PROF. CHRISTINE JOY K.

TAN FIRST SEMESTER, 2019-2020

OUTLINE IN OBLIGATIONS AND CONTRACTS

Title I: OBLIGATIONS

Chapter I: General provisions (1156 to 1162)

I. Concept

A. Elements
B. Natural and civil obligations

II. Sources of obligations

A. Law
B. Contracts
C. Quasi contracts
D. Delicts
E. Quasi-delicts

Cases:
-Barredo v. Garcia, 73 Phil. 607 (1942)
-Mendoza v. Arrieta, 91 SCRA 113 (1975)
-PSBA v. Court of Appeals, 205 SCRA 729 (1992)
-Amadora v. CA, 160 SCRA 315
-St. Joseph v. Miranda, GR No. 182353, June 29, 2010
-Josefa v. Meralco, GR No. 182705, July 18, 2014
-Reyes v. Doctolero, GR No. 185597, August 2, 2017
-Imperial v. Heirs of Spouses Bayaban, GR No. 197626, October 3, 2018

 Article 1305
 Article 2142
 Article 2144
 Article 2154
 Articles 2164 to 2175
 Article 2180
 Family Code, Articles 218 and 219
 Family Code, Article 236

Chapter II: Nature and effects of obligations (1163 to 1178)

I. Kinds of prestation

A. Obligation to give

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 a. Specific thing
b. Generic thing

B. Obligation to do
C. Obligation not to do

 Article 1244
 Article 1246

II. Breach of obligations

A. Concept
a. Substantial v. casual breach

B. Modes of breach
a. Fraud

Cases:
-Geraldez v. CA, 231 SCRA 320

b. Negligence

Cases:
-Gutierrez v. Gutierrez, 56 Phil. 177
-De Guia v. Manila Electric Co., 40 Phil. 706
-Sarmiento v. Cabrido, 401 SCRA 122
-Francisco, G.R. No. 193577. September 7, 2011

c. Delay

Cases:
-Santos Ventura Hocorma Foundation v. Santos, GR No. 153004, November 4, 2004
-Vazquez v. Ayala Corp., GR No. 149734, November 19, 2004
-Vda de Villaruel v. Manila Motor Co. Inc., 104 Phil. 926
-Tengco v. CA, 49852, October 19, 1989
-Central Bank v. CA, 139 SCRA 46
-SSS v. Moonwalk Development and Housing Corp., 221 SCRA 119
-Binalbagan tech. V. CA, 219 SCRA 777
-Agcaoili v. GSIS, 165 SCRA 1
-Spouses Guanio v. Makati Shangri-La, GR No. 190601, February 7, 2011

d. Contravention of tenor of obligation

Case:
-Telefast v. Castro, 158 SCRA 445
-DM Ragasa Enterprise, Inc. v. Banco de Oro, Inc., GR No. 190512, June 20, 2018

III. Remedies of creditor in case of breach

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 A. Specific performance
B. Substituted performance

Cases:
-Tanguilig v. CA, 266 SCRA 78

C. Undoing of act
D. Damages
E. Rescission
F. Other specific remedies

 Article 1191
 Article 1192

IV. Fortuitous events

A. Concept
B. Requisites

Cases:
-Juan Nakpil & Sons v. CA, 144 SCRA 597
-Republic v. Luzon Stevedoring, 21 SCRA 279
-Dioquino v. Laureano, 33 SCRA 65
-Austria v. CA, 39 SCRA 527
-NPC v. CA, 161 SCRA 334
-Yobido v. CA, 281 SCRA 1
-Philcomsat v. Globe Telecom, GR No. 147324, May 25, 2004
-Fil-Estate Properties v. Spouses Go, GR No. 165164, August 17, 2007

C. Exceptions

 Article 1165(3)
 Article 552
 Article 1942
 Article 1979
 Article 2001
 Article 2147

V. Usurious transactions

Cases:
-Eastern Shipping Lines v. CA, 234 SCRA 781
-Nacar v. Gallery Frames, GR No. 189871, August 13, 2013
(University of Pangasinan v. Fernandez, GR No. 211228, November 12, 2014)
-Spouses Jonsay v. Solidbank, GR No. 206459, April 6, 2016

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  BSP Circular No. 799 Series of 2013: The rate of interest for the loan or forbearance of money, goods or
credits, and the rate allowed in judgments, in the absence of an express contract as to such rate of interest,
shall be 6% per annum.
 Article 1413
 Article 1961

VI. Receipt of principal and interest

VII. Subsidiary remedies of the creditor

A. Accion subrogatoria
B. Accion pauliana

Cases:
-Khe Hong Cheng v. CA, 355 SCRA 701
-Siguan v. Lim, 318 SCRA 725

C. Other remedies

 Article 1652
 Article 1729
 Article 1608
 Article 1893

VIII. Transmissibility of rights

Chapter III: Different kinds of obligations (1179 to 1230)

I. Pure and conditional obligations

A. Pure obligations
B. Conditional obligations

Cases:
HSBC v. Spouses Broqueza, GR No. 178610, November 17, 2010
Gonzales v. Heirs of Thomas, 314 SCRA 585

C. Kinds of conditions:
a. As to effect on obligation
-suspensive
-resolutory

Cases:
-Coronel v. CA, GR No. 103577, October 7, 1996
-Parks v. Province of Tarlac, 49 Phil. 142

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 -Central Phil. University v. CA, 246 SCRA 511
-Quijada v. CA, GR No. 126444, December 4, 1998

b. As to cause or origin
-potestative
-casual
-mixed

Cases:
-Lim v. CA, GR No. 87047, October 30, 1990
-Naga Telephone Co. v. CA, GR No. 107112, February 24, 1994
-Osmena v. Rama, 14 Phil. 99
-Taylor v. Uy Tieng Piao, 43 Phil. 873
-Romero v. CA, GR No. 107207, November 23, 1995
-Catungal v. Rodriguez, GR No. 146839, March 23, 2011

c. As to possibility
-possible
-impossible

Case:
-Roman Catholic Archbishop of Manila v. CA, 198 SCRA 300

d. As to mode
-positive
-negative

D. Rules in case of loss, deterioration or improvement

E. Effect of prevention of the fulfilment of the condition by the obligor

Case:
-Taylor v. Uy Tieng Piao, 43 Phil. 873

F. Reciprocal obligations
a. Concept
b. Remedies in case of breach
-fulfilment
-rescission

Cases:
-Palay v. Clave, 124 SCRA 638
-Philippine Amusement Enterprises v. Natividad, 21 SCRA 284
-Song Fo v. Hawaiian Phil., 47 Phil 821
-University of the Philippines v. De Los Angeles, 35 SCRA 365
-Angeles v. Calasanz, 135 SCRA 323
-Deiparine v. CA, GR No. 96643, April 23, 1993
-Iringan v. CA, 366 SCRA 41
-Vda de Mistica v. Naguiat, GR No. 137909, December 11, 2003
-F.F. Cruz v. HR Construction, GR No. 187521, March 14, 2012
Compare with Sangguniang Panlunsod ng Baguio v. Jadewell Parking System
Corp., GR No. 160025, April 23, 2014

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 -Spouses Lam v. Kodak Phils Limited, GR No. 167615, January 11, 2016
-Nissan Car Lease Inc. v. Lica Management Inc., GR No. 176986, January 13, 2016
-G Holdings v. Cagayan Electric Power and Light Company, Inc. GR No. 226213,
November 20, 2017

II. Obligation with a period (1193 to 1198)

A. Period or term
B. Kinds of period or term
C. Rules in case of loss, deterioration or improvement
D. Effects of payment in advance
E. Benefit of period
a. For whose benefit
b. Effects
c. Presumption

Cases:
-Ponce de Leon v. Syjuco, 90 Phil. 311
-Buce v. CA, 332 SCRA 151

F. Court to fix period

Cases:
-Araneta v. Philippine Sugar Estates development Co., 20 SCRA 330
-Central Philippine University v. CA, 246 SCRA 511
-Millare v. Hernando, 151 SCRA 484
-Radiowealth Finance Co. v. del Rosario, 335 SCRA 288

G. When debtor loses right to make us of the period

III. Alternative obligations (1199 to 1206)

A. Concept
B. Right of choice
C. Effect of notice of choice
D. When notice produces effect
E. When debtor loses right of choice
F. Effect of loss or impossibility
G. Facultative obligation

IV. Joint and solidary obligations (1207 to 1222)

A. Joint obligations
a. Concept
b. Requisites
c. Words used to indicate joint obligation
d. Presumption
e. Effects

B. Solidary obligations
a. Concept

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 b. Requisites
c. Words used to indicate solidary obligation
d. Kinds of solidary obligation
-legal
-conventional
-real
e. Effects
-solidary creditor and common debtor
-solidary creditor and solidary co-creditors
-solidary debtor and common creditor
-solidary debtor and solidary co-debtor
f. Defenses available to solidary debtor against the creditor

Cases:
-Ynchausti v. Yulo, 34 Phil. 978
-Jaucian v. Querol, 38 Phil 718
-Quiombing v. CA, 189 SCRA 325
-Inciong v. CA, 257 SCRA 578

 Article 1915
 Article 1945
 Article 2194
 Revised Penal Code, Article 119

V. Divisible and indivisible obligations (1223 to 1225)

A. Concept
B. Effects
C. Kinds
D. Presumptions of divisibility and indivisibility
E. Divisibility and indivisibility in obligations not to do

VI. Obligations with a penal clause (1226 to 1230)

A. Substitute for indemnity for damages and payment of interest

B. Debtor not exempt from performance
C. Creditor cannot demand both performance and penalty
D. Creditor cannot collect other damages in addition to penalty
E. When penalty shall be equitably reduced
F. Nullity of principal obligation or penal clause

Cases:
-Makati Devlopment Corp. v. Empire Insurance Co., 20 SCRA 557
-Tan v. CA, 367 SCRA 571
-Country Bankers Insurance v. CA, GR No. 85161, September 9, 1991
-DM Ragasa Enterprise, Inc. v. Banco de Oro, Inc., GR No. 190512, June 20, 2018
-Sanico v. Colipano, GR No. 209969, September 27, 2017

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Chapter IV: Extinguishment of obligations

I. Modes of extinguishment (1231)

II. Payment or performance (1232-1261)

A. Concept

Cases:
-Arrieta v. CA, 10 SCRA 79
-Kalalo v. Luz, 34 SCRA 377
-Papa v. AV Valencia, 284 SCRA 643
-PAL v. CA, 181 SCRA 557

B. Requisites

 Article 1302
 Article 1169

C. Application of payment

Case:
-Paculdo v. Regalado, 345 SCRA 134

D. Payment by cession
E. Dation in payment

Case:
-Filinvest Credit Corp. v. Phil. Acetylene, GR No. L-50449, January 30, 1982

F. Tender of payment and consignation

Cases:
-De Guzman v. CA, 137 SCRA 730
-TLG international Continental Enterpris v. Flores, 47 SCRA 437
-Soco v. Militante, 123 SCRA 160
-Pabugais v. Sahijwani, GR No. 156846, February 23, 2004
-Dalton v. FGR Realty, GR No. 172577, January 19, 2011

III. Loss or impossibility (1262-1269)

A. Loss of thing due

B. Impossibility of performance

Cases:
-Occena v. CA, 73 SCRA 637
-Naga Telephone Co. v. CA, 230 SCRA 351
-PNCC v. CA, GR No. 116896, May 5, 1997
-Eastern Telecommunications Philippines v. Eastern Telecoms Employees Union, GR No. 185665.
February 8, 2012

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 -Comglasco v. Santos Car Check Center Corp., GR No. 202989, March 25, 2015
-So v. Food Fest Land, GR No. 183628, April 7, 2010
-Poon v. Prime Savings Bank, GR No. 183794, June 13, 2016

 Article 1189(2)

IV. Condonation or remission (1270-1274)

A. Concept
B. Kinds
C. Requisites
D. Presumptions
E. Effects
F. Renunciation of principal or accessory obligation

Case:
-Yam v. CA, GR No. 104726, February 11, 1999

V. Confusion or merger of rights (1275-1277)

A. Concept
B. Requisites
C. Effects
D. Confusion in principal or accessory obligations

VI. Compensation (1278-1290)

A. Concept
B. Kinds
C. Legal compensation: requisites and effects

Cases:
-Gan Tion v. CA, 28 SCRA 235
-Silahis Marketin Corp. v. IAC, GR No. 74027, December 7, 1989
-Mirasol v. CA, GR No. 128448, February 1, 2001
-Montemayor v. Millora, G.R. No. 168251. July 27, 2011

D. When compensation not allowed

E. Compensation of debts payable at different places
F. Effects of nullity of debts to be compensated
G. Effects of assignment of credit

VII. Novation (1291-1304)

A. Concept
B. Kinds
C. Requisites

Cases:
-Millar v. CA, 38 SCRA 642
-Magdalena Estate v. Rodriguez, 18 SCRA 967
-Broadway Centrum Condominium Corp. v. Tropical Hut, GR No. 79642, July 5, 1993

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 -California Bus Line v. State Investment, GR No. 147950, December 11, 2003

D. Effects
E. Objective novation
F. Subjective novation

Cases:
-Garcia v. Llamas, 417 SCRA 292
-Quinto v. People, GR No. 126715, April 14, 1999

G. Subrogation of a third person in the rights of the creditor

Cases:
-Licaros v. Gatmaitan, GR No. 142838, August 9, 2001
-Astro Electronics Corp. v. Phil. Export and Foreign Loan Guarantee Corp., GR No. 136729,
September 23, 2003.

Title II: CONTRACTS

Chapter I: General provisions (1305-1317)

A. Definition
B. Elements – consent, object, cause
C. Characteristics
D. Parties
E. What may not be stipulated
F. Classifications
G. Stages

Cases:
-GSIS v. CA, 228 SCRA 183
-Gabriel v. Monte de Piedad, 71 Phil 497
-Pakistan International Airlines v. Ople, 190 SCRA 90
-Cui v. Arellano, 2 SCRA 205
-Arroyo v. Berwin, 36 Phil. 386
-Filipnas Compania de Seguros v. Manandas, 17 SCRA 391
-Bustamante v. Rosel, 319 SCRA 413
-Philippine Savings Bank v. Spouses Castillo, GR No. 193178. May 30, 2011

H. Stipulation pour autrui

Cases:
-Florentino v. Encarnacion, 79 SCRA 192
-Coquia v. Fieldmens Insurance Co. 26 SCRA 178
-Integrated Packing Corp. v. CA, GR No. 115117, June 8, 2000
-Daywalt v. La Corporacion de los Padres AgustinosRecoletos, 39 Phil. 587
-So Ping Bun v. CA, 314 SCRA 571

Chapter II: Essential requisites of contracts (1318-1355)

A. Consent
Cases:

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 -Rosenstock v. Burke, 46 Phil. 217
-Malbarosa v. CA, 402 SCRA 168
-Jardine Davies v. CA, GR Nos. 128006 and 128069, June 19, 2000
-Sanchez v. Rigos, 45 SCRA 368
-PNOC v. KEPPEL, G.R. No. 202050; July 25, 2016
-Adelfa Properties v. CA, GR No. 111238, January 25, 1995
- Equatorial v. Mayfair, GR No. 106063, 21 November 1996
-Theis v. CA, GR No. 126013, February 12, 1997
-Heirs of William Sevilla v. Leopoldo Sevilla, 402 SCRA 501
-Dumasug v. Modelo, 34 Phil. 252
-Katipunan v. Katipunan, GR No. 132415, January 30, 2002
-Martinez v. Hongkong and Shanghai Bank, 15 Phil. 252
-Hill v. Veloso, 31 Phil. 161
-Tuason v. Marquez, 45 Phil. 381
-Rural Bank of Sta. Maria v. CA, 314 SCRA 255
-Azzaraga v. Gay, 52 Phil. 599
-Laureta Trinidad v. IAC, 204 SCRA 524
-Songco v. Sellner, 37 Phil. 254
-Mercado v. Espiritu, 37 Phil. 215
-Braganza v. Villa Abrille, 105 Phil. 456
-Yason v. Arciaga, GR No. 145017, January 28, 2005
-Suntay v. CA, 251 SCRA 430
-Blanco v. Quasha, GR No. 133148, November 17, 1999
-Tanchuling v. Cantela, GR No. 209284, November 10, 2015

B. Object
Cases:
-Blas v. Santos, 1 SCRA 899
-Uson v. Del Rosario
-Tanedo v. CA, GR No. 104482, January 22, 1996

C. Cause

Cases:
-Liguez v. CA, 102 Phil. 577
-Carantes v. CA, 76 SCRA 514
-Buenaventura v. CA, 416 SCRA 263
-Olegario v. CA, 238 SCRA 96

 Article 1470
 Article 1471

Chapter III: Form of Contracts (1356-1358)

Cases:
-Lao Sok v. Sabaysabay, 138 SCRA 134
-Deloso v. Sandiganbayan, 217 SCRA 49
-Garcia v. Bisaya, 97 Phil. 609
-Bentir v. Leandre, 330 SCRA 591

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Chapter IV: Reformation of instruments (1359-1369)

Cases:
-Atilano v. Atilano, 28 SCRA 232
-Sarming v. Dy, 383 SCRA 131

Chapter V: Interpretation of contracts (1370-1379)

Case:
-Borromeo v. CA, 47 SCRA 65

Chapter 6: Rescissible contracts (1380-1389)

A. Kinds
B. Characteristics
C. Rescission

Cases:
-Universal Food Corp. v. CA, 33 SCRA 1
-Guzman v. Bonnevie, 206 SCRA 668
-Cabaliw v. Sadorra, 64 SCRA 310
-Ada v. Baylon, GR No. 182435. August 13, 2012
-Lee v. Bangkok Bank, GR No. 173349, February 9, 2011
-Buenviaje v. Spouses Salonga, GR No. 216023, October 5, 2016

D. Requisites
E. Presumption of fraud

Cases:
-Oria v. McMicking, 21 Phil. 243
-Siguan v. Lim, 318 SCRA 725

Chapter VII: Voidable or annullable contracts (1390-1402)

A. Kinds
B. Characteristics
C. Annullment

Case:
-House International v. IAc, 151 SCRA 703

 Article 1489
 Family Code, Article 194

D. Prescription
E. Effect

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 Case:
-Cadwallader & Co. v. Smith Bell & Co., 7 Phil. 461

F. Extinguishment of action
G. Ratification

Cases:
-Uy Soo Lim v. Tan Unchuan, 38 Phil. 552

Chapter VIII: Unenforceable contracts (1403-1408)

A. Characteristics
B. Kinds

Cases:
-Ortega v. Leonardo, 103 SCRA 870
-Carbonnel v. POncio, 103 SCRA 655
-Babao v. Perez, 102 SCRA 756
-Cabague v. Auxilio, 92 SCRA 294
-Yuvienco v. Dacuycuy, 104 SCRA 668
-Bisaya Land Transportation v. Sanchez, 153 SCRA 532
-Hernandez v. CA, 160 SCRA 821
-Victoria v. CA, 194 SCRA 19
-Mactan v. CA, 263 SCRA 736
-Limketkai Sons Milling Inc. v. CA, GR No. 118509, December 1, 1995
-Limketkai Sons Milling Inc. v. CA G.R. No. 118509. September 5, 1996
-Swedish Match v. CA, GR No. 128120, October 20, 2004

C. Ratification

D. Incapacitated persons

Chapter IX: Void or inexistent contracts (1409-1422)

A. Characteristics
B. Kinds

Cases:
-Modina v. CA, GR No. 109355, October 29, 1999
-Rellosa v. Gaw Chee Hum, 93 Phil. 827
-Fullido v. Grilli, GR No. 215014, February 29, 2016
-Ang v. Sy So, GR No. 182252, August 3, 2016
-Philippine Banking Corp. v. Lui She, 21 SCRA 52
-Frenzel v. Catito, 406 SCRA 55
-Rubias v. Batiller, 51 SCRA 120
-Javier v. Dela Cruz, 80 SCRA 343
-Menil v. CA, 84 SCRA 413
-Director of Lands v. Ababa, 88 SCRA 513
-Tongoy v. CA, 123 SCRA 99
-Lita Enterprises v. IAC, 129 SCRA 79

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 -Manotok Realty v. IAC, 149 SCRA 372
-Portugal v. IAC, 159 SCRA 178
-DBP v. CA, 249 SCRA 331
-Barsobia v. Cuenco, 113 SCRA 547
-Godinez v. Fong, 120 SCRA 223
-Liguez v. CA, 102 SCRA 577
-Teja Marketing v. IAC, 148 SCRA 347
-Briones v. Camayo, 41 SCRA 404
-G Holdings v. Cagayan Electric Power and Light Company, Inc. GR No. 226213,
November 20, 2017

C. Actions

Title III: Natural obligations (1423-1430)

Title IV: Estoppel (1431-1439)

Source: UP Outline in Obligations and Contracts by Prof. Eduardo A. Labitag

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