Beruflich Dokumente
Kultur Dokumente
AY 2012-2013
PRE-MIDTERMS
PRELIMINARY
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CLASSIFICATION OF OBLIGATIONS
Primary Classification
o Pure not subject to any condition; demandable at
once
o Conditional there are conditions attached to the
obligation; demandability depends on condition;
future and uncertain event
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Secondary Classification
o Legal
o Conventional
o Real obligation to give; no obligation not to give
o Personal obligation to do or not to do
o Determinate specifically designated
-if fortuitous event happens, obligation is extinguished
o Generic not designated, only the kind and quality are
given
-if fortuitous event happens, obligation not
extinguished
o Positive/Negative
o Unilateral only one person is obliged
o Bilateral reciprocal obligations
o Individual
o Collective
o Accessory does not have a life of its own; example:
mortgage obligation cannot stand without a loan
2. Rescission
Right to Rescind putting an end to the contract but
there is duty to return
Creditor must state in the contract that in case of nonpayment, previous payments are forfeited. If this is not
stipulated, creditor would be obliged to return when
there is rescission
there must be a judicial decision/court intervention,
there is a need for the court to determine whether
rescission is proper
an individual cannot put the law in his hand
for the benefit of creditor, so he can offer thing again
to another without breaching the contract
Not necessary to go to court all the time for rescission,
there is Extra-judicial rescission the contract is deemed
rescinded unless the other party objects, then they have
to go to court
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EFFECTS OF RESCISSION
BETWEEN
CANCELLATION
AND
Woodhouse vs Halili
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2. NEGLIGENCE
Omission of that diligence which is required by the
nature of obligation and corresponds with the
circumstances of the persons, time and place.
Failed to exercise the prudence demanded by the
circumstances
Difference: Source of liability here from negligence is
contract; in quasi-delict, source of negligence is not
contract but the quasi-delict
2 kinds of negligence:
o Negligence in Quasi-Delict/culpa aquiliana:
there is no contract that binds the parties &
negligence happens
Defense of good father available
All damages attributable to the incident may
be asked; relief is broader; includes
everything such as actual, moral, exemplary
damages
o Negligence in the performance of an
obligation/
contractual
negligence/culpa
contractual: there is a contract here but the
negligence is the same negligence in culpa
aquiliana
Defense of good father is not available here
Damages grounded only on the natural and
probable; can include actual damages e.g. loss
of earning capacity
3. DELAY
2Kinds of Delay
Crisostomo vs CA
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As to Time
o Condition may refer to a past event unknown to
the parties
-example: I will give you house and land if you can
establish that the number of victims in typhoon
Pablo reached 50 (condition); not a future event
because typhoon already passed
-so why is it allowed to be a condition? It really is
not the event itself, it is the knowledge of the
event (which is in a way future)
o Period refers only to the future
-birthday is term; but depends on how it is used in
obligation
-If you
reach
age
of
25,
condition
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RESOLUTORY CONDITION
--there are already legal effects here
*Deed of Donation of a parcel of land with condition to
build a chapel, playground or school, etc. What if you
cannot comply, what is the status of donation? It can be
revoked.
*Would it be correct for donor after determining there is
no compliance, is he justified in selling again on the ground
that donation never took effect because condition was not
fulfilled?
*What is effect on subsequent sale assuming that condition
was not fulfilled?
GR: there must be a revocation first before selling the
property to other party (or a second transaction)
What if it was sold prior to the revocation,
assuming the condition is not fulfilled?
o Subsequent sale can be ratified
*read Parks vs Province of Tarlac and Central Phil Univ
vs CA
EXCEPTION: Donation
-potestative because depends on sole will of donor
-if with condition, taken to be a contract (Central Phil Univ
case); donation with condition is contract because there is
a burden
-purely gratuitous donation (because of love and affection)
POTESTATIVE CONDITION
-condition suspensive in nature and which depends upon
the sole will of one of the contracting parties
-something that is dependent upon the will of EITHER
parties
*what is the effect is obligation dependent on sole will
of the debtor? It is void.
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Mortgage
Real Estate Mortgage
-if your mortgage your property, you can still sell property.
If in the mortgage, there is stipulation that property cannot
be sold, that is illegal
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FACULTATIVE OBLIGATION
-only one prestation has been agreed upon but the obligor
may render another in substitution
- Principle
of
ACCESSORY
ALWAYS
FOLLOW
THE
PRINCIPAL
-- mortgage is an accessory to the loan
contract
choice by the debtor
*Why is it not a right of the creditor? Law favors
the debtor in an obligation
*If there is already a choice it will become SIMPLE
OBLIGATION
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3.
4.
Important rules:
1. Solidarity is not presumed. In absence of specific
stipulation in agreement, you cannot presume that
debtor is solidarilly liable. You can only be solidary
debtor when provided by law, stipulation, or nature of
obligation provides otherwise
-What are instances by law which impose solidary
liability? Tort/Culpa Aquiliana between for example
operator and driver; co-perpetrators of felonies
(conspiracy)
-Terms:
joint
is
joint
but
joint
and
several
is
solidary
2. Solidary creditor cannot assign his rights without
consent of the others
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5.
6.
7.
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2.
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2.
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Regalado case
-mere silence is not tantamount to consent of application
-even if debtor is given the right, application has to be
made to debts which are already due, but there are
exceptions to due and demandable rule--- debtor is
insolvent, etc.
PAYMENT BY CESSION
-Dation in payment is specific like what land is being
transferred, payment by cession may involve many
properties
-you sell the property and whatever proceeds you realize
will be the payment to the debt
-there is no transfer of ownership here
-dation in payment, even if property is less than debt then
there is agreement that it is equivalent, obligation
extinguished. But in payment by cession, you are liable for
balance
-payment by cession, there are various creditors unlike
dation in payment
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CONTRACTS
1305: A contract is a meeting of minds between two persons
whereby one binds himself, with respect to the other, to give
something or to render some service
Requisites: 1318Consent, Object certain which is the subject
matter of the contract, Cause of the obligation which is
established
Elements: Essential, Natural and Accidental
Essential- those without which there can be no contract;
necessary and indispensable; subdivided into common, special
and extraordinary.
-If any essential element is absent, can file an action to declare
inexistence of contract; no contract
-only 3 essential elements that matter: consent, object,
consideration
-defective consent--- this is voidable; have it declared annulled
-absence of consent--- cause of action is declaration of
inexistence of contract
Natural- derived from the nature of the contract, not expressly
stated in the contract
-example: warranty against hidden defects. Not stated in the
contract but just because it is not stated doesnt mean you
dont have right. They are deemed to exist in the contract
-Parole Evidence Rules: every agreement, terms of condition,
stipulation you agree is reduced into writing; if not expressly
stated, they are deemed not agreed upon. Exception to this are
natural elements like warranty against eviction, hidden defects,
and the law which is deemed incorporated into the contract
Accidental- exist only when the parties provide for them; needs
to be stipulated for it to be binding, unlike natural elements
-parole evidence rule applies here
Example: contract of lease over a parcel of land and allows the
lessee to build a building there
-from the text of the contract, there is nothing there that
provides ownership of building after termination of contract, so
there is now problem on who will be owner of building after
-apply principle that accessory follows principal? NO. Article
415 of the Civil Code on Property places a building as a real
property itself independent of the land.
-so we now have an element not agreed upon. So how should
this be solved? Resolution should be in accordance with law on
property; there would be two owners now. Owner of the land
is not necessarily owner of building. The basis is that under
Article 415, building is treated as property separate and distinct
from the land. The principle that accessory follows the principal
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Obligations are very broad because they can arise from various
sources. Contract is just one of the sources.
Meeting of minds: agreement of parties on object, cause
No meeting of minds on those two, no contract to speak of
When can there be a contract? When the three essential elements
are present --- consent, object, cause
Relativity
1311: Contracts take effect only between the parties, their assigns
and heirs, except in case where the rights and obligations arising
from the contract are not transmissible by their nature, or by
stipulation or by provision of law. The heir is not liable beyond the
value of the property he received from the decedent.
Characteristics of Contracts
Obligatory force of contract
1308: The contract must bind both contracting parties; its validity
or compliance cannot be left to the will of one of them
-rationale why contract is void when it is potestative: because you
are creating an illusory contract; wala mai sabot na usa rai magbuot
-not just one party can withdraw without the consent of the other
Example: case on Rustan Pulp; delivery of paper and the other said
they had right to stop deliveries; it was a violation of obligatory
force
Example: lease contract where it says that lessee can stay as long as
he is able to pay the rental; because lessor has no option in that
case; lessor will then just have to wait for the lessee since as long as
he is able to pay, contract cannot terminate
Exceptions to relativity
1. not transmissible by nature: purely personal obligations;
obligations to do; example singer imong papa lain sad kayu ug
ikaw mupuli
2. stipulation or provision by law:
contract of agency
-your father is attorney in fact and father died, you cannot
assume as an attorney in fact
contract of partnership
-you pool your resources together for business purposes
-vs. corporation: if stockholder dies, his heir replaces him. In
partnership, his heirs cannot step into his shoes
Mutuality of Contracts
1309: The determination of the performance may be left to a
third person, whose decision shall not be binding until it has been
made known to both contracting parties
-Mutuality is similar with obligatory force
-law does not have to state mutuality; what is provided is the
exception:
1309- there is no violation if the determination of performance is
left to third person
-the contracting parties must be bound, but there are instances
where certain matters are left to determination of third persons
Example: parties agreed on a compromise agreement where one will
send land to other and other agreed he will buy; problem is they
have not determined what the purchase price is; so they have to
constitute a committee to determine the fair price
-this should be part of the contract that determination would be left
to a committee
-can contract be invalidated since determination is left to
committee? No because of 1309
Example: arbitration such as that in barangay where there is pangkat
tagapagkasundo under lupong tagapamayapa that will resolve
disputes or arbitrate
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FREEDOM TO CONTRACT
1306: The contracting parties may establish such stipulations,
clauses, terms, and conditions as they may deem convenient,
provided they are not contrary to law, morals, good customs, or
public policy
Examples/ Situations:
1. Cannot stipulate with spouse that you will have paramours since
this is contrary to public policy, law
2. Contrary to law; employer cannot give wage lower than the
minimum wage
3. Contrary to morals, but how do we determine morals? This is
difficult to prove. The problem is that society is evolving and there
are borderline cases like live-ins. Is that immoral? We cant tell
4. Agreement where you pay family of victim in a criminal case, and
in exchange, they will not file against accused anymore. This is
contrary to public policy. This is illegal.
--but there are also things which appear to be legal but illegal
such as when the mortgaged thing can be automatically
appropriated o mortgagee; this is illegal; property should be
opened to public auction and not automatic appropriation
(pactum commissorium)
5. You cannot prohibit one from selling his land while giprenda niya
nimo, under 2130. He should not be prohibited from selling
6. Shipper limits his liability arising from agreement; only 100K no
matter what cause or value is; illegal
7. Cui vs Arellano case
8. In regard to status of persons; like husband and wife agree na
kana siya d na anak nako
9. In regard to jurisdiction; cannot stipulate the jurisdiction on
courts. But you can stipulate on venue, not the jurisdiction
10. Bustamante vs Rosel Nov 29, 1999
-case of pactum commissorium
-in case of failure to pay, lender has option to buy.
CLASSIFICATION OF CONTRACTS
Can there be contract involving intangibles? Yes such as contract
over sales of stock, assignment of credits
According to subject matter: Things and services can be subject
of contract; also intangibles
PARTIES TO A CONTRACT
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ESSENTIAL REQUISITES
Object, consent and consideration
Signature is manifestation of consent but not necessarily
conclusive
Consideration is the reason why you entered into contract; from
viewpoint of seller is the money; viewpoint of buyer is the thing
CONSENT
1319: Consent is manifested by the meeting of the offer and
acceptance upon the thing and the cause which are to constitute
the contract. The offer must be certain and the acceptance
absolute. A qualified acceptance constitutes a counter-offer.
In business advertisement, you are manifesting that you are ready
to make an offer; but there is no offer yet. You are just inviting to
make the definite offer
When you sell something, it is not required that you state all
particularities; it is enough that object is identifiable
1321: Person making the offer may fix the time, place and manner
of acceptance all of which must be complied with
-if manner of acceptance is that you must do it in writing and you
just used a telephone to accept offer contrary to the agreement,
then there is no valid acceptance
1322: An offer made through an agent is accepted from time
acceptance is communicated to him
-this is an offer made through an agent
Question: Agent can make offer for and in behalf of owner, but if
you want to communicate the acceptance, to whom would you
communicate it? What if you made the acceptance through the
agent and there is this other buyer who made communication
directly to owner, kinsa man nakapalit ani na situation? Assuming
nagdungan ug communicate, kinsa man? Who has superior right?
-It would depend. When you deal with agent, examine the extent
of authority of agent. He may be authorized to make offer but not
authorized to make acceptance. Power of agent to sell must be in
a Special Power of Attorney. Here his duties are enumerated; if
acceptance is not one among enumerated, he has no authority to
make the acceptance. Before determining who has superior right,
determine first extent of authority of agent
Case: Malbarossa vs CA
-When can there be consent when acceptance is made on another
date?
-Example I made an offer to you and you did not immediately
accept. You accepted it but before I knew of acceptance, I already
withdrew the offer; no meeting of minds
-Just like in donation; acceptance must be made to donee during
his lifetime or before he becomes incapacitated
STAGES OF CONTRACTS
1. Preparation
-is there cause of action here? Like in case na nakagasto naka
unya wa diay gidayon ang contract, pasakay sakay rato
-violation of article 19: abuse of rights
2. Perfection
3. Consummation
-contract is deemed fulfilled already
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CONTRACT OF OPTION
is a contract wherein the one given the option is given the
privilege to choose to buy or not to buy within the given period of
time. It is a contract in itself
there is no contract of sale here; what has been paid is only the
option which is a contract distinct and separate from the contract
of sale which will be entered into later
but you have to pay consideration for the option contract;
otherwise, if you did not pay separate consideration for the
option of 15 days, I can withdraw the offer even tomorrow and
you cant complain
but just because you paid option money, it does not follow there
is already contract of sale
if option contract not supported by consideration, it is not binding
option money vs earnest money
-earnest money is part of the purchase price. This presupposes
that there is already contract of sale, unlike option money
in sum, if there is consideration, I cannot withdraw the offer for
15 days since I will be liable. The obligation of offeree is to
manifest acceptance within the 15 day period. You can accept on
16th day basta wai naka una or wa pa gi withdraw
1479 (law on sales)
-this presents a contradictory provision
-gives us the impression that even if the promise to buy or to sell
has already been accepted but if the promise is not supported by
a consideration, it is not binding on the promisor
-on the other hand, 1324 tells us that even if the option is not
supported by a consideration, but once accepted, it is already
binding
-clarified in Sanchez vs Rigos: they abandoned the Southwestern
ruling
[I do not know what your discussion will be later in sales. Some
would content that katong gi accept promise raman, not really
the sale, so lahi na sila. Even if promise is accepted, it doesnt
follow that there is perfected contract of sale. Some say if
promise is accepted, there arises a bilateral contract of sale. So
tagaan tikag option basta gi accept na nimo bisag walai
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3. Undue Influence
1337: There is undue influence when a person takes improper
advantage of his power over the will of another, depriving the
latter of a reasonable freedom of choice. The following
circumstances shall be considered: the confidential, family,
spiritual and other relations between the parties, or the fact
that the person alleged to have been unduly influenced was
suffering from mental weakness or was ignorant or in financial
distress
Financial distress example: employee separated but was forced
by employer to sign that he will not engage in similar job for 5
years. But the person also has other expenses
2. Violence
Often intimidation happens, not violence kay karaan nani
siya
Prove the specific facts and make sure there was really
intimdation that affected free exercise of consent
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4. Fraud
Fraud in the performance of an obligation vs. fraud in securing
the consent of a party
Fraud in the performance: initially, the contract is valid; no vice
of consent but there is fraud because what was delivered Is not
the one agreed upon; fraud in 1176
Fraud in securing the consent
-1335: 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
-Specific example: insurance contract; you wanted a health
insurance but since you are sick, you ask your friend to submit
his medical certificate; but then you die, the insurance
company then was defrauded; had insurance company knew of
your real medical condition, three would have been no
insurance contract (p.446 Jurado)
Fraud is not just bad judgment or negligence; there is malice
here. It connotes a dishonest a dishonest purpose or there is
conscious doing of a wrong
Fraud in securing consent has two kinds: dolo incidente and
dolo causante (do not equate dolo incidente with fraud in the
performance of obligation)
-Woodhouse vs Halili: manufacture of softdrinks and the other
contended that there is fraud because the other represented
that he is a grantee of a franchise; the other said that he did
not represent but merely said he will secure franchise
-SC said: this is not dolo causante kind of fraud (which is the
one required) because even without the representation, the
contract will proceed. But the others share in the partnership
profits should be reduced because he was not the one who
gave effort to secure the franchise
-Geraldez vs CA: fraud here was dolo causante
Situations which do not vitiate/not fraudulent
a. 1340: usual exaggerations in trade, when the other party
had an opportunity to know the facts, are not in themselves
fraudulent
Simulation of Contracts
May be absolute or relative
Absolute simulation: parties have no intention to be bound at all
Example: I ask you to make deed of sale as requirement of my
subject; you make it appear that you are selling but I have no
intention to be bound by it and you have no intention to sell it,
but the deed purports to be genuine; VOID
Relative simulation: parties agree but conceal their true
agreement (1345)
-resorted to for tax purposes
-example: if mag donate ka, bayad kag donors tax. If mag baligya
ka, capital gains tax. When computed, mas dako ang tax sa sale
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-examples:
sale of a parcel of land
-we meet at a coffee shop. We agree on object,
price, is this perfected contract? YES
-taken out of statute of frauds as long as you
pay even small amount, already executed
contract; or you have it in writing
-but before an actual transfer be made in your
favor, you must execute a public document/ a
duly notarized deed of sale signed by the seller
and have it registered in register of deeds so
that once it is already registered, it is binding as
against 3rd persons
(RECORDING #3 & 4)
-agreement you had is valid, but cannot be
registered
-what if dili muexecute public document imo
kasabot, unsaon mana nimo? File a case where
relief you ask is to compel the person to execute
the deed of sale duly notarized
- Article 1357. If the law requires a document or
other special form, as in the acts and contracts
enumerated in the following article, the
contracting parties may compel each other to
observe that form, once the contract has been
perfected. This right may be exercised
simultaneously with the action upon the
contract.
-if person does not voluntarily comply, there are
other remedies: court may just direct clerk of
court to draft the deed of sale in favor of
plaintiff (validity and registrability are different
concepts)
-but before the right in 1357 be availed of, the
contract must be perfected, valid and
enforceable under statute of frauds:
can you compel me to execute a deed
of donation if there was nothing in
writing? No, it was invalid/void
contract must be enforceable: sale
must be in writing to be enforceable, so
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DEFECTIVE CONTRACTS
RESCISSIBLE CONTRACTS (RECORDING #5, 3:20)
Least defective contract
Article 1381. The following contracts are rescissible:
(1) Those which are entered into by guardians whenever
the wards whom they represent suffer lesion by more than
one-fourth of the value of the things which are the object
thereof;
(2) Those agreed upon in representation of absentees, if
the latter suffer the lesion stated in the preceding number;
(3) Those undertaken in fraud of creditors when the latter
cannot in any other manner collect the claims due them;
(4) Those which refer to things under litigation if they have
been entered into by the defendant without the knowledge
and approval of the litigants or of competent judicial
authority;
(5) All other contracts specially declared by law to be
subject to rescission.
---example of number 5: partition among heirs where one
was deprived of his share by more than , the partition
agreement may be rescinded.
the remedy here is to file an action for rescission
contrast this with rescission in reciprocal contracts (1191)
in the former civil code, it was referred in 1191 as
resolution, not rescission
TAKE NOTE: distinguish rescission in 1191 vs rescission
here: they are based on different grounds
-rescission in 1191 is noncompliance; rescission in 1380 is
predicated upon economic damage
-in 1191, rescission can only be asked by party to a
contract; whereas rescission in 1380 may be asked for even
rd
by a 3 person; e.g. a creditor who was defrauded, may not
be a party to the contract but since he is prejudiced ha can
ask the contract entered into by his debtor be rescinded.
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