1. Blas vs.

Santos (Objects of Contracts: Commerce of Men)

Facts

Simeon Blas contracted second marriage without liquidating the conjugal properties
of his former marriage. In order to avoid claims from the heirs of his first
wife(deceased), Simeon Blas before his death asked his second wife Maxima
Santos to execute a contract (Exhibit A) wherein Maxima promised to give half of
her share in their conjugal properties to the heirs and legatees or the beneficiaries
named in the will of Simeon Blas.

Issue/s

Was the contract void because it involved future inheritance? NO

Held

The court ruled that the contract was valid because the object was existing at the
time of the agreement and it did not concern future inheritance.
The properties subject of the contract Exhibit "A" are well defined properties,
existing at the time of the agreement, which Simeon Blas declares in his statement
as belonging to his wife as her share in the conjugal partnership.
Certainly his wife's actual share in the conjugal properties may not be considered
as future inheritance because they were actually in existence at the time Exhibit "A"
was executed.

2. Uson vs. Del Rosario (Object of Contracts: Commerce of Men)

Facts

Maria Uson is the lawful wife of Faustino Nebreda. When Faustino died, he left 5
parcels of land which is the subject of dispute in this case. Uson claims ownership
over the parcels of land being the sole heir of his husband.
On the other hand, respondents (common-law wife and illegitimate children of
Faustino) claims ownership over said parcels saying that Maria Uson renounced
her right to inherit from her husband by virtue of a public document that Uson and
her husband executed whereby they agreed to separate as husband and wife and,
in consideration of their separation, Maria Uson was given a parcel of land by way
of alimony and in return she renounced her right to inherit any other property that
may be left by her husband upon his death.

Issue/s

Was the public document void because it involved future inheritance? YES

Held

The claim of the defendants that Maria Uson had relinquished her right over the
lands in question because she expressly renounced to inherit any future property
that her husband may acquire and leave upon his death in the deed of separation
they had entered into cannot be entertained for the simple reason that future
inheritance cannot be the subject of a contract nor can it be renounced.
Furthermore, the rights of inheritance of Maria Uson over the lands in question
became vested at the moment that her husband died.

3. Castro vs. Longa (Objects of Contracts: Impossible Things or Services)

Facts
Hacienda Biason is co-owned by the Castros and some heirs of a certain
Montenegro. Simeona de Castro executed a contract of lease in favor of Jose
Longa for six agricultural years. A supplemental contract was executed providing for
payment of rental in sugar piculs through quedans. Longa failed to pay such
obligation because the administrator of Central Azucarera absented himself and no
quedan can be issued without his authority.
Issue/s

Can Longa allege force majeure as a defense to relieve himself from his
obligations due to the war? YES

Held

The administrator of Central Azucarera absented himself due to the war. Longa
could not comply with said obligation either because of the order of President
Quezon suspending the milling of sugar cane or prohibiting its planting during the
Japanese occupation, or because he was prevented from doing so in view of the
uncertain condition of peace and order then prevailing in the municipality due to the
war.

4. Raet vs. CA (Cause: Presumption)

Facts
Spouses Raet negotiated with Gatus to buy units in a subdivision developed by
Phil-Ville Devt. Housing Corp. (PVDHC) for parties qualified to obtain loans from
GSIS. Petitioners applied with PVDHC for the purchase of units but its approval is
dependent on petitioners loan application with GSIS. Meanwhile, they were allowed
to occupy some units. GSIS disapproved their loans and petitioners werent able to
raise money, hence PVDHC asked them to vacate the units they were occupying.
Petitioners filed a complaint for specific performance and damages against Gatus
and PVDHC with the Housing and Land Use Arbiter which gave judgment in
petitioners favor. 
Issue/s

Was there a perfected contract of sale between the Spouses and PVDHC?
NO

Held

There were no meeting of the minds as to terms of the contract of sale. At best, only
a proposed contract to sell was obtained. Without perfected contracts, there can be
no specific performance of a contractual obligation as yet non-existent.
There were no written contracts to evidence the sale. The records also do not show
the total cost of the units and the payment schemes, and figures given were just
estimates of Gatus, who is not even an agent of PVDHC. PVDHC had no
knowledge of the figures given by Gatus, thus it could not have ratified the same.

5. PBC vs. Lui She (Cause: Presumption)

Facts
Justina Santos (substituted by PBC) executed various contracts in favor of Wong
Heng (substituted by Lui She) as a grateful acknowledgment of the personal
services of the latter. One of the contracts extended the lease term to 99 years and
another granted Wong an option to buy the leased premises within the 50-year
period.
After some time, Justina sought for annulment of the contracts on various grounds,
one of which was because the lease contract, like the rest of the contracts, is
absolutely simulated due to a lack of consideration.
Issue/s

Were the contracts void? YES, but because of illegal purpose (transfer of
lands to aliens), not lack of consideration

Held

Although Atty. Alonzo (lawyer who prepared the contracts) declared that he saw no
money paid at the time of the execution of the documents, his negative testimony
does not rule out the possibility that the considerations were paid at some other
time as the contracts in fact recite.
What is more, the consideration need not pass from one party to the other at the
time a contract is executed because the promise of one is the consideration for the
other. The illicit purpose, which was to transfer ownership to an alien, becomes the
illegal causa" rendering the contracts void.

6. Saguid vs. Security Finance Inc. (Cause: Presumption)

Facts
Respondent Security Finance alleged that petitioner Spouses Saguid defaulted in
complying with the terms and conditions of the Promissory Note (loan contract) and
the Mortgage in consideration for a Toyota Corolla car by failing to pay the
installments when they were due.
Petitioners contended that they bought the car in cash, and not thru the proceeds of
the loan that respondent alleged that the petitioners secured with them. Petitioners
argue that the contract does not bind them for lack of cause.
Issue/s

Were the petitioners bound by the promissory note and the mortgage? NO

Held

The third element (cause) is lacking because there was no transaction between the
parties for the proceeds of the loan which were used in purchasing the subject
motor vehicle.
Under Article 1354 of the NCC, it is presumed that consideration exists and is lawful
unless the debtor proves the contrary. The presumption cannot be overthrown by
mere assertion that it has no consideration; alleged lack of consideration must be
shown by preponderance of evidence.
The following evidence were presented to show that they bought the car in cash,
and not in installment basis: vehicle sales invoice, vehicle delivery note, certificate
of registration, official receipts.
Since it has been established that there was no cause for the principal obligation in
the promissory note, it follows that the mortgage, which is an accessory, has no
validity.

7. Liguez vs. CA (Cause vs. Motive)

Facts
Liguez filed a case against the wife of Lopez and his heirs (respondent) to recover a
parcel of land in Davao. She contended that she is the legal owner of such property
pursuant to a deed of donation of said land executed by the late owner, Lopez.
The private respondents countered that the donation was null and void for having
an illicit causa or consideration, which was the plaintiff's entering into marital
relations with Salvador P. Lopez, a married man.
CA found that (1) the donation was made in view of the desire of Salvador P.
Lopez, a man of mature years, to have sexual relations with appellant Conchita
Liguez; and (2) that Lopez had confessed to his love for appellant to the
instrumental witnesses, with the remark that her parents would not allow Lopez to
live with her unless he first donated the land in question.
Issue/s

Was the donation void for having an illicit cause? YES

Held

SC, citing Manresa, ruled that while maintaining the distinction and upholding the
inoperativeness of the motives of the parties to determine the validity of the
contract, expressly excepts from the rule those contracts that are conditioned upon
the attainment of the motives of either party.
In the present case, it is scarcely disputable that Lopez would not have conveyed
the property in question had he known that appellant would refuse to cohabit with
him; so that the cohabitation was an implied condition to the donation, and being
unlawful, necessarily tainted the donation itself.
In making the donation in question, the late Salvador P. Lopez was not moved
exclusively by the desire to benefit appellant Conchita Liguez, but also to secure
her cohabiting with him, so that he could gratify his sexual impulses.

8. Gonzales vs. Trinidad (Cause vs. Motive)

Facts
A property mortgaged was fictitiously sold by Trinidad to Gonzales. The sale was
simulated and the supposed vendors did not receive the alleged price. Court of
First Instance declared the deed of sale null and void and dismissing, under articles
1305 and 1306 (illegal cause) of the Civil Code, the action of the plaintiffs as well as
the counterclaim of the defendants.
Issue/s

Was the contract void? Was the cause illegal? YES, NO

Held

The court ruled that there was a consideration (10,000) and the subject matter was
lawful. However as the contract in itself was fictitious and simulated price, the
consideration being thus lacking, the contract was null and void per se or
nonexistent.

9. Velez vs. Ramas (Cause: Legality)

Facts
Restituta Quirante was an employee in the pawnshop owned by spouses Velez
(plaintiffs). Restituta abstracted various sums of money belonging to the plaintiffs
which constituted estafa. When this was found out by the petitioners, the husband
and father of Restituta executed a document in order to prevent the matter from
reaching litigation.
The contract executed by both parties stated that the Spouses Velez shall suspend
bringing legal action against Restituta, and the husband and father of Restituta
would pay the Spouses the amount abstracted until fully paid, with 12 percent
interest per annum.
Spouses instituted an action for the collection of the unpaid amount. Respondent
defense was that the alleged contract was illegal on its face.
Issue/s

Was the agreement between the parties valid? NO

Held

The Court held that an action cannot be maintained upon the contract because the
consideration is clearly illicit, which fact is apparent on the face of the contract. It
has been considered contrary to public policy to allow parties to make agreements
designed to prevent or stifle prosecutions for crime and a contract based upon an
unlawful consideration or designed to promote an unlawful object is an always has
been void ad initio by the common law, by the civil law, moral law, and all laws
whatsoever.

10. Liam Law vs. Olympic Sawmill (Cause: Legality)

Facts
Liam Law loaned P10,000, without interest, to the defendant partnership. The said
partnership failed to pay on the due date. Another document was executed by the
parties extending the deadline for payment but the obligation was increased by
6,000 pesos. The partnership still failed to pay, thus Liam filed this collection case.
Olympic argues that this additional amount constituted usurious interest.
Issue/s

Was the additional obligation legal? YES

Held

In regards to the agreement of the parties relative to the P6,000 obligation, "it is
presumed that the cause exists and is lawful, unless the debtor proves the
contrary".
Olympic Sawmill had not proven that the P6,000 obligation was illegal. Confirming
the Trial Court's finding, we view the P6,000 obligation as liquidated damages
suffered by plaintiff, as of March 17, 1960, representing loss of interest income,
attorney's fees and incidentals.
If the entity sued shall not file its answer under oath denying the allegation of usury,
he shall be deemed to have admitted the usury. The provision does not apply to a
case, as in the present, where it is the defendant, not the plaintiff, who is alleging
usury.

11. Tan vs. Lim (Form: No Form)

Facts
The 488 sq m. property in question was formerly owned by brothers Victoriano and
Joaquin who are both dead. Victorianos share was inherited by Flora, et al while
the other was inherited by Ambrocio, et al. Ambrocio et al sold their property to
respondent Lim while Flora et al leased their property to petitioner Tan. In this case,
Lim argues that since there was no note, memorandum or any deed of partition
which evidenced the oral agreement of co-owners, he owns the entire property
(including Lims).
Issue/s

Was the oral partition of the lands valid and binding? YES

Held

The Court held that contracts are obligatory in whatever form they may have been
entered into provided that all essential requirements are present. The fact that both
lease contract and deed of sale provides a definite portion of the land (1/18th share,
southeastern portion), indicates that there was a partition or else they could not
have specified such. Moreover, there was a judicial admission by Flora et al that
there was indeed a partition.

12. San Lorenzo Devt Corp vs. CA (No Form)

Facts
Spouses Lu purportedly sold two parcels of land to respondent Pablo Babasanta.
He made a P50k downpayment as evidenced by a receipt. Babasanta demanded
the execution of a final deed of sale in his favor so that he could pay the full
purchase price. Babasanta requested for a reduction of the purchase price which
was refused by the spouses. Babasanta filed a Complaint for Specific Performance
and Damages against the Spouses Lu.
SLDC filed a Motion for Intervention alleging that it had legal interest because the
two parcels of land involved had been sold to it in a Deed of Absolute Sale with
Mortgage.
Issue/s

Who between SLDC and Babasanta has a better right to the said lands?
SLDC

Held

Contracts shall be obligatory in whatever form they may have been entered into,
provided all the essential requisites for their validity are present.
An analysis of the facts and evidences leads to the conclusion that the agreement
between Babasanta and the Spouses Lu is a contract to sell and not a contract of
sale.
After SLDC had paid more than one half of the agreed purchase price, the Spouses
Lu subsequently executed a Deed of Absolute Sale in favor or SLDC.
At the time both deeds were executed, SLDC had no knowledge of the prior
transaction of the Spouses Lu with Babasanta. SLDC qualifies as a buyer in good
faith since there is no evidence extant in the records that it had knowledge of the
prior transaction in favor of Babasanta.

13. Vda de Espiritu vs. CFI of Cavite (No Form: Prescriptibility)

Facts
Petitioner alleges that sometime in 1948, private respondents verbally sold to her
two parcels of land. Despite demands, respondents failed to deliver the land and
the title certificates. Respondents also insist that the transaction was not a sale, but
a loan for which petitioner demanded the delivery of lands and titles as security. In
1964, petitioner instituted this case.
Respondents contend that the action has already prescribed, therefore the case
must be dismissed.
Issue/s

Has the action already prescribed? YES

Held

Being an oral contract, the applicable provision here is Art. 1145 which reads: The
following actions must be commenced within six years: 1) upon an oral contract; 2)
upon a quasi- contract.
The other possibility would be Art. 1149: All other actions whose periods are not
fixed in this Code or in other laws must be brought within five years from the time
the right of action accrues.
In this case, the action was brought 16 years later, thus petitioners action had
already prescribed.

14. Shaffer vs. Palma (Form for Convenience)

Facts
Shaffer filed a complaint against the defendant spouses Palma to recover sums of
money and shares of stock. She prayed in her complaint that judgment be
rendered ordering the defendants, in solidum, to pay plaintiff the sum of P118,000.
Lower court ruled that the action is based on an agreement which involves the
amount of P118,000.00 and that unless the agreement is in writing it is
unenforceable.
Issue/s

Was the agreement involving 118k pesos unenforceable for not being in
writing? NO

Held

The contract is valid even if it is not in writing because contracts are binding upon
the parties in whatever form they may have been entered into unless the law
requires otherwise.
It is true that Article 1358 of the Civil Code provides that contracts involving more
than P500.00 must appear in writing but nothing is said therein that such
requirement is necessary for their validity or enforceability. It has been held that the
writing required under Article 1358 is merely for convenience, and so the agreement
alleged in the amended complaint in the present case can be enforced even if it
may not be in writing.

15. Hawaiian Phil Co. vs. Hernaez (Form for Convenience)

Facts
Hernaez failed to pay his indebtedness arising from a real mortgage on his land in
favor of Kappeler, which assigned the real estate mortage to Hawaiian Company.
Hernaez set up the defense that when he paid the interest, he was allowed to
extend the time of payment for two years by a verbal agreement.
Issue/s

Was the time of payment extended by the verbal agreement? NO

Held

The common-law rule is to the effect that a verbal agreement to extend the time of
payment of a mortgage is binding, and suspends the right to foreclose if founded
on a good consideration and otherwise valid; but if made without consideration, it
amounts to nothing, and the mortgage may be foreclosed at any time.
The courts in a series of decisions have held that the Civil Code permits a verbal
agreement for the sale of real estate, and that it is not necessary that such an
agreement be evidenced by a public document.
However, Hernaez failed to specify that the extension of time for payment of his
debt was pursuant to an oral agreement supported by a valuable consideration.
We rule that a mortgage deed of registered land may only be legally extended by a
form of written instrument sufficient in law for the purpose. We rule that a
consideration is necessary for a modification of a contact such as an agreement for
the extension of time of performance of a mortgage, and that the moving party must
plead and prove such consideration.

16. Dauden vs. de Los Angeles (Form for Convenience)

Facts
Petitioner Marlene Dauden-Hernaez, a motion picture actress, had filed a complaint
against herein private respondents to recover P14k representing a balance
allegedly due said petitioner for her services as leading actress in two motion
pictures produced by the company, and to recover damages.
The respondent court ordered the complaint dismissed, mainly because the "claim
of plaintiff was not evidenced by any written document, either public or private" and
the complaint "was defective on its face" for violating Articles 1356 and 1358 of the
Civil, Code.
Issue/s

Was the lower court correct in invalidating the contract ? NO

Held

The Court held that the contract (compensation for services) is valid and
enforceable. It is true that it appears included in Article 1358, last clause, providing
that "all other contracts where the amount involved exceeds five hundred pesos
must appear in writing, even a private one."
But Article 1358 nowhere provides that the absence of written form in this case will
make the agreement invalid or unenforceable. On the contrary, Article 1357 clearly
indicates that contracts covered by Article 1358 are binding and enforceable by
action or suit despite the absence of writing. It is not enough that the law should
require that the contract be in writing, as it does in Article 1358. The law must
further prescribe that without the writing the contract is not valid or not enforceable
by action.