CIVIL LAW ATTY RABUYA FORECAST LECTURE

LEGAL EDGE

PERSONS and FAMILY RELATIONS

Action in Rem Verso (ARV) is the action for recovery provided for
under art 22 ncc. The concept is not similar with solutio in debiti.
Both are actions for recovery for something lost without just cause.
In both, there is an obligation to return that what is unduly paid or
delivered to him. In both the basis of the obligation, the objective
is to prevent unjust enrichment. They differ in the following. As to
the source, in solution in debiti the source is quasi-contract, in ARV,
the source is the law. ARV cannot prosper if the obligation is based
on delict, quasi-delict, contract or quasi-contract. In solution in
debiti, there is mistake. IF the there is mistake, an action in rem
verso cannot prosper.

Unfair Competition (UC), Art. 28 NCC. This concept is much

broader than the concept in unfair competition in intellectual
property code. The subject in UC in the NCC does not require a
patent. Requisites in UC:

Requisites for a Natural Person to acquire legal personality.

Keyword: The infant must be alive at the time he is born if the
same has an intra-uterine life of more than 7 mos. If the
intrauterine life is less than 7 mos. the infant must be alive after
the lapse of 24 hours from birth.

The law only grants civil personality on the conceived child ONLY
FOR THE PURPOSE BENEFICIAL TO HIM. The conceived child can
thus receive donations or become a beneficiary in an insurance
contract. But at the same time that civil personality is
PROVISIONAL only as it is required to comply with art. 41 of the
NCC.

Survivorship. Who between two persons died ahead of the other?

There are 2 laws: Art. 43 NCC and the presumption of survivorship
under the ROC. Art. 43 NCC applicable if the question is about

Page 1 of 20
successional rights and the two persons are heirs of each other.
Otherwise, ROC applies. Read Art. 43 NCC.

Art. 26, Par. 2 FC. Republic vs Manalo Landmark Ruling Answer this
case. In case of a mixed marriage. Answer this if the question
refers to the filipino spouse who obtained the decree of absolute
divorce abroad. Regardless of whether the Filipino spouse or
foreigner spouse obtained the divorce decree, the said decree is
valid here in the Philippines. If obtained by the foreigner spouse,
Art. 26, Par.2 FC applies. If obtained jointly by the spouse, the case
of Median applies. If obtained by the filipino spouse, the case of
Manalo applies. Provided that the divorce decree is valid and the
decree allows the spouse to remarry. If both spouses are filipino
citizens, if any of them obtained a divorce abroad, the same is null
and void for being contrary to law and public policy. Rep vs
Orbecido, for purposes of citizenship, the reckoning point is their
citizenship is the time when the divorce decree is obtained, not at
the time of the celebration of their marriage.

Application of Art. 26, Par. 2. Divorce obtained prior to the

effectivity of the FC. There is no need to apply art 26 par 2
retroactively because there is sufficient jurisprudential basis in Van
Dorn and Pilapil case.

Art. 34 FC. Legal ratification of cohabitation for marriage. The man

and the woman must be cohabiting for a period of 5 years,
uninterrupted and continuously. Even in the absence of the
affidavit of cohabitation the marriage is still valid because they are
still allowed to prove that they have complied with the requisites.
But if the affidavit of cohabitation did not comply with the requisites
of 5 years or is found false the marriage is void and estoppel will
not validate the marriage. Estoppel does not apply when there is a
law governing the relations of the party. The marriage is governed
by law, hence, estoppel does not apply.

However, in the case of a 2nd marriage during the subsistence of

a prior marriage, the absence of a affidavit of cohabitation in the

Page 2 of 20
2nd marriage cannot be used as a defense in a criminal offense for
bigamy.
If it can be proven that the 2nd marriage is celebrated without a
marriage license, a charge for bigamy will not prosper. The second
marriage must be valid for a charge of bigamy to prosper.
Therefore, a marriage without a marriage license or authority of a
solemnizing officer is valid defense against bigamy.

But if the ground for nullification of the 2nd marriage is

psychological incapacity, the same is not a valid defense in a
charge for bigamy. Art 36 FC is a unique ground.

Void Marriage. GR: Void marriage does not exist. The parties are
not spouses. Therefore, the nullity of marriage is a valid defense
against support.

Void marriage can be a subject of a collateral attack. Therefore in

succession, the surviving spouse is not entitled to his or her share
in the estate because he or she is not a surviving spouse.

But for purposes of contracting another marriage, we cannot say

that the prior marriage is void because a declaration of absolute
nullity of marriage is required. Read Art. 40 FC. Hence, bigamy
may prosper even when the 1st marriage is void absent a
declaration of absolute nullity.

If the 2nd marriage is celebrated prior to Aug. 19, 1986

(promulgation of the case of weigle vs sempio-dy), if the marriage
is void, it is considered as not existing. So even if the 2nd marriage
is contracted without a prior judicial declaration of absolute nullity
of marriage, the same is void and a charge of bigamy will not
prosper. Weigle case cannot apply retroactively.

If the 2nd marriage is celebrated is celebrated during the effectivity

of the FC, apply Art. 40 FC. However, Art. 40 applies if there was
a prior void marriage.

Page 3 of 20
Cancellation or Correction in the Civil registry is not a proper
remedy in case of void marriage. The remedy is a petition for
declaration of absolute nullity of marriage. HOWEVER, if there is
no marriage that took place which can be declared void ab initio,
cancellation or correction in the civil registry is the proper remedy
eg. Marriage in jest, theatrical marriage or no marriage at all. Rep
vs. Olaibar, in this case, Olaibar never contracted a marriage only
his identity was used to contract marriage with a Korean national.
Morigo vs People, in this case, the parties only signed a marriage
contract without a solemnizing officer. In our law that is not a
marriage but only a private contract.

Art. 40 is only applicable if there was a prior void marriage. If there

is no marriage at all, art. 40 FC does NOT apply.

Distinguish a bigamous marriage in art 35, par. 4 FC and art. 40

FC. In the former, the prior marriage is either valid or voidable and
the 2nd marriage was contracted was contracted during the
substance of valid or voidable marriage. This is the true bigamy.
There is a legal impediment. In the latter, the prior marriage must
be VOID ab initio marriage except that a 2nd marriage was
celebrated without securing a judicial declaration of absolute nullity
of the prior void marriage. In Art. 40, the property regime is either
ACP, CPG or CSP (these 3 prop regime applies only in case of valid,
voidable marriage and bigamous marriage under art 40 FC). In Art
35, par. 4, the property regime is art. 147 or 148 FC.

Art. 147 and 148 FC is not co-ownership. Just simply refer to them
as a property regime.

Juliano-Llave vs Rep. J. Del Castillo Ruling. The aggrieved spouse

in the 1st marriage has the personality to file a potion to declare
the 2nd marriage as void on the ground of bigamy because, the
parties in the 2nd marriage is not expected to terminate their
marriage so long as they are still benefiting from their relations. If
the ground is bigamy, the provision where the husband or wife of
the 2nd marriage has personality to file the petition does not apply

Page 4 of 20
to bigamy. The parties in the 2nd marriage are not in really spouses
in the eyes of the law.

Art. 41 FC Requisites in order for the 2nd marriage to become a

valid marriage in case of presumption of death. If the 2nd marriage
under art. 41 FC is void ab initio the proper remedy is a petition
for absolute nullity of marriage. The filing of the affidavit of
reappearance does not apply since that remedy is for the purpose
of terminating a valid 2nd marriage. If the 2nd marriage is void a
petition for judicial declaration of nullity is the proper remedy.

Art 147 and 148 FC these are property regimes. Applicable in case
of void marriage except art. 40 FC. But if the ground is absence of
legal capacity the prop regime is art. 148. (Art 35, 37, 38, 35 par.
4 FC) Other void marriage, art 147 applies.

Art. 147 and 148 FC does not apply in case of same sex union as
it is not recognized by philippine laws.

In case of mere cohabitation, Art. 147 applies if they are

capacitated to marry each other and they live exclusively with each
other.

In Art 148 the registration of the property is immaterial.

Effects of the Prop regime after termination of marriage. CSP

mandatorily governs the property relations of the spouses in case
the the other spouse did not liquidate the prop regime of his prior
marriage.

Art 130 FC does not apply if at the time of the effectivity of the FC
the marriage is already terminated because one of the spouses has
already died. Otherwise, there will be impairment of rights. But if
the prop regime still subsists because the marriage still subsists at
the time of the effectivity of the FC, Art. 130 FC applies in the event
the marriage terminates.

Page 5 of 20
In Art. 155, the Family Home is not protected, it can be levied or
attached. The FH will lose its protection if the value exceeds
300k/200k and the reason for the increase is VOLUNTARY
IMPROVEMENT!. If the reason for the increase is involuntary
improvement, the Family home may be protected despite
exceeding the value set by law. Involuntary improvement is an
increase in value of the property without the voluntary action of
the owner.

Aguilar vs Siasat J. Del Castillo. The SSS form 31 is a competent

proof of filiation.

Dela Cruz vs Gracia. If the handwritten private instrument of the

alleged parent is the ONLY proof, then the rule requiring the
signature of the parent is required should be strictly applied. If the
same is an additional proof of filiation, it is the competent proof of
filiation.

If the birth cert of the child is not signed by the father, that bc is
not competent proof of filiation. However, so long as the father
participated in the preparation of the bc, his participation will take
the place of the signature. Hence, he is deemed to have voluntarily
acknowledged the child as his own.

Retroactive effect of a decree of adoption. Once an adoption decree

is issued for purposes beneficial to the adopted child, the issuance
of the same shall retroact to the date when the petition of adoption.
Hence, the adopted child will enjoy the benefits of a legitimate child
from the time the petition for adoption is filed.

But the retroactive effect of the decree adoption cannot be applied

for the purpose of imposing liability to the adopter because
parental authority is not deemed retroacted.

Bartolome vs SSS. When the adopted child does not have blood
relations with the adopters and both adopters died during the
minority of the adopted child. Are the relatives of the adopters
bound to provide legal support to the adopted child? No. They are

Page 6 of 20
not related. The relations created by the decree of adoption is
merely personal between the adopter and the adopted child.

Parental authority is not the basis of support. The basis of support

is the legal relations of the respective parties.

Support. The parents, whether legit or illegitimate and the letters

children, whether legit or illegitimate, they are required to support
each other.

Monthly allowance or without paying monthly allowance by

receiving support in the family dwelling in the discretion of the
person giving support.

Parental Authority. The tender age presumption rule. The parents

cannot agree to the contrary of this rule. But if the child is
illegitimate only the mother has PA and custody over the child. The
only right of the father is visitational rights, includes right to access
to the child. Custody not included.

If the wife obtained a loan with mortagage of conjugal property

w/o the consent of the husband will the mortgage be validate by
the fact that the same redounded to the benefit of the family? NO!
The disposition and encumbrance must be with the consent of both
the spouse or court authorization. Otherwise, the mortgage is void
in its entirety even if it redounded to the benefit of the family. The
same will be chargeable to the ACP, CPG.

PROPERTY

VIP CASE Sanggunian Panlalawigan vs Cong Ted Garcia. If the

property is of public dominion, the same is within the absolute
control of Congress. However, if that property is a patrimonial
property of the LGU the same is private property of the LGU. The
LGU cannot be deprived of its property without payment of JC. The
test to determine the nature of the property is the ACTUAL USE of
the property. If the use is governmental, public dominion. If
commercial or proprietary, patrimonial.

Page 7 of 20
Communities Cagayan Inc. vs Nanol J. Del Castillo. Distinction
between the limited definition of a builder in good faith and
expanded definition of the such. Under the limited definition, a BGF
must have a claim of ownership. He believe himself as the owner
of the land with sufficient basis. The builder must believe that he
is the owner of the land at the time of building by means of a mode
of acquisition but he is not aware that there is defect in his title.
So if the builder was aware that he is not the owner at the time of
building he is a builder in bad faith. However, in the expanded
definition, if the builder is aware that he is not the owner of the
land but the owner expressly allows the building or construction
the builder is in good faith.

If both builder and owner acted in bad faith. That is not the
expanded definition but the result is the same. In expanded
definition, the owner must give his EXPRESS CONSENT!

There is an issue in this case regarding the Maceda Law.

Lessee, Usufructuary and Vendee a retro are not builders in good

faith as there are specific provisions in the NCC that applies to
them.

Dept of Education vs Masibag? DE was allowed to build a school in

the land of a private indivudual. DE is a possessor by mere
tolerance. A possessor by mere tolerance is a builder in bad faith
because he is aware that he is not the owner of the land at the
time of building. However, when the owner expressly allowed the
construction of the building in his land , the builder is in good faith
based on the expanded definition of a builder in gf.

Padilla Jr. vs Maliksi. The one who gave permission for the builders
to construct was not the owner of the land. SC said the builder is
in bad faith. The fact that the person who gave the consent to build
is not the owner of the land should have placed the builders on
guard.

Page 8 of 20
Aluvium. The water level must be more or less maintained. The
deposit must be by reason of the movement of the water. So if the
water level merely receded, that is not alluvium but only a dried
up river bed.

Aluvium must be an exclusive work of nature.

Conversion of Property of public dominion to patrimonial:

1. There must be abandonment or withdrawal from its use.
2. There must be a positive or affirmative act.

It is not necessary that the positive act may be in the form of a law
as it may come from the executive.

XPN: Agricultural lands of public domain may be converted to

patrimonial property of the state, there must be an express
declaration that it is no longer for public use or that it is converted.

Malabanan vs Republic. Conversion must be in a form of a law or

presidential proclamation but only when the president is expressly
authorized by Congress to do so.

SC made a distinction between par. 1 and par. 2 of the Property

Registration Decree. In Par. 1 the basis of the grant of title ohs
possession and occupation of the land since June 12, 1945 or
earlier. Par. 2 the basis of the grant of title is acquisitive
prescription.

In Par. 1 contemplates of agricultural lands of the public domain

which must not be patrimonial. It must be declared alienable and
disposable at the time of the application. In Par. 2, the properties
are alienable and disposable and may be subject to acquisitive
prescription. It is necessary that during the entire period of
prescription the property must be patrimonial for 30 years. We
cannot add the period when the property is still a property of public
dominion. A property of public dominion is not susceptible of
acquisitive prescription.

Page 9 of 20
Co-ownership. When a co-owner allows another person to build in
the co-owned property, the same is an alteration of co-ownership.
Hence, the consent of one co-owner is not sufficient to allow the
person to build in the co-owned property.

In the sale of the ideal shares of the other co-owner, art. 493
applies. He is exercising a case of absolute ownership with respect
to his ideal share. He cannot also be compelled to sell his ideal
share.

Art. 487. The will of one of the co-owners is sufficient in

maintaining an action for ejectment.

Repudiation of Co-ownership.

Ining vs Vega. Each co-owner may demand at any time the

partition of the thing owned in common, insofar as his share is
concerned.

Art. 559 NCC. Doctrine of irrevindicability of movables. Does not

apply to lost movables and to cases where the previous possessor
has been unlawfully deprived thereof. The latter includes not only
theft but also cases of abuse of confidence provided there is no
intent to deliver for the purpose of consummating a valid sale.

The act of the agent is the act of the principal. When an agent sells
the property of a principal the latter can no longer recover the
property from the buyer because the doctrine of irrevindicability
does not apply when there is a valid sale despite the presence of
abuse of confidence.

Nuisance. Only a nuisance per se may be abated summarily. Even

in the exercise of the LGUs police power, a nuisance per accidens
may not be abated without a judicial order.

A motel or sauna is a legitimate business. It is not a nuisance per

se that can be summarily abated by the LGU.

Page 10 of 20
Cruz vs Pandacan. A basketball court is not a nuisance per se which
can be subjected to summary abatement. There must be a judicial
termination that it is indeed a nuisance. The same rule applies even
when the abatement is in an ordinance.

When the building is constructed in violation of the Building Code,

the same may be summarily abated not because it is a nuisance
per se but because it is in violation of the Building Code. The local
chief executed is vested by the LGC to enforce the Building Code.

WILLS AND SUCCESSION

Legitime. Acts of the testator that may validly affect the legitime.

Probate.
GR: Probate court cannot pass upon an issue regarding intrinsic
validity of the will.

XPN:
1. All the heirs agreed
2.Testamentary provision is patently invalid on the face of the will.
3. When practical consideration dictates that the probate court
pass upon that intrinsic issue otherwise the conduct of the probate
proceedings becomes a useless ceremony. eg. Will opposed
because the same is a donation inter vivos.
4. Preterition.

However, probate proceedings should still continue whenever there

are devices and legacies despite the presence of preterition. On the
other hand, if there is a claim of preterition but the will does not
contain any devices or legacies, practical consideration dictates the
probate court must first pass upon the issue of preterition.

Ascendants are compulsory heir in the direct line if there are no

descendants. A conceived child is also a compulsory heir in the
direct line. Cannot be omitted otherwise there will be preterition.

Reserva Troncal is simply a case of delayed succession.

Page 11 of 20
Three Lines of Transmission

1. Origin to Propositus through gratuitous title either donation or

inheritance.
2. Propositus to Reservista through succession by law
3. Resrvista to Reservatario through legal succession

The reservatario inherits as a legal heir not from the reservist but
from the propositus.

The reservista can sell the property subject of the reserve troncal.
The transferee becomes absolute owner of the property if he is a
innocent purchaser for value or transferee in good faith.

There is a resolutely condition that at the time of the death of the

reservista, the resrvatorio is still living.

During the lifetime of the reservista, the right of the resrvatario is

merely inchoate.

The reservatario can protect his claim in the property by making

everyone in bad faith hehe through constructive notice. By
registering the property in the RD in case of real property. In case
of personal proerty, the reservatario can demand a guaranty from
the reservista.

A resevatrio must be a relative within the 3rd degree of

consanguinity of the propositus.

Because the resrvatario will be inheriting from the proposiatus by

intestate succession, the rules of intestate succession shall apply.
The rule of proximity may therefore apply.

Fideicommissary Substitution. When there is an obligation of the

first heir to preserve and to transmit the property in amor of the
2nd heir.

Page 12 of 20
A substitution becomes fideicommissary substitution:
1. When the substitution is to be called a fideicommissary
substitution.
2. When it is provided that the fiduciary heir is expressly obligated
to preserve and transmit the property to the fideicommisary.

It is only the fideicommissary substitution is deemed not imposed

if invalid, but the institution of the first heir will not be affected.

Limitations:

1. The fideicommissary cannot go beyond one degree of the first

heir. eg. parent and child.
2. Both the first heir and 2nd heir must be living.
3. A fideicommissary subsitutuion cannot be imposed upon the
legitime.

Barrier Rule Art 992 NCC. The illegitimate child is barred from
inheriting from the legitimate parent.

The illegitimate child must be a child of someone who is legitimate.

Barrier rule applies only to intestate succession.

Intestate Succession refer to picture

SS excludes CL except B/S/N/N. 1/2 SS 1/2 B/S/N/N.

Among CL the B/S/N/N exclude all other CL.

State is the ultimate heir.

No DL, ILC, SS and BSNN: Other CL

a. Up to 5th degree
b. Proximity Rule applies
c. No representation
d. FB and HB share

Page 13 of 20
e. Barrier Rule

OBLIGATIONS AND CONTRACTS

Natural Obligations.

Art. 1956 Interest shall not be due unless it is in writing. Two kinds
of interest 1. Monetary and 2. Compensatory (a kind of penalty).
Art. 1956 applicable only to monetary interest.

In case of monetary interest that is expressly stipulated interest it

is in the nature of a civil obligation which is legally demandable.
However, if the monetary interest is not stipulated in writing the
same is either a case of a natural obligation or solution in debiti.
In the latter, the debtor may demand recovery of the interest paid.

Art. 1182 Potestative Condition. If the fulfillment is left in the

exclusive will of the debtor and the same time suspensive, the
obligation becomes void. But in other situations when the
conditions is potestative and at the same time resolutely the
obligation is valid. If the obligation is casual or mixed the obligation
is valid. To reiterate, it is only when the condition is potestative
and suspensive is the obligation void.

Art. 1186 Doctrine of Constructive Fulfillment of Suspensive

Condition. Applicable to mixed conditional obligation when part of
the obligation is dependent upon the debtors will. Said condition is
the same time suspensive. It is the debtor who actively prevented
the fulfillment of the condition, the same is deemed complied.

If the debtor did all in his power to comply for the fulfillment of the
condition, the doctrine also applies.

Option vs. Right of First Refusal. In both it will create a privilege.

Same function. Take note of distinctions.

There is an absence of acceptance of the option in RFR. The Option

may become a contract when all the requisites of a contract are

Page 14 of 20
present. In an option what is lacking is consideration. An Option is
a contract in itself. It is a preparatory contract. The consideration
may be something of value (money, prop or service). An Option
contract is an onerous contract. If an option is supported by a
consideration of its own, then it becomes a valid contract. If the
option is w/o consideration, it is not a contract. It is not binding
and the offeror may withdraw it at anytime but he must withdraw
it prior to its acceptance.

RFR there must be no definite offer yet. Otherwise, it is an option.

In a RFR only the object has been agreed upon because the price
is to be negotiated on in the event the grantor makes an offer to
the grantee. But the obligation of the grantor in a RFR is to offer
first the offer to the grantee. If the grantee refuses the offer, the
grantor may offer the contract to someone else but it must be in
the same terms with the grantee. If the price is lower to the others,
there is a violation of the RFR and the grantee may exercise the
the RFR for that offer. If there is a counter-offer such is in the
nature of a rejection and making a new offer.

Tender of Payment and Consignation. If the debtor made a valid

tender of payment and the creditor without just cause refused the
payment, it is the creditor that is in delay (mora accipiendi). The
debtor cannot be required to pay compensatory interest. The
debtor will be liable to pay monetary interest only if he did not
follow his tender of payment with a valid consignation. Why?
Because the debtor kept the money for himself. That is unjust
enrichment.

Novation. Debtor must clearly consented to the substitution in

order for the novation to be valid.

Assignment of Credit and Conventional Subrogation. In AC what is

being transferred is the very same obligation of the assignor. In CS
it is a mode of extinguishment of obligation. A new obligation is
created for the purpose of extinguishing the old. The obligation
transferred to the assignee is not the old obligation but a new one.
In AC the consent of the debtor is not necessary. What is required

Page 15 of 20
by law is a mere notice to the debtor. In CS the consent of the
debtor is necessary because CS is a new contract involving three
persons, the creditor, the new creditor and the debtor. W/o the
consent of the debtor there is no CS.

If the intention of the parties is CS and the debtors consent was

not obtained, the same cannot be treated as an AC.

The buyer of a mortgaged property is not a Third Person Interested

in the Fulfillment of the Debtors Obligation. He is only interested in
the mortgaged property. Thus, he cannot compel the creditor to
accept payments of debt from him. But if he is a third party
mortgagor, he is a third person interested in the fulfillment in the
obligation. Therefore, he may compel the creditor to accept
payments of the debt subject of the mortgage.

Stipulation Pour Atrui. A stipulation between the contracting parties

conferring a favor or benefit to someone who is not a party to the
contract or a third person.

The conferment of benefit must be deliberate and intentional not

incidental. The conferment of benefit must only be part of the
contract and not the entire contract. Otherwise, the third person
must be made a party to the contract. Neither of the contracting
parties represents the third person receiving the benefit. The third
person must have accepted the benefit prior to its withdrawal. (eg.
Credit card)

If a contracting party violates the stipulation pour atrui, the party

to whom the benefit is conferred may sue the party responsible for
its breach.

Distinction of Rescission in Art 1381 and Art. 1191.

J. Del Castillo case. An absolutely Simulated contract is not a

rescissible contract but a void contract. A rescissible contract
presupposes a valid contract.

Page 16 of 20
The principle of constructive notice is not applicable in Art. 1381
because the provision is a remedy of last resort.

Perfection, Validity, Obligatory, Binding Effect and Enforceable

Perfection is simply limited to the existence of the contract.

Consensual or Real Contract. There are only 4 real contracts and
all of them are under credit transaction. All other contracts are
consensual.

Obligatory the contract must be valid, perfected, binding and

enforceable.

If a contract is perfected but invalid the same is void ab initio.

The principle of in pari delicto applies only to void contracts where

the cause, purpose or object of the contract is illegal (eg. Illegal
Contracts).

Not all valid contracts are obligatory because they are

unenforcreable. Void Contract vs. Unenforceable Contracts. The
latter is subject to ratification. The contract entered into by the
agent and another person without the consent of the principal is
UNENFORCEABLE because it is subject to ratification.

A rescissible contract is valid contract. In Art. 1381 par. 1 and 2,

the same must NOT be a disposition or encumbrance of REAL
PROPERTY otherwise it is not a rescissible contract but an
UNENFORCEABLE CONTRACT.

Voidable Contract. Valid but voidable. In resicissible contract the

contract is wiped out or nullified while in voidable contract the
contract is merely invalidated. In a void contract there is no need
for judicial declaration.

When the contract is entered into by two mentally insane, the

contract is unenforceable but when one of them is no long insane
and ratified the contract the same is voidable but if the other is

Page 17 of 20
also no long insane and ratified the contract, the same is now
VALID.

Art. 1403 par. 1 does not apply to a sale of a parcel of land by an

agent in behalf of an alleged principal without written
authorization. The contract is void. Applicable law is art. 1874 NCC.

Void Contracts. Par. 1 it is only the illegality of the cause which

invalidates the contract and not the motive of the contract. Motive
and cause are different concepts. But there are situations where
motive is the cause of the contract as when motive predetermines
the cause of the contract. This happens when motive is the only
reason of the cause of the contract. (hypo: daisy)

If the consideration stated in the contract is false, the same is void

for being an absolutely simulated contract. The object of the
contract must exist.

SALE

In a contract of sale, it is not required that the seller be the owner

of the object at the time of perfection. Instead the law provides
that upon the perfection of the contract that will only create an
obligation on the part of the seller to make the delivery and transfer
ownership of the property sold. Thus, if the seller did not comply
with the obligation of delivery and transfer of the thing sold, the
contract is not void but the failure will be considered a breach of
contract which will entitle the buyer to damages.

If the contract is valid at the time of perfection it cannot become

void later on. Any non-compliance of the contract is merely a
breach.

Nemo Dat Quod Non habet. If the seller is not the owner of the
thing sold, it cannot transfer title to the buyer. XPN innocent
purchaser for value.

Page 18 of 20
Double Sale. Requisites. Important! Both of the sale must be a
valid sale. Sale of a parcel of land to a foreigner void even if the
latter used a common law wife as a dummy.

Torts

St. Lukes Case. The Enrollment Contract will be the basis of St

Lukes liability to the students of the fire incident. In an enrollment
contract there are built in obligations as these obligations are
deemed incorporated in the contract without express stipulation.
The School has obligation of providing the student of an
environment that is adequate and conducive for learning. In that
environment the students must be constant ly free from any threat
to their lives. But the School is not an insurer of all risks. The school
will not be liable for any death injury or death happening inside the
school if it can be able to prove to exercise due diligence to prevent
injury or damage to the students. Burden of proof is with the
school.

Caravan Travel and Tours Ruling reiterated in Greenstar Express

vs Universal. If the situation will involve that the employer happens
to be the registered owner of the vehicle, the only burden of the
plaintiff is that the er is the registered owner of the vehicle. It is
now the ER who has the burden of proof to deny the existence of
the ER-EE relationship or the ER exercised due diligence in the
selection and supervision of the EEs.

Credit and Transaction

Difference between Real Estate Mortgage and Anti-Chresis. In the

latter, the creditor is always in possession of the immovable.
However, in a REM, the creditor may be in possession of the
immovable if it is expressly stipulated. In AC there must be an
express agreement authorizing the creditor to receive the fruits of
the immovable with a corresponding obligation to apply the same
to the principal. W/o this agreement the contract is not AC. In AC
as long as the debt is not paid in full, the creditor can maintain

Page 19 of 20
possession of the immovable and the debtor cannot compel the
return of the immovable.

If the creditor mortgagee is a bank it is the provision of the Sec.

47of the GBL will be applicable where there is always a right of
redemption whether the mortgage is judicial or extrajudicial. If the
mortgagor is a natural person, the redemption period is one year
but if it is a juridical person the period is. 3 mos. from the date of
sale or until the registration of the sale whichever comes first.

Pledge vs. Chattel Mortgage. The law allows a contract of pledge

to secure future transactions. A contract of Chattel Mortgage can
only secure existing indebtedness. No continuing contract of CM.

Page 20 of 20