Part Two

CONTRACTS

General Provisions: (Articles 1305 to 1317)

1. Definitions:
2. Stages in the Making:
3. Classifications according to:
a. Name:
Perez vs. Pomar, 2 P 682
Asian Construction vs. Cathay Pacific Steel, June 29, 2010
b. Subject Matter:
c. Formation:
d. Cause:
e. Parties:
f. Completion of Performance:
g. Dependency on others:
h. Freedom to Bargain:
Serra v. CA, 229 S 60
4. Meeting of the Minds; Obligatory Force:
Jardine Davies vs. CA, 333 SCRA 684
5. Autonomy:
a. Against the Law:
Pakistan International Airways v. Ople, 190 S 90
De Leon vs. CA, September 4, 1992
b. Contrary to Morals:
Azcuna, Jr. vs. CA, 255 S 215
Philam v. Mutuc, 61 S 22
c. Against Good Customs:
Cui vs. Arellano University, 2 S 205
d. Against Public Policy:
Omico Mining and Industrial Corp vs. Vallejos, 63 S 301
e. Contrary to Public Order:
Ferrazzini vs. Gsell, 34 P 697
6. Mutuality of Contracts:
a. Validity:
UCPB vs. Beluso, 530 S 567
Joaquin vs. Mitsumine, 34 P 858
 Allied Bank v. CA, 284 S 357
b. Compliance:
Garcia vs. Legarda, 21 S 555
c. Third Party or Court Determination:
7. Relativity of Contracts:
8. Parties, Assigns, and Heirs:
DKH Holdings vs. CA, 329 S 666;
Luxuria Homes vs. CA, 302 S 315
a. Exceptions; Transmissible Obligations:
b. Stipulation Pour Autrui:
Marmont Hotel vs. CA, 168 S 373;
Coquia vs. Fieldmen’s Insurance, 26 S 178;
Mandarin Villa vs. CA, 257 S 538;
Everett Steamship vs. CA, 297 S 496;
Kauffman vs. PNB, 42 P 182;
Associated Bank vs. CA, 291 S 511
c. Contractual Interference:
Gilchrist vs. Cuddy 29 Phil 542
So Ping Bun vs. CA 314 S 751;
Lagon vs. CA, 453 S 616
9. Consensual v. Real contracts:
10. Unenforceable contracts:
a. Corporate Acts:
Yao Ka Sin v. CA, 209 S 763;
United Namarco Distributors vs. NAMARCO, 114 P 802
b. By an Agent:
Rallos vs. Felix Go Chan, 81 S 251

Essential Requisites: (Articles 1318 to 1355)

Consent
1. Elements:
Clarin v. Rulona, 127 S 512
2. Offer:
a. Definite and Certain:
Rosenstock vs. Burke, 46 P 217
b. Conditions for Acceptance:
Korean Air vs. Yuson, June 26, 2010
3. Acceptance:
a. Absolute vs. Qualified:
Batañgan v. Cojuangco, 78 P 481;
Zayco vs. Serra 44 P 326
b. In person; via agent; by letter or telegram:
Villanueva v. CA, May 26, 1995
c. Withdrawal of the Offer:
Laudico vs. Arias, 43 P 270
d. Express or implied:
e. Effects of death, civil interdiction, insanity, or insolvency of either party before acceptance:
Art 40-41, RPC
4. Option Contract:
Ang Yu Asuncion v. CA, 238 S 602,
Sanchez vs. Rigos, 45 S 368;
Art 1482, NCC
5. Business advertisements:
Jardine Davies v. CA, 333 S 684
a. Mere invitations to make an offer:
b. Advertisements for bidders:
6. Incapacitated persons to give consent to a contract: (Art 1491, NCC; Art 87, FC; Art 37-38, NCC)
a. Minors; exceptions:
Bambalan vs. Maramba, 51 P 417,
Mercado, et al. vs. Espiritu, 37 P 215;
Braganza vs. de Ville Abrille, 105 P 456
b. Insane persons and deaf-mutes who do not know how to write:
c. Drunk or under hypnotic spell:
7. Vice of Consent:
Hernandez vs. Hernandez, March 9, 2011
a. Mistake:
Gomez vs. Linton, 45 P 653;
Atilano vs. Atilano, 28 P 231;
Teran vs. Villanueva, 56 P 677
i. Illiterates:
Tan vs Mandap 429 S 712;
Dela Cruz vs. Dela Cruz 419 S 648
ii. Contracts of Adhesion:
Calilap-Asmeron vs. DBP, November 23, 2011;
Asian Construction vs. Cathay Pacific Steel, June 29, 2010
b. Violence:
c. Intimidation:
 d. Undue influence:
Martinez vs. HSBC, 15 P 252,
Bañez vs. CA, 59 S 15;
Vales vs. Villa, 35 P 769
e. Fraud
Strong vs. Gutierrez, 6 P 680;
Woodhouse vs. Halili 93 P 526;
Cacho vs. Bonifacio 476 S 869;
Araneta vs. De Paterno 91 P 786;
Tuason vs. Marquez, 45 P 381;
Songco vs. Sellner, 37 P 254;
Azarraga vs. Gay 52 P 599
8. Usual exaggerations in trade:
9. Mere expression of an opinion:
Songco vs. Sellner, 37 P 254
10. Misrepresentation:
a. By a third person:
Hill vs. Veloso, 31 P 160
b. In good faith:
Asiasin vs. Jalandoni, 45 P 296
11. Simulation of a contract:
Rodriguez vs. Rodriguez, 127 P 294;
Gonzalez vs. Trinidad, 67 P 682;
Borromeo vs. Borromeo, 98 P 432;
Bravo Guerrero vs. Bravo, 465 S 244
Object of Contracts
1. Commerce of Men:
Blas vs. Santos, 1 S 899;
Uson vs. Del Rosario, 92 P 530
2. Impossible Things or Services:
Castro vs. Longa, 89 P 581
Cause
1. Presumption:
Raet vs. CA, 295 S 677;
PBC vs. Lui She, 21 S 52;
Saguid vs. Security Finance Inc., 477 S 256
2. Kinds:
3. Cause vs. Motive:
Liguez vs. CA, 102 P 577;
Gonzales vs. Trinidad, 67 P 682
4. Legality:
Velez vs. Ramas, 40 P 787
Liam Law vs. Olympic Sawmill, 129 S 449
5. Lesion: (Art 1381, NCC)

Form
1. Required Forms
2. No Form:
Tan vs. Lim, 296 S 455;
San Lorenzo Dev’t Corp. vs. CA, 449 S 99
a. Exception: (Art 748, 749, 1581, 1874, 2134, 1956, 1773, 1403(2)
b. Prescriptibility:
Vda de Espiritu vs. CFI of Cavite, 47 S 354
3. Form for Convenience:
Shaffer vs. Palma, 131 P 22
Hawaiian Phil. Co. vs. Hernaez, 45 P 746;
Dauden vs. de los Angeles, 137 P 900

Reformation of Instruments (Articles 1359 to 1369)

1. Basis:
San Miguel Brewery vs. Law Union and Rock, 40 P 674
2. Definition:
Sarming vs. Dy, 383 S 131
3. Requisites:
Dizon vs. Gaborro, 83 S 688
City of Cabanatuan vs. Lazaro, 39 S 653;
Emilio vs. Rapal, March 30, 2010
4. When Available:
Jayme vs. Alampay, 62 S 131
Ong Chua vs. Carr, 53 P 975

Interpretation of Contracts (Articles 1370 to 1379) Rule 130, Sec. 9, 10, 12, 14 Revised Rules of Civil Procedure

1. General Rule:
Heirs of Amparo del Rosario vs. Santos, 108 S 43;
Labasan vs. Lacuesta, 86 S 16;
Prisma Construction vs. Menchavez, March 9, 2010;
Martin vs. DBS Bank, June 16, 2010
2. Intention of the Parties:
Ramos vs. Heirs of Ramos Sr., 381 S 594;
Carceller vs. CA, 302 S 719;
Almeda vs. Bathala Marketing, 542 S 470
3. Interpretation as a Whole:
Bundalian vs. CA, 129 S 645
4. Custom or Usage: (Art. 12 NCC, Sec. 2-3, Rule 129 New Rules of Evidence; Sec. 10-19, Rules of Court)
Andreas vs. BPI, 47 P 795
5. Obscure words:
Ildefonso vs. Sibal, 106 P 287;
Ong Yong vs. Tiu, 375 S 614;
Gov’t of the Phil vs. Derham Bros, 36 P 960

Rescissible Contracts (Articles 1380 to 1389)

1. Rescission vs. Resolution: (Article 1191 and 1592)

2. Requisites:
Cannu vs. CA, 459 S 80
3. Fraud of Creditors:
CBC vs. CA, 327 S 378;
Oria vs. McMicking 21 P 243
4. Accion Pauliana: (Article 1177)
5. Alienation of Things under Litigation:
Contreras vs. CBC, 76 P 709;
Rule 13, Section 14 RRC
6. Others: (Articles 1098, 1189, 1526, 1534, 1539, 1542, 1556, 1560, 1567, 1659)
Rosencor Dev’t Corp. vs. Inquing, 354 S 119
7. Subsidiary Action:
Suria vs. IAC, 151 S 661;
Regalado vs. Luchsinger, 5 P 625;
Goquiolay vs. Sycip, 9 S 663
8. Restriction:
Goldenrod vs. CA, 299 S 141
9. Presumption of Fraud:
Cabaliw vs. Sadorra, 64 S 310;
Alpuerto vs. Perez Pastor, 38 P 785;
Ayles vs. Reyes, 18 P 243;
Lee vs Bangkok Bank, Feb 9, 2011
Voidable Contracts (Articles 1390 to 1402)

1. Incapacity and Vice of Consent

2. Ratification:
Uy Soo Lim vs. Tan Unchuan, 38 P 552;
De Luna vs Linatoc, 74 P 15;
Rosales vs. Reyes, 25 P 495
3. Prescription
4. Restitution:
Philippine Trust Co. vs. Roldan, 99 P 393

Unenforceable Contracts (Articles 1403 to 1408)

1. Different Kinds:
a. No authority:
Bumanlag vs. Alzate, 144 S 480;
Rallos vs Felix Go Chan, 81 S 251
b. Statute of Frauds:
Almirol vs. Monserrat, 48 P 67;
Hernandez vs. Andal, 78 P 196;
Robles vs. Lizarraga, 42 P 584;
Reiss vs. Memije, 15 P 350;
Syquia vs. CA, 151 S 507
c. Both parties incapacitated
2. Ratification:
Averia vs. Averia, 436 S 459;
Abrenica vs. Gonda, 34 P 739)
3. Attack by Third Persons:
Ayson vs. CA, 97 P 965

Void and Inexistent Contracts

1. Kinds:
Ariaga vda. de Gurrea vs. Suplico, 488 S 332;
Tongoy vs. CA, 123 S 99;
Rongavilla vs. CA, 294 S 289;
Calimlim – Canullas vs. Fortun 129 S 675;
Mapalo vs. Mapalo, 123 P 979;
Manzano vs. Garcia, Nov. 28, 2011
2. Imprescriptibility:
Ras vs. Sua, 134 P 131;
Angeles vs. CA, 102 P 1006;
Terre vs. Terre, 211 S 7;
Atienza vs. Brillantes, 243 S 32;
MWSS vs. CA, 297 S 287
3. In pari delicto:
Batarra vs. Marcos, 7 P 156;
Santos vs. Roman Catholic Church, 94 P 405
a. Exceptions: (Articles 1413 – 1419)

Natural Obligations (Articles 1423 to 1430)

1. Concept:
a. Rationale and Basis: Equity
b. Conditions:
c. Voluntary Fulfillment:
2. Distinctions:
a. Natural v. Moral: (Tie, Fulfillment, Law, Effects of Fulfillment)
b. Natural v. Civil: (Law, Enforceability)
3. Examples:
a. Prescription of Action
b. Reimbursement of a Third Party Payment by the Debtor
c. Minority (Article 235-236 FC)
d. Payment by a Defendant after Favorable Judgment:
e. Heir Paying Debt of Decedent:
f. Payment of Legacy under a Void Will:

Estoppel (Articles 1431 to 1439)

1. Origin:
Strong v. Pepide, 6 P 680
2. Proof Required:
Kalalo vs. Luz, 34 S 337
3. Estoppel v. Laches:
Tijam vs. Sibonghanoy, 32 S 29
Francel Realty vs. Sycip, 469 S 431;
Metromedia Times vs. Pastorin, 465 S 335;
Magtira vs. CA, 96 S 680
4. Elements:
Cristobal vs. Gomez, 50 P 810;
Marques vs. FEBTC, Jan 10, 2011;
Fat Kee Computer vs. Online Networks, Feb 2, 2011
5. Promissory Estoppel:
Terminal Services vs. PPA, 378 S 82
6. By Silence:
De Ynchausti vs. MERALCO, 36 P 908
7. Inapplicability:
a. Citizenship:
Rep vs. Go Bon Lee, 111 P 805
b. Against Government and its Agents:
Republic vs. CA, 354 S 148;
Republic vs. “G” Holdings, 475 S 608
c. Against Municipality:
Favis vs. Municipality of Subangan, 136 P 366
d. Illegal Acts:
Eugenio vs. Perdido, 97 P 41
8. Acts of State Agents:
Bachrach Motors vs. Unson, 50 P 981;
Nilo vs. Romero, 111 P 540;
Leca Realty vs. Republic, 503 S 563

Trusts (Rule 98 Parol Evidence Rule 130 Sec 9; Articles 1440 to 1457)

1. Parties, Concept:
Sotto vs. Teves, 86 S 154
2. Express:
Cuayacong vs. Cuayacong, 129 P 439;
Lorenzo vs. Posadas 64 P 353;
Cristobal vs. Gomez, 50 P 810
3. Implied:
a. Resulting:
Ramos vs. Ramos, 61 S 284;
Padilla v. CA, 53 S 168
Thomson vs. CA, 298 S 280;
Uy Aloc vs. Cho Jan Ling, 19 P 202
b. Constructive:
Juan vs. Yap, Mar 30, 2011
4. Limitations:
Kiel vs. Estate of Sabert, 46 P 193;
Muller vs. Muller, 500 S 65;
Thomson vs. CA, 298 S 280

Extra-Contractual Obligations

Quasi-Contracts
Leung Ben vs. O’Brien, 8 Phil 102

1. Negotiorum Gestio
Sison and Azarraga v. Balgos, 34 P 885
a. Duties of the Officious Manager
b. Responsibilities and Liabilities
c. Consequences of Ratification
d. Extinguishment
2. Solutio Indebiti
a. Concept:
Velez v. Balzaraza, 73 P 630
b. Requisites:
City of Cebu v. Piccio, 110 P 558;
Adres v. Manufacturers Hanover Trust, 177 S 618
c. Mistake of Fact, Mistake of Law:
Puyat and Sons v. City of Manila, April 30, 1963
3. Other Quasi-Contracts
a. Support:
De Marcaida v. Redfern, 49 P 489
b. Funeral Expenses:
c. Third Person Support: (Article 207 of FC)
d. Accidents:
e. Rescue of Property in Calamities:
f. Government Reimbursement:
g. Commingle:
h. Finder of Lost Property (Articles 719-720)
i. Possessor in Good Faith
j. Payment by a Third Person (Articles 1236-1237)
k. Community expenses for Common Protection
l. Payment of Taxes by Another