CORDILLERA CAREER DEVELOPMENT COLLEGE

College of Law
Buyagan, Poblacion, La Trinidad, Benguet

SYLLABUS/OUTLINE
IN CIVIL LAW REVIEW 2

COURSE DESCRIPTION: In this subject, the student is expected to understand the basic principles
applicable to obligations and its different sources, identify the rights and obligations of parties to these
obligations, appreciate and apply the fundamental principles to actual business transactions, and to
encourage diligence and the observance of honesty and fair dealings at all times.

REFERENCES:

1. Senator Arturo Tolentino, Commentaries & Jurisprudence on the Civil Code of the
Philippines;
2. Prof. Elmer T. Rabuya, Civil Law Reviewer, Volume II
3. Desiderio P. Jurado, Civil Law Reviewer

Title I. OBLIGATIONS
Chapter 1. General Provisions
I. Concept
A. Definition- Art. 1156
- criticism of definition
B. Elements
1. Active Subject
2. Passive Subject
3. Prestation or Object
4. Efficient cause or juridical tie or vinculum juris
C. Distinction Between Natural and Civil Obligations
1. As to enforceability
2. As to basis
II. Sources of Obligations- Art. 1157
A. Law- Art. 1158
Case
OSG v. Ayala Land, G.R. No.177056, September 18, 2009
B. Contracts- Art. 1159, 1305
Case
PADCOM v. Ortigas, G.R No. 146807, May 9, 2002
Metropolitan Bank v. Ana Grace Rosales, GR No. 183204, January 13, 2014
C. Quasi-Contracts- Art.1160, 2142
1. Kinds
a. Negotiorum gestio- Art.2144
b. Solutio indebiti- Art. 2154
Case
Metrobank v. Absolute Management Corp, G.R. No. 170498,
January 09, 2013
Locsin II v. Mekeni Food Corporation, GR No. 192105,
December 9, 2013
Gonzalo v. Tarnate, GR No. 160600, January 15, 2014
Venzon v. Rural Bank of Buenavista, GR No. 178031, August
28, 2013
BPI v. Mendoza, GR No. 198799
c. Other quasi-contracts- Arts. 2164 to 2175
D. Acts or omissions punished by law- Art. 1161
E. Quasi-Delicts- Art.1162, 2176
1. Distinction between quasi-delicts and crimes
2. Liability for fault of others- Art. 2180; Art. 218, 219 of FC
3. Civil liability arising from crime- Art. 1161; Rules on Criminal Procedure
(2000), Rule 111
Cases
Barredo v. Garcia, 73 Phil. 607 (1942)
Mendoza v. Arrieta, 91 SCRA 113 (1975)
PSBA v. CA, 205 SCRA 729 (1992)
Amadora v. CA 160 SCRA 315 (1988)
 2

BI. Classification of Obligations

A. Primary Classification Under the Civil Code
1. Pure and Conditional (Arts. 1179-1192)
2. With a period or term (Arts. 1193-1198)
3. Alternative and Facultative (Arts. 1199-1206)
4. Joint and Solidary (Arts. 1207-1222)
5. Divisible and Indivisible (Arts. 1223-1225)
6. With a penal clause (Arts. 1226-1230)

B. Secondary Classification
1. Legal (Art. 1158); Conventional (Art. 1159); Penal (Art. 1161)
2. Real (to give) and Personal (to do or not to do)
3. Determinate and Generic (as to subject matter of obligation)
4. Positive (to give, to do) and Negative (not to give, not to do)
5. Unilateral and Bilateral
6. Individual and Collective
7. Accessory and Principal
8. As to object or prestation:
Simple
Multiple
Conjunctive
Distributive / Disjunctive
Alternative
Facultative
9. Possible and Impossible

Chapter 2. Nature and Effects of Obligations

I. Kinds of Prestation
A. Obligation to give
1. a specific thing
a. Duties of the obligor
i. To deliver thing itself- Art. 1244
ii. To preserve thing- Art. 1163
iii. To deliver the accessions and accessories-
Art. 1166 - distinction between accession and
accessory
iv. To deliver the fruits- Art.1164 par. 1
2. a generic thing- Art. 1246
B. Obligation to do- Art.1244
C. Obligation not to do- Art. 1244

AI. Breach of Obligation

A. Concept
1. Distinction between substantial and casual/slight breach
Cases:
Song Fo v. Hawaiian Phils. 47 Phil 821(1928)
Velarde, et al v. CA 361 SCRA 56 (2001)
B. Modes of Breach- Art.1170
1. Fraud (dolo)
a. Concept
i. dolo (1171) vs. dolo incidente
ii. dolo (1171) vs. dolo causante
Cases:
Woodhouse v. Halili, 93 Phil. 526 (1953)
Geraldez, vs. CA & Kenstar Travel Corporation,
G.R. No. 108253, February 23, 1994.
b. Nonwaiver- Art. 1171
c. Effects
2. Negligence- Art. 1172
a. Concept- Art. 1173
i. culpa v. dolo
ii.culpa aquiliana v. culpa contractual
Cases:
Gutierrez v. Gutierrez, 56 Phil. 177 (1932)
Vasquez v. Borja, 74 Phil. 560 (1944)
b. Standard of care required- Art. 1173 par. 2
 3

Cases:
De Guia v. Manila Electric Co, 40 Phil. 706( 1920)
US v. Barias, 23 Phil. 434 (1912)
Sarmiento v. Sps. Cabrido, 401 SCRA 122 (2003)
Crisostomo v. CA, 409 SCRA 528 (2003)
Philippine National Bank v. Santos, GR No. 208293,
December 10, 2014
BJDC Construction v. Lanuzo, GR No. 161151,
March 24, 2014
Bignay EX-IM Philippines, Inc., v. Union Bank of
the Philippines, GR No. 171590, February 12, 2014
DBP v. GA and Realty Development Corporation,
GR No. 160758, January 15, 2014
Eastern Shipping Lines, Inc. v. BPI/MS Insurance
Corp and Mitsui Sumito Insurance Co., Ltd., GR No.
193986, January 15, 2014
Solidum v. People of the Philippines, GR No. 192123,
March 10, 2014
Land Bank of the Philippines v. Kho, GR No.
205839, July 07, 2016
Ma. Lorena Flores & Alexander Cruz v. Narciso
Kho, GR No. 205840
Abrogar v. Cosmos Bottling, Co. and Intergames,
Inc., GR No. 164749, March 15, 2017
Dela Cruz v. Octaviano, GR. No. 219649, July 26, 2017
Visayan Electric Company, Inc. v. Alfeche and M,
Lhuillier Pawnshop and Jewelry, GR No. 209910,
November 29, 2017
Poole-Bluden v. Union Bank of the Philippines, GR
No. 205838, November 29, 2017
Citystate Savings Bank v. Tobias, GR No. 227990,
March 7, 2018

Medical Malpractice/Negligence:
Solidom v. People of the Philippines, GR No. 192123,
March 10, 2014
Rosit v. Davao Doctors Hospital, GR No. 210445,
December 7, 2015
Borromeo v. Family Care Hospital, Inc., GR No. 191018,
January 25, 2016
Our Lady of Lourdes Hospital v. Spouses Capanzana, GR
No. 189218, March 22, 2017
c. Effects
3. Delay (Mora)- Art. 1169
a. Concept
b. Kinds
i. mora solvendi
- requisites
- General Rule: Creditor should make demand
before debtor incurs delay- Art. 1169
Cases:
Cetus Development Corp. v. CA, SCRA 72 (1989)
Aerospace Chemical Industries vs. CA, GR No.
108129, September 23,1999, 315 SCRA
Santos Ventura Hocorma Foundation vs. Santos, GR
153064, November 4, 2004
 4

Vazquez v. Ayala Corporation, G.R. No. 149734,

November 19, 2004.
Swire Realty Development Corp. v. Specialty
Contracts General & Construction Services, Inc.,
GR No. 188027, August 9, 2017
Bonrostro v. Luna, GR No. 172346, July 24, 2013
DBP v. Guarina Agricultural and Realty Dev. Corp.,
GR No. 160758, January 15, 2014
Maybank Philippines, Inc. v. Tarrosa, GR No.
213014, October 14, 2015
Rivera v. Chua, GR No. 184458, January 14, 2015
Cabanting v. BPI Family Savings Bank, Inc., GR No.
201927, February 17, 2016
Federal Builders, Inc. v. Foundation Specialists, Inc.,
GR No. 194507, September 8, 2014
Erma Industries, Inc. v. Security Bank Corporation,
GR No. 191274, December 6, 2017
Ong v. BPI Family Savings Bank, Inc., GR No.
208638, January 24, 2018
- Exceptions:- Art. 1169
Cases
Abella v. Francisco, 55 Phil. 447 (1931)
iii. mora accipiendi
- requisites
- see also Art. 1268
Cases
Vda. De Villaruel v. Manila Motor Co., Inc.,
104 Phil. 926 (1958)
Tengco v. CA, G.R. No. 49852, October 18,
1989
iv. compensatio morae -
requisites
Case
Central Bank v. CA, 139 SCRA 46 (1985)
c. Effects
4. Contravention of the tenor
Cases
Chavez v. Gonzales, 32 SCRA 547 (1970)
Telefast v. Castro, 158 SCRA 445 (1988)
Arrieta v. NARIC, 10 SCRA 79 (1964)
Magat vs. Medialdea G.R. No. L-37120, April 20, 1983
BI. Remedies Of Creditor in Case of Breach
A. Action for performance
1. Action for specific performance in obligation to give a specific thing- Art.
1165 par.1; ROC Rule 39 Sec. 10
2. Action for substituted performance
in obligation to give a generic thing- Art.1165 par. 2
3. Action for substituted performance or undoing of poor work in obligation to
do - Art. 1167
Cases
Chavez v. Gonzales, supra
Tanguilig v. CA, 266 SCRA 78 (1997)
a. Exception
4. Action for undoing in obligation
not to do- Art. 1168 a.
Exception
B. Action for damages- Art.1170
C. Action for rescission- Art. 1191, 1192

IV. Subsidiary Remedies of Creditor

A. Accion Subrogatoria- Art.1177
1. Concept
2. Requisites
3. Exceptions- inherent rights of debtor; Art. 772
B. Accion Pauliana- Art. 1177, 1381 par. 3
1. Concept
a. Distinction between accion pauliana and accion subrogatoria
 5

2. Requisites
Case
Khe Hong Cheng v. CA, 355 SCRA 701 (2001)
Siguan v. Lim, G.R. No. 134685, November 19, 1999
C. Other Specific Remedies (Accion directa)- Art. 1652, 1729, 1608, 1893

V. Extinguishment of Liability in Case of Breach Due to Fortuitous Event- Art. 1174

A. Concept of Fortuitous Event
1. Act of God
2. Act of Man
B. Requisites
1. Effect of concurrent fault
Cases
Juan Nakpil & Sons v. CA, 144 SCRA 597 (1986) Republic v.
Luzon Stevedoring Co., 21 SCRA 279 (1967)
Dioquino v. Laureano, 33 SCRA 65 (1970)
Austria v. CA, 39 SCRA 527 (1971)
NPC v. CA, 161 SCRA 334 (1988)
Yobido v. CA, 281 SCRA 1 (1997)
Bacolod -Murcia Milling vs. CA, GR. No. 81100-01, Feb. 7, 1990
Philcomsat vs. Globe Telecom, GR No. 147324, May 25, 2004
Metro Concast Steel Corporation v. Allied Bank Corp., GR No.
177921, December 4, 2013
Bernales v. Northwest Airlines, GR No. 182395, October 5, 2015
C. Extinguishment of Liability; Exceptions- Art. 1174, 1165 par. 3, 552, 1942, 1979,
2001, 2147
VI. Usurious Transactions- Art. 1175, 1413, 1961
A. Act No. 2655; PD 858; PD 1685
B. Central Bank Circular No. 416
C. Central Bank Circular No. 905 (1982) lifting the interest rate ceiling- (vs. 2209)
D. Central Bank Circular No. 799, Series of 2013 (July 1 2013) – legal interest at 6%
Cases
Eastern Shipping Lines v. CA, 234 SCRA 781 (1994)
Crismina Garments v. CA, 304 SCRA 356 (1999) Keng
Hua Products v. CA, 286 SCRA 257 (1998) Security Bank
v. RTC Makati, 263 SCRA 453(1996)
Almeda v. CA, 256 SCRA 292 (1996)
First Metro Investment vs. Este. Del Sol (Nov. 15, 2001, 369 SCRA)
Nacar v. Gallery Frames, G.R. No. 189871, August 13, 2013 – Applied the
NEW LEGAL RATE – 6% per annum
Mallari v. Prudential Bank, GR No. 197861, June 5, 2013
Anchor Savings Bank v. Pinzman Realty and Development Corp., GR No.
192304, August 13, 2014
Rey v. Anson, GR No. 211206, November 7, 2018

VII. Fulfillment of Obligations

A. see Chapter 4: Payment
B. Presumptions in payment of interests and installments- Art. 1176
VIII. Transmissibility of Rights- Art. 1178
Case
Stronghold Insurance Co., v. Republic-Asahi G.R. No. 147561, June 22, 2006
Chapter 3. Different Kinds of Obligations
I. Pure and Conditional Obligations
A. Pure Obligations- Art. 1179 par. 1
Case
HSBC v. Spouses Broqueza, G.R. No. 178610, November 17, 2010
B. Conditional Obligations- Art. 1181
1. Condition
a. Concept
b. Condition v. Period/Term
Cases
Gaite v. Fonacier, 2 SCRA 830 (1961)
Gonzales v. Heirs of Thomas, 314 SCRA 585 (1999)
Marquez v. Elisan Credit Corporation, GR No. 194642, April 6,
2015
2. Kinds of Conditions
a. As to effect on obligation- Art. 1181
 6

i. Suspensive (condition precedent)

- retroactive effect when condition is fulfilled Art. 1187
▪ Cases
Coronel v. CA, G.R. No. 103577, October 7, 1996
- rights of creditor and debtor before fulfillment of condition- Art. 1188
ii. Resolutory (condition subsequent)
Cases
Parks v. Province of Tarlac, 49 Phil. 142 (1927)
Central Philippine University v. CA, 246 SCRA 511
(1995)
Quijada v. CA, G.R. No. 126444, December 4, 1998.
b. As to cause or origin- Art. 1182
i. Potestative
- effect if fulfillment of condition depends solely on the will
of the debtor (Cf. term)
- debtor’s promise to pay when he can is not a conditional
obligation- Art. 1180
Case
Lim vs. CA, G.R. No. 87047, October 31, 1990.
ii.Casual
Case
Naga Telephone Co., Inc. v. CA, G.R. No. 107112,
February 24, 1994.
iii. Mixed
Cases
Osmeña v. Rama, 14 Phil. 99 (1909)
Hermosa v. Longora, 93 Phil. 971 (1953)
Taylor v. Uy Tieng Piao, 43 Phil. 873 (1922)
Smith Bell v. Sotelo Matti, 44 Phil. 875 (1922)
Rustan Pulp and Paper Mills v. IAC, 214 SCRA 665
(1992)
Romero vs. CA, G.R. No. 107207, November 23, 1995
c. As to possibility- Art. 1183
i. Possible
ii. Impossible
- effect
Case
Roman Catholic Archbishop of Manila v. CA, 198
SCRA 300 (1991)
Heirs of San Miguel v. CA, G.R. No. 136054,
September 05, 2001
d. As to mode
i. Positive- Art. 1184 ii.
Negative- Art. 1185
3. Rules in case of loss, deterioration or improvement pending the happening of
the condition- Art. 1189, 1190
a. Meaning of “loss” (Art. 1189[2]), “deterioration” and “improvement”
b. Effect of loss or deterioration
i. without debtor’s fault
ii. with debtor’s fault
c. Effect of improvement
i. by nature or time
ii. at the debtor’s expense
4. Effect of prevention of the fulfillment of the condition by the obligor- Art. 1186
Cases
Taylor v. Uy Tieng Piao, supra
Herrera v. Leviste, G.R. No. 55744, February 28, 1985.
Int’l Hotel Corp v. Joaquin, Jr., G.R. No. 158361, April 10, 2013
AI. Reciprocal Obligations- Art. 1191, 1192
1. Concept
2. Alternative remedies of injured party in case of breach
a. Action for Fulfillment
i. when fulfillment no longer possible; effect
b. Action for Rescission
i. requisites
ii.how made iii. effects
 7

Cases
Song Fo v. Hawaiian-Philippines, 47 Phil. 821 (1925)
Boysaw v. Interphil Promotions, 148 SCRA 365 (1987)
U.P. v. De Los Angeles, 35 SCRA 365 (1970)
De Erquiaga v. CA, 178 SCRA 1 (1989)
Angeles v. Calasanz, 135 SCRA 323 (1985)
Ong v. CA, 310 SCRA 1 (1999)
Iringan v. CA, 366 SCRA 41 (2001)
Visayan Saw Mill vs. CA and RJ Trading, GR. 83851,
March 3, 1993
Deiparine vs. CA and Trinidad, GR. 96643, April 23, 1993
Fil-Estate Propertie, Inc. v. Spouses Ronquillo, GR No.
185798, January 13, 2014
Golden Valley Exploration, Inc. v. Pinkian Mining Co and
Copper Valley, Inc., GR No. 190080, June 11, 2014
Sangguniang Panlungsod ng Baguio City v. Jadewell Parking
Systems Corporation, GR No. 160025, April 23, 2014
Metropolitan Bank and Trust Company v. Chiok, GR No
172652, November 26, 2014
Wellex Group v. U-Land Airlines, GR No. 167519, January
14, 2015
Swire Realty Development Corporation v. Yu, March 9, 2015
See also Art. 1786, 1788; Arts. 1484-86; RA 6552
AI. Obligation With a Period- Art.1193, 1180
A. Period or Term
1. Concept
Case
Solante v. COA, G.R. No. 207348, August 19, 2014
2. Period/Term vs. Condition
B. Kinds of Period/Term
1. As to effect
a. Suspensive (Ex die)- Art. 1193 par. 1
b. Resolutory (In diem)- Art. 1193 par. 2
2. As to expression
a. Express
b. Implied
3. As to definiteness
a. Definite
b. Indefinite
4. As to source
a. Voluntary
b. Legal
c. Judicial
C. Rules in case of loss, deterioration or improvement before arrival of period-Art. 1194, 1189
D. Effect of payment in advance- Art. 1195 Note: Art.1197 par. 3
E. Benefit of Period
1. For whose benefit
a. creditor
b. debtor
c. both
2. Effects
3. Presumption- Art. 1196
Cases
Lachica v. Araneta, 47 OG No. 11, 5699, August 4, 1949
Ponce de Leon v. Syjuco, 90 Phil. 311 (1951)
Buce v. CA, 332 SCRA 151 (2000)
4. When debtor loses right to make use of period- Art.1198
F. When Court May Fix Period- Art. 1197
1. Period is implied
2. Period depends solely on will of debtor (Cf. condition)
Cases
Araneta v. Philippine Sugar Estate Development Co., 20 SCRA 330
(1967)
Central Philippine University v. CA, supra
 8

BI. Alternative Obligations

A. Concept- Art.1199
Case
Arco Pulp and Paper Co, v. Lim, G.R. No. 206806, June 25, 2014
B. Right of choice- Art. 1200
C. Effect of notice of choice
D. When notice produces effect- Art. 1201
E. Effect of loss or impossibility of one or all prestations- Art. 1202 to 1205
Facultative Obligation- Art. 1206
1. Concept
2. Distinguished from Alternative Obligation
3. Effect of Substitution

IV. Joint and Solidary Obligations

A. Joint Obligations
1. Concept
a. Requisites
b. Words used to indicate joint obligations
2. Presumption- Art. 1207, 1208
3. Effects- Art. 1207, 1208
c. Extent of liability of debtor
d. Extent of right of creditor
e. In case of novation, compensation, confusion (Art. 1277),
remission

B. Solidary Obligations
1. Concept
a. Requisites
b. Words used to indicate solidary obligations
2. Kinds
a. As to source- Art. 1208
i. Legal- Art. 1915, 1945, 2194; Art. 119 of RPC
ii. Conventional
iii. Real
b. As to parties bound
i. Active
ii. Passive
iii. Mixed
c. As to uniformity
i. Uniform
ii. Varied/Non-uniform- Art. 1211
- effects
Cases
Inchausti v. Yulo, 34 Phil. 978 (1916)
Lafarge Cement Phil vs. Continental Cement, GR No. 155173, November 23, 2004
Spouses Berot v. Siapno, July 9, 2014
UCPB v. Uy, GR No. 204039, January 10, 2018

3. Effects
a. Solidary creditor in relation to:
i. common debtor
- right to demand- Art. 1215, 1214, 1216, 1217 par. 1
- in case of novation, compensation, confusion, remission by a creditor-
Art. 1215 par. 1
ii. solidary co-creditor/s
- in case of novation, compensation, confusion, remission- Art. 1215 par. 2
- prejudicial acts prohibited- Art. 1212
- assignment of rights not allowed- Art. 1213
b. Solidary debtor in relation to:
i. common creditor
- obligation to perform- Art. 1207
- in case of novation, compensation, confusion, remission by a creditor-
Art. 1215 par. 1
ii. solidary co-debtor
- in case of payment by a co-debtor- Art. 1217, 1218, 1220, 1219
- in case of fortuitous event- Art. 1221
 9

Cases
Jaucian v. Querol, 38 Phil. 718 (1918)
RFC v. CA, O.G. No. 6, p. 2467
Quiombing v. CA, 189 SCRA 325 (1990)
Inciong v. CA, 257 SCRA 578 (1996)
Vigilla v. Phil. College of Criminology, Inc., G.R.
No. 200094, June 10, 2013
Cruz v. Sps. Basister, G.R. No. 196576, January 30, 2012
Diamond Builders v. Country Bankers, G.R. No. 171820,
December 13, 2007
Olongapo City v. Subic Water and Sewerage Co., Inc.
Estanislao and Africa Sinamban v. China Banking
Corporation, GR No. 193890, March 11, 2015
Reyes v. Bancom Delopment Corporation, GR No.
190286, January 11, 2018

4. Defenses available to a solidary debtor against the creditor- Art. 1222

a. Types
i. those derived from the nature of the obligation
ii. personal defenses
iii. defenses pertaining to his share
iv. those personally belonging to the other co-debtors
b. Effects
Cases
Inchausti v. Yulo, supra
Alipio v. CA, 341 SCRA 441 (2000)

C. Joint Indivisible Obligations

1. Concept
i. Distinguished from Joint Obligations
ai. Distinguished from Solidary Obligations
2. Indivisibility distinguished from solidarity- Art. 1210
3. Effects- Art. 1209
a. Liability for damages in case of breach- Art. 1224

V. Divisible and Indivisible Obligations

A. Divisible Obligations
1. Concept
2. Effects- Art. 1223, 1233 30.
B. Indivisible Obligations
1. Concept
a. Distinguished from solidary obligations
Case
Capalla v. COMELEC G.R. 201112, October 23, 2012
2. Kinds
a. Natural- Art. 1225 par. 1
b. Legal- Art. 1225 par. 3
c. Conventional- Art. 1225 par. 3
3. Presumptions
a. Of indivisibility- Art. 1225 par. 1
b. Of divisibility- Art. 1225 par. 2
4. Divisibility and indivisibility in obligations not to do- Art. 1225 par. 3
5. Effects- Art. 1223, 1233, 1224
- see Joint Indivisible Obligations
6. Cessation of indivisibility

VI. Obligations with a Penal Clause

A. Concept
1. Principal vs. Accessory Obligation
2. Distinguished from Conditional Obligations
3. Distinguished from Alternative Obligations
4. Distinguished from Facultative Obligations
5. Distinguished from Guaranty

B. Kinds of Penal Clause

1. As to effect
a. Subsidiary
 10

b. Complementary
2. As to source
a. Conventional
b. Legal
3. As to purpose
a. Punitive
b. Reparatory
c.
C. Demandability of Penalty- Art. 1226 par. 2
D. Effects of Penal Clause
1. Substitute for indemnity for damages and payment of interest- Art. 1226
a. Exception- Art. 1226
Cases
Makati Dev’t Corp. v. Empire Insurance Co., 20 SCRA 557 (1967)
Antonio Tan v. CA, 367 SCRA 571 (2001)
Country Bankers Insurance vs. CA, GR. 85161, Sept 9, 1991
J Plus Development Asia v. Utility Assurance, GR No. 199650, January
26, 2013
Nacar v. Gallery Frames, GR No. 189871, August 13, 2013
Venzon v. Rural Bank of Buenavista, GR No. 178031, August 28, 2013
SC Megaworld Construction v. Parada, GR No. 183804, September 11,
2013
Secretary of DPWH v Tecson, GR No. 179334, April 21, 2015
2. Not exempt debtor from performance- Art. 1227
a. Exception- Art. 1227
3. Creditor cannot demand both performance and penalty at the same time-Art. 1227
a. Exceptions- Art. 1227
4. Creditor cannot collect other damages in addition to penalty- Art. 1226
a. Exceptions- Art. 1226

E. When penalty shall be equitably reduced- Art. 1229

F. Nullity of Principal Obligation or Penal Clause
1. Effects- Art. 1230
2. Rationale

Chapter 4. Extinguishment of Obligations

I. Modes of Extinguishment- Art. 1231

A. Payment or Performance
B. Loss or Impossibility
C. Condonation or Remission
D. Confusion or Merger
E. Compensation
F. Novation
G. Other Causes

II. Payment or Performance

A. Concept- Art. 1232
B. Requisites
1. Who can pay
a. in general
b. third person who is an interested party
i. meaning of “interested party”
ii. effects- Art. 1302[3]
c. third person who is not an interested party but with consent of debtor
i. effects- Art. 1302[2], 1236 par. 1
d. third person who is not an interested party and without knowledge or
against the will of the debtor
i. effects- Art. 1236 par. 2, 1237, 1236 par.1
e. third person who does not intend to be reimbursed- Art. 1238
i. in obligation to give- Art. 1239, 1427
f. effect of incapacity
g. in case of active solidarity- Art. 1214 65.
2. To whom payment may be made
a. in general- Art. 1240
b. incapacitated person- Art. 1241 par. 1
 11

i. requisites
c. third person- Art. 1241 par. 2
i. requisites
ii. when proof of benefit not required- Art.
1241 par. 3, 1242
d. in case of active solidarity- Art. 1214 69.
3. What is to be paid (“Identity”)
a. in general
b. in obligations to:
i. give a specific thing- Art. 1244
ii. give a generic thing- Art. 1246
iii.. pay money- Art. 1249, 1250; R.A. 529, R.A. 4100
Cases
Arrieta v. NARIC, supra
Kalalo v. Luz, 34 SCRA 377 (1970)
St. Paul Fire and Marine Insurance v. Macondray,
70 SCRA 122 (1976)
Papa v. Valencia, 284 SCRA 643 (1998)
PAL vs. CA 181 SCRA 557 (1990)
International Hotel Corporation v. Joaquin, GR No.
158361, April 10, 2013
National Power Corporation v. Ibrahim, GR No. 175863,
February 18, 2015
Netlink Computer Inc. v. Delmo, GR No. 160827, June
18, 2014
Philippine Commercial International Bank v. Franco,
GR No. 180069, March 5, 2014
Bognot v. RR Lending Corporation, 180144, September
24, 2014
Evangelista v. Screenex, Inc., GR No. 211564, November
20, 2017

c. payment of interest- Art. 1956

How is payment to be made (“Integrity”)
a. in general- Art. 1233
General Rule: Partial payment is not allowed- Art. 1248
Exceptions:- Art. 1248
a. substantial performance in good faith- Art. 1234.
b. estoppel- Art. 1235
c. presumptions in payment of interests and
installments- Art. 1176
Cases:
Bonrostro v. Luna, GR No. 172346, July 24, 2013
Lim v. Development Bank of the Philippines,
GR No. 177050, July 1, 2013
International Hotel Corporation v. Joaquin,
GR No. 158361, April 10, 2013
The Wellex Group, Inc. v. U-Land Airlines, Co.
Ltd., GR No. 167519, January 14, 2015
Hilltop Market Fish Vendors Assoc. v.
Yaranon, GR No. 188057, July 12, 2017
4. When payment is to be made
a in general- Art. 1169
b see Chapter 2: Delay
5. Where payment is to made- Art. 1251 par. 1
a. if no place is expressly designated- Art. 1251 par. 2 to par. 4
6. Expenses of making payment- Art. 1247

C. Application of Payments
1. Concept- Art. 1252
Cases
Reparations Commission v. Universal Deep Sea Fishing,
83 SCRA 764 (1978)
Paculdo v. Regalado, 345 SCRA 134 (2000)
2. Requisites
3. Rules in application of payments- Art. 1252, 1253
a. if rules inapplicable and application cannot be inferred- Art. 1254
 12

i. meaning of “most onerous to debtor”.

D. Payment by Cession
1. Concept- Art. 1255
Case
DBP v. CA, G.R. No. 118342, January 5, 1998
2. Requisites
3. Effects

E. Dation in Payment
1. Concept- Art. 1245
a. distinguished from Payment by Cession
Case
Development Bank of the Philippines vs. Court of Appeals, G.R. No.
118342, January 5, 1998.

2. Requisites
3. Effects
Case
Filinvest Credit Corporation vs. Philippine Acetylene,
GR L-50449, Jan 1982
Desiderio Dalisay Investments v, SSS, GR No. 231053, April 4, 2018
Villarica Pawnshop v. Social Security Commission, GR No. 228087,
January 24, 2018

F. Tender of Payment and Consignation

1. Tender of Payment
a. Concept
b. Requisites
2. Consignation
a. Concept
i. purpose
b. Requisites
i. when tender and refusal not required- Art. 1256 par. 2
ii. two notice requirement- Art. 1257 par. 1, 1258 par. 2
-effects of noncompliance
c. Effects- Art. 1260 par. 1
d. Withdrawal by debtor before acceptance by creditor or
107. approval by court; effects- Art.1260 par. 2
e. Withdrawal by debtor after proper consignation- Art. 1261
i. with creditor’s approval; effects
ii. without creditor’s approval; effects
f. Expenses of consignation- Art.1259
Cases
De Guzman v. CA, 137 SCRA 730 (1985)
TLG International Continental Enterprising, Inc. v.
Flores, 47 SCRA 437 (1972)
McLaughlin v. CA, 144 SCRA 693 (1986)
Soco v. Militante, 123 SCRA 160 (1983)
Sotto v. Mijares, 28 SCRA 17 (1969)
Chan vs. CA (March 3, 1994, 230 SCRA)
Meat Packing Corp vs. Sandiganbayan (June 22, 2001)
Pabugais v. Sahijwani, G.R. No. 156846, February 23,
2004
Spouses Cinco v. CA, G.R. No. 103068, June 22, 2001
Spouses Cacayorin v. AFPMBA, Inc., GR No. 171298,
April 15, 2013
Spouses Bonsontro v. Spouses Luna, GR No. 172346, July
24, 2013
Del Carmen v. Spouses Sabordo, GR No. 181723, August
11, 2014
PNB v. Chan, GR No. 206037, March 13, 2017

BI. Loss or Impossibility

A. Loss of Thing Due
1. Concept- Art. 1189[2]
2. Kinds
 13

a. As to extent
i. Total ii.
Partial
3. Requisites- Art. 1262
4. Presumption- Art. 1265, 1165
a. when not applicable
5. Effects
a. in obligation to give a specific thing- Art. 1262, 1268
b. in obligation to give a generic thing- Art. 1263
c. in case of partial loss- Art. 1264
d. action against third persons- Art. 1269

Case
Gaisano v. Insurance Company, G.R. No. 147839, June 8, 2008
Comglasco Corporation/Aguila Glass v. Santos Car Check Center
Corporation, GR No. 202989, March 25, 2015

B. Impossibility of Performance
1. Concept- Art. 1266, 1267
2. Kinds
a. As to extent
i. Total
ii. Partial
b. As to source
i. legal
ii. physical
3. Requisites- Art. 1266
4. Effects
a. in obligations to do- Art. 1266, 1267, 1262 par. 2 (by analogy)
i. “impossibility” distinguished from “difficulty”
Cases
Occeña v. CA, 73 SCRA 637 (1976)
Naga Telephone Co. v. CA, 230 SCRA 351 (1994)
PNCC vs. CA, GR 116896, May 5, 1997 130.
b. in case of partial impossibility- Art. 1264 132.

IV. Condonation or Remission.

A. Concept
B. Kinds
1. As to extent
a. Total
b. Partial
2. As to form- Art. 1270 par. 1
a. Express
b. Implied
C. Requisites
a. when formalities required- Art. 1270 par. 2
Case
YAM vs. CA, G.R. No. 104726, February 11, 1999.
Presumptions- Art. 1271, 1272, 1274
D. Effects
1. in general
2. in case of joint or solidary obligations
E. Governing Rules- Art. 1270
F. Renunciation of Principal or
Accessory Obligation
1. effects- Art. 1273
2. rationale

V. Confusion or Merger of Rights

A. Concept
B. Requisites
C. Effects
1. in general- Art. 1275
2. in case of joint (Art. 1277) or solidary obligations
 14

D. Confusion in Principal or
Accessory Obligation- Art. 1276

VI. Compensation
A. Concept- Art. 1278
Case
Bangko Sentral v. COA, G.R. No. 168964, January 23, 2006
Adelaida Soriano v. People of the Philippines, GR No. 181692, August 14, 2013
Mondragon Personal Sales Inc. v. Sola, Jr., GR No. 174882, January 21, 2013
Union Bank of the Philippines v. DBP, GR No. 191555, January 20, 2014
First United Contractors Corporation and Blue Star Construction Corporation v.
Bayanihan Automotive Corporation, GR No. 164985, January 15, 2014
Areza v. Express Savings Bank, GR No. 176697, September 10, 2014
California Manufacturing Co., Inc. v. Advanced Technology System, GR No. 202454,
April 25, 2017.

1. Distinguished from Confusion

B. Kinds
1. As to extent
a. Total
b. Partial
2. As to origin
a. Legal
b. Conventional- Art. 1279 inapplicable, 1282
c. Judicial- Art. 1283
d. Facultative
C. Legal
Compensation
1. Requisites- Art. 1279, 1280
a. “due” distinguished from “demandable”
Cases
Gan Tion v. CA, 28 SCRA 235 (1969)
BPI v. Reyes, 255 SCRA 571 (1996)
PNB v. Sapphire Shipping, 259 SCRA 174 (1996)
Silahis Marketing Corp vs. IAC (Dec 7, 1989, 180 SCRA)
BPI vs. CA (GR 116792, March 29, 1996, 255 SCRA)
UCPB v. CA, G.R. No. 126890, April 02, 2009
2. Effects- Art. 1290, 1289

D. When Compensation is Not Allowed- Art. 1287, 1288

E. Compensation of Debts Payable in Different Places- Art. 1286
F. Effect of Nullity of Debts to be Compensated- Art. 1284
G. Effects of Assignment of Credit
1. with consent of debtor- Art. 1285 par. 1
2. with knowledge but without consent of debtor- Art. 1285 par. 2
3. without knowledge of debtor- Art. 1285 par. 3 a. rationale

VII. Novation
A. Concept- Art. 1291
B. Kinds
1. As to form
a. Express
b. Implied
2. As to origin
a. Conventional
b. Legal
3. As to object
a. Objective or Real
b. Subjective or Personal

C. Requisites- Art. 1292

Cases
Millar v. CA, 38 SCRA 642 (1971)
Dormitorio v. Fernandez, 72 SCRA 388 (1976)
Magdalena Estate v. Rodriguez, 18 SCRA 967 (1966)
Reyes v. Secretary of Justice, 264 SCRA 35 (1996)
Conchingyan vs. RB Surety and Insurance (June 30, 1987)
 15

Broadway Centrum Condominium Corp vs. Tropical Hut (July 5, 1993)

California Bus Line vs. State Investment (GR 147950, December 11, 2003
Ong v. Bognabal,, G.R. No. 149140, September 12, 2006
Sps. Reyes v. BPI Family, G.R. No. 149840, March 31, 2006
Ace Foods Inc. v. Micro Pacific Technologies Co., Ltd., GR No. 200602,
December 11, 2013
Phil. Reclamation Authority v. Ramago, Inc., GR No. 174665, September 18, 2013
Vector Shipping Co. v. American Home Assurance, Co., GR No. 159213, July 3, 2013
Asian Terminals, Inc. V. Philam Insurance Co., Inc., GR No. 181163, July 24, 2013
Degaños v. People of the Philippines, GR No. 162826, October 14, 2013
Arco Pulp and Paper Co., Inc. v. Dan T. Lim, et al, GR No. GR No. 206806,
June 25, 2014
Bognot v. RRI Lending Corp, GR No. 180144, September 24, 2014
The Wellex Group v. U-Land Airlines, Co., Ltd., GR No. 167519, January 14, 2015
BPI v. Domingo, GR No. 169407, March 25, 2015
Paradigm Development Corporation of the Phil. v. BPI, GR No. 191174, June
7, 2017
Spouses Celones v. Metropolitan Bank and Trust Co., GR No. 186069

D. Effects
1. in general- Art. 1296
2. when accessory obligation may subsist- Art. 1296

E. Effect of the Status of the Original or New Obligation

1. nullity or voidability of original obligation- Art. 1298
2. nullity or voidability of new obligation- Art. 1297
3. suspensive or resolutory condition of original obligation- Art. 1299

F. Objective Novation
1. meaning of “principal conditions”
G. Subjective Novation
1. By change of debtor
a. Expromision
i. requisites- Art. 1293
ii. effects- Art. 1294
b. Delegacion
i. requisites- (vs. Art. 1293)
ii. effects- Art. 1295
Cases
Garcia v. Llamas, 417 SCRA 292 (2003)
Quinto vs. People, G.R. No. 126712, April 14, 1999.

2. By change of creditor: Subrogation of a third person in the rights of the creditor-

Art. 1300
a. Conventional subrogation
i. requisites- Art. 1301
ii. distinguished from Assignment of Credit
iii. effects- Art. 1303, 1304
Case
Licaros v. Gatmaitan, G.R. No. 142838, August 9, 2001.
b. Legal subrogation
i. requisites
ii. when presumed- Art. 1302
iii. effects- Art. 1303, 1304
Cases
Astro Electronics Corp. vs. Philippine Export And Foreign
Loan Guarantee Corporation, G.R. No. 136729, September 23, 2003
Metrobank v. Rural Bank of Gerona, G.R. No. 159057, July 5, 2010
 16

Title II. CONTRACTS

Chapter 1. General Provisions

A. Definition – Art. 1305
Cases
Gateway v. Land Bank G.R. 155217, July 30, 2003
Ace Foods Inc. v. Micro Pacific Technologies Co., Ltd., GR No.
200602
Hur Tin Yang v. People of the Philippines, GR No. 195117

B. Elements
1. Essential elements (see Chapter II, infra)
a. Consent
b. Object
c. Cause

Case:
Rodolfo Cruz and Esperanza Ibias v. Atty. Delfin Gruspe, GR No.
191431
SM Land, Inc. v. Bases Conversion and Development Authority, GR
No. 203655, March 18, 2015

2. Natural elements
3. Accidental elements (see D., 3., infra)
C. Characteristics
1. Obligatory force – Art. 1308
Cases:
Consolidated Industrial Gases, Inc. v. Alabang Medical Center, GR No.
181983, November 13, 2013
Rolando Mendiola v. Commerz Trading International Inc., GR No.
200895, July 31, 2013
Metropolitan Bank v. Ana Grace Rosales, GR No. 183204, January 13,
2014

2. Mutuality – Arts. 1308-1310 (see also Art. 1473)

Cases
GSIS v. CA, 228 SCRA 183 (1993)
Professional Academic Plans, Inc. Francisco Colayco and
Benjamin Dino vs. Crisostomo (G.R. No. 148599, March 14, 2005.)
Spouse Juico v. China Banking Corp, GR No. 187678, April 10, 2013
Spouses Silos v. PNB, GR No. 181045, July 02, 2014
Security Bank Corp v. Spouses Mercado, GR No. 192934, June 27, 2018
Spouses Mercado v. Security Bank Corp, GR No. 197010, June 27, 2018

3. Relativity
a) Contracts take effect only between the parties, their assigns and heirs - Art.
1311
Cases
Manila Railroad Co. v. La Compañia Trasatlantica, 83 Phil. 875 (1918)
DKC Holdings Corp. v. CA, 329 SCRA 666 (2000)
Analita Inocencio v. Hospicio de San Jose, GR No. 201787, September
25 ,2013
Spouses Mamaril v. Boy Scouts of the Philippines, GR No. 179382,
January 14, 2013
Virata v. Wee, GR No. 220926, July 25, 2017
NPC Divers and Mechanics v. NPC, GR No. 156208, November 21, 2017
Excellent Essentials International Corp v. Extra Excel International,
GR No. 192797, April 18, 2018

b) No one may contract in the name of another – Art. 1317

Case
Gutierrez Hmnos. v. Orense, 28 Phil. 571 (1914)

4. Freedom to Stipulate/Independence of Contract or Principle of Autonomy of

Will
Cases:
Star Two (Spv-Amc), Inc. v. Paper City Corporation of the Philippines
 17

Gonzalo v. Tarnate, Jr., GR No. 160600, January 15, 2014

Aniceto Campos v. BPI
Villa Crista Monte Realty & Development Corp v. Equitable PCI Bank
5. Consensuality of Contract

D. Parties
1. Auto-contracts
2. Freedom to contract – Art. 1306
Cases
Gabriel v. Monte de Piedad, 71 Phil. 497 (1941)
Pakistan International Airlines v. Ople, 190 SCRA 90 (1990)
Rivera v. Solidbank, G.R. No. 163269, April 19, 2006

a. Special disqualifications
1) Art. 87, Family Code
2) Arts. 1490 and 1491, CC
3) Art. 1782, CC

3. What they may not stipulate – Art. 1306

a. Contrary to law, e.g.:
1) pactum commissorium (Art. 2088)
2) pactum leonina (Art. 1799)
3) pactum de non alienado (Art. 2130)
b. Contrary to morals
c. Contrary to good customs
d. Contrary to public order
e. Contrary to public policy
Cases
Cui v. Arellano, 2 SCRA 205 (1961)
Arroyo v. Berwin, 36 Phil. 386 (1917)
Filipinas Compañia de Seguros v. Mandanas, 17 SCRA 391 (1966)
Bustamante v. Rosel, 319 SCRA 413 (1999)
E. Classification
1. According to subject-matter
a. Things
b. Services
2. According to name
a. Nominate
b. Innominate – Art. 1307
1) do ut des
2) do ut facias
3) facio ut facias
4) facio ut des
Case
Dizon v. Gaborro, 83 SCRA 688 (1978)
Corpuz vs. CA (93 SCRA 424)
3. According to perfection
a. By mere consent (consensual) – Art. 1315
b. By delivery of the object (real) – Art. 1316
4. According to its relation to other contracts
a. Preparatory
b. Principal
c. Accessory
5. According to form
a. Common or informal
b. Special or formal
6. According to purpose
a.Transfer of ownership, e.g., sale
b.Conveyance of use, e.g., commodatum
c.Rendition of services, e.g., agency
7. According to the nature of the vinculum produced
a.Unilateral
b.Bilateral
c.Reciprocal
8. According to cause
a.Onerous
b.Gratuitous or lucrative
 18

9. According to risk
a.Commutative
b.Aleatory
F. Stages
1. Preparation
2. Perfection
3. Consummation or death
Cases:
Hilltop Market Fish Vendors Association v. Yaranon, GR No. 188057, July 12, 2017
Heirs of Ignacio v. Home Bankers Savings and Trust Co., GR No. 177783, January 23,
2013
Robern Development Corp. v. People’s Landless Association, GR No. 173622, March 11,
2013
CE Construction Corp. v. Araneta Center, Inc., GR No. 192725, August 9, 2017
Metro Rail Transit Dev. Corp. v. Gammon, Philippines, Inc., GR No. 200401, January 17,
2018
Spouses Ong v. BPI Family Savings, GR No. 208638

G. As distinguished from a perfected promise and an imperfect promise (policitacion)

H. With respect to third persons

1. Stipulations in favor of third persons (stipulations pour autrui) – Art. 1311, 2nd par.
Cases
Florentino v. Encarnacion, 79 SCRA 192 (1977)
Coquia v. Fieldmen’s Insurance Co., 26 SCRA 178 (1968)
Constantino v. Espiritu, 39 SCRA 206 (1971)
Integrated Packaging Corp v. CA, G.R. No. 115117, June 8, 2000
2. Possession of the object of contract by third persons – Art. 1312
3. Creditors of the contracting parties – Art. 1313
4. Interference by third persons – Art. 1314
Cases
Daywalt v. Corp., 39 Phil. 587 (1919)
So Ping Bun v. CA, 314 SCRA 751 (1999)
Jose Lagon vs. CA and Lapuz (G.R. No. 119107. March 18, 2005)

Chapter 2. Essential Requisites of Contracts

A. Consent
1. Requisites – Art. 1319 a Must be manifested by the concurrence of the
offer and acceptance
Cases
Rosenstock v. Burke, 46 Phil. 217 (1924)
Malbarosa v. CA, 402 SCRA 168 (2003)
Insular Life v. Asset Builders Corp., G.R. No. 147410, February 05, 2004
Sps. Paredes v. CA, G.R. No. 147074, July 15, 2005
Almeda v. Heirs of Ponciano Almeda, GR No. 194189, Sep 14, 2017
Lavarez v. Guevarra, GR No. 206103, March 29, 2017
Ayala Land Inc. v. ASB Realty Corp, GR No. GR No. 210043, Sep 26, 2018
1) Offer
a) Must be certain – Art. 1319
b) What may be fixed by the offeror – Art. 1321
c) When made through an agent – Art. 1322
d) Circumstances when offer becomes ineffective – Art. 1323
e) Business advertisements of things for sale – Art. 1325
f) Advertisements for bidders – Art. 1326 273.
2) Acceptance
a) Must be absolute – Art. 1319
b) Kinds
i. Express – Art. 1320 ii. Implied – Art.
1320 iii. Qualified – Art. 1319
c) If made by letter or telegram – Art. 1319, 2nd par.
i. Four theories on when the contract is
perfected:
1. Manifestation theory
2. Expedition theory
3. Reception theory
4. Cognition theory – Art. 1319, 2nd par.
d) Period of acceptance – Art. 1324
 19

Case
Sanchez v. Rigos, 45 SCRA 368 (1972)
Tuazon v. Del Rosario-Suarez, G.R. No. 168325,
December 13, 2010
e) Contract of option – Art. 1324
Case
Adelfa Properties v. CA, G.R. No, 111238, January 25, 1995

b Necessary legal capacity of the parties

1) Who cannot give consent – Art. 1327
2) When offer and/or acceptance is made
a) during a lucid interval
b) in a state of drunkenness
c) during a hypnotic spell
c The consent must be intelligent, free, spontaneous, and real – Arts. 1330-1346 1)
d Effect – Art. 1330
2) Vices of consent
a) Mistake or error
i. kinds
b) Mistake of fact
a. as to substance of the object
b. as to principal conditions
c. as to identity or qualifications of one of
the parties
d. as to quantity, as distinguished from
a simple mistake of account

Cases
Asiain v. Jalandoni, 45 Phil. 296 (1923)
Heirs of William Sevilla, et.al v. Leopoldo
Sevilla, 402 SCRA 501 (2003)
Spouses Theis vs. CA (GR 126013, Feb 12,
1997)
Sierra v. PAIC Savings and Mortgage Bank,
Inc.

2. Error of law
a. General rule: Ignorantia legis neminem excusat
– Art. 3
b. Exception: Mutual error of law – Art. 1334
ii. When one of the parties is unable to read – Art. 1332
Cases
Dumasug v. Modelo, 34 Phil. 252 (1916)
Maxina Hemedes v. CA, 316 SCRA (1990)
Katipunan vs. Katipunan (G.R. No. 132415,
January 30, 2002)
Leonardo v. CA, G.R. No. 125485, September 13,
2004

iii. Inexcusable mistake – Art. 1333

Case
Domingo Realty v. CA, G.R. No. 126236,
January 26, 2007

b) Violence and intimidation – Art. 1335

i. Effect – Art. 1336
Cases
Martinez v. Hongkong and Shanghai Bank, 15 Phil. 252 (1910)
Lee vs. CA (G.R. No. 90423, September 6, 1991)
Binua v. Ong, GR No. 207176, June 18, 2014

c) Undue influence – Art. 1337

Cases
Alcasid v. CA, G.R. No. 104571, October 7, 1994
Loyola v. CA, G.R. No. 115734, February 23, 2000
 20

d) Fraud or dolo – Art. 1338

Cases
Hill v. Veloso, 31 Phil. 161 (1915)
Woodhouse v. Halili, supra
Geraldez v. CA, 230 SCRA 320 (1994)
Sps. Tiongson v. Emergency Pawnshop, G.R. No. 167874,
January 15, 2010
Tankeh v. DBP, GR No. 171428, November 11, 2013
ECE Realty v. Mandap, GR No. 196182, September 1, 2014
Paradigm Development Corporation of the Philippines v. BPI,
GR No. 191174
Eduardo N. Riguer v. Atty. Edralin S. Mateo, GR No. 222538,
June 21, 2017

i. Kinds
1. dolo causante – Art 1338
2. dolo incidente – Art. 1344, 2nd par.
Cases
Tankeh v. DBP, G.R. No. 171428, November 11, 2013
ECE Realty v. Mandap G.R. No. 196182, September 01, 2014

5. ii. Failure to disclose facts; duty to reveal them – Art. 1339

Cases
Tuason v. Marquez, 45 Phil. 381 (1923)
Rural Bank of Sta. Maria v. CA, 314 SCRA 255
(1999)
iii. Usual exaggerations in trade; opportunity to know the facts
– Art. 1340
Cases
Azarraga v. Gay, 52 Phil. 599 (1928)
Laureta Trinidad v. IAC, 204 SCRA 524 (1991)

v. Mere expression of an opinion – Art. 1341

1. Effects – Art. 1344
Case
Songco v. Sellner, 37 Phil.254 (1917)

e) Misrepresentation
i. By a third person – Art. 1342
ii. Made in good faith – Art. 1343
iii. Active/passive
Cases
Mercado and Mercado v. Espiritu, 37 Phil. 215 (1917)
Braganza v. Villa Abrille, 105 Phil. 456 (1959)

f) Simulation of Contracts
Cases
Rodriguez v. Rodriguez, 28 SCRA 229 (1914)
Suntay v. CA, 251 SCRA 430 (1995)
Blanco v. Quasha, G.R. No. 133148, November 17, 1999
Manila Banking v. Silverion, G.R. No. 132887, August 11, 2005
Formaran v. Ong, GR No. 186264, July 8, 2013
Rebusquillo v. Gualvez, GR No. 204029 June 4, 2014
De Leon v. Dela Llana, GR No. 212277, February 11, 2015
Almeda v. Heirs of Ponciano Almeda, GR No. 194189, September 14, 2017

i. Kinds – Art. 1345

1. Absolute
2. Relative
ii. Effects – Art. 1346
B. Object of Contracts
1. What may be the objects of contracts – Art. 1347
a. All things not outside the commerce of man
b. All rights not intransmissible
c. All services not contrary to law, morals, good customs, public, or public policy
2. Requisite - must be determinate as to its kind – Art. 1349
 21

3. What may not be the objects of contracts

a. Future inheritance, except when authorized by law – Art. 1347
Cases
Blas v. Santos, 1 SCRA 899 (1961)
J.L.T. Agro, Inc. vs. Balansag and Cadayday (G.R. No. 141882.
March 11, 2005)
b. Impossible things or services – Art. 1348
Case:
Land Bank of the Philippines v. Cacayurin, GR No. 191667, April 17, 2013

C. Cause of Contracts
1. Meaning of cause – Art. 1350
a. In onerous contracts
b. In remuneratory contracts
c. In contracts of pure beneficence
2. As distinguished from motive – Art. 1351
3. Defective causes and their effects:
a. Absence of cause and unlawful cause – Art. 1352
Case
Liguez v. CA, 102 Phil. 577 (1957)
b. Statement of a false cause in the contract – Art. 1353
c. Lesion or inadequacy of cause – Art. 1355
Cases
Carantes v. CA, 76 SCRA 514 (1977)
Sps. Buenaventura, et. al. v. CA, 416 SCRA 263 (2003)
4. Presumption of the existence and lawfulness of a cause, though it is not stated in the
contract – Art. 1354

Chapter 3. Form of Contracts

A. General rule: Contracts shall be obligatory, in whatever form they may have been entered into,
provided all the essential requisites for their validity are present. (“Spiritual system” of the
Spanish Code) - Art. 1356
B. Exception: When the law requires that a contract be in some form in order that it may be valid
or enforceable. (Anglo-American principle) - Art. 1356
Case:
Hernaez v. De los Angeles, 27 SCRA 1276 (1969)
Cenido v. Sps. Amadeo, G.R. No. 132474, November 19, 1999

C. Kinds of formalities required by law:

1. Those required for the validity of contracts, such as those referred to in Arts. 748, 749, 1874,
2134, 1771, 1773;
2. Those required, not for validity, but to make the contract effective as against third persons,
such as those covered by Arts. 1357 and 1358; and
3. Those required for the purpose of proving the existence of the contract, such as those under
the Statute of Frauds in Art. 1403.
Case:
Resuena vs.CA, G.R. No. 128338. March 28, 2005
Cases:
Dee Hwa Liong Foundation Medical Center and Anthony Dee v. Asiamed Supplies and
Equipment Corporation, GR No. 205638, August 23, 2017
Estrellado v. Presiding Judge of MTCC, GR No. 164482, November 3, 2017
Diampoc v. Buenaventura, GR No. 200383, March 19, 2018
Coca-Cola Bottlers Phils. Inc. v. Spouses Soriano, GR No. 211232, April 11, 2018

Chapter 4. Reformation of Instruments

A. Requisites (Art. 1359):
1. Meeting of the minds upon the contract;
2. The true intention of the parties is not expressed in the instrument; and
3. The failure of the instrument to express the true agreement is due to mistake, fraud,
inequitable conduct, or accident.
Cases
Garcia v. Bisaya, 97 Phil. 609 (1955)
Bentir v. Leande, 330 SCRA 591 (2000)
Heirs of Miguel v. Heirs of Miguel, G.R. No. 158916, March 19, 2014
B. Cases where no reformation is allowed - Art. 1366
 22

C. Implied Ratification – Art. 1367

D. Who may ask for reformation –Art. 1368
E. Procedure of reformation – Art. 1369
Cases
Atilano v. Atilano, 28 SCRA 2232 (1969)
Carantes v. CA, supra
Sarming, et. al. v. Cresencio Dy, et. al., 383 SCRA 131 (2002)Chapter 5.
Interpretation of Contracts (Compare with Rules on Statutory
Construction)
Makati Tuscany Condominium Corporation v. Multi-Realty Development
Corporation, GR No. 185530, April 18, 2011

A. Primacy of intention – Arts. 1370, 1372

Cases
Borromeo v. CA, 47 SCRA 65 (1972)
Kasilag v. Rodriguez, 69 Phil. 217 (1939)
Santi vs. CA (GR 93625, 227 SCRA 541, 1993)
Benguet Corp v. Cabildo, G.R. No. 151402, August 22, 2008

B. How to determine intention – Art. 1371

Case
Villaflor v. CA, G.R. No. 95694, October 9, 1997

Chapter 5. INTERPRETATION OF CONTRACT

How to interpret a contract
1. When it contains stipulations that admit several meanings – Art. 1373
2. When it contains various stipulations, some of which are doubtful – Art. 1374
3. When it contains words that have different significations – Art. 1375
4. When it contains ambiguities and omission of stipulations – Art. 1376
5. With respect to the party who caused the obscurity – Art. 1377
6. When it is absolutely impossible to settle doubts by the rules above – Art. 1378
a. in gratuitous contracts
b. in onerous contracts
7. When the doubts are cast upon the principal object so that the intention cannot be known –
Art. 1378
Applicability of Rule 123, Rules of Court (now Secs. 10-19, Rule 130) – Presumptions –
Conclusive and Rebuttable

Cases:
Spouses Cabahug v. National Power Corporation, GR No. 186069, January 30, 2019
Rodolfo Cruz v. Atty. Delfin Gruspe, GR No. 191431, March 13, 2013
Star Two (SPV-AMC), Inc. v. Paper City Corporation of the Philippines, GR No. 169211,
March 6, 2013
Stronghold Insurance Company v. Spouses Stroem, GR No. 204689, January 21, 2015
The Wellex Group, Inc. v. U-Land Airlines, Co. Ltd., GR No. 167519, January 14, 2015
CE Construction Corporation v. Araneta Center, Inc., GR No. 192725, August 9, 2017
Pioneer Insurance and Surety Corporation v. APL Co. Pte, Ltd., GR No. 226345, August 2, 2017

DEFECTIVE CONTRACTS

Chapter 6. Rescissible Contracts

A. Kinds – Art. 1381
B. Characteristics
1. Their defect consists in injury or damage either to one of the contracting parties or to
third persons.
2. They are valid before rescission.
3. They can be attacked directly only, and not collaterally.
4. They can be attacked only either by a contracting party or by a third person who is
injured or defrauded.
5. They can be convalidated only by prescription, and not by ratification.

C. Rescission – Art. 1380

1. Definition
Case
Universal Food Corp. v. CA, 33 SCRA 1 (1970)
Lalicon v. NHA, G.R. No. 185440, July 13, 2011
 23

Anchor Savings Bank (Formerly Anchor Finance and

Investment Corporation v. Furigay, GR No. 191178, March
13, 2013
Jose Raval v. Renato Peralta, GR No. 188467, March 29, 2017

2. As distinguished from rescission under Art. 1191

3. Requisites:
a. The contract is rescissible;
b. The party asking for rescission has no other legal means to obtain
reparation – Art. 1383;
c. He is able to return whatever he may be obliged to restore if
rescission is granted – Art 1385;
d. The object of the contract has not passed legally to the possession of
a third person acting in good faith – Art. 1385;
e. The action for rescission is brought within the prescriptive period of
four (4) years – Art 1389.
4. Effect of rescission – Art. 1385
a. with respect to third persons who acquired the thing in good faith –
Art. 1385, 2nd and 3rd par.
5. Extent of rescission – Art. 1384
6. Presumptions of fraud – Art. 1387
a. Badges of fraud
Cases
Oria v. McMicking, 21 Phil. 243 (1912)
Siguan v. Lim, 318 SCRA 725 (1999)
Suntay v. CA, supra
China Banking v. CA, G.R. No.
129644, March 7, 2000
7.Liability for acquiring in bad faith the things alienated in fraud of creditors – Art. 1388
Chapter 7. Voidable or Annullable Contracts
Kinds – Art. 1390
Cases
Francisco v. Herrera, G.R. No. 139982, November 21, 2002
Heirs of Ureta v. Heirs of Ureta, G.R. No. 165748, September 14, 2011
Metropolitan Fabrics, Inc. v. Prosperity Credit Resources, Inc., GR No.
154390, March 14, 2017
B. Characteristics
1. Their defect consists in the vitiation of consent of one of the contracting parties.
2. They are binding until they are annulled by a competent court.
3. They are susceptible of convalidation by ratification or by prescription.

C. Annulment
1. As distinguished from rescission
2. Grounds – Art. 1390
3. Who may and may not institute action for annulment – Art. 1397
Case
Singsong v. Isabela Sawmill, 88 SCRA 623 (1979)
Malabanan v. Gaw Ching, G.R. No. 74938, January 17, 1990
4. Prescription – Art. 1391
5. Effect
a. Mutual restitution – Arts. 1398 and 1402
Cases
Cadwallader & Co. v. Smith, Bell & Co., 7 Phil. 461 (1907)
Velarde v. CA, supra
1) When one of the parties is incapacitated - Art. 1399
2) When the thing is lost through the fault of the party obliged to return the same –
Art. 1400
6. Extinguishment of the action
b. By ratification – Art. 1392
c. When the thing is lost through the fault of the person who has the right to
file the action – Art. 1401
D. Ratification
1. Requisites:
a. The contract is voidable;
b. The ratification is made with knowledge of the cause for nullity;
c. At the time of the ratification, the cause of nullity has already ceased to exist.
2. Forms
a. Express or tacit – Art. 1393
b. By the parties themselves or by the guardian in behalf of an incapacitated party –
Art. 1394
3. Effects:
a. Action to annul is extinguished – Art. 1392
Case
Uy Soo Lim v. Tan Unchuan, 38 Phil. 552 (1918)
b. The contract is cleansed retroactively from all its defects – Art. 1396.
 25

Chapter 8. Unenforceable Contracts

Characteristics
1. They cannot be enforced by a proper action in court.
2. They are susceptible of ratification.
3. They cannot be assailed by third persons.
B. Kinds – Art. 1403
1. Unauthorized contracts
a. Governing rules – Art. 1404
Case:
Iglesia Filipina Independiente (IFI) v. Heirs of Bernardo Taeza, GR
No. 179597, February 3, 2014

2. Contracts covered by the Statute of Frauds

a. Purpose of Statute
Cases
Philippine National Bank v. Philippine Vegetable Oil Co., 49
Phil. 857 (1927)
Limketkai Sons vs. CA (250 SCRA 523)
Swedish Match v. CA, G.R. No. 128120, October 20, 2004
Sps. Torcuator v. Sps. Bernabe, G.R. No. 134219, June 8, 2005
b. How ratified – Art. 1405
Cases
Carbonnel v. Poncio, et al., 103 Phil. 655 (1958)
c. Right of the parties when a contract is enforceable but a
public document is necessary for its registration – Art. 1406
3. Contracts executed by parties who are both incapable of giving consent to a contract
a. Effect of ratification by the parents or guardian of one of the parties – Art.
1407
b. Effect of ratification by the parents or guardian of both parties –
Art. 1407

Chapter 9. Void or Inexistent Contracts

Characteristics
1. Void from the beginning
2. Produces no effect whatsoever
3. Cannot be ratified – Art. 1409
Case
Ching v. Goyanko, Jr., G.R. 165879, November 10, 2006

B. Kinds –Art. 1409

1. Contracts that are void
a.Those whose cause, object, or purpose is contrary to law, morals, good
customs, public order or public policy
1) When the act constitutes a criminal offense – Art. 1411
a) in pari delicto rule
 26

Case
Urada v. Mapalad A.M. MTJ 91-622 (1993)
2) When the act is unlawful but does not constitute a criminal offense –
Art. 1412
a) in pari delicto rule
Cases
Modina v. CA, G.R. No. 109355, October 29, 1999
3) When the purpose is illegal, and money is paid or property delivered
therefor – Art. 1414
4) When the contract is illegal and one of the parties is incapable of
giving consent – Art. 1415
Cases
Liguez v. CA, supra
Relloza v. Gaw Cheen Hum, 93 Phil. 827
(1953)
5) When the agreement is not illegal per se but is prohibited – Art. 1416
Cases
Philippine Banking Corp. v. Lui She, 21 SCRA 52
(1967)
Frenzel v. Catito, 406 SCRA 55 (2003)
6) When the amount paid exceeds the maximum fixed by law – Art.
1417
7) When by virtue of a contract a laborer undertakes to work longer than
the maximum number of hours of work fixed by law – Art. 1418
8) When a laborer agrees to accept a lower wage than that set by law –
Art. 1419
9) When the contract is divisible – Art. 1420
10) When the contract is the direct result of a previous illegal contract
– Art. 1422
 b.Those whose object is outside the commerce of man
c.Those which contemplate an impossible service
d.Those where the intention of the parties relative to the principal object of the
contract cannot be ascertained
e.Those expressly prohibited or declared void by law
2. Contracts that are inexistent
a. Those which are absolutely simulated or fictitious (see Arts. 1345 and
1346)
b. Those whose cause or object did not exist at the time of the transaction.
C. Right to set up defense of illegality cannot be waived – Art. 1409
D. The action or defense for the declaration of the inexistence of a contract
1. does not prescribe – Art. 1410
2. is not available to third persons whose interest is not directly affected – Art. 1421

Cases:
Land Bank of the Philippines v. Cacayurin, GR No. 191667, April 17, 2013
Borromeo v. Mina, GR No. 193747, June 5, 2013
Gonzalo v. Tarnate, Jr., GR No. 160600, January 15, 2004
Fullido v. Grilli, GR No. 215014, February 29, 2016
Guillermo v. Philippine Information Agency, GR No. 223751, March 15, 2017
Delos Santos v. Abejon, GR No. 215820, March 20, 2017
Heirs of Arao v. Heirs of Eclipse, GR No. 211425, November 19, 2018

Title III. NATURAL OBLIGATIONS

A. Definition – Art. 1423

B. As distinguished from civil obligations – Art. 1423
C. As distinguished from moral obligations
Cases
Villaroel v. Estrada, 71 Phil. 140 (1940)
Fisher v. Robb, 69 Phil. 101 (1939)
D. Conversion to civil obligation
1. By novation
2. By ratification
D. Examples – Arts. 1424-1430

Title IV. ESTOPPEL

A. Definition – Art. 1431
Case
Kalalo v. Luz, 34 SCRA 337 (1970)
Dy v. Bibat-Palamos, GR No. 196200, September 11, 2013
SM Land Inc. v. Bases Conversion and Development Authority, GR No.
203655, March 18, 2015
B. Kinds
1. Technical estoppel
a. By record
b. By deed – art. 1433
Cases:
Modesto Sanchez v. Andrew Sanchez, GR No. 187661
 Citibank NA and the City Group Private Bank v. Ester Tanco-Gabaldon, GR
No. 198444, September 4, 2014
Carol Lim v. Ester Tanco-Gabaldon, GR No. 198469-70
Bobby Tan v. Grace Andrade, GR No. 171904, August 7, 2013
Spouses Aboitiz v. Spouses Po, GR No. 208450

2. Equitable estoppel or estoppel in pais – Art. 1433

Case:
Agnes V. Guison v. Heir of Loreño Terry, GR No. 191914, August 09, 2017

C. Persons bound – Art. 1439

Case
Manila Lodge No. 761 Benevolent and Protective Order of the Elks v. CA,
73 SCRA 168 (1976)
D. Cases where estoppel applies – Arts. 1434-1438
Case
Miguel v. Catalino, 26 SCRA 234 (1969)
Read: Annotation, 32 SCRA 542
Title V. TRUSTS

Chapter I. General Provisions

A. Definition
B. Governing rules – Art. 1442
C. Parties – Art. 1440
1. Trustor
2. Trustee
3. Beneficiary or cestui que trust
D. Kinds – Art. 144
Case
Salao v. Salao, 70 SCRA 168 (1976)
Joseph Goyanko, Jr. v. UCPB
Sime Darby Pilipinas Inc. v. Jesus Mendoza
Iglesia Filipina Independiente v. Heirs of Taeza, GR No. 179597, February 3, 2014
Jose Juan Tong v. Go Tiat Kun
Spouses Dona v. Marie Glenn Imson, GR No. 197728, September 16, 2015
Spouses Aboitiz and Maria Cristina Cabarrus v. Spouses Po, GR No. 208450

1. Express Trusts
a. Proof required – Art. 1443
b. Form – Art. 1444
c. Want of trustee – Art. 1445
d. Acceptance by the beneficiary – Art. 1441
2. Implied Trusts
a. How established – Art. 1441
b. How proved – Art. 1457
c. Examples – Arts. 1448-1456
Cases
Fabian v. Fabian, 22 SCRA 231 (1968)
Bueno v. Reyes, 27 SCRA 1179 (1969)
Tamayo v. Callejo, 46 SCRA 27 (1972)

SPECIAL CONTRACTS
SALES

A. In General
Definition – Arts. 1458, 1488
Case: Acop v. Court of Appeals, GR No. 118114, December 7, 1995
Characteristics – Arts 1458, 1475
Kinds of Sale – Arts 1458, 1463
Distinguished from other transactions – Arts 1245, 1466, 1467, 1468
Cases:
Santos v. Santos, CA, 47 OG 6372
Quiroga v. Parsons Hardware, 38 Phil 501
CIR v. Constantino, 31 SCRA 779
Ker & Co. v. Lingad, 38 SCRA 524
Luzon Brokerage Co., Inc v. Maritime Building Co., Inc., 43 SCRA 93
B. Elements of a Contract of Sale
Essential Elements – Art 1459-1465, 1469-1474, 1489, 1327, 1390, 1403, 1489, 1490,
1491, 1492, 1348, 1347, 1624-1627
1. Consent
Case: Pelayo v. CA, GR No. 141323, June 8, 2005
Abalos v. Macatangay, GR No. 155043, September 30, 2004

Incapacity by reason of Public Policy – Relative Incapacity

Araneta v. Tuazon, 49 OG 45
Rubias v. Batiller, 51 SCRA 120
2. Object
a. Thing
b. Right
3. Consideration
a. Money
b. Equivalent of Money
Case: Yu Bun Guan v. Ong, GR No. 144735, October 18, 2001
Natural Elements
Accidental Elements

C. Perfection of Contract
Contract of Option
Case: Equitorial Realty Dev. Corp v. Mayfair Theaters, Inc., 264 SCRA 483
Ang Yu Asuncion v. CA, 238 SCRA 602
Pan-Am v. Rapadas, GR No. May 19, 1992
BPI Credit v. CA, 204 SCRA 601 – Contract of Adhesion
Serra v. CA, January 4, 1994, 47 SCAD 55

Formalities of Contract of Sale – Art. 1483

Policitation
Case: Sanchez v. Rigos, 45 SCRA 368 [1972]
D. Rights and Obligations of the Vendor
a. To transfer ownership – Arts 1459, 1477-1478
Double Sales – Prius Tempore Potior Jure
Cases: Carumba v. CA, 31 SCRA 558
Consolidated Rural Bank [Cagayan Valley], Inc. v. CA, GR
No. 132161, January 17, 2005
Dagupan Trading Co. v. Macam, 14 SCRA 179
Carbonell v. CA, 69 SCRA 99
Valdeviesco v. Damalerio, GR No. 133303, February 15, 2005
Writ of Possession v. Unregistered Sale - Superior?
Buyers for Value and In Good Faith
Cases: Crisostomo v. CA, 197 ACRA 833
Spouses Uy v. CA, GR No. 109197, June 21, 2001
Risk of Loss –
Res Perit Domino
Pactum reservati Dominii
Case: Masiclat v. Centeno, 99 Phil 1043
 b. To deliver the object -
Kinds of Delivery – Tradition
Case: PVTA v. Delos Angeles, 87 SCRA 197
Sarmiento v. Lesaca, 108 Phil 900
Ong Ching v. CA, 239 SCRA 741
Dulay Enterprises, Inc. v. CA, 225 SCRA 678
Garcia v. CA, 312 SCRA 180
Power Commercial and Industrial Corp v. CA, 274 SCRA 597

c. Warranties – Natural Element

i. Warranty Against Eviction
Case: Andaya v. Manansala, 107 Phil 1151
ii. Warranty Against Hidden Defects
Case: United State Lines v. San Miguel Brewery, 10 SCRA 808

d. To pay for the expenses of the sale

E. Rights and Obligations of the Vendee

Payment of Price
Right of Inspection - COD
Acceptance

Maceda Law – Realty Installment Buyers Protection Act (RA 6552)

Cases: Valarao v. CA, 304 SCRA 155
Leaño v. CA, GR No. 129318, November 15, 2001
Rillo v. CA, 34 Phil 570
Luzon Brokerage Co. Inc. v. Maritima Bldg. Co. Inc., 86 SCRA 305
Jestra Development and Management Corporation, GR No. 167452,
January 30, 2007
Heirs of Pedro Escanlar v. CA, GR No. 119777
Holgado v. CA, GR No. 120690, October 23, 1997

F. Remedies for Breach of Contract

Remedies of an Unpaid Seller
Cases: UP v. De Los Angeles, GR No. L-28602, September 29, 1970
Froilan v. Pan Oriental Shipping Co. et al, L-11897, October 31, 1964
Olivares v. Castillo, GR No. 196251, July 9, 2014
Ursal v. CA, GR No. 142411, October 14, 2005
Nonato v. CA, GR No. 67181, November 22, 1985

 Right of Resale – Case: Katigbak v. CA, 4 SCRA 243

Remedies of the Buyer – Art 1481

Cases: Ong v. CA, 310 SCRA 1
Iringan v. CA, GR No. 129107, September 26, 2001

 Suspension of Payment
o Case: Bareng v. CA, 107 Phil 641
Recto Law – Sale of Movables on Installment – Art 1484, 1486
Cases: Southern Motors v. Moscoso, 2 SCRA 168
 Tanjanlangit v. Southern Motors, 54 OG 2502
Industrial Financing Corp v. Ramirez, 77 SCRA 152
Nonato v. IAC, 140 SCRA 255
Cruz v. Filipinas Investment & Finance Corp. 23 SCRA 791
Pascua v. Universal Motors Corp., 61 SCRA 121
Filipinas Investment and Finance Corp v. Vitug, 28 SCRA 658
U.S. Commercial Co. v. Halili, 93 Phil 371

G. Extinguishment of Sale
Causes
Redemption
1. Conventional Redemption
Cases: Bandong v. Austria, 31 Phil 479
Alojado v. Lim, 51 Phil 339
Soriano v. Abalos, 47 OG 168
Corcega v. Brosas, CA, OG 3411
Reyes v. Rosales, 25 Phil 495
Medel v. Francisco, 51 Phil 367
Baluyot v. Venegas, 22 SCRA 412
Ceynas v. Ulanday, 105 Phil 1007
Perez v. Zulueta, 106 Phil 264
Gerardino v. Gloria, 80 SCRA 646
Teodoro v. Arcenas, 110 Phil 222
Ongco v. Honorable Judge, 15 SCRA 30
Yturralde v. CA, 43 SCRA 413
Heirs of Arches v. Vda de Diaz, 50 SCRA 440
Labasan v. Lacueta, 86 SCRA 16
Gardner v. CA, 80 SCRA 399
Gloria Diaz v. CA, 84 SCRA 483
2. Legal
Cases: Butte v. Manuel Uy and Sons, Inc., 4 SCRA 864
Dela Cruz v. Cruz, 32 SCRA 307
Felices v. Colegado, 35 SCRA 173
Sampaco v. Lantud, GR No. 163551, July 18, 2011
Ong, et al v. Spouses Cabucos, GR No. 148056, April 19, 2001
Right of First Refusal
Case: Sps Litonjua v. L & R Corp., March 27, 2000
Cases:
Sanchez v. Rigos, 45 SCRA 368
First Optima Realty Corporation v. Securitron Security Services, Inc., GR No. 199648,
January 28, 2015
Martinez v. CA, 56 SCRA 647
Mapalo v. Mapalo, 17 SCRA 114
Paredes v. Espino, 22 SCRA 1000
Kuenzle & Streiff v. Macke & Chandler, 14 Phil. 610
Sun Bros. v. Velasco, 54 OG 5143
Bautista v. Sioson, 39 Phil 615
Lawyer’s Cooperative v. Tabora, 13 SCRA 762
Katigbak v. CA, 4 SCRA 243
Song Fo &Co. v. Hawaiian Phil. Co., 47 Phil 821
Doromal v. CA, 66 SCRA 575
Heirs of Jose Reyes, Jr. v. Amanda Reyes, GR No. 158377, August 13, 2010
Cebu State College of Science and Technology v. Misterio, et al, GR No. 179025, June 17,
2015
Ko, et al v. Aramburo, et al., GR No. 190995, 09 August 2017
Rodriguez v. Spouses Sioson, GR No. 199180, July 27, 2016
Danan v. Spouses Serrano and Reyes, GR No. 195072, August 1, 2016
Sta. Fe Realty v. Sison, GR No. 199431, August 31, 2016
Universal International Investment (BVI) Limited v. Ray Burton Development Corporation,
GR No. 182201, GR No. 185815, November 14, 2016
Repuela, et al v. Estate of the Spouses Otillo Larawan and Juliana Bacus, GR No. 219638,
December 07, 2016
Spring Homes Subdivision Co., Inc. v. Spouses Tablada, Jr., GR No. 200009, January 23, 2017
Arcaina v. Ingram, GR No. 196444, February 15, 2017
Land Bank of the Philippines v. Musni, GR No. 206343, February 22, 2017
Republic of the Philippines v. Philippine International Corporation, GR No. 181984, March
20, 2017
Renato Ma. R. Peralta v. Jose Roy Raval, GR No. 188467, GR No. 188764, March 29, 2017
Philippine Steel Coating Corp. v. Eduard Quiñones, GR No. 194533, April 19, 2017
Alejo v. Spouses Cortez, GR No. 206114, June 19, 2017

BARTER or EXCHANGE

Murphy v. Trinidad, 44 Phil. 649

Biagtan v. Oller, 62 Phil 933

LEASE

I. Nature

A. Kinds of Lease
a. Lease of things (Art. 1642)
b. Lease of work or service (Art 1642)
i. Household service
ii. Contract of labor (employment contract)
iii. Contract for a piece of work
iv. Contract with common carriers (contract of carriage)
c. Lease of right – License/Franchise
B. Definitions
C. Characteristics
D. Distinguished from other contracts/legal relations

II. Essential Elements

a. Consent
b. Object/Purpose: Period
c. Cause
d. Formalities

III. Rights and Obligations of the Lessor & Lessee

a. Necessary repairs
 b. Improvements
c. Collapse of a building
d. Reduction of the Rent
e. Extension of the Lease
f. Right of First Refusal
g. Sublease & Assignment of the Lease
Case: United States Lines v. San Miguel Brewery, 10 SCRA 808
Tan Chiong Sian v. Inchausti Co., 22 Phil 152
Juan Nakpil and Sons v. CA, 144 SCRA 596
Metal Forming Corporation v. Office of the President, 247 SCRA 731

IV. Rights and Obligations of Third Persons

a. Suppliers
b. Buyers

V. Termination of the Lease

Cases: De Laureano v. Adil, 72 SCRA 148
FS Divina Agro Commercial v. CA, April 21, 1981
a. Loss of the thing
b. Death of either party
c. Expiration of the period
Cases: La Jolla Inc. v. CA, GR No. 115851, June 20, 2001
Heirs of Manuel Suico v. CA, 266 SCRA 444
LL and Co. Development and Agro-Industrial Corp. v. Huang Chao
Chun, GR No. 142378, March 7, 2002
Henson v. IAC, 148 SCRA 11
Jespajo Realty Corp. v. CA, GR No. 113626, September 27, 2002
Eliezaqui v. Manila Lawn Tennis Club, 2 Phil 309
Allied Banking Corp v. CA, 284 SCRA 351
Rantael v. CA, 97 SCRA 4530

Implied New Lease or Tacita Reconduccion

Cases: Paterno v. CA, GR No. 115763, March 29, 1997
Carlos v. CA, 268 SCRA, February 10, 1997

RA No. 9653 – Judicial Ejectment

Case: Tanio v. Ticson, GR No. 154895, November 18, 2004

Cases:

Republic of the Philippines v. Philippine International Corporation (PIC), GR No. 181984,

March 20, 2017
Renato Ma. R. Peralta v. Jose Roy Raval, GR No. 188467, GR No. 188764, March 29, 2017
Spouses Chung v. Ulanday Construction, Inc., GR No. 156038, October 11, 2010
Cebu Bionic Builders Supply, Inc. v. DBP, GR No. 154366, November 17, 2010
Mores v. Yu-Go, GR No. 172292, July 23, 2010
Dee v. CA, 176 SCRA 651 (1989)
Herrera v. Herrera, 7 Phil 274
Gonzales v. Mateo, 74 Phil 573
Dakudao v. Judge Consolacion, 122 SCRA 877 (1983)
Manlapat v. Salazar, 98 Phil 356
Equitorial Realty Development, Inc. v. Mayfair Theater, Inc., 264 SCRA 483, November 21,
1996
Pamintuan v. CA, 42 SCRA 344
Heirs of Dimaculangan v. IAC, 170 SCRA 393 (1989)
Fermin v. CA, 196 SCRA 723

AGENCY:
I. In General: Nature – a person’s physical absence will be converted into his juridical presence
“Qui facit per alium facit per se”
Case: Eurotech Industrial Technologies, Inc. v. Cuizon, GR No. 167552, April
23, 2007
A. Definition
B. Characteristics
C. Distinguished from/compared with other relations
(Features of Contract of Agency)
Cases:
Gabin v. Villanueva, CA, 51 OG 5749
Shell Co. v. Fireman’s Insurance Co., L-5169 (1957)
Africa v. Caltex Phil., 16 SCRA 448
BPI & FGU Insurance v. Laingo, GR No. 205206, March 16, 2016
Virata v. Wee, GR No. 220926, July 5, 2017
International Exchange Bank v. Briones, GR No. 205657, March 29, 2017
II. Kinds of Agency
A. Actual Agency
Kinds of Actual Agency
a. As to manner of creation: Express or Implied
Case:
Gonzales-Saldana v. Spouses Niamatali, GR No. 2265587, November 21,
2018
b. As to compensation
c. As to scope of authority
B. Apparent or Ostensible Agency (Art. 1473)
C. Agency by Estoppel (Art 1473)
Cases:
Recio v. Heirs of Spouses Aguedo and Altamirano, GR No. 182349, July 24, 2013
Calubad v. Ricargen Development Corporation, GR No. 202364, August 30, 2017
Ayala Land, Inc. v. ASB Realty Corporation and EM Ramos and Sons, Inc., GR
No. 210043, September 26, 2018
III. Essential Elements of a Contract of Agency
a. Consent of the Contracting Parties: Principal & Agent only
b. Object: Execution of a juridical act
c. Cause: Presumed to be for a compensation
Cases: Cosmic Lumber Corp. v. CA, 332 Phil 948
Delos Reyes v. CA, 372 Phil 522
Pineda v. CA, GR No. 127094, February 6, 2002
Islamic Doctorate of the Philippines v. CA, 338 Phil 956
San Juan and Steel Fabricators, Inc. v. CA, 357 Phil 631
d. Form: Arts 1869, 1874, 1878
Cases:
 Bautista v. Jalandoni, GR No. 171464, November 27, 2013
Yoshizaki v. Joy Training Center of Aurora Inc., GR No. 174978, July 31,
2013
William Angidan Siy v. Alvin Tomlin, GR No. 205998, April 24, 2017
Valin v. Atty. Rolando Ruiz, AC No. 10564, November 7, 2017
e. Special Power of Attorney – Art 1878
Cases:
Florentina Bautista-Spille v. Nicorp Management and International
Exchange Bank, GR No. 214057, Octoberr 19, 2015
V-GENT, Inc. v. Morning Star Travel and Tours, Inc., GR No. 186305,
July 22, 2015
Philippine International Trading Corporation v. Threshold Pacific
Corporation, et al., GR No. 209119, October 3, 2018
IV. Obligations of the Agent
a. To carry out the agency and be liable for damages in case of non-performance
i. To act within the scope of his authority (Art 1881)
Case: Domingo v. Domingo, 42 SCRA 131
ii. To act on behalf of his principal (Art 1868)
Liability of two (2) or more agents – appointed by one principal – joint

Cases:
Salvador v. Rabaja, GR No. 199990, February 4, 2015
Bucton v. Rural Bank of El Salvador, GR No. 179625, February 24, 2014
b. To render an accounting of his transactions and to deliver (Art 1891)
c. To be responsible for the acts of the substitute
d. Rules applicable to a commission agent
e. Rules applicable to a guarantee commission agent: Del Credere Commission Agent
Cases: Pacific Com. Co. v. Yatco, OG, August 2, 1941, p. 127
Behn Meyer & Co., v. Nolting and Garcia, 35 Phil 274
CIR v. Cadwallader Pacific Co., 18 SCRA 827
V. Rights and Obligations of the Principal
a. To comply with the obligations which the agent may have contracted within the scope of
the agency and in representation of the principal (Art 1910)
Case: Mendoza v. De Guzman, 33 OG 1505
Infante v. Cunanan, 49 OG 3320
Reyes v. Mosqueda, 53 OG 2158
b. To advance to the agency – the necessary funds – Art 1912
c. To reimburse the agent sums advanced by him – Art 1912, 1918
d. To compensate the agent for the damages that he sustained
Liability when there are two or more principals appointing one agent –
solidary – Art 1915
Rights of Third Persons in Incompatible Contracts with agent and principal
Case: Manila Memorial Park Cemetery, Inc. v. Linsangan,
GR No. 151391, November 22, 2005
VI. Modes of Extinguishment of Agency – Art 1919
Death of the Principal –
Case: Lopez v. Court of Appeals, GR No. 163959, August 01, 2018
Buason v. Panuyas, 105 Phil 795
Henera v. Luy, 110 Phil 1020
Revocation –
 Case: International Exchange Bank now Union Bank of the Philippines v.
Briones, GR No. 205657, March 29, 2017
Withdrawal of the Agent
Accomplishment of the purpose of the agency
Dissolution of the Firm or Corporation which entrusted the authority
Expiration of the Contract of Agency
Civil Interdiction, Insolvency or Insanity

Cases:
Rallos v. Felix Go Chan & Sons Realty Corp., 81 SCRA 251
Fressel v. Mariano Uy Chaco Sons & Co., 34 Phil 122
Rallos v. Yangco, 20 Phil 269
Macke v. Camps, 7 Phil 553
Jimenez v. Rabot, 38 Phil 357
Insular Drug v. PNB, 58 Phil. 683
Domingo v. Domingo, 42 SCRA 131
Austria v. CA, 39 SCRA 527
Barretto v. Santa Maria, 26 Phil 440
Coleongco v. Claparols, 10 SCRA 577
International Exchange Bank now Union Bank of the Philippines v. Spouses Jerome and
Quinnie Briones and John Doe, GR No. 205657, March 29, 2017

PARTNERSHIP:
I. In General
a. Definition
b. Characteristics of Partnership as a Contract
c. Tests of Partnership:
Cases:
Evangelista v. Collector of Internal Revenue, 54 OG 996
Negado v. Makabenta, 54 OG 4082
Yulo v. Yang Chiaco Seng, GR No. L-12541, August 28, 1959
Aurbach v. Sanitary Wares Manufacturing Corp., GR No. 75875,
December 15, 1989
Philex Mining v. CIR, GR No. 148187, April 16, 2008
Litonjua v. Litonjua, GR Nos. 166299-300, December 13, 2005

c. Distinguished from other combination and relations

II. Essential Requisites
a. Consent of the contracting parties
b. Object certain: to engage in lawful activity
c. Cause
d. Formal Requirements
III. Classes of Partnerships
a. As to its Object: Universal & Particular Partnership
Case: CIR v. Suter, 27 SCRA 152
b. As to Liability of Partners: General & Limited Partnership
c. As to Term: Fixed Terms, Particular Undertaking & Partnership at Will
IV. Classes of Partners
a. According to their liability: General & Limited Partners
 b. According to their contribution: Capitalist Partner & Industrial Partner
c. According to the time they join the partnership: Incoming
d. According to Special Duties: Managing (Art 1782)
V. The property rights of a partner are: (Articles 1800 to 1814)
a. His rights in specific partnership property
b. His interest in the partnership, and
c. His right to participate in the management
Case: Liwanag v. Workmen’s Compensation Commission, 105 Phil 741
VI. Obligations of Partners Among Themselves
a. To make good his promised contribution
b. Fiduciary duty
c. To participate in the losses
d. Nature of Liability of Individual Partners
Pro-rata, Subsidiary, Joint or Solidary
Cases: Calatan v. Gatchalian, 105 Phil. 1270
Emnace v. CA, GR No. 126334, November 23, 2001
VII. Obligations of Partners with Regard to Third Persons
VIII. Dissolution, Winding Up and Termination
a. Nature & Effect of Dissolution
b. Causes of Dissolution
c. Distribution of assets
Cases: Aldecoa & Co. v. Warner Barnes & Co., 16 Phil. 423
Po Yeng Cheo v. Lim Ka Yan, 44 Phil. 172
Guidote v. Borja, 53 Phil. 900
IX. Limited Partnership
Cases:
Aniceto G. Saludo, Jr. v. PNB, GR No. 193138, August 20, 2018.

CREDIT TRANSACTIONSL: Loan, Deposit, Guaranty & Suretyship

I. Nature of Credit Transactions

a. Definition
b. Scope
c. Distinguished from Bailments
II. Loans
a. Definition
b. Kinds of Loan:
c. Characteristics
Consensual or Real?
Case: Monte de Piedad v. Javier, 36 OG 2176
Perfection of the Contract:
Case: Rose Packing Co., Inc. v. CA., 167 SCRA 309
BPI Investment Corp v. CA, GR No. 133632, February 15, 2002
Garcia v. Thio, GR No. 154878, March 16, 2007
d. Essential Elements: Consent, Object, Cause,
Accidental/Incidental: Formalities
e. Rights & Obligations of Bailor and Bailee in Commodatum
Liability for loss/deterioration due to a fortuitous event (Art 1942/1943)
Mutuum v. Commodatum
 Case: Tolentino v. Gonzales, 50 Phil 558
f. Rights and Obligations of Bailor and Bailee in Mutuum
To pay interest:
Kinds: Monetary Interest: Compensatory Interest
Case:
Sun Life of Canada (Phils.) Inc. v. Sandra Tan Kit, et al, GR No. 183272,
October 15, 2014
Rate
Cases:
Dario Nacar v. Gallery Frames, GR No. 189871, August 13, 2013
Mallari v. Prudential Bank, GR No. 197861, June 5, 2013
Anchor Savings Bank v. Pinzman Realty and Development Corporation, GR
No. 192304, August 13, 2014
Spouses Salvador and Alma Abella v. Spouses Romeo and Annie Abella, GR
No. 195166, July 8, 2015
Rey v. Anson, GR No. 211206, November 7, 2018
IBM Philippines, Inc. v. Prime Systems Plus, Inc., GR No. 203192, August 15,
2016
Federal Builders, Inc. v. Foundation Specialists, Inc., GR No. 194507,
September 8, 2014.
Rolando dela Paz v. L&J Development Company, GR No. 183360, September
8, 2014
g. Modes of Extinguishment

Cases:
Macalinao v. BPI, GR No. 175490, September 17, 2009
Catholic Vicar Apostolic v. CA, 165 SCRA 515 (1988)
Herrera v. Petrophil Corp., 146 SCRA 385
Integrated Realty Corp v. PNB, 174 SCRA 295 (1989)
Republic v. CA, 146 SCRA 15 (1986)

DEPOSIT:

I. Nature: Definition: Purpose

II. Kinds of Deposit
a. Extra-judicial: Conventional & Necessary: Irregular Deposit
b. Judicial or Sequestration
III. Characteristics
IV. Essential Elements: Subject Matter
V. Rights and Obligations of Depositor and Depositary
VI. Modes of Extinguishment

Cases:
BPI v. CA, May 10, 1994, 51 SCRA 188
Gullas v. National Bank, 62 Phil 519
CA Agro-Industrial Development Corp v. CA, March 3, 1993
Makati Shari-la Hotel and Resort, Inc. v. Harpereee, GR No. 189998, August 29, 2012.
ALEATORY CONTRACTS – Insurance, Gambling, Life Annuity
Cases: Rivera v. Peoples Bank & Trust Co., 73 Phil 546
Leung Ben v. O’Brien, 38 Phil 182
Insular Life Assurance Co., v. Ebrado, 80 Phil 181

COMPROMISES AND ARBITRATIONS

Cases:
Land Bank of the Philippines v. Heirs of Spouses Jorja Rigor-Soriano, GR No.
178312, January 30, 2013
Gadrinab v. Salamanca, et al, GR No. 194560, June 11, 2014
Conchita Sonley v. Anchor Savings Bank/Equicom Savings Bank, GR No. 205623,
August 10, 2016
SM Systems Corp. (Formerly Springsun Management Systems Corp.) v. Oscar
Camerino, GR No. 178591, March 29, 2017
Chiquitita Brands, Inc. v. Omelio, et al, GR No. 189102, June 7, 2017
Cathay Land, Inc. v. Ayala Land, Inc., A-Vida Land Corporation, GR No. 210209,
August 9, 2017
Asset Pool A [SPV-AMC], Inc. v. Clark Development Corporation, GR No. 205915,
November 10, 2015
Berg v. Nationality Bank of New York, 102 Phil 309

GUARANTY AND SURETYSHIP: Distinctions

A. Nature: Definition: Purpose
B. Distinctions with other contracts
a. Suretyship v. Passive Solidarity
Cases: Villa v. Garcia Bosque, 49 Phil 126
Stevenson v. Climaco, CA, 36 OG 1571
b. Corporate or Compensated Surety v. Private or Gratuitous Surety
Case: Zeyson v. Rizal Surety & Insurance Co., 16 SCRA 551
c.
C. Characteristics
Guaranty as security of future debts.
Cases: Fortune Motor [Phils] Corp v. CA, 335 Phil. 315
Southern Homes, Inc. v. BA Finance Corp., GR No. 135462, December
7, 2001
Babst v. CA, GR No. 99398, January 26, 2001
D. Effects of Guaranty
a. Between the Guarantor and the Creditor: Benefit of Excussion
Case: Southern Motors v. Barbosa, 99 Phil. 263
b. Between the Guarantor and the Debtor: Subrogation
Cases: Wilex Plastic Industries Corp. v. CA, 256 SCRA 478
Lee v. CA, GR No. 117913
Mico Metals Corp. v. CA, GR No. 117914, February 1, 2002
c. Between Co-Guarantors: Benefit of Division
E. Modes of Extinguishment
Cases: Asiatic Petroleum v. Hizon, 45 Phil 534
PNB v. Veraguth, 50 Phil 259
CREDIT TRANSACTIONS: Pledge, Mortgage and Antichresis
I. Provisions common to Pledge and Mortgage (Arts 2085-2092)
a. Naure: Definition: Purpose
b. Essential Elements
c. Indivisibility of the Contract
d. Pactum Commissorium v. Dacion en Pago
Cases: Spouses Uy v. CA, GR No. 109197, June 21, 2001
Reyes v. Nebrija, 52 OG 1928
Dalay v. Aquiantin, 47 Phil 941
Spouses Pen v. Spouses Julian, GR No. 160408, January 11, 2016
e. Right to recover deficiency: Who is entitled to excess?
Case: Manila Surety v. Velayo, 21 SCRA 515
f. Equity and Right of Redemption
Cases: Montevirgen v. CA., 112 SCRA 641 – Equitable Mortgage

II. Pledge (Arts. 2093-2023)

a. In general
i. Kinds of Pledge
ii. Characteristics of Pledge
iii. Extent/Coverage of the Pledge
b. Rights and Obligations of the Pledgor (Debtor or Third Person)
c. Rights and Obligations of the Pledgee (Creditor)
d. Modes of Extinguishment

III. Chattel and Real Estate Mortgage

[Arts 2140-2141, 1484-1485, Act 1508 – Chattel Mortgage Law (1906), Art 319, RPC]
[RA 11057 – Personal Property Security Act]
[Arts 2124-2131, Rule 68, Act No. 3135, as amended]
a. In general
i. Characteristics
Cases: Macapinlac v. Gutierrez Repide, 43 Phil 781
Reyes v. Sierra, 93 SCRA 472
ii. Subject matter
iii. Extent/Coverage of the Mortgage
- Affidavit of Good Faith
-After incurred obligations
Cases: Acme Shoes Rubber and Plastic Corporation v. CA, 260 SCRA
714
b. Essential Requisites
Formal Requisites
Registration of the REM
Case: Samanilla v. Cajucom, 107 Phil 432
Registration of CM
Case: Meyers v. Thein, 15 Phil. 303
Associated Insurance & Surety Co., v. Lim Ang, CA 52
OG 5218
Malonzo v. Luneta Motors, CA 53 OG 556
 Borlough v. Fortune Enterprises, GR No. L-9451,
March 29, 1957
Aleman v. De Catera, GR No. L-13693-13694, March
25, 1961

c. Rights and Obligations of the Mortgagor [Debtor or Third Person]

d. Rights and Obligations of the Mortgagee [Creditor]
- Mortgagee in Good Faith
Cases: Constancio Joaquin v. Abundio Madrid, GR No. L-13551,
January 30, 1960
Lara, et al v. Ayroso, GR No. L-6122, May 31, 1954
PNB v. Heirs of Estanislao Militar, GR No. 164801, June 30, 2006
FEBTC [now BPI] v. Tentmakers Group, Inc., GR No. 171050, July 4,
2012
- Deficiency Judgment in CM?
Cases: Ablaza v. Ignacio, 103 Phil 1151
Garrido v. Tuason, 24 SCRA 727
- See difference in Recto Law – Sale by Installments where there is
foreclosure of the CM v. CM per se

e. Claim of Third Persons on the Subject of Mortgage – Third Party Claim

Who has better right of possession?
Cases: Northern Motors Inc. v. Coquia, 66 SCRA 415
Bachrach Motor Co. v. Summers, 42 Phil 3
Norther Motors, Inc. v. Herrera, 49 SCRA 392
Equity of Redemption –
Case: Cabral v. Evangelista, 28 SCRA 1000

f. Modes of Extinguishment
* Accommodation Mortgagors – Case: Belo v. PNB, 353 SCRA 359
* Foreclosure Proceedings – Presumption of Regularity
Case: Baluyot v. Poblete, GR No. 144435, February 6, 2007
* All Embracing Clause or Blanket Mortgage Clause or Dragnet Clause
Case: PNB v. Heirs of Benedictor and Alonday, GR No. 171865,
October 12, 2016

IV. Antichresis (Arts 2132-2139)

a. Nature and Characteristics
b. Rights and Obligations of the Debtor and Creditor
Cases: Diaz v. Mendezona, 48 Phil 666
Miranda v. Imperial, 77 Phil 1066
Trillana v. Manansala, 51 OG 2911
Macapinlac v. Gutierrez Repide, 43 Phil 770

V. Concurrence and Preference of Credit (Arts 2236-2251)

[Act No. 1956, as amended Insolvency Law, FRIA, New Central Bank Act]
 a. General Provisions
b. Classification of Credits
c. Order of Preference of Credits

Cases: PDIC v. BIR, GR No. 172892, June 13, 2013

Rural Bank of Caloocan v. CA, 104 SCRA 151 (1981)
Vda. De Bautista v. Marcos, 3 SCRA 434 (1961)
Makati Leasing and Finance Corp. v. Wearever Textile, 122 SCRA 296 (1983)
Bundalian v. CA, 129 SCRA 645
Rosales v. Yboa, 120 SCRA 869
Tioseco v. CA, 143 SCRA 705
Dulay v. Cariaga, 123 SCRA 794
PNB v. CA, 140 SCRA 360
Co v. PNB, 114 SCRA 842
Samonte v. CA, 141 SCRA 189
Ramirez v. CA, 144 SCRA 292

TORTS AND DAMAGES

I. Introduction
a. Nature of Quasi-contract
i. Solutio Indebitii
ii. Negotiorum Gestio
II. Introduction
a. Nature of Quasi-delict
Case: GSIS v. Spouses Deang, GR No. 135644, September 17, 2001
b. Quasi-delict distinguished from Tort, Crime, Contract
Cases: Barredo v. Garcia and Almario, 73 Phil. 607
Padua v. Robles, 66 SCRA 485
Elcano v. Hill, 77 SCRA 98
Mendoza v. Arrieta, 91 SCRA 113
c. Scope or Sources of Law
Singson v. BPI, GR No. L-24932, June 27, 1968
American Express International, Inc. v. IAC, GR No. 72383, November 9,
1988
Consolidated Bank and Trust v. CA, GR No. L-70766, November 9, 1998
III. Elements of Quasi-delict
a. An act or omission, there being Fault or Negligence
i. Concept of Negligence
Case: Elcano v. Hill, 77 SCRA 98
Cachero v. Manila Yellow Taxicab Co., 101 Phil 523
Verzosa v. Baytan, GR No. L-14092, April 29, 1960
Rex Taxicab Co. v. Bautista, GR No. L-15322, September 30, 1960
ii. Standard of Care: Degree of Negligence
iii. Proof of Negligence: Burden of Proof
Presumption of Negligence
Doctrine of Res Ipsa Loquitur
 Cases: Africa v. Caltex, 16 SCRA 448
Republic v. Luzon Stevedoring Corp, 21 SCRA 279
Cantre v. Spouses John Go, GR No. 160889, April
27, 2007 (Medical Malpractice)
Africa v. Caltex [Phil.], Inc., 16 SCRA 448
b. Damage or Injury
c. Causal Connection between the Act or Omission and the Damage

IV. Persons Liable

a. The Tortfeasor
b. Vicarious Liability: Persons liable for Tortious Acts of Another
Case: People v. Fabro, 93 SCRA 200
Barredo v. Garcia, 73 Phil 607
Cerezo v. Tuazon, GR No. 141538, March 23, 2004
Carpio v. Doroja, GR No. 84516, December 5, 1989
Basilio v. CA, GR No. 113433, March 17, 2000
Libi v. Hon. IAC, GR No. 70880, September 18, 1992
Villanueva v. Domingo, GR No. 144274, September 14, 2004

* Subsidiary Liability of an Employer –

Cases: Pajarito v. Seneris, 87 SCRA 277
Padua v. Robles, 66 SCRA 485
Tamayo v. Aguino, 105 Phil. 949
Vargas v. Langcay, 6 SCRA 174
Perez v. Gutierrez, 53 SCRA 149
Jauniza v. Jose, 89 SCRA 306

* Subsidiary Liability of the State –

Cases: Merritt v. Govt of the Phil., 34 Phil 311
Rosete v. Auditor General, 81 Phil 453
Republic v. Palacio, 23 SCRA 899
Palafox v. Ilocos Norte, 102 Phil 1186
City of Manila v. Teotico, 22 SCRA 267
c. Nature of Liability
Cases:
Professional Services, Inc. v. Agana, GR No. 126297, January 31, 2007
(Medical Malpractice)
Ramos v. CA, GR No. 124354, December 29, 1999

d. Defenses
i. Absence of element
Cases: Bermudez v. Gonzales, GR No. 132810, December 11, 2000 –
Absence of good faith or bad faith.
Taylor v. Manila Electric Co., 16 Phil. 8
Air France v. Carrascoso, 18 SCRA 155
Lopez v. Pan-American Airways, 16 SCRA 431
Zulueta v. Pan-American Airways, 431 SCRA 397
 ii. Fortuitous Event
iii. Contributory Negligence
Cases: Rakes v. Atlantic Gulf Pacific Co., 7 Phil. 359
Cangco v. CA Manila Railroad Company., 36 Phil. 766
Borromeo v. Manila Railroad Company, 44 Phil 156
Del Prado v. Manila Electric Company, 52 Phil 900
Annonuevo Case, GR No. 130003, October 20, 2004
iv. Prescription
Case: Manliclic v. Calaunan, GR No. 150157, January 25, 2007
Professional Services, Inc. v. Agana, GR No. 126297, January
31, 2007 (Medical Malpractice)
v. Doctrine of Last Clear Chance
Case: Picart v. Smith, 37 Phil 809
Mr and Mrs Ong v. Metropolitan Water District, GR No. L-
7694, August 29, 1958
Mckee v. IAC, GR No. L-68102, July 16, 1992
De Roy v. CA, GR No. L-80718, January 29, 1988
Phoenix Construction Inc. v. IAC, GR No. L-65295, March 10,
1987
vi. Double Recovery
Case: Rafael Reyes Trucking Corp v. People, GR No. 129029, April 3,
2000
vii. Lack of jurisdiction
o Res Judicata
 Case: Mendoza v. La Mallorca Bus Co., 82 SCRA 243

V. Liability for Torts: Damages

a. In General
b. Kinds of Damages
i. Actual or Compensatory
Cases: People v. Cuenco, GR No. 143819, January 19, 2002
Cariaga v. Laguna Tayabas Bus, Co., 110 Phil. 346
ii. Moral
Cases: Gutierrez v. Gutierrez, 56 Phil 177
Viluan v. CA, 16 SCRA 742
iii. Nominal
iv. Temperate or Moderate
v. Liquidated
vi. Exemplary or corrective
Case: Victory Liner v. Gammad, GR No. 159636, November 25, 2004
vii. Attorney’s Fees
Case: Insular Life Assurance v. CA, GR No. 126850, April 28, 2004

Case: Heirs of Castro v. Bustos, 27 SCRA 327

Villa Rey Transit, Inc. v. CA, 31 SCRA 511