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Cause of Action
Participation is not a necessary element to determine the existence of
a cause of action.
Sarming v Dy
The action for the annulment of contracts may be instituted by all who
are thereby obliged principally or subsidiarily. The petitioner is neither
a party nor a privy to the Deed of Conditional Sale and the assignment
thus, he cannot assail the validity of the said contracts.
House International v CA

When all the requisites mentioned in Art. 1279 of the Civil Code are
present, compensation takes effect by operation of law, even without
the consent or knowledge of the creditors and debtors. Compensation
is not proper where the claim of the person asserting the set-off
against the other is neither clear nor liquidated; compensation cannot
extend to unliquidated, disputed claim existing from breach of
Silahis Inc v IAC
Under Article 1278 of the Civil Code, compensation shall take place
when two persons, in their own right, are creditors and debtors of each
other. Moreover, Article 1279 of the Civil Code requires among others,
that in order that legal compensation shall take place, "the two debts
be due" and "they be liquidated and demandable."
International Corporate Bank v IAC

The continuance, effectivity and fulfillment of a contract of lease
cannot be made to depend exclusively upon the free and uncontrolled
choice of the lessee between continuing the payment of the rentals or
not for it completely deprives the owner of any say in the matter.
Lao Lim v CA

An offer that is not accepted does not give rise to a consent. An
acceptance which is not made in the manner prescribed by the offeror
is not effective but constitutes a counter-offer which the offeror may
accept or reject. The acceptance by the offeree of the offer after
knowledge of the revocation or withdrawal of the offer is inefficacious.
Malbarosa v CA
The arrearages did not pertain to the substance of the contract. It is
not a principal condition thereof, cannot nullify a contract when there
was a meeting of minds as to the principal object of the contract.
Ramon Magsaysay Award Foundation v CA
The contract entered by ABS-CBN and Del Rosario is a consensual
contract, wherein the contract can be perfected by mere consent or
the meeting of mind between the parties; but this is not present in the
agreement between the two. For consent to be given by the side of Del
Rosario, it is necessary to get it from the Board of Directors.

Without an agreement on the matter (the number of lots--the object of
the contract), the parties may not in any way be considered as having
arrived at a contract under law.
People’s Industrial And Commercial Corp v CA

Contract of Adhesion
Since the contract to sell is essentially a contract of adhesion and it
must be construed against the party causing it.
Angeles v Calasanz

Contributory Negligence
If the master has not been guilty of any negligence whatever in the
selection and direction of the servant, he is not liable for the acts of the
latter, whether done within the scope of his employment or not, if the
damage done by the servant does not amount to a breach of the
contract between the master and the person injured.
Cangco v Manila Railroad Co
There is no question that a typhoon or storm is a fortuitous event, a
natural occurrence which may be foreseen but is unavoidable. In order
to be exempt from liability arising from any adverse consequence that
may occur, there should have been no human participation amounting
to a negligent act. The burden of proving whether there was human
participation amounting to such negligence lies unto the party claiming
for damages.
Southeastern College Inc v CA

Culpa Aquiliana
When a child operates a machine, in this case a vehicle, that carries
other members of the family, the theory of the law is that such
machine is within the scope of the owner’s business and covered by
the concept of culpa aquiliana. Thus, the owner is liable for the
negligence of the child because of the relationship of master and
Gutierrez v Gutierrez
Under the proposed Article 2177, acquittal from an accusation of
criminal negligence, whether on reasonable doubt or not, shall not be a
bar to a subsequent civil action, not for civil liability arising from
criminal negligence, but for damages due to a quasi-delict or ‘culpa
Elcano v Hill

Culpa Criminal
The action for enforcement of civil liability based on culpa criminal is
deemed simultaneously instituted with the criminal action, unless
expressly waived or reserved for separate application by the offended
Mendoza v Arrieta

The court held that persons criminally liable are also civilly liable. The
award of damage in a civil suit is for the repair or to make whole the
damage caused to another by reason of his action whether or not such
is done intentionally or not and whether or not such act is punishable
by law.
Occena v Icamina
What give rise to the civil accountability is really the obligation and the
moral duty of everyone to repair or make whole the damage caused to
another by reason of his own act or omission, done intentionally or
negligently, whether or not the same be punishable by law.
Banal v Tadeo
In American law, the preponderance of authority is in favor of the
doctrine that a passenger is entitled to recover damages from a carrier
for an injury resulting from a defect in an appliance purchased from a
manufacturer, whenever it appears that the defect would have been
discovered by the carrier if it had exercised the degree of care which
under the circumstances was incumbent upon it.
Necesito v Paras
Art. 1170 of the Civil Code provides, “Those who in the performance of
their obligation are guilty of fraud, delay, negligence, and those who in
any manner contravene the tenor thereof, are liable for damages. Art.
2176 also provides that “whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the
damage done. Moreover, the petitioner is guilty of gross negligence
amounting to bad faith since the petitioner failed to do anything to
advise the plaintiff of the circumstances.
Telefast Communications v CA

In the instant case, there was a non-performance of a reciprocal
obligation. In their contract of purchase, petitioner had already
complied with his obligation as a purchaser—payment of the price of
the construction materials. Thus, it was incumbent upon the
respondent to immediately fulfill his obligation—delivery of the goods.
Without such immediacy, the respondent incurs delay.
Barzaga v CA

Fortuitous Event
The periodical visual inspection of the steering knuckle as practiced by
the carrier's agents did not measure up to the required legal standard
of "utmost diligence of very cautious persons" - "as far as human care
and foresight can provide", and therefore that the knuckle's failure
cannot be considered a fortuitous event that exempts the carrier from
Necesito v Paras

The Court further held that, for the presumption of fraud to apply, it
must also be established that the donor did not leave adequate
properties which creditors have recourse for the collection of their
credits existing before the execution of the donation.
Siguan v Lim

Independent Civil Action

The same negligent act causing damages may produce civil liability
arising from a crime under Article 100 of the Revised Penal Code; or
create an action for cuasi-delito or culpa extra-contractual under
Articles 1902-1910 of the Civil Code.
Barreo v Garcia

Although no specific form of words or writing is necessary to give effect
to a novation, it must be proved that the contracts executed by the
parties were done so by persons possessing proper authority. They are
“incomplete documents and are not binding without the signatures of
the supposed contracting parties.
Garcia v CA
It is important that the new obligation expressly declare that the old
obligation is thereby extinguished, or that the new obligation be on
every point incompatible with the new one.
Ajax Marketing and development Co v CA
Novation is never presumed; it must be proven as a fact either by
express stipulation of the parties or by implication derived from an
irreconcilable incompatibility between the old and new obligations or
contracts.Where there is no clear agreement to create a new contract
in place of the existing one, novation cannot be presumed to take
place, unless the terms of new contract are fully incompatible with the
former agreement on every point.
Espina v CA

Perfection of Contract
The perfection of the contract takes place upon the concurrence of the
essential elements thereof. A contract which is concensual as to
perfection is so established upon a mere meeting of the minds. In the
instant case, there was a concurrence of the offer and acceptance, n
the object and on the cause; thus, there is a perfected contract.
Limketkai v CA

Quasi Delict
The fact that there exists a contractual relationship or a contract
between the two parties does not bar the recovery of damages when
either party commits a tort against the other.
Araneta v De Joya

Reformation of an instrument is that remedy in equity by means of
which a written instrument is made or construed so as to express or
conform to the real intention of the parties when some error or mistake
has been committed. An action for reformation must be brought within
the period prescribed by law otherwise, it will be barred by the mere
lapse of time.
Bentir v Leanda
In reformation of contracts, what is reformed is not the contract itself,
but the instrument embodying the contract. It follows that whether the
contract is disadvantageous or not is irrelevant to reformation and
therefore, cannot be an element in the determination of the period for
prescription of the action to reform.
Naga Telephone Co v CA
Reformation is that remedy in equity by means of which a written
instrument is made or construed so as to express or conform to the
real intention of the parties.
Sarming v Dy

The general rule is that rescission requires the existence of the
creditors at the time of the alleged fraudulent alienation, and this must
be proved as one of the bases of the judicial pronouncement setting
aside the contract. Without any prior existing debt, there can be
neither injury nor fraud.
Siguan v Lim
The Court warns that the injured party in failing to seek judicial
declaration of rescission proceeds at its own risk. It is only by final
judgment that will finally settle whether the rescission was or was not
correct in law.
UP v De Los Angeles
The contention that private respondent had waived his right to be
notified under paragraph 6 of the contract is neither meritorious
because it was a contract of adhesion, a standard form of petitioner
corporation, and private respondent had no freedom to stipulate. A
waiver must be certain and unequivocal, and intelligently made; such
waiver follows only where liberty of choice has been fully accorded.
Palay Inc v Clave
The general rule is that rescission of a contract will not be permitted
for a slight or casual breach, but only for such substantial and
fundamental breach as would defeat the very object of the parties in
making the agreement, the Court held that the breach of the contract
is so slight and casual when the initial down payment plus the
aggregates amount is considered.
Angeles v Calasanz

Statute of Frauds
Oral agreements regarding partition of land is not covered by the
Statute of Frauds.
Hernandez v CA
It follows then that Statute of Frauds is applicable only to executory
contracts and in actions for their specific performance. It does not
apply to actions which are neither for violation of a contract nor the
performance thereof. In the case at bar, the petitioner merely seek to
recover their money and not for the specific performance of the
Asia Production Co Inc v CA
In this case, the deed of sale and the verbal agreement allowing the
right to repurchase should be considered as an integral whole. The
deed of sale, being the note or memorandum evidencing the contract,
complies with the requirement of the Statute of Frauds. On the other
hand, as the sale has been fully consummated, it is now taken out of
scope of the Statute of Frauds.
Mactan Cebu International Airport Authority v CA