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Documente Cultură
OBLIGATIONS AND
CONTRACTS
QUESTIONS
1988-2016
1
them is sufficient to extinguish the obligation. A facultative
obligation on the other hand is one where the debtor is bound to
perform one prestation with a right to choose another prestation as
substitute.
3
payment and consignation. Strictly speaking, however, application of
payment by its very nature, is not a special form of payment.
MIGUELS ANSWER: The special forms of payments are Dacion en
pago, payment by cession and consignation.
4
extinguishing the judgement obligation and creating a modified
obligatory relation? Reasons.
SUGGESTED ANSWER: There is no implied novation in this case. We
see no valid objection to the judgement debtor and the judgement
creditor in entering into an agreement regarding the monetary
obligation of the former under the judgement referred to. The
payment by the judgement debtor of the lesser amount of P4,000,
accepted by the creditor without any protest or objection and
acknowledged by the latter as in full satisfaction of the money
judgement, completely extinguished the judgement debt and
released the debtor from his pecuniary liability.
Novation results in two stipulationsone to extinguish an existing
obligation, the other to substitute a new one in its place.
Fundamental it is that novation effects a substitution or modification
of an obligation by another or an extinguishment of one obligation
by the creation of another. In the case at hand, we fail to see what
new or modified obligation arose out of the payment by judgement
debtor of the reduced amount of P4,000 to the creditor. Additionally,
to sustain novation necessitates that the same be so declared in
unequivocal terms clearly and unmistakably shown by the express
agreement of the parties or by acts of equivalent importor that
there is complete and substantial incompatibility between the two
obligations.
MIGUELS ANSWER: There is no implied novation, what is present is
a partial remission of P2,000. The amount of P4,000 is still due and
demandable. An implied novation is said to have occurred only if
there is no declaration that the old obligation is extinguished by the
new one but the old and new obligations are incompatible and
cannot co-exist. In this case, the obligations are not incompatible,
there is still a debt due although the amount was reduced.
5
Coast of Samar. (1) Is there a perfected contract in this case? Why?
(2) Is the promise to pay made by Violy conditional or with a term?
Why? (3) Can Merle compel Violy to pay the purchase price and to
accept the automobile? Why?
SUGGESTED ANSWER: (1) Yes, there is a perfected contract because
there is already a concurrence between the offer and the acceptance
with respect to the object and the cause which shall constitute the
contract. Such concurrence is manifested by the acceptance made by
Merle of the offer made by Violy.
(2) I submit that the promise to pay made by Violy is not
conditional, but with a term. The promise is to pay the P50,000 upon
arrival in this port of the steamer, Helena, not if the steamer Helena
shall arrive in this port. Hence, the promise is with regard to the
date of arrival and not with regard to the fact of arrival.
(3) Yes, Merle can compel Violy to pay the purchase price and to
accept the automobile. She will, however have to wait for the date
when the steamer, Helena, would have arrived were it not for the
shipwreck. After all, there is already a perfected contract.
MIGUELS ANSWER: (1) Yes, there is a perfected contract. A contract
is deemed perfected upon the concurrence of the essential requisites
provided for by Art. 1318 of the Civil Code. There is consent as
shown by acceptance of both parties of the offers and counter-offers
of one another, there is an object agreed upon which is the
automobile and a cause which is the promise to pay by Violy of the
amount agreed upon for the automobile. There is a meeting of the
minds by the parties upon the object and the cause therefore there
is already a perfected contract.
(2) The promise to pay is subject to a term. The stipulation agreed
upon by the parties is that payment would be effected upon arrival
therefore such is a question of when rather than if. An obligation is
subject to a term if the stipulation is certain to happen, and on the
other hand subject to a condition if the stipulation is future and
uncertain. In this case, the arrival is sure to happen thereby making
it a question of when rather than if.
(3) Yes, Merle can compel Violy to pay the price and accept the
automobile as there was already a perfected contract.
6
Distinguish and implied contract from a quasi-contract.
SUGGESTED ANSWER: An implied contract requires consent of the
parties. A quasi-contract is not predicated on consent, being a
unilateral act. The basis of an implied contract is the will of the
parties. The basis of a quasi-contract is law to the end that there be
no unjust situation.
MIGUELS ANSWER: An implied contract is different from a quasi-
contract in terms of the presence of consent. In an implied contract,
the consent of the parties is present although it is not expressly
given, it is deducible from the conduct of the parties. A quasi-
contract on the other hand, does not require the consent of the
parties but is an obligation based on equity and ensuring that there
be no unjust enrichment between the parties.
7
X offered to buy the house ad lot of Y for P300,000. Since X had only
P200,000 in cash at the time, he proposed to pay the balance of
P100,000 in four (4) equal monthly installments. As the title to the
property was to be immediately transferred to the buyer, X to secure
the payment of the balance of purchase price, proposed to constitute
a first mortgage on the property in favor of Y. Y agreed to the
proposal so that on April 15, 1987, the contract of sale in favor of X
was constituted and on the same date (April 15, 1987), X
constituted the said first mortgage. When the first installment
became due. X defaulted in the payment thereof. Y now brings an
action to rescind the contract of sale, which X opposed. How would
you decide the conflict? Give your reasons.
SUGGESTED ANSWER: Y can rescind. Specific performance and
rescission are alternative remedies in breach of reciprocal
obligations. The contract is only partly consummated. The price is
not fully paid. The mortgage is an accessory contract of guarantee
and can be waived by the creditor who can avail of his remedies in
the principal contract.
MIGUELS ANSWER: Y cannot rescind. Jurisprudence provides that
slight breaches of the contract will not justify rescission. In this case
X can be deemed to have substantially complied with the contract of
sale paying 2/3 of the purchase price. In order to justify rescission,
the breach of the contract should be substantial that it would defeat
the object of the parties in entering into the contract, that there is
substantial breach, cannot be said in this case.
8
The action will prosper if there is no objection to the oral evidence,
which amounts to a waiver of the stature of frauds.
MIGUELS ANSWER: Yes, the action of X may prosper provided that
there be no objection to the oral evidence presented regarding the
oral agreement entered into by X and Y. While there is a perfected
contract, it is unenforceable for failure to comply with the Satute of
Frauds, because it is an agreement for the sale of goods at a price
not less than P500, it is required to be in writing. However, the Civil
Code also provides that contracts infringing the Stature of Frauds
may be ratified provided that there be a failure to object to the
presentation of oral evidence to prove the same.
9
How is a civil obligation distinguished from a natural obligation?
Give an example of a natural obligation
SUGGESTED ANSWER: Civil obligations give a right of action to
compel their performance. Natural obligations, not being based on
positive law but on equity but on equity and natural law, do not
grant a right of action to enforce their performance, but after
voluntary fulfillment by the obligor, they authorize the retention of
what has been delivered or rendered by reason thereof. Example of a
natural obligation: when a right to sue upon a civil obligation has
lapsed by extinctive prescription, the obligor who voluntarily
performs the contract cannot recover what he has delivered or the
value of the service he has rendered.
MIGUELS ANSWER: Civil obligations are obligations that can be
enforced through a civil suit, it is an obligation which gives rise to a
cause of action. Natural obligations on the other hand are
obligations do not grant a cause of action, it is an obligation that is
merely based on equity. An example of a natural obligation is when a
third party pays for the debt of another which the obligor is not
legally bound to pay because it has prescribed but the debtor
voluntarily reimburses such third person, the obligor cannot recover
what he has paid.
10
parents or guardians at the time they contracted the extra-judicial
partition.
(b) In the case of fraud, when through insidious words or
machinations of one party the other is induced to enter into the
contract without which he would not have agreed to, the action still
prosper because under Art. 1391 of the Civil Code in case of fraud,
the action for annulment may be brought within four years from the
discovery of the fraud.
MIGUELS ANSWER: (a) Yes, minority can be the basis of nullifying
the partition. Minority is one of the restrictions provided for in the
Civil Code that limits a persons capacity to act or enter into certain
agreements. D,E, and F not being represented by parents or
guardians can be the basis to nullify the partition.
(b) If fraud was present, the action will also prosper as fraud is
considered as a vitiation of consent, which makes the contract
voidable there being a lack of one of the essential requisites of a
contract.
11
SUGGESTED ANSWER: Labor Legislations are generally intended as
expressions of public policy on employer-employee relations. The
contract therefore, between Japan Air Lines and Maritess may apply
only to the extent that its provisions are not inconsistent with
Philippine labor laws intended particularly to protect the employees.
Under the circumstances, the dismissal of Maritess without
complying with Philippine labor law would be invalid and any
stipulation in the contract to the contrary is considered void. Since
the law of the forum in this case is the Philippine law, the issues
should be resolved in accordance with Philippine law.
MIGUELS ANSWER: The lawyer of JAL is wrong. Although the parties
have the freedom to stipulate anything they want in the contract it is
still subject to the rule that it is not contrary to law, morals, good
customs and public policy. The stipulations in the employment
contract must still be in compliance with labor laws in the
Philippines as these labor laws were created in order to protect the
rights of laborers in the Philippines, stipulations violating such is
contrary to law and public policy.
12
Yes, Roland is liable under the contract as far as Lady Love is
concerned. He is liable for damages under Article 1170 of the Civil
Code since he contravened the tenor of his obligation. Not being a
contracting party, Sweet Taste is not bound by the contract but it
can be held liable under Art. 1314. The basis of its liability is not
prescribed by contract but is founded on quasi-delict, assuming that
Sweet Taste knew of the contract. Article 1314 of the Civil Code
provides that any third person who induces another to violate his
contract shall be liable for damages to the other contracting party.
MIGUELS ANSWER: Roland is bound by the contract he entered into
with lady love. Rolands defense is unmeritorious and has no legal
basis. Roland is liable for breach of contract for violating his
obligation with Lady Love. Sweet Taste can also be held liable for
inducing Roland to violate his contract.
13
Alfonso. Pablos resort would be to sue Alfonso for violation of BP 22
or the bouncing checks law for issuing a check knowing that it has
no funds to pay another.
14
Bar Question (1992)
Liability; Solidary Obligation
In June 1988, X obtained a loan from A and executed with Y as
solidary co-maker a promissory note in favor of A for the sum of
P200,000.00. The loan was payable at P20,000.00 with interest
monthly within the first week of each month beginning July 1988
until maturity in April 1989. To secure the payment of the loan. X put
up as security a chattel mortgage on his car, a Toyota Corolla sedan.
Because of failure of X and Y to pay the principal amount of the loan,
the car was extrajudicially foreclosed. A acquired the car at A's
highest bid of P120,000.00 during the auction sale.
After several fruitless letters of demand against X and Y, A sued Y
alone for the recovery of P80.000.00 constituting the deficiency. Y
resisted the suit raising the following defenses: a) That Y should not
be liable at all because X was not sued together with Y. b) That the
obligation has been paid completely by A's acquisition of the car
through "dacion en pago" or payment by cession. c) That Y should
not be held liable for the deficiency of P80,000.00 because he was
not a co-mortgagor in the chattel mortgage of the car which contract
was executed by X alone as owner and mortgagor. d) That assuming
that Y is liable, he should only pay the proportionate sum of
P40,000.00. Decide each defense with reasons.
SUGGESTED ANSWER: (a) This first defense of Y is untenable. Y is
still liable as solidary debtor. The creditor may proceed against any
one of the solidary debtors. The demand against one does not
preclude further demand against the others so long as the debt is
not fully paid.
(b) The second defense of Y is untenable. Y is still liable. The chattel
mortgage is only given as a security and not as payment for the debt
in case of failure to pay. Y as a solidary co-maker is not relieved of
further liability on the mortgage.
(c) The third defense of Y is untenable. Y is a surety of X and the
extrajudicial demand against the principal debtor is not inconsistent
with a judicial demand against the surety. A suretyship may co-exist
with a mortgage.
(d) The fourth defense of Y is untenable. Y is liable for the entire
prestation since Y incurred a solidary obligation with X. (Arts. 1207,
1216. 1252 and 2047 Civil Code; Bicol Savings and Loan Associates
vs. Guinhawa 188 SCRA 642)
15
MIGUELS ANSWER: (a) Y is wrong. The obligation being solidary, A
can demand payment from any of the debtors at whatever amount
but not exceeding that which is due and subject to Ys right to
reimburse Xs share in the debt.
(b) Y is wrong. Obligation has not been extinguished as there is still
a deficiency of P80,000 that X and Y must still pay A. The car was
merely a security provided by them to ensure A that they would pay
but does not equate or amount to dacion en pago or cession which
may extinguish the obligation.
(c) Y is wrong. Y is still a surety of X and can still be held liable as a
surety despite the existence of a mortgage.
(d) Y is wrong. A can demand the the whole P80,000 from any of the
debtors the obligation being solidary. Y cannot be said to be liable
for only P40,000 but for the entire amount subject to his right to get
reimbursement from X of his proportionate share.
Bar Question (1993)
Extinguishment; Loss; Impossible Service
In 1971, Able Construction, Inc. entered into a contract with Tropical
Home Developers, Inc. whereby the former would build for the latter
the houses within its subdivision. The cost of each house, labor and
materials included, was P100,000.00. Four hundred units were to be
constructed within five years. In 1973, Able found that it could no
longer continue with the job due to the increase in the price of oil
and its derivatives and the concomitant worldwide spiraling of prices
of all commodities, including basic raw materials required for the
construction of the houses. The cost of development had risen to
unanticipated levels and to such a degree that the conditions and
factors which formed the original basis of the contract had been
totally changed. Able brought suit against Tropical Homes praying
that the Court relieve it of its obligation. Is Able Construction
entitled to the relief sought?
SUGGESTED ANSWER: Yes, the Able Construction. Inc. is entitled to
the relief sought under Article 1267, Civil Code. The law provides:
"When the service has become so difficult as to be manifestly
beyond the contemplation of the parties, the obligor may also be
released therefrom, in whole or in part."
MIGUELS ANSWER: Yes, the court may grant the relief sought by
Able Construction Inc. The Civil Code provides that the court may
release the obligor from his responsibility when the service has
become so difficult that it has gone beyond the expectations of the
16
parties. However, the intention of the parties must still prevail, it is
only when the courts deem that the difficulty goes beyond the
intention and expectation of the parties that courts may intervene.
17
whose negligence caused the accident. If no price has been paid at
all, the trial court acted correctly in dismissing the complaint.
MIGUELS ANSWER: The trial court is wrong. The defense of loss of
the thing due to a fortuitous event can only be used if the obligor is
not yet in delay. In this case the car was due to be delivered on
December 31, 1993, Ben was already in delay when he lost the car
due to the accident, he cannot therefore use the defense loss due to
fortuitous event.
18
MIGUELS ANSWER: 1) Yes, Chino can demand payment on the 1991
promissory note. The 1978 promissory note can be considered as the
consideration for the new 1991 promissory note thereby renewing
the period of prescription starting from the issuance of the new
promissory note.
2) No, the mortgage was extinguished when the first promissory
note to which it was attached prescribed. Mortgage being merely an
accessory contract, is extinguished once the contract to which it was
attached is extinguished.
19
Bar Question (1996)
Nature of Contracts; Privity of Contract
Baldomero leased his house with a telephone to Jose. The lease
contract provided that Jose shall pay for all electricity, water and
telephone services in the leased premises during the period of the
lease. Six months later. Jose surreptitiously vacated the premises.
He left behind unpaid telephone bills for overseas telephone calls
amounting to over P20,000.00. Baldomero refused to pay the said
bills on the ground that Jose had already substituted him as the
customer of the telephone company. The latter maintained that
Baldomero remained as his customer as far as their service contract
was concerned, notwithstanding the lease contract between
Baldomero and Jose. Who is correct, Baldomero or the telephone
company? Explain.
SUGGESTED ANSWER: The telephone company is correct because as
far as it is concerned, the only person it contracted with was
Baldomero. The telephone company has no contract with Jose.
Baldomero cannot substitute Jose in his stead without the consent of
the telephone company (Art. 1293, NCC). Baldomero is, therefore,
liable under the contract.
MIGUELS ANSWER: The telephone company is correct. The
telephone company contracted with Baldomero, Jose is not included
in that contract. As far as the telephone company is concerned, the
obligation to pay the bills lies with Baldomero regardless of whether
or not he is the one using it. Baldomero cannot refuse to pay.
20
especially when she has not suffered damages resulting from such
promise. A promise does not create an obligation on the part of Juan
because it is not something which arises from a contract, law, quasi-
contracts or quasi delicts (Art, 1157)]. Under Art. 1182, Juan's
promise to Maria is void because a conditional obligation depends
upon the sole will of the obligor.
As regards Perla, the document is an express acknowledgment of a
debt, and the promise to pay what he owes her when he feels like it
is equivalent to a promise to pay when his means permits him to do
so, and is deemed to be one with an indefinite period under Art.
1180. Hence the amount is recoverable after Perla asks the court to
set the period as provided by Art. 1197, par. 2.
MIGUELS ANSWER:
21
Jojos entire share, the creditor can only demand for the shares of
Joey and Jovy. Since the obligation is solidary, Joey can be
compelled to pay for the entire remaining balance after subtracting
Jojos share.
2) Jojo can be compelled to pay P50,000 which is half of the share of
Jovy, a co-debtor who has become insolvent. The Civil Code provides
that when one or more of the solidary co-debtors are insolvent, his
share will be borne by his co-debtors.
22
Distinguish consensual from real contracts and name at least four
(4) kinds of real contracts under the present law.
SUGGESTED ANSWER: Consensual Contracts are those which are
perfected by mere consent (Art. 1315. Civil Code). Real Contracts are
those which are perfected by the delivery of the object of the
obligation. (Art. 1316, Civil Code) Examples of real contracts are
deposit, pledge, commodatum and simple loan (mutuum).
MIGUELS ANSWER: Consensual contracts are contracts that are
perfected by mere consent of the parties, from that moment of
consent, the parties are already bound to fulfill the obligation agreed
upon. Real contracts on the other hand are contracts that are
perfected by the delivery of the object. Delivery is required for real
contracts to be valid in addition to the presence of the other
essential elements of a contract. Examples of real contracts are
deposit, pledge, commodatum, and mutuum.
23
Manuel to Eva, the buyer need not return the property to Eva
because he bought it in good faith and for value. If however he was
made aware of the agreement between Manuel and Eva, he is
obliged to return such property as the ownership is subject to the condition
of Eva passing the bar exam.
(b) No, Eva is not entitled to the rentals of the house and lot prior to
her passing the bar examinations. The right to the fruits of the
object will only be vested upon the other party once he has the right
to demand for the thing that is the object of the contract. Eva only
had the right to demand for the house and lot upon the happening of
the condition, therefore she has no right to demand for the rentals
prior to that.
24
Lolita was employed in a finance company. Because she could not
account for the funds entrusted to her, she was charged with estafa
and ordered arrested. In order to secure her release from jail, her
parents executed a promissory note to pay the finance company the
amount allegedly misappropriated by their daughter. The finance
company then executed an affidavit of desistance which led to the
withdrawal of the information against Lolita and her release from
jail. The parents failed to comply with their promissory note and the
finance company sued them for specific performance. Will the action
prosper or not?
SUGGESTED ANSWER: The action will prosper. The promissory note
executed by Lolita's parents is valid and binding, the consideration
being the extinguishment of Lolita's civil liability and not the stifling
of the criminal prosecution.
MIGUELS ANSWER: The action will prosper. The promissory note is
valid and can therefore give rise to a cause of action upon non-
fulfillment. The parents failing to pay, the finance company can
therefore sue them for the payment of the amount due.
25
Arturo borrowed P500,000.00 from his father. After he had paid
P300,000.00, his father died. When the administrator of his father's
estate requested payment of the balance of P200,000.00. Arturo
replied that the same had been condoned by his father as evidenced
by a notation at the back of his check payment for the P300,000.00
reading: "In full payment of the loan". Will this be a valid defense in
an action for collection?
SUGGESTED ANSWER: It depends. If the notation "in full payment of
the loan" was written by Arturo's father, there was an implied
condonation of the balance that discharges the obligation. In such
case, the notation is an act of the father from which condonation
may be inferred. The condonation being implied, it need not comply
with the formalities of a donation to be effective. The defense of full
payment will, therefore, be valid.
When, however, the notation was written by Arturo himself. It
merely proves his intention in making that payment but in no way
does it bind his father (Yam v. CA, G.R No. 104726. 11 February
1999). In such case, the notation was not the act of his father from
which condonation may be inferred. There being no condonation at
all the defense of full payment will not be valid.
MIGUELS ANSWER: It is a valid defense if the condonation was done
by the father. If the notation at the back of the check was written by
the father then it may be deemed an implied condonation of the
remaining balance of the loan.
26
SUGGESTED ANSWER: The unlawful detainer action will not prosper.
Extraordinary inflation or deflation is defined as the sharp decrease
in the purchasing power of the peso. It does not necessarily refer to
the exchange rate of the peso to the dollar. Whether or not there
exists an extraordinary inflation or deflation is for the courts to
decide. There being no showing that the purchasing power of the
peso had been reduced tremendously, there could be no inflation
that would justify the increase in the amount of rental to be paid.
Hence, Brian could refuse to pay the increased rate.
MIGUELS ANSWER: The action will not prosper. For the defense of
inflation or deflation to be valid, there must be an official
pronouncement or declaration
27
of the debtor. For there to be a valid substitution, consent of the
creditor must be obtained. In this case, the consent of the farmers was
not obtained by the Central Azucarera before assigning the rights to the
Taiwanese group. The assignment is therefore invalid.
28
of the corporation. Accordingly, Stockton gave written notice to the
corporation of his offer to sell his shares of P 10 million. The
response of Core corp. was an acceptance of the offer in the exercise
of its rights of first refusal, offering for the purpose payment in form
of compensation or set-off against the amount of damages it is
claiming against him, exclusive of the claim for attorneys fees.
Stockton rejected the offer of the corporation, arguing that
compensation between the value of the shares and the amount of
damages demanded by the corporation cannot legally take effect. Is
Stockton correct? Give reason for your answer.
SUGGESTED ANSWER: Stockton is correct. There is no right of
compensation between his price of P10 million and Core Corp.s
unliquidated claim for damages. In order that compensation may be
proper, the two debts must be liquidated and demandable. The case
for the P 10million damages being still pending in court, the
corporation has as yet no claim which is due and demandable
against Stockton.
MIGUELS ANSWER: Stockton is correct. In order for there to be a
valid compensation, one of the requisites that Art. 1279 of the Civil
Code provides is that the debts be liquidated and demandable. In
this case, since the claim for damages is still pending in court, the
amount has not been liquidated yet therefore one of the requisites
for a valid compensation is lacking.
29
counters that: (a) Suplico cannot demand payment for deliveries
made under their order agreement until Suplico has completed
performance under said contract; (b) Suplico should pay damages
for breach of contract; and (c) with Publico should be liable for
Printados breach of his contract with Publico because the order
agreement between Suplico and Printado was for the benefit of
Publico. Are the contentions of Printado tenable? Explain your
answers as to each contention
SUGGESTED ANSWER: No, the contentions of Printado are untenable.
Printado having failed to pay for the printing paper covered by the
delivery invoices on time, Suplico has the right to cease making
further delivery. And the latter did not violate the order agreement
(Integrated Packaging Corporation v. Court of Appeals, (333 SCRA
170, G.R. No. 115117, June 8, [2000]).
Suplico cannot be held liable for damages, for breach of contract, as
it was not he who violated the order agreement, but Printado.
Suplico cannot be held liable for Printados breach of contract with
Publico. He is not a party to the agreement entered into by and
between Printado and Publico. Theirs is not a stipulation pour atrui.
[Aforesaid] Such contracts do could not affect third persons like
Suplico because of the basic civil law principle of relativity of
contracts which provides that contracts can only bind the parties
who entered into it, and it cannot favor or prejudice a third person,
even if he is aware of such contract and has acted with knowledge
thereof. (Integrated Packaging Corporation v. CA, supra.)
MIGUELS ANSWER: The contentions of Printado are unmeritorious.
Printado failed to comply with his obligation to pay Suplico for the printing
papers that Suplico has delivered, Suplico therefore had the right to stop
making further delivery until Printado complies with their obligation. Suplico
cannot be held liable for damages as it was Printado who breached the
contract because of their non-payment despite the prior deliveries made by
Suplico of the printing papers. Suplico cannot be held liable for the failure of
Printado to comply with Printados obligation to Publico as Suplico is
not part of the contract between the prior two.
30
to pay when he likes; c) If the debtor promises to pay when he
becomes a lawyer; d) If the debtor promises to pay if his son, who is
sick with cancer, does not die within one year.
SUGGESTED ANSWER: (a) The obligation is valid. It is an obligation
subject to an indefinite period because the debtor binds himself to
pay when his means permit him to do so (Article 1180, NCC). When
the creditor knows that the debtor already has the means to pay, he
must file an action in court to fix the period, and when the definite
period as set by the court arrives, the obligation to pay becomes
demandable 9Article 1197, NCC)
(b) The obligation to pay when he likes is a suspensive condition
the fulfillment of which is subject to the sole will of the debtor and,
therefore the conditional obligation is void. (Article 1182, NCC).
(c) The obligation is valid. It is subject to a suspensive condition, i.e.
the future and uncertain event of his becoming a lawyer. The
performance of this obligation does not depend solely on the will of
the debtor but also on other factors outside the debtors control
(d) The obligation is valid. The death of the son of cancer within one
year is made a negative suspensive condition to his making the
payment. The obligation is demandable if the son does not die within
one year (Article 1185, NCC).
MIGUELS ANSWER: (a) VALID. It is an obligation subject to an
indefinite period and is demandable upon the fixing of the period by
the parties or through the courts.
(b) VOID. The obligation is an obligation subject to a potestative
condition which according to the Civil Code are considered void.
(c) VALID. The obligation is an obligation subject to a suspensive
condition and is demandable upon the occurrence of the condition or
as in this case upon him becoming a lawyer.
(d) VALID. The obligation is subject to a suspensive condition. It is
demandable upon the end of 1 year if his son has not died by then.
31
old. b) C has already been condoned by X c) D is insolvent. d) E was
given by X an extension of 6 months without the consent of the
other four co-debtors. State the effect of each of the above defenses
put up by A on his obligation to pay X, if such defenses are found to
be true.
SUGGESTED ANSWER: (a) A may avail the minority of B as a defense,
but only for Bs share of P 10,000.00. A solidary debtor may avail
himself of any defense which personally belongs to a solidary co-
debtor, but only as to the share of that co-debtor.
(b) A may avail of the condonation by X of Cs share of P 10, 000.00.
A solidary debtor may, in actions filed by the creditor, avail himself
of all defenses which are derived from the nature of the obligation
and of those which are personal to him or pertain to his own share.
With respect to those which personally belong to others, he may
avail himself thereof only as regards that part of the debt for which
the latter are responsible. (Article 1222, NCC).
(c) A may not interpose the defense of insolvency of D as a defense.
Applying the principle of mutual guaranty among solidary debtors, A
guaranteed the payment of Ds share and of all the other co-debtors.
Hence, A cannot avail of the defense of Ds insolvency.
(d) The extension of six (6) months given by X to E may be availed
of by A as a partial defense but only for the share of E, there is no
novation of the obligation but only an act of liberality granted to E
alone.
MIGUELS ANSWER: (a) The share of that co-debtor would be
deducted from the total amount due. The minority of one of the
solidary co-debtors is a valid defense and would benefit his co-
debtors
(b) The part of C will be deducted from the total amount that is due
and demandable from the remaining co-debtors.
(c) The co-debtors would have to shoulder the share of an insolvent
co-debtor in proportion to their share in the debt
(d) The extension would benefit A only as to the share of E. The
amount that is demandable would therefore be reduced to an
amount subtracting the share of E until his share becomes due and
demandable.
32
Bar Question (2004)
Inexistent Contracts vs. Annullable Contracts
Distinguish briefly but clearly between Inexistent contracts and
annullable contracts.
SUGGESTED ANSWER: Inexistent Contracts are considered as not
having been entered into and, therefore, void ab initio. They do not
create any obligation and cannot be ratified or validated, as there is
no agreement to ratify or validate. On the other hand, Annullable or
Voidable Contracts are valid until invalidated by the court but may
be ratified. In inexistent contracts, one or more requisites of a valid
contract are absent. In anullable contracts, all the elements of a
contract are present except that the consent of one of the
contracting parties was vitiated or one of them has no capacity to
give consent.
MIGUELS ANSWER: Inexistent contracts are contracts that have no
force and effect from the beginning and which cannot be ratified by
lapse of time. An annullable contract or a voidable contract on the
other hand are contracts which are valid until annulled. Voidable
contracts are subject to ratification.
33
consent of the parties; (2) object certain which is the subject matter
of the contract; and (3) cause of the obligation.
Marvin will not be liable to pay Carlos any damages for withdrawing
the offer before the lapse of the period granted. In this case, no
consideration was given by Carlos for the option given, thus there is
no perfected contract of option for lack of cause of obligation. Marvin
cannot be held to have breached the contract. Thus, he cannot be
held liable for damages.
MIGUELS ANSWER: The withdrawal of the offer means that there
can be no contract. A contract would only be born upon the meeting
of the minds of the parties and the acceptance of the offer of one by
the other. There being no offer, acceptance cannot be effected
thereby eliminating the possibility of having a contract.
b) Will your answer be the same if Carlos paid Marvin P10,000.00 as
consideration for that option? Explain.
SUGGESTED ANSWER: My answer will be the same as to the
perfection of the contract for the construction of the house of Carlos.
No perfected contract arises because of lack of consent. With the
withdrawal of the offer, there could be no concurrence of offer and
acceptance.
MIGUELS ANSWER: Yes, my answer will be the same. Since there is
no perfected contract, no obligation arises.
c) Supposing that Carlos accepted the offer before Marvin could
communicate his withdrawal thereof? Discuss the legal
consequences.
SUGGESTED ANSWER: A contract to construct the house of Carlos is
perfected. Contracts are perfected by mere consent manifested by
the meeting of the offer and the acceptance upon the thing and the
cause which are to constitute the contract. (Gomez v. Court of
Appeals, G.R. No. 120747, September 21, 2000)
Under Article 1315 of the Civil Code, Carlos and Marvin are bound to
fulfill what has been expressly stipulated and all consequences
thereof. Under Article 1167, if Marvin would refuse to construct the
house, Carlos is entitled to have the construction be done by a third
person at the expense of Marvin. Marvin in that case will be liable for
damages under Article 1170.
MIGUELS ANSWER: If the offer was accepted before it was
withdrawn there is a valid contract that can be the source of
obligations arising from their agreements.
34
Bar Question (2007)
Obligations
What are the obligations without an agreement? Give examples of situations
giving rise to this type of obligation.
SUGGESTED ANSWER: Obligations without an agreement are obligations
that do not arise from contract such as those arising from: 1) delicts 2)
quasi-delicts 3) solutio indebiti 4) negotiorum gestio and 5) all other
obligations arising from law
35
rentals by XYZ Bank is not yet due, but the principal obligation of loan where
both Eduardo and Recardo are bound solidarily and therefore any of
them is principally bound to pay the entire loan, is due and
demandable without need of demand. XYZ Bank may declare its
obligation to pay rentals as already due and demand payment from any of
the two debtors.
(b) No, because there was no prior demand on Ricardo, depriving him of the
right to reasonably block the foreclosure by payment. The waiver of prior
demand in the PN is against public policy and violates the right to due
process. Without demand, there is no default and the foreclosure is null and
void. Since the mortgage, insofar as Ricardo is concerned is not violated, a
requirement under Act 3135 for a valid foreclosure of real estate mortgage is
absent.
In the case of DBP vs Licuanan, it was held that: the issue of whether
demand was made before the foreclosure was effected is essential. If
demand was made and duly received by the respondents and the latter still
did not pay, then they were already in default and foreclosure was proper.
However, if demand was not made, then the loans had not yet become due
and demandable. This meant that respondents had not defaulted in their
payment and the foreclosure was premature.
(c) None of the three kinds of novation is applicable. There is no objective
novation, whether express or implied, because there is no change in the
object or principal conditions of the obligation. There is no substitution of
debtors, either. Compensation is considered as abbreviated or simplified
payment and since Recardo bound himself solidarily with Eduardo, any
facultative compensation which occurs does not result in partial
legal subrogation. Neither Eduardo nor Recardo is a third person
interested in the obligation under Art. 1302 of the Civil Code
MIGUELS ANSWER: (a) XYZ may assert compensation. The requisites for a
valid application of compensation are present in this case. XYZ and
Eduardo are creditors of one another, Eduardo as to the promissory note that
is due and XYZ as to the rentals which are also due, both debts are
demandable and both consists in debts of a sum of money that is
liquidated and demandable. All of the requisites for compensation are
present and this XYZ may validly apply compensation in the fulfillment of the
debt of Eduardo to them.
(b) Recardos property may be foreclosed upon proper showing that
demand was made upon him and he failed to pay, without which
foreclosure cannot be effected.
(c) None. There is no novation in this case as there was no change in object,
condition, or debtor.
36
Bar Question (2008)
Felipe borrowed $100 from Gustavo in 1998, when the Phil P - US$ exchange
rate was P56 - US$1. On March 1, 2008, Felipe tendered to Gustavo a
cashier's check in the amount of P4,135 in payment of his US$ 100 debt,
based on the Phil P - US$ exchange rat at that time. Gustavo accepted
the check, but forgot to deposit it until Sept. 12, 2008. His bank
refused to accepted the check because it had become stale. Gustavo
now wants Felipe to pay him in cash the amount of P5,600. Claiming
that the previous payment was not in legal tender, and that there
has been extraordinary deflation since 1998, and therefore, Felipe
should pay him the value of the debt at the time it was incurred.
Felipe refused to pay him again, claiming that Gustavo is estopped
from raising the issue of legal tender, having accepted the check in
March, and that it was Gustavo's negligence in not depositing the
check immediately that caused the check to become stale.
(a) Can Gustavo now raised the issue that the cashier's check is not
legal tender?
(b) Can Felipe validly refuse to pay Gustavo again?
(c) Can Felipe compel Gustavo to receive US$100 instead?
SUGGESTED ANSWER:
(a) No, because Gustavo is guilty of estoppel by laches. He led Felipe to
believe he could pay by cashiers check, and Felipe relied that
such cashier check would be encashed this extinguishing his
obligation. Because of Gustavos inaction of more than six
months the check became stale and Felipe will be prejudiced if he
will be required to pay $100 at the exchange rate ofP56 to $1. The
exchange should be the rate at the time of payment
(b) Yes, if the payment is valid. Since the bank considered the cashiers
check as being stale for not having been encashed on time, then
the cashiers check may be issued again. At any rate, non-
payment of the amount to Gustavo would constitute unjust
enrichment
(c) Yes, Felipe can compel Gustavo to pay $100. Under RA 529, as
amended by RA 4100, Payment can only be in Philippine currency
as it would be against public policy, null and void and of no effect.
However, under RA 8183, payment may be made in the currency
agreed upon, and the rate of exchange to be followed is at the time
of payment.
MIGUELS ANSWER: (a) Gustavo cannot use the defense that the check was
not legal tender because he has already accepted it. Gustavos acceptance of
37
the check was tantamount to a valid payment thereby extinguishing the
obligation. While a check is not legal tender, Gustavo is bound by estoppel
from questioning it as he accepted it despite knowing such.
(b) Yes, Felipe can refuse to pay Gustavo again. The acceptance of the
payment of Felipe by Gustavo effectively extinguished his obligation to him.
Gustavo was negligent in not encashing the check immediately and
Felipe should not be faulted for that.
(c) Yes if it was the currency agreed upon by the parties, otherwise, Felipe
should pay in Philippine peso which is the legal tender in the Philippines.
Bar Question (2008)
AB Corp. entered into a contract with XY Corp. whereby the former agreed to
construct the research and laboratory facilities of the latter. Under the terms
of the contract, AB Corp. agreed to complete the facility in 18 months, at the
total contract price of P10 million. XY Corp. paid 50% of the total contract
price, the balance to be paid upon completion of the work. The work stated
immediately, but AB Corp. later experienced work slippage because of labor
unrest in his company. AB Corp.'s employees claimed that they are not being
paid on time; hence, the work slowdown. As of the 17th month, work was
only 45% completed. AB Corp. asked for extension of time, claiming that its
labor problems is a case of fortuitous event, but this was denied by XY Corp.
When it became certain that the contruction could not be finished on
time, XY Corp. sent written notice cancelling the contract, and
requiring AB Corp. to immediately vacate the premises.
(a) Can the labor unrest be considered a fortuitous event?
(b) Can XY Corp. unilaterally and immediately cancel the
contract?
(c) Must AB Corp. return the 50% downpayment?
SUGGESTED ANSWER: (a) Labor unrest is not a fortuitous event that will
excuse AB Corp. from complying with its obligation of constructing the
research and laboratory facilities of XY Corp. the labor unrest, which
may even be attributed in large part to AB Corp. itself, is not the
direct cause of non-compliance by AB Corp. It is independent of its
obligation. It is similar to the failure of a DBP borrower to pay her loan just
because her plantation suffered losses due to the cadang-cadang disease.
It does not excuse compliance with the obligation.
(b) Yes, XY Corp. may unilaterally cancel the obligation but this is subject to
the risk that the cancellation of the reciprocal obligation being challenged in
court and if AB Corp. succeeds, then XY Corp. will be declared in default and
be liable for damages
38
(c) No, under the principle of quantum meruit, AC Corp. has the right to
retain payment corresponding to his percentage of accomplishment less
the amount of damages suffered by XY Corp. because of the delay or
default.
39
Bar Question (2011)
An agent, authorized by a special power of attorney to sell a land belonging
to the principal succeeded in selling the same to a buyer according to the
instructions given the agent. The agent executed the deed of absolute sale
on behalf of his principal two days after the principal died, an event that
neither the agent nor the buyer knew at the time of the sale. What is the
standing of the sale?
A. Voidable.
B. Valid.
C. Void.
D. Unenforceable.
SUGGESTED ANSWER: B. Valid
41
SUGGESTED ANSWER: A. No, since consignation without tender of
payment is allowed in the face of the conflicting claims on the
plaintiff.
42
D. Cannot be judicially enforced but authorizes the obligee to retain
the obligors payment or performance.
SUGGESTED ANSWER: D. Cannot be judicially enforced but authorizes
the obligee to retain the obligors payment or performance.
43
Bar Question (2012)
Delay
A debtor is liable for damages in case of delay if he is guilty of any of
the following except:
A. Default (mora)
B. Mistake
C. Negligence
D. Breach through contravention of the tenor thereof
SUGGESTED ANSWER: B. Mistake
Bar Question (2012)
Delay
This term refers to delay on the part of both the debtor and creditor
in reciprocal obligations
A. Mora accipendi
B. Mora solvendi
C. Compensation morae
D. Solution indebiti
SUGGESTED ANSWER: C. Compensation morae
44
A debtor may still be held liable for loss or damages even if it was
caused by a fortuitous event in any of the following instances,
except:
A. The debtor is guilty of dolo, malice or bad faith, has promised
the same thing to tow or more persons who do not have the
same interest
B. The debtor contributed to the loss
C. The thing to be delivered is generic
D. The creditor is guilty of fraud, negligence or delay or if he
contravened the tenor of the obligation
SUGGESTED ANSWER: C. The thing to be delivered is generic
45
D. Yes, because Fermin and Toto should also pay their share of
the obligation
SUGGESTED ANSWER: B. No, because the creditor may proceed
against anyone of the solidary debtors or some or all of them
simultaneously
46
Dina bought a car from Jai and delivered a check in payment of the
same. Has Dina paid the obligation? Why?
A. No, not yet. The delivery of the promissory notes payable to
order or bills of exchange or other mercantile documents shall
produce the effect of payment only when they have been
cashed, or when through the fault of the creditor they have
been impaired.
B. Yes, because a check is a valid legal tender of payment.
C. It depends. If the check is a managers check or cashiers check
it will produce the effect of payment. If its an ordinary check,
no payment.
D. Yes, because a check is as good as cash.
SUGGESTED ANSWER: A. No, not yet. The delivery of the promissory
notes payable to order or bills of exchange or other mercantile
documents shall produce the effect of payment only when they have
been cashed, or when through the fault of the creditor they have
been impaired.
47
SUGGESTED ANSWER: D. All contracts are required to have a valid
consideration
48
Bar Question (2012)
Contracts
It is a rule which holds that the freedom of parties to contract
includes the freedom to stipulate, provided the stipulations are not
contrary to law, morals, good customs, public order or public policy.
A. Obligatory force of contracts
B. Mutuality of contracts
C. Autonomy of contracts
D. Relativity of contracts
SUGGESTED ANSWER: C. Autonomy of contracts
49
Contracts
The following are rescissible contracts, except:
A. Entered into by guardian whenever ward suffers damage more
that of value of property
B. Agreed upon in representation of absentees, if absentee suffers
lesion by more than value of property
C. Contracts where fraud is committed on creditor (accion
pauliana)
D. Contracts entered into by minors.
SUGGESTED ANSWER: D. Contracts entered into by minors
50
The following are void contracts except:
A. Pactum commisorium
B. Pactum de non alienando
C. Pactum leonine
D. Pacto de retro
SUGGESTED ANSWER: D. Pacto de retro
51
SUGGESTED ANSWER: D. Unenforceable
52
Michael Fermin, without the authority of Pascual Lacas owner of a
car, sold the same car in the name of Mr. Lacas to Atty. Buko. The
contract between Atty. Buko and Mr. Lacas is
A. Void because of the absence of consent from the owner, Mr.
Lacas
B. Valid because all the essential requisites of a contract are
present
C. Unenforceable because Michael Fermin had no authority but he
sold the car in the name of Mr. Lacas, the owner
D. Rescissible because the contract cause lesion to Atty. Buko
SUGGESTED ANSWER: C. Unenforceable because Michael Fermin had
no authority but he sold the car in the name of Mr. Lacas, the owner
53
C. The contract between the parties is rescissible
D. The contract between the parties is subject to ratification by
the parties
SUGGESTED ANSWER: D. The contract between the parties is subject
to ratification by the parties
54
SUGGESTED ANSWER: (a) From the point of view of validity and
enforceability there would be legal significance if the mortgage was
in a public or private instrument. As for the loan, there is no legal
significance except if interest were charged on the loan, in which
case the charging of interest must be in writing.
A contract of loan is a real contract and is perfected upon the
delivery of the object of the obligation (Art. 1934, Civil Code). Thus,
a contract of loan is valid and enforceable even if it is nether in a
private nor in a public document.
As a rule contracts shall be obligatory in whatever form they may
have been entered into provided all the essential requisites for their
validity are present. With regard to its enforceability, a contract of
loan is not among those enumerated under Article 1403(2) of the
Civil Code, which are covered by the Statute of Frauds.
It is important to note that under Article 1358 of the Civil Code, all
other contracts where the amount involved exceeds five hundred
pesos must appear in writing, even a private one. However, the
requirement is not for the validity of the contract, but only for its
greater efficacy.
With regard the chattel mortgage, Act No. 1508, the Chattel
Mortgage Law, requires an affidavit of good faith stating that the
chattel mortgage is supposed to stand as security for the loan; thus
for validity of the chattel mortgage it must be in a public document
and recorded in the Chattel Mortgage Register in the Registry of
Deeds. A real estate mortgage under the provisions of Article 2125
of the Civil Code requires that in order that a mortgage may be
validly constituted the document in which it appears must be
recorded. If the instrument is not recorded, the mortgage is
nevertheless valid and binding between the parties. Hence for
validity of both chattel and real estate mortgages, they must appear
in a public instrument. But for purposes of enforceability, it is
submitted that the form of the contract, whether in a public of
private document, would be immaterial.
Also, under Article 1358, acts and contracts which have for their
object the creation or transmission of real rights over immovable
property must be in a public document for greater efficacy and a real
estate mortgage is a real right over immovable property.
(b) Ferdies refusal is justified. A check, whether a managers check
or ordinary check, is not legal tender, and an offer of a check in
payment of a debt is not a valid tender of payment and may be
refused receipt by the oblige or creditors. Mere delivery of checks
55
does not discharge the obligation under a judgement. A check shall
produce the effect of payment only when they have been cashed or
when through the fault of the creditor, they have been impaired (Art.
1249, Civil Code).
However, it is not necessary that the right of redemption be
exercised by delivery of legal tender. A check may be used for the
exercise of right of redemption, the same being a right and not an
obligation. The tender of a check is sufficient to compel redemption
but is not in itself a payment tht relives the redeemer from his
liability to pay the redemption price.
Redemption within the period allowed by law is not a matter of
intent but a question of payment or valid tender of full redemption
price within the said period. Whether the redemption is being made
under Act 3135 or under the general banking law, the mortgagor or
his assignee is required to tender payment to make said redemption
valid.
Moreover, Ferdies refusal was justified on the ground that the
amount tendered does not include interest. In order to effect the
redemption of the foreclosed property, the payment to the purchaser
must include the following sums: (a) the bid price; (b) the interest
on the bid price, computed at one per centum per month; and (c) the
assessments or taxes, if any, paid by the purchaser with the same
rate of interest.
MIGUELS ANSWER: (a) There would only be legal significance if the
mortgage was in a public or private instrument, it does not matter
for the loan. A contract of loan is valid regardless if it be in a private
or public document. For the mortgage on the other hand, its validity
would be dependent upon it being in a public document.
(b) Ferdies refusal is justified. A check is not considered as legal
tender. The creditor may validly refuse to accept the debtors offer of
payment if it is payment through a check.
56
A. Yes, remission of Ds share carries with it total extinguishment
of his obligation to the benefit of the solidary debtors
B. Yes, the Civil Code recognizes remission as a mode of
extinguishing an obligation. This clearly applies to D
C. No, the rule is that gratuitous acts should be restrictively
construed, allowing only the least transmission of rights.
D. No, as the release of the share of one debtor would then
increase the burden of other debtors without their consent.
SUGGESTED ANSWER: D. When one of the solidary debtors cannot,
because of his insolvency, reimburse his share to the debtor paying
the obligation, such share shall be borne by all his co-debtors, in
proportion to the debt of each. Additionally, D was released only
from his share of P10,000, not from the solidary tie that binds him to
A, B and C.
57
upon, Gary could not insist that Homer accept the tobacco
leaves.
D. No, Homer was not justified in refusing to accept the tobacco
leaves. There was no terms in the contract but a mixed
condition. The fulfillment of the condition did not depend purely
on Garys will but on other factors, e.g. the shipping company
and the government. Homer should comply with his obligation
SUGGESTED ANSWER: B. It is clear under the facts that the period
of delivery of the tobacco leaves was not guaranteed. Gary
anticipated other factors which may prevent him from making the
delivery within a month. True enough transportation problems
and government redtape did. Such slight delay was, thus
excusable. Obligations arising from contract have the force of law
between the contracting parties and should be complied with in
good faith.
Can Gary compel Isaac to pay his loan even before the end of the
two-year period?
A. Yes, Gary can compel Isaac to immediately pay the loan. Non-
compliance with the promised guaranty or security renders the
obligation immediately demandable. Isaac lost his right to
make use fo the period.
B. Yes, Gary can compel Isaac to immediately pay the loan. The
delivery of the Toyota Innova is a condition for the loan.
Isaacs failure to deliver the car violated the condition upon
which the loan was granted. It is but fair for Gary to demand
immediate payment.
C. No, Gary cannot compel Isaac to immediately pay the loan. The
delivery of the car as security for the loan is an accessory
contract; the principal contract is still the P1,000,000 loan.
Thus, Isaac can still make use of the period.
D. No, Gary cannot compel Isaac to immediately pay the loan.
Equity dictates that Gary should have granted a reasonable
extension of time for Isaac to deliver his Toyota Innova. It
would be unfair and burdensome for Isaac to pay the
P1,000,000 simply because the promised security was not
delivered.
SUGGESTED ANSWER: A. Non-compliance with the promised
guaranty or security renders the obligation immediately
demandable. Isaac lost his right to make use of the period. Under
Article 1198(2) of the Civil Code, the debtor shall lose every right
to make use of the period when he does not furnish to the creditor
the guaranties and securities which he has promised.
58
Bar Question (2014)
Consignation
Dorotea leased portions of her 2,000 sq.m lot to Monet, Kathy, Celai
and Ruth for five (5) years. Two (2) years before the expiration of
the lease contract, Dorotea sold the property to PM Realty and
Development Corporation. The following month, Dorotea and PM
Realty stopped accepting rental payments from all the lessees
because they wanted to terminate the lease contracts. Due to the
refusal of Dorotea to accept rental payments, the lessees, Ruth et
al., filed a complaint for consignation of the rentals before the
Regional Trial Court (RTC) of Manila without notifying Dorotea. Is
the consignation valid?
SUGGESTED ANSWER: The consignation is not valid. Article 1257 of
the Civil Code provides that in order that the consignation of the
thing due may release the obligor, it must first be announced to the
persons interested in the fulfillment of the obligation. Moreover,
Article 1258 of the same code provides that consignation having
been made, the interested parties shall also be notified thereof. In
this case Dorotea, an interested party was not notified of the
consignation. The consignation is therefore not valid for non-
compliance with Article 1257.
MIGUELS ANSWER: Consignation is not valid. For consignation to be
valid, there must be intitial and subsequent notification given to all
interested parties. In this case, Dorotea, an interested party was not
notified, thereby making the consignation invalid.
59
Amoroso on its behalf. Was the obligation of J.C. Construction to MSI
extinguished by novation? Why?
SUGGESTED ANSWER: No, the obligation of J.C. Construction to MSI
was not extinguished by novation. Under Article 1292 of the Civil
Code, in order that an obligation may be extinguished by another
which substitute the same, it is imperative that it be so declared in
unequivocal terms, or that the old and the new obligation be on
every point incompatible with each other. Novation by substitution
of debtor requires the consent of the creditor as provided in Article
1923 of the Civil Code. This requirement is not present as in this
case. In Magdalena Estates Inc. v Rodriguez it was ruled that the
mere fact that the creditor received payment from a third person
does not constitute novation and does not extinguish the obligation
of the original debtor. Since there was no novation, the obligation of
the original debtor is not extinguished. Thus the obligation of J.C.
Construction to MSI subsists.
MIGUELS ANSWER: The obligation of JC Construction to MSI was not
extinguished. For there to be novation by substitution of the debtor,
the consent of the creditor must be taken. The mere fact that MSI
received payment from Amoroso does not necessarily imply that
there was substitution.
60
make the dresses for Karla, which including the cost of the
materials.
MIGUELS ANSWER: No, I do not agree. Article 1167 of the Civil Code
provides that if a person obliged to do something fails to do it, the
same shall be executed at his cost. In this case, X failed to do his
obligation of making the dresses of Karla, therefore the obligation
must be executed at his cost. Furthermore, X cannot use the
defense of fortuitous event as X is already in delay, according to
Article 1165 of the Civil Code, if the obligor delays, he shall be
responsible for fortuitous event until he has effected delivery.
61
Jackie cannot recover the property anymore because the action has
already prescribed. Jackie has 4 years upon reaching the age of
majority to bring an action to annul the contract. More than 4 years
had already passed, action has therefore prescribed.
62
requires solidarity (Art. 1207, Civil Code). In this case, there is no
indication that they bound themselves solidarity to pay Cita, nor
does the law or nature of the obligation require solidarity. Hence,
Juancho, Don and Pedros obligation is joint, and Cita can only
demand payment of 1/3 of the obligation from Pedro, which is
presumed to be his share in the obligation in the absence of
stipulation to the contrary (Art. 1208, Civil Code).
MIGUELS ANSWER: No, Cita may not demand payment of the entire
amount from just one of the debtors. Solidary liability is never
presumed. For the obligation to be considered solidary it must be
expressly specified in the agreement. There being no specification as
to the nature of the liability of the debtors, it is presumed that there
be joint liability. Cita can therefore only demand an amount that is in
proportion to the debt of each of the co-debtor.
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for there to be delay, there must be demand. In this case, there was
no demand made by Julia against Sara, therefore Sara was not in
delay and is not required to pay for the interest. The interest must
be returned to Sara.
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favor of Hagibis Corporation and such was credited as payment for
the loan that he owes the corporation. It is presumed that the loan is
equivalent to the SUVs as Hagibis and Butch had agreed to this
arrangement already.
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stated that failure on the part of Paul to contest the rescission within thirty
(30) days from receipt of said letter shall mean that the latter agreed to the
rescission.
Paul did not reply to this letter for five (5) years. Thus, Peter decided to sell
his lot to Henry in 2021. After hearing that Henry bought the lot, Paul now
questions the sale of the lot to Henry and files a complaint for nullification of
the sale.
[a] Is the exercise by Peter of his power to rescind extra-judicially the
Contract to Sell the proper and legal way of rescinding said contract?
Explain.
[b] In case Paul made a downpayment pursuant to a stipulation in the
Contract to Sell, what is the legal remedy of Peter?
SUGGESTED ANSWER: NO SUGGESTED ANSWER FROM REPUTABLE
SOURCE AVAILABLE YET
MIGUELS ANSWER:
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