CASE DIGESTS in OBLIGATIONS AND CONTRACTS

SALEN vs. BALCE, G.R. NO. L-14414, April 27, 1960
FACTS: Gumersindo Balce, single, minor and living with the defendant, his
father Jose Balce, was convicted of homicide and was ordered to pay
the plaintiffs, the parents of the victim-Carlos Salen, for indemnity
amounting to ₱2,000.00. Gumersindo was insolvent, hence, the
Salens demanded from Jose Balce but he refused to pay on the
defense his son’s civil liability should be governed by the Revised
Penal Code (RPC) and not under Art. 2180 of the Civil Code.
ISSUE: WON Jose Balce can be subsidiarily liable to pay the indemnity his
son.
HELD: Yes, Jose Balce is subsidiarily liable with his son to pay the indemnity.
Generally, the civil liability arising from a crime shall be governed by
the RPC but since RPC made no mention of the liability of parents in
cases of minors over 15 years old who act with discernment, the
remedy would be to refer to the general law which is the Civil Code.
Under Article 2180 (2), the father or the mother can be held
subsidiarily liable unless the damage is caused with criminal intent.
MERALCO vs. RAMOY, G.R. NO. 158911, March 4, 2008
FACTS: The National Power Corporation (NPC) won an ejectment case
against several persons allegedly illegally occupying its properties in
Baesa, Quezon City. To execute such, NPC requested from MERALCO
that the electrical service connection of those residential and
commercial establishments beneath the NPC lines be immediately
disconnected and MERALCO agreed upon determination of the
affected establishments by NPC. One of which includes the residence
of the plaintiffs- the Ramoys.
ISSUE: WON MERALCO is liable for damages to the Ramoys for the sudden
disconnection of their electric power supply.
HELD: Yes. MERALCO is liable for damages to the Ramoys for the sudden
disconnection of their electric power supply which turned out to be
without any valid ground, pursuant to Articles 1170 and 1173 of the
Civil Code. Therefore, MERALCO failed to exercise the required utmost
diligence as a public utility service provider, hence, liable for culpacontractual being negligent in its performance of its obligation
derived from the Service Contract between MERALCO and its
consumers, one of which is the Ramoys.

2M for said subscription while the respondents. July 28. Subsequently. Clearly. No. Since PDIC cannot locate the loan records and title. Consignation of payment is necessarily judicial (Article 1258). and thus. G. that is. ARMED FORCES AND POLICE MUTUAL BENEFIT ASSOCIATION . while the respondent filed a motion to dismiss on the ground that the case falls within the jurisdiction of the Housing and Land Use Regulatory Board (HLURB).8M and pay up immediately ₱1. jurisdiction lies with the Trial Court and not HLURB. INC.UNLAD RESOURCES DEVELOPMENT CORPORATION vs. thus respondents filed a complaint for rescission of the agreement and the return of control and management of the Rural Bank from petitioners to respondents. the other partythe respondents can ask for rescission of the MoA on such ground. 2. shall transfer control and management over the Rural Bank to UNLAD Resources. WON the case makes out a case of consignation. DRAGON. SPOUSES CACAYORIN vs. The respondents complied with their obligation but the petitioners did not. ISSUES: 1. the petitioners failed to fulfill their end of the agreement. G. the petitioners-the spouses. NO. HELD: 1. Since UNLAD failed to comply with what is incumbent upon him. NO. the parties must be restored to the original state. plus damages. there was just cause for rescission. the MoA between the parties can be rescinded pursuant to Article 1191 of the Civil Code which states that “the power to rescind obligations is implied in reciprocal ones. Dragon and company. 149338. the Rural Bank was closed and placed under receivership by Philippine Deposit Insurance Corporation (PDIC). 2008 FACTS: The parties in this case entered in a Memorandum of Agreement (MoA) that UNLAD will invest in additional stocks worth ₱4. in case one of the obligors should not comply with what is incumbent upon him”. 2013 FACTS: Rural Bank approved a loan in favor of Oscar Cacayorin to buy one of the properties of AFPMBAI. thus. With the contract. before they entered into the Memorandum of Agreement. HELD: Yes. (AFPMBAI). filed a complaint for consignation of loan payment.R. April 15. WON the case falls within the exclusive jurisdiction of the HLURB. ISSUE: WON the rescission of the MoA between the parties is proper.R. thus rescinded. then. .171298.

180144. Thus. The conversion from partnership to corporation. his brother. In the case. likewise. G.” for the amount of ₱150. HELD: No.R. G. Eventually. through PDIC and 2) AFPMBAI. BERNARDEZ. REPRESENTED BY ITS GENERAL MANAGER. ISSUE: WON there is novation by virtue of the consolidation of the three (3) loans into a single Promissory Note. HON. RRI LENDING CORPORATION. Julieta Bognot. LEONARDO BOGNOT vs. the loan was renewed several times on a monthly basis by the siblings until Rolando’s wife. Brion FACTS: Leonardo Bognot executed a promissory note in favor of RRI Lending Corporation. 1995 FACTS:There are three (3) Real Estate Mortgages (REMs) over a single property between AJAX Marketing & Development Corporation and Metropolitan Bank & Trust Co.00. In addition.000. renewed the said loan and got the loan documents for the Bognot siblings’ signatures but she never returned them.000. And third was during its incorporation as “AJAX Marketing & Development Corporation” for the amount of ₱600. for the debtor to be released in such case. neither objective nor subjective novation took place. novation is never presumed.00. Clearly. 2014. secured by a post-dated check. Despite . he must deposit it to the proper judicial court even without prior tender of payment pursuant to Article 1256 (2). the annotations in the mortgaged property remained uncancelled.00. DARIO J. who was currently in the possession of the loan records and title and make demands. as a comaker. for the amount of ₱250. The second was when it changed its name to “AJAX Marketing Co. 118585 September 14. September 24. No. the creditor is unknown as there are two (2) entities which claim the same right to collect 1) Rural Bank. Subsequently. J. First loan was under the name “YlangYlang Merchandising Company”.2. AJAX MARKETING vs. the AJAX Marketing executed a Promissory Note to restructure and consolidate the 3 loans. the bank foreclosed the mortgaged property. Yes.00. it must be imperative that the new obligation expressly declare that the old obligation is thereby extinguished or that the original debtor/s is/are released. for a loan they obtained in the amount of ₱500. NO. there is nothing mentioned about the intention of the parties to novate the three (3) loans nor their extinguishment. did not expressly release the old debtor/s. in the case. with Rolando Bognot. Later on.R. To effect either objective/subjective novation.000. a partnership. COURT OF APPEALS.000.

vs INSURANCE COMPANY OF NORTH AMERICA. a substitution since she merely renewed the original loan by executing a new promissory note and check. pleaded that he had paid the loan but failed to prove it. INC.00. in effect. The renewal of the loan made by Mrs. June 8. FRANCIA vs. Gaisanao Cagayan. the loan was left unpaid. IAC. (LSPI) separately obtained their insurance policies from Insurance Company of North America (ICNA) for their book debt endorsements for products sold to customers which are unpaid 45 days after the time of the loss.00 deposited in Philippine National Bank (PNB) but was never withdrawn. GAISANO CAGAYAN. a portion of which was expropriated by the government for ₱4. subsequently.repeated demands. G. ISSUE: WON the Bognot siblings’ obligation was extinguished by novation through substitution of debtors? HELD: No. Gaisano Cagayan Inc. is liable even if the goods were lost through fortuitous event. the loss or destruction of anything of the same kind does not extinguish the obligation (genus nunquam perit). ISSUE:WON Gaisano Cagayan Inc. Francia failed to pay his real estate taxes amounting to ₱2. Bognot is not. 1988 FACTS: Engracio Francia owned a house and lot located in Pasay City.R. NO.400. ISSUE: WON the expropriation payment may compensate for the real estate taxes due. Inc. G. Nevertheless. . can be held liable despite the occurrence of fortuitous event. Inc. the respondent never agreed to the substitution which is essential to validly substitute the old debtor. 2006 FACTS: Intercapitol Marketing Corporation (IMC) and Levi Strauss Phils. hence. thus. included in the stocks lost when its store was consumed by fire.116. the original debtor must be expressly released from the obligation and the new debtor assumes his place. L-67649 June 28. The obligation of Gaisano is pecuniary in nature and money is generally considered as a generic thing. The petitioner.R. bought ready-made clothing products from IMC and LSPI which were. Article 1263 of the Civil Code states that in an obligation to deliver a generic thing. there is no novation to talk about since to legally effect a novation. HELD: Yes. its liability to pay the price of the goods purchased was not extinguished. his remaining property was auctioned. then. 147839. NO.

Moreover. whether express or implied. 1995 FACTS: A court judgment was held in favor of petitioner. HELD: No. ISSUE: WON the contract between Multinational Food and Iolani Dionisio is rescissible. an "accion pauliana". thus. . NO. thus. Under Article 1389 of the Civil Code. viewed as made to defraud the creditors. Air France issued an alias writ of execution and further alleged that the private respondent spouses sold a property to a certain Iolani Dionisio registered in the name of Multinational Food and Catering Corporation where the private respondent spouses were said to own 91% of its share. must be commenced within four years. the action to rescind contracts made in favor of creditors. who were held jointly and severally liable. HONORABLE COURT OF APPEALS. He would have withdrawn the expropriation payment to pay the real estate taxes due to avoid the auction. G.R. Air France against Multinational Travel Corporation of the Philippines. the expropriation payment cannot be compensated with the real estate taxes due because the Government and the taxpayer are not mutually creditors and debtors of each other pursuant to Article 1278 of the Civil Code. the contract cannot be determined as rescissible in the present case instead an independent action is necessary to prove that the contract is rescissible. judgment was unsatisfied. AIR FRANCE vs. the taxes assessed were derived from law while the money judgment against the government is an obligation arising from a contract. Fiorello Panopio and Vicky Panopio. The rights and defenses which the parties in a rescissible contract may raise or set up cannot be properly discussed in a motion but only in a full trial. the private respondents. However. 104234 June 30. There can never be an offsetting of taxes against the claims that the taxpayer may have against the government.HELD: No.