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PRESCRIPTION Laches
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OBLICON PERSONAL SYLLABUS
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OBLICON PERSONAL SYLLABUS
Personal Right: From the time the obligation to deliver it 1. Compel to perform (Art. 1165);
arises until before delivery. 2. Rescission (Art. 1380);
3. Resolution (Art. 1190);
Real Right: From the time of delivery onwards. 4. Damages (Art. 1170);
5. Obligation may be complied at the expense of the debtor
(Reason: Tradition, in consequence of certain contracts, (substituted performance) (Art. 1165).
transfers ownership.)
(II) PERSONAL OBLIGATIONS (Art. 1167-1168)
“Delivery, in consequence of certain contracts, transfers ownership.”
i. If a person obliged to do something fails to do it, the same shall be
Cruzado vs. Bustos executed at his cost.
Plaintiff already bought property from the defendant, and
despite payment, the defendant did not deliver the land. ii. The same rule shall be observed if he does it in contravention of
No delivery = No transfer of ownership. the tenor of the obligation.
Remedy is NOT accion reinvindicatoria (recovery of
ownership). iii. It may be decreed that what has been poorly done be undone.
Remedy is Complaint for Specific Performance.
Gaite vs. The Plaza, Inc. (2011)
“Kinds of Delivery” Here, because the constructions made by Gaite
was not in accordance with the agreed plan, the
1. Real or actual tradition. same shall be executed at his cost.
2. Constructive tradition. All cost of the construction in relation to the work
i. Tradition symbolica which was not in accordance with the plan should
ii. Tradition instrumental be borne by Gaite.
iii. Tradition longa manu SC also ordered the return of the downpayment
iv. Tradition brevi manu because the law says that the same shall be
v. Tradition constitutum possessorium executed at your cost.
vi. Tradition by operation of law
iv. When the obligation consists in not doing, and the obligor does
vii. Quasi-tradition
what has been forbidden him, it shall also be undone at his
expense.
Norkis Distributors, Inc. vs CA (1991)
The issuance of sales invoice does not prove transfer of
ownership of the thing sold to the buyer. Fajardo vs. Freedom to Build, Inc. (2000)
In all forms of delivery, it is necessary that the act of delivery The petitioners extended the roof of their house
whether constructive or actual, be coupled with the intention and expanded the second floor, despite
of delivering the thing. The act, without the intention, is prohibition in the contract to sell.
insufficient. SC held that even if it is not mentioned in the
contract, it is mentioned in Article 1168 that
“when the obligation consists in not doing, and the
Equatorial Realty Development vs. Mayfair (2001)
obligor does what has been forbidden him, it shall
The execution of a contract of sale as a form of constructive
be undone at his expense.
delivery is a legal fiction.
Demolition is a way of undoing what was done.
It holds true only when there is NO IMPEDIMENT that may
prevent the passing of the property from the hands of the
vendor into those of the vendee. When the obligation shall be performed. (CF Article 1169)
When there is such impediment, “FICTION YIELDS TO REALITY
– the delivery has not been effected.” Upon demand (judicial or extrajudicial) (oral or written)
General Rule: There is no delay when there is no demand.
Rules applicable in obligation to give an indeterminate or generic thing.
When demand shall be made.
1. There is no obligation to observe due diligence;
2. There is no obligation to deliver fruits; Demand shall be made on the day fixed in the contract. (Art.
3. There is no obligation to delivery specific accessions and 1193)
accessories. If the contract does not fix a period but a period was intended,
remedy is to ask the court to fix a period. (Art. 1197)
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OBLICON PERSONAL SYLLABUS
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OBLICON PERSONAL SYLLABUS
6. Liquidated. ii. Even if rescission was filed first, if there is valid basis for
extension of performance of the obligation, court will
“Resolution” / Rescission under Article 1190. not decree rescission but will instead fix period for
fulfillment.
1. Applies to reciprocal obligations. Both parties are debtor and
creditor of each other. 6. Rescission can only be filed by the injured party.
2. Reciprocity must arise from identify of the cause. Obligations Almira vs. Court of Appeals (2003)
created at the same time. The power to rescind is only given to the injured
party.
3. Not applicable to contract to sell. The injured party is the party who has faithfully
fulfilled his obligation or is ready and willing to
Reyes vs. Tuparan (2011) perform his obligation.
Article 1191 does not apply in contract to sell In this case, petitioners were not ready, willing,
because there is yet no reciprocal obligation and and able to comply with their obligation to deliver
yet no breach. a separate title in the name of Garcia to
Respondent’s failure to pay in full the purchase respondent.
price is not the breach of contract contemplated
under Article 1191 of the NCC, but rather just an Distinction between Article 1191 and Article 1380.
event that prevents the petitioner from being
bound to convey title to the respondent. Congregation vs. Orola (2008)
The remedy of resolution, under Article 1191, applies only to
4. Right to cancel or resolve is based on breach of faith, not reciprocal obligations such that a party’s breach of obligation
economic injury. partakes of a tacit resolutory condition which entitles the
injured party to rescission.
Limitations on the Implied Power to Rescind under Article 1191. Rescission under Article 1381 is a subsidiary action, and is not
based on a party’s breach of obligation.
The rescission on account of breach of stipulations is not
1. Due Process if there is already performance by the other party.
predicated on injury to economic interests of the party
plaintiff but on the breach of faith by the defendant, that
University of the Philippines vs. Delos Angeles violates the reciprocity between the parties.
Parties can stipulate that there can be rescission
even without going to court.
Remedies of CREDITOR:
There is nothing in the law that prohibits the
parties from entering into agreement that
1. Accion Subrogatoria
violation of the terms of the contract would cause
cancellation thereof, even without court
intervention. 2. Accion Pauliana
2. The right to rescind is subordinated to the rights of third persons 3. Action Directa
who acquired thing in good faith. i. Subsidiary liability of sublessee to lessor
ii. Vendor may bring his action against every possessor whose
3. Court may order fixing of period instead of rescission. right is derived from the vendee
iii. Laborers engaged by the contractor have an action against
XPN: If fixing the period would serve no other purpose but to the owner up to the amount owing from the owner to the
delay. contractor.
iv. In agency, the principal may bring an action against the
4. Casual or slight breaches will not justify rescission. substitute.
GENERAL RULE: Specific Performance is alternative to Rescission. Philippine Realty vs. Ley Construction:
The following were considered as fortuitous events: shortage
EXCEPTIONS: of supplies and cements, typhoons, power failures and
interruptions of water supply.
i. Even if specific performance was filed first, if Since Ley Construction could not possible continue
performance is no longer possible, you can file constructing the building under the circumstances prevailing,
rescission. it cannot be held liable for any delay that resulted from the
causes aforementioned.
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OBLICON PERSONAL SYLLABUS
Yobido vs. CA
Tire blowout was not caso fortuito.
The cause of the blowout, if due to a factory defect, improper
mounting, excessive tire pressure, that would not be
considered as a fortuitous event because it would not be an
unavoidable event.
Jimmy Co vs. CA
Private respondent is engaged in the sale,
distribution and repair of motor vehicles.
Carnapping per se cannot be considered as a
fortuitous event.
Nonetheless, pursuant to Articles 1174 and 1262,
liability attaches even if the loss was due to a
fortuitous event if – the nature of the obligation
requires the assumption of risk.
Carnapping is a normal business risk for those
engaged in the repair of motor vehicles.
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3. Insolvency of joint debtor: others are not liable for his share. Exception: Stipulation to the contrary (e.g. penalty + damages + interest)
Marsman Drysdale vs. Gotesco (2010) DM Ragasa Enterprises vs. BDO (2018)
Marsman and Gotesco entered into JVA: Marsman to A penal clause is an accessory obligation which the parties
contribute property with value at 420M, whereas Gotesco attach to a principal obligation for the purpose of ensuring the
shall contribute cash at 420M. performance thereof by imposing on the debtor a special
The Court finds that both are jointly liable. prestation which is generally consisting on the payment of the
Under the law, when there is concurrence of two or more sum of money in case the obligation is not fulfilled, or is
debtors in one and the same obligation, in the absence of any irregularly or inadequately fulfilled.
agreement as to solidarity, the obligation is joint. A penal clause has THREE-FOLD PURPOSE. (C-L-P)
When purpose is for REPARATION or COMPENSATION, there is
Sps. Ibanez vs. Harper (2017) no need to prove the amount of damages because when the
In this case, given that solidarity could not be inferred from parties agreed on that amount, they already made
the agreement, the presumption under the law applies – the computations of the probable amount of damages that they
obligation is joint. could suffer.
When purpose is for PUNISHMENT, there is need to prove
Solidary Obligations amount because the question on damages is not yet resolved,
inasmuch as the right of damages besides the penalty still
subsists (e.g. penalty + damages).
Words Used.
A penal clause may be classified according to: (S-D-P)
1. Source | Legal or Conventional
“Solidarily” 2. Demandability | Complementary or Subsidiary
“In solidum” 3. Purpose | Cumulative or Reparatory
“Jointly and Severally”
Factual Discussion:
Concepts to Remember. Item 8(n): “To pay a penalty of 3% of the monthly rental, for
every month of delay of payment of the monthly rental.”
1. Anyone of the solidary creditors may collect or demand payment Item 10: “In the event that a Court Litigation has been
of whole obligation. resorted to by the LESSOR or LESSEE, due to non-compliance of
2. Any of the solidary debtors may be required to pay the whole any of the foregoing provisions, the aggrieved party shall be
obligation; there is mutual agency among solidary debtors. paid by the other party, no less than fifteen thousand
(P15,000) pesos, Philippine Currency, for Attorney's fees, and
3. Each solidary creditor may do whatever may be useful to the
other damages that the honorable court may allow.”
others, but not anything prejudicial to them; however, any
Reading these two items together, it’s saying that aside from
novation, compensation, confusion or remission of debt executed
the penalty, the aggrieved party can also recover damages.
by any solidary creditor shall extinguish the obligation without Therefore, pursuant to Article 1226, the aggrieved party can
prejudice to his liability for the shares of the other solidary be awarded damages in addition to the penalty, which is the
creditors. forfeiture of the deposit.
The bank cannot insist on paying only the penalty, because the
Defenses Available to Solidary Debtor. provisions provided the payment of “penalty + damages.”
However, since Items 8(n) and 10 are considered as
Defenses derived from the nature of the obligation punishment, the injured party is nonetheless required to
o Prescription prove the “other damages” that it actually suffered. (When
o Payment purpose of the penal clause is for PUNISHMENT, there is need
o Statute of Frauds to prove amount.)
Indivisible Obligations
General Rule: Penalty shall substitute indemnity for damages and payment of
interests in case of noncompliance.
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Payment by Cession
Loss of the Thing Due
(CF Article 1255)
Article 1267. Difficulty in Performance in Personal Obligation.
Cession is form of payment. The properties will be sold and the proceeds will
be apportion among all his creditors. Osmena vs. SSS (2007)
Rebus Sic Stantibus
Sps. Villaluz vs. Land Bank (2017)
When Milflores executed the Deed of Assignment, it was not Condonation or Remission of Debt
Dation in payment, it was not cession. It was merely an
additional security for the loan. Ways of Effecting Condonation:
It was not payment by cession under Article 1255 for the plain
and simple reason that there was only one creditor (Land 1. Express Condonation
Bank). 2. Implied Condonation
Article 1255 contemplates the existence of two or more
creditors and involves the assignment of all of the debtor’s Reyna vs. COA (2011)
property.
“Write-off” is not one of the legal grounds for extinguishing an
obligation under the Civil Code.
Application of Payment
Compensation
(CF Article 1252)
Requisites of Legal Compensation
One Debtor
One Creditor (CF Article 1279)
Several debts due to that one creditor
EGV Realty vs. Cristina Condominium (1999)
Limitations: Debt vs. Claim
1. He cannot choose to apply the payment to debts which are not Novation
yet due.
2. He cannot compel the creditor to accept partial payment. Kinds of Novation
3. When the debt produces interest, the payment must be applied
first to the interest, before the principal. 1. Objective / Real
2. Subjective / Personal
(CF Article 1253) i. Passive (expromision / delegaction)
ii. Active (subrogation)
Marquez vs. Elisan Credit Corporation (CF Article 1301, 1302, 1303)
The rule under Article 1253 that payments shall first be
applied to the interest and not to the principal shall govern if Requisites of Extinctive Novation:
two facts exist:
1. The debt produces interest (e.g. the payment of interest 1. Existence of previous valid obligation;
is expressly stipulated); 2. Agreement of all parties to the new contract;
2. The principal remains unpaid.
3. Extinguishment of old obligation or contract;
Only when there is waiver of interest would Article 1176
4. Validity of new one.
become relevant.
Procedure:
1. Tender of Payment
2. Formal complaint for consignation, not merely to deposit the
amount with the Clerk of Court
3. Debtor must show jurisdictional facts.
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