Obligations Cases and Doctrines Flashcards
Can the Court can order the payment of an obligation notwithstanding its prescription because the debtor signed a document (undertaking) promosing the payment plus interest?
Yes. The case of Villaroel v Estrada, the present action is not based on the original debt contracted by petitioner’s mother-which has already prescribed-but on petitioner’s undertaking to assume original obligation.
Can the court order the giving of Christmas bonus?
Ansay v DBP A bonus is an act of liberality and the court takes it that it is not within its judicial powers to command respondents to be liberal;
ART 1423 Civil obligations are a right of action to compel their performance ‘natural obligations, not being bases on positive law but on equity and natural law, do not grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by reason thereof.
NATURAL OBLIGATIONS cannot be cognizable by the court BEFORE VOLUNTARY FULFILLMENT by the obligor. RETENTION CAN BE ORDERED AFTER VOLUNTARY PERFORMANCE and the court CANNOT ORDER PERFORMANCE.
Whether or not a debt has already prescribed when a debtor enters into a second promissory note?
No, DBP v Confessor, Prescription was renounced when Confessor signed the second promissory note.
The right to prescription may be waived or renounced. Prescription is deemed to have been tacitly
renounced when the renunciation results from acts which imply the abandonment of the right acquired.
The Court ruled that when a debt is already barred by prescription, it cannot be enforced by the
creditor. But a new contract recognizing and assuming the prescribed debt would be valid and
enforceable.
Whether or not NACOCO has the obligation to pay rentals to plaintiff (owner) even if the property is under the legal control and administration of Allien Property Administration?
No, Orden v Nacoco, If defendant-appellant is liable at all, its obligations, must arise from any
of the four sources of obligations, namely, 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.
Whether or Not a bank (Metrobank) in this case can issue a Hold-Out Order causing the breach of contract?
BANK DEPOSITS, which are in the nature of a SIMPLE LOAD or mutuum, must be PAID UPON DEMAND.
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. 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 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.
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1. WON Saludaga may claim damages from FEU for breach of student-school contract for a safe learning
environment
2. Whether FEU’s liability is based on quasi-delict or on contract
3. From what source of obligation did the other claims arose?
1) Yes. Saludaga was enrolled as a sophomore law student in FEU. As such, there was created a
contractual obligation between the two parties. On Saludaga’s part, he was obliged to comply with the rules and regulations of the school. On the other hand, FEU, as a learning institution is mandated to impart knowledge and equip its students with the necessary skills to pursue higher education or a profession. At the same time, it is obliged to ensure and take adequate steps to maintain peace and order within the campus.
2) FEU’s liability is based on contract, not quasi-delict. culpa contractual, the mere proof of the existence of the contract and the failure of its compliance
justify, prima facie, a corresponding right of relief.
3) Quasi-delict – vicarious liability between Galaxy Agency and security guard Rosete.
Quasi-delict – but SC held that there is no vicarious liability between FEU and Rosete
Quasi-delict – damage to FEU due to the negligence of Galaxy Agency in supplying FEU with an unqualified guard (Imperial, the president of Galaxy is solidarily liable with the agency).
De Jesus should not be held solidarily liable with respondent FEU respondents cannot be held liable for damages under Art. 2180 of the Civil Code because
respondents are not the employers of Rosete. The latter was employed by Galaxy or these acts of negligence and for having supplied respondent FEU with an unqualified security guard, which resulted to the latter’s breach of obligation to petitioner, it is proper to hold Galaxy liable to respondent FEU
for such damages equivalent to the above-mentioned amounts awarded to petitioner.
Whether or Not A party under contract is, in law, liable to its customer for the damages caused the customer’s car, which had been entrusted into its custody.
Yes, The party is therefore justified in law in making good such damages and relying in turn on defendant to honor its contract and indemnify it for such undisputed damages, which had been caused directly by the unlawful and wrongful acts of defendant’s security guard in breach of their contract.
As ordained in Article 1159, Civil Code, “obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.”
The limited liability is only applicable is loss or damage was through the negligence of Commondo’s guards, not when the guards deliberately disregarded his duty to safeguard People’s property by taking a customer’s car out on a joyride.
Whether or not a presumed quasi-contract be emerged as against one part when the subject matter thereof is already covered by a contract with another party.
No, Article 2124 creates the legal fiction of a quasi-contract precisely because of the absence of any
actual agreement between the parties concerned. Corollarily, if the one who claims having enriched
somebody has done so pursuant to a contract with a third party, his cause of action should be against the
latter, who in turn may, if there is any ground therefor, seek relief against the party benefited.
(CRUZ vs TUASON & CO.)
When will the counting of the prescription on action to enforce constructive trust from registration of property start?
Adille v CA, Discovery of the fraud.
Principle of solutio indebiti?
Art. 2154. If something received when there is no right to demand it, and it was unduly delivered through
mistake, the obligation to return it arises.
ANDRES VS MANTRUST, 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.
whether or not the government has the obligation to return the tax paid by the plaintiff under the
principle of solutio indebiti?
Yes, Puyat & Sons v Manila, “It is too well settled in this state to need the citation of authority that if money be paid through a clear
mistake of law or fact, essentially affecting the rights of the parties, and which in law or conscience was
not payable, and should not be retained by the party receiving it, it may be recovered. Both law and
sound morality so dictate. Especially should this be the rule as to illegal taxation. The taxpayer has no
voice in the imposition of the burden. He has the right to presume that the taxing power has been lawfully
exercised. He should not be required to know more than those in authority over him, nor should he suffer
loss by complying with what he bona fide believe to be his duty as a good citizen.
Principle of Quasi-Delict?
CANGCO vs. MRR
As a general rule . . . it is logical that in case of extra-contractual culpa, a suing creditor should
assume the burden of proof of its existence, as the only fact upon which his action is based; while
on the contrary, in a case of negligence which presupposes the existence of a contractual obligation,
if the creditor shows that it exists and that it has been broken, it is not necessary for him to prove
negligence
Who is Liable for civil obligations arising from a Minor’s Negligence?
NARCISO GUTIERREZ vs BONIFACIO GUTIERREZ, et al.
, it is uniformly held that the head of a house,
the owner of an automobile, who maintains it for the general use of his family is liable for its negligent
operation by one of his children, whom he designates or permits to run it, where the car is occupied and
being used at the time of the injury for the pleasure of other members of the owner’s family than the child
driving it.
What is a Pure Obligation?
Art. 1179. Every obligation whose performance does not depend upon a future or uncertain event, or upon
a past event unknown to the parties, is demandable at once.
Whether a creditor is barred by prescription in his attempted to collect on a promissory note
executed more than 15 years earlier.
PAY VS PALANCA As noted by NCC 1179, any obligation that does not depend on a future or uncertain event, or
upon a past event unknown to the parties is demandable at once.
As the obligation was due and demandable, the filing of the suit after 15 years was much too late. The Civil
Code additionally states that the prescriptive period of a written contract is 10 years.
Conditional Obligations?
Smith bell v Matti The Court conclude that the term
which the parties attempted to fix is so uncertain that one cannot tell just whether, as a matter of fact, those
articles could be brought to Manila or not. If that is the case, the obligations must be regarded as
conditional. obligations for the performance of which a day certain has been fixed shall be demandable only when the day arrives. a day certain is understood to be one which must necessarily arrive, even though
its date be unknown. if the uncertainty should consist in the arrival on non-arrival of the day, the obligation
is conditional and shall be governed by the rules of the next preceding section.
The Stipulation states that “subject to the rules and regulations, as well as to railroad embargoes” What kind of Obligation?
Smith Bell v Matti, Then the delivery was
subject to a condition the fulfillment of which depended not only upon the effort of the herein plaintiff, but upon the will of third person s who could in no way be compelled to fulfill the condition.
In cases like this, which are not expressly provided for, but impliedly covered by the Civil Code, the obligor will be deemed to have sufficiently performed his part of the obligation, if he has done all that was in his power, even the condition has not been fulfilled in reality. In such cases, the decision prior to the Civil Code have held that the obligee having done all that was in his power, was entitled to enforce performance of the obligation.
Manner of Contravention Obligations with a Period
Article 1167 - If a person obliged to do something fails to do it, the same shall be executed at his cost.
Article 1170 – Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages.
Article 1197 - If the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a period was intended, the courts may fix the duration thereof.
When is Conditional Obligations deemed void?
Encarnacion v Baldomar, article 1256 of the Civil Code, since the continuance and fulfillment of the
contract would then depend solely and exclusively upon their free and uncontrolled choice between
continuing paying the rentals or not, completely depriving the owner of all say in the matter.
Remedy if a contract is dependent upon the will of a debtor?
Dario v Manila Lawn Thus, in this contract of lease, the lessee is the creditor with respect to the rights enumerated in article 1554, and is the debtor with respect to the obligations imposed by articles 1555 and 1561. The term within which performance of the latter obligation is due is what has been left to the will of the debtor. This term it is which must be fixed by the courts.
Art 1197
Article 1197 of the New Civil Code, which provides that the courts may fix the duration of the obligation if it does not fix a period, does not apply.
Article 1197 of the Civil Code involves a two-step process of the court fixing period?
The Court must first determine that “the obligation does not fix a period” (or that the period is made to depend upon the will of the debtor),” but from the nature and the circumstances it can be inferred that a period was intended” (Art. 1197,
pars. 1 and 2). This preliminary point settled,
The Court must then proceed to the second step, and decide what period was “probably contemplated by the parties” . So that, ultimately, the Court cannot fix a period merely because in its opinion it is or should be reasonable, but must set the time that the parties are shown to have intended.
WON the court can fix a period of a contract of lease that renewal depends upon the agreements of the parties?
The lease contract (paragraph 13) can only mean that the lessor and lessee may agree to renew the contract
upon their reaching agreement on the terms and conditions. Failure to reach agreement will of course
prevent the contract from being renewed at all. In the instant case, the lessor and the lessee conspicuously
failed to reach agreement both on the amount of the rental to be payable during the renewal term, therefore
there was no renewal.
When can the court provide the period?
Millare v Hernando, Most importantly, Article 1197 applies only where a contract of lease clearly exists. Here, the contract was not renewed at all, there was in fact no contract at all the period of which could have been fixed.
Alternative Obligation?
Arco Pulp v Lim, In an alternative obligation, there is more than one object, and the fulfillment of one is sufficient, determined by the choice of the debtor who generally has the right of election. The right of election is extinguished when the party who may exercise that option categorically and unequivocally makes his or
her choice known.
The choice of the debtor must also be communicated to the creditor who must receive notice of it
since: The object of this notice is to give the creditor opportunity to express his consent, or impugn the
election made by the debtor, and only after said notice shall the election take legal effect when consented
by the creditor, or impugned by the latter, when declared proper by a competent court.
Liability of two or more persons due to a Quasi-Delict?
Malayan Insurance v CA, Solidary, In solidary obligation, the creditor may enforce the entire obligation against one of the solidary debtors.
On the other hand, insurance is defined as “a contract whereby one undertakes for a consideration to
indemnify another against loss, damage, or liability arising from an unknown or contingent event.”
It thus appears that respondents Sio Choy and San Leon Rice Mill, Inc. are the principal tortfeasors who are
primarily liable to respondent Vallejos. The law states that the responsibility of two or more persons who
are liable for a quasi-delict is solidarily.
Whether or not in an action for collection of a sum of money based on contract against all the solidary
debtors, the death of one defendant deprives the court of jurisdiction to proceed with the case against the surviving defendants?
PNB v Independent Planters,
Article 1216 grants the creditor the substantive right to seek satisfaction of his credit from one, some or all of his solidary debtors, as he deems fit or convenient for the protection of his interests; and if, after instituting a collection suit based on contract against some or all of them and, during its pendency, one of the defendants dies, the court retains jurisdiction to continue the proceedings and decide the casein respect of the surviving defendants.
’ The choice is undoubtedly left to the solidary, creditor to determine against whom he will enforce collection. In case of the death of one of the solidary debtors, he (the creditor) may, if he so chooses, proceed against the surviving solidary debtors without necessity of filing a claim in the estate of the deceased debtors. It is not mandatory for him to have the case dismissed against the surviving debtors and file its claim in the estate of the deceased solidary debtor .
Can the employer cannot be held solidarily liable with his employee on an action based on delict?
Calang v People, We, however, hold that the RTC and the CA both erred in holding Philtranco jointly and severally liable with Calang. We emphasize that Calang was charged criminally before the RTC. Undisputedly, Philtranco was not a direct party in this case. Since the cause of action against Calang was based on delict, both theRTC and the CA erred in holding Philtranco jointly and severally liable with Calang, based on quasi-delict.
Articles 21761 and 21802 of the Civil Code. Articles 2176 and 2180 of the Civil Code pertain to the
vicarious liability of an employer for quasi-delicts that an employee has committed. Such provision of law
does not apply to civil liability arising from delict. If at all, Philtranco’s liability may only be subsidiary
under Article 102 of the Revised Penal Code.
Joint Tortfeasors define? liablity in a commision of a tort?
[j]oint tortfeasors are those who command, instigate, promote, encourage, advise, countenance,
cooperate in, aid or abet the commission of a tort, or approve of it after it is done, if done for their benefit.
They are also referred to as those who act together in committing wrong or whose acts, if independent of
each other, unite in causing a single injury. Under Article 219429 of the Civil Code, joint tortfeasors are
solidarily liable for the resulting damage. In other words, joint tortfeasors are each liable as principals, to
the same extent and in the same manner as if they had performed the wrongful act themselves.”
: Whether the 25% penalty upon the debt in addition to the 12% interest per annum makes the
contract usurious? ( Obligations with a penal clause)
No. Article 1152 of the Civil Code permits the agreement upon a penalty apart from the interest.
Should there be such an agreement, the penalty, as was held in the case of Lopez vs. Hernaez.
does not include the interest, and which may be demanded separately.
According to this, the penalty is not to be added to the interest for the determination of whether the interest exceeds the rate fixed by the law, since said rate was fixed only for the interest.
What is a Penal Clause?
A penal clause is an accessory undertaking to assume greater liability in case of breach. From this
alone, the 4% provision does not come to be penal in character, hence, Robes Corporation’s contention
that the penalty shall substitute the indemnity for damages and the payment of interest in case of noncompliance does not hold water.
Robes-Francisco v Realty
Is the 4% interest provision of the contract a penal clause?
No. Said clause does not convey any penalty, for even without it, pursuant to Article 2209 of the
Civil Code, the vendee would be entitled to recover the amount paid by her with legal rate of interest
which is even more than the 4% provided for in the clause.
Whether or not compensatory damages may be awarded for breach of a contract of sale in addition to
liquidated damages/stipulated penalty in the said contract.?
Yes, compensatory damages may be awarded for breach of a contract of sale in addition to liquidated
damages/stipulated penalty in the said contract. Paragraph 1 of Article 1226 of the New Civil Code states that:
“In obligations with a penal clause, the penalty shall substitute the indemnity for damages
and the payment of interests in case of noncompliance, if there is no stipulation to the contrary.
Nevertheless, damages shall be paid if the obligor refuses to pay the penalty or is guilty of fraud
in the fulfillment of the obligatio
Rule on indemnity of damages?
Thus, as a general rule, the penalty takes the place of the indemnity for damages and the payment
of interest.
However there are exceptions to this rule under the Civil Code, and one of them is; when
the obligor is guilty of fraud in the fulfillment of the obligation, indemnity for damages may be
awarded in addition to and apart from the penalty stipulated.
Pamintuan v CA
Whether defendant can be held liable for damages incurred by the plaintiff despite the latter’s
contributory negligence.
Culpa contractual. It is important to note that the foundation of the legal liability of the
defendant is the contract of carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if at all, from the breach of that contract by reason of the failure of defendant to exercise due care in its performance. That is to say, its liability is direct and immediate, differing essentially, in legal viewpoint from that presumptive responsibility for the negligence of its servants, can be rebutted by proof of the exercise of due care in their selection and
supervision.
Cangco v MNL Railroad
Meralco v Ramoy
In Ridjo Tape, the Court explained that being a public utility vested with vital public interest, MERALCO is impressed with certain obligations towards its customers and any omission on its part to perform such duties would be prejudicial to its interest.
For in the final analysis, the bottom line is that those who do not exercise such prudence in
the discharge of their duties shall be made to bear the consequences of such oversight.
Under the Service Contract, [a] customer of electric service must show his right or proper interest over the property in order that he will be provided with and assured a continuous electric service. Clearly, respondents’ cause of action against MERALCO is anchored on culpa contractual or breach of contract for the latter’s discontinuance of its service
to respondents under Article 1170 of the Civil Code.
In Radio Communications of the Philippines, Inc. v. Verchez, Court expounded on the nature of culpa contractual that the mere proof of the existence of the contract and the failure of its compliance justify, prima facie, a corresponding right of relief. The remedy serves to preserve the interests of the promissee that may include his expectation interest, or his reliance interest, or his restitution interest.
Are Stevedoring companies required only to exercise ordinary diligence?
as a stevedore, was only charged with the loading and stowing of the cargoes from the pier to the ship’s cargo hold; it was never the custodian of the shipment of Del
Monte Produce. A stevedore is not a common carrier for it does not transport goods or passengers; it is not
akin to a warehouseman for it does not store goods for profit.
Can a local government be held liable for negligence?
City of Manila v. Teotico (22 SCRA 269-272 [1968]) where the Supreme Court squarely ruled that Republic Act No. 409 establishes a general rule regulating the liability of the City of Manila for “damages or injury to persons or property arising from the failure of city officers” to enforce the provisions of said Act, “or any other law or ordinance or from negligence” of the City “Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions.”
Upon the other hand,
Article 2189 of the Civil Code of the Philippines which provides that:
Provinces, cities and municipalities shall be liable for damages for the death of, or injuries
suffered by any person by reason of defective conditions of roads, streets, bridges, public
buildings and other public works under their control or supervision.
Whether or not the defendants could escape liability from the building due to a fortuitous event
which is unforeseeable and inevitable even if their negligence is established?
To exempt the
obligor from its liability these requisites should first concur:
(a) the cause of the breach of the obligation must be independent of the will of the debtor;
(b) the event must be either unforeseeable or unavoidable;
(c) the event must be such as to render it impossible for the debtor to fulfill his obligation in a normal
manner; and
(d) the debtor must be free from any participation in, or aggravation of the injury to the creditor.
ewan abt surety
Sureties do not insure the solvency of the debtor, but rather the debt itself. They are contracted precisely
to mitigate risks of non-performance on the part of the obligor. This responsibility necessarily places a
surety on the same level as that of the principal debtor. The effect is that the creditor is given the right to directly proceed against either principal debtor or surety. This is the reason why excussion cannot be
invoked. To require the creditor to proceed to arbitration would render the very essence of suretyship
nugatory and diminish its value in commerce.
Rule in reciprocal obligations?
In reciprocal obligations, as in a contract of sale, the general rule is that the fulfillment of the parties’
respective obligations should be simultaneous. Hence, no demand is generally necessary because, once a
party fulfills his obligation and the other party does not fulfill his, the latter automatically incurs in delay.
But when DIFFERENT DATES for performance of the obligations are fixed, the default for each obligation must be determined by the rules given in the first paragraph of Art. 1169, that is, the other party would incur in delay only from the moment the other party demands fulfillment of the former’s obligation. Thus, even in reciprocal obligations, if the period for the fulfillment of the obligation is fixed, demand upon the obligee is still necessary before the obligor can be considered in default and before a cause of action for rescission will accrue.
Whether or not GSIS should be held liable for its failure to perform its obligation to deliver a
habitable house
The completion of the unfinished house so that it may be put into habitable condition, as one form of relief
to the plaintiff Agcaoili, no longer appears to be a feasible option in view of the not inconsiderable time that has already elapsed. That would require an adjustment of the price of the subject of the sale to conform to present prices of construction materials and labor. It is more in keeping with the realities of the situation, and with equitable norms, to simply require payment for the land on which the house stands, and for the house itself, in its unfinished state, as of the time of the contract
Fortuitous event requisites?
To constitute a fortuitous event, the following elements must concur:
(a) the cause of the unforeseen and unexpected occurrence or of the failure of the debtor to comply with
obligations must be independent of human will;
(b) it must be impossible to foresee the event that constitutes the caso fortuito or, if it can be foreseen, it
must be impossible to avoid;
(c) the occurrence must be such as to render it impossible for the debtor to fulfill obligations in a normal
manner; and,
(d) the obligor must be free from any participation in the aggravation of the injury or loss.
Negligence?
We expounded in Cruz v. Gangan that negligence is the omission to do something which a reasonable man,
guided by those considerations which ordinarily regulate the conduct of human affairs, would do; or the
doing of something which a prudent and reasonable man would not do. It is want of care required by the
circumstances.
Whether or not the typhoon is a fortuitous event which releases liability?
The principle embodied in the act of God doctrine strictly requires that the act must be one occasioned
exclusively by the violence of nature and human agencies are to be excluded from creating or entering into
the cause of the mischief. When the effect, the cause of which is to be considered, is found to be in part the
result of the participation of man, whether it be from active intervention or neglect, or failure to act, the
whole occurrence is thereby humanized, as it was, and removed from the rules applicable to the acts of
God.
Whether or not the Asian financial crisis constitute a fortuitous event which would justify delay by
petitioners in the performance of their contractual obligation.
No, Fil-Estate v Spouses Ronquillo, No. The Supreme Court held that the Asian financial crisis is not a fortuitous event that would excuse petitioners from performing their contractual obligation. The Court ruled that “we cannot generalize that the Asian financial crisis in 1997 was unforeseeable and beyond the control of a business corporation. It is unfortunate that petitioner apparently met with considerable difficulty e.g. increase cost of materials and labor, even before the scheduled commencement of its real estate project as early as 1995.
Can a rescission disregard the same contract before any judicial pronouncement to that effect?
UP v De Los Angeles
“There is nothing in the law that prohibits the parties from entering into agreement that violation of the
terms of the contract would cause cancellation thereof, even without court intervention. In other words, it is not always necessary for the injured party to resort to court for rescission of the contract.”
In reciprocal obligations, who has the power to rescind?
Boysaw v Interphil Promotions, “The power to rescind is given to the injured party. “Where the plaintiff is the party who did not perform the undertaking which he was bound by the terms of the agreement to perform 4 he is not entitled to insist upon the performance of the contract by the defendant, or recover damages by reason of his own breach “
