1. Barredo F: Malate taxicab and caritela collision inroad bet.

Malabon and
v Garcia Navotas
Pedro fontanillaemployed by fausto barredo, pedro dimapilis,
Faustino Garcia (died)
QUASI-DELICTS:
taxicab operator liability
> subsidiary (under criminal case first exhausting props of driver)
> primary (negligent employer)
difference bet crime and quasi-delict
> public v private interest
> punishment v indemnification
> according to penal law v any kind of negligence
> beyond reasonable doubt v mere preponderance of evidence
2. Mendoza F: Collision of a truck and a jeepney which produces a collision
v Arrieta between the jeepney and a mercedez benz in McArthur HWay,
Marilao, Bulacan. Owner of Mercedes Benz (Mendoza)sued driver of
jeepney(Salazar) and the owner of the truck( Tibol, driven by
Montoya). Jeepney driver filed charges against truck driver. Truck
driver found guilty. Case against jeepney driver dismissed. Owner of
Mercedes Benz appealed and said that his cause of action arises out
of a quasi-delict—a negligent act which causes the collision.

H: A civil action under quasi-delict may proceed

independently of criminal proceedings for criminal
negligence, and may prosper regardless of the result of the
criminal proceedings. The collision between the owner of
Mercedez Benz and the jeepney driver is the result of the truck
driver’s conduct. The petitioner based his complaint on culpa
criminal and not culpa aquiliana and it is believe that the jeepney
driver cannot be held liable to such.
3. PSBA v F: PSBA student Carlito Bautista was stabbed by a person not a
CA, Bautista student of the school. The parents of Carlito sued the school.
and
Baustista H: Carlito’s assailants were not from PSBA. Art 2180 establishes the
rule of in loco parentis >> damage caused or inflicted by pupils or
students of an educational institution were liabilities of said
institution while in its custody, hence, PSBA is not liable for the
assailant’s action since they were not PSBA’s students.
The proper premise would have been based WON there was a
breach of contract between PSBA and Carlito. PSBA is supposed to
provide an atmosphere of learning and safety. The rule on quasi-
delict does not apply. The trial court proceedings must continue in
order to determine WON there has been such breach.
4. Amadora F: Alfredo Amadora was in the premises of his school. Colegio de
vs. CA San Juan-Recoletos, when a classmate fired a gun at him
which killed him. Alfredo’s parents filed a civil action against the
school, its rector, the high school principal, the dean of the boys, and
the physics teacher, together with the students liable for the killing,
under Art 2180 of the Civil Code.

H: Those liable under Art 2180 are the teachers-in-charge for

academic institutions and head of schools for schools of arts
and trades. In the case at bar, none of the respondents
were liable. The rector, the principal and the dean of the boys
exercised general authority only. The same reasoning applies for the
physics teacher. There was no showing of negligence on the part of
the respondents.
5. Song Fo F: delivery by the Hawaiian-Philippine Co. to Song Fo & Co. of
v Hawaiian 300,000 gallons of molasses. The language used in another
Phils exhibit with reference to the additional 100,000 gallons was not a
definite promise.
 BREACH (substantial/casual):
- casual breach only. There was substantial performance
RECIPROCAL (rescission):
- no bec ause of 20 day rule
6. Velarde F: Gorge Raymundo, David’s father, negotiated with Avelina and
v CA Mariano Velarde (plaintiffs) for the sale of David’s property, which
was under lease
sale of Dasma property and in return, assumption of mortgage
payments
BREACH (substantial/casual):
- substantial breach bec of nonpayment in mortgage
VIODABLE (mutual restitution):
- considered rescinded under A1191 TF mutual restitution
7. Woodho F: 30 day option for exclusive bottling franchise from LA,USA;
use v Halili mission soft drink franchise
FRAUD (incidente/causante): incidente
CONSENT (fraud):
8. Geraldez F: Volare 3 European tour: 22-day tour of Europe for 190,000 Php.
v CA No European manager, dilapidated hotels.
A case of dolo causante
9. Guttiere F: Collision between a passenger truck(Abelardo Velasco, owned by
zv Saturnino Velasquez) and a private automobile (Bonifacio Gutierrez)
Guttierez while attempting to pass each other over Talon bridge in Las Pinas.
The collision resulted in Narciso Guttierez(passenger of autobus)
having to suffer a fractured right leg. He blames both parties for the
collision but the owner of the passenger truck blames the automobile
and vice versa.
H: Drivers are negligent since they did not give way to each other.
Father of the car driver (Manuel Gutierrez) was also liable since he
gave his guarantee when his son applied for a driver’s license that
his son is competent to drive. In the US, it is uniformly held that the
head of the house and the owner of the vehicle is liable for the
negligent acts of his children when he authorized them to run it.
10.Vasquez F: Delivery of 4,000 sacks of palay but only 2,488 cavans were
v Borja delivered.
De Borja entered into a contract with Natividad-Vazquez Sabani
Development to purchased 4,000 sack of palay at P2.10 per sack.
The person responsible for the company (Vasquez and
Busuego), instead of the company delivering it was sued
H: A Corporation has a personality of its own. But the person
operating the company is also morally responsible for the breach of
a contract. There is a difference between a contractual and
extra-contractual obligation. In the contractual obligation, it is
the obligor who fulfill aid contract and not its agents. Hence, the
obligor is the party guilty of negligence in the performance of a
contract. On the other hand, if independently from the contract, the
person, by his fault or negligence caused damage to the plaintiff,
then he would be personally liable for such damage to the plaintiff,
then he would be personally liable for such damage. But since the
case is based on a contract, the court has no jurisdiction over that
issue and not adjudicate.
11. De Guia F: train (Meralco train)ran over man in platform (Dr. De Guia)
v Manila holding the handle of the door; refused to be brought to the
Electric hospital; consulted many doctor friends (in gratis)
NEGLIGENCE (standard of care required):
- An experienced and attentive motorman should have discovered
that something was wrong and would have stopped before he had
driven the car over the entire distance from the point where the
wheels left the track to the place where the post was struck.
- The court granted that there is negligence as shown by the
distance which the car was allowed to run with the front
 wheels of the rear truck derailed, aside from the fact that the car
was running in an excessive speed.
12.US v F: train accident; Barias was the motorman of a train. When he
Barias stopped to take in some passengers, he looked backwards to note if
all the passengers are aboard. He was not able to see the three-
year old child who ran in front of the train. The child died.
H: Evidence shows that the place where the incident occurred is a
public street (Manila) and at the time where the residents are up and
about (6 am). Being such, Barias should have employed more
caution. With an exercise of due diligence, the accident would not
have occurred.
13.Sarmient F: resetting a diamond earring into two gold rings. The
o v Sps. diamond was removed by Zenon Santos the setting with a pair of
Cabrido pliers resulting in the breakage of the gem.
H: There is negligence in resetting the jewelry. 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 or the person, the time and of the place.
14.Crisosto F: Atty Crisostomo contracted the services of Caravan Travel and
mo v CA Tours International for the “Jewels of Europe tour”; Agent is her
niece Menor. She missed her flight (went there Saturday when flight
was on Friday) because she failed to confirm her flight schedule. She
then went to “British pageant” tour.
H: For reasons of public policy, a common carrier in a contract of
carriage is bound by law to carry passengers as far as human care
and foresight can provide using the utmost diligence of a very
cautious person and with due regard for all circumstances. However,
a travel agency is not a carrier. It’s obligation is to procure
tickets and facilitating travel permits or visas and booking customers
for tours. It is thus not bound under the law to observe extra-
ordinary diligence in the performance of its obligations.
15.Cetus F: Respondents Ong, Teng, Liwanag, Canlas, Sudario, Nagbuya, were
Developme lessees of premises in Quiapo, Manila, originally owned by the
nt Inc. v CA Susana Realty. Premises were sold to Cetus Development Inc., but
petitioners were not able to pay rent because no collector came.
Petitioners were asked to vacate premises, and afterwards, an
ejection suit was brought against them.
H: Section 2, RoC, "Landlord to proceed against tenant only after
demand." states that the right to bring an action of ejectment or
unlawful detainer must be counted from the time the defendants
failed to pay rent after the demand therefor. The demand required
partakes of an extrajudicial remedy that must be pursued
before resorting to judicial action so much so that when there is
full compliance with the demand, there is no need for court action.
-for purposes of bringing an ejectment suit, 2 requisites: 1) must be
failure to pay rent/comply with conditions of lease, and 2) must be
DEMAND to both pay or to comply and vacate.

16.Santos F: Santos Ventura Hocorma Foundation Inc (SVHFI) and Ernesto

Ventura Santos . SVHFI shall Santos P1.5 Million immediately upon the
Hocorma execution of the agreement, and the balance of P13 Million shall be
Foundation paid within a period of not more than two years. SVHFI sold two real
v Santos properties, which were previously subjects of lis pendens.
Discovering the disposition made by the SVHFI, Santos sent a letter
to the petitioner demanding the payment of the remaining P13
million, which SVFHI ignored. Compromise Agreement. Failure to
meet obligations upon demand

H: When the petitioner failed to pay its due obligation after the
demand was made, it incurred delay. Interest as damages is
generally allowed as a matter of right. Santos has been deprived
 of funds to which he is entitled by virtue of their compromise
agreement. The goal of compensation requires that the complainant
be compensated for the loss of use of those funds. This
compensation is in the form of interest.
- Article 1169 of the New Civil Code provides: Those obliged to
deliver or to do something incur in delay from the time the obligee
judicially or extra-judicially demands from them the fulfillment of
their obligation.
- In order for the debtor to be in default, it is necessary that the
following requisites be present: (1) that the obligation be
demandable and already liquidated; (2) that the debtor delays
performance; and (3) that the creditor requires the performance
judicially or extra-judicially.

17.Vasquez F: Sps Vasquez entered into a Memorandum of Agreement with Ayala

v Ayala Corporation with Ayala buying from the spouses all of their shares of
Corporation stock in Conduit Development, inc. Sps Vasquez demands Ayala to
fulfill the terms of the agreement and sell four lands to them at the
prevailing price in 1984. Ayala offered the prevailing price in 1990.

H: Although the paragraph has a definite object, i.e., the sale of

subject lots, the period within which they will be offered for sale to
petitioners and, necessarily, the price for which the subject lots will
be sold are not specified. The phrase “at the prevailing market
price at the time of the purchase” connotes that there is no definite
period within which AYALA Corporation is bound to reserve the
subject lots for petitioners to exercise their privilege to purchase.
Neither is there a fixed or determinable price at which the subject
lots will be offered for sale. The price is considered certain if it may
be determined with reference to another thing certain or if the
determination thereof is left to the judgment of a specified person or
persons.
-Rule on demand and delay…
18.Abella v F: Guillermo Francisco (defendant) purchased from the Government
Francisco on installments, lots 937-945 of the Tala Estate in Novaliches,
Caloocan, Rizal.
- He was behind in payment for these installments and on October
31, 1928, he signed a document stating that he received P500 from
Julio Abella (plaintiff) on account of lots no. 937-945
Tala Estate; failure to pay the price within the time specified
H: In holding that the time was an essential element in the contract,
the CFI considered that the agreement in question was an option for
the purchase of the lots. The SC, however, was divided on the
question of whether the agreement was an option or a sale. But the
SC ruled that regardless of whether it was an option or a sale, having
agreed that the selling price would be paid not later than December,
1928, and in view of the fact that the vendor executed the contract
to pay off with the proceeds thereof certain obligations which fell due
in the same month of December, the time fixed for the payment of
the selling price was essential in the transaction.
19.Vda de F: Payment for a lease of building and the destruction of the
Villaruel v property. Japanese Invasion. While the trial is pending, the property
Manila got burned.
Motor Co. H: The Japanese occupation (of the building) is a pertubacion
Inc. and de derecho (trespassing under color of title) and not
Colmenares pertubacion de hecho (mere act of trespass). This is because
the Japanese Occupation was legitimate following both International
and Domestic law recognize the use of private properties at the time
of war. Applying Art. 1560 the lessors are liable for it and that such
occurrence resulted to the deprivation of the lessee from the
peaceful use and enjoyment of the property leased. The obligation
 ceased during such deprivation.
- a fortuitous event
20.Tengco v F: A contract of lease; then a transfer of property (Lutgarda to
CA Benjamin Cifra). Tengco, even with the knowledge of this transfer,
attempted to pay to the same person. Payment refused. Tengco did
not deliver to the new owner nor consign it to the court.
H: refusal to accept payment is justified. There was already
a new owner.
- The tenant's mere failure to pay rent does not ipso facto make
unlawful his possession of the leased premises. It is failure to pay
rents after a demand therefore is made that entitles the lessor to
bring an action of Unlawful Detainer, Moreover, the lessor has the
privilege to waive his right to bring an action against his tenant and
give the latter credit for the payment of the rents and allow him to
continue indefinitely in the possession of the premises. During such
period, the tenant would not be in illegal possession of the premises
and the landlord can not maintain an action until after he has taken
steps to convert the legal possession into an illegal possession.
21.Central F: Island Saving Bank>> prohibited by the Central Bank to do
Bank of the business in the Philippines; Prior to this event, Island Saving Bank
Philippines approved a loan application of Sulpicio Tolentino. Island was not
v CA able to deliver the whole of the sum because of the prohibition.
Tolentino also incurred delay
H: Since both are in default, liability should be offset. Specific
Performance can no longer be possible because of prohibition
so rescission with mutual restitution is the most apt course.
22. Chavez v F: typewriter repair, P6 for spare parts; Chavez was compelled to
Gonzales have it fixed by another person
CONTAVENTION OF THE TENOR:
- gave back the typewriter with cover and essential parts missing
REMEDIES (substituted performance/undoing of poor work):
- went to another to have it fixed for P89.00
- payment for repair to another plus other costs for missing parts and
moral damages
23.Telefast F: The telegram; Sofia Crouch = daughter; was not able to deliver the
v Castro message to the relatives in the US. Relatives was not able to know of
their mother’s death
H: Operator liable to pay damages including moral damages
24. Arrieta v F: Burmese rice, not complied with letter of credit. Substituted with
NARIC Thailand rice, in dollars
BREACH (contravention of the tenor):
Letter of credit:
PAYMENT (what/identity):
- exchange rate at the time of the obligation incurred
25.Magat F: Defendant entered into a contract with US Navy Exchange Subic
vs. bay, Phil, for the Operations of a fleet of taxicabs with each cab
Medialdea having its taximeter and radio transceiver; private respondent
refused to open letter of credit; bad faith
H: The damages which the obligor is liable for includes not only the
value of the loss suffered by the obligee [daño 5mergence] but also
the profits which the latter failed to obtain [lucro cesante]. If the
obligor acted in good faith, he shall be liable for those damages that
are the natural and probable consequences of the breach of the
obligation and which the parties have foreseen or could have
reasonably foreseen at the time the obligation was constituted; and
in case of fraud, bad faith, malice or wanton attitude, he shall be
liable for all damages which may be reasonably attributed to the
nonperformance of the obligation. The same is true with respect to
moral and exemplary damages. The applicable legal provisions on
the matter, Articles 2220 and 2232 of the Civil Code, allow the award
of such damages in breaches of contract where the defendant acted
 in bad faith.
26.Taguilig F: Windmill; Jacinto Taguilig (JMT Engineering and General
v CA Merchandising) proposed to Vicente Herce jr. to construct a windmill.
Afterwards, the petitioner refused to pay the balance.
Deep well controversy; Windmill collapsed. O_o
H: The words "deep well" preceded by the prepositions "for" and
"suitable for" were meant only to convey the idea that the proposed
windmill would be appropriate for a deep well pump with a diameter
of 2 to 3 inches.
-The claim of Guillermo Pili of SPGMI that Herce Jr. wrote him a letter
asking him to build a deep well pump as part of the price/contract
Herce had with Tanguilig is unsubstantiated. The alleged letter was
never presented in court.
-If indeed the deep well were part of the windmill project, the
contract for its installation would have been strictly a matter between
petitioner and Pili himself with the former assuming the obligation to
pay the price.
-If the price of P60,000.00 included the deep well, the obligation of
respondent was to pay the entire amount to petitioner without
prejudice to any action that Guillermo Pili or SPGMI may take, if any,
against the latter.
-could not claim force majeure. Collapse of the windmill because of
strong wind in untenable. Strong winds are ought to be present
where windmills are constructed. Oo nga naman.
27.Khe F: Butuan Shipping Lines; Shipment of Copra in M/V PRINCE ERIC
Hong Cheng owned by Khe Hong Cheng. Prince Eric sank. The shipment has a
v CA marine insurance policy issued by American Home Insurance
Company. Having been subrogated to the rights of the consignee,
American Home instituted a civil case to recover money paid to
consignee.
While the case is still pending, Khe Hong Cheng executed deed of
donations of land to his children. (in fraud of creditors)
H: An action to rescind or an accion pauliana must be of last
resort, availed of only after all other legal remedies have been
exhausted and have been proven futile. For an accion pauliana to
accrue, the following requisites must concur:
1) That the plaintiff asking for rescission has a credit prior to the
alienation, although demandable later; 2) That the debtor has made
a subsequent contract conveying a patrimonial benefit to a third
person; 3) That the creditor has no other legal remedy to satisfy his
claim, but would benefit by rescission of the conveyance to the third
person; 4) That the act being impugned is fraudulent; 5) That the
third person who received the property conveyed, if by onerous title,
has been an accomplice in the fraud.
28.Siguan v F: Deed of Donation executed by Lim in favor of her children.
Lim H: donation is not in fraud of creditos. Accion Pauliana untenable.
Contracts entered in fraud may be rescinded only when the
creditors cannot in any manner collect the claims due them.
Action for rescission is a subsidiary remedy only. The petitioner was
not able to prove that she had exhausted other legal means to obtain
reparation for the same.
29. Juan F: construction of PBA Building in Manila. After earthquake,
Nakpil & substantial damage
Sons v CA FORTUITOUS:
- not fortuitous events bec other buildings did not incur damage
30. Republic F: barge (owned by Luzon Stevedoring) pulled by two tugboats
v Luzon (Bangus and Barbero) crashed into the Nagtahan bridge causing it
Stevedoring to list
FORTUITOUS:
- not fortuitous
- presence of two tugboats TF more control
31.Dioquino F: Laureano borrowed Atty. Dioquino’s car. The car was stoned by
v Lauerano some mischievous boys. As a result, the windshield broke.
H: Laureano has no obligation to pay for the damages sustained due
to throwing of stones that broke the windshield. The extraordinary
circumstance independent of his will as obligor exempts him of the
same by reason of force majeure or caso fortuito; There is no
requirement of diligence beyond what human care and foresight can
provide.
32.Austria v F:Abad received a pendant with diamonds to be sold on commission
CA basis or to be returned on demand. Private respondent Abad said
that while she was walking home, she was accosted by two
men and the jewelry was taken
H: To avail of the exemption granted in the law, it is not necessary
that the persons responsible for the occurrence should be found or
punished; it would only be sufficient to establish that the
unforeseeable event, the robbery in this case, did take place without
any concurrent fault on the debtor's part, and this can be done by
preponderant evidence.
Abad was negligent for coming home at night because of the
high crime rate. But that the same rule should obtain ten years
previously, in 1961, when the robbery in question did take place, for
at that time criminality had not by far reached the levels attained in
the present day.
33.NPC v CA F: ECI executed a contract with NAWASA to construct the 2nd IPO-Bicti
tunnel in Norzagaray. The construction covered the area of
defendant NPC (Ipo Dam); Typhoon Welming devastated the area.
To prevent overflow, NPC caused the opening of spillway
gates. The rush of water washed away the construction of
ECI.
H: As held in Juan Nakpil & Sons v. CA, the act of God doctrine
requires that the act must be occasioned exclusively by the violence
of nature and human agencies had no part therein. When the effect
is found to be in part the result of the participation of man, whether it
be active intervention, neglect or failure to act, the whole occurrence
is humanized and therefore removed from the rules applicable to the
acts of God.
>> NPC was negligent but it was not gross.
34.Yobido v F: Yobido Bus Liner bound for Davao City from Surigao del Sur. The
CA left front tire of the bus exploded. The bus fell into a ravine. The
tire which exploded was new.
H: The fact that a new tire was installed nor even the existence of
force majeure does not imply caso fortuito immediately as the carrier
must still prove that it was not negligent in causing the death or
injury resulting from the accident
- There were human factors involved in this case that showed
negligence such as the failure of the driver to slow down despite the
caution by a passenger, with a speed a little less than the speed
limit, on a road that was rough, winding and wet due to the rain.
Driver must have taken precautionary measures given the
circumstances but the driver did not do anything to this effect
- Driver was not able to overthrow the presumption of negligence.
35.Bacolod- F: BMMC is the owner and operator of the sugar central in Bacolod;
Murcia milling contract; BMMC was unable to use its railroad facilities
Milling Co., because it traverse another hacienda.
Inc. v CA H: petitioner took a calculated risk that all the landowners would
renew their contract, which is not the case.
36.Philcoms F: Globe coordinated the provision of various communication facilities
at v Globe for US military bases in Clark Air base and Subic Naval Base. Globe
Telecom was contracted which in turn entered into an agreement with
philcomsat. RP_US Military Bases Agreement expired. Globe
wants to terminate agreement with Philcomsat.
 H: It could not be considered as a force majeure since the expiration
was foreseeable. But the Court found it unjust to require Globe to
continue paying even though Philcomsat cannot be compelled to
continue performing its obligation.
37. Eastern 2 fiber drums of riboflavin were shipped from Yokohama, Japan for
Shipping delivery vessel "SS EASTERN COMET" owned by defendant Eastern
Lines v CA Shipping Lines.
USURIOUS: When an obligation, not constituting a loan or
forbearance of money, is breached, an interest on the amount of
damages awarded may be imposed at the discretion of the court at
the rate of 6% per annum. When the judgment of the court
awarding a sum of money becomes final and executory, the rate of
legal interest, whether the case falls under paragraph 1 or paragraph
2, above, shall be 12% per annum from such finality until its
satisfaction
38.Crismina F: Girl’s denim pants; petitioner failed to pay alleging that 6,164 of
Garments v 20,762 denims were defective.
CA H: Because the amount due in this case arose from a contract for a
piece of work, not from a loan or forbearance of money, the legal
interest of six percent (6%) per annum should be applied.
Furthermore, since the amount of the demand could be established
with certainty when the Complaint was filed, the six percent (6%)
interest should be computed from the filing of the said
Complaint. But after the judgment becomes final and executory
until the obligation is satisfied, the interest should be reckoned at
twelve percent (%12) per year.
39.Keng F: Respondent sea-land service, inc., a shipping company received
Hua 76 bales of unsorted waste paper for shipment to Keng Hua
Products v Paper products, Co. in Manila. Notices of arrival were transmitted to
CA the petitioner but the latter failed to discharge the shipment from the
container during the grace period. Demurrage charges accrued.
Petitioner countered that accepting the shipment which was 10
metric tons more than what was stipulated would violate Central
bank rules and regulations of custom and tariff laws.
H: Mere apprehension of violating customs, tariff and central bank
laws without a clear demonstration that taking delivery of the
shipment has become legally impossible cannot defeat the
petitioner’s contractual obligation and liability under the bill of lading.
The contract of carriage, as stipulated in the bill of lading,
must be treated independently of the contract of sale
between the seller and the buyer, and the contract for the
issuance of a letter of credit between the buyer and the
issuing bank. Any discrepancy between the amount of the goods
described in the commercial invoice in the contract of sale and the
amount allowed in the letter of credit will not affect the validity and
enforceability of the contract of carriage as embodied in the bill of
lading. Petitioner’s remedy in the case of overshipment lies against
the seller/shipper, not against the carrier.
- The case involves an obligation not arising from a loan or
forbearance of money, thus pursuant to Art. 2209 of the Civil Code
the applicable interest rate is 6% per annum to be computed from
the date of the trial court’s decision. The rate of 12% per annum shall
be charged on the total then outstanding from the time the judgment
becomes final and executory until its satisfaction.
NOTE: A bill of lading serves 2 functions. 1st, it is a receipt for the
goods shipped. 2nd, it is a contract by which three parties, namely,
the shipper, the carrier, and the consignee undertake specific
responsibilities and assume stipulated obligations.
40.Security F: Magtanggol Eusebio executed several promissory notes in favor of
Bank v RTC Secutiry Bank and Trust Co. with a 23% interest per annum. RTC
Makati ordered Eusebio to pay the balance with 12% interest.
 H: Central Bank Circular 905 was issued by Central Bank Monetary
Board which empowers them to prescribe the maximum rates of
interest for loans and certain forebearances
- This circular did not repeal or in any way amend the Usury
Law but simply suspended the latter’s effectivity; basic is the rule in
statutory construction that when the law is clear and unambiguous,
the court is left with not alternative but to apply the same in its clear
language
- respondent did not question the rate and it is not for the court to
change the stipulation in the contract where it is not illegal.
41. Almeda USURIOUS: 21% to 68% not valid, unconscionable, unilaterally
v CA raised the rates
42. Gaite v CONDITION (vs period): 11 iron lode mineral claims for P65,000
Fonacier - What characterizes a conditional obligation is the fact that its
efficacy or obligatory force (as distinguished from its demandability)
is subordinated to the happening of a future and uncertain event; so
that if the suspensive condition does not take place, the parties
would stand as if the conditional obligation had never existed
- this is a case of suspensive period or term
43.Gonzales F: Transfer of title to the property in Gonzales’ name as a
v Heirs of condition precedent to the payment of the agreed purchase
Thomas price.
H: Condition is defined as “every future and uncertain event upon
which an obligation or provision is made to depend. It is a future and
uncertain event upon which the acquisition or resolution of rights is
made to depend by those who execute the juridical act.”
- Without the fulfillment of the condition, sale of the property under
the Contract cannot be perfected, and Gonzales cannot be obliged to
purchase the property.
44.Coronel F: Conditional contract of sale of house and lot
v CA H: What is clearly established by the plain language of the subject
document is that when the said “Receipt of Down Payment” was
prepared and signed by the Coronels, the parties had agreed to a
conditional contract of sale, consummation of which is subject only
to the successful transfer of the certificate of title from the
name of petitioners’ father, Constancio P. Coronel, to their
names. The Court significantly notes that this suspensive condition
was, in fact, fulfilled on February 6, 1985.
45. Parks v CONDITION (resolutory): Donation; build park.
Province of For them to build park, the donation must first be effected.
Tarlac
46. Central CONDITION (resolutory):
Philippine PERIOD (court may fix):
University v Donation; build medical College
CA Even if no period, 50 years is more than enough to at least initiate
construction
47.Quijada F: Donation of two-hectare land to the municipalty of talacogon,
v CA Agusan del Sur with the condition that the parcel of land shall be
used solely and exclusively as part of the campus of the proposed
provincial high school of the said municipality. The donor sold a
part of the lot to a third person.
H: At the time of the sales, Trinidad could not have sold the lots since
the ownership had been transferred by virtue of the deed of
donation. So long as the resolutory condtion subsists and
capable of fulfillment, the donation remains effective and the
donee continues to be the owner subject only to the rights of
the donor or his successors-in-interest under the deed of
donation.
- Since no period was imposed by the donor on when the must the
donee must comply with the condition, the latter remains the owner
so long as he has tried to comply with the condition within a
 reasonable period. In this case, the Municipality manifested in a
resolution that they cannot comply with the condition of building a
school and the same was made known to the donor. This was when
the ownership reverted back to Trinidad as provided in the reversion
clause of the deed of donation.
-the donor still has an inchoate interest over the land. Such inchoate
interest may be the subject of contracts including a contract of sale.
Here what the donor sold was the land itself which she no longer
owned. It would have been different if what she sold were her
interests over the property under the deed of donation which is
subject to the possibility of reversion of ownership arising from the
non-fulfillment of the resolutory condition.
- Ownership by the seller on the thing sold at the time of the
perfection of the contract of sale is not an element for its perfection.
Perfection per se does not transfer ownership which occurs upon the
actual or constructive delivery of the thing sold.
48. Naga The contract between included, among others, a stipulation to the
Telephone effect that the contract shall “be as long as the party of the first part
Co, Inc v CA (NATELCO) has need for the electric post of the second part
(CASURECO II) it being understood that this contract shall terminate
when for any reason whatsoever, the party of the second part is
forced to stop, abandoned its operation as a public service and it
becomes necessary to remove the electric post”.
IMPOSSIBILITY (vs difficulty)
49. Osmena F: promised to pay debt next sugar harvest with her house as pledge
v Rama CONDITION (mixed):
- A condition imposed upon a contract by the promisor, the
performance of which depends upon his exclusive will, is void, in
accordance with the provisions of article 1115 of the Civil Code.
- It was suggested during the discussion of the case in this court that,
in the acknowledgment of the indebtedness made by the defendant,
she imposed the condition that she would pay the obligation if
she sold her house. If that statement found in her acknowledgment
of the indebtedness should be regarded as a condition, it was a
condition which depended upon her exclusive will, and is, therefore,
void. (Art. 1115, Civil Code.) The acknowledgment, therefore, was an
absolute acknowledgment of the obligation and was sufficient to
prevent the statute of limitation from barring the action upon the
original contract.
50. Hermosa F: sale property in Spain
v Longora CONDITION (mixed):
- The condition in question is not a condicion potestativa
since it also depends upon other circumstances beyond the
debtor’s control. The condition of the obligation was not purely a
potestative one, depending exclusively upon the will of the intestate,
but a mixed one, depending partly upon the will of the intestate and
partly upon chance. The will to sell on the part of the intestate was
present in fact, or presumed to legally exist, although the price and
other conditions thereof were still within his discretion and final
approval. There were still other conditions that had to concur to
effect the sale, mainly that a buyer, ready, able and willing to
purchase the property under the conditions demanded by the
intestate.
51. Taylor v F: operator for expeller machines; they terminated Taylor because
Uy Tieng they don’t want to start the il business anymore
Piao CONDITION (mixed):
- A condition at once facultative and resolutory may be valid even
though the condition is made to depend upon the will of the obligor.
CONDITION (effect prevention of fulfillment of condition by obligor):
- If it were apparent, or could be demonstrated that the
defendants were under positive obligation to cause the
 machinery to arrive in Manila, they would of course be liable,
in the absence of affirmative proof showing that the non-
arrival of the machinery was due to some cause not having
its origin in their own act or will.
- The contract, however, expresses no such positive obligation, and
its existence cannot be implied in the face of the stipulation, defining
the conditions under which the defendants can cancel the contract.
52. Rustan F: supplier of raw materials in paper mill
Pulp and CONDITION (mixed):
Paper Mills - Petitioners contend that they are within the right stoppage
v IAC guaranteed by par 7. There is no doubt that the contract speaks
loudly about petitioners' prerogative but what diminishes the legal
efficacy of such right is the condition attached to it which is
dependent exclusively on will of the petitioner… for which reason,
the SC treated the controversial stipulation as inoperative
53.Smith F:delivery of machines but the date of the delivery and the
Bell v delivery itself was not ensured because of the war. Refusal to
Sotelo Matti accept the delivery because of the supposed delay.
H: When no definite date has been fixed for the delivery of goods, the
obligor shall not be held guilty of delay in the fulfillment of its
obligation if it delivers the goods within a reasonable time.
54.Romero F: A Central Warehouse in Manila; a parcel of land was offered, but
vs. CA there were squatters in the area. Squatters were not evicted within
the contractual period stipulated.
H: Private respondent's failure "to remove the squatters from
the property" within the stipulated period gives petitioner
the right to either refuse to proceed with the agreement or
waive that condition in consonance with Article 1545 of the Civil
Code." This option clearly belongs to petitioner and not to private
respondent.
-The undertaking required of private respondent does not constitute
a "potestative condition dependent solely on his will" that might,
otherwise, be void in accordance with Article 1182 of the Civil
Codebut a "mixed" condition "dependent not on the will of the vendor
alone but also of third persons like the squatters and government
agencies and personnel concerned.". Where the so-called
"potestative condition" is imposed not on the birth of the obligation
but on its fulfillment, only the condition is avoided, leaving
unaffected the obligation itself.
55. Roman F: donated land subject to condition not to be sold in 100 years
Catholic CONDITION (impossible):
Arch of - the prohibition in the deed of donation against the alienation of the
Manila v CA property for an entire century, being an unreasonable
emasculation and denial of an integral attribute of
ownership, should be declared as an illegal or impossible condition
within the contemplation of Article 727 of the Civil Code.
Consequently, as specifically stated in said statutory provision, such
condition shall be considered as not imposed. No reliance may
accordingly be placed on said prohibitory paragraph in the deed of
donation
56.Herrera F: Leviste had obtained a loan from the GSIS. As security
v Leviste therefore, Leviste mortgaged two (2) lots, one located at Paranaque
and the other at Buendia with the 3-storey building thereon. Leviste
sold to Herrera the Buendia property with the condition that he would
assume Leviste’s indebtedness to the GSIS among others. Was not
able to comply. Properties were foreclosed. Leviste assigned the
right to redeem to Marcelo. Herrera contests the action as unjust
enrichment to Marcelo.
H: 1.Neither the GSIS, Marcelo nor Leviste benefited in any way at
the expense of Herrera. They paid and received what is due them.
2. Though Herrera actually suffered loss (amount he paid to Leviste,
 payment to GSIS less rentals received), but this loss are
attributable to his fault in: (a) not being able to submit collateral
to GSIS in substitution of Paranaque property, (b) not paying off the
mortgage debt, and (c)not making earnest effort to redeem the
property as possible redemptioner.
57. Boysaw F: fight of Elorde and Boysaw. Boysaw fought Luis Avila in violation
v Interphil of his contract with Elorde
Promotions RECIPROCAL (rescission):
- Boysaw violated the contract when he fought with Avila. Civil Code
provides, the power to rescind obligations is implied, in reciprocal
ones, (as in this case) in case one of the obligors shld not comply w/
what is incumbent upon him. Another violation was made in the
transfers of managerial rights. These were in fact novations which,
to be valid, must be consented to by Interphil. When a contract is
unlawfully novated, the aggrieved creditor may not deal with
the substitute.
- The appellees could have opted to rescind or refuse to recognize
the new manager, but all they wanted was to postpone the fight
owing to an injury Elorde sustained. The desire to postpone the fight
is lawful and reasonable. The GAB did not act arbitrarily in acceding
to the request to reset the date of the fight and Yulo himself agreed
to abide by the GAB ruling.
- The appellees offered to move the fight w/in the 30 day period for
postponement but this was refused by the appellants,
notwithstanding the fact that by virtue of the appellants’ violations,
they have forfeited any right to the enforcement of the contract.
58. UP v F: UP land with contract to ALUMCO for lumber but did not pay TF UP
Delos rescinded contract and got another company
Angeles RECIPROCAL (rescission):
UP can treat the contract with ALUMCO as rescinded without any
judicial pronouncement. The party who deems the contract
violated may consider it resolved or rescinded, and act
accordingly, without previous court action, but it proceeds at
its own risk. It is only the final judgment of the corresponding court
that will and finally settle whether the action taken was or was not
correct in law.
59. De F: bought shares but rescinded bec only property is hacienda
Erquiaga v RECIPROCAL (rescission):
CA - The Hacienda San Jose and 1,500 shares of stock have already been
returned to Erquiaga. Therefore, upon the conveyance to him of the
remaining 1,600 shares, Erquiaga (or his heirs) should return to
Reynoso the price of P410,000 which the latter paid for those shares.
Pursuant to the rescission decreed in the final judgment,
there should be simultaneous mutual restitution of the
principal object of the contract to sell (3,100 shares) and of
the consideration paid (P410,000). This should not await the
mutual restitution of the fruits, namely: the legal interest earned by
Reynoso's P410,000 while in the possession of Erquiaga, and its
counterpart: the fruits of Hacienda San Jose which Reynoso received
from the time the hacienda was delivered to him on November 4,
1968 until it was placed under receivership by the court on March 3,
1975.
- However, since Reynoso has not yet given an accounting of those
fruits, it is only fair that Erquiaga's obligation to deliver to Reynosa
the legal interest earned by his money, should await the rendition
and approval of his accounting.
60. Ong v CA F: Sps Robles enetered in an agreement to sell land to Ong. It was
stipulated that Ong pay loan of Sps Robles in BPI as payment.
But he did not comply. Sps Robles now asking for rescission under
A1191.
RECIPROCAL (rescission):
 - Article 1191 refers to rescission applicable to reciprocal obligations.
Rescission of reciprocal obligations under Article 1191 should be
distinguished from rescission of contracts under Article 1383.
- While Article 1191 uses the term “rescission,” the original term
which was used in the old Civil Code, from which the article was
based, was “resolution.” Resolution is a principal action which is
based on breach of a party, while rescission under Article 1383 is a
subsidiary action limited to cases of rescission for lesion under Article
1381 of the New Civil Code, which expressly enumerates the
rescissible contracts.
- The "Agreement of Purchase and Sale" shows that it is in the nature
of a contract to sell, as distinguished from a contract of sale. In a
contract of sale, the title to the property passes to the vendee upon
the delivery of the thing sold; while in a contract to sell, ownership is,
by agreement, reserved in the vendor and is not to pass to the
vendee until full payment of the purchase price. In a contract to sell,
the payment of the purchase price is a positive suspensive condition,
the failure of which is not a breach, casual or serious, but a situation
that prevents the obligation of the vendor to convey title from
acquiring an obligatory force.
61. Visayan F: Scrap iron; a telegram to cancel the contract because of failure to
Saw Mill v comply with the conditions thereof. Non-fulfillment of a positive
CA suspensive condition.
H: What obtains in the case at bar is a mere contract to sell or
promise to sell, and not a contract of sale. The contract is not one of
sale where the buyer acquired ownership over the property subject
to the resolutory condition that the purchase price would be paid
after delivery. There was to be no actual sale until the opening,
making or indorsing of the irrevocable and unconditional
letter of credit.

62.Deiparin F:An agreement to construct a 3-storey dormitory between Sps

e,Jr. v CA carungay and Deiparine. However, the Carungays found out that
Deiparine was deviating from the plans and specifications, thus
impairing the strength and safety of the building.
H: The facts show that Deiparine deliberately deviated from the
specifications of the Carungays (changing the minimum strength,
concrete mixture, etc.), possibly to avoid additional expenses so as
to avoid reduction in profits. His breach of duty constituted a
substantial violation of the contract, which is correctible by judicial
rescission.
Particularly for reciprocal obligations, Art.1191 CC provides that: “The
power to rewind obligations is implied in reciprocal ones, in case one
of the obligors should not comply with what is incumbent upon him.
63.Iringan v Tugeugarao Cadastre (usual case of nonfulfillment and then
CA rescission))
64.Vda Parcel of land in Meycauayan Bulacan.
Mistica v The Kasulatan was a Contract of Sale therefore absolute in
Sps Naguiat nature given that there is neither a stipulation in the deed that title
to the property sold is reserved to the seller until the full payment of
the price nor a stipulation giving the vendor the right to unilaterally
resolve the contract the moment the buyer fails to pay within a fixed
period.
65.Lachica F: Lachica wanted to pay Araneta before date stipulated
v Araneta PERIOD (presumption):
- presumption is that period is for the benefit of both the creditor and
debtor TF cannot compel Araneta to accept such payment in advance
66. Ponce de F: Ponce tried to pay in advance Syjuco because he was being
Leon v hunted down by the Japanese being a member of the guerilla
Syjuco force
PERIOD (presumption):
 - presumption is that the period is deemed constituted in
favor of both the creditor and the debtor unless from its
tenor or from other circumstances it appears that the period
has been established for the benefit of either one of them
(Art. 1127, Civil Code).
- creditor cannot be forced to accept payment contrary to the
stipulation because he may (1) want to keep his money invested
safely instead of having it in his hands, or (2) want to protect himself
against sudden decline in the purchasing power of the currency
loaned specially at a time when there are many factors that influence
the fluctuation of the currency
67.Buce v Rentals; automatic renewal of the lease contract?
CA Held: The phrase "subject to renewal for another ten (10)
years" is unclear on whether the parties contemplated an
automatic renewal or extension of the term, or just an option
to renew the contract; and if what exists is the latter, who may
exercise the same or for whose benefit it was stipulated.
-There is nothing in the stipulations in the contract and the parties'
actuation that shows that the parties intended an automatic renewal
or extension of the term of the contract. The fact that the lessee was
allowed to introduce improvements on the property is not indicative
of the intention of the lessors to automatically extend the contract.
Neither the filing of the complaint a year before the expiration of the
15-year term nor private respondents' acceptance of the increased
rentals has any bearing on the intention of the parties regarding
renewal.
Fernandez v. CA is applicable to the case at bar, thus: In a
reciprocal contract like a lease, the period must be deemed
to have been agreed upon for the benefit of both parties,
absent language showing that the term was deliberately set for the
benefit of the lessee or lessor alone.
68.Araneta F: PSED bought land from Araneta with condition that he will
v Philippine construct roads surrounding the future Sto. Domingo Church.
Sugar Because of the squatters, Araneta has not complied with his end in
Estate constructing the roads. PSED asked that the court fix a period for
which Araneta should comply. TC and CA fixed it to 2 years
PERIOD (court may fix):*****
- Article 1197 is predicated on the absence of any period fixed by the
parties and it involves a two-step process. The court must first
determine that “the obligation does not fix a period” (or that the
period is made to depend upon the will of the debtor), “but from the
nature and the circumstances it can be inferred that a period was
intended.” The court must then proceed to the second step, and
decide what period was “probably contemplated by the parties.”
> here there was no date set probably bec of the presence of the
squatters and they don’t know the construction of the roads will be
predicated upon their eviction TF period set until squatters
evicted NOT 2 years
69. Ynchaus - An obligation to pay a sum of money is not novated in a new
ti v Yulo instrument wherein the old is ratified, by changing only the term
of payment and adding other obligations not incompatible
with the old one.
SOLIDARY (defenses available to solidary debtor against creditor)
Solidary debtors can be bound by different terms and proportions
70. Jaucian v F: deceased Rogero (represented by administrator Querol) thought
Querol he signed as surety for Dayadante but clear in contract that they
are solidarily bound (“jointly and severally)
SOLIDARY:
English (common law): “joint” > solidaria in fact
Spanish (civil law): mancomunadamente
joint – pro rata, mancomunidad simple, mancomunidad
 solidary - mancomunidad solidaria, in solidum, jointly and severally
71. RFC v CA F: Anduiza and Cano “jointly and severally” owed
Agricultural and Industrial Bank (now RFC) P13,800. Madrid, who
stayed at Anduiza’s during the war, paid their debt when they did not
pay such loan.
> debts due because of the phrase “on or before”
> payment can be made by any person, whether approved by the
debtor or not. One who makes the payment may recover from the
debtor, unless it was made against his express will. In the latter case,
he can recover only in so far as the payment was beneficial to him.
> Madrid then is entitled to pay the obligation irrespective of
Anduiza’s will or the bank.
SOLIDARY:?
72.Quiombi Construction and Service Agreement whereby Nicencio Tan
ng v CA Quiombing and Dante Biscocho, as the 1st Party, jointly and severally
bound themselves to construct a house for private respondents
Francisco and Manuelita Saligo, as the 2nd Party.
The question of who should sue the private respondents was a
personal issue between Quiombing and Biscocho in which the
spouses Saligo had no right to interfere. It did not matter who as
between them filed the complaint because the private
respondents were liable to either of the two as a solidary
creditor for the full amount of the debt
73. Inciong v F: signed promissory note as solidary debtor (“jointly and severally
CA liable”) not guarantor for P50,000 which they thought to be P5,000
only (for buying chainsaw)
> no trickery since signature above typewritten figure)
SOLIDARY:
- difference between guarantor and suretyship
- difference between solidary co-debtor and fiador in solidum
> A guarantor who binds himself in solidum with the principal debtor
under the provisions of the second paragraph does not become a
solidary co-debtor to all intents and purposes. There is a difference
between a solidary co-debtor, and a fiador in solidum (surety). The
later, outside of the liability he assumes to pay the debt before the
property of the principal debtor has been exhausted, retains all the
other rights, actions and benefits which pertain to him by reason of
the fiansa; while a solidary co-debtor has no other rights than those
bestowed upon him in Section 4, Chapter 3, title 1, Book IV of the
Civil Code.
74.Alipio v F:Lease of 14.5 hectare of Fishpond; The lease was for a period of
CA five years. Respondent subleased the pond. Placido Alipio, the
sublease, died. Jaring sued for collection while Alipio’s wife move for
dismissal on the grounds that her husband is dead.
H: Under the law, the Alipios' obligation (and also that of the
Manuels) is one which is chargeable against their conjugal
partnership. When petitioner's husband died, their conjugal
partnership was automatically dissolved and debts
chargeable against it are to be paid in the settlement of
estate proceedings.
75.Makati F: Makati Development Corporation sold to Rodolfo P. Andal a lot,
Dev’t Co. v with an area of 1,589 square meters, in the Urdaneta Village, Makati,
Empire Rizal, for P55,615
Insurance H: - penal clause in this case was inserted not to indemnify
Co. MDC for any damage it might suffer as a result of a breach of
the contract but rather to compel performance of the so-
called "special condition" and thus encourage home building
among lot owners in the Urdaneta Village
76.Tan v CA 2 loans from the CCP
H: Article 1226 of the New Civil Code provides that:
“In obligations with a penal clause, the penalty shall substitute the
 indemnity for damages and the payment of interests in case of non-
compliance, if there is no stipulation to the contrary. Nevertheless,
damages shall be paid if the obligor refuses to pay the
penalty or is guilty of fraud in the fulfillment of the
obligation. The penalty may be enforced only when it is
demandable in accordance with the provisions of this Code.” The
promissory note expressly provides for the imposition of both
interest and penalties in case of default on the part of the
petitioner in the payment of the restructured loan.
77.Country Lease Agreement involving the Avenue, Broadway and
Bankers Capitol theaters
Insurance v H: As a general rule, in obligations with a penal clause, the penalty
CA shall substitute the indemnity for damages and the payment of
interests in case of non-compliance. However, there are exceptions:
1) when there is a stipulation to the contrary
2) when the obligor is sued fro refusal to pay the agreed penalty
3) when the obligor is guilty of fraud
The forfeiture clause in the lease agreement would not unjustly
enrich OVEC at expense of Sy and CBISCO—contrary to law, morals,
good customs, public order or policy. A penal clause is an accessory
obligation which the parties attach to a principal obligation for the
purpose of insuring the performance thereof by imposing on the
debtor a special prestation (generally consisting in the payment of a
sum of money) in case the obligation is not fulfilled or is irregularly or
inadequately fulfilled.
In the case at bar, the penalty cannot substitute for the
P100,000.00 supposed damage suffered by OVEC from
opportunity cost. It represents the P10,000 per month in additional
rental during the ten months of injunction period. Thus, it must be
applied against the injunction bond.
78. Kalalo v F: engineering services by Kalalo to architect firm of Luz.
Luz Agreement in dollars. Also Kalalo sent statement of account to Luz
stating the fees for the projects but when Kalalo demanded payment,
it was higher than was stipulated in the statement of account
PAYMENT (what/identity):
- payment in dollars prohibited by RA 529 but if agreement prior to
enactment (June 16, 1950), exchange rate set at the time of the
obligation was incurred BUT it cannot be ascertained TF exchange
rate at the time of payment shall be applied
ESTOPPEL (definition):
- essential elements of estoppel in pais
party to be estopped
1) conduct amounting to false representation or concealment of
material facts or at least calculated to convey the impression that the
facts are otherwise than, and inconsistent with, those which the party
subsequently attempts to assert
2) intent, or at least expectation that this conduct shall be acted
upon by, or at least influence, the other party
3) knowledge, actual or constructive, of the real facts
party claiming estoppel
1) lack of knowledge and of the means of knowledge of the truth as
the facts in question
2) reliance in good faith upon the conduct or statements of the party
to be estopped
3) action or inaction based thereon of such character as to change
the position or status of the party claiming the estoppel, to his injury,
detriment or prejudice
> statement of account was written by mistake TF Kalalo not
estopped
79.St. Paul F: Winthrop products shipped onboard SS Tai Ping, owned
Fire and and operated by Wilhelm Wilhelmsen, 218 cartons and drums of
Marine drugs and medicine. The shipment was insured by St. Paul Fire and
Insurance Marine Insurance Company. Insurance company paid Winthrop the
Co. V amount of damage materials and became subrogated to the rights of
Macondray Winthrop.
and Co., H: the liabilities of the defendants-appellees with respect to the lost
Inc. or damaged shipments are expressly limited to the C.I.F. value of the
goods as per contract of sea carriage embodied in the bill of lading.
The plaintiff-appellant, as insurer, after paying the claim of the
insured for damages under the insurance, is subrogated merely to
the rights of the assured. As subrogee, it can recover only the
amount that is recoverable by the latter. Since the right of the
assured, in case of loss or damage to the goods, is limited or
restricted by the provisions in the bill of lading, a suit by the
insurer as subrogee necessarily is subject to like limitations
and restrictions.
The C.I.F. Manila value of the goods which were lost or damaged,
according to the claim of the consignee dated September 26, 1960 is
$226.37 and $324.3 or P456.14 and P653.53, respectively, in
Philippine Currency. The peso equivalent was based by the consignee
on the exchange rate of P2.015 to $1.00 which was the rate existing
at that time. The trial court committed no error in adopting the
aforesaid rate of exchange.

80.Papa v F:Testate of Angela Butte; land ws mortgaged by the deceased.

Valencia However, that same land was sold by Papa, who was acting as
attorney-in-fact of the deceased, to respondent Penarroyo. But
before the title of the land was released, Angela passed away.
Petitioner kept on collecting rentals from tenants and refused to
deliver the property. Petitioner further alleges that he could no
longer recall the transaction that happened about 10 years ago. He
also testified that he did not encash the check.

H: It is untenable for petitioner not to have encashed the check after

all these years. In the case that he did not, it is thru his own fault
and delay
While it is true that the delivery of a check produces the
effect of payment only when it is cashed, pursuant to Art.
1249 of the Civil Code, the rule is otherwise if the debtor is
prejudiced by the creditor's unreasonable delay in
presentment. The acceptance of a cheek implies an undertaking of
due diligence in presenting it for payment, and if he from whom it is
received sustains loss by want of such diligence, it will be held to
operate as actual payment of the debt or obligation for which it was
given.
The cause of action for specific performance which respondents
Valencia and Peñarroyo have against petitioner is different from the
cause of action which the estate of Ramon Papa, Jr. may have to
enforce whatever rights or liens it has on the property by reason of
its being an alleged assignee of the bank's rights of mortgage.
81.PAL vs F: Absconding Sheriff
CA H: Payment should be made to the right person and in the
case that that person absconded, debtor would still be liable.
Defense of Fortuitous event untenable.
82. Reparati F: Universal bought 6 ships from Reparations Commission schedule
ons of payment in equal payments spread over 10 years
Commission APPLICATION OF PAYMENTS (most onerous):*****
v Universal - first installments due & demandable at time of the action &
Deep Sea payment of Universal of P10,000 shall be applied to surety company
Fishing as guaranteed portion of the debt (most onerous)
83.Paculdo F: Lease on several properties; wet market along Don Mariano
v Regalado Marcos Avenue, Fairview Park, Quezon City; non performance;
 application of payments

H: There was no clear assent from the petitioner to the change in the
manner of application of payment. The silence of the petitioner with
regard the request of the respondent with regard the application of
the rental did not mean that he consented thereto.
- Assuming further that petitioner did not choose the obligation to be
first satisfied, giving the respondent the right to apply the payments
to the other obligations of the petitioner, the law provided that no
payment shall be made to a debt not yet due (Article 1252 of
the Civil Code) and that payment must be first applied to the
debt most onerous to the debtor (Article 1254 of the Civil
Code).
84.DBP vs. F: Plaintiff CUBA is a grantee of a fishpond Lease Agreement from the
CA Gov’t; failed to pay
H: On NOVATION: the said assignment merely complemented or
supplemented the notes; both could stand together. The obligation to
pay a sum of money remained, and the assignment merely served as
security for the loans covered by the promissory notes.
- on CESSION: Article 1255 contemplates the existence of two or
more creditors and involves the assignment of all the debtor's
property, but in the case only DBP is the creditor
- on DATION: The assignment, being in its essence a mortgage,
was but a security and not a satisfaction of indebtedness so
not Dation as defined in Article 1254
85.Filinvest F: PAC purchased from Lim a 1969 Chevrolet and as security, he
Credit Corp. executed a chattel mortgage over vehicle in favor of Lim. Lim then
v Philippine assigned all his rights, title, and interest to the Filinvest Finance
Acetylene Corporation, which later on assigned all its rights to filinvest Credit
Corporation. Lim became fully paid, but Phil Acetylene defaulted in
nine successive payment. PAC alleges that it has already returned
the vehicle and thus extinguished its obligation.

H: The mere return of the mortgaged motor vehicle by the

mortgagor, the herein appellant, to the mortgagee, the
herein appellee, does not constitute dation in payment or
dacion en pago in the absence, express or implied of the true
intention of the parties.
Dacion en pago is the transmission of the ownership of a thing by the
debtor to the creditor as an accepted equivalent of the performance
of obligation. In dacion en pago, as a special mode of payment, the
debtor offers another thing to the creditor who accepts it as
equivalent of payment of an outstanding debt. The undertaking really
partakes in one sense of the nature of sale, that is, the creditor is
really buying the thing or property of the debtor, payment for which
is to be charged against the debtor's debt. As such, the essential
elements of a contract of sale, namely, consent, object certain, and
cause or consideration must be present. Dacion en pago=objective
novation
The fact that the mortgaged motor vehicle was delivered to him does
not necessarily mean that ownership thereof, as juridically
contemplated by dacion en pago, was transferred from appellant to
appellee. In the absence of clear consent of appellee to the proferred
special mode of payment, there can be no transfer of ownership of
the mortgaged motor vehicle from appellant to appellee.
86.De F: Sale of two parcel of land between de Guzman (seller) and Singh
Guzman v (buyer). Singh asked for a statement of account, Petitioner refused.
CA Singh defaulted in payment. A Compromise Agreement was entered
into. Singh allegedly did not deliver.
H: Singh had substantially complied with the terms and
conditions of the compromise agreement. Her failure to deliver
 to the petitioners the full amount on January 27, 1978 was not her
fault. The blame lies with the petitioners. The record shows that
Singh went to the sala of Judge Bautista on the appointed
day to make payment, as agreed upon in their compromise
agreement. But, the petitioners were not there to receive it. Only
the petitioners' counsel appeared later, but, he informed Singh that
he had no authority to receive and accept payment. The next day,
January 28, 1978, Singh went to the office of the Clerk of the Court of
First Instance of Rizal, Pasay City Branch, to deposit the balance of
the purchase price. But, it being a Saturday, the cashier was not
there to receive it. So, on the next working day, Monday, January 30,
1978, Singh deposited the amount of P30,000 with the cashier of the
Office of the Clerk of the Court of First Instance of Rizal, Pasay City
Branch, to complete the payment of the purchase price of P250,000.
87.TLG F: Bearcon Trading Co., Inc v Juan Fabella. Lease, sublease
Internation
al H: - In general, Art. 1260: Before the creditor has accepted the
Continental consignation, or before a judicial declaration that the
Enterprising consignation has been properly made, the debtor may
, Inc. V withdraw the thing or the sum deposited, allowing the
Flores obligation to remain in force”.
88. McLaugh F: Compromise agreement wherein to pay in June and in December
lin v CA balance for sale of real property. In Oct 15, made a demand for
payment of June installment. 17 days later, they complied. But,
creditor wanted rescission of contract.
CONSIGNATION:
- no rescission since substantial compliance (20 day rule in Song Fo)
- valid tender of payment but did not follow it with
consignation TF still liable
89.Meat PCGG terminated the lease-purchase agreement of MPCP, a
Packing corporation wholly owned by GSIS.
Corp of the
Phil. V SB The Sandiganbayan already approved the consignation by the PCGG
wherein consignation is the act of depositing the thing due with the
court or judicial authorities whenever the creditor cannot accept or
refuses to accept payment, and it generally requiresa a prior tendser
of payment. Tender on the otherhand is the antecedent of
conmsignation, an act preparatory to the consignation, which is the
principal, and from which are derived the immediate consequences
which the debtor desires or seeks to obtain. Tender of payment
maybe extrajudicial while consigning is necessarily judicial. The
priority of tendering payment is to attempt to make a private
settlement before proceeding to the solemnities of consignation.
Both tender and consignation validly made produces the
effect of payment and extinguishes the obligation.
90.Pabugais F: Sale of 1.239 square meters along Jacaranda St., North Forbes
v Sahijwani Park
H: There is a valid tender of payment in an amount sufficient
to extinguish the obligation, the consignation is valid.
petitioner's tender of payment in the form of manager's check is
valid even though it is not a legal tender since he did not object to
the form.
- Consignation is the act of depositing the thing due with the court or
judicial authorities whenever the creditor cannot accept or refuses to
accept payment and it generally requires a prior tender of payment.

91.Occena v F: Tropical Homes asked that the terms of the subdivision contract
CA be modified because of the spiraling oil prices
IMPOSSIBILITY (vs difficulty):
- Release could have been granted. However, they seek not release
from contract but that the court modify the terms and conditions.
 Court does not have authority to remake, modify, revise
contract. Modification has no basis in law.
92.PNCC vs. F: Lease; Raymundos; MHS; supposed abrupt change in the political
CA climate (EDSA Revolution)

H: ‘The debtor in obligations to do shall also be released

when the prestation becomes legally or physically impossible
without the fault of the obligor.’ However, petitioner cannot
successfully take refuge in the said article, since it is applicable
only to obligations “to do,” and not to obligations “to give”.
The obligation to pay rentals or deliver the thing in a contract of
lease falls within the prestation “to give”; hence, it is not covered
within the scope of Article 1266. At any rate, the unforeseen event
and causes mentioned by petitioner are not the legal or physical
impossibilities contemplated in the said article. Besides, petitioner
failed to state specifically the circumstances brought about by ‘the
abrupt change in the political climate in the country” except the
alleged prevailing uncertainties in government policies on
infrastructure projects.

93.Yam vs F: Industrial Guarantee and Loan Fund (IGLF Loan); Elena Yam
CA donee of Carlos Sobrepenashaha
H: Art. 1270, par. 2 of the Civil Code provides that express
condonation must comply with the forms of donation. Art. 748,
par. 3 provides that the donation and acceptance of a movable, the
value of which exceeds P5,000.00, must be made in writing,
otherwise the same shall be void. In this connection, under Art. 417,
par. 1, obligations, actually referring to credits, are considered
movable property. In the case at bar, it is undisputed that the alleged
agreement to condone P266,146.88 of the second IGLF loan was not
reduced in writing.
94.Gan Tion Gan Tion claims legal compensation between the P500 attorney’s
v CA fees and the P4,000 rent in arrears he needs to pay.
The SC ruled that attorney’s fees can be legally compensated as it
is the litigant, not the lawyer, who is the judgment creditor.
95.Silahis Silahis asserts its unrealized commission of P22,200 for legal
Marketin compensation.
g Corp. v The SC ruled compensation is not proper where the claim of
IAC the person asserting the set-off against the other is not clear
nor liquidated.

96.BPI v Reyes had joint accounts with his wife and with his grandma who later died. BPI
Reyes deducted from deposit account.
The SC ruled that compensation shall take place when two persons, in their
own right, are creditors and debtors of each other.
97.PNB v PNB applied Sapphire remittance to its double credit erroneously made on its
Sapphire account.
Shipping The SC ruled that a local bank, while acting as local correspondent bank, does not
have the right to intercept funds being coursed through it by its foreign
counterpart for transmittal and deposit to the account of an individual with
another local bank, and thereafter apply the said funds to certain obligations owed
to it by the said individual.
98.Mirasol v Spouses Mirasol claims legal compensation from PNB, financer of PHILEX, on the
CA proceeds of the sale of their export sugar.
The SC ruled that under PD 579, neither PNB nor PHILEX could retain any difference
claimed by the Mirasols in the price of sugar sold by the 2 firms. Neither any of them
owns the sugar, since it is now forfeited to the government.
100.Magdalena Spouses Rodriguez claims novation because of payment by the surety.
Estates v The SC ruled that the mere fact that the creditor receives a guaranty or accepts
Rodriguez payments from a third person who has agreed to assume the obligation, when there is
no agreement that the first debtor shall be released from responsibility, does not
 constitute a novation, and the creditor can still enforce the obligation against the
original debtor.
101.Reyes v CA It was found out that the loan given to BERMIC was the investments made by AFP-
MBAI.
The SC ruled that the mere circumstance of AFP-MBAI receiving payments from
Eleazar, president of BERMIC, who acquiesced to assume the obligation of
petitioner under the contract of sale of securities, when there is no clearly no
agreement to release petitioner from her responsibility, does not constitute
novation, but at most, co-debtorship or suretyship.
102. In consideration of R & B Surety's issuance of the Surety Bond with PAGRICO, two
Conchingyan, identical indemnity agreements were entered into with R & B Surety: (a) one
Jr. v R&B agreement dated 23 December 1963 was executed by the Catholic Church Mart (CM
Surety and and by petitioner Joseph Cochingyan, Jr.; the latter signed not only as President of CCM
Insurance Co. but also in his personal and individual capacity; and (b) another agreement dated 24
December 1963 was executed by PAGRICO, Pacific Copra Export Inc.(PACOCO), The SC
ruled that what the trust agreement did was, at most, merely bring in another
person or persons – the Trustors – to assume the same obligation that R&B
was bound to perform under the surety bond because the old debtors were
not released.
103. Broadway Broadway conceded to a “provisional and temporary agreement” with Tropical Hut.
Centrum The latter invokes novation.
Condominium The SC ruled that the agreement by its own terms was a “provisional and temporary
Corp v Tropical agreement to a reduction of Tropical’s monthly rental”. Temporary meaning the old
Hut obligation will be alive again and not forever dead, thus, no novation.
104. California California owes Delta, which in turn, owes SIHI. Delta assigned 5 promissory notes to
Bus Lines v SIHI but Delta later foreclosed California’s chattel mortgages pursuant to a new
SIHI compromise agreement. California thus refused to pay the promissory notes.
The SC ruled that the restructuring agreement merely provided for a schedule of
payments and the compromise agreement is invalid as Delta already assigned the 5
PNs. (can stand together principle)
105. Garcia v De Jesus issued a check, which bounced. Garcia contends Llamas’ acceptance of the
Llamas bum check is novation.
The SC ruled that De Jesus is a solidary obligor from the very beginning. The check
was issued precisely for the obligation.
106. Quinto v Petitioner Leonida Quinto received in trust several pieces of jewelry from Aurelia
People Cariaga with a total value of P36,000 with the purpose of selling the same on a
commission basis (if can’t sell, return after 5 days). After 6 months, Aurelia sent a
demand letter for the return of the items which petitioner ignored.
Quinto alleges that there is novation when the jewelry buyers paid directly to Cariaga
to settle their liability.
The SC ruled that there was no novation as the changes consists only in the manner of
payment. Also, novation does not extinguish liability for estafa.
107. Licaros v Licaros entered into a MOA with Gatmaitan whereby the latter would pay for Licaros’
Gatmaitan investment and in return be able to claim the investment proceeds from Anglo-Asean.
The MOA was not approved by Anglo-Asean (creditor of Licaros).
The SC ruled that this was a conventional subrogation requiring the consent of
Anglo-Asean in order to be perfected. This was evinced by the stipulations
contained therein requiring the bank’s conforme.
108. Astro Astro was granted several loans by the Philippine Trust Company (Philtrust) amounting
Electronics to P3M with interest.
Corp v Philguarantee paid 70% of Astro’s loan subject to the condition that it will be
Philippine subrogated into the rights of the latter’s creditor.
Export and The SC ruled that Astro’s acquiescence is not necessary nor explicitly stating
Foreign Loan subrogation in the agreement as this is legal subrogation that occurs by
Guarantee operation of law, and without need of the debtor’s knowledge.
Corp
109. GSIS v CA There was a marginal notation on the notarized Deed stating “subject to adjustment
pending approval of the Board of Trustees”.
The SC ruled that the respondent is not bound with the notation as the seller cannot
unilaterally increase the purchase price previously agreed upon.
110. Manila There was a mishap in the discharging of the boilers from the steamship. Manila
Railroad Co v Railroad sued the steamship company, which in turn sued the Atlantic Co.
La Compaña The SC ruled that diligence of a good father of a family is not a defense as Atlantic
Transatlantica Co.’s obligation is contractual. Atlantic Co. is also not directly liable to Manila
Road as an implied contract never arises where an express contract has been
made.
111. DKC Bartolome refuses to honor the option contract entered into by his deceased mother on
Holdings Corp the ground that he is not privy to it.
v CA The SC ruled that Art. 1311 clearly applies in this case and that being an heir of his
mother, there is privity of interest between him and his deceased mother.
What is binding against her is binding against him.
112. Gutierrez Orense’s nephew sold Orense’s land to Hermanos. Orense and his nephew refused
Hermanos v to vacate on the ground that his nephew never had the authority to sell but in an
Orense estafa case against his nephew, he testified that he gave his nephew consent to sell.
The SC ruled that the testimony virtually confirms and ratifies the sale effected
by his nephew. Whereas the sale was null and void before, now it is perfectly
valid.
113. Gabriel v Gabriel was required to execute a chattel mortgage to secure payment of the
Monte de deficiencies which resulted from his erroneous appraisal of the jewels pawned to the
Piedad pawnshop.
The SC ruled that the contract is valid as the freedom to contract is both a
constitutional and statutory right and to uphold this right, courts should move with
all the necessary caution and prudence in holding contracts void. In order to declare a
contract void as against public policy, a court must find that the contract as to
consideration or the thing to be done, contravenes some established interest of
society, or is inconsistent with sound policy and good morals or tends clearly to
undermine the security of individual rights.
114. Pakistan The employment contract at PIA states that PIA has the right to terminate employment
International subject only to the condition that the subject employee be given 1 month advance
Airlines v Ople notice.
The SC ruled that the principle of autonomy is not an absolute principle as
provisions relating to matters affected with public policy are deemed written
into the contract.
115. Cui v Cui was refused to have his TOR until he refunds the scholarship he was awarded to
Arellano by his former school.
University The SC ruled that the waiver of right to transfer school is invalid as it is contrary to
public policy and hence void. This case also cited the Monte de Piedad case.
116. Arroyo v Accused Juaneza proposed that the former will recognize plaintiff Arroyo’s ownership of
Berwin a land if the latter would drop charges of theft.
The SC ruled that an agreement by the owner of stolen goods to stifle the prosecution
of the person charged with the theft, for a pecuniary or other valuable consideration, is
manifestly contrary to public policy and the due administration of justice.
117. Filipinas 39 Non-life insurance companies assails the constitutionality of Art. 22 of the Phil.
Compañia de Rating Bureau Constitution which prohibits acceptance of reinsurance with a
Seguros v member not in good standing with the Bureau.
Mandanas The SC ruled that Art. 22 is valid as its purpose is not to eliminate competition
but to promote ethical practices among non-life insurance companies since
others are underrating their premiums.
118. Rosel entered into a loan agreement with creditors Bustamante wherein in the event
Bustamante v that the borrower fail to pay, the creditors has the option to buy or purchase the
Rosel collateral. Bustamante proposed to buy the collateral before the loan matured.
The SC ruled that the stipulation is not valid as it is a pactum commissorium. The
elements of pactum commissorium are: 1. There should be a property mortgaged by
way of security for the payment of the principal obligation and 2. There should be a
stipulation for automatic appropriation by the creditor of the thing mortgaged in case
of non-payment of the principal obligation within the stipulated period.
119. Dizon v Dizon executed a “Deed of Sale with Assumption of Mortgage” and an “Option to
Gaborro Purchase Real Estate” in favor of Gaborro. Dizon now wants the land back but Gaborro
refused.
The SC ruled that this is an innominate contract wherein Gaborro was given the
possession and enjoyment of the lands until Dizon can reimburse fully what Gaborro
has paid to the banks. Dizon has the right to reacquire the lands within 1 year by
 refunding Gaborro.
120. Florentino Heirs of Florentino want to register their inherited lands with the stipulation that in the
v Encarnacion deed of extrajudicial partition that the fruits in one particular parcel of land is to defray
the religious expenses of a church. The trial court ruled that the church must accept
in a particular form.
The SC ruled that a trust constituted between 2 contracting parties for the
benefit of a third party is not subject to the rules governing donation of real
property. 17 years of benefit to the church is implied acceptance.
121. Coquia v , as a result of a vehicular accident in Pangasinan, Carlito Coquia, driver of one of the
Fieldmen’s taxi cabs covered by said policy, was killed The parents of an employee who died on
Insurance Co the job seek to collect from his insurance but the Insurance Company refuses because
they have no contractual relation.
The SC ruled that the policy is of pour atrui and thus may be demanded by a
third person.
123. Constantino issued a fictitious absolute deed of sale to Espiritu with the intention that
Constantino v she hold the properties in trust for their unborn child. Espiritu instead mortgaged and
Espiritu tried to sell it.
The SC remanded to the trial court to determine whether the intention was really of
trust. This is a pour atrui although couched in the form of a deed of absolute
sale. Even if the son is not a party, he may demand fulfillment. (Note: Disini says this
is not a pour atrui as the benefit is not only a part of the document but the whole
document itself.)
124. Integrated IPC failed to comply with its agreement with Philacor because Fil-Anchor incurred delay
Packaging Corp in delivering the reams of paper to IPC.
v CA The SC ruled that the contract with Philacor is not a pour atrui. Fil-Anchor is not liable
because of the principle of relativity of contracts which provides that contracts
can only bind the parties who entered into it, and it cannot favor nor prejudice a
third person, even if he is aware of such contract and has acted with knowledge
thereof.
125. Daywalt v Daywalt accuses La Corporacion of maliciously advising Endencia not to comply
La Corporacion with her contract of sale so the corporation can use her land for pasturage.
de los Padres The SC ruled that the stranger cannot become more liable in damages for the
Agustinos nonperformance of the contract than the party in whose behalf he
Recoletos intermeddles.
Damages recoverable in case of the breach of a contract are two sorts namely: 1. the
ordinary, natural, and in a sense necessary damage; and 2. special damages. Ordinary
damages is found in all breaches of contract where there are no special circumstances
to distinguish the case from other contracts. Special damages on the other hand is only
found in case where some external condition, apart from the actual terms to the
contract exists or intervenes, as it were, to give a turn to affairs and to increase
damage in a way that the promisor, without actual notice of that external condition,
could not reasonably be expected to foresee.
126. So Ping So Ping Bun asked lessor Dee C. Chuan & Sons, Inc. to execute lease contracts in its
Bun v CA favor despite the facts that there is a subsisting lease contract between DCCSI and
lessee Tek Hua Trading Corp.
The SC ruled that where the alleged interferor is financially interested, and
such interest motivates his conduct, it cannot be said that he is an officious
or malicious intermeddler.
Elements of tort interference: 1. existence of a valid contract; 2. knowledge on the part
of the third person of the existence of contract; and 3. interference of the third person
is without legal justification.
127. Elser (represented now by Rosenstock) stated that he is in the position to entertain the
Rosenstock v purchase of his yacht.
Burke The SC ruled that the word entertain implies a mere invitation which is discretionary
upon him, this there is no valid and binding obligation, what more a contract.
128. Malbarosa Malbarosa did not accept the offered incentive compensation (it was lesser than
v CA what he demanded) until it was revoked.
The SC ruled that there was no valid acceptance as the offer was already
revoked. Malbarosa accepted the offer after learning of it’s revocation by SEADC.
Requirements of a valid acceptance: 1. express or implied; 2. absolute, unconditional,
and without variance of any sort from the offer; 3. known to the offeror; and 4. made in
 the manner prescribed by the offeror.
129. Jardine Pure Foods awarded its supply and installation of generators to Jardine Davies which
Davies v CA did not even participate in the bid.
The SC ruled that there was already a perfected contract between Pure Foods and
FEMSCO when the former sent a letter to the latter by which there enumerated
“basic terms and conditions” imposed on the performance rather than
perfection of the contract. The letter is the acceptance to FEMSCO’s bid
offers.
130.Sanchez v Sanchez and Rigos executed “Option to Purchase” whereby Rigos “agreed,
Rigos promised, and committed to sell” to Sanchez the sum of P1,510 a parcel of land. When
Rigos refused to accept the P1,510, Sanchez consigned it and filed for specific
performance.
The SC decision ruled, putting it differently, that if the option is without a
consideration, it is a mere offer to sell which is not binding until accepted.
Art. 1324 and 1479 are reconciled. In this case, Sanchez has accepted the offer before
revocation
131. Adelfa Adelfa Properties entered into an “Exclusive Option to Purchase” with respondents
Properties v CA Jimenez. However, Adelfa put on hold its payment until the respondents could dispose
of the civil suit brought against them.
The SC ruled that while the instrument they really executed is a contract to
sell, Adelfa can no longer compel the respondents to sell them the land
because of its delay in payment which precisely prompted the latter to
rescind the contract.
An option is a continuing offer or contract by which the owner stipulates with another
that the latter shall have the right to buy the property at a fixed price within a certain
time, or under, or in compliance with, certain terms and conditions, or which gives to
the owner of the property the right to sell or demand a sale. It is also sometimes called
an “unaccepted offer”. (Distinguish it with a contract to sell as to object of the sale,
whether the offer is accepted or not, and whether consignation is necessary in the
tender of payment.)
132. Asiain v Asiain offered to sell Jalandoni his hacienda Maria which allegedly contained between
Jalandoni 25 and 30 hectares and 2,000 piculs of sugar. It turned out it was only 18 hectares and
800 piculs of sugar.
The SC ruled that generally, if it is a contract of hazard, rescission will not lie. It would
also depend whether the sale is one by acre or by description (called sales in gross).
This case is not a contract of hazard. There was a mutual mistake as to the quantity of
land sold and as to the amount of the standing crop. The use of the phrase “more
or less” may relieve from exactness but not from gross deficiency.
133. Theis v CA Complainant Theis insists on having parcel #4 (which is not owned by respondent
Calsons Dev’t Corp.) and then later, parcel #2 and #3 (which has a 2-storey house on
it).
The SC ruled that the contract of sale may be annulled as mistake was
committed by the respondent in selling parcel #4. Such mistake invalidated
the buyer’s consent.
134. Heirs of Felisa Almirol executed a Donation Inter Vivos ceding her ½ share in an estate to
William Sevilla, Leopoldo Sevilla. The other heirs complained.
et al v The SC ruled that fraud and undue influence that vitiated a party’s consent
Leopoldo must be established by full, clear and convincing evidence, otherwise, the
Sevilla latter’s presumed consent to the contract prevails. Ei incumbit probation qui dicit,
non qui negat. He who asserts, not he who denies, must prove.
135. Dumasug Modelo persuaded Dumasug who cannot write to affix her mark on a document
v Modelo which turned out to be a conveyance of properties to the former, contrary to Dumasu’g
belief that it is for Modelo’s “advices”.
The SC ruled that it is null and void since the consent is null and void on the
ground that it was given by mistake (or deceit).
135. Hemedes Kausapin argues that the deed of conveyance in favor of stepdaughter Maxima was in
v CA English and that it was not explained to her.
The SC ruled that mere preponderance of evidence is not sufficient to
overthrow a certificate of a notary public to the effect that the grantor executed a
certain document and acknowledged the fact of its execution before him.
136. Katipunan Braulio Katipunan, Jr. claims that through insidious words and machinations, he was
v Katipunan made to sign a document which turned out to be an absolute deed of sale of his 5-door
apartment.
The SC ruled that the circumstances surrounding the execution of the contract
manifest a vitiated consent on the part of the respondent. It was impossible for
him to understand the contents of the contract written in English and embellished with
legal jargon. He only reached grade 3.
137. Martinez v Complainant asserts that she agreed to a conveyance of several properties as the
Hongkong and defendants made representations that if she does not do it, her husband will spend the
Shanghai rest of his life in Macau or be criminally prosecuted.
The SC ruled that duress was not present as she was able to seek advise from counsel,
friends and relatives, and even took advantage of the terms in the contract favorable
to her. The advice for her consent appeals to her common sense and not to
her fear. A reluctant consent is not equal to a vitiated one.
138. Hill v Maximina claims that what she signed was a blank note and that the promissory note
Veloso to Michael & Co. was filled in. She points to her co-debtor as the culprit.
The SC ruled that granting her defense to be true, what the law contemplates in
referring to fraud are the active and passive subjects of the obligation. In this case,
Maximina and the co-debtor are one single party against the creditor. The deceit
is not one exercised upon the other party but one practiced by a third person.
139. Tuason v Tuason bought from Marquez an electric light plant without the latter informing him
Marquez that the franchise was subsequently canceled.
The SC ruled that there was no fraud as the franchise was not the determining
cause of the purchase. It was also still in force and either of them could check its
status at the Public Utility Commissioner’ s Office. Tuason in any case estopped by
laches.
140. Rural Behis executed a deed of Absolute Sale with Assumption of Mortgage in favor of
Bank of Sta. Rayandyan & Arceño (RA) and another Agreement embodying the real consideration
Maria v CA of P2.4 million still in favor of RA all in the same day. The Bank claims it would not have
entered into an agreement with RA had it known the real consideration.
The SC ruled that there was no fraud as such consideration could not have been the
determining cause. The Bank entered into the agreement to effect payment on
Behis’ indebtedness, which is the real causa and not the large consideration.
and that RA had no legal obligation to disclose the real consideration.
141. Azarraga Azarraga sold 2 parcels of land to Gay but it turned out that the second parcel was only
v Gay 60 hectares instead of 98. Gay imputes misrepresentation.
The SC ruled that there was no misrepresentation because the buyer had
ample opportunity to appraise herself of the condition of the land which she
purchased. Moreover, Art. 1471 that if the sale is for a lump sum independent of the
number or measure, there is no right to increase or decrease proportionately to the
area difference as this is a determinate object.
142. Laureta Trinidad bought a house which turned out to be always flooded.
Trinidad v IAC The SC ruled that one who contracts for the purchase of real estate in reliance on the
representations and statements of the vendor as to its character and value, but after
he has visited and examined it for himself and has had the means and opportunity
of verifying such statements, cannot avoid the contract on the ground that
they were false and exaggerated.
143. Songco v Sellner accuses Songco of fraud when he said that the canes would produce 3,000
Sellner piculs of sugar when it produced only 2,017 piculs.
The SC ruled that the representation was only a mere opinion since the cane was still
standing in the fields and such quantity could not be known with certainty until milled.
Mere opinion is not equal to fraud.
144. Mercado Siblings Mercado (actively) misrepresented themselves to be 22 and 23 when
and Mercado v in truth they were 18 and 19 years old when they ratified a contract.
Espiritu The SC ruled that the sale of real estate effected by minors who have already passed
the age of puberty and adolescence and are near adult age, when they pretend to
have already reached their majority, while in fact they have not, is valid, and they
cannot be permitted afterwards to excuse themselves from compliance with
the obligation assumed by them or seek their annulment.
145. Braganza Rosario Braganza along with her children received a loan. They now invoke the
v Villa Abrille children’s minority.
The SC ruled that mere silence when making a contract as to age does not constitute
 fraud which can be made the basis of an action of deceit. The minors are still however
liable to the extent the loan benefitted them. This is diff. from Mercado case as this
here is passive misrepresentation.
146. Rodriguez Concepcion Felix conveyed ownership of 2 fishponds to her daughter by first marriage,
v Rodriguez who in turn transferred back the properties to her mother and stepfather making them
conjugal. Concepcion now wants the transfer to them voided.
The SC ruled that she cannot recover as the fact that prices were not paid does not
make the sales inexistent for want of causa. If her purpose was to convert the
property to conjugal thereby circumventing the prohibition against donations to
spouses, then it follows that it was intended that half of the ownership be vested to her
2nd husband. In any case, she cannot recover as she is in pari delicto.
147. Suntay v Suntay “sold” his land to his nephew for the NARIC application with the
CA condition that he will “resell” it back to him. His nephew instead mortgaged it.
The SC ruled that the a contract of purchase and sale is void and produces no
effect whatsoever where the same is without cause or consideration in that
purchase price, which appears thereon as paid, has in fact never been paid.
148. Blanco v Blanco, special administrator of Elizalde’s estate, wants a property disposed to Pares
Quasha on a sale-lease-back on the ground that it was absolutely simulated to circumvent the
ruling of Republic v Quasha which ruled on the Parity Amendment.
The SC ruled that in order to determine whether or not the transaction is
simulated, there is a need to look into the true intent or agreement of the
parties. To do so however is to pass upon a factual issue, a function that is not within
the province of the SC. Thus it upheld CA’s ruling.
149. Blas v Maxima Santos executed a document which stated that she would give ½ of all the
Santos properties she would receive from her husband to the heirs and legatees named in the
will of her husband when she makes her will.
The SC ruled that this is valid as it is not a future inheritance, her ½ share in
the conjugal assets being already in existence. Future inheritance is any property
or right not in existence or capable of determination at the time of the contract, that a
person may in the future acquire by succession.
150. Tanedo v Lazardo Tañedo executed a deed of absolute sale of his share in a certain property
CA which is a future inheritance.
The SC ruled that no contract may be entered into upon a future inheritance except in
cases expressly authorized by law. The affidavit validating the sale is useless.
151. Liguez v Salvador Lopez donated land to Conchita Liguez so that her parents would let
CA them have sexual relations.
The SC ruled that the motive may be regarded as causa when it predetermines the
purpose of theecontract. But to prove illicit causa requires clear and convincing
evidence. There is no pari delicto because one party is a minor and the other a
middle-aged man, thus there is inequality of awareness of illegality.The causa
is illicit but Conchita is still entitled only up to the extent as it does not prejudice the
interest of the wife.
152. Carantes Other heirs contend that the deed of assignment made in favor of Mateo Cervantes is
v CA void because there was no consideration and that it was just for the purpose of
transacting with the government for the Loakan Airport.
The SC ruled that total absence of consideration renders a contract void but in
this case, there was P1.00. Also, if there was fraud, it would only mean that it is
voidable and action has prescribed.
153. Sps. Some children of the Leonardo and Feliciana contend that the deed of sale made in
Buenaventura, favor of the rest of the children is void for failure to pay and if not, gross inadequacy of
et al v CA price.
The SC ruled that failure to pay the price is different from the lack of such.
Moreover, gross inadequacy of price does not affect a contract but may only
indicate defect in the consent. There is no requirement that the price be equal to
the exact value of the subject matter.
154. Hernaez v Motion actress Marlene Hernaez sued Hollywood Far East Productions for the balance
De los Angeles due to her but the latter contends that the law requires in writing for those exceeding
P500.
The SC ruled that aside from the fact that the contracts shall be obligatory in whatever
form, Art. 1357 states that the contracting parties may compel each other to observe
the required form once the contract is perfected. Nowhere in Art. 1358 does it say
 that the absence of the written for would make the agreement invalid or
unenforceable.
155. Garcia v Garcia bought from Bisaya land which turned out to be registered in the name of
Bisaya Sandoval. Garcia now wants a reformation.
The SC ruled that the court could not reform because the one who petitioned
the same did not allege his true intention. Furthermore, even if the courts do
reform, the sale would be ineffective. The proper action is annulment.
156. Bentir v Leyte Gulf Traders, Inc. entered into a contract of lease with Bentir starting 1968.
Leande Bentir sold the leased premises to spouses Samuel and Charito Pormada.
- LGT Inc questioned the sale alleging that it had a right of first refusal. It sought the
reformation of the expired contract of lease on the ground that its lawyer inadvertently
omitted to incorporate in the contract of lease executed in 1968, the verbal agreement
or understanding between the parties that in the event Bentir leases or sells the lot
after the expiration of the lease, LGT Inc has the right to equal the highest offer.
Leyte now wants a reformation.
The SC ruled that the action for reformation has prescribed. It started in 1968, and
not on the alleged extension. Prescription is 10 years.
157. Atilano v Eulogio Atilano II wants the sale reformed as he discovered that Lot No. 535-E was
Atilano designated in the contract as Lot No. 535-A which has a bigger area.
The SC ruled that there can be no reformation. When one buys real property, he
buys it as he sees it, not by the lot number. The true intention was already
followed evidenced by the 34 years of residence in the lands. Remedy is deed
of conveyance.
158. Sarming v The lawyer Atty. Pinili, thinking that the delivered title (5734) was the correct one
Dy (4163), drafted the contract of sale using 5734. Upon discovery, the buyer wants
reformation.
The SC ruled for reformation as there was a mistake in the designation of the
land intended to be sold.
159. Borromeo Villamor stated in a promissory note that he waives prescription and would pay
v CA even after 10 years.
The SC ruled that prescription should be counted excluding the first 10 years. The
interest of justice and equity cannot be ignored.
160. Kasilag v Emiliana Ambrosio and Marcial Kasilag executed a public deed (Exhibit 1) saying that
Rodriguez Kasilag bought Lot no. 285 (6.7540 hectares) under Homestead Certificate Title No.
325, with the assessed value of P940, from Ambrosio for the sum of P1000.
The SC ruled that the mortgage of land and the improvements are valid but the
antechresis verbally agreed upon is not as it is a real encumbrance which is
prohibited by Act No.2874 stating that land acquired under homestead law can’t
be encumbered for 5 years from issue. The terms, clauses, and conditions contrary to
law, morals and public order should be separated from the valid and legal contract and
when such separation can be made because they are independent of the valid contract
which expresses the will of the contracting parties.
161. Universal Magdalo Franciso invented the Mafran sauce and let UFC to be the only one to “use”
Food Corp v CA the formula.
He got kicked out as Chief Chemist and now wants rescission.
The SC ruled for rescission. This is a substantial and fundamental breach and
that what was meant to be returned is not the formula but the use and the
right to use.
162. Oria v Oria Hermanos & Co. sold all its properties to the manager’s son and nephew to some,
Mcmicking Manuel Gonzales, a student., so that when its creditors will go after the company it will
declare itself to be insolvent
The SC ruled that the transaction is fraudulent. Badges of fraud:
1. consideration fictitious or inadequate;
2. transfer after suit has begun or pending;
3. sale on credit to an insolvent debtor;
4. evidence of large indebtedness or complete insolvency;
5. transfer of all or nearly all of debtor’s property, esp. when he is insolvent or
greatly embarrassed financially;
6. transfer is made between father and son, when there are present other of the
above circumstances;
7. failure of vendee to take exclusive possession of all the property.
163. Siguan v Lim executed a deed of donation in favor of her children. Siguan executes an
Lim accion pauliana.
The SC ruled that rescission is a subsidiary remedy and in this case there was no
proof that Siguan has exhausted all other means to obtain satisfaction of her
claim. It does not appear also that the donor did not leave adequate property for the
credits. Lim’s prior conviction of estafa on another case is not relevant as the petitioner
there is not a party to this accion pauliana.
164. Singsong Various creditors of Isabela Sawmill want the “Assignment of Rights with Chattel
v Isabela Mortgage” nullified on the ground of fraud (to feign insolvency).
Sawmill The SC ruled that as a rule, a contract cannot be assailed by one who is not a
party thereto except when a contract prejudices the rights of a third person.
In this case, they can annul the assignment.
165. Cadwaller & Co. as assignees of the Pacific Export Lumber Company (PELC) asks for the
Cadwallader & amount of $3,486 which is the sum differential of the money that turned over to them
Co v Smith, and the money actually received. PELC exported cedar piles to be bought by Peabody
Bell & Co & Company (defendant/appellee) for the amount of $12 apiece however later on it was
found out that P&C was able to negotiate with the government and sold the piles for
$19 apiece. The SC ruled for annulment as there was fraud. Commission under
annulled contract not allowed.
166. Uy Soo Uy Soo Lim is an illegitimate son who received 7/9 of his father’s property. While a
Lim v Tan minor, he sold his share to his half-sister but 3 years after reaching majority, sought
Unchuan rescission.
The SC ruled against rescission. Conditions: 1. election to rescind must be within a
reasonable time after majority; and 2. all consideration in minor’s possession be
returned. The disposal of any part of the consideration after the attainment of
majority imports an affirmation of the contract.
167. Philippine PNB entered into a mortgage with Phil. Vegetable Oil when the latter is under the
National Bank former’s receivership.
v Philippine The SC ruled that the mortgage is null. PNB could legally secure no new mortgage
Vegetable Oil by the accomplishment of documents before its officials and the PVO officials
Co while the property of the latter was in custodia legis.
168. Limketkai BPI backed out from a sale to Limketkai as it turned out, they sold the land to
Sons Milling National Book Store.
Inc v CA The SC ruled there was a perfected contract as there was a concurrence of offer and
acceptance, on the object, and on the cause thereof. The fact that the deed of sale
still had to be notarized does not mean that no contract had already been
perfected. If the law requires a document or other special form, as in the sale of real
property, the contracting parties may compel each other to observe that form, once
the contract has been perfected. The cross-examination on the contract is deemed a
waiver of the defense of the Statute of Frauds. Moreover, under Art. 1403, an
exception to the unenforceability of contracts pursuant to the Statute of Frauds is the
existence of a written note or memorandum evidencing the contract. The memo may
be found in several writings, not necessarily in one document. The SC also said
the badges of fraud is not exclusive.
169. Swedish Swedish Match had a series of communications with ALS Corp. The communications
Match v CA mainly consisted of Swedish Match recommending a comprehensive review of the
Phimco shares.
The SC ruled that the memos are not evidence of a sale. The letter does not
indicate the price or the mode of payment. To satisfy the Statute of Frauds,
the note must be complete in itself and cannot rest partly in writing and
partly in parol. The note or memo must contain the names of the parties, the terms
and conditions of the contract, and a description of the property sufficient to render it
capable of identification.xxxThe Statute simply provides the method by which the
contracts enumerated therein may be proved but does not declare them invalid
because they are not reduced to writing.xxxThe Statute is not applicable to those
which have been consummated either totally or partially.
170. Carbonnel Poncio refused to execute conveyance pursuant to a sale. Carbonnel alleges partial
v Poncio consummation which would not bring the case within the Statute of Frauds but the TC
still dismissed.
The SC ruled that when the party concerned has pleaded partial performance,
such party is entitled to a reasonable chance to establish by parol evidence
 the truth of the allegation, as well as the contract itself.
171. Ubarra v Judge Mapalad dismissed a criminal case 90-4056 because they were in pari delicto.
Mapalad The SC ruled that the in pari delicto doctrine is a doctrine in civil law only and
to apply it to criminal cases would be to establish a dangerous doctrine which would
irreparably weaken the very foundations of the criminal justice system and frustrate
the administration of justice.
172. Modina v Modina questioned the apparent sale between spouses Ramon and Merlinda and
CA contended that they are in pari delicto. Merlinda contended that Ramon used
fraudulent means to obtain the land’s title.
The SC ruled that an exception to the in pari delicto rule is when it is invoked
with respect to inexistent contract. Since one of the characteristics of a void
contract is that it does not produce any affect, Merlinda can recover the property who
never acquired title thereto (except of course if purchaser is a buyer in good faith).
A purchaser in good faith is one who buys the property of another w/o notice that some
other person has aright to or interest in such property and pays a full and fair price at
the time of the purchase or before he has notice of the claim or interest of some other
person in the property.
173. Rellosa v Rellosa sold land to Chinese national Gaw Chee contrary Japanese Military Admin.
Gaw Cheen Seírei No. 6 and the Constitution.
Hum (1953) The SC ruled they are in pari delicto. They knew or presumed to knew that
what they did was contrary to law.
174. Philippine Lessee Wong took care of lessor Justina and in gratitude, the latter expanded the area
Banking Corp v of lease and lease period to 99 years. Her will ordered her heirs to respect the lease.
Lui She (1967) The SC that although there was nothing necessarily illegal, collectively they reveal a
pattern to circumvent what the Constitution directly prohibits (transfer to
alien). Even if they are in pari delicto, Art. 1416 allows the recovery of the property.
175. Frenzel v Australian Frenzel had an amorous relationship with Catito and bought properties in
Catito the latter’s name including a beauty parlor business, house and lot in Manila,
and resort in Davao because of the prohibition against aliens to own such. He later
however wanted to recover the contract.
The SC ruled they are in pari delicto. The sale to Frenzel is illegal per se.
176. Villaroel v Heir Juan executed note in 1930 owning up his parents debt despite
Estrada prescription.
The SC ruled he is liable as the action is not based on the original obligation but on that
which he contracted in 1930. Consideration of moral obligation is sufficient.
177.Fisher v Robb felt “morally responsible” for the second payments in Philippine Greyhound
Robb Club. Fisher wants all his money from him.
The SC ruled mere moral obligations/conscientious duties arising wholly from
ethical motives will not furnish a consideration for an executory promise.
Essential element of consideration lacking.
178. Manila Tarlac Development Corp. filed a case when the City of Manila exercised its right to
Lodge No. 761 repurchase but the trial court ruled that the land was of public domain, TDC in bad
v CA faith, and both are in estoppel.
The SC ruled that the government is never estopped by the mistakes of its
agents. Estopple does not operate/apply to validate a contract that is prohibited by
law or against public policy.
179. Miguel v The SC ruled that while the sale of Bacaquio to Catalino Agyapao is null and void for
Catalino lack of executive approval, the land should remain with Catalino as the inaction of
the heirs of the seller for 34 years justifies the defendants equitable defense
of laches.
180. Salao v There was allegation that the fishpond was held in trust by Ambrosia and Juanas the
Salao share of Benita’s father, Valentin in the joint venture.
The SC ruled that there was no trust as not a scintilla of documentary evidence was
presented. Parol evidence cannot be used to prove an express trust
concerning realty.
181. Fabian v false narration of facts because Silbina knew that she is not the only daughter and heir
Fabian of the deceased Pablo Fabian, and Teodora likewise knew all along that, as a mere
niece of the deceased, she was precluded from inheriting from him in the presence of
his four surviving daughters.
The SC stated that if the property is acquired through fraud, the person
obtaining it is considered a trustee of an implied trust for the benefit of the
 person from whom the property comes. In constructive trusts the rule is that
laches constitute a bar to actions to enforce the trust, and repudiation is not required,
unless there is a concealment of the facts giving rise to the trust.
182. Bueno v What was apparently designed to be an express trust was for the late Francisco H.
Reyes Reyes to file an answer in the cadastral proceeding and to obtain title to the
land for and in behalf of all the heirs of Jorge Bueno. But such express trust
failed to materialize, The appellants in this case aver that the trust was not implied but
express and that even if implied, implied trusts are imprescriptable.
- The SC ruled that while there are some decisions which hold that an action upon a
trust is imprescriptible, without distinguishing between express and implied trusts,
the better rule, as laid down by this Court in other decisions, is that prescription does
supervene where the trust is merely an implied one.
- Upon the general proposition that an action for reconveyance such as the present is
subject to prescription in ten years the appellees and the court a quo are correct. The
question here, however is: from what time should the prescriptive period be counted,
in the light of the allegations in the complaint?
An action for reconveyance prescribes and that it starts from the discovery
of the bad faith or mistake.
183. Tamayo v The SC ruled that where an implied trust was created in favor of Domantay by the
Callejo erroneous inclusion in the Tamayo brothers' certificate of title of the parcel
of land formerly sold by their parents to Domantay (who in turn sold it to Aurelio
Callejo) and on June 28, 1918, Mariano Tamayo, on his behalf and that of his brother
Marcos, expressly recognized the said previous sale by their parents to Domantay,
such express recognition had the effect of imparting to the aforementioned trust the
nature of an express trust which is not subject to the statute of limitations, at least,
until repudiated, in which event the period of prescription begins to run only from the
time of the repudiation. In the instant case, repudiation took place only in early
June, 1952, when the trustee rejected the beneficiary’s demand that the
disputed portion be excluded from TCT No. 5486 in the former's name. When the
instant case for reconveyance was filed on June 25, 1952, the period of prescription
had barely begun to run.