CHAPTER 2 ESSENTIAL REQUISITES OF CONTRACTS

General Provisions

Art. 1318. There is no contract unless the following requisites concur:

(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract

(3) Cause of the obligation which is established.

 Parties
 At least 2, capacity and consent are essential
 Do not confuse with persons = 2 parties may be represented by 1 person (see
auto contracts Art. 1305) and 1 party may be composed of 2 or more persons)
 Legal capacity – indispensable condition, without it there can be no effective
consent
Section 1. — Consent
Art. 1319. Consent is manifested by the meeting of the offer and the acceptance upon the
thing and the cause which are to constitute the contract. The offer must be certain and
the acceptance absolute. A qualified acceptance constitutes a counter-offer.
Acceptance made by letter or telegram does not bind the offerer except from the
time it came to his knowledge. The contract, in such a case, is presumed to have been
entered into in the place where the offer was made.

Concept of Consent. —
 as applied to contracts, it may be defined as “the concurrence of the wills of the
contracting parties with respect to the object and the cause which shall constitute
the contract”
 most important element

 In its derivative sense, the word “consent” (cum sentire) merely means the
agreement of wills
 Requisites of Consent —
1. must be manifested by the concurrence of the offer and the acceptance (Arts.
1319-1326)
2. the contracting parties must possess the necessary legal capacity (Arts. 1327-
1329)
3. must be intelligent, free, spontaneous, and real (Arts. 1330-1346)
 The first is expressly stated in the Code, the second and the third are implied
 When Contracts are Perfected —
 In general, contracts are perfected from the moment that there is a
manifestation of the concurrence between the offer and the acceptance with
respect to the object and the cause which shall constitute the contract. (Art.
1319, par. 1)
  BUT if acceptance made by letter or telegram - Art. 1319, par. 2 – contract is
perfected from the moment that the offeror has knowledge of such acceptance
 Manifestation of Consent. —
 manifested by the meeting of the offer and the acceptance upon the thing and
the cause which are to constitute the contract
 De Lim vs. Sun Life Assurance Co. 41 Phil. 263
On July 6, 1917, Luis Lim applied to the defendant company for a
policy of insurance of his life in the sum of P5,000. In his application, he
designated his wife, Pilar C. de Lim, plaintiff herein, as beneficiary. The first
premium of P33 was paid, and upon payment, the company issued a
“provisional policy’’ accepting the application “provided that the Company
shall confirm this agreement by issuing a policy on said application when
the same shall be submitted to the Head Office in Montreal.’’ Should the
Company not issue such a policy, “then this agreement shall be null and
void ab initio x x x .’’ A period of four months from the date of the
application was also stated as the period within which the Company shall
issue the policy. Luis Lim, however, died on August 24, 1917, after the
issuance of the provisional policy but before approval of the application by
the head office of the insurance company. The instant action is brought by
the beneficiary to recover from the insurance company the sum of P5,000,
the amount stated in the provisional policy. The question now is whether
or not the contract has been perfected.

Held: “Our duty in this case is to ascertain the correct meaning of the
document above quoted. Certainly, language could hardly be used which
would more clearly stipulate that the agreement should not go into effect
until the home office of the company should confirm by issuing a policy.
As we read and understand the so-called provisional policy it amounts to
nothing but an acknowledgment on behalf of the company, that it had
received from the person named therein the sum of money agreed upon
as the first year’s premium upon a policy to be issued upon the
application, if the application is accepted by the company.

“It is of course a primary rule that a contract of insurance, like other

contracts, must be assented to by both parties either in person or by their
agents. So long as an application for insurance has not been either
accepted or rejected, it is merely an offer or proposal to make a contract.
The contract, to be binding from the date of the application, must have
been a completed contract, one that leaves nothing to be done, nothing to
be passed upon, or determined, before it shall take effect. There can be no
contract of insurance unless the minds of the parties have met in
agreement. Our view is, that a contract of insurance was not here
consummated by the parties.”
 Character of offer and acceptance. —
 offer – defined as a proposal to make a contract
 Art. 1319, par. 1 - offer must be certain or definite
 Thus, where the defendant wrote a letter to the plaintiff stating that he is “in
a position” and is “willing to entertain” the purchase of a yacht belonging to
the plaintiff under certain terms, and the plaintiff accepted all of such terms,
it was held that there was no perfected contract, since the word “entertain”
applied to an act does not mean the resolution to perform said act, but
simply a position to deliberate whether to perform or not to perform said act;
consequently, the letter of the defendant cannot be interpreted as a definite
offer to purchase the yacht but simply to deliberate whether or not he would
purchase the yacht. (Rosenstock vs. Burke, 46 Phil. 217)
 acceptance – must also be certain or definite (implied) and absolute
 Thus, where the plaintiff offered to the defendant certain machineries in
exchange for tractors and the latter answered stating “we are willing to
accept the proposition,’’ it was held that there was no perfected contract of
barter, since the phrase “willing to accept’’ does not mean acceptance, but
simply a disposition to accept the offer in principle. ( Meads vs. Lasedeco, 52
Off. Gaz. 208)
 Counter-offer – qualified acceptance – not definite and absolute
 involves any new proposal or if it is qualified
 essential before there can be a perfected contract that there must be a
definite and absolute acceptance by the original offeror of such counter-
offer.
 Thus, where the defendant offered to the plaintiff an option for three
months to buy a certain land for the price of its assessed government
valuation and the latter answered by accepting the offer, but subject to
certain modifications with regard to the terms of payment specified in the
proposal, it is clear that there is no perfected contract because there is no
concurrence between the offer and the acceptance. ( Beaumont vs. Prieto,
41 Phil. 670)
 The same can also be said with regard to a case where the defendant
gave an option to the plaintiff to buy a certain sugar central for
P1,000,000, payable within three years and properly secured, and the
latter accepted the offer, placing at the defendant’s disposal the sum of
P100,000 as part payment, and at the same time, notifying him that the
Philippine National Bank had agreed to transfer the defendant’s long
term loan of P600,000 to the account of the plaintiff who will thus assume
the defendant’s liability to the said Bank for the said amount. ( Zayco vs.
Serra, 44 Phil. 326)
 ABS-CBN Broadcasting Corp. vs. Court of Appeals, G.R. No. 128690 -
 “Contracts that are consensual in nature are perfected upon mere meeting
of the minds. Once there is concurrence between the offer and the
acceptance upon the subject matter, consideration and terms of payment
a contract is produced. The offer must be certain. To convert the offer into
a contract, the acceptance must be absolute and must not qualify the
terms of the offer; it must be plain, unequivocal, unconditional and without
variance of any sort from the proposal. A qualified acceptance, or one that
involves a new proposal, constitutes a counter-offer and is a rejection of
the original offer. Consequently, when something is desired which is not
exactly what is proposed in the offer, such acceptance is not sufficient to
generate consent because any modification or variation from the terms of
the offer annuls the offer.’’
Acceptance of complex offers - rules regarding acceptance are modified
 If the offeror proposes to lease one part and to sell another part, acceptance of
one by the offeree would ordinarily result in a perfected contract, unless, of
course, the offeror should have made one offer dependent upon the other
 However, the prospective contracts which are comprised in a single offer may be
so interrelated in such a way that the acceptance of one would not at all result in
a perfected contract  must accept both
e.g. Thus, in an offer involving a prospective contract of loan and the mortgage
which will secure it, acceptance by the future debtor of the proposed loan
alone would not give rise to a perfected contract.

Acceptance by Letter or Telegram

 Francisco vs. GSIS (117 Phil. 586)

Facts: The plaintiff’s offer of compromise with respect to the settlement of an

obligation which had already matured was accepted by the Government
Service Insurance System by means of a telegram signed by the Board
Secretary. For a year, the System receipted payments made pursuant to the
compromise agreement.

Issue: Is there a perfected contract in this case inspite of the fact that the
General Manager of the System denied that he authorized the Board Secretary
to send the telegram?

Held: … there is already a perfected contract of compromise applying the

provision of the second paragraph of Art. 1319 of the New Civil Code. It is of
course a familiar doctrine that if a corporation knowingly permits one of its
officers, or any other agent, to do acts within the scope of an apparent
authority, and thus holds him out to the public as possessing the power to do
those acts, the corporation will, as against anyone who has in good faith dealt
with the corporation through such agent, be estopped from denying his
authority. Hence, even if it were the Board Secretary who sent the telegram,
the corporation could not evade the binding effect which it produced.
 Effect of constructive knowledge. —
 General Rule – [Art. 1319(2)] what is required by the law is actual knowledge of
the acceptance, mere receipt of the letter or telegram is not sufficient
 Presumption that offeror has read the letter or telegram arises once it is
established that the offeror has received the letter or telegram
 Presumption rebutted if proof that offeror was unable to read the letter or
telegram because he was absent or incapacitated at the time of the receipt
 cannot be bound by the acceptance.
 BUT if offeror refused to open the letter or telegram, despite being able to
do so, because for some reason or other he has already changed his mind
or he has already decided to revoke his offer or proposal  constructive
knowledge of the contents of the letter or telegram  bound by the
acceptance made by the offeree.
Withdrawal of offer. —Can the offeror still withdraw the offer after it has been made?

 the rule in this jurisdiction is that he may still withdraw his offer or proposal so long
as he still has no knowledge of the acceptance by the offeree.
 implied from the rule that he is not bound by the acceptance except from the
time it comes to his knowledge; it is confirmed to a certain extent by the new
provision enunciated in Art. 1324.
 Laudico vs. Arias (43 Phil. 270)

Facts: On February 6, 1919, defendant wrote a letter to the plaintiff, giving

him an option to lease a certain building to a third person, and transmitting
to him for that purpose a tentative contract in writing containing the
conditions upon which the proposed lease should be made. After certain
negotiations, the plaintiff finally wrote a letter to the defendant on March 6,
1919, advising him that all his propositions were accepted. This letter was
received by the defendant by special delivery at 2:53 p.m. of that day. On that
same day, at 11:25 a.m., the defendant had, in turn, written a letter to the
plaintiff withdrawing the offer. This letter was sent through a messenger and
should have been received that same morning, or at least, before the
defendant had received the letter of acceptance. Because of the refusal of the
defendant to recognize the existence of a perfected contract, plaintiff
brought this action to compel him to execute the contract of lease of the
building in question.

Held: Holding that no contract was perfected, the Supreme Court, speaking
through Justice Avanceña ruled:

“Under Article 1262, paragraph 2 (now Art. 1319, par. 2) of the Civil
Code, an acceptance by the latter does not have any effect until it
comes to the knowledge of the offeror. Therefore, before he learns of
the acceptance, the latter is not yet bound by it and can still withdraw
 the offer. Consequently, when Mr. Arias wrote Mr. Laudico,
withdrawing the offer, he had the right to do so, inasmuch as he had
not yet received notice of the acceptance. And when the notice of the
acceptance was received by Mr. Arias, it no longer had any effect, as
the offer was not then in existence, the same having already been
withdrawn. There was no meeting of the minds through offer and
acceptance, which is the essence of the contract. While there was an
offer, there was no acceptance, and when the latter was made and
could have binding effect, the offer was then lacking. Though both
the offer and the acceptance existed, they did not meet to give birth
to a contract.’’

Withdrawal of acceptance. — the acceptance may be revoked before it comes to the

knowledge of the offeror because in such case there is still no meeting of the minds,
since the revocation has cancelled or nullified the acceptance which thereby ceased to
have any legal effect.

Art. 1320. An acceptance may be express or implied.

Form of acceptance

 Express - oral or written

 Implied acceptance is one that is inferred from act or conduct.

(1) Acceptance by promise. — e.g. as where a person offers to deliver to another a

certain thing if the latter will pay a certain amount, and the other accepts by
promising to so pay according to the conditions of the offer.
 The promise need not be by words but may be inferred from the acts of the
parties, where either or both act as though it were a completed agreement.

(2) Acceptance by act. — e.g. as where an offer is made that the offerer will do
something else, if the offeree shall do a particular thing. In such a case,
performance is the only thing needful to complete the agreement and to create
a binding promise.

(a) In a case, the petitioner did not affix her signature to the document
evidencing the subject concessionaire agreement. However, she performed
the tasks indicated in the said agreement for a period of three (3) years
without any complaint or question which fact was held as showing that she
had given her implied acceptance of or consent to the said agreement
(Lopez vs. Bodega City, 532 SCRA 56 [2007].)

(b) where a person accepts the services of another, whether solicited or not, he
has the obligation to pay the reasonable value of the services thus rendered
upon the implied contract of lease of service unless it is shown that the
service was rendered gratuitously (Perez vs. Pomar, 2 Phil. 682 [1903].) or
without any expectation that he would pay for the same. ( Aldaba vs. Court
of Appeals, 27 SCRA 263 [1969].)
 (c) where the creditor writing to his debtor for the settlement of the latter’s
obligation to him and offering to remit or condone the interest on the same
on condition that he would immediately pay the principal thereof, it was
held that the promise of the debtor to pay, without actually making the
payment such that the creditor had to institute legal proceedings for its
collection, was not an acceptance. In other words, the offer to remit the
interest could only be accepted by an act of payment by the debtor.
(Gamboa vs. Gonzales, 17 Phil. 381 [1910].)

(3) Acceptance by silence or inaction. — General Rule - acceptance must be

affirmatively and clearly made and evidenced by words or some acts or conduct
communicated to the offeror  silence cannot be construed as acceptance

Exceptions:
(a) where the parties agree expressly or impliedly, that it shall amount to
acceptance;
(b) where specific provisions of law so declare (e.g., Arts. 1670, 1870-1873.); and

(c) where under the circumstances such silence constitutes estoppel. (see Art.
1431.)

 One receiving a proposal to change a contract to which he is a party, is not

obliged to answer the proposal, and his silence per se cannot be construed as
an acceptance. (Phil. National Bank vs. Court of Appeals, 238 SCRA 20 [1994];
Mendoza vs. Court of Appeals, 359 SCRA 438 [2001].)

Art. 1321. The person making the offer may fix the time, place, and manner of acceptance,
all of which must be complied with.

Art. 1322. An offer made through an agent is accepted from the time acceptance is
communicated to him.

Art. 1323. An offer becomes ineffective upon the death, civil interdiction, insanity, or
insolvency of either party before acceptance is conveyed.

 The death of either party or his loss of capacity before the conveyance of the
acceptance to the offeror precludes the formation of a contract.
 It must be observed that the law refers to “either party.”  at the time the
acceptance is communicated, both parties, offerer and offeree, must be living and
capacitated. (see Art. 1327.)
Other grounds that render the offer ineffective
a) failure to comply with the condition of the offer as to the time, place, and the
manner of payment (Art. 1321.)
b) the expiration of the period fixed in the offer for acceptance (Art. 1324.)
c) the destruction of the thing due before acceptance (Art. 1262.)
d) rejection of the offer
R.A. No. 8792 The Electronic Commerce Act (June 14, 2000)

 Formation and validity or enforceability of electronic contracts . — Except as

otherwise agreed by the parties, an offer, the acceptance of an offer and such other
elements required under existing laws for the formation of contracts may be
expressed in, demonstrated and proved by means of electronic data messages or
electronic documents and no contract shall be denied validity or enforceability on
the sole ground that it is in the form of an electronic data message or electronic
document, or that any or all of the elements required under existing laws for the
formation of the contracts is expressed demonstrated and proved by means of
electronic data messages or electronic documents. (Sec. 16[1])

Art. 1324. When the offerer has allowed the offeree a certain period to accept, the offer
may be withdrawn at any time before acceptance by communicating such withdrawal,
except when the option is founded upon a consideration, as something paid or promised.

Meaning of contract of option; option period; option money.

(1) Option contract is a preparatory contract giving a person for a consideration a

certain period and under specified conditions within which to accept the offer of
the offerer. It is separate and distinct from the projected main agreement or
principal contract itself (subject matter of the option) which the parties may enter
into upon the consummation of the option or which will be perfected upon the
acceptance of the offer.
 Option may also refer to the privilege itself given to the offeree to accept an
offer within a certain period.

(2) Option period is the period given within which the offeree must decide whether or
not to enter into the principal contract.

(3) Option money is the money paid or promised to be paid as a distinct consideration
for an option contract. It is not to be confused with earnest money which is actually
a partial payment of the purchase price and is considered as proof of the perfection
of the contract. (see Art. 1482.)

 The would-be buyer who gives option money is not required to buy. ( Adelfa
Properties, Inc. vs. Court of Appeals , 240 SCRA 565 [1995] and Limson vs. Court
of Appeals, 357 SCRA 209 [2001
 The consideration need not be monetary; it may consist of other things or
undertaking but they must be of value, in view of the onerous nature of the
contract of option. (Bible Baptist Church vs. Court of Appeals , 444 SCRA 399
[2004]; Navotas Industrial Corporation vs. Cruz, 469 SCRA 530 [2005].)

Withdrawal of offer where period for acceptance stipulated.

 General Rule - the offer may be withdrawn as a matter of right at any time before
acceptance.
 Exception - when the option is founded upon a separate consideration, as
something paid or promised
  in which case, a contract of option is deemed perfected, and the offer may
not be withdrawn before the lapse of the option period; otherwise, it would
be a breach of the contract of option and render the optioner-offerer liable
for damages.
 the option binds the offerer not to enter into the principal contract with any
other person during the period fixed, and, within the period, to enter into
such contract with the offeree, if the latter should decide to use the option.
However, the optionee-offeree may not sue for specific performance on the
proposed contract before it has reached its own stage of perfection.
(Asuncion vs. Court of Appeals, 238 SCRA 602 [1994]; Carceller vs. Court of
Appeals, 302 SCRA 718 [1999].) Only when the option is exercised, may the
contract be perfected. (Cavite Development Bank vs. Lim, 324 SCRA 346
[2000].) In any case, the offerer may not withdraw his offer after it has been
accepted.

EXAMPLE:

X offers to construct the house of Y for a very reasonable price of P500,000.00

giving the latter 10 days within which to make up his mind.

Under Article 1324, X may withdraw the offer even before the lapse of 10-days
unless Y has already accepted the offer. After acceptance, withdrawal is not possible
as there is no more offer to withdraw.

Even before acceptance, X may not withdraw the offer if the option is covered
by a consideration as when Y paid or promised to pay a sum of money to X for
giving him the 10-day period. There is here an option contract. After the 10-day
period, in the absence of acceptance, the offer becomes ineffective.

Art. 1325. Unless it appears otherwise, business advertisements of things for sale are not
definite offers, but mere invitations to make an offer.

 Business advertisements of things for sale merely invitations to the reader to make
an offer or only as proposals. However, if the advertisement is complete in all the
particulars necessary in a contract, it may amount to a definite offer which, if
accepted, will produce a perfected contract.
EXAMPLES:
(1) “For sale: 1,000 square meter lot at Green Plains Village, Quezon City for
P5,000,000.00 — Tel. No. 817-12-84.” This is not a definite offer.

(2) “For sale: 1,000 square meter lot at Green Plains Village, Quezon City located at
the corner of Geronimo and Magallanes Streets for P5,000,000.00 cash. — Tel.
No. 817-12-84.” This is a definite offer.
Art. 1326. Advertisements for bidders are simply invitations to make proposals, and the
advertiser is not bound to accept the highest or lowest bidder, unless the contrary
appears.
 Advertisements for bidders generally not definite offers.

(1) Acceptance of bid. — In an advertisement for bidders, the advertiser is not the
one making the offer. In reality, the bidder is the one making the offer which the
advertiser is free to accept or reject.
(a) Acceptance by the advertiser of a given bid is necessary for a contract to
exist between the advertiser and the bidder, regardless of the terms and
conditions of his bid. (Surigao Mineral Reservation Board vs. Cloribel , 24
SCRA 898 [1968].)
 Where under the rules of the bidding it is only upon receipt of the notice
of acceptance of the bid that the formal contract shall be executed, in the
absence of such notice and execution of the contract, there is no meeting
of the minds. (Santamaria vs. Court of Appeals, 187 SCRA 186 [1990].)
(b) As a general rule, the advertiser is not bound to accept the highest bidder
(as when the offer is to buy) or the lowest bidder (as when the offer is to
construct a building) unless the contrary appears.
 Where a seller reserved the right to refuse to accept the bid made, a
binding sale is not perfected until the seller accepts the bid. The seller
may exercise his right to reject any bid after the auctioneer has accepted
a bid. (Caugma vs. People, 486 SCRA 611 [2006].)
(2) Compliance with terms of bid. —
(a) One who submits a bid not only signifies assent to the terms and conditions
of a proposal, but impliedly binds himself to them, if and when the bid is
considered. (Insular Life Assn. Co., Ltd. vs. Asset Builders Corp ., 422 SCRA
148 [2004].)

 The owner of the property which is advertised for sale, either at public or
private auction, has the right to prescribe the manner, conditions and
terms of the sale and anybody participating in such sale is bound by all
the conditions, whether he knew them or not. ( Leoquinco vs. Postal
Savings Bank, 47 Phil. 772 [1925]; Borromeo vs. City of Manila, 62 Phil.
512 [1935].)
 Even a government-owned corporation, after acceptance of a bid, in the
absence of justifiable reasons, cannot simply refuse to execute the
contract and thereby avoid it to the prejudice of the other party under
the guise of protecting the public interest; otherwise, the door would be
wide open to abuses and anomalies more detrimental to public interest.
(Central Bank vs. Court of Appeals, 63 SCRA 431 [1975].)

Art. 1327. The following cannot give consent to a contract:

(1) Unemancipated minors;

(2) Insane or demented persons, and deaf-mutes who do not know how to write.

Legal Capacity of Contracting Parties. —

 Capacity of the contracting parties - essential element of a contract; indispensable
requisite of consent = not expressly mentioned in the Civil Code since effective
consent presupposed capacity to give it
 Incapacitated persons. — (Art. 1327):
(1) Unemancipated minors - persons who have not yet reached the age of majority
(18 years) and are subject to parental authority. (see Family Code, Art. 234 &
236)
(2) insane or demented persons - broad enough to cover all cases where one or
both of the contracting parties are unable to understand the nature and
consequences of the contract at the time of its execution, such as those in a
state of drunkenness or under a hypnotic spell or who are suffering from any
kind of mental incapacity whatsoever
(3) deaf-mutes who do not know how to write.
 the only way by which any one of those enumerated above can enter into a
contract is to act through a parent or guardian. If this requirement is not
complied with, the result is a defective contract.
 If only one of the contracting parties is incapacitated to give his consent, the
contract is voidable.
 If both of them are incapacitated to give their consent, the contract is
unenforceable.
Insane or demented persons. —
 must exist at the time of contracting
 Unless proved otherwise, a person is presumed to be of sound mind at any
particular time and the condition is presumed to continue to exist. ( Mendezona
vs. Ozamiz, 376 SCRA 482 [2002]; Torres de Bueno vs. Lopez, 48 Phil. 772 [1926].)
 the mere fact that the vendor was judicially declared mentally incapacitated
nine (9) days after the execution of the deed of sale does not prove
conclusively that he was incapacitated when the contract was executed, and in
the absence of sufficient proof that he was suffering from mental alienation at
the specified time, the declaration does not warrant the annulment of said
contract. (Carillo vs. Jaojoco, 46 Phil. 957 [1924].)
Deaf-mutes. —

 deaf-mute who knows how to write - contract entered into is perfectly valid
 deaf-mute who does not know how to write - either voidable or unenforceable,
depending upon whether one or both of the parties are incapacitated.

Art. 1328. Contracts entered into during a lucid interval are valid. Contracts agreed to in a
state of drunkenness or during a hypnotic spell are voidable.

 Lucid interval - is a temporary period of sanity. A contract entered into by an insane

or demented person during a lucid interval is valid.
  must be shown that there is a full return of the mind to sanity as to enable him
to understand the contract he is entering into.
 A contract entered into by a person under guardianship for insanity will be
upheld, provided, it is shown that at the time of entering into said contract, he
was not insane, or that his mental defect, if mentally deranged, did not interfere
with or affect his capacity to appreciate the meaning and significance of the
transaction entered into by him. As to such person, his insanity must be
presumed to continue at the moment of contracting, but such presumption is
prima facie and may be rebutted. (Dumaguin vs. Reynolds, 92 Phil. 66 [1952].)
 Drunkenness and hypnotic spell - impair the capacity of a person to give intelligent
consent. (8 Manresa 660-661.)  equivalent to temporary insanity
 contract entered into in a state of drunkenness or during a hypnotic spell
voidable, and it is not required that such state was procured by the circumvention
of the other party.

Art. 1329. The incapacity declared in Article 1327 is subject to the modification
determined by law, and is understood to be without prejudice to special disqualifications
established in the laws.

Incapacity declared in Article 1327 subject to modifications.

 In general, the contracts entered into by the persons enumerated in Article 1327 are
voidable. (Art. 1390.)
 Their incapacity may be modified by law -- can also give valid consent, thus:
(1) When necessaries such as food, are sold and delivered to a minor or other
person without capacity to act, he must pay a reasonable price therefor. (Art.
1489; see also Art. 194, Family Code.)
(2) if entered into through a guardian or legal representative. (see Art. 1381[1, 2].)
(3) where the minor who was near majority age misrepresented his actual age and
convincingly led the other party to believe in his legal capacity. ( Mercado vs.
Espiritu, 37 Phil. 215 [1917]
(4) The parents may entrust the management or administration of any of their
properties to an unemancipated child. (Art. 227, Family Code)

 Other special disqualifications may be provided by law, in addition to the incapacity

declared in Article 1327
(1) Sec. 2, Rule 92, Rules of Court, the following are considered incompetents and
may be placed under guardianship:
(a) persons suffering the accessory penalty of civil interdiction (Art. 34, RPC)
(b) hospitalized lepers
(c) prodigals (spendthrifts)
(d) deaf and dumb who are unable to read and write
(e) those who are of unsound mind even though they have lucid intervals; and
 (f) those who, by reason of age, disease, weak mind and other similar causes,
cannot without outside aid, take care of themselves and manage their
property, becoming thereby an easy prey for deceit and exploitation.
 A contract entered into by any of the above is valid except where it is
voidable:
a) by reason of incapacity under Articles 1327 and 1328
b) by reason of causes which vitiate consent (Art. 1330.)
c) where the incompetent has been placed under guardianship

(2) The following, among others, cannot also give valid consent:

(a) insolvents until discharged (Insolvency Law, Sec. 1.);

(b) husband and wife with respect to sale of property to each other (Art. 1490)
or donation of property to each other (Art. 87,11 Family Code.), or donation
of any community or conjugal partnership property to a third person
without the consent of the other. (Arts. 98, 125,12 Ibid.)

(c) other persons especially disqualified by law. (Arts. 1491, 1789)

 Where the disqualification to contract amounts to a prohibition to contract on

grounds of public policy such as the prohibition with respect to husband and
wife, public officials and employees, judges and lawyers, are void in accordance
with Article 1409(2) and Article 5 of the Civil Code

Effect of weakness of mind.

 not a ground for avoiding a contract unless there is “great weakness of mind in a
person executing a conveyance of land arising from age, sickness or any other
cause”
(1) In a case, although at the time of the sale the vendor was already of advanced
age (83 years old), yet it was ruled that he was still physically fit and his mind
was keen and clear as shown by the several letters and documents signed and
executed by him many months after the execution of the deed of sale in
question. (Cui vs. Cui, 100 Phil. 913 [1957].)

(2) The fact that the vendor was 82 years, sick and bedridden when she affixed her
thumbmark to the contract of sale was held not a ground for vacating the
contract where the respondents failed to prove that she was physically and
mentally incapable of entering into the contract. It is of no moment that persons
merely affixed his thumbmark on the document even though he was able to
read and write, if the deed is in all respects a valid one. ( Yason vs. Arciaga, 449
SCRA 458 [2005].

(3) Where, however, the seller was already 100 years old, very ill and could not talk
when his thumbmark was affixed to a notarized deed of sale of a parcel of land
with an area of 18 hectares and an assessed value of P4,300 for only P700.00,
the deed was held void and inexistent for lack of consent. ( Javier vs. Cruz, 80
SCRA 343 [1977].)
  The general rule is that a person is not incompetent to contract merely
because of advanced years or by reason of physical infirmities. However, when
such age or infirmities have impaired the mental faculties as to prevent the
person from properly, intelligently and firmly protecting his property rights,
then he is undeniably incapacitated. (Domingo vs. Court of Appeals, 367 SCRA
368 [2001]; Paragas vs. Heirs of D. Balecano, 468 SCRA 717 [2005]; Landicho vs.
Sia, 576 SCRA 602 [2009].)

Art. 1330. A contract where consent is given through mistake, violence, intimidation,
undue influence, or fraud is voidable.

Vices of Consent. — Art. 1330 enumerates the different vices which may vitiate consent.
In addition to the five stated in this article, we can also include simulation of contracts.

 Distinct Groups —
1) vices of the will - comprehends mistake, violence, intimidation, undue influence,
and fraud

2) vices of declaration - comprehends all forms of simulated contracts.

 Negative enumeration of the different requisites of consent:
1) must be intelligent - vitiated by mistake or error
2) must be free – vitiated by violence, intimidation and undue influence

3) must be spontaneous – vitiated by fraud.

Plus -
4) must be real – vitiated by simulation of contracts
 absence of any of the first three requisites  the contract is voidable

 absence of the fourth requisite  may be either void ab initio or valid as far as
the real agreement is concerned depending upon whether the simulation is
absolute or relative (Art. 1345)

Art. 1331. In order that mistake may invalidate consent, it should refer to the substance of
the thing which is the object of the contract, or to those conditions which have principally
moved one or both parties to enter into the contract.
Mistake as to the identity or qualifications of one of the parties will vitiate consent only
when such identity or qualifications have been the principal cause of the contract.

A simple mistake of account shall give rise to its correction.

 Mistake. — no distinction between mistake and ignorance  as understood in the

Civil Code, mistake may be defined not only as the wrong conception of a thing, but
also as the lack of knowledge with respect to a thing.
 Mistakes which vitiate consent. —
Two General Kinds:
 1) mistake of fact - when one or both of the contracting parties believe that a fact
exists when in reality it does not, or that such fact does not exist when in reality it
does
2) mistake of law - when one or both of the contracting parties arrive at an
erroneous conclusion regarding the interpretation of a question of law or the
legal effects of a certain act or transaction
 As a general rule, it is only a mistake of fact which will vitiate consent thus
rendering the contract voidable; a mistake of law, on the other hand, does not
render the contract voidable because of the well-known principle that ignorance
of the law does not excuse anyone from compliance therewith. ( Luna vs. Linatoc,
74 Phil. 15)
 Mistake of fact — Classes:
(1) Mistake as to object (error in re) (Art. 1331 par. 1):
(a) mistake as to the identity of the thing (object of the contract)
(b) mistake as to the substance of the thing
(c) mistake as to the conditions of the thing, provided such conditions have
principally moved one or both parties to enter into the contract; and
(d) mistake as to the quantity of the thing, provided that the extent or
dimension of the thing was one of the principal reasons of one or both of
the parties for entering into the contract
 mistake should refer to the material out of which the thing is made and
the nature which distinguishes it, generically or specifically, from all
others
 if the mistake refers only to accidental or secondary qualities, the contract
is not rendered voidable
 mistake as to the quantity of the thing distinguished from a mistake of
account or calculation (Art. 1331 par. 3):
 quantity - there is a real mistake as to the extent of the object of the
contract  contract is voidable
 account - there is only an apparent mistake, a mere mistake in
mathematical computation  contract valid
Example:
If the parties enter into a contract with respect to a parcel of land
which they believe has an area of 100 hectares, when in reality it has
an area of only 50 hectares, there is mistake as to the quantity of the
thing; the contract in this case is voidable. If, on the other hand, they
enter into a contract in which it is agreed that a parcel of land
consisting of 10 hectares shall be sold for P1,000 per hectare, and they
thought that the total price is only P5,000, there is a mistake of
account; the mistake in this case can only be corrected.
 (2) Mistake as to person (error in persona): (Art. 1331 par. 2)
 Requisites:
1) the mistake must be either with regard to the identity or with regard to the
qualification of one of the contracting parties
2) such identity or qualification must have been the principal consideration for
the celebration of the contract
 Generally, occurs in obligations to do which require special
qualifications of the parties or which are based on confidence.
Examples: remuneratory contracts, partnership, agency, deposit,
commodatum, and lease of services

Art. 1332. When one of the parties is unable to read, or if the contract is in a language not
understood by him, and mistake or fraud is alleged, the person enforcing the contract
must show that the terms thereof have been fully explained to the former.

 General Rule – person who alleges mistake or fraud has burden of proof since it is
presumed that a person takes ordinary care of his concerns and that private
contracts have been fair and regular.
 Art. 1332 is an exception to this rule = when one of the parties is unable to read or if
contract is in a language not understood by him  party enforcing the contract has
burden of proof to show absence of fraud or mistake and that terms were fully
explained (mistake or fraud presumed) (Mayor vs. Belen, 430 SCRA 561 [2004];
Feliciano vs. Zaldivar, 503 SCRA 182 [2006].)

Art. 1333. There is no mistake if the party alleging it knew the doubt, contingency or risk
affecting the object of the contract.

 Prior knowledge (party alleging) of the doubt, contingency, or risk affecting the
object of the contract = assumed that he was willing to take chances  cannot
claim mistake (Martinez vs. Court of Appeals, 56 SCRA 647 [1974].) This is especially
true where the contract is aleatory in nature. (Art. 2010)

EXAMPLE: B bought a parcel of land from S who informed him before the contract
was perfected that the land was involved in a litigation in which C is the claimant. In
case the land is recovered later on by C, B cannot allege mistake in his contract
because he knew the risk that the land might later on be recovered by C.

Art. 1334. Mutual error as to the legal effect of an agreement when the real purpose of
the parties is frustrated, may vitiate consent.

 Exception to the rule that mistake of law will not vitiate consent
Requisites:
1) the mistake must be with respect to the legal effect of an agreement
2) the mistake must be mutual
3) the real purpose of the parties must have been frustrated
  mistake on a doubtful question of law, or on the construction or application of
law, this is analogous to a mistake of fact, and the maxim of ignorantia legis
neminem excusat does not apply

Art. 1335. There is violence when in order to wrest consent, serious or irresistible force is
employed.
There is intimidation when one of the contracting parties is compelled by a reasonable
and well-grounded fear of an imminent and grave evil upon his person or property, or
upon the person or property of his spouse, descendants or ascendants, to give his
consent.
To determine the degree of the intimidation, the age, sex and condition of the person
shall be borne in mind.

A threat to enforce one’s claim through competent authority, if the claim is just or
legal, does not vitiate consent.

Art. 1336. Violence or intimidation shall annul the obligation, although it may have been
employed by a third person who did not take part in the contract.

Violence and Intimidation (Duress) —

 Art. 1335 par.1 - definition of violence; external; prevents the expression of the will
substituting it with a material act dictated by another  physical compulsion
Requisites:
1) the force employed to wrest consent must be serious or irresistible

2) it must be the determining cause for the party upon whom it is employed in
entering into the contract
 Art. 1335 par.2 - definition of intimidation; internal; influences the operation of the
will, inhibiting it in such a way that the expression thereof is apparently that of a
person who has freely given his consent  moral compulsion

Requisites:
1) one of the contracting parties is compelled to give his consent by a reasonable
and well-grounded fear of an evil
2) the evil must be imminent and grave
3) the evil must be unjust

4) the evil must be the determining cause for the party upon whom it is employed
in entering into the contract
 reasonable and well-grounded fear = presupposes that the threat or intimidation
must be actual, serious and possible of realization, and that the actor can and still
will carry out his threat

Determination of degree of intimidation. — Art. 1335 par. 3

 Condition - not only the resolute or weak character of the person intimidated, but
also his other circumstances, e.g. capacity or culture, which permits him to
appreciate whether or not there is an imminent danger, his position, by which he
 can determine whether or not it gives him a chance to thwart the danger, his
financial condition, because while a certain amount may mean nothing to some, to
others it may mean economic ruin
 must also consider the conditions of such spouse, descendant or ascendant,
because, although the evil which threatens may not be sufficiently grave or serious
to bring harm to the contracting party, it may have a different effect upon a weak
woman, an aged father, or a defenseless child.

Effect of just or legal threat. — Art. 1335 par. 4

 threat to enforce one’s claim through competent authority, if the claim is just or
legal, does not vitiate consent
 where a demand for the settlement of an obligation accompanied by the threat of a
lawsuit upon failure to settle obligation  threat is proper and cannot constitute
intimidation

Art. 1337. There is undue influence when a person takes improper advantage of his power
over the will of another, depriving the latter of a reasonable freedom of choice. The
following circumstances shall be considered: the confidential, family, spiritual and other
relations between the parties, or the fact that the person alleged to have been unduly
influenced was suffering from mental weakness, or was ignorant or in financial distress.

 Undue influence which vitiates consent. — influence which deprives a person of his
free agency
 Test to determine whether or not there is undue influence which will invalidate a
contract = determine whether or not the influence exerted has so overpowered or
subjugated the mind of a contracting party as to destroy his free agency, making
him express the will of another rather than his own
 Considering the following circumstances: the confidential, family, spiritual and
other relations between the parties, or the fact that the person alleged to have
been unduly influenced was suffering from mental weakness, or was ignorant or
in financial distress

Art. 1338. There is fraud when, through insidious words or machinations of one of the
contracting parties, the other is induced to enter into a contract which, without them, he
would not have agreed to.

 Definition of fraud which will render a contract voidable

 fraud in the perfection of a contract - must not be confused with the fraud
which is mentioned in Arts. 1170 and 1171 (fraud in the performance of an
obligation)
 Kinds of fraud. —
1) dolo causante - causal fraud refers to those deceptions or misrepresentations of
a serious character employed by one party and without which the other party
would not have entered into the contract (Art. 1338)
 2) dolo incidente - incidental fraud refers to those deceptions or mispresentations
which are not serious in character and without which the other party would still
have entered into the contract (Art. 1344)

Distinctions:

(1) The first refers to a fraud which is serious in character, while the second is not
serious.
(2) The first is the cause which induces the party upon whom it is employed in
entering into the contract, while the second is not the cause.
(3) The effect of the first is to render the contract voidable, while the effect of the
second is to render the party who employed it liable for damages.
Requisites. — (Arts. 1338 to 1344)

(1) Fraud or insidious words or machinations must have been employed by one of
the contracting parties;
(2) The fraud or insidious words or machinations must have been serious;
(3) The fraud or insidious words or machinations must have induced the other party
to enter into the contract; and
(4) The fraud should not have been employed by both of the contracting parties or
by third persons.
 Nature of fraud. —
 the essence of this class of fraud lies in the deception or misrepresentation
employed by one of the contracting parties to secure the consent of the other.
 indicated by the phrase “insidious words or machinations’’ used in Art. 1338
= broad enough to comprehend any kind of deception, e.g. false promises,
fictitious names, fictitious qualifications, or fictitious authority
 must be proof of concrete facts constituting the fraud or insidious words or
machinations used by one party without which he would not have agreed to
the contract
 also essential that such insidious words or machinations must be prior to or
contemporaneous with the birth or perfection of the contract
 Eguaras vs. Great Eastern Life Assurance Co . 33 Phil. 263 - action for the
collection of the value of an insurance policy

Facts: The records show that Dominador Albay filed an application for an
insurance on his life with the defendant company; that since Albay was in
poor health, the person who presented himself for medical examination to
the company physician was not the applicant, but Castor Garcia, who posed
as Dominador Albay; that as a result of the favorable report of the physician,
the defendant company executed the contract of insurance; that a short time
thereafter the insured died. In this action the company contends that the
contract should be annulled on the ground of fraud.
 Held: “The fraud which gave rise to the mistaken consent given by the
defendant company to the application for insurance made by Albay and to
the execution of the contract through deceit, is plain and unquestionable. The
fraud consisted in the substitution at the examination of Castor Garcia in
place of the insured Dominador Albay, and as the deceit practiced in the said
contract is of a serious nature, the same is also ipso facto void and ineffective
(voidable), in accordance with the provision of Article 1270 (now Art. 1344) of
the Civil Code.

Art. 1339. Failure to disclose facts, when there is a duty to reveal them, as when the
parties are bound by confidential relations, constitutes fraud.

 where the defendant, who is the manager of a certain corporation as well as the
owner of about 3/4 of the shares of capital stock thereof, bought through an agent
800 shares of capital stock from the plaintiff, without disclosing the fact that he had
just negotiated the sale of valuable properties to the government thus enhancing
the value of the capital stocks of the company, such nondisclosure is clearly
fraudulent; therefore, the sale can be annulled

Art. 1340. The usual exaggerations in trade, when the other party had an opportunity to
know the facts, are not in themselves fraudulent.

 Azarraga vs. Gay, 52 Phil. 599.

“When the purchaser proceeds to make investigations by himself, and the vendor
does nothing to prevent such investigations from being as complete as the
former might wish, the purchaser cannot later allege that the vendor made false
representations to him. “One who contracts for the purchase of real estate in
reliance on the representations and statements of the vendor as to its character
and value, but after he has visited and examined it for himself, and has had the
means and opportunity of verifying such statements, cannot avoid the contract
on the ground that such statements were false or exaggerated.’’ (To the same
effect: Songco vs. Sellner, 37 Phil. 254; Puato vs. Mendoza, 64 Phil. 457)

Art. 1341. A mere expression of an opinion does not signify fraud, unless made by an
expert and the other party has relied on the former’s special knowledge.

 Songco vs. Sellner 37 Phil. 254

The principal defense in this action for specific performance relates to the
false representation which, it is claimed, was made by the plaintiff Songco with
respect to the quantity of uncut cane standing in the fields at the time the
defendant Sellner became the purchaser thereof. It is proved that Songco
estimated that the crop would yield 3,000 piculs of sugar. As the crop turned
out, it produced only 2,017 piculs of sugar. The question now is whether such
representation of the plaintiff vendor is fraudulent, which, under Art. 1338,
would invalidate the contract. Holding that such representation can only be
considered as a mere expression of an opinion, the Supreme Court ruled:
 “It is of course elementary that a misrepresentation upon a mere matter of
opinion is not an actionable deceit, nor is it a sufficient ground for avoiding a
contract as fraudulent. We are aware that statements may be found in the
books to the effect that there is a difference between giving an honest opinion
and making a false representation as to what one’s real opinion is. We do not
think, however, that this is a case where any such distinction should be drawn.
“The law allows considerable latitude to seller’s statement, or dealer’s talk,
and experience teaches that it is exceedingly risky to accept it at its face value.
The refusal of the seller to warrant his estimate should have admonished the
purchaser that such estimate was put forth as a mere opinion; and we will not
now hold the seller to a liability equal to that which would have been created
by a warranty, if one had been given.
“Assertions concerning the property which is the subject of a contract of
sale, or in regard to its qualities and characteristics, are the usual and ordinary
means used by sellers to obtain a high price and are always understood as
affording to buyers no ground for omitting to make inquiries. A man who
relies upon such an affirmation made by a person whose interest might so
readily prompt him to exaggerate the value of his property does so at his peril
and must take the consequences of his own imprudence.’’
Art. 1342. Misrepresentation by a third person does not vitiate consent, unless such
misrepresentation has created substantial mistake and the same is mutual.

 Even without Art. 1342, this rule would still be applicable since it is a logical corollary
to the principle that in order to vitiate consent, the fraud must be employed only by
one of the contracting parties.
 not applicable:

1) if the third person makes the misrepresentation with the complicity or, at least,
with the knowledge, but without any objection, of the contracting party who is
favored;
2) if the misrepresentation has created substantial mistake and the same is mutual

Art. 1343. Misrepresentation made in good faith is not fraudulent but may constitute
error.

Art. 1344. In order that fraud may make a contract voidable, it should be serious and
should not have been employed by both contracting parties.

Incidental fraud only obliges the person employing it to pay damages.

 Art. 1344 par. 1 - second indispensable requisite for fraud to vitiate consent - should
be serious in character.
 serious character refers not to its influence, but to its importance or magnitude
 the annulment of a contract cannot be invoked:
1) just because of the presence of minor or common acts of fraud whose veracity
could easily have been investigated; or
 2) because of the presence of ordinary deviations from the truth, deviations,
which are almost inseparable from ordinary commercial transactions,
particularly those taking place in fairs or markets
 third indispensable requisite - should have induced the other party to enter into the
contract. (principal or causal inducement or consideration)
 If the fraud is merely incidental - party who is deceived would have agreed to the
contract even without it, his consent is not vitiated  contract valid but the party
who has employed it liable for damages
 Woodhouse vs. Halili 49 Off. Gaz. 3374

Plaintiff and defendant entered into a contract whereby it was agreed that
they shall organize a partnership for the bottling and distribution of Mission
soft drinks, plaintiff to act as industrial partner and manager, and defendant as
capitalist partner; that plaintiff was to secure the Mission soft drinks franchise
for and in behalf of the partnership; and that he was to receive 30% of the net
profits of the business. Because of the alleged failure of defendant to comply
with this contract after the bottling plant was already in operation, plaintiff
brought this action against him praying for the execution of the agreed
contract of partnership, an accounting of the profits of the business, as well as
damages amounting to P200,000. Defendant, in his answer, alleged that his
consent to the contract was secured through plaintiff’s false representation
that he had the exclusive bottling franchise of the Mission Dry Corporation in
the Philippines and that, although such franchise was later on obtained from
the Mission Dry Corporation, it was he, the defendant, and not the plaintiff,
who obtained it. He also presented a counterclaim for P200,000 as damages.

Consequently, the principal questions which will have to be decided in this

case are: first, whether or not the plaintiff had falsely represented that he had
the exclusive franchise to bottle Mission beverages in the Philippines; and
second, whether this false representation, if it existed, annuls the agreement to
form a partnership. Holding that there was breach of contract on the part of
the defendant as well as misrepresentation on the part of the plaintiff, the
Supreme Court, speaking through Justice Labrador, ruled:

“We now come to the legal aspect of the false representation. Does it
amount to a fraud that would vitiate the contract? It must be noted that fraud
is manifested in illimitable number of degrees or gradations, from the innocent
praises of a salesman about the excellence of his wares to those malicious
machinations and representations that the law punishes as a crime. In
consequence, Article 1270 (now Art. 1344) of the Civil Code distinguishes two
kinds of (civil) fraud or dolo — the causal fraud which may be a ground for the
annulment of a contract, and the incidental deceit, which only renders the
party who employs it liable for damages. This Court has held that in order that
fraud may vitiate consent, it must be the causal (dolo causante), not merely the
incidental (dolo incidente), inducement to the making of the contract. The
 record abounds with circumstances indicative of the fact that the defendant
was led to the belief that plaintiff had the exclusive franchise, but that the
same was to be secured for or transferred to the partnership. The plaintiff no
longer had the exclusive franchise, or the option thereto, at the time the
contract was perfected. But while he had already lost his option thereto (when
the contract was entered into), the principal obligation that he assumed or
undertook was to secure said franchise for the partnership, as the bottler and
distributor for the Mission Dry Corporation. We declare, therefore, that if he
was guilty of a false representation, this was not the causal consideration, or
the principal inducement, that led defendant to enter into the partnership
agreement. But, on the other hand, this supposed ownership of an exclusive
franchise was actually the consideration or price plaintiff gave in exchange for
the share of 30% granted him in the net profits of the partnership business.
Defendant agreed to give plaintiff 30% share in the net profits because he was
transferring his exclusive franchise to the partnership. “We conclude from the
above that while the representation that plaintiff had the exclusive franchise
did not vitiate defendant’s consent to the contract, it was used by plaintiff to
get from defendant a share of 30% of the net profits; in other words, by
pretending that he had the exclusive franchise and promising to transfer it to
defendant, he obtained the consent of the latter to give him (plaintiff) a big
slice in the net profits. This is the dolo incidente defined in Article 1270 (now
Art. 1344) of the Civil Code, because it was used to get the other party’s
consent to a big share in the profits, an incidental matter in the agreement.

Art. 1345. Simulation of a contract may be absolute or relative. The former takes place
when the parties do not intend to be bound at all; the latter, when the parties conceal
their true agreement.

Art. 1346. An absolutely simulated or fictitious contract is void. A relative simulation,

when it does not prejudice a third person and is not intended for any purpose contrary to
law, morals, good customs, public order or public policy binds the parties to their real
agreement.

Simulation of Contracts. —

1) Absolute - when there is colorable contract but it has no substance as the

contracting parties do not intend to be bound by the contract at all

e.g. when a debtor simulates the sale of his properties to a friend in order to
prevent their possible attachment by creditors; apparent contract is not really
desired or intended to produce legal effects or in any way alter the juridical
situation of the parties

2) Relative - when the contracting parties state a false cause in the contract to conceal
their true agreement

e.g. when a person conceals a donation by simulating a sale of the property to the
beneficiary for a fictitious consideration;
 The primary consideration in determining the true nature of a contract is the
intention of the parties. such intention is determined from the express terms of their
agreement as well as from their contemporaneous and subsequent acts ( Nena
Lazalita Tating vs. Felicidad Tating Marcella, et al., G.R. No. 155208, March 27,2007).

Effects. —

 other vices of consent render the contract voidable

 absolutely simulated contract is void
 relatively simulated contract binding and enforceable between the parties and their
successors in interest and the parties may recover from each other what they may
have given under the contract
 The legal presumption is in favor of the validity of contracts. The party who impugns
the validity and regularity of a contract has the burden of proving his allegation.

Contracts of Adhesion —

 Development Bank of the Philippines vs. Perez , G.R. No. 14854, Nov. 11,
2004 - A contract of adhesion is so-called because its terms are prepared by
only one party while the other party merely affixes his signature signifying his
adhesion thereto. A contract of adhesion is just as binding as ordinary contracts.
It is true that we have, on occasion, struck down such contracts as void when
the weaker party is imposed upon in dealing with the dominant bargaining
party and is reduced to the alternative of taking it or leaving it, completely
deprived of the opportunity to bargain on equal footing. Nevertheless, contracts
of adhesion are not invalid per se; they are not entirely prohibited. The one who
adheres to the contract is in reality free to reject it entirely; if he adheres, he
gives his consent.
 Sps. Francisco and Ruby Reyes vs. BPI Family Savings Bank, Inc. , et al., G. R.
Nos. 149840-41, March 31,2006, - where the petitioner spouses undertook to
secure the P15M loan of Transbuilders Resources & Development Corporation
to BPI-FSB “and other credit accommodations of whatever nature obtained by
the Borrower/Mortgagor” under the Real Estate Mortgage they executed in
favor of BPI-FSB, the SC held that while the stipulation proved to be onerous
to the petitioners, neither the law nor the courts will extricate a party from an
unwise or undesirable contract entered into with all the required formalities
and with full awareness of its consequences. Petitioners voluntarily executed
the REM on their property in favor of BPI-FSB to secure the loan. They cannot
now be allowed to repudiate their obligation to the bank after Transbuilder’s
default. While petitioner’s liability was written in fine print and in a contract
written by BPI-FSB, it has been the consistent holding of the Court that
contracts of adhesion are not invalid per se. On numerous occasions, the
Supreme Court has upheld the binding effects of such contracts.

Section 2. — Object of Contract

Concept of Object. —

 the objects of contracts and that of obligations are identical (Art. 1347 in relation to
Art. 1156)
 the object of a contract may be defined as the thing, right or service which is the
subject matter of the obligation which is created or established.

Art. 1347. All things which are not outside the commerce of men, including future things,
may be the object of a contract. All rights which are not intransmissible may also be the
object of contracts.
No contract may be entered into upon future inheritance except authorized by law.

All services which are not contrary to law, morals, good customs, public order or public
policy may likewise be the object of a contract.

Art. 1348. Impossible things or services cannot be the object of contracts.

Art. 1349. The object of every contract must be determinate as to its kind. The fact that
the quantity is not determinate shall not be an obstacle to the existence of the contract,
provided it is possible to determine the same, without the need of a new contract
between the parties.

What May Be the Object of Contracts. —

 General Rule - all things or services may be the object of contracts.

Requisites
1) The object should be within the commerce of men - should be susceptible of
appropriation and transmissible from one person to another
2) The object should be real or possible - should exist at the moment of the
celebration of the contract, or at least, it can exist subsequently or in the future.
3) The object should be licit - should not be contrary to law, morals, good customs,
public order or public policy
4) The object should be determinate, or at least, possible of determination, as to its
kind.

What cannot be the object of contracts:

1) Things which are outside the commerce of men
2) intransmissible rights;
3) future inheritance, except in cases expressly authorized by law
4) services which are contrary to law, morals, good customs, public order or
public policy
5) impossible things or services
6) objects which are not possible of determination as to their kind

Appropriability and transmissibility. —must be within the commerce of men

 Two conditions must concur
1) the thing, right or service should be susceptible of appropriation; and
 2) it should be transmissible from one person to another
 Those things, rights or services which do not possess these conditions or
characteristics are outside the commerce of men, and therefore, cannot be the
object of contracts. These include:

(1) those things which are such by their very nature, such as common things like
the air or the sea, sacred things, res nullius, and property belonging to the
public domain

(2) those which are made such by special prohibitions established by law, such as
poisonous substances, drugs, arms, explosives, and contrabands; and

(3) those rights which are intransmissible because either they are purely personal
in character, such as those arising from the relationship of husband and wife,
like jus consortium, or from the relationship of paternity and filiation, like
patria potestas, or they are honorary or political in character, such as the right
to hold a public office and the right of suffrage.

 Thus, in this jurisdiction, it has been held that communal things, such as
public plazas, sidewalks, streets, rivers, fountains and other things for public
use cannot be sold or leased because they are by their very nature outside
the commerce of men.

Existence of object. — should be in existence at the moment of the celebration of

the contract, or at least, it can exist subsequently or in the future

 Future things – may be interpreted in two possible ways:

1) as a conditional contract if its efficacy should depend upon the future
existence of the thing, or

2) as an aleatory contract if one of the contracting parties should bear the risk
that the thing will never come into existence.
 In case of doubt about the nature of the contract, it must be deemed to be
conditional because of the principle stated in Art. 1378 of the Code that the
doubt shall be resolved in favor of the greatest reciprocity of interests.
 Rule with respect to future inheritance. — exception to the rule that a future thing
may be the object of a contract. (Art. 1347 par. 2)
 an agreement for the partition of the estate of a living person, made between
those who, in case of death, would inherit the estate is null and void. ( Arroyo vs.
Gerona, 58 Phil. 226)
 It has also been held that where the vendor undertook to convey to the vendee
his participation in the property left by his deceased father, the part of the
property belonging to his mother, who is still living, cannot at all be affected by
the conveyance, since his interest in the property of his mother at the time of the
execution of the deed of sale was a future inheritance and could not be the
 subject matter of a valid contract, pursuant to the second paragraph of Art. 1347.
(Rivero vs. Serrano, 48 Off. Gaz. 642)
 Exceptions. —

(1) Under Art. 130 of the Code, which allows the future spouses to give or donate
to each other in their marriage settlement their future property to take effect
upon the death of the donor and to the extent laid down by the provisions of
the Civil Code relating to testamentary succession; and

(2) Under Art. 1080 of the Code, which allows a person to make a partition of his
estate by an act inter vivos, provided that the legitime of compulsory heirs is
not prejudiced.

Impossible things or services. — (Art. 1348)

 impossible services - distinction should be made between absolute and relative
impossibility
 Absolute impossibility, which arises from the very nature or essence of the act or
service itself, renders the contract void
 Relative impossibility, which arises from the circumstances or qualifications of
the obligor rendering him incapable of executing the act or service, allows the
perfection of the contract, although the fulfillment thereof is hardly probable
e.g. in a contract of partnership where one of the partners obligates himself to
contribute to the common fund an amount which is beyond his means, the
contract is not void because the impossibility may disappear.

 When the impossibility is permanent, however, as in the case of a person who is

unable to perform the service which he has contracted because of total
blindness, the contract is void.
Licitness of object. — (Art. 1347 par. 3)
 complements the provision of Art. 1306 of the Codel; same principles apply
Determinability of object. — (Art. 1349)
 simply means that the genus of the object should be expressed although there
might be no determination of the individual specie; see Art. 1246
 Hence, if A and B enter into an agreement by virtue of which the former binds
himself to deliver “ten horses” to the latter, the contract is perfectly valid since
the law merely requires that the object must be determinate, or at least,
determinable, as to its kind.
 If class or genus to which the object belongs is specified but no quantity –
contract valid provided it is possible to determine the same, without the need of
a new contract between the parties (Art. 1349, second sentence)
e.g. where the contract itself has established the basis upon which such quantity
can be determined, such as the needs of a family, the provisions needed for
 a factory, the materials for a particular work, and others of a similar nature.
(Liebenow vs. Phil. Vegetable Co., 39 Phil. 63.)

 This can be determined from the purpose or motive of the contract itself. In case
of failure of any of these means, the contract is without force whatsoever.
 Aurora Fe B. Camacho vs. CA et al. , G.R. No.127520, Feb. 9, 2007, the SC held
that Arts. 1349 and 1460 of the New Civil Code provide the guidelines in
determining whether or not the object of the contract is certain. In this case,
the object of the contract is a 5,000 sq. m. portion of Lot 261, Balanga
Cadastre. The failure of the parties to state the exact location in the contract
is of no moment. This is a mere error occasioned by the parties’ failure to
describe with particularity the subject property, which does not indicate the
absence of the principal object as to render the contract void. Since in this
case, Camacho bound herself to deliver a portion of Lot 261 to Atty. Banzon,
the description of the property subject of the contract is sufficient to validate
the same.

Section 3. — Cause of Contracts

Art. 1350. In onerous contracts the cause is understood to be, for each contracting party,
the prestation or promise of a thing or service by the other; in remuneratory ones, the
service or benefit which is remunerated; and in contracts of pure beneficence, the mere
liberality of the benefactor.

Art. 1351. The particular motives of the parties in entering into a contract are different
from the cause thereof.

Concept of Cause. —

 the why of the contract or the essential reason which moves the contracting parties
to enter into the contract.
 the immediate, direct or most proximate reason which explains and justifies the
creation of an obligation through the will of the contracting parties. ( General
Enterprises, Inc. vs. Lianga Bay Logging Co., 11 SCRA 733.)
 onerous contracts - the cause is understood to be, for each contracting party,
the prestation or promise of a thing or service by the other
 remuneratory contracts - the service or benefit which is remunerated
 contracts of pure beneficence - the liberality of the benefactor

Distinguished from consideration. —

 in this jurisdiction, cause and consideration are used interchangeably = causa is

merely the civil law term, while consideration is the common law term
Distinguished from object. —

 cause must not be confused with the object of the contract

 remuneratory -
  cause = is the service or benefit; object = thing given in remuneration
 gratuitous –
 cause = liberality of the donor or benefactor; object = thing given or
donated.
 onerous contracts
 cause (for each contracting party) = prestation or promise of a thing or
service by the other; object = thing or service itself
e.g. in a contract of sale – cause for vendor = purchase price (or obligation of
vendee); cause for vendee = thing (obligation of vendor); objects = thing
sold and price paid.
Example: (Manressa and Castan)
If A sells, an automobile to B for P20,000, delivery and payment to be made
at some specified date, the cause of the contract, as far as A is concerned, is
the promise of B to pay him P20,000, while the cause, as far as B is concerned,
is the promise of A to deliver the automobile to him. The objects of the
contract, on the other hand, are the automobile and the purchase price of
P20,000.
 Tolentino, agrees as to cause (vendor = obligation of the vendee to pay
the price, vendee = obligation of the vendor to deliver the automobile)
BUT maintains that in the example given, the object is the automobile
itself because it is the starting point of agreement, without which the
negotiations would never have begun.  object of an onerous contract is
the same as to both parties, although the cause is different.

Distinguished from motives. —

(1) While the cause is the direct or most proximate reason of a contract, the motives
are the indirect or remote reasons;

(2) While the cause is the objective or juridical reason of a contract, the motives are
the psychological or purely personal reasons;

(3) While the cause is always the same, the motives differ for each contracting party;

(4) While the legality or illegality of the cause will affect the existence or validity of the
contract, the legality or illegality of the motives will not affect the existence of the
contract.

 motive may be regarded as causa when the contract is conditioned upon the
attainment of the motive of either contracting party  motive becomes causa
when it predetermines the purpose of the contract.

Examples are the decided cases. Thus —

 (1) Where a married man of mature years donated a parcel of land to a girl of
sixteen subject to the condition that the latter shall cohabit with him, and
such condition is accepted, it is clear that the donation is conditioned upon
the attainment of the motive of the donor; in other words, it predetermines
the purpose of the contract. Thus considered, the conveyance is clearly
predicated upon an illegal causa. Consequently, it is void. Therefore, under
what is now Art. 1412 of the New Civil Code, there can be no recovery of
what has already been delivered. (Liguez vs. CA, 102 Phil. 577.)

(2) Where a mother sold two fishponds to a daughter and the latter, in turn,
resold the same fishponds to her and her stepfather, as a consequence of
which said fishponds were converted into conjugal properties, it is clear that
the motive or purpose is to circumvent the law against donations between
spouses. This motive or purpose is the illegal causa rendering the contract
void. (Rodriguez vs. Rodriguez, 20 SCRA 908.)

(3) Where a Filipino leased a parcel of land to an alien for 99 years with an option
to buy the property within 50 years, provided that the latter shall become a
Filipino citizen, it is clear that the motive or purpose of the arrangement,
which has resulted in the virtual transfer of ownership to the lessee, is to
circumvent the Constitutional prohibition of transfer of lands to aliens. This
motive or purpose is the illegal causa rendering the contract void. However, it
will be the provision of Art. 1416 and not of Art. 1412, of the New Civil Code
that will apply. Because of public policy, the lessor will be allowed to recover
the property. (Phil. Banking Corp. vs. Lui She, 21 SCRA 52.)

Cause in Onerous Contracts. —

 understood to be, for each contracting party, the prestation or promise of a thing or
service by the other  a promise made by one party may be a sufficient cause for a
promise made by another party.
 Notnecessary that the cause or consideration should pass from one party to the
other at the time of the execution of the contract. ( Enriguez de Cavada vs. Diaz,
37 Phil. 982; Phil. Banking Corp. vs. Lui She, 102 Phil. 577)
 where a logging company by contract designated a certain agency as its
distributor to export logs to Korea and Europe at the best market price
obtainable on condition that it would pay the latter a commission of 13% of
the gross value of the logs, it was held that for the former the cause of the
agreement is the distribution of its logs in the areas agreed upon which the
latter undertook to accomplish, whereas for the latter the cause is its
commitment to sell or export the logs for onerous consideration. ( General
Enterprises, Inc. vs. Lianga Bay Co., 11 SCRA 733)
Accessory contracts. —

 the rule is that the cause of the accessory contract is identical with that of the
principal contract.
  Mortgage (accessory contract) = cause is the same as the principal contract from
which it receives its life, and without which it cannot exist as an independent
contract, although it may secure an obligation incurred by another. ( China
Banking Corp. vs. Lichauco, 46 Phil. 460)
 same principle applies to an accommodation party who binds himself jointly and
severally with the principal debtor for the payment of a debt by affixing his
signature to a promissory note for the accommodation of the latter. This is so in
spite of the fact that he might not have received even a single centavo of the
money given to the accommodated party. ( National Bank vs. Maza, 48 Phil. 207;
Acuna vs. Veloso, 50 Phil. 241. But see Standard Oil Co. vs. Arenas, 19 Phil. 363)

Moral obligations. —

 arises wholly from ethical considerations, unconnected with any civil obligation =
not demandable in law but only in conscience  cannot constitute a sufficient cause
or consideration to support an onerous contract, (Fisher vs. Robb, 69 Phil. 101)
 based upon a previous civil obligation which has already been barred by the statute
of limitations at the time when the contract is entered into  constitutes a sufficient
cause or consideration to support the said contract. ( Villaroel vs. Estrada, 71 Phil. 14)
 Fisher vs. Robb 69 Phil. 101

The defendant was one of the organizers of a certain enterprise known as the
Philippine Greyhound Club, Inc. which was formed for the purpose of introducing
dog racing in the Philippines, while the plaintiff was one of those who had
invested a certain sum of money in the venture. It appears that this venture did
not succeed, and, as a result, the defendant wrote a letter to the plaintiff
explaining the critical condition of the company, and, at the same time, stating
that he felt “a moral responsibility for those who had sent in the second payment
of their subscription” and that he will see to it that “stockholders who had made
such payment shall be reimbursed such amount as soon as possible out of his
own personal funds.” This action now is brought to enforce the “obligation.” The
principal question to be decided, among others, is whether there is a sufficient
cause or consideration to justify the promise made by the defendant in his letter.

Answering this question in the negative, the Supreme Court, speaking

through Justice Villareal, held: “The contract sought to be judicially enforced by
the plaintiff appellee against the defendant is onerous in character, because it
supposes the deprivation of the latter of an amount of money which impairs his
property, which is a burden, and for it to be legally valid it is necessary that it
should have a consideration consisting in the lending or promise of a thing or
service by such party. The defendant-appellant is required to give a thing, namely
the payment of the sum of P2,000, but the plaintiff-appellee has not given or
promised anything or service to the former which may compel him to make such
payment. The promise which said defendant-appellant has made to the plaintiff-
appellee to return to him P2,000 which he had paid to the Philippine Greyhound
Club, Inc. as a second installment of the amount of the shares for which he had
 subscribed, was prompted by a feeling of pity which said defendant-appellant
had for the plaintiff-appellee as a result of the loss which the latter had suffered
because of the failure of the enterprise. The obligation which the said defendant-
appellant had contracted with the plaintiff-appellee is, therefore, purely moral,
and, as such, is not demandable in law, but only in conscience, over which human
judges have no jurisdiction.”

 Villaroel vs. Estrada 71 Phil. 140

This was originally an action commenced by the plaintiff (respondent) against

the defendant (petitioner) for the purpose of enforcing a contract entered into on
August 9, 1930, by virtue of which the defendant undertook to pay to the plaintiff
a certain debt which his deceased mother had incurred from the deceased
parents of the said plaintiff more than eighteen years ago. It is submitted that this
debt had already prescribed. The question now is whether this action will prosper,
considering that the debt incurred by the defendant’s mother had already
prescribed.

The Supreme Court, speaking through Justice Avanceña, ruled: “The present
action is not founded on the original obligation contracted by the mother of the
defendant, which had already prescribed, but on that contracted by the
defendant on August 9, 1930, in assuming the obligation which had already
prescribed. The defendant being the only heir of the original debtor with the right
to succeed in her inheritance, that debt lawfully contracted by his mother,
although it lost its efficacy by prescription, is nevertheless now a moral obligation
as far as he is concerned, a moral obligation which is a sufficient consideration to
create and make effective and demandable the obligation which he had
voluntarily contracted on August 9, 1930.’’m (Strictly speaking, the moral
obligation in this case is a natural obligation (Arts. 1423, et seq., Civil Code), as
distinguished from a purely moral obligation, such as that referred to in the case
of Fisher vs. Robb.)
Cause in Remuneratory Contracts. —

 the service or benefit which is remunerated although such service or benefit does
not constitute a demandable debt.
Example: If A gives a certain property in accordance with the formalities prescribed
by law to his lawyer friend, B, in remuneration for legal services which the latter
had rendered to him freely in the past and such gift is duly accepted, the cause as
far as A is concerned would be the legal services rendered by B, although such
services do not constitute demandable debts.
Cause in Contracts of Pure Beneficence. —

 the mere liberality of the benefactor; e.g., if A makes a pure donation of a certain
property to B in accordance with the formalities prescribed by law, its cause is the
mere liberality (causa liberalitatis) of the donor or benefactor.
Art. 1352. Contracts without cause, or with unlawful cause, produce no effect whatever.
The cause is unlawful if it is contrary to law, morals, good customs, public order or public
policy.

Art. 1353. The statement of a false cause in contracts shall render them void, if it should
not be proved that they were founded upon another cause which is true and lawful.

Art. 1354. Although the cause is not stated in the contract, it is presumed that it exists and
is lawful, unless the debtor proves the contrary.

Art. 1355. Except in cases specified by law, lesion or inadequacy of cause shall not
invalidate a contract, unless there has been fraud, mistake or undue influence.

Essential Requisites of Cause. —

1) should be in existence at the time of the celebration of the contract;

2) should be licit or lawful; and

3) should be true
Effect of lack of cause. — (Art. 1352)

 shall not produce any effect whatsoever

Examples:

1) if the purchase price in a contract of sale was never in fact paid by the purchaser
or vendee to the vendor, the contract is inexistent for all purposes for lack of a
cause or consideration. (Ocejo, Perez & Co. vs. Flores, 40 Phil. 921; Onejera vs.
Iga Sy, 76 Phil. 580)
2) conveyances of property where the conveyance or transfer is simulated without
any cause or consideration whatsoever whether the purpose of the grantor is to
defraud his creditors or to avert the possible attachment of the property. ( De
Belen vs. Coll. of Customs, 46 Phil. 241; Gallon vs. Gayares, 53 Phil. 43; Escutin vs.
Escutin, 60 Phil. 922; Gonzales vs. Trinidad, 67 Phil. 682)

 rule is not applicable:

1) where the purchaser or vendee failed to fully pay for the property, even if
there is a stipulation in the contract of sale that full payment shall be made at
the time of the celebration thereof. (Puato vs. Mendoza, 64 Phil. 457.)
2) where the contract itself expressly states that the consideration for the sale of
a piece of land is only one peso (P1.00), it does not follow that the contract or
sale is void or inexistent for lack of a cause or consideration. The reason is
obvious. There is a consideration. The contract may be voidable because of
the inadequacy of the cause or consideration, but certainly, it is not void or
inexistent.
 Art. 1354 – Cause need not be stated in contract to be considered existing
  presumed that it exists and is lawful, unless the debtor proves the contrary.
(Azarraga vs. Rodriguez, 9 Phil. 637; Eliot vs. Montemayor, 9 Phil. 960; Standard
Oil Co. vs. Arenas, 19 Phil. 211; Dumaguin vs. Reynolds, 48 Off. Gaz. 3887.)
 true even where the contract falls within the purview of the Statute of Frauds.
(Bhen, Meyer & Co. vs. Davis, 37 Phil. 431)
 Art. 1355 - lesion or inadequacy of cause shall not invalidate the contract unless
there has been fraud, mistake or undue influence. ( Asky vs. Cosalan, 46 Phil. 179;
Gabriel vs. Mateo, 71 Phil. 497; Garcia vs. Manas, 45 Off. Gaz. 1815.)
 if the lesion or inadequacy of the cause was due to fraud, mistake or undue
influence, such fact will render the contract voidable. (Art. 1330/Alsua-Betts vs.
Court of Appeals, 92 SCRA 332, 368)
 the party who has suffered the lesion or damage may possibly file an action for
rescission under Art. 1381

Effect of unlawful cause. —

 Art. 1352 - cause is unlawful when it is contrary to law, morals, good customs, public
order or public policy  void from the very beginning
Cases:

1) where the cause or consideration for the sale of a certain property is no other
than the accumulated usurious interests which the vendor-debtor has not yet
paid, the sale is void because of the illegality of the cause or consideration.
(Mulet vs. People of the Phil., 73 Phil. 63. But see Briones vs. Cammayo, 41 SCRA,
404)
2) contract affecting the course of a criminal prosecution is invalid, because such a
contract would be manifestly contrary to public policy and the due
administration of justice. (Arroyo vs. Berwin, 36 Phil. 386; Velez vs. Ramas, 40 Phil.
787; Reyes vs. Gonzales, 45 Off. Gaz. 381; Monteney vs. Gomez, 104 Phil. 1059.)
 Velez vs. Ramas (40 Phil. 787).

The facts of this case are as follows: C, wife of A and daughter of B, while
employed in a pawnshop owned by X, embezzled the amount of more than
P2,000. In order to prevent her criminal prosecution, A and B signed a
document obligating themselves jointly and severally to pay to X the amount
embezzled including interest. Because of their failure to comply with their
promise, the latter filed this action against them. The Supreme Court,
however, ruled:

“We are of the opinion that the trial court was correct in the conclusion
that an action cannot be maintained upon this contract. In our opinion, the
consideration for this agreement is clearly illicit, which fact is apparent on the
face of the contract, and the case is accordingly governed by Art. 1275 (now
Art. 1352) of the Civil Code.
 “There has been no period since contract law reached the state of
consciousness, when the maxim ex turpi causa non oritur actio was not
recognized. A contract based upon an unlawful object is and always has been
void ab initio by the common law, by the civil law, moral law, and all laws
whatsoever. It is immaterial whether the illegal character of the contract is
revealed in the matter of the consideration, in the promise as expressed in
the agreement or in the purpose which the agreement, though legal in
expression, is intended to accomplish. If the illegality lurks in any element, or
even subsists exclusively in the purpose of the parties, it is fatal to the validity
of the contract.

“By the universal consensus of judicial opinion in all ages it has been
considered contrary to public policy to allow parties to make agreements
designed to prevent or stifle prosecutions for crime. It is self-evident that the
law cannot sanction an engagement which is subversive of human society.
The machinery for the administration of justice cannot be used to promote an
unlawful purpose.’’

 However, the above case should be distinguished from the following case:
 Mactal vs. Melegrito 111 Phil. 363

Plaintiff gave to defendant P1,770 to be used in the purchase of palay, with

the obligation to return said amount within 10 days, if not spent for said
purpose. The latter never bought palay nor returned said amount. As a result,
the former accused him of estafa. When the case was about to be heard, a
common friend, acting upon defendant’s request, prevailed upon plaintiff to
move for the dismissal of the case and be contented with a promissory note
to be executed by the defendant. The note was executed and, accordingly,
the criminal case was dismissed. Defendant, however, was unable to comply
with his promise despite repeated demands. Subsequently, plaintiff brought
this action against him for the recovery of the P1,770. Defendant now
contends that the promissory note is void because the consideration thereof
is the dismissal of the estafa case which is certainly contrary to public policy.

Held: This contention is untenable. It is admitted that defendant had received

the P1,770 from plaintiff to be used for the purchase of palay. The cause or
consideration, therefore, for the promise was the pre-existing debt of said
defendant, not the dismissal of the estafa case, which merely furnished the
occasion for the execution of the promissory note.

########

Cases:
Consent
ABS-CBN vs CA et al., 301 SCRA 572
Palattao vs. CA, et al., G.R. No. 131726, May 7, 2002
National Commercial Bank of Saudi Arabia vs. CA, G.R. No. 1242467
 DBP vs Perez, G.R. No. 14854, Nov. 11, 2004
Sanchez, vs Rigos, 45 SCRA 368
Mercado and Mercado vs. Espiritu, 37 Phil. 125
Braganza vs Villa Abrille, 105 Phil 456
Songco vs Sellner, 37 Phil. 254
Rosario, et al. v. CA, et al., G.R. No. 127005, July 19, 1999
Lee and Asiatrust Development Bank v. Bangkok Bank Public Co., G.R. No. 173349,
February 09, 2011
Philtranco Service Enterprises, Inc., v. Paras and Inland Railways, Inc., et al., G.R. No.
161909, April 25, 2012
Paz v. Environmental Universality. Inc., G.R. No. 203993, April 20, 2015;
Object
Blas vs Santos, 111Phil. 503
Cause
Phil. Banking Corp. vs Lui She, 21 SCRA 52
Villaroel vs Estrada, 71 Phil. 14
Mactal vs melegrito, 111 Phil. 363;