1. Collado vs. Dr. Dela Vega,
G.R. No. 219511. December
02, 2020
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2. Municipality Of Corella v.
Philkonstrak Development
Corporation, G.R. No. 218663,
February 28, 2022
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3. Dumaral v Llanedo, GR
217583, Aug. 4, 2021
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4. DBP v Danico, GR 196476,
Sept. 28, 2020
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5. Heirs of Kim vs. Quicho, G.R.
No. 249247. March 15, 2021
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Acquittal will not bar Civil action when
1) acquittal is based on guilt not being proven
beyond reasonable doubt
2) court declares that the liability is civil
3) that the civil liability did not arise from the
criminal act (a different source of obligation)
The acquittal of Victoria was only based on guilt
not being proven beyond reasonable doubt,
therefore, there was ample evidence to support
here civil liability.
The contract between Corella and Philkonstrakt
was void. Citing Verceles v COA, Local Chief
Executive must secure prior authorization from
the sanggunian before contracts can be entered
with the LGU. An affirmative vote by all of the
members of the Sanggunian is also required. In
this case, the affirmative vote was not secured,
hence the contract was void.
Philkonstrakt established its right to be
compensated on the basis of Quantum Meriut.
Recovery is therefore allowed despite the
contract being void.
Quantum meriut literally means as much as he
deserves, it means a person may recover a
reasonable value of the thing he delivered or the
service he rendered.
Non-payment of a debt or non-performance
does not automatically equate to a fraudulent
act.
Being a state of mind, fraud cannot simply be
inferred from bare allegation of nonperformance
Payment of monetary interest is only allowed if
1) Express stipulation of the interest, and;
2) Agreement was reduced into writing
The deed of sale involved in the case did not
indicate that DBP already assumed the
obligations of Danico.
The deed of sale merely indicated that DBP
intended to purchase the subject lots of
Spouses Danico which happened to be
mortgaged to DBP. Therefore, they are only
liable for the price of the sale.
The Deed of sale also did not indicate any
stipulation as to the monetary interest.
Collection of interest without any stipulation is
prohibited by the law, the interest in the loans
incurred by Spouses Danico cannot be applied
to NPC because it was not a party to the
contract.
Petitioners can retain the amounts paid despite
rescission under Art. 1191.
A reciprocal obligation is one which arises from
the same cause, each party are debtors and
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6. Oreta-Ferrer vs. Right Eight
Security Agency, Inc., G.R.
No. 223635. June 14, 2021
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7. PNB v Bal, GR 207856, Nov.
18 2020
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8. Atienza v Golden Ram, GR
205405, Jun2 28, 2021
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creditors of each other. The prestations are to
be performed simultaneously because the
performance of one is dependent to the
performance of another.
Rescission of Obligations under Art. 1191 is
declaration that the contract is void at inception.
Mutual Restitution is required under rescission.
However, despite the repeal of the contract, it
does not disregard the consequences the
contract created.
Rescission does not negate the penal clause. It
does not abrogate the stipulated damages
General Rule: Rescission under Art. 1191
results in mutual restitution
Except:
1) Express stipulation to the contrary
2) Where partial payment may be retained as
payment for rentals
In action for breach of contract, the plaintiff has
the burden of proving the breach. Plaintiff must
first prove the existence of the contract and the
non-performance of the obligation either due to
fraud, negligence or delay.
Once in breach, presumption of negligence
arises.
The respondent was not negligent in this case,
Security guard limited the search to a visual
search as based from the contract from which
he was hired.
Negligence is a relative concept. The law
considers negligence as reckless, blameworthy
for a man of ordinary intelligence or prudence
While damage was sustained by the
complaining party, there was no injury, damnum
absque injuria applies.
Solidarity is never presumed. There is solidarity
when the law expressly provides or the nature
of the obligation requires the same. Both are
absent in this case.
Bal is not personally and solidarily liable with
Tan because it does not fall in the
circumstances where the obligation of the
obligor is solidary.
It is only Tan whom the bank must pursue and
Tan already acknowledged his indebtedness to
the bank
Solidary liability cannot be lightly inferred. There
is solidarity only when the law expressly
provides for the same or when the nature of the
obligation requires solidarity or when the
obligation so states
Directors or officers of a corporation is solidarily
liable with the corporation only when
1) Complainant specifically alleged that the
director or officer assented to the patently
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9. Asian Construction v Mero
Structures, GR 221147. Sept.
29, 2021 (NOVATION)
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10. Valdes v La Colina, GR
208140, July 12, 2021
(NOVATION)
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unlawful acts or the officer is guilty of negligence
or bad faith, and;
2) Complainant must prove the unlawful acts or
negligence and bad faith with clear and
convincing evidence.
Atienza established with sufficient and specific
evidence that Bartolome had acted in bad faith
or gross negligence in the sale of the defective
vessel engine.
Novation extinguishes an obligation between
two parties when there is substitution of the
object, the debtors or the subrogation of the
creditors.
It only takes place when the new contract
expressly declares in unequivocal terms that the
old contract is novated (Express Novation) or
that the old and new obligations are
incompatible with each other on all points
(Implied Novation). Neither express nor implied
novation are present in this case.
Circumstances why there was no novation in
this case
1) Nothing in the letters state that the obligation
of the Asiakonstrukt to pay MERO was
extinguished
2) No mention that MERO would subrogate
Asiakonstrukt as FCCCs payee. MERO was
merely allowed to collect directly from FCCC
3) Using test of Incompatibility, the obligation
of Asiakonstrukt to MERO was not incompatible
with MERO being allowed to collect directly from
FCCC. The terms merely allowed an alternative
mode of payment by Asiakonstrukt to MERO
which is not even valid because FCCC’s
consent was not obtained.
The Contract is a Contract of Sale.
The contract in this case partakes the nature of
a contract of sale and not one of a joint venture.
Cardinal rule in interpretation of contracts is that
when the terms of the contract is clear, literal
meaning should be applied (Art. 1370), it is the
contract the parties actually entered into and not
the one they intended which should govern. No
room for interpretation in this case that they
executed a Contract of Sale.
All the elements of a valid contract of sale are
present in this case:
1) consent or meeting of the minds, consent to
the transfer of ownership in exchange for the
price
2) determinate subject matter
3) price certain in money or its equivalent. The
4000 shares of stock of Valdeses in BARECO
were sold to LCDC for 20 M. It was not a joint
venture agreement.
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11. Bendecio vs. Bautista, G.R.
No. 242087. December 07,
2021
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12. Henson v UCPB, GR 223134,
August 14, 2019 (en banc)
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Novation is present
For a valid novation to take place, the four
requisites are:
1) Previous valid obligation
2) Agreement of all the parties to the new
contract
3) Extinguishment of the old contract
4) Creation of a new Contract
The new concept in the obligation of LCDC to
construct a golf course is incompatible with the
original obligation of LCDC which is to remit to
the Valdeses 40% of the proceeds from the sale
of the lots. Test of Incompatibility
Since the Valdeses can be considered as the
creditors in this case, their consent is required
with respect to the novation. Their consent was
manifested by their agent, Gabriel who entered
his consent and conformity to the novation. The
original obligation of LCDC was already
extinguished by Novation.
Rescission under Art. 1380
Rescission is a remedy granted by law to
contracting parties and even to third persons to
secure reparation for damages caused by a
contract which is valid although it has caused
pecuniary damage to one of the contracting
parties or their creditors. Mutual Restitution
must follow rescission.
Kinds of Rescissible contracts are:
1) rescissible because of lesion or prejudice
(economic damage)
2) rescissible because of fraud
3) rescissible by special provisions of the law
None of the circumstances are attendant in this
case, Valdez cannot claim economic damage
because while they can no longer get the 40%
proceeds from the sale of the subject lot, they
however have interest in the new Montemar
project.
Expromission
and
Delegacion
was
differentiated
The mere fact that Bautista (Creditor) accepted
Mascariñas' (third person) note does not
automatically result in novation in the absence
of an express agreement to release Bendecio
(Debtor) from liability. Neither was there any
proof of payment (mere delivery of checks does
not produce payment) herein. Since there was
neither novation nor payment, case law dictates
that Bautista may still proceed to collect from
Bendecio, the original debtor of the loan
agreement
Subrogation issue whereby the subrogeeinsurer merely steps on the shoes of the
insured, hence may only file the claim against
13. BDO v Ypil, GR 212024, Oct.
12, 2020 (LEGAL
COMPENSATION)
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14. Estate Of Susano J.
Rodriguez V. Republic Of The
Philippines G.R. No. 214590,
April 27, 2022
(PRESCRIPTION OF
ACTIONS IN CONTRACTS)
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15. IP E-Gan Ventures v Tan, GR
2939576, June 30, 2021
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the tortfeasor with respect to the remaining
period by which the insured may file an action
against the torfeasor
Compensation is mode of extinguishing to the
concurrent amount the debts of persons who
are debtors and creditors of each other.
The law provides five requisites for legal
compensation
1) That the parties are principal debtors and
creditors of each other
2) That both obligations include sum of money
or that if the things due are consumable, that
they be of the same kind and quality
3) The debts are due
4) The debts are liquidated and demandable
5) That over neither of them there be any
retention or controversy commenced by third
persons and communicated in due time to the
debtor
The effects of legal compensation apply
regardless of whether the contracting parties
are aware of the same.
There is no legal compensation in this case
because the bank failed to specify when CSTC
actually defaulted on its obligations. The date of
the default was not disclosed, proven by
preponderant proof.
Because the date of default was not
specified, the element that the debts must be
liquidated cannot be established. A debt is
liquidated if its amount is fixed at the time of
payment. Because there is no specific date
of default, it necessarily follows that there is
no date from which the interests can be
computed, hence it remains unliquidated and
legal compensation could not apply.
All actions upon a written contract must be
brought within a period of ten (10) years from
accrual of the right of action.
The estate’s complaint filed in 2007 was well
within the prescriptive period which is 10 years
from the lapse within which the government
could have filed a motion for the revival of
judgement in 2005.
The government breached its obligation
because it failed to file the motion for revival of
judgement upon its expiration in 2005. The
estate had 10 years from 2005 to file the action
to revoke the donation because in contracts, all
actions must be brought within 10 years from
the accrual of the right of action.
Whenever a period is fixed pursuant thereto, the
Court does not amend or modify the obligation
concerned, but merely enforces or carries out
the stipulations in the contract in question."
16. The Heirs Of Godines Vs.
Demaymay, G.R. No. 230573,
June
28, 2021 (UNENFORCEABLE
CONTRACT OF SALE)
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17. Home Guaranty v Manalapaz,
GR 202820, Jan. 13, 2021
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Additionally, given that there was no proof that
the parties entered into a subsequent
agreement on a different date, the phrase "on
such other date that the parties may reasonably
agree" is neither controlling nor applicable in the
case at bench.
Definition of a Contract – A contract is a meeting
of the minds between two persons whereby one
binds himself to give something, or to render
service to another.
A contract is obligatory in whatever form they
are made except if the law requires that the
contract must be in some form in order for the
contract to be valid (Formal Contracts) or
enforceable (Statute of Frauds) or that a
contract be proved in a certain way, in these
cases, the form of the contract is indispensable
and absolute.
In this case, there was an Oral Contract of Sale
of a Real Property. Two relevant provisions may
be cited
1) Art. 1358 covers contracts which must be
embodied in a Public Instrument for the purpose
of public convenience (i.e. An contract creating,
transmitting or modifying real rights over real
property or sales of real property)
2) Art. 1403 which enumerates the contracts
that are covered by Statute of Frauds (i.e. Art.
1403(2), a Sale of a Real Property or any
Interest therein).
The failure to reduce the contract into writing
renders it unenforceable before the courts of
law.
Despite being an unenforceable contract, the
rule on Statute of Frauds is subject to
limitations. One such limitation are contracts
that are already executed or partially executed.
Statute of Frauds does not apply in this case
because there was already a partial
performance of the obligation, namely, there
was already an initial payment as well as
payment of balance. The predecessors of the
petitioners were likewise in occupation of the
property for a period of 15 years. The contract
is no longer unenforceable and the verbal/oral
contract of sale was binding between the parties
and their predecessors in interest.
Manlapaz was not privy to the contracts
(Memorandum of Agreement and 3rd contract)
which VELI, FLPPI and HGC entered into as
she only dealt with FLPPI, which did not apprise
her of the subsequent contracts involving VELI
and HGC. According to Article 1311 of the Civil
Code:
18. Rico v Union Bank, GR
201928, Feb. 14, 2022
(DAMNUM ABSQUE INJURIA
– CREDIT CARD
TRANSACTIONS)
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Article 1311. Contracts take effect only between
the parties, their assigns and heirs, except in
case where the rights and obligations arising
from the contract are not transmissible by their
nature, or by stipulation or by provision of law.
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Jurisprudence teaches that "the parties to a
contract are the real parties-in-interest in an
action upon it." As such, "[t]he basic principle of
relativity of contracts is that contracts can only
bind the parties who entered into it, and cannot
favor or prejudice a third person, even if he is
aware of such contract and has acted with
knowledge thereof'.
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Indeed, "'[w]here there is no privity of contract,
there is likewise no obligation or liability to speak
about."
Damnum absque injuria is again applied, there
can be damage without injury as when the loss
or harm was not the result of a violation of a
legal duty.
Rico’s cancellation of tickets in the Airlines and
refusal to settle his liabilities with Union Bank is
the proximate cause of the subsequent
humiliation he experienced when his credit card
was disapproved while purchasing in the
afformentioned restaurant.
The three contracts created by a Credit card
transaction was explained, namely:
1) sale between the credit card holder and the
merchant
2) loan agreement between the credit card
issuer and the credit card holder
3) promise to pay between the credit card issuer
and the merchant
There was a creditor-debtor relationship
between Rico and Union Bank, Union Bank as
the creditor had the right to demand the
payment for the airline tickets by Rico but the
latter did not settle the account. Union Bank is
therefore not negligent when it automatically
revoked Rico’s account.
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19. Banico vs. Stager, G.R. No.
232825. September 16, 2020
20. Bacala v Polino, GR 200608,
Feb. 10, 2021
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Gross inadequacy of Price does not invalidate a
contract of sale. Rule on evidence were applied
in favor of the validity of the contract, namely:
1) A contract is supported by an existing and
lawful cause or consideration; and
2) Notarized documents are public documents
which does not require further proof of their
authenticity and due execution
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21. Integrated Micro Electronics,
Inc. vs. Standard Insurance
Co., Inc., G.R. No. 210302.
August 27, 2020
22. Alferez vs. Spouses Canencia,
G.R. No. 244542. June 28,
2021
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23. Privatization And Management
Office vs. Nocom, G.R. No.
250477. November 09, 2020
There was no preponderant evidence to show
that the price was inexistent or grossly
inadequate
Sale and Not a Donation
The contract is a Contract of Sale and not of
donation. Gross inadequacy or simulation of
price does not invalidate the sale, although it
may be considered as one of donation rather
than one of sale.
Nevertheless, not all of the requisites for a valid
donation were present in this case. There was
no animus donandi.
It was a valid contract of sale because all the
requisites necessary for a valid contract of sale
was present, however it was subject to a
resolutory condition, namely, reservation of the
right of usufruct and the obligation to give
support, the non-fulfillment of these stipulations
render the contract as ineffective, hence, a
Resolutory Condition.
“Complementary
Contracts
Construed
together” Doctrine and Equity
The court refrained from applying the doctrine
because the Stipulations of the Contract were
clear and that is Anecito shall sell the property
to Juan for a price of 15,000 pesos, there can
be no resort to equity nor application of
constructions when they are contrary to the
express terms of the contract.
The contract is the law between the contracting
parties. Obligations have the force of law and
contracting parties must perform such
obligations and should be complied with in good
faith
Courts cannot stipulate for the parties for to do
so would alter the real intention between them.
Art. 1370 is clear, when the provisions of the
contract are clear, the literal meaning of its
stipulations shall control.
The contract in this case is one of Sale without
reservation of ownership by the seller. Parole
Evidence Rule was similarly discussed and
none of the exceptions under the rule would
justify introduction into evidence of evidence
other than the written agreement from such
contract
was
reduced.
24. Spouses Padilla Vs. Catungal,
G.R. No. 211687, February
10, 2021
25. Spouses Genotiva v
Equitable, GR 213796, June
28, 2021
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When one of the contracting parties is illiterate
or is unable to read AND fraud is alleged, a
presumption arises that the consent of such
person was obtained through fraud or mistake.
 Rebutting the presumption requires that a party
must have explained the terms of the contract to
the illiterate person by clear and convincing
evidence. The party who seeks to enforce the
contract has the burden of proving that the other
party, the one who is unable to read, understood
the terms of the contract.
 Fausta was able to establish by preponderant
evidence that she was illiterate at the time that
the contract was made. Therefore, the
disputable presumption that there was fraud or
mistake in securing her consent arose.
 The burden of evidence was on the part of the
De Vera’s to show that they were able to explain
the terms of the agreement to Fausta, they
failed to prove the same. Fausta’s consent to
the Deed was vitiated.
 Presumption of regularity cannot apply because
the regularity of the proceedings itself was being
challenged.
Duress or Intimidation
 Duress or intimidation is present when a party is
compelled by reason of a well-grounded fear of
an evil to himself or to his property, or upon his
spouse, ascendants, descendants in order for
him to give his consent.
 The requisites for Intimidation are:
1) intimidation was the determining cause for
the perfection of the contract;
2) threatened act must be unjust or unlawful;
3) the threat is real and serious, and there is
evident disproportion between the evil and the
resistance which a person can offer, the
contract is the lesser evil;
4) produces well-grounded and reasonable fear
because the person to whom the intimidation
came has the means to inflict the threatened
injury
 There was no intimidation in this case because
BDO’s refusal to release the benefits were not
an unjust or an unlawful act. BDO only refused
to release the retirement benefits because the
Violet still had an existing liability in the bank,
having executed a surety agreement in favor of
the bank.
Undue Influence
 Undue influence is present when a person takes
advantage of his power over the will of the other
person. Depriving such person of a reasonable
freedom of choice.
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The test is whether the influence exerted has so
overpowered the mind of the contracting party
as to destroy their free agency and make them
express the will of the other party.
 There was no such degree of influence exerted
by BDO against Spouses Genotiva. Despite
desperation to secure the benefits of violet, the
spouses were not deprived of their agency in
executing the contract.
 The spouses had a choice not to execute the
mortgage in exchange of the release of benefits
and could have resorted to other judicial means.
Similarly BDO cannot be faulted for having
accepted the offer of the mortgage as it is a
reasonable offer.
BDO could not unilaterally offset the obligations
of Goldland to the account the Spouses
 While there was no issue as to the liability of
petitioners to the bank, given that they are
sureties of Goldland, the bank could not
unilaterally offset the obligations to the account
of the petitioner spouses.
 The bank should have proceeded to the courts,
otherwise, it would be a violation of the right to
due process by the petitioners.
 The bank could not offset by conventional
compensation because the consent of the
petitioners were never secured.
 Legal compensation similarly could not apply
because the spouses are not principally bound
to the bank, they being merely sureties of the
contract.
26. Alba vs. Arollado, G.R. No.
237140. October 05, 2020
27. Purisima v Purisima, GR
200484, Nov. 18, 2020
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Statute of Frauds
The rule on statute of frauds only applies to
executory contracts and do not find any
application to contracts that are already
consummated.
While a verbal contract of sale of real property
is unenforceable unless ratified, an alleged oral
contract of a consummated sale of a real
property may be admitted in evidence.
The 1960 Oral Contract of Sale was valid and it
conferred ownership of the property in favor of
the respondents. Although it was not reduced
into writing, it is no longer within the purview of
the Statute of Frauds because the contract is
already consummated.
The action for reconveyance of the property in
favor of the respondents was proper and the
issuance of the OCT in favor of the petitioners
was immaterial.
The issuance of a title under the Torrens
System is not a mode of acquiring ownership
28. Willy v Julian, GR 207051,
Dec. 1, 2021
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29. Quiambao Vs. China Banking
Corporation, G.R. No. 238462,
May 12, 2021
30. City of Tanauan v Millonte, GR
219292, Jun 28, 2021
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and it merely confirms the actual title of a
landowner. While the torrens title is
imprescriptible and indefeasible, it cannot be
used as a guard against fraud and it cannot be
used to protect the rights of the usurper over the
actual owner. The action for reconveyance was
granted by the court.
Statute of Frauds
Statue of frauds only apply to executory
contracts and not to contracts partially or totally
performed. In this case, the survey plans that
segregated the Lots is considered as partial
performance of the contract which now
excludes it from the operation of Statute of
Frauds.
Innominate Contracts
The contract is not entirely a contract of sale. It
is an innominate contract reflecting a sales
contract, a contract of agency to sell the subject
property, and a contract to transfer ownership in
exchange of services.
A contract of sale is not a formal contract which
is required to be reduced into writing.
Innominate contracts are regulated by:
1) stipulations of the parties
2) Title 1 and 2 of the NCC
3) rules of the most analogous nominate
contract
4) customs of the place
The contemporaneous acts of Modesto,
Dongpaen and Ricardo after execution of the
1963 agreement show meeting of the minds as
to the sale and transfer of lot 1 and 2 in favor of
Ricardo
Hence, the segregation of the lots and the sale
in favor of Ricardo, albeit sales were partially
made, already constitute as partial performance
which excluded the contract from Statute of
Frauds.
There was constructive possession of the
property in behalf of Ricardo because it was
possessed on his behalf by Lorenzo.
Deed of Sale in this case was void because it
was definitely simulated, one of the contracting
parties was already dead at the time of the
execution of the deed of sale.
In general, a contract is absolutely simulated
and false for having been made after the death
of a party who appears to be a contracting party
therein.
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31. Arakor v Sta. Maria, GR
215006, Jan. 11, 2021
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The Gonzagas in this case could not have
signed the deed because they were already
dead, the contract is void. Any subsequent
transactions based on the void sale are likewise
void.
City of Tanauan was not an innocent purchaser
for value
When one of the parties in a contract is already
dead at the time of the execution of the same,
the contract is simulated and void.
Coupled with the doctrine nemo dat quod non
habet, no one can give what one does not have,
the buyer cannot acquire more than what the
seller can transfer legally.
The Deed of Sale was void in this case, it
conveyed no title to Arakor, conversely, TCTs
issued in favor of Arakor are likewise void. All
subsequent transactions from a void sale is
effectively void as well.