PEEJAY NOTES | OBLIGATIONS AND CONTRACTS | PARAS | Mon- Thur

Gabriel with Carlos Dimayuga is expressly

CHAPTER 1 prohibited by law as it is mandated for
the respondent to execute such sale to
GENERAL PROVISIONS
petitioners. Therefore, said contract
Art. 1156. An obligation is a juridical should be declared null and void. The
necessity to give, to do or not to do. lower court ruled in favour of the
respondents, ordering the dismissal of
1) Elements of an Obligation – from Latin the case on the ground that petitioners
word “obligare” – to bind (JAPO) failed to state a cause of action. Thus,
a) Juridical tie or vinculum juris or petitioners resorted to the petition of
efficient cause – reason why certiorari for the review of the said order
obligation exist before the SC.
b) Active Subject (Creditor or
Obligee) – he in whose favor the ISSUES:
obligation is constituted. 1. Whether or not the contract of sale is
c) Passive Subject (Debtor or Obligor) null and void
– he who has the duty of giving, 2. Whether or not the petitioners may
doing, or not doing. invoke their preferential rights as tenants
d) Object or Prestation – the subject
matter of the obligation. HELD/RULING:
2) Concept of Prestation 1. Yes. The R.A. 1162 as amended by R.A.
A prestation is an obligation; more 2342 and 3516 set forth the following
specifically, it is the subject matter of an conditions that of offering first the sale of
obligation — and may consist of giving a the land to petitioners and the latter' s
thing, doing or not doing a certain act. renunciation in a public instrument-were
The law speaks of an obligation as a not met when the land was sold to
juridical necessity to comply with a respondent Dimayuga. Evidently, said
prestation. There is a “juridical necessity,” sale is illegal and therefore void. The 1973
for non-compliance can result in juridical Constitution section 6, article II
or legal sanction. emphasizes the stewardship concept that
such private property is supposed to be
Mataas na Lupa Tenants held by the individual only as trustee for
Association vs Carlos Dimayuga the people in general, who are its real
and Juliana Diego Vda. owners. As a mere steward, the individual
must exercise his right to the property
De Gabriel
(L-32049, June 25, 1984) not for his own exclusive and selfish
benefit but for the good of the entire
FACTS:
community. P.D. 1157 ―Proclaiming
Petitioners filed a complaint for the
Urban Land Reform in the Philippines and
exercise of preferential rights with the
then Court of First Instance of Manila, providing for the Implementing
Branch IV alleging that the Contract of Machinery thereof superseded R.A. 1152,
Sale executed by Juliana Diez Vda. De 2342, 3516.

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2. Yes. This decree is firmly based on sec. d) From the viewpoint of persons
6 of art. II of the 1973 constitution obliged —
undoubtedly adopts and crystallizes the i) unilateral — where only one of
greater number of people criterion when the parties is bound
it speaks of tenants and residents in
NOTE: Every obligation has 2 parties; If only
declared urban land reform zones or
one of them is bound, we have a unilateral
areas without mention of the land area
obligation.
covered by such zones. The focus,
therefore, is on people who would ii) bilateral — where both parties are
benefit and not on the size of the land bound
involved. Under section 6 of which also
states that tenant-families have been NOTE: Bilateral obligations may be:
vested the right of first refusal to a) reciprocal: b) non-reciprocal (where
purchase of the land within a reasonable performance by one is nondependent upon
time and reasonable price subject to the performance by the other).
rules and regulations of the Ministry of
Human Settlements. It is further 4) Cases
supported by PD 1967 which evidently
ARTURO PELAYO VS. MARCELO LAURON
include Mataas na Lupa, the land in 12 Phil 453, January 12, 1909
controversy within the Urban Land FACTS: On November 23, 1906, Arturo
Reform Zone. Pelayo, a physician, filed a complaint against
3) Kinds of Obligations Marcelo and Juana Abella. He alleged that on
a) From the viewpoint of “sanction” — October 13, 1906 at night, Pelayo was called
i) civil obligation (or perfect to the house of the defendants to assist their
obligation) daughter-in-law who was about to give birth
ii) natural obligation to a child. Unfortunately, the daughter-in-law
iii) moral obligation (or imperfect died as a consequence of said childbirth.
obligation) Thus, the defendant refuses to pay. The
b) From the viewpoint of subject matter defendants argue that their daughter-in-law
— lived with her husband independently and in
i) real obligation — the obligation a separate house without any relation, that
to give her stay there was accidental and due to
ii) personal obligation — the fortuitous event.
obligation to do or not to do
c) From the affirmativeness and ISSUE: Whether or not the defendants
negativeness of the obligation should be held liable for the fees demanded
— by the plaintiff upon rendering medical
i) positive or affi rmative obligation assistance to the defendants’ daughter-in-
— the obligation to give or to do law.
ii) negative obligation — the
obligation not to do (which
naturally includes “not to give”)

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RULING: No. The Court held that the ISSUE: Is the mayor personally liable?
rendering of medical assistance is one of the
HELD: Yes, because his act of dismissing the
obligations to which spouses are bound by
corporal without previous administrative
mutual support, expressly determined by law
investigation and without justifiable cause is
and readily demanded. Therefore, there was
clearly an injury to the corporal’s rights. The
no obligation on the part of the in-laws but
mayor cannot hide under the mantle of his
rather on the part of the husband who is not
official capacity and pass the liability to the
a party.
municipality of which he was mayor. There
Poss v. Gottlieb are altogether too many cases of this nature,
193 N.Y.S. 418 wherein local elective officials, upon
FACTS: There were two partners engaged in assumption of office, wield their new-found
buying and reselling land. After they had power indiscriminately by replacing
bought a piece of land, one asked the other employees with their own protegés,
to sell the latter’s share to him for the price regardless of the laws and regulations
invested by the latter. The first partner, who governing the civil service. Victory at the
now completely owned the land, resold it at polls should not be taken as authority for the
a huge profit to a third person. The second commission of such illegal acts.
partner would not have sold his share had he
Leonides Pengson vs CA
known that a big offer had been made by
(GR L-65622 June 29, 1984)
such third person. The first partner alleged
FACTS: The defendant Pacific Merchandising
that he should not be blamed on the ground
Corporation is the owner of shares in the
that he, after all did not make any false
Aluminum Products (Alpro) to the extent of
concealment to his partner, that is, he did not
96% of its capital (share) holdings. PMC was
tell the latter that nobody wanted the land.
indebted to defendant Reynolds Philippines
ISSUE: May the second partner successfully Corporation, in the sum of more than
bring an action for damages against the first P800,000.00, because of which indebtedness
partner? its shares in the Alpro were pledged with
Reynolds as a collateral of its loan. Because
HELD: Yes, because the first partner is liable.
PMC needed some money, it decided to sell
He had the duty not only to make any false
its shares with the Alpro to the herein plaintiff
concealment but also to abstain from all
Leonides C. Pengson', the deed of sale being
kinds of concealment insofar as the
evidenced by Exhibit A. Among other things,
partnership was concerned. This is an
the plaintiff assumed the obligation of PMC
obligation to do (to relay all pertinent
to Reynolds, which amount however was
information).
reduced from more than P800,000.00 to only
Joaquin P. Nemenzo v. Bernabe Sabillano P500,000.00. Since the certificates covering
L-20977, Sept. 7, 1968 the shares were then held by Reynolds in
FACTS: A municipal mayor, upon assumption pledge as security for PMC obligation, the
of office, arbitrarily dismissed a corporal (a former's consent to the sale with assumption
civil service eligible) in the police force of the had to be obtained. As a security for the
municipality, without due investigation. payment to Reynolds of the aforesaid

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P500,000.00 in five (5) annual installments, with total land area of 3,002 of square
the first installment being P125,000.00. meters, in Cebu. The lease was for six years
Pengson mortgaged to Reynolds a parcel of ending in 1990, the contract contained an
land. While Pengson paid the first installment option to buy clause. Under the said option,
in the sum of P125,000.00 in three (3) the lessee had the exclusive and irrevocable
installments and a bit late, the next in right to buy 2,000 square meters 5 years from
installments which fell due were not paid for a year after the effectivity of the contract, at
in spite of demands. Consequently, Reynolds P200 per square meter. That rate shall be
foreclosed by considering an unpaid proportionately adjusted depending on the
installments due and demandable. peso rate against the US dollar, which at the
time of the execution of the contract was 14
ISSUE: Whether or not Reynolds Phil.
pesos. Close to the expiration of the contract
Corporation is entitled to surrender the said
Luis Bacus died on 1989, after Duray
certificates of stocks to Leonidas Pengson.
informed the heirs of Bacus that they are
HELD/RULING: No. Reynolds was not a willing and ready to purchase the property
party to the contract of sale between PMC under the option to buy clause. The heirs
and the herein plaintiff. This being so, it had refused to sell, thus Duray filed a complaint
no obligation whatsoever on the strength of for specific performance against the heirs of
the contract in favor of the plaintiff. Plaintiff, Bacus. He showed that he is ready and able
by the terms of the contract, however, since to meet his obligations under the contract
plaintiff undertook to pay PMC obligation to with Bacus. The RTC ruled in favor of the
Reynolds, plaintiff was under obligation with Durays and the CA later affirmed the
the PMC on account of the said undertaking. decision.
Otherwise, there is absolutely no reciprocal
ISSUE: At this point in time,were respondents
obligation between the herein plaintiff and
already obliged to make actual payment?
the appellant Reynolds. Otherwise said, the
new debtor of Reynolds was the plaintiff and HELD/RULING: Yes, Obligations under an
no longer PMC to argue now, as the plaintiff option to buy are reciprocal obligations. The
contends, that Reynolds was under an performance of one obligation is
obligation to return the certificates of stocks conditioned on the simultaneous fulfilment
pledged to it by PMC is to put the plaintiff in of the other obligation. In other words, in an
a better footing than PMC was with Reynolds. option to buy, the payment of the purchase
There is absolutely no agreement by price by the creditor is contingent upon the
Reynolds to that effect in the consent it gave execution and delivery of the deed of sale by
to the sale by PMC of the said shares in favor the debtor. When the Duray’s exercised their
of the plaintiff. option to buy the property their obligation
was to advise the Bacus’ of their decision and
Heirs of Luis Bacus et. al vs CA and Spouses
readiness to pay the price, they were not yet
Faustino and Victoriana Duray (GR 127695
obliged to make the payment. Only upon the
Dec. 3, 2001)
Bacus’ actual execution and delivery of the
FACTS: On 1984 Luis Bacus leased to deed of sale where they required to pay. The
Faustino Duray a parcel of agricultural land Durays did not incur in delay when they did

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not yet deliver the payment nor make a 2) Exclusiveness of the Enumeration
consignation before the expiration of the The enumeration by the law is
contract. In reciprocal obligations, neither exclusive; hence, no obligation exists if its
party incurs in delay if the other party does source is not one of those enumerated
not comply or is not ready to comply in a under Art. 1157. (Navales v. Rias, 8 Phil.
proper manner with what is incumbent upon 508).
him. Only from the moment one of the
Art. 1158. Obligations derived from
parties fulfills his obligation, does delay by
the other begin. law are not presumed. Only those
expressly determined in this Code or in
Art. 1157. Obligations arise from: special laws are demandable and shall
(1) Law; be regulated by the precepts of the law
(2) Contracts; which establishes them; and as to what
(3) Quasi-contracts; has not been foreseen, by the
(4) Acts or omissions punished by law; provisions of this Book.
and (5) Quasi-delicts.
1) Obligations Ex Lege
a. Examples:
1) Sources of Obligations
i. the duty to support. (Art.
a. Law (obligations ex lege) — like
291, Civil Code).
the duty to pay taxes and to
ii. the duty to pay taxes.
support one’s family.
(National Internal
b. Contracts (obligations ex
Revenue Code).
contractu) — like the duty to
repay a loan by virtue of an Canonizado v. Benitez
agreement. L-49315, L-60966, Feb. 20, 1984
c. Quasi-contracts (obligations ex The obligation of a married couple to
quasi-contractu) — like the duty support each other, under the law, generally
to refund an “over change” of subsists all throughout the marriage. If
money because of the quasi- support which had been suspended is again
contract of solutio indebiti or invoked, a simple motion in the same
“undue payment.” proceeding will suffice. There is no necessity
d. Crimes or Acts or Omissions to fi le a separate action. (Note: that in a very
Punished by Law (obligations ex real sense, a final judgment for support can
maleficio or ex delicto) — like the never be really final as the amount given may
duty to return a stolen carabao. increase, decrease, or may even cease, at
e. Quasi-delicts or Torts — least, temporarily.)
(obligation ex quasi-delicto or ex
b. No agreement is necessary before
quasi-malefi cio) — like the duty
obligation ex lege can arise, but
to repair damage due to
of course the law steps in only
negligence.
because of human actuations. For

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example, one who gambles and be done only by the Department of
wins can be compelled by the Supervision and Examination of the Central
loser to return the winnings. (Art. Bank (now Bangko Sentral).
2014). The action by the loser is
Hilario Jaravata v. Sandiganbayan
called indebitatus assumpsit.
L-56170, Jan. 31, 1984
(Leung Ben v. O’Brien, 38 Phil.
A high school principal has no legal
182).
obligation to facilitate the release of the
Vda. de Recinto v. Inciong salary differentials of the teachers under him.
77 SCRA 196 So if he receives reimbursement for his
A person who buys another’s “expenses” or as “gifts,” he cannot be
property unaware of the right thereto of adjudged guilty under the Anti-Graft Law, for
some other party is to be considered a buyer after all, he had no duty to do said facilitation.
in good faith. While he is liable, his is the
Art. 1159. Obligations arising from
liability of a person in good faith.
contracts have the force of law
Serrano v. Central Bank between the contracting parties and
L-30511, Feb. 14, 1980
should be complied with in good faith.
The Central Bank (now Bangko
Sentral) is NOT OBLIGED to pay the deposit
of a depositor made in an insolvent bank. NOTE: “Compliance in good faith” means
that we must interpret “not by the letter that
(NOTE: The Philippine Deposit Insurance
killeth but by the spirit that giveth life.” (See
Corporation — PDIC — pays up to
William Golangco Construction Corp. v. PCIB,
P100,000.00 per depositor).
485 SCRA 203 [2006].).
Santos v. Court of Appeals
L-60210, Mar. 27, 1984
The right of pre-emption (right of first
Martin v. Martin, et al.
refusal) or redemption under PD 1517 refers L-12439, May 23, 1959
only to urban land leased to a person who Where the parties to a compromise
constructs his house thereon and who has agreement signed and executed the same
leased the land for more than ten (10) years. WILLINGLY and VOLUNTARILY, they are
The law does not apply if both the land and BOUND by its terms, even if the COURT
the house belong to the lessor. In the latter before which it was made had NO jurisdiction
case, the lessor has no legal obligation to over the case. In a regime of law and order,
allow preemption or redemption. the repudiation of an agreement validly
Gonzales v. Philippine National Bank entered into cannot be made without any
GR 33320, May 30, 1983 justifi able reason.
The PNB is not an ordinary
NOTE: The approval of the court here is
corporation and therefore not governed by
immaterial; what is important is the mutual
the Corporation Law but by its own charter.
consent to the compromise.)
A stockholder of the PNB cannot, therefore,
insist on the inspection of its books. This can

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National Marketing Corp. (NAMARCO) v. this case, however, specific performance of
Tan, et al. the service will not be a proper remedy for
L-17074, Mar. 31, 1964 non-compliance. Instead, an action for
FACTS: On August 8, 1959, the Board of damages of payment of the debt should be
Directors of the FEDERATION of NAMARCO brought.
DISTRIBUTORS requested the President of
Molina v. de la Riva
the Philippines to allow the NAMARCO to
6 Phil. 12
purchase certain commodities, for
FACTS: The parties in a case agreed to go to
distribution to the members of the
court in Albay, although another Court has
FEDERATION. Upon endorsement by the
jurisdiction.
President, the NAMARCO authorized the
importation. When the Federation gave HELD: The agreement is null and void, for
NAMARCO certain cash advances for the cost jurisdiction is conferred by law, and not by
of importation, NAMARCO and the the will of the parties.
Federation executed a contract, whereby the
Bachrach v. Golingco
former sold to the latter the goods to be
39 Phil. 138
imported. Part of the goods (when they
ISSUE: If there is an express written contract
arrived) was delivered to the Federation, but for fees between an attorney and his client,
when a new Board took charge of the may the court still disregard the contract?
NAMARCO, the Board refused further
delivery to outsiders. HELD: Yes, because a contract for attorney’s
fees is different from other contracts. It may
Issue: Was NAMARCO’s action proper? be disregarded if the amount fixed is
HELD: No, because it had entered into a valid unconscionable or unreasonable,
contract with the Federation. considering the value of the work
accomplished.
De los Reyes v. Alejado
16 Phil. 499 NOTE: A claim for attorney’s fees may be
FACTS: A borrower agreed to pay his debt, asserted either in the very action in which the
and in case of non-payment, to render free services in question have been rendered, or
service as a servant. in a separate action. If the first alternative is
chosen, the court may pass upon said claim
Issue: Is the obligation valid?
even if its amount were less than the
HELD: The obligation to pay is, of course, minimum prescribed by law for the
valid and cannot be questioned but the jurisdiction of the court over the subject
undertaking to render domestic services for matter of the case for so long as the main
free is contrary to law and morals, for here, action is within the jurisdiction of said court,
slavery would result. upon the theory that the right to recover
attorney’s fees is but an INCIDENT of the case
NOTE: If, however, the “free” services will be
in which the services of counsel have been
rendered in satisfaction of the debt, the
rendered. Maria Reyes de Tolentino v.
stipulation can be given effect, for here the
Godofredo Escalono, et al., L-26556,
services will not really be gratuitous. Even in

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Jan. 24, 1960; see Palanca v. Pecson, 94 Phil. condition that for five years, the latter should
419 and Dahlke v. Vina, 51 Phil. 707. not engage in competitive needlework
manufacture. After one year, the latter left for
Conrado v. Judge Tan
reasons of health. Shortly afterwards, after
51 O.G. 2923, Jun. 1955
regaining his health, he competed with his
FACTS: In a validly made contract, some
former employer, who now seeks to restrain
provisions were later on inserted by a falsifier.
him from such competition. The defendant
Issue: Is the whole contract void? argues that the restriction is void, because it
is an unreasonable restraint of trade.
HELD: Only the additional provision should
be disregarded, and the original terms HELD: The agreement was valid, and is a
should be considered valid and subsisting. reasonable restraint, considering that it was
only for 5 years. Inasmuch as it is enforceable
Alcantara v. Alinea
and has the rule of law between the parties,
8 Phil. 111
FACTS: A borrowed from B P480 and agreed the defendant can be properly restricted.
that in case of non-payment on the date Herminia Goduco v. Court of Appeals, et
stipulated, A’s house and lot would be sold al.
to B for the amount of P480. L-17647, Feb. 28, 1964
If upon the promise of the son-in-law of a
Issue: Is the stipulation valid?
seller, an agent sells on commission a parcel
HELD: Yes, and if A does not pay, A should of land to a buyer, said buyer, not having
sell the house and lot for P480. The promised to give said commission, is NOT
agreement is not contrary to law. (See also liable therefor. Payment of the commission
Quizana v. Redugerio, 50 O.G. 2444, June, must be sought from whoever made the
1954). promise to pay such amount, namely, the
son-in-law of the seller.
NOTE: It seems to the author that the
stipulation may be considered void as being Molave Motor Sales, Inc.
a pactum commissorium, unless A be v. Laron and Geminiano
allowed, instead of selling, to select the L-65377, May 28, 1984
option of still being indebted, with When an employee in a car repair shop has
consequential damages or interest. his own car repaired therein and purchases
certain spare parts, his liability therefor is
Ganzon v. Judge Sancho governed by the Civil Code, not the Labor
GR 56450, Jul. 23, 1983 Code. Therefore, it is the civil courts, not the
If a mortgage is substituted by a guaranty or
Ministry (Department) of Labor, that has
surety bond without the consent of all the
jurisdiction over the case.
required parties, the contract may be said to
be impaired. Borcena, et al. v. IAC
GR 70099, Jan. 7, 1987
Ollendorf v. Abrahamson Contracts for attorney’s services stand upon
38 Phil. 585 an entirely different footing from contracts
FACTS: Ollendorf, needlework manufacturer,
for the payment of compensation
hired Abrahamson for two years, on the

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for any other services. An attorney is not Vicente Aldaba v. Court of Appeals, et al.
entitled, in the absence of express contract, L-21676, Feb. 28, 1969
to recover more than a reasonable FACTS: Dr. Vicente Aldaba and his daughter,
compensation for his services. And even Dr. Jane Aldaba, rendered services to Belen
when an express contract is made, the court Aldaba, a rich woman of Malolos, Bulacan for
can ignore it and limit the recovery of 10 years without receiving any
reasonable compensation if the amount of compensation. It was admitted that for such
the stipulated fee is found by the court to be services, the two doctors did NOT expect to
unreasonable. This is a very different rule be paid.
from that announced in Sec. 1091 of the Civil Issues: Was there a contract, whether express
Code of Spain (now Art. 1159, Civil Code) or implied? Was Belen obliged to
with reference to the obligation of contracts compensate the two doctors?
in general, where it is said that such
obligation has the force of law between the HELD: There was no contract, whether
contracting parties. express or implied, and therefore Belen was
not obliged to compensate the two doctors;
PNB v. Se, Jr. no express contract, for nothing on this point
70 SCAD 323 was agreed upon; and no implied contract,
(1996)
for the doctors did not expect to be paid for
As contracts, warehouse receipts must be
their services. When a person does not
respected by authority of Art. 1159 of the
expect to be paid for his services, there
Civil Code. A prior judgment holding that a
cannot be a contract implied in fact to give
party is a warehouseman obligated to deliver
compensation for such services. To give rise
sugar stocks covered by the Warehouse
to an implied contract to pay for services,
Receipts does not necessarily carry with it a
said services must have been rendered by
denial of the warehouseman’s lien over the
one party in expectation that the other party
same sugar stocks. Even in the absence of a
would pay for them and must have been
provision in the Warehouse Receipts, law and
accepted by the other party with knowledge
equity dictate the payment of the
of that expectation. (See 58 Am. Jur., p. 512,
warehouseman’s lien pursuant to Sections 27
and the cases cited therein).
and 31 of the Warehouse Receipts Law. A
party is in estoppel in disclaiming liability for Art. 1160. Obligations derived from
the payment of storage fees due the quasi-contracts shall be subject to the
warehouseman while claiming to be entitled provisions of Chapter 1, Title XVII, of
to the sugar stocks covered by the subject
this Book.
Warehouse Receipts on the basis of which it
anchors its claim for payment or delivery of
the sugar stocks. Imperative is the right of the 1) ‘Quasi-Contract’ Defined
warehouseman to demand payment of his
A quasi-contract is that juridical relation
lien because he loses his lien upon goods by
resulting from a lawful, voluntary, and
surrendering possession thereof.
unilateral act, and which has for its purpose
the payment of indemnity to the end that no

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one shall be unjustly enriched or benefi ted who paid was NOT under obligation to do so;
at the expense of another. (See Art. 2142, (b) the payment was made by reason of an
Civil Code). essential mistake of fact. These requisites are
NOT present because Caballero has a right to
2) The 2 Principal Kinds
be paid and no mistake was made. The fact
a. negotiorum gestio (unauthorized
that the City itself was NOT a party is
management) - This takes place
immaterial for a judgment against a
when a person voluntarily takes
municipal officer, sued in his official capacity,
charge of another’s abandoned
BINDS the City. The acts of the duly
business or property without the
authorized officials bind the principal — the
owner’s authority. (Art. 2144, Civil
city.
Code).
b. solutio indebiti (undue payment) UST Cooperative Store v. City of Manila,
– This takes place when et al.
something is received when there L-17133, Dec. 31, 1965
is no right to demand it, and it FACTS: The UST Cooperative Store, which is
was unduly delivered thru tax-exempt under RA 2023 (The Philippine
mistake. The recipient has the Non-Agricultural Cooperative Act) because
duty to return it. (Example: If I let its assets are not more than P500,000 paid
a storekeeper changes my P50.00 taxes to the City of Manila, not knowing that
bill and by error he gives me it was tax-exempt.
P50.60, I have the duty to return Issue: May it successfully ask for a refund?
the extra P0.60). (See Art. 2154,
Civil Code). HELD: Yes, because the payment is not
considered voluntary in character. Clearly,
City of Cebu v. Piccio and Caballero the payment was made under a mistake. (See
L-13012 and 14876, Dec. 31, 1960 51 Am. Jur. 1023).
FACTS: Caballero, an employee of the City of
Cebu who has been illegally dismissed, sued Lirag Textile Mills, Inc. v. Reparations
for back wages by way of mandamus and Commission
made as defendants thereto the City Mayor, 79 SCRA 675
If the price of certain goods is determined,
the Municipal Board, the City Treasurer, and
considering the rate of exchange at the time
the City Auditor of Cebu City, BUT the City of
of its procurement, there is no unjust
Cebu itself was not made a defendant. When
enrichment involved.
Caballero was later paid, the City of Cebu
brought an action for the REFUND of the
payment on the ground that the payment
was illegal because the City of Cebu had NOT
been made a party to Caballero’s mandamus
case.

HELD: The City of Cebu CANNOT recover.

The claim for refund is predicated on “solutio
indebiti.” The requisites for this are: (a) he

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Art. 1161. Civil obligations arising guardian can be held civilly liable unless
from criminal offenses shall be the latter was diligent in his task of taking
governed by the penal laws, subject to care of the insane. If there is no guardian,
the provisions of Article 2177, and of or if said guardian (in the proper case) is
insolvent, the property of the insane man
the pertinent provisions of Chapter 2,
can be made liable. (See Arts. 12 and 101,
Preliminary Title, on Human Relations, R.P.C.).
and of Title XVIII of this Book,
regulating damages. Sales v. Balce
L-14414, Apr. 27, 1960
FACTS: The son of the plaintiff was killed by
1) Obligations Ex Delicto or Ex Malefi cio the minor son (below 15) of the defendant.
Governing rules The son who acted with discernment was
convicted, but had no money.
a. Pertinent provisions of the
Revised Penal Code and other Issue: Are his parents subsidiarily liable?
penal laws, subject to the HELD: Art. 101 of the Revised Penal Code
provisions of Art. 2177, Civil Code. prescribes the subsidiary liability of the
b. Chapter 2, Preliminary Title, on parents in case of a minor over 9 but under
Human Relations (of the Civil 15 who DID NOT act with discernment. If he
Code). acted WITH discernment, the Revised Penal
c. Title 18 of Book IV of the Civil Code is silent because he is criminally liable.
Code — on damages. In that case, resort is made to the general law
which is the Civil Code, Art. 2080 of which
Badiong v. Judge Apalisok
applies. Under said Article, the parents would
GR 60151, Jun. 24, 1983
Although the defendant in a criminal case be held liable unless they can prove due
has already pleaded guilty, and has fi led an supervision. To hold that the Civil Code does
application for probation, the court should not apply because it covers only obligations
still set the case for hearing to receive the arising from negligence or quasi-delicts
offended party’s evidence on the civil liability would result in an ABSURDITY for, while in a
of the accused. If this would not be done, the negligent act, the parents are subsidiarily
offended party will be denied due process. liable for the damage caused by their son, no
liability would attach if the damage is caused
Elcano v. Hill with criminal intent. It is clear, therefore, that
77 SCRA 98 applying Art. 2080 of the Civil Code, the
An accused in a criminal case may be sued
parents would ordinarily be liable.
CIVILLY whether or not he is found guilty or
is acquitted. But the victim cannot recover 3) What Civil Liability Arising from a
damages in both cases (only in one). Crime Includes
a. restitution;
2) Liability of an Insane Criminal
b. reparation of the damage caused;
An insane man who commits a crime is
c. indemnification for consequential
exempted from criminal liability, but his
damages. (Art. 104, Rev.

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 PEEJAY NOTES | OBLIGATIONS AND CONTRACTS | PARAS | Mon- Thur
Penal Code). extinguished both the personal and the
pecuniary penalties.
Buenaventura Belamala v. Marcelino
Polinar Issue: Is the civil liability also extinguished?
L-24098, Nov. 18, 1967 Should the case be dismissed?
FACTS: The defendant in a criminal case for
HELD: The civil liability here is not
physical injuries died before final judgment.
extinguished, because independently of the
Issue: Is his civil liability extinguished?
criminal case, the accused was civilly liable to
HELD: No, his civil liability is not extinguished Torrijos. If after receiving the purchase price
for, after all, in Art. 33 of the Civil Code, there from Torrijos, he failed to deliver the
can, in the case of physical injuries, still be an property (even before selling it again to De
independent civil action. The action will be Guia), there would as yet be no estafa, but
directed against the administrator of the there is no question of his civil liability thru
estate, the obligation having become the an action by Torrijos either for specific
obligation of the heirs; but of course the performance plus damages, or rescission
liability cannot exceed the value of the plus damages. Death is not a valid cause for
inheritance. (Art. 774, Civil Code). the extinguishment of a civil obligation. Had
Incidentally, as already said, the remedy is an the only basis been the commission of estafa,
action against the administrator, and not it is clear that the extinguishment of the
merely a claim against the estate. The reason criminal responsibility would also extinguish
is because the purpose is to recover damages the civil liability, provided that death comes
for an injury to person or property (hence, before final judgment. Furthermore, under
extra-contractual as it arose from either a Arts. 19, 20, and 21 of the Civil Code, the
crime or a tort). (See Aguas v. Llemos, L- accused would be civilly liable independently
18107, Aug. 30, 1962). Had the liability been of the criminal liability for which he can be
contractual, a mere claim against the estate held liable. And this civil liability exists
would have sufficed. (See Leung Ben v. despite death prior to final judgment of
O’Brien, 38 Phil. 182). conviction. The case, therefore, cannot as yet
be dismissed.
Lamberto Torrijos v. Court of Appeals
L-40336, Oct. 24, 1975 Co San v. Director of Patents, et al.
FACTS: In 1964, Torrijos purchased a lot from L-10563, Feb. 23, 1961
Diamnuan. Later, Torrijos learned that in A judgment of acquittal in a criminal action
1969, Diamnuan sold the same lot to De Guia. for fraudulent registration of a trademark in
Torrijos initiated an estafa complaint against violation of Sec. 18 of Act No. 666, cannot be
the seller, who was eventually convicted by invoked as res judicata in a civil action based
the CFI (now RTC). During the pendency of on unfair and malicious competition on the
the case in the Court of Appeals, the accused ground that the facts of the latter are
Diamnuan died. His lawyer fi led a motion to different and have not been passed upon in
dismiss the case alleging that the death of his the judgment rendered in the former case.
client, prior to final judgment, (See Ogura v. Chua and Confesor, 50 Phil.

471).

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