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DRAFT*

Western Mindanao State University


College of Law

Obligations and Contracts


Edilwasif T. Baddiri
Second Semester, 2014-2015

Atty.
Saturday

COURSE SYLLABUS1
I. Obligations
1. General Provisions on Obligations (Art. 1156)
1.1 Definition of Obligation
1.2 Elements
1.3 Sources of obligations
(a) Law
(b) Contract
(c) Acts or omissions punishable by law
(d) Quasi-contract
(e) Quasi-delict
2. Nature and Effect of Obligations (Art. 1163)
2.1 Prestations/Objects
2.2 Things required to be delivered
2.3 Accessory obligations
2.4 Compliance with obligations
2.5 Breach of obligations
(a) Delay
(b) Fraud
(c) Negligence
2.6 Fortuitous event
2.7 Remedies
Cases:
Arts. 1156-1170
Ayala Life v. Ray Burton, 479 SCRA 462
1

This syllabus is culled from the OBLICON syllabi of the Marketing and Law Department of ADMU and
Atty J.P. San Pedro.

Cannu v. Galang, 26 March 2005


Lalicon v. NHA, 13 July 2011
Cathay Pacific v. Vazquez, 14 March 2003
Art. 1169
Pantaleon v. American Express, 25 August 2010
Barzaga v. CA, 268 SCRA 105 (1997)
Lorenzo Shipping Corp. v. BJ Marthel, 19 November 2004
Almocera v. Ong, 18 February 2008
Megaworld v. Tanseco, 9 October 2009
Solar Harvest v. Davao Corrugated, 26 July 2010
CB v. CA, 139 SCRA 46 (1985)
Arts. 1171-1173
Saludaga v. FEU, 30 April 2008
Meralco v. Ramoy, 4 March 2008
Art. 1174
Tanguilig v. CA, 266 SCRA 78 (1997)
Juan F. Nakpil & Sons v. CA 144 SCRA 596 (1986)
Ace Agro v. CA, 266 SCRA 429
Mondragon Leisure v. CA, 15 June 2005
3. Classification of Obligations
3.1 Pure and Conditional (Art. 1179)
a. Pure obligations
b. Conditional obligations
(i) Suspensive v. resolutory conditions
(ii) Potestative, casual and mixed conditions
(iii) Impossible conditions
c. Effects of conditions
d. Constructive fulfilment of suspensive condition
e. Retroactive effects of fulfillment of suspensive condition
f. Rights of creditor pending fulfillment of suspensive condition
g. Loss, improvement, deterioration of thing to be delivered pending
the fulfillment of suspensive condition/resolutory condition
h. Unilateral/reciprocal obligations
i. Effect of mutual breach
Arts. 1179 and 1181
De Leon v. Ong, 2 February 2010
Reyes v. Tuparan, 1 June 2011
Great Asian v. CA, GR No. 105774, 25 April 2002
Ducusin v. CA, 122 SCRA 280 (1983)

Art. 1180
Millare v. Hernando, 151 SCRA 484 (1987)
Art. 1182
SBTC v. CA, 249 SCRA 206 (1995)
Rustan Pulp v. IAC, 214 SCRA 665 (1992)
Arts. 1190-1192
UP v. De Los Angeles 35 SCRA 102 (1970)
Tan v. CA 175 SCRA 656 (1989)
Co v. CA, 312 SCRA 528(1999)
Palay v. Clave, 21 September 1983
Cannu v. Galang, 26 March 2005
Suria v. IAC, 151 SCRA 661 (1987)
Reyes v. Tuparan, 1 June 2011
Chua v. Victorio, 18 May 2004
Uy v. CA, 314 SCRA 69 [1999]
Pryce corp v. PGCOR, 6 May 2005
Solid Homes v. Tan, 29 July 2005
3.2 Obligations with a Period (Art. 1193)
a. Suspensive period v. resolutory period
b. Effects of a period
c. When courts may fix a period
d. Benefit or use of the period
Arts. 1193-1197
Roxas v. Alcantara, 113 SCRA 21 (1982)
Macasaet v. macasaet, 30 September 2004
3.3 Alternative Obligations and Facultative Obligations (Art. 1199)
a. Alternative v. facultative obligations
b. Alternative prestations at debtor's choice
c. Alternative prestations at creditor's choice
d. Facultative obligations
3.4 Joint and Solidary Obligations (Art. 1207)
a. Joint obligation - presumed
b. Solidary obligation
(i)
Active solidarity
(ii) Passivesolidarity
c. Indivisibility does not give rise to solidarity or vice-versa

d. Solidarity with different terms and conditions


e. Prohibited acts
f. Demand by any of the solidary creditors
g. Effect of novation, compensation, confusion or remission
h. Payment by a solidary co-debtor
Arts. 1207-1222
Marsman v. Philippine Geoanalytics, 29 June 2010
Gonzales v. PCIB, 23 February 2011
PNB v. Independent Planters, 122 SCRA 113 (1983)
Rubio v. CA 153 SCRA 183 (1983)
3.5 Divisible and Indivisible Obligations (Art. 1223)
a. Divisible obligation
b. Kinds of division
c. Obligations deemed divisible
d. Indivisible obligation
e. Kinds of indivisibility
f. Effect of non-compliance by a co-debtor in a joint indivisible
obligation
g. Obligations deemed indivisible
3.6 Obligations with a Penal Clause (Art. 1226)
a. Nature, purpose and kinds of penal clause
b. Effects
c. Proof of actual damages not necessary
d. Reduction of penalty
e. Effect of nullity of penal clause
f. Effect of nullity of principal obligation on penal clause
ARTS. 1226-1230
Filinvest v. CA, 30 September 2005
4.

Extinguishment of Obligations (Art. 1231)

4.1 Payment or performance


a. What constitutes payment
b. Payor
c. Payee
d. Manner/mode of payment
e. Special forms of payment
Payment by cession
Tender of payment and consignation

f. Application of payment
g. Currency
h. Place of payment
i. Expenses/costs in payment
Arts. 1231-1233, 1246-1248, and 1251
Hahn v. CA, 173 SCRA 675 (1989)
ARTS. 1234-1235
Azcona v. Jamandre 151 SCRA 317 (1987)
Intestate Estate of Probitero v. CA, 217 SCRA 372 (19993)
Arts. 1236-1243
Aranas v. Tutaan, 127 SCRA 828 (1984)
Art. 1249
New Pacific v. Seneris, 101 SCRA 686 (1980)
Tibajiya v. CA, 223 scra (1993)
R.A No. 7653, Sec.60
BSP Circular No.537 dated 18 July 2006
Art. 1250
Huibonhoa v. CA, 320 SCRA 625
Telengtan v. United states Lines, Inc., 483 SCRA 458 (2006)
Art. 1245
Luzon Development v. Enriquez, 12 January 2011
Arts. 1256-1261
FEBTC v. Diaz Reality, 23 August 2001
State Investment House, Inc. v. CA 198 SCRA 390 (1991)
Valarao v. CA, 304 SCRA 155
McLaughlin v. CA, 144 SCRA 693 (1986)
Legaspi v. CA, 142 SCRA 82 (1986)
Vda. De Zulueta v. Octavio 121 SCRA 314 (1983)
Hulganza v. CA, 147 SCRA 77 (1987)
Heirs of Luis Bacus v. CA, 3 December 2001
Dalton v. FGR Reality, 19 January 2011
4.2 Loss of Determinate Thing Due (Art. 1262)
a. Effect of loss of a determinate thing/impossibility of performance
b. Exceptions
c. Partial loss of thing
d. Difficulty of service to be rendered

e. Remedy of creditor against third parties


Arts.1262-1269
Naga Telephone v. CA, 24 February 1994
PNCC v. CA, 272 SCRA 183 (1997)
4.3 Condonation or Remission (Art. 1270)
a. Concept and nature of condonation/remission
b. Implied condonation
c. Effect of renunciation of principal debt
d. Presumed remission of pledge
4.4 Confusion or Merger of Rights (Art. 1275)
a. Concept
b. Effect on guarantors
c. As applied to joint obligations, solidary obligations and indivisible
obligations
4.5 Compensation (Art. 1278)
a. Concept
b. Kinds
(i) Voluntary
(ii) Judicial
(iii) Legal
c. Obligations which cannot be subject of compensation
d. Effects
e. Effect of assignment of credit
Arts. 1278-1290
PNB v. De Ong A cero,148 SCRA 166 (1987)
Francia v. IAC, 753 (1988)
EGV Reality v. CA, 310 SCRA 657 (1999)
Uy Tong v. Silva, 132 SCRA 448 (1984)
BPI v. CA,232 SCRA 302 (1994)
Perez v. CA, 127 SCRA 636
4.6 Novation (Art. 1291)
a. Concept, requisites and kinds
b. Modes
(i) Substitution of debtor
(ii) Change of principal obligation or object
(iii) Subrogation

(aa) Conventional subrogation


(bb) Legal subrogation
c. Effects
Art. 1291-1304
Goni v. CA, 144 SCRA 222 (1986)
Kwong v. Gargantos, 22 November 2006
Salazar v. JY Brothers, 20 October 2010
Espina v. CA, 334 SCRA 186
Peoples Bank v. Syvels Inc., 164 SCRA 247 (1988)
Servicewide Specialists, Inc. v. IAC, 174 SCRA 80 (1989)
Integrated Construction v. Relova, 151 SCRA 360 (1987)
Lecaros v. Gatmaitan, 9 August 2001

II. Contracts
1. Concept (Art. 1305)
2. General principles or tenets
2.1 Autonomy
2.2 Consensuality
2.3 Mutuality
2.4 Binding effect
2.5 Relativity
Arts. 1305-1317
DOH v. HTMC, 480 SCRA 299
GF Equity v. Valenzona, 30 June 2005
PNB v. Rocamora, 18 September 2009
Solidbank v. Permanent Homes, 23 July 2010
Leal v. IAC, 155 SCRA 394 (1987)
Tiu v. Platinum Plans, 28 February 2007
National Power Corp. v. Province of Quezon, 15 july 2010
Tayag v. Lacson, 25 March 2004
GilChrist v. Cuddy, 18 February 1915
So Ping Bun v. CA,21 September 1999
Lagon v. CA, 18 March 2005
Limitless v. Quilala, 15 July 2005
3. Stages
4. Elements (Art. 1318)
4.1 Consent
a. Offer

b. Acceptance
c. Parties
d. Effect of lack of capacity or authority and disqualification
e. Vices of consent
(i) Mistake
(ii) Violence and intimidation
(iii) Undue influence
(iv) Fraud
Arts 1318-1324
Pelayo v. Perez, 8 June 2005
Villanueva v. CA, 244 SCRA 395 (1995)
Obana v. CA, 135 SCRA 557 (1985)
PNB v. CA, 238 SCRA 20 (1994)
Adelfa Properties, Inc. v. CA, 240 SCRA 565 (1995)
Serra v. CA, 229 SCRA 60 (1994)
Ang Yu v. CA., 238 SCRA 602 (1994)
Equatorial v. Mayfair, 21 November 1996
Bible Baptist v. ca, 26 November 2004
Arts. 1325-1326
Public Estates v. Bolinao, 5 October 2005
f. Simulation of contracts
Arts. 1327-1344
Cayabyab v. IAC,232 SCRA (1994)
Yason v. Arciaga, 28 January 2005
Dela Cruz v. Sison, 17 February 2005
Paragas v. Heirs of Balacano, 31 August 2005
DBP v. CA, 30 June 2006
4.2 Object (Art. 1347)
a. Requisites
b. Matters which cannot be object of contract
Arts. 1345-1346
Manila Bank v. Silverio, 11 August 2005
Heirs of Balite v. Lim, 10 December 2004
Cruz v. Bancom Finance, 19 March 2002
4.3 Cause (Art. 1350)
a. Concept
b. Distinguished from motives
c. Absence/unlawful cause

d. Statement of false cause


e. Inadequacy of cause
Arts. 1350-1355
E. Razon v. Philippine Ports, 151 SCRA 233 (1987)
Uy v. CA, 314 SCRA 69 (1999)
Arts. 1356-1359
Clarin v. Rulona, 127 SCRA 512 (1984)
5.

Form of Contracts (Art. 1356)

6.

Reformation of Instruments (Art. 1359)

Arts. 1359-1369
NIA v. Gamit, 215 SCRA 436 (1992)
Huibonhoa v. CA 320 SCRA 625
Naga Telephone v. CA, 230 SCRA 315
7.

Interpretation of Contracts (Art. 1370)

Arts. 1370-1379
Rules of Court, Rule 130, Secs. 10-19
Arts. 1380-1389
Uy Tong v. Silva, 132 SCRA 449 (1984)
Union Bank v. Ong, 21 June 2006
Manila Bank v. Silverios, 11 August 2005
8.

Defective Contracts (Art. 1380)

8.1 Rescissible Contracts


a. Rescissible contracts
b. Rescission
(i) Nature
(ii) Extent permitted
c. Fraudulent transactions
Arts. 1380-1389
Uy Tong v. Silva, 132 SCRA 449 (1984)
Union Bank v. Ong, 21 June 2006
Manila Bank v. Silverios, 11 August 2005
8.2 Voidable Contracts (Art. 1390)
a. Voidable contracts
b. Action for annulment
c. Ratification
d. Effect of loss of thing

(i) Loss after decree of annulment


(ii) Loss before action to annul
Arts. 1390-1402
Alcasid v. CA, 7 October 1994
Theis v. CA, 7 October 1994
8.3 Unenforceable Contracts
a. Unenforceable contracts (Art. 1403)
b. Effect of ratification
c. Who may raise defect
Arts. 1403-1408
Alcantara v. Nido, 19 April 2010
Orduna v. Fuetebella, 29 June 2010
Torcuator v. Bernabe, 8 June 2005
Rosencor v. Inquing, 8 M arch 2001
8.4 Void or Inexistent Contracts (Art. 1409)
a. Void/inexistent contracts
b. Effects
Arts. 1409-1422
Menchaves v. Teves, 26 January 2005
Arts. 1440-1457
Lopez v. CA, 16 December 2008
Tala Reality v. CA, 7 aPRIL 2009
Ringor v. Ringor, 13 August 2004
Oco v. Limbaring, 481 SCRA 384
Aznar Brothers v. Aying, 16 May 2005
Manila Bank v. Teodoro, 13 January 1989
Arts. 1106-1155
Tan v. Ramirez, 3 August 2010