OBLIGATIONS AND CONTRACTS
ATTY. RAMAYANA D. SAIDAMEN-BASMAN
MINDANAO STATE UNIVERSITY – ILIGAN INSTITUTE TECHNOLOGY
A.Y. 2023 – 2024 (2nd Semester)
COURSE SYLLABUS
Course Description and Objective: The course is an in-depth study of the nature, kinds,
and effect of obligations and their extinguishment; contracts in general, their requisites,
form, and interpretation; defective contracts, quasi contracts, natural obligations, and
estoppel. Some correlative discussion on the application of this course to the Law on
Sales, being a special contract.
Reference Material: Any book on Obligations and Contracts
(Suggested – Comments and Jurisprudence on ObliCon by Jurado)
New Civil Code R.A. 386
OUTILINE
PART 1 - ON REQUISITES, NATURE, AND EFFECT OF OBLIGATIONS
I.
GENERAL PRINCIPLES
A. Obligation, meaning and concept
1. The Nature of Rigths in General
2. Basis of Rights
3. Legal Rights
4. Real Rights (Jus in Rem) vs Personal Rights (Jus in Personam)
5. Correlation of Rights and Obligations
B. Classification of Obligations
1. Civil Obligations (A.1156)
2. Natural Obligations (A.1423)
3. Moral Obligations
4 Distinctions
C. Elements / Requisites of Civil Obligations
• Asuncion vs. CA – GR No.109125, 02 December 1994 (En Banc)
Subjective Elements:
1. Active Subject (Creditor/Obligee)
2. Passive Subject (Debtor/Obligor)
• Ocampo III vs. People – GR No.156547, 04 February 2008 (543 SCRA 487)
Objective Elements:
3. Prestation/Object
a. Real Obligation
i. Purpose
b. Personal Obligation
i. Positive Personal Obligation
ii. Negatie Personal Obligation
4. Efficient Cause/Legal Tie or Vinculum Juris:
Sources of Obligations (Art.1157)
a. Law (Art. 1158)
• Marcos II vs. CA – GR No.120880, 05 June 1997
• St. Mary’s Academy vs. Carpitanos – GR No.143363, 06 Feb ‘02
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b. Contracts (Art.1159)
• Regino vs. Pangasinan College – GR No.156109, 18 Nov ’04
• Ayala Corp. vs. Rosa Diana Realty – GR No.134284, 01 Dec 2000
c.
Quasi Contracts (Art.1160 in relation to Arts. 2142 – 2175) / Unjust
Enrichment
• Locsin vs. Mekeni – GR No.192105, 09 Dec ‘13
d. Delicts (Art.1161 in relation to Art.29-30, 35 in rel. to Art.100 et.seq. of the
Revised Penal Code)
• Bermudez vs. Melencio-Herrera – 26 Feb 1988
• People vs. Relova – 06 March 1987
• Manantan vs. CA – 29 January 2001
• People vs. Bayotas – GR No. 102007, 02 Sep ’94 (En Banc)
• People vs. Go – GR No.168539, 25 Mar ’14 (En Banc)
• Abellana vs. People – 17 Aug 2011
e.
II.
Quasi-Delicts (Art.1162 in rel. to Art. 2176-2194)
• Barredo vs. Garcia – 73 Phil 607
• Fegarido vs. Alcantara – GR No.240066, 13 June 2022
NATURE AND EFFECT OF OBLIGATIONS
A. Real Obligations; Rights and Obligations
1. Delivery/Tradition: Concept
2. Generic Real Obligations / Indeterminate Thing (Art.1246 in rel.to Art.1165
par(2), 1170)
• Bunge Corp. vs. Camenforte – GR No.L-4440, 29 Aug 1952
3. Specific Real Obligations/Determinate Thing (Art.1165)
a. To Preserve: Bonus Pater Familias (Art.1163)
b. To Deliver the Thing Itself
• Durban Apartments vs. Pioneer Insurance – 12 Jan 2011
c. To Deliver the Fruits (Art.1164)
• PNB vs. Maranon – GR No.189316, 01 July 2013
d. To Deliver Accessories and Accessions (Art.1166)
4. Time of Delivery: Pure, Conditional Obligations; Obligations with a Term
5. Modes of Delivery
a. Actual Delivery
b. Symbolic Delivery
c. Delivery through Execution of Legal Instruments
• Cabalhin vs. Sps.Lansuela – GR No.202029, 15 Feb 2022
d. Traditio Longa Manu
e. Traditio Brevi Manu
f. Traditio Constitutum Possessarium
6. Parties to Delivery
• Lagon vs. Hooven Comalco – GR No.135657, 17 Jan 2001
B. Personal Obligations: Rights and Obligations
1. Positive Personal Obligations / to do (Art.1167)
• Tanguiling vs. CA – GR No.117190, 02 Jan 1997
2. Negative Personal Obligations / not to do (Art.1168)
• Perez vs. CA – GR No.107737, 01 Oct 1999
C. Breach of Obligations: Causes and Effects (Art.1170)
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1. Default (Mora): Meaning (Art.1169, 1170)
Kinds of Delay:
a. Ordinary Delay
b. Legal Delay/Default (Art.1169)
i. Demand: Nature
ii. Necessity of Demand: Extra-Judicial or Judicial
• Bonrostro vs. Luna, GR No.172346, 24 July 2013
• Federal Builders vs. Foundation Spclst GR No.194507 (2014)
iii. When Demand Not Necessary
• Barzaga vs. CA – GR No.115129, 12 Feb 1997
• Cabanting vs. BPI Family – GR No.201927, 17 Feb 2016
Kinds of Default:
a. Mora Solvendi: Effects
• Pantaleon vs. AmEx – GR No.174269, 08 May 2009
b. Mora Accipiendi: Effects
• State Investment House vs.CA – GR No.90676, 19 June 1991
c. Compensatio Morae: Effects
i. Bilateral Obligations
ii. Mutual Obligations
iii. Reciprocal Obligations (Art.1191-1193)
• Megaworld vs. Majestic Finance – GR No.169694, 09 Dec 2015
• Heirs of Bacus vs. CA – GR No.127695, 03 Dec 2001
2. Fraud (Dolo): Meaning (Art.1170 in rel. to Art. 1171)
a. Dolo Causante: Effects
b. Dolo Incidente: Effects
• Barlin vs. People – GR No.207418, 23 June 2021
• Republic of the Phil. Vs. CTA – GR No.139050, 02 Oct 2001
c. Malicious Prosecution
• Diaz vs. Davao Light – 04 April 2007
• Yasonna vs. De Ramos – 440 SCRA 154
3. Negligence (Culpa): Meaning (Art.1170, 1172-1173)
a. Degrees of Diligence: Extraordinary, Ordinary, or Slight
• KLM Royal vs. Dr.Tiongco – GR No.212136, 04 Oct 2021
b. Negligence as a Question of Fact vs. Damnum Absque Injuria
(Art.1173)
• Rico vs. Union Bank – GR No.210928, 14 Feb 2022
• Oreta-Ferrer vs. Right Eight Agency – GR No.223635 (2021)
• Hotel Nikko vs. Reyes – GR No.154259, 28 Feb 2005
c. Doctrine of Last Clear Chance
• Picart vs. Smith – GR No. L-12219, 15 March 1918
• Phil.Nat’l.Railways vs. Vizcarra – GR No.190922, 15 Feb 2012
d. Res Ipsa Loquitor
• Del Carmen vs. Geronimo Bacoy – 25 April 2012
e. Culpa Contractual
• Orient Freight vs. Kelhin-Everett – GR No.191937 (2017)
• St.Lukes College of Medicine vs. Sps.Perez – 28 Sep 2016
• LRTA vs. Navidad – GR No.145804, 06 Feb 2003
• UE vs. Jader – GR No.132344, 17 Feb 2000
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f. Culpa Acquiliana
i. Solidary vs. Independent Liability of Employer and/or Employee
• Safeguard Security vs. Tangco – GR No.165732, 14 Dec2006
• Heirs of Ochoa vs.G&S Transport – 09 March 2011
• Mercury Drug vs. Sps.Huang – 22 June 2007
ii. Presumption of Fault/Negligence of Employer:Vicarious Liability
• Maitim vs. Aguila – GR No.218344, 21 March 2022
iii. Proof of Employee’s Fault/Negligence
• Mercury Drug vs. Baking – GR No.156037, 28 May 2007
iv. Proof of Due Diligence
• Viron vs. Delos Santos – GR No.138296, 22 Nov.2000
v. Quasi-Delict Liability even in the existence of a Contract
• Mindanao Terminal vs. Phoenix – GR No.162467, 08 May 2009
vi. Medical Malpractice vs. Medical Negligence
1. Basis of Physician’s Liability
• De Jesus vs. Dr.Uyloan – GR No.234851, 15 Feb 2022
2. Medical Malpractice, Requisites vs. Standard of Care
• Rosit vs. Davao Doctors Hospital – GR No.210445, 07Dec2015
• Borromeo vs. Family CareHospital – GR No.191018, 25Jan2016
• Solidum vs. People – GR No.192123, 10 March 2014
• Dr.Alamo vs. Lugmao – 07 April 2014
3.Doctrine of Informed Consent
• Li vs. Soliman - GR No.165279, 07 June 2011
4.Doctrine of Res Ipsa Loquitor and Captain of the Ship Doctrine
• Ramos vs. CA – GR No.124354, 29 Dec 1999
• Reyes vs. Sisters of Mercy Hospital – GR No.130547, 03Oct2000
• Cantre vs. Go – GR No.160889, 27 April 2007
5.Doctrine of Corporate Responsibility vs. Doctrine of Corporate
Negligence
• PSI vs. CA & Agana – GR No.126297, 31 Jan 2007
6.Doctrine of Apparent Authority vs. Control Test vs. Borrowed
Servant Rule
• Nogales vs. Capitol Medical Center – GR No.142625, 19Dec’06
• Mendoza vs. Casumpang – GR No.197987, 19 Mar 2012
• Dr.Casupang vs. Cortejo – GR No.171127, 11 March 2015
g. Culpa Criminal
• People vs. Delos Santos – 355 SCRA 415
• LG Foods vs. Agraviador – 503 SCRA 170
4. Contravention of the Terms (Art.1170)
• Cathay Pacific Airways vs.Vasquez – GR No.150843, 14 March 2003
D. Remedies in Case of Breach (Art.1169, 1170, 1177, and 1191-1192)
1. Specific Performance: Necessity (Art.1165)
• Vda.De Mistica vs.Naguiat – GR No.137909, 11 Dec 2003
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2.Resolution/Rescission (Art.1191-1192 as compared to Art.1380-1389)
a. Nature as a Remedy
• Golden Valley vs. Pinkian Mining – GR No.190080 11 June 2014
b. Right to Resolve/Rescind: Requisites:
• Estate of Rodriguez vs. Republic – GR No.214590, 27 April 2022
c. Effects
• Camp John Hay vs. Charter – GR No.198849, 07 Aug 2019
3.Damages: Kinds and Amounts, as Primary vs. Accessory Obligation
• Disini vs. RP – GR No.205172, 15 June 2021
• Pajares vs. Remarkable – GR No.212690, 20 Feb 2017
• Sian vs. Sps. Somoso – GR No.201812, 22 Jan 2020 (Frivolous Suits)
• Magat vs. Medialdea – GR No.L-37120, 20 April 1983
• Magat vs. CA – GR.No.124221, 04Aug2000 Dano Emergente vs.Lucro Cessan
Civil Liability Arising from Criminal Liability)
• Abellana vs.People – 17 August 2011
• People vs. Jugueta – 05 April 2016
• People vs. Nurfrashir Hashim – 13 June 2012
• People vs. Malicsi – 543 SCRA 93
• People vs. Doctolero – 20 August 2001
• People vs. Abulencia – 22 August 2001
• People vs. ZZZ – GR No.226144, 14 October 2020
• Tamayo vs. Abad Senora – 15 Nov 2010 (Loss of Earning Capacity)
• People vs. Sia – 21 Nov 2001
4.Exhaustion of All Property of the Debtor: Exemptions (Art.1177 in rel. to
Art.2236)
5.Accion Subrogatoria: How, Exceptions (Art.1177)
6.Accion Pauliana (Art.1177 in rel. to Art.1380-1389)
• Khe Hong Cheng vs. CA – GR No.144169, 28 March 2001
E. Fortuitous Event / Caso Fortuito (Art.1174 in rel.to Art. 1165)
1. Kinds
a. Fortuitous Event Proper vs. Force Majeure (Fuerza Mayor)
b. Ordinary vs. Extraordinary
• PCSC vs. – GR No.147324, 25 May 2004
2. Requisites
• Phil.Realty & Holding Corp.vs.Ley Construction – GR No.165548 (2011)
• Megaworld Globus vs.Tanseco – GR No.181206, 09 Oct 2009
• Sicam vs. Jorge – GR No.159617, 08 Aug 2007
• Huibonhoa vs. CA – GR No.95897 and 102604, 14 Dec 1999
3. Effects of Fortuitous Even Upon Obligation
• Dioquino vs. Laureano – GR No.L-25906, 28 May 1970
• Bachelor Express vs. CA – GR No.85691, 31 July 1990
• Vasquez vs. CA – GR No.L-42926, 13 Sep 1985
• Yobido vs. CA – GR No.113003, 17 Oct 1997
• Sps.Jose S. Dychiao et.al.vs. Allied Bank Corp.- GR No.177921 (2013)
• Bernales vs. Northwest Airlines – GR No.182395, 05 Oct 2015
4. Doctrine of Assumption of Risk
• Abrogar vs. Cosmos Bottling – GR No.164749, 15 March 2017
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• Cerezo vs. Atlantic Gulf – GR No.L-10107, 04 Feb 1916
5. The COVID-Pandemic
• RA 11469 Bayanihan To Heal As One Act of 2020
• RA 11494 Bayanihan To Recover As One Act of 2020
F. Transmissibility of Rights and Obligations (Art.1178)
• Project Builders vs. CA – GR No.99433, 19 June 2001
• Genato vs. Bayhon – GR No. 171035, 24 Aug 2009
PART 2 - ON KINDS OF OBLIGATIONS
III.
KINDS OF OBLIGATIONS
A. Pure Obligations (Art.1179, par.1)
1. Meaning
2. Characteristics
• HSBC vs. Broqueza – GR No.178610, 17 Nov 2010
B. Conditional Obligations (Art.1179)
1. Meaning and Definitions of a Condition
2. Requisites (Art.1179 in rel.to Art.1183)
3. Classifications
4. Suspensive Conditions
a. Meaning (Art.1181)
• Tomimbang vs.Tomimbang – August 2009
• Gonzales vs. Heirs – GR No.131784, 16 Sep 1999
b. Potestative Suspensive Conditions (Art.1182)
• Hermosa vs. Longara – GR No. L-5267, 27 Oct 1953
• Trillana vs. Quezon Colleges – GR No.L-5003, 27 June 1953
c. Positive Suspensive Conditions (Art.1184)
• Perez vs. CA – GR No.112329, 28 Jan 2000
d. Negative Suspensive Conditions (Art.1185)
e. Constructive Fulfillment (Art.1186)
f. Effects of Non-Fulfillment of Suspensive Condition
• De Leon vs. Ong – 02 Feb 2010
g. Effects of Fulfillment of Suspensive Condition
i. Retroactivity (Art.1187)
ii. As to Fruits/Interests (Art.1187)
iii. As to Loss (Art.1189, 1 and 22)
iv. As to Deterioration (Art.1189, 3 and 4)
v. As to Improvement (Art.1189, 5 and 6)
h. Rights Pending Condition (Art.1188)
5. Resolutory Conditions (Art.1179, 1181, 1190)
a. Meaning (Art.1181)
b. Demandability (Art.1179)
c. Constructive Fulfillment (Art.1186)
d. Effects:
i. Mutual Restitution (Art.1190)
ii. As to Loss (Art.1189, 1 and 2)
iii. As to Deterioration (Art.1189, 3 and 4)
iv. As to Improvement (Art.1189, 5 and 6)
e. Rights Pending Condition (Art.1188)
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C. Obligations with a Term/Period (Art.1193-1198)
1. Period or Term, Meaning and Definition (Art.1193, 1180)
• Art.13 of the Civil Code
• CIR vs. Primetown, 28 Aug 2007
2. Distinctions: Condition vs. Period/Term
• Berg vs. Magdalena Estates – 92 Phil 110
• Victorias Planters Assoc. vs. Victorias Milling – GR No.L6648, 25 July 1955
3. Requisites
4. Kinds of Periods/Terms
a. Suspensive (ex die) vs. Resolutory (in diem)
b. Legal vs. Conventional vs. Judicial
• Baluyut vs. Poblete – GR No.144435, 06 Feb 2007 (Conventional Period)
c. Definite vs. Indefinite
• Malayan Realty vs. Uy – 10 Nov 2006
5. Potestative Period (Art.1180 in rel. to Art.1197)
• Jespajo Realty Corp.vs CA – GR No.113626, 27 Sep 2002
6. Effects (Art.1195 – 1197)
• Brent School vs. Zamora – 05 Feb 1990 (Fixed Term Employment)
• Dela Salle Araneta vs. Bernardo – GR No.190809, 13 Feb 2017
7. Loss, Deterioration, Improvement (Art.1194 in rel.to Art.1189)
8. Loss of Benefit of Period/Term (Art.1198)
D. Alternative Obligations (Art.1199-1205)
1. Meaning and Definition (Art.1199)
• Ong Guan vs. Century – GR No.L-22738, 02 Dec 1924
2. Distinguished from Conjunctive Obligations
3. Effects:
a. As to Debtor
i. Right of Choice/Election: Nature and Limitations (Art.1200,
Art.1202-1203)
ii. Effectivity of Choice (Art.1201)
iii. Liability for Loss of Alternatives: Partial vs. Total (Art.1203-1204)
b. As to Creditor
i. Right of Choice/Election: (Art.1205)
ii. Effectivity of Choice
iii. Right of Refusal vs. Partial Performance
E. Facultative Obligations (Art.1206)
1. Meaning
2. Alternative vs. Facultative Obligations
• Quizana vs. Redugerio – GR No.L-6220, 07 May 1954
F. Joint Obligations (mancommunada, pro-rata)
1. Individual vs. Collective Obligations
2. Nature
3. Joint Obligations, How Created (Art.1208 in rel. to Art.1207)
• Berot vs. Siapno – GR No.188944, 09 July 2014
4. Effect of Joint Liability
• PH Credit Corp. vs. CA – GR No.109648, 22 Nov 2001
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G. Solidary Obligations (in solidum, solidaria, joint and several)
• Olongapo City vs. Subic Water & Sewerage – GR No.171626, 06 Aug 2014
• Estanislao & Africa vs. China Bank – GR No.193890, 11 March 2015
1.Nature and Definition (Art.1207)
2. Solidarity vs. Indivisibility (Art.1209)
3. How Created (Art.1207)
• Republic Glass Corp.vs.Qua – GR No.144413, 30 July 2004
• Industrial Management vs. NLRC – GR No.101723, 11 May 2000
• Metro Manila Transit vs. CA – 21 June 1993
4.Active Solidarity or Mutual Agency: Effects (Art.1211-1216)
• Guy vs. Acott – GR No.206147, 13 Jan 2016
5.Passive Solidarity or Mutual Guaranty: Effects (Art.1217-1222)
• Dimayuga vs. PCIB – GR No.L-42542, 05 Aug 1991
• Esparwa Security vs. Liceo de Cagayan – GR No.150402, 28 Nov 2006
H. Divisible Obligations
1. Nature (Art.1223)
2. Kinds of Division: Qualitative, Quantitative and Ideal/Intellectual
3. Kinds of Divisible Obligations (Art.1225, part.3-4)
• Sps.Lam vs. Kodak – GR No.167615, 11 Jan 2016
I. Indivisible Obligations
1. Nature (Art.1223)
2. Kinds of Indivisibility: Natural, Legal or Conventional (Art.1225)
• Nazareno vs. CA – GR No.138842, 18 Oct 2000
J. Joint Indivisible Obligations (Art.1224 and Art.1209)
1. Nature
2. Effects:
a. As to Creditors
b. As to Debtors
K. Obligations with a Penal Clause (Art.1226-1230)
1. Meaning and Definition
2. Penalty Clause, Defined (Art.1226)
3. Purposes
• J Plus Asia vs. Utility Assurance – GR No.199650, 26 June 2013
• DPWH Secretary vs. Tecson – GR No.179334, 21 April 2015
4. Kinds of Penalties
a. Legal vs. Conventional
b. Compensatory vs. Punitive
c. Subsidiary vs. Joint (Art.1226 in rel. to Art.1227-1228)
5. Penalty Interest vs. Moratory/Monetary Interest
• RP vs. Sps.Bonifaction – GR No.226734, 10 May 2021
• Tan vs. CA – GR No.116285, 19 Oct 2001 (Monetary vs. Penalty Interest)
6. Penalties vs. Liquidated Damages
7. Escalation Clause vs. Acceleration Clause in Loans
• Gotesco vs. Int’l.Exchange Bank – GR No.212262,, ,26 Aug 2020
• Security Bank vs. Sps.Rodrigo – GR No.192934, 27 June 2018
8. Legal Rate: Loans and Forbearances of Money vs. Other Monetary Oblig.
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• Nacar vs. Gallery Frames – 13 Aug 2013
• Lara’s Gifts vs. Midtown – GR No.225433, 28 Aug 2019
• Ignacio vs. Ragasa – 29 Jan 2020
9. Reduction of Conventional Penalties: Nullity of Penalties/Usurious
Transactions (Art.1175 in rel. to. Art.1229-1230)
• Mallari vs. Prudential – 05 June 2013
• RGM Industries vs. United Pacific – 27 June 2012
• Prisma Const. vs. Menchaves – 09 March 2010
PART 3 - ON EXTINGUISHMENT OF OBLIGATIONS
IV.
EXTINGUISHMENT OF OBLIGATIONS
• Metro Concast Steel vs. Allied Bank – GR No.177921, 04Dec’13
A. Payment/Performance (Art.1232-1261)
1. Meaning (Art.1232)/Effects
• Lo vs.KJS – GR No.149420, 08Oct2003 (Deed of Assignment)
2. Characteristics
3. Kinds: Normal/Voluntary vs. Abnormal/Involuntary
4. Requisites (Art.1233):Identity and Integrity of Prestation
5. Identity of Prestation
• Cathay Pacific vs. Vazquez – GR No.150843, 14Mar2003
• Fernando vs. Northwest – GR No.212038, 08Feb’17
a. Real Obligations: General Requirements (Art.1239)
b. Specific Real Obligations (Art.1244)
c. Generic Real Obligations (Art.1246)
d. Personal Obligations (Art.1244)
e. Obligations to Pay Money (Art.1249-1250 in rel.to RA8183)
• Citibank vs. Sabeniano – GR No.156132, 06Feb2007
i. Currency, defined (Sec.48-49 RA7653 BSP Act)
ii. Legal Tender, defined (Sec.52, RA7653)
iii.Demand Deposits, defined (Sec.58-60, RA7653)
iv. Instruments/Evidence of Credit
• Evangelista vs. Screenex – 20Nov2017
v. Effects of Inflation (Art.1250)
• Almeda vs. Bathala Mtng – GR No.150806, 28Jan2008
6. Integrity of Prestation
a. Strict Payment for the Entire Prestation; Exceptions (Art.1248)
b. Substantial Payment/Performance (Art.1234-1235)
• Palanca vs. Guides – 452 SCRA 461
7. Who May Demand Payment
a. Creditor’s Right of Payment (Art.1240)
• Dela Cruz vs. Concepcion – GR No.172825, 11Oct2012 (Pay thru Agent)
b. Payment to an Incapacitated (Art.1241)
c. Payment to Third Person (Art.1241)
8. Who Must Pay
a. Debtor (Art.1236 in rel. to Art.1243 and Art.1247)
• Audion Electric vs.NLRC – GR No.106648, 17June1999
b. Persons Having Interest in the Obligation (Art.1236)
c. Payment by Third Person
i. As Agent of Debtor
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ii. Without Knowledge/Against Consent of Debtor [Art.1236 par(2),
Art.1237-1238]
iii.With Knowledge/Consent of Debtor
• PSE Inc. vs.Litonjua – GR No.204014, 05Dec2016
9. Where Payment Must Be Made (Art.1251)
• Binalbagan vs. CA – GR No.100594, 10 Mar 1993
10. When Payment Must Be Made
11. Special Forms of Payment
a. Dacion En Pago/Dation In Payment (Art.1245)
• Dacquel vs.Sps.Sotelo – GR No.203946, 04Aug2021
• Aquintey vs. Tibong – GR No.166704, 20Dec2006
b. Payment by Cession or Assignment (Art.1255 in rel. to. RA10142 or the
Financial Rehabilitation and Insolvency Act)
c. Application of Payments (Art.1252-1254 in rel.to Art.1176)
• Paculdo vs.Regalado – GR No.123855, 20 Nov 2000
d.Tender of Payment and Consignation (Art.1256-1261)
• PNB vs.Chan – GR No.206037, 13 Mar 2017
• Cacayorin vs.Armed Forces and PMBA – GR No.171298 (2013)
• Del Carmen vs.Sabordo – GR No.181723, 11Aug2014
B. Loss of the Prestation/Impossibility of Performance (Art.1262-1269)
1. Kinds of Loss/Impossibility: Physical, Civil, or Legal [Art.1189(2)]
• Comglasco Corp./Agila Glass vs.Santos Car Check – GR No.202989
2. When Obligation Extinguished (Art.1262, 1266-1267)
• Delfin Gonzales Jr. vs.Magdaleno Pena – GR No.214303, 30Jan2017
3. Doctrine of Unforeseen Events/Rebus Sic Stantibus (Art.1267)
• Comglasco vs. Santos Car – GR No.202989, 25Mar2015
• Magat vs. CA – GR No.124221, 04Aug2000
• PNCC vs. CA – GR No.116896, 05May1997
• Naga Telephone vs. CA – GR No.107112, 24Feb1994
4. Remedies of Creditor in Case of Loss (Art.1269)
5. Liability in Case of Loss [Art.1262 (2); Art.1265, 1268 in rel.to Art.1174,
Art.1165]
6.Partial Loss: Effects [Art.1264 in rel.to Art.1189 (3)(4)]
C. Condonation/Remission of the Debt (Art.1270-1274)
• Dizon vs. CTA – GR No.140944, 30April2008
1. Meaning and Nature
• Reyna vs.COA – GR No.167219, 08Feb2011
2. Requisites
a. Legal Capacity
b. Gratuitousness, defined
c. Acceptance
d. Form
e. Not Inofficious (art.1271)
• Trans-Pacific Industrial Supplies vs. CA – GR No.109172, 19Aug1994
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3. Kinds
a. Inter Vivos (Art.725, et.seq.) vs. Mortis Causa (Art.935-937)
b. Complete vs. Partial (Art.1273-1274)
c. Express vs. Implied (Art.1270)
d. Implied Condonation
i. Presumption of Condonation/Remission (Art.1271)
ii. Presumption of Delivery (Art.1272)
• Dalupan vs. Harden – GR No.L-3975, 27Nov1951
• Lopez Vito vs.Tambunting – GR No.L-9806, 19Jan1916
D. Confusion or Merger of Rights (Art.1275-1277)
1. Meaning and Definition (Art.1275)
• Valmonte vs. CA – GR No.L-41621, 18Feb1999
• Mota vs. Serra – GR No.22825, 14Feb1925
• Yek Tong Lin Fire & Marine Ins. Vs.Yusingco – GR No.43608, 20July1937
2. Requisites (Art.1276-1277)
3. Effects
E. Compensation (Art.1278-1290)
1. Meaning and Defintion (Art.1278)
• Soriano vs. People – GR No.181692, 14Aug2013
• Mondragon Personal Sales vs.Sola Jr. – GR No.174882, 21Jan2013
2. Requisites (Art.1279)
• Banco de Oro vs.Ypil – GR No.226144, 14Oct2020
• Trinidad vs.Acapulco – GR No.147477, 27June2006
• EGV Realty vs.CA – GR No.120236, 20 July 1999
3.
4.
5.
6.
Total vs. Partial (Art.1281)
Voluntary (Art.1282)
Judicial (Art.1283-1284)
Legal Compensation (Art.1290 in rel. to Art.1279)
a. Requisites (Art.1280, 1282)
• Lao vs. Special Plans Inc. – GR No.164791, 29June2010
b. How Established
c. When Prohibited (Art.1287-1288)
• Apodaca vs.NLRC – GR No.80039, 18April1989
• Francia vs. CA – GR No.L-67649, 28 June 1988
7. Effects:
a. Upon Principal or Upon Several Debts (Art.1289)
b. Upon Guarantor (Art.1280)
c. Of Assignment of Rights (Art.1285)
F. Novation (Art.1291-1304)
1. Meaning and Definition: How Effected (Art.1291)
• The Wellex Group vs. U-Land Airlines – GR No.167519, 14Jan2015
• BPI vs. Domingo – GR No.169407, 25Mar2015
2. Effects (Art.1296)
3. Kinds (Art.1292)
• Rivas vs. Bacotoc – GR No.228704, 02Dec2020
4. Objective Novation (Art.1297-1298)
11
• Hernandez-Nievera vs.Hernandez – GR No.171165, 14Feb2011
5. Subjective Novation
a. Substitution of the Debtor (Art.1293); Expromision (Art.1236-1237,1294)
vs.Delegacion (Art.1236-1237, 1295)
• Mindanao Savings vs.Wilkom – GR No.178618, 20 Oct 2010
b. Subrogation to the Rights of the Creditor (Art.1300, 1303-1304); Legal vs.
Conventional (Art.1301)
• Asian Terminals Inc. vs.Philam Ins. – GR No.181163, 24 July 2013
• Loadmasters Customs vs. Glodel Brokerage – GR No.179446, 10Jan2011
• MetroBank vs. Rural Bank of Gerona – GR No.159097, 05 July 2010
G. Prescription (Art.1106-1116)
1. Definition (Art.1106)
2. Right to Prescription
a. In favor of/Against (Art.1107-1108, 1110-1111; 1114)
b. Prohibited (Art.1108-1109; 1113)
c. Who May Renounce; How (Art.1112)
3. Extinctive Prescription
a. Meaning and Effects (Art.1139)
b. As a Defense; Rationale
c. Statute of Limitations/Prescriptive Periods (Art.1140-1149; Art.1577,
1542-1543; 1571; Family Code)
d. Computation of the Periods (Art.1150-1154)
• Banco Filipino Savings vs. CA – GR No.129227, 30May2000
• Vda De Delgado vs. CA – GR No.125728, 28 Aug 2001
e. Interruption (Art.1155) vs. Tolling of Prescriptive Period
• Ledesma vs. CA – GR No.106646, 30 June 1993
H. Estoppel (Art.1431-1439)
1. Definition and Meaning (Art.1431)
2. Kinds
a.Estoppel by Record: Estoppel by Judgment vs. Res Judicata
b.Estoppel by Deed (Art.1436)
c. Estoppen in Pais: Meaning and Requisites
c.i By Representation/Positive Acts
• Calubad vs. Ricarcen Dev’t. – GR No.202364, 30Aug2017
c.ii. By Admission
c.iii. By Promise (Promissory Estoppel)
• Mendoza vs. CA – GR No.116710, 25 June 2001
c.iv. By Silence
• Pasion vs. Melegrito – GR No.166558, 28 March 2007
c.v. By Acquiescence/By Acceptance of Benefits (Art.1438)
• Board of Liquidation vs. Kalaw – GR No.L-18805, 14 Aug 1967
d. Estoppel by Laches: Doctrine of Stale Demands
d.i. Prescription vs. Laches
• Salandanan vs. CA – GR No.127783, 05 June 1998
• De Vera-Cruz vs. Miguel – GR No.144103, 31 Aug 2005
PART 4 - ON CONTRACTS
12
V.
CONTRACTS (Art.1305-1317)
• Cabahug bs. NAPOCOR – GR No. 186069, 30 January 2013
A. Definition and Meaning
• ACE Foods Inc. vs. Micro Pacific Tech. – GR No.200602, 11 Dec 2013
• Hur Tin Yang vs. People – GR No.195117, 14 Aug 2013
• Cruz vs. Gruspe – GR No. 191431, 13 March 2013
B. Characteristics/Principles
1. Autonomy of Contracts (Art.1306 in rel.to Art.III, Sec.10, 1987 Constitution):
Concept
2. Non-Impairment Clause of the Constitution/Freedom to Contract
• Ferrazzini vs. Gsell, GR No.L-10712, 10 Aug 1916
• Del Monte Fresh vs. Del Monte Supervisors, GR No.225115, 27 Jan 2020
In Security Transactions
Pactum de non alienado
Pactum commisorium:
• Garcia vs. Villar, Jun27,2012, compared with
• Sps.Edralin vs. Phil.Veterans Bank, 09 Mar 2011
Dragnet Clause
• Sps.Tecklo vs. Rural Bank of Pamplona, 18 Jun 2010
In Lease
• University Physicians Services vs. Marian Clinics, 01 Sep 2010
Deprivacion de derecho vs. Deprivacion de mero hecho (Art.1654/1664 as
applied in
• Martin, et.al. vs. DBS Bank Phil., Inc. et.al, 16 June 2010
In Employment Contracts
Prohibition to Marry Clause:
• Duncan vs. Glaxo, GR No.162994, 17 Sep 2004 as compared to
• Star Paper vs. Simbol, GR No.164664, 12 Apr 2006 on bona fide
occupational qualification or exception
Non-involvement clause:
• Tiu vs. Platinum Plans, 28 Feb 2007 as compared with
• Del Castillo vs. Richmond, GR No.L-21127, 09 Feb 1924
In Dealership/Distributorship Contracts
Exclusivity Clause
• Avon Cosmetics vs. Luna, GR No.153674, 20 Dec 2006
In Partnership Agreements
Pactum leonine
In Service Contracts
Non-Compete Clause
• Dr.Adapon vs. Medical Specialists, GR No.229956, 14 June 2021
3. Obligatory Force (Art.1159, Art.1315)
• Asuncion vs. CA, GR No.109125, 02 Dec 1994
Right of First Refusal – Meaning and Definition
13
• Equatorial Realty vs. Carmelo, GR No.106063, 21 Nov 1996
• Metropolitan Bank vs.Rosales, GR No.183204, 13 Jan 2014
4. Mutuality (Art.1308-1310; 1317)
• GF Equity Inc. vs. Valenzona, GR No.156841, 30 June 2005
• Silos vs. Phil.National Bank, GR No.181045, 02 July 2014
a. Equality / Contract of Adhesion
• Pilipino Telephone Corp. vs. Tecson, GR No.15966, 07 May 2004
b. Non-Binding as to Third Parties: Exceptions (Art.1309-1310)
Arbitration, Art.2042-2406 of NCC in rel.to RA876 and RA9285
• PCSO vs. DFFN, Inc., GR No.232801, 30 June 2021
• Uniwide vs. Titan-Ikeda, GR No.126619, 20 Dec 2006
c. Enforceability (Art.1317)
• Gozun vs. Mercado, GR No.167812, 19Dec2006 on Agent vs.Principal
5. Relativity (Art.1311-1314)
• DKC Holdings Corp. vs. CA, GR No.118248, 05 April 2000
a. Privity: Exceptions (Art.1311)
• Sta.Lucia Realty vs. Buenaventura, GR No.177113, 02 October 2009
b. Stipulations Pour Autri (Art.1311 par.2)
• Baluyot vs. CA, 22 Jul 1999
c. Contracts Creating Real Rights (Art.1312)
• Domilos vs. Sps.Pastor, GR No.207887, 14 Mar 20222
d. Contracts in Fraud of Creditors (Art.1313 in rel. to Art.1381 [3])
e. Tortious Interference (Art.1314)
• Go vs. Cordero, GR No.164703, 04 May 2010
• Tayag vs. CA, 25 Mar 2004
• So Ping Bun vs. CA, GR No.120554, 21 Sep 1999
f. Collective Contracts
C. Stages in the Execution of a Contract
1. Generation/Negotiation/Preparation/Conception (Art.1306)
2. Perfection/Birth: Consensual vs. Real vs. Solemn
3. Obligation/Performance Phase
4. Consummation/Termination
D. Elements
1.Essential Elements (Art.1315-1316): Consensual Contracts; Real Contracts;
Formal Contracts
2.Natural Elements
3.Accidental Elements
VI.
ESSENTIAL REQUISITES OF CONTRACTS
A. Consent/”Meeting of Minds”
1. Meaning
2. Elements: Offer and Acceptance
• Korean Air vs. Yuson, 16 June 2010
14
•
•
Montecillo vs. Reynes, GR No.138018, 26 Jul 2002
ABS-CBN vs. CA, GR No.128690, 21 Jan 1999
3. Offer: Requisites (Art.1321-1323; 1325) distinguished from Option (Art.1324
in rel.to Art.1479)
• Limson vs. CA, GR No.135929, 20 Apr 2001 on Option
• Traders Royal Bank vs. Cuison Lumber Co., Inc. GR#174286, 05Jun09
• MMDA vs. Jancom Environmental Corp, GR No.16530, 31 Mar 1922
• Laudico vs. Rodriguez, GR No.16530, 31 Mar 1922
4. Acceptance: Requisites; distinguished from Counter-Offer (Art.1319-1320)
• Villanueva vs. PNB, 06 Dec 2006
5. Consent: How manifested (Art.1319)
6. Vices of Consent
a. Vices of Capacity (Art.1327-1329)
i. Minority
ii. Insanity/Imbecility/Dementia
iii. Drunkenness/Hypnotic Spell
iv. Special Incapacities
b. Vices of Will (Art.1330)
i.
Mistake/Error (Art.1331-1334)
• Lim vs. CA, 229 SCRA 616
• Theis vs. CA, GR No.126013, 12 Feb 1997
• Rural Bank of Caloocan vs. CA, GR No.L-32116, 21 April 1981
• Dumez Co.of France vs. NLRC, GR No.82340, 12 Aug 1991
ii.
Violence/Intimidation (Art.1335-1336)
• Binua vs. Ong, GR No.207176, 18 June 2014
• Mangahas vs. Brobio, GR No.183852, 20 Oct 2010
iii.
Undue Influence (Art.1337)
• Ruiz vs. CA, GR No.146942, 22 April 2003
iv.
Fraud: Kinds; How Committed (Art.1338-1344)
• Carandan vs. Material Seafrong, GR No.252195, 30 June 2021
• Cardinez vs. Cardinez, GR No.213001, 04 Aug 2021
• Dela Cruz vs. SIson, GR No.163770, 17 Feb 2005
B. Object/Subject Matter (Art.1347-1349)
1. Requisites
a. Writhin Commerce of Man
b. Existing vs. Future Things (Art.1347)
c. Licit (Art.1347)
• Chavez vs. PEA, GR No.133250, 06 May 2003
d. Possible (Art.1348)
e. Determinate (Art.1349)
• Carabeo vs. Sps.Dingco, 04 Apr 2011
2. Distinguished from Object of Obligations
C. Cause/Consideration (Art.1350-1355)
15
1. Meaning
• Cojuangco, Jr. vs. Republic, GR No.180705, 27 Nov 2012
• Mangahas vs. Brobio, GR No.183852, 20 Oct 2010
• Pentacapital Investment Corp. vs. Mahinay, GR No.171736, 05 Jul 2010
2. Requisites
a. Existing: Absence of Cause vs. Failure of Cause vs. Inadequacy of Cause
• Catindig vs. Vda De Meneses, 02 Feb 2011
• Orduna et.al. vs. Fuentebella, 29 June 2010
• Askay vs. Cosalan, GR No.21943, 15 Sep 192446
b. Lawful (Art.1352, 1354)
c. True/Real: Simulation of Contracts (Art.1353, 1355, 1343-1344)
• ATCI Overseas vs. Asset Pool, GR No.250523, 28 June 2021
• De Leon vs. Dela Llana, GR No.212277, 11 Feb 2015
• Hrs. of Ureta vs. Hrs.of Ureta, GR No.165748, 14 Sep 2011
• Rebusquillo vs. Gualez, GR No204029, 04 June 2014
• Suntay vs. CA, GR No.114950, 19 Dec 1995
3. Cause vs. Motive (Art.1351)
• Uy vs. CA, 09 Sep 1999
4. Kinds (Art.1350)
a. Onerous
• Pentacapital vs. Makilito Mahinay, 05 Jul 2010
b. Remuneratory – Quantum Meruit
• Catly vs. Navarro, et.al. 05 May 2010
• Virata vs. Atty.De Jesus, GR No.217004 17Apr2017
c. Gratuitous
• Liguez vs. CA, GR No.L-11240, 18 Dec 1957
• PhilBank vs. LuiShe, GR No.L-17587, 12 Sep 1967
VII. FORM OF CONTRACTS (Art.1356-1358)
A. Form for Validity/as an Essential Element of Contracts (Art.1356-1357)
• Hrs.of Yadao vs. Hrs.ofCaletina, GR No.230784, 15Feb2022
B. Form for Enforceability/Statute of Frauds [Art.1403(2)]
• RA 8792 or the Electronic Commerce Act
C. Form for Convenience (Art.1358)
• Vega vs. SSS, GR No.181672, 20 Sep2010
• Balatbat vs. CA, 261 SCRA 128
• Universal Robina vs. Hrs. of Teves, 389 SCRA 316
VIII. REFORMATION OF INSTRUMENTS (Art.1359-1369)
• Bentir, et.al. vs. Hon. Leanda – GR No.128991, 12 April 2000
A.
B.
C.
D.
As a Remedy (Art.1359-1360, 1368-1369)
Requisites (Art.1359)
When Available (Art.1361-1365)
When Prohibited (Art.1366-1367)
• Sarming vs. Dy – 06 June 2002
• Cebu vs. CA – 407 SCRA 154
16
IX.
INTERPRETATION OF CONTRACTS (Art.1370-1379)
A. Literal Interpretation (Art.1370)
• Richardson Steel vs. UnionBank, GR No.224235, 28 Jun 2021
B. In case of Doubt (Art.1371-1379)
• Malate Const.Devt.Corp. vs. Extraordinary Realty Agents & Brokers
Cooperative, GR No.243765, 05 Jan 2022
• RCBC vs. CA, GR No.133107, 25 Mar 1999
1. Specialibus Derogat Generalibus:
• Cabahug vs. NPC, GR No.186069, 30 Jan 2013
• Berman Memorial Park vs. Cheng, GR No.154630, 06 May 2005
• The Wellex Group, Inc. vs. U-Land Airlines, GR No.167519, 14 Jan 2015
2. Doctrine of “Complementary Contracts Construed Together”
• PBCom vs. Lim, GR No. 158138, 12 April 2005
3. Contra Proferentem Rule
• Asia Trust vs. Tuble, GR No.183987, 25 July 2012
X.
DEFECTIVE CONTRACTS
A. Rescissible Contracts (Art.1380-1389)
1. Requisites (Art.1380)
2. Rescission vs. Resolution
• Equatorial Realty Devt vs. Mayfair Theater, GR No.106063, 21Nov1996
• Guman, Bocaling vs Bonnevie, GR No.86150, 02 Mar 1992
• Luz vs. Baylon, GR No.182435, 13 Aug 2012
• Air France vs. CA, GR No.104234, 30 June 1995
3. Kinds:
a. Lesion (Art.1381[1][2], 1386)
b. In Fraud of Creditors/Accion Pauliana (Art.1381 [3], 1387-1388 in rel. to
Art.1177)
c. Contracts for Things Under Litigation (Art.1381 [4])
d. Declared by Law (Art.1381 [5])
e. Payments in Insolvency (Art.1382)
4. Nature and Effects (Art.1383-1385, 1389): Mutual Restitution
• Lee vs. Bangkok Bank, 09Feb2011
• Siguan vs. Lim, GR No.134685, 19 Nov 1999
• Khe Hong Cheng vs. CA, GR No.144169, 28 Mar 2001
B. Voidable Contracts (Art.1390-1402)
1. Nature/Kinds (Art.1390)
• Mangahas vs. Brobio, GR No.183852, 20 Oct 2010
• Hernandez vs. Hernandez, GR No.158576, 09 Mar 2011
• Fuentes vs. Roca, GR No.178902, 21 Apr 2010
• Guiang vs. CA, GR No.125172, 26 June 1998
• De Braganza vs. De Villa, 105 Phil 456
• Francisco vs. Herrera, GR No.139982, 21 Nov 2002
• Violria vs. Continental Airlines, GR No.188288, 16 Jan 2012
• The Roman Catholic Church vs. Pante, GR No.174118, 11Apr2012
2. Annulment
a. As a Remedy
b. Who May Bring (Art.1397, 1401)
17
c. Prescriptive Period (Art.1391, 1401)
• Miailhe vs. CA, GR No.108991, 20 Mar 2001
• First Phil.Holdings vs. Trans Middle East, 04 Dec 2009
d. Effects (Art.1398, 1402)
• Cabilao vs. Tampan, GR 209702, 23 Mar 2002
• Katipunan vs. Katipunan, 30 Jan 2002
• Jumalon vs. CA, GR No.127767, 30Jan2002
3. Confirmation/Ratification (Art.1392)
a. Requisites
b. How Made: Express vs. Implied (Art.1393)
c. Who May Ratify (Art.1393-1395)
d. Effects (Art.1396)
C. Unenforceable Contracts (Art.1403-1408)
1. Nature
• Regal Films Inc. Vs. Concepcion, GR No.139532, 09Aug2001
• Iglesia Filipina Independiente vs. Hrs.of Taeza, GR No.179597, 03Feb14
• Averia vs. Averia, GR No.141877, 13Aug2004
2. Kinds
a. Unauthorized Contracts (Art.1317 in rel.to 1403[1]; 1404)
• Cabales vs. CA, 31Aug2007
b. Both parties incapacitated (Art.1403[3]; Art.1407)
c. Contracts Infringing the Statute of Frauds (Art.1403[2] in rel.to the ECommerce Law
i. Necessity of Writing
• De Ouano vs.Republic, GR No.168770, 09 Feb 2011
• Shoemaker vs. La Tondena, GR No.L-45667, 09 May 1939
ii. Parol Evidence Rule (Art.1405-1406)
iii. Executory vs. Executed vs. Partially Executory Contracts
• Hrs.of Alido vs. Campano, GR No.226065, 29 Jul 2019
• Orduna vs. Fuentebella, GR No.176841, 29 Jun 2010
3. Effects
4. Remedies
D. Void/Inexistent Contracts (Art.1409-1422)
XI.
NATURAL OBLIGATIONS (Art.1423-1430)
A. Definition and Meanings: Rationale
B. Natural Obligations vs. Civil Obligations (Art.1423)
C. Kinds (Art.1424-1430)
18