Bld2020 Oblicon Sample Pages

FROM Nth BAR CHALLENGER TO ATTORNEY
OBLIGATIONS AND CONTRACTS

BAR LAW FOR DUMMIES
WITH 1975-2018 BAR QUESTIONS AND ANSWERS

Ang BAR LAWS FOR DUMMIES 2020 (BLD2020) OBLIGATIONS AND
CONTRACTS na may 288 na pahina ay dinesenyo upang umangkop sa kakayanan
ng mga ordinaryong tao (layman) at mga pasimulang mag-aaral ng batas. Higit sa
lahat, ang BLD2020 ay may adhikaing tulungan ang mga “nth” time bar examinees
na mapagtagumpayan na ang hamon ng napakahirap bar examination sa
pamamagitan ng pag-gamit ng mga estratehiyang pang-elementarya at highschool
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na pagtuturo hanggang sila ay magkaroon ng sariling technique na kanilang
magagamit sa kanilang patuloy pag-aaral.
Ang mga manunulat ay pauna na nang humihingi ng pang-unawa sapagkat

may mga pagkakataon na hindi maiiwasan na gumamit ng mga salitang bulgar
upang higit na maitanim sa isipan ng mga mambabasa ang nais ipaunawa nito.
Bukod dito, ang mga katagang ginamit ay mga salitang pang-araw-araw nating
gamitin, kaya’t hindi maiiwasan ang mga maling gramatiko at pag-gamit ng lengwahe
sa kaka-ibang paraan.
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BAR LAW FOR DUMMIES 2020

OBLIGATION AND CONTRACTS
FIRST EDITION
JANUARY 25, 2019
MANILA, PHILIPPINES
ALL RIGHTS RESERVED BY THE AUTHORS

The author is a humble partner to succeed in your quest for a law degree and to clinch the evasive “Attorney” title
to your name. He believes that no one has the monopoly of knowledge so you may email him for any correction,
modification and suggestion at barlawfordummies@yahoo.com.ph. Other law subjects will soon be available for
2020 Bar Exams. For orders visit FB Page: Law Reviewers, Books and Bookstand for Sale/OR TEXT 09325293595

BAR LAW FOR DUMMIES

1975-2018 BAR EXAMINATION

FREQUENTLY ASKED TOPICS FROM
INTRODUCTION… 4 Page | 2
HOW TO STUDY OBLICON…4
OBLIGATION, CONCEPT…7
NATURE AND EFFECT OF OBLIGATION…23
DIFFERENT KINDS OF OBLIGATION….58
PURE AND CONDITIONAL OBLIGATION…58
OBLIGATION WITH A PERIOD…88
ALTERNATIVE AND FACULTATIVE OBLIGATION…95
JOINT AND SOLIDARY OBLIGATION…101
DIVISIBLE AND INDIVISIBLE OBLIGATION…116
OBLIGATION WITH A PENAL CLAUSE….119
EXTIBGUISHEMNT OF OBLIGATION…121
PAYMENT OR PERFORMANCE…123
CESSION…133
TENDER OF PAYMENT AND CONSIGNATION…134
LOSS OF THE THING DUE….143
RES PERIT DOMINO….144
BY CONDONATION OR REMISSION OF DEBT…149
BY CONFUSION OR MERGER…154
BY COMPENSATION…155
BY NOVATION…163
SUBROGATION…170
CONTRACTS, CONCEPT…178, 180
ESSENTIAL REQUISITES…198
CAUSE…200


BAR LAW FOR DUMMIES

OBJECT…205
CONSENT…209
VOID OR INEXISTENT CONTRACTS…231
PARI DELICTO…233 Page | 3

RESCISSIBLE CONTRACTS…242
VOIDABLE CONTRACTS…252
UNENFOREABLE CONTRACTS…262
STATUS OF FRAUD…263
FORM OF CONTRACTS…269
REFORMATION OF CONTRACTS…272
INTERPRETATION OF CONTRACTS…274


BAR LAW FOR DUMMIES

INTRODUCTION
The BAR LAW FOR DUMMIES 2020 (BLD2020) is designed for self-study/self-review and
primarily aimed to help the nth time examinees to pass the bar exams and for average law students
to fully understand difficult concepts of law as illustrated in our day-to-day activities. The technique
is spoon-feeding and we did much of all the thinking for you to save time. We included all the topics
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asked in past 20 years of bar examinations, the bar answers to that bar questions, the relevant
jurisprudence as well as the important codal provisions. And because we believe that no one has the
monopoly of knowledge we plan to make BLD as a “COMMUNITY REVIEWER” where readers are
encourage to email BLD2020 for any correction, addition and suggestion to come up with an ultimate
law reviewer. Those who will participate shall be acknowledged as part of the community.
Initially, BLD2020 shall be available in hard copies to cope up with the initial expenses
entailed. In the future, when all the reviewers are complete and as the circumstances may warrant,
a board of trustees shall be formed to guard the integrity of the “community reviewer” and it shall be
available via online subscription for a minimal fee just to keep the system afloat. On that note, we
ask for a lot of prayers for the people who would become part of the community to have good health
and a focused mind to finish the work in time for 2020 bar examination.
You will find that we used Tagalog language and Filipino culture most of the time in
explaining the law. Firstly, it is because we are more equipped in our own native tongue when
expressing our feelings and thoughts, and according to psychology of learning, students learn better
in their native language. Secondly, different concepts of laws are best illustrated with our day-to-day
experiences. And thirdly, we want the readers to laugh and stay awake by using colorful words and
hilarious situations.
By the way, when you avail of BLD2020 you will be added to a Facebook group exclusive for
BLD users. Take note that only veriafiable accounts with email address shall be accepted and
retained as member. We will do all the sharing and updates in that group.
HOW TO UNDERSTAND OBLIGATION AND CONTRACTS
Of all subjects ng law courses, ang Obligation ang pinaka-boring. Dahil ito yung mga
stipulations inside a contract or stated in law. Yung mga obligations stated sa law madali ng makita
yun – thou shall not kill. Oh di ba – wag kang papatay. Madaling intindihin. Eh paano yung mga
stipulations...let say I promise to give you P5,000. Valid ba yun? Syempre hinde. I will give you my
car tomorrow – not valid. I will give you P1000 today – not valid. Bakit hindi valid? Those promises or
words spoken are not obligations. You cannot got to court and sue me to fulfill my promise. You got
no cause of action. Bakit walang kang cause of action? Kasi when I promise to give you P1,000 and I
“kyeme” lang....there was no acceptance from you.
But if i said “ I will give you my car if you climb that tree”. You climb that tree. Ayan....may
cause of action na. Kasi may equivalent act ka na ginawa. Kaya dapat tumbasan ko yun. I am now
obligated to give you my car. If did not give you the car – magmumukha kang tanga hahahaha. Kasi
umasa ka na at you already did your part. So there is damages – hindi ka makatulog, nahihiya ka sa
mga kaibigan....may moral damages na. So there, the promise I made to you has become a juridical
necessity. It means that the court can compel me to give the car plus damages.


BAR LAW FOR DUMMIES

I promise to marry you. So sinuko mo na ang “divisoria”. Then i did not marry you. There
was no cuase of action – kasi mutual consent of love making yun. But if I said I promise to marry you
– and then bigla kang umalis – ikinalat mo na ikakasal ka na....namili ka ng mga gamit pang-kasal,
nag-order ka na ng litson at nangutang ka na ng pambayad sa reception venue....ayan may damages
na. You have a cause of action. But can i be compelled by the court to marry you? No. It is immoral
to compel a person to marry someone he does not love. That is slavery hahahahaha. Biro mo araw- Page | 5
araw kong makikita mukha mo pag-gising ko sa umaga. So, you have a cause of action for damages.
Babayaran kong lahat ang mga nagastos mo plus moral damages.
What are the sources of obligation? Dalawa lang – acts and law. Law – madaling makita yan
kasi nakasulat na. We will learn about it sa lahat ng law subjects. Examples – no person shall be
deprive of life, liberty and property without due process of lawXXX, sa political law yan and the
obligation is addressed to the State (the active subject). Yung buong Revised Penal Code Book 2 is all
obligations where the people is the active subject. The Labor Code is addressed to the workers and
employers (they are the active subjects). Hindi pwedeng ticket ng sinehan ang ibayad mo sa mga
workers mo – dapat pera. Commercial laws like insurance – as long na nagbabayad ng premium si
insured, the insurer has the obligation to assume the risk. Yung buong Civil Code is full obligation
based on law. So, therefore, the law set the standard. It means if the acts contradict or transgress the
law – the act is invalid. The act cannot be an obligation. It is void.
Example: I will give you my friend’s car if you passed the bar exam. That is valid. I have to
buy that car or any equivalent of such when you passed the bar. But If I said, I will go naked (wag
naman!) and walk in the street if you passed the bar exam. The act is immoral, it is void, hence, it is
not an obligation. When you pass the bar you cannot compel me to do such hahahahahaha....
You see the technique in undertanding oblicon? The act (the source of obligation) must be
lawful and carries a reciprocal act (to pass the bar exam). Absence of any of the requirement – the act
cannot be a source of the obligation.
So if i said – bro, ipahiram ko sa iyo yung car ko sa kasal mo bukas. That is not an obligation.
“kyeme” lang yung, charot lang. But if I said, pahiram ko sa iyo yung car ko bukas sa kasal mo pero
pahiram ng P5,000 ipapa-car polish ko para makintab....ayan...that is an obligation. Bakit naging
obligation na? Kasi po, ako ay naging debtor ng P5000 at ikaw naman ay naging creditor ng P5,000.
So, at the same time – nagkaroon ng commodatum or hiraman ng immovable property which is the
bridal car. So may dalawang posible CONTRACTS na nangyari sa simple statement na sinabi ko.
“pahiram ko sa iyo yung car ko bukas sa kasal mo pero pahiram ng P5,000 ipapa-car
polish ko para makintab.”
We are either bailor-bailee or debtor-creditor. Ang tawag sa relationship natin now ay hindi
na “bro”. We call it LEGAL TIE OR THE VINCULUM.
Question. Ang contract ba ay source of obligation. Yes! Because it is the evidence of our acts
to be accomplished. Yung promise ko na ipapahiram ko sa iyo yung car and the promise of giving the
P5000 as rent. Yan ang source of obligation.


BAR LAW FOR DUMMIES

But can a unilateral promise alone be a source of obligation?
Let say nawawala yung medyas ko. Ang sabi ko in national television.....kung sino man ang
maghahanap at makakakuha ng medyas kong butas ay bibigyan ko ng P1 MILYON. Si A and B
naghanap but C, who have not watched the announcement, naisuot pala niya yung medyas kong Page | 6
butas. Binigay niya sa akin. Am I obligated to give P1M to C even without his acceptance of the
challenge to look for it? No. Walang acceptance eh – walang consent.
Alam ninyo yung “Tambiyolo”? Nowadays puro automated na. Pero 20 years ago...ang Eat
BuLaga may pa-raffle. They will announce a raffle contest - ang maglakip sa sobre ng limang sachet
ng Kopiko at sa isang papel ay isulat ang inyong pangalang, tirahan at edad – ang mabububot ay
bibigyan ng P10M. So Lahat ng 104 milyon Filipinos raised the flag hahahaha....sumali sa pa-raffle
ng Eat Bulaga... the management of Eat Bulaga rented the 2 hectares of land para doon ilagay ang
lahat ng envelop entries.
Question? Was there a contract between Eat Bulaga and 104 Milyon Filipinos? Wala. (i dont
know nowadays if may special law on raffle, if there is, the obligation is based on law, not based on
contract. Pero noon wala. So let assume na walang special law today regulating raffle contests). If Eat
Bulaga decided not to pursue with the raffle, we cannot sue the company because there was no source
of obligation – neither in law nor act.
E di eto na. Bunutan na. Nabunot ang pangalan mo. Eh di tuwang-tuwa ka. They announce
that all winners must see the office on a certain day. Then dumating ka on that date to claim your
prize. Does Eat Bulaga have an obligation to give you P10M? This time yes. What is the source of the
obligation? Contract ba? What type of contract? Debtor-creditor na ba kayo ng Eat Bulaga? Yes. So,
the sources stated in Article 1157 are exclusive. Meron pa bang ibang sources of obligation? Wala na.
In summary, the sources of obligation are law and acts. Contracts are the written acts for
our convenience. Yung quasi-contracts, acts or omissions punished by law and quasi-delicts are all
under law.
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GENERAL PROVISIONS
WHAT ARE THE SOURCES OF OBLIGATION?
Art. 1157. Obligations arise from:

1. Law
2. Contracts
3. Quasi-contracts
4. Acts or omissions punished by law; and
5. Quasi-delicts


BAR LAW FOR DUMMIES

Sa bar exams at law course exams ng kahit na anong subjects (Crim, poli, comm, tax etc)
ang laging tanong ay “Is X liable” or “what are the crime or crimes committed”....it means na babalikan
mo yung Article 1157. Ano ba ang source of liability or obligation?
X inserted his finger to A’s vagina. Is X liable?

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Yes (direct answer). Pero anong source of obligation or liability? Article 1157 (1), the source
of obigation is law. Anong law? Criminal law on Rape - Article 266-A.
X sells his house and lot for P25M. Is the sale taxable? Yes (direct answer). Anong source of
obligation? Law. What law? NIRC.
X borrowed from Y P10thou plus interest of 5% monthy interest. Is X bound to pay Y P10thou
tomorrow? What is the source obligation? Contract. So babasahin mo yung contract kung kelan ang
due. The contract is the law between X and Y. If the contract of that loan is payable 60 days from
today, Y cannot demand payment tomorrow. Can X refuse to pay interest? No. The source is the
contract. Sa contract ay may stipulated interest na 5% interest per month. Can X ask for the reduction
of the interest? Based on the contract, the answer is negative. Hindi pwede. Meron pa bang ibang
source of obligation na favorable kay X for Y to reduce the interest. Yes there is. Based on
jurisprudence, when the the interest is void, magiging 6% per annum (yearly) lang ang interest ng
mga loan. Here, 5% interest per month or 60% interest per annum interest is unconcionable. So X
may refuse to pay the interest at 5% per month. The court will reduce it to 6% per annum.
X was riding a bicycle at nasagasaan niya si Y na naglalaro ng piko sa kalye. Is X liable to

pay for damages. Yes. What is the source of obligation? Quasi-delict.
X left home. Depressed. Pasado sa Civil Law (ito pa lang kasi ang available na BLD as of now)
pero bagsak over-all sa bar. Iniwan niya yung iyong Sari-sari Store without any indication that he
was going back soon. Y, who was his assistant continued managing the business. After a year, naging
mall na yung sari-sari store. Is Y obligated to keep accounting of the business? Yes. What is the
source of the obligation? Quasi-contracts on negotiorum gestio article 2144 to 2153. So, by law
obligated si Y to account for the fruits and capital of the business to X. What about X? Ano naman
ang source of obligation for him to pay wages and management ng kanyang business? By law is labor
code and by equity – unjust enrichment. Dapat may extra-payment siya kay Y for keeping the
business afloat while he was depressed and indispose to handle the business.
So nakita ninyo yung secreto ng subject? Anong source ng obligation? Titingin ka sa Article
1157. Pag nandun ang source of obligation, then the person aggrieved has cause of action dahil the
obligation is a juridical necessity to give, to do or not to do.
Art. 1156. An obigation is a juridical necessity to give, to do or not to do.
That is the reason why the framers of the Civil Code ay hindi law and acts ang nilagay nila
na sources. For our convenience, hinimay-himay na nila para madali nating maintindihan ang mga
sources of obligation which are ff:


BAR LAW FOR DUMMIES

Law – quasi delict, quasi contracts, acts or omission punishable by law and quasi-delicts
Acts – contracts, quasi contracts not covered by law, equity (mababasa ito sa jurisprudence)
By now, madali na ninyong maiintindihan ang Obligation kahit codal na lang basahin ninyo. Page | 8
Just always ask yourself whenever confronted ng isang tanong. Ano ang source ng obligation for
damages may be awarded? Titignan mo lang ang Article 1157 and look for the particular law or
particular stipulation in the contract. If you found it in one of the stipulations in the contract, the
next question is “Is the stipulation valid?”.... ayan... hahanap ka uli ng basis sa law to invalidate that
stipulation or set aside the contract, and apply the available remedy for the aggrieved party like
recission or annulment of contracts plus damages. Hoy, tandaan mo the remedy available lang under
the Civil Code is either specific performance plus damages or rescission plus damages.
Ok, for now let us discuss the provisions in the Civil Code.
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Obligation, concept
An obligation is a juridical necessity to give, to do or not do. (Art. 1156, Civil Code of the
Philippines) Juridical necessity that the court may be asked to order the performance of an obligation
if the debtor refuses to perform it. If an obligation cannot be enforced through the courts, it may be
disregarded with impunity.
Requisites of obligation
1. Active subject (creditor or obligee) – The party who has the right to demand performance of
the obligation.
2. Passive subject (debtor or obligor) – The party who is obliged to perform the obligation.
3. Prestation – The object or subject matter of the obligation. it may consist of giving, doing or
not doing something.
4. Efficient cause – The vinculum or the legal or juridical tie which binds the parties to an
obligation. The efficient cause of an obligation may be any any of the five sources of obligation.
Examples
1) A secured from B a loan of P50,000 with interest at 12% per annum payable on December
30, 2020 pursuant to a contract of loan.
 A is the passive subject
 B is the active subject
 The act of giving P50thou plus 12% interest per annum on December 30, 2020 is the
prestation
 The contract of loan is the efficient cause
2) A is obliged to transport goods of B from Manila to Cebu, and B is obliged to pay A P10,000
as transport costs, under a contract of carriage.


BAR LAW FOR DUMMIES

As regards to the prestation to transport the goods from Manila to Cebu

A is the passive subject
B is the active subject
Contract of Carriage is the efficient cause
As regards to the prestation to pay the transport costs; Page | 9
A is the active subject
B is the passive subject
Contract of Carriage is the efficient cause
Civil obligation and natural obligation distinguished
A civil obligation (as defined in Art, 1156) is based on positive law; hence, it is enforceable by
court action. A natural obligation, on the other hand, is based on natural law; hence, it is not
enforceable by court action. The obligation, however, exists in equity and moral justice, such that if
the debtor voluntarily performs it, he can no longer recover what he has given.
X made a promissory note with Y as payee for P10,000 payable today. Hanggang kelan
pwedeng maningil si Y? From now to 10 years thereafter. The prescription to enforce a written contract
in 10 years. If Y did not make “singil” X, after 10 years hindi na siya pwedeng maningil. Y’s right to
file a court action has already prescribed. But, under natural law, x is still indebted to Y for P10thou.
If after 10 years, X paid Y, and then he had a change of mind to get it back dahil prescribed na naman
na utang niya, X cannot get back what he has paid for. He cannot go to court to file recovery of
payment because under natural law he is still indebted to Y.
But let say X executed a promissory note admitting the loan 10 years ago. Yung new
promissory note will stand as an admission of the loan at na-revived ang old loan with the issuance
of the new one.
What are the sources of obligation?
So, uulitin natin yung Article 1157.
 LAW – rule of conduct, just and obligatory, laid down by legitimate authority for common
observance and benefit. (Sanchez Roman). Obligations derived from law are not presumed.
Only those expressly determined in the Civil Code or in special laws are demandable, and
shall be regulated by the precepts of the law which establishes them; and as to what has not
been foreseen, by the provisions on Obligations. (Art 1158)
X and Y have a contract or agreement. The stipulations in the contract/agreement

are the law between them. Ano ang limitations? The stipulations must not be
contrary to law, morals, good customs, public order or public policy (Art. 1306).
X was a doctor and contacted by Y to attend to an unconscious child who happened

to be passing the house of Y when suddenly struck by lightning. The child survived


BAR LAW FOR DUMMIES

and X asked for his professional fee. Who is liable to pay for the services rendered by
X. Was it Y or the parents of the child? So here, magbabanggaan ang contract
(agreement) and the law on support under the Family Code. Sino mananalo? Syempre
yung law. The parents are liable under the Family Code. Yung agreement between X
and Y can be set-aside.
Page | 10
If out of the good heart ni Y at binyaran niya si X, Y has the right of action for
reimbursement against the parents of the child. Ultimately, it is the parents who are
liable.
Law is not presumed. X is the guard in a pawnshop. In an occasion of robbery, X

wounded a pedestrian who happened to be near to the place where the guard and
the robbers exchanged gun shots. X paid for the hospitalization of the pedestrian and
asked for reimbursement from his employer. Who is liable for the hospital expenses?
The ultimate liable are the robbers. X can direct his action against the robbers. If the
robbers did not pay, X can go after the family of the pedestrian for reimbursement
under the Family Code. If walang pambayad ang mga robbers and family, X cannot
go after his employer kasi hindi naman legally obligated yung employer to pay for the
hospitalization ng wounded pedestrian – walang source of obligation under Article
1157.
The law is not presumed. Maghahanap dapat si X ng batas na nagsasaad na ang

employer ay liable for any damages incurred during the circumstances of robbery. If
walang law, walang liability. Hindi pwedeng i-assume ni X na dahil empleyado siya,
dapat sagutin ang lahat ng damages he may cause sa pagtatanggol ng kumpanya.
So ang laging tanong ay “ano ang source ng obligation para magkaroon ng liablity?”
 Contracts – A contract is a meeting of minds between two persons whereby one binds himself,
with respect to the other, to give something or to render some service (Art. 1305).
Art. 1159. Obligations arising from contracts have the force of law between the contracting
parties and should be complied with in good faith.
o Article expresses the principle of autonomy of will. It presupposes, however, that the
contract is valid and enforceable. The terms of the contract should, therefore, not be
contrary to law, morals, good customs, public policy, or public order. If the contract
does not violate any of these limitations, it should be given effect, notwithstanding
the absence of any legal provision at the time it was entered into which governs it.
o The falsification of a contract by the unauthorized insertion of additional stipulations

does not avoid the whole contract, which must still be enforced, disregarding only
the additional stipulations.


BAR LAW FOR DUMMIES

o Can damages suffered by a party during the period of negotiations be recovered, if
the contract is not finally perfected?
o When an offer is made, the offeree may incur expenses for trips, inspections,
testing, plans, technical opinions, etc., and such expenses would be a total
loss if the offeror suddenly withdraws his offer. The prevailing view among Page | 11
writers admits the possibility of pre-contractual obligations in such cases.
The offer, however, must be clear and definite, thus leading the offeree in
good faith to incur expenses in the expectation of entering into the contract;
and the withdrawal of the offer must be without any legitimate caused. If the
offeror, in so acting, is guilty of fault or negligence, his liability would be
based an article 2176 (quasi-delicts). But if there is no fault or negligence,
and the withdrawal was in abuse of right, then the basis of his liability would
be article 19.
X offered a 10-hectare land for sale to Y who accepted the offer. Y hired a
geodetic engineer to visit and to plot the area if it really is adjacent to his
farm. Afterwards, Y informed X that he is willing to buy the land at the
stipulated price. The latter, without any valid reason, refuse to sell the
property. He, therefore, is liable to pay the cost for visiting and plotting of
the land under Article 19.
In the same example, X sold the land to a third person. X is guilty of fault,
his liability would be based on quasi-delict.
--------xxxx--------
Art. 1159. Obligations arising from contracts have the force of law between the contracting
parties and should be complied with in good faith.
Ano lang ang limitation for the enforceability of the contract? Article 1306.
Art. 1306. The contracting parties may establish such stipulations, clauses, terms and
conditions as they may deem convenient, provided they are not contrary to law, morals, good
customs, public order, or public policy.
X sold his car to Y for P200,000 to be delivered in a week to the residence of the buyer. X has
the obligation to deliver the car to the residence of the Y in a week.
X sold his friend’s car to Y. The contract of sale is valid. X has to deliver the car to Y. If X
failed to deliver the car to Y, X shall be liable for damages.
(Is there a law prohibiting you to sell your neighbor’s house? None. Kaya pwede mong ibenta
ang mga houses and lots sa subdivision ninyo. Ang problema ay ang delivery. You cannot
deliver the house unless you have an authority from the owner)


BAR LAW FOR DUMMIES

(Is the sale void? No. The sale is only unenforceable (Art. 1403) na pwedeng i-ratify ng
neighbor mo. Let say you were able to sell the house for P20M at tinanggap ni neighbor ang
pera – the then unenforceable contract of sale is now ratified)
X mortgaged his friend’s car to Y. The contract of mortgage is void. Under the law, the
mortgagor must be the absolute owner and has the free disposal of the thing to mortgage Page | 12
(Art. 2085).
---------xxx----------
 QUASI-CONTRACTS – They refer to certain lawful, voluntary and unilateral acts giving rise
to a juridical relation to the end that no one shall be unjustly enriched at the expense of
another (Art. 2142). There is unjust enrichment “when a person unjustly retains a benefit to
the loss of another, or when a person retains money or property of another against the
fundamental principles of justice, equity and good conscience.” (Locsin II vs. Mekeni Food
Corporation, G.R. No. 192105, December 9, 2013; Loria vs. Munoz, G.R. No. 187240, October
15, 2014).
The act giving rise to quasi-contract must be lawful, thereby distinguishing it from
crime in which the act or omission is unlawful; it must be voluntary, thus differentiating it
from quasi-delict, which is based on fault or negligence or mere lack of foresight; and it must
be unilateral, to distinguish it from contract in which there are two parties who come to an
agreement.
Quasi – contracts. Tinawag yan na quasi dahil walang meeting of minds. Let say yung
manok mo ay laging natutulog sa bubong ko. Eh gutum ako...gusto kong gawing tinola. Pag
niluto ko yun..i will be liable criminally. So kailangan magpa-alam ako sa iyo, at magkaroon
tayo ng agreement (contract) na pag niluto ko yun – bibigyan kita ng ulam kasi sagot ko na
yung rekado. Paano nagiging quasi-contract. Ganito yun. Let say wala ka at nagbabakasyon.
Nakita ko yung manok mo at may sipon...at tingin ko may sakit. Ginamot ko on my own
volition. O di ba hindi naman ako nagpaalam sa iyo pero you have to pay me sa mga gamot
na binili ko para gumaling yung manok mo. You are liable to pay me for the necessary
expenses based on QUASI-CONTRACT.
Let say dahil na naiingayan ako sa manok mo. Hinuli ko at in the pretext na
gagamutin ko dahil may sipon – pinakain ko ng lason. That is not qausi-contract – that is a
crime. I am obligated to pay you damages based ON LAW.
Let say dahil may sipon ang manok mo – Nilagay ko sa sako at pinausukan ko ng 30
minutes because I thought nakakagaling ang usok. Kaso the chick died. That is not quasi-
contract – that is quasi-delict. The death s caused by lack of foresight. I am liable to pay you
damages based on QUASI-DELICT.
Let say pumayag ka na gamutin ko yung manok mo. So may agreement na tayo. We
have a relationship. Kaso pareho tayong tanga na pag-ginilitan pala manok
namamatay…hahahaha. I am liable based on CONTRACT (agreement).


BAR LAW FOR DUMMIES

Hahaha tinola na lang natin si sarimanok at nagugutum na rin ako hahahahaha
These are simple examples para hindi ninyo malimutan.
o Negotiorum gestio – Art. 2144. Whoever voluntarily takes charge of the agency or
management of the business or property of another, without any power from the latter, Page | 13
is obliged to continue the same until the termination of the affair and its incidents, or
to require the person concerned to substitute him, if the owner is in a position to do so.
This juridical relation does not arise in either of these instances:
(1) When the property or business is not neglected or abandoned;

(2) If in fact the manager has been tacitly authorized by the owner.
X and Y are owners of piggery farm. One day Y was not able to tend the farm due to
pneumonia. When X noticed that the pigs needed to be fed, he himself bought extra
feeds and take good care of them. When one of the pigs got sick, he called on a vet to
have them immunized. Y incurred necessary and useful expenses in the process. X
must reimbursed Y for such expenses. Otherwise, he will be unjustly himself at Y’s
expense.
Hindi pwedeng maging katwiran ni X na hindi naman niya sinabi na alagaan ang
mga baboy niya while he was away.
Art. 2150. Although the officious management may not have been expressly ratified,
the owner of the property or business who enjoys the advantages of the same shall be
liable for obligations incurred in his interest, and shall reimburse the officious manager
for the necessary and useful expenses and for the damages which the latter may have
suffered in the performance of his duties.
The same obligation shall be incumbent upon him when the management had for its
purpose the prevention of an imminent and manifest loss, although no benefit may
have been derived.
Let say Y had to gather all the pigs to a safe place due to an incoming storm. Nilagay
niya sa farm niya ang mga baboy ni X and consequently, some of the plants where
trampled. X must pay for the damages.
o Solution indebiti – Article 2154-2163
Art. 2154. If something is received when there is no right to demand it, and it was
unduly delivered through mistake, the obligation to return it arises.
Simpleng-simple. Sobrang sukli na binigay sa iyo ng tindera. Dapat mong isauli.
Sobrang bill ng meralco. Dapat isauli.


BAR LAW FOR DUMMIES

X had a loan payable next month. X thought it is due today, and paid it. He may
recover the undue payment (Art 2156).
Y accepted X payment knowing that it was not yet due, and he did not inform X about
it. He must return it with legal interest. If it was a thing, let say a cellphone, Y is also Page | 14
liable for any loss or impairment. If in good faith si Y, he shall not be liable for interest
if it was money, or to any loss or impairment if the it was a thing except when he
used it for his own benefit. Let say, ginamit niya yung cellphone, then, nasira screen.
He must restore it. Kung naibenta na niya, he must reimburse the price to the person
who delivered the cellphone or assign the right to collect (Art. 2159-60).
UST Cooperative vs. City of Manila L-17133, December 31,1965
UST Cooperative paid municipal taxes and license fees to the city government
unaware that under a new law it was exempt “from all taxes and government fees”
Later, it learned of its exemption and sought to recover from the city government the
taxes it had paid to the latter. The city government refused to refund said taxes.
UST Cooperative can recover such taxes from the city government which has a duty
to return what has been paid by mistake under the principle of solution indebiti
Commissioner of Internal Revenue vs. Fortune Tobacco Corporation G.R.

No.167274-75, July 21,2008
The Government is not exempt from the application of solution indebiti. Indeed, the
taxpayer expects fair dealing from the Government, and the latter has the duty to
refund without any unreasonable delay what it has erroneously collected. If the State
expects its taxpayers to observe fairness and honesty in paying taxes, it must hold
itself against the same standard in refunding excess (or erroneous) payments of such
taxes. It should not unjustly enrich itself at the expense of the taxpayers, x x x Under
the Tax Code itself, apparently in recognition of the pervasive quasi-contract
principle, a claim for tax refund may be based on the following; (a) erroneously or
illegally assessed or ‘collected internal revenue taxes; (b) penalties imposed without
authority; and (c) any sum alleged to have been excessive or in any manner
wrongfully collected.
o Other Quasi-contracts
Article 2164 to 2175 are self-explanatory.
 Acts or omissions punishable by law – These are crimes or felonies. The commission of a
crime makes the offender civilly liable. (Art. 100, Revised Penal Code.) Such liability includes
restitution, reparation of the damage caused, and indemnification of consequential damages.
(Art. 104, R.P.C.)


BAR LAW FOR DUMMIES

o Under article 100 of the Revised Penal Code, “every person criminally liable for a
felony is also civilly liable.”
o The plain inference from this provision is that the civil liability springs out of and is
dependent upon facts which, if true, would constitute a crime.
o Such civil liability is a necessary consequence of criminal responsibility, and is to be
declared and enforced in the criminal proceeding except where the in cases where an Page | 15
independent civil action is allowed by the law.
o Under article 12 of the Revised Penal Code, the following persons are exempt from
criminal liability, even if they have committed acts which constitute a crime: (1) An
imbecile or an insane person, unless the latter has acted during a lucid interval; (2)
A person under 15 years of age; (3) A person over 15 years of age and under 18,
unless he has acted with discernment; (4) Any person who acts under the compulsion
of an irresistible force; and (5) Any person who acts under the impulse of an
uncontrollable fear of an equal or greater injury. (Parag 2 and 3 as amended by Sec
6 of RA 9344).
o Art. 104. What is included in civil liability.—The civil liability established in articles
100,101,102, and 103, of this (Penal) Code includes:
 Restitution;
 Reparation of the damage caused;
 Indemnification for consequential damages.
X stole Y’s car. Let say it is a simple theft, not carnapping. X is civilly liable by returning the
car (or its value) plus actual damages if may nasira sa kotse plus damages for the anxiety na
naranasan ni X sa pagkawala ng kotse niya. Kaya di ba sa dispositive portion may damages
plus kulong.
Kapag murder, may kaukulang presyo ang buhay ng tao, plus damages plus possible income
ng victim. Kapag rape, may kaukulang presyo rin ang pagkawasak ng puri, plus damages.
Although priceless ang buhay ng tao at ang puri, the law provides for certain amount. As I
recall, pag rape or murder the civil liablity is P100,000 plus damages. Pero alam ko tumaas
na ito. The law is constrained to assign price although we know that life and chastity are
priceless, but for the sake of penalizing the accused, indemnification in the form of money
must be awarded.
o Subsidiary liability for a crime
 In default of the persons criminally liable, innkeepers, tavernkeepers, and

any other persons or corporations shall be civilly liable for crimes committed
in their establishment, in all cases where a violation of municipal ordinances
or some general or special police regulation shall have been committed by
them or their employees.
Sa St. Lukes Hospital may mga deposit boxes that you can avail of to deposit
your valuable items like cell phones, money etc. Kasi nga madalas ang


BAR LAW FOR DUMMIES

nakawan sa rooms ng hospital. If one of its employees stole your items, St.
Lukes shall be obliged to pay for the value of the item plus damages.
 Innkeepers are also subsidiarily liable for the restitution of goods taken by
robbery or theft within their houses from guests lodging therein, or for the
payment of the value thereof, provided that such guests shall have notified Page | 16
in advance the innkeeper himself, or the person representing him, of the
deposit of such goods within the inn; and shall furthermore have followed
the directions which such innkeeper or his representative may have given
them with respect to the care of and vigilance over such goods. No liability
shall attach in case of robbery with violence against or intimidation of
persons unless committed by the innkeeper’s employees.
Nag-SOGO ka hahahahaa...dapat lahat ng items mo ay well accounted for at

sabihin mo sa inn-keeper para maging liable sila in cases of robbery. Wag
masyadong mainit hahahaha...pero maiisip mo pa ba yun
hahahahahahha..eh pang short time ka lang naman...hahahahhaha
 The subsidiaiy liability established above also applies to employers, teachers,

persons, and corporations engaged in any kind of industry for felonies
committed by their servants, pupils, workmen, apprentices, or employees in
the discharge of their duties. (We will discuss this pag-dating natin sa
subject na quasi-delict or torts sa BLD TORTS)
o To hold employers subsidiarily liable for the crime of an employee, however, it must
be committed in the performance of the functions or duties of the employee.
X, a teacher, during a parent-teacher conference ay naka-murahan niya si Y

(a parent). Nagtalo sila sa isang issue at lumala ng lumala ang usapan.
Umabot hanggang sa kung sinong lahi ang mas mayaman at walang bahid
dungis hahahahahaha...Ay yun na nga – nagkasampalan hahahaha...The
employer of X is not subsidiary liable.
o Criminal and civil actions arising from the same offense may be instituted separately,
but after the criminal action has been commenced the civil action cannot be
instituted until final judgment has been rendered in. The criminal action, except
when an independent civil action is allowed by the law (Art. 31-34 of the Civil Code).
Let say X robbed Y. X should told the court to reserve the civil aspect of the criminal
case or he can file ahead of time a civil action before the police can file the criminal
action. If there was no reservation, X cannot file a separate civil action.
ORBETA vs. SOTTO, 58 PhiL 506: Orbeta was convicted in the Court of First
Instance of arson, and in addition to the sentence was ordered to indemnify the
offended party, Sotto, in the sum of P40.000. Orbeta appealed to the Supreme Court.


BAR LAW FOR DUMMIES

Pending the appeal in the criminal case, Sotto filed a civil action in the Court of First
Instance to recover P40,000 as value of the property burned, based on the same acts
which formed the basis of the criminal prosecution, and secured an attachment of
the properties of Orbeta. Was the attachment valid? HELD: The civil liability of Orbeta
to Sotto will be decided in the criminal proceedings. Civil proceedings instituted
separately while a criminal action is pending, when there has been no reservation of Page | 17
a separate civil action, are without force and effect. An attachment issued in the
course of Buch an improper proceeding must be vacated.
 Quasi-delicts (also known as “tort” or “culpa aquiliana) – These are acts or omissions that
cause damage to another, there being fault or negligence but without any preexisting
contractual relation between the parties. (Art. 2176) (See Equitable Banking Corporation vs.
Special Steel Products, Inc., G.R. No. 175350, June 3, 2012.) For a quasi-delict case to
prosper, the complainant must establish:
(a) damages to the complainant;

(b) negligence, by act or omission of the defendant or by some person for whose act the
defendant must respond, was guilty; and
(c) the connection of cause and effect between such negligence and damages.
With respect to the third element, the negligent act or omission must be the proximate
cause of the injury. (Josefa vs. Meralco, G.R. No. 182705, July 18,2014)
Kung maglakad ka ay para kang karetelang dumadaan sa lubak-lubak na kalsada,

kaya lahat ng lalaki napapalingon sa iyo. Si X nagbabatak (driving) ng motor niya,
nabangga niya si Y. Yung parehong ugok ay nakatingin sa bewang mong luma-lava
walk. Sino may kasalanan (proximate cause) sa pagkakabundol ni Y?
Si Y ba na hindi nakatingin sa kalsada?

Si X ba na hindi nakatingin sa mga natawid?
O ikaw na kumekendeng?
Ang proximate cause of the accident ay yung pagkakabundol ng motorbike kay Y na

minamaneho ni X. Yung negligent driving ni X ang proximate cause at hindi ang bewang
mo. Hence, X is liable to pay damages under quasi-delict.
o If a person, while cleaning his window, causes a flower pot to fall through his
negligence thereby injuring someone passing by, the former is liable for damages to
the latter.
National Power Corporation vs. Heirs of Noble Casionan G.R. No. 165969, November
27,2008
Casionan was traversing the trail underneath the transmission lines of the National
Power Corporation (NPC) when he was electrocuted. The high tension wires were sagging


BAR LAW FOR DUMMIES

around 8 to 10 feet in violation of the required distance of 18 to 20 feet. His heirs brought
a claim for damages against NPC for his death. In its defense, NPC claimed that Casionan
was negligent because he was carrying a bamboo pole when he was electrocuted, and
that he was not supposed to be around the area working as pocket miner since the
Department of Environment and Natural Resources had not issued permit to operate at
such place; hence, any award for damages should be mitigated by reason of the victim’s Page | 18
contributory negligence.
NPC is liable for damages arising from negligence. The sagging high tensions wires were
an accident waiting to happen. If they were properly maintained by NPC, the bamboo pole
which Casionan was carrying would not have touched the wires. That the pocket miners
in the area were unlicensed was not a justification for NPC to leave the transmission
line’s dangling. The pocket miners in the area, although they have ho permit to do so, are
also human beings who have to eke out a living in the only way they know how. The
victim should not therefore be faulted for simply doing what was ordinary routine to other
workers in the area. The trail was only the viable way that was regularly used by the
residents in the community. In sum, the victim was not guilty of contributory negligence;
hence, NPC is not entitled to a mitigation of its liability for damages.
(may separate subject ang torts – we will discuss more about it sa BLD TORTS)
What are the provisions asked in the bar?
Take note that only Article 1157 and 1159 in relation to Article 19 ang mga tinanong sa bar
exams.
-----------BAR QUESTIONS--------
2018 BAR EXAMS
IX. Newlyweds Sam and Sienna had contracted with Sangria Hotel for their wedding reception. The
couple was so unhappy with the service, claiming, among other things, that there was an
unreasonable delay in the service of dinner and that certain items promised were unavailable. The
hotel claimed that, while there was a delay in the service of the meals, the same was occasioned by
the sudden increase of guests to 450 from the guaranteed expected number of 350, as stated in the
Banquet and Meeting Services Contract. In the action for damages for breach of contract instituted
by the couple, they claimed that the Banquet and Meeting Services Contract was a contract of
adhesion since they only provided the number of guests and chose the menu. On the other hand, the
hotel’s defense was that the proximate cause of the complainant’s injury was the unexpected increase
in their guests, and this was what set the chain of events that resulted in the alleged inconveniences.
Does the doctrine of proximate cause apply in this case?
No, the doctrine does not apply. In the case of Spouses Guanio v. Makati Shangri-la Hotel (G.R. Nso.
190601, September 7, 2011), the doctrine of proximate cause, was made applicable only in actions
for quasia delicts not in actions involving breach of contract. The doctrine is a device for imputing
liability to a person where there is no relation between him and another party. Where, however, there


BAR LAW FOR DUMMIES

is a pre-existing contractual relation between the parties, it is the parties themselves who make the
law between them.
Here, there is a contract; the terms and conditions of such contract will govern the rights and
obligations between the contracting parties in case of breach thereof, not the doctrine of proximate
cause. Page | 19
Was the Banquet and Meeting Services Contract a contact of adhesion? If yes, is the contract void?
Yes, it is a contract of adhesion, but the same is not void. A contract of adhesion is defined as one in
which one of the parties imposes a ready-made form of contract, which the other party may accept or
reject, but which the latter cannot modify. Here, the contract is ready-made by Shangrila, as the
spouses only chose the menu and provided the number of guests but they cannot modify the terms
thereof; hence, a contract of adhesion. Although a contract of adhesion, it is not entirely against the
law and is as binding as ordinary contracts, the reason being that the party who adheres to the
contract is free to reject it entirely, but the effect, as ruled in Orient Air v. CA G.R. No. 76931, May
29,1991), is that in case of ambiguity it is construed against the party who caused it to be drafted
and could have avoided it by the exercise of a little more care. – UPLC Answer
XII. Saachi opened a savings bank account with Shanghainese Bank. He made an initial deposit of
PhP 100,000. Part of the bank opening forms that he was required to sign when he opened the account
was a Holdout Agreement which provided that should he incur any liability or obligation to the bank,
the bank shall have the right to immediately and automatically take over his savings account deposit.
After he opened his deposit account, the Shanghainese Bank discovered a scam wherein the fund in
the account of another depositor in the bank was withdrawn by an impostor. Shanghainese Bank
suspected Saachi to be the impostor, and filed a criminal case of estafa against him. While the case
was still pending with the Prosecutor’s office, the bank took over Saachi’s savings deposit on the basis
of the Holdout Agreement.
(a) What kind of contract is created when a depositor opens a deposit account with a bank?
A Contract of simple loan is created when a depositor opens a deposit account with a bank. Fixed,
savings and current deposits of money in banks and similar institutions shall be governed by the
provisions concerning simple loan (Article 1980, Civil Code). The creditor is the depositor, while the
debtor is the bank. – UPLC Answer
(b) In this case, did the bank have the right to take over Saachi’s bank deposit?
No, the bank did not have the right to take over Saachi’s bank deposit. In the case ot Metropolitan
Bank & Trust Co. v. Rosales (G.R. No. 183204, January 13,2014), it was held that the “Hold Out”
clause, which was similar to the Holdout Agreement in the instant case, can be invoked only if there
was a valid and existing obligation arising from any of the sources of obligation enumerated in Article
1157 of the Civil Code, to wit: law, contracts, quasi-contracts, delict, and quasi- delict. The only
possible source of obligation of Saachi to Shanghainese Bank based on the given facts is delict. As
the criminal case filed by the bank against Saachi was still pending and no final judgment of


BAR LAW FOR DUMMIES

conviction had been rendered, Saachi had no valid and existing obligation to the bank; thus, the bank
had no right to take over the deposits of Saachi. – UPLC Answer
XVIII. Shasha purchased an airline ticket from Sea Airlines (SAL) covering Manila-Bangkok-Hanoi-
Manila. The ticket was exclusively endorsable to Siam Airlines (SMA). The contract of air
transportation was between Shasha and SAL, with the latter endorsing to SMA the Hanoi-Manila Page | 20
segment of the journey. All her flights were confirmed by SAL before she left Manila. Shasha took the
flight from Manila to Bangkok on board SAL using the ticket. When she arrived in Bangkok, she went
to the SAL ticket counter and confined her return trip from Hanoi to Manila on board SMA Flight No.
SA 888. On the date of her return trip, she checked in for SMA Flight No. SA 888, boarded the plane,
and before she could even settle in on her assigned seat, she was off-loaded and treated rudely by the
crew. She lost her luggage and missed an important business meeting. She thereafter filed a
complaint solely against SAL and argued that it was solidarily liable with SMA for the damages she
suffered since the latter was only an agent of the former.
(a) Should either, or both, SAL and SMA be held liable for damages that Shasha suffered?
As the principal in the contract of carriage, the petitioner (SAL) was held liable even when the breach
of contract had occurred not on its own flight, but on that of another airline. It also cited Lufthansa
German Airlines vs. Court of Appeals (G.R. No. 83612, November 24, 1994), in which the Court held
that the obligation of the ticket-issuing airline remained and did not cease regardless of the fact that
another airline had undertaken to carry the passengers to one of their destinations. – UPLC Answer
(Take note of the ruling. When your flight was endorsed to another airline, the liability under the
contract of carriage continues. Applicable ang principle let say nasira yung bus you are boarding,
isinalin kayo sa ibang bus owed by different company. In this case, both bus companies can be sued
in alternative kasi the Philippine court has jurisdiction over the two bus companies. Unlike in cases
involving airlines, maaring yung local airlines lang idemanda because our court may not have
jurisdiction over the foreign airline company.)
In this case, since the contract of air transportation is between Shasha and SAL, the latter as principal
remains liable as the principal despite the fact that the breach occurred in SMA. SMA cannot be held
liable in this case, because the court has no jurisdiction over it. It is imperative and in accordance
with due process and fair play that SMA should have been impleaded as a party in the present
proceedings before this Court can make a final ruling on this matter. – UPLC Answer
ALTERNATIVE ANSWER
SAL and SMA may be held solidarity liable to Shasha. SAL is liable to Shasha for breach of the
contract of carriage, because it failed to bring Shasha to the latter’s destination as agreed upon in the
contract. SAM, on the other hand, is liable to Shasha for tort under the provisions of Article 2176, in
relation to Article 2180 of the Civil Code. While SAM is an independent contractor, and not an agent
of SAL, both SAL and SAM are solidarity liable to Shasha, because a contractual obligation can be
breached by tort and when the same act or omission causes the injury, one resulting in culpa
contractual and the other in culpa aquiliana, article 2194 of the Civil Code can well apply. In fine, a


BAR LAW FOR DUMMIES

liability for tort may arise even under a contract, where tort is that which breaches the contract.
Stated differently, when an act which constitutes a breach of contract would have itself constituted
the source of a quasi-delictual liability had no contract existed between the parties, the contract can
be said to have been breached by tort, thereby allowing the rules on tort to apply (LRTA v. Navidad,
G.R. No. 145804, February 6, 2003) – UPLC Answer
Page | 21
(A board XYZ bus from Manila to Baguio. Pag dating sa Bulacan, pinatayo siya at naka-reserve na
pala yung seat niya to another passenger. Well, nakarating naman siya sa Baguio after three hours
na nakatayo. May breach ba sa contract of carriage? Yes. Dahil dapat naka-upo siya. Pero pinatayo
siya na conductor di ba? Ano pang liablity ng bus company? Well, the bus company is liable also
under Tort. Yan yung ibig sabihin ng ruling “a liability for tort may arise even under a contract, where
tort is that which breaches the contract”.)
2013 BAR EXAMS

VI.1. Gary is a tobacco trader and also a lending investor. He sold tobacco leaves to Homer for delivery
within a month, although the period for delivery was not guaranteed. Despite Gary’s efforts to deliver
on time, transportation problems and government red tape hindered his efforts and he could only
deliver after 30 days. Homer refused to accept the late delivery and to pay on the ground that the
agreed term had not been complied with. As lending investor, Gary granted a P1,000,000.00 loan to
Isaac to be paid within two years from execution of the contract. As security for the loan, Isaac
promised to deliver to Gary his Toyota Innova within seven days, but Isaac failed to do so. Gary was
thus compeled to demand payment for the loan before the end of the agreed two-year term.
Was Homer justified in refusing to accept the tobacco leaves?
No. Under Article 1159 of the Civil Code, obligations arising from contract have the force of
the law between the contracting parties and should be complied in good faith. Here, there was an
agreement between the Gary and Homer that the delivery of tobacco leaves within a month is not
guarateed. Gary anticipated that some factors such as transportation problems and government
redtape may delay the delivery. Homer agreed and consented with the terms and conditions of the
contract. Hence, he is bound and must comply in good faith.
1998 BAR EXAMS

X. In a 20-year lease contract over a building, the lessee is expressly granted a right of first
refusal should the lessor decide to sell both the land and building. However, the lessor sold the
property to a third person who knew about the lease in fact agreed to respect it. Consequently, the
lessee brings an action against both the lessor-seller and the buyer (a) to rescind the sale and (b) to
compel specific performance of his right of first refusal in the sense that the lessor should ordered to
execute a deed of absolute sale in favor of the lessee at the same price. The defendants contend that
the plaintiff can neither seek rescission of the sale nor compel specific performance of a “mere” right
of first refusal. Decide the case.
The action filed by the lessee, for both rescission of the offending sale and specific performance of the
right of first refusal which was violated, should prosper. The ruling fn Equatorial Realty Development,
Inc. Vs. Mayfair Theater, Inc. (264 SCRA 483). A case with similar facts, sustains both rights of action


BAR LAW FOR DUMMIES

because the buyer in the subsequent sale knew the existence of right of first refusal, hence in bad
faith.
(This is an alternative answer under UPLC)
The action to rescind the sale shall not prosper. The principle of right of first refusal is not
founded on contracts but on a quasi-delictual relationship covered by the principles of human Page | 22
relations and unjust enrichment. Under Art 19 of the Civil Code, every person in the exercise of his
rights must give everyone his due. Here, the lessor did not give due regard to the right of the lessee
when it sold the building which the latter is renting notwithstanding the provision of the “right of
refusal” in the contract. Hence, the lessor is liable for damages under quasi-delict. – UPLC Answer
Note: The right of right refusal is not contractual kahit nasa sitpulation ng contract. The violation of that
stipulation is a tortious act under qausi-delict. Hence, the proper action is not recission of the sale but
an action for damages.
Lecture
Ok makinig this is important. Napansin ninyo sa bar question above that the right of first
refusal ay one of the stipulations of the contract of lease. It means that the lessor has a duty to FIRST
sell the property to the lessee, and if the latter REFUSED to buy it, then saka pa lang pwedeng ibenta
ni lessor sa third party ang property.
If the lessor sold it to the third party without the knowledge of the lessee, the proper action
is not rescission of the sale but an action for damages under quasi-delict. Bakit ganoon? Di ba ang
source of obligation ay ang contract? Yes, but you are wrong hahahaha. Kasi the act of violating the
lessee’s right of first refusal is a tortious act. It means there was a right under the LAW that was
abused which is Article 19 of the Civil Code. So kahit na ang violation ay contractual, the act could
be a tortious act. So there, ang obligation to indemnify the lessee is under quasi-delict, not
contractual.
It seems that there is a hierarchy of sources of obligation. If there was a contractual violation,
check mo muna if there is a special law na na-violate din – if there was, then the spource of obligation
is the law. Example – the contract to pay the worker of below minimum wage. Although may contract
of employment – but the source of obligation shall be the Labor Code and its issuances (special law).
If none, check the general law. Article 19 is a general law. The employer in the above example is
abusing his right – so violation din yun ng Art 19. Hence, the soure of violation could be quasi-delict.
If hindi pasok sa law and quasi-delict – saka pa lamang nagiging contract ang source of obligation.
Napansin ninyo that if the stipulation to pay the worker below minimum wage - that
stipulation is voided. Yun lang ang void not the whole contract. So if that was voided, the source of
obligation is the law.
1997 BAR EXAMS

XIV. In two separate documents signed by him, Juan Valentino “obligated” himself each to Maria and
to Perla, thus –


BAR LAW FOR DUMMIES

‘To Maria, my true love, I obligate myself to give you my one and only horse when I
feel like it.’
-and-
To Perla, my true sweetheart, I obligate myself to pay you the P500.00, I owe you
when I feel like it.” Page | 23
Months passed but Juan never bothered to make good fris promises. Maria and Perla came
to consult you on whether or not they could recover on the basis of the foregoing settings.
I would advise Maria not to bother running after Juan for the latter to make good his promise.
This ts because a promise is not an actionable wrong that allows a party to recover especially
when she has not suffered damages resulting from such promise. A promise does not create an
obligation on the part of Juan because it is not something which arises from a contract, law,
quasi-contracts or quasi-delicts (Art. 1157)]. Under Art. 1182, Juan’s promise to Maria is void
because a conditional obligation depends upon the sole will of the obligor.
As regards Perla, the document is an express acknowledgment of a debt, and the promise to
pay what he owes her when he feels like it is equivalent to a promise to pay when his means
permits him to do so. And is deemed to be one with an indefinite period under Art. 1180. Hence
the amount is recoverable after Perla asks the court to set the period as provided by Art. 1197,
par. 2. – UPLC ANSWER
1991 BAR EXAMS

IX. Roland, a basketball star, was under contract for one year to play-for-play exclusively for Lady
Love, Inc. However, even before the basketball season could open, he was offered a more attractive
pay plus fringes benefits by Sweet Taste, Inc. Roland accepted the offer and transferred to Sweet
Taste. Lady Love sues Roland and Sweet Taste for breach of contract. Defendants claim that the
restriction to play for Lady Love alone is void, hence, unenforceable, as it constitutes an undue
interference with the right of Roland to enter into contracts and the impairment of his freedom to play
and enjoy basketball.
Can Roland be bound by the contract he entered into with Lady Love or can he disregard the same?
Is he liable at all? How about Sweet Taste? Is it liable to Lady Love?
Yes. Under Article 1159 of the Civil Code, obligations arising from contracts have the force of
law between the contracting parties and should be complied with in good faith. Here, Roland was
under contract for one year to play exclusively for Lady Love, Inc., and while that contract was still
in force, he entered into another contract with Sweet Taste and transferred. Hence, Roland is liable
under the contract as far as Lady Love is concerned under Article 1170 which provides liablity to pay
damages for those who contravene the tenor of the contract.
For the second question, and assuming that Sweet Taste is aware of the existing contract
between Roland and Lady Love, they can be held liable under quasi-delict under Article 1314 which
provides that any third person who induces another to violate his contract shall be liable for damages
to the other contracting party.


BAR LAW FOR DUMMIES

NATURE AND EFFECTS OF OBLIGATION

(Article 1163 to 1178)
Art 1163. Every person obliged to give something is also obliged to take care of it with the proper
diligence of a good father of a family, unless the law or the stipulation of the parties requires another Page | 24
standard of care.
To give or to deliver – iisa yun. I bought one kilo of rice. Saan mo ibubuhos, sa palad ko? Eh
di tumapon. Pabili ng Coke – pakilagay sa plastic na may straw. Dapat yung bagong plastic – hindi
yung pinaglagayan ng tilapia or straw na gamit na..
Pagbili ng isang kilong bigas. Pwede na yun sa isang plastic. Eh dalawang kilo? Dapat i-
double bag mo na. – yan yung tinatawag na diligence of a good father. Kung ako bibili at ipapadala
ko sa anak kong 9 years old ang isang kilong bigas – ipapa-double bag ko kahit isang kilo kasi bata
yung bibili. Ilalagay ko pa sa supot at itatali ko pa para kahit bumagsak – hindi tatapon.
Pagbili ng 10 kilong bigas. Aba ang bumibili 9 years old na bata tapos payat pa. Hindi ko
ibibigay. Hoy! Tawagin mo Kuya mong batugan....siya ang kumuha ng bigas. – yan yung diligence of
a good father on the part of the seller.
In all instances above if the seller did not observe proper diligence of good father of a family,
at natapon ang bigas – he is liable to replace it. Pero if naka-double bag na at natapon pa rin – hindi
na siya liable to replace the rice becaause he has already observe the dikigence as required by the
circumstances.
xxxx unless the law or the stipulation of the parties requires another standard of care.
X sends a box of goods to Y via Lbc express. Inter-island ang delivery from Manila to Cebu
tapos tatawid pa ng isla - the point of destination. So mag-eeroplano from Manila to Cebu tapos
isasakay ng barko. Under the law on carriage, LBC is required to observe extra-ordinary diligence in
transporting good kung sa barko ilalagay ang cargo. Kaya LBC will cover the box with plastic sheath
na makapal. Para kahit maampyasan ng alon o umulan – hindi mababasa ang box ni X. Tapos, may-
insurance din yun na in case masira o mawala, the owner of the cargo (X) can be indemnified. That
is part of the extra-ordinary diligence by law.
X sends a cellphone to Y via Lbc Express. Di ba may matigas na kahon n yung cellphone? Y
told X na ilagay pa sa isang box yung cellphone para naka-double box. So the agreement between x
and Y was to double-box the phone – that is the required diligence as stipulated by the parties.
Nang dumating si X sa LBC, the staff required him to buy a plastic lunch box to place therein
the cellphone – that is the required diligence by law (extra-ordinary diligence).
So in the end, the cellphone in its own box is placed inside a lunch box and inside another
box na provided din ng LBC.
If X did not double-box the phone and eventually it got damage, he shall be held liable. The
source of obligation is the contract.
If LBC had not required X to place the cellphone in a lunch box and it got damage in the course
of shipment, LBC shall be held liable for damages. The source of obligation is the law.


BAR LAW FOR DUMMIES

 The obligation to deliver a thing would be illusory if the debtor were not also obliged to
preserve it.
 Preserving the thing, the law requires the debtor to exercise the diligence of a good father of
a family. This is the legal standard or model of diligence, and its meaning is more clearly
expressed in article 1173.
Page | 25
Art. 1173. The fault or negligence of the obligor consists in the omission of that diligence which is
required by the nature of the obligation and corresponds with the circumstances of the persons, of the
time and of the place. When negligence shows bad faith, the provisions of Articles 1171 and 2201,
paragraph 2, shall apply.
If the law or contract does not state the diligence which is to be observed in the performance, that
which is expected of a good father of a family shall be required.
LBC as the person who will deliver the cellphone is an expert in the field of shipping items all
over the Philippines. So, mataas ang standard of diligence ang required sa kanila. The law presumes
na alam ng LBC ang mga perils in delivering cargo inter-islands kaya they cannot faulted the shipper
in case the cargo got destroyed. Sila na mismo ang may obligation according to their circumstances
on how to wrap the boxes, when to ship and how to ship – by land, by air, door to door or to personally
pick up the items sa mga branches nila.
Let say X bought a second hand car from Y to be delivered in a week. If the car got damaged, Y
shall not be held liable if he exercised due diligence of a good father in preserving the car. Alam ni Y
na babagyo at hinayaan niya yung car s labas ng bahay – nabagsakan ng bubong. He should make
necessary repair.
If let say nilagay na niya sa garage, but the wind was really so strong at nilipad ang bubong ng
garage at na-damaged ang car. He cannot be held liable. The cause is a fortuitous event.
In the first case, although fortuitous event ang bagyo but the circumstances was humanized – it
means naiwasan sana ang damage had Y parked the car in the garage.
So according to Article 1173, second paragraph, the diligence of a good father of a family ang
pinaka-mababang requirement of diligence. May mas bababa pa ba? Wala na. Ordinary diligence is
the same as diligence of a good father.
Let say umorder ka sa aking ng BLD Oblicon – loose paper lang ito to keep the cost low. Pag ako
nag pa-ring bind…tataas ang shipping fee. So nilalagay ko sa isang envelop para hindi magusot at sa
plastic pouch para hindi mabasa. But if you want it ring bind and to be wrapped in a box – pwede rin
but you have to pay an extra-cost.
Obligation to preserve the thing to be delivered has its sanction in the liability for damages
imposed upon the debtor who fails to exercise the diligence of a good father of a family in preserving
the thing. But if the failure of the debtor to preserve the thing is due to no fault or negligence of his,
but to fortuitous events or force majeure, he is exempted from responsibility.
BISHOP OF JARO vs. DE LA PENA, 26 Phil. 144: Plaintiff is the trustee of a charitable bequest
made for the construction of a leper hospital, and A. de la Pena was the authorized representative
to receive the legacy. In 1898 De la Pena collected P6,641.50 for such charitable purposes. In the
same year, he deposited in his personal account P19,000 in a bank at Ilo-ilo. Shortly thereafter


BAR LAW FOR DUMMIES

and during the revolution, he was arrested as a political prisoner by the U.S. Army and his deposit
in the Bank was confiscated as funds collected for revolutionary purposes. It was found that the
trust fund of P6,641.50 was a part of the fund deposited which were confiscated.
Is he liable for the loss of money collected for charitable purposes which he deposited in the bank
with his personal funds and which confiscated as funds for revolutionary purposes?
Page | 26
He is not liable, because he was not negligent by depositing the trust fund in the bank and mixing
it with his personal funds, nor did he incur additional responsibility by such deposit. Although
he was obliged to take care of it with the diligence of a good father of a family, yet he should not
be responsible for any unforeseen event, such as the confiscation of such funds during the war.
It is the same as if the money had been forcibly taken from his pocket or from his house by the
military forces, in which case it is clear the he would have been exempted from responsibility.
OBEJERA, ET AL vs IGA SY, 76 Phil. 580: On Dec. 13,1941. Plaintiffs, who are husband and
wife, and defendant sought refuge in the house of Villena, a barrio lieutenant of Dalig, Batangas,
Batangas, on account of the Japanese invasion. When the Japanese were nearing their place,
plaintiffs and defendant hid their things and valuables m a dugout belonging to Villena after
consultation with the latter. In February 1942, when both plaintiffs and defendant went to the
dugout to take out their valuables, they found to their surprise that their money and valuables
werewere missing. Thereafter the plaintiffs acknowledged liability for the loss suffered by the
defendant and executed a document, Exhibit Y whereby they agreed to transfer their land to the
defendant in case they fail to pay for the loss. Plaintiffs filed this action to annul Exhibit Y.
ISSUE: Is Exhibit Y valid?
HELD: There was no deposit proven. Even if the defendant’s theory of deposit were sustained,
any obligation arising therefrom was extinguished upon the loss of the things, without the fault
of the depositee and under circumstances which at the time were inevitable. The evidence shows
that the plaintiffs were not in any way responsible for the loss of defendant’s money and valuables.
Hence, Exhibit Y is null and void for lack of consideration. It was found out also that Exhibit Y
was executed through force and intimidation.
Art. 1164. The creditor has a right to the fruits of the thing from the time the obligation to deliver
it arises. However, he shall acquire no real right over it until the same has been delivered to him.
Let us have a very simple example. I sold you a land with 10 mango trees for P100,000 to be
paid today, and to be delivered on the third day (to deliver – meaning pwede ka ng pumasok and to
occupy the land).
Who owns the land and the trees today? Ako o ikaw? Ako. Eh bukas? Ako. Sa makalawa?
Ako pa rin ang may ari ng lupa at puno from today.
Eh yung mga fruits today, bukas at sa maka-lawa na i-haharvest ko? Akin yun.
Bakit ikaw pa rin ang may-ari, eh binayaran ko na? Personal rights lang ang meron ka ng
magkaroon tayo ng agreement. Hanggat hindi dumadating yung period to deliver the land, akin pa
rin yun.
Your ownership to the fruits and land commenced only upon delivery of the land.


BAR LAW FOR DUMMIES

On the third day, I am obligated to deliver to you the land. If I did not, the proper action is
not accion revindicacion (an action to determine who owns between us is the owner) but an action for
specific performance or to deliver the thing sold.
So ang prayer mo sa complaint are specific performance to deliver the land, accounting of the
fruits and damages. Lahat ng prutas ng manga from the third day up to the finality of judgment shall
be accounted for you plus damages. Page | 27
 Creditor or oblige, in an obligation to deliver a determinate thing, is entitled to the fruits from
the time the obligation to deliver arises.
 In obligations arising from law, quasi-delicts, quasi-contracts, and crimes, the specific
provisions of law applicable to the obligation determine when the delivery should be made.
 In obligations which are subject to a suspensive condition, the obligation to deliver arises
from the moment the condition happens.
o I promise to give you my car if you pass the 2020 Bar Exams. To pass the bar is the
suspensive condition. If you passed the bar, then the obligation to deliver the car
arises.
 When there is a suspensive term or period for the performance of the obligation, the obligation
to deliver arises upon the expiration of the term or period.
o I promise to give you my car on your 25th Birthday. Your 25th birthday is the period.
 When there is neither term nor condition, the obligation to deliver arises from the perfection
of the contract or the constitution or creation of the obligation.
o I promise to give you my car. There is no term or condition. The obligation to deliver
to you my car is upon your demand.
 The time the obligation to deliver a determinate thing arises, the creditor has only a personal
right to the thing itself and to the fruits thereof. He can only demand that the debtor deliver
such thing and its fruits.
o The ownership of things is transferred not by mere agreements but delivery. The
delivery or tradition of a thing constitutes a necessary and indispensable requisite
for the purpose of acquiring the ownership of the same by virtue of a contracts.
o The creditor, therefore, does not acquire any real right over the thing except from the
time it is delivered to him.
CRUZAD0 vs. BUSTOS & ESCALER, 34 Phil. 17: This is an action to recover the possession
and ownership over a piece of land from the defendants. Plaintiffs claim of ownership was
based on a deed of sale executed by Bustos in favor of plaintiffs father of the land in question
with P2,200.00 as considerstion on Sept. 7, 1875, Exhibit A. Escaler was included as
defendant because Bustos sold the land in question to him in Sept., 1891. Plaintiff and his
predecessor in interest were never in possession of the land in question. The land in question
remained in the possession of Bustos from the date of sale until long after, when Bustos sold
it to Escaler who took possession. It was found out that Exhibit A was simulated and for the
sole purpose of making it appear that the plaintiffs father was a property owner, in order to
enable the latter to hold office as procurator, for this was an indispensable requisite for his
appointment. Plaintiffs father held such office for many years due to the liberality of the
pretended vendor.
ISSUE: Will the plaintiff’s action for recovery of possession and ownership prosper?


BAR LAW FOR DUMMIES

HELD: No. The deed of sale, Exhibit A, though it had the appearance of truth, aside from
being simulated was not consummated. Although it is not necessary that the thing sold or
its price should have been delivered in order that the sale be deemed perfected, yet there is
no transmission of ownership until the land sold has been delivered, and the moment such
delivery is made the sale is regarded as consummated.
Under Article 1095 of the old Civil Code (art. 1164, New Civil Code), the plaintiff does not Page | 28
acquire a property right in the land purchased until it has been delivered to him or he has
taken possession of it, and because neither the plaintiff nor his predecessor in interest ever
took possession of the land in question, neither of them acquired any property right therein
and consequentfy could not bring an action for the recovery of the land, which arises out of
a real right over such land in question.
---------xxx---------
Art. 1165. When what is to be delivered is a determinate thing, the creditor, in addition to the
right granted him by Article 1170, may compel the debtor to make the delivery.
If the thing is indeterminate or generic, he may ask that the obligation be complied with at the
expense of the debtor.
If the obligor delays, or has promised to deliver the same thing to two or more persons who do
not have the same interest, he shall be responsible for fortuitous event until he has effected the delivery.
 A thing is determinate when it is particularly designated or physically segregated from all

others of the same class. (Art. 1460).
o 2019 Toyota Altis with engine no. 123456, body no. 546611, and plate no. DRA 840;
my only wristwatch; the house located at 222 Faura Street, Manila; my dog named
Douglas.
 A thing is indeterminate or generic when it is not particularly designated or physically
segregated from all others of the same class, i.e., one of a class. Examples: A horse, a car,
P10,000.00.
 As a rule, the loss of a determinate thing through a fortuitous event extinguishes the
obligation. (Art. 1262)
X sold his 2019 Toyota Altis with Plate No. DRA 637 to Y, and as he was going down
from Baguio to deliver the car to Manila nahulog ang kotse sa bangin dahil biglang lumindol
at swerteng jumijingle si X sa labas. The obligation to deliver the car is extinguished.
X has 10 Ferrari sportscars. Y bought any of them to be delivered to Manila. Nahulog

ang kotse dahil biglang lumindol at swerteng jumijingle si X sa labas. The obligation to deliver
the car is not extinguished. X has to get any of the sportscar to deliver to Y.
X extended a loan of P100,000 to Y. Y got robbed. Y still have to pay X. Money is

generic.
Y borrowed P100,000 from X in multiples of P1,000 bills, and they write down all the
serial number of money. The money is for exhibit purposes only so Y has to return the same
money to X after the exhibit. Y got robbed. The obligation to return the earmarked money has
been extinguished. This time the money is a determinate thing.


BAR LAW FOR DUMMIES

XXX If the obligor delaysxxxx
Y borrowed P100,000 from X in multiples of P1,000 bills, and they write down all the
serial number of money. The money is for exhibit purposes only so Y has to return the same
money to X after the exhibit tonight at 8PM. Y got robbed tomorrow. The obligation to return
the earmarked money has not been extinguished although the earmarked moany is a
determinate thing. Page | 29
Why? Dahil may delay na si Y to return the money.
xxx has promised to deliver the same thing to two or more persons who do not have
the same interest, he shall be responsible for fortuitous event until he has effected the delivery.
A and B co-owned a car. A lent the car to X. X must deliver the car to either A or B on due
date.
A (owner) leased out a house and lot to B (lessor). B subleased it to X. X must return the
house to A or B on due date.
Obligations of one obliged to give a determinate thing
 To take good care of the thing with the diligence of a good father of a family unless the law or
agreement of the parties requires another standard of care. (Art. 1163)
o Diligence of a good father of a family means the ordinary care that an average person
exercises in taking care of his property.
 To deliver the thing. (Art. 1163) This involves placing the thing in the possession or control
of the creditor either actually or constructively.
 To deliver the fruits of the thing. (Art. 1164)
What are the kinds of fruits?
o Natural fruits – They are the spontaneous products of the soil and the young and
other products of animals. (Art. 442) Thus, the trees that grow naturally on the soil
without the intervention of man and the colt delivered by a mare are natural fruits.
For the young and other products of animals, they are natural fruits even with the
intervention of human labor.
o Industrial fruits – They refer to those produced by land of any kind through
cultivation or labor. (Art. 442) Examples are rice, corn and other crops produced
through the intervention of human labor.
o Civil fruits – They refer to fruits which are the result of a juridical relation such as
the rent of a building, price of lease of land and other property and the amount of
perpetual or life annuities. (Art. 442)
o The creditor has the right to the fruits of a thing from the time the obligation to deliver
it arises. However, he shall acquire no real right over it until the thing has been
delivered to him. (Art. 1164)
 To deliver its accessions and accessories even if they have not been mentioned. (Art. 1166)
o Accessions – They include everything that is produced by a thing or is incorporated
or attached thereto, either naturally or artificially, (Art. 440) such as alluvium, the
soil gradually deposited by the current of a river on a river bank, or whatever is built,
planted or sown on a parcel of land.


BAR LAW FOR DUMMIES

o Accessories – Those joined to or included with the principal thing for the latter’s
better use, perfection or enjoyment (such as the keys to a car or a house, or the
bracelet of a wristwatch).
Remedies of the Creditor
 If the debtor fails to perform his obligation to deliver a determinate thing, the creditor has Page | 30
the remedy to compel the debtor to make the delivery (1165) and to demand damages. (Art.
1170) – that is specific performance and prayer for damages.
o X is obliged to give Y a specific car. On due date, Y demanded for its delivery but X
failed to deliver. In this case, Y can compel X to deliver the car because there is no
other person in possession or control of it. Y can also demand payment of damages
from him.
 If the debtor fails to perform his obligation to deliver a generic thing, the creditor has the
remedy to ask that the obligation be complied with at the expense of the debtor. (Art. 1165)
and to demand damages.
o X is obliged to deliver 10 sacks of rice to Y. If X does not perform his obligation on

due date upon Y’s demand, he can obtain 10 sacks of rice from other sources at the
expense of X. He can do so because the thing is generic and thus can be replaced
with the same kind, he can also ask for damages from X.
 If the debtor fails to perform his obligation in obligation to do
o The debtor fails to perform the obligation or performs it but contravenes the tenor
thereof
 Creditor may have the obligation executed at the expense of the debtor. (Art.
1167)
 He may also demand damages from the debtor. {Art. 1170)
Nagpagawa ng lamesa si A kay X. Tatatlo paa. A must demand for a back-job. If

X refused or delayed, A may hire another to do the job right and demand reimbursement
of the cost plus damages.
Pwede bang pilitin ni A na gawin ni X ang lamesa. Hindi. That’s involuntary

servitude.
o If the debtor performs the obligation but does it poorly
 Creditor may have the same be undone at debtor’s expense. (Art. 1167)
 Creditor may also demand damages from the debtor. (Art. 1170)
Yung barnish ng lamesa ay isang pahid lang at hindi pa makinis. A must

demand first for a back-job. If X delayed or refused, A may hire another to have the
job done right at the expense of X plus damages.
Bakit kailangang mag-demand muna ng back-job si A? Para mag karoon ng

delay. Let say sinabi A dapat gawin mo na yung lamesa at gagamitin yan sa


BAR LAW FOR DUMMIES

makalawa sa kasal. Sabi ni X– sige po bukas po gagawin ko yan. Hindi sumipot si X.
There is delay.
 If the debtor does what has been forbidden him

o The creditor may demand that what has been done be undone.
o He may also demand damages from the debtor. (Art. 1168)
Page | 31
X has a right of way over the lot of A. A cannot put up any construction on the right
of way. X may have it remove at the expense of A plus damages.
So uuitin ko. Dapat laging magdemand muna si X to remove the construction para
magkaroon ng delay. If walng demand – walang delay. That the general rule.
--------xxx--------
So far the na-discussed na natin up to Article 1170. But let still have some more of them.
Art. 1165. When what is to be delivered is a determinate thing, the creditor, in addition to the
right granted him by Article 1170, may compel the debtor to make the delivery.
If the thing is indeterminate or generic, he may that the obligation be complied with at the
expense of the debtor.
If the obligor delays, or has promised to deliver same thing to two or more persons who do not
have the same interest, he shall be responsible for fortuitous event until he has effected the delivery.
Remedies of Creditor—When a debtor fails to comply with his obligation, the creditor may avail himself
of the followmg remedies:
(1) an action for specific performance, to obtain compliance of the prestation;
(2) an action, in some cases, to rescind or resolve the obligation, and
(3) an action for damages, exclusively or in addition to either of the first actions.
--------xxx--------
Art 1166. The obligation to give a determinate thing ineludes that of delivering all its accessions
and accessories, even though they may not have been mentioned.
Nasaan ang charger ng phone? Ay nakaw yan.... dapat kasama ang charger ng phone lalo na
kung ang nagbebenta ay stranger. Let say naglalakad at may nag-alok ng cell phone. Dapat kasama
ang charger.
Sa house and lot, dapat kasama ang mga ilaw. Exception kung chandellier. Pero dapat
palitan ng ilaw kahit bombilya para may ilaw naman ang bahay sa gabi at maging habitable.
--------xxx-------
Art, 1169. Those obliged to deliver or to do something incur in delay from the time the obligee
judicially or extrajudicially demands from them the fulfillment of their obligation.
However, the demand by the creditor shall not be necessary in order that delay may exist:


BAR LAW FOR DUMMIES

(1) When the obligation or the law expressly so declares; or
(2) When from the nature and the circumstances of the obligation it appears that the designation
of the time when the thing is to be delivered or the service is to be rendered was a controlling
motive for the establishment of the contract; or
(3) When demand would be useless, as when the obligor has rendered it beyond his power to Page | 32
perform.
In reciprocal obligations, neither party incurs in delay if the other does not comply or is not
ready to comply in a proper manner with what is incumbent upon him. From the moment one of the
parties fulfills his obligation, delay by the other begins.
So there sa 1st paragraph dapat may demand muna para magkaroon ng delay.
The demand may be judicial or extra-judicial. Dapat in written form for convenience – para
ba may evidence ka. Pwede ring oral – kaso baka itanggi na nag-usap kayo. Pwede bang judicial
demand – wag naman! – masyado ng OA yun – eh lamesang tatlo paa lang naman ang ipapa-ayos
mo.
Mageklamo ka muna sa Barangay Lupon. Then, get a certificate to file action saka ka pa lang
pwedeng mag file ng action. Ang damages start from the extra-judicial demand.
What is delay?
X is obligated to deliver the car today to A. Kinabukasan delay na ba si X? Yes, pero delayed
on time of delivery lang. Liable na b for damages si X? No. Kasi wala pang demand. Yan ang tinatawag
na ordinary delay.
A demanded the delivery upon receipt of this notice to deliver the car. In three days, X failed
to deliver the car. Delayed na ba X? Yes and he liable for damages from the receipt of the notice. Yan
ang tinatawag an legal delay or default due to breach of contract.
Let say hindi na nagpadala ng notice of demand si A. Instead, he files an action of specific
performance. Yan...judicial demand na yan. Damages starts to count from the time of the filing of the
action.
 Mora solvendi – Delay on the part of the debtor.

o Ex re- Delay in real obligations (obligations to give).
o Ex persona – Delay in personal obligation (obligations to do).
 Mora accipiendi - Delay on the part of the creditor.

o This exists when the creditor refuses, to accept the thing due without justifiable
reason.
X was hired to paint the picture of A to be performed anytime this week. Ayaw pa ni A at
magpapatangos pa ng ilong next week. X may rescind the contract dahil may iba pa siyang ipipinta
na kliyente na gaya ni B na kahit pango ok lang.
A sold the car for P300,000 to B to be paid today. B tendered payment but A was nowhere to be
found. A is in delay.


BAR LAW FOR DUMMIES

 Compensatio morae – Delay in reciprocal obligations, i.e., both parties are in default. Here, it
is as if there is no delay.
Anu-ano yung mga exception where we demand is not necessary.
(1) When the obligation....

Page | 33
So you have to read the contract.
 X promised to pay A the sum of P2,000.00 on or before December 30 without the need of any
demand. Therefore, if X fails to pay on December 30 he is automatically in default. In this
case, the parties stipulate to dispense with the demand.
 Hence, no demand is necessary such as when a lease contract provides that “The rental shall
be paid by the lessee within the first five days of the month in advance without need of
demand.
SIULIONG AND CO., us.YLAGAN, 43 Phil. 393: The defendant entered into a contract with
plaintiff, by which defendant promised to deliver 1,000 piculs of muscovado sugar of the class
and at the price stipulated in the contract. Such delivery was to be made during the months
of February and March, 1920. The plaintiff made a demand upon the defendant for the
delivery of the sugar according to the contract, but the defendant failed to deliver the same:
HELD: The contract clearly fixes the time for the delivery of the sugar, and, therefore, no
further demand or notice by the plaintiff on the defendant was necessary. The plaintiff,
nevertheless, made such demand on defendant. The plaintiff suffered damages represented
by the difference between the contract price and the amount for which the sugar would have
been sold in the market during the months of February and March, 1920.
....by law
Taxes are to be paid on time. Capital gains are to be paid in 30 days. Doc stamps tax in 7
days. Hay naku! Lahat ng taxes may time to pay if not magkakaroon ng charges and penalties. At
hindi na kailangan ng demand from the BIR at Customs.
 Thus, where the law provides for the payment of penalty if the obligation is not performed on
due date (such as in the case of taxes), then demand shall not be necessary.
(2) When from the nature and the circumstances of the obligation it appears that the designation
of the time when the thing is to be delivered or the service is to be rendered was a controlling
motive for the establishment of the contract; or xxxx
Time is the essence. Ikakasal ka in a week. Tapos ng puntahan mo si Mananahi yung gown
mo ay tela pa rin...yan may delay na yan...Asan ang litson! Ngayon na ang reception. Kinakatay pa
lang ang baboy. Yan...may delay na yan.
 Thus, where a rent-a-car company is obliged to provide for the bridal car during a wedding
at a particular date, time and place, the said company is liable if it failed to perform the said
obligation notwithstanding the absence of demand since time was a controlling motive for the
establishment of the contract.
DE LA ROSA vs. BANK OF THE P.I., 51 Phil 926: The defendant bank started a contest of
designs and plans for the construction of a building. Announcing that the prizes would be


BAR LAW FOR DUMMIES

awarded not later than November 30, 1921. The plaintiff took part in the contest, performing
work and incurring expenses for that purpose. The bank did not name judges and failed to
award the prizes on the date specified. The question is whether the bank was in default in
not awarding the prizes on November 30, 1921. The plaintiff contends that the said date was
the principal inducement in the creation of the obligation because the current cost of concrete
buildings at that time was fixed. HELD: The fixing of said price cannot be considered as the
Page | 34
principal inducement of the contract for the contestants; neither was it for the bank, which
could not be certain that said price would continue to be the current price when it desired to
construct the building designed. There is no sufficient reason for considering that the date
set for the award of the prizes was principal inducement to the creation of the obligation. The
bank cannot be held in default through the mere lapse of time. There must be a demand,
judicial or extra-judicial.
(3) When demand would be useless, as when the obligor has rendered it beyond his power to
performxxxx
Where performance has become impossible, demand will be useless and will not be necessary
to constitute the debtor in delay, such as:
(a) when the impossibility is caused by some act or fault of the debtor, such as when he is
absent or is in hiding, or has already disposed of the thing which is to be delivered, and
(b) when the impossibility is caused by fortuitous event, but the debtor has bound himself to
be liable in cases of such events.
X learned that his car was rammed while it was driven by A. In this case, useless na
magdemand pa si X for the return of the car – eh durog na nga.
(4) In reciprocal obligations,xxxx
The parties in a bilateral contract can regulate the order in which they shall comply with their
reciprocal prestations. Thus, in sales, it frequently happens that the thing is delivered and then the
buyer is given a term to pay the price.
Bibili ka ng isang kilong kamatis...bayad ka muna or pag abot ni tindera ang kamatis dapat
i-abot mo rin yung bayad.
Bibili ka ng lote sa subdivision. Wala kang pang cash. Deposit ka muna ng P5,000 to reserve
the lot na gusto mo. After 30 days you pay for the down payment and start with the monthy
amortization. Then, sa contract nakalagay na pwede ka ng magpagawa ng bahay upon payment of
the required downpayment (this is equivalent to delivery of the specific lot).
MARTINEZ us. CAVIVES, 25 Phil. 581: The plaintiff seeks to recover from Matias Cavives
and Severino Cavives the amounts of some promissory notes, one of which was signed jointly by them
with their brother Carlos Cavives, now deceased. It appears that some time after the execution of
these original notes, Carlos Cavives entered into a contract with plaintiff, in which all the
indebtedness of the three brothers were consolidated, including interests due. Plaintiff agreed to
accept this in substitution of the original notes, and Carlos in turn agreed to secure the signatures
of his brothers to the new contract. These signatures were never obtained. Now, the plaintiff brings
his action based on the original notes; defendants claim that sole responsibility for the obligations
had been assumed by Carlos in the new contract. HELD: Until Carlos obtained the signatures of his


BAR LAW FOR DUMMIES

brothers to the new instrument, it cannot be said that the plaintiff was in any way bound to
acknowledge it as anything more than an executory contract containing a condition precedent which
was to be performed by Carlos. Mere silence on his part could signify nothing until the signatures of
his brothers had been secured.
CAUSING us. BENCER, 37 Phil. 417: The plaintiff, being one of the co-owners of a piece of
land, made a contract for the sale of the property to defendant, binding herself to convey the interests Page | 35
of her co-owners or procure them to convey such interests. She subsequently acquired the interests
of the other co-owners. Instead of conveying the property, she now brings an action to rescind on the
ground that defendant has failed to pay the purchase price. HELD: There is no reason why the plaintiff
should be permitted to rescind this contract. It is evidently a case where the contract involved mutual
obligations, and if either party can be said to have been in default it was the plaintiff, Rufina Causing,
rather than the defendant, Bencer. The contract contemplated a conveyance of the entire interest in
the land; and the plaintiff clearly obligated herself to that extent. She was therefore not in a position
to compel the defendant to pay until she could offer to him a deed sufficient to pass the whole legal
estate; and for the same reason, she cannot now be permitted to rescind the contract on the ground
that the defendant has heretofore failed to pay the purchase price.
Effects of delay
 On the part of the debtor

o The debtor shall be liable for the payment of damages. (Art. 1170)
o If the obligation consists in the delivery of a. determinate thing, he shall be
responsible for any fortuitous event until he has effected the delivery. (Art 1165)
 On the part of the creditor

o He shall bear the risk of loss and shoulder the expenses for the preservation of the
thing.
o The debtor may resort to the consignation of the thing due. (Art. 1258)
X nanghiram ng kotse kay A at sinosoli niya ito on due date. Wala si X at sarado gate
ng bahay. X decide to go back home. It happens that he lives in a condominium
where parking space is for rent. A must pay for the rental of the car space.
If the car got damage or got lost, X cannot be held liable even if the contract of lease
he assumes such risks.
--------xxx---------
Art 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or
delay, and those who m any manner contravene the tenor thereof, are liable for damages.
Grounds for liability to pay damages
1. Fraud
2. Negligence
3. Delay
4. Contravention of the tenor of the obligation.


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Damages Concept, distinguished from injury
Damages refer to the harm done and the sum of money that may be recovered in reparation
for the harm done. (Cinco vs. Canonoy, 50 SCRA 377}
Injury refers to the wrongful, unlawful or tortuous act which causes loss or harm to another.
It is the legal wrong to be redressed. (See Zulueta vs. Pan American World Airways, Inc., L-28589, Page | 36
January 8,1973)
Kinds of damages
a. Actual or compensator damages – These refer to the pecuniaiy loss, (such as loss in
business or profession) that may be recovered. It includes the value of the loss suffered and
profits not realized. (Art. 2199)
b. Moral damages – They include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar
injury. (Art. 2217)
c. Nominal damages – They refer to damages to vindicate a right. (Art. 2221)
d. Temperate or moderate damages – They are more than nominal but less than compensatory
damages, but may be recovered if the court finds that some pecuniaiy loss has been suffered
but its amount cannot, from the nature of the case, be proved with certainty. (Art. 2224)
e. Liquidated damages - Those agreed upon by the parties to a contract, to be paid in case of
breach. (Art. 2226)
f. Exemplary or corrective damages —These are imposed by way of example or correction for
public good, in addition to the moral, temperate, liquidated or compensatory damages. (Art.
2229)
GIVE EXAMPLE FOR EACH
Proof of pecuniary loss
Actual damages – Proof is required unless provided by law or stipulation. (Art. 2199)
Other damages – Proof is not required in order that moral, nominal, temperate or liquidated
or exemplary damages may be adjudicated. The assessment of such damages, except
liquidated ones, is left to the discretion of the court, according to the circumstances of each
case. (Art. 2216)
FRAUD
Fraud is the deliberate or intentional evasion by the debtor of the normal compliance of his
obligation. Under Art. 1170, this actually refers to the fraud committed by the debtor AT THE TIME
OF THE PERFORMANCE of his obligation.
This is the deliberate act of evading fulfillment of an obligation in a normal manner. This
presupposes an existing obligation; hence, the fraud has no effect on the validity of the contract
since it was employed after perfection. However, the party employing it shall be liable damages.


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X promised to deliver a specific car. Pudpud na pala ang preno. After a week dumudulas na
preno. The sale is valid but X is liable for damages and restoration of the car.
Art. 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an
action for future fraud is void.
A waiver of an action for future fraud cannot be made. If there is an agreement for its waiver, Page | 37
the same is void. Thus, the debtor will still be liable for damages if he commits fraud in the
performance of his obligation despite any waiver made by his creditor.
What about waiver of the past fraud committed if there is? Valid.
A waiver of an action for past fraud may be made, since the commission of fraud can no
longer be encouraged. Such waiver is an act of liberality on the creditor.
Fraud in obtaining consent
 Causal fraud or dolo causante – This refers to fraud without which consent would not have
been given. It renders the contract voidable.
X ordered roast pig at P9,000. A told him that 40 kilo sa buhay ang pig na ililitson. A cooked
a smaller one and delivered it to X. The contract is voidable.
 Incidental fraud or dolo incidente – This refers to fraud without which consent would have
still been given but the person giving it woud have I agreed on different terms. The contract
is valid but the party employing it shall be liable for damages.
ABC College hires teachers with or with incomplete Master’s degree. X placed in this
application form that he had a full master’s degree where in fact he has not completed his
thesis. If ABC would have hired X even he did not complete the said units, but that he would
have given a lower salary to X, the fraud committed was only incidental but it would entitle
ABC to recover damages.
NEGLIGENCE
It is the omission of that diligence which is required by the nature of the obligation and
corresponds with the circumstances of the person, of the time, and of the place. (Art. 1173).
It is the failure to observe, for the protection of the interest of another person, that degree of
care, precaution and vigilance which the circumstances justly demand, whereby such other person
suffers injury. It is the omission to do something which a reasonable man, guided ty those
considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of
something which a prudent and reasonable man, would not do. (Perena vs. Zarate, G.R. No. 157917,
August 29, 2012)
The test of negligence is whether the defendant in doing the alleged negligent act used that
reasonable care and caution which an ordinary person would have used in the same situation. If the
law or contract does not state the diligence which is to be observed in the performance of the
obligation, the debtor must observe the diligence of a good father of a family, as required by the nature
of the obligation, and which corresponds with the circumstances of the person, of the time or of the
place.


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Art. 1173. The fault or negligence of the obligor consists in the omission of that diligence which
is required by the nature of the obligation and corresponds with the circumstances of the persons, of
the time and of the place. When negligence shows bad faith, the provisions of Articles 1171 and 2201,
paragraph 2, shall apply.
If the law or contract does not state the diligence is to be observed in the performance, that
which is expected of a good father of a family shall be required. Page | 38
 The determination of the fault or negligence contemplated in this article, there is no fixed
standard of diligence applicable to each and every obligation.
o Negligence is simply the absence of due care required by obligation.

o It is in each case practically a question of fact vhether the proper degree of care has
been exercised, taking into consideration what a reasonable and prudent man would
have done under the circumstances.
Na-discussed na natin ito. This is all about diligence of a good father of a family.
 If the obligation is to deliver a specific window glass, the debtor must ensure that the glass,
considering its fragility, is well-protected, say with cushions, when he transports it as
required by the nature of the obligation. Otherwise, he will be negligent.
 A baby-sitter, 21 years old, strong and healthy, will be negligent if she slept while on duty
considering that the circumstances of her person were considered when she was hired for
the job.
 If the driver of a car drove at night without any headlight, he will be considered negligent
considering that the circumstances of nighttime require such light.
 If the same car driver sped off at 50 kilometers per hour along a busy street where many
people crossing, he will be negligent because the circumstances of the place require that he
should drive slowly.
So if you notice – the diligence of a good father of a family (DOGFOF) is a defense to avoid liability.
Yung example no.1. Let say the glass window suffers cracks in spite of all the precaution na
ginawa ni delivery boy (debtor) – hindi na siya liable for damages. Baka yung manufacturer na
ang liable at mahinang klase talaga yung glass window.
We will discuss more about that defense sa TORTS.
BAER, SENIOR & CO. Os. COMPANIA MARITIMA, 6 Phil. 215: Defendant agreed to tow
the launch of plaintiff from Apari to Manila. Defendant’s steamer, with the launch in tow,
arrived safely in Vigan; but a few hours after leaving Vigan, the wind increased in violence,
and the sea became rough. The speed of the steamer was reduced so that the two might travel
more easily. At almost midnight, it was noticed that the launch had disappeared. The steamer
was stopped, and a search for the launch was made until morning, but to no avail. It was
shown that the towing lines were strong, and were fastened to a post in the bow of the launch,
which post was used for towing purposes. At the time of the loss, the towing lines did not
break, but it was the post to which they were tied that had broken. In this action, the plaintiff


BAR LAW FOR DUMMIES

seeks to recover damages for the loss of its launch. HELD: By the terms of article 1173 of the
Civil Code, the defendant was bound to exercise what is known in American law as ordinary
diligence, taking into consideration the nature of the obligation and the circumstances of
persons, time, and place. The defendant exercised such diligence, and it cannot be held liable
for damages.
Here, ang nasira ay yung poste ng launch. Yung mismong pinagtatalian ng towing lines. Page | 39
Naging maingat din si defendant by reducing the speed when the the wind gets stronger. He
exercised ordinary diligence (DOGOF), hence, he is not liable for damages.
GUZMAN us. X AND BEHN, MEYER & CO., 9 Phil 112: Plaintiff entered into a contract with
defendant Behn, Meyer & Co. Under which defendant was to tow plaintiffs lorcha from Manila
to Iloilo. The captain of defendant’s steamer took charge of the lorcha, which was manned by
a master and four sailors. On the night of the first day out, the port tow line broke, and
thereupon the captain of the steamer ordered the crew of the lorcha to come on board the
steamer and abandon the locha. The master of the latter protested, but the captain of the
steamer threatened to cut the other tow line; in consequence of this attitude, the crew of the
lorcha boarded the steamer, and the captain of the latter then ordered the abandonment of
the lorcha and cast her adrift by having the tow line cut. At the time this was done, the sea
was calm, the moon was bright, and the steamer and its tow were close to the islands of
Mindoro, Cabras and Luban, at any of which places the lorcha might have been left in safety.
HELD: The act of the captain of defendant’s steamer, in abandoning the lorcha in mid-sea,
with knowledge that it would disappear and become a loss, constitutes marked negligence.
There was no force majeure or other such casualty to cause the loss of the lorcha in tow. The
defendant must therefore indemnify the plaintiff for the damages suffered by the latter for
the loss of the lorcha.
TAMAYO vs. GSELL, 35 Phil 953: The plaintiffs ward, a young ignorant boy was employed,
by the defendant to do ordinary work in the performance of which he did not come in contact
with the machinery; but without any previous warning, and over the objections of the boy,
he was ordered to assist in the cleaning of a dangerous machine. In the course of the work,
his fingers were caught in the machine, severing the ring finger at the third joint. HELD: The
defendant is liable for damages, because it was negligence on his part not to warn the boy
and give him instructions how to avoid accidents in the cleaning of a machine with which the
boy was unfamiliar.
HASHIM & CO. vs. ROCHA & CO, 18 Phil. 315: The defendant company discharged a large
shipment of potatoes into a lorcha, which was then left for two days in the sun, tightly closed
and without ventilation. At the same time several thousand crates of potatoes from the same
shipment were discharged into numerous cascoes. The latter were delivered in the usual
condition, but those in the lorcha rotted and became useless and of no value. HELD: The
defendant was guilty of gross negligence with respect to the care of the potatoes on board the
lorcha and is liable for the loss resulting therefrom.
-------------xxxx---------
Art. 1174. Except in cases expressly specified by the law, or when it is otherwise declared by
stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be
responsible for those events which, could not be foreseen, or which, though foreseen, were inevitable.


BAR LAW FOR DUMMIES

 Fortuitous events are those events that could not be foreseen, or which, though foreseen, are
inevitable. (Art. 1174). It is not enough that the event should not been foreseen or anticipated,
but it must be one impossible to foresee or avoid. (Sicam vs. Jorge, G.R. No. 159617, August
8, 2007)
o Natural calamities or acts of God such as earthquake, typhoon and lightning; and
acts of man [“force majeure”) such as war and armed robbery.
Page | 40
 The cause must be independent of the debtor’s will.
Dapat the event is not humanized. Let say nabagyo na. Nag strolling ka pa
rin using your friend’s car. The car got hit by a flying bubong. You are liable
and you cannot put up the defense of Act of GOD ang bagyo. Humanized
means hinaluan mo ng kapabayaan or ignorance.
 There must be impossibility of foreseeing the event or of avoiding it even if it

can be foreseen.
Bukas uulan. Madaling alamin yan manood ng TV or mag-subscribe sa

DOST page for current weather forecast. So yung mga bangkang maliliit ay
di pinapayagang pumalaot. Eh di wag ka ng lalaot.
 The occurrence of the event must be of such character as to render it

impossible for the debtor to perform his obligation in a normal manner.
You are about to ship materials abroad but war in the West Philippine Sea
breakout. So mag-aantay ka muna ng other cargo ship na hindi dadaan sa
warzone. In that case maaring magkaroon ng delay but you will not be liable
because of the war implication.
 Fortuitous events may be produced by two general causes:
o (1) by Nature, such as earthquakes, storms, floods, epidemics, fires, etc., and
o (2) by the act of man, such as anl armed invasion, attack by bandits, governmental
prohibitions, robbery, etc.
 In order that acts of man may constitute fortuitous event, it is necessary that
they have the force of an imposition which the debtor could not have resisted.
 Fortuitous event includes unavoidable accidents, even if there has been an intervention of
human element, provided fault or negligence cannot be imputed to the debtor.
o The act of a train guard of the Manila Railroad Company in shooting a passenger
because of an old personal grudge, must be considered a “caso fortuito” because the
railroad company had no means to ascertain or anticipate that the two would meet,
nor could it possibly foresee every personal rancor between each one of its many
employees and every one of its eventual passengers.


BAR LAW FOR DUMMIES

 There is no essential difference between fortuitous event and force majeure; they both refer
to causes independent of the will of the obligor.
 For the defense of force majeur to prosper, the accident must be due to natural causes, and
absolutely without human intervention.
Page | 41
o A mishap caused by faulty brakes of a car is not fortuitous in character.
o A tire blow-out was considered an inevitable accident where there was no misconduct
or negligence imputable to the operator, in a Court of Appeals decision, but in a later
case the Supreme Court held that a tire blow-out is not fortuitous.
LIABILITY FOR FORTUITOUS EVENTS
 No person shall be liable for fortuitous events, i.e., his obligation will be extinguished.
o Damages were not allowed against the defendants, where under a bond
conditioned upon the delivery to the sheriff of certain carabaos, the said
carabaos could not be delivered because they died of natural causes
o Where during the operation of discharging a case of machinery weighing 25
tons from the hold of a steamer to a lorcha, using for this purpose the vessel’s
main mast which had before sustained much greater weight, the pulleys or
links of the chain fastening said main broke, allowing the case to fall upon
the lorcha and thereby injuring it
o Where a vessel during a voyage was blown ashore by a typhoon and lost
o Where defendant’s firearm was lost in a storm at sea
o Where funds in the hands of the defendant were lost through confiscation by
army
o Where leaks in a newly constructed building passed by the city authorities
were caused by a violent torrential rain
o Where a lorcha which was well anchored was the force of a storm against the
shore and completely destroyed, together with the merchandise on board
o Where inadequacy of means of transportation, the floods and draughts,
caused the failure of rice crops, making it impossible for the debtor in good
faith to fulfill the obligation created
o The non-compliance with the terms of a lease contract is due to enemy
occupation during war;
EXCEPTIONS:
o When the law expressly provides for liability even in case of fortuitous events (such
as that provided in Art. 1165 where the obligor is liable for fortuitous events if he
delays or has promised to deliver the same thing to two or more persons who do not
have the same interest. We have already discussed this.
o When the parties have declared liability even in case of fortuitous event.
Under the contract, X assumes the risk.


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o When the nature of the obligation requires the assumption of risk (such as the
obligation of an insurer who must pay the policy holder even if the loss is caused by
a fortuitous event if the cause thereof is the risk insured against).
Sa mga car insurance policies you have to read the fine print kasi may nakalagay
doon na mga disclaimer. Acts of God are included in the risks except….etc etc ang
dami dami exceptions… lahat na lang ng fortuitous events kasama hahahaha Page | 42
THE ACT OF GOD MUST NOT BE HUMANIZED.
ROBERTO C. SICAM, ET AL., VS. SPOUSES JORGE G.R. NO. 159617, AUGUST 2007: LJ
pawned several pieces of jewelry with Agenda de R. C. Sicam to secure a loan. Armed robbers
entered the pawnshop and took away the jewelry of LJ and other clients of the pawnshop
from the vault which was left open since it was a Saturday. There was no showing that a
security guard was stationed at the pawnshop. When LJ demanded the return of the jewelry
she had pawned, the pawnshop failed to do so because it was lost in the robbery, and raised,
among other defenses, non-liability due to fortuitous event. Is the defense tenable? HELD:
No. In order for a fortuitous event to exempt one from liability, it is necessary that he has
committed no negligence or misconduct that may have occasioned the loss. When the event
is found to be partly the result of a person’s participation – whether by active intervention,
neglect or failure to act – the whole occurrence is humanized and removed from the
applicable to acts of God. The pawnshop failed to show that it was free from any negligence
by which the loss of the pawned jewelry may have been occasioned. Its failure to provide a
station a security guard at the pawnshop and its leaving the vault open constitute acts of
negligence which made the loss no longer independent of its will.
INSULAR GOVERNMENT vs. BINGHAM, 18 Phil. 558: Defendant Bingham obtained

permission from the Insular Government to purchase and keep one revolver and 100 rounds
of ammunition, with the condition that he would deliver the same to the Government on
demand. Prior to the time when the demand was made for the return of said revolver and
ammunition, Bingham was engaged in the business of pearl fishing and while engaged a
severe storm overtook him, and his boat was sunk in eighty fathoms of water through no
fault of his crew, and the revolver and ammunition, being on board, were lost, The violence
of the storm was such that neither Bingham nor any member of his crew had time to save
the revolver and ammunition, and it was impossible to recover the same on account of the
depth of the sea where they were lost. The Government seeks to hold Bingham and his
sureties upon the bond. HELD; They are not liable. An obligation, consisting of the delivery
of a specified titling, shall be extinguished when the said thing shall be lost or destroyed
without the fault of the obligor and before he is in default. No one shall be liable for fortuitous
events.
YAP KIM CHUAN us. TIAOQUI, 31 Phil. 433: Plaintiff leased a building from the defendant;
the building had been recently finished, the construction having been under the supervision
of an engineer, and opened for use only after approval by the departments of engineering and
sanitation of the City of Manila. One day a heavy torrential rain fell, and because of the large
amount of water and the extraordinary violence of the downpour, the roof leaked and some
merchandise belonging to the plaintiff got wet in the building. Neither plaintiff nor defendant
knew that the roof was defective. HELD: The occurrence was undoubtedly due to force
majeure, being a fortuitous event which could not have been foreseen by the owner tenant;


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hence, the losses and damages suffered by plaintiff by reason thereof cannot be chargeable
against the defendant.
LIMPANGO SONS vs. YANGCQ STEAMSHIP CO., 34 Phil. 597: One day in the month of
August, plaintiff employed defendant to tow from Guagua to Manila two cascos loaded with
sugar. On the same date, the cascos left Guagua, towed by two launches of the defendant.
When the launches, together with their tows, arrived off the Malabon river, the patron of the Page | 43
launch Matulin, decided to leave the cascos in the Malabon River. The cascos were towed into
the Malabon River, the excuse given being that the weather was threatening and it was
dangerous for the cascos to continue the voyage to Manila. A couple of days later, the patron
of the Matulin talked with the men in charge of the cascos, which were at the time tied up in
the river, and told them that following day, he would wait for them off the mouth of the
Malabon River, outside the bar, and that if the weather was then favorable, he would tow
them to Manila. It was agreed between the patron of the Matulin and those in charge of the
cascos that the latter should move out of the river by means of their poles to the place where
the Matulin would be waiting for them. This was done, but after the cascos had passed the
shallows, they were met with high seas and strong wind, against which the bamboo poles
were unavailing, and they were driven ashore or on the shoals and their cargoes lost. HELD:
It was negligence to leave two heavily loaded cascos in Manila Bay at the mercy of weather
likely to exist in the month of August with no other motive power than bamboo poles. It was
negligence of the patron of the launch to ask the cascos to move out into the open sea under
such circumstances. While the captain of the Matulin wold not have been responsible for an
act of God by which the cascos were lost, it was his duty to foresee what the weather was
likely to be, and to take such precautions as were necessary to protect his tow. To be exempt
from liability because of an act of God, the tug must be free from any previous negligence or
misconduct by which that loss or damage may have been occasioned. For, although the
immediate or proximate cause of the loss in any given instance may have been what is termed
an act of God, yet if the tug unnecessary exposed the cascos to such accident by any culpable
act or omission of its own, it is not excused.
PARTIES MAY EXPRESSLY STIPULATE IN THEIR CONTRACT THAT THE DEBTOR

SHALL BE LIABLE TO THE CREDITOR, EVEN IF PERFORMANCE IS RENDERED
IMPOSSIBLE BY FORTUITOUS EVENT OF FORCE MAJEURE.
GOVERNMENT vs. AMECHAZURRA, 10 Phil. 647: The defendant obtained a license to have
in his possession three rifles and one revolver, for each of which he gave a bond, with two
sureties, containing the following condition: “It is agreed that he shall safely keep the arms
and each of them, and shall deliver them to the Government of the Philippines on demand.”
He lived in an outlying barrio, and one day his house was attacked by a band of robbers
known as babaylanes, more than eighty in number. His brother-in-law was killed, and three
of the arms were carried away by the robbers. After demand by the Goverment to deliver the
arms, and the defendant having been able to deliver only one, the Government sued upon
the bond for the three arms. HELD: The bond expressly imposes an obligation even in case
of a loss by force majeure. Hence, the Government is entitled to recover upon said bond. But
since two of the firearms were recovered by the Constabulary, the liability was reduced by
the court. “It may be said that this is a harsh rule when applied to a case like the present,
but it must be remembered that no private person is bound to keep arms. Whether he does
so or not is entirely optional with himself, but if, for his own convenience or pleasure, he


BAR LAW FOR DUMMIES

desires to possess arms, he must do so upon such terms as the Government sees fit to
impose, for the right to keep and bear arms is not secured to him by law.”
WHEN THE NATURE OF THE OBLIGATION REQUIRES THE ASSUMPTION OF RISK
 Accidents have frequently occurred in the operation of the industrial properties used in the
further production of wealth for their owners, and it is but just that those owners who benefit Page | 44
from the operation of such properties should also bear the risks arising therefrom;
Yung mga workers or laborers when they suffer injury in the performance of their
duties, the employers are obligated to pay for their hospitalization. Kaya nga nakuha
sila ng mga group insurance for their employees to pass on the burden.
WHEN THE CREDITOR IS NEGLIGENT
 The debtor is released from liability not only when the non-performance of the obligation is
due to fortuitous event of force majeure, but also when it is due to the act of the creditor
himself.
X orders pizza from XYZ pizza hut. Di ba mga naka-motorbike lang ang mga delivery.
If the package got wet, X is not obligated to pay. He may ask for replacement or
refund of he has paid for.
-----------xxxx--------
Art. 1175. Usurious transactions shall be governed by special laws.
We will discuss more about this when get to the topic of MUTUUM.
Art. 1176. The receipt of the principal by the creditor, without reservation with respect to the
interest, shall give rise to the presumption that said interest has been paid.
X secured a loan of P100,000 from Y payable after one year with 12% interest per annum. So
sa unang tingin ang utang ni X ay 100,000 pesos plus 12,000 pesos representing interest or a total
of P112,000 di ba? Mali. P100,000 lang ang utang ni X. The presumption is the 12% interest in tacked
in na. So when X paid P100,000 after one year and accepted by Y without reservation of the interest,
the presumption is bayad na si X. Y has the burden of proof na may outstanding interest pa na dapat
bayaran.
Kasi maaring inawas na ni Y yung interest at the time when the loan was released. Kaya nga
tayo may Truth of Lending Act. The law requires ful disclosure of all penalities, charges and interests
and they must not be inconscionable.
The receipt of a later installment of a debt without reservation as to prior installments, shall
likewise raise the presumption that such installments have been paid.
X secured a P100,000 loan from Y payable in 10 monthly equal installments. Failure to pay
any of the installment, an additional 2% of the unpaid installment shall be imposed.
X failed to pay for two months. The next payment should be accounted for the penalty muna
at interest, at yung natira sa mga unpaid balances ng installment. If Y received the next installment
without applying part of it sa mga penalties and charges, the presumption is that X has no arrears.


BAR LAW FOR DUMMIES

 Under article 1253 of the Code, if a debt produces interest, payment of the principal shall not
be deemed to have been made until the interests have been covered.
 Where a bank issued receipts for the payment of part of an obligation, without any reservation
with respect to the interest, it was held that the interest due up to such part payment was
extinguished; but the balance shall continue to bear interest from the date of such payment. Page | 45
----------xxx----------
Art. 1177. The creditors, after having pursued the property in possession of the debtor to satisfy
their claims, may exercise all the rights and bring all the actions of the latter for the same purpose, save
those which are inherent in his person; they may also impugn the acts which the debtor may have done
to defraud them.
X failed to pay the P100,000 loan he secured from Y. What are the remedies available for Y?
First, dapat maningil muna si Y. He has to demand payment para magkaroon ng legal delay.
He can do this by sending a demand letter. Then, an action for collection of sum of money. Nowadays,
meron na tayong small claims. So Y will just go to the nearest MTC and file an action small claim.
Kung favorable ang judgment, Y may levy some of X’s property to be sold in the public auction to
satisfy the obligation.
Thereafter, Y learned that X donated all of his property to a third person, Z. Y may bring an
action to reduce or revoke totally that donation.
Art. 2236. The debtor is liable with all his property, present and future, for the fulfillment
obligations, subject to the exemptions provided by law.
Paano kung walang property? Eh di magaantay si Y kung magkakaroon ng future properties

pa si X.
xxxsubject to the exemptions provided by law. Xxx
May mga property na hindi pwedeng i-levy gaya ng gintong pustiso. Kahit na P1M ang halaga
ng pustiso at P100,000 ang utang, you cannot compel X to auction it para ibayad sa iyo hahahaha.
That property (pustiso) ay personal sa kanya. Gaya ng pacemaker…hahahaha or yung mga silicon sa
katawan hahahahaha
For the properties exempt from levy (execution) refer to Rules of Court Art 39 Sec 12 and
don’t forget yung Family Home is exempt also from execution under special circumstances. Also,
support is exempted from execution.
IN RE ESTATE OF CEBALLOS, 12 Phil 271 After the dissolution of the partnership of Sanchez-
Ceballos, the heirs of Ceballos were given two haciendas. The share of Ceballos, however, was sold
by the shefiff at public auction on a judgment against the widow in favor of one Ortiz. The certificate
of the sheriffs sale purport to transfer to the buyer not only the real estate, but also all the interest
which the widow had in such estate of her deceased husband, including her usufructuary and
conjugal rights. The purchaser claims that by virtue of this sale, the widow had no more right to
appear in the proceedings for the settlement of the estate of her deceased husband and should he
excluded therefrom. HELD: Tne widow is entitled to remain, because even if the real estate had been
sold, she still had the right of redemption within one year. Moreover, even under the Civil Code,


BAR LAW FOR DUMMIES

the creditor is not clothed with such rights as were inherent in the person of the debtor, and in this
case the strictly personal rights of the widow would alone be sufficient to entitle her to a
representation in the estate proceedings.
Xxxthey (creditor) may also impugn the acts which the debtor may have done to defraud them.
X ordered construction materials from XYZ. Ginamit ni X yung mga materials to build a house Page | 46
in a lot and sold the property to A. How can XYZ collect from X?
Art. 1380. Contracts validly agreed upon may be rescinded in the cases established by law.
(1290)
Art. 1381. The following contracts are rescissible:
XXX3) Those undertaken in fraud of creditors when the latter cannot in any other manner collect
the claims due them; XXX
XYZ may rescind the contract of sale entered by X and A? NOT YET.. XYZ has to prove muna
if X and A entered into that contract to defraud them (XYZ). Dapat maningil muna si XYZ, if walang
pambayad si X, they can attach the receivables ni X from A.
Pwede rin na mag pray sa court si XYZ for A not to pay X hanggat hindi pa tapos ang kaso
para in case na manalo siya sa kaso, siya na lang ang maniningil kay A. We call it accion
suborogatoria.
If there was fraud, like X donated the property to A to remove it from his patrimony at para
hindi makasingil si XYZ. In that case, XYZ may file an action to reduced or revoke the deed of
donation.
WHAT ARE THE REMEDIES OF THE CREDITOR UNDER ART 1177?
1. Pursue the property in the possession of the debtor except those exempt by law.
It is usually by attachment where the creditor files a court action to exact fulfillment with a
prayer that the court set aside a property belonging to the debtor. If the court decided in favor of the
creditor and the debtor does not pay, the property attached will be ordered sold and the proceeds
thereof applied to the payment of the obligation.
2. Exercise all the rights and bring all the actions of the debtor except those personal to him (action
subrogatoria).
Example: A owes D. D owes C. If C filed a court action against D to collect, he may ask the
court to order A not to pay D so that in the event that the court rules in favor of C, A will be required
to pay C. In effect, C is exercising the right to collect from A which is a right that belongs to D.
3. Impugn the acts which the debtor may have done to defraud his creditors (action pauliana).
This remedy must be of last resort. The creditor must have taken successively the foregoing
measures (Nos. 1 and 2) before he can bring this action. (Metrobank vs. International Exchange Bank,
G.R. No. 176008, August 10, 2011)


BAR LAW FOR DUMMIES

X has many overdue monetary duties to pay for in favor of A, B and C. He is now selling his
only property to Y. May the creditors impugn the sale at this stage. No, kasi kaya nga binebenta ni X
ang property ay bayaran sila.
X has many overdue monetary duties to pay in favor of A, B and C. He is now donating his
only property to Y. May the creditors impugn the act at this stage. Yes. Eh, ano na ibabayad niya
hahaha. The act is simply to defraud his creditors. Page | 47
---------xxx--------
Art. 1178. Subject to the laws, all rights acquired in virtue of an obligation are transmissible, if there
has been no stipulation to the contrary.
Instrument evidencing a credit may be transferred or assigned by the creditor to another, and the
transferee would be considered in lawful possession of the same as well as of the credit, unless the
contrary is shown.
X issued a promissory note to P, as payee. P may endorsed the instrument to A for monetary
consideration. Here, A is the tranferee.
Exceptions
1. If the law prohibits the transmission of the right.
Art. 1767. By the contract of partnership two or more persons bind themselves to contribute
money, property, or industry to a common fund, with the intention of dividing the profits among
themselves.
X, Y and Z form a partnership. Kaya pinili nila ang isat-isa kasi may tiwala sa sila. X cannot
assign his right as partner to a stranger. Bukas pala A, Y and Z na yung magkaka-partner eh di
magugulat na lang si Y and Z. Hence, the right of a partner cannot be assigned.
Art. 1868. By the contract of agency a person binds himself to render some service or to do
something in representation or on behalf of another, with the consent or authority of the latter.
X appoints A as Attorney-in-Fact to represent him sa isang business contract. Kinuha ni X

si A as representative because may tiwala siya sa kakayanan ni A. A cannot assign that right to a
stranger.
Art. 1933. Commodatum.
X borrows A’s car. A cannot lend the car to a stranger. Siyampre, magugulat si X kasi
pinahiram niya yung kotse dahil may tiwala siya kay A.
2. If the parties agreed against transmission.
Facts: R (owner) leased his factory to E (lessee) for two (2) years, giving the latter an option to
buy said factory within the same period. E assigned his right to X who communicated in writing his
desire to exercise the option to R who, however, refused to execute the corresponding deed of sale
alleging as his reason the fact that the option was given to E and not to any other person and E could
not make the assignment without his (R’s) consent and when E did it, he (R) withheld his approval.


BAR LAW FOR DUMMIES

Issue: Under the contract and the law, was there any impediment on the part of E to transfer
his right under the option?
Held: None. The contract does not contain any stipulation forbidding E from assigning the
option or requiring R’s consent for the assignment. Nor was the option given to E in consideration of
his personal qualifications. Article 1178 is applicable. (Bastida and Ysmael & Co., Inc. vs. Dy Buncio
& Co., Inc., 95 Phil. 195 [1953].) Page | 48
3. If the right is by nature not transmissible.
You asked Picasso (nung buhay pa) to paint a picture of you. Picasso was so good in hand
painting. He cannot assign the task to me kasi i-googoogle ko lang ang mukha sabay print
hahahahaha Obviously, you got his services because of his expertise or personal qualification.
Support. Hindi pwedeng yung asawa ng kapitbahay mo yung suportahan mo kahit pa

pumayag ang asawa mo.
Skills. You cannot assign your job as a teacher sa iba lalo na if highly trechnical yung subject
matter.
------------JURISPRUDENCE----------
The Court cannot generalize, the 1997 Asian financial crisis to be unforeseeable and beyond the control
of a business corporation. A real estate enterprise engaged.in the pre-selling of condominium units is
concededly a master in projections on commodities and currency movements, as well as business risks.
The fluctuating movement of the Philippine peso in the foreign exchange market is an everyday
occurrence, hence, not an instance of caso fortuito. Megaworld’s excuse for its delay does not thus lie.
(Megaworld Globus Asia, Inc. vs, Tanseco, G.R. No. 181206, October 9, 2009)
In July 1995, T purchased a condominium unit from Megaworl at a pre-sellling project. T paid up the
installment until 1998 leaving a balance of P2M pending the delivery of the unit. Megaworld failed to
deliver the unit on the agreed date due to 1997 Asian financial crisis. In 2002, they notified T that
the unit was ready for turn over which the latter refused to accept but demanded the return of the
P14M representing the installment he has paid for. In its Answer, Megaworld contended that the delay
was due to the 1997 Asian financial crisis which is beyond its control and lack of demand from T to
set delay in motion. Will the complaint for rescission prosper?
Yes. Under Article 1169 of the Civil Code;
Art. 1169. Those obliged to deliver or to do something incur in delay from the time the oblige
judicially or extra-judicially demands from them the fulfillment of their obligation.
However, the demand by the creditor shall not be necessary in order that delay may exist:
Xxxxx(3) When demand would be useless, as when the obligor has rendered it beyond his
power to perform.
In reciprocal obligations, neither party incurs in delay if the other does not comply or is not
ready to comply in a proper manner with what is incumbent upon him. From the moment one of the
parties fulfills his obligation, delay by the other begins.


BAR LAW FOR DUMMIES

The Contract to Buy and Sell of the parties contains reciprocal obligations, i.e., to complete
and deliver the condominium unit on October 31, 1998 or six months thereafter on the part of
Megaworld, and to pay the balance of the purchase price at or about the time of delivery on the part
of T. Compliance by Megaworld with its obligation is determinative of compliance by T with his
obligation to pay the balance of the purchase price. Megaworld having failed to comply with its
obligation under the contract, it is liable therefor. That Megaworld’s sending of a notice of turnover
Page | 49
preceded T’s demand for refund does not abate his cause. For demand would have been useless
Megaworld admittedly having failed in its obligation to deliver the unit on the agreed date.
The Court cannot generalize, the 1997 Asian financial crisis to be unforeseeable and beyond
the control of a business corporation. A real estate enterprise engaged.in the pre-selling of
condominium units is concededly a master in projections on commodities and currency movements,
as well as business risks. The fluctuating movement of the Philippine peso in the foreign exchange
market is an everyday occurrence, hence, not an instance of caso fortuito. Megaworld’s excuse for its
delay does not thus lie.
----------BAR EXAMINATIONS--------
2018 BAR EXAMS
XIX. Sebastian, who has a pending assessment from the Bureau of Internal Revenue (BIR), was
required to post a bond. He entered into an agreement with Solid Surety Comply (SSC) for SSC to
issue a bond in favor of the BIR to secure payment of his taxes, if found to be due. In consideration
of the issuance of the bond, he executed an Indemnity Agreement with SSC whereby he agreed to
indemnify the latter in the event that he was found liable to pay the tax. The BIR eventually decided
against Sebastian, and judicially commenced action against both Sebastian and SSC to recover
Sebastian’s unpaid taxes. Simultaneously, BIR also initiated action to foreclose on the bond. Even
before paying the BIR, SSC sought indemnity from Sebastian on the basis of the Indemnity
Agreement. Sebastian refused to pay since SSC had not paid the BIR anything yet, and alleged that
the provision in the Indemnity Agreement which allowed SSC to recover from him, by mere demand,
even if it (SSC) had not yet paid the creditor, was void for being contrary to law and public policy
Can Sebastian legally refuse to pay SSC?
No, Sebastian cannot legally refuse to pay. A stipulation in an indemnity agreement providing that
the indemnitor shall pay the surety as soon as the latter becomes liable to make payment to the
creditor under the terms of the bond, regardless of whether the surety has made payment actually or
not, is valid and enforceable; in accordance therewith, the surety may demand from the indemnitor
even before the creditor has paid (Security Bank and Trust Co., Inc. v. Globe Assurance Co. Inc. (G.R
No- L-13708, April 27, 1960). Under the terms of the contract, Sebastian’s obligation to indemnify
became due and demandable from the moment he incurred liability and not from the moment of
payment. – UPLC ANSWER
2016 BAR EXAMS


BAR LAW FOR DUMMIES

XI. Ellen entrusted her title over the lot where she is residing to Patrick, her nephew, for safekeeping
because of her poor eyesight. Patrick, a gambler, prepared a Special Power of Attorney empowering
him to mortgage the lot. Ellen’s signature was forged. With the help of Julia who represented herself
as Ellen, Mega Bank granted a loan to Patrick secured by a mortgage on Ellen’s lot. Due to non-
payment, Mega Bank foreclosed the mortgage and was declared the highest bidder. Title was later
registered in the name of the bank. When Ellen was notified that she should vacate the premises, she
Page | 50
fifed a complaint to nullify the loan with mortgage, the auction sale and the title of Mega Bank on the
ground that the bank is not a mortgagee in good faith. Decide the case with reasons.
I will decide in favor of Ellen. Banks, their business being impressed with public interest, are
expected to exercise more care and prudence than private individuals in their dealings, even those
involving registered lands. The highest degree of diligence is expected, and high standards of
integrity arid performance are even required of it. – UPLC ANSWER
A mortgagee can rely on what appears on the certificate of title presented by the mortgagor and an
innocent mortgagee is not expected to conduct an exhaustive investigation on the history of the
mortgagor’s title. This rule is, however, strictly applied against banking institutions. Mega Bank
cannot be considered a mortgagee in good faith as it failed to inspect the disputed property when
offered to it as security for the loan, which could have led it to discover the forged Special Power of
Attorney.
XV. Peter and Paul entered into a Contract to Sell whereby Peter, the lot owner, agreed to sell to Paul
his lot on November 6, 2016 for the price of P1,000,000.00 to be paid at the residence of Peter in
Makati City at 1:00 p.m. If the full price is paid in cash at the specified time and place, then Peter
will execute a Deed of Absolute Sale and deliver the title to Paul. On November 6, 2016, Paul did not
show up and was not heard of from that date on. In view of the non-performance by Paul of his
obligation, Peter sent a letter to Paul that he is expressly and extra-judicially declaring the Contract
to Sell rescinded and of no legal and binding effect. Peter further stated that failure on the part of
Paul to contest the rescission within thirty (30) days from receipt of said letter shall mean that the
latter agreed to the rescission.
Paul did not reply to this letter for five (5) years. Thus, Peter decided to sell his lot to Henry in 2021.
After hearing that Henry bought the lot, Paul now questions the ssale of the lot to Henry and files a
complaint for nullification of the sale.
Is the exercise by Peter of his power to rescind extra-judicially the Contract to Sell the proper and
legal way of rescinding said contract? Explain.
As a general rule, the power to rescind an obligation must be invoked judicially and cannot be
exercised solely on a party’s own judgment that the other has committed a breach of the obligation.
This is so because rescission of a contract will not be permitted for a slight or casual breach, but only
for such substantial and fundamental violations as would defeat the very object of the parties in
making the agreement. However, rescission as a remedy for breach is applicable only to an obligation
which is extant. Be it noted that the contract between the parties is a contract to se1l and not a
contract of sale, and in a contract to sell, there is a reservation of ownership on the part of the seller
and his obligation to convey title will only arise upon full payment of the purchase price. Nonetheless,
Peter may validly cancel the contract to sell (Olivarez vs. Castiilo, G.R. No. 196251, July 9,2014).
ALTERNATIVE ANSWER


BAR LAW FOR DUMMIES

Yes, Peter validly rescinded the contract to sell his lot to Paul for the latter’s failure to comply with
his prestation to pay P1,000,000.00 on November 6,2016 at 1:00 p.m. at the residence Peter so that
Peter will execute the Deed of Absolute Sale. The rescission is actually the resolution of the reciprocal
obligation.
In UP v. De Los Angeles (G.R. No. L-28602, September 29,1970, 35 SCRA 102), the Supreme Court
ruled that the injured party may consider the contract as rescinded and act accordingly even without Page | 51
prior court action. His unliatera1 determination however, is provisional since the other party may
challenge it by suing him in court. It is then the court which will finally determine if the rescission
should be set aside or affirmed. – UPLC ANSWER
In case Paul made a down payment pursuant to a stipulation Contract to Sell, what is the legal remedy
of Peter?
If Paul made a down payment, Peter may still cancel the contract because in a contract to sell, the
seller does not yet agree to transfer ownership to the buyer. The non-payment of the price in a contract
to sell is not a breach for which the remedy of rescission maybe availed of, but rather it is considered
as a failure to comply with a positive suspensive condition which will prevent the obligation of the
seller to convey title from acquiring obligatory force (Ursal vs. Court of Appeals. G.R. No 142411,
October 14, 2005, 473 SCRA 52, citing Chua v. Court of Appeals, G.R. No. 144881, October 16, 2003,
401SCRA 54) – UPLC ANSWER
2015 BAR
X. X, a dressmaker, accepted clothing materials from Karla to make two dresses for her. On the day
X was supposed to deliver Karla’s dresses, X called up Karla to say that she had an urgent matter to
attend to and will deliver them the next day. That night, however, a robber broke into her shop and
took everything including Karla’s two dresses. X claims she is not liable to deliver Karla’s dresses or
to pay for the clothing materials considering she herself was a victim of the robbery which was a
fortuitous event and over which she had no control. Do you agree? Why?
Yes, I agree that X is not liable. The contract between the parties is a contract for a piece of work
wherein the contractor, X, bound herself to execute a piece of work forthe employer, Karla, in
consideration of a certain price or compensation (Art. 1713, Civil Code). Article 1717 of the Civil Code
provides that if the contractor bound himself to furnish the material, he shall suffer the loss if the
work should be destroyed before its delivery, save when there has been delay in receiving it. Since the
contractor X did not furnish the material she shall not suffer the loss of the work which took place
before its delivery. There was no delay in the receipt of the work since the parties agreed to the delivery
of the dresses on the day after the original date of delivery. Hence, X is not bound to suffer the loss,
and is liable for neither the delivery of the dresses nor the cost of the materials.
Yes, I agree that X is not liable. Article 1174 of the Civil Code provides:


BAR LAW FOR DUMMIES

Page | 52
UP TO 288 PAGES…BUY THE WHOLE REVIEWER
------------xxx-------
Tapos na tayo sa OBLICON. We cannot include here the topics like Natural Obligations to
Concurrence to Preference of Credits. That is from Article 1423 to 2270. More than 1800 provisions
pa ito. What we will do is to discuss the frequent topics asked in the bar of those topics. We will have
part 2 of OBLICON covering those special contracts.
Oblicon part 1 are good for law students and for those who will take the bar, you got to have
the part 2. So wait for BLD SPECIAL CONTRACTS (OBLICON 2).
------------xxxx----------


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FROM Nth BAR CHALLENGER TO ATTORNEY

OBLIGATIONS AND CONTRACTS

Ang mga manunulat ay pauna na nang humihingi ng pang-unawa sapagkat

NAPAKA-MAHAL NG MGA LAW BOOKS – MAHAL PA SA TUITION FEES.

ANG MGA MANUNULAT AY NAGSIKAP NA PABABAIN ANG HALAGA NG

NAWA’Y ANG GAWAING ITO ANG MAG-PASIMULA UPANG ANG MGA

BAR LAW FOR DUMMIES 2020

1975-2018 BAR EXAMINATION

HOW TO STUDY OBLICON…4

NATURE AND EFFECT OF OBLIGATION…23

DIFFERENT KINDS OF OBLIGATION….58

PURE AND CONDITIONAL OBLIGATION…58

OBLIGATION WITH A PERIOD…88

ALTERNATIVE AND FACULTATIVE OBLIGATION…95

JOINT AND SOLIDARY OBLIGATION…101

DIVISIBLE AND INDIVISIBLE OBLIGATION…116

OBLIGATION WITH A PENAL CLAUSE….119

TENDER OF PAYMENT AND CONSIGNATION…134

LOSS OF THE THING DUE….143

RES PERIT DOMINO….144

BY CONDONATION OR REMISSION OF DEBT…149

CONTRACTS, CONCEPT…178, 180

VOID OR INEXISTENT CONTRACTS…231

PARI DELICTO…233 Page | 3

HOW TO UNDERSTAND OBLIGATION AND CONTRACTS

But can a unilateral promise alone be a source of obligation?

Art. 1157. Obligations arise from:

X inserted his finger to A’s vagina. Is X liable?

X was riding a bicycle at nasagasaan niya si Y na naglalaro ng piko sa kalye. Is X liable to

Art. 1156. An obigation is a juridical necessity to give, to do or not to do.

As regards to the prestation to transport the goods from Manila to Cebu

Civil obligation and natural obligation distinguished

What are the sources of obligation?

So, uulitin natin yung Article 1157.

X and Y have a contract or agreement. The stipulations in the contract/agreement

X was a doctor and contacted by Y to attend to an unconscious child who happened

Law is not presumed. X is the guard in a pawnshop. In an occasion of robbery, X

The law is not presumed. Maghahanap dapat si X ng batas na nagsasaad na ang

o The falsification of a contract by the unauthorized insertion of additional stipulations

These are simple examples para hindi ninyo malimutan.

(1) When the property or business is not neglected or abandoned;

o Solution indebiti – Article 2154-2163

Simpleng-simple. Sobrang sukli na binigay sa iyo ng tindera. Dapat mong isauli.

Sobrang bill ng meralco. Dapat isauli.

UST Cooperative vs. City of Manila L-17133, December 31,1965

Commissioner of Internal Revenue vs. Fortune Tobacco Corporation G.R.

o Subsidiary liability for a crime

 In default of the persons criminally liable, innkeepers, tavernkeepers, and

Nag-SOGO ka hahahahaa...dapat lahat ng items mo ay well accounted for at

 The subsidiaiy liability established above also applies to employers, teachers,

X, a teacher, during a parent-teacher conference ay naka-murahan niya si Y

(a) damages to the complainant;

Kung maglakad ka ay para kang karetelang dumadaan sa lubak-lubak na kalsada,

Si Y ba na hindi nakatingin sa kalsada?

Ang proximate cause of the accident ay yung pagkakabundol ng motorbike kay Y na

What are the provisions asked in the bar?

Does the doctrine of proximate cause apply in this case?

2013 BAR EXAMS

Was Homer justified in refusing to accept the tobacco leaves?

1998 BAR EXAMS

(This is an alternative answer under UPLC)

1997 BAR EXAMS

1991 BAR EXAMS

NATURE AND EFFECTS OF OBLIGATION