Jose Rizal University

Law School Division

Academic Year 2022 – 2023

Course Title: Obligations and Contracts

Course Code: JD502
Credit Units: 5 units
Course Description: An in-depth study of the nature, kinds and effect of
obligations and their extinguishment; contracts in general, their requisites, form and
interpretation; defective contracts, quasi contracts, natural obligations, and estoppel.
The course also covers civil code provisions on Sales as a special contract; the
application of provisions of contracts and obligations in contract of sales and the
special rules under Art.1458-1637 which are applicable to sales only.

The course is an enhancement of the previous Obligations and Contracts course

through the integration of the basics of the law on sales.

Course Outline:

I. Law on Obligations
A. Definition of Obligation
B. Kinds of Obligation
a. Moral
b. Natural

Cases:
- Ansay vs. National Development Corporation, G.R. No. L-13667,
April 29, 1960
- Fisher vs. Robb, 69 Phil. 101
- Development Bank of the Philippines vs. Adil, G.R. No. L-48889,
May 11, 1989
- Specified Contractors & Development, Inc. vs. Pobocan, G.R. No.
212472, January 11, 2018

c. Civil

C. Essential Requisites of Civil Obligation

D. Sources of Civil Obligation
a. Law

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 b. Contracts
c. Quasi-Contracts
1. Negotiorum Gestio
2. Solutio Indebiti
3. Other Quasi-Contracts

Cases:
- Gonzalo Puyat & Sons, Inc. vs. City of Manila and Sarmiento,
G.R. No. L-17447, April 30, 1963
- Cruz vs. J.M. Tuason & Company, Inc., G.R. No. L-23749, April
29, 1977
- Andres vs. Manufacturers Hanover & Trust Corporation, G.R. No.
82670, September 15, 1989

d. Acts/omissions punished by law

e. Quasi-Delict

Cases:
- Mangonon vs. CA, G.R. No. 125041, June 30, 2006
- PSBA vs. Court of Appeals G.R. No. 84698, January 4, 1992
- YHT Realty Corporation vs. Court of Appeals, G.R. No. 126780,
February 17, 2005
- Manliclic et.al. vs. Calaunan, G.R. No. 150157, January 25, 2007
- Barredo v. Garcia, 73 Phil. 607
- Mendoza vs. Arrieta, 91 SCRA 113
- PSBA vs. CA, 205 SCRA 729
- Amadora vs. CA, 160 SCRA 315

E. Nature and Effects of Civil Obligation

Cases:
- Chaves vs. Gonzales, G.R. No. L-27454, April 30, 1970
- Mackay vs. Spouses Caswell, G.R. No. 183872, November 17,
2014
- Tanguilig vs. CA, G.R. No. 117190, January 2, 1997
- Buenviaje vs. Sps. Salonga, G.R. No. 216023, October 5, 2016
- Velarde vs. Court of Appeals, 361 SCRA 56
- Song Fo vs. Hawaiian Philippines, 47 Phil. 821
- Vermen Realty vs. Court of Appeals, 224 SCRA 549
- Woodhouse vs. Halili, 93 Phil. 526

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 - Gutierrez vs. Gutierrez, 56 Phil. 177
- Vasquez vs. Borja, 74 Phil. 560
- De Guia vs. Manila Electric, 40 Phil. 706
- Sarmiento vs. Sps. Cabrido, 401 SCRA 122
- Crisostomo vs. CA, 409 SCRA 528
- NPC vs. CA, 211 SCRA 162
- Cetus Development Corp. vs. CA, 176 SCRA 72
- Abella vs. Francisco, 55 Phil. 447
- Vda. de Villaruel vs. Manila Motor, 104 Phil. 926
- Central Bank vs. CA, 139 SCRA 46
- Chavez vs. Gonzales, 32 SCRA 547
- Telefast vs. Castro, 158 SCRA 445
- Arrieta vs. NARIC, 10 SCRA 79
- Tanguilig vs. CA, 266 SCRA 78
- Khe Hong Cheng vs. CA, 355 SCRA 701
- Siguan vs. Lim, 318 SCRA 725
- Juan Nakpil & Sons vs. CA, 144 SCRA 597
- Dioquino vs. Laureano, 33 SCRA 65
- Austria vs. CA, 39 SCRA 527
- NPC vs. CA, 161 SCRA 334
- Yobido vs. CA, 281 SCRA 1
- Phil. Free Press vs. CA, G.R. No. 132864, Oct. 24, 2005
- Phil.Com Satellite Corp. vs. Globe Telecom, G.R. No. 147324,
May 15, 2004

F. Kinds of Civil Obligation

a. Pure Obligation
b. Conditional Obligation

Cases:
- Gaite vs. Fonacier, G.R. No. L-11827, July 31, 1961
- Coronel et.al. vs. CA, G.R. No. 103577, October 7, 1996
- Parks vs. Province of Tarlac, et.al., G.R. No. L-24190, July 13,
1926
- CPU vs. CA, G.R. No. 112127, July 17, 1995
- Quijada vs. CA, G.R. No. 126444, December 4, 1998
- Rustan Pulp & Paper Mills, Inc. vs. IAC, G.R. No. 70789, October
19, 1992
- Gonzales vs. Heirs of Thomas, 314 SCRA 585

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 - Lim vs. CA, 263 SCRA 569
- The Wellex Group, Inc. vs. U-Land Airlines, Co. Ltd., G.R. No.
167519, January 14, 2015
- Spouses Silos vs. PNB, G.R. No. 181045, July 2, 2014

c. Obligation with a Period

Case:
- Gregorio Araneta, Inc. vs. Phil. Sugar Estates Development Co.,
Ltd., G.R. No. L-22558, May 31, 1967

d. Alternative Obligation
e. Facultative Obligation
f. Joint Obligation
g. Solidary Obligation
h. Divisible Obligation
i. Indivisible Obligation
j. Obligation with a Penal Clause

Cases:
- Rivelisa Realty, Inc. vs. First Sta. Clara Builders Corporation,
G.R. No. 189618, January 15, 2014
- New World Developers and Management, Inc. vs. AMA Computer
Learning Center, Inc., G.R. No. 187930, February 23, 2015
- Makati Development Corporation vs. Empire Insurance, 20 SCRA
557
- Tan vs. CA, 367 SCRA 571
- Macalinao vs. BPI, G.R. No. 175490, September 17, 2009

G. Extinguishment of Civil Obligation

a. Payment or Performance

Case:
- PCI Bank vs. Franco, G.R. No. 180069, March 5, 2014

A. Special Forms of Payment

1. Application of Payment

Cases:

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- Reparations Commission vs. Universal Deep Sea Fishing, 83
SCRA 764
- Paculdo vs. Regalado, 345 SCRA 134

2. Dation in Payment

Cases:
- PNB vs. Dee, G.R. No. 182128, February 19, 2014
- Tan Shuy vs. Spouses Maulawin, G.R. No. 190375, February 8,
2012
- DBP vs. CA, 284 SCRA 14
- Filinvest Credit Corporation vs. Philippine Acetylene Co., Inc.,
G.R. No. L-50449, January 30, 1982

3. Payment by Cession
4. Tender of Payment and Consignation

Cases:
- Co vs. PNB, 114 SCRA 842
- Ramos vs. Sarao, 451 SCRAb 103
- De Guzman v. CA, 137 SCRA 730
- TLG International v. Flore,s 47 SCRA 437
- McLaughlin v. CA, 144 SCRA 693
- Soco v. Militante, 123 SCRA 160
- Sotto v. Mijares, 28 SCRA 17

b. Loss of the Thing Due

c. Impossibility of Performance

Cases:
- Osmeña III et.al vs. SSS, G.R. No. 165272, September 13, 2007
- Tagaytay Realty Co., Inc. vs. Gacutan, G.R. No. 160033, July 1,
2015
- Naga Telephone Co., vs. CA, 230 SCRA 351
- Comglasco Corporation Vs. Santos Car Check Center
Corporation, G.R. No. 202989, March 25, 2015
- Iloilo Jar Corporation vs. Comglasco Corporation, G.R> No.
219509, January 18, 2017

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 d. Condonation or Remission of Debt

Cases:
- Yam vs. CA, G.R. No. 104726, February 11, 1999
- Bognot vs. RRI Lending Corporation, G.R. No. 180144, September
24, 2014

e. Confusion or Merger of Rights

f. Compensation

Cases:
- Tion vs CA, G.R. No. L-22490, May 21, 1969
- Philippine Trust Company vs. Spouses Roxas, G.R. No. 171897,
October 14, 2015
- Union Bank of the Philippines vs. DBP, G.R. No. 191555, January
20, 2014
- First United Constructors Corporation et.al vs. Bayanihan
Automotive Corporation, G.R. No. 164985, January 15, 2014
- California Manufacturing Co., Inc. vs. Advanced Technology
System, Inc., G.R. No. 202454, April 25, 2017

g. Novation

Cases:
- Millar vs. CA 38 SCRA 642
- Dormitorio v. Fernandez 72 SCRA 388
- Magdalena Estate v. Rodriguez 18 SCRA 967
- Reyes v. Secretary of Justice 264 SCRA 35
- Garcia vs. Llamas 417 SCRA 2003
- Quinto vs. People 305 SCRA 709

II. Law on Contracts

A. Characteristics of a Contract

Cases:
- Heirs of Manuel Uy vs. Castillo et.al., G.R. No. 176425, June 5,
2013

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 - R.S. Tomas, Inc. vs. Rizal Cement Company, Inc. G.R. No. 173155,
March 21, 2012
- Surviving Heirs of Alfredo Bautista vs. Spouses Lindo, G.R. No.
208232, March 10, 2014
- PNB vs. Spouses Manalo, G.R. No. 174433, February 24, 2014
- Spouses Manalo vs. PNB, G.R. No. 181045, July 2, 2014
- FBDC vs. Fong, G.R. No. 209370, March 25, 2015
- Rojales vs. Dime, G.R. No. 194548, February 10, 2016

B. Stages of a Contract
a. Preparation
b. Perfection
c. Consummation
C. Classification of Contracts
D. Elements of Contract
a. Natural
b. Accidental
c. Essential
1. Consent

Cases:
- Malbarossa vs. Court of Appeals G.R. No. 125761. April 30, 2003
- BPI vs. Montessori Internationale, G.R. No. 149454, May 28, 2004
- Traders Royal Bank vs. Cuison Lumber Co., G.R. No. 174286,
June 5, 2009
- Spouses Gironella vs. PNB, G.R. No. 194515, September 16, 2015
- The Roman Catholic Church vs. Pante, G.R. No. 174118, April 11,
2012
- ECE Realty and Development, Inc. vs. Mandap, G.R. No. 196182,
September 1, 2014
- Metropolitan Fabrics, Inc. vs. Prosperity Credit Resources, Inc.,
G.R. No. 154390, March 17, 2014

2. Object

Case:
- WT Construction, Inc. vs. The Province of Cebu, G.R. No. 208984,
September 16, 2015

3. Cause

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 Cases:
- Spouses Buenaventura et.al. vs CA, G.R. No. 126376, November
20, 2003
- Liguez vs. CA, G.R. No. L-11240, September 16, 2015

E. Reformation and Interpretation of Contracts

F. Defective Contracts
a. Rescissible

Cases:
- Universal Food Corp. Vs. Court of Appeals 22 SCRA 1
- Spouses Cannu vs. Spouses Galang G.R. No. 139523 May 26, 2005
- Rivera vs. del Rosario G.R. No. 144934 January 15, 2004
- Suntay vs. Court of Appeals 251 SCRA 430
- China Banking Corporation vs. Court of Appeals G.R. No. 129644,
March 7, 2000
- MR Holdings Limited vs. Carlos G.R. No. 138104 April 11, 2002

b. Voidable

Cases:
- Development Bank of the Philippines vs. CA L-28774- February
28, 1980
- Samahan ng Magsasaka sa San Josep vs. Valisno 430 SCRA 629
- Malabanan vs. Gaw Ching 181 SCRA 84
- Uy Soo Lim vs. Tan Unchuan 38 Phi. 552
- Kapunan vs. Kapunan Jr. G.R. No. 132415. January 30, 2002)
- Arra Realty Corporation vs. Guarantee Development Corporation,
438 SCRA 441

c. Unenforceable

Cases:
- Neri et.al., vs. Heirs of Hadji Yusop Uy, G.R. No. 194366, October
10, 2012
- Iglesia Filipina Independente vs. Heirs of Bernardino Taeza, G.R.
No. 179597, February 3, 2014

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 - Limketkai Sons Milling Inc. vs. CA, G.R. No. 118509, March 29,
1996
- Heirs of Natividad vs. Mauricio Natividad, G.R. No. 198434,
February 29, 2016

d. Void

Cases:
- Fullido vs. Grilli, G.R. No. 215014, February 29, 2016
- Gonzalo vs. Tarnate, Jr., G.R. No. 160600, January 15, 2014
- Nicolas vs. Mariano, G.R. No. 201070, August 1, 2016
- Tingalan vs. Spouses Melliza, G.R. No. 195247, June 29, 2015
- Clemente vs. CA, G.R. No. 175483, October 14, 2015
- Sta. Fe Realty, Inc. vs. Sison, G.R. No. 199431, August 31, 2016

III. Law on Sales

A. Definition of Sale
B. Requisites of Valid Contract of Sale
C. Characteristics of Contract of Sale
D. Parties to a Contract of Sale and their Rights and Obligations
E. Remedies of Parties for Breach of Contract of Sale
F. Extinguishment of Contract of Sale

IV. Law on Estoppel

A. Definition of Estoppel
B. Kinds of Estoppel
C. Persons Bound by the Law on Estoppel

Cases:

- Maneclang vs. Baun, G.R. No. L-27876, April 22, 1992

- NPC vs. Alonzo-Legasto, G.R. No. 148318, November 22, 2004
- Mendoza vs. CA, G.R. No. 116710, June 25, 2001
- Caluban vs. Ricarcen Development Corporation, G.R. No. 202364,
August 30, 2017

References:

1. Civil Code of the Philippines (Annotated) – Book IV and V

Author: Edgardo Paras

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2. Civil Code of the Philippines (Annotated) – Book IV and V
Author: Arturo M. Tolentino

3. Obligations and Contracts

Author: Melencio S. Sta. Maria, Jr.

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