Marin vs. Adil GR No.

47986
Facts:
The Armada brothers, Manuel O. Armada and Ariston P. Armada, were expecting to inherit some
lots from their uncle, Proceso Pacificar. Mrs. Marin had hereditary rights in the estates of her
parents. In 1963, when the deed of exchange was executed, the estate of Proceso Pacificar, in
which the Armadas expected to inherit a part, had been adjudicated to Soledad PronidoElevencionado, a sister of Marin and first cousin also of the Armadas. Soledad claimed to be the
sole heir of Proceso. So, the Armadas and the other heirs had to sue Soledad.
The protracted litigation ended in a compromise in 1976 when the Armadas were awarded Lots
906-A-2 and 906-A-3. Marin waived, renounced and quitclaimed her share in her parents estate
in favour of her another sister Aurora. She cannot anymore fulfil her obligations in her signed
deed of exchange with the Armadas. Marin chose to forget the deed. Her conduct showed that
she considered herself not bound by it. Five years after that deed she agreed to convey to her
sister, Aurora Provido-Collado, her interest in two lots in January in payment of her obligation.
The Armadas filed the instant rescissory action against Mrs. Marin.
Issue:
Did Armadas action prescribe?
Rulings:
the trial court's judgment and the order of execution pending appeal are set aside. The deed of exchange
is hereby declared void and inexistent. The annotation thereof on TCT Nos. 10833 and 10834 should be
cancelled. The Armadas' claim for damages and attorney's fees is denied. Aquilina Provido-Mrin's
counterclaim is dismissed. No costs.

MARIN V. ADIL G.R. NO. 47986

Facts:
The Armadas were expecting to inherit some lots from their uncle. Marin had hereditary rights in the
estates of her parents. A deed of exchange was executed wherein it was stipulated that both parties
acknowledge that the exchange operates to their individual and mutual benefit and advantage, for the
reason that the property being ceded, transferred, conveyed and unclaimed by one party to the other is
situated in the place where either is a resident resulting in better administration of the properties. But the
expected land was adjudicated to Soledad, sister of Marin. So, the Armadas and other heirs sued Soledad
for claiming to be the sole heir of their uncle, but ended in a compromise where the Armadas were
awarded two lots. Marin waived, renounced and quitclaimed her share in her parents estate in favour of

her another sister Aurora. She cannot anymore fulfil her obligations in her signed deed of exchange with
the Armadas. The Armadas filed a rescisorry action against Marin.
Issue:
Did Armadas action prescribe?
Held:
No. The action to declare contracts void and inexistent does not prescribe. It is evident from the deed of
exchange that the intention of the parties relative to the lots cannot be definitely ascertained. This
circumstance renders the exchange void.

DEC 21 2011

OBLIGATIONS AND CONTRACTS

RONGAVILLA V. CA G.R. NO. 83974

Facts:
The Dela Cruz sisters were the aunts of Dolores Rongavilla. They borrowed P2,000 from the Rongavillas
to have their rooftop repaired. Later, petitioners went back to their aunts to have them sign a contract.
Taking advantage of their lack of education, the sisters were made to believe that such document,
typewritten in English, was just for the acknowledgment of their debt. After four years, petitioners asked
their aunts to vacate the land subject to litigation claiming that she and her husband were the new owners.
After verifying with the Registry of Deeds, the aunts were surprised that what they have signed was
actually a deed of sale. Their land title was cancelled and the ownership was transferred to their
nephews. The land was mortgaged with the Cavite Development Bank.
Issue:
Was the deed of sale void?
Held:
Yes. While petitioners claimed they were regularly paying taxes on the land in question, they had no
second thoughts stating at the trial and on appeal that they had resorted to doctoring the price stated in
the disputed Deed of Sale, allegedly to save on taxes. While it is true that public documents are presumed

genuine and regular under the Rules of Court, this presumption is a rebuttable presumption which may be
overcome by clear, strong and convincing evidence.

DEC 21 2011

OBLIGATIONS AND CONTRACTS

CRISTOBAL V. GOMEZ G.R. NO. 27014

Facts:
Epifanio sold a property with pacto de retro to Yangco. It was stipulated that the property is redeemable
within five years. When the period expired, Yangco extended it. In order to redeem, Epifanio asked Banas
for a loan. Banas agreed, with the condition that Marcelino and Telesfora be responsible for the loan. The
two entered into a private partnership in participation which stipulated that the property shall be returned
to Epifanio as soon as the capital employed have been covered. Epifanio died. He left Paulina and their
children. Marcelino acquired exclusive rights over the property when Telesfora conveyed her interest to
him. Marcelino sold the property to Banas, with pacto de retro, redeemable within five years. He
redeemed it from Banas. Marcelino submitted a notarial document wherein Epifanio certifies that
Marcelino had requested him to draw up a notarial act showing the properties which Marcelino was known
to be the true owner. Marcelino relies upon this instrument as proving title in him, contending that Epifanio
and his successors are estopped from claiming said lot.
Issue:
Are the heirs of Epifanio estopped from claiming the property?
Held:
No. Estoppel may not be invoked by a person party to the collusion, by reason that he could not have
been misled. The document executed by Epifanio was merely laying the basis of a scheme to defeat
Yangcos rights under his contract of purchase of 1891, or to defeat Epifanios other creditors.

DEC 21 2011

OBLIGATIONS AND CONTRACTS

DBP V. CA G.R. NO. 28774

Facts:

DBP bought 91,188.30 square meters of land, consisting of 159 lots, in the proposed Diliman Estate
Subdivision of the PHHC. However, the sale of the lots to DBP, Lots 2 and 4, which form part of said 159
lots, were still sold by PHHC to the spouses Nicandro, for which 2 deeds of sale were issued to them by
PHHC. Upon learning of PHHCs previous transaction with DBP, the spouses filed a complaint against
DBP and the PHHC to rescind the sale of Lots 2 and 4 by PHHC in favor of DBP. The CFI held that the
sale of Lots 2 and 4, to DBP is null and void, for being in violation of Section 13 of the DBP Charter.
Issue:
Do the spouses possess the legal personality to question the legality of the sale?
Held:
Yes. The spouses stand to be prejudiced by reason of their payment in full of the purchase price for the
same lots which had been sold to DBP by virtue of the transaction in question.The general rule is that the
action for the annulment of contracts can only be maintained by those who are bound either principally or
subsidiarily by virtue thereof. However, a person who is not obliged principally or subsidiarily in a contract
may exercise an action for nullity of the contract if he is prejudiced in his rights with respect to one of the
contracting parties, and can show the detriment which could positively result to him from the contract in
which he had no intervention.

DEC 21 2011

OBLIGATIONS AND CONTRACTS

GOLDENROD V CA G.R. NO. 126812

Facts:
Barretto owned parcels of land which were mortgaged to UCPB. Barretto failed to pay; the properties
were foreclosed. Goldenrod made an offer to Barretto that it would buy the properties and pay off the
remaining balance of Barrettos loan with UCPB. It paid Barretto 1 million pesos as part of the purchase
price. The remaining balance would be paid once Barretto had consolidated the titles. On the date that
Goldenrod was supposed to pay, Goldenrod asked for an extension. UCPB agreed. When the extension
date arrived, Goldenrod asked for another extension. UCPB refused. Barretto successfully consolidated
the titles. Goldenrod informed Barretto that it would not be able to push through with their agreement. It
asked Barretto to return the 1 million pesos. Barretto did not give in to Goldenrods rescission. Instead, it
sold the property that was part of their agreement to Asiaworld.

Issue:
Should Goldenrod be paid back the 1 million pesos?
Held:
Yes. Rescission creates the obligation to return the things which were the object of the contract together
with the fruits and interest. Barretto is obliged to pay Goldenrod back because 1) Goldenrod decided to
rescind the sale; 2) the transaction was called off and; 3) the property was sold to a third person. By virtue
of the extrajudicial rescission of the contract to sell by Goldenrod, without opposition from Barretto, who in
turn sold it to a third person, Barretto had the obligation to return the 1 million pesos plus legal interest
from the date it received the notice of rescission.