Republic of the Philippines

UNIVERSITY OF NORTHERN PHILIPPINES

COLLEGE OF LAW
Vigan City, Ilocos Sur 

LAW 118
OBLIGATIONS AND CONTRACTS

PRELIMS EXAMS

INSTRUCTIONS: Answer the questions as required. A mere “YES” or “NO”

answer without any explanation will not merit any credit. Each number has
a credit of TWENTY (20) points. There are FIVE (5) major questions in this
examination. You are reminded that cheating, in any form, is a serious
offense and may merit an expulsion from the University.

I.
How is a civil obligation distinguished from a natural obligation? Give an
example of a natural obligation?

A civil obligation is a legal tie which gives the party with whom it
is contracted has the right to enforce its performance by law, while a
natural obligation is unenforceable by action, binding only to the party
who makes it and is based on standards of morality and natural laws.
An example of a natural obligation is a person’s fulfillment of his
obligation to other persons with utmost gratitude and compassion, such as
by being a good Samaritan during times of hardships when help and support
are extremely needed.

Give the facts, issue and ruling in the cases of: 

RADIOWEALTH FINANCE COMPANY vs. DEL ROSARIO 

[G.R. No. 138739. 335 SCRA 288 July 6, 2000.]
Facts:
A promissory note was executed by a person in favor of Radiowealth
Finance Company saying that he will pay his debt through an installment
basis payment scheme including a penalty for late payment to be shouldered
by him. However, the debtor failed to fulfill the obligation herein
stipulated in the promissory note, despite repeated demands, prompting the
creditor to file a complaint for the collection of money from the debtor.
However, it was dismissed by the court due to insufficient evidence
against the debtor. The debtor argued that because of the lack of a
specific date in the said promissory note, for the fulfillment of the
obligation, it is not yet due and demandable.
Issue: Whether or not the said obligation is due and demandable.
Ruling:
Yes, it is due and demandable because the promissory note indicating
the payment scheme, which is in installment basis, of fulfilling the
obligation should be sufficient to reflect the intention of the debtor. In
this case, the mere act of not putting a specific date on the promissory
note does not mean that the debtors are allowed to pay their debts anytime
they would like to. Since it is due and demandable, the creditors have the
right to demand the unfulfilled obligation because it was already past its
due date.

II.

What are the different types of mora? Explain.

The different types of mora (delay) are as follows:

1. Mora solvendi is a delay in the debtor’s performance of his
obligation, thus, making him liable for damages incurred during the
delay.
2. Mora accipiendi is a delay in the creditor’s performance of his
obligation, thus, making him liable for damages incurred during the
delay.
3. Compensatio morae is a delay for both parties (creditor and debtor)
in the performance of their obligation which is reciprocal in nature.

What are the legal consequences of mora? Give the details.

The legal consequences of mora are as follows:

a. If the determinate thing is said to be due on an agreed upon date and
if there is delay in the fulfillment of the said obligation due to a
fortuitous event, the debtor is not exempted from the fulfillment of
the said obligation and consequently liable for damages; and
b. If the determinate thing is not yet due on the agreed upon date and
if there is a delay in the fulfillment of the said obligation due to
a fortuitous event, the debtor is exempted from the fulfillment of
the said obligation.

Give the facts, issue and ruling in the case of: 

AGUILAR, Sr. v. COMMERCIAL SAVINGS BANK

[G.R. No. 128705; 36 SCRA 395; 29 June 2001]
Facts:
 A car that is registered under Commercial Savings Bank hit a person
walking in the street, and he was killed. The petitioner, who is the legal
heir of the deceased, filed a complaint for damages against the driver,
who is the assistant vice president of the bank. The trial court ruled
that an employee’s negligence is presumed that of the employer, thus
liability is direct and primary. However, the Court of Appeals reversed
the trial court’s decision and argued that an employer’s liability shall
only arise if the employee who had committed a negligent act was doing his
function or job responsibility entrusted to him by the former at the time
of the incident.
Issue: Is the employer (bank), being the owner of the vehicle, liable for
damages from the negligence of its employee?
Ruling:

Yes, the employer (bank) is liable for damages by the mere fact that
it is the registered owner of the said vehicle, regardless of employer-
employee relationship. Regardless of the fact that the driver had the
accident during the performance of his job or not, the owner of the
vehicle is legally liable for damages incurred in third persons for
injuries, or in this case, the death of the person, sustained in the
operation of the vehicle.

III.
When is demand necessary for one to be in delay?

A demand is necessary for one to be in delay if the obligation is due

and demandable, if the debtor fails to perform an obligation on the date
agreed upon, a demand was made by the creditor upon the debtor to fulfill
the obligation, and lastly, there is a failure of the debtor to fulfill
the said obligation.

When is demand no longer necessary? State and discuss briefly the

circumstances.
Demand is no longer necessary when there is no delay in the
fulfillment of the obligation.

Give the facts, issue and ruling in the case of: 

HEIRS OF THE LATE TEODORO GUARING, JR. v. CA

[G.R. No. 108395; 269 SCRA 283; 07 March 1997]

Facts:
A vehicular incident involving a bus and a private car happened and
killed the driver of the said private car. The petitioners filed for civil
action for damages based on quasi-delict and argued that there is
negligence on the driver’s part. However, the appellate court decided to
acquit the driver based on reasonable doubt, rendering the civil action
untenable. But the petitioners contended that civil liability should not
bar the prosecution for damages based on quasi-delicts, hence this
petition.

Issue: Whether or not the judgement held in the criminal case, which is
acquittal based on reasonable doubt, extinguished the civil liability of
the accused.

Ruling:
No, the acquittal based on reasonable doubt does not bar the
prosecution for damages, especially if it is based on quasi-delicts.
Quasi-delicts are valid sources of civil obligation, and only a
preponderance of evidence is needed to be established in the determination
of civil liability, thus acquittal based on reasonable doubt does
extinguish the civil liability of the accused.
IV.
Explain the concepts and sources of obligation.
Under Article 1156 of the Civil Code, an obligation is a juridical
necessity to give, to do, or not to do. An obligation consists of the
active subject (obligee/creditor), a passive subject (obligor/debtor), an
object or prestation that is licit in nature, and a juridical/legal tie
(vinculum juris) which will be the basis for the performance of the
obligation.
The sources of obligations are as follows:
1. Laws: When these laws set an obligation, whether expressly or
impliedly, it should be fulfilled as it is obligatory in nature. For
example, under Article 68 of the Family Code, a husband and wife must
fulfill their obligation to observe mutual love, respect, and
fidelity and render mutual help and support to each other.
2. Contracts: They are considered as sources of obligation because in a
contract, there is a meeting of minds between the parties. The
contract is not necessarily in written form, not unless it is
required such as in a public instrument. For it to be qualified as a
source of obligation, the contract should not be contrary to laws,
morals, customs, and public policy.
3. Quasi-contracts: These are sources of obligation because they demand
for the remedy against unjust enrichment between the parties. For
example, in negotiorum gestio, the gestor may demand for the
reimbursement of the expenses incurred in the management of an
abandoned property as this is the responsibility of the owner. In
solution indebiti, unjust enrichment is prevented by giving back the
thing that is mistakenly delivered or reimburse the expenses to the
rightful owner.
4. Delicts or crimes: These are sources of obligations because under
Article 100 of the Revised Penal Code, a person that is criminally
 liable is also civilly liable. For example, if the accused of a crime
is acquitted based on reasonable doubt, the civil liability is
extinguished. If there is failure to produce evidence regarding the
criminal act, there is still civil liability. Lastly, if the
acquittal of the accused is based on preponderance of evidence, civil
liability is not extinguished, and the offended party may claim for
damages.
5. Quasi-delicts: These are sources of obligation when an act or wrong
was done due to lack of skill (diligence) or lack of foresight
(reckless imprudence) resulting to a civil liability that gives birth
to an obligation and claim for damages by the offended party.

What are the essential requisites of an obligation?

The essential requisites of an obligation are as follows:
1. The obligation must not be illegal, it should be licit.
2. The obligation must be capable of performance by a party.
3. The object of the obligation must be possible.
4. The obligation pertains to a determinate (specific) thing.
5. The obligation must be of pecuniary or monetary value.

Give the facts, issue and ruling in the case of: 

CASUPARAN v. LAROYA
[GR. No. 145391; 388 SCRA 28; 26 August 2002]
Facts:
A vehicular incident happened between two vehicles which has prompted
the filing of a criminal case against Casuparan for reckless imprudence
resulting to damage in properties and a civil case from quasi-delict. The
civil case was instituted while the criminal case is being investigated.
Due to the pendency of the criminal prosecution, the civil action was
dismissed by the lower court on the ground of forum shopping. The
petitioners contended that a separate civil action can be instituted while
the criminal action is pending, hence this petition.

Issue: Is it possible to institute a separate civil action while the

criminal action is still pending?

Ruling:
Yes, it is possible to institute a separate civil action while the
criminal action is still pending, especially in quasi-delicts. Under the
Rules of Court, an independent civil action is not deemed instituted with
the criminal action but may be filed separately by the offended party even
without reservation.
 V.

What is the diligence of a good father of a family?

The diligence of a good father of a family is classified as an

ordinary diligence which is a degree of diligence required to prevent
negligence.

Explain the distinction between negligence and imprudence.

Negligence is the lack of skill while imprudence is the lack of
foresight. While both of them are unintentional, it is still a source of
obligation and the offended party has the right to claim for damages.

What are the legal consequences as to the liability for civil damages in
acquittals?
The following are the legal consequences as to the liability for
civil damages in acquittals:
a. If the acquittal was based on reasonable doubt, the civil liability
is extinguished;
b. If the acquittal was based on the failure to produce evidence, civil
liability is not extinguished; and
c. If the liability was based on preponderance of evidence, civil
liability is not extinguished and the offended party may claim for
damages.

Give the facts, issue and ruling in the case of: 

LAFORTEZA v. MACHUCA
[G.R. No. 137552; 333 SCRA 643; 16 June 2000]

Facts:
A Special Power of Attorney was executed in favor of the seller for
the sale of a house and lot, and consequently, a contract of sale was
materialized specifying an agreed upon payment scheme between the buyer
and the seller. However, there was a breach in the contract as evidenced
by the buyer’s unpaid balance, and when the buyer wished to fulfill the
unpaid balance, the seller would not want to accept it and regarded that
the property is no longer for sale. It is due to the failure of the buyer
to fulfill the contractual obligation on time.

Issue: Whether or not the failure of the buyer to pay the balance on time
constitutes to the cancellation of the contract.
Ruling:
 No, it is not a reasonable action to cancel the contract of sale
because the contract was already perfected. There is already a partial
performance of obligation or payment by the buyer, thus, the contract is
already valid and binding. Also, the buyer tried to settle his obligations
with the seller but the latter has refused it, so the buyer will not be
liable for any civil obligation based on negligence.
-Nothing Follows-