AnaNotes - Civ 2

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Art." 1156." An" obligation" is" a" juridical" Art.& 1427.& When& a& minor& between& eighteen& and&
necessity"to"give,"to"do"or"not"to"do." twenty)one& years& of& age,& who& has& entered& into& a&
contract& without& the& consent& of& the& parent& or&
" guardian,&voluntarily&pays&a&sum&of&money&or&delivers&
Kinds!of!Obligations!as!to!basis!&!enforceability! a&fungible&thing&in&fulfillment&of&the&obligation,&there&
! shall&be&no&right&to&recover&the&same&from&the&obligee&
Civil"Obligation" who&has&spent&or&consumed&it&in&good&faith.&(1160A)&
Fone! which! has! a! binding! force! in! law,! and! which! &
gives!to!the!obligee!or!creditor!the!right!of!enforcing! Art.& 1428.& When,& after& an& action& to& enforce& a& civil&
it!against!the!obligor!or!debtor!in!a!court!of!justice.! obligation& has& failed& the& defendant& voluntarily&
! performs& the& obligation,& he& cannot& demand& the&
Natural"Obligation" return&of&what&he&has&delivered&or&the&payment&of&the&
Fone!which!cannot!be!enforced!by!action,!but!which! value&of&the&service&he&has&rendered.&
is! binding! on! the! party! who! makes! it! in! conscience! &
and!according!to!the!natural!law.! Art.&1429.&When&a&testate&or&intestate&heir&voluntarily&
! pays&a&debt&of&the&decedent&exceeding&the&value&of&the&
Title&III.&)&NATURAL&OBLIGATIONS& property,& which& he& received& by& will& or& by& the& law& of&
& intestacy& from& the& estate& of& the& deceased,& the&
Art.& 1423.& Obligations& are& civil& or& natural.& Civil& payment& is& valid& and& cannot& be& rescinded& by& the&
obligations& give& a& right& of& action& to& compel& their& payer.&
performance.&Natural&obligations,&not&being&based&on& &
positive& law& but& on& equity& and& natural& law,& do& not& Art.&1430.&When&a&will&is&declared&void&because&it&has&
grant&a&right&of&action&to&enforce&their&performance,& not&been&executed&in&accordance&with&the&formalities&
but& after& voluntary& fulfillment& by& the& obligor,& they& required& by& law,& but& one& of& the& intestate& heirs,& after&
authorize&the&retention&of&what&has&been&delivered&or& the& settlement& of& the& debts& of& the& deceased,& pays& a&
rendered&by&reason&thereof.&Some&natural&obligations& legacy& in& compliance& with& a& clause& in& the& defective&
are&set&forth&in&the&following&articles.& will,&the&payment&is&effective&and&irrevocable.&
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Art.&1424.&When&a&right&to&sue&upon&a&civil&obligation&
Thus,!when!an!action!has!prescribed!in!accordance!
has&lapsed&by&extinctive&prescription,&the&obligor&who&
with! the! statute! of! limitations,! a! natural! obligation!
voluntarily& performs& the& contract& cannot& recover&
still! subsists,! although! the! civil! obligation! is!
what& he& has& delivered& or& the& value& of& the& service& he&
extinguished.!
has&rendered.&
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Essential!Requisites!of!Obligations!
Art.& 1425.& When& without& the& knowledge& or& against&
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the& will& of& the& debtor,& a& third& person& pays& a& debt&
1. Active"subject"
which&the&obligor&is&not&legally&bound&to&pay&because&
Falways!a!person,!juridical!or!natural!
the& action& thereon& has& prescribed,& but& the& debtor&
a.!!creditor!–!obligation!to!give!
later& voluntarily& reimburses& the& third& person,& the&
b.!!obligee!–!obligation!to!do!
obligor&cannot&recover&what&he&has&paid.&
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2. Passive"subject"
Art.& 1426.& When& a& minor& between& eighteen& and&
Fmust!be!determinate!or!determinable!
twenty)one& years& of& age& who& has& entered& into& a&
a.!!debtor!–!obligation!to!give!
contract& without& the& consent& of& the& parent& or&
b.!!obligor!–!obligation!to!do!
guardian,& after& the& annulment& of& the& contract&
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voluntarily&returns&the&whole&thing&or&price&received,&
3. Object"of"the"obligation"
notwithstanding& the& fact& the& he& has& not& been&
In! a! contract! of! sale! for! example,! the! object! of!
benefited& thereby,& there& is& no& right& to& demand& the&
the! obligation! is! the! conduct! of! the! vendor! in!
thing&or&price&thus&returned.&
delivering!the!car.!!
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The!car,!on!the!other!hand,!is!the!object!of!the!
&
prestation.!!!
Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!
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Atty.!Uribe! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Please!DO!NOT!reproduce!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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Art." 1159." Obligations" arising" from"

CONTRACTS" have" the" force" of" law" between"
the" contracting" parties" and" should" be"
complied"with"in"good"faith.""
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! Who&has&the&burden&of&proof?!
! The! OBLIGEE! has! the! burden! of! proof! because!
4. Vinculum*juris* obligations!arising!from!law!are!not!presumed.!
The!vinculum!juris!is!the!legal!tie.!It!consists!of! !
the! enforceability! of! the! obligation.! If! the! This! provision! presupposes! that! the! contract! is!
debtor! does! not! conform,! the! creditor! has! the! valid!and!enforceable.!!!
power! to! go! to! court! to! make! the! debtor! !
perform!–!coercive.!!! When& are& pre)contractual& obligations& binding& and&
* when&do&they&give&rise&to&liability?&
5. Causa" !
The! object! of! an! obligation! answers! the! If!the!offer!by!one!party!is!clear!and!definite,!leading!
question!What&is&owed?! the! offeree! in! good! faith! to! incur! expenses! in! the!
The!causa!answers!the!question! expectation! of! entering! into! the! contract! and! the!
Why&is&it&owed?& withdrawal! of! the! offer! is! without! any! legitimate!
! cause.!
For! example,! A! will! deliver! a! car! to! B! since! A!
expects! to! get! P300,000.! The! !P300,000! is! the! Art." 1160." Obligations" derived" from" QUASID
causa!of!the!obligation.!!! CONTRACTS"shall"be"subject"to"the"provisions"
" of"Chapter"1,"Title"XVII,"of"this"Book.""
6. Form!
Form!means!some!manifestation!of!intent.!!! !
! QuasiDcontracts"
Sources!of!Civil!Obligations! a. Negotiorum!Gestio!
! b. Solutio!Indebiti!
! Art."1157."Obligations"arise"from:"
c. Other!QuasiFcontracts!
"""""(1)"Law;"" !
"""""(2)"Contracts;""
What&is&a&quasi)contract?&
"""""(3)"QuasiDcontracts;""
It! is! a! juridical! relation! which! arises! from! certain!
"""""(4)"Acts"or"omissions"punished"by"law;" lawful,! voluntary! and! unilateral! acts! by! virtue! of!
"""""(5)"QuasiDdelicts."
which! the! parties! become! bound! to! each! other!
based!on!the!principle!that!no!one!shall!be!unjustly!
enriched!or!benefit!at!the!expense!of!another.!
Art."1158." Obligations" derived"from"LAW"are"
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not" presumed." Only" those" expressly"
A!quasiFcontract!is!not" an" implied" contract.!There!is!
determined"in"this"Code"or"in"special"laws"are"
no! meeting! of! the! minds! between! parties.! A! juridical!
demandable," and" shall" be" regulated" by" the"
relation! is! created! by! a! quasiFcontract! so! that! nobody&
precepts" of" the" law" which" establishes" them;" shall&enrich&himself&at&the&expense&of&another.!!
and"as"to"what"has"not" been" foreseen," by"the" !
provisions"of"this"Book."" Is&the&enumeration&exclusive?!
There! is! always! a! concurrence! between! the! law! No.!!Article!2143!states!that:! The&provisions&for&quasi)
which! establishes! or! recognizes! it! &! an! act! or! contracts& in& this& Chapter& do* not* exclude& other& quasi)
condition! upon! which! the! obligation! is! based! or! contracts,& which& may& come& within& the& purview& of& the&
predicated.! preceding&article.&
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! This!case!falls!under!“other&quasi)contracts”&
NEGOTIORUM" GESTIO" ! (obligation! incident! to! the! Article"2145"
officious! management! of! the! affairs! of! other! The! law! requires! that! the! degree! of! diligence! to! be!
persons)! exercised!by!the!officious!manager!is!that!exercised!by!
! a! good" father" of" a" family.! This! means! the! ordinary!
Art.* 2144.& Whoever& voluntarily& takes& charge& of& the& degree!of!care!which!a!reasonable!and!prudent!person!
agency& or& management& of& the& business& or& property& of& will! do! given! the! same! circumstances! the! officious!
another,&without&any&power&from&the&latter,&is&obliged&to& manager! is! in.! If! he! causes! damage! to! the! property! of!
continue&the&same&until&the&termination&of&the&affair&and& the! owner,! he! shall! be! liable! to! such! owner.! An!
its& incidents,& or& to& require& the& person& concerned& to& officious! manager! is! in! a! sense! an! intruder! in! the!
substitute&him,&if&the&owner&is&in&a&position&to&do&so.&This& business!or!the!property!of!the!owner.!However,!if!his!
juridical& relation& does* not* arise& in& either& of& these& intrusion!is!with!the!objective!of!preserving,!managing!
instances:& and! taking! care! of! the! property! without! any! intent! to!
& gain,! a! quasiFcontract! is! created.! He! cannot! escape!
(1) When&the&property&or&business&is&not* neglected& liability!by!stating!that!there!was!no!obligation!on!his!
or*abandoned;&& part! to! take! over! the! property! or! business! in! the! first!
(2) &If& in& fact& the& manager* has* been* tacitly* place.! Once! he! takes! over,! he! is! charged! with! the!
authorized*by*the*owner.& responsibility!to!take!care!of!it.!!
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In& the& first& case,& the& provisions& of& Articles& 1317,& 1403,& On!the!other!hand,!if!indeed!the!owner!suffers!damage!
No.&1,&and&1404&regarding&unauthorized&contracts&shall& due!to!the!negligence!or!fault!of!the!officious!manager,!
govern.& the! court! can! increase! or! moderate! the! indemnity!
& according!to!the!circumstances.!!
In&the&second&case,&the&rules&on&agency&in&Title&X&of&this& !
Book&shall&be&applicable.&! Article"2146"
! The! officious! manager! can! delegate! the! management!
Illustration:! of! the! properties! to! another.! However,! he! will! be!
A! abandons! his! property,! a! Mango! plantation,! and! his! responsible! for! the! acts! of! the! said! delegate.! Such!
business! therein.! B! decides! to! manage! the! business! person! to! whom! the! management! has! been! delegated!
and! the! property! so! that! the! business! will! earn! upon! shall! likewise! be! directly! responsible! to! the! owner.!
harvest!time.!B&does&this&without&any&authority&from&A.!! The! liability! of! two! or! more! officious! managers! is!
B! therefore! becomes! an! officious" manager! without! solidary.! The! owner! can! seek! the! full! amount! of!
expectation! of! any! profit! or! remuneration.! B! must! damages!from!anyone!of!the!officious!managers.!!
continue! managing! the! property! or! the! business! until! !
it!is!terminated.!He!can!also!require!A!to!have!him!(B)! In!cases!of!fortuitous&events!(Article"2147)!
substituted!if!A!is!in!a!position!to!do!so.!! The!officious!manager!shall!be!liable!for!any!fortuitous!
! event:!
If! the! property! is! not" abandoned,! all! acts! of! A! (1) If! he! undertakes! risky! operations! which! the!
unauthorized! and! any! contract! entered! into! by! him! owner!was!not!accustomed!to!embark!upon;!
shall!be!generally!unenforceable.!! (2) !If!he!has!preferred!his!own!interest!to!that!of!
! the!owner;!
If!B!were!authorized,!the!law!on!agency!shall!apply.!! (3) !If! he! fails! to! return! the! property! or! business!
! after!demand!by!the!owner;!
Question:! (4) !If!he!assumed!the!management!in!bad!faith!
The! owner! left! his! house! for! a! short! vacation,! the! !
very! night! they! left,! their! house! was! burned,! the! Illustration:!
neighbors! saved! some! of! their! appliances.! Is& there& The! first* case! is! when! the! officious! manager!
negotiorum&gestio&in&this&case?& undertakes! risky! operations! which! the! owner! is! not!
! accustomed! to! embark! upon.! Thus,! if! the! business! of!
No,!the!appliances!were!not!under!the!management! the! owner! is! simply! providing! a! warehouse! for! dolls!
of! the! gestor! and! there! was! no! abandonment! and! and! other! toys,! and! the! officious! manager! decides! to!
allow! the! storing! of! highly! inflammable! materials! in!
neglect!of!the!property.!
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the!warehouse,!the!officious!manager!shall!be!liable!if! However,!if!the!said!teacher!manages!the!said!farming!
the! warehouse! is! burned! due! to! a! fortuitous! event,! business!to!save!it!from!imminent!danger,!he!will!not!
such!as!the!striking!of!lightning.!! be!liable!for!damages!caused!by!a!fortuitous!event.!!
The! second* case! is! when! the! officious! manager! has! !
preferred! his! own! interest! to! that! of! the! owner.! For! Article"2149"
example,! the! officious! manager! takes! over! the! The&ratification&of&the&management&by&the&owner&of&the&
business! of! the! owner! of! warehousing! goods.! In! the! business&produces&the&effects&of&an&express&agency,&even&
meantime,! the! officious! manager! also! stores! some! of! if&the&business&may&not&have&been&successful.&&
his! goods! in! the! warehouse.! In! the! event! that! a! flood! !
occurs,! and! he! first! saves! his! goods,! before! the! goods! Ratification!means!that!the!owner"agrees!to!whatever!
of! the! owner! and! the! latter’s! clients,! from! being! the! officious! manager! has! done.! It! cures! even! the!
destroyed,! the! officious! manager! will! be! liable! for! the! defects,!which!the!officious!manager!has!committed.!If!
loss!due!to!the!fortuitous!event.!! ratification! happens,! the! law! on! agency! applies! and!
! even! if! the! business! is! not! successful,! such! agency! by!
The!third*situation!is!when!the!officious!manager!fails! virtue!of!ratification!shall!be!recognized.!!
to!return!the!property!or!business!after!demand!by!the! !
owner.! Once! the! owner! demands! the! return! of! the! Article"2150"
business,! the! officious! manager! should! readily! return! The! owner! must" always" reimburse! the! officious!
it.! He! has! no! right! to! keep! it! for! himself.! Hence,! if! the! manager! for! all! expenses,! which! have! inured! for! the!
property!is!destroyed!by!fortuitous!event,!the!officious! benefit!or!advantage!of!the!owner.!!
manager! will! be! held! liable! for! his! act! of! unduly! !
retaining!what!is!not!his.!! Hence,! if! the! officious! manager! pays! taxes! on! the!
! property! so! that! it! will! not! be! foreclosed,! the! owner!
The! fourth* situation! is! when! the! officious! manager! must!reimburse!the!officious!manager!for!the!payment!
assumes! the! management! in! bad! faith.! For! example,! made!by!the!latter.!!
the! officious! manager! takes! over! the! warehousing! !
business!of!the!owner!so!that!he!can!get!the!clients!of! Even*if*no*benefit*has*been*derived!but!the!officious!
the! owner! for! his! (officious! manager’s)! own! manager! takes! over! to! save! the! property! or! business!
warehousing!business.!Such!officious!manager!shall!be! from! imminent! loss,! the! officious! manager! should!
liable! for! the! loss! of! the! warehousing! business! of! the! likewise!be!reimbursed!for!obligations!incurred!for!the!
owner!caused!by!a!fortuitous!event.!! owner’s! interest,! including! useful! and! necessary!
! expenses.!!
Article"2148" !
Generally,!the!happening!of!a!fortuitous!event!affecting! Article"2151"
an! obligation! excuses! the! person! charged! from! Whether! or! not! there! is! benefit! and! whether! or! not!
performing! the! obligation.! In! case! of! negotiorum& there!is!imminent!danger!are!immaterial"for!purposes!
gestio,! Article! 2148! does" not" excuse! the! officious! of! reimbursing! the! officious! manager! of! useful& and&
manager!from!liability!due!to!fortuitous!event.!! necessary& expenses! and! of! payment! made! in!
! furtherance!of!the!owner’s!interest:!!
The!officious!manager!has!no!business!taking!over!the! a) if!the!officious!manager!has!acted!in!good!faith!
abandoned!property!or!business!of!somebody!if!he!has! and!!
no! knowledge! or! is! not! competent! to! undertake! the! b) the!property!or!business!is!intact,!ready!to!be!
management.!Hence,!if!a!teacher!takes!on!the!farming! returned!to!the!owner.!!
business!of!another,!he!shall!be!liable!for!any!damage! !
caused! by! a! fortuitous! event.! He! should! have! been! The!very!fact!that!the!property!is!intact!means!that!the!
prudent! enough! to! know! that! he! cannot! possibly! officious! manager! has! prudently! and! with! due!
undertake!something,!which!he!has!no!competence!in.!! diligence!managed!the!property.!!
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If! another! person! who! is! competent! to! take! over! the! Article"2152"
farming!business!decides!to!manage!the!same!and!the! The&officious&manager&is&personally&liable&for&contracts&
said!teacher!prevents!him!from!doing!so!on!the!ground! which& he& has& entered& into& with& third& persons,& even&
that!he!has!been!there!first,!such!teacher!will!be!liable! though& he& acted& in& the& name& of& the& owner,& and& there&
if! the! property! is! destroyed! by! a! fortuitous! event.!
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shall&be&no&right&of&action&between&the&owner&and&third& HELD:! Yes.! Art! 2154! of! the! New! Civil! Code! is!
persons.&These&provisions&shall&not&apply:&& applicable.! For! this! article! to! apply,! the! following!
(1)& If& the& owner& has& expressly& or& tacitly& ratified& the& requisites! must! concur:! 1)! that! he! who! paid! was! not!
management;&or&& under! obligation! to! do! so;! and! 2)! that! payment! was!
(2)&When&the&contract&refers&to&things&pertaining&to&the& made!by!reason!of!an!essential!mistake!of!fact.!
owner&of&the&business.&&& !
If! the! officious! manager! decides! to! manage! the! !
property! or! business,! and! for! this! reason,! he! buys! There! was! a! mistake,! not! negligence,! in! the! second!
some! decorations! to! be! placed! in! the! property,! such! remittance.! It! was! evident! by! the! fact! that! both!
officious!manager!shall!be!the!only!one!responsible!for! remittances!have!the!same!reference!invoice!number.!
the!payment!of!such!decorations!even!if!he!acts!in!the! !
name! of! the! owner.! The! seller! of! the! decorations! has! Article"2155!!
no! right! of! action! against! the! owner! in! the! event! the! Payment& by& reason& of& a& mistake& in& the& construction& or&
officious!manager!does!not!pay!for!them.!However,!the! application&of&a&doubtful&or&difficult&question&of&law&may&
owner!shall!pay!for!them!if!he!has!expressly!or!tacitly! come&within&the&scope&of&the&preceding&article.&&
ratifies! the! act! of! the! officious! manager.! If! the! buying! !
and! selling! of! decoration! is! the! very! object! of! the! Solutio! indebiti,! generally! involves! only! a! mistake! of!
business!of!the!owner,!the!owner!shall!be!liable.!! fact.!However,!under!Article!2155,!a!mistake!of!law!is!
! allowed! if! the! mistake! is! brought! about! by! the!
Article"2153" construction! or! application! of! a! doubtful! or! difficult!
The!management!is!extinguished:!! question!of!law.!!
(1) When! the! owner! repudiates! it! or! puts! an! end! !
thereto;! Illustration:!
(2) !When! the! officious! manager! withdraws! from! Gonzalo" Puyat" and" Sons," Inc." vs." City" of" Manila!
the! management,! subject! to! the! provisions! of! where!the!appellee,!by!mistake!paid!taxes!which!were!
Article!2144;!! not!due!as!the!appellant!was!exempted!from!the!same,!
(3) By! the! death,! civil! interdiction,! insanity! or! and! the! said! mistake! in! payment! was,! among! others,!
insolvency! of! the! owner! or! the! officious! the!result!of!a!complicated!correlation!and!application!
manager.!! of! various! municipal! and! national! laws,! the! Supreme!
! Court!ruled!that!there!was!solutio!indebiti!by!stating:!!
The! management! is! extinguished! if! the! owner! !
repudiates! it! or! puts! an! end! to! it.! The! owner! still! has! In& refutation& of& the& above& stand& of& appellants,& appellee&
the! power! of! dominion! over! his! property! or! his! avers&that&the&payments&could&not&have&been&voluntary.&
business.!Hence!his!decision!must!prevail!over!that!of! At& most,& they& were& paid& “mistakenly& and& in& good& faith”&
the! officious! manager.! If! owner! does! not! want! the! and&“without&protest&in&the&erroneous&belief&that&it&was&
officious!manager,!this!decision!should!prevail.!! liable& thereof.”& Voluntariness& is& incompatible& with&
! protest&and&mistake.&It&submits&that&this&is&a&simple&case&
! of&“solutio&indebiti.”&&
SOLUTIO" INDEBITI! (recovery! of! what! has! been! !
improperly!paid)! Appellants! do! not! dispute! the! fact! that! appelleeF
" company! is! exempted! from! the! payment! of! the! tax! in!
Art."2154&& question.! This! is! manifest! from! the! reply! of! appellant!
If& something& is& received& when& there& is& no& right& to& City! Treasurer! stating! that! sales! of! manufactured!
demand&it,&and&it&was&unduly&delivered&through&mistake,& products! at! the! factory! site! are! not! taxable! either!
the&obligation&to&return&it&arises.& under! the! Wholesalers’! Ordinance! or! under! the!
! Retailers’! Ordinance.! With! this! admission,! it! would!
Illustration:! seem!clear!that!the!taxes!collected!from!appellee!were!
Andres"v."Mantrust" paid,!thru!an!error!or!mistake,!which!places!said!act!of!
Whether&or&not&the&private&respondent&has&the&right&to& payment! within! the! pale! of! the! new! Civil! Code!
recover& the& second& $10,000& remittance& it& had& delivered& provision! on! solutio! indebiti.! The! appellant! City! of!
to&petitioner& Manila,! at! the! very! start,! notwithstanding! the!
! Ordinance!imposing!the!Retailer’s!Tax,!had!no!right!to!
demand!payment!thereof.!!

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! of! his! (X’s)! watch.! X! must! claim! the! watch! within! one!
Appellee!categorically!stated!that!the!payment!was!not! month!from!the!advice.!If!X!does!not!claim!the!watch,!B!
voluntarily! made! (a! fact! found! also! by! the! lower! is! excused! from! all! liability! if,! A,! because! of! solutio!
court),!but!on!the!erroneous!belief,!that!they!were!due.! indebiti,! claims! back! the! watch,! and! B! gives! back! the!
Under! this! circumstances,! the! amount! paid,! even! watch!to!A.!However,!if!at!the!time!A!gives!the!watch!of!
without! protest! is! recoverable.! “If! the! payer! was! in! B,! the! latter! has! reasonable! grounds! to! believe! that! it!
doubt!whether!the!debt!was!due,!he!may!recover!if!he! has!been!acquired!unlawfully,!B!can!return!the!same!to!
proves!that!it!was!not!due”!(Art.!2156,!NCC).!Appellee! A.!!
had! duly! proved! that! taxes! were! not! lawfully! due.!
There! is,! therefore,! no! doubt! that! the! provisions! of!
solutio& indebiti,! of! the! new! Civil! Code,! apply! to! the! Article"2159"
admitted!facts!of!the!case.!! Whoever& in& bad& faith& accepts& an& undue& payment,& shall&
! pay&legal&interest&if&a&sum&of&money&is&involved,&or&shall&
Article"2156"" be& liable& for& fruits& received& or& which& should& have& been&
If&the&payer&was&in&doubt&whether&the&debt&was&due,&he& received&if&the&thing&produces&fruits.&&
may&recover&if&he&proves&that&it&was&not&due.&& !
! If! the! creditor! knows! that! the! payment! is! not! yet! due!
For! example,! a! debtor! pays! a! creditor! prematurely! and! payment! is! tendered! to! him,! he! must! inform! the!
because!he!is!not!sure!whether!the!debt!is!already!due.! debtor!that!payment!is!not!yet!due.!Should!the!creditor!
The! creditor! accepts! it! .! The! debtor! can! recover! what! accept!such!premature!payment,!he!is!therefore!in!bad!
he!has!paid!prior!to!the!due!date!of!the!debt!provided! faith! and! shall! be! liable! for! interest! from! the! time! he!
that!the!demand!for!reimbursement!is!not!made!after! accepts! payment! up! to! the! time! he! returns! it! upon!
the! debt! has! become! due.! This! is! a! case! of! solutio& demand!of!the!debtor.!!
indebiti.&& !
! Article"2160"
Article"2157" He& who& in& good& faith& accepts& an& undue& payment& of& a&
The& responsibility& of& two& or& more& payees,& when& there& thing&certain&and&determinate&shall&only&be&responsible&
has&been&payment&of&what&is&not&due,&is&solidary.&& for&the&impairment&or&loss&of&the&same&or&its&accessories&
! and&accessions&insofar&as&he&has&thereby&been&benefited.&
An!illustration!of!this!article!is!as!follows:!A!is!indebted! If&he&has&alienated&it,&he&shall&return&the&price&or&assign&
to! B! and! C! for! P2,000.! The! obligation! is! of! a! solidary! the&action&to&collect&the&sum.&&&
nature! such! that! A! can! pay! only! to! one! of! them! the! !
whole!obligation,!and!the!debt!is!considered!paid!as!to! An!illustration!of!this!article!is!as!follows:!A!is!obliged!
both.!Thus,!if!A!pays!B!the!amount!of!P2,000,!the!debt! to!give!B!a!house!on!January!1,!1997.!Believing!that!it!
is! considered! paid.! It! is! up! to! C! to! claim! from! B! his! was! due! on! August! 1,! 1996,! A! delivered! the! house! on!
share!of!the!credit!which!is!P1,000.!If!there!is!payment! said!date.!B!likewise!did!not!know!that!the!house!was!
by! mistake,! A! can! recover! from! either! B! or! C! the! still! due! on! January! 1,! 1997.! B! was! in! good! faith.! On!
amount! which! he! has! paid.! This! is! true,! even! if! in! the! November! 1996,! the! house! was! rented! in! the! amount!
meantime,!C!has!not!yet!obtained!his!P1,000.!! of! P2,000! per! hour! by! a! movie! producer! for! a!
! particular! motion! picture! and,! while! shooting,! the!
Article"2158" kitchen!was!accidentally!burned.!After!the!shooting!of!
When!the!property!delivered!or!money!paid!belongs!to! the!motion!picture,!B!was!paid!the!rent!in!the!amount!
a! third! person,! the! payee! shall! comply! with! the! of! P30,000! for! 15! hours.! On! December! 1996,! A!
provisions!of!Article!1984.!! discovered! that! the! house! was! not! yet! due! and!
! demanded! its! return.! B! can! return! the! house! and! pay!
Illustration:! the! amount! of! the! kitchen! which! has! been! impaired,!
A!is!obliged!to!pay!B!his!obligation!by!giving!B!a!watch.! because!he!(B)!has!been!benefited!by!the!house!when!
Despite! the! fact! that! the! payment! is! not! yet! due,! A! he!had!it!rented.!!
gives!B!the!watch!which!turns!out!to!be!stolen!from!X.! !
At! the! time! of! his! receipt! of! the! watch,! B! has! no! Article"2161"
obligation! to! ask! A! questions! as! to! who! owns! the! As& regards& the& reimbursement& for& improvements& and&
watch.!However,!if!B!later!finds!out!that!X!really!owns! expenses&incurred&by&him&who&unduly&received&the&thing,&
the!watch,!B!must!advise!X!that!he!(B)!is!in!possession! the&provisions&of&Title&V&of&Book&II&shall&govern.&
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!! A!debtor!who!pays!in!solutio&indebiti!may!recover!what!
Article"2162" he!has!paid!by!mistake.!However,!the!person!to!whom!
He& shall& be& exempt& from& the& obligation& to& restore& who,& the! payment! has! been! made! can! show! that! such!
believing& in& good& faith& that& the& payment& was& being& payment!is!a!gift!or!a!donation!by!showing!the!proper!
made&of&a&legitimate&and&subsisting&claim,&destroyed&the& evidence!like!a!valid!deed!of!donation.!!
document,&or&allowed&the&action&to&prescribe,&or&gave&up& !
the&pledges,&or&cancelled&the&guaranties&for&his&right.&He& OTHER"QUASIDCONTRACTS"(Articles!2164F2175)!
who& paid& unduly& may& proceed& only& against& the& true& !
debtor& or& the& guarantors& with& regard& to& whom& the& Article"2164"
action&is&still&effective.&& When,!without!the!knowledge!of!the!person!obliged!to!
! give! support,! it! is! given! by! a! stranger,! the! latter! shall!
Illustration:! have!a!right!to!claim!the!same!from!the!former,!unless!
A!is!indebted!to!B!in!the!amount!of!P1,000.!It!is!an!oral! it! appears! that! he! gave! it! out! of! piety! and! without!
contract! of! loan! and! hence! it! prescribes! in! 6! years! intention!of!being!repaid!
from!the!time!it!falls!due.!!
! Illustration:!
X!is!the!guarantor!of!the!indebtedness.!As!guarantor,!X! “MV&Princess&of&the&Stars”&incident!
will! only! pay! B! if! B! has! unsuccessfully! exhausted! all! One!of!the!deceased!caused!by!the!sinking!of!the!ship!
efforts!to!collect!from!A!upon!the!maturity!of!the!debt.!! was! buried! by! a! 3rd! person,! A.! ! A! then! asks! B,!
! deceased’s! aunt! for! reimbursement! on! the! burial!
The! debt! becomes! due! and! A! fails! to! pay! B.! B! has! not! expenses.! ! Can& B& be& compelled& to& reimburse& the& burial&
yet! exhausted! all! efforts! to! collect! from! A.! Believing! expenses?&
that!he!is!principally!liable!also!for!the!debt,!X!pays!B! &
on!the!fifth!year!since!the!debt!has!become!due.!B!also! No.& Only! persons! obliged! to! give! support! can! be!
believed!in!good!faith!that!he!could!collect!from!X!and! compelled!to!reimburse.!
hence!accepts!the!payment!from!X.!!
! Article"2165"
In! the! meantime,! more! than! six! years! have! already! When& funeral& expenses& are& borne& by& a& third& person,&
lapsed! since! the! debt! has! become! due.! B! does! not! without& the& knowledge& of& those& relatives& who& were&
demand!from!A!anymore!because!he!has!already!been! obliged& to& give& support& to& the& deceased,& said& relatives&
paid!by!X!on!the!fifth!year.!! shall&reimburse&the&third&person,&should&the&latter&claim&
! reimbursement&
In!this!case,!X!paid!B!by!mistake.!X!cannot!recover!the! &
money! paid! by! mistake! from! B! because,! if! this! is! The!following!are!obliged!to!support!each!other:!!
allowed,!B!cannot!anymore!recover!payment!from!A!as! 1) the!spouses;!
B’s!cause!of!action!against!A!has!prescribed.!X!can!only! 2) legitimate!ascendants!and!descendants;!
recover!from!A,!the!true!debtor.!Since!a!quasiF!contract! 3) parents! and! their! legitimate! children! and! the!
of! solutio& indebiti! exists! from! the! time! X! made! the! legitimate! and! illegitimate! children! of! the!
payment! on! the! fifth! year,! he! has! six! years! from! such! latter;!
payment! within! which! to! file! an! action! against! A,! the! 4) parents!and!their!illegitimate!children!and!the!
principal!debtor.!This!is!so!because,!considering!that!a! legitimate! and! illegitimate! children! of! the!
quasiFcontract!prescribes!after!six!years!from!the!time! latter;!and!!
the!cause!of!action!accrues,!the!action!to!collect!from!A! 5) legitimate!brothers!and!sisters,!whether!of!full!
is!still!effective.!! or!halfFblood.!!
! !
Article"2163!! Whenever! two! or! more! persons! are! obliged! to! give!
It&is&presumed&that&there&is&a&mistake&in&the&payment&if& support,! the! liability! shall! devolve! upon! the! following!
something& which& had& never& been& due& or& had& already& persons!in!the!following!order:!!
been& delivered& was& delivered;& but& he& from& whom& the& 1) the!spouse;!
return&is&claimed&may&prove&that&the&delivery&was&made& 2) the!descendants!in!the!nearest!degree;!!
out&of&liberality.&& 3) the!ascendants!in!the!nearest!degree;!and!
! 4) !the!brothers!and!sisters.!!
!
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Illustration:! property,& undertakes& to& do& the& necessary& work,& even&
A! was! the! daughter! of! X! and! Y.! A! died.! G! was! the! one! over&his&objection,&he&shall&be&liable&to&pay&the&expenses.!!
who! shouldered! the! expenses! for! A’s! funeral.! If! G! did! !
this! benevolent! act! as! an! act! of! charity,! X! and! Y! need! For! example,! a! municipal! ordinance! prohibits! the!
not!reimburse!him.!If!G!intended!to!be!reimbursed,!he! throwing! of! spoiled! food! outside! of! the! house! in! a!
can!only!be!paid!after!demanding!payment!from!X!and! waste!can!without!any!plastic!bag.!A!does!not!abide!by!
Y.!! the! said! ordinance! and! continually! throws! spoiled!
Article"2166" food! in! a! wooden! garbage! container.! To! prevent! the!
When& the& person& obliged& to& support& an& orphan,& or& an& spread! of! disease,! the! municipal! government! can! put!
insane&or&other&indigent&person&unjustly&refuses&to&give& the! spoiled! food! inside! a! plastic! bag! first! and! then!
support& to& the& latter,& any& third& person& may& furnish& provide!the!owner!of!the!house!with!a!garbage!can!at!
support& to& the& needy& individual,& with& right& of& the!owner’s!expense!even!if!he!does!not!want!to.!!
reimbursement&from&the&person&obliged&to&give&support.& !
The& provisions& of& this& article& apply& when& the& father& or& Article"2170"
mother& of& a& child& under& eighteen& years& of& age& unjustly& When& by& accident& or& other& fortuitous& event,& movables&
refuses&to&support&him.&& separately& pertaining& to& two& or& more& persons& are&
! commingled& or& confused,& the& rules& on& co)ownership&
Article"2167"" shall&be&applicable.&
When& through& an& accident& or& other& cause& a& person& is& !!
injured& or& becomes& seriously& ill,& and& he& is& treated& or& The! commingling! here! is! unintentional! as! it! is! the!
helped&while&he&is&not&in&a&condition&to&give&his&consent& result!of!an!accident!or!fortuitous!event.!!
to&a&contract,&he&shall&be&liable&to&pay&for&the&services&of& !
the& physician& or& other& person& aiding& him,& unless& the& Article"2171"
service&has&been&rendered&out&of&pure&generosity.&& The&rights&and&obligations&of&the&finder&of&lost&personal&
! property&shall&be&governed&by&Articles&719&and&720.&&
Illustration:! !
A! is! bumped! by! a! car! and! is! seriously! injured.! He! Article"2172"
becomes! unconscious.! X! sees! A! and! brings! him! to! the! The& right& of& every& possessor& in& good& faith& to&
hospital.! A’s! injuries! need! immediate! treatment! but,! reimbursement& for& necessary& and& useful& expenses& is&
since! he! is! in! coma,! he! cannot! give! his! consent.! The! governed&by&Article&546.&&
doctor! nevertheless! treats! his! injuries! lest! it! becomes! !
more! serious.! When! A! recovers,! he! has! the! obligation! Article"2173"
to!pay!the!services!of!the!doctor!unless!the!latter!does! When& a& third& person,& without& the& knowledge& of& the&
not!want!to!be!paid.!! debtor,& pays& the& debt,& the& rights& of& the& former& are&
! governed&by&Articles&1236&and&1237.&&
Article"2168" "
When& during& a& fire,& flood,& storm& or& other& calamity,& Article"2174"
property& is& saved& from& destruction& by& another& person& When& in& a& small& community& a& majority& of& the&
without&the&knowledge&of&the&owner,&the&latter&is&bound& inhabitants&of&age&decide&upon&a&measure&for&protection&
to&pay&the&former&just&compensation.&& against&lawlessness,&fire,&flood,&storm&or&other&calamity,&
! any& one& who& objects& to& the& plan& and& refuses& to&
Illustration:! contribute&to&the&expenses&but&is&benefited&by&the&project&
The! house! of! A! starts! to! catch! fire! but! A! is! not! in! the! as& executed& shall& be& liable& to& pay& his& share& in& the&
house.!When!the!garage!of!the!house!is!already!on!fire,! expenses.&&
Z!goes!inside!the!burning!garage!and!pushes!the!car!of! !
A!out!of!the!same!without!the!knowledge!of!A.!The!car! For! example,! the! people! of! a! certain! barrio! decide! to!
is! saved! from! destruction.! In! this! case,! A! is! bound! to! engage! a! security! force! to! protect! their! community!
pay! Z! just! compensation! unless! Z! does! not! want! to! because! of! rampant! lawlessness.! For! this! reason,! the!
accept!it.!! people! agree! to! contribute! to! the! expenses! of! this!
! security! force.! G! however! refuse! to! make! any!
Article"2169" contribution.! In! the! event! that! the! security! force!
When&the&government,&upon&the&failure&of&any&person&to& apprehend!robbers!intending!to!rob!the!house!of!G,!G!
comply& with& health& or& safety& regulations& concerning& should! pay! his! share! in! the! expenses! for! the!

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community’s! engagement! of! the! security! force! to! In!exempting!circumstances:!
protect!the!people!from!criminals.!! GR:!There!is!civil!liability!
! !!!E:!paragraph!4!
Article"2175" Any&person&who,&while&performing&a&lawful&act&with&due&
Any& person& who& is& constrained& to& pay& the& taxes& of& care,&causes&an&injury&by&mere&accident&without&fault&or&
another& shall& be& entitled& to& reimbursement& from& the& intention&of&causing&it.&
latter.&& &
!
For!example,!A!is!the!neighbor!of!G!whose!property!is!
about! to! be! forfeited! to! the! government! because! of! Article"1167"
unpaid! real! estate! taxes.! A! can! pay! the! taxes! but! G! If& the& person& obliged& to& do& something& fails& to& do& it,& the&
must!reimburse!him.!! same&shall&be&executed&at&his&cost.&&
&
Art." 1161." Civil" obligations" arising" from" This& same& rule& shall& be& observed& if& he& does& it& in&
CRIMINAL"OFFENSES"shall"be"governed"by"the" contravention& of& the& tenor& of& the& obligations.&
Furthermore,& it& may& be& decreed& that& what& has& been&
penal" laws," subject" to" the" provisions" of"
poorly&done&be&undone.&&
Article"2177," and"of" the" pertinent" provisions"
!
of" Chapter" 2," Preliminary" Title," on" Human" When! the! obligation! to! do! can! only! be! performed! by!
Relations," and" of" Title" XVIII" of" this" Book," the! debtor,! he! cannot! be! compelled! to! do! so! by! force,!
regulating"damages."" so!the!only!remedy!is!damages.&&
!
General"Rule:" Article"2177"
If! you! commit! a! crime,! you! are! liable! both! criminally! Responsibility& for& fault& or& negligence& under& the&
and!civilly.! preceding& article& is& entirely& separate& and& distinct& from&
!
the& civil& liability& arising& from& negligence& under& the&
Exception:"
Penal& Code.& But& the& plaintiff& cannot& recover& damages&
If!there!is!no!private!offended!party.!
twice&for&the&same&act&or&omission&of&the&defendant&&
!
!
Article" 104! of! the! RPC! states! that:! ! The! civil! liability!
A!person,!while!not!criminally!liable!may!still!be!civilly!
established!includes:!
liable.!!When!the!acquittal!is!based!on!the!ground!that!
1. Restitution!(restoration)!
the! guilt! of! the! accused! has! not! been! proven! beyond!
2. Reparation" of" damage" caused! (amount! of!
reasonable!doubt,!the!plaintiff!has!the!right!to!institute!
damages:!price!of!the!thing;!sentimental!value)!!
a!civil!action!for!damages.!!
3. Indemnification"for"consequential"damages"
(those!suffered!by!family!or!3rd!persons)!
! Art." 1162." Obligations" derived" from" QUASID
Note!that!it!is!not!absolute!that!when!a!person!is! DELICTS" shall"be" governed" by"the"provisions"
criminally!liable,!all!these!3!would!arise.! of" Chapter" 2," Title" XVII" of" this" Book," and" by"
! special"laws."
Illustration:! !
In!justifying!circumstances:! Article"2176"
GR:!No!civil!liability! Whoever&by&act&or&omission&causes&damage&to&another,&
!!!E:!paragraph!4! there&being&fault&or&negligence,&is&obliged&to&pay&for&the&
Any&person&who,&in&order&to&avoid&an&evil&or&injury,&does& damage& done.& Such& fault& or& negligence,& if& there& is& no&
not&act&which&causes&damage&to&another,&provided&that& pre)existing&contractual&relation&between&the&parties,&is&
the&following&requisites&are&present;&& called&a&quasi)delict&and&is&governed&by&the&provisions&of&
& & &&& this&Chapter.&
First.&That&the&evil&sought&to&be&avoided&actually&exists;& !
Second.&That&the&injury&feared&be&greater&than&that&done& !
to&avoid⁢&&& !
Third.&That&there&be&no&other&practical&and&less&harmful& !
means&of&preventing&it.&
!
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QuasiFdelict! is! a! civil! law! term! whereas! tort! is! a! Elements"of"a"QuasiDdelict"
common!law!term.! To! sustain! a! claim! based! on! a! quasiFdelict,! the!
! following!requisites!must!concur:!
In!quasiDdelict,!the!obligation!arises!only!when!there! 1. A! duty! on! the! part! of! the! defendant! to! protect!
is!a!violation.!!Without!violation,!there!is!no!obligation.!! the! plaintiff! from! the! injury! of! which! the! latter!
It!is!the!breach!itself!which!gives!rise!to!the!obligation.! complains;!
! 2. A!failure!to!perform!that!duty;!and!
In! contracts,! there! is! already! an! obligation! which! 3. An!injury!to!the!plaintiff!through!such!failure!
exists!prior!to!or!even!without!a!breach.!The!breach!of! !
the!contract!is!immaterial!to!the!legal!obligation.! Test"of"Negligence"
Example:! Contract! of! sale! of! watch.! If! both! parties! Would!a!prudent!man,!in!the!position!of!the!person!on!
perform! their! obligation,! the! contract! is! extinguished.! whom! negligence! is! attributed,! foresee! harm! to! the!
There!is!no!breach,!but!there!is!an!obligation.!! person! injured! as! a! reasonable! consequence! of! the!
!! course!about!to!be!pursued?!
(Compare& the& above& example& with& the& one& below)! "
!Example:! Driving! recklessly,! A! hits! a! child.& When& did& Kinds"of"Negligence"
the& obligation& came& to& being?! When! there! was! injury! 1. Culpa& Aquiliana! or! negligence! as! a! source! of!
due! to! negligence.! (Negligence! per! se! does! not! give! obligation!
rise! to! a! quasiFdelict! unless! there! is! injury.)! !Breach! Fgoverned!by!Articles!2176F2194!
and! quasiFdelict! are! inseparable.! But! contract! and! Fno!contractual!relation!at!all!
breach!may!be!separable.!!! !
! 2. Culpa& Contractual! or! negligence! in! the!
Article! 2176! is! not! applicable! when! there! is! a! preF performance!of!a!contractual!obligation!
existing!contractual!relation.!!However,!when!such!act! Fgoverned!y!Article!1179!and!all!on!contracts!
of! breaching! the! contract! is! also! tortious,! the! !
contractual! relation! will! not! bar! the! recovery! of! Requisites"of"liability"(imputed):"
damages.! 1. the!fault!of!negligence!of!the!defendant!
! 2. the!damage!suffered!or!incurred!by!the!plaintiff!
Are*contracts*and*quasiBdelicts*mutually*exclusive?** 3. the!relation!of!the!fault!or!negligence!and!
(When! two! events! are! mutually! exclusive,! the! damage!incurred!by!the!plaintiff!
occurrence! of! one! precludes! the! other.! ! In! short,! they! !
cannot!occur!at!the!same!time)! Damage&
! It!is!the!loss,!hurt!or!harm!which!results!from!injury.!!It!
No.! ! In! Gutierrez" v." Gutierrez,! there! was! a! collision! differs! from! damages! which! term! refers! to! the!
between!a!bus!and!a!car!wherein!the!passenger!of!the! recompense!or!compensation!awarded!for!the!damage!
bus!was!injured.!!! suffered.!
! !
It! was! proven! that! the! driver! of! the! car! was! a! minor! Is*fault*the*same*as*negligence?*
and! an! incompetent! driver.! ! The! passenger! sued! No.! Negligence! is! just! an! omission! of! the! diligence!
against!them!all.!!The!SC!held!that!the!bus!driver,!bus! required! whereas! fault! covers! intentional! and!
owner! and! the! driver! of! the! car! (through! his! father)! unintentional!acts.!!!
are!jointly!and!severally!liable!to!the!passenger.!!! !
! One! word! which! would! cover! both! fault! and!
The!liability!of!the!owner!of!the!bus!and!the!bus!driver! negligence!is!Culpa!
rests!on!that!of!a!contract.!!! "
! Fault"
On! the! other! hand,! the! father! is! responsible! for! the! It! is! that! condition! where! a! person! acts! in! a! way! or!
acts! of! his! son! and! is! therefor! responsible! for! the! manner! contrary! to! what! normally! should! have! been!
negligence!of!the!minor.!!Here,!it!is!clear!that!breach!of! done! and! ultimately! causing! damage! or! injury! to!
contract!and!quasiFdelict!are!separate.! another.! (Prescribing& the& wrong& medicine& to& a& patient&
! causing&the&latter&to&suffer&injuries)&
" !
" !

10"
!
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!
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Negligence" !
It! consists! in! the! omission! to! do! acts! required! under! Cangco"vs."Manila"Railroad"Co."
the! attendant! circumstances! resulting! in! damage! or! !
injury! to! another.! (Failure& of& the& pilot& to& provide& Balane:! ! There! are! two! important! principles! that! we!
sufficient& fuel& to& the& helicopter& causing& it& to& crash& and& learn!fr.!this!case:!!!
injure&its&passengers)! !
! The!difference!in!concept!bet.!contract!&!quasiFdelict!is!
Balane:&&& that! in! a! contract,! there! is! a! preFexisting! juridical! tie!
The!Code!Commission!did!not!choose!to!use!tort.!!This! bet.!the!parties.!!Violation!of!the!contract!gives!rise!to!
is! because! tort! does! not! exactly! have! the! same! liability!but!not!to!the!juridical!tie.!!Juridical!tie!is!not!
meaning!as!quasiFdelict.!!! borne!by!a!violation.!!In!quasiFdelict,!it!is!precisely!the!
! wrongful! act! w/c! gives! rise! to! the! juridical! tie.!!
Tort![broader]!covers!intentional!torts!which!in!quasiF Liability!&!juridical!tie!are!simultaneous.!
delict!is!considered!as!civil!liability!arising!from!acts!or! !
omissions!punishable!by!law.!!There!are!some!QD!w/c! Contracts!&!quasiFdelicts!create!two!concentric!circles!
are!not!covered!by!tort.!!! w/!quasiFdelict!as!the!bigger!circle.!!!
! !
A!tort!is!a!civil!wrong!(an!actionable!wrong)!consisting! [Note:!!There!is!a!little!mistake!in!Cangco.!!The!SC!said!
of! a! violation! of! a! right! or! a! breach! of! duty! for! which! that! the! driver! can! be! sued! under! culpa! contractual.!!
the! law! grants! a! remedy! in! damages! or! other! relief.! This!is!wrong.!!The!driver!cannot!be!sued!as!he!has!no!
The!right!is!created!by!law!in!favor!of!a!person!called!a! privity!of!contract!w/!the!passenger.]!
creditor!to!compel!another!called!a!debtor!to!observe! !
duty! or! a! prestation! either! to! render! what! is! due! him! Facts:! ! Cangco! was! an! EE! of! MRR! Co.! ! He! takes! the!
or!to!refrain!from!causing!him!injury.! train! going! home! from! work.! ! That! day! he! alighted!
! from!the!train!while!it!was!still!slightly!in!motion.!!He!
Classes" of" Torts" According" to" Manner" of" landed!on!the!elevated!platform!on!top!of!some!sacks!
Commission" of! watermelon! which! made! him! fall! violently,! rolled!
" away!from!the!platform!under!the!moving!train!where!
1. Intentional"Torts" he! badly! crashed! and! lacerated! his! right! arm.! ! It!
a. tortfeasor!desires!to!cause!the! happened!at!night!bet!7F8pm!and!d!station!was!poorly!
consequences!of!his!act,!or! lit.! Cangco’s! arm! was! amputated! twice.! ! The!
b. tortfeasor!believes!that!the!consequences! seriousness! of! his! injury! made! him! file! a! case! for!
are!substantially!certain!to!result!from!it! damages!vs!MRR!Co.!
c. Articles!26,!32!&!33!(CC)! !
! Held:"
2. Negligent"Torts" It! can! not! be! doubted! that! the! employees! of! the!
a. tortfeasor’s! conduct! merely! creates! a! railroad! company! were! guilty! of! negligence! in! piling!
foreseeable!risk!of!harm!which!may!or!may! these! sacks! on! the! platform! in! the! manner! above!
not!occur;!! stated;!that!their!presence!caused!the!plaintiff!to!fall!as!
b. Article!2176!(CC)! he! alighted! from! the! train;! and! that! they! therefore!
! constituted! an! effective! legal! cause! of! the! injuries!
3. Strict"Liability"Torts" sustained! by! the! plaintiff.! It! necessarily! follows! that!
Articles!2183!&!2187!(CC)! the! defendant! company! is! liable! for! the! damage!
! thereby! occasioned! unless! recovery! is! barred! by! the!
Q:! ! If&there&is&a&contract&between&the&parties,&can&there& plaintiff's!own!contributory!negligence.!!
be& a& quasi)delict& committed& by& one& against& the& other& !
regarding&the&area&covered&by&the&contract?&&& !!!!!!!!!!It!is!important!to!note!that!the!foundation!of!the!
& legal! liability! of! the! defendant! is! the! contract& of&
A:!!If!you!look!at!Art.!2176,!you!get!the!impression!that! carriage,! and! that! the! obligation! to! respond! for! the!
if!there!is!a!contract!between!the!parties,!they!cannot! damage! which! plaintiff! has! suffered! arises,! if! at! all,!
be! liable! for! quasiFdelict! on! an! area! covered! by! the! from! the! breach! of! that! contract! by! reason! of! the!
contract.!!The!case!of!Cangco!has!not!really!resolve!this! failure! of! defendant! to! exercise! due! care! in! its!
controversy.! performance.! That! is! to! say,! its! liability! is! direct! and!

11"
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immediate,! differing! essentially,! in! legal! viewpoint! !! !! !! !! !! The! test! by! which! to! determine! whether! the!
from! that! presumptive! responsibility! for! the! passenger!has!been!guilty!of!negligence!in!attempting!
negligence! of! its! servants,! [RESPONDEAT! SUPERIOR],! to! alight! from! a! moving! railway! train,! is! that! of!
which!can!be!rebutted!by!proof!of!the!exercise!of!due! ordinary! or! reasonable! care.! It! is! to! be! considered!
care! in! their! selection! and! supervision.! (presumption! whether! an! ordinarily! prudent! person,! of! the! age,! sex!
juris! tantum,! rebuttable).! ! Imputed! liability! in! NCC! is! and! condition! of! the! passenger,! would! have! acted! as!
not! applicable! to! obligations! arising! ex! contractu,! but! the!passenger!acted!under!the!circumstances!disclosed!
only! to! extraFcontractual! obligations,! or! to! use! the! by!the!evidence.!This!care!has!been!defined!to!be,!not!
technical! form! of! expression,! that! article! relates! only! the!care!which!may!or!should!be!used!by!the!prudent!
to!culpa!aquiliana!and!not!to!culpa!contractual.! man! generally,! but! the! care! which! a! man! of! ordinary!
! prudence! would! use! under! similar! circumstances,! to!
! Every! legal! obligation! must! of! necessity! be! avoid! injury."! (Thompson,! Commentaries! on!
extraFcontractual! or! contractual.! ExtraFcontractual! Negligence,!vol.!3,!sec.!3010.)!
obligation! has! its! source! in! the! breach! or! omission! of! !
those! mutual! duties! which! civilized! society! imposes! RULING:!!!!!!!!!!!…that!the!train!was!barely!moving!when!
upon!it!members,!or!which!arise!from!these!relations,! plaintiff!alighted!is!shown!conclusively!by!the!fact!that!
other! than! contractual,! of! certain! members! of! society! it!came!to!stop!within!six!meters!from!the!place!where!
to!others,!generally!embraced!in!the!concept!of!status.!! he! stepped! from! it.! Thousands! of! person! alight! from!
The! fundamental! distinction! between! obligations! of! trains! under! these! conditions! every! day! of! the! year,!
this! character! and! those! which! arise! from! contract,! and!sustain!no!injury!where!the!company!has!kept!its!
rests! upon! the! fact! that! in! cases! of! nonFcontractual! platform! free! from! dangerous! obstructions.! There! is!
obligation! it! is! the! wrongful! or! negligent! act! or! no!reason!to!believe!that!plaintiff!would!have!suffered!
omission! itself! which! creates! the! vinculum! juris,! any! injury! whatever! in! alighting! as! he! did! had! it! not!
whereas! in! contractual! relations! the! vinculum! exists! been! for! defendant's! negligent! failure! to! perform! its!
independently! of! the! breach! of! the! voluntary! duty! duty!to!provide!a!safe!alighting!place.!
assumed! by! the! parties! when! entering! into! the! !
contractual!relation.! CASE:!!Where!there!could!still!be!QD!even!when!there!
The!contract!of!defendant!to!transport!plaintiff!carried! is!contract!of!carriage!!!
with!it,!by!implication,!the!duty!to!carry!him!in!safety! Gutierrez"vs."Gutierrez"
and! to! provide! safe! means! of! entering! and! leaving! its! !
trains! (contract! of! carriage).! That! duty,! being! FACTS:!
contractual,! was! direct! and! immediate,! and! its! nonF A! truck! and! a! car! collided! on! a! narrow! bridge.! ! A!
performance! could! not! be! excused! by! proof! that! the! passenger! of! the! truck! was! injured! and! filed! a! case.!!
fault!was!morally!imputable!to!defendant's!servants.! The!owner!of!the!truck!was!!made!defendant!although!
! his! driver! was! driving! the! truck! at! that! time! and! he!
!! !! !! !! !! The! railroad! company's! defense! involves! the! was!not!a!passenger!of!the!truck.!!The!owner!of!the!car!
assumption! that! even! granting! that! the! negligent! was! also! made! defendant! although! the! driver! of! the!
conduct!of!its!servants!in!placing!an!obstruction!upon! car! at! the! time! of! the! collision! was! his! son,! 18! yrs.! of!
the!platform!was!a!breach!of!its!contractual!obligation! age,! w/! other! members! of! the! family! accommodated!
to!maintain!safe!means!of!approaching!and!leaving!its! therein,!but!not!the!car!owner.!!
trains,! the! direct! and! proximate! cause! of! the! injury! !
suffered! by! plaintiff! was! his! own! contributory! HELD:! The! court! found! both! drivers! negligent.! ! The!
negligence!in!failing!to!wait!until!the!train!had!come!to! owner! of! the! truck! was! made! liable! for! culpa!
a! complete! stop! before! alighting! (Doctrine! of! contractual,!under!the!contract!of!carriage.!!The!owner!
comparative! negligence,! Rakes! doctrine).! ! If! the! of! the! car! was! made! liable! under! Art.! 2180,! imputed!
accident! was! caused! by! plaintiff's! own! negligence,! no! liability!for!culpa!aquiliana.!
liability! is! imposed! upon! defendant's! negligence! and! !
plaintiff's! negligence! merely! contributed! to! his! injury,! !
the! damages! should! be! apportioned.! It! is,! therefore,! !
important!to!ascertain!if!defendant!was!in!fact!guilty!of! !
negligence.! !
! !
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12"
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! FRAUD! NEGLIGENCE! Doctrine" of" proximate" cause! !! is! that! which,! in!
! dolo! Culpa! natural! and! continuous! sequence,! unbroken! by! any!
Nature!of!Act! involves! mere!want!of! efficient! intervening! cause,! produces! injury! and!
willfulness!or! care!or!diligence,! without!which!the!result!would!not!have!occurred.!!
deliberate! not!voluntary!act! !
intent!to!cause! or!omission! The!exemplification!by!the!Court!in!one!case!is!simple!
damage!or! and! explicit;! viz:! "(T)he! proximate! legal! cause! is! that!
injury!to! acting! first! and! producing! the! injury,! either!
another! immediately! or! by! setting! other! events! in! motion,! all!
Gives!rise!to!Ø! the!act!itself! the!want!or!care! constituting!a!natural!and!continuous!chain!of!events,!
or!diligence! each! having! a! close! causal! connection! with! its!
! immediate! predecessor,! the! final! event! in! the! chain!
A!single!act!may!be!a!crime!and!a!QD!at!the!same!time;! immediately! affecting! the! injury! as! a! natural! and!
(Art.!100,!RPC)! probable! result! of! the! cause! which! first! acted! under!
Injured!party!cannot!recover!damages!twice!for!the! such!circumstances!that!the!person!responsible!for!the!
same!act!or!omission!of!defendant;!(must!choose!1! first! event! should,! as! an! ordinarily! prudent! and!
Rem.)! intelligent!person,!have!reasonable!ground!to!expect!at!
! the!moment!of!his!act!or!default!that!an!injury!to!some!
! person!might!probably!result!therefrom."!
! QUASIFDELICT! CRIME! "
As!to!nature!of! private!right! public!right! "
Right!violated! "
Is!a!Wrong! the!individual! the!State! "
against! "
Criminal! not!needed! Necessary! "
Intent!
Legal!Basis!for!
"
Broad! penal!law!
liability! "
necessary!
Liability!for! every!QD!gives! there!are!crimes! "
Damages! rise!to!liability!for! without!civil! "
damages! liability! "
Form!of! reparation!for! punishment/fine "
Redress! injury!suffered/! /imprisonment! "
indemnification/! "
compensation! "
Quantum!of! preponderance! beyond! "
Evidence! reasonable!doubt! "
Compromise! can!be! criminal!liability! "
compromised! can!never!be! "
compromised! "
! ! "
Requisites"for"liability:!(onus)! "
1. Wrongful!act!or!omission!imputable!to!the! "
defendant!by!reason!of!his!fault!or!negligence;! "
2. Damage!or!injury!proven!by!the!person!claiming! "
recovery;! "
3. A!direct!causal!connection!between!the!negligent! "
act!and!the!injury.! "
! "
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Compliance"with"Obligations" !
! Article"1246""
Article"19" When& the& obligation& consists& in& the& delivery& of& an&
Every& person& must,& in& the& exercise& of& his& rights& and& in& indeterminate& or& generic& thing,& whose& quality& and&
the& performance& of& his& duties,& act& with& justice,& give& circumstances&have&not&been&stated,&the&creditor&cannot&
everyone&his&due,&and&observe&honesty&and&good&faith.& demand& a& thing& of& superior& quality.& Neither& can& the&
! debtor&deliver&a&thing&of&inferior&quality.&The!purpose&of&
Article"1163" the& obligation& and& other& circumstances& shall& be& taken&
Every& person& obliged& to& give& something& is& also& into&consideration.&&
obliged&to&take&care&of&it&with&the&proper&diligence&of& !
a& good& father& of& a& family,& unless& the& law& or& the& Article"1460"
stipulation&of&the& parties& requires&another&standard& A&thing&is&determinate&when&it&is&particularly&designated&
of&care.& or&physical&segregated&from&all&others&of&the&same&class.&&
! &
Article"1164" The& requisite& that& a& thing& be& determinate& is& satisfied& if&
The& creditor& has& a& right& to& the& fruits& of& the& thing& at& the& time& the& contract& is& entered& into,& the& thing& is&
from& the& time& the& obligation& to& deliver& it& arises.& capable& of& being& made& determinate& without& the&
However,&he&shall&acquire&no&real&right&over&it&until& necessity& of& a& new& or& further& agreement& between& the&
the&same&has&been&delivered&to&him.&& parties&
! &
Article"1165" Article"440"
When&what&is&to&be&delivered&is&a&determinate&thing,& The& ownership& of& property& gives& the& right& by& accession&
the&creditor,&in&addition&to&the&right&granted&him&by& to& everything& which& is& produced& thereby,& or& which& is&
article& 1170,& may& compel& the& debtor& to& make& the& incorporated& or& attached& thereto,& either& naturally& or&
delivery.&& artificially&
& !
If&the& thing&is& indeterminate&or&generic,& he&may& ask& Article"442"
that&the& obligation&be&complied&with&at&the&expense& Natural*fruits&are&the&spontaneous&products&of&the&soil,&
of&the&debtor.&& and&the&young&and&other&products&of&animals.&&
& &
If&the& obligor&delays,& or&has& promised& to& deliver& the& Industrial* fruits& are& those& produced& by& lands& of& any&
same&thing&to&two&or&more&persons&who&do&not&have& kind&through&cultivation&or&labor.&&
the& same& interest,& he& shall& be& responsible& for& any& &
fortuitous&event&until&he&has&effected&the&delivery.!! Civil*fruits&are&the&rents&of&buildings,&the&price&of&leases&
! of& lands& and& other& property& and& the& amount& of&
Article"1166" perpetual&or&life&annuities&or&other&similar&income&
The& obligation& to& give&a& determinate& thing&includes& "
that& of& delivering& all& its& accessions& and& accessories,& Kinds"of"Prestations"
even&though&they&may&not&have&been&mentioned.&& 1. to!give;!
2. to!do;!or!
" 3. not!to!do!
Article"1244" !
The& debtor& of& a& thing& cannot& compel& the& creditor& to& Kinds"of"Performance"
receive&a&different&one,&although&the&latter&may&be&of&the& 1. specific"performance"!
same&value&as,&or&more&valuable&than&that&which&is&due.&& Dperformance!by!the!debtor!himself!(applies&only&
& to&obligation&to&give&)&
"
In&obligations&to&do&or&not&to&do,&an&act&or&forbearance&
2. substitute"performance*!
cannot& be& substituted& by& another& act& or& forbearance& Dperformance!at!the!expense!of!the!debtor!
against&the&obligee's&will.&& "
! 3. equivalent"performance""
! Dgrant!of!damages"
! !
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14"
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Notes:& fruits! before! the! actual! delivery! on! April! 1,! 1990.! If,!
Article"1163" however,!X!sells!the!fruits!on!March!20,!1990!to!B!who!
Every&person&obliged&to&give&something&is&also&obliged&to& does! not! know! the! previous! sale! to! A! and! who!
take&care&of&it&with&the&proper&diligence&of&a&good&father& immediately!takes!possession!of!the!fruits,!B!shall!have!
of& a& family,& unless& the& law& or& the& stipulation& of& the& a! better! right! over! the! said! fruits.! Considering! that!
parties&requires&another&standard&of&care.& there!is!no!delivery!of!the!property!to!A!on!March!20,!
" 1990,!A!has!no!real!right!over!the!said!property!at!that!
This!article!involves!the!prestation!“to&give.”!The!word! time! binding! upon! the! whole! world.! A’s! remedy! is! to!
“someF! thing”! connotes! a! determinate! object! which! is! seek! damages! from! X! in! connection! with! the! fruits.! If!
definite,! known,! and! has! already! been! distinctly! however,! the! mango! orchard! has! already! been!
decided! and! particularly! specified! as! the! matter! to! be! delivered,!A!already!has!a!real!right!binding!upon!the!
given! from! among! the! same! things! belonging! to! the! whole!world.!If!X!sells!to!B!the!fruits!after!delivery!to!
same!kind.!! A,!A!can!recover!from!B!who!in!turn!can!seek!damages!
! from!X.!!
Article"1164" !
The& creditor& has& a& right& to& the& fruits& of& the& thing& from& Article"1165"
the&time&the&obligation&to&deliver&it&arises.&However,&he& This! provision! involves! the! prestation! “to! give.”! The!
shall& acquire& no& real& right& over& it& until& the& same& has& object! of! the! prestation! can! either! be! determinate! or!
been&delivered&to&him.&& generic.! A! generic! object! can! be! any! object! belonging!
" to! the! same! kind.! In! the! event! that! there! is! nonF
This!article!involves!the!prestation!“to*give.”!After!the! delivery! of! a! generic! thing,! the! creditor! may! have! it!
right!to!deliver!the!object!of!the!prestation!has!arisen! accomplished!or!delivered!in!any!reasonable!and!legal!
in!favor!of!the!creditor!but!prior!to!the!delivery!of!the! way! charging! all! expenses! in! connection! with! such!
same,! there! is! no! real! right! enforceable! or! binding! fulfillment! to! the! debtor.! The! creditor! can! ask! a! third!
against! the! whole! world! over! the! object! and! its! fruits! party!to!deliver!the!same!thing!of!the!same!kind!with!
in! favor! of! the! person! to! whom! the! same! should! be! all!the!expenses!charged!to!the!debtor.!!
given.! The! acquisition! of! a! real! right! means! that! such! !
right! can! be! enforceable! against! the! whole! world! and! In! case! of! nonFdelivery! of! a! determinate! thing,! the!
will!prejudice!anybody!claiming!the!same!object!of!the! remedy! is! to! file! an! action! to! compel! the! debtor! to!
prestation.!The!real!right!only!accrues!when!the!thing! make! the! delivery.! This!! action! is! called! specific!
or!object!of!the!prestation!is!delivered!to!the!creditor.!! performance.! If! the! debtor! is! guilty! of!! fraud,!
! negligence,!delay!or!contravention!in!the!performance!
He! only! has! a! personal! right! over! the! same! if! it! is! of! the! !obligation,! the! creditor! can! likewise! seek!
enforceable! only! against! the! debtor! who! is! under! an! damages!against!the!debtor.!
obligation! to! give.! This! means! that! the! personal! right! !
of! the! creditor! can! be! defeated! by! a! third! person! in! A! fortuitous! event! is! an! event! which! “could! not! be!
good! faith! who! has! innocently! acquired! the! property! foreseen,!or!which!though!foreseen,!were!inevitable.”6!
prior! to! the! scheduled! delivery! regardless! of! whether! As! a! general! rule,! a! debtor! is! relieved! from! his!
or! not! such! third! person! acquired! the! property! after! obligation! “to! give”! if! the! object! of! such! prestation! is!
the! right! to! the! delivery! of! the! thing! has! accrued! in! lost!through!a!fortuitous!event.!!
favor! of! the! creditor.! In! this! case,! however,! the! !
aggrieved! creditor! can! go! against! the! debtor! for! The! last! paragraph! of! Article! 1165! however! provides!
damages! as! the! debtor! should! have! known! that! the! that!a!fortuitous!event!will!not!excuse!the!obligor!from!
fruits!should!have!been!delivered!to!the!creditor!alone!! his!obligation!in!two!cases!namely:!!
! 1) if!the!obligor!delays;!and!
Illustration:! 2) if!he!has!promised!to!deliver!the!same!thing!to!
For! example,! on! February! 1,! 1990,! A! buys! a! mango! two! or! more! persons! who! do! not! have! the!
orchard! from! X! to! be! delivered! on! March! 1,! 1990.! On! same!interest.!!
the!latter!date,!A!shall!have!the!right!to!the!fruits!of!the! !
mango! orchard.! If! the! property! is! delivered! only! on! In!both!cases,!the!obligor!will!be!liable!for!damages!or!
April! 1,! 1990,! A! can! nevertheless! ask! that! the! fruits! will! be! bound! to! replace! the! lost! object! of! the!
accruing!since!March!1,!1990!be!likewise!delivered!to! prestation! in! cases! when! the! obligee! agrees! to! the!
him.!X!cannot!resist!by!saying!that!he!is!entitled!to!the! replacement.!!

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How*do*you*comply*with*the*obligation?! !
If! the! source! of! the! obligation! is! the! LAW,! then! the! Is* there* an* exception* where* a* debtor* is* obliged* to*
provisions!of!the!law!would!provide!how!this!source!of! deliver*a*thing*requires*a*different*kind*of*diligence*
obligation!can!be!complied!with.!! in*taking*care*of*the*thing*other*than*a*good*father*
! of*a*family?**
If!it!is!a!CONTRACT,!then!the!stipulation!provide!how! Yes,! if! the! law! requires! a! higher! degree! of! diligence!
the!contract!shall!be!complied!with.!! such! as! what! is! required! of! common! carriers.! Other!
! than! the! law,! is! the! stipulation! of! the! parties! would!
If* it* is* an* obligation* to* give,* what* is* the* manner* of* require!a!higher!degree!of!diligence.!In!the!absence!of!
compliance?** a! law! or! a! stipulation! to! that! effect,! the! diligence! of! a!
It! depends! on! what! is! to! be! given,! whether! it! is! a! good!father!of!a!family!should!be!observed.!!
determinate!thing!or!an!indeterminate!thing.!! "
! "
Can* there* be* a* valid* obligation* to* deliver* a* generic* "
thing?** "
Yes.! This! may! arise! from! law! and! not! from! a! contract! "
of!sale.!Sale!of!a!car!or!of!a!horse!cannot!be!considered! "
a! valid! sale.! But! a! testamentary! provision! in! a! will! "
which! is! a! generic! thing! is! valid! disposition.! The! law! "
expressly!allows!this.!! "
! "
A*testamentary*provision*giving*an*heir*a*car,*is*the* "
testamentary* provision* allow* the* heir* to* reject* the* "
disposition?** "
He! may! validly! reject! or! wrongfully! reject! the! "
disposition.! For! obligations! to! deliver! a! generic! thing,! "
the! debtor! cannot! deliver! a! thing! which! is! of! inferior! "
kind,! but! neither! can! the! creditor! demand! a! thing! "
which!is!of!superior!quality.!! "
! "
However,! what! is! superior! or! inferior! is! a! very! "
subjective!determination.!What!may!be!superior!to!me! "
may!be!inferior!to!most!of!you.!! "
! "
Therefore! if! the! purpose! of! the! testator! is! to! give! his! "
car! is! to! allow! the! grandson! to! use! the! car! in! "
competitions,!then!a!car!insufficient!to!perform!in!race! "
tracks!is!improper.!Moreover,!aside!from!the!purpose! "
is!the!value!of!the!estate!which!should!not!impair!the! "
legitime!of!the!estate.!! "
! "
In* obligations* to* give* a* determinate* thing,* what* is* "
the*manner*of*compliance?** "
The! primary! obligation! of! a! debtor! is! to! give! the! very! "
same!thing!which!he!promised!to!deliver.!! "
! "
In* an* obligation* to* deliver* a* Kia* Pride,* the* debtor* "
offered* to* deliver* a* BMW,* can* the* obligation* be* "
validly*extinguished?** "
Yes,! though! the! creditor! cannot! be! compelled! to! "
accept,! he! may! however! want! to! accept.! Thus,! the! "
obligation!will!be!extinguished.!! "
! "

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Article"1167" was!not!able! to! finish! the! job! after! some! time! despite!
If& the& person& obliged& to& do& something& fails& to& do& it,& the& repeated! reminders! made! by! the! plaintiff;! that! the!
same&shall&be&executed&at&his&cost.&& defendant! merely! gave! assurances,! but! failed! to!
& comply! with! the! same;! and! that! after! getting!
This& same& rule& shall& be& observed& if& he& does& it& in& exasperated! with! the! delay! of! the! repair! of! the!
contravention& of& the& tenor& of& the& obligations.& typewriter,! the! plaintiff! went! to! the! house! of! the!
Furthermore,& it& may& be& decreed& that& what& has& been& defendant! and! asked! for! its! return,! which! was! done.!
poorly&done&be&undone.&& The! inferences! derivable! from! these! findings! of! fact!
! are!that!the!appellant!and!the!appellee!had!a!perfected!
Article"1168" contract! for! cleaning! and! servicing! a! typewriter;! that!
When& the& obligation& consists& in& not& doing& and& the& they! intended! that! the! defendant! was! to! finish! it! at!
obligor& does& what& has& been& forbidden,& it& shall& also& be& some! future! time! although! such! time! was! not!
undone&at&his&expense.&& specified;! and! that! such! time! had! passed! without! the!
! work! having! been! accomplished! for! the! defendant!
The!articles!deal!with!the!obligations!“to!do”!and!“not! returned! the! typewriter! cannibalized! and! unrepaired,!
to! do.”! The! creditor! can! ask! any! third! person! to! which! itself! is! a! breach! of! his! obligation,! without!
perform!the!obligation!due!from!the!debtor!should!the! demanding! that! he! be! given! more! time! to! finish! the!
latter!fail!to!do!the!same.!The!debtor!will!be!liable!for! job,! or! compensation! for! the! work! he! had! already!
all! expenses! in! connection! with! the! performance! or! done.! The! time! for! compliance! having! evidently!
fulfillment! of! the! obligation! undertaken! by! the! third! expired,! and! there! being! a! breach! of! contract! by! nonF
person.!The!words!“at!his!cost”!imply!both!the!right!to! performance,!it!was!academic!for!the!plaintiff!to!have!
have! somebody! else! perform! the! obligation! and! the! first! petitioned! the! court! to! fix! a! period! for! the!
right!to!charge!the!expenses!thereof!to!the!debtor.!! performance!of!the!contract!before!filing!his!complaint!
! in! this! case.! Defendant! cannot! invoke! Article! 1197! of!
With! respect! to! the! situation! wherein! the! debtor! the! Civil! Code! for! he! virtually! admitted! nonF
poorly! undertook! the! obligation,! the! creditor! has! the! performance! of! the! contract! by! returning! the!
right! to! have! everything! be! undone! at! the! expense! of! typewriter! that! he! was! obliged! to! repair! in! a! nonF
the! debtor.! The! reason! for! this! rule! is! to! prevent! the! working! condition,! with! essential! parts! missing.! The!
debtor! from! taking! his! obligation! lightly.! He! must! fixing!of!a!period!would!thus!be!a!mere!formality!and!
exercise! due! diligence! and! prudence! to! see! to! it! that! would! serve! no! purpose! than! to! delay.! It! is! clear! that!
the! prestation! is! properly! performed.! In! case! the! the! defendantFappellee! contravened! the! tenor! of! his!
prestation!is!for!the!debtor!not!to!do!a!particular!act!or! obligation! because! he! not! only! did! not! repair! the!
service!and!he!nevertheless!performs!it,!it!shall!! typewriter!but!returned!it!“in!shambles,”!according!to!
likewise!be!undone!at!his!own!expense.!! the! appealed! decision.! For! such! contravention,! as!
! appellant! contends,! he! is! liable! under! Article! 1167! of!
In! Chaves" vs." Gonzales! where! the! repairer! of! a! the!Civil!Code,!jam!quot,!for!the!cost!of!he!execution!of!
typewriter,! upon! demand! of! the! owner,! returned! the! the! obligation! in! a! poor! manner.! The! cost! of! the!
typewriter! with! missing! parts! and! without! having! it! execution! of! the! obligation! in! this! case! should! be! the!
repaired,! and! where! the! owner! had! another! company! cost! of! the! labor! or! service! expended! in! the! repair! of!
fix! the! typewriter,! the! Supreme! Court! ruled! that! the! the! typewriter,! which! is! in! the! amount! of! P58.75!
original! repairer! can! be! held! liable! not! only! for! the! because!the!obligation!or!contract!was!to!repair!it.!!
missing! parts! but! also! for! the! cost! of! the! execution! of! In! addition,! the! defendantFappellee! is! likewise! liable,!
the! obligation! of! repairing! the! typewriter! by! another! under! Article! 1170! of! the! Code,! for! the! cost! of! the!
company,!thus:!! missing! parts,! in! the! amount! of! P31.10,! for! in! his!
! obligation! to! repair! the! typewriter! he! was! bound,! but!
Because!the!plaintiff!appealed!directly!to!the!Supreme! failed!or!neglected!to!return!it!in!the!same!condition!it!
Court! and! the! appellee! did! not! interpose! any! appeal,! was!when!he!received!it.!!
the! facts,! as! found! by! the! trial! court,! are! now!
conclusive!and!nonFreviewable.!!
!
The! appealed! judgment! states! that! the! plaintiff!
delivered!to!the!defendant!x!x!x!a!portable!typewriter!
for! routine! cleaning! and! servicing;! that! the! defendant!

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Kinds"of"Civil"Obligations" !
" !
1. As&to&Perfection*&*Extinguishment& Topic:! Uncertainty! of! the! time! of! fulfillment! of! the!
& obligation!
a. Pure" Smith"Bell"v."Sotelo"Matti"
Fobligations! whose! performance! does! not! Doctrines:!
depend! upon! a! future! or! uncertain! event! or! 1. As! no! definite! date! was! fixed! for! the! delivery! of!
upon! a! past! event! unknown! to! the! parties! is! goods,! the! term! which! the! parties! attempted! to!
demandable!at!once.! establish!being!so!uncertain,!that!one!cannot!tell!
! whether! as! a! matter! of! fact,! the! aforesaid! goods!
b. Conditional" could,! or! could! not! be! imported! into! Manila,! the!
Fobligations!in!which!the!acquisition!of!rights! obligation! must! be! regarded! as! conditional! and!
as!well!as!the!extinguishment!or!loss!of!those! not!one!with!a!term!
already! acquired,! shall! depend! upon! the! !
happening! of! the! event! which! constitutes! the! 2. Where! the! fulfillment! of! the! condition! does! not!
condition.!! depend!on!the!will!of!the!obligor,!but!on!that!of!a!
! 3rd! person! who! can,! in! no! way! be! compelled! to!
c. With"a"term"or"period" carry! it! out,! the! obligor's! part! of! the! contract! is!
Fobligations! whose! fulfillment! a! day! certain! complied!with,!if!he!does!all!that!is!in!his!power,!
has! been! fixed,! shall! be! demandable! only! &! it! then! becomes! incumbent! upon! the! other!
when!that!day!comes.!!! contracting!party!to!comply!with!the!terms!of!the!
! contract.!
! !
PURE"OBLIGATIONS" Topic:! Validity! and! fulfillment! cannot! be! left! to! the!
Article"1179" exclusive!will!of!the!lessee!
Every& obligation& whose& performance& does& not& depend& Encarnacion"v."Baldomar"
upon& a& future& or& uncertain& event,& or& upon& a& past& event& Doctrine:!
unknown&to&the&parties,&is&demandable*at*once.&& The! continuance! and! the! performance! of! the! contract!
& of! lease! cannot! be! made! to! depend! solely! and!
Every&obligation&which&contains&a&resolutory*condition& exclusively! upon! the! free! and! uncontrolled! choice! of!
shall& also& be& demandable,& without& prejudice& to& the& the! lessees! between! continuing! paying! rentals! or! not,!
effects&of&the&happening&of&the&event.& completely! depriving! the! owner! of! all! the! say! in! the!
! matter.!
Article"1197" !
If& the& obligation& does& not& fix& a& period,& but& from& its& Eleizegui"v."Lawn"Tennis"Club"
nature& and& the& circumstances& it& can& be& inferred& that& a& Article! 1581! of! the! Civil! Code,! fixing! legal! terms! for!
period&was&intended,&the* courts* may* fix* the* duration* leases!in!which!no!conventional!term!is!stipulated,!has!
thereof.** no! application! to! a! lease! whose! termination! is!
& expressly!left!to!the!will!of!the!lessee.!!!
The& courts& shall& also& fix& the& duration& of& the& period* !
when*it*depends*upon*the*will*of*the*debtor.** Lim"v."People"
& It! is! clear! in! the! agreement,! Exhibit! “A”,! that! the!
In&every&case,&the&courts&shall&determine&such&period&as& proceeds! of! the! sale! of! the! tobacco! should! be! turned!
may& under& the& circumstances& have& been& probably& over!to!he!complainant!as!soon!as!the!same!was!sold,!
contemplated& by& the& parties.& Once& fixed& by& the& courts,& or,!that!the!obligation!was!immediately!demandable!as!
the&period&cannot&be&changed&by&them.&& soon! as! the! tobacco! was! disposed! of.! Hence,! Article!
! 1197! of! the! New! Civil! Code,! which! provides! that! the!
! courts!may!fix!the!duration!of!the!obligation!if!it!does!
! not!fix!a!period,!does!not!apply.!
!
!
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Philbanking"v."Lui"She" New!Civil!Code!is!precisely!predicated.!on!the!absence!
Article! 1308! of! the! Civil! Code! creates! no! impediment! of!any!period!fixed!by!the!parties."
to!the!insertion!in!a!contract!for!personal!services!of!a! Millare"v."Hernando"
resolutory!condition!permitting!the!cancellation!of!the! The! first! paragraph! of! Article! 1197! is! clearly!
contract!by!one!of!the!parties.!Such!a!stipulation!does! inapplicable,!since!the!Contract!of!Lease!did!in!fact!fix!
not! make! either! the! validity! or! the! fulfillment! of! the! an!original!period!of!five!years,!which!had!expired.!It!is!
contract!dependent!upon!the!will!of!the!party!to!whom! also!clear!from!paragraph!13!of!the!Contract!of!Lease!
is!conceded!the!privilege!of!cancellation;!for!where!the! that! the! parties! reserved! to! themselves! the! faculty! of!
contracting!parties!have!agreed!that!such!option!shall! agreeing!upon!the!period!of!the!renewal!contract.!The!
exist,! the! exercise! of! the! option! is! as! much! in! the! second! paragraph! of! Article! 1197! is! equally! clearly!
fulfillment!of!the!contract!as!any!other!act!which!may! inapplicable! since! the! duration! of! the! renewal! period!
have! been! the! subject! of! the! agreement.! Indeed,! the! was!not!lef!t!to!the!will!of!the!lessee!alone,!but!rather!
cancellation! of! a! contract! in! accordance! with! to! the! will! of! both! the! lessor! and! the! lessee.! Most!
conditions!agreed!upon!beforehand!is!fulfillment.! importantly,! Article! 1197! applies! only! where! a!
! contract!of!lease!clearly!exists.!Here,!the!contract!was!
A!lease!to!an!alien!for!a!reasonable!period!is!valid.!So! not!renewed!at!all,!there!was!in!fact!no!contract!at!all!
is! an! option! giving! an! alien! the! right! to! buy! real! the!period!of!which!could!have!been!fixed.!
property! on! condition! that! he! is! granted! Philippine! "
citizenship.!Aliens!are!not!completely!excluded!by!the! It! follows! that! the! respondent! judge’s! decision!
Constitution! from! the! use! of! lands! for! residential! requiring!renewal!of!the!lease!has!no!basis!in!law!or!in!
purposes.! Since! their! residence! in! the! Philippines! is! fact.! Save! in! the! limited! and! exceptional! situations!
temporary,! they! may! be! granted! temporary! rights! envisaged!in!Articles!1197!and!1670!of!the!Civil!Code,!
such!as!a!lease!contract!which!is!not!forbidden!by!the! which!do!not!obtain!here,!courts!have!no!authority!to!
Constitution.! Should! they! desire! to! remain! here! prescribe! the! terms! and! conditions! of! a! contract! for!
forever!and!share!our!fortune!and!misfortune,!Filipino! the!parties.!
citizenship!is!not!impossible!to!acquire.! "
! "
" "
Araneta"v."Phil."Sugar"Estates" "
Where! the! issue! raised! in! the! pleadings! was! whether! "
the!seller!of!the!land!was!given!in!the!contract!of!sale!a! "
reasonable!time!within!which!to!construct!the!streets! "
around!the!perimeter!of!the!land!sold,!the!court,!in!an! "
action! for! specific! performance! to! compel! the! "
construction! of! said.! streets! or! for! recovery! of'! "
damages,! cannot! fix! a! period! within! which! the! seller! "
should! construct! the! streets.! The! court! should! "
determine! whether.! the! parties! had! agreed! that! the! "
seller!should!have!reasonable!time!to!perform!its!part! "
of! the! bargain.! If! the! contract! so! provided,! then! there! "
was!a!period!fixed,!a!"reasonable!time",!and!all!that!the! "
court! should! have! done! was! to! determine! if! that! "
reasonable! time! had! already! elapsed! when! the! suit! "
was! filed.! If! it! had! passed,! then! the! court! should'! "
declare! that! the! petitioner! had! breached! the! contract,! "
as! averred! in! the! complaint.! and! fix! the! resulting! "
damages.!On!the!other!hand,!if!the!reasonable!time!had! "
not! yet! elapsed,! the! court! perforce! was! bound! to! "
dismiss!the!action!for!being!premature.!But!in!no!case! "
can! it! be! logically! held! that,! under! the! pleadings,! the! "
intervention! of! the! court! to! fix! the! period! for! "
performance! was! warranted,! for! Article! 1197! of! the! "
"

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Suspensive"condition" Mixed"condition"
1. A! obligates! himself! to! give! B! P100,000! if! the! 1. Where! the! payment! of! the! balance! of! the!
latter!gets!married!to!C.! purchase!price!of!a!house!and!lot!is!subject!to!
! the! condition! that! the! premises! shall! be!
2. X!obligates!himself!to!give!to!Y!a!certain!house! vacated! by! the! occupant! and! that! the! vendee!
and! lot! if! the! latter! passes! the! bar! shall! see! to! it! that! the! said! premises! shall! be!
examinations!in!his!first!attempt.! vacated.!
! !
Resolutory"condition" 2. Where!the!debtor!promises!to!pay!his!debts!to!
1. When!a!person!donates!a!parcel!of!land!to!the! the!creditor!as!soon!as!he!shall!have!received!
City! of! Manila! subject! to! the! condition! that! it! funds!derived!from!the!sale!of!his!house!
shall!be!transformed!into!a!public!park!within! !
a!period!of!one!year! Impossible"condition"
! If!A!obligates!himself!to!pay!to!B!P100,000!if!the!latter!
2. In!case!a!person!sells!a!parcel!of!land!with!the! can!contact!the!inhabitants!of!Mars!
right!of!repurchase! !
! Contrary"to"law,"food"customs"and"public"policy"
Potestative" condition" whose" fulfillment" depends" 1. If! C! promises! to! give! D! a! parcel! of! land! if! the!
exclusively"upon"the"will"of"the"debtor" latter!secures!a!divorce!from!his!wife!
1. Obligor! subscribed! to! 200! shares! of! capital! !
stock! to! a! certain! college! subject! to! the! 2. If! E! binds! himself! to! deliver! to! F! a! car! if! the!
condition!that!she!will!pay!as!soon!as!she!had! latter!will!go!with!him!around!the!world!on!a!
harvested!fish!from!her!fishpond! trial!honeymoon.!
2. If! the! debtor! binds! himself! to! deliver! to! the! !
creditor! a! certain! car! by! end! of! December! Divisible"obligation"
provided!he!is!in!the!mood!to!do!so! If!A!and!B!enter!into!an!agreement!whereby!the!former!
! binds! himself! to! give! P5,000! to! the! latter! in! 2! equal!
*If!however,!the!debtor!binds!himself!to!pay!a!previous! installments,!the!1st!installment!to!be!given!if!the!latter!
indebtedness! of! P2,000! to! the! creditor! by! the! end! of! is! able! to! dispose! of! illegal! drugs! belonging! to! the!
December!provided&he&is&in&the&mood&to&do&so,!although! former!and!the!2nd!installment!to!be!given!if!the!latter!
the!condition"is"void!on!the!ground!that!its!fulfillment! gets!married!to!C.!!!
depends! exclusively! upon! the! will! of! the! debtor,! the! !
obligation! itself! is! not! void! since! it! refers! to! a! preD Since! the! obligation! if! divisible,! that! part! (2nd! part)!
existing"indebtedness." which! is! not! affected! by! the! unlawful! condition! shall!
" be!valid.!
The! rule! on! potestative! (debtor)! conditions! is! !
applicable" only" when" the" obligation" shall" depend" Positive"Condition"
for" its" PERFECTION" upon! the! fulfillment! of! the! A!binds!himself!to!give!B!P5,000!if!the!latter!passes!the!
condition!and!NOT!when!there!is!a!preFexisiting!one.! bar! exam! in! his! first! attempt! and! B! flunks! the! exam,!
! the!obligation!is!extinguished.!
Casual"Condition" !
1. If!the!obligor!promises!to!deliver!his!car!to!the! X!binds!himself!to!give!a!new!car!to!Y!if!the!latter!gets!
obligee!if!a!certain!candidate!is!elected!to!the! married!to!Z!within!a!period!of!5!years!from!the!time!
position! of! President! of! the! Philippines! in! of! the! constitution! of! the! obligation,! and! at! the!
2016,! the! obligation! is! valid! because! the! expiration!of!5!years,!Y!had!not!yet!complied!with!the!
fulfillment! of! the! condition! to! which! it! is! condition,!the!obligation!is!extinguished.!
subject!depends!upon!the!will!of!others.! !
! Negative"Condition"
2. If!the!obligor!promises!to!give!P10,000!to!the! X! binds! himself! to! give! P5,000! to! Y! provided! that! the!
obligee! after! the! lapse! of! 2! years,! provided! latter!shall!not!get!married!before!reaching!the!age!of!
that! during! such! period! war! shall! not! break! 25.! ! If! B! is! not! yet! married! at! the! age! of! 25,! the!
out!between!Russia!and!the!United!States.! obligation!become!effective.!
! !

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! As! far! as! B! is! concerned,! it! would! have! the! effect! of!
! compelling!him!to!pay!to!A!not!only!the!P100,000,!but!
Article"1186" also!the!interest!thereon!during!the!same!period.!
The&condition&shall&be&deemed&fulfilled&when&the&obligor& !
voluntarily&prevents&its&fulfillment& But! because! of! the! reciprocal! character! of! the!
! obligation,! the! law,! as! a! matter! of! justice! and!
Doctrine" of" Constructive" Fulfillment! (of& Suspensive& convenience,! considers! the! fruits! and! interests! as! the!
Conditions)& equivalent!of!each!other.!
! !
In! order! that! this! doctrine! can! be! applied,! it! is! When!the!obligation!is!UNILATERAL!
however,! necessary! that! the! obligor! must! have! Since! the! obligor! or! debtor! does! not! receive! any!
actually! prevented! the! obligee! from! complying! with! equivalent! or! valuable! consideration! from! the! obligee!
the! condition,! and! that! such! prevention! must! have! or!creditor,!it!is!but!logical!that!he!shall!be!entitled!to!
been!voluntary!of!willful!in!character.! all! of! the! fruits! or! interests! of! the! thing! pending! the!
! fulfillment! of! the! condition,! unless! there! is! contrary!
Illustration:& intention!on!his!part.!
Where!the!conditions!which!are!imposed!by!a!certain! !
company!in!order!that!its!employees!will!be!entitled!to! If!A!had!obligated!himself!to!give!to!B!a!parcel!of!land!if!
retirement! benefits! can! no! longer! be! complied! with! the! latter! gets! married! to! C,! and! the! condition! is!
because! the! retirement! or! pension! plan! was! willfully! fulfilled! only! after! 2! years! from! the! time! of! the!
abrogated!by!a!unilateral!act!of!the!Board!of!Directors! constitution! of! the! obligation,! he! shall! be! obligated! to!
of! the! company,! it! was! held! that! such! conditions! are! deliver!only!the!land!and!not!the!fruits!which!he!may!
deemed!complied!with;!consequently,!such!employees! have! gathered! or! received! therefrom! during! the!
are!entitled!to!retirement!benefits.! pendency!of!the!condition.!
! !
Article"1188" !
If!the!obligor!has!promised!in!writing!to!sell!a!parcel!of! !
land! to! the! obligee! upon! the! happening! of! a! certain! !
condition,! and! subsequently,! before! the! fulfillment! of! !
the!condition,!he!changes!his!mind!and!finally!decides! !
to! sell! the! land! to! another! person,! the! obligee! can! !
bring! an! appropriate! action! such! as! a! petition! for! the! !
issuance!of!a!writ!of!injunction,!to!prevent!the!sale!in! !
order!to!preserve!his!right.! !
! !
Retroactive"effect" !
When! the! obligation! imposes! reciprocal! prestations! !
upon! the! parties,! the! fruits! and! interests! during! the! !
pendency! of! the! condition! shall! be! deemed! to! have! !
been!mutually!compensated! !
! !
A!obligated!himself!to!sell!a!certain!parcel!of!land!to!B! !
for! P100,000! subject! to! a! condition! of! a! suspensive! !
character,! and! such! condition! was! fulfilled! 2! years! !
after!the!perfection!of!the!contract.! !
! !
A! literal! application! of! the! principle! of! retroactivity! !
would! have! the! effect! of! compelling! A! to! deliver! to! B! !
not! only! the! land,! but! also! all! of! the! fruits! which! he! !
may! have! gathered! or! received! therefrom! during! the! !
time! of! perfection! of! the! contract! to! the! time! of! the! !
fulfillment!of!the!condition.! !
! !

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!
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2. As!to!Plurality*of*Prestation* It! depends! on! the! kind! of! obligation! involved.! It! may!
a. Conjunctive!! be!a!conjunctive!obligation,!alternative!obligation,!and!
b. Alternative!& facultative!obligation.!!
c. Facultative!! !
! In! conjunctive" obligations,! the! impossibility! of!
Conjunctive!(“and”)! performance! of! one! will! not! result! in! the!
Fdebtor!must!perform!more!than!one!prestation! extinguishment! of! the! obligation! because! there! is!
Fno!right!to!choose!because!all!must!be!performed! another! or! two! or! more! other! obligations! to! be!
! performed.!!
Alternative"(“or”)! !
Fdebtor!must!perform!any!of!the!several!prestations! In! alternative" obligations,! if! there! was! already! a!
Fright!of!choice!generally!belongs!to!the!debtor!unless! communication! of! a! choice.! By! then! the! obligation! is!
given!to!the!creditor!or!3rd!person! converted!into!a!simple!obligation!and!the!one!chosen!
! was! the! one! impossible! to! perform! especially! if! it! is!
Facultative" due! to! a! fortuitous! event.! As! such,! the! obligation! is!
Fonly!one!thing!is!due!but!the!debtor!has!reserved!the! extinguished.!If!there!was!already!a!communication!of!
right!to!substitute!it!with!another! a! choice! but! what! become! impossible! was! the! other!
Fright!to!choose!always!belongs!to!the!debtor! prestation!which!was!not!chosen,!the!obligation!is!not!
" extinguished.!!
Alternative" Facultative" !
As&to&the&Effect&of&Fortuitous&Loss& In! facultative" obligations,! it! depends! on! whether!
Only! the! impossibility! of! Impossibility! of! the! there! is! already! substitution! at! the! time! of! the!
all! the! prestations! due! principal! prestation! is! impossibility! of! the! performance! of! one! of! the!
without! the! fault! of! the! sufficient! to! extinguish! prestation.! If! before! substitution! the! impossibility! of!
debtor! extinguished! the! the! obligation,! even! if! the! one! of! the! obligation! becomes! impossible! to! perform!
obligation! substitute!is!possible.! due! to! a! fortuitous! event,! the! obligation! is!
! extinguished.! But! if! one! of! the! obligation! become!
As&to&Choice& impossible! to! perform! due! to! the! fault! of! the! debtor,!
Right! to! choose! MAY! be! Only! the! debtor! can! the! obligation! is! not! extinguished! (debatable& on& the&
given!to!the!creditor! choose!the!substitute! second&scenario).&&
As&to&Nature& !
Various! prestations! all! of! Only! the! principal! If! in! facultative" obligation! what! was! lost! or! became!
which! constitute! parts! of! prestation! constitutes! the! impossible! to! perform! was! the! substitute! prestation!
the!obligation! obligation,! the! accessory! and! there! was! no! substitution! yet! at! the! time! of! the!
being! only! a! means! to! loss,!the!obligation!is!not!extinguished!because!the!due!
facilitate!payment.! prestation!was!the!principal!prestation.!!
! !
As&to&Effect&of&the&Nullity&of&Prestations& B’s&car&was&lost&due&to&the&fault&of&the&debtor,&what&are&
Nullity! of! one! of! the! Nullity! of! the! principal! the&remedies&of&the&creditor?&&
prestation! does! not! prestation! invalidates! the! &
invalidate! the! obligation,! obligation.! It!depends!on!who!has!the!right!to!choose.!If!it!shows!
which!is!still!in!force!with! that!the!choice!is!not!expressly!granted!to!the!creditor,!
respect! to! those! which! the! right! of! choice! pertains! to! the! debtor.! Under! the!
have!no!vice.! law!it!was!provided!that!the!choice!is!with!the!debtor,!
unless!otherwise!expressly!granted!to!the!creditor.!!
"
!
"
If!the!choice!is!with!the!debtor,!even!if!it!was!due!to!his!
In& multiple& prestations& where& one& of& the& prestation& is&
fault,!he!has!other!prestations!to!choose!from!without!
impossible& to& perform& even& if& the& other& prestation& still&
being!held!liable!for!damages.!Anyway,!there!is!no!due!
are& possible& to& perform,& may& the& obligation& be&
considered&to&have&been&extinguished?!! prestation! because! the! debtor! has! not! made! a! choice!
! yet.!
!

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If! however! in! alternative! obligations,! the! first! two! circumstances?* Can* the* creditor* choose* for* the*
prestations! become! impossible! to! perform! due! to! the! value*for*any*of*the*three*prestations?**
fault! of! the! debtor,! and! the! remaining! prestation! !
becomes! impossible! to! perform! due! to! a! fortuitous! It! depends! on! who! has! the! right! to! choose.! If! the!
event.!Can!the!debtor!be!held!liable!for!damages?!! creditor! has! the! right! of! choice,! he! can! choose! on! the!
! value!of!any!of!the!three!prestations.!!
The!debtor!can!be!held!liable!if!this!is!the!choice!of!the! !
creditor.! However,! if! the! choice! is! with! the! debtor,! he! But!if!the!choice!is!with!the!debtor,!the!liability!will!be!
cannot! be! held! liable! for! damages! even! if! the! loss! of! based! on! the! value! of! the! prestation! which! was! lost!
the! last! remaining! prestation! was! due! to! a! fortuitous! last!due!to!his!fault.!!
event.! This! is! because! the! debtor! diminished! the! !
possibility! of! the! performance! of! the! obligation! and! Qualification"in"Alternative"Obligation:!If!one!of!the!
secondly!he!was!at!fault!therefore!he!can!be!held!liable! prestations! become! impossible! to! perform! due! to! the!
for!damages!under!Art.!1170.!However,!the!provisions! fault!of!the!debtor,!and!the!choice!is!with!the!creditor:!!
in!Art.!1170!presupposes!a!simple!obligation,!and!thus! The! creditor! can! either! demand! for! the! value! of! the!
not! applicable! in! the! present! case! to! make! the! debtor! prestation! with! damages! or! he! can! demand! for! the!
liable.! Secondly,! even! if! the! obligation! has! diminished! performance! of! one! of! the! remaining! prestations!
the! performance! of! the! obligation! imputable! to! the! without!damages.!!
debtor,! he! cannot! be! held! liable! because! it! can! be! !
considered! as! his! choosing! to! make! the! first! two! Second! view:! If! the! creditor! can! demand! for! the!
prestations! impossible! to! perform,! and! the! last! performance! of! one! of! the! remaining! prestations,! the!
prestation!be!considered!as!his!choice.!The!last!though! creditor!may!opt!to!demand!for!the!value!of!the!thing!
lost! due! to! fortuitous! event,! cannot! make! the! debtor! which! was! lost! due! to! the! fault! of! the! debtor.! In! this!
liable.!! instance! under! alternative! obligations,! it! is! possible!
! that! the! debtor! is! not! the! owner! of! the! horse.! In!
Art.! 1170.! Those! who! in! the! performance! of! their! alternative!obligations!the!debtor!is!not!sure!whether!
obligations! are! guilty! of! fraud,! negligence,! or! delay,! he!can!deliver!the!horse!or!not.!if!the!horse!was!owned!
and! those! who! in! any! manner! contravene! the! tenor! by! the! creditor,! as! such! he! can! seek! damages.! If! the!
thereof,!are!liable!for!damages.!! thing!lost!was!owned!by!the!debtor!as!a!valid!premise,!
! the! debtor! cannot! be! held! liable! for! damages.! In!
! alternative!obligations!it!must!be!remembered!that!the!
The* horse* died* due* to* the* fault* of* the* debtor,* this* prestation!may!either!be!owned!by!the!debtor!or!not.!!
time* the* creditor* has* the* right* to* choose.* What* are* !
the*rights*of*the*creditor?** !
* Facultative"obligations""
He! can! choose! from! one! of! the! remaining! prestations! In! facultative! obligations! it! is! improper! to! say! that!
or! choose! the! prestatation! which! was! lost! due! to! the! there! is! only! one! prestation.! For! how! could! it! be!
fault!of!the!debtor.!! considered! to! fall! in! obligations! with! multiple!
! prestations! if! there! is! only! one! prestation! involved.!
If! the! creditor! choose! to! demand! for! the! value! of! the! Rather! it! is! better! to! say! that! there! is! only! one!
obligation! which! was! lost! due! to! the! fault! of! the! prestation!due!in!a!facultative!obligation.!At!any!given!
debtor,!the!debtor!can!be!held!liable!for!damages.!! point! in! time! there! can! only! be! one! prestation! due!
! unlike!the!other!prestations.!!
If! the! creditor! chose! to! compel! performance! through! !
the! remaining! prestations,! the! debtor! cannot! be! held! When* will* the* obligation* in* facultative* obligation*
liable!for!damages.!! become*due?**
! If" there" is" already! a! communication! of! the!
The* horse* was* lost* due* to* the* fault* of* the* debtor,* substitution.!!
then*after*the*second*prestation*was*also*lost*due*to* !
the* fault* of* the* debtor,* and* thirdly* a* book* was* lost* If* the* principal* prestation* before* substitution*
due* to* the* fault* of* the* debtor.* What* is* the* extent* of* became*impossible*to*perform*due*to*the*fault*of*the*
the* liability* of* the* debtor* under* the* foregoing* debtor* ,* can* the* creditor* demand* to* perform* the*
substitute*prestation?**

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" "
No.!This!is!because!in!facultative!obligation,!the!choice! "
is!always!with!the!debtor.!!The!remedy!of!the!creditor! "
is!to!demand!for!damages.!! "
! "
! "
! "
! "
If* before* substitution,* it* became* impossible* to* "
perform* due* to* the* fault* of* the* debtor,* can* the* "
debtor*be*held*liable*for*damages*by*the*creditor?** "
" "
The!debtor!cannot!be!held!liable!for!damages!because! "
that! was! not! the! due! prestation.! The! debtor! will! bear! "
the!lost,!but!he!cannot!be!held!liable!for!damages.!! "
! "
When*can*the*debtor*make*the*substitution?** "
The!debtor!can!make!the!substitution!at!any!time.!! "
! "
Can*the*debtor*make*the*substitution*if*the*debtor*is* "
already*in*delay?** "
No.! Why! should! the! law! allow! the! debtor! to! make! "
substitution!is!he!is!already!in!delay.!If!he!is!already!in! "
delay!he!can!already!be!liable!for!damages.!There!is!no! "
sense! to! give! him! a! right! if! he! is! already! liable! for! "
damages.!! "
! "
If* the* obligation* is* already* impossible,* can* the* "
debtor*make*a*substitution?** "
No.!For!how!can!the!debtor!make!a!substitution!if!the! "
obligation! is! already! impossible,! unless! it! was! really! "
the! agreement! or! the! intention! of! the! parties.! "
Otherwise,! it! is! considered! simply! as! an! obligation! "
with! a! penal! clause.! Upon! nonFcompliance! with! the! "
obligation,!the!debtor!can!be!compelled!to!perform!the! "
other!prestation!or!the!accessory!undertaking.!! "
! "
! "
Is* the* substitute* prestation* agreed* upon* by* the* "
parties?** "
Yes.! There! can! never! be! a! valid! facultative! obligation! "
when! the! substitute! prestation! has! not! been! agreed! "
upon.! Otherwise! if! the! debtor! has! the! right! to! make! a! "
substitution! without! the! substitute! prestation! having! "
been!agreed!upon,!it!may!be!prejudicial!to!the!creditor! "
because!such!will!give!the!right!to!the!debtor!to!deliver! "
an!inferior!prestation.!! "
! "
" "
" "
" "
" "
" "

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Villaroel"v."Estrada" involved!50!quiones!of!land,!of!which!the!20!quiones!of!
Whether&or&not&the&right&to&prescription&may&be&waived& land!mentioned!formed!part.!
or&renounced.& !
& A! compromise! agreement! between! the! Deudors! and!
As!a!general!rule,!when!a!debt!has!already!prescribed,! Tuason! &! Co.! was! entered! into! on! 1963! which! was!
it!cannot!be!imposed!by!the!creditor.!However,!a!new! approved!by!court.!
contract!which!recognizes!and!assumes!the!prescribed! !
debt! is! an! exception,! for! it! would! be! valid! and! Cruz! alleged! that! Tuason! &! Co.! promised! to! convey!
enforceable.! Hence,! a! person! who! acknowledges! the! him! the! 3,000! sq.! meters! of! land! occupied! by! him!
correctness!of!the!debt!and!promises!to!pay!it!despite! which! was! part! of! the! 20! quiones! of! land! within! 10!
knowing!that!the!debt!has!already!prescribed,!such!as! years! from! the! date! of! signing! of! the! compromise!
the!case!at!bar,!waived!the!benefit!of!the!prescription.! agreement! between! the! Deudors! and! the! latter! as!
" consideration! of! his! services.! The! said! land! was! not!
Ansay"v."NDC" conveyed!to!him!by!Tuason!&!Co.!
Whether&or&not&the&Christmas&bonus&is&demandable.& !
& Cruz! further! alleged! that! Tuason! &! Co.! was! unjustly!
The! Christmas! bonus! is! not! demandable.! Appellants! enriched!at!his!expense!since!they!enjoyed!the!benefits!
admit! that! appellees! are! not! under! legal! obligation! to! of!the!improvements!he!made!on!the!land!acquired!by!
give! such! claimed! bonus! and! such! grant! only! arises! the!latter.!
from! a! moral! obligation! or! natural! obligation.! !
However,! natural! obligation! is! only! enforceable! with! The! trial! court! dismissed! the! case! on! the! ground! that!
the!presence!of!the!element!of!voluntary!fulfillment!by! there!was!no!cause!of!action.!Hence,!this!appeal.!
the! obligor.! In! the! case! at! bar,! there! has! been! no! !
voluntary!performance!on!the!part!of!the!appellees.! ISSUE:! Whether! or! not! a! presumed! quasiFcontract! be!
" emerged! as! against! one! part! when! the! subject! matter!
DBP"v."Confesor" thereof! is! already! covered! by! a! contract! with! another!
Whether& or& not& a& promissory& which& was& executed& in& party.!
consideration& of& a& previous& promissory& note& which& has& !
already&been&barred&by&prescription&is&valid.& HELD:! From! the! very! language! of! this! provision,! it! is!
! obvious! that! a! presumed! qauasiFcontract! cannot!
Yes,! the! second! promissory! note! is! valid! because! the! emerge! as! against! one! party! when! the! subject! mater!
said!promissory!note!is!not!a!mere!acknowledgement! thereof!is!already!covered!by!an!existing!contract!with!
of! the! debt! that! has! prescribed! already.! Rather,! it! is! a! another!party.!Predicated!on!the!principle!that!no!one!
new!promise!to!pay!the!debt.!A!new!promise!is!a!new! should! be! allowed! to! unjustly! enrich! himself! at! the!
cause!of!action.!Although!a!debt!barred!by!prescription! expense! of! another,! Article! 2124! creates! the! legal!
is! unenforceable,! a! new! contract! recognizing! and! fiction! of! a! quasiFcontract! precisely! because! of! the!
assuming! the! prescribed! debt! would! be! valid! and! absence! of! any! actual! agreement! between! the! parties!
enforceable.! concerned.! Corollarily,! if! the! one! who! claims! having!
! enriched!somebody!has!done!so!pursuant!to!a!contract!
Cruz"v."Tuason" with!a!third!party,!his!cause!of!action!should!be!against!
As! requested! by! the! Deudors,! the! family! of! Telesforo! the! latter,! who! in! turn! may,! if! there! is! any! ground!
Deudor! who! laid! claim! in! question! on! the! strength! of! therefor,! seek! relief! against! the! party! benefited.! It! is!
an! informacion! posesoria,! Cruz! made! permanent! essential! that! the! act! by! which! the! defendant! is!
improvements!on!the!said!land!having!an!area!of!more! benefited!must!have!been!voluntary!and!unilateral!on!
or!less!20!quinones.! the! part! of! the! plaintiff.! As! one! distinguished! civilian!
! puts! it,! "The! act! is! voluntary.! because! the! actor! in!
The! improvements! were! valued! at! P30,400! and! for! quasiFcontracts! is! not! bound! by! any! preFexisting!
which!he!incurred!expenses!amounting!to!P7,781.74! obligation!to!act.!It!is!unilateral,!because!it!arises!from!
! the!sole!will!of!the!actor!who!is!not!previously!bound!
In! 1952,! Tuason! &! Co.! availed! of! Cruz’! services! as! an! by! any! reciprocal! or! bilateral! agreement.! The! reason!
intermediary! with! the! Deudors,! to! work! for! the! why! the! law! creates! a! juridical! relations! and! imposes!
amicable! settlement! in! a! civil! case.! The! said! case! certain! obligation! is! to! prevent! a! situation! where! a!
person! is! able! to! benefit! or! take! advantage! of! such!

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lawful,!voluntary!and!unilateral!acts!at!the!expense!of! There! was! a! mistake,! not! negligence,! in! the! second!
said! actor."! In! the! case! at! bar,! since! appellant! has! a! remittance.! It! was! evident! by! the! fact! that! both!
clearer! and! more! direct! recourse! against! the! Deudors! remittances!have!the!same!reference!invoice!number.!
with! whom! he! had! entered! into! an! agreement! "
regarding! the! improvements! and! expenditures! made! "
by! him! on! the! land! of! appellees.! It! Cannot! be! said,! in! Puyat"&"Sons"v."Manila!
the!sense!contemplated!in!Article!2142,!that!appellees! Whether& or& not& the& defendant& is& obliged& to& refund& the&
have!been!enriched!at!the!expense!of!appellant.! amount&which&the&plaintiff&paid&
" !
Gutierrez"v."Orense" HELD:! Yes.! The! plaintiff! was! actually! exempted! from!
Whether&or&not&Orense&is&bound&by&his&nephew&Duran’s& paying!the!tax!assessed,!hence,!it!was!clearly!an!error!
act&of&selling&the&former’s&property& or! mistake! which! makes! it! fall! under! Art! 2154! of!
! solutio!indebiti.!Art!2154!provides!that!if!something!is!
Yes.!It!was!proven!during!trial!that!he!gave!his!consent! received! when! there! is! no! right! to! demand! it,! and! it!
to! the! sale.! Such! act! of! Orense! impliedly! conferred! to! was! unduly! delivered! through! mistake,! the! obligation!
Duran! the! power! of! agency.! The! principal! must! to!return!it!arises.!
therefore! fulfill! all! the! obligations! contracted! by! the! !
agent,!who!acted!within!the!scope!of!his!jurisdiction.! Alongside!with!this,!Art!2156!is!also!applicable!which!
" states!that!if!the!payer!was!in!doubt!whether!the!debt!
Adille"v."CA" was! due,! he! may! recover! if! he! proves! that! it! was! not!
Whether& or& not& a& co)owner& may& acquire& exclusive& due.! Plaintiff! had! duly! proved! that! taxes! were! not!
ownership&over&the&property&held&in&common.& lawfully! due.! Therefore,! there! is! no! doubt! that! the!
& provisions!of!solution!indebiti!apply!in!this!case.!
Whether& or& nor& Rustico& had& constituted& himself& a& !
negotiorum&gestor& Sagrada"v."NACOCO"
! Whether& or& not& the& defendant& is& obliged& to& pay& rentals&
HELD:!No.! The! right! to! repurchase! may! be! exercised! to&the&plaintiff&
by! a! coFowner! with! respect! to! his! share! alone.! &
Although! Rustico! Adille! redeemed! the! property! in! its! HELD:!No.!Nacoco!is!not!liable!to!pay!rentals!prior!the!
entirety,! shouldering! the! expenses! did! not! make! him! judgment.! If! defendantFappellant! is! liable! at! all,! its!
the!owner!of!all!of!it.! obligations,!must!arise!from!any!of!the!four!sources!of!
! obligations,! namley,! law,! contract! or! quasiFcontract,!
Yes.!The!petitioner,!in!taking!over!the!property,!did!so! crime,! or! negligence.! (Article! 1089,! Spanish! Civil!
on! behalf! of! his! coFheirs,! in! which! event,! he! had! Code.)!DefendantFappellant!is!not!guilty!of!any!offense!
constituted! himself! a! negotiorum& gestor! under! Art! at!all,!because!it!entered!the!premises!and!occupied!it!
2144! of! the! Civil! Code,! or! for! his! exclusive! benefit,! in! with! the! permission! of! the! entity! which! had! the! legal!
which! case,! he! is! guilty! of! fraud,! and! must! act! as! control!and!administration!thereof,!the!Allien!Property!
trustee,! the! respondents! being! the! beneficiaries,! Administration.! Neither! was! there! any! negligence! on!
pursuant!to!Art!1456.! its!part.!
! !
Andres"v."Mantrust" People’s"Car"v."Commando"Security"
Whether&or&not&the&private&respondent&has&the&right&to& Whether!or!not!the!defendant!is!obliged!to!indemnify!
recover& the& second& $10,000& remittance& it& had& delivered& the!plaintiff!for!the!entire!costs!as!result!of!the!incident!
to&petitioner& !
! HELD:! Yes.! Plaintiff! was! in! law! liable! to! its! customer!
HELD:! Yes.! Art! 2154! of! the! New! Civil! Code! is! for!the!damages!caused!the!customer’s!car,!which!had!
applicable.! For! this! article! to! apply,! the! following! been!entrusted!into!its!custody.!Plaintiff!therefore!was!
requisites! must! concur:! 1)! that! he! who! paid! was! not! in! law! justified! in! making! good! such! damages! and!
under! obligation! to! do! so;! and! 2)! that! payment! was! relying!in!turn!on!defendant!to!honor!its!contract!and!
made!by!reason!of!an!essential!mistake!of!fact.! indemnify! it! for! such! undisputed! damages,! which! had!
! been! caused! directly! by! the! unlawful! and! wrongful!
! acts! of! defendant’s! security! guard! in! breach! of! their!
contract.!

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! Article! 1903! of! the! Civil! Code! is! not! applicable! to!
Plaintiff! in! law! could! not! tell! its! customer! that! under! obligations! arising! ex! contractu,! but! only! to! extraF
the! Guard! Service! Contract! it! was! not! liable! for! the! contractual!obligations,!or!to!use!the!technical!form!of!
damage! but! the! defendant! since! the! customer! could! expression,! that! article! relates! only! to! culpa! aquiliana!
not! hold! defendant! to! account! for! the! damages! as! he! and!not!to!culpa!contractual.!
had!no!privity!of!contract!with!defendant.! !
! Gutierrez"v."Gutierrez"
Cangco"v."MRR" Whether& or& not& both& the& driver& of& the& truck& and&
Whether!or!not!there!was!a!contributing!negligence!on! automobile& are& liable& for& damages& and& indemnification&
the!part!of!the!plaintiff.! due& to& their& negligence.& What& are& the& legal& obligations&
! of&the&defendants?&
HELD:! In! determining! the! question! of! contributory! &
negligence! in! performing! such! act! –! that! is! to! say,! HELD:! Bonifacio! Gutierrez’s! obligation! arises! from!
whether!the!passenger!acted!prudently!or!recklessly!–! culpa!aquiliana.!On!the!other!hand,!Saturnino!Cortez’s!
the! age,! sex,! and! physical! condition! of! the! passenger! and! his! chauffeur! Abelardo! Velasco’s! obligation! rise!
are! circumstances! necessarily! affecting! the! safety! of! from!culpa!contractual.!
the!passenger,!and!should!be!considered.! !
! The! youth! Bonifacio! was! na! incompetent! chauffeur,!
! that!he!was!driving!at!an!excessive!rate!of!speed,!and!
The! place! was! perfectly! familiar! to! the! plaintiff! as! it! that,! on! approaching! the! bridge! and! the! truck,! he! lost!
was!his!daily!custom!to!get!on!and!off!the!train!at!the! his! head! and! so! contributed! by! his! negligence! to! the!
station.!There!could,!therefore,!be!no!uncertainty!in!his! accident.!The!guaranty!given!by!the!father!at!the!time!
mind!with!regard!either!to!the!length!of!the!step!which! the! son! was! granted! a! license! to! operate! motor!
he! was! required! to! take! or! the! character! of! the! vehicles!made!the!father!responsible!for!the!acts!of!his!
platform!where!he!was!alighting.!The!Supreme!Court’s! son.!Based!on!these!facts,!pursuant!to!the!provisions!of!
conclusion! was! that! the! conduct! of! the! plaintiff! in! Art.!1903!of!the!Civil!Code,!the!father!alone!and!not!the!
undertaking! to! alight! while! the! train! was! yet! slightly! minor! or! the! mother! would! be! liable! for! the! damages!
under! way! was! not! characterized! by! imprudence! and! caused!by!the!minor.!
that! therefore! he! was! not! guilty! of! contributory! !
negligence.! The! liability! of! Saturnino! Cortez,! the! owner! of! the!
" truck,! and! his! chauffeur! Abelardo! Velasco! rests! on! a!
Thus,! the! same! act,! which! constitutes! a! breach! of! different!basis,!namely,!that!of!contract.!
contract!can!also!be!the!source!of!an!extraFcontractual! Question:! Are! contracts! and! quasiFdelicts! mutually!
obligation,!had!no!contract!existed.! exclusive?!!
! Answer:!No.!!
In! a! breach! of! contract,! there! is! a! presumption! of! !
negligence! on! the! part! of! the! defendant! once! the! In! Gutierrez" vs." Gutierrez,! there! was! a! collision!
breach! is! established.! On! the! other! hand,! there! is! no! between! a! bus! and! a! car! and! a! passenger! of! the! bus!
such!presumption!of!negligence!in!quasiFdelict.! was! injured.! It! was! proven! that! the! driver! of! the! car!
! was! a! minor! and! an! incompetent! driver.! The!
The!Supreme!Court!reversed!the!decision!of!the!lower! passenger! sued! against! them! all.! The! Supreme! Court!
court! holding! that! it! was! important! to! note! that! the! held! that! the! bus! driver,! bus! owner! and! the! driver! of!
foundation! of! the! legal! liability! of! the! defendant! was! the! car! (through! his! father)! are! jointly! and! severally!
the! contract! of! carriage,! and! that! the! obligation! to! liable!to!the!passenger.!The!liability!of!the!owner!of!the!
respond! for! the! damage! which! plaintiff! has! suffered! bus! and! the! bus! driver! rests! on! that! of! a! contract.! On!
arises,! if! at! all,! from! the! breach! of! that! contract! by! the!other!hand,!the!father!is!responsible!for!the!acts!of!
reason!of!the!failure!of!defendant!to!exercise!due!care! his!son!and!is!therefore!responsible!for!the!negligence!
in! its! performance.! That! was! to! say,! its! liability! was! of!the!minor.!!
direct! and! immediate,! differing! essentially,! in! legal! !
viewpoint!from!that!presumptive!responsibility!for!the! Here,!it!is!clear!that!breach!of!contract!and!quasiFdelict!
negligence! of! its! servants,! imposed! by! article! 1903! of! are!separate.!!
the! Civil! Code,! which! can! be! rebutted! by! proof! of! the! !
exercise!of!due!care!in!their!selection!and!supervision.!

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However,! they! can! overlap! as! can! be! seen! in! the! !
following! example:! Bus! driver! drives! recklessly! and! The!MeTC!ruled!that!the!nature!of!HSBCs!demands!for!
the! bus! hits! a! tree.! A! passenger! is! injured.! The! payment!is!civil!and!has!no!connection!to!the!ongoing!
passenger! and! sue! the! driver! for! quasiFdelict! (due! to! labor!dispute.!!
negligence)! or! for! crime! or! the! bus! company! for! !
breach! of! contract! of! carriage! or! for! quasiF! delict! The! loans! secured! by! their! future! retirement! benefits!
(negligence!in!the!selection!and!supervision).!!! to! which! they! are! no! longer! entitled! are! reduced! to!
" unsecured! and! pure! civil! obligations.! They! are!
HSBCDSRP"v."Sps."Broqueza" immediately!demandable.!!
! The! RTC! reaffirmed! the! decision! but! the! CA! reversed!
FACTS:!! it.!!
Petitioners! Gerong! and! Editha! Broqueza! are! !
employees! of! Hongkong! and! Shanghai! Banking! On! Aug.! 6,! 2007,! HSBCLFSRP! filed! a! manifestation!
Corporation!(HSBC).!! withdrawing! the! petition! against! Gerong! because! she!
! already!settled!her!obligations.!!
They!are!also!members!of!HSBC,!Ltd.!Staff!Retirement! !
Plan.!! ISSUE:!!
! Whether!or!not!the!loans!of!the!Sps.!Broqueza!is!a!pure!
The! Plan! is! a! retirement! plan! established! by! HSBC! obligation! and! demandable! at! once! even! if! they! were!
through!its!BOT!for!the!benefit!of!the!employees.!! dismissed!by!HSBC.!!
! !
On! Oct.! 1,! 1990,! petitioner! Broqueza! obtained! a! car! HELD:!!
loan!in!the!amount!of!P175,000.00.!! The!RTC!is!correct!in!ruling!that!since!the!Promissory!
! Notes! do! not! contain! a! period,! HSBCLFSRP! has! the!
On! Dec.! 12,! 1991,! she! again! applied! and! was! granted! right!to!demand!immediate!payment.!!
an!appliance!loan!in!the!amount!of!P24,000.00.!! !
! Art.!1179!of!the!NCC!applies.!!
Petitioner!Gerong,!on!the!other!hand!applied!and!was! !
granted! an! emergency! loan! in! the! amount! of! The! spouses! obligation! to! pay! HSBCLFSRP! is! a! pure!
P35,780.00!on!June!2,!1993.!! obligation!because!they!do!not!contain!a!period.!!Once!
! Editha! Broqueza! defaulted! in! her! monthly! payment,!
The! loans! were! paid! through! automatic! salary! HSBCLFSRP! made! a! demand! to! enforce! a! pure!
deductions.!! obligation.!!
! !
A! labor! dispute! arose! between! HSBC! and! its! Despite! the! spouses! Broquezas! protestations,! the!
employees.!! payroll! deduction! is! merely! a! convenient! mode! of!
! payment! and! not! the! sole! source! of! payment! for! the!
Majority!of!HSBCs!employees!were!terminated!among! loans.!!
them!the!petitioners.!! !
! HSBCLFSRP! never! agreed! that! the! loans! will! be! paid!
The! employees! filed! an! illegal! dismissal! case! before! only!though!salary!deductions.!The!same!never!agreed!
the! NLRC! against! HSBC,! which! is! now! pending! before! that! if! Editha! Broqueza! ceases! to! be! an! employee! of!
the!CA.!! HSBC,! her! obligation! to! pay! the! loans! will! be!
! suspended.!!
Because! of! the! dismissal,! petitioners! were! not! able! to! !
pay! the! monthly! amortizations! of! their! respective! HSBCLFSRP! can! immediately! demand! payment! of! the!
loans.! They! were! considered! delinquent.! Demands! to! loans! anytime! because! the! obligation! to! pay! has! no!
pay!were!made.!! period.! Moreover,! the! spouses! Broqueza! have! already!
! incurred!in!default!in!paying!the!monthly!installments.!!
On! July! 31,! 1996,! HSBCLFSRP! filed! a! civil! case! against! !
the! spouses.! On! Sept.! 19,! 1996,! HSBCLFSRP! filed! Finally,!the!enforcement!of!a!loan!agreement!involves!
another! civil! case.! Both! suits! were! civil! actions! for! debtorFcreditor!relation!founded!on!contract!and!does!
recovery!and!collection!of!sums!of!money.!! not! in! any! way! concern! the! employee! relations.! As!

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such! it! should! be! enforced! through! a! separate! civil! !
action! in! the! regular! courts! and! not! before! the! Labor! !
Arbiter.!! !
! !
Pay"v."Palanca" !
! !
The! promissory! note! indicated! payment! “upon! !
demand”.! Petitioner! relied! on! this! to! mean! that! !
prescription! would! not! lie! unless! there! is! demand! !
from!them.!The!petition!was!filed!fifteen!years!after!its! !
issuance.! !
! !
ISSUE! !
Whether! or! not! a! promissory! note! to! be! paid! “upon! !
demand”!is!immediately!due!and!demandable.! !
! !
RULING! !
YES.! Every! obligation! whose! performance! does! not! !
depend! upon! a! future! or! uncertain! event,! or! upon! a! !
past! event! unknown! to! the! parties,! is! demandable! at! !
once!(Art.!1179!of!the!New!Civil!Code).!The!obligation! !
being! due! and! demandable! in! this! case,! it! would! !
appear!that!the!filing!of!the!suit!after!fifteen!years!was! !
much!too!late.! !
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February!8,!2016!! !
MakeFup!class! Saura!v.!DBP!
" Mutual!desistance!is!also!a!mode!of!extinguishment.!
MODES"OF"EXTINGUISHMENT" !
!
Obligations!are!extinguished!by:! Rationale:! If! an! obligation! may! arise! from! the! mutual!
1. Payment!or!performance! agreement! f! the! parties! then! an! obligation! may!
2. Loss!of!the!thing!due! likewise! be! extinguished! by! their! mutual!
3. Condonation!or!remission!of!the!debt! disagreement.!
4. Confusion! or! merger! of! the! rights! of! creditor! and! !
debtor;! Tolentino:&
5. Compensation;! As!a!rule,!death!does!not!extinguish!the!obligation.!
6. Novation! !
! Uribe:&
Other!causes!of!extinguishment!of!obligations!such!as! This!rule!is!only!applicable!in!obligations!arising&from&
Annulment,! Rescission,! Fulfillment! of! a! resolutory! contracts&
condition,!and!Prescription,!are!governed!elsewhere!in! !
this!Code.! Article"1311"
! Obligations! arising! from! contracts! are! transmissible!
When! the! obligation! involved! is! a! conditional! except! when! it! involves! purely! personal! obligations!
obligation,! where! the! condition! is! suspensive! and! the! (which&extinguishes&the&obligation)!
fulfillment!of!the!c!is!dependent!on!the!sole!will!of!the! !
debtor,! will! the! discussion! on! dacion& en& pago! a! Is&fortuitous&event&a&mode&of&extinguishment?&
relevant!matter?! NO.! Though,! it! is! relevant! to! loss! of! the! thing! due! or!
! impossibility!of!its!performance.!!!
No.!!Article"1182! !
The!obligation!is!void.!!Thus,!a!discussion!on!modes!of! In! other! words,! fortuitous! event! per&se,! is! not! a! mode!
extinguishment! is! irrelevant.! ! There! can! only! be! a! of!extinguishment!simply!because!not!every!time!there!
relevant! discussion! of! the! modes! if! there! is! a! valid! is! a! fortuitous! event! that! the! obligation! will! be!
obligation.! extinguished.!
! !
Citizen’s!Surety!v.!CA! Is& compromise& agreement& among& the& “other”& modes& of&
In! that! case,! Pascual! Enterprises! was! saying! that! it! extinguishment?&
cannot!be!held!liable!under!the!Indemnity!Agreement! &
because!the!execution!of!the!Deed!of!Assignment!was! Uribe:&
by! way! of! dacion& en& pago& which! it! extinguished! its! I! cannot! agree! to! that! because! it! would! fall! under!
obligation!under!the!Indemnity!Agreement.! condonation!or!novation.!
! !
It! turned! out! that! the! Indemnity! Agreement! and! the! !
Deed! of! Assignment! were! executed& on& the& very& same& Tolentino:&
day.!!The!implication!is!that!the!surety!company!at!the! Among&the&other&modes,&nullity&of&contracts&
time!the!Deed!of!Assignment!was!executed!was!not!yet! &
liable!under!the!Suretyship!agreement.! Uribe:&
! I! disagree.! How! can! nullity! of! contracts! be! a! mode! of!
In!a!Suretyship!agreement,!you!will!only!be!liable!if!the! extinguished!if!there!is!no!valid!obligation?!
principal! debtor! defaulted.! ! Since! it! was! executed! on! !
the! same! day,! there! was! no! default! yet.! ! Thus,! the! !
Indemnity! Agreement! is! only! to! indemnify! in! case! he! !
cannot!pay!in!the!Suretyship!agreement.!!! !
! !
Since! there! is! no! obligation! to! be! extinguished! at! the! !
time! the! Deed! of! Assignment! was! executed,! it! cannot! !
be!considered!as!dacion&en&pago.!!The!SC!ruled!that!the! !
Deed!of!Assignment!is!merely!another!security.! !

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! If! X! HAS" AN" INTEREST! and! he! pays! B! who! accepted!
" the!same.!!Can&X&foreclose&the&mortgage?&
PAYMENT"or"PERFORMANCE" Yes,! because! upon! payment! he! will! be! subrogated!
! because!this!is!payment!of!a!person!who!has!interest.!!
Payment!is!applicable!to!any!kind!of!obligation.!!Even! !
obligations! to! do! or! not! to! do! can! be! extinguished! by! Also,! even! if! X! does! not! have! an! interest! in! the!
this!mode!because!it!is!synonymous!to!performance.! fulfillment! of! the! obligation! but! when! he! made! the!
! payment! there! was! consent! by! A,! there! will! also! be!
4!Rules:! subrogation.! ! Thus,! he! can! validly! demand! the! entire!
1. Person!who!pays! amount!paid.!
2. Person!to!whom!payment!is!made! !
3. Thing! to! be! delivered! or! prestation! to! be! What& if& X& and& B& agreed& that& upon& payment& he& will& be&
performed! subrogated?&
4. Place,!date,!time,!manner!of!payment! As! long! as! the! payment! of! a! 3rd! person! who! does! not!
! have! an! interest! was! made! without! the! knowledge! or!
PAYOR"(person!who!pays)! against! the! will! of! the! debtor,! he! will! NOT! be!
! subrogated!even!if!X!and!B!agreed!upon!or!stipulated!
A!!!B! otherwise.!
! !
!!!!!!!!!X!(3rd!person)! X! paid! B! without! the! intention! of! seeking!
" reimbursement.!!However,!2!weeks!after,!X!demanded!
Will& an& obligation& be& extinguished& if& an& offer& to& pay& from! B! the! return! of! the! amount! he! previously! paid,!
came&from&a&3rd&person?& can&he&validly&demand&the&return?!
It! depends! on! whether! B! will! accept! what! was! being! NO.!!The!law!expressly!provides!that!B!can!retain!the!
offered! by! X! because! the! general! rule! is! that! the! amount! paid.! (indirect! donation:! void! donation! but!
creditor!cannot!be!compelled!to!accept!payment!from! valid!payment)!
a!third!person!unless!it!was!stipulated.! !
! However,! if! X! dies,! A! would! have! to! return! the! entire!
P100,000" amount!to!the!estate!since!the!donation!was!void.!
If&X&pays&B,&how&much&can&X&validly&demand&from&A?& !
It!depends!on!whether!or!not!X!has!an!interest!in!the! What& if& a& 14)year& old& minor& makes& the& payment,& is& it&
fulfillment!of!the!obligation.! valid?!!Can!the!creditor!retain!the!amount!paid?!
! No.!Minor!does!not!have!a!capacity.!
Who&has&an&interest?& !
Those!who!are!subsidiarily!obliged!have!an!interest!–! What! if! the! payment! was! made! by! a! person! suffering!
pledgors,! mortgagors,! guarantors,! sureties,! one! made! from!civil!interdiction?!Valid?!
liable!under!a!penal!clause! No,! the! payor! must! have! free! disposal! of! his!
! properties.!
If!X!DOES"NOT!have!an!interest,!X!can!validly!demand! !
from!A!to&the&extent&that&the&latter&has&benefited.! PAYEE"(person!to!whom!payment!was!made)"
! !
If&A&couldn’t&pay,&can&X&foreclose&the&mortgage?& Payment!shall!be!made!to:!
NO! (Premise:! He! is! a! 3rd! person! who! doesn’t! have! an! 1. person!in!whose!favor!the!obligation!has!been!
interest! in! the! fulfillment! of! the! obligation! and! the! constituted;!or!
payment!was!made!without!the!knowledge!or!against! 2. his!successor!in!interest,!or!
the!will!of!A)! 3. any!person!authorized!to!receive!it!
! !
Under! the! law,! he! cannot! foreclose! because! he! will! “in&whose&favor…”&
never! be! subrogated! in! the! rights! of! the! creditor! Fcreditor!
therefore,! he! cannot! exercise! whatever! right! the! !
creditor!had!not!only!against!the!debtor!but!every!one! “successor&in&interest”&
of!those!subsidiarily!liable.! Fheirs!
! !
“authority&to&receive&payment”&
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Fauthority! by! law! (sheriff,! executors,! administrators,! when!X!paid!A,!he!did!it!in!good!faith.!(because&he&paid&
liquidators,!receivers,!etc)! to&a&person&in&possession&of&the&credit)!
Fagents!are!creditors!(but!not!in!their!own!right)! !
*As!long!as!you!have!the!power!to!demand!fulfillment,! As!long!as!X!was!not!aware!of!the!defect!of!the!title!of!
you!are!considered!as!a!creditor.! A,!it!will!extinguish!his!obligation!to!Y.!
! *
What&if&the&payment&was&made&to&a&wrong&party?! New!SC!case:!
General" Rule:! Void! thus! it! will! not! extinguish! the! Plaintiff! was! the! one! claiming! ownership! of! the! land!
obligation! which! was! expropriated! by! NAPOCOR.! SC! ordered!
Exceptions:! NAPOCOR!to!pay,!thereafter,!A!appeared!claiming!that!
1. If!it!redounded!to!the!benefit!of!the!creditor!! he! is! the! real! owner! of! the! land.! !Can&NAPOCOR&again&
2. Payment! made! in! good! faith! to! a! person! in! be&compelled&to&pay?&&
possession!of!the!credit! NO.!because!NAPOCOR!paid!X!in!good!faith.!
3. Payment! was! made! to! the! creditor! after! the! *
assignment!of!credit!to!a!3rd!person!but!without! “made*to*the*creditor*after*the*assignment*of*credit*
knowledge!of!the!assignment! to* a* 3rd* person* but* without* knowledge* of* the*
! assignment”*
“redounded*to*the*benefit*of*the*creditor”* !
* X!!!Y!
X!!!Y! !!!!!!!!!A!
!!!!!!!!!A! Y!assigned!his!interest!to!A!but!after&the&assignment,!X!
! paid!Y.!
X!is!the!debtor!of!Y!but!he!made!the!payment!to!A.!!As! !
a!general!rule,!it!is!void.! Will&that&extinguish&to&A&even&if&it&was&made&to&a&wrong&
! party?&
As! a! rule,! X! has! the! burden! of! proving! that! the! Yes,! as! long! as! the! payment! was! made! AFTER! the!
payment!made!to!A!redounded!to!the!benefit!of!Y! assignment! and! without! the! knowledge! of! such!
! assignment.!
Exceptions:! !
Article"1241" What&is&A’s&remedy,&if&any?&
1. If!Y!ratified!the!payment;! He!can!hold!Y!liable!
2. If! the! payment! was! made! to! A! because! of! the! !
acts! of! Y! which! led! X! to! believe! that! A! had! the! !
authority!to!receive!payment!(estoppel)! X!borrowed!P20,000!to!Y.!!!
3. !If!A!acquired!the!rights!of!Y!AFTER!the!payment! Thereafter,!X!offered!to!pay!Y!but!only!P10,000.!!!
! Y!refused.!!!
“made*in*good*faith*to*a*person*in*possession*of*the* X! met! the! 22Fyear! old! son! of! Y! and! he! offered! the!
credit”* P10,000!to!Y!which!Y!accepted!but!the!money!which!Y!
* accepted!was!lost.!
X!!!Y!! !
Promissory!Note!is!with!A!(wrong&party)! How!can!Y!validly!demand!from!X?!P20,000"
! This! is! clearly! a! payment! to! a! wrong! party! and! does!
Nonetheless,! A! demanded! payment! from! X! who! paid! not!fall!under!any!of!the!exceptions.!
the!same.!!Will&that&extinguish&the&obligation&of&X&to&Y?& !
! !
If! the! name! indicated! in! the! promissory! note! is! Y’s! !
name! (without! any! deed! of! assignment),! then! it! will! !
not!extinguish!the!obligation!because!it!was!not!made! !
to!a!person!in&possession&of&the&credit.! !
! !
If! the! promissory! note! is! payable! to! bearer,! then! the! !
obligation! of! X! to! Y! shall! be! extinguished! as! long! as! !
!

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!
! !!!!
!
!
! !!!!!!!!!!!!
! Not! necessarily.! ! Because! there! can! be! an! agreement!
! but! there! is! no! obligation! arising! from! the! said!
! agreement.!
! !
2"Important"Principles" Is*“dation*in*payment”*a*contract?*
" No.!!It!is!a!special!form!of!payment,!thus!it!is!a!mode!of!
1. Substantial"Performance"(Art.!1234)" extinguishment! whereas! a! contract! is! a! source! of!
Tuason!v.!Javier! obligation,! it! does! not! extinguish,! it! creates! an!
Legarda!v.!Saldaña! obligation.!
!
!
Criticisms!in!the!Definition!
Debt! was! payable! in! 10! years! and! the! debtor!
1. “to*give*something*or*to*render*some*service”*
have!already!paid!for!8!years.!!Thus!the!creditor!
Obligations! not! to! do! may! also! arise! from!
invoked!rescission!as!a!remedy.!
contracts!such!as!obligation!not!to!put!up!a!fence!
!
or! obligation! not! to! sell! the! products! of! a!
Was&rescission&a&valid&remedy?&&
competitor! companies! or! not! to! convert! a! Honda!
NO! because! there! was! already! a! substantial!
car!into!a!taxi!!
performance! !
! 2. “one*binds*himself*with*respect*to*another”*
The! remedy! can! be! specific! performance! plus! Most! contracts! would! result! to! reciprocal!
damages! obligations;!bilateral!
! !
! 3. “two*persons”*
Azcona!v.!Jamandre! Is&it&possible&for&a&contract&to&be&perfected&with&only&
As!agreed!upon!in!a!contract!of!lease,!the!amount!to!be! one& person& participating& in& the& contract& such& as& a&
paid!on!an!annual!basis!was!P7,200.!!Lessee!paid!only! promissory&note&or&a&deed&of&sale?&
P7,000!evidenced!by!a!receipt!issued!by!the!lessor!“as* !
per*contract”* Yes,!in!an!autoDcontract.!
! One! person! is! responsible! for! the! perfection! but!
The! SC! ruled! that! applying! Article! 1235,! despite! that! this!person!is!acting!in!two!capacities:!one!he!may!
the!payment!was!incomplete,!the!creditor!accepted!the! act!on!behalf!of!another!and!the!other,!on!behalf!of!
payment! knowing& its& incompleteness& and& without& himself!or!a!third!person!
objection&or&protest,!the!obligation!is!deemed!complied! !
with.! Example:!Contract!of!Agency!
! !
! If* A* authorized* B* to* borrow* money.* * May* B*
! himself*without*the*consent*of*A*be*the*lender*in*
! relation*to*this*contract*of*loan?*
! Yes,! the! only! requirement! of! law! is! that! the!
! interest!rate!must!be!the!current!rate.!!Thus,!B!will!
! be! signing! for! himself! as! a! lender! and! also! as! the!
! borrower!representing!A.!
! !
! Void!autoFcontracts!(Article!1491)!
! Example:!Contract!of!Sale!
! The! guardian! is! the! buyer! and! the! property!
! involved!belongs!to!his!ward!and!the!seller!is!also!
! the! guardian! representing! the! ward;! the! law!
! expressly! provides! that! the! following! cannot!
CONTRACTS" acquire!by!purchase.!(void)!
! !
If*2*persons*had*an*agreement,*does*that*mean*that* Fundamental!Characteristics!of!Contracts!
they*entered*into*a*contract?* !
1. Consensuality!!
2. Autonomy!
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!
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!
!
! !!!!!!!!!!!!
3. Mutuality!! mortgagee! bank! that! there! was! a! stipulation! in! the!
4. Obligatory!force!! contract! that! the! mortgagor! waived! his! right! of!
5. Relativity!! redemption.! ! Despite! the! waiver,! the! SC! held! that! yes!
! the! mortgagor! may! redeem.! ! The! waiver! is! void!
Consensuality" because! it! is! contained! in! a! contract! of! adhesion.! ! (it&
For!a!contract!to!be!valid!under!this!principle,!consent! goes&into&the&voluntariness&of&the&act)!
must! be! freely& and& voluntary& given.& It’s! not! merely! !
consent.! Autonomy""
& Article!1306!
Republic!v.!PLDT! !
The!RP!filed!an!action!to!compel!PLDT!to!enter!into!an! Acceleration"clause"
inter)connection&agreement.! A! provision! in! a! contract! or! promissory! note! that! if!
! some!event!(such!as!when!the!debtor!fails!to!make!any!
During! that! time,! PLDT! has! absolute! monopoly! in! one! of! the! installment! payment)! occurs,! then! the!
telecommunications! in! the! country.! ! It! also! had! entire!amount!shall!be!due!and!demandable!
overseas!monopoly!except!for!the!United!States.! !
! Banco!Filipino!v.!Navarro!
The! SC! held! that! the! government! cannot! compel! Escalation"clause"
anyone! to! enter! into! a! contract! because! a! contract! Fit!must!be!based!on!a!valid!or!reasonable!standard!
requires!consent!which!must!be!voluntarily!given.!!! !
! Example:!Contract!of!Loan!
The! SC! also! ruled! that! the! action! can! be! an! !
expropriation!proceeding.! If! the! interest! rate! is! dependent! solely! on! the! will! of!
! the!bank,!then!it!is!void.!
Contract"of"Adhesion" !
A!contract!of!adhesion!is!defined!as!one!in!which!one! If! the! interest! rate! is! dependent! on! the! market! rate,!
of! the! parties! imposes! a! ready)made! form! of! contract,! then! it! shall! be! valid.! ! However,! the! BSP! issued! a!
which!the!other!party!may!accept!or!reject,!but!which! circular! as! far! as! the! requirement! for! an! escalation!
the! latter! cannot! modify.! One! party! prepares! the! clause!to!be!valid!is!that:!!!
stipulation! in! the! contract,! while! the! other! party! !
merely!affixes!his!signature!or!his!"adhesion"!thereto,! 1. It! must! be! based! on! a! valid! and! reasonable!
giving!no!room!for!negotiation!and!depriving!the!latter! standard;!
of!the!opportunity!to!bargain!on!equal!footing.! 2. There!should!be!a!deFescalation!clause;!
! 3. The!clause!can!only!be!invoked!(for!the!increase!
It! must! be! borne! in! mind,! however,! that! contracts! of! in!the!rate)!only!once!a!year;!
adhesion! are! not&invalid! per! se.! The! one! who! adheres! 4. For! the! increase! of! the! rate,! the! remaining!
to!the!contract!is,!in!reality,!free!to!reject!it!entirely;!if! period!in!the!contract!must!at!least!be!730!days!
he!adheres,!he!gives!his!consent.! !
" Tiu!v.!Platinum!Plans!
Thus,!even!if!only!one!is!the!“stronger!party”,!the!other! NonDinvolvement"clause"
still! adhered! to! the! terms! and! conditions! thus! it! is! Daisy! Tiu! (Asst.! VP! of! Platinum! Plans! for! the! entire!
valid.! AsiaFPacific! Region)! raised! as! a! defense! that! the!
! stipulation! is! void! because! it! is! an! unreasonable!
PAL!case! restraint!of!trade.!
A! passenger’s! luggage! was! lost! so! he! sued! PAL! for! !
damages.! ! PAL! raised! the! defense! that! it! can! only! be! The!SC!held!that!this!is!a!valid!stipulation!because!it!is!
liable! for! P100! because! it! was! stipulated! in! the! terms! a! reasonable! limitation! on! the! rights! of! the! employee!
and!conditions.!!SC!sustained.! and!protection!on!the!part!of!the!employer.!
! !
! !
Leal!v.!IAC! !
Real! estate! mortgage,! the! principal! debtor! defaulted! Bar"Question"1996"
and! he! manifested! his! intention! to! redeem! but! the!

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!
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!
!
! !!!!!!!!!!!!
Alma! was! hired! as! a! domestic! helper! in! Hongkong! by! At! present,! only! the! second! is! still! a! public! policy.!!
the! Dragon! Services,! Ltd.,! through! its! local! agent.! She! Under! the! present! Constitution,! the! first! one! is! no!
executed!a!standard!employment!contract!designed!by! longer!a!right!since!COMELEC!can!already!declare!one!
the! Philippine! Overseas! Workers! Administration! as!a!nuisance!candidate.!
(POEA)! for! overseas! Filipino! workers.! It! provided! for! !
her! employment! for! one! year! at! a! salary! of! Article"1306"
US$1,000.00! a! month.! It! was! submitted! to! and! The&contracting&parties&may&establish&such&stipulations,&
approved!by!the!POEA.!However,!when!she!arrived!in! clauses,& terms& and& conditions& as& they& may& deem&
Hongkong,! she! was! asked! to! sign! another! contract! by! convenient,& provided& they& are& not& contrary& to& law,&
Dragon!Services,!Ltd.!which!reduced!her!salary!to!only! morals,&good&customs,&public&order,&or&public&policy.&
US$600.00! a! month.! Having! no! other! choice,! Alma! !
signed! the! contract! but! when! she! returned! to! the! Examples!of!void!stipulations!
Philippines,! she! demanded! payment! of! the! salary! !
differential! of! US$400.00! a! month.! Both! Dragon! 1. Pactum*Commissiorium*
Services,! Ltd.! and! its! local! agent! claimed! that! the! Fa! stipulation! in! a! contract! of! pledge! or!
second! contract! is! valid! under! the! laws! of! Hongkong,! mortgage!to!the!effect!that!upon!default!of!the!
and! therefore! binding! on! Alma.&Is&their&claim&correct?& principal! debtor,! the! property! would!
Explain.&& automatically! belong! to! the! pledgee! or!
& mortgagee!
Their! claim! is! not! correct.! A! contract! is! the! law! !
between! the! parties! but! the! law! can! disregard! the! 2. Pactum*de*non*aliendo*
contract!if!it!is!contrary!to!public!policy.!Just!because!a! Fa! stipulation! in! a! real! estate! mortgage!
contract! is! valid! where! it! was! executed! doesn’t! wherein! the! mortgagor! is! prohibited! from!
necessarily! follow! that! it! will! be! valid! here! in! the! alienating!the!Property!without!the!consent!of!
Philippines.!!! the!mortgagee!
! !
Cui!v.!Arellano!University! 3. Pactum*Leonina*
SC! ruled! that! it! is! contrary! to! public! policy.! Fa! stipulation! in! a! contract! of! partnership!
Scholarships! are! granted! on! the! basis! of! merit.! ! It! wherein!one!or!some!of!the!partners!would!be!
should! not! be! used! to! bolster! the! reputation! of! the! excluded!from!sharing!in!the!profits!
school.! ! Since! it! is! based! on! merit,! even! if! the! student! !
will! transfer! to! another! law! school,! he! shall! not! be! 4. Waiver! as! to! future! fraud! is! also! void! as!
required!to!reimburse!the!school.! provided!by!law.!
! !
Saura!v.!Sindico! 5. In!agency,!a!waiver!in!relation!to!the!obligation!
An!agreement!between!2!persons!who!are!vying!for!an! to! render! an! account,! that! the! agent! is! not!
official! nomination! for! the! Nacionalista! Party! in! obliged!to!render!an!account!is!void!
Pangasinan.! ! They! agreed! that! whoever! would! lose! in! !
the! provincial! convention! would! not! run! as! an! 6. In! succession,! a! waiver! as! a! right! to! revoke,!
independent! or! rebel! candidate.! ! Subsequently,! the! even!if!in!a!will!it!is!indicated!that!the!“I!will!not!
one!who!lost!ran!and!he!won.!!Thus,!the!one!who!won! revoke!this!will”!is!void!
sued.!! !
! 7. Public! morals:! In! a! contract! of! loan,! where! the!
SC!held!that!the!stipulation!is!void!because!it!is!void!as! interest! rate! is! unconscionable,! exorbitant,!
to!public!policy:! excessive,! inequitable.! (NEVER! use! the! word!
! usurious)!
1. The! right! of! a! person! to! present! himself! as! a! !
candidate! cannot! be! limited! by! the! mere! 8. When! the! court! had! already! declared! the!
agreement!of!two!or!more!persons;! stipulation! to! be! void,! it! is! contrary! to! law!
2. The!right!of!the!electorate!to!choose!who!among! because! the! decisions! of! the! SC! shall! form! part!
the!candidates!is!fit!for!the!position! of!the!law!of!the!land.!
! !
!

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! !
Mutuality" Relativity""
Article"1308" Article"1311"
The& contract& must& bind& both& contracting& parties;& its& Contracts& take& effect& only& between& the& parties,& their&
validity&or&compliance&cannot&be&left&to&the&will&of&one&of& assigns& and& heirs,& except& in& case& where& the& rights& and&
them.& obligations& arising& from& the& contract& are& not&
! transmissible& by& their& nature,& or& by& stipulation& or& by&
Illustration:! provision&of&law.&The&heir&is&not&liable&beyond&the&value&
If! in! a! contract! of! lease,! there! is! a! stipulation! to! the! of&the&property&he&received&from&the&decedent.&
effect! that! the! lessee! has! the! right! to! terminate! the! &
contract! at! any! time! by! merely! giving! notice! to! the! If&a&contract&should&contain&some&stipulation&in&favor&of&
lessor! and! the! termination! takes! effect! after! 15! days! a& third& person,& he& may& demand& its& fulfillment& provided&
from!receipt!of!notice.! he& communicated& his& acceptance& to& the& obligor& before&
! its&revocation.&A&mere&incidental&benefit&or&interest&of&a&
The!SC!ruled!that!it!is!not!violative!of!the!mutuality!of! person& is& not& sufficient.& The& contracting& parties& must&
contracts! principle! because! it! refers! to! validity! and! have& clearly& and& deliberately& conferred& a& favor& upon& a&
compliance!and!NOT!to!the!termination!of!contracts.! third&person.&
! &
Florendo!v.!CA! PBQs!involve:!
May& a& bank& unilaterally& raise& the& interest& rate& on& a& 1. Who& are& bound& to& the& contract?& May& a& third&
housing& loan& granted& an& employee,& by& reason& of& the& person&be&bound?&
voluntary&resignation&of&the&borrower?& 2. Would& a& third& person& have& a& cause& of& action& in&
! relation&to&a&contract?&
The! SC! ruled! that! the! unilateral! determination! and! 3. May& a& third& person& be& held& liable& under& a&
imposition! of! increased! interest! rates! by! the! herein! contract?&
respondent!bank!is!obviously!violative!of!the!principle! 4. May&a&third&person&be&benefited&by&a&contract?&
of! mutuality! of! contracts! ordained! in! Article! 1308! of! !
the!Civil!Code!! Privity"of"Contracts"principle!
“Contracts& take& effect& only& between& the& parties,& their&
Obligatory"force" assigns&and&heirs”!
Article"1159" !
Obligations&arising&from&contracts&have&the&force&of&law& Thus,!when!an!action!is!filed!by!a!third!person!who!is!
between&the&contracting&parties&and&should&be&complied& not! privy! to! the! contract! against! those! privies,! the!
with&in&good&faith.& action! will! be! dismissed.! ! However,! where! an! action!
! for!rescission!by!way!of!accion!pauliana!
Article"1315" !
Contracts&are&perfected&by&mere&consent,&and&from&that& But! remember,! contracts! is! just! one! of! the! sources! of!
moment&the&parties&are&bound&not&only&to&the&fulfillment& obligations.! ! There! may! not! be! privity! of! contract!
of&what&has&been&expressly&stipulated&but&also&to&all&the& between! two! persons! but! there! may! be! a! cause! of!
consequences& which,& according& to& their& nature,& may& be& action!under!the!other!sources.!!
in&keeping&with&good&faith,&usage&and&law.! !
! Intransmissible"rights"
The!premise!of!this!article!is!that!the!contract"is"valid.!!! There! are! instances! when! the! rights! and! obligations!
! arising! from! such! contract! would! only! affect! the!
When& would& a& contract& have& the& force& of& law& between& parties!thus!the!heirs!and!assign!will!not!be!bound.!!In!
the&contracting&parties?& other! words,! pag& namatay& ang& isang& party,& his& heirs&
Upon!perfection! will&not&acquire&his&rights.!!
Perfection! of! a! contract! is! subject! to! the! Statute! of! !
Frauds! !
! Examples:!!
Can&there&be&a&perfected&contract&if&the&contract&is&void?& Law!
Never.!!It!is!only!when!the!contract!is!perfected!that!a!
party!may!demand!fulfillment!from!the!other!party!
!
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In!a!contract!of!lease,!the!right!of!a!lessee!to!subFlease! Article"1314"
is! a! right! granted! by! law! but! by! stipulation! it! may! be! Any& third& person& who& induces& another& to& violate& his&
prohibited.! contract& shall& be& liable& for& damages& to& the& other&
! contracting&party.&
Rights! of! usufructuary! upon! his! death! will! not! be! !
transmitted! to! his! heirs.! ! The! usufruct! will! be! Interference"by"third"persons"
extinguished! upon! his! death! unless! the! parties! The! law! requires! malicious! inducement.! ! Necessarily,!
stipulated!otherwise.! there!should!be!knowledge.!! But!just!because!there!is!
! knowledge! doesn’t! necessarily! mean! that! there! is!
Nature! malice.!!Read!the!facts!and!circumstances!carefully.!
Rights! and! obligations,! which! are! purely! personal! in! !
character! Note:!!
! This!article!is!considered!by!the!SC!as!an!extension!of!
When& do& the& rights& and& obligations& become& purely& quasiFdelict!
personal?& !
When! the! qualifications! and! skills! of! the! parties! have! Who&would&be&liable?&
been!considered!in!the!constitution!of!the!obligation.! Not! only! the! 3rd! person! who! induced.! ! Both! the! 3rd!
! person!and!the!party!who!himself!violated!the!contract!
Ultimately,! the! relativity! of! contracts! may! extend! to! would!be!solidarily!liable.!
third!persons.! !
" Stipulation"Pour"Atrui"
Article"1312" (Stipulation!in!favor!of!a!3rd&person)!
In& contracts& creating& real& rights,& third& persons& who& It!must!merely!be!a!secondary!matter!in!the!contract.!
come& into& possession& of& the& object& of& the& contract& are& !
bound&thereby,&subject&to&the&provisions&of&the&Mortgage& PBQ:!
Law&and&the&Land&Registration&Laws.&& What! if! the! beneficiary! (3rd! person)! received! a! letter!
! from! the! obligor! saying! “the& benefit& in& your& favor& is&
The! premise! is! that! the! mortgage! is! registered.!! hereby& revoked”& before! he! (the! beneficiary)! could!
However,!even!if!it!is!not!registered,!if!the!third!person! communicate! his! acceptance! to! the! obligor.! ! Is& it&
that! actual& knowledge& then! he! may! still! be! bound! by! possible& for& this& beneficiary& to& be& entitled& to& what& was&
the!contract.! given&to&him!in!the!agreement?!
! !
Real! Estate! Mortgage! executed! by! A! &! B! involving! a! Yes.!!As!a!rule,!the!revocation!must!be!made!with!the!
parcel!of!land!thus,!whoever!will!be!in!possession!shall! consent! of! both! parties! and! made! before! the!
be!bound.!!If!A!sells!the!land!to!X!(third!person)!then!C! communication!of!the!acceptance!by!the!3rd!person!to!
shall! acquire! ownership! but! he! may! be! bound! by! the! the! obligor.! ! Otherwise,! if! the! revocation! was! a!
contract! so! if! the! principal! debtor! defaults,! the! unilateral! act! of! one! of! the! parties! it! violates! the!
mortgagee!may!have!it!foreclosed!and!this!land!may!be! mutuality!of!contracts.!
sold!in!a!foreclosure!sale!and!go!to!the!highest!bidder,! !
X’s!ownership!will!be!terminated.!!! Bar"Question"1999"
! Francis! Albert,! a! citizen! and! resident! of! New! Jersey,!
Article"1313"" U.S.A.,! under! whose! law! he! was! still! a! minor,! being!
Creditors&are&protected&in&cases&of&contracts&intended&to& only!20!years!of!age,!was!hired!by!ABC!Corporation!of!
defraud&them.&& Manila! to! serve! for! two! years! as! its! chief! computer!
! programmer.! But! after! serving! for! only! four! months,!
Ordinarily,! an! action! is! filed! by! a! third! person! who! is! he! resigned! to! join! XYZ! Corporation,! which! enticed!
not! privy! to! the! contract! against! those! privies,! the! him! by! offering! more! advantageous! terms.! His! first!
action!will!be!dismissed.!!! employer!sues!him!in!Manila!for!damages!arising!from!
! the! breach! of! his! contract! of! employment.! He! sets! up!
However,! an! action! for! rescission! by! way! of! accion& his! minority! as! a! defense! and! asks! for! annulment! of!
pauliana!may!prosper.!If!the!contract!was!in!fraud!of!a! the!contract!on!that!ground.!The!plaintiff!disputes!this!
creditor,!such!creditor!would!have!the!right!to!rescind.! by!alleging!that!since!the!contract!was!executed!in!the!
! Philippines!under!whose!law!the!age!of!majority!is!18!

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years,! he! was! no! longer! a! minor! at! the! time! of! Fthose! which! have! for! their! object! the!
perfection! of! the! contract.! ! Will& the& suit& prosper?& establishment! of! a! condition! in! law! which! is!
Suppose& XYZ& Corporation& is& impleaded& as& a& co) necessary! as! a! preliminary! step! towards! the!
defendant,&what&would&be&the&basis&of&its&liability,&if&any?& celebration!of!another!subsequent!contract!
DArticle"1314" Fpartnership,!agency!
! !
Bar"Question"1991" b. Principal"
Roland,! a! basketball! star,! was! under! contract! for! one! Fthose! which! can! subsists! independently! from!
other! contracts! and! whose! purpose! can! be!
year! to! playFforFplay! exclusively! for! Lady! Love,! Inc.!
fulfilled!by!themselves!
However,! even! before! the! basketball! season! could!
Fsale,!lease!
open,!he!was!offered!a!more!attractive!pay!plus!fringes! !
benefits!by!Sweet!Taste,!Inc.!Roland!accepted!the!offer! c. Accessory"
and!transferred!to!Sweet!Taste.!Lady!Love!sues!Roland! Fthose!which!can!exist!only!as!a!consequence!of,!
and! Sweet! Taste! for! breach! of! contract.! Defendants! or!in!relation!with,!another!prior!contract!
claim!that!the!restriction!to!play!for!Lady!Love!alone!is! Fpledge,!mortgage!
void,! hence,! unenforceable,! as! it! constitutes! an! undue! !
interference! with! the! right! of! Roland! 2. As!to!perfection*
to! enter! into! contracts! and! the! impairment! of! his! *
freedom!to!play!and!enjoy!basketball.!! a. Consensual"
! Fthose! which! are! perfected! by! the! mere!
1. Can& Roland& be& bound& by& the& contract& he& agreement!of!the!parties!
entered& into& with& Lady& Love& or& can& he& Fsale,!lease!
disregard&the&same?&& !
2. Is&he&liable&at&all?&How&about&Sweet&Taste?&Is&it& b. Real"
liable&to&Lady&Love?&& Fthose! which! require! not! only! the! consent! of!
& the! parties! for! their! perfection,! but! also! the!
Yes."Article"1159" delivery!of!the!object!by!one!of!the!party!to!the!
other!
Roland! is! bound! by! the! contract! he! entered! into! with!
Fdeposit,!pledge,!commodatum,!mutuum!
Lady! Love! and! he! cannot! disregard! the! same,! under!
!
the! principles! of! obligatoriness! of! contracts.! 3. As!to!solemnity*or*form*
Obligations! arising! from! contracts! have! the! force! of! *
law!between!the!parties.!! a. Informal!or!any!form!
! Fthose!which!require!no!particular!form!
Yes,!Roland!is!liable!under!the!contract!as!far!as!Lady! Floan!
Love! is! concerned.! He! is! liable! for! damages! under! !
Article!1170!of!the!Civil!Code!since!he!contravened!the! b. Formal!or!special!
tenor! of! his! obligation.! Not! being! a! contracting! party,! Fthose!which!require!a!particular!form!
Sweet!Taste!is!not!bound!by!the!contract!but!it!can!be! Fantichresis,!donations,!chattel!mortgage!
held!liable!under!Art.!1314.!The!basis!of!its!liability!is! !
not! prescribed! by! contract! but! is! founded! on! quasi) 4. As!to!purpose!
delict,!assuming!that!Sweet!Taste!knew!of!the!contract.! a. transfer!of!ownership!F!sale!
b. conveyance!of!use!F!commodatum!
Article! 1314! of! the! Civil! Code! provides! that! any! third!
c. rendition!of!service!–!agency!
person! who! induces! another! to! violate! his! contract!
!
shall! be! liable! for! damages! to! the! other! contracting! !
party.!! !
! !
! !
! !
! 5. As!to!nature*of*obligation*produced!
Classification!of!Contracts! !
a. Unilateral"
!
1. As!to!degree*of*dependence* Fthose!which!give!rise!to!an!obligation!for!only!
one!of!the!parties!
*
a. Preparatory" Fcommodatum,!gratuitous!deposit!
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b. Bilateral"
Fthose!which!give!rise!to!reciprocal!obligations!
!
for!both!parties! Pag& sinabing& onerous,& this& is& in& relation& to& others& like&
Fsale,!lease! gratuitous&and&remuneratory.&&This&goes&into&cause.&
! !
6. As!to!cause! !
!
a. Onerous" For!example,!what&is&the&cause&in&a&contract&of&sale?!
Fthose! in! which! each! of! the! parties! aspires! to! It! is! essentially! onerous.! ! Thus,! the! cause! in! such!
procure!for!himself!a!benefit!through!the!giving! contract!as!to!each!contracting!party!is!the!promise!or!
of!an!equivalent!or!compensation! prestation!to!be!performed!by!the!other!party.!
Fsale! !
!
If! a! contract! is! a! gratuitous! contract! ,! the! cause! is! the!
b. Gratuitous"or"lucrative"
Fthose! in! which! one! of! the! parties! proposes! to!
liberality!of!the!grantor.!Example,!commodatum.&
give! to! the! other! a! benefit! without! any! !
equivalent!or!compensation!! Cause"of"Contracts"
Fcommodatum! "
! Article* 1350.& In& onerous& contracts& the& cause& is&
c. Remuneratory" understood& to& be,& for& each& contracting& party,& the&
!
7. As!to!risk* prestation&or&promise&of&a&thing&or&service&by&the&other;&
* in& remuneratory& ones,& the& service& or& benefit& which& is&
a. Commutative" remunerated;& and& in& contracts& of& pure& beneficence,& the&
Fthose! where! each! of! the! parties! acquires! an! mere&liberality&of&the&benefactor.&
equivalent! of! his! prestation! and! such! &
equivalent! is! pecuniarily! appreciable! and! Article* 1351.& The& particular& motives& of& the& parties& in&
already! determined! from! the! moment! of! the! entering& into& a& contract& are& different& from& the& cause&
celebration!of!the!contract!
thereof.&&
Flease!
! &
b. Aleatory" Article*1352.&Contracts&without&cause,&or&with&unlawful&
Fthose! where! each! of! the! parties! has! to! his! cause,&produce&no&effect&whatever.&The&cause&is&unlawful&
account! the! acquisition! of! an! equivalent! of! his! if& it& is& contrary& to& law,& morals,& good& customs,& public&
prestation,! but! such! equivalent! is! not! yet! order&or&public&policy.&&
determined! since! it! depends! upon! the! &
happening! of! an! uncertain! event! thus! charging! Article* 1353.& The& statement& of& a& false& cause& in&
the!parties!with!the!risk!of!loss!or!gain! contracts& shall& render& them& void,& if& it& should& not& be&
Finsurance! proved& that& they& were& founded& upon& another& cause&
!
8. As!to!name* which&is&true&and&lawful.&&
*
&
a. Nominate" Article* 1354.& Although& the& cause& is& not& stated& in& the&
Fthose! which! have! their! own! individuality! and!
contract,& it& is& presumed& that& it& exists& and& is& lawful,&
are!regulated!by!special!provisions!of!law!
unless&the&debtor&proves&the&contrary.&&
Fsales,!lease!
b. Innominate"
&
Fthose! which! lack! individuality! and! are! not! Article*1355.&Except&in&cases&specified&by&law,&lesion&or&
regulated!by!special!provisions!of!law! inadequacy& of& cause& shall& not& invalidate& a& contract,&
! unless&there&has&been&fraud,&mistake&or&undue&influence.&&
9.
As!to!subject*matter* !
a. thing! "
b. right! A! sold! his! only! property! to! B.! But! at! the! time! of! the!
c. service! sale,! A! was! indebted! to! X.! Is& this& sale& considered& “in&
! fraud&of&creditors”?&
Questions!to!ask:! !
1. Why!is!it!a!___!contract?! If! the! question! is:! Because& he& sold& his& only& property,&
2. Ascertain!the!basis!of!the!classification! would& it& raise& a& presumption& that& the& sale& is& made& in&
3. Who!are!obliged?! fraud&of&creditors?&

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It!depends!on!the!circumstances.! Recall:!
& Art."1187"
If!at!the!time!of!the!sale,!there!was!already!a!judgment! The!effects!of!a!conditional!obligation!to!give,!once!the!
against!the!A!in!favor!of!any!creditor,!or!a!court!order! condition!has!been!fulfilled,!shall!retroact!to!the!day!of!
of! garnishment! or! attachment! in! relation! to! the! said! the! constitution! of! the! obligation.! Nevertheless,! when!
property! or! against! him! as! a! debtor,! then! the! law! the!obligation!imposes!reciprocal!prestations!upon!the!
would!already!raise!a!presumption!that!such!sale!is!in! parties,!the!fruits!and!interests!during!the!pendency!of!
fraud! of! creditors! because! a! contract! of! sale! is! an! the! condition! shall! be! deemed! to! have! been! mutually!
alienation!onerous!in!character.! compensated.!If!the!obligation!is!unilateral,!the!debtor!
! shall! appropriate! the! fruits! and! interests! received,!
Thus,! if! the! alienation! is! onerous! in! character,! there! unless! from! the! nature! and! circumstances! of! the!
would! be! a! presumption! that! it! is! made! in! fraud! of! obligation! it! should! be! inferred! that! the! intention! of!
creditors.! the!person!constituting!the!same!was!different.!
! !
2012"case" In! obligations! to! do! and! not! to! do,! the! courts! shall!
Instead!of!sale,!the!debtor!mortgaged!his!property.!!At! determine,! in! each! case,! the! retroactive! effect! of! the!
the! time! of! the! mortgage,! there! was! already! a! condition!that!has!been!complied!with.!
judgment!against!him.!!Would&that&raise&a&presumption& !
that&such&is&made&in&fraud&of&creditors?& Art."1191"
! The! power! to! rescind! obligations! is! implied! in!
FNo,!mortgage!is!not!a!conveyance!of!ownership;!thus,! reciprocal!ones,!in!case!one!of!the!obligors!should!not!
it!is!not!onerous"alienation! comply!with!what!is!incumbent!upon!him.!
! !
On!the!other!hand,!if!the!alienation"is"gratuitous" The!injured!party!may!choose!between!the!fulfillment!
A!is!indebted!to!X.!!A!donated!to!B!his!properties!worth! and!the!rescission!of!the!obligation,!with!the!payment!
7M.! ! What! is! left! is! only! P3M.! ! Will! the! presumption! of!damages!in!either!case.!He!may!also!seek!rescission,!
arise?! even!after!he!has!chosen!fulfillment,!if!the!latter!should!
! become!impossible.!
FNot! necessarily.! It! depends! on! the! amount! of! !
indebtedness.! ! The! presumption! only! applies! that! the! The! court! shall! decree! the! rescission! claimed,! unless!
alienation,! gratuitous! in! character,! is! in! fraud! of! there!be!just!cause!authorizing!the!fixing!of!a!period.!
creditors,! if! the! debtor! did! not! reserve! sufficient! This! is! understood! to! be! without! prejudice! to! the!
properties!to!cover!his!debts.!! rights!of!third!persons!who!have!acquired!the!thing,!in!
! accordance! with! articles! 1385! and! 1388! and! the!
In!obligation!to!deliver!a!specific!car:!When!the!debtor! Mortgage!Law.!
A!delivered!the!car!to!B.!!B!noticed!that!the!stereo!is!no! !
longer!there.!!Who&is&entitled&to&this&stereo?& Art."1169"
& Those! obliged! to! deliver! or! to! do! something! incur! in!
It!depends!on!the!applicable!principle:! delay! from! the! time! the! obligee! judicially! or!
a. Greatest"reciprocity"of"interest" extrajudicially! demands! from! them! the! fulfillment! of!
Fapplicable! only! when! the! obligation! arose! their!obligation.!
from!an!onerous!contract! !
b. Least"transmission"of"rights" However,! the! demand! by! the! creditor! shall! not! be!
Fif!the!transaction!is!gratuitous! necessary!in!order!that!delay!may!exist:!
! (1) When! the! obligation! or! the! law! expressly! so!
In! other! words,! if! the! obligation! of! A! arose! from! a! declare;!or!
contract! of! sale! (onerous),! the! first! one! should! be! (2) When!from!the!nature!and!the!circumstances!
applied,!thus!the!buyer!B,!is!entitled.!!! of! the! obligation! it! appears! that! the!
! designation!of!the!time!when!the!thing!is!to!be!
On! the! other! hand,! if! the! transaction! is! a! donation! delivered!or!the!service!is!to!be!rendered!was!
(gratuitous),!the!donor!shall!be!entitled!to!the!stereo! a! controlling! motive! for! the! establishment! of!
applying!the!second!principle.! the!contract;!or!
! !

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(3) When!demand!would!be!useless,!as!when!the! Contract&of&Option&
obligor! has! rendered! it! beyond! his! power! to! &
perform.! Art."1324"
! When! the! offerer! has! allowed! the! offeree! a! certain!
In!reciprocal!obligations,!neither!party!incurs!in!delay! period! to! accept,! the! offer! may! be! withdrawn! at! any!
if!the!other!does!not!comply!or!is!not!ready!to!comply! time! before! acceptance! by! communicating! such!
in!a!proper!manner!with!what!is!incumbent!upon!him.! withdrawal,!except!when!the!option!is!founded!upon!a!
From! the! moment! one! of! the! parties! fulfills! his! consideration,!as!something!paid!or!promised.!
obligation,!delay!by!the!other!begins.! !
! Art."1479"
What&if&in&a&contract&of&sale,&there&is&no&mention&of&the& A! promise! to! buy! and! sell! a! determinate! thing! for! a!
price.&Will&it&be&valid?& price!certain!is!reciprocally!demandable.!
Yes,! because! it! is! presumed! to! exist! and! presumed! to! !
be!lawful.!!(disputable!presumption)! An! accepted! unilateral! promise! to! buy! or! to! sell! a!
Rationale:! When! one! enters! into! a! contract,! he! has! a! determinate! thing! for! a! price! certain! is! binding! upon!
cause!unless!the!contrary!is!proven.! the! promisor! if! the! promise! is! supported! by! a!
! consideration!distinct!from!the!price.!
What&if&the&price&is&grossly&inadequate?&Will&it&affect&the& !
validity&of&the&contract?& Art."1482"
No.! The! law! provides! that:! “Except! in! cases! specified! Whenever!earnest!money!is!given!in!a!contract!of!sale,!
by! law,! lesion! or! inadequacy! of! shall! not! invalidate! a! it!shall!be!considered!as!part!of!the!price!and!as!proof!
contract,! !unless! there! has! been! fraud,! mistake! or! of!the!perfection!of!the!contract.!
undue!influence.”! !
! If! it! is! merely! an! option! agreement,! the! offerer! may!
! withdraw! the! offer! at! anytime! before! the!
Problem:! communication! of! the! acceptance! to! him! and! he!
A! bought! a! gun! for! the! purpose! of! killing! somebody! cannot!be!held!liable!for!whatever!damage!that!may!be!
else.! ! What& is& the& status& of& the& sale?& If& the& motive& is& caused!to!the!offeree.!
unlawful,& would& the& at& affect& the& validity& of& the& !
contract?& Take! note,! it! is! from! the! time! the! offerer! had!
As!a!rule,!no.!!Motive!is!different!from!cause.!!! knowledge" of" the" acceptance! that! there! would! be! a!
! perfected!contract!(cognition&theory)!
The!SC!ruled!that!the!as!a!general"rule,!the!illegality!of! !
the!motive!does!not!affect!the!validity!of!the!contract.!!! In! an! option! contract,! if! there! is! a! consideration! paid!
! or! promised! but! separate! and! distinct! from! the! price,!
However,! as! an! exception,! if! the! motive! is! illegal! or! the! offerer! cannot! validly! withdraw! the! offer.! ! The!
unlawful!because!it!is!contrary!to!law,!it!may!affect!the! withdrawal!has!to!be!made!within!the!period.!!!
validity!of!the!contract!if!the!motive!predominates!the! !
purpose!of!the!party!in!entering!into!the!contract!such! If&he&would&withdraw&despite&the&consideration,&can&the&
as! to! defraud! his! creditors! making! it! a! Rescissible! offeree& demand& the& performance& of& the& obligations&
contract.! arising&from&the&contract?&
! FNo,!if!he!would!withdraw!despite!the!existence!of!the!
! option! contract,! he! can! be! held! liable! for! damages! for!
! breach!of!the!option!contract.!
" !
Stages"of"Contracts" In! a! case,! it! was! held! that:! Even! if! there! is! no!
" consideration!separate!and!distinct!from!the!price,!but!
1. Negotiation" the! offeree! accepted! before! the! offerer! could!
2. Perfection" withdraw,! the! contract! may! be! considered! as! a!
3. Performance" perfected! contract.! ! Habang& may& offer& at& hindi&
4. Consummation" winiwithdraw&ang&offer!and!there!was!an!acceptance,!a!
" contract!may!be!considered!to!have!been!perfected.!
! !

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Sanchez!v.!Rigos! the!withdrawal!is!conveyed!to!the!offeree,!there!
! is!a!perfected!contract.!
Option"Money" !
The! SC! ruled! that! the! consideration! in! an! option! Bar"Question"2013"
contract!can!be!any!prestation,!not!necessarily!money.! Sergio! is! the! registered! owner! of! a! 500Fsquare! meter!
! land.!His!friend,!Marcelo,!who!has!long!been!interested!
Illustration:! in!the!property,!succeeded!in!persuading!Sergio!to!sell!
On!May!1,!2002,!S!offered!to!sell!a!specific!car!to!B!for! it!to!him.!On!June!2,!2012,!they!agreed!on!the!purchase!
P500,000.00.! B! sent! his! letter! of! acceptance! to! S! on! price!of!P600,000!and!that!Sergio!would!give!Marcelo!
May! 8,! 2002.! On! May! 10,! 2002,! however,! S! died! in! a! up!to!June30,!2012!within!which!to!raise!the!amount.!
vehicular!accident!and!his!secretary!received!the!letter! Marcelo,!in!a!light!tone!usual!between!them,!said!that!
or! acceptance! on! May! 12,! 2002! unaware! that! S! had! they! should! seal! their! agreement! through! a! case! of!
already!died Jack!Daniels!Black!and!P5,000!"pulutan"!money!which!
he!immediately!handed!to!Sergio!and!which!the!latter!
The! contract! was! not! perfected! because! the! offer! of! S! accepted.! The! friends! then! sat! down! and! drank! the!
became! ineffective! when! he! died.! ! Death! before! first!bottle!from!the!case!of!bourbon.!
knowledge! of! the! acceptance! by! the! offeree! !
extinguishes!the!offer;!thus,!there!can!be!no!perfected! On! June! 15,! 2013,! Sergio! learned! of! another! buyer,!
contract.! Roberto,!who!was!offering!P800,000!in!ready!cash!for!
! the!land.!When!Roberto!confirmed!that!he!could!pay!in!
Bar"Question"2005" cash! as! soon! as! Sergio! could! get! the! documentation!
Marvin! offered! to! construct! the! house! of! Carlos! for! a! ready,!Sergio!decided!to!withdraw!his!offer!to!Marcelo,!
very!reasonable!price!of!P900,000.00,!giving!the!latter! hoping! to! just! explain! matters! to! his! friend.! Marcelo,!
10!days!within!which!to!accept!or!reject!the!offer.!On! however,! objected! when! the! withdrawal! was!
the! fifth! day,! before! Carlos! could! make! up! his! mind,! communicated! to! him,! taking! the! position! that! they!
Marvin!withdrew!his!offer.!! have!a!firm!and!binding!agreement!that!Sergio!cannot!
! simply! walk! away! from! because! he! has! an! option! to!
a. What& is& the& effect& of& the& withdrawal& of& Marvin’s& buy!that!is!duly!supported!by!a!duly!accepted!valuable!
offer?!! consideration.!
! !
Carlos! cannot! hold! Marvin! liable! for! damages! a. Does& Marcelo& have& a& cause& of& action& against&
because!the!withdrawal!was!proper.!Here!there! Sergio?&
was! merely! an! offer! which! was! not! accepted.!! !
There! being! no! consideration! separate! and! Yes,!there!being!a!perfected!contract!(of!sale).!
distinct! from! the! price,! the! offerer! Marvin! can! !
withdraw! at! anytime! before! acceptance! is! b. Can& Sergio& claim& that& whatever& they& might& have&
conveyed!to!him.! agreed& upon& cannot& be& enforced& because& any&
! agreement& relating& to& the& sale& of& real& property&
b. Will& your& answer& be& the& same& if& Carlos& paid& must& be& supported& by& evidence& in& writing& and&
Marvin& P10,000.00& as& consideration& for& that& they&never&reduced&their&agreement&to&writing?&
option?!Explain.!! !
! !
No,!in!that!case,!there!is!an!option!contract!thus,! !
the! offerer! cannot! validly! withdraw! the! offer! !
because! that! would! constitute! a! breach! of! !
contract.!!The!remedy!is!an!action!for!damages.! Essential"Elements"of"Contracts"
! 1. Consent!of!the!contracting!parties!
c. Supposing& that& Carlos& accepted& the& offer& before& 2. Object!which!is!the!subject!matter!of!the!contract!
Marvin& could& communicate& his& withdrawal& (not& necessarily& a& thing,& it& may& be& rights& or&
thereof?&& services)&
This!is!a!contract!of!piece!of!work,!a!consensual! 3. Cause!or!consideration&
contract;!thus,!if!there!was!an!acceptance!before! "
Consent"

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Scenario&1:&Where"no"consent"was"given! Aliens,! as! a! general! rule,! are! not! allowed! to! own! real!
Where! there! is! no! consent! of! one! or! both! parties,! the! property!in!the!Philippines.!
contract!is!VOID.! !
! (Article!XII,!Section!7)!
Fictitious"contract" “Save&in&cases&of&hereditary&succession,&no&private&lands&
In! a! deed! of! sale,! consent! is! manifested! by! the! shall&be&transferred&or&conveyed&except"to"individuals,"
signature.!!If!there!is!a!signature!above!the!name!of!the! corporations," or" associations" qualified" to" acquire"
person,! does& that& mean& that& that& person& gave& his& or"hold"lands"of"the"public"domain.”&
consent?& &
FNot!necessarily!because!it!may!have!been!forged.! It’s!clear!from!this!provision!that!private!land!may!be!
! transferred!only!to!persons!or!entities!who/which!has!
Simulated"contracts" the! capacity! “to& acquire& or& hold& lands& of& the& public&
“Making! it! appear”! that! the! parties! entered! into! the! domain.”!!
contract!when!in!fact,!they!did!not.! !
1. Absolute" Those!who!are!qualified!to!acquire!or!hold!lands!of!the!
The! parties! simulated! a! contract! but! they! never! public!domain!are!as!follows:!
intended!to!be!bound!by!such!contract! 1. Filipino!citizens.!
2. Relative" 2. Corporations! at! least! 60%! of! the! capital! of!
The! parties! simulated! a! particular! contract! but! which!is!owned!by!Filipinos.!
they! actually! intended! another! contract! or! !
transaction! In! other! words,! the! Constitution! explicitly! prohibits!
! nonFFilipinos! from! acquiring" or" holding" title" to"
What&is&the&usual&proof&of&simulation?& private"lands.!Among!the!exceptions!are!as!follows:!!
Fthe!capacity!to!buy!of!the!buyer! (1) transfer!to!an!alien!by!way!of!legal!succession;!
! or!
Scenario&2:!Where"both"parties"gave"consent! (2) if! the! acquisition! was! made! by! a! former!
If!both!parties!gave!consent,!does&that&guarantee&that&it& naturalFborn!citizen.!
is&a&valid&contract?& !
Not! necessarily.! ! Maybe! one! of! the! parties! is! Thus,!a!contract!of!sale!of!a!private!land!to!an!alien!for!
incapacitated.! residential! purposes! and! when! the! buyer! is! an! alien!
! who!is!a!former!naturalFborn!citizen.!F!VALID!
a. What&kind&of&incapacity,&absolute&or&relative?& !
& If! land! is! invalidly! transferred! to! an! alien! who!
b. What& kind& of& capacity& is& involved,& juridical& subsequently& becomes& a& Filipino& citizen! or! transfers! it!
capacity&or&capacity&to&act?& to! a! Filipino,! the! flaw! in! the! original! transaction! is!
If! there! is! no! juridical! capacity,! necessarily! the! considered! cured! and! the! title! of! the! transferee! is!
contract! is! VOID! (because! technically! there’s! rendered!valid.!
only!one!party!and!the!other!does!not!exist).! !
! How&about&condominium&units?&&
If!the!incapacity!affects!only!the!capacity!to!act,! The! aliens! will! simply! lease! the! land! for! a! longFterm!
such! as! when! there! are! restrictions! like! civil! period! such! as! 25! years! or! longer.! ! Thus,! the! 60F40!
interdiction,!minority,!insanity,!etc.,!the!contract! rule! does! not! apply! because! it! is! not! land! but! only!
is!merely!VOIDABLE.! property.!
! !
If! both! parties! are! incapacitated,! then! the! Ultimately,! if! the! buyer! of! a! parcel! of! land! is! an! alien!
contract!is!UNENFORCEABLE.! and!thereafter!an!action!was!filed!by!the!seller!for!the!
Under!1409,!prohibited!contracts!are!void.!!If!there!is! recovery! of! this! parcel! of! land.! ! Will! the! action!
relative" incapacity" in" one! of! the! parties! in! the! prosper?!
contract,!it!will!necessarily!be!void.! On!its!face,!the!sale!is!void!unless!it!falls!under!any!of!
! the! exception.! ! Thus,! the! seller! will! have! a! right! to!
If& one& of& the& parties& to& a& contract& of& sale& is& an& alien,& recover! and! the! action! to! recover! does! not! pescribe.!!
what&would&be&the&status&of&the&contract?& The! in& pari& delicto! rule! does! not! apply! to! this!
! Constitutional!prohibition.!
!
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PBQ:!!! If! consent! was! given! in! the! name! of! the! other! person!
If!at!the!time!of!the!filing!of!the!action,!this!land!is!no! without! authority! of! that! person,! it! is! unenforceable"
longer! owned! by! an! alien! or! when! the! alien! is! no! unless&the!person!has!the!authority!under!the!law!such!
longer! an! alien,! the! action! to! recover! cannot! prosper! as!when!he!is!the!guardian!or!receiver.!
anymore.!!! !
! Factors!which!may!vitiate!consent:!
2009"Bar"Question" !
In!1972,!Luciano!de!la!Cruz!sold!to!Chua!Chung!Chun,!a! Affects!cognition/awareness!as!to!certain!facts!
Chinese!citizen,!a!parcel!of!land!in!Binondo.!Chua!died! 1. Mistake"
in! 1990,! leaving! behind! his! wife! and! three! children,! 2. Fraud!
one! of! whom,! Julian,! is! a! naturalized! Filipino! citizen.! !
Six! years! after! Chua’s! death,! the! heirs! executed! an! Affects!volition/voluntariness!of!the!act!
extrajudicial! settlement! of! estate,! and! the! parcel! of! 3. Violence"
land!was!allocated!to!Julian.!In!2007,!Luciano!filed!suit! 4. Intimidation"
to! recover! the! land! he! sold! to! Chua,! alleging! that! the! 5. Undue"influence"
sale!was!void!because!it!contravened!the!Constitution! !
which! prohibits! the! sale! of! private! lands! to! aliens.! If!X,!a!3rd!person!employed!undue*influence!upon!one!
Julian! moved! to! dismiss! the! suit! on! grounds! of! pari! of!the!contracting!parties,!B!without!the!knowledge!of!
delicto,!laches!and!acquisitive!prescription.!Decide!the! A.!!–voidable!
case!with!reasons.! !!
Will&the&action&to&recover&the&land&from&this&heir&who&is& “duress”!
a&Filipino&citizen&prosper?& Does&it&affect&the&validity&of&the&contract?&
The!action!will!no!longer!prosper!because!it!is!already! Yes,!it!covers!both!violence!and/or!intimidation!
owned!by!the!Filipino.!! !
! If! violence! was! employed! upon! the! wife! of! the! party!
Also,! if! at! the! time! of! the! sale,! he! is! an! alien! but! after! who! is! invoking! vitiation! of! consent,! would&that&result&
some! time! he! acquired! Filipino! citizenship,! the! in& a& voidable& contract?& Upon& whom& shall& violence& be&
prohibition!is!no!longer!applicable!! employed&for&it&to&be&considered&voidable?!
! Yes,! because! there! is! more! reason! to! consider! the!
2012"Bar"Question" contract! voidable! because! violence! is! worse! than!
Jambrich,! an! Austrian,! fell! inFlove! and! lived! together! intimidation.!
with! Descallar! and! bought! their! house! and! lots! at! !
AgroFMacro!Subdivision.! What& if& the& violence& was& employed& not& upon& the& party&
! claiming& vitiation,& nor& upon& his& wife,& ascendants,&
In! the! Contracts! to! Sell,! Jambrich! and! Descallar! were! descendants?&Can&he&invoke&vitiation&of&consent?&
referred! to! as! the! buyers.! When! the! Deed! of! Absolute! Yes,! however! he! shall! prove! that! indeed! his! consent!
Sale!was!presented!for!registration!before!the!Register! was!vitiated.!!Rule!of!thumb:!the&further&in&degree,&the&
of!Deeds,!it!was!refused!because!Jambrich!was!an!alien! harder&it&is&to&prove&vitiation&in&consent.&
and! could! not! acquire! alienable! lands! of! the! public! "
domain.! After! Jambrich! and! Descaller! separated,! "
Jambrich! purchased! an! engine! and! some! accessories! "
for! his! boat! from! Borromeo.! To! pay! for! his! debt,! he! "
sold! his! rights! and! interests! in! the! AgroFMacro! "
properties! to! Borromeo.! Borromeo! discovered! that! Object"
titles!to!the!three!(3)!lots!have!been!transferred!in!the! "
name!of!Descallar.!Who&is&the&rightful&owner&of&the& 1. Rights&must!not!be!intransmissible.!
!
properties?!Explain.! 2. Services,! take! note! of! the! rules! like! the! service!
! must! not! be! contrary! to! law,! morals;! it! must! not!
Scenario&3:!Where"consent"is"vitiated" be!impossible,!etc.!
Vitiation!of!consent!is!not!the!same!as!lack!of!consent.!! !
The!former!has!consent!but!napilitan&lang.&It!is!merely! 3. The! thing! must! not! be! outside! the! commerce! of!
voidable.! men!and!licit.!
!
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For!example,!internal!organs!of!human!beings!are! or& that& a& contract& be& proved& in& a& certain& way,& that&
considered!outside!the!commerce!of!men.! requirement& is& absolute& and& indispensable.& In& such&
! cases,& the& right& of& the& parties& stated& in& the& following&
All! of! the! things! owned! in! common! are! outside! article&cannot&be&exercised.&
the!commerce!of!men!but!once!they!have!already! !
been!appropriated,!then!they!may!be!the!subject! Art.""1357"
of!the!contract.! If&the&law&requires&a&document&or&other&special&form,&as&
! in& the& acts& and& contracts& enumerated& in& the& following&
Can&future&inheritance&be&the&subject&of&the&contract&of& article,& the& contracting& parties& may& compel& each& other&
sale?& to& observe& that& form,& once& the& contract& has& been&
No! because! the! seller! has! no! inheritance! while! his! perfected.& This& right& may& be& exercised& simultaneously&
predecessor!lives.!! with&the&action&upon&the&contract.&&
! !
" Art.""1358"
" The&following&must&appear&in&a&public&document:&
" (1) Acts& and& contracts& which& have& for& their& object&
" the& creation,& transmission,& modification& or&
" extinguishment& of& real& rights& over& immovable&
" property;&sales&of&real&property&or&of&an&interest&
" therein& are& governed& by& articles& 1403,& No.& 2,&
" and&1405;&
" (2) The& cession,& repudiation& or& renunciation& of&
" hereditary& rights& or& of& those& of& the& conjugal&
" partnership&of&gains;&
" (3) The&power&to&administer&property,&or&any&other&
" power&which&has&for&its&object&an&act&appearing&
" or& which& should& appear& in& a& public& document,&
" or&should&prejudice&a&third&person;&
" (4) The& cession& of& actions& or& rights& proceeding&
" from&an&act&appearing&in&a&public&document.&
" &
" All& other& contracts& where& the& amount& involved& exceeds&
" five& hundred& pesos& must& appear& in& writing,& even& a&
" private& one.& But& sales& of& goods,& chattels& or& things& in&
" action&are&governed&by&articles,&1403,&No.&2&and&1405.&
" !
" A! document! can! only! be! registered! if! it! is! in! a! public!
" instrument.! ! The! Register! of! Deeds! has! no! business!
" accepting!private!instruments!for!registration.!!!
" !
" The! form! is! only! for! the! greater! efficacy! of! the!
" contract,!it!is!not!necessary!for!the!validity!neither!for!
" the!enforceability.!
" !
FORM"of"CONTRACTS" A! sale! of! a! parcel! of! land! must! be! in! a! public!
! instrument!to!be!valid.!–!FALSE!
Art."1356" !
Contracts& shall& be& obligatory,& in& whatever& form& they& A!contract!of!sale!involving!immovable!only!has!to!be!
may& have& been& entered& into,& provided& all& the& essential& in!writing!in!order!to!be!valid!and!enforceable!and!to!
requisites&for&their&validity&are&present.&& bind!the!parties.!!!
& !
However,& when& the& law& requires& that& a& contract& be& in&
some&form&in&order&that&it&may&be&valid&or&enforceable,&

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However,! if! it! is! merely! an! oral! sale,! it! would! be! reflect! the! real! intention,! it! will! be! the! latter! that!
unenforceable" contract! under! of! the! Statute! of! would!prevail.!
Frauds.! !
! Art.1370"
Validity"" If!the!terms!of!a!contract!are!clear!and!leave!no!doubt!
Is! a! contract! of! sale! required! to! be! in! a! specific! form! upon! the! intention! of! the! contracting! parties,! the!
for!its!validity?!None.! literal!meaning!of!its!stipulations!shall!control.!
! !
In!a!sale"of"large"cattle,!the!law!requires!this!contract! If! the! words! appear! to! be! contrary! to! the! evident!
to!be:! intention!of!the!parties,!the!latter!shall!prevail!over!the!
1. in!a!public!instrument;!! former.!!
2. registered;!!and!! !
3. the!buyer!has!to!obtain!a!certificate!of!title!in! Art."1371"
order!for!the!sale!to!be!valid.!! In! order! to! judge! the! intention! of! the! contracting!
! parties,! their! contemporaneous& and& subsequent& acts!
Enforceability" shall!be!principally!considered!
Statute!of!Frauds! !
! Citizens!Surety!v.!CA!
REFORMATION"OF"INSTRUMENTS" Mr.!Pascual!claims!that!the!deed!of!assignment!which!
Reformation!as!a!remedy!is!only!proper!when!there!is! he! executed! was! by! way! of! Dacion& en& Pago! which!
an! instrument! thus! if! the! contract! is! verbal,! there! is! extinguished! his! obligations! under! the! indemnity!
nothing!to!reform.! agreement.! ! However,! after! the! execution! of! the! deed!
! of! assignment,! he! continued! to! pay! the! monthly!
This! is! a! remedy! in! equity! because! the! instrument! as! amortizations.!!!
written! does! not! reflect! the! real! intention.! In! other! !
words,!the!parties!have!already!a!meeting!of!minds!but! If!it!is!truly!a!dacion&en&pago,!why!would!you!continue!
their! agreement! was! not! accurately! reflected! in! the! to! pay?! And,! why! would! you! execute! another! real!
instrument.! estate! mortgage! if! your! obligation! had! already! been!
! extinguished?!!
If!there!is!no!meeting!of!the!minds,!reformation!is!not! !
the! remedy! but! the! declaration! of! nullity! because! the! Clearly,! the! subsequent! acts! of! this! person! does! not!
contract!would!be!void.! support!his!claim!that!the!deed!of!assignment!was!by!
! way!of!dacion!en!pago.!Thus,!the!SC!ruled!that!the!deed!
Art."1366"" of!assignment!was!a!form!of!security!arrangement.!
There!shall!be!no!reformation!in!the!following!cases:! !
(1)!Simple!donations!inter!vivos!wherein!no!condition! Art."1377""
is!imposed;! The&interpretation&of&obscure&words&or&stipulations&in&a&
(2)!Wills;! contract& shall& not& favor& the& party& who& caused& the&
(3)!When!the!real!agreement!is!void.! obscurity.&
! !
If&the&instrument&as&written&on&its&face&is&void,&can&it&be& !
the&subject&of&reformation?& !
Yes! if! the! real! contract! intended! is! the! valid! contract.!! !
The!reverse!is!not!true.!!! !
! !
! !
! !
INTERPRETATION"OF"CONTRACTS" !
If&there&are&obscurities&or&ambiguities,&how&should&it&be& 2011"Bar"Question"–"MCQ"
resolved?& Lino! entered! into! a! contract! to! sell! with! Ramon,!
The! primordial! consideration! in! the! interpretation! is! undertaking!to!convey!to!the!latter!one!of!the!five!lots!
the!intention!of!the!parties.!!Even!if!the!instrument!as! he! owns,! without! specifying! which! lot! it! was,! for! the!
written!is!so!clear!as!to!their!meaning!but!it!does!not! price! of! P1! million.! Later,! the! parties! could! not! agree!

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which! of! five! lots! he! owned! Lino! undertook! to! sell! to! !
Ramon.!What&is&the&standing&of&the&contract?& How&do&you&prove&fraud?&
& Determine!if!there!is!a!presumption!that!the!contract!
(A)!Unenforceable.! is!in!fraud!of!creditors!AND!prove!certain!badges!of!
(B)!Voidable.! fraud!(see&pages&40)41)!But,!a!single!badge!of!fraud!is!
(C)!Rescissible.! NOT!sufficient!to!conclude!that!there!is!fraud.!
(D)"Void." !
" !
This! is! covered! not! only! by! Article! 1409! but! also! on! Example!of!badges!of!fraud:!
the!rules!on!interpretation!of!contracts.! 1. Close!relationship!between!the!parties!
! 2. The! debtorFseller! continue! to! be! in! the!
" possession!of!the!property!!
STATUS"of"CONTRACTS" 3. When! the! price! in! a! contract! of! sale! is! grossly!
! inadequate!
2!Kinds!of!Valid! 4. When!the!debtor!is!already!insolvent!and!he!sells!
!
1. Valid!and!binding!without!any!defects! his!property!on!credit!
2. Valid!but!defective:!! !
FRescissible,!Voidable!and!Unenforceable! Cabaliw!v.!Sadorra!
! A! sale! of! a! parcel! of! land! by! the! husband! is! deemed!
Voidable!and!Unenforceable! fraudulent! if! made! about! seven! months! after! a!
Fcan!be!ratified! judgment!was!rendered!against!the!vendor!for!support!
! of!his!wife!and!the!vendor!has!not!paid!any!part!of!the!
Nothing!in!the!Code!tells!us!that!Rescissible!is!subject! judgment.!This!sale!was!entered!into!after!a!judgment!
to! ratification! because! there! is! no! defect! as! far! as! the! was! rendered.! Take! note,! the! judgment! need! NOT! be!
essential! requisites! are! concerned.! ! It’s! up! to! the! final!and!executory.!
person! whether! or! not! to! invoke! the! remedy! of! !
rescission.! Accion"Pauliana"
! Fan! action! to! impugn! a! contract! in! fraud! of! creditores!
Void! should!be!filed!within!4!years!from!the!DISCOVERY!of!
Fcannot!be!ratified! the!fraud;!however!in!the!Hongkong!case,!the!SC!held!
! that!if!the!contract!claimed!to!be!in!fraud!of!creditors!
Unique!void!contract!subject!to!ratification:! was! REGISTERED,! then! the! 4Fyear! period! would!
Art."1898" commence! not! from! the! time! of! actual! knowledge! of!
If& the& agent& contracts& in& the& name& of& the& principal,& the! creditor! or! discovery! but! from! the! time! of!
exceeding& the& scope& of& his& authority,& and& the& principal& registration.!
does&not&ratify&the&contract,&it&shall&be&void&if&the&party& !
with& whom& the& agent& contracted& is& aware& of& the& limits& Hongkong!Shanghai!Bank!v.!Pauli!
of& the& powers& granted& by& the& principal.& In& this& case,& The!fourFyear!period!to!bring!an!action!for!annulment!
however,&the&agent&is&liable&if&he&undertook&to&secure&the& of!deed!of!sale!of!lot!is!computed!from!the!registration!
principal's&ratification.& of!the!conveyance.!
& !
& Article"1385"
& Rescission& creates& the& obligation& to& return& the& things&
&
which& were& the& object& of& the& contract,& together& with&
&
& their&fruits,&and&the&price&with&its&interest;&consequently,&
& it& can& be& carried& out& only& when& he& who& demands&
RESCISSIBLE"CONTRACTS" rescission& can& return& whatever& he& may& be& obliged& to&
When&would&a&contract&be&Rescissible?& restore.&
Fonly!when!the!law!provides! &
! Neither& shall& rescission& take& place& when& the& things&
Most!important:! which& are& the& object& of& the& contract& are& legally& in& the&
Those&undertaken&in*fraud*of*creditors&when&the&latter& possession&of&third&persons&who&did&not&act&in&bad&faith.&
cannot&in&any&other&manner&collect&the&claims&due&them& &

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In& this& case,& indemnity& for& damages& may& be& demanded& !
from&the&person&causing&the&loss.& Who&may&ratify?&
" Only!the!party!who!has!the!right!to!institute!the!action!
Illustration:& for!annulment!
A! is! indebted! to! X.! ! A,! in! fraud! of! X,! alienated! his! !
property! to! B.! In! this! scenario,! it! is! B! who! is! Implied&ratification,&how&made?&
considered! as! the! 3rd! person! (in&relation&to&the&debtor& When! a! contract! of! lease! was! entered! into,! the! lessor!
and&creditor)! was!17!years!old.!!However,!even!if!he!is!already!20!he!
! still! continued! to! receive! rentals.! ! Even! if! within! the!
Thus,!X!cannot!invoke!rescission!if!B!is!in!possession!in! period! for! filing! the! action! for! annulment,! he! may! no!
good!faith!(except!in!case!of!donation)! longer! rescind! because! he! has! already! impliedly!
" ratified.!
2012"Bar"Question"D"MCQs" !
The!following!are!rescissible&contracts,!except:!! Reasons!why!an!action!for!annulment!may!not!prosper!
a) Entered! into! by! guardian! whenever! ward! 1. Implied!ratification!
suffers! damage! more! than! 1⁄4! of! value! of! 2. Prescription!
property! 3. If! the! one! invoking! cannot! return! what! he! has!
b) Agreed!upon!in!representation!of!!absentees,! received!unless!he!there’s!no!fault!on!his!part!
if! absentee! suffers! lesion! by! more! than! 1⁄4! !
of!value!of!property! 2012"Bar"Question"–"MCQs"
c) Contracts! where! fraud! is! committed! on! "
creditor!(accion!pauliana).!! The! following! are! the! characteristics! of! a! voidable!
d) Contracts" entered" into" by" minors."" contract,!except:!!
(voidable)" a) Effective!until!set!aside.!
" b) !May!be!assailed/attacked!only!in!an!action!for!
The! following! are! the! requisites! before! a! contract! that!purpose.!
entered! into! in! fraud! of! creditors! may! be! rescinded,! c) !Can!be!confirmed!or!ratified.!
except:!! d) !Can"be"assailed"only"by"either"party.!!
a) There! must! be! credited! existing! prior! to! the! !
celebration!of!the!contract.! Guardians!may!also!assail!
b) There!must!be!fraud,!or!at!least,!the!intent!to! !
commit! fraud! to! the! prejudice! of! the! creditor! The!following!are!void!contracts,!except:!!
seeking!rescission.!! a) Pactum!commissorium!!
c) The! creditor! cannot! in! any! legal! manner! b) Pactum!de!non!alienando!
collect! his! credit! (subsidiary! character! of! c) !Pactum!leonine!
rescission)!! d) "Pacto"de"retro""
d) The" object" of" the" contract" must" be" legally" !
in" the" possession" of" a" 3rd" person" in" good" Which!of!the!following!expresses!a" correct" principle!
faith " of!law?!Choose!the!best!answer.!!
! a) Failure! to! disclose! facts! when! there! is! a! duty!
Recall:!Article"1191" to!reveal!them,!does!not!constitute!fraud!
Rescission! in! Art.! 1191! is! a! PRINCIPAL! remedy! b) Violence! or! intimidation! does! not! ! render! a!
whereas! in! Rescissible! contracts,! it! may! be! invoked! contract! annullable! if! employed! not! by! a!
only! when! the! creditor! does! not! have! any! other! contracting!party!but!by!a!third!person.!
available!legal!remedy.! c) A! threat! to! enforce! one’s! claim! through!
! competent! authority,! if! the! claim! is! legal! or!
VOIDABLE"CONTRACTS" just,!does!not!vitiate!consent.!
" d) Absolute" simulation" of" a" contract" always"
There!is!defect!in!consent!either!because:! results"in"a"void"contract.""
1. The! person! giving! consent! is! incapacitated! !
because! he! does! not! have! capacity! to! act! such! !If!one!of!the!parties!to!the!contract!is!without!juridical!
as!when!he!is!a!minor!or!when!insane,!etc.! capacity,!the!contract!is:!!
2. There!is!vitiation!of!consent! a) voidable!

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b) rescissible! !
c) "void" 3. A! contract! entered! into! by! a! person! in!
d) !unenforceable!! representation!of!another!without!the!authority!
! of! the! latter! (unless& he& had& authority& under& the&
When! both! parties! to! the! contract! are! minors,! the! law)legal&representation)&
contract!is:!! &
a) voidable! 4. Art."1878&
b) rescissible! Contracts!entered!into!by!agents!requiring!SPA!
c) void! !
d) unenforceable"" Art."1403"
" Statue!of!Frauds!is!a!rule!requiring!certain!contracts!to!
When! the! consent! of! one! of! the! parties! was! vitiated,! be! in" writing! in! order! to! be! enforceable! between! the!
the!contract!is:!! parties.! ! It! does& not! require! the! contracts! to! be! in! a!
a) voidable" public!instrument!(not!needed,!but!permitted)!
b) rescissible! !
c) void! Thus,!if!you!already!have!an!agreement!in!writing!and!
d) unenforceable!! you!want!it!to!be!registered,!your!remedy!is!Art."1357,!
! to! compel! the! other! party! to! have! the! contract! in! the!
Consent" was" given! by! one! in! representation! of! form!prescribed!by!law!
another!but!without"authority.!The!contract!is:!! !
a) voidable! 2009"Bar"Question"
b) rescissible! True!or!False.!An&oral&promise&of&guaranty&is&valid&and&
c) void! binding.&&
d) !unenforceable"" &
! FALSE.! An! oral! contract! of! guaranty,! being! a! special!
" promise! to! answer! for! the! debt! of!another,! is!
" unenforceable!unless!in!writing!!
" !
" Alternative&Answer:&
" TRUE.! An! oral! promise! of! guaranty! is! valid! and!
" binding.! While! the! contract! is! valid,! however,! it! is!
" unenforceable! because! it! is! not! writing! .! Being! a!
" special!promise!answer!for!the!debt,!or!miscarriage!of!
" another,! the! Statute! of! Frauds! requires! it! to! be! in!
" writing!to!be!enforceable!(Article!1403![2]!b,!NCC).The!
" validity! of! the! contract! should! be! distinguished! from!
" its!enforceability!!
" !
" Cabague!v.!Auxilio!
" !
" !
" !
" !
" !
UNENFORCEABLE"CONTRACTS" When&would&a&contract&of&lease&be&covered&by&the&
1. When!both!parties!are!both!incapacitated.!!! Statute&of&Fraud?&
Take! note,! they! may! be! ratified! so! when! one! of! When!a!contract!of!lease!involves!a!real!property!and!
the! two! parties! ratifies,! the! effect! would! now! the!period!is!for!more!than!one!year!
become!merely!voidable.! !
! Kung&car&lang&ang&nili)lease&maski&naman&3&years&pa&
2. A! contract! entered! into! by! an! agent! where! the! yan&na&verbal&agreement,&it&can&be&a&valid&and&binding&
agent!acted!in!excess!or!outside!the!scope!of!his! agreement&
authority.! !

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Contracts!of!Sale!that!are!unenforceable!if"NOT"in" acknowledged.! After! giving! the! full! payment,! Maria!
writing:" demanded!for!the!execution!of!a!deed!of!absolute!sale!
" which! Esperanza! and! Caridad! refused! to! do.! Worst,!
1. If!it!involves!an!immovable!or!real!property;! Maria!learned!that!the!siblings!sold!the!same!property!
Take!note,!the!price!is!irrelevant! to!Manuel.!This!compelled!Maria!to!file!a!complaint!for!
! the! annulment! of! the! sale! with! specific! performance!
2. Contracts! involving! movables! are! must! be! in! and!damages.!!
writing!if!the!price!is!at!least!P500.!!! !
Take! note,! it! is! the! PRICE! which! is! relevant! and! If&you&are&the&judge,&how&will&you&decide&the&case?&&
NOT!the!value!of!the!thing.! "
! Answer:"
3. Regardless!if!movable!or!immovable,!if!under!the! I! will! decide! the! case! in! favor! of! Maria! only! as! far! as!
terms!of!the!agreement!it!is!not!to!be!performed! the! share! of! Fe! in! this! parcel! of! land! because! this!
within! one! year! because! the! agreement! is! that! contract! of! sale! was! entered! into! by! a! coFowner!
the! seller! will! deliver! only! after! 18! months! and! without! the! consent! of! the! other! coFowners! thus! the!
the! buyer! will! pay! upon! delivery,! it! has! to! be! in! latter! will! not! be! bound.! ! Only! the! coFowner! who!
writing!otherwise,!it!is!unenforceable.! entered!into!the!contract!shall!be!bound.!The!fact!that!
! this! sale! was! not! reduced! into! writing! cannot! be!
The! Statute! of! Frauds! does! not! go! into! the! weight! of! invoked!by!Fe!as!a!defense!because!there!were!already!
evidence!but!to!the!admissibility"of!evidence.! partial!payments.!!!
! !
In!other!words,!if!it!is!covered!by!the!Statute!of!Frauds! 2012"Bar"Question"
and! there! is! an! effort! to! prove! the! existence! of! the! Aligada!orally!offered!to!sell!his!twoF!hectare!rice!land!
contract! through! oral! testimony,! that! evidence! will! to! Balane! for! P! 10Million.! The! offer! was! orally!
never!be!admitted.!!He!should!not!be!allowed!to!testify.! accepted.! By! agreement,! the! land! was! to! be! delivered!
! (through! execution! of! a! notarized! Deed! of! Sale)! and!
Ortega!v.!Leonardo! the!price!was!to!be!paid!exactly!oneFmonth!from!their!
! oral!agreement.!Which&statement&is&most&accurate?&!
" a) If! Aligada! refuses! to! deliver! the! land! on! the!
" agreed! date! despite! payment! by! Balane,! the!
" latter! may! not! successfully! sue! Aligada!
" because!the!contract!is!oral.!
" b) If! Aligada! refused! to! deliver! the! land,! Balane!
" may! successfully! sue! for! fulfillment! of! the!
" obligation! even! if! he! has! not! tendered!
" payment!of!the!purchase!price.!
" c) The! contract! between! the! parties! is!
" rescissible.!
" d) The"contract"between"the"parties"is"subject"
" to"ratification"by"the"parties "
" !
" "
" "
" "
2014"Bar"Question" VOID/INEXISTENT"CONTRACTS"
Fe,! Esperanza,! and! Caridad! inherited! from! their! !
parents!a!500!sq.!m.!lot!which!they!leased!to!Maria!for! Art."1409""
three!(3)!years.!One!year!after,!Fe,!claiming!to!have!the! The! following! contracts! are! inexistent! and! void! from!
authority! to! represent! her! siblings! Esperanza! and! the!beginning:!
Caridad,! offered! to! sell! the! leased! property! to! Maria! (1) Those! whose! cause,! object! or! purpose! is!
which! the! latter! accepted.! The! sale! was! not! reduced! contrary!to!law,!morals,!good!customs,!public!
into! writing,! but! Maria! started! to! make! partial! order!or!public!policy;!
payments! to! Fe,! which! the! latter! received! and!

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(2) Those! which! are! absolutely! simulated! or! !
fictitious;!
(3) Those! whose! cause! or! object! did! not! exist! at! !
the!time!of!the!transaction;!
(4) Those! whose! object! is! outside! the! commerce! !
of!men;!
(5) Those! which! contemplate! an! impossible! !
service;!
(6) Those! where! the! intention! of! the! parties! !
relative!to!the!principal!object!of!the!contract!
cannot!be!ascertained;! !
(7) Those! expressly! prohibited! or! declared! void!
by!law.! !
These! contracts! cannot! be! ratified.! Neither! can! the!
right!to!set!up!the!defense!of!illegality!be!waived.! !
!
Lita!Enterprises!v.!IAC! !
!
If&a&contract&is&void,&may&an&action&to&recover&filed&by&
one&of&the&parties&against&the&other&prosper?& !
It!depends!(Arts.!1411,!1412,!1415,!1416)!
!
1999"Bar"Question"
!
In! 1950,! the! Bureau! of! Lands! issued! a! Homestead!
patent!to!A.!!3!years!later,!A!sold!the!homestead!to!B.!!A! !
died! in! 1990,! and! his! heirs! filed! an! action! to! recover!
the! homestead! from! B! on! the! ground! that! its! sale! by! !
their! father! to! the! latter! is! void! under! Section! 118! of!
the! Public! Land! Law.! ! B! contends,! however,! that! the! !
heirs! of! A! cannot! recover! the! homestead! from! him!
anymore!because!their!action!had!prescribed!and!that! !
furthermore,!A!was!in!pari&delicto.!!Decide.!
!
I!will!decide!in!favor!of!the!heirs.!!The!contract!is!void!
because!it!is!prohibited!by!law.!Any!alienation!within!5! !
years!from!the!date!of!award!of!the!land!to!A,!is!a!void!
alienation.! !
Secondly,!A!is!not!in!pari!delicto.!Article" 1416:" When& !

the& agreement& is& not& illegal& per& se& but& is& merely&
prohibited,& and& the& prohibition& by& the& law& is& designed& !
for&the&protection&of&the&plaintiff,&he&may,&if&public&policy&
is& thereby& enhanced,& recover& what& he& has& paid& or& !
delivered.*
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SALES" !
" !
Article* 1458.* By& the& contract& of& sale& one& of& the& (3) Onerous!
contracting& parties& obligates& himself& to& transfer& the& The!thing!sold!is!conveyed!in!consideration!of!the!
ownership&and&to&deliver&a&determinate&thing,&and&the& price!and!vice!versa!!
other& to& pay& therefor& a& price& certain& in* money* or* its* !
equivalent.* (4) Commutative!
& The!thing!sold!is!considered!the!equivalent!of!the!
A&contract&of&sale&may&be&absolute&or&conditional& price!paid!and!vice!versa.!(see!Ibid.)!However,!the!
! contract!may!be!aleatory!as!in!the!case!of!the!sale!
of!a!hope!(e.g.,!lotto!ticket);!!
Q:* A* obliged* himself* to* deliver* a* determinate* thing* !
to*B.*Upon*delivery,*B*would*pay*a*sum*of*money*to* (5) Nominate!
A.*Is*that*a*contract*of*sale?* It! is! given! a! special! name! or! designation! in! the!
A:! Not! necessarily.! Even! if! there! is! an! obligation! to! Civil! Code,! namely,! “sale”! and! specific! rules! are!
deliver,! if! there! is! no! obligation!to! transfer&ownership,! provided!by!law!to!govern!the!rights!of!the!parties!
it!will!not!be!a!contract!of!sale.!It!may!be!a!contract!of! !
lease!or!deposit!(for!safekeeping)! (6) Principal!
! It! does! not! depend! for! its! existence! and! validity!
From! the! definition,! you! will! learn! a! lot.! ! Ordinarily,! upon!another!contract.
you!should!know!the!purpose!of!the!parties.!!With!the! !
contract!of!sale,!obligations!should!arise,!based!on!the! Kinds"of"Sale"
premise!that!there!is!a!valid!contract.! Factors!to!consider:!
! 1. Movable!or!Immovable!
“obligates”&& 2. Thing!or!Right!
The! contract! will! be! perfected! even! if! only! 1! party! 3. Transfer!of!ownership!
binds!himself!because!it!is!a!consensual!contract.! !
! TRUE!or!FALSE"
“determinate&thing”& Maceda! Law! only! applies! if! the! subject! matter! or! the!
What! if! the! object! is! generic! thing,! may! it! be! a! valid! object!of!the!contract!of!sale!is!an!immovable.!
sale?!Yes! !
Art.!1460!“capable&of&being&made&determinate”! The! law! requires! realties! but! not! all! immovable! are!
Ex.!Sale!of!a!bottle!of!water! realties.! ! Maceda! Law! only! covers! sales! on! residential&
! realties.!!Whereas,!Recto!Law!pertains!only!to!personal!
“to&pay&therefor”& property.!!!
This! contract! is! essentially! onerous.! ! There! is! no! !
gratuitous!sale.!!! Transfer!of!Ownership!
! Fnot! a! condition! for! the! perfection! of! the! sale! but! a!
Does&the&law&require&that&the&price&be&paid&in&Philippine& condition!for&ownership&to&pass,!the!premise!is!there!is!
Peso?& already!a!perfected!contract!
Not! necessarily.! ! The! law! only! provides! “in! money”;! !
thus,!it!may!be!valid!even!if!it!is!in!any!other!currency.!!! Contract!to!Sell!(COS)!v.!Contract!of!Sale!(CTS)!
! !
Characteristics"of"a"contract"of"sale" Absolute"COS"
(1) Consensual! Where! the! sale! is! not! subject! to! any! condition!
It! is! perfected! by! mere! consent! withF! out! any! whatsoever! and! where! title/ownership! passes! to! the!
further!act;!! buyer!upon!delivery!of!the!thing!sold.!
! !
(2) Bilateral! Conditional"COS"
Both! the! contracting! parties! are! bound! to! fulfill! Sale! is! subject! to! certain! conditions! and! upon! the!
correlative! obligations! towards! each! other! —! the! fulfillment! of! the! conditions,! ownership! is!
seller,! to! deliver! and! transfer! ownership! of! the! automatically!transferred!without!the!need!of!another!
thing!sold!and!the!buyer,!to!pay!the!price;!! contract.!
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! After! delivery! of! the! initial! payment! of! P100,000.00,!
! Monica! immediately! took! possession! of! the! property.!
Contract"to"Sell"(CTS)! Five! (5)! months! after,! Monica! failed! to! pay! the!
SC! held! that! it! is! a! special! kind! of! conditional! sale.!! remaining! balance! of! the! purchase! price.! Nante! filed!
Despite! the! fulfillment! of! the! condition/s,! ownership! an! action! for! the! recovery! of! possession! of! the!
will! not! automatically! pass.! ! It! would! only! give! the! property.!Nante!alleged!that!the!agreement!was!one!to!
buyer! the! right! to! demand! the! seller! to! sell! the! thing.!! sell,! which! was! not! consummated! as! the! full! contract!
Thus,! the! seller! is! bound! to! sell! and! the! ownership! is! price!was!not!paid.!Is!the!contention!of!Nante!tenable?!
only! transferred! upon! the! execution! of! the! deed! of! Why?!!
sale.!!Premise!is!that!the!buyer!is!already!in!possession! !
of!the!property!even!before!the!conditions!are!fulfilled.! Distinctions:!
!
1. COS!v.!Dation"in"Payment!(MMN)!
In&a&sale&agreement,&how&do&you&determine&if&it’s&a&ACOS,& 2. COS!v.!Barter""
CCOS&or&CTS?& A! obliged! himself! to! deliver! and! transfer!
ownership! of! a! watch! worth! P800,000! to! B!
2001"Bar"Question" whereas! B! obliged! himself! to! give! to! A! his! car!
! worth!P400,000!plus!cash!worth!P350,000.!
Arturo!gave!Richard!a!receipt!which!states:!! !
"Receipt& Received& from& Richard& as& down& payment& For& Quiroga!v.!Parsons!case!
my& 1995& Toyota& Corolla& with& plate& No.& XYZ)123& !
P50,000.00& Balance& payable& 12/30/01& P50,000.00& 2013"Bar"Question"
September&15,&2001.!! Rica! petitioned! for! the! annulment! of! her! tenFyear! old!
marriage! to! Richard.! Richard! hired! Atty.! Cruz! to!
(Sgd.)&Arturo& represent!him!in!the!proceedings.!In!payment!for!Atty.!
Cruz’s! acceptance! and! legal! fees,! Richard! conveyed! to!
Does&this&receipt&evidence&a&contract&to&sell?&Why?& Atty.! Cruz! a! parcel! of! land! in! Taguig! that! he! recently!
& purchased! with! his! lotto! winnings.! The! transfer!
No,! because! there! is! nothing! in! the! receipt! showing! documents! were! duly! signed! and! Atty.! Cruz!
that! the! seller! reserved! ownership! over! the! thing.!! immediately! took! possession! by! fencing! off! the!
Thus,! a! sale! agreement! wherein! the! seller! did! not! property’s!entire!perimeter.!
reserve! ownership! over! the! thing! is! an! absolute! !
contract!of!sale.! Desperately! needing! money! to! pay! for! his! mounting!
legal!fees!and!his!other!needs!and!despite!the!transfer!
2012"Bar"Question" to! Atty.! Cruz,! Richard! offered! the! same! parcel! of! land!
A&contract&to&sell&is&the&same&as&a&conditional&contract&of& for! sale! to! the! spouses! Garcia.! After! inspection! of! the!
sale.&&Do&you&agree?& land,!the!spouses!considered!it!a!good!investment!and!
! purchased!it!from!Richard.!
Nante,!a!registered!owner!of!a!parcel!of!land!in!Quezon! Immediately! after! the! sale,! the! spouses!
City,!sold!the!property!to!Monica!under!a!deed!of!sale! Garcia!! commenced! the! construction! of! a! threeFstory!
which!reads!as!follows:!! building! over! the! land,! but! they! were! prevented! from!
! doing! this! by! Atty.! Cruz! who! claimed! he! has! a! better!
“That& for& and& in& consideration& of& the& sum& of& right!in!light!of!the!prior!conveyance!in!his!favor.!
P500,000.00,&value&to&be&paid&and&delivered&to&me,&and& !
receipt&of&which&shall&be&acknowledged&by&me&to&the&full& Is&Atty.&Cruz’s&claim&correct?&No"
satisfaction& of& Monica,& referred& to& as& Vendee,& I& hereby& "
P2:29:00!
sell,& transfer,& cede,& convey,& and& assign,& as& by& these&
"
presents,& I& do& have& sold,& transferred,& ceded,& conveyed&
"
and&assigned&a&parcel&of&land&covered&by&TCT&No.&2468&
"
in&favor&of&the&Vendee.”&&
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Rights"and"Obligations"of"the"Vendor" P.D."1529"
1. Transfer!ownership! In! relation! to! registered! lands,! those! who! are! dealing!
2. Deliver! with! these! parcels! of! land! has! to! consider! the!
3. Warrant!the!thing! certificate! of! title.! ! They! are! not! required! to! inquire!
" into!other!matters.!!(“Mirror&Principle”)"
OBLIGATION"TO"TRANSFER"OWNERSHIP" "
Who&can&transfer&ownership&by&way&of&a&sale?& However,! this! does! not! apply! to! persons! who! are!
Only!those!who!have!a!right!to!sell! required!to!exercise!the!exercise!the!highest!degree!of!
! diligence!such!as!banks,!or!MERALCO.!
May& a& buyer& acquire& ownership! over! the! thing! sold! if! !
the!seller!has!no!right!to!sell?!Yes! Are* there* any* other* laws* that* enable* the* seller* to*
& dispose* the* thing* as* if* he* is* the* real* owner?*
General&Rule:& Yes.!!Article!1505!
The!buyer!acquires!no!better!title!than!what!the!seller! !
had.! 2009"Bar"Question"
! Before! migrating! to! Canada! in! 1992,! the! spouses!
Exceptions:& Teodoro!and!Anita!entrusted!all!their!legal!papers!and!
Estoppel! documents! to! their! nephew,! Atty.! Tan.! Taking!
" advantage! of! the! situation,! Atty.! Tan! forged! a! deed! of!
1. Estoppel"in"pais""(Art."1431)" sale,!making!it!appear!that!he!had!bought!the!couple’s!
By! the! principle! of! estoppel,! a! person! is! precluded! property! in! Quezon! City.! In! 2000,! he! succeeded! in!
from!denying!that!another!person!has!authority!to!sell! obtaining! a! TCT! over! the! property! in! his! name.!
because! of! his! acts.! Also! known! as! “Estoppel! in! Pais”! Subsequently,! Atty.! Tan! sold! the! same! property! to!
which! is! a! kind! of! equitable! estoppel! because! of! the! Luis,!who!built!an!auto!repair!shop!on!the!property.!In!
acts!/!representation!of!the!owner,!he!may!not!later!on! 2004,!Luis!registered!the!deed!of!conveyance,!and!title!
deny!the!authority!of!the!3rd!person.!! over!the!property!was!transferred!in!his!name.!
! !
2. Estoppel"by"deed"(Art."1434)" In! 2006,! the! spouses! Teodoro! and! Anita! came! to! the!
When!the!seller!who!was!not!the!owner!at!the!time!of! Philippines! for! a! visit! and! discovered! what! had!
the! sale,! acquires! !ownership,! automatically,! happened! to! their! property.! They! immediately! hire!
ownership! passes! to! the! buyer! by! operation! of! law.! you!as!lawyer.!What!action!or!actions!will!you!institute!
However,!Article&1434!requires!delivery!to!the!buyer.!!! in!order!to!vindicate!their!rights?!Explain!fully.!!
! !
3. Estoppel"by"record""" Suggested!Answer:!
Case!where!the!seller!was!estopped!from!denying!the! I!will!institute!the!following!actions!against!Atty.!Tan:!!
authority! to! sell! due! to! his! prior! testimony! made! in! !
court.!! (a) A! civil! action! for! damage! for! the! fraudulent!
! transfer!of!the!title!in!his!name!and!to!recover!
4. Sale!by!an!Apparent!Owner! the!value!of!the!property;!
5. Negotiable!Document!of!Title! (b) An! action! against! the! National! Treasurer! for!
6. Purchase!from!a!Merchant!Store! compensation!from!the!State!Assurance!Fund!
" which! is! set! aside! by! law! to! pay! those! who!
In*a*contract*of*sale*involving*a*parcel*of*land,*when* lose! their! land! suffer! damages! as! a!
would*a*seller*be*an*apparent*owner?* consequence! of! the! operation! of! the! Torrens!
Fmere! possession! does! not! necessarily! mean! that! the! system;!
seller!is!an!apparent!owner.!!! (c) !A! criminal! action! for! forgery! or! falsification!
Fwhen! the! seller! has! a! certificate! of! title! under! his! of!public!document;!
name! (d) !A! complaint! with! the! Supreme!
! Court/Integrated! Bar! of! the! Philippines! to!
An!old!lady!owns!a!parcel!of!land.!!She!asked!a!lawyer! disbar! or! suspend! him! or! other! disciplinary!
to! have! the! land! registered! under! her! name,! but! the! action! for! violation! or! the! Code! of!
lawyer!registered!the!land!under!his!own!name.! Professional!Ethics.!!
" !

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Any!action!against!Luis!will!not!prosper!because!he!is! Yes,!if!the!movable!property!was!lost.!
an!innocent!purchaser!for!value.!The!Title!to!the!land! What&if&the&owner&was&NOT&unlawfully&deprived&and&the&
he!bought!was!already!in!the!name!of!the!person!who! thing&was&NOT&lost&but&bought&from&a&seller&who&has&no&
sold! the! property! to! him,! and! there! is! nothing! on! the! right&to&sell?&
title! which! will! make! him! suspect! about! the! fraud! Art.!559!will!no!longer!be!applicable.!
committed!by!Atty.!Tan.!! Sun!Brothers!v.!Velasco!
! Sun!Brothers!!!Lopez!!!Velasco!!!Ko!Kang!Chu!
What* if* there* was* forgery* and* the* forger* sold* the* !
property*subject*of*the*deed*to*a*3rd*person?* Lopez! bought! the! refrigerator! on! installment!
*A! forged! document! can! never! convey! any! title;! thereafter,!he!sold!it!to!Velasco,!a!store!owner,!who!in!
however,!it!may!be!a!root!of!a!valid!title!if!the!buyer!is! turn!sold!it!to!Ko!Kang!Chu.!
in!good!faith!and!for!value! !
" Sun! Brothers! filed! an! action! to! recover! the! said!
P2:1:06:31! refrigerator.!Will&the&action&prosper?&No!
1987"Bar"Question" "
Rita!owned!a!valuable!painting!which!was!stolen!from! When! Sun! Brothers! sold! to! Lopez,! ownership! did! not!
her! house.! ! The! theft! was! duly! reported! to! the! pass! because! it! was! a! conditional! sale! and! ownership!
authorities.!!A!year!after,!Rita!saw!the!painting!hanging! will!pass!only!upon!full!payment.!!!
in! the! office! of! Mario.! ! When! queried,! Mario! said! that! !
he! bought! the! painting! in! a! gallery! auction.! ! The! When! Lopez! sold! to! Velasco,! ownership! did! not! pass!
painting! was! positively! identified! as! the! one! which! because! it! falls! under! the! general! rule! that! the! buyer!
was!stolen!from!Rita’s!house.! acquires!no!better!title!than!what!the!seller!had.!
! !
a. Could&Rita&recover&the&painting?!Yes" When! Velasco! sold! it! to! Ko! Kang! Chu,! the! latter!
If&so,&would&Mario&be&entitled&to&reimbursement?!No" acquired!absolute!ownership!because!it!was!bought!in!
!
b. Supposing! Mario! bought! the! painting! from! a! a! merchant! store! in! good! faith! and! for! value.! ! (Art.!
friend,!would!your!answer!be!the!same?!Yes" 1505)! Thus,! Chu! cannot! be! compelled! even! if! Sun!
" Brothers!are!willing!to!reimburse.!
Suggested"Answers:" !
Yes,!Rita!was!unlawfully!deprived!of!the!thing!thus!Art.! How&is&transfer&of&ownership&effected?&
559! is! applicable.! ! When! it! was! sold! to! the! buyer,!the! Actual!or!Constructive!delivery!
seller! did! not! have! a! right! to! sell.! ! The! law! provides! "
that!the!true!owner!has!a!right!to!recover.! If&there&was&physical&delivery,&does&that&mean&that&there&
! was&transfer&of&ownership?&
As!to!reimbursement,!there!are!2!requisites:! No,"it!may!be!a!conditional!sale!or!a!contract!to!sell!
a. the!buyer!must!have!bought!it!in!a!public!sale;! !
b. he!must!have!bought!it!in!good!faith! Delivery"of"Sale"of"Things"
! !
Here!it!is!clear!that!Mario!was!in!good!faith.!The!issue! 1. QuasiDtradition""
here!is!whether!the!gallery!auction!is!a!public!sale.! This! is! used! to! indicate! the! exercise! of! a! right! by!
! the!grantee!with!the!!acquiescence!of!the!grantor.!!!
It! is! NOT! a! public! sale! considering! the! nature! of! a! !
gallery! auction,! which! is! often! “by& invitation& only”.!! 2. Actual"delivery!(“Real&tradition”)!
Thus,!since!it!is!not!a!public!sale,!then!the!owner!who! Delivery!or!transfer!of!a!thing!from!hand!to!hand!if!
was! unlawfully! deprived! can! recover! that! property! it! is! movable,! or! by! certain! material! and!
even!without!reimbursement.! possessory! acts! of! the! grantee! performed! in! the!
! presence! and! with! the! consent! of! the! grantor! if! it!
Note:!If!the!auction!sale!is!considered!a!public!sale,!he! is!movable.!!!
can! recover! as! long! as! he! is! willing! to! reimburse! the! !
buyer!of!the!price!paid!in!that!sale.! 3. Traditio"longa"manu""" "
! The! grantor! pointing! out! to! the! grantee! the! thing!
What&if&the&owner&is&NOT&unlawfully&deprived?&Will&Art.& which! is! delivered! which! at! the! time! must! be!
559&be&applicable?& within!sight.!

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4. Traditio"brevi"manu"" 5. Absolute"Sale"
Grantee!is!already!in!possession!of!the!thing!under! Seller!does!not!reserve!his!title!over!the!thing!sold!
a!title!which!is!not!of!ownership,!such!as!when!the! and! thus,! upon! delivery! of! the! thing,! ownership!
lessee!purchases!from!the!lessor!the!object!of!the! passes!regardless!of!whether!or!not!the!buyer!has!
lease.!! paid.!!
! !
5. Constitutum"possesorium"" 6. Conditional"Sale"
Vendor!remains!in!possession!of!the!property!sold! Conditions! are! imposed! by! the! seller! before!
by! virtue! of! a! lease! contract! agreement! with! the! ownership!will!pass!
vendee.!! !
! *Possessory! lien! and! the! right! of! stoppage! in! transit!
Delivery"of"Sale"of"Rights" can! be! exercised! by! the! unpaid! seller! simultaneously!
1. Execution! of! a! Public! Instrument! unless! the! when!there!is!partial!delivery!
contrary!appears!in!the!deed! !
2. Placing!of!the!titles!of!ownership!in!the!possession! a. SIT!–!goods!he!has!already!parted!with!
of!the!vendee! b. PL!–!on!the!remainder!
3. Use!by!the!vendee!of!his!rights!with!the!consent!of! !
the!vendor! !
! “Risk"of"Loss”"(Art.!1504)!
Sale! Fthis! is! relevant! only! when! the! loss! happened! AFTER!
! the!perfection!of!the!contract!and!before!delivery!and!
1. Sale!on!Satisfaction,!Approval,!Trial! due!to!a!fortuitous!event!
Ownership!passes!to!the!buyer!when:!! !
a. he! signifies! his! acceptance! or! does! any! other! Res&perit&domino,!whoever!is!the!owner!at!the!time!of!
act!adopting!the!transaction;! the!loss!shall!bear!loss!
b. retains! the! goods! without! giving! notice! of! !
rejection,!then!if!a!time!has!been!fixed!for!the! Bar"Question"
return!of!the!goods,!on!the!expiration!of!such! S,!an!American!resident!of!Manila!about!to!leave!on!a!
time,! and! if! no! time! has! been! fixed,! on! the! vacation!sold!his!car!to!B!for!$2,000.!!The!payment!to!
expiration!of!a!reasonable!time.!! be! made! 10! days! after! delivery! to! X,! a! third! party!
! depositary!agreed!upon,!who!shall!deliver!the!car!to!B!
2. Sale"or"Return" upon! receipt! by! X! of! the! purchase! price.! ! It! was!
In! a! sale! or! return,! the! buyer& acquires& ownership& stipulated! that! ownership! is! retained! by! S! until!
upon&delivery&of!the!thing!sold!and!may!revest!the! delivery!of!the!car!to!X.!
ownership!to!the!seller!within!the!time!fixed!in!the! !
contract!or!within!a!reasonable!time.!! 5!days!after!the!delivery!of!the!car!to!X,!the!house!of!X!
! was!gutted!by!fire!thereby!destroying!the!car!without!
3. Sale"of"Specific"Goods" the! fault! of! X! or! B.! ! Is&buyer&B&legally&obligated&to&pay&
Where!there!is!a!contract!of!sale!of!specific!goods,! the&purchase&price?&Yes!
the! seller! may,! by! the! terms! of! the! contract,! !
reserve! the! right! of! possession! or! ownership! in! The!car!was!already!delivered!to!X!when!it!was!lost.!
the! goods! until! certain! conditions! have! been! Thus,!it!will!be!the!buyer!who!bear!the!risk!of!loss.!
fulfilled.!!! !
PBQ:!
Is&it&possible&that&it&will&not&be&the&owner&who&will&bear&
4. Contract"to"Sell" the&loss?&
It!is!considered!a!special!kind!of!conditional!sale,!it! Yes.!!The!res!perit!domino!rule!has!several!exceptions!
is! a! peculiar! kind! of! sale! because! despite! the! 1. when!stipulated!otherwise;!
happening!of!the!condition!and!actual!delivery,!the! 2. security!title!
buyer! does! not! automatically! acquire! ownership.! 3. delay!
If! condition! happens,! the! right! of! the! buyer! is! to! !
compel!the!seller!to!execute!a!final!deed!of!sale.!So! !
ownership!does!not!automatically!pass.!! !
!
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! !
Lawyer’s!Cooperative!v.!Atty.!Tabora! Best!answer:!
Atty.! Tabora! (AT)! bought! a! complete! set! of! American! By! the! execution! of! a! public& instrument! wherein! the!
Jurisprudence! (Amjur.)! from! LC! payable! on! ownership! passes! to! the! buyer! even! if! the! goods! are!
installment.! ! The! contract! stated! that! ownership! shall! still! in! the! possession! of! the! seller.! ! Thus,! if! the! seller!
not! pass! until! full! payment! of! the! price! but! upon! was! at! fault! resulting! in! the! delay,! then! he! shall! bear!
delivery,! the! buyer! will! be! the! one! to! bear! the! loss! the! loss! even! if! he! is! not! the! owner! at! the! time! of! the!
whatever!may!be!the!cause!of!the!loss.! loss.!
! !
On! the! night! when! the! books! were! delivered! to! the! DOUBLE"SALE"
office!of!Atty.!Tabora!in!Naga!City,!there!was!a!fire!thus! !
burning!all!the!books.! Bar"Question"
! In! a! sale! of! a! parcel! of! land! and! there! was! actual!
Atty.!Tabora!refused!to!pay!thus!a!case!was!filed!by!LC.!!! delivery.! ! The! first! buyer! took! possession! but! he! did!
AT!contended!that!he!was!not!the!owner!at!the!time!of! not!register.!!Thereafter,!the!same!seller!sold!the!same!
the!loss!(res&perit&domino).!!However,!it!was!stipulated& parcel! of! land! to! a! second! buyer,! who,! without!
that! the! buyer! shall! bear! the! loss! upon! delivery.! (1st! knowledge! of! the! prior! sale,! registered! the! sale.&&Who&
exception)! will&have&the&better&right?&The"2nd"buyer"
! !
2nd&exception:& P3:5:38!
The!buyer!will!be!the!one!to!bear!the!loss!if!the!seller! Bar"Question"
retained! title! ONLY! to! secure! the! fulfillment! of! the! JV,!owner!of!a!parcel!of!land,!sold!it!to!PP.!But!the!deed!
buyer’s!obligation.! of! sale! was! not! registered.! One! year! later,! JV! sold! the!
! parcel!again!to!RR,!who!succeeded!to!register!the!deed!
3rd&exception:& and! to! obtain! a! transfer! certificate! of! title! over! the!
If! there! was! delay! in! the! delivery! of! the! goods,! and! property!in!his!own!name.!Who&has&a&better&right&over&
thereafter! the! goods! were! lost! or! destroyed! due! to! a! the& parcel& of& land,& RR& or& PP?& Why?& Explain& the& legal&
fortuitous!event.!!Whoever!was!at!fault!resulting!in!the! basis&for&your&answer.&
delay! of! the! delivery! will! be! the! one! to! bear! the! loss.!! !
(whether!or!not!he!is!the!owner).!!! RR! because! there! is! nothing! in! the! facts! that! would!
! show!that!he!is!a!registrant!in!bad!faith.!!At!the!time!he!
Premise:!The!seller!is!still!in!possession!of!the!goods.!! registered! the! deed,! he! still! had! no! knowledge! about!
! the!prior!sale.!(Good!faith!is!presumed)!
1st&scenario& !
If!the!buyer!was!the!one!who!obtained!the!goods!from! Rules&on&Double&Sale:&
the!seller’s!place!but!due!to!his!fault,!he!was!not!able!to! Movable"
get!it!on!the!date!agreed!upon!and!thereafter!the!thing! The!1st!possessor!in&good&faith!has!the!better!right!
!
was!lost!due!to!a!fortuitous!event.!!Even!if!at!the!time! Immovable"
of! the! loss,! the! seller! was! still! the! owner,! the! buyer! 1. 1st!registrant!in&good&faith&
shall!bear!the!loss!because!he!caused!the!delay.! 2. 1st!possessor!in&good&faith&
! 3. Person!who!has!the!oldest!title!in&good&faith&
2nd&scenario& (not! necessarily! the! first! buyer,! he! acquired!
When! the! ownership! is! already! transferred! to! the! ownership!by!other!modes!of!delivery)!
buyer! by! constructive& delivery! and! the! seller! was! at! !
fault!thereby!causing!delay.! *The!first!buyer!can!only!be!in!bad!faith!in!relation!to!
! the!defect!of!the!title!of!the!seller.!The!first!buyer!can!
Wrong!answers:! never! be! a! registrant! in! bad! faith! in! relation! to! the!
Traditio& Brevi& Manu! –! the! buyer! was! already! in! second! sale! (Natural!&Nauna&siya&eh)! “priority&in&time,&
possession!before!the!sale! priority&in&right”!
Constitutum& Possessorium! –! the! seller! will! not! be! in! !
delay! because! he! has! a! right! to! possession! based! on! !
another!contract! !
!

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*What! is! important! under! this! article! is! the! Fcontract!of!sale!with!a!right!to!repurchase!or!
registration*in*good*faith.!!A!buyer!may!have!been!in! pacto!de!retro!sale!
good! faith! upon! perfection! of! the! sale! but! became! in! !
bad!faith!upon!registration.! P6!
! Redemption"
2001"Bar"Question" Right!of!redemption!of!adjoining!lot!owners!
On!June!15,!1995,!Jesus!sold!a!parcel!of!registered!land! !
to! Jaime.! ! On! June! 30,! 1995,! he! sold! the! same! land! to! What!is!the!nature!of!the!land?!
Jose.! 1. Rural!
! 2. Urban!
Who!has!a!better!right!if:! Right!of!preFemption!
a. The! first! sale! is! registered! ahead! of! the! second! Feven! before! the! perfection! of! the! contract,! the!
sale!with!knowledge!of!the!latter.!!Why?! adjoining! lot! owner! may! invoke! the! right! of!
b. The! second! sale! is! registered! ahead! of! the! first! redemption!
sale!with!knowledge!of!the!latter.!Why?! !
! Requisites:!
1st&scenario& The!land!must!be!so!small!in!area!that!there!is!no!
Jaime,!even!if!he!registered!the!sale!with!knowledge!of! apparent!need!for!the!land!in!the!near!future.!!The!
the! second! sale,! he,! as! a! 1st! buyer,! would! still! be! purchase!is!merely!for!speculation.!!!
considered!as!a!registrant!in!good!faith.! !
! 2005"Bar"Question"
2nd&scenario& On! July! 14,! 2004,! Pedro! executed! in! favor! of! Juan! a!
Jaime,!because!the!registration!of!Jose!was!done!in!bad! Deed!of!Absolute!Sale!over!a!parcel!of!land!covered!by!
faith! because! he! was! already! aware! of! the! prior! sale! TCT!No.!6245.!It!appears!in!the!Deed!of!Sale!that!Pedro!
thus!he!cannot!claim!to!be!a!registrant!in!good!faith.! received! from! Juan! P120,000.00! as! purchase! price.!
! However,!Pedro!retained!the!owner’s!duplicate!of!said!
Bautista!v.!Sioson! title.! Thereafter,! Juan,! as! lessor,! and! Pedro,! as! lessee,!
1st! buyer! had! better! right.! Legal! possession! through! executed! a! contract& of& lease! over! the! property! for! a!
Constitutum!Possessorium! period! of! one! (1)! year! with! a! monthly! rental! of!
! P1,000.00.! Pedro,! as! lessee,! was! also! obligated! to! pay&
Carumba!v.!CA! the& realty& taxes! on! the! property! during! the! period! of!
1st! buyer! had! better! right.! Levied! parcel! of! land! was! lease.!!
unregistered!under!the!Torrens!system! !
! Subsequently,!Pedro!filed!a!complaint!against!Juan!for!
P3:28:04! the! reformation! of! the! Deed! of! Absolute! Sale,! alleging!
! that! the! transaction! covered! by! the! deed! was! an!
P4:8:00! equitable! mortgage.! In! his! verified! answer! to! the!
! complaint,! Juan! alleged! that! the! property! was! sold! to!
P5! him! under! the! Deed! of! Absolute! Sale,! and! interposed!
Remedies!of!unpaid!seller! counterclaims! to! recover! possession! of! the! property!
a. Right"to"retain!the!thing!in!his!possession;! and! to! compel! Pedro! to! turn! over! to! him! the! owner’s!
b. Right"of"stoppage!in!transitu;! duplicate!of!title.!!Resolve!the!case!with!reasons.!
c. Right"of"resale;!and! !
d. Right"to"rescind" (2! presumptions! that! it! is! an! equitable! mortgage!
" present!in!the!case)!
P5:37:00!
!
Modes"of"Extinguishment"
!
1. Ordinary!modes!!
!
FPLC3N!
!
2. Special!!
!
Fmodes!of!extinguishment!under!the!law!on!sales!
!
3. ExtraFspecial:!Redemption!
!
a. Legal!
!
b. Conventional!
!
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2012"Bar"Question" Essentially!onerous!
Spouses&Raymundo&v.&Spouses&Bandong& (Kung&walang&bayad,&hindi&siya&lease)&
Eulalia! was! engaged! in! the! business! of! buying! and! !
selling! large! cattle.! In! order! to! secure! the! financial! Lease!v.!Commodatum!
capital,! she! advanced! for! her! employees! (biyaheros).! !
She! required! them! to! surrender! TCT! of! their! Republic!v.!Bagtas!
properties!and!to!execute!the!corresponding!Deeds!of! Government! delivered! 3! bulls! to! Bagtas! for! breeding!
Sale! in! her! favor.! Domeng! Bandong! was! not! required! purposes!however,!one!of!the!bulls!was!not!returned!!
to! post! any! security! but! when! Eulalia! discovered! that! !
he!incurred!shortage!in!cattle!procurement!operation,! Transaction! involving! safety! deposit! boxes,! is! this! a!
he!was!required!to!execute!a!Deed!of!Sale!over!a!parcel! lease?!No,!it!is!a!special!kind!of!deposit!
of!land!in!favor!of!Eulalia.!She!sold!the!property!to!her! !
grandniece!Jocelyn!who!thereafter!instituted!an!action! Nielsen!v.!Lepanto!Mining!
for!ejectment!against!the!Spouses!Bandong.! !
! Frenzel!v.!Uychaco!
To!assert!their!right,!Spouses!Bandong!filed!an!action! !
for! annulment! of! sale! against! Eulalia! and! Jocelyn! Massachusets!Rule!
alleging! that! there! was! no! sale! intended! but! only! !
equitable! mortgage! for! the! purpose! of! securing! the! !
shortage! incurred! by! Domeng! in! the! amount! of! P! 70,! !
!
000.00! while! employed! as! "biyahero"! by! Eulalia.! Was!
!
the! Deed! of! Sale! between! Domeng! and! Eulalia! a! !
contract!of!sale!or!an!equitable!mortgage?!Explain.! !
! !
!
Raul,! Ester,! and! Rufus! inherited! a! 10Fhectare! land! !
from!their!father.!Before!the!land!could!be!partitioned,! !
however,! Raul! sold! his! hereditary! right! to! Raffy,! a! !
!
stranger! to! the! family,! for! P5! million.! Do! Ester! and!
!
Rufus!have!a!remedy!for!keeping!the!land!within!their! !
family?! !
(A)"Yes,"they"may"be"subrogated"to"Raffy’s"right"by" !
!
reimbursing"to"him"within"the"required"time"what"
!
he"paid"Raul." !
(B)! Yes,! they! may! be! subrogated! to! Raffy’s! right! !
provided!they!buy!him!out!before!he!registers!the!sale.! !
(C)! No,! they! can! be! subrogated! to! Raffy’s! right! only! "
with!his!conformity.! "
(D)!No,!since!there!was!no!impediment!to!Raul!selling! "
his!inheritance!to!a!stranger.! "
! "
P6:12:50! "
Contract"of"Lease" "
Jardin!v.!NLRC! "
Taxi! drivers! complained! about! a! deduction! made! by! "
their! operator! for! the! “cleaning”! of! the! taxicabs.! ! The! "
SC! ruled! that! it! is! lease! of! service.! There! is! ERFEE! "
relationship!(control&test).! "
! "
Definition! "
Lease!of!things!(Art.!1643)! "
! "
Nature! "
Consensual! "
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Sublease"and"Assignment"of"Lease" making! the! 3rd! person! as! the! new! lessee,! then! it! shall!
Arts.!1649,!1650!&!1670! be!considered!an!assignment.!
! !
May& a& lessee& sublease& the& property& leased& without& the& If!in!the!agreement!the!lessee!retained!a!reversionary!
consent&of&the&lessor?& interest,!no!matter!how!small,!it!is!merely!a!sublease.!
Yes,!as!long!as!he!was!not!prohibited!by!the!lessor!in! "
doing!so! Bar"Question"
! A! leased! a! condominium! unit! to! B! for! a! period! of! 5!
May& a& lessee& assign& the& property& leased& without& the& years.! ! After! 1! year,! B! transferred! his! rights! to! C!
consent&of&the&lessor?& without!the!knowledge!of!A.!!The!agreement!between!
No,! but! such! right! may! be! granted! or! assented! to! by! B! &! C! was! for! 3! years.! ! Is& the& contract& between& B& && C&
the!lessor! void?&
! No,!it!is!merely!a!sublease!because!B!will!be!reverted!
Bar"Question" to! his! right! as! lessee! for! a! period! of! 1! year! after! his!
Isaac! leased! the! apartment! of! Dorotea! for! 2! years.! 6! agreement!with!C!is!terminated.!
months! later,! Isaac! subleased! a! part! of! the! apartment! !
due!to!a!financial!difficulty.!Is&the&sublease&valid?& Bar"Question"
Yes,!if!there!is!no!express!prohibition!of!subleasing!in! Is& the& buyer& of& a& land& bound& to& respect& an& existing&
the!lease!contract! contract&of&lease&between&the&lessor/seller&and&lessee?&
! !
Bar"Question" Jude!owned!a!building,!which!he!had!leased!to!several!
In!January!1993,!A!Corporation!leased!the!all!the!floors! tenants.!He!then!sold!the!building!to!Ildefonso!without!
of!the!GQS!Towers!for!10!years!at!a!monthly!rental!of! the! knowledge! of! the! tenants.! ! Ildefonso! notified! the!
P3M.! ! It! also! subleased! 5! of! the! 12! floors! to! whollyF tenants! that! he! is! the! new! owner! ordering! them! to!
owned! subsidiaries.! ! The! lease! contract! expressly! vacate! within! 30! days! from! notice.! ! The! tenants!
prohibits! the! assignment! of! the! lease! contract! or! any! refused! to! vacate! insisting! that! they! will! only! do! so!
portion! thereof.! ! The! rental! value! of! the! building! has! when!the!term!of!the!lease!has!expired.!!!
increased!to!50%!since!it!was!leased!to!A!Corporation.! !
Can& the& building& owner& ask& for& the& cancellation& of& the& 3! instances! when! the! buyer! is! bound! to! respect! the!
contract& for& violation& of& the& provision& against& existing!lease:!
assignment?& 1. If!it!is!stipulated!in!the!contract!of!sale!
No,! the! prohibition! is! only! as! to! assignment.! ! In! the! 2. If! the! lease! contract! is! registered! (constructive&
case,! the! lessee! only! subleased! and! the! law! gives! him! notice)!
such! right! to! do! so! because! there! is! no! express! 3. If! at! the! time! of! the! sale,! the! buyer! had! actual!
prohibition!in!the!lease!contract.! knowledge!of!the!lease!contract!(actual&notice)!
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PBQ:" Bar"Question"
A!and!B!entered!into!a!lease!contract.!!Subsequently,!B! Contract&for&a&Piece&of&Work&
entered! into! an! agreement! with! C! wherein! he! An!independent!contractor!obliged!himself!not!only!to!
transferred! his! rights! to! C,! without! the! consent! of! A.! supply! labor! but! also! the! materials.! Subsequently,! he!
Would& this& be& considered& a& violation& of& the& contract& of& bought! the! materials! from! a! supplier! and! the!
lease?& contractor! failed! to! pay! the! latter.& & Can& the& supplier&
It! depends.! ! If! the! agreement! is! merely! a! sublease,! validly&demand&payment&from&the&owner/developer?&
there!is!no!violation!however!if!it!is!an!assignment!of! Yes.! Article! 1729.! ! Despite! the! fact! that! the!
the!lease,!then!there!is!a!violation!thus!it!can!be!a!basis! independent!contractor!is!not!an!agent!of!the!owner,!it!
of!the!rescission!of!the!contract.! is! possible! for! the! supplier! to! be! able! to! hold! the!
! owner!liable!under!the!principle!of!unjust!enrichment.!
How&to&determine?& !
Malacat!v.!Salazar! General"Rule:"
If! in! the! agreement! there! is! an! absolute! transfer! of! The! supplier! can! hold! the! owner! liable! only! to! the!
rights! of! the! lessee! to! the! 3rd! person! such! that! the! extent! of! the! amount! owing! to! the! contractor! at! the!
personality! of! the! lessee! would! disappear! practically! time!of!the!demand.!
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Exceptions:" Rights"&"obligations"of"the"parties""
1. The! owner! is! liable! if! he! paid! the! contractor! !
even! if! the! debt! is! not! yet! due! and! Memorize!Article!1670!
demandable! !
2. If! the! owner! renounced! his! claim! against! the! If! the! parties! did! not! stipulate! the! period! of! the!
contractor!(gratuitous!renunciation)! contract,!the!period!would!depend!on!the!nature!of!the!
3. If! no! bond! was! executed! to! secure! the! claims! object!of!the!contract!whether!rural!or!urban.!
of!the!suppliers!(Performance!Bond)! !
! PFQ:"
Frensel!v.!Ochaco! On!November!15,!1999!A!leased!an!urban&land!to!B!for!
In!the!absence!of!materialmen’s!lien,!the!owner!of!the! a! period! of! 10! years! with! a! rental! payable! annually.!!
edifice!cannot!be!held!liable!because!there!is!no!privity! On! December! 5,! 2009,! B! while! still! possession! of! the!
of!contract!between!the!supplier!and!the!owner.! land,!paid!the!rental!to!A.!!After!expiration!of!the!lease,!
! there! being! no! notice! given! by! either! party! for! the!
Termination"of"the"Contract"of"Lease" termination! of! the! lease,! B& will& continue& to& have& the&
Heirs!of!Dimaculangan!v.!IAC! right&to&use&the&thing:!
! a. for! a! period! of! another! 10! years! (applies! to! the!
Bar"Question" original!period!only)!
A! is! the! owner! of! a! lot! on! which! he! constructed! a! b. for" a" period" of" 1" year" from" November" 15,"
building! for! a! total! cost! of! P10M.! ! Of! that! amount,! B! 2009" (because&in&urban&lands,&it&depends&on&the&
contributed!P5M!provided!that!the!building!as!a!whole! manner& of& payment& of& rentals,& in& the& case,& the&
would! be! leased! to! him! for! a! period! of! 10! years! at! a! payment&is&annually)*
rental!of!P100,000!a!year!to!which!A!agreed.!!! c. only! with! the! tolerance! of! A! (it! is! provided! by!
! law)!
However,! 2! years! into! the! lease,! the! building! was! d. for! all! the! time! necessary! for! the! gathering! of!
totally! burned.! Soon! thereafter,! A’s! workers! cleared! the! fruits! which! the! whole! estate! may! yield! in!
the!debris!and!started!construction!of!a!new!building.!! one!year!(only&applicable&to&rural&land)!
B! then! demanded! that! he! should! occupy! the! said! !
building! for! the! unexpired! term! of! his! original! lease! 2011"Bar"Question"
explaining!that!he!has!spent!partly!in!the!construction! The! term! of! a! 5Fyear! lease! contract! between! X! the!
of!the!burned!building.!!A!did!not!agree.!!Did&A&do&right& lessor! and! Y! the! lessee,! where! rents! were! paid! from!
in&rejecting&B’s&demand?& month! to! month,! came! to! an! end.! Still,! Y! continued!
Yes,!because!the!contract!had!been!extinguished!with! using!the!property!with!X’s!consent.!In!such!a!case,!it!is!
the!loss!of!the!thing!due!to!a!fortuitous!event.! understood!that!they!impliedly!renewed!the!lease:!!
! !
What&if&the&loss&due&to&a&fortuitous&event&is&only&partial?& (A) from" month" to" month" under" the" same"
The!lessee!may!either:! conditions"as"to"the"rest.""
1. demand!for!the!reduction!of!the!rent;!or! (B) under!the!same!terms!and!conditions!as!before!
2. rescind!the!contract! (C) under! the! same! terms! except! the! rent! which!
! they!or!the!court!must!fix.!!
*The!right!of!rescission!shall!only!be!available!if!there! (D) for! only! a! year,! with! the! rent! raised! by! 10%!
is!substantial!loss!or!destruction!! pursuant!to!the!rental!control!law.!!
! !
Implied"New"Lease!!“Tacita&Reconducion”! How&about&the&&terms&and&conditions?&
1. The!lease!period!has!expired! !
2. The! lessee! continues! to! be! in! possession! of! the! All! the! original! terms! and! conditions! are! deemed!
lease! for! at& least& 15& days! from! the! time! of! the! renewed! or! revived! EXCEPT! the! term! of! the! original!
expiration!of!the!lease;!and! contract!of!lease!which!expired!!
3. No!notice!for!the!termination!of!the!contract!from! !
the!lessor!or!the!lessee!! !
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Bar"Question" !
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On! January! 1,! 1980! Nestor! leased! the! fishpond! of!
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Mario! for! a! period! of! 3! years! at! a! monthly! rental! of! !
P1,000! with! an! option! to! purchase! the! same! during!! !
the!period!of!the!lease!for!the!price!of!P500,000.!!! !
After! the! expiration! of! the! 3Fyear! period,! Mario! !
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allowed!Nestor!to!remain!in!the!leased!premises!at!the! !
same! rental! rate.! ! On! June! 15,! 1983,! Nestor! tendered! !
the! amount! of! P500,000! to! Mario! and! demanded! that! !
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the! latter! execute! a! Deed! of! Absolute! Sale! of! the!
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fishpond! in! his! favor.! ! Mario! refused! on! the! ground! !
that! Nestor! no! longer! had! an! option! to! buy! the! !
fishpond.! ! Nestor! filed! an! action! for! specific! !
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performance,!will&the&action&prosper?&
!
No,! because! it! is! clear! in! their! agreement! that! Nestor! !
leased!the!fishpond!with!an!option!to!purchase!during& !
the!period!of!the!lease.!!Also,!it!may!be!true!that!there! !
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is! an! implied! new! lease! in! this! case! because! Mario!
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allowed! Nestor! to! remain! in! the! leased! property! !
however,! only! those! terms! and! conditions! which! are! !
germane& to& a& contract& of& lease! are! deemed! renewed.!! !
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Thus,!the!action!will!not!prosper!because!an!option!to!
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buy!is!not!germane!to!a!lease!contract.! !
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AGENCY" Dela!Peña!v.!Hidalgo!
" Hidalgo! was! the! agent! of! DLP! in! relation! to! the!
Article"1868" properties! of! DLP! here! in! the! Phils.! ! Hidalgo! wrote! a!
By! the! contract! of! agency,! a! person! binds! himself! to! letter!to!DLP!informing!him!that!he!already!appointed!
render! some! service! or! to! do! something! in! another! administrator! because! he! needs! to! leave! the!
representation! or! on! behalf! of! another,! with! the! country!for!medical!reasons.!
consent!or!authority!of!the!latter.! !
! It!was!proven!that!the!principal!received!the!letter!but!
The!purpose!of!the!contract!of!agency!is!the!execution! despite! knowledge! of! the! appointment! of! another!
of!a!juridical!act;!thus,!not!all!representations!result!in! administrator,! he! did! not! do! anything.! ! The! SC! held!
a! contract! of! agency,! only! representations! involving! a! that! by! the! mere! silence! or! inaction! or! failure! to!
juridical!act!results!into!agency! repudiate,! he! would! be! deemed! to! have! impliedly!
! given!his!consent!to!the!new!agency.!!!
Juridical!Act! !
Fcreate,!modify,!extinguish!a!legal!relationship! Bar"Question"
! A! as! principal! appointed! B! as! his! agent! granting! him!
Bar"Question" general! and! unlimited! management! over! A’s!
Joan! asked! Aiza! to! buy! some! groceries! for! her! in! the! properties! stating! that! A! withholds! no! power! from! B!
supermarket.& & Was& there& a& nominate& contract& entered& and! that! the! agent! may! execute! such! acts! as! he! may!
into&between&Joan&and&Aiza?! consider!appropriate.!
Yes,!if!Aiza!agreed,!there!is!a!contract!of!agency&when! !
Aiza! agreed! to! represent! Joan! in! buying! groceries! or! Accordingly,!B!leased!A’s!parcel!of!land!in!Manila!to!C!
there!could!a!contract!of!lease&of&service!provided!there! for!four!years!at!P60,000!per!year!payable!annually!in!
is! no! principalFagent! relationship! between! Joan! and! advance.!!Also,!B!leased!A’s!parcel!of!land!in!Caloocan!
Aiza.! City! to! D! without! a! fixed! term! at! P3,000! per! month!
! payable! monthly.! ! Both! contracts! were! executed! by! B!
Termination" while!A!was!confined!in!Makati!Medical!Center!due!to!
Agency!is!unique!because!it!may!be!terminated!by!the! illness.!!Rule&on&the&validity&and&binding&effect&of&each&of&
unilateral!act!of!one!of!the!parties.! the&above&contracts&upon&A,&the&principal.!
! !
Macke!!v.!Camps! 1st!–!no!SPA!thus!unenforceable!!
! 2nd&–&even!if!no!SPA,!it!is!valid!and!binding!
! !
Rallos!v.!Yangco! PFQ:"
Yangco! wrote! a! letter! to! Rallos.! ! In! his! letter,! he! told! What! if! the! agent! was! authorized! to! sell! a! car! and! a!
Rallos! that! he! has! an! agent,! Collantes,! who! has! the! SPA!was!issued!to!him.!!Thereafter,!he!was!able!to!sell!
authority! to! obtain! the! goods! from! the! former! which! the!car!to!the!buyer.!!A!month!after,!the!buyer!filed!an!
would! be! sold! and! the! proceeds! will! be! remitted! to! action! for! annulment! on! the! ground! that! this! agent!
Rallos!less!commission.! was! a! minor! at! the! time! the! contract! of! sale! was!
! entered!into.!!Will&the&action&prosper?!
Rallos! delivered! the! goods! to! Collantes! however,! the! !
latter! stopped! remitting! thus! Rallos! sued! Yangco.!! No,! it! is! not! the! capacity! of! the! agent! that! should! be!
Yangco! said! that! he! cannot! be! held! liable! because! the! considered! but! that! of! the! principal.! ! Also,! the! only!
agency! between! him! and! Collantes! was! already! party! who! has! the! right! to! institute! the! action! for!
revoked.!!Is!Yangco!correct?! annulment!is!the!incapacitated!person!himself.!
No,!Article"1873" !
There!was!no!notice!given!to!Rallos!that!the!principalF !
agent! relationship! between! Yangco! and! Collantes! has! !
been! revoked.! ! Yangco! should’ve! written! a! letter! to! !
Rallos!to!inform!hi!of!such!revocation.! !
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PBQ:" How&do&you&determine&if&the&agent&has&authority?&
If!the!contract!agency!is!made!orally,!would!a!contract! Demand!for!the!presentation!of!the!power!of!attorney,!
entered!into!by!the!agent!bind!the!principal?! read!the!lawand!jurisprudence!
GR:!Yes! "
Exceptions:! Katigbak!!v.!Tai!Hing!
Articles!1878!and!1874"–VIPs!! The! agent! was! authorized! to! sell! properties! of! the!
! principal! but! the! principal! refused! to! recognize! the!
If!the!agent!is!authorized!to!sell!a!parcel!of!land!and!his! contract!claiming!that!the!agent!only!had!authority!to!
authority!is!not!in!writing,!the!sale!is!void.!!It!is!not!the! sell!properties!which!he!already!owned!at!the!time!of!
agency,!but!the!sale!which!is!void.! the! issuance! of! the! power! of! attorney! and! not! those!
! acquired!thereafter.!
Illustration&#1:& !
The! law! does! not! require! the! SPA! to! be! in! a! specific! The! SC! held! that! the! contract! is! valid! because! of! a!
form.!!It!may!be!a!simple!note.!! phrase! in! the! power! of! attorney! “which&might&belong”!
! Thus,!even!those!properties!acquired!by!the!principal!
Illustration&#2:& after! the! issuance! of! the! power! of! attorney! are!
The! seller,! Brigida,! representing! her! daughter,! sold! a! included! in! the! properties! which! the! agent! is!
parcel!of!land!but!the!authority!of!the!mother!was!not! authorized!to!sell.!
put!in!writing.!!–the!sale!is!VOID.! !
! Municipal!Council!of!Iloilo!v.!Evangelista!!
Bar"Question" The! SC! ruled! that! the! “authority! to! hire! includes! the!
X! was! abroad! and! phoned! his! brother! Y! authorizing! authority!to!pay”!thus!when!the!agent!paid!the!lawyers!
him!to!sell!X’s!parcel!of!land!in!Pasay.!!X!sent!the!title! he! hired,! he! acted! within! the! scope! of! his! authority!
to! Y! by! courier! service.! Acting! for! his! brother,! Y! when!he!paid!for!their!services.!!
executed!a!notarized!deed!of!absolute!sale!of!the!land! !
to!Z!after!receiving!payment.!!What!is!the!status!of!the! Insular!Drug!v.!PNB!
sale?! The!SC!held!that!the!power!to!collect!checks!does!not!
FThe!sale!is!void!because!the!authority!of!Y!was!merely! include! the! power! to! indorse! or! encash! because! the!
a!verbal!conversation.!!It!must!be!in!writing! latter!must!be!in!a!separate!power!of!attorney.!
! !
P9! Fiduciary!Obligation!
2014"Bar"Question" Domingo!v.!Domingo!
Fe,! Caridad! and! Esperanza! inherited! from! their! Principal!Domingo!authorized!agent!Domingo!to!sell!a!
parents! a! 500Fsq! lot! which! they! leased! to! Maria! for! 3! parcel! of! land.! ! Agent! Domingo! introduced! a!
years.! ! One! year! after,! Fe! claiming! to! have! the! prospective! buyer,! de! Leon.! ! While! the! principal! and!
authority! to! represent! her! siblings,! offered! to! sell! the! the!prospective!buyer!were!negotiating,!the!latter!gave!
leased! property! to! Maria! which! the! latter! accepted.!! the! agent! P1,000! as! gift.! ! After! further! negotiations,!
The! sale! was! not! reduced! into! writing! but! Maria! they! still! cannot! agree! as! to! the! price! so! de! Leon!
started!making!partial!payments!to!Fe!which!the!latter! proposed!to!just!eliminate!agent!Domingo!so!they!can!
received! and! acknowledged.! ! After! giving! the! full! finally! agree! on! the! price.! ! The! SPA! was! revoked! and!
payment,!Maria!demanded!for!the!execution!of!a!Deed! the! prospective! buyer! said! that! he! is! no! longer!
of!Absolute!Sale!which!Esperanza!and!Caridad!refused! interested! in! buying! the! property.! ! The! agent!
to! do.! ! Worst,! she! found! out! that! the! siblings! sold! the! subsequently! found! out! that! the! parcel! of! land! was!
same!property!to!Manuel!and!this!compelled!Maria!to! registered! under! the! name! of! de! Leon’s! wife;! thus,! he!
file! a! complaint! for! the! annulment! of! the! sale! with! filed!a!case.!
specific! performance! and! damages.& & If& you& were& the& !
judge,&how&will&you&decide&the&case?& The!SC!held!that!even!if!the!revocation!of!the!SPA!was!
" done! in! bad! faith,! all! the! agent’s! commission! are!
Obligations"of"the"Agent" forfeited!because!he!failed!to!comply!with!his!fiduciary!
1. Act!within!the!scope!of!his!authority;!and! duty! of! delivering! to! the! principal! whatever! he! might!
2. Act!in!representation!of!the!principal! have!received!in!the!contract!of!agency.!
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Bar"Question" PBQ:!Rights"and"Obligations"of"the"Principal"
X! appoints! Y! as! his! agent! to! sell! his! products! in! Cebu! The! primary! obligation! is! to! comply! with! all! the!
City.!Can&Y&appoint&a&sub)agent&and&if&he&does,&what&are& obligations,! which! the! agent! may! have! contracted!
the&effects&of&such&appointment?! within!the!scope!of!his!authority!and!in!representation!
When! an! agent! appoints! a! subFagent,! he! does! not! of!the!principal!
dissociate! himself! from! the! agency.! ! He! is! still! the! !
agent,! he! will! just! have! another! person! to! help! him! What& if& the& agent& assumed& the& obligation& of& the&
accomplish! the! purpose! of! the! agency! thus! he! is! principal& to& shoulder& the& expenses& in& carrying& out& his&
responsible!for!the!acts!of!a!subFagent.! functions?!What!if!he!failed!to!put!up!the!amount,!will!
! he!be!liable?!
Whereas,! under! Article" 1892,! if! one! appoints! a! Not! necessarily.! ! If! later! on! it! turned! out! that! the!
substitute,!he!will!no!longer!be!an!agent;!the!substitute! principal!is!already!insolvent,!the!agent!is!not!obliged!
will!become!the!new!agent.!! to! advance! the! amount! necessary! to! carry! out! his!
" functions.!
Can& the& principal& hold& the& substitute& liable& for& the& !
damage&caused&to&the&principal?& General&Rule:&
Yes,! he! may! do! so.! ! But! this! is! not! absolute,! take! note! The! agent! may! seek! reimbursement! for! the! expenses!
that! the! agent! is! not! the! insurer! of! the! success! of! the! incurred!in!carrying!out!his!functions!
principal.! !
" Exceptions:&Article"1918&
All! acts! of! the! substitute! appointed! against! the! Example:!
prohibition! of! the! principal! shall! be! void.! ! But! if! the! If! the! agent! acted! in! contravention! of! the! principal’s!
agent!was!not!prohibited!from!appointing!a!substitute,! instructions! UNLESS! the! latter! wants! to! avail! of! the!
the!law!provides!that!the!agent!shall!be!responsible!for! benefits!derived!from!the!contract!
the! acts! of! such! substitute! but! it! does! not! mean! "
automatic! responsibility,! it! depends! on! the! factual! PFQ:! The! agent,! acting! within! the! scope! of! the!
circumstances!of!each!case.! authority! and! in! representation! of! the! principal,!
! entered! into! a! contract! involving! a! warehouse! owned!
Commission"Agent" by! the! principal.! ! However,! the! principal! also! entered!
What& if& the& agent& failed& to& comply& with& his& obligation?& into! a! contract! with! a! 3rd! person! involving! the! same!
Can&he&be&held&liable?& warehouse.!!Who!has!a!better!right?!
It!is!not!absolute.!!There!is!a!defense!of!the!exercise!of! !
the! diligence! required.! ! Again,! the! agent! is! not! the! General&Rule:&
insurer!of!the!success!of!the!principal.! Priority!in!time,!priority!in!right!
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Guarantee!Commission!Agent!“del!credere!agent”! Exception:&
(cannot! invoke! the! exercise! of! due! diligence! as! a! When!the!transaction!involved!is!a!sale,!apply!the!rule!
defense)! under!Article!1544!on!double!sale.!
As! an! agent,! Al! was! given! a! guarantee! commission! in! !
addition! to! his! regular! commission! after! he! sold! 20! Modes"of"Extinguishment"
refrigerators!to!a!company.!!The!company!failed!to!pay! Enumeration!under!Article!1919!is!not!exclusive.!
for! the! units! sold.! ! Al’s! principal! demanded! payment! [EDWARD]!
for! the! customer’s! accountability.! ! Al! objected! on! the! !
ground!that!his!job!was!only!to!sell!and!not!to!collect! PBQs:!Extinguishment!due!to!death!and!revocation!
payment! for! units! bought! by! the! customer.! ! Is& Al’s& "
objection& valid?& Can& his& principal& collect& from& him& or& Bar"Question"
not?& Mario! received! from! Edgar! a! pendant! with! diamonds!
No,! his! objection! is! not! valid! thus! his! principal! can! valued!at!P5,000!to!be!sold!on!commission!basis!or!to!
collect!from!him.!!As!a&guarantee&commission&agent,!he! be!returned!upon!demand.!!On!the!evening!of!August"
does! not! only! have! the! obligation! to! sell! but! he! also! 21," 1987,! while! he! was! walking! home,! two! men!
has! the! obligation! to! collect! the! proceeds! of! the! sale! snatched! his! clutch! bag! containing! the! pendant! and!
and!he!bears!the!risk!of!collection.!! ran! away.! ! Subsequently,! the! snatchers! were!
! apprehended!and!charged.!!During!the!pendency!of!the!

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criminal! case,! Edgar! brought! an! action! against! Mario! C! has! a! better! right! because! the! sale! of! B! to! D! is! void!
for! the! recovery! of! the! pendant! or! its! value! and! because!the!authority!is!not!in!writing.!
damages.! ! Mario! interposed! the! defense! of! fortuitous! Article"1874""
event.!!! !
! What&if&B&had&an&SPA?&
Edgar!contends:! Article"1931"
1. The! defense! of! fortuitous! event! is! untenable! It! depends! on! whether! B! had! knowledge! of! the! death!
because! there! was! negligence! on! the! part! of! the! of!A!at!the!time!that!he!entered!into!the!contract:!
defendant! 1. If! B! had! knowledge,! then! C! shall! have! a! better!
2. There! must! be! prior! conviction! of! Robbery! for! right.!
the!defense!of!fortuitous!event!to!be!availed!of! 2. Even! if! B! had! no! knowledge! but! D! acted! in! bad!
" faith,!C!will!still!have!a!better!right!
Decide&the&case.& 3. If!B!had!no!knowledge!and!D!acted!in!good!faith,!
! D! will! have! a! better! right! under! Article! 1544!
The! act! of! the! agent! in! carrying! a! clutch! bag! at! night! because!D!registered!the!sale.!
containing!diamonds!is!considered!negligent.!Thus,!he! !
cannot!interpose!fortuitous!event!as!a!defense!in!order! Bar"Question:"
to!avoid!liability.! An! agent! authorized! by! a! SPA! to! sell! a! parcel! of! land!
! belonging! to! the! principal! succeeded! in! selling! the!
Austria!v.!CA!(on!Edgar’s!2nd&contention)! same!to!a!buyer!according!to!the!instructions!given!to!
The!SC!held!that!for!fortuitous!event!to!be!invoked!as!a! him.!!The!agent!executed!a!deed!of!sale!on!behalf!of!his!
defense,!it!is!not!necessary!that!the!perpetration!of!the! principal!2!days!after!the!principal!died,!and!event!that!
act!be!apprehended!or!convicted.!!It!is!only!necessary! neither!the!agent!nor!the!buyer!knew!at!the!time!of!the!
that! the! event! be! proven! by! preponderance! of! sale.!What&is&the&status&of&the&sale?&&
evidence.! The!sale!is!valid!(Article"1931)!
! As! long! as! the! agent! had! no! knowledge! and! the! 3rd!
What& if& the& principal& died,& should& the& agent& still& carry& person! acted! in! good! faith,! the! contract,! though!
out&the&agency?& entered! after! the! death! of! the! principal,! would! still!
& bind!the!estate!of!the!principal.!
General&Rule:&& !
No,! death! of! one! of! the! parties! extinguishes! the! Revocation"
contract! and! agency! is! representative! in! character,! if! If!the!parties!agreed!that!the!authority!of!the!agent!is!
the!principal!is!already!dead,!the!agent!will!no!longer! for! one! year! and! 3! months! into! the! contract,! the!
represent!anyone.! principal! revoked! the! authority! of! the! agent.! ! Can! the!
! agent!hold!the!principal!liable!for!damages!for!breach!
Exceptions:&! of!contract?!
1. The! agent! shall! continue! with! task! already! begun! !
and!delay!would!entail!danger.!! Barretto!v.!Sta.!Maria!
2. Article"1930! Obiter:!Even!if!there!was!a!period!agreed!upon!by!the!
3. Article!1931!(Rallos!v.!Go!Chan)!PBQ! parties! as! to! the! authority! of! the! agent,! the! principal!
PFQ:" can! revoke! the! authority! of! the! agent! at! any! time!
In!a!phone!conversation,!A!authorized!B!in!1950!to!sell! because! agency! is! based! on! trust! and! confidence.!!
a!parcel!of!land.!!A!died!in!1954.!!In!1956,!A’s!children! However,! having! the! right! to! revoke! doesn’t!
sold!the!same!land!to!C.!!In!1957,!B!sold!the!same!land! necessarily!mean!that!he!will!not!be!liable!for!damages!
to!D.!!! under! the! principle! of! abuse! of! right! (Human!
! Relations)!
It!appears!that!C!did!not!register!the!sale!executed!by! !
the! children.! D,! who! was! not! aware! of! the! previous! Article"1927!(Agency!coupled!with!interest)!
sale,!registered!the!sale!executed!by!B!whose!authority! Instances! when! the! principal! cannot! revoke! the!
to!sell!was!annotated!at!the!back!of!the!OCT.!!Assuming! authority!of!the!agent!
that! B! has! the! authority! to! sell! the! land,! who& has& the& !
better&right,&C&or&D?& !
& !

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Bar"Question" !
Richard! sold! a! parcel! of! land! in! Cebu! City! to! Leo! for! !
P100M!payable!in!annual!installments!over!a!period!of! !
10! years! but! title! will! remain! with! Richard! until! the! !
purchase!price!is!fully!paid.!!In!order!for!Leo!to!pay!the! !
price,! Richard! gave! him! a! power! of! attorney! !
authorizing! him! to! subdivide! the! land,! sell! the! !
individual! lots! and! deliver! the! proceeds! to! Richard! to! !
be!applied!to!the!purchase!price.!!! !
! !
5! years! later,! Richard! revoked! the! power! of! attorney! !
and! took! over! the! sale! of! the! subdivision! lots! himself.!! !
Is&the&revocation&valid&or&not?& !
" !
No,!the!facts!of!the!case!pertain!to!an!agency!coupled! !
with!interest!because!the!agency!was!constituted!as!a! !
means!of!fulfilling!an!obligation!which!had!previously! !
been!contracted!(obligation!to!pay!the!price).!!Thus,!as! !
long! as! the! interest! still! exists,! the! principal! cannot! !
validly!revoke!the!authority!of!the!agent.! !
! !
Coleongco!v.!Claparols! !
Claparols! is! the! owner! of! a! nail! factory! and! he! badly! !
needed! funds! for! his! business! to! survive.! He! applied! !
for! loan! with! different! banks! but! to! no! avail.!! !
Coleongco! offered! to! lend! money! but! on! several! !
conditions:!that!he!be!appointed!as!agent!of!Claparols;! !
that!he!be!the!one!to!obtain!the!bills!of!lading!when!the! !
goods! are! shipped,! that! he! be! the! one! to! market! the! !
products,!etc.! !
! !
Subsequently,! Claparols! revoked! the! authority! of! !
Coleongco! thus! the! latter! sued! the! former! claiming! !
that! the! agency! is! one! coupled! with! interest.! Is& !
Coleongco’s&claim&correct?& !
& !
Yes,! the! contract! involves! a! bilateral! contract! (loan)! !
which! depends! upon! the! agency.! He! would! not! have! !
lent!money!if!he!will!not!be!appointed!as!agent.! !
! !
However,! the! SC! held! that! there! could! be! a! valid! !
revocation! despite! Article! 1927.! ! Thus,! even! if! the! !
agency! is! one! coupled! with! interest,! the! revocation! is! !
valid!because!there!was!a!just*cause.& !
!!! !
! !
! !
! !
! !
! !
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P10! Bar"Question"
PARTNERSHIP" Can& a& husband& and& wife& form& a& limited& partnership& to&
! engage& in& real& estate& business& with& the& wife& being& a&
Article"1767" limited&partner?&
By& the& contract& of& partnership,& two& or& more& persons& (Take!note:!The!nature!of!business!is!irrelevant!and!it!
bind* themselves& to* contribute& money,& property,& or& doesn’t!matter!who!is!the!limited!partner!whether!the!
industry& to* a* common* fund,& with& the& intention& of& husband!or!wife.)!
dividing*the*profits&among&themselves.& !
& Yes,! because! they! are! not! prohibited! under! the! law!
Two& or& more& persons& may& also& form& a& partnership& for& since! limited! partnership! is! NOT! a! universal!
the&exercise&of&a&profession.& partnership.!
! !
Nature&&&Characteristics:&& Bar"Question"
Consensual!! Can& 2& corporations& organize& a& general& partnership&
Essentially!onerous! under& the& CC?& Can& a& corporation& organize& a& general&
! partnership&under&the&CC?&
Bar"Question" In!both!instances,!No,!
X! used! his! savings! from! his! salaries! amounting! to! Tuazon!v.!Bolaños!
P2,000! as! capital! in! establishing! a! restaurant.! ! Y! gave! The!SC!held!that!while!a!corporation!may!enter!into!a!
the!amount!of!P4,000!to!X!as!“financial&assistance”!with! joint!venture!agreement,!it!cannot!validly!enter!into!a!
the!understanding!that!Y!will!be!entitled!to!22%!of!the! contract!of!partnership.!
annual! profits! derived! from! the! operation! of! the! !
restaurant.! ! After! the! lapse! of! 22! years,! Y! filed! a! case! Oral! partnership! where! no! immovable! property! is!
demanding! his! hare! in! the! said! profits.! ! X! denied! that! contributed!is!valid!
there! was! a! partnership! and! raised! the! issue! of! !
prescription! as! Y! did! not! assert! his! rights! at! anytime! Article"1772"
within!10!years.!!Is&Y&a&partner&of&X&in&the&business?! Every& contract& of& partnership& where& the& capital&
! contribution& in& money& or& property& is& P3,000& or& more&
UP:! Yes,! because! they! agreed! to! contribute! to! a! shall& be& in& a& public& instrument& and& must& be& registered&
common! fund! and! there! was! agreement! to! divide! the! with&the&SEC.&
profits.!!! &
! Even& if& there& is& failure& to& comply& with& the& formalities&
CU:!No,!there!is!no!agreement!to!contribute!because!it! prescribed& in& the& preceding& & paragraph,& it& will& be&
was! only! X! who! established! the! restaurant.! ! The! without&prejudice&to&the&liability&of&the&partnership&and&
financial!assistance!does!not!necessarily!mean!that!it!is! the&partners&to&3rd&persons.&
a!contribution!to!a!common!fund,!it!could!be!by!way!of! &
donation!or!loan.!! Article"1768"
! A& juridical& personality& shall& be& created& separate& and&
Under! Article" 1769,! while! it! is! true! that! when! a! distinct&from&the&individual&partners.&
person! receives! profits,! it! would! raise! an! inference! &
that!he!is!partner!however!no!inference!shall!be!made! Articles"1771"v."1773"
that! he! is! a! partner! in! such! business! if! he! received! If! an! immovable! property! is! contributed! and! there! is!
money! in! payment! of! a! debt! in! installment! or! as! no! inventory! signed! by! all! contracting! parties,! the!
annuity! of! a! widow! of! a! deceased! partner,! among! partnership!is!void.!
others.! !
! What& if& there& is& an& inventory& but& the& partnership&
Bar"Question"DMCQ" contract&is&not&in&a&public&instrument?&
Distinguish&co)ownership&from&partnership& Dauden!Hernaez!v.!delos!Angeles!
A! coFownership! is! created! not! only! by! agreement! by! When! the! law! requires! a! particular! form! and! such! is!
the!parties!but!also!by!law.!! not!complied!with,!the!contract!will!only!be!void!if!the!
! law!itself!provides!for!the!nullity!of!the!contract!
! !
! !
68"
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P10:28:25! project,! sued! A! for! the! collection! of! the! indebtedness!
! to!him.!!A!moved!to!dismiss!the!complaint!against!him,!
Classification"of"Partnership" on! the! ground! that! it! was! ABC! partnership! that! was!
! liable!for!the!debt.!!D!replied!that!ABC!Partnership!was!
As&to&the&Duration& dissolved! upon! completion! of! the! project! for! which!
1. fixed"term" purpose!the!partnership!was!formed.!!Will&you&dismiss&
2. at"will" the&complaint&against&A,&if&you&were&the&judge?&
3. for"a"particular"undertaking" !
! No,! the! individual! partners! are! subsidiarily! liable! for!
If&in&the&articles&of&partnership&there&was&no&fixed&period& partnership! obligations! in! case! the! assets! of! the!
as& to& the& term& or& duration& of& the& partnership,& is& it& a& partnership!are!not!sufficient!to!pay!the!debt.!
partnership&at&will?& !
Not! necessarily.! ! It! may! be! a! partnership! for! a! P10:39:45!
particular!undertaking.! !
! Classes"of"Partners"
Ortega!v.!CA! As&to&the&rights&and&obligations&
Atty.!Misa,!one!of!the!senior!name!partners,!dissolved! Frelevant!only!in!limited!partnership!
the! partnership.! ! The! junior! partners! opposed! and! !
questioned!the!validity!of!the!dissolution!and!wants!to! 2013"Bar"Question"
hold! Atty.! Misa! liable.! ! According! to! them,! he! cannot! As!a!rule,!a!limited!partner!cannot!be!held!liable!up!to!
just! dissolve! the! partnership! because! it! is! not! a! his!personal!property!
partnership! at! will! since! there! were! several! purposes! !
indicated! under! the! articles! of! partnership! by! reason! Exceptions:&
of!which!the!partnership!was!formed.! a. If"he"actively"participates"in"the"management"
! of"the"business"of"the"partnership"
The!SC!held!that!despite!the!fact!that!several!purposes! Fhe! does! not! become! a! general! partner! but! he!
were! enumerated! in! the! articles! of! partnership,! it! is! may!be!held!liable!as!if!he!is!a!general!partner!
not! a! partnership! for! a! particular! undertaking! but! a! !
partnership!at!will!thus!the!dissolution!was!proper.! b. If"his"surname"appears"in"the"firm"name"
! Exception!to!the!Exception:!
As&to&the&extent&of&liability& He!may!not!be!held!liable!if!that!surname!is!also!
& the!surname!of!another!partner!who!is!a!general!
1. General" partner!or!if!such!surname!is!already!in!the!name!
Fall! the! partners! are! general! partners! and! each! of! of! the! partnership! even! before! he! entered! into!
them! has! the! right! to! participate! in! the! the!partnership!
management! of! the! business! subject! to! their! !
agreement! and! may! be! ! held! liable! up! to! his! c. If"he"is"both"a"general"and"a"limited"partner"at"
personal!property!for!partnership!obligations! the"same"time"
! Fthe! law! provides! that! if! such! partner! is! at! the!
2. Limited" same!time!a!general!and!a!limited!partner,!he!will!
Fthere! should! be! at! least! one! general! partner! and! have! all! the! rights! and! obligations! of! a! general!
at! least! one! limited! partner.! ! The! limited! partner! partner! however,! as! he! is! also! a! limited! partner,!
does! not! have! the! right! to! participate! in! the! in!case!of!dissolution,!he!will!have!preference!as!
management! of! the! business! but! his! liability! for! to! the! assets! of! the! partnership! which! he! would!
partnership! obligations! is! limited! to! his! capital! not!have,!had!he!not!been!a!limited!partner!
contribution! !
! d. If" there" was" failure" to" substantially" comply"
Bar"Question" with"the"formalities"prescribed"by"law"for"the"
A,! B! &! C! formed! a! partnership! for! the! purpose! of! creation"of"a"limited"partnership:"such&as!
contracting!with!the!Government!for!the!construction! When!there!is!no!certificate;!
of! one! of! its! bridges.! ! On! June! 30,! 1992,! after! When!the!certificate!is!signed!but!not!subscribed;!
completion!of!the!project,!the!bridge!was!turned!over! When!the!certificate!is!not!signed!by!all!partners;!
by! the! partners! to! the! Government.! ! On! August! 30,! When!the!certificate!does!not!name!the!partners!
1992,! D,! one! of! the! suppliers! of! the! construction! !
69"
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Effect:!Will&it&result&to&a&void&partnership?& !
No,! despite! such! nonFcompliance,! it! is! a! valid! Yes.! ! The! extent! of! liability! depends! on! when! the!
contract!among!the!partners.!!However,!each!one! obligation! was! incurred.! ! If! it! was! incurred! before! he!
of!them!can!be!treated!as!a!general!partner!as!far! became!a!partner,!then!he!will!only!be!liable!up!to!his!
as!third!persons!are!concerned! capital!contribution!unless!he!expressly!bound!himself!
! to!such!obligation.!!!
As&to&their&contribution& !
!
Whereas! if! the! obligation! is! incurred! when! he! is!
1. Capitalist"
already! a! partner,! then! he! shall! be! liable! up! to! his!
2. Industrial"
personal!property.!
!
!
May&a&partner&be&both&capitalist&and&industrial?&
Managing"Partner"
Yes,!but!the!rights!&!obligations!would!be!different!
X! is! indebted! to! the! partnership! P100,000! and! to! A,!
!
another! partner,! P50,000.! ! X! paid! A! P30,000.! Who& is&
2013"Bar"Question"
entitled&to&the&P30,000,&&A&or&the&partnership?&
Joe! and! Rudy! formed! a! partnership! to! operate! a! car!
A!may!be!entitled!to!the!entire!amount!if!he!is!not!the!
repair! shop! in! Quezon! City.! ! Joe! provided! the! capital!
managing!partner!in!the!partnership.!!
while!Rudy!contributed!his!labor!and!industry.!!!
!
!
The! rule! on! proportional! application! under! Article"
On! one! side! of! their! shop,! Joe! opened! and! operated! a!
1792,! is! only! applicable! when! the! partner! to! whom!
coffee!shop!while!on!the!other!side,!Rudy!put!up!a!car!
payment! was! made! is! a! managing! partner! because! of!
accessories! store.! May& they& engage& in& such& separate&
conflict!of!interest.!(P20k!to!the!partnership!and!P10k!
businesses&without&the&consent&of&the&other&partner?&
to!A)!
!
!
As! far! as! capitalist! partners! are! concerned,! they! may!
However,!even!if!A!is!the!managing!partner,!A!may!still!
not!engage!in!a!business!similar!to!the!kind!of!business!
be! entitled! to! the! entire! amount! if! the! debt! to! A! is!
with!that!of!the!partnership.!
already!due!and!the!debt!to!the!partnership!is!not!yet!
!
due.!
As!far!as!industrial!partners!are!concerned,!they!may!
!
not!validly!engage!in!any!business!without!the!express!
If!A!is!a!managing!partner!and!both!debts!are!already!
consent!of!the!other!partner.!
due!and!demandable,!if!the!debt!to!A!is!more!onerous!
!
and!X!invoked!his!right!to!have!his!payment!applied!to!
PFQ:"""
the!more!onerous!debt.!
The! business! of! a! partnership! suffered! losses.! ! In! a!
!
meeting! of! the! partners,! 4! out! of! 5! of! them! agreed! to!
If!A!is!a!managing!partner!and!both!debts!are!already!
contribute! additional! capital! so! the! business! will!
due!and!demandable!and!both!are!of!the!same!nature!
survive.! ! Can& the& 5th& partner& who& declined& to& give&
and! burden,! the! entire! amount! shall! be! for! the!
additional& contribution,& compelled& to& give?! No,! unless!
partnership! if! A! issues! a! receipt! in! the! name! of! the!
in!the!articles!of!partnership!it!is!so!stipulated!that!by!
partnership.!
mere! agreement! of! the! majority! of! the! partners,! each!
!
may!be!compelled!to!give!additional!contribution.!
In! other! words,! for! the! rule! on! proportional*
!
application!to!apply,!there!are!4!requirements:!
Can&he&be&compelled&to&sell&his&interest?&
1. The!partner!who!received!is!a!managing!partner!
It!depends!if!he!is!a!capitalist!or!industrial.!
2. The!2!debts!are!both!due!and!demandable!
If!he!is!a!capitalist,!yes!he!may!be!compelled.!However,!
3. The! debt! to! A! is! not! the! more! onerous! debt! and!
if!he!is!an!industrial!partner,!he!cannot!be!compelled!
the! debtor! did! not! choose! to! have! the! payment!
to!sell!his!interest!to!the!other!partners.!
applied!to!the!more!onerous!debt!
!
4. The! partner! who! received! the! payment! issued! a!
Incoming/New"Partner"
receipt!in!his!name!
ABC! formed! ABC! partnership.! ! After! some! time,! D!
!
became!a!partner.!!6!months!thereafter,!a!partnership!
!
obligation! worth! P5M! became! due! and! demandable.!!
!
Can&the&creditor&hold&D&liable&for&the&said&amount?&If&so,&
!
up&to&what&extent?&
70"
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Property"Rights"" 2013"Bar"Question"
Frequently&asked:& In! 2005,! L,! M,! N,! 0! and! P! formed! a! partnership.! L,! M!
1. Partner’s!right!in!specific!partnership!property! and! N! were! capitalist! partners! who! contributed!
2. Partner’s!interest!in!the!partnership! P500,000!each,!while!0,!a!limited!partner,!contributed!
3. Partner’s! right! to! participate! in! the! management! P1! ,000,000.! P! joined! as! an! industrial! partner,!
of!the!business!of!the!partnership!! contributing! only! his! services.! The! Articles! of!
! Partnership,! registered! with! the! Securities! and!
PBQ:" Exchange! Commission,! designated! L! and! 0! as!
Partner’s!right!in!specific!partnership!property! managing! partners;! L! was! liable! only! to! the! extent! of!
If&a&partnership&has&a&parcel&of&land,&what&is&a&partner’s& his!capital!contribution;!and!P!was!not!liable!for!losses.!!
right&in&relation&to&this&property?& !
Art."1811" In! 2006,! the! partnership! earned! a! net! profit! of!
A! partner! is! coFowner! with! his! partners! as! to! specific! P800,000.! In! the! same! year,! P! engaged! in! a! different!
partnership!property.! business!with!the!consent!of!all!the!partners.!However,!
! in! 2007,! the! partnership! incurred! a! net! loss! of!
This! coFownership! is! sui! generis! and! it! has! the! P500,000.! In! 2008,! the! partners! dissolved! the!
following! incidents! (it! is! not! the! same! as! that! in! coF partnership.! The! proceeds! of! the! sale! of! partnership!
ownership!in!property!law)! assets! were! insufficient! to! settle! its! obligation.! After!
! liquidation,! the! partnership! had! an! unpaid! liability! of!
2&most&distinct&features:& P300,000.!!
If!A,!B,!&!C!are!coFowners!of!a!parcel!of!land!and!A!sells! !
or! assigns! his! interest! over! the! coFowned! property! Assuming& that& the& just& and& equitable& share& of& the&
without!the!consent!of!the!other!coFowners.!!Would&it& industrial&partner,&P,&in&the&profit&in&2006&amounted&to&
be&a&valid&sale?& P1&00,000,&how&much&is&the&share&of&0,&a&limited&partner,&
No,! it! will! not! bind! the! partnership! or! the! other! in&the&P800,000&net&profit?&(1%)!!
partners! !
! (A) P160,000!
Can& the& separate& creditor& of& A& validly& levy& upon& A’s& (B) P175,000!
interest&upon&the&co)owned&property?& (C) P280,000!
No,!only!partnership!creditors!m!ay!validly!levy!upon! (D) P200,000!
partnership!properties! (E) None!of!the!above!
! !!
Partner’s!interest!in!the!partnership! SUGGESTED!ANSWER:!
It!is!the!partner’s!share!in!the!profits!and!the!surplus! (C)"P280,000"
! First,!deduct!the!share!of!P!from!the!profits.!P800,000!
What&will&be&a&partner’s&share&in&the&profits?& less!P100,000!is!P700,000.!Next,!get!the!share!of!O!by!
1. based!on!stipulation! following!the!proportion!that!the!shares!of!L,!M,!N,!O!is!
2. in!proportion!to!their!capital!contribution! 1:1:1:2,!respectively.!!
however,! if! one! is! an! industrial* partner,! he!
shall! be! given! first! the! just! and! reasonable! Bar"Question"
value! of! his! service! and! the! balance! shall! be! Diel,! Carlo! and! Una! are! general! partners! in! a!
distributed! to! the! capitalist! partners! in! merchandising!firm!having!contributed!equal!amounts!
proportion!to!their!capital!contribution! to!the!capital.!!They!also!agreed!for!equal!distribution!
! in!whatever!net!profit!for!every!fiscal!period.!!After!2!
In& relation& to& a& partner’s& interest& in& the& partnership& years,! Una! conveys! her! whole! interest! in! the!
profits,& can& he& assign& his& whole& interest& in& the& partnership! to! Justin! without! the! knowledge! and!
partnership& even& without& the& consent& of& the& other& consent!of!Diel!and!Carlo.!
partners?& !
Yes" but! such! assignment! will! not! result! in! the! 1. Is&the&partnership&dissolved?&No&
dissolution! of! the! partnership! because! the! assignee! 2. What&are&the&rights&of&Justin,&if&any?&
dos!not!become!a!partner! Does& he& have& the& right& to& participate& in& the&
! management?& How& about& a& right& to& the& net& profits&
! of&P360,000?&
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The! assignee! does! not! have! the! right! to! participate! in! If! there! is! only! one! managing! partner! and! his!
the!management.! appointment! as! such! is! mentioned! in! the! articles! of!
! partnership! such! partner! cannot! be! easily! removed.!!
As!to!the!net!profits!of!P360,000:! The&law&requires:&
It!was!stipulated!that!there!will!be!equal!distribution,! 1. there!must!be!a!just!cause;!and!
thus!Justin!shall!be!entitled!to!P120,000.! 2. it!must!be!by!a!vote!of!partners!having!controlling!
interest!
Partner’s!right!to!participate!in!the!management!of!the! "
business!of!the!partnership!! Obligations"of"Partners"
! Most!important:!sharing!of!losses!
PFQ:" Was&there&an&agreement&as&to&losses?&&&
W!and!X!are!industrial!partners;!Y!and!Z!are!capitalist! Do&all&partners&have&a&share&in&the&losses?&
partners! who! contributed! P50,000! and! P20,000,! If!yes,!then!it!is!a!valid!agreement!
respectively.! ! Thereafter,! in! a! unanimous! vote! of! the! &
partners,! W! and! X! were! appointed! as! managing! What&if&2&or&more&partners&are&excluded&in&the&losses?&
partners!without!any!specification!as!to!the!respective! If!who!was!excluded!was!a!capitalist*partner,!it!shall!
powers!and!duties.!!! be!absolutely!VOID.!
! !
A! was! appointed! as! secretary! by! W! and! X! but! such! PBQ:! ! If! it! was! an! industrial* partner! who! was!
appointment!was!opposed!by!Y!and!Z.!!! excluded,! it! will! be! a! valid! agreement! as! to! the!
! partners!but!void!as!to!3rd!persons!such!as!partnership!
On! the! other! hand,! B,! the! accountant,! whose! creditors.! ! Thus,! he! may! be! held! liable! by! the!
appointment! was! made! by! W! and! Z! but! was! opposed! partnership!creditors!but!he!may!seek!reimbursement!
by!X!and!Y.! from!the!other!partners!since!the!agreement!is!valid!as!
! to!them.!(Article"1816)!
Which&appointment&will&bind&the&partnership?& &
Article"1801"–"Solidary"Management" What&if&there&is&no&agreement&as&to&losses&or&if&is&void?&
The! law! provides! that! each! of! the! managing! partners! Determine! if! there! is! an! agreement! as! to! profits.! ! If!
may!bind!the!partnership!for!any!act!of!administration! there!is,!apply!the!same!in!the!losses.!
as! long! as! he! is! not! opposed! by! any! other! managing! !
partner.!!Thus,!the!appointment!of!A!is!binding.! Is! there! is! no! agreement! as! to! profits,! the! losses! shall!
! be!in!proportion!to!their!capital!contribution.!!Thus,!in!
As! to! the! appointment! of! B,! since! it! was! only! acted! this!scenario,!the!industrial!partner!shall!not!be!liable!
upon! by! one! managing! partner! and! opposed! by! since!he!does!not!have!capital!contribution.!
another! managing! partner,! it! shall! be! resolved! by! the! &
vote!of!all!the!managing!partners.!!! 2013"Bar"Question"(same"as"above)"
! In&2007,&how&much&is&the&share&of&0,&a&limited&partner,&in&
In!case!of!a!tie,!then!it!shall!be!resolved!by!the!vote!of! the&net&loss&of&P500,000?&(1%)!!
partners!having!controlling!interest.!!In!this!case,!Y!has! (A) P0!
controlling! interest! thus! the! appointment! of! B! cannot! (B) P1!00,000!
bind!the!partnership.! (C) P125,000!
" (D) P200,000!
Joint"Management" (E) None!of!the!above!
2! or! more! managing! partners,! none! of! the! partners! !
shall!act!without!the!consent!of!all.!!In!other!words,!for! SUGGESTED!ANSWER:!
an! act! to! be! binding,! all! the! managing! partners! shall! (D)"P200,000!!
agree.! A!limited!partner!shall!not!become!liable!a!s!a!general!
! partner!unless,!in!addition!to!the!exercise!of!his!rights!
Partners"as"Agents" and! powers! as! a! limited! partner,! he! takes! part! in! the!
All!partners!are!managing!partners.!Whatever!any!one! control! of! the! business! (Art" 1948).! In! the! absence! of!
of!them!may!do!alone!shall!bind!the!partnership!unless! stipulation! as! to! profits! and! losses,! the! share! of! each!
opposed!by!another!partner.!
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partner!in!the!losses!shall!be!proportionate!to!what!he! PFQ:"
may!have!contributed!(Art"1797).!! X,!Y!&!Z!are!in!a!partnership!business;!
" X!contributed!P10,000!
P11! Y!contributed!P5,000!
Dissolution" Z!contributed!his!services!only.!
Bar"Question" !
Will&the&death&of&a&partner&terminate&the&partnership?& After! payment! of! partnership! debts,! what! remains! in!
No,!but!it!may!dissolve!the!partnership.!!! the! partnership! assets! is! P6,000! only.! ! In! the! absence!
! of!terms!to!the!contrary,!the!share!of!Z!will!be!equal!to:!
Article"1829" a. that!of!X!
On& dissolution,& the& partnership& is& not& terminated,& but& b. that!of!Y!!
continues& until& the& winding& up& of& partnership& affairs& is& c. nothing"
completed.& !
! As!to!preference,!the!first!ones!to!be!paid!are!creditors!
Take! note,! termination! and! dissolution! are! two! who!are!not!partners.!!The!remaining!amount!shall!be!
different!terms!with!different!meanings.!!! returned! to! the! capitalist! partners! in! proportion! to!
! their! contribution.! ! Thus! the! industrial! partner! can!
Article"1828" only!have!a!share!in!the!assets!if!there!are!profits!after!
Dissolution&of&a&partnership&is&the&change&in&the&relation& the!capital!contributions!are!returned!to!the!capitalist!
of& the& partners& caused& by& any& partner& ceasing& to& be& partners.!
associated& n& the& carrying& on& as& distinguished& from& the& !
winding&up&of&the&business.& T!or!F:!!
& A! partner! cannot! demand! the! return! of! his! share! or!
If! the! partnership! involved! is! a! general! partnership,! contribution!during!the!existence!of!the!partnership.!
the!death!of!one!of!them!will!dissolve!the!partnership.!!! (premise:!share&or&contribution&in&which&the&ownership&
! has&passed)!
If!it!is!a!limited!partnership,!it!depends!if!the!one!who! !
died!is!a!general!or!a!limited!partner:! !
! !
1. If!a!general&partner!dies,!it!will!not!automatically& !
dissolve! the! partnership! because! it! may! be! !
subject!to!the!stipulation!of!the!partners!or!if!the! !
surviving! partners! unanimously! agreed! to! !
continue!with!the!business!of!the!partnership.! !
! !
2. On!the!other!hand,!if!it!is!the!limited&partner!who! !
dies,!the!partnership!will!not!be!dissolved!and!it! !
shall! not! affect! the! management! of! the! !
partnership!business.! !
! !
However,! if! the! right! of! the! limited! partner! to! !
have! himself! substituted! by! another! limited! !
partner! was! granted! to! the! executor! or! !
administrator,! the! latter! shall! appoint! a! !
substitute!limited!partner.! !
! !
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P11:14:35!! As! a! rule,! if! there! is! a! period! agreed! upon,! the! bailor!
CREDIT"TRANSACTIONS" must! respect! such! period! and! he! cannot! demand! the!
! return! of! the! thing! at! any! time.! ! However,! there! are!
Most! of! the! bar! questions! would! fall! on! pledge! and! exceptions:!
mortgage,!sometimes!loan,!rarely!deposit.! !
! a. if!the!use!of!the!bailee!is!merely!tolerated;!
What& are& the& credit& transactions& which& do& no& require& b. when! the! bailor! has! an! urgent! need! of! the!
delivery&for&the&perfection?& thing,! the! commodatum! is! merely! suspended!
1. guaranty! not!extinguished!!
2. suretyship! c. when!the!bailee!commits!any!act!of!ingratitude!
3. mortgage! !
! If& B& borrowed& a& van& of& A& and& during& the& period& of& this&
! contract,& B& raped& the& daughter& of& A& inside& the& van.&&
Not! all! credit! transactions! are! contracts.! ! Like! legal! Would& that& give& A& to& demand& the& return& of& the& thing&
pledge,!necessary!and!judicial!deposits! even&before&expiration&of&the&period?&
! It! depends! if! the! person! raped! is! under! the! parental!
Which&are&contracts?& authority!of!the!bailor.!
Principal" !
1. Loan! Expenses" incurred" by" the" bailee" in" relation" to" the"
2. Deposit! thing"borrowed"
Accessory/Security"Arrangements" Is&he&entitled&to&seek&reimbursement&for&such&expenses?&
1. Guaranty! 1. Use!or!Preservation!!
2. Suretyship! Ordinary!F!no!
3. Pledge! Extraordinary!F!yes!!
4. Mortgage! 2. Repair!–!yes!
5. Antichresis! 100%!if!not!in!use!
! 50%!if!being!used!
Loan" 3. Ornamentation!–!no!
Article"1933" !
By& the& contract& of& loan,& one& of& the& parties& delivers& to& 2013"Bar"Question"
another,&either:& Cruz!lent!Jose!his!car!until!Jose!finished!his!Bar!exams.!
1. something& not& consumable& so& that& the& latter& may& Soon! after! Cruz! delivered! the! car,! Jose! brought! it! to!
use& the& same& for& a& certain& time& and& return& it,& in& Mitsubishi! Cubao! for! maintenance! check! up! and!
which&case&it&is&called&commodatum;&or& incurred! costs! of! P8,000.! Seeing! the! car's! peeling! and!
2. &money& or& other& consumable& thing,& upon& the& faded! paint,! Jose! also! had! the! car! repainted! for!
condition& that& the& same& amount& of& the& same& kind& P10,000.! Answer! the! two! questions! below! based! on!
and&quality&shall&be&paid,&in&which&case&the&contract& these!common!facts.!
is&simply&called&a&loan&or&mutuum.& !
! 1) After! the! bar! exams,! Cruz! asked! for! the! return! of!
Is& it& possible& for& a& commodatum& to& be& valid& with& a& his! car.! Jose! said! he! would! return! it! as! soon! as!
consumable&thing&as&a&subject&matter?& Cruz!has!reimbursed!him!for!the!car!maintenance!
Yes,! as! long! as! the! purpose! of! the! parties! in! the! and! repainting! costs! of! P! 18,000.! Is& Jose's& refusal&
delivery! of! the! thing! is! not! for! consumption! such! as! justified?&(1%)&&
when!the!thing!is!used!merely!for!exhibit! !
! (A) No,!Jose's!refusal!is!not!justified.!In!this!kind!of!
Can&cash&be&a&subject&matter&of&commodatum?& contract,! Jose! is! obliged! to! pay! for! all! the!
Yes,!in!case!of!“showFmoney”! expenses!incurred!for!the!preservation!of!the!
! thing!loaned.!
Can& the& bailor& demand& for& the& return& of& the& thing& at& (B) Yes,!Jose's!refusal!is!justified.!He!is!obliged!to!
will?& pay! for! all! the! ordinary! and! extraordinary!
Not!always.!!If!he!has!the!right!to!demand!at!will,!it!is! expenses,! but! subject! to! reimbursement! from!
called! a! precarium! (special! kind! of! commodatum)! Cruz.!
when!there!was!no!period!agreed!upon.!
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(C) Yes,!Jose's!refusal!is!justified.!The!principle!of! !
unjust! enrichment! warrants! the! Republic!v.!Bagtas!!!!
reimbursement!of!Jose's!expenses.! "
(D) No," Jose's" refusal" is" not" justified." The" Mutuum&
expenses" he" incurred" are" useful" for" the" Nakar!case!
preservation"of"the"thing"loaned."It"is"Jose's" Example:!
obligation" to" shoulder" these" useful" If! it! was! incurred! in! 2011! –! apply! 12%! for! loans! and!
expenses."" forbearance!of!money!until!June!30,!2013.!!Thereafter,!
" apply!6%!per!annum!
In! commodatum,! the! bailee! is! obliged! to! pay! for! the! "
ordinary!expenses!for!the!use!and!preservation!of!the! Macalino!v.!BPI!
thing!loaned!(Art"1941,"Civil"Code).!! 3%! per! month! is! unconscionable! thus! the! stipulation!
! is!void!
The! bailee,! Jose,! has! no! right! of! retention! on! the! !
ground! that! the! bailor! owes! him! something,! even! if! it! 1:05:40!
may!be!by!reason!of!expenses.!He!can!only!retain!it!if! Sigaan!v.!Villanueva!
he!suffers!damages!by!reason!of!a!flaw!or!defect!in!the! Is&the&payment&of&interest&valid?&
thing! loaned! of! which! the! bailor! knows! (Art" 1951," No,!for!the!creditor!to!be!entitled!to!interest,!it!has!to!
Civil"Code).! be!expressly!stipulated!in!writing.!!!
2) During!the!bar!exam!month,!Jose!lent!the!car!to!his! !
girlfriend,!Jolie,!who!parked!the!car!at!the!Mall!of! Is&solutio&indebiti&applicable?&
Asia's! open! parking! lot,! with! the! ignition! key! Yes!
inside!the!car.!Car!thieves!broke!into!and!took!the! "
car.!!Is&Jose&liable&to&Cruz&for&the&loss&of&the&car&due& Deposit"
to&Jolie's&negligence?&(1%)& Article"1962"
! A& deposit& is& constituted& from& the& moment& a& person&
(A) No,! Jose! is! not! liable! to! Cruz! as! the! loss! was! receives& a& thing& belonging& to& another,& with& the&
not!due!to!his!fault!or!negligence.! obligation&of&safely&keeping&it&and&of&returning&the&same.&
(B) No,!Jose!is!not!liable!to!Cruz.!In!the!absence!of! &
any! prohibition,! Jose! could! lend! the! car! to! If& the& safekeeping& of& the& thing& delivered& is& not& the&
Jolie.!Since!the!loss!was!due!to!force!majeure,! principal&purpose&of&the&contract,&there&is&no&deposit&but&
neither!Jose!nor!Jolie!is!liable.!! some&other&contract.&
(C) Yes," Jose" is" liable" to" Cruz." Since" Jose" lent" !
the"car"to"Jolie"without"Cruz's"consent,"Jose" 2!kinds:!!
must"bear"the"consequent"loss"of"the"car."" 1. Judicial!
(D) Yes,! Jose! is! liable! to! Cruz.! The! contract! 2. Extrajudicial!
between! them! is! personal! in! nature.! Jose! can! a. Necessary!!
neither! lend! nor! lease! the! car! to! a! third! b. Voluntary–agreement!of!the!parties!
person.!! !
! Article"1963"
The! bailee! is! liable! for! the! loss! of! the! thing,! even! if! it! An&agreement&to&constitute&a&deposit&is&binding,&but&the&
should! be! through! a! fortuitous! event! if! he! lends! or! deposit& itself& is& not& perfected& until& the& delivery& of& the&
leases!the!thing!to!a!third!person,!who!is!not!a!member! thing&
of!his!household!(Art"1942,"Civil"Code).!! !
" Nature:!Real!contract!
P11:48:22! The!thing!is!nonFfungible,!it!has!to!be!returned!
PFQ:" !
A!borrowed!B’s!truck.!During!a!fire!which!broke!out!in! Irregular"deposit!!
A’s!garage,!he!had!time!to!save!only!one!vehicle!and!he! Fdepositary! has! the! right! to! use! because! he! was!
saved!his!car!instead!of!the!truck.!!Is&A&liable&for&the&loss& permitted! and! the! use! is! necessary! for! the!
of&B’s&truck?& preservation!
Article"1942" !
The! premise! of! the! law! is! that! the! bailee! had&a&choice& !
on!which!thing!to!save.!! !
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Are& bank& savings& and& time& deposits& considered& as& Guaranty"&"Suretyship"
deposits?& "
No,!they!shall!be!governed!by!the!law!on!mutuum! Article"2047"
! By! guaranty! a! person,! called! the! guarantor,! binds!
Article"1998" himself! to! the! creditor! to! fulfill! the! obligation! of! the!
The&deposit&of&effects&made&by&travellers&in&hotels&or&inns& principal!debtor!in!case!the!latter!should!fail!to!do!so.!
shall& also& be& regarded& as& necessary.& & The& keepers& of& !
hotel& or& inns& shall& be& responsible& for& them& as& If! a! person! binds! himself! solidarily! with! the! principal!
depositaries,&provided&that&notice&was&given&to&them,&or& debtor,!the!provisions!of!Section!4,!Chapter!3,!Title!I!of!
to& their& employees,& of& the& effects& brought& by& the& guests& this! Book! shall! be! observed! (solidary! oblgiations).! ! In!
and& that,& on& the& part& of& the& latter,& they& take& the& such!case!the!contract!is!called!a!suretyship.&
precautions& which& said& hotel)keepers& or& their& !
substitutes&advised&relative&to&the&care&and&vigilance&of& Is&the&principal&debtor&a&necessary&party?&&
their&effects.& No,!the!contract!of!guaranty!or!suretyship!may!still!be!
! valid!even!without!his!knowledge!or!against!his!will!
Bar"Question" !
Mr.! Jeffrey! Sy! checkedFin! to! City! Garden! Hotel! If&the&guarantor&bound&himself&solidary&with&the&debtor,&
managed!by!Durban!Apartments!around!midnight!and! does&he&become&a&solidary&co)debtor?&
gave!his!car!keys!to!one!of!the!hotel!employees.!!When! No!
he! woke! up,! he! was! told! that! his! car! was! carnapped.!! !
With! that,! he! filed! a! claim! against! his! insurance! ! Surety" Solidary""
company! and! the! latter! filed! a! case! against! Durban! coDdebtor"
Apartments.!Is&Durban&Apartments&is&liable?& ! ! !
! Nature!of! Accessory,!in!case! Direct!and!primary;!
Yes,! because! there! was! negligence! on! the! part! of! liability! of!default,!he! he!has!a!share!in!
Durban.!!In!this!case,!there!was!a!deposit!constituted.!! ! doesn’t!have!a! the!obligation!
The! depositary! should! have! observed! the! diligence! share!in!the!
required! for! the! safekeeping! of! the! thing.! ! The! hotel! principal!
employee! parked! the! car! at! the! same! area! where! obligation!
another!car!was!recently!carnapped!as!well.! !
" ! ! !
PBQ:" ! As!a!rule,!the! There!is!no!
Makati!Shangrila!v.!Harper! ! surety!or! subrogation,!his!
Mr.! Harper! was! found! dead! inside! a! room! in! Makati! ! guarantor!will!be! only!remedy!is!to!
Shangrila.!!Based!on!the!CCTV,!a!lady!entered!his!room! Effect!of! subrogated!in!the! seek!
around! 1am! and! at! around! 4am! a! man! entered! the! Payment! rights!of!the! reimbursement!
room!as!well.!!At!around!5am,!the!man!and!woman!left! ! creditor!because! from!his!other!coF
the!room.!!Is&the&hotel&liable&for&the&death&of&their&guest?& he!has!an!interest! debtors!in!
! in!the!fulfillment! proportion!to!their!
The!SC!used!Article!1998!by!analogy.!!If!in!the!deposit! of!the!obligation! share!in!the!
of! effects,! the! depositary! is! expected! to! exercise! the! ! obligation!
due!diligence!required,!more!so!in!persons.!!! ! Between!the! Between!the!
! Agreement! principal!debtor! creditor!and!the!
VIP:!Article"1979" for!the! and!the!creditor! solidary!coFdebtor!
If& the& thing& deposited& was& lost& or& destroyed& due& to& a& extension! without!the! without!the!consent!
fortuitous&event?&& of!the! consent!of!the! of!the!other!
Yes! period!for! surety:! solidary!debtors:!
! the! ! !
! fulfillment! The!contract!of! It!will!not!
! of!the! surety!will!be! extinguish!the!
! obligation! extinguished! obligation!of!the!
! ! other!solidary!coF
! debtors!
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If! there! are! 2! or! more! guarantors! in! one! obligation,! No,! Basilio! cannot! compel! Cacho! to! pay! because!
each!of!them!shall!be!called!coDguarantors." Basilio! has! not! exhausted! the! available! remedies!
! against!Amador.!The!guarantor!cannot!be!compelled!to!
P11:1:30:45! pay!the!creditor!unless!the!latter!has!exhausted!all!the!
Bar"Question" property!of!the!debtor!and!has!resorted!to!all!the!legal!
X! entered! into! a! guarantee! without! the! knowledge! of! remedies!against!the!debtor!(Art."2058,!Civil!Code)!!
A,!the!principal!debtor.!!The!obligation!of!A!in!favor!of! !
B!was!also!secured!by!a!real!estate!mortgage!executed! If& Amador& sells& his& residential& house& and& lot& to& Diego,&
by!Y.!Upon!default!of!A,!X!paid!B.!A!failed!to!reimburse! can&Basilio&foreclose&the&real&estate&mortgage?&(1%)&
X! despite! demand.! ! If! X! files! an! application! for! !
foreclosure,!will&it&prosper?! Suggested&Answer:&
No,!because!the!contract!of!guaranty!was!entered!into! Yes,!Basilio!can!foreclose!the!real!estate!mortgage.!It!is!
without! the! knowledge! of! the! principal! debtor,! thus,! binding! upon! Diego! as! the! mortgage! is! embodied! in! a!
despite!payment!the!guarantor!will!not!be!subrogated! public! instrument.!Since! the! mortgage! is! in! a! public!
in!the!rights!of!the!creditor.! instrument,!there!is!constructive!notice!to!Diego,!who!
! is!the!buyer!if!the!mortgaged!property.!!
If& the& necessary& parties& are& the& guarantor& and& the& !
creditor,&who&is&the&subBguarantor?& Alternative&Answer:&
He!is!the!guarantor!of!the!guarantor! No,! Basilio! cannot! foreclose! the! real! estate! mortgage.!
! The! sale! confers! ownership! on! the! buyer,! Diego,! who!
Rights"and"Obligations" must! therefore! consent.! The! mortgage! is! not!
SubFguarantors! registered,! thus,! cannot! be! binding! against! third!
For!a!guarantor!to!be!held!liable,!the!law!requires!that! persons!(Art."2125,!Civil!Code)!!
the!creditor!exhaust!all!the!properties!of!the!principal! !
debtor!first.!!! Benefit!of!Division!
! A!borrowed!P100,000!from!B.!!A’s!guarantors!are!V,!W,!
Thus,! the! guarantor! has! the! benefit! or! right! of! X,!Y!and!Z.!!Under!the!benefit!of!division,!how&much&can&
excussion!or!exhaustion,!except:! B&validly&hold&X&liable?&
a. If!the!guarantor!renounces!such!right;! P20,000! because! under! the! benefit! of! division,! each!
b. If!the!debtor!is!insolvent;! guarantor! can! only! be! held! liable! as! to! his! share! (just!
c. If!the!guarantor!binds!himself!solidarily! like! joint! obligation)! without! prejudice! to! the!
! guarantors!binding!themselves!solidarily!&
Does& the& suretyor& sub)surety& & have& the& benefit& of& !
excussion?& When&would&the&guarantor&be&held&liable?&
No! because! he! binds! himself! solidarily! with! the! Fwhen!the!debtor!cannot"or"is"unable!to!pay!
principal!debtor! The! guarantor! is! the! insurer! of! the! solvency! of! the!
! debtor!
How& many& times& can& the& sub)guarantor& invoke& the& !
benefit&of&excussion?& When&would&the&surety&be&held&liable?&
Twice,!first!the!principal!debtor,!then!the!guarantor! Fwhen!the!debtor!does"not!pay!
! The!surety!is!the!insurer!of!the!debt!itself!
Bar"Question" !
Amador! obtained! a! loan! of! P300,000! from! Basilio! P11:1:37:30!
payable! on! March! 25,! 2012.! As! security! for! the! Antichresis"
payment! of! his! loan,! Amador! constituted! a! mortgage! Distinct! feature:! in! this! security! arrangement,! the!
on!his!residential!house!and!lot!in!Basilio's!favor.!! entire!obligation!may!actually!be!extinguished!because!
! the! creditor! is! required! to! apply! the! fruits! to! the!
Cacho,! a! good! friend! of! Amador,! guaranteed! and! interest!if!owing!and!in!case!of!excess,!he!shall!apply!it!
obligated!himself!to!pay!Basilio,!in!case!Amador!fails!to! to!the!principal.!
!
pay!his!loan!at!maturity.!!
! Pledge"
If& Amador& fails& to& pay& Basilio& his& loan& on& March& 25,& Dthe!only!real!contract!which!is!an!accessory!contract!
2012,&can&Basilio&compel&Cacho&to&pay?&(1%)&& !
! !
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Bar"Question" had!it!notarized!providing!that!the!ships!will!be!under!
In!the!province,!the!farmers!borrowed!money!from!the! the! control! and! supervision! of! PNB! even! if! the! ships!
local! merchant.! ! To! guarantee! payment,! they! left! the! remain! to! be! manned! by! the! crew! of! the! pledgorF
Torrens!title!of!their!land!with!the!merchant!for!him!to! Yuliongsu.!!!
hold! until! they! pay! the! loan.! ! Is& there& an& Antichresis,& !
Pledge,&Mortgage?& The! SC! held! that! there! was! a! perfected! contract! of!
FMortgage! pledge! despite! the! fact! that! there! was! no! actual!
! delivery.!
Marcos!v.!Vda.!de!Bautista! "
For! a! pledge! or! mortgage! to! be! valid,! the! pledgor! or! P11:1:45:45!
mortgagor! must! be! the! absolute! owner! at! the! time! of! Real"Estate"Mortgage"
the!constitution!of!the!pledge!or!mortgage! Fmust! be! in! a! public! instrument! in! order! for! a!
! foreclosure! to! prosper,! if! it! is! in! a! private! instrument!
Bar"Question" the! remedy! is! Article! 1357! to! have! it! in! the! form!
In! a! contract! of! pledge! involving! a! cow.! ! After! the! required!by!law!
perfection! of! the! contract,! while! the! cow! was! in! the! "
possession!of!the!pledgee,!the!cow!gave!birth.!!! Chattel"Mortgage"
! Is&the&affidavit&of&good&faith&necessary&for&the&validity&of&
Who&owns&the&offspring?& the&mortgage?&
The!pledgor!because!he!is!the!owner!of!the!cow! No," it! is! only! necessary! for! the! contract! to! bind! 3rd!
! persons!
Being& the& owner& can& the& pledgor& validly& demand& that& !
the&offspring&be&delivered&to&him?& Ordinarily,! it! should! only! be! constituted! over!
As! a! rule,! No.! The! offspring! of! the! cow! is! covered! by! movables.! ! However,! it! includes! growing! crops! and!
the!pledge!thus!the!pledgee!has!the!right!to!retain!the! large! cattle! (because! the! Chattel! Mortgage! law! treats!
offspring! together! with! the! mother! cow.! ! If! the! them!as!personalty)!
principal! debtor! defaults,! the! pledgee! will! have! the! !
right! to! sell! the! cow! and! the! offspring! in! a! public! While! the! law! requires! a! chattel! mortgage! to! have! a!
auction!! movable! subject! matter,! if! the! subject! matter! is! an!
! immovable,! the! mortgagor! will! not! be! allowed! to!
However,!when!there!is!a!stipulation!that!the!offspring! question! the! validity! of! the! mortgage! as! between! him!
is! not! covered! by! the! pledge,! then! he! may! validly! and!the!mortgagee.!
demand!for!the!delivery.! !
! PBQ:!Indivisibility"Principle!
Banco!Filipino!v.!Petersen! If!the!debt!is!in!the!amount!of!P100,000!secured!by!a!
The! object! of! the! contract! is! the! delivery! of! mortgage! or! pledge! and! the! debtor! has! already! paid!
voluminous!goods!found!in!a!warehouse.!!The!pledgor! for! P95,000,! can& he& validly& demand& for& the& release& of&
delivered! the! key! to! the! warehouse! to! the! pledgee.!! the&property&pledged&or&cancellation&of&the&mortgage?&
Was&there&a&perfected&contract&of&pledge?!Yes! No,! until! the! entire! obligation! is! extinguished,! the!
" pledge!or!mortgage!will!continue!to!have!full!force!and!
What&is&the&kind&of&delivery&necessary&for&the&perfection& effect!under!the!indivisibility!principle.!
of&the&contract&of&pledge?& !
As! a! rule,! it! must! be! actual! delivery,! except! when! it! Take! note,! it! is! the! contract! of! pledge! and! mortgage!
would! be! an! unreasonable! requirement! for! the! which! are! indivisible! and! it! doesn’t! matter! if! the!
delivery! of! the! thing! or! the! goods! to! the! creditorF properties! pledged! or! mortgage! are! divisible! or! not.!
pledgee,!constructive!delivery!may!suffice! However,! this! is! without! prejudice! to! any! stipulation!
" between!the!parties.!
Take!note,!if!the!contract!of!pledge!is!not!perfected,!the! !
pledgee!would!not!have!the!right!to!sell.! Dayrit!v!CA!
! Dayrit! mortgaged! his! land! to! secure! the! entire!
Yuliongsiu!v.!PNB! obligation! of! him! and! 3! other! debtors.! ! When! Dayrit!
The! object! of! the! contract! of! pledge! is! the! delivery! of! paid! his! part! of! the! obligation,! he! demanded! for!
three! ships.! ! The! parties! executed! an! instrument! and! cancellation!of!mortgage,!the!creditor!refused!because!
the!entire!obligation!is!not!yet!fulfilled.!
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P11:2:05:58! What&if&the&proceeds&amounted&to&P150,000?&&To&whom&
Pactum"Commissorium" shall&the&excess&be&given?&
X!borrowed!money!from!Y!and!gave!a!parcel!a!land!as! To! the! pledgee! unless! there! is! a! stipulation! that! any!
security!by!way!of!mortgage.!!It!was!expressly!agreed! excess!would!go!to!the!pledgor!
that! upon! nonFpayment! of! the! debt! on! time! by! X,! the! !
mortgaged! land! would! already! belong! to! Y.& & If& X& What&if&it&was&a&mortgage?&&&
defaulted&in&paying,&will&Y&now&become&the&owner&of&the& 1. To!the!deficiency,!A!will!have!the!right!to!recover!
said&land?& in!case!the!proceeds!are!less!than!the!debt;!
No,! the! stipulation! as! to! automatic! appropriation! is! 2. As!to!the!excess,!it!shall!be!given!to!B!
void! being! pactum! commissorium.! The! remedy! is! to! !
foreclose! the! mortgage! (if! it! is! a! pledge,! to! have! the! Equity!of!Redemption!
thing!sold!by!a!notary!public!in!a!public!auction)! Fcan!only!be!exercised!before!the!sale!
! !
What&if&in&the&real&estate&mortgage,&upon&default&of&the& Right!of!Redemption!
principal& debtor,& the& land& is& deemed& sold& to& the& Fcan!only!be!invoked!after&the!sale!
mortgagee.& & Does& that& constitute& pactum& !
commissorium?& *Ordinarily,!if!there!is!already!an!equity!of!redemption!
No,!because!upon!default,!ownership!does!not!pass!to! in!judicial!foreclosure,!there!will!no!longer!be!a!right!of!
the! creditor.! ! The! creditor! will! only! have! the! right! to! redemption! except! in! case! of! bank! and! financial!
compel!the!mortgagor!to!execute!the!deed!of!sale!and! institutions.!
until! there! is! delivery,! there! is! no! transfer! the! !
ownership.! Period:! 1! year! from! the! date! of! registration! of! the!
! certificate!of!sale!
If&there&is&a&deficiency,&should&the&creditor&be&given&the& !
right&to&recover?&& (Review!Brondial!Notes!")!
Yes.!However,!in!pledge!when!there!is!a!deficiency,!the! !
pledgee! has! no! right! to! recover! the! deficiency! even! if! !
there!is!a!stipulation!to!that!effect.! !
! !
If&there&is&an&excess,&to&whom&shall&it&be&given?& !
To!the!owner/mortgagor!of!the!property! !
! !
In!pledge,!the!excess!will!not!go!to!the!pledgor,!but!to! !
the!pledgee!except!when!there!is!a!stipulation!that!in! !
case!of!excess!it!will!go!to!the!pledgor.! !
! !
REM" covered" by" Act." 3135" (extrajudicial" !
foreclosure)" !
The!SC!held!that!even!if!the!law!is!silent!as!to!whether! !
the!creditor!has!the!right!to!recover,!he!has!the!right!to! !
recover!the!deficiency.! !
! !
P11:2:14:55!
!
A! lent! B! P100,000! and! as! security! for! the! payment! of!
!
said!amount,!B!delivered!to!A!2!rings!in!pledge.!!When!
!
B! failed! to! pay,! A! foreclosed! and! had! the! rings! sold!
!
through! auction.! ! The! proceeds! amounted! only! to!
!
P70,000.! May& A& demand& for& the& payment& of& the&
!
deficiency&of&P30,000?!
!
No,!because!it!is!a!contract!of!pledge!and!the!creditor!
!
is!not!entitled!to!such!deficiency.!
!
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TORTS"" !
" &
Article"2176" If&a&criminal&case&is&filed,&may&a&civil&action&filed&by&the&
Whoever&by&act&or&omission&causes&damage&to&another,& injured&party&prosper?&&
there&being&fault&or&negligence,&is&obliged&to&pay&for&the& The! civil! action! may! proceed! independently! of! the!
damage& done.& Such& fault& or& negligence,& if& there& is& no& criminal! action.! ! The! fact! that! a! criminal! action! is!
pre)existing&contractual&relation&between&the&parties,&is& pending! will! not! bar! the! filing! nor! will! it! suspend! the!
called&a&quasi)delict&and&is&governed&by&the&provisions&of& civil!action!under!quasiFdelict.!!They!are!separate!and!
this&Chapter.& distinct!proceedings.!!
& !
Even! if! the! act! is! punished! by! law,! it! can! also! be! the! What&if&in&the&criminal&case,&the&accused&was&acquitted.&&
basis! of! a! claim! under! a! quasiFdelict! but! Article! 2177! Will&the&acquittal&of&the&accused&result&in&the&automatic&
provides! a! limitation! that! the! injured! cannot! recover! dismissal&of&the&civil&action&based&on&a&quasi)delict&(for&
twice:! the&same&act)?&No.!(Only!preponderance!of!evidence!is!
! required!in!quasiFdelicts)!
Article"2176" !
Responsibility& for& fault& or& negligence& under& the& Essential"elements"
preceding& article& is& entirely& separate& and& distinct& from& What&are&requisites&in&order&that&defendant&can&be&held&
the& civil& liability& arising& from& negligence& under& the& liable&for&damages&in&a&quasi)delict&case?&
Penal& Code.& But& the& plaintiff& cannot& recover& damages& !
twice&for&the&same&act&or&omission&of&the&defendant& 1. Act!or!omission!
! 2. Damage!or!injury!is!caused!to!another!
Illustration:! 3. Fault!or!negligence!is!present!
The! injured! party! filed! a! criminal! complaint! and! was! 4. Causal!connection!between!damage!done!and!
awarded!by!the!court!P300,000.!!Thereafter,!he!filed!a! act/omission!
civil! action! based! on! quasiFdelict.! ! The! court! awarded! !
him!with!the!amount!of!P500,000.!!How&much&can&the& True" or" False:!If!before!the!act!was!committed,!there!
injured&recover?& was!already!a!preFexisting!contractual!relation,!a!claim!
! under!quasi!delict!cannot!prosper.!False."
He! may! only! recover! the! excess! which! is! P200,000.!! !
Article! 2177,! the! rule! on! double! recovery,! is! a! partial& The!very!act!which!breaches!the!contract!may!by!itself!
defense.! be! a! tortious! act;! thus,! even! if! there! is! preFexisitng!
& contractual! relation,! it! may! not! bar! an! action! under!
What&if&the&first&award&was&for&P500,000&and&the&second& quasiFdelict.!
was&P300,000?& !
! Illustration:!
In!this!case,!Article!2177!will!be!a!total!defense!and!the! You! already! have! a! confirmed! airline! ticket! but! you!
injured!can!no!longer!recover!anything.! were!told!by!the!ticketing!officer!at!the!airport!that!the!
! plane!is!full.!Is&there&a&breach&of&contract?!Yes.!But!the!
Briefly,!quasiFdelict!is!fault!or!negligence.!!Fault!is!not! fact!of!saying!that!the!plane!is!full!is!not!considered!a!
the!same!as!negligence.!!Fault!may!be!intentional.! tortious!act.!!
! !
Recall:!Cangco!v.!MRR! Air!France!v.!Carrascoso!
! The!manner!by!which!the!airline!asked!him!to!transfer!
Nature"of"Liability"of"the"Employer" from!business!class!to!economy!is!a!tortious!act.!!
Is& it& a& direct& and& primarily& liability& or& merely& a& !
subsidiarily&liability?& Singson!v.!BPI"
! Singson! was! one! of! the! defendants! in! a! civil! case! and!
1. Delict!–!subsidiary! the!trial!court!decided!in!favor!of!the!plaintiff.!!Singson!
2. QuasiDdelict"&"contract!–!direct! appealed! (3! other! defendants! did! not! appeal).! ! The!
The!employee!need!not!be!insolvent!in!order!for! plaintiff!filed!for!a!motion!for!execution!only!as!to!the!
the!employer!to!be!liable.! other! defendants,! which! the! court! granted! and!
! ordered! for! garnishment.! ! When! BPI! received! the!

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order! or! garnishment,! it! freezed! the! account! of! Causal"connection"between"act"or"omission""
Singson!causing!some!checks!issued!to!his!suppliers!to! Article"2179"
bounce!thus!cutting!the!supplies!to!his!business.!!The! "
bank! was! held! negligent! because! the! order! of! Doctrine"of"comparative"negligence"
garnishment! clearly! stated! except& Singson.& The! bank! Fif! the! negligence! of! the! plaintiff! was! the! direct! and!
was!held!liable!under!quasiFdelict!despite!the!fact!that! proximate! cause! of! the! injury! sustained! by! him,! he!
there!was!a!preFexisting!contractual!relationship.! cannot!recover!and!the!action!will!not!prosper.!
! !
Why& would& the& injured& party& file& an& action& under& a& Doctrine"of"contributory"negligence"
quasi)delict&when&he&can&file&an&action&under&a&contract& Fif! the! negligence! of! the! defendant! was! the! direct! and!
for&breach?& proximate! cause! of! the! injury! sustained! by! the!
& plaintiff,! even! if! the! plaintiff! was! negligent,! the! action!
Because!the!biggest!amount!that!will!be!awarded!in!an! can!prosper,!he!can!recover!from!the!defendant!whose!
action!for!damages!is!moral&damages.&&& liability! shall! me! mitigated! to! due! the! contributory!
! negligence!of!the!plaintiff!
A!claim!for!moral!damages!under!contract!is!very!hard! !
to!prove!because!the!defendant!must!have!acted!in!bad! There"is"fault"or"negligence"
faith! or! in! wanton! disregard! of! his! obligations! under! When&would&an&act&be&considered&as&a&negligent&act?&
the! contract.! ! Whereas! in! quasiFdelict,! you! are! almost! There! is! negligence! when! there! is! an! omission! of! the!
always!entitled!to!moral!damages.! diligence! required! which! corresponds! to! the!
! circumstances!as!to!the!person,!time!and!place!
Dulay!vs.!CA! !
Atty.! Dulay! had! an! altercation! with! a! security! guard! Degree& of& diligence& required& is& vital& in& determining& if&
causing!the!death!of!Dulay.!!! there&is&negligence&
! Philippine!Bank!of!Commerce!v.!CA!
The! defense! of! the! company! was! that! the! act! of! the! Plaintiff! company! asked! one! of! the! secretaries! to!
guard! was! not! a! negligent! act! thus! they! cannot! be! deposit!a!sum!of!money!to!the!account!of!the!company!
liable! under! quasiFdelict.! ! MTD! was! granted! thus! the! in! PBCom.! ! The! secretary! instead! deposited! the! said!
Petition.! amount!in!her!husband’s!account.!
! !
The! SC! ruled! that! for! an! action! under! quasiFdelict! to! The! claim! of! the! company! against! the! bank! was! that!
prosper,! the! act! need&not&be! a! negligent! act.! ! It! can! be! the! direct! and! proximate! caue! of! the! injury! sustained!
an! intentional,! malicious,! wrongful! act! or! an! act! was! due! to! the! negligence! of! the! bank! for! accepting!
punished!by!law.! deposit!slips!which!were!not!completely!filled!out.!
! !
There"is"damage"or"injury" As! a! defense,! the! bank! invoked! the! “doctrine* of* last*
Can&there&be&damage&without&injury?& clear* chance”" because! there! were! monthly! financial!
Yes.!Damage!is!just!the!hurt,!the!harm!or!loss.!!Injury! statements! provided! to! the! account! holders;! thus,! the!
requires!wrongful!acts.!!But!if!there!is!already!fault!or! company! should! have! noticed! that! their! account! was!
negligence,!damages!is!the!same!is!injury.! empty.!!!
! !
" The! SC! ruled! that! the! negligence! of! the! bank! officers!
" was! the! direct! and! proximate! cause.! ! Banks! are!
" supposed!to!exercise!the!highest!degree!of!diligence.!
" !
" As!a!rule,!it!is!the!burden!of!the!plaintiff!to!prove!that!
" the!act!of!the!defendant!was!a!negligent!act.!
" !
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Ong!v.!Metro!Water!District! Conclusive"Presumptions"
One! of! the! children! of! Spouses! Ong! drowned! in! a! Under!circumstances,!the!law!would!raise!a!conclusive!
swimming! pool! managed! by! Metropolitan! Water! presumption!that!the!act!is!a!negligent!act:!
District.! ! Spouses! Ong! sued! but! the! SC! dismissed! !
because! the! spouses! failed! to! prove! that! there! was! 1. Article" 2193:!The&head&of&a&family&that&lives&in&a&
negligence!on!the!part!of!the!defendant.!!In!this!case,!it! building& or& a& part& thereof,& is& responsible& for&
was! MWD! itself,! which! proved! their! diligence! before,! damages&caused&by&things&thrown&or&falling&from&
during!and!after!the!incident.! the&same.&
" &
Disputable"Presumptions" 2. Article" 2187:! Manufacturers& and& processors& of&
" foodstuffs,&drinks,&toilet&articles&and&similar&goods&
Article" 2183.!The!possessor!of!an!animal!or!whoever! shall&be&liable&for&death&or&injuries&caused&by&any&
may! make! use! of! the! same! is! responsible! for! the! noxious&or&harmful&substances&used,&although&no&
damage!which!it!may!cause,!although!it!may!escape!or! contractual&relation&exists&between&them&and&the&
be!lost.!This!responsibility!shall!cease!only!in!case!the! consumers.&
damage! should! come! from! force! majeure! or! from! the! !
fault!of!the!person!who!has!suffered!damage.!! When& an& employee& is& negligent?& Does& that& mean& that&
" the&employer&is&negligent?&
Article" 2184.!In!motor!vehicle!mishaps,!the!owner!is! Not! necessarily.! ! Philippine! law! does! not! adopt! the!
solidarily!liable!with!his!driver,!if!the!former,!who!was! principle!of!“respondeat!superior”.!!In!this!jurisdiction,!
in! the! vehicle,! could! have,! by! the! use! of! the! due! “pater!familias”!prevail.!!!
diligence,! prevented! the! misfortune.! It! is! disputably& !
presumed! that! a! driver! was! negligent,! if! he! had! been! It! would! merely! raise! a! disputable! presumption! and!
found! guilty! of! reckless! driving! or! violating! traffic! the! employer! can! raise! as! a! defense! that! he! exercised!
regulations! at! least! twice! within! the! next! preceding! the!diligence!required!in!the:!
two!months.! a. selection!and!
! b. supervision!of!employees!
If! the! owner! was! not! in! the! motor! vehicle,! the! !
provisions!of!article!2180!are!applicable.!! Illustration:!
! Selection!
Article" 2185.!Unless!there!is!proof!to!the!contrary,!it! It!is!not!sufficient!for!the!employer!to!merely!demand!
is!presumed!that!a!person!driving!a!motor!vehicle!has! for! the! presentation! of! a! driver’s! license.! ! ! The!
been! negligent! if! at! the! time! of! the! mishap,! he! was! employer!must!investigate!as!to!the!driving!history!of!
violating!any!traffic!regulation.! the!applicant!driver.!
" !
Article" 2188.! There! is! prima! facie! presumption! of! Supervision!!
negligence!on!the!part!of!the!defendant!if!the!death!or! 1. This!may!only!be!raised!as!a!defense!if!there!are!
injury! results! from! his! possession! of! dangerous! rules!promulgated;!
weapons! or! substances,! such! as! firearms! and! poison,! 2. There!should!be!monitoring!if!the!rules!are!being!
except! when! the! possession! or! use! thereof! is! followed;!and!
indispensable!in!his!occupation!or!business.! 3. There!shall!be!penalties!imposed!on!violations!of!
! the!rules!
Illustration:! !
One! of! the! vehicles! attempted! to! overtake! another! !
vehicle.! ! The! driver! who! tried! to! overtake! was! held! !
liable!because!that!place!where!the!incident!happened! !
had!2!yellow!lines,!which!means!“no!overtaking”.!!! !
! !
! !
! !
! !
! !

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Vicarious"Liability" !
Article"2180" Libi!v.!IAC!!“Romeo&and&Juliet”&
The& obligation& imposed& by& article& 2176& is& demandable& A!female!teenager!broke!up!with!her!boyfriend!but!the!
not& only& for& one's& own& acts& or& omissions,& but& also& for& latter!cannot!accept!it!so!he!stalked!her.!!One!day,!they!
those&of&persons&for&whom&one&is&responsible.& found! both! teenagers! dead! through! a! gunshot.! ! The!
& parents!of!the!teenager!was!held!liable!because!it!was!
The& father& and,& in& case& of& his& death& or& incapacity,& the& the!father’s!gun!that!was!used!in!the!killing/suicide.!
mother,& are& responsible& for& the& damages& caused& by& the& !
minor&children&who&live&in&their&company.& Owners"of"establishments"
& PBQ:!Article!2184!
Guardians&are&liable&for&damages&caused&by&the&minors& If!the!owner!of!the!vehicle!was!inside!the!vehicle!at!the!
or&incapacitated&persons&who&are&under&their&authority& time!of!the!mishap!and!the!driver!caused!injury!due!to!
and&live&in&their&company.& his!negligence.!!Does!that!mean!that!the!owner!shall!be!
& automatically!held!solidarily!liable!with!his!driver?!
The& owners& and& managers& of& an& establishment& or& !
enterprise& are& likewise& responsible& for& damages& caused& No,! the! owner! shall! be! held! solidarily! liable! with! the!
by& their& employees& in& the& service& of& the& branches& in& driver! only! if! he! failed! to! exercise! the! diligence!
which& the& latter& are& employed& or& on& the& occasion& of& required! under! the! circumstances! to! prevent! the!
their&functions.& mishap!if!he!had!the!opportunity!to!do!so.!
& !
Employers& shall& be& liable& for& the& damages& caused& by& Managers"of"establishments"
their&employees&and&household&helpers&acting&within&the& Philippine!Rabbit!v.!Philippine!American!Forwarders!
scope& of& their& assigned& tasks,& even& though& the& former& As! a! result! of! the! negligence! of! the! driver! of! PAF,!
are&not&engaged&in&any&business&or&industry.& damage!was!caused!to!PR.!
& !
The& State& is& responsible& in& like& manner& when& it& acts& PR!impleaded!as!defendant!PAF,!the!driver!and!also!a!
through& a& special& agent;& but& not& when& the& damage& has& passenger,!Mr.!Balingit,!a!salary!manager.!!!
been& caused& by& the& official& to& whom& the& task& done& !
properly& pertains,& in& which& case& what& is& provided& in& Mr.!Balingit!filed!a!MTD.!!Trial!court!granted!thus,!the!
article&2176&shall&be&applicable.& Petition.! ! ! The! SC! sustained! the! decision! of! the! trial!
& court.! ! The! word! manager! does! not! include! a! salary!
Lastly,& teachers& or& heads& of& establishments& of& arts& and& manager.!!
trades&shall&be&liable&for&damages&caused&by&their&pupils& !
and& students& or& apprentices,& so& long& as& they& remain& in& Employer"
their&custody.& PBQ:!When&can&an&employer&be&held&vicariously&liable?&
& Martin!v.!CA!
The& responsibility& treated& of& in& this& article& shall& cease& MERALCO! was! the! complainant! who! filed! a! case!
when& the& persons& herein& mentioned& prove& that& they& against!Martin,!the!employer!of!the!driver,!for!causing!
observed&all&the&diligence&of&a&good&father&of&a&family&to& damage!to!the!post!of!MERALCO.!!!
prevent&damage.& !
! The! SC! dismissed! the! action! because! there! was! no!
Parents" proof! of! the! employerFemployee! relationship.! ! The!
Can& the& parents& be& held& jointly& liable& as& a& result& of& the& cause!of!action!of!MERALCO!for!filing!the!case!was!that!
negligent&act&of&their&minor&child?& Martin!was!the!employer!of!the!driver.!
Yes,! under! the! Family! Code,! the! parents! can! be! held! !
solidarily!liable!with!their!child.! "
! "
Degree!of!Liability:!Direct"and"Primary! "
The! SC! ruled! that! the! liability! of! the! parents! is! not! "
merely!subsidiary!but!direct!and!primary.!!! "
! "

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2001"Bar"Question" The&act&was&not&a&negligent&act&
After! working! overtime! up! to! midnight,! Alberto,! an! Ong!v.!MWD!
executive! of! an! insurance! company,! drove! a! company! !
vehicle! to! a! favorite! videoke! bar! where! he! had! some! Fortuious&event&
drinks!and!sang!some!songs!with!friends!to!"unwind".! There!shall!be!no!concurring!negligence!on!the!part!of!
At! 2:00! a.m.,! he! drove! home,! but! in! doing! so,! he! the!person!raising!such!defense!!
bumped! a! tricycle,! resulting! in! the! death! of! its! driver.! !
May& the& insurance& company& be& held& liable& for& the& Contributory&Negligence&
negligent&act&of&Alberto?&Why?& PBCOM!v.!CA!
No! because! even! if! there! is! an! ERFEE! relationship,! in! There! can! be! reduction! of! amount! because! there! is!
order!for!the!employer!to!be!liable,!the!employee!must! contributory!negligence!on!the!part!of!the!plaintiff!for!
be!acting!within!his!assigned!task!during!the!incident.! asking!a!secretary!to!deposit!instead!of!an!officer!like!a!
! treasurer,!finance!officer!or!the!like.!
Teachers" !
Under&this&source&of&obligation,&may&the&school&itself&be& PNR!v.!Tupang!and!CA!
held&vicariously&liable?& Bicol! to! Manila.! ! While! the! train! was! somewhere! in!
Yes,!under!the!Family!Code.! Quezon,! Tupang! was! sitting! in! a! metal! connection! of!
! the!two!coaches!and!due!to!the!sharp!curve,!he!fell!and!
How&about&for&schools&which&are&not&for&arts&and&trade?& died.!
Yes,!it!doesn’t!matter!what!kind!of!school,!there!is!still! !
vicarious!liability! The! SC! ruled! that! it! was! the! negligence! of! PNR! which!
! caused!the!death!of!Tupang!because!the!coaches!were!
If& the& student& who& caused& the& injury& is& already& of& age,& overcrowded!which!is!the!reason!why!he!outside.!
can&the&administrators&still&be&held&vicariously&liable?& !
! The! SC! however! held! that! there! was! contributory!
Palisoc!v.!Brillantes!(1971)! negligence! on! the! part! of! Tupang! because! he! did! not!
A!student!punched!another!student!who!fell!and!hit!his! hold! tenaciously! to! the! bar! thus! the! award! was!
head! that! caused! his! death.! When! the! parents! of! the! reduced.!
deceased!students!sued,!one!of!the!defenses!raised!by! !
the!school!was!that!the!student!was!already!of!age.! Prescription!4!years!from!the!date!of!the!incident!
! !
The!SC!ruled!that!even!if!the!student!is!already!of!age,! Escueta!v.!Fandialan!
the! teachers,! school! and! administrators! can! still! be! The! SC! held! that! the! action! had! long! prescribed!
held!vicariously!liable.! because!it!was!filed!15!years!after!the!cause!of!action!
! accrued.!
Under! the! Family! Code! today,! for! the! teachers! to! be! !
liable,!the!student!has!to!be!a!minor.! Doctrine&of&Last&Clear&Chance/Supervening&Negligence&
! Premise:!both!parties!were!negligent!
! Negligence!of!one!is!preceded!by!negligence!of!another!
! by!an!appreciable!amount!of!time.!!!
! !
! If! it! is! simultaneous! negligence,! this! doctrine! is! not!
! applicable! because! one! of! them! should! have! the!
! opportunity! to! prevent! the! mishap! by! just! exercising!
! the!diligence!required!
! !
! Picart!v.!Smith!!
! Plaintiff!was!negligent!because!he!was!riding!his!horse!
! at!the!left!lane!of!the!bridge.!!The!defendant!was!at!the!
! right!lane.!When!the!car!was!near!the!horse,!the!horse!
! got! startled! causing! it! to! jump! off! the! bridge! and! die.!!
! The! SC! held! that! the! defendant! was! liable! under! the!
Defenses" doctrine!of!last!clear!chance!for!being!negligent!in!the!

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sense! that! he! had! the! opportunity! to! prevent! the! !
misfortune! by! just! exercising! the! diligence! required.!! If&there&was&death&as&a&result&of&a&quasi)
He!could’ve!stopped!the!car!or!moved!to!another!lane.! delictual/negligent&act,&what&are&the&damages?&
! Article" 2206.! The! amount! of! damages! for! death!
Anuran!v.!Buño! caused!by!a!crime!or!quasiFdelict!shall!be!at!least!three!
One! of! the! passengers! of! an! overcrowded! jeepney! thousand! pesos,! even! though! there! may! have! been!
asked! the! driver! the! stop! so! he! can! alight! but! the! mitigating!circumstances.!In!addition:!
driver!stopped!in!the!middle!of!the!highway.!!Another! !
approaching! vehicle,! instead! of! avoiding! the! said! (1) The! defendant! shall! be! liable! for! the! loss! of! the!
jeepney,! rammed! into! it! causing! injuries! to! the! earning! capacity! of! the! deceased,! and! the!
passengers! indemnity! shall! be! paid! to! the! heirs! of! the! latter;!
! such!indemnity!shall!in!every!case!be!assessed!and!
The!plaintiff!sued!four!parties,!the!2!drivers!and!the!2! awarded! by! the! court,! unless! the! deceased! on!
employers.! account! of! permanent! physical! disability! not!
! caused! by! the! defendant,! had! no! earning! capacity!
However! the! owner! of! the! jeepney! filed! a! MTD! citing! at!the!time!of!his!death;!
the! doctrine! of! last! clear! chance.! ! His! argument! was! !
that! his! driver! was! negligent! but! the! driver! of! the! (2) If! the! deceased! was! obliged! to! give! support!
other! vehicle! had! the! last! opportunity! to! avoid! the! according! to! the! provisions! of! article! 291,! the!
collision.! recipient! who! is! not! an! heir! called! to! the!
! decedent's! inheritance! by! the! law! of! testate! or!
The! SC! held! that! the! doctrine! may! only! be! invoked! if! intestate! succession,! may! demand! support! from!
the!case!is!between!those!who!are!all!negligent.!!Thus,! the! person! causing! the! death,! for! a! period! not!
it! cannot! be! invoked! by! those! who! are! negligent! as! exceeding!five!years,!the!exact!duration!to!be!fixed!
against!another!who!is!not!negligent!because!it!would! by!the!court;!
be!inequitable! !
! (3) The! spouse,! legitimate! and! illegitimate!
DAMAGES" descendants! and! ascendants! of! the! deceased! may!
" demand! moral! damages! for! mental! anguish! by!
Article"2197" reason!of!the!death!of!the!deceased.!
Damages!may!be:! !
(1)!Actual!or!compensatory;! Indemnity"
(2)!Moral;! When! the! imposable! penalty! should& have& been! death,!
(3)!Nominal;! the! indemnity! to! be! awarded! shall! be! P100,000!
(4)!Temperate!or!moderate;! otherwise,! P75,000! (indemnity,! moral,! exemplary! +!
(5)!Liquidated;!or! temperate)!
(6)!Exemplary!or!corrective.! !
! Loss"of"earning"capacity"
May&there&be&a&valid&award&for&all&these&damages?& Gross! income! in! one! year! –! necessary! expenses!
No.! ! An! award! for! actual! damages! will! preclude! the! (amount!incurred!in!earning!the!amount)!
award!for!nominal!and!temperate!damages.!!! !
! If! there! is! no! proof! of! necessary! expenses,! there! shall!
In! actual! damage,! there! is! pecuniary! loss! whereas! in! be!a!reduction!of!gross!income!by!½!
nominal! damage,! there! is! only! a! violation! of! a! right! !
which!must!be!indemnified.! GI!–!NE!x!(2/3!of!80!–!age!of!the!deceased!at!the!time!
! of!death)!
Temperate! damages! is! awarded! when! there! is! !
pecuniary!loss!but!it!is!so!hard!to!prove.! "
! "
In! case! of! death,! if! the! injured! would! not! be! able! to! "
prove!actual!damages,!the!Court!shall!award!by!way!of! "
temperate!damages!in!the!amount!of!P25,000.! "
! "

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" !
Moral"Damages" !
Not! every! time! that! a! person! suffers! mental! anguish,! !
serious! anxiety,! besmirched! reputation! that! he! is! !
entitled!to!moral!damages.!! !
! !
Article"2219.!Moral!damages!may!be!recovered!in!the! !
following!and!analogous!cases:! !
(1)!A!criminal!offense!resulting!in!physical!injuries;! !
(2)!QuasiFdelicts!causing!physical!injuries;! !
(3)!Seduction,!abduction,!rape,!or!other!lascivious!acts;! !
(4)!Adultery!or!concubinage;! !
(5)!Illegal!or!arbitrary!detention!or!arrest;! !
(6)!Illegal!search;! !
(7)!Libel,!slander!or!any!other!form!of!defamation;! !
(8)!Malicious!prosecution;! !
(9)!Acts!mentioned!in!article!309;! !
(10)!Acts!and!actions!referred!to!in!articles!21,!26,!27,! !
28,!29,!30,!32,!34,!and!35.! !
The!parents!of!the!female!seduced,!abducted,!raped,!or! !
abused,! referred! to! in! No.! 3! of! this! article,! may! also! !
recover!moral!damages.! !
The! spouse,! descendants,! ascendants,! and! brothers! !
and!sisters!may!bring!the!action!mentioned!in!No.!9!of! !
this!article,!in!the!order!named.! !
! !
Mayo!v.!People! !
The! driver! crossed! the! island! and! drove! in! the! !
opposite! lane.! ! Linda! Navarate,! one! of! the! injured! !
parties,!filed!a!claim!in!the!criminal!case!in!relation!to! !
the!deformities!in!her!face.!!According!to!her,!because! !
of! the! said! deformities,! her! boyfriend! left! her! so! she! !
demanded!for!moral!damages!of!P1M.!!The!trial!court! !
granted.!The!CA!reduced!by!P200,000.! !
! !
The! SC! held! that! since! there! was! no! proof! that! the! !
boyfriend! left! her! because! of! the! deformities! in! her! !
face!and!even!if!the!boyfriend!left!her!because!of!it,!it!is! !
not! a! ground! for! the! award! of! moral! damages.!! !
However,! since! there! was! physical! injuries! she! was! !
still!entitled!to!moral!damages!of!P200,000.! !
! !
In!relation!to!Malicious" Prosecution" as!a!ground!for! !
the!award!of!moral!damages,"there!has!to!be!a!criminal! !
complaint!filed!which!was!found!to!be!malicious.!! !
! !
In!a!few!cases,!like!a!disbarment!suit,!the!SC!held!that!a! !
clearly&unfounded&civil&suit! can! be! the! basis! of! a! claim! !
for!moral!damages!under!malicious!prosecution.! !
! !
! !
! !
! !

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Art." 1159." Obligations" arising" from"

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Secondly,!A!is!not!in!pari!delicto.!Article" 1416:" When& !

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

Civil!Law!Review!II!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For!PERSONAL!use!only!! ! !!!!!!!!!!!!!!!!!!!!!!!

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