But in the case of Ka Kuen Chua v.

Colorlite Marketing, the obligation is a reciprocal one

arising
out of a contract or piece of work and specifically that contract is a contract to build. In a
contract to build, mayroon kang obligation to deliver what has been built.
In that case of Colorlite, may tanong, kung ayaw na ng contractor ituloy yung project but
wala
namang fault yung owner, nagkasamaan lang sila ng loob, sabi ng contractor “ayaw ko na
ituloy
kasi di na tayo bati.” mayroon nang strained relationship.

Issue: Can the contractor be compelled to finish the project?

Contractor’s contention: No, because that will amount to involuntary servitude.
Supreme Court ruling: May be compelled. [So yung sinabi ng SC na yan na pwede, interpret
natin yan as applicable in contract or piece of work involving an obligation to construct a
building.] Because the exception must be construed strictly. I-apply lang natin yung sinabi ng
SC
that will fit into the facts of the case. Sa facts of the case, ang reason lang ng contractor in not
finishing the project is strained relationship between them, at wala namang fault si owner

Third, there are cases saying that the running of the prescriptive period for the filing of the
action will only commence from the time that the debtor was in default or in delay. But be
careful
in the application of that ruling

To clarify, those cases where the SC ruled that the running of the prescriptive period will only
be
reckoned from the time that the debtor was in default or in delay and without cause of action
to
commence the action and without demand referring to extrajudicial, that is applicable only in
situations where the obligation is payable on installments and that there was failure to pay
certain installments.

If you will notice from the ruling of SC, most of the cases are extrajudicial foreclosure of
the
mortgage. The cases mentioned by the SC requiring a demand for the prescriptive period to
run, most of those cases are in relation to extrajudicial foreclosure sale.
In extrajudicial foreclosure sale, normally the ground is failure to pay some of the
installments.

To borrow the words of the SC, if there was contributory fault or negligence on the part of the
debtor, the entire event is humanized. Ibig sabihin, yung loss is not by reason of an act of
God.
It will be all attributed to the fault of the debtor.

in our jurisprudence, the SC clarifies, Art. 1182 ung condition that is

potestative on the part of the debtor, dalawang klase yan, maaaring that condition is at the
same
time suspensive or that condition is at the same time resolutory.
Ano yung tinutukoy na void obligation in Art. 1182?
Sabi ng Jurisprudence, the obligation that is declared void in Art. 1182 is that which is
subjected
to a potestative condition on the part of the debtor and at the same time the condition is
suspensive. Meaning, the obligation is valid even if the condition is potestative on the part of
the
debtor if at the same time the condition is resolutory

Merong kabaliktaran ang doctrine na yan, if it is the debtor who complied with his part and it
is the 3rd person who failed to comply and refuses to comply, what will happen to the
condition?

It is not provided for in the law but meron tayong jurisprudence, that is provided for in our
jurisprudence.

Jurisprudence provides that the entire condition is also deemed constructively fulfilled if the
debtor did all in his power to comply, but the condition was not actually complied because of
the third person over whom the debtor has no control. So, sabi ng court, the entire condition is
also
deemed constructively fulfilled. At tinawag yan ng Supreme Court na rule on constructive
fulfillment of mixed conditional obligations.

2nd

Example,
if the obligation is payable on demand, according to jurisprudence, an obligation payable
on demand is a pure obligation. It is not one with a period. So, in a pure obligations, the
intention of the parties is walang condition, walang period. So, the Court cannot make
the obligation one with a period if the intention is that is is a pure obligation. It is not
allowed that the Court change the contract of parties. That is for the parties themselves
to do by way of novation.

3rd

Bago ako umalis sa condonation, halimbawa ang mga private employers meron silang
obligation na gawin miyembro ng SSS ang mga employees nila, and they are required to
remit,
yung monthly payment to SSS, may portion dyan contribution ng employee and employer,
meron isang employer na hindi siya nag rremit ng mga SSS contributions for a certain number
of years, kaya nung nagbayad siya he was made to pay penalties, , then a law was passed by
congress na condoning yung mga penalties on unpaid SSS contribution, nung nagging
effective
yung batas, yung employer na nag bayad na, he wants to recover the penalties that he paid,
ang reason nya, condonation of the obligation to pay penalties, if you are the court, can you
allow the recovery of the paid penalties on the ground of condonation pursuant to a law
passed by congress? Bakit hindi applicable ang concept ng condonation? Kailan
applicable ang condonation?
-
For a condonation may apply, the debt must be existing and demandable. Hindi na
applicable ang condonation to a debt that was already paid, because a debt that was
already paid was already extinguish by payment.

Requisites of valid condonation

1. gratuitous
2. demandable at the time of remission
3. accpeted by the debtor
4. not inofficious
5. made expressly

What are the requisites of legal compensation?

1. The parties must be both the creditor and the debtor of each other in their own right
2. the parties must be bound principally
3. both debts consist in sum of money or if consists of consumable, they be of the same kind
and same quality if the latter has been stated.
3. Both debts are, due and demandable
4. There must be no retention of either of the debts.

The government is indebted to a taxpayer, and the taxpayer has an obligation to pay
taxes to the government, may those obligations be the subject matter of legal
compensation?
-
No, because the government and the taxpayer are not creditors and debtors of each
other.

Taxes are not in the nature of a debt, as contemplated by our law on compensation,
because the taxpayer owes the government taxes, not pursuant to the government’s
corporate capacity, instead, the taxpayer owes tax to the government in the
government’s sovereign capacity.

Ulitin ko, yung utang ni debtor, it is guaranteed by the guarantor by way of a contract
of guaranty. But itong si creditor may utang din kay guarantor. Kung maniningil si
guarantor, pwede bang depensa ni creditor, “legal compensation, wala na akong utang
sa’yo.” Applicable?
-
No, because the creditor and the guarantor are not mutual debtors and creditors of each other.

The parties must be bound principally.

In this case, They are not “principally” bound with each other as creditor and debtor.

But let us assume, hindi nakapagbayad si debtor kay creditor at lahat ng mga properties
ni debtor ay na-exhaust na, pero hindi pa rin bayad ang utang. So maniningil na ngayon
si creditor kay guarantor. Si guarantor, pwede bang sabihin niya kay creditor, “Bakit
ka maniningil sakin, e may utang ka din sakin? Compensation!” Is that a valid defense
on the part of the guarantor? “Bakit ko kailangang magbayad sayo, e may utang ka rin
sakin? Compensation!” Pwede ba yon?
-
Yes, obviously. Compensation can be invoked by the guarantor against the creditor. But
the creditor cannot invoke compensation against the guarantor because guarantor is not a
principal but only subsidiary
The guarantor may set up credits which personally belong to him and also credits which
personally belong to the principal

Habang nasa SC ang kaso, pwede nabang nagkaroon na tayo ng legal compensation?

Yes sabi ng SC. It is because when the CA affirmed the decision of the RTC on questions of
fact, final na iyan. Hindi iyan pwedeng reviewhin ng SC ordinarily. Generally, that cannot be
a subject matter of review with the court because ang jurisdiction ng court is over questions of
law and not questions of fact. Kaya nung affirm ng CA ang decision ng RTC on facts as to
whether or not the debts exist, both courts said yes. And as to the amount, nagkasundo ang
both courts.
Final na iyun, so naging liquidated na siya.

The important requirements in order for an extinctive novation to exist are the following:
1. There must be a previous valid obligation
2. There must be an agreement of the parties concerned to a new obligation
3. There must be the extinguishment of the old obligation
4. There must be a new valid obligation

Zetha borrows money from the PNB. The loan of Zetha is secured by a real estate mortgage
over a parcel; of land. During the existence of the mortgage, Zetha sold the land to Alonzo.
Alonzo and Zetha entered into an agreement known as deed of sale with assumption of
mortgage. The parties gave PNB a copy of the deed of sale with assumption of mortgage.
Tinatakan naman ng PNB ng copy received. The month following and the succeeding months,
si Alonzo na ang nagbabayad ng monthly amortizations. Tinatanggap naman ng PNB yung
bayad ni Alonzo, ganun ang nangyari for about a year. After a year of payment of
installments, tumigil si Alonzo sa pagbabayad ng installments. So, there was default in the
payment of monthly
amortizations. PNB isa now demanding from Zetha to pay the entire obligation kasai
iniinvoke na nung PNB yung acceleration clause in the contract. Sabi ng PNB, there was a
default, so PNB is now demanding for the payment of the entire indebtedness. Sabi ni Zetha,
he is already released from the obligation because the bank consented to the substitution of
the person of the debtor. Was there Novation in that problem?

> Alonzo: No because there was no implied consent from the creditor. Bakit ang
acceptqance mng payment is not an implied consent? Kailan nag apply ang implied
novation? Kapag merong inconsistency with the old obligation. So, the act of the creditor
in accepting payments from the offered substitute, will that be inconsistent with the
existence of theold obligation? No, because in our law the creditor is allowed to accept
payments from anyone, even from a stranger.
The acceptance by the bank of a copy of the sale with assumption of mortgage, is that
equivalent to implied consent? (Student: no, sir)

In determining whether the creditor consented to the substitution, the mere fact that he
accepted payments from the offered substitute that is NOT equivalent to giving consent
because he can accept payment from whoever. That is allowed in our laws.
In order for novation by way of substitution of the person of the debtor to be had, ano
ang importanteng requirements?
-
Under the jurisprudence in relation to paragraph 2 of At. 1291, there must be a clear
agreement for the release of the debtor and the new debtor will be taking his place.
-
But ‘yang agreement na ‘yan may not be made expressly basta malinaw because the
creditor’s consent can be given impliedly to the substitution. Hindi naman kailangan na
laging express but whether the creditor’s consent is express or implied, there must
always be a clear agreement for the release of the old debtor and for his substitution by a third
person who will become the new debtor.

Okay, wala. But iyung contract na iyun it was consented to by the creditor and the third
person but hindi lang nila nakuha iyung consent ng debtor, can we treat that
transaction instead as assignment of credit?
● NO.
○ Okay, No. Ang sabi ng jurisprudence hindi pwede. Sabi ng jurisprudence, if
the contract is intended to be conventional subrogation at hindi nakuha
iyung consent ni debtor wala tayong conventional subrogation and at the
same time the transaction cannot be treated as assignment of credit.
Consequence? There is no transfer of the creditor’s right. The third person
does not acquire the creditor’s rights.

Essential requisites

BAR MATTER: All other contracts aside from commodatum, mutuum, and deposit are
consensual contracts. There are only 3 kinds of real contracts which are perfected by
mere delivery of the object/thing.

It is not what the offeror thinks but what the offeree thinks of the offer
considering that the offeree is a very prudent and reasonable person. It is what would
a reasonable and prudent person thinks of the offer.

Without the communication of the offer, the offer does not exist as yet.
First requirement — seriousness of the offer.
Second requirement — the offer must be communicated by the offeror to the offeree
Third - offer must be clear and definite and complete

In relation to the offer, there are instances where even if there is an acceptance but that
acceptance will not result into a perfected contract in the following situations:
1. If what was referred to as an offer is not actually an offer but merely an invitation to
make
an offer such as advertisement of things for sale, if the negotiation is by way of a bidding
process, and in the case of a display of goods in a store.
● In these instances, iyung tinatawag na acceptance is actually the offer because
iyung advertisement, display of goods, invitation to bid, are not definite offers that
if accepted, they will not result into a perfected contract. Instead, those are
merely invitations to make an offer. Kung may sasagot or magrerespond, the
response is what is actually to be considered as the offer.
2. If the requisites for a valid offer will not be present. The following are the requisites:
a. the offer must be serious;
b. the offer must be duly communicated; and
c. the offer must be certain.
3. If the offer was already terminated.

So, kung gagawa sya ng withdrawal of his letter of acceptance, yong letter of withdrawal
nya of the acceptance, it will be sent by registered the following day. It will be sent by
registered mail the following day. Mas nauna nyang naipadala yong letter of acceptance
nya. Pero nagbago ang isip nya, he wrote another letter withdrawing the acceptance but
it will be served the following day. Chances are mas unang darating kay offeror yong
letter of acceptance, and it will be followed, the next day, the offeror will be receiving the
letter withdrawing the acceptance. Pero nakalagay sa letter of withdrawal of the
acceptance, it was sent by way of registered mail prior to the receipt of the offeror of the
letter accepting the offer. Ang magiging tanong sa BAR Exams, nagkaroon ba tayo ng
perfection of the contract?
- No, there was no perfection because to have a binding contract the acceptance must
first be communicated to the offeror. In the problem,...

Ang ibig mong sabihin kahit mas unang nakarating k offeror yong letter of acceptance,
ang sinasabi mo the acceptance was already effectively withdrawn?
- Yes, because the withdrawal of the acceptance is effective upon the execution of such
revocation of the acceptance.

Immediate ang effect ng withdrawal?

- Yes

It is considered withdrawn on the day it was made?

- Yes

***Subject only to proof. It is only a matter of proving kung ano ang nauna, yong act of
withdrawal or yong receipt or yong perfection of the contract. Yong receipt by the
offeror of the acceptance, that is simply a matter of proof. But substantially, if the
withdrawal was done prior to perfection, hindi tayo magkakaroon ng meeting of the
offer and the acceptance, if the acceptance has been already withdrawn.

So, kahit na merong acceptance, if the same has not yet reached the knowledge of the
offeror, wala pa tayong perfection of the contract.

Importanteng konsepto, because pwede pang iwithdraw ang offer or ang acceptance
prior to perfection. Importanteng konsepto ang cognition theory because until the
acceptance has reached the knowledge of the offeror, wala pa tayong perfection. Habang
wala pang perfection, the offer or the acceptance can be withdrawn. And the effect of
Article 1323 will be applicable.

In the terms of the offer. If in the offer that, while the offer is communicated through an
agent but the terms of the offer provided for a different manner of acceptance, Article
1321 will apply.

Article 1321. The person making the offer may fix the time, place, and manner of
acceptance, all of which must be complied with.
Hindi natin babasahin ang Art 1409 (3) literally. It cannot be read literally in the sense
that it requires that the object must already exist at the time of perfection. Hindi dapat
ganung ang interpretation ng 1409 (3), otherwise nagboboxing sila, or may
inconsistencies ang provisions. So para maging consistent, iisa lang ang interpretation
natin ng code. Paano natin babasahin ang Art 1409 (3)?

Hence, that is how we will read Art. 1409, par. 3. We will be construing the words “did
not exist” as referring to potential to coming into existence.

In the case of Gaspar v. Disini, the subject matter of the contract was illicit because it
was a stolen/carnapped vehicle. The Court declared the contract void because the object
was illicit.

If the object cannot be ascertained; cannot be determined, the contract will become void
pursuant to Art. 1409. If the object cannot be determined.

when the motive predetermines the purpose of the contract -sc saud

cause or consideration cannot be presumed in option contract. 1354 not applocable

Absolute simulation - The parties do not intend to be bound by the contract that
appears. That is actually a contract that is appearing pero pinapalabas ng kontrata but
the parties do not intend to be bound by that contract. In other words, peke yun.
Meron pinapalitaw na kontrata pero yung kontrata na yan is actually falsified

If a contract is a real contract, where the delivery is not an obligation, instead it is the delivery
which is the VERY WAY of creating the contract, you cannot compel the delivery. Because
in the
first place, it is the delivery that will create the contract.

Form does not affect perfection. Form does not affect the existence of a
contract. The validity and enforceability of a contract.

A contract has the force of law between the parties. Yan ang tinatawag
nating principle of obligatory force. But, para maging obligatory ang contract, dapat
perfect, valid, and enforceable.

Kung ang tanong lang is perfection or is the contract perfected, papaano natin sasagutin
yan. Titignan niyo lang ay kung ang contract ay: CONSENSUAL or REAL. and, you
will be
limiting your answers to that. Sasabihin mo the “contract is perfected because it is a
consensual contract, and a consensual contract is perfect by mere consent to the object
and the cause”. O kaya naman sasabihin niyo, the contract is not perfected, because it is
not a consensual contract, but a real contract which will require delivery, and delivery
has not yet been effected.

the contract is in violation of the Statute of Frauds. You were presented with a contract
which is covered by the Statute of Frauds and the requirement of the statute is not
followed. Pero ang tanong lang sa inyo, is the contract valid? Wag niyong sasagutin na,
“it is not valid because the requirement of Statute of Frauds is not complied.” Mali ang
sagot. Bakit? An unenforceable contract such as a contract which violates the Statute of
Fraud is a VALID contract. That is a valid contract. So kung ang tanong lang, “Is the
contract valid?”, the answer is, “YES, the contract is valid. However, it may not be
enforceable, unless it is ratified or unless the defect is ratified.”

Papansinin niyo dapat ang tanong sa Bar Exam. Kung ano ang hinihingi niya, kasi
magkakaiba ang ibigsabihin niyan - perfection, validity, enforceability and
obligatoriness.

Okay, dapat ganon. Dapat batas mismo ang magsasabi na yang formality na yan ay
requirement for validity at kailan nating masasabing sabi ng batas na yang requirement
na yan ay for validity? Kasi sabi ng batas, “otherwise, void”. Dapat mayroong express
declaration by the law that if the formality is not followed, the contract shall be void.

Formalities required

1. Art. 748. The donation of a movable may be made orally or in writing.

An oral donation requires the simultaneous delivery of the thing or of the document
representing the right donated.
If the value of the personal property donated exceeds Five thousand pesos, the
donation and the acceptance shall be made in writing. Otherwise, the donation shall be
void.

2. Art. 749. In order that the donation of an immovable may be valid, it must be made in
a
public document, specifying therein the property donated and the value of the charges
which the donee must satisfy.

3. Art. 1773.
A contract of partnership is void, whenever immovable property is
contributed thereto, if an inventory of said property is not made, signed by the parties,
and attached to the public instrument.

4. Art. 1874. When a sale of a piece of land or any interest therein is through an agent,
the authority of the latter shall be in writing, otherwise, the sale shall be void.
The authority of the agent must be in writing. This authority must be a specific
authority to
sell. So dapat special power of attorney yan. Dapat ang binigay na power sa kanya is specific
that the power to sell a parcel of land. Hindi pwedeng general power. Pagsinabi kasi nating
special power of attorney, we are not referring to the formalities. Ang SPA ay pwedeng
verbal,
not necessarily in writing. Ung term na special power is it has something to do with the extent
of
the power given to him. Kung general ba yan or kung specific (special).
Kapag sale of a parcel of land, dapat special power yan at yang special power na yan merong
requirement of formality. It must be in writing.
Iyan lang ang special power of attorney na meron requirement of form for validity…
5. Article 2134 of the Civil Code provides that "[t]he amount of the principal and of the
interest
shall be specified in writing; otherwise,the contract of antichresis shall be void."
Correct way to read Art. 2134, the law does not require the contract of antichresis to
be in writing. What is required to be in writing is the amount of the principal and the amount
of the interest in the contract of loan. If that requirement is satisfied, the contract of
antichresis is valid regardless of the form that it was entered into. Wala naman sa
antichresis iyung formality required sa contract of loan but nasa principal contract

Bakit importante ang pagkakaiba noong enforceability sa validity? - The requirement of form does not
affect validity kaya na oral sale of a parcel of land is valid. And the requirement is with respect to the
enforceability. If hindi macocomply, the effect is that it will be unenforceable. It will be valid but
unenforceable. And ang importance noon is pwedeng iratify and defect. Kapag niratify and defect
magiging valid na siya and enforceable, so magiging obligatory na. Pero if the requirement is with
respect to validity hindi pwede ang ratification. If the requirement will affect the validity kasi magiging
void siya and a void contract is not susceptible of ratification. So, pay attention to the purpose of the
formality, sa validity ba (no ratification) or sa enforceability (it can be ratified)