Professional Documents
Culture Documents
CollegeofLaw
Law101:ObligationsandContracts
CourseOutline
Prof.MaryRoseS.Tan
Semester2,AY20112012
ContactInformation:
CourseSchedule:
maryrose.tan@gmail.com
+639178871555
MondaysandFridays,6:30p.m.to9:00p.m.
Room200(PadillaRoom)
AttendanceRequirement: CollegeofLawrulesonattendanceshallbestrictlyapplied.
Studentsmayonlybeabsentforanycauseforamaximumof8
sessions.
Assessment:
(1)Classparticipation
30%
(2)Midtermexamination
20%
(3)FinalExam
50%
PrescribedTextbook:
Tolentino,CivilCodeofthePhilippines,Vol.IV
INTRODUCTION
A. CourseOverview
B. CommonLawTraditionandtheCivilLawTradition
Agabin,P.A.,Mestizo:TheStoryofthePhilippineLegalSystem(2011),
Chapter7,pp.169216
PARTONE:OBLIGATIONS
A. GeneralProvisions
1. Definition(Article1156,CivilCode)
2. Elements
a. ActiveSubject
b. PassiveSubject
c. ObjectorPrestation
d. EfficientCauseorJuridicalTie
BasedontheCourseOutlineofProf.EduardoLabitag.
Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
3. NaturalObligations
a. Definition(Art.1423,CC)
b. Examples(Articles1424to1430)
c. DifferencebetweenNaturalandCivilObligation(Art.1423)
d. Distinguishedfrommoralobligations
Villaroelv.Estrada,71Phil.140(1940)
Fisherv.Robb,69Phil101(1939)
e. ConversiontoCivilObligation
bynovation
byratification
4. SourcesofObligations(Art.1157)
a. Law(Art.1158)
b. Contracts(Art.1159,1305)
c. Quasicontracts(Art.1160,2142)
Kinds:
i. Negotiorumgestio(Art.2144)
ii. Solutioindebiti(Art.2154)
iii. Others(Art.2164to2175)
d. DelictsorCrime(Art.1161)
e. Quasidelicts(Art.1162,2176)
Distinctionbetweencrimesandquasidelicts
Vicariousliability(Art.2180,Art.218219,FamilyCode)
Civilliabilityarisingfromcrime(Art.1161;Rule111,RevisedRulesof
CriminalProcedure)
Barredov.Garcia,73Phil607(1942)
Mendozav.Arrieta,91SCRA113(1975)
5. ClassificationofObligations
a. PureandConditionalObligations(Art.11791192)
b. WithaPeriodoraTerm(Art.11931198)
c. AlternativeandFacultative(Art.11991206)
d. JointandSolidary(Art.12071222)
e. DivisibleandIndivisible(Art.12231225)
f. WithaPenalClause(Art.12261230)
B. NatureandEffectsofObligations
1. KindsofPrestation
Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
a. Togive
specificthing
topreservethething(Art.1163)
todelivertheaccessionsandaccessories(Art1166)
todeliverthefruits(Art.1164,par.1)
todeliverthethingitself(Art.1244)
ii. genericthing(Art.1246)
b. Todo(Art.1244)
c. Nottodo(Art.1244)
2. BreachofObligation
a. Concept
SongFov.HawaiianPhilippines,47Phil.821(1928)
Velardeetal.v.CourtofAppeals,361SCRA56(2001)
Angelesv.Calasanz,135SCRA323(1985)
DeltaMotorCorporationv.Genuino,170SCRA29(1989)
VermenRealtyv.CourtofAppeals,224SCRA549(1993)
b. ModesofBreach
Delayormora(Art.1169)
i.
morasolvendi
CetusDevelopmentv.CourtofAppeals,176SCRA72(1989)
AerospaceChemicalIndustriesv.CourtofAppeals,315SCRA92(1999)
SantosVenturaHocormaFoundationv.Santos,441SCRA472(2004)
Vazquezv.AyalaCorporation,443SCRA231(2004)
Abellav.Francisco,55SCRA447(1931)
delaCruzv.Legaspi,98SCRA43(1955)
ii.
moraaccipiendi(Seealso1268)
Villaroelv.ManilaMotorCo.,Inc.,104Phil.926(1958)
iii.
compensationmorae
CentralBankv.CourtofAppeals,139SCRA46(1985)
Fraudordolo(Art.1171)
doloincidenteanddolocausante
Woodhousev.Halili,93Phil.526(1953)
Geraldezv.CourtofAppeals(1994)
i.
Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
Negligence(Art.1172,1173)
culpav.dolo
culpaaquilianov.culpacontractual
standardofcarerequired
Gutierrezv.Gutierrez,56Phil.177(1932)
Vasquezv.Borja,74Phil.560(1944)
deGuiav.ManilaElectricCorporation,40Phil706(1920)
USv.Barias,23Phil434(1912)
Sarmientov.SpousesCabrido,401SCRA122(2003)
Crisostomov.CourtofAppeals,409SCRA528(2003)
Contraventionofthetenor(Art.1172)
Chavesv.Gonzales,32SCRA547(1970)
Telefastv.Castro,158SCRA445(1988)
Arrietav.NARIC,10SCRA79(1964)
Magatv.Medialdea,206Phil341(1983)
c. Remediesincaseofbreach
i.
Performance
Specificperformance(Art.1165;Section10,Rule39,RulesofCourt)
Substitutedperformance
inanobligationtogivegenericthing(Art.1165,par.2)
undoingofpoorworkinanobligationtodo(Art.1167)
Chavesv.Gonzales,32SCRA547(1970)
Tanguiligv.CourtofAppeals,266SCRA78(1997)
undoinginanobligationnottodo(Art1168)
ii.
Rescission(Art.11911192)
iii.
Damages(Art.1170)
d. SubsidiaryRemediesofCreditor
i.
AccionSubrogatoria(Art.1177)
ii.
AccionPauliana(Art.1177;1381,par.3)
KheHongChengv.CourtofAppeals,355SCRA701(2001)
Siguanv.Lim,318SCRA725(1999)
iii.
OtherSpecificRemedies(Art.1652,1729,1608,1893)
Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
e. FortuitousEvent(Art.1174)
i.
Effect:ExtinguishmentofLiability
ii.
ExceptionstoExtinguishment(Art.1174,1165par.3,552,1942,
1979,2001,2147)
JuanNakpil&Sonsv.CourtofAppeals,144SCRA597(1986)
Republicv.LuzonStevedoringCo.,21SCRA279(1967)
Dioquinov.Laureano,33SCRA65(1970)
Austriav.CourtofAppeals,39SCRA527(1971)
NationalPowerCorporationv.CourtofAppeals,161SCRA334(1988)
Yobidov.CourtofAppeals,281SCRA1(1997)
BacolodMurciaMillingv.CourtofAppeals,182SCRA24
Philcomsatv.GlobeTelecom,430SCRA(2004)
f. UsuriousTransactions(Art.1175,1413,1961)
PD858;PD1685
CentralBankCircular416
MonetaryBoardCircularNo.905;No.2209
EasternShippingLinesv.CourtofAppeals,234SCRA781(1994)
CrisminaGarmentsv.CourtofAppeals,304SCRA356(1999)
KengHuaProductsv.CourtofAppeals,286SCRA257(1998)
SecurityBankv.RegionalTrialCourtMakati,263SCRA453(1996)
Almedav.CourtofAppeals,256SCRA292(1996)
AngelWarehousingv.Chelsea,23SCRA19(1968)
FirstMetroInvestmentv.EstedelSol,369SCRA(2001)
C. DifferentKindsofObligations
1. PureandConditionalObligations
PureObligations(Art.1179,par.1)
ConditionalObligations(Art.1181)
Concept
Conditionv.PeriodorTerm
Gaitev.Fonacier,2SCRA830(1961)
Gonzalesv.HeirsofTomasandPaulaCruz,314SCRA585(1999)
KindsofConditions
a. Astotheeffectontheobligation(Art1181)
Gonzalesv.HeirsofTomasandPaulaCruz,supra.
5
Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
i.
SuspensiveConditionorConditionprecedent
Retroactiveeffectwhenconditionisfulfilled(Art.1187)
Coronelv.CourtofAppealsandAlcaraz,263SCRA15(1996)
Rightsofthecreditoranddebtorbeforefulfillmentofthe
condition(Art.1188)
ii. ResolutoryConditionorConditionsubsequent
Parksv.ProvinceofTarlac,49Phil.142(1927)
CentralPhilippineUniversityv.CourtofAppeals,245SCRA511(1995)
Quijadav.CourtofAppeals,299SCRA695(1998)
b. Astothecauseororigin(Art1182)
i. Potestative
Effectoffulfillmentofconditiondependssolelyonthewillofthe
debtor
Debtorspromisetopaywhenhecanisnotacondition(Art1180)
LaoLimv.CourtofAppeals,191SCRA150(1990)
ii. Causal
NagaTelephoneCo.v.CourtofAppeals,230SCRA351(1994)
iii. Mixed
Osmenav.Rama,14Phil.99(1909)
Hermosav.Longora,93Phil.971(1953)
Taylorv.UyTiengPiao,43Phil.873(1922)
SmithBellv.Matti,44Phil.875(1922)
RustanPulpandPaperMills,214SCRA665(1993)
Romerov.CourtofAppeals,250SCRA250SCRA223(1995)
c. Astopossibility(Art.1183)
RomanCatholicArchdioceseofManilav.CourtofAppeals,
198SCRA300(1991)
d. Astomode:positiveornegative(Art.11841185)
Rulesincaseofloss,deteriorationorimprovementpendingthehappeningof
thecondition(Art.11891190)
6
Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
HeirsofTimoteoMorenov.MactanCebuInternationalAirportAuthority,
413SCRA502(2003)
a. Definitionofloss,deteriorationandimprovement
b. Effectoflossordeterioration
Withoutdebtorsfault
Withdebtorsfault
c. Effectofimprovement
Bynatureortime
Duetodebtorseffortandexpense
Effectofpreventionofthefulfillmentoftheconditionbytheobligor(Art
1186)
Taylorv.UyTiengPiao,supra.
Herrerav.Leviste,135SCRA129(1985)
2. ReciprocalObligations(Art.11911192)
a. Concept
b. Alternativeremediesofinjuredpartiesoncaseofbreach
i.
actionforspecificperformance
effectwhenfulfillmentnolongerpossible
ii.
actionforrescission
requisites
howmade
effects
SongFov.HawaiianPhilippines,47Phil.821(1925)
Boysawv.InterphilPromotions,148SCRA365(1987)
UniversityofthePhilippinesv.delosAngeles,35SCRA365(1989)
DeErquiagav.CourtofAppeals,178SCRA1(1989)
Angelesv.Calasanz,135SCRA323(1985)
JamesG.Ongv.CourtofAppeals,310SCRA1(1999)
Iringanv.CourtofAppeals,366SCRA41(2001)
VisayanSawMillv.CourtofAppealsandRJTrading,219SCRA378(1993)
Deiparinev.CourtofAppealsandTrinidad,221SCRA503(2003)
GraceParkEngineeringCo.Inc.v.Dimaporo,107SCRA266(1981)
Roquev.Lapuz,96SCRA741(1980)
Suriav.IntermediateAppellateCourt,151SCRA661(1987)
Read:Art1786,1788,148486,RepublicActNo.6552
Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
3. ObligationswithaPeriod(Art.1193,1180)
a. ComparePeriod/Termv.Condition
b. KindsofPeriod
i.
Astoeffect
Suspensive(Art1193,par.1)
Resolutory(Art1193,par.2)
ii.
Astoexpression
Express
Implied
iii.
Astodefiniteness
Definite
Indefinite
iv.
Astosource
Voluntary
Legal
Judicial
c. Rulesincaseofloss,deteriorationorimprovementbeforearrivalofthe
period(Art.1194and1189)
d. EffectofPaymentinAdvance(Art.1195;1197,par.3)
e. BenefitofPeriod(Art1196)
i.
Forwhosebenefit
Creditor
Debtor
Both
ii.
Effects
iii.
Presumption(Art.1196)
Lachicav.Araneta,47OfficialGazetteNo.11,5699(1949)
PoncedeLeonv.Syjuco,90Phil311(1951)
Bucev.CourtofAppeals,332SCRA151(2000)
iv.
Whendebtorlosesrighttomakeuseofperiod(Art.1198)
f. WhenCourtMayFixAPeriod
i.
Periodisimplied
ii.
Perioddependsonsolewillofthedebtor
Aranetav.PhilippineSugarEstateDevelopmentCo.,20SCRA330(1967)
CentralPhilippineUniversityv.CourtofAppeals,supra.
Deudorv.J.M.Tuason,2SCRA129(1961)
Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
4. AlternativeObligations
a. Concept(Art.1199)
b. RightofChoice(Art.1200)
c. EffectofNoticeofChoice
d. WhenNoticeProducesEffect(Art.1201)
e. Effectoflossorimpossibilityofoneorallprestations(Art.1202to1205)
f. FacultativeObligation(Art.1206)
i.
Concept
ii.
DistinguishedfromAlternativeObligations
iii.
EffectofSubstitution
5. JointandSolidaryObligations
a. JointObligations
i.
Concept
Requisites
Wordsusedtoindicatejointobligations
ii.
Presumption(Art.1207,1208)
iii.
Effects(Art.1207,1208)
Extentofliabilityofdebtor
Extentofrightofcreditor
Incaseofnovations,compensation,confusion(Art1277)or
remission
b. SolidaryObligations
i.
Concept
Requisites
Wordsusedtoindicatesolidaryobligations
ii.
Kinds
Astosource(Art.1208)
o Legal(Art.1915,1945,2194,Art119oftheRPC)
o Conventional
o Real
Astopartiesbound
o Active
o Passive
o Mixed
Astouniformity
o Uniform
o Varied/nonuniform(Art.1211)
Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
Ynchaustiv.Yulo,34Phil.978(1916)
Inciongv.CourtofAppeals,257SCRA578(1996)
RCBCv.CourtofAppeals,178SCRA739(1989)
LafargeCementPhil.V.ContinentalCement,443SCRA522(2004)
iii.
Effects
Solidarycreditorinrelationto:
o commondebtor
righttodemand(Art.12141216;1217,par.1)
incaseofnovation,compensation,confusion,
remissionbyacreditor(Art.1215,par.1)
o solidarycocreditors
incaseofnovation,compensation,confusion,
remissionbyacocreditor(Art1215,par.2)
prejudicialactsprohibited(Art.1212)
assignmentofrightsnotallowed(Art.1213)
Solidarydebtorinrelationto:
o commoncreditor
obligationtoperform(Art.1207)
incaseofnovation,compensation,confusion,
remissionbyacreditor(Art.1215,par.1)
o solidarycodebtor
incaseofpaymentbyacodebtor(Art.12171220)
incaseoffortuitousevent(Art.1221)
Jaucianv.Querol,38Phil.718(1918)
RehabilitationFinanceCorporationv.CourtofAppeals,
OfficialGazetteNo.6,p.2467
Quiombingv.CourtofAppeals,189SCRA325(1990)
Inciongv.CourtofAppeals,257SCRA578(1996)
iv.
DefensesAvailabletoaSolidaryDebtorAgainsttheCreditor(Art.
1222)
Types
o thosederivedfromthenatureoftheobligations
o personaldefenses
o defensespertainingtohisshares
o thosepersonallybelongingtotheothercodebtors
Effects
Ynchaustiv.Yulo,supra.
Alipiov.CourtofAppeals,341SCRA441(2000)
10
Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
c. JointIndivisibleObligations
i. Concept
Distinguishedfromjointobligations
Distinguishedfromsolidaryobligations
ii. Indivisibilitydistinguishedfromsolidarity(Art.1210)
iii. Effects(Art.1209,1224)
6. DivisibleandIndivisibleObligations
a. DivisibleObligations
i. Concept
ii. Effects(Art.1223,1233)
b. IndivisibleObligations
i. Concept:distinguishedfromsolidaryobligations
ii. Kinds
Natural(Art.1225,par.1)
Legal(Art.1225,par.3)
Conventional(Art.1225,par.3)
iii. Presumptionsofdivisibilityandindivisibility(Art.1225)
iv. Divisibilityandindivisibilityinobligationsnottodo(Art.1225,par.3)
v. Effects(Art.1223,1223,1224)
vi. CessationofIndivisibility
7. ObligationswithaPenalClause
a. Concept
Principalv.AccessoryObligation
Distinguishedfromconditionalobligations
Distinguishedfromalternativeobligations
Distinguishedfromfacultativeobligations
Distinguishedfromguaranty
11
Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
b. KindsofPenalClause
Astoeffect
o Subsidiary
o Complimentary
Astosource
o Conventional
o Legal
Astopurpose
o Punitive
o Reparatory
c. DemandabilityofPenalty(Art.1226,par.2)
d. EffectsofPenalClause:GeneralRuleandExceptions
Substituteforindemnityfordamagesandpaymentofinterest(Art.1226)
MakatiDevelopmentCorp.v.EmpireInsuranceCo.20SCRA557(1967)
Tanv.CourtofAppeals,367SCRA571(2001)
CountryBankersInsurancev.CourtofAppeals,201SCRA458(1991)
Notexemptdebtorfromperformance(Art.1227)
Creditorcannotdemandbothperformanceandpenaltyatthesametime
(Art.1227)
Creditorcannotcollectotherdamagesinadditiontopenalty(Art.1226)
e. Whenpenaltyshallbeequitablyreduced(Art.1229)
f. NullityofPrincipalObligationofPenalClause(Art.1230)
D. ExtinguishmentofObligations(Art.1231)
1. PaymentorPerformance(Art.1232)
a. Concept(Art.1232)
b. Requisites
i. Whocanpay
GeneralRule
Exceptions:
12
Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
o thirdpersonwhoisaninterestedparty;effects(Art.1302[3])
o thirdpersonwhoisnotaninterestedpartybutwiththeconsentof
debtor(Art.1302[2],1236,par.1)
o thirdpersonwhoisnotaninterestedpartyandwithoutthe
consentofthedebtor,withouttheknowledgeoragainstthewillof
thedebtor(Art.1236,par.2;Art.1237,1236,par.1)
o thirdpersonwhodoesnotintendtobereimbursed(Art1238)
inanobligationtogive(Art.1239,1427)
incaseofactivesolidarity(Art.1214)
ii. Towhompaymentcanbemade
Generalrule(Art.1240)
Exceptions:
o incapacitatedperson(Art.1241,par.1)
o thirdperson(Art.1241,par.2)
o whenproofofbenefitnotrequired(Art.1241,par.3;Art.1242)
o incaseofactivesolidarity(Art.1214)
iii. Whatistobepaid(Identity)
GeneralRule
Specificcases:
o Togiveaspecificthing(Art.1244)
o Togiveagenericthing(Art.1246)
o Topaymoney(Art.1249,1250;R.A.529,R.A.4100,R.A.8183)
Arrietav.NARIC,supra
Kalalov.Luz,34SCRA377(1970)
St.PaulFireandMarineInsurancev.Macondray,70SCRA122(1976)
Papav.A.V.Valencia,284SCRA643(1998)
PhilippineAirlinesv.CourtofAppeals,181SCRA557(1990)
13
Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
PaymentofInterest(Art.1956)
iv. Howpaymentistobemade(Integrity)
GeneralRule(Art.1233)
o Partialpaymentisnotallowed;exceptions(Art.1248)
Substantialperformanceingoodfaith(Art.1234)
Estoppel(Art.1235)
Presumptionsinpaymentofinterestsandinstallments(Art.1176)
v. Whenispaymenttobemade
GeneralRule(Art1169)
Nodemand,nodelay;Exceptions
vi. Wherepaymentistomade
Placeexpresslydesignated(Art.1251,par.1)
Whenplaceofpaymentisnotexpresslydesignated(Art.1251,
paragraphs2to4)
vii. Whopaysforexpensesformakingpayment(Art.1247)
c. ApplicationofPayments
i.
Concept(Art.1252)
ReparationsCommissionv.UniversalDeepFishing,83SCRA764(1978)
Paculdov.Regalado,345SCRA134(2000)
ii.
Requisites
iii.
RulesinApplicationofPayments(Art.12521253)
Ifrulesarenotapplicableorcannotbeinferred(Art.1254)
Meaningofthemostonerousdebtor
d. PaymentbyCession
i.
Concept(Art.1255)
ii.
Requisites
iii.
Effects
iv.
ComparedtoAssignmentofReceivables
e. DationinPayment
14
Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
i.
Concept(Art.1245)
DistinguishedfromPaymentbyCession
DevelopmentBankofthePhilippinesv.CourtofAppeals,284SCRA14
(1998)
ii.
Requisites
iii.
Effects
FilinvestCreditCorporationv.PhilippineAcetylene,111SCRA421(1982)
f. TenderofPaymentandConsignation
i.
TenderofPayment
Concept
Requisites
ii.
Consignation
ConceptandPurpose
Requisites
o Whentenderandrefusalnotrequired(Art.1256,par.2)
o Twonoticerequirement(Art.1257,par.1;Art.1258,par.
2);Effectsofnoncompliance
Effects(Art.1260,par1)
o Withdrawalbydebtorbeforeacceptancebycreditoror
approvalofcourt(Art.1260,par.2)
o Withdrawalbydebtorafterproperconsignation(Art.
1261)
Withcreditorapproval
Withoutcreditorapproval
ExpensesofConsignation
DeGuzmanv.CourtofAppeals,137SCRA730(1985)
TLGInternationalContinentalEnterprising,Inc.v.Flores,47SCRA437
(1972)
McLaughlinv.CourtofAppeals,144SCRA693(1986)
Socov.Militante,123SCRA160(1983)
Sottov.Mijares,28SCRA17(1969)
Reisenbeckv.CourtofAppeals,209SCRA657(1992)
RuralBankofCaloocanv.CourtofAppeals,104SCRA151(1981)
Licuananv.Diaz,175SCRA530(1989)
Chanv.CourtofAppeals,230SCRA685(1994)
MeatPackingCorp.v.Sandiganbayan,359SCRA409(2001)
15
Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
2. LossorImpossibility
a. LossoftheThingDue
i.
Concept(Art.1189,par.2)
ii.
Kinds
Total
Partial
iii.
Requisites(Art.1262)
iv.
Presumption(Art.1266,1267)
v.
Effects
Inanobligationtogiveaspecificthing(Art.1262,1268)
Inanobligationtogiveagenericthing(Art.1263)
Incaseofpartialloss(Art1264)
Actionagainstthirdpersons(Art.1269)
b. ImpossibilityofPerformance
i.
Concept(Art.1266,1267)
ii.
Kinds
Total
Partial
iii.
Requisites(Art.1266)
iv.
Effects
Inobligationstodo(Art.12661267;Art.1262,par.2)
Impossibilitydistinguishedfromdifficulty
Incaseofpartialimpossibility(art.1264)
Occeav.CourtofAppeals,73SCRA637(1976)
NagaTelephoneCompanyv.CourtofAppeals,230SCRA351(1994)
PNCCv.CourtofAppeals,272SCRA183(1997)
16
Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
3. CondonationorRemission
a. Concept
b. Kinds
Totalorpartial
Expressorimplied(Art.1270,par.1)
c. Requisites(Art.1270,par.2)
Yamv.CourtofAppeals,303SCRA1(1999)
d. Presumptions(Art.12711271;1274)
e. Effects
Ingeneral
Incaseofjointorsolidaryobligations
f. GoverningRules(Art.1270)
g. RenunciationofPrincipalorAccessoryObligation(Art.1273)
4. ConfusionorMerger
a. Concept
b. Requisites
c. Effects
Ingeneral(Art.1275)
Incaseofjointorsolidaryobligations(Art.1277)
d. ConfusioninPrincipalorAccessoryObligations(Art.1276)
5. Compensation
a. Concept(Art.1278);distinguishedfromConfusion
b. Kinds
i.
ii.
iii.
iv.
v.
TotalorPartial
Legal
Conventional(Art.1279,Art.1282)
Judicial(Art.1283)
Facultative
17
Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
c. LegalCompensation
i.Requisites(Art.12791280):Duedistinguishedfromdemandable
Gantionv.CourtofAppeals,28SCRA235(1969)
BankofthePhilippineIslandsv.Reyes,255SCRA571(1996)
PhilippineNationalBankv.SapphireShipping,259SCRA174(1996)
CKHIndustrialDevelopmentv.CourtofAppeals,272SCRA333(1997)
Mirasolv.CourtofAppeals,351SCRA44(2001)
AssociatedBankv.Tan,446SCRA282(2004)
Villanuevav.Tantuico,182SCRA263(1990)
Perezv.CourtofAppeals,127SCRA636(1984)
SilahisMarketingCorp.v.IntermediateAppellateCourt,180SCRA21
(1989)
BankofthePhilippineIslandsv.CourtofAppeals,255SCRA___(1996)
ii.Effects(Art.1290,1289)
d. WhenCompensationisnotallowed(Art.12871288)
e. CompensationofDebtsPayableinDifferentPlaces(Art.1268)
f. EffectofNullityofDebtstobeCompensated(Art.1284)
g. EffectsofAssignmentofCredit
i. withconsentofdebtor(Art.1285,par.1)
ii. withknowledgebutwithoutconsentofdebtor(Art.1285,par.2)
iii. withoutknowledgeofdebtor(Art.1285,par.3)
6. Novation
a. Concept(Art.1291)
Changeindebtor
Changeinobject
Changeinthirdpersonwhoissubrogated
Changeincreditorwithitsconsentoratitsinstanceisnotnovation
b. Kinds
i. Astoform:expressorimplied
ii. Astoorigin:conventionalorlegal
iii. Astoobject
objectiveorreal
subjectiveorpersonal
mixed
c. Requisites(Art.1292)
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Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
Millarv.CourtofAppeals,38SCRA642(1971)
Dormitoriov.Fernandez,72SCRA388(1976)
MagdalenaEstatev.Rodriguez,18SCRA967(1966)
Reyesv.SecretaryofJustice,264SCRA35(1996)
Cochingyanv.RBSuretyandInsurance,151SCRA339(1987)
BroadwayCentrumCondominiumCorporationv.TropicalHut,224SCRA
302(1993)
Molinov.SecurityDinersInternational,363SCRA358(2001)
Garciav.Llamas,417SCRA292(2003)
CaliforniaBusLinesv.StateInvestment,418SCRA297(2003)
Babstv.CourtofAppeals,350SCRA341(2001)
d. Effects(Art.1296)
e. EffectsoftheStatusoftheOriginalandNewObligation
i. nullityorvoidabilityoforiginalobligation(Art.1298)
ii. nullityorvoidabilityofnewobligation(Art.1297)
iii. suspensiveorresolutoryconditionororiginalobligation(Art.1299)
f. ObjectiveNovation
g. SubjectiveNovation
i. Bychangeofdebtor
Expromision
o Requisites(Art.1293)
o Effects(Art.1294)
Delegacion
o Requisites(Art.1293)
o Effects(Art.1295)
Garciav.Llamas,417SCRA292(2003)
Quintov.People,305SCRA709(1999)
ii.
Bychangeofcreditorsubrogationofathirdpersonintherightsofthe
creditor(Art.1300)
Conventionalsubrogation
o Requisites(Art.1301)
o Distinguishedfromassignmentofcredit
o Effects(Art.13031304)
Licarosv.Gatmaitan,(2001)
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Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
LegalSubrogation
o Requisites
o Whenpresumed(Art.1302)
o Effects(Art.13031304)
AstroElectronicsCorp.v.PhilippineExportandForeignLoanGuarantee
Corporation(2003)
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Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
PARTTWO:CONTRACTS
I.
Introduction
A. ConceptandDefinition(Art.1305)
B. ClassificationofContracts
1. Accordingtosubjectmatter:thingsorservices
2. Accordingtoname:nominateandinnominatecontracts(Art.1307)
3. Accordingtoperfection:bymereconsent(Art.1315)orbydeliveryofobject
(Art.1316)
4. Accordingtoitsrelationtoothercontracts:preparatory;principal;oraccessory
5. Accordingtoform:informalorformal
6. Accordingtopurpose
7. Accordingtonatureoflegaltiecreated:unilateral,bilateralorreciprocal
8. Accordingtocause:onerousorgratuitous
9. Accordingtorisk:commutativeoraleatory
Dizonv.Gaborro,83SCRA688(1978)
C. Characteristics
1. ObligatoryForcebetweentheParties(Art.1308)
a. GeneralRule:FreedomtoContract(Art.1306)
Gabrielv.MontedePiedad,71Phil.497(1941)
PakistanInternationalAirlinesv.Ople,190SCRA90(1990)
b. Exceptions:
i. Whenitisinequitable(Art.1310)
ii. Specialdisqualifications:
Art.87,FamilyCode
Articles1490and1491
Article1782
iii. Whatmaynotbestipulated
ContrarytoLaw
(a) pactumcommisorium(Art.2088)
(b) pactumleonina(Art.1799)
(c) pactumdenonalienado(Art.2130)
(d) otherlimitations:LaborCode,CorporationCode
Contrarytomorals
Contrarytogoodcustoms
Contrarytopublicorder
Contrarytopublicpolicy
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Law101:ObligationsandContractsProf.MaryRoseS.Tan
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Cuiv.Arellano,2SCRA205(1961)
Arroyov.Berwin,36Phil386(1917)
FilipinasCompaiadeSegurosv.Mandanas,17SCRA391(1966)
Bustamantev.Rosel,319SCRA413(1999)
c. Effectofcontractastothirdparties
i. Performancemaybedeterminedbythirdparties(Art.1309)
ii. Whenpossessionoftheobjectofthecontractiswithathirdperson(Art.1312)
iii. Creditorsofcontractingparties(Art1313,1177,1381)
iv. Interferencebythirdparties(Art.1314)
Daywaltv.LaCorporacindelosPadresAgustinosRecoletos,etal.,
39Phil.587(1919)
SoPingBunv.CourtofAppeals,314SCRA751(1999)
Lagonv.CourtofAppeals,453SCRA616(2005)
2. Mutuality(Art.1308to1310;1473)
GSISv.CourtofAppeals,228SCRA183(1993)
ProfessionalAcademicPlans,Inc.etal.v.Crisostomo,453SCRA342(2005)
3. RelativityorPrivityofContracts(Art.1311)
a. Contractstakeeffectonlybetweentheparties,theirassignsandheirs
ManilaRailroadCo.v.LaCompaniaTransatlantica,38Phil.875(1918)
DKCHoldingsCorp.CourtofAppeals,329SCRA666(2000)
b. Noonemaycontractinthenameofanother(Art.1317)
GutierrezHermanosv.Orense,28Phil.571(1914)
c. Stipulationsinfavorofthirdpersons(Art.1311,par.2)
Florentinov.Encarnacion,79SCRA192(1977)
Coquiav.FieldmenInsuranceCo.,26SCRA178(1968)
Constantinov.Espiritu,39SCRA178(1968)
Youngv.CourtofAppeals,169SCRA213(1989)
MarmontResortv.Guiang,168SCRA373(1988)
MandarinVillav.CourtofAppeals,257SCRA538(1996)
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Law101:ObligationsandContractsProf.MaryRoseS.Tan
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II.
EssentialRequisitesofContracts
A. Consent:Requisites(Art.1319)
1.
PerfectionofContract:OfferandAcceptance
a.
Offer
mustbecertain(Art.1319)
whatmaybefixedbytheofferor(At.1321)
whenmadethroughanagent(Art.1322)
whenofferbecomesineffective(Art.1323)
businessadvertisementsofthingsforsale(Art.1325)
advertisementsforbidders(Art.1326)
b.
Acceptance
mustbeabsolute(Art.1319)
kinds:
o express(Art.1320)
o implied(Art.1320)
o qualified(Art.1319)
periodofacceptance(Art.1324)
optioncontract(Art.1324)
Sanchezv.Rigos,45SCRA368(1972)
c.
TerminationofOffer
d.
PerfectionofContract
Fourtheorieswhencontractisperfected:
o Manifestationtheory
o Expeditiontheory
o Receptiontheory
o Cognitiontheory(Art.1319[2])
Rosenstockv.Burke,46Phil.217(1924)
Malbarosav.CourtofAppeals,402SCRA168(2003)
SanLorenzoDevelopmentCorporationv.CourtofAppeals,449SCRA99(2005)
MMDAv.Jancom,G.R.No.147465,January30,2002
2.
LegalCapacityoftheParties
a. Minors,insaneordementedpersons,anddeafmuteswhodonotknow
howtowrite(Art.1327)
b. Whenofferoracceptanceismadeduringalucidinterval,intoxication,
duringhypnoticspell(Art.1328)
c. Corporations(Sections23and36,CorporationCode)
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Law101:ObligationsandContractsProf.MaryRoseS.Tan
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3.
VicesofConsent:ConsentmustbeIntelligent,Free,SpontaneousandReal
(Art.1330to1346)
a. MistakeorError
i. MistakeofFact
Astosubstanceoftheobject
Astoprincipalconditions
Astoidentityorqualificationsoftheparties
Astoquantity,asdistinguishedfromsimplemistakeofaccount
Asiainv.Jalandoni,45Phil296(1923)
HeirsofWilliamSevillav.Sevilla,402SCRA501(2003)
Andresv.ManufacturersHanoverandTrust,177SCRA618
SpousesTheisv.CourtofAppeals,268SCRA167(1997)
ii. MistakeorErrorofLaw
GeneralRule:Ignoranceofthelawexcusesnoone(Art.3)
Exception:MutualErrorofLaw(Art.1334)
iii. Mistakewhenonepartyisunabletoread(Art.1332)
Dumasugv.Modelo,34Phil252(1916)
Hemedesv.CourtofAppeals,316SCRA347(1990)
Lustanv.CourtofAppeals,266SCRA663(1997)
Katipunanv.Katipunan,375SCRA199(2002)
Leonardov.CourtofAppeals,438SCRA201(2004)
iv. Inexcusablemistake(Art.1333)
b. ViolenceorIntimidation(Art.1335)
Martinezv.HSBC,15Phil.252(1910)
Leev.CourtofAppeals,201SCRA405(1991)
c. UndueInfluence(Art.1337)
d. FraudorDolo(Art.1338)
Kinds:
i. Dolocausante(Art.1338)
ii. Doloincidente(Art.1344[2])
Hillv.Veloso,31Phil.161(1915)
Woodhousev.Halili,supra.
Geraldezv.CourtofAppeals,230SCRA320(1994)
Sierrav.CourtofAppeals,211SCRA785(1992)
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Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
FailuretoDiscloseFactswhenthereisadutytorevealthem(Art.1339)
Tuasonv.Marquez,45Phil381(1923)
RuralBankofSta.Mariav.CourtofAppeals,314SCRA255(1999)
Usualexaggerationsintrade:opportunitytoknowthefacts(Art.1340)
Azarragav.Gay,52Phil.599(1928)
Trinidadv.IntermediateAppellateCourt,204SCRA524(1991)
Mereexpressionofopinion(Art.1341);Effects(Art.1344)
Songcov.Sellner,37Phil.254(1917)
e. Misrepresentation
i. byathirdperson(Art.1342)
ii. madeingoodfaith(Art.1343)
iii. activeorpassive
4.
Mercadov.Espiritu,37Phil.215(1917)
Braganzav.VillaAbrille,105Phil.456(1959)
SimulationofContracts
Rodriguezv.Rodriguez,28SCRA229(1914)
Suntayv.CourtofAppeals,251SCRA430(1995)
Pangadiletal.v.CourtofFirstInstance,G.R.No.L32437,August31,1982
Umaliv.CourtofAppeals,G.R.No.89561,September13,1990
a. Kinds:AbsoluteandRelative(Art.1345)
b. Effects(Art.1346)
B. Object
Mustbedeterminateastoitskind(Art.1379)
WhatmayNOTbeobjectsofcontracts(Art.1347)
a. Allthingsoutsidethecommerceofman
b. Allintransmissiblerights
c. Thoseserviceswhicharecontrarytolaw,morals,goodcustoms,public
order,orpublicpolicy
d. Futureinheritance,exceptwhenauthorizedbylaw
e. Impossiblethingsorservices(Art.1348)
Blasv.Santos,1SCRA899(1961)
JLTAgro,Inc.v.Balansag,G.R.No.141882,March11,2005
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Law101:ObligationsandContractsProf.MaryRoseS.Tan
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C. Cause
1. MeaningofCause(Art.1350)
a. inonerouscontracts
b. inremuneratorycontracts
c. incontractsofpurebeneficence
2. DistinguishedfromMotive(Art.1351)
3. Presumption:ExistenceandLawfulnessofCause(Art.1354)
4. DefectiveCausesandEffects:
a. AbsenceofCauseorUnlawfulCause(Art.1352)
b. StatementofFalseCause(Art.1355)
c. InadequacyofCauseorLesion(Art.1355)
Liguezv.CourtofAppeals,102Phil.577(1957)
Carantesv.CourtofAppeals,76SCRA514(1977)
SpousesBuenaventurav.CourtofAppeals,416SCRA263
III.
FormofContracts
A. GeneralRule:Contractsareobligatoryinwhateverform,providedallessential
requisitesarepresent(Art.1356)
B. Exception:Whenthelawrequiresthecontracttobeinaspecificforminorderforit
tobevalidorenforceable(Art.1356)
Kindofformalitiesrequiredbylaw:
1. Forvalidity(Articles748,749,1874,2134,1771,1773)
2. Tomakeiteffectiveastothirdparties(Articles1357and1358)
3. Forpurposesofprovingexistenceofcontract(StatuteofFraudsinArt.1403)
Hernaezv.delosAngeles,27SCRA1276(1969)
Resuenav.CourtofAppeals,G.R.No.128338,March28,2005
InterpretationofContracts
IV.
A. ComparewithRulesofStatutoryConstruction
B. PrimacyofIntention(Articles1370,1372)
Borromeov.CourtofAppeals,47SCRA65(1972)
Kasilagv.Rodriguez,69Phil.217(1939)
Santiv.CourtofAppeals,G.R.No.93625,227SCRA541(1993)
C. DeterminingIntention(Art.1371)
Rapanutv.CourtofAppeals,246SCRA323(1995)
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Law101:ObligationsandContractsProf.MaryRoseS.Tan
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D. RulesofContractInterpretation
1. UndertheCivilCode
a. Whenitcontainsstipulationswhichadmitofseveralmeanings(Art.1373)
OilandNaturalGasCommissionv.CourtofAppeals,G.R.No.114323,
July23,1998
b. Whenitcontainsvariousstipulations,someofwhicharedoubtful(Art.1374)
SpousesRigorv.ConsolidatedOrixLeasingandFinanceCorporation,G.R.
136423,August20,2002
c. Whenitcontainswordswithdifferentmeanings(Art.1375)
V.
d. Whenitcontainsambiguitiesandomissionofstipulations(Art.1376)
Chuav.CourtofAppeals,G.R.No.119255,April9,2003
e. Withrespecttothepartywhocausedtheobscurity(Art.1377)
RizalCommercialBankingCorporationv.CourtofAppeals,G.R.No.
133107,March25,1999
f. Whenitisimpossibletosettledoubtsusingtheabovecitedrules(Art.1378)
Ingratuitouscontracts
Gacosv.CourtofAppeals,G.R.Nos.8596263,August3,1992
Inonerouscontracts
g. Whendoubtsarecastupontheprincipalobjectsothatthetrueintention
cannotbeknown(Art.1378)
2. UndertheRulesofCourt(Rule130,Sections10to19)
ReformationofInstruments
A. Requisites(Art.1359)
1. Meetingoftheminds
2. Trueintentionofthepartiesarenotexpressedintheinstrument
3. Failuretoexpresstrueintentionduetomistake,fraud,inequitableconduct,or
accident
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Law101:ObligationsandContractsProf.MaryRoseS.Tan
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B.
C.
D.
E.
VI.
A.
Garciav.Bisaya,97Phil.609(1955)
Bentirv.Leande,330SCRA591(2000)
Quirosv.Arjona,G.R.No.158901,March9,2004
WhenReformationisnotallowed(Art.1366)
ImpliedRatification(Art.1367)
Whomayaskforreformation(Art.1368)
Procedureforreformation(Art.1369)
Atilanov.Atilano,28SCRA2232(1969)
Carantesv.CourtofAppeals,76SCRA514(514)
Sarmingv.Dy,383SCRA131(2002)
DefectiveContracts
RescissibleContracts
1. Kinds(Art.1381)
2. Characteristics
a. Thedefectconsistsininjuryordamageeithertooneofthecontracting
partiesoftoathirdperson
b. Contractisvalidbeforerescission
c. Attackmayonlybedirecton,notcollaterally
d. Attackmaybedonebycontractingpartyorbyathirdpersonwhoisinjured
ordefrauded
e. Validatedonlybyprescriptionandnotbyratification
3. Definition(Art.1380):DistinguishedfromRescissioninArt.1191(Resolution)
UniversalFoodCorporationv.CourtofAppeals,33SCRA1(1970)
SpousesCannuv.SpousesGalang,G.R.No.139523,May26,2005
Iringanv.CourtofAppeals,G.R.No.129107,September26,2001
Riverav.delRosario,G.R.No.144934,January15,2004
EquatorialRealtyv.MayfairTheatre,G.R.No.133879,November21,2001
4. Requisites
a. Contractisrescissible
b. Partyaskingforrescissionhasnootherlegalmeanstoobtainreparation
(Art.1383)
UnionInsuranceSocietyofCantonv.CourtofAppeals,G.R.No.100319,
August8,1996
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Law101:ObligationsandContractsProf.MaryRoseS.Tan
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c. Heisabletoreturnwhathemaybeobligedtorestoreifrescissionisgranted
(Art.1385)
Riverav.delRosario,G.R.No.144934,January15,2004
5. EffectofRescission(Art.1385)
a. Astothirdpersonswhoacquiredthingingoodfaith(Art.1385[2]and[3]
b. Astothirdpersonswhoacquiredthingsinbadfaith,whenalienationwasin
fraudofcreditors(Art.1388)
6. ExtentofRescission(Art.1387)
Siguanv.Lim,318SCRA725(1999)
7. BadgesofFraud(Art.1387)
Oriav.McMicking,21Phil,243(1912)
Siguanv.Lim,318SCRA725(1999)
Suntayv.CourtofAppeals,251SCRA430(1995)
ChinaBankingCorporationv.CourtofAppeals,G.R.No.129644,March7,2000
MRHoldingsLimitedv.Carlos,G.R.No.138104,April11,2002
B. VoidableorAnnullableContracts
1. Kinds(Art1390)
2. Characteristics
a. Thereisadefectinconsentofoneofthecontractingparties
b. Bindinguntilannulledbyacompetentcourt
c. Maybevalidatedbyratificationorprescription
Felipev.HeirsofAldon,120SCRA628(1983)
3. Annulment
a. DistinguishedfromRescission
b. Grounds(Art.1390)
c. WhoMayorMayNotInstituteActionforAnnulment(Art.1397)
Singsongv.IsabelaSawmill,88SCRA623(1979)
SamahanngMagsasakasaSanJosepv.Valisno,430SCRA629(2004)
Malabananv.GawChing,181SCRA84(1990)
Armentiav.Patriarca,18SCRA1253(1966)
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Law101:ObligationsandContractsProf.MaryRoseS.Tan
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d. Prescription(Art.1391)
Carantesv.CourtofAppeals,76SCRA514(514)
e. Effect:MutualRestitution(Art.1398and1402)
Cadwallader&Co.v.Smith,Bell&Co.,7Phil.461(1907)
Velardeetal.v.CourtofAppeals,361SCRA56(2001)
Inesv.CourtofAppeals,247SCRA312(1995)
ArraRealtyCorporationv.GuaranteeDevelopmentCorporation,438
SCRA441(2004)
i. Whenonthepartiesisincapacitated(Art1399)
Katipunanv.Katipunan,375SCRA199(2002)
ii. Whenthethingislostthroughthefaultofthepartyobligedtoreturnthe
sam(Art.1400)
f. ExtinguishmentofActionforAnnulment
i. byratification(Art.1392)
ii. Whenthethingislostthroughthefaultofthepersonwhohastherightto
filetheaction(Art.1401)
4. Ratification
a. Requisites
i. Contractisvoidable
ii. Ratificationismadewithknowledgethatcontractisvoidable
iii. Atthetimeofratification,thecausefornullityhasalreadyceasedtoexist
b. Forms
i. Expressortacit(Art.1393)
ii. Bythepartiesthemselvesorbytheguardianinbehalfofanincapacitated
party(Art.1394)
c. Effects
i. actiontoannulisextinguished(Art.1392)
UySooLimv.TanUnchuan,38Phil.552(1918)
ii. contractiscleansedretroactivelyfromallitsdefects(Art.1396)
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Law101:ObligationsandContractsProf.MaryRoseS.Tan
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C. UnenforceableContracts
1. Characteristics
a. Validbutcannotbeenforcesbyaproperactionincourt
b. Canberatified
c. Cannotbeassailedbythirdpersons
2. Kinds(Art.1403)
a. Unauthorizedcontracts(Art.1404)
b. ContractscoveredbyStatuteofFrauds
i. PurposeofStatuteofFrauds
AsiaProductionCo.Inc.v.JudgePano,205SCRA458(1992)
WesternMindanaoCo.v.Medalle,79SCRA703(1977)
Limketkai&Sonsv.CourtofAppeals,250SCRA523(1995)
Babaov.Perez,102Phil.756(1957)
Reissv.Memije,15Phil.350(1910)
Villanuevav.CourtofAppeals,267SCRA89(1997)
ii. HowRatified(Art.1405)
PhilippineNationalBankv.PhilippineVegetableOilCo.49Phil.857(1927)
Carbonnellv.Poncioetal,103Phil.655(1958)
FirstPhilippineInternationalBankv.CourtofAppeals,252SCRA259
(196)
iii. RightofthePartieswhenaContractisenforceablebutapublicdocument
isnecessaryforitsregistration(Art.1406)
c. Contractsexecutedbypartieswhoarebothincapableofgivingconsent
i. Effectofratificationbytheparentsorguardianofoneoftheparties(Art.
1407)
ii. Effectofratificationbytheparentsorguardianofbothparties(Art.1407)
D. VoidorInexistentContracts
1. Characteristics
Voidfromthebeginning
Producesnoeffectwhatsoever
Cannotberatified(Art.1409)
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Tongoyv.CourtofAppeals,123SCRA99(1983)
Cuiv.Arellano,2SCRA205(1961)
Chavezv.PresidentialCommissiononGoodGovernment,307SCRA372(1999)
Guiangv.CourtofAppeals,291SCRA372(1998)
Castillov.Galvan,85SCRA526(1978)
2. Kinds
a. VoidContracts
i. Thosewhosecause,objectorpurposeiscontrarytolaw,morals,good
customs,publicorderorpublicpolicy
Whentheactconstitutesacriminaloffense(Art.1411)
Whentheactisunlawfulbutdoesnotconstituteacriminaloffense
(Art.1412)
o Inparidelictorule
Menchavezv.Teves,449SCRA380(2005)
Angelv.AledoandModales,420SCRA645(2004)
Whenthepurposeisillegalandmoneyispaidorproperty
deliveredtherefore(Art.1414)
Whenthecontractisillegalandoneofthepartiesisincapableof
givingconsent(Art.1415)
Liguezv.CourtofAppeals,102Phil.577(1957)
Rellosav.GawCheenHum,93Phil827(1953)
Whentheagreementisnotperseillegalbutprohibited(Art.
1416)
PhilippineBankingCorporationv.LuiShe,21SCRA52(1967)
Frenzelv.Catito,406SCRA55(2003)
AcabalandNicolasv.Acabal,454SCRA555(2005)
Whentheamountpaidexceedthemaximumfixedbylaw9Art.
1417)
Whenbyvirtueofacontractalabourerundertakestoworklonger
thanthemaximumnumberofhoursofworkfixedbylaw(Art.
1418)
Whenthecontractisdivisible(Art.1420)
Whenthecontractisthedirectresultofapreviouslillegalcontract
(Art.1422)
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Law101:ObligationsandContractsProf.MaryRoseS.Tan
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ii. Thosewhoseobjectisoutsidethecommerceofman
iii. Thosewhichcontemplateanimpossibleservice
iv. Thosewheretheintentionofthepartiesrelativetotheprincipal
objectofthecontractcannotbeascertained
v. Thoseexpresslyprohibitedbylaw
b. InexistentContracts
i. thosewhichareabsolutelysimulatedorfictitious(Articles1345to
1346)
ii. thosewhosecauseorobjectdidnotexistatthetimeofthetransaction
3. NoWaiverofDefenseofIllegality(Art.1409)
4. ActionorDefensefortheDeclarationoftheInexistenceofaContract
Noprescriptionperiod(Art.1410)
Notavailabletothirdpersonsnotdirectlyaffected(At.1421)
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Law101:ObligationsandContractsProf.MaryRoseS.Tan
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PARTTHREE:SPECIFICEXAMPLESOFOBLIGATIONS
ObligationsCreatedbyLaw
A. Estoppel
1. Definition(Art.1431)
Kalalov.Luz,34SCRA337(1970)
2. Kinds
a. Technicalestoppel
i. byrecord
ii. bydeed(Art.1433)
b. Equitableestoppelorestoppelinpais(Art.1433)
3. PersonsBound(Art.1439)
ManilaLodgeNo.761BenevolentandProtectiveOrderoftheElksv.Court
ofAppeals,73SCRA168(1976)
4. Application(Art.1434to1438)
Miguelv.Catalino,26SCRA234(1969)
Read:Annotation32SCRA542
Mendozav.ReyesandCourtofAppeals,G.R.No.L31618,August17,1983
B. Trusts
1. Definition(Art.1442)
2. Parties(Art.1440)
a. Trustor
b. Trustee
c. Beneficiaryorcestuiquetrust
Salaov.Salao,70SCRA168(1976)
3. Kinds(Art.1441)
a. Expresstrusts
i. Proofrequired(Art.1443)
ii. Form(Art.1444)
iii. Wantoftrustee(Art.1445)
iv. Acceptancebythebeneficiary(Art.1441)
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Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
b. ImpliedTrusts
i. Howestablished(Art1441)
ii. Howproved(Art.1457)
iii. Specificcases(Art.1448to1456)
Fabianv.Fabian,22SCRA231(1968)
Buenov.Reyes,27SCRA1179(1969)
Tamayov.Callejo,46SCRA27(1972)
HeirsofSanjorjov.Quijano,G.R.No.140457,January19,2005)
AznarBrothersRealtyCompanyv.Aying,G.R.No.144773,May16,2005.
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Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
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Law101:ObligationsandContractsProf.MaryRoseS.Tan
Semester2,AY20112012
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