OBLIGATIONS AND CONTRACTS

Atty. Kirk D. Avestruz

Philippine Law School
2nd Semester, AY 2019-2020

Course Syllabus1

I.
Obligations

I. Concept
A. Definition
B. Elements

Rabuya, Chapter 1
Article 1156, NCC

II. Sources of Obligation

A. Law
B. Contracts, Article 1305
C. Quasi-Contracts, Article 2142
D. Acts or omissions punishable by law
E. Quasi-Delicts, Article 2176
Articles 2144 to 2153, 2154 to 2163, and 2164 to 2175

Rabuya, Chapter 2
Articles 1157 to 1162, NCC

Barredo vs. Garcia, 73 Phil. 607 (1942)

Mendoza vs. Arrieta, 91 SCRA 113 (1975)
PSBA vs. CA 160 SCRA 315 (1988)
Amadora vs. CA 160 SCRA 315 (1988)

III. Civil and Natural Obligations

A. Distinction as to enforceability and basis
B. Legal Effects of Natural Obligation
C. Instances of Natural Obligations

Rabuya, Chapter 3
Articles 1423 to 1430, 1956, 1960, 1236, 1311; See R.A. 6809
IV. Nature and Effects of Obligations
1
The Course Outline follows the outline of Prof. Elmer T. Rabuya’s Obligations and Contracts and Prof.
Eduardo A. Labitag’s Syllabus on Obligations and Contracts.
 A. Real and Personal Obligations
a. Specific and Generic Obligations
b. Positive and Negative Obligations
B. Accessory Obligations

Rabuya, Chapter 4
Articles 1163 to 1178, 1244 to 1246; 1460
Philippine National Construction Corp. vs. CA, G.R. No. 116896, 5 May 1997
Francisco vs. Chemical Bulk Carriers, G.R. No. 193577, 7 September 2011
San Lorenzo Development Corp vs. CA, G.R. No. 124242, 21 January 2005

V. Breach of Obligations
A. Concept, Articles 1169 and 1170
a. Substantial Breach
b. Casual Breach
Guanio vs. Makati Shangri-la Hotel, G.R. No. 190601, 7 February 2011
Song Fo vs. Hawaiian Phils., 47 Phil. 821
Velarde vs. Raymundo, 361 SCRA 56 (2001)
Maglasang vs. Northwestern University, 694 SCRA 128 (2013)

B. Modes of Breach
a. Absolute Failure or Refusal to Perform, Section 10 of Rule 39, Rules of Court
b. Fraud (dolo) in the performance of the obligation, Article 1171
i. dolo incidente
ii. dolo causante
Woodhouse vs. Halili, 93 Phil. 526 (1953)
Legaspi Oil Co. vs. CA, G.R. No. 96505, 1 July 1993
iii. Non-waiver of fraud

c. Negligence, Article 1172; see also Article 2176

i. dolo and culpa, distinction and equivalence
Legaspi Oil Co. vs. CA, G.R. No. 96505, 1 July 1993
Nogales vs. Capitol Medical Center, G.R. No. 142625, 19 December 2006
ii. culpa aquiliana
iii. culpa contractual
Carriaga vs. Laguna Tayabas, G.R. No. l-11037, 29 December 1960
Sps. Batal vs. Sps. San Pedro, G.R. No. 164601, 27 September 2006.
Calalas vs. CA, 332 SCRA 356 (2000)
Cangco vs. Manila Railroad, G.R. No. L-12191, 14 October 1918

iv. culpa; standard of care, Articles 1173, 1163; see also Article 2201
Crisostomo vs. CA, G.R. No. 138334, 25 August 2003
Mindanao Terminal vs. Phoenix Assurance, G.R. No. 162467, 8 May 2009
 G.V. Florida Inc. vs. Heirs of Rommeo L. Batung Jr., 772 SCRA 579 (2015)
Sicam vs. Jorge, 529 SCRA 443.

d. Contravention of the Tenor of the Obligation

Arrieta vs. NARIC, G.R. No. 15645, 31 January 1964
Chavez vs. Gonzales, 32 SCRA 547 (1970)
Telefast vs. Castro, 158 SCRA 445 (1988)

e. Delay of Default (Mora), Article 1169

i. Concept
ii. Mora Solvendi (ex re, ex persona)
1. Requisites
2. Exceptions
3. Effects
iii. Compensation Morae
1. Requisites
iv. Mora Accipiendi, see also Article 1268
1. Requisites

Santos Ventura Hocorma vs. Santos, G.R. No. 153004, 5 November 2004
Raquel Santos vs. CA, 592 SCRA 169 (2009)
RCBC vs. CA, 305 SCRA 449 (1999)
Titan-Ikeda Construction vs. Primetown Property, 544 SCRA 466 (2008)
Cetus Development Inc. vs. CA, 176 SCRA 72 (1989)
Maybank Phils. Vs. Tarrosa, 772 SCRA 670 (2015)
Lorenzo Shipping Corp. vs. BJ Marthel International, 443 SCRA 163 (2004)
Eastern Shipping Lines vs. CA, 234 SCRA 78; see BSP Circular No. 799 (2013)
Autocorp Group vs. Intra Strata Assurance, 556 SCRA 250 (2008)
Megaworld Properties vs. Majestic Finance, 777 SCRA 37 (2015)

C. Fortuitous Event
a. Concept
b. Casto Fortuito and Force Majeure
c. Requisites and Effects
d. Exceptions to Non-Liability in case of Fortuitous Event

Metro Concast Steel Corp. vs. Allied Bank Corp., 711 SCRA 479 (2013)
Asset Privatization Trust vs. T.J. Enterprises, G.R. No. 167195, 8 May 2009
Nakpil and Sons vs. CA, 144 SCRA 597 (1986)
Sps. Larrobis vs. Philippine Veterans Bank, G.R. No. 135706, 1 October 2004
Yobido vs. CA, 281 SCRA 1 (1997)
Co. vs. CA, 291 SCRA 111 (1998)
 D. Usurious Transactions
a. Concept
b. Payments of Installments
c. Payment of Interests

Eastern Shipping Lines vs. CA, 234 SCRA 78; see BSP Circular No. 799 (2013)
Nakar vs. Gallery Frames, 703 SCRA 440 (2013)

E. Remedies, Article 1177

a. Action for Performance, Articles 1165, 1167, 1168, 1244
b. Action for Damages, Article 1170
c. Action for Rescission, Articles 1191, 1192
d. Exhaustion of Properties
e. Accion Subrogatoria, requisites
f. Accion Pauliana, requisites

Adorable vs. CA, 319 SCRA 200 (1999)

Khe Hong Cheng vs. CA, 355 SCRA 701 (2001)
Metropolitan Bank vs. Int’l Exchange Bank, 655 SCRA 263 (2011)

Rabuya, Chapter 5

VI. Kinds of Obligations (Articles 1179 to 1230)

A. Pure Obligations, Article 1179

B. Conditional Obligations, Articles 1179, 1181
a. Concept
b. Distinguished from Term; see also Article 1180
c. Kinds of Conditions
i. Suspensive Condition, Articles 1179, 1181, 1187, 1188
1. Effects and rights of creditor and debtor before fulfillment of
condition Articles 1187 and 1188
2. Rules in case of loss, deterioration, or improvement, Articles 1189
and 1190
3. Constructive fulfillment of suspensive condition, Article 1186

Gaite vs. Fonacier, 2 SCRA 830 (1961)

Catungal vs. Rodriguez, 646 SCRA 130 (2011)
Romero vs. CA, 250 SCRA 223 (1995)
Insular Life Assurance vs. Young, 424 Phil. 675 (2002)

ii. Resolutory Condition, Article 1181

1. Effects before the fulfillment of condition, Articles 1179
 2. Effects after fulfillment of condition, Article 1190, in relation to
Article 1187; see also Article 1191
3. Rules in case of loss, deterioration, or improvement, Article 1190

Parks vs. Province of Tarlac, 49 Phil. 142 (1927)

Central Philippine University vs. CA, 264 SCRA 511 (1995)

iii. Potestative, casual, and mixed, Article 1182; see Article 1180
1. Concepts
2. Effects

Catungal vs. Rodriguez, 646 SCRA 130 (2011)

Osmena vs. Rama, 14 Phil. 999 (1909)
Hermosa vs. Langora, 93 Phil. 971 (1953)

iv. Possible and Impossible Conditions, Article 1183

1. Concept
2. Effect

Roman Catholic Archbishop of Manila vs. CA, 198 SCRA 300 (1991)

v. Positive and Negative Conditions, Articles 1184 and 1185

1. Concept
2. Effect