CIVIL LAW EXAM PART 1 – 2019 QUESTIONS AND ANSWERS

I. Dr. Jack, a surgeon, holds clinic at the St. Vincent's Hospital and pays rent to the hospital. The fees of
Dr. Jack are paid directly to him by the patient or through the cashier of the hospital. The hospital
publicly displays in the lobby the names and specializations of the doctors associated or accredited by
it, including that of Dr. Jack. Marta engaged the services of Dr. Jack because of recurring stomach pain.
It was diagnosed that she is suffering from cancer and had to be operated on. Before the operation,
she was asked to sign a "consent for hospital care," which reads:

"Permission is hereby given to the medical, nursing and laboratory staff of the St. Vincent's Hospital to
perform such procedures and to administer such medications and treatments as may be deemed
necessary or advisable by the physicians of this hospital for and during the confinement."

After the surgery, the attending nurses reported that two (2) sponges were missing. Later, Marta died
due to complications brought about by the sponges that were left in her stomach. The husband of
Marta sued the hospital and Dr. Jack for damages arising from negligence in the medical procedure.
The hospital raised the defense that Dr. Jack is not its employee as it did not hire Dr. Jack nor pay him
any salary or compensation. It has absolutely no control over the medical services and treatment being
provided by Dr. Jack. Dr. Jack even signed an agreement that he holds the hospital free and harmless
from any liability arising from his medical practice in the hospital. Is St. Vincent's Hospital liable for the
negligence of Dr. Jack? Explain your answer. (5%)

SUGGESTED ANSWER:
Yes, St. Vincent's Hospital is liable. In the case of Professional Services v. Agana (513 SCRA 478 [2007J),
the Supreme Court held that the hospital is liable to the Aganas, not under the principle of respondeat
superior for lack of evidence of an employer-employee relationship with Dr. Ampil but under the
principle of ostensible agency for the negligence of Dr. Ampil and, pr o hac vice, under the principle of
corporate negligence for its failure to perform its duties as a hospital.

While it is true that there was insufficient evidence that St. Vincent's Hospital exercised the power of
control or wielded such power over the means and the details of the specific process by which Dr. Jack
applied his skills in Marta's treatment, there is ample evidence that St. Vincent's Hospital held out to
the patient, Marta, that Dr. Jack was its agent (principle of ostensible agency). The two factors that
determine apparent authority are present: (1) the hospital's implied manifestation to the patient
which led the latter to conclude that the doctor was the hospital's agent; and (2) the patient's
reliance upon the conduct of the hospital and the doctor, consistent with ordinary care and prudence.
The corporate negligence ascribed to St. Vincent's Hospital is different form the medical negligence
attributed to Dr. Jack. The duties of the hospital are distinct from those of the doctor-consultant
practicing within its premises in relation to the patient; hence, the failure of St. Vincent's Hospital to
fulfill its duties as a hospital corporation gave rise to a direct liability to Marta distinct from that of Dr.
Jack.
II. Jackie, 16, inherited a townhouse. Because she wanted to study in an exclusive school, she sold
her townhouse by signing a Deed of Sale and turning over possession of the same to the buyer.
Whenthatthe buyer discovered she was still a minor, she promised to execute another Deed of Sale
when she turns 18. When Jackie turned 25 and was already working, she wanted to annul the sale
and return the buyer's money to recover her townhouse. Was the sale contract void, voidable or
valid? Can Jackie still recover the property? Explain. (5%)

SUGGESTED ANSWER:
The contract of sale was voidable on the ground that Jackie is incapable of giving consent at the time
of the execution of the sale. (Article 1390 and Article 1327) Jackie can no longer recover the
townhouse unit because if a contract is voidable on the ground of minority, the action to annul it
must be filed within four (4) years from attainment of the age of majority. Since Jackie was already
25 years old, the action has clearly prescribed because she should have filed it before she reached
the age of 22. (Article 1391, Civil Code)

III. Sarah had a deposit in a savings account with Filipino Universal Bank in the amount of five million
pesos (P5,000,000.00). To buy a new car, she obtained a loan from the same bank in the amount of
P1,200,000.00, payable in twelve monthly installments. Sarah issued in favor of the bank post-dated
checks, each in the amount of P100,000.00, to cover the twelve monthly installment payments. On the
third, fourth and fifth months, the corresponding checks bounced. The bank then declared the whole
obligation due, and proceeded to deduct the amount of one million pesos (P1,000,000.00) from
Sarah’s deposit after notice to her that this is a form of compensation allowed by law. Is the bank
correct? Explain. (5%)

SUGGESTED ANSWER: No, the bank is not correct. While the Bank is correct about the applicability of
compensation, it was not correct as to the amount compensated. A bank deposit is a contract of loan,
where the depositor is the creditor and the bank the debtor. Since Sarah is also the debtor of the bank
with respect to the loan, both are mutually principal debtors and creditors of each other. Both
obligation are due, demandable and liquidated but only up to the extent of P300,000.00 (covering the
unpaid third, fourth and fifth monthly installments). The entire one million was not yet due because
the loan has no acceleration clause in case of default. And since there is no retention or controversy
commenced by third person and communicated in due time to the debtor, then all the requisites of
legal compensation are present but only up to the amount of P300,000.00. The bank, therefore, may
deduct P300,000.00 from Sarah’s bank deposit by way of compensation.

IV. A contract to sell is the same as a conditional contract of sale. Do you agree? Explain your

SUGGESTED ANSWER: No. A contract to sell is a species of conditional sale. The contract to sell does
not sell a thing or property; it sells the right to buy property. A conditional sale is a sale subject to
the happening or performance of a condition, such as payment of the full purchase price, or the
performance of other prestation to give, to do or not to do. Compliance with the condition
automatically gives the right to the vendee to demand the delivery of the object of the sale. In a
contract to sell, however, the compliance with the condition does not automatically sell the
property to the vendee. It merely gives the vendee the right to compel the vendor to execute the
deed of absolute sale.
V. What are obligations without an agreement"? Give five examples of situations giving rise to this

SUGGESTED ANSWER: "Obligations without an agreement" are obligations that do not arise from
contract such as those arising from: 1. delicts; 2. quasi-delicts; 3. solutio indebiti; 4. negotiorum gestio;
and 5. all other obligations arising from law.

VI. A driver of a bus owned by company Z ran over a boy who died instantly. A criminal case for
reckless imprudence resulting in homicide was filed against the driver. He was convicted and was
ordered to pay P2 Million in actual and moral damages to the parents of the boy who was an honor
student and had a bright future. Without even trying to find out if the driver had assets or means to
pay the award of damages, the parents of the boy filed a civil action against the bus company to
make it directly liable for the damages. (5%)
A) Will their action prosper?
B) If the parents of the boy do not wish to file a separate civil action against. the bus company, can
they still make the bus company liable if the driver cannot' pay the award for damages? If so, what
is the nature of the employer's liability and how may civil damages be satisfied?

SUGGESTED ANSWER:
a) Yes, the action will prosper. The liability of the employer in this case may be based on quasi-
delict and is included within the coverage of independent civil action. It is not necessary to
enforce the civil liability based on culpa aquiliana that the driver or employee be proven to be
insolvent since the liability of the employer for the quasi-delicts committed by their employees
is direct and primary subject to the defense of due diligence on their part. (Article 2176; Article
2180)
b) Yes, the parents of the boy can enforce the subsidiary liability of the employer in the criminal
case against the driver. The conviction of the driver is a condition sine qua non for the
subsidiary liability of the employer to attach. Proof must be shown that the driver is insolvent.
(Article 103, Revised Penal Code)

VII. AB Corp. entered into a contract with XY Corp. whereby the former agreed to construct the
research and laboratory facilities of the latter. Under the terms of the contract, AB Corp. agreed to
complete the facility in 18 months, at the total contract price of P10 million. XY Corp. paid 50% of the
total contract price, the balance to be paid upon completion of the work. The work stated
immediately, but AB Corp. later experienced work slippage because of labor unrest in his company. AB
Corp.'s employees claimed that they are not being paid on time; hence, the work slowdown. As of the
17th month, work was only 45% completed. AB Corp. asked for extension of time, claiming that its
labor problems is a case of fortuitous event, but this was denied by XY Corp. When it became certain
that the construction could not be finished on time, XY Corp. sent written notice cancelling the
contract, and requiring AB Corp. to immediately vacate the premises. (5%)
(A). Can the labor unrest be considered a fortuitous event?
(B). Can XY Corp. unilaterrally and immediately cancel the contract?
(C). Must AB Corp. return the 50% downpayment?

Suggested Answer:
A) No. The labor unrest cannot be considered a fortuitous event under Art. 1174 of the Civil Code. A
fortuitous event should occur independent of the will of the debtor or without his participation or
aggravation (Paras, Civil Code Annotated, vol. IV, 2000 ed., p 159). As mentioned in the facts, labor
unrest of the employees was caused by AB Corp.'s failure to pay its employees on time.

B) No, XY Corp. cannot unilaterally and immediately cancel the contract. In the absence of any
stipulation for automatic rescission, rescission must be judicial (Art. 1191, Civil Code).

C) AB Corp. need not return the 50% down payment because 45% of the work was already completed,
otherwise, XY Corp. would be unjustly enriching itself at the expense of AB Corp.
VIII. TRUE or FALSE. Answer TRUE if the statement is true, or FALSE if the statement is false. Explain
your answer in not more than two (2) sentences.
“A clause in an arbitration contract granting one of the parties the power to choose more arbitrators
than the other renders the arbitration contract void.” (5%)

Suggested Answer: True. The Civil Code provides that “Any clause giving one of the parties power to
choose more arbitrators than the other is void and of no effect” (Art 2045, NCC).

IX. Pedro promised to give his grandson a car if the latter will pass the bar examinations. When his
grandson passed the said examinations, Pedro refused to give the car on the ground that the condition
was a purely potestative one. Is he correct or not? (5%)

Suggested Answer: No, he is not correct. First of all, the condition is not purely potestative, because it
does not depend on the sole will of one of the parties. Secondly, even if it were, it would be valid
because it depends on the sole will of the creditor (the donee) and not of the debtor (the donor).

X. In 2018, Manuel bound himself to sell Eva a house and lot which is being rented by another
person, if Eva passes the 2019 bar examinations. Luckily for Eva, she passed said examinations.
(a) Suppose Manuel had sold the same house and lot to another before Eva passed the 2019 bar
examinations, is such sale valid? Why?
(b) Assuming that it is Eva who is entitled to buy said house and lot, is she entitled to the rentals
collected by Manuel before she passed the 2019 bar examinations? Why?

A) Yes, the sale to the other person is valid as a sale with a resolutory condition because what
operates as a suspensive condition for Eva operates as a resolutory condition for the other buyer.

Alternative Answer 1: Yes, the sale to the other person is valid. However, the buyer acquired the
property subject to a resolutory condition of Eva passing the 2019 Bar Examinations. Hence, upon
Eva's passing the Bar, the rights of the other buyer terminated and Eva acquired ownership of the
property.

Alternative Answer 2: The sale to another person before Eva could buy it from Manuel is valid, as
the contract between Manel and Eva is a mere promise to sell and Eva has not acquired a real right
over the land assuming that there is a price stipulated in the contract for the contract to be
considered a sale and there was delivery or tradition of the thing sold.

B) No, she is not entitled to the rentals collected by Manuel because at the time they accrued and
were collected, Eva was not yet the owner of the property.

Alternative Answer 1: Assuming that Eva is the one entitled to buy the house and lot, she is not
entitled to the rentals collected by Manuel before she passed the bar examinations. Whether it is a
contract of sale or a contract to sell, reciprocal prestations are deemed imposed for the seller to
deliver the object sold and for the buyer to pay the price. Before the happening of the conditions,
the fruits of the thing and the interest on the money are deemed to have been mutually
compensated under Article 1187.

Alternative Answer 2: Under Art. 1164, there is no obligation on the part of Manuel to deliver the
fruits (rentals) of the things until the obligation to deliver the thing arises. As the suspensive
condition has not been fulfilled, the obligation to sell does not arise.