University of Santo Tomas

Faculty of Civil Law

Obligations & Contracts- 2nd Term, AY 2021-2022
(1I)

I. Course Code & Description:

Obligations and Contracts (OBLI) – 5 units

An in-depth study of the nature, kinds, effects and extinguishment of obligations. It also covers
contracts in general, their requisites, forms and interpretation; the defective contracts, including quasi-
contracts and natural obligations; and the principle of laches and estoppel. (Book IV of the New Civil Code –
R.A. 386 as amended

II. Course Classification: Core; Bar Subject

III. Prerequisite: Persons & Family Relations

IV. Intended Outcome:

1. At the end of the course, students are expected to be knowledge on basic concepts on nature,
kinds, effects and extinguishment of obligations. It also covers contracts in general, their
requisites, forms and interpretation; the defective contracts, including quasi-contracts and natural
obligations; and the principle of laches and estoppel.

2. Understand the application of these concepts and legal provision as applied to actual cases
decided by the Supreme Court.
V. Formula for Computation of Grades:

Class Standing 25% - Recitation; submission of assignment/project

Preliminary Exam Score 35%

Final Exam Score 40%

TOTAL 100%

VI. Conduct of Class – Enhanced Virtual Mode of Instruction

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PART I- OBLIGATIONS

I. Definition

II. Elements of an Obligation

 Makati Stock Exchange v. Campos G.R. NO. 138814, April 16, 2009
 Ang Yu Asuncion vs. CA, G.R. No. 109125, December 2, 1994.

III. Kinds of Prestations

IV. Classification of Obligations - As To Basis And Enforceability

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 Natural Obligations and Civil Obligations

V. Sources of Obligations

a) OBLIGATIONS ARISING FROM LAW

 Pelayo v. Lauron 12 Phil. 453

 Dela Cruz vs Northern Theatrical Ent. (G.R. No. L-7089  August 31, 1954)

b) OBLIGATIONS ARISING FROM CONTRACTS

 Metropolitan Bank And Trust Company Vs. Ana Grace Rosales And Yo Yuk To, G.R. No. 183204,
January 13, 2014
 Meralco vs Ramoy, G.R. NO. 158911, March 4, 2008
 PSBA v CA, G.R. No. 84698, February 4, 1992
 Macasaet vs. COA, G.R. No. 83748, 12 May 1989

c) OBLIGATIONS ARISING FROM QUASI CONTRACT

 Locsin II vs. Mekeni Food Corporation, G.R. No. 192105, December 9, 2013

d) OBLIGATIONS ARISING FROM DELICT

 Dy vs. People, G.R. No. 189081, 10 August 2016

 Pilipinas Petroleum Corporation vs. Duque, GR No. 216467, February 15, 2017

e) OBLIGATIONS ARISING FROM QUASI-DELICT

 CCBPI vs. Meñez, G.R. No. 209906, November 22, 2017

 Dela Llana vs. Biong, G.R. No. 182356, December 4, 2013
 Spouses Abrogar vs. Cosmos Bottling Corporation, G.R. No. 164749, March 15, 2017

VI. Nature and Effects of Obligation

A. OBLIGATION TO GIVE A DETERMINATE THING vs A GENERIC THING

 Gaisano Cagayan, Inc. Vs Insurance Company Of North America, G.R. No. 147839, June
8, 2006

B. FAILURE OF PERFORMANCE - ART. 1169 , ART 1170

 Telefast Vs. Castro, G.R. NO. 73867, February 29, 1988

 Tongson v Emergency Pawnshop, G.R. No. 167874, January 15, 2010
 Woodhouse v Halili, 93 Phil 526 (1953)

C. DELAY (Mora)

 General Milling vs Sps Ramos - G.R. No. 193723, July 20, 2011

 Santos Ventura Hocorma Foundation, Inc., vs. Santos, G.R. NO. 153004, November 5,
2004

 Solar Harvest vs. Davao Corrugated Carton Corp - G.R. No. 176868, July 26, 2010
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 SSS vs. Moonwalk Development - G.R. No. 73345. April 7, 1993

 Cruz vs. Gruspe – GR 191431, March 2013

 Rodrigo Rivera vs. Spouses Salvador C. Chua And Violeta S. Chua/ Spouses Salvador C.
Chua And Violeta S. Chua Vs. Rodrigo Rivera, G.R. Nos. 184458/184472. January 14,
2015

 Lorenzo Shipping vs. BJ Marthel Int’l - G.R. No. 145483. November 19, 2004

 Telefast Communications/Phil Wireless vs Castro – G.R. No. 73867 February 29, 1988

 RCBC vs. Court of Appeals - [G.R. No. 133107. March 25, 1999]

D. NEGLIGENCE

1. DEGREE OF DILIGENCE

2. FORTUITOUS EVENT

 Juntilla vs. Fontanar - G.R. No. L-45637 May 31, 1985

 NPC vs. CA - G.R. No. L-47379 May 16, 1988
 Mindex Resources vs. Morillo - G.R. No. 138123. March 12, 2002
 Metro Concast Steel vs. Allied Bank- G.R. No. 177921, December 4, 2013
 NAKPIL & SONS v. CA, G.R. NO. L-47851 April 15, 1988

E. USURIOUS TRANSACTIONS/ INTEREST

 Medel vs. CA , G.R. No. 131622. November 27, 1998

 Sun Life of Canada vs. Tan Kit - G.R. No. 183272, October 15, 2014
 Macalinao vs BPI- G.R. No. 175490; September 17, 2009
 Sps Solangon vs. Salazar -G.R. No. 125944. June 29, 2001
 Federal Builders vs. Foundation Specialist- G.R. No. 194507, September 08, 2014
 Abella v. Abella, G.R. No. 195166, July 08, 2015
 Lara’s Gifts v Midtown, GR 225433, August 28, 2019 (en banc)

VII. Kinds Of Civil Obligations

A. Pure and Conditional Obligations (Art 1179-1192)

 Tiglao vs. Manila Railroad G.R. No. L-7900.  January 12, 1956

 Javier vs. CA – G.R. No. L-48194 March 15, 1990
 Heirs of Paulino Atienza vs. Espidol - G.R. No. 180665, August 11, 2010
 Central Phil University vs CA – (G.R. No. 112127 July 17, 1995)
 Parks vs. Province of Tarlac - G.R. No. L-24190 , July 13, 1926
 Vda de Mistica vs. Naguiat - G.R. No. 137909. December 11, 2003
 Trillana vs. Quezon College - G.R. No. L-5003 . June 27, 1953
 Romero vs. Court of Appeals - G.R. No. 107207. November 23, 1995
 Osmena III vs SSS - G.R. No. 165272, September 13, 2007
 Villamar vs. Mangaoil - G.R. No. 188661 April 11, 2012
 Ayson- Simon vs. Adamos - G.R. No. L-39378 August 28, 1984
 Maglasang vs Northwestern University - G.R. No. 188986, March 20, 2013
 Mila Reyes vs. Tuparan - G.R. No. 188064, June 1, 2011
 Pagtalunan vs. Vda De Manzano- G.R. No. 147695 , September 13, 2007
 Fabrigas vs. San Francisco Del Monte Inc - G.R. No. 152346, Nov 25, 2005
 Central Bank vs. Court of Appeals - G.R. No. L-45710 October 3, 1985
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B. Obligation with a Period (Art. 1193-1198)

 San Miguel Foods vs Magtuto – GR 225007, July 25, 2019

 Solante vs. COA ,G.R. No. 207348, August 19, 2014
 Clemente vs. Republic, G.R. No. 220008, February 20, 2019

C. Alternative Obligations ( Art. 1199-1206)

D. Joint & Solidary Obligatons (Art. 1207-1222)

 Industrial Management International Dev’t Corp (IMIDC) vs. NLRC - [G.R. No. 101723. May
11, 2000]
 Ronquillo vs CA – G.R. No. L-55138 September 28, 1984
 Manlar Rice Mill vs Deyto- G.R. No. 191189 , January 29, 2014
 PNB vs, Independent Planters Association (122 SCRA 113)
 Republic Glass vs. Qua, 435 SCRA 480
 Berot v. Siapno G.R. No. 188944 , July 9, 2014
 BPI v. Fernandez G.R. No.173134, September 2, 2015
 AFPRSBS vs San Victores, G.R. No. 207586, Aug 17, 2016)

E. Obligation with a Penal Clause

 Pryce Corp. v. Pagcor, G.R. No. 157480, May 6, 2005

 Louh v. BPI, G.R. No. 225562, March 8, 2017

VIII. EXTINGUISHMENT OF OBLIGATIONS

A. Payment and Performance (Art 1232 - 1261)

Art 1234

 Intl. Hotel Corp. v. Joaquin G.R. No. 158361, April 10, 2013

Art 1235-

 Loqulellano vs. HSBC, GR 200553, Dec. 10, 2018

Art 1236-

 Arbilon v Manglangit, GR 197920, Jan. 22, 2018

Art 1238 –

 Dumaran vs LLanedo – Aug 4, 2021

Art 1240 -

 BPI vs Court of Appeals - G.R. No. 104612 May 10, 1994

 Culaba vs. CA - G.R. No. 125862. April 15, 2004
 Dela Cruz vs. Concepcion - G.R. No. 172825 , October 11, 2012

Art 1242 –

 Napocor v. Ibrahim G.R. No. 175863, February 18, 2015

Art 1245 –

 Caltex vs. IAC - G.R. No. 72703 November 13, 1992

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 Filinvest v. Phil Acetylene. GR 50449. Jan 30, 1982

 Tan Shuy vs. Sps. Maulawin, G.R. No. 190375, February 8, 2012
 Lo v. KJS Eco-Formwork (1249), October 8, 2003
 Daquel vs Sps Sotelo- Aug 4, 2021

Art 1249 -

 Tibaja vs CA, G.R. No. 100290 June 4, 1993

 Papa vs. Valencia – G.R. No. 105188 January 23, 1998
 PAL vs Court of Appeals , G.R. No. 49188, January 30, 1990;
 BPI vs Royeca, G.R. No. 176664; July 21, 2008
 Towne & City Devt. v. CA and Voluntad, July 14, 2004
 Evangelista vs. Screenex Inc. G.R. No. 211564, November 20, 2017
 Netlink v. Delmo G.R No. 160827, June 18, 2014 (1249 in relation to RA 8183)

Art 1250 –

 Filipino Pipe and Foundry vs. NAWASA – G.R. No. L-43446 May 3, 1988

Art 1253

 Marquez v. Elisan Credit G.R. No. 194642, April 6, 2015 1253

Art 1256, 1257 & 1258--

 Arzaga vs. Rumbaoa, 091 Phil 499, 26 June 1952

 Bonrostro v. Luna G.R. No. 172346, July 24, 2013
 Del Carmen v. Sabordo G.R. No. 181723, August 11, 2014
 Roman Catholic Archbishop of Malolos vs IAC ,G.R. No. 72110. Nov.16, 1990
 Spouses Rayos vs. Reyes, G.R. No. 150913. February 20, 2003
 Dalton vs. FGR Realty - G.R. No. 172577, January 19, 2011

B. Loss of the Thing Due (Art.1262 -1269)

 Comglasco Corporation v. Santos Car Check Center, G.R. No. 202989, March 25, 2015
 Iloilo Jar Corporation v. COMGLASCO, G.R. No. 219509, January 18, 2017
 Naga Telephone Co., Inc. vs. Court of Appeals, 230 SCRA 531
 Tagaytay Realty vs. Gacutan, G.R. No. 160033, July 1, 2015

C. Condonation or Remission of Debt (Art. 1270 -1274)

 Trans. Pacific Ind. vs. CA, 235 SCRA 494 (1271)

D. Confusion or Merger of Rights (Art.1275 -1277)

E. Compensation (Art. 1278 -1290)

 International Corp Bank vs IAC – G.R. No. L-69560 June 30, 1988
 Francia vs. IAC- G.R. No. L-67649 June 28, 1988
 Mondragon Personal Sales vs Sola - G.R. No. 174882 : January 21, 2013
 Montemayor vs. Millora. G.R. No. 168251 July 27, 2011
 First United v. Bayanihan, G.R. No. 164985, January 15, 2014
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F. Novation (Article 1291-1304)

 Arco Pulp v. Lim G.R. No. 206806 (1293), June 25, 2014
 Iloilo Traders Finance vs. Heirs of Soriano - G.R. No. 149683. June 16, 2003
 Ajax Marketing vs. CA, G.R. No. 118585 September 14, 1995
 PNB vs. Lilian Soriano – GR 164051, Oct. 3, 2012
 S.C. Megaworld vs. Parada - G.R. No. 183804, September 11, 2013
 Starbright Sales v Philippine Realty Corporation, G.R. No. 177936, January 18, 2012
 Franco v. Gonzales G.R. No. 59709, June 27, 2012
 Bognot v. RRI Lending G.R. No. 180144, 24 September 2014
 The Wellex Group, Inc. vs. U-Land Airlines Co., Ltd., G.R. No. 167519, January 14, 2015

PART II - CONTRACTS

1. Definition

 Cases/s:

 Robern Dev’t vs. People’s Landless Assoc -- G.R. No. 173622 , March 11, 2013

2. Freedom to Stipulate – Art 1306

 Leal vs. IAC, 1987

3. Mutuality of contracts

 Philippine Savings Bank vs. Castillo -- G.R. No. 193178, May 30, 2011
 PNB vs. Spouses Manalo, G.R. No. 174433, February 24, 2014

4. Principle of Relativity of Contracts

 Spouses Mamaril vs Boy Scout of the Phils. -- G.R. No. 179382, January 14, 2013
 Coquia vs. Fieldman Insurance -- G.R. No. L-23276      November 29, 1968
 FBDC v. Fong, G.R. No. 209370, March 25, 2015

5. Principle of “Tortious interference with contractual relations”

 Gilchrist vs. Cuddy -- G.R. No. L-9356, February 18, 1915

 Yu vs. Unisia Merchandising - G.R. No. 86683 January 21, 1993

6. Art 1315 – Consensual contracts

 CF Sharp vs Pioneer Insurance- G.R. No. 179469, February 15, 2012

7. General Provisions

 Rosenstock vs Burke, G.R. No. 20732 , September 26, 1924

8. Elements of Contracts

7.1 Consent -

 Heirs of Fausto Ignacio vs. Home Bankers -- G.R. No. 177783 : January 23, 2013
 Laudico vs Arias-G.R. No. 16530 , March 31, 1922
 Malbarosa vs CA, G. R. No. 125761 - April 30, 2003
 Cardinez vs. Sps Cardines - Aug 4, 2021
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a. Option Contract –

 Ang Yu Asuncion vs CA - G.R. No. 109125 December 2, 1994

b. Mistake, as a vice of consent

 Roman Catholic Church vs. Pante – G.R. No. 174118, April 11, 2012

c. Violence/Intimidation

 Carmela Mangahas vs. Eufrocina Brobio- G.R. No. 183852, October 20, 2010

d. Fraud

 Spouses Viloria vs. Continental Airlines, G.R. No. 188288, January 16, 2012

e. Simulated Contracts

 Heirs of Dr. Intac vs CA- G.R. 173211, Oct 11, 2002

7.2 Object of Contracts

7.3 Cause of Contracts

 Carantes vs CA, G.R. No. L-33360 April 25, 1977

 Spouses Buenaventura vs CA, G.R. No. 126376, November 20, 2003

9. FORM of Contracts

 Dauden-Hernaez vs. De Los Angeles – G.R. No. L 27010, April 30, 1969
 San Miguel Foods vs Magtuto – GR 225007, July 25, 2019

10. REFORMATION of Instruments

11. Interpretation of Contracts

 WERR Corp. vs. Highlands Prime Inc. G.R. No. 187543 February 8, 2017 (1234 in relation to 1376)

12. Defective Contracts

12.1 Rescissible Contracts –

 Rosencor vs. Inquing; G.R. No. 140479. March 8, 2001

 Guzman, Bocaling and Co, Inc. vs. Bonnevie; 206 SCRA 668
 Oria vs. Mcmicking G.R. No. L-7003 , January 18, 1912
 Tanay Recreation Center and Development Corporation v. Fausto, G.R. No. 140182, April 12,
2005

12.2 Voidable Contracts

 Binua v. Ong G.R. No. 207176, June 18, 2014

 Mercado vs Espiritu, G.R. No. L-11872, December 1, 1917
 Heirs of Sevilla vs Sevilla – G.R. No. 150179 April 30, 2003
 Tankeh vs DBP, G.R. No. 171428 , November 11, 2013
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 Spouses Viloria vs. Continental Airlines, G.R. No. 188288, January 16, 2012
(Ratification)
 ECE Realty vs. Mandap, G.R. No. 196182, September 1, 2014 (Ratification)

11.1 Unenforceable Contracts

 Ordua (Orduña) vs. Fuentabella – G.R. No. 176841, June 29, 2010
 Hernandez vs CA – G.R. No. L-41132 April 27, 1988
 VDA de Espina vs. Abaya – G.R. No. L-45142             April 26, 1991
 Swedish Match v. Court of Appeals, 483 Phil. 735,747-754(2004).
 Averia vs. Averia, G.R. NO. 141877 : August 13, 2004

11.2 Void or Inexistent Contracts

13. Natural Obligations

14. Estoppel
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