition was filed by "W" who alleged that she is the legal wife of "H", and that the insertion of the phrase "married to W" was not the result of clerical error but was the voluntary act of "H". May the Court of First Instance, sitting as a land registration Court, continue to take cognizance of the case and resolve the issue posed? Explain. Answer The Court of First Instance, sitting as a Land Registration Court, cannot continue to take cognizance of the case and resolve the issue posed. It is apparent that the Court, sitting as a land registration court, cannot alter the description of the civil status of the petitioner in the transfer certificates of title in question. It will have to receive evidence and determine the civil status of said petitioner. This requires a full-dressed trial, thus rendering the summary proceeding envisaged in Sec. 112 of Act 496 inadequate. Page 212 of 391 Therefore, the remedy of "W" against her husband "H" or of "H" against his wife "W" would be to thresh out the question of their status in a separate and independent action filed for that purpose. (Note: The above answer is based on Martinez vs. Evangelista, L-26399, Jan. 31,1981.) However, the Committee respectfully recommends that a contrary answer may also be considered as a correct answer. Under Section 2 of P.O. No. 1529, the jurisdiction of a Court of First Instance acting as a Land Registration Court has been broadened. 06; LTD; annotation of lis pendens 2001 No XX Mario sold his house and lot to Carmen for P1 million payable in five (5) equal annual installments. The sale was registered and title was issued in Carmen's name. Carmen failed to pay the last three installments and Mario filed an. action for collection, damages and attorneys fees against her. Upon filing of the complaint, he caused a notice of lis pendens to be annotated on Carmen's title. Is the notice of lis pendens proper or not? Why? (5%) SUGGESTED ANSWER.. The notice of lis pendens is not proper for the reason that the case filed by Mario against Carmen is only for collection, damages, and attorney's fees. Annotation of a lis pendens can only be done in cases involving recovery of possession of real property, or to quiet title or to remove cloud thereon, or for partition or any other proceeding affecting title to the land or the use or occupation thereof. The action filed by Mario does not fall on anyone of these. 06; LTD; annotations; classification 1985 No. 13 B) A bought a house and lot in a subdivision, subject to the condition, annotated on the certificate of title, that they shall be used for residential purposes only. Ten years later, A sold the property to B who converted it into a restaurant. The owner demanded its closure but B refused alleging (1) that although he subsequently came to know the title issued to him bears such an annotation, he was unaware of it at the time of the sale as the seller did not tell him so and the deed of sale in his favor makes no mention of it; (2) that his lot has been re-classified by ordinance as commercial; and (3) that it has in fact become commercial because of its proximity to some stores and a shopping center in an adjoining subdivision. Rule on the validity of said defenses. Answers: B. 1. There are now 3 decisions of the Intermediate Appellate Court. The first decision was incorporated in 1984 in the Silverio case. The facts are identical. There was a legitimate exercise of the police power. The stipulation in the contract of sale which was properly annotated at the back of the title will have to give way to that legitimate exercise of the police power of the State. Besides (under Art. 1266 of the New Civil Code), we have here an obligation which cannot be complied with because of a legal impossibility by reason of that ordinance. The classification supersedes the annotation. 2. Fulfillment of the obligation is prevented by a law and therefore no longer tenable. Since continuing with the house as residential is. no longer possible, the annotation is no longer valid. Page 213 of 391 3. The owner has dominion over his property, but he is bound by fair restrictions on the title since he is charged with constructive notice of such restrictions. 4. The contention that B was unaware, at the time of the sale, of the encumbrance in the certificate of title is not valid since the annotation on the certificate is constructive notice to him. 5. The contention that the property became commercial because of its proximity to some stores and a shopping center is not sufficient legal justification for a breach of the agreement. 06; LTD; foreshore lands 2000 No VIII b) Regina has been leasing foreshore land from the Bureau of Fisheries and Aquatic Resources for the past 15 years. Recently, she learned that Jorge was able to obtain a free patent from the Bureau of Agriculture, covering the same land, on the basis of a certification by the District Forester that the same is already "alienable and disposable". Moreover, Jorge had already registered the patent with the Register of Deeds of the province, and he was issued an Original Certificate of Title for the same. Regina filed an action for annulment of Jorge's title on the ground that it was obtained fraudulently. Will the action prosper? (2%) SUGGESTED ANSWER: An action for the annulment of Jorge's Original Certificate of Title will prosper on the following grounds: (1) Under Chapter IX of C .A, No. 141, otherwise known as the Public Land Act, foreshore lands are disposable for residential, commercial, industrial, or similar productive purposes, and only by lease when not needed by the government for public service. (2) If the land is suited or actually used for fishpond or aquaculture purposes, it comes under the Jurisdiction of the Bureau of Fisheries and Aquatic Resources (BFAR) and can only be acquired by lease. (P.D. 705) (3) Free Patent is a mode of concession under Section 41, Chapter VII of the Public Land Act, which is applicable only for agricultural lands. (4) The certificate of the district forester that the land is already "alienable and disposable" simply means that the land Is no longer needed for forest purposes, but the Bureau of Lands could no longer dispose of it by free patent because It Is already covered by a lease contract between BFAR and Regina. That contract must be respected. (5) The free patent of Jorge is highly Irregular and void ab initio, not only because the Bureau has no statutory authority to issue a free patent over a foreshore area, but also because of the false statements made in his sworn application that he has occupied and cultivated the land since Jury 4, 1945, as required by the free patent law. Under Section 91 of the Public Land Act, any patent concession or title obtained thru false representation is void ab initio. In cases of this nature. It is the government that shall institute annulment proceedings considering that the suit carries with it a prayer for the reversion of the land to the state. However, Regina is a party in interest and the case will prosper because she has a lease contract for the same land with the government. 06; LTD; homestead patents; void sale 1999 No XII. Page 214 of 391 In 1950, the Bureau of Lands issued a Homestead patent to A, Three years later, A sold the homestead to B. A died in 1990, and his heirs filed an action to recover the homestead from B on the ground that its sale by their father to the latter is void under Section 118 of the Public Land Law. B contends, however, that the heirs of A cannot recover the homestead from him anymore because their action has prescribed and that furthermore, A was in pari delicto. Decide. (5%) ANSWER: The sale of the land by A to B 3 years after issuance of the homestead patent, being in violation of Section 118 of the Public Land Act, is void from its inception. The action filed by the heirs of B to declare the nullity or inexistence of the contract and to recover the land should be given due course. B's defense of prescription is untenable because an action which seeks to declare the nullity or inexistence of A contract does not prescribe. (Article 1410; Banaga vs. Soler, 2 8CRA 765) On the other hand, B's defense of pari delicto is equally untenable. While as a rule, parties who are in pari delicto have no recourse against each other on the principle that a transgressor cannot profit from his own wrongdoing, such rule does not apply to violations of Section 118 of the Public Land Act because of the underlying public policy in the said Act "to conserve the land which a homesteader has acquired by gratuitous grant from the government for himself and his family". In keeping with this policy, it has been held that one who purchases a homestead within the five-year prohibitory period can only recover the price which he has paid by filing a claim against the estate of the deceased seller (Labrador vs. Delos Santos 66 Phil. 579) under the principle that no one shall enrich himself at the expense of another. Applying the pari delicto rule to violation of Section 118 of the Public Land Act, the Court of Appeals has ruled that "the homesteader suffers the loss of the fruits realized by the vendee who in turn forfeits the improvement that he has introduced into the land." (Obot vs. SandadiUas, 69 OG, April 35, 1966} FIRST ALTERNATIVE ANSWER: The action to declare the nullity of the sale did not prescribe (Art. 1410}, such sale being one expressly prohibited and declared void by the Public Lands Act [Art. 1409, par. (7)]. The prohibition of the law is clearly for the protection of the heirs of A such that their recovering the property would enhance the public policy regarding ownership of lands acquired by homestead patent (Art. 1416). The defense of pari delicto is not applicable either, since the law itself allows the homesteader to reacquire the land even if it has been sold. SECOND ALTERNATIVE ANSWER: Prescription does not arise with respect to actions to declare a void contract a nullity (Article 1410). Neither is the doctrine of pari delicto applicable because of public policy. The law is designed for the protection of the plaintiff so as to enhance the public policy of the Public Land Act to give land to the landless. If the heirs are not allowed to recover, it could be on the ground of laches inasmuch as 40 years had elapsed and the owner had not brought any action against B especially if the latter had improved the land. It would be detrimental to B if the plaintiff is allowed to recover. 06; LTD; homestead; reversion 1978 No. IX-a Page 215 of 391 Free Patent No. V-347 was issued in favor of A for the land in question. Subsequently, Original Certificate of Title No. P-25G7 was issued in A's name on June 15, 1976. On July 30, 1977, the Republic of the Philippines at the instance of the Bureau of Forestry filed a complaint to declare the free patent and the Original Certificate of Title null and void on the ground that the land covered thereby is forest land. Decide the case, with reasons. Answer The annulment and cancellation of a homestead patent and the consequent reversion of the property to the State are matters between the State and the grantee or his heirs. Hence, the government may take appropriate steps to annul the grant and assert title to the homestead. Assuming then that the action in the instant case is for reversion of the land, obviously, it will still prosper. The period of prescription is five years, not one year, to be counted from the time the right to such action has accrued However, if the action merely seeks a review of the homestead award, the period of prescription is one year. (NOTE: The above answer is based on decided cases, more specifically, Lopez vs. Padilla, L-27559, May 18, 1972, De la Cruz vs. Corpus, 62 Off. Gaz. 49, p 9271, Dec. 5, 1966, CA. The period of prescription of five years is based on Art. 1149, Civil Code.) 06; LTD; homestead; right to repurchase 1978 No. IX-b A's father was the original homesteader of a parcel of land covered by a homestead patent issued on June 3, 1932. On April 27, 1958, A's father sold said property to B. On July 15, 1962, A's father died. On March 15, 1963, A sought to repurchase the property from B. B refused. Can A repurchase the property? Give reasons for your answer. Answer: Yes, A can repurchase the property. According to the Public Land Law, every conveyance of land acquired under the free patent or homestead provisions, when proper, shall be subject to repurchase by the applicant, his widow, or legal heirs, within a period of five years from the date of conveyance. The homestead was sold by the applicant on April 27, 1958. A, the legal heir of the applicant sought to repurchase the land on March 15, 1963. It is evident that he is exercising his right of legal redemption within the prescribed period of five years. (NOTE: The above answer is based on Section 119 of the Public Land Law and on decided cases.) 06; LTD; homestead; right to repurchase 1978 No. XI-b A's father was the original homesteader of a parcel of land covered by a homestead patent issued on June 3, 1932. On April 27, 1968, A's father sold said property to B. On July 15, 1962, A's father died. On March 15, 1963, A sought to repurchase the property from B. B refused. Can A repurchase the property? Give reasons for your answer. Answer Sec. 119, CA 141, provides that every conveyance of land acquired under the free patent or homestead provisions, when proper, shall be subject to repurchase by the applicant, his widow, or legal heirs, within a period of five years from the date of the conveyance. Page 216 of 391 Reason: To preserve and keep in the family of the homesteader (or patentee) that portion of public land which the State had gratuitously given to him. It is in keeping with the fundamental idea to hold that the right to repurchase exists not only when the original homesteader makes the conveyance, but also when it is made by his widow or heirs (Pascua vs. Talens, 89 Phil. 792). 06; LTD; increase of area by accession 1989 No. 7: (2) Subsequent to the original registration of a parcel of land bordering a river, its area was increased by accession. This additional area was not included in the technical description appearing on the Torrens Certificate of Title having been acquired subsequent to the registration proceedings. May such additional area be acquired by third persons thru prescription? Give your reasons. Answer: The Land Registration Law provides that no title in derogation of the registered owner may be acquired by adverse possession or acquisitive possession. Since the law refers to registered lands, the accession mentioned in this question may be acquired by a third person through adverse possession or acquisitive possession. Alternative Answer: If the accession is man made, then it cannot be considered as private property. It belongs to the public domain, and, therefore, cannot be acquired by adverse possession or acquisitive possession. 06; LTD; indefeasibility of title 1983 No. 18 A filed in the regional trial court an application for registration (confirmation of title) of a parcel of land in his name. B filed a motion to dismiss A's application on the ground that the court has no jurisdiction to entertain it, the land having already been registered in his name after the grant to him of a homestead patent. Should the motion to dismiss be granted? Why? Answer: The motion should be granted. Since a patent and a certificate of title to the land have already been issued, it has become registered property, the title thereto is indefeasible and is no longer subject to the jurisdiction of a Court of First Instance acting as a land registration court. 06; LTD; IPV; adverse claims 1998 No XIX, Section 70 of Presidential Decree No. 1529, concerning adverse claims on registered land, provides a 30-day period of effectivity of an adverse claim, counted from the date of its registration. Suppose a notice of adverse claim based upon a contract to sell was registered on March 1, 1997 at the instance of the BUYER, but on June 1, 1997, or after the lapse of the 30-day period, a notice of levy on execution in favor of a JUDGMENT CREDITOR was also registered to enforce a final judgment for money against the registered owner. Then, on June 15, 1997 there having been no formal cancellation of his notice of adverse claim, the BUYER pays to the seller-owner the agreed purchase price in full and registers the corresponding deed of sale. Because the annotation of the notice of levy is carried over to the new title in his name, the BUYER brings an action against the JUDGMENT CREDITOR to cancel such annotation, but the latter claims that his lien Page 217 of 391 is superior because it was annotated after the adverse claim of the BUYER had ipso facto ceased to be effective. Will the suit prosper? [5%] Answer: The suit will prosper. While an adverse claim duly annotated at the back of a title under Section 7O of P.D. 1529 is good only for 30 days, cancellation thereof is still necessary to render it ineffective, otherwise, the inscription thereof will remain annotated as a lien on the property. While the life of adverse claim is 3O days under P.D. 1529, it continuous to be effective until it Is canceled by formal petition filed with the Register of Deeds. The cancellation of the notice of levy is justified under Section 108 of P.D. 1529 considering that the levy on execution can not be enforced against the buyer whose adverse claim against the registered owner was recorded ahead of the notice of levy on execution. 06; LTD; IPV; buyer in good faith; laches 1983 No. 17 In 1930, A sold a piece of land to B and delivered his certificate. of title thereto. B occupied the land but did not have A's title cancelled and a new one issued in his name. Upon B's death in 1950, the land passed to his son, C, who continued in possession thereof. In 1970, A's two sons, X and Y, secured the cancellation of the title of their father who had died, and the issuance of two titles, one in X's name, covering 1/2 of the land, and the other in Y's name, embracing the other half. X thereafter sold his part to Z, who was unaware of the antecedents. Is C bound to deliver to Z the portion sold to the latter by X, and to Y the part embraced in Y's title? Answer C must deliver the portion sold to Z, he being a buyer in good faith but not the part embraced in Y's title, he having lost the right to recover it by laches. 06; LTD; IPV; collateral attack 1977 No. XVII-a A owned a titled lot which he sold to B, who sold it to C, who obtained in certificate in his own name, remained in possession, and paid taxes. Later, A managed to obtain from the court an order for the cancellation of C's title and the issuance of a title in her own name, on the false claim that B had resold the property to her, but she lost the deed of sale. The Court acted as a cadastral court. 6 years late, C sued to have this ownership recognized and to cancel the title in the name of X, who had bought the lot from A. X resisted, invoking prescription and the indefeasibility of his title. Decide, stating reasons. Answer C should prevail. C's title to the land being evidenced by a Torrens title issued to him who is legally presumed to have acquired it in good faith, nothing to the contrary being shown, his title by law is indefeasible. The mere fact that his action for recognition of his ownership was instituted after six years cannot militate against him inasmuch as his title by provision of law is imprescriptible. The Cadastral Court which ordered the cancellation of C's title and the issuance of a title in the name of A based on a false claim that B had resold the property to her but she lost the deed of sale, had no power to issue such an order. It Page 218 of 391 had no power to determine such highly controversial issue which should have been threshed out in an ordinary civil action. On the other hand, X who bought the lot from A, could not have acquired any better right than A under any standard of justice, and since C is the owner by prior registration, the latter's title cannot be defeated by any subsequent title or by any collateral attack. 06; LTD; IPV; constructive trust 1980 No. IX (b) "HH", "II", and "JJ" inherited from their parents a large parcel of land. "HH" and "II" went abroad to reside in Canada. In their absence, "JJ"' applied for the registration of the whole land in his name only. In due time, "JJ" obtained a Torrens Title for the land. When "H" and "H" returned from Canada after seven years, they found out what "JJ" did and sued him for their respective shares. "JJ" contended that the decree of title can no longer be reviewed or changed because of the lapse of more than one year from its issuance. In whose favor would you decide? Answer (b) My decision is in favor of "HH" and "II". In reality, the action commenced by plaintiffs against defendant is an action for reconveyance of their respective shares in the subject property based on the constructive trust recognized and sanctioned by the Civil Code which declares that if the property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. Since the obligation is created by law, the action commenced by the beneficiaries against him shall prescribe and the period of prescription is ten years which shall be counted from the time of the discovery of the fraud. When did the plaintiff discover the fraud committed by defendant? Under the constructive notice rule, they are deemed to have discovered the fraud as of the date the trustee set up in himself a title adverse to the title of the beneficiaries. Normally, this would be the date the trustee ("JJ") obtained his Torrens Title. Since the instant action was commenced seven years after the issuance of said Title, it is obvious that it was commenced in time. (NOTE: See: Art. 1456, Civil Code; Gerona vs. De Guzman, 11 SCRA 163; Fabian vs. Fabian, 22 SCRA 231; Cuaycong vs. Cuaycong, 21 SCRA 1192; De-la Cerna vs. De la Cerna, 72 SCRA 515; Jaramil vs. CA, 78 SCRA 420; Duque vs. Domingo, 80 SCRA 654; Nacalaban vs. CA 80 SCRA 428.) 06; LTD; IPV; effect of entry in day book; acquisitive prescription; laches 1998 No XX. In 1965, Renren bought from Robyn a parcel of registered land evidenced by a duty executed deed of sale. The owner presented the deed of sale and the owner's certificate of title to the Register of Deeds. The entry was made in the daybook and corresponding fees were paid as evidenced by official receipt. However, no transfer of certificate of title was Issued to Renren because the original certificate of title in Robyn's name was temporarily misplaced after fire partly gutted the Office of the Register of Deeds. Meanwhile, the land had been possessed by Robyn's distant cousin, Mikaelo, openly, adversely and continuously in the concept of owner since 1960. It was only in April 1998 that Renren sued Mikaelo to recover Page 219 of 391 possession. Mikaelo invoked a) acquisitive prescription and b) laches, asking that he be declared owner of the land. Decide the case by evaluating these defenses, [5%] Answer: a) Renren's action to recover possession of the land will prosper. In 1965, after buying the land from Robyn, he submitted the Deed of Sale to the Registry of Deeds for registration together with the owner's duplicate copy of the title, and paid the corresponding registration fees. Under Section 56 of PD No. 1529, the Deed of Sale to Renren is considered registered from the time the sale was entered in the Day Book (now called the Primary Entry Book). For all legal intents and purposes, Renren is considered the registered owner of the land. After all, it was not his fault that the Registry of Deeds could not issue the corresponding transfer certificate of title. Mikaelo's defense of prescription can not be sustained. A Torrens title is imprescriptible. No title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession. (Section 47, P.D. No, 1529) The right to recover possession of registered land likewise does not prescribe because possession is just a necessary incident of ownership. b) Mikaelo's defense of laches, however, appears to be more sustainable. Renren bought the land and had the sale registered way back in 1965. From the facts, it appears that it was only in 1998 or after an inexplicable delay of 33 years that he took the first step asserting his right to the land. It was not even an action to recover ownership but only possession of the land. By ordinary standards, 33 years of neglect or inaction is too long and maybe considered unreasonable. As often held by the Supreme Court, the principle of imprescriptibility sometimes has to yield to the equitable principle of laches which can convert even a registered land owner's claim into a stale demand. Mikaelo's claim of laches, however, is weak insofar as the element of equity is concerned, there being no showing in the facts how he entered into the ownership and possession of the land. 06; LTD; IPV; effect of laches 1977 No. XVII-b A sold a titled land to L in 1928, but the sale was not approved by the Provincial Governor as required by law, vendor and vendee being non-Christians. L took immediate possession and introduced improvements, but the title remained in A's name. After 30 years the heirs of L sued the heirs of A to have the land registered in their name. What grounds can be invoked by the defendants to prevail? How should the case be decided? Answer In order that they shall prevail, defendants can invoke the doctrine of "stale demands" or laches. The case should be decided in favor of defendants. As held by the Supreme Court in a similar case, even granting plaintiffs' proposition that no prescription lies against their predecessor's recorded title, their passivity and inaction for more than 30 years justify the defendants in setting up the defense of laches. All of the four elements of laches are present. As a result, the plaintiffs' action must be considered barred. (Miguel vs. Catalino, 26 SCRA 243; Lacamen vs. Laruan, 65 SCRA 605) 06; LTD; IPV; foreclosure of registered lands; prescription Page 220 of 391 1989 No. 12: (2) Does an action to foreclose a real estate mortgage affecting registered land under the Torrens System prescribe? Give your reasons. Answer: Even if the property given as collateral is covered by a Torrens Title, the right to foreclose a real estate mortgage thereon prescribes. This is really an action to enforce collection of the loan. 06; LTD; IPV; forged deed 1991 No 15: Bruce is the registered owner, of a parcel of land with a building thereon and is in peaceful possession thereof. He pays the real estate taxes and collects the rentals therefrom. Later, Catalino, the only brother of Bruce, filed a petition where he, misrepresenting to be the attorney-in-fact of Bruce and falsely alleging that the certificate of title was lost, succeeded in obtaining a second owner's duplicate copy of the title and then had the same transferred in his name through a simulated deed of sale in his favor. Catalino then mortgaged the property to Desiderio who had the mortgage annotated on the title. Upon learning of the fraudulent transaction, Bruce filed a complaint against Catalino and Desiderio to have the title of Catalino and the mortgage in favor of Desiderio declared null and void. Will the complaint prosper, or will the title of Catalino and the mortgage to Desiderio be sustained? Answer. The complaint for the annulment of Catalino's Title will prosper. In the first place, the second owner's copy of the title secured by him from the Land Registration Court is void ab initio, the owner's copy thereof having never been lost, let alone the fact that said second owner's copy of the title was fraudulently procured and improvidently issued by the Court. In the second place, the Transfer Certificate of Title procured. by Catalino is equally null and void, it having been issued on the basis of a simulated or forged Deed of Sale. A forged deed is an absolute nullity and conveys no title. The mortgage in favor of Desiderio is likewise null and void because the mortgagor is not the owner of the mortgaged property. While it may be true that under the "Mirror Principle" of the Torrens System of Land Registration, a buyer or mortgagee has the right to rely on what appears on the Certificate of Title, and in the absence of anything to excite suspicion, is under no obligation to look beyond the certificate and investigate the mortgagor's title, this rule does not find application in the case at hand because here. Catalino's title suffers from two fatal infirmities, namely: 1. The fact that it emanated from a forged deed of a simulated sale; 2. The fact that it was derived from a fraudulently procured or improvidently issued second owner's copy, the real owner's copy being still intact and in the possession of the true owner, Bruce. The mortgage to Desiderio should be cancelled without prejudice to his right to go after Catalino and/or the government for compensation from the assurance fund. 06; LTD; IPV; forged deed as a root of a title 1989 No. 16: Page 221 of 391 (2) "A" is the owner of a registered land. The Torrens Title is entrusted to "B" his clerk secretary, who forges "A's" signature on a deed of sale of said land in his (B's) favor. A new title is issued in the name of "B," upon registration. Does "B" have a valid title over the land? If "B" sells the property to "C", does the latter acquire a valid title over it? Answer: A forged deed is an absolute nullity and conveys no title but it can be the root of a title. If title to the land has been transferred to a party based upon a forged deed, and later on after the issuance of such title the property is transferred to another who is an innocent purchaser for value, then the latter acquires a valid title. 06; LTD; IPV; forged deed as a root of title 1985 No. 14 B) After finding on a bus an envelope containing two Torrens certificates of title in A's name, B posing as A and forging his signature, sold the two parcels of land described in the Titles to X who bought them in good faith and for value and to whom transfer certificates were issued in his name. He then conveyed one parcel to Y, a bonafide purchaser for value, while the other was levied upon to satisfy the judgment against X. Who has a better right to the aforementioned parcels of land, A, Y, or the judgment creditor? Discuss. Answer; B) 1. I believe A retains ownership of both parcels of land. A forged deed of sale is an absolute nullity and, therefore, conveys no title. A deed of sale executed by an impostor has no legal force and effect. Registration of the deed and the consequent registration and issuance of a transfer certificate of title, even to an innocent purchaser, will not cure the infirmity. It is also an established rule that a forged deed can be the root of a good title. This can happen where title has been registered in the name of the forger and he later transfers or mortgages the same to an innocent third party for value. In this case, the third party who relied on what appears in the certificate of title should be protected. (Duran vs. Caspar vs. I AC, Tangco, GR No. L-64159, Sept 10, 1985. However, in the instant case, no title was ever transferred or registered in the name of the forger. The rule discussed above does not apply. Therefore, A never lost his right and can recover the land from Y and the judgment creditor. 2. Y has a better right than A over the parcel of land he bought from X in good faith and for value, because Y bought the land from the registered owner X, and therefore Y is a purchaser for value and in good faith, whose title is protected by P.D. 1529. 3. A has a better right than the judgment creditor over the parcel of land still registered in the name of X, because X is not a purchaser for value and in good faith, as defined in P.D. 1529, having bought the land not from the registered owner A but from forger B, such that X has no title thereto and the levy on execution thereon to satisfy a judgment creditor of X has no force and effect against A. 4. Y should be protected because he is a purchaser in good faith as he bought it from X who has a transfer certificate of title in his name. This is in consonance with the "chain of title" doctrine. With respect to the creditor who sought to levy the judgment against X who was the buyer from the forger, the creditor stands in the same shoes as X who did not acquire a better right than his vendor because he did not buy it from the Page 222 of 391 registered owner but from a forger B. Therefore, A is entitled to the other parcel over the judgment creditor. 06; LTD; IPV; forged document as a root of a certificate of title 1976 No. VII-a A. is the owner of a registered parcel of land. The Torrens title is entrusted to B, his clerk. B forges A's signature on the deed of sale of said land in his (B's) favor. A new title is issued in the name of B. Does B have a valid title over the land? Explain. Answer B does not have a valid title over the land. A, whose signature was forged, cannot be deprived of his property inasmuch as by express provision of Section 55 of Act 496, any subsequent registration procured by a forged deed shall be null and void While it may be true that the law gives an innocent purchaser for value some protection, greater protection is given to the registered owner. B in this case is not such an innocent purchaser inasmuch as he himself is the forger. 1976 No. VII-b If B sells the property to C, does C acquire a valid title over it? Explain. Answer C, the subsequent buyer, acquires a valid title over the land in question. This is a case of a void title ripening into a valid title inasmuch as C qualifies as an innocent purchaser for value, assuming of course that he meets the three requisites, namely: 1. That he did not know of any flaw or defect of the title of B; 2. That he paid a reasonable price; and 3. That he acquired the property from the person who stands in .the records as the registered owner (Rivera vs. Tirona) or; C may acquire a valid title if he is an innocent purchaser because C bought it from the registered owner B, who has a certificate of title in his name. C need not inquire into the validity of the title of B. The land registration certificate protects an innocent purchaser for value who relies on a certificate of title by providing that he takes it free from all liens and encumbrances not noted in the title. 1976 No. VII-c Does the delivery of the title from A to B constitute an act of negligence? Explain. Answer If the clerk is charged, as part of his duty, with the filing and keeping of documents safely, then the entrusting of that document to him in the course of his normal duties is not an act of negligence. However, for purposes of recovering from the Assurance Fund, it is necessary that the owner must be free from any fault. Here his loss was occasioned by a breach of trust, for which reason he would not be entitled to compensation from the Assurance Fund, 06; LTD; IPV; forgery; innocent purchaser for value 1999 No X. The spouses X and Y mortgaged a piece of registered land to A, delivering as well the OCT to the latter, but they continued to possess and cultivate the land, giving 1/2 of each harvest to A in partial payment of their loan to the latter, A, Page 223 of 391 however, without the knowledge of X and Y, forged a deed of sale of the aforesaid land in favor of himself, got a TCT in his name, and then told the land to B, who bought the land relying on A's title, and who thereafter also got a TCT in his name, It was only then that the spouses X and Y learned that their land had been titled in B's name. May said spouses file an action for reconveyance of the land in question against b? Reason. (5%) ANSWER: The action of X and Y against B for reconveyance of the land will not prosper because B has acquired a clean title to the property being an innocent purchaser for value. A forged deed is an absolute nullity and conveys no title. The fact that the forged dead was registered and a certificate of title was issued in his name, did not operate to vest upon A ownership over the property of X and V. The registration of the forged deed will not cure the infirmity. However, once the title to the land is registered in the name of the forger and title to the land thereafter falls into the hands of an innocent purchaser for value, the latter acquires a clean title thereto. A buyer of a registered land is not required to explore beyond what the record in the registry indicates on its face in quest for any hidden defect or inchoate right which may subsequently defeat his right thereto. This is the "mirror principle'* of the Torrens system which makes it possible for a forged deed to be the root of a good title. Besides, it appears that spouses X and Y are guilty of contributory negligence when they delivered this OCT to the mortgagee without annotating the mortgage thereon. Between them and the innocent purchaser for value, they should bear the loss. ALTERNATIVE ANSWER: If the buyer B, who relied on the teller A's title, was not aware of the adverse possession of the land by the spouses X and Y, then the latter cannot recover the property from B. B has in his favor the presumption of good faith which can only be overthrown by adequate proof of bad faith. However, nobody buys land without seeing the property, hence, B could not have been unaware of such adverse possession. If after learning of such possession, B simply closed his eyes and did nothing about it, then the suit for reconveyance will prosper as the buyer's bad faith will have become evident. 06; LTD; IPV; fraud in the procurement of patent 2000 No XII In 1979, Nestor applied for and was granted a Free Patent over a parcel of agricultural land with an area of 30 hectares, located in General Santos City. He presented the Free Patent to the Register of Deeds, and he was issued a corresponding Original Certificate of Title (OCT) No. 375, Subsequently, Nestor sold the land to Eddie. The deed of sale was submitted to the Register of Deeds and on the basis thereof, OCT No, 375 was cancelled and Transfer Certificate of Title (TCT) No. 4576 was issued in the name of Eddie. In 1986, the Director of Lands filed a complaint for annulment of OCT No, 375 and TCT No. 4576 on the ground that Nestor obtained the Free Patent through fraud. Eddie filed a motion to dismiss on the ground that he was an innocent purchaser for value and in good faith and as such, he has acquired a title to the property which is valid, unassailable and Indefeasible. Decide the motion. (5%) SUGGESTED ANSWER: Page 224 of 391 The motion of Nestor to dismiss the complaint for annulment of O.C.T. No. 375 and T.C.T. No. 4576 should be denied for the following reasons: 1) Eddie cannot claim protection as an innocent purchaser for value nor can he interpose the defense of indefeasibility of his title, because his TCT is rooted on a void title. Under Section 91 of CA No. 141, as amended, otherwise known as the Public Land Act, statements of material facts in the applications for public land must be under oath. Section 91 of the same act provides that such statements shall be considered as essential conditions and parts of the concession, title, or permit issued, any false statement therein, or omission of facts shall ipso facto produce the cancellation of the concession. The patent issued to Nestor in this case is void ab initio not only because it was obtained by fraud but also because it covers 30 hectares which is far beyond the maximum of 24 hectares provided by the free patent law. 2) The government can seek annulment of the original and transfer certificates of title and the reversion of the land to the state. Eddie's defense is untenable. The protection afforded by the Torrens System to an innocent purchaser for value can be availed of only if the land has been titled thru judicial proceedings where the issue of fraud becomes academic after the lapse of one (1) year from the issuance of the decree of registration. In public land grants, the action of the government to annul a title fraudulently obtained does not prescribe such action and will not be barred by the transfer of the title to an innocent purchaser for value. 06; LTD; IPV; free patents; jurisdiction of Director of Lands 1978 No. XI-a Free Patent No. V-347 was issued in favor of A for the land in question. Subsequently, Original Certificate of Title No. P-2507 was issued in A's name on June 15, 1976. On July 30, 1977, the Republic of the Philippines at the instance of the Bureau of Forestry filed a complaint to declare the free patent and the Original Certificate of Title null and void on the ground that the land covered thereby is forest land. Decide the case with reasons. Answer Any patent issued by the Director of lands to private parties is void ab initio, for lack of jurisdiction. The indefeasibility of the Torrens title that may be issued pursuant to such patent will not be against the State in an action for reservation of land covered thereby when such land is a part of a public forest reservation, Neither prescription will lie against the State in such cases in accordance with Art. 1108, par. 4 of the Civil Code. Even granting that Torrens Title can no longer be reopened under the Land Registration Act, still the land covered thereby be reconveyed to the State in action for reconveyance under Sec. 101 of CA 141. (RP vs. Samson Animas, L-37682, May 29t 1974; 70 OG. 32) Another reason. Act 496 only aim to confirm ownership. So where land involved is not susceptible of private appropriation, no private ownership may be confirmed. 06; LTD; IPV; government lands 1975 No. XX If there is any error in a Torrens title in the sense that it included government lands, who can properly question the error and how? Answer The State can question the error by filing an action to annul the certificate of title, if the entire land covered by the title, is government property or, for reversion of Page 225 of 391 property to the State (Republic v. Ananias, March 29, (1974), This remedy, of course, is available only when the property involved is not the patrimonial property of the state because the final decree of registration became incontrovertible, even as against the government. In one case where public navigable river was included in the Torrens title, the court held that the title may be attacked collaterally or directly by the State (Martinez v. Court of Appeals, April 29, 1976). 06; LTD; IPV; innocent purchaser for value 2001 No XVII Cesar bought a residential condominium unit from High Rise Co. and paid the price in full. He moved into the unit, but somehow he was not given the Condominium Certificate of Title covering the property. Unknown to him, High Rise Co. subsequently mortgaged the entire condominium building to Metrobank as security for a loan of P500 million. High Rise Co. failed to pay the loan and the bank foreclosed the mortgage. At the foreclosure sale, the bank acquired the building, being the highest bidder. When Cesar learned about this, he filed an action to annul the foreclosure sale insofar as his unit was concerned. The bank put up the defense that it relied on the condominium certificates of title presented by High Rise Co., which were clean. Hence, it was a mortgagee and buyer in good faith. Is this defense tenable or not? Why? (5%.) SUGGESTED ANSWER: Metrobank's defense is untenable. As a rule, an innocent purchaser for value acquires a good and a clean title to the property. However, it is settled that one who closes his eyes to facts that should put a reasonable man on guard is not an innocent purchaser for value. In the present problem the bank is expected, as a matter of standard operating procedure, to have conducted an ocular inspection, of the promises before granting any loan. Apparently, Metrobank did not follow this procedure. otherwise, it should have discovered that the condominium unit in question was occupied by Cesar and that fact should have led it to make further inquiry. Under the circumstances. Metrobank cannot be considered a mortgagee and buyer in good faith. 06; LTD; IPV; innocent purchaser for value 1986 No. 19. Through fraud, Manukso was able to obtain in his name a transfer certificate of title over a piece of land belonging to his ward, Kamusmusan. Subsequently, Manukso donated the property to Hinandugan, who, completely unaware of Manukso's prior fraudulent conduct, obtained a Torrens Title in his name. Five years after the registration in Hinandugan's name, Kamusmusan filed an action for reconveyance. Will the action prosper? Explain, Answer: The Torrens system protects only an innocent purchaser for value who relies on the certificate of title of the vendor. Hinandugan is not a purchase but a mere donee. Hence the real owner Kamusmusan can recover the land from Hinandugan on the ground of constructive trust, which the court ruled prescribes in 10 years. Answer - The rule of Constructive Trust will not apply if the property is in the hands of a third person who got the property for value and in good faith Since under our taw, love and affection are sufficient consideration, it falls under the term "value" because under our law "value" is not limited to material consideration. Hence, Page 226 of 391 Hernandez is a third person within the meaning of the law. The action will not prosper* Answer - No. The conclusive presumption of ownership covered by a Torrens title, cannot be defeated except if such registration is obtained by fraud. But the fraud that was perpetrated by the guardian is not the fraud that can defeat the collusiveness of ownership under a Torrens title. Furthermore, the fact that the registration had subsisted for five years strengthens the indefeasibility of the title of the registrant. The ward can perhaps go after his guardian for the damage or loss caused to him, but not the person who obtained the Torrens title, 06; LTD; IPV; lis pendens 1995 No, 4: Rommel was issued a certificate of title over a parcel of land in Quezon City. One year later Rachelle, the legitimate owner of the land, discovered the fraudulent registration obtained by Rommel. She filed a complaint against Rommel for reconveyance and caused the annotation of a notice of lis pendens on the certificate of title issued to Rommel. Rommel now invokes the indefeasibility of his title considering that one year has already elapsed from its issuance. He also seeks the cancellation of the notice of Lis pendens. 1. Will Rachelle's suit for reconveyance prosper? Explain. 2. May the court cancel the notice of lis pendens even before final judgment is rendered? Explain. Answer: 1. Yes.. 2. A notice of Lis pendens may be canceled even before final Judgment upon proper showing that the notice is for the purpose of molesting or harassing the adverse party or that the notice of lis pendens is not necessary to protect the right of the party who caused it to be registered. (Section 77, P.D. No. 1529) In this case, it is given that Rachelle is the legitimate owner of the land in question. It can be said, therefore, that when she filed her notice of lis pendens her purpose was to protect her interest in the land and not Just to molest Rommel. It is necessary to record the Lis pendens to protect her interest because if she did not do it, there is a possibility that the land will fall into the hands of an innocent purchaser for value and in that event, the court loses control over the land making any favorable judgment thereon moot and academic. For these reasons, the notice of lis pendens may not be canceled. 06; LTD; IPV; mirror principle 1990 No 2: In 1950's, the Government acquired a big landed estate in Central Luzon from the registered owner for subdivision into small farms and redistribution of bonafide occupants, F was a former lessee of a parcel of land, five hectares in area. After completion of the resurvey and subdivision, F applied to buy the said land in accordance with the guidelines of the implementing agency. Upon full payment of the price in 1957, the corresponding deed of absolute sale was executed in his favor and was registered, and in 1961, a new title was issued in his name. In 1963, F sold the said land to X; and in 1965 X sold it to Y, New titles were successively issued in the names of the said purchasers. Page 227 of 391 In 1977, C filed an action to annul the deeds of sale to F,X and Y and their titles, on the ground that he (C) had been in actual physical possession of the land, and that the sale to F and the subsequent sales should be set aside on the ground of fraud. Upon motion of defendants, the trial court dismissed the complaint, upholding their defenses of their being innocent purchasers for value, prescription and laches. Plaintiff appealed. (a) Is the said appeal meritorious? Explain your answer (b) Suppose the government agency concerned joined C in filing the said action against the defendants, would that change the result of the litigation? Explain. Answer; (a) The appeal is not meritorious. The trial court ruled correctly in granting defendant's motion to dismiss for the following reasons: 1. While there is the possibility that F, a former lessee of the land was aware of the fact that C was the bona fide occupant thereof and for this reason his transfer certificate of title may be vulnerable, the transfer of the same land and the issuance of new TCTs to X and Y who are innocent purchasers for value render the latter's titles indefeasible. A person dealing with registered land may safely rely on the correctness of the certificate of title and the law will not in any way oblige him to go behind the certificate to determine the condition of the property in search for any hidden defect or inchoate right which may later invalidate or diminish the right to the land. This is the mirror principle of the Torrens System of land registration. 2. The action to annul the sale was instituted in 1977 or more than (10) years from the date of execution thereof in 1957, hence, it has long prescribed. 3. Under Sec 45 of Act 496, “the entry of a certificate of title shall be regarded as an agreement running with the land, and binding upon the applicant and all his successors in title that the land shall be and always remain registered land. A title under Act 496 is indefeasible and to preserve that character, the title is cleansed anew with every transfer for value (De Jesus v City of Manila; 29 Phil. 73; Laperal v City of Manila, 62 Phil 313; Penullar v PNB 120 S 111). (b) Even if the government joins C, this will not alter the outcome of the case so much because of estoppel as an express provision in Sec 45 of Act 496 and Sec 31 of PD 1529 that a decree of registration and the certificate of title issued in pursuance thereof “shall be conclusive upon and against all persons, including the national government and all branches thereof, whether mentioned by name in the application or not.” 06; LTD; IPV; notice of lis pendens; transferee pendente lite 2002 No XI. Sancho and Pacifico are co-owners of a parcel of land. Sancho sold the property to Bart. Pacifico sued Sancho and Bart for annulment of the sale and reconveyance of the property based on the fact that the sale included his one-half pro-indiviso share. Pacifico had a notice of lis pendens annotated on the title covering the property and ordered the cancellation of the notice of lis pendens. The notice of lis pendens could not be cancelled immediately because the title over the property was with a bank to which the property had been mortgaged by Bart. Pacifico appealed the case. While the appeal was pending and with the notice of lis pendens still uncancelled, Bart sold the property to Carlos, who immediately caused the cancellation of the notice of lis pendens, as well as the issuance of a new title in his name. Page 228 of 391 Is Carlos (a) a purchaser in good faith, or (b) a transferee pendente life? If your answer is (a), how can the right of Pacifico as co-owner be protected? Explain. (5%) SUGGESTED ANSWER: A. Carlos is a buyer in bad faith. The notice of lis pendens was still annotated at the back of the title at the time he bought the land from Bart. The uncancelled notice of lis pendens operates as constructive notice of its contents as well as interests, legal or equitable, included therein. All persons are charged with the knowledge of what it contains. In an earlier case, it was held that a notice of an adverse claim remains effective and biding notwithstanding the lapse of the 30 days from its inscription in the registry. This ruling is even more applicable in a lis pendens. Carlos is a transferee pendente lite insofar as Sancho’s share in the coownership in the land is concerned because the land was transferred to him during the pendency of the appeal. A. Pacifico can protect his right as a co-owner by pursuing his appeal; asking the Court of Appeals to order the re-annotation of the lis pendens on the title of Carlos; and by invoking his right of redemption of Bart’s share under Articles 1620 of the New Civil Code. ALTERNATIVE ANSWER: A. Carlos is a purchaser in good faith. A possessor in good faith has been defined as “one who is unaware that there exists a flaw which invalidates his acquisition of the thing” (Art. 526, NCC). Good faith consists in the possessor’s belief that the person from whom he received the thing was the owner of the same and could convey his title. In the case [at bar], in question, while Carlos bought the subject property from Bart while a notice of lis pendens was still annotated thereon, there was also an existing court order canceling the same. Hence, Carlos cannot be considered as being “aware of a flaw which invalidates [their] the acquisition of the thing” since the alleged flaw, the notice of lis pendens, was already being ordered cancelled at the time of the purchase. On this ground alone, Carlos can already be considered a buyer in good faith. (Po Lam v. Court of Appeals, 347 SCRA 86, [2000]). B. To protect his right over the subject property, Pacifico should have timely filed an action for reconveyance and reinstated the notice of lis pendens. 06; LTD; IPV; reconveyance 1995 No, 4: Rommel was issued a certificate of title over a parcel of land in Quezon City. One year later Rachelle, the legitimate owner of the land, discovered the fraudulent registration obtained by Rommel. She filed a complaint against Rommel for reconveyance and caused the annotation of a notice of lis pendens on the certificate of title issued to Rommel. Rommel now invokes the indefeasibility of his title considering that one year has already elapsed from its issuance. He also seeks the cancellation of the notice of Lis pendens. 1. Will Rachelle's suit for reconveyance prosper? Explain. Answer: 1. Yes, Rachelle's suit will prosper because all elements for an action for reconveyance are present, namely: a. Rachelle is claiming dominical rights over the same land. Page 229 of 391 b. Rommel procured his title to the land by fraud. c. The action was brought within the statutory period of four (4) years from discovery of the fraud and not later than ten (10} years from the date of registration of Rommel's title. d. Title to the land has not passed into the hands of an innocent purchaser for value. Rommel can invoke the indefeasibility of his title if Rachelle had filed a petition to reopen or review the decree of registration. But Rachelle instead filed an ordinary action in personam for reconveyance. In the latter action, indefeasibility is not a valid defense because, in filing such action, Rachelle is not seeking to nullify nor to impugn the indefeasibility of Rommel's title. She is only asking the court to compel Rommel to reconvey the title to her as the legitimate owner of the land. Alternative Answer; Yes. The property registered is deemed to be held in trust for the real owner by the person in whose name it is registered. The Torrens system was not designed to shield one who had committed fraud or misrepresentation and thus holds the title in bad faith. (Walstrom v. Mapa Jr., (G .R 38387, 29 Jan. 1990) as cited in Martinez, D., Summary of SC Decisions, January to June, 1990, p. 359], 06; LTD; IPV; registration as the operative act of conveying the land 1984 No. 19 A had a piece of land which was registered under the Torrens system. He sold it to B, but the sale was not registered Subsequently, C, a creditor of A, obtained an attachment on the property, which was duly registered with the Registry of Deeds. B thereafter attempted to register the sale in his favor. The Register of Deeds was willing to do so and issue a transfer certificate of title to B, subject however, to the condition that the attachment in favor of C would be inscribed on the new certificate of title. B objected, contending that at the time of the attachment of the property, A was no longer the owner thereof and therefore had no more interest therein which could be attached. Is B's posture valid? Explain. Answer: A. Furnished by Office of Justice Palma No. Section 51 of the Property Registration Decree provides that the execution of a deed shall not take effect as a conveyance, or bind the land, except as between the parties. The act of registration shall be the operative act to convey or affect the land as far as third parties are concerned. Hence, since C has secured a lien by attachment prior to registration, the rights acquired by B under the deed shall be subject to the rights of C and cannot be enforced until after the rights of C have been fully satisfied. B. Comments and Suggested Answer We agree with the answer of the Bar Examiner, 06; LTD; IPV; remedies; prescriptive period 2003 No XX. Louie, before leaving the country to train as a chef in a five-star hotel in New York, U.S.A., entrusted to his first-degree cousin Dewey an application for registration, under the Land Registration Act, of a parcel of land located in Bacolod City. A year later, Louie returned to the Philippines and discovered that Dewey registered the land and obtained an Original Certificate of Title over the property in his Dewey’s name. Compounding the matter, Dewey sold the land to Huey, an Page 230 of 391 innocent purchaser for value. Louie promptly filed an action for reconveyance of the parcel of land against Huey. (a) Is the action pursued by Louie the property remedy? (b) Assuming that reconveyance is the proper remedy, will the action prosper if the case was filed beyond one year, but within ten years, from the entry of the decree of registration? 5% SUGGESTED ANSWER: (a) An action for reconveyance against Huey is not the proper remedy, because Huey is an innocent purchaser for value. The proper recourse is for Louie to go after Dewey for damages by reason of the fraudulent registration and subsequent sale of the land. If Dewey is insolvent, Louie may file a claim against the Assurance Fund (Heirs of Pedro Lopez v. De Castro 324 SCRA 591 [2000] citing Sps. Eduarte v. CA, 323 Phil. 462, 467 [1996]). (b) Yes, the remedy will prosper because the action prescribes in ten (10) years, not within one (1) year when a petition for the reopening of the registration decree may be filed. The action for reconveyance is distinct from the petition to reopen the decree of registration (Grey Alba v. De la Cruz, 17 Phil. 49 [1910}). There is no need to reopen the registration proceedings, but the property should just be reconveyed to the real owner. The action for reconveyance is based on implied or constructed trust, which prescribes in ten (10) years from the date of issuance of the original certificate of title. This rule assumes that the defendant is in possession of the land. Where it is the plaintiff who is in possession of the land, the action for reconveyance would be in the nature of a suit for quieting for the title which action is imprescriptible (David v. Malay, 318 SCRA 711 [1999]). 06; LTD; IPV; remedies; reconveyance 1984 No. 18 More than one year had elapsed since the issuance of the final decree of registration when A discovered that his land had been fraudulently registered in the name of his caretaker B. What right of action, if any, does A have and against whom? Explain. Answer: A. Furnished by Office of Justice Palma, The only remedy of A is to bring an action for reconveyance against B, or for damages if the property has passed into the hands of an innocent purchaser for value. Such a complaint would not seek a review of the decree or the reopening of the registration case which is already incontrovertible, but be for the enforcement of a trust. Section 96 of PD No. 1529 provides that nothing in the Act shall be construed to deprive any party of any action which he may have against any person for loss or damage or deprivation of land or any interest therein. It may also be stated that an action by A against B to compel him to convey the property held in B's name to A as the beneficiary, does not prescribe. (Caladiao, et. al. vs. Blas, 119 Phil 969). B. Comments and Suggested Answer We suggest that the following should be accepted as correct answer: Answer No. 1: The only remedy of A is to bring an action for reconveyance against B, or for damages if the property has passed to an innocent purchaser for value (Sec. 96, PD 1529). Such an action would not seek a review of the decree or Page 231 of 391 the reopening of the registration case which is already incontrovertible. Instead, it will be an action for the enforcement of a trust. However, A must institute the action within ten years to be counted from the discovery of the fraud. The fraud is deemed to have been discovered at the moment B set up a title in himself adverse to the title of A. (Note: The doctrine that the action shall prescribe and that the period of prescription is ten years is supported by: Buencamino vs. Matias, 16 SCR A 849; Araneta vs. Perez, 17 SCR A 643; Pascual vs. Meneses,. 20 SCRA 219; Julio vs. Dalandan, 21 SCRA 643; Cuaycong vs. Cuaycong, 21 SCRA 1192; Fabian vs, Fabian, 22 SCRA 231; Bueno vs. Reyes, 27 SCRA 1179; Dela Cerna vs. Dela Cerna 72 SCRA 515; Jaramil vs. CA, 78 SCRA 420; Duque vs. Domingo, 80 SCRA 654; Nacalaban vs. CA, 80 SCRA 428). Answer No. 2: The only remedy of A is to bring an action for reconveyance based on the implied or constructive trust recognized in the Civil Code (Art. 1456, Civil Code) According to the Civil Code, if property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee for the benefit of the person from whom the property comes. It is, however, well-settled that the action shall prescribe after ten years from the discovery of the fraud. It is also wellsettled that the fraud is deemed to have been discovered at the moment the trustee set up a title in himself adverse to the title of the beneficiary. 06; LTD; IPV; reopening of a decree of registration 1992 No 11: What are the essential requisites or elements for the allowance of the reopening or review of a decree of registration? Answer; The essential elements are: (1) that the petitioner has a real or dominical right; (2) that he has been deprived thereof through fraud; (3) that the petition is filed within one (1) year from the issuance of the decree; and (4) that the property has not yet been transferred to an innocent purchaser {Rublico vs. Orellana 30 SCRA 511; Ubudan vs. Gil 45 SCRA 17). Optional extended answer: Petition for review of the Decree of Registration. A remedy expressly provided in Section 32 of P. D. No. 1529 (formerly Section 38. Act 496), this remedy has the following elements: a. The petition must be filed by a person claiming dominical or other real rights to the land registered in the name of respondent. b. The registration of the land in the name of respondent was procured by means of actual, (not just constructive) fraud, which must be extrinsic. Fraud is actual if the registration was made through deceit or any other intentional act of downright dishonesty to enrich oneself at the expense of another. It is extrinsic when it Is something that was not raised, litigated and passed upon in the main proceedings. c. The petition must be filed within one (1) year from the date of the issuance of the decree. d. Title to the land has not passed to an Innocent purchaser for value (Libudan vs. Gil, 45_ SCRA 27, 1972), Rublico vs. Orrelana. 30 SCRA 511, 1969); RP vs. CA, 57 G. R No. 40402. March 16, 1987). 1. The buyer In good faith of a registered parcel of land does not have to look beyond the Torrens title in search for any hidden defect or inchoate right which may Page 232 of 391 later invalidate or diminish his right to what he purchased [Lopez vs. CA, G. R. 49739. January 20, 1989]. 06; LTD; IPV; reopening of a decree of registration 1975 No. XIX What are the grounds justifying the review of a decree of registration? Answer The only ground justifying a review of a decree of registration is fraud, which must be actual and extrinsic. To be considered actual fraud, there must have been an intentional concealment or omission of a fact required by law to be stated in the application or a willful statement of a claim against the truth, either of which is calculated to deceive or deprive another of his legal rights. Extrinsic fraud is employed to deprive a party of his day in court, thereby preventing him from asserting his right to the property registered in the name of the applicant (Cruz v. Navarro, 54 SCRA 109). 06; LTD; IPV; reopening of a decree of registration 1985 No. 14 A) Within one year from the issuance of the decree of registration and certificate of title in A's name, B brought an action for their annulment in the Regional Trial Court on the ground that A obtained them thru fraud. In his answer to the complaint, A alleged that the court had no jurisdiction over the case and averred, by way of counterclaim, that he has just discovered that B succeeded 3 years ago in registering in his name, by false and fraudulent representations, another parcel of land owned and possessed by A. He, therefore, prayed that B's action be dismissed and that he be ordered to transfer his title to him (A). The trial court dismissed both the complaint and counterclaim. Comment on the legality of the order of dismissal. Answer; A) 1. Under Section 32, P.B. 1529, a person who owns a piece of land or any interest therein that was fraudulently registered in another's name is given the right to file a petition to review or reopen the decree of registration not later than one year from the date of entry thereof. This remedy will not lie, however, if title to the land has been transferred to an innocent purchaser for value. The case at hand is denominated as an action for annulment of both the decree and the title, based on fraud. If we treat this case as an ordinary civil action that was filed with the RTC in the latter's capacity as a court of general jurisdiction, I believe that the Court acted correctly in dismissing it, because the proper remedy of the aggrieved party would be a petition for review of the decree which must be filed with the RTC, in its capacity as a land registration court. The reason for this is that the case, in essence, petition for review, a mere continuation of the original proceedings, over which the RTC sitting as a land registration court has exclusive jurisdiction. So, the RTC acted correctly in dismissing the action for lack of jurisdiction. On the other hand, if the case was filed with the RTC in its capacity as a land registration court, I believe the dismissal was in error, because in that capacity it has I in fact exclusive jurisdiction to hear and decide what in essence is a petition for review of the decree. I think mere error in nomenclature of the pleading should not be a ground for dismissal. Page 233 of 391 But as a land registration court, the RTC acted correctly in dismissing the counterclaim of B because in that capacity it enjoys only special and limited jurisdiction and, therefore, it can not take cognizance thereof. The counterclaim for reconveyance of another parcel of land is an action in personam which falls properly within the competence of ordinary civil courts. 2. If the action were brought under the same land registration proceedings that issued the decree, in which event the Regional Trial Court would be acting as a land registration court with special and limited jurisdiction__ a. the dismissal of the complaint is error, for the Regional Trial Court, as a land registration court, has jurisdiction there over; b. the dismissal of the counterclaim is proper, because the same is in the nature of a permissive counterclaim, which is essentially an independent ordinary civil action, over which the Regional Trial Court, acting as a land registration court, has no jurisdiction. 3. If the action were merely an ordinary civil action— a. the dismissal of the complaint is proper, because jurisdiction to annul a decree, brought within one (1) year from its issuance, properly belongs to the Regional Trial Court which issued the decree, acting as a land registration court; b. the dismissal of the counterclaim is error, because the Regional Trial Court, as a court of general jurisdiction, has jurisdiction there over, and since the counterclaim is in the nature of a permissive counterclaim, it can proceed independently and regardless of the dismissal of the complaint. 4. As to the complaint, since it is brought for annulment of the certificate of title on the ground of fraud, a petition for review should be filed in the same registration proceeding within one year from the issuance of the decree on the ground of extrinsic fraud. Since it is brought within one year, dismissal of the action is not proper provided the petitioner proves extrinsic fraud With regard to the counterclaim, this should not be dismissed because it is a permissive counterclaim. 6. The counterclaim was validity dismissed, since it should have been brought in a separate action. The action for annulment was not validly dismissed, having been brought within the one-year period provided in P.D. 1529. It is, of course, understood that the action was filed in the Regional Trial Court which granted the decree of registration, since the facts in the question do not state otherwise. 6. The Regional Trial Court has no jurisdiction over the action for annulment. Within one year from the issuance of the decree of registration, the proper remedy would be an action for a review of the decree by the Court in its capacity as a Land Registration Court. The order, therefore, of .dismissal of the complaint was correctly issued by the Court. The counterclaim, however, should not have been dismissed, since it partook of the nature of an action for reconveyance which can be considered by the RTC. 06; LTD; IPV; reopening of decree of registration 1977 No. XVIII-b Under what circumstances may a decree of registration under Act No, 496 be reviewed? Answer Page 234 of 391 The circumstances under which a decree of registration under Act 496 may be reviewed are: (1) That the petitioner is the owner of the land ordered registered in the name of another, or that his lien or interest therein does not appear in the decree or title issued; (2) that the registration was procured through actual fraud, or that the omission of the lien or interest was fraudulent; (3) that the property has not yet been transferred to an innocent purchaser for value; and (4) that the action is filed within one year from the issuance and entry of the decree of registration. (Cruz vs. Navarro, G.R. No. L-27644, Nov. 29, 1973.) 06; LTD; IPV; reopening of decree of registration 1979 No. XIX X applied for the registration of a 20-hectare piece of land. During the pendency of the registration proceedings, X sold the land to Y for P100,000.00, its then fair market value, and presented the Deed of Sale to the court and testified therein as to the due execution of the same. The registration court therefore rendered a decision ordering the registration of the land in the name of Y. After said decision became final, the land court, upon motion of X, issued a decree on the basis of which an Original Certificate of Title was issued in the name of Y. Alleging that the title should not have been issued in the name of Y and that there was fraud because Y failed to pay him the price of the sale, X moved for reconsideration of the decree ten (10) months after the issuance of the title. Should the motion be granted? Why? Answer The motion should not be granted. It is well-settled that a decree of registration may be set aside only on the ground of fraud in obtaining the same and not on the ground of failure to pay the purchase price. X, therefore, cannot complain of fraud in obtaining the decree of registration It was solely upon his testimony and proof that the land was registered and solely upon his motion that the decree was issued. (Mendoza vs. CA, 84 SCRA 67), The issue of breach of contract by Y should, therefore, be threshed out in the ordinary courts. Question No. XX OP filed in the Office of the Register of Deeds an Affidavit of Adverse Claim wherein he claims ownership of a parcel of land described in the Title issued in the name of JG. The affidavit states that the sale of the land to JG was void because the latter is a Chinese; that OP has been in actual continuous, public, exclusive and uninterrupted possession of the lot for more than ten years and that as a matter of fact he had constructed a house thereon; that no one has claimed from his ownership nor possession nor rental for his occupancy and that therefore, he had acquired the land by prescription; and that whatever right the Chinese registered owner had over the property had prescribed. The Register of Deeds refused to record the adverse claim on the title of JG. Is this refusal correct? Why? Answer The refusal of the Register of Deeds to register the adverse claim of OP on the title of JG, is correct. It is, of course, true that generally, under our Torrens system, the duties of a Register of Deeds are material in character, but then, an adverse claim of ownership based upon prescription and adverse possession cannot be registered because under the Land Registration Law, no title in derogation of that Page 235 of 391 of the registered owner may be acquired by prescription or adverse possession. Hence, the registration of such adverse possession. Hence, the registration of such adverse claim will serve no purpose and cannot validly and legally affect the land in question. (Estella vs. Register of Deeds, 106 Phil. 911). 06; LTD; IPV; sale of unregistered lands 1977 No. XVIII-a A and B sold to C an unregistered lot; the deed was not registered, but C took possession. Later, D obtained a judgment against A and B and the lot in C's possession was levied upon and sold by the Sheriff to D. The Sheriff's sale was registered. All the parties acted in good faith. Who has better rights to the land? Give reasons. Answer C has better rights to the land. It is now well-settled that the rule on double sales in Art. 1544 of the Civil Code applies only to lands covered by a Torrens title. Where the land is not registered under Act No. 496, the rule is different. The reason is that the purchased of unregistered land at a sheriff's sale only steps into the shoes of the judgment debtor, and merely acquires the latter's interest in the property as of the time the property was levied upon, as provided in Sec 35 of Rule 39 of the Rules of Court. (Carumba vs. Court of Appeals. 31 SCRA 558.) 06; LTD; IPV; unregistered land 1991 No 12: Maria Enriquez failed to pay the realty taxes on her unregistered agricultural land located in Magdugo, Toledo City. In 1989, to satisfy the taxes due, the City sold it at public auction to Juan Miranda, an employee at the Treasurer's Office of said City, whose bid at P10,000.00 was the highest. In due time, a final bill of sale was executed in his favor. Maria refused to turn-over the possession of the property to Juan alleging that (1) she had been, in the meantime, granted a free patent and on the basis thereof an Original Certificate of Title was issued to her, and (2) the sale in favor of Juan is void from the beginning in view of the provision in the Administrative Code of 1987 which prohibits officers and employees of the government from purchasing directly or indirectly any property sold by the government for nonpayment of any tax. fee or other public charge. (a) Is the sale to Juan valid? If so, what is the effect of the Issuance of the Certificate of Title to Maria? (b) If the sale is void, may Juan recover the P10,000.00? If not, why not? (c) If the sale is void, did it not nevertheless, operate to divert Maria of her ownership? If it did, who then is the owner of the property? Answer: A. The sale of the land to Juan is not valid, being contrary to law. Therefore, no transfer of ownership of the land was effected from the delinquent taxpayer to him. The original certificates of title obtained by Maria thru a free patent grant from the Bureau of Lands under Chapter VII, CA 141) is valid but in view of her delinquency, the said title Is subject to the right of the City Government to sell the land at public auction. The issuance of the OCT did not exempt the land from the tax sales. Section 44 of P.O. No. 1529 provides that every registered owner receiving a Certificate of Title shall hold the same free from an encumbrances, subject to certain exemptions. Page 236 of 391 B. Juan may recover because he was not a party to the violation of the law. C. No, the sale did not divest Maria of her title precisely because the sale is void. It is as good as if no sale ever took place. In tax sales, the owner is divested of his land initially upon award and issuance of a Certificate of Sale, and finally after the lapse of the 1 year period from date of registration, to redeem, upon execution By the treasurer of an instrument sufficient in form and effects to convey the property. Maria remained owner of the land until another tax sale is to be performed in favor of a qualified buyer. 06; LTD; IPV; use of fraud in aplication of title; prescriptive period for reconveyance 1997 No. 20: On 10 September 1965, Melvin applied for a free patent covering two lots Lot A and Lot B - situated in Santiago, Isabela. Upon certification by the Public Land Inspector that Melvin had been in actual, continuous, open, notorious, exclusive and adverse possession of the lots since 1925. the Director of Land approved Melvin's application on 04 June 1967. On 26 December 1967, Original Certificate of Title (OCT) No. P-2277 was Issued in the name of Melvln. On 7 September 1971, Percival filed a protest alleging that Lot B which he had been occupying and cultivating since 1947 was included in the Free Patent issued in the name of Melvin. The Director of Lands ordered the investigation of Percival's protest. The Special Investigator who conducted the investigation found that Percival had been in actual cultivation of Lot B since 1947. On 28 November 1986, the Solicitor General filed in behalf of the Republic of the Philippines a complaint for cancellation of the free patent and the OCT issued in the name of Melvin and the reversion of the land to public domain on the ground of fraud and misrepresentation In obtaining the free patent. On the same date, Percival sued Martin for the reconveyance of Lot B. Melvin filed his answers interposing the sole defense in both cases that the Certificate of Title issued in his name became incontrovertible and indefeasible upon the lapse of one year from the issuance of the free patent. Given the circumstances, can the action of the Solicitor General and the case for reconveyance filed by Percival possibly prosper? Answer: "If fraud be discovered in the application which led to the Issuance of the patent and Certificate of Title, this Title becomes ipso facto null and void. Thus. In a case where a person who obtained a free patent, knowingly made a false statement of material and essential facts in his application for the same, by stating therein that the lot in question was part of the public domain not occupied or claimed by any other person, his title becomes ipso facto canceled and consequently rendered null and void." "It is to the public Interest that one who succeeds In fraudulently acquiring title to public land should not be allowed to benefit therefrom and the State, through the Solicitor General, may file the corresponding action for annulment of the patent and the reversion of the land involved to the public domain" (Dinero us. Director of Lands; Kayaban vs. Republic L-33307,8-20-73; Director of Lands us. Hon. Pedro Samson Animas, L-37682, 3-29-74.) This action does not prescribe. With respect to Percival's action for reconveyance, it would have prescribed, having been filed more than ten (10) years after registration and Issuance of an Page 237 of 391 O.C.T. in the name of Melvin, were it not for the inherent infirmity of the latter's title. Under the facts, the statute of limitations will not apply to Percival because Melvin knew that a part of the land covered by his title actually belonged to Percival. So, instead of nullifying in toto the title of Melvin, the court, in the exercise of equity and jurisdiction, may grant prayer for the reconveyance of Lot B to Percival who has actually possessed the land under a claim of ownership since 1947. After all, if Melvin's title is declared void ab initio and the land is reverted to the public domain, Percival would just the same be entitled to preference right to acquire the land from the government. Besides, well settled is the rule that once public land has been in open, continuous, exclusive and notorious possession under a bonafide claim of acquisition of ownership for the period prescribed by Section 48 of the Public Land Act, the same ipso jure ceases to be public and in contemplation of law acquired the character of private land. Thus, reconveyance of the land from Melvin to Percival would be the better procedure, (Vitale vs. Anore, 90 Phil. 855; Pena, Land Titles and Deeds, 1982, Page 427) Alternative Answer; The action of the Solicitor General should prosper, considering that the doctrine of indefeasibility of title does not apply to free patent secured through fraud. A certificate of title cannot be used as shield to perpetuate fraud. The State is not bound by the period of prescription stated in Sec. 38 of Act 496. (Director of Lands vs. Abanilla, 124SCRA358) The action for reconveyance filed by Percival may still prosper provided that the property has not passed to an innocent third party for value (Dablo us. Court of Appeals. 226 SCRA 618), and provided that the action is filed within the prescriptive period of ten years (Tale vs. Court of Appeals. 208 SCRA 266). Since the action was filed by Percival 19 years after the issuance of Melvin's title, it is submitted that the same is already barred by prescription. Alternative Answer (to second part of question) The action for reconveyance filed by Percival will prosper, because the land has ceased to be public land and has become private land by open, continuous, public, exclusive possession under a bona fide claim of ownership for more than thirty years, and Percival is still in possession of the property at present. His action for reconveyance can be considered as an action to quiet title, which does not prescribe if the plaintiff is in possession of the property. (Olviga v. CA. GR 1048013. October 21, 1993) 06; LTD; judicial confirmation of imperfect title 1993 No. 20: On June 30, 1986. A filed in the RTC of Abra an application for registration of title to a parcel of land under P. D. No. 1529, claiming that since June 12. 1945. he has been in open, continuous, exclusive and notorious possession and occupation of said parcel of land of the public domain which was alienable and disposable, under a bona fide claim of ownership. After issuance of the notice of initial hearing and publication, as required by law. the petition was heard on July 29, 1987. On the day of the hearing nobody but the applicant appeared. Neither was there anyone who opposed the application. Thereupon, on motion of the applicant, the RTC issued an order of general default and allowed the applicant to present his evidence. That he did. On September 30. 1989. the RTC dismissed A's application for lack of sufficient evidence. A appealed to the Court of Appeals. The appellant urged that the RTC erred in dismissing his application for registration and in not ordering registration of his title to the parcel of land in Page 238 of 391 question despite the fact that there was no opposition filed by anybody to his application. Did the RTC commit the error attributed to it? Answer; No, the RTC did not commit the error attributed to it. In an application for Judicial confirmation of imperfect or incomplete title to public agricultural land under Section 48 of the Public Land Act, the lack of opposition and the consequent order of default against those who did not answer or show up on the date of initial hearing, does not guarantee the success of the application. It Is still incumbent upon the applicant to prove with well nigh incontrovertible evidence that he has acquired a title to the land that is fit for registration. Absent such registrable title, it is the clear duty of the Land Registration Court to dismiss the application and declare the land as public land. An application for land registration is a proceeding in rem. Its main objective is to establish the status of the res whether ft is still part of our public domain as presumed under the Regalian doctrine or has acquired the character of a private property. It is the duty of the applicant to overcome that presumption with sufficient evidence. 06; LTD; judicial reconstitution of title 1996 No. 17; In 1989, the heirs of Gavino, who died on August 10, 1987, filed a petition for reconstitution of his lost or destroyed Torrens Title to a parcel of land in Ermita, Manila. This was opposed by Marilou. who claimed ownership of the said land by a series of sales. She claimed that Gavino had sold the property to Bernardo way back in 1941. and as evidence thereof, she presented a Tax Declaration in 1948 in the name of Bernardo, which cancelled the previous Tax Declaration in the name of Gavino. Then she presented two deeds of sale duly registered with the Register of Deeds, the first one executed by Bernardo in 1954. selling the same property to Carlos, and the second one executed by Carlos in 1963, selling the same property to her. She also claimed that she and her predecessors in Interest have been in possession of the property since 1948. If you were the judge, how will you decide the petition? Explain. Answer; If I were the judge. I will give due course to the petition of the heirs of Gavino despite the opposition of Marilou for the following reasons: Judicial reconstitution of a certificate of title under RA. No. 26 partakes of a land registration proceeding and is perforce a proceeding in rem. It denotes restoration of an existing Instrument which has been lost or destroyed in its original form and condition. The purpose of reconstitution of title or any document is to have the same reproduced, after proceedings. In the same form they were when the loss or destruction occurred. If the Court goes beyond that purpose, It acts without or in excess of jurisdiction. Thus, where the Torrens Title sought to be reconstituted is in the name of Gavino. the court cannot receive evidence proving that Marilou is the owner of the land. Marilou's dominical claim to the land should be ventilated in a separate civil action before the Regional Trial Court in its capacity as a court of general jurisdiction. References: Heirs of Pedro Pinate vs. Dulay. 187 SCRA 12-20 (1990); Bunagan vs. CF1 Cebu Branch VI. 97 SCRA 72 (1980); Republic vs. IAC. 157 Page 239 of 391 SCRA 62,66 (1988); Margolles vs. CA, 230 SCRA 709; Republic us, Feliciano, 148 SCRA 924. 06; LTD; ministerial duty of the Register of deeds to register 1985 No. 14 C) The register of deeds refused to record a deed of sale executed in favor of a Filipino woman on the ground that she is an alien because her husband is an alien and although she secured an absolute divorce from him abroad, the divorce is void since our law, which governs her status, does not recognize absolute divorce. Rule on the legality of the register of deeds' refusal to register. Answer; C) 1. I believe the Register of Deeds erred in refusing to register the same for the reason stated in the question. When all the formal requisites for registration are presented, it is the duty of the RD to effect the registration. And this duty is clearly ministerial and mandatory in character. The main purpose of registration is merely to give notice to the public, either actually or constructively. In one case, the Supreme Court ruled that suspected invalidity of the contract is not a valid ground to refuse registration. In the instant case, unlike in Krivenko where vendee was admittedly an alien, the vendee is a Filipino. The only reason the RD refused to register is because she was married to an alien. Aside from the fact that they have divorced, it is not even certain or clear that she lost her Filipino citizenship by reason alone of her marriage. This depends upon the laws of her husband's country. The question whether she lost Filipino citizenship, under these facts, should be decided after registration. 2. The refusal to register by the Register of Deeds is improper, because under the 1973 Constitution, a Filipino woman who marries an alien remains a Filipino citizen; however, the certificate of title that would be issued in favor of this Filipino woman should expressly state that the subject land is her exclusive paraphernal property, for without such statement the land would be considered conjugal property, over which the alien husband is entitled to a share of 1/2 pro indiviso, in which event there would be a violation of the Constitution as 1/2 of the subject land would in effect be owned by an alien. 3. It depends when the Filipino woman acquired the property. Under the 1935 Constitution, a woman, follows the citizenship of the husband provided she is qualified. Therefore, she followed the citizenship of her husband. She is an alien and therefore the sale to her is not valid. But if it was under the 1973 Constitution, the Filipino wife does not follow the nationality of the husband. Therefore, the sale is perfectly valid. 4. It is ministerial if the defect does not appear on the face of the document, but if it appears on the face of the document, then he can refuse, 5. It is not within the authority of the Register of Deeds to question citizenship. As long as the documents are in order, it is his ministerial duly to record the deed. What the Register of Deeds could have done was to refer the question to the Land Registration Commissioner "en consulta", 6. The refusal by the Register of Deeds to record the sale is not warranted. The marriage of the Filipino woman to a foreigner does not result in her loss of Philippine citizenship. The matter of her subsequent divorce, whether valid or invalid, is immaterial. Page 240 of 391 06; LTD; procedure; consulta 1994 No. 3; 1) What is the procedure of consulta when an instrument is denied registration? Alternative Answers; 1) a) (1) The Register of Deeds shall notify the interested party in writing, setting forth the defects of the Instrument or the legal ground relied upon for denying the registration, and advising that if he Is not agreeable to such ruling, he may, without with drawing the documents from the Registry, elevate the matter by Consulta to the Administrator of the Land Registration Authority (LRA). (2) Within five {5) days from receipt of notice of denial, the party in Interest shall file his Consulta with the Register of Deeds concerned and pay the consulta fee. (3) After receipt of the Consulta and payment of the corresponding fee. the Register of Deeds makes an annotation of the pending consulta at the back of the certificate of title. (4) The Register of Deeds then elevates the case to the LRA Administrator with certified records thereof and a summary of the facts and issues involved. (5) The LRA" Administrator then conducts hearings after due notice or may just require parties to submit their memoranda. (6) After hearing, the LRA Administrator issues an order prescribing the step to be taken or the memorandum to be made. His resolution in consulta shall be conclusive and binding upon all Registers of Deeds unless reversed on appeal by the Court of Appeals or by the Supreme Court. (Section 117, P.D. 1529). b) The procedure of consulta is a mode of appeal from denial by the Register of Deeds of the registration of the instrument to the Commissioner of Land Registration. c) Within five days from receipt of the notice of denial, the interested party may elevate the matter by consulta to the Commissioner of Land Registration who shall enter an order prescribing the step to be taken or memorandum to be made. Resolution in consulta shall be binding upon all Registers of Deeds provided that the party in interest may appeal to the Court of Appeals within the period prescribed (Sec. 117, P.D. 1529). 06; LTD; reclamation of foreshore lands 2000 No VIII a) Republic Act 1899 authorizes municipalities and chartered cities to reclaim foreshore lands bordering them and to construct thereon adequate docking and harbor facilities. Pursuant thereto, the City of Cavite entered into an agreement with the Fil-Estate Realty Company, authorizing the latter to reclaim 300 hectares of land from the sea bordering the city, with 30% of the land to be reclaimed to be owned by Fil-Estate as compensation for its services. The Solicitor General questioned the validity of the agreement on the ground that it will mean reclaiming land under the sea which is beyond the commerce of man. The City replies that this is authorized by RA. 1899 because it authorizes the construction of docks and harbors. Who is correct? (3%) SUGGESTED ANSWER: The Solicitor General is correct. The authority of the City of Cavite under RA 1899 to reclaim land is limited to foreshore lands. The Act did not authorize it to Page 241 of 391 reclaim land from the sea. "The reclamation being unauthorized, the City of Cavite did not acquire ownership over the reclaimed land. Not being the owner, it could not have conveyed any portion thereof to the contractor. Alternative Answer; It depends. If the reclamation of the land from the sea is necessary in the construction of the docks and the harbors, the City of Cavite is correct. Otherwise, It is not. Since RA 1899 authorized the city to construct docks and harbors, all works that are necessary for such construction are deemed authorized. Including the reclamation of land from the sea. The reclamation being authorized, the city is the owner of the reclaimed land and it may convey a portion thereof as payment for the services of the contractor. ANOTHER ALTERNATIVE ANSWER: On the assumption that the reclamation contract was entered into before RA 1899 was repealed by PD 3-A, the City of Cavite is correct. Lands under the sea are "beyond the commerce of man" in the sense that they are not susceptible of private appropriation, ownership or alienation. The contract In question merely calls for the reclamation of 300 hectares of land within the coastal waters of the city. Per se, it does not vest, alienate or transfer ownership of land under the sea. The city merely engaged the services of Fil-Estate to reclaim the land for the city. 06; LTD; redemption 1989 No. 7: (1) "X" mortgaged his land to the Philippine National Bank (PNB) to secure a promissory note. He defaulted in the payment of the loan so that the land was sold at public auction on January 20, 1960, for P3,500 with the PNB as the highest bidder. On January 20, 1970, "X" offered to redeem the property in the amount of P3,500. He enclosed a postal money order for P1,000 as partial payment and stated that the balance is to be paid in 12 monthly installments. The PNB then discovered that the sheriffs certificate of sale prepared after the public auction of the land was not registered so that it cause the same to be registered on January 30, 1970. The PNB refused the offer of "X" contending that the offer to redeem was beyond the one-year period provided under Act No. 3135 and that it was not accompanied by an actual and simultaneous tender of the entire repurchase price. In view of the refusal of the PNB, "X" filed an action to repurchase on February 20, 1970, Will the action prosper? Give your reasons. Answer: Yes, the action should prosper. The one (1) year period of redemption is counted from the registration of the sheriffs certificate of sale hence the action has not yet prescribed. However, there need not be a tender of the redemption price because the filing of the judicial action to enforce the right of redemption within the redemption period suffices. 06; LTD; scope of registration 1989 No. 16: (1) May the owner of a building constructed on an unregistered land belonging to another apply for the registration of such building under the Land Registration Act and P.D. 1529? What should he do to protect his rights in case the owner of the land applied for registration thereof? Give your reasons. Answer: The Land Registration Act and PD 1529 apply to registration of land only. It may include the building as an accessory but the building cannot be registered Page 242 of 391 independently of the land because registration contemplated under this Act refers only to ownership of land. The owner of the building should file an opposition or answer to the application for registration and ask the court that his right to the building be annotated in the decree and later in the certificate of title. 06; LTD; torrens vs recording 1994 No. 3; 2) Distinguish the Torrens system of land registration from the system of recording of evidence of title. Alternative Answers; 2) a) The Torrens system of land registration is a system for the registration of title to the land. Thus, under this system what is entered in the Registry of Deeds, is a record of the owner's estate or interest in the land, unlike the system under the Spanish Mortgage Law or the system under Section 194 of the Revised Administrative Code as amended by Act 3344 where only the evidence of such title is recorded. In the latter system, what is recorded is the deed of conveyance from hence the owner's title emanated—and not the title itself. b) Torrens system of land registration is that which is prescribed in Act 496 (now PD 1529), which is either Judicial or quasi-judicial. System or recording of evidence of title is merely the registration of evidence of acquisitions of land with the Register of Deeds, who annotates the same on the existing title, cancels the old one and Issues a new title based on the document presented for registration. 06; LTD; writ of possession 1981 No. 16 In a cadastral case. Lot No. 123 was claimed and applied for by spouses "ST", The cadastral Court adjudicated the lot in their favor, the claim having been uncontested. Three months thereafter, the heirs of "Z " filed a petition for the review of the registration decree alleging that they were the true owners and were in actual legal possession. After hearing, the Court denied the petition for review. No appeal was taken. Two years later, the spouses "S-T" filed a petition for the issuance of a Writ of Possession in the cadastral proceedings. Opposed by the heirs of "Z", the Court refused to issue the Writ on the ground that the heirs of "Z" were not specifically named as parties in the cadastral case so that said Writ cannot issue as against them. Are the spouses "S-T" entitled to a Writ of Possession? Explain. Answer The spouses "S-T" are entitled to a Writ of Possession. The heirs of "Z" cannot be said to be strangers to the registration proceedings. A cadastral proceeding is a proceeding in rem and against everybody, including the heirs of "Z", who are deemed included in the general order of default entered in the case. Besides, said heirs filed a petition for the review of the decree of registration, thereby becoming a direct party in the registration proceedings by their voluntary appearance. The fact that the spouses "S-T" filed the instant petition two years later is of no moment. The right of the applicants or of a subsequent purchaser to ask for the issuance of a writ of possession never prescribes. Page 243 of 391 (Note: The above answer is based on Rodil vs. Benedicto, L-28616, Jan.22,1980.) Page 244 of 391 06; Prescription 1990 No 12: In 1960, an unregistered parcel of land was mortgaged by owner O to M, a family friend, as collateral for a loan. O acted through his attorney-in-fact, son S, who was duty authorized by way of a special power of attorney, wherein O declared that he was the absolute owner of the land, that the tax declarations/receipts were all issued in his name, and that he has been In open, continuous and adverse possession in the concept of owner. As O was unable to pay back the loan plus interest for the past five [5) years, M had to foreclose the mortgage. At the foreclosure sale, M was the highest bidder. Upon issuance of the sheriffs final deed of sale and registration In January, 1966, the mortgage property was turned over to M's possession and control M has since then developed the said property. In 1967, O died, survived by sons S and P. In 1977, after the tenth (10th) death anniversary of his father O. son P filed a suit to annul the mortgage deed and subsequent sale of the property, etc., on the ground of fraud. He asserted that the property in question was conjugal in nature actually belonging, at the time of the mortgage, to O and his wife, W, whose conjugal share went to their sons (S and P) and to O, (a) Is the suit filed by P barred by prescription? Explain your answer. (b) After the issuance of the sheriff's final deed of sale in 1966 in this case, assuming that M applied for registration under the Torrens System and was issued a Torrens Title to the said property in question, would that added fact have any significant effect on your conclusion? State your reason. Answer: (a) Under Art. 173 of the Civil Code, the action is barred by prescription because the wife had only ten (10) years from the transaction and during the marriage to file a suit for the annulment of the mortgage deed. Alternative Answers to (a) first Alternative Answer: (a) The mortgage contract executed by O, if at all, is only a voidable contract since it involves a conjugal partnership property. The action to annul the same instituted in 1977, or eleven years after the execution of the sheriff's final sale, has obviously prescribed because: 1. An action to annul a contract on the ground of fraud must be brought within four (4) years from the date of discovery of the fraud. Since this is in essence an action to recover ownership, it must be reckoned from the date of execution of the contract or from the registration of the alleged fraudulent document with the assessor's office for the purpose of transferring the tax declaration, this being unregistered land, (Bael u. Intermediate Appellate Court G. R. L-74423 Jan.30, 1989 169 SCRA 617). 2. If the action is to be treated as an action to recover ownership of land, it would have prescribed Just the same because more than 10 years have already elapsed since the date of the execution of the sale. Second Alternative Answer; (a) The action to recover has been barred by acquisitive prescription in favor of M considering that M has possessed the land under a claim of ownership for ten (10) years with a just title. (b) If M had secured a Torrens Title to the land, all the more S and P could not recover because if at all their remedies would be: Page 245 of 391 1. A Petition to Review the Decree of Registration. This can be availed of within one (1) year from-the entry thereof, but only upon the basis of "actual fraud." There is no showing that M committed actual fraud in securing his title to the land; or 2. An action in personam against M for the reconveyance of the title In their favor. Again, this remedy is available within four years from the date of the discovery of the fraud but not later than ten (10) years from the date of registration of the title in the name of M. 06; Prescription 1978 No. IV-b A signed a promissory note dated July 25, 1960 in favor of B, which reads: "For value received I promise to pay B at his residence at 43 Caledonia St., Malate, the sum of Ten Thousand Pesos (F10,000.00) with interest at twelve per cent (12%) per annum upon demand." Twelve (12) years later on August 15, 1972, B brought an action to collect the sum due under the promissory note. A interposed the defense of prescription as more than ten (10) years had transpired- Decide the case with reasons. Answer The action brought by B against A to collect the sum due under the promissory note has already prescribed as more than ten years had already elapsed from the time of the execution of the promissory note. Under our statute of limitations, the law declares that actions upon a written contract must be brought within ten years from the time the right of action accrues. Here, the promissory note expressly states that A shall pay B the sum of P10,000 with interest at 12 % per annum upon demand. Obviously B's right of action accrued immediately upon the execution of the promissory note. Unfortunately for him, he brought the action for collection twelve years later. The action, therefore, was filed out of time. (NOTE: The above answer is based on Art. 1144 of the Civil Code and on decided cases.) 06; Prescription; acquisitive; movable 1984 No. 7 On January l, 1978, A sold a typewriter to B. It turned out, however that A had stolen the typewriter from C. In February, 1982, when C discovered that his typewriter was in B's possession, he immediately filed an action against B to recover it. Will the action prosper? Answer: A. Furnished by Office of Justice Palma, No. While the sale of the typewriter by A to B is void, B has acquired ownership of the typewriter because of the lapse of 4 years. He had possession of the typewriter in good faith with just title for the period fixed by law. Ownership of movables prescribes through uninterrupted possession for 4 years in good faith. B. Comments and Suggested Answers We agree with the answer of the Bar Examiner. 06; Prescription; just title 1985 No. 10: A) A bought a parcel of land from B, adjoining that of C's. By mistake, A took possession of C's land, thinking it was sold to him. He then possessed it openly, peacefully, continuously and in the concept of owner for 10 years. When C Page 246 of 391 discovered that A was possessing his land, C demanded its return and upon A's refusal, brought an action for its recovery. Will the action prosper? Discuss, Answers: A) 1. The action will prosper. A is not a possessor in good faith of the land of C because A has no title or mode of acquisition with respect to the land of C. What A bought was the land of B. A cannot claim acquisition of ownership by ordinary "prescription of 10 years. 2) It depends whether it is under the Code of Civil Procedure or under the New Civil Code. Under the Code of Civil Procedure, A has acquired the land by prescription. Under the New Civil Code, there is no prescription because there is no just title. 3) The action, absent the possible application of laches, can prosper. The possession by A was without a just title; such possession can thus only ripen into ownership by acquisitive prescription after 30 years of open, peaceful and continuous possession in the concept of an owner (Art. 1137 and Art. 1129, in relation to Art. 1127) 06; Prescription; laches 2000 No XVI In an action brought to collect a sum of money based on a surety agreement, the defense of laches was raised as the claim was filed more than seven years from the maturity of the obligation. However, the action was brought within the ten-year prescriptive period provided by law wherein actions based on written contracts can be Instituted. a) Will the defense prosper? Reason. (3%) b) What are the essential elements of laches? (2%) SUGGESTED ANSWER; No, the defense will not prosper. The problem did not give facts from which laches may be Inferred. Mere delay in filing an action, standing alone, does not constitute laches (Agra v. PNB. 309 SCRA 509). SUGGESTED ANSWER: b) The four basic elements of laches are; (1) conduct on the part of the defendant or of one under whom he claims, giving rise to the situation of which complainant seeks a remedy; (2) delay In asserting the complainant's rights, the complainant having had knowledge or notice of the defendant's conduct and having been afforded an opportunity to institute suit; (3) lack of knowledge on the part of the defendant that the complainant would assert the right on which he bases his suit; and (4) injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held to be barred. 06; Prescription; laches 2002 No VII. Way back in 1948, Winda’s husband sold in favor of Verde Sports Center Corp. (Verde) a 10-hectare property belonging to their conjugal partnership. The sale was made without Winda’s knowledge, much less consent. In 1950, Winda learned of the sale, when she discovered the dead of sale among the documents in her husband’s vault after his demise. Soon after, she noticed that the construction of the sports complex had started. Upon completion of the construction in 1952, she tried but failed to get free membership privileges in Verde. Page 247 of 391 Winda now files a suit against Verde for the annulment of the sale on the ground that she did not consent to the sale. In answer, Verde contends that, in accordance with the Spanish Civil Code which was then in force, the sale in 1948 of the property did not need her concurrence. Verde contends that in any case the action has prescribed or is barred by laches. Winda rejoins that her Torrens title covering the property is indefeasible, and imprescriptible. A. Define or explain the term “laches”. (2%) B. Decide the case, stating your reasons for your decision. (3%) SUGGESTED ANSWER: A. Laches means failure or neglect, for an unreasonable and unexplained length of time, to do what, by exercising due diligence, could or should have been done earlier. It is negligence or omission to assert a right within a reasonable time. (De Vera v. CA, 305 SCRA 624 [1999]) B. While Article 1413 of the Spanish Civil Code did not require the consent of the wife for the validity of the sale, an alienation by the husband in fraud of the wife is void as held in Uy Coque v. Navas, 45 Phil. 430 (1923). Assuming that the alienation in 1948 was in fraud of Winda and, therefore, makes the sale to Verde void, the action to set aside the sale, nonetheless, is already barred by prescription and laches. More than 52 years have already elapsed from her discovery of the sale in 1950. ALTERNATIVE ANSWER: B. Winda’s claim that her Torrens Title covering the property is indefeasible and imprescriptible [does not hold water] is not tenable. The rule of indefeasibility of a Torrens Title means that after one year from the date of issue of the decree of registration or if the land has fallen into the hands of an innocent purchaser for value, the title becomes incontestable and incontrovertible. Imprescriptibility, on the other hand, means that no title to the land in derogation of that of the registered owner may be acquired by adverse possession or acquisitive prescription or that the registered owner does not lose by extinctive prescription his right to recover ownership and possession of the land. The action in this case is for annulment of the sale executed by the husband over a conjugal partnership property covered by a Torrens Title. Action on contracts are subject to prescription. 06; Prescription; real rights 1992 No 7: A owned a parcel of unregistered land located on the Tarlac side of the boundary between Tarlac and Pangasinan. His brother B owned the adjoining parcel of unregistered land on the Pangasinan side. A sold the Tarlac parcel to X in a deed of sale executed as a public instrument by A and X. After X paid in full the, price of the sale, X took possession of the Pangasinan parcel In the belief that it was the Tarlac parcel covered by the deed of sale executed by A and X. After twelve (12) years, a controversy arose between B and X on the issue of the ownership of the Pangasinan parcel, B claims a vested right of ownership over the Pangasinan parcel because B never sold that parcel to X or to anyone else. Page 248 of 391 On the other hand, X claims a vested right of ownership over the Pangasinan parcel by acquisitive prescription, because X possessed this parcel for over ten (10] years under claim of ownership. Decide on these claims, giving your reasons. Answer; At this point in time, X cannot claim the right of vested ownership over the Pangasinan parcel by acquisitive prescription. In addition to the requisites common to ordinary and extraordinary acquisitive prescription consisting of uninterrupted, peaceful, public, adverse and actual possession in the concept of owner, ordinary acquisitive prescription for ten (10) years requires (1) possession in good faith and (2) just title. "Just title" means that the adverse claimant came into possession of the property through one of the modes recognized by law for the acquisition of ownership but the grantor was not the owner or could not transmit any right (Art. 1129. Civil Code). In this case, there is no "just title" and no "mode" that can be Invoked by X for the acquisition of the Pangasinan parcel There was no constructive delivery of the Pangasinan parcel because It was not the subject-matter of the deed of sale. Hence, B retains ownership of the Pangasinan parcel of land. Page 249 of 391 07; Contracts; annulment of contracts; capacity to sue 1996 No 9; Sometime in 1955, Tomas donated a parcel of land to his stepdaughter Irene, subject to the condition that she may not sell, transfer or cede the same for twenty years. Shortly thereafter, he died. In 1965, because she needed money for medical expenses, Nene sold the land to Conrado. The following year, Irene died, leaving as her sole heir a son by the name of Armando. When Armando learned that the land which he expected to inherit had been sold by Irene to Conrado. he filed an action against the latter for annulment of the sale, on the ground that it violated the restriction imposed by Tomas. Conrado filed a motion to dismiss, on the ground that Armando did not have the legal capacity to sue. If you were the Judge, how will you rule on this motion to dismiss? Explain. Answer: As judge, 1 will grant the motion to dismiss. Armando has no personality to bring the action for annulment of the sale to Conrado. Only an aggrieved party to the contract may bring the action for annulment thereof (Art. 1397. NCC). While Armando is heir and successor-in-interest of his mother (Art. 1311, NCC), he [standing in place of his mother) has no personality to annul the contract. Both are not aggrieved parties on account of their own violation of the condition of, or restriction on, their ownership Imposed by the donation. Only the donor or his heirs would have the personality to bring an action to revoke a donation for violation of a condition thereof or a restriction thereon. (Garrido u. CA, 236 SCRA 450). Consequently, while the donor or his heirs were not parties to the sale, they have the right to annul the contract of sale because their rights are prejudiced by one of the contracting parties thereof [DBP v. CA, 96 SCRA 342; Teves vs. PHHC. 23 SCRA 1141. Since Armando is neither the donor nor heir of the donor, he has no personality to bring the action for annulment. Alternative Answer: As judge, I will grant the motion to dismiss. Compliance with a condition imposed by a donor gives rise to an action to revoke the donation under Art. 764, NCC. However, the right of action belongs to the donor. Is transmissible to his heirs, and may be exercised against the donee's heirs. Since Armando is an heir of the donee, not of the donor, he has no legal capacity to sue for revocation of the donation. Although he is not seeking such revocation but an annulment of the sale which his mother, the donee, had executed in violation of the condition imposed by the donor, an action for annulment of a contract may be brought only by those who are principally or subsidiarily obliged thereby (Art. 1397, NCC). As an exception to the rule, it has been held that a person not so obliged may nevertheless ask for annulment if he is prejudiced in his rights regarding one of the contracting parties (DBP us. CA. 96 SCRA 342 and other cases) and can show the detriment which would result to him from the contract in which he had no intervention, (Teves vs. PHHC, 23 SCRA 1141). Such detriment or prejudice cannot be shown by Armando. As a forced heir, Armando's interest In the property was, at best, a mere expectancy. The sale of the land by his mother did not impair any vested right. The fact remains that the premature sale made by his mother (premature because only half of the period of the ban had elapsed) was not voidable at all, none of the vices of consent under Art. 139 of the NCC being present. Hence, the motion to dismiss should be granted. 07; Contracts; annulment of contracts; prescriptive period 1979 No. IX Page 250 of 391 On the basis of a document entitled "Deed of Absolute Sale", a certain lot and building then, leased by its owner, PC, to JG with a monthly rental of P1,000.00, was sold to, and thus registered in the latter's name. Six years after the issuance of the title to JG, MC the sole heir of PC who had just died brought an action for recovery of the property alleging in his complaint, among others, that PC then very old and with weak eyesight was tricked by JG into signing the Deed of Absolute Sale upon the fraudulent misrepresentation that said document was only a renewal of the lease contract over the property; that the price stated in the document is only P10,000 although the property was then worth about P50,000 JG moved to dismiss the action on the ground of prescription. Should the motion be granted? Why? Answer The motion should be granted. In reality, the action instituted by MC against JG for recovery of the property is an action for annulment of the contract based on fraud and/or mistake. This can be inferred from the allegations in the complaint. Being an action for annulment of a voidable contract, the period, of prescription is four years to be counted from the time of the discovery of the fraud or mistake. When did PC and his heir MC discover the fraud or mistake? The discovery took place when JG registered the property in his name. Registration of an instrument constitutes constructive notice to the whole world, and therefore, discovery of the fraud or mistake is deemed to have taken place at the time of registration. (Carantes vs. CA, 76 SCRA 514) In the case at bar, since the action fop annulment was instituted six years after registration of the property in JC's name, it follows that it is now barred by the statute of limitation. Answer No. II The motion should be granted. In reality, the action instituted by MC against JG for recovery of the property is an action for reconveyance of property based on implied or constructive trust. The allegation in the complaint are clear. JG acquired the property through fraud. He is, therefore, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes (Art. 1456, Civil Code). It is now a well-settled rule in this jurisdiction that an action for reconveyance based on implied trust is prescriptible and that the action prescribes after ten years to be counted from the time of the discovery of the fraud. When did PC and his heir MC discover the fraud? The discovery took place when JG registered the property in his name. Registration of an instrument constitutes constructive notice to the whole world, and therefore, discovery of the fraud is deemed to have taken place at the time of registration. (Carantes vs. CA, 76 SCRA 514, and cases cited thereunder). In the case at bar, since the action for reconveyance was instituted six years after registration of the property in JG's name, it follows that it is not yet barred by the statute of limitations. 07; Contracts; consensual vs real contracts 1998 No XVIII. 2. Distinguish consensual from real contracts and name at least four (4) kinds of real contracts under the present law. [3%| Answer; 2. Consensual contracts are those which are perfected by mere consent (Art. 1315. Civil Code). Real contracts are those which are perfected by the delivery of the object of the obligation. (Art. 1316, Civil Code) Examples of real contracts are deposit, pledge, commodatum and simple loan (mutuum). 07; Contracts; consent; invitation to bid Page 251 of 391 1980 No. IV (a) "K" & Co. published in the newspaper an "Invitation To Bid" inviting proposals to supply labor and materials for a construction project described in the invitation. "L", "M", and "N" submitted bids. When the bids were opened, it appeared that "L" submitted the lowest bid. However, "K" & Co. awarded the contract "N", the highest bidder, on the ground that he was the most experienced and responsible bidder. "L" brought an action against "K" & Co, to compel the award to him and to recover damages. Is "L's" position meritorious? Answer (a) "L's" position is not meritorious. According to the Civil Code, advertisements for bidders are simply invitations to make proposals, and the advertiser is not bound to accept the highest or lowest bidder, unless the contrary appears (Art. 1326). It is clear that the general rule applies in the instant case. In its advertisements, "K" & Co., for instance, did not state that it will award the contract to the lowest bidder. Therefore, in awarding the contract to "N", the defendant company acted in accordance with its rights. 07; Contracts; consideration; validity 2000 No XV a) Lolita was employed in a finance company. Because she could not account for the funds entrusted to her. she was charged with estafa and ordered arrested. In order to secure her release from jail, her parents executed a promissory note to pay the finance company the amount allegedly misappropriated by their daughter. The finance company then executed an affidavit of desistance which led to the withdrawal of the information against Lolita and her release from jail. The parents failed to comply with their promissory note and the finance company sued them for specific performance. Will the action prosper or not? (3%) SUGGESTED ANSWER: The action will prosper. The promissory note executed by Lolita's parents is valid and binding, the consideration being the extinguishment of Lolita's civil liability and not the stifling of the criminal prosecution. ALTERNATIVE: ANSWER: The action will not prosper because the consideration for the promissory note was the non-prosecution of the criminal case for estafa. This cannot be done anymore because the information has already been filed in court and to do it is illegal. That the consideration for the promissory note is the stifling of the criminal prosecution is evident from the execution by the finance company of the affidavit of desistance immediately after the execution by Lolita's parents of the promissory note. The consideration being illegal, the promissory note is invalid and may not be enforced by court action. 07; Contracts; form of contracts 1977 No IV-c H sold a parcel of land, with right to repurchase in a private instrument to C, who sold it to D, who transferred it to E. E took possession, and because all the transfers were in private instruments, E after 30 years filed suit to compel the heirs of H to execute a formal deed of conveyance. Has prescription set in? Can E prevail? Answer Page 252 of 391 The suit filed by E against the heirs of H cannot prosper. In the first place, there is no privity of interest between E and H or the latter's heirs. E should have directed the suit against D, his immediate predecessor. In the second place, said action filed by E against the heirs of H, which is presumably based on Art. 1357 of the Civil Code (to compel each other to execute the required form), has already prescribed. An action based on a right provided by law prescribes in 10 years. 07; Contracts; forms of contracts 1982 No. 17 "A" and "B" entered into a verbal contract whereby "A" agreed to sell to "B" his only parcel of land for P20,000, and "B" agreed to buy at the aforementioned price. "B" went to the bank, withdrew the necessary amount, and returned to "A" for the consummation of the contract. "A" however, had changed his mind and refused to go through with the sale. Is the agreement valid? Will an action by "B" against "A" for specific performance prosper? Reason. Answer It must be observed that there are two questions in the case at bar. They are: (1) Is the agreement valid? The answer is yes. It is a time-honored rule that even a verbal agreement to sell land is valid so long as there is already an agreement with respect to the object and the purchase price. (2) Will an action by "B" against "A" for specific performance prosper? The answer is no, unless it is ratified. The reason is obvious. The agreement, being an agreement of sale of real property, is covered by the Statute of Frauds It cannot, therefore, be enforced by a court action because it is not evidenced by any note or memorandum or writing properly subscribed by the party charged. (Note: The above answer is based on No. 2 of Art. 1203 of the Civil Code and on decided cases.) 07; Contracts; inducing another to violate a contract 1980 No. V (a) "O", a very popular movie star was under contract with "P" Movie Productions to star exclusively in the latter's films for two years. "O" was prohibited by the contract to star in any film produced by another producer. "X" Film Co. induced "O" to break her contract with "P" Movie Productions by giving her twice her salary. "P" Movie Productions sued "X" Film Co. for damages "X" Film Co contended that it had a right to compete for the services of "0" and that her contract with "P" Movie Productions was in restraint of trade and a restriction on her freedom of contract. Whose contention would you sustain? Answer (a) The contention of "P" Movie Productions should be sustained. According to the Civil Code, any third person who induces another to violate his contract shall be liable for damages to the other contracting party (Art. 1314). However, the following requisites must concur: (a) the existence of a valid contract; (b) knowledge on the part of the third person of the existence of the contract; and (c) interference of the third person without legal justification or excuse. All of these requisites are present in the case at bar. (See Daywalt vs. Agustinos Recoletos, 39 Phil. 587). 07; Contracts; innominate contracts 1977 No. X-c Page 253 of 391 What are the different kinds of innominate contracts and how are they regulated? Answer There are four kinds of innominate contracts. They are: (1) Do ut des — I give that you give; (2) Do ut facias — I give that you do; (3) Facio ut des - I do that you give; and (4) Facio ut facias — I do that you do. These contracts shall be regulated by the stipulation of the parties, by the general provisions or principles of obligations and contracts, by the rules governing the most analogous nominate contracts, and by the custom of the place (Art. 1307, Civil Code). 1977 No. XI-a A and B are spurious children of T, born in 1945 and 1947, respectively. T died in 1955. Can A and B inherit from him? Would your answer be the same if T died the year after B's birth? Answer If T died in 1955, A and B can inherit from him. Under the New Civil Code, spurious children can inherit. This is, of course, based on the assumption that T had recognized A and B as his spurious children either voluntarily or by means of a final judgment of a competent court. If T had not recognized them, they cannot inherit from him. If T died the year after B's birth, A and B cannot inherit from him. The reason is that in such case the right of A and B to inherit from T shall still be governed by the Spanish Civil Code (Art. 2263, Civil Code). Under the facts presented, it is clear that T died prior to the effectivity (Aug. 30, 1950) of the New Civil Code. Therefore, what is applicable is the Spanish Civil Code. Under said Code, spurious children cannot inherit 07; Contracts; obligatory nature of contracts 1991 No 9: Roland, a basketball star, was under contract for one year to play-for-play exclusively for Lady Love, Inc. However, even before the basketball season could open, he was offered a more attractive pay plus fringes benefits by Sweet Taste, Inc. Roland accepted the offer and transferred to Sweet Taste. Lady Love sues Roland and Sweet Taste for breach of contract. Defendants claim that the restriction to play for Lady Love alone Is void, hence, unenforceable, as It constitutes an undue Interference with the right of Roland to enter into contracts and the impairment of his freedom to play and enjoy basketball Can Roland be bound by the contract he entered Into with Lady Love or can he disregard the same? Is he liable at all? How about Sweet Taste? Is it liable to Lady Love? Answer; Roland Is bound by the contract he entered into with Lady Love and he cannot disregard the same, under the principles of obligatoriness of contracts. Obligations arising from contracts have the force of law between the parties. Yes, Roland is liable under the contract as far as Lady Love is concerned. He is liable for damages under Article 1170 of the Civil Code since he contravened the tenor of his obligation. Not being a contracting party, Sweet Taste is Page 254 of 391 not bound by the contract but It can be held liable under Art. 1314. The basis of its liability Is not prescribed by contract but is founded on quail-delict, assuming that Sweet Taste knew of the contract. Article 1314 of the Civil Code provides that any third person who induces another to violate his contract shall be liable for damages to the other contracting party. Alternative Answer: It is assumed that Lady Love knew of the contract. Neither Roland nor Sweet Taste would be liable, because the restriction in the contract is violative of Article 1306 as being contrary to law. morals, good customs, public order or public policy. 07; Contracts; perfection of contracts; obligations with a period 1988 No. 11: (b) Merle offered to sell her automobile to Violy for P60,000.00. After inspecting the automobile, Violy offered to buy it for P50,000.00. This offer was accepted by Merle. The next day, Merle offered to deliver the automobile, but Violy being short of funds, secured postponement of the delivery, promising to pay the price "upon arrival of the steamer, Helena". The steamer however never arrived because it was wrecked by a typhoon and sank somewhere off the Coast of Samar. (1) Is there a perfected contract in this case? Why? (2) Is the promise to pay made by Violy conditional or with a term? Why? (3) Can Merle compel Violy to pay the purchase price and to accept the automobile? Why? Answer: (b) (1) Yes, there is a perfected contract because there is already a concurrence between the offer and the acceptance with respect to the object and the cause which shall constitute the contract. Such concurrence is manifested by the acceptance made by Merle of the offer made by Violy. (2) I submit that the promise to pay made by Violy is not conditional, but with a term. The promise is to pay the P50,000 upon arrival in this port of the steamer, Helena, not if the steamer Helena shall arrive in this port. Hence, the promise is with regard to the date of arrival and not with regard to the fact of arrival. (3) Yes, Merle can compel Violy to pay the purchase price and to accept the automobile. She will, however, have to wait for the date when the steamer, Helena, would have arrived were it not for the shipwreck. After all, there is already a perfected contract. Suggested Alternative Answers To: No. 11 (b): (b) (2) The promise to pay is subject to a term. When there is a pre-existing obligation and the "condition" affects only the time of payment such "condition" can be considered as a period. In other words, the parties must be deemed to have contemplated a period, (3) Yes Merle can compel Violy to pay the purchase price and to accept the automobile but only after the parties would have fixed the period. Failing in that, the courts may be asked to fix the period. Article 1180 provides that: "When the debtor binds himself to pay when his means permit him to do so, the obligation shall be deemed to be one with a period, subject to the provisions of article 1197." 07; Contracts; privity of contract Page 255 of 391 1996 No. 12: Baldomero leased his house with a telephone to Jose. The lease contract provided that Jose shall pay for all electricity, water and telephone services in the leased premises during the period of the lease. Six months later. Jose surreptitiously vacated the premises. He left behind unpaid telephone bills for overseas telephone calls amounting to over P20,000.00. Baldomero refused to pay the said bills on the ground that Jose had already substituted him as the customer of the telephone company. The latter maintained that Baldomero remained as his customer as far as their service contract was concerned, notwithstanding the lease contract between Baldomero and Jose. Who is correct, Baldomero or the telephone company? Explain. Answer: The telephone company is correct because as far as it is concerned, the only person it contracted with was Baldomero. The telephone company has no contract with Jose. Baldomero cannot substitute Jose in his stead without the consent of the telephone company (Art. 1293, NCC). Baldomero is. therefore, liable under the contract. 07; Contracts; reformation of instruments 1984 No. 15 On June 13, 1982, A sold to B in a public instrument a parcel of land for P50,000, Simultaneously, B granted A an option to buy the same property for P60,000 within one year. On June 13, 1983, B allowed A an extension of the option to buy for another year, this time at the price of P72,000. All the while, A has remained in possession of the land. In May, 1984, A filed an action for the reformation of the deed of sale into a real estate mortgage, alleging that the land covered thereby was given only as a security for the repayment of a loan. Under the circumstances, will the action prevail? Why? Answer: A. Furnished by the Office of Justice Palma, The option was granted on the same date that the sale was executed. The repurchase price increased at a rate of 20% a year, which could be equivalent to interest at the rate of 20% a year. Moreover, the seller remained in possession of the premises. All of these are indications that the real transaction between the parties is a loan, not a sale. In case of doubt, under Article 1603, a contract purporting to be a sale with right of repurchase shall be construed as an equitable mortgage. The instrument should therefore be reformed. B. Comments and Suggested Answer We agree with the answer of the Bar Examiner. 07; Contracts; rescission of contracts; capacity to sue 1996 No. 13: In December 1985, Salvador and the Star Semiconductor Company (SSC) executed a Deed of Conditional Sale wherein the former agreed to sell his 2,000 square meter lot in Cainta, Rizal, to the latter for the price of P1,000,000.00, payable P100,000.00 down, and the balance 60 days after the squatters in the property have been removed. If the squatters are not removed within six months, the P100,000.00 down payment shall be returned by the vendor to the vendee, Page 256 of 391 Salvador filed ejectment suits against the squatters, but in spite of the decisions in his favor, the squatters still would not leave. In August, 1986, Salvador offered to return the PIOO,OOO.OO down payment to the vendee, on the ground that he is unable to remove the squatters on the property. SSC refused to accept the money and demanded that Salvador execute a deed of absolute sale of the property in its favor, at which time It will pay the balance of the price. Incidentally, the value of the land had doubled by that time. Salvador consigned the P 100,000.00 in court, and filed an action for rescission of the deed of conditional sale, plus damages. Will the action prosper? Explain. Answer; No, the action will not prosper. The action for rescission may be brought only by the aggrieved party to the contract. Since it was Salvador who failed to comply with his conditional obligation, he is not the aggrieved party who may file the action for rescission but the Star Semiconductor Company, The company, however, is not opting to rescind the contract but has chosen to waive Salvador's compliance with the condition which it can do under Art. 1545, NCC. Alternative Answer: The action for rescission will not prosper. The buyer has not committed any breach, let alone a substantial or serious one, to warrant the rescission/resolution sought by the vendor. On the contrary, it is the vendor who appears to have failed to comply with the condition imposed by the contract the fulfillment of which would have rendered the obligation to pay the balance of the purchase price demandable. Further, far from being unable to comply with what is incumbent upon it, ie., pay the balance of the price - the buyer has offered to pay it even without the vendor having complied with the suspensive condition attached to the payment of the price, thus waiving such condition as well as the 60-day term in its favor The stipulation that the PI00,000.00 down payment shall be returned by the vendor to the vendee if the squatters are not removed within six months, is also a covenant for the benefit of the vendee, which the latter has validly waived by Implication when it offered to pay the balance of the purchase price upon the execution of a deed of absolute sale by the vendor. (Art. 1545, NCCJ 07; Contracts; Statute of Frauds 1988 No. 15: (a) Suppose that in an oral contract, which by its terms is not to be performed within one year from the execution thereof, one of the contracting parties has already complied within the year with the obligations imposed upon him by said contract, can the other party avoid fulfillment of those incumbent upon him by invoking the Statute of Frauds? Answer: (a) No, he cannot. This is so, because the Statute of Frauds aims to prevent and not to protect fraud. It is well-settled that when the law declares that an agreement which by its terms is not to be performed within a year from the making thereof is unenforceable by action, unless the same, or some note or memorandum thereof, be in writing, and subscribed by the party- charged, or by his agent, it refers only to an agreement which by its terms is not to be performed on either side within a year from the execution thereof. Hence, one which has already been fully performed on one side within a year is taken out of the operation of the statute. (Phil. Nat. Bank vs. Phil. Vegetable Oil Co., 49 Phil. 857; Shoemaker vs. La Tondena, 68 Phil. 24.) Page 257 of 391 07; Contracts; Statute of Frauds 1979 No. XI W and Colk a logging company, received a letter from M, the new owner of a certain property, notifying it that the latter will close the road running thru his property and thru which W & Co.'s trucks pass in hauling logs to its saw mill. W & Co. therefore begged M not to do so and upon the latter's refusal, W & Co. filed an action for injunction alleging among others that it had acquired a right of way through M's land before by virtue of a verbal agreement with the previous owner. Will the action prosper? Why? Answer Yes, the action will prosper. The right of way, although arising from a verbal agreement with the former owner of the land, still subsists. Obviously, the Statute of Frauds cannot be applied because the agreement is not an agreement for the sale of real property or an interest therein. Therefore, the agreement is both valid and enforceable. (Western Mindanao Lumber Co. vs. Medalle, 79 SCR A 702). Alternative Answer Yes, the action will prosper. The right of way, although arising from a verbal agreement with the former owner of the land still subsists. It is a well-settled rule in this jurisdiction that the Statute of Frauds is applicable only to purely executory contracts and not to contracts which have already been executed either totally or partially. Here, the verbal agreement with respect to the right of way had already been totally executed. Besides, there was already acceptance of benefits. Therefore, the agreement is now valid and enforceable at the same time. 07; Contracts; Statute of Frauds; ratification by acceptance 1981 No. 9 "O" verbally leased his house and lot to "L" for two years at a monthly rental of P250 a month. After the first year, "0" demanded a rental of P500.00 claiming that due to the energy crisis, with the sudden increase of the price of oil, which no one expected, there was also a general increase in prices. "O" proved an inflation rate of 100%. When "L" refused to vacate the house, "0" brought an action for ejectment. "O" denied that he had agreed to a lease for two years. a) Can the lessee testify on a verbal contract of lease? Reasons. b) Assuming that "O" admits the two-year contract, is he justified in increasing the rental? Why? Answer (a) Yes, the lessee "L" may testify on the verbal contract of lease. Wellsettled is the rule that the Statute of Frauds by virtue of which oral contracts {such as the contract in the instant case) are unenforceable by court action is applicable only to those contracts which have not been consummated either totally or partially. The reason for this rule is obvious. In effect, there is already a ratification of the contract by acceptance of benefits. Here, "L" has been paying to "O" in monthly rental of P250.00 for one year. The case is, therefore, withdrawn from the coverage of the Statute of Frauds. {Note: The above answer is based on Arts. 1403, No. 2 and 1405 of the Civil Code and on decided cases.) (b) Yes, "O" is justified in increasing the monthly rental. Since it is admitted that the contract of lease is for a definite term or period of two years and since he Page 258 of 391 has established an inflation rate of 100%, it is crystal clear that the case is withdrawn from the coverage of the new rental law. (Note: The above answer is based on Batas Pambansa Blg. 25.) 07; Contracts; stipulation pour atrui 2002 No X. Printado is engaged in the printing business. Suplico supplies printing paper to Printado pursuant to an order agreement under which Suplico binds himself to deliver the same volume of paper every month for a period of 18 months, with Printado in turn agreeing to pay within 60 days after each delivery. Suplico has been faithfully delivering under the order agreement for 10 months but thereafter stopped doing so, because Printado has not made any payment at all. Printado has also a standing contract with publisher Publico for the printing of 10, 000 volumes of school textbooks. Suplico was aware of said printing contract. After printing 1, 000 volumes, Printado also fails to perform under its printing contract with Publico. Suplico sues Printado for the value of the unpaid deliveries under their order agreement. At the same time Publico sues Printado for damages for breach of contract with respect to their own printing agreement. In the suit filed by Suplico, Printado counters that: (a) Suplico cannot demand payment for deliveries made under their order agreement until Suplico has completed performance under said contract; (b) Suplico should pay damages for breach of contract; and (c) with Publico should be liable for Printado’s breach of his contract with Publico because the order agreement between Suplico and Printado was for the benefit of Publico. Are the contentions of Printado tenable? Explain your answers as to each contention. (5%) SUGGESTED ANSWER: No, the contentions of Printado are untenable. Printado having failed to pay for the printing paper covered by the delivery invoices on time, Suplico has the right to cease making further delivery. And the latter did not violate the order agreement (Integrated Packaging Corporation v. Court of Appeals, (333 SCRA 170, G.R. No. 115117, June 8, [2000]). Suplico cannot be held liable for damages, for breach of contract, as it was not he who violated the order agreement, but Printado. Suplico cannot be held liable for Printado’s breach of contract with Publico. He is not a party to the agreement entered into by and between Printado and Publico. Theirs is not a stipulation pour atrui. [Aforesaid] Such contracts do could not affect third persons like Suplico because of the basic civil law principle of relativity of contracts which provides that contracts can only bind the parties who entered into it, and it cannot favor or prejudice a third person, even if he is aware of such contract and has acted with knowledge thereof. (Integrated Packaging Corporation v. CA, supra.) 07; Contracts; stipulation pour atrui 1977 No. VII-b What is a stipulation pour atrui and what are its essential requisites? Give an example. Answer A stipulation pour atrui is a stipulation in a contract, clearly and deliberately conferred by the contracting parties as a favor upon a third person, who must communicate his acceptance to the obligor before it is revoked. Before such a stipulation may be enforced, it is necessary that the following requisites must concur: (1) that it must be for the benefit or interest of the third person; (2) that such Page 259 of 391 benefit or Interest must not be merely incidental; (3) that the contracting parties should have clearly and deliberately conferred such benefit or interest upon the third person; and (4) that the third person should have communicated his acceptance of the benefit or interest to the obligor before its revocation. (Art. 1311, par. 2, Civil Code.) Example: In a contract with X Co., the Philippine National Bank, for a valuable consideration, agreed to cause a sum of money to be paid to A in New York City. If A communicates his acceptance of the benefit to X Co. before it could be revoked by the latter, we have what is commonly known as a stipulation pour atrui. 07; Contracts; void contracts; in pari delicto principle 1977 No, VII-c Discuss the principle of in pari delicto and enumerate five (5) instances in the Civil Code which are exceptions to the principle. Answer When the defect of a void contract consists in the illegality of the cause or object of the contract, and both of the parties are at fault or in pari delicto, the law refuses them every remedy and leaves them where they are. This rule which is embodied in Arts. 1411 of the Civil Code is what is commonly known as the principle of in pari delicto, The exceptions to the principle of pari delicto are the following: (1) Payment of usurious interest. In such case, the law allows the debtor to recover the interest paid in excess of that allowed by the usury laws, with interest thereon from the date of payment. (Art 1413, Civil Code). (2) Payment of money or delivery of property for an illegal purpose, where the party who paid or delivered repudiates the contract bore the purpose has been accomplished, or before any damage has been caused to a third person. In such case, the courts may allow such party to recover what he has paid or delivered if the public interest will thus be sub served. (Art. 1414, Civil Code).s (3) Payment of money or delivery of property by an incapacitated person. In such case, the courts may allow such person to recover what he has paid or delivered, if the interest of justice so demands. (Art, 1415, Civil Code). (4) Agreement or contract which is not illegal per se but is merely prohibited by law, and the prohibition is designed for the protection of the plaintiff. In such case, such plaintiff, if public policy is thereby enhanced, may recover what he has paid or delivered. (Art. 1416. Civil Code). (5) Payment of any amount in excess of the maximum price of any article or commodity fixed by law. In such case, the buyer may recover the excess. (Art. 1417, Civil Code). (6) Contract whereby a laborer undertakes to work longer than the maximum number of hours fixed by law. In such case, the laborer may demand for overtime pay. (Art. 1418, Civil Code). (7) Contract whereby a laborer accepts a wage lower than the minimum wage fixed by law. In such case, the laborer may demand for the deficiency, (Art. 1419, Civil Code). (NOTE: The above exceptions may be tagged or labeled only either by their codal numbers or by any means of identification.) 07; Contracts; void contracts; usurious interests Page 260 of 391 1977 No. X-a The Court found that the loan by C to D of P20,000.00 was usurious, because it provided for the payment P5,000 as interest in 1 year. (1) If the principal and the interest were paid, what can D recover from C? (2) If no payment whatsoever was made, can D resist an action to collect by C on the ground that the transaction is illegal and void? Answer: (1) D can recover from S the entire interest paid by him to the latter with interest thereon from the date of payment. This is expressly directed by the Civil Code (Art. 1418.) True, the Usury Law (Sec. 6) merely states that he can recover only the whole interest paid, but the Civil Code (Art. 1413) adds that the same can be recovered with interest thereon from the date of payment. (Angel Jose Warehousing Co. vs. Ckelda Enterprises, 23 SCRA 119.) (2) No, D cannot. According to the Civil Code (Art. 1420), in case of a divisible contract, if the illegal terms can be separated from the legal ones, the latter may be enforced. In a simple contract of a loan with usurious interest, the prestation of the debtor to pay the principal debt is not illegal; what is illegal is to pay the stipulated interest. Hence, being separable, the latter only should be deemed void. (Angel Jose vs. Chelda, supra; Briones vs, Cammayo, 41 SCRA 404.) 07; Contracts; void vs voidable contracts 2004 No. II A. Distinguish briefly but clearly between: 4. Inexistent contracts and annullable contracts. 07; Contracts; void/unenforceable contracts 1976 No. X-c C, husband of D, sold paraphernal property in her name without her (D's) consent. Was such sale valid, void, voidable, rescissible or unenforceable? Explain. Answer Under the general principle on contracts, the contract is unenforceable if entered into in the name of another without authority. (Article 1317) Assuming that C, the husband of D was the letter's agent, under the law on agency which was taken from the old Statute of Frauds (Art. 1874), if a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void. To reconcile those two provisions, Article 1317 should apply if the property sold was movable and Article 1874 shall apply if the property sold is immovable. Hence it the property is movable, the contract is unenforceable, and if the property is immovable, the contract is void. 07; Contracts; voidable contracts 1990 No 7: X was the owner of a 10,000 square meter property. X married Y and out of their union. A, B and C were born. After the death of Y, X married Z and they begot as children, D, E and F. After the death of X. the children of the first and second marriages executed an extrajudicial partition of the aforestated property on May 1, 1970. D, E and F were given a one thousand square meter portion of the property. They were minors at the time of the execution of the document. D was 17 years old, E was 14and F was 12; and they were made to believe by A, B and C that unless Page 261 of 391 they sign the document they will not get any share. Z was not present then. In January 1974, D,E and F filed an action in court to nullify the suit alleging they discovered the fraud only in 1973. (a) Can the minority of D, E and F be a basis to nullify the partition? Explain your answer. (b) How about fraud? Explain your answer. Answer; (a) Yes, minority can be a basis to nullify the partition because D, E and F were not properly represented by their parents or guardians at the time they contracted the extra-judicial partition. (Articles 1327. 1391, Civil Code). (b) In the case of fraud, when through Insidious words or machinations of one party the other is induced to enter into the contract without which he would not have agreed to, the action still prosper because under Art, 1391 of the Civil Code, in case of fraud, the action for annulment may be brought within four years from the discovery of the fraud. 07; Contracts; voidable contracts 1976 No. VIII-a A, 20, contracted in 1970 with B, 22, an operator of a driving range for golfers, to supply the latter with golf balls. May B annul the contract on the ground that A was incapable of giving consent to a contract? Explain. Answer No, under the law on contracts, only the incapacitated person can bring the action to annul, based on the ground of estoppel. Hence, only A may bring the action to annul. (Article 1397) 1976 No. VIII-b If A claims that he (A) was drunk when the contract was signed, may an action to annul the contract be filed by him in 1975? Explain. Answer No. Contracts agreed upon in a state of drunkenness are voidable but the action to annul on that ground must be brought within four (4) years. (Article 1328, 1391,) Here it was brought beyond the 4-year period. 1976 No. VIII-c If one week after the execution of the contract, B was told by A that A would have the contract annulled as A was drunk at the time of the signing thereof and A continued delivering golf balls for 3 years, will such action by A prosper? Explain. Answer No. The act of A in performing his obligation under the contract after he became of age, constituted ratification and cleanses the contract of all its defects from the time of execution of the agreement. (Article 1396) He may also be barred from bringing the action on the ground of estoppel. 07; Contracts; voidable contracts 1978 No. VI-a A purchased from XYZ subdivision company a lot of three hundred (300) square meters in Cebu on December 3, 1973. Transfer Certificate of Title No. 2537 was issued in his name with the annotation at the back thereof that the lot is subject to the condition that it cannot be resold within the period of ten (10) years and if he is Page 262 of 391 forced to resell, he may resell it only to XYZ subdivision company. A year later, A executed a real estate mortgage in favor of B upon a P5,000 loan, which was registered with the Register of Deeds. A and B were aware of the condition in favor of XYZ subdivision company. Upon A's failure to redeem the property in 1927, B was the highest bidder at the foreclosure sale conducted by the sheriff and was issued a certificate of sale which was registered with the Register of Deeds. A later brought an action to annul the sale on the ground that it violated the condition. Decide the case with reasons. Answer: The action brought by A against B to annul the sheriff's sale will not prosper. Both parties are equally guilty of breaching the condition in favor of XYZ subdivision, a condition known to both of them. Under both the principle of estoppel and of pari delicto, neither one of sale. Besides, and this is decisive, the proper party who should institute the action is XYZ subdivision and not A. Under the law on defective contracts, in actions for annulment of rescission, it is the party who is damaged or prejudiced who should institute the action and not the party who, with another or others, was responsible for the breach or damage. (NOTE: The above answer is based on Art. 1431, with respect to pari delicto, and Art 1397, Civil Code, with respect to proper party in actions for annulment.) 07; Contracts; voidable contracts 1979 No. X Mrs. S borrowed P20,000 from PG, She and her 19-year old son, Mario, signed the promissory note for the loan, which note did not say anything- about the capacity of the signers. Mrs. S made partial payments little by little. After seven (7) years she died leaving a balance of P10,000.00 on the note. PG demanded payment from Mario who refused to pay. When sued for the amount, Mario raised the defense: that when he signed the note he was still a minor. Should the defense be sustained? Why? Answer The defense should be sustained. Mario cannot be bound by his signature in the promissory note. It must be observed that the promissory note does not say anything about the capacity of the signers. In other words, there is no active fraud or misrepresentation; there is merely silence or constructive fraud or misrepresentation. It would have been different if the note says that Mario is of age. The principle of estoppel would then apply. Mario would not be allowed to invoke the defense of minority. The promissory note would then have all of the effects of a perfectly valid note. Hence, as far as Mario's share in the obligation is concerned, the promissory note is voidable because of minority or non-age. He cannot, however, be absolved entirely from monetary responsibility. Under the Civil Code, even if his written contract is voidable because of minority he shall make restitution to the extent that he may have been benefited by the money received by him (Art. 1399, Civil Code). (Braganza vs. Villa Abrille, L-12471, April 13, 1959). 07; Estoppel 1987 No. 7: Fred sold to Juan a parcel of land, belonging to his minor son, Lino, then under his guardianship, without judicial approval. After the sale, Juan immediately took possession of the land, built a house and religiously paid the taxes thereon. Nine years thereafter, Lino, no longer a minor, rented the ground floor of the house built by Juan. Lino paid the rent for the first month, then stopped paying. Two years thereafter, when pressed for payment of the accrued rent. Lino refused, claiming Page 263 of 391 ownership over the property, alleging that the sale of the property to Juan while he was A minor without the approval of the guardianship court rendered the sale null and void. Is the claim of Lino valid and meritorious.? Explain. Answer No, Lino's claim is not valid and not meritorious because Lino is in estoppel. A lessee cannot assail the right and title of the lessor and cannot claim ownership as against the lessor. The fact that the sale was made while Lino was a minor is of no moment because he recognized and ratified the contract after he was already of majority age. Answer; No, Lino's claim is not valid and not meritorious because Juan had already become the owner of the land by ordinary acquisitive prescription through adverse possession of the land for over ten (10) years. Answer No, Lino's claim is not valid and not meritorious. Lino can no longer recover the land because of laches. 07; Estoppel 1989 No. 15: (1) What do you understand by ESTOPPEL? What are the different kinds of estoppel? Explain. Answer: The Civil Code enumerates only two (2) kinds of estoppel: estoppel in pais or, by conduct and estoppel by deed. Estoppel in pais or by conduct arises when one by his act, representation, oral admission or by his silence induces another to believe certain facts to exist and the other realize an act on such belief. Estoppel by deed is that by virtue of which a party to a deed and his privies are precluded from asserting as against the other party any right or title in derogation of the deed or any fact asserted therein. Alternative Extended Answer: The Civil Code gives two (2) kinds of estoppel, namely: estoppel in pais and estoppel by deed; and jurisprudence gives a third, namely: estoppel by laches. Estoppel in pais or by conduct arises when one by his act, representation, oral admission or by his silence induces another to believe certain facts to exist and the other realize an act on such belief. Estoppel by deed is that by virtue of which a party to a deed and his privies are precluded from asserting as against the other party by which any right or title in derogation of the deed or any fact asserted therein. Laches is negligence or omission to assert a right within a reasonable time giving rise to the presumption that the party entitled to assert it either has abandoned it or declined to assert it. 07; Estoppel; laches 1988 No. 2: (c) Since 1935, Janice possessed alone a parcel of land which she coowned with Lenny. In 1970, with the knowledge of Lenny, Janice obtained a Torrens title over the land in her own name alone. On August 1, 1988, Lenny Page 264 of 391 brought an action against Janice for reconveyance of her share, Janice set up the defense of laches. Will the defense prosper? Reasons. Answer: (c) It is submitted that the defense of laches will prosper. As held by the Supreme Court in several notable decisions, in order that the doctrine of laches or "stale demands" can be applied, the following elements must concur: (1) Conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation of which complaint is made and for which the complaint seeks a remedy; (2) delay in asserting the complainant's rights, the complainant having had knowledge or notice, of the defendant's conduct and having been afforded an opportunity to institute a suit (3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases the suitand (4) injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held to be barred (Miguel vs. Catalino, 26 SCRA 234). All of these elements are present in the instant case. As a matter of fact, the doctrine was applied to a case wherein co-heir and another were able, through fraud, to register a tract of land in their names. According to the Supreme Court, the action for reconveyance brought by the other co-heirs more than twenty years later is now barred not only by extinctive prescription but also by laches- (Fabian vs. Fabian, 22 SCRA 231). 07; Natural obligations 1977 No. IX-c What are natural obligations? Give an example. Answer Natural obligations are those based on equity and natural law, which are not enforceable by means of a court action, but which, after voluntary fulfillment by the obligor, authorize the retention by the obligee of what has been delivered or rendered by reason thereof. In other words, they refer to those ''obligations without a sanction susceptible of voluntary performance, but not through compulsion by legal means". (4 Tolentino, Civil Code, 1956 Ed., p. 588, citing Colin & Capitant) (NOTE: There are seven examples given in the Civil Code (Arts, 1424 to 1430). Any one of them may be given.) 07; Obligations; alternative obligations 1988 No. 9: (a) Define alternative and facultative obligations. Answer: (a) Alternative obligations refer to those juridical relations which comprehend several objects or prestations which are due, but the payment or performance of one of them would be sufficient. On the other hand, facultative obligations refer to those juridical relations where only one object or prestation has been agreed upon by the parties to the obligation, but the obligor may deliver or render another in substitution. 07; Obligations; alternative/facultative obligations 1977 No. VIII-c Distinguish between alternative and facultative obligations: and between suspensive and resolutory conditions in obligations. Answer Facultative obligations may be distinguished from alternative obligations in the following ways: Page 265 of 391 (1) As to object due: In facultative obligations only one object is due, whereas in alternative obligations several objects are due. (2) As to compliance: Facultative obligations may be complied with by the delivery of another object or the performance of another prestation in substitution of that which is due, whereas alternative obligations may be complied with by the delivery of one of the objects or by the performance of the prestations which are alternative due. (3) As to right of choice: In the first, the right of choice pertains only to the debtor, whereas in the second, the right of choice may pertain even to the creditor or to a third person. (4) As to effect of fortuitous loss: In the first, the loss or impossibility of the object or prestation which is due without any fault of the debtor is sufficient to extinguish the obligation, whereas in the second, the loss or impossibility of all of the objects or prestations which are due without any fault of the debtor is necessary to extinguish the obligation. <6) As to effect of culpable loss: In the first, the culpable loss of the object which the debtor may deliver in substitution before the substitution is effected does not give rise to any liability on the part of such debtor; in the second, the culpable loss of any of the objects which are alternately due before the choice is made may give rise to a liability on the part of the debtor. (NOTES: A brief statement of the first three distinctions should constitute a sufficient answer.) If the suspensive condition is fulfilled, the obligation fulfilled, the obligation is extinguished. If the first arises or becomes effective; if the resolutory condition is not fulfilled, no juridical relation is created; if the second is not fulfilled, the juridical relation is consolidated. In other-words, in the first, rights are not yet acquired, but there is a hope or expectancy that they will soon be acquired; in the second, rights are already acquired, but subject to the threat of extinction. (NOTE: A statement of the substance of the above distinctions should constitute a sufficient answer.) 07; Obligations; civil vs natural oblig 2004 No. II A. obligation. Distinguish briefly but clearly between: 3. Civil obligation and natural 07; Obligations; civil vs natural obligation 1989 No. 15: (2) How is a civil obligation distinguished from a natural obligation? Give an example of a natural obligation. Answer: Civil obligations give a right of action to compel their performance. Natural obligations, not being based on positive law but on equity and natural law, do not grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered on rendered by reason thereof. Example of a natural obligation (one example out of any of the following): 1. When a right to sue upon a civil obligation has lapsed by extinctive prescription, the obligor who voluntarily performs the contract cannot recover what he has delivered or the value of the service he has rendered. Page 266 of 391 2. When without the knowledge or against the will of the debtor a third person pays a debt which the obligor is not legally bound to pay because the action thereon has prescribed, but the debtor later voluntarily reimburses the third person, the obligor cannot recover what he has paid. 3. When a minor between eighteen and twenty-one years of age who has entered into a contract without the consent of the parent or guardian, after the annulment of the contract voluntarily returns the whole thing or price received, notwithstanding the fact that he has not been benefited thereby, there is no right to demand the thing or price thus returned. 4. When a minor between eighteen and twenty-one years of age, who has entered into a contract without the consent of the parent or guardian, voluntarily pays a sum of money or delivers a fungible thing in fulfillment of the obligation, there shall be no right to recover the same from the obligee who has spent or consumed it in good faith. 5. When, after an action to enforce a civil obligation has failed, the defendant voluntarily performs the obligation, he cannot demand the return of what he has delivered or the payment of the value of the service he has rendered, 6. When a testate or intestate heir voluntarily pays a debt of the decedent exceeding the value of the property which he received by will or by the law of intestacy from the estate of the deceased, the payment is valid and cannot be rescinded by the payer. 7. When a will is declared void because it has not been executed in accordance with the formalities required by law, but one of the intestate heirs, after the settlement of the debts of the deceased, pays a legacy in compliance with a clause in the defective will, the payment is effective and irrevocable. 07; Obligations; conditional obligations 1997 No, 14; In two separate documents signed by him, Juan Valentino "obligated" himself each to Maria and to Perla, thus 'To Maria, my true love, I obligate myself to give you my one and only horse when I feel like It." - and 'To Perla, my true sweetheart, I obligate myself to pay you the P500.OO I owe you when I feel like it." Months passed but Juan never bothered to make good his promises. Maria and Perla came to consult you on whether or not they could recover on the basis of the foregoing settings. What would your legal advice be? Answer: I would advise Maria not to bother running after Juan for the latter to make good his promise. [This is because a promise is not an actionable wrong that allows a party to recover especially when she has not suffered damages resulting from such promise, A promise does not create an obligation on the part of Juan because it is not something which arises from a contract, law, quasi-contracts or quasi-delicts (Art, 1157)]. Under Art. 1182, Juan's promise to Maria is void because a conditional obligation depends upon the sole will of the obligor. As regards Perla, the document is an express acknowledgment of a debt, and the promise to pay what he owes her when he feels like it Is equivalent to a promise to pay when his means permits him to do so, and is deemed to be one with Page 267 of 391 an indefinite period under Art. 1180. Hence the amount Is recoverable after Perla asks the court to set the period as provided by Art. 1197, par. 2. 07; Obligations; conditional obligations 1999 No XI In 1997, Manuel bound himself to sell Eva a house and lot which is being rented by another person, if Eva passes the 1998 bar examinations. Luckily for Eva, she passed said examinations. (a) Suppose Manuel had sold the same house and lot to another before Eva passed the 1998 bar examinations, is such sale valid? Why? (2%) (b) Assuming that it is Eva who is entitled to buy said house and lot, is she entitled to the rentals collected by Manuel before she passed the 1998 bar examinations? Why? (3%) ANSWER: (a) Yes, the sale to the other person is valid as a sale with a resolutory condition because what operates as a suspensive condition for Eva operates a resolutory condition for the buyer. FIRS T ALTERNATIVE ANS WER: Yes, the sale to the other person is valid. However, the buyer acquired the property subject to a resolutory condition of Eva passing the 1998 Bar Examinations. Hence, upon Eva's passing the Bar, the rights of the other buyer terminated and Eva acquired ownership of the property. SECOND ALTERNATIVE ANSWER: The sale to another person before Eva could buy it from Manuel is valid, as the contract between Manuel and Eva is a mere promise to sell and Eva has not acquired a real right over the land assuming that there is a price stipulated in the contract for the contract to be considered a sale and there was delivery or tradition of the thing sold. (b) No, she is not entitled to the rentals collected by Manuel because at the time they accrued and were collected, Eva was not yet the owner of the property. FIRST ALTERNATIVE ANSWER: Assuming that Eva is the one entitled to buy the house and lot, she is not entitled to the rentals collected by Manuel before she passed the bar examinations. Whether it is a contract of sale or a contract to sell, reciprocal prestations are deemed imposed A for the seller to deliver the object sold and for the buyer to pay the price. Before the happening of the condition, the fruits of the thing and the interests on the money are deemed to have been mutually compensated under Article 1187. SECOND ALTERNATIVE ANSWER: Under Art. 1164, there is no obligation on the part of Manuel to deliver the fruits (rentals) of the thing until the obligation to deliver the thing arises. As the suspensive condition has not been fulfilled, the obligation to sell does not arise. 07; Obligations; conditional obligations 2000 No XV b) Pedro promised to give his grandson a car if the latter will pass the bar examinations. When his grandson passed the said examinations, Pedro refused to give the car on the ground that the condition was a purely potestative one. Is he correct or not? (2%) Page 268 of 391 SUGGESTED ANSWER: No, he is not correct. First of all, the condition is not purely potestative, because it does not depend on the sole will of one of the parties. Secondly, even if it were, it would be valid because it depends on the sole will of the creditor (the donee) and not of the debtor (the donor). 07; Obligations; conditional obligations 2003 No XIII. Are the following obligations valid, why, and if they are valid, when is the obligation demandable in each case? (a) If the debtor promises to pay as soon as he has the means to pay; (b) If the debtor promises to pay when he likes; (c) If the debtor promises to pay when he becomes a lawyer; (d) If the debtor promises to pay if his son, who is sick with cancer, does not die within one year. 5% SUGGESTED ANSWER: (a) The obligation is valid. It is an obligation subject to an indefinite period because the debtor binds himself to pay when his means permit him to do so (Article 1180, NCC). When the creditor knows that the debtor already has the means to pay, he must file an action in court to fix the period, and when the definite period as set by the court arrives, the obligation to pay becomes demandable 9Article 1197, NCC). (b) The obligation “to pay when he likes” is a suspensive condition the fulfillment of which is subject to the sole will of the debtor and, therefore the conditional obligation is void. (Article 1182, NCC). (c) The obligation is valid. It is subject to a suspensive condition, i.e. the future and uncertain event of his becoming a lawyer. The performance of this obligation does not depend solely on the will of the debtor but also on other factors outside the debtor’s control. (d) The obligation is valid. The death of the son of cancer within one year is made a negative suspensive condition to his making the payment. The obligation is demandable if the son does not die within one year (Article 1185, NCC). 07; Obligations; conditional obligations 1988 No. 8: (b) Distinguish between the effects of suspensive and resolutory conditions upon an obligation. Answer: (b) It is evident that a resolutory condition affects the obligation to which it is attached in a manner which is diametrically opposed to that of a suspensive condition. If the suspensive condition is fulfilled, the obligation arises or becomes effective if the resolutory condition is fulfilled, the obligation is extinguished. If the first is not fulfilled, the juridical relation is created; if the second is not fulfilled, the juridical relation is consolidated. In other words, in the first, rights are not yet acquired, but there is a hope or expectancy that they will soon be acquired; in the second, rights are already acquired, but subject to the threat of extinction (8 Manresa, 5th Ed., Bk. 1, p. 311.) 07; Obligations; conditional obligations Page 269 of 391 1975 No. XIII A owed B a certain sum of money. C wrote B a letter stating that he would be the one to take care of A's debt as soon as A had made a shipment of logs to Japan. A never made such shipment, C did not pay B. Is C liable to B? Explain. Answer No, C is not liable to B. C did not assume the obligation of A. C merely stated that he will "take care" of A's debt. Moreover, even if C assumed liability, the suspensive condition—namely, the shipment by A of logs to Japan, was never fulfilled. C's obligation never arose. Under Article 1181 of the Civil Code, in conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already acquired, shall depend upon the happening of the event which constitutes the condition. (Villanueva v. Girged, 110 Phil. 478) 07; Obligations; exemption from liability due to fortuitous events; exceptions 1983 No. 11 Cite three instances where a person is made civilly liable for failure to comply with his obligations although he was prevented from doing so by a fortuitous event. Answer (a) When the loss is due to the debtor's fault. (b) When the debtor has incurred in delay, (c) When he has promised to deliver the same thing to 2 or more different persons who do not have the same interest, (d) When it is expressly stipulated. (e) When the law expressly provides so, (f) When the nature of the obligation requires the assumption of risk, and (g) When the thing to be delivered is indeterminate, the loss of a thing of the same kind, even if due to a fortuitous event, does not extinguish the obligation. 07; Obligations; extinguishment of a cause of action 2004 No. I B. TX filed a suit for ejectment against BD for non-payment of condominium rentals amounting to P150,000. During the pendency of the case, BD offered and TX accepted the full amount due as rentals from BD, who then filed a motion to dismiss the ejectment suit on the ground that the action is already extinguished. Is BD’s contention correct? Why or why not? Reason. (5%) 07; Obligations; extinguishment; assignment of rights 2001 No XI The sugar cane planters of Batangas entered into a long-term milling contract with the Central Azucarera de Don Pedro Inc. Ten years later, the Central assigned its rights to the said milling contract to a Taiwanese group which would take over the operations of the sugar mill. The planters filed an action to annul the said assignment on the ground that the Taiwanese group was not registered with the Board of Investments. Will the action prosper or not? Explain briefly. (5%) (Note: The question presupposes knowledge and requires the application of the provisions of the Omnibus Investment Code, which properly belongs to Commercial law) Page 270 of 391 SUGGESTED ANSWER The action will prosper not on the ground invoked but on the ground that the farmers have not given their consent to the assignment. The milling contract imposes reciprocal obligations on the parties. The sugar central has the obligation to mill the sugar cane of the farmers while the latter have the obligation to deliver their sugar cane to the sugar central. As to the obligation to mill the sugar cane, the sugar central is a debtor of the farmers. In assigning its rights under the contract, the sugar central will also transfer to the Taiwanese its obligation to mill the sugar cane of the farmers. This will amount to a novation of the contract by substituting the debtor with a third party. Under Article 1293 of the Civil Code, such substitution cannot take effect without the consent of the creditor. The formers, who are creditors as far as the obligation to mill their sugar cane is concerned, may annul such assignment for not having given their consent thereto. ALTERNATIVE ANSWER The assignment is valid because there is absolute freedom to transfer the credit and the creditor need not get the consent of the debtor. He only needs to notify him. 07; Obligations; extinguishment; compensation 2002 No IX. Stockton is a stockholder of Core Corp. He desires to sell his shares in Core Corp. In view of a court suit that Core Corp. has filed against him for damages in the amount of P 10 million, plus attorney’s fees of P 1 million, as a result of statements published by Stockton which are allegedly defamatory because it was calculated to injure and damage the corporation’s reputation and goodwill. The articles of incorporation of Core Corp. provide for a right of first perusal in favor of the corporation. Accordingly, Stockton gave written notice to the corporation of his offer to sell his shares of P 10 million. The response of Core corp. was an acceptance of the offer in the exercise of its rights of first refusal, offering for the purpose payment in form of compensation or set-off against the amount of damages it is claiming against him, exclusive of the claim for attorney’s fees. Stockton rejected the offer of the corporation, arguing that compensation between the value of the shares and the amount of damages demanded by the corporation cannot legally take effect. Is Stockton correct? Give reason for your answer. (5%) SUGGESTED ANSWERS: Stockton is correct. There is no right of compensation between his price of P 10 million and Core Corp.’s unliquidated claim for damages. In order that compensation may be proper, the two debts must be liquidated and demandable. The case for the P 10 million damages being still pending in court, the corporation has as yet no claim which is due and demandable against Stockton. ANOTHER MAIN ANSWER: The right of first refusal was not perfected as a right for the reason that there was a conditional acceptance equivalent to a counter-offer consisting in the amount of damages as being credited on the purchase price. Therefore, compensation did not result since there was no valid right of first refusal (Art. 1475 & 1319, NCC) ANOTHER MAIN ANSWER: Even [if] assuming that there was a perfect right of first refusal, compensation did not take place because the claim is unliquidated. 07; Obligations; extinguishment; compensation Page 271 of 391 1981 No. 8 "B" borrowed from "C" Pl,000.00 payable in one year. When "C" was in the province, "C's" 17-year old son, borrowed P500 from "B" for his school tuition. However, the son spent it instead nightclubbing. When the debt to "C" fell due, "B" tendered only P500, claiming compensation on the P500 borrowed by "C's" son, a) Is there legal compensation? Why? b) Suppose the minor son actually used the money for school tuition, would the answer be different? Reasons. Answer (a) There is no legal compensation. Under the Civil Code, in order that there will be a valid and effective compensation, it is essential that there must be two parties, who in their own right, are principal creditors and principal debtors of each other. In the instant case, "C" cannot be considered as a party to the act of his 17year old son in borrowing P500.00 from "B ". Consequently, he did not become a principal debtor of "B"; neither did "B" become a principal creditor of "C". Therefore, there can be no partial compensation of the P1 ,000,00 borrowed by "B" from "C". (Note: The above answer is based on Arts. 1278 and 1279, No. (1), of the Civil Code and on decided cases.) (b) There would be no difference in any answer. There will still be no legal compensation. The fact that "C's" son actually used the P500.00 for his school tuition did not make "C" a party to the contract between his son and "B". Therefore, "C" is not the principal debtor of "B" and "B" is not the principal creditor of "C" with respect to said amount. (Note: The above answer is based on Arts. 1278 and 1279, No. UK Civil Code.) 07; Obligations; extinguishment; compensation vs payment 1998 No XIV. 1. Define compensation as a mode of extinguishing an obligation, and distinguish it from payment. |2%] 2. X, who has a savings deposit with Y Bank in the sum of P1 ,000,000.00, incurs a loan obligation with the said Bank in the sum of P800.000.00 which has become due. When X tries to withdraw his deposit, Y Bank allows only P200.000.00 to be withdrawn, less service charges, claiming that compensation has extinguished its obligation under the savings account to the concurrent amount of X's debt. X contends that compensation is improper when one of the debts, as here, arises from a contract of deposit. Assuming that the promissory note signed by X to evidence the loan does not provide for compensation between said loan and his savings deposit, who is correct? [3%] Answer: 1. Compensation is a mode of extinguishing to the concurrent amount, the obligations of those persons who In their own right are reciprocally debtors and creditors of each other (Tolentino, 1991 ed., p. 365, citing 2 Castan 560 and Francia vs. IAC. 162 SCRA 753). It involves the simultaneous balancing of two obligations in order to extinguish them to the extent in which the amount of one is covered by that of the other. (De Leon, 1992 ed., p. 221, citing 8 Manresa 401). Payment means not only delivery of money but also performance of an obligation (Article 1232, Civil Code). In payment, capacity to dispose of the thing Page 272 of 391 paid and capacity to receive payment are required for debtor and creditor, respectively: in compensation, such capacity is not necessary, because the compensation operates by law and not by the act of the parties. In payment, the performance must be complete; while in compensation there may be partial extinguishment of an obligation (Tolentino, supra) Answer: 2. Y bank is correct. An. 1287, Civil Code, does not apply. All the requisites of Art. 1279, Civil Code are present. In the case of Gullas vs. PNB [62 Phil. 519), the Supreme Court held: "The Civil Code contains provisions regarding compensation (set off) and deposit. These portions of Philippine law provide that compensation shall take place when two persons are reciprocally creditor and debtor of each other. In this connection, it has been held that the relation existing between a depositor and a bank is that of creditor and debtor, x x x As a general rule, a bank has a right of set off of the deposits in its hands for the payment of any indebtedness to it on the part of a depositor." Hence, compensation took place between the mutual obligations of X and Y bank. 07; Obligations; extinguishment; compensation: payment: confusion: set-off 1977 No X-b Differentiate compensation from payment, from confusion and from set-off. Answer Compensation may be distinguished from payment in the following ways: (1) The requisites prescribed by law for compensation are different from those prescribed by law for payment. (2) Compensation takes effect by operation of law, whereas payment takes effect by act of the parties. (3) Capacity to give and to acquire is not necessary in compensation, but it is essential in payment. (4) Compensation is, as a rule, partial, whereas payment is, as a rule, complete and indivisible. Compensation may be distinguished from confusion in the following ways; (1) As to number of persons, in compensation there must be two persons, who, in their own right, are creditors and debtors of each other, whereas in confusion there is only one person in whom is merged the qualities of creditor and debtor. (2) As to number of obligations, in compensation there must be at least two, whereas in confusion there is only one. Compensation following ways: may be distinguished from set-off or counterclaim in the (1) Compensation requires that the two debts must consists in money, or if the things due are fungibles, they must be of the same kind and quality, but in counterclaim this is not necessary. (2) Compensation, as a general rule, requires that the debts must be liquidated, but counterclaim does not. (3) Compensation need not be pleaded, whereas a counterclaim must be pleaded to be effectual. 07; Obligations; extinguishment; condonation Page 273 of 391 2000 No VII a) Arturo borrowed P500,000.00 from his father. After he had paid P300,000.00, his father died. When the administrator of his father's estate requested payment of the balance of P200,000.00. Arturo replied that the same had been condoned by his father as evidenced by a notation at the back of his check payment for the P300,000.00 reading: "In full payment of the loan". Will this be a valid defense in an action for collection? (3%) SUGGESTED ANSWER; It depends. If the notation "in full payment of the loan" was written by Arturo's father, there was an implied condonation of the balance that discharges the obligation. In such case, the notation is an act of the father from which condonation may be inferred. The condonation being implied, it need not comply with the formalities of a donation to be effective. The defense of full payment will, therefore, be valid. When, however, the notation was written by Arturo himself. It merely proves his intention in making that payment but in no way does it bind his father (Yam v. CA, G.R No. 104726. 11 February 1999). In such case, the notation was not the act of his father from which condonation may be Inferred. There being no condonation at all. the defense of full payment will not be valid. ALTERNATIVE ANSWER: If the notation was written by Arturo's father, it amounted to an express condonation of the balance which must comply with the formalities of a donation to be valid under the 2nd paragraph of Article 1270 of the New Civil Code. Since the amount of the balance is more than 5,000 pesos, the acceptance by Arturo of the condonation must also be in writing under Article 748. There being no acceptance in writing by Arturo, the condonation is void and the obligation to pay the balance subsists. The defense of full payment is, therefore, not valid. In case the notation was not written by Arturo's father, the answer is the same as the answers above. 07; Obligations; extinguishment; dation 1986 No. 9. On due date, Mayutang, finding himself unable to pay Makaragdag his P5OO,OOO.OO obligation, proposed in a letter to Makaragdag that he would deed over to Makaragdag his Mercedes Benz car, "to be applied to the amount which I owe you." The following week, Mayutang sent the car to Makaragdag with the proper deed of conveyance. It was accepted. Was the arrangement a valid way of settling the obligation? Explain. After the delivery of the car would Makaragdag have any further claim against Mayutang if the value of the car is found to be Less than the P500,000.00 obligation? Explain. Answer The general rule according to commentators (Castan and Manresa) is that dation extinguishes in full the obligation-the exception is a contrary agreement because then it becomes assignment of rights - hence valid only up to the value. Answer - The arrangement was a valid way of settling the obligation. The law provides that payment for an obligation may be made by delivery of other property. Answer - The creditor can claim the deficiency because the-debt shall only be extinguished up to extent of the value of the property given to him, since the agreement was that the car was "to be applied "to the amount owed. Page 274 of 391 Answer - Yes, the arrangement was a valid way of settling the obligation. Under the Civil Code, there are several special forms of payment which will have all of the effects of a valid payment. One of them is dation in payment (dacion en pago). It is defined as the transmission of the ownership of a thing by the debtor to the creditor as the accepted equivalent of the performance of an obligation, According to the Civil Code, the law on sales shall govern the transaction. Thus, in the instant problem, the Mercedes Benz car is considered the object of the contract of sale, while the debt of P500,000 is considered the purchase price. If the value of the car is found to be less than the P500,000.00 obligation, would Makaragdag have any further monetary claim against Mayutang? Normally, dacion en pago has the effect of extinguishing the obligation to the extent of the value of the thing delivered either as agreed upon or as may be proved, unless the silence of the parties signifies that they consider the delivery of the thing as the equivalent of the performance of the obligation. It must be observed, however, that Makaragdag accepted the delivery of the car without any protest or objection. The entire obligation, therefore, is deemed fully complied with. (Note: The above answer is based upon Arts. 1245 and 1235 of the Civil Code and upon Lopez vs. CA, 114 SCRA 671.) Answer - The arrangement is a valid way of settling the obligation which is known as "dacion en pago." As to whether the delivery of the car was in "full satisfaction" of the debt or to be merely "applied" to the whole indebtedness is another question. The interpretation of their agreement would depend on the difference between the value of the car and P500,000.00. If the difference is very great, the intention of the parties would be that the car is not in "full satisfaction" of the debt. 07; Obligations; extinguishment; dation in payment vs assignment 1989 No. 8: (2) What is dation in payment and how is it distinguished from assignment of property? Answer: Dation in payment is a special form of payment whereby property is alienated to the creditor in satisfaction of a debt in money. Assignment of property, or payment by cession, is a special form of payment whereby the debtor cedes or assigns his property to his creditors so that the proceeds thereof will be applied in payment of his debts. Alternative Answer; In dation in payment whereby property is given by the debtor to the creditor in payment of a debt in money, there is only one creditor. In assignment of property, there are several creditors. In the former, the debtor may be solvent. In the latter, there may be partial insolvency. In the former, particular property is ceded. In the latter, all the property of the debtor is ceded. In the former, the particular obligation is extinguished in whole or in part as agreed upon. In the latter, it releases the debtor from the net proceeds only, unless otherwise agreed or intended. 07; Obligations; extinguishment; extraordinary inflation or deflation 2001 No X Page 275 of 391 On July 1, 1998, Brian leased an office space in a building for a period of five years at a rental rate of P1,000.00 a month. The contract of lease contained the proviso that "in case of inflation or devaluation of the Philippine peso, the monthly rental will automatically be Increased or decreased depending on the devaluation or inflation of the peso to the dollar." Starting March 1, 2001, the lessor increased the rental to P2,000 a month, on the ground of inflation proven by the fact that the exchange rate of the Philippine peso to the dollar had Increased from P25.00=$1.00 to P50.00=$1.00. Brian refused to pay the increased rate and an action for unlawful detainer was filed against him. Will the action prosper? Why? (5%) SUGGESTED ANSWER The unlawful detainer action will not prosper. Extraordinary inflation or deflation is defined as the sharp decrease in the purchasing power of the peso. It does not necessarily refer to the exchange rate of the peso to the dollar. Whether or not there exists an extraordinary inflation or deflation is for the courts to decide. There being no showing that the purchasing power of the peso had been reduced tremendously, there could be no inflation that would justify the increase in the amount of rental to be paid. Hence, Brian could refuse to pay the increased rate. ALTERNATIVE ANSWER. The action will not prosper. The existence of inflation or deflation requires an official declaration by the Bangko Sentral ng Pilipinas. ALTERNATIVE ANSWER: The unlawful detainer action will prosper. It is a given fact in the problem, that there was Inflation, which caused the exchange rate to double. Since the contract itself authorizes the increase in rental in the event of an inflation or devaluation of the Philippine peso, the doubling of the monthly rent is reasonable and is therefore a valid act under the very terms of the contract. Brian's refusal to pay is thus a ground for ejectment. 07; Obligations; extinguishment; loss 1994 No, 17; Dino sued Ben for damages because the latter had failed to deliver the antique Marcedes Benz car Dino had purchased from Ben, which was—by agreement—due for delivery on December 31,1993. Ben, in his answer to Dino's complaint, said Dino's claim has no basis for the suit, because as the car was being driven to be delivered to Dino on January 1, 1994, a reckless truck driver had rammed into the Mercedes Benz. The trial court dismissed Dino's complaint, saying Ben's obligation had. indeed, been extinguished by force majeure. Is the trial court correct? Alternative Answers: a) No. Article 1262, New Civil Code provides, "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. b) The judgment of the trial court is incorrect. Loss of the thing due by fortuitous events or force majeure is a valid defense for a debtor only when the debtor has not incurred delay. Extinguishment of liability for fortuitous event requires that the debtor has not yet incurred any delay. In the present case, the debtor was in delay when the car was destroyed on January 1,1993 since it was due for delivery on December 31, 1993. (Art. 1262 Civil Code) c) It depends whether or not Ben the seller, was already in default at the time of the accident because a demand for him to deliver on due date was not complied with by him. That fact not having been given in the problem, the trial court Page 276 of 391 erred in dismissing Dino's complaint. Reason: There is default making him responsible for fortuitous events Including the assumption of risk or loss. If on the other hand Ben was not in default as no demand has been sent to him prior to the accident, then we must distinguish whether the price has been paid or not. If it has been paid, the suit for damages should prosper but only to enable the buyer to recover the price paid. It should be noted that Ben. the seller, must bear the loss on the principle of res perit domino. He cannot be held answerable for damages as the loss of the car was not imputable to his fault or fraud. In any case, he can recover the value of the car from the party whose negligence caused the accident. If no price has been paid at all, the trial court acted correctly in dismissing the complaint. 07; Obligations; extinguishment; loss; impossible service 1993 No. 11 In 1971, Able Construction, Inc. entered into a contract with Tropical Home Developers, Inc. whereby the former would build for the latter the houses within Its subdivision. The cost of each house, labor and materials included, was P100,000.00. Four hundred units were to be constructed within five years. In 1973, Able found that it could no longer continue with the job due to the increase in the price of oil and its derivatives and the concomitant worldwide spiraling of prices of all commodities, including basic raw materials required for the construction of the houses. The cost of development had risen to unanticipated levels and to such a degree that the conditions and factors which formed the original basis of the contract had been totally changed. Able brought suit against Tropical Homes praying that the Court relieve it of its obligation. Is Able Construction entitled to the relief sought? Answer; Yes, the Able Construction. Inc. is entitled to the relief sought under Article 1267, Civil Code. The law provides: "When the service has become so difficult as to be manifestly beyond the contemplation of the parties, the obligor may also be released therefrom, in whole or in part." 07; Obligations; extinguishment; novation 1977 No. XIV-b R borrowed P5,000 from H and he authorized his bank to pay the loan. The bank agreed. Eventually, the bank paid only P2,550.00 H sued both R and the bank. Discuss the bank's liability. Answer The bank cannot be held liable for the remaining P2,500. Even assuming that H gave his consent to R's proposal that the bank shall pay his indebtedness of P5,000, in reality, there was no substitution of debtor by delegation resulting in a novation of the obligation. There was merely an authorization, which was accepted by the bank, that the latter shall pay R's debt. As it turned out, the bank paid only P2,500.00 to H. Beyond that amount, the bank cannot be held liable. (Hodges vs. Key, 111 Phil. 219). 07; Obligations; extinguishment; novation 1988 No. 11: (a) Suppose that under an obligation imposed by a final judgment, the liability of the judgment debtor is to pay the amount of P6,000.00 but both the judgment debtor and the judgment creditor subsequently entered into a contract Page 277 of 391 reducing the liability of the former to only P4,000.00, is there an implied novation which will have the effect of extinguishing the judgment obligation and creating a modified obligatory relation? Reasons. Answer: There is no implied novation in this case. We see no valid objection to the judgment debtor and the judgment creditor in entering into an agreement regarding the monetary obligation of the former under the judgment referred to. The payment by the judgment debtor of the lesser amount of P4,000, accepted by the creditor without any protest or objection and acknowledged by the latter as in full satisfaction of the money judgment, completely extinguished the judgment debt and released the debtor from his pecuniary liability. Novation results in two stipulations—one to extinguish an existing obligation, the other to substitute a new one in its place. Fundamental it is that novation effects a substitution or modification of an obligation by another or an extinguishment of one obligation by the creation of another. In the case at hand, we fail to see what new or modified obligation arose out of the payment by judgment debtor of the reduced amount of P4,000 to the creditor. Additionally, to sustain novation necessitates that the same be so declared in unequivocal terms clearly and unmistakably shown by the express agreement of the parties or by acts of equivalent import—or that there is complete and substantial incompatibility between the two obligations. (Sandico vs. Piguing, 42 SCRA322.) Suggested Alternative Answers To: No. 11(a): (a) (1) There remains an obligation on the basis of the facts given. There is no showing in the facts that the P4,000 has been paid so it created a modified obligatory obligation no longer based on the judgment but based on the novatory agreement. (2) There is no implied novation. Instead there has been a partial remission in the amount of P2,000 leaving P4,000 still enforceable under the judgment. (3) It can amount to a compromise. A final judgment which has not yet been fully satisfied may be the subject of a compromise. The compromise partakes the nature of a novation. Article 204; provides that: "If one of the parties fails or refuses to abide by the compromise, the other party may either enforce the compromise or regard it as rescinded and insist upon his original demand." (Gatchalian vs, Arlegui 75 SCRA 234; Dormitorio vs. Fernandez 72 SCRA 388). 07; Obligations; extinguishment; novation 1982 No. 19 ABC Trading Co., a domestic corporation engaged in the sale of automobile spare parts, opened with "X" Bank letter of credit up to the extent of P450,000.00 for a period of one year. To secure payment thereof, it executed a chattel mortgage over its stocks-in-trade valued at 7500,000.00. On May 15, and June 15r 1981, Mr. "Y", president and general manager of ABC Trading drew against this letter of credit by means of promissory notes in the total amount of P430,000.00, payable within 30 days from the respective dates of the promissory notes with interest of 10%. Upon maturity of said notes, ABC Trading failed to pay, but was able to negotiate for an extension of six (6) months within which to pay said amount, in return for the additional security posted by Mr. "Y" consisting- of a real estate mortgage over his land in Manila. At the end of 6 months, ABC Trading Co. failed to pay the amount due despite repeated demands by "X" Bank. "X" Bank filed an action for foreclosure Page 278 of 391 of the chattel mortgage executed by ABC Trading. ABC Trading opposed said action contending that the chattel mortgage has been novated by the real estate mortgage executed by Mr. "Y" in favor of "X" Bank. Is the contention of ABC Trading Co. tenable? Reasons. Answer The contention of ABC Trading Co. that the chattel mortgage has been novated by the real estate mortgage executed by Mr. "Y" in favor of "X" Bank is untenable. Well-settled is the rule that in order that there will be a novation, there must be complete incompatibility between the two obligations. And the test of incompatibility is simple. All that we have to ask is: Can the two obligations stand together. If they can then there is no incompatibility. If there is no incompatibility, then there is no novation. However, if they cannot stand together, then there is incompatibility. If there is incompatibility, then there is a novation. Applying the test to the instant case, it is clear that the two obligations can stand together. Therefore, there is no novation* (Note: The above answers is based on Arts. 1291(1) and 1292 of the Civil Code and on decided cases, such as Bank of PI. vs. Herridge, 47 Phil. 57; Ynchausti & Co. vs. Yulo, 34 Phil. 978; Pascual vs. Lacsamana,, 400 Phil. 381; La Tondena, vs. Alto Surety & Ins. Co., 101 Phil. 879.) 07; Obligations; extinguishment; novation 1978 No. V-a A bought from B a parcel of land and paid the purchase price except for an unpaid balance of P6,000. A, therefore, executed a promissory note for the balance of P6,000 with interest at ten per cent (10%) to be paid within sixty (60) days. On the same date, C surety company executed a bond in favor of B for the amount of P6,000 representing the unpaid balance of the purchase price of the parcel of land, without any stipulation regarding payment of interest. On the due date, A failed to pay, and C surety company paid P6,000 to B. B then sued A for the accumulated interest on the principal of P6,000. A claimed novation of the obligation when B accepted unqualifiedly the surety bond which merely guaranteed payment of P6,000. Is A correct? Explain your answer. Answer A is not correct. There is no novation so long as there is no agreement that the principal debtor (a) shall be released from responsibility, Here, there is no such agreement. True, C surety company executed a bond in favor of B for the amount of P6,000, but that did not have the effect of releasing A from the obligation. The surety bond is not a new and separate contract but is merely an accessory of the original contract entered into by and between A and C surety company on one hand and B on the other hand. It provided merely for a more definite and solid arrangement for payment. Therefore, A and B are still bound under their old contract. The former is still liable for accumulated interests on the principal of P6,000. (NOTE: The above answer is based on Arts. 1291, No. 1, and 1292, Civil Code, and on Dungo vs. Lopena, L-18377, Dec. 29, 1962, and Magdalena Estate vs. Rodriguez, 18 SCRA 967.) Alternative Answer A is not correct. The defense of implied novation requires clear and convincing proof of complete incompatibility between the two obligations. The test is whether the two obligations can stand together. If they cannot, incompatibility arises, and the second obligation novates the first. If they can stand together, no incompatibility results and novation does not take place. Applying this test to the Page 279 of 391 instant-case, it is clear that the original contract between A and B and the surety bond executed by C surety company can stand together. The bond is merely an accessory of the original contract. Therefore, there is no novation. (NOTE: The above answer-is based on decided cases applying Arts. 1291, No. 1, and 1292 of the Civil Code.) 07; Obligations; extinguishment; novation 1994 No. 11: In 1978, Bobby borrowed Pl,000,000.00 from Chito payable in two years. The loan, which was evidenced by a promissory note, was secured by a mortgage on real property. No action was filed by Chito to collect the loan or to foreclose the mortgage. But in 1991, Bobby, without receiving any amount from Chito, executed another promissory note which was worded exactly as the 1978 promissory note, except for the date thereof, which was the date of its execution. 1) Can Chito demand payment on the 1991 promissory note in 1994? 2) Can Chito foreclose the real estate mortgage if Bobby fails to make good his obligation under the 1991 promissory note? Answer: 1) Yes, Chito can demand payment on the 1991 promissory note in 1994. Although the 1978 promissory note for P1 million payable two years later or in 1980 became a natural obligation after the lapse of ten (10) years, such natural obligation can be a valid consideration of a novated promissory note dated in 1991 and payable two years later, or in 1993. All the elements of an implied real novation are present: a) an old valid obligation; b) a new valid obligation; c) capacity of the parties; d) animus novandi or intention to novate; and e) The old and the new obligation should be incompatible with each other on all material points (Article 1292). The two promissory notes cannot stand together, hence, the period of prescription of ten (10) years has not yet lapsed. 2) No. The mortgage being an accessory contract prescribed with the loan. The novation of the loan, however, did not expressly include the mortgage, hence, the mortgage is extinguished under Article 1296 of the NCC. The contract has been extinguished by the novation or extinction of the principal obligation insofar as third parties are concerned. 07; Obligations; extinguishment; novation 1979 No. XII T borrowed P10,000.00 from a bank executing a promissory note therefore wherein it is expressly stated that the note is due 120 days thereafter. On the date of maturity T pays only the very small amount of P200.00 plus interest in advance for the renewal of the note for another 60 days. For almost two years the bank was very lenient with T and allowed him to renew his note in the same manner more than 10 times until finally the bank management had to make demand for payment of the balance of P8,000.00 after the expiration of the date of last renewal. Upon T's failure to pay, the bank filed an action for collection of said balance. T raised the defense that the action is premature because the bank by its conduct had impliedly agreed Page 280 of 391 that the payment of the note is to be made as the financial means of T warrants. Should the defense be sustained? Why? Answer The defense should not be sustained. The acts of leniency of the bank in accepting partial payments for a period of two years by virtue of BO many renewals or extensions should not be interpreted as a novation of the original obligation. The bank was merely compassionate. It is a well-settled rule in this jurisdiction that the extension of the period for payment or postponement of the date of payment does not result in a novation. There is no clear case of incompatibility between such extension or postponement and the original obligation; neither is there a change in the obligatory relation of the parties which will alter the essence of the original obligation. 07; Obligations; extinguishment; payment 1986 No. 8. Mr. Magaling obtained a judgment against Mr. Mayaman in the amount of P500,000.00. A writ of execution was issued pursuant to which various personal properties of Mayaman were levied upon by the sheriff. An auction sale was scheduled. Before the appointed day of the auction. Mayaman delivered to the sheriff a cashier's check of Far East Bank in the amount of .P200,000.00 and enough cash to cover the remainder of the total amount due. Magaling refused to accept the check and asked the sheriff to proceed with the auction sale. Did Magaling have the right to refuse the payment of part of the obligation with a cashier's check? Explain. Answer: Magaling did not have the right to refuse the payment of part of the obligation with a cashier's check. The Central Dank Act provides that a check which has been cleared and credited to the account of the creditor shall be equivalent to a delivery to the creditor in cash in an amount equal to the amount credited to his account. Analyzing the above provision, it is clear that the cashier's check of Far East Bank, a reputable bank, and credited to the account of Mayaman has legal tender power. Therefore, there was no basis for Magaling in refusing payment of the obligation. (Note: — The above answer is based on Art. 1249 of the Civil Code. The exception in New Pacific Timber and Supply -Co. vs. Seneris, 101 SCRA 686, refers to "Certified Check" because the reason given in that case was based on Sec. 63 of the Central Bank Act. However, a contrary answer that "Cashier's Check" is payment in cash may be considered correct because the above case confused cashier's check with certified check - hence examinee should be given benefit of doubt.) Answer - It is well settled that a cashier's check is as good as cash. The law, however, provides that a creditor may refuse payment if it is other than legal tender. Although the creditor has the right to refuse the payment in the form of the check, he cannot do so without any justifiable reason. Under the Chapter on Human Relations in the Civil Code, a person, in the exercise of his rights, must act with justice x x x. Therefore, although technically the creditor can refuse the check, he could be made liable if he refused the cashier's check for no good reason or in bad faith. Page 281 of 391 Answer - Although a cashier's check may be as good as cash, still it is not legal tender, and the sheriff may refuse to accept the check, as it does not produce the effect of payment until cashed. 07; Obligations; extinguishment; payment 1981 No. 11 "S", an American resident of Manila, about to leave on a vacation, sold his car to "B" for U.S. $2,000.00, the payment to be made ten days after delivery to "X", a third party depositary agreed upon, who shall deliver the car to "B" upon receipt by "X" of the purchase price. It was stipulated that ownership is retained by "S" until delivery of the car to "X". Five days after delivery of the car to "X", it was destroyed in a fire which gutted the house of "X", without the fault of either "X" or "B". a) Is buyer "B" still legally obligated to pay the purchase price? Explain. b) May seller "S" demand payment in U.S. dollar? Why? Answer (a) Yes, B is still legally obligated to pay the purchase price... (b) The seller "S" cannot demand payment in U.S. dollars. According to the law, an agreement that payment shall be made in currency other than Philippine currency is void because it is contrary to public policy. That does not mean, however, that "S" cannot demand payment from "B." He can demand payment, but not in American dollars. Otherwise, there would be unjust enrichment at the expense of another. Payment, therefore, should be made in Philippine currency, (Note: The above answer is based on R.A. No. 529 and on Ponce vs. CA, May 31, 1979.) 07; Obligations; extinguishment; payment 1983 No. 13 A owes B P20,000 which became due and payable last October 1, 1983. On that date, A offered B P10,000 the only money he then had, but B refused to accept the payment. A thereafter met C, B's 22-year old son, to whom he gave the P10,000 with the request that he turn the money over to B. The money was stolen while in C's possession. Was B justified in refusing to accept the payment of A? May he still recover the full amount of his debt of P20,000? Why? Answer Yes, the creditor cannot be compelled to receive partial payments of the obligation due him, there being no stipulation to the contrary. B may still demand full payment of the sum due him. The payment to his son, who does not appear to have been authorized to receive it, is invalid, the creditor not having received any benefit therefrom. 07; Obligations; extinguishment; payment 1995 No. 12; In 1983 PHILCREDJT extended loans to Rivett-Strom Machineries, Inc. (RIVETTT-STROM), consisting of US$10 Million for the cost of machineries imported and directly paid by PHTLCREDIT, and 5 Million in cash payable in installments over a period of ten (10) years on the basis of the value thereof computed at the rate of exchange of the U.S. dollar vis-à-vis the Philippine peso at the time of payment. Page 282 of 391 RIVETT-STROM made payments on both loans which if based on the rate of exchange In 1983 would have fully settled the loans. PHILCREDIT contends that the payments on both loans should be based on the rate of exchange existing at the time of payment, which rate of exchange has been consistently increasing, and for which reason there would still be a considerable balance on each loan. Is the contention of PHILCREDIT correct? Discuss fully. Answer: As regards the loan consisting of dollars, the contention of PHILCREDIT is correct. It has to be paid in Philippine currency computed on the basis of the exchange rate at the time of payment of each installment, as held in Kalalo v. Luz, 34 SCRA 337. As regards the P5 Million loan in Philippine pesos, PHILCREDIT Is wrong. The payment thereof cannot be measured by the peso-dollar exchange rate. That will be violative of the Uniform Currency Act (RA, 529] which prohibits the payment of an obligation which, although to be paid In Philippine currency, Is measured by a foreign currency. (Palanca v. CA, 238 SCRA 593). 07; Obligations; extinguishment; payment, consignation, set-off 1988 No. 10: (a) Under the Civil Code, what are the different special forms of payments? (b) What are the special requisites of consignation in order that it shall produce the effect of payment? (c) A treasury warrant payable to Rosenne and indorsed by Boni was cashed at the Philippine National Bank. The warrant was subsequently dishonored by the Philippine Treasury. The Bank then applied the deposit of Boni to the payment of the amount paid for the warrant. Is the action of the Bank in accordance with law? Reasons. Answer: (a) Under the Civil Code, there are actually four special forms of payment. They are (1) application of payment (Arts. 1252-1254); (2) dation in payment (Art. 1245); (3) payment by cession (Art. 1255): and (4) tender of payment and consignation (Arts. 1256-1261). Strictly speaking, however, application of payment, by its very nature, is not a special form of payment, (b) In order that consignation shall produce the effect of payment, it is not only essential that it must conform with all of the requisites of payment, but it is also essential that certain special requirements prescribed by law must be complied with. The debtor must show; (1) That there is a debt due; (2) That the consignation has been made either because the creditor to whom tender of payment was made refused to accept the payment without just cause, or because any of the cause stated by law for effective consignation without previous tender of payment exists (Art. 1256, CC); (3) The previous notice of the consignation had been given to the persons interested in the fulfillment of the obligation (Art, 1256, CC); (4) That the thing or amount due had been placed at the disposal of judicial authority (Art. 1258, par. 1, CC); and (5) That after the consignation had been made, the persons interested in the fulfillment of the obligation had been notified thereof (Art. 1258, par. 2, CC). Page 283 of 391 (c) Yes, the action of the Bank is in accordance with law. The facts stated in the above problem are exactly the same as those in the case of Cullas vs. National Bank, 62 Phil. 519, where the Supreme Court held that a bank has a right of set-off of the deposit in its hands for the payment of any indebtedness to it on the part of the depositor. When a person deposits his money at a bank, whether such deposit is fixed, savings or current, a relationship of creditor and debtor is established between the depositor and bank. It is, therefore, evident that all of the requisites for compensation are present in this case. Committee's Recommendation Re: No. 10(a): (a) The committee recommends that if application for payment is not mentioned by the examinee, full credit must likewise be given, 07; Obligations; extinguishment; payment; application 1982 No. 16 The debtor owes his creditor several debts, all of them due, to wit: (1) an unsecured debt; (2) a debt secured with a mortgage of the debtor's property; (3) a debt bearing interest; (4) a debt in which the debtor is solidarily liable with another. Partial payment was made by the debtor. Assuming that the debtor had not specified the debts to which the payment should be applied and, on the other hand, the creditor had not specified in the receipt he issued the application of payment, state the order in which the payment should be applied and your reasons therefore. Answer In this case, according to the Civil Code, the debt, which is most onerous to the debtor, among those due, shall be deemed satisfied. Analyzing the four debts stated in the problem, the most onerous is No. 4, the second most onerous is No. 2, the third most onerous is No. 3, and the last onerous is No. 1, Consequently, the payment should be applied in that order. (Note: The above answer is based on Art. l254 of the Civil Code and on decided cases and commentaries of recognized commentators.) 07; Obligations; extinguishment; payment; consignation, when applicable 1984 No. 12 A sold to B a parcel of land with the right to repurchase the same within three years. A tendered the repurchase of price to B within the prescribed period, but B refused to accept it. A then brought an action in court for specific performance. B contends that since A did not deposit the money in court within the stipulated period for repurchase and the period has now lapsed, A can no longer repurchase the property. Is this contention correct? Explain. Answer: A. Furnished by Office of Justice Palma No. Consignation is not necessary to compel B to make the resale if he refused to accept the repurchase price tendered. The provisions of consignation refer only to obligations. They are not applicable to the right of repurchase which is not an obligation but a right exercisable purely at the option of A. B. Comments and Suggested Answer We agree with the answer of the Bar Examiner. However, if the bar candidate will attack the problem by holding that there was no default or mora of A because of the previous tender of payment which was refused by B without any justifiable Page 284 of 391 cause, and consequently. A can still repurchase the property, it is recommended that said answer should be properly credited. 07; Obligations; fortuitous events 1988 No. 8: (a) Mario received from Edgar a pendant with diamonds valued at P5,OOO.OO to be sold on commission basis or to be returned on demand. In the evening of August 31, 1987, while he was walking home, two men snatched his clutch bag containing the pendant and ran away. Subsequently, the snatchers were apprehended and charged. During the pendency of the criminal case, Edgar brought an action against Mario for the recovery of the pendant or its value and damages. Mario interposed the defense of fortuitous event but Edgar contends— (1) That the defense of fortuitous event is untenable because there was negligence on the part of the defendant; and (2) That if the defense is untenable, there must be a prior conviction of robbery before it can be availed of, Decide the case. Answer: (a) The factual setting of the above problem is identical to that of Austria vs. Court of Appeals (39 SCRA 527). In that case the Supreme Court held that defendant is not liable. To constitute a caso fortuito that would exempt a person from responsibility, it is necessary (1) that the event must be independent of the will of the debtor; (2) that it must be either unforeseeable or unavoidable; (3) that the occurrence must render it impossible for the debtor to fulfill the obligation in a normal manner; and (b) that the debtor must be free of, participation in, or aggravation of, the injury to the creditor. All of the above requisites or conditions are present in this case. It is undeniable that in order to completely exonerate the debtor by reason of a fortuitous event, such debtor must, in addition into the causes itself, be free of any concurrent or contributory fault or negligence. We believe, however, that her act in traveling alone in the evening, carrying jewelry of considerable value, cannot be considered as either concurrent or contributory negligence. While it may be so considered now, we are not persuaded that the same rule should obtain ten years previously when the robbery in question took place, for at that time criminality had not by far reached the levels attained in the present day. There is likewise no merit in the contention that to allow the fact of robbery to be recognized in this case before conviction is secured in the criminal action, would prejudice the latter case, or would result in inconsistency should the accused obtain an acquittal or should the criminal case be dismissed. It must be realized that a court finding that a robbery has happened would not necessarily mean that those accused in the criminal action would be found guilty of the crime; nor would a ruling that those actually accused did not commit the robbery be inconsistent with a finding that a robbery did take place. The evidence to establish these facts would not necessarily be the same. Suggested Alternative Answers to No. 8(a): (a) (1) We would like to call attention to the fact that the question says "contends." So perhaps we should make a distinction if negligence is proven and if negligence is not proven. If the negligence of the defendant is not proven as Edgar contends, then the defense of fortuitous event is tenable. However, if negligence is proven to be present then the defense of fortuitous event is not tenable here and the defendant will be liable. Page 285 of 391 (2) There is no need of prior conviction in either case. 07; Obligations; joint/ solidary liability; joint 2001 No VII Four foreign medical students rented the apartment of Thelma for a period of one year. After one semester, three of them returned to their home country and the fourth transferred to a boarding house. Thelma discovered that they left unpaid telephone bills in the total amount of P80,000.00. The lease contract provided that the lessees shall pay for the telephone services in the leased premises. Thelma demanded that the fourth student pay the entire amount of the unpaid telephone bills, but the latter is willing to pay only one fourth of it. Who is correct? Why? (5%) SUGGESTED ANSWER: The fourth student is correct. His liability is only joint, hence, pro rata. There is solidary liability only when the obligation expressly so states or when the law or nature of the obligation requires solidarity (Art. 1207, CC). The contract of lease in the problem does not, in any way, stipulate solidarity. 07; Obligations; joint/ solidary liability; solidary 1998 No XV. Joey, Jovy and Jojo are solidary debtors under a loan obligation of P300,000.00 which has fallen due. The creditor has, however, condoned Jojo's entire share in the debt. Since Jovy has become insolvent, the creditor makes a demand on Joey to pay the debt. 1. How much, if any, may Joey be compelled to pay? [2%] 2. To what extent, if at all. can Jojo be compelled by Joey to contribute to such payment? [3%] Answer: 1. Joey can be compelled to pay only the remaining balance of P2OO.OOO, in view of the remission of Jojo's share by the creditor. (Art. 1219, Civil Code) Answer; 2. Jojo can be compelled by Joey to contribute P5O.OOO. Art. 1217. par. 3, Civil Code provides. "When one of the solidary debtors cannot, because of his insolvency, reimburse his share to the debtor paying the obligation, such share shall be borne by all his co-debtors, in proportion to the debt of each." Since the insolvent debtor's share which Joey paid was P100,000, and there are only two remaining debtors - namely Joey and Jojo - these two shall share equally the burden of reimbursement. Jojo may thus be compelled by Joey to contribute P50.0OO.OO. 07; Obligations; joint/ solidary liability; solidary 2003 No XIV. A,B,C,D, and E made themselves solidarity indebted to X for the amount of P50,000.00. When X demanded payment from A, the latter refused to pay on the following grounds. (a) B is only 16 years old. (b) C has already been condoned by X (c) D is insolvent. Page 286 of 391 (d) E was given by X an extension of 6 months without the consent of the other four co-debtors. State the effect of each of the above defenses put up by A on his obligation to pay X, if such defenses are found to be true. SUGGESTED ANSWER: (a) A may avail the minority of B as a defense, but only for B’s share of P 10, 000.00. A solidary debtor may avail himself of any defense which personally belongs to a solidary co-debtor, but only as to the share of that co-debtor. (b) A may avail of the condonation by X of C’s share of P 10, 000.00. A solidary debtor may, in actions filed by the creditor, avail himself of all defenses which are derived from the nature of the obligation and of those which are personal to him or pertain to his own share. With respect to those which personally belong to others, he may avail himself thereof only as regards that part of the debt for which the latter are responsible. (Article 1222, NCC). (c) A may not interpose the defense of insolvency of D as a defense. Applying the principle of mutual guaranty among solidary debtors, A guaranteed the payment of D’s share and of all the other co-debtors. Hence, A cannot avail of the defense of D’s insolvency. (d) The extension of six (6) months given by X to E may be availed of by A as a partial defense but only for the share of E. there is no novation of the obligation but only an act of liberality granted to E alone. 07; Obligations; joint/ solidary liability; solidary obligations 1988 No. 9: (b) Define joint and solidary obligations. (c) A, B, and C borrowed P12,000 from X. This debt is evidenced by a promissory note wherein the three bound themselves to pay the debt jointly and severally. However, according to the note, A can be compelled to pay only on June 15, 1962, B can be compelled to pay only on June 15, 1964, while C can be compelled to pay only on June 15T 1966. On June 15, 1962, X made a demand upon A to pay the entire indebtedness but the latter aid only P4,OOO.OO, Subsequently, because of A's refusal to pay the balance, X brought an action against him for collection of the amount. Will such an action prosper? Reasons. Answer: (b) When there is a concurrence of two or more creditors or of two or more debtors in one and the same obligation, such obligation may be either joint (obligation mancomunada) or solidary (obligacion solidaria). A joint obligation may be defined as an obligation where there is a concurrence of several creditors or several debtors, or of several creditors and debtors, by virtue which each of the creditors has a right to demand, while each of debtors is bound to render compliance with his proportionate part of the prestation which constitutes the object of the obligation. In other words, each of the creditors is entitled to demand the payment of only a proportionate part of the credit, while each of the debtors is liable for the payment of only a proportionate part of the debt. A solidary obligation, on the other hand, may be defined as an obligation where there is a concurrence of several creditors, or several debtors, or of several creditors and debtors, by virtue which each of the creditors has a right to demand, while each of the debtors is bound to render entire compliance with the prestation which constitutes the object of the obligation. In other words, each of the creditors is entitled to demand the payment of the entire credit/ while each of the debtors is liable for the payment of the entire debt. (See Art. 1207, CC; 3 Castan, 7th Ed,, pp. 65-66.) Page 287 of 391 (c) For the present, the action will not prosper. It is of course true that the obligation here is solidary and that its solidary character is not destroyed by the fact that the debtors are bound by different periods for payment is expressly provided for in Art. 1211 of the Civil Code. However, in solidary obligations of this type, the right of the creditor is limited to the recovery of the amount owed by the debtor whose obligation has already matured, leaving in suspense his right to recover the shares corresponding to the other debtors whose obligations have not yet matured. This restriction upon the creditor's right does not destroy the solidary character of the obligation, because ultimately, he can still compel one and the same debtor, if that is his wish, to pay the entire obligation Therefore, in the instant case, X shall have to wait for June 15, 1964, when B's obligation shall have matured, and for June 15, 1966, when C's obligation shall have also matured. On June 15, 1966, he can collect P4,000 from either A or B. On June 15, 1966, he can again collect another P4,000 from either A or B or C. (See Ynchausti vs. Yulo, 34 Phil. 978.) Suggested Alternative Answer To: No. 9 (c): (c) It now being 1988, the action can no longer prosper because it has already prescribed. Actions upon written contracts prescribe in 10 years. 07; Obligations; joint/ solidary liability; solidary obligations 1992 No. 3: In June 1988, X obtained a loan from A and executed with Y as solidary comaker a promissory note in favor of A for the sum of P200,OOO.OO. The loan was payable at P20,000.00 with interest monthly within the first week of each month beginning July 1988 until maturity in April 1989. To secure the payment of the loan. X put up as security a chattel mortgage on his car, a Toyota Corolla sedan. Because of failure of X and Y to pay the principal amount of the loan, the car was extrajudicially foreclosed. A acquired the car at A's highest bid of P120,000.00 during the auction sale. After several fruitless letters of demand against X and Y, A sued Y alone for the discovery of P80.000.00 constituting the deficiency. Y resisted the suit raising the following defenses: a) That Y should not be liable at all because X was not sued together with Y. b) That the obligation has been paid completely by A's acquisition of the car through "dacion en pago" or payment by cession. c) That Y should not be held liable for the deficiency of P80,000.00 because he was not a co-mortgagor in the chattel mortgage of the car. which contract was executed by X alone as owner and mortgagor. d) That assuming that Y is liable, he should only pay the proportionate sum of P40,000.00. Decide each defense with reasons. Answer: (a) This first defense of Y is untenable. Y is still liable as solidary debtor. The creditor may proceed against any one of the solidary debtors. The demand against one does not preclude further demand against the others so long as the debt is not fully paid. (b) The second defense of Y is untenable. Y is still liable. The chattel mortgage is only given as a security and not as payment for the debt in case of failure to pay. Y as a solidary co-maker is not relieved of further liability on the promissory note as a result of the foreclosure of the chattel mortgage. Page 288 of 391 {c} The third defense of Y is untenable. Y is a surety of X and the extrajudicial demand against the principal debtor is not inconsistent with a judicial demand against the surety. A suretyship may co-exist with a mortgage. (d) The fourth defense of Y is untenable. Y is liable for the entire prestation since Y incurred a solidary obligation with X. (Arts. 1207, 1216. 1252 and 2047 Civil Code; Bicol Savings and Loan Associates vs. Guinhawa 188 SCRA 642) 07; Obligations; joint/ solidary liability; solidary obligations 1980 No. IX (a) "FF" and "GG" executed a promissory note binding themselves, jointly and severally, to pay "X" Bank P10,000.00 within 90 days from January 10, 1979, "FF" signed the note as principal and "GG" as guarantor. Upon failure to pay the note on due date "X" bank sued "FF" and "GG" for payment. "GG" interposed the defense that he was just a guarantor and the Bank must first exhaust all the remedies against the principal "FF" Is "GG's" defense tenable? Answer (a) "GG's" defense is untenable. Had he not bind himself solidarity with "FF" to pay the obligation, undoubtedly, as guarantor, he could have availed of the defense of benefit of excussion. In other words, he cannot be compelled to pay the creditor unless the latter has exhausted all the property of the debtor and he resorted to all the legal remedies against the said debtor. But then in the promissory note, he bound himself jointly and severally with "FF" to pay the obligation to the creditor. According to the law, such a defense now invoked by "GG" is no longer available. (NOTE: The above answer is based on Arts. 2058, 2059, Civil Code,) 07; Obligations; joint/ solidary liability; solidary obligations 1984 No. 11 A, B and C solidarity promised to pay D the amount of P3,000.00. Unfortunately, C became insolvent. What recourse does B have against A and B? What are the rights of A and B as against each other? Answer: A. Furnished by the Office of Justice Palma D may sue either A or B, or both, and recover the whole amount of P3,000 (Art. 1207) from either or both of them. Either party paying the entire amount may recover the amount of P1,5000 from the other party. (Art. 1217). B. Comments and Suggested Answer We agree with the answer of the Bar Examiner. However, if the bar candidate will answer the problem by invoking the provisions of Arts, 1216 and 1217 of the Civil Code instead of Arts. 1207 and 1217, it is recommended that the answer should be considered a correct Answer. 07; Obligations; joint/ solidary obligations; joint 1983 No. 12 A and B sold 1,000 sacks of rice to X and Y and, on X's request, delivered them to him. X resold the rice, without turning over any part of it or its price to Y. Page 289 of 391 May Y compel A and B to deliver what he bought? If so, to what extent? Answer Yes, Y may compel A to deliver 250 sacks of rice and B the same quantity, the obligation being joint, not solidary. 07; Obligations; loss of the thing due 1986 No. 1: Mr. Mekanico leased some automobile repair equipment to Mr. Masipag, who was opening his auto repair shop. The lease agreement was executed on February 15, 1985. It stipulated that the period was one month only, at the expiration of which Masipag was to return the equipment of Mekanico. The equipment was delivered on February 15, 1985. On March 15, 1985 Mekanico, in a telephone call, asked Masipag to return the leased property that same day. Because his truck broke down, Masipag was unable to comply. Early the next morning, the equipment was burned in an accidental fire that started in a nearby restaurant and gutted Masipag's auto repair shop. Mekaniko seeks to hold Masipag liable for the value of the lost property plus damages on the ground that he did not return it as agreed upon. Is Mekanico's claim tenable? Explain. Answer: Mekaniko's claim in untenable. The fire of accidental origin which destroyed the equipment which is the object of the obligation in the instant case is clearly fortuitous in character. Therefore, the doctrine of fortuitous events is applicable. The debtor or obligator, Masipag, is not liable. In other words, the obligation is extinguished. The fact that the loss took place on March 16, 1985. which is one day after Mekaniko had made a demand upon Masipag to return the leased property, does not mean that the loss took place after the obligor had already incurred in delay. It must be noted that the lease agreement was executed on February 15, 1985, Obviously, on March 16, 1985. Masipag had not yet incurred in delay. (Note: The above answer is based upon Arts. 13 and 1174 of the Civil Code. We recommend that an answer based on Arts. 13 and 1262 of the Civil Code or on Arts. 13, 1665 and 1667, arriving at the same conclusion should also be considered correct) Answer - The loss occurred by fortuitous event before Masipag incurred in delay. Therefore, the general rule applies; No one shall be held liable for loss due to fortuitous event. The one-month period of lease would expire only on March 18th while the fire occurred on the 29th day. The C.C. provides that one-month consists of 30 days and February 1985 had only 28 days, not being a leap year. 07; Obligations; loss of the thing due; force majeure 2000 No XIV Kristina brought her diamond ring to a jewelry shop for cleaning. The jewelry shop undertook to return the ring by February 1, 1999." When the said date arrived, the jewelry shop informed Kristina that the Job was not yet finished. They asked her to return five days later. On February 6, 1999, Kristina went to the shop to claim the ring, but she was informed that the same was stolen by a thief who entered the shop the night before. Kristina filed an action for damages against the jewelry shop which put up the defense of force majeure. Will the action prosper or not? (5%) Page 290 of 391 SUGGESTED ANSWER: The action will prosper. Since the defendant was already in default not having delivered the ring when delivery was demanded by plaintiff at due date, the defendant is liable for the loss of the thing and even when the loss was due to force majeure, 07; Obligations; nature and effect of obligations 1986 No. 11:. By means of a public instrument, Mr. Nagbibili sold his mango plantation to Abenturero effective immediately. The document stipulated, however, that delivery would be effected six months from the execution of the deed of sale. When the said period arrived, Abenturero demanded delivery in writing but Nagbibili dilly-dallied. It was not until a month afterwards that Nagbibili finally gave the land to Abenturero. In the three weeks before delivery, Nagbibili sold and delivered the entire produce of the mango plantation to Mr.Commerciante for P200.000.00. Commerciante knew nothing of the contract between Nagbibili and Abenturero. Abenturero now seeks to recover from Commerciante either the full value of the mangoes or a similar amount and quality of the mangoes sold. Does Abenturero have this right against Commerciante? Explain. Answer: Abenturero does not have any right, whether personal or real, to proceed against Commerciante. In obligations to give, the creditor has a right to the thing which is the object of the obligation and to the fruits thereof when the obligation to deliver arises. The obligation to deliver arises from the moment of the perfection of the contract. In sales, once the contract is perfected, the vendor is bound to deliver the thing sold and the fruits, unless there is a stipulation to the contrary. In the instant problem, there is a stipulation that delivery will be effected six months from the execution of the deed of sale. Instead of delivering the mango plantation and the fruits of Abenturero in accordance with the agreement, Nagbibili breached the contract by delaying the delivery of the plantation beyond the period agreed upon and by selling the fruits to Commerciante. However, since there was still no delivery of the plantation and the fruits, it is obvious that the only right which Abenturero had acquired was a personal right enforceable against Nagbibili, not a real right enforceable against the whole world. Ergo, he can now proceed against Nagbibili for indemnification for damages. He cannot proceed against Commerciante who was not even aware of the existence of the contract between Nagbibili and Abenturero. (Note - The above answer is based upon Arts. 1164 and 1537 of the Civil Code and upon decided cases.) Answer - Although the buyer is entitled to the fruits of the land from the time of perfection of the contract, still he did not acquire a real right over the fruits until they are delivered to him. Therefore, Abenturero has no right of action against Commerciante. Answer - The seller is supposed to deliver to the buyer the thing sold as well as the fruits and accessions that accrue from the moment of perfection. Abenturero is entitled to the fruits of the mango plantation from the time of the execution of the public instrument which provided that the sale was to be effective immediately. Delivery may be either actual or constructive. The execution of public instrument is one of the modes of constructive delivery. 07; Obligations; obligation to deliver a determinate thing; effect of loss Page 291 of 391 1984 No. 14 For value received, Pedro promised to deliver to Juan on or before August 15, 1984 a Mercedes Benz with Plate No. 123 which he (Pedro) had just brought home from Germany, as well as a 1984 18" Sony television set. Unfortunately, before the scheduled delivery date, the Mercedes Benz and the television set which Pedro had intended to deliver to Juan were destroyed by an accidental fire. Has the obligation of Pedro been extinguished? Explain. Answer: A. Furnished by Office of Justice Palma The obligation to deliver the Mercedes-Benz is an obligation to deliver a determinate thing, because the particular car to be delivered had been designated. The obligation to deliver that particular car was therefore extinguished by the occurrence of the fire, a fortuitous event. On the other hand, the obligation to deliver the television set is an obligation to deliver a generic thing. The particular television set to be delivered has not been determined. Only the kind of television set to be delivered was agreed upon. Pedro is therefore still obligated to deliver a television set of the kind and quality agreed upon, since generic obligations are never extinguished by fortuitous events. E. Comments and Suggested Answer We agree with the answer of the Bar Examiner. 07; Obligations; obligation to deliver a generic thing 1985 No. 15 A) On September 1, 1982, A sold to B 50 heads of cattle for P150,000.00 and 60 heads of carabao for the same price, the cattle to be loaded in Davao City on December 1, 1982, on the SS "Argus" and delivered upon her arrival in Manila 5 days later while the carabao were be loaded in the same city and shipped on December 15 and delivered likewise to B upon her arrival in Manila 5 days later. Because of the breakdown of his cargo truck, A was able to ship the cattle and the carabaos only on December 15. On her way to Manila, the SS "Argus" ran into a storm and all the animals were thrown into the sea to prevent her from sinking. B, who paid one half of the price upon the execution of the contract, demanded its return while A sought from B the full payment of the price. Decide the controversy, giving the reasons for your decision. Answers: A) 1. The obligation of A to deliver the cattle or carabao is a generic obligation, therefore, it is not extinguished by loss, so the seller is liable. However, the question of damages will depend on who is at fault. Since, however, there is nothing stated here as to whether the price is for a lump sum or for each cattle, the problem here is on the partial payment. And the partial payment of one-half is a demand. If the one-half payment is equivalent to the value of 1/2, it is a demand for one-half and, therefore, when A delayed the delivery of the cattle, he is "in mora" and will be liable for damages. 2. The question with respect to the sale is whether ownership passed to the buyer at the time of the loss. The place of delivery and the sale is Manila. The things sold were destroyed on the way to Manila. The ownership did not pass to the buyer and therefore the buyer is not yet answerable for the payment of the price. B can demand therefore its return. Aside from that there was a delay on the part of the vendor and being in delay, he bears the loss through fortuitous -event. Page 292 of 391 3. The heads of cattle and carabaos are to be considered specific, so this refers to the sale of specific things, and when they were lost, the obligation was extinguished because of fortuitous event. 4. Res perit creditori applies. The risk, therefore, would lie with the buyer from the perfection of the contract until the delivery of the thing sold. Accordingly, the buyer must pay to the seller the remaining unpaid price of the goods. 6. The seller is liable to the buyer for the loss of the cattle because the delivery to the carrier was late. The buyer is liable for the loss of the carabaos since delivery to the carrier is equivalent to delivery to the buyer. The buyer bears the loss and is liable under the principle of "res pent domino" when the subject matter is lost through fortuitous event. 07; Obligations; obligation to give; obligation to do 1983 No. 10 A bound himself to deliver to B a 21-inch 1983 model TV set, and the 13 cubic feet White Westinghouse refrigerator, with Motor No. WERT-385, which B saw in A's store, and to repair B's piano. A did none of these things. May the court compel A to deliver the TV set and the refrigerator and repair the piano? Why? If not, what relief may the court grant B? Why? Answer (Examiner's Answer) Yes, in so far as his obligation to deliver the Westinghouse refrigerator is concerned, the thing to be given being determinate, but no in so far as the 2 other obligations are concerned, one being an obligation to give an indeterminate thing, and the other being an obligation to do. In these 2 cases, the court shall order the obligations to be performed at A's expense. (Committee's Answer) As far as the refrigerator is concerned, the Court may compel A to deliver the refrigerator to B. The obligation to give is a determinate obligation to give. Under the law, in this type of obligation, the principal right of the creditor against the debtor is to compel the debtor to make the delivery. (Note; The above answer is based on Art. 1165, par. 1, Civil Code) As far as the TV set is concerned, the Court may compel A to deliver although not specifically. The obligation of A is a generic obligation to give. Under the law, in this type of obligation, once all of the circumstances of the obligation have been taken into consideration, the Court may compel A to deliver to B a TV set which must be neither of superior nor inferior quality. (Note: The above answer is based on Art, 1246, Civil Code.) As far as the repair of the piano is concerned, the court cannot compel A to repair said piano. The obligation here is a purely personal obligation, an obligation to do. Under the law, in this type of obligation to compel A to repair the piano of B would constitute an infringement of A's liberty, (Note: The above answer is based by implication on Art. 1165, Civil Code.) Anent the TV set, if the debtor refuses or is unable to comply with his obligation to deliver a 21 inch TV get which must be neither of superior nor inferior quality, B may ask the court to order the performance of the obligation at the expense of A. Additionally, he can ask for damages. Page 293 of 391 Anent the repair of the piano, B may also ask the court to order the performance of the obligation at the expense of A. (The above answers are based on Arts. 1165, par. 2 and 1170, Civil Code.) 07; Obligations; obligations with a penal clause 1986 No. 10: The Betis Furniture Co. undertook to deliver to Mr. Bagongkasal specified pieces of living room, dining room and bedroom furniture, all made of narra, for a price stated in the contract. The agreement had a penal clause that any violation of the contract would entitle the aggrieved party to damages in the amount of P100,000.00. The furniture delivered by Betis was made, not of narra, but of inferior wood. In a suit to recover damages, Bagongkasal was able to prove that the actual damages he sustained amounted to P200,000.00, He demanded that amount plus the P100,000.00 penalty or a total of P300,000.00. Betis, however, countered that if it were liable for damages at all, the maximum award should not exceed P100,000.00 as stated in the penal clause of the contract. Whose claim would you sustain? Why? Answer: I would sustain the claim of Betis. A penal clause is supposed to answer for damages without the introduction of proof as to actual damages. It is to be noted that the penal clause has been freely agreed upon between the parties precisely with the intention of doing away with having to present proof of damages. Answer — I shall sustain the claim of the defendant Betis Furniture Co. The Civil Code is explicit. According to said Code, in obligations with a penal clause, the penalty shall substitute the indemnity for damages and the payment of interests in case of non-compliance. There are only three exceptions to this rule. They are: first, when there is a stipulation to the contrary: second, when the creditor is compelled to sue the debtor because of the latter's refusal to pay the agreed penalty; and third, when the debtor is guilty of fraud. It is clear that the instant case does not fall within the purview of any of the three exceptions Therefore, the award in favor of the plaintiff should be for P100,000.00 only. Answer -- I shall not sustain the claim of Beds Furniture Co. The Civil Code is explicit. According to said Code, in obligations with a penal clause, the penalty shall substitute the indemnity for damages and the payment of interests in case of noncompliance. There are three exceptions to this rule. They are: first, when there is a stipulation to the contrary; second, when the creditor is compelled to sue the debtor because of the latter's refusal to pay the agreed penalty: and third, when the debtor is guilty of fraud. It is clear that the instant case falls within the purview of the third exception. The furniture delivered by Betis was made, not of narra. but of inferior wood. That indicates that the debtor commuted fraud in performing its obligation. Therefore, the award in favor of the plaintiff should be for P200,000 actual damages plus the P100,000 penalty. Answer - Under the doctrine of G.A. Machineries, Inc. vs. Yaptinchay. 126 SCRA 78 (ponente J. Gutierrez) there is breach of contract not breach of warranty. The breach is fraudulent. Under the doctrine of Mariano Pamintuan vs. CA. SCRA 556, since debtor is guilty of fraud - "The proven damages supersede the stipulated damages (penalty)" citing Art. 1226 Civil Code of the Philippines). Answer ~ Here there is a breach of warranty and Betis Furniture Co. must know the difference between "narra" and other kinds of wood. Therefore, in delivering the furniture made of inferior quality, it undoubtedly acted fraudulently, and under the C.C, the buyer in this case would be entitled to be reimbursed the Page 294 of 391 difference in value of the furniture and the price 'he paid (P200,000) and damages (penalty -P100,000), 07; Obligations; obligations with a penal clause 1985 No, 12 A, agreed to build a house for B on the condition that it shall be completed within 6 months from January 1, 1980, that work shall begin when B pays A P30,000.00, and that A shall pay a penalty of P200.00 for each day of delay in the fulfillment of the contract. A finished the construction of the house on August 31, 1980, and turned it over the same day to B who demanded payment of the penalty of P200.00 for every day of delay in its completion. A refused to pay, alleging the delay was caused by B who gave him the first payment only on March 1. B's answer was that he had the money ready since January 1 but it was not until March 1, after calling A, that he went to his house to get it a) Rule on the respective contentions of both parties. b) Was there delay in the completion of the house? State your reasons. Answers: (a) and (b) 1. B was bound to pay A the amount of P30.000 only upon demand for such payment by A. Hence, there was no default on the part of B who was ready to comply with the obligation. Since the agreement was that the house was to be completed within 6 months from Jan. 1, 1980 and the building was not completed within the specified time, the builder is liable for the penalty according to the terms of the agreement. 2. Even though there is a penalty, that is dependent on the fact whether time is of the essence of the contract or not. The mere fixing of the date is not considered necessarily to mean that time is of the essence. The date is only for maturity. Generally, time is not of the essence. 3. Although B had the money, he never informed the other party. So the other party did not get to know that he had the money. Therefore, B was not in default. A is not entitled to collect penalty. 4. I would rule in favor of B, since the payment of P30,000.00 does not appear to be a condition for the completion of the house within six months from January 1, 1980. But, assuming otherwise, there was no default in. the payment of the P30.000.00 since there was no demand made for the payment thereof (Art. 1169). In addition, unless otherwise expressed in the agreement, payment shall be made at the domicile of the obligor (Art. 1251). There was a delay in the completion of the house; accordingly, the payment of P200 for each day of delay could be sought since this penalty is not unconscionable considering the total value of the contract. 07; Obligations; obligations with a period 1980 No. IV (b) "M" and "N" were very good friends. "N" borrowed P10,000 from "M". Because of their close relationship, the promissory note executed by "N" provided that he would pay the loan "whenever his means permit." subsequently, "M" and "N" quarreled. "M" now asks you to collect the loan because he is in dire need of money. What legal action, if any, would you take in behalf of "M"? Answer Page 295 of 391 (b) "M" must bring an action against "N" for the purpose of asking the court to fix the duration of the term or period for payment (Arts. 1180, 1197, Civil Code). Once the court has fixed the duration of the term or period, it becomes a part of the covenant of the two contracting parties. If the debtor defaults in the payment of the obligation after the expiration of the period fixed by the court, the creditor can then bring an action against him for collection. Any action for collection brought before that would be premature. This is well-settled. (Gonzales vs. Jose, 66 Phil. 369) ; Conception vs. People of the Phil, 74 Phil. 62; Pages vs. Basilan, 104 Phil. 882). Alternative Answer: — Normally, before an action for collection may be maintained by the creditor against the debtor, the former must first bring an action against the latter asking the court to fix the duration of the term or period for payment (Art. 1197, Civil Code). However, an action combining such action with that of an action for collection may be allowed if it can be shown that a separate action for collection would be a. mere formality because no additional proofs other than the admitted facts will be presented and would serve no purpose other than to delay. Here, there is no legal obstacle to such course of action. (Borromeo vs. Court of Appeals, 47 SCRA 65). 07; Obligations; obligations with a period 1984 No. 13 A obtained from B a loan payable within a year. As security for its repayment, A mortgaged his uninsured house. Three months after the loan was given, A's house was gutted by an accidental fire. Thereupon, B demanded immediate payment from A, who refused to pay contending that the loan was for a one-year period. Is A's contention valid? Explain. Answer: A. Furnished by Office of Justice Palma No. Under Art. 1198, the debtor shall low every right to make use of a period when the securities disappear through a fortuitous event. A has to give satisfactory substitute collateral. B. Comments and Suggested Answer We agree with the answer of the Bar Examiner. 07; Obligations; obligations with a period 1982 No 15 "A" Corporation, engaged in the sale of subdivision residential lots, sold to "B" a lot of 1,000 square meters. The contract provides that the corporation should put up an artesian well with tank, within a reasonable time from the date thereof and sufficient for the needs of the buyers. Five years thereafter, and no well and tank have been put up by the corporation, "B" sued the corporation for specific performance. The corporation set up a defense that no period having been fixed, the court should fix the period. Decide with reason. Answer First Answer: The action for specific performance should be dismissed on the ground that it is premature. It is clear that the instant case falls within the purview of obligations with a term or period which must be judicially fixed. Thus, "B", instead of bringing an action for specific performance, should bring an action asking the court to determine the period within which "A" Corporation shall put up the artesian well with tank. Once the court has fixed the period, once the court, let us say, has declared that the period is six months, then that will become a part of the covenant Page 296 of 391 between the contracting parties. It can no longer be changed by them. If the Corporation does not put up the artesian well with tank within the period fixed by the court, "B" can then bring an action for specific performance. Second Answer: Normally, before an action for specific performance may be maintained by "B" against "A" Corporation, the former must first bring an action against the latter asking the court to fix the duration of the term or period to install the artesian well with tank. However, an action combining such action with that of an action for specific performance may be allowed if it can be shown that a separate action for specific performance would be a mere formality because no additional proofs other than the admitted facts will be presented and would serve no purpose other than to delay. Here, there is no obstacle to such course of action. (Note: The above answers are based on Art. 1197 of the Civil Code and on decided cases. The Committee respectfully recommends that either answers should be considered correct.) 07; Obligations; obligations with a period; suspensive period dependent upon will of debtor 1991 No 13: In a deed of sale of a realty, it was stipulated that the buyer would construct a commercial building on the lot while the seller would construct a private passageway bordering the lot. The building was eventually finished but the seller failed to complete the passageway as some of the squatters, who were already known to be there at the time they entered into the contract, refused to vacate the premises, In fact, prior to its execution, the seller filed ejectment cases against the squatters. The buyer now sues the seller for specific performance with damages. The defense is that the obligation to construct the passageway should be with a period which, incidentally, had not been fixed by them, hence, the need for fixing a judicial period. Will the action for specific performance of the buyer against the seller prosper? Answer: No. the action for specific performance filed by the buyer is premature under Art. 1197 of the Civil Code. If a period has not been fixed although contemplated by the parties, the parties themselves should fix that period, failing in which, the Court maybe asked to fix it taking into consideration the probable contemplation of the parties. Before the period is fixed, an action for specific performance is premature. Alternative Answer; It has been held in Borromeo vs. CA (47 SCRA 69), that the Supreme Court allowed the simultaneous filing of action to fix the probable contemplated period of the parties where none is fixed in the agreement if this would avoid multiplicity of suits. In addition, technicalities must be subordinated to substantial justice. Alternative Answer; The action for specific performance will not prosper. The filing of the ejectment suit by the seller was precisely in compliance with his obligations and should not, therefore, be faulted if no decision has yet been reached by the Court on the matter. 07; Trust; implied resulting trust 1995 No. 17: Page 297 of 391 In I960. Maureen purchased two lots in a plush subdivision registering Lot 1 In her name and Lot 2 In the name of her brother Walter with the latter's consent. The idea was to circumvent a subdivision policy against the acquisition of more than one lot by one buyer. Maureen constructed a house on Lot 1 with an extension on Lot 2 to serve as a guest house. In 1987. Walter who had suffered serious business losses demanded that Maureen remove the extension house since the lot on which the extension was built was his property. In 1992, Maureen sued for the reconveyance to her of Lot 2 asserting that a resulting trust was created when she had the lot registered in Walter's name even if she paid the purchase price. Walter opposed the suit arguing that assuming the existence of a resulting trust the action of Maureen has already prescribed since ten years have already elapsed from the registration of the title in his name. Decide. Discuss fully Answer: This is a case of an implied resulting trust. If Walter claims to have acquired ownership of the land by prescription or If he anchors his defense on extinctive prescription, the ten year period must be reckoned from 1987 when he demanded that Maureen remove the extension house on Lot No. 2 because such demand amounts to an express repudiation of the trust and It was made known to Maureen. The action for reconveyance filed in 1992 is not yet barred by prescription. (Spouses Huang v. Court of Appeals, Sept. 13, 1994). 07; Trust; implied trust; 1998 No VII. Juan and his sister Juana inherited from their mother two parcels of farmland with exactly the same areas. For convenience, the Torrens certificates of title covering both lots were placed In Juan's name alone. In 1996, Juan sold to an innocent purchaser one parcel in Its entirety without the knowledge and consent of Juana, and wrongfully kept for himself the entire price paid. 1. What rights of action, if any, does Juana have against and/or the buyer? |3%] 2. Since the two lots have the same area, suppose Juana flies a complaint to have herself declared sole owner of the entire remaining second lot, contending that her brother had forfeited his share thereof by wrongfully disposing of her undivided share in the first lot. will the suit prosper? [2%] Answer: 1. When, for convenience, the Torrens title to the two parcels of land were placed in Joan's name alone, there was created an implied trust (a resulting trust) for the benefit of Juana with Juan as trustee of one-half undivided or ideal portion of each of the two lots. Therefore, Juana can file an action for damages against Joan for having fraudulently sold one of the two parcels which he partly held in trust for Juana's benefit. Juana may claim actual or compensatory damage for the loss of her share in the land; moral damages for the mental anguish, anxiety, moral shock and wounded feelings she had suffered; exemplary damage by way of example for the common good, and attorney's fees. Juana has no cause of action against the buyer who acquired the land for value and in good faith, relying on the transfer certificate of title showing that Juan is the registered owner of the land. Another Answer: 1. Under Article 476 of the Civil Code, Juana can file an action for quieting of title as there is a cloud in the title to the subject real property. Second, Juana can also file an action for damages against Juan, because the settled rule is that the Page 298 of 391 proper recourse of the true owner of the property who was prejudiced and fraudulently dispossessed of the same is to bring an action for damages against those who caused or employed the same. Third, since Juana had the right to her share in the property by way of inheritance, she can demand the partition of the thing owned in common, under Article 494 of the Civil Code, and ask that the title to the remaining property be declared as exclusively hers. However, since the farmland was sold to an innocent purchaser for value, then Juana has no cause of action against the buyer consistent with the established rule that the rights of an innocent purchaser for value must be respected and protected notwithstanding the fraud employed by the seller in securing his title. (Eduarte vs. CA, 253 SCRA 391) Additional Answer: 1. Juana has the right of action to recover (a) her one-half share in the proceeds of the sale with legal interest thereof, and (b) such damages as she may be able to prove as having been suffered by her, which may include actual or compensatory damages as well as moral and exemplary damages due to the breach of trust and bad faith (Imperial vs. CA, 259 SCRA 65). Of course, if the buyer knew of the co-ownership over the lot he was buying, Juana can seek (c) reconvenyance of her one-half share instead but she must implead the buyer as co-defendant and allege his bad faith in purchasing the entire lot. Finally, consistent with the ruling in Imperial us. CA. Juana may seek instead (d) a declaration that she is now the sole owner of the entire remaining lot on the theory that Juan has forfeited his one-half share therein. Additional Answer: 1. Juana can file an action for damages against Juan for having fraudulently sold one of the two parcels which he partly held In trust for Juana's benefit. Juana may claim actual or compensatory damage for the loss of her share in the land; moral damages for the mental anguish, anxiety, moral shock and wounded feelings she had suffered; exemplary damage by way of example for the common good, and attorney's fees. Juana has no cause of action against the buyer who acquired the land for value and in good faith, relying on the transfer certificate showing that Juan is the registered owner of the land. Answer: 2. Juana's suit to have herself declared as sole owner of the entire remaining area will not prosper because while Juan's act in selling the other lot was wrongful. It did not have the legal effect of forfeiting his share in the remaining lot. However, Juana can file an action against Juan for partition or termination of the coownership with a prayer that the lot sold be adjudicated to Juan, and the remaining lot be adjudicated and reconveyed to her. Another Answer: 2. The suit will prosper, applying the ruling in Imperial vs. CA cited above. Both law and equity authorize such a result, said the Supreme Court. Strictly speaking, Juana's contention that her brother had forfeited his share in the second lot is incorrect. Even if the two lots have the same area, It does not follow that they have the same value. Since the sale of the first lot on the Torrens title in the name of Juan was valid, all that Juana may recover is the value of her undivided Interest therein, plus damages. In addition, she can ask for partition or reconveyance of her undivided interest in the second lot, without prejudice to any Page 299 of 391 agreement between them that in lieu of the payment of the value of Juana's share In the first lot and damages, the second lot be reconveyed to her. Alternative Answer: 2. The suit will not prosper, since Juan's wrongful act of pocketing the entire proceeds of the sale of the first lot is not a ground for divesting him of his rights as a co-owner of the second lot. Indeed, such wrongdoing by Juan does not constitute, for the benefit of Juana, any of the modes of acquiring ownership under Art. 712, Civil Code. 07; Trusts; express trust; prescription 1997 No. 13: On 01 January 1980. Redentor and Remedies entered into an agreement by virtue of which the former was to register a parcel of land in the name of Remedies under the explicit covenant to reconvey the land to Remigio, son of Redentor, upon the son's graduation from college. In 1981, the land was registered in the name of Remedies. Redentor died a year later or in 1982. In March 1983, Remigio graduated from college. In February 1992, Remigio accidentally found a copy of the document so constituting Remedies as the trustee of the land. In May 1994, Remigio filed a case against Remedies for the reconveyance of the land to him. Remedies, in her answer, averred that the action already prescribed. How should the matter be decided? Answer: The matter should be decided in favor of Remigio (trustee) because the action has not prescribed. The case at bar involves an express trust which does not prescribe as long as they have not been repudiated by the trustee (Diaz vs. Gorricho. 103 Phil, 261). Page 300 of 391 08; Sales & Donation; ownership of the thing sold 2003 No XV. (a) May a person sell something that does not belong to him? Explain. (b) May a person donate something that does not belong to him? Explain. 5% SUGGESTED ANSWERS: (a) Yes, a person may sell something which does not belong to him. For the sale to be valid, the law does not require the seller to be the owner of the property at the time of the sale. (Article 1434, NCC). If the seller cannot transfer ownership over the thing sold at the time of delivery because he was not the owner thereof, he shall be liable for breach of contact. (b) As a general rule, a person cannot donate something which he cannot dispose of at the time of the donation (Article 751, New Civil Code). 08; Sales; Art. 1592 2003 No XVI. X sold a parcel of land to Y on 01 January 2002, payment and delivery to be made on 01 February 2002. It was stipulated that if payment were not to be made by Y on 01 February 2002, the sale between the parties would automatically be rescinded. Y failed to pay on 01 February 2002, but offered to pay three days later, which payment X refused to accept, claiming that their contract of sale had already been rescinded. Is X’s contention correct? Why? 5% SUGGESTED ANSWER: No, X is not correct. In the sale of immovable property, even though it may have been stipulated, as in this case, 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 (Article 1592, New Civil code). Since no demand for rescission was made on Y, either judicially or by a notarial act, X cannot refuse to accept the payment offered by Y three (3) days after the expiration of the period. ANOTHER SUGGESTED ANSWER: This is a contract to sell and not a contract of absolute sale, since as there has been no delivery of the land. Article 1592 of the New Civil code is not applicable. Instead, Article 1595 of the New Civil Code applies. The seller has two alternative remedies: (1) specific performance, or (2) rescission or resolution under Article 1191 of the New Civil code. In both remedies, damages are due because of default. ALTERNATIVE ANSWER: Yes, the contract was automatically rescinded upon Y’s failure to pay on 01 February 2002. By the express terms of the contract, there is no need for X to make a demand in order for rescission to take place. (Article 1191, New Civil Code, Suria v. IAC 151 SCRA 661 [1987]; U.P. v. de los Angeles 35 SCRA 102 [1970]). 08; Sales; Art. 1592 1988 No. 13: (a) A sold to B a house and lot for P50,000.00 payable 30 days after the execution of the deed of sale. It was expressly agreed in the deed that the sale would ipso facto be of no effect upon the buyer's failure to pay as agreed. B failed to pay on maturity, and A sued to declare the contract of no force and effect. If B Page 301 of 391 tendered payment before the action was filed, but subsequent to the stipulated date of payment, would the action prosper? Why? Answer: (a) The action would not prosper in such a case. According to the law, "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, so long as no demand for the rescission of the contract has been made upon him either judicially or by notarial act. After the demand, the court may not grant him a new term." (Art. 1592, CC.) Here, at the time B tendered payment of the purchase price, there was still no demand made upon him by A for the payment of said purchase price either judicially or by notarial act. 08; Sales; assignment of credit 1993 No, 14: Peter Co, a trader from Manila, has dealt business with Allied Commodities in Hongkong for five years. All through the years. Peter Co accumulated an indebtedness of P50O,OOO.OO with Allied Commodities. Upon demand by its agent in Manila, Peter Co paid Allied Commodities by check the amount owed. Upon deposit in the payee's account in Manila, the check was dishonored for insufficiency of funds. For and In consideration of P1.00, Allied Commodities assigned the credit to Hadji Butu who brought suit against Peter Co in the RTC of Manila for recovery of the amount owed. Peter Co moved to dismiss the complaint against him on the ground that Hadji Butu-was not a real party in interest and, therefore, without legal capacity to sue and that he had not agreed to a subrogation of creditor. Will Peter Co's defense of absence of agreement to a subrogation of creditor prosper? Answer: No, Co's defense will not prosper. This is not a case of subrogation, but an assignment of credit. Assignment of credit is the process of transferring the right of the assignor to the assignee. The assignment may be done either gratuitously or onerously, in which case, the assignment has an effect similar to that of a sale (Nyco Sales Corp.v.BA Finance Corp. G.R No.71694. Aug.16, 1991 200 SCRA 637). As a result of the assignment, the plaintiff acquired all the rights of the assignor including the right to sue in his own name as the legal assignee. In assignment, the debtor's consent is not essential for the validity of the assignment (Art. 1624; 1475. CC; Rodriguez v. CA, et al, G. R No. 84220, March 25. 1992 207 SCRA 553). Alternative Answer: No. the defense of Peter Co will not prosper. Hadji Butu validly acquired his right by an assignment of credit under Article 1624 of the Civil Code. However, the provisions on the contract of sale (Article 1475 Civil Code) will apply, and the transaction is covered by the Statute of Frauds. (Art. 1403 par. (2) Civil Code) 08; Sales; conditional sale vs absolute sale 1997 No. 15: (b) Between a conditional sale, on the one hand, and an absolute sale, on the other hand. Answer: (b) A conditional sale is one where the vendor is granted the right to unilaterally rescind the contract predicated on the fulfillment or non-fulfillment, as the Page 302 of 391 case may be, of the prescribed condition. An absolute sale is one where the title to the property is not reserved to the vendor or if the vendor Is not granted the right to rescind the contract based on the fulfillment or non-fulfillment, as the case may be, of the prescribed condition. 08; Sales; contract of sale vs agency to sell 1999 No XV. (b) A granted B the exclusive right to sell his brand of Maong pants in Isabela, the price for his merchandise payable within 60 days from delivery, and promising B a commission of 20% on all sales. After the delivery of the merchandise to B but before he could sell any of them, BOs store in Isabela was completely burned without his fault, together with all of A's pants. Must B pay A for his lost pants? Why? (5%) ANSWER: (b) The contract between A and B is a sale not an agency to sell because the price is payable by B upon 60 days from delivery even if B is unable to resell it. If B were an agent, he is not bound to pay the price if he is unable to resell it. As a buyer, ownership passed to B upon delivery and, under Art. 1504 of the Civil Code, the thing perishes for the owner. Hence, B must still pay the price. 08; Sales; contract of sale vs contract to sell 1988 No. 15: (c) Distinguish between a contract of sale and a contract to sell. Answer: (c) The two may be distinguished from each other in the following ways: (1) In the first, title passes to the vendee upon delivery of the thing sold, whereas in the second, by agreement, ownership is reserved in the vendor and is not to pass until full payment of the price. (2) In the first, nonpayment is a negative resolutory condition, whereas in the second, full payment is a positive suspensive condition. (3) In the first, the vendor has lost and cannot recover ownership until and unless the contract is resolved or rescinded, whereas in the second, title remains in the vendor, and when he seeks to eject the vendee because of noncompliance by such vendee with the suspensive condition stipulated, he is enforcing the contract and not resolving the same. (Santos vs. Santos, CA,47 Off, Gaz,6372.) 08; Sales; contract to sell 2001 No XVI Arturo gave Richard a receipt which states: "Receipt Received from Richard as down payment For my 1995 Toyota Corolla with plate No. XYZ-1 23.............. P50.000.00 Balance payable: 12/30/01........ P50 000.00 September 15, 2001. Page 303 of 391 (Sgd.) Arturo Does this receipt evidence a contract to sell? Why? (5%) SUGGESTED ANSWER It is a contract of sale because the seller did not reserve ownership until he was fully paid. 08; Sales; contract to sell vs contract of sale 1997 No. 15: State the basic difference (only in their legal effects) (a) Between a contract to sell, on the one hand, and a contract of sale, on the other; Answer: (a) In a contract of sale, ownership is transferred to the buyer upon delivery of the object to him while in a contract to sell, ownership is retained by the seller until the purchase price is fully paid. In a contract to sell, delivery of the object does not confer ownership upon the buyer. In a contract of sale, there Is only one contract executed between the seller and the buyer, while in a contract to sell, there are two contracts, first the contract to sell (which is a conditional or preparatory sale) and a second, the final deed of sale or the principal contract which is executed after full payment of the purchase price. 08; Sales; double sales 2001 No XII On June 15,1995, Jesus sold a parcel of registered land to Jaime. On June 30. 1995, he sold the same land to Jose. Who has a better right if: a) the first sale is registered ahead of the second sale, with knowledge of the latter. Why? (3%) b) the second sale is registered ahead of the first sale, with knowledge of the latter? Why? (5%) SUGGESTED ANSWER: (a) The first buyer has the better right if his sale was first to be registered, even though the first buyer knew of the second sale. The fact that he knew of the second sale at the time of his registration does not make him as acting in bad faith because the sale to him was ahead in time, hence, has a priority in right. What creates bad faith in the case of double sale of land is knowledge of a previous sale. b) The first buyer is still to be preferred, where the second sale is registered ahead of the first sale but with knowledge of the latter. This is because the second buyer, who at the time he registered his sale knew that the property had already been sold to someone else, acted in bad faith. (Article 1544, C.C.) 08; Sales; double sales 2004 No. IV A. JV, owner of a parcel of land, sold it to PP. But the deed of sale was not registered. One year later, JV sold the parcel again to RR, who succeeded to register the deed and to obtain a transfer certificate of title over the property in his own name. Page 304 of 391 Who has a better right over the parcel of land, RR or PP? Why? Explain the legal basis for your answer. (5%) 08; Sales; double sales 1986 No. 18: Mapusok sold his lot to Masugid under a pacto de retro sale. The lot was registered under the Torrens system but the pacto de retro sale was not registered. Subsequently, Masigla obtained a money judgment against Mapusok. Pursuant to a writ of execution, the lot was attached, the attachment being annotated on the certificate of title. The purchaser at the public auction was Masigla himself. When Masigla sought to register his title, Masugid opposed the registration on the ground of the prior pact de retro sale to him. Who as between Masugid and Masigla has the better right to the land? Explain. Answer: Under the doctrine of Campillo vs. CA, 129 SCRA 513, Masigla has a better right because at the time of attachment and sale at public auction, the property was still registered in name of Mapusok - hence the rule on Torrens Titled land and Art. 1544 Civil Code of the Philippines (double sale) will apply: Answer - Masigla has a better right because he is an innocent purchaser for value. He cannot be required to go beyond or outside of the four corners of the certificate of title presented to him. Answer - Although the Torrens system requires registration of conveyances and other instruments affecting registered lands as the "operative act" to convey and affect the property, and if not registered, the contract is binding only as between the parties, still the purchaser at an execution sale under the Rules of Court merely acquires the rights of the judgment debtor in the property, and "steps into the shoes" of the judgment debtor (Mapusok). Therefore, Masugid is entitled to the land as a vendee a retro and Masigla (purchaser) merely acquired Mapusok's (judgment debtor) right to redeem the land under the pacto de retro sale, from Masugid. 08; Sales; double sales 1987 No. 8: Miguel, Carlos and Lino are neighbors. Miguel owned a piece of registered land which both Carlos and Lino wanted to buy. Miguel sold the land to Carlos. The sale was not registered upon the request of Miguel. Later on, the same property was sold by Miguel to Lino. Miguel told Carlos about the second sale. Carlos immediately tried to see Lino to discuss the matter and inform him of the previous sale to him (Carlos) of the same property but Lino refused to see Carlos. Thereupon Carlos annotated in the Registry of Property his adverse claim on the property. A week later, Lino registered the sale on his favor and had a new transfer certificate of title issued in his name. However, the adverse claim of Carlos was duly annotated in the title. Notwithstanding, Lino took possession of the property and built a small bungalow thereon. (a) Who is the rightful owner of the property? Explain. (b) To whom would the bungalow built by Lino on the property belong? Explain, A rawer: a, In double sales, under Article 1544 the land sold belongs to the first registrant in good faith. If none, it belongs to the first possessor in good faith. If none Page 305 of 391 it belongs to the person with the oldest title, provided there is good faith. Carlos, who has the oldest title, is therefore the rightful owner of the' property, because there was no registration in good faith by Lino. b. The bungalow built by Lino belongs to Carlos. Lino is a builder in bad faith. Article 449 provides that he who builds in bad faith on the land of another loses what it built without right to indemnity. 08; Sales; double sales 1988 No. 13: (b) In 1950, A executed a power of attorney authorizing B to sell a parcel of land consisting of more than 14 hectares. A died in 1954. In 1956, his four children sold more than 12 hectares of the land to C. In 1957, B sold 8 hectares of the same land to D, It appears that C did not register the sale executed by the children. D, who was not aware of the previous sale, registered the sale executed by B, whose authority to sell was annotated at the back of the Original Certificate of Title. (1) What was the effect of the death of A upon B's authority to sell the land? (2) Assuming that B still had the authority to sell the land—who has a better right over the said land, C or D? Answer: (b) (1) B’s authority subsisted notwithstanding the principal’s death because he was unaware of such death and he contracted w/ 3rd persons who apparently acted in good faith. (2) As the case at bar is a case of double sale of registered land he who recorded the sale in good faith has a better right in conformity with Art. 1544 of the Civil Code. Since D was not aware of the previous sale, he had to rely on the face of the certificate of title of the registered owner. Hence, he now has a better right to the land. (Buason vs. Panuyas, supra.) 08; Sales; double sales 1989 No. 9: (1) If the same thing should have been sold to different vendees, to whom shall the ownership be transferred? Answer: 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 an 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. 08; Sales; effect of oral sale 1988 No. 15: (b) One-half of a parcel of land belonging to A and B was sold by X to Y for the amount of P1,500.00. The sale was executed verbally. One year later, A and B sold the entire land to X. Is the sale executed verbally by X to Y valid and binding? Reasons. Answer: Page 306 of 391 (b) The sale, although not contained in a public instrument or formal writing, is nevertheless valid and binding for the time-honored rule is that even a verbal contract of sale of real estate produces legal effects between the parties. In the premises, Art. 1434 of the Civil Code, which declares that when a person who is not the owner of a thing sells or alienates and delivers it, and later the seller or grantor acquires title thereto, such title passes by operation of law to the buyer or grantee, is applicable, (Bucton vs. Gabar, 55 SCRA 499.) Suggested Alternative Answers To: No, 15 (b): (b) 1) The contract of sale is valid and enforceable in view of the payment of the price of P1,500 but there is no showing the problem that there was delivery of the land. Accordingly, Article 1434 does not apply. However, Y can compel under Article 1357 to observe the proper form of a deed of sale involving real property and simultaneously compel specific performance to deliver. 2) The verbal sale of land is unenforceable since there is no statement in the problem that the agreed price of P1,500 was paid, nor was the land delivered. Being, Article 1434 will not apply since it is predicated on a valid or enforceable contract of sale. 08; Sales; equitable mortgage 1991 No 10; On 20 December 1970, Juliet, a widow, borrowed from Romeo P4,000.00 and, as security therefore, she executed a deed of mortgage over one of her two (2) registered lots which has a market value of P15,000.00. The document and the certificate of title of the property were delivered to Romeo. On 2 June 1971, Juliet obtained an additional sum of P3,000 from Romeo. On this date, however, Romeo caused the preparation of a deed of absolute sale of the above property, to which Juliet affixed her signature without first reading the document. The consideration indicated is P7,000.00. She thought that this document was similar to the first she signed. When she reached home, her son X, after reading the duplicate copy of the deed, informed her that what she signed was not a mortgage but a deed of absolute sale. On the following day, 3 June 1971, Juliet, accompanied by X, went back to Romeo and demanded the reformation it, Romeo prepared and signed a document wherein, as vendee In the deed of sale above mentioned, he obligated and bound himself to resell the land to Juliet or her heirs and successors for the same consideration as reflected in the deed of sale (P7,000) within a period of two (2) years, or until 3 June 1973. It Is further stated therein that should the Vendor (Juliet) fail to exercise her right to redeem within the said period, the conveyance shall be deemed absolute and irrevocable. Romeo did not take possession of the property. He did not pay the taxes thereon. Juliet died in January I973 without having repurchased the property. Her only surviving heir, her son X, failed to repurchase the property on or before 3 June 1973. In 1975, Romeo sold the property to Y for P50,000.00. Upon learning of the sale, X filed an action for the nullification of the sale and for the recovery of the property on the ground that the so-called deed of absolute sale executed by his mother was merely an equitable mortgage, taking into account the inadequacy of the price and the failure of Romeo to take possession of the property and to pay the taxes thereon. Romeo and Y maintain that there was a valid absolute sale and that the document signed by the former on 3 June 1973 was merely a promise to sell. (a) If you were the Judge, would you uphold the theory of X? (b) If you decide in favor of Romeo and Y, would you uphold the validity of the promise to sell? Page 307 of 391 Answer: A. I will not uphold the theory of X for the nullification of the sale and for the recovery of the property on the ground that the so-called sale was only an equitable mortgage. An equitable mortgage may arise only if, in truth, the sale was one with the right of repurchase. The facts of the case state that the right to repurchase was granted after the absolute deed of sale was executed. Following the rule in Cruzo vs. Carriaga (174 SCRA 330), a deed of repurchase executed independently of the deed of sale where the two stipulations are found in two instruments instead of one document, the right of repurchase would amount only to one option granted by the buyer to the seller. Since the contract cannot be upheld as a contract of sale with the right to repurchase, Art. 1602 of the Civil Code on equitable mortgage will not apply. The rule could have been different if both deeds were executed on the same occasion or date, in which case, under the ruling in spouses Claravall v. CA (190 SCRA 439), the contract may still be sustained as an equitable mortgage, given the circumstances expressed in Art. 1602. The reserved right to repurchase Is then deemed an original intention. B, If I were to decide in favor of Romeo and Y, I would not uphold the validity of the promise to sell, so as to enforce it by an action for specific performance. The promise to sell would only amount to a mere offer and, therefore, It is not enforceable unless it was sought to be exercised before a withdrawal or denial thereof Even assuming the facts given at the end of the case, there would have been no separate consideration for such promise to sell. The contract would at most amount to an option which again may not be the basis for an action for specific performance. Obligations and contracts; 1991 No 11: A is the lessee of an apartment owned by Y. A allowed his married but employed daughter B, whose husband works in Kuwait, to occupy it. The relationship between Y and A soured. Since he has no reason at all to eject A, Y, in connivance with the City Engineer, secured from the latter an order for the demolition of the building. A Immediately filed an action in the Regional Trial Court to annul the order and to enjoin its enforcement. Y and A were able to forge a compromise agreement under which A agreed to a twenty percent (20%) increase in the monthly rentals. They further agreed that the lease will expire two (2) years later and that in the event that Y would sell the property, either A or his daughter B shall have the right of first refusal. The Compromise Agreement was approved by the court. Six (6) months before the expiration of the lease, A died. Y sold the property to the Visorro Realty Corp. without notifying B. B then filed an action to rescind the sale in favor of the corporation and to compel Y to sell the property to her since under the Compromise Agreement, she was given the right of first refusal which, she maintains is a stipulation pour atrui under Article 1311 of the Civil Code. Is she correct? Answer; B is not correct. Her action cannot prosper. Article 1311 requires that the third person intended to be benefited must communicate his acceptance to the obligor before the revocation. There is no showing that B manifested her acceptance to Y at any time before the death of A and before the sale. Hence. B cannot enforce any right under the alleged stipulation pour atrui. 08; Sales; equitable mortgage 1977 No. XVI-c Page 308 of 391 When may a contract of sale of realty be presumed to be an equitable mortgage? Cite five (5) instances, Answer The contract shall be presumed to be an equitable mortgage, in any of the following cases: (1) When the price of sale with right to repurchase is unusually inadequate; (2) When the vendor remains in possession as lessee or otherwise; (3) When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed; (4) When the purchaser retains for himself a part of the purchase price; (5) When the vendor binds himself to pay the taxes on the thing sold; (6) In any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation; and (7) When there is a doubt as to whether the contract is a contract of sale with right of repurchase or an equitable mortgage. (Arts. 1602, 1603, Civil Code). 08; Sales; equitable mortgage 1979 No. VIII In a document dated June 10, 1960 and expressly denominated "Deed of Sale with Right to Repurchase," AB sold his land to CD. Substantially, the document provided among others: "I, AB, being in great need of money, hereby sell my 10hectare coconut land to CD for P2.000 00. It is agreed that I have the right to repurchase this land in 10 years. If I fail to buy back the property, I shall deliver possession thereof to CD." Upon failure of AB to repurchase the property, CD, in 1971, consolidated his title and files an action to recover possession, AB files an answer offering to return the P2,000.00 plus interest at the legal rate. Will the action of CD prosper? Why? Answer The action of CD will not prosper. The contract in the instant case is not a true contract of sale with right of repurchase. The purchase price is unusually inadequate and the vendor is still in possession of the property. There is now a presumption that the real covenant or agreement is an equitable mortgage. This is strengthened by the fact that AB, the vendor, was in dire straights: he was in great need of money. The land, therefore, is merely the security for the loan. Alternative Answer The action of CD will not prosper. Whether we look at the deed of sale as a true contract of sale with right of repurchase or a mere contract of equitable mortgage, the effect in the instant case will be the same. If it is a true contract of sale with right of repurchase, according to the Civil Code, the vendor may still exercise the right to repurchase within thirty days from the time final judgment was rendered in a civil action on the basis that the contract was a true sale with right to repurchase. If it is a mere equitable mortgage, which we believe it is because of the gross inadequacy of the purchase, the fact that the vendor is still in possession of the property, and the fact that AB was in great need of money, the vendor (mortgagor) may still exercise his right to redeem the property by paying the mortgage loan plus interest. Page 309 of 391 08; Sales; equitable mortgage 1980 No. VI (a) "S" executed a Deed of Sale of a parcel of land in favor of "T" reserving for himself the right to repurchase the same within five years from the date of the contract. The contract provided that during the repurchase period "S" will retain possession of the land as lessee and pay the land taxes thereon. The consideration for the sale was P10,000.00 but the land was worth double the price. "S" failed to repurchase the land within the agreed period and "T" applied to the Court for the consolidation of his title. "S" opposed the application and claimed that he had the right to repurchase the land. Whose stand should be upheld? Answer (a) The stand of "S" should be upheld. In reality, the contract in the instant case is an equitable mortgage. The land is merely the collateral or security for the payment of a loan of P10,000.00. This is obvious from the deed of sale itself. In the first place, it says that "S" will retain possession of the land as lessee; in the second place, it says that "S", the vendor, shall pay the taxes thereon; and in the third place, the purchase price is unusually inadequate. According to the Civil Code, the presence of any of these will be sufficient to raise the presumption that the contract is an equitable mortgage. (Note: The above answer is based on Art 1602, Civil Code. See also Gardner vs. CA, 80 SCRA 399; Gloria-Diaz vs. CA, 84 SCRA 483; Labasan vs. Lacuesta, 86 SCRA 16.) 08; Sales; Maceda law 2000 No XIII Priscilla purchased a condominium unit in Makati City from the Citiland Corporation for a price of P10 Million, payable P3 Million down and the balance with interest thereon at 14% per annum payable in sixty (60) equal monthly installments of P198,333.33. They executed a Deed of Conditional Sale in which it is stipulated that should the vendee fail to pay three (3) successive installments, the sale shall be deemed automatically rescinded without the necessity of judicial action and all payments made by the vendee shall be forfeited in favor of the vendor by way of rental for the use and occupancy of the unit and as liquidated damages. For 46 months, Priscilla paid the monthly installments religiously, but on the 47th and 48th months, she failed to pay. On the 49th month, she tried to pay the installments due but the vendor refused to receive the payments tendered by her. The following month, the vendor sent her a notice that it was rescinding the Deed of Conditional Sale pursuant to the stipulation for automatic rescission, and demanded that she vacate the premises. She replied that the contract cannot be rescinded without judicial demand or notarial act pursuant to Article 1592 of the Civil Code. a) Is Article 1592 applicable? (3%) b) Can the vendor rescind the contract? (2%) SUGGESTED ANSWER: a) Article 1592 of the Civil Code does not apply to a conditional sale. In Valarao v. CA, 304 SCRA 155, the Supreme Court held that Article 1592 applies only to a contract of sale and not to a Deed of Conditional Sale where the seller has reserved title to the property until full payment of the purchase price. The law applicable is the Maceda Law. Page 310 of 391 SUGGESTED ANSWER; b) No, the vendor cannot rescind the contract under the circumstances. Under the Maceda Law, which is the law applicable, the seller on installment may not rescind the contract till after the lapse of the mandatory grace period of 30 days for every one year of installment payments, and only after 30 days from notice of cancellation or demand for rescission by a notarial act. In this case, the refusal of the seller to accept payment from the buyer on the 49th month was not Justified because the buyer was entitled to 60 days grace period and the payment was tendered within that period. Moreover, the notice of rescission served by the seller on the buyer was not effective because the notice was not by a notarial act. Besides, the seller may still pay within 30 days from such notarial notice before rescission may be effected. All these requirements for a valid rescission were not complied with by the seller. Hence, the rescission is invalid. 08; Sales; Maceda law 1976 No. IX-b If A and B fix the price at F50.000.00 payable in installment, secured by a chattel mortgage on the car and a real estate mortgage by a third party, upon foreclosure of the chattel mortgage, may A foreclose the real estate mortgage for the unpaid balance? Explain. Answer No, according to the decided cases of Cruz and Reyes v. Filipinas Investment and Financing Corporation and Pascual v. Universal Motors, the seller cannot recover the deficiency by foreclosing the real estate mortgage given by the 3rd party because the latter would have a right to be indemnified by B and therefore indirectly the seller would be recovering the deficiency from B which is prohibited by law, (Article 1484). 08; Sales; Maceda law 1977 No. V-a A bought on installment a residential subdivision lot, but after the 5th year, was unable to make further payments. Can the developer cancel the sale unilaterally, or must he go to court to obtain rescission? Is A entitled to any refund? Answer Yes, the developer can cancel the sale unilaterally. He need not go to court in order to obtain rescission, provided that the actual cancellation of the contract shall take place after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial act and upon full payment of the cash surrender value to the buyer. (Rep. Act No. 6552, Sec. 8, (b).) A shall be entitled to the cash surrender value, which is fifty per cent (60%) of the total payment made by him to the seller (Ibid). 08; Sales; Maceda law; Recto law 1999 No XIII What are the so-called "Maceda" and "Recto" laws in connection with sales on installments? Give the most important features of each law. (5%) ANSWER: The Maceda Law (R.A. 655) is applicable to sales of immovable property on installments. The most important features are (Rillo v. CA, 247 SCRA 461): Page 311 of 391 (1) After having paid installments for at least two years, the buyer is entitled to a mandatory grace period of one month for every year of installment payments made, to pay the unpaid installments without interest. If the contract is cancelled, the seller shall refund to the buyer the cash surrender value equivalent to fifty percent (50%) of the total payments made, and after five years of installments, an additional five percent (5%) every year but not to exceed ninety percent (90%) of the total payments made. (2) In case the installments paid were less than 2 years, the seller shall give the buyer a grace period of not less than 60 days. If the buyer fails to pay the installments due at the expiration of the grace period, the seller may cancel the contract after 30 days from receipt by the buyer of the notice of cancellation or demand for rescission by notarial act. The Recto Law (Art. 1484} refers to sale of movables payable in installments and limiting the right of seller, in case of default by the buyer, to one of three remedies: (a) exact fulfillment; (b) cancel the sale if two or more installments have not been paid; (c) foreclose the chattel mortgage on the things sold, also in case of default of two or more installments, with no further action against the purchaser. 08; Sales; option contract 2002 No XIV. A. Explain the nature of an option contract. (2%) SUGGESTED ANSWERS: A. An option contract is one granting a privilege to buy or sell within an agreed time and at a determined price. It must be supported by a consideration distinct from the price. (Art. 1479 and 1482, NCC) 08; Sales; option contract 1975 No. XV A agreed to sell to B a parcel of land for P5,000. B was given up to May 6, 1975 within which to raise the necessary funds. It was further agreed that if B could not produce the money on or before said date, no liability would attach to him. Before May 6, 1976, A backed out of the agreement Is A obliged to sell the property to B? Explain. Answer This is an option given by A to B for the latter to buy A's property. As it is not supported by a consideration distinct from the price of the sale, the option can be withdrawn at anytime before it is accepted. (Art. 1324, 1479). On the other hand, if D bound himself to buy it for the price stated at the time the agreement was entered into, then it became a bilateral promise to buy and sell which is reciprocally demandable. 08; Sales; option; earnest money; Art. 1592 1993 No. 8: LT applied with BPI to purchase a house and lot In Quezon City, one of its acquired assets. The amount offered was Pl,000,000.00 payable, as follows: P200,000.00 down payment, the balance of P800,000.00 payable within 90 days from June 1, 1985. BPI accepted the offer, whereupon LT drew a check for Page 312 of 391 P200,000.00 in favor of BPI which the latter thereafter deposited in its account. On September 5, 1985, LT wrote BP'I requesting extension until October 10, 1985. within which to pay the balance, to which BPI agreed. On October 5, 1985, due to the expected delay in the remittance of the needed amount by his financier from the United States, LT wrote BPI requesting a last extension until October 30, 1985, within which to pay the balance. BPI denied LTs request because another had offered to buy the; same property for P1,500,000.OO. cancelled its agreement with LT and offered to return to him the amount of P200,200.00 that LT had paid to it. On October 20, 19!85, upon receipt of the amount of P800,000.00 from his US financier, LT offered to pay the amount by tendering a cashier's check therefor but which BPI refused to accept. LT then filed a complaint against BPI in the RTC for specific performance and deposited in court the amount of P800,OOO.OO. Is BPI legally correct in canceling its contract with LT? Answer; BPI is not correct in canceling the contract with LT. In Lina Topacio v Court of Appeals and BPI Investment (G. R No. 102606, July 3. 1993, 211 SCRA 291). the Supreme Court held that the earnest money is part of the purchase price and is proof of the perfection of the contract. Secondly, notarial or judicial rescission under Art. 1592 and 1991 of the Civil Code is necessary (Taguba v. de Leon, 132 SCRA 722.) Alternative Answer: BPI is correct in canceling its contract with LT but BPI must do so by way of Judicial rescission under Article 1191 Civil Code. The law requires a judicial action, and mere notice of rescission is insufficient if it is resisted. The law also provides that slight breach is not a ground for rescission (Song Fo & Co, vs, Hawaiian Phil Co., 47 Phils. 821), Delay in the fulfillment of the obligation (Art. 1169, Civil Code) is a ground to rescind, only if time is of the essence. Otherwise, the court may refuse the rescission if there is a just cause for the fixing of a period. 08; Sales; pacto de retro; when not 1977 No. XIV-a For only P100,000.00, V sold to C a house and lot valued at P200,000.00. A month later, C stipulated in writing that V may repurchase in 2 years for P120,000. After 4 years, C refused to reconvey and V sued for reformation. What legal grounds should be sustained? How should C resist the suit? Who should prevail and why? Answer V may try to sustain his position by claiming that the instrument executed by C stipulating that V may repurchase the property for P120,000.00 is a part or continuation of the previous absolute sale, and that the two transactions taken together constitute a contract of sale with right of repurchase. Hence, because the price is unusually inadequate, the contract is in reality a contract of equitable mortgage. C, on the other hand, should resist the suit by claiming that the two transactions taken together are separate and distinct from each other. The first is an absolute sale, while the second, wherein C stipulated that V may repurchase the property, is merely an option to buy. Hence, the presumption of an equitable mortgage cannot be sustained. Besides, even assuming arguendo that there is indeed a contract of sale with right of repurchase, such right has already prescribed (Art. 1606, Civil Code). Because of the ground stated by C, he should prevail. (Villarica vs. Court of Appeals, 26 SCRA 189) Page 313 of 391 08; Sales; perfected sale 2002 No XIV. Bert offers to buy Simeon’s property under the following terms and conditions: P 1 million purchase price, 10% option money, the balance payable in cash upon the clearance of the property of all illegal occupants. The option money is promptly paid and Simeon clears the property of illegal occupants in no time at all. However, when Bert tende4rs payment of the balance and ask Simeon for the deed for absolute sale, Simeon suddenly has a change of heart, claiming that the deal is disadvantageous to him as he has found out that the property can fetch three time the agreed purchase price. Bert seeks specific performance but Simeon contends that he has merely given Bert an option to buy and nothing more, and offers to return the option money which Bert refuses to accept. B. Will Bert’s action for specific performance prosper? Explain. (4%) C. May Simeon justify his refusal to proceed with the sale by the fact that the deal is financially disadvantageous to him? Explain. (4%) SUGGESTED ANSWERS: B. Bert’s action for specific performance will prosper because there was a binding agreement of sale, not just an option contract. The sale was perfected upon acceptance by Simeon of 10% of the agreed price. This amount is in really earnest money which, under Art. 1482, “shall be considered as part of the price and as proof of the perfection of the contract.” (Topacio v. CA, 211 SCRA 291 [1992]; Villongco Realty v. Bormaheco, 65 SCRA 352 [1975]). C. Simeon cannot justify his refusal to proceed with the sale by the fact that the deal is financially disadvantageous to him. Having made a bad bargain is not a legal ground for pulling out a biding contract of sale, in the absence of some actionable wrong by the other party (Vales v. Villa, 35 Phil 769 [1916]), and no such wrong has been committed by Bert. 08; Sales; perfected sale 1989 No. 13: (1) "X" offered to buy the house and lot of "Y" for P300,000. Since "X" had only P200,000 in cash at the time, he proposed to pay the balance of P1OO.OOO in four (4) equal monthly installments. As the title to the property was to be immediately transferred to the buyer, "X", to secure the payment of the balance of purchase price, proposed to constitute a first mortgage on the property in favor of "Y". "Y" agreed to the proposal so that on April 15, 1987, the contract of sale in favor of "X" was executed and on the same date (April 15,1987), "X" constituted the said first mortgage. When the first installment became due. "X" defaulted in the payment thereof, "Y" now brings an action to rescind the contract of sale, which "X" opposed. How would you decide the conflict? Give your reasons. Answer: Either of the following answers should be given full credit: A. "Y" cannot rescind. The relationship is no longer that of buyer and seller because the sale was already perfected and consummated. The relationship is already that of mortgagor and mortgagee. Rescission is not a principal action retaliatory in character but a subsidiary one available only in the absence of any other legal remedy. Foreclosure is not only a legal but a contractual remedy. The debtor must pay and, in case of breach, the mortgagee may foreclose. B. "Y" can rescind. Specific performance and rescission are alternative remedies in breach of reciprocal obligations. The contract is only partly Page 314 of 391 consummated. The price is not fully paid. The mortgage is an accessory contract of guarantee and can be waived by the creditor who can avail of his remedies in the principal contract. Alternative Answers: C. Considering that the default covers only P25,000.00 and the sum of P206,000.00 has already been paid, there is only, a slight or casual breach negating the right of the seller to rescind the contract of sale. D. Rescission is available provided that the vendor give the vendee the 60day period as required by the Maceda Law or the Realty Installment Buyers Law. 08; Sales; perfected sale 1989 No. 13: (2) "X" came across an advertisement in the "Manila Daily Bulletin" about the rush sale of three slightly used TOYOTA cars, Model 1989 for only P200,000 each. Finding the price to be very cheap and in order to be sure that he gets one unit ahead of the others, "X" immediately phoned the advertiser "Y" and place an order for one car. "Y" accepted the order and promised to deliver the ordered unit on July 15,1989. On the said date, however, "Y" did not deliver the unit. "X" brings an action to compel "Y" to deliver the unit. Will such action prosper? Give your reasons. Answer; The contract in this case has been perfected. However, the contract is unenforceable under the statute of -frauds, The action will prosper if there is no objection to the oral evidence, which amounts to a waiver of the statute of frauds. 08; Sales; perfected sale 1980 No. V (b) "Q", the owner of a house and lot in Quezon City, gave an option to "R" to purchase said property for P100,000.00 within ninety days from May 1, 1979. "R" gave "Q" one (Pl.00) peso as option money. Before the expiration of the ninety-day period, "R" went to "Q" to exercise his option and to pay the purchase price but "Q" refused because somebody wanted to buy his property for P150,000 and because there was no sufficient consideration for the option. "R" sued "Q" to compel him to accept payment and execute a deed of sale in his favor. Decide the case. Answer (b) "Q" should be compelled to accept the purchase price of P100,000 and to execute a deed of sale of the subject property hi favor of "R". The reason is that there is already a perfected contract of sale. Undoubtedly, in the instant case, there is a unilateral offer of "Q" to sell the subject property to "R". For that purpose, the latter is given an option of ninety days from May 1, 1979 within which to exercise the option. The consideration for the option is P1.00. Since there is a consideration for the option, "Q" is now bound by his promise to sell the property to "R" so long as the latter will exercise the option within the agreed period of ninety days (Arts. 1324, 1479, par. 2, Civil Code). "R" exercised his option. Therefore, there is already a perfected contract of sale. At any rate, even assuming that there is indeed an insufficient consideration, or that there is no consideration whatsoever, the result would still be the same. Since "R" accepted the offer before it could be withdrawn or re-voiced by "Q", there is already a perfected contract of sale. (Sanchez vs. Rigos 45 SCRA 368). 08; Sales; Recto law Page 315 of 391 1976 No. IX-c May it be stipulated that in a foreclosure of the chattel mortgage to secure the purchase of a car on installment, the installments paid will not be refunded? Explain, Answer Yes, such a stipulation may be construed as a penalty clause and shall be valid insofar as the sum is not unconscionable. (Article 1486) 08; Sales; Recto Law 1981 No. 10 "O", owner of a copying machine, leased it to "L" at a rental of P4,OOO.OO a month for a period of one year with option on the part of "L" to buy the copying machine at the end of the year for P80,000.00, to be paid by applying the rentals, so that "L" needs only to pay P32,OOO.OO. "L" failed to pay rentals for the 4th, 5th and 6th months so that "0" terminated the lease and repossessed the copying machine, the sued "L" for the unpaid rental of three months, or P12,000.00. Is "0’s” suit legally tenable? Explain. Answer "0's" suit is legally untenable. By express provisions of Art. 1485 of the Civil Code, the preceding article (Art. 1484) shall be applied to contracts purporting to be leases of personal property with option to buy, when the lessor has deprived the lessee of the possession or enjoyment of the thing. Consequently, applying Art. 1484, upon taking possession of the copying machine, "O" has no further action against "L" to recover the unpaid rents. (Note: The above answer is based on the Recto Law (Arts. 1484, No. 3, and 1485, Civil Code) and on U.S. Commercial Co, vs. Halili, 93, Phil. 371.1 08; Sales; Recto law; recovery of deficiency 1984 No 16 A bought a truck from B payable in installment secured by a chattel mortgage executed by A on the truck. As additional security, A's brother, C, executed a real estate mortgage in favor of B. A defaulted in the payment of several installments. Consequently, B filed an action for replevin, repossessed the truck, and foreclosed the chattel mortgage. Can B proceed against the other properties of A and the real estate mortgage executed by C to recover the deficiency, if any, after the chattel mortgage foreclosure sale? Explain. Answer; A. Furnished by the Office of Justice Planet. No. Under Art. 1484, in a contract of sale of personal property the price of which is payable in installments, if the seller elects to foreclose after buyer defaults, he shall have no further action against the purchaser to recover any unpaid balance. Since the principal obligation is extinguished, the mortgage executed by C as security therefore will also necessarily be released. (Art. 2086). B. Comments and Suggested Answer We agree with the answer of the Bar Examiner. Page 316 of 391 08; Sales; redemption 2002 No XII. Adela and Beth are co-owners of a parcel of land. Beth sold her undivided share of the property to Xandro, who promptly notified Adela of the sale and furnished the latter a copy of the deed of absolute sale. When Xandro presented the deed for registration, the register of deeds also notified Adela of the sale, enclosing a copy of the deed with the notice. However, Adela ignored the notices. A year later, Xandro filed a petition for the partition of the property. Upon receipt of summons, Adela immediately tendered the requisite amount for the redemption. Xandro contends that Adela lost her right of redemption after the expiration of 30 days from her receipt of the notice of the sale given by him. May Adela still exercise her right of redemption? Explain. (5%) SUGGESTED MAIN ANSWER: Yes, Adela may still exercise her right of redemption notwithstanding the lapse of more than 30 days from notice of the sale given to her because Article 1623 of the New Civil Code requires that the notice in writing of the sale must come from the prospective vendor or vendor as the case may be. In this case, the notice of the sale was given by the vendee and the Register of Deeds. The period of 30 days never tolled. She can still avail of that right. (FIRST) ALTERNATIVE MAIN ANSWER: Adela can no longer exercise her right of redemption. As co-owner, she had only 30 days from the time she received written notice of the sale which in this case took the form of a copy of the deed of sale being given to her (Conejero v. CA, 16 SCRA 775 [1966]). The law does not prescribe any particular form of written notice, nor any distinctive method for notifying the redemptioner (Etcuban v. CA, 148 SCRA 507 [1987]). So long as the redemptioner was informed in writing, he has no cause to complain (Distrito v. CA, 197 SCRA 606, 609 [1991]). In fact, in Distrito, a written notice was held unnecessary where the co-owner had actual knowledge of the sale, having acted as middleman and being present when the vendor signed the deed of sale. 08; Sales; redemption; conventional and legal 1977 No. XVI-b When do conventional redemptions and legal redemptions take place? Answer Conventional redemption takes place when the vendor reserves the right to repurchase the thing sold with the obligation to reimburse to the vendee the price of the sale, the expenses of the contract, other legitimate payments made by reason of the sale, as well as necessary and useful expenses made on the thing sold. (Arts. 1601, 1616, Civil Code). Legal redemption takes place when there is a right to be subrogated upon the same terms and conditions stipulated in the contract, in the place of one who acquires a thing by purchase or dation in payment, or by any other transaction whereby ownership is transmitted by onerous title. (Art. 1619, Civil Code). (NOTE: Enumeration of the different instances when the right of redemption takes place should also be accepted as sufficient answers.) 08; Sales; redemption; legal 2001 No XIX Page 317 of 391 Betty and Lydia were co-owners of a parcel of land. Last January 31, 2001, when she paid her real estate tax, Betty discovered that Lydia had sold her share to Emma on November 10, 2000. The following day, Betty offered to redeem her share from Emma, but the latter replied that Betty's right to redeem has already prescribed. Is Emma correct or not? Why? (5%) SUGGESTED ANSWER: Emma, the buyer, is not correct. Betty can still enforce her right of legal redemption as a co-owner. Article 1623 of the Civil Code gives a co-owner 30 days from written notice of the sale by the vendor to exercise his right of legal redemption. In the present problem, the 30-day period for the exercise by Betty of her right of redemption had not even begun to run because no notice in writing of the sale appears to have been given to her by Lydia. 08; Sales; redemption; legal 1982 No. 18 "A", "B" and "C" bought a parcel of land. Subsequently, "A" sold his share to "X". (a) What right, if any, do "B" and "C" have with respect to the sale? Reason. (b) May "B" exercise the same right if "A" had sold his share to "C" instead of to "X"? Reason, (c) Assume that in question (a) neither "B" nor "C" had exercised the right and later "B" sold his share to "Y", may "X" exercise that right referred to in question (a) ? Reason. Answer (a) "B" and "C" may exercise the right of legal redemption. In other words, they can be subrogated to all of the rights of "X" under the same terms and conditions stipulated in the contract. Should the two desire to exercise the right, they may only do so in proportion to their respective shares in the thing owned in common. (b) No, "B" cannot exercise the same right if "A" had sold his share to "C" instead of to "X". The reason is obvious. "C" cannot be classified as a third person within the meaning of the law. (c) Yes, "X" may exercise the right of legal redemption. For all legal purposes, he has already become a co-owner. Being a co-owner, he is, therefore entitled to all of the rights of a co-owner, including the right of legal redemption. (Note: The above answers are based on Arts. 1619 and 1620 of the Civil Code.) 08; Sales; redemption; legal; by co-owners 1986 No. 17: Mayroon, Magari and Kilalanin Sr. are co-owners in equal shares of a piece of land. Kilalanin Sr. sold his undivided interest to his son Kilalanin Jr. A week later, Mayroon and Magari served notice on Kilalanin Jr. of their intention to redeem the portion sold. However, Kilalanin Jr. refused to allow redemption arguing that being the son of Kilalanin Sr., he was not a third person in contemplation of law with respect to redemption by co-owners. Is the refusal by Kilalanin Jr. justified? Explain. Answer: Page 318 of 391 The son is still a stranger, and under the C.C. when a share of a co-owner is sold to a third person, the other co-owners may exercise the right of legal redemption. A third person is defined by the court in one case as "one who is not a coowner." Answer - No. He is a 3rd person in contemplation of law. The law considers as a 3rd person any purchaser who is not one of the co-owners. The fact that he is the son of the vendor — co-owner does not make him a co-owner as in fact the son had acquired the interest of his father by purchase. Answer - Yes. the son is not a third person (Villanueva vs. Florendo, 139 SCRA 329). 08; Sales; right of first refusal in favor of lessee; effect thereof 1998 No X. In a 20-year lease contract over a building, the lessee is expressly granted a right of first refusal should the lessor decide to sell both the land and building. However, the lessor sold the property to a third person who knew about the lease and in fact agreed to respect it. Consequently, the lessee brings an action against both the lessor-seller and the buyer (a) to rescind the sale and (b) to compel specific performance of his right of first refusal in the sense that the lessor should be ordered to execute a deed of absolute sale In favor of the lessee at the same price. The defendants contend that the plaintiff can neither seek rescission of the sale nor compel specific performance of a "mere" right of first refusal. Decide the case. [5%] Answer: The action filed by the lessee, for both rescission of the offending sale and specific performance of the right of first refusal which was violated, should prosper. The ruling in Equatorial Realty Development, Inc. vs. Mayfair Theater, Inc. (264 SCRA 483), a case with similar facts, sustains both rights of action because the buyer in the subsequent sale knew the existence of right of first refusal, hence in bad faith. Another Answer: The action to rescind the sale and to compel the right to first refusal will not prosper. (Ang Yu Asuncion vs. CA, 238 SCRA 602). The Court ruled in a unanimous en banc decision that the right of first refusal is not founded upon contract but on a quasi-delictual relationship covered by the principles of human relations and unjust enrichment (Art. 19, et seq. Civil Code). Hence the only action that will prosper according to the Supreme Court is an "action for damages in a proper forum for the purpose." 08; Sales; right of first refusal in favor of the lessee; effect thereof 1996 No. 14: Ubaldo is the owner of a building which has been leased by Remigio for the past 20 years. Ubaldo has repeatedly assured Remigio that if he should decide to sell the building, he will give Remigio the right of first refusal. On June 30, 1994, Ubaldo informed Remigio that he was willing to sell the building for P5 Million. The following day, Remigio sent a letter to Ubaldo offering to buy the building at P4.5 Million. Ubaldo did not reply. One week later, Remigio received a letter from Santos Informing him that the building has been sold to him by Ubaldo for P5 Million, and that he will not renew Remigio's lease when it expires. Remigio filed an action against Ubaldo and Santos for cancellation of the sale, and to compel Ubaldo to execute a deed of absolute sale in his favor, based on his right of first refusal. Page 319 of 391 1) Will the action prosper? Explain. Answer: No, the action to compel Ubaldo to execute the deed of absolute sale will not prosper. According to Ang Yu v. Court of Appeals (238 SCRA 602), the right of first refusal is not based on contract but is predicated on the provisions of human relations and, therefore, its violation is predicated on quasi-delict. Secondly, the right of first refusal implies that the offer of the person in whose favor that right was given must conform with the same terms and conditions as those given to the offeree. In this case, however. Remigio was offering only P4.5 Million instead of P5 Million. Alternative Answer: No, the action will not prosper. The lessee's right of first refusal does not go so far as to give him the power to dictate on the lessor the price at which the latter should sell his property. Upon the facts given, the lessor had sufficiently complied with his commitment to give the lessee a right of first refusal when he offered to sell the property to the lessee for P5 Million, which was the same price he got in selling it to Santos. He certainly had the right to treat the lessee's counter-offer of a lesser amount as a rejection of his offer to sell at P5 Million. Thus, he was free to find another buyer upon receipt of such unacceptable counter-offer (Art. 1319. NCC). 2) If Ubaldo had given Remigio an option to purchase the building instead of a right of first refusal, will your answer be the same? Explain. Answer; Yes, the answer will be the same. The action will not prosper because an option must be supported by a consideration separate and distinct from the purchase price. In this case there is no separate consideration. Therefore, the option may be withdrawn by Ubaldo at any time. (Art. 1324, NCC) 08; Sales; right of repurchase 1993 No. 12: On January 2, 1980, A and B entered into a contract whereby A sold to B a parcel of land for and in consideration of P10.000.00. A reserving to himself the right to repurchase the same. Because they were friends, no period was agreed upon for the repurchase of the property. 1) Until when must A exercise his right of repurchase? 2) If A fails to redeem the property within the allowable period, what would you advise B to do for his better protection? Answer: 1) A can exercise his right of repurchase within four (4) years from the date of the contract (Art. 1606, Civil Code). 2} I would advise B to file an action for consolidation of title and obtain a judicial order of consolidation which must be recorded in the Registry of Property (Art. 1607. Civil Code). 08; Sales; tradition 1977 No. VI-b What is tradition and give five (5) kinds of tradition which are provided and recognized in the Civil Code. Answer Tradition is a derivative mode of acquiring ownership and other real rights by virtue of which they are transmitted from the patrimony of the grantor, in which they had previously existed, to that of the grantee by means of a just title, there being Page 320 of 391 both the intention and the capacity on the part of both parties (3 Sanchez Roman 238). The different kinds of tradition which are recognized in the Civil Code are: (1) Real tradition, which takes place by the delivery or transfer of a thing from hand to hand if it is movable, or by certain material and possessory acts of the grantee performed in the presence and with the consent of the grantor if it is immovable. (2) Constructive tradition, which takes place by the delivery of a movable or immovable thing by means of acts or signs indicative thereof. This delivery may take place in the following ways: a. Traditio symbolica, which consists in the delivery of a symbol representing the thing which is delivered, such as the key to a warehouse; b. Traditio longa manu, which consists in the grantor pointing out to the grantee the thing which is delivered which at the time must be within sight; c. Traditio brevi manu, which takes place when the grantee is already in "possession of the thing under a title which is not of ownership, such as when the lessee purchases from the lessor the object of the lease; and d. Traditio constitutum possessorium, which takes place when the grantor alienates a thing belonging to him, but continues in possession thereof under a different title, such as that of a lessee, pledgee or depositary. (3) Quasi-tradicion, which is used to indicate the exercise of a right by the grantee with the acquiescence of the grantor; and (4) Tradicion por ministerio de la ley, which refers to delivery that takes place by operation of law. (See Arts. 1497-1501, Civil Code; 2 Castan 208-209; 3 Sanchez Roman 209-210). (NOTE: The above kinds of tradition may be stated only, without defining them.) 08; Sales; transfer of ownership 1990 No 5: D sold a second-hand car to E for P150,000.00 The agreement between D and E was that half of the purchase price, or P75,000.00, shall be paid upon delivery of the car to E and the balance of P75,000.00 shall be paid in five equal monthly installments of P15,000.00 each. The car was delivered to E. and E paid the amount of P75.000.00 to D. Less than one month thereafter, the car was stolen from E's garage with no fault on E's part and was never recovered. Is E legally bound to pay the said unpaid balance of P75.000.0O? Explain your answer. Answer: Yes, E is legally bound to pay the balance of P75,000.OO. The ownership of the car sold was acquired by E from the moment it was delivered to him. Having acquired ownership, E bears the risk of the loss of the thing under the doctrine of res peril domino. [Articles 1496. 1497, Civil Code). 08; Sales; transfer of ownership 1991 No 17: Pablo sold his car to Alfonso who issued a postdated check in full payment therefor. Before the maturity of the check. Alfonso sold the car to Gregorio who later sold it to Gabriel. When presented for payment, the check issued by Alfonso was Page 321 of 391 dishonored by the drawee bank for the reason that he, Alfonso, had already closed his account even before he issued his check. Pablo sued to recover the car from Gabriel alleging that he (Pablo) had been unlawfully deprived of it by reason of Alfonso's deception. Will the suit prosper? Answer: No. The suit will not prosper because Pablo was not unlawfully deprived of the car although he was unlawfully deprived of the price. The perfection of the sale and the delivery of the car was enough to allow Alfonso to have a right "of ownership over the car, which can be lawfully transferred to Gregorio. Art. 559 applies only to a person who is in possession in good faith of the property, and not to the owner thereof. Alfonso, in the problem, was the owner, and. hence, Gabriel acquired the title to the car. Non-payment of the price in a contract of sale does not render ineffective the obligation to deliver. The obligation to deliver a thing is different from the obligation to pay its price. EDCA Publishing Co. v. Santos (1990) 08; Sales; vendor’s lien 1985 No. 13 A) A sold to B a piano for P10,000, payable in monthly installments of P1,000 each. After paying the first installment, B resold the piano to C who paid P2,-000.00, leaving a balance of F8,000.00. Thereafter, X sued B for the value of services rendered to him and had the credit of P8,000, due B from C garnished. A thereupon filed a third-party claim with the sheriff for P20,000.00, representing the balance of the price of the piano still unpaid and a loan of P11,000.00 he gave B. Discuss who between A or X should prevail. Answers: A) 1, This is a question of priority between the vendor's lien and the garnishment order. Concurrences and preferences of credits are not applicable for the simple reason that there is no special proceeding to convene the creditors, but since both are preferred in the sense that one is the vendor and the other has a garnishment order, it is a question of who is preferred between the two. Therefore, the vendor's lien of A is superior because the sale occurred before. The moment he sold the piano, there already arose the vendor's lien. 2. The right of X should prevail over that of A. The problem relates to the efficacy of the garnishment order on B's receivables from the sale and not on the piano itself. Accordingly, the unpaid seller's lien which is a lien on the piano as the object of A's sale, not being really involved in the garnishment order, will not allow A to question said garnishment order. 08; Sales; who bears risk of loss 1981 No. 11 "S", an American resident of Manila, about to leave on a vacation, sold his car to "B" for U.S. $2,000.00, the payment to be made ten days after delivery to "X", a third party depositary agreed upon, who shall deliver the car to "B" upon receipt by "X" of the purchase price. It was stipulated that ownership is retained by "S" until delivery of the car to "X". Five days after delivery of the car to "X", it was destroyed in a fire which gutted the house of "X", without the fault of either "X" or "B". Page 322 of 391 a) Is buyer "B" still legally obligated to pay the purchase price? Explain. Answer (a) Yes, buyer "B" is still legally obligated to pay the purchase price. It must be observed that "S" had already delivered the car to "X", the third party depositary or bailee. It was agreed that ownership is retained by "S" until delivery to "X". Therefore, in effect, there was already a transfer of the right of ownership over the car to "B". Consequently, "B" shall assume the fortuitous loss of the car. As a matter of fact, even if it was agreed that "S" shall retain the ownership of the car until the purchase price has been paid by "B", the end result will still be the same. Since eventually, the purpose is to secure performance by the buyer of his obligation to pay the purchase price, by express mandate of the law, the fortuitous loss of the car shall be assumed by "B". (Note: The above answer is based on Art. 1504 of the Civil Code.) Page 323 of 391 09; Lease 1980 No. VIII (b) "CC" owned a two-story commercial building which he leased to "DD" with the agreement that all improvements made on the building shall belong to "CC". "DD" made improvements on said building purchasing on credit the materials needed for said improvements from "EE". "DD" failed to pay rentals to "CC" and failed to pay the value of the materials to "EE". "EE" sued "DD" for the unpaid value of the materials. "CC" also sued "DD" for the unpaid rentals. "CC" levied on the materials. "EE" objected to the levy claiming that the materials belong to him. Who is the owner of the materials—"CC", the unpaid lessor, or "EE", the unpaid vendor? Answer (b) "CC", the unpaid lessor, is the owner of the materials. When the materials were delivered and installed in the leased premises, "DD" became the owner thereof. Ownership is not transferred by perfection of the contract but by delivery. This is true even if the purchase is an credit, as in the case at bar. Under the contract of lease entered into by and between "CC" and "DD", "CC" became the owner of the above materials by virtue of the agreement in said contract that all improvements shall belong to the lessor. Therefore, when levy was made by "EE" on the materials, "DD", the judgment debtor, was no longer the owner thereof. (NOTE: The above answer is based on Sampaguita Pictures vs. Jalwinder, 93 SCR A 420,) 09; Lease 1983 No. 14 After leasing his restaurant to B, A leased the adjoining room to C knowing fully well that C was going to put up another restaurant, which he did. Is A liable to B for the damage he may have suffered as a result of the opening of C's restaurant? Why? Answer (Examiner's Answer) No. A has not obligated himself not to allow the establishment of another restaurant adjoining that leased to B nor is there any law which imposes such an obligation upon him. On the contrary, the Civil Code (Art, 1656) permits the lessor of a business to continue engaging in the same kind of business to which the thing leased is devoted unless there is a stipulation to the contrary. If the lessor is not forbidden, with less reason should a stranger, not a party to the lease be prohibited. (Committee's Answer) In addition to the answer of the Bar Examiner, the following answer, we believe, should also be considered correct: A is liable to B for the damages he may have suffered as a result of the opening of C's restaurant. In the exercise of his rights and the performance of his obligations, A did not observe honesty and good faith. A is, therefore, liable for damages. Page 324 of 391 (Note: The above answer is based on Art. 19, Civil Code, If the bar candidate invokes Art, 21 of the Civil Code, the Committee respectfully recommends that the answer should be considered correct.) 09; Lease 2000 No XIX. a) A leased his house to B with a condition that the leased premises shall be used for residential purposes only. B subleased the house to C who used it as a warehouse for fabrics. Upon learning this, A demanded that C stop using the house as a warehouse, but C ignored the demand, A then filed an action for ejectment against C, who raised the defense that there is no privity of contract between him and A, and that he has not been remiss in the payment of rent. Will the action prosper? (3%) SUGGESTED ANSWER: Yes, the action will prosper. Under Article 1651 of the Civil Code, the sublessee is bound to the lessor for all acts which refer to the use and preservation of the thing leased in the manner stipulated between the lessor and the lessee. 09; Lease of urban lands 1981 No. 12 "S", a landowner of an urban lot covered by a Torrens title, sold it to "B". "B" saw that the land was occupied by lessees who paid rent on a month to month basis. "S" told "B" that some lessees had been renting the parcels of land for twelve (12) years, other for eight (8) years. Unknown to "S" and "B" is that the area had been declared as urban land reform area. a) May "S" terminate the lease contracts and eject the lessees? Reasons, b) If the lessees went to you for legal assistance, what would be your advice? Explain briefly. c) Does "B" have a right against "S" in the event he is unable to obtain possession? Why? Answer (a) It is respectfully submitted that there is a typographical error here. The question should read — "may "B" terminate the lease contracts and eject the lessees? At any rate, let us answer both questions. "S", of course, cannot because he has already sold the property to "B". He does not have the necessary legal personality to do so. "B" cannot because he was aware of the existence of the lease contracts at the time when he bought the property from "S". Under the law, this is one of the exceptions to the rule that the purchaser of a piece of land which is under a lease that is not recorded in the Registry of Property may terminate the lease. (Note: The above answer with respect to the revised question is based on Art. 1676 of the Civil Code and on Divina Gratia Agro Commercial vs. CA. April 21, 1981.) The Committee, however, respectfully recommends that if the bar candidate answers the above question as is or in its revised form, it should be considered correct, (b) I would advice them to avail of the provisions of the Civil Code which declares that the courts may fix a longer term or period for the lease. Under the law on obligations in general (Art. 1197. Civil Code and under the law on lease (Art. 1687, Civil Code which declare that the courts may fix a longer term to fix or extend the period of the lease is explicitly recognized. Page 325 of 391 (Note: The above doctrine was stated in Divina Gracia Agro Commercial, April 21,1981.) (c) "B" does not have any right against "S" in the event he is unable to obtain possession of the property. He was aware of the existence of the lease contracts. He must, therefore, assume the consequences of his act in buying the property. (Note: The Committee respectfully recommends that if the bar candidate comes out with a contrary answer and supports his answer by saying that "B" would never have bought the property had he known that the area had been declared a land reform area, it should also be considered a correct answer.) 09; Lease; contract for a piece of work 1987 No. 10 Lino entered into a written agreement for the repair of his private plane with Airo Repair Works, Inc. for P500,000. Additional work was done upon the verbal request and authority of a duly recognized representative of Linn. Lino refused to pay for the additional work, interposing as a defense the absence of a written contract for the additional work done. Is the defense put up by Lino valid? Explain? Answer: The defense put up by Lino is valid under Article 1724 of the Civil Code. The change must have been authorized by the proprietor in writing, and the additional price to be paid the contractor must have been determined in writing by both parties. Answer !t appearing that the additional work was done upon verbal request and authority of a duly authorized representative of Lino, and the benefits have been received by Lino in consequence of the actual repair and the additional work, the defense put up by Lino is not valid on the ground that no person may unjustly enrich himself at the expense of another. 09; Lease; contract for a piece of work; liability of architects/contractors 1981 No. 13 "0", lot owner, contracted with "B", builder, to build a multi-story office building designed by "A", architect. "A" was paid a fee to supervise the construction and execution of his design. When completed, "O" accepted the work and occupied the building, but within one year, it collapsed in an earthquake that destroyed only the building and not the surrounding buildings. Construction was faulty. The building cost P3,000,000.00, but reconstruction cost would reach P10,000,000.00. a) What are the rights of "O" against "A" and "B"? Explain briefly. b) Amplify. Could "O" demand reconstruction of the building? On what ground? Answer (a) "O" can hold "A" and "B" solidarily liable for damages. This is clear from the Civil Code, which declares that the contractor is liable for damages if within fifteen years from the completion of the edifice or structure, the same should collapse on account of defects in the construction. If the engineer or architect who drew up the plans and specifications of the building supervises the construction, he shall be solidarily liable with the contractor. Acceptance of the building, after completion, does not imply waiver of the cause of action. However, the action must be brought within ten years following the collapse of the building. (Note: The above answer is based on Art. 1723 of the Civil Code. The Committee respectfully recommends that if the bar candidate attacks the problem Page 326 of 391 from the point of view of fortuitous events (Art.1174, Civil Code), he should be properly credited.) (b) "O" can demand reconstruction of the building. The obligation of both "A" and "B" is an obligation to do. Consequently, Art. 1167 of the Civil Code is applicable. According to this article, if a person obliged to do something does it in contravention of the tenor of the obligation, the same shall be executed at his cost. It is obvious that the builder "B" and the architect "A" performed their jobs in contravention of the tenor of obligation. As a matter of fact, had' the building not collapsed, under the same article, it may even be decreed that what has been poorly done be undone. Consequently, "O" can now demand for the reconstruction of the building by "A" and "B" or by another at their cost. (Note: The above answer is based on Art. 1167 of the Civil Code and on Manresa, Vol. 8, pp. 116-117.) 09; Lease; contract of labor 1977 No. XV-a 50 employees of A and Co. brought suit to collect living allowance and Christmas bonus from their employer. A and Co. resisted, alleging lack of a cause of action. Which party should be sustained? Answer Assuming that they meet all of the conditions prescribed by the law (P.D No. 85, and other decrees), the plaintiffs should be sustained. As regards the -claim for cost-of-living allowance, the law makes it an obligation of an employer to pay cost-of-living or emergency allowance to each employee who is receiving less than P600.00 a month. As regards the Christmas bonus, the law requires all covered employers to pay their employees a "13-monthpay" not later than December 24 of each year where the employee's salary is not more than Pl,000 00 a month. 09; Lease; effect of death of lesee 1997 No. 17: Stating briefly the thesis to support your answer to each of the following cases, will the death - a) of the lessee extinguish the lease agreement? Answer: a) No. The death of the lessee will not extinguish the lease agreement, since lease is not personal in character and the right is transmissible to the heirs. (Heirs of Dimaculangan vs. IAC, 170 SCRA 393). 09; Lease; ejectment 1977 No. XV-b L leased a house to J and the contract stipulated that in the event of nonpayment of the rent L could eject J without a court action. J defaulted for 2 months and L ejected him. Can J claim damages because the renunciation of his day in court is void? Answer J cannot claim damages because the renunciation of his day in court is void. True, under the law, in reciprocal obligations there is always a tacit resolutory condition that if one party is unable to comply with what is incumbent upon him, the injured has the power to rescind the obligation (Art. 1191, Civil Code). This rule is reiterated under the law on lease (Art. 1659, Civil Code). And it is a settled rule that Page 327 of 391 such injured party must invoke judicial aid. But then, these rules can be applied only to a case where the obligation is silent with respect to the power to rescind. The right to rescind is implied only it not expressly granted; no right can be said to be implied if expressly recognized. This is also well-settled. In the instant case, the right of L to eject J without a court action in case of non-payment of the rent was expressly recognized. What L did was merely to enforce what was agreed upon in their contract. 09; Lease; ejectment 1982 No. 20 By virtue of a written contract, "X" rented an apartment belonging to "Y" on June 5, 1979, for a monthly rental of P280.00. There was no stipulation with respect to the duration of the lease. In August 1980, desirous of increasing his rental income, "Y" devised a scheme to eject "X" from said apartment by refusing to accept the monthly rental paid by "X". Hence, "X" deposited the rental money with the PNB in the name of "Y" giving the latter notice of such deposit. After the lapse of 3 months, "Y" filed a complaint against "X" for ejectment on the ground of nonpayment of rent. After trial, the court rendered judgment, dismissing "Y"'s complaint, but fixed the period of lease to one year. "X" appealed from that portion of the decision fixing the period of lease. Decide "X"' s appeal with reasons. Answer "X"' s appeal is meritorious. True, arrears in payment of rent for three months at any one time is a ground for ejectment under Sec, 5 (b) of Batas Pambansa Big. 25, but then the law continues; provided, that in case of refusal to accept payment of the rental agreed upon, the lessee shall either deposit, by way of consignation, the amount in court or in a bank in the name of and with notice to the lessor. "X", according to the facts, deposited the amount in the PNB in the name of "Y" giving the latter notice of the deposit. Therefore, under the law, the lease is still covered by the rental law (B.P. Blg. 23). "X" cannot be ejected, The order of the court fixing the period of the lease at one year is contrary to law. (Note: The above answer is based on the rental law — Batas Pambansa Blg. 25.) 09; Lease; extinguishment 1993 No. 9: A is the owner of a lot on which he constructed a building in the total cost of P1O,OOO,OOO.OO. Of that amount B contributed P5.000.000,00 provided that the building as a whole would be leased to him (B) for a period of ten years from January 1. 1985 to December 31, 1995 at a rental of P100.000.00 a year. To such condition, A agreed. On December 20, 1990, the building was totally burned. Soon thereafter, A's workers cleared the debris and started construction of a new building. B then served notice upon A that he would occupy the building being constructed upon completion, for the unexpired portion of the lease term, explaining that he had spent partly for the construction of the building that was burned. A rejected B's demand. Did A do right in rejecting B's demand? Answer; Yes. A was correct in rejecting the demand of B. As a result of the total destruction of the building by fortuitous event, the lease was extinguished. (Art. 1655, Civil Code.) 09; Lease; implied new lease Page 328 of 391 1999 No XIV. (b) Under what circumstances would an implied new lease or a tacita reconduccion arise? (2%) ANSWER: (b) An implied new lease or tacita reconduccion arises if at the end of the contract the lessee should continue enjoying the thing leased for 15 days with the acquiescence of the lessor, and unless a notice to the contrary by either parties has previously been given (Art. 1670). In short, in order that there may be tacita reconduccion there must be expiration of the contract; there must be continuation of possession for 15 days or more; and there must be no prior demand to vacate. 09; Lease; lease of rural lands 2000 No XIX. b) In 1995, Mark leased the rice land of Narding in Nueva Ecija for an annual rental of P1,000.00 per hectare. In 1998, due to the El Nino phenomenon, the rice harvest fell to only 40% of the average harvest for the previous years. Mark asked Narding for a reduction of the rental to P500.00 per hectare for that year but the latter refused. Is Mark legally entitled to such reduction? (2%) SUGGESTED ANSWER: No, Mark is not entitled to a reduction. Under Article 1680 of the Civil Code, the lessee of a rural land is entitled to a reduction of the rent only in case of loss of more than 1/2 of the fruits through extraordinary and unforeseen fortuitous events. While the drought brought about by the "El Nino" phenomenon may be classified as extraordinary, it is not considered as unforeseen. ALTERNATIVE ANSWER: Yes, Mark is entitled to a reduction of the rent. His loss was more than 1/2 of the fruits and the loss was due to an extraordinary and unforeseen fortuitous event. The "El Nino" phenomenon is extraordinary because it is uncommon; it does not occur with regularity. And neither could the parties have foreseen its occurrence. The event should be foreseeable by the parties so that the lessee can change the time for his planting, or refrain from planting, or take steps to avoid the loss. To be foreseeable, the time and the place of the occurrence, as well as the magnitude of the adverse effects of the fortuitous event must be capable of being predicted. Since the exact place, the exact time, and the exact magnitude of the adverse effects of the "El Nino" phenomenon are still unpredictable despite the advances in science, the phenomenon is considered unforeseen. 09; Lease; lease with a term 1977 No. IX-b O leased a building to T, the later to pay P2.000.00 monthly and the light and water bills. The contract stipulated that non-payment of the rent would automatically cancel the contract, but otherwise T could stay on indefinitely. After 5 years, O tried to eject T because he planned to tear the building down and put up another. Can O eject T? Answer O can eject T. T cannot successfully set up the defense that under the contract of lease, he can continue occupying the building so long as he will faithfully fulfill his obligation of paying the rentals. It is clear that under this stipulation, the continuance and fulfillment of the contract would then depend solely and exclusively upon his uncontrolled choice between continuing paying the rentals or not, Page 329 of 391 completely depriving the owner of any say on the matter. If this defense is allowed, so long as defendant elected to continue the lease by continuing the payment of the rentals, the owner would never be able to discontinue it; conversely, although the owner should desire the lease to continue, the lessee could effectively thwart his purpose by the simple expedient of stopping payment of the Civil Code. (Encarnacion vs. Baldemar, 77 Phil. 470. To the same effect — see: General Enterprises, Inc. vs. Lianga Bay Logging Co., L-18487, August 31, 1964; Garcia vs. Rita Legarda,, Inc., L-20175, Oct. 30, 1967.) (NOTE: Another way of answering the above problem would be to say that 0 can eject T on the ground that, In reality, the lease is subject to a term, although indefinite in character. That will bring into play Arts. 1673 and 1197 of the Civil Code.) 09; Lease; liability for hidden defects 1978 No VII-b A leased a cold storage plant to B at a daily rental. B stored its foodstuffs in said storage plant while the refrigeration facilities of one (1) of its vessels was out of order. After seven (7) days B found out that the foodstuffs stored in said storage plant were contaminated by rats and not fit for consumption. They were, therefore, thrown out to the sea, B sued A for recovery of the loss of the foodstuffs disposed of. Is A liable? Reasons? Answer Yes, A is liable for the loss of the foodstuffs disposed of. According to the Civil Code, the provisions of the Civil Code on warranty, contained in the law on sales, shall be applicable to lease, Now, according to the law on sales with respect to warranty against hidden defects, the vendor (lessor) is responsible to the vendee (lessee) for any hidden faults or defects in the thing sold (leased), even though he was not aware thereof. Under this provision, it is clear that A is liable to B for the loss of the foodstuffs. (NOTE: The above answer is based on the decision of the Supreme Court in United States Lines, Inc. vs. San Miguel Brewery, 10 SCRA 808, applying Arts. 1653, 1566 and 1567 of the Civil Code.) Alternative Answer Yes, A is liable. According to the Civil Code, the lessor Is obliged to deliver the thing leased in such a condition as to render it fit for the use intended and to make on the same during the lease all the necessary repairs in order to keep it suitable to the use to which it is devoted. In the instant case, it is clear that A has not complied with both obligations. Therefore, the lessee B may now ask for rescission of the contract and indemnification for damages, or only the latter, allowing the contrast to remain in force. (NOTE: The above answer is based on Arts. 1664 and 1659 of the Civil Code.) 1978 No. VIII-a Is an agreement limiting the common carrier's liability for delay in case of a strike valid? la a stipulation limiting the common carrier's liability to the value of the goods declared by the shipper in the bill of lading- valid? Give reasons for your answer. Answer (to first question) Page 330 of 391 Yes, an agreement limiting a common carrier's liability for delay in case of a strike is valid. This is expressly recognized in the Civil Code under the law on common carriers. Besides, and this is the reason behind the law, not only natural disasters or acts of God but even acts of men or force majeure which are unforeseeable or unavoidable, such as strikes and riots, are classified as fortuitous events. Under the doctrine of fortuitous events, such an agreement would be perfectly valid. (NOTE: The above answer is based on Arts. 1748 and 1174 of the Civil Code. It is suggested that an answer based on either Art, 1748 or on the doctrine of fortuitous events above should be considered as a correct answer,) Answer (to second question) I distinguish. If the stipulation limits the carrier's liability to an agreed valuation such as the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value, it is valid. As a matter of fact, this is stated in the law on common carriers. If the stipulation limits the carrier's liability to an agreed valuation without any qualification whatsoever such as the value of the goods appearing in the bill of lading, as a rule, it is contrary to public policy, and therefore, void. However, if it can be shown to be reasonable and just under the circumstances, and had been fairly and freely agreed upon, then it is perfectly valid. (NOTE: The above answer is based on Arts. 1749 and 1750 of the Civil Code and on decided cases. It is suggested that an answer based on Art. 1749 alone should be considered a perfect answer.) 09; Lease; option to buy 2001 No XIV On January 1, 1980, Nestor leased the fishpond of Mario for a period of three years at a monthly rental of P1,000.00, with an option to purchase the same during the period of the lease for the price of P500,000.00. After the expiration of the threeyear period, Mario allowed Nestor to remain in the leased premises at the same rental rate. On June 15, 1983, Nestor tendered the amount of P500,000 to Mario and demanded that the latter execute a deed of absolute sale of the fishpond in his favor. Mario refused, on the ground that Nestor no longer had an option to buy the fishpond. Nestor filed an action for specific performance. Will the action prosper or not? Why? (5%) SUGGESTED ANSWER: No, the action will not prosper. The implied renewal of the lease on a monthto-month basis did not have the effect of extending the life of the option to purchase which expired at the end of the original lease period. The lessor is correct in refusing to sell on the ground that the option had expired. 09; Lease; reduction of rent 1985 No. 15 B) A leased to B a fishpond for 5 years. During the second year of the lease, he received only 1/2 of the usual harvest from the fishpond as he could visit and supervise it only occasionally due to the presence of armed men who were extorting money from him and other fishpond operators by threats to their lives. May B demand the reduction of the rent for the second year and the extension of the lease for one year on the ground that the lessor failed to comply with his obligation to maintain the lessee in the peaceful and adequate enjoyment of the lease? Page 331 of 391 Answers: B) 1. The reduction of rental only applies to extraordinary fortuitous events. This is trespass in fact, not trespass in law. With regard to the extension of lease, in the case of Victorias Milling Co., fortuitous event does not extend the lease anymore. 2. The law authorizes a reduction of the rent whenever, among other cases, there is a loss of fruits due to extraordinary and unforeseen fortuitous event, such as fire, war, pestilence, unusual floods or other calamity (Art 1680). The presence of armed men who extort money and threaten fishpond operators, in my view, is not included in the intendment of the law. Neither will be the extension of the lease for one year be demanded (see Gandoy vs. Tapucar, 76 Phil. 31). 3. B cannot demand a reduction of the rent and ex-tension of the lease. The warranty of the lessor refers to his own acts and not to the acts of third persons who are beyond his control. The maintenance of the lessee in the peaceful and adequate enjoyment of the lease refers to the enjoyment of his rights over the property as lessee, and not to personal physical disturbance or bodily threat. 09; Lease; rights and obligations of leasee and lessor 1990 No 1; A vacant lot several blocks from the center of the town was leased by its owner to a young businessman B. for a term of fifteen (15) years renewal upon agreement of the parties. After taking possession of the lot, the lessee built thereon a building of mixed materials and a store. As the years passed, he expanded his business, earning more profits. By the tenth (10th) year of his possession, he was able to build a three (3)-story building worth at least P300,000.00. Before the end of the term of the lease, B negotiated with the landowner for its renewal, but despite their attempts to do so, they could not agree on the new conditions for the renewal. Upon the expiration of the term of the lease, the landowner asked B to vacate the premises and remove his building and other improvements. B refused unless he was reimbursed for necessary and useful expenses. B claimed that he was a possessor and builder in good faith, with right of retention. This issue is now before the court for resolution in a pending litigation. a) What are the rights of B? b) What are the rights of the landowner? Answer; a) B has the right to remove the building and other improvements unless the landowner decides to retain the building at the time of the termination of the lease and pay the lessee one-half of the value of the improvements at that time. The lessee may remove the building even though the principal thing may suffer damage but B should not cause any more impairment upon the property leased than is necessary. The claim of B that he was a possessor and builder in good faith with the right of retention is not tenable. B is not a builder in good faith t because as lessee he does not claim ownership over the property leased, b) The landowner/lessor may refuse to reimburse 1/2 of the value of the improvements and require the lessee to remove the improvements. [Article 1678, Civil Code), 09; Lease; sublease 1999 No XIV. (a) May a lessee sublease the property leased without the consent of the lessor, and what are the respective liabilities of the lessee and sub-lessee to the lessor in case of such sublease? (3%) Page 332 of 391 ANSWER: (a) Yes, provided that there is no express prohibition against subleasing. Under the law, when in the contract of lease of things there is no express prohibition, the lessee may sublet the thing leased without prejudice to his responsibility for the performance of the contract toward the lessor. [Art, 1650) In case there is a sublease of the premises being leased, the sublessee is bound to the lessor for all the acts which refer to the use and preservation of the thing leased in the manner stipulated between the lessor and the lessee. (Art. 1651} The sublessee is subsidiarily liable to the lessor for any rent due from the lessee. However, the sublessee shall not be responsible beyond the amount of the rent due from him. (Art. 1652) As to the lessee, the latter shall still be responsible to the lessor for the rents; bring to the knowledge of the lessor every usurpation or untoward act which any third person may have committed or may be openly preparing to carry out upon the thing leased; advise the owner the need for all repairs; to return the thing leased upon the termination of the lease just as he received it, save what has been lost or impaired by the lapse of time or by ordinary wear and tear or from an inevitable cause; responsible for the deterioration or loss of the thing leased, unless he proves that it took place without his fault. 09; Lease; sublease 1990 No 6: A leased a parcel of land to B for a period of two years. The lease contract did not contain any express prohibition against the assignment of the leasehold or the subleasing of the leased premises. During the third year of the lease, B subleased the land to C. In turn, C, without A's consent, assigned the sublease to D. A then filed an action for the rescission of the contract of lease on the ground that B has violated the terms and conditions of the lease agreement. If you were the judge. how would you decide the case, particularly with respect to the validity of: (a) B's sublease to C? and (b) C's assignment of the sublease to D? Explain your answers. Answer: (a) B's sublease to C is valid. Although the original period of two years for the lease contract has expired, the lease continued with the acquiescence of the lessor during the third year. Hence, there has been an implied renewal of the contract of lease. Under Art. 1650 of the Civil Code, the lessee may sublet the thing leased, in whole or in part, when the contract of lease does not contain any express prohibition. [Articles 1650, 1670 Civil Code). A's action for rescission should not prosper on this ground. (b) C's assignment of the sublease to D is not valid. Under Art. 1649, of the Civil Code, the lessee cannot assign the lease without the consent of the lessor, unless there is a stipulation to the contrary. There is no such stipulation in the contract. If the law prohibits assignment of the lease without the consent of the lessor, all the more would the assignment of a sublease be prohibited without such consent. This is a violation of the contract and is a valid ground for rescission by A, 09; Lease; sublease; delay in payment of rentals 1994 No, 8: In January 1993, Four-Gives Corporation leased the entire twelve floors of the GQS Towers Complex, for a period of ten years at a monthly rental of Page 333 of 391 P3,000,000.00. There is a provision in the contract that the monthly rentals should be paid within the first five days of the month. For the month of March, May, June, October and December 1993, the rentals were not paid on time with some rentals being delayed up to ten days. The delay was due to the heavy paper work Involved in processing the checks. Four-Gives Corporation also subleased five of the twelve floors to whollyowned subsidiaries. The lease contract expressly prohibits the assignment of the lease contract or any portion thereof. The rental value of the building has Increased by 50% since its lease to Four-Gives Corporation. 1) Can the building owner eject Four-Gives Corporation on grounds of the repeated delays in the payment of the rent? 2} Can the building owner ask for the cancellation of the contract for violation of the provision against assignment? Alternative Answers: 1) a) The "repeated delays" in the payment of rentals would, at best, be a slight or casual breach which does not furnish a ground for ejectment especially because the delays were only due to heavy paper work. Note that there was not even a demand for payment obviously because the delay lasted for only a few days (10 days being the longest), at the end of which time payments were presumably made and were accepted. There was, therefore, no default. Note also that there was no demand made upon the lessee to vacate the premises for non-payment of the monthly rent. There is, therefore, no cause of action for ejectment arising from the "repeated delays". b) The building owner cannot eject Four-Gives Corporation on the ground of repeated delays in the payment of rentals. The delay in the payment off the rentals is minimal and cannot be made the basis of an ejectment suit. The delay was due to the heavy paperwork involved In processing the checks. It would be otherwise if the lease contract stated that in the payment of rentals within the first five days of the month, time is of the essence or that the lessee will be in delay if he falls to pay within the agreed period without need of demand. In this case he can judicially eject the tenant on the ground of lack of payment of the price stipulated after a demand to vacate, (Article 1673(2), New Civil Code), c) No. Resolution of a contract will not be permitted for a slight or casual breach, but only for such substantial and fundamental breach as would defeat the very object of the parties in making the agreement. (Zepeda v. CA, 216 SCRA 293], The delay of ten (10)) days is not such a substantial and fundamental breach to warrant the resolution of the contract of lease specially so when the delay was due to the heavy paperwork in processing the checks. 2) a) No. Sublease is different from assignment of lease. Sublease, not being prohibited by the contract of lease is therefore allowed and cannot be invoked as a ground to cancel the lease, b) No, the lessor cannot have the lease cancelled for alleged violation of the provision against assignment. The lessee did not assign the lease, or any portion thereof, to the subsidiaries. It merely subleased some floors to its subsidiaries. Since the problem does not state that the contract of lease contains a prohibition against sublease, the sublease is lawful, the rule being that in the absence of an express prohibition a lessee may sublet the thing leased, in whole or in part, without prejudice to his/its responsibility to the lessor for the performance of the contract. Page 334 of 391 10; Common carriers 1988 No 1; (b) Mojar, a passenger in a bus operated by Times Transit Co., suffered serious physical injuries as a result of a vehicular accident. An information was filed against Ailes, driver of the bus, for serious physical injuries through reckless imprudence, Ailes was, however, acquitted on the merits of the case because, according to the judgment of acquittal, he was not negligent. Subsequently, Moja's instituted an action against Times Transit Co,, to recover damages. Will the action prosper? Give your reasons. Answer: (b) If Mojar can prove the negligence of Ailes by preponderance of evidence, the action will prosper. He can still recover damages from the operator of the bus even if the driver had been acquitted in the criminal action, because it is clear that the action to recover is based on culpa contractual and not on the act or omission complained of as a felony (Bernaldez vs. Bohol Trans. Co. 7 SGRA 276). According to article 31 of the Civil Code, 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. 10; Common carriers; death of passengers 1975 No. XVI A taxicab passenger was deliberately killed by the driver. Is the operator of the taxicab civilly liable? Explain. Answer: Yes, the taxicab operator is civilly liable on the basis of breach of the contract of carriage. Article 1769 of the Civil Code states that common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the former's employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers. This liability does not cease upon proof that the common carrier exercised all the diligence of a good father of a family in the selection and supervision of their employees. In other words, the liability of the employer is not based on delict or quasidelict. The liability of the common carrier is primary and cannot be eliminated or limited by stipulation (Art. 1760). [Maranan v. Perez, 20 SCRA 412] 10; Common carriers; defenses and liability of employers 1986 No. 15: Sumakay, a passenger on a bus owned and operated by Kanlungan Bus Company suffered serious injuries when the vehicle went out of control and rammed an electric post. Tsuper, the bus driver, was, at the time of the accident, doing 100 kilometers per hour in a school zone and hit the post because he was trying to avoid hitting school children crossing the street. In a suit for damages against the bus company for the driver's gross negligence, Kanlungan interposed the defenses that all its drivers were under strict injunction to observe speed limits in their particular routes and that in any event, the driver should first have been sued, held liable, and found insolvent before Kanlungan could be proceeded against. Are the bus company's defenses tenable? Explain. Answer: Page 335 of 391 I beg to qualify my answer. As far as the first defense (that the drivers of the bus company were under strict injunction to observe speed limits "in their particular routes) is concerned, it is submitted that said defense is untenable. This is clearly stated by the Civil Code itself. In this jurisdiction, we have never adhered to the principle of respondent superior. We adhere instead to the principle that there is always an implied duty on the part of a common carrier to carry a passenger safely to his place of destination. Anent the second defense, if the civil action for damages is impliedly instituted in the criminal action itself, then, the defense is tenable. Under the principle of subsidiary liability of employers, it is essential that there must be a finding that the driver is insolvent before the bus company can be proceeded against. However, if the civil action for damages is separated from the criminal action, then, the defense is untenable. Under the Civil Code, the liability of the bus company is always directed and primary. (Note: The above answer is based upon Art. 1759 of the Civil Code, upon Arts. 100 to 103 of the Revised Penal Code, and upon Maranan vs. Perez, 20 SCRA 412.) Answer - The bus company, if sued based on culpa contractual, cannot raise the defense of diligence in the supervision of its employees. The mere fact that there was a breach of the contract of carriage makes the company liable for damages. If the bus company was sued based on culpa aquiliana, it cannot raise the defense that the driver should have been first sued, held liable, and found insolvent before it could be proceeded against because the company is a joint tort-feasor. The company, therefore, has a primary liability, because of culpa aquiliana and not a subsidiary one. Subsidiary liability on the part of the bus company only results if there is an action based on culpa criminal against the driver. If the latter is held liable but is insolvent, then the bus company may raise the defense that is only subsidiarily liable for the damages. Answer - Liability of the Bus Company is contractual. Due supervision of driver by the Bus Company, as well as violations of instructions, is not a defense. (Art. 1759 Civil Code of the Philippines) Liability of the Bus Company is direct and primary — hence the Bus driver need not be impleaded first. Answer — The cause of action of the passenger against the bus company is based on the contract of transportation. Here such defenses are not available to the bus company as it is bound to exercise extraordinary diligence in the transport of its passengers. The driver is not a party to the contract of transportation and need not be joined in the same action. The driver may be criminally charged. 10; Common carriers; extraordinary diligence 2000 No XX. b) Despite a warning from the police that an attempt to hijack a PAL plane will be made in the following week, the airline did not take extra precautions, such as frisking of passengers, for fear of being accused of violating human rights. Two days later, an armed hijacker did attempt to hijack a PAL flight to Cebu. Although he was subdued by the other passengers, he managed to fire a shot which hit and killed a female passenger. The victim's parents sued the airline for breach of contract, and the airline raised the defense of force majeure. Is the airline liable or not? (2%) SUGGESTED ANSWER: The airline is liable. In case of death of a passenger, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that Page 336 of 391 they observed extraordinary diligence (Article 1756, Civil Code). The failure of the airline to take extra precautions despite a police warning that an attempt to hijack the plane would be made, was negligence on the part of the airline. Being negligent, it is liable for the death of the passenger. The defense of force majeure is not tenable since the shooting incident would not have happened had the airline taken steps that could have prevented the hijacker from boarding the plane. ALTERNATIVE ANSWER: Under Article 1763 of the Civil Code, the common carrier is not required to observe extraordinary diligence in preventing injury to its passengers on account of the willful acts or negligence of other passengers or of strangers. The common carrier, in that case, is required to exercise only the diligence of a good father of a family; hence, the failure of the airline to take EXTRA precautions in frisking the passengers and by leaving that matter to the security personnel of the airport, does not constitute a breach of that duty so as to make the airline liable. Besides, the use of Irresistible force by the hijackers was farce majeure that could not have been prevented even by the observance of extraordinary diligence. 10; Common carriers; liability of carriers for loss, damage, destruction of goods 1983 No. 15 On October 15, 1983, goods were loaded on a vessel owned by a common carrier for transportation from Manila to Cebu under a bill of lading which provided that the carrier would not be responsible for loss arising from theft or robbery. The goods were stolen while the vessel was docked in Manila. Sued for damages, the common carrier invoked the cited stipulation to avoid liability for the loss of the cargo. Additionally, the carrier, which is a corporation, argued that it could not be held liable because it had done all it could to prevent the loss by exercising the utmost diligence in the selection and supervision of its employees. How valid are these defenses? Answer The defenses are not valid. Common carriers cannot escape liability by stipulation in the bill of lading relieving them for responsibility for the acts of thieves or robbers who do not act with grave or irresistible threat or force. Common carriers are similarly forbidden from exempting themselves from liability for the acts or omissions of its employees by stipulations to that effect in the bill of lading 10; Common carriers; limitation of liability for loss 1977 No. VIII-b The bill of lading specified in fine print that the carrier's liability was limited to P100 00 per box unless a higher value was declared and extra freight paid. No higher value was declared and no extra freight was paid and the shipment was lost. Can shipper S collect the true value of the lost "shipment (P2,000) on the ground that the loss was caused by the lack of care of carrier C? Answer I distinguish. If the shipper S read the stipulation specified in fine print in the bill of lading or was aware thereof, then he cannot collect the true value of the lost shipment. Such a stipulation is considered by law valid and binding (Arts. 1749, Page 337 of 391 1750, Civil Code). If he was not aware thereof, then he can collect the true value of the lost shipment. There can be no presumption that S read the stipulation. It was written in fine print. Page 338 of 391 11; Agency 2003 No V Jo-Ann asked her close friend, Aissa, to buy some groceries for her in the supermarket. Was there a nominate contract entered into between Jo-Ann and Aissa? In the affirmative, what was it? Explain. 5% Suggested Answer: Yes, there was a nominate contract. On the assumption that Aissa accepted the request of her close friend Jo-Ann to but some groceries for her in the supermarket, what they entered into was a nominate contract of Agency. Article 1868 of the New Civil Code provides that by the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. Alternative Answer: Yes, they entered into a nominate contract of lease to service in the absence of a relation of principal and agent between them (Article 1644, New Civil Code). 11; Agency 2004 No. IV B. CX executed a special power of attorney authorizing DY to secure a loan from any bank and to mortgage his property covered by the owner’s certificate of title. In securing a loan from MBank, DY did not specify that he was acting for CX in the transaction with said bank. Is CX liable for the bank loan? Why or why not? Justify your answer. (5%) 11; Agency; agency vs sale 2000 No XVIII A foreign manufacturer of computers and a Philippine distributor entered into a contract whereby the distributor agreed to order 1,000 units of the manufacturer's computers every month and to resell them In the Philippines at the manufacturer's suggested prices plus 10%. All unsold units at the end of the year shall be bought back by the manufacturer at the same price they were ordered. The manufacturer shall hold the distributor free and harmless from any claim for defects in the units. Is the agreement one for sale or agency? (5%) SUGGESTED ANSWER: The contract is one of agency, not sale. The notion of sale is negated by the following indicia: (1) the price is fixed by the manufacturer with the 10% mark-up constituting the commission; (2) the manufacturer reacquires the unsold units at exactly the same price; and (3) warranty for the units was borne by the manufacturer. The foregoing indicia negate sale because they indicate that ownership over the units was never intended to transfer to the distributor. 11; Agency; appointment of sub-agent 1999 No XV. (a) X appoints Y as his agent to sell his products in Cebu City. Can Y appoint a sub-agent and if he does, what are the effects of such appointment? (5%) ANSWER: a. Yes, the agent may appoint a substitute or sub-agent if the principal has not prohibited him from doing so, but he shall be responsible for the acts of the substitute: Page 339 of 391 (1) when he was not given the power to appoint one; (2) when he was given such power, but without designating the person, and the person appointed was notoriously incompetent or insolvent. 11; Agency; authority to sell does not include authority to collect 2004 No. VI B. As an agent, AL was given a guarantee commission, in addition to his regular commission, after he sold 20 units of refrigerators to a customer, HT Hotel. The customer, however, failed to pay for the units sold. AL’s principal, DRBI, demanded from AL payment for the customer’s accountability. AL objected, on the ground that his job was only to sell and not to collect payment for units bought by the customer. Is AL’s objection valid? Can DRBI collect from him or not? Reason. (5%) 11; Agency; commission 1978 No. VII-b A authorized B to sell her property for P20,000 subject to the condition that the purchaser would assume the mortgage existing in favor of Plaridel Bank and agreed to pay B a commission of six per cent (6%) on the purchase price plus whatever over price he may obtain for the property. B found a buyer C who was willing to buy the property under the terms stipulated by A. When B introduce C to A, A told B that she was no longer interested in selling the property and a document was signed canceling the written authority to sell with the agreement of B. One (1) month later, A sold the same property directly to C for P22,000, A refused to pay B his commission, contending that when the property was sold to C the authority to sell of B was already cancelled. B sued to collect his commission. Is B entitled to his agent's commission? Give reasons for your answer. Answer B is entitled to his agent's commission. C, the buyer of B, was willing to buy the property under the terms stipulated by A. Despite this, A told B that she was no longer interested in selling the property. As a result, B's authority was cancelled. And yet, all of a sudden, one month later, A sold the property directly to C for P22,000. It is clear that there was bad faith on the part of A. This act of bad faith cannot serve as a basis for him to evade payment of the commission of B. (NOTE: The above answer is based on Infante vs. Cunanan, 49 Off. Gaz. 3320.) 11; Agency; coupled with an interest 2001 No XV Richard sold a large parcel of land in Cebu to Leo for P100 million payable in annual installments over a period of ten years, but title will remain with Richard until the purchase price is fully paid. To enable Leo to pay the price, Richard gave him a power-of-attorney authorizing him to subdivide the land, sell the Individual lots, and deliver the proceeds to Richard, to be applied to the purchase price. Five years later, Richard revoked the power of attorney and took over the sale of the subdivision lots himself. Is the revocation valid or not? Why? (5%) SUGGESTED ANSWER The revocation is not valid. The power of attorney given to the buyer is irrevocable because it is coupled with an interest: the agency is the means of fulfilling the obligation of the buyer to pay the price of the land (Article 1927, CC). In Page 340 of 391 other words, a bilateral contract (contract to buy and sell the land) is dependent on the agency. 11; Agency; coupled with an interest 1980 No. VIII (a) "AA" had an option to purchase a vessel. He entered into a contract with "BB" wherein he assigned his option to "BB" under the condition that "BB" would appoint him as agent of the vessel for five years. "BB" purchased the vessel and appointed "AA" as agent in accordance with the contract. After three years of operation "BB" revoked the appointment of "AA" as agent for loss of confidence. "AA" sued "BB" for damages. Would you hold "BB" liable for damages? Answer (a) "BB" should be held for damages. True, according to the Civil Code, the principal may revoke the agency at will. But there are exceptions. These exceptions are sometimes denominated as agency coupled with an interest. One of them is when the agency is the means of fulfilling an obligation already contracted. It is obvious that the agency is the means of fulfilling an obligation already contracted in favor of "AA". "BB" has clearly breached his contract or undertaking by revoking the agency before the expiration of the term or period of five years. (NOTE: The above answer is based upon Arts. 1927, 1930, Civil Code.) 11; Agency; coupled with an interest 1979 No. XVI DT borrowed P50,000.00 from a bank and to secure the payment thereof, signed a Deed of Real Estate Mortgage in favor of the bank in the usual printed form wherein it is provided among others that "for the purpose of extra-judicial foreclosure, the mortgagor hereby appoints the mortgagee his attorney-in-fact to sell the property mortgaged under Act 3135, as amended, to sign all documents and perform any act requisite and necessary to accomplish said purpose." Upon failure of DT to pay the loan, the bank foreclosed and bought the property at the foreclosure sale. During the one year period of redemption DT died and the property was not redeemed despite the lapse of one year. The bank, despite its actual knowledge, of DT's death, consolidated its title by executing the affidavit of consolidation and Deed of Sale of the land in its favor as empowered in the Deed of Real Estate Mortgage. After the bank had consolidated its title the heirs of DT asked the bank to allow them to redeem the property by paying only the P50,000.00 plus accrued interest and expense of foreclosure, contending that the sale in favor of the bank was invalid due to the prior death of DT which therefore revoked the power of attorney inserted in the Deed of Mortgage but the bank demanded payment of P200,000.00, the then fair market value of the property. Can the bank be compelled to accept the tender of redemption by the heirs of DT? Why? Answer The bank cannot be compelled to accept the tender of redemption by the heirs of DT. True, agency is extinguished by the death of the principal, but there are two well-known exceptions. The first exception is where the agency is coupled with an interest and the second is where the agent, unaware of the death of his principal, enters into a contract in behalf of his principal with a third person who is also unaware of the death of the principal (Arts. 1930, 1931, Civil Code) The instant case falls squarely within the purview of agency coupled with an interest. According to the Civil Code, the agency shall remain in full force and effect even after the death of the Page 341 of 391 principal, if it has been constituted in the common interest of the latter and of the agent, or in the interest of a third person who has accepted the stipulation in his favor. Hence, despite the death of DT, the power granted by him to the bank to sell the property mortgaged and to sign all documents and perform any act requisite and necessary to accomplish the extra-judicial foreclosure in case he is unable to pay the loan is still of full force and effect. The foreclosure, therefore, and the consolidation by the bank of its title over the mortgaged property are perfectly valid. 11; Agency; general vs special agency 1992 No 8: A as principal appointed B is his agent granting him general and unlimited management over A's properties, stating that A withholds no power from B and that the agent may execute such acts as he may consider appropriate. Accordingly, B leased A's parcel of land in Manila to C for four (4) years at P60,000.00 per year, payable annually in advance. B leased another parcel of land of A in Caloocan City to D without a fixed term at P3,000.00 per month payable monthly. B sold to E a third parcel of land belonging to A located in Quezon City for three (3) times the price that was listed in the inventory by A to B. All those contracts were executed by B while A was confined due to illness in the Makati Medical Center. Rule on the validity and binding effect of each of the above contracts upon A the principal. Explain your answers, Answer: The agency couched in general terms comprised only acts of administration (Art. 1877, Civil Code). The lease contract on the Manila parcel is not valid, not enforceable and not binding upon A. For B to lease the property to C, for more than one (1) year, A must provide B with a special power of attorney (Art. 1878. Civil Code). The lease of the Caloocan City property to D is valid and binding upon A. Since the lease is without a fixed term, it is understood to be from month to month, since the rental is payable monthly (Art. 1687, Civil Code). The sale of the Quezon City parcel to E is not valid and not binding upon A. B needed a special power of attorney to validly sell the land (Arts. 1877 and 1878, Civil Code). The sale of the land at a very good price does not cure the defect of the contract arising from lack of authority 11; Agency; liability of an agent 1975 No. XIV A borrowed from B the sum of P3,000.00. Three days after A in a letter authorized the Philippine National Bank to pay his debt to B out of whatever crop loan might be granted to him by said Bank. On the same day, the Bank agreed but the Bank paid B only P2,000.00. On the date of the maturity, B sued the Bank and A for the remaining P 1,000.00. Is the Bank liable to B? Explain. Answer No, the Bank is not liable to B. The letter of A to PNB is merely an authority given to PNB to pay B. PNB, therefore, is merely an agent of A, and an agent cannot be personally liable as long as be acts within the scope of his authority. Page 342 of 391 Moreover, the Bank did not assume the obligation to pay A's indebtedness to B, either as co-principal, surety or guarantor. (Hodges v. Rey, 111 Phil. 219) 11; Agency; liability of an agent to render an account 1981 No. 15 "A", an official of a mining company, was appointed by the company as its buying agent for the acquisition of mining rights in a designated area for operation by the company. "A" proceeded to enter into contracts with the claim owners. Claim owner "B", an illiterate, was helped by "A" in locating and perfecting his rights and for which "A", by contract, obtained a participation in the royalty paid by the company to the claim owner. a) The mining company goes to you for advice as to whether it is entitled to the royalty obtained by "A" from "B". What would your advice be and why? b) May "B", the claim owner, question the royalty obtained by "A"? On what grounds? Explain, Answer (a) I would advice the mining company to withhold the payment of the part of the royalty corresponding to "A". This is so because of the explicit mandate of the Civil Code. According to the law: Every agent is bound to render an account of his transactions and to deliver to the principal whatever he may have received by virtue of the agency, even though it may not be owing to the principal. It is crystal dear that the act of "A", agent of the mining company, falls squarely within the purview or coverage of this rule. (Note: The above answer is based on Art. 1891 of the Civil Code.) (b) "B", the claim owner, may question the royalty obtained by "A" on the ground that it is "not owing to the principal." It must be observed that the obligation of the agent to deliver to his principal anything which he has received by virtue of the agency is followed by the phrase "even though it may not be owing to the principal" This means that the action for recovery by "B" on the ground of undue payment would be directed against the mining company and not against the agent. (Note: The above answer is based on Art. 1891 of the Civil Code and on Manresa's opinion — Vol. 11, p. 512,} 11; Agency; powers of the agent 1994 No. 18: Prime Realty Corporation appointed Nestor the exclusive agent in the sale of lots of its newly developed subdivision. Prime Realty told Nestor that he could not collect or receive payments from the buyers. Nestor was able to sell ten lots to Jesus and to collect the down payments for said lots. He did not turn over the collections to Prime Realty. Who shall bear the loss for Nestor's defalcation. Prime Realty or Jesus? Alternative Answer: a) The general rule is that a person dealing with an agent must inquire into the authority of that agent. In the present case, if Jesus did not inquire into that authority, he is liable for the loss due to Nestor's defalcation unless Article 1900, Civil Code governs, in which case the developer corporation bears the loss. Art. 1900 Civil Code provides: "So far as third persons are concerned, an act is deemed to have been performed within the scope of the agent's authority, if such act is within the terms of the power of attorney, as written, even if the agent has in Page 343 of 391 fact exceeded the limits of his authority according to an understanding between the principal and the agent. However, if Jesus made due inquiry and he was not informed by the principal Prime Realty of the limits of Nestor's authority. Prime Realty shall bear the loss. b) Considering that Prime Realty Corporation only "told" Nestor that he could not receive or collect payments, it appears that the limitation does not appear in his written authority or power of attorney. In this case, insofar as Jesus, who is a third person. Is concerned, Nestor's acts of collecting payments is deemed to have been performed within the scope of his authority {Article 1900. Civil Code). Hence, the principal is liable. However, if Jesus was aware of the limitation of Nestor's power as an agent, and Prime Realty Corporation does not ratify the sale contract, then Jesus shall be liable (Article 1898. Civil Code). 11; Agency; termination; death or principal: double sales 1988 No. 13: (b) In 1950, A executed a power of attorney authorizing B to sell a parcel of land c

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