Magic Notes

Midterms notes/oblicon

1. Art. 1156: Why is there “not to give?” (already in the phrase “not to do”)

2. What are the essential requisites of an obligation?

3. Are all obligations legally demandable and enforceable? (No, only civil obligations are legally demandable. Natural obligations are not legally demandable.)

4. How do civil obligations differ from natural obligations?

5. What are the sources of civil obligations? (Art. 1157) Is it an exclusive enumeration?

6. If all civil obligations can be enforced by means of a court action then all civil obligations arise from law…true or false? False (Pg.8, Manresa’s differentiation.)

7. When do you say that the law itself is the source of the obligation and when do you say that it is created from another source or how do you determine the source of the obligation? (Pg.8, Manresa’s differentiation.)

8. What is a quasi-contract? (Pg. 10)

9. What is a quasi-delict? (Pg. 20)

10. What is a contract? (Pg. 8)

11. Can there be an obligation when there is only one party? NO

12. Pelayo vs Lauron (Case arising from law)

13. Macasaet vs. COA (Doctrinal Case of Art. 1159)

Supra demanded an escalation cost for the increase of materials…Macasaet also demanded 7% of the additional because the 7% must be based on the final actual cost of the project (stipulated in the contract). Decision was in favor of Macasaet.

14. Agcaoili vs. GSIS (Exception to Article 1159) the SC did not apply the rule of 1159 on obligations arising from contract. Increased prices of materials during pendency of case does not make it equitable to strictly apply the contract stipulations. The court ruled to give Agcaoili the lot and the house

15. Barredo vs Garcia – the scope of quasi-delict was extended to “acts which are punishable by the Revised Penal Code.”

16. Elcano vs. Hill – the Supreme Court broadened the scope of quasi-delicts up to acts which are involuntary etc.

17. Air France vs. Carrascoso – mere breakage of contract can be classified as quasi-delict. A person, against his will, forced to transfer from Economy class to Business class can also file a suit for breach of contract

1. What is meant of a diligence of a good father of a family? -“standard of care in roman law…ordinary diligence.” – exercised in the absence incase of absence of stipulation in the contract or the law.

2. Would it apply to a generic object? (no because generic thing does not perish.) - There is no risk of loss from the genus of the object.

3. 1163 is a guaranty that the debtor will comply with the obligation.

4. When is the object considered generic or determinate?

5. In common carrier, the law requires an extra ordinary diligence in taking care of the thing.

6. From the time the obligation to deliver has arise, the creditor is entitled to the fruits and accessories of the object.

7. When does the time to deliver arise? (it depends upon the nature of the contract…)

8. What are the obligations of the debtor and what are the right of the creditor? (pg. 47-50)

9. What are accession and accessory? (Article 1166)

Accession – anything that is produced by or incorporated or attached to the property either naturally or artificially. Example: fruits of the land, tree that is planted in the land

Accessory – anything that is united with the principal thing as an ornament or for its use or perfection. Example: Head lights of a motor cycle. (Pg. 29 Aquino)

10. When is there a liability even if there is fortuitous event? (3rd Paragraph Art. 1165)

11. What is the philosophy behind the fortuitous event in 3rd Paragraph Art. 1165? (There would have been no losses if the debtor would have comply with the obligation to deliver the object without delay)

12. What is the philosophy behind the debtor promising to deliver the object to 2 person with different interest? (It would be impossible to comply with both obligations therefore you already made yourself liable for damages so a loss in fortuitous event should not free you from liability for damages.)

13. What are the rights of the creditor in an obligation to do? (pg 54 Jurado)

14. Can the creditor compel the debtor to comply in the obligation to do? The remedy of compulsion is not available to personal obligation…

15. Asking another person to comply with the obligation at the expense of the debtor is not always available…

16. Chaves vs. Gonzales – (Discussed in class)

17. Tangguilig vs CA – (Discussed in the class)

18. Can deliver an object with an inferior quality or nor can the creditor demand the delivery of a superior quality in an obligation to deliver an indeterminate/generic thing? No because under Art. 1246 the law does not allow it.

But there is nothing in the law which does not allow the debtor to offer a more superior quality nor the creditor to demand a more inferior quality.

19. What are the rights of a creditor? (Pg. 47-49)

20. Is the right of undoing always available? (No, it depends in the nature of the act…sometimes you cannot undo what has been done.)

21. 1169 – one of the more important provisions. (Memorize!!!!)

22. When does delay start? Unless there is no demand there is no delay…”general rule” - Exemptions: Article 1169:

a. when time is of the essence

b. when there is express stipulation that demand is not necessary

c. When demand is not necessary because the obligation cannot be fulfilled.

23. For a contract to be included in exception number 1, that the parties must stipulate in the contract that “the debtor will incur delay without the need for demand” otherwise there is a need for a demand for the debtor to incur delay.

The mere stipulation of a date where the obligation is due does not impliedly include it in the exception.

24. In reciprocal obligation, the moment the other party complied with his obligation failure to comply will cause you to be in delay. Therefore demand is not required. Exception, if there are different dates for the performance of the obligation therefore there is need for demands.

1. Is it only the debtor can incur delay in cases where the party is only the creditor? (Yes, when the creditor unjustly refuses the performance of the debtor in fulfillment of his obligation in other words…mora accipiendi or delay of the creditor.)

2. When there is delay on both parties or Compensatio morae.

3. General rule in 1169, in unilateral obligation demand is necessary. (the mere fact that the parties agreed on a date of performance does not make the debtor incur delay if not fulfilled on the agreed date.) In bilateral obligations no demand is required, the moment one of the parties comply with his obligation properly delay starts on the part of the other.

4. When will a demand be necessary before there will be delay on their part? (When there are different dates concerning the compliance of their obligation.)

5. Tip: in 90% of the cases on of the exemptions is that if there is a contrary stipulations.

6. Article 1170: Gives the way of committing a breach…how may be an obligation be breached?

7. When is there fraud or what is fraud as a mode of ?conscious deliberate non-fulfillment of the obligation. (Pg. 64 Jurado)

8. What is contravention of tenor?

9. Telefast vs. Castro (Discussed in class) There is contravention of tenor of the contract because of non-performance of the obligation

10. When Is there negligence? (pg. 66 Jurado) it is when there is absence of due care.

11. What is the test of negligence? (pg. 70 Jurado) Did the defendant in doing the alleged negligent act using the reasonable care and caution which an ordinarily prudent person would have used in the same situation?

12. RCPI vs. Rodriguez (Discussed in class)

13. If an obligation is breached and damages are to be awarded , what is the rate of interest? (6%, 12% = see Vitu rule in Eastern Shipping Case) If it is an obligation for laon etc you should follow the stipulated interest rate. If there is no stipulation the 12% is the legal interest. If the damage is not loan or forbearance of money the interest rate is 6% while the case is on going and becomes 12% when the judgment becomes final and executor – because after the judgment is final and executor y the same would be like a loan or forbearance of money.

14. Under 1171, why is the waiver void?

15. How does the law defines negligence? (Art 1173)

16. Cangco vs. Manila Railroad Co. (Discussed in class – see the text pg. 70 Jurado)

17. The question to be ask in cases of negligence? “Would an ordinary person do the same act in ordinary circumstances?”

18. Rakes vs., Atlantic, Gulf and Pacific (Discussed in class) Was there contributory negligence? Yes, there was…he contributed to his own injury by disregarding the company order not to walk along the rails.

19. What is proximate cause? The cause which in natural and continuous sequence such thing would not occur if proper care was use.

20. In negligence cases sometimes the courts apply what is called res ipsa doctrine….as apply to cases what is this res ipsa loquitur doctrine? .– Defined and applied in Republic vs. Luzon Stevedoring and Caltex vs. Africa.

21. Republic vs. Luzon Stevedoring & Caltex vs. Africa (Discussed in class)

22. Fabre vs. CA (Discussed in class)

23. 2 passenger vehicle collision…you were riding on one…can they be held solidary liable?

1. Metro Manila Transit vs. CA (Discussed in Class-doctrinal case…)-there was no factual evidence that the rules and regulations were being followed by the employees of the company.

2. Assume that typhoon hit the locality…because of the strong wind a part of the roof of one of the houses blown off and landed at your car. Can you recover damages from the owner of the car? (no, there is fortuitous event.)

3. Is a typhoon a caso fortuito? Yes

4. Vasquez vs. CA (doctrinal case… discussed the class.) there was negligence, for a caso fortuito to exempt the person, the caso fortuito must be the SOLE AND PROXIMATE CAUSE.

5. One basic requirement on caso fortuito is that there must be no negligence.

6. Requisites for caso fortuito: (pg. 87 Jurado)

7. Necesito vs. Paras (Discussed in class…doctrinal case)

8. If a passenger on a bus is injured because there was an accident due to a defect spare part manufacturer and they cannot be held liable…is that a good defense? (pg. 88 3rd paragraph Jurado) – the manufacturer in law is considered the agent of the carrier.

9. Juntilla vs. Fontanar – (discussed in class…doctrinal case) – no caso fortuito because the defendant is negligent because he was going at a fast speed and overloaded

10. Austria vs. CA – (Discussed in class) – all of the requisites for fortuitous event were, everything would have to be considered

11. MIAA vs. ALA you cannot invoke the Christmas holiday as caso fortuito for not complying with your obligation.

12. Bacolod-Murcia vs. CA (discussed in class) – there was negligence on the part of BMMC because they knew that it will not be able to use the land for its railway system because the contract bet. The land owner and BMMC will not be renewed anymore yet BMMC still contracted with the 3rd person.

13. What is the difference between the previous case and that of Philcom Sat vs. Globe Telecom? (In Philcom Sat vs. Globe Telecom, there was a stipulation in the contract “Section 8” that incase of non-ratification of the senate, it will be considered a fortuitous event.)

14. Co vs. CA (Discussed in class)

15. Southeastern College vs. CA (Discussed in class...doctrinal case) – negligence on the part of the school was not properly made or introduced.

16. 1176 simply raises presumptions under payment.: 1st presumption (Reason: logical presumption because the payment is usually deducted to the interest first before to the principal otherwise it would be prejudicial to the creditor If the payment would be deducted first to the principal; 2nd presumption: “MTSC vs. Medina”)

17. 1178 – basic rule on transmissibility…

18. The most fundamental classification are pure and conditional obligation.

19. Pure – if it is not subject to any condition and term or period. (demandable at once or immediately – but it must give a reasonable amount of time)

20. Condition (pg. 105 Jurado)

21. How can a past event constitute as a condition? (the proof or the ascertainment may constitute a condition because it may satisfy the elements futurity and uncertainty)– futurity and uncertainty are elements of a condition.

22. The quality of uncertainty…is the difference of term or period and condition. A term will surely pass or happen but not know when….condition may or may not pass or happen.

23. A term or period may either be suspensive(give rise to a oblig) or resulatory(extinguishment of oblig).

24. Park vs. Province of Tarlac (the nature of the condition is “if the condition is of such nature is such that the condition may not be fulfilled without transmission of right, there for the condition is resulatory.” why? - )

25. Take note of article 1180.

26. 1182 – very important provision (Memorize!!!!). – refers to the obligations which are potestative on the part of the debtor.

27. Why is the obligation void in 1182? (The law abhors illusory kinds of obligation because there is no actual obligation.)

28. Simple potestative and purely potestiative…what the law prohidbits is the purely potestative conditions. But if simple potestative condition we can recognize its validity.

29. Simple potestative – is a condition that presupposes not only the will but the realization of an external act. Example: right of 1st refusal in real estate(when I decide to sell my house I will ).

30. In connection with art – if the oblig is made a suspensive and potestative on the part or the creditor is valid–there will be no illusonary kind of obligation because the creditor will certainly be interested.

31. You do not apply art 1182 to a pre-existing obligation. (Important! Remember!!!!!)

32. Hermosa vs. Longara (Discussed in class – it is a mixed condition.)

33. Smith, Bell and Co. vs. Sotelo Matti (Discussed in class – the principle of substantial compliance article 1234)

34. Lao lim…if there is a provision in the contract that the lessor can keep using the property as long as his means can permit him…it violates the rule on mutuality of a contract.

35. Rustan Mills…(Discussed in class)

36. Security Bank vs. CA (Discussed in class) “mutual agreement” that was stipulated in the contract for payment of additional cost…SC said its potestative on the part of Security Bank.

37. Impossible conditions…article 1183...

38. When is the possibility or the impossibility determined…should be determine at the time the obligation is made…if at the time of the birth of the obligation the condition is impossible then the obligation is void-because by agreeing in an impossible condition shows that there is no seriousness or intent on the part of the debtor to be really bound. Different in testamentary conditions…these impossible conditions are disregarded or ignored.

39. 1184-85 – deal with positive and negative condition…

40. Positive condition – if the condition has become indubitable that the event will not take place, the obligation will be extinguished.

41. Negative – the condition is that the event will not take place…

42. The rule on constructive fulfillment…1186 – the debtor voluntarily prevents the fulfillment of the condition– requisites: (1) an intent to prevent the fulfillment (2) actual prevention of the condition. (Example: Lauingco, Papio, Portrait, rape)

43. 1187 – effects of the fulfillment of a conditional obligation to give–there is a retroactivity to the moment of the constitution of the obligation it is as if the obligation is fully effective from the moment the obligation was perfected. (e.g. obligation was contracted 11/2/1995, condition fulfilled 11/10/2001, it is as if the obligation was full effect from the time of the constitution of the obligation-why does the law provide for retroactivity: because the condition is merely accidental element in the obligation. But the law gives a rule of mutual compensation of fruits and interest, in unilateral obligation the debtor will appropriate the fruits and interest)

44. 1188 – (1) rule to protect the creditor (2) deals with the debtor; In relation to the 2nd rule where the debtor mistakenly pays the creditor, he is entitled for reimbursement from the creditor along with fruits and interest because it would be absurd if the law will not allow the recovery of fruits and interest in a obligation subject to a condition where the fulfillment of which is uncertain when it allows the recovery of fruits and interest in an obligation subject to a period where the occurring of such is very certain. (see article 1195)

1. What are the rules which should be observed when the object of the obligation is loss deteriorates, or improved? (Article 1189 MEMORIZE!!!!!!)

2. What are the rights entitled to the debtor as usufructuary? The debtor will have the same right as a usufructuary with respect to the introduction of improvements .

3. Necessary expenses are those which are expenses which are necessary for the preservation of the thing. (See other rights pg. 129 Jurado)

4. Useful improvements - This are improvements which increase the value or the utility of the thing (fence around the property)

5. When is a thing considered lost – (art 1189 no. 2)

6. When would a thing be considered to have gone out of commerce?–(when it is impossible to legally transfer or acquire the thing)

7. What is the basic pre-condition before rescinding a contract?

8. How can you be held liable when you in fact don’t have the obligation to deliver the thing until the condition is fulfilled? (Basic assumption in 1189: You cannot be held liable for damages until the condition is fulfilled.)

9. Article 1190 – deals with resolutory condition. (Apply the same rules as in Article 1189.)

10. There is an obligation of mutual restitution under art. 1190 to return to each other what were given. Are they obliged to return fruits and interest as well? (Yes, because every single trace of the obligation are obliterated because as a result of the occurrence of the condition will render that it is as if there was no obligation at all.)

11. Article 1191 (One of the more important provisions!!! MEMORIZE!!!!!!!)

12. Even if there is no express stipulation in the contract…the power to rescind is always implied upon non-compliance of the obligation. (As long as the obligation is reciprocal in character the power to rescind is implied.)

13. When are obligations are considered reciprocal?

ANS: (1) Created or established at the same time, (2) out of the same cause, (3) resulted in Mutual relationship of creditor and debtor between the parties.

14. Songcuan vs. Alviars (Discussed in class) – the obligation would only be reciprocal if they dependent upon each other obligation. In the case

15. Can there be partial fulfillment or rescission under article 1191 (Yes, case in point, Central Bank vs. CA – discussed in class – there was rescission on the unreleased P63,000 part of the loan.)

16. Ayson Simon vs. Adamus – discussed in class…reiterates where a injured party can opt for the rescission of the obligation even if he already chose the fulfillment in cases where the fulfillment would become impossible.

17. Basic rule in rescission of reciprocal obligation is that there must be breach on one of the parties. And the breach must be substantial in character. A casual or slight will not suffice a rescission.

18. Sung Fo and Co. vs. – mere slight or casual breach of contract or obligation will not suffice rescission of obligation

19. Roque vs. Lapuz (Discussed in class) – why was the breach considered substantial? - because the agreement of the parties was to pay in 120 installment payments but the defendant only paid 4 installments so it was considered substantial.

20. Whether there is provision in the contract can recission be made whether judicial or extra-judicial if the breach is merely slight? (No, the breach must be substantial as to defeat the very object of the obligation.)

21. If there is no provision in the contract the injured party must go to court but if there is provision in the contract the injured party can recind extra-judicially. The decision of recission of the injured party can be questioned in court by the other party. (Notice is always required.) There are two possibilities: 1. to accept the decision of the injured party; and 2. to question the basis of the recission.

22. Angeles vs.Calasanz – discussed in class (the breach is merely slight in character…the recission was not realy justified.)

23. Barredo vs. Leanio – discussed in class…there was no basis for recission because the breach was merely slight in character because the buyer already paid P200,000 to the seller.

24. Palay vs. Clave – Discussed in class…there was no notice of the recision

25. Contract of adhesions - Is one where the provisions come from only one of the party.

26. Damages can be recovered in either case – A entered in to a contract with b for the use of the property for a period of 5 years with a rent of certain amount. For 6 months non payment by A…can B recover damages for the remaining years? No, because only damages which are compatible with the idea of recission may be awarded. (See pg. 137 Jurado)

27. What is an obligation with a period? (See pg. 140 Jurado last paragraph)

28. When is a period suspensive? When is it resulotory? – (See pg. 141 Jurado last paragraph)

29. I will pay you as soon as possible- is it subject to a condition or a period? Period under Art. 1197

30. What is an acceleration clause – it is a clause where upon default of the debtor with one or more payment will make the whole obligation demandable.

31. Victoria’s Planters vs. Victoria’s Milling Company (Discussed in class – see pg. 144 Jurado) – caso fortuito excuses you in the fulfillment of obligation therefore you don’t have to make up for it.

32. Article 1194 – in passing only…not so important

33. Article 1196 – general rule is that the period is established for the benefit of both.

34. Article 1197 – The phrase “Once fixed by the courts, the period cannot be changed by them”

35. Prescription cannot be waived. In counting the prescription period , the first 10 years will not be counted…the 10 year period will start after the first 10 year period.

36. Exemption from the general rule that the court will only fix the period and the courts will fix the period and have a specific performance: (1) When the evidence would be the same for the fixing of a period and specific performance. (2) When the purpose of the fixing of the period is to simply delay. – Borromeo vs. Court of Appeals (Very Important Case!!!!)

37. When does the debtor lose the right of the benefit of the period? (Article 1198)

38. A mere attempt to abscond will immediately lose the benefit of a term or a period.

39. In case of loss it doesn’t matter whether the cause was caso fortuito or due to the fault of the debtor.

40. Incase of impairment the debtor will lose the benefit of the term or period if it was caused at his fault.

41. Gaite vs. Fonacier

42. When is a person insolvent? (pg. 159 Jurado)

43. Central Philippine University vs. CA – discussed in class

January 22, 2008

1. What is application of payment? (See Pg. 264 - Jurado)

2. What is the importance of Application of Payment?

3. Why must the debts be of the same kind?(because there will be no uncertainty if the debt are not the same. In Application of Payment there is uncertainty on which of the obligation will the payment be applied to.)

4. If the debts are of the same kind, all of the same amount, if I pay you 1k and you accept the 1k is there a possibility of uncertainty? Yes.

5. Who has the right of choice? (Debtor)

6. If the debtor does not make an AP during the payment, can the creditor make an initiative in applying the payment? (Yes). How? The creditor can make the application of payment with the approval of the debtor. The debtor can impugn the application of payment made by the creditor.

7. Supposing they cannot agree, the application of payment will fall under the provision of article 1254. Where the payment will be applied to the debt which is more burdensome/onerous to the debtor.

8. The creditor cannot be compelled for a partial payment…the debtor cannot insist that his payment will be applied to the debt which is greater in value than the payment. Then if the parties cannot still agree article 1254.

9. Understand 2nd Parapgraph of 1252 – see pg. 268

10. Read Regalado Case about application of payment. (Beautifu case!!! Sabi ni sir)

11. The mere silence of the debtor after receiving of statement of account is not the consent required by law. There is no estoppel. The statement of account is not the receipt contemplated by law in Article 1252. The rent was more onerous than the payment of the heavy equipment.(Regalado Case)

12. Are there any exeptions in the 1 creditor 1 debtor requisite? If the partnership is being represented by a managing partner. If the debtor owes the partnership and the managing at the same time. – if the managing partner issues a receipt for the credit of his own, the payment will be applied in proportionate between the debt to the partnership and the managing partner.

13. Is it possible to have more than one debtor? Yes in case of a solidary obligation where one of the solidary debtor owes the creditor aswell.

14. Exceptions in the 3rd requisites.

15. Article 1253 is merely a directory in character.-SC

16. Supposing the debtor decides to apply his payment to the less burdensome debt, can you do that? Yes17. When debts are same burden it is applied pro rata18. How do you determine the most burdensome?

19. Solidary vs. Sole debtor – Sole debtor is more onerous according to Tolentino(Idol ni Sir!ahaha)

January 24, 2008

1. Why the law require a previous tender of payment? If the creditor accepts the tender of payment there would be no need for further action since the obligation is deemed to have been extinguished.

2. Consignation without a previous tender of payment is allowed in 1256 of the civil code. (5 exceptions)

3. Problematical: refuse to issue a receipt without a just cause(by itself will mean that there would be a previous tender…one possible situation is even before can make a tender of payment the creditor makes it clear that he will not issue a receipt….(reasonable way of interpreting)

4. Actuall offering to the creditor the thing which is due...(if money, offer legal tender-must be the exact amount of the obligation otherwise it will not be a valid legal tender)

5. Roman Catholic vs Malolos. – the mere fact that, there must be actual, positive/clear act and unconditional

6. Special Requisites for a valid tender of payment and consignation – memorize!!!!

7. Why does the law require previous notice before consignation? - to give the creditor time to re-consider his decision.

8. How do you deposit the thing with the court? – file a case againts the creditor (state the compliance of requisites for a tender of payment and consignation.) at the same time he will be deposit the (in properties, deposit the title to the court and have them appoint a receiver; receiver – person appointed by court to take care of the property.)

9. Why does the law require a second notice? To give the creditor time or opportunity to re-consider.

10. If the creditor in his Answer he prays that the thing be adjudicated in his favor it means there is already acceptance on the part of the creditor.

11. Release under article 1261 means only in solidary co-debtors and they are only released only in solidarity and not on their respective shares.

12. Rural Bank of Caloocan vs CA – discussed by sir. – a departure on a strict compliance in the requisites in a valid

13. The requirements for a valid payment and special requirements must be complied with in order to have a valid tender of payment and consignation.

14. What is loss?

15. Can generic object perish? No

16. If the object of the obligation is lost the obligation is extinguished

17. When may the debtor be held liable?

18. A obliged to deliver to B a wrist watch, it was robbed. Is A liable? – no you are not liable because in robbery there is risk to ones life. In theft chances are you will be negligent, therefore you are liable.

19. What is the effect of loss in reciprocal obligation?

20. A to render some service to B and B to A as well. Without B’s fault his service has become

21. Tolentino: if one of the reciprocal obligation is extinguish the other must also be extinguished. This is deducible from articles 1504 – incase of the sale of personal property if prior to delivery the thing is lost there is no obligation to deliver the price, Article 1655 – in a contract of lease if the object being lease is lost the obligation is extinguished, a contract for a piece of work if the thing is lost the contractor has no right to receive payment this is under Article 1770; JBL Reyes – even if one of the obligation is lost through caso fortuito the other remain, under 1191, exceptions the same 3 articles cited by tolentino…in the civil code. –sir is inclined with the view of tolentino xempre!!!!

22. What is the effect of partial loss – it depends upon the circumstances surrounding the obligation. (Fighting Cock – one of whose legs is injured is considered equivalent)

23. Exception to article 1265 - in cases of natural calamities

24. Labayen vs. Talisay-Silay Miling Co. – discussed by sir.

25. 1266 by its very own terms refers to an obligatio to do therefore it does not covers to give…PNCC vs CA – discussed by sir. Dummy corporation of marcos…-cannot invoke 1266 because their obligation is to give, the article is for obligation to do, 1267 is invoked aswell but you can only use 1267 in absolutely very exceptional circumstances so that equity would demand that one of the parties would be released. – in under case the case – NAGA tel co. vs CA the court accepted article 1267 for the reformation of the contract and damages. When parties to an agreement the basis is the circumstances when they contracted the obligation…SC allowed the reformation. General Rule is good, only under exceptional circumstances that there may be recourse to the equitable principle under 1267.

January 29, 2008

1. What is condonation?

2. What distinguish condonation from other modes?

3. Is there any required formalities is required in condonation

4. In express renunciation what should be the form required?

5. What are the forms of donation?

6. Art 1270 par. 2, what is inofficious?exceed the limit prescribed

7. What is legitime? Property of the estate at the time of the death.

8. It is consider inofficious if it impairs the legitime.

9. Collation?

10. Condonation may also be implied?

11. Art 1271 refers to the delivery of private documents

12. Why is only private document not public documents?

13. National archives where the public documents end up.

14. 1272 is collorary to 1271

15. Art. 1271 par. 2

16. What is pledge?

17. What is confusion?

January 31, 2008

1. What is compensation? (see Jurado pg. 307)

2. What are different kind of compensation? (see page 309 Jurado)

3. Can Legal compensation occur when one of the parties is incapacitated? (not sure of the answer) – although it is seemed to be in the positive…

4. Legal Compensation, takes place automatically.

5. What are the requisites of Legal Compensation? (see Article 1279 – page 309 Jurado) – Memorize!!!!!

6. When do you consider a thing consumable? (see page 314 Jurado, last paragraph)

7. What is meant by Controversy and Retention? (see page 315 Jurado, last paragraph)

8. Can there be legal compensation if the objects due are non-consumable? Yes as long as their fungible, even if the law says consumable, it meant to that of fungibles.

9. A owe B 100K. Under a different contract B owes A 100K. Both debts are due and demandable, will there be legal compensation? Yes. Will it be total or partial? Total

10. Assume A owe the government 100k by way of taxes. Under a different contract the government owes you 100k, can there be legal compensation? No. Why? Because taxes do not arise from contract therefore there is no debtor creditor relationship bet. Taxpayer and Government. – (Francia vs. IAC)

11. Lets assume that A owe B 100K payable on demand. Under a different Transaction B owe A 100K which is due and demandable. Will there be legal compensation? No, if A did not make a demand the debt is not yet demandable.

12. A is depositor of BPI of 5M. A borrowed 3M from the bank. The debt is due, can there be legal compensation? Yes. Because in the contract where A deposited 5M to the bank there is a creditor and debtor relationship because the contract with the bank is that of a simple contract of loan. Same is true with the loan attained by A. – (see Gullas vs. PNB page 313 Jurado)

13. Lets assume that A is a stock holder of SMC at 5M. Under a different Transaction A purchased goods with SMC and owed them 3M. Can there be legal compensation? No, when you purchase stocks to a corporation you are not lending them money. Trust Fund Doctrine - All corporate assets…sorry hindi ko natype eh…tignan nalang sa case ni Garcia (see Garcia vs. Lim Chiu Sing see page 311 - Jurado)

14. What are the compensations explicitly prohibited by law? (see article 1278 and page 321 – Jurado 1st paragraph)

15. What is a contract of comodatum? - is a common contract of good neighbors, when a person lends a fungible object to another gratuitously

16. When you lend something there is an element of trust the person to return the thing borrowed. That is why the law prohibits it because it violates the trust and confidence.

17. A entrusted to B a bicycle for safe keeping. B under a different contract is obligated to deliver a same bike to A. Can B set up legal compensation? No, because it is a contract of depositum which protects the rights of A. And Article 1287 prohibits compensation. In a contract of depositum the depositor can set up compensation while the dopsitory cannot. In a contract of commodatum, the lender can set up compensation while the borrower cannot set up compensation. In a contract arising from crime, the offender cannot set up compensation while the offended party can. Therefore it is facultative in nature since only one of the parties can set up compensation.

18. If one of the parties has the benefit of the term or the period is also considered facultative in nature.

19. D owes C 12K. C owes E 12k. E owes D 12k. All of this debt are due and demandable. Will there be legal compensation? None of the parties are bound to be principally debtors and creditors of each other.

20. D owes C 12k. E is Guarantor. C owes E 8K. Can D set up legal compensation? No because D is not a creditor of C, E is the one who is owed by C

February 5, 2008

1. What would be the consequence if the creditor assigns his rights to a third person? (see Article 1285)

2. What is novation? (see pg. 323 – Jurado)

3. How does novation differ from other modes of extinguishing an obligation? – it extinguishes an obligation and at the same time gives birth to a new obligation.

4. When is the novation: Objective – change the object or subject; Subjective – change/substitution of the person of the debtor or creditor. Mix – obvious ba?ehehe

5. When is it partial/total and when is it modificatory/extinctive? See pg. 326

6. When is it express, when is it implied? See pg. 325 – Jurado

7. Reference to no. 6 the equivocal declaration is for the extinguishment of the old obligation. (declaration in unequivocal terms)

8. The incompatibility must be real and on every point they must be incompatible to each other otherwise both obligation must be complied with.

9. A owed B 1M, under a different contract

10. A shortening of the period would amount to a drastic change in the object in novation.

11. What are the requisites of novation?

12. When would there be novation even if without the consent of all the parties? Expromission. Orig debtor not necessary

13. When is there expromision and delegacion? And how do they differ? (see pg. 336 - Jurado)

14. There can never be substitution without the consent of the creditor.

15. A borrowed money from B and pay 6% interest per annum until the debt is fully paid. Later parties agreed to increase the interest to 8%, is there an extinctive novation? SC agreement in payment of higher interest does not result in an extinctive novation, it merely modificatory in the absence of certain circumstances.

16. A entered into agreement of promissory note to B. A issued a check, is there novation? No because the check and promissory note can stand together.

17. A borrowed 5M from B with mortgage of H&L. Later the chattel mortgage the car of A. Is there novation? The mere giving of additional security does not give rise to novation since the two securities do not contradict each other.

18. A is defendant in a case which B filed. The court ordered A to pay B 1M. The judgment was final and executory. A pleaded extension of time to B and agreed. Signed an agreement and mortgage of land of A. Is there novation? No. because the two contracts can stand together.

February 7, 2008

1. If there is merely an increase in the interest, extension time, additional security, change in the signatory if the contract involves a construction of a building and there is slight alteration there is no novation.

2. Reduction of time there is novation since there is substantial change in the principal condition of the obligation.

3. Ajax marketing vs. CA – discussed in class. – there was no novation, petitioner merely became a co-debtor or surety.

4. Differentiate the previous case with the spouses florante vs. bautista. – there was a stipulation on the 2nd promissory note that it will cancel the previous promissory note.

5. What are the requisites of novation stated in the previous case?

6. A borrowed 1M from B, The debt will be paid not later than Dec. 1 2007, sometime in November 2007 C went to B and told that if B will agree C will pay A’s debt, is there substitution of debtors? No, because there is no indication that there is agreement for the release of the old or original debtor. He becomes a co-debtor or depending upon the circumstances he becomes a surety.

7. A owes B 1M. C went to B and told him that “let me be the one to pay the liability of A and release the latter from his liability” is there substitution of Debtor? Yes, expromission. Supposing that when the debt becomes due C did not pay because insolvent, can B proceed against A? No, because there is already expromission. (see Art. 1294)

8. Assume this time the initiative still came from C but it was done with the knowledge of A, in the presence of A, C told B that “let me be the one to pay the liability of A and release the latter from his liability” when the debt became due C could not pay? Yes, even if it was done through expromission but if done with the knowledge of the old debtor the insolvency will revive the old obligation of the old debtor. (see pg. 342 – Jurado, last part of 3rd paragraph )

9. Assume that what happen was delegacion. A with C went to B and offered substitution of debtor and B agreed. When the debt became due and demandable C was insolvent only after substitution but before the debt become demandable, can B proceed against A? No, because the insolvency must have occurred during the time the substitution occurred and it must be of public knowledge or known to the original debtor.

10. Supposing C was already insolvent at the time and was public knowledge and known to A and B, and B accepted, can there be revival of the obligation of A? No, he is estopped from doing so by his acceptance.

11. Same problem delegacion parin daw, when the time for payment came this time there was no insolvency, C simply refuses to pay. Can B proceed against A? No because only insolvency existing at the time of the delegation (when it is of public knowledge or known to the debtor at the time of delegation) is the ground for revival of obligation.

12. 1294 (expromission), if the substitution is with knowledge and consent of the original debtor, the correct and logical interpretation is as long as the substitution was done thru expromission upon the initiative of the debtor whether or not it was done with the consent of the old debtor…(reconcile notes of fhortz and joey…hindi ko nakuha eh…)

13. What is the general rule? Obligation is extinguished the accessory obligation will be extinguished except: last part of article 1286. What is the reason for this provision (1296)?

14. D borrowed 100k from C, G agreed to be a guarantor for the debt. Before the maturity of the debt D proposed to C that X will take his place as debtor. X and C agreed, delegacion, will G remain liable? If he did not give his consent he should not be liable.

15. 1297 simply reiterates the requisites for a valid novation where there must be a valid old and new obligation.

16. 1298 deals where the old obligation is void.

17. A gambled with B. A lost 10k to B and issued a PN. Later on, A entered into an agreement instead of paying 10k A will deliver a ring. Will there be a valid novation? No, because the old obligation is void there can be no novation.

18. Supposing that this time A entered in to a contract whereby A obligated to deliver to B a particular car however your consent is vitiated. Later the 2nd contract instead of delivering the car A will deliver a particular diamond ring. Is there a valid novation? Yes, because the old contract is voidable, by entering into the new contract the old contract is cured by the implied waiver of right of A to declare the nullity of the old contract.

19. Assume the original obligation is subject to a condition and the new condition is also subj to a different kind of condition. Supposing the condition attached to the old oblig is fulfilled is there a valid novation? No because the 2nd contract is not valid since the condition is not fulfilled.

20. Assume this time that the condition of the new condition is fulfilled and not the old obligation will there be novation? No because the old obligation cease to exist with the non fulfillment of the condition.

21. Supposing the conditions are incompatible, which should be fulfilled, which will be fulfilled? The condition of the new obligation must be fulfilled.

22. If the original obligation is subject to a condition and the new oblig does not say anything about any condition. Is the new condition subject to the same condition? Yes, article 1299 because if the condition is not fulfilled you don’t even have a valid novation

23. What are the types of subrogation?

February 12, 2008

1. What is a contract? – see article 1305, pg. 351 – Jurado

2. Can there be a contract if there is only one party? Why? No. There must be always at least two person/parties. There can be more than two.

3. What about this autocontracts, are they not en exceptions with respects to the number of parties required? (see pg. 354 – Jurado, 1st paragraph) – in reality there are still two parties involve in the contract.

4. Marriage is a special contract, how does it differ from an ordinary contract? – (see pg. 352 – Jurado)

5. What are the stages in the life of an ordinary contract?

6. What is the contract implied in fact? (defined in UP vs. Philab); what were the peculiar facts and circumstances that evidenced that there is actually contract implied in fact in the UP case?

7. What are the fundamental characteristics of contracts? (see pg. 354 – Jurado)

8. Autonomy of contracts, generally, under article 1306, the parties can stipulate anything provided…see the article…

9. When is a stipulation or a contract contrary to morals?

10. Supposing A borrowed 1M to B, instead of paying interest A agreed to cohabit with B. Is it contrary to public morals? Yes…

11. When is an agreement contrary to good customs? How does morals differ form good customs?

12. What is a custom?

13. When is a contract considered contrary to public policy?

14. Is actual to injury necessary for a contract to be considered contrary to public policy? No, mere tendency is enough

15. Ysmael vs. Barredo – (case is in the book pg. 362 – Jurado) – how can that agreement possibly injure the common good? – it would allow the shipping company to take whatever they want and show that it is lost and the shipper will just be compensated to a much lower price.

16. Sy Suan vs. Regala – (case is in the book pg. 365 - jurado) – what did the SC say was the possible injury could there be? – the employment of intermediaries will cause graft and corruption, it is sufficient that the mere tendency exist for the contract to be struck down for being contrary to public policy.

17. Cui vs. Arellano University – (case in the book – pg. 366 - Jurado) – scholarships are not suppose to use as usiness gimmicks to attract brillan students and keep them in the said school.

18. Leal vs. IAC – what was the provision which was contrary to public policy? – that if the buyer would want to sell the property he would have to sell the property to the seller and for the same price. – contrary to public policy because it amount to unrestricted perpetual restriction of right of ownership.

19. Ferrazzini vs. Gsell – (case in the book pg. 363 - Jurado) – against public policy because it is a restriction of trade and if the petitioner would want to make a living he has to go abroad. Thus it is undue and unreasonable.

20. Del Castillo vs. Richmond (case in the book – pg. 364 Jurado) – what is the difference bet. The case in no. 19? – at that time legaspi was just a municipality and has a little population which is insufficient to for more drug stores. – there must be a limitation as to time and place considered reasonable.

21. Ortigas and Co. vs. Fiate Bank – the exercise of police power by the state cannot be limited by a contract, there is a reservation for the state for the exercise of police power.

22. Trias vs. Grogorio Araneta –

February 14, 2008

1. When is a contract considered nominate/innominate? (see pg. 357 - Jurado)

2. Memorize 4 latin innominate contracts (pg. 367 -Jurado)

3. Perez vs. Pomar – (Case in the book pg 368 - Jurado)

4. What is mutuality of contract? – equality between the contracting parties

5. Can the determination of validity or performance of a contract can be left to the will of a third person as long as it is not inequitable. (Article 1309), cannot be left to the sole will of one of the contracting parties.

6. Rustans Paper vs. IAC -

7. Assuming A is renting an apartment owned by B, under the contract A can continue renting as long as A can pay the rent. Would that be a valid provision? No, it is a violation of the mutuality of contract.

8. In some contract of loan there is usually an escalation clause regarding interest, will that not be violative in the mutuality of contracts? – an escalation clause providing for the rate of interest provided that the increase in rate is based on an increase in interest rate provided by law or the monetary board, and there must be a de-escalation clause. (PNB vs. CA)

9. Spouses Florendo vs. CA – May a bank unilaterally increase an interest on a housing loan of an employee based on the reason that the said employee already resigned? – in the contract bet the employee and land bank there was no stipulation that resignation will be a reason for increasing the rate interest. If there was an agreement then it would have been valid. Therefore it cannot be done unilaterally by the bank.

10. There are some contractual type of agreement render the mutuality of contracts illusory but none the less valid. What are this type of contracts? (see page 370 last paragraph – 371 1st paragraph – Jurado)

11. Liebnow vs. Phil. Vegetable Company (case in the book pg. 371 – Jurado) – this is an example where a contractual agreement referred to in no. 10

12. Taylor vs. Uy Tieng Piao – (case in the book pg. 372 – Jurado) – this is an example where a contractual agreement referred to in no. 10

13. What is the rule or principle of relativity of contracts? – (article 1311) as a general rule the contract is only binding upon the parties, their heirs, and assigns.

14. Uy vs. CA – (8 parcel of lands; loss of commissions)(discussed in class in relation to Article 1311 regarding 3rd persons bound in a contract)

15. Exceptions to the theory of relativity – (see pg 377 - Jurado)

16. What is the basis of the obligation of the third person in article 1314? Obligation arising from tort/quasi-delict.

17. A owns a land, borrowed money to B with the land mortgaged, mortgage was registered. Later on a sold the land to C. Is C bound? Yes, he has come into a possession of a contract creating a real right under article 1312. – if a contract creates a status, a 3rd person is bound, collective contracts or group contracts, (such as CBA’s)

18. One of the most important exceptions to the rule relativity is the 2nd paragraph of article 1311. – (Memorize Article 1311!!!!)

19. A and B entered into a contract where A will construct a 10 story building and B will pay 10M. A ask if they could include a stipulation whereby B will pay 1M out of the 10M to C because A owed C 1M. Is that a stipulation pour autrui? Yes, it satisfy all the requisites;

20. Assumed that A did not owe anything to C, would there still be stipulation pour autrui? – a stipulation pour atrui may involved where a contracting party owes a 3rd person and agreed that he benefited, or where it is purely gratuitous.

21. Who can ask for the revocation of the stipulation? All the parties. Can one party revoke the stipulation? No, there would be no mutuality. – Kauffman vs. PNB stated who can revoke the stipulation…that would be both parties or the party who caused the stipulation.

22. Coquia vs. Fieldman’s Insurance Company – (case in the book – pg. 381 – Jurado) – Stipulation pour autrui…

23. A forced heir who is entitled to a legitime may sue for the annulment of the contract if it was to defraud him, the heir is in the same chair as a defrauded creditor. – Concepcion vs. Sta. Ana

24. Uy vs. Leonard, there is merely an incidental benefit and not a stipulation pour autrui. There was no deliberate conferment…read carefully…very scholarly daw sabi ni sir… (Why were the material name mensioned if there was no

deliberate conferment to the materialmen? Because was only by way of extreme causion because there were certain provision of the civil code which makes the owner of the land liable to the material men. But there was no deliberate conferment of benefit)

25. Remember the requisites for liability…under article 1314.

26. Malice in the sense of ill-will is not required but malice in the sense of no legal justification is required.

27. Rule of consensuality of contracts

28. Article 1317: you don’t apply 1317 if the contract was not entered into in the name of another. Example: A owned a car and B sold it to C without A’s consent. 1317 would not apply because B entered into a contract in his own name.

Sanches vs, rigos 45 scra368

Natino vs. iac 197scra323

Guzman bucaling and co vs bonavie 86150 march 2,1992

Ang yu asuncion vs ca 109125 dec. 2 1994

Equatorial realty vs. Mayfair theater 106063 nov 21 1996

Until article 1324

February 19, 2008

1. The law specifies that the offer must be certain and absolute. If it is not absolute or varies in any degree or it does not fit exactly with the offer it would constitute a counter offer. – counter- offer needs an unqualified acceptance.

2. The acceptance must be a mirror image of the offer.3. Limketkai vs. CA – 4. A wrote a letter to B offering to sell to the latter 100 bottles of Red wine and A replied agreeing to the price but he would

like to buy 400 bottles- amplified acceptance – in the case of an amplified acceptance there will be a perfected acceptance with regards to the offer…

5. Can there be a perfected offer made to a public at large? Yes, if a seller published the offer..what is the basis of the obligation? – the better view of the obligation is a contract because that member of the general public and did the act generated from the offer accepted the offer.

6. Sometimes the acceptance maybe made to letter or telegram…(article 1319 2nd paragraph), when is it perfected? – from the moment the acceptance comes into the knowledge of the offeror.

7. Expedition theory, Reception theory, cognition theory, manifestation theory – it is the cognition theory which we follow in contracts. – (see pg. 398 - Jurado)

8. Even under the cognition theory the rule of constructive knowledgeis applicable, even if the offeror has no knowledge the contract could

9. A wrote a letter to B offering to sell his lot for 5M. B decided to accept the lot and wrote a letter. Delivered on dec. 1, A was having a 2nd thought…when the letter was delivered A did not opened the letter instead wrote a letter of withdrawal…applying the rule of constructive knowledge there is a perfected contract.

10. Assume A was in manila and B in AC, A wrote a letter same offer as in prev. no. B decided to accept and sent a letter of acceptance. The letter was delivered on Dec. 1 but A was in cebu at that time. While in cebu A wrote a letter of withdrawal received by B on Dec. 4, Dec. – no perfected contract because when the acceptance letter was read by A he already made a withdrawal letter previous to that. A withdrawal of offer is effective immediately – Laudico vs. Arrias. & Azuncion vs. CA

11. An acceptance made by letter or telegram which has been mailed, it still may be withdrawn…(Manresa – if acceptance can, the moment the offeree makes his acceptance he is the first to become aware that there is a meeting of minds therefore he is not permited to withraw) (Tolentino – there is only one moment of a contract, in the moment when the acceptance comes to theknowledge of the offeror therefore he still can withraw.)

12. An acceptance maybe express or implied. 13. “if you are interested in accepting the offer your acceptance must reach me not later than Jan. 1, 2008” – the messenger

had accident and the letter reached only on January 2, no perfected contract, it does not matter whether the delay of acceptance was bec of fortuitous event.

14. 1323 – important provision!!! (Memorize)15. What is the effect of civil interdiction? – cannot manage your own property or dispose it by contract inter vivos. (restricts

the capacity to act of a person under civil interdiction)16. A wrote a letter to B offering to sell his H&L in Manila 5M cash. B accept and wrote a letter of acceptance and mailed it to A,

Before A could receive the acceptance B became insane,,,there is no perfected contract.17. Conveyance of acceptance - Requires a proper form of acceptance…(e.g. assume A wrote a letter to B donating his lot in QC

attached with the deed of donation already signed. B receive the donation and accepted called B and said the same and signed the acceptance, mailed it back to A, before A could receive the acceptance B became insane, no perfected donation, calling A informing him of the acceptance is not sufficient, there is no proper conveyance.)

18. 1324 – important!!!19. Exception: when can the offeror just not withdraw…(a preparatory contract – option founded upon a consideration) –

option money (if there is no consideration the option is not binding.)20. Sanchez vs. Rigos – Remember!!!!! – very logical daw sabi ni sir. As compared to the Natino case.21. Right to first refusal22. A leases a lot to B where in the contract there is a stipulation of right to first refusal. It is a valid provision, it is binding, what

consideration will support? Same consideration that supports the lease contract. Supposing there is a breach, B dedcided to sell the property to X without giving the option to A, it is a violation of the right of A, what is the right of A? (a right of first refusal is a innovative contract…right to recover damages based on human relation,,,according to other decisions if violated the injured party has certain substantial remedies: can ask for the recission of the deed of sale, can compelled to sell the property at the same price sold to mr. X and recover damages.)

23. Vitug – only damages based on Human Relations; Other decisions – damagaes, recission, or compel to sell the property to A.

24. Important Fact!!!1 (In the cases decided by SC where there is violation of right to first refusal the third person was in bad faith…equatorial, guzman cases!) if the 3rd person is in good faith all the remedies are not available except for the damages to be indemnify.

February 21, 2008

1. Mere advertisements of things for sale are merely invitations (General Rule). – even a mere advertisement may constitute – A cause to advertise in the newspaper, subdivision lots, reasonable, call etc…merely an invitation.

2. Same in the case of advertisement for bidders…the advertiser is not bound to accept the highest bid or the lowest….they have the right not to accept. – simply an invitations for the public to make a bid.

3. 1327 – who are incapacitated. (see book and provisions) – important provision!!!! – remove emancipated minors…4. Certain situations/exceptions where a minor may actually be bound by the contract – 1. When he actively misrepresent his

age. – it is necessarily that the minor should have at least passed the age of puberty otherwise it is not possible for him to misrepresent his age and mislead the other party. – (see other exceptions in pg 412 – Jurado)

5. In one case, sy suan vs alcantara – dissenting opinion of justice padilla…even if the minor has misrepresented his age he should not be held liable because the reason for a minor is prevented from entering into contract is to protect the said minor,,,why should you punish such.

6. PD 734 – allowing minors to open savings account.7. Lunatic – may pagasa ka pa…there is lucid interval, imbecility – walang kapagapagasa..case of perpetual eclipse..can never

enter into contracts.8. There are certain situations where certain indi – take note of article 1490 of the civil code, 9. Take note of PAGE 10. TAKE NOTE OF THE DISTINCTION BET. PROHIBITION AND INCAPACITY11. VICES OF CONSENT – 1330

12. Take note of Article 1331!!!!13. Mistake as to the identity ordinarily will not make the contract voidable unless it was the principal moving force were the

other party entered into the contract for that reason.14. Assume A bought from B a pocket book because A thought it was a thrilling story. A cannot sue for the contract ‘s

annulment for the reason of boring…no it was only incidental.15. A bought from B a H&L because he thought that the neighbor was Kristine Hermosa. 16. Assume that A bought an Engagement ring (diamond) from B….then nabusted si A,,,he cannot sue for annulment, No. –

mistake with respect to his motives not vice17. A bought 100 sacks of cement from B intending to re-sell them. He discovered that the price wehre he will re-sell the

cements was lower…he cannot sue for annulment of contract.18. Only mistake of fact can possibly serve as a basis19. Article 1334 – Take Note!!!! – pareho silang nagkamali…may vitiate consent.20. Asiain vs. Jalandoni – discussed. (see book pg. 425 – Jurado)21. Article 1332 – take note!!!22. Mutual Error – the error must be mutual if not it will not provide a basis for annulment.23. Violence and intimidation – Difference, violence involves actual use of force. (Memorize Article 1335!!!!! And 1336!!!!)24. Regardless of the source of the intimidation or violence it will still vitiate consent resulting in a voidable contract.25. Relative conditions must be considered in determining violence or intimidation – age, strength…ect. 26. In connection with threat or intimidation…case of Martinez vs. HSBC (see pg. 434 - Jurado) – remember.27. One who consents although reluctantly gives his consent just the same. It is not vitiated there is no basis for the annulment

of the contract.28. Article 1335 grave peril upon the person…are not used in their technical sense under RPC but in generic sense refers to the

threat against the persons integral29. Undue influence…takes improper advantage over the will of the other…there is a substitution of will.30. Consider everything…relation between the parties, financial distress, etc. it is always difficult to create a case under the

basis of undue influence …the law does not prohibit any form of influence but only undue ones….31. Fraud – it is which might be present at the time of the contract…different from the one in 1170 which is fraud in the

performance in the performance – conscious intentional evation evaded the obligation…32. Fraud in 1338 – one of two kinds…serious (dolo causante – use of insidious words or machinations...) – it is the principal

moving fraud which induces the party to enter into contract.33. Dolo incidente of incidental fraud – not the principal inducement in the contract…the party would have still entered into

conract even if he have knowledge of the fraud. 34. Woodhouse vs. Halili – there was only incidental fraud…because halili would still have entered into contract.35. Dolo causante –principally moves the party to enter into contract…if present in the birth of the contract…it will be vitiated…

illustration of eguaras vs. Eastern …see pg. 440 – Jurado36. Will the mere silence of a party constitute fraud? – if you have a duty to reveal facts and do not disclose the same then

there is fraud.37. A and B are partners in a Real Estate Co. They own one large land in a remote area in Cavite 20P per SQM. A learned from a

source that SM will be constructed. A bought the shares of B without telling him about the SM…there is fraud because partners are duty bound to by trust and confidence therefore there is duty to disclose.

38. Take note of Article 1339.39. Exaggerations in trade…not necessarily fraudulent specially when the party has the capacity to verify the facts.40. Mere expressions of opinion as a general rule are not considered fraudulent except when made by an expert the other

party relied on it.41. If guilty of mistake there can be no indemnity for damages…fraud can…42. Misrepresentation must be mutual and substantial.43. Difference in article 1342 and 1346…44. Illustration of a contract which is invalid because of misrepresentation.45. Rural Bank of Caloocan vs. CA.46. If the fraud employed by the party is causal in character the contract is voidable…if the fraud is incidental it will merely

entitle the offended party for damage.

47. Simulation of contracts…absolute and relative…48. Absolute – there is no intent to be bound at all.- this is the essential requisite of an absolute simulation. (Usually done by

people to run away from creditors)49. Relative simulations – usually happens in Filipino families. Make it appear that something has been sold but it was in reality

a donation. – valid as long as it does not…see provision article 1346.

February 26, 2008

1. Can all things be an object of a contract? Generally yes subject to exceptions – (see pg. Jurado)2. Can there be contract involving future inheritance? No3. Can there be contract involving future things? Yes, as long as it can exist subsequently or in the future.4. Assume A and B entered into a contract where by A will pay 100k for the future mango fruits of the land of be in 2010. Is

there is a valid contract? Yes. Supposing the there are no mangoes produced is there liability to pay 100k? no, because there is no object.

5. Who bears the risk in the future things? If a contract has for its object a future thing, the contract is considered conditional where the object will come into existence whereby the non-existence of the object would not give rise to any obligation (since there is no object).

6. The contracting parties can agree to the contract to become aleatory where the other party will bear the risk (even if there object does not appear in the future, obligee would still pay).

7. A will pay 100k to B and the latter will deliver to A strand of hair of bernardo carpio. Is there a valid contract? No because the object is impossible to obtain.

8. Can there be a contract bet A and B whereby for the amount of 5M B will not run as governor? No because the object of the contract is beyond the commerce of man. It is a personal right (see pg. 451 2nd par. – Jurado)

9. Can personal right be the object of the contract? No, because such rights are purely personal in character, cannot “sell” or give away your personal rights.

10. A agreed to pay B 50k where by B will deliver to A something. Is there a valid contract? No because the object is indeterminate.

11. A greed to pay B 5M and B will deliver to A all the cattle in his ranch in Masbate. Valid? Yes even if the exact number is specified.

12. Give the case of Blas vs. Santos. – see page 453 – Jurado (there is no consideration to convey the half of the promise to convey, it is a contract of ) – there is a sufficient cause or consideration, upon the death of Martha the conjugal partnership was terminated. Half would go to Martha, the other half will go to simeon. In reality since there was no liquidation and since declared the

13. What is the cause of a contract? - see page 457 – 1st par. Jurado14. Is the cause the same as motive? – see page 459 Jurado15. A own a pen and sold one to B for 500P and sold another to C 500P and another to D for P500. Are there same cause? Yes,

the cause of all the contract of sale is the acquisition the purchase price. Although the motives maybe different. Even if the prices are not the same.

16. Will the illegality of the motive render the contract invalid? No, the motive does not affect the validity of the contract. Except when the motive will pre-determine or the contract is to the attainment of the motive of the contracting party.

17. Liguez vs. CA – here the motive of the contracting party is the moving reason of the cause of the contract. (Remember!!!)18. What is the cause or consideration in a contract of donation? The pure act of liberality.19. A sold his car to B, the object is the car. – dispute among civilist…see the view of tolentino page 458 – Jurado20. In a contract of barter there are two objects. 21. Case of Phil Banking Corp vs. Lui She – Land Mark Case in Philippine case. (page 460 – 3rd paragraph Jurado) – applied one of

the exceptions to the rule of pare delicto. (VERY IMPORTANT CASE!!!!!!!!!!!!!!!!!!!!!!) – if the attainment of the contract is conditioned upon the attainment of motive or the motive pre-determined the attainment of the contract.

22. Assume that A and B entered into a contract on oct 2007 where A sell his car to B for 500K and will be paid not later that dec 1 2007. Upto know B has not paid. Can A have the contract inexistent due to absence of causa or consederation? No,

the contract will become merely a voidable one. (see page 467 1st paragraph – Jurado) – the only remedy is to rescind the contract or ask for specific performance with indemnity for damages.

23. Is a mere promise a sufficient consideration even if the promise is not fulfilled? Yes24.

February 28, 2008

1. A mere promise is a sufficient cause for a contract. 2. Landanga v CA - The contract simply makes it appear that the money has been paid and there is no real promise to pay

were in fact there is no payment the contract 3. In accessory contract the cause is the same as the principal.4. Assume A borrowed money from X without security. B agreed to mortgage a property to secure the loan of A. Later on A

was not able to pay the loan. B cannot make a defense that there is no cause in the accessory obligation. There is a cause, it is the same cause of the principal contract.

5. Case of Villaroel vs. Estrada – (here, the cause was based upon the previous civil obligation. While the previous obligation prescribed, the promise was based upon a previous valid civil obligation.) If the obligation is purely moral obligation, that cannot serve as sufficient cause. If it is a real cause derived from a pre-existing contract, there can be a valid cause.

6. Fisher vs. Robb – it was purely moral obligation. There was never a valid civil obligation7. If there is no licit cause there is no valid contract.8. Ladanga et al vs. CA – discussed by sir.9. TOTAL ABSENCE of cause will nullify the contract. Merely inadequate cause will not suffice to invalidate the contract. (Case

in point – Carantes vs. CA)10. Carantes vs. CA – discussed by sir.11. Generally contracts are valid regardless of their forms except in those specified by law.12. The contract need not be contained in a single documents, the contract may contain in several document which taken

together will give you the entire 13. 1358 does not affect the validity or enforceability of contracts14. Consider the contract as a whole…context is everything…interpret the provision to each other15. Remember articlen 1377!!!!!!!!!!!!!!!!16. Cpu 17. Recissible contracts. Next meeting…

March 4, 2008

1. Rescissible contracts are type of defective contracts, what are the defect? It defective because of the injury caused to the other party or 3rd party.

2. The fundamental bases of the defects have been criticized by some civilist.3. The amount of the damage must be more than ¼ of the amount of the things.4. Do things have fix absolute value? No because they change from time to time. When the law fixes a certain amount of

damage the civilists say that the basis for the rescission is not stable because there is constant change in the value of things.5. 1381 – four basic type of contracts that are rescissible contracts.6. In scattered provisions of the civil code there are rescissible contracts…such as article 1189.7. With respect to a contract entered into by a guardian or representative of an absentee. He sold the car for 200k the actual

value of the car is 500k. the contract is unenforceable since the representative or guardian has not ask for the approval of the court to sell the property.

8. The matter of lesion is only thru contracts entered into by the representative or guardian in the administration of the property of the absentee or ward.

9. A sold his H&L to X for 5M on Jan 1, in May of the same year he borrowed money from B and promise to pay on Dec. 2007. Can B sue for the rescission of the sale? No because the credit must be a pre-existing credit at the time of the alienation.

10. Assume that A had other properties (same as no. 9), can B sue for rescission? Rescission is a subsidiary remedy, it is a remedy when there is no other legal means to recover.

11. This time A and B are litigants of a parcel of land. A is currently in possession. During the pendency of the case A sold the H&L to mr. X and Mr. X is in Bad faith. B won the case against A. X and A went to B and ask not to rescind the sale. Can B insist on the rescission? Does the rule on rescission as a subsidiary means apply? Yes, B can insist on the rescission since there is a writ of execution. (should not apply if involves thing under litigation.)

12. What is the purpose why the law makes that contract of an object under litigation rescissible – to protect the possible effectivity of a real right.

13. Contracts entered into in fraud of creditors…A owes 10M to B and and A donated the only property to C. was the act fraudulent? Yes, if the alienation is gratuitous there is a presumption of fraud if there is no reservation to ….Assume that C in a Donee in good faith, can B ask for the rescission of the donation? Yes, if the transfer of the title is by gratuitous the good faith of the transferee is not protected. (why? – because the transferee did not even lose anything so the creditor should be protected over the donee.)

14. In the same case assuming it was sold and not donated and the buyer was in good faith the right of the buyer is protected. (no, only damages from the one causing the loss)

15. The moment the property has passed to the hands of an innocent purchaser for value you cannot ask for the rescission of subsequent sale of it even if they were in bad faith.

16. Why is the debtor non included in the order of liable buyers in bad faith for liability for damages? Because since rescission can only be availed of if there is no other legal remedies the creditor can avail of thus it means that the debtor is already insolvent therefore he has no more means to pay for damages.

17. …hindi ko nakuha yung tanong ni sir…something about judgement and sale etc. under article 138718. What are the badges of fraud? – see page 519 – Jurado (Memorize!!)19. Cabaliw vs. Sadorra – see page 511 - Jurado20. Sikatuna vs. Guevarra – see age 507 – Jurado21. When a contract is 22. How does rescission of contracts under this provision differ form that of 1191? – See page 495 on distinguished from

resolution. - in 1191, there is mutual restitution depending on their agreement. – But the recent pronouncement of SC is there will still mutual restitution

23. What is the prescription? 4 years…24. Under art 1388 whoever acquires in bad faith will be liable in bad faith when ever due to any cause the property is

impossible to be returned. What about in caso fortuito are they liable for damages? – yes since the provision stipulates that due to any cause and since under 552 of the civil code states that a possessor in bad faith should be liable for the loss of the thing no matter what the cause maybe. –this is the view of Atty. Navarro.

March 6, 2008

1. Voidable either because of: lack of capacity or vitiated consent.2. Can a voidable contract be enforced? Yes, it is valid and binding until annulled by competent court.3. When can voidable contract be annulled? See Article 13914. If the property is registered property, the prescription must be counted from the time it was registered. – because

registration is notice to the whole world.5. Does the prescriptive period apply only to the defense or to action? – Justice Jurado is of the view that the prescriptive

period should only apply to the action. There are views that the 4 yr prescriptive period should be considered to operate both ways. If you want to annul the contract you cannot invoke the defense of minority.

6. When is there tacit or implied ratification? See page 7. A and B entered into a contract and a’s consent was vitiated. Can B can sue for annulment? No because only the

incapacitated person or the party whose consent was vitiated can ask for annulment.8. Several months after the contract A wrote a letter demanding specific performance. Can A still sue for annulment? No

because there is express ratification.9. Only those who are oblige principally or subsidiarily may sue for annulment. 3rd person cannot sue.

10. Exceptions to the rule in no. 9 – was stated in the case of Tevez vs. PHHC. (the court said that generally a 3rd person cannot sue to annul a contract but if he can prove that has right violated with respect to another party, he may sue for the annulment even if he is not a party thereto.) – Remember the rule and exemption!!!!!

11. Once a contract is annulled there would be an obligation of mutual restitution or return to each other what they have received from each other. That general rule considered modified insofar as incapacitated person is concerned. (in 1399 where the restitution will be only in so far as he is benefitted)

12. If the incapacitated person has the thing is he obliged to return it? Yes13. If the party who is suppose to return the thing is no longer in the position to return the thing supposing the thing was lost

due to his fault or fraud he can no longer sue. (implied ratification)14. If due to caso fortuito, the innocent party can still sue for annulment since the lost was not due to his fault or fraud…15. Supposing that the one who is unable to return is the defendant. Will the action for annulment prosper? Yes, if it was due

to his fault he is obliged to return the value of the thing plus interest. Supposing the lost was cause by caso fortuito, he is still obliged to pay the value of the thing but without interest.

16. Supposing A sold the car to B who is incapacitated (baliw). What if the thing can no longer be returned can he still sue for annulment? No, whatever maybe the cause of the voidablility of the contract the same rule would apply article 1401. – paragraph 2 would have been made to have as an exception. Daw… Commentators say that if there was loss of the thing after he has regained capacity. – sabi ni sir, an incapacitated person cannot be guilty of fraud or fault…

17. Memorize STATUTE OF FRAUDS!!!!! SPECIALLY PARAGRAPH 2!!!!!!!!!!!

March 11, 2008

1. Which is more defective, rescicible or unenforceable?2. Between voidable and unenforceable? 3. What are the three types of enforceable contracts? See article 14034. Supposing that the legal representative of the other incapacitated party ratifies the contract, the contract becomes a

voidable one. If both of the legal representatives ratify the contract, the contract becomes valid.5. Remember, in many cases decided by SC if the contract was entered into by a person in the name of another without the

authority of the latter, the contract is void because of the lack of consent.6. What is the statute of frauds? – there must be a written document, note or memorandum. Which is signed or subscribed by

the contracting party charged or by his agent.7. Purpose of Statute of frauds? – to prevent frauds, and so as to have an evidence8. It is not necessary that the details of the contract be in a single document. There may be several documents.9. What are the acts or agreements under the statute of frauds? – See Article 1403(2)10. Why does the law include the kind of agreement mentioned in Article 1403(2)(a). – the law assumes that the maximum

limit of human memory is only for a year…it is used to aid the memory of the contracting parties.11. Supposing that 2 years from today, A will sell a pen to B for P350, will the agreement be covered by statute of frauds? Yes.

What if the 350 was already paid upon agreeing on the contract, the contract will not be covered by the statutes of frauds.12. Statue of frauds Applies only to purely executory contracts.13. If the contract is partially performed can the contract be covered by statute of frauds? Yes, in order to be exempt the

performance must be full. (????!!!)14. The moment that one of the parties claims that he has performed his part of the evidence, he is allowed to prove his

compliance thru oral evidence or parol evidence.15. Mutual promise to marry is not covered by the statute of frauds...why? 16. Supposing A and B promised to marry each other 4 years from today…is it covered? There was a court decision which said it

was, but there was a strong dissent. Since 17. Special promise to answer the debt- the promise must be collateral 18. Loan is not covered by statute of fraud19. Guarantee made shall be in writing20. Price exactly 500 is covered.

21. Supposing A and B entered into a contract covered 2 items, one was a pen worth 250 and a bracelet worth 400. Would the agreement be covered by the statute of frauds? If the agreement covers several items the price are less than 500, check if thecontract is intended that the items should be as one statute of fraud will apply. It intended to be considered separately it will not be covered.

22. A thing in action, example is assignment of credit.23. Supposing that A and B own the ajoining parcel of land. And entered into an agreement on where is the boundery, is it

covered? No, because it is not sale of a real property.24. Statute of frauds only applies to sale of real property and lease of over one year.25. A representation as to the credit of a third person…example 26. If a contract is unenforceable because of statute of frauds, the defect maybe ratified,,, by either failure to object or

acceptance of benefits.