Whoever by act or omission causes damage to another, there being fault or

negligence, is obliged to pay for the damage done. Such fault or negligence, if there
is no pre-existing contractual relation between the parties, is called a quasi-delict and
is governed by the provisions of this chapter.

Article 2179. When the plaintiff's own negligence was the immediate and proximate cause of
his injury, he cannot recover damages. But if his negligence was only contributory, the
immediate and proximate cause of the injury being the defendant's lack of due care, the
plaintiff may recover damages, but the courts shall mitigate the damages to be awarded. (n)

Civil and Criminal Liability: Villegas v. CA, GR no. 82562, Apr 11, 1967 (271 SCRA 148)
1. 1. REMEDIAL LAW; CRIMINAL PROCEDURE; THE DEATH OF AN ACCUSED DURING
THE PENDENCY OF HIS APPEAL EXTINGUISHES NOT ONLY HIS CRIMINAL BUT ALSO
HIS CIVIL LIABILITY UNLESS THE LATTER CAN BE PREDICATED ON A SOURCE OF
OBLIGATION OTHER THAN THE ACT OR OMISSION COMPLAINED OF. — The source of
Villegas' civil liability in the present case is the felonious act of libel he allegedly committed. Yet,
this act could also be deemed a quasi-delict within the purview of Article 33 in relation to Article
1157 of the Civil Code. If the Court ruled in Bayotas that the death of an accused during the
pendency of his appeal extinguishes not only his criminal but also his civil liability unless the latter
can be predicated on a source of obligation other than the act or omission complained of, with, more
reason should it apply to the case at bar where the accused died shortly after the prosecution had
rested its case and before he was able to submit his memorandum, and all this before any decision
could even be reached by the trial court.
2. 2. ID.; ID.; ID.; IN CASES WHERE THE CIVIL LIABILITY SURVIVES AN ACTION FOR
RECOVERY THEREFOR MAY BE PURSUED BUT ONLY BY WAY OF A SEPARATE CIVIL
ACTION; CASE AT BAR. — The Bayotas ruling, however, makes the enforcement of a deceased
accused's civil liability dependent on two factors, namely, that it be pursued by filing a separate civil
action and that it be made subject to Section 1, Rule 111 of the 1985 Rules on Criminal Procedure,
as amended. Obviously, in the case at bar, the civil action was deemed instituted with the criminal.
There was no waiver of the civil action and no reservation of the right to institute the same, nor was
it instituted prior to the criminal action. What then is the recourse of the private offended party in a
criminal case such as this which must be dismissed in accordance with the Bayotas doctrine, where
the civil action was impliedly instituted with it? The answer is likewise provided in Bayotas, thus:
"'Assuming that for lack of express reservation, Belamala's civil action for damages was to be
considered instituted together with the criminal action still, since both proceedings were terminated
without final adjudication, the civil action of the offended party under Article 33 may yet be
enforced separately."' Hence, logically, the court a quo should have dismissed both actions against
Villegas which dismissal will not, however, bar Raquiza as the private offended party from
pursuing his claim for damages against the executor or administrator of the former's estate,
notwithstanding the fact that he did not reserve the right to institute a separate civil action
based on Article 33 of the Civil Code.
3. (Villegas v. Court of Appeals, G.R. Nos. 82562 & 82592, (11 April 1997), 337 Phil 597-605)

This case pertains to the libel suit initiated by Assemblyman Antonio V. Raquiza against Manila Mayor Antonio J. Villegas
following various allegations made by Villegas against Raquiza that purportedly constituted violations of the Anti-Graft and
Corrupt Practices Act in 1968. Despite thorough investigation, Raquiza was cleared by the Senate Committee on Public
Works due to unreliable testimonies and lack of substantial evidence. Following Villegas’ defeat in the 1971 elections and
subsequent migration to the USA, where he remained until his death in 1984, the trial continued in his absence.

After Villegas’ death, the Manila Regional Trial Court moved to dismiss the criminal aspect of the case but resolved to deal
with the civil aspect separately, later ruling in favor of Raquiza and mandating Villegas’ estate to pay significant damages.
Villegas’ heirs contested this ruling, leading to the case’s elevation to the Court of Appeals which slightly reduced the

1
awarded damages and subsequently to the Supreme Court for further review.

Virtual law firm consultations

### Issues:
1. Can a trial court render judgment on a civil case following the accused’s death and before the filing of a memorandum on
his behalf?
2. Is it valid to render judgment against the deceased accused’s heirs and estate without formal substitution of parties?
3. Assuming the accused was liable for libel, were the damages awarded by the trial court just and reasonable?

### Court’s Decision:

The Supreme Court focused on the implications of Antonio J. Villegas’ death before the final judgment. It referenced the
case of People v. Bayotas, affirming that the death of an accused extinguishes both his criminal liability and the civil liability
that exclusively arises from the offense. However, the civil liability could be pursued through a separate civil action if rooted
in obligations other than the criminal act.

The Court concluded that both the criminal and civil actions against Villegas should have been dismissed per Bayotas’
doctrine. This dismissal doesn’t preclude Raquiza from seeking damages through an independent civil action against
Villegas’ estate or legal representatives, providing a way forward despite procedural missteps in lower court rulings.

Virtual law firm consultations

### Doctrine:
The pivotal doctrine established revolves around the survival of civil liability after an accused’s death. Stemming from the
case People v. Bayotas, it confirms that death extinguishes both criminal liability and civil liability based exclusively on the
criminal offense. However, a separate civil action based on other sources of obligation can survive the accused’s death, but it
must be pursued independently.

### Class Notes:

– The death of a defendant before final judgment leads to the extinguishment of both the criminal aspect and the civil aspect
based solely on the criminal act (People v. Bayotas).
– A separate civil action for damages can still be pursued against the executor, administrator, or heirs of the deceased’s estate
if it is predicated on sources of obligations other than the offense itself, such as quasi-delict (Article 33, Civil Code in
relation with Article 1157, Civil Code).
– Proper procedural steps, including the substitution of parties in the case of the party’s death, are crucial for the continuation
or initiation of civil proceedings posthumously (Sec. 17, Rule 3; Sec. 1, Rule 87, Rules of Court).

DILIGENCE REQUIRED
Art 1173, CC

Article 1173. The fault or negligence of the obligor consists in the omission of that diligence which is required by
the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place.
When negligence shows bad faith, the provisions of articles 1171 and 2201, paragraph 2, shall apply.

2
If the law or contract does not state the diligence which is to be observed in the performance, that which is expected
of a good father of a family shall be required. (1104a)

Article 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future
fraud is void. (1102a)

Article 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is liable
shall be those that are the natural and probable consequences of the breach of the obligation, and which the parties
have foreseen or could have reasonably foreseen at the time the obligation was constituted.

In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages which may be
reasonably attributed to the non-performance of the obligation. (1107a)

Arts 2000 to 2001; 1733; 1680, CC [extraordinary diligence]

Article 2000. The responsibility referred to in the two preceding articles shall include the loss of, or injury to the
personal property of the guests caused by the servants or employees of the keepers of hotels or inns as well as
strangers; but not that which may proceed from any force majeure. The fact that travellers are constrained to rely on
the vigilance of the keeper of the hotels or inns shall be considered in determining the degree of care required of
him. (1784a)

Article 2001. The act of a thief or robber, who has entered the hotel is not deemed force majeure, unless it is done
with the use of arms or through an irresistible force. (n)

Article 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1745,
Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in articles 1755
and 1756.

Article 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the
same is due to any of the following causes only:

(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;

(2) Act of the public enemy in war, whether international or civil;

(3) Act or omission of the shipper or owner of the goods;

(4) The character of the goods or defects in the packing or in the containers;

(5) Order or act of competent public authority.

Article 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article, if the goods
are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently,
unless they prove that they observed extraordinary diligence as required in article 1733.

3
Article 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to
public policy:

(1) That the goods are transported at the risk of the owner or shipper;

(2) That the common carrier will not be liable for any loss, destruction, or deterioration of the goods;

(3) That the common carrier need not observe any diligence in the custody of the goods;

(4) That the common carrier shall exercise a degree of diligence less than that of a good father of a family,
or of a man of ordinary prudence in the vigilance over the movables transported;

(5) That the common carrier shall not be responsible for the acts or omission of his or its employees;

(6) That the common carrier's liability for acts committed by thieves, or of robbers who do not act with
grave or irresistible threat, violence or force, is dispensed with or diminished;

(7) That the common carrier is not responsible for the loss, destruction, or deterioration of goods on
account of the defective condition of the car, vehicle, ship, airplane or other equipment used in the contract
of carriage.

Article 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.

Article 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in articles 1733
and 1755.

Article 1680. The lessee shall have no right to a reduction of the rent on account of the sterility of the land leased, or
by reason of the loss of fruits due to ordinary fortuitous events; but he shall have such right in case of the loss of
more than one-half of the fruits through extraordinary and unforeseen fortuitous events, save always when there is a
specific stipulation to the contrary.

Extraordinary fortuitous events are understood to be: fire, war, pestilence, unusual flood, locusts, earthquake, or
others which are uncommon, and which the contracting parties could not have reasonably foreseen. (1575)

[+manufacturers of food and cosmetic products]

Baviera, pp 188 to 190

LOSS DUE TO FORTUITOUS EVENTS

Art 1174, (General Rule)

Article 1174. Except in cases expressly specified by the law, or when it is otherwise declared by
stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be
responsible for those events which could not be foreseen, or which, though foreseen, were inevitable.
(1105a)
Gen rule: no one will be liable for fortitiuos event unless (provisions of law below)
Exceptions:
1. Strict Liability construed:
Arts 1979 (Depositary),

4
Article 1979. The depositary is liable for the loss of the thing through a fortuitous event:

(1) If it is so stipulated;

(2) If he uses the thing without the depositor's permission;

(3) If he delays its return;

(4) If he allows others to use it, even though he himself may have been authorized to use the same. (n)

1942 (Commodatum), [borrow]

Article 1942. The bailee is liable for the loss of the thing, even if it should be through a fortuitous event:

(1) If he devotes the thing to any purpose different from that for which it has been loaned;

(2) If he keeps it longer than the period stipulated, or after the accomplishment of the use for which the
commodatum has been constituted;

(3) If the thing loaned has been delivered with appraisal of its value, unless there is a stipulation exempting
the bailee from responsibility in case of a fortuitous event;

(4) If he lends or leases the thing to a third person, who is not a member of his household;

(5) If, being able to save either the thing borrowed or his own thing, he chose to save the latter. (1744a and
1745)

2147 (Negotiorum Gestio),

Article 2147. The officious manager shall be liable for any fortuitous event:

(1) If he undertakes risky operations which the owner was not accustomed to embark upon;

(2) If he has preferred his own interest to that of the owner;

(3) If he fails to return the property or business after demand by the owner;

(4) If he assumed the management in bad faith. (1891a)

1148 (Inofficious manager),

Except when the management was assumed to save the property or business from imminent
danger, the OM shall be liable for fortuitous events

1. If he is manifestly unfit to carry on the management

2. If by his intervention he prevented a more competent person from taking up the management

5
 Article 1148. The limitations of action mentioned in articles 1140 to 1142, and 1144 to 1147 are
without prejudice to those specified in other parts of this Code, in the Code of Commerce, and in
special laws. (n)

2159 (Solutio Indebiti),

Article 2159. Whoever in bad faith accepts an undue payment, shall pay legal interest if a sum of money is
involved, or shall be liable for fruits received or which should have been received if the thing produces fruits.

He shall furthermore be answerable for any loss or impairment of the thing from any cause, and for damages to the
person who delivered the thing, until it is recovered. (1896a)

1671 (Lease),

Article 1671. If the lessee continues enjoying the thing after the expiration of the contract, over the lessor's
objection, the former shall be subject to the responsibilities of a possessor in bad faith. (n)

552 (Possessor in bad faith),

Article 552. A possessor in good faith shall not be liable for the deterioration or loss of the thing possessed, except
in cases in which it is proved that he has acted with fraudulent intent or negligence, after the judicial summons.

A possessor in bad faith shall be liable for deterioration or loss in every case, even if caused by a fortuitous event.
(457a)

1728 (Independent Contractor), and

Article 1728. The contractor is liable for all the claims of laborers and others employed by him, and of third persons
for death or physical injuries during the construction. (n)

1763 (Common carriers).

Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful acts or
negligence of other passengers or of strangers, if the common carrier's employees through the exercise of the
diligence of a good father of a family could have prevented or stopped the act or omission.

[exceptions 2. nature of obligation calls for it – or by stipulation, assuming liabilities – ex.

Insurance, banks, persons in possession of
Noxious and dangerous substances, inn keeper/hotel owner, mining corporations (similar to
independent contractors, manufacturers of food stuffs and cosmetics, medicines, possessors of
wild animals]

2. Mora Solvendi: Art 1165 and 1169;

Article 1165. When what is to be delivered is a determinate thing, the creditor, in addition to the right granted him
by article 1170, may compel the debtor to make the delivery.

6
If the thing is indeterminate or generic, he may ask that the obligation be complied with at the expense of the debtor.

If the obligor delays, or has promised to deliver the same thing to two or more persons who do not have the same
interest, he shall be responsible for any fortuitous event until he has effected the delivery. (1096)

Article 1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or
extrajudicially demands from them the fulfillment of their obligation.

However, the demand by the creditor shall not be necessary in order that delay may exist:

(1) When the obligation or the law expressly so declare; or

(2) When from the nature and the circumstances of the obligation it appears that the designation of the time
when the thing is to be delivered or the service is to be rendered was a controlling motive for the
establishment of the contract; or

(3) When demand would be useless, as when the obligor has rendered it beyond his power to
perform.

In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a
proper manner with what is incumbent upon him. From the moment one of the parties fulfills his obligation, delay
by the other begins. (1100a)

3. Mora accipiendi: Arts 1718 and 1504 [delay on the acceptance of creditor]

Article 1718. The contractor who has undertaken to put only his work or skill, cannot claim any compensation if the
work should be destroyed before its delivery, unless there has been delay in receiving it, or if the destruction was
caused by the poor quality of the material, provided this fact was communicated in due time to the owner. If the
material is lost through a fortuitous event, the contract is extinguished. (1590a)

Article 1504. Unless otherwise agreed, the goods remain at the seller's risk until the ownership therein is transferred
to the buyer, but when the ownership therein is transferred to the buyer the goods are at the buyer's risk whether
actual delivery has been made or not, except that:

(1) Where delivery of the goods has been made to the buyer or to a bailee for the buyer, in pursuance of the
contract and the ownership in the goods has been retained by the seller merely to secure performance by the
buyer of his obligations under the contract, the goods are at the buyer's risk from the time of such delivery;

(2) Where actual delivery has been delayed through the fault of either the buyer or seller the goods are at
the risk of the party in fault. (n)

Radiowealth Finance v. Sps. Del Rosario

GR No. 138739, July 6, 2000

• March 2, 1991: Spouses Vicente and Maria Sumilang del Rosario jointly and severally
executed, signed and delivered in favor of Radiowealth Finance Company a Promissory Note
for P138,948 without need of notice or demand, in instalments of P11,579.00 payable for 12
consecutive months leaving the period for the instalments blank. Upon default, the late
7
payment, 2.5% penalty charge per month shall be added to each unpaid installment from due
date thereof until fully paid.
• June 7, 1993: Radiowealth filed a complaint for the collection of a sum of money before the
Regional Trial Court of Manila. During the trial, Jasmer Famatico, the credit and collection
officer of Radiowealth, presented in evidence the Spouses’ check payments, the demand letter
dated July 12, 1991, Spouses’ customer’s ledger card, another demand letter and Metropolitan
Bank dishonor slips. Famatico admitted that he did not have personal knowledge of the
transaction or the execution of any of these pieces of documentary evidence, which had merely
been endorsed to him.
• July 29, 1994: Spouses filed a Demurrer to Evidence for alleged lack of cause of action
• RTC: Dismissed for Radiowealth’s failure to substantiate the claims, the evidence it had
presented being merely hearsay
• CA: reversed and remanded the case for further proceedings
o During the pretrial, through judicial admissions or the spouses admitted the genuineness of
the Promissory Note and demand letter dated July 12, 1991. Their only defense was the
absence of an agreement on when the installment payments were to begin
ISSUES:
1. W/N the spouses can still present evidence after the appellate court’s reversal of the
dismissal on demurer of evidence (Civil Procedure)
2. W/N the obligation is due and demandable (Credit Transaction)

HELD: Petition is GRANTED. Appealed Decision is MODIFIED. Ordered to PAY P138,948,

plus 2.5 percent penalty charge per month beginning April 2, 1991 until fully paid, and 10
percent of the amount due as attorney’s fees.

1. NO.
• Rule 33 of the 1997 Rules
o SECTION 1. Demurrer to evidence.—After the plaintiff has completed the presentation of
his evidence, the defendant may move for dismissal on the ground that upon the facts and the
law the plaintiff has shown no right to relief. If his motion is denied, he shall have the right to
present evidence. If the motion is granted but on appeal the order of dismissal is reversed he
shall be deemed to have waived the right to present evidence.
• Defendants who present a demurrer to the plaintiff’s evidence retain the right to present
their own evidence, if the trial court disagrees with them; if the trial court agrees with them, but
on appeal, the appellate court disagrees with both of them and reverses the dismissal order, the
defendants lose the right to present their own evidence
• The appellate court shall resolve the case and render judgment on the merits, inasmuch as a
demurrer aims to discourage prolonged litigations

2. Yes.
• The act of leaving blank the due date of the first installment did NOT necessarily mean that
the debtors were allowed to pay as and when they could. While the specific date on which each
installment would be due was left blank, the Note clearly provided that each installment should
be payable each month. It also provided for an acceleration clause and a late payment penalty,
both of which showed the intention of the parties that the installments should be paid at a
definite date. Per the acceleration clause, the whole debt became due one month (April 2,
1991) after the date of the Note because the check representing their first installment bounced.
• Respondents started paying installments on the Promissory Note, even if the checks were
dishonored by their drawee bank.
•

The act of leaving blank the due date of the first

installment did not necessarily mean that the debtors
were allowed to pay as and when they could. If this was
8
 the intention of the parties, they should have so indicated
in the Promissory Note. However, it did not reflect any
such intention. prLL

On the contrary, the Note expressly stipulated that the

debt should be amortized monthly in installments of
P11,579 for twelve consecutive months. While the specific
date on which each installment would be due was left
blank, the Note clearly provided that each installment
should be payable each month.
Furthermore, it also provided for an acceleration clause
and a late payment penalty, both of which showed the
intention of the parties that the installments should be
paid at a definite date. Had they intended that the debtors
could pay as and when they could, there would have been
no need for these two clauses.
Verily, the contemporaneous and subsequent acts of the
parties manifest their intention and knowledge that the
monthly installments would be due and demandable each
month. 20 In this case, the conclusion that the installments
had already became due and demandable is bolstered by
the fact that respondents started paying installments on
the Promissory Note, even if the checks were dishonored
by their drawee bank. We are convinced neither by their
avowals that the obligation had not yet matured nor by
their claim that a period for payment should be fixed by a
court.
Convincingly, petitioner has established not only a cause
of action against the respondents, but also a due and
demandable obligation. The obligation of the respondents
had matured and they clearly defaulted when their checks
bounced. Per the acceleration clause, the whole debt
became due one month (April 2, 1991) after the date of
the Note because the check representing their first
installment bounced

4. Express Agreement Art 1306

Article 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may
deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.
(1255a)

5. Aleatory contracts Art. 2010

9
Article 2010. By an aleatory contract, one of the parties or both reciprocally bind themselves to give or to do
something in consideration of what the other shall give or do upon the happening of an event which is uncertain, or
which is to occur at an indeterminate time. (1790)

Baviera, pp 190 to 196

TYPES OF CIVIL OBLIGATIONS

Baviera, pp 196 to 208

B. Pure vs Conditional
Art. 1179 (Pure Obligation)

Article 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.

Every obligation which contains a resolutory condition shall also be demandable, without prejudice to the effects of
the happening of the event. (1113)

Art 1181 (Conditional: Acquisition and Extinction of rights)

Article 1181. In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those
already acquired, shall depend upon the happening of the event which constitutes the condition. (1114)

Art. 1193 (Term or period)

Article 1193. Obligations for whose fulfillment a day certain has been fixed, shall be demandable only when that
day comes.

Obligations with a resolutory period take effect at once, but terminate upon arrival of the day certain.

A day certain is understood to be that which must necessarily come, although it may not be known when.

If the uncertainty consists in whether the day will come or not, the obligation is conditional, and it shall be regulated
by the rules of the preceding Section. (1125a)

C. Kinds of Conditional Obligations

Art. 1187 (Condition precedent, suspensive)

Article 1187. The effects of a conditional obligation to give, once the condition has been fulfilled, shall retroact to
the day of the constitution of the obligation. Nevertheless, when the obligation imposes reciprocal prestations upon
the parties, the fruits and interests during the pendency of the condition shall be deemed to have been mutually
compensated. If the obligation is unilateral, the debtor shall appropriate the fruits and interests received, unless from
the nature and circumstances of the obligation it should be inferred that the intention of the person constituting the
same was different.

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. (1120)

Art 1190 (Condition subsequent)

10
Article 1190. When the conditions have for their purpose the extinguishment of an obligation to give, the parties,
upon the fulfillment of said conditions, shall return to each other what they have received.

In case of the loss, deterioration or improvement of the thing, the provisions which, with respect to the debtor, are
laid down in the preceding article shall be applied to the party who is bound to return.

As for the obligations to do and not to do, the provisions of the second paragraph of article 1187 shall be observed as
regards the effect of the extinguishment of the obligation. (1123)

Art. 1182 (Void condition)

Article 1182. When the fulfillment of the condition depends upon the sole will of the debtor, the conditional
obligation shall be void. If it depends upon chance or upon the will of a third person, the obligation shall take effect
in conformity with the provisions of this Code. (1115)

 Catungal v. Rodriguez, GR No. 146839, March 23, 2011

1.1 Facts:

(a) Ownership and Contractual Agreement

 Agapita T. Catungal owned a parcel of land (Lot 10963) in Cebu City, covered by Original Certificate of
Title (OCT) No. 105. The property was her exclusive paraphernal property.
 On April 23, 1990, Agapita, with her husband Jose Catungal's consent, entered into a Contract to Sell with
respondent Angel S. Rodriguez for P25,000,000.00. This was later upgraded to a Conditional Deed of
Sale on July 26, 1990.
 The Conditional Deed of Sale stipulated that Rodriguez would pay a downpayment of P500,000.00, with
the balance payable in five checks upon securing a 12-meter-wide road right of way. Rodriguez was
responsible for securing the road right of way, and failure to do so would allow him to rescind the contract.

(b) Dispute Over Road Right of Way

 Rodriguez claimed he actively negotiated for the road right of way and reclassified the property from
agricultural to residential, increasing its value.
 On August 31, 1990, the Catungals requested an advance of P5,000,000.00, which Rodriguez refused,
citing the terms of the agreement. Shortly after, Rodriguez learned the Catungals were offering the property
to third parties.

(c) Unilateral Rescission by Catungals

 The Catungals sent Rodriguez letters in October 1990, demanding he decide whether to proceed with the
purchase or rescind the contract, as they needed funds for personal obligations.
 On November 9, 1990, the Catungals unilaterally rescinded the contract, claiming Rodriguez failed to
secure the road right of way and refused to pay the requested advance.

(d) Legal Proceedings

11
  Rodriguez filed a Complaint for Damages and Injunction on December 10, 1990, arguing the Catungals'
rescission was unjustified. He sought a restraining order, damages, and attorney’s fees.
 The trial court issued a temporary restraining order and later a writ of preliminary injunction, preventing
the Catungals from selling the property to third parties.
 The Catungals filed a motion to dismiss, arguing improper venue, but the court denied it, ruling the case
was a personal action for breach of contract.

(e) Catungals' Defense

 The Catungals claimed they had the right to rescind the contract due to Rodriguez’s failure to secure the
road right of way and his refusal to pay the requested advance. They argued the contract was reciprocal,
and both parties had the right to rescind.
 They also filed counterclaims for damages, including unearned interest, moral and exemplary damages, and
attorney’s fees.

(f) Amended Complaint

 Rodriguez filed an amended complaint, alleging the Catungals misrepresented the property’s features and
intentionally sabotaged his efforts to secure the road right of way to justify rescission.

1.2 Issue:
 2. Whether paragraphs 1(b) and 5 of the Conditional Deed of Sale violated the principle of mutuality
of contracts by allegedly being contingent only on the will of the vendee, thereby rendering the
contract null and void.

1.3 Ruling:
 No. 2. The provisions in question did not violate the principle of mutuality of contracts. Paragraph
1(b) was deemed to not solely depend on the will of the debtor (vendee) but also involved third
parties and chance, thus not being purely potestative. Paragraph 5, providing the vendee the option
to rescind, was conditional and subject to specific mandates within the contract, which, if taken
together with the entire contract, did not render the contract void for lack of mutuality.

1.4 Ratio:
1. Mutuality of Contracts: The court ruled that the contract must be interpreted as a whole. Rodriguez’s
option to rescind was not absolute but contingent on the failure to secure the road right of way. This did not
violate the principle of mutuality.
– Conditions imposed on the performance of an obligation in a contract, which depend not solely on the
will of one party but also on chance or the will of third parties, are valid and enforceable.
– The conditional obligation to pay the remaining balance of a purchase price upon the occurrence of a
specific event (e.g., securing a road right of way) does not violate the principle of mutuality of contracts
under Article 1308 of the Civil Code.

.
In sum, Rodriguez's option to rescind the contract is not purely
potestative but rather also subject to the same mixed condition
12
 as his obligation to pay the balance of the purchase price — i.e.,
the negotiation of a road right of way. In the event the condition
is fulfilled (or the negotiation is successful), Rodriguez must pay
the balance of the purchase price. In the event the condition is
not fulfilled (or the negotiation fails), Rodriguez has the choice
either (a) to not proceed with the sale and demand return of his
downpayment or (b) considering that the condition was imposed
for his benefit, to waive the condition and still pay the purchase
price despite the lack of road access. This is the most just
interpretation of the parties' contract that gives effect to all its
provisions.

2. Unilateral Rescission: The Catungals’ unilateral rescission was unjustified. The contract clearly granted
Rodriguez the exclusive right to rescind if he failed to secure the road right of way.
3. Interpretation of Contracts: The court emphasized that contracts must be interpreted in a way that gives
effect to all provisions. The Conditional Deed of Sale was valid, and the Catungals’ claim of being misled
was unfounded, especially since Jose Catungal was a lawyer.
4. Equitable Relief: To avoid further delay, the court fixed a 30-day period for Rodriguez to negotiate the
road right of way and provided a framework for resolving the dispute if negotiations failed.

1.5 Conclusion:
The Supreme Court affirmed the Court of Appeals’ decision with modifications, upholding the validity of the
Conditional Deed of Sale and granting Rodriguez additional time to fulfill his obligations under the contract. The
court emphasized the importance of interpreting contracts in their entirety and ensuring equitable relief for both
parties.

D. Other Kinds of obligations

1.) Obligations with a period: Art. 1193

Article 1193. Obligations for whose fulfillment a day certain has been fixed, shall be demandable only when that
day comes.

Obligations with a resolutory period take effect at once, but terminate upon arrival of the day certain.

A day certain is understood to be that which must necessarily come, although it may not be known when.

If the uncertainty consists in whether the day will come or not, the obligation is conditional, and it shall be regulated
by the rules of the preceding Section. (1125a)

Art. 1196 (for whose benefit is the period)

13
Article 1196. Whenever in an obligation a period is designated, it is presumed to have been established for the
benefit of both the creditor and the debtor, unless from the tenor of the same or other circumstances it should appear
that the period has been established in favor of one or of the other. (1127)

Arts. 1197 and 1180 (if period is not fixed)

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. (1128a)

Article 1180. When the debtor binds himself to pay when his means permit him to do so, the obligation shall be
deemed to be one with a period, subject to the provisions of article 1197. (n)

Art. 1198 (when debtor loses benefit)

Article 1198. The debtor shall lose every right to make use of the period:

(1) When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty or
security for the debt;

(2) When he does not furnish to the creditor the guaranties or securities which he has promised;

(3) When by his own acts he has impaired said guaranties or securities after their establishment, and when
through a fortuitous event they disappear, unless he immediately gives new ones equally satisfactory;

(4) When the debtor violates any undertaking, in consideration of which the creditor agreed to the period;

(5) When the debtor attempts to abscond. (1129a)

 Dagohoy Enterprises v. Ponce GR no. 6515

(Oct. 18, 1954) 96 Phil 15

1. OBLIGATION AND CONTRACTS; LOANS; OBLIGATION WITH A PERIOD; PURE

OBLIGATION. — Although the original loan, including its increased amount, was payable within six years,
and so did not become due and payable until the expiration thereof, the debtor lost the benefit of the period
by reason of her failure to give and register the security agreed upon in the form of the two deeds of
mortgage; and so the obligation became pure and without any condition. Consequently, the loan became due
and immediately demandable.
2. ID.; ID.; DEPOSIT OF THE AMOUNT OF THE LOAN IN ANOTHER ACTION IS NOT
EQUIVALENT TO PAYMENT; DEBTOR IS NOT RELIEVED FROM PAYMENT OF INTEREST. —
The deposit made by the debtor, in another action separate and different from the present, in favor of the
creditor, though eventually would be given to the latter, did not relieve the debtor from the payment of
14
 interest from the time of the deposit because it did not amount to the payment of the loan.
(Daguhoy Enterprises, Inc. v. Ponce, G.R. No. L-6515, (18 October 1954), 96 Phil 15-20)

1.6 Facts:

(a) Parties Involved

 Plaintiff and Appellee: Daguhoy Enterprises, Inc., a local corporation with its principal office in
Manila.
 Defendants and Appellants: Rita L. Ponce and her husband, Domingo Ponce.

(b) Background of the Case

1. Loan and Mortgage Agreement:

 In 1950, Domingo Ponce was the Chairman and Manager, and his son Buhay M. Ponce was the
Secretary-Treasurer of Daguhoy Enterprises, Inc.
 On June 24, 1950, Rita L. Ponce executed a mortgage deed in favor of Daguhoy Enterprises,
Inc. to secure a loan of P5,000, payable within six years with 12% annual interest.
 On March 10, 1951, Rita and Domingo amended the mortgage deed, increasing the loan to
P6,190, with the same terms and conditions.

2. Registration Issues:
 Rita and Domingo presented the mortgage deeds for registration, but the Register of Deeds
noted defects and advised them to rectify the issues.
 Instead of complying, they withdrew the mortgage deeds and mortgaged the same property to
the Rehabilitation Finance Corporation (RFC) to secure another loan.

3. Legal Actions:
 Potenciano Gapol, the majority stockholder of Daguhoy Enterprises, Inc., filed Civil Case No.
13753 against Domingo and Buhay Ponce for accounting, including the P6,190 loan.
 Domingo and Buhay deposited an RFC check for P6,190 and P266.10 in interest in Civil Case
No. 13753.
 Gapol’s petitions to withdraw the funds were denied due to opposition from Domingo and
Buhay.

4. Current Case:
 Daguhoy Enterprises, Inc. filed the present case (Civil Case No. 15923) against Rita and
Domingo to collect the P6,190 loan, interest, attorney’s fees, and litigation expenses.
 The trial court ruled in favor of Daguhoy Enterprises, Inc., holding that the loan became
immediately demandable due to the defendants’ failure to register the mortgage and their
subsequent actions.

5. Defendants’ Affirmative Defenses:

 The defendants argued that Daguhoy Enterprises, Inc. had no legal capacity to sue because the

15
 corporation was dissolved by a stockholders’ resolution on April 6, 1953.
 They also claimed that the deposit of the RFC check in Civil Case No. 13753 constituted
payment of the loan.

1.7 Issue:
 W/No the Defendant can still avail of the benefit of the period

1.8 Ruling:
 No

1.9 Ratio:

1. Loss of Benefit of Period:

1. OBLIGATION AND CONTRACTS; LOANS; OBLIGATION WITH A PERIOD; PURE

OBLIGATION. — Although the original loan, including its increased amount, was payable within six
years, and so did not become due and payable until the expiration thereof, the debtor lost the benefit of
the period by reason of her failure to give and register the security agreed upon in the form of the two
deeds of mortgage; and so the obligation became pure and without any condition. Consequently, the
loan became due and immediately demandable.
2. ID.; ID.; DEPOSIT OF THE AMOUNT OF THE LOAN IN ANOTHER ACTION IS NOT
EQUIVALENT TO PAYMENT; DEBTOR IS NOT RELIEVED FROM PAYMENT OF INTEREST. —
The deposit made by the debtor, in another action separate and different from the present, in favor of the
creditor, though eventually would be given to the latter, did not relieve the debtor from the payment of
interest from the time of the deposit because it did not amount to the payment of the loan.
 (Daguhoy Enterprises, Inc. v. Ponce, G.R. No. L-6515, (18 October 1954), 96 Phil 15-20)

 Under Article 1198 of the Civil Code, a debtor loses the benefit of the period when they fail to
provide the agreed-upon security, making the obligation immediately demandable.

2. Corporate Dissolution:
 A corporation’s dissolution requires more than a stockholders’ resolution. It must undergo
administrative or judicial processes, and the corporation continues to exist for three years post-
dissolution to wind up its affairs.

3. Payment by Deposit:
 A deposit made in a separate case involving different parties does not constitute payment unless
the creditor can access and dispose of the funds.

4. Attorney’s Fees:
 Attorney’s fees may be reduced when a judgment is rendered on the pleadings without a
hearing, as the legal work involved is minimal.
Bonus pater familias – good father of the family

16
Respondeat superior – not applicable in ph – defense employer use due diligence of a good father of a good father

Right of election – right to claim civil with criminal action or sepaeatetly

Res ipsa loquitor – concepot used in evidence whrhn there is no other evidence to be used and if the injury would
not have for the event in which the intrumentality is within the exclusive control of the person who caused the injury

Direct liability – person directly and prinsipally liable for the injury

Subsiadiary – on meployer if not able to prove, if the employee cannot pay. Employer can be made liable subsidiary
liable unless he shows that has exercise the diligence of a good father of the familiy in selecting the employee

Quasi-torts – vicarious liability to play for the injury caused by the person over whom you have guardianship

Mora solvendi – delay of the obligor

Mora accipiendi – delay in acceptance

17