Page |1
This duty exists for so long as the passengers are within
ARTICLE 1157
ARTICLE 1161
its premises and where they ought to be in pursuance to
SAGRADA V. NACOCO – The obligation to pay rentals must the contract of carriage.
CAMINOS V. PEOPLE – Reckless imprudence consists in
arise from law, contract, quasi-contract, crime, or
voluntarily but without malice, doing or failing to do an
negligence. A party allowed by the US Alien Property In case of death or injury, a carrier is presumed to have act from which material damage results by reason of
Custodian to occupy and use enemy property is not liable been at fault or been negligent, and by simple proof of inexcusable lack of precaution on the part of the person
to pay rentals to the pre-war owner (even when the injury, the passenger is relieved of the duty to still performing or failing to perform such act, taking into
enemy acquired it by duress) because there was no establish the fault or negligence of the carrier or of its consideration his employment or occupation, degree of
privity of contract or obligation between the Custodian employees and the burden shifts upon the carrier to intelligence, physical condition, and other circumstances
and the enemy owner, the Custodian’s title being based prove that the injury is due to an unforeseen event. The regarding persons, time and place.
common carrier is liable for death of or injury to
by legal provision on the right to seize enemy property.
passengers: (1) through the negligence or wilful acts of its Speeding is indicative of imprudent behavior because a
If the occupant took possession of the property with the employees or (2) on account of willful acts of negligence motorist is bound to exercise such ordinary care and
permission of the Custodian, without any express or of other passengers or of strangers if the common drive at a reasonable rate of speed commensurate with
implied agreement between them that rentals would be carrier’s employees through the exercise of due diligence the conditions encountered on the road.
paid, then none may be recovered by the pre-war owner. could have prevented or stopped the act or omission.
ARTICLE 1159
A contractual obligation can be breached by tort and
when the same act or omission causes the injury, one
resulting in cupla contractual and the other in culpa
contractual, Art. 21941 can well apply. A liability for tort
may arise even under a contract, where tort is that which
breaches the contract.
FGU V. SARMIENTO – In culpa contractual, the mere proof
of the existence of the contact and the failure of its
compliance justify, prima facie, a corresponding right of
relief. In culpa aquiliana, it is required to prove fault or
negligence. In the absence of proof, the driver of a
LG FOODS V. AGRAVIADOR – An act or omission causing
vehicle may not be ordered to pay the injured party.
damage to another may give rise to two separate civil
Under the doctrine of res ipsa loquitur, a defendant is liabilities on the part of the offender: (1) civil liability ex
liable where the thing which caused the injury delicto; and (2) independent civil liabilities. Victims of
complained of is shown to be under the defendant’s negligence or their heirs have a choice between an action
management and the accident is such that, in the to enforce the civil liability arising from culpa criminal
ordinary course of things, cannot be expected to happen and an action for quasi delict.
if those who have its management use proper care. In the
absence of explanation by the defendant, it affords
reasonable evidence that the accident arose from want
of care. It relieves a plaintiff of the burden of producing
specific proof of negligence. Res ipsa loquitur is not
applicable when an unexplained accident may be
attributable to one of several causes, for some of which
the defendant could not be responsible.
If the action is for quasi delict, the plaintiff may hold the
employer liable for the negligent act of its employee,
subject to the employer’s defense of exercise of the
diligence of a good father of a family. If the action is for
culpa criminal, the plaintiff can hold the employer
subsidiarily liable only upon proof of prior conviction of
its employee. The choice is with the plaintiff who makes
known his cause of action in his initiatory pleading or
LRTA V. NATIVIDAD – The law requires common carriers to complaint.
carry passengers safely using the utmost diligence of very
1
cautious person with due regard for all circumstances. Art. 2194. The responsibility of two or more persons who are liable for
quasi-delict is solidary.
ARTICLE 1162
CANGCO V. MRR – It is not negligence per se for a
passenger to alight from a slowly moving train. Failure to
perform a contract cannot be excused upon the ground
that the breach was due to the negligence of a servant of
the obligor, and that the obligor exercised due diligence
in the selection and control of the servant.
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.
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 quasi-delict. 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 employee’s criminal negligence, the employer is
also civilly liable directly and separately for his own civil
2 “legal but rebuttable”
CIVIL LAW REVIEW 2 (OBLICON) DOCTRINES | ATTY. RUBEN BALANE | MARK JOREL O. CALIDA
Page |2
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
employee’s 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.
RAMOS V. CA – Although generally, expert medical
testimony is relied upon in malpractice suits to prove that
a physician has 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.
NOGALES V. CAPITOL MEDICAL – The control test determines
whether an employment relationship exists between a
physician and a hospital based on the exercise of control
over the physician as to details. Specifically, the employer
(or the hospital) must have the right to control both the
means and the details of the process by which the
employee (or the physician) is to accomplish his task.
responsibility of the physician. Modern hospitals now
tend to organize a highly-professional 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
A hospital is not liable for the negligence of an oversee the treatment prescribed and administered by
independent contractor-physician. Nevertheless, the the physicians practicing in its premises.
hospital may be liable if the physician is the “ostensible
agent” of the hospital (also known as the doctrine of PROFESSIONAL V. AGANA – Leaving sponges and other
apparent authority). Under this doctrine, a hospital can foreign substances in the wound after the incision has
be held vicariously liable for the negligent acts of a been closed is at least prima facie negligence by the
physician, regardless of whether he is an independent operating surgeon. In this case, the physician did not
contractor.
inform the patient about the missing two pieces of gauze
and misled her that the pain she was experiencing was
In order to hold the hospital liable under the doctrine of the ordinary consequence of her operation.
apparent authority the following requisites must be
present: (1) the hospital (or its agent) acted in a manner Res ipsa loquitur is not a rule of substantive law. It does
that would lead a reasonable person to conclude that the not per se create or constitute an independent ground of
individual who was alleged to be negligent was an liability, being a mere evidentiary rule. Mere invocation
employee or agent of the hospital; (2) where the acts of of the doctrine does not dispense with the requirement
the agent create the appearance of authority, the of proof of negligence. The elements of res ipsa loquitur
plaintiff must also prove that the hospital had knowledge are: (1) the occurrence of an injury; (2) the thing which
of and acquiesced in them; and (3) the plaintiff acted in caused the injury was under the control and
reliance upon the conduct of the hospital (or its agent) management of the defendant (most important
consistent with ordinary care and prudence.
element); and (3) the occurrence was such that in the
ordinary course of things, would not have happened if
The element of “holding out” does not require an express those who had control or management used proper car;
representation by the hospital that the person alleged to and (4) the absence of explanation by the defendant.
be negligent is an employee. It is sufficient if the hospital
holds itself out as a provider of emergency room care A hospital is estopped from passing the entire blame to
without informing the patient that the care is provided by the physicians whose names it proudly paraded in the
independent contractors. Justifiable reliance is satisfied if public directory leading the public to believe that it
the plaintiff relies upon the hospital to provide complete vouched for their skill and competence.
emergency room care, rather than upon a specific
physician.
adequate facilities and equipment; (2) to select and retain only
Private hospitals hire, fire and exercise real control over
their attending and visiting “consultant” staff. While
“consultants” are not technically employees, the control
exercised, the hiring, and the right to terminate all fulfill
the important hallmarks of an employer-employee
relationship. For the purpose of allocating responsibility
of medical negligence cases, an employer-employee
relationship in effect exists between hospitals and their Under the doctrine of corporate responsibility, 3 the duty
attending and visiting physicians. Hospitals are solidarily of providing quality medical service is no longer the sole
liable for the negligence of its employees.
competent physicians; (3) to oversee as to patient care all persons who
practice medicine within its walls; and (4) to 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
3 The corporate negligence doctrine imposes several duties on a based on the vulnerability of the physically or mentally ill persons and
hospital: (1) to use reasonable care in the maintenance of safe and their inability to provide care for themselves.
CIVIL LAW REVIEW 2 (OBLICON) DOCTRINES | ATTY. RUBEN BALANE | MARK JOREL O. CALIDA
Page |3
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 surgeon’s control.
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
PHIL. HAWK V. TAN – Foreseeability is the fundamental test party cannot be made to pay an obligation the amount of
of negligence. To be negligent, a defendant must have which was not fully explained to it.
acted or failed to act in such a way that an ordinary
reasonable man would have realized that certain
ARTICLE 1170
interests of certain persons were unreasonably subjected
to general but definite class of risks.,
ARRIETA V. NARIC – One who assumes a contractual
obligation and fails to perform it on account of his
ARTICLE 1169
inability to meet certain bank requirements which
inability he knew and was aware of when he entered into
LORENZO SHIPPING V. BJ MARTHEL – When the time of the contract, should be held liable in damages for breach
delivery is not fixed or is stated in general and indefinite of contract. The phrase “in any manner contravene the
terms, time is not of the essence of the contract. In such tenor” of the obligation includes any illicit task which
cases, the delivery must be made within a reasonable impairs the strict and faithful fulfillment of the obligation,
time. Even where time is of the essence, a breach of the or every kind of defective performance.
contract in that respect by one of the parties may be
waived by the other party’s subsequently treating the TELEFAST V. CASTRO – When a party does not do what is
contract as still in force. A party that accepts the items incumbent upon him, despite performance by the other
when these were delivered to its warehouse indisputably of his obligation by paying the required charges, the
waives the claimed delay in the delivery of the said items. infractor is guilty of contravening its obligations and is
liable for damages.
The act of a party in treating a contract as resolved on
account of infractions by the other contracting party LEGASPI OIL V. CA – Fraud is the voluntary execution of a
must be made known to the other and is always wrongful act, or a wilful omission, knowing and intending
provisional, subject to judicial review. If the other party the effects which naturally and necessarily arise from
denied that rescission is justified, it is free to resort to such act or omission. Under Art. 1170, it is the deliberate
judicial action.
and intentional evasion of the normal fulfillment of
obligations. It is distinguished from negligence by the
BPI V. CA – The law expressly provides that demand is not presence of deliberate intent, which is lacking in
necessary under certain circumstances, and one of these negligence.
circumstances is when the parties expressly waive
demand.
ARTICLE 1173
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.
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.
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 person’s 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.
JIMENEZ V. CITY OF MANILA – Provinces, cities and
ARTICLE 1191
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 UFC V. CA – The general rule is that rescission of a
other public works under their control or supervision. It is contract will not be permitted for a slight or casual
not necessary that it belongs to the province, city or breach, but only for such substantial and fundamental
CIVIL LAW REVIEW 2 (OBLICON) DOCTRINES | ATTY. RUBEN BALANE | MARK JOREL O. CALIDA
Page |4
breach as would defeat the very object of the parties in
ARTICLE 1216
making the agreement. The question of whether a breach
is substantial depends upon the attendant circumstances. PNB V. INDEPENDENT PLANTERS – Art. 1216 gives the creditor
the right to proceed against anyone of the solidary
JBL CONCURRING OPINION – A rescission for breach under debtors or some or all of them simultaneously. The
Art. 1191 (resolution) is not predicated on injury to choice is undoubtedly left to the solidary creditor to
economic interests of the plaintiff but on the breach of determine against whom he will enforce collection. In
faith by the defendant, that violates the reciprocity case of the death of one of the solidary debtors, the
between the parties. Rescission is not a subsidiary action, creditor may, if he so chooses, proceed against the
it is a principal action retaliatory in character. On the surviving solidary debtors without necessity of filing a
other hand, Art. 1381 (rescission) is subordinated to the claim in the estate of the decease debtor. It is not
existence of that prejudice, because it is the raison ‘etre mandatory for the creditor to have the case dismissed
and measure of the right to rescind.
against the surviving debtors and file its claim in the
estate of the deceased solidary debtor.
MAGDALENA V. MYRICK – Where a party cancels the
contract, advises the other party that he has been
ARTICLE 1226
relieved of his obligations therein, and led said party to
believe and act upon such belief, he may not be COUNTRY BANKERS V. CA – A provision which calls for the
permitted to repudiate his representations, or occupy forfeiture of the remaining deposit still in the possession
inconsistent positions.
of the lessor, without prejudice to any other obligation
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.
UP V. DE LOS ANGELES – There is nothing in the law that
prohibits the parties from entering into an agreement
that violation of the terms of the contract would cause
cancellation thereof, even without court intervention. It
is not always necessary for the injured party to resort to
court for rescission of the contract.
ARTICLE 1207
still owing, in the event of the termination or cancellation
of the agreement by reason of the lessee’s 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
RONQUILLA V. CA – When the obligors bind themselves to the freedom of the parties to agree on such terms and
pay their obligation “individually and jointly,” it is conditions as they see fit as long as they are not contrary
enforceable against one of the numerous obligors.
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 and purpose of the penalty; nature of
the obligation; mode of breach and its consequences;
supervening realities; standing and relationship of the
parties).
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.
CIVIL LAW REVIEW 2 (OBLICON) DOCTRINES | ATTY. RUBEN BALANE | MARK JOREL O. CALIDA
Page |5
ARTICLE 1249
TIBAJIA V. CA – A check is not legal tender and a creditor
may validly refuse payment by check, whether it be a
manager’s, cashier’s or personal check.
period, the effects of extraordinary inflation, if that be An action for interpleader is proper when the lessee does
the case, are not to be applied.
not know to whom payment of rentals should be made
due to conflicting claims on the property or on the right
Art. 1250 provides that the value of the peso at the time to collect.
of the establishment of the obligation shall control and
be the basis of payment of the contractual obligation, GO V. CA – A refusal without just cause is not equivalent
unless there is an “agreement to the contrary.” Only to payment; to have the effect of payment and the
when there is a contrary agreement that extraordinary consequent extinguishment of the obligation to pay, the
inflation will make the value of the currency at the time law requires the companion acts of tender of payment
of payment becomes the basis for payment.
and consignation.
CITIBANK V. SABENIANO – A check, whether manager’s 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
ARTICLE 1256
obligation under a judgment. The obligation is not
extinguished and remains suspended until the payment
by commercial document is actually realized.
SOCO V. MILITANTE – The requisites of a valid consignation
must be mandatorily and fully complied with (Arts. 1256
BPI V. ROXAS – A cashier’s check is really the bank’s own to 1261). The debtor must show: (1) there was a debt
check and may be treated as a promissory note with the due; (2) the consignation of the obligation had been
bank as the maker. The check becomes the primary made because the creditor to whom tender of payment
obligation of the bank which issues it and constitutes a was refused to accept it, or because he was absent or
written promise to pay upon demand. The court has incapacitated, or because several persons claimed to be
previously taken judicial notice of the “well-known and entitled to receive the amount; (3) the previous notice of
accepted practice in the business sector that a cashier’s the consignation had been given to the person interested
check is deemed as cash.” This is because the mere in the performance of the obligation; (4) the amount due
issuance of a cashier’s check is considered acceptance was placed at the disposal of the court; and (5) after the
thereof.
consignation had been made the person interested was
notified thereof. Failure in any is enough ground to
render a consignation ineffective.
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 be assumed;
he who alleges the existence of such phenomenon must
prove the same.
Absent an official declaration by competent authorities of
the existence of extraordinary inflation during a given
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 profitable, or unexpectedly
burdensome.
OCCENA V. JABSON – Art. 1267 does not grant the courts
the authority to remake, modify or revise the contract or
to fix the division of shares between the parties as
Tender of payment is the antecedent of consignation, contractually stipulated with the force of law between
that is, an act preparatory to the consignation, which is the parties, so as to substitute its own terms for those
the principal, and from which are derived the immediate covenanted by the parties themselves.
consequences which the debtor seeks to obtain. Tender
of payment may be extrajudicial, while consignation is NAGA TELEPHONE V. CA – Art. 1267 speaks of “service”
necessarily judicial, and the priority of the first is the which has become so difficult. Taking into consideration
attempt to make a private settlement before proceeding the rationale behind this provision, the term “service”
to the solemnities of consignation.
should be understood as referring to the “performance”
of the obligation. It is not required that the contract be
PASRICHA V. LUIS – The rationale for consignation is to avid for future service with future unusual charge.
the performance of an obligation becoming more
onerous to the debtor by reason of causes not imputable Under the doctrine of rebus sic stantibus, the parties
to him. Tender of payment must be accompanied by stipulate in the light of certain prevailing conditions, and
consignation in order that the effects of payment may be once these conditions cease to exist the contract also
produced.
ceases to exist. The disappearance of the basis of a
CIVIL LAW REVIEW 2 (OBLICON) DOCTRINES | ATTY. RUBEN BALANE | MARK JOREL O. CALIDA
Page |6
contract gives rise to a right to relief in favor of the party contrary to public policy, and null and void. Scholarships
prejudiced.
are awarded in recognition of merit and to help gifted
students, in whom society has an established interest or
MAGAT V. CA – A party cannot be faulted when his a first lien, and not to keep outstanding students in
inability to secure a letter of credit and to comply with his school to bolster its prestige and increase its business
obligation was a direct consequence of the denial of the potential.
permit to import.
SAURA V. SINDICO – Among those that may not be the
object of contracts are certain rights of individuals, which
ARTICLE 1291
the law and public policy have deemed wise to exclude
FOUNDATION V. BETONVAL – Novation is done by the from the commerce of man. Among these are the
substitution or change of the obligation by a subsequent political rights conferred upon citizens (i.e. right to vote
one which extinguishes the first, either by changing the and be voted for). Therefore, such rights may not be
object or principal conditions, or by substituting the bargained away or surrendered for consideration by the
person of the debtor, or by subrogating a third person in citizen or unduly curtailed with impunity, for they are
the rights of the creditor. The obligation to pay a sum of conferred not for individual or private benefit or
money is not novated by an instrument that expressly advantage but for the public good and interest.
recognizes the old, changes only the terms of payment,
adds other obligations not incompatible with the old REGINO V. PANGASINAN – The relationship between the
ones or the new contract merely supplements the old school and student is contractual and reciprocal in
nature. The school undertakes to provide students with
one.
education sufficient to enable them to pursue higher
education or profession. On the other hand, the students
ARTICLE 1306
agree to abide by the academic requirements of the
REPUBLIC V. PLDT – Parties cannot be coerced to enter into school and to serve its rules and regulations.
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.
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 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 employee’s spouse.
The policy may not facially violate Art. 136 of the Labor
Code5 but it creates a disproportionate effect and under
the disparate impact theory, the only way it could pass
judicial scrutiny is a showing that it is a reasonable.
ACOL V. PCCCI – A stipulation6 in credit card application
form that provides that the effectivity of the cancellation
of the lost card rests on an act entirely beyond the
The terms of the school-student contract are defined at control of the cardholder is contrary to public policy.
the moment of its inception upon enrolment of the
student. Standards of academic performance and the
code of behavior and discipline are usually set forth in
manuals distributed to new students at the start of every 4 To justify a bona fide occupational qualification, the employer must
school year. A fee that was not part of the school-student prove two factors: (1) the employment qualification is reasonably
related to the essential operation of the job involved; and (2) there is a
contract entered into at the start of the school year could factual basis for believing that all or substantially all persons meeting
not be unilaterally imposed to the prejudice of the the qualification would be unable to properly perform the duties of the
job.
enrolees.
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
DUNCAN V. GLAXO – A company policy prohibiting an
compensation is paid therefor.
employee from having a relationship with an employee of
CUI V. ARELLANO – The stipulation in a contract, between a a competitor company is a valid exercise of management
student and the school, that the student’s scholarship is prerogative. It has a right to guard its trade secrets,
good only if he continues in the same school, and that he manufacturing formulas, marketing strategies and other
waives his right to transfer to another school without confidential programs and information from competitors.
refunding the equivalent of his scholarship in cash, is
The equal protection clause is addressed only to the State
or those acting under color of its authority.
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 “Holder’s 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 |7
The phrase “after a reasonable time” gives the issuer the
opportunity to actually profit from unauthorized charges
despite receipt of immediate written notice from the
card holder. A card holder could have theoretically done
everything in his power to give the issuer the required
written notice. But if the issuer took a “reasonable” time
(which could be indefinite) 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.
AZNAR V. CITIBANK – A stipulation in a credit card
agreement which limits the card company’s 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 larger amount even though
damage may be clearly proven.
ARTICLE 1308
SAMPAGUITA V. PNB – The “unilateral determination and
imposition” of increased rates is violates the principle of
mutuality of contracts ordained in Art. 1308. One-sided
impositions do not have the force of law between the
parties, because such imposition is not based on the
parties’ essential equality.
Although escalation clauses are valid, giving a bank an
unbridled right to adjust the interest independently and
upwardly would completely take away the right to assent
to an important modification in their agreement and
would also negate the element of mutuality in their
contracts.
ARTICLE 1311
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.
in favor of a third person; (2) stipulation must be a part,
not the 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.
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
UY V. CA – Where an agent is not a beneficiary of a since it has failed to reach its own perfection stage.
stipulation pour autrui, the fact that he did not obtain his However, the optioner (offeror) renders himself liable for
commissions or recoup his advances because of the non- damages for breach of the option.
performance of the contract does not entitle him to file
an action against the buyer.
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
ARTICLE 1324
right of withdrawal on the part of the optionee (offeree),
SANCHEZ V. RIGOS – In accepted unilateral promise to sell, the main contract could be deemed perfected.
since there may be no valid contract without a cause or
consideration, the promisor is not bound by his promise EQUATORIAL V. MAYFAIR – The deed of option or the option
and may, accordingly, withdraw it. Pending notice of its clause in a contract, in order to be valid and enforceable,
withdrawal, his accepted promise partakes, however, of must, among other things, indicate the definite price at
the nature of an offer to sell which, if accepted, results in which the person granting the option is willing to sell.
a perfected contract of sale.
The option is not the contract of sale itself. The optionee
ANG YU V. CA – Where a period is given to the offeree (offeree) has the right, but not the obligation, to buy.
within which to accept the offer, the following rules Once the option is exercised timely, a bilateral promise to
sell and to buy ensues and both parties are then
generally govern:
reciprocally bound to comply with their respective
If the period is not itself supported by a consideration, undertakings.
the offeror is still free and has the right to withdraw the
offer before its acceptance. The same rule applies if an BIBLE BAPTIST V. CA – An option contract needs to be
acceptance has been made but before the offeror’s supported by a separate consideration. The consideration
coming to know of such acceptance. In both instances, need not be monetary but could consist of other things
the withdrawal must be communicated to the offeree. or undertakings. However, if the consideration is not
Nevertheless, the right to withdraw must not be monetary: (1) these must be things or undertakings of
exercised arbitrarily. Otherwise, it could give rise to value, in view of the onerous nature of the contract of
option; and (2) said consideration must be clearly
damages under Art. 19 of the Civil Code.7
specified as such in the option contract or clause.
VILLEGAS V. CA – Where a time is stated in an offer for its
BALUYOT V. CA – The following requisites must be present 7 Art. 19. Every person must, in the exercise of his rights and the acceptance, the offer is terminated at the expiration of
in order to have a stipulation pour autrui: (1) stipulation performance of his duties, act with justice, give everyone his due, and the time given for its acceptance. The offer may also be
observe honesty and good faith.
CIVIL LAW REVIEW 2 (OBLICON) DOCTRINES | ATTY. RUBEN BALANE | MARK JOREL O. CALIDA
Page |8
terminated when the person to whom the offer is made property: relinquishment of rights, continued possession,
either rejects the offer outright or makes a counter-offer building of improvements, tender of payment, rendition
of his own.
of services, payment of taxes and surveying of the land at
the buyer’s expense.
EULOGIO V. APELES – An option is not of itself a purchase,
but merely secures the privilege to buy. It is not a sale of CARBONEL V. PONCIO – The Statute of Frauds is applicable
property but sale of the right to purchase. Its only to executory contracts, not to contracts that are
distinguishing characteristic is that it imposes no binding totally or partially performed.
obligation on the person holding the option, aside from
the consideration for the offer.
BABAO V. PEREZ – Contracts which by their terms are not to
be performed within one year may be taken out of the
Statute of Frauds through performance by one party
ARTICLE 1345
thereto. However, in order that a partial performance of
PAYONGAYONG V. CA – Simulation occurs when an the contract may take the case out of the operation of
apparent contract is a declaration of a fictitious will, the statute, it must appear clear that the full
deliberately made by agreement of the parties, in order performance has been made by one party within one
to produce, for the purpose of deception, the appearance year. Otherwise, the statute would apply.
of a juridical act which does not exist or is different from
that which was really executed. Its basic characteristic is Where the contract is vague and ambiguous, the doctrine
that it is not really intended to produce legal effects or of part performance cannot be invoked. There can be no
does not in any way alter the juridical situation of the part performance until there is a definite and complete
agreement between the parties. In order to warrant the
parties.
specific enforcement of a parol contract for the sale of
Its requisites are: (1) an outward declaration of will land, on the ground of part performance, all the essential
different from the will of the parties; (2) false appearance terms of the contract must be established by competent
must have been intended by mutual agreement; and (3) proof, and shown to be definite, certain, clear and
unambiguous.
purpose is to deceive third persons.
law leaves them as they are and denies recovery by
either one of them. The principle applies to cases where
the nullity arises from the illegality of the consideration
or the purpose of the contract. However, this principle
does not apply with respect to inexistent and void
contracts.
CABAGUE V. AUXILIO – For breach of a mutual promise to
marry, the groom may sue the bride for damages, and
LAW V. OLYMPIC SAWMILL – Unless the debtor proves the evidence of such mutual promise is admissible.
contrary in a hearing, the consideration added to the
ARTICLE 1409
consideration of the original obligation (after extension of
payment) is presumed to exist and is lawful.
LA’O V. REPUBLIC – The Anti-Graft and Corrupt Practices
Act expressly declares null and void a contract which is
ARTICLE 1403
grossly disadvantageous to the government. It is null and
ORTEGA V. LEONARDO – An oral agreement to sell a piece of void from the beginning.
ARTICLE 1354
land is not provable. However, where there is partial
ARTICLE 1411
performance of the contact of sale, the principle
excluding evidence of parol contracts for the sale of real
property will not apply. Some circumstances indicating YU BUAN GUAN V. ONG – The principle of in pari delicto
partial performance of an oral contract of sale of real provides that when two parties are equally at fault, the
CIVIL LAW REVIEW 2 (OBLICON) DOCTRINES | ATTY. RUBEN BALANE | MARK JOREL O. CALIDA