Professional Documents
Culture Documents
Obligations and Contracts Case Updates (2005-2014)
Obligations and Contracts Case Updates (2005-2014)
OBLIGATIONS
GENERAL PROVISIONS
Ernesto Uypitching, et al. v. Ernesto Quiamco .................................................................................... 10
Lourdes Dela Cruz v. Court of Appeals ............................................................................................... 10
Department of Health v. HTMC Engineers Co. .................................................................................. 10
International Finance Corporation v. Imperial Textile Mills, Inc...................................................... 11
Sebastian Siga-An v. Alicia Villanueva................................................................................................. 11
Makati Stock Exchange, Inc., et al. v. Miguel V. Campos, substituted By Julia Ortigas Vda. De
Campos ...................................................................................................................................................... 12
Spouses Patricio and Myrna Bernales v. Heirs Of Julian Sambaan .................................................. 12
Vitarich Corporation v. Chona Losin .................................................................................................... 13
CBK Power Company Limited vs. Commissioner of Internal Revenue .......................................... 13
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Gilat Satellite Networks, Ltd. v. United Coconut Planters Bank General Insurance Co., Inc. ...... 19
Carlo F. Sunga v.Virjen Shipping Corporation, Nissho Odyssey Ship Management Pte. Ltd.,
And/Or Capt. Angel Zambrano ............................................................................................................ 20
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EXTINGUISHMENT OF OBLIGATIONS
PAYMENT OR PERFORMANCE
Jaime Biana v. George Gimenez............................................................................................................. 29
G & M (Phil.), Inc. vs. Willie Batomalaque ........................................................................................... 29
Abacus Securities Corporation v. Ruben U. Ampil ............................................................................ 30
Almeda v. Bathala Marketing Industries, Inc. ..................................................................................... 30
ASJ Corporation v. Evangelista ............................................................................................................. 30
Insular Life Assurance Company, Ltd. v. Toyota Bel-Air, Inc. ......................................................... 31
Dao Heng Bank, Inc. (Now Banco De Oro Universal Bank) v. Laigo............................................... 31
Royal Cargo Corporation v. DFS Sports Unlimited, Inc. ................................................................... 32
Allandale Sportsline, Inc. v. The Good Development Corporation.................................................. 32
Annabelle Dela Pea and Adrian Villareal v. The Court of Appeals and Rural Bank of Bolinao,
Inc. .............................................................................................................................................................. 32
D.B.T. Mar-Bay Construction, Incorporated v. Ricaredo Panes et al................................................ 33
Rockville Excel International Exim Corporation v. Spouses Oligario Culla and Bernardita
Miranda ..................................................................................................................................................... 33
Premiere Development Bank v. Central Surety & Insurance Company, Inc. ................................. 33
Cecilleville Realty and Service Corporation v. Acua ........................................................................ 34
DBT Mar-Bay Construction, Inc. vs. Panes .......................................................................................... 34
Manuel Go Cinco and Araceli S. Go Cinco v. Court Of Appeals, Ester Servacio and Maasin
Traders Lending Corporation ................................................................................................................ 35
Land Bank of the Philippines vs. Alfredo Ong .................................................................................... 35
Republic v. Thi Thu Thuy T. De Guzman ............................................................................................ 35
Dalton vs. FGR Realty and Development Corp................................................................................... 36
Elizabeth Del Carmen v. Sps. Sabordo.................................................................................................. 36
Erlinda Gajudo, Fernando Gajudo, Jr., Estelita Gajudo, Baltazar Gajudo And Danilo Arahan
Chua v. Traders Royal Bank ................................................................................................................... 36
Luzon Development Bank v. Enriquez ................................................................................................. 37
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Telengtan Brothers & Sons, Inc. v. United States Lines, Inc. and the Court of Appeals ................ 37
Simplicio A. Palanca v. Ulyssis Guides ................................................................................................ 37
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CONTRACTS
GENERAL PROVISIONS
Asian Construction and Development Corporation v. Tulabut....................................................... 48
Tanay Recreation Center and Development Corp. v. Catalina Matienzo Fausto and Anunciacion
Fausto Pacunayen .................................................................................................................................... 49
Litonjua v. Litonjua.................................................................................................................................. 49
Bortikey v. AFP Retirement and Separation Benefits System ........................................................... 49
GF Equity, Inc. vs. Arturo Valenzona ................................................................................................... 50
Tanay Recreation Center and Development Corp. v. Catalina Matienzo Fausto and Anunciacion
Fausto Pacunayen .................................................................................................................................... 50
Tanay Recreation Center and Development Corp. v. Catalina Matienzo Fausto and Anunciacion
Fausto Pacunayen .................................................................................................................................... 51
Sunace International vs. NLRC .............................................................................................................. 51
Greater Metropolitan Manila Solid Waste Management Committee v. Jancom Environmental
Corporation ............................................................................................................................................... 51
Roxas v. Zuzuarregui, Jr. ........................................................................................................................ 51
Bonifacio Nakpil v. Manila Towers Development Corp. ................................................................... 52
Xavierville III Homeowners Association, Inc., v. Xavierville Ii Homeowners Association, Inc., 52
William Golangco Construction Corporation v. Philippine Commercial International Bank...... 53
Spouses Anthony and Percita Oco v. Victor Limbaring ..................................................................... 53
Rolando Limpo v. Court of Appeals ..................................................................................................... 53
Caltex (Philippines), Inc., v. PNOC Shipping and Transport Corporation ..................................... 54
Mr. & Mrs. George R. Tan v. G.V.T Engineering Services, Acting through its Owner/Manager
Gerino V. Tactaquin ................................................................................................................................. 54
William Ong Genato vs. Benjamin Bayhon et al. ................................................................................ 54
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Vicenta Cantemprate et al. vs. CRS Realty Development Corporation et al. .................................. 54
National Power Corporation vs. Premier Shipping Lines, Inc. ......................................................... 55
Patricia Halaguea et al. vs. Philippine Airlines Incorporated ......................................................... 55
Sta. Lucia Realty & Development, Inc. vs. SPOUSES Francisco & Emelia Buenaventura............. 55
Sps. Isagani Castro and Diosdada Castro v. Angelina De Leon Tan, et. al., .................................. 56
Narvaez vs. Alciso ................................................................................................................................... 56
Herald Black Dacasin vs.Sharon Del Mundo Dacasin ........................................................................ 56
PNCC Skyway Traffic Management and Security Division Workers Organization (PSTMSDWO)
vs. PNCC Skyway Corporation ............................................................................................................. 57
Heirs of Mario Pacres, vs. Heirs of Cecilia Ygoa ............................................................................... 57
Heirs of Fausto C. Ignacio v. Home Bankers Savings and Trust Company .................................... 57
Spouses Ignacio F. Juico and Alice P. Juico v. China Banking Corporation .................................... 58
Sps. Benjamin Mamaril v. The Boy Scout of the Philippines ............................................................. 58
Star Two (SPV-AMC), Inc. v. Paper City Corporation of the Philippines ....................................... 58
Land Bank of the Philippines vs. Heirs of Spouses Jorja Rigor-Soriano and Magin Soriano ....... 59
Rodolfo G. Cruz and Esperanza Ibias v. Atty. Delfin Gruspe ........................................................... 59
Philippine National Bank vs. Spouses Enrique Manalo and Rosalinda Jacinto, et al. ................... 59
CONSENT
Dandoy v. Tongson.................................................................................................................................. 60
Navotas Industrial Corporation V. Cruz, et al..................................................................................... 61
Epifania Dela Cruz, substituted by Laureana V. Alberto v. Sps. Eduardo C. Sison and Eufemia S.
Sison ........................................................................................................................................................... 61
Perpetua vda. de Ape v. Court of Appeals and Genorosa Cawit Vda. De Lumayno .................... 62
Reynaldo Villanueva vs. Philippine National Bank............................................................................ 62
Gaudencio Valerio et. al v. Vicenta Refresca et. al. ............................................................................. 62
Heirs of Cayetano Pangan vs. Spouses Rogelio Perreras and Priscilla Perreras ............................ 62
Cornelia Baladad vs. Sergio A. Rublico and Spouses Laureano F. Yupano .................................... 63
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OBJECT OF CONTRACTS
Atty. Pedro M. Ferrer vs. Spouses Alfredo Diaz and Imelda Diaz ................................................... 67
CAUSE OF CONTRACTS
J.L.T. Agro Inc. v. Balansag..................................................................................................................... 68
Alvarez v. PICOP Resources .................................................................................................................. 68
FORM OF CONTRACTS
Manuel Mallari and Millie Mallari v. Rebecca Alsol .......................................................................... 69
Serafin Naranja et al. vs. Court of Appeals ......................................................................................... 69
REFORMATION OF INSTRUMENTS
Benny Go v. Eliodoro Bacaron ............................................................................................................... 69
INTERPRETATION OF CONTRACTS
Holy Cross of Davao College, Inc. vs. Holy Cross of Davao Faculty Union Kampi ................... 70
Agas vs. Sabico ......................................................................................................................................... 70
Berman Memorial Park, Inc. and Luisa Chong v. Francisco Cheng ................................................. 70
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Rosalina Tagle v. Court of Appeals, Fast International Corporation and/or Kuo Tung Yu Huang
.................................................................................................................................................................... 71
Martha R. Horrigan v. Troika Commercial, Inc................................................................................... 71
Aurelio P. Alonzo and Teresita A. Sison v. Jaime and Perlita San Juan .......................................... 71
Vicente Go v. Pura Kalaw, Inc. .............................................................................................................. 72
Sps. Alvaro v. Sps. Returban .................................................................................................................. 72
Ayala Inc. v. Ray Burton Corp ............................................................................................................... 72
Laureano T. Angeles v. Philippine National Railways (PNR) And Rodolfo Flores ....................... 73
Elenita Ishida and Continent Japan Co., Inc. v. Antusa de Mesa-Magno, Firmo de Mesa et.al. .. 73
Heirs of the Deceased Carmen Cruz-Zamora v. Multiwood International, Inc. ............................ 73
Antipolo Properties v. Nuyda ............................................................................................................... 74
Adriatico Consortium, Inc., et al. vs. Land Bank of the Philippines................................................. 74
Manila International Airport Authority v. Avia Filipinas International, Inc., ................................ 74
RESCISSIBLE CONTRACTS
Oliverio Laperal and Filipinas Golf & Country Club, Inc. v. Solid Homes, Inc. ............................ 75
C-J Yulo & Sons, Inc. v. Roman Catholic Bishop of San Pablo, Inc. .................................................. 75
Spouses Felipe and Leticia Cannu v. Spouses Gil And Fernandina Galang and National Home
Mortgage Finance Corporation .............................................................................................................. 75
Bienvenido M. Casino Jr. v. Court of Appeals ..................................................................................... 76
Pryce Corporation (Formerly Pryce Properties Corporation), v. Philippine Amusement And
Gaming Corporation ............................................................................................................................... 76
Coastal Pacific Trading Inc., v. Southern Rolling Mills, Co., Inc. et al. ............................................ 77
Pan Pacific Industrial Sales Co., v. Court of Appeals ......................................................................... 77
Laurencio Ramel, et.al. v. Daniel Aquino and Guadaluper Abalahin ............................................. 77
Union Bank of the Philippines v. Sps. Ong .......................................................................................... 77
Philippine Leisure and Retirement Authority v. Court of Appeals ................................................. 78
Uniwide Holdings, Inc. v. Jandecs Transportation Co., Inc............................................................... 78
Bonrostro v. Luna..................................................................................................................................... 79
Armand O. Raquel-Santos and Annalissa Mallari v. Court of Appeals and Finvest Securities Co.,
Inc. .............................................................................................................................................................. 79
Heirs of Sofia Quirong v. Development Bank of the Philippines ..................................................... 79
G Holdings, Inc., v. National Mines and Allied Workers Union Local 103 (NAMAWU)........ 80
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UNENFORCEABLE CONTRACTS
Spouses Mario and Elizabeth Torcuator v. Spouses Remigio and Gloria Bernabe and Spouses
Diosdado and Lourdes Salvador ........................................................................................................... 82
Banco Filipino Savings v. Diaz ............................................................................................................... 83
Lina Pealber vs. Quirino Ramos et al. ................................................................................................. 83
Ordua, et al. v. Fuentebella, et al. ........................................................................................................ 83
Municipality of Hagonoy, Bulacan vs. Dumdum, Jr. ......................................................................... 84
Rogelio Dantis, v. Julio Maghinang, Jr. ................................................................................................. 84
VOID OR INEXISTENT
Menchavez vs. Teves ............................................................................................................................... 84
Department of Health v. C.V. Canchela & Associates, Architects (CVCAA), in Association With
MCS Engineers Co., and A.O. Mansueto IV Electrical Engineering Services, and Luis Alina,
Sheriff IV, RTC, Manila ........................................................................................................................... 85
The Manila Banking Corporation v. Edmundo S. Silverio and The Court of Appeals,................. 85
Lao v. Republic of the Philippines and the Government Service Insurance System .................... 86
Potenciano Ramirez v. Ma. Cecilia Ramirez ........................................................................................ 86
Joaquin Villegas and Emma M. Villegas v. Rural Bank of Tanjay Inc............................................. 86
Land Bank of the Philippines v. Eduardo M. Cacayuran.................................................................. 87
Queensland-Tokyo Commodities, Inc. vs. George ............................................................................. 87
Anuel O. Fuentes and Leticia L. Fuentes vs. Conrado G. Roca ......................................................... 87
Domingo Gonzalo vs. John Tarnate, Jr. ................................................................................................ 87
OBLIGATIONS
CHAPTER 1. GENERAL PROVISIONS
Ernesto Uypitching, et al. v. Ernesto Quiamco
GR No. 146322, December 6, 2006
Corona, J.
ISSUE: Can an obligation to pay damages arise from an abuse of a right which is exercised to the
prejudice or injury of another person as when a corporation seized a motorcycle with the assistance
of policemen without a search warrant or order?
DOCTRINE: A blatant disregard for the lawful procedure for the enforcement of its right, to the
prejudice of respondent violated the law as well as public morals, and transgressed the proper norms
of human relations. Article 19, also known as the principle of abuse of right, prescribes that a
person should not use his right unjustly or contrary to honesty and good faith, otherwise he opens
himself to liability. There is an abuse of right when it is exercised solely to prejudice or injure
another. The exercise of a right must be in accordance with the purpose for which it was established
and must not be excessive or unduly harsh; there must be no intention to harm another. Otherwise,
liability for damages to the injured party will attach.
Lourdes Dela Cruz v. Court of Appeals
G.R No. 139442, December 6, 2006
Velasco, Jr. J.:
ISSUE: Can a person under a contract of lease possess such land by tolerance even after the
expiration of the contract of lease and after a demand to vacate.
DOCTRINE: Obligations arising from contracts have the force of law between the contracting
parties and should be complied with in good faith. Thus, initially petitioner as lessee is the legal
possessor of the subject lot by virtue of a contract of lease. When fire destroyed her house, the
Reyeses considered the lease terminated. It has been held that a person who occupies the land of
another at the latters tolerance or permission, without any contract between them, is necessarily
bound by an implied promise that he will vacate upon demand, failing which a summary action for
ejectment is the proper remedy against them.
Department of Health v. HTMC Engineers Co.
G.R. No. 146120. January 27, 2006
Chico-Nazario, J.
ISSUE: Can a perfected contract be renounced unilaterally?
DOCTRINE: No. A contract properly executed between parties continues to be the law between
said parties and should be complied with in good faith. There being a perfected contract, DOH
cannot revoke or renounce the same without the consent of the other party. Just as nobody can be
forced to enter into a contract, in the same manner, once a contract is entered into, no party can
renounce it unilaterally or without the consent of the other. It is a general principle of law that no
one may be permitted to change his mind or disavow and go back upon his own acts, or to
proceed contrary thereto, to the prejudice of the other party. As no revision to the
original agreement was ever arrived at, the terms of the original contract shall continue to govern
over both the HTMC and the DOH with respect to the infrastructure projects as if no amendments
were ever initiated. In the absence of a new perfected contract between HTMC and DOH, both
parties shall continue to be bound by the stipulations of the original contract and all its natural
effects.
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SECTION 5. COMPENSATION
Mavest (USA) Inc. and Mavest Manila Liaison Office vs. Sampaguita Garment Corporation
G.R. No. 127454. September 21, 2005
Garcia, J.:
ISSUE: In compensation, do the rights of creditors or obligations of debtors need to spring from
one and the same contract?
DOCTRINE: No. For compensation to validly take place, the governing Civil Code provisions
require the concurrence of well-defined conditions. At its minimum, compensation presupposes
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SECTION 6. NOVATION
Philippine Savings Bank v. Sps. Rodelfo Malanac Jr.
G.R. No. 145441, April 26, 2005
Ynares-Santiago J:
ISSUE: Is moral damages proper in case a bank misrepresents that they would accept a request of a
party and then does an act that is legal under the circumstances?
DOCTRINE: Yes. While the bank had the legal basis to withhold the release of the mortgaged
properties, nevertheless, it was not forthright and was lacking in candor in dealing with Maalac. In
accepting the PCIB Check, the bank knew fully well that the payment was conditioned on its
commitment to release the specified properties. At the first instance, the bank should not have
accepted the check or returned the same had it intended beforehand not to honor the request of
Maalac. In accepting the check and applying the proceeds thereof to the loan accounts of Maalac
and Galicia, the former were led to believe that the bank was favorably acting on their request. In
justifying the award of moral damages, the Court of Appeals correctly observed that there is the
unjustified refusal of the appellant bank to make a definite commitment while profiting from the
proceeds of the check by applying it to the principal and the interest of the Galicias and plaintiffappellants.
Isaisas F. Fabrigas and Marcelina R. Fabrigas v. San Francisco del Monte, Inc.
G.R. No. 152346. November 25, 2005
Tinga, J.:
ISSUE: Is there a novation when at first, there is a contract to sell which was rescinded but
subsequently a second contract to sell was created to replace the first contract?
DOCTRINE: Novation, in its broad concept, may either be extinctive or modificatory. It is
extinctive when an old obligation is terminated by the creation of a new obligation that takes the
place of the former; it is merely modificatory when the old obligation subsists to the extent it
remains compatible with the amendatory agreement. An extinctive novation results either by
changing the object or principal conditions (objective or real), or by substituting the person of the
debtor or subrogating a third person in the rights of the creditor (subjective or personal). Under this
mode, novation would have dual functionsone to extinguish an existing obligation, the other to
substitute a new one in its placerequiring a conflux of four essential requisites: (1) a previous valid
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CONTRACTS
CHAPTER 1. GENERAL PROVISIONS
Asian Construction and Development Corporation v. Tulabut
G.R. No. 161904. April 26, 2005
Callejo, Sr., J.
ISSUE: May the principle of estoppel be applied in determining whether the obligation
contemplated in the contract had already been completed?
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Solid
Waste
Management
Committee
v.
Jancom
ISSUE: Can a party revoke a perfected contract without the consent of the other?
DOCTRINE: No. From the moment of perfection, the parties are bound not only to the
fulfillment of what has been expressly stipulated but also to all the consequences which, according
to their nature, may be in keeping with good faith, usage, and law. The contract has the force of law
between the parties and they are expected to abide in good faith by their respective contractual
commitments, not weasel out of them. Just as nobody can be forced to enter into a contract, in the
same manner, once a contract is entered into, no party can renounce it unilaterally or without the
consent of the other.
Roxas v. Zuzuarregui, Jr.
G.R. No. 152072, January 31, 2006
Chico-Nazario, J.:
ISSUE: In the contract, the petitioners offered to be the legal representatives of the petitioner in the
expropriation proceeding. In return, contingency fees shall be paid. Is there a valid and binding
contract between the parties?
DOCTRINE: Under Article 1318 of the Civil Code, there are three essential requisites which must
concur in order to give rise to a binding contract: (1) consent of the contracting parties; (2) object
certain which is the subject matter of the contract; and (3) cause of the obligation which is
established.
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SECTION 1. CONSENT
Dandoy v. Tongson
G.R. No. 144652 December 16, 2005
Austria-Martinez, J.
ISSUE: May a contract to transfer rights be null and void for failure to obtain the consent of the
government?
DOCTRINE: Yes. Section 29 of the Commonwealth Act 141 or the Public Land Act provides in
part: After the cultivation of the land has been begun, the purchaser, with the approval of the
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