CIV2-part 1

MOTO-Q NOTES
Morales, Occiano, Tongcua, Occiano, Quitain
Atty. Crisostomo Uribe

Notes in Civil Law Review 2
I. OBLIGATIONS A: Yes
20% Midterm Q: Suppose a promissory note was
30% quizzes and recitations made:
50% finals 1/2/93
Digest – Sales; starting with Sanchez I promise to pay B P1M
v. Rigos
- 2 quizzes in oblicon A
- Certification that the digest is Is it civil or natural?
complete and is in your own A: It may be civil or natural. Civil-
handwriting - from 2 within 10 years prescriptive period;
classmates natural-beyond ten years.
- - cases penned by justice
Azcuna - 2 quizzes Q: If it was made beyond the
prescriptive period, may it be
OBLICON – Tolentino considered a civil obligation?
Sales – Baviera A: Yes. If prescriptive period was
Partnership – Bautista interrupted or if no written demand
was made. Only if demanded within
Common Law – general and ordinary the prescriptive period may it be due
law of a country/ community; and demandable.
unwritten law founded on memorial
usage and natural justice and reason. Q: Is consent one of the essential
elements of obligations?
Passive solidarity – not always one A: NO. It is true only with contracts.
debtor; may/ may have 2 or more
debtors/creditors. Essential elements of obligation:
When the fulfillment of the condition 1. Active Subject – creditor/obligee

depends upon the sole will of the Q: Is any kind of person subject
debtor, the conditional obligation shall to obligation?
be void – this is true only in resolutory A: Yes. Not only Natural persons
conditions. but also juridical entities/persons.
Alternative conditions – simple when

choice has already been 2. Prestation – to give, to do, or
communicated! If not communicated not to do.
there is no consent.
Q: Is it a thing?
Facultative conditions – is the choice A: No. It is the particular conduct
always with the creditor? of the debtor.
3. Juridical tie – vinculum juris

Obligations: - that which binds the parties.
Art. 1156. An obligation is a juridical Q: When can there be a tie? What

necessity to give, to do or not to do. creates a tie?
(n) A: when there is an existence of
the source of obligation.
- it is a civil obligation because of
the phrase juridical necessity. Sources of Obligation:
Q: Does a creditor have a right under

Art. 1157. Obligations arise from:
natural obligations?
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO OCCIANO; BUDS OCCIANO
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MOTO-Q NOTES

(1) Law; Art. 2167. When through an accident
or other cause a person is injured or
(2) Contracts; becomes seriously ill, and he is
treated or helped while he is not in a
(3) Quasi-contracts; condition to give consent to a
contract, he shall be liable to pay for
the services of the physician or other
(4) Acts or omissions punished
person aiding him, unless the service
by law; and
has been rendered out of pure
generosity.
(5) Quasi-delicts. (1089a)
Art. 2168. When during a fire, flood,
QUASI CONTRACTS: storm, or other calamity, property is
saved from destruction by another
Kinds: person without the knowledge of the
owner, the latter is bound to pay the
1.Nominate: former just compensation.
a) solutio indebiti
Art. 2169. When the government,
b) Negotiorum gestio
upon the failure of any person to
comply with health or safety
2. Innominate – Articles 2164-2175
regulations concerning property,
undertakes to do the necessary work,
SECTION 3. - Other Quasi-Contracts
even over his objection, he shall be
liable to pay the expenses.
Art. 2164. When, without the
knowledge of the person obliged to
give support, it is given by a stranger, Art. 2170. When by accident or other
the latter shall have a right to claim fortuitous event, movables separately
the same from the former, unless it pertaining to two or more persons are
appears that he gave it out of piety commingled or confused, the rules on
and without intention of being repaid. co-ownership shall be applicable.
(1894a)
Art. 2171. The rights and obligations
Art. 2165. When funeral expenses are of the finder of lost personal property
borne by a third person, without the shall be governed by Articles 719 and
knowledge of those relatives who were 720.
obliged to give support to the
deceased, said relatives shall Art. 2172. The right of every
reimburse the third person, should the possessor in good faith to
latter claim reimbursement. (1894a) reimbursement for necessary and
useful expenses is governed by Article
Art. 2166. When the person obliged to 546.
support an orphan, or an insane or
other indigent person unjustly refuses Art. 2173. When a third person,
to give support to the latter, any third without the knowledge of the debtor,
person may furnish support to the pays the debt, the rights of the former
needy individual, with right of are governed by Articles 1236 and
reimbursement from the person 1237.
obliged to give support. The provisions
of this article apply when the father or Art. 2174. When in a small community
mother of a child under eighteen years a nationality of the inhabitants of age
of age unjustly refuses to support him. decide upon a measure for protection
against lawlessness, fire, flood, storm
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MOTO-Q NOTES

or other calamity, any one who A: A must pay the loan to B
objects to the plan and refuses to because it was for the benefit of A.
contribute to the expenses but is
benefited by the project as executed d. If A ratified the acts of B, what
shall be liable to pay his share of said will happen?
expenses.
A: A shall be indebted to B
Art. 2175. Any person who is
constrained to pay the taxes of
another shall be entitled to
reimbursement from the latter.
Q: Is innominate quasi contract
exclusive?
 certain lawful,
unilateral act A: No. Acts or omissions punishable by
must concur. law.-> crimes and delicts.
 For negotiorum
gestio- there
 felony is limited
must be
only to the RPC.
abandonment.
Requisites for it to arise:

BAR EXAM QUESTION:
There must be a conviction. Proof

A bought a pack of cigar worth
beyond reasonable doubt.
P225.00. He paid P375.00. What
relationship was created?
Q: Is there a crime where there is no
civil liability?
A: Quasi contract; solutio indebiti
A: Justifying Circumstances.
Q: A had a fishpond. Lawless events
forced to go to Manila and then
Europe. B, who has in the business of QUASI DELICT:
buying and selling fish, realized that it
was harvest time, harvested the fish Quasi-delict = culpa aquiliana
and sold them to X. B borrowed
money from Y in order to buy the - it is not culpa extra contractual or
fingerlings. torts.
a. What Juridical relationship was Culpa extra contractual includes:

created between A and B?
1. contractual
A: Negotiorum gestio 2. Extra contractual – includes
other sources under 1157.
b. What juridical relationship was
created by A with respect to B Pineda would say that torts is not
and X? quasi-delict because torts include
malicious and negligent acts.
A: to remit the sale of fish sold to
X Atty. Uribe does not agree with him.
Torts is the same as quasi delict.
c. A with respect to B and Y?
Art. 2177. Responsibility for fault or
negligence under the preceding article
is entirely separate and distinct from
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MOTO-Q NOTES

the civil liability arising from c. Service (to do) –
negligence under the Penal Code. But damages;involuntary
the plaintiff cannot recover damages servitude.
twice for the same act or omission of
the defendant. (n) Generic – depends on the purpose and
circumstances.
Cangco v. Manila Railroad (18 Phil

768)
Q: What were the defendant's July 7, 2007 (7/7/07)

defenses?
Compliance of Obligation; specific
A: plaintiff was negligent; defendant obligation of the debtor; different
exercised due diligence in selecting its kinds of obligation – joint solidary.
employees. (not a good defense. It is
raised only in quasi delict.MRR’s July 10 and 28 -make up class
liability was based on contract of
carriage.) Compliance – determine the kind of
obligation; determine the purpose.
Q: Was it the negligence of Cangco?
BAR EXAM QUESTION:
A: No. the proximate cause was the
bulk of watermelon. It was dimly There was an obligation on the part of
lighted. There is negligence A to deliver mangoes on july 1, 2006,
considering the person, time and 6 months after agreement with B. One
place. month before delivery, A sold to the
fruit to X. Can B recover the fruits
Gutierrez v. Gutierrez (56 Phil 177) from X?
- there were 5 defendants. 3 were A: No. B has no real rights over the
held liable. The mother and child were fruits since it was not delivered to him.
not held liable.
KINDS OF OBLIGATIONS AS TO
Q: A obliged himself the following to PERFECTION AND EXTINGUISHMENT:
B: a. to give a refrigerator, model 123;
b. an 18 inch TV set; c. fix piano of B. Q: promissory note:
A failed to perform any. What are the
remedies?
1/2/93
A: Determine first the nature of the I promise to pay B P1M

thing to be delivered whether
determinate or indeterminate: A
What kind of obligation?
a. determinate/specific(ref)-
specific performance plus A: Pure Obligation
damages.  even if
b. Generic (TV) – to have suspensive or
another person perform at postestative
the expense of the debtor. condition, the
debtor may be
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MOTO-Q NOTES

compelled if of both parties, there may be no
there is a pre compulsion. If for the benefit of the
existing debtor, creditor may be compelled to
condition. accept.
Impossible Conditions:
Instances for the benefit of the
If with a term – shall annul condition debtor:
If without a term – it is void 1. on or before
If negative impossible – valid 2. Not later than
condition 3. within ___ mos.
Q: A borrowed from B P1M, payable at

Art. 1187. The effects of a conditional the end of the year. August 1, creditor
obligation to give, once the condition demanded a mortgage constituted on
has been fulfilled, shall retroact to the the house of A. No mortgage was
day of the constitution of the delivered. On Aug.16, can creditor
obligation. Nevertheless, when the demand? When?
obligation imposes reciprocal
prestations upon the parties, the fruits A: When he loses the right to make
and interests during the pendency of use of the period. If debtor has
the condition shall be deemed to have promised, in this case the debtor did
been mutually compensated. If the not promise anything.
obligation is unilateral, the debtor
shall appropriate the fruits and Q: If insolvent, will he lose his right?
interests received, unless from the
nature and circumstances of the
A: No, if he furnishes a guaranty which
obligation it should be inferred that
is acceptable to the creditor.
the intention of the person
constituting the same was different.
Q: How will he be insolvent?
Reciprocal – sale
Unilateral – donation A: by giving one or more of his
property.
Q: A obliged himself to B to deliver a
thing on September 2005, after they Q: What if he has no assets?
agreed in January 2003. A however
delivered it to in April of 2003. Who A: third person may guarantee.
has a better right? What about C?
A: B has a better right. C will have a Art. 1198. The debtor shall lose every
better right if he acted in good faith. right to make use of the period:
* with regard to improvements, if
voluntarily made by the debtor, no (1) When after the obligation has been
other right than usufructuary. contracted, he becomes insolvent,
unless he gives a guaranty or security
BAR EXAM QUESTION: for the debt;
Q: A borrowed P1M from B payable at (2) When he does not furnish to the
the end of the year; A delivered a car creditor the guaranties or securities
as stipulated, B may use the car. On which he has promised;
August 1, A offered to pay P1M, can B
be compelled to accept P1M?
(3) When by his own acts he has
impaired said guaranties or securities
A: It depends on whose benefit the
after their establishment, and when
term was constituted. If for the benefit
through a fortuitous event they
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MOTO-Q NOTES

disappear, unless he immediately The creditor cannot be compelled to
gives new ones equally satisfactory; receive part of one and part of the
other undertaking. (1131)
(4) When the debtor violates any
undertaking, in consideration of which Art. 1200. The right of choice belongs
the creditor agreed to the period; to the debtor, unless it has been
expressly granted to the creditor.
(5) When the debtor attempts to
abscond. (1129a) The debtor shall have no right to
choose those prestations which are
impossible, unlawful or which could
not have been the object of the
obligation. (1132)
Art. 1201. The choice shall produce no

effect except from the time it has been
communicated. (1133)
Art. 1202. The debtor shall lose the

Lim v. People (133 SCRA 333) right of choice when among the
prestations whereby he is alternatively
-> merely an agent; 1197 is not bound, only one is practicable. (1134)
applicable. Period “as soon as sold”
Art. 1203. If through the creditor's
Millares v. Hernando (151 SCRA 484) acts the debtor cannot make a choice
according to the terms of the
-> 1197 is not applicable. obligation, the latter may rescind the
contract with damages. (n)
Art. 1197. If the obligation does not
fix a period, but from its nature and Art. 1204. The creditor shall have a
the circumstances it can be inferred right to indemnity for damages when,
that a period was intended, the courts through the fault of the debtor, all the
may fix the duration thereof. things which are alternatively the
object of the obligation have been lost,
The courts shall also fix the duration or the compliance of the obligation has
of the period when it depends upon become impossible.
the will of the debtor.
The indemnity shall be fixed taking as
In every case, the courts shall a basis the value of the last thing
determine such period as may under which disappeared, or that of the
the circumstances have been probably service which last became impossible.
contemplated by the parties. Once
fixed by the courts, the period cannot Damages other than the value of the
be changed by them. (1128a) last thing or service may also be
awarded. (1135a)
AS TO PLURALITY OF
PRESTATION: Art. 1205. When the choice has been
expressly given to the creditor, the
SECTION 3. - Alternative Obligations obligation shall cease to be alternative
from the day when the selection has
Art. 1199. A person alternatively been communicated to the debtor.
bound by different prestations shall
completely perform one of them.
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MOTO-Q NOTES

Until then the responsibility of the c) conjunctive – 2 or more
debtor shall be governed by the prestations which shall be
following rules: complied with.
(1) If one of the things is lost Example:

through a fortuitous event, he
shall perform the obligation by I promise to __,__,and ___
delivering that which the (conjunctive)
creditor should choose from
among the remainder, or that I promise to __,__,or ___
which remains if only one (alternative)
subsists;
In conjunctive and facultative, no
(2) If the loss of one of the choice is made.
things occurs through the fault
of the debtor, the creditor may
In alternative, choice is with debtor
claim any of those subsisting,
unless:
or the price of that which,
through the fault of the former,
has disappeared, with a right to Art. 1205. When the choice has been
damages; expressly given to the creditor, the
obligation shall cease to be alternative
from the day when the selection has
(3) If all the things are lost
been communicated to the debtor.
through the fault of the debtor,
the choice by the creditor shall
fall upon the price of any one of * choice must be communicated.
them, also with indemnity for (relevant if one of the prestation was
damages. lost)
The same rules shall be applied to 1. if fault of debtor after

obligations to do or not to do in case communication – debtor is liable.
one, some or all of the prestations
should become impossible. (1136a) 2. if loss happened before
communication due to fortuitous event
Art. 1206. When only one prestation – debtor may still choose from the
has been agreed upon, but the obligor remaining.
may render another in substitution,
the obligation is called facultative. IF FAULT WAS DUE TO ONE OF THE
PARTIES; MAKE A DISTINCTION, WHO
The loss or deterioration of the thing HAS AT FAULT AND WHO HAS THE
intended as a substitute, through the CHOICE:
negligence of the obligor, does not
render him liable. But once the 1. Choice of debtor; fault of creditor.
substitution has been made, the
obligor is liable for the loss of the - debtor may choose from those
substitute on account of his delay, remaining or debtor may opt to
negligence or fraud. (n) rescind the obligation.
2. Choice of creditor; fault of debtor.
a) alternative - creditor may opt to choose from

b) facultative those remaining or that value of which
was lost plus damages.
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MOTO-Q NOTES

Example: Facultative vs. Penal clause (there
should be non-compliance.)
Choice of debtor, first prestations were
lost due to his fault, only one is left AS TO THE RIGHTS AND
and yet was lost through fortuitous OBLIGATION OF MULTIPLE
event. PARTIES:
- debtor can’t be held liable. SECTION 4. - Joint and Solidary

Obligations
In alternative, if all prestations were
lost due to the fault of the debtor? Art. 1207. The concurrence of two or
more creditors or of two or more
➔ depends on who has the right debtors in one and the same
to choose: obligation does not imply that each
one of the former has a right to
demand, or that each one of the latter
1. if debtor: value of last
is bound to render, entire compliance
prestation plus damages.
with the prestation. There is a solidary
2. if creditor’s choice: anything of
liability only when the obligation
those lost plus damages.
expressly so states, or when the law
or the nature of the obligation
In Facultative: involves 2 or more requires solidarity. (1137a)
prestations but only one is due.
Art. 1208. If from the law, or the
- if one is lost, depends if there nature or the wording of the
was a communication. obligations to which the preceding
article refers the contrary does not
Tolentino: if debtor destroys the appear, the credit or debt shall be
substitute, it doesn’t matter. presumed to be divided into as many
shares as there are creditors or
Q: What if debtor refuses to make debtors, the credits or debts being
a choice? considered distinct from one another,
subject to the Rules of Court
A: Creditor file an action in the governing the multiplicity of suits.
alternative. (1138a)
Art. 1209. If the division is impossible,

Final exams/ midterms (might be
the right of the creditors may be
asked)
prejudiced only by their collective
acts, and the debt can be enforced
In July 1, 2003, A and B entered into only by proceeding against all the
an agreement. When it fell due, B failed debtors. If one of the latter should be
to fulfill and was in delay. (Sir said that insolvent, the others shall not be liable
he is not in delay, because there was for his share. (1139)
no demand.)
Art. 1210. The indivisibility of an
Q: When can debtor make a choice of obligation does not necessarily give
the substitution? rise to solidarity. Nor does solidarity of
itself imply indivisibility. (n)
A: He can make a choice even before it
becomes due and demandable. Art. 1211. Solidarity may exist
although the creditors and the debtors
may not be bound in the same
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MOTO-Q NOTES

manner and by the same periods and interest for the payment already
conditions. (1140) made. If the payment is made before
the debt is due, no interest for the
Art. 1212. Each one of the solidary intervening period may be demanded.
creditors may do whatever may be
useful to the others, but not anything When one of the solidary debtors
which may be prejudicial to the latter. cannot, because of his insolvency,
(1141a) reimburse his share to the debtor
paying the obligation, such share shall
Art. 1213. A solidary creditor cannot be borne by all his co-debtors, in
assign his rights without the consent proportion to the debt of each.
of the others. (n) (1145a)
Art. 1214. The debtor may pay any Art. 1218. Payment by a solidary
one of the solidary creditors; but if debtor shall not entitle him to
any demand, judicial or extrajudicial, reimbursement from his co-debtors if
has been made by one of them, such payment is made after the
payment should be made to him. obligation has prescribed or become
(1142a) illegal. (n)
Art. 1215. Novation, compensation, Art. 1219. The remission made by the
confusion or remission of the debt, creditor of the share which affects one
made by any of the solidary creditors of the solidary debtors does not
or with any of the solidary debtors, release the latter from his
shall extinguish the obligation, without responsibility towards the co-debtors,
prejudice to the provisions of Article in case the debt had been totally paid
1219. by anyone of them before the
remission was effected. (1146a)
The creditor who may have executed
any of these acts, as well as he who Art. 1220. The remission of the whole
collects the debt, shall be liable to the obligation, obtained by one of the
others for the share in the obligation solidary debtors, does not entitle him
corresponding to them. (1143) to reimbursement from his co-debtors.
(n)
Art. 1216. The creditor may proceed
against any one of the solidary Art. 1221. If the thing has been lost or
debtors or some or all of them if the prestation has become
simultaneously. The demand made impossible without the fault of the
against one of them shall not be an solidary debtors, the obligation shall
obstacle to those which may be extinguished.
subsequently be directed against the
others, so long as the debt has not If there was fault on the part of any
been fully collected. (1144a) one of them, all shall be responsible to
the creditor, for the price and the
Art. 1217. Payment made by one of payment of damages and interest,
the solidary debtors extinguishes the without prejudice to their action
obligation. If two or more solidary against the guilty or negligent debtor.
debtors offer to pay, the creditor may
choose which offer to accept. If through a fortuitous event, the thing
is lost or the performance has become
He who made the payment may claim impossible after one of the solidary
from his co-debtors only the share debtors has incurred in delay through
which corresponds to each, with the the judicial or extrajudicial demand
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MOTO-Q NOTES

upon him by the creditor, the “individually and jointly, respectively,
provisions of the preceding paragraph collectively and distinctively.”
shall apply. (1147a)
In promissory note: I promise to pay A
Art. 1222. A solidary debtor may, in and B (solidary).
actions filed by the creditor, avail
himself of all defenses which are We promise to pay. (solidary)
derived from the nature of the
obligation and of those which are If simple “We” – joint
personal to him, or pertain to his own
share. With respect to those which
Solidary liability examples:
personally belong to the others, he
may avail himself thereof only as
regards that part of the debt for which LAW
the latter are responsible. (1148a)
Solution indebiti, crimes, negotiorum
gestio. In agency read b.solidary on
the on the outline, 1823-1824->
tortuous act of one of the parties.
1. Joint obligation
2. Solidary obligation
Art. 1823. The partnership is bound to
make good the loss:
In the exams if A, B and C are debtors
and X and Y are creditors, and it
speaks of solidarity, presume solidarity (1) Where one partner acting
on both sides. within the scope of his
apparent authority receives
money or property of a third
person and misapplies it; and
BAR EXAM QUESTION:

(2) Where the partnership in
the course of its business
Q: A and B obliged themselves to receives money or property of
deliver 1thousand pesos worth of a third person and the money
specific sacks of rice to X and Y. What or property so received is
is the type of obligation? misapplied by any partner while
it is in the custody of the
A: It is a joint obligation unless there partnership. (n)
is a stipulation; the law requires it; the
nature of the obligation requires it. Art. 1824. All partners are liable
solidarily with the partnership for
Q: B delivered entire 1 thousand pesos everything chargeable to the
to X, can Y compel B to deliver? partnership under Articles 1822 and
1823. (n)
A: Yes. Because the obligation is joint.
NATURE OF THE OBLIGATION
Solidary: WHICH REQUIRES SOLIDARITY:
1. Joint and several. Example:

2. jointly and severally.
1. Liability arising from human
Ronquillo v. CA (132 SCRA 274) relations. (torts-2194)
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Art. 2194. The responsibility of two or Active Solidarity:
more persons who are liable for quasi-
delict is solidary. Creditor solidarily bound. X can
demand from A = 40; if Y receives 40,
2. Decisions of the Supreme he should give 20 to X.
Court which became final.
If there is an agreement: X may
Liwanag v. WCC demand 45 from A and Y may demand
15 from A.
Computations:
In a joint obligation if A paid the whole
Joint obligations 120, he cannot claim reimbursement
from B and C unless he proves that
P120 they have been benefited. There was
payment to the wrong party.
A X
Solidary:
B
Q: A demanded payment from X, can
Y still collect?
C Y
A: No. the payment of one debtor

-> X may demand P60
extinguishes the obligation.
If X demands from A, A is to pay only
Q: In joint, C became insolvent, how
P20.
much can X demand from A?
Mixed Solidarity
A: Still P20. Insolvency shall not
increase the debt of joint debtors.
X may demand 120 from any of them.
Q: if X remitted entire obligation in
favor of A, can Y still collect from B
and C?
What if there was an agreement? A =
½; B = ¼; C =1/4; X = ¾ ; Y = ¼ A: Yes.
A: If joint- X with respect to A can Q: If solidary, C became insolvent,

demand 45; how much can X demand?
Q: If mixed: A: 120. The share of 1 solidary debtor

shall be shouldered by other solidary
A: X= 90; Y = 30; X may demand debtors.
P22.50 from A.
Passive solidarity:
Q: If A was compelled to pay X, how
No agreement – debtors are solidarily much can A recover?
bound. X may demand 60 from A.
A: From B=P60
If there is an agreement: X may
demand from A- 45, B and C- 22.50. REMISSION IN SOLIDARY:
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Q: X condones share of A and Q: Four medical students rented an
demanded payment from B. How apartment. They agreed for the
much can B pay? payment of utilities. Before the lease
contract ended, 3 of the 4 went back
A: P80 to their country. They have unpaid
telephone bills worth 100k, can the
Q: If after condonation C was already one left pay only P25?
insolvent, how much can B recover
from A? A: Yes. It is presumed to be a joint
obligation as provided in Article 1207.
A: Having paid 80, B shall recover 20,
even if remitted, it does not exempt if Art. 1207. The concurrence of two or
one is insolvent. more creditors or of two or more
debtors in one and the same
EFFECT OF DISMISSAL OF ACTION obligation does not imply that each
one of the former has a right to
demand, or that each one of the latter
Q: X and Y filed a case against A,
is bound to render, entire compliance
however it was dismissed. Y filed a
with the prestation. There is a solidary
case again. Will his action prosper?
liability only when the obligation
expressly so states, or when the law
A: it depends if joint or solidary. or the nature of the obligation
requires solidarity. (1137a)
Q: If joint: If reason is prescription, Y
still files, may it prosper? DISJUNCTIVE
A: Yes. The debts are separate and 1. A will pay P120 either to X or Y
distinct in joint. Action shall not inure 2. A or B will pay X
to X.
Q: If X demands payment, A paid Y,
Q: If the ground is subject to different can X still demand payment from A?
conditions? Who has the right to choose?
A: Yes. The debts are separate and A: Depends on the agreement.

distinct in joint. Action shall not inure
to X.
Q: What if there is no agreement?
Q: If ground is minority. May it
A: Tolentino- should be treated like
prosper?
solidary. Payment should be made to
the solidary creditor who demanded
A: No, it is an absolute defense. first.
Q: If dismissed because contract is * Sir does not agree! Rules on

void, will it prosper? alternative obligation should govern
because under the law solidarity is not
A: No. presumed hence disjunctive is not one
of it.
Q: if solidary?
NEXT MEETING TUESDAY!
A: No. The demand of one creditor
inures to the benefit of other creditors. July 24, 2007
BAR EXAMINATION QUESTION: BAR EXAM QUESTION:
12
MOTO-Q NOTES

Q: Corporation promised to deliver * no need to present proof of damages
furniture set to A. they agreed that in as long as there is breach of the
case of non compliance, a penalty of obligation.
100 thousand pesos must be paid.
The corporation delivered furniture set Q: May the aggrieved party be able to
which is different, instead of Narra. compel the other party to pay penalty
Buyer is asking for 300 thousand plus performance?
pesos as damages and 100 thousand
for the penalty. Is this claim tenable? A: The general rule is they may not,
however if it is clearly granted, they
A: UP Law Center: It is not tenable. may.
The penalty is the substitute for
damages. Illustration: A construction of a
building which has a penalty of 10
Alternative answer: Yes, he may claim thousand pesos per day if not
for damages because there was fraud completed on the agreed day, plus
committed. performance was agreed upon.
PENAL CLAUSE – provides for greater Q: Debtor offered his car instead of
liability. paying the penalty. May a debtor
compel creditor to accept penalty
Robes-Francisco v. CFI 86 SCRA 59 instead of car.
The supreme court ruled that the 4% A: General rule: No; Exception: Unless
stipulation is not a penal clause. Even expressly reserved.
without such stipulation, corporation is
still liable to pay 6% based on Article Q: If the principal is void, will it follow
2209. that the accessory is void?
Art. 2209. If the obligation consists in A: General Rule: Yes

the payment of a sum of money, and
the debtor incurs in delay, the Exception: if the basis is the nullity of
indemnity for damages, there being the obligation there can be a penalty.
no stipulation to the contrary, shall be
the payment of the interest agreed
Example:Foreigners who contracted
upon, and in the absence of
Filipinos usually penalty is provided in
stipulation, the legal interest, which is
case contract is declared void. In this
six per cent per annum. (1108)
case the nullity of the principal does
not affect the penalty.
Bachrach v. Espiritu 52 PHIL 346
BREACH OF OBLIGATION:
Facts: There was a sale of 2 trucks
with interest of 12% for the unpaid
Q: Who can be held liable?
portion and a penalty of 25%.
A: Those who are enumerated in
Held: Parties expressly stipulated the
Article 1170; hence, anyone.
payment of interest hence liable, the
penalty was reduced to 10% because
there was partial performance; Art. 1170. Those who in the
usurious. performance of their obligations are
guilty of fraud, negligence, or delay,
and those who in any manner
13
MOTO-Q NOTES

contravene the tenor thereof, are Art. 1173. The fault or negligence of
liable for damages. (1101) the obligor consists in the omission of
that diligence which is required by the
FRAUD: nature of the obligation and
corresponds with the circumstances of
1. Fraud in contract – art. 1338 the persons, of the time and of the
place. When negligence shows bad
faith, the provisions of Articles 1171
Art. 1338. There is fraud when,
and 2201, paragraph 2, shall apply.
through insidious words or
machinations of one of the contracting
parties, the other is induced to enter If the law or contract does not state
into a contract which, without them, the diligence which is to be observed
he would not have agreed to. (1269) in the performance, that which is
expected of a good father of a family
shall be required. (1104a)
2. Causal fraud – dolo causante in
contracts; voidable.
3. Incidental fraud – dolo - depends on the circumstances,
incidente time and place.
- Degree of diligence: that of a
good father of a family unless
Art. 1170. Those who in the
the law or the stipulations
performance of their obligations are
provide otherwise.
guilty of fraud, negligence, or delay,
and those who in any manner
contravene the tenor thereof, are Q: May a waiver of future negligence
liable for damages. (1101) be considered void.
- if obligation is monetary in character A: Yes. Gross negligence is equivalent

for example, P1M, it is interest by way to fraud.
of damages.
Telefast v. Castro 158 SCRA 445
Compensatory damages – expressly
stipulated in writing. The negligence in this case was
considered gross in character.
DELAY:
“Mora”; non-fulfillment with respect to

Q: Is article 1170 by way of dolo? time.
A: No. Better term is bad faith or - no delay in obligation not to do.

malice. The phrase “in any manner” (obviously!)
covers not only fraud but also
negligence and delay. Effects of delay:
WAIVER of future fraud is void: 1. If determinate thing to deliver,

there was a fortuitous event –
- consider the dated when waiver the obligor is still liable.
was made, and date when the
fraudulent act happened. BAR EXAM QUESTION:
NEGLIGENCE (memorize) Q: A and B entered into a lease

agreement over certain machineries. B
14
MOTO-Q NOTES

was to open a car repair shop. On 3. When period is the controlling
February 15, they agreed that the motive. Ex. Wedding.
machineries will be leased for one 4. Demand would be useless due
month. On March 15, the lessor to the of the debtor.
demanded return of the machineries.
Because the truck of B had a problem, In reciprocal obligations, neither party
the machineries were not returned. Is incurs in delay if the other does not
B liable? comply or is not ready to comply in a
proper manner with what is incumbent
A: No, B is not liable. There were only upon him. From the moment one of
28 days. An agreement of 1 month is the parties fulfills his obligation, delay
30 days. by the other begins. (1100a)
*As a rule there has to be a demand. Reciprocal obligations:
*Demand need not be in writing; It is - arise from the same transaction.

different from demand to interrupt the
prescriptive period. Example: Contract of sale.
Art. 1169. Those obliged to deliver or 1169 – should apply only if both are
to do something incur in delay from already due and demandable upon
the time the obligee judicially or establishment or at the same time.
extrajudicially demands from them the
fulfillment of their obligation. Agcaoili v. GSIS 165 SCRA 1
However, the demand by the creditor - if both in delay, no right of

shall not be necessary in order that recission.
delay may exist:
Art. 1174. Except in cases expressly
(1) When the obligation or the specified by the law, or when it is
law expressly so declare; or otherwise declared by stipulation, or
when the nature of the obligation
(2) When from the nature and requires the assumption of risk, no
the circumstances of the person shall be responsible for those
obligation it appears that the events which could not be foreseen, or
designation of the time when which, though foreseen, were
the thing is to be delivered or inevitable. (1105a)
the service is to be rendered
was a controlling motive for the - it is the happening of a
establishment of the contract; fortuitous event. It applies to
or any kind of obligation.
(3) When demand would be In obligation to give, Article 1262

useless, as when the obligor applies:
has rendered it beyond his
power to perform.
Art. 1262. An obligation which
consists in the delivery of a
In 1169 – no demand is needed. determinate thing shall be
extinguished if it should be lost or
1. by law – eg. Payment of tax, destroyed without the fault of the
agency. debtor, and before he has incurred in
2. Stipulation delay.
15
MOTO-Q NOTES

When by law or stipulation, the obligor A. Extra judicial – principal remedy,
is liable even for fortuitous events, the expressly granted by law. - 1191. It
loss of the thing does not extinguish can be invoked aside from other
the obligation, and he shall be remedy. Art.1381 is only a subsidiary
responsible for damages. The same remedy.
rule applies when the nature of the
obligation requires the assumption of Art. 1191. The power to rescind
risk. (1182a) obligations is implied in reciprocal
ones, in case one of the obligors
In Article 1165, even if obligation should not comply with what is
became impossible due to Fortuitous incumbent upon him.
event, debtor is still liable.
The injured party may choose
Art. 1165. When what is to be between the fulfillment and the
delivered is a determinate thing, the rescission of the obligation, with the
creditor, in addition to the right payment of damages in either case.
granted him by Article 1170, may He may also seek rescission, even
compel the debtor to make the after he has chosen fulfillment, if the
delivery. latter should become impossible.
If the thing is indeterminate or The court shall decree the rescission

generic, he may ask that the claimed, unless there be just cause
obligation be complied with at the authorizing the fixing of a period.
expense of the debtor.
This is understood to be without
If the obligor delays, or has promised prejudice to the rights of third persons
to deliver the same thing to two or who have acquired the thing, in
more persons who do not have the accordance with Articles 1385 and
same interest, he shall be responsible 1388 and the Mortgage Law. (1124)
for any fortuitous event until he has
effected the delivery. (1096) Art. 1381. The following contracts are
rescissible:
- promise to deliver to two or
more persons, the debtor is still (1) Those which are entered
liable. In Napocor v. CA (161 into by guardians whenever the
SCRA 344), to be excused wards whom they represent
there should be no concurring suffer lesion by more than one-
negligence. fourth of the value of the
things which are the object
BAR EXAM QUESTION: thereof;
Q: A ring was delivered to a jewelry (2) Those agreed upon in

shop for cleaning. After a week, the representation of absentees, if
ring was not yet cleaned. Thereafter, the latter suffer the lesion
the ring was lost due to robbery. Is the stated in the preceding
jewelry shop liable? number;
A: Yes. Before the fortuitous event, (3) Those undertaken in fraud

the jewelry shop was already in delay. of creditors when the latter
cannot in any other manner
REMEDIES FOR BREACH: collect the claims due them;
16
MOTO-Q NOTES

(4) Those which refer to things 1. Only those who have complied
under litigation if they have with their obligation or at least
been entered into by the ready to comply.
defendant without the 2. Violation must be
knowledge and approval of the substantial/fundamental in
litigants or of competent character.
judicial authority;
There was no showing that Mafran had
(5) All other contracts specially exhausted all the remedies available.
declared by law to be subject
to rescission. (1291a) SC: rescission is under 1191 not
1381.
If court declared the act as rescissory,
it will retroact from the time notice Q: If obligation becomes impossible,
was given to the other party. what is the remedy?
Q: Why is there a need to file a A: Rescission. If already rescinded, he

rescission with the courts when it can can no longer demand for the
be extrajudicial? fulfillment.
A: Because a party cannot take the Magdalena Estate v. Myrick (71 Phil
law in his own hands especially if 344)
there is recovery needed.
Myrick was able to recover because
UP v. de los Angeles (35 SCRA 102) there was no stipulation as to
forfeiture.
- there can be unilateral decision
provided it is agreed upon. Other extrajudicial remedies:
BAR EXAMINATION QUESTION Rights of unpaid seller:
Q: A sold a parcel of land to B for Art. 1526. Subject to the provisions of

P1M, B paid 100 thousand as down this Title, notwithstanding that the
payment. Vendor will be liable for ownership in the goods may have
eviction of squatters, balance to be passed to the buyer, the unpaid seller
paid 30 days after eviction, if of goods, as such, has:
squatters are still there for 6 months
buyer should return the money. (1) A lien on the goods or right
During the 6th month period, the price to retain them for the price
of the land was doubled. Seller while he is in possession of
offered to return the 100 thousand them;
pesos. Buyer refused and offered to
pay the balance and asked seller to
(2) In case of the insolvency of
sign. Seller filed an action for
the buyer, a right of stopping
rescission. Is the action proper?
the goods in transitu after he
has parted with the possession
A: No. The seller was not the of them;
aggrieved party. Rescission as a
remedy maybe invoked only by the
(3) A right of resale as limited
aggrieved party.
by this Title;
UFC v. CA (33 SCRA 1)
17
MOTO-Q NOTES

(4) A right to rescind the sale pertain to purely personal right.
as likewise limited by this Title. Example: acts of agency.
Where the ownership in the goods has Q: What is the extent of liability?
not passed to the buyer, the unpaid
seller has, in addition to his other A: 2236, applies to present and future
remedies a right of withholding property.
delivery similar to and coextensive
with his rights of lien and stoppage in Art. 2236. The debtor is liable with all
transitu where the ownership has his property, present and future, for
passed to the buyer. (n) the fulfillment of his obligations,
subject to the exemptions provided by
B. Judicial Remedies: law. (1911a)
a.) Principal remedies – specific

- If a person is judicially declared
performance
to be insolvent, when he
inherits, the future property is
Q: In obligation to do, is substitute
exempt.
performance allowed?
A: It depends. If personal qualification Family Home: May be a subject for tax

was stipulated. nonpayment, creditors for
construction, claim of laborers and
If no specific performance, it amounts mortgagee. (Rules of Court rule 39,
to involuntary servitude. sec.13)
Q: If obligation was to do and MODES OF EXTINGUISHMENT –

obligation was poorly done. Article 1231
A: Art. 1167. If a person obliged to do Art. 1231. Obligations are

something fails to do it, the same shall extinguished:
be executed at his cost. (1) By payment or
performance:
This same rule shall be observed if he
does it in contravention of the tenor of (2) By the loss of the thing
the obligation. Furthermore, it may be due:
decreed that what has been poorly
done be undone. (1098) (3) By the condonation or
remission of the debt;
(4) By the confusion or merger

b.) Subsidiary remedies of the rights of creditor and
debtor;
1. accion pauliana – to be discussed in
rescissible contracts. (5) By compensation;
2. accion subrogatoria – creditor may (6) By novation.

be subrogated to the right of the
debtor as to 3rd persons. Other causes of extinguishment of
obligations, such as annulment,
- pertains to obligation to give; rescission, fulfillment of a resolutory
monetary obligation. It does not condition, and prescription, are
18
MOTO-Q NOTES

governed elsewhere in this Code. Q: Fulfillment of resolutory condition
(1156a) in 1231 pertains to?
A: Happening of a resolutory
- It presupposes that there is an condition.
existing valid obligation.
- will of one of the parties in
Recission – principal remedy is under contracts as a general rule does
article 1191. not extinguish obligation.
- Exception: contracts involving
Art. 1191. The power to rescind trust and confidence.
obligations is implied in reciprocal Partnership without prejudice
ones, in case one of the obligors to the possible liability of
should not comply with what is partner causing dissolution.
incumbent upon him.
Q: Is happening of a fortuitous event a
The injured party may choose mode of extinguishment?
between the fulfillment and the
rescission of the obligation, with the A: Fortuitous events are not modes of
payment of damages in either case. extinguishment. Only results to loss of
He may also seek rescission, even the thing due.
after he has chosen fulfillment, if the
latter should become impossible. - Insolvency per se is not a mode
of extinguishment, there must
The court shall decree the rescission be a judicial declaration.
claimed, unless there be just cause
authorizing the fixing of a period. Q: What about renunciation by the
creditor?
This is understood to be without
prejudice to the rights of third persons A: Not necessarily. If it is gratuitous, it
who have acquired the thing, in would fall under
accordance with Articles 1385 and condonation/remission. If for a
1388 and the Mortgage Law. (1124) consideration, it falls under novation.
Extinctive prescription – conversion of Q: Compromise?

civil to natural.
A: It may. But it would fall under one
Q: Are thes modes exclusive? of those mentioned by law; common
result reduction of obligation which
A: No! In Saura v. DBP, there was a falls under condonation; if it would fall
mutual dissent. This also considered under a totally new obligation, it is
as a mode. The Supreme Court said novation.
that there was a perfected consensual
contract of loan. (mutuum) 1. PAYMENT
Q: Aside from it, what are the other - synonymous with performance.
modes? - May apply to all kinds of
obligation.
A: Death - To the extent of personal
obligation to do. It does not extinguish Rules:
property rights. Eg. Agency – death of
an agent; Partnership – death of a a) As to person who pays.
partner.
19
MOTO-Q NOTES

b) As to whom payment is made. how much can Y ask for
c) Prestation in obligation. reimbursement?
d) Date, time and place.
A: Only 80 thousand, that which
a) person who pays. redounded to the benefit of A.
- Should be called payor, not only Q: If X pays without the knowledge of

debtor, because third persons A, can he compel A to pay?
may pay.
- Not every person under the A: No. He is not subrogated to the
NCC can compel a person to rights of B, hence he cannot foreclose
pay except those who have an the mortgage.
interest and those who by
virtue of stipulation. “consented” – means debtor failed to
object at a reasonable time.
Eg. A is indebted to B. X is a 3rd
person. Q: X had agreement with B without
knowledge of A, can he recover the
Q: Who are those who have interest? payment made?
A: Joint debtors have interest in the A: As long as payment was without

fulfillment of the entire obligation, knowledge, third person shall not be
those who are subsidiary liable. subrogated to the rights of the
(guarantors, mortgagors, pledgors.) creditor. (1236-1237)
Q: If a third person pays, if he has Art. 1236. The creditor is not bound to
interest, what happens? accept payment or performance by a
third person who has no interest in
A: Subrogation. the fulfillment of the obligation, unless
there is a stipulation to the contrary.
- If X is a guarantor, Y is a
mortgagor who secured debt, Y Whoever pays for another may
pays, he shall be subrogated to demand from the debtor what he has
the rights of B and can exercise paid, except that if he paid without
right of a creditor. the knowledge or against the will of
- if X pays B, obligation of A to B the debtor, he can recover only
is extinguished but accessory insofar as the payment has been
obligations are not beneficial to the debtor. (1158a)
extinguished. It subsists that is
why X can still foreclose the Art. 1237. Whoever pays on behalf of
mortgage. the debtor without the knowledge or
against the will of the latter, cannot
Q: A is indebted to B. X pays 100 compel the creditor to subrogate him
thousand to B for A’s debt. Does A in his rights, such as those arising
have a right to recover from A and can from a mortgage, guaranty, or
he have a right of foreclosure? penalty. (1159a)
A: It depends. If A consented, he has Q: X paid B without any intention of

the right. being reimbursed. What if X
demanded the return after one week?
Q: If before X pays, A partially paid 20
thousand, X paid entire 100 thousand, A: Indirect Donation. As far as
payment, it is valid and binding.
20
MOTO-Q NOTES

- Payor must have the capacity to A: Obligation is extinguished.
alienate the thing or has free disposal.
Q: A is indebted to B. However, B dies
b.) as to the person to whom payment and is survived by Y. Even if A paid Y,
is made. can it be invalidated?
- called payee; normally the creditor. A: Yes. If the payment was not made
in good faith, such as when there is a
CASE: Arañas v. Tutaan pending action to declare Y
incapacitated.
- creditor does not have to be a
party. A creditor may be any Q: A is indebted to B. B assigned the
person who has the right to credit to X. May it extinguish the
compel the performance. assignment?
Eg. A is indebted to B. But the real A: Yes.

payment should be given to Y; even if
A pays B, Y can still compel A to pay. c.)Prestation in obligation
- there is also payment to a - identity of the obligation; consider

person authorize to receive the purpose.
payment; the law may provide.
Eg. Payment to a sheriff, General Rule: A partial performance is
executors and administrators. non-compliance.
Q: May payment to a wrong person Except:

extinguish obligation?
1. The parties expressly stipulate.
A: Gen. rule: No! Except: 1. if - Subject to different terms –
payment redounded to the benefit of integrity of the prestation.
B. Otherwise, obligation is not Rescission is not a remedy if
extinguished. there is substantial
performance.
Q: Who has the burden to prove?
Case: JM Tuason v. Javier
A: No need to prove if: 1. it was
ratified by the creditor; 2. principle of A obligated himself to deliver 100
estoppel; 3. if the person to whom sacks to B for 1000 pesos. He only
payment made acquired rights of delivered 95.
creditor after the payment.
Q: How much can he recover?
Q: Are there any more exceptions?
A: Amount or value delivered, less
A: Yes. If payment was made in good damages.
faith to a person in possession of the
credit, not a mere possession of the As to kind of obligation:
instrument.
Q: A is obliged to B. He paid Japanese
Q: X (in possession of PN) demanded yen. Is it valid?
payment from A when the promissory
note became due and demandable, A
A: Yes. RA 8183. Payment may be
paid x in good faith.
made in any currency as long as
21
MOTO-Q NOTES

stipulated. Before: RA 529-payment 500k compared to the present
not in Philippine currency is prohibited. because of devaluation, hence he
claimed 2M base on Art.1250.
Q: Can creditor be compelled to accept
check? Art. 1250. In case an extraordinary
inflation or deflation of the currency
A: No. As stated in New pacific timber stipulated should supervene, the value
v. Señeris. Creditor may refuse to of the currency at the time of the
accept check. establishment of the obligation shall
be the basis of payment, unless there
Before: If Manager or Cashier’s check, is an agreement to the contrary. (n)
it is deemed as cash.
Is his contention correct?
Q: If partly check and partly cash?
A: No. As decided in the Philippine
A: Creditor may refuse. Except if Pipe Foundry case, the supreme court
stipulated. In Article 1249, it is said “as far as Philippine experience is
extinguished if encashed. concerned, there has never been an
extraordinary inflation as experienced
by Germany in 1920-1923. Art.1250
Art. 1249. The payment of debts in
may only be invoked if the source is a
money shall be made in the currency
contract. In Velasco v. Meralco, Article
stipulated, and if it is not possible to
1250 may not be invoked because the
deliver such currency, then in the
source is a quasi delict.”
currency which is legal tender in the
Philippines.
d.)date, time, place
The delivery of promissory notes
payable to order, or bills of exchange Determinate – place where obligation
or other mercantile documents shall was constituted.
produce the effect of payment only
when they have been cashed, or when Generic – domicile of the debtor.
through the fault of the creditor they
have been impaired. SPECIAL FORMS OF PAYMENT
In the meantime, the action derived 1. Payment by Cession and decion

from the original obligation shall be en pago.
held in the abeyance. (1170)
Art. 1255. The debtor may cede or
Q: If check is stale, will the obligation assign his property to his creditors in
be extinguished? payment of his debts. This cession,
unless there is stipulation to the
A: No. contrary, shall only release the debtor
from responsibility for the net
Q: When is payment thru check proceeds of the thing assigned. The
extinguish obligation? agreements which, on the effect of the
cession, are made between the debtor
and his creditors shall be governed by
A: When it is encashed or through
special laws. (1175a)
fault of the debtor when it had been
impaired.
 conventional assignment
Q: B owes A 1M in 1968. A claimed
that in 1968, the value of 1M is only
 requires consent of both parties.
22
MOTO-Q NOTES

CASE: Filinvest v. Philippine Acetylene As to effect of General Rule:
payment: Extinguish only as
- no dation en pago, the delivery to the extent of the
of the case was not consented General rule: proceeds of the
to. Extinguished only sale of creditor.
- Filinvest was only an agent; as to the extent of
there was no transfer of value delivered. Exception: Unless
ownership. there is an express
Exception: unless agreement.
Dacion en pago Cession stipulated upon
that anything
As to transfer of delivered shall
ownership: extend the entire
obligation.General
The delivery results Rule: governed by
to the transfer of law on sales only if
No transfer of
ownership, same is the pre- existing
ownership, creditor
true with obligation is in
only given the
application of money.
power to sell.
payment.
Art. 1245. Dation
in payment,
whereby property
is alienated to the
creditor in
satisfaction of a
debt in money,
shall be governed
by the law of sales.
(n)
Q: If A is to deliver a carabao, but

instead gave a refrigerator. Is it dacion
en pago on sale?
A: No. It is novation. The pre-existing

obligation is not in money.
CASE: Citizens Surety v. CA
23
MOTO-Q NOTES

- no dation en pago if at the time 3. Payment by cession:
of the transaction there is no
obligation. 1255: voluntary assignment requires
- All transactions were executed consent of the creditor.
within one day. The indemnity
agreement that they will be Art. 1255. The debtor may cede or
liable upon default on payment assign his property to his creditors in
of surety bond, hence no payment of his debts. This cession,
obligation yet on that day. unless there is stipulation to the
- SC: Dation en pago may contrary, shall only release the debtor
pertain to delivery of from responsibility for the net
rights/things. proceeds of the thing assigned. The
agreements which, on the effect of the
2. Application of payments: cession, are made between the debtor
and his creditors shall be governed by
Problem: X is the creditor. A owes him, special laws. (1175a)
100k, 50k, 20k and 10k.
Rules: Q: How will the proceeds of the sale

be applied?
1. debtor ha the right to designate to
which payment is to be applied. A: 1. based on stipulation. 2. without
agreement; rules in concurrence and
a.) no partial payment. preference of credits shall be applied.
b.) to that which is due and - debtor must deliver his

demandable, except if payment was property to creditor.
made for the benefit of the debtor. - Resorted to by debtor who is
experiencing financial difficulty.
c.) If the debt is interest bearing.
4. Tender of payment and
2.) if debtor fails to designate, the consignation:
creditor may designate.
- tender of payment alone shall
3.) if both failed to designate: never extinguish the obligation.
- Actual offering of the amount
or thing.
Note: provision for application of
payment is not applicable here.
1256 – the only one scenario when
tender of payment should be made,
2. that which is most onerous.
when creditor refuses to accept
3. Proportionate application
without just cause.
(provided, it is of the same
nature and burden) – if the
debts are of different amounts. Art. 1256. If the creditor to whom
tender of payment has been made
refuses without just cause to accept it,
Q: How do we determine what is the
the debtor shall be released from
most onerous?
responsibility by the consignation of
the thing or sum due.
A: There is no hard and fast rule. We
must consider factors and
Consignation alone shall produce the
circumstances.
same effect in the following cases:
24
MOTO-Q NOTES

(1) When the creditor is absent Soco v. militante – 2 notices per
or unknown, or does not amount due.
appear at the place of
payment; Q: When will obligation be
extinguished?
(2) When he is incapacitated to
receive the payment at the A: When creditor accepted, even if
time it is due; debtor refuses, may extinguish after
consignation, it retroacts from the
(3) When, without just cause, time of delivery.
he refuses to give a receipt;
Q: The obligation was due in January,
(4) When two or more persons 1998. There was a tender of payment
claim the same right to collect; in January 1, 2000 but was refused. In
January 2, 2004, there was
(5) When the title of the consignation. In January 2, 2007 there
obligation has been lost. was a court ruling. Is the debtor liable
(1176a) to pay interest?
CASE: Soco v. Militante: A: Yes. If from January 1998 he was

already in delay, up to consignation if
Q: When may Tender of payment be court ruled to be valid. If the
made judicial? consignation was ruled by the court to
be invalid, the interest must be from
January 1998 till court ruled.
A: No. Tender of payment by its
nature is extra judicial.
According to Sir: however, mora
accipiendi.-delay of the creditor to
Illustration:
accept. Debtor may release himself
from the obligation by the
Q: There was a sale with right to consignation of the thing.
repurchase. Seller a retro refuses to
accept money, an action was filed.
Q: Can debtor withdraw the
Plaintiff said that he is not obliged
consignated money?
because there is no tender of payment
required. Is his contention correct?
A: Yes. If the withdrawal is made
before acceptance of creditor and
A: Yes. No tender of payment is
before court ruled on the consignation.
required. No consignation is required
in sale with right to repurchase.
- if creditor accepted and court
ruled, no withdrawal. If no
Q: Is notice required by consignation?
ruling yet, it may be withdrawn
if creditor accepted.
A: Yes. - Revival without consent of
accessory – creditor is
Q: 2nd notice after consignation is released.
required?
A: Yes. Required but it does not need

to come from the debtor, it is in the LOSS
form of summons.
When not valid?
25
MOTO-Q NOTES

- when it goes out of commerce. materials. A filed an action. May court
- Prohibited by law. grant the action?
- Impossibility of performance.
A: No. Because the event of increase
Q: To deliver shabu? Is the obligation of price is foreseen. 1267 is not
extinguished? applicable.
A: No. This is not a valid obligation

therefore no extinguishment.
CASE: Occeña v. Jacobsen
Q: If the thing is lost, who has the
burden to prove? - court can’t change agreement
of the parties.
A: depends on who is in possession of
the thing at the time of the loss. 1267 – only difficulty not impossibility.
However, this rule is not absolute
when the loss occurred during the
Art. 1267. When the service has
happening of a calamity, like typhoon.
become so difficult as to be manifestly
beyond the contemplation of the
Read: Art 1265 and Art 1262. parties, the obligor may also be
released therefrom, in whole or in
Art. 1265. Whenever the thing is lost part. (n)
in the possession of the debtor, it shall
be presumed that the loss was due to 1264 – depends on the intention of
his fault, unless there is proof to the the parties.
contrary, and without prejudice to the
provisions of article 1165. This
Art. 1264. The courts shall determine
presumption does not apply in case of
whether, under the circumstances, the
earthquake, flood, storm, or other
partial loss of the object of the
natural calamity. (1183a)
obligation is so important as to
extinguish the obligation. (n)
Art. 1262. An obligation which
consists in the delivery of a
CONDONATION OR REMISSION
determinate thing shall be
extinguished if it should be lost or
“donation of a credit”
destroyed without the fault of the
debtor, and before he has incurred in
delay. 1272 – refers to “private document
only” . If public document, it needs
many copies.
When by law or stipulation, the obligor
is liable even for fortuitous events, the
loss of the thing does not extinguish Art. 1270. Condonation or remission is
the obligation, and he shall be essentially gratuitous, and requires
responsible for damages. The same the acceptance by the obligor. It may
rule applies when the nature of the be made expressly or impliedly.
obligation requires the assumption of
risk. (1182a) One and the other kind shall be
subject to the rules which govern
Q: In an agreement between A and B inofficious donations. Express
for construction of house, proceeds condonation shall, furthermore,
shall be equally distributed from the comply with the forms of donation.
sale. B didn’t give his share in the (1187)
house because of the high price of
26
MOTO-Q NOTES

Art. 1271. The delivery of a private CONFUSION OR MERGER OF
document evidencing a credit, made RIGHTS
voluntarily by the creditor to the
debtor, implies the renunciation of the Art. 1275. The obligation is
action which the former had against extinguished from the time the
the latter. characters of creditor and debtor are
merged in the same person. (1192a)
If in order to nullify this waiver it
should be claimed to be inofficious, Q: May it be made through agreement
the debtor and his heirs may uphold it of parties?
by proving that the delivery of the
document was made in virtue of A: May be. It depends upon the
payment of the debt. (1188) intention. Ex. Merger of rights of a
corporation.
Art. 1272. Whenever the private
document in which the debt appears is Q: By operation of law, can there be
found in the possession of the debtor, confusion?
it shall be presumed that the creditor
delivered it voluntarily, unless the
A: By succession, creditor died, debtor
contrary is proved. (1189)
is son or daughter.
Q: X owes A 1M, he lends the same

Q: debtor died, creditor is an heir, can
amount to A. Is there condonation?
confusion take place?
A: Maybe, if payment of interest is

A: there can be, when there is
remitted.
acceptance.
Q: If employment of interest is found

Q: A is indebted to B. The debt is
in debtor X? Is it condonation?
secured by a mortgage by M on B. Can
there be a confusion of B and M?
A: No.
A: No.
Q: If employment of interest is found
in debtor’s possession, is there
Q: If there is an agreement?
necessarily condonation?
A: No. It will be subrogation. If B
A: No, may be through other modes,
assigned his rights to M, but still
like payment.
obligation is not extinguished.
Q: A is the creditor of 100k to B. X, a

Q: Will confusion result in total
third party, pledged his car to B. May
extinguishment?
the pledged car be used as
condonation?
A: No. In cases of joint obligations, in
1277.
A: Determine first the status of X.
Whether he is the owner or for what
the pledge is for. Art. 1277. Confusion does not
extinguish a joint obligation except as
regards the share corresponding to
Then state the accessory v. principal.
the creditor or debtor in whom the
Not X. Because A and B are the parties
two characters concur. (1194)
in the principal obligation; there is
only a presumption of X on part of the
accessory obligation of the pledge.
27
MOTO-Q NOTES

COMPENSATION Q: In partial compensation, is debt
totally extinguished?
Q: If 2 or ore persons are debtors and
creditors, will there be compensation? A: No. Extinguished as to at least one
debt.
A: No, the requirements must be
complied with. – Art. 1279 Q: In compensation, how many debts
are involved?
Art. 1279. In order that compensation
may be proper, it is necessary: A: 2 or more debts.
(1) That each one of the Q: Which debts will be extinguished?

obligors be bound principally,
and that he be at the same A: Less onerous amount.
time a principal creditor of the
other; Q: A owes B the following, 50k, 100k,
75k, 225k, 100k. B owes A 100k. How
(2) That both debts consist in a many of the debts will be totally
sum of money, or if the things extinguished?
due are consumable, they be of
the same kind, and also of the A: 2 debts of A and debt of B.
same quality if the latter has
been stated;
Q: A paid 100k to B. A has the
following debts to B; 50k, 25k, 10k.
(3) That the two debts be due; How many debts are extinguished?
(4) That they be liquidated and A: 3 debts are extinguished. Partial

demandable; compensation because there is still a
balance.
(5) That over neither of them
there be any retention or Q: How many kinds of compensation
controversy, commenced by are there?
third persons and
communicated in due time to
A: 4: legal, conventional, facultative,
the debtor. (1196)
judicial.
Q: In compensation, is it a reciprocal
Q: In some books, there are three;
obligation?
facultative is removed, why?
A: Not necessarily.
A: It is a modification only of
conventional.
Q: When is it a reciprocal obligation?
Q: What are the other names of
A: Reciprocal obligations arise from a compensation?
single transaction; contract of sale.
A: set off or counterclaim.
Q: What about legal compensation?
Will it take place in reciprocal
Q: Not really the same because?
obligations?
A: Set-off and counterclaim must be
A: Not necessarily. In reciprocal
invoked in courts of law.
obligations, there can be none.
28
MOTO-Q NOTES

Q: What distinguishes legal from A: No. they are not debtors and
conventional? creditors to each other. The law
requires that they are principally
A: As to requirements, not the same. bound.
In legal, all requirements should be
present, in conventional, not CASE: Sycip V. CA
necessary that all requirements are
present. i.e. different amounts or SC: debtors and creditors should be
objects; one debt is not yet due. debtors and creditors in their own
rights.
Q: Give an example of facultative.
CASE: Francia v. IAC
A: Support. Invoked by the one who
claims for support. SC: There is no compensation when
Francia paid real property tax to the
Q: A opened a checking account with a LG of Pasay. The national government
bank, he borrowed money with the was the one who expropriated.
same bank. A failed to pay, Bank
invoked compensation. A said that his - compensation takes place if
checking account is depositum. Is his debt became due at the same
claim tenable? time.
A: No. In a checking account, the bank Q: Monetary debts must arise from
is the creditor, A is a debtor governed contracts?
by mutuum, hence compensation can’t
take place. A: Not necessarily. Eg. Attorneys fees
Q: When is there a deposit? Q: Are all monetary debts subject to

compensation?
A: If the delivery is only for safe
keeping. A: No. Custom duties. (Francia v. IAC)
Q: Other kind of facultative. CASE: International Corp. Bank v. IAC
A: In case of commodatum, bailor can Facts: Villanueva applied a loan from

invoke. In a civil case/penal, invoke by ICB for 50M. Only 1M was delivered
injured party. by the bank. The loan was secured by
a mortgage, which is 110 M asset.
CASE: PNB v. Acero Villanueva deposited 1M to ICB. He
invoked compensation.
PNB invoked: No legal compensation,
the credit line was used, lawyer of SC: Since there was a question on the
PNB claimed that credit line was foreclosure sale, there was no legal
shown to Acero. compensation.
- you don’t prove a fact by

showing it to the other party.
CASE: Solinap v. del Rosario
Q: A is indebted to B with G as
guarantor. Can G invoke
Facts: The lessee did not pay rentals.
compensation?
He invoked that the lessor had made
advancements.
29
MOTO-Q NOTES

SC: No legal compensation because A: 50k. He must ask B for the other
alleged debt were being questioned in 50k.
the estate proceedings.
Q: In the same case, the debt is
- no legal compensation if debts demandable on May 1, 2002. The
arise from depositum, credit was assigned to on March 1,
commodatum, civil liability 2002. May D validly demand it on the
arising from crime. same date?
Q: A is the creditor of B worth 100k A: No. The obligation is not yet due.
secured by a mortgage. B gave 50k. If
there is a partial compensation, will Q: A owes B 100k due and
the mortgage be extinguished? demandable on May 1, 2003. B
assigned it to X on April 1, 2003. A
A: Not necessarily. It depends which made the following payments to B:
debt is most onerous. 20k-March 1, 2003; 30K-June 1, 2003;
40k-decemeber 1, 2003. On May 1,
Q: If there is total compensation, will 2003, how much may X validly
the mortgage be extinguished? demand?
A: Yes. Mortgage will be extinguished. A: It depends: If A had knowledge of

assignment of X and he consented
Q: B is indebted to A for 100k which is with reservation, X may claim 90k, if
interest bearing. B gave 50 k to A. Will he consented without reservation,
there be payment of interest even 100k. If it was without knowledge of
after payment of compensation? A, X may claim 10k.
A: Depends. If there is total NOVATION

compensation, no interest will be paid.
If partial, depends on whose debt is I. Subjective/Personal
bigger. II. Objective/Real
III. Mixed
Q: Will partial compensation be
extinguished by prescription? Art. 1291. Obligations may be
modified by:
(1) Changing their object or
A: Yes. Partial compensation does not
principal conditions;
toll the running of the period.
(2) Substituting the person of

ASSIGNMENT OF THE CREDIT
the debtor;
Q: On January 1, 2002, A owes B
(3) Subrogating a third person
100k. B assigned the credit to C on
in the rights of the creditor.
June 1, 2002. Can C demand payment
(1203.)
from A?
I. Subjective:
A: Determine when the assignment
was made; if made after both
obligation was due and demandable, A. Active – third person is subrogated
there will already be compensation. in the rights of the creditor.
Q: What if A paid B 50k in May 1, B. Passive – substitution of the person

2002? How much can C claim? of the debtor.
30
MOTO-Q NOTES

* other classifications: A: 1. Expromission – substitution was
made without knowledge or against
1. express or implied. will of original debtor.
2. extinctive. 2. delegacion – substitution was

made with knowledge of
3. modificatory. debtor.
Eg. Prescription Q: A is indebted to B. A mortgaged to

B his property worth 100k. B is
indebted to C, 100k also. If A does not
Q: In ACTIVE SUBJECTIVE, operative
pay, can C foreclose the mortgage?
word is subrogated. When does this
happen?
A: No. He was not subrogated.
A: 1. by agreement (express);
DELEGACION – there is already
subrogation, therefore, C may
2. art. 1302 – legal subrogation.
foreclose the mortgage.
a. Third Party pays creditor without
 if there is
consent of debtor.
already
novation
b. TP who has an interest pays
through
creditor with or without consent of
delegacion, no
debtor.
consent of
original debtor
c. Creditor of debtor pays creditor of is void.
the same debtor.  If payment
consented to
Art. 1302. It is presumed that there is by A, no
legal subrogation: novation,
subrogation.
(1) When a creditor pays (1236-1237)
another creditor who is
preferred, even without the Art. 1236. The creditor is not bound to
debtor's knowledge; accept payment or performance by a
third person who has no interest in
(2) When a third person, not the fulfillment of the obligation, unless
interested in the obligation, there is a stipulation to the contrary.
pays with the express or tacit
approval of the debtor; Whoever pays for another may
demand from the debtor what he has
(3) When, even without the paid, except that if he paid without
knowledge of the debtor, a the knowledge or against the will of
person interested in the the debtor, he can recover only
fulfillment of the obligation insofar as the payment has been
pays, without prejudice to the beneficial to the debtor. (1158a)
effects of confusion as to the
latter's share. (1210a) Art. 1237. Whoever pays on behalf of
the debtor without the knowledge or
Q: In PASSIVE SUBJECTIVE, operative against the will of the latter, cannot
word is substitution. When does this compel the creditor to subrogate him
happen? in his rights, such as those arising
31
MOTO-Q NOTES

from a mortgage, guaranty, or SC: Even natural obligations may be
penalty. (1159a) subject of novation.
Effect of Insolvency of new debtor: Q: X is the creditor of A, B and C for

10M. After 3 months, C paid 10M to X
- If C becomes insolvent after without the knowledge of A and B.
substitution, A is no longer After 6 months A and B paid 7M to X.
liable. May A and B recover the 7M from X?
- If C was already insolvent at
the time of substitution, A can’t A: if voluntarily given, the creditor can
be held liable if no knowledge retain.
except if he acted in Bad Faith
or such insolvency is of public According to sir: It is actually a
knowledge. payment by mistake therefore solution
indebiti.
II. Objective
 In natural
A. Change in object – no problem, obligations,
eg. Money to celphone payor knows he
(art.1245) can’t be
compelled to
Art. 1245. Dation in payment, pay but
whereby property is alienated to the nonetheless
creditor in satisfaction of a debt in pays.
money, shall be governed by the law
of sales. (n) II. CONTRACTS
B. Change in principal obligation:
- while all contracts are
agreements, not all agreements
a. express are contracts.
b. implied
Prohibited:
* if 2 obligations can’t stand together,
there is novation, there is
- Auto contracts – a person
incompatibility.
contracts himself.
- article 1491.
* there was novation in FOA and the
Villar case.
Art. 1491. The following persons
cannot acquire by purchase, even at a
There was a lease contract entered public or judicial auction, either in
into for 5 years. Another contract was person or through the mediation of
entered into for 10 years. The another:
contention is that the 2nd agreement is (1) The guardian, the property
void, therefore novation is void. of the person or persons who
may be under his
CASE: Ronquillo v. CA guardianship;
Facts: The obligation was due in 1952, (2) Agents, the property whose
In 1967, debtor acknowledge debt and administration or sale may
promised to pay. Since it is now have been entrusted to them,
transformed to a natural obligation, unless the consent of the
will the action for novation prosper? principal has been given;
32
MOTO-Q NOTES

(3) Executors and 1. Autonomy – freedom of
administrators, the property of contract/liberty of contract.
the estate under
administration; Art. 1306. The contracting parties may
establish such stipulations, clauses,
(4) Public officers and terms and conditions as they may
employees, the property of the deem convenient, provided they are
State or of any subdivision not contrary to law, morals, good
thereof, or of any government- customs, public order, or public policy.
owned or controlled (1255a)
corporation, or institution, the
administration of which has
been intrusted to them; this
provision shall apply to judges Void waiver:
and government experts who,
in any manner whatsoever,
Example:
take part in the sale;
a. for agent to waive accounting.
(5) Justices, judges,
prosecuting attorneys, clerks of
superior and inferior courts, b. pactum commisorium
and other officers and
employees connected with the c. partnership, exclusive partner from
administration of justice, the sharing profits – pactum aliena
property and rights in litigation
or levied upon an execution mortgage – pactum aliendro
before the court within whose
jurisdiction or territory they
exercise their respective
functions; this prohibition d. Public policy:
includes the act of acquiring by
assignment and shall apply to CASE: Cui v. Arellano
lawyers, with respect to the
property and rights which may
- scholarship in law school must
be the object of any litigation
not be contrary to public policy.
in which they may take part by
virtue of their profession.
CASE: Saura v. Sandico
(6) Any others specially
- Escalation clause – ex.
disqualified by law. (1459a)
Construction contracts.
Creditor has right to demand a
ELEMENTS OF A CONTRACT: higher compensation upon the
happening of a contingency.
Natural – implied warranties. Ex. Contract of loan (interest).
- Acceleration clause –
Essential – Consent, Object, stipulation whereby in an
Consideration obligation to pay on
installment, balance shall
Accidental – payment of interest. automatically become due and
(compensatory) demandable when debtor fails
to pay.
CHARACTERISTICS:
33
MOTO-Q NOTES

Q: Will an escalation clause be valid the parties are bound not only to the
when there is no descalation clause? fulfillment of what has been expressly
stipulated but also to all the
A: It is relevant only in contracts of consequences which, according to
loan; only effect of circular issued by their nature, may be in keeping with
the Central Bank provided the good faith, usage and law. (1258)
escalation clause only happens once a
year. Q: When is a contract obligatory?
2. Consensuality: A: Upon perfection of the contract.
Art. 1306. The contracting parties may Q: When is a contract perfected?

establish such stipulations, clauses,
terms and conditions as they may A: It depends if it is consensual
deem convenient, provided they are (concurrence between the offer
not contrary to law, morals, good and acceptance), real (like deposit,
customs, public order, or public policy. pledge, commodatum requires
(1255a) delivery), formal/solemn (requires
compliance with certain formalities
CASE: Republic v. PLDT prescribed by law).
- to compel PLDT to enter into 5. Relativity:

inter- connection agreements is
actually expropriation. Art. 1311. Contracts take effect only
between the parties, their assigns and
Validity of contracts of adhesion: heirs, except in case where the rights
and obligations arising from the
CASE: Ong Yu v. CA contract are not transmissible by their
nature, or by stipulation or by
- plaintiff bought ticket from PAL, provision of law. The heir is not liable
eventually he lost his baggage. beyond the value of the property he
In the ticket it contained a received from the decedent.
waiver of a right.
If a contract should contain some
SC: waiver of a right in a contract stipulation in favor of a third person,
of adhesion are not considered he may demand its fulfillment
gladly by the Supreme Court. provided he communicated his
acceptance to the obligor before its
revocation. A mere incidental benefit
3. Mutuality: goes to validity and
or interest of a person is not
compliance.
sufficient. The contracting parties
must have clearly and deliberately
Art. 1308. The contract must bind conferred a favor upon a third person.
both contracting parties; its validity or (1257a)
compliance cannot be left to the will of
one of them. (1256a)
General rule: Contracts take effect
only between parties, their assigns
 termination by mere notice – valid. and heirs.
4.Obligatory: Exceptions:
Art. 1315. Contracts are perfected by 1. creation of real rights

mere consent, and from that moment
34
MOTO-Q NOTES

Q: A mortgaged
his land to B and CASE: Bonifacio bros. v. Mira
eventually A sold it
to C. Can C be - enforcement of insurance.
bound by the
mortgage?
A: Yes. CLASSIFICATION OF CONTRACTS:
2. Interference by a third party. A: Degree of Dependence

1) principal (agency, partnership)
2) accessory (Real Estate
Art. 1314. Any third person who Mortgage, Chattel Morgtage,
induces another to violate his contract Pledge, Antichresis)
shall be liable for damages to the example: crop loan scenario
other contracting party. (n)
Requisites:
B. As to Perfection
1) Real (Pledge, Commodatum,
- existence of a valid contract Mutuum. Deposit)
- knowledge of contract by third 2) Formal (antichresis; donation)
persons C. Purpose
- interference by third persons D. As to cause
without legal justification or 1) onerous
excuse. 2) pure beneficience
a) gratuitous
Q: A has a contract with GMA. b) lucrative
Subsequently, A entered a contract »liberality id the consideration
with ABS-CBN. A was in bad faith. May 3) remuneratory
ABS CBN be liable?
» seller (payment); buyer
(deliver)
A: No. To be liable there must be
E. Risk of Fulfillment
malice impugned. Third Party liability
1) Aleatory
does not impugn liability of debtor who
violated. » sale of hope – emptio spei
» risk of fulfillment
3. Contracts in fraud of creditors: » insurance
»life annuity
Q: A is the debtor of B. A sold his 2) commutative
property to C. May B rescind the F. Name and Designation
contract between A and C? 1) Nominate
2) innominate
A: Yes. G. As to subject matter
1) Things
4. Stipulation pour atrui – stipulation 2) Right
in favor of third persons. It is not the 3) Services
main agreement.
PAQIII/Oct2007
CASE: Kaufman v. PNB
CASE: Florentino v. Encarnacion III. SALES
- acceptance may be implied. - there must be an agreement to

transfer ownership.
35
MOTO-Q NOTES

in conditional sale, there is a
Q: A sold goods to B for purpose of reservation of ownership.
resale, Y bought goods from X for
personal consumption. What law shall Art. 1458. By the contract of sale one
govern this contract? of the contracting parties obligates
himself to transfer the ownership and
A: NCC and Code of Commerce, to deliver a determinate thing, and the
A-B commercial sale other to pay therefor a price certain in
Y-X civil sale money or its equivalent.
»now no distinction, NCC governs A contract of sale may be absolute or

conditional. (1445a)
Characteristics:
1. principal
2. bilateral-imposes obligations on Q: Conditional sale vs. contract to sell
two parties
3. nominate A: In conditional sale, ownership
4. onerous- always! otherwise depends on the happening of condition
donation and it take place by operation of law.
5. commutative- emptio spei In contract to sell, ownership passes
after full payment passes. There is no
Subject matter: automatic transfer, buyer have right to
» things and rights, service is not ask execute final deed.
included
Q: A delivered receipt to B “as partial
As to object: payment to my car”, received by D,
a. movable balance payable at the end of the
b. immoxable month, signed by A.
Is this contract pertaining to a
Concepts involve: contract to sell?
a) Recto Law- personal prop by
installment A: NO, there is already transfer of
b) Maceda- immovable ownership, there was no reservation
c) double sale as to ownership.
d) Statute of Frauds
dacion en pago vs. contract of sale
Q: As to WON tangible/intangible? »dacion en pago is a mode of
extinguishing obli, it is a pecial form of
A: corporeal (things); incorporeal payment; while contract of sale is a
(rights) source of obli.
Q: relevant as to what concept?
Q: Kobe & companion B is to buy
A: delivery shoes, B’shoes to be delivered, upon
payment, Kobe ordered a particular
Q: As to validity? shoe.
A: void, unenforceable, rescissible, A: Kobe- contract of piece of work

voidable B- contract of sale
»contract for a piece of work under
Q: 1458 2nd par: provides for? (Aticle1467) is also called
Massachusetts Rule
A: absolute/conditional sale:
» In an absolute sale there is an Art. 1467. A contract for the delivery
automatic transfer of ownership while at a certain price of an article which
36
MOTO-Q NOTES

the vendor in the ordinary course of Guardian- absolute
his business manufactures or procures Agent- administration/sale
for the general market, whether the
same is on hand at the time or not, is Q: A inherited property from father to
a contract of sale, but if the goods are transfer property; executor to pay
to be manufactured specially for the 700k, status?
customer and upon his special order,
and not for the general market, it is a A: valid; Assignment of rights which A
contract for a piece of work. (n) can validly sell, not part of the estate
under Y’s administration.
Q: A to deliver his car to B, B to give A Q: a sued B for recovery of a parcel of

his watch plus money, 100k. What law land, hired lawyer, one year after
should govern? filing, entered into a contract of sale
with B involving the land.
A: 1st. depends on manifest intention
of parties. A: not valid. object of sale is subject
Barter = value of thing given as a part to litigation-actually depends. WON
of consideration > money/its the case is still pending.
equivalent; if value of watch >100k
Sale- if same value Q: 1491 status of contracts
Q: A granted B exclusive right (right to
sell within a specific area) to sell A:GR: voidable
maong pants to Isabela, before B Except: agents- subject to ratification
could sell, his store was burned, can B Par.1,2,3 voidable- can be ratified
be compelled to pay? »private interests is involved.
4,5,6 void
A: contract of sale bec. There is a 1,2,3 can be ratified because after
stipulation. B is a distributor/dealer lapse of incapacity, another contract
99.99% » Quiroga vs. Parsons- “will maybe entered into Rubias VS. Materia
supply the bed and pay price within a Wolfgang vs. Martinez
certain period”. No obli to remit the
price, no stipulation. Art. 1491. The following persons
cannot acquire by purchase, even at a
ELEMENTS OF SALE: public or judicial auction, either in
1. Consent person or through the mediation of
2. Price- consideration as to another:
whom? The seller. (1) The guardian, the property
Buyer- acquisition of ownership of the person or persons who
over the thing. may be under his
3. Object guardianship;
»Contracts which are void: Absolutely (2) Agents, the property whose
simulated contract (parties voluntarily administration or sale may
entered) have been entrusted to them,
ex. To defraud creditors, wife hide unless the consent of the
property from husband, buyer go principal has been given;
abroad.
(3) Executors and
relatively simulated- why? To reduce administrators, the property of
tax liability, circumvent law on legitime the estate under
administration;
SPECIFIC PERSONS PROHIBITED
TO ENTER INTO SALE
37
MOTO-Q NOTES

(4) Public officers and notary public (where pledgor can go to
employees, the property of the NP to have the thing sold).
State or of any subdivision
thereof, or of any government- Art. 1505. Subject to the provisions of
owned or controlled this Title, where goods are sold by a
corporation, or institution, the person who is not the owner thereof,
administration of which has and who does not sell them under
been intrusted to them; this authority or with the consent of the
provision shall apply to judges owner, the buyer acquires no better
and government experts who, title to the goods than the seller had,
in any manner whatsoever, unless the owner of the goods is by
take part in the sale; his conduct precluded from denying
the seller's authority to sell.
prosecuting attorneys, clerks of Nothing in this Title, however, shall
superior and inferior courts, affect:
employees connected with the (1) The provisions of any
administration of justice, the factors' act, recording laws, or
property and rights in litigation any other provision of law
or levied upon an execution enabling the apparent owner of
before the court within whose goods to dispose of them as if
jurisdiction or territory they he were the true owner
exercise their respective thereof;
functions; this prohibition
includes the act of acquiring by (2) The validity of any contract
assignment and shall apply to of sale under statutory power
lawyers, with respect to the of sale or under the order of a
property and rights which may court of competent jurisdiction;
be the object of any litigation
(3) Purchases made in a
virtue of their profession.
merchant's store, or in fairs, or
markets, in accordance with
(6) Any others specially the Code of Commerce and
disqualified by law. (1459a) special laws. (n)
Q: If both parties are capacitated to

give consent, contract of sale valid? Q: contract of sale involving alien.
A: not necessarily because consent of A: depends; if private agricultural, if

one might had been vitiated. he is seller, valid. If he is the buyer,
GR: NO. XPN: former natural born
Q: A person sold a thing to another in citizen.
representation of another person
without authority, status? Q: All matters could be a valid subject
matter of sale.
A: unenforceable
A: every matter that can be a subject
Q: can it be valid? matter of contracts in general can be
subject matter of sale (service, things,
A: Yes, in case of statutory power to and rights). Service CAN NOT BE A
sell 1505; officious manager, executor SUBJECT MATTER OF SALE
38
MOTO-Q NOTES

Q: For rights to be a valid subject
matter. of sale, what are the A: Sale maybe valid. 1465 »
requirements? 1. things (ownership over the thing)
»for rights- conclusively presumed to subject to a resolutory condition may
be valid be the object of the contract of sale.
2. validity of contract requires
A: must be transmissible Consent, Price, Object, the fact that it
is present, sale is valid
Q: Sale of the right, known as?
Art. 1465. Things subject to a
A: assignment of rights resolutory condition may be the object
of the contract of sale. (n)
Q: if deed of assignment
Q: Who will have a better right?
A: sale? Not necessarily, if gratuitous-
donation, maybe dation in payment, or A: GR: A EXCEPT: C was a buyer in GF,
a security arrangement. no knowledge of right of repurchase
and right to repurchase WAS NOT
Q: rights arising from contracts ANNOTATED
A: rights and obligations arising from Q: when is a sale of right perfected?

contracts are transmissible
XPN: NATURE, STIP, LAW (right in A: upon meeting of the minds,
specific partnership property) consensual contract
Q: As to things to be valid subject

matter? Q: does it bind 3rd person?
A: determinate, capable of being A: No, unless in writing (public

determinate instrument)
example: buying a car in the casa
outside commerce of man, corpse Q: if in public instrument, binding
Q: Agreement between A&B, A sell already?
palay that will be harvested this
November. A: only requirement in real property
Q: Status of sale
Q: deed of sale, no price mentioned,
A: sale is valid. valid?
Q: if no palay is harvested, A is liable A: sale maybe valid.
A: GR: Yes, liable, if he was at FAULT, Q: agreement A-B specific car, price is
except if reason was a FE 500k yen.
Q: sale of a sweepstakes ticket A: valid, if so stipulated, 1458 “in

status? money”
A: depends, if winning ticket not void Art. 1458. By the contract of sale one
of the contracting parties obligates
Q: A sold B land with right of himself to transfer the ownership and
repurchase within one year, 3rd month to deliver a determinate thing, and the
sold to C. what if on the 6 th month, A other to pay therefor a price certain in
offered to repurchase land status of money or its equivalent.
sale
39
MOTO-Q NOTES

Art. 1356. Contracts shall be
Q: if not in money, valid? obligatory, in whatever form they may
have been entered into, provided all
A: “its equivalent” the essential requisites for their
validity are present. However, when
Q: can seller compel of lapad? the law requires that a contract be in
some form in order that it may be
A: stipulated, RA8183 (currency valid or enforceable, or that a contract
stipulated) repealed RA 529 (only in be proved in a certain way, that
philippine currency) requirement is absolute and
indispensable. In such cases, the right
Q: why RA 529-because of dollar of the parties stated in the following
reserves problem article cannot be exercised. (1278a)
A: at that time, RA 8183, our dollar

reserves improved Q: sale of ballpen 2k worth,valid?
Enforceable?
Q: sell specific car, amount of two
academic load, 2 semesters status, A: value ‡ worth ‡ price, if sold
valid? to<400
1358- not a requirement for the
A: No! validity of contract
Gross inadequacy of price=lesion - only goes to the
-does not invalidate contract of sale enforceability
-guardian ,more than ¼ of value,
contract of absentee
Art. 1358. The following must appear
Q: A & B-price fixed by 3rd person in a public document:
A: void if 3rd person refuse/unwilling to (1) Acts and contracts which

fix the price have for their object the
creation, transmission,
Q: one peso as value of car modification or extinguishment
of real rights over immovable
A: maybe donation/vitiation of consent property; sales of real property
or of an interest therein a
Q: parties to option agreement governed by Articles 1403, No.
2, and 1405;
A: promisor, promissee;
offeror;offeree optioner,optionee
(2) The cession, repudiation or
»earnest money depends if perfected
renunciation of hereditary
as to object,price
rights or of those of the
SOF-goes only to enforceability not
conjugal partnership of gains;
validity of sale!
1487=1356
(3) The power to administer
property, or any other power
which has for its object an act
Art. 1487. The expenses for the
appearing or which should
execution and registration of the sale
appear in a public document,
shall be borne by the vendor, unless
or should prejudice a third
there is a stipulation to the contrary.
person;
(1455a)
(4) The cession of actions or
rights proceeding from an act
40
MOTO-Q NOTES

appearing in a public Q: Who is estopped?
document.
A: the owner,that the seller has no
All other contracts where the amount authority to sell
involved exceeds five hundred pesos
must appear in writing, even a private c) estoppel by record-also
one. But sales of goods, chattels or technical estoppel
things in action are governed by
Articles, 1403, No. 2 and 1405. -estafa,owner testified that he
(1280a) is not the owner to free the
accused (said authorized even
OPTION not)
 founded upon a consideration- 2)MERCHANT STORE + GF

no withdrawal allowed * unlawful & stolen-with
 if option contract perfected, reimbursement- Art.559
optionee nay file for damages * not unlawful- no recovery-
in case of breach Art.1505
 option money- separated &
distinct from the price Art. 1505. Subject to the provisions of
Q: May a person sell something he this Title, where goods are sold by a
does not own? person who is not the owner thereof,
and who does not sell them under
A: As to validity, Yes! Sale will authority or with the consent of the
always be valid even if not owned; owner, the buyer acquires no better
ownership of the thing has nothing title to the goods than the seller had,
to do with validity unless the owner of the goods is by
his conduct precluded from denying
Q: What do you call a sale where a the seller's authority to sell.
person may sell something he does
not own? Nothing in this Title, however, shall
affect:
A: Statutory Power to sell- 1505
(1) The provisions of any
Q: When should the seller has the factors' act, recording laws, or
right to sell? any other provision of law
enabling the apparent owner of
A: At the time ownership is to pass goods to dispose of them as if
 If seller has no right to sell, he were the true owner
buyer acquires no better right thereof;
SCENARIOS WHEN SELLER HAS (2) The validity of any contract

NO RIGHT TO SELL BUT of sale under statutory power
OWNERSHIP IS TRANSFERRED of sale or under the order of a
TO THE BUYER court of competent jurisdiction;
1) ESTOPPEL (3) Purchases made in a

a) equitable estoppel/estoppel merchant's store, or in fairs, or
in pais markets, in accordance with
-led 3rd person to believe… the Code of Commerce and
b) estoppel by deed-technical special laws. (n)
estoppel
-Art.1434
41
MOTO-Q NOTES

2) SALE BY AN APPARENT unlawfully deprived thereof may
OWNER + GF recover it from the person in
a) recording laws-land possession of the same.
registration decree –(now
involves forgery) If the possessor of a movable lost or
b) factor acts(old term for which the owner has been unlawfully
agency) sale made by deprived, has acquired it in good faith
agents at a public sale, the owner cannot
c) any other law- ex.goods obtain its return without reimbursing
covered by NDT incase of the price paid therefor. (464a)
bearer document when
negotiated Art. 1501. With respect to incorporeal
property, the provisions of the first
Q: If bought from merchant store, is it paragraph of article 1498 shall
possible to recover? govern. In any other case wherein
said provisions are not applicable, the
A: Yes, if buyer is in BF placing of the titles of ownership in
the possession of the vendee or the
Q: In GF,can owner recover? use by the vendee of his rights, with
the vendor's consent, shall be
A: Yes +reimbursement understood as a delivery. (1464)
Q: Public instrument, signed by

CASE:SunBros.vs.Velasco(refrigerator) notary, ownership passes?
*Buyer cannot recover if thing was not A: No,because contrary intention may
lost/stolen appear
Q: lady owned a painting w/c was CASE:MAPALO VS. MAPALO

stolen from her, owner of house
bought from gallery auction, can she Q: If at the time of the signing, buyer
recover? has no knowledge of defect of title of
seller?
A: Yes even w/o reimbursement public
sale ‡ gallery auction A: May not be considered in GF bec.
GF should exist up to the full payment
Q: lady owned a necklace w/c was
stolen can the lady recover? Q: When can seller have possession if
A: Yes, Art. 559 thing not lost/stolen?
Q: If delivery of certificate of A: If he acts as a depositary

ownership there is transfer of
ownership-ex: TCT, OCT Q: When can there be a transfer of
ownership even w/o delivery?
A: Quasi-tradition-what is delivered is
a right -1501 A: None! Ownership is transferred only
upon delivery
Q: How many kinds of delivery are

there?
Art. 559. The possession of movable
property acquired in good faith is A: Two kinds
equivalent to a title. Nevertheless, one 1) Actual/Physical
who has lost any movable or has been 2)Constructive
42
MOTO-Q NOTES

a) symbolica
b) tradition brevi mano Q: lapse of 12 hrs. will it be
c) longa mano reasonable time as acceptance?
d) constitutum
possesorium A: Yes, depending on the
e) formal delivery circumstances i.e. perishable goods
* there should be delivery=
contract + possession delivery of Q: Contract to sell, when does
public instrument=formal ownership pass?
delivery
A: Upon full payment?when?
Q: Delivery where seller still in -execution of final deed of sale
possession?
Q: if thing is lost/destroyed, who is
A: constitutum possessorium liable?
Symbolica- key to the place
where goods are located A: First to consider if due to FE, who
Longa Manu- why cant be is at FAULT
delivered?
-may only be depository GR: if who is at fault, liable
]
INSTANCES WHERE SELLER STILL

THE OWNER DESPITE DELIVERY Q: When can buyer bears loss?
a) conditional sale- A: If buyer is in delay

ownership passess upon *RES PERIT DOMINO
fulfillment of condition bec. XPN: 1) stipulation of reservation
Ownership was reserved of ownership
b) sale/trial approval 2) security title-ownership was
return- ownership is retained only for purposes of
transferred already but the security
buyer may revert title back to -buyer bears the lost
the seller
c) sale on installment- not Lawyers Cooperative Case
necessarily depends on
stipulation DOUBLE SALE
1502(2)- Read instances
when buyer deem to have Q: A sold to B, A sold the same thing
accepted goods to C who took possession
A: depends on who registered it in GF.

Art. 1502. When goods are delivered One must be in GF at the time of the
to the buyer "on sale or return" to possession
give the buyer an option to return the
goods instead of paying the price, the Q: if both A&B did not take
ownership passes to the buyer of possession, did not register, is it
delivery, but he may revest the possible for B to have a better right?
ownership in the seller by returning or
tendering the goods within the time A: if A was in BF; Immovable:
fixed in the contract, or, if no time has Registration of deed of sale in GF
been fixed, within a reasonable time.
(n) Q: A 1st registered w/ knowledge of
2nd sale?
43
MOTO-Q NOTES

A: depends on stipulation &
A: A has a better right, no knowledge reservation of ownership by seller
of defect at the time of sale
Q: As to bill of lading, no delivery to
Q:A 1st register w/ knowledge of 1st buyer when?
sale?
A: on the face of bill of lading
A: 2nd buyer has better right deliverable to the seller
Q: no possession, can 2nd buyer have Q: delivery to the common carrier-

a right? Such as when A sold to B who delivery to buyer? When?
leased same land to A while A sold
the same land to C. A: if bill is not retained by seller
Who has a better right? Q: delivered 10 dozens, 8 dozens was
only delivered
A: B has a better right. B 1 st took
possession, B deemed to be in legal A: accept 8, reject excess
possession
Q: A sold land to B (took possession) Q: if less?
A--------C (judgment CR sold;
Buyer, registered w/o A: if agreed to partial delivery, may
knowledge of 1st sale be compelled to accept
Can B have a better right?
Q: if to deliver 8, only delivered 7
A: Yes, if land is unregistered land, dozens & never delivered 1 dozen
1544 does not apply
A: WON at the time he accepted 7
dozens buyer knows that seller will
Art. 1544. If the same thing should not deliver balance
have been sold to different vendees, If knows- contract rate
the ownership shall be transferred to Does not know- FMV
the person who may have first taken
possession thereof in good faith, if it Q: To deliver 1 sack durado, wagwag,
should be movable property. when is the sale void?
Should it be immovable property, the A: When what is to be delivered is

ownership shall belong to the person indivisible, buyer may reject
acquiring it who in good faith first
recorded it in the Registry of Property. Q: Call seller demand increase in price
of sale of land?
Should there be no inscription, the
A: If lump sum-No!
ownership shall pertain to the person
If per unit measure- Yes!
who in good faith was first in the
possession; and, in the absence
Q: Price 1K-100 sq.m.area delivered
thereof, to the person who presents
is greater
the oldest title, provided there is good
faith. (1473)
A: Buyer may accept + payment of
contract price
Q: if only 93 sq.m.
Q: Delivery to common
carrier=delivery to buyer? A: Remedies of buyer
44
MOTO-Q NOTES

a) may accept, proportional -port of destination(Cebu)
reduction »”these shipping arrangements are
b) specific performance only presumptions, parties may still
c) damages stipulate manner & payment” – SC
»less than 1/10 rescission is not a
remedy OBLIGATION TO WARRANT
Rescission- remedy if buyer could
prove that he would not have bought Caveat emptor- not adopted by
land if less than… Phil.Law;
De Leon bec. Of implied
Q: Is it possible for buyer to have the warranties.
right to rescind if 100 sq.m. was
delivered BAR QUESTION:
A: Yes if land is inferior quality or if Q:sale of parcel of land for IM, down
value is less than 1/10 of the value payment Php 100, bal.to be paid after
squatters will be evicted, if within 6
Q: Bound to deliver upon perfection of mos.,squatters still there,seller shall
sale return 100k, in 6 mos.,value of land
doubled,squatters still there, seller
A: Not necessarily offered to return Php100k buyer did
1. stip as to not accept,seller refuse to execute
period final deed of sale,seller filed for
2. no payment of rescission.
purchase price
A: 1)NO! seller is not the aggrieved
party
Q: If parties agreed…delivery after 5 2)(1545) buyer given option to
days; is he obliged to make deliver? refuse to proceed with contract
When not obliged? 3) waive the happening of
condition & proceed with the contract
A: not obliged to deliver if buyer does *mere opinion not breach of
not pay yet warranty unless given by expert.
Not yet obliged-when the buyer loses *if warranty is as to title,fitness &
the right to make use of the period characters,
1198 mere opinion= express warranty
ex. Fertilizers to yield better harvest
if buyer became insolvent?-if he guarantee ‡ warranty
delivers a security
PLACE OF DELIVERY Art. 1545. Where the obligation of
1) stipulation either party to a contract of sale is
2) place fixed by usage of trade subject to any condition which is not
3) depends on nature of object performed, such party may refuse to
determinate-where thing is located at proceed with the contract or he may
time of perfection waive performance of the condition. If
generic- seller’s place the other party has promised that the
USAGE OF TRADE condition should happen or be
F.O.B.-free on board-seller shall only performed, such first mentioned party
be liable to shoulder expenses up to may also treat the nonperformance of
port of origin the condition as a breach of warranty.
C.I.F.-cost insurance freight
-delivery already taken place at IMPLIED WARRANTY
port of origin a) warranty against hidden
F.O.B.-port of origin(Mla) defects
45
MOTO-Q NOTES

b) warranty in case of eviction 1) thing is already defective at the
c) warranty of quality as to quality, time of sell
fitness 2) he would not have bought if he
knew/bought for less than the Php
WARRANTY IN CASE OF EVICTION
Q: can buyer not hold seller liable for
Q: is it required for buyer to be hidden defects?
deprive?
A: Yes if buyer was an expert
A: also includes peaceful possession
Q: What if the thing which is defective
Q: is it possible if buyer is not was lost?
deprived of ownership but deprived of
possession? A: XPN to 1174,vendor liable even
through FE
A: Yes, in case of Contract of Lease
REQUIREMENTS:
1) there should be a final judgment
in favor of 3rd person EXTENT OF LIABILITY OF THE
-seller must be VENDOR IN CASE OF LOSS OF THE
summoned,impleaded THING WITH HIDDEN DEFECTS (SEE
2) based on a right prior to the sale TABLE 2)
3) no valid waiver in the form of
waiver intencionada
THE DEFECT CAUSE OF LOSS: FE OR
4) act imputable to the seller after the FAULT OF VENDEE
sale (non-payment of taxes, double VENDOR VENDOR VENDOR IS VENDOR
sale in the case of the 2nd IS IN BAD IS IN GF IN BAD IS IN
FAITH FAITH GOOD
buyer) FAITH
1) RETURN
Q: How about if somebody was PRICE
YES YES NO NO
already occupying the land, acquired it
by acquisitive prescription, buyer did
not visit land, can he hold seller for 2)
breach of warranty? PRICE/VALUE
AT THE TIME NO NO YES YES
OF LOSS
A: No!
3) REFUND
OF EXPENSES Extent of liability of vendor
OF CONTRACT YES YES NO NO
VENDOR’S LIABILITY IN CASE OF
If vendor in bad faith.
EVICTION (see TABLE 1) 4) DAMAGES YES NO If YES
there is waiver
NO If there is no
waiver
Waiver intencionada 5) ONLY NO YES NO Vendor in good faith
NO
INTEREST conciente
»waiver made by buyer if he already intencionada
Vendee in
knew of the defect of the thing.
Waiver consciente Good faith Vendee in bad faith
1) value of the thing at the time of the eviction
»waiver made by buyer where both
buyer & seller knew that there was no YES
defect on the thing sold. Q: Is it possible
VENDOR’S LIABILITY IN CASE OF for vendor not
EVICTION liable for
TABLE 1 anything? YES
A: Yes, if vendor
Warranty Against Hidden Defects was not aware
NO
YES
YES
46
2) income or fruits
MOTO-Q NOTES

of the defect if the return price is less is still warranty as to title &
than the value of the thing at the time warranty against eviction
of loss. 2nd hand sale- “as is where is
basis”
SALE OF ANIMALS WITH DEFECT
Redhibitory- when even after the Q: Is it correct to say that there is
sale it cannot be seen even by no IW in judicial/ execution sale?
expert
A: No! there is still warranty by
Q: If 10 birds,1 defective, can be express provision of law- warranty
rescind? as to title even to judgment debtor
except if he was exempted fr. Such
liability by order of the court.
A: GR: No.  There are people who cannot
XPN: if buyer could prove that he be liable for warranties, not
would not have bought if he had sale without warranty/
known of the defect-- presumption if Ex.: sheriff
bought in pairs
RIGHTS AND OBLIGATIONS OF
Q: If animal died 10 days after sale? VENDEE
A: No, can recover if died within 3 Q: If he received the goods, means

days for a disease existing at the acceptance?
time of sale.If died with contagious
disease, he can recover. A: not necessarily, “receive” is only
preliminary to acceptance, subject to
NON-APPARENT ENCUMBRANCE inspection
Ex. Encumbrance on a Road
requirements- Q: If buyer accepted, is seller
1) non-apparent discharged of his warranty?
2) not known to the buyer
A: No.
Q: If knowledge of buyer can he XPN: 1) stipulation
hold seller liable? 2) buyer failed to give notice of such
breach within reasonable time
A: Yes, if it was annotated in the
title Q: If goods already at the warehouse
Remedy: rescission/damages of buyer, informed seller of refusal,
Rescission- invoke within 1 yr. fire broke out, can seller be liable?
from date of contract
A: It depends whether there has a
Q: If he filed damages 1 yr.& 6 mos, just cause for refusal. If no just
can the case prosper? cause, ownership is transferred to
buyer, RES PERIT DOMINO
A: It depends on when was the
discovery, damages should be filed As to Price
within 1 yr. from discovery -payment to be made at place of
delivery
Q: If animals bought from fairs,
auctions, no warranty at all? Q: 1/1/03 delivery----------1/1/04
buyer paid
A: Not necessarily, only there is no
warranty as to hidden defects; there A: can buyer be held to pay %?
NO.
47
MOTO-Q NOTES

»sale on credit not necessarily sale or
XPN: installment-maybe on a straight term
1) stipulation basis
2) thing delivered produces fruits  even only one instrument is
3) if buyer was already in default paid, already covered by
after Extra J demand MACEDA LAW
(needed if there was stipulation as to »60 days grace period without
payment of price) interest
 contact of sale results to if he paid at least 2 yrs.-entitled to
reciprocal obligation CASH SURRENDER VALUE-50% paid
by buyer, only up to 90%
Q: right of inspection, absolute? Grace Period-claimed only once
every 5 yrs.
A: No, no law providing for such  there must be a delivery to the
Buyer has no right to inspection buyer of cash surrender value
preliminary to acceptance not a mere notice
Ex.: delivery of mining co. of coal REMEDIES FOR BREACH OF
to NAPOCOR WARRANTY
1) UNPAID SELLER 1526
BAR EXAM QUESTION: a. withhold goods
b. stoppage in transit
Q: 1/1/03-----7/1/03 (delivery of c. resale
mango plantation) d. rescind
8/1/03 (delivered) » GR: the following remedies are
seller sold fruits to X between the alternative except for letter a and
period 7/1/03- 8/1/03 b.
Can buyer recover the fruits from
X? MACEDA LAW
A: 1537 only applies if both parties Q: A sold a house for 10M---

are already obliged, not applicable if downpayment of 3M was given while
there is a stip as to delivery 1164- remaining 7M will be paid in 60 equal
7/1/03------5/1/03 Buyer entitled to monthly installment defaulted
fruits but 2nd par. 1164 not yet 47th,49th, offered to pay arrears.Seller
delivered so, remedy is for damages cancel the sale,Cancellation Valid?
A: No. Paid for at least 2 yrs. He is

Art. 1537. The vendor is bound to entitled to 1 mo.for every year.
deliver the thing sold and its
accessions and accessories in the Facts: 46 installments 3 days=90 days
condition in which they were upon the grace period. A is within the grace
perfection of the contract. period to update account.
All the fruits shall pertain to the Q: if seller only paid 80% can he
vendee from the day on which the invoke 1526?
contract was perfected. (1468a)
A: Yes!
MACEDA LAW RA 6652 REALTY
INSTALLMENT BUYER ACT Art. 1526. Subject to the provisions of
»only applies to residential realty this Title, notwithstanding that the
 not applicable to commercial & ownership in the goods may have
industrial sale on installment= passed to the buyer, the unpaid seller
sale on credit of goods, as such, has:
48
MOTO-Q NOTES

(1) A lien on the goods or right How exercised? By mere notice to
to retain them for the price common carrier
while he is in possession of  if goods are covered by
them; NDT,NDT should be
surrendered to common carrier
(2) In case of the insolvency of  in order for the goods to be no
the buyer, a right of stopping longer in transit, buyer should
the goods in transitu after he have obtained it lawfully
has parted with the possession Q: S-------------B
of them; Has possessory lien, Does C
S loses his lien if B sold it to C?
(3) A right of resale as limited
by this Title; A: No. Unless he consented; if B sold
the goods to C covered by NDT & was
(4) A right to rescind the sale sold by B to C through negotiation & C
as likewise limited by this Title. bought it in GF
Where the ownership in the goods has RESALE

not passed to the buyer, the unpaid ---seller must still have the goods
seller has, in addition to his other ---maybe exercised if buyer is in
remedies a right of withholding default for unreasonable time; if
delivery similar to and coextensive perishable goods are involve, if by
with his rights of lien and stoppage in stipulation seller reserves right to
transitu where the ownership has resale
passed to the buyer. (n)
Q: if seller failed to give notice to
Q: If buyer paid seller a check, can resale, valid?
1526 be invoke? If no notice as to date, time &
place
A: Yes if check was dishonored not
through the fault of the seller A: notice not necessary as to validity
of resale. These notice are valid only if
seller use the ground that buyer has
Q: Remedies exclusive? been in default for immeasurable
length of time.
A: No! he nay file action for specific 2nd notice is relevant whether the sale
performance/ damages is a GF sale.
Q: Even if ownership had passed to Q: Buyer has unpaid Php 100,000,

the buyer, may seller invoke 1526? seller sold goods for 70,000 can he
recover 30k from buyer?
A: Yes! Ex. Constructive delivery
POSSESSORY LIEN- right to withhold A: Yes. As long as the sale is a GF sale
the goods
lien – if goods already delivered Q: What if goods sold for Php
the buyer & seller not yet paid 150,000, who is entitled to 50k?
»not required that buyer be insolvent
»seller will not lose lien over the goods A: seller shall not be responsible to
--requiring the buyer to pay the buyer for whatever profit he may
have obtained
STOPPAGE IN TRANSIT
Q: If from 100k, 50k was paid by
---seller must have parted possession
buyer, remaining goods sold for 100k,
---buyer is insolvent
who is entitled?
---goods are in transit
49
MOTO-Q NOTES

(alternative in character)
A: seller! Is there unjust enrichment?
No, it was the buyer who was really at Q: Sale of jewelry,10M, 100k,(10 yrs.
fault Equal installment),buyer defaulted, 3rd
installment
Q: If the buyer already acquired
ownership should seller rescind 1st? A: exact fulfillment is the remedy
A: No. he can automatically resale as
ruled by SC Katigbak vs.CA Q: after 1 month S filed action for
recovery of balance?
RIGHT TO RESCIND
---same requirements in resale except A: As a rule no, only 100k is due. XPN
for perishable goods if there’s an acceleration clause
RECTO LAW 1484 Q: defaulted 3rd installment, and so

with 7th, can cancellation of sale be
Art. 1484. In a contract of sale of involve?
personal property the price of which is
payable in installments, the vendor A: No! cancellation to be involve
may exercise any of the following 2/more consecutive installment is
remedies: defaulted
Q: If 3rd,4th, defaulted, cancellation, is

(1) Exact fulfillment of the
seller compelled to return all amount?
obligation, should the vendee
fail to pay;
A: No! he may retain reasonable
amt. for the use of the thing
(2) Cancel the sale, should the
vendee's failure to pay cover Q: Is it possible for S to retain
two or more installments; everything?
(3) Foreclose the chattel A: Yes,if there is forfeiture clause

mortgage on the thing sold, if
one has been constituted, Q: Is it possible even if there is
should the vendee's failure to forfeiture, S is not able to retain
pay cover two or more everything?
installments. In this case, he
shall have no further action A: Yes if amt. is unconscionable
against the purchaser to
recover any unpaid balance of Q: A bought brand new BMV, 5M
the price. Any agreement to installment basis. A mortgaged his
the contrary shall be void. jewelries worth 5M to secure
(1454-A-a) fulfillment
S foreclose.deficiency of 1M, can
seller recover 1M from buyer?
Q: What are this recto law & maceda
law in connection with installment? A: Yes! Bec. The very thing bought is
not the thing mortgaged. For 1484 to
A: Recto law- sale & movable property apply. It should be the thing bought
on installment w/c is mortgaged.
1) EXACT FULFILLMENT/SPECIFIC
PERFORMANCE BAR QUESTION:
2) CANCELLATION Q: A bought car, seller required real
3) FORECLOSURE estate mortgage aside from the
50
MOTO-Q NOTES

chattel mortgage covering the car. buyer paid the fruits at the time of
Seller foreclose mortgage on the car, sale, when it comes to repurchase
despite foreclosure there is still a seller should also pay.
deficiency. May S, foreclose the real
estate mortgage? Q: If no fruits at the time of sale, at
the time of repurchase there were
A: No! 1484 applicable fruits.
A: 75k value of fruits should be

REMEDY OF BUYER divided into proportion counted unto
1) action for specific the last anniversary date
performance-determinate
substitute performance-generic BAR EXAM QUESTION:
thing
2) action for damage Q: A sold to B land w/ right of
3) rescission (1191)- if there was repurchase, no fix period as to
a substantial breach repurchase – when should it be? If A
failed to repurchase, what will you
MODES OF EXTINGUISHMENT suggest to your client?
»4 yrs, ownership of the thing
delivered to buyer- not absolute
1)1236 IN GENERAL- ORDINARY
ownership-subject to resolutory
MODE
condition of proper exercise of right of
2)RESCISSION-those provided a law
repurchase
on sales-special modes
 if seller a retro failed,ownership
3)EXTRA SPECIAL-REDEMTION
of buyer becomes absolute? If
REDEMPTION
movable? Yes. Immovable? Yes!
1)CONVENTIONAL-available only if
there was an agreement of
FILE ACTION FOR CONSOLIDATION
repurchase
OF TITLE NEEDED
----Consolidation of title needed. Yes
Q: Who has this right?
with respect to immovable, necessary
for buyer to be able to register the
A: Seller, owners previous to the
prop in his own name
seller, assignee,heirs, creditors of
seller
Q: If expiration of date of repurchase,
can no longer recover?
BAR QUESTION: S (debtotr) sold land
to B with right of repurchase for 50K
A: No! it might be an equitable
mortgage; file for reformation (read
Q: If seller offered 200k, can buyer
1602 for presumptions)
refuse?
A: Yes! Bec. Seller is responsible also

for the useful & necessary expenses Art. 1602. The contract shall be
presumed to be an equitable
Q: On 1/1/02 sold mango plantation mortgage, in any of the following
4/ 1/02 supposed delivery but was cases:
only delivered on 10/1/06. if there
were fruits between the period it (1) When the price of a sale
should had been delivered, Can seller with right to repurchase is
be compelled to pay entire 100k? unusually inadequate;
A: It depends if there were fruits at

the time of the sale, determine if
51
MOTO-Q NOTES

(2) When the vendor remains D sold to X his lot with right of
in possession as lessee or repurchase, can X compel D to
otherwise; repurchase entire land?
A: GR: No
(3) When upon or after the XPN: If the thing is essentially an
expiration of the right to inadmissible thing ex. Bungalow
repurchase another instrument house, painting w/c is immovable
extending the period of by destination
redemption or granting a new 2) LEGAL-
period is executed; a) co-owners- any prop
b) of adjacent lnd-immovable
(4) When the purchaser retains Q: Co-owners
for himself a part of the
purchase price; A B
(5) When the vendor binds C D

himself to pay the taxes on the
thing sold; D donated his land to X, Can co
owners redeem?
(6) In any other case where it
may be fairly inferred that the A: No! for redemption to exist;
real intention of the parties is onerous title
that the transaction shall
secure the payment of a debt Q: Same table, D sold the land to
or the performance of any B, can their be a right of redemption?
other obligation.
A: No! should be sold to other person
In any of the foregoing cases, any for redemption to arise
money, fruits, or other benefit to be
received by the vendee as rent or CASE: 3 bros. had mother title
otherwise shall be considered as cancelled… RD registered still in their
interest which shall be subject to the names instead of one TCT each,
usury laws. (n) despite actual partition one of bro.
sold, can the two redeem?
Q: Why would the CR have
Dr signed a sale w/ right of repurchase A: As adjacent owner,Yes! But can’t
than a mortgage? claim as co-owner
A: to avoid pactum commissorium Q: If only 350k is stated in deed of

sale, actual payment is 1M, purchase
Q: Against whom should right of price should be?
repurchase be exercise?
A: 350k only! Contrary to public policy
A: Anyone who derive the title from case of Doromal
buyer a retro
Q: If 1M is stated in deed of sale,
Q: X with right to purchase 350k interest how much can co-owner
Q: be compelled to pay in order to
redeem?
A B
C D A: 1M
Q: 2 sisters, A& B, A sold her interest

to X-(2006) w/o B knowing.
52
MOTO-Q NOTES

B paid real property tax & knew of the ➢ A: It is contract for the Lease of
sale, informed X right of redemption, Service. Employment contract
can he still redeem? which requires the elements of an
employer-employee relationship.
A: When will the 30 days run? 30 days
fr. Actual knowledge ➢ Q: Is the lease of a safety deposit
box, considered lease of things?
Q: A-X (buyer) informed B of the sale,
co-owner did not react; buyer wanted ➢ A: NO. It is a special kind of
prop. Be annotated at RD, RD send deposit. The lessee has no control
another notice to co-owner (deadma!) over the object.
After more than a year, buyer filed for
partition, co-owner received Characteristics
summons, filed for redemption-
prosper? ¬ CASE Dimaculangan-
¬ In lease of things, a death of the
A: Yes! Notice in writing given by
party does not extinguish the
vendor not vendee,not RD
contract of lease.
Alternative answer: No! bec. She
➢ It is essentially onerous.
already received notices, the 30 day
➢ Consensual, Nominate, Bilateral
period should have already run
DOROMAL VS. CA notice should be w/
deed of sale! ¬ CASE:Bagtas-
TGMOct2007 ¬ The 2nd bull was not turned over

due to a fortuitous event- crossfire
IV.LEASE during the era of the Huks. Is it a
contract of commodatum by which
the government bears the loss?
¬ SC-This is a Lease.
Kinds of Lease Bagtas has to pay a certain
1. things- consensual contract; breeding fee.
onerous
2. work or service ✓ Spouses, guardians and those
❖ Household service- Labor enumerated under Article 1490
❖ Employment contract- Labor and 1491 cannot enter into a lease
❖ Contract for a piece of work- contract with each other.
Civil
❖ Contract of Carriage- Art. 1490. The husband and the wife
Commercial cannot sell property to each other,
3. Right except:
COMMODA LEASE (1) When a separation of

TU property was agreed upon in
M the marriage settlements; or
Essentially For a price
(2) When there has been a
gratuitous certain; onerous
judicial separation or property
under Article 191. (1458a)
➢ Q: What is the nature of the Art. 1491. The following persons

contract in the boundary system? cannot acquire by purchase, even at a
public or judicial auction, either in
53
MOTO-Q NOTES

person or through the mediation of As to Formalities
another:
(1) The guardian, the property ➢ Q: A appointed B as his agent. A
of the person or persons who withholds no power against B
may be under his granting the latter a Power of
guardianship; Attorney. B entered into 3
contracts…
(2) Agents, the property whose 1) Contract of lease of
administration or sale may parcel of land for 4 years and a
have been entrusted to them, rental of 60,000php annually.
unless the consent of the 2) Contract of lease of a
principal has been given; parcel of land with a rental on a
monthly basis of 3,000php.
(3) Executors and 3) Contract of sale of a
administrators, the property of parcel of land for 3x the value
the estate under of the land.
administration; What is the status of these
contracts?
(4) Public officers and
employees, the property of the A: 1) Unenforceable. What is
State or of any subdivision authorized of B is an act of
thereof, or of any government- administration. SPA is needed.
owned or controlled 2) Valid and Binding. Rental of an
corporation, or institution, the immovable without a fixed period, the
administration of which has same period as payment of rentals; It
been intrusted to them; this is an act of administration only.
provision shall apply to judges 3) Void. Authorization of the
and government experts who, agent is not in writing.
in any manner whatsoever,
take part in the sale; CASE Donald Dee- Documentary
formalism is not an element in
employment.
prosecuting attorneys, clerks of
BAR EXAM QUESTION:
superior and inferior courts,
Q: A leased a cockpit to B. During the
employees connected with the
pendency of the lease, the cockpit
administration of justice, the
collapsed. Who is liable for the
property and rights in litigation
collapse?
or levied upon an execution
before the court within whose
A: Lessor. His is the duty to repair,
jurisdiction or territory they
unless there’s a stipulation to the
exercise their respective
contrary.
functions; this prohibition
includes the act of acquiring by
assignment and shall apply to CASE:Gonzales v. Mateo-
lawyers, with respect to the
property and rights which may Lessee is liable because he
be the object of any litigation agreed to repair.
virtue of their profession. BAR EXAM QUESTION:
(6) Any others specially Q: A leased a parcel of land to B for 10

disqualified by law. (1459a) years. There was an agreement to
extend the Lease and it’s binding. B
54
MOTO-Q NOTES

put up a 2-storey building. Upon
expiration of the Lease, B failed to A: Yes. As long as it is not prohibited
renew the Lease. A filed an ejectment from subleasing. Assignment of lease
suit against B. B contended that he is is valid if with the consent of the
a builder in good faith thus lessor. In sublease, it is valid although
reimbursement of the expenses. absent consent of the lessor provided
it is not prohibited.
A: Builder in good faith cant be
invoked. Lessee can’t build in the CASE:Manlapac v. Salazar-
concept of an owner. He is neither
entitled to reimbursement. The option A leased his fishpond to B till the end
is with the lessor if he opts to retain ½ of June 1, 1947. During the existence
amount paid by the lessee or remove of the contract, B contracted with C,
the improvements though causing the latter to have the rights in the
damages. Damages must not be fishpond. The contract between B and
necessary, though. C was made without A’s consent. The
heirs of A contended that the contract
Q: Is chapel a useful improvement? is void because it is only an
assignment.
A: Yes.
SC- The lease agreement
Q: There was a lease over a fishpond constitutes as an assignment only if
for 5 yrs. The rental for next year will the lessee absolutely transferred all
be reduced to ½. However, the harvest his rights to 3rd persons, dissociating
was only ½ due to the rebels. The himself in the lease. The 3rd person
lessee contended that the lease period becomes the new lessee.
is extended for 10 yrs now. Will there »there should be absolute transfer
be a reduction?
CASE: Frezel vs. Mariano
A: None. The right of reduction can
only be invoked if failure to harvest There was a construction contract
was due to an extraordinary fortuitous (labor and materials). Frezel as the
event such as war, fire, pestilence. It supplier. A took over the construction
does not include the intrusion of of the building. C demanded payment
lawless elements, flood, and typhoon. from A. Is C, the owner, liable for the
» reduction can be allowed only in unpaid amount? The claims of C are
cases where B harvested less than one as follows:
half and that it should had been due to There’s no privity between A and C. B
fortuitous event is an agent.
»lawless element is not a fortuitous
event SC- There’s no agency because A’s
extent of control over B goes only into
Q: Will there be an extension? the result and not the manner,
therefore, it is to be considered as a
A: None. Lease is suspended during contract for a piece of work.
the fortuitous event. He can claim not
to pay the monthly rental. C can recover from A
» Fortuitous event is not a reasonable
ground for extension but only for SC- Only to the extent of the
suspension of payment of lease during unpaid amount by B to C.
that period
Q: May the lessee sublease with the Might be asked in the finals!
consent of the lessor?
In 1952, A lease to B a house, in
1967 B transferred his rights to C.
Will the transfer be valid and binding
against A, the lessor?
A: It depends on the nature of the
transfer if it was assignment or
sublease.
SC: If the transfer of rights is
absolute, where lessee cease to be
lessee, then the transfer is not
bindind on the lessor however if
lessee
BOGS QUITAIN; TERE MORALES; PAULETTE TONGCUA; TINO reserves
OCCIANO; BUDS reversionary
OCCIANO interest 55
no matter how small, it would be
binding on the lessor
MOTO-Q NOTES

A: There was a renewal of the lease
known as IMPLIED NEW LEASE.
Q: Does B have the right to exercise

the option?
A: No. Only the terms and conditions

GERMANE to the Lease contract is
deemed renewed. Otherwise, it is not
renewed. If payment be on an annual
basis in the original contract, the same
period and manner of payment will
also be adopted in the renewed
contract. NOTE ARTICLE 1670.
Art. 1670. If at the end of the contract

✓ Termination of Lease the lessee should continue enjoying
the thing leased for fifteen days with
the acquiescence of the lessor, and
Q: A constructed a building for 5M and unless a notice to the contrary by
leased it to B. B will be the lessee for either party has previously been
10 years for 100,000/month. After given, it is understood that there is an
completion of the construction, B will implied new lease, not for the period
become the owner thereof. On the 5th of the original contract, but for the
year, the entire building was burned. A time established in Articles 1682 and
constructed another building. Before 1687. The other terms of the original
completion, B gave notice to A that he contract shall be revived. (1566a)
will continue the lease. Can A refuse B
as lessee? Pvt/101707
A: Yes. With the original building V. AGENCY

destroyed by a fortuitous event, the Q: baptismal proxy, agency?
lease contract is extinguished, since A: No. political and social relations are
there is total destruction. not included
»Agency refers only to juridical act
➢ Death of the lessee does not - BOUND himself to another
extinguish the lease. Except is >objective : execution of juridical
there is a stipulation to the act
contrary. extinguish legal relationship such
as payment
BAR EXAM QUESTION:
- there must be consent
Q: A entered into a lease contract with - “ agency “ includes instrumentality
B for 3 years. There was a stipulation as government instrumentality.
in the contract that B will have the
option to buy the parcel of land leased CASE:Quiroga V. Parsons
by him. However, B failed to exercise
the option as stipulated in the – exclusive right to sell is an exclusive
contract. B still continued paying the agency.
rentals and A continues to receive the
same. B, now, exercised the option. A
refused to sell the land to B. Can A be
compelled to sell the land? Nature of AGENCY vs. SALE
Consensual
56
MOTO-Q NOTES

Nominal
X is clothed with full authority to
May be Gratuitous Essentially Onerous manage restaurant of Y (owner). X
*burden: principal
*presumption: for purchased some items from Z. X was
compensation
indebted to Z. Y’s defense is that X
Preparatory contract was not authorized to purchase.
-a means by which other
contracts may enter into. However, X led other people to believe
that X has authority such as signing as
Based on trust and confidence
agent.
There’s no transfer of Ownership passes upon
ownership but only transfer of delivery. SC-Estoppel lies. Y is liable.
possession.
II. APPARENT/OSTENSIBLE
AGENCY vs. CONTRACT FOR A
PIECE OF WORK
Rallos vs. Yangco
Extent of control by the Principal Extent of control by the Principal
over the agent is with the Result
and Manner.
over the agent is with the Result
only.
A sent a letter to B authorizing C to
buy abaca/copra. B transacted with C.
Consequently, from Jan. 2, the
purchases remained unpaid. B
complained to A. A contended that
before Jan. 2 he revoked the
authorization from C. Therefore,
AGENCY vs. NEGOTIORUM GESTIO transactions hereafter are not binding
By agreement By law upon A.
SC-Invoked Article 1873. Revocation is
immaterial. C’s transaction has full
force and effect in exercising authority
until rescission. If C is specially
AGENCY vs GUARDIANSHIP
informed of the revocation of the
Person represented must be Person represented is
capacitated incapacitated authorization, B shall also be informed
in the same manner as C.
- JBL REYES: If B had actual
knowledge of the revocation, he
cannot hold A liable as it would
AGENCY vs PARTNERSHIP amount to Bad Faith.
Termination may be by the will It has a separate juridical entity
of either party
 Principal- revocation Q: What if A actually caused a notice
 Agent- withdrawal
of publication?
A: Can still be liable pursuant to
Article 1873
KINDS of AGECY:
Art. 1873. If a person specially
informs another or states by public
I. Apparent advertisement that he has given a
/Ostensib power of attorney to a third person,
le the latter thereby becomes a duly
II. Agency authorized agent, in the former case
by with respect to the person who
estoppel received the special information, and
in the latter case with regard to any
I. ACTUAL AGENCY person.
Mack vs. Cams (?)
57
MOTO-Q NOTES

The power shall continue to be in full A: It depends on the nature of the
force until the notice is rescinded in business, if the task is also within the
the same manner in which it was nature of the agency, yes.
given. (n) Q: A authorized B to sell land of A in
Baguio, did not do anything, Is B an
agent?
Classifications of Actual Agency A: No.
Q: How about if A gave the letter to B
❖ as to manner of creation and B accepted?
☞ express – consent of both A: There is an implied agency
parties given
☞ implied ❖ As to consideration or
compensation
CASE: Dela Pena vs. Hidalgo- ☞ Onerous- presumption is
for consideration.
After the authorization was executed, ☞ Gratuitous- liability is
the agent appointed a mitigated in the part of the
substitute. The principal did agent.
nothing to repudiate such
appointment. BAR EXAM QUESTION:
Contract of Agency as to scope of
SC-There is an Implied agency by the authority
principal’s silence or
inaction. The principal is 1. Acts of administration
deemed to have accepted 2. Acts of strict dominion
the new agency.
Q: In the sale of Rolex, the agent has
Agent no SPA, with the act bind the
principal?
- When the agent is authorized to
A: No. Any act of strict dominion
sell a parcel of land and he just
requires an SPA.
stared at the ceiling, he is NOT
deemed to have given his consent.
As to form:
However, if the agent accepted a
1. Oral
special power of attorney and he
2.Writing
did nothing, it depends upon the
1. Oral
kind of business as to consider it
2.Writing
as an implied agency, with the
2.Writing
agent giving his consent. If the
principal and agent are engaged in
Q: Why is the form of agency peculiar?
the same business, there is an
A: Because it involves two contracts,
implied agency whereby the agent
the agency itself and the contract to
is deemed to have given his
be contracted by the agent.
consent.
Q: Mere silence of agent deem
accepted agency?
A: not necessarily
»If parties are in the same place, no
problem, stipulation on the SPA Q: Principal was in the hospital and
governs executed a GPA with the following:
Q: if not in the same place such as - contact of lease of a parcel of
when using the telegram, if did not land with a term
reply deem accepted? - contract of lease with no
agreement as to term and
payment
- contract of sale for a three times
higher than the land
A: Discuss the status: Depends on the
power given, GPA was only given
» unenforceable if not in a public
instrument
» valid and binding if merely acts of
administration
» sale is void under 1874 ; SELLING IS
AN ACT OF STRICT DOMINION
58
MOTO-Q NOTES

X mailed a letter to Y giving him the

authority to sell a parcel of land. So Y
sold the same to a third person. The
letter is sufficient to bind X.
» In a SPA, the only requirement must
Q : A is represented by B. There is a be in writing , need not be notarized
lease for 5 years and such lease was
not put into writing. Essential Elements
A: First, determine the object. If it is 1. consent of the parties

personal, SPA is not required. If it is 2. object
an immovable, it depends on B’s 3. act within the scope
capacity in the contract of Lease. 4. act in representation of principal
» 3 and 4 are not necessary to the
Q: 3rd person is the lessee and the
validity of the contract but these
principal is the lessor, SPA is needed.
are the obligations of the agent.
However, if the principal is the lessee,
Absence of these, Agency remains
authority of A must be in writing in
valid.
order for it to bind B?
3 and 4 are the TWIN REQTS.
How to know whether it is within or in
A: Not necessarily. For lease to be in
excess of authority?
writing or not, the provisions on
Statute of Frauds must find
• Consider the SPA.
application.
BAR EXAMINATION QUESTION CASE: Linan
Q: The deceased principal authorized - Whether or not the agent is

the agent to dispose of his land. The authorized to sell a parcel of land.
heirs of the principal, however, sold
the 12 hectares to B. The agent sold Justice Perfecto: under the SPA, he
the same land to C. Who has the has no authority. Good faith is not
better right? within the scope.
A: It depends on the authority of the Rely on the provisions of law- the

agent. If it is not in writing, the authority to manage the restaurant
contract of sale is void. Thus, C has a includes the authority to buy the
better right. equipments.
Q: If it is in writing, the authority of Art. 1882. The limits of the agent's

the agent is extinguished. B has a authority shall not be considered
better right? exceeded should it have been
performed in a manner more
A: Not necessarily. If the agent has no advantageous to the principal than
knowledge of the death of the principal that specified by him. (1715)
and C is in good faith, C being the 1 st
registrant, therefore, C has a better
right. Article 1882- Considered
within if it is to the advantage
»Notarization or recording in a public of
instrument is not a requirement. the Principal.
CASE:Jimenez- CASE:Insular Drug-
59
MOTO-Q NOTES

attorney with respect to the business
The agent’s authority to collect money in which he is habitually engaged as
does not include encashing or an agent, and he did not reply to the
endorsing of check. letter or telegram. (n)
Municipality of Ilo-ilo vs. Evangelista Art. 1900. So far as third persons are
concerned, an act is deemed to have
»The authority to hire a lawyer been performed within the scope of
includes authority to pay said lawyer. the agent's authority, if such act is
within the terms of the power of
»If the agent’s authority to attorney, as written, even if the agent
borrow money and mortgage, has in fact exceeded the limits of his
he cannot use it to satisfy his authority according to an
own debts. understanding between the principal
and the agent. (n)
Q: A authorized B to borrow money
from any bank, agent borrowed money Art. 1902. A third person with whom
in his name to buy land, defaulted, the agent wishes to contract on behalf
can bank go after the principal of the principal may require the
A: No. Third person may have presentation of the power of attorney,
recourse against principal except if it or the instructions as regards the
was property of principal which was agency. Private or secret orders and
involve instructions of the principal do not
prejudice third persons who have
relied upon the power of attorney or
Q: SPA may be oral? instructions shown them. (n)
A: NO! It is a written authorization as
the following provision provides: Rights and Obligations of the
1871 “delivers” Agent
1872 “transmit”
1900 ❖ His main obligation is to CARRY
1902 “presentation” OUT THE AGENCY.
❖ If the principal died…
GR: The agency is
Art. 1871. Between persons who are extinguished.
present, the acceptance of the agency EXC: If it will endanger the
may also be implied if the principal Agency, the latter shall be
delivers his power of attorney to the continued
agent and the latter receives it
without any objection. (n) Ex: X sold the car to Y with the
breaks in a defective condition
Art. 1872. Between persons who are and without the principal’s
absent, the acceptance of the agency knowledge, Y bought the car.
cannot be implied from the silence of Therefore, the principal
the agent, except: incurred loss/damage.
(Art. 1888- An agent shall not
(1) When the principal carry out an agency if its
transmits his power of attorney execution would manifestly
to the agent, who receives it result in loss or damage to the
without any objection; principal.)
(2) When the principal entrusts to him

by letter or telegram a power of Art. 1888. An agent shall not carry out
an agency if its execution would
60
MOTO-Q NOTES

manifestly result in loss or damage to Case Law
the principal. (n) Q: P authorized A too sell his house
and A introduced prospective buyer.
The buyer gave him 1K. P terminated
Liability of Agents to 3 persons:
rd the authority of the agent and the
Personally bound himself agent went to RD and found out that a
Acted negligently sale was consummated. A demanded
Acted outside the scope of his commission, can the case prosper?
authority
❑ Even if the agent acted SC: No. Failure of agent to deliver to
outside the scope of his principal even not owing to him the 1k
authority, the agent is NOT given by the buyer constitute a
liable if: forfeiture of agent’s right to
The principal ratified the commission
agent’s acts
The 3rd person was Case Law:
informed by the agent Q: Agent to collect P800 he was able
that he acted outside to collect only P500 and deducted 20%
The 3rd person was as commission.
aware thereof SC: The act of the agent constitutes
estafa.
CASE:Domingo vs. Domingo-
BAR EXAM QUESTION:
Whatever commission is received by
the agent as a consequence of his Q: A authorized B to sell property in
agency, albeit the absence of Cebu, B appointed a subagent. Can B
knowledge of the principal of the appoint a subagent?
agreement between the 3rd person and UPLAW Center:
the agent, the latter shall give to the
principal whatever he received. A: Yes, under 1892 if it was not
The agent is not the insurer of the prohibited.
principal’s success in business. » Sir said with due respect to the UP
law Center, the answer is erroneous.
GR: The agent cannot sell the goods Subagent – does not take the
on credit. relationship of B as agent; assistant
EXC: Without consent of the agent
principal, the sale is not void but the
principal holds him liable as sale in Art. 1892. The agent may appoint a
cash basis. substitute if the principal has not
prohibited him from doing so; but he
Q: When can agent be held liable? shall be responsible for the acts of the
A: When he bound himself. substitute:
Exception: (1) When he was not given the
1. When the principal power to appoint one;
ratified
2. When 3rd person (2) When he was given such
informed that agent is acting power, but without designating
beyond the scope of his the person, and the person
authority appointed was notoriously
3. When agent informed 3rd incompetent or insolvent.
person such as when he
promise to secure ratification All acts of the substitute appointed
and was not able to against the prohibition of the principal
shall be void. (1721)
61
MOTO-Q NOTES

effect despite the death
Substitute – “kapalit niya” Article 1892 of the principal.
shall apply ☞ Effect of death of the
» if principal was informed of the principal
substitute Article 1892 shall not apply If without knowledge
and the agent is in good
Modes of Extinguishment faith, the agency is
(EDWARD) extinguished but the act
of registration in good
faith even after the
E- expiration of the period death of the principal is
valid as the law says so.
D- death
W- withdrawal
On Revocation
A. accomplishment
☞ May be made anytime;
R- revocation
at will
D- dissolution of entity
☞ Q: If there’s a period,
» not exclusive, Article 1231 also
will the revocation before the
applies stipulated period hold the
❖ Other modes may apply to agency. principal liable?
BAR EXAM QUESTION
A: NO.
Q: X authorized Y to sell a pendant
CASE:Barreto
with diamond. The pendant was
robbed. X sued Y. Y’s defense is
Agency is based on trust and
robbery.
confidence therefore, the principal can
revoke anytime. P can only be held
A: Austria Case
liable for damages if he acted in bad
faith.
- Robbery is a fortuitous event.
- The perpetrators need not be CASE: Collongco

convicted of robbery.
A authorized B to sell the land for
- For a fortuitous event to be a valid 100M. B did not remit the 100M. What
defense, there must be no was agreed was that B will be the
concurrent event. agent of A in subdividing the land and
constituting the house. The proceeds
- However, if it happened today, will go to A as payment. The authority
Agent is considered to be granted was for 10 yrs. On the 5th yr.,
negligent. If it happened in the A revoked the authority given to B.
60’s, the agent is not liable. Was the revocation valid?
- The SC held that the agent is liable SC: NO. The agency is was coupled
because there’s negligence. with interest and as such, it cannot be
validly revoked after the interest
ceases; means of fulfilling interest
❖ On Death
must be different from the
Effect of death of the agent
commissioner given; very interest that
❑ It will absolutely
an agent is claiming should be stated
extinguish the agency. If
at the SPA without prejudice to his
the agency is for the
liability if revocation was done in bad
benefit of a 3rd person,
faith
the agency will continue
to be in full force and
62
MOTO-Q NOTES

Pvt/101707 BAR QUESTION: A and B put up a car
repair shop. A contributed money while B
contributed his services. A likewise put up a
VI. PARTNERSHIP coffee shop on the left side of the car repair
shop. B likewise engaged in another
business of his own. Are they legally allowed
BAR EXAM: to venture into such businesses?
A used all his savings to put up a
restaurant, B gave A 4k as financial ANSWER: A under the facts can engage in
assistance in exchange of 20% profits, 22 such services since he is only a capitalist
years after B filed action demanding profits. partner. As to B, since he is an industrial
A denied and invoked prescription. partner, he is prohibited from engaging in
A: UP Law Center – Contract of Partneship any kind of business without the consent of
exists because they contributed to a the other partners.
common fund plus there was a stipulation
as to profit. » Partnership may be constituted in any
»Sir said, no contract of partnership exists. other form. – Article 1172
There was no agreement to contribute to a
common fund, only financial assistance. Q: How about 3rd person who contracted
with Partnership with unlawful object, can
Q: Partnership vs. Co-ownership recover?
A: Contract of partnership is created by A: Yes, as long as no knowledge of the
mere agreement while co-ownership is illegality
created by operation of law.
 When one or more parties
Essential Element:
contribute an immoveable
» object is to engage in a lawful activity
 General Partnership and Limited If there is no inventory – VOID;
Partnership (relevant only in Limited If there is an inventory, but not put in
Partnership) writing
Q: Can the spouses enter into a limited
partnership and engage in real estate  If such partnership is not put into
business
public instrument -> it will not affect
A: Yes, prohibition is only on universal
the validity of the partnership
partnership
agreement, though it may affect the
greater efficacy or the enforceability
Q: Can two corporations organize a general
of the contract.
partnership, can a corporation enter into a
partnership?
Case: Hernandez v.
A: No! Corporation and partnership may
Angeles
organize a joint venture but they cannot
enter into partnership contract
» Form is not necessary for the validity,
» Sir said that Corporation can enter into a
maybe necessary for enforceability
contract of partnership if there was an
»ENTITY THEORY/LEGAL PERSON
express grant of power in its articles of
THEORY means that a partnership has a
incorporation. (Tecson vs. Bolaños)
juridical personality separate and distinct
Q: What is the effect of illegality of contract?
from the partners
Can a partner recover what he had given if
cause was illegal?
 A general partner can be an
A: Yes, because it will result in unjust
enrichment. industrial partner.
Q; How about if both was in pari delicto?  Can a partner be both capitalist and
A: If there was repudiation before there was industrial partner at the same time?
any damage, the court is in its discretion to YES
allow recovery  Can a limited partner be both an
industrial and a capitalist partner at
the same time? NO
CLASSIFICATION OF PARTNERSHIP:
63
MOTO-Q NOTES

I. As to Object: » in having a substitute, must be with the
a) present property knowledge of the principal. (De la Peña vs.
b) profits Hidalgo)
II. a) General » all general partners
b) Limited » one or more general
and one or more limited partner; a Proportional Application of Debts:
limited
partner (has no right to partake in the  One obtaining is a managing
management partner;
Commercial Partnership » governed by  Both debts are due and
Code of Commerce
demandable;
III. As to term:
 If the partner receipted the
a) maybe for a particular
undertaking (Ortega vs. CA) amount in the name of the
partnership
Admission of a new partner  estoppel
»If given a question concerning  agency
the liability of a newly-admitted  If the debt is more onerous
partner for a partnership
obligation, ask, “when was the Property Rights of a Partner
partnership obligation incurred?
Was it incurred PRIOR TO /  see the 3 major
AFTER the new partner’s classification of the
admission to the partnership? property rights of
partners
Q: ABC partnership admitted D as new  plus right to formal
partner. The ABC partnership incurred the accounting
following liabilities. ABC- 100; X- 30K, A-  plus the right to the
50k. What is the liability of D as a new access of partnership
partner? If A is a managing partner. book
A: GR: up to capital contribution only unless
he bound himself to be solidarily liable
 Rights in specific
NOTA BENE: application of proportionate
partnership property = a
sharing:
partner is co-owner with his
a) if A is a general partner
partners of specific
b) both debts are due and
partnership property; see
demandable
1811 = co-ownership sui
c) receipt was given in
generis.
the name of the
partnership  Cf. co-ownership in
d) payment should be partnership law and co-
applied to the most ownership in property law.
onerous In the former, a co-owner
LIMITED PARTNER IS LIABLE WHEN: may sell his share even
a) he participated in the without the knowledge and
management consent of the other co-
b) if surname appears in the owners, whereas, in
partnership name except; partnership law, such would
a) already existing surname not be allowed.
b) if also the surname of a  Interest in partnership =
general partnership pertains to the share in
c) if at the same time general profits and surplus.
or limited partner
» Article 1892 subagent is not equivalent to Sharing of the Partners in the Profits and
substitute in the Losses
64
MOTO-Q NOTES

 if there is a STIPULATION (except ANSWER: The secretary’s appointment will
when there is a stipulation where bind the partnership. As to the accountant, it
one or more of the parties shall be should be resolved as to the partnership
excluded from the profits, the having the controlling interest, such
stipulation shall be VOID) controlling interest being dependent on the
 if there is NO STIPULATION , aggregate capital contributions of those who
sharing shall be in proportion to the appointed vis-à-vis those who opposed.
capital contributions.
 What about the Industrial Partner?
=> give him the value of his service;
the balance of which should be  MANAGEMENT ARRANGEMENTS
distributes to the capitalist partners  One managing partner
in proportion to their capital  Solidary management
contributions.  Joint Management
 Partner as Agent
RIGHTS/ OBLIGATIONS OF PARTNERS

BAR QUESTION: A, B, and C entered into a
partnership. Agreed to Php360 share profits  To make good his promise to
equally. C assigned his interest in the
contribute MONEY PROPERTY
partnership to X. Therefore, X demanded
INDUSTRY
share in the profits and management. Are
 If money = equally, unless there is a
these demands of X legally justifiable?
stipulation
ANSWER: As to the management, an  If in default, he is a debtor of the
assignee cannot participate in the partnership plus interest plus
management, not even right to access… As damages (i= 12%)
to the share in the profits, an assignee has  If property = ask what was actually
the right to receive the profits the assignor contributed. Was it the property
would have received. As to interest, a itself or the use of such property. If
partner may assign however limited only to property itself => transfer ownership
the receipt of such amount and nothing plus obligation to warrant in case of
more. Therefore, to receive PHp 120k eviction. If thing was lost before
(360/3) delivery, the partner bears the loss,
RES PERIT DOMINO. See
Exceptions (1) FUNGIBLE (2) FOR
SALE (3) WITH APPRAISAL.
 Partnership bears the loss if
possession is with partnership
already.
 If services, SPECIFIC
BAR QUESTION: W (industrial partner), X PERFORMANCE WOULD NOT
(industrial partner), Y (P 50 K) and Z (P 20 LIE. Remedy is to demand the value
K) entered into a partnership agreement. of service plus damages incurred by
W and X will act as managing partners. partnership
Thereafter, two persons were appointed:. PROPERTY RIGHTS:
W and X appointed the SECRETARY, one 1) specific partnership property » a partners
of the two persons appointed. Y and Z is a co-owner as to his co-parners not
however opposed such appointment. The
ACCOUNTANT, the other person named, partnership;l co-ownership is sui generis
was appointed by W and Z, whose 2) interest
appointment was however opposed by X 3) participate
and Y. Whose appointment will bind the
Partnership? Q: Can a creditor of a co-owner levy such
interest of a co-owner in a partnership land
65
MOTO-Q NOTES

A: Yes, but he cannot do so if indebted to DISSOLUTION:
partnership » change in relation where partner ceases to
be associated in carrying on the business of
Q: W and X are managing partners, Y-50k, partnership
Z-20k. W and X were appointed as »marriage of partners not a ground
secretary by 2 persons, opposed to by Y
and Z; accountant appointed by W and Z but Entry of a new Partner
opposed by X and Y
A: In the 1st case, YZ has no right to oppose.  General Rule: It will
In the second case, controlling partners dissolve the partnership
shall prevail based on capital contribution.  Exceptions:
Appointment shall not be valid having
a) act is necessary to wing
opposed by Y who has controlling interest.
up partnership affairs
This case is called subsidiary management
b)
CAUSES OF DISSOLUTION
1) extrajudicial
FIDUCIARY OBLIGATIONS; Honesty and a) voluntary » No. 1 & 2 of Article
Good faith starts during the negotiation 1830
stage. Obligation would continue not only up b) involuntary » No. 3-7
to dissolution but also until termination. 2) judicial Article 1831
Q: A B C assigned whole interest to X
REMEDIES OF A NON-DEFAULTING against the will of A & B and decided to
PARTNER dissolve the partnership, X filed for a
dissolution, which dissolution will be valid?
 Specific performance A: That made by A & B is valid. X was mere
 Dissolution assignee, no legal interest to file
 RESCISSION IS NOT A REMEDY dissolution for he is not by law a partner.
AS TO DISTRIBUTION: DEATH OF A PARTNER:

»As to stipulation, if it excludes a partner, » if general, partnership is not extinguished
stipulation is void not the partnership. if biz nis continued or not stated due to
Share in the Losses: unanimous consent.
1. determine agreement
Q: if one partner is excluded valid? EFFECT of DISSOLUTION:
A: depends: if capitalist, stipulation is void; if » termination of authority of partners.
industrial partner was excluded – valid
among partners but void as to third persons.
–Article 1816
2. if no stipulation to losses, use stipulation
on the sharing of profits
3. no stipulation at all = share in their capital
contribution
LIABILITY AS TO:
Contractual Obiligation = joint
Joint and solidarily 1822 & 1823 – tortious/
wrongful acts of partners
LIABILITY OF NOT GIVEN POWER TO APPOINT
SUBSTITUTE
Q: Bought set of SCRA in the account of the
partnership, can partnership be liable?
A: It depends if the act is for the apparent
carrying of the usual business of
partnership.
Q: Can partnership be liable even if not
related to the business?
A: Yes, if such party was not authorized
66
MOTO-Q NOTES

LIABLE if substitute NOT LIABLE if the Loan

All acts of the
substitute
acted outside the
scope of authority
substitute acted
within the scope of
 consider first the kind
appointed against
the prohibition of
or there is bad faith
or negligence on
authorization
representation of the
whether mutuum or
the principal shall the part of the principal and acted commodatum
be void substitute with due diligence
and in good faith  mutuum or simple loan-
the agreement between
» the agent is not an
insurer of the the parties to constitute
success
business
of
of
the
the
a loan is already a
principal binding agreement,
however, unless it is
delivered there is no
perfected contract of
EFFECTS OF APPOINMENT OF loan yet.
SUBSTITUTE/LIABILITY IN DAMAGE TO  If the contract of loan is
PRINCIPAL not yet perfected,
cannot be revoked
GIVEN POWER TO APPOINT
 In mutuum, if without
express stipulation,
contract is
Designated Not designated compensatory
 case: Rep vs Bagtas
Not liable unless he knew that the Agent shall be responsible for the acts of the substitute if substitute is
designated person is notoriously notoriously incompetent or insolvent
incompetent or already insolvent  case: Soccoro- What is the
effect of a declaration that
the interest is
unconscionable? Still liable
to pay interest but at the
legal rate
 in a contract of
commodatum, the bailor
need not be the owner
because there is no transfer
of ownership
VII. CREDIT  in mutuum, lender has to
TRANSACTIONS be the owner
 precarium, a special form of
 not the same as bailment commodatum wherein the
bailor may demand the
 not all credit transactions
thing at will (1947)
are bailment
 RA 8183 all monetary
 in bailment, there has to be
obligations shall be settled
a delivery (deposit, loan,
in Philippine currency which
mutuum, commodatum)
is the legal tender. However,
 in some credit transactions,
parties may agree that the
delivery is not necessary
obligation be settled in
(guaranty, mortgage)
other currencies
 sale may be a credit
 thing pledged must be
transaction of the sale is on
delivered to the creditor
credit
unlike in chattel mortgage
 not all credit transactions
and real estate mortgage
are contracts (judicial
deposits, legal deposits)
67
MOTO-Q NOTES

Deposit debtor
 essentially gratuitous,  surety- insures the
unless stipulated otherwise solvency of the debt
 irregular deposits- a
depositary has the right to
use the thing Pledge/ Mortgage
 in deposit, object cannot
refer to future thing  free disposition
because it requires delivery means that the
mortgagor should be
 characteristics capacitated
 pledge may be
a) principal perfected even if
b) real delivery is merely
c) gratuitous or onerous constructive
 liability of the pledgor
 kinds of deposit or mortgagor is only up
a) judicial to the value of the
b) extra-judicial pledged/ mortgaged
property. Nawala na sa
i. Conventional / voluntary kanya yung property,
ii. Necessary kaya tama na yun unless
iii. Legal expressly stipulated
otherwise
 creditor cannot
recover if property is
Guaranty covered by Recto Law
 no right of
 covered by the redemption in chattel
Statute of Frauds mortgage and pledge
1. Personal- personal commitment TABLE 1

to answer for the debt, default of
another
2. Real – guarantor delivers PLEDGE All are Real Article Unilateral
collateral accessory 1316, Article
contracts 2093)
a. pledge
b. chattel mortgage A pledge or
c. real estate mortgage mortgage
But a promise to
cannot exist
d. antichresis without a valid constitute a
obligation pledge gives rise
to a personal
action between
the parties;
 continuing guaranty – public interest.
Art. 2053
 the only parties in
guaranty are the
creditor and the debtor
 sub guarantor-
benefit of excussion
 co-guarantor- benefit
of division
 guarantor- insures
the solvency of the
68
MOTO-Q NOTES

unilateral
Nevertheless, a Solemn or
CHATTEL pledgor or Formal (De leon)
MORTGAGE mortgagor CM Registration
maybe is indepensable.
constituted to If not recorded,
guarantee the binding on the
performance of parties.
a voidable/ Promise to
unenforceable constitute
contract. mortgage.
It may Affidavit of GF to
guarantee a binf 3rd parties.
natural If not executed,
obligation mortgage may
still bind third
persons if the
latter had
knowledge of
the promise to
constitute
mortgage
REAL ESTATE Solemn. (Vitug)

MORTGAGE Must be
» maybe recorded, if not
foreclosed binding to
even if only parties.
written in a promise»
private personal/action
instrument
BILATERAL
A conditional Solemn.
ANTICHRESIS obligation may
also be
secured. Amount of
principal and
interest must be
in writing, if not
void.
TABLE 2
69
MOTO-Q NOTES

KINDS RIGHT TO USE RIGHT TO INDIVISIBILITY
APPROPRIATE
(PACTUM
COMMISORIUM)
NONE, unless Creditor cannot Pledgor or

PLEDGE 1. authorized appropriate. Any Mortgagor is
2. necessary for stipulation to the indivisible,
the contrary is null eventhough debt
preservation of and void. may be divided
the thing among the
However, in successors-in-
pledge, if at the interest of the
CHATTEL Not applicable unless first auction the debtor/ creditor.
MORTGAGE stipulated thing sold, a 2nd
one with the EXCEPT:
same formalities Where several
shall be held, but things are given
there is no sale in a pledge or
either. Creditor mortgage, each
REAL ESTATE Not applicable unless may appropriate one of them
MORTGAGE stipulated but the shall guarantees only
acquit the entire a determinate
claim. portion of the
credit.
Encashment of a
deposit Right of
certificate given Extinguishment.
as security.
» not postdated Indivisibility is
ANTICHRESIS Only right to receive check (Chua vs. not affected by
fruits unless CA, Sept. 26, the fact that the
stipulated. 1989) debtors are not
solidarily liable.
70
TABLE 3: RIGHTS OF MORTGAGOR
KINDS RIGHT OF SALE/ RIGHT TO RIGHT TO RECOVER SPECIFIC PERFORMANCE

FORECLOSURE BID DEFICIENCY
Article 2112 The YES. VOLUNTARY: None YES, but pledged deemed abandoned.
creditor to whom Provided he even if there’s
PLEDGE the credit has not is the not stipulation.
been satisfied in the only Article 2112, Article
due time pledged bidder. 2115
may proceed Article
before a NP. X x 2113 LEGAL: YES
x
1. Judicial YES. Except on YES, but chattel mortgage deemed abandone

Foreclosure installment.
CHATTEL Sec.13 Article
MORTGAGE 1508
2. Extrajudicial
Foreclosure Sec.
14 Article 1508
1. Judicial (Rule YES. Rules of Court YES, but security deemed abandoned.
REAL ESTATE 68 of the Rules on Foreclosure.
MORTGAGE of Court)
2. Extrajudicial
Foreclosure Act.
3135
ANTICHRESIS
TABLE 4: RIGHTS OF PLEDGOR
KINDS
RIGHT TO ALIENATE RIGHT TO BID RIGHT TO RECOVER EXCESS EQUITY OF REDEMPTION
PLEDGE ARTICLE 2097 YES!

ARTICLE 2108 YES
ARTICLE 2113 VOLUNTARY: NONE:
ARTICLE 2115
LEGAL: YES, ARTICLE 2121
NONE
CHATTEL
MORTGAGE
Sale valid and buyer may acquire ownership but if not consented to by mortgagee, mortgagor is criminally liable. (Art.
319 RPC)
YES. Act 1528 Equity of redemption within 90 days from order of foreclosure. After foreclosure no right of
redemption.
Equity of redemption within 90 days from foreclosure. After foreclosure no right of redemption. Except foreclosure of real
property by banking institution and in extrajudicial foreclosure of real property—full amount of purchase price within 1
year
REAL ESTATE
MORTGAGE
Article 2130 A stipulation forbidding the owner from alienating the immovable mortgaged shall be void.
YES (Rules of Court on Foreclosures)
ANTICHRESIS
Same as above, Article 2130. YES. Article 2137, Rules on Foreclosures
VII. TORTS
» there is no need for a pre-existing contract
Q: Why file for action for quasi-delict?
A: Claim for moral damages which has
many grounds
Essential Elements:
I. Act or Omission there being
fault/negligence
» negligent act, even acts punished by law
Dulay vs. CA
» Quasi-delict is not limited to negligent
acts, even a malicious or intentional act may
be the basis of a quasi delict.
Article 2177
» acts punished by law maybe the basis, the
only exception is that there be no double
recovery
Q: May an action for quasi-delict subsist

with a criminal case?
A: Yes, they are distinct from each other
Q: Driver in a acquitted in a criminal case,

heirs filed civil case for quasi-delict, may
action prosper?
A: Yes, in quasi delict mere preponderance
of evi is enough
II. DAMAGES
» any hurt or harm inflicted

Q: What will be the degree of diligence
required?
A: That of a good father of a family or that
which the law provides
Extraordinary » common carrier, doctors,
banks
Q: Who has the burden of proof?
A: plaintiff
III. CAUSAL CONNECTION BETWEEN

ACT OR OMISSION AND DAMAGE
- end-
Share niyo to!
To God be the glory

MOTO-Q NOTES
Atty. Crisostomo Uribe notes
Civil Law Review 2
Bogs Quitain; Tere Morales; Paulette Tongcua; Tino Occiano; Budz Occiano
78
MOTO-Q NOTES
Atty. Crisostomo Uribe notes
Civil Law Review 2
Bogs Quitain; Tere Morales; Paulette Tongcua; Tino Occiano; Budz Occiano
79

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MOTO-Q NOTES

Morales, Occiano, Tongcua, Occiano, Quitain

Atty. Crisostomo Uribe

When the fulfillment of the condition 1. Active Subject – creditor/obligee

Alternative conditions – simple when

3. Juridical tie – vinculum juris

Art. 1156. An obligation is a juridical Q: When can there be a tie? What

Q: Does a creditor have a right under

Atty. Crisostomo Uribe

Atty. Crisostomo Uribe

Requisites for it to arise:

There must be a conviction. Proof

a. What Juridical relationship was Culpa extra contractual includes:

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Cangco v. Manila Railroad (18 Phil

Q: What were the defendant's July 7, 2007 (7/7/07)

A: Determine first the nature of the I promise to pay B P1M

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Q: A borrowed from B P1M, payable at

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Art. 1201. The choice shall produce no

Art. 1202. The debtor shall lose the

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(1) If one of the things is lost Example:

The same rules shall be applied to 1. if fault of debtor after

2. Choice of creditor; fault of debtor.

a) alternative - creditor may opt to choose from

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- debtor can’t be held liable. SECTION 4. - Joint and Solidary

Art. 1209. If the division is impossible,

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BAR EXAM QUESTION:

1. Joint and several. Example:

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A: No. the payment of one debtor

A: If joint- X with respect to A can Q: If solidary, C became insolvent,

Q: If mixed: A: 120. The share of 1 solidary debtor

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A: Yes. The debts are separate and A: Depends on the agreement.

Q: If dismissed because contract is * Sir does not agree! Rules on

BAR EXAMINATION QUESTION: BAR EXAM QUESTION:

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Art. 2209. If the obligation consists in A: General Rule: Yes

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- if obligation is monetary in character A: Yes. Gross negligence is equivalent

“Mora”; non-fulfillment with respect to

A: No. Better term is bad faith or - no delay in obligation not to do.

WAIVER of future fraud is void: 1. If determinate thing to deliver,

NEGLIGENCE (memorize) Q: A and B entered into a lease

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*As a rule there has to be a demand. Reciprocal obligations:

*Demand need not be in writing; It is - arise from the same transaction.

However, the demand by the creditor - if both in delay, no right of

(3) When demand would be In obligation to give, Article 1262

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If the thing is indeterminate or The court shall decree the rescission

Q: A ring was delivered to a jewelry (2) Those agreed upon in

A: Yes. Before the fortuitous event, (3) Those undertaken in fraud