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ipsa loquitur is not applicable when an between an action to enforce the civil liability
ARTICLE 1157
unexplained accident may be attributable to arising from culpa criminal and an action for
SAGRADA V. NACOCO The obligation to pay one of several causes, for some of which the quasi delict.
rentals must arise from law, contract, quasi- defendant could not be responsible.
If the action is for quasi delict, the plaintiff
contract, crime, or negligence. A party
allowed by the US Alien Property Custodian to LRTA V. NATIVIDAD The law requires may hold the employer liable for the negligent
occupy and use enemy property is not liable common carriers to carry passengers safely act of its employee, subject to the employers
to pay rentals to the pre-war owner (even using the utmost diligence of very cautious defense of exercise of the diligence of a good
when the enemy acquired it by duress) person with due regard for all circumstances. father of a family. If the action is for culpa
because there was no privity of contract or This duty exists for so long as the passengers criminal, the plaintiff can hold the employer
obligation between the Custodian and the are within its premises and where they ought subsidiarily liable only upon proof of prior
enemy owner, the Custodians title being to be in pursuance to the contract of carriage. conviction of its employee. The choice is with
the plaintiff who makes known his cause of
based by legal provision on the right to seize
In
case
of
death
or
injury,
a
carrier
is
action in his initiatory pleading or complaint.
enemy property.
presumed to have been at fault or been
ARTICLE 1161
If the occupant took possession of the negligent, and by simple proof of injury, the
property with the permission of the Custodian, passenger is relieved of the duty to still CAMINOS V. PEOPLE Reckless imprudence
without any express or implied agreement establish the fault or negligence of the carrier consists in voluntarily but without malice,
between them that rentals would be paid, or of its employees and the burden shifts upon doing or failing to do an act from which
then none may be recovered by the pre-war the carrier to prove that the injury is due to an material damage results by reason of
unforeseen event.
The common carrier is inexcusable lack of precaution on the part of
owner.
liable for death of or injury to passengers: (1) the person performing or failing to perform
through the negligence or wilful acts of its such act, taking into consideration his
ARTICLE 1159
employees or (2) on account of willful acts of employment or occupation, degree of
FGU V. SARMIENTO In culpa contractual, the negligence of other passengers or of strangers intelligence, physical condition, and other
mere proof of the existence of the contact and if the common carriers employees through circumstances regarding persons, time and
the failure of its compliance justify, prima the exercise of due diligence could have place.
facie, a corresponding right of relief. In culpa prevented or stopped the act or omission.
Speeding is indicative of imprudent behavior
aquiliana, it is required to prove fault or
A
contractual
obligation
can
be
breached
by
because a motorist is bound to exercise such
negligence. In the absence of proof, the driver
tort
and
when
the
same
act
or
omission
ordinary care and drive at a reasonable rate of
of a vehicle may not be ordered to pay the
causes
the
injury,
one
resulting
in
cupla
speed commensurate with the conditions
injured party.
contractual and the other in culpa contractual, encountered on the road.
1
Under the doctrine of res ipsa loquitur, a Art. 2194 can well apply. A liability for tort
ARTICLE 1162
defendant is liable where the thing which may arise even under a contract, where tort is
caused the injury complained of is shown to that which breaches the contract.
be under the defendants management and
CANGCO V. MRR It is not negligence per se
the accident is such that, in the ordinary LG FOODS V. AGRAVIADOR An act or omission for a passenger to alight from a slowly moving
course of things, cannot be expected to causing damage to another may give rise to train. Failure to perform a contract cannot be
happen if those who have its management two separate civil liabilities on the part of the excused upon the ground that the breach was
use proper care. In the absence of explanation offender: (1) civil liability ex delicto; and (2) due to the negligence of a servant of the
by the defendant, it affords reasonable independent civil liabilities. Victims of obligor, and that the obligor exercised due
evidence that the accident arose from want of negligence or their heirs have a choice diligence in the selection and control of the
care. It relieves a plaintiff of the burden of
servant.
1
producing specific proof of negligence. Res Art. 2194. The responsibility of two or more persons who
are liable for quasi-delict is solidary.

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VIRON V. DE LOS SANTOS When the
employee causes damage due to his own
negligence while performing his own duties,
there arises the juris tantum2 presumption
that the employer is negligent, rebuttable only
by proof observance of the diligence of a good
father of a family.

done a negligent act or that he has deviated

from the standard medical procedure, when
the doctrine of res ipsa loquitur is availed by
the plaintiff, the need for expert medical
testimony is dispensed with because the
injury itself proves the proof of negligence.
Nevertheless, res ipsa loquitur does not
automatically apply to all cases of medical
negligence. It is restricted to malpractice
cases where a layman is able to say, as a
matter
of
common
knowledge
and
observation, that the consequences of
professional care were not as such as would
ordinarily have followed if due care had been
exercised. It is not applicable in a suit which
involves the merits of a diagnosis or of a
scientific treatment.

hospital (also known as the doctrine of

apparent authority). Under this doctrine, a
hospital can be held vicariously liable for the
negligent acts of a physician, regardless of
whether he is an independent contractor.

RAMOS V. CA Although generally, expert

medical
testimony
is
relied
upon
in A hospital is not liable for the negligence of an
malpractice suits to prove that a physician has independent
contractor-physician.
Nevertheless, the hospital may be liable if the
2
physician is the ostensible agent of the
legal but rebuttable

formulate, adopt, and enforce adequate rules and policies

to ensure quality care for its patients. These special tort
duties arise from the special relationship existing between
a hospital or nursing home and its patients, which are
based on the vulnerability of the physically or mentally ill
persons and their inability to provide care for themselves.

CEREZO V. TUASON An action based on a

quasi-delict may proceed independently from
the criminal action. There is, however, a
distinction between civil liability arising from a
delict a civil liability arising from a quasidelict. The choice of remedy affects the
procedural and jurisdictional issues of the
action.
While the employer is civilly liable in a
subsidiary capacity for the employees
criminal negligence, the employer is also
civilly liable directly and separately for his
own civil negligence in failing to exercise due
diligence in selecting and supervising his
employee. To hold the employer liable in a
subsidiary capacity under a delict, the
aggrieved party must initiate a criminal action
where
the
employees
delict
and
corresponding
primary
liability
are
established.
LG FOODS V. AGRAVIADOR Supra.
MINDANAO V. PHOENIX An arrastre operator
is required to observe the same degree of
diligence required of a common carrier and a
warehouseman. As the custodian of the goods
discharged from a vessel, an arrastre
operator's duty is to take good care of the
goods and to turn them over to the party
entitled to their possession.

In order to hold the hospital liable under the

doctrine of apparent authority the following
requisites must be present: (1) the hospital (or
its agent) acted in a manner that would lead a
reasonable person to conclude that the
individual who was alleged to be negligent
was an employee or agent of the hospital; (2)
where the acts of the agent create the
appearance of authority, the plaintiff must
also prove that the hospital had knowledge of
and acquiesced in them; and (3) the plaintiff
acted in reliance upon the conduct of the
Private hospitals hire, fire and exercise real hospital (or its agent) consistent with ordinary
control over their attending and visiting care and prudence.
consultant staff. While consultants are not
technically employees, the control exercised, The element of holding out does not require
the hiring, and the right to terminate all fulfill an express representation by the hospital that
the important hallmarks of an employer- the person alleged to be negligent is an
employee relationship. For the purpose of employee. It is sufficient if the hospital holds
allocating responsibility of medical negligence itself out as a provider of emergency room
cases, an employer-employee relationship in care without informing the patient that the
effect exists between hospitals and their care is provided by independent contractors.
attending and visiting physicians. Hospitals Justifiable reliance is satisfied if the plaintiff
are solidarily liable for the negligence of its relies upon the hospital to provide complete
employees.
emergency room care, rather than upon a
specific physician.
NOGALES V. CAPITOL MEDICAL The control
test determines whether an employment Under
the
doctrine
of
corporate
relationship exists between a physician and a responsibility,3 the duty of providing quality
hospital based on the exercise of control over
the physician as to details. Specifically, the 3 The corporate negligence doctrine imposes several
employer (or the hospital) must have the right duties on a hospital: (1) to use reasonable care in the
to control both the means and the details of maintenance of safe and adequate facilities and
the process by which the employee (or the equipment; (2) to select and retain only competent
physicians; (3) to oversee as to patient care all persons
physician) is to accomplish his task.
who practice medicine within its walls; and (4) to

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medical service is no longer the sole
responsibility of the physician. Modern
hospitals now tend to organize a highlyprofessional medical staff whose competence
and performance need also to be monitored
by the hospital commensurate with its
inherent responsibility to provide quality
medical care. Such responsibility includes the
proper supervision of the members of its
medical staff. Accordingly, the hospital has
the duty to make a reasonable effort to
monitor and oversee the treatment prescribed
and administered by the physicians practicing
in its premises.

leading the public to believe that it vouched

for their skill and competence.
CANTRE V. GO The captain of the ship
doctrine holds the surgeon in charge of an
operation liable for the negligence of his
assistants during the time when those
assistants re under the surgeons control.

PHIL. HAWK V. TAN Foreseeability is the

fundamental test of negligence. To be
negligent, a defendant must have acted or
failed to act in such a way that an ordinary
reasonable man would have realized that
certain interests of certain persons were
unreasonably subjected to general but definite
PROFESSIONAL V. AGANA Leaving sponges class of risks.,
and other foreign substances in the wound
after the incision has been closed is at least
ARTICLE 1169
prima facie negligence by the operating
surgeon. In this case, the physician did not LORENZO SHIPPING V. BJ MARTHEL When the
inform the patient about the missing two time of delivery is not fixed or is stated in
pieces of gauze and misled her that the pain general and indefinite terms, time is not of the
she was experiencing was the ordinary essence of the contract. In such cases, the
consequence of her operation.
delivery must be made within a reasonable
time. Even where time is of the essence, a
Res ipsa loquitur is not a rule of substantive breach of the contract in that respect by one
law. It does not per se create or constitute an of the parties may be waived by the other
independent ground of liability, being a mere partys subsequently treating the contract as
evidentiary rule. Mere invocation of the still in force. A party that accepts the items
doctrine does not dispense with the when these were delivered to its warehouse
requirement of proof of negligence. The indisputably waives the claimed delay in the
elements of res ipsa loquitur are: (1) the delivery of the said items.
occurrence of an injury; (2) the thing which
caused the injury was under the control and The act of a party in treating a contract as
management
of
the
defendant
(most resolved on account of infractions by the other
important element); and (3) the occurrence contracting party must be made known to the
was such that in the ordinary course of things, other and is always provisional, subject to
would not have happened if those who had judicial review. If the other party denied that
control or management used proper car; and rescission is justified, it is free to resort to
(4) the absence of explanation by the judicial action.
defendant.
BPI V. CA The law expressly provides that
A hospital is estopped from passing the entire demand is not necessary under certain
blame to the physicians whose names it circumstances,
and
one
of
these
proudly paraded in the public directory

circumstances is when the parties expressly

waive demand.
ASJ V. EVANGELISTA Reciprocal obligations
are those which arise from the same cause,
wherein each party is a debtor and a creditor
of the other, such that performance is
conditioned upon the simultaneous fulfillment
of the other. From the moment a party fulfills
his obligations, delay by the other party
begins.
RAQUEL-SANTOS V. CA A debt is liquidated
when the amount is known or determinable by
inspection of the terms and conditions of
relevant documents. When the exact amount
of fines, penalties and charges are still in
dispute and undetermined the debt is still
unliquidated. A party cannot be made to pay
an obligation the amount of which was not
fully explained to it.

ARTICLE 1170
ARRIETA V. NARIC One who assumes a
contractual obligation and fails to perform it
on account of his inability to meet certain
bank requirements which inability he knew
and was aware of when he entered into the
contract, should be held liable in damages for
breach of contract. The phrase in any
manner contravene the tenor of the
obligation includes any illicit task which
impairs the strict and faithful fulfillment of the
obligation, or every kind of defective
performance.
TELEFAST V. CASTRO When a party does not
do what is incumbent upon him, despite
performance by the other of his obligation by
paying the required charges, the infractor is
guilty of contravening its obligations and is
liable for damages.
LEGASPI OIL V. CA Fraud is the voluntary
execution of a wrongful act, or a wilful

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omission, knowing and intending the effects
which naturally and necessarily arise from
such act or omission. Under Art. 1170, it is the
deliberate and intentional evasion of the
normal fulfillment of obligations. It is
distinguished
from
negligence
by
the
presence of deliberate intent, which is lacking
in negligence.

ARTICLE 1173
JIMENEZ V. CITY OF MANILA Provinces, cities
and municipalities are liable for damages for
the death of, or injury suffered by any person
by reason of the defective condition of roads,
streets bridges, public buildings, and other
public
works
under
their
control
or
supervision. It is not necessary that it belongs
to the province, city or municipality for liability
to attach, what is required is it has either
control or supervision over the public
building in question.

ARTICLE 1174
NAKPIL & SONS V. CA To exempt the obligor
from liability for a breach of an obligation due
to an act of God, the following must concur:
(1) the cause of the breach of the obligation
must be independent of the will of the debtor;
(2) the event must be either unforeseeable or
unavoidable; (3) the event must be such as to
render it impossible for the debtor to fulfil his
obligation in a normal manner; (4) the debtor
must be free from any participation in, or
aggravation of the injury to the creditor.
A construction company is negligent when
substantial deviations from the plans and
specifications are made, and when it failed to
observe the requisite workmanship in the
construction as well as to exercise the
requisite degree of supervision. The architects
are
also
negligent
when
there
are
inadequacies or defects in the plans and

specifications prepared by them. One who

negligently creates a dangerous condition
cannot escape liability for the natural and
probable consequences thereof, although the
act of a third person, or an act of God for
which he is not responsible, intervenes to
precipitate the loss.

that he has been relieved of his obligations

therein, and led said party to believe and act
upon such belief, he may not be permitted to
repudiate his representations, or occupy
inconsistent positions.
The remedies under Art. 1191 are alternative.
A party that elects to cancel a contract cannot
avail himself of exacting performance. As a
consequence of resolution, the parties should
be restored, as far as practicable, to their
original situations by returning the things
which were the object of the contract, with
their fruits and of the price with its interest
computed from the date of the institution of
the action.

MINDEX V. MORILLO In order for a fortuitous

event to exempt one from liability, it is
necessary that one has committed no
negligence or misconduct that may have
occasioned the loss. When the effect is found
to be partly the result of a persons
participation (whether by active intervention,
neglect or failure to act) the whole occurrence
is humanized and removed from the rules
applicable to acts of God.
UP V. DE LOS ANGELES There is nothing in
the law that prohibits the parties from
entering into an agreement that violation of
ARTICLE 1191
the terms of the contract would cause
UFC V. CA The general rule is that cancellation thereof, even without court
rescission of a contract will not be permitted intervention. It is not always necessary for the
for a slight or casual breach, but only for such injured party to resort to court for rescission of
substantial and fundamental breach as would the contract.
defeat the very object of the parties in making
ARTICLE 1207
the agreement. The question of whether a
breach is substantial depends upon the
attendant circumstances.
RONQUILLA V. CA When the obligors bind
themselves
to
pay
their
obligation
JBL CONCURRING OPINION A rescission for individually and jointly, it is enforceable
breach under Art. 1191 (resolution) is not against one of the numerous obligors.
predicated on injury to economic interests of
the plaintiff but on the breach of faith by the
ARTICLE 1216
defendant, that violates the reciprocity
between the parties. Rescission is not a PNB V. INDEPENDENT PLANTERS Art. 1216
subsidiary action, it is a principal action gives the creditor the right to proceed against
retaliatory in character. On the other hand, anyone of the solidary debtors or some or all
Art. 1381 (rescission) is subordinated to the of them simultaneously. The choice is
existence of that prejudice, because it is the undoubtedly left to the solidary creditor to
raison etre and measure of the right to determine against whom he will enforce
rescind.
collection. In case of the death of one of the
solidary debtors, the creditor may, if he so
MAGDALENA V. MYRICK Where a party chooses, proceed against the surviving
cancels the contract, advises the other party solidary debtors without necessity of filing a

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claim in the estate of the decease debtor. It is
not mandatory for the creditor to have the
case dismissed against the surviving debtors
and file its claim in the estate of the deceased
solidary debtor.

ARTICLE 1226
COUNTRY BANKERS V. CA A provision which
calls for the forfeiture of the remaining deposit
still in the possession of the lessor, without
prejudice to any other obligation still owing, in
the event of the termination or cancellation of
the agreement by reason of the lessees
breach is a penal cause that may be validly
entered into. A penal clause is an accessory
obligation which the parties attach to a
principal obligation for the purpose of insuring
the performance thereof by imposing on the
debtor a special prestation in case the
obligation is not fulfilled or is irregularly or
inadequately fulfilled.
As a general rule, the penalty shall substitute
the indemnity for damages and the payment
of interest in case of non-compliance.
However, there are exceptions to this: (1)
there is a stipulation to the contrary; (2) the
obligor is sued for refusal to pay the agreed
penalty; and (3) the obligor is guilty of fraud.

ARTICLE 1229
LO V. CA Generally, courts are not at liberty
to ignore the freedom of the parties to agree
on such terms and conditions as they see fit
as long as they are not contrary to law,
morals, good customs, public order or public
policy. Nevertheless, courts may equitably
reduce a stipulated penalty in the contract if it
is iniquitous or unconscionable, or if the
principal obligation has been partly or
irregularly complied with. Whether or not a
penalty is reasonable or iniquitous is
addressed to the discretion of the court and

depends on several factors (i.e. type, extent

ARTICLE 1249
and purpose of the penalty; nature of the
obligation;
mode
of
breach
and
its TIBAJIA V. CA A check is not legal tender and
consequences; supervening realities; standing a creditor may validly refuse payment by
and relationship of the parties).
check, whether it be a managers, cashiers or
personal check.

ARTICLE 1231

SAURA V. DBP Where after the approval of

his loan, the borrower, instead of insisting for
its release, asked that the mortgage given as
security be cancelled and the creditor
acceded thereto, the action taken by both
parties was in the nature of mutual
desistance. If mutual agreement can make a
contract, mutual disagreement by the parties
can cause its extinguishment.

ARTICLE 1244
CATHAY PACIFIC V. VAZQUEZ Passengers have
every right to decline an upgrade and insist on
their booked accommodations. Upgrades
should not be imposed on passengers over
their vehement objection. By insisting on the
upgrade, a common carrier breaches its
obligation.

ARTICLE 1245
LO V. KJS In dacion en pago, the debtor
offers another thing to the creditor who
accepts it as equivalent of payment of an
outstanding debt. The following are the
requisites: (1) performance of the prestation
in lieu of payment (animo solvendi) which may
consist in the delivery of a corporeal thing or a
real right or a credit against the third person;
(2) difference between the prestation due and
that which is given in substitution (aliud pro
alio); (3) an agreement between the creditor
and debtor that the obligation is immediately
extinguished by reason of the performance of
a prestation different from that due.

CITIBANK V. SABENIANO A check, whether

managers check or ordinary check, is not
legal tender, and an offer of a check in
payment of a debt is not a valid tender of
payment and may be refused receipt by the
obligee or creditor. Mere delivery of checks
does not discharge the obligation under a
judgment. The obligation is not extinguished
and remains suspended until the payment by
commercial document is actually realized.
BPI V. ROXAS A cashiers check is really the
banks own check and may be treated as a
promissory note with the bank as the maker.
The check becomes the primary obligation of
the bank which issues it and constitutes a
written promise to pay upon demand. The
court has previously taken judicial notice of
the well-known and accepted practice in the
business sector that a cashiers check is
deemed as cash. This is because the mere
issuance of a cashiers check is considered
acceptance thereof.

ARTICLE 1250
TELENGTAN V. US LINES Extraordinary
inflation or deflation, as the case may be,
exists when there is an unusual increase or
decrease in the purchasing power of the
Philippine peso which is beyond the common
fluctuation in the value of said currency, and
such increase or decrease could not have
been reasonably foreseen or was manifestly
beyond the contemplation of the parties at
the time of the establishment of the
obligation. Extraordinary inflation can never

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be assumed; he who alleges the existence of obtain.
Tender
of
payment
may
be
such phenomenon must prove the same.
extrajudicial, while consignation is necessarily
judicial, and the priority of the first is the
Absent an official declaration by competent attempt to make a private settlement before
authorities of the existence of extraordinary proceeding to the solemnities of consignation.
inflation during a given period, the effects of
extraordinary inflation, if that be the case, are PASRICHA V. LUIS The rationale for
not to be applied.
consignation is to avid the performance of an
obligation becoming more onerous to the
Art. 1250 provides that the value of the peso debtor by reason of causes not imputable to
at the time of the establishment of the him. Tender of payment must be accompanied
obligation shall control and be the basis of by consignation in order that the effects of
payment of the contractual obligation, unless payment may be produced.
there is an agreement to the contrary. Only An action for interpleader is proper when the
when there is a contrary agreement that lessee does not know to whom payment of
extraordinary inflation will make the value of rentals should be made due to conflicting
the currency at the time of payment becomes claims on the property or on the right to
the basis for payment.
collect.

ARTICLE 1256
SOCO V. MILITANTE The requisites of a valid
consignation must be mandatorily and fully
complied with (Arts. 1256 to 1261). The
debtor must show: (1) there was a debt due;
(2) the consignation of the obligation had
been made because the creditor to whom
tender of payment was refused to accept it, or
because he was absent or incapacitated, or
because several persons claimed to be
entitled to receive the amount; (3) the
previous notice of the consignation had been
given to the person interested in the
performance of the obligation; (4) the amount
due was placed at the disposal of the court;
and (5) after the consignation had been made
the person interested was notified thereof.
Failure in any is enough ground to render a
consignation ineffective.

shares between the parties as contractually

stipulated with the force of law between the
parties, so as to substitute its own terms for
those covenanted by the parties themselves.
NAGA TELEPHONE V. CA Art. 1267 speaks of
service which has become so difficult.
Taking into consideration the rationale behind
this provision, the term service should be
understood as referring to the performance
of the obligation. It is not required that the
contract be for future service with future
unusual charge.

Under the doctrine of rebus sic stantibus, the

parties stipulate in the light of certain
prevailing
conditions,
and
once
these
conditions cease to exist the contract also
ceases to exist. The disappearance of the
GO V. CA A refusal without just cause is not basis of a contract gives rise to a right to relief
equivalent to payment; to have the effect of in favor of the party prejudiced.
payment and the consequent extinguishment
of the obligation to pay, the law requires the MAGAT V. CA A party cannot be faulted
companion acts of tender of payment and when his inability to secure a letter of credit
consignation.
and to comply with his obligation was a direct
consequence of the denial of the permit to
import.
ARTICLE 1267

LAGUNA V. MANABAT Performance is not

excused by subsequent inability to perform,
unforeseen difficulties, unusual or unexpected
expenses,
danger,
inevitable
accident,
breaking of machinery, strikes, sickness,
failure of a party to avail himself of the
benefits to be had under the contract,
weather conditions, financial stringency, or
stagnation of business. Neither is performance
excused by the fact that the contract turns out
to be hard and improvident, unprofitable or
impracticable, ill-advised or even foolish, less
Tender of payment is the antecedent of profitable, or unexpectedly burdensome.
consignation, that is, an act preparatory to the
consignation, which is the principal, and from OCCENA V. JABSON Art. 1267 does not grant
which
are
derived
the
immediate the courts the authority to remake, modify or
consequences which the debtor seeks to revise the contract or to fix the division of

ARTICLE 1291
FOUNDATION V. BETONVAL Novation is done
by the substitution or change of the obligation
by a subsequent one which extinguishes the
first, either by changing the object or principal
conditions, or by substituting the person of
the debtor, or by subrogating a third person in
the rights of the creditor. The obligation to pay
a sum of money is not novated by an
instrument that expressly recognizes the old,
changes only the terms of payment, adds
other obligations not incompatible with the old
ones or the new contract merely supplements
the old one.

ARTICLE 1306

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REPUBLIC V. PLDT Parties cannot be coerced
to enter into a contract where no agreement is
had between them as to the principal terms
and conditions of the contract. Freedom to
stipulate such terms and conditions is of the
essence of our contractual system, and by
express provision of the statute.
If under the Constitution the State may, in the
interest of national welfare, transfer utilities to
public ownership upon payment of just
compensation, there is no reason why the
State may not require a public utility to render
services in the general interest, provided just
compensation is paid therefor.
CUI V. ARELLANO The stipulation in a
contract, between a student and the school,
that the students scholarship is good only if
he continues in the same school, and that he
waives his right to transfer to another school
without refunding the equivalent of his
scholarship in cash, is contrary to public
policy, and null and void. Scholarships are
awarded in recognition of merit and to help
gifted students, in whom society has an
established interest or a first lien, and not to
keep outstanding students in school to bolster
its prestige and increase its business
potential.
SAURA V. SINDICO Among those that may not
be the object of contracts are certain rights of
individuals, which the law and public policy
have deemed wise to exclude from the
commerce of man. Among these are the
political rights conferred upon citizens (i.e.
right to vote and be voted for). Therefore,
such rights may not be bargained away or
surrendered for consideration by the citizen or
unduly curtailed with impunity, for they are
conferred not for individual or private benefit
or advantage but for the public good and
interest.

REGINO V. PANGASINAN The relationship

between the school and student is contractual
and reciprocal in nature. The school
undertakes to provide students with education
sufficient to enable them to pursue higher
education or profession. On the other hand,
the students agree to abide by the academic
requirements of the school and to serve its
rules and regulations.

invalidates a rule denying employment to one

spouse due to the current employment of the
other spouse in the same office. Unless the
employer can prove that the reasonable
demands of the business require a distinction
based on marital status and there is no better
available or acceptable policy which would
better accomplish the business purpose, an
employer may not discriminate against an
employee based on the identity of the
The terms of the school-student contract are employees spouse.
defined at the moment of its inception upon
enrolment of the student. Standards of The policy may not facially violate Art. 136 of
academic performance and the code of the
Labor
Code5
but
it
creates
a
behavior and discipline are usually set forth in disproportionate
effect and under the
manuals distributed to new students at the disparate impact theory, the only way it could
start of every school year. A fee that was not pass judicial scrutiny is a showing that it is a
part of the school-student contract entered reasonable.
into at the start of the school year could not
be unilaterally imposed to the prejudice of the ACOL V. PCCCI A stipulation6 in credit card
enrolees.
application form that provides that the
effectivity of the cancellation of the lost card
DUNCAN V. GLAXO A company policy rests on an act entirely beyond the control of
prohibiting an employee from having a the cardholder is contrary to public policy.
relationship with an employee of a competitor
company is a valid exercise of management The phrase after a reasonable time gives
prerogative. It has a right to guard its trade the issuer the opportunity to actually profit
secrets, manufacturing formulas, marketing from unauthorized charges despite receipt of
strategies and other confidential programs immediate written notice from the card holder.
and information from competitors. The equal A card holder could have theoretically done
protection clause is addressed only to the everything in his power to give the issuer the
State or those acting under color of its required written notice. But if the issuer took a
authority.
reasonable time (which could be indefinite)
STAR PAPER V. SIMBOL A no-spouse
employment policy is invalid if the employer
fails to present any evidence of business
necessity other than the general perception
that spouses in the same workplace might
adversely affect the business. The absence of
a bona fide occupational qualification4
4

To justify a bona fide occupational qualification, the

employer must prove two factors: (1) the employment
qualification is reasonably related to the essential
operation of the job involved; and (2) there is a factual
basis for believing that all or substantially all persons

meeting the qualification would be unable to properly

perform the duties of the job.
5
Art. 136. STIPULATION AGAINST MARRIAGE It shall be
unlawful for an employer to require as condition of
employment or continuation of employment that a woman
employee shall not get married, or to stipulate expressly
or tacitly that upon getting married a woman employee
shall be deemed resigned or separated, or to actually
dismiss, discharge, discriminate or otherwise prejudice a
woman employee merely by reason of her marriage.
6
Holders responsibility for all charges made through the
use of the card shall continue until the expiration or its
return to the Card Issuer or until a reasonable time after
receipt by the Card Issuer of written notice of loss of the
Card and its actual inclusion in the Cancellation Bulletin.

CIVIL LAW REVIEW 2 (OBLICON) DOCTRINES | ATTY. RUBEN BALANE | MARK JOREL O. CALIDA

Page | 8
to include the card in its cancellation bulletin,
it could still hold the cardholder liable for
whatever unauthorized charges were incurred
within that span of time.

whole of the contract; (3) contracting parties

must have clearly and deliberately conferred a
favor upon a third person, not a mere
incidental benefit or interest; (4) third person
must have communicated his acceptance to
the obligor before its revocation; and (5)
neither of the contracting parties bears the
legal representation or authorization of the
third party.

AZNAR V. CITIBANK A stipulation in a credit

card agreement which limits the card
companys liability to P1,000 or the actual
damage proven, whichever is lesser, cannot
be
considered
as
valid
for
being
unconscionable as it precludes payment of a UY V. CA Where an agent is not a
larger amount even though damage may be beneficiary of a stipulation pour autrui, the
clearly proven.
fact that he did not obtain his commissions or
recoup his advances because of the nonperformance of the contract does not entitle
ARTICLE 1308
him to file an action against the buyer.
SAMPAGUITA V. PNB The unilateral
ARTICLE 1324
determination and imposition of increased
rates is violates the principle of mutuality of
contracts ordained in Art. 1308. One-sided SANCHEZ V. RIGOS In accepted unilateral
impositions do not have the force of law promise to sell, since there may be no valid
between the parties, because such imposition contract without a cause or consideration, the
is not based on the parties essential equality. promisor is not bound by his promise and
may, accordingly, withdraw it. Pending notice
Although escalation clauses are valid, giving a of its withdrawal, his accepted promise
bank an unbridled right to adjust the interest partakes, however, of the nature of an offer to
independently and upwardly would completely sell which, if accepted, results in a perfected
take away the right to assent to an important contract of sale.
modification in their agreement and would
also negate the element of mutuality in their ANG YU V. CA Where a period is given to the
contracts.
offeree within which to accept the offer, the
following rules generally govern:

ARTICLE 1311

arbitrarily. Otherwise, it could give rise to

damages under Art. 19 of the Civil Code.7
If the period has a separate consideration, a
contract of option is deemed perfected. It
would be a breach of the contract to withdraw
the offer during the agreed period. The
option, however, is an independent contract
by itself, and it is to be distinguished from the
projected main agreement which is yet to be
concluded. If the optioner (offeror) withdraws
the offer before its acceptance by the
optionee (offeree), the latter may not sue for
specific performance on the proposed contract
since it has failed to reach its own perfection
stage. However, the optioner (offeror) renders
himself liable for damages for breach of the
option.
Care should be taken on the real nature of the
consideration given, for if, in fact it has been
intended to be part of the consideration for
the main contract with a right of withdrawal
on the part of the optionee (offeree), the main
contract could be deemed perfected.
EQUATORIAL V. MAYFAIR The deed of option
or the option clause in a contract, in order to
be valid and enforceable, must, among other
things, indicate the definite price at which the
person granting the option is willing to sell.
The option is not the contract of sale itself.
The optionee (offeree) has the right, but not
the obligation, to buy. Once the option is
exercised timely, a bilateral promise to sell
and to buy ensues and both parties are then
reciprocally bound to comply with their
respective undertakings.

If the period is not itself supported by a

consideration, the offeror is still free and has
the right to withdraw the offer before its
acceptance. The same rule applies if an
acceptance has been made but before the
offerors coming to know of such acceptance.
In both instances, the withdrawal must be
communicated to the offeree. Nevertheless, BIBLE BAPTIST V. CA An option contract
BALUYOT V. CA The following requisites must the right to withdraw must not be exercised needs to be supported by a separate
be present in order to have a stipulation pour
7
autrui: (1) stipulation in favor of a third
Art. 19. Every person must, in the exercise of his rights
and the performance of his duties, act with justice, give
person; (2) stipulation must be a part, not the
MANDARIN V. CA While a party may not be
privy to an agreement, such party may
demand its fulfilment if there is a stipulation
pour autrui; provided further, that he
communicated his acceptance prior to its
revocation.

everyone his due, and observe honesty and good faith.

CIVIL LAW REVIEW 2 (OBLICON) DOCTRINES | ATTY. RUBEN BALANE | MARK JOREL O. CALIDA

Page | 9
consideration. The consideration need not be
monetary but could consist of other things or
undertakings. However, if the consideration is
not monetary: (1) these must be things or
undertakings of value, in view of the onerous
nature of the contract of option; and (2) said
consideration must be clearly specified as
such in the option contract or clause.
VILLEGAS V. CA Where a time is stated in an
offer for its acceptance, the offer is terminated
at the expiration of the time given for its
acceptance. The offer may also be terminated
when the person to whom the offer is made
either rejects the offer outright or makes a
counter-offer of his own.
EULOGIO V. APELES An option is not of itself a
purchase, but merely secures the privilege to
buy. It is not a sale of property but sale of the
right
to
purchase.
Its
distinguishing
characteristic is that it imposes no binding
obligation on the person holding the option,
aside from the consideration for the offer.

ARTICLE 1345
PAYONGAYONG V. CA Simulation occurs when
an apparent contract is a declaration of a
fictitious will, deliberately made by agreement
of the parties, in order to produce, for the
purpose of deception, the appearance of a
juridical act which does not exist or is different
from that which was really executed. Its basic
characteristic is that it is not really intended to
produce legal effects or does not in any way
alter the juridical situation of the parties.
Its requisites are: (1) an outward declaration
of will different from the will of the parties; (2)
false appearance must have been intended by
mutual agreement; and (3) purpose is to
deceive third persons.

ARTICLE 1354

LAW V. OLYMPIC SAWMILL Unless the debtor

proves the contrary in a hearing, the
consideration added to the consideration of
the original obligation (after extension of
payment) is presumed to exist and is lawful.

contract for the sale of land, on the ground of

part performance, all the essential terms of
the contract must be established by
competent proof, and shown to be definite,
certain, clear and unambiguous.

CABAGUE V. AUXILIO For breach of a mutual

promise to marry, the groom may sue the
bride for damages, and evidence of such
ORTEGA V. LEONARDO An oral agreement to mutual promise is admissible.
sell a piece of land is not provable. However,
ARTICLE 1409
where there is partial performance of the
contact of sale, the principle excluding
evidence of parol contracts for the sale of real LAO V. REPUBLIC The Anti-Graft and Corrupt
property will not apply. Some circumstances Practices Act expressly declares null and void
indicating partial performance of an oral a contract which is grossly disadvantageous to
contract
of
sale
of
real
property: the government. It is null and void from the
relinquishment
of
rights,
continued beginning.
possession, building of improvements, tender
of payment, rendition of services, payment of
ARTICLE 1411
taxes and surveying of the land at the buyers
expense.
YU BUAN GUAN V. ONG The principle of in
pari delicto provides that when two parties are
CARBONEL V. PONCIO The Statute of Frauds is equally at fault, the law leaves them as they
applicable only to executory contracts, not to are and denies recovery by either one of
contracts that are totally or partially them. The principle applies to cases where the
performed.
nullity arises from the illegality of the
consideration or the purpose of the contract.
BABAO V. PEREZ Contracts which by their However, this principle does not apply with
terms are not to be performed within one year respect to inexistent and void contracts.
may be taken out of the Statute of Frauds
through performance by one party thereto.
However, in order that a partial performance
of the contract may take the case out of the
operation of the statute, it must appear clear
that the full performance has been made by
one party within one year. Otherwise, the
statute would apply.

ARTICLE 1403

Where the contract is vague and ambiguous,

the doctrine of part performance cannot be
invoked. There can be no part performance
until there is a definite and complete
agreement between the parties. In order to
warrant the specific enforcement of a parol

CIVIL LAW REVIEW 2 (OBLICON) DOCTRINES | ATTY. RUBEN BALANE | MARK JOREL O. CALIDA