Beruflich Dokumente
Kultur Dokumente
CONTENTS
OBLIGATIONS
GENERAL PROVISIONS
Ernesto Uypitching, et al. v. Ernesto Quiamco..........................................................10
Lourdes Dela Cruz v. Court of Appeals......................................................................10
Department of Health v. HTMC Engineers Co...........................................................10
International Finance Corporation v. Imperial Textile Mills, Inc.................................11
Sebastian Siga-An v. Alicia Villanueva......................................................................11
Makati Stock Exchange, Inc., et al. v. Miguel V. Campos, substituted By Julia Ortigas
Vda. De Campos....................................................................................................... 12
Spouses Patricio and Myrna Bernales v. Heirs Of Julian Sambaan............................12
Vitarich Corporation v. Chona Losin..........................................................................13
CBK Power Company Limited vs. Commissioner of Internal Revenue.......................13
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Gilat Satellite Networks, Ltd. v. United Coconut Planters Bank General Insurance Co.,
Inc............................................................................................................................ 19
Carlo F. Sunga v.Virjen Shipping Corporation, Nissho Odyssey Ship Management Pte.
Ltd., And/Or Capt. Angel Zambrano..........................................................................20
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EXTINGUISHMENT OF OBLIGATIONS
PAYMENT OR PERFORMANCE
Jaime Biana v. George Gimenez................................................................................ 29
G & M (Phil.), Inc. vs. Willie Batomalaque.................................................................29
Abacus Securities Corporation v. Ruben U. Ampil.....................................................30
Almeda v. Bathala Marketing Industries, Inc.............................................................30
ASJ Corporation v. Evangelista.................................................................................. 30
Insular Life Assurance Company, Ltd. v. Toyota Bel-Air, Inc......................................31
Dao Heng Bank, Inc. (Now Banco De Oro Universal Bank) v. Laigo..........................31
Royal Cargo Corporation v. DFS Sports Unlimited, Inc..............................................32
Allandale Sportsline, Inc. v. The Good Development Corporation.............................32
Annabelle Dela Pea and Adrian Villareal v. The Court of Appeals and Rural Bank of
Bolinao, Inc............................................................................................................... 32
D.B.T. Mar-Bay Construction, Incorporated v. Ricaredo Panes et al..........................33
Rockville Excel International Exim Corporation v. Spouses Oligario Culla and
Bernardita Miranda................................................................................................... 33
Premiere Development Bank v. Central Surety & Insurance Company, Inc..............33
Cecilleville Realty and Service Corporation v. Acua................................................34
DBT Mar-Bay Construction, Inc. vs. Panes................................................................34
Manuel Go Cinco and Araceli S. Go Cinco v. Court Of Appeals, Ester Servacio and
Maasin Traders Lending Corporation........................................................................35
Land Bank of the Philippines vs. Alfredo Ong...........................................................35
Republic v. Thi Thu Thuy T. De Guzman....................................................................35
Dalton vs. FGR Realty and Development Corp.........................................................36
Elizabeth Del Carmen v. Sps. Sabordo......................................................................36
Erlinda Gajudo, Fernando Gajudo, Jr., Estelita Gajudo, Baltazar Gajudo And Danilo
Arahan Chua v. Traders Royal Bank..........................................................................36
Luzon Development Bank v. Enriquez......................................................................37
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Telengtan Brothers & Sons, Inc. v. United States Lines, Inc. and the Court of Appeals
................................................................................................................................. 37
Simplicio A. Palanca v. Ulyssis Guides......................................................................37
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CONTRACTS
GENERAL PROVISIONS
Asian Construction and Development Corporation v. Tulabut..................................48
Tanay Recreation Center and Development Corp. v. Catalina Matienzo Fausto and
Anunciacion Fausto Pacunayen................................................................................. 49
Litonjua v. Litonjua................................................................................................... 49
Bortikey v. AFP Retirement and Separation Benefits System....................................49
GF Equity, Inc. vs. Arturo Valenzona.........................................................................50
Tanay Recreation Center and Development Corp. v. Catalina Matienzo Fausto and
Anunciacion Fausto Pacunayen................................................................................. 50
Tanay Recreation Center and Development Corp. v. Catalina Matienzo Fausto and
Anunciacion Fausto Pacunayen................................................................................. 51
Sunace International vs. NLRC.................................................................................. 51
Greater Metropolitan Manila Solid Waste Management Committee v. Jancom
Environmental Corporation....................................................................................... 51
Roxas v. Zuzuarregui, Jr............................................................................................ 51
Bonifacio Nakpil v. Manila Towers Development Corp...............................................52
Xavierville III Homeowners Association, Inc., v. Xavierville Ii Homeowners
Association, Inc.,....................................................................................................... 52
William Golangco Construction Corporation v. Philippine Commercial International
Bank......................................................................................................................... 53
Spouses Anthony and Percita Oco v. Victor Limbaring..............................................53
Rolando Limpo v. Court of Appeals...........................................................................53
Caltex (Philippines), Inc., v. PNOC Shipping and Transport Corporation....................54
Mr. & Mrs. George R. Tan v. G.V.T Engineering Services, Acting through its
Owner/Manager Gerino V. Tactaquin.........................................................................54
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CONSENT
Dandoy v. Tongson................................................................................................... 60
Navotas Industrial Corporation V. Cruz, et al............................................................61
Epifania Dela Cruz, substituted by Laureana V. Alberto v. Sps. Eduardo C. Sison and
Eufemia S. Sison....................................................................................................... 61
Perpetua vda. de Ape v. Court of Appeals and Genorosa Cawit Vda. De Lumayno...62
Reynaldo Villanueva vs. Philippine National Bank....................................................62
Gaudencio Valerio et. al v. Vicenta Refresca et. al....................................................62
Heirs of Cayetano Pangan vs. Spouses Rogelio Perreras and Priscilla Perreras........62
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OBJECT OF CONTRACTS
Atty. Pedro M. Ferrer vs. Spouses Alfredo Diaz and Imelda Diaz...............................67
CAUSE OF CONTRACTS
J.L.T. Agro Inc. v. Balansag........................................................................................ 68
Alvarez v. PICOP Resources...................................................................................... 68
FORM OF CONTRACTS
Manuel Mallari and Millie Mallari v. Rebecca Alsol....................................................69
Serafin Naranja et al. vs. Court of Appeals..............................................................69
REFORMATION OF INSTRUMENTS
Benny Go v. Eliodoro Bacaron................................................................................... 69
INTERPRETATION OF CONTRACTS
Holy Cross of Davao College, Inc. vs. Holy Cross of Davao Faculty Union Kampi.. .70
Agas vs. Sabico........................................................................................................ 70
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RESCISSIBLE CONTRACTS
Oliverio Laperal and Filipinas Golf & Country Club, Inc. v. Solid Homes, Inc.............75
C-J Yulo & Sons, Inc. v. Roman Catholic Bishop of San Pablo, Inc..............................75
Spouses Felipe and Leticia Cannu v. Spouses Gil And Fernandina Galang and
National Home Mortgage Finance Corporation.........................................................75
Bienvenido M. Casino Jr. v. Court of Appeals.............................................................76
Pryce Corporation (Formerly Pryce Properties Corporation), v. Philippine Amusement
And Gaming Corporation.......................................................................................... 76
Coastal Pacific Trading Inc., v. Southern Rolling Mills, Co., Inc. et al.........................77
Pan Pacific Industrial Sales Co., v. Court of Appeals.................................................77
Laurencio Ramel, et.al. v. Daniel Aquino and Guadaluper Abalahin.........................77
Union Bank of the Philippines v. Sps. Ong................................................................77
Philippine Leisure and Retirement Authority v. Court of Appeals..............................78
Uniwide Holdings, Inc. v. Jandecs Transportation Co., Inc.........................................78
Bonrostro v. Luna...................................................................................................... 79
Armand O. Raquel-Santos and Annalissa Mallari v. Court of Appeals and Finvest
Securities Co., Inc..................................................................................................... 79
Heirs of Sofia Quirong v. Development Bank of the Philippines................................79
G Holdings, Inc., v. National Mines and Allied Workers Union Local 103 (NAMAWU)
................................................................................................................................. 80
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VOIDABLE CONTRACTS
Jorge Gonzales v. Climax Mining Ltd.........................................................................80
Felicitas Asycong and Teresa Polan v. Court of Appeals and Moller Lending Investor
................................................................................................................................. 80
Development Bank of the Philippines and Privatization and Management Office v. CA
................................................................................................................................. 80
Barceliza P. Capistrano vs. Darryl Limcuando and Fe S. Sumiran.............................81
Hernania Lani Lopez vs. Gloria Umale-Cosme.......................................................81
First Philippine Holdings Corporation vs. Trans Middle East (Phils.) Equities, Inc......82
ECE Realty And Development Inc. v. Rachel G. Mandap...........................................82
UNENFORCEABLE CONTRACTS
Spouses Mario and Elizabeth Torcuator v. Spouses Remigio and Gloria Bernabe and
Spouses Diosdado and Lourdes Salvador.................................................................82
Banco Filipino Savings v. Diaz................................................................................... 83
Lina Pealber vs. Quirino Ramos et al......................................................................83
Ordua, et al. v. Fuentebella, et al............................................................................83
Municipality of Hagonoy, Bulacan vs. Dumdum, Jr....................................................84
Rogelio Dantis, v. Julio Maghinang, Jr........................................................................84
VOID OR INEXISTENT
Menchavez vs. Teves................................................................................................ 84
Department of Health v. C.V. Canchela & Associates, Architects (CVCAA), in
Association With MCS Engineers Co., and A.O. Mansueto IV Electrical Engineering
Services, and Luis Alina, Sheriff IV, RTC, Manila.......................................................85
The Manila Banking Corporation v. Edmundo S. Silverio and The Court of Appeals, 85
Lao v. Republic of the Philippines and the Government Service Insurance System. 86
Potenciano Ramirez v. Ma. Cecilia Ramirez...............................................................86
Joaquin Villegas and Emma M. Villegas v. Rural Bank of Tanjay Inc.........................86
Land Bank of the Philippines v. Eduardo M. Cacayuran...........................................87
Queensland-Tokyo Commodities, Inc. vs. George.....................................................87
Anuel O. Fuentes and Leticia L. Fuentes vs. Conrado G. Roca..................................87
Domingo Gonzalo vs. John Tarnate, Jr.......................................................................87
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OBLIGATIONS
CHAPTER 1. GENERAL PROVISIONS
Ernesto Uypitching, et al. v. Ernesto Quiamco
GR No. 146322, December 6, 2006
Corona, J.
ISSUE: Can an obligation to pay damages arise from an abuse of a right
which is exercised to the prejudice or injury of another person as when a
corporation seized a motorcycle with the assistance of policemen without a
search warrant or order?
DOCTRINE: A blatant disregard for the lawful procedure for the
enforcement of its right, to the prejudice of respondent violated the law as
well as public morals, and transgressed the proper norms of human
relations. Article 19, also known as the principle of abuse of right,
prescribes that a person should not use his right unjustly or contrary to
honesty and good faith, otherwise he opens himself to liability. There is an
abuse of right when it is exercised solely to prejudice or injure another. The
exercise of a right must be in accordance with the purpose for which it was
established and must not be excessive or unduly harsh; there must be no
intention to harm another. Otherwise, liability for damages to the injured
party will attach.
Lourdes Dela Cruz v. Court of Appeals
G.R No. 139442, December 6, 2006
Velasco, Jr. J.:
ISSUE: Can a person under a contract of lease possess such land by
tolerance even after the expiration of the contract of lease and after a
demand to vacate.
DOCTRINE: Obligations arising from contracts have the force of law
between the contracting parties and should be complied with in good faith.
Thus, initially petitioner as lessee is the legal possessor of the subject lot by
virtue of a contract of lease. When fire destroyed her house, the Reyeses
considered the lease terminated. It has been held that a person who
occupies the land of another at the latters tolerance or permission, without
any contract between them, is necessarily bound by an implied promise that
he will vacate upon demand, failing which a summary action for ejectment
is the proper remedy against them.
Department of Health v. HTMC Engineers Co.
G.R. No. 146120. January 27, 2006
Chico-Nazario, J.
ISSUE: Can a perfected contract be renounced unilaterally?
DOCTRINE: No. A contract properly executed between parties continues to
be the law between said parties and should be complied with in good faith.
There being a perfected contract, DOH cannot revoke or renounce the same
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Corporation
v.
Utility
Assurance
ISSUE: Can delay take place even if the obligation to perform or complete
the project was not yet demandable because the agreed completion date is
yet to come?
DOCTRINE: Default or mora on the part of the debtor is the delay in the
fulfillment of the prestation by reason of a cause imputable to the former. It
is the non-fulfillment of an obligation with respect to time.
In this jurisdiction, the following requisites must be present in order that
the debtor may be in default: (1) that the obligation be demandable and
already liquidated; (2) that the debtor delays performance; and (3) that the
creditor requires the performance judicially or extrajudicially.
Since the parties contemplated delay in the completion of the entire project
as can be seen in the Construction Agreement, the CA concluded that the
failure of the contractor to catch up with schedule of work activities did not
constitute delay giving rise to the contractors liability for damages.
Article 1374 of the Civil Code requires that the various stipulations of a
contract shall be interpreted together, attributing to the doubtful ones that
sense which may result from all of them taken jointly. Here, the work
schedule approved by petitioner was intended, not only to serve as its basis
for the payment of monthly progress billings, but also for evaluation of the
progress of work by the contractor. Article 13.01 (g) (iii) of the Construction
Agreement provides that the contractor shall be deemed in default if,
among others, it had delayed without justifiable cause the completion of the
project "by more than thirty (30) calendar days based on official work
schedule duly approved by the OWNER."
Where a party to a building construction contract fails to comply with the
duty imposed by the terms of the contract, a breach results for which an
action may be maintained to recover the damages sustained thereby, and of
course, a breach occurs where the contractor inexcusably fails to perform
substantially in accordance with the terms of the contract.
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Inc.
v.
Republic-Asahi
Glass
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SECTION 5. COMPENSATION
Mavest (USA) Inc. and Mavest Manila Liaison Office vs. Sampaguita
Garment Corporation
G.R. No. 127454. September 21, 2005
Garcia, J.:
ISSUE: In compensation, do the rights of creditors or obligations of debtors
need to spring from one and the same contract?
DOCTRINE: No. For compensation to validly take place, the governing Civil
Code provisions require the concurrence of well-defined conditions. At its
minimum, compensation presupposes two persons who, in their own right
and as principals, are mutually indebted to each other respecting equally
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Castaares
and
Milagros
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SECTION 6. NOVATION
Philippine Savings Bank v. Sps. Rodelfo Malanac Jr.
G.R. No. 145441, April 26, 2005
Ynares-Santiago J:
ISSUE: Is moral damages proper in case a bank misrepresents that they
would accept a request of a party and then does an act that is legal under
the circumstances?
DOCTRINE: Yes. While the bank had the legal basis to withhold the release
of the mortgaged properties, nevertheless, it was not forthright and was
lacking in candor in dealing with Maalac. In accepting the PCIB Check,
the bank knew fully well that the payment was conditioned on its
commitment to release the specified properties. At the first instance, the
bank should not have accepted the check or returned the same had it
intended beforehand not to honor the request of Maalac. In accepting the
check and applying the proceeds thereof to the loan accounts of Maalac
and Galicia, the former were led to believe that the bank was favorably
acting on their request. In justifying the award of moral damages, the Court
of Appeals correctly observed that there is the unjustified refusal of the
appellant bank to make a definite commitment while profiting from the
proceeds of the check by applying it to the principal and the interest of the
Galicias and plaintiff-appellants.
Isaisas F. Fabrigas and Marcelina R. Fabrigas v. San Francisco del
Monte, Inc.
G.R. No. 152346. November 25, 2005
Tinga, J.:
ISSUE: Is there a novation when at first, there is a contract to sell which
was rescinded but subsequently a second contract to sell was created to
replace the first contract?
DOCTRINE: Novation, in its broad concept, may either be extinctive or
modificatory. It is extinctive when an old obligation is terminated by the
creation of a new obligation that takes the place of the former; it is merely
modificatory when the old obligation subsists to the extent it remains
compatible with the amendatory agreement. An extinctive novation results
either by changing the object or principal conditions (objective or real), or
by substituting the person of the debtor or subrogating a third person in the
rights of the creditor (subjective or personal). Under this mode, novation
would have dual functionsone to extinguish an existing obligation, the
other to substitute a new one in its placerequiring a conflux of four
essential requisites: (1) a previous valid obligation; (2) an agreement of all
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Metro
Rail
Transit
Development
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And
Development
Corporation
v.
ISSUE: Can there be a valid novation even without the consent of the
creditor?
DOCTRINE: Novation is a mode of extinguishing an obligation by changing
its objects or principal obligations, by substituting a new debtor in place of
the old one, or by subrogating a third person to the rights of the creditor. It
is "the substitution of a new contract, debt, or obligation for an existing one
between the same or different parties." Article 1293 of the Civil Code
defines novation as which consists in substituting a new debtor in the place
of the original one, may be made even without the knowledge or against the
will of the latter, but not without the consent of the creditor. Payment by the
new debtor gives him rights mentioned in Articles 1236 and 1237.
Thus, in order to change the person of the debtor, the former debtor must
be expressly released from the obligation, and the third person or new
debtor must assume the formers place in the contractual relation. Article
1293 speaks of substitution of the debtor, which may either be in the form
of expromision or delegacion, as seems to be the case here. In both cases,
the old debtor must be released from the obligation, otherwise, there is no
valid novation.
In general, there are two modes of substituting the person of the debtor: (1)
expromision and (2) delegacion. In expromision, the initiative for the change
does not come fromand may even be made without the knowledge ofthe
debtor, since it consists of a third persons assumption of the obligation. As
such, it logically requires the consent of the third person and the creditor.
In delegacion, the debtor offers, and the creditor accepts, a third person
who consents to the substitution and assumes the obligation; thus, the
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CONTRACTS
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v.
Catalina
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v.
Catalina
v.
Catalina
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Inc.,
v.
Xavierville
Ii
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Corporation
v.
Philippine
ISSUE: Is the construction company liable for defects that occurred after
the lapse of the one-year defects liability period stipulated in the contract?
DOCTRINE: No, the construction company is not liable for defects that
occurred after the lapse of the one-year defects liability period stipulated in
the contract. The autonomous nature of contracts is enunciated in Article
1306 of the Civil Code. Obligations arising from contracts have the force of
law between the parties and should be complied with in good faith. In
characterizing the contract as having the force of law between the parties,
the law stresses the obligatory nature of a binding and valid agreement.
The provision in the construction contract providing for a defects liability
period was not shown as contrary to law, morals, good customs, pubic order
or public policy. By the nature of the obligation in such contract, the
provision limiting liability for defects and fixing specific guaranty periods
was not only fair and equitable; it was also necessary. The Court cannot
countenance an interpretation that undermines a contractual stipulation
freely and validly agreed upon. The courts will not relieve a party from the
effects of an unwise or unfavorable contract freely entered into.
Spouses Anthony and Percita Oco v. Victor Limbaring
G.R. No. 161298. January 31, 2006
Panganiban, C.J.:
ISSUE: Can a person who did not take part in a contract show that he has a
real interest affected by its performance or annulment?
DOCTRINE: Yes. As a rule, the parties to a contract are the real parties in
interest in an action upon it. Only the contracting parties are bound by the
stipulations in the contract; they are the ones who would benefit from and
could violate it. Thus, one who is not a party to a contract, and for whose
benefit it was not expressly made, cannot maintain an action on it. One
cannot do so, even if the contract performed by the contracting parties
would incidentally inure to ones benefit.
As an exception, parties who have not taken part in a contract may show
that they have a real interest affected by its performance or annulment. In
other words, those who are not principally or subsidiarily obligated in a
contract, in which they had no intervention, may show their detriment that
could result from it. Contracts pour autrui are covered by this exception. In
this latter instance, the law requires that the contracting parties must have
clearly and deliberately conferred a favor upon a third person. A mere
incidental benefit is not enough.
Rolando Limpo v. Court of Appeals
G.R. No. 144732, February 13, 2006
Azcuna, J.:
ISSUE: Whether a Compromise Agreement binds a person who did not take
part in its execution.
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PNOC
Shipping
and
Transport
ISSUE: May a creditor file a case for rescission or execution against a third
party who has assumed the obligations of the debtor?
DOCTRINE: Article 1313 of the Civil Code provides that [c]reditors are
protected in cases of contracts intended to defraud them. Further, Article
1381 of the Civil Code provides that contracts entered into in fraud of
creditors may be rescinded when the creditors cannot in any manner collect
the claims due them. Article 1381 applies to contracts where the creditors
are not parties, for such contracts are usually made without their
knowledge. Thus, a creditor who is not a party to a contract can sue to
rescind the contract to prevent fraud upon him. Or, the same creditor can
instead choose to enforce the contract if a specific provision in the contract
allows him to collect his claim, and thus protect him from fraud.
Mr. & Mrs. George R. Tan v. G.V.T Engineering Services, Acting
through its Owner/Manager Gerino V. Tactaquin
G.R. No. 153057. August 7, 2006
Austria-Martinez, J.:
ISSUE: May an obligor be held liable for damages in case of breach of
contract?
DOCTRINE: Article 1313 of the Civil Code provides that creditors are
protected in cases of contracts intended to defraud them. Further, Article
1381 of the Civil Code provides that contracts entered into in fraud of
creditors may be rescinded when the creditors cannot in any manner collect
the claims due them. Article 1381 applies to contracts where the creditors
are not parties, for such contracts are usually made without their
knowledge. Thus, a creditor who is not a party to a contract can sue to
rescind the contract to prevent fraud upon him. Or, the same creditor can
instead choose to enforce the contract if a specific provision in the contract
allows him to collect his claim, and thus protect him from fraud.
William Ong Genato vs. Benjamin Bayhon et al.
G.R. No. 171035 August 24, 2009
Puno, C.J.:
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rights
and
obligation
are
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v.
Paper
City
Corporation
of
the
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SECTION 1. CONSENT
Dandoy v. Tongson
G.R. No. 144652 December 16, 2005
Austria-Martinez, J.
ISSUE: May a contract to transfer rights be null and void for failure to
obtain the consent of the government?
DOCTRINE: Yes. Section 29 of the Commonwealth Act 141 or the Public
Land Act provides in part: After the cultivation of the land has been begun,
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Sps. Ramon Lequin and Virginia Lequin vs. Sps. Raymundo Vizconde
and Salome Lequin Vizconde
G.R. No. 177710. October 12, 2009
Velasco, Jr., J.:
ISSUE: Whether when consent is given through fraud would make the
contract voidable.
DOCTRINE: Yes. Article (Art.) 1330 of the Civil Code provides that when
consent is given through fraud, the contract is voidable.
Tolentino defines fraud as every kind of deception whether in the form of
insidious machinations, manipulations, concealments or misrepresentations,
for the purpose of leading another party into error and thus execute a
particular act. Fraud has a determining influence on the consent of the
prejudiced party, as he is misled by a false appearance of facts, thereby
producing error on his part in deciding Whether to agree to the offer.
One form of fraud is misrepresentation through insidious words or
machinations. Under Art. 1338 of the Civil Code, there is fraud when,
through insidious words or machinations of one of the contracting parties,
the other is induced to enter into a contract which without them he would
not have agreed to. Insidious words or machinations constituting deceit are
those that ensnare, entrap, trick, or mislead the other party who was
induced to give consent which he or she would not otherwise have given.
Deceit is also present when one party, by means of concealing or omitting to
state material facts, with intent to deceive, obtains consent of the other
party without which, consent could not have been given. Art. 1339 of the
Civil Code is explicit that failure to disclose facts when there is a duty to
reveal them, as when the parties are bound by confidential relations,
constitutes fraud.
Spouses Exequiel Lopez and Eusebia Lopez v. Spouses Eduardo Lopez
and Marcelina Lopez
G.R. No. 161925; November 25, 2009
Nachura, J.
ISSUE: Whether where the essential requisites of a contract are present
and the simulation refers only to the content or terms of the contract, the
agreement is absolutely binding and enforceable between the parties and
their successors in interest.
DOCTRINE: Yes. Simulation takes place when the parties do not really
want the contract they have executed to produce the legal effects expressed
by its wordings. Article 1345 of the Civil Code provides that the simulation
of a contract may either be absolute or relative. In absolute simulation,
there is a colorable contract but it has no substance as the parties have no
intention to be bound by it. The main characteristic of an absolute
simulation is that the apparent contract is not really desired or intended to
produce legal effect or in any way alter the juridical situation of the parties.
As a result, an absolutely simulated or fictitious contract is void, and the
parties may recover from each other what they may have given under the
contract. However, if the parties state a false cause in the contract to
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used
by
the
parties
decisive
in
the
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Cruz-Zamora
v.
Multiwood
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difference
between
the
terms
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Coastal Pacific Trading Inc., v. Southern Rolling Mills, Co., Inc. et al.
G.R. No. 118692. July 28, 2006
Panganiban, CJ:
ISSUE: Whether respondent consortium banks disposed of VISCOs assets
in fraud of the creditors?
DOCTRINE: Yes. Director owe loyalty and fidelity to the corporation they
serve and to its creditors. When these directors sit on the board as
representatives of shareholders who are also major creditors, they cannot
be allowed to use their offices to secure undue advantage for those
shareholders, in fraud of other creditors who do not have similar
representation in the board of directors.
Pan Pacific Industrial Sales Co., v. Court of Appeals
G.R. No. 125283. February 10, 2006
Tinga, J:
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Bonrostro v. Luna
G.R. No. 172346, 702 SCRA 1
ISSUE: Whether the failure of spouses Bonrostro to pay the installments of
P300,000.00 on April 30, 1993 and P330,000.00 on July 31, 1993 is a
substantial breach of their obligation under the contract as to warrant the
rescission of the same.
DOCTRINE: The defendants delay in the payment of the two installments
is not so substantial as to warrant rescission of contract. Although, the
defendant failed to pay the two installments in due time, she was able to
communicate with the plaintiffs through letters requesting for an extension
of two months within which to pay the installments. In fact, on November
24, 1993 defendant informed Atty. Arlene Carbon that she was ready to pay
the installments and the money is ready for pick-up. However, plaintiff did
not bother to get or pick-up the money without any valid reason. It would be
very prejudicial on the part of the defendant if the contract to sell be
rescinded considering that she made a downpayment of P200,000.00 and
made partial amortization to the Bliss Development Corporation. In fact, the
defendant testified that she is willing and ready to pay the balance including
the interest on November 24, 1993.
The Court is of the opinion that the delay in the payment of the balance of
the purchase price of the house and lot is not so substantial as to warrant
the rescission of the contract to sell. The question of whether a breach of
contract is substantial depends upon the attendant circumstance.
Armand O. Raquel-Santos and Annalissa Mallari v. Court of Appeals
and Finvest Securities Co., Inc.
G.R. No. 174986 July 7, 2009
Nachura, J.:
ISSUE: Whether rescission of a contract gives rise to mutual restitution.
DOCTRINE: Yes. Rescission creates the obligation to return the object of
the contract. To rescind is to declare a contract void at its inception and to
put an end to it as though it never was. Rescission does not merely
terminate the contract and release the parties from further obligations to
each other, but abrogates it from the beginning and restores the parties to
their relative positions as if no contract has been made.
Heirs of Sofia Quirong v. Development Bank of the Philippines
G.R. No. 173441 December 3, 2009
Abad, J.
ISSUE: Whether the action to claim rescission must be commenced within
four years.
DOCTRINE: Yes. The next question that needs to be resolved is the
applicable period of prescription. The DBP claims that it should be four
years as provided under Article 1389 of the Civil Code. 16 Article 1389
provides that "the action to claim rescission must be commenced within
four years." The Quirong heirs, on the other hand, claim that it should be 10
years as provided under Article 1144 which states that actions "upon a
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