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Attorneys of the Philippines Legal News

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The Purpose Of Earnest Money

A contract is already a proof that two or more persons have entered an agreement. However, there are instances when a written contract is not enough to determine one's sincerity in fulfilling what has been agreed on. An earnest money or "arras" is usually given by the prospective buyer to the seller. This is to show that the buyer is interested in purchasing the property. The main purpose of the earnest money is to bind the bargain. It is also considered as part of the purchase price and will be deducted from the total price. Once the earnest money is given to the seller, it will perfect the contract of sale. A payment will only be considered an earnest money if it constitutes as part of the purchase price. The money will be refunded if the sale did not push through. 

Here is a scenario of how an earnest money is determined:

On March 28, 1990, respondent, through his counsel Atty. Ponciano Espiritu, wrote petitioners informing them of his readiness to pay the balance of the contract price and requesting them to prepare the final deed of sale.[3]

On April 4, 1990, petitioners, through Atty. Ruben V. Lopez, sent a letter[4] to respondent stating that petitioner Amparo Herrera is leaving for abroad on or before April 15, 1990 and that they are canceling the transaction. Petitioners also informed respondent that he can recover the earnest money of P100,000.00 anytime.

Again, on April 6, 1990,[5] petitioners wrote respondent stating that they delivered to his counsel Philippine National Bank Managers Check No. 790537 dated April 6, 1990 in the amount of P100,000.00 payable to him.

In view of the cancellation of the contract by petitioners, respondent filed with the Regional Trial Court, Branch 63, Makati City a complaint against them for specific performance and damages, docketed as Civil Case No. 90-1067.[6]

On June 27, 1994, after hearing, the trial court rendered its Decision[7] finding there was a perfected contract of sale between the parties and ordering petitioners to execute a final deed of sale in favor of respondent. The trial court held:

x x x

In the evaluation of the evidence presented by the parties as to the issue as to who was ready to comply with his obligation on the verbal agreement to sell on March 23, 1990, shows that plaintiffs position deserves more weight and credibility. First, the P100,000.00 that plaintiff paid whether as downpayment or earnest money showed that there was already a perfected contract. Art. 1482 of the Civil Code of the Philippines, reads as follows, to wit:

Art. 1482. Whenever earnest money is given in a contract of sale, it shall be considered as part of the price and as proof of the perfection of the contract.

Second, plaintiff was the first to react to show his eagerness to push through with the sale by sending defendants the letter dated March 25, 1990. (Exh. D) and reiterated the same intent to pursue the sale in a letter dated April 6, 1990. Third, plaintiff had the balance of the purchase price ready for payment (Exh. C). Defendants mere allegation that it was plaintiff who did not appear on March 23, 1990 is unavailing. Defendants letters (Exhs. 2 and 5) appear to be mere afterthought.

The Fundamentals Of Succession

Succession as defined under Art. 774 of the New Civil Code is a mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of the inheritance, of a person are transmitted through his death to another or others either by his will or by operation of law

There are two kinds of successors:

Compulsory heirs refer to the legitime reserved by law, and who succeed whether the testator likes it or not. 

Voluntary heirs refer to the person other than the compulsory heirs. 

Art. 775. In this Title, "decedent" is the general term applied to the person whose property is transmitted through succession, whether or not he left a will. If he left a will, he is also called the testator. (n)

Art. 776. The inheritance includes all the property, rights and obligations of a person which are not extinguished by his death. (659)

Art. 777. The rights to the succession are transmitted from the moment of the death of the decedent. (657a)

Art. 778. Succession may be:

(1) Testamentary;

(2) Legal or intestate; or

(3) Mixed. (n)

Art. 779. Testamentary succession is that which results from the designation of an heir, made in a will executed in the form prescribed by law. (n)

Art. 780. Mixed succession is that effected partly by will and partly by operation of law. (n)

Art. 781. The inheritance of a person includes not only the property and the transmissible rights and obligations existing at the time of his death, but also those which have accrued thereto since the opening of the succession. (n)

Art. 782. An heir is a person called to the succession either by the provision of a will or by operation of law.

Devisees and legatees are persons to whom gifts of real and personal property are respectively given by virtue of a will. (n) 

TESTAMENTARY SUCCESSION

Art. 783. A will is an act whereby a person is permitted, with the formalities prescribed by law, to control to a certain degree the disposition of this estate, to take effect after his death. (667a)

Art. 784. The making of a will is a strictly personal act; it cannot be left in whole or in part of the discretion of a third person, or accomplished through the instrumentality of an agent or attorney. (670a)

Art. 785. The duration or efficacy of the designation of heirs, devisees or legatees, or the determination of the portions which they are to take, when referred to by name, cannot be left to the discretion of a third person. (670a)

Art. 786. The testator may entrust to a third person the distribution of specific property or sums of money that he may leave in general to specified classes or causes, and also the designation of the persons, institutions or establishments to which such property or sums are to be given or applied. (671a)

Art. 787. The testator may not make a testamentary disposition in such manner that another person has to determine whether or not it is to be operative. (n)

Art. 788. If a testamentary disposition admits of different interpretations, in case of doubt, that interpretation by which the disposition is to be operative shall be preferred. (n)

Art. 789. When there is an imperfect description, or when no person or property exactly answers the description, mistakes and omissions must be corrected, if the error appears from the context of the will or from extrinsic evidence, excluding the oral declarations of the testator as to his intention; and when an uncertainty arises upon the face of the will, as to the application of any of its provisions, the testator's intention is to be ascertained from the words of the will, taking into consideration the circumstances under which it was made, excluding such oral declarations. (n)

Art. 790. The words of a will are to be taken in their ordinary and grammatical sense, unless a clear intention to use them in another sense can be gathered, and that other can be ascertained.

Technical words in a will are to be taken in their technical sense, unless the context clearly indicates a contrary intention, or unless it satisfactorily appears that he was unacquainted with such technical sense. (675a)

Art. 791. The words of a will are to receive an interpretation which will give to every expression some effect, rather than one which will render any of the expressions inoperative; and of two modes of interpreting a will, that is to be preferred which will prevent intestacy. (n)

Art. 792. The invalidity of one of several dispositions contained in a will does not result in the invalidity of the other dispositions, unless it is to be presumed that the testator would not have made such other dispositions if the first invalid disposition had not been made. (n)

Art. 793. Property acquired after the making of a will shall only pass thereby, as if the testator had possessed it at the time of making the will, should it expressly appear by the will that such was his intention. (n)

Art. 794. Every devise or legacy shall cover all the interest which the testator could device or bequeath in the property disposed of, unless it clearly appears from the will that he intended to convey a less interest. (n)

Art. 795. The validity of a will as to its form depends upon the observance of the law in force at the time it is made. (n) 

 

 

 

The Elements And Nature Of Eminent Domain

Eminent domain refers to the inherent right of the state to condemn private property to public use upon payment of just compensation. Before the property can be taken for purposes of eminent domain, the following elements must be present:

(1) the expropriator must enter a private property;

(2) the entrance into private property must be for more than a momentary period;

(3) the entry into the property should be under warrant or color of legal authority;

(4) the property  must be devoted to a public use or otherwise informally appropriated or injuriously affected; and

(5) the utilization of the property for public use must be in such a way as to oust the owner and deprive him of all beneficial enjoyment of the property.

Just compensation is determined according to the following rules stated by Presidential Decree No. 1533 otherwise known as ESTABLISHING A UNIFORM BASIS FOR DETERMINING JUST COMPENSATION AND THE AMOUNT OF DEPOSIT FOR IMMEDIATE POSSESSION OF THE PROPERTY INVOLVED IN EMINENT DOMAIN PROCEEDINGS.

Section 1. In determining just compensation for private property acquired through eminent domain proceedings, the compensation to be paid shall not exceed the value declared by the owner or administrator or anyone having legal interest in the property or determined by the assessor, pursuant to the Real Property Tax Code, whichever value is lower, prior to the recommendation or decision of the appropriate Government office to acquire the property.

Sec. 2. Upon the filing of the petition for expropriation and the deposit in the Philippine National Bank at its main office or any of its branches of an amount equivalent to ten per cent (10%) of the amount of compensation provided in Section 1 hereof, the government or its authorized instrumentality agency or entity shall be entitled to immediate possession, control and disposition of the real property and the improvements thereon, including the power of demolition of necessary, notwithstanding the pendency of the issues before the courts.

Sec. 3. Presidential Decree No. 42, Section pars. 2 and 3 of PD No. 76, Sec. 92 of PD No. 464, PD 794, Sections 2 and 3 of PD 1224, Sections 2 and 3 of PD 1259 and Section 1 of PD 1313 and all other acts, decrees, letters of instructions, orders, ordinances or rules and regulations which are inconsistent herewith are hereby repealed, amended or modified accordingly.

Are Donated Properties Part Of Community Property?

Executing any marriage settlement is not common among married couples unless the situation really calls for it. This is why issues involving properties create conflict as far as the law on property relations is concerned. The problem arises once the couple is annulled. Case in point: The spouse of Mr. X was given a parcel of land by his employer with a Certificate of Title issued in his name. The wife was surprised to discover that the donated property is excluded from their community properties. This means that the donated property is not considered to be part of the conjugal properties. Should the donated property be divided equally? 

The law on property relations states that: 

Art. 75. The future spouses may, in the marriage settlements, agree upon the regime of absolute community, conjugal partnership of gains, complete separation of property, or any other regime. In the absence of a marriage settlement, or when the regime agreed upon is void, the system of absolute community of property as established in this Code shall govern.

Art. 92. The following shall be excluded from the community property:

(1) Property acquired during the marriage by gratuitous title by either spouse, and the fruits as well as the income thereof, if any, unless it is expressly provided by the donor, testator or grantor that they shall form part of the community property;

(2) Property for personal and exclusive use of either spouse. However, jewelry shall form part of the community property;

(3) Property acquired before the marriage by either spouse who has legitimate descendants by a former marriage, and the fruits as well as the income, if any, of such property. (201a)

Art. 93. Property acquired during the marriage is presumed to belong to the community, unless it is proved that it is one of those excluded therefrom. 

The property was donated to Mr.X during marriage, but it remains to be his exclusive property because the title was issued only in his name. It is not deemed to be part of the community property. This is why it is excluded from the community property.

All You Need To Know About Estate Tax

Estate tax or also referred to as inheritance tax is defined by the Bureau of Internal Revenue as “Estate tax is a tax on the right of the deceased person to transmit his/her estate to his/her lawful heirs and beneficiaries at the time of death and on certain transfers, which are made by law as equivalent to testamentary disposition. It is not a tax on property. It is a tax imposed on the privilege of transmitting property upon the death of the owner. The Estate Tax is based on the laws in force at the time of death notwithstanding the postponement of the actual possession or enjoyment of the estate by the beneficiary."

The executor, administrator, beneficiaries or heirs are the ones paying for the estate taxes. Transferring property to heirs or beneficiaries will not be executed unless the estate tax is paid.  

1. Who are required to file the Estate Tax return? 

a) The executor or administrator or any of the legal heirs of the decedent or non-resident of the Philippines under any of the following situation:

- In all cases of transfer subject to Estate Tax;

- Where though exempt from Estate Tax, the gross value of the estate exceeds two hundred thousand P 200,000.00; and

- Where regardless of the gross value, the estate consists of registered or registrable property such as real property, motor vehicle, share of stocks or other similar property for which a clearance from the Bureau of Internal Revenue (BIR) is required as a prerequisite for the transfer of ownership thereof in the name of the transferee. (part II par.(1.#3) of RMC No. 34-2013)

b) Where there is no executor or administrator appointed, qualified and acting within the Philippines, then any person in actual or constructive possession of any property of the decedent must file the return.

c) The Estate Tax imposed under the Tax Code shall be paid by the executor or administrator before the delivery of the distributive share in the inheritance to any heir or beneficiary. Where there are two or more executors or administrators, all of them are severally liable for the payment of the tax. The estate tax clearance issued by the Commissioner or the Revenue District Officer (RDO) having jurisdiction over the estate, will serve as the authority to distribute the remaining/distributable properties/share in the inheritance to the heir or beneficiary.

d) The executor or administrator of an estate has the primary obligation to pay the estate tax but the heir or beneficiary has subsidiary liability for the payment of that portion of the estate which his distributive share bears to the value of the total net estate. The extent of his liability, however, shall in no case exceed the value of his share in the inheritance.

2. What are included in gross estate?

For resident alien decedents/citizens:

a) Real or immovable property, wherever located

b) Tangible personal property, wherever located

c) Intangible personal property, wherever located 

For non-resident decedent/non-citizens:

a) Real or immovable property located in the Philippines 

b) Tangible personal property located in the Philippines 

c) Intangible personal property - with a situs in the Philippines such as:

- Franchise which must be exercised in the Philippines

- Shares, obligations or bonds issued by corporations organized or constituted in the Philippines

- Shares, obligations or bonds issued by a foreign corporation 85% of the business of which is located in the Philippines

- Shares, obligations or bonds issued by a foreign corporation if such shares, obligations or bonds have acquired a business situs in the Philippines ( i. e. they are used in the furtherance of its business in the Philippines)

- Shares, rights in any partnership, business or industry established in the Philippines

3. What are excluded from gross estate?

  • GSIS proceeds/ benefits
  • Accruals from SSS
  • Proceeds of life insurance where the beneficiary is irrevocably appointed
  • Proceeds of life insurance under a group insurance taken by employer (not taken out upon his life)
  • War damage payments
  • Transfer by way of bona fide sales
  • Transfer of property to the National Government or to any of its political subdivisions
  • Separate property of the surviving spouse
  • Merger of usufruct in the owner of the naked title
  • Properties held in trust by the decedent
  • Acquisition and/or transfer expressly declared as not taxable

4. What will be used as basis in the valuation of property?

The properties subject to Estate Tax shall be appraised based on its fair market value at the time of the decedent's death.

The appraised value of the real estate shall be whichever is higher of the fair market value, as determined by the Commissioner (zonal value) or the fair market value, as shown in the schedule of values fixed by the Provincial or City Assessor.

If there is no zonal value, the taxable base is the fair market value that appears in the latest tax declaration.

If there is an improvement, the value of improvement is the construction cost per building permit or the fair market value per latest tax declaration.

5. What are the allowable deductions for Estate Tax Purposes?

Applicable for deaths occurring after the effectivity of RA 8424 which is January 1, 1998

For a citizen or resident alien 

A. Expenses, losses, indebtedness and taxes

(1) Actual funeral expenses (whether paid or unpaid) up to the time of interment, or an amount equal to five percent (5%) of the gross estate, whichever is lower, but in no case to exceed P200,000.

(2) Judicial expenses of the testamentary or intestate proceedings.

(3) Claims against the estate.

(4) Claims of the deceased against insolvent persons where the value of the decedent’s interest therein is included in the value of the gross estate; and,

(5) Unpaid mortgages, taxes and casualty losses

B. Property previously taxed (Vanishing Deduction) (Section 86(2) of the NIRC as amended by Republic Act No. 8424)

An amount equal to the value specified below of any property forming a part of the gross estate situated in the Philippines of any person who died within five (5) years prior to the death of the decedent, or transferred to the decedent by gift within five (5) years prior to his death, where such property can be identified as having been received by the decedent from the donor by gift, or from such prior decedent by gift, bequest, devise or inheritance, or which can be identified as having been acquired in exchange for property so received:

One hundred percent (100%) of the value, if the prior decedent died within one (1) year prior to the death of the decedent, or if the property was transferred to him by gift within the same period prior to his death;

Eighty percent (80%) of the value, if the prior decedent died more than one (1) year but not more than two (2) years prior to the death of the decedent, or if the property was transferred to him by gift within the same period prior to his death;

Sixty percent (60%) of the value, if the prior decedent died more than two (2) years but not more than three (3) years prior to the death of the decedent, or if the property was transferred to him by gift within the same period prior to his death;

Forty percent (40%) of the value, if the prior decedent died more than three (3) years but not more than four (4) years prior to the death of the decedent, or if the property was transferred to him by gift within the same period prior to his death; and

Twenty percent (20%) of the value, if the prior decedent died more than four (4) years but not more than five (5) years prior to the death of the decedent, or if the property was transferred to him by gift within the same period prior to his death;

These deductions shall be allowed only where a donor’s tax or estate tax imposed was finally determined and paid by or on behalf of such donor, or the estate of such prior decedent, as the case may be, and only in the amount finally determined as the value of such property in determining the value of the gift, or the gross estate of such prior decedent, and only to the extent that the value of such property is included in the decedent’s gross estate, and only if in determining the value of the estate of the prior decedent, no Property Previously Taxed or Vanishing Deduction was allowable in respect of the property or properties given in exchange therefor. (Section 6 & 7 of RR 2-2003)

C. Transfers for public use

D. The family home - fair market value but not to exceed P1,000,000.00

The family home refers to the dwelling house, including the land on which it is situated, where the husband and wife, or a head of the family, and members of their family reside, as certified to by the Barangay Captain of the locality. The family home is deemed constituted on the house and lot from the time it is actually occupied as a family residence and is considered as such for as long as any of its beneficiaries actually resides therein. (Arts. 152 and 153, Family Code)

E. Standard deduction – A deduction in the amount of One Million Pesos (P1,000,000.00) shall be allowed as an additional deduction without need of substantiation.

F. Medical expenses – All medical expenses (cost of medicines, hospital bills, doctor’s fees, etc.) incurred (whether paid or unpaid) within one (1) year before the death of the decedent shall be allowed as a deduction provided that the same are duly substantiated with official receipts. For services rendered by the decedent’s attending physicians, invoices, statements of account duly certified by the hospital, and such other documents in support thereof and provided, further, that the total amount thereof, whether paid or unpaid, does not exceed Five Hundred Thousand Pesos (P500,000).

G. Amount received by heirs under Republic Act No. 4917-Any amount received by the heirs from the decedent’s employer as a consequence of the death of the decedent-employee in accordance with Republic Act No. 4917 is allowed as a deduction provided that the amount of the separation benefit is included as part of the gross estate of the decedent.

H. Net share of the surviving spouse in the conjugal partnership or community property

For a non-resident alien

A. Expenses, losses, indebtedness and taxes

B. Property previously taxed

C. Transfers for public use

D. Net share of the surviving spouse in the conjugal partnership or community property

No deduction shall be allowed in the case of a non-resident decedent not a citizen of the Philippines, unless the executor, administrator, or anyone of the heirs, as the case may be, includes in the return required to be filed in the Section 90 of the Code the value at the time of the decedent’s death of that part of his gross estate not situated in the Philippines.

Please note that the allowable deductions will vary depending on the law applicable at the time of the decedent’s death.

6. What does the term "Funeral Expenses" include? (Sec 6 (A)(1) of RR 2-2003)

The term "FUNERAL EXPENSES" is not confined to its ordinary or usual meaning. They include:

(a) The mourning apparel of the surviving spouse and unmarried minor children of the deceased bought and used on the occasion of the burial;

(b) Expenses for the deceased’s wake, including food and drinks;

(c) Publication charges for death notices;

(d) Telecommunication expenses incurred in informing relatives of the deceased;

(e) Cost of burial plot, tombstones, monument or mausoleum but not their upkeep. In case the deceased owns a family estate or several burial lots, only the value corresponding to the plot where he is buried is deductible;

(f) Interment and/or cremation fees and charges; and

(g) All other expenses incurred for the performance of the rites and ceremonies incident to interment.

Expenses incurred after the interment, such as for prayers, masses, entertainment, or the like are not deductible. Any portion of the funeral and burial expenses borne or defrayed by relatives and friends of the deceased are not deductible. Actual funeral expenses shall mean those which are actually incurred in connection with the interment or burial of the deceased. The expenses must be duly supported by official receipts or invoices or other evidence to show that they were actually incurred.

7. What does the term "Judicial Expenses" include? (Sec 6 (A)(2) of RR 2-2003)

Expenses allowed as deduction under this category are those incurred in the inventory-taking of a assets comprising the gross estate, their administration, the payment of debts of the estate, as well as the distribution of the estate among the heirs. In short, these deductible items are expenses incurred during the settlement of the estate but not beyond the last day prescribed by law, or the extension thereof, for the filing of the estate tax return. Judicial expenses may include:

(a) Fees of executor or administrator;

(b) Attorney’s fees;

(c) Court fees;

(d) Accountant’s fees;

(e) Appraiser’s fees;

(f) Clerk hire;

(g) Costs of preserving and distributing the estate;

(h) Costs of storing or maintaining property of the estate; and

(i) Brokerage fees for selling property of the estate.

Any unpaid amount for the aforementioned cost and expenses claimed under “Judicial Expenses” should be supported by a sworn statement of account issued and signed by the creditor.

8. What are the requisites for deductibility of claims against the Estate? (Sec 6(A)(3) of RR 2-2003)

(a) The liability represents a personal obligation of the deceased existing at the time of his death except unpaid obligations incurred incident to his death such as unpaid funeral expenses (i.e., expenses incurred up to the time of interment) and unpaid medical expenses which are classified under a different category of deductions pursuant to these Regulations;

(b) The liability was contracted in good faith and for adequate and full consideration in money or money’s worth;

(c) The claim must be a debt or claim which is valid in law and enforceable in court;

(d) The indebtedness must not have been condoned by the creditor or the action to collect from the decedent must not have prescribed.

9.  How do we determine the fair market value of the unlisted stocks? (RR NO. 6-2013) (Annex U)

In determining the value of the shares, the Adjusted Net Asset Method shall be used whereby all assets and liabilities are adjusted to fair market values. The net of adjusted asset minus the adjusted liability value is the indicated value of the equity. 

For purposes of this item, the appraised value of real property at the time of sale shall be the highest among the following:

       (a) The fair market value as determined by the Commissioner, or

       (b) The fair market value as shown in the schedule of values fixed by the Provincial and City Assessors, or

       (c) The fair market value as determined by Independent Appraiser. 

Source: www.bir.gov.ph

The Rules For Partition Of Commonly Owned Property

What happens when siblings inherit a commonly owned property? Disputes that involve partition of property is not an uncommon scenario especially when one party decides to get his/her share of the property. Without knowing the general rule, the issue with partition of property will be brought to court.  The general rule specified under Articles 1082 to 1090 of the New Civil Code of the Philippines will be able to shed light on this legal matter. 

Art. 1082. Every act which is intended to put an end to indivision among co-heirs and legatees or devisees is deemed to be a partition, although it should purport to be a sale, and exchange, a compromise, or any other transaction. (n)

Art. 1083. Every co-heir has a right to demand the division of the estate unless the testator should have expressly forbidden its partition, in which case the period of indivision shall not exceed twenty years as provided in article 494. This power of the testator to prohibit division applies to the legitime.

Even though forbidden by the testator, the co-ownership terminates when any of the causes for which partnership is dissolved takes place, or when the court finds for compelling reasons that division should be ordered, upon petition of one of the co-heirs. (1051a)

Art. 1084. Voluntary heirs upon whom some condition has been imposed cannot demand a partition until the condition has been fulfilled; but the other co-heirs may demand it by giving sufficient security for the rights which the former may have in case the condition should be complied with, and until it is known that the condition has not been fulfilled or can never be complied with, the partition shall be understood to be provisional. (1054a)

Art. 1085. In the partition of the estate, equality shall be observed as far as possible, dividing the property into lots, or assigning to each of the co-heirs things of the same nature, quality and kind. (1061)

Art. 1086. Should a thing be indivisible, or would be much impaired by its being divided, it may be adjudicated to one of the heirs, provided he shall pay the others the excess in cash.

Nevertheless, if any of the heirs should demand that the thing be sold at public auction and that strangers be allowed to bid, this must be done. (1062)

Art. 1087. In the partition the co-heirs shall reimburse one another for the income and fruits which each one of them may have received from any property of the estate, for any useful and necessary expenses made upon such property, and for any damage thereto through malice or neglect. (1063)

Art. 1088. Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale, provided they do so within the period of one month from the time they were notified in writing of the sale by the vendor. (1067a)

Art. 1089. The titles of acquisition or ownership of each property shall be delivered to the co-heir to whom said property has been adjudicated. (1065a)

Art. 1090. When the title comprises two or more pieces of land which have been assigned to two or more co-heirs, or when it covers one piece of land which has been divided between two or more co-heirs, the title shall be delivered to the one having the largest interest, and authentic copies of the title shall be furnished to the other co-heirs at the expense of the estate. If the interest of each co-heir should be the same, the oldest shall have the title. (1066a) 

Lot Donation: Are Verbal Contracts Legally Enforceable?

What happens when a landowner enters into an agreement with another person whereby the landowner disposes of a lot gratuitously? Does the recipient of the lot donation have the right to enforce the verbal agreement despite the absence of proper documents. Article 725 of the New Civil Code considers the donation of an immovable property valid if it is made in a public document. With regard to contracts, Article 1403 of the same code considers the following contract unenforceable:

UNENFORCEABLE CONTRACTS (n)

Art. 1403. The following contracts are unenforceable, unless they are ratified:

(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 of 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.

It is also important to note the nature of donations: 

NATURE OF DONATIONS

Art. 725. Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it. (618a)

Art. 726. When a person gives to another a thing or right on account of the latter's merits or of the services rendered by him to the donor, provided they do not constitute a demandable debt, or when the gift imposes upon the donee a burden which is less than the value of the thing given, there is also a donation. (619)

Art. 727. Illegal or impossible conditions in simple and remuneratory donations shall be considered as not imposed. (n)

Art. 728. Donations which are to take effect upon the death of the donor partake of the nature of testamentary provisions, and shall be governed by the rules established in the Title on Succession. (620)

Art. 729. When the donor intends that the donation shall take effect during the lifetime of the donor, though the property shall not be delivered till after the donor's death, this shall be a donation inter vivos. The fruits of the property from the time of the acceptance of the donation, shall pertain to the donee, unless the donor provides otherwise. (n)

Art. 730. The fixing of an event or the imposition of a suspensive condition, which may take place beyond the natural expectation of life of the donor, does not destroy the nature of the act as a donation inter vivos, unless a contrary intention appears. (n)

Art. 731. When a person donates something, subject to the resolutory condition of the donor's survival, there is a donation inter vivos. (n)

Art. 732. Donations which are to take effect inter vivos shall be governed by the general provisions on contracts and obligations in all that is not determined in this Title. (621)

Art. 733. Donations with an onerous cause shall be governed by the rules on contracts and remuneratory donations by the provisions of the present Title as regards that portion which exceeds the value of the burden imposed. (622)

Art. 734. The donation is perfected from the moment the donor knows of the acceptance by the donee. (623) 

Exclusive Property: Administration, Ownership and Possession

Married couples who decide to call it quits often argue about the properties acquired before and during marriage. Matters regarding splitting properties in half between husband and wife are brought to court as couples cannot seem to meet half way. The law has different take on this matter, depending on the circumstances. The Family Code of the Philippines provides a detailed explanation about the law governing marital properties. Since it took effect in 1988, revisions must be taken into account. Hence, couples who got married on August 3, 1988 up to present will no longer follow the law of conjugal property. This is because former-president Corazon Aquino signed the provisions of the Family Code of the Philippines. Under the provisions of this law, without marriage settlement or more commonly referred to as prenuptial agreement, a married couple's properties, which are acquired before and during marriage will be considered to be co-owned by the couple. This is called absolute community of property. 

Even properties which have been inherited or donated by either spouse will still be part of the absolute community of property. If couples decide to file a petition for legal separation, annulment or divorce, the legal action will have no effect on the property regime unless judicial separation of properties (where couples are required to split properties in half) has been filed. 

Exclusive Property of Each Spouse

Art. 109. The following shall be the exclusive property of each spouse:

(1) That which is brought to the marriage as his or her own;

(2) That which each acquires during the marriage by gratuitous title;

(3) That which is acquired by right of redemption, by barter or by exchange with property belonging to only one of the spouses; and

(4) That which is purchased with exclusive money of the wife or of the husband.

Art. 110. The spouses retain the ownership, possession, administration and enjoyment of their exclusive properties.

Either spouse may, during the marriage, transfer the administration of his or her exclusive property to the other by means of a public instrument, which shall be recorded in the registry of property of the place the property is located.

Art. 111. A spouse of age may mortgage, encumber, alienate or otherwise dispose of his or her exclusive property, without the consent of the other spouse, and appear alone in court to litigate with regard to the same.

Art. 112. The alienation of any exclusive property of a spouse administered by the other automatically terminates the administration over such property and the proceeds of the alienation shall be turned over to the owner-spouse.

Art. 113. Property donated or left by will to the spouses, jointly and with designation of determinate shares, shall pertain to the donee-spouses as his or her own exclusive property, and in the absence of designation, share and share alike, without prejudice to the right of accretion when proper.

Art. 114. If the donations are onerous, the amount of the charges shall be borne by the exclusive property of the donee spouse, whenever they have been advanced by the conjugal partnership of gains.

Art. 115. Retirement benefits, pensions, annuities, gratuities, usufructs and similar benefits shall be governed by the rules on gratuitous or onerous acquisitions as may be proper in each case.

The Effect of Property Donations and its Limitations

The deed of donation will only be perfected if it meets the requisites. One of which is that the donor must have the capacity to make the donation. It is also imperative that the donee is entitled to be supported by the donor. 

EFFECT OF DONATIONS AND LIMITATIONS THEREON

Art. 750. The donations may comprehend all the present property of the donor, or part thereof, provided he reserves, in full ownership or in usufruct, sufficient means for the support of himself, and of all relatives who, at the time of the acceptance of the donation, are by law entitled to be supported by the donor. Without such reservation, the donation shall be reduced in petition of any person affected. (634a)

Art. 751. Donations cannot comprehend future property.

By future property is understood anything which the donor cannot dispose of at the time of the donation. (635)

Art. 752. The provisions of Article 750 notwithstanding, no person may give or receive, by way of donation, more than he may give or receive by will.

The donation shall be inofficious in all that it may exceed this limitation. (636)

Art. 753. When a donation is made to several persons jointly, it is understood to be in equal shares, and there shall be no right of accretion among them, unless the donor has otherwise provided.

The preceding paragraph shall not be applicable to donations made to the husband and wife jointly, between whom there shall be a right of accretion, if the contrary has not been provided by the donor. (637)

Art. 754. The donee is subrogated to all the rights and actions which in case of eviction would pertain to the donor. The latter, on the other hand, is not obliged to warrant the things donated, save when the donation is onerous, in which case the donor shall be liable for eviction to the concurrence of the burden.

The donor shall also be liable for eviction or hidden defects in case of bad faith on his part. (638a)

Art. 755. The right to dispose of some of the things donated, or of some amount which shall be a charge thereon, may be reserved by the donor; but if he should die without having made use of this right, the property or amount reserved shall belong to the donee. (639)

Art. 756. The ownership of property may also be donated to one person and the usufruct to another or others, provided all the donees are living at the time of the donation. (640a)

Art. 757. Reversion may be validly established in favor of only the donor for any case and circumstances, but not in favor of other persons unless they are all living at the time of the donation.

Any reversion stipulated by the donor in favor of a third person in violation of what is provided in the preceding paragraph shall be void, but shall not nullify the donation. (614a)

Art. 758. When the donation imposes upon the donee the obligation to pay the debts of the donor, if the clause does not contain any declaration to the contrary, the former is understood to be liable to pay only the debts which appear to have been previously contracted. In no case shall the donee be responsible for the debts exceeding the value of the property donated, unless a contrary intention clearly appears. (642a)

Art. 759. There being no stipulation regarding the payment of debts, the donee shall be responsible therefor only when the donation has been made in fraud of creditors.

The donation is always presumed to be in fraud of creditors, when at the time thereof the donor did not reserve sufficient property to pay his debts prior to the donation. (643) 

The Difference Between Immovable And Movable Property

Property ownership has its own classification: movable and immovable property. Movable property refers to personal property, which is either consumable or nonconsumable. On the other hand, immovable property refers to roads, constructions and buildings. They are referred to as immovable because they adhere to the soil. The Civil Code of the Philippines gives a detailed information about the difference between these classifications. 

CHAPTER 1

IMMOVABLE PROPERTY

Art. 415. The following are immovable property:

(1) Land, buildings, roads and constructions of all kinds adhered to the soil;

(2) Trees, plants, and growing fruits, while they are attached to the land or form an integral part of an immovable;

(3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object;

(4) Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or on lands by the owner of the immovable in such a manner that it reveals the intention to attach them permanently to the tenements;

(5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works;

(6) Animal houses, pigeon-houses, beehives, fish ponds or breeding places of similar nature, in case their owner has placed them or preserves them with the intention to have them permanently attached to the land, and forming a permanent part of it; the animals in these places are included;

(7) Fertilizer actually used on a piece of land;

(8) Mines, quarries, and slag dumps, while the matter thereof forms part of the bed, and waters either running or stagnant;

(9) Docks and structures which, though floating, are intended by their nature and object to remain at a fixed place on a river, lake, or coast;

(10) Contracts for public works, and servitudes and other real rights over immovable property. (334a)

CHAPTER 2

MOVABLE PROPERTY

Art. 416. The following things are deemed to be personal property:

(1) Those movables susceptible of appropriation which are not included in the preceding article;

(2) Real property which by any special provision of law is considered as personal property;

(3) Forces of nature which are brought under control by science; and

(4) In general, all things which can be transported from place to place without impairment of the real property to which they are fixed. (335a)

Art. 417. The following are also considered as personal property:

(1) Obligations and actions which have for their object movables or demandable sums; and

(2) Shares of stock of agricultural, commercial and industrial entities, although they may have real estate. (336a)

Art. 418. Movable property is either consumable or nonconsumable. To the first class belong those movables which cannot be used in a manner appropriate to their nature without their being consumed; to the second class belong all the others. (337) 

Trademark Infringement: When Imitation Crosses The Line

They say that "imitation is the sincerest form of flattery", but this is not always the case. While some may consider imitation as a way of paying tribute to the original author, an individual can be held liable for trademark infringement if details of the original work have been copied. Although the details may not be completely identical, any resemblance to the original work can still bring confusion to the buyer or purchaser. How does a person violate intellectual property law? Republic Act No. 8293 or otherwise known as the Intellectual Property Code of the Philippines provides a summary of the law:

Chapter II

ORIGINAL WORKS

Sec. 172. Literary and Artistic Works. -

172.1 Literary and artistic works, hereinafter referred to as "works", are original intellectual creations in the literary and artistic domain protected from the moment of their creation and shall include in particular:

(a) Books, pamphlets, articles and other writings;

(b) Periodicals and newspapers;

(c) Lectures, sermons, addresses, dissertations prepared for oral delivery, whether or not reduced in writing or other material form;

(d) Letters;

(e) Dramatic or dramatico-musical compositions; choreographic works or entertainment in dumb shows;

(f) Musical compositions, with or without words;

(g) Works of drawing, painting, architecture, sculpture, engraving, lithography or other works of art; models or designs for works of art;

(h) Original ornamental designs or models for articles of manufacture, whether or not registrable as an industrial design, and other works of applied art;

(i) Illustrations, maps, plans, sketches, charts and three-dimensional works relative to geography, topography, architecture or science;

(j) Drawings or plastic works of a scientific or technical character;

(k) Photographic works including works produced by a process analogous to photography; lantern slides;

(l) Audiovisual works and cinematographic works and works produced by a process analogous to cinematography or any process for making audio-visual recordings;

(m) Pictorial illustrations and advertisements;

(n) Computer programs; and

(o) Other literary, scholarly, scientific and artistic works.

172.2. Works are protected by the sole fact of their creation, irrespective of their mode or form of expression, as well as of their content, quality and purpose. (Sec. 2, P. D. No. 49a)

Chapter III 

DERIVATIVE WORKS

Sec. 173. Derivative Works. -

173.1. The following derivative works shall also be protected by copyright:

(a) Dramatizations, translations, adaptations, abridgments, arrangements, and other alterations of literary or artistic works; and

(b) Collections of literary, scholarly or artistic works, and compilations of data and other materials which are original by reason of the selection or coordination or arrangement of their contents. (Sec. 2, [P] and [Q], P. D. No. 49)

173.2. The works referred to in paragraphs (a) and (b) of Subsection 173.1 shall be protected as a new works: Provided however, That such new work shall not affect the force of any subsisting copyright upon the original works employed or any part thereof, or be construed to imply any right to such use of the original works, or to secure or extend copyright in such original works. (Sec. 8, P. D. 49; Art. 10, TRIPS)

Sec. 174. Published Edition of Work. - In addition to the right to publish granted by the author, his heirs or assigns, the publisher shall have a copy right consisting merely of the right of reproduction of the typographical arrangement of the published edition of the work. (n)  

Chapter IV 

WORKS NOT PROTECTED

Sec. 175. Unprotected Subject Matter. - Notwithstanding the provisions of Sections 172 and 173, no protection shall extend, under this law, to any idea, procedure, system method or operation, concept, principle, discovery or mere data as such, even if they are expressed, explained, illustrated or embodied in a work; news of the day and other miscellaneous facts having the character of mere items of press information; or any official text of a legislative, administrative or legal nature, as well as any official translation thereof. (n)

Sec. 176. Works of the Government. -

176.1. No copyright shall subsist in any work of the Government of the Philippines. However, prior approval of the government agency or office wherein the work is created shall be necessary for exploitation of such work for profit. Such agency or office may, among other things, impose as a condition the payment of royalties. No prior approval or conditions shall be required for the use of any purpose of statutes, rules and regulations, and speeches, lectures, sermons, addresses, and dissertations, pronounced, read or rendered in courts of justice, before administrative agencies, in deliberative assemblies and in meetings of public character. (Sec. 9, First Par., P. D. No. 49)

176.2. The Author of speeches, lectures, sermons, addresses, and dissertations mentioned in the preceding paragraphs shall have the exclusive right of making a collection of his works. (n)

176.3. Notwithstanding the foregoing provisions, the Government is not precluded from receiving and holding copyrights transferred to it by assignment, bequest or otherwise; nor shall publication or republication by the government in a public document of any work in which copy right is subsisting be taken to cause any abridgment or annulment of the copyright or to authorize any use or appropriation of such work without the consent of the copyright owners. (Sec. 9, Third Par., P. D. No. 49)

CHAPTER V 

COPYRIGHT OR ECONOMIC RIGHTS

  Sec. 177. Copy or Economic Rights. - Subject to the provisions of Chapter VIII, copyright or economic rights shall consist of the exclusive right to carry out, authorize or prevent the following acts:

177.1. Reproduction of the work or substantial portion of the work;

177.2 Dramatization, translation, adaptation, abridgment, arrangement or other transformation of the work;

177.3. The first public distribution of the original and each copy of the work by sale or other forms of transfer of ownership;

177.4. Rental of the original or a copy of an audiovisual or cinematographic work, a work embodied in a sound recording, a computer program, a compilation of data and other materials or a musical work in graphic form, irrespective of the ownership of the original or the copy which is the subject of the rental; (n)

177.5. Public display of the original or a copy of the work;

177.6. Public performance of the work; and

177.7. Other communication to the public of the work (Sec. 5, P. D. No. 49a)

CHAPTER VI 

OWNERSHIP OF COPYRIGHT

  Sec. 178. Rules on Copyright Ownership. - Copyright ownership shall be governed by the following rules:

178.1. Subject to the provisions of this section, in the case of original literary and artistic works, copyright shall belong to the author of the work;

178.2. In the case of works of joint authorship, the co-authors shall be the original owners of the copyright and in the absence of agreement, their rights shall be governed by the rules on co-ownership. If, however, a work of joint authorship consists of parts that can be used separately and the author of each part can be identified, the author of each part shall be the original owner of the copyright in the part that he has created;

178.3. In the case of work created by an author during and in the course of his employment, the copyright shall belong to:

(a) The employee, if the creation of the object of copyright is not a part of his regular duties even if the employee uses the time, facilities and materials of the employer.

(b) The employer, if the work is the result of the performance of his regularly-assigned duties, unless there is an agreement, express or implied, to the contrary.

178.4. In the case of a work-commissioned by a person other than an employer of the author and who pays for it and the work is made in pursuance of the commission, the person who so commissioned the work shall have ownership of work, but the copyright thereto shall remain with the creator, unless there is a written stipulation to the contrary;

178.5. In the case of audiovisual work, the copyright shall belong to the producer, the author of the scenario, the composer of the music, the film director, and the author of the work so adapted. However, subject to contrary or other stipulations among the creators, the producers shall exercise the copyright to an extent required for the exhibition of the work in any manner, except for the right to collect performing license fees for the performance of musical compositions, with or without words, which are incorporated into the work; and

178.6. In respect of letters, the copyright shall belong to the writer subject to the provisions of Article 723 of the Civil Code. (Sec. 6, P. D. No. 49a)

Sec. 179. Anonymous and Pseudonymous Works. - For purposes of this Act, the publishers shall be deemed to represent the authors of articles and other writings published without the names of the authors or under pseudonyms, unless the contrary appears, or the pseudonyms or adopted name leaves no doubts as to the author’s identity, or if the author of the anonymous works discloses his identity. (Sec. 7, P. D. 49)

CHAPTER VII 

TRANSFER OR ASSIGNMENT OF COPYRIGHT

  Sec. 180. Rights of Assignee. -

180.1. The copyright may be assigned in whole or in part. Within the scope of the assignment, the assignee is entitled to all the rights and remedies which the assignor had with respect to the copyright.

180.2. The copyright is not deemed assigned inter vivos in whole or in part unless there is a written indication of such intention.

180.3. The submission of a literary, photographic or artistic work to a newspaper, magazine or periodical for publication shall constitute only a license to make a single publication unless a greater right is expressly granted. If two (2) or more persons jointly own a copyright or any part thereof, neither of the owners shall be entitled to grant licenses without the prior written consent of the other owner or owners. (Sec. 15, P. D. No. 49a)

Sec. 181. Copyright and Material Object. - The copyright is distinct from the property in the material object subject to it. Consequently, the transfer or assignment of the copyright shall not itself constitute a transfer of the material object. Nor shall a transfer or assignment of the sole copy or of one or several copies of the work imply transfer or assignment of the copyright. (Sec. 16, P. D. No. 49)

Sec. 182. Filing of Assignment of License. - An assignment or exclusive license may be filed in duplicate with the National Library upon payment of the prescribed fee for registration in books and records kept for the purpose. Upon recording, a copy of the instrument shall be, returned to the sender with a notation of the fact of record. Notice of the record shall be published in the IPO Gazette. (Sec. 19, P. D. No. 49a)

Sec. 183. Designation of Society. - The copyright owners or their heirs may designate a society of artists, writers or composers to enforce their economic rights and moral rights on their behalf. (Sec. 32, P. D. No. 49a) 

CHAPTER VIII 

LIMITATIONS ON COPYRIGHT

Sec. 184. Limitations on Copyright. -

184.1. Notwithstanding the provisions of Chapter V, the following acts shall not constitute infringement of copyright:

(a) the recitation or performance of a work, once it has been lawfully made accessible to the public, if done privately and free of charge or if made strictly for a charitable or religious institution or society; (Sec. 10(1), P. D. No. 49)

(b) The making of quotations from a published work if they are compatible with fair use and only to the extent justified for the purpose, including quotations from newspaper articles and periodicals in the form of press summaries: Provided, That the source and the name of the author, if appearing on the work, are mentioned; (Sec. 11, Third Par., P. D. No. 49)

(c) The reproduction or communication to the public by mass media of articles on current political, social, economic, scientific or religious topic, lectures, addresses and other works of the same nature, which are delivered in public if such use is for information purposes and has not been expressly reserved: Provided, That the source is clearly indicated; (Sec. 11, P. D. No. 49)

(d) The reproduction and communication to the public of literary, scientific or artistic works as part of reports of current events by means of photography, cinematography or broadcasting to the extent necessary for the purpose; (Sec. 12, P. D. No. 49)

(e) The inclusion of a work in a publication, broadcast, or other communication to the public, sound recording or film, if such inclusion is made by way of illustration for teaching purposes and is compatible with fair use: Provided, That the source and of the name of the author, if appearing in the work, are mentioned;

(f) The recording made in schools, universities, or educational institutions of a work included in a broadcast for the use of such schools, universities or educational institutions: Provided, That such recording must be deleted within a reasonable period after they were first broadcast: Provided, further, That such recording may not be made from audiovisual works which are part of the general cinema repertoire of feature films except for brief excerpts of the work;

(g) The making of ephemeral recordings by a broadcasting organization by means of its own facilities and for use in its own broadcast;

(h) The use made of a work by or under the direction or control of the Government, by the National Library or by educational, scientific or professional institutions where such use is in the public interest and is compatible with fair use;

(i) The public performance or the communication to the public of a work, in a place where no admission fee is charged in respect of such public performance or communication, by a club or institution for charitable or educational purpose only, whose aim is not profit making, subject to such other limitations as may be provided in the Regulations; (n)

(j) Public display of the original or a copy of the work not made by means of a film, slide, television image or otherwise on screen or by means of any other device or process: Provided, That either the work has been published, or, that original or the copy displayed has been sold, given away or otherwise transferred to another person by the author or his successor in title; and

(k) Any use made of a work for the purpose of any judicial proceedings or for the giving of professional advice by a legal practitioner.

184.2. The provisions of this section shall be interpreted in such a way as to allow the work to be used in a manner which does not conflict with the normal exploitation of the work and does not unreasonably prejudice the right holder's legitimate interest.

Sec. 185. Fair Use of a Copyrighted Work. -

185.1. The fair use of a copyrighted work for criticism, comment, news reporting, teaching including multiple copies for classroom use, scholarship, research, and similar purposes is not an infringement of copyright. Decompilation, which is understood here to be the reproduction of the code and translation of the forms of the computer program to achieve the inter-operability of an independently created computer program with other programs may also constitute fair use. In determining whether the use made of a work in any particular case is fair use, the factors to be considered shall include:

(a) The purpose and character of the use, including whether such use is of a commercial nature or is for non-profit education purposes;

(b) The nature of the copyrighted work;

(c) The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(d) The effect of the use upon the potential market for or value of the copyrighted work.

185.2 The fact that a work is unpublished shall not by itself bar a finding of fair use if such finding is made upon consideration of all the above factors.

Sec. 186. Work of Architecture. - Copyright in a work of architecture shall include the right to control the erection of any building which reproduces the whole or a substantial part of the work either in its original form or in any form recognizably derived from the original; Provided, That the copyright in any such work shall not include the right to control the reconstruction or rehabilitation in the same style as the original of a building to which the copyright relates. (n)

Sec. 187. Reproduction of Published Work. -

187.1. Notwithstanding the provision of Section 177, and subject to the provisions of Subsection 187.2, the private reproduction of a published work in a single copy, where the reproduction is made by a natural person exclusively for research and private study, shall be permitted, without the authorization of the owner of copyright in the work.

187.2. The permission granted under Subsection 187.1 shall not extend to the reproduction of:

(a) A work of architecture in form of building or other construction;

(b) An entire book, or a substantial past thereof, or of a musical work in which graphics form by reprographic means;

(c) A compilation of data and other materials;

(d) A computer program except as provided in Section 189; and

(e) Any work in cases where reproduction would unreasonably conflict with a normal exploitation of the work or would otherwise unreasonably prejudice the legitimate interests of the author. (n)

Sec. 188. Reprographic Reproduction by Libraries. -

188.1. Notwithstanding the provisions of Subsection 177.6, any library or archive whose activities are not for profit may, without the authorization of the author of copyright owner, make a single copy of the work by reprographic reproduction:

(a) Where the work by reason of its fragile character or rarity cannot be lent to user in its original form;

(b) Where the works are isolated articles contained in composite works or brief portions of other published works and the reproduction is necessary to supply them; when this is considered expedient, to person requesting their loan for purposes of research or study instead of lending the volumes or booklets which contain them; and

(c) Where the making of such a copy is in order to preserve and, if necessary in the event that it is lost, destroyed or rendered unusable, replace a copy, or to replace, in the permanent collection of another similar library or archive, a copy which has been lost, destroyed or rendered unusable and copies are not available with the publisher.

188.2. Notwithstanding the above provisions, it shall not be permissible to produce a volume of a work published in several volumes or to produce missing tomes or pages of magazines or similar works, unless the volume, tome or part is out of stock; Provided, That every library which, by law, is entitled to receive copies of a printed work, shall be entitled, when special reasons so require, to reproduce a copy of a published work which is considered necessary for the collection of the library but which is out of stock. (Sec. 13, P. D. 49a)

Sec. 189. Reproduction of Computer Program. -

189.1. Notwithstanding the provisions of Section 177, the reproduction in one (1) back-up copy or adaptation of a computer program shall be permitted, without the authorization of the author of, or other owner of copyright in, a computer program, by the lawful owner of that computer program: Provided, That the copy or adaptation is necessary for:

(a) The use of the computer program in conjunction with a computer for the purpose, and to the extent, for which the computer program has been obtained; and

(b) Archival purposes, and, for the replacement of the lawfully owned copy of the computer program in the event that the lawfully obtained copy of the computer program is lost, destroyed or rendered unusable.

189.2. No copy or adaptation mentioned in this Section shall be used for any purpose other than the ones determined in this Section, and any such copy or adaptation shall be destroyed in the event that continued possession of the copy of the computer program ceases to be lawful.

189.3. This provision shall be without prejudice to the application of Section 185 whenever appropriate. (n)

Sec. 190. Importation for Personal Purposes. -

190.1. Notwithstanding the provision of Subsection 177.6, but subject to the limitation under the Subsection 185.2, the importation of a copy of a work by an individual for his personal purposes shall be permitted without the authorization of the author of, or other owner of copyright in, the work under the following circumstances:

(a) When copies of the work are not available in the Philippines and:

(i) Not more than one (1) copy at one time is imported for strictly individual use only; or (ii) The importation is by authority of and for the use of the Philippine Government; or 

(iii) The importation, consisting of not more than three (3) such copies or likenesses in any one invoice, is not for sale but for the use only of any religious, charitable, or educational society or institution duly incorporated or registered, or is for the encouragement of the fine arts, or for any state school, college, university, or free public library in the Philippines.

(b) When such copies form parts of libraries and personal baggage belonging to persons or families arriving from foreign countries and are not intended for sale: Provided, That such copies do not exceed three (3).

190.2. Copies imported as allowed by this Section may not lawfully be used in any way to violate the rights of owner the copyright or annul or limit the protection secured by this Act, and such unlawful use shall be deemed an infringement and shall be punishable as such without prejudice to the proprietor’s right of action.

190.3. Subject to the approval of the Secretary of Finance, the Commissioner of Customs is hereby empowered to make rules and regulations for preventing the importation of articles the importation of which is prohibited under this Section and under treaties and conventions to which the Philippines may be a party and for seizing and condemning and disposing of the same in case they are discovered after they have been imported. (Sec. 30, P. D. No. 49)

The Philippine Anti-Dummy Law

A couple of friends recently told me how their very clever Philippine attorney got around the Philippine rule that non-Philippine citizens can not own real estate in the Philippines by forming a Philippine corporation. The corporation buys the property, then they use a variety of documents to avoid the 40/60 rule that limits non-citizens equity ownership to 40 percent. This all sounds very nice, but, my question to them, did their attorney discuss the Philippine Anti-Dummy Law with you?

Their question to me, what is the Anti-Dummy Law? My answer, good question. The Anti-Dummy Law is a law created to penalize those who violate foreign equity restrictions and evade nationalization laws of the Philippines. The Anti-Dummy Law prohibits dummy, or using what I call a proxy arrangement to accomplish a transaction not allowed under Philippine law. 

To get around the Philippine land ownership rules for example, non-citizens may arrange for a Filipino citizen to purchase land and register the land title to the Filipino citizen’s name, but with the agreement that the whole right to the land belongs to the foreigner. In this case, the Filipino citizen is the “proxy,” thus the “dummy arrangement.” Another common approach, is to create a corporation. The problem with using a corporation to avoid the land restrictions rules, is the 40-60 ratio that applies (40% foreign ownership, 60% Filipino ownership). Therefore a variety of side agreements are used to keep control of the corporation in the hands of the foreigner.

Again, The Anti-Dummy Law prohibits an arrangement usually done by a foreigner to evade nationality restrictions. If you’re caught violating the Anti-Dummy Law, you can receive a jail sentence for up to 5-15 years or receive a hefty fine. Non-Citizens and Filipino citizens who engaged in the dummy arrangement will both be held liable. 

This is only a limited overview of the broad reaching Anti- Dummy Law. If you are setting up a business or acquiring real property in the Philippines, you need to be aware of how the anti-dummy rules may be applied to the way the transaction is being structured. If you don’t want your dream business or property investment in the Philippines to turn into a legal nightmare. 

Now, my friends have assured me after talking to their attorney, there is nothing to worry about. The anti- dummy rules are not being enforced. However, the law is on the books for a reason. Therefore, this does not mean that the law will be enforced in the future. Should this happen, and you run afoul of the Anti- Dummy Law, it is you, not your attorney or friends that told you that it is okay to violate Philippine law, who is on the legal hook.

How Can Landlords And Tenants Meet Halfway?

The Rent Control Act of 2009 used to protect tenants and landlords so both parties can arrive at an agreement. However, the law has already expired on December 31, 2015. While most landlords and tenants in the Philippines rely on verbal agreement, oral contracts are often breached when one party realizes later on, that it was not a fair deal. Even without the written contract, both parties can meet halfway. 

Rent Control Act of 2009

Section 4. Limit on Increases in Rent. - For a period of one (1) year from its effectivity, no increase shall be imposed upon the rent of any residential unit covered by this Act: Provided, That after such period until December 31, 2013, the rent of any residential unit covered by this Act shall not be increased by more than seven percent (7%) annually as long as the unit is occupied by the same lessee: Provided, further, That when the residential unit becomes vacant, the lessor may set the initial rent for the next lessee: Provided, however, That in the case of boarding houses, dormitories, rooms and bedspaces offered for rent to students, no increase in rental more than once per year shall be allowed.

Section 5. Coverage of this Act. - All residential units in the National Capital Region and other highly urbanized cities, the total monthly rent for each of which ranges from One peso (P1.00) to Ten thousand pesos (P10,000.00) and all residential units in all other areas, the total monthly rent for each of which ranges from One peso (P1.00) to Five thousand pesos (P5,000.00) as of the effectivity date of this Act shall be covered, without prejudice to existing contracts.

Section 6. Authority to Continue Rental Regulation. - Notwithstanding he lapse of the period provided in Section 4 of this Act. the Housing and Urban Development Coordinating Council (HUDCC) is hereby granted the authority to continue the regulation of the rental of certain residential units, to determine the period of regulation and its subsequent extensions if warranted, to determine the residential units covered and to adjust the allowable limit on rental increases per annum, taking into consideration, among others, National Statistics Office (NSO) census on rental units, prevailing rental rates, the monthly inflation rate on rentals of the immediately preceding year, and rental price index.

Section 7. Rent and Requirement of Bank Deposit. - Rent shall be paid in advance within the first five (5) days of every current month or the beginning of the lease agreement unless the contract of lease provides for a later date of payment. The lessor cannot demand more than one (1) month advance rent. Neither can he/she demand more than two (2) months deposit which shall be kept in a bank under the lessor's account name during the entire duration of the lease agreement. Any and all interest that shall accrue therein shall be returned to the lessee at the expiration of the lease contract.

The act covered various aspects of renting a property such as the requirement of bank deposit, rental regulation, policies and much more. Just because the act has expired does not mean landlords and tenants are no longer protected. Both parties have the option to negotiate. In terms of deposits, the tenant and landlord can discuss the option that works for both of them. There are landlords that do not rely on oral contract. This is where a written contract comes in. Written contracts will require tenants a security deposit worth 2 to 3 months' rent. If the tenant does not wish to renew the contract, the deposit will be returned provided, the unpaid bills and deductions for repairs have been made. 

When it comes to the duration of contract, the landlord assumes that the contract has been renewed if the tenant stays in the unit 15 days after the contract has expired. The landlord will furnish a new copy of the contract but with a different term. However, if you are in the lower end of the market, both parties rely on oral contracts. In this case, the landlord has the right to eject a tenant if they fail to pay the rent for three months. Most landlords do not allow subleasing and a violation of which will also be a ground for ejection. If the landlord decides to use the property, the tenant will be given three months' formal notice to vacate the place. 

Problems involving landlords and tenants are usually mediated by town tribunals. Matters will be taken to court if they have not been resolved at the town level. You may also refer to the Civil Code of the Philippines to know the general guideline for the conditions of lease of urban and rural lands. The guidelines can be found in Articles 1654-1688. 

Philippine Legal Forms: Contract To Sell

A Contract to Sell refers to an agreement between a seller and a buyer. The contract shows that the seller promises to sell something to the buyer and the buyer also promises the seller the buy the property. However, the contract does not instantly transfer the right to the buyer even when this contract is signed. There are still conditions that have to be fulfilled by one or both parties before transfer of ownership can take place. The Deed of Absolute sale will only be executed once the conditions stated in the Contract to Sell have been met. 

 

CONTRACT TO SELL

KNOW ALL MEN BY THESE PRESENTS:

This Contract to Sell is made and executed and entered into by: 

Name of Seller, of legal age, Filipino, single/married to Name of the Spouse of Seller, with residence address at Postal Address of the Seller in the Phiilppines, hereinafter referred to as the SELLER;

-AND- 

       Name of Buyer, of legal age, Filipino, single/married to, Name of Spouse of Buyer and with residence and postal address at Address of the Buyer in the Phiippines, hereinafter referred to as the BUYER; 

WITNESSETH;

         WHEREAS, the SELLER is the registered owner of a parcel of land with improvements located at Address of the property for sale in the Philippines and covered by Transfer Certificate of Title No. 000000 containing a total area of LAND AREA IN SQUARE METERS (000sqm) SQUARE METERS, more or less, issued by the Registry of Deeds of City/Municipality;

WHEREAS, the BUYER has offered to buy and the SELLER has agreed to sell the above mentioned property under the terms and conditions herein below set forth;

NOW THEREFORE, for and in consideration of the total sum of THE CONTRACT PRICE FOR THE PROPERTY FOR SALE (P0,000,000.00) Philippine Currency, and of the covenants herein after set forth the SELLER  agrees to sell and the BUYER agree to buy the aforesaid property subject to the following terms and conditions:

The total consideration shall be THE CONTRACT PRICE FOR THE PROPERTY FOR SALE (P0,000,000.00) Philippine Currency, payable through CASH/MANAGERS’ CHECK/WIRE TRANSFER as follows:

1.1. The amount of THE EARNEST MONEY DEPOSIT (P000,000.00) representing earnest money deposit shall be payable upon execution of this Contract to Sell and shall be considered part of the total Contract price.

1.2. The remaining balance amounting to THE REMAINING BALANCE (P0,000,000.00) PESOS Philippine Currency, shall be payable within ­TIME FRAME upon execution of this Contract to Sell.

1.3  In case the BUYERS could not fulfil any of their obligation stated in this Contract To Sell, the earnest money shall be forfeited in favor of the SELLER.

2.    Al pending utility bills, if any, Real Estate Tax up to the time of sale, Capital Gains Tax, Documentary Stamp Tax, shall be for the account of the SELLER.

3.     Notarization fees, Registration Fee, Transfer Fees and all miscellaneous fees and expenses to transfer the certificate of title in the name of the new owner shall be for the account of the SELLER;

4.     Possession to the subject property shall be delivered by the SELLER to the BUYER upon full payment of the total consideration;

5. ADDITIONAL TERMS AND CONDITIONS SUCH AS Delivery of the property shall be given by the SELLER to the BUYER devoid of any religious artefacts, personal belongings and effects, tenants and any toxic/radioactive substances. Etc.

6. TERMS AND CONDITIONS MAY VARY ON A CASE-TO-CASE BASIS. CONTRACTING PARTIE MAY ADD, SUBTRACT, EDIT, ANY OR ALL PARTS OF THIS CONTRACT TO SELL AS THEY SEE FIT

7.    Upon full payment of the total price, the SELLER shall sign and execute a DEED OF ABSOLUTE SALE in favour of the BUYER. The SELLER shall likewise execute and/or deliver any and all documents, including but not limited to the original copy of Transfer Certificate of Title, Tax Declaration and all other documents necessary for the transfer of ownership from SELLER to the BUYER. 

8. In case the SELLER could not fulfil any of the obligations stated in this Contract to Sell, the BUYER shall be entitled to a full refund plus 10% interest per month.

 

IN WITNESS WHEREOF, the parties have hereunto affixed their signatures, this

 

_____ day of _______________________ 20________ at ___________________________________, Philippines.

 

___________________________________                                       ___________________________________

 

Printed Name and Signature of SELLER                                          Printed Name and Signature of BUYER

 

SIGNED IN THE PRESENCE OF:

 ___________________________________                                       ______________________________________

 

Printed Name and Signature of 1st Witness                                                Printed Name and Signature of 2nd Witness

 

 ACKNOWLEDGMENT

 

REPUBLIC OF THE PHILIPPINES)

_____________________________ )  SS.

BEFORE ME, a Notary Public for and in ________________________________________________________  personally appeared:

 

Name                                       ID  Number                                         Date/Place Issued

 

Known to me and to me known to be the same persons who executed the foregoing instrument and acknowledged to me that the same are their free act and voluntary deed.

 

This instrument, consisting of 2 pages, including the page on which this acknowledgment is written, has been signed on the left margin of each and every page thereof by the concerned parties and their witnesses, and sealed with my notarial seal.

 

WITNESS  MY HAND AND SEAL on this ______day of _______________________________20__________ at_____________________________.

 

Notary Public

  

Doc. No. ……..;

Page No. …….;

Book No. …….;

Series of 20____.

Philippine Legal Forms: Deed of Absolute Sale

A real estate purchase will not be complete without the deed of absolute sale. This legal form transfers property to one party including property rights. The deed serves as a proof that the transfer occurred. Once you have signed the documents, it means you have fully understood that all rights to the property will be transferred from the seller to the buyer. 

It is also important to note that the deed of absolute sale should have no stipulated conditions attached other than the buyer's payment. 

You need to have an independent surveyor or judge that will determine the property's current market value to prevent over-paying. You will also have to make sure that the document is legally binding and should vividly describe the property that will be transferred. A sample of deed of absolute sale is provided below:

DEED OF ABSOLUTE SALE 

KNOW ALL MEN BY THESE PRESENTS:

This DEED OF ABSOLUTE SALE is made, executed and entered into by:

        (NAME OF SELLER), of legal age, single/married to (Name of spouse if any), Filipino, and with residence and postal address at (Address of Seller), hereinafter referred to as the SELLER

-AND- 

       (NAME OF BUYER), Filipino and with residence and postal address at (Address of Buyer), hereinafter referred to as the BUYER.

WITNESSETH; 

       WHEREAS, the SELLER is the registered owner of a parcel of land with improvements located at (Address of property to be sold) and covered by Transfer Certificate of Title No. (TCT Number) containing a total area of (Land Area of Property in Words) (000) SQUARE METERS, more or less, and more particularly described as follows:

TRANSFER CERTIFICATE OF TITLE NO. 0000

       "(Insert the  technical description of the property on the title) Example: A PARCEL OF LAND (Lot 20 Blk 54 of consolidation subdivision plan (LRC) Pcs-13265, being a portion of the consolidation of Lots 4751-A and 4751-B (LRC) Psd-50533,  Lot 3, Psd-100703, Lot 1, Psd-150980, LRC Rec. Nos. Nos. N-27024, 51768, 89632, N-11782, N-13466, and 21071 situated in the Bo. of San Donisio, Mun of Paranaque,  Prov of Rizal, Is. of Luzon. Bounded on NE., point 4 to 1 by Road Lot 22, on...to the point of beginning; containing an area of (280) square meters more or less..."

       WHEREAS, the BUYER has offered to buy and the SELLER has agreed to sell the above mentioned property for the amount of (Amount in words) (P 000,000.00) Philippine Currency;

       NOW THEREFORE, for and in consideration of the sum of (Amount in words) (P 000,000.00) Philippine Currency, hand paid by the vendee to the vendor, the SELLER DO HEREBY SELL, TRANSFER, and CONVEY by way of Absolute Sale unto the said BUYER, his heirs and assigns, the certain parcel of land together with all the improvements found thereon, free from all liens and encumbrances of whatever nature including real estate taxes as of the date of this sale.

 (NAME OF SELLER)                       (NAME OF BUYER)

          Seller                                        Buyer  

WITH MARITAL CONSENT:

________________________             _________________________

 Name of Seller's Spouse                      Name of Buyer's Spouse

  

SIGNED IN THE PRESENCE OF:

 

__________________________               ____________________________

 

ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES)

_____________________________ )  SS.

 

BEFORE ME, a Notary Public for and in the City of ___________________,  personally appeared:

 

Name                           CTC Number               Date/Place Issued   

 

(Name of Seller)                      10000000             Jan 15, 20__ / Angeles City

(Name of Buyer)                      10000000             Jan 9, 20__ / Manila          

 

Known to me and to me known to be the same persons who executed the foregoing instrument and acknowledged to me that the same are their free act and voluntary deed.

This instrument, consisting of (__) pages, including the page on which this acknowledgment is written, has been signed on the left margin of each and every page thereof by the concerned parties and their witnesses, and sealed with my notarial seal.

WITNESS  MY HAND AND SEAL on this ___day of __________________20__ at_______________.

Notary Public

Doc. No. ........;

Page No. .......;

Book No. .......;

Series of 20__.

The Rule For Dividing The Inheritance

Partition or distribution of the estate is an issue to the surviving spouse and children when the deceased father failed to leave any Will that will determine who gets what. The plot even thickens when the property is going to be divided among half siblings. It is a challenge for all parties to come to an agreement, which involves the proposed partition as there are various things that must be taken into consideration. This is where intestate succession comes into play. 

SECTION 2. – Order of Intestate Succession

SUBSECTION 1. – Descending Direct Line

Art. 978. Succession pertains, in the first place, to the descending direct line. (930)

Art. 979. Legitimate children and their descendants succeed the parents and other ascendants, without distinction as to sex or age, and even if they should come from different marriages.

An adopted child succeeds to the property of the adopting parents in the same manner as a legitimate child. (931a)

Art. 980. The children of the deceased shall always inherit from him in their own right, dividing the inheritance in equal shares. (932)

Art. 981. Should children of the deceased and descendants of other children who are dead, survive, the former shall inherit in their own right, and the latter by right of representation. (934a)

Art. 982. The grandchildren and other descendants shall inherit by right of representation, and if any one of them should have died, leaving several heirs, the portion pertaining to him shall be divided among the latter in equal portions. (933)

Art. 983. If illegitimate children survive with legitimate children, the shares of the former shall be in the proportions prescribed by Article 895. (n)

Art. 984. In case of the death of an adopted child, leaving no children or descendants, his parents and relatives by consanguinity and not by adoption, shall be his legal heirs. (n)

SUBSECTION 4. – Surviving Spouse

Art. 995. In the absence of legitimate descendants and ascendants, and illegitimate children and their descendants, whether legitimate or illegitimate, the surviving spouse shall inherit the entire estate, without prejudice to the rights of brothers and sisters, nephews and nieces, should there be any, under article 1001. (946a)

Art. 996. If a widow or widower and legitimate children or descendants are left, the surviving spouse has in the succession the same share as that of each of the children. (834a)

Art. 997. When the widow or widower survives with legitimate parents or ascendants, the surviving spouse shall be entitled to one-half of the estate, and the legitimate parents or ascendants to the other half. (836a)

Art. 998. If a widow or widower survives with illegitimate children, such widow or widower shall be entitled to one-half of the inheritance, and the illegitimate children or their descendants, whether legitimate or illegitimate, to the other half. (n)

Art. 999. When the widow or widower survives with legitimate children or their descendants and illegitimate children or their descendants, whether legitimate or illegitimate, such widow or widower shall be entitled to the same share as that of a legitimate child. (n)

Art. 1000. If legitimate ascendants, the surviving spouse, and illegitimate children are left, the ascendants shall be entitled to one-half of the inheritance, and the other half shall be divided between the surviving spouse and the illegitimate children so that such widow or widower shall have one-fourth of the estate, and the illegitimate children the other fourth. (841a)

Art. 1001. Should brothers and sisters or their children survive with the widow or widower, the latter shall be entitled to one-half of the inheritance and the brothers and sisters or their children to the other half. (953, 837a)

Art. 1002. In case of a legal separation, if the surviving spouse gave cause for the separation, he or she shall not have any of the rights granted in the preceding articles. (n)

What Are The Different Modes Of Acquiring Ownership?

Property ownership and rights can be acquired by intestate succession, by donation, by law, by estate and even by tradition. If ownership and other real rights have been acquired through occupation, intellectual creation and prescription, it means that such an ownership is original. On the other hand, if ownership has been acquired by law, by donation, by intestate succession and by other consequences such as tradition, the ownership will be considered derivative. 

Original ownership means that the ownership has been created for the first time of an individual who does not have predecessor with respect to the title. Derivative ownership refers to the ownership where the property is transferred from one person to another. 

SECTION 1. – General Provisions

Art. 960. Legal or intestate succession takes place:

(1) If a person dies without a will, or with a void will, or one which has subsequently lost its validity;

(2) When the will does not institute an heir to, or dispose of all the property belonging to the testator. In such case, legal succession shall take place only with respect to the property of which the testator has not disposed;

(3) If the suspensive condition attached to the institution of heir does not happen or is not fulfilled, or if the heir dies before the testator, or repudiates the inheritance, there being no substitution, and no right of accretion takes place;

(4) When the heir instituted is incapable of succeeding, except in cases provided in this Code. (912a)

Art. 961. In default of testamentary heirs, the law vests the inheritance, in accordance with the rules hereinafter set forth, in the legitimate and illegitimate relatives of the deceased, in the surviving spouse, and in the State. (913a)

Art. 962. In every inheritance, the relative nearest in degree excludes the more distant ones, saving the right of representation when it properly takes place.

Relatives in the same degree shall inherit in equal shares, subject to the provisions of article 1006 with respect to relatives of the full and half blood, and of Article 987, paragraph 2, concerning division between the paternal and maternal lines. (912a)

SUBSECTION 1. – Relationship

Art. 963. Proximity of relationship is determined by the number of generations. Each generation forms a degree. (915)

Art. 964. A series of degrees forms a line, which may be either direct or collateral.

A direct line is that constituted by the series of degrees among ascendants and descendants.

A collateral line is that constituted by the series of degrees among persons who are not ascendants and descendants, but who come from a common ancestor. (916a)

SUBSECTION 2. – Right of Representation

Art. 970. Representation is a right created by fiction of law, by virtue of which the representative is raised to the place and the degree of the person represented, and acquires the rights which the latter would have if he were living or if he could have inherited. (942a)

SECTION 2. – Order of Intestate Succession

SUBSECTION 1. – Descending Direct Line

Art. 978. Succession pertains, in the first place, to the descending direct line. (930)

Art. 979. Legitimate children and their descendants succeed the parents and other ascendants, without distinction as to sex or age, and even if they should come from different marriages.

An adopted child succeeds to the property of the adopting parents in the same manner as a legitimate child. (931a)

SUBSECTION 2. – Ascending Direct Line

Art. 985. In default of legitimate children and descendants of the deceased, his parents and ascendants shall inherit from him, to the exclusion of collateral relatives. (935a)

Art. 986. The father and mother, if living, shall inherit in equal shares.

Should one only of them survive, he or she shall succeed to the entire estate of the child. (936)

SUBSECTION 3. – Illegitimate Children

Art. 988. In the absence of legitimate descendants or ascendants, the illegitimate children shall succeed to the entire estate of the deceased. (939a)

Art. 989. If, together with illegitimate children, there should survive descendants of another illegitimate child who is dead, the former shall succeed in their own right and the latter by right of representation. (940a)

SUBSECTION 4. – Surviving Spouse

Art. 995. In the absence of legitimate descendants and ascendants, and illegitimate children and their descendants, whether legitimate or illegitimate, the surviving spouse shall inherit the entire estate, without prejudice to the rights of brothers and sisters, nephews and nieces, should there be any, under article 1001. (946a)

SUBSECTION 5. – Collateral Relatives

Art. 1003. If there are no descendants, ascendants, illegitimate children, or a surviving spouse, the collateral relatives shall succeed to the entire estate of the deceased in accordance with the following articles. (946a)

SUBSECTION 6. – The State

Art. 1011. In default of persons entitled to succeed in accordance with the provisions of the preceding Sections, the State shall inherit the whole estate. (956a)

Art. 1012. In order that the State may take possession of the property mentioned in the preceding article, the pertinent provisions of the Rules of Court must be observed. (958a)

Building Permit Required For Constructing A House

For the construction of a house to run smoothly, it is important to follow the requirements according to the National Building Code. This means you need to make sure that proper electrical, technical and structural plans are met to avoid future problems that may deter you from pushing through with the construction process. Once officials find out that you failed to secure a permit prior to building your house, the construction will be stopped until you have secured your permit. 

1. When securing a building permit, you need start with preparing your requirements. You will also need to get a Requirements-Checklist and application forms. These can be secured your municipal's office. Your engineers and architects will fill out the forms. 

2. Once done, you need to submit the papers to the Office of the Building Official. They will instruct you to go to the Assessor's Office. You will need to submit each folder of each set of forms. Once your application is approved, you will be provided with an Order of Payment. The next step is to make a payment of the permit fees. 

3. The fees may vary depending on the size of the construction, the municipality location and even the assessment plan. More often than not, the fees in the provinces are much cheaper than in the cities. 

4. You will also need to have the Official Receipt photocopied and bring a copy to the releasing section of the Office of the Building Official. 

5. You will need to wait for 5 working days to claim your building permit from the Office of the Building Official.   

SECTION 1.02.03: Building permits  

(a) Any person, firm, or corporation, including any department, office, bureau, agency of instrumentality of the government intending to construct, alter, repair, move, convert or demolish any building or structure, or cause the same to be done, shall obtain a building permit from the Building Official for whichever of such work is proposed to be undertaken for the building or structure, before any such work is started. 

(b) Appropriate rules and regulations shall be set by the Secretary concerning: 

(1) Forms for application for building permits; 

(2) Procedures to be observed in securing such permits; 

(3) Procedures to be observed in the issuance, suspension, and revocation of such building permits; and 

(4) Type, nature, and scope of plans and specifications, and other requisite documents, which shall be prepared and designed by a licensed architect or engineer.   

(c) When authorized by the Building Official in accordance with the provisions of this Code, plans and specifications need not be submitted for the following:   

(1) Group A traditional indigenous type of dwelling construction costing not more than three thousand pesos (P3,000.00); and 

(2) Group J Division 1 Occupancy of Type 1 conventional wood frame construction or of the traditional indigenous type of construction costing not more than three thousand pesos (P3,000.00).  

(d) The applicant for a building permit for private buildings or structures after having complied with all the requirements prescribed therefor in accordance with the provisions of this Code, shall be issued a building permit within fifteen (15) days from the date of payment of the permit fee for Groups A and J Occupancies and within thirty (30) days from the date of payment of the permit fee for other Group Occupancies, unless the Building Official or his Deputy authorized to issue the permit shall inform the applicant in writing why the permit should not be issued, and shall indicate thereon the particular provisions of the Code violated by the applicant or the particular requirements not complied with. Within fifteen (15) days from the date of receipt by the applicant of advice from the Building Official or his Deputy authorized to issue the permit why the building permit should not be issued, or why the building permit is suspended or revoked, the applicant may appeal the non-issuance, suspension, or revocation thereof, to the Mayor of the chartered city or municipality, or the Governor of the province where the building or structure for which the permit is being applied for is located. Said appeal shall be decided within fifteen (15) days from receipt thereof, otherwise, the applicant may bring the matter to the proper Court of Justice for final disposition.   

(e) All public buildings shall conform to the provisions of this Code and the Building Official of the city or province where the public building is located shall issue the building permit therefor, stating in writing that such public building conforms to the requirements of the Code. For national public buildings, the Secretary of Public Works and Communications shall issue a certification that such a building conforms to the Code. Public buildings shall be exempt from payment of building permit, inspection, another fees. 

Double Sale: Selling The Property To Two Or More Buyers

Purchasing a land is a wise investment if the transaction is smooth and hassle-free. What if your hard-earned money went down the drain upon discovering that the parcel of land you have purchased was also sold to another buyer? It even gets more complicated as you are no longer allowed to transfer the title of the property in your name because the other buyer already did so. What are the legal implications of these circumstances? It is clear that the property was sold to two buyers with different interests, hence there is a double sale. Article 1544 of the Civil Code states that:

If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith was first in possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.

In case of double sale the person who will be considered as the owner of the property will be based on the order of priority:

  1. the first person to register the sale in good faith;

  2. the first possessor in good faith;

  3. the buyer who in good faith presents the oldest title.

There can be cases when you are the first possessor of the property, but the other claimant was the first registrant. While it may appear that the other claimant is the rightful owner of the property, you should take a few factors into consideration. As part of the aforementioned conditions, the person who registers the sale in good faith will be deemed as the property owner. In the event that the other claimant purchased the property even when he/she had full knowledge that it was previously sold to another buyer, the first buyer will be entitled to prove that he/she has a better right to own the property.

If the other claimant who has already registered the property proved that he/she is a registrant in good faith, then he/she has a better right to the property according to Article 1544 of the Civil Code. The seller has legal liability, which gives you the authority to file chargers and demand contract rescission with damages.

Can A Contract Be Considered Invalid Without Notarization?

If you have made a purchase of a parcel of land and found out that the contract has not been notarized, can the contract be considered invalid? The notarization of a contract is not required to prove its validity. As stated in Article 1356 of the Civil Code, contracts are deemed obligatory and it should meet the essential requisites that will prove its validity.

Art. 1356. Contracts shall be obligatory, in whatever form they may have been entered into, provided all the essential requisites for their validity are present. However, when the law requires that a contract be in some form in order that it may be valid or enforceable, or that a contract be proved in a certain way, that requirement is absolute and indispensable. In such cases, the right of the parties stated in the following article cannot be exercised.

It has also been specified under Article 1318 that notarization is not one of the requirements for preparing a contract.

Art. 1318. There is no contract unless the following requisites concur:

    (1) Consent of the contracting parties;

    (2) Object certain which is the subject matter of the contract;

    (3) Cause of the obligation which is established.

However, the notarization converts a contract into a public document. While it is not required, it is suggested that contracts involving land must be notarized as specified under Article 1358 of the Civil Code.

Art. 1358. The following must appear in a public document:

(1) 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 a governed by Articles 1403, No. 2, and 1405;

(2) The cession, repudiation or renunciation of hereditary rights or of those of the conjugal partnership of gains;

(3) The power to administer property, or any other power which has for its object an act appearing or which should appear in a public document, or should prejudice a third person;

(4) The cession of actions or rights proceeding from an act appearing in a public document.

If you will undergo the registration process, the deed of sale should be notarized according to Section 112 of the Property Registration Decree.

Section 112. Forms in conveyancing. The Commissioner of Land Registration shall prepare convenient blank forms as may be necessary to help facilitate the proceedings in land registration and shall take charge of the printing of land title forms.

Deeds, conveyances, encumbrances, discharges, powers of attorney and other voluntary instruments, whether affecting registered or unregistered land, executed in accordance with law in the form of public instruments shall be registerable: Provided, that, every such instrument shall be signed by the person or persons executing the same in the presence of at least two witnesses who shall likewise sign thereon, and shall acknowledged to be the free act and deed of the person or persons executing the same before a notary public or other public officer authorized by law to take acknowledgment. Where the instrument so acknowledged consists of two or more pages including the page whereon acknowledgment is written, each page of the copy which is to be registered in the office of the Register of Deeds, or if registration is not contemplated, each page of the copy to be kept by the notary public, except the page where the signatures already appear at the foot of the instrument, shall be signed on the left margin thereof by the person or persons executing the instrument and their witnesses, and all the ages sealed with the notarial seal, and this fact as well as the number of pages shall be stated in the acknowledgment. Where the instrument acknowledged relates to a sale, transfer, mortgage or encumbrance of two or more parcels of land, the number thereof shall likewise be set forth in said acknowledgment.



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