OBLIGATIONS AND CONTRACTS

STUDY GUIDE
Prepared by Atty. Ronbert A. Ramos

References:

CIVIL CODE (Book IV) by Paras

CIVIL CODE (Book IV) by Tolentino

Provisions:

Article 1156 – 1422

1423 – 2270

Book IV
Title I Obligations
Title II Contracts

Cases to Digest:

I. Sources of Obligations
A. Law – Art. 1158
 OSG v. Ayala Land Inc. (G.R. No. 177056, 18 September 2009)
B. Contracts – Art. 1159
 PADCOM v. Ortigas (G.R. No. 146807, 9 May 2002, 382 SCRA 222)
C. Quasi-Contracts – Art. 1160
(correlate with Arts. 2142, 2144, 2154)
 Metrobank v. Absolute Management (G.R. No. 170498,  9 January  2013, 688 SCRA
225)
 Traders Royal Bank Employees Union v. NLRC (G.R. No. 120592, 14 March 1997)
D. Quasi-Delicts- Art. 1162
(correlate with Arts. 2176, 2180 CC, Arts. 218, 219 FC, Rule 111, Rules of Criminal Procedure)
 Barredo v. Garcia and Almario (8 July 1942, 73 Phil. 607)
 Elcano and Elcano v. Hill and Hill (G.R. No. L-24803, 26 May 1977, 77 SCRA)
 Mendoza v. Arrieta (G.R. No. L-32599, 29 June 1979, 91 SCRA 113)
 PSBA v. Court of Appeals (G.R. No. 84698, 4 February 1992, 205 SCRA 729)
 Amadora v. Court of Appeals (G.R. No. L-47745, 15 April 1988)
 Araneta v. De Joya (G.R. No. L-25172, 24 May 1974)
Art. 1167
 Chaves v. Gonzales (G.R. No. L-27454, 30 April 1970, 32 SCRA 547)
II. Breach of Obligations

A. Delay (mora) – Art. 1169

Mora Solvendi
 Cetus Development, Inc. vs. Court of Appeals (G.R. No. 77648, 7 August 1989, 176
SCRA 72)
 Santos Ventura Hocorma Foundation, Inc. vs. Ernesto V. Santos (G.R. No. 153004, 4
November 2004, 441 SCRA 472)
 Abella v. Francisco (55 Phil. 447 (1931))
Mora Accipiendi
 Tengco v. CA (G.R. No. 49852, 18 October 1989, 178 SCRA 608)
Compensatio Morae
 Central Bank v. CA (G.R. No. L-45710, 3 October 1985, 139 SCRA 46)
B. Substantial v. casual/slight breach – Art. 1170
  Song Fo v. Hawaiian Phils. (G.R. No. 23769, September 16, 1925, 47 Phil 821) 
C. Fraud (dolo) – Art. 1171

 Woodhouse v. Halili (G.R. No. L-4811, 31 July 1953)

 Geraldez, vs. CA & Kenstar Travel Corporation (G.R. No. 108253, 23 February 1994)
D. Negligence – Arts. 1172, 1173
 Cangco v. Manila Railroad Co. (G.R. No. L-12191, 14 October 1918)
 Africa, et al. v. Caltex Phils (G.R. No. L-12986, 31 March 1966, 16 SCRA 448)
 Sarmiento v. Sps. Cabrido (G.R. No. 141258, 9 April 2003, 401 SCRA 122)
 Crisostomo v. CA (G.R. No. 138334, 25 August 2003, 409 SCRA 528)
E. Contravention of the tenor
 Chavez v. Gonzales (G.R. No. 27454, 30 April 1970, 32 SCRA 547)
 Telefast v. Castro (G.R. No. 73867, 29 February 1988, 158 SCRA 445)
 Magat vs. Medialdea (G.R. No. L-37120, 20 April 1983)
III. Fortuitous Event – Art. 1174

 Juan Nakpil and Sons v. CA (144 SCRA 597 (1986))

 Republic v. Luzon Stevedoring Corporation (G.R. No. L-21749, 29 September 1967, 21
SCRA 279)
 Austria vs. Court of Appeals (G.R. No. L-29640, 10 June 1971)
 National Power Corporation vs. Honorable Court of Appeals (G.R. No. L-47379, 16 May 
1988)
 Yobido v. CA (G.R. No. 113003, 17 October 1997, 281 SCRA 1)
 Co v. CA (G.R. No. 124922, 22 June 1998, 291 SCRA 111)
 Southeastern College Inc. vs. Court of Appeals (G.R. No. 126389, 10 July 1998)
IV. Usurious Transactions – Art. 1175, 1413, 1961
Read: Act No. 2655; PD 858; PD 1685; Central Bank Circular No. 416; Central Bank
Circular No. 905 (1982) lifting the interest rate ceiling- (vs. 2209); Central Bank Circular
No. 796, Series of 2013 (1 July 2013) – legal interest at 6%
 Eastern Shipping Lines v. CA (G.R. No. 97421, 12 July 1994, 234 SCRA 781)
 Crismina Garments v. CA (G.R. No. 128721, 9 March 1999, 304 SCRA 356)
 Keng Hua Products v. CA (G.R. No. 116863, 12 February 1998)
 Security Bank v. RTC Makati (263 SCRA 453 (1996))
 Almeda v. CA (G.R. No. 113412, 17 April 1996, 256 SCRA 292)
 First Metro Investment vs. Este. Del Sol (G.R. No. 141811, 15 November 2001, 369
SCRA 99)
 Nacar v. Gallery Frames (G.R. No. 189871, 13 August 2013, 703 SCRA 439)
Accion Pauliana – Art. 1177, 1381 par. 3

 Khe Hong Cheng v. CA (G.R. No. 144169, March 28, 2001, 355 SCRA 701)
 Siguan vs. Lim (G.R. No. 134686, 19 November 1999)

V. Different Kinds of Obligations

A. Pure and Conditional Obligations – Art. 1179 par. 1., Art. 1182
 HSBC v. Spouses Broqueza (G.R. No. 178610, 17 November 2010)
 Gaite v. Fonacier (G.R. No. L-11827, 31 July 1961, 2 SCRA 830)
 Gonzales vs. Heirs of Thomas (314 SCRA 585 (1999))
a. Suspensive condition
 Romulo A. Coronel, et al vs. The Court of Appeals, et al (G.R. No. 103577, 7 October
1996)
b. Resolutory condition
  Central Philippine University v. CA (G.R. No. 112127, 17 July 1995, 246 SCRA 511)
 Quijada v. CA (G.R. No. 126444, 4 December 1998)
c. Postestative condition
 Lao Lim vs. CA (G.R. No. 87047, 31 October 1990)
d. Mixed condition
 Osmeña vs Rama (G.R. No. 4437 , 9 September 1909)
 Hermosa v. Longara (93 Phil. 971 (1953))
 Taylor v. Uy Tieng Piao (43 Phil. 873 (1922))
 Rustan Pulp and Paper Mills v. IAC (G.R. No. 70789, 19 October 1992)
 Romero vs. CA (G.R. No. 107207, 23 November 1995)
e. Impossible condition – Art. 1183
 Roman Catholic Archbishop of Manila v. CA (G.R. No. 77425, 19 June 1991, 198 SCRA
300)
 Heirs of San Miguel v. CA (G.R. No. 136054, 5 September 2001)
f. Effect of prevention of the fulfillment of the condition by the obligor – Art. 1186
 Herrera v. Leviste (G.R. No. 55744, 28 February 1985)
 Int’l Hotel Corp v. Joaquin, Jr. (G.R. No. 158361, 10 April 2013)
g. Rescission of Reciprocal Obligations – Art. 1191, 1192
Substantial v. casual breach
 Song Fo & Company vs Hawaiian Philippine Co. (G.R. No. 23769, 16 September 1925)
Obligation to return the object
 De Erquiaga v. CA (G.R. No. 47206, 27 September 1989, 178 SCRA 1)
Automatic rescission
 UP vs. De Los Angeles (G.R. No. L-28602, 29 September 1970)
 Angeles v. Calasanz (G.R. No. L-42283, 18 March 1985, 135 SCRA 323)
 Iringan v. Court of Appeals (G.R. No. 129107, 26 September 2001, 366 SCRA 41)
 Palay, Inc. vs. Clave (G.R. No. L-56076, 21 September 1983, 124 SCRA 7)
Contract to sell
 Visayan Sawmill Company, Inc. vs. The Honorable Court of Appeals and RJH
Trading (G.R. No. 83851, 3 March 1993)
Rescission when obligation becomes impossible
 Ayson-Simon v. Adamos (G.R. No. L-39378, 28 August 1984, 131 SCRA 439)
 Deiparine vs. CA and Trinidad (G.R. No. 96643, 23 April 1993)
B. Obligations with a Period – Art. 1193, 1180
 Solante v. COA (G.R. No. 207348, 19 August 2014)
Presumption – Art. 1196
 Ponce de Leon v. Syjuco (G.R. No. L-3316, 31 October 1951)
 Buce v. CA (G.R. No. 136913, 12 May 2000)
When court may fix a period – Art. 1197
 Araneta v. Philippine Sugar Estate Development Co. (G.R. No. L-22558, 31 May 1967)
C. Alternative Obligation
 Arco Pulp and Paper Co, v. Lim (G.R. No. 206806, 25 June 2014)
D. Solidary Obligation
Art. 1211
 Inchausti v. Yulo (G.R. No. L-7721, 25 March 1914)
Art. 1217 to 1220
 Quiombing v. CA (G.R. No. 93010, 30 August 1990)
 Inciong v. CA (G.R. No. 96405, 26 June 1996)
 Vigilla v. Phil. College of Criminology, Inc. (G.R. No. 200094, 10 June 2013)
 Diamond Builders v. Country Bankers (G.R. No. 171820, 13 December 2007)
Defenses available to a solidary debtor against the creditor – Art. 1222
  Alipio v. CA (G.R. No. 134100, 29 September 2000)
 Lafarge Cement Phil v. Continental Cement (G.R. No. 155173, 23 November 2004)
E. Divisible and Indivisible Obligations
 Capalla v. COMELEC (G.R. No. 201112, 23 October 2012)
F. Obligation with a Penal Clause
 Makati Dev’t Corp. v. Empire Insurance Co. (G.R. No. L-21780, 30 June 1967)
 Country Bankers Insurance vs. CA (G.R. No. 85161, 9 September 1991)
Chapter 4 Extinguishment of Obligation
Art. 1249
 Papa v. Valencia (G.R. No. 105188, 23 January 1998)
 PAL v. Court of Appeals (G.R. No. L-49188, 30 January 1990)
Application of Payments
 Reparations Commission v. Universal Deep Sea Fishing (A.M. No. 21901-96, 27 June
1978)
 Paculdo v. Regalado (G.R. No. 123855, 20 November 2000)
Payment by Cession / Dation in Payment
 Development Bank of the Philippines v. Court of Appeal (G.R. No. 118342, 5 January
1998)
 Filinvest Credit Corporation v. Philippine Acetylene (G.R. No. L-50449, 10 January 1982)
Tender of Payment and Consignation
 De Guzman v. Court of Appeals (G.R. No. L-52733, 23 July 1985)
 TLG International Continental Enterprising, Inc. v. Flores (G.R. No. L-35381, 31 October
1972)
 McLaughlin v. Court of Appeals (G.R. No. L-57552, 10 October 1986)
 Soco v. Militante (G.R. No. L-58961, 28 June 1983, 123 SCRA 160)
 Sotto v. Mijares (G.R. No. L-23563, 8 May 1969)
 Chan vs. Court of Appeals (G.R. No. 109020, 3 March 1994)
 Meat Packing Corp vs. Sandiganbayan (G.R. No. 103068, 22 June 2001)
 Pabugais v. Sahijwani (G.R. No. 156846, 23 February 2004)
Impossibility of Performance
 Occeña v. CA (G.R. No. L-44349, 29 October 1976)
 Naga Telephone Co. v. CA (G.R. No. 107112, 24 February 1994)
 PNCC vs. CA (G.R. No. 116896, 5 May 1997)
Condonation or Remission
 YAM vs. CA (G.R. No. 104726, 11 February 1999)
 Trans-Pacific Industrial Supplies, Inc. v. Court of Appeals (G.R. No. 109172, 19 August
1994)
Compensation
 CKH Industrial Development Corp. v. Court of Appeals (G.R. No. 111890, 7 May 1997)
 Bangko Sentral v. COA (G.R. No. 168964, 23 January 2006)
 Gan Tion v. CA (G.R. No. L-22490, 21 May 1969)
 Bank of Philippine Islands v. Reyes (G.R. No. 116792, 29 March 1996)
 PNB v. CA (G.R. No. 108052, 14 July 1996)
 Silahis Marketing Corp vs. IAC (G.R. No. L-74027, 7 December 1989)
Novation
Art. 1292 Objective Novation
 Millar v. CA (G.R. No. L-29981, 30 April 1971)
 Magdalena Estate v. Rodriguez (G.R. No. L-18411, 17 December 1966)
 Broadway Centrum Condominium Corp vs. Tropical Hut (G.R. No. 79642, 5 July 1993)
 California Bus Line v. State Investment (G.R. No. 147950, 11 December 2003)
  Ong v. Bognabal (G.R. No. 149140, 12 September 2006)
 Sps. Reyes v. BPI Family (G.R. No. 149840, 31 March 2006)
Change of Debtor
 Metrobank v. Rural Bank of Gerona (G.R. No. 159057, 5 July 2010)
 Quinto vs. People (G.R. No. 126712, 14 April 1999)
Change of Creditor
 Reyes v. Secretary of Justice (G.R. No. 120817, 4 November 1996)
 Astro Electronics Corp. vs. Philippine Export and Foreign Loan Guarantee
Corporation (G.R. No. 136729, 23 September 2003)
 Metrobank v. Rural Bank of Gerona (G.R. No. 159057, 5 July 2010)
Title II. CONTRACTS
Chapter 1. General Provisions
Autonomy
 Gabriel v. Monte de Piedad and CA (G.R. No. L-47806, 14 April 1941)
 Pakistan International Airlines v. Ople (G.R. No. 61594, 28 September 1990)
 Rivera v. Solidbank (G.R. No. 163269, 19 April 2006)
 Cui v. Arellano University (G.R. No. L-15127, 30 May 1961)
 Arroyo v. Berwin (G.R. No. L-10551, 3 March 1917)
 Bustamante v. Rosel (G.R. No. 126800, 29 November 1999)
Nominate / Innominate Contracts
 Corpuz v. CA and David (G.R. No. L-40424, 30 June 1980)
Mutuality
 GSIS v. CA (G.R. No. 105567, 25 November 1993)
 Professional Academic Plans, Inc. Francisco Colayco and Benjamin Dino v.
Crisostomo (G.R. No. 148599, 14 March 2005)
Relativity
 DKC Holdings Corp. v. CA (G.R. No. 118248, 5 April 2000)
Stipulation pour autrui
 Florentino v. Encarnacion (G.R. No. L-27696, 30 September 1977)
 Coquia v. Fieldmen’s Insurance Co. (G.R. No. L-23276, 29 November 1968)
 Constantino v. Espiritu (G.R. No. L-22404, 31 May 1971)
Interference by third persons
 Daywalt v. Corp. (G.R. No. L-13505, 4 February 1919)
 So Ping Bun v. CA (G.R. No. 120554, 21 September 1999)
 Jose Lagon v. CA and Lapuz (G.R. No. 119107, 18 March 2005)
Chapter 2. Essential Requisites of Contracts
A. Period for Acceptance – Art. 1324 & Art. 1479
 Sanchez v. Rigos (G.R. No. L-25494, 14 June 1972)
 Tuazon v. Del Rosario-Suarez (G.R. No. 168325, 13 December 2010)
 Adelfa Properties v. CA (G.R. No, 111238, 25 January 1995)
B. Mistake
 Asiain v. Jalandoni (G.R. No. L-20435, 23 October 1923)
C. When one of the parties is unable to read – Art. 1332
 Dumasug v. Modelo (G.R. No. L-10462, 16 March 1916)
 Leonardo v. CA (G.R. No. 125485, 13 September 2004)
D. Inexcusable mistake – Art. 1333
 Domingo Realty v. CA (G.R. No. 126236, 26 January 2007)
E. Violence and intimidation – Art. 1335
 Martinez v. Hongkong and Shanghai Bank (G.R. No. L-5496, 19 February 1910)
F. Undue influence – Art. 1337
 Loyola v. CA (G.R. No. 115734, 23 February 2000)
G. Fraud or dolo – Art. 1338
 Woodhouse v. Halili (31 July 1953, 93 Phil. 526)
 Sps. Tongson v. Emergency Pawnshop (G.R. No. 167874, 15 January 2010)
 ECE Realty v. Mandap (G.R. No. 196182, 1 September 2014)
H. Usual exaggerations in trade; opportunity to know the facts – Art. 1340
 Laureta Trinidad v. IAC (G.R. No. L-65922, 3 December 1991)
I. Mere expression of an opinion – Art. 1341
 Songco v. Sellner (G.R. No. L-11513, 4 December 1917)
J. Misrepresentation
 Mercado and Mercado v. Espiritu (G.R. No. L-11872, 1 December 1917)
 Braganza v. Villa Abrille (G.R. No. L-12471, 13 April 1959)
K. Simulation of Contracts
 Suntay v. CA (G.R. No. 114950, 19 December 1995)
 Blanco v. Quasha (G.R. No. 133148, 17 November 1999)
L. Object of Contracts
Future inheritance
 Blas v. Santos (G.R. No. L-14070, 29 March 1961)
 J.L.T. Agro, Inc. vs. Balansag and Cadayday (G.R. No. 141882, 11 March 2005)
M. Cause of Contracts
 Liguez v. CA (G.R. No. L-11240, 18 December 1957)
 Sps. Buenaventura, et. al. v. CA (G.R. No. 126376, 20 November 2003)
Chapter 3. Form of Contracts
 Dauden-Hernaez v. De los Angeles (G.R. No. L-27010, 30 April 1969)
 Cenido v. Sps. Amadeo (G.R. No. 132474, 19 November 1999)
Chapter 4. Reformation of Instruments
 Bentir v. Leande (G.R. No. 128991, 12 April 2000)
 Sarming, et. al. v. Cresencio Dy, et. al. (G.R. No. 133643, 6 June 2002)
Chapter 5. Interpretation of Contracts
 Borromeo v. CA (G.R. No. 133643, 6 June 2002)
DEFECTIVE CONTRACTS
Chapter 6. Rescissible Contracts
Art. 1380
 Lalicon v. NHA (G.R. No. 185440, 13 July 2011)
Art. 1387 Badges of Fraud
 Oria v. McMicking (G.R. No. L-7003, 18 January 1912)
 China Banking v. CA (G.R. No. 129644, 7 March 2000)
Chapter 7. Voidable or Annullable Contracts
 Francisco v. Herrera (G.R. No. 139982, 21 November 2002)
 Heirs of Ureta v. Heirs of Ureta (G.R. No. 165748, 14 September 2011)
 Uy Soo Lim v. Tan Unchuan (G.R. No. 12605, 7 September 1918)
Chapter 8. Unenforceable Contracts
 Sps. Torcuator v. Sps. Bernabe (G.R. No. 134219, 8 June 2005)
 Carbonnel v. Poncio, et al. (G.R. No. L-11231, 12 May 1958)
Chapter 9. Void or Inexistent Contracts
 Ching v. Goyanko, Jr. (G.R. No. 165879, 10 November 2006)
 Urada v. Mapalad (A.M. MTJ 91-622, 22 March 1993)
 Modina v. CA (G.R. No. 109355, 29 October 1999)
 Banking Corp. v. Lui She (G.R. No. L-17587, 12 September 1967)
 Frenzel v. Catito (G.R. No. 143958, 11 July 2003)

Title III. NATURAL OBLIGATIONS

 Fisher v. Robb (G.R. No. 46274, 2 November 1939, 69 Phil. 101)
Title IV. ESTOPPEL
 Kalalo v. Luz (G.R. No. L-27782, 31 July 1970, 34 SCRA 337)
 Manila Lodge No. 761 Benevolent and Protective Order of the Elks v. CA (G.R. No. L-
41001, 30 September 1976, 73 SCRA 168)
 Miguel v. Catalino (G.R. No. L-23072, 29 November 1968, 26 SCRA 234)
Title V. TRUST
 Juan v. Yap, Sr. (G.R. No. 182177, 30 March 2011)
 Aznar Brothers Realty Company v. Aying (G.R. No. 144773, 16 May 2005)
 Heirs of Valientes v. Hon. Rama (G.R. No. 157852, 15 December 2010)

To give- order book shoppee, deliver what you ordered, pay a loan,
To do – to teach-
Not to do – not to endorse patronize competitioe products

Revised Penal Code Article 100 to Article 113

Quasi-Contract Article 2142 to 2175
Quasi delict article 2176 to 2194
UP DND Accord have the force of law

1. Obligations
a. Meaning of obligation (Art. 1156, NCC)
b. Concept and Elements of Obligation
Active subject
Passive subject
The object or prestation
The efficient cause
c. Essential Requisites of Obligations
d. Sources of Obligations; Sources Classified
e. Contractual Obligations; Compliance in Good Faith
f. Quasi-contractual Obligations; Kinds of Quasi-contracts
g. Obligations Arising from Quasi-delicts
h. Concept of Obligor and Obligee

2. Nature and Effect of Obligations (Part I)

a. Meaning of Specific or
Determinate Thing and Generic or Indeterminate Thing
b. Rights of Creditor and Duties of Debtor
b.1 Different Kinds of Fruit
b.2 When Obligation to Deliver the Fruits Arises
b.3 Personal Right vs Real Right
b.4 Accessions vs Accessories
c. Obligations to Give (Arts. 1163, NCC)
d. Obligations to Do
e. Obligations Not to Do