contracts case digests.doc

8/20/2019 contracts case digests.doc

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ma be epress or implied, and there was an implied understanding between the petitioner andpri/ate respondent that the *ormer will pa the latter attorneEs *ees when a *inal decision shallha/e been rendered in *a/or o* the petitioner reinstating him to 5his *ormer position in the CentralBan$ and paing his bac$ salaries"

Issue: Whether or not there has been a contract between Corus and $tty. "avid for the ayment of the latter2s attorney2s fees.Held: +-. 4hile there was epress agreement between petitioner Corpus and respondent;a/id as regards attorneEs *ees, the *acts o* the case support the position o* respondent ;a/idthat there was at least an implied agreement *or the pament o* attorneEs *ees"

!etitionerEs act o* gi/ing the chec$ *or !2,((("(( through his a*orestated April 1


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scholastic merits so that his semestral tuition *ees were returned to him a*ter the ends o* semester and where his scholarship was granted to him" 4hen Cui applied to ta$e *or the Bar amination, he needed transcripts o* his records in Arellano but the latter denied until the *ormer will pa bac$ the amount re*unded to the *ormer b Arellano citing this pertinent pro/ision in acontract which Cui signed e/er a*ter grant o* scholarship, D6n consideration o* the scholarshipgranted to me b the &ni/ersit, 6 hereb wai/e m right to trans*er to another school withoutha/ing re*unded to the &ni/ersit -de*endant the e+ui/alent o* m scholarship cash" Cui raisedhis de*ense into this Memorandum issued b the ;irector o* !ri/ate 'chools, as *ollow:

D2" 4hen students are gi/en *ull or partial scholarships, it is understood thatsuch scholarships are merited and earned" he amount in tuition and other *ees corresponding to these scholarships should not be subse+uentlcharged to the recipient students when the decide to +uit school or totrans*er to another institution" 'cholarships should not be o**ered merel toattract and $eep students in a school"" 'e/eral complaints ha/e actuall been recei/ed *rom students who ha/een%oed scholarships, *ull or partial, to the e**ect that the could not trans*er to other schools since their credentials would not be released unless thewould pa the *ees corresponding to the period o* the scholarships" 4herethe Bureau belie/es that the right o* the student to trans*er is being denied onthis ground, it reser/es the right to authorize such trans*er"

Issue: Whether the rovision in the Contract between Cui and $rellano 3niversity whereby the former waived his ri&ht to transfer to another school without refundin& to the latter theequivalent of his scholarshi in cash is valid.

Held: !. %he stipulation 1here#& student cannot transfer to another school 1ithoutrefunding scholarship cash is null and void. /cholarship are awarded in recognition of merit

not to *eep outstanding students in school to 'olster its prestige " 6n the understanding o* thatuni/ersit scholarships award is a business scheme designed to increase the 'usiness potential of an education institution" hus concei/ed it is not onl inconsistent with sound polic but alsogood morals" But what is moralsN Manresa has this de*inition" 6t is good customs8 those generallaccepted principles o* moralit which ha/e recei/ed some $ind o* social and practicalcon*irmation" he practice o* awarding scholarships to attract students and $eep them in school isnot good customs nor has it recei/ed some $ind o* social and practical con*irmation ecept insome pri/ate institutions as in Arellano &ni/ersit" he &ni/ersit o* the !hilippines whichimplements 'ection = o* Article O6F o* the Constitution with re*erence to the gi/ing o* *reescholarships to gi*ted children, does not re+uire scholars to reimburse the corresponding /alue o* the scholarships i* the trans*er to other schools" 'o also with the leading colleges anduni/ersities o* the &nited 'tates a*ter which our educational practices or policies are patterned" 6nthese institutions scholarships are granted not to attract and to *eep 'rilliant students in school for their propaganda mine 'ut to reward merit or help gifted students in whom society has anesta'lished interest or a *irst lien" -mphasis supplied" 6n this case, scholarship award is a

business scheme designed to increase the business potential o* an educational institution withrespect to Arellano.s case"

Case: "a'on -aura vs. stela -indico, March 2, 19?(, J.B.$. "e&es.

Facts: amon " 'aura and stela !" 'indico were contesting *or nomination as the o**icialcandidate o* the acionalista !art in the *ourth district o* !angasinan in the congressionalelections o* o/ember 12, 19=7" 3n August 2, 19=7, the parties entered into a writtenagreement bearing the same date, containing among other matters stated therein, a pledge thatP

ach aspirant shall respect the result o* the a*oresaid con/ention, i"e", no one o* usshall either run as a rebel or independent candidate a*ter losing in said con/ention"

6n the pro/incial con/ention held b the acionalista !art on August 1, 19=7, 'aura waselected and proclaimed the !artEs o**icial congressional candidate *or the a*oresaid district o* !angasinan" onetheless, 'indico, in disregard o* the co/enant, *iled, on 'eptember ?, 19=7, her

certi*icate o* candidac *or the same o**ice with the Commission on lections, and she openl andacti/el campaigned *or her election" 4here*ore, on 3ctober =, 19=7, plainti** 'aura commencedthis suit *or the reco/er o* damages" &pon motion o* the de*endant, the lower court, in its order o* o/ember 19, 19=7, dismissed the complaint on the basis that the agreement sued upon is

null and /oid, in tat -1 the sub%ect matter o* the contract, being a public o**ice, is not within thecommerce o* man8 and -2 the pledge was in curtailment o* the *ree eercise o* electi/e*ranchise and there*ore against public polic" 0ence, this appeal"

Issue: Whether or not the a&reement between 4aura and 4indico is valid.

Held: !. 4e agree with the lower court in ad%udging the contract or agreement in +uestion anullit" Among those that ma not be the sub%ect matter -ob%ect o* contracts are certain rights o* indi/iduals, which the law and public polic ha/e deemed wise to eclude *rom the commerce o* man" Among them are the political rights con*erred upon citizens, including, but not limited to,onceEs right to /ote, the right to present oneEs candidac to the people and to be /oted to publico**ice, pro/ided, howe/er, that all the +uali*ications prescribed b law obtain" 'uch rights ma not,there*ore, be bargained awa curtailed with impunit, *or the are con*erred not *or indi/idual or pri/ate bene*it or ad/antage but *or the public good and interest"

Constitutional and statutor pro/ision *i the +uali*ications o* persons who ma be eligible *or certain electi/e public o**ices" 'aid re+uirements ma neither be enlarged nor reduced b mereagreements between pri/ate parties" A /oter possessing all the +uali*ications re+uired to *ill ano**ice ma, b himsel* or through a political part or group, present his candidac without *urther limitations than those pro/ided b law"

Case: $eal vs. I*C and 2icente -antiago 34ubstituted by 4alud 4antia&o#, o/ember =,19ustice !aras a**irmed the trial court.s decision"

Issue: Whether or not the rohibition to sell to third arties ursuant to the Comraventais valid.

Held: !. Contracts are generall binding between the parties, their assigns and heirs8 howe/er,under Art" 12== o* the Ci/il Code o* 'pain, which is applicable in this instance, pacts, clauses,

and conditions which are contrar to public order are null and /oid, thus, without an bindinge**ect"!arentheticall, the e+ui/alent pro/ision in the Ci/il Code o* the !hilippines is that o* Art" 1(?,which states: hat contracting parties ma establish such stipulations, clauses, terms andconditions as the ma deem con/enient, pro/ided the are not contrar to law, morals, goodcustoms, public order, or public polic" !ublic order signi*ies the public weal P public polic" 4

ssentiall, there*ore, public order and public polic mean one and the same thing" !ublic policis simpl the nglish e+ui/alent o* order publico in Art" 12== o* the Ci/il Code o* 'pain" 5 3ne such condition which is contrar to public polic is the present prohibition to sel* to thirdparties, because the same /irtuall amounts to a perpetual restriction to the right o* ownership,speci*icall the ownerEs right to *reel dispose o* his properties" his, we hold that an suchprohibition, inde*inite and stated as to time, so much so that it shall continue to be applicablee/en beond the li*etime o* the original parties to the contract, is, without doubt, a nullit" 6n thelight o* this pronouncement, we grant the petitionersE praer *or the cancellation o* the annotationso* this prohibition at the bac$ o* their rans*er Certi*icates Eitle"

6n the case be*ore us, we cannot and an epress or implied grant o* a right to repurchase, nor can we in*er, *rom an word or words in the +uestioned paragraph, the eistence o* an suchright" he interpretation in the resolution ->ustice 'ison is rather strained" he phrase in case


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case o* should be construed to mean should the buers wish to sell which is the plain andsimple import o* the words, and not the buers should sell, which is clearl a contortedconstruction o* the same phrase" he resort to Article 17 o* the Ci/il Code o* the !hilippines iserroneous" he sub%ect phrase is patent and unambiguous, hence, it must not be gi/en another interpretation

But e/en assuming that such a right o* repurchase is granted under the Compra/enta, thepetitioner correctl asserts that the same has alread prescribed" &nder Art" 1=(< o* the Ci/ilCode o* 'pain -Art," 1?(? o* the Ci/il Code o* the !hilippines, the right to redeem or repurchase,in the absence o* an epress agreement as to time, shall last *our ears *rom the date o* thecontract" 6n this case then, the right to repurchase, i* it was at *our guaranteed under in the

Compra/enta, should ha/e been eercise within *our ears *rom March 21, 191 -indubitablthe date o* eecution o* the contract, or at the latest in 19="6n the respondent courtEs resolution, it is *urther ruled that the right to repurchase was gi/en birthb the condition precedent pro/ided *or in the phrase siempre cuando estos ultimos puedenhacer la compra -when the buer has mone to bu" 6n other words, it is the respondent courtEscontention that the right ma be eercised onl when the buer has mone to bu" 6* this were so,the second paragraph o* Article 1=(< would appl P there is agreement as to the time, althoughit is inde*inite, there*ore, the right should be eercised within ten ears, because the law does not*a/or suspended ownership" 'ince the alleged right to repurchase was attempted to be eercisedb Ficente 'antiago onl in 19??, or 2= ears *rom the date o* the contract, the said right hasundoubtedl epired"

he law pro/ides that *or con/entional redemption to ta$e place, the /endor should reser/e, in nouncertain terms, the right to repurchase the thing sold" hus, the right to redeem must beepressl stipulated in the contract o* sale in order that it ma ha/e legal eistence"

Case: Banco Filipino -avings and )ortgage Bank vs. Hon. avarro and Florante Del 2alle,>ul 2


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Dhe rate o* interest charged on the obligation secured b this mortgage" " ", shall besub%ect, during the li*e o* this contract, to such an increaseLdecrease in accordance withpre/ailing rules, regulations and circulars o* the Central Ban$ o* the !hilippines as the!ro/ident #und Board o* rustees o* the Mortgagee ma prescribe *or its debtors andsub%ect to the condition that the increaseLdecrease shall onl ta$e e**ect on the date o* e**ecti/it o* said increaseLdecrease and shall onl appl to the remaining balance o* the loan"

#lorendo protested such increase" he trial court ruled in *a/or o* the ban$" 0owe/er, #lorendoargued that, the increased rate o* interest is onerous and was imposed unilaterall, without theconsent o* the borrower5spouses" And that there is in *act no Central Ban$ rule, regulation or other issuance which would ha/e triggered an application o* the escalation clause as to her

*actual situation"

Issue: Whether or not the bank has valid and le&al basis to imose an increased interest rate on the etitioner2s housin& loan.

Held: !. 6n the case at bar, the loan was per*ected on >ul 2(, 19anuar 29, 197" CB Circular o" 1? was issued on >ul 29, 197" CB Circ" =(was issued #ebruar ?, 197?" CB Circ" 7(? was issued ;ecember 1, 1979" CB Circ" 9(=, li*tingan interest rate ceiling prescribed under or pursuant to the &sur @aw, as amended, waspromulgated in 19


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Case: )etropolitan Bank and %rust Co'pan& vs. "ogelio "e&nado and Jose *drandea, August 9, 2(1(, J. Del Castillo"

Facts: 3n >anuar 1, 1997, petitioner Metropolitan Ban$ and rust Compan chargedrespondents be*ore the 3**ice o* the Cit !rosecutor o* Manila with the crime o* esta*a under

Article 1=, paragraph 1-b o* the e/ised !enal Code" 6n the a**ida/it o* petitioner.s audit o**icer, Antonio 6/an '" Aguirre, it was alleged that the special audit conducted on the cash and lendingoperations o* its !ort Area branch unco/ered anomalousL*raudulent transactions perpetrated brespondents in conni/ance with client &ni/ersal Con/erter !hilippines, 6nc" -&ni/ersal" 6n their de*ense, respondents denied responsibilit in the anomalous transactions with &ni/ersal andclaimed that the onl intended to help the !ort Area branch solicit and increase its deposit

accounts and dail transactions"Meanwhile, on #ebruar 2?, 1997, petitioner and &ni/ersal entered into a ;ebt 'ettlement

Agreement whereb the latter ac$nowledged its indebtedness to the *ormer in the total amount o* !=(,99(,97?"27 as o* #ebruar , 1997 and undertoo$ to pa the same in bi5monthlamortizations in the sum o* !((,((("(( starting >anuar 1=, 1997, co/ered b postdatedchec$s, Dplus balloon pament o* the remaining principal balance and interest and other charges,i* an, on ;ecember 1, 2((1" he Cit !rosecutor and ;3> dismissed the case" 0ence,Metroban$ *iled a petition *or certiorari and mandamus to CA" CA li$ewise a**irmed the decisionso* the Cit !rosecutor and ;3> stating that, while no/ation does not etinguish criminal liabilit, itma pre/ent the rise o* such liabilit as long as it occurs prior to the *iling o* the criminalin*ormation in court"

Issue: Whether or not the "ebt 4ettlement $&reement between Metroolitan Bank and /rust Comany and 3niversal is tantamount to a novation of obli&ation by the latter to theformer which extin&uishes the criminal liability for 7stafa by the latter.

Held: !. 6nitiall, it is best to emphasize that Dno/ation is not one o* the grounds prescribed bthe e/ised !enal Code *or the etinguishment o* criminal liabilit" 6n a catena o* cases, it wasruled that criminal liabilit *or esta*a is not a**ected b a compromise or no/ation o* contract" 6n5ira%a v. 0eole and Recuerdo v. 0eole, this Court ruled that in a crime o* esta*a,reimbursement or belated pament to the o**ended part o* the mone swindled b the accuseddoes not etinguish the criminal liabilit o* the latter" 4e also held in 0eole v. Moreno and in0eole v. 1adera that Dcriminal liabilit *or esta*a is not a**ected b compromise or no/ation o* contract, *or it is a public o**ense which must be prosecuted and punished b the Go/ernment onits own motion e/en though complete reparation should ha/e been made o* the damage su**eredb the o**ended part" 'imilarl in the case o* Metroolitan Bank and /rust Comany v./onda cited b petitioner, we held that in a crime o* esta*a, reimbursement o* or compromise asto the amount misappropriated, a*ter the commission o* the crime, a**ects onl the ci/il liabilit o* the o**ender, and not his criminal liabilit"

hus, the doctrine that e/ol/ed *rom the a*orecited cases is that a compromise or settlemententered into a*ter the commission o* the crime does not etinguish accused.s liabilit *or esta*a"either will the same bar the prosecution o* said crime" Accordingl, in such a situation, as in thiscase, the complaint *or esta*a against respondents should not be dismissed %ust becausepetitioner entered into a ;ebt 'ettlement Agreement with &ni/ersal" /en the 3'G arri/ed at thesame conclusion:

Contrar to the conclusion o* public respondent, the ;ebt 'ettlement Agreement entered intobetween petitioner and &ni/ersal Con/erter !hilippines etinguishes merel the ci/il aspect o* thelatter.s liabilit as a corporate entit but not the criminal liabilit o* the persons who actuallcommitted the crime o* esta*a against petitioner Metroban$"

Case: Prudential Bank and %rust Co'pan& 3BPI7 vs. $i1a&1a& *#asolo, 'eptember 27,2(1(, J. Carpio )orales.

Facts: @eonor Falenzuela5osales inherited two parcels o* land in @aguna which upon her deathwere inherited b her heirs thereb appointing @iwawa Abasolo as their agent thru the '!Aempowering the latter to sell the properties" 3ne, Corazon Marasigan epressed her interest inbuing that same properties but because she had no mone et she suggested the idea o* *irst

mortgaging the properties to !rudential Ban$ and the proceeds o* which would be paid directl to Abasolo" 3n consultation with !rudential Ban$.s emploee named orberto Mendiola, a ;eed o* Absolute 'ale was eecuted thereb trans*erring to Marasigan the propert with assurance that the proceeds thereof would 'e paid directly to 4'asolo. 4hen all went well with the loan, in theabsence o* a written re+uest *or a ban$ guarantee, the !BC released the proceeds o* the loanto Marasigan, whom latter despite repeated demands *ailedto pa the purchase price o* theproperties" Marasigan onl paid in $ind but ne/er the entire purchase price" 0ence, Abasolo *ileda complaint *or collection o* sum o* mone and annulment o* sale and mortgage with damages"Marasigan, howe/er, denied the eistence o* an agreement that the proceeds be paid to

Abasolo and that the pament in $ind was alread su**icient" C ruled in *a/or o* Abasoloordering !BC to pa Abasolo in the e/ent that Marasigan *ailed to pa" CA a**irmed"

Issue: Whether or not 0B/C would be subsidiarily liable to $basolo in the absence of any contractual relationshi between the two.

Held: !. 6n the absence o* a lender5borrower relationship between petitioner and @iwawa,there is no inherent obligation o* petitioner to release the proceeds o* the loan to her" o aban$ing institution, well5de*ined lending policies and sound lending practices are essential toper*orm its lending *unction e**ecti/el and minimize the ris$ inherent in an etension o* credit" 6norder to identi* and monitor loans that a ban$ has etended, a sstem o* documentation isnecessar" &nder this *old *alls the issuance b a ban$ o* a guarantee which is essentiall apromise to repa the liabilities o* a debtor, in this case Corazon" 6t would be contrar toestablished ban$ing practice i* Mendiola issued a ban$ guarantee, e/en i* no re+uest to thate**ect was made"

he principle of relati%ity of contracts in Article 111 o* the Ci/il Code supportspetitioner.s cause:

Art" 111" Contracts ta$e e**ect onl between the parties, their assigns and heirs, ecept in case where the rights and obligations arising*rom the contract are not transmissible b their nature, or b stipulation or bpro/ision o* law" he heir is not liable beond the /alue o* the propert herecei/ed *rom the decedent"

6* a contract should contain some stipulation in *a/or o* a thirdperson, he ma demand its *ul*illment pro/ided he communicated hisacceptance to the obligor be*ore its re/ocation" A mere incidental bene*it or interest o* a person is not su**icient" he contracting parties must ha/eclearl and deliberatel con*erred a *a/or upon a third person" -underscoringsupplied

#or @iwawa to pro/e her claim against petitioner, a clear and deliberate act o*

con*erring a *a/or upon her must be present" A written re+uest would ha/e su**iced to pro/e this,gi/en the nature o* a ban$ing business, not to mention the amount in/ol/ed"

'ince it has not been established that petitioner had an obligation to @iwawa, there isno breach to spea$ o*" @iwawa.s claim should onl be directed against Corazon" !etitioner cannot thus be held subisidiaril liable"

Case: *sian Catha& Finance and $easing Corporation vs. -pouses Cesario Gravador andor'a De 2era and -pouses Du'igpi, >ul =, 2(1(, J. achura.

Facts: Asian Catha #inance and @easing Corporation -AC#@C etended a loan o* ight0undred housand !esos -!


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he pointed out that the mortgage does not ma$e re*erence to the promissor note dated3ctober 22, 1999" he promissor note does not speci* the maturit date o* the loan, the interestrate, and the mode o* pament8 and it illegall imposed li+uidated damages" he real estatemortgage, on the other hand, contains a pro/ision on the wai/er o* the mortgagor.s right o* redemption, a pro/ision that is contrar to law and public polic" espondents added that AC#@C/iolated epublic Act o" 7?=, or the ruth in @ending Act, in the disclosure statement thatshould be issued to the borrower" C denied the application *or 3 b respondent andtherea*ter dismissed the complaint sustaining the /alidit o* the promissor note and real estatemortgage stating among others that, resondents are well-educated individuals who could not fei&n naivet8 in the execution of the loan documents " 6t, there*ore, re%ected respondents.claim that AC#@C decei/ed them into signing the promissor note, disclosure statement, and

deed o* real estate mortgage" he C *urther held that the alleged de*ects in the promissornote and in the deed o* real estate mortgage are too insubstantial to warrant the nulli*ication o* the mortgage" 6t added that a promissor note is not one o* the essential elements o* a mortgage8thus, re*erence to a promissor note is neither indispensable nor imperati/e *or the /alidit o* themortgage" CA re/ersed the trial court.s decision"

Issue: Whether or not the sub9ect romissory note and real estate mort&a&e is one of contract of adhesion.

Held: +-. he supposed wai/er b the mortgagors was contained in a statement made in *ineprint in the M" 6t was made in the *orm and language prepared b HpetitionerIAC#@C while theHrespondentsI merel a**ied their signatures or adhesion thereto" 6t thus parta$es o* the nature o* a contract o* adhesion" 6t is settled that doubts in the interpretation o* stipulations in contracts o* adhesion should be resol/ed against the part that prepared them" his principle especiall holdstrue with regard to wai/ers, which are not presumed, but which must be clearl and con/incingl

shown" H!etitionerI AC#@C presented no e/idence hence it *ailed to show the e**icac o* thiswai/er"Moreo/er, to sa that the mortgagor.s right o* redemption ma be wai/ed through a *ine print in amortgage contract is, in the last analsis, tantamount to placing at the mortgagee.s absolutedisposal the propert *oreclosed" 6t would render practicall nugator this right that is pro/ided blaw *or the mortgagor *or reasons o* public polic" A contract o* adhesion ma be struc$ down as/oid and unen*orceable *or being sub/ersi/e to public polic, when the wea$er part is completeldepri/ed o* the opportunit to bargain on e+ual *ooting"

Case: Pepito 2elasco, et al. vs. C* and G-I-, >anuar 2


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Held: +-. 6n the case o* & am and & Ket %s. @eonard -( !hil", 71, is *ound an elaboratedissertation upon the histor and interpretation o* the paragraph abo/e +uoted and so complete isthe discussion contained in that opinion that it would be idle *or us here to go o/er the samematter" 'u**ice it to sa that >ustice rent, spea$ing *or the court in that case, sums up itsconclusions upon the conditions go/erning the right o* the person *or whose bene*it a contract ismade to maintain an action *or the breach thereo* in the *ollowing words:/o& we 'elie%e the fairest test& in this urisdiction at least& where'y to determine whether theinterest of a third person in a contract is a stipulation pour autrui& or merely an incidental interest&is to rely upon the intention of the parties as disclosed 'y their contract.$f a third person claims an enforci'le interest in the contract& the !uestion must 'e settled 'y determining whether the contracting parties desired to tender him such an interest. id they

deli'erately insert terms in their agreement with the a%owed purpose of conferring a fa%or uponsuch third person $n resol%ing this !uestion& of course& the ordinary rules of construction and interpretation of writings must 'e o'ser%ed " -& am and & Ket %s. @eonard, supra"

#urther on in the same opinion he adds: $n applying this test to a stipulation pour autrui& it matters not whether the stipulation is in the nature of a gift or whether there is an o'ligation owing from the promise to the third person. 3hat no such o'ligation e)ists may in some degree assist indetermining whether the parties intended to 'enefit a third person& whether they stipulated for him. -& am and & Ket %s. @eonard, supra"

6n the light o* the conclusion thus stated, the right o* the plainti** to maintain the present action isclear enough8 *or it is undeniable that the ban$Es promise to cause a de*inite sum o* mone to bepaid to the plainti** in ew Kor$ Cit is a stipulation in his *a/or within the meaning o* theparagraph abo/e +uoted8 and the circumstances under which that promise was gi/en disclose ane/ident intention on the part o* the contracting parties that the plainti** should ha/e the mone

upon demand in ew Kor$ Cit" he recognition o* this un+uali*ied right in the plainti** to recei/ethe mone implies in our opinion the right in him to maintain an action to reco/er it8 and indeed i* the pro/ision in +uestion were not applicable to the *acts now be*ore us, it would be di**icult toconcei/e o* a case arising under it"

6t will be noted that under the paragraph cited a third person see$ing to en*orce compliance with astipulation in his *a/or must signi* his acceptance be*ore it has been re/o$ed" 6n this case theplainti** clearl signi*ied his acceptance to the ban$ b demanding pament8 and although the!hilippine ational Ban$ had alread directed i ts ew Kor$ agenc to withhold pament when thisdemand was made, the rights o* the plainti** cannot be considered to as there used, must beunderstood to impl re/ocation b the mutual consent o* the contracting parties, or at least bdirection o* the part purchasing he echange"

Case: Bonifacio Brothers Inc., et al. vs. nri>ue )ora, et al., Ma 29, 19?7, J. Castro.Facts: nri+ue Mora, owner o* 3ldsmobile sedan model 19=?, bearing plate o" RC5 mortgaged

the same to the 0"'" ees, 6nc", with the condition that the *ormer would insure the automobilewith the latter as bene*iciar" he automobile was therea*ter insured on >une 2, 19=9 with the'tate Bonding S 6nsurance Co", 6nc", and motor car insurance polic A5(?1= was issued tonri+ue Mora" ;uring the e**ecti/it o* the insurance contract, the car met with an accident" heinsurance compan then assigned the accident to the Bane Ad%ustment Co" *or in/estigation andappraisal o* the damage" nri+ue Mora, without the $nowledge and consent o* the 0"'" ees,6nc", authorized the Boni*acio Bros" 6nc" to *urnish the labor and materials, some o* which weresupplied b the Aala Auto !arts Co" #or the cost o* labor and materials, nri+ue Mora was billedat !2,1(2"7 through the 0"0" Bane Ad%ustment Co" 6n the meantime, the car was deli/ered tonri+ue Mora without the consent o* the 0"'" ees, 6nc", and without pament to the Boni*acioBros" 6nc" and the Aala Auto !arts Co" o* the cost o* repairs and materials" &pon the theor thatthe insurance proceeds should be paid directl to them, the Boni*acio Bros" 6nc" and the Aala

Auto !arts Co" *iled on Ma


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o constitute a /alid stipulation pour autrui it must be the purpose and intent o* the stipulatingparties to bene*it the third and it is not su**icient that the third person ma be incidentallbene*ited b the stipulation" he *airest test to determine whether the interest o* third person in acontract is a stipulation pour autrui or merel an incidental interest, is to rel upon the intention o* the parties as disclosed b their contract" 6n appling this test, it meters not whether thestipulation is in the nature o* a gi*t or whether there is an obligation owing *rom the promisee tothe third person" hat no such obsorption eists ma in some degree assist in determiningwhether the parties intended to bene*it a third person"

Case: Bank of *'erica % ? -* vs. I*C and *ir Cargo and %ravel Corporation, o/" 11,

19


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6* an agent acts in his own name, the principal has no right o* action against thepersons with whom the agent has contracted8 neither ha/e such persons against theprincipal"6n such case the agent is the one directl bound in *a/or o* the person with whom hehas contracted, as i* the transaction were his own, ecept when the contract in/ol/esthings belonging to the principal"

he pro/isions o* this article shag be understood to be without pre%udice to the actions betweenthe principal and agent"4hile in the instant case, the true charterers o* the /essel were the pri/ate respondents hereinand the chartered the /essel through an intermediar which upon instructions *rom them did notdisclose their names" *rticle 6 cannot help the private respondents, #ecause although

the& 1ere the actual principals in the charter of the vessel, the la1 does not allo1 the' to#ring an& action against the adverse part& and vice, versa.

Case: Geo Da&1alt vs. $a Corporacion De $os Padres *gustinos "ecoletos, et al., J.-treet.

Facts: 6n the ear 19(2, eodorica ndencia, an unmarried woman, resident in the !ro/ince o* Mindoro, eecuted a contract whereb she obligated hersel* to con/e to Geo" 4" ;awalt, a tracto* land situated in the barrio o* Mangarin, municipalit o* Bulalacao, now 'an >ose, in saidpro/ince" 6t was agreed that a deed should be eecuted as soon as the title to the land should beper*ected b proceedings in the Court o* @and egistration and a orrens certi*icate should beproduced there*ore in the name o* eodorica ndencia" A decree recognizing the right o* eodorica as owner was entered in said court in August 19(?, but the orrens certi*icate was notissued until later" he second contract was not immediatel carried into e**ect *or the reason thatthe orrens certi*icate was not et obtainable and in *act said certi*icate was not issued until the

period o* per*ormance contemplated in the contract had epired" he orrens certi*icate was intime issued to eodorica ndencia, but in the course o* the proceedings relati/e to the registrationo* the land, it was *ound b o**icial sur/e that the area o* the tract inclosed in the boundariesstated in the contract was about 1"2< hectares o* =2 hectares as stated in the contract" 6n /iewo* this de/elopment eodorica ndencia became reluctant to trans*er the whole tract to thepurchaser, asserting that she ne/er intended to sell so large an amount o* land and that she hadbeen misin*ormed as to its area"his attitude o* hers led to litigation in which ;awalt *inall succeeded, upon appeal to the'upreme Court, in obtaining a decree *or speci*ic per*ormance8 and eodorica ndencia wasordered to con/e the entire tract o* land to ;awalt pursuant to the contract o* 3ctober , 19(uan @abarga the procurador and chie* o**icial o* the de*endant corporation, until thedeli/er thereo* to the plainti** was made compulsor b reason o* the decree o* the 'upreme

Court in 191" Agustines then entered into some arrangement with ndencia with the use o* the land" ;awalt,howe/er, sued Agustines *or unlaw*ull inducing ndencia to re*rain *rom the per*ormance o* her contract *or the sale o* land in +uestion"

Issue: Whether 1a Cororacion may be held liable to the vendee, beyond the value of theuse and occuation of the land by colludin& with the vendor.

Held: !. 4hate/er ma be the character o* the liabilit which a stranger to a contract ma incur b ad/ising or assisting one o* the parties to e/ade per*ormance, there is one proposition uponwhich all must agree" his is, that the stranger cannot #eco'e 'ore e(tensivel& lia#le inda'ages for the nonperfor'ance of the contract than the part& in 1hose #ehalf heinter'eddles. %o hold the stranger lia#le for da'ages in e(cess of those that could #erecovered against the i''ediate part& to the contract 1ould lead to results at oncegrotes>ue and unust. 6n the case at bar, as eodorica ndencia was the part directl bound b

the contract, it is ob/ious that the liabilit o* the de*endant corporation, e/en admitting that it hasmade itsel* coparticipant in the breach o* the contract, can in no e/en eceed hers" his leads usto consider at this point the etent o* the liabilit o* eodorica ndencia to the plainti** b reason o* her *ailure to surrender the certi*icate o* title and to place the plainti** in possession"

6t should in the *irst place be noted that the liabilit o* eodorica ndencia *or damages resulting*rom the breach o* her contract with ;awalt was a proper sub%ect *or ad%udication in the action*or speci*ic per*ormance which ;awalt instituted against her in 19(9 and which was litigated bhim to a success*ul conclusion in this court, but without obtaining an special ad%udication withre*erence to damages" 6ndemni*ication *or damages resulting *rom the breach o* a contract is aright inseparabl anneed to e/er action *or the *ul*illment o* the obligation -art" 112, Ci/ilCode8 and its is clear that i* damages are not sought or reco/ered in the action to en*orceper*ormance the cannot be reco/ered in an independent action" As to eodorica ndencia,there*ore, it should be considered that the right o* action to reco/er damages *or the breach o* thecontract in +uestion was ehausted in the prior suit" 0owe/er, her attornes ha/e not seen *it tointerpose the de*ense o* res %udicata in her behal*8 and as the de*endant corporation was not a

part to that action, and such de*ense could not in an e/ent be o* an a/ail to it, we proceed toconsider the +uestion o* the liabilit o* eodorica ndencia *or damages without re*ernce to thispoint"he most that can be said with re*ernce to the conduct o* eodorica ndencia is that she re*usedto carr out a contract *or the sale o* certain land and resisted to the last an action *or speci*icper*ormance in court" %he result 1as that the plaintiff 1as prevented during a period of several &ears fro' e(erting that control over the propert& 1hich he 1as entitled to e(ertand 1as 'ean1hile una#le to dispose of the propert& advantageousl&.

Case: C.-. Gilchrist vs. .*. Cudd&, et al. and Jose Fernande< speo and )arianoEaldarriaga, #eb" 1


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'uret Co", praed *or allowance, as a contingent claim, o* the /alue o* the twent bonds it hadeecuted in consideration o* the counterbonds, and *urther as$ed *or %udgment *or the unpaidpremiums and documentar stamps a**ied to the bonds, with 12 per cent interest thereon" helower court dismissed the claims o* @uzon 'uret stating,-1 that the premiums due and cost o* documentar stamps were not contemplated under theindemnit agreements to be a part o* the underta$ing o* the guarantor -0emad, since the werenot liabilities incurred a*ter the eecution o* the counterbonds8 and!'# that >whatever losses may occur after ?emady2s death, are not char&eable to hisestate, because uon his death he ceased to be &uarantor.@

Issue: Whether or not 1u%on 4urety can file a&ainst the estate a contin&ent claim for

reimbursement.

Held: +-. 3ur conclusion is that the solidar guarantor.s liabilit is not etinguished b hisdeath, and that in such e/ent, the @uzon 'uret Co", had the right to *ile against the estate acontingent claim *or reimbursement" 6t becomes unnecessar now to discuss the estate.s liabilit*or premiums and stamp taes, because irrespecti/e o* the solution to this +uestion, the @uzon'uret.s claim did state a cause o* action, and its dismissal was erroneous"he *oregoing concept is con*irmed b the net Article 2(=7, that runs as *ollows:DA" 2(=7" P 6* the guarantor should be con/icted in *irst instance o* a crime in/ol/ingdishonest or should become insol/ent, the creditor ma demand another who has all the+uali*ications re+uired in the preceding article" he case is ecepted where the creditor hasre+uired and stipulated that a speci*ied person should be guarantor"#rom this article it should be immediatel apparent that the super/ening dishonest o* theguarantor -that is to sa, the disappearance o* his integrit a*ter he has become bound does notterminate the contract but merel entitles the creditor to demand a replacement o* the guarantor"

But the step remains optional in the creditor: it is his right, not his dut8 he ma wai/e it i* hechooses, and hold the guarantor to his bargain" 0ence Article 2(=7 o* the present Ci/il Code isincompatible with the trial court.s stand that the re+uirement o* integrit in the guarantor or suretma$es the latter.s underta$ing strictl personal, so lin$ed to his indi/idualit that the guarantautomaticall terminates upon his death"he contracts o* suretship entered into b U" 0" 0emad in *a/or o* @uzon 'uret Co" not beingrendered intransmissible due to the nature o* the underta$ing, nor b the stipulations o* thecontracts themsel/es, nor b pro/ision o* law, his e/entual liabilit thereunder necessaril passedupon his death to his heirs" he contracts, there*ore, gi/e rise to contingent claims pro/ableagainst his estate under section =, ule


12/33

!ri/ate respondents did not answer an o* these letters" 'till, the lease contracts were notrescinded"!etitioner re*used to /acate" 3n March , 1992, petitioner re+uested *ormal contracts o* leasewith ;CC'6 in *a/or rendsetter Mar$eting" 'o !ing Bun claimed that a*ter the death o* hisgrand*ather, 'o !e$ Gio$, he had been occuping the premises *or his tetile business andreligiousl paid rent" ;CC'6 acceded to petitionerEs re+uest" he lease contracts in *a/or o* rendsetter were eecuted" 6n the suit *or in%unction, pri/ate respondents pressed *or thenulli*ication o* the lease contracts between ;CC'6 and petitioner" he also claimed damages"rial court ruled in annulling the contract o* lease between 'o !ing Bun and ;ee" CA upheld trialcourt.s decision"

Issue: Whether or not 4o 0in& Bun is &uilty of tortuous interference of contract.

Held: +-. he elements o* tort inter*erence are:-1 eistence o* a /alid contract8-2 $nowledge on the part o* the third person o* the eistence o* contract8 and- inter*erence o* the third person is without legal %usti*ication or ecuse"

A dut which the law o* torts is concerned with is respect *or the propert o* others, and a causeo* action e) delicto ma be predicated upon an unlaw*ul inter*erence b one person o* theen%oment b the other o* his pri/atepropert" his ma pertain to a situation where a third person induces a part to renege on or /iolate his underta$ing under a contract" 6n the case be*ore us, petitionerEs rendsetter Mar$etingas$ed ;CC'6 to eecute lease contracts in its *a/or, and as a result petitioner depri/edrespondent corporation o* the latterEs propert right" Clearl, and as correctl /iewed b theappellate court, the three elements o* tort inter*erence abo/e5mentioned are present in the instantcase"

Authorities debate on whether inter*erence ma be %usti*ied where the de*endant acts *or the solepurpose o* *urthering his own *inancial or economic interest" 3ne /iew is that, as a general rule,

%usti*ication *or inter*ering with the business relations o* another eists where the actorEs moti/e isto bene*it himsel*" 'uch %usti*ication does not eist where his sole moti/e is to cause harm to theother" Added to this, some authorities belie/e that it is not necessar that the inter*ererEs interestoutweigh that o* the part whose rights are in/aded, and that an indi/idual acts under aneconomic interest that is substantial, not merel de minimis, such that wrong*ul and maliciousmoti/es are negati/ed, *or he acts in sel*5protection" Moreo/er %usti*ication *or protecting oneEs*inancial position should not be made to depend on a comparison o* his economic interest in thesub%ect matter with that o* others" 6t is su**icient i* the impetus o* his conduct lies in a proper business interest rather than in wrong*ul moti/es"

As earl as :ilchrist %s" -uddy , we held that where there was no malice in the inter*erence o* acontract, and the impulse behind oneEs conduct lies in a proper business interest rather than inwrong*ul moti/es, a part cannot be a malicious inter*erer" 4here the alleged inter*erer is*inanciall interested, and such interest moti/ates his conduct, it cannot be said that he is an

o**icious or malicious intermeddler"6n the instant case, it is clear that petitioner 'o !ing Bun pre/ailed upon ;CC'6 to lease thewarehouse to his enterprise at the epense o* respondent corporation" hough petitioner too$interest in the propert o* respondent corporation and bene*ited *rom it, nothing on record imputesdeliberate wrong*ul moti/es or malice on him"

Case: icolas -anche< vs. -everina "igos, >une 1, 1972, J. Concepcion.

Facts: 3n April , 19?1, plainti** icolas 'anchez and de*endant 'e/erina igos eecuted aninstrument entitled 3ption to !urchase, whereb Mrs" igos agreed, promised andcommitted """ to sell to 'anchez the sum o* !1,=1("((, a parcel o* land situated in the barrios o*

Abar and 'ibot, municipalit o* 'an >ose, pro/ince o* ue/a ci%a, within two -2 ears *rom saiddate with the understanding that said option shall be deemed terminated and elapsed, i* 'anchez shall *ail to eercise his right to bu the propert within the stipulated period" 6nasmuchas se/eral tenders o* pament o* the sum o* !l,=1("((, made b 'anchez within said period,

were re%ected b Mrs" igos, on March 12, 19?, the *ormer deposited said amount with theCourt o* #irst 6nstance o* ue/a ci%a and commenced against the latter the present action, *or speci*ic per*ormance and damages" igos contended that the contract between the parties is aunilateral promise to sell, and the same being unsupported b an /aluable consideration, b

*orce o* the ew Ci/il Code, is null and /oid" Accordingl, on #ebruar 2ustice, later Chie* >ustice, Cesar Bengzon, this Court said:

#urthermore, an option is unilateral : a promise to sell at the price *ied whene/er theo**eree should decide to eercise his option within the speci*ied time" A*ter acceptingthe promise and 'efore he e)ercises his option, the holder o* the option is not bound tobu" 0e is *ree either to bu or not to bu later" 6n this case, howe/er, upon acceptingherein petitionerEs o**er a bilateral promise to sell and to bu ensued, and therespondent ipso facto assumed the obligation o* a purchaser" 0e did not %ust get theright subse+uentl to bu or not to bu" 6t was not a mere option then8 it was a bilateralcontract o* sale"@astl, e/en supposing that h" A granted an option which is not binding *or lac$ o* consideration, the authorities hold that:

6* the option is gi/en without a consideration, it is a mere o**er o* a contracto* sale, which i s not binding until accepted" 6*, howe/er, acceptance is madebe*ore a withdrawal, it constitutes a binding contract o* sale, e/en though the

option was not supported b a su**icient consideration" """ " -77 Corpus >uris'ecundum, p" ?=2" 'ee also 27 uling Case @aw 9 and cases cited"6t can be ta$en *or granted, as contended b the de*endant, that the optioncontract was not /alid *or lac$ o* consideration" But it was, at least, an o**er tosell, which was accepted b letter, and o* the acceptance the o**erer had$nowledge be*ore said o**er was withdrawn" he concurrence o* both acts Pthe o**er and the acceptance P could at all e/ents ha/e generated acontract, i* none there was be*ore -arts" 12= and 12?2 o* the Ci/il Code"-Xaco /s" 'erra, !hil" 1"

6n other words, since there 'a& #e no valid contract 1ithout a cause or consideration, thepro'isor is not #ound #& his pro'ise and 'a&, accordingl&, 1ithdra1 it. Pending notice of its 1ithdra1al, his accepted pro'ise partakes, ho1ever, of the nature of an offer to sell1hich, if accepted, results in a perfected contract of sale "

Case: %ong Brothers Co vs. I*C and Juliano and Co'pan&, ;ec" 21, 19"'ometime in ;ecember, 197, the pri/ate respondent allegedl contracted with the petitioner theannual drdoc$ing and repair o* the Xamboanga5>" 3n the ground that the petitioner did notcomplete and eecute all the wor$ necessar, essential and indispensable to rendering the /esselseaworth resulting in its deterioration and total loss, the pri/ate respondent *iled a complaintagainst the petitioner *or speci*ic per*ormance and damages with the Court o* #irst 6nstance o* Cotabato"

he petitioner denied that there was a per*ected contract to repair Xamboanga5> between the twoparties"

Issue: Whether or not there was a erfected contract between the etitioner and the rivate resondents to reair the vessel Aamboan&a-.


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Held: !. here was not et a meeting o* the minds as to the cause o* the contract" he cause o* a contract has been de*ined as the essential reason which mo/es the contracting parties to enter into it -< Manresa, =th dition, p" =(" 6n other words, the cause is the immediate, direct andproimate reason which %usti*ies the creation o* an obligation thru the will o* the contractingparties - Castan, th dition, p" 7" -General nterprises, 6nc" /" @ianga Ba @ogging Co",6nc", 11 'CA 7, 79" #or the pri/ate respondent, the cause o* the contract was the repair o* its /essel Xamboanga5> while *or the petitioner the cause would be its commitment to repair the/essel and ma$e it seaworth" %he telegra's dated Januar& 6;, Januar& 9, and Januar& 9,6;4 sent #& the petitioner to the private respondent, ho1ever, indicate that the for'er hadnot accepted the repair of Ea'#oanga/J, the reason #eing that the e(tent of the repair to#e 'ade necessitated a 'aor e(pense so that the petitioner insisted on the presence of

the private respondent for evaluation #efore it accepted the repair of the 1ooden vessel.hat the petitioner had not et consented to the contract is e/ident when on >anuar 2 4:R??M?N3 4/ 3> 3


14/33

scheduled to attend the trial o* Ci/il Case o" 1((= and 'pec" !rocs" o" 112= in the Court o* #irst 6nstance, Branch 66, thereat, set *or hearing on August 2udge Cloribel o* the Court o* #irst 6nstance o* Manila in his decision dated March 1, 19?7in Ci/il Case o" ??7=(, a mandamus case, ordered the Acting General Manager o* the ational4aterwor$s and 'ewerage Authorit and the members o* the Committee on !re5Ruali*ication toallow C S C Commercial Corporation to participate as a +uali*ied bidder in the public bidding *or

the suppl o* asbestos cement pressure pipes to the awasa in spite o* the *act that it had apending ta case and had no ta clearance certi*icate" B /irtue o* that %udgment, which became*inal because the awasa did not appeal, C S C Commercial Corporation too$ part in the bidding"4hen the bids were opened on Ma 1


15/33

the in/itation to bid dated >ul ?, 19?? reser/ed the right to re%ect the bid o* an bidder -p" =,ecord on Appeal"here*ore, a bidder whose bid is re%ected has no cause *or complaint nor a right to dispute theaward to another bidder -sguerra S 'ons /s" Atona, 11 !hil" 11ul 1, 19anuar 19=, !ablo ncabo *ormall applied with the @and states ;i/ision,Bureau o* @ands, to purchase a parcel o* land designated as @ot 1, Bloc$ , !lan !sd52osue Ruesada trans*erring rights o/er thelot to the latter, conditioned on appro/al b the @and enure Administration -@A, *or short" hetrans*er o* rights b ncabo to Ruesada was not put in writing but pament o* the price *or therights trans*erred was e/idenced b receipts" 6n o/ember -undated 19=uanito

CariWo was doc$eted as @A Case o" 9(, to which respondent !ablo ncabo ob%ected and *iledan Answer in opposition thereto" @A ruled in maintaining the status +uo" CariWo appealed to3**ice o* the !resident and re*used to gi/e up possession o* the land" 0ence, ncobo *iled anaction in C#6 o* Manila declaring them as owners" @ower court *a/ored ncobo" CA a**irmed"

Issue: Whether or not "eed of 4ale of ?ouse and /ransfer of Ri&hts on which the etitioners have based their alication over the questioned lot is s imulated and thereforean inexistent deed of sale.

Held: +-. his Court *inds that there is substantial and con/incing e/idence that hibit ;51was a simulated deed o* sale and trans*er o* rights, to warrant the a**irmance o* the decision o* the respondent Court o* Appeals" he characteristic o* simulation is the *act that the apparentcontract is not reall desired or intended to produce legal e**ects nor in an wa alter the %udicialsituation o* the parties"1 &nder the circumstances surrounding their transaction, the parties $newthat the document hibit ;51 was at once *ictitious and simulated where none o* the parties

intended to be bound thereb" 'trongl indicati/e o* the simulated character o* hibit ,;51 isthe *act that the CariWos could not produce the receipts e/idencing their alleged paments to the@and Authorit *or the disputed lot, nor were the able to produce the Agreement to 'ell"Contracts o* sale are /oid and produce no e**ect whatsoe/er where the price, which appearstherein as paid, has in *act ne/er been paid b the /endee to the /endor" A sale o* land withoutconsideration, but intended merel to protect a part to a %oint /enture *or the cash ad/ances hewas to ma$e *or the realt subdi/ision that the parties wanted to put up, is null and /oid" he lawis clear on this matter" he Ci/il Code pro/ides:

Art" 1(9" he *ollowing contracts are ineistent and /oid *rom the beginning: -2 hose which are absolutel simulated or *ictitious8 hese contracts cannot be rati*ied" either can the right to set up the de*ense o* illegalit be wai/ed"

#urthermore, e/en without going into the merits andLor /alidit o* hibit ;51, it is clear that

there has been no legal trans*er o* r ights in *a/or o* the CariWos because neither the @A nor the@and Authorit has appro/ed or gi/en due course to such trans*er o* rights" 2= he @A ne/er wai/ed its right to appro/e the trans*er o* rights" 6t onl ruled that the status +uo will bemaintained so long as the Court has not et ruled on the authenticit o* document hibit ;51"he ownership o* the lot b the CariWos is still contingent on the appro/al o* the @A upon their compliance with all the re+uirements o* the latter" 'ince no appro/al or due course has et beengi/en b the @A or @A to such trans*er o* rights, the document hibit ;51 is not en*orceableagainst the latter"

Case: )anuel $agun


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but unpublished boo$ o* Att" rnesto odriguez, >r", entitled he @ong ;ar$ ight in egrossubtitled he Moises !adilla 'tor, the rights to which petitioner had purchased *rom Att"odriguez in the amount o* !2,((("(("he boo$ narrates the e/ents which culminated in the murder o* Moises !adilla sometimebetween o/ember 11 and o/ember 17, 19=1" !adilla was then a maoralt candidate o* theacionalista !art -then the minorit part *or the Municipalit o* Magallon, egros 3ccidental,during the o/ember, 19=1 elections" Go/ernor a*ael @acson, a member o* the @iberal !artthen in power and his men were tried and con/icted *or that murder in ,eople %s. acson& et al " 6nthe boo$, Moises !adilla is portraed as a martr in contemporar political histor"

Although the emphasis o* the mo/ie was on the public li*e o* Moises !adilla, there were portionswhich dealt with his pri/ate and *amil li*e including the portraal in some scenes, o* his mother,

Maria 'oto Fda" de Gonzales, pri/ate respondent herein, and o* one Auring as his girl *riend"3n 3ctober , 19?1, petitioner recei/ed a telephone call *rom one Mrs" ell Amante, hal*5sister o* Moises !adilla, ob%ecting to the *ilming o* the mo/ie and the eploitation o* his li*e"3n 3ctober =, 19?1, Mrs" Amante, *or and in behal* o* her mother, pri/ate respondent, demandedin writing *or certain changes, corrections and deletions in the mo/ie" 4 !etitioner contends that heacceded to the demands because he had alread in/ested hea/il in the picture to the etent o* mortgaging his properties, 5 in addition to the *act that he had to meet the scheduled target dateo* the premiere showing"3n the same date, 3ctober =, 19?1, a*ter some bargaining as to the amount to be paid, whichwas !=(,((("(( at *irst, then reduced to !2(,((("((, ; petitioner and pri/ate respondent,represented b her daughters and Att" rnesto odriguez, at the law o**ice o* >alandoni and>amir, eecuted a @icensing Agreement" !etitioner ta$es the position that he was pressured intosigning the Agreement because o* pri/ate respondentEs demand, through Mrs" Amante, *or pament *or the eploitation o* the li*e stor o* Moises !adilla, otherwise, she would call apress con*erence declaring the whole picture as a *a$e, *raud and a hoa and would denounce

the whole thing in the press, radio, tele/ision and that the were going to Court to stop thepicture" Because petitioner re*used to pa an additional amounts pursuant to the Agreement, on;ecember 22, 19?1, pri/ate respondent instituted the present suit against him" he trial court*a/ored respondent" CA a**irmed"

Issues:367 Whether or not the 1icensin& $&reement was null and void.397 Whether or not the consent of 0etitioner in enterin& into such 1icensin&

$&reement was rocured with duress, intimidation and undue influence.Held:367 !. either do we agree with petitionerEs submission that the @icensing Agreement is null and/oid *or lac$ o*, or *or ha/ing an illegal cause or consideration" 4hile it is true that petitioner hadpurchased the rights to the boo$ entitled he Moises !adilla 'tor, that did not dispense withthe need *or prior consent and authorit *rom the deceased heirs to portra publicl episodes insaid deceasedEs li*e and in that o* his mother and the members o* his *amil" As held in /chuyler

%. -urtis, 6

a pri/ilege ma be gi/en the sur/i/ing relati/es o* a deceased person to protect hismemor, but the pri/ilege eists *or the bene*it o* the li/ing, to protect their *eelings and to pre/enta /iolation o* their own rights in the character and memor o* the deceased"!etitionerEs a/erment that pri/ate respondent did not ha/e an propert right o/er the li*e o* Moises !adilla since the latter was a public *igure, is neither well ta$en" Being a public *igure ipsofacto does not automaticall destro in toto a personEs right to pri/ac" he right to in/ade apersonEs pri/ac to disseminate public in*ormation does not etend to a *ictional or no/elizedrepresentation o* a person, no matter how public a *igure he or she ma be" 64 6n the case at bar,while it is true that petitioner eerted e**orts to present a true5to5li*e stor o* Moises !adilla,petitioner admits that he included a little romance in the *ilm because without it, it would be a drabstor o* torture and brutalit"

-2 !. 4e also *ind it di**icult to sustain petitionerEs posture that his consent to the @icensing Agreement was procured thru duress, intimidation and undue in*luence eerted on him b pri/aterespondent and her daughters at a time when he had ehausted his *inancial resources, the

premiere showing o* the picture was imminent, and time was o* the essence" As held inMartine0 %s. anuar 1, 19?(, but was not paid on that date, with the debtors as$ing *or an etensiono* three months, or up to April (, 19?("3n March 17, 19?(, the parties eecuted another loan document" !ament o* the !1(,((("((was etended to April (, 19?(, but the obligation was increased b !?,((("((" ;e*endants again*ailed to pa their obligation b April (, 19?( and, on 'eptember 2, 19?(, plainti** instituted thiscollection case" ;e*endants admitted the !1(,((("(( principal obligation, but claimed that theadditional !?,((("(( constituted usurious interest" rial court *a/ored @aw and ordered hereinrespondents to pa the *ormer, the principal amount o* 1(,((( plus ?,((( b wa o* li+uidateddamages"

Issue: Whether or not the additional 0+, is recoverable.

Held: +-. &nder Article 1= o* the Ci/il Code, in regards to the agreement o* the partiesrelati/e to the !?,((("(( obligation, it is presumed that it eists and is law*ul, unless the debtor pro/es the contrar" o e/identiar hearing ha/ing been held, it has to be concluded thatde*endants had not pro/en that the !?,((("(( obligation was illegal" Con*irming the rial CourtEs*inding, we /iew the !?,((("(( obligation as li+uidated damages su**ered b plainti**, as o* March17, 19?(, representing loss o* interest income, attorneEs *ees and incidentals"

Case: $ao -ok vs. $&dia -a#a&sa#a&, et al., Aug" 9, 19


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since it does not compl with the 'tatute o* #rauds"his contention has no merit"Contracts in whate/er *orm the ma ha/e been entered into are binding on the parties unless*orm is essential *or the /alidit and en*orceabilit o* that particular contract" -'ee @opez /" Auditor General, 2( 'CA ?==" 4e held in /haffer %. ,alma -22 'CA 9:

""" 4hether the agreement is in writing or not is a +uestion o* e/idence" e/ertheless,e/en granting that the agreement is not in writing, this circumstance does not militateagainst the /alidit or en*orceabilit o* said agreement, because contracts are bindingupon the parties in whate/er *orm the ma ha/e been entered into unless the lawre+uires otherwise" -Article 1=?, Ci/il Code8 @opez /" he Auditor General, et al", @5

2=ul 1, 19?78 !ilar Gil Fdan de Murciano /" he Auditor General, et al", 1(!hil" 9(7" 6t is true that Article 1=< o* the Ci/il Code pro/ides that contracts in/ol/ingmore than !=(("(( must appear in writing, but nothing is said therein that suchre+uirement is necessar *or their /alidit or en*orceabilit" 6t has been held that thewriting re+uired under Article 1=< is merel *or con/enience, -hunga Chui /" RueBentac, 2 !hil" =?18 g 0oc /" ong 0o, =2 (,G", 9? and so the agreement allegedin the amended complaint in the present case can be en*orced e/en i* it ma not be inwriting"

he re+uirement o* writing *or the o**er made b @ao 'o$ is onl *or con/enience and noten*orceabilit" 6n *act, the petitioner could be compelled to put the o**er in writing, a step no longer necessar now because o* this petition"

Case: )eliton Gallardo and %eresa 2illanueva vs. I*C and )arta 2illanueva, et al., 3ct" 29,19r", and estituto " Fillanue/a eecuted and *iled an

A**ida/it o* Ad/erse Claim with the 3**ice o* the egister o* ;eeds o* @aguna" petitionersinstituted court suit against the pri/ate respondent and her husband, ;r" Marcelo '" Agana, 'r" b

*iling a complaint *or Ruieting o* itle and ;amages with the Court o* #irst 6nstance o* @aguna"C#6 o* @aguna declared the deed o* sale /oid ab initio" 6AC a**irmed" !etitioners claim that thesale although not in a public document, is ne/ertheless /alid and binding citing this CourtEs rulingsin the cases o* -auto %. -ortes& < !hil" =9, ?(8 :uerrero %. Miguel& 1( !hil" =2, =8 Bucton /"Gabar == 'CA 99 wherein this Court ruled that e/en a /erbal contract o* sale o* real estateproduces legal e**ects between the parties"

Issue: Whether or not the unnotari%ed deed of sale urortedly executed on $u&ust ),)*DE by the rimitive owner 0edro ;illanueva, in favor of etitioners, can be considered asa valid instrument for effectin& the alienation by way of sale of a arcel of land re&isterd under the /orrens 4ystem.

Held: !. rue, as argued b appellants, a pri/ate con/eance o* registered propert is /alid asbetween the parties" 0owe/er, the onl right the /endee o* registered propert in a pri/atedocument is to compel through court processes the /endor to eecute a deed o* con/eance

su**icient in law *or purposes o* registration" !lainti**s5appellantsE reliance on Article 1=? o* theCi/il Code is un*ortunate" he general rule enunciated in said Art" 1=? is that contracts areobligator, in whate/er *orm the ma ha/e been entered, pro/ided all the essential re+uisites *or their /alidit are present" he net sentence pro/ides the eception, re+uiring a contract to be in

some *orm when the law so re+uires *or /alidit or en*orceabilit" 'aid law is 'ection 127 o* Act9? which re+uires, among other things, that the con/eance be eecuted be*ore the %udge o* acourt o* record or cler$ o* a court o* record or a notar public or a %ustice o* the peace, who shallcerti* such ac$nowledgment substantiall in *orm net hereina*ter stated"'uch law was /iolated in this case" he action o* the egister o* ;eeds o* @aguna in allowing theregistration o* the pri/ate deed o* sale was unauthorized and did not lend a bit o* /alidit to thede*ecti/e pri/ate document o* sale"&pon consideration o* the *acts and circumstances surrounding the eecution o* the assaileddocument, the trial court *ound that said pri/ate document -hibit B was null and /oid and thatit was signed b somebod else not !edro Fillanue/a" 'uch *indings o* *act besides being basedon the records, were sustained b the Court o* Appeals"

Case: $i' +hi $u&a vs. C* and Hind -ugar Co'pan&, 'ept"11, 19anuar 27, 1971, petitioner withdrew *rom the companwarehouse in /aring +uantities a total amount o* ,7= piculs under substitute deli/er orders,lea/ing a balance o* =( piculs undeli/ered"3n >anuar 22, 1971, the +uestion o* pament cropped out between the parties" !etitioner claimed that he had paid !12,97="(( to the compan o**icials, Cashier Garcia and Manager

Abalos on o/ember 1" 197( and as proo* o* his pament, he re*erred to the contract,particularl to the stipulation stating erms: Cash upon sing o* this contract" espondentcompan o**icials denied the claim o* the petitioner, alleging that petitioner ne/er paid *or thesugar on o/ember 1, 197( or at an time therea*ter" An audit report or eamination o* theboo$s o* the compan made b ternal Auditor Fictorino ;aroa showed no pament bpetitioner"3n Ma 17, 1971, petitioner, as plainti** below, *iled the complaint against the de*endant 0ind'ugar Compan stating ? causes o* actions" he trial court *a/ored @im" But CA re/ersed"

Issue: Whether or not ayment has already been made.

Held: +-. Considering the admitted *act that the contract o* sale -hibit A was prepared inthe o**ice o* respondent compan b Generoso Bongato, Assistant to the Manager o* thecompan, upon instruction o* General Manager miliano @" Abalos who is a lawer, and 4e arenow con*ronted with the /aring or con*licting interpretations o* the parties thereto, therespondent compan contending that the stipulation erms: Cash upon signing o* this contractdoes not mean that the agreement was a cash transaction because no mone was paid b thepetitioner at the time o* the signing thereo*, whereas the petitioner insists that it was a cashtransaction inasmuch as he paid cash amounting to !12,97="(( upon the signing o* thecontract, the pament ha/ing been made at around 1:( in the a*ternoon o* o/ember 1, 197(to the cashier, eodoro Garcia, and Manager Abalos although the sale was agreed to in themorning o* the same da, o/ember 1, 197(, the con*licting interpretations ha/e shrouded thestipulation with ambiguit or /agueness" hen, the cardinal rule should and must appl, which is

that the interpretation shall not *a/or the part who caused the ambiguit -Art" 177, ew Ci/ilCode" @e rule that in the instant case, the interpretation to #e taken shall not favor therespondent co'pan& since it is the part& 1ho caused the a'#iguit& in its preparation.


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4e do not agree with the meaning o* the pro/ision in the contract ascribed b the respondentcourt in its decision that: 'tated in another wa, the pro/ision o* the Contract in +uestion meansthat the pament o* the !12,97="(( 6' 3 #3@@34 or 6' 3 B MA; -and 3 4A' MA;upon the signing o* said contract" As alread dra*ted or drawn up, complete and *inalized with allthe signatures thereon o* the contracting parties and presented in court as hibit A without anchange whatsoe/er in the mode o* pament, such pro/ision plainl and simpl means that thepament was in CA'0, and not on C;6" he ambiguit raised b the use o* the words or phrases in the +uestioned pro/ision must be resol/ed and interpreted against the respondentcompan"6n truth the stipulation in the contract which reads: erms: Cash upon signing o* this contract is/er clear and simple in its meaning, lea/ing no doubt in 3ur minds upon the intention o* the

contracting parties, hence, the *irst rule o* contract interpretation that the literal meaning o* itsstipulation shall control, is the go/erning rule at hand" esorting to 4ebsterEs hird ew6nternational ;ictionar, p" 2=1=, *or the de*inition o* the word upon which literall means,among others, 1(a -1: immediatel *ollowing on8 /er soon a*ter8 """ b: on the occasion o* at thetime o*8 """ the clear import o* the stipulation is that pament was made on the occasion o* or atthe time o* the signing o* the contract and not that pament will *ollow the signing" 4e must adoptthe *ormer meaning because it is such an interpretation that would most ade+uatel render thecontract e**ectual, *ollowing Article 17 o* the ew Ci/il Code which pro/ides:

4rt. DG7G. $f some stipula tion of any contract should admit of se%era l meanings& it shall 'e understood as 'earing that import which is most ade!uate to render it effectua.

he e/idence *or the petitioner establishes that a*ter paing the cash consideration to Cashier Garcia and Manager Abalos, the parties signed the contract and therea*ter a signed cop o* saidcontract was gi/en to petitioner and also the *our - deli/er orders co/ering the ,(une 2?, 19=9, a complaint *or eminent domain against de*endant5appellee,Carmen M" Fda" de Castell/i, %udicial administratri o* the estate o* the late Al*onso de Castell/i-hereina*ter re*erred to as Castell/i, o/er a parcel o* land situated in the barrio o* 'an >ose,#loridablanca, !ampanga" 6n its complaint, the epublic alleged, among other things, that the *air

mar$et /alue o* the abo/e5mentioned lands, according to the Committee on Appraisal *or the!ro/ince o* !ampanga, was not more than !2,((( per hectare, or a total mar$et /alue o* !2=9,??9"1(8 and praed, that the pro/isional /alue o* the lands be *ied at !2=9"??9"1(, that thecourt authorizes plainti** to ta$e immediate possession o* the lands upon deposit o* that amountwith the !ro/incial reasurer o* !ampanga8 that the court appoints three commissioners toascertain and report to the court the %ust compensation *or the propert sought to be epropriated,and that the court issues therea*ter a *inal order o* condemnation"3n >une 29, 19=9 the trial court issued an order *iing the pro/isional /alue o* the lands at!2=9,??9"1("6n her motion to dismiss *iled on >ul 1, 19=9, Castell/i alleged, among other things, that theland under her administration, being a residential land, had a *air mar$et /alue o* !1="(( per s+uare meter, so it had a total mar$et /alue o* !11,ul 1,19=?8 that the epublic be ordered to pa her !=,(((,((("(( as unrealized pro*its, and the costso* the suit" he epublic argues that the takin& should be reckoned from the year )*GE

when by virtue of a secial lease a&reement between the Reublic and aellee Castellvi,the former was &ranted the ri&ht and rivile&e to buy the roerty should the lessor wish to terminate the lease, and that in the e/ent o* such sale, it was stipulated that the *air mar$et /alue should be as o* the time o* occupanc8 and that the permanent impro/ementsamounting to more that hal* a million pesos constructed during a period o* twel/e ears on theland, sub%ect o* epropriation, were indicati/e o* an agreed pattern o* permanenc and stabilit o* occupanc b the !hilippine Air #orce in the interest o* national 'ecurit"

Issue : Whether or not the value of the land should be comuted at the time when theReublic occuied the land as lessee.

Held : !. 3he Repu'licFs claim that it had the =right and pri%ilege= to 'uy the property at the%alue that it had at the time when it first occupied the property as lessee nowhere appears in thelease contract " 4hat was agreed epressl in paragraph o" = o* the lease agreement was that,should the lessor re+uire the lessee to return the premises in the same condition as at the timethe same was *irst occupied b the A#!, the lessee would ha/e the right and pri/ilege -or option o* paing the lessor what it would *airl cost to put the premises in the same condition asit was at the commencement o* the lease, in lieu o* the lesseeEs per*ormance o* the underta$ingto put the land in said condition" he *air /alue at the time o* occupanc, mentioned in the leaseagreement, does not re*er to the /alue o* the propert i* bought b the lessee, but re*ers to thecost o* restoring the propert in the same condition as o* the time when the lessee too$possession o* the propert" 'uch *air /alue cannot re*er to the purchase price, *or purchase wasne/er intended b the parties to the lease contract" 6t is a rule in the interpretation o* contractsthat 0owe/er general the terms o* a contract ma be, the shall not be understood tocomprehend things that are distinct and cases that are di**erent *rom those upon which theparties intended to agree -Art" 172, Ci/il Code"

Case : astern -hipping $ines, Inc. 2s. )argarine/2erkaufs/0nion G'#H, 'ept" 27, 1979, J.%eehankee. 3*cting7

Facts: espondent corporation, a 4est German corporation not engaged in business in the!hilippines, was the consignee o* =(( long tons o* !hilippine copra in bul$ with a total /alue o* &'V 1(une 1


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Held: !. 4e hold that the lower court correctl ruled the cited codal article to be notapplica#le in this particular case for the reason that the #ill of lading 3(hi#it F7 containsan agree'ent to the contrar& for it is e(pressl& provided in the last sentence of the firstparagraph 3(hi#it 6/*7 that In case of average, sa'e shall #e adusted according to

+ork/*nt1erp "ules of 64. he insertion o* said condition is epressl authorized bCommonwealth Act o" ?= which has adopted in toto the &"'" Carriage o* Goods b 'ea Act"ow, it has not been shown that said rules limit the reco/er o* damage to cases within a certainpercentage or proportion that said damage ma bear to claimantEs interest either in the /essel or cargo as pro/ided in Article une 11, 197=, J.)uno< Pal'a.Facts: 6sidora Cabaliw was the wi*e o* Benigno 'adorra b his second marriage solemnized onMa =, 191=, be*ore the >ustice o* the !eace o* Baambang, !angasinan" his couple had adaughter named 'oledad 'adorra" ;uring their marriage, the spouses ac+uired two -2 parcels o* land situated in 6niangan, ;upa, ue/a Fizcaa" 0a/ing been abandoned b her husband,

6sidora Cabaliw instituted an action *or support with the Court o* #irst 6nstance o* Manila, entitled6sidora Cabaliw de 3rden /ersus Benigno 'adorra doc$eted therein as Ci/il Case o" 19"3n >anuar (, 19, %udgment was rendered re+uiring Benigno 'adorra to pa his wi*e, 6sidoraCabaliw, the amount o* !7="(( a month in terms o* support as o* >anuar 1, 19, and !1=("((in concept o* attorneEs *ees and the costs"&n$nown to 6sidora Cabaliw, on August 19, 19, Benigno 'adorra eecuted two -2 deeds o* sale o/er the two parcels o* land abo/e described in *a/or o* his son5in5law, 'otero 'adorra, thelatter being married to ncarnacion 'adorra, a daughter o* Benigno 'adorra b his *irst marriage"Because o* the *ailure o* her husband to compl with the %udgment o* support, 6sidora Cabaliw*iled in Ci/il Case 192 a motion to cite Benigno 'adorra *or contempt and the Court o* #irst6nstance o* Manila in its 3rder o* Ma 12, 197, authorized 6sidora to ta$e possession o* thecon%ugal propert, to administer the same, and to a/ail hersel* o* the *ruits thereo* in pament o* the monthl support in arrears" 4ith this order o* the Court, 6sidora proceeded to ue/a Fizcaato ta$e possession o* the a*orementioned parcels o* land, and it was then that she disco/eredthat her husband had sold them to his son5in5law 'otero" 3n #ebruar 1, 19(, 6sidora *iled with

the Court o* #irst 6nstance o* ue/a Fizcaa Ci/il Case o" 9 against her husband and 'otero'adorra *or the reco/er o* the lands in +uestion on the ground that the sale was *ictitious8 at thesame time a notice o* lis pendens was *iled with the egister o* ;eeds o* ue/a Fizcaa"6n Ma o* 19(, Benigno 'adorra died"

Issue: Whether or not the sale by Beni&no to 4otero 4adorra was valid.

Held: !. he *acts narrated in the *irst portion o* this ;ecision which are not disputed,con/incingl show or pro/e that the con/eances made b Benigno 'adorra in *a/or o* his son5in5law were *raudulent" #or the heart o* the matter is that about se/en months a*ter a %udgment wasrendered against him in Ci/il Case o" 192 o* the Court o* #irst 6nstance o* Manila and withoutpaing an part o* that %udgment, Benigno 'adorra sold the onl two parcels o* land belonging tothe con%ugal partnership to his son5in5law" 'uch a sale e/en i* made *or a /aluable considerationis presumed to be in *raud o* the %udgment creditor who in this case happens to be the o**endedwi*e"

Article 1297 o* the old Ci/il Code which was the law in *orce at the time o* the transactionpro/ides:

Contracts b /irtue o* which the debtor alienates propert b gratuitous title arepresumed to be made in *raud o* creditors"

4lienations 'y onerous title are also presumed fraudulent when made b personsagainst whom some %udgment has been rendered in an instance or some writ o* attachment has been issued" he decision or attachment need not re*er to the propertalienated and need not ha/e been obtained b the part see$ing rescission" -emphasissupplied

he abo/e5+uoted legal pro/ision was totall disregarded b the appellate court, and there lies itsbasic error"#urthermore, the presumption o* *raud established b the law in *a/or o* petitioners is bolsteredb other indicia o* bad *aith on the part o* the /endor and /endee" /hus !)# the vendee is theson-in-law of the vendor. In the early case ofRe&alado vs. 1uchsin&er F Co., ( 0hil. +'(,this Court held that the close relationshi between the vendor and the vendee is one of

the known bad&es of fraud. !'# $t the time of the conveyance, the vendee, 4otero, waslivin& with his father-in-law, the vendor, and he knew that there was a 9ud&ment directin& the latter to &ive a monthly suort to his wife Isidora and that his father-in-law wasavoidin& ayment and execution of the 9ud&ment. + !D# It was known to the vendee that hisfather-in-law had no roerties other than those two arcels of land which were bein& sold to him. ; he *act that a /endor trans*ers all o* his propert to a third person when there is a

%udgment against him is a strong indication o* a scheme to de*raud one who ma ha/e a /alidinterest o/er his properties"

Case: Hongkong and -hanghai Banking Corporation vs. "alph Pauli and -pouses -all&Garganera and )ateo Garganera, Ma (, 19une 1, 19=7, the 0ong$ong S 'hanghai Ban$ing Corporation *iled a complaintagainst the de*endant alph !auli, to collect the sum o* !2=


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are di**erent" he three - 6dentities re+uired *or the application o* the bar b prior %udgment:6dentit o* parties, o* sub%ect matter and causes o* action, are lac$ing"

Case: duardo Felipe, et al. vs. Heirs of )a(i'o *ldon, #eb" 1?, 19


21/33

Issue: Whether or not the oral contract of sale is unenforceable.

Held: !. 6t is admitted b both parties that an oral agreement to sell a piece o* land is noten*orceable" -Art" 1(, Ci/il Code, 'ection 21, ule 12, ules o* Court" !lainti**, howe/er,argues that the contract in +uestion, although /erbal, was partiall per*ormed because plainti** desisted *rom claiming the portion o* lot 6 in +uestion due to the promise o* de*endant to trans*er said portion to her a*ter the issuance o* title to de*endant" he court thin$s that e/en granting thatplainti** reall desisted to claim not on oral promise to sell made b de*endant, the oral promise tosell cannot be en*orced" he desistance to claim is not a part o* the contract o* sale o* the land"3nl in essential part o* the eecutor contract will, i* it has alread been per*ormed, ma$e the

/erbal contract en*orceable, pament o* price being an essential part o* the contract o* sale" theabo/e means that partial per*ormance o* a sale contract occurs only when part o* the purchaseprice is paid, it surel constitutes a de*ecti/e statement o* the law" American >urisprudence in itstitle 'tatute o* #rauds lists other acts o* partial per*ormance, such as possession, the ma$ing o* impro/ements, rendition o* ser/ices, pament o* taes, relin+uishment o* rights, etc"hus, it is stated that he continuance in possession ma, in a proper case, be su**icientlre*erable to the parol contract o* sale to constitute a part per*ormance thereo*" here ma beadditional acts or peculiar circumstances which su**icientl re*er the possession to the contract" " "" Continued possession under an oral contract o* sale, b one alread in possession as a tenant,has been held a su**icient part per*ormance, where accompanied b other acts whichcharacterize the continued possession and re*er it to the contract o* purchase" Hence, as there1as partial perfor'ance, the principle e(cluding parol contracts for the sale of realt&, doesnot appl&.

Case: "osario Car#onnel vs. Jose Poncio, "a'on Infante and ''a Infante, Ma 12, 19=ose !oncio is the owner o* a parcel o* land which both osario Carbonell and mma6n*ante o**ered to bu" 4hen !oncio was unable to $eep up with the installments due on hismortgage, he approached Carbonell and o**ered to sell the lot to the latter which the latter accepted with the proposed price o* 9"=( per s+uare meter which !oncio accepted" Carbonelland !oncio eecuted a document" And Carbonell paid !oncio 2(( -out o* !?7" 0owe/er, whenCarbonell was about to pa the balance, !oncio told Carbonell that he could not proceed with thesale because he sold it alread to 6n*ante *or !,== -*or the assumption o* his mortgage withepublic 'a/ings Ban$" Carbonell sued !oncio and 6n*ante to reco/er the land" rial courtdismissed the complaint upon the ground that Carbonell.s cause o* action is unen*orceable"

Issue: Whether or not the sale of house and lot to Infante by 0oncio was valid.

Held: 4e are o* the opinion and so hold that the appeal is well ta$en" It is 1ell settled in this urisdiction that the -tatute of Frauds is applica#le onl& to e(ecutor& contracts 3Facturan

vs. -a#anal, 6 Phil., 4697, not to contracts that are totall& or artially perfor'ed -Almirol, etal", %s" Monserrat, < !hil", ?7, 7(8 obles %s" @izarraga 0ermanos, =( !hil", ur" 722572"

6n the words o* *ormer Chie* >ustice Moran: he reason is simple" 6n eecutor contracts there isa wide *ield *or *raud because unless the be in writing there is no palpable e/idence o* theintention o* the contracting parties" he statute has precisel been enacted to pre/ent *raud"

-Comments on the ules o* Court, b Moran, Fol" 666 H19=7 ed"I, p" 17uan, Batangas *or which he was recei/ing a salar o* !1=( a month,and started le/eling and clearing the land ha/ing planted in an area o* =( hectares =(,(((coconuts trees, and rice and corn in another area o* 7( hectares, lea/ing out onl =( hectaresunimpro/ed, all o* which ha/ing been administered b him *rom 192 to 19?" ?owever, in theviolation of the aforesaid verbal a&reement, Celestina 0ere%, actin& throu&h 1eovi&ildo0ere%, to whom she extended a ower of $ttorney to sell, sold few days before she died about )'E hectares of the land in question in consequence of which 4antia&o Babao wasderived of the ossession and administration thereof from )*G( " 'aid sales are *ictitiousand were made clear /iolation o* the oral agreement made between Celestina !erez and'antiago Babao and as such the same are null and /oid" 0ence, Babao sued the estate o* Celestina *or the reco/er o* his share on the land"

Issue: Whether or not the verbal a&reement between 4antia&o Babao and Celestina 0ere% is enforceable.

Held: !. his statute, *ormerl incorporated as 'ection 21 o* ule 12 o* our ules o* Court, isnow *ound in Article 1( o* the new Ci/il Code, which pro/ides, in so *ar as pertinent to thiscase, as *ollows:

6n the *ollowing cases an agreement herea*ter made shall be en*orceable b actionunless the same, or some note or memorandum thereo*, be in writing, and subscribedb the part charged or b his agent, e/idence there*ore, o* the agreement cannot berecei/ed without the writing, or secondar e/idence o* its contents8-a An agreement that b its terms is not to be per*ormed within a ear *rom the ma$ingthereo*"-e An agreement " " " *or the sale o* real propert or o* an interest therein"

Appellants contends that the alleged /erbal agreement *alls under the paragraphs -a and -c

abo/e5+uoted because the same ma be considered as an agreement which b its terms is not tobe per*ormed within one ear *rom the ma$ing thereo*, or one which in/ol/es a sale o* realpropert or o* an interest therein" 6* this premise is correct, appellants contend, then the trial court


22/33

erred in allowing the introduction o* parole e/idence to pro/e the alleged agreement o/er the/igorous ob%ection o* counsel *or appellants"hat the alleged /erbal agreement is one which b its terms is not to be per*ormed within oneear is /er apparent *rom the allegations o* the complaint" hus, it is therein alleged that theagreement was allegedl made in 192 and b its terms 'antiago Babao bound himsel* -1 toimpro/e all the *orest trees and planting thereon coconuts, rice, corn and other crops such asbananas and bamboo trees, and -2 to act at the same time as administrator o* said land andimpro/ements during the li*etime to Celestina !erez" And in consideration o* such underta$ing,Celestina !erez bound hersel* to gi/e and deli/er, either to 'antiago Babao or his wi*e Cleo*e!erez, one5hal* - o* the whole area o* said land as impro/ed with all the impro/ements thereonupon her death" 6t is also alleged in the complaint that Celestina !erez died on August 2, 197,

or 2 ears a*ter the ma$ing o* the alleged agreement while 'antiago Babao died on >anuar ?,19ul 12, 197< and the letter5repl thereto o* Kao8 it beingdoubt*ul whether or not, under Article 119 o* the Ci/il Code, the said letter ma be deemed as

an o**er to sell that is certain, and more, the Kao telegram is *ar *rom being an absoluteacceptance under said article, still there appears to be a cause o* action alleged in !aragraphs <to 12 o* the respondentsE complaint, considering it is alleged therein that subse+uent to thetelegram o* Kao, it was agreed that the petitioners would sell the propert to respondents *or !?"=M, b pa/ing !2 M down and the balance in 9( das and which agreement was allegedl /iolatedwhen in the deeds prepared b Att" Gamboa and ta$en to acloban, onl ( das were gi/en torespondents"0ence, loo$ing at the pose o* respondents that there was a per*ected agreement o* purchase andsale between them and petitioners under which the would pa in installments o* !2 M down and!"= M within ninet 9( das a*terwards it is e/ident that such oral contract in/ol/ing the sale o* real propert comes s+uarel under the 'tatute o* #rauds -Article 1(, o" 2-e, Ci/il Code"

Case: !legario Clarin vs. *l#erto "ulona, #eb" 2(, 19


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Construing hibits A and B together, it can be seen that the petitioner agreed to sell and therespondent agreed to bu a de*inite ob%ect, that is, ten hectares o* land which is part and parcel o* @ot 2( !@; o" , owned in common b the petitioner and his sisters although the boundaries o* the ten hectares would be delineated at a later date" he parties also agreed on a de*inite pricewhich is !2,=(("((" hibit B *urther shows that the petitioner has recei/ed *rom the respondentas initial pament, the amount o* !ul 197?, a*ter 'anchez

*ound that !aragraph 1? o* the Contract o* agenc was +uite pre%udicial to him, he eecuted withB6'AC3 a 'upplemental 'hipping Agenc Contract, mar$ed as hibit G, which was dulsigned b ecei/er Att" Adol*o F" Amor on behal* o* B6'AC3 and Marciano C" 'anchezhimsel*" 5 But, both the Contract o* Agenc and the 'upplemental 'hipping Agenc Contract werene/er submitted b Att" Adol*o Amor to the recei/ership court *or its appro/al"4hile the shipping business o* B6'AC3 in Butuan Cit *lourished, e/identl to the mutualbene*it o* both parties, on 2? ;ecember 1979, co5petitioner Ben%amin G" oa, as ecuti/e Fice5!resident o* B6'AC3, wrote 'anchez a letter 6 ad/ising him that, e**ecti/e 1 >anuar 19is a'iding strictly with the terms of the contract.

Case: 2ictorino Hernande< vs. C* and -u#stituted Heirs of "ev. Fr. $ucio Garcia, April 27,19


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his predecessors5in5interest ha/e alwas been in actual, open and continuous possession sincetime immemorial under claim o* ownership o* the portions o* the lot in +uestion"

Issue: Whether or not the contract of sale between aellant and his father-in-law, the late5ranciscoMilitante over the roerty sub9ect of 0lan 0su-**E*) was void because it was made when

laintiff was counsel of his father-in-law in a land re&istration case involvin& the roerty in disute.

Held: +-. 6t is noteworth that CaltanEs rationale *or his conclusion that *undamentalconsideration o* public polic render /oid and ineistent such epressl prohibited purchase -e"g"

b public o**icers and emploees o* go/ernment propert intrusted to them and b %ustices, %udges, *iscals and lawers o* propert and rights in litigation and submitted to or handled bthem, under Article 191, paragraphs - and -= o* our Ci/il Code has been adopted in a newarticle o* our Ci/il Code, /iz, Article 1(9 declaring such prohibited contracts as ine)istent and %oid from the 'eginning "6ndeed, the nullit o* such prohibited contracts is de*inite and permanent and cannot be cured brati*ication" he public interest and public polic remain paramount and do not permit o* compromise or rati*ication" In his aspect, the per'anent dis>ualification of pu#lic and

udicial officers and la1&ers grounded on ublic olicy differs fro' the first three cases of guardians, agents and ad'inistrators 3*rticle 66, Civil Code7, as to 1hose transactionsit had #een opined that the& 'a& #e ratified #& 'eans of and in the for' of a ne1contact, in 1hich cases its validit& shall #e deter'ined onl& #& the circu'stances at theti'e the e(ecution of such ne1 contract. he causes o* nullit which ha/e ceased to eistcannot impair the /alidit o* the new contract" hus, the ob%ect which was illegal at the time o* the*irst contract, ma ha/e alread become law*ul at the time o* the rati*ication or second contract8 or

the ser/ice which was impossible ma ha/e become possible8 or the intention which could not beascertained ma ha/e been clari*ied b the parties" he rati*ication or second contract would thenbe %alid from its e)ecution8 howe/er, it does not retroact to the date o* the *irst contract"

Case: Benedicto Javier, as ad'inistrator of the estate of use#io Cru< vs. Do'inga Cruanuar 17, 191,when the deed

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