Professional Documents
Culture Documents
B. Secondary Classification
1. Legal (Art. 1158); conventional (Art. 1159); Penal (Art. 1161)
2. Real (to give) and Personal (to do or not to do)
3. Determinate and Generic (as to subject matter of obligation)
4. Positive (to give, to do); Negative (not to give, not to do)
5. Unilateral and Bilateral
6. Individual and Collective
7. Accessory and Principal
8. As to object or presentation:
a. Simple
b. Multiple
c. Conjunctive
d. Distributive
e. Alternative
f. Facultative
9. Possible and Impossible
Nature and Effects of Obligations
I. Kinds of Prestation
A. Obligation to give
1. a specific thing a. Duties of the obligor
i. to deliver the thing itself- Article 1244
ii. to preserve the thing- Article 1163
iii. to deliver the accessions and accessories- Article 1166 (distinction between
accession and accessory)
iv. to deliver the fruits- Article 1164 par. 1
2. a generic thing- Article 1246
B. Obligation to do- Article 1244
C. Obligation not to do- Article 1244
II. Breach of Obligation
A. Concept
1. Distinction between substantial and casual/ slight breach
CASES:
Song Fo & Co. vs. Hawaiian-Philippine Co., 47 SCRA 821 (1925)
Velarde, et al. vs. Court of Appeals, 361 SCRA 56 (2001)
B. Modes of Breach- Article 1170
1. Fraud (dolo)
a. Concept
i. dolo (Article 1171) vs. dolo incidente
ii. dolo (Article 1171) vs. dolo causante
CASES:
Woodhouse vs. Halili, 93 PHIL 527, G. R. No. L-4811. July 31, 1953
Geraldez vs. Court of Appeals, 230 SCRA 321, G.R. No. 108253. February 23,1994
b. Non-waiver- Article 1171
C. Negligence- Article 1173
1. Concept- Article 1173
Effects
Delay (mora)- Article 1169
Concept
Kinds
i.
mora solvendi
requisites
General rule: Creditor should make demand before debtor incurs delayArticle 1169
CASES:
Cetus Development, Incorporated vs. Court of Appeals, 176 SCRA 72, G.R. No. 77647-652.
August 7, 1989.
Santos Ventura Hocorma Foundation vs. Santos, G.R. No. 153004, November 4, 2004
Vasquez vs. Ayala Corporation, 443, SCRA 231
Exceptions: Article 1169
CASE:
Abella vs. Francisco, 55 SCRA 447, G.R. No. 32336. December 20, 1930
ii.
mora accipiendi
requisites
see also Article 1268
CASES:
Vda. de Villaruel, et al. vs. Manila Motor Co., Inc. and Colmenares, 104 Phil. 926
Tengco vs. CA G.R. 49852. October 19, 1989
iii.
compensatio morae
requisites
CASE:
Central Bank of the Philippines vs. Court of Appeals, 139 SCRA 46, G.R. No. L-45710.
October 3, 1985
c. Effects
4. Contravention of the Tenor
CASES:
Chaves vs. Gonzales, 32 SCRA 547, G.R. No. 27454. April 30, 1970.
Telefast Communications/ Philippine Wireless, Incorporated vs. Castro, Sr., 158 SCRA 445,
G.R. No. L-73867. February 29, 1999.
Arrieta vs. National Rice and Corn Corporation, 10 SCRA 79, G.R. No.L-15645. January 31,
1964.
Magat vs. Medialdea and Guerrero, 121 SCRA 418,G.R. No. L-37120 April 20, 1983
III. Remedies of creditor in cases of breach
A. Action for performance
1. Action for specific performance in obligation to give a specific thing- Article 1165 par.
1; Rules of Court, Rule 39, Section 10
2. Action for substituted performance in obligation to give a generic thing- Article 1165
par. 2
3. Action for substituted performance or undoing of poor work in obligation to doArticle 1167
CASES:
Chaves vs. Gonzales, 32 SCRA 547, G.R. No. 27454. April 30, 1970
Tanguilig vs. Court of Appeals, 266 SCRA 78, G.R. No. 117190 January 2, 1997
a. Exception
4. Action for undoing in obligation not to do- Article 1168
a. Exception
B. Action for damages- Article 1170
C. Action for rescission- Article 1191, 1192
IV. Subsidiary remedies of creditor
A. Accion subrogatoria- Article 1177
1. Concept
2. Requisites
3. Exceptions- inherent rights of debtor; Article 772
B. Accion Pauliana- Article 1177, 1381 par. 3
1. Concept
a. Distinction between accion pauliana and accion subrogatoria
2. Requisites
CASES:
Khe Hong Cheng vs. Court of Appeals, 355 SCRA 701, GR No. 144169. March 20, 2001.
Siguan vs. Lim, 318 SCRA 725, G.R. No. 134685. November 19, 1999.
V. Extinguishment of liability in case of breach due to fortuitous event- Article 1174
A. Concept of Fortuitous Event
1. Act of God
2. Act of Man
B. Requisites
1. Effect of concurrent fault
CASES:
Juan Nakpil & Sons vs. CA, 144 SVRA 597 (1986)
Republic vs. Luzon Stevedoring Corporation, 21 SCRA 279, G.R. No. L-21749. September
29, 1967.
Dioquino vs Laureano, 33 SCRA 65, G.R. No. L-25906. May 28, 1970.
Austria vs. Court of Appeals, 31 SCRA 527, G.R. No. L-29640. June 10, 1971.
NPC vs. Court of Appeals, 161 SCRA 334,G.R. No. L-47379. May 16, 1988.
Yobido vs. Court of Appeals, 281 SCRA 1, G.R. No. 113003. October 17, 1997.
Bacolod-Murcia Milling vs. Court of Appeals, 182 SCRA 24, G.R. Nos. 81100-01. February 7,
1990
Philcomsat vs. Globe Telecom, 429 SCRA 153, G.R. No. 147324. May 25, 2004.
C. Extinguishment of Liabiltiy; Exceptions- Article 1174, 1165 par. 3, 552, 1942, 1979,
2001, 2147
VI. Usurious Transactions- Article 1175, 1413, 1961
A. PD 858; PD 1685
B. Central Bank Circular 416
C. Monetary Board Circular # 905 (lifting the interest ceiling- (vs. 2209)
CASES:
Eastern Shipping Lines vs. CA, 234 SCRA 781 (1994)
Crismina Garments vs. CA, 304 SCRA 356 (1999)
Keng Hua Products vs. CA, 286 SCRA 257 (1998)
Security Bank vs. RTC Makati, 263 SCRA 453 (1996)
Almeda vs. CA, 256 SCRA 292 (1996)
First Metro Investment vs. Este. Del Sol, G.R. No. 141811, November 15, 2001
Different Kinds of Obligations
I. Pure and Conditional Obligations
A. Pure obligations- Article 1179, par. 1
B. Conditional obligations- Article 1181
1. Condition
a. Concept
b. Condition vs. Period/ Term
CASES:
Gaite vs. Fonacier, 2 SCRA 831, G.R. No. L-11827. July 31, 1961.
Gonzales vs. Heirs of Thomas and Paula Cruz, 314 SCRA 585, G.R. No. L-131784.
September 16, 1999.
2. Kinds of Conditions
a. as to effect on obligation- Article 1181
i.
Suspensive (condition precedent)
retroactive effect when condition is fulfilled - 1187
rights of creditor and debtor before fulfillment of condition- Article
1188
CASE:
Coronel vs. Court of Appeals, 263 SCRA 15, G.R. No. 103577. October 7, 1996
ii.
CASES:
Parks vs. Province of Tarlac, 49 PHIL 142, G.R. No. 24190. July 13, 1926
Central Philippine University vs. Court of Appeals, 246 SCRA 511
Quijada vs. Court of Appeals, 299 SCRA 695, G,R No. 126444. December 4, 1998
Mixed
CASES:
Osmea vs. Rama, 14 PHILS 99, G.R. No. 4437. September 9, 1909
Luz Hermosa and Fernando Hermosa Jr. vs. Epifanio M. Longara, 93 Phil. 971, G.R. No. L5267. October 27, 1953.
M. D. Taylor vs. Uy Tieng Piao and Tan Liuan Tan Liuan & Company, 43 Phil. 873, G.R. No.
16109. October 2, 1922.
Smith, Bell & Co. vs. Sotelo Matti, 44 Phil. 874, G.R. No. 16570. March 9 1922
Rustan Pulp & Paper Mills, Incorporated vs. IAC, 214 SCRA 665, G.R. No. 70789. October
19, 1992
Romero vs. Court of Appeals, 250 SCRA 223, G.R. No. 107207. November 23, 1995
c. as to possibility- Article 1183
i.
possible
ii.
negative- Article 1185
3. Rules in case of loss, deterioration or improvement pending the happening
of the condition- Article 1189, 1190
a. Meaning of loss (Article 1189 [2]), deterioration and improvement
b. Effect of loss or deterioration
i.
without debtors fault
ii.
with debtors fault
c. Effect of Improvement
i.
by nature or time
ii.
at the debtors expense
4. Effect of prevention of the fulfillment of the condition by the obligor- Article 1186
CASE:
Song Fo & Co. vs. Hawaiian-Philippine Co., 47 SCRA 821, G.R. No. 23769. September 16,
1925
Boysaw vs. Interphil Promotions, 148 SCRA 365, G.R. No. L-22590. March 20, 1987
U.P. vs. De Los Angeles, 35 SCRA 365, G.R. No. L-28602. September 29, 1970
De Erquiaga vs. Court of Appeals, 178 SCRA 1, G.R. No. G.R. No. 47206 September 27,
1989
Angeles vs. Calasanz, 135 SCRA 323, G.R. No. L-42283 March 18, 1985
Jaime Ong vs. Court of Appeals, 310 SCRA 1, G.R. No. 97347. July 6, 1999
Visayan Sawmill Company Inc. vs. Court of Appeals, 219 SCRA 378, G.R. No. 83851. March
3, 1993.
Deparine, Jr. vs. Court of Appeals, 221 SCRA 503, G.R. No. 96643. April 23, 1993.
Iringan vs. Court of Appeals, 366 SCRA 41, G.R. No. 129107. September 26, 2001
Vda. de Mistica vs. Naguiat, 418 SCRA 73, G.R. No. 137909. December 11, 2003.
a. See also Article 1786, 1788; Articles 1484 to 1486; RA 6552
II. Obligation with a Period- Article 1193, 1180
A. Period or Term
1. Concept
2. Period/ Term vs. Condition
B. Kinds of Period/Term
1. As to effect
a. Suspensive (ex die)- Article 1193, par. 1
b. Resolutory (in diem)- Article 1193, par. 2
2. As to expression
a. Express
b. Implied
3. As to definiteness
a. Definite
b. Indefinite
4. As to source
a. Voluntary
b. Legal
c. Judicial
C. Rules in case of loss, deterioration or improvement before arrival of period - Article
1194, 1189
D. Effect of payment in advance- Article 1195
1. Note: Article 1197, par. 3
E. Benefit of a Period
1. For whose benefit
a. creditor
b. debtor
c. both
2. Effects
3. Presumption- Article 1196
CASES:
Maria Lachica, etc. vs. Gregorio Araneta, Inc., 47 OG No.11 5699, August 19, 1949
Ponce de Leon vs. Santiago Syjuco Inc., 90 SCRA 311, G.R. No. L-3316. October 31, 1951
Buce vs. Court of Appeals, 332 SCRA 151, G.R. No. 136913. May 12, 2000
4.
F. When
1.
2.
CASES:
Gregorio Araneta, Inc. vs. Phil. Sugar Estates Devt. Co. Ltd., 20 SCRA 330, G.R. No. L22558. May 31, 1967.
Central Philippine University vs. Court of Appeals, 246 SCRA 511
III.
Alternative Obligations
A.
B.
C.
D.
E.
F.
IV.
CASES:
Inchausti & Co. vs. Yulo, 34 Phil. 978, G.R. No. 7721. March 25, 1914
Lafarge Cement Philippines, Incorporated vs. Continental Cement Corporation, 443 SCRA
522, GR No. 155173. November 23, 2004
3. Effects
a. Solidary creditor in relation to:
i. Common debtor
right to demand- Article 1215, 1214, 1216, 1217, par. 1
in case of novation, compensation, confusion, remission
by a creditor - Article 1215, par. 1
ii. Solidary co-creditor/s
par. 3
5. Effects- Article 1223, 1233, 1224
See Joint Indivisible Obligations
6. Cessation of Indivisibility
VI. Obligations with a Penal Clause
A. Concept
1. Principal vs. Accessory Obligations
2. Distinguished from Conditional Obligations
3. Distinguished from Alternative Obligations
4. Distinguished from Facultative Obligations
5. Distinguished from Guaranty
B. Kinds of Penal Clause
1. As to effect
a. Subsidiary
b. Complementary
2. As to source
a. Conventional
b. Legal
3. As to purpose
a. Punitive
b. Reparatory
C. Demandability of Penalty- Article 1226, par. 2
D. Effects of Penal Clause
1. Substitute for indemnity for damages and payment of interest - Article 1226
a. Exceptions- Article 1226
CASES:
Makati Development Corporation vs. Empire Insurance Company, 20 SCRA 657, G.R. No. L21780. June 30, 1967
Tan vs. Court of Appeals, 367 SCRA 571, G.R. No. 116285. October 19, 2001
Country Bankers Insurance Corp. vs. Court of Appeals, 201 SCRA 458, G.R. No. 85161.
September 9, 1991
2. Not exempt debtor from performance- Article 1227
a. Exceptions- Article 1227
3. Creditor cannot demand both performance and penalty at the same time - Article
1227
a. Exceptions- Article 1227
4. Creditor cannot collect other damages in addition to penalty- Article 1226
a. Exceptions- Article 1226
E. When penalty shall be equitably reduced- Article 1229
F. Nullity of Principal Obligation or Penal Clause
1. Effects- Article 1230
2. Rationale
Extinguishment of Obligations
I. Modes of Extinguishment- Article 1231
A.
Payment or Performance
B.
Loss or Impossibility
C.
D.
E.
F.
G.
Condonation or Remission
Confusion or Merger
Compensation
Novation
Other Causes
CASES:
Arrieta vs. National Rice and Corn Corporation, 10 SCRA 79, G.R. No.L-15645. January 31,
1964.
Kalalo vs. Luz, 34 SCRA 337, G.R. No. L-27782. July 31, 1970
St. Paul Fire and Marine Insurance Company vs. Macondray and Co., Inc., 70 SCRA 122, GR
No. L-27796. March 20, 1976.
Papa vs. AV Valencia, et. al., 284 SCRA 643, GR No. 105188. January 23, 1988
PAL vs. Court of Appeals, 181 SCRA 557, GR 49188. Jan 30, 1990
c. payment of interest- Article 1956
4. How is payment to be made (integrity)
a. in general- Article 1233
i.
General Rule: Partial payment is not allowed- Article 1248
b. substantial performance in good faith-Article 1234
c. estoppel- Article 1235
C.
CASES:
Reparations Commission vs. Universal Deep-Sea Surety & Fidelity Co., 83 SCRA 765, G.R.
Nos. L-21901 and L-21996. June 27,1978
Paculdo vs. Regalado, 345 SCRA 134, G.R. No. 123855. November 20,2000
2. Requisites
3. Rules in application of payments- Article 1252, 1253
a. If rules are inapplicable and application cannot be inferredArticle 1254
i. meaning of most onerous to debtor
D. Payment by Cession
1. Concept- Article 1255
2. Requisites
3. Effects
E. Dation in Payment
1. Concept- Article 1245
a. distinguished from payment by cession
CASE:
DBP vs. Court of Appeals, 284 SCRA 14, G.R. No. 118342. January 5, 1998
2. Requisites
3. Effects
CASE:
Filinvest Credit Corp. vs. Philippine Acetylene Co., Inc., 111 SCRA 421, G.R. No. L-50449.
January 30, 1982
F.
i.
with creditors approval; effects
ii.
without creditors approval; effects
f. Expenses of consignation- Article 1259
CASES:
De Guzman vs. Court of Appeals, 137 SCRA 730, G.R. No. L-52733. July 23, 1985.
TLG International Continental Enterprising, Inc. vs. Flores, 47 SCRA 437, G.R. No. L-35381.
October 31, 1972
McLaughlin vs. Court of Appeals, 144 SCRA 693, G.R. No. L-57552. October 10, 1986
Soco vs. Militante, 123 SCRA 160, G.R No. L-58961, 28 June 1983.
Sotto vs. Mijares, 28 SCRA 17, G.R. No. L-23563. May 8, 1982.
Meat Packing Corporation of the Philippines vs. Sandiganbayan, 359 SCRA 409, G.R. No.
103068. June 22, 2001.
Teddy G. Pabugais vs. Dave P. Sahijwani, GR No. 156846 (2004), G.R. No. 156846.
February 23, 2004
III.
Loss or Impossibility
A.
B.
Impossibility of performance
1. Concept- Article 1266, 1267
2. Kinds
a. As to extent
i. Total
ii. Partial
b. As to source
i. Legal
ii. Physical
3. Requisites- Article 1266
4. Effects
a. In obligations to do- Article 1266; 1267; 1262, par. 2 (by analogy)
i. impossibility distinguished from difficulty
CASES:
Occena vs. Jabson, 73 SCRA 637, GR No. L-44349. October 29, 1976.
Naga Telephone Co., Inc. (NATELCO) vs. Court of Appeals, 230 SCRA 351, GR No. 107112.
February 24, 1994
Philippine National Construction Corp. (PNCC) vs. Court of Appeals, GR No. 116896. May 5,
1997
Condonation or Remission
A.
B.
Concept
Kinds
1. As to extent
a. Total
b. Partial
2. As to form- Article 1270, par. 1
a. Express
b. Implied
Requisites
1. When formalities are required- Article 1270, par. 2
C.
CASE:
Victor Yam & Yek Sun Lent vs. Court of Appeals, G.R. No. 104726. February 11, 1999
D.
E.
1.
2.
F.
G.
1.
2.
V.
VI.
Concept
Requisites
Effects
1. in general- Article 1275
2. in case of joint (Article 1277) or solidary obligations
Confusion in principal or accessory obligation- Article 1276
Compensation
A.
B.
C.
CASE:
Gan Tion vs. Court of Appeals, et al, 28 SCRA 235, GR No. L-22490. May 21, 1969
Silahis Marketing Corp. vs. Intermediate Appellate Court, 180 SCRA 21, G.R. No. 74027.
December 7, 1989
Bank of the Philippine Islands vs. Court of Appeals, 255 SCRA 571, G.R. No. 116792. March
29, 1996
PNB vs. Court of Appeals, 259 SCRA 174, G.R. No. 108052. July 24, 1996
Bank of the Philippine Islands vs. Court of Appeals, 255 SCRA 571, G.R. No. 116792. March
29, 1996
Mirasol vs. Court of Appeals, 351 SCRA 44, G.R. No. 128448. February 1, 2001
2. Effects- Article 1290, 1289
D.
E.
F.
G.
VII.
Novation
A.
Concept- Article 1291
B.
Kinds
1. As to form
a. Express
b. Implied
2. As to origin
a. Conventional
b. Legal
3. As to object
a. Objective or Real
b. Subjective or Personal
C.
Requisites- Article 1292
CASES:
Millar vs. Court of Appeals
Dormitorio vs. Fernandez, 72 SCRA388, G.R. No. L-25897. August 21, 1976
Magdalena Estates, Inc. vs. Rodriguez, 18 SCRA 967, G.R. No. L-18411. December 17,
1966
Reyes vs. Court of Appeals, 264 SCRA 35, G.R. No. 120817. November 2, 1996
Cochingyan, Jr. vs. R & B Surety and Insurance Co., Inc., 161 SCRA 339
G.R. No. L-47369. June 30, 1987
Broadway Centrum Condominium Corporation vs. Tropical Hut Food Market, Inc., 224 SCRA
302, G.R. No. 79642. July 5, 1993.
California Bus Lines, Inc. vs. State Investment House, Inc., 418 SCRA 297, G.R. No.
147950. December 11, 2003
D.
E.
Effects
1. in general- Article 1296
2. when accessory obligation may subsist- Article 1296
Effect of the Status of the Original or New obligation
1. nullity or voidability of original obligation- Article 1298
F.
G.
CASES:
Garcia vs. Llamas, 417 SCRA 293, G.R. No. 154127. December 8. 2003
Quinto vs. People, G.R. No. 126715. April 14, 1999
2. By change of creditor: Subrogation of a third person in the rights of the
creditor- Article 1300
a. Conventional subrogation
i. requisites- Article 1301
ii. distinguished from assignment of credit
iii. effects- Article 1303, 1304
CASE:
Licaros vs. Gatmaitan, 362 SCRA 548, G.R. No. 142838. August 9, 2001
b. Legal subrogation
i. requisites
ii. when presumed- Article 1302
iii. effects- Article 1303, 1304
CASES:
Astro Electronics Corp. vs. Philippine Export and
Foreign Loan Guarantee Corp., 411 SCRA 422, G.R. No. 136729. Sep. 23, 2003
VIII.
Fulfillment of Obligations
A.
B.
IX.
General Provisions
I.
II.
Elements
A.
B.
C.
III.
Characteristics
A.
B.
CASE:
GSIS vs. CA and Spouses Leuterio, 228 SCRA 183, G.R. No. 195567 November 25, 1993
C.
Relativity
1. Contracts take effect only between the parties, their assigns and heirsArticle 1311
CASES:
The Manila Railroad Co. vs. La Compaia Transatlantica, 38 SCRA 875, G.R. No. 11318.
October 26, 1918
DKC Holdings Corporation vs. Court of Appeals, 329 SCRA 666, G.R. No. 118248. April 5,
2000
2. No one may contract in the name of another- Article 1317
CASE:
Guiterrez Hmnos. vs. Orense, 28 Phil. 571, G.R No. 9188, 4 December 1914
IV. Parties
A. Auto-contracts
B.
Freedom to contract- Article 1306
CASES:
Gabriel vs Monte de Piedad y Caja deAhorros and CA, 71 Phil Reports 497, G.R. No. 47806.
April 14, 1941
Pakistan International Airlines vs. Ople, 190 SCRA 90, G.R. No. 61594, September 28, 1990
C.
1. Special disqualifications
a. Article 87 of the Family Code
b. Articles 1490 and 1491 of the Civil Code
c. Article 1782 of the Civil Code
What they may not stipulate - Article 1306
1. Contrary to law, e.g.:
a. pactum commissorium (Article 2088)
b. pactum leonina (Article 1799)
c. pactum de non alienado (Article 2130)
2. Contrary to morals
3. Contrary to good customs
4. Contrary to public order
CASES:
Cui vs. Arellano University, 2 SCRA 205, G.R. No. L-15127. May 30, 1961
Arroyo vs. Berwin, 36 SCRA 387, G.R. No. 10551. March 3, 1917
Filipinas Compania de Seguros vs. Mandanas, 17 SCRA 391, G.R. No. L-19638 June 20,
1966
Bustamante vs. Rosel, 319 SCRA 413, G.R. No. 126800. November 29, 1999
V. Classification
A.
B.
CASE:
Dizon vs. Baborro, 83 SCRA 688, G.R. No. L-36821. June 22, 1978
a. do ut des
b. do ut facia
c. facio ut facias
d. facio ut des
C.
D.
E.
F.
G.
H.
I.
According to perfection
1. by mere consent (consensual)- Article 1315
2. by delivery of the object (real)- Article 1316
According to its relation to other contracts
1. Preparatory
2. Principal
3. Accessory
According to form
1. Common or Informal
2. Special or Formal
According to purpose
1. Transfer of ownership, e.g. sale
2. Conveyance of use, e.g. commodatum
3. Rendition of services, e.g. agency
According to the nature of the vinculum produced
1. Unilateral
2. Bilateral
3. Reciprocal
According to cause
1. Onerous
2. Gratuitous
According to risk
1. Commutative
2. Aleatory
VI.
Stages
A.
Preparation
B.
Perfection
C.
Consummation or death
VII.
VIII.
CASES:
Florentino vs. Encarnacion, Sr., 79 SCRA 192, G.R. No. L-27696. September 30, 1977
Coquia vs. Fieldmens Insurance CO., Inc., 26 SCRA 178, G.R. No. L-23276. November 29,
1968
Constantino vs. Espiritu, 39 SCRA 206, G.R No. L-22404, 31 May 1971
Integrated Packaging Corp. vs. Court of Appeals, 333 SCRA 170, G.R. No. 115117. June 8,
2000
B.
C.
D.
CASES:
Daywalt vs. Corporacion PP Augustinos Recoletos, 103 Phil 444, G.R. No. 13505. February
4, 1919
So Ping Bun vs. Court of Appeals, 314 SCRA 751, G.R. No. 120554. September 21, 1999
Essential Requisites of Contracts
I.
Consent
A.
CASES:
Rosenstock vs Burke, 46 Phil. 217, G.R. No. 20732. September 26, 1924
Malabrosa vs. CA, 402 SCRA 168 (2003)
a. Offer
i. must be certain-Article 1319
ii. what may be fixed by the offeror
iii. when made through an agent- Article 1322
iv. circumstance when the offeror has become ineffectiveArticle 1323
v. business advertisements of things for sale-Article 1325
vi. advertisements for bidders- article 1326
CASE:
Jardine Davies vs. Court of Appeals, 333 SCRA 684, G.R. No. 128066. June 19, 2000
b. Acceeptance
i. must be absolute- Article 1319
ii. kinds
Express- Article 1320
Implied- Article 1320
Qualified- Article 1319
iii. if made by letter or telegram- Article 1319, par. 2
Kinds
Dolo causante- Article 1338
Dolo incidente- Article 1344, par. 2
Failure to disclose facts; duty to reveal themArticle 1339
CASES:
Tuason vs. Marquez, 45 SCRA 381, G.R. No. 20659. November 3, 1923.
Rural Bank of Sta. Maria, Pangasinan vs. Court of Appeals, 314 SCRA 255, G.R. No. 110672
(1999)
CASES:
Azarraga vs. Gay, 52 Phil. 599, G.R. No. 29449. December 29, 1928.
Trinidad vs. Intermediate Apellate Court, 204 SCRA 524, G.R. No. 65922. December 3,
1991
II.
Object of Contracts
A.
B.
Requisite - must be determinate as to its kind- Article 1349
C. What may not be the objects of contracts
1. Future inheritance, except when authorized by law- Article 1347
CASES:
Blas vs. Santos, 1 SCRA 899, G.R. No. L 14070
Taedo vs. Court of Appeals, 252 SCRA 80, G.R. No. 104482. January 22, 1996
2. Impossible things or services- Article 1348
III.
Cause of Contracts
A.
B.
C.
Case:
Liguez vs. CA, 102 Phil 577
2. Statement of a false cause in the contract- Article 1353
3. Lesion or inadequacy of cause- Article 1355
Cases:
Carantes vs. Court of Appeals, 76 SCRA 514, G.R. No. L-33360. April 25, 1977.
Buenaventura vs. Court of Appeals, 416 SCRA 263, G.R. No. 126376. Nov. 20, 2003
D.
Presumption of the existence and lawfulness of a cause, though it is not
stated in the contract- Article 1354
Form of Contracts
I. General Rule: Contracts shall be obligatory, in whatever form they may have been
entered into, provided all the essential requisites for their valkidity are present.
II. Exception: When the law requires that a contract be in some form in order that it may be
valid or enforceable (Anglo- American principle)- Article 1356
CASE:
Dauden-Hernaez vs. De los Angeles, 27 SCRA 1276, G.R. No. L-27010. April 30, 1969
III.
Reformation of Instruments
I.
CASES:
Garcia vs. Bisaya, et al., 97 Phil. 609, G.R. No. L-8060. September 28, 1955.
Rosello Bentir vs. Leanda, 330 SCRA 591, G.R. No. 128991. April 12, 2000
II.
III.
IV.
V.
CASES:
Atilano vs. Atilano, 28 SCRA 231, G.R. No. L- 22487. May 21, 1969
Carantes vs. Court of Appeals, 76 SCRA 514, G.R. No. L-33360. April 25, 1977
Sarming vs. Dy, 383 SCRA 131, G.R. No. 133643. June 6, 2002
Interpretation of Contracts
(Compare with Rules on Statutory Construction)
I.
CASES:
Borromeo vs. Court of Appeals, 47 SCRA 65, G.R. No. L-22962. September 28, 1972
Kasilag vs. Rodriguez, 69 Phil. 217, G.R. No. 46623. December 7, 1982
II.
III.
1378
G.
When the doubts are cast upin the principal object so that the intention
cannot be known- Article 1378
IV.
Applicability of Rule 123, Rules of Court (now Sections 10-19, Rule 130)
Rescissible Contracts
I.
II.
Characteristics
A.
Their defect consists in injury or damage either to one of the contracting
parties or to third persons.
B.
They are valid before rescission.
C.
They can be attacked directly only and not collaterally.
D.
They can be attacked only either by a contracting party or by a third person
who is injured or defrauded
E.
They can be convalidated only by prescription and not by ratification.
III.
CASE:
Universal Food Corporation vs. Court of Appeals, 33 SCRA 1, G.R. No. L-29155 May 13,
1970
C.
Requisites
1. The contract is rescissible.
2. The party asking for rescission has no other legal means to obtain
reparation.- Article 1383
3. He is able to return whatever he may be obliged to restore if rescission is
granted - Article 1385
4. The object of the contract has not passed legally to the possession of a
third person acting in good faith - Article 1385
5. The action for rescission is brought within the prescriptive period of four
years - Article 1389
D.
E.
F.
CASES:
Oria vs. McMicking, 21 Phi. 243, G.R. No. 7003. January 18, 1912
Siguan vs. Lim, 318 SCRA 725, G.R. No. 134685. November 19, 1999.
Suntay vs. Court of Appeals, 251 SCRA 431, G.R. No. 114950. December 19,1995
G.
Liability of acquiring in bad faith the things alienated in fraud of creditors Article 1388
Voidable or Annullable Contracts
I.
II.
Characteristics
A.
Their defect consists in the vitiation of consent of one of the contracting
parties.
B.
They are binding until they are annulled by a competent court.
C.
They are susceptible of co-validation by ratification or by prescription.
III.
Annulment
A.
B.
C.
CASES:
Singsong vs. Isabela Sawmill, 88 SCRA 732, G.R. No. L-27343 February 28, 1979
D.
E.
CASES:
Cadwallader & Co. vs. Smith, Bell & Co., 7 Phil. 461, G.R. No. 3246. February 9, 1907
Velarde, et al. vs. Court of Appeals, 361 SCRA 56, GR No. 108346. July 11, 2001
a. When one of the parties is incapacitated- Article 1399
b. When the thing is lost through the fault of the party obliged to
return the same- Article 1400
F.
IV.
Ratification
A.
B.
C.
Requisites
1. The contarct is voidable.
2. The ratification is made with knowledge of the cause for nullity.
3. At the time of the ratification, the cause of nullity has already ceased to
exist.
Forms
1. Express or tacit- Article 1393
2. By the parties themselves or by the guardian in behalf of an incapacitated
party- Article 1394
Effects
1. Action to annul is extinguished- Article 1392
CASES:
Uy Soo Lim vs. Tan Unchuan, 38 Phil. 552, G.R. No. 12605. September 7, 1918
2. The contract is cleansed retroactively from all its defects- Article 1396
Uneforceable Contracts
I.
Characteristics
A.
B.
C.
II.
Unauthorized contracts
1. Governing rules- Article 1404
Contarcts covered by the Statute of Frauds
1. Purpose of Statute
CASES:
Philippine National Bank vs. Philippine Vegetable Oil Co., 49 SCRA 857, G.R. No. 25400.
January 14, 1927
Limketkai Sons Milling, Inc. vs. Court of Appeals, 250 SCRA 523, G.R. No. 118509.
December 1, 1995
Swedish Match vs. Court of Appeal, 441 SCRA 1, G.R. No. 128129. October 20, 2004
2. How ratified- Article 1405
CASE:
Carbonnel vs. Poncio, et al. , 103 Phil. 655, G.R. No. L-11231. May 12, 1958
3. right of the parties when a contract is enforceable but a public document is
necessary for its registration- Article 1406
C.
Characteristics
A.
B.
C.
II.
CASE:
Ubarra vs. Mapalad, 220 SCRA 224, A.M. No. MTJ-91-622. March 22, 1993
b. When the act is unlawful but does not constitute a criminal offense Article 1412
i. in pari delicto rule
CASES:
Modina vs. Court of Appeals, 617 SCRA 696, G.R. No. 109355. October 29, 1999
c. When the purpose is illegal and money isa paid or property
delivered therefore- Article 1414
d. When the contract is illegal and one of the parties is incapable of
giving consent- Article 1415
CASES:
Liguez vs. Court of Appeals, 102 SCRA 579, G.R. No. L-11240. December 18, 1957
Rellosa vs. Gaw Chee Hun, 93 Phil. 827, Gr. No. L-1411 September 29, 1953
e. When the agreement is not illegal per se but is prohibitedArticle 1416
CASES:
Philippine Banking Corporation vs. Lui She, 21 SCRA 53
Alfred Fritz Frenzel vs. Ederlina Catito, 406 SCRA 55, G.R. No. L-50449. July 11, 2003
f. When the amount paid exceeds the maximum fixed by lawArticle 1417
g. When by virtue of a contract a laborer undertakes to work
longer than the maximum number of hours of work fixed by
law- Article 1418
h. When a laborer agrees to accept a lower wage than that set
by law- Article 1419
i. When the contract is divisible- Article 1420
j. When the contract is the direct result of a previous illegal
contract- Article 1422
B.
III.
IV.