Cases in Obligation and Contract

 Article 1418 When the law fixes, or authorizes the fixing of the maximum number of hours of labor, and a contract is entered into whereby a laborer undertakes to work longer than the maximum thus fixed, he may demand additional compensation for service rendered beyond the time limit. Purpose of the provision: Employees are entitled for an additional compensation for services rendered beyond the 8-hour labor work under the Eight-Hour Labor Law. except for:  Government employees Managerial employees Field personnel Members of the family of the employers who are dependent upon him for support Domestic helpers  Persons in the personal service of another Workers who are paid by results Social legislations and labor laws will govern the rights and obligations of employees and laborers. Case Illustration: Saladas vs Franklin Baker Company 108 Phil. 364 (1960) Ponente: J. Concepcion Facts: Saladas was an employee of Franklin Baker Company from 1949 to 1952, when he was dismissed...

 Article 1387 - All contracts by virtue of which the debtor alienates property by gratuitous title are presumed to have been entered into in fraud of creditors, when the donor did not reserve sufficient property to pay all debts contracted before the donation. Alienation by onerous title are also presumed fraudulent when made by persons against whom some judgment has been rendered in any instance or some writ of attachment has been issued. The decision or attachment need not refer to the property alienated and need not have been obtained by the party seeking the rescission. In addition to these presumptions, the design to defraud creditors may be proved in any other manner recognized by the law of evidence. The Statutory presumptions of fraud in Art. 1387are: Alienation by gratuitous title Example:  R made a donation of a parcel of land to E. Before the date of the donation, R had contracted several debts. With the donation to E, the remaining property of R is not sufficient t...

 Article 1355 - Except in cases specified by law, lesion or inadequacy of cause shall not invalidate a contract, unless there has been fraud, mistake or undue influence. Lesion defined - any damage caused by the fact that the price is unjust or inadequate.  Inadequacy of Cause - general rule is that the contract is not subject to the annulment in cases provided by law however such as those mentioned in article 1381 the lesion is a ground for rescission of contract.  Effect - The effect of lesion or inadequacy of cause when it resulted from fraud, mistake or undue influence is that the lesion became a good ground for rescission of the contract. Auyong Hian Vs. Court of Tax Appeals, et. al. Zaldivar, J. Facts:  On December 30, 1961, 600 hogsheads of Virginia leaf tobacco arrived in the Port of Manila. As the Import Control Law was already expired, the Collector of Customs in Manila refused to release the shipment of the subject goods. The shipment was then declared i...

 Article 1323 An offer becomes ineffective upon the death, civil interdiction, insanity, or insolvency of either party before acceptance is conveyed. Reason for this article - it is fundamental in our law that the contract is not perfected except by the concurrence of two wills which exist and continue until the moment that they concur.  Definition of Civil Interdiction, insanity and insolvency Civil Interdiction – mandatory accessory penalty deemed imposed whenever the sentence rendered is within the range of reclusion temporal to death. If the latter is not executed by reason of commutation or pardon. Insanity – legal term for mental disorder; disease or defect of the brain. Insolvency – inability or the lack of means to pay one’s debt. Illustrations: Death : Juan Dela Cruz offer to sell his beach resort to Pedro Rivera for the amount of 1.5M pesos but before the day that they are going to meet up for the payment and their contract will be made, Juan Dela Cruz died theref...

 Article 1291 Obligations may be modified by: Changing their object or principal conditions; Substituting the person of the debtor; Subrogating a third person in the rights of the creditor. Concept of Novation - Novation is the extinguishment of an obligation by the substitution or change of the obligation by a subsequent one which extinguishes or modifies the first either by changing the object or principal conditions or by substitution the person of the debtor or by subrogating a third person in the rights of the creditor.  NOVATION is a juridical act of dual function. One is to extinguish or modify an existing obligation and the other is to substitute a new one in its place. **novation is actually a new obligation.  Kinds of Novation A .  As to their essence: Objective or Real novation – effected by changing the object or principal conditions of the obligation. Subjective or Personal novation – effected by: Objective or Real novation – effected by changing the ob...

  Article 1259. The expenses of consignation, when properly made, shall be charged against the creditor Expenses borne by Creditor - The consignation is properly made:  When after the thing has been deposited in court, the creditor accepts consignation without objection and without any reservation of his right to contest it because of failure to comply with any of the requisites for consignation. When the creditor objects to the consignation has been validly made. The creditor bears the expenses of the consignation.  *If the consignment is properly made the filling of the suit must bear the expenses of consignation like storage fees, filing fees, attorney’s fees and other related expenses. Amadeo Matute vs. Cheong Boo G.R.No. L-11109 January 7, 1918 Street, J.: Facts: On January 14, 1915, a contract was made between Amadeo Matute and Cheong Boo that the former should deliver and the latter should receive within the month of February of the same year a quantity of mo...

Article 1227 - The debtor cannot exempt himself from the performance of the obligation by paying the penalty, save in the case where this right has been expressly reserved for him. Neither can the creditor demand the fulfillment of the obligation and the satisfaction of the penalty at the same time, unless this right has been clearly granted him. However, if after the creditor has decided to require the fulfillment of the obligation, the performance thereof should become impossible without his fault, the penalty may be enforced. (1153a) Right of Debtor  - generally, the debtor cannot just pay the penalty instead of performing the obligation. The purpose of the penalty is to secure compliance with his obligation.  Exception - When the debtor is expressly granted the right. Ex. - PPD promises to finish the house within a stipulated period of 8 months. The contract stipulates that in case he does not build the house at all, he is supposed to forfeit the sum of 100k pesos. In thi...

  ARTICLE 1163 - Every person obliged to give something is also obliged to take care of it with the proper diligence of a good father of a family, unless the law or the stipulation of the parties requires another standard of care. (1094a) Reason for provision – This article provides the required standard of care for a thing to be delivered which is a proper diligence of a good father of a family, an exception to this requirement is when the law or the stipulation of the party requires another standard of care.  Diligence Required – preserving the thing ,law requires the diligence of a good father of a family Effect of Breach – the obligation to preserve the thing to be delivered has its sanction in the liability for damages imposed upon the debtor who fails the exercise of diligence of a good father of a family preserving the thing. But if the failure of the debtor to preserve the thing is due to no fault or negligence of his but fortuitous event or force. He is exempt from...