Maritime Co. of the Phil., vs. Reparations Commission G.R. No. L29203 July 26, 197
FACTS:
Petitioner entered into a contract with the defendant stipulating that the
defendant will be the one liable for the freight charges as the consignee of
reparations goods. However, under Section 11 of the Reparations Act, it states
that ocean freight and other expenses incident to importation shall be paid by
the end-user and not by such agency.
ISSUE:
Whether or not the stipulation in the contract is valid when it is contrary to the
Reparations Act.
HELD:
Invalid.
According to the Civil Code, the contracting party may “establish such
stipulations, clauses, terms and conditions as they may deem convenient,
provided they are not contrary to law, morals, good customs, public order, or
public policy." The law thus sets limits. It is a fundamental requirement that the
contract entered into must be in accordance with, and not repugnant to, an
applicable statute. Its terms are embodied therein. The contracting parties need
not repeat them. They do not even have to be referred to.
THE CENTRAL BANK OF THE PHILIPPINES vs. HON. JUDGE GAUDENCIO
CLORIBEL and BANCO FILIPINO, Savings and Mortgage Bank G.R. No.
L-26971 April 11, 1972
FACTS:
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Bangko Filipino, a savings and mortgage bank duly organized and existing
under the laws of the Philippines, changed its policy by compounding
and paying the interest on its savings deposits, at the maximum rate fixed
by the Monetary Board, from the quarterly to the monthly basis, and by
paying, in advance, the maximum rate of interest on time deposits.
The Monetary Board approved Resolution No. 1566, directing the Banco
Filipino to comply strictly with Central Bank Circular No. 222.
Banco Filipino filed with the CFI of Manila a petition for prohibition and
preliminary injunction against CB and the Monetary Board, to annul
Central Bank Circulars Nos. 185 and 222 and Monetary Board Resolutions
Nos. 805 and 1566, "insofar as they restrict the payment of monthly
interests on savings deposits and advance interests on time deposits," and
praying that a writ of preliminary injunction be issued ex parte to restrain
the CB, its officials and/or agents from enforcing the aforementioned
circulars and resolutions to the extent that the same imposed said
restrictions, or, should the court "require that a hearing be conducted on
the petition for a preliminary injunction, that a preliminary restraining order
to the same effect be issued pending such hearing."
Judge Cloribel issued ex parte the restraining order prayed for and later
granted the application for a writ of preliminary injunction.
The CB now seeks a writ of certiorari and prohibition to annul the order of
Judge Cloribel authorizing the issuance of a writ of preliminary injunction.
Bangko Filipino sets up the ff defenses:
1. that said petition should be dismissed, because "petitioner has not
exhausted all remedies in the Court of First Instance of Manila before
coming to this Honorable Court";
2. that having heard the parties before issuing the contested order,
respondent Judge had neither committed a grave abuse of
discretion, nor exceeded his jurisdiction, in acting as he did; and
3. that the contested resolutions and circulars are null and void for
a. they were issued without previous notice and hearing,
b. they impair vested rights,
c. and the statutory power of the Monetary Board to "fix the
maximum rates of interest which banks may pay on deposits and
any other obligations" does "not include the regulation of the
manner of computing and paying interest, since this function is
not expressly granted petitioner."
ISSUE(S):
1. Whether petition is improper because CB has not exhausted all remedies
in the CFI;
2. Whether the authority of the Monetary Board to fix the maximum rates of
interest which banks may pay on deposits and on any other obligations
includes the power to determine and fix the manner in which said interests
may be compounded and paid;
3. Whether Judge Cloribel committed grave abuse of discretion or
exceeded his jurisdiction in issuing the assailed order.
HELD:
1. NO.
2. YES.
3. YES.
1. It is true that the CB did not seek a reconsideration of the order
complained of, and that, as a general rule, a petition for certiorari will not
be entertained unless the respondent has had, through a motion for
reconsideration, a chance to correct the error imputed to him. This rule is
subject, however, to exceptions, among which are the following, namely:
1) where the issue raised is one purely of law; 2) where public interest is
involved; and 3) in case of urgency. These circumstances are present in
the case at bar.
2. The law does not merely authorize the Board to "fix the maximum rates of
interest which banks may pay on deposits and on any other obligations."
It, also, expressly empowers the Board — "(i)n order to avoid possible
evasion of maximum interest rates set by the ... Board" — to fix also "the
maximum rates that banks may pay to or collect from their customers in
the form of ... payments of any sort." Indeed, the authority to establish
maximum rates of interest carries with it, necessarily, the power to
determine the maximum rates payable as interest for given periods of
time. In other words, it connotes the right to specify the length of time for
which the rates thus fixed shall be computed. Consequently, it cannot but
include the prerogative to regulate (a) the manner of computing said
rates and (b) the manner or time of payment of interest, insofar as these
factors affect the amount of interest to be paid.
The objective of the power to fix maximum rates of interest payable by
banks is to establish a uniform ceiling applicable to all banks, in order to
avoid that a competition among the same, in the form of higher rates of
interest offered to depositors, may ensue and reach such a point that, to
offset the resulting reduction in their profits, said institutions might be
impelled to increase their earnings, by resorting to risky ventures, or "less
conservative and more remunerative loans and investments," which could
impair the stability of the banking system and jeopardize the financial
condition of the nation. The important thing is the amount paid or to be
deposited by the latter and made available for the operations of the
bank, within the period for which the rate has been fixed. The manner of
computing such rate and the time or manner of payment of interest are
merely incidental thereto.
3. It was, therefore, apparent from the pleadings and memoranda that
Banco Filipino had no cause of action against Petitioner herein to restrain
the same from demanding strict compliance with said circulars. Pursuant
to Section 3 of Rule 58 of the Rules of Court, "(a) preliminary injunction
may be granted ... when it is established" (1) that "the plaintiff is entitled to
the relief demanded," which consists in restraining "the commission or
continuance of the acts complained of," and (2) that the commission or
continuance thereof "would probably work injustice to the plaintiff" or be
"in violation of the plaintiff's rights" and tend "to render the judgment
ineffectual." Since Banco Filipino was clearly not entitled to the relief
sought in the CFI case and no "injustice" to said institution would,
accordingly, result from its compliance with the contested resolutions and
circulars, it follows that Respondent Judge had committed a grave abuse
of discretion, amounting to excess of jurisdiction, in issuing the assailed
order.
WHEREFORE, said order and the writ of preliminary injunction issued in pursuance
thereof are hereby declared null and void, and the enforcement of both,
accordingly, restrained permanently, with costs against respondent Banco
Filipino. Writ granted.
FAUSTA BATARRA v. FRANCISCO MARCOS, G.R. No. L-2929 December
7, 1906
FACTS:
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Fausta Batarra filed a complaint to recover damages brought by
Francisco Marcos for the breach of promise by the latter.
Marcos induced Batarra to submit herself to sexual relation with him on
account of such promise of marriage.
Marcos claimed that he is not liable for breach of contract with damages
resulting from seduction as Batarra is of legal age.
Lower court ruled in favor of Batarra for the sum of P500.
ISSUE: Whether the contract (promise of marriage with sexual considerations) is
valid
HELD:
No. The said promise of marriage of Marcos to Batarra was based upon carnal
connection is founded on an unlawful cause and therefore, void and no action
can be maintained by the woman against the man thereof.
“A person who by an act or omission causes damage to another when there is
fault or negligence shall be obliged to repair the damage so done.”
As Marcos and Batarra caused grievance to each other, the court ruled that
the defendant be acquitted of the complaint and no costs will be allowed to
either party.
BENITO DE LOS REYES vs. VERONICA ALOJADO, G.R. No. L-5671
August 24, 1910
FACTS: On or about January 22, 1905, Veronica Alojado received, as a loan,
from Benito de los Reyes that the sum P67 .60, for the purpose of paying a debt
she owed to Olimpia Zaballa. It was agreed between Alojado and Reyes that
the debtor should remain as a servant in the house and in the service of her
creditor, without any renumeration whatever, until she should find someone who
would furnish her with the said sum where with to repeat the loan. The
defendant, Veronica Alojado, afterwards left the house of the plaintiff, on
March 12, 1906, without having paid him her debt, nor did she do so at any
subsequent date, notwithstanding his demands. The plaintiff, therefore, filed suit
against Veronica Alojado to recover the said sum or, in a contrary case, to
compel her to return to his service. The trial court rendered judgment whereby
he sentenced the defendant to pay to the plaintiff the sum claimed and
declared that, in case the debtor should be insolvent, she should be obliged to
fulfill the agreement between her and the plaintiff, which was reversed in favor
of defendant. Hence, this appeal.
The defendant appealed from the said judgment, denying all the allegations of
the complaint and alleged that, although she had left the plaintiff's service, it
was because the latter had paid her no sum whatever for the services she had
rendered in his house.
ISSUE: Whether or not the agreement entered into by both parties is valid.
HELD: The duty to pay the said sum, as well as that of P11.97 delivered to the
defendant in small amounts during the time that she was in the plaintiff's house,
is unquestionable, inasmuch as it is a positive debt demandable of the
defendant by her creditor. (Arts. 1754, 1170, Civil Code.) However, the reason
alleged by the plaintiff as a basis for the loan is untenable, to wit, that the
defendant was obliged to render service in his house as a servant without
remuneration whatever and to remain therein so long as she had not paid her
debt, inasmuch as this condition is contrary to law and morality. (Art. 1255, Civil
Code.) Domestic services are always to be remunerated, and no agreement
may subsist in law in which it is stipulated that any domestic service shall be
absolutely gratuitous, unless it be admitted that slavery may be established in
this country through a covenant entered into between the interested parties.
Petition dismissed.
Ignacio Arroyo V. Alfred Berwin, Gr No. 10551, Mar 03, 1917
FACTS: On Aug 14, 1914, defendant, representing Marcela Juaneza, requested
plaintiff to agree to dismiss a criminal proceeding for theft against his client.
Defendant stipulated with the plaintiff that his client would recognize the
plaintiff’s ownership in the land situated on Calle San Juan, suburb of Molo,
municipality of Ilo-ilo (where his client ordered the cane cut, which land and
which cut cane are referred to in the cause for the theft) only if plaintiff would
ask the prosecuting attorney to dismiss the said proceeding against his client.
Plaintiff complied with the agreement and requested the prosecuting attorney
to dismiss the criminal case (who then dismissed the case). However, despite
several demands by plaintiff, defendant has still not delivered the written
agreement acknowledging the ownership of the described land. Thus, plaintiff
prayed for the court to render judgment ordering the defendant to comply with
the agreement by causing defendant’s client Marcela Juaneza to sign the
document in which she recognizes the plaintiff’s ownership of the land. The trial
court, however, dismissed the complaint on the ground of illegality of the
consideration of alleged contract.
ISSUE: Whether or not Trial court erred in dismissing the complaint on the ground
of illegality of the consideration of alleged contract.
HELD: No. Trial court decision affirmed.
An agreement by the owner of stolen goods to stifle the prosecution of the
person charged with the theft, for a pecuniary or other valuable consideration,
is manifestly contrary to public policy and the due administration of justice. In
the interest of the public it is of the utmost importance that criminals should be
prosecuted, and that all criminal proceedings should be instituted and
maintained in the form and manner prescribed by law; and to permit an
offender to escape the penalties prescribed by law by the purchase of
immunity from private individuals would result in a manifest perversion of justice.
Sy Suan, et al. vs. Pablo L. Regala, G.R. No. L-9506 June 30, 1959
FACTS:
That on April 11, 1953, defendant Sy Suan, who was at the time president and
general manager of his co-defendant [Price Incorporated] and owner of
practically all the capital stock of said corporation, executed in favor of plaintiff
a special power of attorney authorizing the latter to prosecute the former's
applications for import licenses with the Import Control Office
At the time of the execution of the said power of attorney, defendants had
pending in the Import Control Office the following applications:
a. Application No. 001705 for industrial starch in the sum of $16,477.34 filed on
April 6, 1953 in the name of defendant, Price Incorporated;
b. Application No. 001797 for industrial starch in the sum of $21,678.48 filed on
April 6, 1953 in the name of defendant Price Incorporated; and
c. Application No. 001800 for industrial starch in the sum of $15,778.11 filed on
April 6, 1953 in the name of defendant Price Incorporated
Pursuant to said special power of attorney, plaintiff followed up and
prosecuted the above-mentioned applications with and through the different
offices and divisions of the Import Control Office, conferring with the
corresponding Import Control officials. On or about May 19, 1953, the Import
Control Office issued the following licenses as a result of the effort made by the
herein plaintiff: License No. 15030 on Application No. 001795; License No. 15029 of
Application No. 001797; and License No. 15028 on Application No. 001800, the
amount of which had been reduced to $11,838.50.
Shortly before the execution of the special power of attorney above reffered
to, plaintiff and defendant Sy Suan agreed verbally that plaintiff's services for
securing the said licenses would be paid or compensated with ten (10%) per cent
of the total value of the amounts approved on the said applications. On May 19,
1953, upon the release of the afore-mentioned licenses, defendants paid the
plaintiff the sum of P3,000.00 on account of the latter's services.
ISSUE: Whether or not the parole contract of renumeration is valid
HELD: It is undeniable that the contract in question sought to be enforced by the
respondent and assailed by the petitioners as null and void for being against
public policy is what is commonly known as 10% contracts which the press decries
and the public condemns as inimical to public interest. It is a general rule that
agreements against public policy are illegal and void. Under the principles
relating to the doctrine of public policy, as applied to the law of contracts, courts
of justice will not recognize or uphold any transaction which, in its object
operation, or tendency, is calculated to be prejudicial to the public welfare, to
sound morality, or to civic honesty.
Such intervention by the intermediaries would not render an unmeritorious
application deserving, nor undeserving applications meritorious, but would serve
no other purpose than to influence or possibly corrupt, in unmeritorious cases, the
judgment of the public official or officials performing an act or service connected
with the issuance of import license or quota allocation — an eventuality which
the law precisely sought to avoid.
Joseph Wolfson Vs. The Estate of Francisco Martinez, G.R. No. L-5970
October 13, 1911
FACTS:
On the 29th day of January, 1906, a judgment was entered in this court by Hon.
John C. Sweeney, one of the judges thereof, in favor of Mariano Yap-Tuangco
against the deceased Francisco Martinez for the sum of twelve thousand pesos.
There was a contract agreement between the plaintiff in that judgment and the
above-mentioned Joseph N. Wolfson and one Basilio Regalado y Mapa that they
should have as their fees for prosecuting the case fifty per cent of whatever
amount might be obtained.
Subsequently, Mapa assigned his interest in said contract to Wolfson, and on the
18th day of June, 1907, the plaintiff Mariano Yap-Tuangco, for value received,
sold and transferred and delivered to said Wolfson all his right, title and interest in
the aforementioned judgment.
ISSUE: Whether or not Joseph N. Wolfson prohibited from purchasing the judgment
of his client?
HELD:
Yes. Article 1459 (5) of the Old Civil Code provides that lawyers and solicitors
cannot acquire by purchase, even at public or judicial auction, neither in person
nor by an agent, the property and rights, which may be the object of the
litigation, in which they may take part by virtue of their profession and office. The
purchase of the judgment in question was within the prohibition of the article
quoted, nevertheless, the contract of purchase and sale is not void but voidable
at the election of the vendor.
Florencia Cronico vs JM Tuason and Co., Inc. GR No. L-3527 August
26, 1977
FACTS: JM Tuason was the registered owner of Lot 22. Florencio Cronico offered
to buy the lot from JM Tuason with the help of Mary Venturanza. Cronico was
required to present proofs of her rights to the lot, and indeed presented certain
documents showing her priority rights to buy the lot. Claudio Ramirez also
learned that said lot was being sold. Both Cronico and Ramirez then sent
individual letters to JM Tuason expressing their desire to purchase the land and
requested information concerning the area, the price, and other terms and
conditions of the contract to sell. JM Tuason sent separate reply letters to the
prospective buyers. Cronico was able to obtain the letter the next day and thus
presented the letter to the Head of the Real Estate Department of JM Tuason;
and requested Venturanza to issue a check as down payment, but the same
was refused. Ramirez, on the other hand, received the letter two days after it
was sent stating that the lot was available for sale under the conditions set forth
and that said lot was being offered for sale on a first come first serve basis. He
then immediately verbally accepted such, followed by a letter to JM Tuason
confirming the verbal acceptance, the next day. Counsel of Ramirez then wrote
JM Tuason for the early execution of the Contract to Sell with a check as down
payment (Mar 31). Counsel of Cronico, however, also wrote JM Tuason
requesting that the lot be sold to him (Mar 27). Subsequently, JM Tuason and
Ramirez executed a Contract to Sell, which resulted an instant suit.
ISSUE: Whether or not JM Tuason’s promise to sell the lot to Cronico has a
consideration separate from the selling price of said lot and thus binding upon
the promissory to comply with such promise.
HELD: No, the promise of the respondent company to sell the lot in question to
the petitioner, Florencia Cronico has no consideration separate from the selling
price of said lot. It appears that the Compromise Agreement upon which
Cronico predicates her right to buy the lot in question has been rescinded and
set aside.
In order that a unilateral promise may be binding upon the promisor, Article
1479, Civil Code of the Philippines, requires the concurrence of the condition
that the promise be “supported by a consideration distinct from the price.
Accordingly, the promisee cannot compel the promisor to comply with the
promise, unless the former establishes the existence of said distinct
consideration. The promisee has the burden of proving such consideration.
Surigao Mineral Reservation Board and The Executive Secretary vs.
Hon. Gaudencio Cloribel, G.R. No. L-27072 January 9, 1970
FACTS: Original action for certiorari and prohibition, with preliminary injunction,
to restrain the Honorable Gaudencio Cloribel, as Judge of the Court of First
Instance of Manila, from continuing with the hearing of Civil Case No. 67400 of
said Court, and from enforcing a restraining order issued therein on November
16, 1966, as well as to annul an order of respondent Judge, in the same case,
dated December 9, 1966. From the records of said Case No. 67400, that the
Company had no cause of action against petitioners and that, accordingly,
respondent Judge committed a grave abuse of discretion, amounting to excess
of jurisdiction, in issuing its restraining order of November16,1966, and its order of
December 9, 1966, refusing, in effect, to set aside said order of November 16,
1966.
First Contempt Case. The Supreme Court rendered a decision against
MacArthur International Minerals Corp and in their third Motion for
Reconsideration, Attys. Vicente Santiago and John Beltran Sotto made use of
language that are disrespectful and contemptuous to the Court like "it seems
many of our judicial authorities believe they are chosen messengers of God",
"corrupt in its face" and insinuating favoritism and partisanship of the members
of the Court, notable Chief Justice Concepcion and Justice Castro due to
alleged interest in the case (Castro's brother works for one of the parties).
Santiago and Castro wanted for the two justices to inhibit themselves in the MR.
The Court demanded for Santiago and Sotto to "show cause" why they shouldn't
be cited in contempt for the said statements. Santiago insisted that the
statements he made were inadvertently included in the copy sent to the Court,
and was just intended to be in the MR's rough draft.
Second Contempt Case. Counsel for MacArthur drafted a fourth motion for
reconsideration, this time with Atty. Juanito M. Caling as counsel, and again
contained language which the Court found disrespectful. The MR assailed the
decision penned by CJ Concepcion since he was out of town when the
decision was written and included seeming threats of elevating the issue to the
World Court and allegations of rise of graft and corruption in the judiciary. The
Court demanded Caling to also "show cause" and he said that it the motion was
already prepared by Santiago when he took the case as was verified by Morton
Meads, an employee from MacArthur.
ISSUE: Whether or not the lawyers should be cited in contempt?
HELD: First Contempt Case. Yes. The language employed by Santiago and Sotto
degrades the administration of justice which transgresses Section 3 (d) of Rule 71
of the Rules of Court as well as Sec. 20 (f) of Rule 138 of the RoC which states
that "a lawyer's language should be dignified in keeping with the dignity of the
legal profession". They are also expected to observe and maintain the respect
due to the courts of justice and judicial officers but their acts resulted in the
contrary and are intended to create an atmosphere of distrust. The
inadvertence of Santiago's use of words can't be used as a shield to absolve
him of any misdeeds.
Second Contempt Case. Yes. Even if the idea of the language used in the 4th
MR came from Meads, both Santiago and Caling should've adhered to Canon
16 of the Code of Legal Ethics wherein "a lawyer should use his best efforts to
restrain and to prevent his clients from doing those things which a lawyer himself
ought not to do, particularly with reference to their conduct towards courts,
judicial officers, jurors, witnesses and suitors. If a client persists in such
wrongdoing, the lawyer should have terminated their relation". Santiago is also
liable here since Caling's represent didn't divest him of his capacity as counsel
for MacArthur.
Writ granted. Orders of respondent Judge dated November16, and December
9, 1966, are annulled and the writ of preliminary injunction issued in the present
case made permanent, with costs against respondent, Mac-Arthur International
Minerals Company.
The Standard Oil Company Of New York vs. Juan Codina Arenas,
G.R. No. L-5921, July 25, 1911
FACTS:
December 15, 1908 –Juan Codina Arenas and Francisco Lara del Pino, as
principals, and Alipio Locso, Vicente Sixto Villanueva and the Chinaman, Siy Ho,
as sureties sign a bond in favor of plaintiff for the obliged to pay the amount of P
3,305.76 at three months from date, with interest at P 1.00 per month.
April 5, 1909 – The plaintiff sued the debtors regarding the bond sign and was
summoned, the record showing that summons was served on Villanueva;
May 12, 1909 - Villanueva did not appear, and was declared in default.
On process:
-
-
-
Wife of Villanueva appeared when judgment was about to be executed
and asked that he be relieved from the bond and the judgment because
he was insane (declared July 24, 1909) with his wife as his guardian.
Case was reopened and tried and the evidence showed that Villanueva
executed the bond with full understanding of the nature and
consequences of the act performed by him although he was suffering from
monomania of great wealth.
He was, therefore, held liable on the bond. Hence appealed to the
Supreme Court.
ISSUES:
1. Whether or not monomania of wealth necessarily warrants that the person
does not have capacity to act.
2. Whether or not Villanueva was actually incapable of entering into contract
at the time the bond was executed.
HELD:
SC affirmed the judgment of the CA. it would have been necessary to show that:
1. Such monomania was habitual and constituted a veritable mental
perturbation in the patient;
2. That the bond executed was the result of such monomania, and not the
effect of any other cause, that is, that there were not, or could there have
been any other cause for the contract than the ostentation of wealth and
this was purely an effect of such monomania of wealth.
3. That the monomania existed on the date the bond in question was
executed. Monomania of wealth does not necessarily imply that the person
is incapable of executing a bond such as that in question.
4. Capacity to act must be supposed to attach to a person who has not
previously been declared incapable, and such capacity is presumed to
continue for so long as the contrary is not proved, that is, at the moment of
his acting he was incapable, crazy, insane, or out of his mind; which, in the
opinion of the court has not been proved in this case.
Vicente E. Tang vs. Hon. Court of Appeals, G.R. No. L-48563 May 25,
1979
FACTS: On Sept. 25, 2965, Lee Su Guat, widow, 61 years old and illiterate who
spoke only Chinese, applied for life insurance for 60T with Philamlife. The
application was in two parts, both in English. The second part dealt with her
state of health. Her answers having shown that she was health, Philamlife issued
her a policy effective Oct. 23, 1965 with her nephew Vicente Tang as
beneficiary.
On Nov. 15, 1965, Lee again applied for additional insurance of her life for
40T. Since it was only recent from the time she first applied, no further medical
exam was made but she accomplished Part 1 (which certified the truthfulness of
statements made in Part. 2). The policy was again approved. On April 20 1966,
Lee Su Guat died of Lung cancer. Tang claimed the amount of 100T but
Philamlife refused to pay on the ground that the insured was guilty of
concealment and misrepresentation. Both trial court and CA ruled that Lee was
guilty of concealment. Tang’s position, however, is that because Lee was
illiterate and spoke only Chinese, she could not be held guilty of concealment
of her health history because the application for insurance was English, and the
insurer has not proven that the terms thereof had been fully explained to her as
provided by Art. 1332 of CC.
ISSUE: Whether or not Art. 1332 applies.
Held: NO.
Art. 1332 is NOT applicable. Under said article, the obligation to show that the
terms of the contract had been fully explained to the party who is unable to
read or understand the language of the contract, when fraud or mistake is
alleged, devolves on the party seeking to enforce it. Here, the insurance
company is NOT seeking to enforce the contract; on the contrary, it is seeking to
avoid its performance.
It is petitioner who is seeking to enforce it, even as fraud or mistake is NOT
alleged. Accordingly, Philamlife was under no obligation to prove that the
terms of the insurance contract were fully explained to the other party. Even if
we were to say that the insurer is the one seeking the performance of the
contracts by avoiding paying the claim, it has to be noted as above stated that
there has been NO imputation of mistake of fraud by the illiterate insured whose
personality is represented by her beneficiary. In sum, Art. 1332 is inapplicable,
and considering the findings of both the trial court and the CA as to the
Concealment of Lee, the SC affirms their decisions.
In a contract of insurance, each party must communicate to the other, in good
faith, all facts within his knowledge which are material to the contract, and
which the other has no means of ascertaining. As a general rule, the failure by
the insured to disclose conditions affecting the risk of which he is aware makes
the contract voidable at the option of the insurer.
Benjamin P. Martinez vs. Court of Appeals, GR No. L- 31271, April 29
1974
FACTS: The spouses Romeo Martinez and Leonor Suarez are the registered
owners of two (2) parcels of land located in Lubao, Pampanga. The disputed
property was originally owned by one Paulino Montemayor, who secured a
"titulo real" over it way back in 1883. After the death of Paulino Montemayor the
said property passed to his successors-in-interest, Maria Montemayor and
Donata Montemayor, who in turn, sold it, as well as the first parcel, to a certain
Potenciano Garcia. Because Potenciano Garcia was prevented by the then
municipal president of Lubao, Pedro Beltran, from restoring the dikes
constructed on the contested property, Garcia filed a civil case with the Court
of First Instance against Beltran to restrain the latter in his official capacity from
molesting him in the possession of said second parcel, and on even date,
applied for a writ of preliminary injunction, which was issued against said
municipal president. The Court declared permanent the preliminary injunction.
On April 17, 1925. Potenciano Garcia applied for the registration of both
parcels of land in his name, and the Court of First Instance of Pampanga, sitting
as land registration court, granted the registration. Thereafter, the ownership of
these properties changed hands until eventually they were acquired by the
spouses. To avoid any untoward incident, the disputants agreed to refer the
matter to the Committee on Rivers and Streams, which, after conducting an
ocular inspection, reported that the parcel was not a public river but a private
fishpond owned by the herein spouses. The Secretary of Public Works and
Communications, ordered another investigation of the said parcel of land,
directing the spouses to remove the dikes they had constructed, threatening
that the dikes would be demolished should the spouses fail to comply therewith
within 30 days.
ISSUE: Whether the spouses are purchasers for value and in good faith on the
parcel alleged to be a public river.
HELD: No, they are not.
There is no weight in the spouses' argument that, being a purchaser for value
and in good faith of Lot No. 2, the nullification of its registration would be
contrary to the law and to the applicable decisions of the Supreme Court as it
would destroy the stability of the title which is the core of the system of
registration. Appellants cannot be deemed purchasers for value and in good
faith as in the deed of absolute conveyance executed in their favor.
Before purchasing a parcel of land, it cannot be contended that the spouses
did not know exactly the condition of the land that they were buying and the
obstacles or restrictions thereon that may be put up by the government in
connection with their project of converting Lot No. 2 in question into a fishpond.
Nevertheless, they willfully and voluntarily assumed the risks attendant to the sale
of said lot. One who buys something with knowledge of defect or lack of title in
his vendor cannot claim that he acquired it in good faith.
The ruling that a purchaser of a registered property cannot go beyond the
record to make inquiries as to the legality of the title of the registered owner, but
may rely on the registry to determine if there is no lien or encumbrances over the
same, cannot be availed of as against the law and the accepted principle that
rivers are parts of the public domain for public use and not capable of private
appropriation or acquisition by prescription.
Agustin De Luna vs. Jose Linatoc, G.R. No. L-48403 October 28, 1942
FACTS: P-wife (no name provided) sold a portion of their conjugal property to R.
The parcel of land was the husband’s portion of the conjugal property. The wife,
with the knowledge and consent of the husband, sold the lot to R as evidenced
by the deed of sale and the deed of recognition wherein the husband
recognized and reiterated his acquiescence to the sale (Art 1416 – A conjugal
property can be sold by one spouse if the other spouse consents).
Such sale was prohibited by Art 1432 because partitioning the conjugal property
during marriage can only be done if there was a judicial separation of property,
or else it would be illegal and void. The sale can only be valid if the land was
sold under the name of the conjugal partnership and not of the husband only.
The Ps assail the validity of the sale to R, claiming that they do not know of such
prohibition
ISSUE: Whether or not the sale may be validly annulled by the spouses?
HELD: NO
Mistake of law does not make a contract voidable, because ignorance of the
law does not excuse anyone from its compliance (art. 2, Civil Code; 8 Manresa,
646, 2d ed.). That the petitioners did not know the prohibition against partition of
the conjugal partnership property during marriage (art. 1432, Civil Code) is no
valid reason why they should ask for the annulment of the sales made Exhibits C
and D and recognized in Exhibit I.
Moreover, there is the time-honored legal maxim that no man can take
advantage of his own wrong. To repudiate the sales in question, petitioners are
setting up their own wrongful act of partitioning their conjugal property, which
violated article 1432 of the Civil Code. The prohibition in said article affects
public policy, as it is designed to protect creditors of the conjugal partnership
and other third persons. Petitioners shall not, therefore, be allowed thus to rest
their cause of action to recover the lands sold, upon the illegality of the partition
which they attempted to make. Otherwise, they would profit by their own
unlawful act.
Jose Vales vs. Simeon A. Villa, G.R. No. 10028 December 16, 1916
FACTS: This is an action to set aside certain transfers of real estate from the
plaintiff to one of the defendants and to require that defendant to recover by
good and sufficient conveyance the title to such properties; to refund to the
plaintiff a certain sum paid by plaintiff for the recovery of certain other real
estate; and for an accounting by the defendants of the rents, issues and profits
of certain real estate during a certain period; and for P25,000 damages.
Defendant Felipa Silvestre is a widow, 70 years of age, and is the aunt of the
defendant Maria Guia Garcia, wife of the defendant Simeon A. Villa.
In 1904, plaintiff was the owner of several properties. At that time, he was in debt
to the defendant Felipa Silvestre in the sum of P20,000. In that year he executed
to her a conveyance of the properties above described in consideration of the
debt, the conveyance containing a clause giving to the vendor (plaintiff) the
right to repurchase the premises within one year from the date of the
conveyance. Subsequently, defendant Maria Guia Garcia sold a few of the
conveyed properties. Later on, the defendant Maria Guia Garcia conveyed to
plaintiff the properties described in the conveyance of March 22, 1909, those
remaining unsold, for the consideration of P6,800, plaintiff thereby receiving on
payment that which he claims he was entitled to receive for nothing under the
alleged verbal agreement, he claiming that he had paid long before the full
sum of P25,000 which entitled him to the reconveyance without further
consideration.
This action was commenced on the 25th of October, 1915. Plaintiff alleged that
in spite of the conveyance of 1909, he continued in possession of the properties
described therein as virtual owner thereof, and that all he paid for such
possession was the interest on the P25,000, the consideration for the
conveyance, at the rate of 9 per cent per annum, or P2,250, a year. The history
of the transactions between the plaintiff and the defendant as given by counsel
for the parties is not essentially different. While there is, of course, a wide
difference in the claims of the parties to the action, that difference consists
largely in the reasons which underlie the facts thus stated and
the forces and motives which moved the plaintiff to the performance of the
acts referred to and from the effects of which he asks to be relieved. Counsel for
the plaintiff claim that the conveyance subsequent to that of the 22d of March,
1909, which is the origin of all the controversies between the parties, and his
appearance as a witness for the defendants in the various proceedings in the
Court of Land Registration concerning certain of the parcels of land in litigation
and all other acts against his own interests, were induced either by the fraud of
the defendants or by the force and undue influence which they were able to
and did exercise over him by virtue of the advantages they possessed by reason
of the fact that the conveyance of March 22d, 1909 was absolute in form.
Counsel further assert that one of the elements of the alleged fraud and undue
influence was that there was no consideration for the transfers to defendants or
if there was a consideration, it was grossly inadequate.
ISSUE: Whether or not the conveyances made were valid.
HELD: YES.
Most if not all of the elements of fraud are absent. In none of the transactions
was there a misrepresentation of an existing or past fact; and plaintiff went into
each one of them knowing all of the facts as well as the defendants. There was
no deception. This is a necessary deduction not only form the fact that there
was no misrepresentation but also from the fact that plaintiff knew precisely
what he was doing — was fully acquainted with the facts; and, knowing them,
again and again accepted the verbal promises of the defendants to reconvey.
Under his own statement and according to his own theory the defendants did
no more than break their verbal contract with him with respect to all subsequent
transactions as they had with respect to the first. That was not fraud, although it
was done again and again, unless the mere failure to fulfill the various verbal
contracts can be said to constitute fraud or deceit. It is well recognized
however, that a mere failure to live up to a contract is not fraudulent or
deceitful. The furthest the authorities have gone along this line, and not all have
gone that far, is to declare that if, at the time a contract is made, one of the
parties has present in his mind the purpose and intent to break it, after getting all
he can out of the other party, and that purpose and intent enter into a the
contract as the main element or consideration thereof on his part, there is fraud
and deceit, the authorities holding that the state of mind of the party is a fact
entering into the consideration of the contract without which it would not have
been made; and that, by virtue of that state of mind, the other party was
deprived of property. That fact however must be alleged and proved and relied
upon before it can be utilized by the person asserting its existence. It was not
alleged or proved in this case and plaintiff does not rely upon it in his brief in this
court. His consent was not obtained by deceit in any of the transactions. There
did not exist in any one of the transactions complained of a condition where "by
words and insidious machinations on the part of one of the contracting parties
the other is (was) induced to execute a contract which, without them, he would
not have made."
All men are presumed to be sane and normal and subject to be moved by
substantially the same motives. When of age and sane, they must take care of
themselves. One man cannot complain because another is more able, or better
trained, or has better sense of judgment than he has; and when the two meet
on a fair field the inferior cannot murmur if the battle goes against him. The law
furnishes no protection to the inferior simply because he is inferior, any more
than it protects the strong because he is strong. The law furnishes protection to
both alike — to one or more or less than to the other. It makes no distinction
between the wise and the foolish, the great and the small, the strong and the
weak. The foolish may lose all they have to the wise; but that does not mean
that the law will give it back to them again. Courts cannot follow one every step
of his life and extricate him from bad bargains, protect him from unwise
investments, relieve him from one-sided contracts, or annul the effects of foolish
acts. Courts cannot constitute themselves guardians of persons who are not
legally incompetent. Courts operate not because one person has been
defeated or overcome by another, but because he has been defeated or
overcome illegally. Men may do foolish things, make ridiculous contracts, use
miserable judgment, and lose money by them — indeed, all they have in the
world; but not for that alone can the law intervene and restore. There must be,
in addition, a violation of law, the commission of what the law knows as
an actionable wrong, before the courts are authorized to lay hold of the
situation and remedy it.
L.L. Hill vs. Maximina Ch. Veloso, Gr No. 9421, July 24, 1915
FACTS: On July 24, 1915 Maximina Veloso claimed that she was tricked by her
son-in-law Domingo Franco into signing a blank document, unknowingly binding
her to a debt of P6,319 to Michael & Co. She thought, according to her, she was
made to sign to acknowledge an obligation to pay for the guardianship of the
minor children of Potenciano Veloso (her brother). And that she learned of the
true nature of the document (a promissory note to Michael & Co.) only after
Franco's death. But, clearly her signatures on the promissory note were obtained
by means of fraud.
ISSUES: Whether or not deceit by a third person even without connivance or
complicity with one of the contracting parties is valid?
HELD: No.
Granted there was deceit in executing the Promissory Note to Michael & Co., still
the deceit and error alleged could not annul the consent of Veloso nor exempt
her from the obligation incurred. The deceit, in order that it may annul the
consent, must be that which the law defines as a cause. "There is deceit when
by words or insidious machinations on the part of one of the contracting parties,
the other is induced to execute a contract which without them he would not
have made." Franco was not one of the contracting parties who may have
deceitfully induced the other contracting party, Michael & Co., to execute the
contract. The one and the other of the contracting parties, to whom the law
refers, are the active and passive subjects of the obligation, the party of the first
part and the party of the second part who execute the contract. The active
subject and the party of the first part of the Promissory Note in question was
Michael & Co., and the passive subject and party of the second part were
Veloso and Franco. Veloso and Franco, therefore, composed a single
contracting party in contractual relation with or against Franco, like any other
person who might have induced Veloso into signing the Promissory Note under
the influence of deceit, would be but a third person. Under the Civil Code,
deceit by a third person does not in general annul consent. This deceit may give
rise to more or less extensive and serious responsibility on the part of the third
person (Franco) and a corresponding right of action for the contracting party
prejudiced (Veloso). Veloso will probably just have to file an action against the
estate of Franco.
Ignacio Arroyo vs. Jacoba Gerona, GR No. L- 36059 March 31, 1933
FACTS: The appellant, a paternal uncle of a demented girl, qualified as her
guardian and, being at the same time executor of the will of his own deceased
mother (grandmother of the demented girl), submitted an inventory in the
testacy of his mother, including therein as property of the latter the real estate
which his ward had inherited from her own parents. The result of this trick of
passing his ward's property through the estate of her grandmother was to make
it appear that the greater part of such property had passed to the 'appellant
under the will of the grandmother.
ISSUE: Whether or not the court that approved the agreement of partition dated
June 13, 1913, annul said agreement and vacate the order approving it on the
ground of fraud?
HELD: No. That this device, coupled with the failure of the appellant to reveal to
the other heirs of his ward the true state and value of the property pertaining to
the latter, was a fraudulent contrivance sufficient to relieve such heirs from an
agreement made by them with the appellant, subsequent to the death of the
ward, with respect to the disposition of the property pertaining to her.
Yu Tek and Co. vs. Basilio Gonzales, G.R. No. L-9935 February 1, 1915
FACTS: A written contract was executed between Basilio Gonzalez and Yu Tek
and Co., where Gonzales was obligated to deliver600 piculs of sugar of the 1st
and 2nd grade to Yu Tek, within the period of 3 months (1 January-31 March
1912) at any place within the municipality of Sta. Rosa, which Yu Tek & Co. or its
representative may designate; and in case, Gonzales does not deliver, the
contract will be rescinded and Gonzales shall be obligated to return the P3,000
received and also the sum of P1,200by way of indemnity for loss and damages.
No sugar had been delivered to Yu Tek & Co. under this contract nor had it
been able to recover the P3,000. Yu Tek & Co. filed a complaint against
Gonzales, and prayed for judgment for the P3,000 and the additional P1,200.
Judgment was rendered for P3,000 only, and from this judgment both parties
appealed.
Defendant alleges that the court erred in refusing to permit parol evidence
showing that the parties intended that the sugar was to be secured from the
crop which the defendant raised on his plantation, and that he was unable to
fulfill the contract by reason of the almost total failure of his crop.
The second contention of the defendant arises from the first. He assumes that
the contract was limited to the sugar he might raise upon his own plantation;
that the contract represented a perfected sale; and that by failure of his crop
he was relieved from complying with his undertaking by loss of the thing due.
(Arts. 1452, 1096, and 1182, Civil Code.)
ISSUES:
1. Whether compliance of the obligation to deliver depends upon the
production in defendant’s plantation
2. Whether there is a perfected sale
3. Whether liquidated damages of P1,200 should be awarded to the plaintiff
HELD:
1. There is not the slightest intimation in the contract that the sugar was to be
raised by the defendant. Parties are presumed to have reduced to writing all
the essential conditions of their contract. While parol evidence is admissible in a
variety of ways to explain the meaning of written contracts, it cannot serve the
purpose of incorporating into the contract additional contemporaneous
conditions which are not mentioned at all in the writing, unless there has been
fraud or mistake. It may be true that defendant owned a plantation and
expected to raise the sugar himself, but he did not limit his obligation to his own
crop of sugar. Our conclusion is that the condition which the defendant seeks to
add to the contract by parol evidence cannot be considered. The rights of the
parties must be determined by the writing itself.
2. We conclude that the contract in the case at bar was merely an executory
agreement; a promise of sale and not a sale. At there was no perfected sale, it
is clear that articles 1452, 1096, and 1182 are not applicable. The defendant
having defaulted in his engagement, the plaintiff is entitled to recover the
P3,000 which it advanced to the defendant, and this portion of the judgment
appealed from must therefore be affirmed.
3. The contract plainly states that if the defendant fails to deliver the 600 piculs
of sugar within the time agreed on, the contract will be rescinded and he will be
obliged to return the P3,000 and pay the sum of P1,200 by way of indemnity for
loss and damages. There cannot be the slightest doubt about the meaning of
this language or the intention of the parties. There is no room for either
interpretation or construction. Under the provisions of article 1255 of the Civil
Code contracting parties are free to execute the contracts that they may
consider suitable, provided they are not in contravention of law, morals, or
public order. In our opinion there is nothing in the contract under consideration
which is opposed to any of these principles.
Hermogenes De Jesus vs. G. Urrutia & Co., G.R. No. 10863.
January 11, 1916
FACTS: On October 18, 1906, Diego Liñan, the son-in-law of the appellant,
executed a mortgage to the defendant company, appellee, on certain lands
then belonging to the mortgagor to secure the payment of the sum of
P12,591.35, which, by the terms of the mortgage, was to be paid 3 years from
the date thereof, with interest at 9 per cent annually. The mortgage was not
paid and judgment of foreclosure was obtained on July 5, 1911, the principal,
interest and costs amounting, on that date, to P14,224.53. The property was duly
sold pursuant to the judgment of foreclosure, there resulting a deficiency of
P7,874.97, for which the mortgagee was given a judgment. An execution was
issued thereon and, on the 28th of July, 1913, the lands described in the
complaint were levied upon for the satisfaction of said deficiency judgment. The
appellant, claiming to be the owner of the lands levied on, presented to the
sheriff who made the levy a claim in pursuance of section 451 of the Code of
Civil Procedure. The appellee insisted on the sale of said lands and gave the
bond required in that section. The sheriff thereupon proceeded with the
execution of the judgment and, on the 22d of September, 1913, sold the land
for the sum of P4,700.
ISSUES: Whether or not can there be recovery of the land so sold.
HELD: No. The trial court found in favor of the appellee and dismissed the action.
The claim of appellant to the lands in question is based on certain conveyances
made by Diego Liñan at various times from 1905 to 1908. We do not believe that
article 1297 of the Civil Code is applicable to the facts of this case. That article
provides:jgc:chanrob
"Contracts by virtue of which the debtor alienates property gratuitously are
presumed to be executed in fraud of creditors.
"Alienations for valuable considerations, made by persons against whom a
condemnatory judgment, in any instance, has been previously rendered, or a
writ of attachment of property has been issued, shall also be presumed
fraudulent."cralaw virtua1aw library
The first paragraph does not apply for the reason that the sale was not
gratuitous. The second paragraphs is equally inapplicable as the transfers were
made before a judgment had been obtained or a writ had been issued for the
seizure of Liñan’s property.
Finally, it is the undisputed evidence in the case, for that evidence was
presented by two of the witnesses for the appellee, that appellant, in
consummation of the sales, took immediate possession of the lands sold to him
by Liñan and continued in possession thereof until the sale by the appellee.
Although these witnesses were interested in the result of this action, they were
witnesses for the appellee; and it cannot now be heard to say that their
testimony is worthless because of that interest.
The case of Oria v. McMicking (21 Phil. Rep., 243), relied on by appellee, is not
applicable to the facts in this case, as will be seen by referring thereto.
The plaintiff not having proved any damages, none can be allowed.
Miguel Mapalo vs. Maximo Mapalo, G.R. No. L-21489 and L-21628
May 19, 1966
Facts: The spouses Miguel Mapalo and Candida Quiba were the registered
owners of a residential land located in Pangasinan. (1,635 sq. m.). The spouses
donated the eastern half of the land to Miguel’s brother – Maximo Mapalo who
was about to get married. However, they were deceived into signing, on
October 15, 1936, a deed of absolute sale over the entire land in Maximo’s
favor. Their signatures were procured by fraud because they were made to
believe by Maximo and the lawyer who acted as notary public who "translated"
the document, that the same was a deed of donation in Maximo's favor
covering one-half of their land. (It must be noted that the spouses are illiterate
farmers).
Although the document of sale stated a consideration of Five Hundred
(P500.00) Pesos, the aforesaid spouses did not receive anything of value for the
land. In 1938, Maximo Mapalo, without the consent of the spouse, registered
the sale in his favor. After thirteen years (1951), he sold the land to the
Narcisos. (Evaristo, Petronila Pacifico and Miguel) who thereafter registered the
sale and obtained a title in their favor. In 1952, the Narcisos filed a complaint
with the CFI to be declared owners of the entire land, for possession of its
western portion; for damages; and for rentals. The Mapalo spouses filed a
counterclaim seeking cancellation of the the Narcisos’ titles as to the western
half of the land. They said that their signatures to the deed of sale of 1936 was
procured by fraud and that the Narcisos were buyers in bad faith. They also filed
another complaint wherein they asked the court to declare deeds of sale of
1936 and of 1951 over the land in question be declared null and void as to the
western half of said land. CFI ruled in favor of the Mapalo spouses. Upon appeal
filed by Narcisos, CA reversed the lower court’s ruling solely on the ground that
the consent of the Mapalo spouses to the deed of sale of 1936 having been
obtained by fraud, the same was voidable, not void ab initio, and, therefore,
the action to annul the same, within four years from notice of the fraud, had
long prescribed. (From March 15, 1938). Hence, this appeal.
Issues: 1. Whether or not the deed of sale executed in 1936 was null and void.
2. Whether or not the Narcisos were purchasers in good faith.
Held: 1. Yes, the sale was void.
The Civil Code governs the transaction because it was executed in 1936.
Accordingly, since the deed of sale of 1936 is governed by the Old Civil Code, it
should be asked whether its case is one wherein there is no consideration, or
one with a statement of a false consideration. If the former, it is void and
inexistent; if the latter, only voidable, under the Old Civil Code.
There is lack of consideration. As observed earlier, the deed of sale of 1936
stated that it had for its consideration Five Hundred (P500.00) Pesos. In fact,
however, said consideration was totally absent. The problem, therefore, is
whether a deed which states a consideration that in fact did not exist, is a
contract without consideration, and therefore void ab initio, or a contract with a
false consideration, and therefore, at least under the Old Civil Code, voidable.
When there is no consideration, the contract is null and void. According to
Manresa, what is meant by a contract that states a false consideration is one
that has in fact a real consideration but the same is not the one stated in the
document.
In our view, therefore, the ruling of this Court in Ocejo, Perez & Co. vs. Flores, 40
Phil. 921, is squarely applicable herein. In that case we ruled that a contract of
purchase and sale is null and void and produces no effect whatsoever where
the same is without cause or consideration in that the purchase price which
appears thereon as paid has in fact never been paid by the purchaser to the
vendor.
2. No, they were no purchasers in good faith.
Narcisos were not buyers in good faith. Aside from the fact that all the parties in
these cases are neighbors, except Maximo Mapalo the foregoing facts are
explicit enough and sufficiently reveal that the Narcisos were aware of the
nature and extent of the interest of Maximo Mapalo their vendor, over the
above-described land before and at the time the deed of sale in their favor was
executed.
The Narcisos were purchaser-in-value but not purchasers in good faith. What
was the necessity, purpose and reason of Pacifico Narciso in still going to the
spouses Mapalo and asked them to permit their brother Maximo to dispose of
the above-described land? To this question it is safe to state that this act of
Pacifico Narciso is a conclusive manifestation that they (the Narcisos) did not
only have prior knowledge of the ownership of said spouses over the western
half portion in question but that they also have recognized said ownership. It
also conclusively shows their prior knowledge of the want of dominion on the
part of their vendor Maximo Mapalo over the whole land and also of the flaw of
his title thereto. Under this situation, the Narcisos may be considered purchasers
in value but certainly not as purchasers in good faith.
Teodoro Velez vs. Salomon Ramas, G.R. No. 14997, February 16, 1920
FACTS:
An employee in a pawnshop named Restituta Quirante embezzled a sum
of money from said pawnshop, and in order that she would not be prosecuted,
her father and her husband signed a promissory note to pay the amount
embezzled, with interest to the victim. When they did not pay, the victim instituted
an action to recover the said amount.
ISSUE:
Whether or not the recovery can be made.
HELD: YES
Recover can be made because the cause of consideration is illicit, namely,
to prevent a prosecution for a crime. This was clearly the purpose of the father,
and also the purpose of the husband. And even if the victim were to claim that
even without that purpose the husband’s intention was merely to pay that which
he owes, as a member of the conjugal partnership, for his wife’s act, still since the
wife was not made a defendant in the instant case, the husband’s liability cannot
be enforced in the present proceeding.
Alexander T. Castro vs. Luis Escutin, GR No. L-27406, May 31, 1979
FACTS:
Plaintiff-appellant Alexander Castro is the adopted son of the late Father
Eduardo N. Castro, parish priest of Tanjay Negros Oriental. Defendant-appellee
Luis Escutin is one of the heirs, and the administrator of the testate estate, of the
late Nicanor Escutin, who died in 1955. Upon Nicanor's death, Special
Proceedings No. V-2033 over his testate estate was filed in the Court of First
Instance, Branch 11. In the special proceedings, defendant-appellee Luis
Escutin, in his capacity as Administrator, returned an inventory; plaintiffappellant Alexander Castro filed a motion to exclude the subject 30 parcels of
land from this inventory on the ground that they are his properties. Before this
motion could be resolved in Branch II, the complaint in this case was filed in
Branch 1. Accordingly, the presiding judge in Branch II entered an order in
Special Proceedings No. V-2033, holding in abeyance his resolution of the
motion, pending final determination of the civil action in Branch 1. The decision
rendered on 7 July 1966 by the court a quo dismissed the complaint, with costs
against the plaintiff. Hence, this appeal.
At the pre-trial conference, the parties admitted the genuineness and due
execution, both of the contract of mortgage, and of the deed of definite sale
with the built-in lease contract. Therefore, the only issue left was whether the two
contracts, which are onerous in character, were executed for consideration
and therefore valid, as claimed by plaintiff-appellant; or were simulated and
therefore void, as claimed by defendant-appellee. This remains the issue on
appeal.
ISSUES:
Whether or not to exclude the subject 30 parcels of land and claim ownership.
HELD:
VOID.
The plaintiff-appellant implicitly admits as much, for in the lower court, he
argued that this case should be subsumed under the principle of In pari delicto
non oritur action (Record on Appeal, page 121). However, to the general rule
that when two persons are equally at fault, the law will not relieve them, the
Supreme Court has laid down an exception, by deciding that rule does not
apply to an inexistent contract. Moreover, the intent to defraud, which was the
animus of the two simulated contracts, was never effectuated. For the finances
of the Hacienda Escutin subsequently took a turn for the better, and Asturias
abandoned the threat to foreclose the mortgage on the hacienda.
Another token of fraud is the relationship between Nicanor and Father Castro,
the ostensible mortgagee-vendee. It has been observed that fraud is generally
accompanied by a secret trust, and that, as in this case, the ostensible debtor
selects a person in whom he can repose trust and confidence. Nicanor and
Father Castro were bosom friends with a long history of trust and intimacy. The
element of trust is further accentuated by the execution between them, in
addition to the two instruments in question, of two secret documents known as
the counter-receipt.
Thus, in their totality, defendant-appellee's proof is sufficiently weighty to
overthrow the legal presumption of sufficient consideration. Badges of fraud,
when clear and unmistakable, will serve to destroy the camouflage of
validity. Indeed, we find overwhelming proof that the instruments in question
were without consideration and fraudulent, executed merely to lend color of
authenticity to what was calculated as Nicanor's would-be status of
insolvency. Since both the mortgage and the sale were fictitious and simulated,
they were void ab. In the contemplation of law, it is as if they never were, with
the result that the lands covered by the instruments remain under the ownership
of the alleged mortgagor-vendor, Nicanor Escutin, and his successors-in-interest.
Askay vs. Fernando A. Cosalan, G.R. No. 21943 September 15, 1924
Facts: Askay, an illiterate Igorrote between 70 and 80 years of age, residing in
the municipal district of Tublay, Province of Benguet, who at various times has
been the owner of mining property. The defendant is Fernando A. Cosalan, the
nephew by marriage of Askay, and municipal president of Tublay, who likewise
has been interested along with his uncle in mining enterprises.AS
About 1907, Askay obtained title to the Pet Kel Mineral Claim located in Tublay,
Benguet. On November 23, 1914, if we are to accept defendant's Exhibit 1,
Askay sold this claim to Cosalan. Nine years later, in 1923, Askay instituted action
in the Court of First Instance of Benguet to have the sale of the Pet Kel Mineral
Claim adhered null, to secure possession of the mineral claim, and to obtain
damages from the defendant in the amount of P10,500. Following the
presentation of various pleadings including the answer of the defendant, and
following trial before Judge of First Instance Harvey, judgment was rendered
dismissing the complaint and absolving the defendant from the same, with costs
against the plaintiff. On being informed of the judgment of the trial court,
plaintiff attacked it on two grounds: The first, jurisdiction, and the second, formal.
Both motions were denied and an appeal was perfected.
Issue:
Whether or not the deed of sale can be cancelled based on the plaintiff‘s claim
Held:
No, in our judgment he has failed to establish his claim. Fraud must be both
alleged and proved. One fact exists in plaintiff's favor, and this is the age and
ignorance of the plaintiff who could be easily duped by the defendant, a man
of greater intelligence. Another fact is the inadequacy of the consideration for
the transfer which, according to the conveyance, consisted of P1 and other
valuable consideration, and which, according to the oral testimony, in reality
consisted of P107 in cash, a bill fold, one sheet, one cow, and two carabaos.
Gross inadequacy naturally suggests fraud and is some evidence thereof, so
that it may be sufficient to show it when taken in connection with other
circumstances, such as ignorance or the fact that one of the parties has an
advantage over the other. But the fact that the bargain was a hard one,
coupled with mere inadequacy of price when both parties are in a position to
form an independent judgment concerning the transaction, is not a sufficient
ground for the cancellation of a contract.
Angel Jose Warehousing Co. Inc., vs. Chelda Enterprises and David
Syjueco, G.R. No. L-25704 April 24, 1968
Facts: Angel Warehousing Co., Inc. (plaintiff) filed a suit against Chelda
Enterprises and David Syjueco (defendants) for recovery of alleged unpaid
loans in the amount of 20,880php, with legal interest. Plaintiff alleged that the
post dated checks issued by defendants to pay said account were dishonored;
that defendants’ industrial partner, Chellaram I. Mohinani, had left the country,
and; that defendants have removed or disposed of their property, or about to
do so, with intent to defraud their creditors. The plaintiff also sought for
preliminary attachment. As defendants’ answer, they averred that they
obtained four loans from the plaintiff in the total amount of 26,500php, of which
5,620php had been paid, leaving a balance of 20,880php; that the plaintiff
charged and deducted from the loan usurious interest thereon, at rates of 2%
and 2.5% per month, and consequently, plaintiff has no cause of action against
the defendants and should not be permitted to recover under the law.
ISSUE: Whether or not the illegal terms as to payment of interest likewise renders
a nullity the legal terms as to payments of the principal debt.
HELD: No.
Art. 1411, which provides: When the nullity proceeds from the illegality of the
cause or object of the contract, and the act constitutes criminal offense, both
parties being in pari delicto, they shall have no action against each other, and
both shall be prosecuted. Moreover, the provisions of the Penal Code relative to
the disposal of effects or instruments of a crime shall be applicable to the things
or the price of the contract.
In simple loan with stipulation of usurious interest, the prestation of the debtor to
pay the principal debt, which is the cause of the contract (Article 1350, Civil
Code), is not illegal. The illegality lies only as to the prestation to pay the
stipulated interest; hence, being separable, the latter only should be deemed
void, since it is the only one that is illegal.
Generosa Ayson-Simon vs. Nicolas Adamos and Vicenta Feria, G.R.
NO. L-39378 AUGUST 28, 1984
FACTS: Defendants, Nicolas Adamos and Vicente Feria, purchased two lots
forming part of the Piedad Estate in Quezon City, from Juan Porciuncula.
Thereafter, the successors-in-interest of the latter filed Civil Case No. 174 for
annulment of the sale and the cancellation of TCT No. 69475, which had been
issued to defendants-appellants by virtue of the disputed sale. The Court
rendered a Decision annulling the sale. The said judgment was affirmed by the
Appellate Court and had attained finality.
Meanwhile, during the pendency of the case above, defendants sold the said
two lots to Petitioner Generosa Ayson-Simon for Php3,800.00 plus Php800.00 for
facilitating the issuance of the new titles in favor of petitioner. Due to the failure
of the defendants to deliver the said lots, petitioner filed a civil case for specific
performance. The trial court rendered judgment to petitioner’s favor. However,
defendants could not deliver the said lots because the CA had already
annulled the sale of the two lots in Civil Case No. 174. Thus, petitioner filed
another civil case for the rescission of the contract.
Defendants were contending that petitioner cannot choose to rescind the
contract since petitioner chose for specific performance of the obligation. Also,
even though petitioner can choose to rescind the contract, it would not be
possible, because it has already prescribed.
ISSUES: 1. Whether or not can the petitioner choose to rescind the contract even
after choosing for the specific performance of the obligation?
2. Whether or not they had the option to rescind the contract prescribed?
HELD: 1. Yes. The rule that the injured party can only choose between fulfillment
and rescission of the obligation, and cannot have both, applies when the
obligation is possible of fulfillment. If, as in this case, the fulfillment has become
impossible, Article 1191 allows the injured party to seek rescission even after he
has chosen fulfillment.
2. No. Article 1191 of the Civil Code provides that the injured party may also
seek rescission, if the fulfillment should become impossible. The cause of action
to claim rescission arises when the fulfillment of the obligation became
impossible when the Court of First Instance of Quezon City in Civil Case No. 174
declared the sale of the land to defendants by Juan Porciuncula a complete
nullity and ordered the cancellation of Transfer Certificate of Title No. 69475
issued to them. Since the two lots sold to plaintiff by defendant’s form part of the
land involved in Civil Case No. 174, it became impossible for defendants to
secure and deliver the titles to and the possession of the lots to plaintiff. But
plaintiff had to wait for the finality of the decision in Civil Case No. 174,
According to the certification of the clerk of the Court of First Instance of
Quezon City (Exhibit "E-2"), the decision in Civil Case No. 174 became final and
executory "as per entry of Judgment dated May 3, 1967 of the Court of
Appeals." The action for rescission must be commenced within four years from
that date, May 3, 1967. Since the complaint for rescission was filed on August 16,
1968, the four-year period within which the action must be commenced had not
expired.
Rodriguez vs CA, G.R. No. L-29264 August 29, 1969
FACTS: On December 31, 1958, a document denominated "Kasunduan" written
in the vernacular and ratified before Notary Public was executed between
Nieves Cruz and spouses Atanacio Valenzuela, and Maximina Victorio and
Liberate Santos authorizing the latter three (as agents) to sell a certain parcel of
land situated in Rizal. The price payable to Cruz for the land would be P1.60 per
sq. Meter and any overprice would pertain to the agents; that Nieves Cruz
would receive agents advance payments for the purchase price by
whomsoever may buy the land, in a first P10,000 and another P10,000 thereafter.
Should the agent find no buyer by the time that Torrens title is issued, Nieves Cruz
reserved the right to look for a buyer herself and all sums already received from
the agents would be returned to them without interest. Amounts received were
evidenced by a receipt. Ad thereafter, Cruz and her children collected various
sums of money either thru Victorio or Salud de Leon (daughter of Santos) from
1969 to 1961 as additional payments for the land, all totaling P47, 198.
Proceedings to place land under the Torrens System were initiated and the
registration court decreed in 1960 the land in the name of Cruz and her brother,
subject to the rights of Valenzuela, Victorio, and Santos over the ½ share of the
land which they partially paid for, as carried over the annotation in the
Certificate of title. Then, on September 15, 1961, Cruz sold the property in
question to Barbara Lombos Rodriguez, her "balae, for P77,216 and a TCT was
issued in the name of Rodriguez which likewise carried over the annotation
pertaining to the ½ part. On the next day Cruz, thru counsel, gave notice to the
three agents to rescind their original agreement with a corresponding check in
the amount of all their payments. Agents returned the check, thus Cruz came
before the Rizal Court for an action of rescission and cancellation of annotation.
Agents content that the agreement has been novated by a subsequent
agreement where under they were to buy the property directly and the
annulment of the sale to Rodriguez. Pending the case, Cruz died and substituted
by her children.
Trial Court decision: In favor of Cruz and Rodriguez as against the defendants
(agents)
Court of Appeals decision: Reversed decision of Trial Court ordering possession
to be restored to the agents and Rodriguez divested of title over the land.
Two cases over the same land was brought before the Supreme Court, one
where Rodriguez and heirs of Cruz filed a joint petition for certiorari but filed
beyond the reglamentary period mentioned in Rule 45 of Civil Procedure*. The
action was denied. Another action (present action) was filed solely by Rodriguez
for mandamus and certiorari with new grounds, such as (1) land has a value in
excess of P200,000 thus CA has no jurisdiction, and (2) grave abuse of discretion
by CA in denying her motion for new trial.
ISSUE: Whether or not Cruz did agree to sell to the agents the land in question.
HELD: A novatory oral contract existed between Cruz the agents. For several
times in the past, as affirmed by the son of Cruz, agents informed Cruz that Salud
de Leon (daughter of Santos) is the buyer of the land. Later, de Leon forgoes the
purchase of land in favor of the agents. Another fact of the existence of such
novation is the significance of the notation in the certificate of title in favor of
the agents, to which Cruz and her children did not protest for over a year and
continue to receive the 13 installment payments. SC, therefore, conclude that
there is substantial evidence in record sustaining that that parties to the agency
agreement subsequently entered into a different contract, one that of sale and
the legion of receipts that come to support it. In the case of Rodriguez, being
aware of the annotations in the certificate, she cannot claim to be an innocent
purchaser for value. As to the two grounds she raised before SC, the first ground
does not have any merit because the value of the land, as evidenced by
various sale transactions, could not have been beyond 200,000. She was also
estopped from raising jurisdiction against CA when in the first place, she has
subjected herself under its jurisdiction during the various hearings until the
decision of the appealed case. An unfavorable judgment and the goal to
secure relief could not afford one to raise the issue of jurisdiction. As to the
second ground, certainly, the CA could not entertain her request for motion for
new trail in application of estoppel by laches**. SC declared the estate of Cruz
to be liable to Rodriguez for the sum she paid for the land and affirmed findings
of the CA.
MARCIANA CONLU vs. PABLO ARANETA, G.R. No. L-4508, March 4
1910
FACTS: Plaintiffs commenced an action against the defendants to recover, as
owners, certain parcels of land located in the pueblo of Molo, Province of Iloilo,
plus damages. The defendants alleged that they are the owners of the parcels
of land in question. The question thus presented by the complaint and answer
was simply, who are the owners of said parcels of land?
The lower court found that: The plaintiffs were the owners and were
entitled to the possession of all of the parcels of land. Evidence establishes the
fact that the house in question, with the tile roof, was originally the property of
Catalina Tiongco, sister of Anselma, which was afterwards left to Anselma by
virtue of the will made by Catalina before her death. That after that time,
Anselma’s nephew, Vito Tiongco, was appointed gobernadorcillo of Molo,
whose appointment was contested due to the fact that he was not the owner
of any realty. That Anselma, who then possessed many properties, put Vito
Tiongco into possession of the said tile-roofed house as apparently his own
property. He lived in the house from that date up to the time of his death in
1904, and, as it appeared to everybody, he considered it as if he was the real
owner thereof. He made many repairs as well as alterations in the house on his
account. The lower court found that, after being put into possession of the
house in the manner above mentioned, Anselma agreed that he (Vito) could
have the house as his own if he would pay to her P3,000 (which sum is alleged to
be the amount paid by her sister Catalina for the erection of said house) And
that afterwards, and before the death of Anselma, he had paid this sum to the
satisfaction of Anselma, and, while no formal conveyance of the property on
the part of Anselma can be adduced, the lower court found that some time
subsequent to that date he claimed it as his property and it was recognized as
his own. Therefore, the lower court found that the house with tile roof was, at the
time of the death of Anselma, really the property of Vito Tiongco, her nephew.
From this decision of the lower court the plaintiffs appealed and made the
following assignments of error in his court: First. In allowing the defendants to
prove by means of oral evidence, the ownership of the said realty. Second. In
declaring that Anselma Tiongco sold the realty in question to Vito Tiongco.
ISSUE: Whether or not the sale of real property made in 1887 be proved by oral
testimony?
HELD: The Supreme Court ruled in the affirmative.
An oral contract for the sale of real estate, made prior to the enactment of
the Code of Civil Procedure, is binding between the parties thereto, although it
may still be necessary for the parties seeking to enforce such contract to take
some action to secure the execution of proper documents, but this requirement
will not render the agreement invalid.
Section 335 of the Code of Procedure in Civil Actions, now in force, has
established a rule relating to the method of proving contracts of sale of real
property, and an oral contract for the sale of real property cannot now be
proven under said section 335 except "some note or memorandum thereof be in
writing and subscribed by the party charged or by his agent." However, said
section (335) makes no attempt to render such contracts [oral contracts] invalid.
It simply provides that the contract shall not be enforced by an action, unless
the same is evidenced by some note or memorandum.
It does not attempt to make contracts invalid which have not been e
executed in writing. This provision does not go to the existence of the contract,
except when made by an agent. The contract exists and is valid, though it may
not be clothed with the necessary form and the effect of a noncompliance with
the provisions of the statute is simply that no action can be proved unless the
requirement is complied with; but a failure to except to the evidence because it
does not conform with the statute is a waiver of the provisions of the law.
If the parties to the action, during the trial make no objection to the
admissibility of oral evidence to support a contract of sale of real property, and
thus permit the contract to be proved, it will be just as binding upon the parties
as if it had been reduced to writing. In the present case the defendants called
thirteen witnesses, who each testified concerning the sale of the parcel of land
and the house in question by Anselma Tiongco to Vito Tiongco, in or about the
year 1887, and no objection was made by the plaintiffs to the admissibility of this
testimony. The plaintiffs did not invoke the provisions of section 335. They
permitted the defendants to prove the oral contract of sale. The contract of
sale, therefore, being fully proven, and under the provisions of the law an oral
contract for the sale of real property being binding and valid between the
parties, we see no escape from the conclusion that if the evidence was
sufficient to show the sale, that the contract was binding, even though it had
not been reduced to writing.
Jorge Domalagan vs. Carlos Bolifer, G.R. No. 8166 February 8, 1916
FACTS: Domalagan and the defendant entered into a contract with the
following terms: (1) Their son Cipriano Domalagan and daughter Bonifacia
Bolifer will marry; (2) Upon the marriage Domalagan was to pay to the
defendant the sum of P500. Petitioner comply and pay the sum of P500,
together with the further sum of P16 "as hansel or token of future marriage” to
Bolifer. However, her daughter Bonifacia married another man.
Upon learning the marriage, petitioner demanded the return of the said sum of
P516 together with the interest and damages because he alleged that he was
obliged to sell certain real property belonging to him, located in the Province of
Bohol, at a great sacrifice.
The lower court ruled in against the defendant and he was obliged to pay P516
together with the interest at the rate of 6 per cent from the 17th of December,
1910, and costs. Hence, this appeal.
The appellant contends that a contract, such as the one relied upon by the
plaintiff, in order to be valid, must be reduced to writing pursuant to paragraph
3 of section 335 of the Code of Procedure in Civil Actions.
ISSUES: Whether or not the verbal agreement between Domalagan and Bolifer
to marry their children is binding
HELD: Yes.
The verbal agreement is binding. Said section (335) does not render oral
contracts invalid. It simply provides the method by which the contracts
mentioned therein may be proved.
A contract may be a perfectly valid contract even though it is not clothed with
the necessary form especially if the parties to an action, during the trial of the
cause, make no objection to the admissibility of oral evidence. it will be just as
binding upon the parties as if it had been reduced to writing.
For the foregoing reasons we find nothing in the record justifying a reversal or
modification of the judgment of the lower court based upon either assignment
of error. Therefore, the judgment of the lower court is hereby affirmed, with costs.
So ordered.
Eutiquiano Cuyugan vs. Isidoro Santos, G.R. No. L-10265 March 3,
1916
FACTS: Eutiquiyano Cuyugan filed an action to compel Santos to enforce his right
to repurchase in the deed of sale entered into by his late mother, Guillerma, with
the defendant. Allegedly, a deed of sale of the subject land was entered into by
Guillerma, and Santos with a right to repurchase the land in a stipulated period
of time, although this deed of sale is executed as a security for a loan that
Guillerma have with Santos. In the deed of sale, it further stated that Guillerma
shall continue to have possession of the land, and pay an annual rental of php
420 per annum which is the amount equal to the loan’s interest. That after
sometime, Guillerma paid 1,000 pesos on the loan, which then reduced the
amount of the annual rental from 400 to 320 php. When Guillerma died, Santos
sent Cuyugan a notice to comply with the 420php rental, which was agreed upon
prior to the payment of 1000php or he will eject Cuyugan from the land. Cuyugan
then offered to pay the balance that his mother owes Santos by virtue of the right
to repurchase agreed upon on the deed of sale, but Santos refused to do so.
A demurrer to the complaint was filed by Santos, which was sustained by the court
alleging that the period of the right to repurchase has long been expired.
ISSUE: Whether or not the demurrer should be sustained or overruled by the court.
HELD:
The Supreme Court held that what should be given force is the intention of the
parties, and not the provisions of the instrument on its face. Under the provisions
of contracts, for a valid contract to exist, there should be;
1) consent
2) cause
3) consideration.
Thus, in the present case, what is consented by both parties is that this deed of
sale is only in consideration for a loan, or by a nature of a contract of mortgage.
Moreover, by way of evidence it was established by the court that the parties
indeed treat such as a contract of loan rather than a deed of sale when Santos,
when given by Guillerma 1000 php in favor of such contract, lowered the
payment of the rental from 400-320 php. Since the agreement was the 400 be
equal to the interest per annum, when the loan was reduced, the interest as well
reduced. This transaction proved that the treatment and the intention of the
parties was indeed as a security for the loan, and not as a deed of sale appearing
before the face of the contract. Thus, the Supreme Court ruled that the demurrer
of evidence should be overruled.
Western Mindanao Lumber Co. Inc., vs. Natividad M. Medalle and
Antonio Medalle, G.R. No. L-23213 October 28, 1977
FACTS: Western Mindanao Lumber Co. Inc. is engaged in logging operations in
Zamboanga City. In 8 September 1955, it obtained a right-of-way over a
property (Lot 2136) owned by Ludano Hernandez. Westem constructed,
maintained and made improvements on the road.
In 1958, the said property was purchased by defendants Medalle. They allowed
the continued use and maintenance of the road by western and the public.
When the Medalle notified western of their intention to close the road, the latter
filed a complaint, praying that a writ of preliminary injunction be issued
restraining Medalle from closing the said road, and after hearing, make the
injunction permanent.
Medalle filed a motion to dismiss the complaint upon the ground that the claim
on which the action or suit is founded is unenforceable under the provisions of
the Statute of Frauds and special law, in that the first page of the said road rightof-way agreement was not signed by both parties and their instrumental
witnesses; page two thereof is not dated, and the signature of the plaintiffs
corporate agent does not appear; and that said agreement is not
acknowledged before a person authorized to administer oaths.
The trial court granted the motion to dismiss. Hence, this appeal.
ISSUE: Whether or not the right-of-way agreement is covered by the Statute of
Frauds.
HELD: No.
Obviously an agreement creating an easement of right-of-way is not one of
those contracts covered by the Statue of Frauds since it is not a sale of property
or of an interest therein. The Statute of Frauds refers to specific kinds of
transactions and cannot apply to any that is not enumerated therein. As
provided in Art. 1403, par.2 of the Civil Code: The transactions or agreements
covered by said statute are the following: (a) An agreement that by its terms is
not to be performed within a year from the making thereof, (b) A special
promise to answer for the debt, default, or miscarriage of another; (c) An
agreement made in consideration of marriage, other than a mutual promise to
marry (d) An agreement for the sale of goods, chattels or things in action, at a
price not less than five hundred pesos unless the buyer accept and receive part
of such goods and chattels, or the evidences, or some of them, of such things in
action, or pay at the time same part of the purchase money; but when a sale is
made by auction and entry is made by the auctioneer in his sales book, at the
time of the sale, of the amount and kind of property sold, terms of sale price,
names of purchasers and person on whose account the sale is made, it is
sufficient memorandum, (e) An agreement for the leasing for a longer period
than one year, or for the sale of real property or of an interest therein, (f) A
representation as to the credit of a third person.
The trial court therefore, erred in dismissing the case upon the defendants' claim
that the road fight-of-way agreement in question is unenforceable under the
statute of frauds.
Maria San Miguel Vda. De Espiritu vs. CFI-Cavite, G.R. No. L-30486;
October 31, 1972
FACTS: Sometime in 1948 the defendants verbally sold to her the two parcels of
land in question for P3,000.00 Pesos and, in consequence, delivery thereof
together with the corresponding transfer certificates of title (TCT) was made to
her, but no deed of sale was executed at the time because private respondents
promised they would do so as soon as the titles which were then in the name of
their predecessor in interest were transferred to their names, and that despite
demands made by her for the execution of such deed, said respondents,
"without justifiable cause therefor adamantly failed and refused — to comply
with (such) just and valid demand." In their answer, defendants denied that the
transaction was a sale and alleged that it was merely a contract of antichresis
whereby petitioner had loaned to them P1, 500.00, for which she demanded the
delivery of the lands in question and the titles thereto as security, with the right to
collect or receive the income therefrom pending the payment of the loan. And
by way of affirmative defenses, respondents interposed (1) unenforceability by
action of the alleged sale, under the statute of frauds, and (2) prescription of
petitioner's action, the same having allegedly accrued in 1948. Subsequently,
respondents reiterated their said affirmative defense of prescription in a formal
motion to dismiss and as no opposition thereto was filed by petitioner, on July 31,
1967, respondent court issued the impugned order of dismissal reading as
follows:
Submitted for resolution is a motion to dismiss filed counsel for the
defendants to which no opposition has been filed despite the fact that the
plaintiff was furnished with a copy thereof. Finding the said motion to dismiss
to be well-taken for the reasons stated therein, this Court grants the same
and the complaint, dated October 16, 1964, is hereby dismissed with costs
against the plaintiff.
SO ORDERED.
Petitioner filed the complaint of October 20, 1964
ISSUE: Whether petitioner’s right to demand the execution of the TCTs already
prescribed.
HELD:
The right to demand the execution of the document required under Article 1358
is not imprescriptible.
The nature of petitioner’s action may be said to be one founded on an oral
contract, which, to be sure, cannot be considered among those rendered
unenforceable by the statute of frauds, for the simple reason that it has already
been, from petitioner’s own point of view, almost fully consummated by the
delivery of the lands and the corresponding titles to her. The petitioner’s action,
based as it is upon oral contract, prescribes in 6 years according to Article 1145
of the Civil Code. Assuming otherwise, the only other possibility is that petitioner’s
case comes under Article 1149 and the action prescribes in 5 years. In either
case, since the cause of action of petitioner accrued in 1948 and the present
suit was instituted in 1964 or sixteen years later, and none interrupting
circumstances enumerated in Article 1155 has been shown to have intervened,
it is unquestionable that petitioner’s action filed in the court below has already
prescribed.
Spouses Prudencio and Filomena Lim vs. Ma. Cheryl S. Lim, G.R. No.
163209 October 30, 2009
Facts: In 1979, Cheryl married Edward, son of petitioners. Cheryl bore Edward
three children, respondents Lester Edward, Candice Grace and Mariano III.
Cheryl, Edward and their children resided at the house of petitioners in Forbes
Park, Makati City, together with Edward’s ailing grandmother, Chua Giak and
her husband Mariano Lim (Mariano). Edward’s family business, which provided
him with a monthly salary of P6,000, shouldered the family expenses. Cheryl had
no steady source of income.
On October 14, 1990, Cheryl abandoned the Forbes Park residence, bringing
the children with her (then all minors), after a violent confrontation with Edward
whom she caught with the in-house midwife of Chua Giak in what the trial court
described "a very compromising situation."
Cheryl, for herself and her children, sued petitioners, Edward, Chua Giak and
Mariano (defendants) in RTC for support. RTC ordered Edward to provide
monthly support of P6,000 pendente lite.
On January 31, 1996, RTC rendered judgment ordering Edward and petitioners
to "jointly" provide P40,000 monthly support to respondents, with Edward
shouldering P6,000 and petitioners the balance of P34,000 subject to Chua
Giak’s subsidiary liability. The defendants sought reconsideration, questioning
their liability. RTC, while denying reconsideration, clarified that petitioners and
Chua Giak were held jointly liable with Edward because of the latter’s “inability
to give sufficient support”.
Petitioners appealed to the CA assailing, among others, their liability to support
respondents. Petitioners argued that while Edward’s income is insufficient, the
law itself sanctions its effects by providing that legal support should be "in
keeping with the financial capacity of the family" under Article 194 of the Civil
Code, as amended by Executive Order No. 209 (The Family Code of the
Philippines).
On April 28, 2003, CA affirmed RTC. Parents and their legitimate children are
obliged to mutually support one another and this obligation extends down to
the legitimate grandchildren and great grandchildren. Should the person
obliged to give support does not have sufficient means to satisfy all claims, the
other persons enumerated in Article 199 in its order shall provide the necessary
support. This is because the closer the relationship of the relatives, the stronger
the tie that binds them. Thus, the obligation to support is imposed first upon the
shoulders of the closer relatives and only in their default is the obligation moved
to the next nearer relatives and so on. CA denied motion for reconsideration.
Issue: Whether or not the petitioners are concurrently liable with Edward to
provide support to respondents.
Held: Yes.
Petitioners are liable to provide support but only to their grandchildren. By
statutory and jurisprudential mandate, the liability of ascendants to provide
legal support to their descendants is beyond cavil. Petitioners themselves admit
as much – they limit their petition to the narrow question of when their liability is
triggered, not if they are liable. Relying on provisions found in Title IX of the Civil
Code, as amended, on Parental Authority, petitioners theorize that their liability
is activated only upon default of parental authority, conceivably either by its
termination or suspension during the children’s minority. Because at the time
respondents sued for support, Cheryl and Edward exercised parental authority
over their children, petitioners submit that the obligation to support the latter’s
offspring ends with them.
Grandchildren cannot demand support directly from their grandparents if they
have parents (ascendants of nearest degree) who are capable of supporting
them. This is so because we have to follow the order of support under Art. 199.
There is no showing that private respondent is without means to support his son;
neither is there any evidence to prove that petitioner, as the paternal
grandmother, was willing to voluntarily provide for her grandson's legal support.
There is no question that Cheryl is unable to discharge her obligation to provide
sufficient legal support to her children, then all school-bound. It is also
undisputed that the amount of support Edward is able to give to
respondents, P6,000 a month, is insufficient to meet respondents’ basic needs.
This inability of Edward and Cheryl to sufficiently provide for their children shifts a
portion of their obligation to the ascendants in the nearest degree, both in the
paternal (petitioners) and maternal lines, following the ordering in Article
199.1avvphi1
Petitioners’ partial concurrent obligation extends only to their descendants as
this word is commonly understood to refer to relatives, by blood of lower degree.
As petitioners’ grandchildren by blood, only respondents Lester Edward,
Candice Grace and Mariano III belong to this category. Indeed, Cheryl’s right to
receive support from the Lim family extends only to her husband Edward, arising
from their marital bond. Cheryl’s share from the amount of monthly support RTC
awarded cannot be determined from the records. Thus, we are constrained to
remand the case to the trial court for this limited purpose.
As an alternative proposition, petitioners wish to avail of the option in Article 204
of the Civil Code, as amended, and pray that they be allowed to fulfill their
obligation by maintaining respondents at petitioners’ Makati residence. The
option is unavailable to petitioners. The application of Article 204 which provides
that the person obliged to give support shall have the option to fulfill the
obligation either by paying the allowance fixed, or by receiving and
maintaining in the family dwelling the person who has a right to receive
support. The latter alternative cannot be availed of in case there is
a moral or legal obstacle thereto.
The persons entitled to receive support are petitioners’ grandchildren and
daughter-in-law. Granting petitioners, the option in Article 204 will secure to the
grandchildren a well-provided future; however, it will also force Cheryl to return
to the house which, for her, is the scene of her husband’s infidelity.