3.civ Suggested Answers (1990-2006), Cracked, Word
3.civ Suggested Answers (1990-2006), Cracked, Word
3.civ Suggested Answers (1990-2006), Cracked, Word
ANSWERS TO BAR
EXAMINATION QUESTIONS
IN
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
FORWARD
This work is not intended for sale or commerce. This work is freeware. It may be freely copied and
distributed, nevertheless, PERMISSION TO COPY from the editors is ADVISABLE to protect the
all those who desire to have a deeper understanding of the issues touched by the Philippine Bar
Examinations and its trend. It is specially intended for law students from the provinces who, very
CIVIL LAW
often, are recipients of deliberately distorted notes from other unscrupulous law schools and
students. Share to others this work and you will be richly rewarded by God in heaven. It is also
ARRANGED BY TOPIC
We would like to seek the indulgence of the reader for some Bar Questions which are improperly
(1990
classified under a topic and for some topics whichare
2006)
improperly or ignorantly phrased, for the
authors are just Bar Reviewees who have prepared this work while reviewing for the Bar Exams
Table of Contents
GENERAL PRINCIPLES ....................................................................................................................................... 10
Civil law vs. Common Law (1997)
................................................................................................................................ 10 Effect of Obiter & Dissenting
Opinion; SC Decisions (1994)......................................................................................... 10 Effectivity of Laws (1990)
............................................................................................................................................ 10 Equity follows the Law
(2003)...................................................................................................................................... 10 Ignorance of the Law
vs. Mistake of Fact (1996)........................................................................................................... 11 Inferior Courts
Decisions (1994) .................................................................................................................................. 11 Prejudicial
Questions (1997)........................................................................................................................................ 11
PERSONS................................................................................................................................................................... 11
Change of Name; Under RA 9048 (2006)
...................................................................................................................... 11 Death; Effects; Simultaneous Death
(1998).................................................................................................................. 12 Death; Effects; Simultaneous
Death (1999).................................................................................................................. 12 Death; Effects;
Simultaneous Death (2000).................................................................................................................. 12 Juridical
Capacity vs. Capacity to Act (1996) ............................................................................................................... 12
Juridical Capacity; Natural Persons (1999) ..................................................................................................................
13
CONFLICT Waiver of Rights (2004)
OF LAWS............................................................................................................................................. 13
...............................................................................................................................................
Appilicable Laws; laws governing 13
contracts (1992)
..................................................................................................... 13 Applicable Laws; Arts 15, 16 & 17 (1998)
..................................................................................................................... 13 Applicable Laws; Arts 15, 16, 17
(2002)........................................................................................................................ 14 Applicable Laws; Capacity to Act
(1998)...................................................................................................................... 14 Applicable Laws; Capacity to Buy
Land (1995) ............................................................................................................ 15 Applicable Laws; Capacity to
Contract (1995).............................................................................................................. 15 Applicable Laws; capacity to
succeed (1991)............................................................................................................... 15 Applicable Laws; contracts
contrary to public policy (1996) ........................................................................................ 15 Applicable Laws; Contracts of
Carriage (1995) ............................................................................................................ 16 Applicable Laws; Labor Contracts
(1991) .................................................................................................................... 16 Applicable Laws; laws governing
marriages (1992) ..................................................................................................... 17 Applicable Laws; laws governing
marriages (2003) ..................................................................................................... 17 Applicable Laws; Sale of Real
Property (1995)............................................................................................................. 17 Applicable Laws; Succession;
Intestate & Testamentary (2001)................................................................................... 18 Applicable Laws; Sucession of
Aliens (1995)............................................................................................................... 18 Applicable Laws; Wills executed
abroad (1993) ........................................................................................................... 18 Definition; Cognovit; Borrowing
Statute; Characterization (1994) ................................................................................ 18 Definition; forum non-conveniens;
long-arm statute (1994) ......................................................................................... 19 Divorce; effect of divorce granted to
former Filipinos; Renvoi Doctrine (1997)............................................................. 19 Domiciliary theory vs. Nationality Theory
(2004).......................................................................................................... 19 Forum Non Conveniens & Lex Loci
Contractus (2002)................................................................................................. 19 Nationality Theory
(2004)............................................................................................................................................. 20 Naturalization
(2003) ................................................................................................................................................... 20 Theory;
significant relationships theory (1994)............................................................................................................ 20 Torts;
Prescriptive Period (2004) ................................................................................................................................. 21
ADOPTION................................................................................................................................................................. 21
Adoption; Use of Surname of her Natural Mother (2006)
.............................................................................................. 21 Inter-Country Adoption; Formalities
(2005).................................................................................................................. 21 Parental Authority; Rescission of
Adoption (1994) ...................................................................................................... 21 Qualification of Adopter
(2005).................................................................................................................................... 22 Qualification of
Adopter; Applicable Law (2001) .......................................................................................................... 22 Qualifications
of Adopter (2000) .................................................................................................................................. 22
Qualifications of Adopter (2003) ..................................................................................................................................
23
FAMILY Successional Rights of Adopted Child
CODE.......................................................................................................................................................... (2004)
23
..............................................................................................................
Emancipation 23
(1993).................................................................................................................................................... 23 Family
Code; Retroactive Application; Vested Rights (2000)........................................................................................ 24
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006) Family Home; Dwelling House (1994)
.......................................................................................................................... 24 Family; Constitutional Mandates; Divorce
(1991) ......................................................................................................... 24 Marriage; Annulment; Effects; Requisites Before
Remarriage (1990) ........................................................................... 24 Marriage; Annulment; Grounds
(1991)......................................................................................................................... 25 Marriage; Annulment; Judicial
Declaration (1993)........................................................................................................ 25 Marriage; Annulment; Legal Separation;
Prescription of Actions (1996) ...................................................................... 25 Marriage; Annulment; Proper Party
(1990)................................................................................................................... 26 Marriage; Annulment; Proper Party
(1995)................................................................................................................... 26 Marriage; Divorce Decree; Void Marriages
(1992) ........................................................................................................ 26 Marriage; Divorce Decrees; Filiation of Children
(2005) ............................................................................................... 26 Marriage; Divorce Decrees; Filipino Spouses becoming
Alien (1996)........................................................................... 27 Marriage; Divorce Decrees; Filipino Spouses becoming Alien
(1999)........................................................................... 27 Marriage; Donations by Reason of Marriage; Effect of Declaration of
Nullity (1996) ..................................................... 28 Marriage; Grounds; Declaration of Nullity: Annulment: Legal Separation:
Separation of Property (2003) ..................... 28 Marriage; Grounds; Nullity; Annulment; Legal Separation
(1997)................................................................................. 29 Marriage; Legal Separation; Declaration of Nullity
(2002)............................................................................................. 29 Marriage; Legal Separation; Grounds; Prescriptive Period
(1994) ................................................................................ 29 Marriage; Legal Separation; Mutual guilt (2006)
........................................................................................................... 29 Marriage; Non-Bigamous Marriages (2006)
.................................................................................................................. 30 Marriage; Property Relations; Void Marriages (1991)
................................................................................................... 30 Marriage; Psychological Incapacity
(1996)................................................................................................................... 30 Marriage; Psychological Incapacity
(2006)................................................................................................................... 31 Marriage; Psychological Incapacity
(2006)................................................................................................................... 31 Marriage; Requisites (1995)
......................................................................................................................................... 31 Marriage; Requisites (1999)
......................................................................................................................................... 32 Marriage; Requisites; Marriage
License (1996) ............................................................................................................ 32 Marriage; Requisites; Marriage License
(2002) ............................................................................................................ 33 Marriage; Requisites; Solemnizing Officers
(1994)....................................................................................................... 33 Marriage; Requisites; Void Marriage (1993)
................................................................................................................. 33 Marriage; Void Marriages (2004)
.................................................................................................................................. 34 Marriage; Void Marriages (2006)
.................................................................................................................................. 34 Marriage; Void Marriages; Psychological
Incapacity (2002) ......................................................................................... 35 Parental Authority; Child under 7 years of age
(2006) .................................................................................................. 35 Parental Authority; Special Parental Authority; Liability
of Teachers (2003)................................................................. 35 Parental Authority; Substitute vs. Special (2004)
......................................................................................................... 35 Paternity & Filiation (1999)
.......................................................................................................................................... 36 Paternity & Filiation; Artificial
Insemination; Formalities (2006) ................................................................................... 36 Paternity & Filiation; Common-Law
Union (2004)......................................................................................................... 36 Paternity & Filiation; Proofs; Limitations;
Adopted Child (1995)................................................................................... 36 Paternity & Filiation; Recognition of illegitimate
Child (2005)....................................................................................... 37 Paternity & Filiation; Rights of Legitimate Children (1990)
........................................................................................... 37 Presumptive Legitime (1999)
....................................................................................................................................... 38 Property Relations; Absolute
Community (1994) ......................................................................................................... 38 Property Relations; Ante Nuptial
Agreement (1995) ..................................................................................................... 39 Property Relations; Conjugal Partnership
of Gains (1998) ........................................................................................... 39 Property Relations; Marriage Settlement; Conjugal
Partnership of Gains (2005) .......................................................... 39 Property Relations; Marriage Settlements (1991)
......................................................................................................... 40 Property Relations; Marriage Settlements (1995)
......................................................................................................... 40 Property Relations; Obligations; Benefit of the Family
(2000) ...................................................................................... 41 Property Relations; Unions without Marriage (1992)
.................................................................................................... 41 Property Relations; Unions without Marriage (1997)
.................................................................................................... 41 Property Relations; Unions without Marriage (2000)
.................................................................................................... 42
SUCCESSION........................................................................................................................................................... 42
Amount of Successional Rights (2004)
........................................................................................................................ 42 Barrier between illegitimate &
legitimate relatives (1993) ............................................................................................. 42 Barrier between
illegitimate & legitimate relatives (1996) ............................................................................................. 43 Collation
(1993) ........................................................................................................................................................... 43
Disinheritance vs. Preterition (1993) ............................................................................................................................
43 Disinheritance; Ineffective (1999)
................................................................................................................................ 43 Disinheritance; Ineffective;
Preterition (2000) .............................................................................................................. 44
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006) Heirs; Intestate Heirs; Reserva Troncal (1995)
............................................................................................................. 44 Heirs; Intestate Heirs; Shares
(2003)............................................................................................................................ 45 Intestate Succession
(1992)......................................................................................................................................... 45 Intestate Succession
(1997)......................................................................................................................................... 45 Intestate Succession
(1998)......................................................................................................................................... 46 Intestate Succession
(1998)......................................................................................................................................... 46 Intestate Succession
(1999)......................................................................................................................................... 46 Intestate Succession
(2000)......................................................................................................................................... 46 Intestate Succession; Reserva
Troncal (1999) ............................................................................................................. 47 Legitime
(1997)............................................................................................................................................................ 47 Legitime;
Compulsory Heirs (2003).............................................................................................................................. 47 Legitime;
Compulsory Heirs vs. Secondary Compulsory Heirs (2005).......................................................................... 48 Preterition
(2001)......................................................................................................................................................... 48 Preterition;
Compulsory Heir (1999) ............................................................................................................................ 48 Proceedings;
Intestate Proceedings; Jurisdiction (2004) ............................................................................................. 48 Succession; Death;
Presumptive Legitime (1991) ........................................................................................................ 49 Wills; Codicil; Institution of
Heirs; Substitution of Heirs (2002).................................................................................... 49 Wills; Formalities (1990)
.............................................................................................................................................. 50 Wills; Holographic Wills;
Insertions & Cancellations (1996) ......................................................................................... 50 Wills; Holographic Wills; Witnesses
(1994).................................................................................................................. 50 Wills; Joint Wills (2000)
............................................................................................................................................... 50 Wills; Probate; Intrinsic Validity
(1990) ........................................................................................................................ 51 Wills; Probate; Notarial and Holographic
Wills (1997) .................................................................................................. 51 Wills; Revocation of Wills; Dependent Relative
Revocation (2003)............................................................................... 51 Wills; Testamentary Disposition
(2006)........................................................................................................................ 52 Wills; Testamentary Intent (1996)
................................................................................................................................ 52
DONATION ................................................................................................................................................................ 52
Donation vs. Sale
(2003).............................................................................................................................................. 52 Donations;
Condition; Capacity to Sue (1996) ............................................................................................................. 52 Donations;
Conditions; Revocation (1991)................................................................................................................... 53 Donations;
Effect; illegal & immoral conditions (1997)................................................................................................. 53 Donations;
Formalities; Mortis Causa (1990) ............................................................................................................... 54 Donations;
Formalities; Mortis Causa (1998) ............................................................................................................... 54 Donations;
Inter Vivos; Acceptance (1993) .................................................................................................................. 54 Donations;
Perfection (1998) ....................................................................................................................................... 54 Donations;
Requisites; Immovable Property................................................................................................................ 55 Donations;
Unregistered; Effects; Non-Compliance; Resolutory Condition (2006) ....................................................... 55 Donations;
Validity; Effectivity; for Unborn Child (1999) .............................................................................................. 55 Donations;
with Resolutory Condition (2003)............................................................................................................... 56
PROPERTY................................................................................................................................................................ 56
Accretion; Alluvion (2001)
........................................................................................................................................... 56 Accretion; Avulsion
(2003) .......................................................................................................................................... 56 Builder; Good
Faith (1992)........................................................................................................................................... 57 Builder;
Good Faith vs. Bad Faith (1999) ..................................................................................................................... 57
Builder; Good Faith vs. Bad Faith (2000)
..................................................................................................................... 57 Builder; Good Faith vs. Bad Faith;
Accession (2000) ................................................................................................... 58 Builder; Good Faith vs. Bad
Faith; Presumption (2001)................................................................................................ 58 Chattel Mortgage vs.
Pledge (1999) ............................................................................................................................. 58 Chattel Mortgage;
Immovables (1994).......................................................................................................................... 59 Chattel
Mortgage; Immovables (2003).......................................................................................................................... 59
Chattel Mortgage; Possession (1993) ..........................................................................................................................
60 Chattel Mortgage; Preference of Creditors (1995)
........................................................................................................ 60 Easement vs. Usufruct
(1995)...................................................................................................................................... 60 Easement; Effects;
Discontinuous Easements; Permissive Use (2005) ........................................................................ 61 Easement;
Nuisance; Abatement (2002) ...................................................................................................................... 61
Easements; Classification (1998).................................................................................................................................
62 Easements; Right of Way
Page 5Right
(1993).................................................................................................................................. 62 Easements; of of119
Way (2000).................................................................................................................................. 62 Easements; Right
of Way; Inseparability (2001) ........................................................................................................... 62
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006) Easements; Right of Way; Requisites (1996)
............................................................................................................... 63 Ejectment Suit vs. Cancellation of Title (2005)
............................................................................................................. 63 Ejectment Suit; Commodatum (2006)
.......................................................................................................................... 63 Extra-Judicial Partition; Fraud
(1990)........................................................................................................................... 63 Hidden Treasure (1995)
............................................................................................................................................... 64 Hidden Treasures (1997)
............................................................................................................................................. 64 Mortgage; Pactum
Commissorium (1999) .................................................................................................................... 64 Mortgage; Pactum
Commissorium (2001) .................................................................................................................... 65 Mortgage; Right of
Redemption vs. Equity of Redemption (1999) ................................................................................ 65 Nuisance; Family House; Not
Nuisance per se (2006) .................................................................................................. 65 Nuisance; Public Nuisance vs. Private
Nuisance (2005)............................................................................................... 65 Ownership; Co-Ownership (1992)
................................................................................................................................ 66 Ownership; Co-Ownership; Prescription
(2000) ........................................................................................................... 66 Ownership; Co-Ownership; Prescription (2002)
........................................................................................................... 67 Ownership; Co-Ownership; Redemption (1993)
........................................................................................................... 67 Ownership; Co-Ownership; Redemption (2000)
........................................................................................................... 67 Ownership; Co-Ownership; Redemption (2002)
........................................................................................................... 67 Possession
(1998)....................................................................................................................................................... 68 Property; Real vs.
Personal Property (1995) ................................................................................................................ 68 Property; Real vs. Personal
Property (1997) ................................................................................................................ 68 Sower; Good Faith/ Bad Faith (2000)
........................................................................................................................... 69 Usufruct
(1997)............................................................................................................................................................ 69
LAND TRANSFER & DEEDS............................................................................................................................... 69
Acquisition of Lands; Citizenship Requirement
(2003)................................................................................................. 69 Adverse Claims; Notice of Levy (1998)
........................................................................................................................ 69 Annotation of Lis Pendens; When Proper
(2001).......................................................................................................... 70 Foreshore Lands
(2000)............................................................................................................................................... 70 Forgery; Innocent
Purchaser; Holder in Bad Faith (2005)............................................................................................. 70 Forgery; Innocent
Purchaser; Mirror Principle (1991) .................................................................................................. 71 Fraud; Procurement
of Patent; Effect (2000) ................................................................................................................ 71 Homestead Patents;
Void Sale (1999) .......................................................................................................................... 71 Innocent Purchaser for
Value (2001)............................................................................................................................ 72 Mirror Principle (1990)
................................................................................................................................................. 72 Mirror Principle;
Forgery; Innocent Purchaser (1999) .................................................................................................. 73 Notice of Lis
Pendens (1995) ....................................................................................................................................... 73 Notice of Lis
Pendens; Transferee Pendente Lite (2002) .............................................................................................. 73 Prescription &
Laches; Elements of Laches (2000) ...................................................................................................... 74 Prescription &
Laches; Indefeasibility Rule of Torrens Title (2002) .............................................................................. 74 Prescription (1990)
...................................................................................................................................................... 75 Prescription; Real
Rights (1992) .................................................................................................................................. 75 Primary Entry Book;
Acquisitive Prescription; Laches (1998) ...................................................................................... 76 Reclamation of Foreshore
Lands; Limitations (2000) ................................................................................................... 76 Registration; Deed of
Mortgage (1994)......................................................................................................................... 77 Remedies; Judicial
Confirmation; Imperfect Title (1993) .............................................................................................. 77 Remedies; Judicial
Reconstitution of Title (1996) ........................................................................................................ 77 Remedies; Procedure;
Consulta (1994)........................................................................................................................ 77 Remedies; Reconveyance
vs. Reopening of a Decree; Prescriptive Period (2003)........................................................ 78 Remedies; Reconveyance;
Elements (1995) ................................................................................................................ 78 Remedies; Reconveyance;
Prescriptive Period (1997) ................................................................................................. 79 Remedies; Reopening of a
Decree; Elements (1992).................................................................................................... 79 Torrens System vs. Recording
of Evidence of Title (1994) ........................................................................................... 80 Unregistered Land (1991)
............................................................................................................................................
CONTRACTS 80
............................................................................................................................................................ 80
Consensual vs. Real Contracts; Kinds of Real Contracts (1998)
.................................................................................. 80 Consideration; Validity
(2000)...................................................................................................................................... 80 Contract of Option;
Elements (2005)............................................................................................................................ 81 Inexistent
Contracts vs. Annullable Contracts (2004)................................................................................................... 81
Nature of Contracts; Obligatoriness (1991)..................................................................................................................
81 Nature of Contracts; Privity of Contract (1996)
............................................................................................................ 82
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006) Nature of Contracts; Relativity of
Contracts (2002) ...................................................................................................... 82 Rescission of Contracts;
Proper Party (1996) .............................................................................................................. 82
OBLIGATIONS ......................................................................................................................................................... 83
Aleatory Contracts; Gambling
(2004)........................................................................................................................... 83 Conditional Obligations (2000)
.................................................................................................................................... 83 Conditional Obligations (2003)
.................................................................................................................................... 83 Conditional Obligations; Promise
(1997) ..................................................................................................................... 84 Conditional Obligations; Resolutory
Condition (1999) ................................................................................................. 84 Extinguishment; Assignment of Rights
(2001) ............................................................................................................. 84 Extinguishment; Cause of Action
(2004)...................................................................................................................... 85 Extinguishment; Compensation
(2002) ........................................................................................................................ 85 Extinguishment; Compensation vs.
Payment (1998) .................................................................................................... 85 Extinguishment; Compensation/Set-
Off; Banks (1998) ................................................................................................ 85 Extinguishment; Condonation (2000)
.......................................................................................................................... 85 Extinguishment; Extraordinary
Inflation or Deflation (2001)......................................................................................... 86 Extinguishment; Loss (1994)
....................................................................................................................................... 86 Extinguishment; Loss;
Impossible Service (1993) ....................................................................................................... 86 Extinguishment; Novation
(1994)................................................................................................................................. 87 Extinguishment; Payment
(1995) ................................................................................................................................. 87 Liability; Lease; Joint
Liability (2001) .......................................................................................................................... 87 Liability; Solidary
Liability (1998)................................................................................................................................. 87 Liability; Solidary
Obligation (1992)............................................................................................................................. 88 Liability; Solidary
Obligation; Mutual Guaranty (2003) ................................................................................................. 88 Loss of the thing
due; Force Majeure (2000) ................................................................................................................ 88 Non-Payment of
Amortizations; Subdivision Buyer; When justified (2005)................................................................... 89 Period; Suspensive
Period (1991)................................................................................................................................ 89
TRUST......................................................................................................................................................................... 89
Express Trust; Prescription (1997)
.............................................................................................................................. 89 Implied Trust
(1998)..................................................................................................................................................... 90 Trust;
Implied Resulting Trust (1995)........................................................................................................................... 91
SALES.......................................................................................................................................................................... 91
Assignment of Credit vs. Subrogation
(1993)............................................................................................................... 91 Conditional Sale vs. Absolute Sale
(1997).................................................................................................................... 91 Contract of Sale vs. Agency to Sell
(1999) ................................................................................................................... 91 Contract of Sale; Marital Community
Property; Formalities (2006) ............................................................................... 91 Contract to Sell
(2001)................................................................................................................................................. 92 Contract to Sell
vs. Contract of Sale (1997).................................................................................................................. 92 Contract to Sell;
Acceptance; Right of First Refusal (1991).......................................................................................... 92 Double Sales
(2001)..................................................................................................................................................... 92 Double Sales
(2004)..................................................................................................................................................... 93 Equitable
Mortgage (1991).......................................................................................................................................... 93 Equitable
Mortgage vs. Sale (2005).............................................................................................................................. 93 Immovable
Property; Rescission of Contract (2003) .................................................................................................... 94 Maceda Law
(2000)...................................................................................................................................................... 94 Maceda Law;
Recto Law (1999).................................................................................................................................... 95 Option Contract
(2002) ................................................................................................................................................ 95 Option Contract;
Earnest Money (1993) ....................................................................................................................... 95 Perfected Sale;
Acceptance of Earnest Money (2002) .................................................................................................. 95 Redemption; Legal;
Formalities (2001) ........................................................................................................................ 96 Redemption; Legal;
Formalities (2002) ........................................................................................................................ 96 Right of First Refusal;
Lessee; Effect (1996) ................................................................................................................ 96 Right of First Refusal;
Lessee; Effect (1998) ................................................................................................................ 97 Right of Repurchase
(1993) ......................................................................................................................................... 97 Transfer of
Ownership; Non-Payment of the Price (1991)............................................................................................. 97 Transfer of
Ownership; Risk of Loss (1990) ................................................................................................................. 97
LEASE.......................................................................................................................................................................... 97
Extinguishment; Total Distruction; Leased Property (1993)
......................................................................................... 97 Implied New Lease
(1999)............................................................................................................................................ 98 Lease of Rural
Lands (2000) ........................................................................................................................................ 98 7 of 119
Page
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006) Leasee & Lessor; Rights and Obligations
(1990) ......................................................................................................... 98 Leasee; Death Thereof; Effects (1997)
......................................................................................................................... 98 Option to Buy; Expired
(2001)...................................................................................................................................... 98 Sublease vs. Assignment of
Lease; Rescission of Contract (2005) .............................................................................. 99 Sublease; Delay in Payment of
Rentals (1994) ............................................................................................................. 99 Sublease; Sublessee; Liability
(1999) ........................................................................................................................ 100 Sublease; Sublessee; Liability
(2000) ........................................................................................................................ 100 Sublease; Validity; Assignment of
Sublease (1990) ................................................................................................... 100
COMMON CARRIERS.......................................................................................................................................... 100
Extraordinary Diligence (2000)
.................................................................................................................................. 100
AGENCY ................................................................................................................................................................... 101
Agency (2003)
........................................................................................................................................................... 101 Agency vs.
Sale (2000) .............................................................................................................................................. 101 Agency;
coupled with an interest (2001) .................................................................................................................... 101
Agency; Guarantee Commission (2004).....................................................................................................................
101 Agency; Real Estate Mortgage (2004)
........................................................................................................................ 101 Appointment of Sub-Agent
(1999).............................................................................................................................. 102 General Agency vs.
Special Agency (1992)................................................................................................................ 102 Powers of the
Agent (1994)........................................................................................................................................
PARTNERSHIP 102 Termination; 103
......................................................................................................................................................
Effect of Death of Agent (1997)
Composition of .............................................................................................................
Partnerships; Spouses; Corporations 103 (1994)
.................................................................................... 103 Conveyance of a Partners Share Dissolution
(1998).................................................................................................. 103 Dissolution of Partnership (1995)
.............................................................................................................................. 103 Dissolution of Partnership;
Termination (1993).......................................................................................................... 104 Effect of Death of
Partner (1997)................................................................................................................................ 104 Obligations of a
Partner (1992) .................................................................................................................................. 104 Obligations of
aC Partner;
OMMODATUM Industrial&Partner MUTUUM (2001) ..................................................................................................... 104
.................................................................................................................................... 104
Commodatum (1993)
................................................................................................................................................. 104 Commodatum
(2005) ................................................................................................................................................. 105
Commodatum vs. Usufruct (1998) .............................................................................................................................
105 Mutuum vs. Commodatum (2004)
.............................................................................................................................. 106 Mutuum; Interests
(2001)........................................................................................................................................... 106 Mutuum;
Interests (2002) ...........................................................................................................................................
DEPOSIT................................................................................................................................................................... 106 107
Mutuum;
Compensation; Interests (2004) ...........................................................................................................................................
Bank Loan
106
(1997).............................................................................................................................. 107 Deposit; Exchange
(1992).......................................................................................................................................... 107
SURETY.................................................................................................................................................................... 107
Recovery of Deficiency (1997)
................................................................................................................................... 107
ANTICHRESIS........................................................................................................................................................ 107
Antichresis (1995)
..................................................................................................................................................... 107
PLEDGE .................................................................................................................................................................... 108
Pledge (1994)
............................................................................................................................................................ 108 Pledge
(2004) ............................................................................................................................................................ 108
Pledge; Mortgage; Antichresis (1996) ........................................................................................................................ 108
QUASI-CONTRACT..............................................................................................................................................
108
Quasi-Contracts; Negotiorium Gestio (1992)
............................................................................................................. 109 Quasi-Contracts; Negotiorium Gestio
(1993) ............................................................................................................. 109 Quasi-Contracts; Negotiorium
Gestio (1995) ............................................................................................................. 109 Quasi-Contracts; Solutio
Indebiti
TORTS (2004) ....................................................................................................................
& DAMAGES 110
........................................................................................................................................... 110
Collapse of Structures; Last Clear Chance
(1990)...................................................................................................... 110 Damages
(1994)......................................................................................................................................................... 111
Damages arising from Death of Unborn Child (1991)
................................................................................................. 111 Damages arising from Death of Unborn Child
(2003) ................................................................................................. 111 DeathPage 8 Indemnity of 119
(1994).............................................................................................................................................. 111
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006) Defense; Due Diligence in Selection
(2003)................................................................................................................ 112 Filing of Separate Civil Action; Need for
Reservation (2003) ...................................................................................... 112 Fortuitous Event; Mechanical Defects (2002)
............................................................................................................. 112 Liability; Airline Company; Non-Performance of an
Obligation (2004)........................................................................ 112 Liability; Airline Company; Non-Performance of an Obligation
(2005)........................................................................ 113 Liability; Employer; Damage caused by Employees (1997)
........................................................................................ 113 Liability; owner who was in the vehicle (1996)
........................................................................................................... 114 Liability; owner who was in the vehicle (1998)
........................................................................................................... 114 Liability; owner who was in the vehicle (2002)
........................................................................................................... 114 Moral Damages & Atty Fees (2002)
............................................................................................................................ 114 Moral Damages; Non-Recovery Thereof
(2006) .......................................................................................................... 115 Quasi-Delict (1992)
.................................................................................................................................................... 115 Quasi-Delict (2005)
.................................................................................................................................................... 115 Quasi-Delict; Acts contrary
to morals (1996) ............................................................................................................. 115 Quasi-Delict; Mismanagement of
Depositors Account (2006).................................................................................... 116 Vicarious Liability (1991)
........................................................................................................................................... 116 Vicarious Liability (2001)
........................................................................................................................................... 117 Vicarious Liability (2002)
........................................................................................................................................... 117 Vicarious Liability (2004)
........................................................................................................................................... 117 Vicarious Liability (2006)
........................................................................................................................................... 117 Vicarious Liability; Public Utility
(2000) ..................................................................................................................... 118
INTELLECTUAL PROPERTY ........................................................................................................................... 118
Intellectual Creation
(2004)........................................................................................................................................ 118
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
SUGGESTED ANSWER:
(2) a. If the testator is a foreigner residing in
the Philippines and he executes his will in the
Philippines, the law of the country of which he
is a citizen or Philippine law will govern the
formalities.
b. If the testator is a foreigner and executes his
will in a foreign country, the law of his place of
residence or the law of the country of which he
is a citizen or the law of the place of execution,
or Philippine law will govern the formalities
(Articles 17. 816. 817. Civil Code).
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
SUGGESTED ANSWER:
Yes, the will may be probated in the Philippines Wills;
b. In the Probate;
case ofNotarial a foreigner, and his national law
insofar as the estate of Eleanor is concerned. Holographic
Johnny,
shall govern with no Wills
known
substantive(1997)
living relatives,
validity whether he
While the Civil Code prohibits the execution of executed
executes ahis notarial
will in willthe
giving all his estate
Philippines or in to a
Joint wills here and abroad, such prohibition his sweetheart.
foreign country.One day, he had a serious
applies only to Filipinos. Hence, the joint will Wills;
altercation Holographic
with his sweetheart. Wills; Insertions
A few days &
which is valid where executed is valid in the Cancellations
Vanessa
later, he was on(1996)
died introducedApril 14,to1980, leavinglady
a charming behind
Philippines but only with respect to Eleanor. a holographic
who later became will which
a dearisfriend.
entirely Soonwritten,
after, he
Under Article 819, it is void with respect to dated andasigned
executed holographic in her willownexpressly
handwriting. revoking
ALTERNATIVE ANSWER:
Manuel whose joint will remains void in the However,
the notarial it contains
will and so insertions
designating and his new
The will cannot be probated in the Philippines,
Philippines despite being valid where cancellations
friend as sole which heir. One are daynot authenticated
when he was by
even though valid where executed, because it
executed. her signature.
clearing up hisFor desk, thisJohnny
reason, the probate
mistakenly of
burned,
is prohibited under Article 818 of the Civil Code
Vanessa's
along with will
other was opposed
papers, theby hercopy
only relatives
of his
and declared void under Article 819, The SUGGESTED
who stood ANSWER:
holographic towill.
inherit by her intestacy.
Hisoriginally
business associate, May
prohibition should apply even to the American Yes, the will as written may be
Vanessa's
Eduardo holographic will be probated?
wife because the Joint will is offensive to public probated.knew The well the contents
insertions of the will were
and alterations
Explain.
which was shown to him by Johnny the day
policy. Moreover, it is a single juridical act void since ANSWER:
SUGGESTED they were not authenticated byitthe
which cannot be valid as to one testator and was
The executed.
probate of A
thefew days
notarial after
full signature of Vanessa, under Art. 814, NCC.will the
will burning
prosper. The
Wills;
void as toProbate;
the other. Intrinsic incident,
holographic Johnny
will died.
cannot Both
The original will, however, remains validbe wills
admitted were to sought
probate to
Validity
H died (1990)
leaving a last will and testament be probated
because a holographicin two
holographic willseparate
will can petitions.
is notonly be Will
invalidated by
wherein it is stated that he was legally married either
probated or both
ALTERNATIVE upon
the unauthenticated petitions
ANSWER:evidence prosper?
of the willoritself
insertions unless
alterations
to W by whom he had two legitimate children A It depends.
there
(Ajeroisv.aCA,
As a rule, acopy.
photographic
236 SCRA 468].
holographic
But since will
theis not
and B. H devised to his said forced heirs the adversely affected
holographic will was lost and there was no by Insertions or
entire estate except the free portion which he cancellations which were not
other copy, it cannot be probated and therefore authenticated by
gave to X who was living with him at the time the full signature
ADDITIONAL
the notarial ANSWERS:of the testator (Ajero v. CA,
will will be admitted to probate
In said will he explained that he had been 1.
of his death. 236In the
SCRA
because there case
468). isHowever,
of Gan vs. Yap
no revoking when will.the
(104 insertion
Phil 509), or
estranged from his wife W for more than 20 cancellation
the execution amounts and the to revocation
contents ofofa the lost will,
or
years and he has been living with X as man Art.814 of the holographic
destroyed NCC does not willapply
may but not Art.be 830.
and wife since his separation from his NCC. Art. 830
proved by the of thebareNCC does not
testimony require the
of witnesses
legitimate family. testator
who haveto authenticate
seen or read hissuch
cancellation
will. The for will the
In the probate proceedings, X asked for the effectivity of a revocation
itself must be presented otherwise it shall effected through
issuance of letters testamentary in accordance suchproduce
cancellation
no effect. (Kalaw The v. lawRelova,
regards132 the SCRA
with the will wherein she is named sole 237). In the
document itself Kalaw
as materialcase,proof theof original
executor. This was opposed by W and her holographic
authenticity. will designated
Moreover, in only
orderonethat heiraas the
will
(a) Should the will be admitted in said probate
children. onlymaysubstantial
be revoked provision which was will,
by a subsequent altered it isby
(b) Is the said devise to X
proceedings?
substituting
necessary thethat original
the latterheirwillwith beanother
valid and heir.
(c) Was it proper for the trial court to consider
valid?
Hence,
executed
Wills; if thewith
Holographic unauthenticated
the formalities
Wills; cancellation
required for
the intrinsic validity of the provisions of said
amounted
the
Witnesses making to(1994)
a ofrevocation
aVicente
will. The of the should
latter will, the will
will? Explain
SUGGESTED your answers,
ANSWER: On his deathbed, was executing a will.
maypossess
not beall probated because itvalid
had already
(a) Yes, the will may be probated if executed In the room were Carissa, Carmela, will
the requisites of a Comelio
according to the formalities prescribed by law. been revoked.
whether it be ordinary or a holographic will,
and Atty. Cimpo, a notary public. Suddenly,
and should be probated
there was a street brawl which caught in order that the
(b) The institution giving X the free portion is revocatory
Comelio's clauseprompting
attention, thereof may him produce
to look out
not valid, because the prohibitions under Art. effect. In the case at
the window. Cornelio did not see Vicente bar, since the sign a
739 of the Civil Code on donations also apply to will.holographic
SUGGESTED
Is the ANSWERS:
will valid?will itself cannot be presented,
testamentary dispositions (Article 1028, Civil a) Yes,
it cannotThe therefore
will is valid. The lawSince
be probated. doesit not
Code), Among donations which are considered require
cannot a witness
be probated, to actually
it cannot seerevoke
the testator
the
void are those made between persons who signnotarial
the will. It is sufficient
will previously writtenifby the thewitness
were guilty of adultery or concubinage at the could have seen the act of signing had he
decedent.
time of the donation. chosen
2. On thetobasis do so of theby Rules
casting his eyes
of Court, Ruleto76, the
(c) As a general rule, the will should be admitted b) Yes,
proper the
Sec.direction. will is valid.
6, provides that no Applying
will shall the be "test
proved of
in probate proceedings if all the necessary position", although Comelio
as a lost or destroyed will unless its did not actually
requirements for its extrinsic validity have been see provisions
Vicente sign are the will,and
clearly Cornelio
distinctly wasprovedin the
met and the court should not consider the proper position to see Vicente
by at least two (2) credible witnesses. sign if Cornelio
intrinsic validity of the provisions of said will. so wished.
Hence, if we abide strictly by the two-
However, the exception arises when the will in Wills; Jointrule
witness Wills to prove a lost or destroyed
effect contains only one testamentary (2000)
Manuel, a Filipino,
will, the holographic and will his
which American
Johnny wife
disposition. In effect, the only testamentary Eleanor, executed a
allegedly mistakenly burned, cannot Joint Will in Boston,
be
POSSIBLE ADDITIONAL ANSWERS: Massachusetts when they were residing in said
disposition underofthe
a. In the case a will is the
Filipino giving Philippine
citizen, of the probated, since there is only one witness,
free portion to X, since legitimes are provided city.Eduardo,
The law of Massachusetts
who can be called to testify as to allows the
law shall govern substantive validity whether execution of joint wills. Shortly thereafter,
by
he law. Hence,his
executes the trial
will in court
the may consider
Philippines or the
in a the existence of the will. If the holographic
9 October 1985. 139 SCRA Eleanor died. Can the said revoked
Will be probated
intrinsic validity
foreign country.
206).
of the provisions of said will. will, which purportedly, the earlierin
(Nuguid v. Nuguid, etal.. No. L23445, June 23, the notarial
Philippines for the
will cannot be proved becausesettlement of ofher
1966, 17 SCRA; Nepomuceno v. CA, L-62952, estate? (3%)
the absence of the required witness, then
the petition for the probate of the notarial
will should prosper.
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
due to formal defects. Assuming that a copy of excludedthe by a legitimate son of the decedent [Art.
is available,
first will may it now be admitted to probate Civil Code].
887, New This follows the principle that the
and given effect? Why? descendants exclude the ascendants from
SUGGESTED ANSWER: inheritance.
Yes, the first will may be admitted to probate
and given effect. When the testator tore first Wills; Testamentary
will, he was under the mistaken belief that the Intent (1996)
Alfonso, a bachelor without any descendant or
second will was perfectly valid and he would ascendant, wrote a last will and testament in
not have destroyed the first will had he known which he devised." all the properties of which I
that the second will is not valid. The revocation may be possessed at the time of my death" to
by destruction therefore is dependent on the his favorite brother Manuel. At the time he
validity of the second will. Since it turned out wrote the will, he owned only one parcel of
that the second will was invalid, the tearing of land. But by the time he died, he owned twenty
the first will did not produce the effect of parcels of land. His other brothers and sisters
ALTERNATIVE ANSWERS:
revocation. This is known as the doctrine of insist that his will should pass only the parcel of
No, the first will cannot be admitted to probate.
dependent relative revocation (Molo v. Molo, land he owned at the time it was written, and
While it is true that the first will was successfully
90 Phil 37.) did not cover his properties acquired, which
revoked by the second will because the second SUGGESTED ANSWER:
will was later denied probate, the first will was, should
Manuelbe by intestate
is correct succession.
because Manuel
under Art. 793, NCC,
nevertheless, revoked when the testator claims otherwise. Who is correct? Explain.
property acquired after the making of a will
destroyed
(Diaz it after
v. De executing
Leon, 43 Philthe413
second invalid shall only pass thereby, as if the testator had
[1922]).
will. possessed it at the time of making the will,
Wills; Testamentary
should it expressly appear by the will that such
Disposition
Don died after(2006)
executing a Last Will and
was his intention. Since Alfonso's intention to
Testament leaving his estate valued at P12
devise all properties he owned at the time of
Million to his common-law wife Roshelle. He is
his death expressly appears on the will, then
survived by his brother Ronie and his half-
all the 20 parcels of land are included in the
(1) Was
sister Don's testamentary disposition of his
Michelle.
estate in accordance with the law on DONATION
devise.
succession? Whether you agree or not, explain Donation vs.
SUGGESTED
your Explain.Yes, Don's testamentary
ANSWER:
answer.
Sale
a) May(2003)
a person sell something that does not belong
disposition of his estate is in accordance with
him? Explain. b) May a person donate
to
the law on succession. Don has no compulsory
something that does not belong
heirs not having ascendants, descendants nor
to him? Explain. 5%
a spouse [Art. 887, New Civil Code]. Brothers SUGGESTED ANSWER:
and sisters are not compulsory heirs. Thus, he (a) Yes, a person may sell something which
can bequeath his entire estate to anyone who does not belong to him. For the sale to be
is not otherwise incapacitated to inherit from valid, the law does not require the seller to be
him. A common-law wife is not incapacitated the owner of the property at the time of the
under the law, as Don is not married to anyone. sale. (Article 1434, NCC). If the seller cannot
(2) If Don failed to execute a will during his
transfer ownership over the thing sold at the
lifetime, as his lawyer, how will you distribute
SUGGESTED After paying the legal
ANSWER: (2.5%) time of delivery because he was not the owner
his estate? Explain. (b) As a general
obligations of the estate, I will give Ronie, as thereof, he shall rule, a person
be liable cannotofdonate
for breach contact.
full-blood brother of Don, 2/3 of the net estate, something which he cannot dispose of at the
twice the share of Michelle, the half-sister who time of the donation (Article 751, New Civil
shall receive 1/3. Roshelle will not receive Code).
anything as she is not a legal heir [Art. 1006
New Civil Code].
(3) Assuming he died intestate survived by his
brother Ronie, his half-sister Michelle, and his
legitimate son Jayson, how will you distribute
SUGGESTED
his estate?ANSWER: Jayson
Explain. will be entitled to the
(2.5%)
entire P12 Million as the brother and sister will
be excluded by a legitimate son of the
decedent. This follows the principle of
proximity, where "the nearer excludes the Wills; Revocation of Wills; Dependent
(4) Assuming further he died intestate,
farther." Relative Revocation (2003)
survived by his father Juan, his brother Ronie, Mr. Reyes executed a will completely valid as
his half-sister Michelle, and his legitimate son to form. A week later, however, he executed
Jayson, how will you distribute his estate? another will which expressly revoked his first
SUGGESTED
Explain. ANSWER: Jayson will still be entitled to
(2.5%) will, which he tore his first will to pieces. Upon
the entire P12 Million as the father, brother
the death of Mr. Reyes, his second will was
and sister will be
presented for probate by his heirs, but it was
denied probate
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
SUGGESTED ANSWER: property to Ferdinand who then sued to
As judge, I will grant the motion to dismiss. recover the land from the city government.
Armando has no personality to bring the action Will the suit prosper?
for annulment of the sale to Conrado. Only an SUGGESTED ANSWER:
aggrieved party to the contract may bring the Ferdinand has no right to recover the land. It is
action for annulment thereof (Art. 1397. NCC). true that the donation was revocable because
While Armando is heir and successor-in-interest of breach of the conditions. But until and unless
of his mother (Art. 1311, NCC), he [standing in the donation was revoked, it remained valid.
place of his mother) has no personality to annul Hence, Spouses Michael and Linda had no right
the contract. Both are not aggrieved parties on to sell the land to Ferdinand. One cannot give
account of their own violation of the condition what he does not have. What the donors should
of, or restriction on, their ownership imposed have done first was to have the donation
by the donation. Only the donor or his heirs annulled or revoked. And after that was done,
ALTERNATIVE ANSWER:
would have the personality to bring an action they could validly have disposed of the land in
A. Until the contract of donation has been
to revoke a donation for violation of a condition favor of Ferdinand.
resolved or rescinded under Article 1191 of the
thereof or a restriction thereon. (Garrido u. CA, Civil Code or revoked under Art. 764 of the Civil
236 SCRA 450). Consequently, while the donor Code, the donation stands effective and valid.
or his heirs were not parties to the sale, they Accordingly, the sale made by the donor to
have the right to annul the contract of sale Ferdinand cannot be said to have conveyed
because
ALTERNATIVEtheir rights are prejudiced by one of
ANSWER: title to Ferdinand, who, thereby, has no cause
the judge,
As contracting
I will parties
grant thethereof [DBPtov.dismiss.
motion CA, 96 of action for recovery of the land acting for and
SCRA 342; Teves
Compliance with avs.condition
PHHC. 23 SCRA 114].
imposed by a B. Thebehalf.
in his donation is onerous, And being onerous,
Since Armando
donor gives riseis neither the donor
to an action nor heirthe
to revoke of what applies is the law on contracts, and not
the donor,under
donation he has no764,
Art. personality to bring the
NCC. However, the the law on donation (De Luna us. Abrigo, 81
action
right offor annulment.
action belongs to the donor. Is SCRA 150). Accordingly, the prescriptive
transmissible to his heirs, and may be period for the filing of such an action would be
exercised against the donee's heirs. Since the ordinary prescriptive period for contacts
Armando is an heir of the donee, not of the which may either be six or ten depending upon
donor, he has no legal capacity to sue for whether it is verbal or written. The filing of the
Alternative Answer:
revocation of the donation. Although he is not case five years later is within the prescriptive
The law on donation lays down a special
seeking such revocation but an annulment of period and, therefore, the action can prosper,
prescriptive period in the case of breach of
the sale which his mother, the donee, had
condition, which is four years from non-
executed in violation of the condition imposed
compliance thereof (Article 764 Civil Code).
by the donor, an action for annulment of a
Since the action has prescribed, the suit will
contract may be brought only by those who are Donations;
not prosper, Effect; illegal & immoral
principally or subsidiarily obliged thereby (Art. conditions
Are (1997) of illegal and immoral
the effects
1397, NCC). As an exception to the rule, it has conditions on simple donations the same as
been held that a person not so obliged may those effects that would follow when such
nevertheless ask for annulment if he is conditions are imposed on donations con causa
prejudiced
Such detrimentin hisor rights regarding
prejudice cannot one of the
be shown SUGGESTED ANSWER:
onerosa?
contracting parties (DBP us. CA.
by Armando. As a forced heir, Armando's 96 SCRA 342 No, they don't have the same effect. Illegal or
and other cases) and can show the
interest in the property was, at best, a mere detriment impossible conditions in simple and
which would The
expectancy. result
saletoof
himthefrom
land the contract
by his mother in remuneratory donations shall be considered as
which he had no intervention, (Teves
did not impair any vested right. The fact vs. PHHC, not imposed. Hence the donation is valid. The
23 SCRA 1141).
remains that the premature sale made by his donation
Donations; willCondition;
be considered as simple or pure.
Capacity
mother (premature because only half of the The
to Suecondition
Sometime (1996) or mode
in 1955, Tomasis merely
donatedan accessory
a parcel of
period of the ban had elapsed) was not disposition, and its nullity
land to his stepdaughter doessubject
Irene, not affect
to thethe
voidable at all, none of the vices of consent donation,
condition thatunless
she it
mayclearly appears
not sell, that
transfer or the
under Art. 139 of the NCC being present. donor
cede the would
same not have years.
for twenty made Shortly
the donation
Donations; Donations thecon causa onerosa is governed by
Hence, the motionConditions;
to dismiss should be without
thereafter, mode
he orIncondition.
died. 1965, because she
law on obligations and contracts, under which
Revocation
Spouses (1991)and Linda donated a 3-
granted. Michael needed money for medical expenses, Irene
hectare residential land to the City of Baguio an impossible or Illicit condition annuls the
sold the land to Conrado. The following year,
on the condition that the city government obligation dependent upon the condition where
Irene died, leaving as her sole heir a son by the
would build thereon a public park with a boxing the condition is positive and suspensive. If the
name of Armando. When Armando learned that
arena, the construction of which shall impossible or illicit condition is negative, it is
the land which he expected to inherit had been
commence within six (6) months from the date simply considered as not written, and the
sold by Irene to Conrado, he filed an action
the parties ratify the donation. The donee obligation is converted into a pure and simple
against the latter for annulment of the sale, on
accepted the donation and the title to the one. However, in order that an illegal condition
the ground that it violated the restriction
property was transferred in its name. Five may annul a contract, the impossibility must
imposed by
ADDITIONAL Tomas. Conrado filed a motion to
ANSWER:
years elapsed but the public park with the exist at the time of the creation of the
dismiss, on the ground that Armando did not
boxing arena was never started. Considering obligation; a supervening impossibility does not
have the legal capacity to sue. If you were the
the failure of the donee to comply with the affect the existence of the obligation.
Judge, how will you rule on this motion to
condition of the donation, the donor-spouses dismiss? Explain.
sold the
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
No. In simple or pure donation, only the illegal or irrevocable, the latter is revocable. In the problem
impossible condition is considered not written the clauses
given, all or conditions mentioned in the deed
but the donation remains valid and becomes of donation, except one, are consistent with the
free from conditions. The condition or mode rule of irrevocability and would have sustained
being a mere accessory disposition. Its nullity the view that the donation is inter vivos and
does not affect the donation unless it clearly therefore valid. The lone exception is the clause
appears that the donor would not have made which reserves the donor's right to sell the
the donation without the mode or condition. On property at any time before his death. Such a
the other hand, onerous donation is governed reservation has been held to render the
by the rules on contracts. Under Article 1183, donation revocable and, therefore, becomes a
Impossible or illegal conditions shall annul the donation mortis causa (Puig vs. Penqflorida, 15
obligation which depends upon them. In these SCRA 276, at p. 286). That the right was not
Donations;
cases, both Formalities;
the obligationMortis
and the condition exercised is immaterial; its reservation was an
Causa
B
are void.(1990)
donated to M a parcel of land in 1980. B implied recognition of the donor's power to
made the deed of donation, entitled Donation nullify the donation anytime he wished to do so.
Inter Vivos, in a public instrument and M Consequently, it should have been embodied in
accepted the donation in the same document. Donations; Inter Vivos;
a last will and testament. The suit for nullity will
It was provided in the deed that the land Acceptance
On January 21,(1993)
1986, A executed a deed of
thus prosper.
donated shall be immediately delivered to M donation inter vivos of a parcel of land to Dr. B
and that M shall have the right to enjoy the who had earlier constructed thereon a building
fruits fully. The deed also provided that B was in which researches on the dreaded disease
reserving the right to dispose of said land AIDS were being conducted. The deed,
during his (Bs) lifetime, and that M shall not acknowledged before a notary public, was
register the deed of donation until after Bs handed over by A to Dr. B who received it. A
death. Upon Bs death, W, Bs widow and sole few days after, A flew to Davao City.
heir, filed an action for the recovery of the Unfortunately, the airplane he was riding
SUGGESTED ANSWER:
donated land, contending crashed on landing killing him. Two days after
Yes, the action will prosper. that the donation
The donation is a
made by B is a donation mortis causa and not a the unfortunate accident. Dr. B, upon advice of
donation mortis causa because the reservation
donation interofvivos. Will said action prosper? a lawyer, executed a deed acknowledged
is to dispose all the property donated and, SUGGESTED ANSWER:
Explain your answer. before
No, theadonation
notary public
is notaccepting
effective. the
Thedonation.
law
therefore, the donation is revocable at will.
Is the donation effective? Explain
requires that the separate acceptance your of
answer.
the
Accordingly, the donation requires the
execution of a valid will, either notarial or donee of an immovable must be done in a
holographic (Arts 755, 728 NCC). public document during the lifetime of the
Donations; Formalities; Mortis donor (Art. 746 & 749, Civil Code) In this case,
Causa (1998)
Ernesto donated in a public instrument a parcel B executed the deed of acceptance before a
of land to Demetrio, who accepted it in the notary public after the donor had already died.
same document. It is there declared that the Donations;
donation shall take effect immediately, with Perfection
On (1998)
July 27, 1997, Pedro mailed in Manila a
the donee having the right to take possession letter to his brother, Jose, a resident of Ilollo
of the land and receive its fruits but not to City, offering to donate a vintage sports car
dispose of the land while Ernesto is alive as which the latter had long been wanting to buy
well as for ten years following his death. from the former. On August 5, 1997, Jose called
Moreover, Ernesto also reserved in the same Pedro by cellular phone to thank him for his
deed his right to sell the property should he generosity and to inform him that he was
decide to dispose of it at any time - a right sending by mail his letter of acceptance. Pedro
which he did not exercise at all. After his death, never received that letter because it was never
Ernesto's heirs seasonably brought an action to mailed. On August 14, 1997, Pedro received a
SUGGESTED ANSWER: 1. Is there
telegram a perfected
from Iloilo informing him that Jose
recover the will
Yes, the suit property,
prosper as alleging that the
the donation did 2.
had been killed in a be
Will
donation?your answer
[2%] theaccident
road same if the
Joseday
did mail
donation was void as it did not comply
not comply with the formalities of a will. with the
In this his acceptance letter
before (August 13, 1997) but it was received by
formalities of a
instance, the will.
fact Willthe
that thedonor
suit prosper? [5%]
did not intend Pedro in Manila days after Jose's death? [3%]
to transfer ownership or possession of the
donated property to the donee until the donor's
death, would result in a donation mortis causa
and in this kind of disposition, the formalities of
a will should be complied with, otherwise, the
donation is void. In this Instance, donation
mortis causa embodied only in a public
ALTERNATIVE ANSWER:
instrument without
One of the essential distinctionsthe formalities
between of vivos
a donation inter a will
could
and not mortis
a donation have causa transferred ownership
is that while the former is of
disputed property to another.
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
hand, assuming that the sports car costs less than
Code which requires the donation and the acceptance
then the donation maybe oral, but still, the
P5,000.00 thereof to be in a public instrument in order to
simultaneous delivery of the car is needed and be valid. The acceptance not being in a public
there being none, the donation was never instrument, the part which is not onerous is
perfected. void and Rosa may recover it from Amanda.
SUGGESTED ANSWER:
2. Yes, the answer is the same. If Jose's mail Donations; Unregistered; Effects; Non-
containing his acceptance of the donation was Compliance; Resolutory Condition (2006)
received by Pedro after the former's death, Spouses Alfredo and Racquel were active
then the donation is still void because under members of a religious congregation. They
Article 734 of the Civil Code, the donation is donated a parcel of land in favor of that
perfected the moment the donor knows of the congregation in a duly notarized Deed of
acceptance by the donee. The death of Jose Donation, subject to the condition that the
before Pedro could receive the acceptance Minister shall construct thereon a place of
indicates that the donation was never worship within 1 year from the acceptance of
perfected. Under Article 746 acceptance must the donation. In an affidavit he executed on
Donations; Requisites;
be made during the lifetime of both the donor
Immovable
Anastacia Property
purchased a house and lot on behalf of the congregation, the Minister
and the donee. accepted the donation. The Deed of Donation
installments at a housing project in Quezon However, instead of constructing a place of
of Deeds.
worship,
City. Subsequently, she was employed in was not registered with the Registry
the Minister constructed a bungalow on the property
California and a year later, she executed a deed he used as his residence. Disappointed with the
of donation, duly authenticated by the Minister, the spouses revoked the donation and
Philippine Consulate in Los Angeles, California, demanded that he vacate the premises immediately.
donating the house and lot to her friend But the Minister refused to leave, claiming that aside
Amanda. The latter brought the deed of from using the bungalow as his residence, he is also
donation to the owner of the project and using it as a place for worship on special occasions.
discovered that Anastacia left unpaid Under the circumstances, can Alfredo and Racquel
installments and real estate taxes. Amanda evict the Minister and recover possession of
paid these so that the donation in her favor can the property? If you were the couple's counsel,
be registered in the project owner's office. Two what action you take to protect the interest of
months later, Anastacia died, leaving her ALTERNATIVE
your clients?ANSWER:
(5%)
mother Rosa as her sole heir. Rosa filed an Yes, Alfredo and Racquel can bring an action for
action to annul the donation on the ground that ejectment against the Minister for recovery of
Amanda did not give her consent in the deed of possession of the property evict the Minister and
SUGGESTED ANSWER: recover possession of the property. An action for
donation or in a
Rosa is correct separate
because thepublic
donation instrument.
is void. annulment of the donation, reconveyance and
Amanda replied that the donation
The property donated was an immovable. was Foran
damages should be filed to protect the interests of
onerous one because she had to
such donation to be valid, Article 749 of thepay unpaid
my client. The donation is an onerous donation and
installments
New Civil Codeandrequires
taxes; both
hencetheher acceptance
donation and therefore shall be governed by the rules on
may be implied. Who is correct? (2%)
the acceptance to be in a public instrument. contracts. Because there was no fulfillment or
There being no showing that Amanda's compliance with the condition which is resolutory in
acceptance was made in a public instrument, character, the donation may now be revoked and all
the donation is void. The contention that the rights which
(Central the donee
Philippine may have acquired
University, G.R. No.under it July
112127,
donation is onerous and, therefore, need not ALTERNATIVE
17,1995). ANSWER:
shall be deemed lost and extinguished
comply with Article 749 for validity is without No, an action for ejectment will not prosper. I
merit. The donation is not onerous because it would advice Alfredo and Racquel that the
did not impose on Amanda the obligation to Minister, by constructing a structure which also
pay the balance on the purchase price or the serves as a place of worship, has pursued the
arrears in real estate taxes. Amanda took it objective of the donation. His taking up
upon herself to pay those amounts voluntarily. residence in the bungalow may be regarded as
For a donation to be onerous, the burden must a casual breach and will not warrant revocation
ALTERNATIVE ANSWER:
be imposed by the of the donation. Similarily, therefore, an action
Neither Rosa nor donor
Amanda on the
is donee.
correct.In the
The
problem, isthere is noonly
such for revocation
SUGGESTED of the donation will be denied (C.
ANSWER:
donation onerous as burden imposed
to the portion by
of the 1.Yulo
None.
the donorcorresponding
on the donee. J. & There is nov.perfected
Sons, Inc. donation.
Roman Catholic Under
Bishop,
property to The
the donation
value of not the 2004).
Article 748 of the Civil Code, the donation of a
being onerous, it must comply with the G.R. No. 133705, March 31, 2005; Heirs
installments and taxes paid by Amanda. movable may be made
formalities of Article 749. ofRozendo Sevilla v. Deorally
Leon,or in writing.
G.R. If
No. 149570,
the value
March 12, of the personal property donated
The portion in excess thereof is not onerous. Donations; Validity; Effectivity; for
exceeds five thousand pesos, the donation and
The onerous portion is governed by the rules Unborn
Elated Child
that her (1999)
sister who had been married
the acceptance shall be made in writing.
on contracts which do not require the for five years was pregnant for the first time,
Assuming that the value of the thing donated,
acceptance by the donee to be in any form. Alma donated P100,000.00 to the unborn
a vintage sports car, exceeds P5,000.00 then
The onerous part, therefore, is valid. The child. Unfortunately, the baby died one hour
the donation and the acceptance must be in
portion which is not onerous must comply with after delivery. May Alma recover the
writing. In this instance, the acceptance of Jose
Article 749 of the New Civil P100.000.00 that she
was not in writing, therefore, the donation is
void. Upon the other
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
had donated to said baby before it was born not been fixed in the Deed of Donation, the donee is
that the baby died? Stated otherwise, is the
considering yet
not default in his obligation until the period is
donation valid and binding? Explain. (5%) fixed by order of the court under Article 1197
SUGGESTED ANSWER: of the New Civil Code. Since the period has not
The donation is valid and binding, being an act been fixed as yet, the donee is not yet default,
favorable to the unborn child, but only if the and therefore the donor has no cause of action
baby had an intra-uterine life of not less than to revoke the donation. (Dissenting opinion of
seven months and provided there was due Davide, CJ, Central Philippine University v.
acceptance of the donation by the proper Court of Appeals, 246 SCRA 511 [1995])
person representing said child. If the child had
less than seven months of intra-uterine life, it
PROPERTY
is not deemed born since it died less than 24
hours following its delivery, in which ease the Accretion;
ALTERNATIVE ANSWER:
donation never became effective since the Alluvion
For many (2001)
years, the Rio Grande river deposited
Even if the baby had an intra-uterine life of soil along its bank, beside the titled land of
donee never became a person, birth being
more than seven months and the donation was Jose. In time, such deposit reached an area of
determinative of personality.
properly accepted, it would be void for not one thousand square meters. With the
having conformed with the proper form. In permission of Jose, Vicente cultivated the said
order to be valid, the donation and acceptance area. Ten years later, a big flood occurred in
of personal property exceeding five thousand the river and transferred the 1000 square
pesos should be in writing. (Article 748, par. 3) meters to the opposite bank, beside the land of
Donations; with Resolutory Agustin. The land transferred is now contested
Condition
In 1950, Dr.(2003)
Alba donated a parcel of land to by Jose and Agustin as riparian owners and by
Central University on condition that the latter SUGGESTED ANSWER:
Vicente who claims ownership by prescription.
must establish a medical college on the land to Jose should prevail. The disputed area, which is
Who should prevail,? Why? (5%)
be named after him. In the year 2000, the heirs an alluvion, belongs by right of accretion to
of Dr. Alba filed an action to annul the donation Jose, the riparian owner (Art. 457 CC). When, as
and for the reconveyance of the property given in the problem, the very same area" was
donated to them for the failure, after 50 years, "transferred" by flood waters to the opposite
of the University to established on the property bank, it became an avulsion and ownership
a medical school named after their father. The thereof is retained by Jose who has two years to
University opposed the action on the ground of remove it (Art. 459, CC). Vicente's claim based
prescription and also because it had not used on prescription is baseless since his possession
the property for some purpose other than that was by mere tolerance of Jose and, therefore,
SUGGESTED ANSWER: did not adversely affect Jose's possession and
stated in the donation. Should the opposition
The donation may be revoked. The non-established of
thethe
University to theon
action of Dr. Albas ownership (Art. 537, CC). Inasmuch as his
of medical college the donated propertyheirs
was
beresolutory
sustained? Explain. possession is merely that of a holder, he cannot
a condition imposed on the donation by Accretion;
acquire the disputed area by prescription.
the donor. Although the Deed of Donation did not fix Avulsion
Andres is (2003)
a riparian owner of a parcel of
the time for the established of the medical college, registered land. His land, however, has
the failure of the donee to establish the medical gradually diminished in area due to the current
college after fifty (50) years from the making of the of the river, while the registered land of Mario
donation should be considered as occurrence of the on the opposite bank has gradually increased
resolutory condition, and the donation may now be in area by 200square meters.
revoked. While the general rule is that in case the (a) Who has the better right over the 200-
period is not fixed in the agreement of the parties, square meter area that has been added to
the period must be fixed first by the court before the (b) May registered
Marios a third person
land,acquire said
Mario or 200-square
Andres?
obligation may be demanded, the period of fifty (50) meter land by prescription?
years was more than enough time for the donee to
comply with the condition. Hence, in this case, there
is no more need for the court to fix the period
because such procedure with the condition. (Central
ANOTHER SUGGESTED ANSWER:
Philippine University v. CA. 246 SCRA 511).
The donation may not as yet revoked. The
establishment of a medical college is not a
resolutory or suspensive condition but a
charge, obligation, or a mode. The non-
compliance with the charge or mode will give
the donor the right to revoke the donation
within four (4) years from the time the charge
(10)
was years fromto
supposed the timebeen
have the cause of action
complied with, or
accrued. Inasmuch
to enforce as the
the charge by time to established
specific performance
the medical
within ten college has
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
had lost it by operation of law. That portion of the land
reasonable rent, if the owner of the land does not
become
has part of the public domain. appropriate
choose to the building after proper
indemnity. The parties shall agree upon the
SUGGESTED ANSWER: terms of the lease and in case of
b. Yes, a third party may acquire by
disagreement, the court fix the terms thereof.
prescription the 200 square meters, increase Builder; Good Faith vs. Bad
in area, because it is not included in the Faith (1999)
Torrens Title of the riparian owner. Hence, this (a) Because of confusion as to the boundaries
P.D.
doesNo.not1529.involve
The fact that
the the riparian land is
imprescriptibility of the adjoining lots that they bought from the
registered
conferred by does not 47,
Section automatically make the
same subdivision company, X constructed a
accretion thereto a registered land. (Grande v.
house on the adjoining lot of Y in the honest
CA, 115 521 (1962); Jagualing v. CA, 194 SCRA
Builder; Good belief that it is the land that he bought from
607 (1991).
Faith
A owns(1992)
a parcel of residential land worth the subdivision company. What are the
(b) Suppose
respective X was
rights of Xinand
good faithrespect
Y with but Y knew
to X's
P500,000.00 unknown to A, a residential house
that X was
house? (3%)constructing on his (Y's) land but
costing P 100,000.00 is built on the entire
simply kept quiet about it, thinking perhaps
parcel by B who claims ownership of the land.
that he could get X's house later. What are the
Answer all the following questions based on the
respective rights of the parties over X's house
premise that B is a builder in good faith and A
in this case? (2%)
is a landowner in good faith. a) May A acquire
the house built by B? If so, how? b) If the land
of the in
increased building
value toof P500,000.00
the house thereon,
by reasonwhat
amount should be paid by A in order to
acquire the house from B?
c) Assuming that the cost of the house
was P90,000.00 and not P100,000.00, may A
d)
requireIfBBtovoluntarily buys the land as desired
buy the land?
by A, under what circumstances may A
nevertheless be entitled to have the house
e)
removed?In what situation may a "forced lease"
arise between A and B. and what terms and
conditions would govern the lease?
Give reasons for your answers.
SUGGESTED ANSWER:
(a) Yes, A may acquire the house build by B by
paying indemnity to B. Article 448 of the Civil
Code provides that the owner of the land on
which anything has been built, sown or planted
in good faith, shall have the right to
appropriate as his own the works, sowing or
planting, after payment of the indemnity
provided for in Articles 546 and 546 of the Civil
(b) A should pay B the sum of P50,000. Article
Code.
548 of the Civil Code provides that useful
expenses shall be refunded to the possessor in
good faith with the right of retention, the
person who has defeated him in the possession
having the option of refunding the amount of
the expenses or of paying the increase in value SUGGESTED ANSWER:
which the thing may have acquired by reason a. Mario has a better right over the 200 square
thereof. The increase in value amounts to meters increase in area by reason of accretion,
(c) Yes, A may require B to buy the land.
P50,000.00. applying Article 457 of the New Civil Code,
Article 448 of the Civil Code provides that the which provides that to the owners of lands
owner of the land on which anything has been adjoining the banks of rivers belong the
built in good faith shall have the right to oblige accretion which they gradually received from
the one who built to pay the price of the land if Andres cannot
the effects of the claim
currentthat
of thethe increase in
waters.
(d) If B agrees
its value is not to buy land but
considerably failsthan
more to pay,
thatAof Marios land is his own, because such is an
can have the house removed ( Depra vs.
the building, accretion and not result of the sudden
Dumlao, 136 SCRA 475). detachment of a known portion of his land and
(e) Article 448 of the Civil Code provides that its attachment to Marios land, a process called
the builder cannot be obliged to buy the land if avulsion. He can no longer claim ownership
its value is considerably more than that of the of the portion of his registered land which was
building. In such case, he shall pay gradually and naturally eroded due to the
current of the river, because he
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
The case of Pecson v. CA, 244 SCRA 407, is square not meters. Jose claims that Mike is a builder in
the problem.
applicable to In the Pecson case, the builder because
bad faith he should know the boundaries of his
was the owner of the land who later lost the lot, and demands that the portion of the house
property at a public sale due to non-payment which encroached on his land should be
of taxes. The Court ruled that Article 448 does destroyed or removed. Mike replies that he is a
not apply to the case where the owner of the builder in good faith and offers to buy the land
land is the builder but who later lost the land; occupied by the building instead. 1) Is Mike a
not being applicable, the indemnity that should builder in good faith or bad faith? Why? (3%) 2)
SUGGESTED ANSWER:
be paid to the buyer must be the fair market Whose preference should be followed? Why?
1) Yes, Mike is a builder in good faith. There is
value of the building and not just the cost of (2%)
no showing that when he built his house, he
construction thereof. The Court opined in that
ALTERNATIVE ANSWER: knew that a portion thereof encroached on
case that to do otherwise would unjustly enrich
Pedro is correct. In Pecson vs. CA, it was held Jose's lot. Unless one is versed in the science of
the new owner of the land.
that Article 546 of the New Civil Code does not surveying, he cannot determine the precise
specifically state how the value of useful boundaries or location of his property by
improvements should be determined in fixing merely examining his title. In the absence of
the amount of indemnity that the owner of the contrary proof, the law presumes that the
land should pay to the builder in good faith. encroachment was done in good faith
Since the objective of the law is to adjust the 2} None of
[SUGGESTED
Technogas
the
ANSWER: preferences shall be followed.
Phils, v. CA, 268 SCRA 5, 15
rights of the parties in such manner as "to The
(a) preference
The
(1997)]. rights of ofY,Mike cannotofprevail
as owner the lot,becauseand of
administer complete justice to both of them in under Article of448
X, as builder of thethereon,
a house Civil Code, it is the
are governed
such a way as neither one nor the other may owner
by Art.of 448theofland the who
CivilhasCode thewhich
option or choice,
grants to Y
enrich himself of that which does not belong to not the builder.
the right to choose On between
the othertwo hand, the option
remedies: (a)
SUGGESTED ANSWER: belongs
appropriate to Jose,
the house he cannot demand that
by indemnifying X for theits
him",
2) Pablothe isCourt ruled
entitled to that the basis
the rentals of
of the
reimbursement should be the fair market value portion
value plus of the house encroaching
whatever on his landthe
necessary expenses be
building. As the owner of the land, Pablo is also destroyed or removed because
latter may have incurred for the preservation this is not one
of
thethe building.
owner of the building being an accession of the options
land, orgiven by lawXtotothe
(b) compel buy owner
the landof the if
thereto. However, Pedro who is entitled to land.
the price Theofowner the land may is notchoose betweenmore
considerably the
retain the building is also entitled to retain the appropriation
than the value of ofwhat
thewas builtIfafter
house. it is,payment
then X
rentals. He, however, shall apply the rentals to of indemnity,
cannot be obliged or totocompel
buy thethe landbuilder
but hetoshall pay
the indemnity payable to him after deducting for
pay thereasonable
land if therent, value and of thein land case is not of
ALTERNATIVE
reasonable ANSWER:
cost of repair and maintenance. ALTERNATIVE
SUGGESTED ANSWER:
considerably
disagreement,
ANSWER:
more
the than
court that
shall of
fix the building.
terms of
Pablo is entitled to the rentals. Pedro became 1) Since
(b) Mikethe cannot be considered
lot owner Y is deemed a builder
to be in
Otherwise,
the the builder shall his
pay rent without
for the
a possessor in bad faith from the time he bad lease.
good faith(Art
faith because
453), Xheasbuilt the party house
in good faith
learned that the land belongs to Pablo. As portion
first of the land encroached.
may determining
(a) remove thethe
corners houseand and
boundariesdemand of
such, he loses his right to the building, his lot to make for
indemnification suredamages
that his construction
suffered by him, was
including the fruits thereof, except the right of within
or (b) the demand perimeter paymentof hisofproperty.
the value Heofcould the
Builder; Good Faith vs. Bad Faith;
retention. have done this with
house plus reparation for damages (Art the help of a geodetic
447, in
Accession
a) Demetrio (2000)
knew that a piece of land engineer
relation to as Art 454).an ordinary
Y continuesprudent as ownerand of
bordering the beach belonged to Ernesto. reasonable man would
the lot and becomes, under the second do underoption, the
However, since the latter was studying in 2)
ownerJose'sof thepreference
circumstances. house as should be followed.
well, after he pays the He
Europe and no one was taking care of the land, may
Builder; have
sums demanded. Good the building
Faith vs. removed
Bad at the
Demetrio occupied the same and constructed expense
Faith
In good(2000) of Mike,
faith, Pedroappropriate
constructedthe building as
a five-door
thereon nipa sheds with tables and benches his own, oblige
commercial building Mikeon tothebuyland
theoflandPablo andwho ask
which he rented out to people who want to for
wasdamages
also in good in addition
faith. When to Pablo
any ofdiscovered
the three
have a picnic by the beach. When Ernesto options. (Articles 449,
the construction, 450, to
he opted 451, CC)
appropriate the
returned, he demanded the return of the land. Chattel
building byMortgagepaying Pedrovs. the cost thereof.
Demetrio agreed to do so after he has Pledge
Distinguish
However, (1999) a contract
Pedro insists that of he
chattel
shouldmortgage
be paid
removed the nipa sheds. Ernesto refused to let from a contract of pledge. (2%)
the current market value of the building, which
SUGGESTED ANSWER: SUGGESTED ANSWER:
Demetrio
Ernesto isremove
correct,the nipa sheds
is a on the ground was
In much
Demetrio builder in bad higher because of inflation. 1) Who
a contract of CHATTEL MORTGAGE
that
faith because he knew beforehandbythat
these already belonged to him rightthe
of is correct Pedro or Pablo?(1%) 2) In the
possession belongs to the creditor, while in a
accession. Who is correct? (3%)
land belonged to Ernesto, under Article 449 of meantime that Pedropossession
is not yet paid, who to is the
contract ofANSWER:
SUGGESTED PLEDGE belongs
the New Civil Code, one who builds on the land entitled to the rentals of the building, Pedro or
debtor.
Pablo is correct. Under Article 448 of the New
Pablo?
A chattel (1%)
of another loses what is built without right to Civil Codemortgage
in relation is to
a formal
Article contract
546, the while builder a
indemnity. Ernesto becomes the owner of the pledge is a real contract.
in good faith is entitled to a refund of the
nipa sheds by right of accession. Hence, necessary and useful expenses incurred by
Ernesto is well within his right in refusing to A
him, contract
or the increaseof chattel mortgage
in value whichmust the land be
Builder; Good Faith
allow the removal vs. sheds.
of the nipa Bad Faith; recorded
may have in a acquired
public instrumentby reason to bind of third
the
Presumption
Mike (2001)
built a house on his lot in Pasay City. Two persons
improvement, while aatcontractthe option of pledge
of the must be in
landowner.
years later, a survey disclosed that a portion of a public instrument containing
The builder is entitled to a refund of the description of
the building actually stood on the neighboring the thing pledged and the
expenses he incurred, and not to the market date thereof to bind
land of Jose, to the extent of 40 third
valuepersons.
of the improvement
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
Chattel Mortgage; foreclosure sale, foreclosed the mortgage and
Immovables
Vini constructed (1994)
a building on a parcel of land house
acquiredand lot. Learning of the proceedings
Xs
he leased from Andrea. He chattel mortgaged conducted by the bank, Z is now demanding
the land to Felicia. When he could not pay that the bank reconvey to him Xs house or
Felicia. Felicia initiated foreclosure proceedings. pay Xs loan to him plus interests. Is Zs
Vini claimed that the building he had SUGGESTED ANSWER:
demand against the bank valid and
constructed on the leased land cannot be No,
sustainable? Why? is
Zs demand 5%not valid. A building is
validly foreclosed because the building was, by immovable or real property whether it is
SUGGESTED ANSWERS:
law, an immovable. Is Vini correct? erected by the owner of the land, by a
a) The Chattel Mortgage is void and cannot be usufructuary, or by a lessee. It may be treated
foreclosed because the building is an as a movable by the parties to chattel
immovable and cannot be an object of a mortgage but such is binding only between
chattel mortgage. them and not on third parties (Evangelista v.
b) It depends. If the building was intended Alto Surety Col, inc. 103 Phil. 401 [1958]). In
and is built of light materials, the chattel this case, since the bank is not a party to the
mortgage may be considered as valid as chattel mortgage, it is not bound by it, as far as
between the parties and it may be considered the Bank is concerned, the chattel mortgage,
in respect to them as movable property, since does not exist. Moreover, the chattel mortgage
it can be removed from one place to another. does not exist. Moreover, the chattel mortgage
But if the building is of strong material and is is void because it was not registered. Assuming
not capable of being removed or transferred that it is valid, it does not bind the Bank
without being destroyed, the chattel mortgage because it was not annotated on the title of the
c) If it cannot
is void and was the land which Vini chattel
be foreclosed.
ANOTHER SUGGESTED ANSWER:
land mortgaged
No, Zs demand to the bank.
against Z cannot
the bank demand
is not valid.
mortgaged, such mortgage would be void, or
that the Bank pay him the loan Z
His demand that the bank reconvey to him Xs extended to
at least unenforceable, since he was not the
If whatof was X, because the Bank was not
mortgaged as a chattel is the house presupposes that he has a real right privy to such loan
owner the land.
building, the chattel mortgage is valid as transaction.
over the house. All that Z has is a personal
between the parties only, on grounds of right against X for damages for breach of the
estoppel which would preclude the mortgagor contract of loan.
from assailing the contract on the ground that The treatment of a house, even if built on
its subject-matter is an immovable. Therefore rented land, as movable property is void
Vini's defense is untenable, and Felicia can insofar as third persons, such as the bank, are
foreclose the mortgage over the building, concerned. On the other hand, the Bank
observing, however, the procedure prescribed already had a real right over the house and lot
for the execution of sale of a judgment debtor's when the mortgage was annotated at the back
immovable under Rule 39, Rules of Court, of the Torrens title. The bank later became the
specifically, that the notice of auction sale owner in the foreclosure sale. Z cannot ask the
ALTERNATIVE ANSWER:
d) The problem that Vini mortgaged the land bank
should be published in a newspaper of general The answer to pay for Xs loan plus interest. There is
by way of a chattel mortgage is untenable. hinges on whether or not the bank
circulation. no privity of contract between Z and the bank.
Land can only be the subject matter of a real is an innocent mortgagee in good faith or a
estate mortgage and only an absolute owner of mortgagee in bad faith. In the former case, Zs
real property may mortgage a parcel of land. demand is not valid. In the latter case, Zs
(Article 2085 (2) Civil Code). Hence, there can demand against the bank is valid and
But
be no on the assumption that what was
foreclosure. sustainable.
mortgaged by way of chattel mortgage was Under the Torrens system of land registration,
the building on leased land, then the parties every person dealing with registered land may
are treating the building as chattel. A building rely on the correctness of the certificate of title
that is not merely superimposed on the ground and the law will not in any way oblige to him to
is an immovable property and a chattel look behind or beyond the certificate in order
mortgage on said building is legally void but to determine the condition of the title. He is
the parties cannot be allowed to disavow their not bound by anything not annotated or
contract on account of estoppel by deed. reflected in the certificate. If he proceeds to
However, if third parties are involved such buy the land or accept it as a collateral relying
Chattel Mortgage;
chattel mortgage is void and has no effect. on the certificate, he is considered a buyer or a
Immovables
X constructed (2003) mortgagee in good faith. On this ground, the
a house on a lot which he was leasing
However,
Bank acquiresa bank is nottitle
a clean an ordinary
to the landmortgagee.
and the
Y. Later,
from X executed a chattel mortgage over
Unlike private individuals, a bank is expected to
said house in favor of Z as security for a loan house.
exercise greater care and prudence in its
obtained from the latter. Still later, X acquired
dealings. The ascertainment of the condition of a
ownership of the land where his house was
property offered as collateral for a loan must be a
constructed, after which he mortgaged both
standard and indispensable part of its operation.
house and land in favor of a bank, which
The bank should have conducted further inquiry
mortgage was annotated on the Torrens
regarding the house standing Page on 59 of
the 119
land
Certificate of Title. When X failed to pay his considering that it was already
loan to the bank, the latter, being the highest
bidder at the
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
standing there before X acquired the title to the land.
was then valued only at P1 Million. Lawrence was
bank
The cannot be considered as a mortgagee in insolve
declared
good faith. On this ground, Zs demand against nt.
the Bank is valid and sustainable. Assuming that the aircraft was sold for Pl
Million, give the order of preference of the
Chattel Mortgage; creditors of Lawrence and distribute the
Possession
A, (1993)
about to leave the country on a foreign SUGGESTED
amount of ANSWER:
P1 Million.
assignment, entrusted to B his brand new car Assuming that the aircraft was sold for P1
and its certificate of registration. Falsifying A's Million, there is no order of preference. The P1
signature. B sold A's car to C for P200,000.00. C Million will all go to the bank as a chattel
then registered the car in his name. To mortgagee because a chattel mortgage under
complete the needed amount, C borrowed Art. 2241 (4) NCC defeats Art. 2244 (12) and
P100.000.00 from the savings and loan (14}. Art. 2241 (3) and (5) are not applicable
association in his office, constituting a chattel because the aircraft is no longer in the
Easement vs.
possession of the creditor.
mortgage on the car. For failure of C to pay the
Usufruct
1. What is (1995)
easement? Distinguish easement
amount owed, the savings and loan association
2. Can
from there be (a) an easement over a
usufruct.
filed in the RTC a complaint for collection with
usufruct? (b) a usufruct over an easement? (c)
application for issuance of a writ of replevin to
an easement over another easement? Explain.
obtain possession of the vehicle so that the
chattel mortgage could be foreclosed. The RTC
issued the writ of replevin. The car was then
seized from C and sold by the sheriff at public
auction at which the savings and loan
association was the lone bidder. Accordingly,
the car was sold to it. A few days later, A
arrived
SUGGESTEDfrom his foreign assignment. Learning
ANSWER:
of what happened
Under the prevailing to rulings
his car,of
A the
sought to
Supreme
recover possession and ownership of
Court, A can recover the car from the Savingsit from the
savings
and Loan and loan association.
Association providedCan A recover
he pays the his
car from
price the savings
at which and loan association?
the Association bought the car at
Explain
a public your answer.
auction. Under that doctrine, there has
been an unlawful deprivation by B of A of his
car and, therefore, A can recover it from any
person in possession thereof. But since it was
bought at a public auction in good faith by the
Savings and Loan Association, he must
ALTERNATIVE ANSWER:
reimburse the Association at the price for which
Yes, A can recover his car from the Savings
the car was bought.
and Loan Association. In a Chattel Mortgage,
the mortgagor must be the absolute owner of
the thing mortgaged. Furthermore, the person
constituting the mortgage must have the free
disposal of the property, and in the absence
thereof, must be legally authorized for the
purpose. In the case at bar, these essential
requisites did not apply to the mortgagor B,
Chattel
hence the Mortgage; Preference
Chattel Mortgage of valid.
was not
Creditors a(1995)
Lawrence, retired air force captain, decided
to go into the air transport business. He
purchased an aircraft in cash except for an
outstanding balance of P500,000.00. He
incurred an indebtedness of P300,000.00 for
repairs with an aircraft repair company. He also
borrowed P1 Million from a bank for additional
capital and constituted a chattel mortgage on
While on a test
the aircraft flight the
to secure the aircraft
loan. crashed
causing physical injuries to a third party who
was awarded damages of P200,000.00.
c) A house of prostitution
Irrespective of its location and how its business
(1%)
is conducted, it is a nuisance since it defies,
shocks and disregards decency and morality. It
is a public nuisance because of its injury to the
public.
d) A noisy or dangerous factory in a private
If the (1%)
land noise injuriously affects the health and
comfort of ordinary people in the vicinity to an
unreasonable extent, it is a nuisance. It is a
public nuisance because there is a tendency to
annoy the public. (Velasco v. Manila Electric
Co., G.R. No. L-18390, August 6, 1971)
e) Uncollected garbage
It will become a nuisance if it substantially
(1%)
impairs the comfort and enjoyment of the
adjacent occupants. The annoyance and the
smell must be substantial as to interfere
sensibly with the use and enjoyment by
persons of ordinary sensibilities. It is a public
nuisance because of its injury to the public.
Ownership; Co-
Ownership
A, B and C are (1992)
the co-owners in equal shares
of a residential house and lot. During their co-
ownership, the following acts were
respectively done by the co-owners: 1) A
then tilting
undertook to oneof
the repair side,
the to prevent the
foundation house from
of the
collapsing.
house, 2) B and C mortgaged the house
and lot to secure a loan. 3) B engaged a
contractor to build a concrete fence all
around the lot. 4) C built a beautiful
grotto in the garden. 5) A and C sold the
land to X for a very good price.
SUGGESTED ANSWER:
(a) The appeal is not meritorious. The trial
court ruled correctly in granting defendant's
motion to dismiss for the following reasons:
1. While there is the possibility that F, a former
lessee of the land was aware of the fact that C
was the bona fide
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
property based on the fact that the sale included the his obligation. However, the action was brought
half
one-pro-indiviso share. Pacifico had a notice of indicates
ten-year
within theprescriptive
on its face inperiod questprovided
for any hidden by law
lis pendens annotated on the title covering the defect oractions
wherein inchoate basedrighton which
written may contracts
property and ordered the cancellation of the subsequently
can be instituted. defeat a) hisWillright
the defense
thereto. prosper?
This is
notice of lis pendens. The notice of lis pendens the "mirror
Reason. (3%)principle'
b) What are of thethe Torrens
essentialsystem
could not be cancelled immediately because SUGGESTED
which makes
elements ANSWER:
of laches?
it possible (2%)for a forged deed to be
the title over the property was with a bank to No, the defense
the root of a goodwill title.not prosper. The problem
which the property had been mortgaged by did not give facts
Besides, it appears that spouses from which laches X and Ymay are be
Bart. Pacifico appealed the case. While the inferred. Mere delay
guilty of contributory negligence when they in filing an action,
appeal was pending and with the notice of lis standing
delivered this alone, OCTdoes to thenot constitute
mortgagee without laches
SUGGESTED
(Agra v. PNB.ANSWER:309 SCRA 509).
pendens still uncancelled, Bart sold the annotating
b) The fourthe mortgage
basic elements thereon. Between
of laches are; (1)
property to Carlos, who immediately caused them
conduct and onthe the innocent
part of purchaser
the defendant for value,
or of one
ALTERNATIVE
they should ANSWER:
bear
the cancellation of the notice of lis pendens, as under
If the buyer whom B, whohethe loss.
claims,
relied ongiving the teller riseA'sto the
title,
well as the issuance of a new title in his name. situation
was not aware of which of thecomplainant
adverse possession seeks a remedy; of
Is Carlos (a) a purchaser in good faith, or (b) a
SUGGESTED ANSWER: (2)
the delay
land by intheasserting
spousesthe X and complainant's
Y, then the rights,
transferee pendente lite? If
A. Carlos is a buyer in bad faith. The notice of your answer is (a), the
B. complainant
B has
latter cannotin hisrecover
favor thehaving propertyknowledge
had
thepresumption from of good or
how
lis can thewas
pendens right of annotated
still Pacifico as at co-owner
the backbeof notice
faith which of the candefendant's
only be overthrown conduct by and having
protected?
the title at the Explain.
time (5%)he bought the land from been
adequate afforded
proof an of badopportunity
faith. However, to institutenobody suit;
Bart. The uncancelled notice of lis pendens (3)
buyslack of knowledge
land without seeing the on property,
the parthence, of the
operates as constructive notice of its contents defendant
B could not that have the beencomplainant
unaware of such would assert
as well as interests, legal or equitable, included the
adverserightpossession.
on which If heafter bases his suit;
learning of suchand (4)
therein. All persons are charged with the injury
possession,or prejudice
B simply to closed
the defendant his eyesin andthedid event
Prescription & Laches; Indefeasibility
knowledge of what it contains. In an earlier relief
nothing is accorded
about it, then to the the complainant,
suit for or the suit
Rule of Torrens Title (2002)
case, it was held that a notice of an adverse is not held to be
reconveyance willbarred.
prosper as the buyer's bad
Way
Notice back Lis in 1948, Windas husband sold in
SUGGESTED
claim remains ANSWER: effective and binding faith willof have become evident.
(b) Even if the government favor of Verde Sportsa Center Corp. of (Verde) aa 10-
notwithstanding the lapse ofjoins the 30 C, this
dayswillfrom not Pendens
Rommel (1995)
was issued certificate title over
Carlos
alter is a transferee
the outcome pendente
of theThis lite
case insofar
so ismuch as hectare property belonging
parcel of land in Quezon City. One year later to their conjugal
its inscription in the registry. ruling even
Sanchos
because ofshare
estoppelin the asco-ownership
an express in the
provision land in partnership.
Rachelle, the legitimate The saleowner was ofmade the land, without
more applicable in a lis pendens.
is
Sec concerned
45 of Act because 496 and the Secland31 ofwas PD transferred
1529 that a Windas
discovered the fraudulent registration obtainedIn
knowledge, much less consent.
to him during
decree the pendency
of registration and ofthe thecertificate
appeal. of 1950,
by Rommel. WindaShe learned of the sale,
filed a complaint when she
against
B. Pacifico
title issuedcan inprotect
pursuance his right as a co-owner
thereof shall be discovered
Rommel for reconveyance the deed ofandsale caused among
the the
by pursuing his
conclusive upon appeal;and asking
against the allCourt of
persons, documents
annotation ofina notice her husbandsof lis pendens vaultonafter the his
Appeals
includingto the ordernational
the re-annotation
government of the andlis all demise.
certificateSoon of titleafter,issuedshe to Rommel.noticedRommel that the
pendens
brancheson the title
thereof, of Carlos;
whether and by invoking
mentioned by name construction
now invokes the of the sports complex
indefeasibility of hishad titlestarted.
Mirror
his right Principle;
of redemption
in the application or not. Forgery;
of Barts Innocent
share under Upon
consideringcompletion that oneof the construction
yearagainst
has already in 1952,
elapsed
Purchaser
The spouses
ALTERNATIVE
Articles 1620 (1999)
X the
ANSWER:
of andNew Y mortgaged
Civil Code. a piece of Winda
she tried nowbut files a suit
failed to get free Verde for the
membership
A. Carlos is a purchaser in good faith. A from
annulmentits issuance.
of the He
sale also on seeks
the the
ground that she
registered land to A, delivering as well the OCT privileges
cancellation in ofVerde.
the notice of LisInpendens. May
possessor in good faith has
to the latter, but they continued to possess and been defined as did not
SUGGESTED consent
ANSWER: to the sale. answer, Verde
one whothe is unaware that1/2there existsharvest
a flaw to the court cancel
A Notice
contends of
that, the
LisinPendens notice may
accordance of liswithpendens
be canceled
the Spanish even
cultivate land, giving of each before final judgment is rendered? Explain.
which
A in partialinvalidates
payment his acquisition
of their loan of to
thethe thing
latter, even Code
Civil beforewhich final Judgment
was then upon in force, properthe sale in
(Art. 526, NCC).
A, however, withoutGoodthe faith consists in
knowledge ofthe
X and Y, showing
1948 ofthat thetheproperty
notice is for didthenot purpose
needof her
possessors
forged a deed beliefof that
sale theof theperson from whom
aforesaid land in molesting or harassing
concurrence. Verde contends the adverse that in party
anyorcase
he
favorreceived
of himself,the thing got was a TCT thein owner of the and
his name, that
the the action notice hasof lis pendens is
prescribed ornot is necessary
barred by
same and could convey A.
P.D. Define
laches.No. Winda
to protect 1529)or explain
the right of the
rejoins the term
party
that her laches.
who caused title
Torrens it
then sold the land to B,hiswho title. In the the
bought caseland[at
bar], in question, while Carlos bought the B.
(2%)
to Decide
be
covering the case,
registered.
the (Section
property stating 77,
is your reasons and
indefeasible, for
relying on A's title, and who thereafter also got
subject property fromItBart your decision.
imprescriptible. (3%)
In this case, it is given that Rachelle is the
a TCT in his name. waswhileonly athennotice of lis
that the SUGGESTED ANSWER:
pendens was still annotated thereon, there was legitimate owner of the land in question. It can
spouses X and Y learned that their land had A. LACHES meansthat failure
SUGGESTED
also an ANSWER:
existing court order canceling the same. be said, therefore, whenor she neglect,
filed herfor an
been titled in B's name. May said spouses file unreasonable
The action
Hence, Carlos of
cannot X be andconsidered
Y against B for
as being notice of lis pendens her purpose was toof time,
and unexplained length
an action for reconveyance of the land in to do what, by exercising dueand diligence,
reconveyance
aware a flawofwhich
ofagainst the invalidates
land will [their] not prosper
the protect her interest in the land not justcould to
question
because B has b? Reason.
acquired a (5%)
clean title to the or should have been done earlier. It is
acquisition of the thing since the alleged flaw, molest Rommel. It is necessary to record the
property negligence
Lis pendensor toomission to assert a right within if a
the notice being an innocent
of lis pendens, was already purchaserbeing for reasonable time.
protect her interest because
A forged deed is an absolute
value. cancelled at the time of the purchase. nullity and (De Vera
she did not do it, there is a possibility that the v. CA, 305 SCRA 624
ordered
B. To protect his right overthat thethesubject B. While Article 1413 of the Spanish Civil Code
[1999])
conveys no title. The fact forged deed land will fall into the hands of an innocent
On this ground
property, Pacifico alone, Carlos can already be did not require the consent of the wife for the
was registered andshould have
a certificate timely
of titlefiled
wasan purchaser for value and in that event, the court
considered
action for a buyer in good
reconveyance and faith. (Po Lam
reinstated the v. validity of the sale, an alienation by the
issued in his name, did not operate to vest loses control over the land making any
Court
notice ofofAppeals,
lis pendens. 347 SCRA 86, [2000]). husband in fraud of the wife is void as held in
upon an ownership over the property of X and favorable judgment thereon moot and
Prescription & Laches; Elements
Y. The registration of the forged deed will not Uy
Notice Coque of Lis v. Pendens;
Navas, 45 Phil. 430 (1923).
Transferee
academic. For these reasons, the notice of lis
of
In Laches
an action (2000)
brought to collect
cure the infirmity. However, once the title to a sum of money Assuming
Pendente
Sancho and that
Lite
Pacificothe
(2002) alienation
are co-owners in 1948
of a parcelwas in
pendens may not be canceled.
based on a surety agreement,
the land is registered in the name of the forger the defense of fraud
of land. of Winda
Sancho and,
sold therefore,
the property makes
to Bart. the sale
laches
and title was raised
to the land asthereafter
the claim falls was filed
into themore to Verdesued
Pacifico void,Sanchothe action and Bart to set foraside the sale,
annulment of
than
handsseven of anyears
innocent frompurchaser
the maturity of
for value, the nonetheless, is already barred
the sale and reconveyance of the by
latter acquires a clean title thereto. A buyer of
a registered land is not
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
prescription and laches. More than 52 years have (a) The mortgage contract executed by O, if at all, is
elapsed
already from her discovery of the sale in voidable
only a contract since it involves a conjugal
1950.
ALTERNATIVE ANSWER: partnership property. The action to annul the
B. Windas claim that her Torrens Title covering same instituted in 1977, or eleven years after
the property is indefeasible and imprescriptible the execution of the sheriff's final sale, has
[does not hold water] is not tenable. The rule obviously prescribed because: 1) An action to
of indefeasibility of a Torrens Title means annul must be brought
a contract within
on the fourof(4)
ground years from
fraud
that after one year from the date of issue of the the date of discovery of the fraud. Since this
decree of registration or if the land has fallen is in essence an action to recover
into the hands of an innocent purchaser for ownership, it must be reckoned from the
value, the title becomes incontestable and date of execution of the contract or from
IMPRESCRIPTIBILITY, on the other hand, means
incontrovertible. the registration of the alleged fraudulent
that no title to the land in derogation of that of document with the assessor's office for the
the registered owner may be acquired by purpose of transferring the tax declaration,
adverse possession or acquisitive prescription this being unregistered land, (Bael u.
or that the registered owner does not lose by 2) IfIntermediatethe action is to be treated as an action to
Appellate Court G. R. L-74423
extinctive prescription his right to recover recover ownership of land, it would have
Jan.30, 1989 169 SCRA 617).
ownership and possession of the land. prescribed just the same because more than
The action in this case is for annulment of the 10 years have already elapsed since the date
sale executed by the husband over a conjugal SECOND ALTERNATIVE
of the execution ofANSWER:
the sale.
partnership property covered by a Torrens Title. (a) The action to recover has been barred by
Action on contracts are subject to acquisitive prescription in favor of M
prescription. considering that M has possessed the land
Prescription under a claim of ownership for ten (10) years
In 1960, an unregistered parcel of land was with a just title.
(1990)
mortgaged by owner O to M, a family friend, as (b) If M had secured a Torrens Title to the land,
collateral for a loan. O acted through his all the more S and P could not recover because
attorney-in-fact, son S, who was duly if at all their remedies would be:
authorized by way of a special power of
attorney, wherein O declared that he was the 1. A Petition to Review the Decree of
absolute owner of the land, that the tax Registration. This can be availed of within one
declarations/receipts were all issued in his (1) year from-the entry thereof, but only upon
name, and that he has been in open, the basis of "actual fraud." There is no showing
As O was unable
continuous to pay back
and adverse the loan
possession the that M committed actual fraud in securing his
in plus
interest for the past five [5) years, M had to 2. Antoaction
title in personam
the land; or against M for the
concept of owner.
foreclose the mortgage. At the foreclosure sale, reconveyance of the title in their favor. Again,
M was the highest bidder. Upon issuance of the this remedy is available within four years from
sheriffs final deed of sale and registration in the date of the discovery of the fraud but not
January, 1966, the mortgage property was later than ten (10) years from the date of
turned over to M's possession and control M registration of the title in the name of M.
has since then developed the said property. In
In
1967, 1977,
O died,after the bytenth
survived (10th)
sons S and P. death
anniversary of his father O. son P filed a suit to
annul the mortgage deed and subsequent sale
of the property, etc., on the ground of fraud. He
asserted that the property in question was
conjugal in nature actually belonging, at the
time of the mortgage, to O and his wife, W,
(a)
whoseIs the suit filed
conjugal by Pwent
share barred by prescription?
to their sons (S and
Explain
P) and to your
O. answer.
(b) After the issuance of the sheriff's final deed
of sale in 1966 in this case, assuming that M
applied for registration under the Torrens
System and was issued a Torrens Title to the
said property in question, would that added
SUGGESTED
fact have anyANSWER:
significant effect on your
(a) Under Art. 173 of the Civil Code, the action
conclusion? State your reason.
is barred by prescription because the wife had
only ten (10) years from the transaction and
during the marriage to file a suit for the
annulment of the mortgage deed. Alternative
Answers to (a) first Alternative Answer:
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
Decide on these claims, giving your The right to recover possession of registered land
reasons. ANSWER:
SUGGESTED does not prescribe because possession is just a
likewise
At this point in time, X cannot claim the right of necessary incident of ownership.
vested ownership over the Pangasinan parcel by
acquisitive prescription. In addition to the SUGGESTED ANSWER:
requisites common to ordinary and b) Mikaelo's defense of laches, however,
extraordinary acquisitive prescription consisting appears to be more sustainable. Renren bought
of uninterrupted, peaceful, public, adverse and the land and had the sale registered way back
actual possession in the concept of owner, in 1965. From the facts, it appears that it was
ordinary acquisitive prescription for ten (10) only in 1998 or after an inexplicable delay of
years requires (1) possession in good faith and 33 years that he took the first step asserting
(2) just title. "Just title" means that the adverse his right to the land. It was not even an action
claimant came into possession of the property to recover ownership but only possession of
through one of the modes recognized by law for the land. By ordinary standards, 33 years of
the acquisition of ownership but the grantor was neglect or inaction is too long and maybe
not the owner or could not transmit any right considered unreasonable. As often held by the
(Art. 1129. Civil Code). In this case, there is no Supreme Court, the principle of
"just title" and no "mode" that can be invoked imprescriptibility sometimes has to yield to the
Mikaelo's claim of laches, however, is weak
by X for the acquisition of the Pangasinan equitable principle of laches which can convert
insofar as the element of equity is concerned,
parcel. There was no constructive delivery of the even a registered land owner's claim into a
there being no showing in the facts how he
Pangasinan
Primary parcel
Entry becauseBook; it was not the
Acquisitive stale demand.
entered into the ownership and possession of
subject-matter Laches
Prescription; of the (1998)
deed of sale. Hence, B
the land.
retains
In 1965,ownership of the
Renren bought Pangasinan
from parcel ofof
Robyn a parcel Reclamation of Foreshore Lands;
land.
registered land evidenced by a duly executed Limitations
Republic Act 1899(2000) authorizes municipalities and
deed of sale. The owner presented the deed of chartered cities to reclaim foreshore lands
sale and the owner's certificate of title to the bordering them and to construct thereon
Register of Deeds. The entry was made in the adequate docking and harbor facilities.
daybook and corresponding fees were paid as Pursuant thereto, the City of Cavite entered
evidenced by official receipt. However, no into an agreement with the Fil-Estate Realty
transfer of certificate of title was issued to Company, authorizing the latter to reclaim 300
Renren because the original certificate of title hectares of land from the sea bordering the
in Robyn's name was temporarily misplaced city, with 30% of the land to be reclaimed to be
after fire partly gutted the Office of the Register owned by Fil-Estate as compensation for its
of Deeds. Meanwhile, the land had been services. The Solicitor General questioned the
possessed by Robyn's distant cousin, Mikaelo, validity of the agreement on the ground that it
openly, adversely and continuously in the will mean reclaiming land under the sea which
concept of owner since 1960. It was only in is beyond the commerce of man. The City
SUGGESTED ANSWER:
April 1998 ANSWER:
SUGGESTED that Renren sued Mikaelo to recover replies that General
The Solicitor this is is authorized
correct. The byauthority
RA. 1899 of
possession.
a) Renren's Mikaelo
action toinvoked
recover a) acquisitive
possession of because
the City of Cavite under RA 1899 to ofreclaim
it
Prescription; authorizes the
Real construction docks
prescription and b) laches, asking that
the land will prosper. In 1965, after buying hethebe and
Rights
A harbors.
owned
land (1992) Who
a parcel
is limited to is
ofcorrect? (3%) land
unregistered
foreshore lands. The located
Act did
declared
land fromownerRobyn,of the
he land. Decidethe
submitted theDeed
case byof on
not authorize it to reclaim land from between
the Tarlac side of the boundary the sea.
evaluating
Sale to thethese defenses,
Registry [5%]for registration
of Deeds Tarlacreclamation
"The and Pangasinan. His brother B the
being unauthorized, owned
City
together with the owner's duplicate copy of the theCavite
of adjoiningdid notparcel of unregistered
acquire ownership over land theon
title, and paid the corresponding registration the Pangasinan
reclaimed land. side.
Not being the owner, it could
fees. Under Section 56 of PD No. 1529, the A sold theconveyed
ALTERNATIVE
not have Tarlac
ANSWER: parcel
any to X in athereof
portion deed oftosale the
It depends.
executed as If athe reclamation
public instrumentof theby land
A and fromX.
Deed of Sale to Renren is considered contractor.
the
Aftersea is necessary
X paid in full the,inprice
the construction
of the sale, Xoftook the
registered from the time the sale was entered
For allDay
legal intents docks and the harbors, the Cityparcel
of Cavite is
in the Book (now and purposes,
called Renren
the Primary Entryis possession of the Pangasinan in the
considered the registered owner of the land. correct.
belief that Otherwise,
it was theitTarlacis not. Sincecovered
parcel RA 1899 by
Book).
After all, it was not his fault that the Registry of authorized
the deed of sale the executed
city to construct
by A and X. docks and
Deeds could not issue the corresponding After twelve
harbors, all works(12) that
years, area necessary
controversy for arose
such
transfer certificate of title. between B and
construction areX deemed
on the issue of the ownership
authorized. Including
Mikaelo's defense of prescription can not be of the
the reclamation
Pangasinan of parcel,
land fromB claims
the sea.
a vestedThe
sustained. A Torrens title is imprescriptible. No right of ownership
reclamation being over the Pangasinan
authorized, the city is parcel
the
ANOTHER ALTERNATIVE ANSWER:
title to registered land in derogation of the title because
owner of the
B neverreclaimed
sold land
that and
parcel
it may
to X convey
or to
On the assumption that the reclamation
of the registered owner shall be acquired by anyone
a portion else.
thereof as payment for the services
P.D. No, contract
On was entered
thecontractor.
other hand, X into before
claims RA 1899
a vested rightwasof
prescription or adverse possession. (Section of the
1529) repealed by PD 3-A, the
ownership over the Pangasinan parcelCity of Cavite is correct.
by
47,
Lands underprescription,
acquisitive the sea are "beyond
because the commerce
X possessed
of man" in the sense that
this parcel for over ten (10] years under they areclaim
not
susceptible
of ownership. of private appropriation, ownership
or
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
alienation. The contract in question merely callsanswer for or show up on the date of initial hearing, does
reclamation
the of 300 hectares of land within the guarantee
not the success of the application. It is still incumbent upon
the applicant to prove with well nigh incontrovertible evidence that
coastal waters of the city. Per se, it does not he has acquired a title to the land that is fit for registration. Absent
vest, alienate or transfer ownership of land such registrable title, it is the clear duty of the Land Registration
under the sea. The city merely engaged the Court to dismiss the application and declare the land as public
services of Fil-Estate to reclaim the land for the land.
city.
Registration; Deed of
Mortgage
How do you(1994)register now a deed of mortgage An application for land registration is a
of a parcel of land originally registered under proceeding in rem. Its main objective is to
the Spanish
SUGGESTED Mortgage Law?
ANSWER: establish the status of the res whether it is still
a) After the Spanish Mortgage Law was part of our public domain as presumed under
abrogated by P.D. 892 on February 16, 1976, the Regalian doctrine or has acquired the
all lands covered by Spanish titles that were character of a private property. It is the duty of
not brought under the Torrens system within the applicant to overcome that presumption
six 16] months from the date thereof have Remedies;
with sufficient Judicial
evidence. Reconstitution
been considered as "unregistered private of 1989,
In Title (1996)
the heirs of Gavino, who died on
Thus,
lands." a deed of mortgage affecting land August 10, 1987, filed a petition for
originally registered under the Spanish reconstitution of his lost or destroyed Torrens
Mortgage Law is now governed by the system Title to a parcel of land in Ermita, Manila. This
of registration of transactions or instruments was opposed by Marilou who claimed
affecting unregistered land under Section 194 ownership of the said land by a series of sales.
of the Revised Administrative Code as amended She claimed that Gavino had sold the property
by Act No. 3344. Under this law, the instrument to Bernardo way back in 1941 and as evidence
or transaction affecting unregistered land is thereof, she presented a Tax Declaration in
entered in a book provided for the purpose but 1948 in the name of Bernardo, which cancelled
the registration thereof is purely voluntary and the previous Tax Declaration in the name of
b)
doesBynot recording
adverselyand affectregistering
third persons with whothe
Gavino. Then she presented two deeds of sale
Register of Deeds
have a better right. of the place where the land
duly registered with the Register of Deeds, the
is located, in accordance with Act 3344.
first one executed by Bernardo in 1954 selling
However, P.D. 892 required holders of Spanish
the same property to Carlos, and the second
title to bring the same under the Torrens
Remedies; one executed by Carlos in 1963, selling the
System within 6Judicial
months from Confirmation;
its effectivity on
Imperfect
On June 30, Title (1993) same property to her. She also claimed that
February 16,1986,
1976.A filed in the RTC of Abra an SUGGESTED ANSWER:
application for registration of title to a parcel of she
If and her
I were the predecessors
judge, I will give in interest
due course havetobeen
the
P.
land D.under
No. 1529, claiming that since June 12, petition in possessionof theof heirsthe ofproperty
Gavinosince despite1948.
the If you
1945, he has been in open, continuous, opposition were the judge, of Marilouhow will you following
for the decide the reasons:
exclusive and notorious possession and petition? a) JudicialExplain.
reconstitution of a certificate of title
occupation of said parcel of land of the public under No.RA.26 partakes of a land registration
domain which was alienable and disposable, proceeding and is perforce a proceeding in
under a bona fide claim of ownership. After rem. It denotes restoration of an existing
issuance of the notice of initial hearing and instrument which has been lost or
publication, as required by law, the petition was destroyed in its original form and condition.
heard on July 29, 1987. On the day of the The purpose of reconstitution of title or any
hearing nobody but the applicant appeared. document is to have the same reproduced,
Neither was there anyone who opposed the b) after If proceedings.
the Court goes In beyond
the same that purpose,
form they
application. Thereupon, on motion of the it acts without or in excess of
were when the loss or destruction occurred.jurisdiction. Thus,
applicant, the RTC issued an order of general where the Torrens Title sought to be
default and allowed the applicant to present his reconstituted is in the name of Gavino, the
evidence. That he did. On September 30, 1989, court cannot receive evidence proving that
The appellant urged that the RTC erred in
the RTC dismissed A's application for lack of Marilou is the owner of the land. Marilou's
dismissing his application for registration and
sufficient evidence. A appealed to the Court of dominical claim to the land should be
in not ordering registration of his title to the ventilated in a separate civil action before the
Appeals. REFERENCES: Heirs of Pedro Pinate vs. Dulay.
parcel of land in question despite the fact that Regional Trial Court in its capacity as a court of
187 SCRA 12-20 (1990); Bunagan vs. CF1 Cebu
there was no opposition filed by anybody to his generalBranchjurisdiction.
VI. 97 SCRA 72 (1980); Republic vs. IAC.
application. Did the RTC commit the error 157 SCRA 62,66 (1988); Margolles vs. CA, 230
SUGGESTED
attributed ANSWER:
to it?
No, the RTC did not commit the error attributed to it. In an SCRA 709; Republic us, Feliciano, 148 SCRA 924.
application for Judicial confirmation of imperfect or incomplete title Remedies; Procedure;
to public agricultural land under Section 48 of the Public Land Act, Consulta
What is the(1994)
procedure of consulta when an
the lack of opposition and the consequent order of default against instrument is denied registration?
those who did not SUGGESTED ANSWER:
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
1) The Register of Deeds shall notify the
interested party in writing, setting forth the
defects of the instrument or the legal ground
relied upon for denying the registration, and
advising that if he is not agreeable to such
ruling, he may, without withdrawing the
documents from the Registry, elevate the
matter by Consulta to the Administrator of the
2) Within fiveAuthority
Land Registration {5) days from receipt of
(LRA).
notice of denial, the party-in-interest shall file
his Consulta with the Register of Deeds
3) Afterandreceipt
concerned pay the of the fee.
consulta Consulta and
payment of the corresponding fee the Register
of Deeds makes an annotation of the pending
consulta at the back of the certificate of title.
4) The Register of Deeds then elevates the
case to the LRA Administrator with certified
records thereof and a summary of the facts
5) The involved.
and issues LRA Administrator then conducts
hearings after due notice or may just require
parties to submit their memoranda.
6) After hearing, the LRA Administrator
issues an order prescribing the step to be taken
or the memorandum to be made. His resolution
in consulta shall be conclusive and binding
upon all Registers of Deeds unless reversed on
appeal by the Court of Appeals or by the
Supreme Court. (Section 117, P.D. 1529).
The procedure of consulta is a mode of appeal from
denial by the Register of Deeds of the registration of
the instrument to the Commissioner of Land
Registration.
Within five days from receipt of the notice of denial,
the interested party may elevate the matter by
consulta to the Commissioner of Land Registration
who shall enter an order prescribing the step to be
taken or memorandum to be made. Resolution in
consulta shall be binding upon all Registers of Deeds
provided that the party in interest may appeal to the
Court of Appeals within the period prescribed (Sec.
117, P.D. 1529).
Remedies; Reconveyance vs. Reopening
of a Decree; Prescriptive Period (2003)
Louie, before leaving the country to train as a
chef in a five-star hotel in New York, U.S.A.,
entrusted to his first-degree cousin Dewey an
application for registration, under the Land
Registration Act, of a parcel of land located in
Bacolod City. A year later, Louie returned to
the Philippines and discovered that Dewey
registered the land and obtained an Original
Certificate of Title over the property in his
Deweys name. Compounding the matter,
Dewey sold the land to Huey, an innocent
(a) Is the action
purchaser pursued
for value. by Louie
Louie the proper
promptly filed an
(b) Assuming
remedy? that reconveyance is
action for reconveyance of the parcel the proper
of land
remedy, will the action prosper if the case was
against Huey.
filed beyond one year, but within ten years,
from the entry of the decree of registration?
5%
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
Yes. The property registered is deemed to be held (a)
ThisinAn action
action doesfor reconveyance
not prescribe. against With respect Huey to is
for
trustthe real owner by the person in whose not
Percival's
action the forproper
reconveyance, remedy, because
it would haveHuey prescribed,is an
name it is registered. The Torrens system was innocent
having been purchaser
filed more for thanvalue.
ten (10) The yearsproper
after
not designed to shield one who had committed recourse isand
registration forissuance
Louie toofgo an after
O.C.T. Deweyin the name for of
fraud or misrepresentation and thus holds the Melvin,
damages were byit reason
not for the of inherent
the fraudulent infirmity of the
title in bad faith. (Walstrom v. Mapa Jr., (G .R latter's
registration title. Underand the facts, the statute
subsequent sale ofofthe limitations
land. If
38387, 29 Jan. 1990) as cited in Martinez, D., will not apply to Percival
Dewey is insolvent, Louie may file a claim because Melvin knew that a
Summary of SC Decisions, January to June, Eduarte
part
againstof the v.
the CA,
land 323 Phil.
covered
Assurance byFund 462,
his title 467
actually
(Heirs of belonged
Pedro to
Remedies; Reconveyance; [1996]).
Percival.v.So,
1990, p. 359], Lopez Deinstead
Castro of 324
nullifying
SCRA in 591
toto the
[2000] title of citing
Prescriptive
On 10 September Period (1997)
1965, Melvin applied for a (b) Yes,
Melvin, the the remedy
court, in the will prosper
exercise because
of equity and the
Sps.
free patent covering two lots - Lot A and Lot B - action prescribes
jurisdiction, may grant inprayer
ten (10) for theyears, not within
reconveyance of
situated in Santiago, Isabela. Upon certification oneB (1)
Lot year when
to Percival who has a petition for the reopening
actually possessed the land
by the Public Land Inspector that Melvin had of thea registration
under claim of ownership decree sincemay 1947. be After
filed.all, Theif
been in actual, continuous, open, notorious, action for
Melvin's titlereconveyance
is declared void is abdistinct
initio andfrom the land the is
exclusive and adverse possession of the lots petitionto
reverted tothereopen
public the domain,decree Percivalof registration
would just the
since 1925, the Director of Land approved (GreybeAlba
same v. De
entitled la Cruz, 17
to preference Phil.
right to 49 [1910}).
acquire the land
Melvin's application on 04 June 1967. On 26 There
from theisgovernment.
no need toBesides, reopenwell thesettled
registration
is the rule
December 1967, Original Certificate of Title proceedings,
that once publicbut landthe has property
been in open, should just be
continuous,
On
(OCT)7 September
No. P-22771971, Percival
was issued in filed a protest
the name of The action
reconveyed
exclusive and for toreconveyance
the real
notorious owner.
possession is based
under aon implied
bonafide
alleging
Melvln. that Lot B which he had been claim of acquisition of ownership for the periodten (10)
or constructive trust, which prescribes in
occupying and cultivating since 1947 was years frombythe
prescribed date48
Section of ofissuance
the Public ofLand
the original
Act, the
included in the Free Patent issued in the name certificate
same ipso jure of title.
ceases Thisto be rule assumes
public and in that the
contemplation
of Melvin. The Director of Lands ordered the defendant
of law acquired is inthe possession
character of ofprivate
the land. land. Where
Thus, it is
investigation of Percival's protest. The Special the plaintiff who
reconveyance of the is land
in possession
from Melvinoftothe land,would
Percival the
Investigator who conducted the investigation action
ALTERNATIVE for reconveyance
ANSWER: would
be the better procedure, (Vitale vs. Anore, 90 Phil. 855; be in the nature of
found that Percival had been in actual The
a
v. suit action
Malay, for of
quieting
318 the
SCRA Solicitor
for
Pena, Land Titles and Deeds, 1982, Page 427) the
711 General
title which should
action is
On 28 November
cultivation 1986,
of Lot B sincethe Solicitor General
1947. prosper,
[1999]).
imprescriptible considering (Davidthat the doctrine of
filed in behalf of the Republic of the Philippines Remedies; Reconveyance;
indefeasibility of title does not apply to free
a complaint for cancellation of the free patent Elements
Rommel
patent was
secured (1995)
issuedthrough a certificate of title over
fraud. A certificate ofa
and the OCT issued in the name of Melvin and parcel
title cannotof land bein used Quezon as shieldCity. to One year later
perpetuate
the reversion of the land to public domain on Rachelle,
fraud. Thethe State legitimate
is not bound ownerbyofthe theperiod
land, of
the ground of fraud and misrepresentation in discovered the
prescription stated fraudulent
in Sec. registration
38 of Act 496. obtained
obtaining the free patent. On the same date, by Rommel.
(Director She filed
of Lands vs. aAbanilla,
complaint 124 against
SCRA 358)
The
Rommel actionfor forreconveyance
reconveyance filed andby Percival
caused the may
Percival sued Martin for the reconveyance of
Melvin filed his answers interposing the sole still prosper provided that
annotation of a notice of lis pendens on the the property has not
Lot B.
defense in both cases that the Certificate of passed
certificate to anofinnocent
title issued third to party for value
Rommel. (Dablo us.
Rommel
Title issued in his name became now invokes the indefeasibility of his title that
Court of Appeals. 226 SCRA 618) , and provided
incontrovertible and indefeasible upon the the action is filed within the prescriptive period of ten
considering that one year has already elapsed
lapse of one year from the issuance of the free years (Tale vs. Court of Appeals. 208 SCRA 266).
from its issuance. He also seeks the
Given
patent.the circumstances, can the action of the Since
SUGGESTED the action ANSWER: was filed by Percival 19 years after
cancellation
Yes,issuance
Rachelle's of the suitnotice
will of Lis pendens.
prosper becausethat Will
all
Solicitor General and the case for the of Melvin's title, it is submitted the
Rachelle's
elements suit
for an for reconveyance
action prosper?
reconveyance filed by Percival possibly same is already barred byfor reconveyance
prescription. ALTERNATIVEare
Explain.
present,
SUGGESTED
prosper? ANSWER: ANSWER (to namely:
second part a) Rachelle
of question) is claiming
The action for
"If fraud be discovered in the application which land.
dominical b) Rommel
reconveyance rightsfiledover procured the same
by Percival his
willtitle to the
prosper, land
because
led to the issuance of the patent and Certificate by fraud.
the land has c)ceased
The action to be was public brought
land and within
has the
of Title, this Title becomes ipso facto null and statutory
become period
private land of by open, continuous, public,
void. Thus, in a case where a person who four (4)
exclusive years from
possession under discovery
a bona fide of claim
the fraud of and not
obtained a free patent, knowingly made a false than
later
ownership ten
for (10}
more years
than from
thirty the
years, date
and of registration
Percival is of
statement of material and essential facts in his Rommel's
still in possessiontitle. d)
of Title
the to
propertythe land
at has
present. notHis
passed
application for the same, by stating therein that action forinto the hands can
reconveyance of an be considered as an
the lot in question was part of the public actioninnocent
(Olviga tov. CA.purchaser
quiet title, which for
GR 1048013. does value.
October
not prescribe 21, if the
domain not occupied or claimed by any other 1993)
plaintiff is in possession of the property.
Remedies;
Rommel canReopening invoke the indefeasibility of a Decree; of his title
person, his title becomes ipso facto canceled
Elements
What
if Rachelleare the (1992)
had essential
filed a requisites
petition or elements
to reopen or
and consequently rendered null and void." "It is
for
reviewthe the allowance
decree ofof the reopeningBut
registration. or review
Rachelle of
to the public interest that one who succeeds In
a decreefiled
instead of registration?
an ordinary action in personam for
fraudulently acquiring title to public land should SUGGESTED ANSWER:
not be allowed to benefit therefrom and the reconveyance. In the latter action,
The essential
indefeasibility elements
is not a valid are: defense
(1) that the because, in
State, through the Solicitor General, may file petitioner has a real or dominical right; (2)tothat
the corresponding action for annulment of the filing such action, Rachelle is not seeking
Lands us. Hon. Pedro Samson Animas, L-37682, 3- he has nor
nullify been to deprived
impugn the thereof through fraud;
indefeasibility of
patent and the reversion of the land involved to
29-74.) (3) that the petition is filed within one (1) year
the public domain"
SUGGESTED ANSWER: (Dinero us. Director of
Rommel's title. She is only asking the court to
from theRommel
ALTERNATIVE
compel issuance
ANSWER:of the decree; and (4) that
to reconvey the title to her as
Lands; Kayaban vs. Republic L-33307,8-20-73; the property has not yet been transferred to an
Director of the legitimate owner of the land.
innocent
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
purchaser {Rublico vs. Orellana 30 SCRA 511; Ubudan Administrative Code of 1987 which prohibits officers
vs.SCRA
45 Gil 17). employees
and of the government from purchasing
OPTIONAL EXTENDED ANSWER: directly or indirectly any property sold by the
Petition for review of the Decree of government for nonpayment of any tax, fee or
Registration. A remedy expressly provided in (a) Is the
other sale
public to Juan valid? If so, what is the
charge.
Section 32 of P. D. No. 1529 (formerly Section effect of the Issuance of the Certificate of Title
38. Act 496), this remedy has the following (b) If the sale is void, may Juan recover the
to Maria?
elements: a) The petition must be filed by a P10,000.00? If not, why not?
dominical
person claiming or other real rights to the land (c) If the sale is void, did it not nevertheless,
registered in the name of respondent. operate to divert Maria of her ownership? If it
b) The registration of the land in the name did, who then is the owner of the property?
of respondent was procured by means of actual,
(not just constructive) fraud, which must be
extrinsic. Fraud is actual if the registration
was made through deceit or any other
intentional act of downright dishonesty to
enrich oneself at the expense of another. It is
extrinsic when it is something that was not
c)
raised, The petition
litigated andmust be upon
passed filed within
in the one
main
(1) year from
proceedings. the date of the issuance of the
d)
decree. Title to the land has not passed to an
Innocent purchaser for value (Libudan vs. Gil,
45_ SCRA 27, 1972), Rublico vs. Orrelana. 30
SCRA 511, 1969); RP vs. CA, 57 G. R No.
40402. March 16, 1987).
Torrens System vs. Recording of
Evidence of
Distinguish theTitle (1994)
Torrens system of land
registration from the system of recording of
evidence of
SUGGESTED title.
ANSWER:
a) The TORRENS SYSTEM OF LAND REGISTRATION
is a system for the registration of title to the land.
Thus, under this system what is entered in the
Registry of Deeds, is a record of the owner's
estate or interest in the land, unlike the system
under the Spanish Mortgage Law or the system
under Section 194 of the Revised Administrative
Code as amended by Act 3344 where only the
evidence of such title is recorded. In the latter
system, what is recorded is the deed of
conveyance from hence the owner's title
emanatedand not the title itself.
b) Torrens system of land registration is that
which is prescribed in Act 496 (now PD 1529),
which is either Judicial or quasi-judicial. System
or recording of evidence of title is merely the
registration of evidence of acquisitions of land
with the Register of Deeds, who annotates the
same on the existing title, cancels the old one
and issues a new title based on the document
Unregistered
presented for registration.
Land
Maria (1991)
Enriquez failed to pay the realty taxes on
her unregistered agricultural land located in
Magdugo, Toledo City. In 1989, to satisfy the
taxes due, the City sold it at public auction to
Juan Miranda, an employee at the Treasurer's
Office of said City, whose bid at P10,000.00
was the highest. In due time, a final bill of sale
was executed in his favor. Maria refused to
turn-over the possession of the property to Juan
alleging that (1) she had been, in the
meantime, granted a free patent and on the
basis thereof an Original Certificate of Title was
issued to her, and (2) the sale in favor of Juan is
void from the beginning in view of the provision
in the
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
then executed an affidavit of desistance which led to
withdrawal of the information against Lolita and My answer will not be the same as to damages.
the
her release from jail. The parents failed to Marvin will be liable for damages for breach of
comply with their promissory note and the contract of option. With the payment of the
finance company sued them for specific consideration for the option given, and with the
SUGGESTED
performance. ANSWER:
Will the action prosper or not? consent of the parties and the object of contract
The
(3%) action will prosper. The promissory note being present,
(San Miguel,a perfected
Inc. v. contract Huang, of option
G.R. was No.
executed by Lolita's parents is valid and created. July 31, 2000) Under Article 1170 of
137290,
binding, the consideration being the the Civil Code, those who in the performance of
extinguishment of Lolita's civil liability and not their obligation are guilty of contravention
ALTERNATIVE
the stifling ofANSWER:
the criminal prosecution.
The action will not prosper because the thereof, as in this case, when Marvin did not
SUGGESTED ANSWER:
consideration for the promissory note was the A. give Carlos the agreed period of ten days, are
The sale ANSWER:
ALTERNATIVE of the land to Juan is not valid,
non-prosecution of the criminal case for estafa. My liable for damages.
beinganswer
contrarywill to
notlaw.beTherefore,
the same no if Carlos
transfer paid
of
This cannot be done anymore because the Marvin ownership P10,000.00
of the land because an option
was effected fromcontract
the
information has already been filed in court and was perfected.
delinquent taxpayer Thus, to if
him.Marvin withdrew the
The original
to do it is illegal. That the consideration for the offer prior of
certificates totitle
theobtained
expiration of the
by Maria thru10-day
a
promissory note is the stifling of the criminal period,
free patent he grant
breached
from the theBureau option contract.
of Lands
prosecution is evident from the execution by (Article 1324, Civil
under Chapter Code)
VII, CA 141 is valid but in view
the finance company of the affidavit of c) Supposing
of her delinquency, thatthe Carlos
said title accepted
is subject tothe
desistance immediately after the execution by offer the right of the City Government to sell the his
before Marvin could communicate
Lolita's parents of the promissory note. The withdrawal thereof?
land at public auction. TheDiscuss
issuance of thethe legal
OCT
SUGGESTED ANSWER:
consideration being illegal, the promissory note consequences. (2%)
Contract of Option; did not exempt the land from the tax sales.
is invalid and may not be enforced by court A contract to construct the house of Carlos is
Section 44 of P.O. No. 1529 provides that every
Elements
Marvin (2005)
offered to construct the house of Carlos perfected. Contracts are perfected by mere
action. registered owner receiving a Certificate of Title
for a very reasonable price of P900,000.00, consent
B. Juan may manifested
recover by the meeting
because he wasof notthe
a offer
shall hold the same free from an
giving the latter 10 days within which to and
partythe acceptance
to the violation of upon the thing and the
the law.
encumbrances, subject to certain exemptions.
accept or reject the offer. On the fifth day, cause which are to constitute the contract.
before Carlos could make up his mind, Marvin (Gomez
C. No, the v. saleCourt
did notof divest
Appeals,
Maria ofG.R. her title
No.
a) What is
withdrew histhe Under
effect of the withdrawal of 120747,
offer. precisely Article 1315
September
because theofsalethe2000)
21, is Civil
void.Code,
It is asCarlos
good
Marvin's offer? (2%) and
as if Marvin
no sale are everbound to fulfill
took place. what
In tax has the
sales, been
SUGGESTED ANSWER: expressly stipulated
owner is divested of hisandland all consequences
initially upon
The withdrawal of Marvin's offer will cause the thereof. Under Article 1167, if Marvin would
award and issuance of a Certificate of Sale,
offer to cease in law. Hence, even if refuse to construct the house, Carlos is
and finally after the lapse of the 1 year period
subsequently accepted, there could be no entitled to have the construction be done by a
from date of registration, to redeem, upon
concurrence of the offer and the acceptance. In third person at the expense of Marvin. Marvin
execution by the treasurer of an instrument
the absence of concurrence of offer and in that case will be liable for damages under
sufficient in form and effects to convey the
acceptance, there can be no consent. (Laudico Inexistent
Article 1170. Contracts vs. Annullable
property. Maria remained owner of the land
v. Arias Rodriguez, G.R. No. 16530, March DistinguishContracts (2004) briefly but clearly between
until another tax sale is to be performed in
31, 1922) Without consent, there is no Inexistent contracts and annullable contracts.
CONTRACTS
favor of a qualified buyer.
perfected contract for the construction of the SUGGESTED ANSWER:
house of Carlos. (Salonga v. Farrales, G.R. INEXISTENT CONTRACTS are considered as not
No. L-47088, July 10, 1981) Article 1318 of having Consensual been vs. entered
Real into and, therefore,
Contracts; Kinds ofvoid
ob initio.
the Civil Code provides that there can be no Real Contracts (1998)They do not create any obligation and
contract unless the following requisites concur: cannot
Distinguishbe ratified
consensual or validated,
from real as there
contracts is no
and
Marvin will not be liable to pay Carlos any
(1) consent of the parties; (2) object certain agreement
name at least to four
ratify(4)or validate.
kinds of realOn the other
contracts
damages for withdrawing the offer before the
which is the subject matter of the contract; and hand,
under the ANNULLABLE
present law. or [3%]
VOIDABLE CONTRACTS
lapse of the period granted. In this case, no are valid until
SUGGESTED ANSWER: invalidated by the court but may
(3) cause of the obligation.
consideration was given by Carlos for the CONSENSUAL
be CONTRACTS
ratified. In inexistent are those
contracts, onewhich are
or more
option given, thus there is no perfected perfected by
requisites of mere
a validconsent
contract(Art. are
1315. Civil In
absent.
contract of option for lack of cause of Code). REAL
anullable CONTRACTS
contracts, all are
the those which of
elements are a
obligation. Marvin cannot be held to have perfectedare
contract by present
the delivery except of the
thatobject of the of
the consent
breached the contract. Thus, he cannot be held one obligation.
of the (Art. 1316, Civil
contracting Code)was
parties Examples
vitiatedofor
b) Will
liable foryour answer be the same if Carlos Nature
damages. real of
one contracts
them has
ofareno Contracts;
deposit,
capacity pledge,
to givecommodatum
consent.
paid Marvin P10,000.00 as consideration Obligatoriness
Roland,
and simple a basketball(1991)
loan (mutuum). star, was under contract
for that option? Explain. (2%) for
Consideration; play-for-play exclusively for
one year to
ALTERNATIVE ANSWER: Lady
Validity
Lolita Love,
was (2000)Inc. However,
employed in a finance even before the
company.
My answer will be the same as to the basketball
Because she could not account for the offered
season could open, he was funds a
perfection of the contract for the construction more
entrusted to her, she was charged with estafaby
attractive pay plus fringes benefits
of the house of Carlos. No perfected contract Sweet Taste,arrested.
Inc. Roland accepted the
and ordered In order to secure heroffer
arises because of lack of consent. With the and transferred
release from jail,toher Sweet
parentsTaste. Lady Love
executed a sues
withdrawal of the offer, there could be no Roland and note
Sweet
promissory to Taste
pay the forfinance
breachcompany
of contract.
concurrence of offer and acceptance. Defendants
the amount claim allegedly thatmisappropriated
the restriction toby play for
their
Lady LoveThe
daughter. alone is void,
finance hence, unenforceable,
company
as it
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
constitutes an undue interference with the rightany of payment at all. Printado has also a standing
to enter into contracts and the impairment of
Roland with publisher Publico for the printing of 10,000
contract
his freedom to play and enjoy basketball. volumes of school textbooks. Suplico was
aware of said printing contract. After printing
Can Roland be bound by the contract he 1,000 volumes, Printado also fails to perform
entered into with Lady Love or can he under its printing contract with Publico. Suplico
disregard the same? Is he liable at all? How sues Printado for the value of the unpaid
SUGGESTED
about Sweet ANSWER:
Taste? Is it liable to Lady Love? deliveries under their order agreement. At the
Roland is bound by the contract he entered same time Publico sues Printado for damages
into with Lady Love and he cannot disregard for breach of contract with respect to their own
the same, under the principles of obligatoriness printing agreement. In the suit filed by Suplico,
of contracts. Obligations arising from contracts Printado counters that: (a) Suplico cannot
SUGGESTED ANSWER:
have the force of law between the parties.
Yes, Roland is liable under the contract as far demand payment for deliveries made under
as Lady Love is concerned. He is liable for their order agreement until Suplico has
damages under Article 1170 of the Civil Code completed performance under said contract;
since he contravened the tenor of his (b) Suplico should pay damages for breach of
obligation. Not being a contracting party, contract; and (c) with Publico should be liable
Sweet Taste is not bound by the contract but it for Printados
SUGGESTED breach of his contract with
ANSWER:
can be held liable under Art. 1314. The basis of No, Publico because the of
the contentions order agreement
Printado between
are untenable.
Suplico and Printado was for the benefit
its liability is not prescribed by contract but is Printado having failed to pay for the printing of
Publico. Are the contentions of Printado
founded on quasi-delict, assuming that Sweet paper covered by the delivery invoices on time,
tenable?has
Taste knew of the contract. Article 1314 of the Suplico Explain yourtoanswers
the right as to each
cease making further
contention. (5%)
Civil Code provides that any third person who delivery. And the latter did not violate the
ALTERNATIVE ANSWER:
induces another that
It is assumed to violate
Lady hisLovecontract
knew shall be order agreement (Integrated Packaging
of the
liable for damages to the other contracting
contract. Neither Roland nor Sweet Taste would
Corporation v. Court of Appeals, (333 SCRA
party. Suplico
170, cannot
G.R. be held liable
No. 115117, Junefor
8,damages,
[2000]). for
be liable, because the restriction in the breach of contract, as it was not he who violated the
contract is violative of Article 1306 as being order agreement, but Printado. Suplico cannot be
contrary to law morals, good customs, public held liable for Printados breach of contract with
order or public policy. Publico. He is not a party to the agreement entered
Nature of Contracts; Privity of into by and between Printado and Publico. Theirs is
Contract (1996)
Baldomero leased his house with a telephone not a stipulation pour atrui. [Aforesaid] Such
to Jose. The lease contract provided that Jose contracts do could not affect third persons like
shall pay for all electricity, water and telephone Suplico because of the basic civil law principle of
services in the leased premises during the relativity of contracts which provides that contracts
period of the lease. Six months later. Jose can only bind the parties who entered into it, and it
surreptitiously vacated the premises. He left cannot favor or prejudice a third person, even if he
behind unpaid telephone bills for overseas is aware of such contract and has acted with
telephone calls amounting to over P20,000.00. v. CA, supra.)
knowledge thereof. (Integrated Packaging
Baldomero refused to pay the said bills on the Corporation
ground that Jose had already substituted him Rescission of Contracts;
as the customer of the telephone company. Proper
In Party1985,
December (1996)
Salvador and the Star
The latter maintained that Baldomero remained Semiconductor Company (SSC) executed a
as his customer as far as their service contract Deed of Conditional Sale wherein the former
SUGGESTED ANSWER: agreed to sell his 2,000 square meter lot in
was concerned,
The telephone notwithstanding
company the lease
is correct because as
contract between Baldomero and Jose. Who is Cainta, Rizal, to the latter for the price of
far as it is concerned, the only person it P1,000,000.00, payable P100,000.00 down, and
correct, Baldomero
contracted with wasorBaldomero.
the telephone
The company?
telephone
Explain. the balance 60 days after the squatters in the
company has no contract with Jose. Baldomero property have been removed. If the squatters
cannot substitute Jose in his stead without the are not removed within six months, the
consent of the telephone company (Art. 1293, P100,000.00 down payment shall be returned
NCC). Baldomero is, therefore, liable under the by the vendor to the vendee, Salvador filed
Nature
contract.of Contracts; Relativity of
Contracts
Printado (2002) in the printing business.
is engaged ejectment suits against the squatters, but in
Suplico supplies printing paper to Printado spite of the decisions in his favor, the squatters
pursuant to an order agreement under which still would not leave. In August, 1986, Salvador
Suplico binds himself to deliver the same offered to return the P100,000.00 down
volume of paper every month for a period of 18 payment to the vendee, on the ground that he
months, with Printado in turn agreeing to pay is unable to remove the squatters on the
within 60 days after each delivery. Suplico has property. SSC refused to accept the money and
been faithfully delivering under the order demanded that Salvador execute a deed of
agreement for 10 months but thereafter absolute sale of the property in its favor, at
stopped doing so, because Printado has not which time it will pay the balance of the price.
made Incidentally, the value of the land had doubled
by that time.
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
Salvador consigned the P 100,000.00 in court, and
property of ZY, his wife may also sue to recover it
action
filed anfor rescission of the deed of conditional Article
under 2016 of the Civil Code if she and the
sale, plus damages. Will the action prosper? family needed the money for support.
Explain. ANSWER:
SUGGESTED ALTERNATIVE ANSWER (2):
No, the action will not prosper. The action for A. (2). Mrs. ZY cannot file a suit to recover what
rescission may be brought only by the her husband lost. Art 2014 of the Civil Code
aggrieved party to the contract. Since it was provides that any loser in a game of chance
Salvador who failed to comply with his may recover his loss from the winner, with
conditional obligation, he is not the aggrieved legal interest from the time he paid the amount
party who may file the action for rescission but lost. This means that only he can file the suit.
the Star Semiconductor Company. The Mrs. ZY cannot recover as a spouse who has
company, however, is not opting to rescind the interest in the absolute community property or
contract but has chosen to waive Salvador's conjugal partnership of gains, because under
ALTERNATIVE ANSWER:
compliance with the condition which it can do Art. 117(7} of the Family Code, losses are
The action for rescission will not prosper. The
under Art. 1545, NCC. borne exclusively by the loser-spouse.
buyer has not committed any breach, let alone
Therefore, these cannot be charged against
a substantial or serious one, to warrant the
absolute community property or conjugal
rescission/resolution sought by the vendor. On
partnership of gains. This being so, Mrs. ZY has
the contrary, it is the vendor who appears to Conditional
no interest in law to prosecute and recover as
have failed to comply with the condition Obligations
Pedro (2000)
promised to give his grandson a car if
she has no legal standing in court to do so.
imposed by the contract the fulfillment of which the latter will pass the bar examinations. When
would have rendered the obligation to pay the his grandson passed the said examinations,
balance of the purchase price demandable. Pedro refused to give the car on the ground
Further, far from being unable to comply with that the condition was a purely potestative
what is incumbent upon it, ie., pay the balance SUGGESTED ANSWER:or not? (2%)
one. Is he correct
of the price the buyer has offered to pay it even No, he is not correct. First of all, the condition
without the vendor having complied with the is not purely potestative, because it does not
suspensive condition attached to the payment depend on the sole will of one of the parties.
of the price, thus waiving such condition as well Secondly, even if it were, it would be valid
as the 60-day term in its favor The stipulation because it depends on the sole will of the
that the P100,000.00 down payment shall be creditor (the donee) and not of the debtor (the
Conditional
donor).
returned by the vendor to the vendee if the Obligations
Are (2003)
the following obligations valid, why, and if
squatters are not removed within six months, is they are valid, when is the obligation
also a covenant for the benefit of the vendee, demandable in each case? a) If the debtor
which the latter has validly waived by means to to
pay; b)as
If the
soondebtor
as he promises
has the to pay
OBLIGATIONS
promises pay
implication when it offered to pay the balance when he likes; c) If the debtor promises to pay
of the purchase price upon the execution of a when he becomes a
deed
Aleatoryof absolute Contracts;
sale by the vendor. (Art. 1545, lawyer; d) If the debtor promises to pay if his
NCC)
Gambling
A. (2004)
Mr. ZY lost P100,000 in a card game called son, who is sick with cancer, does not die
Russian poker, but he had no more cash to pay within one year. 5%
in full the winner at the time the session SUGGESTED ANSWER:
ended. He promised to pay PX, the winner, (a) The obligation is valid. It is an obligation
two weeks thereafter. But he failed to do so subject to an indefinite period because the
despite the lapse of two months, so PX filed in debtor binds himself to pay when his means
court a suit to collect the amount of P50,000 permit him to do so (Article 1180, NCC). When
that he won but remained unpaid. Will the the creditor knows that the debtor already has
collection suit against ZY prosper? Could Mrs. the means to pay, he must file an action in
SUGGESTED ANSWER:
ZY file in turn a suit against PX to recover the court to fix the period, and when the definite
A. 1. The suit by PX to collect the balance of period as set by the court arrives, the
P100,000 that her husband lost? Reason. (5%)
what he won from ZY will not prosper. Under obligation to pay becomes demandable
Article 2014 of the Civil Code, no action can be SUGGESTED ANSWER:
9Article 1197, NCC).
maintained by the winner for the collection of (b) The obligation to pay when he likes is a
what he has won in a game of chance. suspensive condition the fulfillment of which is
Although poker may depend in part on ability, subject to the sole will of the debtor and,
it is fundamentally a game of chance. therefore the conditional obligation is void.
2) If the money paid by ZY to PX was conjugal (Article 1182, NCC).
or community property, the wife of ZY could SUGGESTED ANSWER:
sue to recover it because Article 117(7) of the (c) The obligation is valid. It is subject to a
Family Code provides that losses in gambling suspensive condition, i.e. the future and
or betting are borne exclusively by the loser- uncertain event of his becoming a lawyer. The
spouse. Hence, conjugal or community funds performance of this obligation does
may not be used to pay for such losses. If the
money were exclusive
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
not depend solely on the will of the debtor but alsocondition
on of Eva passing the 1998 Bar Examinations.
other factors outside the debtors
control.
SUGGESTED ANSWER:
(d) The obligation is valid. The death of the son
of cancer within one year is made a negative
suspensive condition to his making the
payment. The obligation is demandable if the
son does not die within one year (Article 1185,
NCC).
Conditional Obligations;
Promise
In (1997)documents signed by him, Juan
two separate
Valentino "obligated" himself each to Maria
and to Perla, thus - 'To Maria, my true love, I
obligate myself to give you my one and only
horse when I feel like It." - and -'To Perla, my
true sweetheart, I obligate myself to pay you
the P500.00 I owe you when I feel like it."
Months passed but Juan never bothered to
make good his promises. Maria and Perla came
to consult you on whether or not they could
recover on the basis of the foregoing settings.
SUGGESTED ANSWER:
What would
I would your
advise legal
Maria advice
not be? running after
to bother
Juan for the latter to make good his promise.
[This is because a promise is not an actionable
wrong that allows a party to recover especially
when she has not suffered damages resulting
from such promise. A promise does not create
an obligation on the part of Juan because it is
not something which arises from a contract,
law, quasi-contracts or quasidelicts (Art,
1157)]. Under Art. 1182, Juan's promise to
Maria is void because a conditional obligation
As regards
depends Perla,
upon thethe document
sole will of theisobligor.
an express
acknowledgment of a debt, and the promise to
pay what he owes her when he feels like it is
equivalent to a promise to pay when his means
permits him to do so, and is deemed to be one
with an indefinite period under Art. 1180. Hence
the amount is recoverable after Perla asks the
court to set the period as provided by Art. 1197,
Conditional
par. 2. Obligations; Resolutory
Condition
In (1999)
1997, Manuel bound himself to sell Eva a
house and lot which is being rented by another
person, if Eva passes the 1998 bar
examinations. Luckily for Eva, she passed said
(a) Suppose Manuel had sold the same house
examinations.
and lot to another before Eva passed the 1998
bar examinations, is such sale valid? Why?
(b) Assuming that it is Eva who is entitled to
(2%)
buy said house and lot, is she entitled to the
rentals collected by Manuel before she passed
the 1998 bar examinations? Why? (3%)
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
concerned, may annul such assignment for not having Even [if] assuming that there was a perfect right of
their
givenconsent thereto. refusal,
first upon compensation
Hence, Eva's passing the Bar, did notof the
the rights take place
other buyer
terminated and Eva acquired ownership of the property.
ALTERNATIVE ANSWER: because the claim is unliquidated.
The assignment is valid because there is
absolute freedom to transfer the credit and the Extinguishment;
SECOND ALTERNATIVE ANSWER: Compensation vs.
creditor need not get the consent of the The sale compensation
Payment
Define to another person
(1998) as beforea Eva could
mode of
debtor. He only needs to notify him. buy it from Manuel
extinguishing an obligation,is valid,and as the contractit
distinguish
Extinguishment; Cause of between
from payment.
SUGGESTED Manuel
ANSWER: [2%]and Eva is a mere promise to
Action
TX filed (2004)
a suit for ejectment against BD for COMPENSATION
sell and Eva has is nota acquired
mode of aextinguishing
real right over to
non-payment of condominium rentals the concurrent
land assuming amount,that the obligations
there is aof those price
amounting to P150,000. During the pendency persons
stipulated who in thein theircontract own for righttheare reciprocally
contract to be
of the case, BD offered and TX accepted the debtors
considered and acreditors
sale and of there
each other (Tolentino,
was delivery or
SUGGESTED
full amount due as rentals from BD, who then 1991
tradition ed., ofANSWER:
p.
the365, thing citing
sold. 2 Castan 560 and
filed a motion to dismiss the ejectment suit on (b) No, vs.
Francia she IAC. is 162not SCRA entitled753).toIt the involvesrentals
the
the ground that the action is already collected by Manuel because
simultaneous balancing of two obligations at the time they in
SUGGESTED
extinguished. ANSWER:
Is BDs contention correct? Why accrued
order and were collected,
to extinguish them to the Eva was in
extent not yet
which
BD's contention is not correct. TX can still FIRSTowner
the ALTERNATIVE
of oftheone ANSWER:
property.
or why not? Reason. (5%) the amount
Assuming that Eva is the
is covered by that to
one entitled of buy
the
maintain the suit for ejectment. The other.
the (De
housemeans Leon,
and lot, 1992 ed., p. 221, citing 8
acceptance by the lessor of the payment by PAYMENT not sheonlyisdelivery
not entitled
of money to thebut
Manresa
rentals 401).
collected by
the lessee of the rentals in arrears even during also performance of Manuel
an obligation before(Article
she passed 1232,
the pendency of the ejectment case does not the
Civil Code). In payment, capacity to adispose
bar examinations. Whether it is contract of
constitute a waiver or abandonment of the of sale
the thing paidor aand contract
capacityto sell, reciprocal
to receive payment
ejectment case. (Spouses Clutario v. CA, 216 prestations
are required are deemed for debtorimposed and A creditor,
for the
Extinguishment;
SCRA 341 [1992]). seller to deliver
respectively: the object sold
in compensation, such and for the
capacity is
Compensation
Stockton (2002) of Core Corp. He
is a stockholder buyernecessary,
not to pay the price. because Before thethe compensation
happening of
desires to sell his shares in Core Corp. In view of operates the condition, by law the and fruitsnot of bythe thething actand of the
the
a court suit that Core Corp. has filed against SECOND ALTERNATIVE ANSWER:
interestsInon
parties. the money
payment, the are deemed to
performance must havebe
him for damages in the amount of P 10 million, Under Art. 1164, there is no obligation on the
been
complete; mutually
while incompensated
compensation under
there Article
may be
plus attorneys fees of P 1 million, as a result of part of Manuel to deliver
Extinguishment; the fruits (rentals) of
Compensation/Set-
1187.
partial extinguishment of to an deliverobligation
statements published by Stockton which are the
Off;
X, whothing
Banks until
a(1998)
has supra) the obligation
savings deposit with Y Bank in the the
(Tolentino,
thing
allegedly defamatory because it was calculated sum ofarises. As the suspensive
P1,000,000.00 incurs a loan condition has
obligation
to injure and damage the corporations not
with been
the said fulfilled,
Bank the in the obligation
sum of to sell does
P800.000.00
reputation and goodwill. The articles of not
which arise. has become due. When X tries to
Extinguishment; Assignment of
incorporation of Core Corp. provide for a right of The withdraw his deposit, Y Bank allows only
Rights sugar (2001) cane planters of Batangas entered
first refusal in favor of the corporation. P200.000.00 to be withdrawn, less service
into a long-term milling contract with the
Accordingly, Stockton gave written notice to the charges, claiming that compensation has
Central Azucarera de Don Pedro Inc. Ten years
corporation of his offer to sell his shares of P 10 extinguished its obligation under the savings
later, the Central assigned its rights to the said
million. The response of Core corp. was an account to the concurrent amount of X's debt. X
milling contract to a Taiwanese group which
acceptance of the offer in the exercise of its contends that compensation is improper when
would take over the operations of the sugar
rights of first refusal, offering for the purpose one of the debts, as here, arises from a
mill. The planters filed an action to annul the
payment in form of compensation or set-off contract of deposit. Assuming that the
said assignment
SUGGESTED ANSWER: on the ground that the
against the amount of damages it is claiming promissory
Y bank is correct. note signed by Civil
X toCode, evidence the
Taiwanese group An. was1287, not registered doesthe
with not
against him, exclusive of the claim for loan
apply. All does
(Note: not
The provide
question
the requisitesWill for
presupposes
of Art. compensation
knowledge
Board of Investments. the1279,
actionCivil Code
prosper
attorneys ANSWERS:
fees. Stockton rejected the offer of between
are and
present. saidrequires
Inloantheand case hisofsavings
the Gullas deposit,
application vs. PNBof whothe
[62
SUGGESTED or not? Explain briefly. (5%)
the corporation,
Stockton is correct.arguing
Therethatis nocompensation
right of is correct? provisions
[3%] of the Omnibus Investment Code,
Phil.
SUGGESTED the Supreme Court held: "The Civil
519),ANSWER:
between the value
compensation betweenof thehisshares
price and themillion
of P10 which properly belongs to Commercial law)
Code
The action contains
will prosper provisions
not on theregarding ground
amount of damages demanded
and Core Corp.s unliquidated claim for by the compensation (set off) and deposit. These
invoked but on the ground that the farmers
corporation
damages. Incannot order thatlegally take effect. may
compensation Is be portions
have not given their consent to that
of Philippine law provide the
Stockton
proper, the correct?
two debtsGivemust
reason be for your answer.
liquidated and compensation shallmilling take contract
place when two
assignment. The imposes
(5%)
demandable. The case for the P 10million persons are reciprocally
reciprocal obligations on creditor
the parties. andThe debtorsugar of
damages being still pending in court, the each other. In this connection,
central has the obligation to mill the sugar cane it has been held
ANOTHER
corporation MAINhasANSWER:
as yet no claim which is due
The right of first refusal was not perfected as a that
of the the farmers
relation existing while the betweenlatter a havedepositorthe
and demandable against Stockton. and a
obligation bank tois that
deliver of creditor
their and
sugar debtor,
cane to x xx
the
right for the
SUGGESTED reason that there was a conditional
ANSWER:
acceptance equivalent to a counter-offer As
sugara general
central. rule,
As a
to bank
the has a
obligation right to of set
mill off
the
(a) Yes, the sale to the other person is valid as
consisting of the
sugar deposits
cane, the in its
sugar hands
central for
is the
a payment
debtor of theof
a sale within a the amountcondition
resolutory of damages as being
because any indebtedness to it on the part of a
credited
what operates on theas purchase price. condition
a suspensive Therefore, for farmers.
Extinguishment; In assigning its rights under the
compensation depositor."
contract, the Hence,
sugar compensation
central will also took
transfer place
to
Eva operates adid not result
resolutory since there
condition was no
for the Condonation
Arturo
between
borrowed
the mutual
(2000)P500,000.00 from his father.
obligations of theX and Y
ANOTHER
valid
FIRST
buyer. rightMAINof ANSWER:
ALTERNATIVE firstANS
refusal
WER: (Art. 1475 & 1319, the
AfterTaiwanese
he had paid its P300,000.00,
obligation to his
mill fathersugardied.
Yes,
NCC) the sale to the other person is valid. However, the buyer bank.
cane of the farmers. This will father's
amountestate to a
acquired the property subject to a resolutory
When the administrator of his
novation
requested payment of the balance the
of the contract by substituting of
debtor with a Arturo
P200,000.00. third party. replied UnderthatArticle
the same 1293had of
the Civil Code, such substitution cannot take
been
effect without the consent of the creditor. The
formers, who are creditors as far as the
obligation to mill their sugar cane is
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
condoned by his father as evidenced by a notation The
at action will not prosper. The existence of inflation
back
the of his check payment for the P300,000.00 deflation
or requires an official declaration by the
reading: "In full payment of the loan". Will this Bangko Sentral ng Pilipinas.
be a valid defense in an action for collection? ALTERNATIVE ANSWER:
SUGGESTED
(3%) ANSWER: The unlawful detainer action will prosper. It is a
It depends. If the notation "in full payment of given fact in the problem, that there was
the loan" was written by Arturo's father, there inflation, which caused the exchange rate to
was an implied condonation of the balance that double. Since the contract itself authorizes the
discharges the obligation. In such case, the increase in rental in the event of an inflation or
notation is an act of the father from which devaluation of the Philippine peso, the doubling
condonation may be inferred. The condonation of the monthly rent is reasonable and is
being implied, it need not comply with the therefore a valid act under the very terms of
formalities of a donation to be effective. The the contract. Brian's refusal to pay is thus a
defense of full payment will, therefore, be valid. Extinguishment;
ground for ejectment.
When, however, the notation was written by Loss sued
Dino (1994)Ben for damages because the latter
Arturo himself. It merely proves his intention in had failed to deliver the antique Marcedes
making that payment but in no way does it Benz car Dino had purchased from Ben, which
bind his father (Yam v. CA, G.R No. 104726. 11 wasby agreementdue for delivery on
February 1999). In such case, the notation was December 31, 1993. Ben, in his answer to
not the act of his father from which Dino's complaint, said Dino's claim has no
condonation may be inferred. There being no basis for the suit, because as the car was being
ALTERNATIVE ANSWER:
condonation at all the defense of full payment driven to be delivered to Dino on January 1,
If the notation was written by Arturo's father, it
will not be valid. 1994, a reckless truck driver had rammed into
amounted to an express condonation of the
the Mercedes Benz. The trial court dismissed
balance which must comply with the formalities
Dino's complaint, saying Ben's obligation had
of a donation to be valid under the 2nd SUGGESTED ANSWER:
indeed, been extinguished by force majeure. Is
paragraph of Article 1270 of the New Civil a) No. Article 1262, New Civil Code provides,
the trial court correct?
Code. Since the amount of the balance is more "An obligation which consists in the delivery of
than 5,000 pesos, the acceptance by Arturo of a determinate thing shall be extinguished if it
the condonation must also be in writing under should be lost or destroyed without the fault of
Article 748. There being no acceptance in the debtor, and before he has incurred in delay.
writing by Arturo, the condonation is void and b) The judgment of the trial court is incorrect.
the obligation to pay the balance subsists. The Loss of the thing due by fortuitous events or
defense of full payment is, therefore, not valid. force majeure is a valid defense for a debtor
In case the notation was not written by Arturo's only when the debtor has not incurred delay.
Extinguishment; Extraordinary Inflation
father, the answer is the same as the answers Extinguishment of liability for fortuitous event
or Deflation
On (2001)
July 1, 1998, Brian leased an office space in requires that the debtor has not yet incurred
above.
a building for a period of five years at a rental any delay. In the present case, the debtor was
rate of P1,000.00 a month. The contract of lease in delay when the car was destroyed on January
contained the proviso that "in case of inflation 1, 1993 since it was due for delivery on
or devaluation of the Philippine peso, the c) It depends whether or not Ben the seller,
December 31, 1993. (Art. 1262 Civil Code)
monthly rental will automatically be increased was already in default at the time of the
or decreased depending on the devaluation or accident because a demand for him to deliver
inflation of the peso to the dollar." Starting on due date was not complied with by him.
March 1, 2001, the lessor increased the rental to That fact not having been given in the
P2,000 a month, on the ground of inflation problem, the trial court erred in dismissing
proven by the fact that the exchange rate of the Dino's complaint. Reason: There is default
Philippine peso to the dollar had increased from making him responsible for fortuitous events
P25.00=$1.00 to P50.00=$1.00. Brian refused If on the other
including hand Ben was
the assumption notor
of risk inloss.
default as
SUGGESTED ANSWER:
to no demand has been sent to him prior to the
Thepay the increased
unlawful rate and
detainer action will an
notaction for
prosper. accident, then we must distinguish whether the
unlawful detainer
Extraordinary was filed
inflation against is
or deflation him. Will the
defined as price has been paid or not. If it has been paid,
action
the sharpprosper? Why?in(5%)
decrease the purchasing power of the suit for damages should prosper but only to
the peso. It does not necessarily refer to the enable the buyer to recover the price paid. It
exchange rate of the peso to the dollar. should be noted that Ben, the seller, must bear
Whether or not there exists an extraordinary the loss on the principle of res perit domino. He
inflation or deflation is for the courts to decide. cannot be held answerable for damages as the
There being no showing that the purchasing loss of the car was not imputable to his fault or
power of the peso had been reduced fraud. In any case, he can recover the value of
tremendously, there could be no inflation that the car from the party whose negligence
ALTERNATIVE ANSWER:
would justify the increase in the amount of caused the accident. If no price has been paid
rental to be paid. Hence, Brian could refuse to Extinguishment; Loss; Impossible
at all, the trial court acted correctly in
pay the increased rate. Service (1993) Page 86 of 119
dismissing the complaint.
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
In 1971, Able Construction, Inc. entered into a contract has been extinguished by the novation or extinction of
with Tropical Home Developers, Inc. whereby principal
the obligation insofar as third parties are concerned.
the former would build for the latter the houses
within its subdivision. The cost of each house, Extinguishment;
labor and materials included, was P100,000.00. Payment
In (1995)
1983 PHILCREDIT extended loans to Rivett-
Four hundred units were to be constructed Strom Machineries, Inc. (RIVETTT-STROM),
within five years. In 1973, Able found that it consisting of US$10 Million for the cost of
could no longer continue with the job due to machineries imported and directly paid by
the increase in the price of oil and its PHTLCREDIT, and 5 Million in cash payable in
derivatives and the concomitant worldwide installments over a period of ten (10) years on
spiraling of prices of all commodities, including the basis of the value thereof computed at the
basic raw materials required for the rate of exchange of the U.S. dollar vis--vis the
construction of the houses. The cost of Philippine peso at the time of payment.
development had risen to unanticipated levels RIVETT-STROM made payments on both loans
and to such a degree that the conditions and which if based on the rate of exchange in 1983
factors which formed the original basis of the would have fully settled the loans.
SUGGESTED ANSWER:
contract
Yes, had been
the Able totally changed.
Construction. Able to
Inc. is entitled PHILCREDIT contends that the payments on
brought
the reliefsuit against
sought underTropical
ArticleHomes
1267, praying
Civil Code. both loans should be based on the rate of
that
The lawthe provides:
Court relieve"Whenit ofthe
its service
obligation.has Is Able exchange existing at the time of payment,
Construction
become so difficultentitledastotothe
be relief sought?
manifestly beyond which rate of exchange has been consistently
the contemplation of the parties, the obligor increasing, and for which reason there would
may also be released therefrom, in whole or in still be a considerable balance on each loan. Is
Extinguishment;
part." SUGGESTED ANSWER:
the contention of PHILCREDIT correct? Discuss
Novation
In 1978, Bobby(1994) borrowed Pl,000,000.00 from As regards the loan consisting of dollars, the
fully.
Chito payable in two years. The loan, which was contention of PHILCREDIT is correct. It has to be
evidenced by a promissory note, was secured paid in Philippine currency computed on the
by a mortgage on real property. No action was basis of the exchange rate at the TIME OF
filed by Chito to collect the loan or to foreclose PAYMENT of each installment, as held in Kalalo
the mortgage. But in 1991, Bobby, without v. Luz, 34 SCRA 337. As regards the P5 Million
receiving any amount from Chito, executed loan in Philippine pesos, PHILCREDIT is wrong.
another promissory note which was worded The payment thereof cannot be measured by
exactly as the 1978 promissory note, except for the peso-dollar exchange rate. That will be
the date thereof, which was the date of its violative of the Uniform Currency Act (RA, 529]
execution. 1) Can Chito demand payment on which prohibits the payment of an obligation
the 1991 promissory note in 1994? 2) Can which, although to be paid in Philippine
Chito foreclose the real estate mortgage if currency,
Liability; is measured
Lease; by a foreign currency.
Joint
Bobby fails to make good his obligation under (Palanca v. CA, 238 SCRA 593).
Liability (2001)
SUGGESTED ANSWER: Four foreign medical students rented the
the 1991
1) Yes, promissory
Chito can demandnote?payment on the 1991
apartment of Thelma for a period of one year.
promissory note in 1994. Although the 1978 After one semester, three of them returned to
promissory note for P1 million payable two their home country and the fourth transferred
years later or in 1980 became a natural to a boarding house. Thelma discovered that
obligation after the lapse of ten (10) years, they left unpaid telephone bills in the total
such natural obligation can be a valid amount of P80,000.00. The lease contract
consideration of a novated promissory note provided that the lessees shall pay for the
dated in 1991 and payable two years later, or telephone services in the leased premises.
in 1993. All the elements of an implied real Thelma demanded that the fourth student pay
novation are present: a) an old valid SUGGESTED ANSWER:
the entire amount of the unpaid telephone
obligation; b) a new valid obligation; c) The fourth student is correct. His liability is only
bills, but the latter is willing to pay only one
capacity of the parties; d) animus novandi or joint, hence, pro rata. There is solidary liability
fourth of it. Who is correct? Why? (5%)
intention to novate; and e) The old and the new only when the obligation expressly so states or
obligation should be incompatible with each when the law or nature of the obligation
other on all material points (Article 1292). The requires solidarity (Art. 1207, CC). The contract
two promissory notes cannot stand together, of lease in the problem does not, in any way,
hence, theANSWER:
period of prescription of ten (10) stipulate solidarity.
SUGGESTED Liability; Solidary
years
2) has
No. The not yet
mortgage lapsed.
being an accessory contract prescribed with Liability
Joey, Jovy(1998)
and Jojo are solidary debtors under a
the loan. The novation of the loan, however, did not expressly
include the mortgage, hence, the mortgage is extinguished under loan obligation of P300,000.00 which has fallen
Article 1296 of the NCC. The contract due. The creditor has, however, condoned
Jojo's entire share in the debt. Since Jovy has
become insolvent, the creditor makes a
demand on Joey to pay the debt.
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
1) How much, if any, may Joey be compelled promissory
to note as a result of the foreclosure of the
[2%]
pay? 2) To what extent, if at all, can Jojo be mortgage.
chattel
compelled by Joey to contribute to such
payment? [3%]
SUGGESTED ANSWER: (c) The third defense of Y is untenable. Y is a
1. Joey can be compelled to pay only the surety of X and the extrajudicial demand
remaining balance of P200.000, in view of the against the principal debtor is not inconsistent
remission of Jojo's share by the creditor. (Art. with a judicial demand against the surety. A
1219, Civil Code) (d) The fourth
suretyship maydefense
co-existofwith
Y is auntenable.
mortgage.Y is
2. Jojo can be compelled by Joey to contribute liable for the entire prestation since Y incurred
P50.000 Art. 1217. par. 3, Civil Code provides. X.
a solidary obligation with
"When one of the solidary debtors cannot, (Arts. 1207, 1216. 1252 and 2047 Civil Code; Bicol
because of his insolvency, reimburse his share Savings and Loan Associates vs. Guinhawa 188 SCRA
to the debtor paying the obligation, such share 642)
shall be borne by all his co-debtors, in Liability; Solidary Obligation; Mutual
Guarantyand
A,B,C,D, (2003)
E made themselves solidarity
proportion to the debt of each."
Since the insolvent debtor's share which Joey indebted to X for the amount of P50,000.00.
paid was P100,000, and there are only two When X demanded payment from A, the latter
remaining debtors - namely Joey and Jojo - refused to pay on the following grounds. a) B is
these two shall share equally the burden of only 16 years old. b) C has already been
reimbursement. Jojo may thus be compelled by condoned by X c) D is insolvent. d) E was given
Joey to contribute P50.000.00. by X an extension of 6 months without
Liability; Solidary the consent of the other four co-debtors. State
Obligation
In June 1988, X obtained a loan from A and the effect of each of the above defenses put
(1992)
executed with Y as solidary co-maker a up by A on his obligation to pay X, if such
promissory note in favor of A for the sum of defenses are found to be true.
P200,000.00. The loan was payable at SUGGESTED ANSWERS:
(a) A may avail the minority of B as a defense,
P20,000.00 with interest monthly within the
but only for Bs share of P 10,000.00. A
first week of each month beginning July 1988
solidary debtor may avail himself of any
until maturity in April 1989. To secure the
defense which personally belongs to a solidary
payment of the loan. X put up as security a
co-debtor, but only as to the share of that co-
chattel mortgage on his car, a Toyota Corolla
debtor.
sedan. Because of failure of X and Y to pay the (b) A may avail of the condonation by X of Cs
principal amount of the loan, the car was share of P 10, 000.00. A solidary debtor may, in
extrajudicially foreclosed. A acquired the car at actions filed by the creditor, avail himself of all
After severalbidfruitless
A's highest letters ofduring
of P120,000.00 demandthe defenses which are derived from the nature of
against X
auction sale. and Y, A sued Y alone for the
recovery of P80.000.00 constituting the the obligation and of those which are personal
deficiency. Y resisted the suit raising the to him or pertain to his own share. With
sued together with Y.
following defenses: a) That Y should not be respect to those which personally belong to
b) That the obligation
liable at all because X was not has been paid others, he may avail himself thereof only as
completely by A's acquisition of the car regards that part of the debt for which the
(c) A may
latter not interpose(Article
are responsible. the defense
1222, of
NCC).
through "dacion en pago" or payment by
c) That Y should not be held liable for the insolvency of D as a defense. Applying the
cession.
deficiency of P80,000.00 because he was not a principle of mutual guaranty among solidary
co-mortgagor in the chattel mortgage of the debtors, A guaranteed the payment of Ds
car which contract was executed by X alone as share and of all the other co-debtors. Hence, A
d) Thatand
owner assuming that Y is liable, he should
mortgagor. cannot avail of the defense of Ds insolvency.
(d) The extension of six (6) months given by X
only pay the proportionate sum of P40,000.00.
to E may be availed of by A as a partial
Decide each defense with reasons.
SUGGESTED ANSWER: defense but only for the share of E, there is no
(a) This first defense of Y is untenable. Y is still novation of the obligation but only an act of
liable as solidary debtor. The creditor may liberality granted to E alone.
proceed against any one of the solidary
debtors. The demand against one does not
preclude further demand against the others so
long as the debt is not fully paid.
(b) The second defense of Y is untenable. Y is
still liable. The chattel mortgage is only given
as a security and not as payment for the debt
in case of failure to pay. Y as a solidary co-
maker is not relieved of further liability on the
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
for damages against the jewelry shop which put upBernie
the 50% of the total payments made. (Rillo v. Court
defense of force majeure. Will the action of
Appeals, G.R. No. 125347, June
prosper or not? (5%) 19,1997)
SUGGESTED ANSWER:
The action will prosper. Since the defendant Period; Suspensive
was already in default not having delivered the Period
In a deed (1991)
of sale of a realty, it was stipulated
ring when delivery was demanded by plaintiff that the buyer would construct a commercial
at due date, the defendant is liable for the loss building on the lot while the seller would
of the thing and even when the loss was due to construct a private passageway bordering the
force majeure. lot. The building was eventually finished but
Non-Payment of Amortizations; the seller failed to complete the passageway
Subdivision Buyer; When justified (2005) as some of the squatters, who were already
Bernie bought on installment a residential known to be there at the time they entered
subdivision lot from DEVLAND. After having into the contract, refused to vacate the
faithfully paid the installments for 48 months, premises. In fact, prior to its execution, the
Bernie discovered that DEVLAND had failed to seller filed ejectment cases against the
develop the subdivision in accordance with the squatters. The buyer now sues the seller for
approved plans and specifications within the specific performance with damages. The
time frame in the plan. He thus wrote a letter to defense is that the obligation to construct the
DEVLAND informing it that he was stopping passageway should be with a period which,
payment. Consequently, DEVLAND cancelled SUGGESTED ANSWER:
incidentally,
No. the action hadfornot been performance
specific fixed by them, filed by
the sale and wrote Bernie, informing him that hence, theisneed for fixing a judicial period. Will
a) Was theare action of in
DEVLAND the buyer premature under Art. 1197 of the
his payments forfeited its favor. proper? the
Explain. (2%) Civilaction
Code. for
If aspecific performance
period has not been of the
fixed
SUGGESTED ANSWER: buyer against
although the seller by
contemplated prosper?
the parties, the
No, the action of DEVLAND is not proper. Under parties themselves should fix that period,
Section 23 of Presidential Decree No. 957, failing in which, the Court maybe asked to fix it
otherwise known as the Subdivision and taking into consideration the probable
Condominium Buyer's Protection Decree, non- ALTERNATIVE
contemplation ANSWER:
of the parties. Before the period
payment of amortizations by the buyer is justified It has been held in Borromeo vs. CA (47 SCRA
is fixed, an action for specific performance is
if non-payment is due to the failure of the 69), that the Supreme Court allowed the
premature.
subdivision owner to develop the subdivision simultaneous filing of action to fix the probable
project according
(Eugenio v. Drilon, to the
G.R. No.approved plans and
109404, January 22, contemplated period of the parties where none
1996)
within the limit for complying. is fixed in the agreement if this would avoid
b) Discuss the rights of Bernie under the multiplicity of suits. In addition, technicalities
circumstances. (2%) ALTERNATIVE ANSWER:
must be subordinated to substantial justice.
SUGGESTED ANSWER: The action for specific performance will not
Under P.D. No. 957, a cancellation option is prosper. The filing of the ejectment suit by the
available to Bernie. If Bernie opts to cancel the seller was precisely in compliance with his
contract, DEVLAND must reimburse Bernie the obligations and should not, therefore, be
total amount paid and the amortizations faulted if no decision has yet been reached by
interest, excluding delinquency interest, plus the Court on the matter.
interest at legal rate. (Eugenio v. Drilon, G.R.
No. 109404, January 22, 1996) TRUST
c) Supposing DEVLAND had fully developed
the subdivision but Bernie failed to pay Express Trust;
further installments after 4 years due to Prescription
On 01 January (1997)
1980, Redentor and Remedies
business reverses. Discuss the rights and entered into an agreement by virtue of which
SUGGESTED ANSWER: the former was to register a parcel of land in
obligations of the parties. (2%)
In this case, pursuant to Section 24 of P.D. No. the name of Remedies under the explicit
957, R.A. No. 6552 otherwise known as the covenant to reconvey the land to Remigio, son
Realty Installment Buyer Protection Act, shall of Redentor, upon the son's graduation from
govern. Under Section 3 thereof, Bernie is college. In 1981, the land was registered in the
entitled: 1) to pay without additional interest Redentor
Loss
name of died
of the a year
thing
Remedies. laterForce
due; or in 1982. In March
the unpaid installments due within a grace 1983,
Majeure
KristinaRemigio
(2000)
brought graduated
her diamond fromring
college. In
to a jewelry
period of four (4) months or one month for February 1992, Remigio
shop for cleaning. accidentally
The jewelry found a
shop undertook
every year of installment paid; 2) if the copy of the
to return thedocument so constituting
ring by February 1, 1999." Remedies
When
contract is cancelled, Bernie is entitled to the as
thethe trustee
said of the land.
date arrived, In May shop
the jewelry 1994,
refund of the cash surrender value equal to Remigio
informedfiled a case
Kristina against
that the JobRemedies
was not yet for the
DEVLAND
50% of theon thepayments
total other hand
made.has the right to
reconveyance of the land
finished. They asked her totoreturn
him. Remedies,
five days in
cancel the contract after 30 days from receipt
her answer,
later. averred
On February 6,that
1999,theKristina
action went
alreadyto the
by Bernie of notice of cancellation. DEVLAND is SUGGESTED ANSWER:
prescribed.
shop to claim How
theshould theshe
ring, but matter
was be decided?
informed
however obliged to refund to
that the same was stolen by a thief who
entered the shop the night before. Kristina filed
an action
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
The matter should be decided in favor of Remigio
1. Juana has the right of action to recover (a) her one-
because
(trustee) the action has not prescribed. The half
case at bar involves an express trust which
does not prescribe as long as they have not
been repudiated by the trustee (Diaz vs.
Gorricho. 103 Phil, 261).
Implied Trust
(1998)
Juan and his sister Juana inherited from their
mother two parcels of farmland with exactly
the same areas. For convenience, the Torrens
certificates of title covering both lots were
placed in Juan's name alone. In 1996, Juan sold
to an innocent purchaser one parcel in its
entirety without the knowledge and consent of
1.
Juana,What
andrights of action,
wrongfully if any,
kept fordoes Juanathe
himself
have against and/or
entire price paid. the buyer? |3%]
2. Since the two lots have the same area,
suppose Juana flies a complaint to have herself
declared sole owner of the entire remaining
second lot, contending that her brother had
forfeited his share thereof by wrongfully
disposing of her undivided share in the first lot.
Will the suit prosper? [2%]
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
Trust; Implied Resulting (Art. 1624; 1475. CC; Rodriguez v. CA, et al, G.
Trust
In 1960, (1995)
Maureen purchased two lots in a plush share in the proceeds
R No. 84220, of1992
March 25. the sale
207with
SCRAlegal
553).
ALTERNATIVE
interest ANSWER:
thereof, and (b) such damages as she
subdivision registering Lot 1 in her name and
No, the defense of Peter Co will not prosper.
Lot 2 in the name of her brother Walter with the may be able to prove as having been suffered
Hadji Butu validly acquired his right by an
latter's consent. The idea was to circumvent a by her, which may include actual or
assignment of credit under Article 1624 of the
subdivision policy against the acquisition of compensatory damages as well as moral and
Civil Code. However, the provisions on the
more than one lot by one buyer. Maureen exemplary damages due to the breach of trust
contract of sale (Article 1475 Civil Code) will
constructed a house on Lot 1 with an extension and bad faith (Imperial vs. CA, 259 SCRA
apply, and the transaction is covered by the
on Lot 2 to serve as a guest house. In 1987, 65). Of course, if the buyer knew of the co-
Statute of Frauds. (Art. 1403 par. (2) Civil
Walter who had suffered serious business ownership
Conditional over theSale lot he wasvs. buying, Juana
Code)
losses demanded that Maureen remove the can seek
Absolute Sale
Distinguish (c) reconvenyance
between (1997) of
a conditional her one-half
sale, on the
extension house since the lot on which the share
one hand, and an absolute sale, onthe
instead but she must implead thebuyerother
extension was built was his property. In 1992, as co-defendant
hand.
SUGGESTED ANSWER: and allege his bad faith in
Maureen sued for the reconveyance to her of purchasing
A CONDITIONAL the entireSALElot. is oneFinally,
where consistent
the vendor
Lot 2 asserting that a resulting trust was with
is the
granted ruling
ADDITIONAL ANSWER:
the in Imperial
right to us. CA.
unilaterally Juanarescindmay the
created when she had the lot registered in seek
contractinstead (d)
predicated a declaration
on the
1. Juana can file an action for damages against that she
fulfillment is ornownon-
Walter's name even if she paid the purchase the
Juansole
fulfillment, owner
for having as of the entire
the
fraudulentlycase remaining
mayone
sold be, oflot ofontwo
the the
price. Walter
SUGGESTED opposed the suit arguing that
ANSWER: the theory
prescribed
parcels which that heJuan
condition. partlyhas forfeited
AnheldABSOLUTE
in trust hisSALE
one-half
for is one
Juana's
assuming
This is a casethe of existence
an implied of aresulting
resultingtrust.
trustIfthe share
where
benefit. therein.
the
Juana titlemayto the claim property
actual or is not reserved
Walter claims to have acquired ownership since
action of Maureen has already prescribed of to the vendor or
compensatory if the vendor
damage for theisloss notof granted
her share the
ten land
the yearsby have already elapsed
prescription from thehis
or if he anchors right
in the land; moral damages for the mental the
to rescind the contract based on
registration
defense
SUGGESTED of the titleprescription,
onANSWER:
extinctive in his name.the Decide.
ten year fulfillment
anguish, or nonfulfillment,
anxiety, moral shock as
andthe case may
wounded
1. When, for convenience, the Torrens title Contract of Sale vs. Agency
Discuss fully.
period must be reckoned from 1987 when he to be, of
feelings the sheprescribed condition.
the two parcels of land were placed in Joan's togranted
A Sell (1999) B had suffered; exemplary
the exclusive right to selldamage his brand
demanded that Maureen remove the extension by way of example for the common good,for andhis
name alone, of Maong pants in Isabela, the price
house on Lot thereNo. 2 was because createdsuchandemand
implied trust attorney's fees. Juana has no cause of action
(a resulting trust) for the benefit ofofJuana with merchandise payable within 60 days from
amounts to an express repudiation the trust against
Juanitas trustee delivery,the and buyer
promisingwho acquired the land for
B a commission of 20%
and was made of knownone-half undivided
to Maureen. Theoraction
ideal value and in good faith, relying on the transfer
portion of each filed of the two islots. Therefore, on all sales. After the delivery of the
for reconveyance in 1992 not yet barred certificate showing thatbefore
Juan ishe thecould
registered
Juana can file an action Huang for damages merchandise
SUGGESTED to B but
ANSWER: sell any
by prescription. (Spouses v. Courtagainst
of owner
2. Juana'sof the
suit land.
to have herself declared as sole
of them, Bs store in Isabela was completely
Joan for having
Appeals, Sept. 13, SALES
fraudulently
1994). sold one of the two
parcels which he partly held in trust for Juana's
owner
burnedofwithoutthe entire remaining
his fault, together areawithwill notall of A's
prosperMust
SUGGESTED
pants. because
ANSWER:
B pay while Juan's
A for his actlostinpants?
selling Why? the
benefit. Juana may claim actual or The
Assignment othercontract
lot was between
wrongful.AIt and did notB ishave
a sale thenot an
legal
compensatoryof Creditfor
damage vs.the loss of her share (5%)
agency
Subrogation
Peter (1993) effect of forfeiting his share in the remaining by
to sell because the price is payable
in theCo, a trader
land; moral from Manila, has
damages for dealt
the mental B
business with Allied Commodities in Hongkong lot.upon
However, 60 days Juanafrom can file delivery
an action even againstif B is
anguish, anxiety, moral shock and wounded unable
Juana
for fivehas no cause
years. All throughof action against the buyer Juan forto resell it.orIftermination
partition B were an agent, of the co- he is not
feelings she had suffered;the years, Peter
exemplary Co
damage bound to pay
who acquiredan
accumulated the land for value
indebtedness of and in good
P500,000.00 ownership withthe price ifthat
a prayer he the
is unable
lot sold tobe resell
by way of example for the common good, and As a buyer, ownership passed to B
faith,
with relying
Allied on the transfer
Commodities. Uponcertificate
demand by of its
title it.
ANOTHER
adjudicated ANSWER:
to Juan, and the remaining lot upon
be
attorney's fees. 2. The suit
delivery and, willunder
prosper, Art. applying
1504toofher. rulingCode,
the Civil in
showing that Juan is
agent in Manila, Peter Co paid Allied the registered owner of adjudicated and reconveyed
ANOTHER ANSWER: Imperial
the thingvs.perishes
CA cited for above. the Bothowner.law and Hence, B
the land.
Commodities by check the amount owed. Upon
1. Under Article 476 of the Civil Code, Juana equitystill
must authorize
pay thesuch price.a result, said the
deposit in the payee's account in Manila, the Contract
Supreme Court. of Sale; Marital Community
can file an action for quieting of title as there is
check was dishonored for insufficiency of funds. Strictly speaking,
Property; Formalities Juana's(2006) contention that her
a cloud in the title to the subject real property.
For and in consideration of P1.00, Allied brother had
Spouses Biong forfeited
and Lindahis share wantedin the tosecond
sell their
Second, Juana can also file an action for
Commodities assigned the credit to Hadji Butu lot is incorrect.
house. They found Even aif the two lots have
prospective buyer, theRay.
damages against Juan, because the settled
who brought suit against Peter Co in the RTC of same area,
Linda it doeswith
negotiated not follow
Ray for thatthe theysale have of the
rule is that the proper recourse of the true
Manila for recovery of the amount owed. Peter the same value.
property. They Since agreed theonsale a offairthe first lot
price of P2
owner of the property who was prejudiced and
Co moved to dismiss the complaint against him on the Torrens
Million. Ray sent titleLinda
in thea name letterofconfirming
Juan was his
fraudulently dispossessed of the same is to
on the ground that Hadji Butu was not a real valid,
intention all that
to buy Juanathe may recover is
property. the value
Later, another of
bring an action for damages against those who
party
SUGGESTED
in interest and, therefore, without legal her undivided
couple, Bernieinterest and Elena,therein,offeredplus damages.a similar
caused orANSWER:
employed the same. Third, since
capacity
No, Co's to sue and
defense willtothat
not he had not agreed notto aa In addition, she can askof forP partition or But Ray
Juana had the right herprosper.
share inThis the isproperty house at a lower price 1.5 Million.
subrogation
case of of creditor.
subrogation, but Will
an Peter Co's defense
assignment of reconveyance
insisted on buying of her undivided
the houseinterest of Biong in the and
by way of inheritance, she can demand the
of absence
credit. of agreement
ASSIGNMENT to a subrogation of secondfor lot,sentimental
without prejudice to Ray
any agreement
partition of the thingOF CREDIT
owned is the process
in common, under Linda
ALTERNATIVE ANSWER:
reasons. prepared a
creditor
However,
of prosper?
transferring sincethe the
right farmland was sold
of the assignor to an
to the between
deed them that in lieu of thethepayment of a
Article 494 of the Civil Code, and ask that the 2. Theofsuit sale willtonotbeprosper,
signed by
since couple and
Juan's
innocent
assignee. purchaser
The assignmentfor value, may then
be Juanaeither
done has no the value
manager's of Juana's
check for share
P2 in the
Million. first
After lot and
receiving
title to the remaining property be declared as wrongful act of pocketing the entire proceeds
cause of action against theinbuyer whichconsistent
case, the with damages, the second
gratuitously
exclusively hers.
the established
or onerously,
rule that the rights of an ofinnocent
the
of the P2sale
Million,
of the first lot
Biong lot be
signed reconveyed
is not the deed of
a ground to her.
forsale.
assignment has an effect similar to that a However, Linda was not able
divesting him of his rights as a co-owner of the to sign it because
purchaser
sale (Nyco Sales Corp.v.BA Finance Corp. G.Rand
for value must be respected she waslot. abroad. Onsuchher wrongdoing
return, she by refused
protected second
Will Indeed,
the document
suit prosper? Explain. Juan to
No.71694.notwithstanding
Aug.16, 1991 200 theSCRA
fraud 637).
employed
As a by sign the ANSWER: for the benefit of Juana, her
saying she changed
the seller in securing his title. (Eduarte vs. CA, 253 does not constitute,
ALTERNATIVE
(2.5%)
result of the assignment, the plaintiff acquired mind. Linda
any of the modes filedofsuit for nullification
acquiring ownership of underthe
ADDITIONAL ANSWER:
SCRA
all the391)
rights of the assignor including the right deed of sale
Art. 712, Civil Code. and for moral and exemplary
to sue in his own name as the legal assignee. In damages against Ray.
assignment, the debtor's consent is not
essential for the validity of the assignment
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
No, the suit will not prosper. The contract of sale was In a CONTRACT OF SALE, ownership is transferred to
perfected when Linda and Ray agreed on the the buyer upon delivery of the object to him
object of the sale and the price [Art. 1475, New while in a CONTRACT TO SELL, ownership is
Civil Code]. The consent of Linda has already retained by the seller until the purchase price
been given, as shown by her agreement to the is fully paid. In a contract to sell, delivery of the
price of the sale. There is therefore consent on object does not confer ownership upon the
her part as the consent need not be given in buyer. In a contract of sale, there is only one
any specific form. Hence, her consent may be contract executed between the seller and the
given by implication, especially since she was buyer, while in a contract to sell, there are two
aware of, and participated in the sale of the contracts, first the contract to sell (which is a
property (Pelayo v. CA, G.R. No. 141323, June conditional or preparatory sale) and a second,
8, 2005). Her action for moral and exemplary the final deed of sale or the principal contract
ALTERNATIVE ANSWER:
damages will also not prosper because the Contract to Sell; after
which is executed Acceptance; Rightofofthe
full payment
The suit will prosper. Sale of community First
A is Refusal
the lessee (1991)
of an apartment owned by Y. A
case does
property not fall
requires underconsent
written any ofof those
both purchase price.
mentioned in failure
Art. 2219 and 2232 of the Civil allowed his married but employed daughter B,
spouses. The or refusal of Linda to affix whose husband works in Kuwait, to occupy it.
Code.
her signature on the deed of sale, coupled with The relationship between Y and A soured. Since
her express declaration of opposing the sale he has no reason at all to eject A, Y, in
negates any valid consent on her part. The connivance with the City Engineer, secured
consent of Biong by himself is insufficient to from the latter an order for the demolition of
effect a valid sale of community property (Art. the building. A immediately filed an action in
96, Family Code; Abalos v. Macatangay, G.R. the Regional Trial Court to annul the order and
Does Ray September
No. 155043, have any 30, cause
2004). of action to enjoin its enforcement. Y and A were able to
against Biong and Linda? Can he also
forge a compromise agreement under which A
recover damages from the spouses?
Considering that the contract has already been agreed to a twenty percent (20%) increase in
Explain. (2.5%)
perfected and taken out of the operation of the the monthly rentals. They further agreed that
statute of frauds, Ray can compel Linda and the lease will expire two (2) years later and
Biong to observe the form required by law in that in the event that Y would sell the property,
order for the property to be registered in the either A or his daughter B shall have the right
B. B then filed an action to rescind the sale in
name of Ray which can be filed together with of first refusal. The Compromise Agreement
favor of the corporation and to compel Y to sell
the action for the recovery of house [Art. 1357 was approved by the court. Six (6) months
the property to her since under the
New Civil Code]. In the alternative, he can before the expiration of the lease, A died. Y
Compromise Agreement, she was given the
recover the amount of Two million pesos sold the property to the Visorro Realty Corp.
right of first refusal which, she maintains is a
(P2,000,000.00) that he paid. Otherwise, it without notifying
stipulation pour atrui under Article 1311 of the
Ray can recover moral damages on
would result in solutio indebiti or unjust the ground SUGGESTED
Civil Code.ANSWER:
Is she correct?
that the
enrichment. action filed by Linda is clearly an B is not correct. Her action cannot prosper.
unfounded civil suit which falls under malicious Article 1311 requires that the third person
prosecution {Ponce v. Legaspi, G.R. No. 79184, intended to be benefited must communicate
May 6,1992). his acceptance to the obligor before the
Contract to Sell revocation. There is no showing that B
(2001)
Arturo gave Richard a receipt which manifested her acceptance to Y at any time
states:
Receipt Received from Richard as down before the death of A and before the sale.
payment for my 1995 Toyota Corolla with plate Hence, B cannot enforce any right under the
No. XYZ-1 23.............. P50.000.00 Double Sales
alleged stipulation pour atrui.
(2001)
On June 15, 1995, Jesus sold a parcel of
registered land to Jaime. On June 30, 1995, he
Balance payable: 12/30/01........ P50 sold the same land to Jose. Who has a better
000.00 right if: a) the first sale is registered ahead of
September 15, 2001. with knowledge
the second sale,of the latter. Why? (3%) b) the
second sale is registered ahead of the first
(Sgd.) Arturo Does this receipt sale,with knowledge of the latter? Why?
evidence a contract to sell? Why? (5%) (5%) ANSWER:
SUGGESTED
SUGGESTED ANSWER: (a) The first buyer has the better right if his
It is a contract of sale because the seller did sale was first to be registered, even though the
not reserve ownership until he was fully paid. first buyer knew of the second sale. The fact
that he knew of the second sale at the time of
Contract to Sell vs. Contract his registration does not make him as acting in
of Sale
State (1997)
the basic difference (only in their legal bad faith because the sale to him was ahead in
effects) Between a contract to sell, on the one time, hence, has a priority in right. What
hand, and a contract of sale, on the other. creates bad faith in the case of double sale of
SUGGESTED ANSWER:
land is knowledge of a previous sale.
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
b) The first buyer is still to be preferred, where (2)
theyears, or until 3 June 1973. It is further stated
sale is registered ahead of the first sale but
second that
thereinshould the Vendor (Juliet) fail to exercise
with knowledge of the latter. This is because her right to redeem within the said period, the
the second buyer, who at the time he conveyance shall be deemed absolute and
registered his sale knew that the property had irrevocable. Romeo did not take possession of
already been sold to someone else, acted in the property. He did not pay the taxes thereon.
bad faith. (Article 1544, C.C.)
Double Sales Juliet died in January I973 without having
(2004)
JV, owner of a parcel of land, sold it to PP. But repurchased the property. Her only surviving
the deed of sale was not registered. One year heir, her son X, failed to repurchase the
later, JV sold the parcel again to RR, who property on or before 3 June 1973. In 1975,
succeeded to register the deed and to obtain a Romeo sold the property to Y for P50,000.00.
transfer certificate of title over the property in Upon learning of the sale, X filed an action for
his own name. Who has a better right over the the nullification of the sale and for the recovery
parcel of land, RR or PP? Why? Explain the of the property on the ground that the so-called
SUGGESTED
legal basisANSWER:
for your answer. (5%) deed of absolute sale executed by his mother
It depends on whether or not RR is an innocent
was merely an equitable mortgage, taking into
purchaser for value. Under the Torrens
account the inadequacy of the price and the
System, a deed or instrument operated only as
failure of Romeo to take possession of the
a contract between the parties and as
property and to pay the taxes thereon. Romeo
evidence of authority to the Register of Deeds
and Y maintain that there was a valid absolute
to make the registration. It is the registration X? b) If you decide in favor of Romeo and Y,
sale and that the document signed by the
of the deed or the instrument that is the would you
former on 3 June 1973 was merely a promise to
operative act that conveys or affects the land. uphold the validity of the promise to
sell. a) If you were the Judge, would you uphold
(Sec. 51, P.D. No. 1529). sell? ANSWER:
SUGGESTED
In cases of double sale of titled land, it is a A. I will not of
the theory uphold the theory of X for the
well-settled rule that the buyer who first nullification of the sale and for the recovery of
registers the sale in good faith acquires a the property on the ground that the so-called
better right to the land. (Art. 1544, Civil Code). sale was only an equitable mortgage. An
Persons dealing with property covered by equitable mortgage may arise only if, in truth,
Torrens title are not required to go beyond the sale was one with the right of repurchase.
what appears
(Orquiola v. CAon its face.
386, SCRA 301, [2002]; The facts of the case state that the right to
Domingo v. Races 401 SCRA 197, [2003]). repurchase was granted after the absolute
Thus, absent any showing that RR knew about, deed of sale was executed. Following the rule
or ought to have known the prior sale of the in Cruzo vs. Carriaga (174 SCRA 330), a deed of
land to PP or that he acted in bad faith, and repurchase executed independently of the
being first to register the sale, RR acquired a deed of sale where the two stipulations are
good and a clean title to the property as found in two instruments instead of one
Equitable
against PP. document, the right of repurchase would
Mortgage
On (1991)
20 December 1970, Juliet, a widow,
amount only to one option granted by the
borrowed from Romeo P4,000.00 and, as
buyer to the seller. Since the contract cannot
security therefore, she executed a deed of
be upheld as a contract of sale with the right to
mortgage over one of her two (2) registered
repurchase, Art. 1602 of the Civil Code on
lots which has a market value of P15,000.00.
equitable mortgage will not apply. The rule
The document and the certificate of title of the
could have been different if both deeds were
property were delivered to Romeo.
On 2 June 1971, Juliet obtained an additional executed on the same occasion or date, in
sum of P3,000 from Romeo. On this date, which case,to
B. If I were under
decidetheinruling
favor inofspouses
Romeo and Y, I
however, Romeo caused the preparation of a would not uphold the validity of the
Claravall v. CA (190 SCRA 439), the contract
promise to
deed of absolute sale of the above property, to may still be sustained as an equitable
sell, so as to enforce it by an action for specific
which Juliet affixed her signature without first mortgage,
performance. given
Thethe circumstances
promise expressed
to sell would only
reading the document. The consideration in Art. 1602.
amount The reserved
to a mere offer and,right to repurchase
therefore, it is not
indicated is P7,000.00. She thought that this is then deemed
enforceable an original
unless intention.
it was sought to be
document was similar to the first she signed. exercised before a withdrawal or denial
When she reached home, her son X, after Even
thereof.assuming the facts given at the end of the
reading the duplicate copy of the deed, case, there would have been no separate
informed her that what she signed was not a consideration for such promise to sell. The
mortgage but a deed of absolute sale. On the contract would at most amount to an option
following day, 3 June 1971, Juliet, accompanied which again may not be the basis for an action
by X, went back to Romeo and demanded the Equitable
for specific Mortgage
performance. vs.
Sale
On (2005)
July 14, 2004, Pedro executed in favor of
reformation it, Romeo prepared and signed a
document wherein, as vendee in the deed of Juan a Deed of Absolute Sale over a parcel of
land covered by TCT No. Page 93 of 119
sale above mentioned, he obligated and bound
himself to resell the land to Juliet or her heirs
and successors for the same consideration as
reflected in the deed of sale (P7,000) within a
period of two
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
6245. It appears in the Deed of Sale that Pedro X sold a parcel of land to Y on 01 January 2002,
from
receivedJuan P120,000.00 as purchase price. payment
However, Pedro retained the owner's duplicate
of said title. Thereafter, Juan, as lessor, and
Pedro, as lessee, executed a contract of lease
over the property for a period of one (1) year
with a monthly rental of Pl,000.00. Pedro, as
lessee, was also obligated to pay the realty
taxes on the property during the period of
Subsequently,
lease. Pedro filed a complaint against
Juan for the reformation of the Deed of
Absolute Sale, alleging that the transaction
covered by the deed was an equitable
mortgage. In his verified answer to the
complaint, Juan alleged that the property was
sold to him under the Deed of Absolute Sale,
and interposed counterclaims to recover
possession of the property and to compel
SUGGESTED ANSWER:
Pedro to turn over to him the owner's duplicate
The complaint of Pedro against Juan should be
of title. Resolve the case with reasons. (6%)
dismissed. The instances when a contract
regardless of its nomenclature may be
presumed to be an equitable mortgage are
enumerated in Article 1602 of the Civil Code:
"Art. 1602. The contract shall be presumed to
1When
be an the price of a
equitable sale with right
mortgage, to repurchase
in any of the is
unusually inadequate:
following cases:
2When the vendor remains in possession as lessee
or otherwise;
3When upon or after the expiration of the right to
repurchase another instrument extending the
period of redemption or granting a new period is
executed;
4When the purchaser retains for himself a part of
the purchase price;
5When the vendor binds himself to pay the taxes on
the thing sold;
6In 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.
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
a) Article 1592 of the Civil Code does not apply to a
conditional sale. In Valarao v. CA, 304 SCRA and delivery to be made on 01 February 2002.
155, the Supreme Court held that Article 1592 It was stipulated that if payment were not to be
applies only to a contract of sale and not to a made by Y on 01 February 2002, the sale
Deed of Conditional Sale where the seller has between the parties would automatically be
reserved title to the property until full payment rescinded. Y failed to pay on 01 February 2002,
of the purchase price. The law applicable is the but offered to pay three days later, which
SUGGESTED
Maceda Law. ANSWER: payment X refused to accept, claiming that
b) No, the vendor cannot rescind the contract SUGGESTED ANSWER:
their contract of sale had already been
under the circumstances. Under the Maceda No, X is not correct. In the sale of immovable
rescinded. Is Xs contention correct? Why? 5%
Law, which is the law applicable, the seller on property, even though it may have been
installment may not rescind the contract till stipulated, as in this case, that upon failure to
after the lapse of the mandatory grace period pay the price at the time agreed upon the
of 30 days for every one year of installment rescission of the contract shall of right take
payments, and only after 30 days from notice place, the vendee may pay, even after the
of cancellation or demand for rescission by a expiration of the period, as long as no demand
notarial act. In this case, the refusal of the for rescission of the contract has been made
seller to accept payment from the buyer on the upon him either judicially or by a notarial act
49th month was not justified because the (Article 1592, New Civil code). Since no
buyer was entitled to 60 days grace period and demand for rescission was made on Y, either
ANOTHER SUGGESTED ANSWER:
the payment was tendered within that period. judicially or by a notarial
This is a contract act,not
to sell and X cannot refuse
a contract of
Moreover, the notice of rescission served by to
absolute sale, since as there has been no (3)
accept the payment offered by Y three
the seller on the buyer was not effective days after
delivery of the
the expiration of 1592
land. Article the period.
of the New
because the notice was not by a notarial act. Civil code is not applicable. Instead, Article
Besides, the seller may still pay within 30 days 1595 of the New Civil Code applies. The seller
from
MacedasuchLaw;
notarial notice before rescission may
Recto has two alternative remedies: (1) specific
be effected.
are the so-calledrequirements
Law (1999)
What All these "Maceda" and for"Recto"
a valid performance, or (2) rescission or resolution
rescission were not complied with by the seller.
laws in connection with sales on installments? ALTERNATIVE
under ArticleANSWER:
1191 of the New Civil code. In
Hence, the rescission is invalid. Yes, the contract was automatically rescinded
Give the most important features of each law. both remedies, damages are due because of
SUGGESTED ANSWER: upon Ys failure to pay on 01 February 2002. By
(5%) default.
The MACEDA LAW (R.A. 655) is applicable to the express terms of the contract, there is no
sales of immovable property on installments. need for X to make a demand in order for
The most important features are (Rillo v. CA, rescission to take place. (Article 1191, New
(1) After
247 SCRAhaving
461): paid installments for at least Angeles 35 Suria
Civil Code, SCRAv.
102
IAC 151 SCRA 661 [1987];
two years, the buyer is entitled to a mandatory [1970]).
U.P. v. de los
Maceda Law
grace period of one month for every year of
(2000)
Priscilla purchased a condominium unit in
installment payments made, to pay the unpaid
Makati City from the Citiland Corporation for a
installments without interest.
If the contract is cancelled, the seller shall price of P10 Million, payable P3 Million down
refund to the buyer the cash surrender value and the balance with interest thereon at 14%
equivalent
"In any of to thefifty percent (50%)
foregoing cases,ofanythe total
money, per annum payable in sixty (60) equal monthly
payments made,benefit
fruits, or other and afterto five years of by the
be received installments of P198,333.33. They executed a
installments,
vendee as an rentadditional five percent
or otherwise (5%) be
shall Deed of Conditional Sale in which it is
every year but not to exceed ninety
considered as interest which shall be subject percent stipulated that should the vendee fail to pay
(90%) of the laws."
to the usury total payments made. three (3) successive installments, the sale shall
(2) In case
Article 1604the states
installments paid were
that "the less than
provisions of be deemed automatically rescinded without the
2 years,1602
article the seller
shallshall
alsogive the buyer
apply a grace
to a contract necessity of judicial action and all payments
period of not
purporting to less
be an than 60 days.
absolute If the buyer
sale." made by the vendee shall be forfeited in favor
fails
For to pay the1602
Articles installments
and 1604 due atto the
apply, two of the vendor by way of rental for the use and
expiration
requisites of the concur:
must grace period,
1) thethe sellerentered
parties may occupancy of the unit and as liquidated
cancel
into a the contract
contract after 30 days
denominated as from receipt of
a contract damages. For 46 months, Priscilla paid the
by theand
sale; buyer2) of the intention
their notice of cancellation
was to secure or an monthly installments religiously, but on the
demand
G.R.
existingNo.for rescission
152168,
debt by way byofnotarial
December 10,
mortgage. act. The
(Heirs of 47th and 48th months, she failed to pay. On the
2004)
RECTO
Balite v.LAWLim, (Art. 1484} refers to sale of 49th month, she tried to pay the installments
In the given
movables payablecase, although Pedro
in installments retained
and limiting due but the vendor refused to receive the
possession
the right of seller, in case of default by the the
of the property as lessee after payments tendered by her. The following
execution
buyer, to one of ofthe Deed
three of Sale,a) there
remedies: exact is no month, the vendor sent her a notice that it was
showing that
fulfillment; b) the
cancelintention of the
the sale if twoparties
or morewas to rescinding the Deed of Conditional Sale
secure an existing
installments have not debt by way of mortgage. pursuant to the stipulation for automatic
Hence, the complaint of Pedro should be rescission,ANSWER:
SUGGESTED and demanded that she vacate the
Immovable Property; Rescission of
dismissed. premises. She replied that the contract cannot
Contract (2003) Page 94 of 119
be rescinded without judicial demand or
notarial act pursuant to Article 1592 of the Civil
Code. a) Is Article 1592 applicable? (3%) b)
Can the vendor rescind the contract? (2%)
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
for absolute sale, Simeon suddenly has a change May of Adela still exercise her right of redemption?
claiming
heart, that the deal is disadvantageous to Option Contract
(5%)
Explain.
him as he has found out that the property can (2002)
Explain the
SUGGESTED nature of an option contract.
ANSWER:
fetch three time the agreed purchase price. Yes,
(2%) Adela
SUGGESTED may still exercise her right of
ANSWER:
Bert seeks specific performance but Simeon An OPTION notwithstanding
redemption CONTRACT is the one lapse granting
of morea
contends that he has merely given Bert an privilege
than 30 to
days buyfrom or sell
notice within
of the an
sale agreed
given time
to
option to buy and nothing more, and offers to and because
her at a Article determined 1623 ofprice. the New It Civil
mustCode be
B. Willthe
return Berts action
option for which
money specific
Bertperformance
refuses to supported
requires thatby the a consideration
notice in writing distinct
of the fromsalethe
prosper?
accept. Explain. (4%) price. come
must (Art. 1479 from and 1482, NCC) vendor or
the prospective
C. May Simeon justify his refusal to proceed Option
vendor asContract; the case may Earnest
be. In this case, the
with the sale by the fact that the deal is Money
LT applied
notice of(1993)
the with
sale BPI was to given
purchase by the a housevendee and andlot
financially disadvantageous to him? Explain. in Quezon
ALTERNATIVE
the Register City,
ANSWER: one ofThe
of Deeds. its acquired
period of 30 assets.
daysThe
Adela
amount canoffered
no longer exercise her right of
SUGGESTED
(4%) ANSWER: never tolled. Shewas can Pl,000,000.00
still avail of that payable,
right. as
B. Berts action for specific performance will redemption. As co-owner,
follows: P200,000.00 down payment, she had only 30 days the
prosper because there was a binding from balance the of time she received
P800,000.00 written
payable notice
within 90ofdaysthe
agreement of sale, not just an option contract. sale fromwhich June in1,this case BPI
1985. took accepted
the form ofthe a copy offer,
The sale was perfected upon acceptance by of the deed of
whereupon LT saledrewbeing a check given fortoP200,000.00
her (Conejero in
Simeon of 10% of the agreed price. This v. CA, 16
favor of SCRA BPI 775 which[1966]) the . The law does
latter not
thereafter
amount is in really earnest money which, under prescribedepositedany in particular
its account. form On of written
September notice,5,
Art. 1482, shall be considered as part of the nor any distinctive method
1985, LT wrote BPI requesting extension for notifying the until
price and as proof of the perfection of the redemptioner (Etcuban
October 10, 1985 within which to pay v. CA, 148 SCRA 507 the
contract. (Topacio v. CA, 211 SCRA 291 [1987]). So long as the
balance, to which BPI agreed. On October 5, redemptioner was
C. Simeon cannot justify his refusal to proceed informed in writing, he has no cause to
[1992]; Villongco Realty v. Bormaheco, 65 1985, due to the expected delay in the
with the
SCRA sale by the fact that the deal is complain (Distrito v. CA, 197 SCRA 606, 609
352 [1975]). remittance of the needed amount by his
financially disadvantageous to him. Having [1991]). In fact, in Distrito, a written notice was
financier from the United States, LT wrote BPI
made a bad bargain is not a legal ground for held unnecessary where the co-owner had
requesting
Right of First a last extension
Refusal; Lessee; until October 30,
pulling out a biding contract of sale, in the actual knowledge of the
v. Villa, 35 Phil 769 [1916]) , and no such 1985,
Effect
Ubaldo within
(1996)
is the which
owner oftoa sale,
pay having
building thewhich acted asBPI
balance. has
absence of some actionable wrong by the other middleman and being present when the vendor
wrong has been committed by Bert. denied
been leasedLTs by request
Remigio because
for the past another
20 years. had
party (Vales signed thetodeed of sale.
offered
Ubaldo has repeatedly assured Remigio that iffor
buy the same property
Redemption; Legal; P1,500,000.00.
he should decideBPI to sell cancelled
the building, its he agreement
will
Formalities (2001)
Betty and Lydia were co-owners of a parcel of with
give Remigio the right of first refusal. Onamount
LT and offered to return to him the June
land. Last January 31, 2001, when she paid her of
30, P200,000.00
1994, Ubaldo that informed LT had Remigio paidthat to he it.was
On
real estate tax, Betty discovered that Lydia had October 20, 1985, upon
willing to sell the building for P5 Million. Thereceipt of the amount
sold her share to Emma on November 10, of P800,000.00
following
SUGGESTED day,
ANSWER: from hissent
Remigio US financier,
a letter to LT offered
Ubaldo
2000. The following day, Betty offered to BPI
to payis notto
offering thecorrect
buy theinbuilding
amount canceling
by tendering the contract
at P4.5 a cashier's
Million. with
redeem her share from Emma, but the latter LT.
check
UbaldoIn Lina
therefor
did Topacio but which
not reply. v One
Court BPI
weekofrefused
Appeals toand
later, Remigio accept.
BPI
replied that Betty's right to redeem has already LT then filed
Investment
received (G.
a lettera complaint
Rfrom
No. 102606,
Santosagainst JulyBPI
informing in him
3. 1993, the 211 RTC
SUGGESTED
prescribed.ANSWER:
Is Emma correct or not? Why? (5%) for
thatspecific
SCRA the291)buildingthe Supreme
performance
has beenand Court
sold toheld
depositedhim by that the
in court
Emma, the buyer, is not correct. Betty can still earnestthe amountmoney of is part
P800,000.00. of the purchase
Is BPI price
legally
Ubaldo for P5 Million, and that he will not renew
enforce her right of legal redemption as a co- and is proof of when
the its perfection
correct
Remigio's in canceling
lease expires.of
itcontract with theLT?
Remigio contract.
filed
owner. Article 1623 of the Civil Code gives a Secondly, notarial or judicial rescission under
an action against
ALTERNATIVE ANSWER: Ubaldo and Santos for
co-owner 30 days from written notice of the Art. 1592 andthe1991 of the Civil Code is
cancellation
is correctofin sale, and to contract
compel Ubaldo
sale by the vendor to exercise his right of legal BPI necessary (Taguba
canceling
v. de Leon,
its
132 SCRA
with LT
722.)
to execute ainstead
deed
do soofby ofabsolute sale inrefusal,
his favor,
redemption. In the present problem, the 30-day but building BPI must way
a right of ofjudicial
first rescission will your
based
under on
Articlehis right
1191
answer be the same? Explain. of first
Civil refusal.
Code. The a) Will
law the
requires
period for the exercise by Betty of her right of
action prosper? Explain. b) If Ubaldo had given
redemption had not even begun to run because a judicial action, and mere notice of rescission
Remigio anANSWER:
option if ittoispurchase theThe law also
no notice in writing of the sale appears to have is insufficient
SUGGESTED resisted.
Redemption;
been given to her by Lydia. Legal; No, the action
provides to compel
that slight breach Ubaldois not to aexecute
groundthe for
Formalities
Adela and Beth are co-owners of a parcel of deed
(2002) rescissionof absolute
(Song Fo sale & will
Co, not prosper. Phil Co.,
vs, Hawaiian
land. Beth sold her undivided share of the According 47 Phils. 821), to AngDelay Yu v. in Courtthe of Appeals (238
fulfillment of the
property to Xandro, who promptly notified obligation (Art. 1169, Civil Code) is isa not
SCRA 602) , the right of first refusal ground based to
Adela of the sale and furnished the latter a on contract
rescind, onlybut is if predicated
time is on of the theprovisions
essence.
copy of the deed of absolute sale. When of human relations
Otherwise, the court and, may therefore,
refuse the its violation
rescission
Xandro presented the deed for registration, the is Perfected
if predicated
there is a just onSale;
cause Acceptance
quasi-delict.
for fixing of aof
the Secondly, the
period.
register of deeds also notified Adela of the sale, rightEarnest
Bert offers
of firstMoney
to buy(2002)
refusal Simeons
implies that property
the offer under of thethe
following terms
enclosing a copy of the deed with the notice. person in whose favor that right was given and conditions: P1 million
However, Adela ignored the notices. A year must purchase conform price, 10%
with the option
samemoney, terms and the balance
been paid; payable
ALTERNATIVE
later, Xandro filed a petition for the partition of conditions in cash
ANSWER: upon the
as those given to the offeree. In clearance of this
the
c) foreclose the chattel mortgage on the No, the action
property of allwillillegal
not prosper.
occupants. The lessee's
The option
the property. Upon receipt of summons, Adela case, right
however, Remigio was offering only P4.5
of isfirst refusal does not go so farclears as to the
things sold, also
immediately in casethe
tendered of default
requisiteof amount money
two or for Million promptly
instead of P5paid Million.and Simeon
more installments,Xandro
with nocontends
further action give
property of illegal occupants in no time atthe
him the power to dictate on the lessor all.
the redemption. that Adela price at which theBertlatter should paymentsell
against the purchaser.
lost her right of redemption after the expiration However, when tenders of the
of 30 days from her receipt of the notice of the balance and ask Simeon for the deed
sale given by him.
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
his property. Upon the facts given, the lessor SUGGESTED ANSWER:
had sufficiently complied with his commitment 1) A can exercise his right of repurchase within
to give the lessee a right of first refusal when four (4) years from the date of the contract
he offered to sell the property to the lessee for (Art. 1606, Civil Code).
SUGGESTED ANSWER:
P5 Million, which was the same price he got in
2} I would advise B to file an action for
selling it to Santos. He certainly had the right to
consolidation of title and obtain a judicial order
treat the lessee's counter-offer of a lesser
of consolidation which must be recorded in the
amount as a rejection of his offer to sell at P5
Registry of Property (Art. 1607. Civil Code).
Million. Thus, he was free to find another buyer
upon receipt of such unacceptable counter- Transfer of Ownership; Non-Payment
SUGGESTED ANSWER:
offer (Art. 1319. NCC). of thesold
Pablo Price
his (1991)
car to Alfonso who issued a
Yes, the answer will be the same. The action
will not prosper because an option must be postdated check in full payment therefor.
supported by a consideration separate and Before the maturity of the check, Alfonso sold
distinct from the purchase price. In this case the car to Gregorio who later sold it to Gabriel.
there is no separate consideration. Therefore, When presented for payment, the check issued
the option may be withdrawn by Ubaldo at any by Alfonso was dishonored by the drawee bank
time. (Art. 1324, NCC) for the reason that he, Alfonso, had already
Right of First Refusal; Lessee; closed his account even before he issued his
Effect
In (1998)
a 20-year lease contract over a building, the check. Pablo sued to recover the car from
lessee is expressly granted a right of first Gabriel alleging that he (Pablo) had been
SUGGESTED ANSWER:
refusal should the lessor decide to sell both the unlawfully deprived of it by reason of Alfonso's
No. The suit will not prosper because Pablo was
land and building. However, the lessor sold the deception. Will the suit prosper?
not unlawfully deprived of the car although he
property to a third person who knew about the
was unlawfully deprived of the price. The
lease and in fact agreed to respect it.
perfection of the sale and the delivery of the
Consequently, the lessee brings an action
car was enough to allow Alfonso to have a right
against both the lessor-seller and the buyer (a)
of ownership over the car, which can be
to rescind the sale and (b) to compel specific
lawfully transferred to Gregorio. Art. 559
performance of his right of first refusal in the
applies only to a person who is in possession in
sense that the lessor should be ordered to
good faith of the property, and not to the
execute a deed of absolute sale in favor of the
owner thereof. Alfonso, in the problem, was the
lessee at the same price. The defendants Non-payment of theGabriel
price inacquired
a contract
SUGGESTED ANSWER: owner, and, hence, theoftitle
saleto
contend
The action thatfiled
the by
plaintiff
the can
lessee,neither seek
for both does not render ineffective the obligation to
the car.
rescission of the sale nor compel
rescission of the offending sale and specific specific deliver. The obligation to deliver a thing is
performance
performance of of the
a "mere" right
right of firstofrefusal
first refusal.
which different from the obligation to pay its price.
Decide the
Equatorial case.
was violated,Realty [5%]
should prosper. The ruling
Development, in vs.
Inc. EDCA Publishing Co. v. Santos (1990)
Mayfair Theater, Inc. (264 SCRA 483), a case Transfer of Ownership; Risk
with similar facts, sustains both rights of action of Loss
D sold a (1990)
second-hand car to E for P150,000.00
because the buyer in the subsequent sale knew The agreement between D and E was that half
the existence of right of first refusal, hence in of the purchase price, or P75,000.00, shall be
ANOTHER ANSWER:
bad paid upon delivery of the car to E and the
The faith.
action to rescind the sale and to compel balance of P75,000.00 shall be paid in five
the right to first refusal will not prosper. (Ang equal monthly installments of P15,000.00 each.
Yu Asuncion vs. CA, 238 SCRA 602). The Court The car was delivered to E, and E paid the
ruled in a unanimous en banc decision that the amount of P75.000.00 to D. Less than one
right of first refusal is not founded upon month thereafter, the car was stolen from E's
contract but on a quasi-delictual relationship garage with no fault on E's part and was never
covered by the principles of human relations SUGGESTED ANSWER:
recovered. Is E legally bound to pay the said
and unjust enrichment (Art. 19, et seq. Civil Yes, E is legally bound to pay the balance of
unpaid balance of P75.000.00? Explain your
Code). Hence the only action that will prosper P75,000.00. The ownership of the car sold was
answer.
according to the Supreme Court is an "action acquired by E from the moment it was delivered
Right
for damages in of a proper forum for the to him. Having acquired ownership, E bears the
purpose." 2, (1993)
Repurchase
On January 1980, A and B entered into a risk of the loss of the thing under the doctrine
contract whereby A sold to B a parcel of land of res perit domino. [Articles 1496. 1497, Civil
for and in consideration of P10.000.00. A Code).
reserving to himself the right to repurchase the
same. Because they were friends, no period LEASE
was agreed upon for the repurchase of the
property. 1) Until when must A exercise his Extinguishment; Total Distruction;
right of repurchase? 2) If A fails to redeem the Leased
A Property
is the owner of a (1993)
lot on which he constructed
property within the allowable period, what a building in the total cost of P10,000,000.00.
would you advise B to do for his better Of that amount B
protection?
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
contributed P5,000,000.00 provided that the building phenomenon are still unpredictable despite the
whole
as a would be leased to him (B) for a period of science, advancesthe phenomenon
in is considered unforeseen.
ten years from January 1. 1985 to December
31, 1995 at a rental of P100,000.00 a year. To Leasee & Lessor; Rights and
such condition, A agreed. On December 20, A Obligations (1990)blocks from the center of
vacant lot several
1990, the building was totally burned. Soon the town was leased by its owner to a young
thereafter, A's workers cleared the debris and businessman B for a term of fifteen (15) years
started construction of a new building. B then renewal upon agreement of the parties. After
served notice upon A that he would occupy the taking possession of the lot, the lessee built
building being constructed upon completion, for thereon a building of mixed materials and a
the unexpired portion of the lease term, store. As the years passed, he expanded his
explaining that he had spent partly for the business, earning more profits. By the tenth
SUGGESTED ANSWER:
construction
Yes. A was correct of the inbuilding
rejectingthatthe was burned.ofA (10th) year of his possession, he was able to
demand
rejected build a three (3)-story building worth at least
B. As a result of the total destruction right
B's demand. Did A has a of thein
rejecting B's demand? P300,000.00. Before the end of the term of the
building by fortuitous event, the lease was
lease, B negotiated with the landowner for its
extinguished. (Art. 1655, Civil Code.)
Implied New renewal, but despite their attempts to do so,
Lease what
Under (1999) circumstances would an implied they could not agree on the new conditions for
new lease or a tacita reconduccion arise? the renewal. Upon the expiration of the term of
(2%)
SUGGESTED ANSWER: the lease, the landowner asked B to vacate the
An implied new lease or tacita reconduccion premises and remove his building and other
arises if at the end of the contract the lessee improvements. B refused unless he was
should continue enjoying the thing leased for reimbursed for necessary and useful expenses.
15 days with the acquiescence of the lessor, B claimed ANSWER:
SUGGESTED that he was a possessor and builder
and unless a notice to the contrary by either in good
a) B hasfaith, withto
the right right of retention.
remove This and
the building issue
parties has previously been given (Art. 1670). is nowimprovements
other before the court for resolution
unless the landownerin a
In short, in order that there may be tacita pending
decides to litigation.
retain thea) building
What areatthe therights
time ofof B?
the
reconduccion there must be expiration of the b) What are the rights of the landowner?
termination of the lease and pay the lessee
contract; there must be continuation of one-half of the value of the improvements at
possession for 15 days or more; and there that time. The lessee may remove the building
Lease
must be no ofpriorRural
demand to vacate. even though the principal thing may suffer
Lands
In 1995,(2000)
Mark leased the rice land of Narding in damage but B should not cause any more
Nueva Ecija for an annual rental of P1,000.00 impairment upon the property leased than is
per hectare. In 1998, due to the El Nino necessary. The claim of B that he was a
phenomenon, the rice harvest fell to only 40% possessor and builder in good faith with the
of the average harvest for the previous years. SUGGESTED ANSWER:
right oflandowner/lessor
retention is not tenable. B is to
not a
Mark asked Narding for a reduction of the b) The may refuse
builder in good faith because
reimburse 1/2 of the value of the as lessee he does
rental to P500.00 per hectare for that year but not claim ownership over the property leased.
SUGGESTED
the latter ANSWER:
refused. Is Mark legally entitled to improvements and require the lessee to
No, Mark is not entitled to a reduction. Under remove the improvements. [Article 1678, Civil
such reduction? (2%)
Article 1680 of the Civil Code, the lessee of a Leasee; Code), Death Thereof;
rural land is entitled to a reduction of the rent Stating Effectsbriefly
(1997) the thesis to support your
only in case of loss of more than 1/2 of the answer to each of the following cases, will the
fruits through extraordinary and unforeseen death - a) of the lessee extinguish the lease
fortuitous events. While the drought brought SUGGESTED agreement? ANSWER:
about by the "El Nino" phenomenon may be No. The death of the lessee will not extinguish
ALTERNATIVE
classified ANSWER:
as extraordinary, it is not considered the lease agreement, since lease is not
Yes, Mark is entitled to a reduction of the rent. His loss was more
as unforeseen.
than 1/2 of the fruits and the loss was due to an extraordinary and
personal in character and the right is
unforeseen fortuitous event. The "El Nino" phenomenon is transmissible to the heirs. (Heirs of
extraordinary because it is uncommon; it does not occur with Dimaculangan vs. IAC, 170 SCRA 393).
regularity. And neither could the parties have foreseen its Option to Buy;
occurrence. The event should be foreseeable by the parties so that Expired
On (2001)
January 1, 1980, Nestor leased the fishpond
the lessee can change the time for his planting, or refrain from
planting, or take steps to avoid the loss. To be foreseeable, the time
of Mario for a period of three years at a
and the place of the occurrence, as well as the magnitude of the monthly rental of P1,000.00, with an option to
adverse effects of the fortuitous event must be capable of being purchase the same during the period of the
predicted. Since the exact place, the exact time, and the exact lease for the price of P500,000.00. After the
magnitude of the adverse effects of the "El Nino"
expiration of the three-year period, Mario
allowed Nestor to remain in the leased
premises at the same rental rate. On June 15,
1983, Nestor tendered the amount of
P500,000.00 to Mario and demanded that the
latter execute a deed of absolute sale of the
fishpond in his favor. Mario refused, on the
ground that Nestor no longer had an option to
buy the fishpond.
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
Nestor filed an action for specific performance. sublessee
Will can invoke no right superior to that of his
action
the prosper or not? Why? (5%) sublessor, the moment the sublessor is duly ousted from the
SUGGESTED ANSWER: premises, the sublessee has no leg to stand on. The sublessee's
No, the action will not prosper. The implied right, if any, is to demand reparation for damages from his
sublessor, should the latter be at fault.
renewal of the lease on a month-to-month
basis did not have the effect of extending the (Heirs ofSevilla v. Court of Appeals G.R. No.
life of the option to purchase which expired at 49823, February 26, 1992).
the end of the original lease period. The lessor
is correct in refusing to sell on the ground that
the option had expired. Sublease; Delay in Payment of
Sublease vs. Assignment of Lease; Rentals
In January(1994)
1993, Four-Gives Corporation leased
Rescission of Contract (2005) the entire twelve floors of the GQS Towers
Under a written contract dated December 1, Complex, for a period of ten years at a monthly
1989, Victor leased his land to Joel for a period rental of P3,000,000.00. There is a provision in
of five (5) years at a monthly rental of the contract that the monthly rentals should be
Pl,000.00, to be increased to Pl,200.00 and paid within the first five days of the month. For
Pl,500.00 on the third and fifth year, the month of March, May, June, October and
respectively. On January 1, 1991, Joel December 1993, the rentals were not paid on
subleased the land to Conrad for a period of time with some rentals being delayed up to ten
On
twoDecember 31,
(2) years at 1992, Joel
a monthly assigned
rental the lease
of Pl,500.00. days. The delay was due to the heavy paper
to his compadre, Ernie, who acted on the belief Four-Gives
work involvedCorporation also the
in processing subleased
checks.five of
that Joel was the rightful owner and possessor the twelve floors to wholly-owned subsidiaries.
of the said lot. Joel has been faithfully paying The lease contract expressly prohibits the
the stipulated rentals to Victor. When Victor assignment of the lease contract or any portion
learned on May 18, 1992 about the sublease thereof. The rental value of the building has
and assignment, he sued Joel, Conrad and increased by 50% since its lease to Four-Gives
a)
ErnieWill
for the action
rescission of prosper? If so,
the contract against
of lease and Corporation. 1) Can the building owner eject
whom? Explain. (2%)
for damages. Four-Gives Corporation on grounds of the
SUGGESTED ANSWER: repeated delays in the payment of the rent? 2}
Yes, the action of for rescission of the contract of SUGGESTED ANSWERS:
Can the building owner ask for the cancellation
lease and for damages will prosper. Under Article 1) a) The "repeated delays" in the payment of
of the contract for violation of the provision
1659 of the Civil Code, "if the lessor or the lessee rentals would, at best, be a slight or casual
against assignment?
should not comply with the obligations set forth in breach which does not furnish a ground for
Articles 1654 and 1657, the aggrieved party may ask ejectment especially because the delays were
for rescission of the contract and indemnification for only due to heavy paper work. Note that there
damages, or only the latter, allowing the contract to was not even a demand for payment obviously
remain in force." Article 1649 of the same Code because the delay lasted for only a few days
provides that "the lessee cannot assign the lease (10 days being the longest), at the end of
without the consent of the lessor, unless there is a which time payments were presumably made
stipulation to the contrary." Consent is necessary and were accepted. There was, therefore, no
(Bangayan v. Court of
because assignment Appeals,
would cause G.R. No. 123581,
novation by the default. Note also that there was no demand
August 29, of
substitution one ofHowever,
1997) the rule is different
the parties. made upon the lessee to vacate the premises
in the case of subleasing. When there is no for non-payment of the monthly rent. There is,
express prohibition in the Contract of Lease, the b) The building owner cannot eject Four-Gives
therefore, no cause of action for ejectment
lessee may sublet the thing leased. (Art. 1650, Corporation on the ground of repeated delays in
arising from the "repeated delays".
Civil Code) the payment of rentals. The delay in the
In the given case, when Joel assigned the lease payment of the rentals is minimal and cannot
to Ernie, the same was done without the be made the basis of an ejectment suit. The
consent of Victor. The assignment is void. delay was due to the heavy paperwork involved
However, there is no indication that in the in processing the checks. It would be otherwise
written contract of lease between Victor and if the lease contract stated that in the payment
Joel, that subleasing the premises is prohibited. of rentals within the first five days of the month,
Hence, the sublease of Joel with Conrad is valid. time is of the essence or that the lessee will be
In view of the foregoing, Victor can file the case in delay if he falls to pay within the agreed
of rescission and damages only against Joel and period without need of demand. In this case he
b) In but
Ernie caseheof rescission,
cannot include discuss
Conrad. the rights can judicially eject the tenant on the ground of
and obligations of the parties. (2%) lack of payment of the price stipulated after a
SUGGESTED ANSWER: c) No. Resolution of a contract will not be
Rescission of the lease necessarily requires the return of the thing demand to vacate, (Article 1673(2), New Civil
permitted for a slight or casual breach, but only
to the lessor. Hence, the judgment granting rescission of the Code),
contract should also order the lessee to vacate and return the for such substantial and fundamental breach as
leased premises to the lessor. However, since the would defeat the very object of the parties in
making the agreement.(Zepeda v. CA, 216
SCRA 293]. The delay of ten (10)) days is not
such a substantial
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
and fundamental breach to warrant the resolution A, of
and that he has not been remiss in the payment of
contract
the of lease specially so when the delay Will
rent.the action
was due to the heavy paperwork in processing prosper? (3%)
SUGGESTED ANSWER:
the checks. Yes, the action will prosper. Under Article 1651
SUGGESTED ANSWER: of the Civil Code, the sublessee is bound to the
2) a) No. Sublease is different from assignment lessor for all acts which refer to the use and
of lease. Sublease, not being prohibited by the preservation of the thing leased in the manner
contract of lease is therefore allowed and stipulated between the lessor and the lessee.
cannot be invoked as a ground to cancel the Sublease; Validity; Assignment of
lease, Sublease
A leased a(1990)
parcel of land to B for a period of
b) No, the lessor cannot have the lease two years. The lease contract did not contain
cancelled for alleged violation of the provision any express prohibition against the assignment
against assignment. The lessee did not assign of the leasehold or the subleasing of the leased
the lease, or any portion thereof, to the premises. During the third year of the lease, B
subsidiaries. It merely subleased some floors to subleased the land to C. In turn, C, without A's
its subsidiaries. Since the problem does not consent, assigned the sublease to D. A then
state that the contract of lease contains a filed an action for the rescission of the contract
prohibition against sublease, the sublease is of lease on the ground that B has violated the
lawful, the rule being that in the absence of an terms and conditions of the lease agreement. If
express prohibition a lessee may sublet the (a)
youB's sublease
were to how would you decide the
the judge,
thing leased, in whole or in part, without (b)
C? C's
and assignment
case, particularly with of the
respect to the validity of:
Sublease; Sublessee;
prejudice to his/its responsibility to the lessor sublease to D?
Liability
May
for the (1999)
a lessee sublease
performance of the
the property
contract. leased
without the consent of the lessor, and what are
the respective liabilities of the lessee and sub-
lessee to the lessor in case of such sublease?
SUGGESTED
(3%) ANSWER:
Yes, provided that there is no express
prohibition against subleasing. Under the law,
when in the contract of lease of things there is
no express prohibition, the lessee may sublet
the thing leased without prejudice to his
responsibility for the performance of the
contract toward the lessor. [Art, 1650) In case
there is a sublease of the premises being
leased, the sublessee is bound to the lessor for
all the acts which refer to the use and
preservation of the thing leased in the manner
stipulated between the lessor and the lessee.
(Art. 1651} The sublessee is subsidiarily liable
to the lessor for any rent due from the lessee.
However, the sublessee shall not be responsible
beyond the amount of the rent due from him.
(Art. 1652) As to the lessee, the latter shall still
be responsible to the lessor for the rents; bring
to the knowledge of the lessor every usurpation
or untoward act which any third person may
have committed or may be openly preparing to
carry out upon the thing leased; advise the
owner the need for all repairs; to return the
thing leased upon the termination of the lease
just as he received it, save what has been lost
or impaired by the lapse of time or by ordinary
wear and tear
Sublease; or from an inevitable cause;
Sublessee;
responsible
Liability
A for
(2000)
leased his the to
house deterioration or loss of
B with a condition the
that
thing
the leased,
leased unless he
premises proves
shall thatfor
be used it took place
without his purposes
residential fault. only. B subleased the
house to C who used it as a warehouse for
fabrics. Upon learning this, A demanded that C
stop using the house as a warehouse, but C
ignored the demand, A then filed an action for
ejectment against C, who raised the defense
that there is no privity of contract between him
and
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
failure of the airline to take extra precautions despite negate sale because they indicate that ownership over
police
a warning that an attempt to hijack the units
the was never intended to transfer to the distributor.
plane would be made, was negligence on the
part of the airline. Being negligent, it is liable Agency; coupled with an
for the death of the passenger. The defense of interestsold
Richard (2001)
a large parcel of land in Cebu to
force majeure is not tenable since the shooting Leo for P100 million payable in annual
incident would not have happened had the installments over a period of ten years, but
airline taken steps that could have prevented title will remain with Richard until the purchase
ALTERNATIVE ANSWER: price is fully paid. To enable Leo to pay the
the hijacker from boarding the plane.
Under Article 1763 of the Civil Code, the price, Richard gave him a power-of-attorney
common carrier is not required to observe authorizing him to subdivide the land, sell the
extraordinary diligence in preventing injury to individual lots, and deliver the proceeds to
its passengers on account of the willful acts or Richard, to be applied to the purchase price.
negligence of other passengers or of strangers. Five years later, Richard revoked the power of
The common carrier, in that case, is required to SUGGESTED ANSWER:
attorney and took over the sale of the
exercise only the diligence of a good father of a The revocation is not valid. The power of
subdivision lots himself. Is the revocation valid
family; hence, the failure of the airline to take attorney given to the buyer is irrevocable
or not? Why? (5%)
EXTRA precautions in frisking the passengers because it is coupled with an interest: the
and by leaving that matter to the security agency is the means of fulfilling the obligation
personnel of the airport, does not constitute a of the buyer to pay the price of the land
breach of that duty so as to make the airline (Article 1927, CC). In other words, a bilateral
SUGGESTED ANSWER: to buy and sell the land) is
liable. Besides, the use of irresistible force by contract (a) B's
(contract
sublease
the hijackers was farce majeure that could not dependent
Agency; on theto
Guarantee C is valid.
agency. Although the
original
Commission
As an agent, periodAL of given
(2004)
was two years a guarantee for the lease
of
AGENCY
have been prevented even by the observance contract has expired, the lease continued with
extraordinary diligence.
commission, in addition to his regular
Agency the acquiescence
commission, after of he thesoldlessor
20 units duringof the third
(2003)
Jo-Ann asked her close friend, Aissa, to buy year. Hence, to
refrigerators there has beenHT
a customer, anHotel.
impliedThe renewal
some groceries for her in the supermarket. of the contract
customer, however, of lease.
failedUnderto payArt. for1650 of the
the units
Was there a nominate contract entered into Civil
sold. Code, the lessee
ALs principal, DRBI, may sublet from
demanded the thing
AL
between Jo-Ann and Aissa? In the affirmative, leased,
payment infor
whole or in part, when
the customers the contract
accountability. ALof
SUGGESTED
what was it? ANSWER:
Explain. 5% lease does not contain any express prohibition.
objected, on the ground that his job was only
Yes, there was a nominate contract. On the [Articles
to sell and1650, not to 1670collectCivil Code).for units
payment A's action
assumption that Aissa accepted the request of SUGGESTED ANSWER:
for rescission should not prosper on this
bought
(b) by the customer.
C's assignment Is ALs objection
her close friend Jo-Ann to but some groceries SUGGESTED
ground. ANSWER: of the sublease to D is not
valid?
valid. Can DRBI
Under Art.collect
1649, from
of the himCivil
or not?Code,
for her in the supermarket, what they entered No, AL's objection is not valid and DRBI can the
Reason.
lessee (5%) assign the lease without the
cannot
into was a nominate contract of Agency. collect from AL. Since AL accepted a guarantee
Article 1868 of the New Civil Code provides consent
commission, of in the lessor,
addition to hisunless
regular there is a
that by the contract of agency a person binds stipulation to the contrary.
commission, he agreed to bear the risk There is no of such
himself to render some service or to do stipulation
collection in
and the
to contract.
pay the If
principal the law
the prohibits
ALTERNATIVE ANSWER:
something in representation or on behalf of assignment
proceeds of the
of the sale lease
on the without
same the terms consent
agreed of
Yes, they entered into a nominate contract of the
upon lessor,
with all
the the more
purchaser would
(Article the
1907, assignment
Civil
another, with the consent or authority of the
lease to service in the absence of a relation of Agency;
of a sublease
Code) Real Estate be prohibited without such
latter.
principal and agent between them (Article Mortgage
CX executed
consent. This (2004)
aisspecial
a violation powerofofthe attorney
contract and
1644, New Civil Code).
Agency vs. Sale COMMON CARRIERS
authorizing
is a valid ground for rescission by A. any bank
DY to secure a
and to mortgage his property covered by the
loan from
(2000)
A foreign manufacturer of computers and a owners certificate of title. In securing a loan
Philippine distributor entered into a contract Extraordinary
from MBank, DY did not specify that he was
whereby the distributor agreed to order 1,000 Despite Diligence
acting foraCX (2000)
warning from the with
in the transaction policesaidthatbank.an
units of the manufacturer's computers every attempt to hijack a PAL
Is CX liable for the bank loan? Why or why plane will be made in
month and to resell them in the Philippines at the following
SUGGESTED ANSWER: week,
not? Justify your answer. (5%) the airline did not take
the manufacturer's suggested prices plus 10%. CX
extra is liable for the banksuch
precautions, loan becauseas frisking he of
All unsold units at the end of the year shall be authorized the mortgage
passengers, for fear of being accused on his property to of
bought back by the manufacturer at the same secure
violating thehuman
loan contracted
rights. Two by DY. If DYlater,
days later an
price they were ordered. The manufacturer defaults
armed and
hijackerfails to
did pay the
attempt loan,
to CX is
hijack liable to
a PAL
shall hold the distributor free and harmless pay. flightHowever,
to Cebu. his liability
Although heiswas limited to theby the
subdued
SUGGESTED ANSWER: extent of the value of
from anyisclaim
The contract for defects
one of agency, in the
not sale. The notionunits.
of sale isIs the
other passengers, hethe said property.
managed to fire a shot
agreement one for sale or agency? (5%)
negated by the following indicia: (1) the price is fixed by the ALTERNATIVE
which hit and ANSWER:
killed a CX
femaleis not personally
passenger. The
SUGGESTED ANSWER:
manufacturer with the 10% mark-up constituting the commission; liable
victim's to the banksued
parents loan because
the airline it was
for breach of
(2) the manufacturer reacquires the unsold units at exactly the The airline is liable. In case of death of a
contracted
contract, and by DY theinairline
his personal
raised capacity.
the defense Onlyof
same price; and (3) warranty for the units was borne by the passenger, common carriers are presumed to
the
force property
majeure. of CX
Is theis liable.
airline Hence,
liable or while
not? CX
(2%)
manufacturer. The foregoing indicia have been at fault or to have acted negligently,
has authorized the mortgage on his property to
unless they prove that they observed
secure the loan of DY, the bank cannot sue CX
extraordinary diligence (Article 1756, Civil
to collect the loan in case DY defaults thereon.
Code). The
The bank can only foreclose the property of CX.
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
And if the proceeds of the foreclosure are All notthose contracts were executed by B while A was
pay the loan
sufficient to in full, the bank cannot run after
CX for the deficiency.
ALTERNATIVE ANSWER:
While as a general rule the principal is not
liable for the contract entered into by his agent
in case the agent acted in his own name
without disclosing his principal, such rule does
not apply if the contract involves a thing
belonging to the principal. In such case, the
principal is liable under Article 1883 of the Civil
ALTERNATIVE
Code. The ANSWER:
contract is deemed made on his
CX would not be liable for the bank loan. CX's
behalf (Sy-juco v. Sy-juco 40 Phil. 634 [1920]).
property would also not be liable on the
mortgage. Since DY did not specify that he was
acting for CX in the transaction with the bank,
DY in effect acted in his own name. In the case
of Rural Bank of Bombon v. CA, 212 SCRA,
(1992), the Supreme Court, under the same
facts, ruled that "in order to bind the principal
by a mortgage on real property executed by an
agent, it must upon its face purport to be
made, signed and sealed in the name of the
principal, otherwise, it will bind the agent only.
It is not enough merely that the agent was in
fact authorized to make the mortgage, if he,
has not acted in the name of the principal.
Neither is it ordinarily sufficient that in the
mortgage the agent describes himself as
acting by virtue of a power of attorney, if in
fact the agent has
Appointment of acted
Sub-in his own name and
has
Agent
X set his own
(1999)
appoints hand and seal
Y as his agent to his
to sell theproducts
mortgage.in
There
Cebu City. Can Y appoint a sub-agent a
is no principle of law by which person
and if he
can
does,becomewhat liable
are onthe
a real estate mortgage
effects of such
which
SUGGESTEDshe never
ANSWER:
appointment? (5%) executed in person or by
attorney
Yes, the inagent
fact". may appoint a substitute or
sub-agent if the principal has not prohibited
him from doing so, but he shall be responsible
(1) when
for the he of
acts wasthenot given the power to
substitute:
(2) whenone;
appoint he was given such power, but without
designating the person, and the person
appointed was notoriously incompetent or
insolvent.
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
ratify the sale contract, then Jesus shall be liable allowing the other general partner to bind the
1898.
(ArticleCivil Code). confined
will violatedue
corporation theto corporation
illness in law the principle
Makati Medical
that
Center.
only theRule
board onofthedirectors
validitymay andbindbinding
the effect
Termination; Effect of Death of each of the above contracts upon A the
corporation.
of Agentbriefly
Stating (1997)the thesis to support your SUGGESTED ANSWER:your answers,
principal. Explain
answer to each of the following cases, will the TheNo,agency
3) for the couched same reasons in general given interms the
death - (c) of an agent end an agency? comprised
Answer to Number
only acts 2 above.
of administration (Art.
SUGGESTED ANSWER: 1877, Civil Code). The lease contract on the
Yes. The death of an agent extinguishes the Conveyance
Manila parcel isofnot a valid,
Partners Share
not enforceable and
agency, by express provision of par. 3, Art Dissolution
Dielle,
not bindingKarloupon (1998)
and Una
A. ForareB to general
lease the partners
property in a
1919 of the Civil Code. merchandising
to C, for morefirm. thanHavingone (1) contributed
year, A must equal
amounts to the capital, theyofalso agree on
PARTNERSHIP provide B with
The
equal
1878. lease
Civil of
a special
the Caloocan
distribution
Code).
power
of whatever
attorney
City property
(Art.
to D isis
net profit
valid
realized andper binding
fiscal upon period. A. Since
After two the lease
years isof
Composition of Partnerships; Spouses; without operation, however, Una conveys her to
a fixed term, it is understood wholebe
Corporations (1994) from month
interest in theto partnership
month, since the rental
to Justine, without is
1) Can a husband and wife form a limited 1.
payable
the Is
knowledge the partnership
monthly and(Art. 1687, of
consent Civil Code).
Dielle and Karlo.
partnership to engage in real estate business, The
2. Whatsaleare
dissolved? of12%]the rights
Quezon of City
Justine, parcel to Eshould
if any, is not
with the wife being a limited partner? valid
she and
desire not
to binding
participate upon
in the A. B needed
management ofa
2) Can two corporations organize a general special
the power of
partnership and attorney to validly of
in the distribution sell
a netthe
partnership under the Civil Code of the land (Arts.
profit 1877 andwhich
of P360.000.00 1878, was Civil Code).
realized The
after
Philippines? 3) Can a corporation and an SUGGESTED
her of theANSWER:
salepurchase land at a very
of Una's good[3%]
interest? price does not
individual form a general partnership? 1. No,the
cure a conveyance
defect of the by acontract
partner arising
of his wholefrom
SUGGESTED ANSWER: interest
Powers in
lack of authority ofa partnership
the does not of itself
1) a) Yes. The Civil Code prohibits a husband dissolve
AgentRealty
Prime the partnership
(1994) Corporation in the absence
appointed Nestor of thean
and wife from constituting a universal agreement.
exclusive agent (Art. in 1813. Civil Code)
the sale of lots of its newly
partnership. Since a limited partnership is not SUGGESTED ANSWER:
developed subdivision. Prime Realty told
a universal partnership, a husband and wife 2. Justine cannot interfere or participate in the
Nestor that he could not collect or receive
may validly form one. b) Yes. While spouses management or administration of the
payments from the buyers. Nestor was able to
cannot enter into a universal partnership, they partnership business or affairs. She may,
sell ten lots to Jesus and to collect the down
can enter into a limited partnership or be however, receive the net profits to which Una
payments for said lots. He did not turn over
members thereof (CIR u. Suter, etal. 27 SCRA would
SUGGESTED have otherwise been entitled. In this
ANSWER:
the collections to Prime Realty. Who shall bear
SUGGESTED ANSWER:
152). case,
a) The P120.000
general (Art.
rule 1813,
is that Civil Code) dealing
a person
2) a) No, A corporation is managed by its the loss
Dissolution for Nestor's defalcation,
of Prime Realty
with an agent must inquire into the authority
or Jesus?
Partnership
Pauline, Patricia (1995)
board of directors. If the corporation were to of that agent. Inand
the Priscilla
present formed case, ifaJesus
business did
become a partner, co-partners would have the partnership for the purpose
not inquire into that authority, he is liable for of engaging in
power to make the corporation party to neon advertising for a term
the loss due to Nestor's defalcation unless of five (5) years.
transactions in an irregular manner since the Pauline
Article 1900, subsequently
Civil Code assigned
governs, in to which
Philipcase her
partners are not agents subject to the control interest in the partnership.
the developer corporation bears the loss. When Patricia and
of the Board of Directors. But a corporation Art. 1900 learned
Priscilla Civil Code of provides: "So far as third
the assignment, they
may enter into a joint venture with another persons to
decided aredissolve
concerned, an act is deemed
the partnership before the to
corporation as long as the nature of the have been performed
expiration of its term within asthethey scopehad of the an
venture is in line with the business authorized agent's authority,
unproductive business if such act is within
relationship with Philip the
b)
by As
its acharter.
general(Tuason
rule a corporation
& Co., Inc. may not form
v. Bolano, 95 terms of the
in the past. Onpower
the other of attorney,
hand, unaware as written,
of the
General
a general Agency vs. Special
Phil. 106). partnership with another corporation even ifof the
move agent
Patricia and has in fact
Priscilla butexceeded
sensing their the
Agency
A as (1992)
principal
or an individual because appointed B as hismay
a corporation agent
not 1. Is theofdissolution
limits
negative todone
his authority
reaction by according
Patricia of
his acquisition and to an
Pauline's
granting
be bound byhim persons general
who are andneitherunlimited Priscilla
directors interest,
However,
understanding if without
Jesus
Philip the consent
made
between due
simultaneously the inquiry ofpetitioned
Pauline
principalandand heorwas
the
for
management
nor officers of over A's properties, stating that
the corporation. not Philip
agent.
the informed valid? by Explain.
the
dissolution of the partnership. principal Prime Realty of
However,
A withholds a corporation
no power from may Bform and a that
general
the 2.
theDoes Philip
limits of have
Nestor's any authority.
right to petition Primefor the
Realty
partnership
agent may with execute another
such corporation
acts as heormay an shalldissolution
bear the loss. of the partnership before the
Accordingly,
individual B leased
provided
consider appropriate. A's parcel
the following of land are
conditions in b) expiration
Considering of its that Prime Realty
specified Corporation
term? Explain.
1) to CThe
Manila
met: Articles
for four of Incorporation
(4) years at P60,000.00 of per
the only "told" Nestor that he could not receive or
year,corporation
payable annually expressly
in advance. allows the collect payments, it appears that the limitation
corporation to enter into partnerships; does not appear in his written authority or
B leased
2) another
The parcel
Articles of of land of must
Partnership A in power of attorney. In this case, insofar as Jesus,
Caloocan
provideCity thattoallD partners
without will
a fixed termthe
manage at who is a third person is concerned, Nestor's
P3,000.00 per month
partnership, and payable
they shall monthly.
be jointly and acts of collecting payments is deemed to have
3)
severally In liable;
case of anda foreign corporation, it been performed within the scope of his
B sold
must to Ebea third parceltoofdo
licensed landbusiness
belonging in tothe
A authority {Article 1900. Civil Code). Hence, the
located in Quezon City for three (3) times the
Philippines. However,
principal isif liable.
Jesus was aware of the limitation of
c) No.that
price A corporation
was listed may in thenot be a general
inventory by A to B. Nestor's power as an agent, and Prime Realty
partner because the principle of mutual agency Corporation does not
in general partnership
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
another the remaining partners may not dissolve the
A should be hired as Secretary. The decision for the
partnership, the dissolution by Patricia and of A prevails because it is an act of
hiring
Priscilla without the consent of Pauline or administration which can be performed by the
Philip is not valid. duly appointed managing partners, W and X.
SUGGESTED ANSWER:
2. No, Philip has no right to petition for B cannot be hired, because in case of a tie in
dissolution because he does not have the the decision of the managing partners, the
standing of a partner (Art. 1813 NCC). deadlock must be decided by the partners
owning the controlling interest. In this case, the
Dissolution of Partnership;
opposition of X and Y prevails because Y owns
Termination
A, B and C formed(1993)
a partnership for the
the controlling Interest (Art. 1801, Civil Code).
purpose of contracting with the Government in Obligations of a Partner;
the construction of one of its bridges. On June Industrial
Joe and RudyPartner
formed(2001)
a partnership to operate
30, 1992, after completion of the project, the a car repair shop in Quezon City. Joe provided
bridge was turned over by the partners to the the capital while Rudy contributed his labor
Government. On August 30, 1992, D, a supplier and industry. On one side of their shop, Joe
of materials used in the project sued A for opened and operated a coffee shop, while on
collection of the indebtedness to him. A moved the other side, Rudy put up a car accessories
to dismiss the complaint against him on the SUGGESTED
store. MayANSWER:
they engage in such separate
ground that it was the ABC partnership that is Joe, the capitalist
businesses? Why?partner,
[5%] may engage in the
liable for the debt. D replied that ABC restaurant business because it is not the same
partnership was dissolved upon completion of kind of business the partnership is engaged in.
the project for which purpose the partnership On the other hand, Rudy may not engage in
SUGGESTED ANSWER:
was formed. Will you any other business unless their partnership
As Judge, I would not dismiss
dismiss the
the complaint
complaint
against A If you were the Judge? expressly permits him to do so because as an
against A. because A is still liable as a general
industrial partner he has to devote his full time
partner for his pro rata share of 1/3 (Art. 1816,
to the business of the partnership [Art. 1789,
C. C.J. Dissolution of a partnership caused by
the termination of the particular undertaking Commodatum & Mutuum
CC).
specified in the agreement does not extinguish
obligations, which must be liquidated during Commodatum
the "winding up" of the partnership affairs (1993)
A, upon request, loaned his passenger Jeepney
(Articles 1829 and 1830. par. 1-a, Civil Code). to B to enable B to bring his sick wife from
Effect of Death of
Paniqui. Tarlac to the Philippine General
Partnerbriefly
Stating (1997)
the thesis to support your
Hospital in Manila for treatment. On the way
answer to each of the following cases, will the
back to Paniqui, after leaving his wife at the
death - of a partner terminate the partnership?
SUGGESTED ANSWER: hospital, people stopped the passenger
Yes. The death of a partner will terminate the Jeepney. B stopped for them and allowed them
partnership, by express provision of par. 5, Art. to ride on board, accepting payment from them
1830 of the Civil Code. just as in the case of ordinary passenger
Obligations of a Jeepneys plying their route. As B was crossing
Partner
W, (1992)
X, Y and Z organized a general partnership Bamban, there was an onrush of Lahar from Mt
A and B
Pinatubo, with
the respect
Jeep to the
that was passenger
loaned to him Jeepney
was
with W and X as industrial partners and Y and Z
loaned
that was by A to B to transport the
wrecked. 1) What do you call the contractlatter's sick wife
that
as capitalist partners. Y contributed P50,000.00
Manila?
to 2) Is B obliged to pay A for the use of
and Z contributed P20,000.00 to the common was entered into by
the passenger
fund. By a unanimous vote of the partners, W jeepney? 3) Is B liable to A for the
and X were appointed managing partners, loss of the Jeepney?
without any specification of their respective SUGGESTED ANSWER:
A applied
powers andforduties.
the position of Secretary and B 1) The contract is called "commodatum". [Art.
applied for the position of Accountant of the SUGGESTED
1933. CivilANSWER:
Code). COMMODATUM is a contract
partnership. 1, Under one
by which Art.of1830 (1) (c)
the parties of the
(bailor) NCC, to
delivers the
The hiring of A was decided upon by W and X, dissolution by Patricia and Priscilla is valid and
another (bailee) something not consumable so
but was opposed by Y and Z. did
thatnot
theviolate the contract
latter may use it forof partnership
a certain time even
and
though Pauline and Philip did not consent
return it.
The hiring of B was decided upon by W and Z, thereto.
2) No, B is The consent
not obliged to payof A Pauline
for the useis ofnot
but was opposed by X and Y. necessary because she had already
the passenger Jeepney because commodatum assigned
her interest to
is essentially Philip. The
gratuitous. (Art.consent of Philip
1933. Civil Code]is
Who of the applicants should be hired by the not also necessary because the assignment to
partnership? Explain and give your reasons. ALTERNATIVE ANSWER:
him
3) of because
Yes, Pauline'sB interest
devoted did not make him a
(1) the
(c) thing to a that
SUGGESTED ANSWER: Interpreting Art. 1830 to mean if
partner, under
purpose Art,from
different 1813 of the
that for NCC. it has
which
one of the partners had assigned his interest
been
on theloaned (Art. 1942, par. 2, Civil Code)
partnership to
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
ALTERNATIVE ANSWER: Tito must also pay for the ordinary expenses
No, because an obligation which consists in for the use and preservation of the thing
the delivery of a determinate thing shall be loaned. He must pay for the gasoline, oil,
extinguished if it should be lost or destroyed greasing and spraying. He cannot ask for
without the fault of the debtor, and before he reimbursement because he has the obligation
has incurred in delay. (Art. 1262. Civil Code) to return the identical thing to the bailor. Under
Commodatum Article 1941 of the Civil Code, the bailee is
(2005)
Before he left for Riyadh to work as a obliged to pay for the ordinary expenses for
mechanic, Pedro left his Adventure van with c) Does
the use Pedro
and have the
preservation of right to retrieve
the thing loaned.
Tito, with the understanding that the latter the van even before the lapse of one
could use it for one year for his personal or ALTERNATIVE
year? ANSWER:
Explain. (2%)
family use while Pedro works in Riyadh. He did No, Pedro does not have the right to retrieve
not tell Tito that the brakes of the van were the van before the lapse of one year. The
faulty. Tito had the van tuned up and the parties are mutually bound by the terms of the
brakes repaired. He spent a total amount of contract. Under the Civil Code, there are only 3
P15,000.00. After using the vehicle for two instances when the bailor could validly ask for
weeks, Tito discovered that it consumed too the return of the thing loaned even before the
Two
much months
fuel. To later,
make up Pedro returned
for the to the
expenses, he expiration of the period. These are when: (1) a
Philippines and asked
leased it to Annabelle. Tito to return the van. precarium contract was entered (Article 1947);
Unfortunately, while being driven by Tito, the (2) if the bailor urgently needs the thing
van was accidentally damaged by a cargo (Article 1946); and (3) if the bailee commits
a) Who
truck shall
without hisbear
fault.the P15,000.00 spent acts of ingratitude (Article 1948). Not one of
for the repair of the van? Explain. (2%) The fact that Tito
the situations had leased
is present the
in this thing loaned
case.
ALTERNATIVE ANSWER: to Annabelle would not justify the demand for
Tito must bear the P15,000.00 expenses for the the return of the thing loaned before expiration
van. Generally, extraordinary expenses for the of the period. Under Article 1942 of the Civil
preservation of the thing loaned are paid by the Code, leasing of the thing loaned to a third
bailor, he being the owner of the thing loaned. person not member of the household of the
In this case however, Tito should bear the bailee, will only entitle bailor to hold bailee
expenses because he incurred the expenses ALTERNATIVE
liable for theANSWER:
loss of the thing loaned.
without first informing Pedro about it. Neither As a rule, Pedro does not have the right to
was the repair shown to be urgent. Under retrieve the van before the lapse of one year.
Article 1949 of the Civil Code, bailor generally Article 1946 of the Code provides that "the
bears the extraordinary expenses for the bailor cannot demand the return of the thing
preservation of the thing and should refund the loaned till after the expiration of the period
said expenses if made by the bailee; Provided, stipulated, or after the accomplishment of the
The bailee brings the same to the attention of use for which the commodatum has been
ALTERNATIVE ANSWER: constituted. However, if in the meantime, he
the
The bailor beforespent
P15,000.00 incurring them,
for the except
repair only
of the vanif
the repair is urgent that reply cannot be should have urgent need of the thing, he may
should be borne by Pedro. Where the bailor
awaited. demand its return or temporary use." In the
delivers to the bailee a non-consummable given problem, Pedro allowed Tito to use the
thing so that the latter may use it for a certain van for one year. Thus, he should be bound by
time and return the identical thing, the the said agreement and he cannot ask for the
contract perfected is a Contract of return of the car before the expiration of the
Commodatum. (Art. 1933, Civil Code) The one year period. However, if Pedro has urgent
bailor shall refund the extraordinary expenses d) Who shall bear the expenses
need of the van, he may demand forforits the
return
during the contract for the preservation of the accidental damage caused by the cargo
or temporary use.
thing loaned provided the bailee brings the truck, granting that the truck driver and
same to the knowledge of the bailor before truck owner are insolvent? Explain. (2%)
incurring the same, except when they are so SUGGESTED ANSWER:
In the given problem, Pedro left his Adventure Generally, extraordinary expenses arising on
urgent that the reply to the notification cannot
van with Tito so that the latter could useofit the
for the occasion of the actual use of the thing
be awaited without danger. (Art. 1949
one year while he was in Riyadh. There was no loaned by the bailee, even if incurred without
Civil Code)
mention of a consideration. Thus, the contract fault of the bailee, shall be shouldered equally
perfected was commodatum. The amount of by the bailor and the bailee. (Art. 1949 of the
P15,000.00 was spent by Tito to tune up the Civil Code). However, if Pedro had an urgent
van and to repair its brakes. Such expenses need for the vehicle, Tito would be in delay for
are extra-ordinary expenses because they are failure to immediately return the same, then
necessary for the preservation of the van Thus, Tito would be held liable for the extraordinary
b)
theWho
sameshall
shouldbear the costs
be borne by thefor thePedro.
bailor, van's expenses.
fuel, oil and other materials while it was Commodatum vs.
SUGGESTED
with Tito?ANSWER:
Explain. (2%) Usufruct (1998)
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
Distinguish usufruct from commodatum and state
these may be constituted over consumable
whether Mutuum;
goods. [2%]
SUGGESTED ANSWER: Interests
Samuel (2001) P300,000.00 housing loan
borrowed
1. USUFRUCT is a right given to a person from the bank at 18% per annum interest.
(usufructuary) to enjoy the property of another However, the promissory note contained a
with the obligation of preserving its form and proviso that the bank "reserves the right to
substance. (Art. 562. Civil Code) increase interest within the limits allowed by
On the other hand, COMMODATUM is a law," By virtue of such proviso, over the
contract by which one of the parties (bailor) objections of Samuel, the bank increased the
delivers to another (bailee) something not interest rate periodically until it reached 48%
consumable so that the latter may use it for a per annum. Finally, Samuel filed an action
certain time and return it. questioning the right of the bank to increase
In usufruct the usufructuary gets the right to
the interest rate up to 48%. The bank raised
the use and to the fruits of the same, while in SUGGESTED ANSWER:
the defense
The action willthat the While
prosper. Central
it isBank of the
true that the
commodatum, the bailee only acquires the use
Philippines had already suspended
interest ceilings set by the Usury Law are the Usury
no
of the thing loaned but not its fruits.
Usufruct may be constituted on the whole or a Law.
longer Will
in the action
force, prosper
it has beenorheld
not?that
Why?PD(5%)
No.
part of the fruits of the thing. (Art. 564. Civil 1684 and CB Circular No. 905 merely allow
Code). It may even be constituted over contracting parties to stipulate freely on any
consumables like money (Alunan v. Veloso, 52 adjustment in the interest rate on a loan or
Phil. 545). On the other hand, in commodatum, forbearance of money but do not authorize a
consumable goods may be subject thereof only v. CA, 238increase
unilateral SCRA 2Oof[1994]]) . To say
the interest otherwise
rate by one
when the purpose of the contract is not the will
partyviolate
without thethe other's
principle of (PNB
consent mutuality of
consumption of the object, as when it is merely contracts under Article 1308 of the Civil Code.
ANOTHER ANSWER: To be valid, therefore, any change of interest
for exhibition. (Art. 1936, Civil Code)
1. There are several points of distinction must be mutually agreed upon by the parties
between usufruct and commodatum. Usufruct (Dizon v, Magsaysay, 57 SCRA 25O [1974]). In
is constituted by law, by contract, by the present problem, the debtor not having
testamentary succession, or by prescription given his consent to the increase in interest,
(Art. 1933. Civil Code). Usufruct creates a real Mutuum;
the increase is void.
right to the fruits of another's property, while Interests
Carlos (2002)
sues Dino for (a) collection on a
commodatum creates only a purely personal promissory note for a loan, with no agreement
right to use another's property, and requires a on interest, on which Dino defaulted, and (b)
stipulation to enable the bailee to "make use" damages caused by Dino on his (Carlos)
of the fruits (Arts. 1939& 1940, Civil Code). priceless Michaelangelo painting on which Dino
Usufruct maybe onerous while commodatum is is liable on the promissory note and awards
always or essentially gratuitous (Arts. 1933 & damages to Carlos for the damaged painting,
1935, Civil Code). The contract constituting with interests for both awards. What rates of
usufruct is consensual, while commodatum is a SUGGESTED ANSWER:
interest may the court impose with respect to
With respect to the collection of money or
real contract (perfected only by delivery of the both awards? Explain. (5%)
promissory note, it being a forbearance of
subject matter thereof). However, both involve
money, the legal rate of interest for having
the enjoyment by a person of the property of
defaulted on the payment of 12% will apply.
another, differing only as to the extent and
With respect to the damages to the painting, it
scope of such enjoyment [jus fruendi in one and
is 6% from the time of the final demand up to
Jus utendi in the other); both may have as
the time of finality of judgment until judgment
subject matter either an immovable or a
credit is fully paid. The court considers the
movable; and, both maybe constituted over 2211,
latter CC)
as a forbearance of money. (Eastern
consumable goods (Arts. 574 & 1936, Civil
Shipping Lines, Inc. v. CA, 234 SCRA 78 [1994];
Code). A consumable thing may be the subject- Mutuum;
Art 2210 and
matter of
Mutuum vs. an abnormal usufruct but in a normal Interests
The parties (2004)
in a contract of loan of money
usufruct,
Commodatum
Distinguishthe subject-matter
(2004)
briefly may be used only
but clearly between Mutuum agreed that the yearly interest rate is 12% and
for exhibition.
and commodatum. A commodatum of a consumable it can be increased if there is a law that would
thing may ANSWER:
SUGGESTED be only for the purpose of exhibiting, authorize the increase of interest rates.
In
notMUTUUM,
consuming theit.object borrowed must be a Suppose OB, the lender, would increase by 5%
consumable thing the ownership of which is the rate of interest to be paid by TY, the
transferred to the borrower who incurs the borrower, without a law authorizing such
obligation to return the same consumable to increase, would OBs action be just and valid?
the lender in an equal amount, and of the same SUGGESTED ANSWER:
Why? Has TY a remedy against the imposition
kind and quality. In COMMODATUM, the object OB's action is not just and valid. The debtor
of the rate increase? Explain. (5%)
borrowed is usually a non-consumable thing cannot be required to pay the increase in
the ownership of which is not transferred to the interest there being no law authorizing it, as
borrower who incurs the obligation to return stipulated in the contract. Increasing the
the very thing to the lender.
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
rate in the absence of such law violates the principle
mutuality of contracts.
of To whom should a deliver the bag of money?
ALTERNATIVE ANSWER: Decide with reasons.
Even if there was a law authorizing the SUGGESTED ANSWER:
increase in interest rate, the stipulation is still B would have no right to claim the money.
void because there is no corresponding Article 1990 of the Civil Code is not applicable.
stipulation to decrease the interest due when The law refers to another thing received in
the law reduces the rate of interest. substitution of the object deposited and is
DEPOSIT
predicated upon something exchanged.
The Mayor of Manila cannot invoke. Article 719
of the Civil Code which requires the finder to
Compensation; Bank deposit the thing with the Mayor only when
Loan
In (1997)
order to secure a bank loan, XYZ Corporation the previous possessor is unknown.
surrendered its deposit certificate, with a In this case , a must return the bag of money
maturity date of 01 September 1997 to the to the bank as the previous possessor and
bank. The corporation defaulted on the due known owner (Arts. 719 and 1990. Civil Code.)
repayment of the loan, prompting the bank to
encash the deposit certificate. XYZ Corporation
questioned the above action taken by the bank SURETY
as being a case of pactum commissorium. The
SUGGESTED ANSWER:
bank disagrees. What is your opinion? Recovery of
We submit that there is no pactum Deficiency
AB sold to CD (1997)
a motor vehicle for and in
commissorium here. Deposits of money in consideration of P120,000.00 to be paid in
banks and similar institutions are governed by twelve monthly equal installments of
the provisions on simple loans (Art. 1980. Civil P10,000,00, each installment being due and
Code). The relationship between the depositor payable on the 15th day of each month
and a bank is one of creditor and debtor. To secure
starting the promissory
January 1997. note, CD (a)
Basically this is a matter of compensation as all executed a chattel mortgage on the subject
ADDITIONAL
the elementsANSWER:
of compensation are present in motor vehicle, and (b) furnished a surety bond
Where the security for the debt is also money
this case (BPI vs. CA, 232 SCRA 302). issued by Philam life, CD failed to pay more
deposited in a bank, it is not illegal for the
than two (2) installments, AB went after the
creditor to encash the time deposit certificates
surety but he was only able to obtain three-
to pay
(Chu the
us. CA,debtor's overdue
et al., G.R obligation.
78519, September 26,
1989). fourths (3/4) of the total amount still due and
Deposit; owing from CD. AB seeks your advice on how
SUGGESTED ANSWER:
Exchange
X (1992)
and Y staged a daring bank robbery in Manila he might, if at all, recover the deficiency. How
Yes, he can recover the deficiency. The action
at 10:30 AM in the morning of a regular would you counsel AB?
of AB to go after the surety bond cannot be
business day, and escaped with their loot of taken to mean a waiver of his right to demand
two (2) bags, each bag containing P50,000,00. payment for the whole debt, The amount
During their flight to elude the police, X and Y received from the surety is only payment pro
entered the nearby locked house of A, then tanto, and an action may be maintained for a
working in his Quezon City office. From A's
house, X and Y stole a box containing cash
deficiency debt.
ANTICHRESIS
totaling P50,000.00 which box A had been
keeping in deposit for his friend B. Antichresis
In their hurry, X and Y left in A's bedroom one (1995)
Olivia owns a vast mango plantation which she
(1) of the bags which they had taken from the can no longer properly manage due to a
bank. lingering illness. Since she is indebted to Peter
With X and Y now at large and nowhere to be in the amount of P500.000.00 she asks Peter to
found, the bag containing P50.000.00 is now manage the plantation and apply the harvest
claimed by B, by the Mayor of Manila, and by to the payment of her obligation to him,
the bank. principal and interest, until her indebtedness
B claims that the depository. A, by force
shall have been fully paid. Peter agrees. 1)
majeure had obtained the bag of money in and
WhatPeter? Explain.
kind of 2) is
contract What specific
entered into between
place of the box of money deposited by B. obligations are imposed by law on Peter
Olivia
as a consequence of their contract? 3) Does
The Mayor of Manila, on the other hand, claims the law require any specific form for the
that the bag of money should be deposited of their contract? Explain 4) May Olivia re-
validity
with the Office of the Mayor as required of the acquire the plantation before her entire
finder by the provisions of the Civil Code. indebtedness shall have been fully paid?
Explain.
SUGGESTED ANSWER:
The bank resists the claims of B and the Mayor of
Manila.
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
1. A contract of antichresis was entered into between
payment of the loan. However, the loan was not paid
Olivia and Peter. Under Article 2132 of the New time.
on A month after 4 years, may the shares
Civil Code, by a contract of antichresis the of stock pledged be deemed owned by ABC or
creditor acquires the right to receive the fruits not? Reason. (5%)
of an immovable of his debtor, with the SUGGESTED ANSWER:
obligation to apply them to the payment of the The shares of stock cannot be deemed owned
interest, and thereafter to the principal of his by ABC upon default of MNO. They have to be
SUGGESTED
credit. ANSWER: foreclosed. Under Article 2088 of the Civil
2. Peter must pay taxes and charges upon the Code, the creditor cannot appropriate the
land and bear the necessary expenses for things given by way of pledge. And even if the
preservation and repair which he may deduct parties have stipulated that ABC becomes the
from the fruits. (Art, 2135, NCC) owner of the shares in case MNO defaults on
SUGGESTED ANSWER: the loan, such stipulation is void for being a
3. The amount of the principal and interest Pledge; Mortgage;
pactum commissorium.
must be specified in writing, otherwise the Antichresis
In (1996)
the province, a farmer couple borrowed
antichresis will be void. (Art. 2134, NCC) money from the local merchant. To guarantee
payment, they left the Torrens Title of their
SUGGESTED ANSWER:
land with the merchant, for him to hold until
4. No. Art. 2136 specifically provides that the
they pay the loan. Is there a - a) contract of
debtor cannot re-acquire the enjoyment of the
pledge, b) contract of mortgage, c) contract of
immovable without first having totally paid
antichresis, or d) none of the above? Explain.
what he owes the creditor. However, it is
potestative on the part of the creditor to do so
in order to exempt him from his obligation SUGGESTED ANSWER:
under Art. 2135, NCC, The debtor cannot re- None of the above. There is no pledge because
acquire the enjoyment unless Peter compels only movable property may be pledged (Art.
Olivia to enter again the enjoyment of the 2094. NCC). If at all, there was a pledge of the
property.
PLEDGE paper or document constituting the Torrens
Title, as a movable by itself, but not of the land
which the title represents.
Pledge There is no mortgage because no deed or
(1994)
In 1982, Steve borrowed P400.000.00 from contract was executed in the manner required
Danny, collateralized by a pledge of shares of by law for a mortgage (Arts. 2085 to 2092,
stock of Concepcion Corporation worth NCC; 2124 to 2131, NCC).
P800,000,00. In 1983, because of the economic There is no contract of antichresis because no
crisis, the value of the shares pledged fell to right to the fruits of the property was given to
only P100,000.00. Can Danny demand that the creditor (Art. 2132 NCC).
SUGGESTED ANSWER: the
Steve surrender other shares worth
a) No. Bilateral
P700,000.00? contracts cannot be changed A contract of simple loan was entered into with
unilaterally. A pledge is only a subsidiary security arrangement agreed upon by the
contract, and Steve is still indebted to Danny parties which is not one of those mentioned
for the amount of P400,000.00 despite the fall above.
in the value of the stocks pledged. ALTERNATIVE ANSWER:
b) No. Danny's right as pledgee is to sell the There is a contract of mortgage constituted
pledged shares at a public sale and keep the over the land. There is no particular form
proceeds as collateral for the loan. There is no required for the validity of a mortgage of real
showing that the fall in the value of the property. It is not covered by the statute of
pledged property was attributable to the frauds in Art. 1403, NCC and even assuming
pledger's fault or fraud. On the contrary, the that it is covered, the delivery of the title to the
economic crisis was the culprit. Had the creditor has taken it out of the coverage
pledgee been deceived as to the substance or thereof. A contract of mortgage of real
quality of the pledged shares of stock, he property is consensual and is binding on the
would have had the right to claim another parties despite absence of writing. However,
thing in their place or to the immediate third parties are not bound because of the
Pledge
payment of the obligation. This is not the case
(2004) absence of a written instrument evidencing the
ABC
here.loaned to MNO P40,000 for which the latter mortgage and, therefore the absence of
pledged 400 shares of stock in XYZ Inc. It was
registration. But this does not affect the
agreed that if the pledgor failed to pay the loan
validity of the mortgage between the parties
with 10% yearly interest within four years, the
(Art. 2125, NCC), The creditor may compel the
pledgee is authorized to foreclose on the shares
of stock. As required, MNO delivered possession QUASI-CONTRACT
debtor to execute the mortgage in a public
document in order to allow its registration (Art.
of the shares to ABC with the understanding that
1357.NCC in relation to Art. 1358. NCC).
the shares would be returned to MNO upon the
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
Quasi-Contracts; Negotiorium house under the principle of negotiorum gestio.
Gestio
In (1992)
fear of reprisals from lawless elements He was not liable as the burning of the house is
besieging his barangay, X abandoned his a fortuitous event. Is B liable to A for damages
fishpond, fled to Manila and left for Europe. under the foregoing circumstances?
Seeking that the fish in the fishpond were SUGGESTED ANSWER:
ready for harvest, Y, who is in the business of No. B is not liable for damages, because he is
managing fishponds on a commission basis, a gestor in negotiorum gestio (Art. 2144, Civil
took possession of the property, harvested the Code) Furthermore, B is not liable to A because
fish and sold the entire harvest to Z. Article 2147 of the Civil Code is not applicable.
Thereafter, Y borrowed money from W and
B did not undertake risky operations which the
used the money to buy new supplies of fish fry
owner was not accustomed to embark upon: a)
and to prepare the fishpond for the next crop.
he has not preferred his own interest to that of
a) What is the Juridical relation between X and
the owner; b) he has not failed to return the
Y during X's absence? b) Upon the return of X
property or business after demand by the
to the barangay, what are the obligations of Y
owner; and c) he has not assumed the
to X as regards the contract with Z? c) Upon X's
management in bad faith.
return, what are the obligations of X as regards ALTERNATIVE ANSWER:
Y's contract with W? d) What legal effects will He would be liable under Art. 2147 (1) of the
result if X expressly ratifies Y's management Civil Code, because he used the property for an
and what would
SUGGESTED ANSWER:be the obligations of X in favor operation which the operator is not
of Y? Explain all your answers.
(a) The juridical relation is that of the quasi- accustomed to, and in so doing, he exposed
contract of "negotiorum gestio". Y is the the house to increased risk, namely the
"gestor" or "officious manager" and X is the operation of a pension house on the second
"owner" (Art. 2144, Civil Code). floor and stores on the first floor
(b) Y must render an account of his operations Quasi-Contracts; Negotiorium
and deliver to X the price he received for the Gestio (1995)
Armando owns a row of residential apartments
sale of the harvested fish (Art, 2145, Civil in San Juan, Metro Manila, which he rents out to
Code). tenants. On 1 April 1991 he left for the United
(c) X must pay the loan obtained by Y from W States without appointing any administrator to
because X must answer for obligations manage his apartments such that uncollected
contracted with third persons in the interest of rentals accumulated for three (3) years.
the owner (Art. 2150, Civil Code), Amparo, a niece of Armando, concerned with
(d) Express ratification by X provides the the interest of her uncle, took it upon herself to
effects of an express agency and X is liable to administer the property. As a consequence, she
pay the commissions habitually received by incurred expenses in collecting the rents and in
the gestor as manager (Art. 2149, Civil Code). some instances even spent for necessary
1. Whatto
repairs Juridical
preserverelation between Amparo and
the property.
Quasi-Contracts; Negotiorium Armando, if any, has resulted from Amparo's
Gestio
In (1993)1972, upon declaration of
September, unilateral act of assuming the administration of
martial rule in the Philippines. A, together with 2. What rights
Armando's and obligations,
apartments? if any, does
Explain.
his wife and children. disappeared from his Amparo have under the circumstances?
residence along A. Mabini Street. Ermita, Explain.
SUGGESTED ANSWER:
1. Negotiorum gestio existed between Amparo
Manila. B, his immediate neighbor, noticing that
and Armando, She voluntarily took charge of
mysterious disappearance of A and his family,
the agency or management of the business or
closed the doors and windows of his house to
property of her uncle without any power from
prevent it from being burglarized. Years passed
her uncle whose property was neglected. She is
without B hearing from A and his family, B
called the gestor negotiorum or officious
continued taking care of A's house, even
manager, (Art. 2144, NCC)
causing minor repairs to be done at his house 2. It is recommended by the Committee that an
to preserve it. In 1976, when business began to enumeration of any two (2) obligations and two
perk up in the area, an enterprising man. C, (2) rights as enumerated in Arts. 2145 to 2152,
approached B and proposed that they build NCC, would entitle the examinee to full credit.
stores at the ground floor of the house and
convert its second floor into a pension house. B
agreed to Cs proposal and together they spent
for the construction of stores at the ground
floor and the conversion of the second floor into
a pension house. While construction was going
on, fire occurred at a nearby house. The houses
at the entire block, including A's were burned.
After the EDSA revolution in February 1986, A
and his family returned from the United States
where they took refuge in 1972. Upon learning
of what happened to his house. A sued B for
damages, B pleaded as a defense that he
merely took charge of his
CIVIL LAW Answers to the BAR as Arranged by Topics (Year 1990-2006)
The courts may, however, increase or moderate the (2) When the contract refers to things pertaining to
indemnity according to the circumstances of each the
case.
Art. 2146. If the officious manager delegates to
another person all or some of his duties, he
shall be liable for the acts of the delegate,
without prejudice to the direct obligation of the
latter toward the owner of the business.
The responsibility of two or more officious
managers shall be solidary, unless
management was assumed to save the thing
or business from imminent danger.
Art. 2147. The officious manager shall be liable
for any fortuitous event:
(1) If he undertakes risky operations which the
owner was not accustomed to embark upon;
(2) If he has preferred his own interest to that
of the owner;
(3) If he fails to return the property or business
after demand by the owner,
(4) If he assumed the management
in bad faith.
Art. 2148. Except when the management was
assumed to save the property or business from
imminent danger, the officious manager shall
(1) If he for
be liable is manifestly
fortuitous unfit to carry on the
events
(2) If by his Intervention h e prevented a more
management;
competent person from taking up the
management.
Art. 2149. The ratification of the management
by the owner of the business produces the
effects of an express agency, even if the
business may not have been successful.
Art. 2150, Although the officious management
may not have been expressly ratified, the
owner of the property or business who enjoys
the advantages of the same shall be liable for
obligations incurred in his interest, and shall
reimburse the officious manager for the
necessary and useful expenses and for the
damages which the latter may have suffered in
The same obligation
the performance of hisshall be incumbent upon
duties.
him when the management had for its purpose
the prevention of an imminent and manifest
loss, although no benefit may have been
derived.
Art. 2151. Even though the owner did not
derive any benefit and there has been no
imminent and manifest danger to the property
or business, the owner is liable as under the
(1)
firstTheparagraph
officious manager
of thehas acted in article,
preceding
(2)
good The property
faith,
provided: and or business is intact, ready to
be returned to the owner.
Quasi-Delict
(1992)
As the result of a collision between a public
service passenger bus and a cargo truck owned
by D, X sustained physical injuries and Y died.
Both X and Y were passengers of the bus. Both
drivers were at fault, and so X and Z, the only
heir and legitimate child of the deceased Y,
sued the owners of both vehicles. a) May the
owner of the bus raise the defense of having
exercised the diligence of a good father of a
family? b) May D raise the same defense? c)
May X claim moral damages from both
defendants? d) May Z claim moral damages
SUGGESTED ANSWER:
from both
(a) No. Thedefendants?
owner of theGive
busreasons for allthe
cannot raise your
answers,
defense because the carrier's liability is based
on breach of contract
(b) Yes. D can raise the defense because his
liability is based on a quasi-delict.