Aleatory Contracts; Gambling (2004)
A. Mr. ZY lost P100,000 in a card game called Russian poker, but he had no more cash
to pay in full the winner at the time the session ended. He promised to pay PX, the
winner, two weeks thereafter. But he failed to do so despite the lapse of two months, so
PX filed in court a suit to collect the amount of P50,000 that he won but remained
unpaid.
Will
the
collection
suit
against
ZY
prosper?
Could
Mrs. ZY file in turn a suit against PX to recover the P100,000 that her husband
lost? Reason.
SUGGESTED ANSWER:
A. 1) The suit by PX to collect the balance of what he won from ZY will not prosper. Under
Article 2014 of the Civil Code, no action can be maintained by the winner for the
collection of what he has won in a game of chance. Although poker may depend in
part on ability, it is fundamentally a game of chance.
2) If the money paid by ZY to PX was conjugal or community property, the wife of ZY
could sue to recover it because Article 117(7) of the Family Code provides that losses in
gambling or betting are borne exclusively by the loser-spouse. Hence, conjugal or
community funds may not be used to pay for such losses. If the money were
exclusive property of ZY, his wife may also sue to recover it under Article 2016 of the Civil
Code if she and the family needed the money for support.
ALTERNATIVE ANSWER (2):
A. (2). Mrs. ZY cannot file a suit to recover what her husband lost. Art 2014 of the Civil
Code provides that any loser in a game of chance may recover his loss from the winner,
with legal interest from the time he paid the amount lost. This means that only he can file
the suit. Mrs. ZY cannot recover as a spouse who has interest in the absolute community
property or conjugal partnership of gains, because under Art. 117(7} of the Family Code,
losses are borne exclusively by the loser-spouse. Therefore, these cannot be charged
against absolute community property or conjugal partnership of gains. This being so, Mrs.
ZY has no interest in law to prosecute and recover as she has no legal standing in court to
do so.
Conditional Obligations (2000)
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?
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).
Conditional Obligations (2003)
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.
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).
SUGGESTED ANSWER:
(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).
SUGGESTED ANSWER:
(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.
SUGGESTED ANSWER:
(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).
Conditional Obligations; Promise (1997)
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 P500.00 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?
SUGGESTED 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
quasidelicts (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 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.
Conditional Obligations; Resolutory Condition (1999)
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?
(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?
SUGGESTED 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.
FIRST 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 th
e 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.
SUGGESTED ANSWER:
(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.
Extinguishment; Assignment of Rights (2001)
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.
(Note: The question presupposes knowledge and requires the application of the
provisions of the Omnibus Investment Code, which properly belongs to Commercial
law.)
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.
Extinguishment; Cause of Action (2004)
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.
SUGGESTED ANSWER:
BD’s contention is not correct. TX can still maintain the suit for ejectment. The acceptance
by the lessor of the payment by the lessee of the rentals in arrears even during the
pendency of the ejectment case does not constitute a waiver or abandonment of the
ejectment case. (Spouses Clutario v. CA, 216 SCRA 341 [1992]).
Extinguishment; Compensation (2002)
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
P10 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 refusal in favo
r 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.
SUGGESTED ANSWERS:
Stockton is correct. There is no right of compensation between his price of P10 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 10million
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
counteroffer 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.
Extinguishment; Compensation vs. Payment (1998)
Define compensation as a mode of extinguishing an obligation, and distinguish it from
payment.
SUGGESTED ANSWER:
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 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)
Extinguishment; Compensation/Set-Off; Banks (1998)
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.oo 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?
SUGGESTED ANSWER:
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.
Extinguishment; Condonation (2000)
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?
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.
Extinguishment; Extraordinary Inflation or Deflation (2001)
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?
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.
Extinguishment; Loss (1994)
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?
SUGGESTED ANSWER:
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 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.
Extinguishment; Loss; Impossible Service (1993)
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?
SUGGESTED 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.”
Extinguishment; Novation (1994)
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?
SUGGESTED 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.
SUGGESTED ANSWER:
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.
Extinguishment; Payment (1995)
In 1983 PHILCREDIT extended loans to RivettStrom 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.
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.
SUGGESTED 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).
Liability; Lease; Joint Liability (2001)
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?
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.
Liability; Solidary Liability (1998)
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)
To what extent, if at all, can Jojo be compelled by Joey to
payment?
contribute
to
such
SUGGESTED ANSWER:
1. Joey can be compelled to pay only the remaining balance of P200.000, in view of the
remission of Jojo’s share by the creditor. (Art. 1219, Civil Code)
2.
Jojo
can
be
compelled
by
Joey
to
contribute
P50.000
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 P50.000.00.
Liability; Solidary Obligation (1992)
In June 1988, X obtained a loan from A and executed with Y as solidary co-maker a
promissory
note
in
favor
of
A
for
the sum of P200,000.00. 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 paym
ent 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 recovery
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.
SUGGESTED 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.
(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
Associates vs. Guinhawa, 188 SCRA 642)
Savings
and
Loan
Liability; Solidary Obligation; Mutual Guaranty (2003)
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.
d) E was given by X an extension of 6 months without the consent of the other four codebtors.
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 ANSWERS:
(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.
Loss of the thing due; Force Majeure (2000)
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?
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.
Non-Payment of Amortizations; Subdivision Buyer; When justified (2005)
Bernie bought on installment a residential subdivision lot from DEVLAND. After hav
ing faithfully paid the installments for 48 months, Bernie discovered that DEVLAND
had
failed
to
develop
the
subdivision
in
accordance with the approved plans and specifications within the time frame in the
plan. He thus wrote a letter to DEVLAND informing it that he was stopping payment.
Consequently, DEVLAND cancelled the sale and wrote Bernie, informing him that his
payments are forfeited in its favor.
a) Was the action of DEVLAND proper? Explain.
SUGGESTED ANSWER:
No, the action of DEVLAND is not proper. Under Section 23 of Presidential Decree No.
957, otherwise known as the Subdivision and Condominium Buyer’s Protection Decree,
non-payment of amortizations by the buyer is justified if non-payment is due to the failure
of the subdivision owner to develop the subdivision project according to the
approved plans and within the limit for complying. (Eugenio v. Drilon, G.R.
No. 109404, January 22,1996)
b) Discuss the rights of Bernie under the circumstances.
SUGGESTED ANSWER:
Under P.D. No. 957, a cancellation option is available to Bernie. If Bernie opts to cancel
the contract, DEVLAND must reimburse Bernie the total amount paid and the
amortizations interest, excluding delinquency interest, plus interest at legal
rate. (Eugenio v. Drilon,G.R.No.109404, January 22,1996)
c) Supposing DEVLAND had fully developed the subdivision but
pay
further installments after 4
years due to
.Discuss the rights and obligations of the parties.
Bernie failed to
business reverses
SUGGESTED ANSWER:
In this case, pursuant to Section 24 of P.D. No. 957, R.A. No. 6552 otherwise known as
the Realty Installment Buyer Protection Act, shall govern. Under Section 3 thereof,
Bernie is entitled: 1) to pay without additional interest the unpaid installments due within
a grace period of four (4) months or one month for every year of installment paid; 2) if
the contract is cancelled, Bernie is entitled to the refund of the cash surrender value equal
to 50% of the total payments made.
DEVLAND on the other hand has the right to cancel the contract after 30 days from
receipt by Bernie of notice of cancellation. DEVLAND is however obliged to refund to
Bernie
50%
of
the
total
made. (Rillo v. Courtof Appeals, G.R. No. 125347, June 19,1997)
Period; Suspensive Period (1991)
payments
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?
SUGGESTED 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.
2019 BAR EXAMINATIONS IN
CIVIL LAW
PART 1
A.1.
In January 2018, Mrs. A, a married woman on her sixth (6) month of pregnancy, was crossing
a street when she was suddenly hit by a car being recklessly driven by Mr. X. As a result, Mrs.
A sustained serious injuries and further, suffered an unintentional abortion. Mrs. A was
hospitalized for two (2) months, during which she incurred P400.000.00 in medical fees. Her
expenses were all duly substantiated by official receipts. During the two (2)-month period of
her confinement, she was unable to report for work and earn any salary, which was
established at the rate of P50,000.00 per month. Mrs. A then filed a civil case for damages
against Mr. X.
(a) Based on the case filed by Mrs. A. what is the source of Mr. X’s obligation to her as a
result of his acts? Explain. (2 %)
SUGGESTED ANSWER:
Mr. X’s obligation arose from a quasi-delict, one of the five sources of
obligations (Art. 1157, Civil Code). The Code also provides that whoever by act or
omission causes damage to another, there being fault or negligence, is obliged to pay
for the damage done and such fault or negligence, is called a quasi-delict (Article 2176
of the Civil Code). Here, Mr. X, in recklessly driving a car, hit Mrs. A, thereby causing
serious injuries and unintentional abortion to the latter.
(b) May Mrs. A claim actual damages from Mr. X? If so, how much can Mrs. A claim?
Explain. (2%)
SUGGESTED ANSWER:
Yes, Mrs. A can claim actual damages amounting to P500,000. Article 2199 of the Civil
Code provides that except as provided by law or by stipulation, one is entitled to
actual or compensatory damages only for such pecuniary loss suffered by him as he
has duly proved. The medical fees totaling P400,000 were duly substantiated by
official receipts, Article 2200 of the Civil Code also provides that indemnification for
damages shall comprehend not only the value of the loss suffered, but also that of the
profits which the obligee failed to obtain. The rate of her salary was established at
P50,000 per month; thus, her inability to report for work and earn salary for two
months entitled her to a total of P100,000. Mrs. A, therefore, can claim her expenses
for medical fees and two months’ worth of salary the total of which is P500.000.
(c) May Mrs. A claim damages on behalf of her unborn baby? Explain. (3%)
SUGGESTED ANSWERS:
No, Mrs. A cannot claim damages on behalf of her unborn baby. Birth determines
personality. The Court has held that an action for pecuniary damages on account of
personal injury or death pertains primarily to the one injured, and if no action for such
damages could be instituted on behalf of the unborn child on account of the injuries it
received, no such right of action could derivatively accrue to its parents or heirs (Geluz
v. Court of Appeals, G.R. No. L-16439, July 20, 1961).
ALTERNATIVE ANSWER:
Yes, Mrs. A can claim damages on behalf of her unborn baby. Under Art. Il Sec. 12 of
the 1987 Constitution, the State is obliged to protect equally the life of the mother
and the life of the unborn from conception. This provision should be applied in favor
of the unborn child, and therefore modifies the Geluz v. Court of Appeals ruling.
ANOTHER ALTERNATIVE ANSWER:
Yes, Mrs. A can claim damages on behalf of her unborn baby. The Court has held that
a conceived child, although yet unborn, is given by law a provisional personality of its
own for all purposes favorable to it, as explicitly provided in Art. 40 of the New Civil
Code, which includes being a recipient of donations under Art. 742 of the New Civil
Code, as well as support. A claim for damages in favor of the unborn child should also
prosper [Quimiguing v. leao, G.R. No. 26795. July 31, 1970].
(d) What must Mrs. A prove if she wants to recover moral damages from Mr. X? (2%)
SUGGESTED ANSWER:
Mrs. A must prove that she suffered physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, or
similar injury. She must also prove that Mr. X’s reckless driving produced the physical
injury in natural and continuous sequence, unbroken by any efficient intervening
cause, produces injury, without which she would not have suffered the same, that is
the reckless driving is the proximate cause of the injury, Moral damages may be
recovered in quasi-deliets causing physical injuries (Article 2219 of the Civil Code).
ALTERNATIVE ANSWER:
Mrs. A must prove the following: (1) that she suffered physical injuries; (2) that Mr.X
committed a culpable act or omission; (3) that the wrongful act or omission of Mr. X is
the proximate cause of the damages she sustained; and (4) that X’s act or omission is
either a criminal offense resulting to physical injuries or a quasi-delict causing physical
injuries (Mendoza v. Gomez, G.R. No. 160110. June 18, 2014).
(e) Assuming that Mrs. A is awarded actual and moral damages by the trial court, may she
also claim interest if the final and executory judgment award remains unpaid by Mr. X? If so,
when should the interest be reckoned and what is the rate of interest? Explain. (3%)
SUGGESTED ANSWER:
Yes, Mrs. A may also claim interest. The interest should be 6% per annum from the
finality of judgment until its satisfaction. The Court held in Nacur w. Gallery Frames
(G. R. No. 189871, August 13, 2013), interpreting BSP MB Circular No. 799, that when
the judgment of the court awarding a sum of money becomes final and executory, the
rate of legal shall be 6% per annum from such finality until its satisfaction, this interim
period being deemed to be the equivalent to a forbearance of credit.
A.2.
Hand W were married in 1990. 11, being a member of the Armed Forces of the Philippines
(AFP), was deployed to a rebel-infested area in 1992. Since then, W has not heard from her
husband, H.
One day, the AFP informed W that H had been declared missing since 1995. in
consequence. W diligently pursued all available means to ascertain her husband’s
whereabouts, but to no avail.
Firmly believing that H had already died, W filed a claim before the AFP in 2008 for the
death benefits of the missing serviceman. However, the AFP, despite being cognizant of II’s
status, would not act on the claim, contending that H could not be presumed dead unless a
judicial declaration to this effect is issued by the proper court.
In what instance/s is a judicial declaration of presumptive death necessary? In this case, is
the contention of the AFP correct? Explain. (3%)
SUGGESTED ANSWER:
Judicial declaration of presumptive death is necessary only for the purpose of
contracting a subsequent marriage. Article 41 of the Family Code provides that for the
purpose of contracting a subsequent marriage contracted by a person who had a well-
founded belief that his/her prior spouse who had been absent for four consecutive
years was already dead, the spouse present must institute a summary proceeding for
the declaration of presumptive death of the absentee.
The contention of the AFP is incorrect.
The Court has declared that the AFP can decide claims of death benefits of a missing
soldier without requiring the claimant to first produce a court declaration of the
presumptive death of such soldier and the claimant need only present any “evidence”
which shows that the concerned soldier had been missing for such number of years
and/or under the circumstances prescribed under Articles 390 and 391 of the Civil
Code. Article 391 of the Civil Code provides that a person in the armed forces who has
taken part in war and has been missing for four years shall be presumed dead for all
purposes. Here, W informed the AFP that her husband had been declared missing
since 1995, 23 years before the filing of her claim in 2018. There is, thus, no need for a
judicial declaration of presumptive death before the AFP can act on the claim of
W |Tadeo-Matias y: Republic, G.R. No. 230751, April 25, 2018).
A.3.
Mr. Reyes is legally married to Mrs. Reyes. During the subsistence of their marriage, Mr.
Reyes cohabited with another woman, Ms. Cruz. Out of Mr. Reyes and Ms. Cruz’s illicit
relationship, a child named C was born. In C’s birth certificate. “Cruz” appears as the child’s
surname, although Mr. Reyes expressly acknowledged Cas his child.
In 2018. Mr. Reyes and Ms. Cruz ended their relationship. Mr. Reyes thereafter lodged a
petition in court for parental custody and change or correction of C’s surname in the child’s
birth certificate from “Cruz” to “Reyes,” At that time, C was only ten (10) years old.
(a) Should Mr. Reyes be granted custody of C? Explain. (2.5%)
SUGGESTED ANSWER:
No, Mr. Reyes should not be granted custody because C is an illegitimate child, who
shall be under the parental authority of his mother (Article 176, Family Code).
The Family Code provides that children conceived and born outside a valid marriage
are illegitimate (Article 165). In this case, C was conceived and born out of the illicit
relationship of Mr. Reyes and Ms. Cruz who are not married; thus, C is an illegitimate
child of Mr. Reyes. The Court has held that the recognition of an illegitimate child by
the father could be a ground for ordering the latter to give support to, but not
eustody of the child. The Court has further declared that since the law explicitly
confers to the mother sole parental authority over an illegitimate child, it follows that
only if she defaults can the father assume custody and authority over the minor and
that only the most compelling of reasons, such as the mother’s unfitness to exercise
sole parental authority, shall justify her deprivation of parental authority and the
award of custody to someone else (Briones y Miguel, G.R. No. 156343, October 18,
2004). There is no showing that Ms. Cruz, C’s mother was unfit to exercise sole
parental authority over C; therefore, she cannot be deprived of C’s custody.
(b) Can Mr. Reyes validly compel the change or correction of C’s surname from “Cruz” to
“Reyes”? Explain. (2.5%)
SUGGESTED ANSWER:
No, Mr. Reyes cannot compel the change of surname from “Cruz” to “Reyes”. The
Court has held that Article 176 of the Family Code gives illegitimate children the right
to decide if they want to use the surname of their father or not. The Court further
declared that it is not the father or the mother who is granted by law the right to
dictate the surname of their illegitimate children; hence, Mr. Reyes cannot validly
compel the change or correction of C’s surname (Grande – Antonio, G.R. No. 206248,
February 18, 2014).
If they are still minors, however, the decision to use the father’s surname may be
exercised for them by their mother pursuant to the latter’s parental authority over
illegitimate children. In this case, the father cannot compel the mother to register the
child under his surname.
A.4.
F. a Filipina, married J. a Japanese, in the Philippines. After three (3) years, they had a falling
out and thus, separated. Soon after, F initiated a divorce petition in Japan which was not
opposed by because under Japanese law, a grant of divorce will capacitate him to remarry.
F’s divorce petition was then granted by the Japanese court with finality.
May the legal effects of the divorce decree be recognized in the Philippines, and
consequently, capacitate F to remarry here? Explain. (3%)
SUGGESTED ANSWER:
Yes, the legal effects of the divorce deeree may be recognized in the Philippines, and
consequently, capacitate F to remarry.
In the case of Republic v. Manalo [G.R. No. 221029, April 24, 2018], the Court held
that under Paragraph 2 of Article 26 of the Family Code, a Filipino citizen has the
capacity to remarry under Philippine law after initiating a divorce proceeding abroad
and obtaining a favorable judgment against his or her alien spouse who is capacitated
to remarry. Here, F initiated a divorce petition in Japan and obtained a favorable
judgment which capacitated her Japanese husband to remarry. Applying Paragraph 2
of Article 26 of the Family Code as interpreted in Republic v. Manalo, the legal effects
of the divorce obtained by F may be recognized in the Philippines which may
capacitate F to remarry here.
[Note: The legal effects of the divorce obtained by F may be recognized in the
Philippines; however, it may not capacitate her to remarry as a matter of enforcement
of said divorce. Recognition is different from enforcement, the latter being subject to
defenses].
A.5.
X and Y were in a live-in relationship for the longest time, and were already blessed with a
child, Z. They finally decided to get married on March 15, 2020, When X’s parents found
about the news, they were thrilled and thus, donated in favor of Z, the family heirloom,
particularly, a gold ring valued at P250,000.00 which X and Y orally accepted on behalf of
their minor child. One day, X and Y got into a serious quarrel, which resulted in them setting
aside their marriage plans.
(a) Is the donation to Z valid? Explain. (3%)
SUGGESTED ANSWER:
No, it is a void donation. This is an ordinary donation inter vivos, not a
donation proper nuptias. The Civil Code provides that if the value of the personal
property donated exceeds five thousand pesos, the donation and the acceptance shall
be made in writing; otherwise, the donation shall be void. A piece of jewelry like the
family heirloom here which is a gold ring, valued at P250,000.00, is a personal
property. Here, the acceptance was made orally; therefore, the donation is void
(Article 748).
(b) Assuming that the donation to Z is valid, may X’s parents revoke the
donation on the ground that the marriage of X with Y did not push through? Explain. (3%)
SUGGESTED ANSWER:
No, because it is an ordinary donation, not a donation propter nuptias. The ground
that the marriage did not push through may only be raised to revoke donations by
reason of marriage which is defined by Article 126 of the Family Code, as those which
are made before its celebration, in consideration of the same and in favor of one or
both of the future spouses (Art. 83, FC). Here, the donation was not made in favor of
one or both of the future spouses, but in favor of their child. X’s parents, therefore,
cannot revoke the donation on the ground that the marriage of X with Y did not push
through.
A.6.
Name at least two (2) exclusions from the following property regimes as
enumerated under the Family Code:
(a) Absolute community of property (2%)
SUGGESTED ANSWER:
(Any 2 of the 3 may be considered):


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;
Property for personal and exclusive use of either spouse. However,
jewelry shall form part of the community property;

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. (Article 92 of the Family Code)
(b) Conjugal partnership of gains (2%)
SUGGESTED ANSWER:
(Any 2 of the 4 may be considered):
(1) Property which is brought to the marriage as his or her own;
(2) Property which each acquires during the marriage by gratuitous
title:
(3) Property which is acquired by right of redemption, by barter or by exchange with
property belonging to only one of the spouses; and
(4) Property which is purchased with exclusive money of the wife or of the husband.
(Article 109 of the Family Code)
A.7.
Believing that he owned a certain parcel of land and completely unaware of any defect in his
title thereto, Mr. A started to build a house thereon. When Mr. P. the real owner of the land
learned of ‘Mr. A’s actions, Mr. P immediately demanded Mr. A to leave the premises.
However. Mr. A refused to leave, and instead, asserted that as a builder in good faith. Mr. P
is obliged to sell the land to him.
(a) is the claim of Mr. A correct? Explain. (3%)
SUGGESTED ANSWER:
No, Mr. A is not correct. Mr. A who was completely unaware of any defect in his title,
is a builder in good faith. Mr. P who prompted Mr. A’s possession also acted in good
faith. Article 448 appiies in this case, which provides that only the owner of the land
on which anything has been built, sown or planted in good faith, has the right to
appropriate as his own the works, sowing or planting, after payment of the indemnity
for necessary expenses and useful expenses where applicable, OR to oblige the one
who built or planted to pay the price of the land, and the one who sowed, the proper
rent; however, the builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. The law grants said rights to the
owner of the land. The builder in good faith, Mr. A in this case, cannot compel Mr. P,
the owner of the land, to choose which right to exercise, for the option belongs to the
owner alone.
ALTERNATIVE ANSWER:
No, Mr. A is incorrect. He is a builder in bad faith. When Mr. A started building his
house, he was completely unaware of any defect in his title and therefore, was, at the
outset, a builder in good faith but when Mr. P immediately demanded Mr. A to leave
the premises before he completed the house, which Mr. A refused to do and he
continued building since he persisted in the belief that his title had no fatal defect, he
became a builder in bad faith. Mr. P, the real owner, who immediately asked him to
leave the premises, acted in good faith. He has by law the option of acquiring the
house without paying for it (Art. 499, Civil Code).
(b) Assuming that Mr. P all the while, know but did not object to Mr. Als construction of the
house on his property, may Mr. A compel Mr. P to purchase the said improvement due to
Mr. P’s bad faith? Explain. (3%)
SUGGESTED ANSWER:
Yes, Mr. A may compel Mr. P to purchase the improvements, Article 454 of the Civil
Code provides that when the landowner acted in bad faith and the builder, planter or
sower proceeded in good faith, the provisions of article 447 shall apply. Article 453 of
the same Code provides that it is understood that there is bad faith on the part of the
landowner whenever the act was done with his knowledge and without opposition on
his part. Article 447 provides that the owner of the land who makes thereon,
personally or through another, plantings, constructions or works with the materials of
another, shall pay their value; and, if the landowner acted in bad faith, the owner of
the materials may remove them in any event, with a right to be indemnified for
damages. The landowner, having known and without opposing the construction made
by Mr. A is deemed to have acted in bad faith: Article 447, therefore, applies and Mr. P
shall pay the value of the improvement; i.e., the value of the materials, plus damages.
ALTERNATIVE ANSWER:
Since Mr. A is a builder in bad faith for continuing to build despite being asked to leave the
premises, and Mr. P also acted in bad faith for not objecting to Mr. A’s construction of his
house on his property, they shall be treated to have both acted in good faith (Article 453 of
the Civil Code). The bad faith of Mr. A is neutralized by the bad faith of Mr. P; thus, Article
448 of the Civil Code shall apply. The two options still belong to Mr. P, not Mr. A.
A.8.
Mr. E leased a piece of land from Mr. F to be used for his sawmill business for a period of
ten (10) years. Consequently, Mr. E placed heavy machineries there on to be used for his
aforementioned business, with the intention of removing them after the expiration of the
lease period.
Are Mr. E’s heavy machineries considered real properties under the Civil Code? Explain. (3%)
SUGGESTED ANSWER:
No, they are movables. Machinery which is movable in its nature only becomes
immobilized when placed in a plant by the owner thereof in a land or building which
is also owned by him, for an industry or works which may be carried on in a tenement
and which tend directly to meet the needs of said industry or works, but not when so
placed by a tenant, a usufructuary, or any person having only a temporary right,
unless such person acted as the agent of the owner, for instance, if the lease contained
a stipulation that any useful improvement which the lessee introduces on the leased
property shall pertain to the lessor at the termination of the lease. Here, the heavy
machineries were placed by Mr. E on a piece of land leased from Mr. F with the
intention of removing them after the expiration of the lease period. Being movable in
nature, said machineries were not deemed immobilized (Davao Saw Mill Co. Inc. v.
Castillo, G.R. No. L-40411, August 7, 1935).
A.9.
Ms. U is a usufructuary of a piece of land owned by Mr. L. During the existence of the
usufruct, Ms. U introduced various useful improvements on the land. Upon termination of
the usufruct, Mr. L requested Ms. U to remove the said improvements, but Ms. U refused,
demanding instead that Mr. L reimburse her the value of the same.
(a) What is a usufruct? (2%)
SUGGESTED ANSWER:
A 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 (Article 562, Civil Code).
The Court has further declared that a usufruct, in essence, is nothing else but simply
allowing one to enjoy another’s property. It is also defined as the right to enjoy the
property of another temporarily, including both the jus utendi and the jus
fruendi, (plus, impliedly, the jus possidendi) with the owner retaining the jus
disponendi or the power to alienate the same (Moralidad v. Sps. Pernes, G.R. No.
152809, August 3, 2006).
(b) Is Ms. U’s demand proper? Explain. (3%)
SUGGESTED ANSWER:
No, the demand is not proper. The Civil Code provides that the usufructuary may
make on the property held in usufruct any useful improvements, or expenses for mere
pleasure, which he may deem proper, provided he does not alter its form or
substance; but he shall have no right to be indemnified therefor. He may, however,
remove such improvements should it be possible to do so without injury to the
property (Article 579, Civil Code).
Ms. U, thus, has no right to be indemnified for any improvements which she might
have made on the land held in usufruct. She may only remove them should it be
possible to do so without injury to the property.
A.10.
Village H and Village L are adjoining residential villages in a mountainous portion of
Antipolo City, Rizal, with Village L being lower in elevation than Village 11. In an effort to
beautify Village H. its developer, X, Inc., constructed a clubhouse which included an
Olympic-sized swimming pool and an artificial lagoon on a portion of land overlooking
Village L.
During the monsoon season, the continuous heavy rains caused Village II’s swimming pool
and artificial lagoon to overflow, resulting into a massive spillover that damaged various
properties in Village L. Aggrieved, the homeowners of Village L filed a complaint for
damages against X, Inc. In defense, X, Inc. contended that pursuant to the Civil Code, Village
L, as the lower estate, was obliged to receive the waters descending from Village H. the
higher estate. Hence, it cannot be held liable for damages.
Is X. Inc.’s position tenable? Explain. (3%)
SUGGESTED ANSWERS:
No, X Inc.’s position is not tenable. The Water Code provides that lower estates are
only obliged to receive waters which naturally and without intervention of man
descend from higher estates (Art. 50, Water Code of the Philippines). The Code also
provides that the owner of the higher estate cannot make works which will increase
the natural flow. Therefore, Village L, as the lower estate, was only obliged to receive
the waters which naturally and without intervention of man descend from higher
estates and not those which are due to the massive spillover from constructions made
by X, Inc. (Article 537 of the Civil Code).
X, Inc, therefore, is liable for damages.
-END OF PART I –
PART II
B.11.
Mr. R is the registered owner of a parcel of land located in Cebu City covered by Transfer
Certificate of Title (TCT) No. 1234 issued in 1955. Since his acquisition of the lot. Mr. R and
his family had been in continuous, open, and peaceful possession thereof. Mr. R died in
1980, resulting in the land being transferred in the names of his heirs, i.e., A, B. and C, who
became registered owners thereof as per TCT No. 5678. During the entire time, said land
had never been encumbered or disposed, and that its possession always remained with
them.
Sometime in 1999. A, B, and C wanted to build a concrete fence around the parcel of land,
but they were opposed by Mrs. X, who started claiming ownership over the same property
on the strength of a Deed of Absolute Sale purportedly entered into by her with Mr. R
during the time that he was still alive, Aggrieved, A, B, and C intend to file a complaint for
quieting of title against Mrs. X.
(a) What are the substantive requisites for the action to prosper? Do they obtain in this
case? Explain. (3%)
SUGGESTED ANSWER:
For an action to quiet title to prosper, the following requisites must obtain in the
case:
(1) the plaintiff or complainant has a legal or an equitable title
to or interest in the real property subject of the action; and
(2) the instrument, record, claim, encumbrance or proceeding
claimed to be casting cloud on his title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or legal efficacy.
The requisites for an action to quiet the title obtain in this case, since A, B, and Care
the registered owners of the parcel of land, having inherited the same from their
father Mr. R, and the Deed of Absolute Sale, which cast a cloud on their title may be
shown to be invalid or inoperative (Heirs of Delfin v. Heirs of Bacud, G.R. No. 187633,
April 4, 2016).
(b) Within what period should A, B, and C file the complaint for quieting of title? Explain,
(2%)
SUGGESTED ANSWER:
The action for quieting of title does not prescribe, because the plaintiffs are in
possession of the land [Heirs of Uheras v. CFI, October 30, 1978).
(c) Assuming that Band C are residing abroad, may A. without the knowledge of Band , file
the complaint for quieting of title on behalf of all the heirs? Explain. (2%)
SUGGESTED ANSWER:
Yes, A may file the complaint, provided that he files the same for the co-ownership.
Anyone of the co-owners may bring such an action in ejectment (Article 87 of the Civil
Code), even without joining all the other co-owners as co-plaintiffs, because the suit is
deemed to be instituted for the benefit of all, assuming A wins the case.
Parenthetically, if A loses in the action to quiet title, it will if not affect B and C,
because the Court did not acquire jurisdiction over their persons. The Court further
held that if the action is for the benefit of the plaintiff alone, such that he claims the
possession for himself and not for the co-ownership, the action will not
prosper (Celino v. Heirs of Alejo, G.R. No. 1618117, July 30, 2004).
B.12.
D, an Overseas Filipino Worker, was on his way home to the Philippines after working for so
many years in the Middle East. He had saved P100,000.00 in his local savings account which
he intended to use to start up a business in his home country. On his flight home, tragedy
struck as a suicide bomber blew up the plane. All the passengers, including D, died. He left
behind his widowed mother M; his common-law wife, W, who is the mother of his twin sons,
T and S; and his brother, B. He left no will, no debts, no other relatives, and no other
properties except the money in his savings account.
Who are the heirs entitled to inherit from D and how much should each receive? Explain.
(5%)
SUGGESTED ANSWER:
D’s heirs entitled to inherit from him are:
M (his mother) – P50,000 and T and S (his twin sons) – P25,000 each.
D died intestate and his heirs are the mother (legitimate ascendant) and his twin sons
(illegitimate). The mother gets one-half of his estate and his two illegitimate sons get
the other half (Article 991).
W, the common-law wife” is not an heir ab intestato because she is not a legal spouse.
She is merely a partner in a non-marital union.
B.13.
M. single, named his sister N in his will, as a devisce over a certain parcel of land that he
owned, with the obligation of preserving the land and transferring it, upon N’s death, to her
illegitimate daughter O. who was then only a year old.
Is the condition imposed on N to preserve the land and to transmit it upon her death to a
valid case of fideicommissary substitution? Explain. (3%)
SUGGESTED ANSWER:
Yes, this is a valid case of fideicommissary substitution. Article 863 of the Civil Code
provides that a fideicommissary substitution by virtue of which the fiduciary or first
heir instituted is entrusted with the obligation to preserve and to transmit to a second
heir the whole or part of the inheritance, shall be valid and shall take effect, provided
such substitution does not go beyond one degree from the heir originally instituted.
First, there is the absolute obligation imposed upon the fiduciary N to preserve and to
transmit to the fideicommissary the part of the inheritance. Second, O, the
fideicommissary, as the fiduciary’s illegitimate daughter is one degree from the
fiduciary. Furthermore, O’s illegitimate status is of no moment, because Art. 863,
referring to the “heir” does not distinguish between legitimate from illegitimate
relationships.
B.14.
Prior to his death, H, married to W. with children X. Y. and Z, executed a holographic will
entirely written, dated, and signed by him. In his will, H instituted W, X, and Y as bis heirs,
and consequently, made testamentary dispositions in their favor. H. however, expressly
disinherited Z on the ground that the latter once filed a civil case against him in order to
collect a particular sum of money he previously owed Z
(a) Was the disinheritance of Z proper? Explain. (3%)
SUGGESTED ANSWER:
No, it is not a proper ground to disinherit. Article 916 of the Civil Code provides that
disinheritance can be effected only through a will wherein the legal cause therefor
shall be specified. Article 919 of the same Code provides that the following shall be
sufficient causes for the disinheritance of children and descendants, legitimate as well
as illegitimate. That Z once filed a civil case against him in order to collect a particular
sum of money he previously owed is not one of the grounds for a valid
disinheritance.
(b) Assuming that the disinheritance of Z was improper, how will it affect the institution of
heirs and testamentary dispositions made in II’s will? Explain. (3%)
SUGGESTED ANSWER:
Article 918 of the Civil Code provides that disinheritance for a cause which is not one
of those set forth in this Code, shall annul the institution of heirs insofar as it may
prejudice the person disinherited; but the devises and legacies and other testamentary
dispositions shall be valid to such extent as will not impair the legitime.
B.15.
Mr. P offered to sell his Manila Polo Club shares to Ms. Q for P2.500,000.00. Ms. Q accepted
on the condition that their agreement will not take effect until after one (1) year. Mr. P then
acceded and both of them shook hands, Excited about the prospect of acquiring Mr. P’s
shares, Ms. Q approached the former and offered to pay him an earnest money equivalent
to 1% of the purchase price, which Mr. P accepted. After one (1) year, Ms. Q approached Mr.
P seeking the enforcement of their agreement for Mr. P to sell his shares to her. Mr. P
refused to honor their agreement, claiming that the same was covered by the Statute of
Frauds because it was not reduced into writing and hence, unenforceable.
Is the position of Mr. P correct? Explain. (3%)
SUGGESTED ANSWER:
No, the position of P is incorrect. The Statute of Frauds only applies to purely
executory contracts; partial performance removes the contract from the ambit of the
Statute of Frauds and not to partially or completely executed contracts. Article 1482
of the Civil Code provides that whenever earnest money is given in a contract of sale,
it shall be considered as part of the price and as proof of the perfection of the
contract. The payment of earnest money, such as in this case, is tantamount to partial
execution of the contract which precludes the application of the Statute of Frauds.
The contract has been partially performed and a benefit was already accepted when
the seller accepted earnest money from the buyer (Article 1403 (2)(d); Averia v.
Averia, G.R. No. 141877. August 13, 2004; Mactan-Cebu International Aiport Authority
v. Tudtud, (2008).
B.16.
C Corp. entered into a contract with D, Inc. for the construction of the latter’s production
warehouse. In consideration thereof, D, Inc. was obliged to pay C Corp. the amount of
P50,000,000.00 within a period of one (1) month from the time of the project’s completion.
To secure the payment of the said sum, D, Inc. entered into a surety agreement with S
Company:
After more than a month from the completion date of the project, C Corp. remained unpaid.
Claiming that it was suffering from serious financial reverses, D, Inc. asked C Corp. for an
extension of three (3) months to pay the P50,000,000.00 it still owed, to which C Corp.
agreed. However, after more than three (3) months, D, Inc. still refused to pay. Hence, C
Corp, proceeded to collect the above sum from the surety. S Company,
F or its part, S Company refused the claim and raised the defense that the extension of time
granted by C Corp. to D. Inc. without its consent released it from liability
(a) Will the defense of s Company against the claim hold water? Explain. (3%)
SUGGESTED ANSWER:
Yes, the defense holds. The Court has held that the provisions of the Civil Code on
Guarantee, other than the benefit of excussion, are applicable and available to the
surety. One of the provisions of the Civil Code on Guarantee is Art. 2079 which
provides that an extension granted to the debtor by the creditor without the consent
of the guarantor extinguishes the guaranty. Here, the parties entered into a surety
agreement; thus, the extension granted without the consent of S Company
extinguished the suretyship [Autocorp Group vs. Intra Strata Assurance Corporation,
G.R. No. 166662, June 27, 2008; 556 SCRA 250].
(b) Assuming that S Company instead refused the claim on the ground that Corp. has yet to
exhaust D, Inc.’s property to satisfy the claim before proceeding against it, will this defense
prosper? Explain. (2%)
SUGGESTED ANSWER:
No, the defense will not prosper. Art. 2047 provides that if a person binds himself
solidarily with the principal debtor, the provisions of Section 4, Chapter 3, Title I of
this Book shall be observed and in such case the contract is called a suretyship. Under
Article 2059, the excussion shall not take place if he (the guarantor) has bound
himself solidarily with the debtor, S Company, therefore, cannot refuse the claim on
the ground that C Corp. has yet to exhaust D, Inc.’s property to satisfy the claim
before proceeding against it.
B.17.
In 2015, O, the original registered owner of a 300-square meter property covered by
Original Certificate of Title (OCT) No. 0-1234. appointed F as its caretaker. A year after, while
was abroad, F surreptitiously broke open O’s sure and stole the duplicate copy of the said
OCT. F then forged a Deed of Absolute Sale and made it appear that O sold the property to
him. Consequently. F was able to have OCT No. 0-1234 cancelled and in lieu thereof a new
title. Transfer Certificate of Title (TCT) No. T-4321. was issued in his naine
A few months after, F offered the property for sale to X After conducting the required due
diligence to verify the title of F. and finding no occupant in the property during ocular
inspection, X signed the contract of sale, and thereupon, fully paid the purchase price. A few
days later, X was able to obtain TCT No. T 5678 under his name.
When O discovered T’s fraudulent acts upon his return in 2017. O immediately filed a
complaint for reconveyance against F and X, principally pointing out that F merely forged
his signature in the Deed of Absolute Sale purportedly made in F’s favor and thus, F could
not have validly transferred the title thereof to X. Consequently, he sought the return of the
subject property to him.
(a) Will the prayer of O for the return of the subject property prosper? Explain. (3%)
SUGGESTED ANSWER:
No, the prayer of O will not prosper, because X purchased the land from an apparent
owner in good faith and for value. Section 53 of P.D. 1529 provides that in all cases of
registration procured by fraud, the owner may pursue all his legal and equitable
remedies against the parties to such fraud without prejudice, however, to the rights of
any innocent holder for value of a certificate of title. The Court in the case of Heirs of
Abalon v. Andal (G.R. No. 183448, June 30, 2014), defined an innocent purchaser for
value as one who buys the property of another without notice that some other person
has a right to or interest therein and who then pays a full and fair price for it at the
time of the purchase or before receiving a notice of the claim or interest of some
other persons in the property.
(b) Assuming that could no longer recover the subject property in view of X’s registration
thereof in his name, may a claim against the Assurance Fund pursuant to the provisions of
the Property Registration Decree be instituted? Explain. (3%)
SUGGESTED ANSWER:
Yes, a claim against the Assurance Fund may be instituted. Section 95 of P.D. 1529
provides that a person who, without negligence on his part, sustains loss or damage,
or is deprived of land or any estate or interest therein in consequence of the bringing
of the land under the operation of the Torrens system arising after original
registration of land, through fraud or in consequence of any error, omission, mistake
or misdescription in any certificate of title or in any entry or memorandum in the
registration book, and who by the provisions of this Decree is barred or otherwise
precluded under the provision of any law from bringing an action for the recovery of
such land or the estate or interest therein, may bring an action in any court of
competent jurisdiction for the recovery of damages to be paid out of the Assurance
Fund.
ALTERNATIVE ANSWER:
The property is already registered under the name of X, an innocent purchaser for
value. The registration of the innocent purchaser for value’s title is a condition sine
qua non in order to properly claim against the Assurance Fund. This is because it is
only after the registration of the innocent purchaser for value’s title and not the
usurper’s title which constitutes a breach of trust) can it be said that the claimant
effectively sustains loss or damage, or is deprived of land or any estate or interest
therein Manuel v. RD for Legazpi City, G.R. No. 224678, July 3, 2018].
B.18.
In light of a new business venture, Mr. A entered into a lease contract with Mr. B involving
one of the latter’s warehouses. One day, Mr. B, who was then encountering financial
difficulties, approached Mr. A and sought for a loan, which Mr. A readily granted to him. In
order to secure the loan obligation, Mr. B mortgaged the leased warehouse in favor of Mr.
A. In addition, Mr. B executed a promissory note in favor of A, wherein prior demand was
waived by him.
When Mr. B defaulted on his loan obligation. Mr. A simply stopped paying rentals due to
Mr. B on the ground that legal compensation had already set in up to the concurrent
amount. Furthermore, since there was still a balance due on the promissory note, Mr. A
foreclosed the real estate mortgage over Mr. B’s property. without any prior demand
furnished to Mr. B.
Aggrieved, Mr. B opposed the foreclosure due to the lack of prior demand, contending that
the waiver of prior demand was stipulated in the promissory note and not in the mortgage
instrument. Mr. B likewise argued that when Mr. A invoked legal compensation between the
unpaid rentals and the loan arrearages, it amounted to a novation that resulted in the
extinguishment of the loan contract between them. As such, the real estate mortgage, being
a mere accessory contract to the principal loan, was necessarily extinguished.
(a) May Mr. A validly claim legal compensation? Explain. (2%)
SUGGESTED ANSWER:
Yes, Mr. A may validly claim legal compensation. The Civil Code provides that when all
the requisites mentioned in Article 1279 are present, compensation takes effect by
operation of law, and extinguishes both debts to the concurrent amount, even though
the creditors and debtors are not aware of the compensation (Article 1290, Civil
Code).
All requisites obtain in this case. For compensation to be proper, it is necessary:
(1) That each one of the obligors be bound principally, and that he be at the same
time a principal creditor of the other:
(2) That both debts consist in a sum of money, or if the things due are consumable,
they be of the same kind, and also of the same quality if the latter has been stated;
(3) That the two debts be due;
(4) That they be liquidated and demandable:
(5) That over neither of them there be any retention or controversy, commenced by
third persons and communicated in due time to the debtor (Article 1279, Civil Code).
(b) May Mr. A validly foreclose on the real estate mortgage even without prior demand to
Mr. B? Explain. (2%)
SUGGESTED ANSWER:
Yes, Mr. A may validly foreclose the mortgage. The Court has declared that a provision
on waiver of notice or demand is legal and valid. Although the Civil Code provides
that one incurs in delay or is in default from the time the obligor demands the
fulfillment of the obligation from the obligee (Article 1169), the law expressly
provides that demand is not necessary under certain circumstances, and one of these
circumstances is when the parties expressly waive demand. Since Mr. B waived the
requirement of prior demand in the promissory note, he was considered in delay or in
default when he failed to pay the loan obligation [Sps. Agner, v. BPI Family Savings
Bank, Inc., G.R. No. 182963, June 3, 2013; BPI v. CA, 523 Phil. 548 (2006)].
(c) Is Mr. B’s claim of novation correct? Explain, (2%)
SUGGESTED ANSWER :
No, Mr. B’s claim is incorrect. A novation is express when the new obligation declares
in unequivocal terms that the old obligation is extinguished and it is implied when the
new obligation is incompatible with the old one on every point. The test of
incompatibility is whether the two obligations can stand together, each one with its
own independent existence. Here there is neither express nor implied novation (Arco
Pulp and Paper Co., Inc. v. Lim, G.R. No. 206806, June 25, 2014).
ALTERNATIVE ANSWER:
No Mr. B’s claim is incorrect, because there was no new contract entered into between
Mr. A and Mr. B. When there is neither a valid new contract nor a clear agreement
between the parties to a new contract, there is no novation. Without the new contract,
the old contract is not extinguished by novation (Country Bankers Insurance Corp. v.
Lugman, G.R. No. 165487, July 13, 2011). Besides, legal compensation is another
mode of extinguishment of the obligation different from novation. Here, what took
place is partial legal compensation; hence, Mr. Bis still in default as to the unpaid loan
arrearages.
B.19.
Mr. A entered into a lease contract covering one of his commercial buildings with XYZ
Company, a partnership composed of X, Y. and Z, as lessee, for use as an office space. Upon
failure to receive the rental payments when they fell due, Mr. A immediately sought
payment of the same from X. Y, and Z, asserting that the individual partners are solidarily
liable together with the partnership for its debts.
X, Y, and Z disagreed with Mr. A’s contention, arguing further that in any event, rentals
should not be paid up until Mr. A makes the necessary arrangements for the repair of the
defective electrical wirings in the office that caused power outages and hence, made it
difficult, if not impossible, for them to conduct their usual business operations.
Rule on the parties’ respective arguments. (5%)
SUGGESTED ANSWER:
Mr. A’s contention that the individual partners are solidarily liable together with the
partnership for partnership debts is untenable. Article 1768 of the Code provides that
the partnership has a juridical personality separate and distinct from that of each of
the partners. Article 1816 of the Civil Code further provides that all partners, including
industrial ones, shall be liable pro rata with all their property and after all the
partnership assets have been exhausted, for the contracts which may be entered into
in the name and for the account of the partnership, under its signature and by a
person authorized to act for the partnership,
The contention of X, Y, Z that the rentals should not be paid up until Mr. A. makes the
necessary arrangements for the repair of the defective electrical wirings in the office
that caused power outages is correct. Article 1658 of the Civil Code provides that the
lessee may suspend the payment of the rent in case the lessor fails to make the
necessary repairs or to maintain the lessee in peaceful and adequate enjoyment of the
property leased. Repair of defective electrical wirings are necessary repairs.
ALTERNATIVE ANSWER:
Mr. A’s contention that the individual partners are solidarily liable together with the
partnership for partnership debts is untenable. X, Y, Z are not the real parties in
interest against whom a claim for payment of the unpaid lease rentals may be made.
According to the Court in the case of Saludo, Jr. v. Philippine National Bank (G.R. No.
193138, August 20, 2018], the general rule under Article 1816 of the Civil Code is that
partnership assets are primarily liable for the contracts entered into in the name of
the partnership and by a person authorized to act on its behalf. All partners – in this
case, X, Y, and Z – are only liable pro rata with all their property after all the
partnership assets have been exhausted. This is because it is the partnership, an entity
possessing of a juridical personality separate from its partners, that entered into the
contract of lease. Said partnership has concomitant rights and obligations with
respect to the transactions it enters into for which the partners may not be made
liable:
B.20.
Distinguish the following:
(a) Contract of sale and contract to sell (2%)
SUGGESTED ANSWER 1:
A contract of sale may be absolute or conditional (Art. 1458 (2), Civil Code). A
contract to sell is a kind of conditional sale.
In an absolute sale, title to the property passes to the vendee upon the delivery of the
thing sold. In both contracts to sell and contracts of conditional
sale, title to the property remains with the seller despite delivery. Both contracts are
subject to the positive suspensive condition of the buyer’s full payment of the
purchase price or the fulfillment of the condition.
SUGGESTED ANSWER 2:
In an absolute sale, title to the property passes to the vendee upon the delivery of the
thing sold.
In a contract of conditional sale, the buyer automatically acquires title to the property
upon full payment of the purchase price. This transfer of title is “by operation of law
without any further act having to be performed by the seller.”
In a contract to sell, transfer of title to the prospective buyer is not automatic. “The
prospective seller (must) convey title to the property [through a deed of conditional
sale (Olivarez Realty Corporation And Dr. Pablo R. Olivarez V. Benjamin Castillo, G.R.
No. 196251, July 9, 2014).
(b) Interruption and tolling of prescription of actions (2%)
SUGGESTED ANSWER:
The interruption of the prescriptive period by written extrajudicial demand means
that the said period would commence anew from the receipt of the demand [Overseas
Bank of Manila v. Geraldez, 94 SCRA 937 (1979)]
Article 1155 of the Civil Code provides that the “prescription of actions is interrupted”
inter alia, “when there is any written acknowledgment of the debt by the debtor.”
This simply means that the period of prescription, when interrupted by such a written
acknowledgment, begins to run anew; and whatever time of limitation might have
already elapsed from the accrual of the cause of action is thereby negated and
rendered inefficacious. The effect of the interruption spoken of in Article 1155 is to
renew the obligation, to make prescription run again from the date of the
interruption. [Philippine National Railway’s vs. National Labor Relations Commission,
177 SCRA 740 (1989)]
In Overseas Bank of Manila v. Geraldez, the Supreme Court ruled that tolling merely
suspends the period that has already elapsed.
– END OF PART II –