POINTERS IN CIVIL LAW

2016 BAR EXAMINATIONS

BY PROFESSOR VICTORIA V. LOANZON
PREPARED WITH THE ASSISTANCE OF
ATTY. ZARAH SUAREZ, ADMITTED TO THE
PRACTICE OF LAW APRIL 2015
PART I: The Velasco Cases
EFFECT AND APPLICATION OF LAWS (Cojuangco, Jr. v. Republic)
Question: May a law assume effectivity without prior publication?
Answer: No. A law must be published to become effective. Article 2 of the New Civil Code
provides that laws shall take effect after fifteen (15) days following the completion of their
publication in the Official Gazette or in a newspaper of general circulation in the Philippines,
unless it is otherwise provided.
PUBLICATION OF LAWS (National Electrification Administration v. Gonzaga)
Question: Are all administrative rules and regulations required to be published?
Answer: Interpretative regulations and those merely internal in nature, that is, regulating only
the personnel of the administrative agency and not the public, need not be published.
WAIVER OF RIGHTS (Estate of the late Encarnacion v. Dizon)
Question: X owns various tracts of ricefields in Pampanga which were tilled by tenant-farmers.
X executed an affidavit stating that he was placing the tracts of land he owns under the coverage
of PD 27 (Decreeing the emancipation of tenants from the bondage of the soil, transferring to
them the ownership of the land they till and providing the instruments and mechanism therefor)
without any exception, and therefore, the lands would later be sold to the tenant-farmers who
tended the same. Thus pursuant to the said affidavit, Emancipation Patents (EP) were issued to
the tenant-farmers. May X's affidavit give rise to a valid title in favor of the tenant-farmers?
Answer: Yes. X's waiver or an intentional and voluntary surrender of his right over the tracts of
land gave rise to a valid title or ownership of property in favor of the tenant-farmers. Under
Article 6 of the Civil Code, Rights may be waived, unless the waiver is contrary to law, public
order, public policy, morals, or good customs, or prejudicial to a third person with a right
recognized by law.
HUMAN RELATIONS (GONZALES v. PCIB)
MALICE/BAD FAITH
Question: X, a client of ABC bank, was granted a Credit-On-Hand Loan Agreement (COHLA)
with his accounts in the bank as collateral. Pursuant to the loan agreement, X obtained loans
from the bank but later failed to pay the interests due. Without prior notification to X, ABC bank
terminated the COHLA and likewise froze his foreign account. Later, X learned that a check he
issued in favor of one of his creditors was dishonored in view of the termination of the COHLA.
X was therefore forced to pay in cash. Was the termination of the COHLA by ABC bank proper?
Answer: No. The lack of notice to X prior to the revocation and termination of the credit line
agreement manifested the gross negligence of the bank, thereby violating the clear stipulation in
the COHLA. It is undisputed that the bank unilaterally revoked, suspended, and terminated the
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COHLA without giving X prior notice as required by the above stipulation in the COHLA. Thus
violating Art. 19 of the Civil Code.
In order for Art. 19 to be actionable, the following elements must be present: "(1) the existence
of a legal right or duty;
(2) which is exercised in bad faith; and
(3) for the sole intent of prejudicing or injuring another."
The Court found that such elements are present in the instant case. The effectivity clause of the
COHLA is crystal clear that termination of the COHLA should be done only upon prior notice
served on the CLIENT. This is the legal duty of PCIB to inform Gonzales of the termination.
However, as shown by the above testimonies, PCIB failed to give prior notice to Gonzales.
Malice or bad faith is at the core of Art. 19. Malice or bad faith "implies a conscious and
intentional design to do a wrongful act for a dishonest purpose or moral obliquity." In the instant
case, PCIB was able to send a letter advising Gonzales of the unpaid interest on the loans but
failed to mention anything about the termination of the COHLA. More significantly, no letter
was ever sent to him about the termination of the COHLA. The failure to give prior notice on the
part of PCIB is already prima facie evidence of bad faith.
Therefore, it is abundantly clear that this case falls squarely within the purview of the principle
of abuse of rights as embodied in Art. 19.
NOMINAL DAMAGES
Question: In the preceding case, is X entitled to nominal damages?
Answer: Yes. Nominal damages are recoverable where a legal right is technically violated and
must be vindicated against an invasion that has produced no actual present loss of any kind. Its
award is thus not for the purpose of indemnification for a loss but for the recognition and
vindication of a right. In the present case, Gonzales had the right to be informed of the accrued
interest and most especially, for the suspension of his COHLA. For failure to do so, the bank is
liable to pay nominal damages.
Moreover, the failure to give prior notice when required constitutes a breach of contract and is a
clear violation of Art. 21 of the Code which entitles Gonzales to an award for moral damages.
Even in the absence of malice or bad faith, a depositor still has the right to recover reasonable
moral damages, if the depositor suffered mental anguish, serious anxiety, embarrassment, and
humiliation.
Furthermore, the initial carelessness of the banks omission in not properly informing Gonzales
of the outstanding interest dues aggravated by its gross neglect in omitting to give prior notice as
stipulated under the COHLA and in not giving actual notice of the termination of the credit line
justifies the grant of exemplary damages by way of example or correction for the public good.
Finally, an award for attorneys fees is likewise called for from PCIBs negligence which
compelled Gonzales to litigate to protect his interest.
PERSONS (Dreamwork Construction Inc., v. Janiola)
PREJUDICIAL QUESTION
Question: X company filed a complaint against A for violation of BP 22. Subsequently, A
instituted a civil complaint against X company for the rescission of an alleged construction
agreement between the parties, as well as for damages. The check, subject of the criminal case,
was issued as consideration for the construction agreement. Thereafter, A filed a Motion to

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Suspend Proceedings on the ground of the existence of a prejudicial question. Was there a
prejudicial question in this case? What are the elements of a prejudicial question?
Answer: None. The 2000 Rules on Criminal Procedure, effective since December 1, 2000
provides that the two essential elements of a prejudicial question are:
(a) the previously instituted civil action involves an issue similar or intimately related to the issue
raised in the subsequent criminal action; and
(b) the resolution of such issue determines whether or not the criminal action may proceed.
Therefore, in order for a civil case to create a prejudicial question and, thus, suspend a criminal
case, it must first be established that the civil case was filed previous to the filing of the criminal
case. Assuming arguendo that the civil case was instituted prior to the criminal action, there is
still, no prejudicial question to speak of due to the absence of the second element, because the
agreement surrounding the issuance of dishonored checks is irrelevant to the prosecution for
violation of BP 22. The gravamen of the offense is the issuance of a bad check.
MARRIAGE (FAMILY CODE) (Abbas v. Abbas)
MARRIAGE LICENSE
Question: A and B were married without a marriage license. B filed a declaration of nullity of
his marriage to A on the ground of lack of marriage license. The court disagreed and ruled that
since A and B were married through a wedding ceremony and the parties signed a marriage
contract, the absence of a marriage license was thus cured. Hence, the marriage is still valid. Was
the court correct?
Answer: No. Article 4 of the Family Code is clear when it says, "The absence of any of the
essential or formal requisites shall render the marriage void ab initio, except as stated in Article
35(2)." Article 35(3) of the Family Code also provides that a marriage solemnized without a
license is void from the beginning, except those exempt from the license requirement under
Articles 27 to 34, of the same Code. this marriage cannot be characterized as among the
exemptions, and thus, having been solemnized without a marriage license, is void ab initio. As
the marriage license, a formal requisite is clearly absent, the marriage of Gloria and Syed is void
ab initio. Proof that a wedding ceremony was conducted and a marriage contract was signed do
not operate to cure the absence of a valid marriage license.
EVIDENCE IN DECLARATION OF NULLITY OF MARRIAGE (Yu v. Judge Reyes
Carpio)
Question: In a petition for declaration of nullity of marriage, is reception of evidence on custody,
support and property relations necessary for a complete adjudication of the parties respective
claims and defenses?
Answer: No. The Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of
Voidable Marriages clearly allow the reception of evidence on custody, support, and property
relations after the trial court renders a decision granting the petition, or upon entry of judgment
granting the petition. The trial court shall proceed with the liquidation, partition and distribution,
custody, support of common children, and delivery of their presumptive legitimes upon entry of
judgment granting the petition.
DISSOLUTION OF MARRIAGE (Bayot v. Bayot)
CLAIM OF CITIZENSHIP IN ANNULMENT OF MARRIAGE

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Question: Vicente, a Filipino, and Rebecca, an American citizen, were married on April 20,
1979 in Mandaluyong City. From then on, the marital relationship of Vicente and Rebecca
seemed to have soured. Rebecca initiated divorce proceedings in the CFI of Dominican
Republic which ordered the dissolution of the couple's marriage but giving them joint custody
and guardianship over their child, Alix. Subsequently, Rebecca filed a petition for declaration of
absolute nullity of marriage and also sought the dissolution of the conjugal partnership of gains
with application for support pendente lite for her and Alix. Vicente filed a Motion to Dismiss on
the grounds of lack of cause of action and that the petition is barred by the prior judgment of
divorce. Rebecca interposed an opposition, insisting that she remained a Filipino citizen;
therefore, there is no valid divorce to speak of. The RTC denied Vicente's motion to dismiss and
granted Rebecca's application for support pendente lite. The CA dismissed the petition of
Rebecca and set aside incidental orders the RTC issued in relation to the case.
Was Rebecca a Filipino citizen at the time the divorce judgment was rendered in the Dominican
Republic?
Answer: No. There can be no serious dispute that Rebecca, at the time she applied for and
obtained her divorce from Vicente, was an American citizen and remains to be one, absent proof
of an effective repudiation of such citizenship. The following are compelling circumstances
indicative of her American citizenship: (1) she was born in Agaa, Guam, USA; (2) the principle
of jus soli is followed in this American territory granting American citizenship to those who are
born there; and (3) she was, and may still be, a holder of an American passport.
And as aptly found by the CA, Rebecca had consistently professed, asserted, and represented
herself as an American citizen, particularly: (1) during her marriage as shown in the marriage
certificate; (2) in the birth certificate of Alix; and (3) when she secured the divorce from the
Dominican Republic. Mention may be made of the Affidavit of Acknowledgment in which she
stated being an American citizen. The Court can assume hypothetically that Rebecca is now a
Filipino citizen. But from the foregoing disquisition, it is indubitable that Rebecca did not have
that status of, or at least was not yet recognized as, a Filipino citizen when she secured the
February 22, 1996 judgment of divorce from the Dominican Republic.
EFFECT OF DIVORCE OBTAINED ABROAD
Question: Was the judgment of divorce valid?
Answer: Yes. The Court has taken stock of the holding in Garcia v. Recio that a foreign divorce
can be recognized here, provided the divorce decree is proven as a fact and as valid under the
national law of the alien spouse. Be this as it may, the fact that Rebecca was clearly an American
citizen when she secured the divorce and that divorce is recognized and allowed in any of the
States of the Union, the presentation of a copy of foreign divorce decree duly authenticated by
the foreign court issuing said decree is, as here, sufficient.
Given the validity and efficacy of divorce secured by Rebecca, the same shall be given a res
judicata effect in this jurisdiction. As an obvious result of the divorce decree obtained, the
marital vinculum between Rebecca and Vicente is considered severed; they are both freed from
the bond of matrimony. In plain language, Vicente and Rebecca are no longer husband and wife
to each other. Consequent to the dissolution of the marriage, Vicente could no longer be subject
to a husband's obligation under the Civil Code.
PROPERTY RELATIONS OF THE SPOUSES (Metrobank vs. Pascual)
CONJUGAL PROPERTY
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Question: Nicholson Pascual and his wife Florencia, married on January 19, 1985, purchased a
lot in Makati during the existence of their marriage. The TCT was issued in the name of
Florencia married to Nelson Pascual a.k.a. Nicholson Pascual.
Subsequently their marriage was declared null and void by the RTC. However, they were unable
to liquidate their conjugal partnership. After the dissolution of their marriage, Florencia obtained
a loan with Metrobank, and used the property as security for the loan. Upon default in the
payment of the loan, Metrobank foreclosed on the said property.
When Nicholson heard of the foreclosure proceedings, he petitioned the court to nullify the
mortgage of the disputed property which he believed was still conjugal property which was
mortgaged without his consent. Metrobank insisted that there must be proof that the property was
acquired using conjugal funds before it may be presumed as conjugal property. Is Metrobank
correct?
Answer: No. Proof that the property was purchased with conjugal funds is not necessary. Only
proof that the property was acquired during the marriage is needed.
CONJUGAL PROPERTY
Question: Is the property in question conjugal property of the spouses?
Answer: Yes. Art. 116 of the Family Code could not be of governing application inasmuch as
Nicholson and Florencia contracted marriage before the effectivity of the Family Code. It is Art.
160 of the Civil Code that would apply. Under Art. 160 of the Civil Code, All property of the
marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains
exclusively to the husband or to the wife.
DISSOLUTION OF THE REGIME OF COMMUNITY PROPERTY
Question: Did the court's dissolution of the marriage between Nicholson and Florencia ipso
facto amount to dissolution of the regime of community property of the spouses?
Answer: No. The character of the properties acquired before such declaration continues to
subsist as conjugal properties until and after the liquidation and partition of the partnership. In
the instant case, Florencia constituted the mortgage on the disputed property a little less than two
years after the dissolution of the conjugal partnership, but before the liquidation of the
partnership. It was co-ownership that governed the relation of the former spouses when the
mortgage was constituted. Therefore, Florencia has the right to mortgage only her one-half
undivided interest in the disputed property without the consent of Nicholson. The rights of
Metrobank, as mortgagee, are limited only to the 1/2 undivided portion that Florencia owned.
Accordingly, the mortgage contract insofar as it covered the remaining 1/2 undivided portion of
the lot is null and void.
PROPERTY RELATIONS OF THE SPOUSES (Sps. De Leon v. De Leon)
CONJUGAL PROPERTY
Question: Bonifacio O. De Leon, while still single, purchased from the Peoples Homesite and
Housing Corporation (PHHC) through a Conditional Contract to Sell on July 20, 1965 a parcel of
land. Two years later, Bonifacio married Anita de Leon.
During their marriage, the property was paid in full. The title of the land, however, was
registered in the name of Bonifacio with a civil status as single. Later, Bonifacio, without the
consent of Anita, sold the property to Spouses Tarrosa.
Subsequently, Bonifacio died. Thereafter, Spouses Tarrosa sought the registration of the Deed of
Sale and issuance of a title of the subject property in their favor. This prompted the children of
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Bonifacio and Anita to file a reconveyance suit with the RTC on the grounds that the sale was
fraudulent and lack of consent of Anita to the sale. Is the property in question conjugal?
Answer: Yes. The subject property is the conjugal property of Bonifacio and Anita. Article 160
of the 1950 Civil Code, the governing provision in effect at the time Bonifacio and Anita
contracted marriage, provides that all property of the marriage is presumed to belong to the
conjugal partnership unless it is proved that it pertains exclusively to the husband or the wife.
For the presumption to arise it is not even necessary to prove that the property was acquired with
funds of the partnership.
Only proof of acquisition during the marriage is needed to raise the presumption that the
property is conjugal. In fact, even when the manner in which the properties were acquired does
not appear, the presumption will still apply, and the properties will still be considered conjugal.
In the case at bar, ownership over what was once a PHHC lot and covered by the PHHCBonifacio Conditional Contract to Sell was only transferred during the marriage of Bonifacio and
Anita. In a contract to sell ownership is retained by the seller and is not passed to the buyer until
full payment of the price. Evidently, title to the property in question only passed to Bonifacio
after he had fully paid the purchase price on June 22, 1970. This full payment, to stress, was
made more than two (2) years after his marriage to Anita on April 24, 1968. In net effect, the
property was acquired during the existence of the marriage; as such, ownership to the property is,
by law, presumed to belong to the conjugal partnership.
SALE OF CONJUGAL PROPERTY WITHOUT CONSENT OF SPOUSE
Question: Was the sale between Bonifacio and Sps. Tarrosa valid?
Answer: No, the sale was void. It cannot be over-emphasized that the 1950 Civil Code is very
explicit on the consequence of the husband alienating or encumbering any real property of the
conjugal partnership without the wifes consent.
To a specific point, the sale of a conjugal piece of land by the husband, as administrator, must, as
a rule, be with the wifes consent. Thus, the sale is not valid. So it is that in several cases the
Court ruled that the sale by the husband of property belonging to the conjugal partnership
without the consent of the wife is void ab initio, absent any showing that the latter is
incapacitated, under civil interdiction, or like causes.
The Court said that the nullity proceeds from the fact that sale is in contravention of the
mandatory requirements of Art. 166 of the Code. Since Art. 166 of the Code requires the consent
of the wife before the husband may alienate or encumber any real property of the conjugal
partnership, it follows that the acts or transactions executed against this mandatory provision are
void except when the law itself authorized their validity. Accordingly, the Deed of Sale executed
on January 12, 1974 between Bonifacio and the Tarrosas covering the PHHC lot is void.
PATERNITY AND FILIATION (Grande v. Antonio)
USE OF FATHERS SURNAME BY ILLEGITIMATE CHILDREN
Question: Does a father possess the right to compel the use of his surname by his illegitimate
children upon his recognition of their filiation?
Answer: No. Art. 176 gives illegitimate children the right to decide if they want to use the
surname of their father or not. It is not the father or the mother who is granted by law the right to
dictate the surname of their illegitimate children.
On its face, Art. 176, as amended, is free from ambiguity. And where there is no ambiguity, one
must abide by its words. The use of the word "may" in the provision readily shows that an
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acknowledged illegitimate child is under no compulsion to use the surname of his illegitimate
father. The word "may" is permissive and operates to confer discretion upon the illegitimate
children. On the matter of childrens surnames, the use of the fathers surname does not serve the
best interest of the minor child. Indeed, the rule regarding the use of a childs surname is second
only to the rule requiring that the child be placed in the best possible situation considering his
circumstances.

PROPERTY
ACCESSION (BPI vs. Sanchez, et al.)
BUILDER, PLANTER or SOWER IN BAD FAITH
Question: Vicente Sanchez, Kenneth Sanchez and Imelda C. vda. De Sanchez are owners of a
registered land. Felisa Yap (Yap), the widow of Kenneth Sanchez, and one Jesus V. Garcia
(Garcia), doing business under the name Trans American Sales and Exposition, Inc. (TSEI),
agreed to the sale of the aforementioned property subject to the condition that Garcia shall cause
the reconstitution of the original title. Pursuant to this agreement, Yap turned over to Garcia the
original owners copy of TCT 156254 and other related documents. Unknown to Yap and
Vicente, Garcia took possession of the property and advertised the construction and sale of
"Trans American Townhouse V" thereon. Later, Garcia failed to pay the balance of the purchase
price as agreed upon. Thereafter, Yap and the Sanchezes filed before the RTC in Quezon City a
Complaint for the rescission of contract, restitution and damages with prayer for
TRO/preliminary injunction against TSEI and Garcia. Meanwhile, Garcia managed to cause the
cancellation of TCT 156254 and its replacement with TCT 383697 in the name of TSEI and used
such to entice buyers to buy townhouse units being constructed by TSEI on the subject lot.
Furthermore, Garcia was able to convey parts of the property to several buyers who intervened in
the instant case: the spouses Jose and Visitacion Caminas (Caminas), Reynaldo V. Maniwang
(Maniwang), Generoso C. Tulagan (Tulagan), Varied Traders Concept, Inc. (VTCI), and Arturo
Marquez (Marquez). Under the Civil Code, what are the rights of the Sanchezes as owners of a
land as against the builder, planter or sower in bad faith?
Answer: Under Articles 449 and 450 of the Civil Code, the Sanchezes have the right to exercise
any of the following options:
(1) acquire the property with the townhouses and other buildings and improvements that may be
found thereon without indemnifying TSEI or the intervenors;
(2) demand from TSEI or the intervenors to demolish what has been built on the property at the
expense of TSEI or the intervenors; or
(3) ask the intervenors to pay the price of the land.
As such, the Sanchezes must choose from among these options within thirty (30) days from
finality of this Decision. Should the Sanchezes opt to ask from the intervenors the value of the
land, the case shall be remanded to the RTC for the sole purpose of determining the fair market
value of the lot at the time the same were taken from the Sanchezes in 1988.
RIGHT OF INTERVENOR-PURCHASERS
Question: In case the Sanchezes decide to appropriate the townhouses, other structures and
improvements as their own pursuant to Article 449 of the Civil Code, may the intervenorpurchasers be ordered to vacate the premises?
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Answer: Yes. The intervenors-purchasers Caminas, Maniwang, Tulagan, Marquez and VCTI
shall be ordered to vacate said premises within a reasonable time from notice of the finality of
the decision by the Sanchezes. They, however, have the right to recover their investment in the
townhouses from Garcia and TSEI.
Question: What is the right of the Sanchezes in case they do not want to make use of the
townhouses and improvements on the subject lot?
Answer: The Sanchezes have the right to ask the intervenor-purchasers to demolish the
townhouses or if they do not demolish the same within a reasonable time, then it can be
demolished at their expense. The Sanchezes can also ask that the townhouse purchasers to pay to
them the fair market value of the respective areas allotted to their respective townhouses subject
of their deeds of sale.
DONATION (Monteroso vs. Court of Appeals)
EFFECT OF RATIFICATION ON NULL AND VOID DONATION
Question: May a null and void donation be ratified by the acquiescence of the parties?
Answer: No. The fact that nobody objected to the donation is of little consequence. The
circumstance that parties to a void contract choose to ignore its nullity can in no way enhance the
invalid character of such contract.
It is axiomatic that void contracts cannot be the subject of ratification, either express or implied.
Just like the issue of the nullity of the three deeds of absolute sale. The Court said that it need not
repeat the reasons for such determination, except the most basic. It emphasized that it is essential
to determine the authority of the person who executed the deed of donation. In a situation where
the person who cannot give consent to the donation, it is axiomatic that he has no disposable
right thereto. The legal maxim nemo dat quod non habet applies to this instance. If the person
who executed the sale is one of the heirs, he has usufructuary right equal to the share of the
surviving children under Article 834 of the Spanish Civil Code of 1889. Lest it be overlooked,
the then minor children were not under the legal guardianship of the person who executed the
sale , a situation which thus disqualifies him from signing on their behalf.
PRESCRIPTION AND LACHES (Dept. of Education v. Oate)
LACHES
Question: What are the elements of laches?
Answer: The elements of laches are:
(1) conduct on the part of the defendant, or of one under whom the defendant claims, giving rise
to the situation 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 as 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 in which the defendant bases the suit; and
(4) injury or prejudice to the defendant in the event relief is accorded to the complainant, or the
suit is not held barred.
Verily, the application of laches is addressed to the sound discretion of the court as its application
is controlled by equitable considerations. It is unjust for the State and the affected citizenry to
suffer after respondent and his predecessors-in-interest had slept on their rights for 52 years.

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Also, the inaction of respondent Oate and his predecessors-in-interest for over 50 years has
reduced their right to regain possession of Lot 6849-A to a stale demand.
PRESCRIPTION AND LACHES (Associated Labor Unions v. Court of Appeals)
LACHES
Question: After 37 years, a seller of parcles of land would like to annotate on the titles of the
property the pertinent paragraphs of the Deed of Sale covering the subject properties. Is the seller
barred by laches?
Answer: No. the RCAP was not barred by laches from asserting his legal right to cause the
annotation of the pertinent paragraphs of the deed of sale on the TCTs covering the subject
properties. Despite the lapse of 37 years, the annotation would not be inequitable or prejudicial
to any party since the SVD (buyer), under whose name the TCTs of the subject properties were
issued, did not interpose any objection to the annotation. The 4th and most important
element, that is, injury or prejudice to the defendant in the event relief is
accorded to the complainant or the suit is not held barred, is not present
under the premises.
No prejudice can result from the annotation pleaded by the RCAP since the
SVD, the property purchaser, did not oppose the annotation as evidenced by
a manifestation the DWUT filed before the RTC. More so, no prejudice can
befall the Union for no judgment lien has attached or been imposed over the
subject properties and, as earlier explained, there is no showing that the
subject properties are the only properties the DWUT has or that its other
assets and properties are insufficient to meet its obligations. Thus, failing to
show any actual interest over the subject properties that need judicial
protection, the Union will not suffer any damage with the annotation.
OBLIGATIONS AND CONTRACTS
PERFECTION OF CONTRACTS (SM Land, Inc. v. BCDA)
Question: SMLI submitted proposals to BCDA to develop properties of BCDA. The parties
negotiated until a Certificate of Successful Negotioations was signed by the parties. Later,
instead of proceeding with the Competitive Challenge, the BCDA corresponded with SMLI
stating that it will welcome any voluntary and unconditional proposal to improve the original
offer. In turn, SMLI increased the total secured payments with an upfront payment. Without
responding to SMLIs new proposal, the BCDA sent a memorandum to the Office of the
President categorically recommending the termination of the Competitive Challenge. Alarmed by
this development, SMLI urged the BCDA to proceed with the Competitive Challenge as agreed
upon. However, the BCDA terminated the Competitive Challenge altogether. Was there a
perfected contract?
Answer: Yes. There was a perfected contract. When SMLI submitted the first Unsolicited
Proposal to BCDA, the submission constituted an offer to undertake the development of the
subject property. BCDA then entered into negotiations with SMLI until the BCDA finally
accepted the terms of the final unsolicited proposal.
Their agreement was thereafter reduced into writing through the issuance of the Certification of
Successful Negotiations where the meeting of the parties minds was reflected. Then, to manifest
their assent to the terms thereof and their respective obligations, both parties affixed their
signatures thereon and had it notarized. (ELEMENT OF CONSENT)
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The cause of the agreement in the case at hand is their interest in the sale or acquisition and
development of the property and their undertaking to perform their respective obligations, among
others, as reflected in the Certificate and TOR issued by BCDA. When the BCDA Board issued
the Certification, it not only accepted SMLIs Unsolicited Proposal and declared SMLI eligible
to enter into the proposed JV activity. It also agreed to subject SMLIs Original Proposal to
Competitive Challenge pursuant to the NEDA JV Guidelines, which competitive challenge
process shall be immediately implemented following the TOR Volumes 1 and 2. Moreover, said
Certification provides that the BCDA shall, thus, commence the activities for the solicitation for
comparative proposals xxx on which date SMLI shall post the required Proposal Security xxx.
NATURE AND EFFECTS OF OBLIGATIONS (General Milling Corp. v. Sps. Ramos)
DEFAULT
Question: What are the requisites necessary for a finding of default?
Answer: There are three requisites necessary for a finding of default. First, the obligation is
demandable and liquidated; second, the debtor delays performance; and third, the creditor
judicially or extrajudicially requires the debtors performance.
KINDS OF CIVIL OBLIGATIONS (BPI vs. Sanchez, et al.)
RECIPROCAL OBLIGATION
Question: In a reciprocal obligation where one party failed to comply with his obligation, may
the other party rescind?
Answer: Yes. Article 1191 of the Civil Code states that rescission is available to a party in a
reciprocal obligation where one party fails to comply therewith.
EXTINGUSHMENT OF OBLIGATIONS
PAYMENT OR PERFORMANCE (Allied Banking v. Lim Sio Wan)
Question: Lim Sio Wan deposited with Allied Banking a money market placement. An
anonymous caller representing to be Lim Sio Wan requested the bank to pre-terminate the money
market placement and to issue a check representing the proceeds therefrom to one Deborah
Santos. Later, the real Lim Sio Wan demanded the proceeds of his deposits from Allied Banking.
Is the bank still obliged to pay Lim Sio Wan?
Answer: Yes. Payment made by the debtor to a wrong party does not extinguish the obligation as
to the creditor, if there is no fault or negligence which can be imputed to the latter. Even when
the debtor acted in utmost good faith and by mistake as to the person of his creditor, or through
error induced by the fraud of a third person, the payment to one who is not in fact his creditor, or
authorized to receive such payment, is void, except as provided in Article 1241.
WAIVER OF STRICT COMPLIANCE (Hanjin Heavy Industries v. Dynamic Planners)
Question: What are the elements for a finding that an obligee waived strict compliance of the
obligation from the obligor?
Answer: An obligee is deemed to have waived strict compliance by an obligor with an
obligation when the following elements are present:
(1) an intentional acceptance of the defective or incomplete performance;
(2) with actual knowledge of the incompleteness or defect; and
(3) under circumstances that would indicate an intention to consider the performance as complete
and renounce any claim arising from the defect.
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All elements are present. Hanjin knew that the subcontract works were not yet complete as there
were unresolved matters involving structural design deficiencies. Hanjin made no demand upon
Dynamic to finish its contractual undertaking. By operation of law, Hanjin is thus deemed to
have waived its right to claim any payment for expenses it incurred in completing the work. The
admission by Hanjin that after the April 2002 progress billings, it did not pay Dynamic for work
it had accomplished provides sufficient legal justification for not continuing with the work.
There is no legal basis for Hanjin to withhold payment of Dynamics retention money because
when it willfully took over the unfinished work, it in effect waived any and all of its rights to
hold Dynamic liable for any defects, deficiencies or unfinished work.
DEVIATION FROM AGREED MODE OF AGREEMENT (Benguet Corp. v. DENR)
Question: If the mode of payment was reflected in the contract between the parties, may the
obligor deviate therefrom and follow the customary mode of payment that the parties have
practiced in the past?
Answer: No. The RAWOP (agreement) itself provides for the mode of royalty payment by
Benguet. The fact that there was the previous practice whereby J.G. Realty picked-up the checks
from Benguet is unavailing. The mode of payment is embodied in a contract between the parties.
As such, the contract must be considered as the law between the parties and binding on both.
Thus, after J.G. Realty informed Benguet of the bank account where deposits of its royalties may
be made, Benguet had the obligation to deposit the checks. J.G. Realty had no obligation to
furnish Benguet with a Board Resolution considering that the RAWOP itself provided for such
payment scheme.
CONSIGNATION (B.E. San Diego v. Alzul)
Question: What are the elements of a valid consignation?
Answer: In order that consignation may be effective, the debtor must show that:
(1) there was a debt due;
(2) the consignation of the obligation had been made because the creditor to whom tender of
payment was made refused to accept it, or because s/he was absent or incapacitated, or because
several persons claimed to be entitled to receive the amount due or because the title to the
obligation had been lost;
(3) previous notice of the consignation had been given to the person interested in the
performance of the obligation;
(4) the amount due was placed at the disposal of the court; and
(5) after the consignation had been made, the person interested was notified of the action.
Respondent did not comply with the provisions of law particularly with the fourth and fifth
requirements specified above for a valid consignation. In her complaint for consignation and
specific performance, respondent only prayed that she be allowed to make the consignation
without placing or depositing the amount due at the disposal of the court of origin. Verily,
respondent made no valid consignation.
CONTRACTS (Sps. Albos v. Sps. Ambisan)
INTEREST RATE ON LOAN: UNCONSCIONABLE RATE
Question: Is the monthly interest rate of 5% unconscionable?
Answer: Yes. Imposing 5% monthly interest, whether compounded or simple, is unconscionable.
Even if there was such an agreement that interest will be compounded the 5% monthly rate, be it
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simple or compounded, written or verbal, is void for being too exorbitant, thus running afoul of
Article 1306 of the New Civil Code.
As case law instructs, the imposition of an unconscionable rate of interest on a money debt, even
if knowingly and voluntarily assumed, is immoral and unjust. It is tantamount to a repugnant
spoliation and an iniquitous deprivation of property, repulsive to the common sense of man. It
has no support in law, in principles of justice, or in the human conscience nor is there any reason
whatsoever which may justify such imposition as righteous and as one that may be sustained
within the sphere of public or private morals.
DEED OF SALE WITH MORTGAGE (P.L. Uy Realty Corporation v. ALS Management)
SALE WITH CONDITION
Question: In a Deed of Absolute Sale with Mortgage, the parties agreed that it is the sole
responsibility of the Vendor to clear the property of informal settlers/squatters and that the
Vendee is entitled to defer payment of the first 24% installment payments until the property had
been cleared. When the Vendee failed to pay the 2nd payment despite demands, the Vendor filed a
complaint against the Vendee. The trial court dismissed the case for being pre-mature as the
parties agreed that the Vendee may withhold payment unless the Vendor clears the property of
informal settlers. Was the trial court correct?
Answer: Yes. Art. 1306 of the Civil Code guarantees the freedom of parties to stipulate the terms
of their contract provided that they are not contrary to law, morals, good customs, public order,
or public policy. Thus, when the provisions of a contract are valid, the parties are bound by such
terms under the principle that a contract is the law between the parties.
Here, both parties knew for a fact that the property subject of their contract was occupied by
informal settlers, whose eviction would entail court actions that in turn, would require some
amount of time. They also knew that the length of time that would take to conclude such court
actions was not within their power to determine. Despite such knowledge, both parties still
agreed to the stipulation that the payment of the balance of the purchase price would be deferred
until the informal settlers are ejected. There was never any allegation that PLU was coerced into
signing the Deed of Sale with Mortgage or that its consent was in any way vitiated. PLU was
free to accept or decline such contracted provision. Thus, PLU cannot be allowed to renege on its
agreement. It is to be borne in mind that the facts show that the parties were fully aware that the
land described was occupied by squatters.
As the parties must have known that they could not take the law into their own hands, but must
resort to legal processes in evicting the squatters, they must have realized that the duration of the
suits to be brought would not be under their control nor could the same be determine in advance.
The conclusion is thus forced that the parties must have intended to defer the performance of the
obligations under the contract until the squatters were duly evicted.
EFFECT OF INADEQUACY OF CONSIDERATION (Cojuangco, Jr. vs. Republic)
Question: What is the effect of inadequacy of consideration?
Answer: Inadequacy of the consideration does not render a contract void under Article 1355 of
the Civil Code. Inadequacy of consideration does not vitiate a contract unless it is proven which
in the case at bar was not, that there was fraud, mistake or undue influence. While one may posit
that the PCA-Cojuangco Agreement puts PCA and the coconut farmers at a disadvantage, the
facts do not make out a clear case of violation of any law that will necessitate the recall of said
contract.
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A government agency, like the PCA, stoops down to level of an ordinary citizen when it enters
into a private transaction with private individuals. In this setting, PCA is bound by the law on
contracts and is bound to comply with the terms of the PCA-Cojuangco Agreement which is the
law between the parties. While consideration is usually in the form of money or property, it need
not be monetary. A consideration, in the legal sense of the word, is some right, interest, benefit,
or advantage conferred upon the promisor, to which he is otherwise not lawfully entitled, or any
detriment, prejudice, loss, or disadvantage suffered or undertaken by the promisee other than to
such as he is at the time of consent bound to suffer. The Court rules that the transfer of the
subject UCPB shares is clearly supported by valuable consideration.
KINDS OF CONTRACTS (Ordua vs. Fuentebella)
STATUTE OF FRAUDS
Question: Does the Statute of Frauds apply to contracts that have already been executed?
Answer: No. The Statute of Frauds expressed in Article 1403, par. 2 of the Civil Code applies
only to executory contracts, i.e. those where no performance has yet been made. Stated a bit
differently, the legal consequence of non-compliance with the Statute does not come into play
where the contract in question is completed, executed or partially consummated.
The Statute of Frauds, in context, provides that a contract for the sale of real property or of an
interest therein shall be unenforceable unless the sale or some note or memorandum thereof is in
writing and subscribed by the party or his agent. However, where the verbal contract of sale has
been partially executed through the partial payments made by one party duly received by the
vendor, as in the present case, the contract is taken out of the scope of the Statute. A contract that
infringes the Statute of Frauds is ratified by the acceptance of benefits under the contract.
SIMULATED SALE (Montesoro vs. Court of Appeals)
Question: What circumstances were considered by the court in this case in concluding that the
Deeds of Sale were simulated?
Answer: The antecedent facts, as borne by the records, strongly indicate the simulated character
of the sale covered by the deeds of absolute sale over Parcels F-1 (Exhibit C), F-2 (Exhibit D), F3, F-5, F-7, and F-8 (Exhibit E). As found below, Don Fabian never relinquished possession of
the covered properties during his lifetime. The first deed, Exhibit E, was executed on May 1,
1939; the second, Exhibit C, on May 10, 1939; and the third, Exhibit D, on September 24, 1939.
Soledad Monteroso-Cagampang, however, only took possession of the subject properties after
Don Fabians death in 1948 or nine years after contract execution. The gap, unexplained as it
were, makes for a strong case that the parties to the sale never intended to be bound thereby. The
more telling circumstance, however, is the fact that Perfecto had judicially sought the
amendment of the corresponding TCTs so that only the name of his wife, Soledad, shall be
inscribed as real party-in-interest on the Memorandum of Encumbrances at the back portion of
the titles. If only to stress the point, when the deeds were executed in 1939, Soledad and Perfecto
Cagampang, the notarizing officer, were already married. A property acquired during the
existence of a marriage is presumed conjugal. This postulate notwithstanding, Perfecto
Cagampang went out of his way to make it appear that the subject parcels of land were
effectively his wifes paraphernal properties. No explanation was given for this unusual move.
ESTOPPEL (Land Bank v. Ong)
Question: What are the elements of estoppel?
Answer: The elements of estoppel are:
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First, the actor who usually must have knowledge, notice or suspicion of the true facts,
communicates something to another in a misleading way, either by words, conduct or silence;
Second, the other in fact relies, and relies reasonably or justifiably, upon that communication;
Third, the other would be harmed materially if the actor is later permitted to assert any claim
inconsistent with his earlier conduct; and
Fourth, the actor knows, expects or foresees that the other would act upon the information given
or that a reasonable person in the actors position would expect or foresee such action.
EQUITABLE ESTOPPEL (Estate of Yujuico v. Republic)
Question: In 1974, Castro was declared the absolute owner of a parcel of land as against the
Republic which opposed its registration. Later, Castro sold the land to Yujuico. After almost three
decades, the Republic through the OSG filed a complaint for annulment and cancellation of title
and reversion against the Heirs of Jesus Yujuico over the said parcel of land. Should the land be
reverted to the State?
Answer: No. The lapse of almost three decades in filing the instant case, the inexplicable lack of
action of the Republic and the injury this would cause constrain us to rule for petitioners.
Equitable estoppel may be invoked against public authorities when as in this case, the lot was
already alienated to innocent buyers for value and the government did not undertake any act to
contest the title for an unreasonable length of time.
SALES
DOUBLE SALE (Cano v. Sps. Usi)
Question: What are the requisites of a double sale?
Answer: A double sale situation arises when the following requisites concur:
(a) The two (or more) sales transactions must constitute valid sales;
(b) The two (or more) sales transactions must pertain to exactly the same subject matter;
(c) The two (or more) buyers at odds over the rightful ownership of the subject matter must each
represent conflicting interests; and
(d) The two (or more) buyers at odds over the rightful ownership of the subject matter must each
have bought from the very same seller.
EQUITABLE MORTGAGE (Sps. Sollitarios v. Sps Jaque)
Question: What factors are considered by the court in ruling that the parties entered into an
equitable mortgage?
Answer: First, in determining whether a deed of absolute sale in form is a mortgage, the decisive
factor is the intention of the parties, as shown by all the surrounding circumstances. Moreover,
Article 1602 enumerates instances when a contract purporting to be an absolute sale is presumed
to be an equitable mortgage. Article 1602 (6) then provides that 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 then it is presumed to be an
equitable mortgage. This presumption finds support in the following:
(1) the testimony of Jaque and the documents he presented establish the existence of two loans;
and
(2) the testimonies of the parties reveal that they came to an agreement regarding payment
terms.

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The fact that the parties agreed on payment terms is inconsistent with the claim of Jaque that
when Spouses Solitarios executed the questioned deeds of sale they had no other intention but to
transfer ownership over the lot. Second, the Court held that a purported contract of sale where
the vendor remains in physical possession of the land, as lessee or otherwise, is an indicium of an
equitable mortgage. Retention by the vendor of the possession of the property is inconsistent
with the vendees acquisition of ownership under a true sale, because in the latter, the legal title
is immediately transferred to the vendee. Lastly, it is further established that when doubt exists as
to the true nature of the parties transaction, courts must construe such transaction purporting to
be a sale as an equitable mortgage, as the latter involves a lesser transmission of rights and
interests over the property. It is contrary to human experience that a person would easily part
with his property after incurring a debt. Rather, he would first look for means to settle his
obligations.
PARTNERSHIP, AGENCY AND TRUSTS
POWERS OF AN AGENT (Pacific Rehouse v. EIB)
Question: Does the act of an agent done outside the scope of his authority bind the principle?
Answer: No. An agent must act within the scope of his authority. An act beyond the scope of
authority given does not bind the principal. Under the agreement between the plaintiffs and the
defendant, the right to sell or dispose of the properties of petitioners by EIB is unequivocally
confined to payment of the obligations and liabilities of petitioners to EIB and none other. Thus,
when EIB sold the DMCI shares to buy back the KKP shares, EIB acted beyond the ambit of its
authority as agent. Such act is surely illegal and does not bind petitioners as principals of EIB.
EXPRESS VS. IMPLIED AGENCY (Filipinas Systems, Inc. v. MRT)
Question: Can one be bound by a contract entered into by another person?
Answer: While the general rule is one cannot be bound to a contract entered into by another
person, there are exceptions, such as when the contracting person was authorized to enter a
contract on behalf of another, or when such contract was ratified.
Article 1317 of the New Civil Code provides that a contract entered into in the name of another
by one who has no authority or legal representation, or who has acted beyond his powers shall be
unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has
been executed, before it is revoked by the other contracting party.
David Sampson was clearly authorized to issue change orders as he was in charge of the daily
activities of the project. David Sampson was the representative or agent of PIJV who was
engaged as the Project Manager by MRTDC. Being clearly authorized, the acts of David
Sampson shall bind MRTDC and therefore, it shall be held liable for the early completion bonus.
COMPROMISE (Adriatico Consortium v. Land Bank)
Question: What is a compromise agreement and how should it be construed?
Answer: A compromise is a contract whereby the parties, by making reciprocal concessions,
avoid a litigation or put an end to one already commenced. In the construction or interpretation
of a compromise agreement, the Court is guided by the fundamental and cardinal rule that the
intention of the parties is to be ascertained from the contract and effect should be given to that
intention. Likewise, it must be construed so as to give effect to all the provisions of the contract.
Evidently, had the parties intended to limit the application of Sec. 5 to legal actions only, they

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would have written a specific word or phrase to pertain to legal actions and not just the word
actions alone.
A contract must be interpreted from the language of the contract itself according to its plain and
ordinary meaning. In the case at bar, the word action should be defined according to its plain
and ordinary meaning, i.e., as the process of doing something; conduct or behavior; a thing done.
It is not limited to actions before a court or a judicial proceeding. Therefore, the only logical
conclusion Furthermore, Sec. 5 of the Partial Compromise Agreement speaks of cooperation
between the parties to determine the person or persons ultimately liable. By selling the
receivables, Land Bank did not cooperate with petitioners. Thus, it can be safely concluded that
the act of Land Bank is a clear and patent violation of Sec. 5 of the Partial Compromise
Agreement.
JUDGMENT BASED COMPROMISE AGREEMENT (Gaisano vs. Akol)
Question: Can judgment be validly rendered upon a compromise agreement?
Answer: Yes. A compromise agreement is a contract whereby the parties make reciprocal
concessions, avoid litigation, or put an end to one already commenced. Its validity depends on its
fulfillment of the requisites and principles of contracts dictated by law; its terms and conditions
being not contrary to law, morals, good customs, public policy and public order. A scrutiny of the
aforequoted agreement reveals it is a compromise agreement sanctioned under Article 2028 of
the Civil Code. Its terms and conditions are not contrary to law, morals, good customs, public
policy and public order. Hence, judgment can be validly rendered thereon.
CREDIT TRANSACTIONS
CONTRACT OF LOAN (Sps. Albos v. Sps. Embisan)
Question: For failure of the debtor to pay despite demand by the creditor, the latter imposed a
condition that the previously agreed monthly 5% interest will be compounded. However this
agreement was not reduced in writing. Is the imposition of interest valid?
Answer: No. The compounding of interest should be in writing. As mandated by the foregoing
provision, payment of monetary interest shall be due only if:
(1) there was an express stipulation for the payment of interest; and
(2) the agreement for such payment was reduced in writing.
Thus, the collection of interest without any stipulation thereof in writing is prohibited by law.
Given the circumstances, the first requirementthat there be an express stipulation for the
payment of interestis not sufficiently complied with, for purposes of imposing compounded
interest on the loan. The requirement does not only entail reducing in writing the interest rate to
be earned but also the manner of earning the same, if it is to be compounded. Failure to specify
the manner of earning interest, however, shall not automatically render the stipulation imposing
the interest rate void since it is readily apparent from the contract itself that the parties herein
agreed for the loan to bear interest. Instead, in default of any stipulation on the manner of earning
interest, simple interest shall accrue.
Question: What is the rule in the interpretation of ambiguous contract?
Answer: Settled is the rule that ambiguities in a contract are interpreted against the party that
caused the ambiguity. Any ambiguity in a contract whose terms are susceptible of different
interpretations must be read against the party who drafted it. In the extant case, respondent
spouses, having imposed, unilaterally at that, the compounded interest rate, had the correlative
duty of clarifying and reducing in writing how the said interest shall be earned. Having failed to
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do so, the silence of the agreement on the manner of earning interest is a valid argument for
prohibiting them from charging interest at a compounded rate.
INTEREST ON LOAN (Pua v. Sps. Tiong)
Question: What are the requisites before interest on loans or forbearance of money may be
demanded?
Answer: The collection of interest in loans or forbearance of money is allowed only when these
two conditions concur:
(1) there was an express stipulation for the payment of interest; and
(2) the agreement for the payment of the interest was reduced in writing.
Absent any of these two conditions, the money debtor cannot be made liable for interest.
UNCONSCIONABLE INTEREST (Menchavez v. Bermudez)
Question: The debtor willingly agreed to pay 5% monthly interest or 60% per annum with his
creditor. Is the stipulation valid?
Answer: The 5% per month interest rate is excessive, iniquitous and unconscionable. The
Statement of Account prepared by Menchavez showed that Bermudez has already paid P925,000,
P425,000 over the P500,000 loan. The original obligation of PhP 500,000 had already been
satisfied, and the PhP 425,000 would be treated as interest paid, even at the iniquitous rate of
60% per annum. Parties may be free to contract and stipulates as they see fit, but that is not an
absolute freedom. Art. 1306 of the Civil Code provides. "The contracting parties may establish
such stipulations, clauses, terms and conditions as they may deem convenient, provided they are
not contrary to law, morals, good customs, public order, or public policy." While petitioner harps
on the voluntariness with which the parties agreed upon the 5% per month interest rate,
voluntariness does not make the stipulation on interest valid. The 5% per month, or 60% per
annum, rate of interest is, indeed, iniquitous, and must be stricken down. Petitioner has been
sufficiently compensated for the loan and the interest earned, and cannot be allowed to further
recover on an interest rate which is unconscionable. Since the stipulation on the interest rate is
void, it is as if there was no express contract on said interest rate. Hence, courts may reduce the
interest rate as reason and equity demand.
REAL ESTATE MORTGAGE (PNB v. Sps. Alejandro)
Question: May a mortgagor whose property was foreclosed claim that the mortgage constituted
was void for alleged lack of ownership over the mortgage properties?
Answer: No. Respondents act of entering into the mortgage contract with petitioner, benefiting
through the receipt of the loaned amount, defaulting in payment of the loan, letting the property
be foreclosed, failing to redeem the property within the redemption period, and thereafter
insisting that the mortgage is void, cannot be countenanced. Actions of this kind, bearing a hint
of fraud on the part of mortgagors, should not be tolerated, for they go against the basic principle
that no person shall unjustly enrich himself or herself at the expense of another and that parties in
a juridical relation must act with justice, honesty, and good faith in dealing with one another.
Respondents are estopped from contesting the validity of the mortgage, absent any proof that
PNB coerced or fraudulently induced respondents into posting the lot as collateral.
LAND TITLES AND DEEDS
TORENS SYSTEM (Heirs of Labanon v. Heirs of Labanon)
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Question: May the owner of a property, after the lapse of one year, question the unlawful
registration under the Torrens system of his property in the name of another?
Answer: Yes. While it is true that Section 32 of PD 1529 provides that the decree of registration
becomes incontrovertible after a year, it does not altogether deprive an aggrieved party of a
remedy in law. Section 32 of PD 1529 merely precludes the reopening of the registration
proceedings for titles covered by the Torrens System, but does not foreclose other remedies for
the reconveyance of the property to its rightful owner.
CLASSIFICATION OF LANDS (Almagro v. Sps. Amaya)
Question: What kind of agricultural lands are covered by PD 27?
Answer: PD 27 encompasses only rice and corn land, i.e., agricultural lands primarily devoted to
rice and corn under a system of sharecrop or lease-tenancy. In the instant case, since the
landholdings cultivated by respondents are primarily devoted to vegetable production, it is
definitely outside the coverage, and necessarily cannot properly be placed under the umbrella, of
PD 27.
The identification and classification of lands and qualification of farmer-beneficiaries are factual
determination performed by government officials and personnel with expertise in the line of
work they are doing. Their findings, conclusions/recommendations and final actions on the
matter, after thorough investigation and evaluation, have the presumption of regularity and
correctness.
DETERMINATION OF VALUATION OF LANDS (Land Bank v. Pagayatan)
Question: Is the filing in court of a Petition for Summary Determination of Just Compensation
proper when the DAR has not come up with initial valuation?
Answer: No. It is only after the DAR has made its final determination of the initial valuation
of the land that the landowner may resort to the judicial determination of the just compensation
for the land.
ORIGINAL REGISTRATION (Republic v. San Mateo)
Question: What are the requirements for original registration under the Property Registration
Decree to establish that a land is alienable and disposable?
Answer: To establish that the land subject of the application is alienable and disposable public
land, the general rule remains: all applications for original registration under the Property
Registration Decree must include both (1) a CENRO or PENRO certification and (2) a certified
true copy of the original classification made by the DENR Secretary.
As an exception, however, the courts in their sound discretion and based solely on the evidence
presented on record may approve the application, pro hac vice, on the ground of substantial
compliance showing that there has been a positive act of government to show the nature and
character of the land and an absence of effective opposition from the government. This exception
shall only apply to applications for registration currently pending before the trial court prior to
this decision and shall be inapplicable to all future applications.
Question: Is a CENRO certification adequate for the purpose of classifying the land as alienable
and disposable?
Answer: No. A CENRO certification that a certain property is alienable, without the
corresponding proof that the DENR Secretary had approved such certification, is insufficient to
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support a petition for registration of land. Both certification and approval are required to be
presented as proofs that the land is alienable. Otherwise, the petition for registration must be
denied.
CERTIFICATE OF LAND TITLE (Del Castillo vs. Orciga, et al)
Question: What is a Certificate of Land Transfer (CLT)?
Answer: A Certificate of Land Transfer (CLT) is a document issued to a tenant-farmer, which
proves inchoate ownership of an agricultural land primarily devoted to rice and corn production.
It is issued in order for the tenant-farmer to acquire the land. This certificate prescribes the terms
and conditions of ownership over said land and likewise describes the landholding its area and
its location. A CLT is the provisional title of ownership over the landholding while the lot owner
is awaiting full payment of the lands value or for as long as the beneficiary is an "amortizing
owner."
Question: How is land transfer effected under PD No. 27?
Answer: Land transfer under PD No. 27 is effected in two (2) stages (1) issuance of a CLT to a
farmer-beneficiary as soon as DAR transfers the landholding to the farmer-beneficiary in
recognition that said person is a "deemed owner"; and (2) issuance of an Emancipation Patent as
proof of full ownership of the landholding upon full payment of the annual amortizations or lease
rentals by the farmer or beneficiary.
SUBSEQUENT REGISTRATION (Lee v. Bangkok Bank)
Question: If a judgment involving a land was not annotated on its title, will the presumption of
fraud under Article 1387 still apply?
Answer: No. While a judgment was made against the spouses Lee in favor of SBC, this,
however, was not annotated on the titles of the subject properties. In fact, there is no showing
that the judgment has ever been annotated on the titles of the subject properties. As established in
the facts, there were only two annotations at the back of the titles of the Antipolo properties:
first, the REM executed in favor of Asiatrust; and second, the writ of preliminary attachment in
favor of Bangkok Bank. Considering that the earlier SBC judgment or attachment was not, and
in fact never was, annotated on the titles of the subject Antipolo properties, prior to the execution
of the REM, the presumption of fraud under Art. 1387 of the Code clearly cannot apply.
Furthermore, a careful reading of Art. 1387 of the Code vis--vis its Art. 1385 would plainly
show that in allowing rescission in case of an alienation by onerous title, the third person who
received the property conveyed should likewise be a party to the fraud.
As a general rule, whether the person, against whom a judgment was made or some writ of
attachment was issued, acted with or without fraud, so long as the third person who is in legal
possession of the property in question did not act with fraud and in bad faith, an action for
rescission cannot prosper. Asiatrust, being a third person in good faith, should not be
automatically presumed to have acted fraudulently by the mere execution of the REM over the
subject Antipolo properties, there being no evidence of fraud or bad faith.
INNOCENT PURCHASER FOR VALUE (Locsin v. Hizon)
Question: Who is an innocent purchaser for value?
Answer: An innocent purchaser for value is one who buys the property of another without notice
that some other person has a right to or interest in it, and who pays a full and fair price at the
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time of the purchase or before receiving any notice of another persons claim. In this case,
Bernardo is not an innocent purchaser for value. Bernardo knew that Bolos never acquired
possession over the lot. In his direct testimony, Bernardo admitted that he knew of the prior
compromise agreement entered by Locsin with Aceron which recognized Locsin as the registered
owner of the land. Having knowledge of the foregoing facts, Bernardo and Carlos should have
been impelled to investigate the reason behind the arrangement. If Bolos already acquired
ownership of the property as early as 1979, it should have been her who entered into a
compromise agreement with Aceron in 1993, not her predecessor-in-interest, Locsin, who,
theoretically, had already divested herself of ownership thereof.
The transfer to Spouses Guevara was also suspicious since there was no deed evidencing the
sale. It appeared that the mortgage was a mere ploy to make it appear that the Sps. Guevara
exercised acts of dominion over the subject property when in fact the Spouses had lack of
interest in protecting themselves in the case. The circumstances, taken altogether, strongly
indicate that Carlos and the spouses Guevara failed to exercise the necessary level of caution
expected of a bona fide buyer. An innocent purchaser for value is one who buys the property of
another without notice that some other person has a right to or interest in it, and who pays a full
and fair price at the time of the purchase or before receiving any notice of another persons
claim.
RECONSTITUTION OF TITLE (Republic vs. Heirs of Sanchez)
Question: May the title of an unregistered land be reconstituted?
Answer: No. Before a certificate of title which has been lost or destroyed may be reconstituted,
it must first be proved by the claimants that said certificate of title was still in force at the time it
was lost or destroyed, among others. The Court agrees with the trial court that no clear and
convincing proof has been adduced that OCT No. 45361 was issued by virtue of Decree No.
418121. The Decision dated March 21, 1930 and the Registrars Index Card containing the
notation on OCT No. 45361 do not cite nor mention that Decree No. 418121 was issued to
support the issuance of OCT No. 45361. At this point, it is well to emphasize that a petition for
reconstitution of lost or destroyed OCT requires, as a condition precedent, that an OCT has
indeed been issued, for obvious reasons. Assuming arguendo that respondents were able to
sufficiently prove the existence of OCT No. 45361 considering the totality of the evidence
presented, the Court finds that reconstitution thereof is still not warranted, applying Section 15 of
R.A. No. 26. Here, the mere existence of TCT No. 10202, later cancelled by TCT No. 44365,
which, in turn, was superseded by TCT No. 80792. It clearly shows that the OCT which
respondents seek to be reconstituted is no longer in force, rendering the procedure, if granted, a
mere superfluity.
EVIDENCE TO SUPPORT RECONSTITUTION OF TITLE (Pascua v. Republic)
Question: What are the sources of reconstituting an original certificate of title?
Answer: Sec. 2 of RA 26 provides that original certificates of title shall be reconstituted from
such of the sources hereunder enumerated as may be available in the following order:
(a) The owners duplicate of the certificate of title;
(b) The co-owners, mortgagees, or lessees duplicate of the certificate of title;
(c) A certified copy of the certificate of title, previously issued by the register of deeds or by a
legal custodian thereof;

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(d) An authenticated copy of the decree of registration or patent, as the case may be pursuant to
which the original certificate of title was issued;
(e) A document, on file in the Registry of Deeds by which the property, the description of which
is given in said document, is mortgaged, leased or encumbered, or an authenticated copy of said
document showing that its original has been registered; and
(f) Any other document which, in the judgment of the court, is sufficient and
proper basis for reconstituting the lost or destroyed certificate of title.
RECONVEYANCE (Aqualab Phils, Inc. v. Heirs of Pagobo)
ACTION FOR RECONVEYANCE BASED ON FRAUD
Question: Is there a prescriptive period to file an action for annulment of title or reconveyance
based on fraud if the plaintiff is in possession of the property?
Answer: None. An action for annulment of title or reconveyance based on fraud is
imprescriptible where the plaintiff is in possession of the property subject of the acts. Moreover,
the defense of indefeasibility of a Torrens title does not extend to a transferee who takes it with
notice of a flaw in the title of his transferor.
PRESCRIPTION OF ACTION FOR RECONVEYANCE (Pedrano v. Heirs of Pedrano)
ACTION FOR RECONVEYANCE BASED ON IMPLIED TRUST
Question: When does an action for reconveyance of a parcel of land based on implied trust
prescribe?
Answer: An action for the reconveyance of a parcel of land based on implied or constructive
trust prescribes in 10 years, the point of reference being the date of registration of the deed or the
date of the issuance of the certificate of title of the property.
CONFIRMATION OF IMPERFECT TITLE (Republic v. Iglesio ni Cristo)
Question: In an application for judicial confirmation of imperfect title, should possession be
reckoned from the time the subject lot was classified as alienable and disposable?
Answer: No. In Heirs of Mario Malabanan v. Republic, the Court resolved the conflicting
rulings of the case of Herbieto and Naguit. The correct interpretation of Sec. 14(1) of PD 1529
was the principle adopted in the Naguit ruling. PD 1529 merely requires the property sought to
be registered as already alienable and disposable at the time the application for registration of
title is filed. The required possession is not reckoned from the time of the declaration of the
property as alienable and disposable. Since Section 48(b) merely requires possession since June
12, 1945 and does not require that the lands should have been alienable and disposable during
the entire period of possession, the possessor is entitled to secure judicial confirmation of his title
thereto as soon as it is declared alienable and disposable.
HOMESTEAD PATENT (Taguinod v. Court of Appeals)
Question: Are the rights of a holder of a homestead patent superior over the rights of tenants
under the Agrarian Reform Law?
Answer: Yes. Settled in this jurisdiction is the rule that the rights of a holder of a homestead
patent are superior over the rights of the tenants guaranteed by the Agrarian Reform Law, as
enunciated in Alita: We agree with the petitioners in saying that P.D. 27 decreeing the
emancipation of tenants from the bondage of the soil and transferring to them ownership of the
land they till is a sweeping social legislation, a remedial measure promulgated pursuant to the
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social justice precepts of the Constitution. However, such contention cannot be invoked to defeat
the very purpose of the enactment of the Public Land Act or Commonwealth Act No. 141. Thus,
The Homestead Act has been enacted for the welfare and protection of the poor. The law gives a
needy citizen a piece of land where he may build a modest house for himself and family and
plant what is necessary for subsistence and for the satisfaction of lifes other needs. The right of
the citizens to their homes and to the things necessary for their subsistence is as vital as the right
to life itself. They have a right to live with a certain degree of comfort as x x x human beings,
and the State which looks after the welfare of the peoples happiness is under a duty to safeguard
the satisfaction of this vital right." (Patricio v. Bayog, 112 SCRA 45)
EFFECT OF DEATH ON APPLICATION FOR A PATENT (Monteroso v. Court of
Appeals)
Question: If the applicant of a homestead patent dies before the issuance of the patent or the
final grant of the land, may his or her widow succeed in his rights and obligations thereto?
Answer: No. The deceased applicant shall be succeeded in his rights and obligations with
respect to the land applied for or granted or issued by his heirs in law, who shall be entitled to
have issued to them the patent or final concession if they show that they have complied with the
requirements therefor, and who shall be subrogated in all his rights and obligations for the
purposes of the law granting homestead rights.
Assayed against the foregoing undisputed facts in the light of the aforequoted Sec. 105 of CA
141, the heirs of Don Fabian are entitled to Parcel S-1. Said Sec. 105 has been interpreted in
Soliman v. Icdang as having abrogated the right of the widow of a deceased homestead applicant
to secure under Sec. 3 of Act No. 926, otherwise known as the Public Land Act of 1903, a patent
in her own name, thus:[W]e should bear in mind that, although Adolfo Icdang was married to
plaintiff when he filed the homestead application, an applicant may be said to have acquired a
vested right over a homestead only by the presentation of the final proof and its approval by the
Director of Lands. (Ingara vs. Ramelo, 107 Phil., 498; Balboa vs. Farrales, 51 Phil., 498;
Republic vs. Diamon, 97 Phil., 838.)
NOTICE OF LIS PENDENS (Francisco Motors v. Court of Appeals)
Question: What is the effect of filing a notice of lis pendens?
Answer: The Court held that the filing of a notice of lis pendens in effect (1) keeps the subject
matter of the litigation within the power of the court until the entry of the final judgment so as to
prevent the defeat of the latter by successive alienations; and (2) binds the purchaser of the land
subject of the litigation to the judgment or decree that will be promulgated there on whether such
a purchaser is a bona fide purchaser or not; but (3) does not create a non-existent right or lien.
Question: What is the effect of a cancellation of the annotated notice of lis pendens?
Answer: The cancellation of a notice of pendency terminates the effects of such notice; thus, the
buyers of the property cannot be considered transferees pendente lite and purchasers in bad faith.
Petitioner FMC bought the property pending appeal. The title carried no notice of lis pendens
and the private respondent did not cause the reannotation of or the attorneys lien. Thus,
petitioner FMC could not be considered a transferee pendente lite and buyer in bad faith.
REDEMPTION (Iligan Bay v. Dy)
Question: Define Redemption.
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Answer: Redemption has been defined as "the right of a debtor, and sometimes of a debtor's
other creditors, to repurchase from a buyer at a forced sale, property of the debtor that was seized
and sold in satisfaction of a judgment or other claim against the debtor, which right is usually
limited to forced sale of real property."
The Court has established in jurisprudence that in cases involving redemption, the law protects
the original owner. It is the policy of the law to aid rather than to defeat the owner's right.
Therefore, "redemption should be looked upon with favor and where no injury will follow, a
liberal construction will be given to our redemption laws, specifically on the exercise of the right
to redeem." As provided in Sec. 78 of PD 464, the redemption price should consist of: (1) the
total amount of taxes and penalties due up to the date of redemption, (2) the costs of sale, and (3)
the interest at the rate of twenty per centum (20%) on the purchase price
ACQUISITIVE PRESCRIPTION (Monteroso v. Court of Appeals)
Question: May acquisitive prescription set in against a compulsory heir?
Answer: As a matter of law, acquisitive prescription does not apply nor set in against
compulsory heirs insofar as their pro-indiviso share or legitime is concerned, unless said heirs
repudiate their share.
Question: May acquisitive prescription set in against a co-owner?
Answer: The general rule is that prescription does not run against a co-owner or co-heir. The
only exception to the imprescriptibility of an action for partition against a co-owner is when a coowner repudiates the co-ownership.
Acquisitive prescription, however, may still set in favor of a co-owner, where there exists a clear
repudiation of the co-ownership, and the co-owners are apprised of the claim of adverse and
exclusive ownership.
EXEMPLARY OR CORRECTIVE DAMAGES (People vs. Dela Cruz)
Question: What kinds of indemnity may be awarded to the heirs of a victim of murder?
Answer: When as a consequence of the criminal act death ensues, the following damages may
be awarded: (1) civil indemnity ex delicto for the death of the victim; (2) actual or compensatory
damages; (3) moral damages, and (4) exemplary damages.
Civil indemnity is mandatory and granted to the heirs of the victim without need of proof other
than the commission of the crime.
Question: What factors may affect the award of damages?
Answer: The award of civil indemnity of PhP 50,000 is increased to PhP 75,000 in view of the
ruling that the crime is murder qualified by the aggravating circumstances of treachery and
evident premeditation. Said crime is a heinous crime under Republic Act 7659 punishable by
death but now reduced to reclusion perpetua by virtue of RA 9346, which prohibits the
imposition of death penalty. The deletion of the award of moral damages was erroneous. Moral
damages are mandatory in cases of murder, without need of allegation and proof other than the
death of the victim. The award of PhP 75,000 as moral damages is consequently in order and in
accordance with prevailing jurisprudence.
The award of exemplary damages is proper under Article 2230 of the Civil Code, since the
killing was attended by the qualifying circumstance of treachery.

PART II: Concepts, General Principles and Landmark Rulings

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Preliminary Title:
Effect and Application of Laws
General rule when a law takes effect: 15 days after publication in a newspaper of general
circulation(Basa v. Mercado, 61 Phil. 636) ; except when the law provides another date of
effectivity; remember that a law which produces a burden on an individual must be published to
make liable (Lara v. Del Rosario, 154); even during the period of Martial Law, S.C. required
publication of issuances of President Marcos directives (Tanada v. Tuvera, 1985);interpretative
in nature, internal rules (CIR v. Lhullier, 2003 - when administrative agency goes beyond merely
providing for a means for facilitating transactions but substantially increases the burden on the
affected party, then it is no longer covered) and matters which affect reassignment and movement
of personnel need not be published(exceptions cited in Tanada v. Tuvera); Municipal ordinances
shall be governed by the Local Government Code (Hagonoy Market Vendors Assn v. Mun of
Hagonay, 2002 this is the exception to the rule on publication in newspaper of general
circulation and Official Gazette)
Please note:
Nagkakaisang Maralita ng Sitio Masigasing, Inc. v. Military Shrine Services- PVAO (June
2013): The Court held that the publication must be in full or it is no publication at all since its
purpose is to inform the public of the contents of the laws. Without publication, the note never
had any legal force and effect.
Lim v. DBP (July 1, 2013) The Court held that unless the parties stipulate, personal notice to
the mortgagor in extrajudicial foreclosure proceedings is not necessary because Section 3 of Act
3135 only requires the posting of the notice of sale in three public places and the publication of
that notice in a newspaper of general circulation.
What is a newspaper of general circulation?
1. It is published for dissemination of local news and general information.
2. It has bonafide subscription list of paying subscribers
3. It is published at regular intervals. (Newspapers of this nature are normally accredited
by the courts)
4. It is not a newspaper devoted to the interests or published for entertainment of a
particular class, profession, trade, calling, race or religious denomination.
Waiver of Rights (Article 6) to be valid there must be:
1. A vested right
2. A voluntary relinquishment of such vested right
3. The person waiving must know of the existence of his right
General Rule: It is not possible to waive rights and obligations except:
1. When authorized by law (Read Articles 488 and 662 of the Civil Code)
2. When authorized by the holder of the correlative right
Please check distinction between substitute parental authority and special parental authority
Liability of schools for acts done by students under the Civil Code versus those covered under
the Family Code.

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Conflict of Laws: Take note of the procedure on how a foreign judgment can be recognized in
Philippine jurisdiction; Review Article 26; study the effects of mixed marriages and the adoption
of a Filipino child by aliens (Read R.A. 8043).
Fujiki v. Marinay, June 26, 2013: The Court held that the Rule on Declaration of Absolute
Nullity of Void Marriages and Annulment of Voidable Marriages (A.M. No. 02-11-10-SC) does
not apply in a petition to recognize a foreign judgment relating to the status of a marriage where
one of the parties is a citizen of a foreign country. Moreover, in Juliano-Llave v. Republic, this
Court held that the rule in A.M. No. 02-11-10-SC that only the husband or wife can file a
declaration of nullity or annulment of marriage "does not apply if the reason behind the petition
is bigamy."
The Court further said that for Philippine courts to recognize a foreign judgment relating to the
status of a marriage where one of the parties is a citizen of a foreign country, the petitioner only
needs to prove the foreign judgment as a fact under the Rules of Court. To be more specific, a
copy of the foreign judgment may be admitted in evidence and proven as a fact under Rule 132,
Sections 24 and 25, in relation to Rule 39, Section 48(b) of the Rules of Court. Petitioner may
prove the Japanese Family Court judgment through (1) an official publication or (2) a
certification or copy attested by the officer who has custody of the judgment.
Roehr v. Rodriguez (2003): Divorce decrees obtained in foreign countries by foreigners married
to Filipino citizens are recognizable in our jurisdiction but the legal effects thereof custody,
care and support of children must still be determined by Philippine courts.
Van Dorn v. Romillo (1985): Owing to the nationality principle embodied in Article 15 of the
Civil Code, only Philippine nationals are covered by the policy against absolute divorces the
same being considered contrary to our concept of public police and morality. However, aliens
may obtain divorces abroad, which may be recognized in the Philippines, provided they are valid
according to their national law.
Check the facts presented in the question and take note of the effectivity of the Family
Code as the situation may call for a different ruling if marriage took place prior to the
effectivity.
Human Relations
Human Relations While there are only three (3) provisions under this topic, it is a staple
question in bar examinations. Anticipate a question which may involve a situation which may
raise issues related to differences of religion or cultural practice which may affect public morals.
Abuse of Right
California Clothing, Inc.et al. v. Quinones (October 23, 2013): The Court held that in the
sphere of our law on human relations, the victim of a wrongful act or omission, whether done
willfully or negligently, is not left without any remedy or recourse to obtain relief for the damage
or injury he sustained. Incorporated into our civil law are not only principles of equity but also
universal moral precepts which are designed to indicate certain norms that spring from the
fountain of good conscience and which are meant to serve as guides for human conduct. First of
these fundamental precepts is the principle commonly known as "abuse of rights" under Article
19 of the Civil Code. It provides that Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due and observe honesty and good
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faith."x x x The elements of abuse of rights are as follows: (1) there is a legal right or duty; (2)
which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another.
Under the abuse of rights principle found in Article 19 of the Civil Code, a person must, in the
exercise of legal right or duty, act in good faith. He would be liable if he instead acted in bad
faith, with intent to prejudice another. Good faith refers to the state of mind which is manifested
by the acts of the individual concerned. It consists of the intention to abstain from taking an
unconscionable and unscrupulous advantage of another.35 Malice or bad faith, on the other hand,
implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral
obliquity.
Compare and contrast:
Shookat v. C.A. and Hermosisima v. C.A.: Breach of promise to marry is not actionable.
Pe v. Pe and Wassmer v. Velez: Breach of promise to marry coupled with some positive act or
event can make the party liable for damages.
Unjust Enrichment
Rivelisa Realty v. First sta. Ana Builders, Corp., January, 2014): Case law instructs that under
the principle of quantum meruit, a contractor is allowed to recover the reasonable value of the
thing or services rendered despite the lack of a written contract, in order to avoid unjust
enrichment. Quantum meruit means that, in an action for work and labor, payment shall be made
in such amount as the plaintiff reasonably deserves. The measure of recovery should relate to the
reasonable value of the services performed because the principle aims to prevent undue
enrichment based on the equitable postulate that it is unjust for a person to retain any benefit
without paying for it
Gonzalo v. Tarnate, Jr. (January 15, 2014): Unjust enrichment exists, according to Hulst v. PR
Builders, Inc., "when a person unjustly retains a benefit at the loss of another, or when a person
retains money or property of another against the fundamental principles of justice, equity and
good conscience." The prevention of unjust enrichment is a recognized public policy of the State,
for Article 22 of the Civil Code explicitly provides that "[e]very person who through an act of
performance by another, or any other means, acquires or comes into possession of something at
the expense of the latter without just or legal ground, shall return the same to him." It is well to
note that Article 22 "is part of the chapter of the Civil Code on Human Relations, the provisions
of which were formulated as basic principles to be observed for the rightful relationship between
human beings and for the stability of the social order; designed to indicate certain norms that
spring from the fountain of good conscience; guides for human conduct that should run as golden
threads through society to the end that law may approach its supreme ideal which is the sway and
dominance of justice."
Locsin III v. Mekeni Food Corp., December 2013): There is unjust enrichment when a person
unjustly retains a benefit to the loss of another, or when a person retains money or property of
another against the fundamental principles of justice, equity and good conscience. The principle
of unjust enrichment requires two conditions: (1) that a person is benefited without a valid basis
or justification, and (2) that such benefit is derived at the expense of another.
Note: While Article 36 on Prejudicial Question has been excluded, there might be a
possibility that facts presented may call application of the rules.
Review elements of prejudicial question
When asked about precedence of a prejudicial question,
1. Immediately determine if the two cases are criminal and civil in nature;
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2. Filing of civil case prior to criminal case will allow suspension of criminal proceedings
3. Determine the elements of the offense committed in the criminal case
4. Review the reliefs sought in the civil case, if the case is decided in favor of the accused, would
it have any effect on the elements of the crime.
If civil case will have an effect on the elements of the crime, then there is a prejudicial
question. If none, then there is no prejudicial question. (Can be asked in Criminal Law)
Book I Persons
Capacity to Act:
Even if one has juridical capacity, the capacity to act is restricted and if one has a capacity
to act; it can enter into a juridical relationship.
Incapacity: natural (minority, insanity, deaf-mute, impotency); and civil (civil interdiction,
absence, insolvency, family relations, domicile)
Formalities of Marriage Review the requirements prior to celebration of marriage, the
solemnities of marriage and registration of act of marriage. Relate the vows of marriage with the
obligations under the Civil Code and constitutional protection of the family as basic unit of
society. Anticipate a question on property relations of the spouses in the event no pre-nuptial
agreement is executed.
Macua vda de Avenido v. Tecla Hoybia Avenido, January 22, 2014: While a marriage certificate
is considered the primary evidence of a marital union, it is not regarded as the sole and exclusive
evidence of marriage. Jurisprudence teaches that the fact of marriage may be proven by relevant
evidence other than the marriage certificate. Hence, even a persons birth certificate may be
recognized as competent evidence of the marriage between his parents. In the present case, due
execution was established by the testimonies of Adela Pilapil, who was present during the
marriage ceremony, and of petitioner herself as a party to the event. The subsequent loss was
shown by the testimony and the affidavit of the officiating priest, Monsignor Yllana, as relevant,
competent and admissible evidence. Since the due execution and the loss of the marriage
contract were clearly shown by the evidence presented, secondary evidencetestimonial and
documentarymay be admitted to prove the fact of marriage.
Republic v. Albios, October 16, 2013: Under Article 2 of the Family Code, for consent to be
valid, it must be (1) freely given and (2) made in the presence of a solemnizing officer. A "freely
given" consent requires that the contracting parties willingly and deliberately enter into the
marriage. Consent must be real in the sense that it is not vitiated nor rendered defective by any of
the vices of consent under Articles45 and 46 of the Family Code, such as fraud, force,
intimidation, and undue influence. Consent must also be conscious or intelligent, in that the
parties must be capable of intelligently understanding the nature of, and both the beneficial or
unfavorable consequences of their act. Their understanding should not be affected by insanity,
intoxication, drugs, or hypnotism.
The avowed purpose of marriage under Article 1 of the Family Code is for the couple to establish
a conjugal and family life. The possibility that the parties in a marriage might have no real
intention to establish a life together is, however, insufficient to nullify a marriage freely entered
into in accordance with law. The same Article 1 provides that the nature, consequences, and
incidents of marriage are governed by law and not subject to stipulation. A marriage may, thus,
only be declared void or voidable under the grounds provided by law. There is no law that
declares a marriage void if it is entered into for purposes other than what the Constitution or
law declares, such as the acquisition of foreign citizenship. Therefore, so long as all the
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essential and formal requisites prescribed by law are present, and it is not void or voidable under
the grounds provided by law, it shall be declared valid.
Republic v. Cantor, December 10, 2013: Before a judicial declaration of presumptive death can
be obtained, it must be shown that the prior spouse had been absent for four consecutive years
and the present spouse had a well-founded belief that the prior spouse was already dead. Under
Article 41 of the Family Code, there are four (4) essential requisites for the declaration of
presumptive death:
1.That the absent spouse has been missing for four consecutive years, or two consecutive years if
the disappearance occurred where there is danger of death under the circumstances laid down in
Article 391, Civil Code;
2. That the present spouse wishes to remarry;
3. That the present spouse has a well-founded belief that the absentee is dead; and
4. That the present spouse files a summary proceeding for the declaration of presumptive death
of the absentee.
The present spouse has the burden of proof to show that all the requisites under Art. 41, Family
Code are present. In terms of declaration of presumptive death under Art. 41, a stricter standard
is imposed.
Well-founded belief depends upon the circumstances of each case. The present spouse must
prove that his/her belief was the result of diligent and reasonable efforts and inquiries to locate
the absent spouse and that based on these efforts and inquiries, he/she believes that under the
circumstances, the absent spouse is already dead. It requires exertion of active effort (not a mere
passive one).
Recent jurisprudence on Property Relations in a regime of marriage:
Philip Matthews vs. Benjamin A. Taylor and Joselyn C. Taylor, G.R. No. 164584, June 22,
2009: The Supreme Court ruled: . . . we find and so hold that Benjamin has no right to nullify
the Agreement of Lease between Joselyn and petitioner. Benjamin, being an alien, is absolutely
prohibited from acquiring private and public lands in the Philippines. In any event, he had and
has no capacity or personality to question the subsequent lease of the Boracay property by his
wife on the theory that in so doing, he was merely exercising the prerogative of a husband in
respect of conjugal property. To sustain such a theory would countenance indirect contravention
of the constitutional prohibition. If the property were to be declared conjugal, this would accord
the alien husband a substantial interest and right over the land, as he would then have a decisive
vote as to its transfer or disposition. This is a right that the Constitution does not permit him to
have.
The situation here can be distinguished from the situation in Borromeo v. Discolor, G.R. No.
159310, February 24, 2009. In Borromeo, the ex-boyfriend (who is a non-Philippine national and
who funded the purchase of the parcel of land) already sold the land to a qualified Philippine
national; thus, the Supreme Court reiterated its earlier rulings that the while the acquisition of
land by a foreigner violates the Constitution, its subsequent transfer to a qualified Philippine
national cured the defect in the original transaction.
Bobby Tan v. Grace Andrade et al (August 2013): The Court held that Article 160 of the Civil
Code provides that "[a]ll property of the marriage is presumed to belong to the conjugal
partnership; unless it be proved that it pertains exclusively to the husband or to the wife." For
this presumption to apply, the party invoking the same must, however, preliminarily prove that
the property was indeed acquired during the marriage.
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Lim v. PCIB now known as BDO, January 15, 2014: the Court held that it is not unaware that all
property of the marriage is presumed to be conjugal, unless it is shown that it is owned
exclusively by the husband or the wife; that this presumption is not overcome by the fact that the
property is registered in the name of the husband or the wife alone; and that the consent of both
spouses is required before a conjugal property may be mortgaged. However, the Court found it
iniquitous to apply the foregoing presumption especially since the nature of the mortgaged
property was never raised as an issue before the RTC, the CA, and even before this Court. In
fact, petitioner never alleged in his Complaint that the said property was conjugal in nature.
Hence, respondent bank had no opportunity to rebut the said presumption.
Sevilla, Jr. v. Aguila, September 23, 2013. In Dio v. Dio, the Court held that Article 147 of
the Family Code applies to the union of parties who are legally capacitated and not barred by any
impediment to contract marriage, but whose marriage is nonetheless declared void under Article
36 of the Family Code, as in this case. The same shall be shall be governed by the rules on coownership.
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, work or industry, and shall be owned by
them in equal shares. For purposes of this Article, 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 formers efforts consisted in the care and maintenance of the family and
of the household.
Neither party can encumber or dispose by acts inter vivos of his or her share in the property
acquired during cohabitation and owned in common, without the consent of the other, until after
the termination of their cohabitation.
Bangayan v. Bangayan, July 2013: The Court saw no inconsistency in finding the marriage
between Benjamin and Sally null and void ab initio and, at the same time, non-existent. Under
Article 35 of the Family Code, a marriage solemnized without a license, except those covered by
Article 34 where no license is necessary, "shall be void from the beginning." In this case, the
marriage between Benjamin and Sally was solemnized without a license. The marriage between
Benjamin and Sally was also non-existent. Applying the general rules on void or inexistent
contracts under Article 1409 of the Civil Code, contracts which are absolutely simulated or
fictitious are "inexistent and void from the beginning."Thus, the Court of Appeals did not err in
sustaining the trial courts ruling that the marriage between Benjamin and Sally was null and
void ab initio and non-existent.
Benjamin and Sally cohabitated without the benefit of marriage. Thus, only the properties
acquired by them through their actual joint contribution of money, property, or industry shall be
owned by them in common in proportion to their respective contributions in accordance with
Art.148 of the Family Code.
Paternity and Filiations Expect a question on filiations/parental authority/support and this
might be related parental authority and the right to succession. Check your provisions on
admissibility of DNA to prove paternity.
Grande v. Antonio, February 2014): Art. 176. Illegitimate children shall use the surname and
shall be under the parental authority of their mother, and shall be entitled to support in
conformity with this Code. However, illegitimate children may use the surname of their father if
their filiation has been expressly recognized by their father through the record of birth appearing
in the civil register, or when an admission in a public document or private handwritten
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instrument is made by the father. Provided, the father has the right to institute an action before
the regular courts to prove non-filiation during his lifetime. The legitime of each illegitimate
child shall consist of one-half of the legitime of a legitimate child.
From the foregoing provisions, it is clear that the general rule is that an illegitimate child shall
use the surname of his or her mother. The exception provided by RA 9255 is, in case his or her
filiation is expressly recognized by the father through the record of birth appearing in the civil
register or when an admission in a public document or private handwritten instrument is made by
the father. In such a situation, the illegitimate child may use the surname of the father.
Persons and Personality Since the Political Law Questions did not cover the viability of a
person, check the relevant provisions on this and the S.C. ruling on the constitutionality of the
RH Bill. Review Geluz ruling on this. Review also Cagandahan and Silvestre ruling on gender
as it relates to Civil Registrar; use of surnames.
Recent jurisprudence on Annulment of Marriage:
The grounds for annulment of marriage are:
1. Absence of Parental Consent. A marriage was solemnized and one or the other party was
eighteen (18) years of age or over but below twenty-one (21) and consent was not given by the
parents, guardian or person having substitute parental authority. The Petition of Annulment must
be filed within five (5) years of having attained the age twenty-one. However, if the parties freely
cohabited with the other as husband and wife after having reached the age of twenty-one (21) a
Petition of Annulment can no longer be filed.
2. Mental Illness. One or the either party was of unsound mind at the moment of the marriage.
But if the parties freely cohabited with each other after he or she came to reason the law prohibits
the filing of a Petition.
3. Fraud. That the consent of either party was obtained by fraud, unless such party once having
knowledge of the fraud freely cohabited with the other as husband and wife. The petition must be
filed within five (5) of finding out the facts of the fraud.
4. That the consent of either party was obtained by force, intimidation or undue influence.
Except when the same has ceased and the party filing the petition freely cohabited with the other
as husband and wife. The injured party must file within five (5) years from the point in time the
force, intimidation or undue influence disappeared or came to an end.
5. One or the other party was physically incapable of consummating the marriage, and such
incapacity continues and appears to be incurable. The filing of the Petition of Annulment must be
filed within five (5) years after the marriage.
6. Either party was at the time of marriage afflicted with a sexually-transmitted-disease (STD)
found to be serious and seems to be incurable. This may also constitute fraud. The filing of the
Petition of Annulment must be filed within five (5) years after the marriage.
SEPARATION: being separated from your spouse with or without communication is not
grounds for annulment. It does not matter how many years you are separated. There is no law
that annuls or voids a marriage automatically. Only a judge in a court of law can annul, void or
nullify a marriage.
INFIDELITY: not a ground for annulment
Republic of the Philippines v. Rodolfo O. De Gracia, G.R. No. 171557. February 12, 2014:
Psychological incapacity, as a ground to nullify a marriage under Article 36 of the Family
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Code, should refer to no less than a mental not merely physical incapacity that causes a party
to be truly incognitive of the basic marital covenants that concomitantly must be assumed and
discharged by the parties to the marriage which, as so expressed in Article 68 of the Family
Code, among others, include their mutual obligations to live together, observe love, respect and
fidelity and render help and support. There is hardly any doubt that the intendment of the law has
been to confine the meaning of psychological incapacity to the most serious cases of
personality disorders clearly demonstrative of an utter insensitivity or inability to give meaning
and significance to the marriage. To the Courts mind, Natividads refusal to live with Rodolfo
and to assume her duties as wife and mother as well as her emotional immaturity, irresponsibility
and infidelity do not rise to the level of psychological incapacity that would justify the
nullification of the parties marriage. Indeed, to be declared clinically or medically incurable is
one thing; to refuse or be reluctant to perform ones duties is another. To hark back to what has
been earlier discussed, psychological incapacity refers only to the most serious cases of
personality disorders clearly demonstrative of an utter insensitivity or inability to give meaning
and significance to the marriage.
Dedel v. CA: The Court held that respondents emotional immaturity and irresponsibility could
not be equated with psychological incapacity as it was not shown that these acts are
manifestations of a disordered personality which make her completely unable to discharge the
essential marital obligations of the marital state, not merely due to her youth, immaturity or
sexual promiscuity. Although expert opinions furnished by psychologists regarding the
psychological temperament of parties are usually given considerable weight by the courts, the
existence of psychological incapacity must still be proven by independent evidence.
Renato Reyes So v. Lorna Valera, G.R. No. 150677, June 5, 2009: The spouses had a common
law relationship for 18 years and had three children before contracting marriage which they
sought to annul but the Court did not grant the annulment.
The Supreme Court noted that there was no proof that Lornas psychological disorder was
incurable since the psychologists testimony itself glaringly failed to show that the respondents
behavioral disorder was medically or clinically permanent or incurable as established
jurisprudence requires. Neither did the psychologist testify that the disorder was grave enough to
bring about the disability of the party to assume the essential obligations of marriage. In
Molina, we ruled that mild characterological peculiarities, mood changes and occasional
emotional outbursts cannot be accepted as indicative of psychological incapacity. The illness
must be shown as downright incapacity or inability, not a refusal, neglect or difficulty, much less
ill will. In other words, the root cause should be a natal or supervening disabling factor in the
person, an adverse integral element in the personality structure that effectively incapacitates the
person from really accepting and thereby complying with the obligations essential to marriage.
Iwasawa v. Gangan et al., September 2013: As correctly pointed out by the OSG, the
documentary exhibits taken together concretely establish the nullity of the marriage of petitioner
to private respondent on the ground that their marriage is bigamous. The exhibits directly prove
the following facts: (1) that private respondent married Arambulo on June 20, 1994 in the City of
Manila; (2) that private respondent contracted a second marriage this time with petitioner on
November 28, 2002 in Pasay City; (3) that there was no judicial declaration of nullity of the
marriage of private respondent with Arambulo at the time she married petitioner; (3) that
Arambulo died on July 14, 2009 and that it was only on said date that private respondents
marriage with Arambulo was deemed to have been dissolved; and (4) that the second marriage of
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private respondent to petitioner is bigamous, hence null and void, since the first marriage was
still valid and subsisting when the second marriage was contracted.
Office of the Court Administrator vs. Necessario, 694 SCRA 350): The five-year period of
cohabitation should be one of a perfect union valid under the law but rendered imperfect only by
the absence of the marriage contract. The parties should have been capacitated to marry each
other during the entire period and not only at the time of the marriage.
Book II: Property and Related Transactions (Registration of Property (Land Titles and
Deeds)/Lease/Mortgage) Basically review: Modes of acquiring property/ Registration of
Property. The significance of the Torrens system of titling of lands; classification of lands; what
lands may be available for disposition (Read Boracay Island Case penned by Justice Ruben
Reyes. Take note of the constitutional provision that it is the sole prerogative of the President to
reclassify land of public domain.); Citizenship requirement; liens, encumbrances, annotation,
attachment, foreclosure (judicial and extrajudicial), exercise of right of redemption
Ownership and related transactions: Read on accession, accretion and reclamation; easement
of right of way; how usufruct is effected (by government and private parties); right to possession
and other contracts which may affect the exercise of the right of ownership (lease, mortgage,
legacy); foreclosure; right of redemption
Recent jurisprudence on Property:
1. On Regalian Doctrine and disposition of land of public domain
Republic of the Philippines v. Emmanuel C. Cortez, G.R. No. 186639. February 5, 2014. The
Court held that to prove that the land subject of an application for registration is alienable; an
applicant must establish the existence of a positive act of the government. The annotation in the
survey plan is not a conclusive proof.
The Civil Code makes it clear that patrimonial property of the State may be acquired by private
persons through prescription. This is brought about by Article 1113, which states that [a]ll
things which are within the commerce of man are susceptible to prescription, and that
[p]roperty of the State or any of its subdivisions not patrimonial in character shall not be the
object of prescription.Nonetheless, Article 422 of the Civil Code states that [p]roperty of
public dominion, when no longer intended for public use or for public service, shall form part of
the patrimonial property of the State. Without such express declaration, the property, even if
classified as alienable or disposable, remains property of the public dominion, pursuant to Article
420(2), and thus incapable of acquisition by prescription. It is only when such alienable and
disposable lands are expressly declared by the State to be no longer intended for public service or
for the development of the national wealth that the period of acquisitive prescription can begin to
run. Such declaration shall be in the form of a law duly enacted by Congress or a Presidential
Proclamation in cases where the President is duly authorized by law.
Sps. Antonio Fortuna and Erlinda Fortuna v. Republic of the Philippines,G.R. No. 173423,
March 5, 2014. Jurisprudence has required that an applicant for registration of title acquired
through a public land grant must present incontrovertible evidence that the land subject of the
application is alienable or disposable by establishing the existence of a positive act of the
government. Thus, it is essential for any applicant for registration of title to land derived
through a public grant to establish foremost the alienable and disposable nature of the
land. The Public Land Act provisions on the grant and disposition of alienable public lands,
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specifically, Sections 11 and 48(b), will find application only from the time that a public land has
been classified as agricultural and declared as alienable and disposable.
Republic of the Philippines represented by Aklan National Colleges of Fisheries (ANCF) and
Dr. Elenita R. Adrade, in her capacity as ANCF Superintendent v. Heirs of Maxima Lachica
Sin, namely: Salvacion L. Sin, Rosario S. Enriquez, Francisco L. Sin, Maria S. Yuchintat,
Manuel L. Sin, Jaime Cardinal Sin, Ramon L. Sin, and Ceferina S. Vita,G.R. No. 157485,
March 26, 2014.The requirements for judicial confirmation of imperfect title are found in
Section 48(b) of the Public Land Act, as amended by Presidential Decree No. 1073. The two
requisites for judicial confirmation of imperfect or incomplete title under CA No. 141, namely:
(1) open, continuous, exclusive, and notorious possession and occupation of the subject land by
himself or through his predecessors-in-interest under a bona fide claim of ownership since time
immemorial or from June 12, 1945; and (2) the classification of the land as alienable and
disposable land of the public domain.
Republic of the Philippines v. Remman Enterprises, Inc. represented by Ronnie P. Inocencio,
G.R. No. 199310. February 19, 2014. Section 14(1) of P.D. No. 1529 refers to the judicial
confirmation of imperfect or incomplete titles to public land acquired under Section 48(b) of
Commonwealth Act (C.A.) No. 141, or the Public Land Act, as amended by P.D. No. 1073.
Under Section 14(1) of P.D. No. 1529, applicants for registration of title must sufficiently
establish: first, that the subject land forms part of the disposable and alienable lands of the public
domain; second, that the applicant and his predecessors-in-interest have been in open,
continuous, exclusive, and notorious possession and occupation of the same; and third, that it is
under a bona fide claim of ownership since June 12, 1945, or earlier.
2. Cases on Co-ownership:
Teodoro S. Teodoro, et al. v. Danilo Espino, et al., G.R. No. 189248, February 5, 2014. The
Court held that there is co-ownership whenever the ownership of an undivided thing or right
belongs to different persons. Art. 1078. When there are two or more heirs, the whole estate of the
decedent is, before its partition, owned in common by such heirs, subject to the payment of debts
of the deceased.. Neither party can exclude the other from possession.
Raul V. Arambulo and Teresita Dela Cruz v. Genaro Nolasco and Jeremy Spencer Nolasco,
G.R. No. 189420, March 26, 2014. The Court held that Article 493 of the Code defines the
ownership of the co-owner, clearly establishing that each co-owner shall have full ownership of
his part and of its fruits and benefits. Pertinent to this case, Article 493 dictates that each one of
the parties herein as co-owners with full ownership of their parts can sell their fully owned part.
The sale by the petitioners of their parts shall not affect the full ownership by the respondents of
the part that belongs to them. Their part which petitioners will sell shall be that which may be
apportioned to them in the division upon the termination of the co-ownership. The sale may be
resorted to (a) when the right to partition the property is invoked by any of the co-owners but
because of the nature of the property, it cannot be subdivided or its subdivision would
prejudice the interests of the co-owners, and (b) the co-owners are not in agreement as to who
among them shall be allotted or assigned the entire property upon proper reimbursement of the
co-owners.
3. Cases on Purchaser in Good Faith:
Vallido v. Pono, 696 SCRA 381: Although it is a recognized principle that a person dealing on a
registered land need not go beyond its certificate of title, it is also a firmly settled rule that where
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there are circumstances which would put a party on guard and prompt him to investigate or
inspect the property being sold to him, as the presence of occupants/tenants thereon, it is
expected from the purchaser of a piece of land to inquire first into the status or nature of
possession of the occupants. The failure of a prospective buyer to take such precautionary steps
would mean negligence on his part and would preclude him from claiming or invoking the rights
of a purchaser in good faith.
Homeowners Savings and Loan Bank v. Asuncion P. Felonia and Lydia C. De Guzman,
represented by Maribel Frias, et al., G.R. No. 189477. February 26, 2014. The Court held
that. when a prospective buyer is faced with facts and circumstances as to arouse his suspicion,
he must take precautionary steps to qualify as a purchaser in good faith. In Spouses Mathay v.
CA, we determined the duty of a prospective buyer: Although it is a recognized principle that a
person dealing on a registered land need not go beyond its certificate of title, it is also a firmly
settled rule that where there are circumstances which would put a party on guard and prompt him
to investigate or inspect the property being sold to him, such as the presence of occupants/tenants
thereon, it is of course, expected from the purchaser of a valued piece of land to inquire first into
the status or nature of possession of the occupants, i.e., whether or not the occupants possess the
land en concepto de dueo, in the concept of the owner.. The failure of a prospective buyer to
take such precautionary steps would mean negligence on his part and would thereby preclude
him from claiming or invoking the rights of a purchaser in good faith.
Homeowners Savings and Loan Bank v. Asuncion P. Felonia and Lydia C. De Guzman, rep.
by Maribel Frias, et al., G.R. No. 189477. February 26, 2014. The Court said that lis pendens
is a Latin term which literally means, a pending suit or a pending litigation while a notice of lis
pendens is an announcement to the whole world that a real property is in litigation, serving as
a warning that anyone who acquires an interest over the property does so at his own risk, or that
he/she gambles on the result of the litigation over the property. It is a warning to prospective
buyers to take precautions and investigate the pending litigation.
Bank of Commerce v. Spouses San Pablo, Jr., 550 Phil. 805, 821 (2007): The Court has in the
past declared that a mortgagee has a right to rely in good faith on the certificate of title of the
mortgagor of the property offered as security, and in the absence of any sign that might arouse
suspicion, the mortgagee has no obligation to undertake further investigation. The Court also
ruled that [i]n cases where the mortgagee does not directly deal with the registered owner of
real property, the law requires that a higher degree of prudence be exercised by the mortgagee.
Specifically, the court cited Abad v. Sps. Guimba (503 Phil. 321, 331-332 (2005)), where it held:
x x x While one who buys from the registered owner does not need to look behind the
certificate of title, one who buys from one who is not the registered owner is expected to
examine not only the certificate of title but all factual circumstances necessary for [one] to
determine if there are any flaws in the title of the transferor, or in [the] capacity to transfer the
land.
4. Cases involving Mortgage over Property
Martires vs. Chua, 694 SCRA 50: While indeed a notarized document enjoys the presumption
of regularity, the fact that a deed is notarized is not a guarantee of the validity of its contents. The
presumption is not absolute and may be rebutted by clear and convincing evidence to the
contrary. In the present case, the presumption cannot be made to apply, because aside from the
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regularity of its notarization, the validity of the contents and execution of the subject Deed of
Transfer was (sic) challenged in the proceedings below where its prima facie validity was
subsequently overthrown by the questionable circumstances attendant in its supposed execution.
These circumstances include: (1) the alleged agreement between the parties that the ownership
of the subject property be simply assigned to petitioners instead of foreclosure of the contract of
mortgage which was earlier entered into by them; (2) the Deed of Transfer was executed by
reason of the loan extended by petitioners to respondent, the amount of the latter's outstanding
obligation being the same as the amount of the consideration for the assignment of ownership
over the subject property; (3) the inadequacy of the consideration; and (4) the claim of
respondent that she had no intention of transferring ownership of the subject property to
petitioners.
Darcen v. V.R. Gonzales Credit Ent., Inc. 695 SCRA 218: To accentuate the writs ministerial
character, the Court has consistently disallowed injunction to prohibit its issuance despite a
pending action for annulment of mortgage or the foreclosure itself.
Macaria Arguelles and the Heirs of the Deceased Petronio Arguelles v. Malarayat Rural
Bank, Inc., G.R. No. 200468, March 19, 2014. The Court said that although the instant case
does not involve a sale but only a mortgage, the same rule applies inasmuch as the law itself
includes a mortgagee in the term purchaser. Thus, where the mortgagor is not the registered
owner of the property but is merely an attorney-in-fact of the same, it is incumbent upon the
mortgagee to exercise greater care and a higher degree of prudence in dealing with such
mortgagor..
Ursal v. Court of Appeals (509 Phil. 628, 642 (2005)), The Court held that where the mortgagee
is a bank, it cannot rely merely on the certificate of title offered by the mortgagor in ascertaining
the status of mortgaged properties. Since its business is impressed with public interest, the
mortgagee-bank is duty-bound to be more cautious even in dealing with registered lands. Indeed,
the rule that person dealing with registered lands can rely solely on the certificate of title does
not apply to banks.
Homeowners Savings and Loan Bank v. Asuncion P. Felonia and Lydia C. De Guzman,
represented by Maribel Frias, et al., G.R. No. 189477. February 26, 2014. The Court held the
mortgagor be the absolute owner of the thing mortgaged is an essential requisite of a contract of
mortgage. Article 2085 (2) of the Civil Code specifically says so: Art. 2085. The following
requisites are essential to the contracts of pledge and mortgage: x x x (2) That the pledgor or
mortagagor be the absolute owner of the thing pledged or mortgaged. Succinctly, for a valid
mortgage to exist, ownership of the property is an essential requisite. Reyes v. De Leon cited the
case of Philippine National Bank v. Rocha where it was pronounced that a mortgage of real
property executed by one who is not an owner thereof at the time of the execution of the
mortgage is without legal existence. Such that, according to DBP v. Prudential Bank, there
being no valid mortgage, there could also be no valid foreclosure or valid auction sale.
Darcenv v.V.R. Gonzales Credit Enterprises, Inc. 695 SCRA 219: If no redemption be made
within one (1) year from the date of the registration of the certificate of sale, the purchaser is
entitled to a conveyance and possession of the property, or, if so redeemed whenever sixty (60)
days have elapsed and no other redemption has been made, and notice thereof given, and the
time for redemption has expired, the last redemptioner is entitled to the conveyance and
possession; but in all cases the judgment obligor shall have the entire period of one (1) year
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from the date of the registration of the sale to redeem the property. (Sec. 33, Rule 39, Rules of
Court)
Ingles v. Estrada, 695 SCRA 315: Proceedings for the extra-judicial foreclosure of mortgages
are also not adversarial. An executive judge has the administrative duty in extra-judicial
proceedings to ensure that all the conditions of the law have been complied with before
authorizing the public auction of any mortgaged property and this duty, by necessity, includes
facially examining the mortgage agreement as to whether it adequately identified the land to be
auctioned or whatever it contains sufficient authorization on the part of the mortgagee to push
forth, with an extra-judicial sale. Goldenway Merchandising Corp. vs. Equitable PCI Bank,
693 SCRA 439-440): The one-year period of redemption is counted from the date of the
registration of the certificate of sale.
Tolosa v. UCPB, 695 SCRA 145: Under Section 7 of Act No. 3135, as amended, a writ of
possession may be issued in favor of a purchaser in a foreclosure sale either: (1) within the oneyear redemption period, upon the filing of a bond; or (2) after the lapse of the redemption
period, without need of a bond. Within the one-year redemption period, the purchaser may apply
for a writ of possession by filing a petition in the form of an ex parte motion under oath in the
registration or cadastral proceedings of the registered property. The law requires only that the
proper motion be filed, the bond approved and no third person is involved.
After the
consolidation of title in the buyers name for failure of the mortgagor to redeem the property,
entitlement to the writ of possession becomes a matter of right. In the latter case, the right of
possession becomes absolute because the basis thereof is the purchasers ownership of the
property.
Rural Bank of Sta. Barbara Iloilo, Inc. v. Centeno, 693 SCRA 114): It is well-established that
after consolidation of title in the purchasers name for failure of the mortgagor to redeem the
property, the purchasers right to possession ripens into the absolute right of a confirmed owner.
At that point, the issuance of a writ of possession, upon proper application and proof of title, to a
purchaser in an extrajudicial foreclosure sale becomes merely a ministerial function, unless it
appears that the property is in possession of a third party claiming a right adverse to that of the
mortgagor.
Solid Builders, Inc. v. China Banking Corp., 695 SCRA 120: Moreover, in extra-judicial
foreclosures, mortgagors have the right to receive any surplus in the selling price. Thus, if the
mortgagee is retaining more of the proceeds of the sale than he is entitled to, this fact alone will
not affect the validity of the sale but will give the mortgagor a cause of action to recover such
surplus.
5. Action for Quieting of Title
Heirs of Pacifico Pocido, et al. v. Arsenia Avila and Emelinda Chua, G.R. No. 199146, March
19, 2014. Having established that the disputed property is public land, the trial court was
therefore correct in dismissing the complaint to quiet title for lack of jurisdiction. The trial court
had no jurisdiction to determine who among the parties have better right over the disputed
property which is admittedly still part of the public. In an action for quieting of title, the
complainant is seeking for an adjudication that a claim of title or interest in property adverse to
the claimant is invalid, to free him from the danger of hostile claim, and to remove a cloud upon
or quiet title to land where stale or unenforceable claims or demands exist.
6. Cases on Recovery of Possession of Real Property
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Carmencita Suarez v. Mr. and Mrs. Felix E. Emboy, Jr. and Marilou P. Emboy-Delantar,
G.R. No. 187944, March 12, 2014 . Citing, Sps. Bonifacio R. Valdez, Jr. et al. v. Hon. Court of
Appeals, et al. (523 Phil. 39 (2006)), the Court is instructive anent the three kinds of actions
available to recover possession of real property, viz: (a) action interdictal; (b) accion publiciana;
and (c) accion reivindicatoria.
(1). Accion interdictal comprises two distinct causes of action, namely, forcible entry
(detentacion) and unlawful detainer (desahuico) [sic]. In forcible entry, one is deprived of
physical possession of real property by means of force, intimidation, strategy, threats, or stealth
whereas in unlawful detainer, one illegally withholds possession after the expiration or
termination of his right to hold possession under any contract, express or implied. The two are
distinguished from each other in that in forcible entry, the possession of the defendant is illegal
from the beginning, and that the issue is which party has prior de facto possession while in
unlawful detainer, possession of the defendant is originally legal but became illegal due to the
expiration or termination of the right to possess.
The jurisdiction of these two actions, which are summary in nature, lies in the proper municipal
trial court or metropolitan trial court. Both actions must be brought within one year from the date
of actual entry on the land, in case of forcible entry, and from the date of last demand, in case of
unlawful detainer. The issue in said cases is the right to physical possession.
(2). Accion publiciana is the plenary action to recover the right of possession which should be
brought in the proper regional trial court when dispossession has lasted for more than one year. It
is an ordinary civil proceeding to determine the better right of possession of realty independently
of title. In other words, if at the time of the filing of the complaint more than one year had
elapsed since defendant had turned plaintiff out of possession or defendants possession had
become illegal, the action will be, not one of the forcible entry or illegal detainer, but an accion
publiciana.
(3). Accion reivindicatoria is an action to recover ownership also brought in the proper regional
trial court in an ordinary civil proceeding.
Spouses Eulogio N. Antazo and Nelia C. Antazo v. Leonides Doblada, et al., G.R. No. 178908,
February 4, 2010. In ejectment cases, possession means nothing more than actual physical
possession, not legal possession in the sense contemplated in civil law. Prior physical possession
is the primary consideration in a forcible entry case. A party who can prove prior possession can
recover such possession even against the owner himself. Whatever may be the character of his
possession, if he has in his favor prior possession in time, he has the security that entitles him to
remain on the property until a person with a better right lawfully ejects him. The party in
peaceable quiet possession shall not be thrown out by a strong hand, violence or terror. We are
convinced that respondents were in prior possession of the property and that petitioners deprived
them of such possession by means of force.
Nelson Lagazo v. Gerald B. Soriano and Galileo B. Soriano, G.R. No. 170864, February 16,
2010. The Court held that prior physical possession is an indispensable element in forcible entry
cases. Thus, the ultimate question in a case of this nature is who had prior physical possession of
the disputed land.
8. Easement
Pilar Dev. Corp. v. Dumadag, 693 SCRA 97: While Article 630 of the Code provides for the
general rule that the owner of the servient estate retains the ownership of the portion on which
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the easement is established and may use the same in such a manner as not to affect the exercise
of the easement, Article 635 thereof is specific in saying that [all] matters concerning
easements established for public or communal use shall be governed by the special laws
and regulations relating thereto, and, in the absence thereof, by the provisions of this Title
(Title VII on Easements or Servitudes)
A private party can never have a right or title over it over public land. Squatters have no
possessory rights over the land intruded upon. The length of time that they may have physically
occupied the land is immaterial; they are deemed to have entered the same in bad faith, such that
the nature of their possession is presumed to have retained the same character throughout their
occupancy. Only the Republic of the Philippines, through the OSG and the local government
unit may file an action depending on the purposes sought to be achieved.
Catedrilla v. Lauron, 696 SCRA 341: A person who occupies the land of another at the latters
tolerance or permission, without any contract between them, is bound by an implied promise that
he will vacate the same upon demand, failing which a summary action for ejectment is the
property remedy against him.
Chingkoe v. Chingkoe, 696 SCRA 729: In unlawful detainer cases, the possession of the
defendant was originally legal, as his possession, was permitted by the plaintiff on account of an
express or implied contract between them. However, defendants possession became illegal
when the plaintiff demanded that defendant vacate the subject property due to the expiration or
termination of the right to possess under their contract, and the defendant refused to heed such
demand.
Martires v. Chua, 694 SCRA 57: Under Article 444 and 1942 of the old Civil Code, possession
of real property is not affected by acts of a possessory character which are merely tolerated by
the possessor, or which are due to his license. Granted that long, continued occupation,
accompanied by acts of a possessory character, affords some evidence that possession has been
exerted in the character of owner and under claim of right, this inference is unavailing since
continued possession of the property after his defeat in the ejectment suit was clearly upon the
tolerance of respondents predecessor-in-interest.
9. Case on Prescription of Action over Real Property
Spouses Morris Carpo and Socorro Carpo v. Ayala Land, Incorporated, G.R. No. 166577,
February 3, 2010. By laches is meant the negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to assert it either has abandoned
it or declined to assert it. It does not involve mere lapse or passage of time, but is principally an
impediment to the assertion or enforcement of a right, which has become under the
circumstances inequitable or unfair to permit.
10. Sale of Property on Installment
Garcia v. Court of Appeals, 619 SCRA 280: The Maceda Law applies to contracts of sale of real
estate on installment payments, including residential condominium apartments, but excluding:
(a) industrial lots, (b) commercial buildings, and (c) sales to tenants.
Philippine National Bank v. Teresita Tan Dee, et al., G.R. No. 182128, February 19, 2014.
The Court held that a bank dealing with a property that is already subject of a contract to sell
and is protected by the provisions of P.D. No. 957 It is bound by the contract to sell. intended to
be the subject of any other contract involving buyers or potential buyers. In granting the loan,
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[the Bank] should not have been content merely with a clean title, considering the presence of
circumstances indicating the need for a thorough investigation of the existence of buyers x x x.
Wanting in care and prudence, the [Bank] cannot be deemed to be an innocent mortgagee. x x x
Prescription/ Compromise
Prescription based on written agreement; statute of limitations; estoppel (by action and waiver);
what may be compromised; effect of a compromise
Book III: Different Modes of acquiring Ownership; Succession
Reserva Troncal: Mendoza v. de los Santos, 694 SCRA 83:There are three (3) lines of
transmission in reserva troncal. The first transmission is by gratuitous title, whether by
inheritance or donation, from an ascendant/brother/sister to a descendant called the prepositus
The second transmission is by operation of law from the prepositus to the other ascendant or
reservor, also called the reservista .
The third and last transmission is from the reservista to the reservees or reservatarious who
must be relatives within the third degree from which the property came.
Pabalan et al v. The Heirs of Simeon A.B. Maamo, March 20, 1013.Reserva troncal is a special
rule designed primarily to assure the return of a reservable property to the third degree relatives
belonging to the line from which the property originally came, and avoid its being dissipated into
and by relatives of the inheriting ascendant. The reservoir has the legal title and dominion to the
reservable property but subject to the resolutory condition that such title is extinguished if the
reservoir predeceased the reserve. The reservoir is a usufructuary to the reservable property. He
may alienate it subject to reservation. The transfree gets the revocable and conditional ownership
of the reservoir. The transferees rights are revoked upon the survival of the reserves at the time
of the death of the reservoir but become indefeasible when reservees predecease the reservoir.
Advance Inheritance: Bangayan v. Bangayan, July 3, 2013. In a common law relationship, the
spouse cannot claim any benefit on advance inheritance given by the other spouses father to the
children born out of the common law relationship as advance inheritance of the said
grandchildren.
Effect of Act of the Deceased prior to death: Inocencion v. Hospicio de San Jose, September
25, 2013. A lease contract is not essentially personal in character. Thus, the rights and obligations
therein are transmissible to the heirs. The general rule, therefore, is that heirs are bound by
contracts entered into by their predecessors-in-interest except when the rights and obligations
arising therefrom are not transmissible by (1) their nature, (2) stipulation or (3) provision of law.
In the subject Contract of Lease, not only were there no stipulations prohibiting any transmission
of rights, but its very terms and conditions explicitly provided for the transmission of the rights
of the lessor and of the lessee to their respective heirs and successors. The contract is the law
between the parties. The death of a party does not excuse non performance of a contract, which
involves a property right, and the rights and obligations thereunder pass to the successors or
representatives of the deceased. Similarly, non performance is not excused by the death of the
party when the other party has a property interest in the subject matter of the contract.
Constantino et al v. Heirs of Pedro Constantino, October 2, 2013. Section 23, Rule 130 of the
Rules of Court provides:Sec. 23. Disqualification by reason of death or insanity of adverse party.
Parties or assignors of parties to a case, or persons in whose behalf a case is prosecuted,
against an executor or administrator or other representative of a deceased person, or against a
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person of unsound mind, upon a claim or demand against the estate of such deceased person or
against such person of unsound mind, cannot testify as to any matter of fact occurring before the
death of such deceased person or before such person became of unsound mind.
Ventura v. Heirs of Endaya, October 2, 2013: A contract to sell is defined as a bilateral contract
whereby the prospective seller, while expressly reserving the ownership of the subject property
despite delivery thereof to the prospective buyer, binds himself to sell the said property
exclusively to the latter upon his fulfillment of the conditions agreed upon, i.e., the full payment
of the purchase price50 and/or compliance with the other obligations stated in the contract to sell.
Given its contingent nature, the failure of the prospective buyer to make full payment and/or
abide by his commitments stated in the contract to sell prevents the obligation of the prospective
seller to execute the corresponding deed of sale to effect the transfer of ownership to the buyer
from arising. As discussed in Sps. Serrano and Herrera v. Caguiat:
A contract to sell is akin to a conditional sale where the efficacy or obligatory force of the
vendor's obligation to transfer title is subordinated to the happening of a future and uncertain
event, so that if the suspensive condition does not take place, the parties would stand as if the
conditional obligation had never existed. x x x.
6. Obligations and Contracts
- Elements of a contract; enforcement of rights/warranties under a contract; what may be the
subject matter of contracts
- What are the sources of obligation; what is joint and solidary obligation and under what
circumstances may parties be held jointly and solidarily liable; Read Articles 141 and 142 of the
Revised Penal Code in conjunction of liabilities of innkeepers, etc; and employers and teachers.
- Extinguishment of Obligations; manner voluntary and involuntary.
Philippine National Bank v. Teresita Tan Dee, et al., G.R. No. 182128, February 19, 2014.
The basic principle of relativity of contracts is that contracts can only bind the parties who
entered into it, and cannot favor or prejudice a third person, even if he is aware of such contract
and has acted with knowledge thereof Where there is no privity of contract, there is likewise no
obligation or liability to speak about. Article 1308 of the Civil Code; principle of mutuality of
contracts. The credit agreement executed succinctly stipulated that the loan would be subjected
to interest at a rate determined by the Bank to be its prime rate plus applicable spread,
prevailing at the current month. This stipulation was carried over to or adopted by the
subsequent renewals of the credit agreement. PNB thereby arrogated unto itself the sole
prerogative to determine and increase the interest rates imposed on the Spouses Manalo. Such a
unilateral determination of the interest rates contravened the principle of mutuality of contracts
embodied in Article 1308 of the Civil Code.
Philippine National Bank v. Sps. Enrique Manalo & Rosalinda Jacinto, et al., G.R. No.
174433, February 24, 2014: The Court has declared that a contract where there is no mutuality
between the parties partakes of the nature of a contract of adhesion, and any obscurity will be
construed against the party who prepared the contract, the latter being presumed the stronger
party to the agreement, and who caused the obscurity. PNB should then suffer the consequences
of its failure to specifically indicate the rates of interest in the credit agreement.
We spoke clearly on this in Philippine Savings Bank v. Castillo, to wit: The unilateral
determination and imposition of the increased rates is violative of the principle of mutuality of
contracts under Article 1308 of the Civil Code, which provides that [t]he contract must bind
both contracting parties; its validity or compliance cannot be left to the will of one of them. A
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perusal of the Promissory Note will readily show that the increase or decrease of interest rates
hinges solely on the discretion of petitioner. It does not require the conformity of the maker
before a new interest rate could be enforced. Any contract which appears to be heavily weighed
in favor of one of the parties so as to lead to an unconscionable result, thus partaking of the
nature of a contract of adhesion, is void. Any stipulation regarding the validity or compliance of
the contract left solely to the will of one of the parties is likewise invalid.
Bignay EX-IM Philippines, Inc. v. Union Bank of the Philippines / Union Bank of the
Philippines v. Bignay EX-IM Philippines, Inc., G.R. No. 171590 & G.R. No. 171598,
February 12, 2014: In culpa contractual or breach of contract, gross negligence of a party
amounting to bad faith is a ground for the recovery of damages by the injured party.
Metropolitan Fabrics, Inc., et al. v. Prosperity Credit Resources, Inc. et al., G.R. No. 154390,
March 17, 2014: According to Article 1338 of the Civil Code, there is fraud when one of the
contracting parties, through insidious words or machinations, induces the other to enter into the
contract that, without the inducement, he would not have agreed to. Yet, fraud, to vitiate consent,
must be the causal (dolo causante), not merely the incidental (dolo incidente), inducement to the
making of the contract. In Samson v. Court of Appeals (G.R. No. 108245, November 25, 1994,
238 SCRA 397), causal fraud is defined as a deception employed by one party prior to or
simultaneous to the contract in order to secure the consent of the other.
Fraud cannot be presumed but must be proved by clear and convincing evidence. Whoever
alleges fraud affecting a transaction must substantiate his allegation, because a person is always
presumed to take ordinary care of his concerns, and private transactions are similarly presumed
to have been fair and regular. To be remembered is that mere allegation is definitely not
evidence; hence, it must be proved by sufficient evidence..
Article 1390, in relation to Article 1391 of the Civil Code, provides that if the consent of the
contracting parties was obtained through fraud, the contract is considered voidable and may be
annulled within four years from the time of the discovery of the fraud.
Iglesia Felipina Independiente v. Heirs of Bernardino Taeza,G.R. No. 179597, February 3,
2014: Under Article 1403 of the Civil Code. The following contracts are unenforceable, unless
they are ratified: (1) Those entered into in the name of another person by one who has been given
no authority or legal representation, or who has acted beyond his powers; In Mercado v. Allied
Banking Corporation, the Court explained that: x x x Unenforceable contracts are those which
cannot be enforced by a proper action in court, unless they are ratified, because either they are
entered into without or in excess of authority or they do not comply with the statute of frauds or
both of the contracting parties do not possess the required legal capacity. x x x..
Closely analogous cases of unenforceable contracts are those where a person signs a deed of
extrajudicial partition in behalf of co-heirs without the latters authority; where a mother as
judicial guardian of her minor children, executes a deed of extrajudicial partition wherein she
favors one child by giving him more than his share of the estate to the prejudice of her other
children; and where a person, holding a special power of attorney, sells a property of his
principal that is not included in said special power of attorney.
Philippine National Bank v. Teresita Tan Dee, et al., G.R. No. 182128, February 19, 2014:
Dacion en pago is a mode of extinguishing an existing obligation and partakes the nature of sale
as the creditor is really buying the thing or property of the debtor, the payment for which is to be
charged against the debtors debt. Dacion in payment extinguishes the obligation to the extent of
the value of the thing delivered, either as agreed upon by the parties or as may be proved, unless
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the parties by agreement express or implied, or by their silence consider the thing as
equivalent to the obligation, in which case the obligation is totally extinguished.
However, the Court held that where the bank with undue haste when it granted and released
the loan in less than three days, it also acted negligently in preparing the Real Estate Mortgage as
it failed to indicate that Concepcion was signing it for and on behalf of petitioner. We need not
belabor that the words as attorney-in-fact of, as agent of, or for and on behalf of, are vital
in order for the principal to be bound by the acts of his agent. Without these words, any
mortgage, although signed by the agent, cannot bind the principal as it is considered to have been
signed by the agent in his personal capacity.
Flordeliza Emilio v. Bilma Rapal, G.R. No. 181855, March 30, 2010: For an action for
reformation of instrument to prosper, the following requisites must concur: (1) there must have
been a meeting of the minds of the parties to the contract; (2) the instrument does not express the
true intention of the parties; and (3) the failure of the instrument to express the true intention of
the parties is due to mistake, fraud, inequitable conduct or accident.
7. Sales
Essential Elements of a Contract of Sale; enforceable and unenforceable contracts; who bears
the loss; how ownership is transferred; how may defective contracts be reformed; liability for
breach of contracts
Philippine National Bank v. Teresita Tan Dee, et al., G.R. No. 182128, February 19, 2014.
[P.D.] No. 957 cannot totally prevent the owner or developer from mortgaging the subdivision
lot or condominium unit when the title thereto still resides in the owner or developer awaiting the
full payment of the purchase price by the installment buyer.
Partnership/Agency/Insolvency
Who may form partnerships; what are the rights of partners; how partnership may be dissolved;
what are the rights of creditors in case of insolvency; how assets may be assigned
Appointment of Agents; powers under a general power of attorney and those in special power of
attorney; how agency is revoked
Credit Transactions
What is suretyship; obligations of a surety; liabilities of parties under suretyship; review
provisions on antichresis (have not been asked in recent bar exams)
Trade and Investment Development Corporation of the Philippines (Formerly Philippine
Export and Foreign Loan Guarantee Corporation) v. Asia Paces Corporation, et al., G.R. No.
187403. February 12, 2014: The fundamental reason therefore is that a contract of suretyship
effectively binds the surety as a solidary debtor. This is provided under Article 2047 of the Civil
Code which states: By guaranty a person, called the guarantor, binds himself to the creditor to
fulfill the obligation of the principal debtor in case the latter should fail to do so. Thus, since the
surety is a solidary debtor, it is not necessary that the original debtor first failed to pay before the
surety could be made liable; it is enough that a demand for payment is made by the creditor for
the suretys liability to attach.
Comparing a suretys obligations with that of a guarantor, the Court, in the case of Palmares v.
CA, illumined that a surety is responsible for the debts payment at once if the principal debtor
makes default, whereas a guarantor pays only if the principal debtor is unable to pay, viz.: A
surety is an insurer of the debt, whereas a guarantor is an insurer of the solvency of the debtor. A
suretyship is an undertaking that the debt shall be paid; a guaranty, an undertaking that the debtor
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shall pay. Stated differently, a surety promises to pay the principals debt if the principal will not
pay, while a guarantor agrees that the creditor, after proceeding against the principal, may
proceed against the guarantor if the principal is unable to pay. A surety binds himself to perform
if the principal does not, without regard to his ability to do so. A guarantor, on the other hand,
does not contract that the principal will pay, but simply that he is able to do so. In other words, a
surety undertakes directly for the payment and is so responsible at once if the principal debtor
makes default, while a guarantor contracts to pay if, by the use of due diligence, the debt cannot
be made out of the principal.
Iglesia Felipina Independiente v. Heirs of Bernardino Taeza,G.R. No. 179597, February 3,
2014: A deeper analysis of Article 1456 reveals that it is not a trust in the technical sense for in a
typical trust, confidence is reposed in one person who is named a trustee for the benefit of
another who is called the cestui que trust, respecting property which is held by the trustee for the
benefit of the cestui que trust. A constructive trust, unlike an express trust, does not emanate
from, or generate a fiduciary relation. While in an express trust, a beneficiary and a trustee are
linked by confidential or fiduciary relations, in a constructive trust, there is neither a promise nor
any fiduciary relation to speak of and the so-called trustee neither accepts any trust nor intends
holding the property for the beneficiary.
A constructive trust having been constituted by law between respondents as trustees and
petitioner as beneficiary of the subject property, may respondents acquire ownership over the
said property? The Court held in the same case of Aznar, that unlike in express trusts and
resulting implied trusts where a trustee cannot acquire by prescription any property entrusted to
him unless he repudiates the trust, in constructive implied trusts, the trustee may acquire the
property through prescription even if he does not repudiate the relationship.
Mariano Lim v. Security Bank Corporation,G.R. No. 188539, March 12, 2014: The essence of
a continuing surety has been highlighted in the case of Totanes v. China Banking Corporation
in this wise: Comprehensive or continuing surety agreements are, in fact, quite commonplace in
present day financial and commercial practice. A bank or financing company which anticipates
entering into a series of credit transactions with a particular company, normally requires the
projected principal debtor to execute a continuing surety agreement along with its sureties. By
executing such an agreement, the principal places itself in a position to enter into the projected
series of transactions with its creditor; with such suretyship agreement, there would be no need to
execute a separate surety contract or bond for each financing or credit accommodation extended
to the principal debtor..
Philippine National Bank v. Sps. Enrique Manalo & Rosalinda Jacinto, et al., G.R. No.
174433, February 24, 2014: Indeed, the Court said in Eastern Shipping Lines, Inc. v. Court of
Appeals that interest should be computed from the time of the judicial or extrajudicial demand.
However, this case presents a peculiar situation, the peculiarity being that the Spouses
Manalo did not demand interest either judicially or extrajudicially. Spouses Manalo made no
judicial or extrajudicial demand from which to reckon the interest on any amount to be refunded
to them. Such demand could only be reckoned from the promulgation of the CAs decision
because it was there that the right to the refund was first judicially recognized. Nevertheless,
pursuant to Eastern Shipping Lines, Inc. v. Court of Appeals, the amount to be refunded and the
interest thereon should earn interest to be computed from the finality of the judgment until the
full refund has been made.

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Anent the correct rates of interest to be applied on the amount to be refunded by PNB, the Court,
in Nacar v. Gallery Frames and S.C. Megaworld Construction v. Parada, already applied
Monetary Board Circular No. 799 by reducing the interest rates allowed in judgments from 12%
per annum to 6% per annum
Book V: Torts and Damages
- What is tort; quasi-delict; when liability attaches; definition of proximate cause; chain of events
leading to injury; negligence, how proved;
- How act of omission may lead to tort; special liability for tort of local governments or other
persons
- Damages; what may damages may be awarded please note that the court may not award
damages if not included in the prayer (may be asked as part of Legal Ethics question in Civil
Law)-; proofs needed to award damages; when may the Court reduce or increase the award;
nature of liquidated damages under contract.
Oriental Petroleum & Minerals Corp. v. Tuscan Realty, Inc., 701 SCRA 95 & 97: The term
"procuring cause" refers to a cause which starts a series of events and results, without break in
their continuity, in the accomplishment of a brokers prime objective of producing a purchaser
who is ready, willing, and able to buy on the owners terms. This is similar to the concept of
proximate cause in Torts, without which the injury would not have occurred. To be regarded as
the procuring cause of a sale, a brokers efforts must have been the foundation of the negotiations
which subsequently resulted in a sale. The Court has always recognized the brokers right to his
commission, although the owner revoked his authority and directly negotiated with the buyer
whom he met through the brokers efforts. It would be unfair not to give the broker the reward
he had earned for helping the owner find a buyer who would pay the price.
BJDC Construction, Inc represented by its Manager/Proprieto Janet S. Dela Cruz v. Nena E.
Lanuzo, et al., G.R. No. 161151, March 24, 2014: Negligence, the Court said in Layugan v.
Intermediate Appellate Court (G.R. No. L-73998, November 14, 1988), is the omission to do
something which a reasonable man, guided by those considerations which ordinarily regulate the
conduct of human affairs, would do, or the doing of something which a prudent and reasonable
man would not do, or as Judge Cooley defines it, (t)he failure to observe for the protection of
the interests of another person, that degree of care, precaution, and vigilance which the
circumstances justly demand, whereby such other person suffers injury. In order that a party
may be held liable for damages for any injury brought about by the negligence of another, the
claimant must prove that the negligence was the immediate and proximate cause of the injury.
For the doctrine to apply, the following requirements must be shown to exist, namely: (a) the
accident is of a kind that ordinarily does not occur in the absence of someones negligence;
(b) it is caused by an instrumentality within the exclusive control of the defendant or
defendants; and (c) the possibility of contributing conduct that would make the plaintiff
responsible is eliminated.
Dr. Fernando P. Solidum v. People of the Philippines, G.R. No. 192123, March 10, 2014:
An action upon medical negligence whether criminal, civil or administrative calls for the
plaintiff to prove by competent evidence each of the following four elements, namely: (a) the
duty owed by the physician to the patient, as created by the physician-patient relationship, to act
in accordance with the specific norms or standards established by his profession; (b) the breach
of the duty by the physicians failing to act in accordance with the applicable standard of care;
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(3) the causation, i.e., there must be a reasonably close and causal connection between the
negligent act or omission and the resulting injury; and (4) the damages suffered by the patient.
The Court aptly explained in Cruz v. Court of Appeals that: Whether or not a physician has
committed an inexcusable lack of precaution in the treatment of his patient is to be determined
according to the standard of care observed by other members of the profession in good standing
under similar circumstances bearing in mind the advanced state of the profession at the time of
treatment or the present state of medical science. In the recent case of Leonila Garcia-Rueda v.
Wilfred L. Pacasio,et. al., this Court stated that in accepting a case, a doctor in effect represents
that, having the needed training and skill possessed by physicians and surgeons practicing in the
same field, he will employ such training, care and skill in the treatment of his patients. He
therefore has a duty to use at least the same level of care that any other reasonably competent
doctor would use to treat a condition under the same circumstances. It is in this aspect of medical
malpractice that expert testimony is essential to establish not only the standard of care of the
profession but also that the physicians conduct in the treatment and care falls below such
standard. Further, inasmuch as the causes of the injuries involved in malpractice actions are
determinable only in the light of scientific knowledge, it has been recognized that expert
testimony is usually necessary to support the conclusion as to causation
The applicability of the doctrine of res ipsa loquitur in medical negligence cases was
significantly and exhaustively explained in Ramos v. Court of Appeals, where the Court said
Medical malpractice cases do not escape the application of this doctrine. Thus, res ipsa loquitur
has been applied when the circumstances attendant upon the harm are themselves of such a
character as to justify an inference of negligence as the cause of that harm. The application of res
ipsa loquitur in medical negligence cases presents a question of law since it is a judicial function
to determine whether a certain set of circumstances does, as a matter of law, permit a given
inference. Resort to res ipsa loquitur is allowed because there is no other way, under usual and
ordinary conditions, by which the patient can obtain redress for injury suffered by him.
International Container Terminal Services, Inc. v. Celeste M. Chua, G.R. No. 195031, March
26, 2014: Article 2199 of the Civil Code states that [e]xcept as provided by law or by
stipulation, one is entitled to an adequate compensation only for such pecuniary loss suffered by
him a he has duly proved. Such compensation is referred to as actual or compensatory damages.
Actual damages are compensation for an injury that will put the injured party in the position
where it was before the injury. They pertain to such injuries or losses that are actually sustained
and susceptible of measurement. Except as provided by law or by stipulation, a party is entitled
to adequate compensation only for such pecuniary loss as is duly proven. Basic is the rule that to
recover actual damages, not only must the amount of loss be capable of proof; it must also be
actually proven with a reasonable degree of certainty, premised upon competent proof or the best
evidence obtainable..
Mariano Lim v. Security Bank Corporation, G.R. No. 188539, March 12, 2014: Article 2208
of the Civil Code does not prohibit recovery of attorneys fees if there is a stipulation in the
contract for payment of the same. Thus, in Asian Construction and Development Corporation v.
Cathay Pacific Steel Corporation (CAPASCO), the Court, citing Titan Construction
Corporation v. Uni-Field Enterprises, Inc., noted that the law allows a party to recover
attorneys fees under a written agreement. In Barons Marketing Corporation v. Court of
Appeals, the Court ruled that attorneys fees are in the nature of liquidated damages and the
stipulation therefor is aptly called a penal clause. It has been said that so long as such stipulation
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does not contravene law, morals, or public order, it is strictly binding upon defendant. The
attorneys fees so provided are awarded in favor of the litigant, not his counsel. On the other
hand, the law also allows parties to a contract to stipulate on liquidated damages to be paid in
case of breach. A stipulation on liquidated damages is a penalty clause where the obligor assumes
greater liability in case of breach of an obligation. The obligor is bound today the stipulated
amount without need for proof on the existence and on the measure of damages caused by the
breach. However, even if such attorneys fees are allowed by law, the courts still have the power
to reduce the same if it is unreasonable.
International Container Terminal Services, Inc. v. Celeste M. Chua, G.R. No. 195031, March
26, 2014: An award of attorneys fees has always been the exception rather than the rule and
there must be some compelling legal reason to bring the case within the exception and justify the
award. The policy of the Court is that no premium should be placed on the right to litigate.
Even when a claimant is compelled to litigate with third persons or to incur expenses to protect
his rights, still, attorneys fees may not be awarded where no sufficient showing of bad faith
could be reflected in a partys persistence in a case other than an erroneous conviction of the
righteousness of his cause. Certainly, an award of moral damages must be anchored on a clear
showing that the party claiming the same actually experienced mental anguish, besmirched
reputation, sleepless nights, wounded feelings, or similar injury.
In the absence of competent proof on the amount of actual damages suffered, a party is entitled
to receive temperate damages. Article 2224 of the New Civil Code provides that: Temperate or
moderate damages, which are more than nominal but less than compensatory damages,
may be recovered when the court finds that some pecuniary loss has been suffered but its
amount cannot, from the nature of the case, be proved with certainty. The amount thereof is
usually left to the sound discretion of the courts but the same should be reasonable, bearing in
mind that temperate damages should be more than nominal but less than compensatory.
One Network Rural Bank, Inc. v. Danilo G. Baric, G.R. No. 193684, March 5, 2014:. Nominal
damages are recoverable under article 2221 of the Civil Code where a legal right is technically
violated and must be vindicated against an invasion that has produced no actual present loss of
any kind or where there has been a breach of contract and no substantial injury or actual damages
whatsoever have been or can be shown. .

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