BATHAN BATCH 1 KINDS OF OBLIGATIONS BAGUIO JS Z
SUSPENSIVE AND RESOLUTORY CONDITIONS
a. Insular Life Assurance Co., Ltd. vs. Toyota Bel-Air, Inc., 550 SCRA 70 (2008
Jurisprudence teaches us that when a contract is subject to a suspensive condition, its
birth or effectivity can take place only if and when the event which constitutes the
condition happens or is ful lled, and if the suspensive condition does not take place, the
parties would stand as if the conditional obligations has never existed.
In this case between Insular v Toyota, the parties entered into a compromise agreement
to bring to a close a suit for unlawful detainer. However, the compromise agreement
reads that only upon the occurrence of all the conditions set shall the CA be effective.
Hence, suspensive conditions.
Toyota was unable to comply and thus Insular cannot be compelled to comply with its
obligation to end the present litigation. No right arose in favor of Toyota nor an obligation
on the part of Insular.
b. Coronel vs. CA, Alcaraz, GR No. 103577, Oct 7, 199
Heirs of Coronel executed a document entitled “Receipt of Downpayment” which had
the following conditions:
1. That Alcaraz should pay the downpayment of 50
2. Upon receipt thereof, the Coronels will transfer in the names the title of the subject
property from their father’
3. Upon said transfer, the Coronels will execute the deed of absolute sale
4. Alcaraz shall pay the remainder of the price.
Alcaraz paid the downpayment.
The Coronels were able to transfer the property in their names, however, they sold it to
a 3rd person, Manabag.
The Coronel’s argue that it is merely a Contract to Sell, wherein the owner reserves
the right to transfer said property thru a separate act only upon the ful llment of the
suspensive condition which is the payment of the purchase price, while Alcaraz argues
that it is a Conditional Contract of Sale, wherein ownership is automatically
transferred upon the ful llment of the condition set.
It was held, that the agreement could not have been a contract to sell because the
sellers made no express reservation of ownership. Further, the only thing that
prevented the execution of the deed of absolute sale was that the property was still in
the name of their father (the suspensive condition). Upon the happening of said
condition, the contract became obligatory.
fi
fi
fi
)
BATHAN BATCH 1 KINDS OF OBLIGATIONS BAGUIO JS Z
c. Central Philippine University vs. CA, GR No. 112127, July 17, 1995, 246 SCRA
511, 63 SCAD 7
When a person onerously donates land to another on the condition that the latter would
build upon the land a medical school, the condition imposed was not a condition precent
(suspensive condition) but a resolutory one.
The late Don Lopez donated to Central a parcel of land with the condition upon the land
shall be built Ramon Lopez Campus. However, despite the passing of 50 years Central
has failed to erect any school thereon.
In this case, it couldn’t have been a suspensive condition otherwise Central building on
Don Lopez’s land would be an invasion of his property rights. The donation had to be
valid in order that central may erect buildings thereon. If there was no ful llment or
compliance with the condition, the donation may now be revoked and all rights which
the donee may have acquired shall be deemed lost and extinguished.
d. Jacinto vs. Kaparaz, 209 SCRA 246 (1992
The parties in this case entered into an agreement to sell and convey a parcel of land
for a total of 1,800. 800 was paid as down while the remainder shall be paid in
installments to DBP.
The execution of the absolute deed of sale shall be done as “soon as the settlement
or partition of the estate of the deceased Narcisa Kaparaz shall be consummated
and effected”.
The agreement in this case has all the earmarks of a contract of sale. Possession was
immediately delivered as well the enjoyment of all the improvements therein. Further,
there was no reservation of ownership until full payment of the price.
Kaparaz was to execute the deed of sale as soon as the estate of the decedent
was settled. Thus, the payment was not a condition precedent to the execution of
the nal deed.
In a contract of sale, the non-payment of the price is a resolutory condition, the
remedy of the seller is to exact ful llment or to rescind the contract.
Be that as it may, the delay incurred by petitioners was but a casual or slight breach of
the agreement, which did not defeat the object of the parties in entering into the
agreement. A mere casual breach does not justify rescission
However, in the sale of immovable property, the vendee may still pay after the expiration
of the period to pay, so long as demand for rescission thru a judicial or notarial act has
not been made.
fi
fi
fi
BATHAN BATCH 1 KINDS OF OBLIGATIONS BAGUIO JS Z
e. Ducusin vs. CA, Baliola, 122 SCRA 280 (1983
Ducusin leased to Spouses Baliola a one-door apartment with the condition that the
term of the contract shall be in a month to month basis until it is terminated by the
lessor on the ground that his children need the premises of their own use.
Spouses Baliola rented the property for 2 years until Ducusin sent them a Notice to
Terminate Lease Contract stating that his children are getting married and thus need a
place for resident.
In upholding the validity of said stipulation, the Supreme Court af rmed the CA in its
decision based on Art. 1308 (the validity of a contract cannot be left to the will of one of
the parties) and 1182 (when the ful llment of a condition is dependent upon the debtor,
it is void. If it depends upon chance or will of a 3rd person, the obligation shall take
effect).
The resolutory condition is valid since the happening of the condition depends
upon the will of a third person (the lessor’s children)
POTESTATIVE, CASUAL & MIXED
a. Rustan Pulp vs. IAC, Iligan Diversi ed, GR No. 70789, Oct. 19, 1992, 214 SCRA
66
Rustan established a pulp and paper mill with respondent as a supplier of raw materials.
The agreement had a proviso which that the buyer shall have the right to stop delivery
of said raw materials when the supply shall become suf cient until such time when the
need arises again.
Due to major defects of the plants machinery, deliveries of raw materials piled up. The
supplier were informed to stop the deliveries. However, in reality Rustan continued to
accept deliveries from respondents and other suppliers.
Here, the Supreme Court struck down Rustan’s right of stoppage since it is solely upon
the will of petitioners. A purely potestative imposition must be obliterated from the
contract without affecting the rest as the condition pertains to the ful llment of an
already existing contract and not to its inception.
b. Osmena vs. Rama. 14 Phil 99 (1909), Sept. 9, 190
Rama obtained from Osmena loans of money, the payment of which should be in sugar.
However, Rama acknowledged her indebtedness and make the promise that IF her
house was sold, she will pay her indebtedness.
5
fi
fi
)
fi
fi
fi
BATHAN BATCH 1 KINDS OF OBLIGATIONS BAGUIO JS Z
A condition dependent upon one’s own exclusive will shall be void
c. Naga Telephone Co., Inc. vs. Court of Appeals, 230 SCRA 351 (1994
NATELCO and CASURECO entered into an agreement whereby the NATELCO shall
install free of charge telephone connections for the use of CASURECO in exchange that
NATELCO can use CASUERCO’s light posts for its telephone service.
Said contract provided, FIRST, that the term of the contract shall be as long as
NATELCO has need for electric light posts. SECOND it is provided, that the contract
shall terminate when for any reason, CASURECO is forced to stop, abandon its
operation as a public service and it becomes necessary to remove the electric
light posts.
A potestative condition is a condition, the ful llment of which depends upon the sole will
of the debtor, in which case, the conditional obligation is void. The rst part of the
contract is potestative.
However, the second part are casual conditions since they depend on chance, hazard
or the will of a third person. The contract is subject to mixed conditions, as they partly
depend on the will of the debtor and partly to hazard, chance or the will of 3rd persons.
CONSTRUCTIVE FULFILLMEN
a. Tayag vs. CA, (G.R. No. 96053. March 3, 1993
Galacia entered into an agremeent with Leyva wherein it was agreed that the former
shall cede ownership of a parcel of land upon the ful llment of the various conditions.
One of which is that Leyva shall assume Galacia’s indebtedness to Philippine Veterans
Bank in the amount of 10,000 pesos. However, despite payment of Leyva of about
6,000 pesos, Galacia’s sister paid the balance.
The Court held that constructive ful llment, wherein the obligor voluntarily prevents the
ful llment of the condition, is applied both ways when the obligation is reciprocal. This is
so since the parties in a reciprocal obligation are each others obligors and obligee.
b. Ong vs. Bognalbal, 501 SCRA 490 (2006
Bognalbal, the contractor, and Ong, the owner, entered into an “Owner-Contractor
Agreement” for the construction of the latter’s botique. It was agreed that the payment
shall be made by progress billing.
The issue occurred upon the 4th progress billing wherein Ong insisted that the tiles to
be used shall be Kenzo ooring and not vinyl. She refused to pay until the ooring has
fi
fl
T
fi
)
fi
fi
.
fi
fl
BATHAN BATCH 1 KINDS OF OBLIGATIONS BAGUIO JS Z
been changed. Consequently, Bognalbal abandoned the project and Ong was
constrained to get another contractor to nish Bognalbal’s work.
Assuming, that the cost of the kenzo ooring would be a novation as to Ong’s obligation
to pay the fourth billing, such new condition would, be deemed ful lled.
The civil code provides that if the obligor fails to do his prestation, the same shall be
executed at his cost. What has been poorly done can be undone.
However, in this case, Ong admitted that she voluntarily prevented the ful llment of the
condition which should have given rise to obligation to pay of the fourth billing when she
hired the services of another contractor. Bognalbal would no longer have the opportunity
to nish the Kenzo ooring if another contractor already nished the same. Hence, the
condition is deemed ful lled.
FULFILLMENT OF CONDITIO
a. Enriquez vs. Ramos, 73 SCRA 116 (1976
Ramos purchased from Enriquez 20 parcels of land for the amount of 235,000. 35,000
of which shall be paid as down and the balance of 200,000 shall be paid within 2 years,
on the 1st yr 6% interest shall accrue, 12% for the year after. Said land was to be made
by Ramos into a subdivision.
To secure the payment of the balance of 200,000, Ramos executed a mortgage in favor
of Enriquez over a parcel of land in Bulacan. Ramos had numerous obligations under
the mortgage: to advance 50k as contribution for the construction of roads as required
by ordinance, to register the mortgage, to pay real property taxes thereon.
In a previous case, wherein Enriquez instituted an action to foreclose the mortgage, the
Supreme Court held that the action was premature. The construction of roads for the
purpose of making a subdivision, is a condition precedent.
In the present case, the roads have already been completed on May 9, 1961.
First, there was adequate testimony by the contractor of the roads as to its completion.
Second, there is nothing in the ordinance which required that acceptance by the
Administrative Agency as a condition precedent before a street may be considered
constructed.
Third, the planting of trees and installation of water facilities is the obligation of the
subdivision owner.
fi
fl
fi
fl
fi
)
fi
fi
fi
BATHAN BATCH 1 KINDS OF OBLIGATIONS BAGUIO JS Z
Lastly, the ling of the case is suf cient notice of the completion of the roads.
The civil code provides that in a ful llment of a condition, shall retroact to the day of the
constitution of the obligation.
Here, the obligation to pay arose after the completion of the roads in May 9, 1961.
RESCISSION IN RECIPROCAL OBLIGATION
a. Tan vs. Court of Appeals, G.R. No. 80479, July 28, 1989, 175 SCRA65
b. Velarde vs. Court of Appeals, G.R. No. 108346, July 11, 200
c. Siy vs. Court of Appeals, G.R. No. L-39778, Sept. 13, 1985, 138 SCRA 53
d. University of the Philippines vs. De Los Angeles, G.R. No. L-28602, Sept. 29,
1970, 35 SCRA 10
e. Palay, Inc. vs. Clave, G.R. No. L-56076, Sept. 21, 1983, 124 SCRA 63
BOTH PARTIES IN BREACH OF RECIPROCAL OBLIGATIO
a. Camus vs. Price, Inc., G.R. Nos. L-17859-9, July 18, 196
OBLIGATION WITH A PERIO
1. Gaite vs. Fonacier, G.R. No. L-11827, July 31, 1961, 2 SCRA831
2. Fernandez vs. CA, G.R. No.80231, October 18, 1988, 166 SCRA 57
3. Abesamis vs. Woodcraft Works, Inc., G.R. No. L-18916, Nov. 28, 1969, 30 SCRA
37
fi
2
fi
fi
S
BATHAN BATCH 1 KINDS OF OBLIGATIONS BAGUIO JS Z
4. Gregorio Araneta, Inc. vs. Phil. Sugar Estates Development Co., Ltd, G.R. No.
L-22558, May 31, 1967, 20 SCRA 33
5. Radiowealth Finance Company vs. Del Rosario, G.R. No. 138739, July 6, 2000,
335 SCRA 28
6. Allen vs. Province of Albay, G.R. No. 11433, December 20, 1916, 35 Phil. 82
8
