G.R. No. L-9356 February 18, 1915 C. S. GILCHRIST, vs. E. A.

CUDDY,
ET AL
TRENT, J.:
Facts:
An appeal by the defendants, Jose Fernandez Espejo and Mariano
Zaldarriaga, from a judgment of the Court of First Instance of Iloilo,
dismissing their cross-complaint upon the merits for damages against the
plaintiff for the alleged wrongful issuance of a mandatory and a preliminary
injunction.
Cuddy was the owner of the film Zigomar and that on the 24th of April he
rented it to C. S. Gilchrist, owner of a cinematograph theater in Iloilo, for a
week for P125, and it was to be delivered on the 26th of May. A few days
prior to this Cuddy sent the money back to Gilchrist, which he had forwarded
to him in Manila, saying that he had made other arrangements with his film.
The other arrangements was the rental to these defendants Espejo and his
partner for P350 for the week. Espejo admitted that he knew that Cuddy was
the owner of the film. He received a letter from his agents in Manila dated
April 26, assuring him that he could not get the film for about six weeks. The
arrangement between Cuddy and the appellants for the exhibition of the film
by the latter on the 26th of May were perfected after April 26, so that the six
weeks would include and extend beyond May 26. The appellants must
necessarily have known at the time they made their offer to Cuddy that the
latter had booked or contracted the film for six weeks from April 26.
Therefore, the inevitable conclusion is that the appellants knowingly induced
Cuddy to violate his contract with another person. But there is no specific
finding that the appellants knew the identity of the other party.
There is in the record not only the positive and detailed testimony of Gilchrist
to this effect, but there is also a letter of apology from Cuddy to Gilchrist in
which the former enters into a lengthy explanation of his reasons for leasing
the film to another party.
Then, an injunction was asked by Gilchrist against these parties from
showing it for the week beginning the 26th of May. CFI produced an
injunction restraining the defendants from exhibiting the film in question.
Issue:
WON appellants likewise liable for interfering with the contract between
Gilchrist and Cuddy, they not knowing at the time the identity of one of the
contracting parties?

Held:
Yes. In the case at bar the only motive for the interference with the Gilchrist
Cuddy contract on the part of the appellants was a desire to make a profit
by exhibiting the film in their theater. There was no malice beyond this
desire; but this fact does not relieve them of the legal liability for interfering
with that contract and causing its breach. It is, therefore, clear, under the
above authorities, that they were liable to Gilchrist for the damages caused
by their acts, unless they are relieved from such liability by reason of the fact
that they did not know at the time the identity of the original lessee
(Gilchrist) of the film. The liability of the appellants arises from unlawful acts
and not from contractual obligations, as they were under no such obligations
to induce Cuddy to violate his contract with Gilchrist. . Article 1902 of that
code provides that a person who, by act or omission, causes damages to
another when there is fault or negligence, shall be obliged to repair the
damage do done. There is nothing in this article which requires as a condition
precedent to the liability of a tort-feasor that he must know the identity of a
person to whom he causes damages. In fact, the chapter wherein this article
is found clearly shows that no such knowledge is required in order that the
injured party may recover for the damage suffered.
But the fact that the appellants' interference with the Gilchrist contract was
actionable did not of itself entitle Gilchrist to sue out an injunction against
them. The allowance of this remedy must be justified under section 164 of
the Code of Civil Procedure, which specifies the circumstance under which an
injunction may issue.
An injunction is a "special remedy" which was there issued by the authority
and under the seal of a court of equity, and limited, as in order cases where
equitable relief is sought, to cases where there is no "plain, adequate, and
complete remedy at law," which "will not be granted while the rights
between the parties are undetermined, except in extraordinary cases where
material and irreparable injury will be done," which cannot be compensated
in damages, and where there will be no adequate remedy, and which will
not, as a rule, be granted, to take property out of the possession of one party
and put it into that of another whose title has not been established by law.
So far as the preliminary injunction issued against the appellants is
concerned, Court is of the opinion that the circumstances justified the
issuance of that injunction.
Hence, judgment is affirmed, with costs, against appellants.

[G.R. No. 138018. July 26, 2002]

RIDO MONTECILLO, petitioner, vs. IGNACIA REYNES and SPOUSES
REDEMPTOR and ELISA ABUCAY,respondents.
CARPIO, J.:
Facts:

Respondents Ignacia Reynes (Reynes for brevity) and Spouses Abucay

(Abucay Spouses for brevity) filed a complaint for Declaration of Nullity and
Quieting of Title against petitioner Rido Montecillo (Montecillo for brevity).
Reynes asserted that she is the owner of a lot situated in Mabolo, Cebu City
containing an area of 448 square meters (Mabolo Lot for brevity). In 1981,
Reynes sold 185 square meters of the Mabolo Lot to the Abucay Spouses who
built a residential house on the lot they bought.
Reynes alleged further that she signed a Deed of Sale of the Mabolo Lot in
favor of Montecillo (Montecillos Deed of Sale for brevity). Reynes, being
illiterate signed by affixing her thumb-mark on the document. Montecillo
promised to pay the agreedP47,000.00 purchase price within one month
from the signing of the Deed of Sale. Montecillos Deed of Sale.
Reynes alleged that Montecillo failed to pay the purchase price after the
lapse of the one-month period, prompting Reynes to demand from Montecillo
the return of the Deed of Sale. Since Montecillo refused to return the Deed of
Sale, Reynes executed a document unilaterally revoking the sale and gave a
copy of the document to Montecillo.
Subsequently, on May 23, 1984 Reynes signed a Deed of Sale transferring to
the Abucay Spouses the entire Mabolo Lot, at the same time confirming the
previous sale in 1981 of a 185-square meter portion of the lot.
Reynes and the Abucay Spouses received information that the Register of
Deeds of Cebu City issued in the name of Montecillo for the Mabolo Lot.

Reynes and the Abucay Spouses argued that for lack of consideration there
(was) no meeting of the minds between Reynes and Montecillo. Thus, the
trial court should declare null and void ab initio Montecillos Deed of Sale.
In his Answer, Montecillo, a bank executive with a B.S. Commerce degree,
claimed he was a buyer in good faith and had actually paid the P47,000.00
consideration stated in his Deed of Sale. Montecillo, however, admitted he
still owed Reynes a balance of P10,000.00.He also alleged that he paid
P50,000.00 for the release of the chattel mortgage which he argued
constituted a lien on the Mabolo Lot. He further alleged that he paid for the
real property tax as well as the capital gains tax on the sale of the Mabolo
Lot. Reynes and the Abucay Spouses claimed that Montecillo secured the
release of the chattel mortgage through machination.
Montecillo claimed that the consideration for the sale of the Mabolo Lot was
the amount he paid to Cebu Ice and Cold Storage Corporation (Cebu Ice
Storage for brevity) for the mortgage debt of Bienvenido Jayag (Jayag for
brevity). Montecillo argued that the release of the mortgage was necessary
since the mortgage constituted a lien on the Mabolo Lot. Reynes, however,
stated that she had nothing to do with Jayags mortgage debt except that the
house mortgaged by Jayag stood on a portion of the Mabolo Lot. Reynes
further stated that the payment by Montecillo to release the mortgage on
Jayags house is a matter between Montecillo and Jayag. The mortgage on the
house, being a chattel mortgage, could not be interpreted in any way as an
encumbrance on the Mabolo Lot.
The trial court rendered a decision declaring the Deed of Sale to Montecillo
null and void. The trial court found that Montecillos Deed of Sale had no
cause or consideration because Montecillo never paid Reynes theP47,000.00
purchase price, contrary to what is stated in the Deed of Sale that Reynes
received the purchase price.
Montecillo appealed the same to the Court of Appeals.
Issue:
WON the Deed of Sale void from the beginning or simply rescissible?
Held:
The Deed of Sale is void ab initio. Under Article 1318 of the Civil Code,
[T]here is no contract unless the following requisites concur: (1) Consent of
the contracting parties; (2) Object certain which is the subject matter of the
contract; (3) Cause of the obligation which is established. Article 1352 of the

Civil Code also provides that contracts without cause produce no effect
whatsoever.
Montecillo asserts there is no lack of consideration that would prevent the
existence of a valid contract. Rather, there is only non-payment of the
consideration within the period agreed upon for payment. The Court
disagrees.
Montecillos Deed of Sale states that Montecillo paid, and Reynes received,
the P47,000.00 purchase price on March 1, 1984, the date of signing of the
Deed of Sale.
On its face, Montecillos Deed of Absolute Sale appears supported by a
valuable consideration. However, based on the evidence presented by both
Reynes and Montecillo, the trial court found that Montecillo never paid to
Reynes, and Reynes never received from Montecillo, the P47,000.00
purchase price. There was indisputably a total absence of consideration
contrary to what is stated in Montecillos Deed of Sale. As pointed out by the
trial court.
This is not merely a case of failure to pay the purchase price, as Montecillo
claims, which can only amount to a breach of obligation with rescission as
the proper remedy. What we have here is a purported contract that lacks a
cause - one of the three essential requisites of a valid contract. Failure to pay
the consideration is different from lack of consideration. The former results in
a right to demand the fulfillment or cancellation of the obligation under an
existing valid contract while the latter prevents the existence of a valid
contract.
Where the deed of sale states that the purchase price has been paid but in
fact has never been paid, the deed of sale is null and voidab initio for lack of
consideration.
Reynes expected Montecillo to pay him directly the P47,000.00 purchase
price within one month after the signing of the Deed of Sale.On the other
hand, Montecillo thought that his agreement with Reynes required him to pay
the P47,000.00 purchase price to Cebu Ice Storage to settle Jayags mortgage
debt. Montecillo also acknowledged a balance of P10,000.00 in favor of
Reynes although this amount is not stated in Montecillos Deed of Sale. Thus,
there was no consent, or meeting of the minds, between Reynes and
Montecillo on the manner of payment. This prevented the existence of a
valid contract because of lack of consent.
In summary, Montecillos Deed of Sale is null and void ab initio not only for
lack of consideration, but also for lack of consent. The cancellation of TCT No.
90805 in the name of Montecillo is in order as there was no valid contract
transferring ownership of the Mabolo Lot from Reynes to Montecillo.

WHEREFORE, the petition is DENIED and the assailed Decision of the Court of
Appeals is AFFIRMED.

JULIAN FRANCISCO (Substituted by his Heirs, namely: CARLOS ALTEA

FRANCISCO; the heirs of late ARCADIO FRANCISCO vs. PASTOR
HERRERA, respondent.
QUISUMBING, J.:

Facts:
Eligio Herrera, Sr., the father of respondent, was the owner of two parcels of
land, one consisting of 500 sq. m. and another consisting of 451 sq. m. Both
were located at Barangay San Andres, Cainta, Rizal.
On January 3, 1991, petitioner bought from said landowner the first parcel for
the price of P1,000,000, paid in installments.
On March 12, 1991, petitioner bought the second parcel for P750,000.
Contending that the contract price for the two parcels of land was grossly
inadequate, the children of Eligio, Sr., namely, Josefina Cavestany, Eligio
Herrera, Jr., and respondent Pastor Herrera, tried to negotiate with petitioner
to increase the purchase price. When petitioner refused, herein respondent
then filed a complaint for annulment of sale, with the RTC of Antipolo City. In
his complaint, respondent claimed ownership over the second parcel,
allegedly by virtue of a sale in his favor since 1973. He likewise claimed that

the first parcel was subject to the co-ownership of the surviving heirs of
Francisca A. Herrera, the wife of Eligio, Sr., considering that she died
intestate, before the alleged sale to petitioner. Finally, respondent also
alleged that the sale of the two lots was null and void on the ground that at
the time of sale, Eligio, Sr. was already incapacitated to give consent to a
contract because he was already afflicted with senile dementia,
characterized by deteriorating mental and physical condition including loss
of memory.
In his answer, petitioner as defendant below alleged that respondent was
estopped from assailing the sale of the lots. Petitioner contended that
respondent had effectively ratified both contracts of sales, by receiving the
consideration offered in each transaction.
Regional Trial Court handed down its decision:
1. The deeds of sale of the properties are declared null and void;
2. The defendant is to return the lots in question including all improvements
thereon to the plaintiff and the plaintiff is ordered to simultaneously return to
the defendant the purchase price of the lots sold
Petitioner then elevated the matter to the Court of Appeals. The appellate
court affirmed the decision of the Regional Trial Court. Hence, this petition.
Issue:
WON the assailed contracts of sale void or merely voidable and hence
capable of being ratified?
Held:
We note that both the trial court and the Court of Appeals found that Eligio,
Sr. was already suffering from senile dementia at the time he sold the lots in
question. In other words, he was already mentally incapacitated when he
entered into the contracts of sale. Settled is the rule that findings of fact of
the trial court, when affirmed by the appellate court, are binding and
conclusive upon the Supreme Court.
Coming now to the pivotal issue in this controversy. A void or inexistent
contract is one which has no force and effect from the very beginning.
Hence, it is as if it has never been entered into and cannot be validated
either by the passage of time or by ratification. There are two types of void
contracts:
(1) those where one of the essential requisites of a valid contract as provided
for by Article 1318 of the Civil Code is totally wanting; and
(2) those declared to be so under Article 1409 of the Civil Code. By contrast,
a voidable or annullable contract is one in which the essential requisites for

validity under Article 1318 are present, but vitiated by want of capacity,
error, violence, intimidation, undue influence, or deceit.
Article 1318 of the Civil Code states that no contract exists unless there is a
concurrence of consent of the parties, object certain as subject matter, and
cause of the obligation established. Article 1327 provides that insane or
demented persons cannot give consent to a contract. But, if an insane or
demented person does enter into a contract, the legal effect is that the
contract is voidable or annullable as specifically provided in Article 1390.
In the present case, it was established that the vendor Eligio, Sr. entered into
an agreement with petitioner, but that the formers capacity to consent was
vitiated by senile dementia. Hence, we must rule that the assailed contracts
are not void or inexistent per se; rather, these are contracts that are valid
and binding unless annulled through a proper action filed in court
seasonably.
An annullable contract may be rendered perfectly valid by ratification, which
can be express or implied. Implied ratification may take the form of
accepting and retaining the benefits of a contract. This is what happened in
this case. Respondents contention that he merely received payments on
behalf of his father merely to avoid their misuse and that he did not intend to
concur with the contracts is unconvincing. If he was not agreeable with the
contracts, he could have prevented petitioner from delivering the payments,
or if this was impossible, he could have immediately instituted the action for
reconveyance and have the payments consigned with the court. None of
these happened.
As found by the trial court and the Court of Appeals, upon learning of the
sale, respondent negotiated for the increase of the purchase price while
receiving the installment payments. It was only when respondent failed to
convince petitioner to increase the price that the former instituted the
complaint for reconveyance of the properties. Clearly, respondent was
agreeable to the contracts, only he wanted to get more. Further, there is no
showing that respondent returned the payments or made an offer to do so.
This bolsters the view that indeed there was ratification. One cannot
negotiate for an increase in the price in one breath and in the same breath
contend that the contract of sale is void.
Note that it was found by both the trial court and the Court of Appeals that
Eligio, Sr., was the declared owner of said lots. This finding is conclusive on
us. As declared owner of said parcels of land, it follows that Eligio, Sr., had
the right to transfer the ownership thereof under the principle of jus
disponendi.
In sum, the appellate court erred in sustaining the judgment of the trial court
that the deeds of sale of the two lots in question were null and void.

WHEREFORE, the instant petition is GRANTED. The two contracts of sale

covering lots are hereby declared VALID.

[G.R. No. 121069. February 7, 2003]

BENJAMIN CORONEL AND EMILIA MEKING VDA. DE CORONEL,
petitioners, vs. FLORENTINO CONSTANTINO, AUREA BUENSUCESO,
AND THE HONORABLE COURT OF APPEALS, respondents.
AUSTRIA-MARTINEZ, J.:
Facts:

The factual background of the case is as follows:

The subject property consists of two parcels of land situated in Sta. Monica,
Hagonoy, Bulacan. The property is originally owned by Honoria Aguinaldo. One-half
(1/2) of it was inherited by Emilia Meking Vda. de Coronel together with her sons

Benjamin, Catalino and Ceferino, all surnamed Coronel. The other half was inherited
by Florentino Constantino and Aurea Buensuceso.
On February 20, 1991, Constantino and Buensuceso filed a complaint for declaration
of ownership, quieting of title and damages with prayer for writ of mandatory and/or
prohibitory injunction with the Regional Trial Court of Bulacan against Benjamin,
Emilia and John Does. Plaintiffs allege that: on April 23, 1981, Jess C. Santos and
Priscilla Bernardo purchased the property belonging to Emilia and her sons by virtue
of a deed of sale signed by Emilia; on June 21, 1990, Santos and Bernardo in turn
sold the same to Constantino and Buensuceso by virtue of a compromise agreement
; they are the owners of the subject property and defendants have illegally started
to introduce construction on the premises in question; and pray that defendants
respect, acknowledge and confirm the right of ownership of the plaintiffs to the
share, interest and participation of the one-third (1/3) portion of the above
described property.
After defendants filed their Answer, pre-trial ensued wherein the parties stipulated
that: (1) the property in question was previously owned by Honoria Aguinaldo, onehalf (1/2) of which was inherited by the defendants while the other half was
inherited by the plaintiffs from the same predecessor; (2) it was admitted by
counsel for the defendants that there was a sale between Jess Santos and the
plaintiffs covering the subject property; and (3) that there was no evidence
presented in Civil Case No. 8289-M by either of the parties and that the decision
therein was based on a compromise agreement.[3]
After trial on the merits, the trial court rendered a decision in favor of the plaintiffs.
On appeal brought by defendants, the Court of Appeals affirmed the decision of the
lower court.
Hence, herein petition.

Issue:
WHETHER OR NOT THE 3 Sons of Emilia ratified her sale.
Held:
The three sons of Emilia did not ratify the sale.
Ratification means that one under no disability voluntarily adopts and gives
sanction to some unauthorized act or defective proceeding, which without his

sanction would not be binding on him. It is this voluntary choice, knowingly made,
which amounts to a ratification of what was theretofore unauthorized, and becomes
the authorized act of the party so making the ratification.
No evidence was presented to show that the three brothers were aware of the sale
made by their mother. Unaware of such sale, Catalino, Ceferino and Benjamin could
not be considered as having voluntarily remained silent and knowingly chose not to
file an action for the annulment of the sale. Their alleged silence and inaction may
not be interpreted as an act of ratification on their part.
We also find no concrete evidence to show that Ceferino, Catalino and Benjamin
benefited from the sale. It is true that private respondent Constantino testified that
Benjamin took money from Jess Santos but this is mere allegation on the part of
Constantino. No other evidence was presented to support such allegation. Bare
allegations, unsubstantiated by evidence, are not equivalent to proof under our
Rules of Court. Neither do the records show that Benjamin admitted having
received money from Jess Santos. Even granting that Benjamin indeed received
money from Santos, Constantinos testimony does not show that the amount
received was part of the consideration for the sale of the subject property.
To repeat, the sale is valid insofar as the share of petitioner Emilia Meking Vda. de
Coronel is concerned. The due execution of the Kasulatan ng Bilihang Patuluyan was
duly established when petitioners, through their counsel, admitted during the pretrial conference that the said document was signed by Emilia. While petitioners
claim that Emilia erroneously signed it under the impression that it was a contract of
mortgage and not of sale, no competent evidence was presented to prove such
allegation.
Hence, Jess C. Santos and Priscilla Bernardo, who purchased the share of Emilia,
became co-owners of the subject property together with Benjamin and the heirs of
Ceferino and Catalino. As such, Santos and Bernardo could validly dispose of that
portion of the subject property pertaining to Emilia in favor of herein private
respondents Constantino and Buensuceso.
However, the particular portions properly pertaining to each of the co-owners are
not yet defined and determined as no partition in the proper forum or extrajudicial
settlement among the parties has been effected among the parties. Consequently,
the prayer of respondents for a mandatory or prohibitory injunction lacks merit.

Republic of the Philippines SUPREME COURT Manila

EN BANC
G.R. No. 16530 March 31, 1922
MAMERTO LAUDICO and FRED M. HARDEN, plaintiffs-appellants, vs.

MANUEL ARIAS RODRIGUEZ, ET AL., defendants-appellants.

Crossfield and O'Brien for plaintiff-appellants. Fisher and DeWitt for
defendants-appellants.
AVANCEA, J.:
Facts:
On February 5, 1919, the defendant, Vicente Arias, who, with his
codefendants, owned the building Nos. 205 to 221 on Carriedo Street, on his
behalf and that of his co-owners, wrote a letter to the plaintiff, Mamerto
Laudico, giving him an option to lease the building to a third person, and
transmitting to him for that purpose a tentative contract in writing containing
the conditions upon which the proposed lease should be made.
Later Mr. Laudico presented his coplaintiff, Mr. Fred. M. Harden, as the party
desiring to lease the building. On one hand, other conditions were added to
those originally contained in the tentative contract, and, on the other,
counter-propositions were made and explanations requested on certain
points in order to make them clear. These negotiations were carried on by
correspondence and verbally at interviews held with Mr. Vicente Arias, no
definite agreement having been arrived at until the plaintiff, Mr. Laudico,
finally wrote a letter to Mr. Arias, advising him that all his propositions, as
amended and supplemented, were accepted.
It is admitted that this letter was received by Mr. Arias by special delivery at
2.53 p.m. of that day. On that same day, at 11.25 in the morning, Mr. Arias
had, in turn, written a letter to the plaintiff, Mr. Laudico, withdrawing the
offer to lease the building.
The chief prayer of the plaintiff in this action is that the defendants be
compelled to execute the contract of lease of the building in question. It thus
results that when Arias sent his letter of withdrawal to Laudico, he had not
yet received the letter of acceptance, and when it reached him, he had
already sent his letter of withdrawal. Under these facts we believe that no
contract was perfected between the plaintiffs and the defendants.
The parties agree that the circumstances under which that offer was made
were such that the offer could be withdrawn at any time before acceptance.
Issue:
WON there is a valid contract perfected between the parties.

Held:
Under article 1262, paragraph 2, of the Civil Code, an acceptance by letter
does not have any effect until it comes to the knowledge of the offerer.
Therefore, before he learns of the acceptance, the latter is not yet bound by
it and can still withdraw the offer. Consequently, when Mr. Arias wrote Mr.
Laudico, withdrawing the offer, he had the right to do so, inasmuch as he
had not yet receive notice of the acceptance. And when the notice of the
acceptance was received by Mr. Arias, it no longer had any effect, as the
offer was not then in existence, the same having already been withdrawn.
There was no meeting of the minds, through offer and acceptance, which is
the essence of the contract. While there was an offer, there was no
acceptance, and when the latter was made and could have a binding effect,
the offer was then lacking. Though both the offer and the acceptance
existed, they did not meet to give birth to a contract.
When Arias received the letter of acceptance, his letter of revocation had
already been received. The latter was sent through a messenger at 11.25 in
the morning directly to the office of Laudico and should have been received
immediately on that same morning, or at least, before Arias received the
letter of acceptance. On this point we do not give any credence to the
testimony of Laudico that he received this letter of revocation at 3.30 in the
afternoon of that day. Laudico is interested in destroying the effect of this
revocation so that the acceptance may be valid, which is the principal
ground of his complaint.
With regard to contracts between absent persons there are two principal
theories, to wit, one holding that an acceptance by letter of an offer has no
effect until it comes to the knowledge of the offerer, and the other
maintaining that it is effective from the time the letter is sent.
The judgment appealed from is reversed and the defendants are absolved
from the complaint, without special finding as to costs. So ordered.