sale, the spouses discovered that the lot was already titled

in the name of JLT.

The trial court held that Don Julian remained the owner of
the property that the lot was still subject to future

[exclusively

CA reversed the decision arguing that the transfer of

ownership to the wife and children of the second marriage
became automatically operative upon the approval of the
Compromise Agreement, thereby vesting on them the right
to validly dispose of Lot No. 63. Rightful owners: spouses
Balansag and Cadayday

SC agreed with the CA that the partition of the properties

was validly made. Because while Article 1347 of the New
Civil Code provides the exception to things that can be the
ract may be entered into
upon future inheritance except in cases expressly

the exception (partition inter vivos).

However, the partition will be effective only after the

death of owner of the estate it is revocable at any time
during his lifetime, and does not operate as a conveyance
title until his death. Therefore, Don Julian remained the
owner of the property and he had the right to transfer the
lot to JLT.

PLOT TWIST: the Certificate of Title obtained by JLT is

marred by grave irregularity and was declared NULL and
VOID by the SC.

WINNER: spouses Balansag and Cadayday.

53 Liguez vs CA
Salvador Lopez (DOM) wanted to have sexual
relations with appellant Conchita Liguez (16 years old), and
her parents would not allow Lopez to live with her unless
he first donated the land in question.
After the donation, Conchita and Salvador lived together in
the house that was built upon the latter's orders, until
Lopez was killed on July 1943, by some guerrillas who
believed him to be pro-
The party at fault cannot claim the
illegality of the contract based on an
illicit causa.
Article 1412. If the act in which the unlawful or
forbidden cause consists does not constitute a
criminal offense, the following rules shall be
observed:
(1) When the fault is on the part of both contracting
parties, neither may recover what he has given by
virtue of the contract, or demand the performance
of the other's undertaking;
 It was also ascertained by the Court of Appeals that the
donated land originally belonged to the conjugal
partnership of his legal wife, Maria Ngo.
Maria now seeks nullity of the donation because the
cohabitation was an implied condition to the donation, and
being unlawful, necessarily tainted the donation itself.
The Court held that the donation was not null and void
despite the illicit causa. This was due to several reasons.
Liguez was a minor at the time the contract was entered
into, and it was very possible that she was not aware of the
terms and conditions at the time. Also, illegality is not
presumed and must be proven. However, Lopez, being the
party at fault, is barred from setting up the plea that the
donation is illegal, according to Art. 1412. Likewise, his
heirs are similarly barred, since they can have no better
rights than he himself. But since the subject property is
part of the conjugal property of the spouses, it cannot be
donated in whole to the prejudice of the heirs. Thus, the
donation is not void in its entirety, but only insofar as it
prejudices the the interest of the wife and the compulsory
legitime of the children.
54 Carantes v CA Mateo Carantes, owner of Lot 44 in Loakan, Baguio City,
died and left it to his 6 children (1 is dead so his children).
The government expropriated Lot 44-A for the construction
of Loakan Airport but still needed 44-B & 44-C. The heirs
(Mateo's children and the deceased child's children)
executed an Assignment of Right to Inheritance for this and
Maximino Carantes (Mateo's son) was appointed judicial
administrator of lots. Maximino sold and transferred 44-B
and 44-C to the government but the remaining lots (44-D &
44-E) were issued in Maximino's name. The other heirs
sued him claiming fraud since they were made to believe
Maximino would only handle the transfer of lots to the
government. RTC: Deed of assignment was registered in
1940. This is constructive notice and thus is the date of
discovery of fraud. Action based on fraud prescribes in 4
years from discovery and they filed in 1985. Action has
prescribed. CA: Reveresed RTC. Deed of assignment is void
and inexistent because there is almost no consideration
(only P 1.00) and action for declaration of inexistence of
contract does not prescribe. SC: Action has prescribed
(fraud).
It is TOTAL ABSENCE of cause or
consideration that renders a contract
absolutely void and inexistent. In the
case at bar, consideration was not
absent (P 1.00)
(2) When only one of the contracting parties is at
fault, he cannot recover what he has given by
reason of the contract, or ask for the fulfillment of
what has been promised him. The other, who is not
at fault, may demand the return of what he has
given without any obligation to comply his promise.
[Article 1409: Contracts which are absolutely
simulated or fictitious are inexistent and void from
the beginning.] The basic characteristic of
simulation is the fact that the apparent contract is
not really desired or intended to produce legal
effects or in any way alter the juridical situation of
the parties.
Respo
Inheritance"" is void ab initio and inexistent on the
grounds that real consent was wanting and the
consideration of P1.00 is so shocking to the
conscience that there was in fact no consideration.
SC: The CA's action may not be considered as one to
declare the inexistence of a contract for lack of
consideration. It is total absence of cause or
consideration that renders a contract absolutely
void and inexistent. In the case at bar consideration
was not absent. The sum of P1.00 appears in the
document as one of the considerations for the
assignment of inheritance. In addition, the
document recites that the decedent Mateo

55 Sps Buenaventura et al Respondent-parents executed deeds of sale in favor
v CA respondent-children. Petitioners (siblings w/ respondent so
heirs din of the former) assails the deeds of sale claiming
that they are null and void because 1) the respondent-
children did not actually pay, hence there is lack of
consideration, and 2) assuming that there is consideration,
the same is grossly inadequate as to invalidate them. For
conspiracy designed to unjustly deprive the rest of the
Court Held:
First, petitioners have no legal right to properties in litis.
There rights are merely inchoate and vests only upon death
of their parents. (Art 777) Second, petitioners failed to
prove lack of consideration. In this case, petitioners failed
to show that the prices were simulated, magnified by their
capacity. Moreover, there was consideration as seen from
the Deed of Sales presented (cost of the lots). Third,
petitioners failed to prove fraud, mistake or undue
influence upon their parents (Art 1355) or that there was
defect in the consent, or that the parties really intended a
donation or some other act or contract (Art 1470). There is
no requirement that the price be equal to the exact value
of the subject matter of sale.
56 Resuena vs CA Juanito Borromeo, Sr. is the co-owner and overseer of
certain parcels of land located in Cebu, designated as Lots
Nos. 2587 and 2592 of the Talisay-Manglanilla Estate. He
owns 6/8 of Lot No. 2587 while the Sps. Bascon owned the
remaining 2/8. Lot No. 2592 is owned in common by
Borromeo and the heirs of one Maneja. However, the
proportion of their undivided shares was not determined a
quo.
The Resuenas and Garay resided Lot No. 2587, allegedly
under the acquiescence of the Bascons, while Rosario
occupied a portion of the other lot, allegedly with the
permission of the heirs of Nicolas Maneja, one of the
original co-owners of Lot No. 2587. (However, Borromeo
claimed that they have occupied portions of the subject
property by virtue of his own liberality.)
A contract of sale becomes a binding
and valid contract upon the meeting
of the minds as to price. If there is a
meeting of the minds as to the price,
the contract of sale is valid, despite
the manner of payment, or even the
breach of that manner of payment.
Failure to pay 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.
There is no requirement that the
price be equal to the exact value of
the subject matter of sale.
Acts which have for their object the
creation, transmission, modification
or extinguishment of real rights over
immovable property must appear in
a public document to be effective as
against third persons.
Any one of the co-owners may bring
an action in ejectment if it is for the
benefit of all.
Carantes had, during his lifetime, expressed to the
signatories to the contract that the property
subject-matter thereof rightly and exclusively
belonged to the petitioner Maximino Carantes. This
acknowledgment by the signatories definitely
constitutes valuable consideration for the contract.
Art. 1352. Contracts without cause, or with
unlawful cause, produce no effect whatever. The
cause is unlawful if it is contrary to law, morals,
good customs, public order or public policy.
Art. 1355. Except in cases specified by law, lesion or
inadequacy of cause shall not invalidate a contract,
unless there has been fraud, mistake or undue
influence.
Art. 1470. Gross inadequacy of price does not affect
a contract of sale, except as may indicate a defect in
the consent, or that the parties really intended a
donation or some other act or contract.
Art. 1471. If the price is simulated, the sale is void,
but the act may be shown to have been in reality a
donation, or some other act or contract.
CC 1358. The following must appear in a public
document:
1) Acts which have for their object the creation,
transmission, modification or extinguishment of
real rights over immovable property xxx
Assuming that there was any verbal agreement
between petitioners and any of the owners of the
subject lots, 1358 grants a coercive power to the
parties by which they can reciprocally compel the
documentation of the agreement. The absence of
any document or any occupancy right of petitioners
is a negation of their claim that they were allowed
to stay until further notice.
CC 487. Any one of the co-owners may bring an
action in ejectment.
 Borromeo developed portions of the lots into Borromeo
Beach Resort. In his desire to expand and extend the
facilities of the resort, respondent demanded that
petitioners vacate the property. Petitioners, however,
refused to vacate their homes. Thus, Borromeo filed a
Complaint for ejectment with the MTC against the
petitioners. MTC ruled in favor of petitioners (no partition
yet) but RTC reversed, (applied Art. 487) and the CA
affirmed the RTC decision.
57 Garcia vs. Bisaya "Paulino Garcia bought land from Maria Bisaya in Mindoro
(1938), then it was discovered that this land actually
belonged to someone else (who was not selling it).
Garcia filed case for reformation but this was denied by the
court because Reformation is not the proper remedy but
should be annulment of the sale.
Reformation is not possible because the sale itself concerns
land belonging to someone else, so Garcia will still not
acquire any rights over the land."
58 Bentir v Leande Leyte Gulf Traders inc. has filed a complaint for
reformation of instrument, alleging that it entered into a
contract of lease of a parcel of land with Bentir for a period
of 20 years. According to Traders inc., the lease was
extended for another 4 years. However, Bentir sold the
leased premises to petitioner spouses Samuel Pormada
and Charito Pormada. The corporation questioned the sale
alleging that it had a right of first refusal on the ground
that its lawyer inadvertently omitted to incorporate in the
contract of lease executed the verbal agreement or
understanding between the parties that in the event
petitioner Bentir leases or sells the lot after the expiration
of the lease, respondent corporation has the right to equal
the highest offer. SC ruled that prescription has barred the
reformation complaint of respondent.
Reformation of instruments are to
enable some party to assert rights
under them as reformed, if this
conforms with what was truly agreed
or intended by the parties.
Prescription is intended to suppress
stale and fraudulent claims arising
from transactions like the one at bar
which facts had become so obscure
from the lapse of time or defective
memory.
When the action is brought by one co-owner for the
benefit of all, a favorable decision will benefit them;
but an adverse decision cannot prejudice their
rights. Respondent's action for ejectment was for
the benefit of all since petitioners were not able to
prove that they are authorized to occupy the same.
There was no writing presented to evidence any
claim of ownership or right to occupancy to the
subject properties (no lease contract).
Persons who occupy the land of another at the
latter's tolerance or permission, without any
contract between them, are necessarily bound by
an implied promise that they will vacate the same
upon demand, failing in which a summary action for
ejectment is the proper remedy against them.
"Art 1359, Civil Code says that if mistake, fraud,
inequitable conduct, or accident has PREVENTED a
meeting of minds of the parties, the proper remedy
is NOT reformation of the instrument but
annulment of the contract.
Reformation is proper remedy only to correct a
contract wherein there IS a meeting of minds but
that the true intention of the contract was not
expressed in the instrument.
The sale itself is not possible because Bisaya does
not own the land (there is NO meeting of minds), so
Garcia and Bisaya cannot Reform the instrument,
but should have it annulled."
"Art. 1144. The following actions must be brought
within 10 years from the time the right of action
accrues: (1) upon a written contract; 2) upon an
obligation created by law; 3) upon judgment.
--> The prescriptive period of 10 years provided for
in Art. 1144 applies by operation of law, not by the
will of the parties. Therefore, the right of action for
reformation accrued from the date of execution of
the contract of lease in 1968."
59 Quiros and Villegas were seeking to recover from their
uncle Arjona their lawful share of the inheritance from
their late grandmother. An amicable settlement was
reached between the parties. Arjona executed a document
(Paknaan agreement in Pangasinan dialect) that purports
to convey a parcel of land consisting of more or less 1
hectare to petitioners Quiros and Villegas. Another
Paknaan, prepared on the same date, and executed by one
Jose Banda who signified his intention to vacate the parcel
of land he was tilling for and in behalf of the Arjona family.
On ocular inspection however, the municipal trial court
found that the land referred to in the second Paknaan was
different from the land being occupied by petitioners.
Hence, no writ of execution could be issued for failure to
determine with certainty what parcel of land respondent
intended to convey.
The Court held that the inability of the municipal court to
identify the exact location of the inherited property did not
negate the principal object of the contract. This is an error
occasioned by the failure of the parties to describe the
subject property, which is correctible by reformation and
does not indicate the absence of the principal object as to
render the contract void. The object is determinable as to
its kind, i.e. 1 hectare of land as inheritance, and can be
determined without need of a new contract or agreement.
60 Atillano v Atillano Eulogio Atilano I owned a piece of land and subsequently
subdivided it into 5 lots, from letters A to E. He
subsequently sold lot E to his brother Eulogio Atilano II as
well as the other lots, retaining for himself lot A. Eulogio II
wanted to subdivide his lot, and after having it resurveyed
found out that the title he owned describes lot A instead
thus his heirs filed a petition to switch ownership over lots
switch). The SC held that this was unnecessary because the
intent of the brothers was exactly that. They retained
possession of their respective portions Eulogio I built his
house on his lot and continue to reside therein. The
designation of lots was simply a mistake in the drafting of
document and did not vitiate the consent of the parties nor
affect the validity of the contract.
61 Carantes v. CA Mateo Carantes had 5 lots (Lot 44A-E) wherein Lot44A was
expropriated by the Government and Lots 44B and C where
purchased by the latter as well. When Mateo died,
Maximino, the estate's administrator and one of Mateo's
sons, executed a deed denominated "Assignment of Right
to Inheritance" together with his siblings, Bilad, Sianang,
Lauro and Crispino, and the heirs of Apung Carantes
When the terms of an agreement
have been reduced to writing, it is
considered as containing all the
terms agreed upon and there can be,
between the parties and their
successors in interest, no evidence of
such terms other than the contents
of the written agreement, except
when it fails to express the true
intent and agreement of the parties
thereto, in which case, one of the
parties may bring an action for the
reformation of the instrument to the
end that such true intention may be
expressed.
**Here, both parties acknowledge
that petitioners are entitled to their
inheritance.
Reformation of the instrument is a
remedy available when, there having
been a meeting of the minds of the
parties, their true intention is not
expressed in the instrument by
reason of mistake, fraud, etc.
"Article 1390 of the new Civil code
provides that a contract
""where the consent is vitiated by
mistake, violence,
intimidation, undue influence or
fraud,"" is voidable or
Article 1359 of the Civil Code provides:
When, there having been a meeting of the minds of
the parties to a contract, their true intention is not
expressed in the instrument purporting to embody
the agreement by reason of mistake, fraud,
inequitable conduct or accident, one of the parties
may ask for the reformation of the instrument to
the end that such true intention may be expressed.
If mistake, fraud, inequitable conduct, or accident
has prevented a meeting of the minds of the
parties, the proper remedy is not reformation of
the instrument but annulment of the contract.
** Reformation is a remedy in equity whereby a
written instrument is made or construed so as to
express or conform to the real intention of the
parties where some error or mistake has been
committed. In granting reformation, the remedy in
equity is not making a new contract for the parties,
but establishing and perpetuating the real contract
between the parties which, under the technical
rules of law, could not be enforced but for such
reformation.
In this case there is no need to reform the deed of
sale since the parties retained possession of their
respective properties in conformity to the real
intention and all they should do is to execute
mutual deeds of conveyance.
Article 1390 and 1359, CC.
 (another sibling). The said deed assigned their rights to
their inheritance to Maximino for a consideration of P1.00
and also contained a recital that private respondents have
agreed to cede their rights to inherit the remaining lots to
Maximino, saying that this is with respect to Mateo having
verbally conveyed the remaining lots to Maximino alone,
and that these belonged to the latter exclusively. The heirs
of Mateo then petitioned for the cancellation of the
Original Certificate of Title of Lot No.44 and had it replaced
with Transfer Certificate of Title 2533 declaring the five
children of Mateo and the children of Apung Carantes
(representing their deceased father) as co-owners of Lot
No. 44. However, when Maximino registered the deed, it
only declared him as the sole owner of the lot. The present
action is one to annul the contract entitled "Assignment of
Right to Inheritance" on the ground of fraud because they
were made to believe that it merely authorized Maximino
to convey portions of Lot No. 44 to the Government in
their behalf to minimize expenses and facilitate the
transaction; and that it was only on February 18, 1958,
when the plaintiffs secured a copy of the deed, that they
came to know that the same assigned in favor of Maximino
their rights to inheritance from Mateo Carantes.
62 Sarming et al v Dy Lot 4163 was sub-divided between two siblings (Jose and
Silveria) though was solely registered under Silveria's
name. Grandchildren of the the deceased Jose sold their
part of the land, with Silveria's consent and asked that a
TCT was issued - however, Silveria gave them a title for
another lot (lot 5734). Believing that it was the true title,
Jose's grandchildren cancelled the the title for lot 5734
(they knew what the lot looked like but they didn't know
the number of the OCT) and had a TCT issued to them.
They then sold it to Delfino (the Dys are Delfino's
successors in interest) who then found that the wrong title
was issued to Jose's heirs - Silveria refused to give them
the title for their lot saying that it was hers and that the
respondents had illegally taken over the land. RTC, CA and
SC ruled in favor of the Dys et al as the intention of the
contract was for lot 4163 (as evidenced by SIlveria also
selling to Delfino her coconut trees which were on the half
of JOse)
63 Borromeo v CA Jose Villamor, a lumber distributor for Miller (an agent of
the Insular Lumber Company), borrowed money from his
friend Canuto Borromeo to satisfy a debt Villamor had with
Miller. This was secured by a mortgage on Villamor's house
and land. After the liquidation of the debt (P7.2k), Villamor
annullable. Even article 1359, which
deals on reformation
of instruments, provides in its
paragraph 2 that ""If
mistake, fraud, inequitable conduct,
or accident has
prevented a meeting of the minds of
the parties, the proper
remedy is not reformation of the
instrument but
annulment of the contract."" When
the consent to a contract was
fraudulently obtained, the contract is
voidable. Fraud
or deceit does not render a contract
void ab initio, and can
only be a ground for rendering the
contract voidable or
annullable pursuant to article 1390
of the new Civil Code by a proper
action in court. The present action
being one to annul a contract on the
ground of fraud, its prescriptive
period is four years from the time of
the discovery of the fraud."
"Reformation is the remedy in equity "Art. 1359. When, there having been a meeting of
by means of which a written the minds of the parties to a contract, their true
instrument is made or construed as intention is not expressed in the instrument
to express or conform to the real purporting to embody the agreement, by reason of
intention of the parties. When the mistake, fraud, inequitable conduct or accident,
designation of the lot in the deed of one of the parties may ask for the reformation of
sale was a mistake in the preparation the instrument to the end that such true intention
of the document (4163 was meant to may be expressed.
be conveyed not 5734) reformation If mistake, fraud, inequitable conduct, or accident
of the instrument is proper (so that has prevented a meeting of the minds of the
the intended lot will be given to parties, the proper remedy is not reformation of
them) the instrument but annulment of the contract.
How to prove intent: ""subsequent
and contemporaneous acts of the Art. 1369. The procedure for the reformation of
parties as well as evidentiary facts (in instrument shall be governed by rules of court to be
this case, Silveria's selling of the promulgated by the Supreme Court."
coconut trees as well as an on-the-
spot investigation)"
In case of conflict, the intention of N/A
the parties shall prevail over the
letter of the law.
 signed a promissory note "to pay his indebtedness even
after the lapse of 10 years," "as soon as [he has] the
money." Borromeo verbally demanded compliance from
time to time, but did not file a complaint for 10 years.The
SC ruled that the waiver of prescription is effective, based
on the principle that in case of conflict, the intention of the
parties shall prevail over the letter of the law. Borromeo
could still effectively file an action for compliance even
after 10 years have passed.
64 Kasilag v Rodriguez "Emiliana Ambrosio and Kasilag entered into two contracts: The cardinal rule in the "CC 1370. If the terms of a contract are clear and
interpretation of contracts is to the leave no doubt upon the intention of the
1. Contract whereby Kasilag will lend money to Ambrosio, effect that the intention of the contracting parties, the literal meaning of its
with a security of the mortgage of the improvements over contracting parties should always stipulations shall control.
a parcel of land owned by Ambrosio prevail because their will has the
force of law between them If the words appear to be contrary to the evident
2. Verbal contract whereby Ambrosio will convey to Kasilag intention of the parties, their contemporaneous
the possession of the land on the condition that he would and subsequent acts shall be principally
not collect the interest on the loan considered."

Ambrosio failed to pay the loan, hence possession of the

land was transferred to Kasilag. The respondents, heirs of
Ambrosio, filed a case for recovery, claiming that the first
contract was an absolute deed of sale and was therefore
void. They also claimed that the second contract was a
contract of antichresis prohibited by law.

Court held that the cardinal rule in the interpretation of

contracts is to the effect that the intention of the
contracting parties should always prevail because their will
has the force of law between them. In this case, the first
contract was a contract of mortgage (not a deed of
absolute sale) and was therefore valid. Second contract
was void for being a contract of antichresis."
65 Santi v CA "Esperanza Jose owns a parcel of land, portion of which, "Articles 1370 of the Civil Code "Art. 1370. If the terms of a contract are clear and
she leased to Vitan for a period of 20 years ""automatically provides that when the terms and leave no doubt upon the intention of the
extended"" for another 20 years. Vitan however sold all stipulations embodied in the contracting parties, the literal meaning of its
their leasehold rights to Augusto Reyes. Subsequently, a contract are clear ad leave no room stipulations shall control.
new contract of lease was entered by Esperanza and Reyes for doubt, such should be read in a
being ""extendable"" for another period of 20 years. In the literal sense and that there is *extendable is not synonymous to being
interim, Esperanza sold all her rights to the parcel of land absolutely no reason to construe the automatically extended."
to Vicente Santi (petitioner). same in another meaning.

When the lease expired, Santi wrote Reyes informing him ** this is the case for the first lease
of the termination of the lease and demanding turnover of contract between Esperanza and
the property. Reyes however refused contending that the Vitan. However, the same could not
lease automatically extended for another 20 years" be said in the contract between
Reyes and Esperanza.

66 Rapanut vs CA "Susan Flunker prepared a Deed of Conditional Sale with
Mortgage for the sale of a parcel of land in Pasay for
P42,840, payable in installments (500 not later than the 5th
day of the month, and 1,000 every June 30 and December
31 of the year), with 10% interest per annum on the
remaining balance until the full amount is paid. On April
1986, she executed a supplemental agreement which
states that she will sell the portion of her lots for P37,485,
with an interest rate of 10% per annum on the remaining
balance until the full amount is paid. The sale was payable
in monthly installments of P500, to be paid every 5th of the
month without need of demand starting January 1986
Rapanut had been making the P500 monthly installment
payments until he received a letter on February 13, 1990
informing him that for his failure to pay monthly
installments + 10% interest rate on the balance, the
DCSwM and SA were rescinded ""as of receipt hereof,""
and that the payments were considered as rentals. The
letter demanded that the petitioner should vacate the
premises within 15 days from receipt thereof.
**the provision that the lease is
""extendable"" is clear that the
lessor's intention is not to
automatically extend the lease
contracts but to give her time to
ponder and think whether to extend
the lease If she decides to do so,
then a new contract shal be entered
into between the lessor and the
lessee for a term of another 20
years."
To ascertain the intent of the parties, "CC 1371. The interpretation of the provision in
the Court should look at their question having been put in
contemporaneous and subsequent issue, the Court is constrained to determine which
acts. (CC 1371) interpretation
is more in accord with the intent of the parties
CC 1253. In a contract involving installment
payments with interest chargeable against the
remaining balance of the obligation, it is the duty of
the creditor to inform the debtor of the amount of
interest that falls due and that he is applying the
installment payments to cover said
interest.
"

Flunker filed a complaint against Rapanut for rescission of

the contracts. TC ruled in favor of Flunker and ordered to
pay damages and attorney's fees. CA affirmed but deleted
award for actual damages and attorney's fees. SC ruled
that Rapanut did not fail to pay the installments finding
Rapanut's interpretation more tenable.

Flunker's interpretation of the contract: P500 applies to

unpaid accrued interest first. The 10% interest is to be paid
every year. (Basis: Art. 1253)

Rapanut's interpretaion: P500 applies to payment of

principal + accrued interest, the 10% interest applies to the
 remaining balance and he keeps paying P500 until principal
+ interest is fully paid. (Basis: Contract does not specify
when to pay the interest, also there was no mention of no.
of years to pay installments)"
67 Oil and Natural Gas Petitioner Oil and Natural Gas Corporation (ONC), an Indian
Corporation vs CA corporation, contracted with private respondent Pacific
(1998) Cement, a private Philippine corporation, to supply 4,300
metric tons of oil well cement for $477K. The cement was
loaded in a ship on Surigao City but due to a dispute
between the shipowner and Pacific, the cargo did not reach
India. Since ONC already paid Pacific, it demanded delivery.
Negotiations ensued an ONC eventually agreed that Pacific
However,
upon inspection, it was discovered that the cement
delivered failed to conform to the specification. ONC then
referred its claim to an arbiter (in India) following Clause 16
in their contract. The arbiter recommended Pacific to
reimburse ONC which was affirmed by an Indian court.
When Pacific failed to pay again, ONC pursued their claim
in an RTC in the Philippines. The issue in this case is WON
court resolved the issue by reconciling Clause 15 and
Clause 16 of the contract and concluded that the judgment
of the Indian court is valid. Pacific is ordered to pay ONC in
the amount expressed in the foreign judgment.
68 Sps. Rigor vs Sps. Rigor obtained a loan from Consolidated Orix and
Consolidated Orix provided in the promissory note that default in paying any
installment renders the entire unpaid amount due and
payable. Petitioners also executed a deed of chattel
mortgage to secure payment of the loan. Also in the
promissory note: "x x x in case of litigation arising out of
the transaction that gave rise to this contract, complete
jurisdiction is given the proper court of the city of Makati
or any proper court within the province of Rizal, or any
court in the city, or province where the holder/mortgagee
has a branch office, waiving for this purpose any proper
venue." The SC held that the rules on venue on the deed of
chattel mortgage clarified the one on the promissory note.
69 Chua v CA Encarnacion Valdes-Choy advertised for sale her
paraphernal house and lot. Tomas Chua responded to said
advertisement and they agreed on the purchase price of
Php10.8M. Chua tendered Php100K and further agreed
that the balance will be payable on/ before July 15, 1989.
Failure to pay the balance will forfeit the earnest money.
On July 13, Valdes-Choy and Chua executed 2 Deeds of Sale
When a contract stipulations admit
several meanings, they must be
construed such that all provisions are
effective.
As a general rule, all personal actions
may be commenced and tried where
the plaintiff or any of the principal
plaintiffs resides, or where the
defendant or any of the principal
defendants resides, at the election of
the plaintiff. However, by written
agreement of the parties, the venue
of an action may be changed or
transferred from one place to
another.
In the interpretation of the
ambiguities of a contract, those
conditions/stipulations that do not
have basis in the law or from the
specific contract involved cannot be
considered customary and therefore
should admit of several meanings, it shall be
understood as bearing that import which is most
tions of a
contract shall be interpreted together, attributing
the doubtful ones that sense which may result from
"
"Art. 1378. The chattel mortgage is an accessory
contract to the loan obligation as embodied in the
promissory note. The provisions of an accessory
contract such as a surety bond must be read in its
entirety and together with the principal contract
between the parties. The provisions must be
construed together to arrive at their true meaning.
Private respondent explained that its older
standard promissory notes confined venue in
Makati City where it had its main office. After it
opened a branch office in Dagupan City, private
respondent made corrections in the deed of chattel
mortgage, but due to oversight,
failed to make the corresponding corrections in the
promissory
notes."
"CC Art. 1376. The usage or custom of the place
shall be borne in mind in the interpretation of the
ambiguities of a contract, and shall fill the omission
of stipulations which are ordinarily established.
Customarily, in the absence of a contrary
agreement, the submission by an individual seller to
(8M for the house and lot; 2.8M for movable properties). stipulations which are ordinarily the buyer of the ff. papers would complete the sale
They computed the Capital Gains Tax (CGT) amounting to
485K. Chua agreed to pay the CGT, the amount of which Torrens title, (2) signed deed of absolute sale, (3)
shall be deducted from the balance. Chua then showed to tax declaration, and (4) latest realty tax receipt.
Valdes-
remaining balance but did not give the same to Valdes- Valdes-Choy was ready, able and willing to submit
Choy saying that the property must first be registered in his to Chua all the papers that customarily would
name. This angered Valdes-Choy who tore up the Deeds of
Sale claiming that this was not part of the agreement. On a new TCT first be issued in his name) is not
the same day, Chua confirmed his stop payment order for customary in a sale of real estate. Such a condition,
the MC of Php480K, but according to PBCom AVP, said MC not specified in the contract to sell as evidenced by
was nevertheless honoured because Chua subsequently the Receipt, cannot be considered part of the
verbally advised the Bank to lift the stop payment order.
Come the deadline for payment, Valdes-Choy suggested to age or custom.
Chua (through her counsel) to deposit in an escrow
account the balance of 10.215M. Upon such deposit, the
Note: Madaming provisions na namention sa case.
seller will be willing to cause the issuance of a new TCT in
This one's the focus based sa syllabus. I suggest you
read the full case. :)
TCT is eventually transferred to the buyer before she is
fully paid. Chua instead filed a complaint for specific
performance to consummate the sale. SC ruled in favor of
Valdes-Choy. In a contract to sell, the obligation of the
seller to sell becomes demandable only upon the
happening of the suspensive condition (the full payment of
the purchase price by Chua). Chua refused to pay before
the property is registered in his name, therefore, no
obligation to sell has arisen.