Guide Questions
Guide Questions
12 August 2020
Course Description :
Civil Law Review 2 is an integration of the principles in Civil Law relating to obligations
& contracts, sales, lease, quasi-contracts, credit transactions, quasi-delicts and damages.
It is basically covered by Book IV, Titles I, II, III, IV, V, VI, VII, VIII, IX, X, XI, XII,
XIII, XV, XVI, XVII, XVIII & XIX of the Civil Code of the Philippines.
Course Objectives :
1. Understand the basic principles applicable to obligations and its different sources.
2. Identify the rights and obligations of parties to these obligations.
3. Appreciate and apply these fundamental principles to actual business transactions.
4. Encourage diligence and the observance of honesty and fair dealings at all times.
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Course Outline
A. In General
4. Elements of Obligations
On January 4, 1943, during the Japanese military occupation, the land was acquired by a Japanese
corporation by the name of Taiwan Tekkosho
After liberation on April 4, 1946, the Alien Property Custodian of the United States of America took
possession, control, and custody of the property pursuant to the Trading with the Enemy Act
The property was occupied by the Copra Export Management Company under a custodian
agreement with US Alien Property Custodian. When it vacated the property, it was occupied by
defendant National Coconut Corporation
The plaintiff made claim to the said property before the Alien Property Custodian. Alien Property
Custodian denied such claim
It bought an action in court which resulted to the cancellation of the title issued in the name of
Taiwan Tekkosho which was executed under threats, duress, and intimidation; reissuance of the title
in favor of the plaintiff; cancellation of the claims, rights, title, interest of the Alien property
Custodian; and occupant National Coconut Corporation’s ejection from the property. A right was
also vested to the plaintiff to recover from the defendants rentals for its occupation of the land from
the date it vacated.
Defendant contests the rental claims on the defense that it occupied the property in good faith and
under no obligation to pay rentals.
ISSUE: Whether or not the defendant is obliged to pay rentals to the plaintiff
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HELD: No. Nacoco is not liable to pay rentals prior the judgment. If defendant-appellant is liable at
all, its obligations, must arise from any of the four sources of obligations, namley, law, contract or
quasi-contract, crime, or negligence. (Article 1089, Spanish Civil Code.) Defendant-appellant is not
guilty of any offense at all, because it entered the premises and occupied it with the permission of
the entity which had the legal control and administration thereof, the Allien Property Administration.
Neither was there any negligence on its part.
The Metrobank v. Rosales and Yo Yuk To, G.R. No.183204, Jan. 13, 2014
FACTS:
In 2000, respondent Ana Grace Rosales, an owner of a travel agency, and her mother Yo Yuk
To opened a Joint Peso Account10 with petitioner bank. In May 2002, respondent Rosales
accompanied her client Liu Chiu Fang, a Taiwanese National applying for a retiree’s visa from
the Philippine Leisure and Retirement Authority (PLRA), to petitioner’s branch in Escolta to
open a savings account.
On 31 July 2003, petitioner issued a "Hold Out" order against respondents’ accounts. On 3 Sept
2003, petitioner filed a criminal case for Estafa through False Pretences, Misrepresentation,
Deceit and Use of Falsified Documents against the respondent. It was alleged that the
respondents are the one responsible for the unauthorized withdrawal fo $75,000 from Liu Chiu
Fang’s account. Petitioner alleged that on 5 Feb 2003, it received from the PLRA a Withdrawal
Clearance for the account of Liu Chiu Fang, that in the afternoon of the same day, respondents
went to inform the branch head Gutierrez that Liu Chiu Fang was going to withdraw her
deposits in cash. Gutierrez told respondents to come back the following day for the bank did not
have enough dollars. On 6 Feb, respondents accompanied an unidentified impostor to the bank
with enabled them to withdraw Liu Chiu Fang’s dollar deposit.
On 3 Mar 2003, respondents opened a Joint Dollar Account with petitioner bank with an initial
deposit of $14,000. The bank later discovered that the serial numbers of the dollar notes
deposited by respondents were the same as those withdrawn by the impostor.
On 10 Sept 2004, respondents filed before the RTC of Manila a Complaint for Breach of
Obligation and Contract with Damages, against petitioner. Respondents alleged that they
attempted several times to withdraw their deposits but were unable to because petitioner had
placed their accounts under "Hold Out" status. No explanation, however, was given by petitioner
as to why it issued the "Hold Out" order. Petitioner alleged that respondents have no cause of
action because it has a valid reason for issuing the "Hold Out" order. It averred that due to the
fraudulent scheme of respondent Rosales, it was compelled to reimburse Liu Chiu Fang the
amount of US$75,000.0050 and to file a criminal complaint for Estafa against respondent
Rosales.
ISSUE:
Whether or not the Metrobank breached its contract with respondents Rosales.
HELD:
Yes. The Court held that Metrobank’s reliance on the “Hold Out” clause in the
Application and Agreement for Deposit Account is misplaced. Bank deposits, which are in the
nature of a simple loan or mutuum, must be paid upon demand by the depositor.
The “Hold Out” clause applies only if there is a valid and existing obligation arising
from any of the sources of obligation enumerated in Article 1157 of the Civil Code, to wit: law,
contracts, quasi-contracts, delict, and quasi-delict. In this case, petitioner failed to show that
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respondents have an obligation to it under any law, contract, quasi-contract, delict, or quasi-
delict. And although a criminal case was filed by petitioner against respondent Rosales, this is
not enough reason for petitioner to issue a “Hold Out” order as the case is still pending and no
final judgment of conviction has been rendered against respondent Rosales.
In fact, it is significant to note that at the time petitioner issued the “Hold Out” order, the
criminal complaint had not yet been filed. Thus, considering that respondent Rosales is not
liable under any of the five sources of obligation, there was no legal basis for petitioner to issue
the “Hold Out” order. Accordingly, we agree with the findings of the RTC and the CA that the
“Hold Out” clause does not apply in the instant case.
In view of the foregoing, the Court found that petitioner is guilty of breach of contract
when it unjustifiably refused to release respondents’ deposit despite demand. Having breached
its contract with respondents, petitioner is liable for damages.
a. Negotiorum Gestio
b. Solutio Indebiti
c. Other Quasi-Contracts
C. Compliance with Obligations – Arts. 19, 1163-1166, 1244, 1246, 1460, 442,
440
Obligations
1A In General-Kinds of obligations as to perfection
[Follow the Outline]
Part One
Modified True or False.Consider the statement true only when it is absolutely true.
Explain ALL your answers.
Part Two
Multiple Choice. Choose the best answer.
Part Three
Give direct and concise but complete answers.
Cite authorities, if any.
2. An obligation to pay a sum of money evidenced by a promissory note dated April 29, 2008 is a
natural obligation.
2. Sara borrowed ₱50,000.00 from Julia and orally promised to pay it within six months. When Sara
tried to pay her debt on the 8 month, Julia demanded the payment of interest of 12% per annum because
th
of Sara’s delay in payment. Sara paid her debt and the interest claimed by Julia. After rethinking, Sara
demanded back from Julia the amount she had paid as interest. Julia claims she has no obligation to
return the interest paid by Sara because it was a natural obligation which Sara voluntarily performed and
can no longer recover. Do you agree? Explain. (4%)
E.
No, I do not agree with Julia. For a creditor to be entitled to compensatory interest, the debtor must be in delay. As a rule, in
order for delay to exist, demand must have been made. In this case, there was no demand made upon the expiration of the 6-
month period; thus, Sara cannot be considered in delay, and is not liable to pay compensatory interest. There being no obligation
to pay compensatory interest, Julia must return the interest mistakenly paid since she was not entitled thereto, and delivery was
made merely through mistake. If something is received when there is no right to demand it, and it was unduly delivered through
mistake, the obligation to return arises (Art. 2154, Civil Code)
4. In January 2018, Mrs. A, a married woman on her sixth (6 ) month of pregnancy, was crossing a
th
street when she was suddenly hit by a car being recklessly driven by Mr. X. As a result, Mrs. A
sustained serious injuries and further, suffered an unintentional abortion. Mrs. A was hospitalized
for two (2) months, during which she incurred P400,000.00 in medical fees. Her expenses were all
duly substantiated by official receipts. During the two (2)-month period of her confinement, she was
unable to report for work and earn any salary, which was established at the rate of P50,000.00 per
month. Mrs. A then filed a civil case for damages against Mr. X.
(a) Based on the case filed by Mrs. A, what is the source of Mr. X's obligation to her as a
result of his acts? Explain.
It is not delict, because there no conviction. There is no criminal charges filed against the driver. The correct answer is
quasi-delict.
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5. Saachi opened a savings bank account with Shanghainese Bank. He made an initial deposit of
PhP100,000. Part of the bank opening forms that he was required to sign when he opened the
account was a Holdout Agreement which provided that should he incur any liability or obligation to
the bank, the bank shall have the right to immediately and automatically take over his savings
account deposit. After he opened his deposit account, the Shanghainese Bank discovered a scam
wherein the funds in the account of another depositor in the bank was withdrawn by an impostor.
Shanghainese Bank suspected Saachi to be the impostor, and filed a criminal case of estafa against
him. While the case was still pending with the Prosecutor’s office, the bank took over Saachi’s
savings deposit on the basis of the Holdout Agreement.
(b) In this case, did the bank have the right to take over Saachi’s bank deposit?
NO, The “Hold Out” clause applies only if there is a valid and existing obligation arising from any of the
sources of obligation enumerated in Article 1157 of the Civil Code, to wit: law, contracts, quasi-contracts,
delict, and quasi-delict.
In this case, petitioner failed to show that respondents have an obligation to it under any law,
contract, quasi-contract, delict, or quasi-delict.
6. If A was convicted of Murder by the trial court but died before his appeal could be decided by the
Supreme Court, may the estate of A be held civilly liable under delict?
HELD: Yes. Art 2154 of the New Civil Code is applicable. For this article to apply, the following
requisites must concur: 1) that he who paid was not under obligation to do so; and 2) that payment
was made by reason of an essential mistake of fact.
There was a mistake, not negligence, in the second remittance. It was evident by the fact that both
remittances have the same reference invoice number.
8. Can the employer and his driver-employee be held solidarily liable for breach of contract?
NO. the contract is between passenger and owner
Can the employer and his driver-employee be held solidarily liable under delict?
9. In an action for damages filed by a passenger of a common carrier, can the latter raise as a defense
that he exercised the diligence required in the selection and supervision of employees?
11. In an obligation to deliver a car, would the delivery of a brand new Toyota Wigo be a sufficient
compliance with the obligation? NO
12, Are the following obligations valid, why, and if they are valid, when is the obligation demandable in
each case?
(a) If the debtor promises to pay as soon as he has the means to pay; YES
(b) If the debtor promises to pay when he likes;
(c) If the debtor promises to pay when he becomes a lawyer;
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(d) If the debtor promises to pay if his son, who is sick with cancer, does not die within one
year.
13. What kind of obligation as to Perfection & Extinguishment was the obligation to construct the roads
in Araneta v. Phil Sugar Estates?
14. Pedro promised to give his grandson a car if the latter will pass the bar examinations. When his
grandson passed the said examinations, Pedro refused to give the car on the ground that the
condition was a purely potestative one. Is he correct or not?
15. Zeny and Nolan were best friends for a long time already. Zeny borrowed 310,000.00 from Nolan,
evidenced by a promissory note whereby Zeny promised to pay the loan “once his means permit.”
Two months later, they had a quarrel that broke their long-standing friendship.
Nolan seeks your advice on how to collect from Zeny despite the tenor of the promissory note. what
will your advice be? Explain your answer.
16. In Millare v. Hernando, was Article 1197 applied? Why or Why not?
In Lim v. People, was Article 1197 applied? Why or Why not?
17. Before the arrival of a period, can a debtor be compelled to perform the obligation?
18. If the period was fixed solely for the benefit of the debtor, may the debtor be compelled to perform
even before the arrival of the period?
2. As to Plurality of Prestation
a. conjunctive
b. alternative – Arts. 1199-1205
c. facultative – Art. 1206
Arco Pulp and Paper Co., Inc. and Santos v. Lim, G.R. No. 206806, June 25, 2014
a. Joint
b. Solidary – Arts. 927, 1824, 1911, 1915, 1945, 2157, 2194, 2146
Arts. 94, 121 FC ; Art. 90 RPC
c. Disjunctive
a. Divisible
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b. Indivisible
c. Joint indivisible
d. Solidary indivisible
Sps. Lam v. KODAK PHILIPPINES, G.R. No. 167615, January 11, 2016
Honrado vs. GMA Network Films, Inc., G.R. No. 204702, January 14, 2015
Manner of Breach
1. fraud – Arts. 1171, 1338, 1344
2. negligence – Arts. 1171-1173
3. delay – Arts. 1169, 1165, 1786, 1788, 1896, 1942
4. any other manner of contravention
1. Extra-judicial remedies
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2. Judicial remedies
a. principal remedies – Arts. 1191, 1170
b. subsidiary remedies – Arts. 1380, 1177
c. ancillary remedies – Rules of Court
Kinds of Compensation
a. legal
b. conventional facultative c.
judicial
Kinds of Novation
a. As to its nature
i) subjective or personal
ii) objective or real
b. As to its form
i) express
ii) implied
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A. In General
2. Elements of Contracts
a. essential
b. natural
c. accidental
Contract of Adhesion
Daisy Tiu v. Platinum Plans, G.R. No. 163512 February 28, 2007
Cui v. Arellano University, 2 SCRA 205
Saura v. Sindico, 107 Phil 336
Leal v. IAC, 155 SCRA 394
Acceleration Clause
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Escalation Clause
New World v. AMA CLC, G.R. No. 187930, February 23, 2015
Saludo, Jr. vs. Security Bank Corp., G.R. No. 184041, October 13, 2010
Metropolitan Bank and Trust Company vs. Reynado and Adrandea, G.R.
No. 164538 August 9, 2010
Prudential Bank vs. Abasolo, G.R. No. 186738 September 27, 2010
Asian Cathay Finance and Leasing Corporation vs. Spouses Cesario
Gravador and Norma de Vera,et. al, G.R. No. 186550 July 5, 2010
Velasco v. CA, 95 SCRA 616
Kauffman v. PNB, 42 Phil 182
Bonifacio Bros. v. Mora, 20 SCRA 261
Florentino v. Encarnacion, 79 SCRA 192
Bank of America v. IAC, 145 SCRA 419
Marimperio v. CA, 156 SCRA 368
Daywalt v. Corp de PP Agustinos, 39 Phil 587
Gilchrist v. Cuddy, 29 Phil 542 (1915)
Estate of K.H. Hemady v. Luzon Surety, 100 Phil 389 (1956)
So Ping Bun v. CA, 314 SCRA 751 (1999)
Sanico and Castro v. Colipano, G.R. No. 209969, 27 Sept 2017
C. Classification of Contracts
4. according to purpose
a. transfer of ownership – Arts. 725, 1458, 1638
b. conveyance of use – Arts. 562, 1642, 1933
c. rendition of service – Arts. 1642, 1868
7. according to risk
a. commutative
b. aleatory – Arts. 2010
8. according to name
a. nominate
b. Innominate – Arts. 1307
D. Stages of Contracts
1. Negotiation
2. Perfection
3. Performance
4. Consummation
Cognition Theory
Manifestation Theory
2. object certain which is the subject matter of the contract – Arts. 1347-
1349, 1311, 1178
3. cause of the obligation_– Arts. 1350-1355
4. Delivery
5. Due observance of prescribed formalities
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Rescissible Contracts
Cabaliw v. Sadorra, 64 SCRA 310
Hongkong & Shanghai Bank v. Pauli, 161 SCRA 634
Voidable Contracts
Felipe v. Heirs of Aldon, 120 SCRA 628
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Unenforceable Contracts
Ortega v. Leonardo, 103 Phil 870
Carbonel v. Poncio, 103 Phil 655
Babao v. Perez, 102 Phil 756
Cabague v. Auxilio, 92 Phil 294
Yuvienco v. Dacuycuy, 104 SCRA 668
Clarin v. Rulona, 127 SCRA 512
Bisaya Land Transportation v. Sanchez, 153 SCRA 532
Void or Inexistent
Clemente v. CA, Jalandoon, GR No. 175483, October 14, 2015
Hernandez v. CA, 160 SCRA 821
Rubias v. Batiller, 51 SCRA 120
Javier v. vda. De Cruz, 80 SCRA 343
Menil v. CA, 84 SCRA 413
Director of Lands v. Alba, 88 SCRA 513
Tongoy v. CA, 123 SCRA 99
Lita Enterprises v. IAC, 129 SCRA 79
Arsenal v. IAC, 143 SCRA 40
Manotok Realty v. IAC, 149 SCRA 372
Portugal v. IAC, 159 SCRA 178
Yanas v. Acaylar, 136 SCRA 52
Barsobia v. Cuenco, 113 SCRA 547
Godinez v. Fong, 120 SCRA 223
Yap v. Grageda, 121 SCRA 244
Pineda v. de la Rama, 121 SCRA 671
Liguez v. CA, 102 Phil 577
Philbanking v. Lui She, 21 SCRA 52
Avila v. CA, 145 SCRA 541
Teja Marketing v. IAC, 148 SCRA 347
Briones v. Cammayo, 41 SCRA 404
Special Contracts
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SALES
A. In General
Essential Elements - Art. 1459-1465, 1469-1474, 1489, 1327, 1390, 1403, 1489, 1490,
1491, 1492, 1348, 1347, 1624-1627
1. consent of the contracting parties
2. determinate subject matter [thing or right]
3. price certain in money or its equivalent
Natural Elements
Accidental Elements
Contract of Option
Formalities of Contract of Sale - Art. 1483
Payment of Price
Right of Inspection
Acceptance
G. Extinguishment of Sale
Causes
Redemption [Conventional & Legal]
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Barter or Exchange
LEASE
I. Nature
A. Kinds of Lease
B. Definitions
C. Characteristics
D. Distinguished from other contracts/legal relations
A. consent
B. object /purpose : period
C. cause
Formalities
A. Necessary repairs
B. Improvements
C. Collapse of a building
D. Reduction of the Rent
E. Extension of the Lease
F. Right of First Refusal
G. Sublease & Assignment of the Lease
Spouses Chung v. Ulanday construction, Inc., G.R. No. 156038, October 11, 2010
Cebu Bionic Builders Supply, Inc. v. DBP, G.R. No. 154366, November 17, 2010
Mores v. Yu-Go, G.R. No. 172292 July 23, 2010
Dee v. CA, 176 SCRA 651 (1989)
Herrera v. Herrera, 7 Phil 274
Gonzales v. Mateo, 74 Phil 573
Dakudao v. Judge Consolacion, 122 SCRA 877 (1983)
Manlapat v. Salazar, 98 Phil 356
Equatorial Realty Dev’t, Inc. v. Mayfair Theater, Inc., 264 SCRA 483, November 21, 1996
Pamintuan v. CA, 42 SCRA 344
Heirs of Dimaculangan v. IAC, 170 SCRA 393 (1989)
Fermin v. CA, 196 SCRA 723
AGENCY
I. In General : Nature
A. Definition
B. Characteristics
C. Distinguished from/compared with other relations
[Features of a contract of agency]
Liability when there are two or more principals : solidary (Art. 1915)
Rights of Third Persons in Incompatible contracts with agent and principal
I. In General
A. Definition
B. Characteristics of Partnership as a Contract
C. Distinguished from other Combinations and Relations
1. In General
2. Kinds of Trusts
a. Express
b. Implied
A. Definition
B. Scope
C. Distinguished from Bailments
II. Loans
A. Definition : Purpose
B. Kinds of Loan :
I. Commodatum : Precarium
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G. Modes of Extinguishment
III. Deposit
Vintola v. IBAA, 150 SCRA 578, G.R. # 73271 May 29, 1987
Sia v. People, 121 SCRA 661 (1983)
Gonzales v. Go Tiong and Luzon Surety, 104 Phil 492 (1958)
Consolidated Terminals v. Artex Development Co., 63 SCRA 46 (1975)
Roman Catholic Bishop v. de la Peña, 26 Phil 144 (1913)
D. Modes of Extinguishment
1. In general
a. Kinds of Pledge
b. Characteristics of Pledge
c. Extent/Coverage of the Pledge
B. Rights and Obligations of the Pledgor [Debtor or Third Person]
C. Rights and Obligations of the Pledgee [Creditor]
D. Modes of Extinguishment
A. In general
1. Characteristics
2. Subject Matter
3. Extent/Coverage of the Mortgage
B. Essential Requisites
Formal Requisite; Affidavit of Good Faith
C. Rights and Obligations of the Mortgagor [Debtor or Third Person]
D. Rights and Obligations of the Mortgagee [Creditor]
E. Modes of Extinguishment
V. Concurrence and Preference of Credit [Arts. 2236-2251 NCC; Act No. 1956, as amended,
Insolvency Law]
A. General Provisions
B. Classification of Credits
C. Order of Preference of Credits
I. Introduction
A. Nature of Quasi-delict
B. Quasi-delict distinguished from Tort, Crime, Contract
C. Scope/Sources of Law
1. Concept of Negligence
2. Standard of Care : Degree of Diligence
3. Proof of Negligence : Burden of Proof
Presumptions of Negligence
Doctrine of Res Ipsa Loquitur
B. Damage or Injury
C. Causal Connection between the Act or Omission and the Damage
A. In General
B. Kinds of Damages
1. Actual or Compensatory
2. Moral
3. Nominal
4. Temperate or Moderate
5. Liquidated
6. Exemplary or corrective
Prescribed Textbooks:
Arturo M. Tolentino, Commentaries & Jurisprudence on the Civil Code of the Philippines,
Vol. 4, Central LawBook Pub., 1987
Balane, Ruben F, Jottings and Jurisprudence in Civil Law (Obligations and Contracts),
Central Book Supply, 2018 Edition
Cesar L. Villanueva, Law on Sales, 2009 Edition, Rex Printing Company, Inc.
Esteban B. Bautista, Treatise on Philippine Partnership Law, Rex Book Store, 1978
Hector S. De Leon, Comments and Cases on Partnership, Agency, and Trusts, Eighth
Edition, Rex Printing Company, Inc., 2010
Hector S. De Leon, Comments and Cases on Credit Transactions, Eighth Edition, Rex
Printing Company, Inc., 2010
References:
1. Melencio S. Sta. Maria, Obligations and Contracts, Texts and Cases, Rex Book
Store., 2003
2. Hector S. De Leon, Comments and Cases on Sales and Lease, Sixth Edition, Rex
Printing Company, Inc., 2005
3. D. P. Jurado, Comments & Jurisprudence on Obligations and Contracts, Rex
Bookstore, Twelfth Revised Edition 2009
Teaching Methods/Strategies
analyzing skills of the students. Lectures, group discussions and visual aids may be used
when applicable.
Grading Criteria:
AUSL DLSU, LPU, UMak SSC
MidTerm Exam 30% 20% 30%
Recitation & Quizzes 30% 30% 40%
Final Exam 40% 50% 30%