Sinaon v. Sorongon, 136 SCRA 407

Adamson University
College of Law
Obligations and Contracts

Course Outline1*
Atty. Florian Kim P. Dayag
2nd Semester, AY 2019-2010
Course Schedule: Monday, 6:00 p.m. to 9:00 p.m.; Saturday, 2:00 p.m. to 4:00 p.m.
Course Assessment: Recitation 20%
Midterm Exam 30%
Final Exam 50%
Prescribed Textbook: Tolentino, Civil Code of the Philippines, Vol. IV
Contact Information: fpdayag@up.edu.ph
INTRODUCTION
A. CourseOverview
B. CommonLawTraditionandtheCivilLawTradition
Part One: PRESCRIPTION
A. General Provisions
1. Definition (1106)
⮚ Prescription- the acquisition and loss of a right through lapse
of time under the conditions laid down by law
▪ Sinaon v. Sorongon, 136 SCRA 407

a. Subject of prescription (1113, 1116)
⮚ Under article 1113 All things within the commerce of man is
susceptible of prescription unless otherwise provided. The
property of the State not patrimonial in character shall not be
an object of prescription.
⮚ Under article 1116 Prescription already running before the
effectivity of this Code shall be governed by laws previously in
force, but since the time this Code took effect the entire period
herein required prescription should elapse, the present Code
shall be applicable, even though by the former laws a longer
period might be required.
▪ Lovina v. Moreno, 9 SCRA 557

▪ Republic v. CA, 131 SCRA 532
2. Kinds
1* Parts II to IV are heavily based on the course outline of Prof. Eduardo Labitag, UP Law.
2
Course Outline
a. Acquisitive - the acquisition of a right through lapse of time under the
conditions laid down by law
b. Extinctive - the loss of a right through lapse of time under the conditions laid
down by law
▪ Morales v. CFI of Misamis Occidental, 97 SCRA 872
2. Vis-à-vis Laches – LACHES - the failure or neglect, for an unreasonable and
unexplained length of time, to do, that which, by exercising due diligence, could or
should have been done earlier.
PRESCRIPTION LACHES
Concerned with the facts of delay Concerned with effects of delay
A matter of time A question of inequity of permitting a
claim to be enforced. This inequity being
founded on some change of condition of
the property of the relation of the parties.
Statutory Not Statutory
Law Equity
Based on fixed time Not based on fixed time
Note: Prescription there was a definite time (4 years, 10 years etc), that when such
time lapse someone may acquire or loss an ownership or other real rights.
In laches- concerned with the effect of the delay, in which once a person delays in
asserting his right, he may loss that opportunity or may no longer to assert such right
because of his failure or negligence for an unreasonable or unexplainable period of
time.
Prescription is concerned with the fact of delay while Laches is concerned with the
effects of delay.
▪ Z.E. Lotho, Inc. v. Ice and Cold Storage, 3 SCRA 744
▪ Catholic Bishop of Balanga v. CA, G.R. No. 112519 November 14, 1996
4. Who may acquire by prescription (1107, 1110, 1111)
Article 1107
- those persons may acquire property rights through legal modes may acquire
prescription. Minors and incapacitated person may acquire prescription through
themselves, their parents, guardian or legal representative.
Article 1110
- Prescription, acquisitive or extinctive, may run against or in favor or a married
woman.
Article 1111
- Co-proprietor and co-owner. Prescription obtained by co-proprietor and co-
owner shall benefit the other.
a. Persons exempt (1108) (prescription do not run if in 1-3 there was no rep.)
Under 1108 prescription runs against the following:
1. Minors and incapacitated person who has parents, guardian, legal
representative.
2. Absentee who has an administrator either appointed by them or by
the Court.
3
Course Outline
3. Person living abroad who has a manager or administrator
4. Juridical person except the State and its subordinate.
▪ Vda. De Alberto v. CA, 173 SCRA 436
▪ Republic v. PNB, 13 SCRA 24
b. Between husband, wife, children and guardian (1109, Family Code 57, 47, 170)
▪ Pacio v. Billion, 1 SCRA 384
Art. 1109 Prescription does not run between husband and wife neither
prescription run between parents and their children, during the minority or
insanity of the latter and between guardian and ward during the
continuation of the guardianship
5. Renunciation (1112)
▪ Development Bank of the Philippines v. Adil, 161 SCRA 307
Article 1112 Prescription is deemed to have tacitly renounced when the renunciation
results from acts which imply the abandonment of the right acquired.
a. Effect on creditors and interested third persons (1114)

6. Applicability to specials laws (1115)
Article 1115 Special Law should matter versus the General Law
▪ Callanta v. Carnation Philippines, 145 SCRA 268
B. Prescription of Ownership and Other Real Rights
1. Manner; acquisitive prescription

Requisite of Acquisitive Prescription
1. capacity to acquire by prescription;
2. a thing capable of acquisition by prescription;
3. possession of the thing under certain conditions, and
4. lapse of time provided by law.
a. Ordinary – requires the possession of things in good faith, and with just title for
the time fixed by law.
▪ Godinez v. CA, 135 SCRA 351
b. Extraordinary- requires the possession of things in bad faith, and without just
title for the time fixed by law.
2. Possession (1118)
Article 1118
Possession has to be in concept of an owner, public, peaceful and uninterrupted.
For the claim of acquisitive prescription to prosper, possession of the property must be in
the concept of owner, when we say in concept of an owner the person has the
dominion over the property.
▪ Ramirez v. CA, 144 SCRA 292

▪ Republic v. CA, 146 SCRA 15
a. Through license or tolerance (1119)
Article 1119
Acts of possessory in character executed in virtue of license or by mere tolerance of
the owner shall not be available for the purpose of possession.
4
Course Outline
License- is the positive act of the owner in favor of the holder of the thing
Tolerance- is the passive acquiescence of the owner to acts being performed by
another which appear to be contrary to the rights of the former.
▪ Coronado v. CA, 191 SCRA 814
b. Interruption (1120)
Article 1120 Possession is interrupted for the purpose of prescription, naturally or
civilly.
a. Natural (1121, 1122)
Article 1121 Possession is interrupted naturally when through any cause it

should cease for more than one year.
The old possession is not revived if a new possession should be exercised by
the same adverse claimant.
b. Civil (1123, 1124, 1136)

General Rule
Art. 1123.
Civil interruption is produced by judicial summons to the possessor.
Art. 1124 Judicial summons shall be deemed not to have been issued and
shall not give rise to the interruption:
1. If it should void for lack of legal solemnities;

2. If the plaintiff should desist from the complaint or should allow the
proceedings to lapse;
3. If the possessor should be absolved from the complaint.
In all these cases, the period of the interruption shall be counted for the
prescription
Article 1136
Possession in wartime, when the civil courts are not open, shall not
be counted in favor of the adverse claimant
c. Possessor’s recognition of owner’s right (1125)

Article 1125
Any express or tacit recognition which the possessor may make of the
owner’s right also interrupts the possession.
▪ Corpus v. Padilla, 5 SCRA 814

▪ Dinoso v. CA, 7 SCRA 666
d. When property is titled (1126)
Article 1126 Against a title recorded in the Registry of Property, ordinary
prescription of ownership or real rights shall not take place to the prejudice of a
third person, except in virtue of another title also recorded; and the time shall
begin to run from the recording of the latter.
As to lands registered under the Land Registration Act, the provision s of that
special law shall govern
When the third party acquired the property
1. That the acquisition is by onerous title;
5
Course Outline
2. That the acquisition is from one who, according to the Registry, can
transmit title;
3. That the acquisition is registered;
4. That such third person has no knowledge of the prescription
▪ Dimayuga v. CA, 129 SCRA 110
▪ Reyes v. CA, 48 SCRA 113
3. Good faith (1127, 1128)
Article 1127 The good faith of the possessor consists in the reasonable belief that the
person from whom he received the thing was the owner thereof, and could transmit his
ownership
Good faith- a well-founded belief that the person from whom title was received
was himself the owner of the land, with the right to convey.
▪ Negrete v. CFI of Marinduque, supra

▪ Reyes v. CA, 258 SCRA 651
a. Stolen properties (1133)
Article 1133
Movables possessed through a crime can never be acquired through prescription by
the offender
▪ Tan v. CA, 195 SCRA 35
4. Just title (1129-1131)

Article 1129
For the purpose of prescription, there is a just title when the adverse claimant
came into possession of the property through one of the modes recognized by law for
the acquisition of ownership or other real rights, but the grantor was not the owner or
could not transmit any right.
Just title- is an act which would have actually transferred ownership if the grantor had
been the owner
A title of the possessor must be just, true, valid and proved.
▪ Doliendo v. Biarnesa, 7 Phil. 232

▪ Solis v. CA, 176 SCRA 678
5. Period
a. Movables (1132)
Movables- prescribed for 4 years, uninterrupted, good faith Personal
Property- prescribed for 4 years uninterrupted, good faith
b. Immovables (1134, 1135, 1137)

Immovable property- acquired by ordinary prescription (having just title and in good
faith) for 10 years
Article 1135 In case the adverse claimant possess by mistake an area greater, or
less, than that expressed in his title, prescription shall be based on the
possession
6
Course Outline
▪ Parcotilo v. Parcotilo, 12 SCRA 435
▪ Heirs of Amarante v. CA, 185 SCRA 585
c. Computation (1138) (tacking)

Article 1138. In the computation of time necessary for prescription thfollowing rules
shall be observed
1. The present possessor may complete the period necessary for
prescription by tacking his possession to that of his grantor or
predecessor in interest;
2. It is presume that the present possessor who was also the possessor at a
previous time, has continued to be in possession during the intervening
time, unless there is proof to the contrary;
3. The first day shall be excluded and the last day included.
▪ South City Homes v. Republic, 185 SCRA 693
C. Prescription of Actions
1. Manner (1139)
▪ Espanol v. Philippine Veterans Administration, 137 SCRA 314
Article 1139 Actions prescribe by the mere lapse of time fixed by law.
Prescription of action or limitation actions- refers to the time within which an action may be
brought or some act done.
Statutes of limitation- are acts limiting the time within which actions shall be brought.
3. Period (1140-1149)
Article Action Object Start of CountPrescriptive Period
1140 Action to Recover Movables From the loss of the 8 years
possession
1141 Real Actions Immovables 30 years
1142 Mortgage action Mortgage 10 years
1144 Action must be brought
- Written contract From the right of 10 years
-Obligation created by law action
-Judgment accrues
1145 Actions must be - Oral contract 6 years
commenced -quasi-contract
1146 Action must be instituted-injury on the rights of the 4 years
plaintiff
-quasi-delict
1147 Action must be filed -forcible entry and detainer 1 year
-for defamation
1149 Action must be brought
All other actions not fixed in this
From the time the 5 years
Code or in other laws right of action
accrues
Article 1143
The following rights, among others specified elsewhere in this Code, are not extinguished by
prescription
7
Course Outline
1. To demand a right of way, regulated in article 649;
2. To bring an action to abate a public or private nuisance
▪ Tan v. CA, 195 SCRA 355

▪ Dira v. Tanega, 33 SCRA 479
▪ DBP v. Tomeldan, 101 SCRA 171
▪ Espanol v. Philippine Veterans Administration, supra
▪ Municipality of Opon v. Caltex. 22 SCRA 755
▪ Callanta v. Carnation Philippines, supra
▪ Kramer v. CA, 178 SCRA 518
▪ Coca-Cola Bottlers v.CA, 227 SCRA 292
▪ Vda. De Borromeo v. Pogoy, 126 SCRA 217
▪ Tolentino v. CA, 162 SCRA 66
a. When prescription begins (1150-1153)
Article 1150
-Prescriptions shall be counted from the day they may be brought
Cause of Action- a cause of action arises when that which should have been done is
not done, or that which should not have done is done.
Elements of a good cause of action

1. Existence of a legal right in the plaintiff;
2. Corresponding legal duty in the defendant;
3. Violation or breach of that right or duty with consequential injury or damage
to the plaintiff; and
4. Maintain an action for appropriate relief.
⮚ The moment the breach of right or duty occurs, then the right
of action accrues, and the action can be legally instituted; from
the moment, therefore, the period of prescription of action
begins to run.
-when the breach of right occurs, right of action accrues and period for prescription
runs
⮚ In suspensive condition, prescription runs only from the

happening of the condition.
⮚ When period was specified when will a debt should be paid

and there was a delay, prescription will run from the last day of
the period the debt should be paid.
⮚ Action is based on fraud or deceit, the period of prescription

will begin to run on the date of the discovery of the fraud or
deceit.
⮚ Quasi-delict prescriptive period starts from the day the quasi-

delict occurred or was committed.
⮚ Partition and reconveyance based on implied or constructive

trusts, the time of prescription begins to run from the date of
8
Course Outline
issuance of the original certificate of title because the
registration of an instrument in the office of Register of Deeds
constitutes constructive notice to the whole world. The period
begins to run from the time a possessor was made aware of a
claim adverse to his own.
⮚ The period of prescription of the right of the nearest relative as

intestate heir to some properties, to question the validity of a
purported will or donation mortis causa made by the decedent,
does not commence to run until a third persons claim a right
under such instrument where in the meantime the intestate
heir has been in possession of the properties and there was
no occasion to seek judicial annulment of the instrument.
⮚ The prescriptive period within which to bring an action to set

aside a simulated written deed of pacto de retro sale starts
only when the alleged vendees made known their intention by
overt acts not to abide the true agreement, and not from the
date of execution of the contract.
⮚ Article 1152 The period for prescription of actions to demand

the fulfillment of obligation declared by a judgment
commences from the time the judgment became final
⮚ Article 1153 The period for prescription of action to demand

accounting runs from the day the persons who should render
the same cease in their functions.
⮚ The period for the action arising from the result of the
accounting runs from the date when said result was
recognized by agreement of the interested parties.
▪ Dira v. Tanega, supra
b. Fortuitous event; effect (1154)
Article 1154
The period during which the obligee was prevented by a fortuitous event from the
enforcing his right is not reckoned against him.
⮚ The statute of limitations is suspended by war, rebellion or

insurrection only when the regular course of justice is
interrupted to such an extent that courts cannot be kept open
and are not within the reach of the people.
▪ Provident Savings Bank v. CA, 222 SCRA 125
▪ Tan v. CA, supra
c. Interruptions (1155)
Article 1155
9
Course Outline
The prescription of actions is interrupted when they are filed before the court, when
there is written extra-judicial demand by the creditors, and when is any written
acknowledgement of the debt by the debtor.
1. Prescription of actions are filed before the court

2. There is a written extra-judicial demand by the creditors
3. Written acknowledgement of the debt of the debtor.
⮚ When the prescription is interrupted by a judicial demand, the

full period for the prescription must be reckoned from the
cessation of the interruption.
▪ Ledesma v. C, 224 SCRA 175

▪ Cabrera v. Tiano, 8 SCRA 542
▪ Olympia International v. CA, 180 SCRA 353
▪ PNB v. Osete, 24 SCRA 63
▪ Ramos v. Condez, 20 SCRA 1146
Part Two: OBLIGATIONS
⮚ Article 1156 An obligation is a juridical necessity to give, to do
or not to do
⮚ Obligation- is a juridical relation whereby a person (called
creditor) may demand from another (called debtor) the
observance of a determinate conduct and, in case of breach,
may obtain satisfaction from the assets of the latter
2. Elements
a. ActiveSubject-has the power to demand known as the obligee or creditor
b. PassiveSubject- bound to perform the prestation known as the debtor
c. ObjectorPrestation- object of the obligation
d. EfficientCauseorJuridicalTie- by reason of which the debtor in favor of
the creditor to perform the prestation
3. Kinds as to basis and enforceability (1423-1430, 1139-1155)
a. Civil Obligations (1423)
Civil Obligation- juridical obligations which are apparently are in
conformity with positive law but are contrary to juridical principles and
susceptible of being annulled.
b. Natural Obligations (1423)
Natural Obligations- which are sanctioned by any action but have a
relative juridical effect.
- An obligation without a sanction susceptible of voluntary
performance, but not through compulsion by legal means
Conditions of Natural Obligations

1. that there be a juridical tie between two parties
2. that this tie is not given effect by law.
10
Course Outline
Perfect and Imperfect Obligation
● Perfect – is one where there is a determination of the
creditor, debtor and the nature and value of the obligation
● Imperfect- it is not determined.
i. Examples (1424-1430)
Article 1424
When a right to sue upon a civil obligation has lapsed by extinctive
prescription, the obligor who voluntarily performs the contract
cannot recover what he has delivered or the value of the service
he has rendered.
Article 1425
When without the knowledge or against the will of the debtor, a third
person pays a dent which the obligor is not legally bound to pay
because the action thereon has prescribed, bit the debtor later
voluntarily reimburse the third person, the obligor cannot recover
what he has paid
Article 1426
When the minor between eighteen and twenty-one years of age who has
entered into a contract without the consent of the parent of
guardian, after the annulment of the contract voluntarily returns
the whole thing or price received, notwithstanding the fact he has
not been benefited thereby, there is no right to demand the thing
or price thus returned.
Article 1427 When a minor between eighteen and twenty-one years of
age, who has entered into a contract without the consent of the
parent or guardian, voluntarily pays a sum of money or delivers a
fungible thing in fulfillment of the obligation, there shall be no right
to recover the same from the obligee who has spent or consumed
it in good faith.
Article 1428 When, after an action to enforce a civil obligation has failed,
the defendant voluntarily performs the obligation, he cannot
demand the return of what he has delivered or the payment of the
value of the service he has rendered.
Article 1429 When a testate or intestate heir voluntarily pays a debt of the
decedent exceeding the value of the property which he received
by will or by the law of intestacy from the estate of the deceased,
the payment is valid and cannot be rescinded by the payer
Article 1430 When a testate or intestate heir voluntarily pays a debt of the
decedent exceeding the value of the property which he received
by will or by the law of intestacy from the estate of the deceased,
the payment is valid and cannot be rescinded by the payer.
ii. Distinguished from Moral Obligations

Moral Obligation- which are duties of conscience completely
outside of the field of law
MORAL NATURAL
No juridical tie There is a juridical tie
An act of pure liberality, which The performance of by the
springs blood, affection or debtor is a legal fulfillment of
11
Course Outline
benevolence the obligation, not an act of
generosity
Entirely within the domain of Is in the domain of law, being a
morals true obligation, with a legal tie
between creditor and debtor but
which because of certain
causes cannot be enforced in
the courts.
In existent from the juridical The consequence of juridical
point of view tie is that they produce certain
civil effects
▪ Villaroel v. Estrada, 71 Phil 140

▪ Ansay v. NDC, 107 Phil 997
▪ DBP v. Confessor 161 SCRA 307
iii. Conversion to Civil Obligation
● Natural Obligation can be converted to into civil obligations by
novation. Civil obligation such as those which have prescribed,
can again be converted into civil obligations by confirmation or
ratification.
4. Sources of Civil Obligations (1157)
Article 1157 Obligations arise from
1. Law;
2. Contracts;
3. Quasi-contracts;
4. Acts or omissions punished by law; and
5. Quasi-delicts
a. Law (1158)
Article 1158
Obligations derived from law are not presumed. Only those expressly determined in
this Code or in special laws are demandable, and shall be regulated by the
precepts of the law which establishes them; and as to what has not been
foreseen, by the provisions of this Book.
> The law cannot exist as a source of obligations, unless the acts to which its
principles may be applied exists. But once those acts or facts exist, the
obligations arising therefrom by virtue of express provisions of the law are
entirely independent of the agreement of the parties. Such obligations and
their correlative rights are governed by the law by which they are created.
Note:
1. There should be the existence of acts or facts.
2. The provisions of the law are entirely independent of the agreement of the
parties.
3. Obligations and their correlative rights are governed by the law by which
they are created.
b. Contracts (1159, 1305)
Article 1159 Obligations arising from contracts have the force of law between the
contracting parties and should be complied with in good faith.
Article 1305
12
Course Outline
A contract is meeting of minds between two persons whereby one binds himself, with
respect to the other, to give something or to render some service.
- Known as the Principle of autonomy of will the parties can stipulate anything The
terms of the contract should be, therefore, not be contrary to law, morals,
good customs, public policy, and public order.
c. Quasi-contracts (1160, 2142)
Article 1160 Obligations derived from quasi-contracts shall be subject to the
provisions of Chapter 1, Title XVII, of this book.
Quasi-contract- is a juridical relation which arises from certain lawful, voluntary,

and unilateral acts, to the end that no one may be unjustly enriched or benefited
at the expense of another.
The act giving rise to quasi-contract must be lawful, thereby distinguishing it from
crime in which he act or omission is unlawful; it must be voluntary, thus differentiating it
from quasi-delict which is based on fault or negligence or mere lack of foresight; and it
must be unilateral, to distinguish it from contract it which there are two parties who come
to an agreement.
▪ Cruz v. Tuazon & Co., 76 SCRA 543

i. Negotiorum Gestio (2144)- juridical relation which takes place
when somebody takes charge of the agency or management of
the business or property of another without any power form the
latter. The owner shall reimburse the gestor for the necessary and
useful expenses incurred by the latter, and for the damages
suffered by him in the performance of his functions.
▪ Adille v. CA, 157 SCRA 455
ii. Solutio Indebiti (2154)-
Article 2154 If something is received when there is no right to demand it,
and it was unduly delivered through mistake, the obligation to
return it arises.
a juridical relation which takes place when somebody received something

from another without any right to demand for it, and the thing was
unduly delivered through mistake. Obligation to return the thing
arises on the part of the recipient.
▪ Andres v. Mantrust, 177 SCRA 618
iii. Others (2164-2175)

▪ Puyat & Sons v. Manila, 7 SCRA 970
Note: When A do the responsibility or obligation in behalf of B. A has the
right to demand from B (compensation, reimbursement)
c. Delicts (1167, 2177, RPC 100 and 104)

Article 1167
If a person obliged to do something fails to do it, the same shall be executed at his
cost.
This same rule shall be observed if he does it in contravention of the tenor of the
obligation. Furthermore, it may be decreed that what has been poorly done
be undone
13
Course Outline
Article 2177
Responsibility for fault or negligence under the preceding article is entirely separate
and distinct from the civil liability arising from negligence under the Penal
Code. But the plaintiff cannot recover damages twice for the same act or
omission of the defendant
Delicts- violation
d. Quasi-delicts (1162, 2176)
Article 1162 Obligation derived from quasi-delicts shall be governed but the
provisions of Chapter 2, Title XVII of this Book, and by special laws.
Article 2176 Whoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between parties, is
called quasi-delict and is governed by the provisions of this Chapter.
Basis of quasi-delict
- That the fault or negligence cannot prejudice anyone else
besides its author, and in no case should its consequences be
borne by him who, without will or cause on his part, becomes
the victim of the results, or suffers the harm produced by such
fault or negligence.
Negligence- is the failure to observe for the protection of the interests of
another person, that of degree care, precautions and vigilance which the
circumstances justly demand, whereby such other person suffers injury.
Requisites of Quasi-delict
1. That there exists a wrongful act or omission imputable to the
defendant by reason of his fault or negligence
2. That there exists a damage or injury, which must be proved by the
person claiming recovery and;
3. That there must be a direct causal connection or a relation of cause
and effect between the fault or negligence and the damage or injury,
or that the fault or negligence be the cause of the damage or injury
▪ Barredov.Garcia,73Phil607
▪ Mendozav.Arrieta,91SCRA113
▪ Cangco v. MRR, 38 Phil 768
▪ Air France vs. Carrascoso 18 SCRA 155
5. Classification of Obligations
a. Primary Classification Under the Civil Code
i. Pure and Conditional (1179-1192)
ii. With a period or term (1193-1198)
iii. Alternative and Facultative (1199-1206)
iv. Joint and Solidary (1207-1222)
v. Divisible and Indivisible (1223-1225)
vi. With a penal clause (1226-1230)
b. Secondary Classification
i. Legal (1158); Conventional (1159); Penal (1161)
14
Course Outline
ii. Real (to give) and Personal (to do or not to do)
iii. Determinate and Generic (as to subject matter of obligation)
iv. Positive (to give, to do) and Negative (not to give, not to do)
v. Unilateral and Bilateral
vi. Individual and Collective
vii. Accessory and Principal
viii. Simple; Multiple; Conjunctive; Distributive; Alternative; Facultative
ix. Possible and Impossible
B. Nature and Effects of Obligations
1. Kinds of Prestations
a. Togive
i. specificthing
Specific/ Determinate Thing- is one that is individualized and can
be identified or distinguished from the others of its kind.
• topreservethething(1163)
Article 1163 Every person obliged to give something to also
obliged to take care of it with the proper diligence of a good father
of a family, unless the law or the stipulation of the parties requires
another standard of care.
- In preserving the thing, the law requires the debtor to
exercise the diligence of a good father of a family.
- The obligation to preserve the thing to be delivered has its
sanction is the liability for damages imposed upon the
debtor who fails to exercise the diligence of a good father
of a family in preserving the thing. But if the failure of the
debtor to preserve the thing is due to no fault or negligence
of his, but to fortuitous events or force majeure, he is
exempted from responsibility
• to delivertheaccessionsandaccessories(1166)
Article 1166 The obligation to give a determinate thing includes of
delivering all its accessions and accessories, even though they
may not have been mentioned.
⮚ Accessions- referring to those things which, destined for

the embellishment, use, or preservation of another thing or more
importance, have for their object the completion of the latter for which
they are indispensable or convenient.
⮚ Accessories- additions to or improvement upon a thing, either
naturally or artificially
Everything that is attached, natural or artificially, to the principal
thing, as well as that which serves to complete it, even it not
attached to it, must delivered together with it.
• todeliverthefruits(1164,par.1)
The creditor has a right to the fruits of the thing from the time the
obligation to deliver it arises. However, he shall acquire no real right over
it until the same has been delivered to him.
15
Course Outline
- The creditor or obligee, in an obligation to deliver a
determinate thing, is entitled to the fruits from the time the
obligation to deliver arises.
Circumstances When the delivery should be made

Law, contracts, quasi-contracts, delict,
The deliver of the thing is determined
quasi-delicts, crime by specific provisions of law
Suspensive condition From the moment the conditions
happen
Suspensive Period or Term Upon the expiration of the period or
term
No term or condition in the contractUpon the perfection of the contract or
the constitution or creation of
the obligation
Real Rights- the power belonging to a person over a specific thing,
without a passive subject individually determined against whom such right
may be personally exercised.
Personal Right- the power belonging to one person to demand another,

as definite passive subject, the fulfillment of a prestation to give, to do, or
not to do.
• todeliverthethingitself(1244)
Article 1244 The debtor of a thing cannot compel the creditor to
receive a different one, although the latter may be of the same
value as, or more valuable than that which is due.
In obligations to do or not to do, an act or forbearance cannot be
substituted by another act or forebearance against the obligee’s
will.
Waiver of defects- the defects of the thing delivered may be

delverd by the creditor, of the expressly so declares, or if, with
knowledge thereof, he accepts the thing without protest or
disposes of it or consumes it.
ii. genericthing(1246)
Generic/Indeterminate Thing- one which was indicated only its
kind, without being designated and distinguished from the others
of the same kind
- Limited generic obligation- obligation to give a thing is
confined to a particular class.
b. Todo(1244)
will.
16
Course Outline
c. Nottodo(1244)
will.
2. Breach of Obligation (1170)
Article 1170 Those who in the performance of their obligations are guilty of fraud,
negligence, or delay and those who in any manner contravene the tenor thereof,
are liable for damages.
a. Concept
▪ SongFov.HawaiianPhilippines,47Phil.821
▪ Velardeetal.v.CourtofAppeals,361SCRA56
▪ Angelesv.Calasanz,135SCRA323
▪ DeltaMotorCorporationv.Genuino,170SCRA29
▪ VermenRealtyv.CourtofAppeals,224SCRA549(1993)
b. Modes of Breach
i. Delay or mora (1169)
Article 1169 Those obliged to deliver or to do something incur in delay
from the time the obligee judicially or extrajudicially demands from them the
fulfillment of their obligation.
However, the demand by the creditor shall not be necessary in order that delay
may exist:
1. When the obligation or the law expressly so declares;
2. When from the nature and the circumstances of the obligation it appears that
the designation of the time when the controlling motive for the establishment
of the contract; or
3. When the demand would be useless, as when the obligor has rendred it
beyond his power to perform.
In reciprocal obligation, neither party incurs in delay of the other does not comply or
is not read to comply in a proper manner with what is incumbent upon him.
From the moment one of the parties fulfills his obligations, delay by the other
begins.
Mora- the delay in the fulfillment of the obligation; it is non-fulfillment with respect to
time.
Classes of Mora
• Mora solvendi- a default on the part of the debtor may either be

ex re (referring to obligations to give) or ex persona (referring to
obligations to do or not to do)
Requisites of Mora solvendi
1. That the obligation be demandable and already liquidated
2. That the debtor delays performance
3. That the creditor requires the performance judicially or
extrajudicially
17
Course Outline
⮚ The effects of mora arise only when the delay is due to causes
imputable to the debtor; hence, there is legally no delay if this
cause by factors not imputable to the debtor.
⮚ Default generally begins from the moment the creditor
demands the performance of the obligation. Demand is
necessary even if a period has been fixed in the obligation. It
must refer to the prestations that is due and not to another.
⮚ Where there has been an extra-judicial demand before action
for performance was filed, the effects of default arise from the
date such extra-judicial demand.
Demand is not necessary

1. Where there is an express stipulation to that effect;
2. Where the law so provides;
3. When the period is the controlling motive of the principal
inducement for the creation of the obligation; and
4. Where demand would be useless (impossibility to perform
the prestation by the debtor)
5. When the debtor expressly recognized or acknowledged
that it has incurred a delay.
Effects of Mora Solvendi
1. When it has for its object a determinate thing, the delay
places the risks of the thing on the debtor; and
2. He becomes liable for damages for the delay
▪ CetusDevelopmentv.CA176SCRA72
▪ AerospaceChemicalIndustriesv.CA315SCRA92
▪ SantosVenturaHocorma v.Santos,441SCRA472
▪ Vazquezv.AyalaCorporation,443SCRA231
▪ Abellav.Francisco,55SCRA447
▪ delaCruzv.Legaspi,98SCRA43
• Moraaccipiendi(Seealso1268) - default on the part of the
creditor.
- The creditor incurs delay when the debtor tenders payment

or performance, but the creditor refuses to accept it without
just cause.
- It is neccessary, however, that it be lawful for the debtor to
perform, and that he can perform.
Requisites of Mora accipiendi

1. An offer of performance by the debtor who has required
capacity;
2. The offer must be comply with the prestation as it should
be performed;
3. The creditor refuses the performance without just cause.
Effects of Mora Accipiendi

1. The responsibility of the debtor for the thing is reduced
and limited to the gross and negligence;
18
Course Outline
2. The debtor is exempted from the risks of loss of the
thing;
3. All express incurred by the debtor for ther preservation
of the thing after the mora shall be chargeable to the
creditor
4. If the obligation bears interest, the debtor does not
have to pay the same from the moment of the mora
5. The creditor becomes liable fo damages
6. The debtor may relieve himself of the obligation by the
consignation of the thing.
▪ Villaroelv.ManilaMotorCo.,104Phil.926
• Compensationmorae - default on the part of both parties
In reciprocal obligation, the general rule is that the fulfillment by
the parties should be simultaneous. Where both are in default,
their respective liability for damages shall be offset equitably
▪ CentralBankv.CourtofAppeals,139SCRA46
iii. Fraud or dolo (1171) Article 1171 Responsibility arising from fraud
is demandable in all obligations. Any waiver of an action for future
fraud is void.
Fraud in 1170- the deliberate and intentional evasion of the normal
fulfillment of obligations
Fraud in 1338- the form of insidious machinations, manipulations,
concealment or misrepresentations, for the purpose leading
another party in error and thus execute a particular act.
• dolo incidente v. dolo causante
a) Dolo Causante (causal fraud) – were it not for the fraud, the
other party would not have consented--the contract is voidable
b) Dolo Incidente (incidental fraud) – even w/o the fraud, the
parties would have still agreed, fraud is incidental--Contract is
valid but damages may be recovered.
▪ Woodhousev.Halili,93Phil.526
▪ Geraldezv.CourtofAppeals230 SCRA 320
• Non-waiver
Renunciation made in advance of the fraud is prohibited
because to permit such advance renunciations would
practically leave the obligation without effect.
iv. Negligence (1172-1173)
Article 1172 Responsibility arising from negligence in the performance of
every kind of obligations is also demandable but such liability may
be regulated by the courts, according to the circusmstances.
Article 1173 The fault or negligence of the obligor consists in the omission
of that diligence which is required by the nature of the obligation
and corresponds with the circumstances of the persons, of the
time and of the places. When negligence shows bad faith, the
provisions of articles 1171 and 2201, paragraph 2, shall apply.
19
Course Outline
If the law or contract does not state the diligence which is to be observed
in the performance, that which is expected of a good father of a
family shall be required.
• culpa v. dolo
- There is an intent to do fraud in order to evade the
performance of the obligation while there is culpa when the
wrongful act is due to the performance without due
diligence of a good father of a family which is required in
perfoming the prestation. If the culpa was in bad faith it
becomes dolo. Because bad faith corresponds to an intent
to be neglectful of the performance of the obligation
• culpa aquiliana v. culpa contractual
Culpa aquiliana- is the fault or negligence which

constitutes an independent source of obligation between
parties not previously bound.
Culpa contractual- is the fault or negligence of the debtor

as incident in the fulfillment of an existing obligation.
▪ Gutierrez v. Gutierrez, 56 Phil. 177

▪ Vasquez v. Borja, 74 Phil. 560
• Standard of care required (1173 par. 2)
Article 1173 par. 2
If the law or contract does not state the diligence
which is to be observed in the performance, that
which is expected of a good father of a family shall
be required
- Standard care should be as expected of a good father of a
family
▪ De Guia v. Manila Electric Co., 40 Phil. 706
▪ US v. Barias, 23 Phil. 434
▪ Sarmiento v. Sps. Cabrido, 401 SCRA 122
▪ Crisostomo v. CA, 409 SCRA 528
iv. Contraventionofthetenor (1172)
Article 1172 Responsibility arising from negligence in the performance of
every kind of obligations is also demandable but such liability may
be regulated by the courts, according to the circusmstances.
Contravention of the tenor- any illicit act which impairs the strict faithful
fulfillment of the obligation, or every kind of defective performance.
▪ Chavesv.Gonzales,32SCRA547
▪ Telefastv.Castro,158SCRA445
▪ Arrietav.NARIC,10SCRA79
▪ Magatv.Medialdea,206Phil341
d. Principal Remedies
Creditor in case there was a mora, dolo or culpa in the performace of the obligation
may have the following remedies.
20
Course Outline
1. To perform the prestation
2. To rescind the contract
3. To pay damages.
- the creditor may compel the debtor to perform the obligation even if the
debtor was in mora, dolo or culpa, he may ask to deliver another
thing in the substitution of the undelivered thing, he may also ask
that what have been done be undone or to do what have not done
however, in case that he still insists the same thing be delivered
and it is still impossible for the debtor to deliver such thing, the
remedy of the creditor is to pay damage or rescind the contract.
- May first ask for fulfillment of the obligation but if the fulfillment is
impossible then may ask for rescission and damages
- May ask for fulfillment and for damages
- May ask for damages and for rescission
- May not ask for rescission and for fulfillment
i. Performance
• Specific Performance (1165)
Article 1165 When what is to be delivered is a determinate thing,
the creditor in addition to the right granted him by article 1170,
may compel the debtor to make the delivery.
If the thing is inderterminate or generic, he may ask that the
obligation be complied with at the expense of the debtor.
If the obligor delays, or has promised to deliver the same thing to
two or more persons who do not have the same interest, he shall
be responsible for any fortuitous event until he has effected the
delivery.
• Substituted Performance (1165 par. 2, 1167)
Article 1165 par. 2
If the thing is inderterminate or generic, he may ask that the
obligation be complied with at the expense of the debtor.
If the obligor delays, or has promised to deliver the same thing to
two or more persons who do not have the same interest, he shall
be responsible for any fortuitous event until he has effected the
delivery.
Article 1167
If a person obliged to do something fails to do it, the same shall be
executed at his cost.
This same rule shall be observed if he does it in contravention of
the tenor of the obligation. Furthermore, it may be decreed that
what has been poorly done be undone.
Specific performance.
● Generic Thing- when the object of the obligation is

determinate or generic, the creditor has the right to ask
that the same be performed.
Substituted performance
21
Course Outline
● If the debtor does not make the delivery, the creditor
can demand that things of the kind agreed upon be
delivered to him at the expense of the debtor.
⮚ In both cases, the creditor is entitled to recover damages

suffered, even if this is not expressly metn
▪ Chavesv.Gonzales,32SCRA547
▪ Tanguiligv.CourtofAppeals,266SCRA78
ii. Rescission (1191‐1192)
Article 1191 The power to rescind obligations is implied in reciprocal
ones, in case one of the obligors should not comply with what us
incumbent upon him.
The injured party may chooses between the fulfillment and the rescission
of the obligation, with the payment of damages in either case. He
may also seek rescission, even after he has chosen fulfillment, if
the latters should become impossible.
The court should decree the rescission claimed, unless there be just
cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons
who have acquired the thing, in accordance with articles 1385 and
1388 and the Mortgage Law.
Reciprocal Obligation- two persons are mutually debtor and creditor of

each other.
Rescission is possible if the breach is a substantial breach. Wherein if the

breach defeats the very object of the parties in executing the
agreement.
iii. Damages (1170)

Article 1170 Those who in the performance of their obligations are guilty
of fraud, negligence, or delay and those who in any manner contravene
the tenor thereof, are liable for damages
d. SubsidiaryRemediesofCreditor
i. AccionSubrogatoria(1177)
Article1177 The creditors, after having pursued the property in
possession of the debtor to satisy their claims, may exercise all
the rights and bring all the actions of the latter for the same
purpose, save those which are inherent in his person; they may
also impugn the act which the debtor may have done to defraud
them
Accion Subrogatoria: right of creditor to exercise all of the rights and bring
all of the actions which his debtor may have against
third persons; Novation by change of debtor.
Requisites
a. Debtor to whom the right of action properly pertains must be indebted
to the creditor
b. The debt is due and demandable
22
Course Outline
c. The creditor must be prejudiced by the failure of the debtor to collect
his own debt from 3rd persons either through malice or negligence
d. The debtor’s assets are insufficient (debtor is insolvent)
e. The right of action is not purely personal to the debtor
ii. AccionPauliana(1177;1381,par.3)
Accion Pauliana: the right of the creditor to attack or impugn by means of
a rescissory action any act of the debtor which is in fraud and to
the prejudice of his rights as creditor
Requisites: CASAL
a. There is a credit in favor of plaintiff prior to alienation
b. The debtor has performed a subsequent contract conveying a
patrimonial benefit to third persons
c. The creditor has no other legal remedy to satisfy his claim
d. The debtor’s acts are fraudulent to the prejudice of the creditor
e. The third person who received the property is an accomplice in the
fraud
▪ KheHongChengv.CourtofAppeals,355SCRA701
▪ Siguanv.Lim,318SCRA725
iii. OtherSpecificRemedies(1652,1729,1608,1893)
e. Extinguishment of Liability due to Fortuitous Event (1174)

Article 1174 Except in cases expressly specified by the law, or when it is otherwise
declared by stipulation, or when the nature of the obligation requires the
assumption of risk, no person shall be responsible fro those events which
could not be foreseen, which, though foreseen, were inevitable.
Fortuitous event (caso fortuito)- an event that cannot be foreseen or which, though
foreseen, were inevitable.
i. Concept
General Rule: When the debtor in unable to perform the obligation
because of fortuituous event or force majeure he is not laible for
any damages.
That such event is not foreseen and inevitable and although foreseen it is
still inevitable or impossible to avoid.
Characteristics of Fortuitous Event
1. The cause of the unforeseen and unexpected occurrence, or
the failure of the debtor to comply with his obligation, must be
independent of the human will.
2. It must impossible to foresee the event which constitute the
caso fortuito, or if it can be foreseen, it must be impossible to
avoid.
3. The occurrence must be such as to render it impossible for
the debtor to fulfill his obligation in a normal manner
4. The obligor must be free from any participation in the
aggravation of the injury resulting to the creditor.
ii. Exceptions (1174,1165par.3,552,1942,1979,2001,2147)

23
Course Outline
- Negligence- that the person must be free from negligence.
When it was proved that the person cannot perform the
obligation because of his own negligence then the defense
of fortuitous event will not prosper.
- When the parties expressly stipulated in their contract that
that the debtor shall be liable to the creditor, even if
performance is rendered impossible for fortuituous event.
- Assumption of Risk- You know that the obligation is
dangerous but you still take the risk to accept it.
-
▪ JuanNakpil&Sonsv.CourtofAppeals,144SCRA597
▪ Republicv.LuzonStevedoringCo.,21SCRA279
▪ Dioquinov.Laureano,33SCRA65
▪ Austriav.CourtofAppeals,39SCRA527
▪ NationalPowerCorporationv.CourtofAppeals,161SCRA334
▪ Yobidov.CourtofAppeals,281SCRA1
▪ BacolodMurciaMillingv.CourtofAppeals,182SCRA24
▪ Philcomsatv.GlobeTelecom,430SCRA
f. Interest and Usurious Transactions (1175,1413,1961)
Article 1175 Usurios transactions shall be governed by special laws.
- Usurious transactions are legal but they are not in effect or
not enforceable this time.
- Usury- receiving something in excess of the amount
allowed by the law for the loan or forbearance of money,
goods, or chattels.
- Forbearance any claims aside from loan.
- Interest- is the income produced by money in relation to its
amount and to the time that it cannot be utilized by its
owner.
- Usurious Transactions is governed by special law
which is the Monetary Board Circular No. 905
▪ PD858;
▪ PD1685
▪ CentralBankCircular416
▪ MonetaryBoardCircularNo.905;No.2209
▪ Nacar v. Gallery Frames, 703 SCRA 439
▪ Spouses Abella vs. Spouses Abella, GR 195166, July 8, 2015
▪ SecurityBankv.RegionalTrialCourtMakati,263SCRA453
▪ Almedav.CourtofAppeals,256SCRA292
▪ AngelWarehousingv.Chelsea,23SCRA19
▪ FirstMetroInvestmentv.EstedelSol,369SCRA
▪ Spouses Albos v. Spouses Embisan, 743 SCRA 283
▪ Louh v. BPI, G.R. No. 225562, 2017
3. Transmissibility of Rights (1178)
Article 1178 Subject to the laws, all rights acquired in virtue of an obligation are
transmissible, if there has been no stipulation to the contrary.
24
Course Outline
An instrument evidencing a credit may be transferred or assigned by the creditor to
another, and the transferee would be considered in lawful possession of the same as
well as of the credit, unless the contrary is shown.
C. Kinds of Civil Obligations
Classification of Obligation
a. Pure
b. Conditional
c. With term
d. Alternative
e. Joint or mancommunada
f. Solidary or several or in solidum
g. Divisible
h. Indivisible
i. With penal clause
1. Pure Obligations (1179 par. 1)

Article 1179 Every obligation whose performance does not depend upon a future or
uncertain event, or upon a past event unknown to the parties is demandable at once.
Pure Obligation- when the obligation does not depend on the future or uncertain event or
past event unknown to the parties.
- When the obligation has no condition and term whatever upon which dependent to the
fulfillment of the obligation.
- the obligation is immediately demandable and there is nothing to exempt the debtor from
compliance therewith.
2. Conditional Obligations (1181)
Article 1181 In conditional obligations, the acquisition of rights, as well as the
extinguishment or loss of those already acquired, shall depend upon the happening of
the event which constitutes the condition.
Condition- every future and uncertain event upon which an obligation or provision
is made to depend
a. Concept
▪ Gaitev.Fonacier,2SCRA830
▪ Gonzalesv.HeirsofTomasandPaulaCruz,314SCRA585
b. Kinds; as to effect on obligation (1181)
i. Suspensive or condition precedent – if the condition happens, the
obligation arises
- the contract is not perfected unless the conditions is first complied with
Ex. If the right to rescind a contract is given to one of the parties within a
certain period after the happening of a condition, the right of rescission cannot be
exercised if the condition does not happen.
“ We cannot rescind the contract until you cannot pass the exam” “Our contract is
still in force”
▪ Gonzalesv.HeirsofTomasandPaulaCruz,supra
▪ Coronelv.CourtofAppealsandAlcaraz,263SCRA15
• Retroactiveeffectwhenconditionisfulfilled(1187)
25
Course Outline
Article 1187 The effects of a conditional obligation to give once the
condition has been fulfilled, shall retroact to the day of the constitution of the
obligation. Nevertherless, when the obligation imposes reciprocal prestations
upon the parties, the fruits and interests during the pedency of the condition shall
be deemed to have been mutually compensated. If the obligation is unilateral, the
debtor shall appropriate the fruits and interests received, unless from the nature
and circumstances of the obligation it should be inferred that the intention of the
person constituting the same was different.
In obligation to do and not to do, the courts shall determine, in each case, the
retroactive effect of the condition that has been complied with
Rules:
1. Once the conditional obligation to give has been fulfilled, shall retroact
to the day of the constitution of the obligation. (as if there was an
interruption because the condition is just accidental element in the
obligation)
2. In reciprocal prestations, during the pedency of the condition the fruits
and interests shall be deemed mutually compensated. The fruits and
interests are considered as equivalent to and are made to offset each
other.
3. In unilateral obligation, the fruits received by the debtor before the
happening of the condition are kept by him and are not delivered
together with the thing upon the fulfillment of the condition.
4. When the obligation is the delivery of a thing, the debtor cannot
alienate the property, before the fulfillment of the suspensive
condition, if so the contracts are abrogated and cease to have any
effect.
5. When the property was already delivered to the third party and before
the happening of the suspensive condition and such third party is in
good faith then the suspensive condition cannot defeat the ownership.
The remedy of the creditor is for the debtor to pay damages.
Exception when the third party acted in bad faith.
6. Whent the creditor already disposed of the property to be delivered
(already mortgage the property to be delivered) the suspensive
condition consolidates and makes effective the act performed.
7. The increase of the thing in value may acquire before the happening
of the suspensive condition, inures to the benefit of the creditor.
8. When the thing was loss due to the fortuitous event before the
happening of the condition, the debtor suffers the loss because he is
still the owner.
• Rightsofthecreditoranddebtorbeforefulfillmentofthe condition
(1188)
Article 1188 The creditor may, before the fulfillment of the
condition, bring the appropriate actions for the preservataion of his
right.
The debtor may receiver what during the same time he has paid
by mistake in case of a suspensive condition.
26
Course Outline
1. The creditor may file an appropriate action for the preservation
of creditor’s right.
2. When the debtor mistakenly deliver or pay the creditor, he has
the right to recover the same by accion reinvindicatoria or
solution indebiti
3. When the debtor already paid the creditor, ignorant of the
suspensive condition, the subsequent fulfillment of the
condition bar the recovery of the said payment (as if the debtor
advancely pay the creditor, he can no longer may recover the
his payment)
4. The debtor may recover the fruits and interests mistakenly
given, the solution indebti will apply.
▪ Parksv.ProvinceofTarlac,49Phil.142
▪ CentralPhilippineUniversityv.CourtofAppeals,245SCRA511
▪ Quijadav.CourtofAppeals,299SCRA695
d. Kinds; as to cause or origin (1182)
Article 1182 When the fulfillment of the condition depends upon the sole will of the
debtor, the conditional obligation shall be void. If it depends upon the chance
or upon the will of a third person, the obligation shall take effect in conformity
with the provisions of this Code.
> the conditional obligation is void when it is base on the sole will of the debtor
i. Potestative- when the condition is dependent on the will of the
contracting parties.
Ex. I will give you P100,000.00, if you repair my house
Simple Potestative Condition- presupposes not only a manifestation of

will but realization of an external act.
Ex. I will give you P100,000.00, if I decide sell my house (under the sole
will of the creditor but there an realization external act if there was
someone who will buy the property)
Pure Potestative Condition- depends upon the exclusive will

Ex. I will give you P100,000.00, if I want to
Difference between the simple potestative condition and mixed condition

In simple potestative condition the external act is a consequence of the
first condition, mixed condition on the other hand, the third party directly
influence the condition.
▪ LaoLimv.CourtofAppeals,191SCRA150
iii. Casual- the condition is depedent exclusively of chance or other
factors and third persons
Ex. I will give you P 100,000.00, if I won the lotto
▪ NagaTelephoneCo.v.CourtofAppeals,230SCRA351
iv. Mixed- condition is dependent on the will of the contracting parties
and chance and other factors or third persons
Ex. I will give you my car, if my daughter agrees
▪ Osmenav.Rama,14Phil.99
27
Course Outline
▪ Hermosav.Longora,93Phil.971
▪ Taylorv.UyTiengPiao,43Phil.873
▪ SmithBellv.Matti,44Phil.875
▪ RustanPulpandPaperMills,214SCRA665
▪ Romerov.CourtofAppeals,250SCRA223
e. Kinds; astopossibility(1183)
Article 1183 Impossible conditions, those contrary to good customs and public policy
and those prohibited by law shall annul the obligation which depends upon
them. If the obligation is divisible that part thereof which is not affected by the
impossible or unlawful condition shall be valid.
The condition not to do an impossible thing shall be considerered as not having been
agreed upon
Physically Impossible- when it is contrary to the law of nature

Juridical Impossible- whent contrary to laws, morals, good customs, public order or
public policy.
When the condition is impossible then there is no condition at all and the obligation
turns to pure obligation, that is due and demadabke immediately.
The illicit act is determined by the effects of it upon one of the parties. The intention
and its effect that determine whether the condition is illicit.
▪ RomanCatholicArchdioceseofManilav.CA, 198SCRA300
f. Kinds; astomode (1184‐1185)
Article 1184- The condition that some event happen at a determinate
time shall extinguish the obligation as soon as the time expires or if has
become indubitable that the event will not take place
Article 1185- The condition that some event will not happen at a
determinate time shall render the obligation effective from the moment
the time indicated has elapsed, or if it has become evident that the event
cannot occur.
If no time has been fixed, the condition shall be deemed fulfilled at such
time as may have probably been contemplated, bearing in mind the
nature of the obligation
i. Positive - a condition that some event happen at a determinate time
shall extinguish the obligation as soon as the time expires
ii. Negative- a condition that some event will not happen at a
determinate time shall render the obligation effective from the moment
the time indicated has elapsed.
g. Rulesincaseofloss, deteriorationorimprovementpendingthehappeningof the
condition(1189–1190)
Fruits and Interests
Suspensive Condition (pending the happening)

Reciprocal Obligation- mutually compensated each other, by offsetting equitably
Unilateral Obligation- the debtor shall keep the fruits received.
28
Course Outline
Resolutory Condition- all vestiges of the obligation shall be wiped out and the mutual
restitutions will constitutes not only the object but also the fruits and interests.
Restore to the original condition. And as a matter of practicability and
convenience, reciprocal restititutions the fruits and interests may be
compensated against each other.
▪ Heirsof Morenov.MactanCebuInternationalAirportAuthority,413SCRA502
i. Definitionofloss, deteriorationandimprovement
ii. Effectoflossordeterioration
• Withoutdebtor’sfault
• Withdebtor’sfault
iii. Effectofimprovement
• Bynatureortime
• Duetodebtor’seffortandexpense
Loss- it is when the thing perishes, goes out of commerce of man and when it
disappears is such manner that its existence is unknown or it cannot be
recovered.
Derterioration – any reduction or impairment in the substance or value of a thing
which does not amount to loss.
Improvement- the increase of the value of the thing
Deterioration Improvement
Not Debtor’s Fault/
Obligation Impairement
is must borne
Inures to the benefit of
Improved by extinguised by the creditor the creditor
nature
Debtor’s Fault/Improved
Pay damages Creditor may choose Hetheshall not have any
by debtor’s rescissision, other rights than
expense fulfillment of the that granted to
obligation and the usufructury
pay damages (he may revomed
the improvement
or if cannot be
removed must be
delivered
together with the
thing and the
creditor paying
indemnity to the
debtor
g. Effectofpreventionofthefulfillmentoftheconditionbytheobligor (1186)
Article 1186 The condition shall be deemed fulfilled whent the obligor voluntarily
prevents its fulfillment
▪ Taylorv.UyTiengPiao,supra.
▪ Herrerav.Leviste,135SCRA129(1985)
3. Obligations with a Period(1193,1180)
a. ComparePeriod/Termv.Condition
29
Course Outline
Period/Term – that the event will certaintly happen in the future while Conditions
are uncertain events that might happen in the future or happen in the past
unknown to the parties
b. KindsofPeriod
i. Astoeffect
• Suspensive(1193,par.1)-ex die (from a day certain) a period
that must lapsed before the obligation may be demandable.
• Resolutory(1193,par.2)- in diem (to a day certain) a period
once lapsed will terminate the obligation
ii. Astoexpression
• Express- a specific term/period is stated
• Implied- when a person undertakes to do somew work which
can be done only durimng a particular season
iii. Astodefiniteness
• Definite- refers to a fixed known date or time
• Indefinite- an event that is necessarily will happen but the date
of its happening is unknown.
iv. Astosource
• Voluntary – stipulated by the parties
• Legal- period fixed by law
• Judicial- period allowed by Court
c. Rulesincaseofloss,deteriorationorimprovementbeforearrivalofthe
period(1194,1189)
Article 1194 In case of loss, deterioration or improvement of the thing before the
arrival of the day certain, the rules in article 1189 shall be observed.
Deterioration Improvement
Not Debtor’s Fault/
Obligation Impairement
is must borne
Inures to the benefit of
Improved by extinguised by the creditor the creditor
nature
Debtor’s Fault/Improved
Pay damages Creditor may choose Hetheshall not have any
by debtor’s rescissision, other rights than
expense fulfillment of the that granted to
obligation and the usufructury
pay damages (he may revomed
the improvement
or if cannot be
removed must be
delivered
together with the
thing and the
creditor paying
indemnity to the
debtor
d. EffectofPaymentinAdvance(1195;1197,par.3)
Article 1195 Anything paid or delivered before the arrival of the period, the obligor
being unaware of the period or believing tha that the obligation has become due
30
Course Outline
and demandable, may be recoved, with the fruits and interests. (applicable only to
obligation to give)
Once the debtor mistakenly delivered the prestation before the arrival of the
period, he may recover the fruits and interests, principle of solution indebti is
applicable but if he has knowledge of the period then he may no longer recover
the fruits and interests.
Article 1197, par. 3

In every case, the courts shall determine such period as may under the
circumstances have been probably contemplated by the parties. Once fixed by the
courts, the period cannot be changed by them.
e. BenefitofPeriod(1196)
Article 1196 Whenever in an obligation a period is designated, it is presumed to
have been established for the benefirt of both the creditor and debtor, unless
from the tenior of the same or other circumstances it should appear that the
period has been established in favor of one of the other.
i. Forwhosebenefit
• Creditor- the creditor cannot be compelled by the debtor to
accept the payment in advance, or before the period however he
may demand the advance performance to the debtor.
• Debtor-the debtor cannot be compelled by the creditor to
perform the obligation in advance, or before the period however
he may demand the advance acceptance of the obligation by the
creditor.
• Both- creditor cannot demand payment and the debtor cannot
make an effective tender and consignation of payment, before the
period stipulated.
Reason of the Creditor of Non-acceptance

1. For the benefit of payment of interest;
2. Creditor wanted his money to be invested safely rather having
it in his hands;
3. May protect him of the sudden decline of the purchasing
power of the currency loaned, especially when there are many
factors that influence the fluctuations of the currency;
ii. Effects
iii. Presumption(1196)
The acceptance of the creditor of the partial payment of the debtor, before
the period/term expires, constitutes the waiver of the benefit of the
period/term
▪ Lachicav.Araneta,47OfficialGazetteNo.11,5699
▪ PoncedeLeonv.Syjuco,90Phil311
▪ Bucev.CourtofAppeals,332SCRA151
iv. Whendebtorlosesrighttomakeuseofperiod(1198)
f. WhenCourtMayFixAPeriod
i. Periodisimplied(depending on the intent of the parties)
ii. Perioddependsonsolewillofthedebtor
31
Course Outline
▪ Aranetav.PhilippineSugarEstateDevelopment,20SCRA330
▪ CentralPhilippineUniversityv.CourtofAppeals,supra.
▪ Deudorv.J.M.Tuason,2SCRA129
4. ReciprocalObligations(1191‐1192)
a. Concept
b. Alternativeremediesofinjuredpartiesoncaseofbreach
i. actionforspecificperformance
•effectwhenfulfillmentnolongerpossible
ii. actionforrescission
• requisites
• howmade
• effects
▪ SongFov.HawaiianPhilippines,47Phil.821
▪ Boysawv.InterphilPromotions,148SCRA365
▪ UniversityofthePhilippinesv.delosAngeles,35SCRA365
▪ DeErquiagav.CourtofAppeals,178SCRA1
▪ Angelesv.Calasanz,135SCRA323
▪ JamesG.Ongv.CourtofAppeals,310SCRA1
▪ Iringanv.CourtofAppeals,366SCRA41
▪ VisayanSawMillv.CourtofAppealsandRJTrading,219SCRA378
▪ Deiparinev.CourtofAppealsandTrinidad,221SCRA503
▪ GraceParkEngineeringCo.Inc.v.Dimaporo,107SCRA266
▪ Roquev.Lapuz,96SCRA741
▪ Suriav.IntermediateAppellateCourt,151SCRA661
▪ Read:Art1786,1788,1484‐86,RepublicActNo.6552
5. AlternativeObligations
a. Concept(1199)
b. RightofChoice(1200)
c. EffectofNoticeofChoice
d. WhenNoticeProducesEffect(1201)
e. Effectoflossorimpossibilityofoneorallprestations(1202-1205)
6. FacultativeObligations(1206)
a. Concept
b. DistinguishedfromAlternativeObligations
c. EffectofSubstitution
7. JointObligations
a. Concept
i. Requisites
ii. Wordsusedtoindicatejointobligations
b. Presumption(1207,1208)
c. Effects(1207,1208)
• Extentofliabilityofdebtor
• Extentofrightofcreditor
• Incaseofnovations,compensation,confusion,orremission
8. SolidaryObligations
a. Concept
i. Requisites
ii. Wordsusedtoindicatesolidaryobligations
32
Course Outline
▪ Ynchaustiv.Yulo,34Phil.978
▪ Inciongv.CourtofAppeals,257SCRA578
▪ RCBCv.CourtofAppeals,178SCRA739
▪ LafargeCementPhil.V.ContinentalCement,443SCRA522
b. Kinds
i. Astosource(1208)
•Legal(1915,1945,2194,RPC 119)
•Conventional
•Real
ii. Astopartiesbound
•Active
•Passive
•Mixed
iii. Astouniformity
•Uniform
•Varied/non‐uniform(1211)
c. Effects
i. Solidarycreditorinrelationto:
•commondebtor
- righttodemand(1214‐1216;1217,par.1)
- incaseofnovation,compensation,confusion,remissionbya
creditor(1215,par.1)
•solidaryco-creditors
- incaseofnovation,compensation,confusion, remissionbya
co‐creditor(1215,par.2)
- prejudicialactsprohibited(1212)
- assignmentofrightsnotallowed(1213)
ii. Solidarydebtorinrelationto:
•commoncreditor
- obligationtoperform(1207)
- incaseofnovation,compensation,confusion,
remissionbyacreditor
• solidaryco‐debtor
- incaseofpaymentbyaco‐debtor(1217‐1220)
- incaseoffortuitousevent(1221)
▪ Jaucianv.Querol,38Phil.718
▪ RehabilitationFinanceCorporationv.CourtofAppeals, Official
GazetteNo.6,p.2467 Quiombingv.CourtofAppeals,189SCRA325
▪ Inciongv.CourtofAppeals,257SCRA578
d. DefensesAvailabletoaSolidaryDebtorAgainsttheCreditor(1222)
i. Types
• thosederivedfromthenatureoftheobligations
•personaldefenses
•defensespertainingtohisshares
•thosepersonallybelongingtotheotherco‐debtors
ii. Effects
▪ Ynchaustiv.Yulo,supra.
▪ Alipiov.CourtofAppeals,341SCRA441
33
Course Outline
9. DivisibleObligations
a. Concept
b. Effects(1223,1233)
10. IndivisibleObligations
a. Concept:distinguishedfromsolidaryobligations
b. Kinds
i. Natural(1225,par.1)
ii. Legal(1225,par.3)
iii. Conventional(1225,par.3)
c. Presumptionsofdivisibilityandindivisibility(1225)
d.Divisibilityandindivisibilityinobligationsnottodo(1225par.3)
e. Effects(1223,1223,1224)
f. CessationofIndivisibility
11. JointIndivisibleObligations
a. Concept
i. Distinguishedfromjointobligations
ii. Distinguishedfromsolidaryobligations
b. Indivisibilitydistinguishedfromsolidarity(1210)
c. Effects(1209,1224)
12. ObligationswithaPenalClause
a. Concept
i. Principalv.AccessoryObligation
ii. Distinguishedfromconditionalobligations
iii. Distinguishedfromalternativeobligations
iv. Distinguishedfromfacultativeobligations
v. Distinguishedfromguaranty
b. KindsofPenalClause
i. Astoeffect
•Subsidiary
•Complimentary
ii. Astosource
•Conventional
•Legal
iii. Astopurpose
•Punitive
•Reparatory
c. DemandabilityofPenalty(1226,par.2)
d. EffectsofPenalClause
i. Substituteforindemnityfordamagesandpaymentofinterest(1226)
▪ MakatiDevelopmentCorp.v.EmpireInsuranceCo.20SCRA557
▪ Tanv.CourtofAppeals,367SCRA571
▪ CountryBankersInsurancev.CourtofAppeals,201SCRA458
ii. Notexemptdebtorfromperformance(1227)
iii. Creditorcannotdemandbothperformanceandpenaltyatthesametime
(1227)
iv. Creditorcannotcollectotherdamagesinadditiontopenalty (1226)
e. Whenpenaltyshallbeequitablyreduced(1229)
f. NullityofPrincipalObligationofPenalClause(1230)
34
Course Outline
D. ExtinguishmentofObligations1231)
1. PaymentorPerformance(1232)
a. Concept(1232)
b. Requisites
i. Whocanpay
• GeneralRule
• Exceptions:
- thirdpersonwhoisaninterestedparty(1302[3])
- thirdpersonwhoisnotaninterestedpartybutwiththeconsent
ofdebtor(1302[2],1236,par.1)
- thirdpersonwhoisnotaninterestedpartyandwithoutthe
consentofthedebtor,withouttheknowledgeoragainstthewill
of thedebtor(1236,par.2; 1237,1236,par.1)
- thirdpersonwhodoesnotintendtobereimbursed (1238)
• inanobligationtogive(1239,1427)
• incaseofactivesolidarity(1214)
ii. Towhompaymentcanbemade
• Generalrule(1240)
• Exceptions:
- incapacitatedperson(1241,par.1)
- thirdperson(1241,par.2)
• whenproofofbenefitnotrequired(1241,par.3;1242)
• incaseofactivesolidarity(1214)
iii. Whatistobepaid(Identity)
• GeneralRule
• Specificcases:
- Togiveaspecificthing(1244)
- Togiveagenericthing(1246)
- Topaymoney(1249,1250;R.A.529,R.A.4100,R.A.8183)
▪ Arrietav.NARIC,supra
▪ Kalalov.Luz,34SCRA377
▪ St.PaulFireandMarineInsurancev.Macondray,70SCRA122
▪ Papav.A.V.Valencia,284SCRA643
▪ PhilippineAirlinesv.CourtofAppeals,181SCRA557
• PaymentofInterest(1956)
iv. Howpaymentistobemade(Integrity)
• GeneralRule(1233)
- Partialpaymentisnotallowed;exceptions(1248)
• Substantialperformanceingoodfaith(1234)
• Estoppel(1235)
• Presumptionsinpaymentofinterests/installments(1176)
v. Whenispaymenttobemade
• GeneralRule(1169)
• Nodemand,nodelay;Exceptions
vi. Wherepaymentistomade
35
Course Outline
• Placeexpresslydesignated(1251,par.1)
• Whenplaceofpaymentisnotexpresslydesignated(1251,par.2to4)
vii. Whopaysforexpensesformakingpayment(1247)
c. ApplicationofPayments
i. Concept(1252)
▪ ReparationsCommissionv.UniversalDeepFishing,83SCRA764
▪ Paculdov.Regalado,345SCRA134
ii. Requisites
iii. RulesinApplicationofPayments(1252‐1253)
• Ifrulesarenotapplicableorcannotbeinferred(1254)
• Meaningofthe“mostonerousdebtor”
d. PaymentbyCession
i. Concept(1255)
ii. Requisites
iii. Effects
iv. ComparedtoAssignmentofReceivables
e. DationinPayment
i. Concept(1245)
• DistinguishedfromPaymentbyCession
▪ DevelopmentBankofthePhilippinesv.CourtofAppeals,284SCRA
14
ii. Requisites
iii. Effects
▪ FilinvestCreditCorporationv.PhilippineAcetylene,111SCRA421
f. TenderofPaymentandConsignation
i. TenderofPayment
• Concept
• Requisites
ii. Consignation
• ConceptandPurpose
• Requisites
- Whentenderandrefusalnotrequired(1256,par.2) - Two
noticerequirement(1257,par.1;1258,par.2);Effectsofnon‐
compliance
• Effects(1260,par1)
- Withdrawalbydebtorbeforeacceptancebycreditoror
approvalofcourt(1260,par.2)
- Withdrawalbydebtorafterproperconsignation(1261)
 Withcreditorapproval
 Withoutcreditorapproval
• ExpensesofConsignation
▪ DeGuzmanv.CourtofAppeals,137SCRA730
▪ TLGInternationalContinentalEnterprising,Inc.v.Flores,47SCRA437
▪ McLaughlinv.CourtofAppeals,144SCRA693
▪ Socov.Militante,123SCRA160
▪ Sottov.Mijares,28SCRA17
▪ Reisenbeckv.CourtofAppeals,209SCRA657
▪ RuralBankofCaloocanv.CourtofAppeals,104SCRA151
36
Course Outline
▪ Licuananv.Diaz,175SCRA530
▪ Chanv.CourtofAppeals,230SCRA685
▪ MeatPackingCorp.v.Sandiganbayan,359SCRA409
2. LossorImpossibility
a. LossoftheThingDue
i. Concept(1189,par.2)
ii. Kinds
• Total
• Partial
iii. Requisites(1262)
iv. Presumption(1266,1267)
v. Effects
• Inanobligationtogiveaspecificthing(1262,1268)
• Inanobligationtogiveagenericthing(1263)
• Incaseofpartialloss(1264)
• Actionagainstthirdpersons(1269)
b. ImpossibilityofPerformance
i. Concept(1266,1267)
ii. Kinds
• Total
• Partial
iii. Requisites(1266)
iv. Effects
• Inobligationstodo(1266‐1267;1262,par.2)
• Impossibilitydistinguishedfromdifficulty
• Incaseofpartialimpossibility(1264)
▪ Occeñav.CourtofAppeals,73SCRA637
▪ NagaTelephoneCompanyv.CourtofAppeals,230SCRA351
▪ PNCCv.CourtofAppeals,272SCRA183
3. CondonationorRemission
a. Concept
b. Kinds
• Totalorpartial
• Expressorimplied(1270,par.1)
c. Requisites(1270,par.2)
▪ Yamv.CourtofAppeals,303SCRA1
d. Presumptions(1271‐1272;1274)
e. Effects
i. Ingeneral
ii. Incaseofjointorsolidaryobligations
f. GoverningRules(1270)
g. RenunciationofPrincipalorAccessoryObligation(1273)
4. Confusion or Merger
a. Concept
b. Requisites
c. Effects
i. Ingeneral(1275)
ii. Incaseofjointorsolidaryobligations(1277)
37
Course Outline
d. ConfusioninPrincipalorAccessoryObligations(1276)
5. Compensation
a. Concept(1278);distinguishedfromConfusion
b. Kinds
i. TotalorPartial
ii. Legal
• Requisites(1279‐1280):Duedistinguishedfromdemandable
▪ Gantionv.CourtofAppeals,28SCRA235
▪ BankofthePhilippineIslandsv.Reyes,255SCRA571
▪ PhilippineNationalBankv.SapphireShipping,259SCRA174
▪ CKHIndustrialDevelopmentv.CourtofAppeals,272SCRA333
▪ Mirasolv.CourtofAppeals,351SCRA44
▪ AssociatedBankv.Tan,446SCRA282
▪ Villanuevav.Tantuico,182SCRA263
▪ Perezv.CourtofAppeals,127SCRA636
▪ SilahisMarketingCorp.v.IntermediateAppellateCourt,180SCRA
21
▪ BankofthePhilippineIslandsv.CourtofAppeals,255SCRA___
• Effects(1290,1289)
iii. Conventional(1279,1282)
iv. Judicial(1283)
v. Facultative
d. WhenCompensationisnotallowed(1287‐1288)
e. CompensationofDebtsPayableinDifferentPlaces(1268)
f. EffectofNullityofDebtstobeCompensated(1284)
g. EffectsofAssignmentofCredit
i. withconsentofdebtor(1285,par.1)
ii. withknowledgebutwithoutconsentofdebtor(1285,par.2)
iii. withoutknowledgeofdebtor(1285,par.3)
6. Novation
a. Concept(1291)
i. Changeindebtor
ii. Changeinobject
iii. Changeinthirdpersonwhoissubrogated
iv. Changeincreditorwithitsconsentoratitsinstanceisnotnovation
b. Kinds
i. Astoform:expressorimplied
ii. Astoorigin:conventionalorlegal
iii. Astoobject
• objectiveorreal
• subjectiveorpersonal
• mixed
c. Requisites(1292)
▪ Millarv.CourtofAppeals,38SCRA642
▪ Dormitoriov.Fernandez,72SCRA388
▪ MagdalenaEstatev.Rodriguez,18SCRA967
▪ Reyesv.SecretaryofJustice,264SCRA35
▪ Cochingyanv.RBSuretyandInsurance,151SCRA339
38
Course Outline
▪ BroadwayCentrumCondominiumv.TropicalHut,224SCRA302
▪ Molinov.SecurityDinersInternational,363SCRA358
▪ Garciav.Llamas,417SCRA292
▪ CaliforniaBusLinesv.StateInvestment,418SCRA297
▪ Babstv.CourtofAppeals,350SCRA341
d. Effects(1296)
e. EffectsoftheStatusoftheOriginalandNewObligation
i. nullityorvoidabilityoforiginalobligation(1298)
ii. nullityorvoidabilityofnewobligation(1297)
iii. suspensiveorresolutoryconditionororiginalobligation(1299)
f. ObjectiveNovation
g. SubjectiveNovation
i. Bychangeofdebtor
• Expromision
- Requisites(1293)
- Effects(1294)
• Delegacion
- Requisites(1293)
- Effects(1295)
▪ Garciav.Llamas,417SCRA292(2003)
▪ Quintov.People,305SCRA709(1999)
ii. Bychangeofcreditor–subrogationofathirdpersonintherightsofthe
creditor(1300)
• Conventionalsubrogation
- Requisites(1301)
- Distinguishedfromassignmentofcredit
- Effects(1303‐1304)
▪ Licarosv.Gatmaitan, G.R. No. 142838. August 9, 2001
• LegalSubrogation
- Requisites
- Whenpresumed(1302)
- Effects(1303‐1304)
▪ AstroElectronicsCorp.v.PhilippineExportandForeignLoan
Guarantee Corp., G.R. No. 136729. September 23, 2003
7. Other modes
Part Three: CONTRACTS
a. Auto-contract (1491, 1646, 1890)
2. Classification
a. Accordingtosubjectmatter
i. Things
ii. Services
b. Accordingtoname
39
Course Outline
i. Nominate
ii. Innominatecontracts(1307)
c. Accordingtoperfection
i. Consensual (1315, 1475)
ii. Real (1316, 1934)
iii. Formal (1356)
d. Accordingtoitsrelationtoothercontracts:
i. Preparatory (1479, 1767, 1868)
ii. Principal (1458, 1638, 1642, 1933, 1962)
iii. Accessory (2047, 2085)
e. Accordingtoform
i. Informal
ii. Formal(1356)
f. Accordingtopurpose
i. Transfer of ownership (725, 1458, 1638)
ii. Conveyance of use (561, 1642, 1933)
iii. Rendition of service (1642, 1868)
g. Accordingtonatureoflegaltiecreated
i. Unilateral (2047, 2093)
ii. Bilateral (1642, 1458)
h. Accordingtocause
i. Onerous(1458, 1638, 1642)
ii. Gratuitous (725, 1933)
iii. Remuneratory
i. Accordingtorisk
i. Commutative
ii. Aleatory(2010)
▪ Dizonv.Gaborro,83SCRA688
3. Characteristics
a. Consensuality of Contracts (1305, 1317)
i. Contracts of Adhesion
▪ Republic v. PLDT, 26 SCRA 620
▪ Corpus v. CA, 98 SCRA 424
b. Autonomy of Contracts (1306, 1799, 2088, 2130)
▪ Cui v. Arellano 2 SCRA 205
▪ Saura v. Sandico 107 Phil 336
▪ Leal v. IAC, 155 SCRA 394
c. ObligatoryForcebetweentheParties(1308)
i. GeneralRule:FreedomtoContract(1306)
▪ Gabrielv.MontedePiedad,71Phil.497
▪ PakistanInternationalAirlinesv.Ople,190SCRA90
ii. Exceptions:
• Whenitisinequitable(1310)
• Specialdisqualifications(1490, 1491, 1782,FamilyCode 87)
iii. Whatmaynotbestipulated
•ContrarytoLaw
- pactumcommisorium(2088)
- pactumleonina(1799)
40
Course Outline
- pactumdenonalienado(2130)
- otherlimitations:LaborCode,CorporationCode
• Contrarytomorals
• Contrarytogoodcustoms
• Contrarytopublicorder
• Contrarytopublicpolicy
▪ Cuiv.Arellano,supra
▪ Arroyov.Berwin,36Phil386
▪ FilipinasCompañiadeSegurosv.Mandanas,17SCRA391
▪ Bustamantev.Rosel,319SCRA413
iv. Effectofcontractastothirdparties
• Performancemaybedeterminedbythirdparties(1309)
• Whenpossessionoftheobjectofthecontractiswithathirdperson
(1312)
• Creditorsofcontractingparties(1313,1177,1381)
• Interferencebythirdparties(1314)
▪ Daywaltv.LaCorporacióndelosPadresAgustinosRecoletos, 39
Phil.587
▪ SoPingBunv.CourtofAppeals,314SCRA751
▪ Lagonv.CourtofAppeals,453SCRA616
d. Mutuality(1308-1310;1473)
▪ GSISv.CourtofAppeals,228SCRA183
▪ ProfessionalAcademicPlans,Inc.v.Crisostomo,453SCRA342
e. RelativityorPrivityofContracts(1311)
i. Contractstakeeffectonlybetweenparties,theirassignsandheirs
▪ ManilaRailroadCo.v.LaCompaniaTransatlantica,38Phil.875
▪ DKCHoldingsCorp.CourtofAppeals,329SCRA666
ii. Noonemaycontractinthenameofanother(1317)
▪ GutierrezHermanosv.Orense,28Phil.571(1914)
iii. Stipulationsinfavorofthirdpersons(1311,par.2)
▪ Florentinov.Encarnacion,79SCRA192
▪ Coquiav.FieldmenInsuranceCo.,26SCRA178
▪ Constantinov.Espiritu,39SCRA178
▪ Youngv.CourtofAppeals,169SCRA213
▪ MarmontResortv.Guiang,168SCRA373
▪ MandarinVillav.CourtofAppeals,257SCRA538
4. Stages of Contracts
▪ C.F. Sharp & Co. v. Pioneer Insurance & Surety Corporation, G.R. No. 179469,
February 15, 2012
a. Negotiation
b. Perfection
c. Performance or Consummation
B. EssentialRequisitesofContracts
1. Consent:Requisites(1319)
a. PerfectionofContract:OfferandAcceptance
i. Offer
41
Course Outline
• mustbecertain(1319)
• whatmaybefixedbytheofferor(1321)
• whenmadethroughanagent(1322)
• whenofferbecomesineffective(1323)
• businessadvertisementsofthingsforsale(1325)
• advertisementsforbidders(1326)
ii. Acceptance
• mustbeabsolute(1319)
• kinds:
- express(1320)
- implied(1320)
- qualified(1319)
• periodofacceptance(1324)
• optioncontract(1324)
▪ Sanchezv.Rigos,45SCRA368
. iii. Termination of Offer
iv. PerfectionofContract
• Manifestationtheory
• Expeditiontheory
• Receptiontheory
• Cognitiontheory(1319[2])
▪ Rosenstockv.Burke,46Phil.217
▪ Malbarosav.CourtofAppeals,402SCRA168
▪ SanLorenzoDevelopmentCorporationv.CourtofAppeals,449
SCRA99
▪ MMDAv.Jancom, 375 SCRA 320
b. LegalCapacityoftheParties
i. Minors,insaneordementedpersons,anddeaf‐muteswhodonotknow how
towrite(1327)
ii. Whenofferoracceptanceismadeduringalucidinterval,intoxication,
duringhypnoticspell(1328)
iii. Corporations(Sections22and35,Revised CorporationCode)
c. VicesofConsent
i. Rule: ConsentmustbeIntelligent,Free,Spontaneous,Real (1330)
ii. MistakeorError
• MistakeofFact
- Astosubstanceoftheobject
- Astoprincipalconditions
- Astoidentityorqualificationsoftheparties
- Astoquantity,asdistinguishedfromsimplemistakeof
account
▪ Asiainv.Jalandoni,45Phil296
▪ HeirsofWilliamSevillav.Sevilla,402SCRA501
▪ Andresv.ManufacturersHanoverandTrust,177SCRA618
▪ SpousesTheisv.CourtofAppeals,268SCRA167
• MistakeorErrorofLaw
- GeneralRule:Ignoranceofthelawexcusesno one(3)
- Exception:MutualErrorofLaw(1334)
42
Course Outline
• Mistakewhenonepartyisunabletoread(1332)
▪ Dumasugv.Modelo,34Phil252
▪ Hemedesv.CourtofAppeals,316SCRA347
▪ Lustanv.CourtofAppeals,266SCRA663
▪ Katipunanv.Katipunan,375SCRA199
▪ Leonardov.CourtofAppeals,438SCRA201
• Inexcusablemistake(1333)
iii. ViolenceorIntimidation(1335)
▪ Martinezv.HSBC,15Phil.252
▪ Leev.CourtofAppeals,201SCRA405
iv. UndueInfluence(1337)
v. FraudorDolo(1338)
• Dolocausante(1338) v. Doloincidente(1344[2])
▪ Hillv.Veloso,31Phil.161
▪ Woodhousev.Halili,supra.
▪ Geraldezv.CourtofAppeals,230SCRA320
▪ Sierrav.CourtofAppeals,211SCRA785
• FailuretoDiscloseFactswhenthereisadutytorevealthem(1339)
▪ Tuasonv.Marquez,45Phil381
▪ RuralBankofSta.Mariav.CA,314SCRA255
• Usualexaggerationsintrade:opportunitytoknowthefacts(1340)
▪ Azarragav.Gay,52Phil.599
▪ Trinidadv.IntermediateAppellateCourt,204SCRA524
• Mereexpressionofopinion(1341);Effects(1344)
▪ Songcov.Sellner,37Phil.254
vi. Misrepresentation
• byathirdperson(1342)
• madeingoodfaith(1343)
• activeorpassive
▪ Mercadov.Espiritu,37Phil.215
▪ Braganzav.VillaAbrille,105Phil.456
d. SimulationofContracts
i. Kinds:AbsoluteandRelative(1345)
ii. Effects(1346)
▪ Rodriguezv.Rodriguez,28SCRA229
▪ Suntayv.CourtofAppeals,251SCRA430
▪ Pangadiletal.v.CourtofFirstInstance,G.R.No.L32437,August31,1982
▪ Umaliv.CourtofAppeals, 189 SCRA 529
2. Object
a. Mustbedeterminateastoitskind(1379)
b. WhatmayNOTbeobjectsofcontracts(1347)
i. Allthingsoutsidethecommerceofman
ii. Allintransmissiblerights
iii. Thoseserviceswhicharecontrarytolaw,morals,goodcustoms,public
order,orpublic policy
iv. Futureinheritance,exceptwhenauthorizedbylaw
v. Impossiblethingsorservices(1348)
▪ Blasv.Santos,1SCRA899
43
Course Outline
▪ JLTAgro,Inc.v.Balansag, 453 SCRA 211
3. Cause
a. MeaningofCause(1350)
i. inonerouscontracts
ii. inremuneratorycontracts
iii. incontractsofpurebeneficence
b. DistinguishedfromMotive (1351)
c. Presumption:ExistenceandLawfulnessofCause(1354)
d. DefectiveCausesandEffects:
i. AbsenceofCauseorUnlawfulCause(1352)
ii. StatementofFalseCause(1355)
iii. InadequacyofCauseorLesion(1355)
▪ Liguezv.CourtofAppeals,102Phil.577
▪ Carantesv.CourtofAppeals,76SCRA514
▪ SpousesBuenaventurav.CourtofAppeals,416SCRA263
C. Form of Contracts
1. General Rule: Obligatory in whatever form (1356)

2. Exception: When required by law (1356)
a. Kindofformalitiesrequiredbylaw:
i. Forvalidity(748,749,1874,2134,1771,1773, 1744, 1874, 1956)
ii. Tomakeiteffectiveastothirdparties(1357,1358)
iii. Forpurposesofprovingexistenceofcontract(1403)
▪ Hernaezv.delosAngeles,27SCRA1276
▪ Resuenav.CourtofAppeals, 454 SCRA 42
D. Interpretation of Contracts
1. Vis-à-vis rules on statutory construction

2. PrimacyofIntention(1370,1372)
▪ Borromeov.CourtofAppeals,47SCRA65
▪ Kasilagv.Rodriguez,69Phil.217
▪ Santiv.CourtofAppeals,G.R.No.93625,227SCRA54
a. How intention is determined (1371)
▪ Rapanutv.CourtofAppeals,246SCRA323(1995)
3. Rules of Interpretation
a. Under Civil Code
i. When stipulations admitofseveralmeanings (1373)
▪ OilandNaturalGasCommissionv.CA, 293 SCRA 26
ii. Whenitcontainsvariousstipulations,someofwhicharedoubtful(1374)
▪ SpousesRigorv.ConsolidatedOrixLeasingandFinanceCorporation, 387
SCRA 437
iii. Whenitcontainswordswithdifferentmeanings(1375)
iv. Whenitcontainsambiguitiesandomissionofstipulations(1376)
▪ Chuav.CourtofAppeals, 401 SCRA 54
v. Withrespecttothepartywhocausedtheobscurity(1377)
▪ RizalCommercialBankingCorporationv.CourtofAppeals, 305 SCRA 449
44
Course Outline
vi. Whenitisimpossibletosettledoubtsusingtheabove‐citedrules(1378)
• Ingratuitouscontracts
▪ Gacosv.CourtofAppeals,G.R.Nos.8596263,August3,1992
• Inonerouscontracts
vii. Whendoubtsarecastupontheprincipalobjectsothatthetrueintention
cannotbeknown(1378)
b. UndertheRulesofCourt(Rule130,Sections10to19)
E. Reformation of Contracts
1. Requisites(1359)
a. Meetingoftheminds
b. Trueintentionofthepartiesarenotexpressedintheinstrument
c. Failuretoexpresstrueintentionduetomistake,fraud,inequitableconduct,or
accident
▪ Garciav.Bisaya,97Phil.609
▪ Bentirv.Leande,330SCRA591
▪ Quirosv.Arjona, 425 SCRA 57
2. WhenReformationisnotallowed(1366)
3. ImpliedRatification(1367)
4. Whomayaskforreformation(1368)
5. Procedureforreformation(1369)
▪ Atilanov.Atilano,28SCRA2232
▪ Sarmingv.Dy,383SCRA131
F. Defective Contracts
1. Rescissible Contracts
a. Definition(1380)
b. Kinds(1381)
c. Characteristics
i. Thedefectconsistsininjuryordamageeithertooneofthecontractingparties
oftoathirdperson
ii. Contractisvalidbeforerescission
iii Attackmayonlybedirecton,notcollaterally
iv. Attackmaybedonebycontractingpartyorbyathirdpersonwhoisinjuredor
defrauded
v. Validatedonlybyprescriptionandnotbyratification
d. Requisites
i. Contractisrescissible
ii. Partyaskingforrescissionhasnootherlegalmeanstoobtainreparation
(1383)
▪ UnionInsuranceSocietyofCantonv.CourtofAppeals, 260 SCRA 431
iii. Heisabletoreturnwhathemaybeobligedtorestoreifrescissionisgranted
(1385)
▪ Riverav.delRosario, 419 SCRA 626
e. Rescission; distinguishedfromRescissionin1191
45
Course Outline
▪ UniversalFoodCorporationv.CourtofAppeals,33SCRA1
▪ SpousesCannuv.SpousesGalang, 459 SCRA 80
▪ Iringanv.CourtofAppeals, 366 SCRA 41
▪ Riverav.delRosario, 419 SCRA 626
▪ EquatorialRealtyv.MayfairTheatre, 370 SCRA 56
f. EffectofRescission(1385)
a. Astothirdpersonswhoacquiredthingingoodfaith(1385par [2]and[3])
b. Astothirdpersonswhoacquiredthingsinbadfaith,whenalienationwasin
fraudofcreditors(1388)
g. ExtentofRescission(1387)
▪ Siguanv.Lim,318SCRA725(1999)
h. BadgesofFraud(1387)
▪ Oriav.McMicking,21Phil,243
▪ Siguanv.Lim,318SCRA725
▪ Suntayv.CourtofAppeals,251SCRA430
▪ ChinaBankingCorporationv.CourtofAppeals, 327 SCRA 378
▪ MRHoldingsLimitedv.Carlos, 380 SCRA 617
2. Voidable or Annullable Contracts
a. Kinds(1390)
b. Characteristics
i. Thereisadefectinconsentofoneofthecontractingparties
ii. Bindinguntilannulledbyacompetentcourt
iii. Maybevalidatedbyratificationorprescription
▪ Felipev.HeirsofAldon,120SCRA628(1983)
c. Annulment
i. DistinguishedfromRescission
ii. Grounds(1390)
iii. WhoMayorMayNotInstituteActionforAnnulment(1397)
▪ Singsongv.IsabelaSawmill,88SCRA623
▪ SamahanngMagsasakasaSanJosepv.Valisno,430SCRA629
▪ Malabananv.GawChing,181SCRA84
▪ Armentiav.Patriarca,18SCRA1253
iv. Prescription(1391)
v. Effect:MutualRestitution(1398and1402)
▪ Cadwallader&Co.v.Smith,Bell&Co.,7Phil.461
▪ Velardeetal.v.CourtofAppeals,361SCRA56
▪ Inesv.CourtofAppeals,247SCRA312
▪ ArraRealtyCorporationv.GuaranteeDevelopmentCorporation,438SCRA
441
• Whenonethepartiesisincapacitated(1399)
▪ Katipunanv.Katipunan,375SCRA199
• Whenthethingislostthroughthefaultofthepartyobligedtoreturn
the same(1400)
vi. ExtinguishmentofActionforAnnulment
i. byratification(1392)
46
Course Outline
ii. Whenthethingislostthroughthefaultofthepersonwhohastherighttofile
theaction(1401)
d. Ratification
i. Requisites
• Contractisvoidable
• Ratificationismadewithknowledgethatcontractisvoidable
• Atthetimeofratification,thecausefornullityhasalreadyceasedto
exist
ii. Forms
• Expressortacit(1393)
• Bythepartiesthemselvesorbytheguardianinbehalfofan
incapacitatedparty(1394)
iii. Effects
• actiontoannulisextinguished(1392)
▪ UySooLimv.TanUnchuan,38Phil.552(1918)
• contractiscleansedretroactivelyfromallitsdefects(1396)
3. UnenforceableContracts
a. Characteristics
i. Validbutcannotbeenforcesbyaproperactionincourt
ii. Canberatified
iii. Cannotbeassailedbythirdpersons
b. Kinds(1403)
i. Unauthorizedcontracts(1404)
ii. ContractscoveredbyStatuteofFrauds
• PurposeofStatuteofFrauds
▪ AsiaProductionCo.Inc.v.JudgePano,205SCRA458
▪ WesternMindanaoCo.v.Medalle,79SCRA703
▪ Limketkai&Sonsv.CourtofAppeals,250SCRA523
▪ Babaov.Perez,102Phil.756
▪ Reissv.Memije,15Phil.350
▪ Villanuevav.CourtofAppeals,267SCRA89
• HowRatified(1405)
▪ PhilippineNationalBankv.PhilippineVegetableOilCo.49Phil.857
▪ Carbonnellv.Poncioetal,103Phil.655
▪ FirstPhilippineInternationalBankv.CourtofAppeals,252SCRA
259
• RightofthePartieswhenaContractisenforceablebutapublic
document isnecessaryforitsregistration(1406)
iii. Contractsexecutedbyparties bothincapableofgivingconsent
• Effectofratificationbytheparentsorguardianofoneoftheparties
(1407)
• Effectofratificationbytheparentsorguardianofbothparties(1407)
4. Void or Inexistent Contracts
a. Characteristics
i. Voidfromthebeginning
ii. Producesnoeffectwhatsoever
iii. Cannotberatified(1409)
▪ Tongoyv.CourtofAppeals,123SCRA99
47
Course Outline
▪ Cuiv.Arellano,2SCRA205
▪ Chavezv.PresidentialCommissiononGoodGovernment,307SCRA372
▪ Guiangv.CourtofAppeals,291SCRA372
▪ Castillov.Galvan,85SCRA526
b. Void Contracts
i. Thosewhosecause,objectorpurposeiscontrarytolaw,morals,good
customs,publicorderorpublicpolicy
• Whentheactconstitutesacriminaloffense(1411)
• Whentheactisunlawfulbutdoesnotconstituteacriminaloffense
(1412)
- Inparidelictorule
▪ Menchavezv.Teves,449SCRA380
▪ Angelv.AledoandModales,420SCRA645
• Whenthepurposeisillegalandmoneyispaidorproperty
deliveredtherefore(1414)
• Whenthecontractisillegalandoneofthepartiesisincapableof giving
consent(1415)
▪ Liguezv.CourtofAppeals,102Phil.577
▪ Rellosav.GawCheenHum,93Phil827
• Whentheagreementisnotperseillegalbutprohibited(1416)
▪ PhilippineBankingCorporationv.LuiShe,21SCRA52
▪ Frenzelv.Catito,406SCRA55
▪ AcabalandNicolasv.Acabal,454SCRA555
• Whentheamountpaidexceedsthemaximumfixedbylaw(1417)
• Whenbyvirtueofacontractalaborerundertakestoworklonger than
themaximumnumberofhoursofworkfixedbylaw(1418)
• Whenthecontractisdivisible(1420)
• Whenthecontractisthedirectresultofapreviouslyillegalcontract
(1422)
ii. Thosewhoseobjectisoutsidethecommerceofman
iii. Thosewhichcontemplateanimpossibleservice
iv. Thosewheretheintentionofthepartiesrelativetotheprincipal
objectofthecontractcannotbeascertained
v. Thoseexpresslyprohibitedbylaw
c. InexistentContracts
i. thosewhichareabsolutelysimulatedorfictitious(1345-1346)
ii. thosewhosecauseorobjectdidnotexistatthetimeofthetransaction
d. NoWaiverofDefenseofIllegality(1409)
e. ActionorDefensefortheDeclarationoftheInexistenceofaContract
i. Noprescriptionperiod(1410)
ii. Notavailabletothirdpersonsnotdirectlyaffected(1421)
Part Four: SPECIFIC EXAMPLES OF OBLIGATIONS
A. Estoppel
1. Definition(1431)
▪ Kalalov.Luz,34SCRA337
2. Kinds
48
Course Outline
a. Technicalestoppel
i. byrecord
ii. bydeed(1433)
b. Equitableestoppelorestoppelinpais(1433)
3. PersonsBound(1439)
▪ ManilaLodgeNo.761BenevolentandProtectiveOrderoftheElksv.CourtofAppeals,73SCRA
168
4. Application(1434-1438)
▪ Miguelv.Catalino,26SCRA234
▪ Read:Annotation32SCRA542
▪ Mendozav.ReyesandCourtofAppeals,G.R.No.L31618,August17,1983
B. Trusts
1. Definition(1442)
2. Parties(1440)
a. Trustor
b. Trustee
c. Beneficiaryorcestuiquetrust
▪ Salaov.Salao,70SCRA168(1976)
3. Kinds(1441)
a. Expresstrusts
i. Proofrequired(1443)
ii. Form(1444)
iii. Wantoftrustee(1445)
iv. Acceptancebythebeneficiary(1441)
b. ImpliedTrusts
i. Howestablished(1441)
ii. Howproved(1457)
iii. Specificcases(1448to1456)
▪ Fabianv.Fabian,22SCRA231
▪ Buenov.Reyes,27SCRA1179
▪ Tamayov.Callejo,46SCRA27
▪ HeirsofSanjorjov.Quijano, 449 SCRA 15
▪ AznarBrothersRealtyCompanyv.Aying, 458 SCRA 496
- end -

Sinaon v. Sorongon, 136 SCRA 407

Uploaded by

Copyright:

Available Formats

You might also like

Sinaon v. Sorongon, 136 SCRA 407

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Sinaon v. Sorongon, 136 SCRA 407

Uploaded by

Copyright:

Available Formats

Adamson University

Obligations and Contracts

Part One: PRESCRIPTION

▪ Sinaon v. Sorongon, 136 SCRA 407

▪ Lovina v. Moreno, 9 SCRA 557

a. Effect on creditors and interested third persons (1114)

▪ Callanta v. Carnation Philippines, 145 SCRA 268

B. Prescription of Ownership and Other Real Rights

1. Manner; acquisitive prescription

▪ Ramirez v. CA, 144 SCRA 292

Article 1121 Possession is interrupted naturally when through any cause it

b. Civil (1123, 1124, 1136)

1. If it should void for lack of legal solemnities;

c. Possessor’s recognition of owner’s right (1125)

▪ Corpus v. Padilla, 5 SCRA 814

▪ Negrete v. CFI of Marinduque, supra

4. Just title (1129-1131)

A title of the possessor must be just, true, valid and proved.

▪ Doliendo v. Biarnesa, 7 Phil. 232

b. Immovables (1134, 1135, 1137)

c. Computation (1138) (tacking)

▪ South City Homes v. Republic, 185 SCRA 693

▪ Tan v. CA, 195 SCRA 355

Elements of a good cause of action

⮚ In suspensive condition, prescription runs only from the

⮚ When period was specified when will a debt should be paid

⮚ Action is based on fraud or deceit, the period of prescription

⮚ Quasi-delict prescriptive period starts from the day the quasi-

⮚ Partition and reconveyance based on implied or constructive

⮚ The period of prescription of the right of the nearest relative as

⮚ The prescriptive period within which to bring an action to set

⮚ Article 1152 The period for prescription of actions to demand

⮚ Article 1153 The period for prescription of action to demand

▪ Dira v. Tanega, supra

b. Fortuitous event; effect (1154)

⮚ The statute of limitations is suspended by war, rebellion or

1. Prescription of actions are filed before the court

⮚ When the prescription is interrupted by a judicial demand, the

▪ Ledesma v. C, 224 SCRA 175

Part Two: OBLIGATIONS

Conditions of Natural Obligations

ii. Distinguished from Moral Obligations

▪ Villaroel v. Estrada, 71 Phil 140

Quasi-contract- is a juridical relation which arises from certain lawful, voluntary,

▪ Cruz v. Tuazon & Co., 76 SCRA 543

a juridical relation which takes place when somebody received something

iii. Others (2164-2175)

c. Delicts (1167, 2177, RPC 100 and 104)

B. Nature and Effects of Obligations

⮚ Accessions- referring to those things which, destined for

Circumstances When the delivery should be made

Personal Right- the power belonging to one person to demand another,

Waiver of defects- the defects of the thing delivered may be

2. Breach of Obligation (1170)

• Mora solvendi- a default on the part of the debtor may either be

Demand is not necessary

- The creditor incurs delay when the debtor tenders payment