Civil Law,  Legally Yours

Del Castillo Case Doctrines (Civil Law – Obligations and Contracts)

Del Castillo Case Doctrines

Summaries of case doctrines penned by Justice Del Castillo.

Civil Law Obligations and Contracts

Asian Construction Development Corporation v. Cathay Pacific Steel Corporation
G.R. No. 167942, June 29, 2010

Contracting parties may establish stipulations as they may deem convenient, provided they are not contrary to law, morals, good customs, or public policy. Contracts of adhesion are as binding as ordinary contracts.

Atty. Ferrer v. Spouses Diaz
G.R. No. 165300, April 23, 2010

According to Article 1347 of the Civil Code, no contract may be entered into upon a future inheritance except in cases provided by law.

For the contract to be considered one for a future inheritance, the following requisites must concur:

1) that the succession has not yet been opened;
2) that the object of the contract forms part of the inheritance; and
3) that the promisor has, with respect to the object, an expectancy of a right which is purely hereditary in nature.

Thus, a waiver of hereditary rights by a future heir in favor of another while the parents are still living is void.

Campos v. Pastrana
G.R. No. 175994, December 8, 2009

A contract of sale entered into by a debtor for the purpose of evading execution judgment is void. This sale is a simulation to defraud creditors and is therefore null.

Commissioner of Internal Revenue v. Kudos Metal Corporation
G.R. No. 178087, May 5, 2010

The doctrine of estoppel cannot give validity to an act that is prohibited by law or one that is against public policy. It should be resorted solely as a means of preventing injustice.

Continental Cement Corporation v. Asea Brown Boveri, Inc.
G.R. No. 171660, October 17, 2011

If a person obliged to do something fails to do it, the same shall be executed at his cost. Thus, a repairman who fails to perform his obligation is liable to pay for the cost of the execution of the obligation plus damages.

FAJ Construction & Development Corp. v. Saulog
G.R. No. 200759, March 25, 2015

The determination of a breach of contract is a factual matter within the province of the lower court. The principle of damnun absque injuria cannot apply when there is an abuse of a person’s right.

Heirs of Mario Pacres v. Heirs of Cecilia Ygona
G.R. No. 174719, May 5, 2010

Contracts take effect only between the parties, their assigns, and heirs (Article 1311 of the Civil Code). However, if a contract should contain some stipulation in favor of a third person (stipulations pour atrui), the latter may demand its fulfillment. In which case, the third party becomes a party to that contract, hence, acceptance by the beneficiary of the stipulation pour atrui is necessary.

Lao v. Special Plans, Inc.
G.R. No. 164791, June 29, 2010

Compensation takes place only if both debts are liquidated and demandable. A claim is liquidated when the amount and time of payment are fixed. If the debt is acknowledged by the debtor, although not in writing, the claim must be treated as liquidated. Unliquidated claims cannot be the subject of compensation.

Lim v. Development Bank of the Philippines
G.R. No. 177050, July 1, 2013

The principle of constructive fulfillment of suspensive condition under Article 1186 of the Civil Code is not applicable to debt instruments issued by a bank as a security for a loan.

For the principle of constructive fulfillment of suspensive condition to apply, the following must concur:

1) the condition is suspensive;
2) the obligor actually prevents the fulfillment of the condition; and
3) the obligor acts voluntarily.

Manlar Rice Mill, Inc v. Deyto
G.R. No. 191189, January 29, 2014

Contracts bind only the parties who had entered into it and cannot favor or prejudice a third person.

Marquez v. Espejo
G.R. No. 168387, August 25, 2010

In case of doubt as to the intention of the parties, contemporaneous and subsequent actions of the contracting parties shall be considered.

Owen Prosper A. Mackay v. Spouses Caswell
G.R. No. 183872, November 17, 2014

Under Article 1715 of the Civil Code, if the work of a contractor has defects which destroy or lessen its value or fitness for its ordinary or stipulated use, he may be required to remove the defect or execute another work. The demand required of the employer under the subject provision need not be in a particular form.

Philippine National Bank v. Lilibeth Chan
G.R. No. 206037, March 13, 2017

The deposit of rentals in a non-savings account is not the consignation contemplated under the law.

For consignation to be valid, the debtor must comply with the following requirements under the law:

1) there was a debt due;
2) valid prior tender of payment, unless the consignation was made because of some legal cause provided under Article 1256;
3) previous notice of the consignation has been given to the persons interested in the performance of the obligation;
4) the amount or thing due was placed at the disposal of the court; and
5) after the consignation has been made, the persons interested were notified thereof.

Philippine Science High School-Cagayan Valley v. PIRRA Construction Enterprises
G.R. No. 204423, September 14, 2016

Under Article 1234 of the Civil Code, if the obligation had been substantially performed in good faith, the obligor may recover as if it had strictly and completely fulfilled its obligation, less the damages suffered by the obligee.

Spouses Cacayorin v. Armed Forces of the Philippines
G.R. No. 171298, April 15, 2013

Consignation is necessarily judicial. Article 1258 of the New Civil Code provides that consignation shall be made by depositing the thing or things due at the disposal of judicial authority. Elsewhere, what may be made is a valid tender of payment but not consignation.

Spouses Nameal and Bonrostro v. Spouses Luna
G.R. No. 172346, July 24, 2013

Tender of payment without consignation does not suspend the accrual of interest on the principal obligation.

Spouses Tumibay v. Spouses Lopez
G.R. No. 171692, June 3, 2013

The transfer of the title of land by the buyer to another before full payment of the purchase price is a substantial breach in a contract to sell which entitles the seller to rescind the same.

Sun Life of Canada (Philippines), Inc. v. Sandra Tan Kit
G.R. No. 183272, October 15, 2014

Compensatory interest is due only if the obligor is proven to have failed to comply with his obligation.

Swift Foods, Inc. v. Spouses Mateo
G.R. No. 170486, September 12, 2011

Unless a contracting party cannot read or does not understand the language in which the agreement was written, he is presumed to know the import of his contract and is bound thereby.

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