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ARTICLE 1157 exercise of the diligence of a good father of a

LRTA V. NATIVIDAD – The law requires common family. If the action is for culpa criminal, the
SAGRADA V. NACOCO – The obligation to pay rentals carriers to carry passengers safely using the utmost plaintiff can hold the employer subsidiarily liable
must arise from law, contract, quasi-contract, diligence of very cautious person with due regard only upon proof of prior conviction of its employee.
crime, or negligence. A party allowed by the US for all circumstances. This duty exists for so long as The choice is with the plaintiff who makes known
Alien Property Custodian to occupy and use enemy the passengers are within its premises and where his cause of action in his initiatory pleading or
property is not liable to pay rentals to the pre-war they ought to be in pursuance to the contract of complaint.
owner (even when the enemy acquired it by duress) carriage. ARTICLE 1161
because there was no privity of contract or
obligation between the Custodian and the enemy In case of death or injury, a carrier is presumed to CAMINOS V. PEOPLE – Reckless imprudence consists in
owner, the Custodian’s title being based by legal have been at fault or been negligent, and by simple voluntarily but without malice, doing or failing to
provision on the right to seize enemy property. proof of injury, the passenger is relieved of the duty do an act from which material damage results by
to still establish the fault or negligence of the reason of inexcusable lack of precaution on the part
If the occupant took possession of the property with carrier or of its employees and the burden shifts of the person performing or failing to perform such
the permission of the Custodian, without any upon the carrier to prove that the injury is due to act, taking into consideration his employment or
express or implied agreement between them that an unforeseen event. The common carrier is liable occupation, degree of intelligence, physical
rentals would be paid, then none may be recovered for death of or injury to passengers: (1) through the condition, and other circumstances regarding
by the pre-war owner. negligence or wilful acts of its employees or (2) on persons, time and place.
account of willful acts of negligence of other
passengers or of strangers if the common carrier’s Speeding is indicative of imprudent behavior
ARTICLE 1159 employees through the exercise of due diligence because a motorist is bound to exercise such
could have prevented or stopped the act or ordinary care and drive at a reasonable rate of
FGU V. SARMIENTO – In culpa contractual, the mere omission. speed commensurate with the conditions
proof of the existence of the contact and the
failure of its compliance justify, prima facie, a encountered on the road.
A contractual obligation can be breached by tort
corresponding right of relief. In culpa aquiliana, it
and when the same act or omission causes the
is required to prove fault or negligence. In the ARTICLE 1162
injury, one resulting in cupla contractual and the
absence of proof, the driver of a vehicle may not beother in culpa contractual, Art. 2194 can well
1
ordered to pay the injured party. apply. A liability for tort may arise even under a CANGCO V. MRR – It is not negligence per se for a
contract, where tort is that which breaches the passenger to alight from a slowly moving train.
Under the doctrine of res ipsa loquitur, a contract. Failure to perform a contract cannot be excused
defendant is liable where the thing which caused upon the ground that the breach was due to the
the injury complained of is shown to be under the LG FOODS V. AGRAVIADOR – An act or omission causing negligence of a servant of the obligor, and that the
defendant’s management and the accident is such damage to another may give rise to two separate obligor exercised due diligence in the selection and
that, in the ordinary course of things, cannot be civil liabilities on the part of the offender: (1) civil control of the servant.
expected to happen if those who have its liability ex delicto; and (2) independent civil
management use proper care. In the absence of liabilities. Victims of negligence or their heirs have VIRON V. DE LOS SANTOS – When the employee causes
explanation by the defendant, it affords reasonable a choice between an action to enforce the civil damage due to his own negligence while performing
evidence that the accident arose from want of liability arising from culpa criminal and an action his own duties, there arises the juris tantum2
care. It relieves a plaintiff of the burden of for quasi delict. presumption that the employer is negligent,
producing specific proof of negligence. Res ipsa rebuttable only by proof observance of the
loquitur is not applicable when an unexplained If the action is for quasi delict, the plaintiff may diligence of a good father of a family.
accident may be attributable to one of several hold the employer liable for the negligent act of its
causes, for some of which the defendant could not employee, subject to the employer’s defense of CEREZO V. TUASON – An action based on a quasi-delict
be responsible. may proceed independently from the criminal

1 Art. 2194. The responsibility of two or more persons who are liable for quasi-delict is solidary.

2 “legal but rebuttable”

CIVIL LAW REVIEW 2 (OBLICON) DOCTRINES | ATTY. RUBEN BALANE | MARK JOREL O. CALIDA
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action. There is, however, a distinction between involves the merits of a diagnosis or of a scientific plaintiff acted in reliance upon the conduct of the
civil liability arising from a delict a civil liability treatment. hospital (or its agent) consistent with ordinary care
arising from a quasi-delict. The choice of remedy and prudence.
affects the procedural and jurisdictional issues of Private hospitals hire, fire and exercise real control
the action. over their attending and visiting “consultant” staff. The element of “holding out” does not require an
While “consultants” are not technically employees, express representation by the hospital that the
While the employer is civilly liable in a subsidiary the control exercised, the hiring, and the right to person alleged to be negligent is an employee. It is
capacity for the employee’s criminal negligence, terminate all fulfill the important hallmarks of an sufficient if the hospital holds itself out as a
the employer is also civilly liable directly and employer-employee relationship. For the purpose of provider of emergency room care without informing
separately for his own civil negligence in failing to allocating responsibility of medical negligence the patient that the care is provided by
exercise due diligence in selecting and supervising cases, an employer-employee relationship in effect independent contractors. Justifiable reliance is
his employee. To hold the employer liable in a exists between hospitals and their attending and satisfied if the plaintiff relies upon the hospital to
subsidiary capacity under a delict, the aggrieved visiting physicians. Hospitals are solidarily liable for provide complete emergency room care, rather
party must initiate a criminal action where the the negligence of its employees. than upon a specific physician.
employee’s delict and corresponding primary
liability are established. NOGALES V. CAPITOL MEDICAL – The control test Under the doctrine of corporate responsibility,3 the
determines whether an employment relationship duty of providing quality medical service is no
LG FOODS V. AGRAVIADOR – Supra. exists between a physician and a hospital based on longer the sole responsibility of the physician.
the exercise of control over the physician as to Modern hospitals now tend to organize a highly-
MINDANAO V. PHOENIX – An arrastre operator is details. Specifically, the employer (or the hospital) professional medical staff whose competence and
required to observe the same degree of diligence must have the right to control both the means and performance need also to be monitored by the
required of a common carrier and a warehouseman. the details of the process by which the employee hospital commensurate with its inherent
As the custodian of the goods discharged from a (or the physician) is to accomplish his task. responsibility to provide quality medical care. Such
vessel, an arrastre operator's duty is to take good responsibility includes the proper supervision of the
care of the goods and to turn them over to the A hospital is not liable for the negligence of an members of its medical staff. Accordingly, the
party entitled to their possession. independent contractor-physician. Nevertheless, hospital has the duty to make a reasonable effort to
the hospital may be liable if the physician is the monitor and oversee the treatment prescribed and
RAMOS V. CA – Although generally, expert medical “ostensible agent” of the hospital (also known as administered by the physicians practicing in its
testimony is relied upon in malpractice suits to the doctrine of apparent authority). Under this premises.
prove that a physician has done a negligent act or doctrine, a hospital can be held vicariously liable
that he has deviated from the standard medical for the negligent acts of a physician, regardless of PROFESSIONAL V. AGANA – Leaving sponges and other
procedure, when the doctrine of res ipsa loquitur is whether he is an independent contractor. foreign substances in the wound after the incision
availed by the plaintiff, the need for expert has been closed is at least prima facie negligence
medical testimony is dispensed with because the In order to hold the hospital liable under the by the operating surgeon. In this case, the physician
injury itself proves the proof of negligence. doctrine of apparent authority the following did not inform the patient about the missing two
Nevertheless, res ipsa loquitur does not requisites must be present: (1) the hospital (or its pieces of gauze and misled her that the pain she
automatically apply to all cases of medical agent) acted in a manner that would lead a was experiencing was the ordinary consequence of
negligence. It is restricted to malpractice cases reasonable person to conclude that the individual her operation.
where a layman is able to say, as a matter of who was alleged to be negligent was an employee
common knowledge and observation, that the or agent of the hospital; (2) where the acts of the Res ipsa loquitur is not a rule of substantive law. It
consequences of professional care were not as such agent create the appearance of authority, the does not per se create or constitute an independent
as would ordinarily have followed if due care had plaintiff must also prove that the hospital had ground of liability, being a mere evidentiary rule.
been exercised. It is not applicable in a suit which knowledge of and acquiesced in them; and (3) the Mere invocation of the doctrine does not dispense

3 The corporate negligence doctrine imposes several duties on a hospital: (1) to use reasonable care in the maintenance of safe and adequate facilities and equipment; (2) to select and retain only
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 based on the vulnerability of the physically or
mentally ill persons and their inability to provide care for themselves.
CIVIL LAW REVIEW 2 (OBLICON) DOCTRINES | ATTY. RUBEN BALANE | MARK JOREL O. CALIDA

with the requirement of proof of negligence. The
elements of res ipsa loquitur are: (1) the
occurrence of an injury; (2) the thing which caused
the injury was under the control and management
of the defendant (most important element); and (3)
the occurrence was such that in the ordinary course
of things, would not have happened if those who
had control or management used proper car; and
(4) the absence of explanation by the defendant.
A hospital is estopped from passing the entire
blame to the physicians whose names it proudly
paraded in the public directory 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 surgeon’s
control.
P HIL . H AWK V . T AN – 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 class of risks.,
ARTICLE 1169
LORENZO SHIPPING V. BJ MARTHEL – When the time of
delivery is not fixed or is stated in general and
indefinite terms, time is not of the essence of the
contract. In such cases, the delivery must be made
within a reasonable time. Even where time is of the
essence, a breach of the contract in that respect by
one of the parties may be waived by the other
party’s subsequently treating the contract as still in
force. A party that accepts the items when these
were delivered to its warehouse indisputably waives
the claimed delay in the delivery of the said items.
The act of a party in treating a contract as resolved
on account of infractions by the other contracting
party must be made known to the other and is
always provisional, subject to judicial review. If the
CIVIL LAW REVIEW 2 (OBLICON) DOCTRINES | ATTY. RUBEN BALANE | MARK JOREL O. CALIDA
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other party denied that rescission is justified, it is evasion of the normal fulfillment of obligations. It
free to resort to judicial action. is distinguished from negligence by the presence of
deliberate intent, which is lacking in negligence.
BPI V. CA – The law expressly provides that demand
is not necessary under certain circumstances, and ARTICLE 1173
one of these circumstances is when the parties
expressly waive demand. JIMENEZ V. CITY OF MANILA – Provinces, cities and
municipalities are liable for damages for the death
ASJ V. EVANGELISTA – Reciprocal obligations are those of, or injury suffered by any person by reason of
which arise from the same cause, wherein each the defective condition of roads, streets bridges,
party is a debtor and a creditor of the other, such public buildings, and other public works under their
that performance is conditioned upon the control or supervision. It is not necessary that it
simultaneous fulfillment of the other. From the belongs to the province, city or municipality for
moment a party fulfills his obligations, delay by the liability to attach, what is required is it has either
other party begins. “control or supervision” over the public building in
RAQUEL-SANTOS V. CA – A debt is liquidated when the question.
amount is known or determinable by inspection of
the terms and conditions of relevant documents. ARTICLE 1174
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 NAKPIL & SONS V. CA – To exempt the obligor from
to pay an obligation the amount of which was not liability for a breach of an obligation due to an “act
of God,” the following must concur: (1) the cause
fully explained to it.
of the breach of the obligation must be
independent of the will of the debtor; (2) the event
ARTICLE 1170 must be either unforeseeable or unavoidable; (3)
the event must be such as to render it impossible
ARRIETA V. NARIC – One who assumes a contractual for the debtor to fulfil his obligation in a normal
obligation and fails to perform it on account of his manner; (4) the debtor must be free from any
inability to meet certain bank requirements which participation in, or aggravation of the injury to the
inability he knew and was aware of when he creditor.
entered into the contract, should be held liable in
damages for breach of contract. The phrase “in any A construction company is negligent when
manner contravene the tenor” of the obligation substantial deviations from the plans and
includes any illicit task which impairs the strict and specifications are made, and when it failed to
faithful fulfillment of the obligation, or every kind observe the requisite workmanship in the
of defective performance. construction as well as to exercise the requisite
degree of supervision. The architects are also
TELEFAST V. CASTRO – When a party does not do what negligent when there are inadequacies or defects in
is incumbent upon him, despite performance by the the plans and specifications prepared by them. One
other of his obligation by paying the required who negligently creates a dangerous condition
charges, the infractor is guilty of contravening its cannot escape liability for the natural and probable
obligations and is liable for damages. consequences thereof, although the act of a third
person, or an act of God for which he is not
LEGASPI OIL V. CA – Fraud is the voluntary execution responsible, intervenes to precipitate the loss.
of a wrongful act, or a wilful omission, knowing and
intending the effects which naturally and MINDEX V. MORILLO – In order for a fortuitous event
necessarily arise from such act or omission. Under to exempt one from liability, it is necessary that
Art. 1170, it is the deliberate and intentional one has committed no negligence or misconduct
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that may have occasioned the loss. When the effect contract would cause cancellation thereof, even the agreed penalty; and (3) the obligor is guilty of
is found to be partly the result of a person’s without court intervention. It is not always fraud.
participation (whether by active intervention, necessary for the injured party to resort to court
neglect or failure to act) the whole occurrence is for rescission of the contract. ARTICLE 1229
humanized and removed from the rules applicable
to acts of God. ARTICLE 1207 LO V. CA – Generally, courts are not at liberty to
ignore the freedom of the parties to agree on such
ARTICLE 1191 R ONQUILLA V . CA – When the obligors bind terms and conditions as they see fit as long as they
themselves to pay their obligation “individually and are not contrary to law, morals, good customs,
UFC V. CA – The general rule is that rescission of a jointly,” it is enforceable against one of the public order or public policy. Nevertheless, courts
contract will not be permitted for a slight or casual numerous obligors. may equitably reduce a stipulated penalty in the
breach, but only for such substantial and contract if it is iniquitous or unconscionable, or if
fundamental breach as would defeat the very ARTICLE 1216 the principal obligation has been partly or
object of the parties in making the agreement. The irregularly complied with. Whether or not a
question of whether a breach is substantial depends PNB V. INDEPENDENT PLANTERS – Art. 1216 gives the penalty is reasonable or iniquitous is addressed to
upon the attendant circumstances. creditor the right to proceed against anyone of the the discretion of the court and depends on several
solidary debtors or some or all of them factors (i.e. type, extent and purpose of the
JBL CONCURRING OPINION – A rescission for breach simultaneously. The choice is undoubtedly left to penalty; nature of the obligation; mode of breach
under Art. 1191 (resolution) is not predicated on the solidary creditor to determine against whom he and its consequences; supervening realities;
injury to economic interests of the plaintiff but on will enforce collection. In case of the death of one standing and relationship of the parties).
the breach of faith by the defendant, that violates of the solidary debtors, the creditor may, if he so
the reciprocity between the parties. Rescission is chooses, proceed against the surviving solidary ARTICLE 1231
not a subsidiary action, it is a principal action debtors without necessity of filing a claim in the
retaliatory in character. On the other hand, Art. estate of the decease debtor. It is not mandatory SAURA V. DBP – Where after the approval of his loan,
1381 (rescission) is subordinated to the existence of for the creditor to have the case dismissed against the borrower, instead of insisting for its release,
that prejudice, because it is the raison ‘etre and the surviving debtors and file its claim in the estate asked that the mortgage given as security be
measure of the right to rescind. of the deceased solidary debtor. cancelled and the creditor acceded thereto, the
action taken by both parties was in the nature of
MAGDALENA V. MYRICK – Where a party cancels the mutual desistance. If mutual agreement can make a
ARTICLE 1226
contract, advises the other party that he has been contract, mutual disagreement by the parties can
relieved of his obligations therein, and led said
COUNTRY BANKERS V. CA – A provision which calls for cause its extinguishment.
party to believe and act upon such belief, he may
the forfeiture of the remaining deposit still in the
not be permitted to repudiate his representations,
possession of the lessor, without prejudice to any ARTICLE 1244
or occupy inconsistent positions.
other obligation still owing, in the event of the
termination or cancellation of the agreement by CATHAY PACIFIC V. VAZQUEZ – Passengers have every
The remedies under Art. 1191 are alternative. A
reason of the lessee’s breach is a penal cause that right to decline an upgrade and insist on their
party that elects to cancel a contract cannot avail
may be validly entered into. A penal clause is an booked accommodations. Upgrades should not be
himself of exacting performance. As a consequence
accessory obligation which the parties attach to a imposed on passengers over their vehement
of resolution, the parties should be restored, as far
principal obligation for the purpose of insuring the objection. By insisting on the upgrade, a common
as practicable, to their original situations by
performance thereof by imposing on the debtor a carrier breaches its obligation.
returning the things which were the object of the
special prestation in case the obligation is not
contract, with their fruits and of the price with its
fulfilled or is irregularly or inadequately fulfilled. ARTICLE 1245
interest computed from the date of the institution
of the action.
As a general rule, the penalty shall substitute the LO V. KJS – In dacion en pago, the debtor offers
UP V. DE LOS ANGELES – There is nothing in the law indemnity for damages and the payment of interest another thing to the creditor who accepts it as
that prohibits the parties from entering into an in case of non-compliance. However, there are equivalent of payment of an outstanding debt. The
agreement that violation of the terms of the exceptions to this: (1) there is a stipulation to the following are the requisites: (1) performance of the
contrary; (2) the obligor is sued for refusal to pay
CIVIL LAW REVIEW 2 (OBLICON) DOCTRINES | ATTY. RUBEN BALANE | MARK JOREL O. CALIDA

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.
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.
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 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 cashier’s check is really the bank’s
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 cashier’s check is deemed as
cash.” This is because the mere issuance of a
cashier’s 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
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establishment of the obligation. Extraordinary
inflation can never be assumed; he who alleges the PASRICHA V. LUIS – The rationale for consignation is
existence of such phenomenon must prove the to avid the performance of an obligation becoming
same. more onerous to the debtor by reason of causes not
imputable to him. Tender of payment must be
Absent an official declaration by competent accompanied by consignation in order that the
authorities of the existence of extraordinary effects of payment may be produced.
inflation during a given period, the effects of An action for interpleader is proper when the lessee
extraordinary inflation, if that be the case, are not does not know to whom payment of rentals should
to be applied. be made due to conflicting claims on the property
or on the right to collect.
Art. 1250 provides that the value of the peso at the
time of the establishment of the obligation shall GO V. CA – A refusal without just cause is not
control and be the basis of payment of the equivalent to payment; to have the effect of
contractual obligation, unless there is an payment and the consequent extinguishment of the
“agreement to the contrary.” Only when there is a obligation to pay, the law requires the companion
contrary agreement that extraordinary inflation will acts of tender of payment and consignation.
make the value of the currency at the time of
payment becomes the basis for payment. ARTICLE 1267
ARTICLE 1256 LAGUNA V. MANABAT – Performance is not excused by
subsequent inability to perform, unforeseen
SOCO V. MILITANTE – The requisites of a valid difficulties, unusual or unexpected expenses,
consignation must be mandatorily and fully danger, inevitable accident, breaking of machinery,
complied with (Arts. 1256 to 1261). The debtor strikes, sickness, failure of a party to avail himself
must show: (1) there was a debt due; (2) the of the benefits to be had under the contract,
consignation of the obligation had been made weather conditions, financial stringency, or
because the creditor to whom tender of payment stagnation of business. Neither is performance
was refused to accept it, or because he was absent excused by the fact that the contract turns out to
or incapacitated, or because several persons be hard and improvident, unprofitable or
claimed to be entitled to receive the amount; (3) impracticable, ill-advised or even foolish, less
the previous notice of the consignation had been profitable, or unexpectedly burdensome.
given to the person interested in the performance
of the obligation; (4) the amount due was placed at OCCENA V. JABSON – Art. 1267 does not grant the
the disposal of the court; and (5) after the courts the authority to remake, modify or revise
consignation had been made the person interested the contract or to fix the division of shares between
was notified thereof. Failure in any is enough the parties as contractually stipulated with the
ground to render a consignation ineffective. force of law between the parties, so as to
substitute its own terms for those covenanted by
Tender of payment is the antecedent of the parties themselves.
consignation, that is, an act preparatory to the
consignation, which is the principal, and from NAGA TELEPHONE V. CA – Art. 1267 speaks of
which are derived the immediate consequences “service” which has become so difficult. Taking into
which the debtor seeks to obtain. Tender of consideration the rationale behind this provision,
payment may be extrajudicial, while consignation is the term “service” should be understood as
necessarily judicial, and the priority of the first is referring to the “performance” of the obligation. It
the attempt to make a private settlement before is not required that the contract be for future
proceeding to the solemnities of consignation. 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 basis of a contract gives rise
to a right to relief in favor of the party prejudiced.
MAGAT V. CA – A party cannot be faulted when his
inability to secure a letter of credit and to comply
with his obligation was a direct consequence of the
denial of the permit to import.
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
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.
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.
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If under the Constitution the State may, in the requirements of the school and to serve its rules
interest of national welfare, transfer utilities to and regulations.
public ownership upon payment of just
compensation, there is no reason why the State The terms of the school-student contract are
may not require a public utility to render services defined at the moment of its inception upon
in the general interest, provided just compensation enrolment of the student. Standards of academic
is paid therefor. performance and the code of behavior and
discipline are usually set forth in manuals
CUI V. ARELLANO – The stipulation in a contract, distributed to new students at the start of every
between a student and the school, that the school year. A fee that was not part of the school-
student’s scholarship is good only if he continues in student contract entered into at the start of the
the same school, and that he waives his right to school year could not be unilaterally imposed to the
transfer to another school without refunding the prejudice of the enrolees.
equivalent of his scholarship in cash, is contrary to
public policy, and null and void. Scholarships are DUNCAN V. GLAXO – A company policy prohibiting an
awarded in recognition of merit and to help gifted employee from having a relationship with an
students, in whom society has an established employee of a competitor company is a valid
interest or a first lien, and not to keep outstanding exercise of management prerogative. It has a right
students in school to bolster its prestige and to guard its trade secrets, manufacturing formulas,
increase its business potential. marketing strategies and other confidential
programs and information from competitors. The
SAURA V. SINDICO – Among those that may not be the equal protection clause is addressed only to the
object of contracts are certain rights of individuals, State or those acting under color of its authority.
which the law and public policy have deemed wise
to exclude from the commerce of man. Among STAR PAPER V. SIMBOL – A no-spouse employment
these are the political rights conferred upon policy is invalid if the employer fails to present any
citizens (i.e. right to vote and be voted for). evidence of business necessity other than the
Therefore, such rights may not be bargained away general perception that spouses in the same
or surrendered for consideration by the citizen or workplace might adversely affect the business. The
unduly curtailed with impunity, for they are absence of a bona fide occupational qualification 4
conferred not for individual or private benefit or invalidates a rule denying employment to one
advantage but for the public good and interest. spouse due to the current employment of the other
spouse in the same office. Unless the employer can
REGINO V. PANGASINAN – The relationship between the prove that the reasonable demands of the business
school and student is contractual and reciprocal in require a distinction based on marital status and
nature. The school undertakes to provide students there is no better available or acceptable policy
with education sufficient to enable them to pursue which would better accomplish the business
higher education or profession. On the other hand, purpose, an employer may not discriminate against
the students agree to abide by the academic
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an employee based on the identity of the principle of mutuality of contracts ordained in Art. does not entitle him to file an action against the
employee’s spouse. 1308. One-sided impositions do not have the force buyer.
of law between the parties, because such
The policy may not facially violate Art. 136 of the imposition is not based on the parties’ essential ARTICLE 1324
Labor Code5 but it creates a disproportionate effect equality.
and under the disparate impact theory, the only SANCHEZ V. RIGOS – In accepted unilateral promise to
way it could pass judicial scrutiny is a showing that Although escalation clauses are valid, giving a bank sell, since there may be no valid contract without a
it is a reasonable. an unbridled right to adjust the interest cause or consideration, the promisor is not bound
independently and upwardly would completely take by his promise and may, accordingly, withdraw it.
ACOL V. PCCCI – A stipulation6 in credit card away the right to assent to an important Pending notice of its withdrawal, his accepted
application form that provides that the effectivity modification in their agreement and would also promise partakes, however, of the nature of an
of the cancellation of the lost card rests on an act negate the element of mutuality in their contracts. offer to sell which, if accepted, results in a
entirely beyond the control of the cardholder is perfected contract of sale.
contrary to public policy. ARTICLE 1311
ANG YU V. CA – Where a period is given to the
The phrase “after a reasonable time” gives the MANDARIN V. CA – While a party may not be privy to offeree within which to accept the offer, the
issuer the opportunity to actually profit from an agreement, such party may demand its following rules generally govern:
unauthorized charges despite receipt of immediate fulfilment if there is a stipulation pour autrui;
written notice from the card holder. A card holder provided further, that he communicated his If the period is not itself supported by a
could have theoretically done everything in his acceptance prior to its revocation. consideration, the offeror is still free and has the
power to give the issuer the required written right to withdraw the offer before its acceptance.
notice. But if the issuer took a “reasonable” time BALUYOT V. CA – The following requisites must be The same rule applies if an acceptance has been
(which could be indefinite) to include the card in present in order to have a stipulation pour autrui: made but before the offeror’s coming to know of
its cancellation bulletin, it could still hold the (1) stipulation in favor of a third person; (2) such acceptance. In both instances, the withdrawal
cardholder liable for whatever unauthorized stipulation must be a part, not the whole of the must be communicated to the offeree.
charges were incurred within that span of time. contract; (3) contracting parties must have clearly Nevertheless, the right to withdraw must not be
and deliberately conferred a favor upon a third exercised arbitrarily. Otherwise, it could give rise
AZNAR V. CITIBANK – A stipulation in a credit card person, not a mere incidental benefit or interest; to damages under Art. 19 of the Civil Code.7
agreement which limits the card company’s liability (4) third person must have communicated his
to P1,000 or the actual damage proven, whichever acceptance to the obligor before its revocation; If the period has a separate consideration, a
is lesser, cannot be considered as valid for being and (5) neither of the contracting parties bears the contract of “option” is deemed perfected. It would
unconscionable as it precludes payment of a larger legal representation or authorization of the third be a breach of the contract to withdraw the offer
amount even though damage may be clearly party. during the agreed period. The “option,” however, is
proven. an independent contract by itself, and it is to be
UY V. CA – Where an agent is not a beneficiary of a distinguished from the projected main agreement
ARTICLE 1308 stipulation pour autrui, the fact that he did not which is yet to be concluded. If the optioner
obtain his commissions or recoup his advances (offeror) withdraws the offer before its acceptance
SAMPAGUITA V. PNB – The “unilateral determination because of the non-performance of the contract by the optionee (offeree), the latter may not sue
and imposition” of increased rates is violates the for specific performance on the proposed contract

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.”

7 Art. 19. Every person must, in the exercise of his rights and the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.

CIVIL LAW REVIEW 2 (OBLICON) DOCTRINES | ATTY. RUBEN BALANE | MARK JOREL O. CALIDA
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since it has failed to reach its own perfection stage. out of the Statute of Frauds through performance
However, the optioner (offeror) renders himself ARTICLE 1345 by one party thereto. However, in order that a
liable for damages for breach of the option. partial performance of the contract may take the
PAYONGAYONG V. CA – Simulation occurs when an case out of the operation of the statute, it must
Care should be taken on the real nature of the apparent contract is a declaration of a fictitious appear clear that the full performance has been
consideration given, for if, in fact it has been will, deliberately made by agreement of the made by one party within one year. Otherwise, the
intended to be part of the consideration for the parties, in order to produce, for the purpose of statute would apply.
main contract with a right of withdrawal on the deception, the appearance of a juridical act which
part of the optionee (offeree), the main contract does not exist or is different from that which was Where the contract is vague and ambiguous, the
could be deemed perfected. really executed. Its basic characteristic is that it is doctrine of part performance cannot be invoked.
not really intended to produce legal effects or does There can be no part performance until there is a
EQUATORIAL V. MAYFAIR – The deed of option or the not in any way alter the juridical situation of the definite and complete agreement between the
option clause in a contract, in order to be valid and parties. parties. In order to warrant the specific
enforceable, must, among other things, indicate enforcement of a parol contract for the sale of
the definite price at which the person granting the Its requisites are: (1) an outward declaration of will land, on the ground of part performance, all the
option is willing to sell. different from the will of the parties; (2) false essential terms of the contract must be established
appearance must have been intended by mutual by competent proof, and shown to be definite,
The option is not the contract of sale itself. The agreement; and (3) purpose is to deceive third certain, clear and unambiguous.
optionee (offeree) has the right, but not the persons.
obligation, to buy. Once the option is exercised CABAGUE V. AUXILIO – For breach of a mutual promise
timely, a bilateral promise to sell and to buy ensues to marry, the groom may sue the bride for damages,
ARTICLE 1354
and both parties are then reciprocally bound to and evidence of such mutual promise is admissible.
comply with their respective undertakings.
LAW V. OLYMPIC SAWMILL – Unless the debtor proves
ARTICLE 1409
BIBLE BAPTIST V. CA – An option contract needs to be the contrary in a hearing, the consideration added
supported by a separate consideration. The to the consideration of the original obligation (after LA’O V. REPUBLIC – The Anti-Graft and Corrupt
consideration need not be monetary but could extension of payment) is presumed to exist and is Practices Act expressly declares null and void a
consist of other things or undertakings. However, if lawful. contract which is grossly disadvantageous to the
the consideration is not monetary: (1) these must government. It is null and void from the beginning.
be things or undertakings of value, in view of the ARTICLE 1403
onerous nature of the contract of option; and (2) ARTICLE 1411
said consideration must be clearly specified as such ORTEGA V. LEONARDO – An oral agreement to sell a
in the option contract or clause. piece of land is not provable. However, where there
is partial performance of the contact of sale, the YU BUAN GUAN V. ONG – The principle of in pari
delicto provides that when two parties are equally
VILLEGAS V. CA – Where a time is stated in an offer principle excluding evidence of parol contracts for
at fault, the law leaves them as they are and denies
for its acceptance, the offer is terminated at the the sale of real property will not apply. Some
recovery by either one of them. The principle
expiration of the time given for its acceptance. The circumstances indicating partial performance of an
applies to cases where the nullity arises from the
offer may also be terminated when the person to o r a l c o n t r a c t o f s a l e o f r e a l p r o p e r t y :
illegality of the consideration or the purpose of the
whom the offer is made either rejects the offer relinquishment of rights, continued possession,
building of improvements, tender of payment, contract. However, this principle does not apply
outright or makes a counter-offer of his own.
rendition of services, payment of taxes and with respect to inexistent and void contracts.
EULOGIO V. APELES – An option is not of itself a surveying of the land at the buyer’s expense.
purchase, but merely secures the privilege to buy.
It is not a sale of property but sale of the right to CARBONEL V. PONCIO – The Statute of Frauds is
purchase. Its distinguishing characteristic is that it applicable only to executory contracts, not to
imposes no binding obligation on the person holding contracts that are totally or partially performed.
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
CIVIL LAW REVIEW 2 (OBLICON) DOCTRINES | ATTY. RUBEN BALANE | MARK JOREL O. CALIDA