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Duman, Paulyn \ Oblicon \ I-E \ Prof.

Morales \ Page 1
OB LI CON Held: No. Husband liable. Art. 142 and 143 or
Family Code. Rendering medical assistance, Issue: WON P is liable to owner.
Case Ticklers
mutual oblig. Oblig not presumed. Those
I. DEFINITION AND CONCEPT expressly determined in the Code or in special Held: Yes. Owner has no privy or contract with D
laws are the only demandable ones. only with P. Owner can demand from P and P can
A. Definition Source: Laws. Family Code. demand from D liabilities.
Art. 115 in relation to Art. 2236
Leung Ben vs. O’Brien - Gambling Source: Contract.
B. Distinguished from natural obligation
Art. 1156 in relation to 1423 O’ Brien filed an action in the court of CFGI of Pichel vs Alonzo – coconut fruits.
Manila to recover from Leung Ben the sum of
C. Elements P15,000 alleged to have been lost by O’Brien to Board of Liquidators filed annulment of Deed of
Leung Ben in a series of gambling, banking and Sale of Alonzo to Pichel. Accdg to the law which
D. Sources of Obligation percentage games: awarded the land to Alonzo, RA 477, the land
cannot be encumbered to anybody. Alonzo sold
Sagrada Orden Vs Nacoco –Kinuha ng Hapon Issue: WON O’Brien can recover the money from the coconut fruits of the coconut land.
ang lupa. Leung Ben.
Issue: WON there was a violation of the law
Action to recover parcel of land owned by P, and Held: Yes. Upon general principles, recognized which gave the land to Alonzo.
then because of Japanese war was acquired by both in the civil and common law, money lost in
other parties, then possessed by the US govt thru gambling and voluntary paid by the loser to the Held. No. It was not the land that was
its custodian then possessed by the defendant winner cannot, in the absence of statute, be encumbered but the coconut fruits. Possession of
without agreement with the US or with the recovered in a civil action. But Act. No. 1757 of the coconut trees cannot be said to be the
plaintiff, and def then leased a part of the land. the Phil. Comm, which defines and penalized possession and enjoyment of the land itself.
different forms of gambling contains numerous Accessory vs. Principal=transfer of accessory not
Issue: WON defendant is liable to Sagrada and provisions recognizing the right to recover money transfer of principal. Accessory follows principal
must pay the rentals. lost in gambling. It must therefore be assumed and not the other way around. Law does not
that the action of plaintiff was based upon the prohibit the disposition of industrial or natural
Held: No. If liable at all must arise from any of right to recovery given by section 7 of said Act, fruits.
the four sources of obligations. APA was a trustee which declares that an action may be brought
of the US and if def liable, not to plaintiff but to against the banker by any person losing money at Source: Law
US govt. But defendant not liable for rentals bec a banking or percentage game.
no express agreement bet the APA and Nacoco. **What are the essential elements of a contract
Existence of implied agreement is contrary to Source: Law. Phil Comm and Civil Code. to make it valid?
the circumstances.
People’s Car Inc. vs. Commando Security Del Rio vs. Palanca – Hindi naman ikaw ang
Source: Contract. But there was none. Service Agency. –Sekyu nangarap magdrive ng tatay, bakit ka nagbibigay.
kotseng hindi kanya, naaksidente.
Pelayo vs. Lauron –husband vs. in-laws Del Rio wanted to recover money which he
P and D entered into a contract where D was furnished to the family of defendant for the
1906-Pelayo complained against Lauron and hired to render security services to P and support and subsistence of the def’s 5 children.
Abella. Pelayo a doctor, rendered service to safeguard and protect business premise. One of
daughter-in-law then demanded P500 from def. the guards of D took one of the cars under Issue: WON P can recover money.
custody of P and drove it and lost control. The
Issue: WON Lauron is liable. owner demands damages from P but P claims D Held: No. There are qualifications: a) support
should be liable, solely. given to dependent of one who is bound to give
Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 2
support but fails to do so b) support supplied by offended party not allowed to recover damages Issue: a. WON Planters and Victorias should be
a stranger c) support was given without the on both scores. severally liable
knowledge of the person charged with the duty. b. WON agreement bet Planters and Victorias
3rd req lacking. Def knew about support and even Source: Quasi-Delict, Law. were permissible under RA 809
disagrees with it.
Source: Law. Article 1894 of CC which gives ** Distinguish civil liability arising from crime and Held: a. NO. Legal basis is that arising from law
qualifications. that from quasi-delict. which does not impose upon Centrals any
liability, whether expressly or impliedly, any
People vs. Ritter –Rape! Federation of Free Farmers vs. CA—Palay joint and several liability. No contract bet sugar
Increase mill and the laborers. Principal liability on
Rape of a 12-yr-old girl allegedly by Appellant Planters and secondarily on Dept or Labor.
who inserted a foreign into her vagina causing There are 4 parties in this case: a. FFF (union
her death. Criminal case and civil case was filed representing the farmers) b. Planters (the group b. YES. RA 809 applicable only in the absence of
against the defendant. which harvests the lands where the farmers a written milling agreement or in the absence of
work) c. Santos and Tikol (individual planters) d. any stipulation on the benefits which the
Issue: WON def liable on both cases. Central or Victorias (milling corp, Planters bring laborers are entitled.
their harvest here to be milled).
Held: No. Only with regard to the civil case. Source: Law and Contract
Crim case requires evidence beyond reasonable The law, Sugar Act of 1952 - RA 809 stipulates
doubt. While civil cases require only that any increase in the share of proceeds of **Brinas vs. People –Maling Sigaw ng Konduktor
preponderance of evidence. milled sugarcane and derivatives obtained by
planters from the Central, 60% of said increase Brinas convicted for double homicide thru
Source: Criminal offenses. Acts or omission should be paid by planters to their respective reckless imprudence but acquitted Bunecamino
punished by the law. laborers. (asst conductor) and Millan (engineman), Brinas
was the conductor. Brinas told the passengers
**Institution of Civil Case while pending criminal 1. FFF alleged that they have not been paid that they are near the town but before the
case, is reservation to the right to file the from 1952-53 despite the 10% increase victims were able to alight, train already caught
former necessary or can file anytime within the and from 1953-1974 with the 4% up speed. During the pendency of the criminal
pendency of the criminal case? increase. CA ruled planters and Victorias action, the heirs of deceased filed separate civil
jointly and severally liable. FFF claimed action against Manila Railroad Company.
Andamo vs IAC – Water Overflow too that Planters and Victorias entered
into an agreement when they have no Issue: WON the civil action can be pursued on
P owner of parcel of land adjacent to the land of legal right bec the law has already the pendency of the civil action.
Missionaries of our Lady of Lasalletta. Latter provided the ratio of division.
constructed waterpaths and contrivances which 2. Victorias claimed that they should not be Held: Yes. Source of obligation is that of a culpa-
eroded petitioner’s land and damaged crops, held jointly and severally liable. The contractual and not an act or omission
plans. Criminal action was instituted and then action filed was not founded on torts but punishable by law. Two different sources of
filed a civil action. on either an obligation created by a oblig. Institution of criminal action on the case
contract or by law, and even if on torts, does not interrupt the separate civil action for
Issue: WON filing of the civil case was proper. the action has prescribed. They have damages based on quasi-delict for the same
paid the Planters so the Planters should accident. Reckless Imprudence vs. Quasi-Delict.
Held: Yes. Art. 2176, by fault or negligence. only be the one sued. Reckless imprudent—Principal, Art. 2176 person
Separate civil action lies against the offender in 3. Planters claim they have freedom to who caused the crime liable, Art. 2180 solidary
a criminal act whether or not he is criminally stipulate ration as they might agree. And liability of employer.
prosecuted and found guilty or not. Only that the that they have paid the laborers.
Source: Culpa-Contractual.
Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 3
**Tan vs. Nifatan –Isa-isa na silang namamatay, also be predicated on a source of oblig other day exclusive option to purchase the same
na-acquit pa. than delict. should the lessor decide to sell the leased
Source: Crimes or Delicts. Acts or omission. premises. But Carmelo wanted to sell the whole
Lim of a wealthy family was shot dead by the Tan property. He sold entire prop to Equatorial.
brothers. But the Tan brothers one by one died DBP vs CA –Restructuring of Debt Mayfair filed for annulment of sale bec of lack of
before the instant petition could be filed. The consideration. Mayfair claimed that he told
wife of Lim with the children instituted an action DBP granted PHUMACO and PHILICO an industrial Carmelo that it is willing to purchase the same
for damages against charged 10 years from the loan for P2.5M, 2M in bonds and 500k in cash. and that it has the right of first refusal.
happening of the crime. Tan’s filed motion to Promissory note executed and a mortgage over
dismiss because of acquittal. their present and future properties. DBP granted Issue: WON the sale can be nullified because of
another loan of 1.7M reflected in the amended Mayfair’s action
ISSUE: a. WON the action has prescribed. mortgage contract. After 7 yrs the outstanding
b. WON civil action would still prosper even balance was restructured bec Resp failed to pay. Held: The contract is deemed rescinded.
when the accused were acquitted. Resp still failed to pay under the restructured Rescission a relief allowed for protection of one
payment. DBP refinanced the matured obligation of the contracting parties and even 3rd persons
Held: a. No. Action for prescription for liabilities and granted 3 foreign currency denominated from injury or to protect some incompatible and
and charges of crimes is 20 years. loans. Apart from interest, there are additional preferred right by the contract. Mayfair has the
charges and penalties in case of default. After 10 opportunity to negotiate.
b. Yes. The reason for acquittal was not stated or years, DBP initiated for forclosure of mortgaged
explained and Art. 33 allows independent civil prop and the balance shoot up to P63M. Resp Determinate Thing: There is a problem because
action in case of physical injuries including claim that reason for non-payment is because determination cannot be made bec prop is
death. (ROC?). financial rehabilitation from a contract with the indivisible. You cannot pinpoint which is the 25%
military didn’t push thru. of the property. Determination of the exact
10 years prescription for actions when source is portion of the building.
created by law. 5 years when not fixed by the Issue: WON the resp can claim without fault in
Code or other laws. 20 years for crimes or delicts default of the non-happening of the contract De Leon vs. Soriano—bigyan ng palay si nanay.
as source of obligations. with the military.
Natural children of Soriano agreed that they are
Source: Delict or Crimes. Held: NO. DBP is no party to resp and AFP’s to deliver certain number of cavanes of palay
contract. Resp can claim from AFP but without each year to Soriano and shall only cease upon
prejudice to its contract with DBP. DBP has given death of mother. But deliveries were of 3,400
People vs Abungan – namatay yung kriminal Resp all the possible options for payment. cavanes and children claimed that due to Huk
troubles in Central Luzon.
Abungan convicted of murder sentenced to RP Source: Contract
and ordered to pay indemnity of P50,000. Issue: WON inability to deliver was permissible
Abungan died. II. NATURE AND EFFECTS OF OBLIGATION due to force majeure

Issue: WON death of Abungan extinguishes his A. Obligation to give Held: No. The object to be delivered was generic
criminal and civil liability and set no bounds or limits to the palay to be
1. Determinate Thing paid. Any palay of the same quality can replace.
Held: Yes. Extinguised based on delicts. Art. Impossibility must consist in the nature of the
89(1) of RPC, death of convict occurs before Equatorial vs. Mayfair—Right of First Refusal thing to be done and not the inability of the
final judgment, extinguished. But only criminal party to do it.
liability is extinguished and also the civil liability Carmelo owned a parcel of land with 2-storey
directly arising from and based solely on offense. building and leased said portions to Mayfair. On
Claim for Civil liability survives if the same may their contract, stipulation that Mayfair has 30-
Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 4
Norkis vs. CA—Ako ang bumili ng motor iba ang sufficient certainty. Court held that it is capable CO vs. CA—pinagawa kong kotse, na-carnap.
gumamit. of being determined w/o need for new contract
and the receipts showed that payment was to Pet entrusted his car to Resp to make same job
Nepales bought a motorcycle from Norkis and the lot adjoining the prev paid lot on three sides repair services and supply of parts which was to
issued a chattel mortgage in favor of DBP. thereof. The land is determinate or be returned after 3 days as per the contract. Pet
Invoice was issued and motorcycle was determinable. Ownership transferred by paid in full. After 3 days the vehicle can’t still be
registered by Norkis evidenced by receipts of constructive delivery which is the execution of released due to failed battery so pet bought
registration. Motor was delivered to a certain public document. battery. When Pet was about to get it, resp said
Julian Nepales and an accident happened while the car was carnapped while being road-tested.
being driven by a certain Payba. Norkis claims it Determinate Thing: The lot. Resp claims force majeure.
cannot be held liable since ownership was
already transferred to Nepales evidenced by the 2. Generic Thing Issue: WON Resp will be liable for the
receipts and the invoice. carnapping.
Norkis vs. CA
Issue: WON ownership was transferred to Held: Yes. It was due to negligence premised on
Nepales. Generic thing: motorcycle delay which is the basis of the complaint.
Carnapping cannot be considered as fortuitous. It
Held: No. No actually delivery nor constructive PLDT vs. Jeturian—Pension bago gera. must be proved and established that it is an act
one. The receipts of reg fees and the invoice is of God. No other evidence but the police report.
nothing but a detailed statement of the nature PLDT adopted in 1923 a Plan for Emloyees Even when Pet agreed to resked repair, can’t be
and quantity sold and not a bill of sale. Intent Pension. In 1945 the BOD adopted a resolution taken as waiver bec he really has no other
considered. Intent was not to transfer ownership discontinuing the pension plan. Hence this action choice but to leave it since he can’t have it run.
but to facilitate execution of chattel mortgage. of Resp.
3. Effect of Loss
Determinate Thing: The motorcycle was a Issue: WON the pre-war employees are entitled
generic thing. (?) to the pension. Bunge vs. Camenforte—Copra ko sa’yo binenta
Heirs of Juan San Andres vs. Rodriguez—Binili Held: Yes. But with the exception of those who
ko na ang nakapaligid na lupa. died or left before the outbreak of the war. The Plaintiffs filed to recover certain damages from
pension plan was not a gratuity but an the def bec of the latter’s failure to deliver Phil
JSA sold 345 sqm lot to Rodriguez. There was a inducement for employees to continue copra they agreed to deliver. A contract was
deed of sale. JSA died and Rodriguez appointed indefinitely in service. The plan ripened into a entered into where the VPC sold 500 tons of Phil
administrator. The heirs engaged services of a binding contract upon its implied acceptance of Copra to BC. The vendor would ship the copra to
geodetic engg and found out that resp has the employees. Acceptance is inferred from their USA but even with demands, failed to do so. The
encroached the lot by 509 sqm. They sent letter entering the employ of the company and staying vendee however believed in good faith that it
to vacate. Resp claimed they bought the said after the plan was made known. PLDT argues shall be delivered so it sold the expected copra
portion of the lot the ff day when they first that it can only be held liable under the to EDOW. Bec vendor failed, vendee suffered
bought the 345 sqm lot. Proof of sale was conditions expressly set in the pension plan. But damages. VPC denies contract and said that
attached and that payable in 5 years. Resp the Court held that the Company that violated Vicente, the manager who contracted had no
deposited the balance in court. the contract with its employees, by authority to do so. Force majeure is also claimed
discontinuing the plan without their consent, is since a storm destroyed the bodega.
Issue: WON there was a contract of sale. not in the position to insist upon the terms of
the very contract they have breached. Issue: WON VPC is held liable.
Held: Yes. There was a contract of sale which
transferred the ownership to resp. Pet claimed Held: Yes. Subject matter is Phil Copra, does not
that the object cannot be determined with refer to any particular or specific copra. Since
Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 5
generic, obligation can’t be deemed Hahn vs. CA—I want these diamond rings. Oceana vs Jabson—subdivision kontrata, maling
extinguished by the destruction/disappearance. akala.
Obligation subsists as long as commodity is Santos received 2 diamond rings with a total
available. Pet can also sell the copra which they amount of 47K. She issued separate receipts To do: To give 40% of the cash receipts from sale
expect to acquire in the future for purposes of therefore in which she acknowledged that they of subdivision lots.
speculation. have been delivered by Letty Hahn for sale on
commission and that they would be returned **Woodhouse vs. Halili—Mission Softdrinks
Effect: Subsistence of obligation since generic upon demand if unsold. The rings were not sold
object. nor returned after demand. Thus this action. P and D entered into an agreement that they will
form a partnership for the bottling and
Ocena vs. Jabson—subdivision na kontrata, Issue: WON the contract was of sale or agency. distribution of Mission softdrinks, P as manager
maling akala. and D as capitalist. When the bottling plant was
Held: Of agency. There is no evidence that would in operation P wants to execute the partnership
Resp filed a complaint for modification of the tell that is was of sale. Their contract’s papers but D refuses. D claims that he was made
terms and conditions of its subdivision contract stipulation does not show it was of sale. to believe that P has the exclusive ownership of
with petitioners. Allegations are that price in oil Although resp was willing to give a different the bottling franchise.
and derivatives have increased, not within the object, the debtor cannot compel the creditor to
control of the plaintiff. It will cause unjust receive a diff object. Issue: WON the misrepresentation of P can
enrichment to the pet. In the contract, the pet vitiate the contract.
are guaranteed as landowners and that they will To do: Deliver the rings, the specific rings.
receive 40% of all cash receipts from the sale of Held: No. Although P was guilty of
the subdivision lots. Resp hinged their argument Chavez vs. Gonzales—Dahil sa typewriter. misrepresentation, it was not the causal
on 1267 when the service has become so difficult consideration or the principal inducement that
beyond contemplation, release from obligation. P delivered to D a typewriter for D to repair. D led defendant to enter into the partnership. D
was not able to repair the typewriter and asked may not be compelled to carry out the
Issue: WON there is a sufficient cause of action for P6 for spare parts. P went to D and agreement which is to execute the partnership
for modification of the subdivision contract. demanded the typewriter which D gave in a papers. The defendant has obligation to do and
wrapped package. When P opened it at home, he not to give. The D reduced the percentage of P
Held: No. Cited article does not grant the courts saw that the typewriter had missing parts and from 30% to 15% bec of his misrepresentation.
this authority to remake, modify or revise the found it in shambles. P demanded missing parts,
contract. Their contract has a force of law and interior cover and P6. P brought it to a diff Obligation to do: Execute partnership contract.
should there be substitution or modification, it repair shop and spent P89.95. P filed for
should be amongst the parties themselves. A payment of P90 and damages. Ong vs. Bognalbal—She wants her Kenzo Tiles,
showing of mere inconvenience, unexpected now na.
impediments or increased expenses is not Issue: WON D is liable for damages.
enough. Equity cannot relieve from bad bargains Bognalbal was an architect hired by Ong who was
simply bec they are such. Held: Yes. 1167 states that when a person is a businesswoman to construct her boutique. Bog
obliged to do something and fails to do the agrees to furnish labor within 45 days and owner
Effect: The contract has the force of law. same, it shall be executed at his cost. What is to pay every 2 weeks based on the
poorly done be undone. D claims no period but accomplishment of work value. 4th billing came
Court held that fixing a period would only be a and Ong refused to pay but reason was not clear
mere formality and would serve no purpose than on the record. She wanted to change Vinyl tiles
to delay. Liable under 1170. to Kenzo flooring. Ong claimed Bog abandoned
B. Obligation to do To do: Specific performance – repair typewriter. Issue: WON Bog be liable for abandoning job.
Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 6
Held: No. He is not liable but is not justified for safety, aesthetic and decent living conditions Lopez vs. Tan Tioco—Ibenta mo ang asukal pag
doing so. 1191, it was a reciprocal obligation and and prevent overcrowding. Art. 1168, when ob sinabi kong ibenta mo.
there is power to rescind it in case one doesn’t consists in not doing, obligor does what was
comply with what is incumbent upon him. But forbidden, shall be undone at his expense. Lopez and Tan Tioco entered into a verbal
this article should be judicially invoked. contract that she’ll deliver certain sugar to Tan
Novation is not presumed. There must be an Not to do: Expand structures of house. Tioco which he obligated himself to store until
express stipulation. Novation a. change of obj or he receives instructions from her to sell them.
principal conditions, b. substituting person of D. Effect of Breach She delivered the piculs of sugar and instructed
debtor c. subrogating 3rd person in the rights of to sell in on Sept 1904 but def did not do so. Pet
creditor. Liability is on the first infractor, 1192. 1. Delay in Performance filed action. Def denies allegations.
There has been no contract novation that
required Bog to finish the Kenzo flooring before Villaruel vs. Manila Motors—Kasalanan ng Issue: WON the defendant was in default.
the 4th billing shall be paid. 1186. Condition shall lawyer, naningil ng renta nung may gera.
be deemed fulfilled when the obligor voluntarily Held: Yes. He was in default from the time the
prevents the fulfillment. Manila Motors and Villaruel entered into a Pet demanded to deliver or do something, or the
contract whereby the former agreed to convey fulfillment of the obligation. Neither the
To do: Pay 4th billing. (Reciprocal-di mo ginawa di by lease to the latter some premises. The term contract nor the law demands to make judicial
ko rin gagawin-pero sabi nga ng court hindi pa of lease is 5 years. The premises were invaded demand than extrajudicial. The price of the
rin yun justification, but only the first infractor by the Japanese and then the American occupied sugar should be from the time she instructed the
shall be liable). the same building. The occupants paid the same def to sell them.
rate as the defendants after which they have
vacated the premises. Def renewed contract for Delay in Performance: Delay in selling the sugar
C. Obligation not to do addtl 5 yrs. Pet, as per his lawyer’s advise, upon instructions.
demanded for rental from the Def for the period
Fajardo vs. Freedom to Build—Wag dagdagan when the Jap and the Americans occupied the Dela Rosa vs. BPI—Atat sa announcement ng
kung hindi bawasan! premises. The premises was set on fire and the winners ng design contest.
reason was unknown.
FTB, owner-developer and seller of low-cost BPI held this contest of designs and plans for the
housing, sold to petitioner-spouses a house and Issue: WON Pet has power to demand rentals and construction of a building. Prizes would be
lot. Restrictive covenant was contained in the recover the same due to default. awarded not later than Nov. 30, 1921. Plaintiff
contract, easement. No upward and front took part in the said contest and after the date
expansion which is contained in their Transfer Held: No. Art. 1554 of CC of Spain states the stipulated, the bank didn’t award prize nor
Certificate. Pet’s children are to wed so duties of a lessor. A. deliver to the lessee the made any announcement. Plaintiff filed.
extended their house thus contravening the subject matter b. make thereon, during the
terms of contract. Pet filed, demolish the unauth lease, all repairs necessary and maintain Issue: WON BPI was in default when it did not
structures. serviceable condition c. maintain lessee in release the announcement on the date
peaceful enjoyment of lease. 1560, lessor shall stipulated.
Issue: WON resp has the auth to ask for not be liable for any act of mere disturbance of
demolition since ownership already transferred 3rd person but lessee would have direct action Held: The bank cannot be held in default
to the prop owners or homeowners association. against trespassers. No lessee would agree to through the mere lapse of time. Plaintiff never
pay rent for premises he could not enjoy. demanded from bank and just filed the case in
Held: Yes. Restrictive covenant should still be Court. A binding obligation may originate from
followed. Although courts generally view Delay in performance: It was the creditor who advertisements addressed to the general public.
restrictive covenant with disfavor but sustain was in default or delay when it refused to get Demand will not be necessary only in certain
them if reasonable, not contrary to public policy, the payment given by the resp. conditions, but demand is indispensable as a
law etc. Intent of developer was to provide general rule. Plaintiff has no cause of action bec
Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 7
he alleges that the contest didn’t push thru but Def executed and delivered to the plaintiff a due to fortuitous event: 1. determinate thing (in
in consideration of the evidence, the materials promissory note payable in installments which the present case, pecuniary in nature) 2. No
are on their way to New York and were sent to a represents the balance of one white chasses stipulation holding him liable even in case of
technical committee. purchased by def from pet. The truck was fortuitous
delivered to the def. After the outbreak of war,
Delay: Bank was not in default. No demand. the truck was one of the trucks that were Delay: Non-payment of balance.
commandeered by the USAFEE. Neither the
Lizares vs. Hernaez—Camarin was burned and plaintiff not def filed an official claim from the
lessee won’t pay. US govt. Equatorial vs. Mayfair—right of first refusal

Lizares and Hernaez entered into a contract, the Issue: WON the commandeering of the truck Delay: ***By not giving to Mayfair the 30-day
former became the lessee of the two haciendas. exempts the def from payment of the obligation period of which it is entitled to exercise right of
Pet used one of the improvements there which represented by the prom note. first refusal upon communication of Carmelo
was a roofed camarin used in manufacture of that he would sell the property.
sugar. A fire occurred and destroyed the Held: No. There is no principle of law by which
camarin. Pet demanded from Def that he the obligation was extinguished. The interest Co vs. CA--carnap
reconstruct camarin. Def refused. Pet did not was not reduced due to suspension since the pet
pay the rentals bec of non-construction of the was generous enough to compute only from Delay: Delay in delivering the car to Co after
camarin. Def claims Pet should be liable for the 1948, the truck was commandeered in 1941. Def demand which is the premise of negligence of
fire since he is the lessee when the fire could have filed a claim from the US govt and he resp.
occurred. would have been paid but he failed to do so.
Aerospace vs. CA—Sulfuric Acid na ayaw pang
Issue: WON plaintiff has responsibility to the Delay: Non-payment of the prom note. kunin.
damages caused by fire.
Lawyers Coop Pub vs. Tabora—bumili ng law Pet purchased from resp Philphos 500 MT of
Held. No. And so is the def. Force Majeure. But books, nasunog. Sulfuric Acid. In their contract it was pet’s
the plaintiff is in default with regard to the non- responsibility to get the acid from resp. Philphos
payment of rentals due to non-construction of Tabora bought books from Pet and made partial demanded that pet get the acid and pet
camarin. Although there is presumption against payment. It was delivered to his law office. On chartered a vessel MT Sultan but the vessel was
lessee when loss in the leased prop occurs, proof the same date, a fire broke out in the office and not able to get the whole volume bec it tilted.
is necessary to prove he is not responsible. 1183. destroyed the building including the books. Def Resp sent a demand letter that the acid should
When a thing is lost while in the possession of doesn’t want to pay balance since the books be emptied or else petitioner will be liable for
the debtor, it is presumed that it loss occurred were loss due to force majeure and the the storage and other incremental expenses if
by his fault and not by fortuitous even in the ownership has not been transferred to him yet. pet fails to do so. Pet chartered MT Sultan again
absence of the contrary. but it tilted so never gotten the whole volume.
Issue: WON force majeure can be claimed by Chartered another vessel Don Victor and asked
Delay: Not in the Def for non-construction but in defendant from his non-fulfillment of obligation. Resp to deliver additional orders. Resp did not do
Plaintiff in non-payment of rentals. so unless the remaining acid be emptied and that
Held: No. Ownership was already transferred to pet pay the maintenance and storage. Pet filed
the buyer. Although there has been an and contended Resp is in default.
agreement that the ownership shall remain with
the seller until the price has been fully paid, it Issue: WON the Resp is in default.
Bachrach Motor vs. Lee Tay—Kinuha ng Kano was only for the security of payment but in the
ang truck niya, ayaw na niyang magbayad. very contract in was expressly agreed that the Held: No. The obligation to withdrew the 500MT
loss or damage after delivery to the buyer shall of H2SO4 before Aug. 1989 and the resp was
be borne by the buyer. Exemptions from liability already ready to deliver the same but it was
Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 8
Plaintiff’s fault for not chartering another vessel Delay: Non-payment of availement of Issue: a. WON agreement to construct windmill
which has the capacity to withdraw the volume. accommodation. included in the installation of a deep well.
It has the duty of emptying the acid. Pet claim b. WON the pet is under the obligation to
that it was due to a storm that’s why it can’t 2. Non-fulfillment reconstruct the windmill.
empty the storage but evidence proved that it
was of the incapability of the vessels. There was Chavez vs. Gonzales Held: a. No. It was not included in the
an obligation on the pet to empty the storage. agreement. Intention of the parties must be
They were the ones in delay. Non-fulfillment: The typewriter was not fixed. accorded primordial consideration and in case of
doubt, contemporaneous and subsequent acts
Delay: Pet for not emptying the storage. Telefast vs. Castro—dahil sa telegrama, mag-isa shall be principally considered.
lang nang ilibing ang mama. b. Yes. Pet claimed there is a strong wind but
Selegna vs. UCPB—credit facility which this is actually necessary for the windmill to
ballooned. Consolacion Bravo-Castro died in Pangasinan and turn. It was just newly constructed, it should
on the same day the daughter sent a telegram to have not collapsed.
Selegna, rep by spouses Edgardo and Zenaida the US to inform the other siblings and dad about
Angeles were granted a credit facility for P70M death of Mom. The Mom was interred by Non-fulfillment: Payment of last installment.
by UCPB. As a security, pet executed real estate daughter alone. When she came back to the
mortgages over several parcels of land. Pet also states, she found out that the telegram never Perez vs. CA—niloko yung businessman at
executed prom note every time they avail of reached her siblings. Telefast claimed force pinaalaga ang fishpond.
credit facility. In their credit agreement, it was majeure bec of technical and atmospheric
stipulated that failure to pay any availment of factors but no evidence to support. Juan Perez usufructuary of a parcel of land
the accommodation or interest or any sum due called Papaya Fishpond with other
shall constitute an event of default which shall Issue: WON force majeure applies. usufructuaries. The usufructuaries entered into a
allow resp bank to declare as immediate and contract leasing the fishpond to Luis Keh for a
payable all outstanding availments together with Held: No. No evidence to support. And even so, period of 5 years. The contract states that the
accrued interest. Pet increased credit facility def should have informed the plaintiff that it lessee cannot sublease the fishpond nor assign
and they agreed to 21.75% interest per annum. cannot transmit the telegram. 1170 and 2176, his rights to anyone. But Crisostomo was
Demand letters were sent upon failure to pay. guilty of fraud, negligence or delay. 2217 for persuaded by the pet Keh to take over the
Pet paid 10M as partial payment of accrued moral damages. Papaya fishpond bec Cris is a businessman.
interest. UCPB applied for extra-judicial Executed a written agreement. Cris even paid
foreclosure of petitioners mortgaged properties. Non-fulfillment: Sending of telegram. the rentals until 1985, 10 years of taking care of
The obligation has ballooned to 132M and pet the fishpond. In 1979 however, pet with armed
alleged that 10M as payment had the effect of Tanguiling vs. CA—windmill na nasira sa wind. men went to fishpond and showed that Keh
updating and thereby averting the maturity of surrendered the fishpond to the usufructuaries.
the obligation. A case involving proper interpretation of
contract. JMI Engr and GM proposed to resp Issue: WON the resp is a sublessee of Keh which
Issue: WON the Pet were in default. Vicente to construct windmilling system for him. is barred by the lease contract.
They agreed on the construction for P60K. P30K
Held: Yes. The contract is the law and the resp is DP and P15K installment. Vincente didn’t pay the Held: Yes. He was a sublessee. But Perez and his
justified in invoking the acceleration clause remaining P15K bec he paid it to SPGMI who counsel knew and acquiesced to that
declaring the entire oblig due and payable. The constructed the deep well to which the windmill arrangement by their act of receiving from the
resp had the right to foreclose the mortgages would be attached. And even assuming that he resp rentals evidenced by the receipts which
extra-judicially. Failure to furnish a detailed owes pet P15K, it should have been offset by the puts the pet in estoppel—which arises when one
statement of account doesn’t ipso facto result in collapse after a strong wind. by his acts and representations and admission or
unliquidated obligation. Pet was in default. by his own silence when he is obliged to speak
out, intentionally or thru culpable negligence
Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 9
induces another to believe certain facts to exist Necessito vs. Paras—Knuckles killed the
and such other rightfully relies and acts on such Fraud: There is no fraud because Kalaw didn’t passengers.
beliefs so that he will be prejudiced if the need the Board’s approval due to practice of
former is permitted to deny the existence of trade. No negligence too on his part. Action against owners and operators of the
such facts. 1168: Oblig is in not doing and obligor commom carrier known as the Phil Rabbit Bus
has done what is forbidden, shall be done at his ICB vs. Gueco—Joint Motion to Dismiss for the Lines filed by one passenger and the heirs of
expense. car. another who were injured as a result of the fall
into a river in which they were riding. The
Non-fulfillment: of the obligation not to do Gueco spouses obtained a loan from UPC to mother of the pet drowned and the son
which is to sublease the fishpond. purchase car and executed prom note which Necessito was injured.
were payable in mnthly installments and chattel
3. Fraud mortgage over car to serve as security over the Issue: WON the carrier is liable for damages.
notes. Spouses defaulted in payment. The
Board of Liquidators vs. Heirs of Maximo Kalaw payment was lowered but still no payment. Car Held: Yes. Although resp claims that force
—Copra Trading, hindi na kelangan ng pirma ng was detained inside the bank’s compound. Gueco majeure since knuckles were the reason for the
Board of Directors. went to bank and negotiated and issued a accident and they have inspected the knuckles,
manager’s check. But car was not released bec does exercised diligence. Carrier claims liability
Nacoco is for the protection, preservation and Gueco doesn’t want to sign Joint Motion to of manufacturer. Court said that the inspection
development of the coconut industry. Kalaw is Dismiss claiming not in the contract that they done was merely visual and not meeting the
the manager and board chairman. Nacoco have to sign. requirement of expected due diligence.
embarked on copra trading activities, thus
entering into contracts. For 3 years, profited 3M Issue: WON the bank in not informing the Negligence: In not exercising the proper
but after 4 typhoons, left the coconut lands spouses to sign motion to dismiss liable for diligence required.
devastated throughout the country. It was not damages for not releasing car.
able to fulfill the contracts it has engaged in. 5. Contravention of the tenor of the obligation
Nacoco paid damages to one of the parties. Held: No. Joint Motion to Dismiss for the
Nacoco now sues Kalaw for having approved the spouses’ benefit and not for the bank. It would Arrieta vs. Naric—Burmese Rice, di naman pala
contracts. only state that the case would be dropped and kayang mag-open ng Letter of Credit.
that the spouses had fully settled his obligation
Issue: WON Kalaw is guilty of negligence for thus the dismissal of the case. There is no fraud Pet participated in the public bidding by Naric
entering into contracts without prior approval of —no intentional and deliberate evasion of the for the supply of 20K MT of Burmese rice. Her
the Board of Directors. normal fulfillment of obligations. bidding being the highest, she was awarded the
contract. In 1952, entered into contract, Naric
Held: No. Consideration of practice. Corporate Fraud: In not stating that they have to sign Joint and Pet, sale of rice. Pet obligated herself to
officer entrusted with the gen management and Motion to Dismiss but this is not considered deliver to the latter the tons os Burmese rice
control of business has implied authority to make Fraud. No intent and for the benefit of the and in turn corp has to pay for the imported rice
any contract or do other act wichi is necessary or Plaintiff. by means of an irrevocable, confirmed and
appropriate to the conduct of the ordinary assignable letter of credit in US currency. It was
business of the corporation. But there is a only In July that def took first step to open
citation on the Nacoco’s by-laws requiring prior letter of credit. Pet already made a tender to
directorate approval of Nacoco contracts. Court her supplier a 5% and this will be confiscated if
considered practice of trade of short-sellling or L/C will not be received before Aug. 4. PNB
forward sales. Prev contracts without prior auth informed Naric that L?C approved but has a
from Board. And evidence showed that Kalaw 4. Negligence condition that the 50% marginal cash deposit be
actually handled the corp well for it to profit. paid. Naric was not in any financial position to
Force majeure reason. meet the condition and wrote the pet about it.
Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 10
L/C was opened in Sept thus 5% deposit was relieves the parties from fulfilling their bec there is negligence. 1723 will apply.
forfeited. When appellee failed to restore obligation that time. To require the pet to Engineer/ arch who drew up plans and spec
cancelled Burmese rice she offered a sub but deliver the sugarcane during the 6 yrs of liable for damages. Contractor liable if edifice
Naric rejected. suspension was impossible of being performed. 6 falls within the same period on acct of defects in
yrs can’t be deducted from 30 yrs. the construction or the use of materials of
Issue: WON Naric should be liable for damages. inferior quality. Engr/archi will be held solidary
La Mallorca vs. De Jesus—tire blow-out. liable if supervises construction.
Held: Yes. Failure of the letter of credit to be
opened in the contemplated period. Immediate Held: Cause of the blow-out was known. It was a Fortuitous Event: Will not apply bec there is
cause of damages. No necessary data but pet mechanical defect of the conveyance or a fault negligence.
would not win bid had she not furnish them with in its equipment which was easily discoverable if
it. Waiver bec Pet suggested to sub it Thai rice. the bus had been subjected to a more thorough Austria vs. CA—Naglakad mag-isa sa gabi,
Waiver are not presumed. Express stipulation. or rigid check-up before it took the road that nanakawan ng diamond pendant.
day. The bus was driving fast as was evidenced in
Contravention: That Burmese Rice should be the trial. Abad acknowledged receiving from Austria one
delivered and should not deliver another thing. pendant with diamonds valued at P4,500 to be
Nakpil vs. CA—Engr/Archi pati Contractors sold on commission basis or to be returned on
Chavez vs. Gonzales liable sa pagguho ng bldg. demand. While walking home, Abad was robbed
and her things were taken including pendant.
Contravention: That they agree that after 3 Phil Bar Assoc decided to construct its building in Estafa. RTC ruled negligence. CA held that
days, typewriter would be usable. INtramuros Manila. Construction was undertaken robbery was established, fortuitous event.
by UCCI on administration basis and the plans
E. Effect of fortuitous event and specifications of the building were prepared Issue: WON Abad is liable for the loss of the
by another party Nakpil. It was completed in pendant.
Necessito vs. Paras June 1966. In 1968, a strong earthquake hit
Manila and building sustained major damages. As Held: No. It was undisputed that Abad was a
Effect: Not fortuitous since knuckles should have temporary remedy UCCI shoved up the building victim of robbery. Even when she walked alone
been inspected more than the visual inspection at its own expense. PBA commenced action at night knowing that she had with her the
done. against UCCI for the partial collapse of the pendant and a large amount of money, the
building. Allegations were that there was a crimes then were not as prevalent as the present
Ampang vs. Guinco—the bus that skidded. failure of the contractors to follow plans and time.
specifications and violations by the defendants
Held: The accident was caused by an accident of the terms of the contract. Def then filed Fortuitous event: Robbery was unforeseen and
which was unforeseen and beyond the control of against 3rd party-architects who prepared plans evidence established that it happened.
the company on its driver. and specifications alleging collapse was due to
the defect of it. Vasquez vs. CA—sinabi na sa captain na may
Victoria Planters vs. Victorias Milling—30 years bagyo, tumuloy pa rin. Lumubog.
contract suspended due to Japanese Invasion. Issue: WON UCCI and Nakpil be held liable.
Pioneer Cebu left the port of Manila. The vessel
Held: 1174 relieves obligor from fulfilling a Held: Yes. The case was referred to the encountered a typhoon and struck a reef and
contractual obligation (fortuitous event). The Commissioner and found out that there were subsequently sank. Plaintiffs seek the recovery
stipulation in the contract that in the event of defects in plans and specifications and that of damages due to the loss of children and other
force majeure, the contract shall be deemed contractors failed to observe requisite of people due to voyage. There was a storm as def
suspended during the said period does not mean workmanship and even the owners failed to claims but it was established that the captain
that the happening of those events stops the observe requisite degree of supervision in the knew about it but still proceeded.
running of the period agreed upon. It only construction. Fortuitous even will not be applied
Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 11
Issue: WON fortuitous event shall be considered Renunciation of the principal would extinguish action, and then obtain therefrom the
and exempt def from liability. accessory but waiver of the accessory would not satisfaction of his own credit. Double function:
extinguish the principal. conserving the patrimony of the debtor by
Held: No. They already knew the risk they were b. Yes. Divisible contract, that which is illegal bringing into it property abandoned or
taking. They already receive report of the can be separated from legal ones and the latter neglected by him AND of making execution on
typhoon but proceeded anyway. Def claim Art. may be enforced. Interest which would be such property effective thereafter. “Debtor’s
587 Code of Commerce, loss of vessel exempt allowed is the interest bec of delay and default debtor is my own debtor”. Debtor who is sued
liability. But it is cited there that the liability of due to the general provisions of the law. may set up against the plaintiff the same
the owner is limited to the value of the vessel or defense he could set up against his own
to the insurance thereon. It was held that the Usurious obligation: Principal only, usurious creditor. If the action succeeds, the plaintiff is
insurance of the vessel would be liable for the interest not enforced. entitled only to so much as is needed to satisfy
damages that the shipowner or agent be liable his credit; if there is any balance, it shall
for the death of the passengers. Briones vs. Cammayo—P1500 lang utang pero pertain to his debtor.
interest P300 per year-usurious.
Fortuitous Event: Will not apply bec captain had Goldstar Minig vs. Lim Jimena—mining claims
knowledge of the event thus making it not Briones filed against Cammayo to recover P1500. pinondohan, hindi na siya binayaran sa usapan.
unforeseen. They executed a real mortgage as security for
the loan of P1200 given by Cammayo upon Jimena lent to Lincallo money to purchase
F. Usurious transactions usurious agreement and reserved to himself P300 mining claims and they agreed that ½ f the
payment of interest for a year. Plaintiff paid proceeds shall be given to Jimena. Mining rights
Angel Jose Warehousing Co vs. Chelda—Loans total sum of P330 but Cammayo refused to over part of the claim were assigned to Gold Star
with usurious interest, principal still enforced acknowledge it as payment for principal but for before WWII and copr paid Lincallo P5000
but interest not. (P20K+) interest of loan for a year. royalties. Lincallo entered contracts without the
knowledge of Jimeana. Marquez contracted with
Angel Jose filed against Chelda, its capitalist Issue: WON creditor entitled to collect the Gold Mining and 45% should go to Lincallo.
partner for the recovery of the unpaid loans with principal obligation and interest. Another company contracted and stipulated 43%
legal interest and atty’s fees (P20K+). Def paid would go to Lincallo. Jimena demanded part but
bal of P5.6K. Plaintiff charged and deducted Held: Yes. But only as to the principal. Ruling of he was not paid.
from the loan usurious interest at the rate of 2% Angel vs. Chelda.
and 2.5% PER MONTH and consequently, as Issue: WON Jimena has a cause of action against
claimed by def should not be permitted to Usurious obligation: Principal only, usurious Gold Mine when it contracted only with Lincallo.
recover under the law. RTC-P1048.15 usurious interest not enforced.
interest which the payment was deducted from Held: Yes. Art. 1177 provides that creditors after
the interest and def claims that it should have G. Presumption of interest and installments having pursued the property in possession of the
been deducted from the principal obligation. debtor to satisfy their claims, may exercise all
***Hill vs. Veloso the rights and bring all the actions of the latter
Issue: a. WON in loans with usurious interest, the (debtor) for the same purpose, save which are
plaintiff may still recover the principal of the inherent in his person. 1883: the principal may
loan. ***Vda De Ongsiako vs. Cabatuando sue the person with whom the agent dealt with
b. WON the illegal terms as to the payment of in his own name, when the transaction involves
interest renders nullity as to the payment of the H. Action Subrogation things belonging to the principal.
principal debt.
Accion Subrogatoria: action which the creditor AS: File against debtor of his debtor.
Held: a. Yes. Creditor may still recover principal may exercise in the place of his negligent
of the loan. Loans with usurious interest are not debtor in order to preserve or recover for the
totally void but only as to the interest. patrimony of the debtor the product of such
Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 12
Estate of Hernandez vs. Luzon Surety— Lichauco vs. Figueras-Hermanos—Lorchas, Issue: WON Parks is the owner of the land bec of
namatay yung guarantor, namana rin yung emergency and regular use. non-performance of the condition of the mun of
utang niya. tarlac.
Held: The amendment to the contract bet the
Luzon Surety filed against estate of Hemady plaintiff and def was expressly conditioned on Held: No. The action for revocation of a donation
based on 20 different indemnity agreements and the defs being the successful bidders at the is 10 yrs. They have filed case after 14 yrs.
couterbounds by the deceased in consideration letting and they were not the winners. Second Although condition was not complied with,
of guaranteeing various principals in favor of contract has no force but the first one. No revocation should have been made before the
different creditors. Hemady died and estate showing that they have given new life to the sale of the land. Req: 1. consent of the donee of
claim not liable bec of death. agreement. the revocation 2. judicially decreed. Onerous
donations, 10 yrs prescription.
Issue: WON death extinguishes obligation of the Wise & Co vs. Kelly—hindi naman sinabi na
estate. ibenta yung goods sa ganitong halaga. CPU vs. CA—nagdonate ng land for medical
school pero hindi ginawa. No period but 50 yrs
Held: No. Obligations extinguished by death are: Held: No proof that Kelly has not turned over all na nakalipas di pa rin ginawa.
a. support b. parental auth c. usufruct d. the money received from the sale of the
contracts for a piece of work d. partnership e. merchandize so that Lim, the surety, has no Don Lopez donated land to CPU on the condition
agency. Articles that regulate guaranty or liability. The condition is that Lim will pay if that it would be used for the establishment of a
suretyship contain no provision that the guaranty Kelly has not turned over all the sales of the medical school and that CPU cannot sell or
is extinguished upon the death of guarantor. Art. merchandise but not that he shall pay if all the convey the land to any party. CPU failed to do so
774 and 776 (succession and inheritance) state sales has not amounted to the original amount of and even exchanged land with another with the
that heir succeed no only to the rights but also obligation. There is no stipulation that the goods NHA. Heirs filed for annulment of donation.
to the obligations. were to be sold at a certain price, or not less
than what it should be. Issue: WON donation annulled.
AS: Obligation was subrogated to the heirs of the
dead person. Santiago vs. Millar—nanalo sa sweepstakes pero Held: No. Although there is a need to fix a period
nawala ang ticket. bec the contract did not stipulate period when
III. KINDS OF OBLIGATION to commence condition. However, in
Held: The ticket sold has a notation that prize consideration of the facts, 50 years have lapsed
A. PURE AND CONDITIONAL OBLIGATIONS will be paid upon the surrender of the ticket. for the condition to be complied with and CPU
The surrender or presentation of the ticket is a was not able to perform. SC ruled to reconvey to
1. Pure Obligations condition precedent of payment. heirs the land.

Pay vs. Palanca—naningil ng utang after 15 yrs, Parks vs. Prov of Tarlac—nagdonate ng land for Aguilar vs. Cititrust—yung hindi ko
nagprescribe. school and public park in 6 mos pero hindi maintindihang kaso or baka hindi lang siya
ginawa. talaga relevant under this title.
Held: Every obligation whose performance does
not depend upon a future or uncertain event or Cirer and Hill were owners of parcels of land and
upon a past unknown to the parties, it is donated it to the municipality of Tarlac on the b. Potestative Mixed Conditions
demandable at once. condition that erection of a public school and a
public park shall be commenced within the Shotwell vs. Manila Motor—Banks were
2. Conditional Obligations period of 6 months. Tarlac failed. Cicer and Hill chartered to accept liability.
sold land to Parks. Parks pray for annulment of
a. with suspensive/resolutory conditions donation. Held: The banks will not be liable since they
didn’t accept that they will should liability. The
lease was extinguished by the fire that occurred
Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 13
and the chartered banks being a sublessee of the absolute acknowledgement of the obligation and d. positive and negative conditions
Manila Motor which contracted lease also from was sufficient to prevent the statute of
Shotwell, will not be liable for the construction limitations from barring the action upon the 3. Constructive Fulfillment
of the destroyed buildings. No potestative original contract.
condition. Taylor vs. Uy Tieng—dapat may trabaho siya
Lease for the enjoyment of the premises. No Hermosa vs. Longara—as soon as I receive pero binawi ni Uy Tieng dahil di maganda
fault on part of anyone. funds derived from the sale of my property in sitwasyon. “FOR ANY REASON”
Smith Bell vs. Sotello Matti—i-deliver yung Held: “Should the machinery to be installed in
equipment pero depende sa gobyerno. Held: The condition implies that the obligor has the said factory fail, for ANY REASON, 6 months
already decided to sell his house or at least that from the date hereof, this contract may be
Held: The conditions did not depend upon the he had made his creditors to pay his cancelled”. The def can rescind the contract bec
will of the debtor alone. There is no delay since indebtedness demandable is that the sale be their reason falls under “any reason”.
there existed rigid restrictions during the that consummated and the price thereof remitted to
time of world war. It is a mixed one because the islands. Not a purely potestative one, But there is no constructive fulfillment on this
dependent also of the will of the third person or depending upon the will of the obligor, but partly case. Constructive fulfillment: condition shall be
the US govt whether to allow the delivery or not. upon chance, i.e. presence of the buyer of the deemed fulfilled if the obligor intentionally
property for the price and under conditions impedes its fulfillment, has no application to the
desired by the obligor. cases of the resolutory provision giving to the
obligor a right to cancel contract upon
Trillana vs. Quezon Colleges—if I harvested c. Impossible and Illicit conditions contingency within the control of the obligor.
Luneta Motor Co. vs. Abad—if I recovered Herrera vs. Leviste—GSIS and Leviste Case.
The stipulation in this case was that the obligor judgment in the action but he died during the Teehankee’s Dissent.
would pay the full value of a subscription for trial.
shares in the Quezon College after she had Tehankees Dissent: Leviste was guilty of bad
harvested fish. Held: The obligation is subject to the condition faith and violated the terms of the contract thus
that when the plaintiff recovered judgment, there is constructive fulfillment. Herrera was
Held: This condition is obviously depended upon they shall deliver the property so released to the required by GSIS to submit papers to support his
the sole will of the obligor, and the conditional officer of the court for the payment of said assumption but could not be approved until
obligation is void, because it would have served judgment of in default, pay its full value. Since Herrera could submit a final deed of sale and
to create an obligation to pay, the whole Abad died, it has become a legal impossibility Leviste did not execute this deed. He prevented
obligation is void. since no judgment shall be rendered. the assumption of Herrera of the mortgage. Not
only that, Leviste is in arrears for 14 months in
**When conditional obligation is void, then it Galang vs. CA—you pay 25% within 3 months or its amortization and Herrera did not know that.
would convert the obligation to a pure obligation upon the removal of the encargado. 1186 and 1169 (reciprocal obligations).
which would be demandable at once.
Held: The removal of the encargado was not a Tayag vs. CA—estopped bec receipt of
Osmena vs. Rama—If the house of strong condition precedent to the fulfillment of the payments and knowledge of irregularities.
materials is sold, I will pay my debt. contract. What we have is a contract to sell
wherein the ownership is retained or title until Held: The acceptance of the petitioners of the
Held: If the statement found in the the fulfillment of a positive condition, normally various payments even beyond the periods
acknowledgement should be regarded as a the payment of the purchase price in the manner agreed upon, was perceibved by the lower court
condition, it was a condition dependent upon the agreed upon. It was just an alternative period as tantamount to faithful performance of the
exclusive will of the debtor, and is, therefore, for the payment of the second installment. obligation. 1186 applies to both obligees and
void. The acknowledgement, therefore, was an obligors in reciprocal obligations even when the
Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 14
proviso only speaks of the obligor. Pet accepted Coronel vs. CA—Downpayment when the contract would be deemed rescinded.
the performance knowing its incompleteness and If one party is willing to perform and the other is
irregularity and without expressing any protest Retroactive: From the moment the obligation not extra-judicial rescission would suffice if
or objection, the obligation is deemed to be was constituted, upon payment of full balance, there is stipulation. However, if there has been a
complied with. retroact to that date. performance already by one of the parties,
rescission should already be judicially invoked
Coronel vs. CA—Receipt of Downpayment 5.Preservation of Creditor’s Rights regardless whether there is a stipulation or
none, especially if the other party rejects
Held: Intent of the parties has to be considered. Art. 1188: The creditor may, before the rescission.
It was a contract of sale and not a contract to fulfillment of the condition, bring the
sell. Contract of sale—ownership already appropriate actions for the preservation of his UP vs. Delos Angeles—award of logging rights;
transferred upon fulfillment of the suspensive right. rescission without need of judicial suit.
condition. Absolute sale. Contract to sell- The debtor may recover what during
although suspensive condition was complied the same time he has paid by mistake in case Held: In the agreement, there is a stipulation
with, ownership will not automatically transfer. of a suspensive condition. that UP has “the right and power to consider the
There is still a need to convey title to the Logging Agreement date Dec 2 1960 rescinded
prospective buyer by entering into a contract of 6. Rescission in Reciprocal Obligations without the necessity of a judicial suit. 1191’s
absolute sale. consideration: There is nothing in the law that
Ocejo vs. Interbank—maswerteng assignee. prohibits that parties from entering into
4. Retroactivity of Obligation Yung asukal na nasa ibang warehouse na agreement that violation of the terms of
kinuha ng banko. contract would cause cancellation thereof even
Padilla vs. Paterno-his mom is the universal without court intervention. BUT PROCEEDS AT ITS
heir and not his wife-paraphernal. Held: The thing sold not subject to condition RISK. Extra-judicial resolution will remain
that the buyer was the pay the price before the contestable and subject to judicial invalidation,
Held: The ownership of the land is retained by delivery. On demandability: No term having been unless attack thereon should become barred by
the wife until she is paid the value of the lot, as stipulated on payment, it should be demandable acquiescence, estoppel or prescription.
a result of the liquidation of the conjugal at the time and place of the delivery of the thing
partnership. There mere construction of the sold. Demandable at once and failure to do so Roque vs. Lapuz—10 yrs to pay, I can pay
building from common funds does not would entitle obligor either performance or anytime within the 10 years.
automatically convey the ownership of the wife’s rescission. But rescission should be applied to
land to the conjugal partnership. The properties’ the court for a decree for the rescission of the Held: Qualification for rescission: so substantial
conversion from paraphernal to conjugal assets contract. No rescission was made before the and fundamental to defeat the object of the
would be deemed to retroact to the time the insolvency of plaintiff, the assignee standing on parties. Absence of a formal deed of conveyance
conjugal buildings were first constructed thereon the shoes of the buyer has a better right. is a very strong indication that the parties did
or at the very latest, the time before the death not intend immediate transfer of ownership and
of Narcisso Padilla that ended the partnership. Albert vs. University Publishing—publishing the title, but only a transfer after full payment of
The acquisition by the partnership of theses Revised Penal Code. the price. Intent of the parties was to have the
properties was subject to the suspensive obligation be paid in monthly installment.
condition that their values would be reimbursed Held: It was the defendant corporation who had
to the widow at the liquidation of the conjugal breached the contract. The plaintiff has written Herrera vs. Leviste
partnership; once paid, the effects of the letters reminding the corp that the contract will
fulfillment of the condition should be deemed to be deemed rescinded if the corp would not fulfill Tehankee’s dissent: Upon Leviste’s refusal to
retroact to the date the obligation was its obligation. execute the deed of sale, Herrera has the option
constituted. of specific performance or the rescission of the
Accg to Tolentiono: Rescission must be judicially contract.
invoked. Unless there is a stipulation of period
Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 15
Zulueta vs. Mariano—Avellana a movie director rescinded it is the duty of the Court to require
made movies for Zulueta for his political both parties to surrender that which they may Held: 1197. If obligation does not fix a period
campaign, automatic rescission clause. have respectively received and to place each but from its nature and circumstance it can be
other as far as practicable in his original inferred that a period was intended , the courts
Held: There is an automatic rescission clause in situation. The exercise of the power to rescind may fix the duration thereof. Will also fix period
the contract and the fact that pet has cancelled extinguished the obligatory relation as if it had when it depends upon will of the debtor. In
contract, resp has no right to remain in the never been created, the extinction having a determining period, courts will have to consider
premises. Extra-judicial rescission shall only take retroactive effect. the circumstances and see if period was
legal effect where the other party does not contemplate. The contract doesn’t stipulate a
oppose it. period, thus the court held that resp has to
B. OBLIGATIONS WITH A PERIOD institute a judicial action to fix the period. (this
Delta Motor Corp vs. Genuino—delivery of case is an ejectment case so fixing a period was
black iron pipes for iceplant and storage. PNB vs. Lopez Vito—loan of spouses when not alleged in the case).
there is a condition and a period stipulated.
Held: Power to rescind under 1191 is not Sarmiento vs. Villasenor—loan with a pledge of
absolute. The act of a part in treating a contract Held: The non-fulfillment of the conditions of a medal with a diamond in the center with 10
as canceled or resolved on account of infractions the contract renders the period ineffective, and diamonds surrounding it, pair of diamond
by the other contracting party must be made makes the obligation demandable at the will of earrings, comb with 22 diamds, and two
known to the other and is always provisional the creditor. Failure to pay would make the diamond rings! Daming diamonds!!!
subject to the scrutiny and review by the proper entire obligation due and demandable, so
court. regardless of the period of other installments, Held: In a contract of loan with interest wherein
Delta –no manifestation that it had opted to def has to pay the entire obligation. a term was fixed for the payment thereof, it is
rescind contract, it has possession of the two presumed that said terms was established for the
irons and the downpayment and has waived the Smith Bell vs. Matti benefit of the creditor as well as that of the
performance of conditions of the contract when debtor, unless from its tenor or other
they opted to go on with the contract only with Held: There also was a stipulated period circumstances it appears to have been stipulated
a much higher price. however there is also a condition which states for the benefit of one only. In such a case the
that delivery would depend upon the US govt. debtor has no right to pay the debt before the
Ong vs. Bognalbal Upon the lapse of the period and the condition lapse of said period, without the consent of the
bars the performance, def will not be liable. creditor, and demand the devolution of the
Rescission: Upon the infraction of Ong, Bognalbal goods that were pledged to secure the payment.
could have filed rescission of the contract or the Gaite vs. Fonacier—expiration of the surety, Only after the expiration of said period may the
performance of it. debtor loses the benefit of the period. Mining debtor make payment, and, therefore, the
claim case. action for the recovery of the goods pledged
Carrascoso vs. CA—notice of lis pendence but arises only after the lapse of said for the purpose
continued with the sale of the land. Held: 1198 states when debtor loses the benefit of the computation for he period of prescription
of the period. The surety contract expired and of said actions.
1972-El Dorado sold to Carrascoso the parcel of Fonacier didn’t renew or replaced the surety.
land Sale of the ore was not a suspensive condition Daguhoy Enterprises vs. Ponce—nagsecure ng
July 1975- Buy and Sell bet Carrasco and PLDT but a suspensive period, fixing the future date of mortgage as guaraty sa loan sa isang corp tapos
April 1977- Carrasco to PLDT the payment. after ibigay yung loan, withdrew mortgaged
May 30, 1977 PLDT to PLDTAC properties then mortgage them again sa ibang
May 15, 1977-notice of lis pendens Qui vs. CA—factory was razed to the ground corp for another loan. Madaya.
and failure of lease to rebuild the building of
Held: Notice of Lis pendens, but still PLDT the lessee. (the building to be constructed Held: Although the contract stipulates that loan
conveyed land to PLDTAC. Where a contract is shall belong to the resp lessor after 20 yrs). payable in 6 years, but because of the failure to
Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 16
give and register the security agreed upon in the month lease since the rentals were payable on a of the house and lot is likewise barred as the
form of two deeds of mortgage, the obligation monthly basis. agreement to make such conveyance was not an
becomes pure and without condition thus due independent principal undertaking, but merely a
and immediately demandable. 1198, lost the Pacific Banking Corp vs. CA—negosyo sa subsidiary alternative pact relating to the
benefit of the period. cultivation of fish and saltmaking bumagsak. method by which the debt might be paid.

Victorias Planter, supra Held: An agreement to extend the time of Ong Guan Can vs. Century—the insurance
payment in order to be valid must be for a company doesn’t want to rebuild with the
De Leon vs. Syjuco—gusto ng magbayad ng definite time. The cause of action was for the same materials.
debtor pero ayaw pang tanggapin ng creditor. fixing of the period.
Held: On the contract the insurance company
Held: Consignation was not valid. Req: a. debt obligated itself to either pay the amount to
due b. consignation has been made bec creditor Song Fo vs. Oria—launch was sold but was which the house was insured or rebuild it. The
to whom payment is made refused to accept, or shipwrecked, Song Fo did not insure and Oria debtor must notify the creditor of his election,
was absent or incapacitated c. prev notice of did not secure. stating which prestation he is disposed to fulfill.
consignation to the person interested in the The effect of notice is to give the creditor, that
performance d. amount due placed at the Held: The launch was with Oria already and is, the plaintiff in the instant case, opportunity
disposal of the court 3. after consignation had knowing that the launch has not been insured to express his consent, or to impugn the election
been made, the person interested was notified yet, sent it from Manila to Samar and on the trip made by the debtor, and only after said notice
thereof. Reasons why creditor can’t be forced to it was shipwrecked. The contract stipulates shall the election take legal effect when
accept payment a. may want to keep his money quarterly installments. Since the vessel is lost, consented by the creditor, or impugned by the
invested safely instead of having it in his hands. Oria doesn’t want to pay. That unpaid latter, when declared improper by the
B. to protect himself of sudden decline on the installments of the purchase price of the launch, competent court.
purchasing power of the currency loaned. Unless which under the express terms of the contract
creditor consents, debtor cannot accelerate had not become due and payable at the time of
payment. the loss of the vessel, became due and payable D. JOINT AND SOLIDARY
under the provisions of article 1129 of the Civil
Millare vs. Hernando—yung bahay niya gusting Code, upon the failure of the purchaser, within a Jaucian vs. Queroi—surety was solidarily liable,
gawing resto e ayaw niya nga. reasonable time after the loss of the launch, to then surety died.
offer either satisfactory security or to give bond
Held: On the contract, it is stipulated that the to secure the payment of the unpaid installment Held: The right of a guarantor or surety to insist
lease may be renewed after a period of 5 years of the purchase price. on the exhaustion of the property of the
under the terms and conditions as will be principal debtor, before his own shall be taken in
mutually agreed upon by the parties at the time execution does not exist where the guarantor or
of the renewal. 1197 and 1670 of the CC (fixing C. ALTERNATIVE AND FACULTATIVE surety is jointly and severally bound with the
of period, and after 15 days of occupying the OBLIGATIONS principal debtor.
leased property and without any notice from
lessor, contract shall be renewed). It is Agoncillo vs. Javier—Anastacio Alano Ramos vs. Gibbon—Mining Claims, Possessory
understood that there is an implied new lease, mortgaging his property to pay the debt. Rights of a Qualified Locator.
not for the period of the original contract, but
for the time established by 1682 and 1687. The Held: Anastacio was only a rep of his children, Held: The concurrence of two or more creditors
other terms of the contract shall be revived. and his partial payment does not affect or of two or more debtors with respect to the
After the expiration of the contract, the implied prescription not for the benefit of the other same obligation does not imply that each of the
new lease could not possibly have the period of 5 debtors. The mortgage was never recorded former is entitled to demand the performance of
years, but rather would have been a month-to- therefore invalid. Action to recover has the obligation in its entirety or that each of the
prescribed, the action to compel a conveyance latter is bound to perform it. This shall be the
Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 17
case only when the expressly so provided by the obligation. With respect to the amount of Held: The remission of any part of the debt,
terms of the obligation, and the parties are reimbursement to be paid by Comintan, it made by the creditor in favor of one or more his
bound in solido. The presumption, in the absence appears that the dispositive portion of the solidary debtors, inures to the benefit of the rest
of the stipulation as to how certain debtors are decision was lacking in specificity, as it merely of them, and these latter may utilize in their
bound, is that they are bound jointly. provided Zamora and Comintan jointly liable favor the defense of remission. The solidary
therefore. When two persons are liable under a debtor unconditionally obligated or whose period
Versoza vs. Lim—Collision of Perla and Ban Yek. contract or under a judgment, no words appear for payment has expired, may not, with respect
in the contract or judgment to make each liable to the part of the debt he is liable, plead the
Held: Where a collision occurs between tow sea- for the entire obligation, the presumption is that defense of prematurity of the action, which is
going vessels, caused exclusively by the their obligation is mancommunada, and each personal to his co-debtors.
carelessness of the navigating officers in charge debtor is liable only for a proportionate part of
of one of the vessels, both the owner and the the obligation. The judgment debt of 13K should BPI vs. McCoy—McCoy paid all the debts and
operating company directly in charge of the be pro-rated in equal shares to Comintan and was subrogated with the rights to contribution
offending vessel are liable for the damage done. Zamora. from his co-debtors.
The rule that joint obligations are apportionable
unless otherwise specially provided has no Imperial Insurance vs. David—spouses bound Held: Where one of the several persons who are
application to obligations arising from tort. themselves to be solidary and jointly liable, sued upon a joint and several liability elects to
Persons who cooperate in the tortuous infliction husband died. pay the whole, such person is subrogated to the
of damage are jointly and severally liable. rights of the common creditor and may properly
Contractual Obligations-joint Held: If husband and wife bound themselves substituted in the same action as plaintiff for the
Tortuous act-joint and severally liable jointly and severally, in case of his death her purpose of enforcing contribution from his
liability is still solidary and may be sued for the former associates under art. 1145.
Ronquillo vs. CA—foodstuff, individually and whole debt. The Rules of Court provide the
jointly, auction of furnitures on same day of procedure should the creditor desire to go **But Ma’am said, this is not the same meaning
hearing for reconsideration. against the deceased debtor, but there is nothing of real subrogation of rights.
in the said provision making compliance with
Held: Clearly then, by the express term of the such procedure a condition precedent before an Chinese Chamber of Commerce vs. Pua Te
compromise agreement and the decision based ordinary action against the surviving solidary Ching—Surety was jointly ans severally liable,
upon it, the defendants obligated themselves to debtors, should the creditor choose to demand principal died.
pay their obligation, “individually and jointly”. payment from the latter, could be entertained to
The term “individually” has the same meaning as the extent that failure to observe the same Held: The surety may use against the creditors
“collectively”, “separately”, “distinctively”, would deprive the court jurisdiction to take all the defenses which the principal debtor is
respectively, and severally. An agreement to be cognizance of the action against the surviving entitled and that are inherent in the debt, but
individually liable undoubtedly creates a several debtors. CIVIL Code allows the creditor to not those purely personal to the debtor, to wit,
obligation and a several obligation is one by proceed against any of the solidary debtors or those which may contribute to weaken or
which one individual binds himself to perform some or all of them simultaneously. Hence, there destroy the juridical bond existing between the
the whole obligation. is nothing improper in the creditor’s filing of an creditor and the principal debtor, not any means
action against the surviving solidary debtors of defense which may invalidate the original
Oritz vs. Cayanon—Bartolome Ortiz, ayaw alone, instead of instituting a proceeding for the contract from which the tight or the action of
umalis sa premises dahil sa mga improvements settlement of the estate of the deceased debtor the creditor against the security arises in this
na ginawa niya at hindi siya nakasama sa wherein his claim could be filed. class of actins is not included the means of
bidding. Nangolekta pa ng toll. defense as to how the trial may be continued
Inchausti vs. Yulo—magkakapatid na hindi pa and the writ of execution issued in case of the
Held: Presumption when two persons are liable nagkasundo sa remission na binigay. death of the principal debtor which can not
under a contract or judgment and no mention of affect the original contract nor destroy the bond
the specific liability of each for the entire existing bet the creditor and the principal
Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 18
debtor, it being, therefore, an exception or Held: The clause of the contract referring to the sums, and avoid unnecessary litigation designed
means of defense no inherent in the debt, but at forfeiture of the P100,00 already paid, should to enforce fulfillment of the terms and
the most, a purely personal one of the debtor or the purchases C fail to pay the subsequent conditions agreed upon. Said provisions are not
the successors-in-interest of the debtor. installments, is valid, It is in the nature of a unjust or inequitable and does not, as appellant
penal clause which be legally established by the contends, make the vendor unduly rich at his
parties. In its double purpose of insuring cost and expense.
Int’l Finance vs. Imperial Textile—guarantee vs. compliance with the contract and of otherwise
surety measuring beforehand the damages which may
result from non-compliance, it is not contrary to Bachrach Motors vs. Espiritu—obligation partly
Held: Although it states “Guarantee”, the law, morals or public order bec it was voluntarily performed, 25% penalty, reduced. WHITE
stipulations of the contract make it clear that and knowingly agreed upon by the parties. TRUCKS.
“jointly and severally” phrase is the one used in Viewing concretely the true effects thereof in
the contract. the present case, the amount forfeited Held: Interest and penalty are not the same.
Surety: person binds himself solidary with the constitutes only 8% of the stipulated price, which When the obligation has been partly performed,
principal debtor, primary liability is not excessive if considered as the profit which the CC authorizes the court to reduce the
Guaranty: contract whereby a person binds would have been obtained had the contract been penalty thereon.
himself to the creditor to fulfill the obligation of complied with. There is, moreover, evidence
the principal in case the latter should fail to do that the defendants, because of this contract Cabbarroguis vs. Vicente—jeep accident.
so, secondary liability. with C, had to reject other propositions to buy
the same property. At any rate, the penal clause Held: The refusal of the defendant to pay when
Construction Dev. Vs. Estrella—Bus was does away with the duty to prove the existence the demand was made by plaintiff entitles the
rammed and their knees are pinned to the and measure of the damages caused by the latter to interest on the penalty. 2210 provides
seats in front of them. breach. that in the discretion of the court, interest may
be allowed upon damages warded for breach of
Held: The bus company, its driver, the operator Caridad Est. vs. Santero—loan to be paid in 60 contract. This interest is recoverable from the
of the other vehicle and the driver of the vehicle days and failure to do so, those already paid time of delay, that is to say, from the date of
were jointly and severally liable to the injured shall be forfeited. demand, either judicial or extrajudicial. And if
passenger or the latter’s heirs. Nor should it there is no showing as to when demand for
make any difference that the liability of pet (bus Antichresis: a contract whereby the creditor payment was made, plaintiff must be considered
owner) springs from contract while that of acquires the right to receive the fuirts of an to have made such demand only from the filing
respondents (owner and driver of other vehicle) immovable of his debtor with the obligation to of the complaint.
arises from quasi-delict. apply them to the payment of interest if owing
Bus owner-contract, owner and owner of other and thereafter to the principal of his credit. Hodges vs. Javellana--iceplant machinery,
vehicle-quasi-delict : both jointly and severally softdrint, ice drop and fixture.
liable. Penal ClauseL generally intended to substitute
the indemnity for damages and the payment of Held: The provisions in the contract between the
interests in case of non-compliance of the parties relative to the compounding of interest
E. DIVISIBLE AND INDIVISIBLE OBLIGATION obligation. partake the nature of a penal clause and under
Art. 1223-1225 1229, may be reduced by court if iniquitous or
Held: The provisions in which the parties have unconscionable.
F. OBLIGATION WITH A PENAL CAUSE indicated in the contract is a penal clause which
carries the express waiver of the vendee to any Pamintuan vs. CA—plastic sheetings
Manila Racing vs. Manila Jockey—forfeiture of all sums he had paid when the vendor, upon his
what was partially paid. inability to comply with his duty, seeks to Held: The theory that penal and liquidated
recover passions of the property, a conclusive damages are the same cannot be sustained
recognition of the right of the vendor to the said where the obligor is guilty of fraud in the
Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 19
fulfillment of his obligation. The penalty clause
is strictly penal or cumulative in character and
does not partake the nature of liquidated
damages when the parties agree.

Concurring Antonio: A creditor in case of fraud by

the obligor is entitled only to the stipulated
penalty plus the difference bet the proven
damages and such stipulated penalty.

Robes-Francisco Realty vs. CFJ –

Held: A contract of sale which stipulate payment

of interest at 4% per annum in case vendor fails
to issue a certificate of title to vendee is not a
penal clause because even without it vendee
would be entitled to interest at the legal rate of
6% per annum. It is therefore inconceivable that
the aforecited provision in the deed of sale is a
penal clause which will preclude an award of
damages to the vendee Millan.

Makati Devt Corp vs. Empire Insurance Co.—

you should build a house on the lot or else.

Held: Mitigation of the penalty is allowed where

there is partial payment of the obligation, the
reduction of the penalty is justified. This is true
where the indemnity provided for is essentially a
mere penalty , having for its object to compel
compliance with the contract.

Umali vs. Miclat—creation of an advertisement


Held: Under the law, a penalty takes the place of

interests only if there is no stipulation to the
contrary, and even then, damages may still be
collected if the obligor refuses to pay the