1. SAURA IMPORT and EXPERT CO., INC.

, vs DBP – Article 1231

FACTS: In July 1952, Saura, Inc., applied to Rehabilitation Finance Corp., now DBP, for an industrial loan of P500,000 to be used for the construction
of a factory building, to pay the balance of the jute mill machinery and equipment and as additional working capital. In Resolution No.145, the loan
application was approved to be secured first by mortgage on the factory buildings, the land site, and machinery and equipment to be installed.
ISSUE: Whether or not there was a perfected contract between the parties. YES. There was indeed a perfected consensual contract.
HELD: Through Justice Macalintal the court ruled: Article 1934 provides: An accepted promise to deliver something by way of commodatum or
simple loan is binding upon the parties, but the commodatum or simple loan itself shall not be perfected until delivery of the object of the contract.
There was undoubtedly offer and acceptance in the case. The application of Saura, Inc. for a loan of P500,000.00 was approved by resolution of the
defendant, and the corresponding mortgage was executed and registered. The defendant failed to fulfill its obligation and the plaintiff is therefore
entitled to recover damages.

2. CATHAY PACIFIC AIRWAYS LTD vs. SPOUSES DANIEL VASQUEZ and MARIA LUISA MADRIGAL VASQUEZ
FACTS: In respondents’ return flight to Manila from Hongkong, they were deprived of their original seats in Business Class with their companions
because of overbooking. Since respondents were privileged members, their seats were upgraded to First Class. Respondents refused but eventually
persuaded to accept it. Upon return to Manila, they demanded that they be indemnified in the amount of P1million for the “humiliation and
embarrassment” caused by its employees. Petitioner’s Country Manager failed to respond. Respondents instituted action for damages. The RTC
ruled in favor of respondents. The Court of Appeals affirmed the RTC decision with modification in the award of damages.
ISSUE: Whether or not the petitioners (1) breached the contract of carriage, (2) acted with fraud and (3) were liable for damages.
HELD: The court rule through Justice Davide:
(1) YES. Although respondents have the priority of upgrading their seats, such priority may be waived, as what respondents did. It should have not
been imposed on them over their vehement objection.
(2) NO. There was no evident bad faith or fraud in upgrade of seat neither on overbooking of flight as it is within 10% tolerance.
(3) YES. Nominal damages (Art. 2221, NCC) were awarded in the amount of P5,000.00. Moral damages (Art.2220, NCC) and attorney’s fees were set
aside and deleted from the Court of Appeals’ ruling.

3. SONNY LO vs. KJS ECO-FORMWORK SYSTEM PHIL., INC.

FACTS: Sonny L. Lo, for San’s Enterprises (buyer) bought scaffolding equipment from KJS ECO FORMWORK System Phil., Inc. (seller) worth P540k.
The buyer failed to pay in full. Thus, the parties executed a Deed of Assignment with the buyer assigning P335k of its receivables to seller. When
the seller tried to collect on the receivable from one Jomero Realty Corporation, (Jomero) the latter refused on the ground that the buyer was also
indebted to it. The seller then demanded payment from the buyer but the latter refused.
ISSUE: Had the Deed of Assignment executed by the parties extinguished the buyer’s obligation to the seller?
HELD: Through Justice Ynares-Santiago the court rule: NO. While the assignment of credit, which is in the nature of a sale of personal property,
produced the effects of a dation in payment which may extinguish the obligation, as in this case; the vendor or assignor is bound by certain
warranties. Specifically, under Art. 1628, the vendor or assignor warrants the existence and legality of the credit at the time of the sale or
assignment.

4. Citibank and Investors Finance Corporation vs Modesta Sabeniano

FACTS: Modesta Sabeniano is a client of Citibank and FNCB Finance. On February 1978, Sabeniano obtained a loan of Php 200,000 from Citibank.
This loan was followed with several other loans – some were paid, while some were not. Those that were not paid upon maturity were rolled over,
reflecting a total unpaid loan of Php 1,069,847.40 as of September 1979.
ISSUE: Whether or not Citibank’s execution of deeds and pledge to off-set Sabeniano’s loan was valid and legal.
HELD: Through Justice Chico-Nazario the court rule The Supreme Court reversed the CA’s findings regarding Sabeniano’s Citibank loan as this was
properly documented and sufficient in evidence. Thus, the execution of deeds was valid, especially that the agreement was duly notarized, signed
and prepared in accordance with the law.

5. TELENGTAN BROTHERS & SONS, INC. VS. UNITED STATES LINES, INC.,
FACTS: On June 22, 1981, respondent U.S. Lines filed a suit against petitioner Telengtan seeking payment of demurrage charges of P94,000 which it
refused to pay despite repeated demands plus interest and damages. The complaint alleged that between the years 1979 and 1980, goods
belonging to petitioner loaded on containers aboard its (respondent’s) vessels arrived in Manila from U.S. ports. After the 10-day free period,
petitioner still failed to withdraw its goods from the containers wherein the goods had been shipped.
ISSUE: Whether the Court of Appeals erred in affirming the trial court’s order for the recompilation of the judgment award in accordance with
Article 1250 of the Civil Code contrary to existing jurisprudence and without any evidence at all to support it.
RULING: The court ruled in the merits of the petitioner. The court held that absent an official pronouncement or declaration by competent
authorities of the existence of extraordinary inflation during a given period, the effects of extraordinary inflation, if that be the case, are not to be
applied. Moreover, it is only when there is a contrary agreement that extraordinary inflation will make the value of the currency at the time of
payment, not at the time of the establishment of obligation, the basis for payment.
6. SOLEDAD SOCO vs. HON. FRANCIS MILITANTE
FACTS: Soco and Francisco entered into a contract of lease on January 17, 1973, whereby Soco leased her commercial building and lot situated at
Manalili Street, Cebu City, to Francisco for a monthly rental of P 800.00 for a period of 10 years renewable for another 10 years at the option of the
lessee.
It can readily be discerned from Exhibit “A” (from SOCO) that paragraphs 10 and 11 appear to have been cancelled while in Exhibit “2” (from
FRANCISCO) only paragraph 10 has been cancelled. Claiming that paragraph 11 of the Contract of Lease was in fact not part of the contract because
it was cancelled, Soco filed Civil Case No. R-16261 in the Court of First Instance of Cebu seeking the annulment and/or reformation of the Contract
of Lease.
ISSUE: Whether or Not there was a valid consignation of payment of the rentals.
HELD: In order that consignation may be effective, the debtor must first comply with certain requirements prescribed by law. We hold that the
respondent lessee has utterly failed to prove the following requisites of a valid consignation:
First, tender of payment of the monthly rentals to the lessor.
Second, respondent lessee also failed to prove the first notice to the lessor prior to consignation.
Therefore, the decision of the Court of First Instance of Cebu, 14th Judicial District, Branch XII is hereby REVERSED and SET ASIDE, and the derision
of the City Court of Cebu, Branch II is hereby reinstated, with costs in favor of the petitioner.

7. Victorino Magat Jr. vs Court of Appeals and Santiago Guerrero

FACTS: Guerrero and Magat, General Manager of the Spectrum Electronic Laboratories, executed a letter-contract for the purchase of transceivers
at $77,620.59 FOB, Yokohoma. Magat was to deliver within the 60-90 days after receiving from the Guerrero the assigned frequency. Magat then
contacted his Japanese supplier (Koide & Co., Ltd.) and placed an order for the transceivers. The permit to import the transceivers was denied
because of the Martial Law Guerrero was not able to obtain the necessary letter of credit. He then did not continue with the contract.
Issue: Whether or Not there is a breach of contract
Held: No. The law provides that when the service has become so difficult as
to be manifestly beyond the contemplation of the parties, the obligor may also be released therefrom, in whole or in part. Here in the case, the
denial of permit to import resulted the non compliance of the obligation and the inability to secure the letter of credit.

8. JESUS V. OCCENA and EFIGENIA C. OCCENA vs. HON. RAMON V. JABSON

Facts: The court reverses the Court of Appeals appealed resolution. The Civil Code authorizes the release of an obligor when the service has
become so difficult as to be manifestly beyond the contemplation of the parties but does not authorize the courts to modify or revise the
subdivision contract between the parties or fix a different sharing ratio from that contractually stipulated with the force of law between the parties.
Private respondent’s complaint for modification of the contract manifestly has no basis in law and must therefore be dismissed for failure to state a
cause of action.
Issue: Whether or not the court is right in reversing its decision?
Ruling: Yes, for failure to state a sufficient cause of action. Respondent's complaint seeks not release from the subdivision contract but that the
court "render judgment I modifying the terms and Conditions of the Contract by fixing the proper shares that should pertain to the herein parties
out of the gross proceed from the sales of subdivided lots of subject subdivision"

9. NAGA TELEPHONE CO., INC AND LUCIANO M. MAGGAY vs. THE COURT OF APPEALS AND CAMARINES SUR II ELECTRIC COOPERATIVE, INC.
FACTS: Naga Telephone Co., Inc. (NATELCO) entered into a contract with Camarines Sur II Electric Cooperative, Inc. (CASURECO II) where it
is stipulated that NATELCO will use the electric light posts of CASURECO II for the operation of NATELCO’s telephone service.
ISSUE: Whether or not Article 1267 applies in this case to warrant the release of the parties from their obligations.
RULING: The court rule through Justice Nocon, YES. Article 1267 speaks of "service" which has become so difficult. Taking into consideration
the rationale behind this provision, the term "service" should be understood as referring to the "performance" of the obligation.

10. TIU vs. PLATINUM PLANS PHILIPPINES – Justice Quisumbing – Article 1306
FACTS: The parties executed a contract of employment valid for five years. On September 16, 1995, petitioner stopped reporting for work. In
November 1995, she became the Vice-President for Sales of Professional Pension Plans, Inc., a corporation engaged also in the pre-need industry.
Consequently, respondent sued petitioner for damages before the RTC of Pasig City,Branch 261. Respondent alleged, among others, that
petitioner‘s employment with Professional Pension Plans, Inc. violated the non-involvement clause in her contract of employment.
ISSUE: Whether the Court of Appeals erred in sustaining the validity of the non-involvement clause
HELD: In this case, the non-involvement clause has a time limit: two years from the time petitioner‘s employment with respondent ends. It is also
limited as to trade, since it only prohibits petitioner from engaging in any pre-need business akin to respondent‘s.

11. Saura v. Sindico - Article 1306

FACTS: This is an appeal from an order of the CFI of Pangasinan dismissing plaintiff Saura’s complaint for damages. Plaintiff Saura and defendant
Sindico were contesting for nomination as the official candidate of the Nacionalista party in the 4th District of Pangasinan in the
Congressional elections of November 1957.
ISSUE: Whether or not the provisions in the contract are null and void for being contrary to law and public policy.
RULING: Through Justice Reyes the court rule Yes, we agree with the lower court in adjudging the contract or agreement in question a nullity.
Among those that may not be the subject matter (object) of contracts are certain rights of individuals, which the law and public policy have deemed
wise to exclude from the commerce of man.

12. Cui vs. Arellano University - Article 1306

Facts: Plaintiff, before the school year 1948-1949 took up preparatory law course in the defendant University. After finishing his preparatory law
course plaintiff enrolled in the College of Law of the defendant from the school year 1948-1949. Plaintiff finished his law studies in the defendant
university up to and including the first semester of the fourth year.
Issue: Whether a stipulation whereby student cannot transfer to another school without refunding scholarship cash is valid.
Ruling: A stipulation whereby student cannot transfer to another school without refunding scholarship cash is null and void.

13. TIMOTEO BALUYOT, et al. vs. THE HONORABLE COURT OF APPEALS et al. – Article 1311
Facts: On March 13, 1992 petitioners as resident of Barangay Cruz represented by petitioner Timoteo Baluyot et.al filed for specific performance
and damages against UP respondent contending that they have been in open, peaceful, adverse and continuous possession in the concept of an
owner of that parcel of land in Quezon City.
Issue: Whether petitioners has the right to seek enforcement of the Deed of Donation.
Ruling: The Supreme Court ruled in the affirmative, because there is a stipulation pour autrui
Under the Civil Code Art 1311 That if a contract should contain, some stipulation in favour of a 3rd person. He may demand its fulfilment provided
that he communicated his acceptance to the obligor before its revocation.

14. WILLIAM UY and RODEL ROXAS vs. COURT OF APPEALS, HON. ROBERT BALAO and NATIONAL HOUSING AUTHORITY - Article 1311
Facts: William Uy and Rodel Roxas are agents authorized to sell 8 parcels of land by the owners thereof. By virtue of such authority, they offered to
sell the lands, located in Benguet to National Housing Authority (NHA) to be utilized and developed as a housing project.
ISSUES:
1. Whether or not there was legal basis for rescinding the sale.
2. Whether or not the respondent CA erred in dismissing the subject complaint, finding that the petitioners failed to join as indispensable
party plaintiff the selling lot-owners.
RULING:
1. Yes. The right of rescission or, more accurately, resolution, of a party to an obligation under Article 1191 is predicated on breach of faith
by the other party that violates the reciprocity between them.
2. No. Section 2, Rule 3 of the Rules of Court requires that every action must be prosecuted and defended in the name of the real party-in-
interest.

15. KAUFFMAN vs THE PHILIPPINE NATIONAL BANK - JUSTICE STREET - Article 1311
Fact: Plaintiff, President of Philippine Fiber and Produce Company was entitled to dividend from the said company. The treasurer of the company
Cabled transfer the said dividends through Respondent bank to New York, then upon the confirmation the New York branch of the receipt of the
funds, communicated the said receipt to the plaintiff informing the availability of the fund. Subsequently, the respondent bank decided to withhold
the said funds denying the plaintiff of its access. The plaintiff questioned the action of the respondent in the court. The respondent argued that the
plaintiff has not cause of action because he is not a party in the contract of transferring funds and the transaction will not fall under the provisions
of the Negotiable Instrument Law.
Issue: Whether the plaintiff has cause of action in with respect to the Negotiable Instrument Law?
Held: No, the plaintiff has no cause of action with respect only to the Negotiable Instrument Law. The transaction of the Respondent and the
Philippine Fiber and Produce Company is not a negotiable Instrument.

16. Mandarin Villa, Inc. vs. CA and Clodualdo de Jesus – JUSTICE FRANCISCO - Article 1311
Facts: In the evening of 19 Oct 1989, private respondent de Jesus hosted a dinner for his friends at the peririoner’s restaurant, the Mandarin Villa
Seafoods Village in Mandaluyong City. After dinner, the waiter handed to de Jesus the bill amounting to P2,658.50. De Jesus offered his BANKARD
credit card to the waiter for payment. Minutes later, the waiter returned and audibly informed that said credit card had expired. De Jesus
demonstrated that the card had yet to expire on Sept 1990, as embossed on its face. De Jesus approached the cashier who again dishonored such
card. De Jesus offered his BPI express credit card instead and this was accepted, honored and verified. The trial court and CA held petitioner to be
negligent.
Issues: Whether petitioner was negligent; If negligent, WON such negligence was the proximate cause of private respondent’s damage.
Ruling: Petition dismissed. The humiliation and embarrassment of private respondent was brought about by the fact of dishonor by petitioner of
private respondent’s valid BANKARD. Hence, petitioner’s negligence is the proximate cause of private respondent’s damage.

17. SALVADOR P. MALBAROSA vs. HON. COURT OF APPEALS and S.E.A. DEVELOPMENT CORP – JUSTICE CALLEJO – Article 1319
FACTS: Malbarosa decided to retire as president and general manager of Philtectic. He was offered a compensation package consisting of a
company vehicle and stocks at a value which he felt was not compensatory of the amount he deserved. When he decided to accept the offer, he
failed to communicate his acceptance prior to the Company’s withdrawal of the offer.
ISSUE: Whether or not there was an effective withdrawal of the letter?
RULING: YES. There was effective withdrawal – no meeting of the minds between the parties.
Art. 1318 on the essential requisites of a contract: requires (1)consent,(2) object certain, and (3)cause of the obligation. Consent is manifested by
meeting of the offer and the acceptance upon the thingand the cause which are to constitute the contract.

18. NICOLAS SANCHEZ vs. SEVERINA RIGOS - Article 1324

FACTS: Plaintiff Nicolas Sanchez and defendant Severina Rigos executed an instrument entitled "Option to Purchase," whereby Mrs. Rigos "agreed,
promised and committed to sell" to Sanchez the sum of P1,510.00, a parcel of land within two (2) years from said date with the understanding that
said option shall be deemed "terminated and elapsed," if "Sanchez shall fail to exercise his right to buy the property" within the stipulated period.
ISSUE: Whether or not Rigos is bound by Sanchez’ acceptance even though the option is not supported by a separate consideration.
HELD: Yes. The court ruled through Justice Concepcion that the option did not impose upon plaintiff the obligation to purchase defendant's
property. The instrument executed is not a "contract to buy and sell." It merely granted plaintiff an "option" to buy.

19. ANG YU ASUNCION vs. THE HON. COURT OF APPEALS - Article 1324
FACTS: A complaint for Specific Performance was filed by Ang Yu Asuncion et al., against Bobby Cu Unjieng and Jose Tan. The plaintiffs were tenants
or lessees of residential and commercial spaces owned by defendants in Binondo. On several conditions defendants informed the plaintiffs that
they are offering to sell the premises and are giving them priority to acquire the same.
ISSUE: Can Buen Realty be bound by the writ of execution by virtue of the notice of lis pendens?
RULING: No. An obligation is a juridical necessity to give, to do or not to do (Art. 1156, Civil Code).
Among the sources of an obligation is a contract (Art. 1157), which is a meeting of minds between two persons whereby one binds himself, with
respect to the other, to give something or to render some service.

20. EQUATORIAL REALTY DEVELOPMENT, INC. vs. MAYFAIR THEATER, INC. – JUSTICE PANGANIBAN – Article 1324
FACTS: In the mother case, the SC held that the sale between Equatorial and Carmelo was rescinded and that the property should instead be sold
to Mayfair because of a provision of right of first refusal. The order became final and executory thus prompting Mayfair to file a Motion for
Execution. However, it could not be enforced since Carmelo was nowhere to be found.
ISSUE: Whether or not the Equatorial is entitled to back rentals?
RULING: NO We hold that under the peculiar facts and circumstances of the case at bar, as found by this Court en banc in its Decision promulgated
in 1996 in the mother case, no right of ownership was transferred from Carmelo to Equatorial in view of a patent failure to deliver the property to
the buyer.

21. MERCADO VS. JOSE ESPIRITU –

FACTS: The case was about the contract made by Luis Espiritu (father of Jose Espiritu, the defendant) and the heirs of his sister Margarita Mercado;
Domingo and Josepha Mercado, who pretended to be of legal age to give their consent into the contract of sale of the land they inherited from
their deceased mother Margarita Mercado (sister of Luis Mercado). The siblings Domingo et. al., sought for the annulment of contract asserting
that Domingo and Josepha were minors during the perfection of contract.
ISSUE: Whether or not the deed of sale is valid when the minors presented themselves that they were of legal age.
HELD: The court declared that the contract of sale was VALID, even if it were made and entered into by minors, who pretended to be of legal age.
The court stated that they will not be permitted to excuse themselves from the fulfillment of the obligations contracted by them, or to have them
annulled.

22. FELIPE CABAGUE and GERONIMO CABAGUE vs. MATIAS AUXILIO and SOCORRO AUXILIO
FACTS: In the justice of the peace court of Basud, Camarines Norte, Felipe Cabague and his son Geronimo sued the defendant Matias Auxilio and
his daughter Socorro to recover damages resulting from defendants’ refusal to carry out the previously agreed marriage between Socorro and
Geronimo.
ISSUE: Whether or not the action is enforceable?
HELD: There is no question here that the transaction was not in writing. The only issue is whether it may be proved in court. The understanding
between the plaintiffs on one side and the defendants on the other, really involves two kinds of agreement.