Parts 7-9

Question 1

Action for reconveyance

Answer 1

An action for reconveyance is a legal and equitable remedy granted to the rightful owner of land which has been wrongfully or erroneously registered in the name of another for the purpose of compelling the latter to transfer or reconvey the land to him.

Question 2

Deed of Conveyance

Answer 2

A legal document showing that the owner of a piece of land, a property, etc. has changed: The title of the property passes by means of a deed of conveyance carried out by a notary.

Conveyance deed is a legal document that is used to transfer the title of property from one person to another as a gift, an exchange, a lease, a mortgage, etc. A gift deed, mortgage deed, lease deed or sale deed can also be called as a conveyance deed.

Question 3

An heir deprived of one’s share because of non-participation may file an action for
reconveyance within ten (10) years, which is based on an implied or constructive trust.

Answer 3

Ok.

Question 4

General rule on donations by reason of marriage

Answer 4

BEFORE MARRIAGE: Future spouses cannot donate to each other more than 1/5 of their present property. Excess will be considered void.
XPN: If they are governed by ACP

DURING MARRIAGE: Donations made by spouses to each other are void
XPN: Moderate gifts on the occasion of any family rejoicing; Donation mortis causa

Question 5

Grounds to revoke donation propter nuptias

Answer 5

a. Marriage without the needed parental consent
b. Marriage is annulled and donee is in bad faith
c. If it is with a resolutory condition and the condition is complied with
d. Marriage is not celebrated
e. Donee commits acts of ingratitude
f. Marriage is judicially declared void ab initio
g. In legal separation and donee is the guilty spouse

Question 6

Donation Proper Nuptias vs. Ordinary Donation

Answer 6

(1) Formalities
DPN: governed by rules on ordinary donations except if future property, it must conform with formalities of wills
OD: governed by rules of donation

(2) Present Property)
DPN: may be donated up to 1/5 of donor’s present property
OD: no limit except that donor shall leave property enough for his support

(3) Future Property
DPN: may be included provided donation is mortis causa
OD: cannot be included

(4) Grounds for revocation
DPN: Art. 86 of FC
OD: Arts. 760, 764, 765 NCC

Question 7

Prescriptive Periods for Filing Action for Revocation of Donation Propter Nuptias

Answer 7

a. MARRIAGE NOT CELEBRATED: 5 years from the time marriage is not solemnized on fixed date
b. MARRIAGE JUDICIALLY DECLARED VOID: by operation of law if donee-spouse contracted subsequent void marriage in bad faith; if not, 5 years from finality of judicial declaration of nullity
c. MARRIAGE TAKES PLACE WITHOUT THE REQUIRED PARENTAL CONSENT: 5 years from celebration of marriage
d. RESOLUTORY CONDITION IS COMPLIED WITH: 5 years from happening of condition
e. MARRIAGE IS ANNULLED AND DONEE IN BAD FAITH: 5 years from finality of decree
f. DONEE COMMITS AN ACT OF INGRATITUDE: 1 year from donor’s knowledge of that fact
g. IN CASES OF LEGAL SEPARATION: 5 years from the time the decree of separation has become final

Question 8

Donation

Answer 8

An act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it.

Perfected from the moment the donor knows of the acceptance by the donee.

Question 9

Characteristics of donation

Answer 9

1. Unilateral - obligation imposed on the donor

2. Consensual - perfected at time donor knows of acceptance

Question 10

Requisites of Donation

Answer 10

1. Donor must have capacity to make the donation of a thing/right
2. Intent to make the donation out of liberality to benefit the donee
3. Delivery (whether actual or constructive)
4. Donee must accept or consent to donation
5. Compliance with the prescribed form

Question 11

Actual vs. Constructive Delivery

Answer 11

Actual Delivery: If the goods are physically given into the possession of the buyer, the delivery is an actual delivery.

Constructive delivery: The transfer of goods can be done even when the transfer is effected without a change in the possession or custody of the goods.

Question 12

Kinds of Donation

Answer 12

1. As to Effectivity
2. As to Consideration
3. As to Effectivity of Extinguishment

Question 13

Kinds of Donation as to Effectivity

Answer 13

1. Inter vivos
   - takes effect during the lifetime of the donor, even though the property shall not be delivered till after donor’s death or even though it is subject to resolutory or suspensive condition
2. Mortis causa
   - takes effect upon the death of the donor and shall be governed by the rules of succession
3. Propter Nuptias
   - donation by reason of and in consideration of marriage, before its celebration, in favor of one or both of the future spouses

Question 14

Suspensive vs. Resolutory Condition

Answer 14

If the obligation may not be enforced until the uncertain event occurs, the condition is suspensive.

If the obligation may be immediately enforced but will come to an end when the uncertain event occurs, the condition is resolutory.

Question 15

Kinds of Donation as to Consideration

Answer 15

1. Pure and simple
   - when the cause of the donation is the pure liberality of the donor in consideration of the donee’s merits
2. Remuneratory or compensatory
   - donation is given out of gratitude on account of the services rendered by the donee to the donor, provided the services do not constitute a demandable debt
3. Modal
   - when the donation imposes upon the donee (necessarily future) a burden less than the value of the thing given
4. Onerous
   - the value of which is considered the equivalent of the consideration for which it is given and thus governed by the rules of obligations and contracts

Question 16

What law shall govern where a contract is seemingly a remuneratory donation but is silent as to the value of the burden imposed on the donee of a thing of undetermined value?

Answer 16

Law on contract instead of law on donations

Question 17

Kinds of Donation as to Effectivity of Extinguishment

Answer 17

1. Pure - not subject to any condition or period
2. Conditional - subject to suspensive or resolutory condition
3. With a term - subject to a period, suspensive or resolutory

Question 18

Donation Inter Vivos vs. Donation Mortis Causa

Answer 18

(1)
DIV: disposition and acceptance to take effect during lifetime of donor and donee
DMC: disposition happens upon the death of donor; acceptance by donee can only be done after donor’s death

(2)
DIV: already pertains to the donee unless there is a contrary intent
DMC: even if there is a term of effectivity and effectivity is upon the death of the donor, still entitled to fruits

(3)
DIV: formalities required - follow law on donations and certain kinds of donations and law on obligations and contracts (suppletory)
DMC: formalities required - follow law on succession to be valid, and donation must be in the form of a will

(4)
DIV: irrevocable at the instance of the donor; may be revoked only by reasons provided by law
DMC: revocable ad mutuum (exclusive will of donor)

(5)
DIV: revoked only for reasons provided by law (except onerous donations)

Question 19

In case of doubt, the conveyance should be deemed as donation _____

Answer 19

INTER VIVOS rather than mortis causa, in order to avoid uncertainty as to the ownership of the property subject of the deed.

Question 20

Forms of Donation

Answer 20

1. Movable Property

2. Immovable Property

Question 21

Rules on donation of movable property

Answer 21

a. If the value exceeds P5,000, the donation and acceptance shall be made in writing. Otherwise, the donation shall be void.
b. If the value is below P5,000, donation may be made orally or in writing. If oral, it must be with simultaneous delivery of the thing or of the document representing the right donated.

Question 22

Rules on donation of immovable property

Answer 22

a. Donation must be made in a public instrument, specifying therein the property donated and the value of the charges which the donee must satisfy
b. The acceptance of the donee may be made in the same deed of donation or in a separate public document
c. If the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic form, and this step shall be noted in both instruments
d. Acceptance must be made during the lifetime of the donor

Question 23

A donation mortis causa must comply with the formalities of a last will and testament otherwise; it would be void and would produce no effect. T or F.

Answer 23

True.

Question 24

Who are disqualified to donate?

Answer 24

1. Guardians and trustees with respect to property entrusted to them
2. Husband and wife, to each other
3. Between paramours/persons guilty of adultery or concubinage at the time of donation
4. Between parties guilty of same criminal offense, in consideration thereof
5. Made to public officers, wife, descendant, ascendant, by reason of his office
6. Priest who heard confession of donor during his last illness
7. Relatives of priest within the 4th degree, church order, or community where priest belongs
8. Physician, nurse, etc. who took care of donor during his last illness
9. Individuals, corporations, and associations not permitted by law

Question 25

In case of donation of the same thing to 2 or more different persons, the rules on ____ shall apply.

Answer 25

Double sale

Question 26

Capacity to be Donor

Answer 26

All persons who may contract and dispose of their property may give donation. Those who cannot give consent to a contract cannot be donors.

** Donor’s capacity shall be determined as of the time of the “making” and not at the “perfection” of the donation.

Question 27

Who may accept donations?

Answer 27

1. Natural and juridical persons not especially disqualified by law
2. Minors and other incapacitated
   a. by themselves if pure and simple donation or if it does not require written acceptance
   b. by their parents or legal representatives if the donation is onerous or conditional or needs written acceptance [NATURAL GUARDIAN if not more than 50,000; otherwise COURT APPOINTED GUARDIAN]
3. Conceived and unborn child, represented by person who would have been guardian if already born

Question 28

Natural vs. Juridical person

Answer 28

Natural Person is a human being and is a real and living person.

Art. 44. The following are juridical persons:

(1) The State and its political subdivisions;
(2) Other corporations, institutions and entities for public interest or purpose, created by law; their personality begins as soon as they have been constituted according to law;
(3) Corporations, partnerships and associations for private interest or purpose to which the law grants a juridical personality, separate and distinct from that of each shareholder, partner or member.

Question 29

Onerous donation

Answer 29

One which is subject to burdens, charges or future services equal to or more in value than the thing donated.

An onerous donation imposes upon the donee a reciprocal obligation; this is made for a valuable consideration whose cost is equal to or more than the thing donated.

Question 30

Checklist for donation

Answer 30

1. Whether onerous or gratuitous – if onerous, governed by law on contracts.
2. If gratuitous, whether mortis causa or inter vivos – if mortis causa, governed by law on succession
3. If inter vivos, whether perfected or not (made known to the donor). If no perfection, donation is void.
4. If perfected, check for the capacity of the donor to give and the donee to receive. If no capacity, donation is void.
5. Compliance with form, otherwise void.
   a. Art. 748 (movable)
   b. Art. 749 (immovable)

Question 31

Rules on double donations

Answer 31

Priority in time, priority in right.

MOVABLE: one who first takes possession in good faith
IMMOVABLE: one who recorded in registry of property in good faith
a. no inscription, one who first took possession in good faith
b. in absence thereof, one who presents oldest title

Question 32

Effects and limitations of donations

Answer 32

1. Donor must reserve sufficient means for his support
2. Donation of future property is prohibited
3. Donation shall be limited to what the donor may give by will. Otherwise, the donation is inofficious.

Question 33

inofficious

Answer 33

of or relating to a disposition of property that has the effect of depriving descendants of the shares of a succession to which they are entitled by law.

To briefly recap, “inofficiousness” exists when a donation exceeds the legitime reserved to compulsory heirs. The inofficiousness can then be raised and the excess reduced only after the death of the decedent. Any earlier would be premature.

Question 34

Will

Answer 34

An act whereby a person is permitted with the formalities prescribed by law to control to a certain degree the disposition of his estate to take effect after his death.

Question 35

Characteristics of a will

Answer 35

1. Unilateral (does not need the approval of any other person)
2. Strictly personal act (cannot be left to the discretion of a third person)
3. Free and voluntary act (any vice affecting testamentary freedom can cause the disallowance of the will)
4. Formal and solemn act (formalities are essential for validity
5. Act mortis causa (takes effect only after the death of the testator)
6. Ambulatory (revocable at any time during the testator’s lifetime
7. Individual act (2 or more persons cannot make a single joint will, either for their reciprocal benefit or for another person)

Question 36

Animus testandi

Answer 36

Testator’s intent

Question 37

Requirements for Validity of Wills

Answer 37

1. Extrinsic/Formal Validity: refers to the requirement of form and determined in probate proceedings; it includes:
   a. formalities provided by law
   b. testamentary capacity
2. Intrinsic/substantive validity: refers to the substance of the provisions and generally determined after probate

Question 38

Governing law on extrinsic vs. intrinsic validity of will as to time

Answer 38

EV: law at the time of execution

IV: For Filipinos, law at the time of death; For foreigners, national law

Question 39

Governing law on extrinsic vs. intrinsic validity of will as to place

Answer 39

EV: a) citizenship; b) domicile; c) residence; d) place of execution; e) Philippine law

IV: For Filipinos, Philippine law; For foreigners, national law

Question 40

Rules of Formal Validity of Wills

Answer 40

Every testator, whether Filipino or alien, wherever he may be, has five choices as to what law to follow for the form of his/her will:

a. law of his citizenship
b. law of the place of execution
c. law of his domicile
d. law of his residence
e. Philippine law

Question 41

Kinds of Wills

Answer 41

a. Notarial/Attested: an ordinary will acknowledged before a notary public by the testator and the instrumental witnesses
b. Holographic: a will totally handwritten, dated, and signed by the testator alone

Question 42

Formalities of a will

Answer 42

1. Must be in writing

2. Executed in a language or dialect known to the testator

Question 43

Probate

Answer 43

Probate is a court process that ensures that the wills follow the law in such things as compulsory heirs in addition to the actual form of the will. It requires filing the will in court. It also requires filing evidence of the validity of the will.

Question 44

Requirements for Notarial Wills

Answer 44

1. Subscribed by the testator or his agent in his presence and by his express direction at the end thereof, in the presence of the witnesses
2. Attested and subscribed by at least 3 credible witnesses in the presence of the testator and of one another
3. The testator or his agent, must sign every page, except the last, on the left margin in the presence of the witnesses
4. The witnesses must sign every page, except the last, on the left margin in the presence of the testator and of one another
5. The witnesses must sign every page, except the last, on the left margin in the presence of the testator and of one another
6. All pages must be numbered correlatively in letters on the upper part of each page
7. Attestation clause stating:
   a. the # of pages of the will
   b. the fact that the testator or his agent under his express direction signed the will and every page thereof, in the presence of the witnesses
   c. the fact that the witnesses witnessed and signed the will and every page thereof in the presence of the testator and one another
8. Acknowledgement before a notary public

Question 45

Two kinds of end as to signing of the will

Answer 45

1. Physical end: where the writing stops
2. Logical end: where the last testamentary disposition ends

Signing in either end is permissible.

Question 46

Acts of witnessing

Answer 46

a. Attesting - act of witnessing

b. Subscribing - act of signing their names in the proper places of the will

Question 47

When no marginal signature is required

Answer 47

If the entire document consists of only 2 sheets, the first containing the will and the second, the attestation clause, there need not be any marginal signatures at all.

Question 48

Attestation clause need not be signed by the testator.

Answer 48

Okay

Question 49

Attestation Clause vs. Acknowledgment Clause

Answer 49

These two are separate and distinct and cannot be merged.

Acknowledgment: The act of one who has executed a deed in going before some competent officer or court and declaring it to be his act or deed. It involves an extra step undertaken whereby the signatory actually declares to the notary public that the same is his or her own free act and deed.

Question 50

Two-fold purpose of the Acknowledgment

Answer 50

1. To safeguard the testator’s wishes long after his demise

2. To assure that his estate is administered in the manner that he intends it to be done

Question 51

Certification of acknowledgment need not be signed in the presence of the testator and witnesses

Answer 51

Ok.

Question 52

Requirements for the notary public

Answer 52

1. Must be duly commissioned for the locality where the acknowledgment is made
2. Must not be one of the 3 attesting witnesses

Question 53

Requirements for holographic wills

Answer 53

1. Shall be entirely handwritten by the testator
2. Dated by him
3. Signed by him

**not subject to any form, may be made in or out of the Philippines, and need not be witnessed.

Question 54

Joint will

Answer 54

One document which constitutes the wills of 2 or more individuals. These kinds of wills are void.

Question 55

Reasons of Public Policy against joint wills

Answer 55

1. Limitation on the modes of revocation
2. Diminution of testamentary secrecy
3. Danger of undue influence
4. Danger of one testator killing the other

Question 56

Qualifications of witnesses to wills

Answer 56

1. Of sound mind
2. At least 18 years of age
3. Not blind, deaf, or dumb
4. Able to read and write
5. Domiciled in the Philippines
6. Must not have been convicted of falsification of a document, perjury, or false testimony

Question 57

Creditors can be witnesses to his or her debtor’s will. A mere change on the estate of the testator for the payment of debts due at the time of death does not prevent the creditor from being a competent witness. T or F.

Answer 57

True.

Question 58

Codicil

Answer 58

A supplement or addition to a will, made after the execution of a will and annexed, to be taken as a part of the will. It explains, adds, or alters, any disposition made in the original will.

Question 59

Requirements for Incorporation by Reference

Answer 59

If a will refers to a document or paper, such document or paper will be considered a part of the will if the following requisites concur:

1. The document or paper referred to in the will must be in existence at the time of the execution of the will
2. The will must clearly describe and identify the same, stating among other things the number of pages thereof
3. It must be identified by clear and satisfactory proof as the document or paper referred to therein
4. It must be signed by the testator and the witnesses on each and every page except in case of voluminous books of account or inventories

Question 60

Modes of revoking a will

Answer 60

1. By implication of law
2. By subsequent will
3. By physical destruction

Question 61

Probate

Answer 61

Judicial process of proving:

1. compliance with formal requirements of will
2. testamentary capacity of the testator

Question 62

2 Kinds of Probate

Answer 62

1. Post-mortem: after testator’s death

2. Ante-mortem: during his lifetime

Question 63

Obligation

Answer 63

An obligation is a juridical relation whereby a person (called the creditor) may demand from another (called the debtor) the observance of a determinative conduct (the giving, doing, or not doing), and in case of breach, may demand satisfaction from the assets of the latter.

Question 64

Elements of a contract

Answer 64

a. essential - consent, object, consideration
b. natural - can be suppressed or waived (ex: warranty) (xpn: for pre-loved items, you cannot demand beyond wear & tear); those which are deemed to exist in certain contracts, in the absence of any contrary stipulations, like warranty against eviction (Art. 1548.) or hidden defects (Art. 1561.)

c. accidental - those which may be present or absent
depending on the stipulations of the parties, like conditions, interest, penalty, time or place of payment, etc.

Question 65

Defective Contracts

Answer 65

a. rescissible
b. voidable
c. unenforceable
d. void & inexistent

Question 66

Principal characteristics of a contract

Answer 66

1. Freedom or autonomy of contracts
   - parties may establish such stipulations, clauses, terms, and conditions as they may deem convenient, provided, they are not contrary to law, morals, good customs, public order, and public policy.
2. Obligatoriness of contracts (obligatory force)
   - obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith
3. Mutuality of contracts
   - contracts must bind both and not one of the contracting parties
4. Consensuality of contracts**
   - contracts are perfected, as a general rule, by mere consent, and from that moment the parties are bound not only by the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law
5. Relativity of contracts
   - contracts take effect only between the parties, their assigns and heirs, except in cases where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation, or by provision of law

Question 67

Characteristics of contract of sale

Answer 67

(1) Consensual - it is perfected by mere consent without any further act;

(2) Bilateral - both the contracting parties are bound
to fulfill correlative obligations towards each other — the seller, to deliver and transfer ownership of the thing sold and the buyer, to pay the price;

(3) Onerous - the thing sold is conveyed in consideration of the price and vice versa
burden (seller - property/ownership; buyer - money)

(4) Commutative - the thing sold is considered the
equivalent of the price paid and vice versa. However,
the contract may be aleatory as in the case of the sale of a hope (e.g., sweepstakes ticket) gross inadequacy of price can make a contract of sale void

(5) Nominate - it is given a special name or designation
in the Civil Code, namely, “sale”; and

(6) Principal - it does not depend for its existence and
validity upon another contract.

Question 68

What is a contract of sale?

Answer 68

By the contract of sale one of the contracting parties obligates himself to transfer the ownership and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent. (1458)

The contract of sale is an agreement whereby one of the parties (called the seller or vendor) obligates himself to deliver something to the other (called the buyer or purchaser or vendee) who, on his part, binds himself to pay therefor a sum of money or its equivalent (known as the price).

Question 69

Stages of a contract of sale

Answer 69

(1) negotiation, starting from the time the prospective contracting parties indicate interest in the contract to the time the contract is perfected
(2) perfection, which takes place upon the concurrence of the essential elements of the sale

[3] performance

(3) consummation, which commences when the parties perform their respective undertakings under the contract of sale, culminating in the extinguishment of the contract.

Question 70

Rescissible contracts

Answer 70

1. Those which are entered into by the guardians whenever the wards whom they represent suffer lesion by more than one-fourth of the value of the things which are the object thereof (in behalf of wards)
2. Those agreed upon in representation of absentees, if the latter suffer the lesion stated in the preceding number (in representation of absentees)
3. Those undertaken in fraud of creditors when the latter cannot in any other manner collect the claims due them (those undertaken in fraud of creditors, when the latter cannot in any other manner collect claims due them) - accion pauliana
4. Those which refer to things under litigation if they have been entered into by the defendant without the knowledge and approval of the litigants or of competent judicial authority (things in litigation)
5. All other contracts specially declared by law to be subject to rescission (other instances)

1381

Question 71

Voidable contracts

Answer 71

1. Those where one of the parties is incapable of giving consent to a contract
2. Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud

1390

Question 72

Unenforceable contracts

Answer 72

(1) Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers;
(2) Those that do not comply with the Statute of Frauds as set forth in this number. In the following cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum, thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents:
(a) An agreement that by its terms is not to be performed within a year from the making thereof;
(b) A special promise to answer for the debt, default, or miscarriage of another;
(c) An agreement made in consideration of marriage, other than a mutual promise to marry;
(d) An agreement for the sale of goods, chattels or things in action, at a price not less than five hundred pesos, unless the buyer accept and receive part of such goods and chattels, or the evidences, or some of them, of such things in action or pay at the time some part of the purchase money; but when a sale is made by auction and entry is made by the auctioneer in his sales book, at the time of the sale, of the amount and kind of property sold, terms of sale, price, names of the purchasers and person on whose account the sale is made, it is a sufficient memorandum;
(e) An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein;

( f ) A representation as to the credit of a third person.

(3) Those where both parties are incapable of giving consent to a contract.

1403

Question 73

Void Contracts

Answer 73

(1) Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy;
(2) Those which are absolutely simulated or fictitious;
(3) Those whose cause or object did not exist at the time of the transaction;
(4) Those whose object is outside the commerce of men;
(5) Those which contemplate an impossible service;
(6) Those where the intention of the parties relative to the principal object of the contract cannot be ascertained;
(7) Those expressly prohibited or declared void by law.

1409

Question 74

Essential Elements of a Contract

Answer 74

1. Consent
   a. Parties
   b. Capacity of the parties (absolute, relative)
2. Object or subject matter (things & rights)
3. Cause

Question 75

What is a contract?

Answer 75

A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. (1305)

Question 76

Juridical Capacity v. Capacity to Act

Answer 76

Juridical capacity is the fitness to be the subject of legal relations; it is inherent in every natural person. Capacity to act is the power to do acts with legal effect; it may be acquired and it may also be lost; it is acquired upon the attainment of the age of majority.

Question 77

What are the kinds of obligations?

Answer 77

Natural and civil.

Question 78

Obligor or debtor v. obligee or creditor

Answer 78

Obligor or debtor
- he who has the duty of giving, doing, or not doing

Obligee or creditor
- he who has the right to the performance of the obligation

Question 79

What are some of the natural obligations?

Answer 79

Title III, Articles 1423-1430.
Examples (not exclusive):
- performance after civil obligation has prescribed
- reimbursement of third person for debt that has prescribed
- restitution by minor after annulment of contract
- delivery by minor of money or fungible thing in fulfillment of obligation
- performance after action to enforce civil obligation has failed
- payment by heir of debt exceeding the value of property inherited
- payment of legacy after will has been declared void

Question 80

Essential requisites of an obligation?

Answer 80

1. Passive subject (debtor or obligor)
2. Active subject (creditor or obligee)
3. Object or prestation (subject matter of the obligation)
4. Juridical or legal tie or efficient cause (like anong law or source ng obligation)

Question 81

What are the sources of obligations?

Answer 81

1. Law
   - imposed by the law itself
2. Contracts
   - arise from the stipulation of the parties
3. Quasi-contracts
   - arise from lawful, voluntary and unilateral acts which are enforceable to the end that no one shall be unjustly enriched or benefited at the expense of the other
   a. Negotiorum Gestio
   b. Solutio Indebiti
   c. Other Quasi-contracts
4. Acts or omissions punished by law
   - arise from civil liability as a consequence of a criminal offense
5. Quasi-delicts or torts
   - arise from damage by fault or negligence without any contractual relation existing between the parties

Question 82

What is the characteristic or fundamental principle of contract that gives them the force of law?

Answer 82

Autonomy of contracts

Contract has the force of law provided that it is not contrary to law, morals, good customs, public order or public policy.

Question 83

What is a quasi-contract?

Answer 83

Art. 2142.
Juridical relations arising from lawful, voluntary and unilateral acts by virtue of which the parties become bound to each other.
“Parang contract”

Requisites: lawful, unilateral, voluntary
Objective: that no one shall be unjustly enriched at the expense of others

Question 84

Classifications of contract

Answer 84

1. According to name or designation
   a. nominate
   b. innominate
2. According to perfection
   a. consensual - that which is perfected by mere consent
   b. real - that which is perfected, in addition to the above, by the delivery of the thing subject matter of the contract
   c. solemn - that which requires compliance with certain formalities prescribed by law such prescribed form being thereby an essential element thereof
3. According to cause
   a. onerous
   b. remuneratory or remunerative
   c. gratuitous
4. According to form
   a. informal or common
   b. formal, solemn, simple, or special
5. According to obligatory force
   a. valid
   b. rescissible
   c. voidable
   d. unenforceable
   e. void or inexistent
6. According to person obliged; according to their nature of the vinculum which they produce
   a. unilateral
   b. bilateral
7. According to dependence to another contract
   a. preparatory - when it is entered into as a means to an end
   b. accessory - when it is dependent upon another contracts it secures or guarantees for its existence and validity
   c. principal - when it does not depend for its existence and validity upon another contract but is an indispensable condition for the existence of an accessory contract
8. According to status
   a. executory
   b. executed
9. According to dependence of part of contract to other parts
   a. indivisible - when each part is dependent upon the other parts for satisfactory performance
   b. divisible
10. According to risks
    a. commutative - when the undertaking of one party is considered the equivalent of that of the other
    b. aleatory - when it depends upon an uncertain event or contingency both as to benefit or loss
11. According to liability
    a. unilateral
    b. bilateral
12. According to their purpose
    a. transfer of ownership
    b. conveyance of use
    c. rendition of service
13. According to their subject matter
    a. things
    b. services

Question 85

Limitations on contractual stipulations

Answer 85

1. Law

2. Police power

Question 86

Principle of relativity of contracts

Answer 86

As a general rule, contracts can only bind the parties (then assigns and heirs) who entered into it and cannot favor or prejudice a third party even if he is aware of such contract and has acted with knowledge.

Question 87

Rules governing innominate contracts

Answer 87

1. the agreement of the parties
2. the provisions of the Civil Code on obligations and contracts
3. the rules governing the most analogous contracts
4. the customs of the place

Question 88

Cases wherein a third person may be affected by a contract

Answer 88

a. In contracts containing a stipulation in favor of a third person
b. In contracts creating real rights
c. In contracts entered into to defraud creditors
d. In contracts which have been violated at the inducement of the third person
e. In contracts creating ‘status’ (ex: marriage - strangers must respect the contract in force)
f. In the quasi-contract or negotiorum gestio, the owner is bound in a proper case, by contracts entered into by the “gestor” or unauthorized manager
g. In “collective contracts” where the majority rules over the minority
h. Where the situation contemplated in Art. 1729 obtains

Question 89

Stipulation pour autrui

Answer 89

a stipulation in a contract clearly and deliberately conferring a favor upon a third person who has a right to demand its fulfillment, provided he communicates his acceptance to the obligor before its revocation by the obligee or the original parties

Question 90

Requisites of stipulation pour autrui

Answer 90

1. The contracting parties by their stipulation must have clearly and deliberately conferred (not merely incidental) a favor upon a third person
2. The stipulation in favor of the third person should be a part and not the whole of the contract or the contract himself
3. The third person must have communicated his acceptance to the obligor before its revocation by the obligee or the original parties
4. The favorable stipulation should not be conditioned or compensated by any kind of obligation whatsoever
5. Neither of the contracting parties bears the legal representation or authorization of the third party for otherwise the rules on agency will apply

Question 91

Nature and form of acceptance of stipulation pour autrui

Answer 91

1. The acceptance must be unconditional

2. Acceptance does not have to be in any particular form

Question 92

Cure for unauthorized contracts

Answer 92

Ratification

When a contract is ratified, the person signing accepts the advantages and disadvantages of the agreement.

Question 93

Contract of Lease

Answer 93

A contract by which one agrees to give to the other for a fixed time and price the use or profit of a thing, or of his services.

Question 94

Characteristics of Lease of things

Answer 94

a. Consensual
b. Lessor need not be the owner
c. Onerous
d. Nominate
e. Subject matter must be within the commerce of man (not belonging to public domain)
f. Principal contract
g. Purpose is to allow enjoyment or use of a thing
h. Purpose to which the thing will be devoted should not be immoral
i. Period is temporary
j. Period may be definite or indefinite

Question 95

Kinds of Leases

Answer 95

1. Lease of things
   - movable or immovable
   - one of the parties binds himself to give to another the enjoyment or use of a thing for a price certain and period which may be definite or indefinite
2. Lease of Work and Services
   - one of the parties binds himself to execute a piece of work or to render to the other some service for a price certain
   - relation of principal and agent does not exist

Question 96

Contract of lease may be made orally.

Answer 96

Ok. Except for lease of real property for more than 1 year.

Question 97

Contracts that need to be in writing

Answer 97

1. Sale of property at a price not less than P500
2. Sale of real property or an interest therein
3. Sale of property not to be performed within a year from the date thereof
4. Applicable statute
5. Executory contracts
6. A special promise to answer for the debt, default, or miscarriage of another
7. Agreement made in consideration of marriage, other than a mutual promise to marry
8. Agreement for the sale of goods, chattels or things in action, at a price not less than 500 pesos, unless the buyer accept and receive part of such goods and chattels
9. Agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein
10. Representation as to the credit of a third person
11. Sale of a piece of land or any interest therein done through an agent—such authority shall be in writing, otherwise the sale will be void

Question 98

Contracts that need to be in a public instrument/document

Answer 98

1. Assignment of a credit, right or action
   a. Shall be recorded in the Registry of Property if the assignment involves real property
2. Acts and contracts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property; sales of real property or of an interest therein are governed by Articles 1403 (2) and 1405
3. Cession, repudiation or renunciation of hereditary rights or of those of the conjugal partnership of gains
4. Power to administer property, or any other power which has for its object an act appearing or which should be appear in a public document, or should prejudice a third person
5. Cession of actions or rights proceeding from an act appearing in a public document