LAW ON OBLIGATIONS, CONTRACTS & SALES

COURSE SYLLABUS
BY: ATTY. LYDIA C. GALAS

COURSE CODE: JD 102 [6 UNITS]

COURSE OVERVIEW:
v This course is divided into two parts, the first being on Obligations and Contracts and
the second being on the special contract of Sale. This course will tackle matters related to
Obligations and Contracts.
v Insofar as it discusses Obligations and Contracts, this course serves as a continuation to the
introductory concepts in civil law for law school freshmen which mainly focuses on the
topics of (1) Civil Obligations, (2) Contracts, (3) Natural Obligations, (4) Estoppel, and
other related concepts;
v The course will begin with discussions on involving civil obligations, its sources, nature
and effects of such obligations, different kinds of obligations, and modes of extinguishment
for the said obligations;
v The course will also discuss general principles and specific rules with regard to contracts,
its essential requisites, the stages in the life of a contract, its forms as required by law,
reformation as a remedy to certain contracts and methods of interpreting contracts, as well
as the different kinds of defective contracts, their effects and consequences in law;
v To conclude Obligations and Contracts, the course will discuss the concept of natural
obligations and its difference from civil obligations, as well as the concept of estoppel and
its application to civil law;
v Finally, this course shall discuss the pertinent provisions on the Law on Sales.

1ST EXAM COVERAGE

OBLIGATIONS

1159 – AUTONOMY OF WILL

UNITED ALLOY v. UCPB 816 S 70 (PERALTA)

1160 – QUASI-CONTRACTS
Solutio indebiti: Domestic Petroleum Retailer Corp. v. Manila International Airport
Authority, G.R. No. 210641, March 27, 2019

1162 – QUASI-DELICTS
1. Dela Cruz v. Octaviano, G.R. No. 219649, July 26, 2017
2. Visayan Electric Co., Inc. v. Alfeche, G.R. No. 209910, November 29, 2017
3. Imperial v. Heirs of Spouses Bayaban, G.R. No. 197626, October 3, 2018
4. VDM Trading Inc. and Sps. Domingo v. Carungcong, G.R. No. 206709,
February 06, 2019
5. Heirs of Mendoza v. ES Trucking and Forwarders, G.R. No. 243237, February
17, 2020
6. Maitim v. Aguila, G.R. NO. 218344, Mar 21 2022
7. Davao del Norte Electric Cooperative v. Heirs of Lucas, G.R. No. 254395, June
14, 2023

DISTINGUISH THE TYPES OF CULPA:

1. Cancio, Jr. v. Isip, G.R. No. 133978, November 12, 2002
2. L.G. Foods Corp. v. Pagapong-Agraviador, G.R. No. 158995, September 26,
2006

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 3. Lim v. Kou Co Ping, G.R. Nos. 175256 & 179160, August 23, 2012
4. Keihin-Everett Forwarding Co., Inc. v. Tokio Marine Malayan Insurance Co.,
Inc., G.R. No. 212107, January 28, 2019
5. De Jesus v. Uyloan, G.R. NO. 234851, Feb 15 2022
6. Fagarido and Milan v. Alcantara et al, G.R. NO. 240066, Jun 13 2022

1164 – RIGHT OF CREDITOR TO THE FRUITS; ACQUISITION OF REAL

RIGHT
1. PNB v. MARAÑON 700 S 297 (REYES)
2. BADILLA VS. BRAGAT (PERALTA) 757 S 131 (4/22/15)

1166 – ACCESSIONS AND ACCESSORIES

DELOS REYES v. MUNICIPALITY of KALIBO, AKLAN 856 S 408
(PERALTA)

1167 – FAILURE TO PERFORM POSITIVE PERSONAL OBLIGATIONS

1. Pascua v. G&G Real TV Corporation, G.R. No. 196383, October 15, 2012
2. BF Corp. v. Werdenberg International Corp., G.R. No. 174387, December 9,
2015
3. H.S. Pow Construction and Development Corp. v. Shaughnessy Development,
G.R. NO. 229262, Jul 7 2021

1168 – VIOLATIONS OF NEGATIVE PERSONAL OBLIGATIONS

1. Fajardo, Jr. v. Freedom to Build Inc. G.R. No. 134692, August 1, 2000
2. Rivera v. Solidbank Corp., G.R. No. 163269, April 19, 2006

1169 – PRINCIPLE OF DELAY

1. LEAÑO v. CA 369 S 36
2. HEIRS OF BACUS v. CA 371 s 295
3. MEGAWORLD v. TANSECO GR#181206 10/03/2009
4. GENERAL MILLING v. RAMOS GR#193723 07/20/2011
5. CRUZ v. GRUSPE, G.R. No. 191431, March 13, 2013
6. Maybank Philippines., Inc. v. Spouses Tarrosa, G.R. No. 213014, October 14,
2015
7. Chua Ping Hian v. Manas, G.R. No. 198867, October 16, 2019
8. Bongcayao vs. Confederation of Sugar Producers Cooperatives, G.R. No.
225438, January 20, 2021

1170 – NON-PERFORMANCE BY FRAUD, NEGLIGENCE OR DELAY

1. PRUDENTIAL BANK v. CA GR#125536 MARCH 16, 2000
2. PRUDENTIAL BANK v. RAPANOT 816 S 34 (CAGUIOA)
3. Chinatrust (Phils.) Commercial Bank v. Turner, G.R. No. 191458, July 3, 2017
4. Orient Freight International, Inc. v. Keihin-Everett Forwarding Co., Inc., G.R.
No. 191937, August 9, 2017
5. Pineda v. De Vega, G.R. No. 233774, April 10, 2019
6. Metropolitan Bank and Trust Co. v. Cruz, G.R. NO. 221220, Jan 19 2021
7. Banco De Oro Universal Bank, Inc., et al v. Liza A. Seastres and Annabelle N.
Benaje, G.R. No. 257151, February 13, 2023

1174 – DOCTRINE of FORTUITOUS EVENT

1. PAL v. CA 226 S 423
2. SOUTHEASTERN COLLEGE v. CA 292 S 422
3. PHILCOMSAT v. GLOBE TELECOM 429 S 153
4. GAISANO CAGAYAN v. INS. CO. of NORTH AMERICA 490 S 286
5. SICAM V. JORGE 529 S 443
6. METRO CONCAST v. ALLIED BANKING 711 S 479
7. Tan v. Great Harvest Enterprises, Inc., G.R. No. 220400, March 20, 2019

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 1181 – ACQUISITION/EXTINGUISHMENT of RIGHTS
1. DEVELOPMENT BANK v. CA 262 S 245
2. CENTRAL PHILIPPINES UNIV v. CA 256 S 511
3. David v. David G.R. No. 162365, January 15, 2014
4. Hilltop Market Fish Vendors' Association, Inc. v. Yaranon, G.R. No. 188057,
July 12, 2017
5. Bacala v. Heirs of Poliño, G.R. NO. 200608, Feb 10 2021
6. Estipona v. Estate of Aquino, G.R. NO. 207407, Sep 29 2021
7. Heirs of Gonzales v. Sps Basas and Munda, G.R. NO. 206847, Jun 15 2022

1182 – POTESTATIVE CONDITION

1. Gemudiano, Jr. v. Naess Shipping Philippines, Inc., G.R. No. 223825, January
20, 2020
2. Yupangco v. O.J. Development and Trading Corp, G.R. NO. 242074, Nov 10
2021

1184 – POSITIVE CONDITION

MEGAWORLD v. MAJESTIC FINANCE (BERSAMIN)

1186 – CONSTRUCTIVE FULFILLMENT

1. TAYAG v. CA 219 S 480
2. DEVELOPMENT BANK v. STA. INES MELALE 816 S 425 (LEONEN)
3. Villamil v. Spouses Erguiza, G.R. No. 195999, June 20, 2018

1191 – RESOLUTION/RESCISSION
1. VELARDE v. CA GR#108346 JULY 11, 2001
2. CANNU v. GALANG 459 S 80
3. FOREST HILLS v. VERTEX SALES 692 S 707
4. MAGLASANG v. NORTHWESTERN UNIV. 694 S 128
5. SWIRE REALTY v. YU (PERALTA) 752 S 135
6. FONG v. DUENAS (BRION) 757 S 412
7. NOLASCO v. CULAPO (PERLAS-BERNABE) 777 S 447
8. ASB REALTY v. ORTIGAS (BERSAMIN) 777 S 284
9. Yamauchi v. Suñiga, G.R. No. 199513, April 18, 2018
10. Camp John Hay Development Corp. v. Charter Chemical and Coating Corp.,
G.R. No. 198849, August 7, 2019
11. Camarines Sur Teachers and Employees Association, Inc. v. Province of
Camarines Sur, G.R. No. 199666, October 7, 2019
12. Spouses Godinez v. Spouses Norman, G.R. No. 225449, February 26, 2020
13. Bacala vs. Heirs of Poliño, G.R. No. 200608, February 10, 2021
14. Heirs of Kim v. Quicho, G.R. No. 249247, March 15, 2021
15. Dela Luna v. Swire Realty and Development, G.R. NO. 226912, Nov 24 2021
16. Estate of Rodriguez v. Republic, G.R. NO. 214590, Apr 27 2022
1193 – 1198 – OBLIGATIONS WITH A PERIOD
1. Gaite v. Fonacier, G.R. No. L-11827, July 31, 1961
2. Buce v. Court of Appeals, G.R. No. 136913, May 12, 2000
3. Radiowealth Finance Co. v. Spouses Del Rosario, G.R. No. 138739, July 6,
2000
4. LL & Company Development & Agro-Industrial Corp. v. Huang Chao Chun,
G.R. No. 142378, March 7, 2002
5. Catungal v. Rodriguez, G.R. No. 146839, March 23, 2011
1199 ALTERNATIVE OBLIGATIONS
1. Arco Pulp and Paper Co., Inc. v. Lim, G.R. No. 206806, June 25, 2014

1207 – JOINT/SOLIDARY OBLIGATIONS

1. PACIFIC BANKING v. IAC 203 S 496

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 2. INDUSTRIAL MANAGEMENT v. NLRC 331 S 640
3. MARIVELES SHIPYARD v. CA 415 S 573
4. CONSTRUCTION DEV. v. ESTRELLA 501 S 228
5. YULTON v. INTERNAT’L EXCHANGE BANK (REYES) 751 S 129
6. SINAMBAN v. CHINA BANKING (REYES) 752 S 621
7. Aglibot v. Santia, G.R. No. 185945, December 5, 2012
8. Spouses Genotiva v. Equitable-PCI Bank, G.R. NO. 213796, Jun 28 2021
9. Paje v. Spic N' Span Service Corp., G.R. No. 240810, February 28, 2022

1224 – JOINT INDIVISIBLE OBLIGATION

LAM v. KODAK PHILIPPINES 778 S 96 (LEONEN)

DIVISIBLE & INDIVISIBLE OBLIGATIONS

United Coconut Planters Bank Inc. v. E. Ganzon, G.R. NO. 244247, Nov 10 2021

2ND EXAM COVERAGE

ARTICLES 1226 – 1229 OBLIGATIONS WITH A PENAL CLAUSE

Equitable reduction of penalty even if there is non-performance
1. LIGUTAN v. CA 376 S 560

OTHER CASES:
1. PRYCE CORP v. PAGCOR 458 S 164
2. FLORENTINO v. SUPERVALUE 533 S 156
3. DIAMOND BUILDERS v. COUNTRY BANKERS 540 S 194
4. RIVERA v. SPS. CHUA 746 S 1
5. BUENAVENTURA v. METROPOLITAN BANK 799 S 239
6. DM Ragasa Enterprises v. BDO G.R. 190512, June 20, 2018
7. Aclado v. Government Service Insurance System, G.R. No. 260428, March 1,
2023
1231-1232 – PAYMENT
1. MULTI-INTERNATIONAL v. MARTINEZ 774 S 574
2. CINCO v. CA 603 S 108
3. ONG BUN v. BPI 859 S 80 (PERALTA)
4. Bulatao v. Estonactoc, G.R. No. 235020, December 10, 2019
5. Sioland Development Corporation, as represented by CEO Elizabeth Sio v. Fair
Distribution Center Corporation, represented by Esteban L. Alba, Jr., G.R. No.
199539. August 9, 2023

EFFECT OF DEATH
STRONGHOLD INSURANCE v. REPUBLIC-ASAHI 492 S 179

1234-1235 – EXCEPTIONS TO COMPLETE DELIVERY OR SERVICE TO

EXTINGUISH AN OBLIGATION THRU PAYMENT/PERFORMANCE
1. Selegna Management and Development Corp. v. United Coconut Planters
Bank, G.R. No. 165662, May 3, 2006
2. International Hotel Corp. v. Joaquin, Jr., G.R. No. 158361, April 10, 2013
3. WERR CORPORATION v. HIGHLANDS PRIME 817 S 145 (JARDELEZA)

1236-1237 – EFFECTS OF PAYMENT MADE BY A THIRD PERSON

JALANDONI v. ENCOMIENDA 819 S 43 (PERALTA)

1240 – TO WHOM PAYMENT SHALL BE MADE

1. PNB v. TAN 256 S 44
2. CULABA v. CA 427 S 721
3. ALLIED BANKING v. LIM SIO WAN 549 S 504
4. DELA CRUZ v. CONCEPCION 684 S 74

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 1241 – PAYMENT TO AN INCAPACITATED; TO A THIRD PERSON – EFFECTS
AND ITS EXCEPTIONS

1242 – PAYMENT MADE IN GOOD FAITH

NATIONAL POWER CORP. v. IBRAHIM 750 S 711

1245 – DATION IN PAYMENT

- What law governs dation in payment upon perfection

CASES:
1. ESTANISLAO v. EAST WEST BANKING GR#178537 02/11/08
2. TAN SHUY v. MAULAWIN 665 S 604
3. VILLARTA v. TALAVERA, JR. 783 S 242
4. DALISAY INVESTMENTS v. SOCIAL SECURITY SYSTEM 860 S 554
(VELASCO, JR.)
1249 – PAYMENT BY DELIVERY OF PROMISSORY NOTES/BILLS OF
EXCHANGE/OTHER MERCANTILE DOCUMENTS; EXCEPTIONS
1. EVANGELISTA v. SCREENEX, INC. 845 S 131 (SERENO)
1250 EXTRAORDINARY INFLATION/DEFLATION
1. EQUITABLE PCI v. NG SHEUNG NGOR 541 S 223
2. ALMEDA v. BATHALA MARKETING 542 S 470

1251 – PLACE OF PAYMENT

1252 – APPLICATION OF PAYMENT

1. PREMIERE DEV. BANK v. CENTRAL SURETY 579 S 359
2. ESPINA v. CA, G.R. No. 116805. June 22, 2000
3. TAN v. CHINA BANKING 800 S 635
4. SINAMBAN v. CHINA BANKING 752 S 621

1253-1254 – ABSENCE OF STIPULATION WHERE PAYMENT BE APPLIED

1. MARQUEZ v. ELISAN CREDIT 755 S 31
2. David v. Bank of the Philippine Islands, G.R. NO. 251157, Sep 29 2021

1255 – PAYMENT BY CESION OR ASSIGNMENT DINSTINGUISHED FROM

DATION IN PAYMENT
VILLALUZ v. LAND BANK 814 s 466 (JARDELEZA)

1256-261 TENDER OF PAYMENT AND CONSIGNATION

- REQUISITES
- EXCEPTIONS TO PRIOR TENDER

CASES:
1. PABUGAIS v. SAHIJWANI 423 S 509
2. BENOS v. LAWILAO 509 S 549
3. CACAYORIN v. ARMED FORCES AND POLICE 696 S 311
4. PHILIPPINE NATIONAL BANK v. CHAN 820 S 161 (DEL CASTILLO)

1262-1265 – LOSS OF THE THING DUE

EFFECTS; EXCEPTIONS

1266-1267 – DOCTRINE OF UNFORESEEN EVENTS IN OBLIGATIONS TO DO

EFFECTS; REQUISITES
1. PHILIPPINE NATIONAL CONSTRUCTION v. CA
2. MAGAT, JR. v. CA 337 S 298
3. TAGAYTAY REALTY v. FACUTAN 761 S 87

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 4. COMGLASCO CORP. v. SANTOS CAR CHECK CENTER CORP. 745 S 481
(REYES)
5. POON v. PRIME SAVINGS BANK 793 S 141 (SERENO)
6. ILOILO JAR v. COMGLASCO 815 S 1 (MENDOZA)

1270-1274 – CONDONATION OR REMISSION OF THE DEBT

- CONCEPT; KINDS
- IF EXPRESS – REQUISITES

1275-1278 – MERGER OR CONFUSION

1279-1290 – COMPENSATION
- CONCEPT; KINDS
- REQUISITES – LEGAL COMPENSATION
- EFFECTS OF ASSIGNMENT
- INSTANCES WHEN COMPENSATION IS PROHIBITED

CASES:
1. BPI v. CA 255 S 571
2. PNB v. CA 259 S 174
3. EGV REALTY v. CA 310 S 657
4. METROPOLITAN BANK v. TONDA 338 S 254
5. PHILTRUST v. ROXAS 772 S 323
6. MARPHIL EXPORT v. ALLIED BANKING 803 S 627
7. CALIFORNIA MANUFCATURING v. ADVANCED TECHNOLOGY
SYSTEM 824 S 295 (SERENO)
8. Banco de Oro Unibank, Inc. v. Ypil, Sr., G.R. No. 212024, October 12, 2020
9. Linear Construction Corp. v. Dolmar Property, G.R. NO. 212327, Nov 17 2021

1291-1304– NOVATION
- CONCEPT; KINDS; REQUISITES
1. LICAROS v. GATMAITAN GR#142838 09/09/01
2. GARCIA v. LLAMAS 417 S 292
3. RICARZE v. CA 515 S 302
4. LEDONIO v. CAPITOL DEVELOPMENT 526 S 379
5. BPI v. DOMINGO 754 S 245
6. INTERPORT RESOURCES v. SECURITIES SPECIALIST 792 S 155
7. FIGUERA V. ANG 795 S 175
8. PARDIGM DEVELOPMENT v. BPI 826 S 267 (REYES)
9. SPOUSES CELONES v. METROPOLITAN BANK GR#215691 November
21 2018, (TIJAM)
10. FOOD FEST, INC. v. ROMUALDO SIAPNO, ET. AL. GR#226088,
February 27, 2019 (PERALTA)
11. Rizal Commercial Banking Corp. v. Plast-Print Industries, Inc., G.R. No.
199308, June 19, 2019
12. VICENTE HENSON v. UCPB INSURANCE (EN BANC) GR#223134
AUGUST 14, 2019 (PERLAS-BERNABE)
13. MODOMO v. SPS. LAYUG GR#197722 AUGUST 12, 2019 (CAGUIOA)
14. Valdes v. La Colina Development Corp., G.R. No. 208140, Jul 12, 2021
15. Asian Construction and Development Corp. v. Mero Structures, G.R. NO.
221147, Sep 29 2021
16. Bendecio v. Bautista; G.R. NO. 242087; Dec 7 2021
17. Systems Energizer Corp. v. Bellville Development, Inc., G.R. No. 205737,
September 21, 2022
18. Romago, Inc. v. Associated Bank, G.R. No. 223450, February 22, 2023

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 3RD EXAM COVERAGE

ARTICLES: 1306 – AUTONOMY of CONTRACTS

1. GOLANGCO v. PCIB 485 S 293
2. CASTRO v. TAN 605 S 231
3. MALLARI v. PRUDENTIAL BANK 697 S 555
4. Bermon Marketing Communication Corp. v. Sps Yaco, G.R. NO. 224552, Mar
3 2021
5. IP E-Game Ventures Inc. v. Tan, G.R. NO. 239576, Jun 30 2021
6. City of Bacolod City v. Sugarland Hotel Inc., G.R. NO. 182630, Dec 6 2021
7. Light Rail Transit Authority v. Joy Mart Consolidated Inc, G.R. NO. 211281,
Feb 15 2022
8. Pabalan v. Sabnani, G.R. No. 211363, EN BANC, February 21, 2023

1307 – INNOMINATE CONTRACTS

Willy v. Julian, G.R. NO. 207051, Dec 1 2021

1308 – MUTUALITY OF CONTRACTS

1. PNB v. CA 238 S 20
2. ALLIED BANKING v. CA 284 S 357
3. FLOIRENDO, JR. v. METROBANK 532 S 43
4. JUICO v. CHINA BANKING 695 S 520
5. PNB v. MANALO 717 S 254
6. JONSAY v. SOLID BANK 788 S 552 (REYES)
7. SECURITY BANK v. SPS. RODRIGO MERCADO 868 S 323
(JARDELEZA)
8. Vasquez v. Philippine National Bank, G.R. Nos. 228355 & 228397, August 28,
2019
9. Commoner Lending v. Sps. Villanueva GR 235260, Aug. 27, 2020
10. Goldwell Properties Tagaytay Inc. v. Metrobank, G.R. NO. 209837, May 12
2021
11. Metro Alliance Holdings and Equities Corp. v. Phil Veterans Bank, G.R. NO.
240495, Sep 15 2021
12. Philippine National Bank v. AIC Construction Corp, G.R. NO. 228904, Oct 13
2021
13. Land Bank of the Philippines v. Sprint Business Network and Cargo Services,
Inc., G.R. No. 244414, January 16, 2023

1311-1314 – RELATIVITY of CONTRACTS

- Who are bound thereby and exceptions
- When may third persons interfere in a contract:

1. 1311- on stipulation pour autri, requisites

BALUYOT v. CA 311 S 29

2. 1312 – Contracts creating real rights

Domilos v. Spouses Pastor, G.R. NO. 207887, Mar 14 2022

3. 1313 – Contracts intended to defraud creditors

Exception to the exception:

1314 – Third person induces a party to violate his contract
- Requisites
- Nature of liability of the inducer and the induced
GMA Network, Inc. v. Cruz-Valdes, G.R. No. 205498, May 10, 2021

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OTHER CASES:
1. INTEGRATED PACKAGING v. CA 333 S 171
2. A& C MINIMART v. VILLAREAL 535 S 489
3. BORROMEO v. CA 550 S 269
4. HEIRS of LLENADO v. LLENADO 580 S 546
5. VALLIDO v. PONO 696 S 381
6. PNB v. DEE 717 S 14
7. Heirs of Villeza vs. Aliangan, G.R. Nos. 24467-69, December 2, 2020
8. Home Guaranty Corp. v. Manlapaz, G.R. No. 202820, January 13, 2021

1315-1319 – PERFECTION/STAGES/CONSENSUAL/REAL and ESSENTIAL

REQUISITES of CONTRACTS
1. JARDINE DAVIES v. CA 333 S 684
2. SOLER v. CA 358 s 57
3. PROVINCE of CEBU v. MORALES 546 S 315
4. GARCIA v. THIO 518 S 433
5. PANGAN v. PERRERAS 597 S 253
6. SMI v. POSADAS 776 S 219
7. DESIDERIO DALISAY INV. INC v. SSS 860 S 554 (VELASCO, JR.)
8. Robern Development Corp. v. People's Landless Association, G.R. No. 173622, March
11, 2013
9. San Miguel Foods, Inc. v. Magtuto, G.R. No. 225007, July 24, 2019
10. Catapang v. Lipa Bank, G.R. No. 240645, January 27, 2020
11. Seming vs. Alamag, G.R. No. 202284, March 17, 2021
12. Spouses Gaspar v. Disini, Jr., G.R. No. 239644, February 3, 2021
13. Seming v. Alamag, G.R. NO. 202284, Mar 17 2021
14. De Joya v. Madlangbayan, G.R. No. 228999, April 28, 2021
15. Cardinez v. Spouses Cardinez, G.R. No. 213011 August 4, 2021
16. Kameraworld, Inc. v. Reddot Imaging Philippines, Inc., G.R. No. 248256, April 17,
2023
17. Chingkoe v. Chingkoe, G.R. No. 244076, March 16, 2022
18. Philippine Charity Sweepstakes Office v. Mendoza, G.R. No. 257849, March 13, 2023

1320 – MANNER OF ACCEPTANCE

1. Metro Rail Transit Development Corp. v. Gammon Philippines, Inc, G.R. No.
200401, January 17, 2018
2. Spouses Yulo v. Bank of the Philippine Islands, G.R. No. 217044, January 16, 2019

1324 – OPTION CONTRACT

- When offeror has the right to withdraw the option and its exception
- Effect if offer is immediately accepted
- What constitutes consideration
1. VILLAMOR v. CA 202 S 607
2. ADELFA PROPERTIES v. CA 240 S 565
3. SAN MIGUEL PROPERTIES v. SPOUSES HUANG 336 S 737
4. LIMSON v. CA 357 S 209

Distinctions between OPTION MONEY and EARNEST MONEY

5. TAYAG v. LACSON 426 S 282
6. PHILIPPINE NATIONAL OIL v. KEPPEL HOLDINGS 798 S 65

1330-1344 – DEFECTS of the WILL

- When may MISTAKE invalidate CONSENT
- Requirement upon party enforcing the contract when one of the parties is unable
to read or contract is in a language not understood by him
- When FRAUD is committed, requisites, types

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 - Distinctions between FRAUD under Article 1171 and FRAUD falling under
Article 1338
- TOLERATED FRAUD
CASES:
1. FONTANA RESORT v. TAN 664 S 382
2. DELA CRUZ v. DELA CRUZ 419 S 648
3. FELICIANO v. ZALDIVAR 503 S 122
4. CRUZ v. CRUZ 856 S 563 (DEL CASTILLO)
5. Spouses Padilla v. Catungal, G.R. No. 211687, February 10, 2021
6. Cabilao v. Tampan, G.R. NO. 209702, Mar 23 2022

1345-1346 – SIMULATION of CONTRACTS

- Distinctions between RELATIVE SIMULATION and ABSOLUTE
SIMULATION OF CONTRACTS

CASES:
1. VILLEGAS v. RURAL BANK OF TANJAY 588 S 436
2. VILLACERAN v. DE GUZMAN 666 S 454
3. CABALU v. TABU 681 S 625
4. HEIRS OF INTAC v. CA 684 S 625
5. CLEMENTE v. CA 772 S 339
6. STA. FE REALTY v. SISON 802 S 1
7. Pasco v. Cuenca, G.R. No. 214319, November 4, 2020
8. ATCI Overseas Corporation and Amalia G. Ikdal Vs. Asset Pool A (SPV-
AMC), Inc., G.R. No. 250523. June 28, 2021
9. Valenzuela v. Spouses Pabilani, G.R. No. 241330, December 5, 2022

1347-1349 – OBJECT OF CONTRACTS

- General rule and its exceptions
- Future inheritance as valid object of contracts

1350-1355 – CAUSE of CONTRACTS

- Classification of contracts as to cause
CASE: CALANASAN v. DOLORITO 710 S 505

- Distinctions between CAUSE and MOTIVE

- MOTIVE becoming the cause of the contract
CASE: LIGUEZ v. CA 102 PHIL 577

- Effect of absence of cause or cause is unlawful

CASES:
1. VELEZ v. RAMAS 40 PHIL 787
2. MACTAL v. MELEGRITO GR#L-16114 MARCH 24, 1961

- Presumption if cause is not stated in a contract

CASES: 1. MENDOZA v. PALUGOD, SR. 867 S 299 (CAGUIOA)
2. Vargas v. Acsayan, Jr., G.R. Nos. 206780 & 206843, March 20, 2019

- Effect if there is lesion or inadequacy of case

1356-1358 – FORMS of CONTRACT

- General rule and its exceptions when form is required
- When law requires a document to observe a certain form
- Contracts/agreements that must be in a public instrument for purposes of
affecting third persons and/or convenience between the parties

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 1. MARTINEZ v. CA 358 S 38
2. TEOCO v. METROBANK 575 S 82
3. SPILLE v. NICORP 773 S 67
4. BITTE v. JONAS 777 S 489
5. AGUINALDO v. TORRES, JR. 8339 S 354
6. KABISG REAL WEALTH v. YOUNG BUILDERS CORP. 856 S 30
7. DIAMPOC v. BUENAVENTURA 859 S 422 (DEL CASTILLO)
8. COCA COLA BOTTLERS v. SORIANO 861 S 93 (TIJAM)
9. Uy v. Heirs of Uy-Renales, G.R. No. 227460, December 5, 2019
10. Heirs of Yadao v. Heirs of Caletina, G.R. NO. 230784, Feb 15 2022

1359-1369 – REFORMATION OF INSTRUMENTS

- Meaning, reason and requisites of REFORMATION
- Grounds for reformation
- Cases when REFORMATION not allowed:
1. BENTIR v. LEANDA 330 S 591
2. VILLEGAS v. ARJONA 425 S 57
3. MARTIRES v. CHUA 694 S 38
4. ROSARIO v. ALVAR 839 S 138
5. MAKATI TUSCANY CONDO v. MULTIREALTY DEV. 861 S 448
(LEONEN)
6. Banico v. Stager, G.R. No. 232825, September 16, 2020

1370-1379 – INTERPRETATION of CONTRACTS

- Purpose of contract interpretation
- Rules in case doubts are impossible to settle and the doubts refer to incidental
circumstances
- Effect if doubts are cast the principal object of the contract
CASES:
1. SECURITY BANK v. CA 515 S 63
2. FORTUNE MEDICARE v. AMORIN 719 S 133
3. CENTURY PORPERTY v. BABIANO 795 S 671 (A. 1370)
4. RODRIGUEZ v. SIOSON 798 S 526 (A. 1371)
5. PNB v. ALONDAY 805 S 657 (A. 1377)
6. Saclolo v. Marquito, G.R. No. 229243, June 26, 2019
7. Makati Water, Inc. v. Agua Vida Systems, Inc., G.R. No. 205604, June 26,
2019
8. Spouses Godinez v. Spouses Norman, G.R. No. 225449, February 26, 2020
9. Pascual v. Pangyarihan Ang, G.R. No. 235711, March 11, 2020
10. Dacquel v. Spouses Sotelo, G.R. No. 203946, August 4, 2021
11. Richardson Steel Corp. v. Union Bank of the Phils, G.R. NO. 224235, June
28 2021
12. Malate Construction Development Corp. v. Extraordinary Realty Agents,
G.R. NO. 243765, Jan 5 2022

FINALS COVERAGE

DEFECTIVE CONTRACTS

ARTICLES 1380-1389
I. RESCISSIBLE CONTRACTS
- Nature of Rescissible Contracts
- Requisites for rescission
- Contracts that are rescissible (1381 and 1382)
- Fraudulent transfers – requisites; presumption (1387)

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 CASES: Ground # 3
1. SIGUAN v. LIM 318 S 725
2. KHE HONG CHENG v. CA 355 S 701
3. UNION BANK v. ONG 491 S 581
4. ANCHOR SAVINGS v. FURIGAY 693 S 384
- Distinctions between ACCION PAULIANA and SIMULATION OF
CONTRACTS
- 7 Badges of Fraud
- Nature of remedy of rescission under 1381 (3), Civil Code; cf. Article 1313,
Civil Code

OTHER CASES:
Ground # 4
5. ADA v. BAYLON 678 S 293
6. De Guzman v. Spouses Santos, G.R. No. 222957, March 29, 2023

Ground # 5
7. EQUATORIAL REALTY v. MAYFAIR 264 S 483
8. ROSENCOR v. INQUING G.R. #140479 03/08/01 354 S 119
9. HEIRS OF QUIRON v. DBP 606 S 543 (1389)
- Effects if Rescission is granted (1385)
- Prescriptive period within which the action for Rescission must be brought

ARTICLES 1390-1402
II. VOIDABLE CONTRACTS
- Contracts that are VOIDABLE or ANNULLABLE (1390)
- Prescriptive period (1391)

CASES:
1. SAMONTE v. CA 371 S 173
2. AYSON v. PARAGAS, G.R. No. 146730. July 4, 2008
3. Oberes v. Oberes, G.R. No. 211422, October 16, 2019
- Consent is vitiated [1390(2)]

CASES:
4. MENDEZONA v. OZAMIZ 376 S 482
5. FAMANILA v. CA 500 S 76
6. CATALAN v. BASA 528 S 645
7. LAVAREZ v. GUEVARRA 822 S 130
8. POOLE-BLUNDEN v. UNIONBANK 847 S 146
- Modes of cleansing VOIDABLE CONTRACTS
- Effect of ratification (1396)
- Party or parties who may institute action to annul (1397), exceptions where
the injured party is barred from filing complaint for annulment
SPOUSES MAÑAS V. NICOLASORA, G.R. NO. 208845, FEBRUARY 3,
2020
- Effects if annulment is granted exception to mutual restitution

ARTICLES 1403 – 1408

III. UNENFORCEABLE CONTRACTS
- Concept
- Contracts that are UNENFORCEABLE (1403)
- Agreements falling under the Statute of Frauds and solemnity to be observed
in its execution
- Cleansing an unenforceable contract of its defect (1403 and 1405)

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 - Persons who may assail unenforceable contracts

CASES:
1. REGAL FILMS v. CONCEPCION 362 S 504
2. VALENCIA v. LOCQUIAO 412 S 600
3. LITONJUA v. FERNANDEZ 427 S 478
4. GOZUN v. MERCADO 511 S 305
5. CABALES v. CA 531 S 691
6. PENALBER v. RAMOS 577 S 509
7. GONZALES v. PEREZ 605 S 47
8. NERI v. HEIRS OF YUSOP UY 683 S 553
9. BUCTON v. RURAL BANK of EL SALVALDOR 717 S 278
10. UNIVERSITY OF MINDANAO v. BANGKO SENTRAL NG PILIPINAS 778 S
458
11. NATIVIDAD v. NATIVIDAD 785 S 239
12. Estate of Bueno v. Estate of Peralta, G.R. No. 205810, September 9, 2020
13. Purisima Jr. v. Purisima, G.R. No. 200484, November 18, 2020
14. Heirs of Godines v. Demaymay, G.R. NO. 230573, Jun 28 2021
15. Serna v. Dela Cruz, G.R. No. 237291, February 1, 2021

ARTICLES 1409-1422
IV. VOID/INEXISTENT/FICTITIOUS CONTRACTS
- Concept
- Contracts that are VOID (1409)
- Characteristics
- Effects if: a) nullity proceeds form illegality of cause or object and the act
constitutes a criminal offense and b) unlawful or forbidden cause but the act
does not constitute a criminal offense (1411, 1412)

CASES: RAMIREZ v. RAMIREZ 485 S 92

- Non-applicability of Articles 1411 and 1412, Civil Code and the pari delicto
doctrine in fictitious/non-existent contracts
HEIRS OF ALIDO V. CAMPANO, G.R. NO. 226065, JULY 29, 2019

CASES: 1. MODINA v. CA 317 S 697

2. ONG v. GUAN 367 S 369
- Repudiation of Illegal Contract before accomplishment of purpose (1414)

CASE: HULST v. PR BUILDERS 532 S 74

- Effect if contract is direct result of previous illegal contract (1422)

OTHER CASES:
1. DOMINGO v. CA 367 S 369
2. BAUTISTA v. BAUTISTA 529 S 187
3. QUIMPO v. BELTRAN 545 S 174
4. ALINAS v. ALINAS 551 S 154
5. LANDBANK v. POBLETE 691 S 613
6. GONZALO v. TERNATE 713 S 224
7. CABRERA v. YSAAC 740 S 613
8. LOPEZ v. DBP 741 S 153
9. TINGALAN v. MELLIZA 760 S 514
10. FILINVEST LAND v. ADIA 775 S 494
11. PENA v. DELOS SANTONS 785 S 440
12. FULLIDO v. GRILLI 785 S 278
13. NICOLAS v. MARCIANO 799 S 56
14. STONE v. CATTLEYA LAND, INC. 802 S 173

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 15. Sps. Viovicente v. Sps Viovicente GR 219074, July 28, 2020
16. Arakor Construction and Development Corp. v. Sta. Maria, G.R. No. 215006, January
11, 2021
17. Rapid City Realty and Development Corp. v. Paez-Villa, G.R. NO. 217148, Dec 7 2021
18. City of Tanauan v. Millonte, G.R. NO. 219292, Jun 28 2021
19. Yu v. Heirs of Sia, G.R. NO. 248495, Jul 6 2022

ARTICLES 1423-1430
NATURAL OBLIGATIONS
- Concept
- Conversion to Civil Obligation
- Fulfillment of Natural Obligation

ARTICLES 1431-1439
ESTOPPEL
- Concept
- Excluded from principle of Estoppel
- Kinds of ESTOPPEL
- Requisites to preclude owner from asserting ownership over real estate (1437)
- Estoppel by acceptance of benefits (1438)
- Parties affected by principle of estoppel

CASES:
1. LIM v. QUEENSLAND TOKYO 373 S 31
2. ACCESSORIES SPECIALISTS v. LABANZA 559 S 550
3. ASILO, JR. v. BOMBASO 645 S 41
4. HOJAS v. AMANAH BANK 697 S 505
5. GO v. BANGKO SENTRAL ng PILIPINAS 762 S 344
6. CABRERA v. CLARIN 810 S 563
7. Riingen v. Western Union Financial Services, G.R. NO. 252716, Mar 3 2021
(Promissory estoppel)
8. Lorenzo v. Eustaquio, G.R. NO. 209435, Aug 10 2022 (Laches)

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