Article 1283: Yap Unki vs. Chua Jamco G.R. No.

L-5202 December 16, 1909

Facts: On November 10, 1906, plaintiff and defendant executed a written agreement whereby
the business partnership then existing between them was dissolved, and plaintiff sold and
defendant bought plaintiff’s interest in the partnership for the sum of P1,728.94, payable in three
installments, as set out in the agreement. The amended complaint alleged that the total
indebtedness thus contracted by the defendant had become due and payable and had not been
paid in whole or in part at the time when that complaint was filed. Judgment was rendered in the
court below in favor of the plaintiff and against the defendant for P1,728.94 together with
interest upon the various installments from the date when they fell due. From this judgment
defendant appealed, and the case is now before us on his bill of exceptions.

Issue: Whether or not all of the deferred payments had become due and payable when the
original complaint was filed in this action?

Ruling: Appellant having made no assignment of error on this ground we are not called upon to
review the action of the court in this regard. The judgment already rendered will be modified or
not in accordance with defendant’s success or failure in establishing the damages alleged in this
counterclaim.

Article 1287: Paulino Gullas vs. The Philippine National Bank (G.R. No. L-43191)
Facts: Petitioner Gullas maintains a current account with herein respondent PNB. He together
with one Pedro Lopez signed as endorsers of a Warrant issued by the US Veterans Bureau
payable to the order of one Francisco Bacos. PNB cashed the check but was subsequently
dishonored by the Insular Treasurer. PNB then sent notices to petitioner which could not be
delivered to him at the time because he was in Manila. PNB in the letter informed the petitioner
the outstanding balance on his account was applied to the part payment of the dishonored check.
Upon petitioner’s return, he received the notice of dishonor and immediately paid the unpaid
balance of the warrant

Issue: Whether or not PNB has the right to apply petitioner’s deposit to his debt to the bank

Ruling: As a general rule, a bank has a right of set off of the deposits in its hands for the
payment of any indebtedness to it on the part of a depositor. The Civil Code contains provisions
regarding compensation (set off) and deposit. The portions of Philippine law provide that
compensation shall take place when two persons are reciprocally creditor and debtor of each
other. In this connection, it has been held that the relation existing between a depositor and a
bank is that of creditor and debtor
Article 1291: Carlos Sandico,Sr. and Teopisto Timbol vs. The Honorable Minerva
Inocencio Piguing and Desiderio Paras G.R. No. L-26115 November 29, 1971

Facts: On April 16, 1960 the spouses Carlos Sandico and Enrica Timbol, and Teopisto P.
Timbol, administrator of the estate of the late Sixta Paras, obtained a judgment in their favor
against Desiderio Paras (hereinafter referred to as the respondent) in civil case 1554, an action
for easement and damages in the Court of First Instance of Pampanga. On appeal, the Court of
Appeals affirmed and modified the judgment, as follows: IN VIEW WHEREOF, judgment
affirmed and modified; as a consequence, defendant is condemned to recognize the easement
which is held binding as to him; he is sentenced to pay plaintiffs the sums of P5,000.00 actual,
and P500.00 exemplary damages, and P500.00 attorney’s fees; plus costs in both instances.

Issue: Whether or not is there novation on this case?

Ruling: No, the reduction of money is not amount to novation because the concept of novation
is the substitution or change of an obligation by another and not by reduction.

Article 1293: Magdalena State v Antonio& Herminia Rodriguez (Art 1293-JNR)

Facts: Antonio & Herminia bought 2,191 SQM lot in Quezon City from Magdalena State. In
view of the unpaid balance of 5,000 on account of purchase price, they executed promissory
note for 5,000 which promised to pay with out any demand and with interest of 9 % that
payment be made within 60 days from Jan 1957.

Issue: Whether Magdalena State was entitle to penalty after the bonding company paid the
entire amount timely.

Ruling: Article 1253 If the debt produces interests, payment of the principal shall not be
deemed to have been made until the interest have been covered.
Article 1295: Manuel Rios and Paciencia Reyes vs. Jacinto Palma Y. Hermanos, S.C.,
Rafael Palma, and Perfecto Jacint G.R. No. L-23893 March 23, 1926

Facts: It appears that by contract dated September 1, 1920, the plaintiffs, as owners of a parcel of
land on Gagalangin Street, Tondo District, Manila, let the same, with the improvements thereon,
to the firm of Jacinto, Palma y Hermanos, S. C., for the term of fifteen years at a monthly rental
of P400 payable in advance during the first ten days of each month. Among the provisions
contained in this contract we note clause 9, which is to the effect that the terms and conditions of
the contract shall be obligatory upon and redound to the benefit of the persons composing the
lessee firm, their heirs executors, administrators, successors and assigns, as well as the
successors and assigns of the lessors.

Issue: From what has been said it follows that the judgment absolving the defendants from the
complaint must be affirmed; and it is ordered, with costs against the appellants.

Ruling: The plaintiffs were unable to find a new tenant until March 1, 1924, when the property
was leased to Walter A. Smith, Inc., for the period of three years at a rental of P250 per month,
P150 less than that which the plaintiffs would have received under the former lease. On April 4,
1924, the plaintiffs brought the present action for damages alleged to have been suffered by
reason of the defendants’ breach of contract.

Article 1297: Bert Osmena & Associates vs. Court of Appeals and Sps. Pedro Quimbo and
Leonadiza Quimbo G.R. No. L-56545 January 28, 1983

Facts: On June 3, 1971, a “Contract of Sale” over Lots 1 and 2, Block I, Phase II of the Clarita
Subdivision, Cebu City was executed in favor of the Quimbo spouses. The sellers were petitioner
company, developer of the subdivision, and Carmen and Helena Siguenza, owners of the
property, represented by petitioner. Antonio V. Osmeña signed the contract on behalf of the
company.

Issue: Whether or not the new contract was validly executed.

Ruling: The Honorable Court of Appeals seriously erred in not having considered the contract as
having been novated by virtue of the change in the subject matter or object of the contract. The
courts below seriously erred for having found petitioner to have acted fraudulently where there is
no evidence to support such a finding.
Article 1299: U.S vs. Francisco Bautista, Et. Al. G.R. No. L-2189 November 3, 1906

Facts: In 1903 a junta was organized and a conspiracy entered into by a number of Filipinos in
Hongkong, for the purpose of overthrowing the government of the United States in the
Philippine Islands by force of arms and establishing a new government.

Issue: Whether or not the accused are guilty of conspiracy?

Ruling: Judgment for Bautista and Puzon CONFIRMED. Judgment for de Guzman
REVERSED. Yes, Bautista and Puzon are guilty of conspiracy. Bautista was fully aware of the
purposes of the meetings he participated in, and even gave an assurance to the chief of military
forces that he is making the necessary preparations. Puzon voluntarily accepted his appointment
and in doing so assumed all the obligations implied by such acceptance. This may be considered
as an evidence of the criminal connection of the accused with the conspiracy.

Article 1303: Malayan Insurance Co., Inc. vs. Rodelio Alberto and Enrico Alberto Reyes
G.R. No. 194320 : February 01, 2012

Facts: At around 5 o’clock in the morning of December 17, 1995, an accident occurred at the
corner of EDSA and Ayala Avenue, Makati City, involving four (4) vehicles, to wit: (1) a Nissan
Bus operated by Aladdin Transit with plate number NYS 381; (2) an Isuzu Tanker with plate
number PLR 684; (3) a Fuzo Cargo Truck with plate number PDL 297; and (4) a Mitsubishi
Galant with plate number TLM 732.

Issue: In its Memorandum dated June 27, 2011 raised by Malayan Insurance were sum up to (1)
the admissibility of the police report; (2) the sufficiency of the evidence to support a claim for
gross negligence; and (3) the validity of subrogation in the instant case

Ruling: We have held that payment by the insurer to the insured operates as an equitable
assignment to the insurer of all the remedies that the insured may have against the third party
whose negligence or wrongful act caused the loss. The right of subrogation is not dependent
upon, nor does it grow out of, any privity of contract.
Article 1305: Ong Yiu vs. CA (91 SCRA 223) G.R. No. L-40597 June 29, 1979

Facts: On August 26, 1967, petitioner was a fare paying passenger of respondent Philippine Air
Lines, Inc. (PAL), on board Flight No. 463-R, from Mactan Cebu, bound for Butuan City. He
was scheduled to attend the trial of Civil Case No. 1005 and Spec. Procs. No. 1125 in the Court
of First Instance, Branch II, thereat, set for hearing on August 28-31, 1967. As a passenger, he
checked in one piece of luggage, a blue “maleta” for which he was issued Claim Check No.
2106-R (Exh. “A”). The plane left Mactan Airport, Cebu, at about 1:00 o’clock P.M., and arrived
at Bancasi airport, Butuan City, at past 2:00 o’clock P.M., of the same day.

Issue: Whether or not CA committed a grave error when it limited PAL’s carriage liability to the
amount of P100.00 as stipulate at the back of the ticket.

Ruling: Petitioner is neither entitled to exemplary damages. In contracts, as provided for in

Article 2232 of the Civil Code, exemplary damages can be granted if the defendant acted in a
wanton, fraudulent, reckless, oppressive, or malevolent manner, which has not been proven in
this case.

Article 1306: Cui vs Arellano University 2 SCRA 205, May 30, 1961

Facts: Emeritio Cui was granted scholarship by the defendant university on scholarship merit as
a student of the College of Law. Stipulated in the contract for the scholarship grant is the
following: “In consideration of the scholarship granted to me by the University, I hereby waive
my right to transfer to another school without having refunded to the University (defendant) the
equivalent of my scholarship cash.”

Issue: Whether or not the stipulation on waiver of right to transfer without having refunded the
scholarship is void.

Ruling: Yes. The stipulation contravenes both moral and public policy. Scholarship grants are
not for propaganda purposes but are awards for merits.
Article 1307: Vicente Perez vs. Eugenio Pomar G.R. No. L-1299 November 16, 1903.

Facts: On December 8, 1901 Vicente Perez came to an agreement with Eugenio Pomar as an
English interpreter which is not a free service. Perez ask for the payment for the service that he
made to Pomar but the later did not do his part to pay Perez for the service that made to him

Issues: Should Pomar need to pay the interpretation made by Perez?

Ruling: Yes, he should pay the service of Pomar because it is not a gratuitous one and it is
under the innominate contract of facio ut des which is I do that you give.

Artcile 1309: Mindanao Portland Cement Corporation vs. Mc Donough Construction

Company of Florida G.R. No. L-23390 April 24,1967

Facts: February 13, 1962, Mindanao Portland Cement Corporation & respondent Mc Donough
Construction Company of Florida USA executed a contract for the construction by the
respondent for the petitioner of a dry portland cement plan at Iligan city.

Issue: Whether or not disputes arises between parties should be subjected to arbitration.

Ruling: Yes,since there obtain a written provision for arbitration as well as failure on
respondent’s part to comply therewith, the court quo rightly ordered the parties to proceed to
arbitration in accordance with the terms of the agreement (sec. 6, R.A. 876). respondent’s
arguments touching upon the merits of the dispute are improperly raised herein. They should be
addressed to the arbitrators. This proceeding is merely a summary remedy to enforce the
agreement to arbitrate.
Article 1311: Everett Steamship Corporation vs. Court of Appeals

FACTS
Private respondent imported 3 crates of bus spare parts marked as MARCO C/No. 12,MARCO
C/No. 13 and MARCO C/No. 14, from its supplier, Maruman Trading Company,Ltd. (Maruman
Trading), a foreign corporation based in Inazawa, Aichi, Japan. The crates were shipped from
Nagoya, Japan to Manila on board “ADELFAEVERETTE,” a vessel owned by petitioner’s
principal, Everett Orient Lines. Upon arrival at the port of Manila, it was discovered that the
crate marked MARCO C/No. 14 was missing. Privaterespondent claim upon petitioner for the
value of the lost cargo amounting to One Million Five Hundred Fifty Two Thousand Five
Hundred (Y1, 552,500.00) Yen, theamount shown in an Invoice No. MTM-941, dated November
14, 1991. However,petitioner offered to pay only One Hundred Thousand (Y100,000.00) Yen,
the maximum amount stipulated under Clause 18 of the covering bill of lading which limits the
liability of petitioner. Private respondent rejected the offer and thereafter instituted a suit for
collection. The trial court rendered a decision in favour of the private respondents and this was
affirmed by the Court of Appeal.

ISSUE
Is private respondent, as consignee, who is not a signatory to the bill of lading bound by the
stipulations thereof.

RULING
Yes. The consignee who is not a signatory to the contract of carriage between the shipper and the
carrier, the consignee can still be bound by the contract.
The next issue to be resolved is whether or not private respondent, as consignee, who is not a
signatory to the bill of lading is bound by the stipulations thereof. Again, in Sea-land Service,
Inc. vs. Intermediate Appellate Court (Supra), we held that even in the consignee between the
shipper and the carrier, the consignee can still be bound by the contract. Speaking through Mr.
Chief Justice Narvasa, we ruled: “To begin with, there is no question of the right, in the
principle, of a consignee in a bill of lading to recover from the carrier or shipper for loss of, or
damage to goods being transported under the said bill, although that document may have been-as
in practice it oftentimes is-drawn up only by the consignor and the carrier without the
intervention of the consignee..
Article 1314: So Ping Bun vs Court of Appeals 314 SCRA 752, September 21, 1999
Ponente: J. Quisimbing
FACTS
Tek Hua Trading Co. entered into lease agreement with the lessor Dee C. Chuan and Sons Inc.
(DCCSI). When Tek Hua Trading Co. was later dissolved and the original members built Tek
Hua Trading Corp. The grandson of the partners named So Ping Bun, after the death of his
grandfather, continued occupying the warehouse for his own textile business.In a letter to
petitioner, the owner of Tek Hua Trading Corp. informed the petitioner to vacate the warehouse.
Petitioner refused and requested formal contracts of lease with DCCSI to which it acceded and a
new lease of contract in favor of Trendsetter was executed. Tek Hua Enterprises Corp. then
petitioned the court for injuction, nullification of the lease contract between DCCSI and So Ping
Bun and damages, to which the Regional Trial Court of Manila Branch 35 granted and was
affirmed by the Court of Appeals.

ISSUE
Whether or not So Ping Bun acted as intermeddler in violation of Article 1314 of the New Civil
Code.

RULING
Yes.Damage is the loss, hurt or harm which results from injury and damages are the recompense
or compensation for the damage suffered.
A duty which the law of torts is concerned with is respect for the property of others, and a cause
of action ex delicto may be predicated upon unlawful interference by one person of the
enjoyment by the other of his private property. This may pertain to a situation where a third
person induces a party to renege on or violate his undertaking under a contract. Such is a
violation of Article 1314 which states:
Article 1315: Pilar Gil Vda. De Murciano vs. The Auditor General, Et. Al.,
Case Digest:
G.R. No. L-11744 May 28, 1958
PILAR GIL VDA. DE MURCIANO, represented in this case by her attorney-in-fact,
CARLOS RODRIGUEZ,petitioner,vs. THE AUDITOR GENERAL, ET AL., respondents.
Mariano C. Omeña for petitioner.
Office of the Solicitor General Ambrosio Padilla and Solicitor Sumilang V. Bernardo for the
respondent Auditor General.
REYES, J.B.L., J.:

Facts:
This is a case where the property in question was occupied and utilized from May 1, 1949 to
October 8, 1949, by the Artillery Firing Group of the Philippine Ground Force, Armed Forces of
the Philippines. On July 27, 1950 forwarded to petitioner for her signature a quitclaim agreement
whereby she was to be paid the amount of P15,067.31 representing “complete payment of rentals
for the entire period of occupancy from 1 May 1948 to 8 October 1949 at the rate of P6.00 per
hectare per month”, with the understanding that upon payment of said amount, “the Armed
Forces of the Philippines is released from all claims which you may have against it for the
occupancy of the land upon payment of the above-mentioned rentals”. A new quitclaim
agreement of exactly the same tenor as the first was on April 4, 1951, prepared and signed by
petitioner, through her attorney-in-fact, and again returned to the Office of the Chief of
Engineers of the Armed Forces of the Philippines at Camp Murphy, but before it could be signed
by Lt. Col. Littaua of the Philippine Service Command in representation of the Republic of the
Philippines, the Armed Forces of the Philippines was reorganized and the Philippine Service
Command abolished.

Issues:
Whether or not the Auditor General is right in making a decision on denying the payment for the
balance of the back rental of the land they used which belongs to Pilar.

Ruling: No, he is not right because the land that they used is a private property which belongs to
Pilar and they supposed to pay a monthly rental on it which he must approved the payment.
For the above reasons, we hold that petitioner is entitled to, and should be paid, the balance of
her claim against the Republic of the Philippines in the amount of P8,067.31. She cannot,
however, recover interests on this amount from May 1, 1948, as prayed for by her. The rule is
that a debtor is considered to incur in delay only from the time the obligee judicially or
extrajudicially demands the fulfillment of the obligation (Art. 1169, New Civil Code), and it is
only from the time of delay that interest is recoverable (Art. 2209, supra). There being no
evidence showing that petitioner made demands upon the Armed Forces of the Philippines for
the payment of the balance of her claim prior to her filing thereof with the Auditor General on
June 26, 1956, she must be considered to have made demand for its payment only on this date.
Therefore, petitioner is entitled to the payment of interests only from June 26, 1956.
The decision appealed from is reversed, and the Auditor General is ordered to approve payment
for petitioner the amount of P8,067.31, with legal interests thereon from June 26, 1956 until full
payment. Cost de oficio. So ordered.

Article 1317: Rallos vs. Felix Go Chan & Realty Corp., Munoz-Palma
March 25, 2016
Plaintiff: Ramon Rallos

Defendant: Felix Go Chan & Sons Realty Corporation

Facts: Concepcion and Gerundia Rallos were sisters and registered co-owners of a parcel of land
known as Lot No. 5983 of the Cadastral Survey of Cebu covered by Transfer Certificate of Title
No. 11116 of the Registry of Cebu.They executed a special power of attorney in favor of their
brother, Simeon Rallos, authorizing him to sell such land for and in their behalf. After
Concepcion died, Simeon Rallos sold the undivided shares of his sisters Concepcion and
Gerundia to Felix Go Chan & Sons Realty Corporation for the sum of P10,686.90. New TCTs
were issued to the latter. Petitioner Ramon Rallos, administrator of the Intestate Estate of
Concepcion filed a complaint praying (1) that the sale of the undivided share of the deceased
Concepcion Rallos in lot 5983 be unenforceable, and said share be reconveyed to her estate; (2)
that the Certificate of ‘title issued in the name of Felix Go Chan & Sons Realty Corporation be
cancelled and another title be issuedin the names of the corporation and the “Intestate estate of
Concepcion Rallos” in equal undivided and (3) that plaintiff be indemnified by way of attorney’s
fees and payment of costs of suit.

Issues:
1) WON sale was valid although it was executed after the death of the principal, Concepcion.
2) WON sale fell within the exception to the general rule that death extinguishes the authority of
the agent
3) WON agent’s knowledge of the principal’s death is a material factor.
4) WON petitioner must suffer the consequence of failing to annotate a notice of death in the title
(thus there was good faith on the part of the Respondent vendee)

5) WON good faith on the part of the respondent in this case should be treated parallel to that of
an

RULING
Sale of land was null and void insofar as the one-half pro-indiviso share of Concepcion Rallos
Ordered the issuance of new TCTs to respondent corporation and the estate of Concepcion in
theproportion of ½ share each pro-indiviso and the payment of attorney’s fees and cost of
litigation Respondent filed cross claim against Simon Rallos(*Simon and Gerundia died during
pendency of case) juan T. Borromeo, administrator of the Estate of Simeon Rallos was ordered
to pay defendant the price of the ½ share of the land (P5,343.45) plus attorney’s fees [Borromeo
filed a third party complaint against Josefina Rallos, special administratrix of the Estate of
Gerundia] Dismissed without prejudice to filing either a complaint against the regular
administrator of the Estate of Gerundia Rallos or a claim in the Intestate-Estate of Cerundia
Rallos, covering the same subject-matter

CA: CFI Decision reversed, upheld the sale of Concepcion’s share.MR: denied.innocent
purchaser for a value of a land.

Chapter 2 – Essential Requisites of Contracts

Article 1319: Silverio Q. Cornejo vs. Manuel B. Calupitan, D.B. Castaneda, and Eustacio
Barrera
G.R. No. L-2342 October 27, 1950
Silverio Q. Cornejo – Plaintiff-Appellant vs.
Manuel B. Calupitan, D.B. Castaneda, and Eustacio Barrera – Defendant-Appellees

FACTS
On January 1945- owner of a parcel of land in the barrio of Mayatobo, Candelaria, Tayabas, an
area of 110.9125 hectares authorized his co-defendants Castaneda, Eustacio Barrera, real estate
broker operating in manila to sell the said parcel.;January 4, 1945, defendant Calupitan accepted
the offer made by the plaintiff Cornejo, at the price of P650,000 in Japanese military notes;
January 6, 1945, Cornejo delivered only P65,000 to defendant broker Castaneda & Barrera to
deliver for Calupitan and the balance to paid on January 25, 1945. Calupitan wrote out a letter
receipt of acceptance specifying the terms of payment of the balance approving the stipulated
date on or before January 25, 1945. January 22, 1945, After supposedly failing to deliver the
balance of P585,000, Cornejo deposited the sum with the clerk of court, securing corresponding
receipt and filed the corresponding complain against Calupitan and the two real estate brokers for
specific performance and for payment of damages.
The trial court absolve the defendant-appelle and held that Cornejo repudiated the original
agreement by proposing money be reduced from P70,000 to P65,000 and the balance adjusted
from 19th of January to 25, 1945.

ISSUE
Whether or not that the condition being offered to the plaintiff by the appellant is Justifiable in
terms of the status of the situation or the en-viewed coming events of war.

RULING
Yes, its up to the prospective purchaser to accept or reject it, but he should return the value of the
said amount P65,000 Japanese notes at the time to the plaintiff. Exhibit B between Cornejo and
Calupitan had been abandoned and rendered void by Cornejo himself, and that as to new
proposition made by Cornejo, there was no meeting of minds of the parties for it was not
accepted entirely by Calupitan, consequently the contract of sale of the land in question was not
perfected and so Calupitan may not be compelled to convey said land to plaintiff-appllant.
Calupitan is ordered to return to the plaintiff the value of the P65,000 Japanese war notes he
received, which value is to be ascertained according to the ballantyne schedule as of January 6,
1945 in Manila. Said value is hereby fixed at P541.66 with legal interest from January 6, 1945
until paid. The decision of the trial court was affirmed.
Article 1330: Centenera vs Palicio 29 Phil. 470, February 12, 1915

FACTS
Centera was the defendant in foreclosure proceedings instituted by Garcia upon a mortgage of
certain real estate in the Province of Ambos Camarines. Judgement for foreclosure was rendered
in favor of Garcia for the amount of Php 18,000, leaving an unsatisfied balance due him by
Centera of Php6,000. Thereafter, the parties executed a written agreement to settle their issues.
Stipulated in the agreement is the right of Centera to retrieve the property.
Seven months thereafter, Centera seek to exercise the right to repurchase the property as
stipulated in the contract. However, Garcia contends that such right is only limited to one month
from the date of the contract and not four years as stipulated in the contract.
The Court of First Instance of Ambos Camarines ruled in favor of Garcia. Hence this petition for
the specific performance of a contract for sale of the land.

ISSUE
Whether or not consent given by mistake, if the mistake was both overlooked by the parties,
makes the contract voidable.
Whether or not preponderance of evidence is enough to annul a contract on the ground of lack of
valid consent.

RULING
No. Where one is guilty of negligence in not informing himself as to the contents of a written
contract, and signs or accepts it with full opportunity of informing himself as to its contents, he
cannot avoid liability in the ground that he was mistaken as to its contents in the absence of fraud
or misrepresentation. This rule however should not be applied so as to deny relief in a case where
there has been a mutual mistake as to the contents of a written contract setting forth the terms of
an oral contract previously entered into, and it appears that the mistake resulted from an omission
by the copyist which was negligently overlooked by both parties.
No. The amount of evidence necessary to sustain a prayer for relief is always more than a mere
preponderance and must be clear, convincing and satisfactory.
Article 1331: Andrea Dumasug vs. Felix Modelo
Case Digest:
G.R. No. L-10462 March 16, 1916
ANDREA DUMASUG, plaintiff -appellee,
vs.FELIX MODELO, defendant-appellant.
Fortunato Borromeo Veloso for appellant.
Tomas Alonso for appellee.
TORRES, J.:

FACTS
On June 17, 1912, counsel for Andrea Dumasug filed a written complaint in the Court of First
Instance of Cebu, in which he alleged that about the month of November, 1911, defendant
persuaded plaintiff to sign a document by falsely and maliciously making her believe that it
contained an engagement on plaintiff’s part to pay defendant a certain sum of money as
expresses occasioned the latter by reason of a lawsuit in which plaintiff Dumasug was one of the
parties and was protected and aided by defendant; that this document, plaintiff, who does not
know how to write, signed by affixing her mark thereto, believing in good faith that defendant
had told her the truth and that said document referred to the expenses incurred by defendant; but
that three months after the execution of said document, defendant took possession of a carabao
belonging to plaintiff and also of two parcels of land, likewise belonging to her, situated in the
barrio of Katang, pueblo of Argao, Cebu, the area and boundaries of which are specified in the
complaint, and notified plaintiff that she had conveyed to him by absolute sale said parcels of
land and the plow carabao; that in spite of plaintiff’s opposition and protests, defendant took
possession of said property and, up to the date of the complaint, continued to hold possession
thereof and to enjoy the products of the lands and of the labor of the carabao; and that, by reason
of such acts, defendant had caused loss and damage to plaintiff in the sum of P1,000. Said
counsel therefore prayed the court to render judgment by declaring null and void and of no value
whatever the alleged contract of purchase and sale of the carabao and the two parcels of land
described in the complaint, to order defendant to restore to plaintiff said work animal and lands,
and, besides, to pay her the sum of P1,000 for the loss and damage caused her, in addition to the
costs of the suit.
ISSUE
Whether or not the instrument of purchase and sale of two parcels of land and a plow carabao is
null and void?
Ruling: Yes, it is null and void. It is, then, perfectly evident that the document Exhibit 1, by
means of which defendant made himself the owner of the properties in question is not the
instrument of debt which Andrea Dumasug had signed, and if it is the same one its contents were
not duly and faithfully explained to plaintiff in the act of its execution. In either case, the consent
said to have been given by Andrea Dumasug in said document Exhibit 1 is null and void, as it
was given by mistake (arts. 1265 and 1266, Civil Code). This error invalidates the contract,
because it goes to the very substance of the thing which was the subject matter of said contract,
for, had the maker thereof truly understood the contents of said document, she would neither
have accepted nor authenticated it by her mark.

This case is an example of Mistake of Fact which is Mistake as to the Nature of the Contract. If
the mistake refers to the nature of the contract, the error or mistake goes to the essence thereof.
This may invalidate the contract. In this case Andrea Dumasug affixed her thumb mark on the
document that presented to her believing that it was a deed of mortgaged and not a deed of sale
therefore her consent vitiated the contract.

Article 1337: Vales vs. Villa (35 Phil. 769)

G.R. No. 10028 December 16, 1916
JOSE VALES, plaintiff-appellee,
vs.SIMEON A. VILLA, FELIPE S. SILVESTRE, and MARIA GUIA GARCIA, defendants-
appellants.
Lawrence, Ross and Block and Manuel Torres for appellants.
Haussermann, Cohn and Fisher and Orense and Gonzalez Diez for appellee.
MORELAND, J.:

FACTS
This is an action to set aside certain transfers of real estate from the plaintiff to one of the
defendants and to require that defendant to recover by good and sufficient conveyance the title to
such properties; to refund to the plaintiff a certain sum paid by plaintiff for the recovery of
certain other real estate; and for an accounting by the defendants of the rents, issues and profits
of certain real estate during a certain period; and for P25,000 damages.
It appears that the defendant Felipa Silvestre is a widow, 70 years of age, and is the aunt of the
defendant Maria Guia Garcia, wife of the defendant Simeon A. Villa.

ISSUE
Whether or not it is valid to annul a series of real estate transactions on the ground of duress.

RULING
The same may be said with greater force of a case where a person’s own voluntary act,
uninfluenced by another, has put him in a disadvantageous position — a position which another
may unjustly make use of to his injury. The failure to reduce a contract to writing, or to have
witnesses present when a verbal agreement is made, or to record an instrument, or to exclude
from the operation of its terms things verbally agreed to be excluded, etc., may place a person in
a disadvantageous position with respect to another; and the demand that he pay to secure his
extrication is not illegal, and a payment made pursuant to such demand is not necessarily
voidable. He pays for his lack of foresight. While the demand may be reprehensible morally, it is
not illegal’ and of itself is not ground for relief.

Article 1339: Mariano Tuason vs. Crisanto Marquez

Mariano Tuason vs. Crisanto Marquez
March 20, 2016
Case Digest:
G.R. No. L-20659 November 3, 1923
Mariano S. Tuason – plaintiff – appellant
vs.Crisanto Marquez – defendant – appellee

Facts:
On March 5, 1921, Crisanto C. Marquez, owner of the electric light plant of Lucena, Tayabas
agreed to franchised with Tuason and to pay Marquez a total of P14,400; P2,400 within the sixty
days and remainder , P12,000 within a year. The 1st installment was paid subsequent to the
sixty-day period; 2nd installment has not been paid. During March 20, 1921 to July 19, 1922,
Consolidated Electric Light Plant, once in possession by Tuason. The property was sold to
Gregorio Marquez, brother of Crisanto Marquez at P5,501.57. While on 1913 to 1914, a
franchise for thirty-five years was granted the Lucena Electric Company. The rights of this
Company passed to Crisanto Marquez at sheriff’s sale on September 10,1919. Marquez, became
disgusted with the business result on February 28, 1921, prior to the accomplishment of the
contract, he announced to the Public Utility Commissioner his intention to give up the franchise.
Tuason permitted to operate the company pursuant to a special license which was to continue
until they obtained a new franchised granted by Republic Utility Commissioner with certain
conditions amounting to the renovation of the entire plant. Tuason conceive the idea of bringing
active against Marques for rescission of the contract. The plaintiff filed complain in CFI Manila
against Crisanto Marquez for P37,400. The defendant asked for a dismissal action and an
allowance of P12,654.50 from plaintiff.

ISSUE
Whether or not the defendant is liable for the damages due to honorable disclosure of fact
pertaining to the renovation of plant as a requisite after the franchise has been granted..

RULING
No, it should emphasized that the contract in making mention of the property, the Electric Light
Company merely renewed a previous inventory of the property. The franchise, therefore, was not
determining cause of purchase. Indeed the franchise was then in force and either party could
easily have ascertained its status by applying at the office of the Public Utility Commissioner.
The innocent non-disclosure of a fact does not affect the formation of the contract or operate to
discharge the parties from this agreement.

Article 1341: Songco vs. Sellner (37 Phil. 254) March 25, 2016

FACTS
Sellner bought the uncut sugarcane drop of Songco still standing in the sugarcane field on
Songco’s estimation that it would produce 3,000 piculs of sugar. It turned out, it produced only
2,017 piculs of sugar.

ISSUES
Whether the estimation made by Songco is fraudulent as to constitute fraud as to invalidate the
sale.

RULING
The court found the representation made by Songco as a mere expression of an opinion.
Article 1343: Luis Aisain vs Benjamin Jalandoni
Luis Aisain, Appellants
Benjamin Jalandoni; Appellee

FACTS
The parties agreed upon the sale of the land in question, they had in mind chiefly the area and
quality of the land, the subject of the contract, as will be seen from the letter of Asiain dated May
6, 1920, purchase of land of Mr. Luis Asiain and his wife Maria Cadenas, by B. Jalandoni,
containing 25 hectares more or less of land bounded by property of the purchaser, with its
corresponding crop, estimated at 2,000 piculs, the total value of which is P55,000.00. The price
is to be paid by paying P30,000.00 at the signing of the document, and P25,000.00 within one
year with interest at the rate of 10%.” In accordance with the foregoing memorandum the deed of
sale was executed in the City of Iloilo.

ISSUE
Whether or not the seller and buyer misrepresented each other or committed an error?

RULING
The judgment was affirmed on the ground that both parties had acted by a mutual mistake. 2)
The vendor undertook to deliver to the vendee a parcel of land some 25 hectares in area and of
such a quality as to be able to produce 2,000 piculs of centrifugal sugar. The vendee, in turn,
agreed to buy said parcel of land with the understanding that it contained that area and was of the
quality guaranteed by the vendor. Inasmuch as the land had neither the area nor the quality the
vendor had assured the vendee it had, it is clear the latter was entitled to rescind the contract,
upon the strength of the authorities cited in the opinion of the court. We believe that Jalandoni
was entitled to rescind that contract, inasmuch as the vendor did not deliver a parcel of land of
the area and quality stipulated in the contract. 3) the judgment appealed from is reversed, and it
is held that the contract between the parties is valid and binding upon them. Wherefore, the
defendants are absolved from the complaint

.
Article 1346: Mendoza vs Ozamiz 376 SCRA 483 (2002)

FACTS
Petitioners allege that they are the owners of three parcels of land in Cebu City, the Deed of Sale
thereto dated April 28, 1989 was executed in their favor by Carmen Ozamiz for and in
consideration of the sum of P1,040,000.00.
However, Carmen Ozamiz was, starting on July 1987, allegedly became an invalid and “could
no longer take care of herself or manage her properties by reason of her failing health, weak
,mind and absent-mindedness” as alleged in the special proceeding for guardianship filed by her
nephews 0n January 15, 1991.
The guardianship was granted and in the course of the inventory of Carmen’s properties, the
properties covered by the Deed of Sale were included as properties of Carmen.
Hence, the petitioners filed a suit for quieting of titles.
The lower court rendered judgment in favor of the petitioner. On appeal, however, the decision
was reversed and the Deed of Sale considered to be simulated since the petitioners failed to
establish payment and at the time of the execution of the contract, the mental faculties of Carmen
were already seriously impaired.
Hence, the petition for review on certiorari.

ISSUE
Whether or not the Court of Appeals erred in ruling that the Deed of Sale was a simulated
contract.

RULING
No. Simulation is defined as the declaration of a fictitious will, deliberately made by agreement
of the parties, in order to produce, for the purposes of deception, the appearances of a juridical
act which does not exist or is different from what that which was really executed.The requisites
of simulation are: (a) an outward declaration of will different from the will of the parties; (b) the
false appearance must have been intended by mutual agreement; and (c) the purpose is to deceive
third persons. None of these were clearly shown to exist in the case at bar.
Article 1347: Blas vs. Santos
Case Digest
G.R. No. L-14070 March 29, 1961
MARIA GERVACIO BLAS, MANUEL GERVACIO BLAS, LEONCIO GERVACIO BLAS
and LOIDA GERVACIO BLAS, Plaintiffs-Appellants,vs.ROSALINA SANTOS, in her capacity
as Special Administratrix of the Estate of the deceased MAXIMA SANTOS VDA. DE BLAS, in
Sp. Proc. No. 2524, Court of First Instance of Rizal, defendants-appellants. MARTA
GERVACIO BLAS and DR. JOSE CHIVI, Defendants-Appellants.

FACTS:
This action was instituted by plaintiffs against the administration of the estate of Maxima
Santos, to secure a judicial declaration that one-half of the properties left by Maxima Santos
Vda. de Blas, the greater bulk of which are set forth and described in the project of partition
presented in the proceedings for the administration of the estate of the deceased Simeon Blas,
had been promised by the deceased Maxima Santos to be delivered upon her death and in her
will to the plaintiffs, and requesting that the said properties so promised be adjudicated to the
plaintiffs. The complaint also prays for actual damages in the amount of P50,000. The alleged
promise of the deceased Maxima Santos is contained in a document executed by Maxima Santos
on December 26, 1936 attached to the complaint as Annex “H” and introduced at the trial as
Exhibit “A”. The complaint also alleges that the plaintiffs are entitled to inherit certain properties
enumerated in paragraph 3 thereof, situated in Malabon, Rizal and Obando, Bulacan, but which
properties have already been included in the inventory of the estate of the deceased Simeon Blas
and evidently partitioned and conveyed to his heirs in the proceedings for the administration of
his estate. Spouses Simeon Blas and Marta Cruz have three children they also have
grandchildren. One year after Marta Cruz died, Blas married Maxima Santos but they don’t have
children and the properties that he and his former wife acquired during the first marriage were
not liquidated. Simeon Blas executed a will disposing half of his properties in favor of Maxima
the other half for payment of debts, Blas also named a few devisees and legatees therein. In lieu
of this, Maxima executed a document whereby she intimated that she understands the will of her
husband; that she promises that she’ll be giving, upon her death, one-half of the properties she’ll
be acquiring to the heirs and legatees named in the will of his husband; that she can select or
choose any of them depending upon the respect, service, and treatment accorded to her by said
heirs. On 1937 Simeon Blas died while Maxima died on 1956 and Rosalina Santos became
administrator of her estate. In the same year, Maria Gervacio Blas, child of Simeon Blas in his
first marriage, together with three other grandchildren of Simeon Blas (heirs of Simeon Blas),
learned that Maxima did not fulfill her promise as it was learned that Maxima only disposed not
even one-tenth of the properties she acquired from Simeon Blas. The heirs are now contending
that they did not partition Simeon Blas’ property precisely because Maxima promised that they’ll
be receiving properties upon her death.
ISSUE:
Whether or not the heirs can acquire the properties that Maxima promised with them.

RULING:
Yes, they can acquire the properties that Maxima promised with them because it was stated in
Art. 1347 that “No contract may be entered into upon future inheritance except in cases expressly
authorized by law.”. In this case the contract was authorized by law because the promised made
by Maxima to their heirs before she died is a valid reason and it should be enforceable upon her
death and her heirs can now acquire the succession of the properties in issue.

Article 1349: H.C Liebenow vs. The Philippine Vegetable Oil Company G.R. No. L-13463
H.C. Liebenow, – plaintiff-appellant vs. The Phil. Vegetable Oil Company- Defendant-
appellee

FACTS
a.) March 17, 1914, The contract under which plaintiff rendered the service to which reference
has been made is expressed in a letter written by the Phil. Vegetable Oil Company to Liebenow.
b.) The plaintiff entered upon the discharged of his duties as superintendent of the factory on
April 1, 1914 until August 1, 1916 and with salary from P500 to P750.
c.) After the employment ceased, the defendant continued to deliver to plaintiff each month until
the total sum of P4,500.
d.) The plaintiff alleges by his skill and ability the defendants plant was made much more
productive and its profit increased.
e.) The plaintiff, contents that he is entitled to a bonus to be fixed by the court as a reasonable
participation in the increased profits of the factory under his care, taking into consideration his
technical skill and the greater output therefrom.
f.) He suggest, as the lowest proper minimum that he should be awarded an amount sufficiently
to raise his salary for the whole period to the sum of P12,000 per anum, the amount supposedly
paid to his predecessor.
g.) Subpoena has been issued duces tecum which the plaintiff caused to be issued a few days
prior to the hearing in CFI.
h.) After the defendant move the court to vacate this subpoena in the ground that the plaintiff was
not entitled to require the production of the documents called for.
i.) The court reserved the matter for later determination and ruled that the evidence which the
plantiff sought to elicit was irrelevant. the witness was excused from producing the papers
mentioned in the subpoena duces tecum and the plaintiff duly excepted.

ISSUE
Whether or not that the subpoena duces tecum is needed to determine to justify the awarding of
the questioned amount of claim as bonus of the plaintiff from the defendant.

RULING
No, while we do not wish to be understood as attempting to lay down any hard and fast rule upon
such a matter, we merely suggest that it is an abuse of legal process to use subpoena “duces
tecum” to produce court material which cannot be properly utilized by the court in determining
the issues of the case; and in cases of this kind the litigant should be required to resort to some
other procedure in order properly to place before the court the evidence upon which the case
should be decided. The judgment is affirmed with cost.