Civil2 Midterm

8/13/2019 Civil2 Midterm

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1. WHAT IS THE FORM OF CONTRACT?General Rule: Form is not required for the validityof the contract. It is enough that there beCONSN!" S#$%C! &'!!R" and C'#S.

(C)!ION: *hen the la* requires that acontract be in some form in order that it may bevalid and enforceable

+. Consensual contracts , it is enough thatthere be COC -essential elements

/. Formal Contracts -Solemn Contracts 0COC 1 a certain s2ecified form

a. 3am2le: donation of real 2ro2ertymust be in a 2ublic instrument inorder to be valid" even as bet*eenthe 2arties

4. Real Contracts , COC 1 5elivery

2. WHEN IS FORM IMPORTANT?

a. For 6'7I5I!8b. For NFORC'$7I!8c. For CON6NINC

3. IS AN ORAL SALE OF LAND VALID ASBETWEEN THE PARTIES?'. If the land had been delivered or the

money has been 2aid" the sale iscom2letely valid because although theStatute of Frauds requires this contract tobe in *riting" still said statute does nota22ly to e3ecuted or 2artially e3ecuted

contracts.

$. If the land has not yet been delivered andthe 2rice has not yet been 2aid" the sale isunenforceable" that is" neither 2arty maybe com2elled by court action to 2erformunless the defense of the Statute ofFrauds is *aived.

4. WHEN CAN A PARTY COMPEL THEEXECUTION OF THE NEEDED FORM?It is essential that the contract be:a. )erfected -6alidb. nforceable under the Statute of Frauds

5. WHAT ARE THOSE THAT NEED TOAPPEAR IN A PUBLIC DOCUMENT (FORMFOR CONVENIENCE)?a. 'cts and contracts *hich have for their

ob9ect the creation" transmission"modification or e3tinguishment of realrights over the immovable 2ro2erty salesof real 2ro2erty or of interest therein are

governed by Statute of Fraudsb. !he cession" re2udiation or renunciationof hereditary rights or of those of thecon9ugal 2artnershi2 of gains

c. !he 2o*er to administer 2ro2erty" or nayother 2o*er *hich has for its ob9ect an acta22earing or *hich should a22ear in a2ublic document" or should 2re9udice athird 2erson

d. !he cession of actions or rights2roceeding from an act a22earing in a2ublic document.

e. 'll other contracts *here the amountinvolved e3ceeds five hundred 2esos musta22ear in *riting" even a 2rivate one. $utsales of goods" chattels or things in actionare governed by Statute of Frauds.

. A !"#$ %#& '"$#'*+ "#!!,. I- * #/"0$& P /#, * !*$+* *'"* * &0/!*$?8S" because although the la* says thatcontracts involving more than );


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d. It must be brought *ithin the 2ro2er2rescri2tive 2eriod

e. !he document must not refer to a sim2leunconditional donation inter vivos or to acontract *here the real agreement is void

11. WHAT ARE THE INSTANCES WHENREFORMATION IS PROPER?

a. >hen a mutual mista=e of the 2artiescauses the failure of the instrument todisclose their real agreement

&ista=e of fact &ista=e should be 2roved by clear

and convincing evidence &ista=e should be common to

both 2arties to the instrument

b. If one 2arty *as mista=en and the otheracted fraudulently or inequitably in such a*ay that the instrument does not sho*

their true intention -#NI7'!R'7&IS!'?

c. >hen one 2arty *as mista=en and theother =ne* or believed that the instrumentdid not state their real agreement" butconcealed that fact from the former-#NI7'!R'7 &IS!'?

d. >hen through the ignorance" lac= of s=ill"negligence or bad faith on the 2art of the2erson drafting the instrument or of thecler= or ty2ist

e. If t*o 2arties agree u2on the mortgage or2ledge of real or 2ersonal 2ro2erty but theinstrument states that the 2ro2erty is soldabsolutely or *ith a right of re2urchase

12. WHAT ARE THE INSTANCES WHENREFORMATION IS NOT ALLOWED?a. Sim2le donations inter vivos *herein no

condition is im2osed

b. >illc. >hen the real agreement is voidd. >hen one of the 2arties has brought an

action to enforce the instrument

13. WHO ORDER REFORMATION?If mista=e is mutual:a. 't the instance of either 2arty orb. @is successors in interest

If mista=e is not mutual:c. #2on 2etition of the in9ured 2arty or

d. @is heirs and assigns

14. WHAT COMPLAINT MUST ALLE:E?

a. !hat the instrument to be reformed doesnot e32ress the real agreement orintention of the 2arties

b. >hat the real agreement or intention *as

15. WHAT IS THE PRESCRIPTIVE PERIODFOR REFORMATION OF CONTRACT?+< years

1. WHAT IS THE REASON FORINTERPRETIN: CONTRACT?If the terms of a contract are clear and leaveno doubt u2on the intention of the contracting2arties" the literal meaning of its sti2ulationshould control

16. WHAT IS THE RULE IN CASE OFCONFLICT BETWEEN THE WORDS OFTHE CONTRACT AND THE EVIDENTINTENTION OF THE PARTIES?

!he intention must 2revail.

1. HOW TO ;UD:E INTENT OF THEPARTIES?a. If the 2arties have themselves 2laced an

inter2retation to the terms of their contract"such inter2retation must in general befollo*ed.

b. !he contract of the 2arties may result inesto22el

c. !he courts may consider the relationse3isting bet*een the 2arties and the

2ur2ose of the contract" 2articularly *henit *as made in good faith bet*een mutualfriends

17. WHAT IS THE EFFECT OF THE USE OF:ENERAL TERMS?!hey shall be understood to com2rehendthings that are distinct and cases that aredifferent from those u2on *hich the 2artiesintended to agree

2. STIPULATION ADMITTIN: OF SEVERALMEANIN:SIt shall be understood as bearing that im2ort*hich is most adequate to render it effectual

21. EFFECT OF AN INTERPRETATIONUPHOLDIN: THE VALIDITY OF THECONTRACTIf one inter2retation ma=es a contract validand illegal" the former inter2retation must2revail

22. HOW TO INTERPRET VARIOUSSTIPULATIONS OF A CONTRACT?Shall be inter2reted together" attributing to thedoubtful ones that sense *hich may resultfrom all of them ta=en 9ointly


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23. IF A WORD IS SUSCEPTIBLE OF TWO ORMORE MEANIN:S WHAT MEANIN:SHOULD BE USED?a. !hat in =ee2ing *ith the nature and ob9ect

of the contractb. If this cannot be determined" then the

terms of a *riting are 2resumed to have

been used in their 2rimary and generalacce2tation

24. DESPITE THE FACT THAT THE TERMSARE PRESUMED TO HAVE BEEN USED INTHEIR PRIMARY AND :ENERALACCEPTATION MAY OTHER MEANIN:SOR SI:NIFICATIONS BE PROVED?8S. vidence is admissible to sho* that theyhave a local" technical or other*ise 2eculiarsignification" and *ere so used andunderstood in the 2articular instance" in *hich

case the agreement must be construedaccordingly

25. WHAT IS THE EFFECT OF USA:E ORCUSSTOM OF THE PLACE?Should be borne in mind in the inter2retationof the ambiguities of a contract" and shall fillthe omission of sti2ulations *hich areordinarily established

2. SHOULD CUSTOMS AND USA:ES BEPLEADED?

a. If the customs and usages are general"the need not be 2leaded.

b. If the customs and usages are merelylocal" then they have to be both allegedand 2roved.

26. WHAT IS THE INTERPRATION OFOBSCURE WORDS OR STIPULATIONS?Shall not favor the 2arty *ho caused theobscurity

2. WHAT IS THE RULE ON INTERPRETATIONON CONTRACTS OF ADHESION?>here the contract is already 2re2ared by abig concern" and the other 2arty merelyadheres to it

27. WHAT ARE THE RULES OFINTERPRETATION IN CASE OF DOUBTSAS TO PRINCIPAL OB;ECT?!he contract shall be null and void

3. WHAT ARE THE RULES OF

INTERPRETATION IN CASE OF DOUBTSAS TO INCIDENTAL CIRCUMSTANCES?a. If onerous 0 a22ly the rule of the greatest

reci2rocity of interest

b. If gratuitous 0 a22ly the rule of leasttransmission of rights and interests

RESCISSIBLE CONTRACTS

1. WHAT ARE THE FOUR


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5. MAY A FICTITIOUS CONTRACT BERESCINDED?NO. Rescission is not the 2ro2er remedybecause *hile the contract here is fictitiousand therefore" null and void" rescission2resu22oses a valid contract

. WHAT ARE THE CONTRACTS THAT ARE

RESCISSIBLE?a. !hose *hich are entered into by theguardians *henever the *ards *hom theyre2resent suffer lesion by more than one,fourth of the value of the things *hich arethe ob9ect thereof

b. !hose agreed u2on in re2resentation ofabsentees" if the latter suffer the lesionstated in the 2receding number

c. !hose underta=en in fraud of creditors

*hen the latter cannot in any othermanner collect the claims due them

d. !hose *hich refer to things under litigationof they have been entered into by thedefendant *ithout the =no*ledge anda22roval of the litigants or of com2etent9udicial authority

e. 'll other contracts s2ecially declared byla* to be sub9ect to rescission

6. WHAT ARE THE RE9UISITES BEFORETHE ACTION FOR RESCISSION CAN BEBROU:HT?a. Generally" the 2laintiff must be able to

R!#RN *hat has been received byvirtue of the rescissible contract -ob9ectand fruits 2rice and interest

b. !he thing ob9ect of the contract is not inthe legal 2ossession of third 2ersons ingood faith.

c. !here must be no other legal remedyd. !he action must be brought *ithin the

2ro2er 2rescri2tive 2eriod

. WHAT ARE THE PRESUMPTIONS OFFRAUD IN THE CASE OF :RATUITOUSALIENATIONS?)resumed fraudulent *hen the debtor did noreserve sufficient 2ro2erty to 2ay all debtscontracted $FOR the donation

7. WHAT ARE THE PRESUMPTIONS OFFRAUD IN THE CASE OF ONEROUS

ALIENATIONS?)resumed fraudulent 0 *hen made by2ersons:a. 'gainst *hom some 9udgment has been

rendered in any instance

b. Or against *hom some *rit of attachmenthas been issued

1. WHAT ARE THE BAD:ES OF FRAUD?Circumstances indicating that a certainalienation has been made in fraud ofcreditors

C'S: ORI' 6S. &C&IC?INGFacts: !o defraud his creditors" a father sold acertain real 2ro2erty to his son for a very smallsum" !he 2ro2erty" although a22arently sold *asnevertheless still occu2ied by the father. !hetransfer *as made after suit by the creditors hadbeen instituted against the father. It *as also2roved that the father had no other 2ro2erty.

Issue: >hether or not the contract may berescinded.

@eld: !he contract may be rescinded as being infraud of creditors.

Court observations:+. !o test as to *hether or not conveyance is

fraudulent: 5OS I! )R%#5IC !@RIG@!S OF CR5I!ORS

/. Circumstances attending salesdenominated by courts as badges of fraud

a. !he fact that the consideration ofthe conveyance is fictitious orinadequate

b. ' transfer made by a debtor aftersuit has been begun and *hile it is2ending against him

c. ' sale u2on credit by an insolventdebtor

d. !he transfer of all or nearly all his2ro2erty by a debtor" es2ecially*hen he is insolvent or greatlyembarrassed financially

e. vidence of large indebtedness orcom2lete insolvency

f. !he fact that the transfer is madebet*een the father and sons

g. !he failure of the vendee to ta=ee3cusive 2ossession of all the2ro2erty.

11. ;UST BECAUSE A CONTRACT IS MADETO DEFRAUD CREDITORS DOES THISNECESSARIL MEAN THAT IT CAN BERESCINDED?NO" for after all the transferee may have beenin good faith and is no* in legal 2ossession of

the 2ro2erty12. WHAT IS THE EFFECT OF ALIENATION

MADE IN BAD FAITH? HOW ABOUTSUBSE9UENT TRANSFER?


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!he acquirer must return the thing if itDsim2ossible to return" then to indemnify fordamages

Subsequent !ransfera. If the first transferee is in GF" the good or

bad faith of the ne3t transferee is notim2ortant

b. If the first transferee is in $F" the ne3ttransferee is liable only if he is also in badfaith

13. WHAT IS THE PRESCRIPTIVE PERIODFOR RESCISSION?a. General Rule 0 E years from termination

of inca2acityb. 'bsentees 0 E *ears form the time the

domicile is =no*n14. WHO CAN BRIN: AN ACTION FOR

RESCISSION?

a. !he in9ured 2arty or the defrauded creditorb. @is heir or successor in interestc. Creditors of a and b

VOIDABLE CONTRACTS

1. WHAT ARE VOIDABLE CONTRACTS?a. !hose *here one of the 2arties is

inca2able of giving consent to a contractb. !hose *here the consent is vitiated by

mista=e" violence" intimidation" undue

influence or fraud

2. WHAT ARE THE EFFECTS OF VOIDABLECONTRACTS?!hese contracts are binding" unless they areannulled by a 2ro2er action in court. !hey aresusce2tible of ratification.

3. RESCISSION VS. ANNULMENTa. R 0 basis here is lesion

' 0 basis is vitiated consent or inca2acityto consent

b. R 0 defect is e3ternal or e3trinsic' 0 intrinsic

c. R 0 action is subsidiary' 0 2rinci2al

d. R 0 a remedy' 0 a sanction

e. R 0 2rivate interest governs

' 0 2ublic interest governsf. R 0 equity 2redominates

' 0 la* 2redominates

g. R 0 2laintiff may be 2arty or a third 2erson' 0 must be

h. R 0 there must be damage to the 2laintiff' 0 immaterial

i. R 0 if 2laintiff is indemnified" no rescission' 0 no bar to 2rosecution of action

9. R 0 com2atible *ith the 2erfect validity ofcontract' 0 defect is 2resu22ose

=. R 0 to 2revent rescission" ratification is notrequired' 0 ratification is required

4. WHAT IS THE PRESCRIPTIVE PERIOD?!he action for annulment shall be brought*ithin E years.

!his 2eriod shall begin:

In cases of intimidation violence or undueinfluence" form the time the defect of theconsent ceases

In case of mista=e or fraud" from the time ofthe discovery of the same

'nd *hen the action refers to contractsentered into by minors or other inca2acitated

2ersons" from the time the guardianshi2ceases.

5. WHAT ARE THE EFFECTS OFRATIFICATION?a. !he action to annul is e3tinguished" thus"

the contract becomes a com2letely validone

b. !he contract is cleansed of its defect fromthe beginning or from the moment it isconstituted (RETROACTIVE EFFECT OFRATIFICATION)

. WHAT ARE THE RE9UISITES OFRATIFICATION (P"=*, C"$-/#"$ "-# V"+#>!* C"$#')a. !he contract must be a voidable oneb. !he 2erson ratifying must =no* the

reason for the contracts being voidable-that is" cause must be =no*n

c. !he cause must not e3ist or continue toe3ist anymore at the time of ratification

d. !he ratification must have been made

e32ressly or by an act im2lying a *aiver ofthe action to annule. !he 2erson ratifying must be the in9ured

2arty.


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6. WHEN IS THERE TACIT OR IMPLIEDRATIFICATION?If *ith =no*ledge of the reason *hich rendersthe contract voidable and such reason havingceased" the 2erson *ho has a right to invo=eit should e3ecute an act *hich necessarilyim2lies an intention to *aive his right

. WHO MAY AS< FOR ANNULMENT?

a. !he victim -2rinci2al or subsidiary 2artymay as= for annulment" not the guilty2erson or his successor

b. Reason: @e *ho comes to equity mustcome *ith clean hands

7. I- # /$" /&*=*&*$& & #* #$+ *"* =#, & /&!*+ " & #* /#, */$" !#* $ &0* -" #$$0!/*$?a. NO" because of esto22els 0 &ercado 6s.

s2iritu

b. 8S" Su2reme Court said that a minorcan never be guilty of esto22els since heis not liable for his conduct or act 0 8oungvs. !ecson

c. NO" Su2reme Court later on reversed itsdecision in / and reiterated the &ercadocase 0 Sia Suan Chao vs. 'lcantara"*here the minor nearly /< years olda22eared to be very clever

1. WHAT ARE THE EFFECTS OFANNULMENT?a. If the contract has not yet been com2lied

*ith" the 2arties are e3cused from theirobligations

b. If the contract has already been2erformed" there must be !#'7RS!I!#!ION -in general of:

a. !he things" *ith fruitsb. !he 2rice" *ith interest

11. WHAT IS THE EFFECT TO ANNULMENTOF LOSS OF OB;ECT THEREOF?If through the fault or fraud of the 2erson *hohas the right to institute the 2roceedings" itshall be e3tinguished

If the right of action is based u2on theinca2acity of any one of the contracting2arties" loss shall not be an obstacle to thesuccess of the action unless said loss too=2lace through the fraud or fault of the 2laintiff

9@ A$ $$* =*&"$ &"!+ & "0&* #$+&0#$+**+ * ="'**+& %!* $$*. C#$* #& -" #$$0!/*$ !#* "$ #$+ *'"* *"0&*?

': #nder the /nd 2aragra2h of 'rt. +E


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b. !hose that do not com2ly *ith the Statuteof Frauds as set forth in this number. Inthe follo*ing cases an agreementhereafter made shall be unenforceable byaction" unless the same" or some note ormemorandum" thereof" be in *riting" andsubscribed by the 2arty charged" or by his

agent evidence" therefore" of theagreement cannot be received *ithout the*riting" or a secondary evidence of itscontents:

a. 'n agreement that by its terms isnot to be 2erformed *ithin a yearfrom the ma=ing thereof

b. ' s2ecial 2romise to ans*er forthe debt" default" or miscarriage ofanother

c. 'n agreement made inconsideration of marriage" other

than a mutual 2romise to marryd. 'n agreement for the sale ofgoods" chattels or things in action"at a 2rice not less than fivehundred 2esos" unless the buyeracce2t and receive 2art of suchgoods and chattels" or theevidences" or some of them" ofsuch things in action or 2ay at thetime some 2art of the 2urchasemoney but *hen a sale is madeby auction and entry is made by

the auctioneer in his sales boo=" atthe time of the sale" of the amountand =ind of 2ro2erty sold" terms ofsale" 2rice" names of the2urchasers and 2erson on *hoseaccount the sale is made" it is asufficient memorandum

e. 'n agreement of the leasing for alonger 2eriod than one year" or forthe sale of real 2ro2erty or of aninterest therein

f. ' re2resentation as to the credit ofa third 2erson.

c. !hose *here both 2arties are inca2able ofgiving consent to a contract.

4. WHAT ARE UNAUTHORIEDCONTRACTS?!hese are those entered into in the name ofanother 2erson by one *ho has been noauthority or legal re2resentation or *ho hasacted beyond his 2o*ers

5. WHAT IS THE PURPOSE OF STATUTE OFFRAUDS?

to 2revent fraud" and not to encourage thesame. !hus" certain agreements are requiredto be in *riting so that they may be enforced

. HOW THE STATUTE OF FRAUDPREVENTS FRAUD?Since memory is many times unreliable" oralagreements may sometimes result in in9ustice.

!o aid human memory" to 2revent thecommission of in9ustices due to faultymemory" to discourage intentionalmisre2resentations" are the 2rinci2al aims ofthe Statute of Frauds

6. WHO IS THE FIRST COUNTRY TO ENACTSTATUTE?ngland. In +KL" the nglish )arliament2assed a la* or statute requiring certainagreements to be in *riting. Since that time"the statue has been called Statute of Frauds

. SOME BASIC AND FUNDAMENTALPRINCIPLES CONCERNIN: THE STATUEOF FRAUDS (:ENERAL RULES OFAPPLICATION@a. It a22lies only to e3ecutory contracts

-contracts *here no 2erformance has yetbeen made and not 2artially orcom2letely e3ecuted -consummatedcontracts

b. It cannot a22ly if the action is neither fordamages because of the violation of anagreement nor for the s2ecific

2erformance of said agreementc. It is e3clusive" that is" it a22lies only to the

agreements or contracts enumeratedherein

d. !he defense of it may be *aivede. It is a 2ersonal defense" that is" a contract

infringing it cannot be assailed by third2ersons

f. Contracts infringing the Statute of Fraudsare not void they are merelyunenforceable

g. It is a rule of e3clusionh. It does not determine the credibility or

*eight of evidence. It merely concernsitself *ith the admissibility thereof

i. It does not a22ly if it is claimed that thecontract does not e32ress the trueagreement of the 2arties. 's long as thetrue or real agreement is not covered bythe Statute of Frauds" it is 2rovable by oralevidence.

7. WHAT ARE THE SPECIFIC A:REEMENTS?

a. 'n agreement that by its terms is not to be2erformed *ithin a year from the ma=ingthereof

b. ' s2ecial 2romise to ans*er for the debt"default" or miscarriage of another


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c. 'n agreement made in consideration ofmarriage other than a mutual 2romise tomarry

d. 'n agreement for the sale of goods"chattels" or things in action" at a 2rice notless than );


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a. !he right to set u2 the defense of illegalitycannot be *aived and may be consideredon a22eal even if not raised in the trial

b. !he action or defense for their declarationas ine3istent does not 2rescribe

c. !he defense of illegality of contracts is notavailable to third 2ersons *hose interestsare not directly affected

d. Cannot give rise to a contracte. Generally" 2roduces no effectf. Generally" no action to declare them void

is needed" since they are ine3istent fromthe very beginning

g. !hey cannot be ratified

. MAY A SALE OF CON;U:AL PROPERTIESBE MADE BY SURVIVIN: SPOUSEWITHOUT THE FORMALITIESESTABLISHED FOR THE SALE OFPROPERTY OF DECEASED PERSONS?

!he sale of con9ugal 2ro2erties cannot bemade by the surviving s2ouse *ithout theformalities established for the sale of 2ro2ertyof deceased 2ersons" and such sale is 6OI5as to the share of the deceased s2ouse.

!he vendee becomes a trustee of the share ofthe latter for the benefit of his heirs" the cestuique trustent

6. WHAT IS THE PRESCRIPTIVE PERIODFOR THE ACTION OR DEFENSE FOR THE

DECLARATION OF THE INEXISTENCE OFA CONTRACT?does not 2rescribe

. 9UERY ON WHETHER VOID CONTRACTSTILL HAS TO BE DECLARED VOIDM: If a void contract is void form the verybeginning" *hat is the use of its beingdeclared ine3istent

': Strictly s2ea=ing" there is no use. $ut forthe 2ur2oses of convenience" or to avoidta=ing the la* into our o*n hands" there isnothing *rong in having a void contractdeclared void.

7. A CONTRACT WHICH IS DIRECT RESULTOF A PREVIOUS ILLE:AL CONTRACTis also void and ine3istent

NATURAL OBLI:ATIONS

1. CIVIL VS. NATURAL OBLI:ATIONSCivil obligations give a right of action tocom2el their 2erformance.

Natural obligations" not being based on2ositive la* but on equity and natural la*" donot grant a right of action to enforce their2erformance" but after voluntary fulfillment bythe obligor" they authoriJe the retention of*hat has been delivered or rendered byreason thereof.

2. UNDUE PAYMENT VS. NATURALOBLI:ATIONIf one 2ays a debt that has 2rescribed:a. Not =no*ing that it has 2rescribed" one

cannot recover on the ground of undue2ayment

b. ?no*ing it has 2rescribed" one cannotrecover for this *ould be a case of anatural obligation

3. IS THERE A ;URIDICAL TIE IN MORAL

OBLI:ATIONS?Case: 5e la CruJ 6s. Northern !heatricalnter2rises>hile there is a 9uridical tie in naturalobligations" there is none in moral obligations.!hus" giving a legal assistance to oneDsem2loyee -*ho has been accused of a crimeis merely a moral obligation and the em2loyeecannot recover attorneyDs fee from theem2loyer

Case: 'nsay" et al 6s. $O5 of N5C

Similarly" a Christmas bonus" not yet given toem2loyees" is not generally a demandableand enforceable obligation nor may it beconsidered a natural obligation for there hasbeen no voluntary 2erformance as yet. !hecourts cannot order therefore the grant ofbonus #N7SS:a. It had been made a 2art of the *age or

salaryb. Or may be granted on equitable

considerations" as *hen it used to begiven in the 2ast" although *ithheld insucceeding years

4. EXAMPLES OF OTHER NATURALOBLI:ATIONS

a. Obligation to 2ay interest for use ofmoney" even if not agreed u2on in*riting

b. 5uty to su22ort natural or s2uriouschildren -even if not recogniJedvoluntarily or by 9udicial com2ulsionand even if there is a 9udgment

denying recognitionc. Giving of material and financialassistance to children u2on theirmarriage


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5. C"$*&"$ "- M"#! O>!#"$& " C!O>!#"$&3am2le: 'c=no*ledgment of a 2rescribed

debt.

. EFFECT OF EXTINCTIVE PRESCRIPTION' right or 2ro2erty has been lost" hence" theobligor *ho voluntarily 2erforms the contract

cannot recover *hat he has delivered or thevalue of the service he has rendered

6. WHAT HAPPENS WHEN THIRD PERSONSPAYS A DEBT WHICH THE OBLI:OR ISNOT LE:ALLY BOUND TO PAY BECAUSETHE ACTION HAS PRESCRIBEDWITHOUT * $" " *'"** /* -"/ * ">!** %" #& &=*$ "'"$&0/*+ $ ""+ -#. (11A)

A. 142. W*$ #-* #$ #'"$ " *$-"'* #

'! ">!#"$ #& -#!*+ * +*-*$+#$"!0$#!, =*-"/& * ">!#"$ * '#$$"+*/#$+ * *0$ "- %# * #& +*!**+ "* =#,/*$ "- * #!0* "- * &*'* * #&*$+**+.

ESTOPPEL

1. WHAT IS THE CONCEPT OF ESTOPPEL?a. Generally" esto22els is a bar *hich

2recluded a 2erson from denying orasserting anything contrary to that *hichhas been" in contem2lation of la*"established as the truth either by acts of9udicial or legislative officers" or by his o*ndeed or re2resentation either e32ress orim2lied

b. C'S: 7o2eJ 6s. Ochoa!he SC held that *aiver and esto22elsare frequently used as convertible terms.!he doctrine of *aiver belongs to the

family of" is of the nature of" and is basedon" esto22els. !he essence of *aiver isesto22els" and *here there is notesto22els" there is no *aiver. !his ises2ecially true *here the *aiver relied

u2on is constructive or im2lied from theconduct of a 2arty.

)arty is in esto22els 2arty hadmade a *aiver

2. WHAT IS THE ORI:IN OF ESTOPPEL?Origin in equity and is based on moral rightsand natural 9ustice. Its a22licability to any

2articular case de2ends to a very large e3tentu2on the s2ecial circumstances of the case

3. WHAT ARE THE EXAMPLES OFESTOPPEL?a. &ontoya 6s. Ignacio

If a husband in a s*orn declarationconstituting a family home has stated insaid documents that he *as married"naming his *ife" he cannot thereafter beheard to say that he and the girl are ntomarried. !herefore" the family home

should be considered as a con9ugal2ro2erty

b. )atricio 6s. )atricio' 2erson *ho alleged at one time in courtthat he *as the o*ner of a certain cabaretcannot after*ards deny his o*nershi2thereof

c. &atienJo )alileo 6s. CFI of 7aguna' vendee a retro *ho at one timerecogniJed o*nershi2 in the sub9ect

matter by the vendor a retro cannot no*claim o*nershi2 over the same

d. &agana 6s. 'gregado' government em2loyee *ho acce2ts thebenefits accruing form the abolition of hisoffice is sto22ed from questioning thevalidity of the abolition and is deemed tohave *aived the right to contest the same

C'S: 7#ON S!65ORING CO." 6S. 7#ON&'RIN 5)!. #NIONsto22el by 7aches 0 unreasonable delay inma=ing a claim in court does not a22ly toem2loyees in caliming overtime 2ay" for to allo*esto22els in this case *ould be to bring about asituation *hereby the em2loyee or laborer" *hocannot e32ressly renounce the right to e3tracom2ensation under the la*" may be com2elledto accom2lish the same thing by mere silence orla2se of time" thereby frustrating by indirection the2ur2ose of the la*.

A. 1432. T* =$'=!*& "- *&"==*! #***>, #+"=*+ $&"-# #& *, #* $" $'"$-!' % * ="&"$& "- & C"+* *C"+* "- C"//*'* * R0!*& "- C"0 #$+&=*'#! !#%&.


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4. WHAT ARE THE hether or not esto22el be a22lied

against a munici2al Cor2oration

@eld: !he doctrine of esto22el cannot bea22lied against a munici2al Cor2oration tovalidate a contract *hich it has no authority to


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ma=e 0 other*ise" it *ould be enabled to doindirectly *hat it cannot do directly.

'22licability to Muestions of Fact!he rule on esto22el a22les only to questionsof fact" not of la*" about the truth of *hich theother 2arty is ignorant

sto22el cannot validate a void contract!he doctrine of esto22els may not be invo=edto validate a void contract. 's bet*een 2artiesto a contract" validity cannot be given to it byesto22els if it is 2rohibited by la* or is against2ublic 2olicy. No citiJen is com2etent to bartera*ay *hat 2ublic 2olicy by la* see=s to2reserve. -)rudential $an= 6s. )anis

sto22el by Record'22lies as bet*een the same 2arties or their2rivies and cannot be used against strangers

if in t*o cases the 2laintiffs be different but thedefendants are the same" the ne* 2laintiffsare neither bound by the first 2roceedings" normay they ta=e advantage of the same)romissory sto22el&ay arise from the ma=ing of a 2romise" eventhough *ithout consideration" if it *asintended that the 2romise should be reliedu2on" and if a refusal to enforce it *ould bevirtually to sanction the 2er2etration of fraudor *ould result in other in9ustice

'gency by sto22ela. !he 2rinci2al manifested a re2resentation

of the agentDs authority or =no*inglyallo*ed the agent to assume suchauthority

b. !he third 2erson" in good faith" relied u2onsuch misre2resentation

c. Relying u2on said re2resentation" a third2erson has changed his 2osition to hisdetriment

TRUSTS

1. WHAT IS A TRUST?a. It is the right to the beneficial en9oyment of

2ro2erty" the legal title to *hich is vestedin another

b. It is a fiduciary relationshi2 concerning2ro2erty *hich obliges the 2erson holdingit to deal *ith the 2ro2erty for the benefitof another

2. WHAT ARE THE CHARACTERISTICS OFTRUST?a. It is a fiduciary relationshi2b. Created by la* or by agreement

c. >here the legal title is held by one andthe equitable title or beneficial title is heldby another

3. TRUST VS. :UARDIANSHIP OREXECUTORSHIPIn trust" the trustee or holder has 7G'7!I!7 to the 2ro2erty a guardian etc. does

not have4. TRUST VS. STIPULATION POUR AUTRUI

a. !rust may e3ist because of legal 2rovisionor because of an agreement a sti2ulation2our autrui can arise only in the case ofcontracts

b. !rust refers to s2ecific 2ro2erty asti2ulation 2our autrui refers to s2ecific2ro2erty or to other things

5. WHO ARE PARTIES TO A TRUST?

a. !rustor or settler 0 establishes the trust-may at the same time be also thebeneficiary

b. !rustee 0 holds the 2ro2erty in trust forthe benefit of another

c. $eneficiary or cestui que trust 0 the2erson for *hose benefit the trust hasbeen created

. WHAT ARE THE ELEMENTS OF A TRUST?a. )artiesb. !he trust 2ro2erty or the trust estate or the

sub9ect matter of the trust

6. WHAT ARE THE CLASSIFICATION OFTRUSTS?a. 32ress 0 created by the 2arties or by the

intention of the trustor

b. Im2lied 0 created by o2eration of la* Resulting trust or 2assive trust 0 there

is an intent to create a trust but it is noteffective as an e32ress trust

Constructive trust 0 no intention tocreate a trust is 2resent $#! a trust isnevertheless created by la* to 2reventun9ust enrichment or o22ression

EXPRESS TRUST

1. WHAT ARE THE FORMALITIES INEXPRESS TRUST?a. No e32ress trusts concerning an

immovable or any interest therein may be

2roved by 2arol evidence. !herequirement that the e32ress trust be*ritten is only for enforceability" not forvalidity bet*een the 2arties.


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b. $y im2lication" for a trust over 2ersonal2ro2erty" an oral agreement is valid andenforceable bet*een the 2arties

c. Regarding third 2ersons" the trust must bein a 2ublic instrument and registered in theRegistry of )ro2erty if it concerns R'7)RO)R!8

2. HOW AN EXPRESS TRUST IS CREATED?a. $y conveyance to the trustee by an actinter vivos or mortis causa

b. $y admission of the trustee that he holdsthe 2ro2erty only as trustee

3. HOW IS THE ADMINISTRATION OF THETRUST?a. !he trustee must file a bondb. !he trustee must ma=e an inventory of the

real and 2ersonal 2ro2erty in trustc. !he trustee must manage and dis2ose of

the estate and faithfully discharge his trustin relation thereto" according to la* oraccording to the terms of the trustinstrument as long as they are legal and2ossible

d. !he trustee must render a true and clearaccount

e. !he trustee cannot acquire the 2ro2ertyhold in trust by 2rescri2tion as long as thetrust is admitted

4. WHAT IS THE EFFECT IF TRUSTEE

APPOINTED DECLINES?No trust shall fail unless the contrary shoulda22ear in the instrument constituting the trust

5. IS ACCEPTANCE BY THE BENEFICIARY INA TRUST NECESSARY?8S. If the trust im2oses no onerouscondition u2on the beneficiary" his acce2tanceshall be 2resumed" if there is no 2roof to thecontrary

. WHEN IS ACCEPTANCE PRESUMED?

If the granting of benefit is )#R78GR'!#I!O#S e3ce2t if there is 2roof that hereally did not acce2t

6. HOW ARE EXPRESS TRUSTS ENDED?a. &utual agreement by all the 2artiesb. 32iration of the termc. Fulfillment of the resolutory conditiond. Rescission or annulmente. 7oss of sub9ect matter of the trustf. Order of the court

g. &ergerh. 'ccom2lishment of the 2ur2ose of thetrust

IMPLIED TRUST

1. INSTANCES OF IMPLIED TRUSTNot e3clusive but recogniJed only if NO! inconflict *ith the NCC" Code of Commerce"Rules of Court" and S2ecial 7a*s

a. *hen 2ro2erty is sold" and the legal estate

is granted to one 2arty but the 2rice is2aid by another for the 2ur2ose of havingthe beneficial interest of the 2ro2erty

!he former is the trustee" *hile the latteris the beneficiary. @o*ever" if the 2ersonto *hom the title is conveyed is a child"legitimate or illegitimate" of the one 2ayingthe 2rice of the sale" no trust is im2lied byla*" it being dis2utably 2resumed thatthere is a gift in favor of the child.

b. *hen a donation is made to a 2erson but ita22ears that although the legal estate istransmitted to the donee" he neverthelessis either to have no beneficial interest oronly a 2art thereof

c. If the 2rice of a sale of 2ro2erty is loanedor 2aid by one 2erson for the benefit ofanother and the conveyance is made tothe lender or 2ayor to secure the 2aymentof the debt" a trust arises by o2eration ofla* in favor of the 2erson to *hom the

money is loaned or for *hom its is 2aid.!he latter may redeem the 2ro2erty andcom2el a conveyance thereof to him.

d. >hen land 2asses by succession to any2erson and he causes the legal title to be2ut in the name of another" a trust isestablished by im2lication of la* for thebenefit of the true o*ner.

e. If t*o or more 2ersons agree to 2urchase2ro2erty and by common consent thelegal title is ta=en in the name of one ofthem for the benefit of all" a trust iscreated by force of la* in favor of theothers in 2ro2ortion to the interest of each.

f. >hen 2ro2erty is conveyed to a 2erson inreliance u2on his declared intention tohold it for" or transfer it to another or thegrantor" there is an im2lied trust in favor ofthe 2erson *hose benefit is contem2lated.

g. If an absolute conveyance of 2ro2erty ismade in order to secure the 2erformanceof an obligation of the grantor to*ard thegrantee" a trust by virtue of la* is

established. If the fulfillment of theobligation is offered by the grantor *hen itbecomes due" he may demand thereconveyance of the 2ro2erty to him.


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h. >hen any trustee" guardian or other2erson holding a fiduciary relationshi2uses trust funds for the 2urchase of2ro2erty and causes the conveyance to bemade to him or to a third 2erson" a trust isestablished by o2eration of la* in favor ofthe 2erson to *hom the funds belong.

i. If 2ro2erty is acquired through mista=e or

fraud" the 2erson obtaining it is" by forceof la*" considered a trustee of an im2liedtrust for the benefit of the 2erson from*hom the 2ro2erty comes.

2. HOW MAY IMPLIED TRUST BE PROVED?'n im2lied trust may be 2roved by oralevidence.

3. DO TRUSTS PRESCRIBE?a. 32ress trusts 0 do not 2rescribe as long

as they have not been re2udiated

b. In the case of Ramos" et al. vs. GregoriaRamos:Resulting trustGenerally they do not 2rescribe e3ce2t incase of recovery from the trustee may2rescribe if the trustee has e32resslyre2udiated the trust

Constructive trusts5o 2rescribe

Civil2 Midterm

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