OBLICON - Pure and Conditional Oblis - Doctrines & Provisions

Article 1179 to Article 1192

Under what circumstances is the remedy of rescission generally allowed for a breach of contract?

The general rule is that rescission will not be permitted for a slight or casual breach of the contract, but only for such breaches as are so substantial and fundamental as to defeat the object of the parties in making the agreement. (Song Fo and Co v. Hawaiian-Phil Co)

According to the Song Fo and Co v. Hawaiian-Phil Co, what kind of contractual breach is typically not considered sufficient grounds for rescission?

A delay in payment for a small quantity of molasses for some twenty days is not such a violation of an essential condition of the contract was warrants rescission for non-performance.

What is the defining characteristic of a condition precedent in relation to the acquisition of a right?

The characteristic of a condition precedent is that the acquisition of the right is not effected while said condition is not complied with or is not deemed complied with. When a condition is imposed, the compliance of which cannot be effected except when the right is deemed acquired, such condition cannot be a condition precedent. (Parks v. Province of Tarlac)

According to Article 1191, what is the comprehensive effect of rescission on a contract beyond simply ending future obligations?

Rescission does not merely terminate the contract and release the parties from further obligations to each other, but abrogates the contract from its inception and restores the parties to their original positions as if no contract has been made. — ART. 1191

According to Nissan Car Lease Philippines v. Lica Management, Inc., is the remedy of rescission available to a party when the other party defaults on their contractual obligations, regardless of whether the contract explicitly mentions it?

Whether a contract provides for it or not, the remedy of rescission is always available as a remedy against a defaulting party.

If a party chooses to rescind a contract without first obtaining a court order, what potential legal consequence might they face?

When done without prior judicial imprimatur, however, it may still be subject to a possible court review. (In relation to Art. 1191) (Nissan Car Lease Philippines v. Lica Management)

Does the rescission of a contract automatically eliminate the obligation of a defaulting party to pay previously agreed-upon liquidated damages?

Rescission does not negate the obligation to pay liquidated damages; parties may still claim damages even after rescission (PEZA v. Philino Sales Corporation, 2016)

Question 1

According to the doctrine, when does the extraordinary diligence required of common carriers in shipping goods end?

Question 2

What is the legal consequence if a common carrier fails to deliver the shipped goods to the consignee or the specifically authorized person?

Question 3

How are ambiguities in contracts of carriage, which are considered contracts of adhesion, interpreted by the courts?

The duty of common carriers to observe extraordinary diligence in shipping goods does not terminate until delivery to the consignee or to the specific person authorized to receive the shipped goods. Failure to deliver to the person authorized to receive the goods is tantamount to loss of the goods, thereby engendering the common carrier's liability for loss. Ambiguities in contracts of carriage, which are contracts of adhesion, must be interpreted against the common carrier that prepared these contracts

(Federal Express Corp v. Antonio, 2018)

Question 1
What is the key distinguishing factor between a contract of sale and a dacion en pago, and what element in the provided scenario indicated that the transaction was a contract of sale rather than a dacion en pago?

Question 2
According to Article 1191 of the Civil Code, what is the remedy available for breach of reciprocal obligations, and in the context of a contract of sale, what specific action were the petitioners entitled to due to the buyer's non-payment?

Contract of Sale vs. Dacion en Pago: A dacion en pago requires the alienation of property to satisfy an existing debt. Here, the subsequent Promissory Note and Acknowledgement of Debt negated the intent of a dacion en pago, confirming the transaction as a contract of sale.

Rescission of Reciprocal Obligations: Under Article 1191 of the Civil Code, reciprocal obligations may be rescinded if one party fails to comply. Norma’s non-payment of the purchase price justified the resolution of the sale, entitling petitioners to reconveyance of the lot. (Nuñez v. Moises-Palma, G.R. No. 244466, March 27, 2019)

Question 1
In a reciprocal obligation, what is the relationship between the performance of each party's duty?

Question 2
According to the doctrine, when does delay (mora) not occur for either party in a reciprocal obligation?

Question 3
What is identified as the most significant characteristic of a reciprocal obligation?

In a reciprocal obligation, the performance of one is conditioned on the simultaneous fulfillment of the other obligation. Neither party incurs in delay if the other does not comply or is not ready to comply in a manner with what is incumbent upon him. A reciprocal obligation has been defined as that "where each of the parties is a
promissee of a prestation and promises another in return as a counterpart of equivalent of the other. x x x The most salient feature of this obligation is reciprocity.

Chua v. Manas, GR 198867, Oct. 16, 2019

Question 1

According to the general rule, what level of contractual breach is required to warrant the remedy of rescission?

Question 2

In obligations involving an act or forbearance (to do or not to do), who is responsible for determining the retroactive effect of a fulfilled condition?

The general rule is that rescission will not be permitted for a slight or casual breach of the contract, but only for such breaches as are so substantial and fundamental as to defeat the object of the parties in making the agreement.

In obligations to do and not to do, the courts shall determine, in each case, the retroactive effect of the condition that has been complied with.

Camarines Sur Teachers v. Province of Camarines Sur, GR 199666, Oct. 7, 2019

Question 1
What is the legal consequence when a suspensive condition attached to an obligation is not fulfilled?

Question 2
In the context of a contract of sale, what role does the full payment of the purchase price often play, as illustrated by the provided text?

When the suspensive condition is not fulfilled—no juridical ties can arise. In this case, the full payment of the purchase price partakes of a suspensive condition. (Jovil v. Mendoza, GR 250321, Feb. 3, 2021)

Question 1
What is the typical legal consequence of rescinding a contract under Article 1191 of the Civil Code regarding the benefits received by each party?

Question 2
What is a recognized exception to the general rule of mutual restitution upon rescission under Article 1191?

As a general rule, the rescission of a contract under Article 1191 of the Civil Code will result in the mutual restitution of the benefits which the parties received, except, among others, when there is an express stipulation to the contrary by way of a forfeiture or penalty clause. (Heirs of Kim v. Quicho, GR 249247, Mar. 15, 2021)

Question 1
What is the fundamental difference in how the law treats a contract that has been rescinded versus one that has been terminated, particularly concerning its validity and the parties' original positions?

Question 2
How does the continuation of obligations and the inclusion of consequences differ between the rescission and termination of a contract?

Distinction between Termination and Rescission. When a contract is rescinded, it is treated as if it never existed, and both parties are returned to their original state before the agreement was made. However, when it is terminated, it is still considered valid from the beginning. Until it is officially ended, both parties must follow its terms. The consequences of termination can be planned and included in the contract. As long as the terms of the contract are not contrary to law, morals, good customs, public order, or public policy, they shall be respected by the courts. (Furukawa v. Clark Premire, GR 239044, Mar. 1, 2023)

Question 1
According to Article 1197, under what two primary scenarios will courts have the authority to fix the period for the fulfillment of an obligation?

Question 2
When a court fixes the period for an obligation under Article 1197, what standard should the court use to determine that period, and can the court later modify the fixed period?

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. The courts shall also fix the duration of the
period when it depends upon the will of the debtor.
In every case, the courts shall determine such period as may under the circumstances have been probably
contemplated by the parties. Once fixed by the courts, the period cannot be changed by them.

Question 1
According to Article 1193, when does an obligation with a fixed "day certain" for fulfillment become legally demandable?

Question 2
What is the status of the debtor's obligation to perform before the specifically set date arrives in an obligation with a fixed period?

ARTICLE 1193. Obligations for whose fulfillment a day certain has been fixed, shall be demandable only
when that day comes. If a specific date is set for the fulfillment of an obligation, the obligation cannot be
enforced or demanded before that date arrives. Until the specified day comes, the debtor is not required to
perform or fulfill the obligation. (Solante v. COA G.R. No. 207348, August 19, 2014)

Question 1
Under what specific circumstance is a donation legally classified as "onerous"?

A donation is onerous when it is "subject to burdens, charges, or future services equal (or more) in value than that of the thing donated. (Province of Camarines Sur v. Bodega Glassware, G.R. No. 194199, Mar. 22, 2017)

Question 1
What is the legal consequence if the recipient of a conditional donation fails to comply with the imposed conditions or obligations?

Question 2
According to the doctrine, is partial fulfillment of a condition in a donation generally considered sufficient to prevent the donor from revoking the gift?

A donation can be made with conditions or obligations, and if the recipient fails to fulfill those conditions, the donor (or their heirs) has the right to revoke the donation. This case illustrates that even after a donation is made and the title is transferred, failure to meet a key condition—such as constructing a public facility like a hospital—allows the donor to cancel the gift. The decision emphasizes that the purpose of conditional donations is to ensure the donor's wishes are carried out, and that starting or partially completing the required task is not enough to fulfill the condition.

Clemente v. Republic, G.R. No. 220008, February 20, 2019

Question 1
In an alternative obligation, how is the specific prestation that the debtor must perform determined?

Question 2
Once a debtor in an alternative obligation makes their selection, can they change their mind, and what steps are required to make the choice legally binding?

In an alternative obligation, the debtor chooses one option to fulfill the obligation, and the creditor cannot demand a mix of both. Once the debtor clearly makes a choice, their right to choose ends, and they must notify the creditor. The choice takes legal effect when the creditor accepts it or when a court confirms it if disputed

Arco Pulp v. Lim, G.R. No. 206806, Jun. 25, 2014

Question 1
In a joint obligation with multiple debtors, what is the effect of a partial payment or acknowledgment of the debt made by only one of the debtors on the prescription period for the other debtors?

A partial payment or acknowledgment by one joint debtor does not interrupt the statute of limitations for the other joint debtors.

Agoncillo v. Javier, G.R. No. L-12611, Aug. 7, 1918

Question 1
What is the general rule regarding the establishment of solidary obligations?

Question 2
Under what specific circumstances will a liability be considered solidary?

The well-entrenched rule is that solidary obligations cannot be inferred lightly. They must be positively and clearly expressed. A liability is solidary "only when the obligation expressly states, when the law so provides or when the nature of the obligation so requires.

Berot v. Siapno G.R. No. 188944, July 9, 2014

Question 1
What are the key characteristics of a solidary obligation in terms of the liability of debtors and the rights of creditors?

Question 2
Under what specific circumstances does solidary liability arise?

Solidary obligation is one in which each of the debtors is liable for the entire obligation, and each of the creditors is entitled to demand the satisfaction of the whole obligation from any or all of the debtors. There is solidary liability when the obligation expressly so states, when the law so provides, or when the nature of the obligation so requires.

Bognot v. RRi Lending, G.R. No. 180144, Sept. 24, 2014

Question 1
What is the fundamental distinction between possession and ownership of property?

Question 2
Even if someone is in possession of a property, who ultimately retains the legal rights to that property?

Possession does not equate to ownership, and the rightful owner retains rights over the property despite another party's possession. Napocor v. Boheco, GR 231679, Apr. 28, 2021

Question 1
According to Article 1207, does the mere presence of multiple creditors or debtors in a single obligation automatically create solidary liability?

Question 2
Under what specific circumstances, as outlined in Article 1207, does solidary liability exist among multiple creditors or debtors?

The concurrence of two or more creditors or of two or more debtors in one and the same obligation does not imply that each one of the former has a right to demand, or that each of the latter is bound to render, entire compliance with the prestation. There is a solidary liability only when the obligation expressly so states, or when the law or the nature of the obligation requires solidarity. - Article 1207. (LWUA v. R.D. Policarpio, GR 210970, Jul. 22, 2024)

Question 1
Under what two primary circumstances can an obligation be considered indivisible, even if the object or service involved is physically divisible?

Even though the object or service may be physically divisible, an obligation is indivisible if so provided by law or intended by the parties. Lam v. Kodak Philippines, G.R. No. 167615, January 11, 2016

Question 1
Does the indivisibility of a contract primarily refer to the nature of the object of the contract or the nature of the obligation itself?

Question 2
If one party challenges the validity of an indivisible contract, what is the potential impact on other parties or estates involved in that contract?

Indivisibility of contracts pertains to the obligation rather than the object, and the challenge to a contract’s validity by an affected party can bind all associated estates. Nazareno v. Court of Appeals, 397 Phil. 707 (2000)

Question 1
According to Article 1226 of the Civil Code, what is the general function of a penal clause in an obligation?

Question 2
What are the three specific exceptions outlined in Article 1226 where the penal clause does not substitute the indemnity for damages and interest?

Under Article 1226 of the Civil Code, a penal clause substitutes the indemnity for damages and interest unless:
(1) when the contrary is stipulated; (2) when the debtor refuses to pay the penalty imposed in the obligation, in which case the creditor is entitled to interest on the amount of the penalty, in accordance with Article 2209; or (3) when the obligor is guilty of fraud in the fulfillment of the obligation (Cabarroguis v. Vicente, G.R. No. L-14304, Mar. 23, 1960)

Question 1
According to Article 1170 of the Civil Code, what are the specific grounds that can make a party liable for damages due to the non-performance of their contractual obligations?

Under Article 1170 of the Civil Code, a party who fails to perform their contractual obligation due to delay, fraud, or negligence is liable for damages. (Robes v. CFI and Millan, G.R. No. L-41093, Oct. 30, 1978)

Question 1
What is the primary purpose of a penalty clause in an obligation?

Question 2
If a breach of obligation occurs and a penalty clause exists, what is the obligor bound to do, and is the creditor required to provide proof of actual damages?

A penalty clause is an accessory undertaking to assume greater liability on the part of an obligor n case of breach of an obligation. The obligor would then be bound to pay the stipulated amount of indemnity without the necessity of proof of the existence and on the measure of damages caused by the breach. (Ruiz v. Court of Appeals, G. R. No. 146942, Apr. 22, 2003)

Question 1
While penal clauses can impose penalties for non-fulfillment of a contract, do these penalties typically apply to obligations arising after the contract has been terminated?

Question 2
What is the fundamental purpose of a penal clause as an accessory obligation attached to a principal obligation?

Penal clauses may impose penalties for non-fulfillment, these do not extend to future obligations once a contract is terminated. A penal clause is "an accessory obligation that the parties attach to a principal obligation with the intention of ensuring its performance by imposing a special prestation on the debtor in the event that the obligation is not fulfilled or is fulfilled irregularly or inadequately. (Pryce Corp. v. PAGCOR, G.R. 157480, May 6, 2005)

Question 1
Even if interest rates and penalty charges are mutually agreed upon in a contract, under what specific circumstances can a court intervene to modify these rates or charges?

Interest rates and penalty charges, even when agreed upon by the parties, may be subject to judicial modification if proven to be exorbitant, iniquitous, or unconscionable. (Louh v. BPI, G.R. No. 225562, March 8, 2017)