Oblicon Case Tricklers

Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 1 Case Ticklers

I. DEFINITION AND CONCEPT A. De Defi fini niti tion on Art. 115 in relation to Art. 2236 B. Dist Distingui inguished shed from from natur natural al obligat obligation ion Art. 1156 in relation to 1423 C. Ele lem ment ntss D. So Sourc urces es of Obli Obligat gation ion

Held: No. Husband liable. Art. 142 and 143 or Family Family Code. Code. Rende Renderin ring g medica medicall assist assistanc ance, e, mutu mutual al obli oblig. g. Obli Oblig g not not pres presum umed ed.. Thos Those e expressly determined in the Code or in special laws are the only demandable ones. Source: Laws. Family Code.

Source: Contract.

O’ Brien filed an action in the court of CFGI of Manila to recover from Leung Ben the sum of P15,000 alleged to have been lost by O’Brien to Leung Ben in a series of gambling, banking and percentage games:

Pichel vs Alonzo – coconut fruits.

Issue: WON O’Brien can recover the money from Leung Ben.

Action to recover parcel of land owned by P, P, and then because of Japanese war was acquired by other parties, then possessed by the US govt thru its custodian then possessed by the defendant withou withoutt agreem agreement ent with the US or with with the plaintiff, and def then leased a part of the land.

Held: Yes. Yes. Upon general general principles, principles, recognized both in the civil and common law, money lost in gambling and voluntary paid by the loser to the winner winner cannot cannot,, in the absence absence of statut statute, e, be recovered recovered in a civil action. But Act. No. 1757 of the Phil. Comm, which defines defines and penalized penalized different different forms of gambling gambling contains contains numerous numerous provisions recognizing the right to recover money lost in gambling. It must therefore be assumed that the action of plaintiff was based upon the right to recovery given by section 7 of said Act, which declares that an action may be brought against the banker by any person losing money at a banking or percentage game.

Held: No. If liable at all must arise from any of the four sources of obligations. APA APA was a trustee of the US and if def liable, not to plaintiff but to US govt. But defendant not liable for rentals bec no express agreement bet the APA and Nacoco. Existence Existence of implied implied agreement agreement is contrary contrary to the circumstances. Source: Contract. But there was none.

Pelayo vs. Lauron –husband vs. in-laws 1906-P 1906-Pela elayo yo compla complained ined against against Lauron Lauron and Abella Abella.. Pelay Pelayo o a doctor doctor, render rendered ed servic service e to daughter-in-law then demanded P500 from def. Issue: WON Lauron is liable.

Held: Yes. Owner has no privy or contract with D only with P. P. Owner can demand from P and P can demand from D liabilities.

Leung Ben vs. O’Brien - Gambling

Sagrada Sagrada Orden Vs Nacoco Nacoco –Kinuha ng Hapon Hapon ang lupa.

Issue: WON defendant is liable to Sagrada and must pay the rentals.

Issue: WON P is liable to owner.

Source: Law. Phil Comm and Civil Code.

Peopl People’ e’ss Car Inc. Inc. vs. Comm Command ando o Securi Security ty Service Agency. –Sekyu nangarap magdrive ng kotseng hindi kanya, naaksidente. P and D entered into a contract where D was hire hired d to rend render er secu securi rity ty serv service icess to P and and safeguard and protect business premise. One of the the guar guards ds of D took took one of the cars cars under under custody of P and drove it and lost control. The owner demands damages from P but P claims D should be li able, solely.

Board of Liquidators filed annulment of Deed of Sale of Alonzo to Pichel. Accdg to the law which awarded the land to Alonzo, RA 477, the land cannot be encumbered to anybody. Alonzo sold the coconut fruits of the coconut land. Issue: Issue: WON there there was a violat violation ion of the law which gave the land to Alonzo. Held Held.. No. No. It was was not not the land land that that was was encumbered but the coconut fruits. Possession of the the coco coconu nutt tree treess canno cannott be said said to be the the possess possession ion and enjoym enjoyment ent of the land land itself itself.. Accessory vs. Principal=transfer of accessory not transfer of principal. Accessory follows principal and not the other other way around. around. Law does not prohibit the disposition of industrial or natural fruits. Source: Law **What are the essential elements of a contract to make it valid?

Del Rio vs. Palanca – Hindi naman ikaw ang tatay, bakit ka nagbibigay. Del Del Rio Rio wante wanted d to reco recove verr mone money y which which he furnis furnished hed to the family of defend defendant ant for the support and subsistence of the def’s 5 children. Issue: WON P can recover money. Held: No. There are qualifications: qualifications: a) support support given to dependent of one who is bound to give

Duman, Paulyn \ Oblicon \ I-E \ Prof. Morales \ Page 2

support but fails to do so b) support supplied by a strang stranger er c) suppor supportt was given withou withoutt the knowledge of the person charged with the duty. 3rd req lacking. Def knew about support and even disagrees with it. Source Source:: Law. Law. Articl Article e 1894 1894 of CC which which gives gives qualifications.

offended offended party not allowed to recover recover damages damages on both scores.

People People vs. Ritter –Rape!

Feder Federat ation ion of Free Free Farme Farmers rs vs. CA—P CA—Pala alay y Increase

Rape of a 12-yr-old girl allegedly by Appellant who inserted a foreign into her vagina causing her death. Criminal case and civil case was filed against the defendant. Issue: WON def liable on both cases. Held: Held: No. Only with with regard regard to the civil case. Crim case requires evidence beyond reasonable doub doubtt. While hile civi civill case casess requ requir ire e only nly preponderance of evidence. Source Source:: Crimin Criminal al offense offenses. s. Acts Acts or omissio omission n punished by the law. law. **Institution of Civil Case while pending criminal case case,, is rese reserv rvat atio ion n to the the righ rightt to file file the the former necessary or can file anytime within the pendency of the criminal case?

Andamo vs IAC – Water Overflow P owner of parcel of land adjacent to the land of Missionaries Missionaries of our Lady of Lasalletta Lasalletta.. Latter Latter constructed constructed waterpaths and contrivances contrivances which eroded eroded petitioner’ petitioner’ss land and damaged damaged crops, crops, plans. plans. Criminal Criminal action action was instituted and then filed a civil action. Issue: WON filing of the civil case was proper. Held: Held: Yes. Art. 2176, 2176, by fault fault or neglig negligence ence.. Separate civil action lies against the offender in a criminal act whether or not he is criminally prosecuted and found guilty or not. Only that the

Source: Quasi-Delict, Law. Law. ** Distinguish civil liability arising from crime and that from quasi-delict.

There are 4 parties in this case: a. FFF (union representing the farmers) b. Planters (the group which which harves harvests ts the lands lands whe where re the farmer farmerss work) c. Santos and Tikol (individual planters) d. Central or Victorias (milling corp, Planters bring their harvest here to be milled).

Issue: a. WON Planters and Victorias should be severally liable b. WON agreement agreement bet Planters Planters and Victorias Victorias were permissible under RA 809 Held: a. NO. Legal basis is that arising from law whic which h does does not not impo impose se upon upon Cent Centra rals ls any any liability liability,, whether whether expressly expressly or impliedly impliedly,, any joint and several liability liability. No contract bet sugar mill mill and the labore laborers. rs. Princ Principa ipall liabil liability ity on Planters and secondarily on Dept or Labor. b. YES. RA 809 applicable only in the absence of a written milling agreement or in the absence of any any stip stipul ulat atio ion n on the the bene benefit fitss which which the the laborers are entitled. Source: Law and Contract

The law, Sugar Act of 1952 - RA 809 stipulates that any increase in the share of proceeds of milled sugarcane sugarcane and derivatives derivatives obtained by planters from the Central, 60% of said increase should should be paid by planters to their respective respective laborers. 1. FFF alle alleged ged that that they they have have not not been paid paid from 1952-53 despite the 10% increase and and fro from 1953 1953-1 -19 974 wit with the 4% increase. CA ruled planters and Victorias jointly and severally liable. FFF claimed too that Planters and Victorias entered into an agreement when they have no lega legall righ rightt bec bec the the law law has has alre alread ady y provided the ratio of division. 2. Victorias Victorias claimed claimed that that they they should should not be be held held jointl jointly y and severa severally lly liable liable.. The action filed was not founded on torts but on either either an obliga obligatio tion n create created d by a contract or by law, and even if on torts, the action action has prescr prescribe ibed. d. They They have have paid the Planters so the Planters should only be the one sued. 3. Plan Plante ters rs clai claim m they they have have free freedo dom m to stipulate ration as they might agree. And that they have paid the laborers.

**Brinas vs. People –Maling Sigaw ng Konduktor Brin Brinas as conv convic icte ted d for for doub double le homi homicid cide e thru thru reckless imprudence but acquitted Bunecamino (asst conductor) and Millan (engineman), Brinas was the conductor. Brinas told the passengers that that they they are near the town town but before before the victims were able to alight, train already caught up speed. During the pendency of the criminal action, the heirs of deceased filed separate civil action against Manila Railroad Company. Issue: WON the civil action can be pursued on the pendency of the civil action. Held: Yes. Source of obligation is that of a culpacont contra ract ctua uall and and not not an act act or omis omissi sion on punish punishabl able e by law. law. Two differ different ent source sourcess of oblig. Institution of criminal action on the case does not interrupt the separate civil action for damage damagess based based on quasi-d quasi-delic elictt for the same accident. Reckless Imprudence vs. Quasi-Delict. Reckless imprudent—Principal, Art. 2176 person who caused the crime liable, Art. 2180 solidary liability of employer. employer. Source: Culpa-Contractual.


**Tan vs. Nifatan –Isa-isa na silang namamatay, na-acquit pa. Lim of a wealthy family was shot dead by the Tan brothers. But the Tan brothers one by one died before the instant petition could be filed. The wife of Lim with the children instituted an action for damages against charged 10 years from the happening happening of the crime. Tan’s Tan’s filed motion to dismiss because of acquittal. ISSUE: a. WON the action has prescribed. b. WON civil civil action action would still prosper prosper even even when the accused were acquitted. Held: a. No. Action for prescription for liabilities and charges of crimes is 20 years. b. Yes. Yes. The reason for acquittal was not stated or explained and Art. 33 allows independent civil action action in case case of physic physical al injuri injuries es includ including ing death. (ROC?). 10 years prescription for actions when source is created by law. 5 years when not fixed by the Code or other laws. 20 years for crimes or delicts as source of obligations. Source: Delict or Crimes.

People vs Abungan – namatay yung kriminal Abungan Abungan convicted of murder sentenced sentenced to RP and and orde ordere red d to pay pay inde indemn mnit ity y of P50,0 P50,000 00.. Abungan died. Issue: WON death of Abungan extinguishes extinguishes his criminal and civil liability

also be predicated on a source of oblig other than delict. Source: Crimes or Delicts. Acts or omission.

DBP vs CA –Restructuring of Debt DBP granted PHUMACO and PHILICO an industrial loan for P2.5M, 2M in bonds and 500k in cash. Promissory note executed and a mortgage over their present and future properties. DBP granted another loan of 1.7M reflected in the amended mortgage contract. After 7 yrs the outstanding balance was restructured bec Resp failed to pay. Resp still failed to pay under the restructured payment. DBP refinanced the matured obligation and grante granted d 3 foreig foreign n currenc currency y denomi denominat nated ed loans. loans. Apart from interest, there are additional additional charges and penalties in case of default. After 10 years, DBP initiated for forclosure of mortgaged prop and the balance shoot up to P63M. Resp claim that reason for non-payment non-payment is because because financial rehabilitation from a contract with the military didn’t push thru.

Issue: WON the sale can be nullified because of Mayfair’s action Held Held:: The The cont contra ract ct is deeme deemed d resci rescind nded ed.. Rescission a relief allowed for protection of one of the contracting parties and even 3 rd persons from injury or to protect some incompatible and preferred preferred right by the contract. contract. Mayfair Mayfair has the opportunity to negotiate. Determinate Determinate Thing: There is a problem problem because because dete determi rmina nati tion on cann cannot ot be made made bec bec prop prop is indivisible. You cannot pinpoint which is the 25% of the proper property ty.. Determi Determinat nation ion of the exact exact portion of the building.

Issue: WON the resp can claim without fault in default default of the non-happeni non-happening ng of the contract with the military. military.

De Leon vs. Soriano—bigyan ng palay si nanay.

Held: Held: NO. DBP is no party to resp resp and AFP’ AFP’ss contract. Resp can claim from AFP but without prejudice to its contract with DBP. DBP has given Resp all the possible options for payment.

Natural children of Soriano agreed that they are to deliver certain number of cavanes of palay each year to Soriano and shall only cease upon death of mother mother. But deliveries deliveries were of 3,400 cavanes and children claimed that due to Huk troubles in Central Luzon.

Source: Contract

II. NATURE AND EFFECTS OF OBLIGATION A. Ob Oblig ligati ation on to giv give e 1. Det Determ ermina inate te Thi Thing ng

Held: Held: Yes. Extin Extingui guised sed based based on delict delicts. s. Art. Art. 89(1) 89(1) of RPC, RPC, death death of convic convictt occurs occurs before before final judgment, extinguished. But only criminal liability is extinguished and also the civil liability directly arising from and based solely on offense. Claim for Civil liability survives survives if the same may

day day excl exclus usiv ive e opti option on to purc purcha hase se the the same same shou should ld the the less lessor or decid decide e to sell sell the the leas leased ed premises. But Carmelo wanted to sell the whole proper property ty.. He sold sold entire entire prop prop to Equato Equatorial rial.. Mayfair filed for annulment of sale bec of lack of consid considerat eration ion.. Mayfai Mayfairr claimed claimed that that he told told Carmelo that it is willing to purchase the same and that it has the right of first refusal.

Equatorial vs. Mayfair—Right of First Refusal Carmelo owned a parcel of land with 2-storey building and leased said portions to Mayfair. On their contract, stipulation that Mayfair has 30-

Issue: WON inability to deliver was permissible due to force majeure Held: No. The object to be delivered was generic and set no bounds or limits to the palay to be paid. Any palay of the same quality can replace. Impossibility must consist in the nature of the thing to be done and not the inability of the party to do it.


Norkis vs. CA—Ako ang bumili ng motor iba ang gumamit. Nepales Nepales bought bought a motorcycle motorcycle from Norkis and issu issued ed a chat chatte tell mort mortga gage ge in favo favorr of DBP DBP. Invo Invoic ice e was was issu issued ed and and moto motorc rcyc ycle le was was registered registered by Norkis evidenced evidenced by receipts receipts of registratio registration. n. Motor Motor was delivered to a certain certain Julian Nepales and an accident happened while being driven by a certain Payba. Norkis claims it cann cannot ot be held held liab liable le sinc since e owne owners rshi hip p was was already transferred to Nepales evidenced by the receipts and the invoice.

sufficient certainty. Court held that it is capable of being determined w/o need for new contract contract and the receipts showed that payment was to the lot adjoining the prev paid lot on three sides ther eo eof. The land is determ in inate or dete determ rmina inabl ble. e. Owner Ownersh ship ip tran transf sfer erre red d by constructive delivery which is the execution of public document. Determinate Thing: The lot.

2. Generic Thing

CO vs. CA—pinagawa kong kotse, na-carnap. Pet entrusted his car to Resp to make same job repair services and supply of parts which was to be returned after 3 days as per the contract. Pet paid in full. After 3 days the vehicle can’t still be releas released ed due to failed failed battery battery so pet bought bought battery. When Pet was about to get it, resp said the car was carnapped while being road-tested. Resp claims force majeure. Issu Issue: e: WON WON carnapping.

Resp esp

wil will

be

liab liable le

for for

the the

Norkis vs. CA Issu Issue: e: WON WON Nepales.

owne owners rship hip

was

tran transf sfer erred red

to Generic thing: motorcycle

PLDT vs. Jeturian—Pension bago gera.

Held: No. No actually delivery nor constructive one. The receipts of reg fees and the invoice is nothing but a detailed statement of the nature and quantity sold and not a bill of sale. Intent considered. Intent was not to transfer ownership but to facilitate execution of chattel mortgage.

PLDT PLDT adop adopte ted d in 1923 1923 a Plan Plan for for Emlo Emloye yees es Pension. In 1945 the BOD adopted a resolution discontinuing the pension plan. Hence this action of Resp.

Dete Determ rmina inate te Thin Thing: g: The The generic thing. (?)

Issue: WON the pre-war employees are entitled to the pension.

Held: Yes. It was due to negligence premised on dela delay y which which is the the basi basiss of the the comp compla lain int. t. Carnapping cannot be considered as fortuitous. It must be proved and established that it is an act of God. No other evidence but the police report. Even when Pet agreed to resked repair, can’t be take taken n as waive waiverr bec bec he real really ly has has no othe otherr choice but to leave it since he can’t have it run.

3. Effect of Loss moto motorcy rcycl cle e

was was

a

Heirs of Juan San Andres vs. Rodriguez—Binili ko na ang nakapaligid na lupa. JSA sold 345 sqm lot to Rodriguez. There was a deed of sale. JSA died and Rodriguez appointed administrat administrator or.. The heirs engaged engaged services services of a geod geodet etic ic engg engg and and foun found d out out that that resp resp has has encroached the lot by 509 sqm. They sent letter to vacate. Resp claimed they bought the said portio portion n of the lot the ff day when they first boug bought ht the the 345 345 sqm sqm lot. lot. Proof roof of sale sale was was attach attached ed and that payabl payable e in 5 years. years. Resp Resp deposited the balance in court. Issue: WON there was a contract of sale. Held: Yes. There was a contract of sale which transferred the ownership to resp. Pet claimed that that the object object cannot cannot be determi determined ned with with

Held: Yes. But with the exception of those who died or left before the outbreak of the war. The pens pensio ion n plan lan was was not a grat gratui uity ty but an indu induce ceme ment nt for for empl employ oyee eess to cont contin inue ue indefinitely in service. The plan ripened into a binding contract upon its implied acceptance of the employees. Acceptance is inferred from their entering the employ of the company and staying after after the plan was made known. known. PLDT argues argues that that it can can only only be held held liab liable le unde underr the the conditions expressly set in the pension plan. But the Court held that the Company that violated the contract with i ts ts em pl ployees, by discontinuing the plan without their consent, is not in the position to insist upon the terms of the very contract they have breached.

Bunge vs. Camenforte—Copra ko sa’yo binenta ko. Plaintiffs filed to recover certain damages from the def bec of the latter’s failure to deliver Phil copra they agreed agreed to deliver. deliver. A contract contract was entered into where the VPC sold 500 tons of Phil Copra to BC. The vendor would ship the copra to USA but even with demands, failed to do so. The vendee however believed in good faith that it shall be delivered so it sold the expected copra to EDOW. Bec vendor vendor failed, failed, vendee vendee suffered suffered damage damages. s. VPC denies denies contra contract ct and said said that that Vicente, Vicente, the manager manager who contracted contracted had no authority to do so. Force majeure is also claimed since a storm destroyed the bodega. Issue: WON VPC is held liable. Held: Yes. Subject matter is Phil Copra, does not refer to any particular or specific copra. Since


generi c, c, obligation can’t be deem ed ed extinguished by the destruction/disappearance. Obliga Obligatio tion n subsis subsists ts as long long as commod commodity ity is available. Pet can also sell the copra which they expect to acquire in the future for purposes of speculation. Effect: Effect: Subsistence Subsistence of obligation obligation since generic generic object.

Ocena Ocena vs. Jabson—s Jabson—subdi ubdivision vision na kontrat kontrata, a, maling akala. Resp filed a complaint for modification of the terms and conditions of its subdivision contract with petitioners. Allegations are that price in oil and derivatives derivatives have increased, increased, not within the contro controll of the plaint plaintiff iff.. It will will cause cause unjust unjust enrichment to the pet. In the contract, the pet are guaranteed as landowners and that they will receive 40% of all cash receipts from the sale of the subdivision lots. Resp hinged their argument on 1267 when the service has become so difficult beyond contemplation, release from obligation. Issue: WON there is a sufficient cause of action for modification of the subdivision contract. Held: No. Cited article does not grant the courts this authority to remake, modify or revise the contract. Their contract has a force of law and should there be substitution or modification, it should should be amongs amongstt the partie partiess themse themselve lves. s. A showing showing of mere mere inconve inconvenien nience, ce, unexpec unexpected ted impe impedi dime ment ntss or incre increas ased ed expe expens nses es is not not enough. Equity cannot relieve from bad bargains simply bec they are such. Effect: The contract has the force of law. law.

B. Ob Obli liga gati tion on to to do do

Hahn vs. CA—I want these diamond rings. Santos Santos received received 2 diamon diamond d rings rings with with a total total amount amount of 47K. 47K. She issued issued separa separate te receip receipts ts therefore in which she acknowledged that they have been delivered by Letty Hahn for sale on commis commissio sion n and that that they they would would be return returned ed upon demand if unsold. The rings were not sold nor returned after demand. Thus this action. Issue: WON the contract was of sale or agency. Held: Of agency. There is no evidence that would tell tell that that is was was of sale sale.. Thei Theirr cont contra ract ct’’s stip stipul ulat atio ion n does does not not show show it was was of sale sale.. Althou Although gh resp resp was willing willing to give give a differ different ent object, the debtor cannot compel the creditor to receive a diff object.

Oceana vs Jabson—subdivision Jabson—subdivision kontrata, maling akala. To do: To give 40% of the cash receipts from sale of subdivision lots.

**Woodhouse **Woodhouse vs. Halili—Mission Softdrinks P and D entered into an agreement that they will form form a part partne ners rshi hip p for for the the bott bottli ling ng and and distribution of Mission softdrinks, P as manager and D as capitalist. When the bottling plant was in operation P wants to execute the partnership papers but D refuses. D claims that he was made to believe that P has the exclusive ownership of the bottling franchise. Issu Issue: e: WON WON the the misre misrepr pres esen enta tati tion on of P can vitiate the contract.

To do: Deliver the rings, the speci fic rings.

Chavez vs. Gonzales—Dahil sa typewriter. P delivered to D a typewriter for D to repair. D was not able to repair the typewriter typewriter and asked for for P6 for for spar spare e part parts. s. P went went to D and and demand demanded ed the typewrit typewriter er which which D gave gave in a wrapped package. When P opened it at home, he saw that the typewriter had missing parts and found it in shambles. P demanded missing parts, interi interior or cover and P6. P brought brought it to a diff diff repa repair ir shop shop and and spen spentt P89. P89.95 95.. P file filed d for for payment of P90 and damages.

Held: No. Although P was guilty of misr misrep epre rese sent ntat atio ion, n, it was was not not the the caus causal al consideration or the principal inducement that led defendant defendant to enter enter into the partnership. partnership. D may may not not be comp compel elle led d to carr carry y out the agreement which is to execute the partnership papers. The defendant has obligation to do and not to give. The D reduced the percentage of P from 30% to 15% bec of his misrepresentation. Obligation to do: Execute partnership contract.

Ong vs. Bognalbal—She wants her Kenzo Tiles, now na.

Issue: WON D is liable for damages. Held: Held: Yes. Yes. 1167 1167 states states that when a person person is oblige obliged d to do someth something ing and fails fails to do the same, it shall be executed at his cost. What is poorly done be undone. D claims no period but Court held that fixing a period would only be a mere formality and would serve no purpose than to delay. delay. Liable under 1170. To do: Specif ic performance – repair typewriter. typewriter.

Bognalbal was an architect hired by Ong who was a businesswoman to construct her boutique. Bog agrees to furnish labor within 45 days and owner to pay every 2 weeks based on the accomplishment of work value. 4 th billing billing came and Ong refused to pay but reason was not clear on the record. She wanted to change Vinyl tiles to Kenzo flooring. Ong claimed Bog abandoned job. Issue: WON Bog be liable for abandoning job.


Held: No. He is not liable but is not justified for doing so. 1191, it was a reciprocal obligation and there is power to rescind it in case one doesn’t comply with what is incumbent upon him. But this this arti articl cle e shou should ld be judi judici cial ally ly invo invoke ked. d. Novati Novation on is not presumed presumed.. There There must be an express stipulation. Novation a. change of obj or principal principal conditions, conditions, b. substituti substituting ng person person of debtor c. subrogating 3 rd person in the rights of creditor. Liability is on the first infractor, 1192. Ther There e has has been been no cont contra ract ct nova novati tion on that that required Bog to finish the Kenzo flooring before the 4th billing shall be paid. 1186. Condition shall be deemed fulfilled when the obligor voluntarily prevents the fulfillment. To do: Pay 4 th billing. (Reciprocal-di mo ginawa di ko rin gagawin-pero sabi nga ng court hindi pa rin yun justification, but only the first infractor shall be liable).

C. Ob Oblig ligati ation on not to do do Fajardo Fajardo vs. Freedom to Build—Wag dagdagan kung hindi bawasan! FTB, FTB, ownerowner-dev develo eloper per and seller seller of low-co low-cost st housing, sold to petitioner-spouses a house and lot. Restrictive covenant was contained in the cont contra ract ct,, ease easeme ment nt.. No upwa upward rd and and fron frontt expansion expansion which is contained contained in their Transfer Transfer Cert Certifi ifica cate te.. Pet’ et’s child childre ren n are are to wed wed so extend extended ed their their house house thus thus contra contraven vening ing the terms of contract. Pet filed, demolish the unauth structures. Issu Issue: e: WON WON resp resp has has the the auth auth to ask ask for for demolition demolition since ownership ownership already already transferred transferred to the prop owners or homeowners association. Held: Yes. Yes. Restrictiv Restrictive e covenant covenant should still be foll follow owed. ed. Alth Althou ough gh cour courts ts gene genera rall lly y view view restrictive restrictive covenant with disfavor disfavor but sustain sustain them if reasonable, not contrary to public policy, law etc. Intent Intent of develo developer per was to provid provide e

safety safety, aesthetic aesthetic and decent living conditions conditions and prevent overcrowding. Art. 1168, when ob consis consists ts in not doing, doing, obligo obligorr does does what what was forbidden, shall be undone at his expense. Not to do: Expand structures of house.

D. Ef Effe fect ct of of Brea Breach ch 1. Del Delay ay in in Perf Perform ormanc ance e Villa Villarue ruell vs. Manila Manila Motor Motors—K s—Kasa asalan lanan an lawyer, naningil ng renta nung may gera.

ng

Mani Manila la Moto Motors rs and and Vill Villar arue uell ente entered red into into a contract whereby the former agreed to convey by lease to the latter some premises. The term of lease is 5 years. The premises were invaded by the Japanese and then the American occupied the same building. The occupants paid the same rate as the defendants defendants after which they have vacated the premises. Def renewed contract for addtl addtl 5 yrs. yrs. Pet, as per his lawyer lawyer’’s advise, advise, demanded for rental from the Def for the period when the Jap and the Americans occupied the premises. The premises was set on fire and the reason was unknown. Issue: WON Pet has power to demand rentals and recover the same due to default. Held: No. Art. 1554 of CC of Spain states the duties of a lessor. A. deliver to the lessee the subjec subjectt matter matter b. make make thereo thereon, n, during during the leas lease, e, all all repa repair irss nece necessa ssary ry and and maint maintai ain n servic serviceab eable le condit condition ion c. mainta maintain in lessee lessee in peaceful enjoyment of lease. 1560, lessor shall not be liable for any act of mere disturbance of 3rd person but lessee would have direct action against against trespassers. trespassers. No lessee would would agree agree to pay rent for premises he could not enjoy. enjoy. Delay in performance: It was the creditor who was in default or delay when it refused to get the payment given by the resp.

Lopez vs. Tan Tioco—Ibenta mo ang asukal pag sinabi kong ibenta mo. Lope Lopez z and and Tan Tioco ioco ente entere red d into into a verb verbal al contract that she’ll deliver certain sugar to Tan Tioco which he obligated himself to store until he receives instructions from her to sell them. She delivered the piculs piculs of sugar and instructed instructed to sell in on Sept 1904 but def did not do so. Pet filed action. Def denies allegations. Issue: WON the defendant was in default. Held: Yes. He was in default from the time the Pet demanded to deliver or do something, or the fulf fulfill illmen mentt of the the obli obliga gati tion on.. Neit Neithe herr the the contract nor the law demands to make judicial demand demand than than extraj extrajudi udicia cial. l. The price price of the sugar should be from the time she instructed the def to sell them. Delay in Performance: Delay in selling the sugar upon instructions.

Dela Rosa vs. BPI—Atat BPI—Atat sa announce announcement ment ng winners ng design contest. BPI held this contest of designs and plans for the constr construct uction ion of a buildi building. ng. Prizes Prizes would would be awarded not later than Nov. 30, 1921. Plaintiff took part in the said contest and after the date stipul stipulate ated, d, the bank bank didn’t didn’t award award prize prize nor made any announcement. Plaintiff filed. Issue: WON BPI was in default when it did not rele releas ase e the the anno announ unce ceme ment nt on the the date date stipulated. Held Held:: The The bank bank canno cannott be held held in defa defaul ultt through the mere lapse of time. Plaintiff never demanded from bank and just filed the case in Court. Court. A binding binding obligation obligation may originate originate from advertisements addressed to the general public. Demand Demand will not be necessa necessary ry only only in certai certain n condit condition ions, s, but demand demand is indisp indispens ensabl able e as a general rule. Plaintiff has no cause cause of action bec


he alleges that the contest didn’t push thru but in consideration of the evidence, the materials are on their way to New York and were sent to a technical committee. Delay: Bank was not in default. No demand.

Lizares vs. Hernaez—Camarin was burned and lessee won’t pay. Lizares and Hernaez entered into a contract, the former became the lessee of the two haciendas. Pet used one of the improvements there which was a roofed camarin used in manufacture of suga sugarr. A fire fire occur occurre red d and and dest destro roye yed d the the cama camari rin. n. Pet dema demand nded ed from from Def Def that that he reconstruct reconstruct camarin. Def refused. refused. Pet Pet did not pay the rentals bec of non-construction of the camarin. Def claims Pet should be liable for the fire fire sinc since e he is the the less lessee ee when when the the fire fire occurred. Issue: WON plaintiff has responsibil responsibility ity to the damages caused by fire. Held. No. And so is the def. Force Majeure. But the plaintiff is in default with regard to the nonpayment payment of rentals due to non-constructio non-construction n of camarin. Although there is presumption against lessee when loss in the leased prop occurs, proof is necessary to prove he is not responsible. 1183. When a thing is lost while in the possession of the debtor, it is presumed that it loss occurred by his fault and not by fortuitous even in the absence of the contrary. Delay: Not in the Def for non-construction but in Plaintiff in non-payment of rentals.

Bachrach Motor vs. Lee Tay—Kinuha ng Kano ang truck niya, ayaw na niyang magbayad.

Def execut executed ed and delivered delivered to the plaintiff plaintiff a promissory promissory note payable payable in installments installments which repres represent entss the balanc balance e of one white white chasse chassess purc purcha hase sed d by def def from from pet. pet. The The truc truck k was delivered to the def. After the outbreak of war, the the truc truck k was was one one of the the truc trucks ks that that were were comman commandee deered red by the USAFEE USAFEE.. Neithe Neitherr the plaintiff not def filed an official claim from the US govt.

due to fortuitous event: 1. determinate thing (in the present present case, case, pecunia pecuniary ry in nature nature)) 2. No stipulation stipulation holding holding him liable liable even in case of fortuitous

Issue: Issue: WON the commandee commandeering ring of the truck truck exempts the def from payment of the obligation represented by the prom note.

Delay: *** Delay: ***By By not giving giving to Mayfair Mayfair the 30-day 30-day period of which it is entitled to exercise right of first first refusal refusal upon upon commun communica icatio tion n of Carmel Carmelo o that he would sell the property.

Held: No. There is no principle of law by which the obligation obligation was extinguishe extinguished. d. The interest interest was not reduced due to suspension since the pet was genero generous us enough enough to comput compute e only only from from 1948, the truck was commandeered in 1941. Def could have filed a claim from the US govt and he would have been paid but he failed to do so. Delay: Non-payment of the prom note.

Lawyers Lawyers Coop Pub vs. Tabora— abora—bumi bumili li ng law books, nasunog. Tabora bought books from Pet and made partial payment. It was delivered to his law office. On the same date, a fire broke out in the office and destroyed the building including the books. Def doesn’ doesn’tt want to pay balanc balance e since since the books were were loss loss due due to forc force e maje majeur ure e and and the the ownership has not been transferred to him yet. Issue: Issue: WON force force majeur majeure e can be claimed claimed by defendant from his non-fulfillment of obligation. Held: No. Ownership was already transferred to the buye buyerr. Altho though ugh there here has has been een an agreement that the ownership shall remain with the seller until the price has been fully paid, it was only for the security of payment but in the very contract in was expressly agreed that the loss or damage after delivery to the buyer shall be borne by the buyer. Exemptions from liability

Delay: Non-payment of balance.

Equatorial vs. Mayfair—right of first refusal

Co vs. CA--carnap Delay: Delay in delivering the car to Co after demand which is the premise of negligence of resp.

Aerospace vs. CA—Sulfuric Acid na ayaw pang kunin. Pet Pet purcha purchased sed from from resp resp Philp Philphos hos 500 MT of Sulfur Sulfuric ic Acid. Acid. In their their contra contract ct it was pet’ pet’s responsibility to get the acid from resp. Philphos dema demand nded ed that that pet pet get get the the acid acid and and pet pet chartered chartered a vessel MT Sultan but the vessel vessel was not able to get the whole volume bec it tilted. Resp sent a demand letter that the acid should be emptied or else petitioner will be liable for the storage and other incremental incremental expenses if pet fails to do so. Pet chartered MT Sultan again but it tilted so never gotten the whole volume. Chartered another vessel Don Victor and asked Resp to deliver additional orders. Resp did not do so unless the remaining acid be emptied and that pet pay the maintenance and storage. Pet filed and contended Resp is in default. Issue: WON the Resp is in default. Held: No. The obligation to withdrew the 500MT of H2SO4 before before Aug. 1989 and the resp was alread already y ready ready to deliver deliver the same but it was


Plaintiff’s fault for not chartering another vessel which has the capacity to withdraw the volume. It has the duty of emptying the acid. Pet claim that it was due to a storm that’s why it can’t empty the storage but evidence proved that it was of the incapability of the vessels. There was an obligation on the pet to empty the storage. They were the ones in delay.

UCPB UCPB—c —cre redi ditt

faci facili lity ty

of

ava availem ilemen entt

of

2. Non-fulfillment Chavez vs. Gonzales Non-fulfillment: The typewriter was not fixed.

Telefast vs. Castro—dahil sa telegrama, mag-isa lang nang ilibing ang mama.

Delay: Pet for not emptying the storage.

Sele Selegn gna a vs. vs. ballooned.

Del Delay: ay: NonNon-pa paym ymen entt accommodation.

whic which h

Selegna, Selegna, rep by spouses Edgardo and Zenaida Zenaida Angeles were granted a credit facility for P70M by UCPB. As a security, pet executed real estate mortgages over several parcels of land. Pet also execut executed ed prom prom note note every every time time they they avail avail of credit facility. In their credit agreement, it was stipulated that failure to pay any availment of the accommodation or interest or any sum due shall constitute an event of default which shall allow allow resp resp bank bank to declar declare e as immedia immediate te and payable all outstanding availments together with accrued accrued interest. interest. Pet increase increased d credit facility facility and they agreed to 21.75% interest per annum. Demand letters were sent upon failure to pay. Pet Pet paid paid 10M as partia partiall paymen paymentt of accrue accrued d inte intere rest st.. UCPB UCPB appl applie ied d for for extr extraa-jud judici icial al foreclosure of petitioners mortgaged properties. The obligation has ballooned to 132M and pet alleged alleged that 10M as payment payment had the effect effect of updating updating and thereby thereby averting averting the maturity maturity of the obligation. Issue: WON the Pet were in default. Held: Yes. The contract is the law and the resp is justif justified ied in invoki invoking ng the acceler accelerati ation on clause clause declaring the entire entire oblig due and payable. The resp had the right to foreclose the mortgages extra-judic extra-judicially ially. Failure Failure to furnish furnish a detailed detailed statement of account doesn’t ipso facto result in unliquidated obligation. Pet was in default.

Consolacion Bravo-Castro died in Pangasinan and on the same day the daughter sent a telegram to the US to inform the other si blings and dad about deat death h of Mom. Mom. The The Mom was was inte interr rred ed by daught daughter er alone. alone. When she came back back to the states, she found out that the telegram never reache reached d her siblin siblings. gs. Telefas elefastt claime claimed d force force majeur majeure e bec of techni technical cal and atmos atmosphe pheric ric factors but no evidence to support. Issue: WON force majeure applies. Held: No. No evidence to support. And even so, def should have informed the plaintiff that it cannot transmit transmit the telegram. telegram. 1170 and 2176, guilty guilty of fraud, negligence negligence or delay. delay. 2217 for moral damages. Non-fulfillment: Sending of telegram.

Tanguiling vs. CA—windmill na nasira sa wind. A case case invo involv lvin ing g prop proper er inte interp rpre reta tati tion on of contra contract. ct. JMI Engr Engr and GM propos proposed ed to resp Vicente to construct windmilling system for him. They agreed on the construction for P60K. P30K DP and P15K installment. Vincente didn’t pay the remain remaining ing P15K bec he paid it to SPGMI SPGMI who constructed the deep well to which the windmill would be attached. And even assuming that he owes pet P15K, it should have been offset by the collapse after a strong wind.

Issue: a. WON agreement to construct windmill included in the installation of a deep well. b. WON WON the the pet pet is unde underr the the obli obliga gati tion on to reconstruct the windmill. Held Held:: a. No. No. It was was not not incl includ uded ed in the agreeme agreement. nt. Intent Intention ion of the partie partiess must must be accorded primordial consideration and in case of doubt, doubt, contemporan contemporaneous eous and subsequent subsequent acts shall be principally considered. b. Yes. Pet claimed there is a strong wind but this this is actual actually ly necessa necessary ry for the windmi windmill ll to turn. It was just newly constructed, constructed, it should should have not collapsed. Non-fulfillment: Payment of last installment.

Perez Perez vs. CA—ni CA—nilo loko ko yung yung busin business essma man n at pinaalaga ang fishpond. Juan Juan Perez Perez usufruct usufructuar uary y of a parcel parcel of land land called Papaya Fishpond with other usufructuaries. The usufructuaries entered into a contract leasing the fishpond to Luis Keh for a period of 5 years. The contract states that the lessee cannot sublease the fishpond nor assign his his right rightss to anyo anyone. ne. But Cris Crisos osto tomo mo was was pers persua uade ded d by the the pet pet Keh Keh to take take over over the the Papay Papaya a fishpo fishpond nd bec Cris Cris is a busines businessma sman. n. Executed Executed a written written agreement. agreement. Cris even paid the rentals until 1985, 10 years of taking care of the fishpond. In 1979 however, pet with armed men went to fishpond fishpond and showed showed that that Keh Keh surrendered the fishpond to the usufructuaries. Issue: WON the resp is a sublessee of Keh which is barred by the lease contract. Held: Yes. He was a sublessee. But Perez and his coun counse sell knew knew and and acqui cquies esce ced d to that hat arrangement by their act of receiving from the resp resp rental rentalss eviden evidenced ced by the receipt receiptss which which puts the pet in estoppel—which arises when one by his acts and representations and admission or by his own silence when he is obliged to speak out, intentionally intentionally or thru culpable negligence negligence


induces another to believe certain facts to exist and such other rightfully relies and acts on such beli beliefs efs so that that he will will be prej prejud udice iced d if the the former former is permit permitted ted to deny deny the existence existence of such facts. 1168: Oblig is in not doing and obligor has done what is forbidden, shall be done at his expense. Non-fu Non-fulfi lfillm llment ent:: of the obliga obligatio tion n not to do which is to sublease the fishpond.

3. Fraud Board of Liquidators vs. Heirs of Maximo Kalaw —Copra Trading, Trading, hindi na kelangan ng pirma ng Board of Directors. Nacoco is for the protection protection,, preservatio preservation n and development of the coconut industry. Kalaw is the the mana manage gerr and and boar board d chai chairm rman an.. Naco Nacoco co embark embarked ed on copra copra tradin trading g activi activitie ties, s, thus thus entering into contracts. For 3 years, profited 3M but after 4 typhoo typhoons, ns, left left the coconu coconutt lands lands devastated devastated throughout throughout the country country.. It was not able to fulfill the contracts it has engaged in. Nacoco Nacoco paid damage damagess to one of the parties. parties. Nacoco now sues Kalaw for having approved the contracts. Issue: Issue: WON Kalaw Kalaw is guilty guilty of neglig negligence ence for entering into contracts without prior approval of the Board of Directors. Held: No. Consideration of practice. Corporate officer entrusted with the gen management and control of business has implied authority to make any contract or do other act wichi is necessary or approp appropriat riate e to the conduc conductt of the ordina ordinary ry busine business ss of the corpora corporatio tion. n. But there there is a citation on the Nacoco’s by-laws requiring prior directorate approval of Nacoco contracts. Court considered practice of trade of short-sellling or forward sales. Prev contracts without prior auth from Board. And evidence evidence showed showed that Kalaw actually handled the corp well for it to profit. Force majeure reason.

Fraud: There is no fraud because Kalaw didn’t need need the Board’ Board’ss approv approval al due to practi practice ce of trade. No negligence too on his part.

ICB vs. Gueco—Joint Motion to Dismiss for the car. Gueco Gueco spouse spousess obtaine obtained d a loan loan from from UPC to purcha purchase se car and execut executed ed prom prom note note which which were payable in mnthly installments and chattel mortgage over car to serve as security over the note notes. s. Spou Spouses ses defa defaul ulte ted d in paym paymen ent. t. The The payment was lowered but still no payment. Car was detained inside the bank’s compound. Gueco went went to bank bank and and nego negoti tiat ated ed and and issu issued ed a manager’s check. But car was not released bec Gueco Gueco doesn’ doesn’tt want want to sign sign Joint Joint Motio Motion n to Dismiss claiming not in the contract that they have to sign. Issu Issue: e: WON WON the the bank bank in not not info informi rming ng the the spouse spousess to sign motion motion to dismiss dismiss liable liable for damages for not releasing car. car.

Nece Necess ssit ito o vs. vs. passengers.

Paras aras—K —Knu nuck ckle less

kill killed ed

the the

Action Action agains againstt owners owners and operat operators ors of the commom carrier known as the Phil Rabbit Bus Lines Lines filed filed by one passenge passengerr and the heirs heirs of another who were injured as a result of the fall into into a river in which which they were were riding riding.. The moth mother er of the the pet pet drow drowne ned d and and the the son son Necessito was injured. Issue: WON the carrier is liable for damages. Held: Held: Yes. Although Although resp resp claims claims that that force force majeure since knuckles were the reason for the accident and they have inspected the knuckles, does exercised diligence. Carrier claims liability of manufacturer. Court said that the inspection done done was merely merely visual visual and not meeting meeting the requirement of expected due diligence. Negl Neglig igen ence: ce: In not not diligence required.

exerc exercis isin ing g

the the

prop proper er

5. Contravention of the tenor of the obligation Held Held:: No. No. Join Jointt Moti Motion on to Dismi Dismiss ss for for the the spouses’ benefit and not for the bank. It would only state that the case would be dropped and that the spouses spouses had fully settled settled his obligation obligation thus the dismissal of the case. There is no fraud —no intentional intentional and deliberate deliberate evasion evasion of the normal fulfillment of obligations. Fraud: In not stating that they have to sign Joint Motion Motion to Dismiss Dismiss but this this is not consider considered ed Fraud. Fraud. No intent intent and for the benefi benefitt of the Plaintiff.

4. Negligence

Arrieta vs. Naric—Burmese Rice, di naman pala kayang mag-open ng Letter of Credit. Pet participated in the public bidding by Naric for the supply of 20K MT of Burmese rice. Her bidding being the highest, she was awarded the contract. In 1952, entered into contract, Naric and Pet, sale of rice. Pet obligated obligated herself to deliver to the latter the tons os Burmese rice and in turn corp has to pay for the imported rice by means means of an irrevo irrevocab cable, le, confir confirmed med and assignable letter of credit in US currency. It was only only In July that that def took first step to open open letter of credit. Pet already made a tender to her supplier a 5% and this will be confiscated if L/C will not be receiv received ed before before Aug. Aug. 4. PNB inform informed ed Naric Naric that that L?C approved approved but has a condition that the 50% marginal cash deposit be paid. Naric was not in any financial position to meet the condition and wrote the pet about it.


L/C was opened opened in Sept thus 5% deposit deposit was forfeit forfeited. ed. When When appell appellee ee failed failed to restor restore e cancelled Burmese rice she offered a sub but Naric rejected.

reli reliev eves es the the part partie iess from from fulf fulfil illi ling ng thei theirr obliga obligatio tion n that that time. time. To require require the pet to deli delive verr the the sugar sugarca cane ne duri during ng the the 6 yrs yrs of suspension was impossible of being performed. 6 yrs can’t be deducted from 30 yrs.

Issue: WON Naric should be liable for damages.

La Mallorca vs. De Jesus—tire blow-out. Held: Yes. Failure of the letter of credit to be opened opened in the contemplated contemplated period. period. Immediate Immediate cause of damages. No necessary data but pet would not win bid had she not furnish them with it. Waiver bec Pet Pet suggested to sub it Thai rice. Waiver are not presumed. Express stipulation. Contra Contraven ventio tion: n: That That Burmes Burmese e Rice Rice should should be delivered and should not deliver another thing.

Chavez vs. Gonzales Contra Contraven ventio tion: n: That That they they agree agree that that after after 3 days, typewriter would be usable.

E. Effect of fortuitous event Necessito vs. Paras Effect: Not fortuitous since knuckles should have been inspected more than the visual inspection done.

Ampang vs. Guinco—the bus that skidded. Held: The accident was caused by an accident which was unforeseen and beyond the control of the company on i ts driver. driver.

Held: Cause of the blow-out was known. It was a mechanical defect of the conveyance or a fault in its equipment which was easily discoverable if the bus had been subjected subjected to a more thorough thorough or rigid check-up before it took the road that day. day. The bus was driving fast as was evidenced in the trial.

Nakpil Nakpil vs. CA—Engr/ CA—Engr/Arc Archi hi pati Contrac Contractors tors liable sa pagguho ng bldg. Phil Bar Assoc decided to construct its building in INtramuros Manila. Construction was undertaken by UCCI on administration basis and the plans and specifications of the building were prepared by anothe anotherr party party Nakpil Nakpil.. It was comple completed ted in June June 1966. 1966. In 1968, 1968, a strong strong earthqua earthquake ke hit Manila and building sustained major damages. As temporary remedy UCCI shoved up the building at its own expense expense.. PBA commenced commenced action action agains againstt UCCI UCCI for the partial partial collap collapse se of the buildi building. ng. Allegati Allegations ons wer were e that that there there was a failure failure of the contractor contractorss to follow plans and specifications and violations by the defendants of the terms terms of the contra contract. ct. Def then then filed filed against 3rd party-archi party-architects tects who prepared prepared plans and specifications alleging collapse was due to the defect of it.

Victoria Planters vs. Victorias Milling—30 years contract suspended due to Japanese Invasion.

Issue: WON UCCI and Nakpil be held liable.

Held: Held: 1174 1174 reliev relieves es obligo obligorr from from fulfil fulfillin ling g a contractual contractual obligation obligation (fortuitou (fortuitouss event). event). The stipulation in the contract that in the event of force force majeure majeure,, the contra contract ct shall shall be deemed deemed suspended during the said period does not mean that that the happening happening of those those events events stops the runn runnin ing g of the the peri period od agre agreed ed upon upon.. It only only

Held Held:: Yes. es. The The case case was was refe referr rred ed to the the Commiss Commission ioner er and found found out that that there there wer were e defect defectss in plans plans and specifi specificat cation ionss and that that cont contra ract ctor orss fail failed ed to obser observe ve requ requis isit ite e of workma workmansh nship ip and even even the owners owners failed failed to observe observe requisite degree of supervision supervision in the construction. Fortuitous even will not be applied

bec bec ther there e is negl neglig igen ence ce.. 1723 1723 will will appl apply y. Engine Engineer/ er/ arch who drew up plans and spec spec liable for damages. Contractor liable if edifice falls within the same period on acct of defects in the the cons constr truc ucti tion on or the the use use of mate materi rial alss of inferior quality. Engr/archi will be held solidary liable if supervises construction. Fortui Fortuitou touss Event: Event: Will not apply bec there there is negligence.

Austri Austria a vs. CA—Na CA—Nagla glaka kad d mag-i mag-isa sa sa gabi, gabi, nanakawan ng diamond pendant. Abad acknowledged acknowledged receiving receiving from Austria one pendant with diamonds valued at P4,500 to be sold on commission basis or to be returned on demand. demand. While walking home, Abad was robbed robbed and her things things were taken including pendant. pendant. Estafa Estafa.. RTC RTC ruled ruled neglig negligenc ence. e. CA held held that that robbery was established, fortuitous event. Issue: Issue: WON Abad is liable liable for the loss loss of the pendant. Held: Held: No. It was undisp undispute uted d that that Abad was a victim of robbery. Even when she walked alone at night knowing knowing that she had with with her the pendan pendantt and a large large amount amount of money money,, the crimes then were not as prevalent as the present time. Fortuitous Fortuitous event: Robbery Robbery was unforeseen unforeseen and evidence established that it happened.

Vasquez vs. CA—sinabi na sa captain na may bagyo, tumuloy pa rin. Lumubog. Pioneer Cebu left the port of Manila. The vessel encoun encounter tered ed a typhoo typhoon n and struck a reef reef and subsequently sank. Plaintiffs seek the recovery of damages due to the loss of children and other people due to voyage. There was a storm as def claims but it was established that the captain knew about it but still proceeded.


Issue: WON fortuitous event shall be considered and exempt def from liability. liability. Held: No. They already knew the risk they were taki taking ng.. They They alre alread ady y recei receive ve repo report rt of the the typhoon but proceeded anyway. Def claim Art. 587 Code of Commerce, loss of vessel exempt liability. But it is cited there that the liability of the owner is limited to the value of the vessel or to the insurance thereon. It was held that the insurance of the vessel would be liable for the damages that the shipowner or agent be liable for the death of the passengers. Fortuitous Event: Will not apply bec captain had know knowle ledg dge e of the the even eventt thus thus maki making ng it not not unforeseen.

F. Usurious transactions Angel Jose Warehousing Co vs. Chelda—Loans with usurious interest, principal still enforced but interest not. (P20K+) Angel Jose filed against against Chelda, Chelda, its capitalist capitalist partner for the recovery of the unpaid loans with legal interest and atty’s fees (P20K+). Def paid bal of P5.6K. P5.6K. Plaint Plaintiff iff charge charged d and deduct deducted ed from the loan usurious interest at the rate of 2% and and 2.5% 2.5% PER PER MONT MONTH H and and cons conseq equen uentl tly y, as clai claime med d by def def shou should ld not not be perm permit itte ted d to recover recover under the law. law. RTC-P1048. RTC-P1048.15 15 usurious usurious interest which the payment was deducted from the interest and def claims that it should have been deducted from the principal obligation.

Renunciati Renunciation on of the principal principal would extinguish extinguish accessory but waiver of the accessory would not extinguish the principal. b. Yes. Divisible contract, that which is illegal can be separated separated from legal ones and the latter latter may be enforc enforced. ed. Interes Interestt which would would be allowed is the interest bec of delay and default due to the general provisions of the law. law. Usurio Usurious us obliga obligatio tion: n: Princi Principal pal only only, interest not enforced.

usurio usurious us

Briones vs. Cammayo—P1500 lang utang pero interest P300 per year-usurious. year-usurious. Briones filed against Cammayo to recover P1500. They executed a real mortgage as security for the the loan loan of P120 P1200 0 give given n by Camm Cammay ayo o upon upon usurious agreement and reserved to himself P300 payment payment of interest for a year. Plaintiff Plaintiff paid tota totall sum sum of P330 P330 but but Camma Cammayo yo refu refuse sed d to acknowledge it as payment for principal but for interest of loan for a year. Issue: Issue: WON credit creditor or entitl entitled ed to collec collectt the principal obligation and interest. Held: Yes. But only as to the principal. Ruling of Angel vs. Chelda. Usurio Usurious us obliga obligatio tion: n: Princi Principal pal only only, interest not enforced.

usurio usurious us

G. Presumption of interest and installments ***Hill vs. Veloso

Issue: a. WON in loans with usurious interest, the plaintiff plaintiff may still recover recover the principal of the loan. b. WON the illegal terms as to the payment of interest renders nullity as to the payment of the principal debt. Held: a. Yes. Creditor may still recover principal of the loan. Loans with usurious interest are not tota totall lly y void void but but only only as to the the inte intere rest st..

***Vda De Ongsiako vs. Cabatuando H. Action Subrogation Accion Subrogatoria: Subrogatoria: action which the creditor may ma y exe exerc rcise ise in the place of his negligen negligentt debtor in order to preserve or recover for the patrimony of the debtor the product of such

action acti on,, an and d th then en ob obta tain in th ther eref efro rom m th the e satisfaction of his own credit. Double function: conserving cons erving the patr patrimo imony ny of the debtor by brin br ingi ging ng in into to it pr prop oper erty ty ab aban ando done ned d or neglected by him AND of making execution on such property effective thereafter. “Debtor’s “Debtor’s debtor is my own debtor”. Debtor who is sued may ma y set up aga agains instt the pl plain aintif tifff the sa same me defe de fens nse e he co coul uld d se sett up ag agai ains nstt hi hiss ow own n creditor. If the action succeeds, the plaintiff is entitled only to so much as is needed to satisfy his credit; credit; if the there re is any balance balance,, it sha shall ll pertain to his debtor. debtor. Goldstar Minig vs. Lim Jimena—mining claims pinondohan, hindi na siya binayaran sa usapan. Jime Jimena na lent lent to Linc Lincal allo lo mone money y to purc purcha hase se mining mining claims claims and they agreed agreed that ½ f the proceeds shall be given to Jimena. Mining rights over part of the claim were assigned to Gold Star befo before re WWII WWII and and copr copr paid paid Linc Lincal allo lo P500 P5000 0 royalties. Lincallo entered contracts without the knowledge of Jimeana. Marquez contracted with Gold Gold Mining Mining and 45% should should go to Lincal Lincallo. lo. Another company contracted and stipulated 43% would go to Lincallo. Jimena demanded part but he was not paid. Issue: WON Jimena has a cause of action against Gold Mine when it contracted only with Lincallo. Held: Yes. Art. 1177 provides that 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 latter (debtor) for the same purpose, save which are inherent inherent in his person. 1883: the principal principal may sue the person with whom the agent dealt with in his own name, when the transaction involves things belonging to the principal. AS: File against debtor of his debtor.


Esta Estate te of Hern Hernan ande dez z vs. vs. Luzo Luzon n Sure Surety ty— — namatay namatay yung guaranto guarantorr, namana namana rin yung utang niya.

Lichauco Lichauco vs. Figuera Figueras-Her s-Hermano manos—Lo s—Lorcha rchas, s, emergency and regular use.

Luzon Luzon Surety Surety filed filed agains againstt estate estate of Hemady Hemady based on 20 different indemnity agreements and couterbounds by the deceased in consideration of guaranteeing guaranteeing various principals in favor of differ different ent credit creditors ors.. Hemady Hemady died died and estate estate claim not liable bec of death.

Held: The amendment to the contract bet the plaintiff plaintiff and def was expressly expressly conditioned conditioned on the defs being being the successfu successfull bidder bidderss at the letting and they were not the winners. Second cont contra ract ct has has no force force but but the the first first one. No showing that they have given new life to the agreement.

Issue: WON death death extinguishes extinguishes obligation obligation of the estate.

Wise Wise & Co vs. Kelly Kelly—hi —hindi ndi naman sinabi sinabi na ibenta yung goods sa ganitong halaga.

Held: No. Obligations extinguished by death are: a. supp suppor ortt b. pare parent ntal al auth auth c. usuf usufru ruct ct d. contracts for a piece of work d. partnership e. agency agency.. Articl Articles es that that regula regulate te guaran guaranty ty or suretyship contain no provision that the guaranty is extinguished upon the death of guarantor. Art. 774 and 776 (succession and inheritance) state that heir succeed no only to the rights but also to the obligations.

Held: No proof that Kelly has not turned over all the the mone money y rece receiv ived ed from from the the sale sale of the the mercha merchandi ndize ze so that that Lim, Lim, the surety, has no liability liability.. The condition condition is that Lim will pay if Kelly has not turned over all the sales of the merchandise but not that he shall pay if all the sales has not amounted to the original amount of obligation. There is no stipulation that the goods were to be sold at a certain price, or not less than what it should be.

AS: Obligation was subrogated to the heirs of the dead person.

Santiago vs. Millar—nanalo sa sweepstakes pero nawala ang ticket.

1. Pure Obligations Pay vs. Palanca—naningil Palanca—naningil ng utang after 15 yrs, nagprescribe. Held: Every obligatio obligation n whose performance performance does not depend upon a future or uncertain event or upon upon a past past unkno unknown wn to the part partie ies, s, it is demandable at once.

2. Conditional Obligations a. with suspe suspensive nsive/res /resolut olutory ory condi conditions tions

Held: No. The action for revocation of a donation is 10 yrs. They They have have filed filed case after after 14 yrs. Althou Although gh condit condition ion was not compli complied ed with, with, revocation should have been made before the sale of the land. Req: 1. consent of the donee of the revocation 2. judicially judicially decreed. Onerous donations, 10 yrs prescription.

CPU vs. CA—nagdo CA—nagdonate nate ng land for medical medical school pero hindi ginawa. No period but 50 yrs na nakalipas di pa rin ginawa. Don Lopez donated land to CPU on the condition that it would be used for the establishment of a medica medicall school school and that CPU cannot cannot sell sell or convey the land to any party. CPU failed to do so and even exchanged land with another another with the NHA. Heirs filed for annulment of donation. Issue: WON donation annulled.

Held: The ticket sold has a notation that prize will be paid upon the surrender of the ticket. The surrender or presentation of the ticket is a condition precedent of payment.

Held: No. Although there is a need to fix a period bec the contract did not stipulate period when to comm commen ence ce cond condit itio ion. n. Howe Howeve verr, in consideration of the facts, 50 years have lapsed for the condition to be complied with and CPU was not able to perform. SC ruled to reconvey to heirs the land.

Parks Parks vs. Prov of Tarlac—nagdonate Tarlac—nagdonate ng land for school school and public public park in 6 mos pero hindi ginawa.

Aguilar vs. Cititrust—yung hindi ko maintind maintindihan ihang g kaso kaso or baka baka hindi hindi lang siya talaga relevant under this title.

III. KINDS OF OBLIGATION A. PURE AND AND CONDITION CONDITIONAL AL OBLIGA OBLIGATION TIONS S

Issue: WON Parks is the owner of the land bec of non-performance of the condition of the mun of tarlac.

Cirer and Hill were owners of parcels of land and donated it to the municipality of Tarlac on the condition that erection of a public school and a public public park park shall shall be commen commenced ced within within the period of 6 months. Tarlac failed. Cicer and Hill sold land to Parks. Parks pray for annulment of donation.

b. Po Potest testative ative Mixed Cond Conditio itions ns Shot Shotwe well ll vs. vs. Mani Manila la Moto Motor— r—Ba Bank nkss chartered to accept liability.

were were

Held: Held: The banks banks will will not be liable liable since they didn’t accept that they will should liability. The lease was extinguished by the fire that occurred


and the chartered banks being a sublessee of the Manila Motor which contracted lease also from Shotwell, will not be liable for the construction of the the dest destro roye yed d buil buildi dings ngs.. No pote potest stat ativ ive e condition. Lease Lease for the enjoym enjoyment ent of the premises premises.. No fault on part of anyone.

Smith Smith Bell Bell vs. Sotel Sotello lo Matti— Matti—i-d i-deli eliver ver yung yung equipment pero depende sa gobyerno. Held: The conditions did not depend upon the will of the debtor alone. There is no delay since there existed rigid restrictions restrictions during the that time of world war. It is a mixed one because dependent also of the will of the third person or the US govt whether to allow the delivery or not.

Trillana rillana vs. Quezon Quezon Colleges— Colleges—if if I harveste harvested d fish. The stipulation stipulation in this case was that the obligor would pay the full value of a subscription for shares shares in the Quezon Quezon Colleg College e after after she had harvested fish. Held: This condition is obviously depended upon the sole will of the obligor, and the conditional obligation is void, because it would have served to crea create te an obli obliga gati tion on to pay pay, the the whol whole e obligation is void. **When **When conditiona conditionall obligatio obligation n is void, then it would convert the obligation to a pure obligation which would be demandable at once.

Osme Osmena na vs. vs. Rama Rama—I —Iff the the hous house e of stro strong ng materials is sold, I will pay my debt. Held: If the statement foun d in the ackn acknow owle ledg dgem emen entt shou should ld be rega regard rded ed as a condition, it was a condition dependent upon the exclusive will of the debtor, and is, therefore, void. The acknowledgement, therefore, was an

absolute acknowledgement of the obligation and was was suff suffic icie ient nt to prev preven entt the the stat statut ute e of limita limitatio tions ns from from barring barring the action action upon upon the original contract.

Hermo Hermosa sa vs. Longa Longara ra—as —as soon soon as I receiv receive e funds derived from the sale of my property in Spain. Held: The condition implies that the obligor has already decided to sell his house or at least that he had made his creditors to pay his indebt indebtedn edness ess demand demandabl able e is that that the sale sale be consummated and the price thereof remitted to the the islan islands ds.. Not Not a pure purely ly pote potest stat ative ive one, one, depending upon the wi ll of the obligor, but partly upon chance, i.e. presence of the buyer of the proper property ty for the price price and under under condit condition ionss desired by the obligor. obligor.

c. Impo Impossib ssible le and and Illic Illicit it condi conditions tions Luneta Luneta Motor Motor Co. vs. Abad—if Abad—if I recove recovered red judgment in the action but he died during the trial. Held: The obligation is subject to the condition that that when the plaint plaintiff iff recove recovered red judgme judgment, nt, they shall deliver the property so released to the officer officer of the court for the payment payment of said said judgment of in default, pay its full value. Since Abad died, it has become a legal impossibility since no judgment shall be rendered.

Galang vs. CA—you pay 25% within 3 months or upon the removal of the encargado. encargado. Held: The removal of the encargado was not a condition condition precedent to the fulfillment fulfillment of the contra contract. ct. What we have have is a contra contract ct to sell wherein the ownership is retained or title until the fulfillment of a positive condition, normally the payment of the purchase price in the manner agreed upon. It was just an alternative period for the payment of the second in stallment.

d. posi positive tive and nega negative tive cond condition itionss 3. Constructive Fulfillmen Fulfillmentt Taylor aylor vs. Uy Tieng—d Tieng—dapat apat may trabaho trabaho siya pero pero binaw binawii ni Uy Tieng Tieng dahil di magan maganda da sitwasyon. “FOR ANY REASON” Held: “Should the machinery to be installed in the said factory fail, for ANY REASON, 6 months from from the date hereof, hereof, this this contra contract ct may be cancelled”. The def can rescind the contract bec their reason falls under “any reason”. But there is no constructive fulfillment on this case. Constructive fulfillment: condition shall be deemed deemed fulfil fulfilled led if the oblig obligor or intent intention ionall ally y impedes its fulfillment, has no application to the cases of the resolutory provision giving to the obli obligo gorr a righ rightt to canc cancel el cont contra ract ct upon upon contingency within the control of the obligor. obligor.

Herrera Herrera vs. Leviste—GS Leviste—GSIS IS and Leviste Case. Teehankee’s Dissent. Tehanke ehankees es Dissent Dissent:: Levist Leviste e was guilty guilty of bad faith and violated the terms of the contract thus there is constructive constructive fulfillment. fulfillment. Herrera was required by GSIS to submit papers to support his assump assumptio tion n but could could not be approv approved ed until until Herrera could submit a final deed of sale and Leviste did not execute this deed. He prevented the assumption of Herrera of the mortgage. Not only that, Leviste is in arrears for 14 months in its amortization and Herrera did not know that. 1186 and 1169 (reciprocal obligations).

Tayag ayag vs. vs. CA—e CA—est stop oppe ped d bec bec rece receip iptt payments and knowledge of irregularities. irregularities.

of

Held: The acceptance of the petitioners of the vari variou ouss paym paymen ents ts even even beyo beyond nd the the perio periods ds agreed upon, was perceibved by the lower court as tantamount to faithful performance performance of the obligation. obligation. 1186 applies to both obligees and obligors in reciprocal obligations even when the


Coronel vs. CA—Downpayment

proviso only speaks of the obligor. Pet accepted the performance knowing its incompleteness and irregularity and without expressing any protest or object objection ion,, the obligati obligation on is deemed deemed to be complied with.

Retroact Retroactive: ive: From the moment moment the obligation obligation was constituted, upon payment of full balance, retroact to that date.

Coronel vs. CA—Receipt of Downpayment Downpayment

5.Preservation of Creditor’s Rights

Held: Intent of the parties has to be considered. It was a contract of sale and not a contract to sell sell.. Cont Contra ract ct of sale sale—o —own wners ershi hip p alre alread ady y transferred transferred upon fulfillment fulfillment of the suspensive cond condit itio ion. n. Abso Absolu lute te sale sale.. Cont Contra ract ct to sell sell-althou although gh suspen suspensiv sive e condit condition ion was compli complied ed with, ownership will not automatically transfer. Ther There e is stil stilll a need need to convey convey titl title e to the prospective buyer by entering into a contract of absolute sale.

Art. Art. 1188: 1188: The credi creditor tor may may, befor before e the fulf fulfil illm lmen entt of the the cond condit itio ion, n, brin bring g the the appropriate actions for the preservation of his right. The debtor may recover recover what during during the same time he has paid by mistake in case of a suspensive condition.

4. Retroactivity of Obligation Padill Padilla a vs. Patern Paterno-his o-his mom is the universal universal heir and not his wife-paraphernal. Held: The ownership of the land is retained by the wife until she is paid the value of the lot, as a resu result lt of the the liqu liquid idat atio ion n of the the conj conjug ugal al partne partnersh rship. ip. There There mere mere constr construct uction ion of the buil buildi ding ng fro from comm common on fund fundss does does not not automatically convey the ownership of the wife’s land to the conjugal partnership. The properties’ conversion from paraphernal to conjugal assets would be deemed to retroact to the time the conjugal buildings were first constructed thereon or at the very latest, the time before the death of Narcisso Padilla that ended the partnership. The acquisi acquisitio tion n by the partne partnersh rship ip of theses theses prop proper erti ties es was was subj subjec ectt to the the susp suspen ensiv sive e condition that their values would be reimbursed to the widow at the liquidation of the conjugal part partne ners rship hip;; once once paid paid,, the the effe effect ctss of the the fulfillment of the condition should be deemed to retr retroa oact ct to the the date date the the obli obliga gati tion on was was constituted.

6. Rescission in Reciprocal Obligations Obligations Ocejo vs. Interbank—maswerteng Interbank—maswerteng assignee. Yung Yung asuka asukall na nasa nasa ibang ibang wareho warehouse use na kinuha ng banko. Held: The thing sold not subject subject to condition condition that the buyer was the pay the price before the delivery. On demandability: No term having been stipulated on payment, it should be demandable at the time and place of the delivery of the thing sold. Demandable at once and failure to do so would would entitl entitle e obligo obligorr either either perfor performan mance ce or rescission. rescission. But rescission rescission should be applied applied to the court for a decree for the rescission of the contract. contract. No rescission rescission was was made before before the insolvency insolvency of plaintiff, plaintiff, the assignee assignee standing standing on the shoes of the buyer has a better right.

Albert vs. University Publishing—publishing Publishing—publishing the Revised Penal Code. Held: It was the defendant corporation who had breached the contract. The plaintiff has written letters reminding the corp that the contract will be deemed rescinded if the corp would not fulfill its obligation. Accg to Tolentiono: Rescission must be judicially invoked. Unless there is a stipulation of period

when the contract contract would be deemed rescinded. rescinded. If one party is willing to perform and the other is not extraextra-jud judici icial al resciss rescission ion would would suffic suffice e if there is stipulation. However, if there has been a perfor performan mance ce alread already y by one of the partie parties, s, rescission rescission should should already already be judicially judicially invoked regard regardless less whether whether there there is a stipul stipulati ation on or none, none, espe especi cial ally ly if the the othe otherr part party y reje reject ctss rescission.

UP vs. Delos Angeles—award of logging rights; rescission without need of judicial suit. Held: In the agreement, there is a stipulation that UP has “the right and power to consider the Logging Logging Agreement Agreement date Dec 2 1960 rescinded rescinded without the necessity of a judicial suit. 1191’s consideration: There is nothing in the law that proh prohib ibit itss that that part parties ies from from ente enteri ring ng into into agre agreeme ement nt that that viol violat atio ion n of the the term termss of contract would cause cancellation thereof even without court intervention. BUT PROCEEDS AT AT ITS RISK RISK.. Extr Extraa-ju judi dici cial al reso resolu luti tion on will will rema remain in contestable and subject to judicial invalidation, unless attack thereon should become barred by acquiescence, estoppel or prescription.

Roque Roque vs. Lapuz—1 Lapuz—10 0 yrs yrs to pay pay, I can can pay anytime within the 10 years. Held: Qualification for rescission: so substantial and fundamen fundamental tal to defeat defeat the object object of the parties. Absence of a formal deed of conveyance is a very strong indication that the parties did not intend immediate transfer of ownership and title, but only a transfer after full payment of the price. Intent of the parties was to have the obligation be paid in monthly installment.

Herrera vs. Leviste Tehankee’ ehankee’ss dissent: dissent: Upon Leviste’ Leviste’ss refusal refusal to execute the deed of sale, Herrera has the option of specific performance or the rescission of the contract.


Zulueta vs. Mariano—Avellana a movie director made made movies movies for Zuluet Zulueta a for his polit politica icall campaign, automatic rescission clause. Held: There is an automatic rescission rescission clause in the contract and the fact that pet has cancelled contra contract, ct, resp has no right to remain remain in the premises. Extra-judicial rescission shall only take legal legal effect effect where the other party does not oppose it.

rescinded it is the duty of the Court to require both parties to surrender that which they may have respectively respectively received and to place each othe otherr as far far as prac practi tica cabl ble e in his his orig origin inal al situation. The exercise of the power to rescind extinguished the obligatory relation as if it had never never been been create created, d, the extinc extinctio tion n having having a retroactive effect.

B. OBLIGATIONS WITH A PERIOD Delta Delta Motor Motor Corp Corp vs. Genuin Genuino— o—del delive ivery ry of black iron pipes for iceplant and storage. Held Held:: Power ower to resc rescind ind unde underr 1191 1191 is not not absolute. The act of a part in treating a contract as canceled or resolved on account of infractions by the other contracting contracting party must be made known known to the other and is always always provis provision ional al subject to the scrutiny and review by the proper court. Delta Delta –no manifesta manifestatio tion n that that it had opted opted to rescind rescind contract, it has possession possession of the two irons and the downpayment and has waived the performance of conditions of the contract when they opted to go on with the contract only with a much higher price.

Ong vs. Bognalbal Rescission: Upon the infraction of Ong, Bognalbal could have filed rescission of the contract or the performance of it.

Carrascoso vs. CA—notice of lis pendence but continued with the sale of the land. 1972-El 1972-El Dorado sold to Carrascoso Carrascoso the parcel of land July 1975- Buy and Sell bet Carrasco and PLDT April 1977- Carrasco to PLDT May 30, 1977 PLDT to PLDTAC May 15, 1977-notice of lis pendens Held Held:: Noti Notice ce of Lis Lis pend penden ens, s, but but stil stilll PLDT PLDT conveyed land to PLDTAC. Where a contract is

PNB PNB vs. Lopez Lopez Vito— Vito—loa loan n of spous spouses es when when there is a condition and a period stipulated. Held: The non-fulfillment non-fulfillment of the conditions conditions of the contract renders the period ineffective, and makes the obligation demandable at the will of the credit creditor or.. Failur Failure e to pay would would make make the enti entire re obli obliga gati tion on due due and and dema demand ndab able le,, so regardless regardless of the period of other installment installments, s, def has to pay the entire obligation.

Smith Bell vs. Matti Held Held:: There There also also was a stip stipul ulat ated ed peri period od however there is also a condition which states that delivery would depend upon the US govt. Upon the lapse of the period and the condition bars the performance, def will not be liable.

Gaite vs. Fonacier—expir Fonacier—expiration ation of the surety, debtor loses the benefit of the period. Mining claim case. Held: 1198 states when debtor loses the benefit of the period. The surety contract expired and Fonacier Fonacier didn’t didn’t renew or replaced replaced the surety. surety. Sale of the ore was not a suspensive condition but a suspensive period, fixing the future date of the payment.

Qui vs. CA—factory was razed to the ground and failure of lease to rebuild the building of the lessee. (the building building to be constru constructed cted shall belong to the resp lessor after 20 yrs).

Held: 1197. If obligation does not fix a period but from its nature and circumstance it can be inferred that a period was intended , the courts may fix the duration thereof. Will also fix period when whe n it depend dependss upon upon will will of the debtor debtor. In determining period, courts will have to consider the the circ circum umst stan ance cess and and see see if peri period od was was contemplat contemplate. e. The contract contract doesn’t doesn’t stipulate stipulate a period period,, thus thus the court held that resp has to institute a judicial action to fix the period. (this case is an ejectment ejectment case so fixing a period was not alleged in the case).

Sarmiento vs. Villasenor—loan with a pledge of a medal with a diamond in the center with 10 diamo diamonds nds surro surround unding ing it, pair pair of diamo diamond nd earr earrin ings gs,, comb comb with with 22 diam diamds ds,, and and two two diamond rings! Daming diamonds!!! Held: In a contract of loan with interest wherein a term was fixed for the payment thereof, it is presumed that said terms was established for the benefit of the creditor as well as that of the deb debtor tor, unle unless ss fro from its its teno enor or other her circumstances it appears to have been stipulated for the benefit of one only. In such a case the debtor has no right to pay the debt before the lapse of said period, without the consent of the credit creditor or,, and demand demand the devolu devolutio tion n of the goods that were pledged to secure the payment. Only after the expiration of said period may the debtor debtor make make paymen payment, t, and, and, theref therefore ore,, the action action for the recovery recovery of the goods pledged pledged arises only after the lapse of said for the purpose of the computation for he period of prescription of said actions.

Daguhoy Enterprises vs. Ponce—nagsecure ng mortgage as guaraty sa loan sa isang corp tapos after after ibigay ibigay yung loan, withdrew withdrew mortgaged mortgaged properties then mortgage them again sa ibang corp for another loan. Madaya. Held: Although the contract stipulates that loan payable in 6 years, but because of the failure to


give and register the security agreed upon in the form of two deeds of mortgage, the obligation becomes becomes pure and without without condition thus due and immedi immediate ately ly demand demandabl able. e. 1198, 1198, lost lost the benefit of the period.

month lease since the rentals were payable on a monthly basis.

Victorias Planter, supra

Held Held:: An agre agreem ement ent to exte extend nd the the time time of payme payment nt in orde orderr to be vali valid d must must be for for a definite time. The cause of action was for the fixing of the period.

De Leon Leon vs. Syjuco Syjuco—gu —gust sto o ng magbay magbayad ad ng debtor pero ayaw pang tanggapin ng creditor. Held: Consignation was not valid. Req: a. debt due b. consignation has been made bec creditor to whom payment is made refused to accept, or was absent or incapacitated c. prev notice of consig consignat nation ion to the person person intere intereste sted d in the perfo perform rman ance ce d. amou amount nt due due plac placed ed at the the disposal of the court 3. after consignation had been made, the person interested was notified thereof. Reasons why creditor can’t be forced to accept payment a. may want to keep his money invested safely instead of having it in his hands. B. to protect himself of sudden decline on the purchasing power of the currency loaned. Unless credit creditor or consen consents, ts, debtor debtor cannot cannot accele accelerat rate e payment.

Millare vs. Hernando—yung bahay niya gusting gawing resto e ayaw niya nga. Held: On the contract, it is stipulated that the lease may be renewed after a period of 5 years unde underr the the term termss and and cond condit itio ions ns as will will be mutually agreed upon by the parties at the time of the renewal. 1197 and 1670 of the CC (fixing of period, and after 15 days of occupying the leased leased proper property ty and withou withoutt any notice notice from from less lessor or, cont contra ract ct shall shall be renew renewed ed). ). It is understood that there is an implied new lease, not for the period of the original contract, but for the time established by 1682 and 1687. The other other terms terms of the contract contract shall shall be revive revived. d. After the expiration of the contract, the implied new lease could not possibly have the period of 5 years, but rather would have been a month-to-

Pacif acific ic Bank Bankin ing g Corp Corp vs. vs. CA—n CA—neg egos osyo yo sa cultivation of fish and saltmaking bumagsak.

Song Song Fo vs. Oria— Oria—lau launch nch was sold sold but but was shipwrecked, Song Fo did not insure and Oria did not secure. Held: Held: The launch launch was with with Oria already already and knowing that the launch has not been insured yet, sent it from Manila to Samar and on the trip it was shipwrec shipwrecked ked.. The contra contract ct stipul stipulate atess quarterly installments. Since the vessel is lost, Oria Oria does doesn’ n’tt want want to pay pay. Tha That unp unpaid aid installments of the purchase price of the launch, which under the express terms of the contract had not become due and payable at the time of the loss of the vessel, became due and payable under the provisions of article 1129 of the Civil Code, upon the failure of the purchaser, within a reasonable time after the loss of the launch, to offer either satisfactory security or to give bond to secure the payment of the unpaid installment of the purchase price.

C. ALTE TERN RNA ATI TIV VE OBLIGATIONS

AND

FACU CUL LTATI TIVE VE

of the house and lot is likewise barred as the agreement to make such conveyance was not an independent principal undertaking, but merely a subs subsid idiar iary y alte altern rnat ativ ive e pact pact rela relati ting ng to the the method by which the debt might be paid.

Ong Guan Guan Can vs. Centur Century—t y—the he insur insuranc ance e comp company any doesn’ doesn’tt want want to rebuil rebuild d with with the same materials. Held: On the contract the insurance company obliga obligated ted itself itself to either either pay the amount amount to which the house was insured or rebuild it. The debtor must notify the creditor of his election, stating which prestation he is disposed to fulfill. The effect of notice is to give the creditor, that is, the plaintiff in the instant case, opportunity to express his consent, or to impugn the election made by the debtor, and only after said notice shal shalll the the elect electio ion n take take lega legall effe effect ct when when consented by the creditor, or impugned by the latt latter er, when when decl declar ared ed impr improp oper er by the the competent court.

D. JOINT AND SOLIDARY Jaucian vs. Queroi—surety was solidarily liable, then surety died. Held: The right of a guarantor or surety to insist on the the exha exhaus usti tion on of the the prop proper erty ty of the the principal debtor, before his own shall be taken in execution does not exist where the guarantor or surety is jointly and severally bound with the principal debtor.

Agon Agonci cill llo o vs. vs. Javi Javier er—A —Ana nast stac acio io Alano lano mortgaging his property to pay the debt.

Ramos vs. Gibbon—Mining Gibbon—Mining Claims, Possessory Possessory Rights of a Qualified Locator.

Held: Anastacio was only a rep of his children, and and his his part partia iall paym paymen entt does does not not affe affect ct prescri prescripti ption on not for the benefit benefit of the other debtor debtors. s. The mortga mortgage ge was never never record recorded ed ther theref efor ore e inva invali lid. d. Acti Action on to reco recove verr has has prescribed, the action to compel a conveyance

Held: The concurrence concurrence of two or more creditors creditors or of two or more debtors with respect to the same obligation does not imply that each of the former is entitled to demand the performance of the obligation in its entirety or that each of the latter is bound to perform it. This shall be the


case only when the expressly so provided by the terms terms of the obligati obligation, on, and the partie partiess are bound in solido. The presumption, in the absence of the stipulatio stipulation n as to how certain certain debtors are bound, is that they are bound jointly.

Versoza vs. Lim—Collision of Perla and Ban Yek. Held: Where a collision occurs between tow seagoin going g vess vessel els, s, caus caused ed excl exclus usiv ivel ely y by the the carelessness of the navigating officers in charge of one of the vessels, both the owner and the operat operating ing compan company y direct directly ly in charge charge of the offending vessel are liable for the damage done. The rule that joint obligations are apportionable unle unless ss othe otherw rwise ise spec specia iall lly y prov provid ided ed has has no applic applicati ation on to obliga obligatio tions ns arisin arising g from from tort. tort. Persons who cooperate in the tortuous infliction of damage are jointly and severally liable. Contractual Obligations-joint Tortuous act-joint and severally liable

Ronquillo Ronquillo vs. CA—foods CA—foodstuff, tuff, individual individually ly and jointly, auction of furnitures on same day of hearing for reconsideration. Held: Clearly then, by the express term of the compromise agreement and the decision based upon it, the defendants obligated themselves to pay their obligation, “individually and jointly”. The term “individually” has the same meaning as “collective “collectively”, ly”, “separately “separately”, ”, “distinctive “distinctively”, ly”, respectively, and severally. An agreement to be individually liable undoubtedly creates a several obliga obligatio tion n and a severa severall obliga obligatio tion n is one by which one individual individual binds himself to perform perform the whole obligation.

Oritz Oritz vs. Cayan Cayanon— on—Bar Barto tolom lome e Ortiz Ortiz,, ayaw ayaw umalis sa premises dahil sa mga improvements na ginaw ginawa a niya niya at hindi hindi siya siya nakas nakasama ama sa bidding. Nangolekta pa ng toll. Held: Presumption when two persons are liable under a contract or judgment and no mention of the the spec specif ific ic liab liabil ilit ity y of each each for for the the enti entire re

obli obliga gati tion on.. With With resp respec ectt to the the amou amount nt of reim reimbu burs rseme ement nt to be paid paid by Comi Comint ntan an,, it appear appearss that that the dispos dispositi itive ve porti portion on of the decision was lacking in specificity, as it merely provid provided ed Zamora Zamora and Comint Comintan an jointl jointly y liable liable therefore. When two persons are liable under a contract or under a judgment, no words appear in the contract or judgment to make each liable for the entire obligation, the presumption is that their their obliga obligatio tion n is mancom mancommuna munada, da, and each each debtor is liable only for a proportionate part of the obligation. The judgment debt of 13K should be pro-rated pro-rated in equal shares to Comintan and Zamora.

Imperial Imperial Insuran Insurance ce vs. David—spou David—spouses ses bound bound themselve themselvess to be solidary solidary and jointly jointly liable, liable, husband died. Held: Held: If husban husband d and wife wife bound bound themsel themselves ves jointly and severally, in case of his death her liability liability is still solidary solidary and may be sued for the whole whole debt. debt. The Rules of Court Court provid provide e the proc proced edur ure e shou should ld the the cred credit itor or desi desire re to go against the deceased debtor, but there is nothing in the said said provis provision ion making making compli complianc ance e with with such procedure a condition precedent before an ordina ordinary ry action action agains againstt the surviv surviving ing solida solidary ry debtors, should the creditor choose to demand payment from the latter, latter, could be entertained to the extent extent that that failur failure e to observ observe e the same would would depriv deprive e the court court jurisd jurisdict iction ion to take take cognizance cognizance of the action against the surviving surviving debt debtor ors. s. CIVI CIVIL L Code Code allo allows ws the the cred credit itor or to proceed against any of the solidary debtors or some or all of them simultaneously. simultaneously. Hence, there is nothing improper in the creditor’s filing of an action action agains againstt the surviv surviving ing solid solidary ary debtor debtorss alone, instead of instituting a proceeding for the settlement of the estate of the deceased debtor wherein his claim could be filed.

Inchausti vs. Yulo—magkakapatid Yulo—magkakapatid na hindi pa nagkasundo sa remission na binigay.

Held: Held: The remissi remission on of any part part of the debt, debt, made by the creditor in favor of one or more his solidary debtors, inures to the benefit of the rest of them, and these latter may utilize in their favor favor the defens defense e of remissi remission. on. The solida solidary ry debtor unconditionally obligated or whose period for payment has expired, may not, with respect to the part of the debt he is liable, plead the defense of prematurity of the action, which is personal to his co-debtors.

BPI vs. McCoy—McCoy paid all the debts and was subrogated with the rights to contribution from his co-debtors. Held: Where one of the several persons who are sued upon a joint and several liability elects to pay the whole, such person is subrogated to the rights of the common creditor and may properly substituted in the same action as plaintiff for the purpos purpose e of enforc enforcing ing contri contribut bution ion from from his former associates under art. 1145. **But Ma’am said, this is not the same meaning of real subrogation of rights.

Chines Chinese e Chambe Chamberr of Commer Commerce ce vs. Pua Te Ching—Surety was jointly ans severally liable, principal died. Held: The surety may use against the creditors all the defenses which the principal principal debtor is entitled and that are inherent in the debt, but not those purely personal to the debtor, to wit, thos those e whic which h may cont contri ribu bute te to weake weaken n or destroy destroy the juridical bond existing between the creditor and the principal debtor, not any means of defense defense which which may invali invalidat date e the origin original al contract from which the tight or the action of the creditor against the security arises in this class class of actins is not included included the means means of defense as to how the trial may be continued and the writ of execution issued in case of the death death of the principal principal debtor debtor which which can not affect the original contract nor destroy the bond exis existi ting ng bet bet the the cred credit itor or and and the the prin princip cipal al


debtor debtor, it being, being, theref therefore ore,, an except exception ion or means of defense no inherent in the debt, but at the most, a purely personal one of the debtor or the successors-in-interest of the debtor. debtor.

Int’l Finance vs. Imperial Textile—guarantee vs. surety Held Held:: Alth Althou ough gh it stat states es “Gua “Guara rant ntee ee”, ”, the the stipulations of the contract make it clear that “jointly and severally” phrase is the one used in the contract. Surety: Surety: person person binds himself solidary solidary with the principal debtor, debtor, primary liability Guaran Guaranty: ty: contra contract ct whe whereb reby y a person person binds binds himself to the creditor to fulfill the obligation of the principal principal in case the latter should fail to do so, secondary liability. liability.

Cons Constr truc ucti tion on Dev Dev. Vs. Vs. Estr Estrel ella la—B —Bus us was was rammed rammed and their knees knees are pinned to the seats in front of them. Held: The bus company, its driver, the operator of the other vehicle and the driver of the vehicle were jointly and severally liable to the injured passeng passenger er or the latter latter’’s heirs. heirs. Nor should should it make any difference that the liability of pet (bus owne owner) r) sprin springs gs from from cont contra ract ct while while that that of respondents (owner and driver of other vehicle) arises from quasi-delict. Bus owner-contract, owner and owner of other vehicle-quas vehicle-quasi-deli i-delict ct : both jointly and severally severally liable.

E. DIVISIBLE AND INDIVISIBLE OBLIGATION Art. 1223-1225 F. OBLIGATION WITH WIT H A PENAL CAUSE Manila Racing vs. Manila Jockey—forfeiture of what was partially paid.

Held: The clause of the contract referring to the forfeiture forfeiture of the P100,00 already paid, should the the purc purcha hase sess C fail fail to pay pay the the subs subseq eque uent nt installments, is valid, It is in the nature of a penal clause which be legally established by the part partie ies. s. In its its doub double le purp purpos ose e of insur insurin ing g compliance with the contract and of otherwise measuring measuring beforehand the damages damages which may result from non-compliance, it is not contrary to law, morals or public order bec it was voluntarily and and know knowin ingl gly y agre agreed ed upon upon by the the part partie ies. s. Viewing Viewing concretely the true effects effects thereof thereof in the the pres presen entt case case,, the the amou amount nt forf forfei eite ted d constitutes only 8% of the stipulated price, which is not excessive if considered as the profit which would have been obtained had the contract been complied complied with. There is, moreover moreover,, evidence evidence that the defendants, defendants, because of this contract with C, had to reject other propositions to buy the same property. At any rate, the penal clause does away with the duty to prove the existence existence and measure measure of the damages damages caused caused by the breach.

Caridad Est. vs. Santero—loan to be paid in 60 days and failure to do so, those already paid shall be forfeited. Antich Antichresi resis: s: a contra contract ct whe whereb reby y the credit creditor or acquir acquires es the right to receiv receive e the fuirts fuirts of an immovable of his debtor with the obligation to apply them to the payment of interest if owing and thereafter to the principal of his credit. Penal Penal ClauseL ClauseL generally generally intended intended to substitute substitute the indemnity for damages and the payment of inte intere rest stss in case case of nonnon-co comp mpli lian ance ce of the the obligation. Held: The provisions in which the parties have indicated in the contract is a penal clause which carries the express waiver of the vendee to any all sums he had paid when the vendor, upon his inab inabil ilit ity y to comp comply ly with with his his duty duty,, seek seekss to recover recover passions passions of the property, property, a conclusive conclusive recognition of the right of the vendor to the said

sums, and avoid unnecessary litigation designed to enfo enforc rce e fulf fulfil illm lmen entt of the the term termss and and conditions agreed upon. Said provisions are not unjust or inequitable and does not, as appellant contends, contends, make the vendor vendor unduly rich at his cost and expense.

Bachrach Motors vs. Espiritu—obligation partly perfor performed med,, 25% penalt penalty y, reduc reduced. ed. WHI WHITE TE TRUCKS. Held: Held: Intere Interest st and penalty penalty are not the same. same. When the obligation has been partly performed, the the CC auth author oriz izes es the the cour courtt to redu reduce ce the the penalty thereon.

Cabbarroguis Cabbarroguis vs. Vicente—jeep accident. Held: The refusal of the defendant defendant to pay when the demand was made by plaintiff entitles the latter to interest on the penalty. 2210 provides that in the discretion discretion of the court, court, interest may be allowed upon damages warded for breach of contract. This interest is recoverable from the time of delay, that is to say, from the date of demand, either judicial or extrajudicial. And if there there is no show showing ing as to when when dema demand nd for for payment was made, plaintiff must be considered to have made such demand only from the filing of the complaint.

Hodges Hodges vs. Javellana Javellana--ice --iceplan plantt softdrint, ice drop and fixture.

machiner machinery y,

Held: The provisions in the contract between the parties relative to the compounding of interest partake the nature of a penal clause and under 1229, may be reduced by court if iniquitous or unconscionable.

Pamintuan vs. CA—plastic sheetings Held: Held: The theory theory that that penal and liquida liquidated ted damage damagess are the same cannot cannot be sustai sustained ned wher where e the the obli obligo gorr is guil guilty ty of frau fraud d in the the


fulfillment fulfillment of his obligatio obligation. n. The penalty clause clause is strictly penal or cumulative in character and does does not not part partak ake e the the natu nature re of liqu liquid idat ated ed damages when the parties agree. Concurring Antonio: A creditor in case of fraud by the obligo obligorr is entitl entitled ed only only to the stipul stipulate ated d pena penalt lty y plus plus the the diff differ erenc ence e bet bet the the prov proven en damages and such stipulated penalty. penalty.

Robes-Francisco Realty vs. CFJ – Held: A contract of sale which stipulate payment of interest at 4% per annum in case vendor fails to issue a certificate of title to vendee is not a penal penal clause clause becaus because e even even withou withoutt it vendee vendee would be entitled to interest at the legal rate of 6% per annum. It is therefore therefore inconceivable that the aforecited provision in the deed of sale is a penal clause clause which will will preclude preclude an award of damages to the vendee Millan.

Makati Makati Devt Corp vs. Empire Empire Insuran Insurance ce Co.— you should build a house on the lot or else. Held: Mitigation of the penalty is allowed where there is partial payment of the obligation, the reduction of the penalty is justified. This is true where the indemnity provided for is essentially a mere penalty , having for its object to compel compliance with the contract.

Umali vs. Miclat—creation of an advertisement LAGRIMAS Held: Under the law, a penalty takes the place of interests only if there is no stipulation to the contrary, and even then, damages may still be coll collec ecte ted d if the the obli obligo gorr refu refuse sess to pay pay the the penalty.

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