Professional Documents
Culture Documents
INQUING
Facts: The plaintiffs herein are the lessees
of the subject disputed property. The late
spouses Tiangcos were the original owners
of the subject property. They had a verbal
lease agreement with the lessees herein
that the latter would have the right of first
refusal in the event that the spouses
Tiangco would sell the property with the
other buyers. The heirs of the spouses
Tiangco sold the subject property with
Rosencor. The lessees protested that they
have the right of first refusal which the
heirs of the Tiangcos ignored. They also
imputed bad faith to Rosencor. Hence, this
petition.
Issue:May a contract of sale entered into
in violation of a third partys right of first
refusal be rescinded in order that such
third party can exercise said right?
Held: Thus, the prevailing doctrine, as
enunciated in the cited cases, is that a
contract of sale entered into in violation of
a right of first refusal of another person,
while valid, is rescissible.
There is, however, a circumstance which
prevents the application of this doctrine in
the case at bench. In the cases cited
above, the Court ordered the rescission of
sales made in violation of a right of first
refusal precisely because the vendees
therein could not have acted in good
faith as they were aware or should have
been aware of the right of first refusal
granted to another person by the
vendors therein. The rationale for this is
found in the provisions of the New Civil
Code on rescissible contracts. Under
Article 1381 of the New Civil Code,
paragraph 3, a contract validly agreed
upon may be rescinded if it is
undertaken in fraud of creditors when
credits
with
or condition are
excluded,
because
the accion
pauliana presupposes a judgment and
unsatisfied execution, which cannot
exist when the debt is not yet
demandable at the time the rescissory
action is brought. Rescission is a
subsidiary action, which presupposes
that the creditor has exhausted the
property of the debtor which is
impossible in credits which cannot be
enforced because of a suspensive term
or condition.
While it is necessary that the credit of
the plaintiff in the accion pauliana must
be prior to the fraudulent alienation,
the date of the judgment enforcing it is
immaterial. Even if the judgment be
subsequent to the alienation, it is
merely declaratory with retroactive
effect to the date when the credit was
constituted.
These principles were reiterated by the
Court when it explained the requisites of
an accion pauliana in greater detail, to
wit:
The following successive measures must
be taken by a creditor before he may bring
an action for rescission of an allegedly
fraudulent sale: (1) exhaust the
properties of the debtor through levying
by attachment and execution upon all
the property of the debtor, except such
as are exempt from execution; (2)
exercise all the rights and actions of the
debtor, save those personal to him
(accion subrogatoria); and (3) seek
rescission of the contracts executed by
the debtor in fraud of their rights
(accion pauliana). Without availing of
the first and second remedies, i.e.,
exhausting the properties of the debtor or
subrogating themselves in Francisco
Baregs transmissible rights and actions,
of
to
irrevocably
and
It cannot be overemphasized
that rescission is generally unavailing
should a third person, acting in good
faith, is in lawful possession of the
property,[17] that is to say, he is protected
by law against a suit for rescission by the
registration of the transfer to him in the
registry.
As recited earlier, Lee was - and
may still be - in lawful possession of the
subject property as the transfer to him was
by
virtue
of
apresumptively
valid onerous contract
of
sale. His
possession is evidenced by no less than a
certificate
of
title
issued
him
by the Registry of Deeds of San Juan,
Metro Manila, after the usual registration
of the corresponding conveying deed of
sale. On the other hand, the bona fides of
his acquisitioncan be deduced from his
conduct and outward acts previous to the
sale. As testified to by him and duly noted
by the CA, respondent Lee undertook
what amounts to due diligence on the
possible defects in the title of the Ongs
before proceeding with the sale. As it
were, Lee decided to buy the
property only after being satisfied of the
absence of such defects.[18]
Time
and
again,
the Court
has held that one
dealing with a registered parcel
of land need not go beyond the certificate
of title as he is charged with notice only of
burdens which are noted on the face of the
register or on the certificate of title.
[19]
The Continuing Surety Agreement, it
ought to be particularly pointed out, was
never recorded nor annotated on the title
of spouses Ong. There is no evidence
extant in the records to show that Lee had
knowledge, prior to the subject sale, of
the surety agreement adverted to. In
Petitioner has
made
much
of respondent Lee not taking immediate
possession of the property after the sale,
stating that such failure is an indication of
his participation in the fraudulent scheme
to prejudice petitioner bank.
We are not persuaded.
Lee,
it
is
true,
allowed the respondent spouses to
continue occupying the
premises even
after the sale. This development, however,
is not without basis or practical reason.
The spouses' continuous possession of
the property was by virtue of a oneyear lease[20] they executed withrespondent
Lee six days after the sale. As
explained by the respondent spouses, they
insisted
on
the lease
arrangement
as a condition
for
the
sale in
question. And pursuant to the lease
contract
aforementioned,
the respondent Ongs
paid
and Lee
collected
rentals
at
the
rate
of P25,000.00 a
month.Contrary thus to
the petitioners asseveration, respondent L
ee, after the sale, exercised acts of
dominion over the said property and
asserted his rights as the new owner. So,
when the respondent spouses continued to
occupy the property after its sale, they
did so as mere tenants. While the failure
of the vendee to take exclusive possession
of the property is generally recognized
as a badge of fraud, the same cannot be
said here in the light of the existence
of what appears to be a genuine lessorlessee relationship between the spouses
2.
In the negative, whether or
not the heirs of Quirong were
entitled to the rescission of the
DBPs sale of the subject lot to the
late Sofia Quirong as a
consequence of her heirs having
been evicted from it.
Held: The CA held that the Quirong heirs
action for rescission of the sale between
DBP and their predecessor, Sofia Quirong,
is barred by prescription reckoned from
the date of finality of the December 16,
1992 RTC decision in Civil Case D-7159
and applying the prescriptive period of
four years set by Article 1389 of the Civil
Code.
Unfortunately, the CA did not state in its
decision the date when the RTC decision
in Civil Case D-7159 became final and
executory, which decision resulted in the
Quirong heirs loss of 80% of the lot that
the DBP sold to Sofia Quirong. Petitioner
heirs claim that the prescriptive period
should be reckoned from January 17,
1995, the date this Courts resolution in
G.R. 116575 became final and executory.
[15]
SAMONTE v. CA
The exception to the rule that the Torrens
System serves as a notice to the whole
world.
Moreover,
the
document
entitled receipt and release which
was attached by petitioner in his
appeal does not show on its face
any violation of law or public
policy. In fact, petitioner did not
present any proof to show that the
consideration for the same is not
reasonable and acceptable.
Absent any evidence to support the
same, the Court cannot, on its own
accord, decide against the
unreasonableness
of
the
[19]
consideration.
helps
the
patient. Antipsychotic
medications help bring biochemical
imbalances closer to normal in a
schizophrenic. Medications
reduce
delusions, hallucinations and incoherent
thoughts and reduce or eliminate chances
of relapse.[28] Schizophrenia can result in a
dementing illness similar in many aspects
to Alzheimers disease. However, the
illness will wax and wane over many
years, with only very slow deterioration of
intellect.[29]
From these scientific studies it can be
deduced that a person suffering from
schizophrenia does not necessarily lose
his competence to intelligently dispose
his property. By merely alleging the
existence of schizophrenia, petitioners
failed to show substantial proof that at
the date of the donation, June 16, 1951,
Feliciano Catalan had lost total control
of his mental faculties. Thus, the lower
courts correctly held that Feliciano was
of sound mind at that time and that this
condition continued to exist until proof
to the contrary was adduced.
[30]
Sufficient proof of his infirmity to
give consent to contracts was only
established when the Court of First
Instance of Pangasinan declared him an
incompetent on December 22, 1953.[31]
It is interesting to note that the petitioners
questioned Felicianos capacity at the
time he donated the property, yet did
not see fit to question his mental
competence when he entered into a
contract of marriage with Corazon
Cerezo or when he executed deeds of
donation of his other properties in their
favor. The presumption that Feliciano
remained
competent
to
execute
contracts, despite his illness, is
bolstered by the existence of these other
contracts. Competency and freedom
from undue influence, shown to have
is
unusually
inadequate;
(2)
(3)
When
the
vendor remains in
possession
as
lessee
or
otherwise;
When upon or
after the expiration
of the right to
repurchase another
instrument
extending
the
period
of
redemption
or
granting a new
period is executed;
(4)
When
the
purchaser retains
for himself a part
of the purchase
price;
(5)
(6)
That the realty taxes paid by respondentspouses was only for their house can be
explained by the fact that, until the filing
of the ejectment case, respondent Maxima
was not aware that the land she co-owned
was already partitioned, such that the
payments of real estate taxes in her name
were limited to the improvement on the
land.
An equitable mortgage is a voidable
contract. As such, it may be annulled
within four (4) years from the time the
cause of action accrues. This case,
however, not only involves a contract
resulting from fraud, but covers a
transaction
ridden
with
threat,
intimidation, and continuing undue
influence which started when petitioners
adoptive father Amado Ll. Ayson and Blas
F. Rayos, Felixs superiors at Dagupan
Facts:
Issue: W/N sufficient evidence warranted
the nullification of the deed of sale that
the late Rioza executed in favor of the
Destrezas.
Held: At the outset, the ruling of the CA
was correct. Indeed, the notarized deed of
sale should be admitted as evidence
despite the failure of the Notary Public in
submitting his notarial report to the
notarial section of the RTC Manila. It is
the swearing of a person before the Notary
Public and the latters act of signing and
affixing his seal on the deed that is
material and not the submission of the
notarial report.
Parties who appear before a notary public
to have their documents notarized should
AIRLINES
Facts: In 1997, while the spouses Viloria
were in the United States, they approached
Holiday Travel, a travel agency working
for ContinentalAirlines,
to
purchase
tickets from Newark to San Diego. The
travel agent, Margaret Mager, advised the
couple that they cannot travel by train
because it is fully booked; that they must
purchase
plane
tickets
forContinental Airlines; that if they wont
purchase plane tickets; theyll never reach
their destination in time. The couple
believed Magers representations and so
they purchased two plane tickets worth
$800.00.
Later however, the spouses found out that
the train trip isnt fully booked and so they
purchased train tickets and went to their
destination by train instead. Then they
called up Mager to request for a refund for
the plane tickets. Mager referred the
couple to ContinentalAirlines. As the
couple are now in the Philippines, they
filed
their
request
with Continental Airlines office in Ayala.
The spouses Viloria alleged that Mager
misled them into believing that the only
way to travel was by plane and so they
were fooled into buying expensive tickets.
Continental Airlines refused to refund the
amount of the ticket and so the spouses
sued the airline company. In its
defense, ContinentalAirlines claimed that
the ticket sold to them by Mager is nonrefundable; that, if any, they are not bound
by the misrepresentations of Mager
because theres no agency existing
between Continental Airlines and Mager.
The trial court ruled in favor of spouses
Viloria but the Court of Appeals reversed
the ruling of the RTC
Issue:
Held:
I. Even on the assumption that CAI
may be held liable for the acts of Mager,
still,
Spouses Viloria are not entitled
to a refund. Magers statement cannot
be considered a causal fraud that
would justify the annulment of the
subject contracts that would
oblige CAI to indemnify Spouses
Viloria and return the money they paid
for the
subject tickets.
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On the basis of the foregoing and given
the allegation of Spouses Viloria that
Fernandos consent to the subject
contracts was supposedly secured by
Mager through fraudulent means, it is
plainly apparent that their demand for a
refund is tantamount to seeking for an
annulment of the subject contracts on
the ground of vitiated consent.
Whether the subject contracts are
annullable, this Court is required to
determine whether Magers alleged
misrepresentation constitutes causal fraud.
Similar to the dispute on the existence of
an agency, whether fraud attended the
execution of a contract is factual in nature
and this Court, as discussed above, may
scrutinize the records if the findings of the
CA are contrary to those of the RTC
Under Article 1338 of the Civil Code,
there is fraud when, through insidious
words or machinations of one of the
contracting parties, the other is induced to
enter into a contract which, without them,
he would not have agreed to. In order that
fraud may vitiate consent, it must be the
causal (dolo causante), not merely the
incidental (dolo incidente), inducement to
the making of the contract.30 In Samson v.
contract
voidable, it
should
be
serious and
should
not
have been
employed
by
both
contracting
parties.
To quote Tolentino again, the
misrepresentation constituting
the fraud must be established by
full, clear, and convincing
evidence, and not merely by a
preponderance thereof. The
deceit must be serious. The
fraud is serious when it is
sufficient to impress, or to lead
an ordinarily prudent person
into error; that which cannot
deceive a prudent person cannot
be a ground for nullity. The
circumstances of each case
should be considered, taking into
account the personal conditions
of the victim.34
After meticulously poring over the
records, this Court finds that the fraud
alleged by Spouses Viloria has not been
satisfactorily established as causal in
nature to warrant the annulment of the
subject contracts. In fact, Spouses
Viloria failed to prove by clear and
convincing evidence that Magers
statement was fraudulent. Specifically,
Spouses Viloria failed to prove that (a)
there were indeed available seats at
Amtrak for a trip to New Jersey on
August 13, 1997 at the time they spoke
with Mager on July 21, 1997; (b) Mager
knew about this; and (c) that she
purposely informed them otherwise.
r
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.
Even
assuming
that
Magers
representation is causal fraud, the subject
contracts have been impliedly ratified
when Spouses Viloria decided to
exercise their right to use the subject
tickets for the purchase of new ones.
r
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.
Considering that the subject contracts are
not annullable on the ground of vitiated
consent, the next question is: Do
Spouses Viloria have the right to
rescind the contract on the ground of
CAIs supposed breach of its
undertaking to issue new tickets upon
surrender of the subject tickets?
Article 1191,
worded, states:
as
presently
s
r
e
f
u
s
a
l
t
o
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c
c
e
p
t
L
o
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t
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f
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t
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p
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F
e
r
n
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l
y
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u
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b
r
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a
c
h
.
Nonetheless, the right to rescind a
contract for non-performance of its
stipulations is not absolute. The general
rule is that rescission of a contract will
not be permitted for a slight or casual
breach, but only for such substantial
and fundamental violations as would
defeat the very object of the parties in
making the agreement.40Whether a
breach is substantial is largely
determined
by
the
attendant
41
circumstances.
While CAIs refusal to allow Fernando
to use the value of Lourdes ticket as
payment for the purchase of a new
ticket is unjustified as the nontransferability of the subject tickets was
articles
hearsay
contract was
renewed in 1993,
incorporating the same promise
by Regal to give the lots in
question.
Despite
several
films of Regal where Gabby
appeared, Regal did not give
the lots.
compromise is an agreement
between two or more persons
who, for preventing or putting
an end to a lawsuit, adjust
their respective positions by
mutual consent in the way they
feel they can live with.
Reciprocal concessions are the
very heart and life of every
compromise agreement, where
each party approximates and
concedes in the hope of
gaining balanced by the danger
of losing. It is, in essence,
a
contract.
Law
and
jurisprudence
recite
three
minimum elements for any valid
contract (a) consent; (b)
object certain which is the
subject matter of the contract;
and
(c)
cause
of
the
obligation
which
is
established.
Consent
is
manifested by the meeting of
the offer and cause which are
to constitute the agreement.
The offer, however, must be
certain and the acceptance
seasonable and absolute; if
qualified,
the
acceptance
would merely constitute a
counter-offer.
knowledge
and
consent.
A
contract entered into in the
name of another by one who
ostensibly might have but who,
in reality,
had no
real
authority
or
legal
representation, or who, having
such authority, acted beyond
his
powers,
would
be
unenforceable. The addendum,
let us then assume, resulted in
an
unenforceable
contract,
might
it
not
then
be
susceptible to ratification by
the person on whose behalf it
was executed? The answer would
obviously
be
in
the
affirmative;
however,
that
ratification should be made
before its revocation by the
other contracting party. The
adamant refusal of respondent
to accept the terms of the
addendum
constrained
petitioner,
during
the
preliminary conference held on
23 June 1995, to instead
express its willingness to
release respondent from his
contracts prayed for in his
complaint and to thereby forego
the
rejected
addendum.
Respondents
subsequent
attempt to ratify the addendum
came much too late for, by
then, the addendum had already
been
deemed
revoked
by
petitioner.
LITONJUA v. FERNANDEZ1
Facts:
Issue:
Held: On the first and second assignment
of errors, the petitioners assert that there
was a perfected contract of sale between
the petitioners as buyers and the
respondents-owners, through respondent
Fernandez, as sellers. The petitioners
contend that the perfection of the said
contract is evidenced by the January 16,
1996 Letter of respondent Fernandez.
[27]
The pertinent portions of the said letter
are as follows:
(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.[29]
The appellate court based its ruling on the
following disquisitions:
In the case at bar, the letter dated January
16, 1996 of defendant-appellant can
hardly be said to constitute the note or
memorandum evidencing the agreement
of the parties to enter into a contract of
sale as it is very clear that defendantappellant as seller did not accept the
condition that she will be the one to pay
the registration fees and miscellaneous
expenses and therein also categorically
denied she had already committed to
[50]
GOZUN v. MERCADO2
Facts: Gozun and Don Teofilo Mercado
are kumprades. During the campaign
period the spouse of Don Teofilo allegedly
entered into a contract with Mr. Gozun for
the latter to print the campaign materials
of Don Teofilo. A niece of Don Teoofilo
on the other hand obtained cash advances
from Mr. Gozun on behalf of Don Teofilo.
When Mr. Gozun had demanded for the
payment of the campaign materials, Don
Teofilo denied having auhorized his wife
and his neice to act in his behalf. He also
thought that the campaign materials were
donations from firends and political
supporters. Hence this petition.
RECEIVED
FROM JMG
THE
AMOUNT
OF 253,000
TWO
HUNDRED
FIFTY
THREE
THOUSAN
D PESOS
(SIGNED)
LILIAN R.
SORIANO
3-31-95
Nowhere in the note can
it be inferred that
defendant-appellant was
connected with the said
transaction. Under Article
1317 of the New Civil
Code, a person cannot be
bound by contracts he did
not authorize to be
entered into his behalf.[35]
It bears noting that Lilian signed in the
receipt in her name alone, without
indicating therein that she was acting
for and in behalf of respondent. She
thus bound herself in her personal
capacity and not as an agent of
respondent or anyone for that matter.
3-31-95
261,120
ADVANCE
MONEY
FOR
TRAINEE
RECEIVED
BY
v.
Limbaring,[37] this
thereof
(after
management
was
returned to petitioner), by itself, is not
conclusive proof that the said amount
was used to pay the purchase price of
the Bonifacio property, such as would
make it the property of petitioner held
merely in trust by respondent spouses
Ramos. Such a conclusion adopted by
the RTC is purely speculative and non
sequitur. The resulting difference in the
two inventories might have been caused
by other factors and the same is capable
of other interpretations (e. g., that the
amount thereof may have been written
off as business losses due to a bad
economic condition, or that the stocks
of the store might have been damaged
or otherwise their purchase prices have
increased dramatically, etc.), the
exclusion of which rested upon the
shoulders of petitioner alone who has
the burden of proof in the instant
case. This petitioner miserably failed to
do. The fact that respondent spouses
Ramos
never
denied
the P116,946.15 difference, or that they
failed to present proof that they indeed
used the said amount to pay the other
obligations and liabilities of petitioner is
not sufficient to discharge petitioners
burden to prove the existence of the
alleged express trust agreement.
GONZALES v. PEREZ
Facts: Pedro Gonzales won in a public
bidding and acquired a lot in Marikina.
However, this still needs approval from
the Provincial Governor. Marcos Perez on
the other hand bought the subject property
from Pedro Gonzales. The heirs of both
Gonzales and Perez have different
contentions. Petitioners contend that
Marcos, who is respondents' predecessorin-interest, could not have legally bought
was
xxx xxx
xxx[5]
of
such
contract
by accion
reivindicatoria and any possessor may
refuse to deliver it to the transferee, who
cannot enforce the transfer.[12]
Thus,
petitioners
insistence
that
MERLINDA cannot attack subject
contract of sale as she was a guilty party
thereto is equally unavailing.
But the pivot of inquiry here is whether
MERLINDA is barred by the principle
of in pari delicto from questioning subject
Deed of Sale.
It bears emphasizing that as the contracts
under controversy are inexistent contracts
within legal contemplation, Articles 1411
and 1412 of the New Civil Code are
inapplicable. In pari delicto doctrine
applies only to contracts with illegal
consideration or subject matter,
whether the attendant facts constitute
an offense or misdemeanor or whether
the consideration involved is merely
rendered illegal.[13]
The statement below that it is likewise
null and void for being violative of Article
1490 should just be treated as a surplusage
or an obiter dictum on the part of the Trial
Court as the issue of whether the parcels
of land in dispute are conjugal in nature or
they fall under the exceptions provided for
by law, was neither raised nor litigated
upon before the lower Court. Whether the
said lots were ganancial properties was
never brought to the fore by the parties
and it is too late to do so now.
Futhermore, if this line of argument be
followed, the Trial Court could not have
declared subject contract as null and void
because only the heirs and the creditors
can question its nullity and not the
spouses themselves who executed the
contract with full knowledge of the
prohibition.[14]
notarial
certificate
was
therefore
incomplete. The notarial certificate being
deficient, it was as if the notarial
acknowledgment was unsigned. The
photocopy of the SPA has no notarial
acknowledgment to speak of. It was a
mere private document which petitioners
cannot foist as a banner of good faith.
All told, it was not sufficient evidence of
good faith that petitioners merely relied on
the photocopy of the SPA as this turned
out to be a mere private document. They
should have adduced more evidence that
they looked beyond it. They did not.
Instead, they took no precautions at all.
They verified with Atty. Lucero whether
the SPA was authentic but then the latter
was not the notary public who prepared
the document. Worse, they purposely
failed to inquire who was the notary
public who prepared the SPA. Finally,
petitioners conducted the transaction in
haste. It took them all but three days or
from March 2 to 4, 1988 to enter into the
deed of sale, notwithstanding the
restriction on the capacity to sell of
Pedro.59 In no way then may petitioners
qualify as buyers for value in good faith.
That said, we come to the third issue on
whether petitioners may retain the portion
of Pedro Silva in the subject property.
Certainly not. It is well-settled that the
nullity of the sale of conjugal property
contracted by the husband without the
marital consent of the wife affects the
entire property, not just the share of the
wife.60 We see no reason to deviate from
this rule.
RAMIREZ v. RAMIREZ
Facts: On October 8, 1996, petitioner
filed a complaint against respondent Ma.
cross-claim[9] against
Pedro
and
Cesar Tamondong,
the
answering
defendants-respondents claimed that a few
weeks after the partition, Pacita
approached Angelica and Alegria to
borrow their share in the property on her
representation that it would be used as
security for a business loan; and that
agreeing to accommodate Pacita, Angelica
and Alegria signed
a
document
which Pacita prepared which turned out to
be the deed of absolute sale
in Pacitas favor. In their Answer with
Counterclaim,[10] Pedro
and
Cesar Tamondong claimed that they were
buyers in good faith.[11] In any event, they
contended that prescription had set in, and
that the complaint was a mere rehash of a
previous complaint for falsification of
public document which had been
dismissed by the prosecutors office.
Issue: W/N prescription had already set in.
Held: The petition is impressed with
merit.
As gathered from the above-quoted
portion of its decision, the Court of
Appeals applied the prescriptive periods
for annulment on the ground of fraud and
for reconveyance of property under a
constructive trust.
The extra-judicial partition executed by
Teofilos
co-heirs
was
invalid,
[21]
however. So Segura v. Segura instructs:
x x x The partition in the present
case was invalid because it
excluded six of the nine heirs who
were entitled to equal
shares in
the partitioned property. Under the
rule, no extra-judicial settlement
shall be binding upon any person
who has
not
participated
therein or had no notice
thereof. As the partition was a
total nullity and did not affect the
excluded
heirs, it
was
not
correct for the trial court to hold
that their right to challenge the
partition had prescribed after two
years x x x
The deed of extra-judicial partition in
the case at bar being invalid, the action
to have it annulled does not prescribe.
[23]
QUIMPO v. BELTRAN
Facts: Eustaquia Perfecto-Abad died
intestate in 1948 leaving these parcels of
land to her grandchild and great
grandchildren, namely, Joaquin Quimpo
and respondents Consuelo, Ireneo, Danilo,
Marites, Anita and Helen, all surnamed
Abad. The properties are herein
designated as Parcels I,II,III,IV
In 1966, Joaquin and respondents
undertook an oral partition of parcels III
and IV. Half of the properties was given to
Joaquin and the other half to the
respondents. No document of partition
was executed. Consuelo and Ireneo
occupied their respective shares in the San
Jose property (Parcel III), and installed
several tenants over their share in parcel
v.
Maglucot,[16] we
[17]
In Guiang v.
Court
of
Appeals, it was held that the
sale of a conjugal property
requires the consent of both
the husband and wife. In
applying Article 124 of the
Family Code, this Court
declared that the absence of
the consent of one renders
the entire sale null and void,
including the portion of the
conjugal
property
pertaining to the husband
who
contracted
the
sale. x x x
xxxx
x x x By express provision of
Article 124 of the Family
Code, in the absence of (court)
authority or written consent of
the other spouse, any
disposition or encumbrance of
the conjugal property shall be
void. [20]
Thus, pursuant to Article 124 of the Family
Code and jurisprudence, the sale of petitioners'
conjugal
property
made
by
petitioner Onesiforo alone is void in its
entirety.
It is true that in a number of cases, this Court
abstained from applying the literal import of a
particular provision of law if doing so would
lead to unjust, unfair and absurd results.[21]
In the present case, the Court does not see how
applying Article 124 of the Family Code would
lead to injustice or absurdity. It should be
noted that respondent spouses were well aware
that Lot 896-B-9-B is a conjugal property of
petitioners. They also knew that the
disposition being made by Onesiforo is
without the consent of his wife, as they knew
constituting a loan or
forbearance of money is six
percent (6%) annually. If the
purchase price could be
established with certainty at
the time of the filing of the
complaint, the six percent
(6%) interest should be
computed from the date the
complaint was filed until
finality of the decision.
In Lui vs. Loy, involving a
suit
for reconveyance and
annulment of title filed by the
first buyer against the seller
and the second buyer, the
Court, ruling in favor of the
first buyer and annulling the
second sale, ordered the seller
to refund to the second buyer
(who was not a purchaser in
good faith) the purchase price
of the lots. It was held therein
that the 6% interest should be
computed from the date of the
filing of the complaint by the
first
buyer. After
the
judgment becomes final
and executory until
the
obligation is satisfied, the
amount due shall earn interest
at 12% per year, the interim
period
being
deemed
equivalent to a forbearance of
credit.
Accordingly, the amount
of P110,000.00 due
the
respondent spouses which
could be determined with
certainty at the time of the
filing of the complaint shall
earn 6% interest per annum
from June 4, 1986 until the
finality of this decision. If
the adjudged principal and
s
o
l
u
t
e
S
a
l
e
e
x
e
c
u
t
e
d
b
y
T
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u
b
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c
t
S
p
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e
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f
A
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n
(
h
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r
e
i
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p
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t
i
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i
o
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e
r
s
)
a
r
e
a
b
s
o
l
u
t
e
l
y
s
i
m
u
l
a
t
e
d
a
n
d
f
i
c
t
i
t
i
o
u
s
.
The CA correctly held that the assailed Deeds
of Absolute Sale were executed when the
Possession Case was already pending,
evidently to avoid the properties subject
thereof from being attached or levied upon by
the respondents. While the sales in question
transpired
on October
18,
1985 and November 2, 1988, as reflected on
the Deeds of Absolute Sale, the same were
registered with the Registry of Deeds only
on October 25, 1990 and September 25,
1990.
We also agree with the findings of the CA that
petitioners failed to explain the reasons for the
Resident
ial Lots:
From
Spouses
Campos
to
daughter
Considera
tion
specified
in Deed of
Absolute
Sale
Market
Value as
per Tax
Declarat
ion
P 7,000.0
0
P 83,58
0.00[27]
,
Rosemar
ie
Campos
Agricult
ural
Lots:
From
Spouses
Campos
to son,
Jesus
Campos
P 5,600.0
0
P 25,00
0.19[29]
P 39,860.
00[30]
Compute
d Zonal
Valuation
(BIR
Certificati
Q:
Can you tell us the
total area of those two (2) lots
that they sold to you?
A:
It consists of One
Thousand (1,000) Square
Meters.[32]
xxxx
P 417,90
0.00
Q:
A:
Seven Thousand
Pesos (P7,000.00) Your
Honor.[33]
Fourth, it appears on record that the money
judgment in the Possession Case has not been
discharged with. Per Sheriffs Service Return
dated November 14, 1995, the Alias Writ of
Execution and Sheriffs Demand for Payment
dated September 19, 1995 remain unsatisfied.
Finally, spouses Campos continue to be in
actual possession of the properties in
question. Respondents have established
through the unrebutted testimony of Rolando
Azoro that spouses Campos have their house
within Lot 3715-A and Lot 3715-B-2 and
that they reside there together with their
daughter
Rosemarie.[34] In
addition,
spousesCampos continued to cultivate the rice
lands which they purportedly sold to their son
Jesus.[35] Meantime, Jesus, the supposed new
owner of said rice lands, has relocated to
Bulacan[36] where he worked as a security
guard.[37] In other words, despite the transfer
of the said properties to their children, the
latter have not exercised complete dominion
over the same. Neither have the petitioners
shown if their parents are paying rent for the
use of the properties which they already sold
to their children.
In Suntay v. Court of Appeals,[38] we
held that:
The failure of the late Rafael
to take exclusive possession of
the property allegedly sold to
him is a clear badge of
fraud. The
fact
that,
notwithstanding the title
transfer, Federico remained in
actual possession, cultivation and
occupation of the disputed lot
from the time the deed of sale
was executed until the present, is
a circumstance which is
unmistakably added proof of the
fictitiousness of the said transfer,
the same being contrary to the
principle of ownership.
While in Spouses Santiago v. Court of
Appeals,[39] we held that the failure of
petitioners to take exclusive possession of the
property allegedly sold to them, or in the
alternative, to collect rentals from the alleged
vendor x x x is contrary to the principle of
ownership and a clear badge of simulation
that renders the whole transaction void and
without force and effect, pursuant to Article
1409 of the Civil Code.
T
h
e
i
s
s
u
a
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c
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o
f
t
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a
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i
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r
s
d
i
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v
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t
u
p
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m
o
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s
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p
r
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i
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s
.
The fact that petitioners were able to secure
titles in their names did not operate to vest
upon them ownership over the subject
properties. That act has never been
recognized as a mode of acquiring ownership.
[40]
The Torrens system does not create or
vest title. It only confirms and records title
A:
Q:
A:
And in spite of
your knowledge, that
there was a pending
case between your
parents and the
plaintiffs here, you
still purchased these
two (2) lots 850 and
852
from
your
parents, is that what
you are telling us?
All I knew was
that, that case was a
different case from
the subject matter
then [sic] the lot now
in question.[42]
d
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[
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4
]
Issue:
Held:Validity of the sale of the subject
property
to
petitioner
PD 27 prohibits the transfer of ownership
over tenanted rice and/or corn lands
after October 21, 1972except only in favor
of the actual tenant-tillers thereon. As held
in the case of Sta. Monica Industrial and
Development Corporation v. DAR
Regional
Director
for
Region
III,36 citing Heirs of Batongbacal v.
CA:37
x x x P.D. No. 27, as amended, forbids
the transfer or alienation of covered
agricultural lands after October 21,
1972 except to the tenant-beneficiary. x
x
x.
In Heirs of Batongbacal v. Court of
Appeals, involving the similar issue of
sale of a covered agricultural land under
P.D.
No.
27,
this
Court
held:cralavvonlinelawlibrary
Clearly, therefore, Philbanking committed
breach of obligation as an agricultural
lessor. As the records show, private
respondent was not informed about the
sale between Philbanking and petitioner,
and neither was he privy to the transfer of
ownership from Juana Luciano to
Philbanking. As an agricultural lessee, the
law gives him the right to be informed
about matters affecting the land he tills,
without need for him to inquire about it.
xxxx
In other words, transfer of ownership
over tenanted rice and/or corn lands
after October 21, 1972 is allowed only
in favor of the actual tenant-tillers
thereon. Hence, the sale executed by
Philbanking on January 11, 1985 in favor
The settled rule is that persons dealing with an assumed agent are bound at their peril, and if they would hold the principal liable, to
ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is
upon them to prove it. In this case, respondent Fernandez specifically denied that she was authorized by the respondents-owners to sell the
properties, both in her answer to the complaint and when she testified.
The Letter dated January 16, 1996 relied upon by the petitioners was signed by respondent Fernandez alone, without any authority from
the respondents-owners. There is no actuation of respondent Fernandez in connection with her dealings with the petitioners. As such, said
letter is not binding on the respondents as owners of the subject properties.
2
Contracts entered into in the name of another person by one who has been given no authority or legal representation or who has acted
beyond his powers are classified as unauthorized contracts and are unenforceable, unless they are ratified.
It is a general rule in the law agency that, in order to bind the principal by a mortgage on real property executed by an agent, it must upon
its face purport to be made, signed and sealed in the name of the principal, otherwise, it will bind the agent only.
3
To establish his status as a buyer for value in good faith, a person dealing with land registered in the
name of and occupied by the seller need only show that he relied on the face of the seller's certificate of
title.1 But for a person dealing with land registered in the name of and occupied by the seller whose
capacity to sell is restricted, such as by Articles 166 2 and 1733 of the Civil Code or Article 124 4 of the
Family Code, he must show that he inquired into the latter's capacity to sell in order to establish himself
as a buyer for value in good faith.5 The extent of his inquiry depends on the proof of capacity of the
seller. If the proof of capacity consists of a special power of attorney duly notarized, mere inspection of
the face of such public document already constitutes sufficient inquiry. If no such special power of
attorney is provided or there is one but there appear flaws in its notarial acknowledgment mere
inspection of the document will not do; the buyer must show that his investigation went beyond the
document and into the circumstances of its execution.
4
Dutch spouse bought a residential lot but PR Builders has not developed lot. Spouse to rescind contract to sell and sue PR.
In pari delicto. An exception to such rule where, even as the intent to circumvent the constitutional proscription on aliens owning real
property was evident by virtue of the execution of the Contract to Sell, such violation of the law did not materialize because the buyer
cased the rescission of the contract before the execution of the final deed transferring ownership.
Under Art 1414, one who repudiates the agreement and demands his money before the illegal act has taken place is entitled to recover.
Hulst is entitled to the recovery only of the amount of P3,187,500, representing purchase price paid to PR. No damages may be
recovered on the bases of a void contract; being nonexistent, the agreement produces no juridical tie between the parties involved.
Hulst is not entitled to actual, interest, moral and exemplary damages and attorneys fees.
5
The RTC ruled that the sale between Poblete and Maniego was a nullity. The RTC found that the
agreed consideration was P900,000.00 and Maniego failed to pay the consideration. Furthermore, the
signatures of Poblete and her deceased husband were proven to be forgeries. The RTC also ruled that
Land Bank was not a mortgagee in good faith because it failed to exercise the diligence required of
banking institutions. The RTC explained that had Land Bank exercised due diligence, it would have
known before approving the loan that the sale between Poblete and Maniego had not been
consummated. Nevertheless, the RTC granted Land Banks cross-claim against Maniego.