Daywalt v. Corp.

G.R. No. L-13505, 4 February 1919

FACTS:

Teoderica Endencia obligated herself to convey to Geo W. Daywalt a tract of land. The deed should
be executed as soon as the tittle of the land is perfected. There was a decree recognizing Teoderica
as the owner of land but the Torrens certificate was not issued until later. The parties met
immediately upon the entering of the decree and made a new contract.

There was a development of Teoderica’s land as the Torrens title was issued and in view of this
development she became reluctant to transfer the whole tract of land asserting that she never
intended to sell the large amount of land and that she was misinformed by the area of the land.

After the Torrens title was issued to Teoderica she gave it to the defendant company for safekeeping
in which the defendant did so. As Teodorica still retained possession of said property Father Sanz
entered into an arrangement with her whereby large numbers of cattle belonging to the defendant
corporation were pastured upon said land.

ISSUE:

Whether a person who is not a party to a contract for the sale of land makes himself liable for
damages to the vendee, beyond the value of the use and occupation, by colluding with the vendor
and maintaining him in the effort to resist an action for specific performance.

RULING:

The Supreme Court held that the members of the defendant’s corporation, in advising and prompting
Teodorica Endencia not to comply with the contract of sale, were actuated by improper and
malicious motives.

In a fair conclusion on this feature of the case is that father Juan Labarga and his associates
believed in good faith that the contract could not be enforced and that Teodorica would be wronged
if it should be carried into effect. Any advice or assistance which they may have given was,
therefore, prompted by no mean or improper motive.

In the case at bar, as Teodorica Endencia was the party directly bound by the contract, it is obvious
that the liability of the defendant corporation, even admitting that it has made itself coparticipant in
the breach of the contract, can in no even exceed hers.

This leads us to consider at this point the extent of the liability of Teodorica Endencia to the plaintiff
by reason of her failure to surrender the certificate of title and to place the plaintiff in possession

So Ping Bun v. CA
G.R. No. 120554, 21 September 1999
FACTS:

Tek Hua Trading Co, through its managing partner, So Pek Giok, entered into four (4) lease
agreements with lessor Dee C. Chuan & Sons Inc. (DCCSI) subject to a one-year term and with the
condition that should the lessee continue to occupy the premises after the term, the lease shall be
on a month-to-month basis. When the contracts expired, the parties did not renew the contracts, but
Tek Hua continued to occupy the premises. In 1976, Tek Hua Trading Co. was dissolved but later on
formed Tek Hua Enterprising Corp. So Pek Giok, managing partner of Tek Hua Trading, died in
1986. So Pek Gioks grandson, petitioner So Ping Bun, occupied the warehouse for his own textile
business, Trendsetter Marketing.

Lessor DCCSI sent letters to Tek Hua Enterprises stating their intention in increasing the rent and
enclosed therein were new lease contracts for signing. DCCSI warned that failure of the lessee to
accomplish the contracts shall be deemed a lack of interest on the lessees part and agreement to
the termination of the lease. Private respondents did not answer any of these letters. Still, the lease
contracts were not rescinded. Private respondent Tiong sent a letter to petitioner advising to vacate
all the stocks in Tek Hua Enterprising Corp. Warehouse and giving them 14 days to vacate the
premises but still petitioner refused to vacate. Petitioner requested formal contracts of the lease with
DCCSI in favor of Trendsetter Marketing. So Ping Bun claimed that after the death of his
grandfather, So Pek Giok, he had been occupying the premises for his textile business and
religiously paid rent. DCCSI acceded to petitioners request. The lease contracts in favor of
Trendsetter were executed. Now private respondents pressed for the nullification of the lease
contracts between DCCSI and petitioner.

ISSUE:

Whether or not So Ping Bun is guilty of tortous interference of a contract.

RULING:

Damage is the loss, hurt, or harm which results from injury, and damages are the recompense or
compensation awarded for the damage suffered. One becomes liable in an action for damages for a
nontrespassory invasion of anothers interest in the private use and enjoyment of asset if (a) the
other has property rights and privileges with respect to the use or enjoyment interfered with, (b) the
invasion is substantial, (c) the defendants conduct is a legal cause of the invasion, and (d) the
invasion is either intentional and unreasonable or unintentional and actionable under general
negligence rules.

The elements of tort interference are: (1) existence of a valid contract; (2) knowledge on the part of
the third person of the existence of a contract; and (3) interference of the third person is without legal
justification or excuse.

In the case before us, petitioners Trendsetter Marketing asked DCCSI to execute lease contracts in
its favor, and as a result, petitioner deprived the respondent corporation of the latters property right.
Clearly, the three elements of tort interference above-mentioned are present in the instant case.

As a general rule, a justification for interfering with the business relations of another exists where the
actors motive is to benefit himself. Such justification does not exist where his sole motive is to cause
harm to the other. Some authorities believe that it is not necessary that the interferers interest
outweigh that of the party whose rights are invaded, and that an individual acts under an economic
interest that is substantial, not merely de minimis, such that wrongful and malicious motives are
negatived, for he acts in self-protection. Moreover, a justification for protecting one’s financial
position should not be made to depend on a comparison of his economic interest in the subject
matter with that of others. It is sufficient if the impetus of his conduct lies in a proper business
interest rather than in wrongful motives

Where there was no malice in the interference of a contract, and the impulse behind ones conduct
lies in a proper business interest rather than in wrongful motives, a party cannot be a malicious
interferer. Where the alleged interferer is financially interested, and such interest motivates his
conduct, it cannot be said that he is an officious or malicious intermeddler. In the instant case, it is
clear that petitioner So Ping Bun prevailed upon DCCSI to lease the warehouse to his enterprise at
the expense of the respondent corporation. Though petitioner took interest in the property of the
respondent corporation and benefited from it, nothing on record imputes deliberate wrongful motives
or malice on him.

Section 1314 of the Civil Code categorically provides also that, Any third person who induces
another to violate his contract shall be liable for damages to the other contracting party. Petitioner
argues that damage is an essential element of tort interference, and since the trial court and the
appellate court ruled that private respondents were not entitled to actual, moral or exemplary
damages, it follows that he ought to be absolved of any liability, including attorneys fees.

It is true that the lower courts did not award damages, but this was only because the extent of
damages was not quantifiable. While we do not encourage tort interferers seeking their economic
interest to intrude into existing contracts at the expense of others, however, we find that the conduct
herein complained of did not transcend the limits forbidding an obligatory award for damages in the
absence of any malice. The business desire is there to make some gain to the detriment of the
contracting parties. Lack of malice, however, precludes damages. But it does not relieve petitioner of
the legal liability for entering into contracts and causing a breach of existing ones. The respondent
appellate court correctly confirmed the permanent injunction and nullification of the lease contracts
between DCCSI and Trendsetter Marketing, without awarding damages. The injunction saved the
respondents from further damage or injury caused by petitioners interference.

Jose Lagon v. CA and Lapuz

G.R. No. 119107, 18 March 2005

FACTS:

Petitioner Jose Lagon purchased from the estate of Bai Tonina Sepi, through an intestate court, two
parcels of land located at Tacurong, Sultan Kudarat. A few months after the sale, private respondent
Menandro Lapuz filed a complaint for torts and damages against petitioner before the Regional Trial
Court (RTC) of Sultan Kudarat.

Private respondent claimed that he entered into a contract of lease with the late Bai Tonina Sepi
Mengelen Guiabar over three parcels of land (the property) in Sultan Kudarat, Maguindanao beginning
1964. One of the provisions agreed upon was for private respondent to put up commercial buildings
which would, in turn, be leased to new tenants. The rentals to be paid by those tenants would answer
for the rent private respondent was obligated to pay Bai Tonina Sepi for the lease of the land. The
lease contract ended but since the construction of the commercial buildings had yet to be completed,
the lease contract was allegedly renewed.
When Bai Tonina Sepi died, private respondent started remitting his rent to the court-appointed
administrator of her estate. But when the administrator advised him to stop collecting rentals from the
tenants of the buildings he constructed, he discovered that petitioner, representing himself as the new
owner of the property, had been collecting rentals from the tenants. He thus filed a complaint against
the latter, accusing petitioner of inducing the heirs of Bai Tonina Sepi to sell the property to him,
thereby violating his leasehold rights over it.

In his answer to the complaint, petitioner denied that he induced the heirs of Bai Tonina to sell the
property to him, contending that the heirs were in dire need of money to pay off the obligations of the
deceased. He also denied interfering with private respondents leasehold rights as there was no lease
contract covering the property when he purchased it; that his personal investigation and inquiry
revealed no claims or encumbrances on the subject lots

ISSUE:

Whether or not the purchase by Lagon of the subject property, during the supposed existence of the
private respondent’s lease contract with the late Bai Tonina Sepi, constituted tortuous interference for
which Lagon should be held liable for damages.

RULING:

No, the interference of Lagon was with a legal justification (in furtherance of a personal financial
interest) and without bad faith

The elements of Tortuous Interference with contractual relation are: (1) Existence of a valid contract;
(2) Knowledge on the part of the third person of the existence of the contract; (3) Interference of the
third person without legal justification or excuse.

As regard to the first element, the existence of a valid contract must be duly established. In the given
case the Court ruled that the notarized copy of lease contract presented in court appeared to be an
incontestable proof that Bai Tonin Sepi and private respondent renewed their contract. The second
element on the other hand, requires that there be knowledge on the part of the interferer that the
contract exists. In this case, Lagon had no knowledge of the lease contract as he even conducted his
own personal investigation and inquiry, and unearthed no suspicious circumstance that would have
made a cautious man probe deeper and watch out for any conflicting claim over the property; that an
examination of the entire property title bore no indication of the leasehold interest of private respondent
and that even the registry of property had no record of the same. As to the third element, a party may
be held liable only when there was no legal justification or excuse for his action or when his co nduct
was stirred by a wrongful motive. To sustain a case for tortuous interference, the other party must
have acted with malice or must have been driven by purely impious reasons to injure the other. In the
case, even assuming that private respondent was able to prove the renewal of his lease contract with
Bai Tonina Sepi, the fact was that he was unable to prove malice or bad faith on the part of petitioner
in purchasing the property. Therefore, the claim of tortuous interference was never established.

Rosenstock v. Burke

March 12, 2016

FACTS
A letter began as follows: “In connection with the yacht Bonzewing, I am in position and
am willing to entertain the purchase of it under the following terms.”

ISSUE

Was there an offer here that was certain, an offer which, if accepeted, could compel the
writer to really buy the yatch?

HELD

No, because here the offer was neither definite nor certain. Said the Supreme Court: “To
convey the idea of a resolution to purchase, a man of ordinary intelligence and common
culture would use these clear and simple words: ‘I offer to purchase,’ I want to purchase,’
‘I am in position to purchase…’ It must be presumed that a man in his transactions in
good faith used the best means of expressing his mind that his intelligence and culture
so permit as to convey and exteriorize his will faithfully and unequivocally. The word
‘entertain’ applied to an act does not mean the resolution to perform said act. It was not
a definite or certain offer, but a mere invitation to a proposal being made to him, which
might be accepted by him or not.”

Note: if two are offered, but they are independent of each other (such as a sale of a parcel
of land, and the lease of an automobile), acceptance of one does not imply acceptance
of the other. BUT if one contract depends upon another, like a contract of loan provided
it is secured by a contract or mortgage, it is essential that there be an agreement on
BOTH transactions. Otherwise, there can be as yet no meeting of the minds.

Sanchez v. Rigos
G.R. No. L-25494, 14 June 1972
FACTS:

Nicolas Sanchez and Severina Rigos executed an instrument entitled “Option toPurchase” wherein
Mrs. Rigos agreed, promised and committed to sell to Mr. Sancheza parcel of land for the amount of
P1, 510. 00 within two years from the date of the instrument, with the understanding that the said
option shall be deemed terminated and elapsed if Mr. Sanchez shall fail to exercise his right to buy
the property within the stipulated period.

Mrs. Rigos agreed and committed to sell and Mr. Sanchez agreed and committed to buy. But there is
nothing in the contract to indicate that her agreement, promise and undertaking is supported by a
consideration distinct from the price stipulated for the sale of the land. Mr. Sanchez has made several
tenders of payment in the said amount within the period before any withdrawal from the contract has
been made by Mrs. Rigos, but were rejected nevertheless.
ISSUE:

Can an accepted unilateral promise to sell without consideration distinct from the price be withdrawn
arbitrarily?

RULING:

No. An accepted promise to sell is an offer to sell when accepted becomes a contract of sale.

Since there may be no valid contract without a cause or consideration, the promisor is not bound by
his promise and may, accordingly, withdraw it. Pending notice of its withdrawal, his accepted promise
partakes, however, of the nature of an offer to sell which, if accepted, results in a perfected contract
of sale. This view has the advantage of avoiding a conflict between Articles 1324 – on the general
principles on contracts – and 1479 – on sales – of the Civil Code.

Article 1324 – When the offeror has allowed the offeree a certain period to accept, the offer may be
withdrawn at any time before acceptance by communicating such withdrawal, except when the option
is founded upon a consideration, as something paid or promised.

Tuazon v. Del Rosario-Suarez

G.R. No. 168325, 13 December 2010
FACTS:

Petitioner and respondent entered into a Contract of Lease, wherein petitioner, Tuazon, will occupy
the parcel of land owned by respondent, Del Rosario-Suarez, for a period of three years. During the
effectivity of the lease, respondent sent a letter to the petitioner offering to sell the parcel of land.
She pegged the price at P37,541,000.00 and gave him two years from January 2, 1995 to decide on
the said offer. On June 19, 1997, four months after the expiration of the Contract of Lease,
respondent sold the land to Catalina Suarez-De Leon, et al. The new owners notified the petitioner
to vacate the premises on the grounds of non-payment of rentals and expiration of the Contract of
Lease. Petitioner claims that respondent violated his right to buy subject property under the principle
of right of first refusal by not giving him notice and the opportunity to by the property. Respondent
contended that the principle of right of first refusal is unavailing in this case. It is a contract of option
which was not perfected due to the failure of acceptance on the part of the respondent.

ISSUE:

WON a lessee loses his right to buy the property upon failure to accept an offer or to purchase on
time within the period stipulated.

RULING:

Yes. The case indeed involves an option contract and not a contract of a right of first refusal. What is
involved here is a separate and distinct offer made by Lourdes through a letter dated January 2,
1995 wherein she is selling the leased property to Roberto for a definite price and which gave the
latter a definite period for acceptance. Roberto was not given a right of first refusal. The letter-offer of
Lourdes did not form part of the Lease Contract because it was made more than six months after the
commencement of the lease. It is an option contract, the rules applicable are found in Articles 1324
and 1479 of the Civil Code which provides:

Art. 1324. When the offerer has allowed the offeree a certain period to accept, the offer may be
withdrawn at any time before acceptance by communicating such withdrawal, except when the
option is founded upon a consideration, as something paid or promised.

Art. 1479. A promise to buy and sell a determinate thing for a price certain is reciprocally
demandable.

An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding
upon the promissor if the promise is supported by a consideration distinct from the price.

It is clear from the provision of Article 1324 that there is a great difference between the effect of an
option which is without a consideration from one which is founded upon a consideration. If the option
is without any consideration, the offeror may withdraw his offer by communicating such withdrawal to
the offeree at any time before acceptance; if it is founded upon a consideration, the offeror cannot
withdraw his offer before the lapse of the period agreed upon.

Sanchez v. Rigos
G.R. No. L-25494, 14 June 1972
FACTS:

Nicolas Sanchez and Severina Rigos executed an instrument entitled “Option toPurchase” wherein
Mrs. Rigos agreed, promised and committed to sell to Mr. Sancheza parcel of land for the amount of
P1, 510. 00 within two years from the date of the instrument, with the understanding that the said
option shall be deemed terminated and elapsed if Mr. Sanchez shall fail to exercise his right to buy
the property within the stipulated period.

Mrs. Rigos agreed and committed to sell and Mr. Sanchez agreed and committed to buy. But there is
nothing in the contract to indicate that her agreement, promise and undertaking is supported by a
consideration distinct from the price stipulated for the sale of the land. Mr. Sanchez has made several
tenders of payment in the said amount within the period before any withdrawal from the contract has
been made by Mrs. Rigos, but were rejected nevertheless.

ISSUE:

Can an accepted unilateral promise to sell without consideration distinct from the price be withdrawn
arbitrarily?

RULING:

No. An accepted promise to sell is an offer to sell when accepted becomes a contract of sale.

Since there may be no valid contract without a cause or consideration, the promisor is not bound by
his promise and may, accordingly, withdraw it. Pending notice of its withdrawal, his accepted promise
partakes, however, of the nature of an offer to sell which, if accepted, results in a perfected contract
of sale. This view has the advantage of avoiding a conflict between Articles 1324 – on the general
principles on contracts – and 1479 – on sales – of the Civil Code.

Article 1324 – When the offeror has allowed the offeree a certain period to accept, the offer may be
withdrawn at any time before acceptance by communicating such withdrawal, except when the option
is founded upon a consideration, as something paid or promised.

Tuazon v. Del Rosario-Suarez

G.R. No. 168325, 13 December 2010
FACTS:

Petitioner and respondent entered into a Contract of Lease, wherein petitioner, Tuazon, will occupy
the parcel of land owned by respondent, Del Rosario-Suarez, for a period of three years. During the
effectivity of the lease, respondent sent a letter to the petitioner offering to sell the parcel of land.
She pegged the price at P37,541,000.00 and gave him two years from January 2, 1995 to decide on
the said offer. On June 19, 1997, four months after the expiration of the Contract of Lease,
respondent sold the land to Catalina Suarez-De Leon, et al. The new owners notified the petitioner
to vacate the premises on the grounds of non-payment of rentals and expiration of the Contract of
Lease. Petitioner claims that respondent violated his right to buy subject property under the principle
of right of first refusal by not giving him notice and the opportunity to by the property. Respondent
contended that the principle of right of first refusal is unavailing in this case. It is a contract of option
which was not perfected due to the failure of acceptance on the part of the respondent.

ISSUE:

WON a lessee loses his right to buy the property upon failure to accept an offer or to purchase on
time within the period stipulated.

RULING:

Yes. The case indeed involves an option contract and not a contract of a right of first refusal. What is
involved here is a separate and distinct offer made by Lourdes through a letter dated January 2,
1995 wherein she is selling the leased property to Roberto for a definite price and which gave the
latter a definite period for acceptance. Roberto was not given a right of first refusal. The letter-offer of
Lourdes did not form part of the Lease Contract because it was made more than six months after the
commencement of the lease. It is an option contract, the rules applicable are found in Articles 1324
and 1479 of the Civil Code which provides:

Art. 1324. When the offerer has allowed the offeree a certain period to accept, the offer may be
withdrawn at any time before acceptance by communicating such withdrawal, except when the
option is founded upon a consideration, as something paid or promised.

Art. 1479. A promise to buy and sell a determinate thing for a price certain is reciprocally
demandable.

An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding
upon the promissor if the promise is supported by a consideration distinct from the price.
It is clear from the provision of Article 1324 that there is a great difference between the effect of an
option which is without a consideration from one which is founded upon a consideration. If the option
is without any consideration, the offeror may withdraw his offer by communicating such withdrawal to
the offeree at any time before acceptance; if it is founded upon a consideration, the offeror cannot
withdraw his offer before the lapse of the period agreed upon.

Adelfa Properties v. CA
G.R. No, 111238, 25 January 1995

FACTS:

Respondents and their brothers Jose and Dominador were the registered CO-OWNERS of a parcel
of land.

Jose and Dominador sold their share (eastern portion of the land) to Adelfa.a

Adelfa expressed interest in buying the western portion of the property from private respondents.

An exclusive “Option to Purchase” was executed between Adelfa and respondents; an option money
of P50,000 was given to the latter.

A new owner’s copy of the certificate of title was issued but was kept by Adelfa’s counsel, Atty.
Bernardo.

Before Adelfa could make payments, it received summons; a case was filed against Jose and
Dominador and Adelfa by the nephews and nieces of private respondents.

Adelfa, through a letter, informed the private respondents that it would hold payment of the full
purchase price and suggested that they settle the case with their said nephews and nieces; Salud did
not heed the suggestion.

Respondents informed Atty. Bernardo that they are canceling the transaction. RTC Makati dismissed
the civil case.

Atty. Bernardo wrote private respondents informing them that, in view of the dismissal of the case,
Adelfa is willing to pay the purchase price and requested that the corresponding Deed of Absolute
Sale be executed; respondents igonored.

Respondents sent a letter to Adelfa enclosing therein a check representing the refund of half the option
money paid under the exclusive option to purchase and requested Adelfa to return the owner’s
duplicate copy of Salud. Adelfa failed to surrender the certificate of title.

ISSUE:

WON the agreement between Adelfa and respondents was strictly an option contract

RULING:
 1. The agreement between the parties is a contract tosell; not an option contract nor a contract
of sale.

Contract to SELL

– by agreement, the ownership is reserved in the vendor and is not to pass until full payment of the
price

Contract of SALE

– the title passes to the vendee upon the delivery of the thing sold

– the vendor has lost and cannot recover ownership until and unless the contract is resolved or
rescinded

Asiain v. Jalandoni
G.R. No. L-20435, 23 October 1923

FACTS:

Asiain said to Jalandoni that he was willing to sell a portion of his hacienda for the sum of P55,000.
With a wave of his hand, Asiain indicated the tract of land in question, affirming that it contained
between 25 and 30 hectares, and that the crop of sugar cane then planted would produce not less
than 2,000 piculs of sugar. But Jalandoni, remaining doubtful as to the extent of the land and as to the
amount of crop on it. Once in possession of the land, Jalandoni did two things. He had the sugar cane
ground in La Carlota Sugar Central with the result that it gave and output of P800 piculs and 23 cates
of centrifugal sugar. When opportunity offered, he secured the certificate of title of Asiain and produced
a surveyor to survey the land. According to his survey, the parcel in question contained an area of 118
hectares, 54 ares, and 22 centiares.

Of the purchase price of P55,000, Jalandoni had paid P30,000, leaving a balance unpaid of P25,000.
To recover the sum of P25,000 from Jalandoni or to obtain the certificate of title and the rent from him,
action was begun by Asiain in the Court of First Instance of Occidental Negros. Defendant interposed
that the contract be annulled, both parties to return whatever they had received, and that he recover
from the plaintiff the sum of P3,600 annually as damages.

ISSUE:

Whether or not the contract can be rescinded?

RULING:

The memorandum-agreement between Asiain and Jalandoni contains the phrase or “more or less.” It
is the general view that this phrase or others of like import, added to a statement of quantity, can only
be considered as covering inconsiderable or small differences one way or the other, and do not in
themselves determine the character of the sale as one in gross or by the acre. The use of this phrase
in designating quantity covers only a reasonable excess or deficiency. Such words may indeed relieve
from exactness but not from gross deficiency.

Coordinating more closely the law and the facts in the instant case, we reach the following conclusions:
This was not a contract of hazard. It was a sale in gross in which there was a mutual mistake as to the
quantity of land sold and as to the amount of the standing crop. The mistake of fact as disclosed not
alone by the terms of the contract but by the attendant circumstances, which it is proper to consider in
order to throw light upon the intention of the parties, is, as it is sometimes expressed, the efficient
cause of the concoction. The mistake with reference to the subject-matter of the contract is such that,
at the option of the purchaser, it is rescindable. Without such mistake the agreement would not have
been made and since this is true, the agreement is inoperative and void. It is not exactly a case of
over reaching on the plaintiff’s part, or of misrepresentation and deception, or of fraud, but is more
nearly akin to a bilateral mistake for which relief should be granted. Specific performance of the
contract can therefore not be allowed at the instance of the vendor.

The ultimate result is to put the parties back in exactly their respective positions before they became
involved in the negotiations and before the accomplishment of the agreement. This was the decision
of the trial judge and we think that decision conforms to the facts, the law, and the principles of equity.

Judgment is affirmed, without prejudice to the right of the plaintiff to establish in this action in the lower
court the amount of the rent of the land pursuant to the terms of the complaint during the time the land
was in the possession of the defendant.

Dumasug v. Modelo
G.R. No. L-10462, 16 March 1916
FACTS:

Petitioner Andrea Dumasug alleged that respondent Felix Modelo persuaded her to sign a document
by falsely and maliciously making her believe that it contained an engagement on petitioner`s
obligation to pay a certain sum of money. Such obligation pertains to the advances and expenses
incurred by the respondent in protecting and aiding her in the proceeding of her case wherein the
petitioner was the plaintiff. Petitioner does not know how to write, hence, she only affixed her mark as
her signature believing in good faith that respondent herein was telling her the truth.

Three months after the execution of such document, the respondent took possession of a carabao
and of two parcels of land owned by the petitioner on the ground that the latter had conveyed such
properties to him by an Absolute Sale in consideration to the expenses he incurred in aiding the
petitioner on the proceedings of her case. Petitioner herein seeks for the recovery of the above
properties.

ISSUE:

Whether or not the instrument of purchase and sale of two parcels of land and a plow carabao is null
and void.

RULING:
Yes.In the case at bar, it was inconceivable that respondent herein incurs such big amount as he
allegedly spent in the proceedings of the lawsuit involving petitioner. The evidence discloses that the
only great expense which Andrea Dumasug could have incurred was the sum that as fees she had to
pay the attorney Andres Jayme for filing a demurrer in the Court of First Instance. Said attorney
testified that he received from Andrea Dumasug only P80 or P90, the only large sum which the latter
had to expend.

The lower court held that the statements of Andrea Dumasug were well worthy of credence, and,
taking into consideration the merits of the case, reached the conclusion that the sole document which
plaintiff signed which she acknowledged she was owing to Felix Modelo, and not to the sale of all her
properties. The record shows plaintiff to have stated that she received an offer to sell her carabao, but
that she did not wish to sell the animal as she only rented it and it is her only means of livelihood.

It is, then, perfectly evident that the document, by means of which defendant made himself the owner
of the properties in question is not the instrument of debt which Andrea Dumasug had signed, and if it
is the same one its contents were not duly and faithfully explained to plaintiff in the act of its execution.
In either case, the consent said to have been given by Andrea Dumasug in said document is null and
void, as it was given by mistake. This error invalidates the contract, because it goes to the very
substance of the thing which was the subject matter of said contract, for, had the maker thereof truly
understood the contents of said document, she would neither have accepted nor authenticated it by
her mark.

The consent given by plaintiff being null and void, the document is consequently also null, void, and
of no value or effect. Article 1303 of the Civil Code is therefore, applicable, which prescribes that:
“When the nullity of an obligation has been declared, the contracting parties shall restore to each other
the things which have been the object of the contract with their fruits, and the value with its interest.”

For the foregoing reasons, whereby the errors assigned to the judgment appealed from are deemed
to have been refuted, petition granted.

Leonardo v. CA
G.R. No. 125485, 13 September 2004
FACTS:

Petitioner Restituta Leonardo is the only legitimate child of the late Sps. Tomasina Paul and Balbino
Leonardo. Private respondents Teodoro, Victor, Corazon, Piedad, et. al, all surnamed Sebastian, are
the illegitimate children of Tomasina with Jose Sebastian after she separated from Balbino Leonardo.
In 1988, private respondent Corazon Sebastian with her niece and a certain Bitang, came to
Restituta’s house to persuade her to sign a deed of extrajudicial partition of the estate of Tomasina
Paul and Jose Sebastian. Before signing the document, Restituta allegedly insisted that they wait for
her husband Jose Ramos so he could translate the document which was written in English.
Subsequently, she proceeded to sign the document even without her husband and without reading
the document, on the assurance of private respondent Corazon that she will get her share as a
legitimate daughter. Petitioner then asked private respondent Corazon and her companions to wait for
her husband so he could read the document. When petitioner’s husband arrived, however, private
respondent Corazon and her companions had left without leaving a copy of the document. It was only
when petitioner hired a lawyer that they were able to secure a copy and read the contents thereof.
Petitioner refuted private respondents’ claim that they were the legitimate children and sole heirs of
Jose Sebastian and Tomasina Paul since the latter were never married to each other, thus, the
extrajudicial partition was therefore unlawful and illegal. Petitioner also claimed that her consent was
vitiated because she was deceived into signing the extrajudicial settlement. She further denied having
appeared before a Judge of MTC of Urbiztondo, Pangasinan to acknowledge the execution of the
extrajudicial partition.

ISSUE:

Whether the consent given by petitioner to the extrajudicial settlement of the estate was given
voluntarily.

RULING:

No. Contracts where consent is given by mistake or because of violence, intimidation, undue influence
or fraud are voidable. These circumstances are defects of the will, the existence of which impairs the
freedom, intelligence, spontaneity, and voluntariness of the party in giving consent to the agreement.
In determining whether consent is vitiated, Courts are given a wide latitude in weighing the facts
considering the age, physical infirmity, intelligence, relationship and the conduct of the parties at the
time of making the contract and subsequent thereto, irrespective of whether the contract is in a public
or private writing.

In this case, private respondents failed to offer any evidence to prove that the extrajudicial settlement
of the estate was explained in a language known to the petitioner, i.e. the Pangasinan dialect. Clearly,
petitioner, who only finished Grade 3, was not in a position to give her free, voluntary and spontaneous
consent without having the document, which was in English, explained to her in the Pangasinan
dialect.

Domingo Realty v. CA
G.R. No. 126236, 26 January 2007

FACTS:

Petitioner Domingo Realty filed complaint with the against Antonio M. Acero, who conducted
business under the firm name A.M. Acero Trading, David Victorio, John Doe, and Peter Doe, for
recovery of possession of three (3) parcels of land. Defendants Acero and Victorio filed answer to
the alleging that they merely leased the land from his co-defendant David Victorio, who, in turn,
claimed to own the property on which the hollow blocks factory of Acero stood. In the Answer,
Victorio assailed the validity of the TCTs of Domingo Realty, alleging that the said TCTs emanated
from spurious deeds of sale, and claimed that he and his predecessors-in-interest had been in
possession of the property for more than 70 years.

Mariano Yu representing Domingo Realty, Luis Recato Dy[6], and Antonio M. Acero, all assisted by
counsels, executed a Compromise Agreement which contains the following:

1. That defendants admit and recognize the ownership of the plaintiff over the property subject
of this case;
 2. That defendant Luis Recato Dy admits and recognizes that his title has been proven not to
be genuine and that the area indicated therein is inside the property of the plaintiff;
3. That defendant Acero admits that the property he is presently occupying by way of lease is
encroaching on a portion of the property of the plaintiff and assume[s] and undertakes to
vacate, remove and clear any and all structures erected inside the property of the plaintiff by
himself and other third parties, duly authorized and/or who have an existing agreement with
defendant Acero, and shall deliver said portion of the property of the plaintiff free and clear of
any unauthorized structures, shanties, occupants, squatters or lessees within a period of
sixty (60) days from date of signing of this compromise agreement. Should defendant Acero
fail in his obligation to vacate, remove and clear the structures erected inside the property of
the plaintiff within the period of 60 days afore-mentioned, plaintiff shall be entitled to a writ of
execution for the immediate demolition or removal of said structure to fully implement this
agreement; and ejectment of all squatters and occupants and lessees, including the
dependents to fully implement this agreement;
4. That plaintiff admits and recognizes that defendant Luis Recato Dy bought and occupied the
property in good faith and for value whereas defendant Acero leased the portion of said
property likewise in good faith and for value hereby waives absolutely and unconditionally all
claims including attorneys fees against both defendants in all cases pending in any court
whether by virtue of any judgment or under the present complaint and undertake to withdraw
and/or move to dismiss the same under the spirit of this agreement;
5. That defendants likewise waive all claims for damages including attorneys fees against the
plaintiff;
6. That plaintiff acknowledges the benefit done by defendant Luis Recato Dy on the property by
incurring expenses in protecting and preserving the property by way of construction of
perimeter fence and maintaining a caretaker therein and plaintiff has agreed to pay Luis
Recato Dy the amount of P100,000.00 upon approval of this agreement by this Honorable
Court.

ISSUE:

WHETHER OR NOT the judgment on compromise agreement should be set aside due to mistake.

RULING:

Yes. Respondent Acero gave his consent to the Compromise Agreement in good faith that he would
only vacate a portion of his lot in favor of petitioner Domingo Realty.

Prior to the execution of the Compromise Agreement, respondent Acero was already aware of the
technical description of the titled lots of petitioner Domingo Realty and more so, of the boundaries
and area of the lot he leased from David Victorio. Before consenting to the agreement, he could
have simply hired a geodetic engineer to conduct a verification survey and determine the actual
encroachment of the area he was leasing on the titled lot of petitioner Domingo Realty. Had he
undertaken such a precautionary measure, he would have known that the entire area he was
occupying intruded into the titled lot of petitioners and possibly, he would not have signed the
agreement.

In this factual milieu, respondent Acero could have easily averted the alleged mistake in the contract;
but through palpable neglect, he failed to undertake the measures expected of a person of ordinary
prudence. Without doubt, this kind of mistake cannot be resorted to by respondent Acero as a
ground to nullify an otherwise clear, legal, and valid agreement, even though the document may
become adverse and even ruinous to his business.
Moreover, respondent failed to state in the Compromise Agreement that he intended to vacate only
a portion of the property he was leasing. Such provision being beneficial to respondent, he, in the
exercise of the proper diligence required, should have made sure that such matter was specified in
the Compromise Agreement. Respondent Aceros failure to have the said stipulation incorporated in
the Compromise Agreement is negligence on his part and insufficient to abrogate the said
agreement.

Martinez v. Hongkong and Shanghai Bank

G.R. No. L-5496, 19 February 1910

FACTS:

Plaintiff seeks to annul a contract on the ground that her consent was obtained under duress. Under
the contract, she agreed to convey several properties to Aldecoa & Co. and HSBC as a settlement of
their claims against her and her husband, who fled the country. It was established at the trial that
during the period of negotiation, representations were made to her by the defendants and concurred
in by her lawyers, that if she assented to the requirements of the defendants, the civil suit against
herself and her husband would be dismissed and the criminal charges against the latter withdrawn,
but if she refused, her husband must either spend the rest of his life abroad or be criminally prosecuted.

ISSUE:

WON there was duress which would invalidate the contract.

RULING:

No. There is no duress that will invalidate the contract.

Article 1335 of the Civil Code in its last paragraph provides that: “A threat to enforce one’s claim
through competent authority, if the claim is just or legal does not vitiate consent”.

In order that this contract can be annulled it must be shown that the plaintiff never gave her consent
to the execution thereof. It is, however, necessary to distinguish between real duress and the motive
which is present when one gives his consent reluctantly. A contract is valid even though one of the
parties entered into it against his wishes and desires or even against his better judgment. Contracts
are also valid even though they are entered into by one of the parties without hope of advantage or
profit. A contract whereby reparation is made by one party for injuries which he has willfully inflicted
upon another is one which from its inherent nature is entered into reluctantly by the party making the
reparation. He is confronted with a situation in which he finds the necessity of making reparation or of
taking the consequences, civil or criminal, of his unlawful acts. He makes the contract of reparation
with extreme reluctance and only by the compelling force of the punishment threatened. Nevertheless,
such contract is binding and enforceable. Petition is dismissed.

Loyola v. CA
G.R. No. 115734, 23 February 2000
FACTS:

Gaudencia Zarraga allegedly sold to private respondents her share in Lot 115-A-1. The sale was
evidenced by a notarized document denominated as “Bilihang Tuluyan ng Kalahati (1/2) ng Isang
Lagay na Lupa.”

Private respondents, are the children of Mariano Zarraga, the brother of Gaudencia, alleged that
they were the lawful owners of Lot 115-A-1, the one-half share inherited by their father and the other
half purchased from their deceased aunt, Gaudencia.

Petitioners, all surnamed Loyola, are first cousins of private respondents, assailed the validity of the
deed of absolute sale citing that it is a simulated contract since the notary public who prepared the
questioned Bilihan did not personally know Gaudencia, thus, the deed of sale is questionable.

ISSUE:

Whether fraud or undue influence was exercised to obtain Gaudencia’s consent to the sale.

RULING:

Article 1337 of the Civil Code states: There is undue influence when a person takes improper
advantage of his power over the will of another, depriving the latter of a reasonable freedom of
choice. The following circumstances shall be considered: confidential, family, spiritual, and other
relations between the parties, or the fact that the person alleged to have been unduly influenced was
suffering from mental weakness, or was ignorant or in financial distress.

For undue influence to be established to justify the cancellation of an instrument, three elements
must be present:

1. a person who can be influenced;

2. the fact that improper influence was exerted;
3. submission to the overwhelming effect of such unlawful conduct.

To prove a confidential relationship from which undue influence may arise, the relationship must
reflect a dominant, overmastering influence which controls over the dependent person. In the
present case, petitioners failed to show that Romana used her aunt’s reliance upon her to take
advantage or dominate her and dictate that she sell her land. Undue influence is not to be inferred
from age, sickness, or debility of body, if sufficient intelligence remains.

Laureta Trinidad v. IAC

G.R. No. L-65922, 3 December 1991

FACTS:

The house looked beautiful in summer but not when the waters came. Then it was flooded five feet
deep and leas than prepossessing, let alone livable. Disenchanted, the buyer sued the seller for the
annulment of the sale and damages, alleging fraud.
ISSUE:

Whether or not there was misrepresentation on the part of Francisco to justify the rescission of the
sale and the award damages to the petitioner.

RULING:

Fraud is never lightly inferred, it is presumed that “a person is innocent of crime or wrong” and that
“private transactions have been fair and regular.” While disputable, these presumptions can be
overcome only by clear and preponderant evidence. Our finding is that the fraud alleged by the
petitioner has not been satisfactorily established to call for the annulment of the contract. This finding
is based on the following considerations.

First, it was the petitioner who admittedly approached the private respondent, who never advertised
the property nor offered it for sale to her.

Second, the petitioner had full opportunity to inspect the premises, including the drainage canals
indicated in the vicinity map that was furnished her, before she entered into the contract of conditional
sale.

Third, it is assumed that she made her appraisal of the property not with the untrained eye of the
ordinary prospective buyer but with the experience and even expertise of the licensed real estate
broker that she was.

Fourth, seeing that the lot was depressed and there was a drainage lot abutting it, she cannot say she
was not forewarned of the possibility that the place might be flooded.

Fifth, there is no evidence except her own testimony that two previous owners of the property had
vacated it because of the floods and that Francisco assured her that the house would not be flooded
again. The supposed previous owners were not presented as witnesses and neither were the
neighbors. Francisco himself denied having made the alleged assurance.

Sixth, the petitioner paid the 1970 and 1971 amortizations even if, according to her Complaint, “since
1969 said lot had been under floods of about one (1) foot deep,” and despite the floods of September
and November 1970.

Seventh, it is also curious that notwithstanding the said floods, the petitioner still “made annexes and
decorations on the house,” all of a permanent nature, for which she now claims reimbursement from
the private respondent.

Songco v. Sellner
G.R. No. L-11513, 4 December 1917

FACTS:

George C. Sellner, was the owner of a farm which was contiguous to a farm owned by the plaintiff
Lamberto Songco. Sellner desired to mill his cane at a sugar central. However, one obstacle was that
the owners of the central were not sure they could mill his cane and would not promise to take it.
Sellner, however, learning that the central was going to mill Songco’s cane, conceived the idea of
buying the cane of the latter, expecting to run his own cane in that same time the other should be
milled. Accordingly he bought Songco’s cane as it stood in the fields for the agreed sum of P12,000
and executed therefor three promissory notes of P4,000 each. Two of these notes were paid; and the
present action was instituted to recover upon the third. A false representation was alleged to have
been made by Songco with respect to the quantity of uncut cane standing in the fields at the time
Sellner purchased the farm. Songco estimated that the cane would produce 3,000 piculs of sugar and
Sellner bought the crop believing it to be correct but it turned out it only produce a gross of 2,017
piculs.

ISSUE:

Whether or not there was false representation made by Songco in order to secure the sale of sugar
cane to Sellner.

RULING:

Sellner is bound in the sale and he must pay the price stipulated. The representation in question can
only be considered matter of opinion as the cane was still standing in the field, and the quantity of the
sugar it would produce could not be known with certainty until it should be harvested and milled.
Undoubtedly Songco had better experience and better information on which to form an opinion on this
question than Sellner. Nevertheless the latter could judge with his own eyes as to the character of the
cane, and it is shown that he measured the fields and ascertained that they contained 96 1/2 hectares.

A misinterpretation upon a mere matter of opinion is not an actionable deceit, nor is it a sufficient
ground for avoiding a contract as fraudulent. We are aware that statements may be found in the books
to the effect that there is a difference between giving an honest opinion and making a false
representation as to what one’s real opinion is. We do not think, however, that this is a case where
any such distinction should be drawn.

The law allows considerable latitude to seller’s statements, or dealer’s talk; and experience teaches
that it is exceedingly risky to accept it at its face value. The refusal of the seller to warrant his estimate
should have admonished the purchaser that that estimate was put forth as a mere opinion; and we will
not now hold the seller to a liability equal to that which would have been created by a warranty, if one
had been given.

Assertions concerning the property which is the subject of a contract of sale, or in regard to its qualities
and characteristics, are the usual and ordinary means used by sellers to obtain a high price and are
always understood as affording to buyers no ground for omitting to make inquiries. A man who relies
upon such an affirmation made by a person whose interest might so readily prompt him to exaggerate
the value of his property does so at his peril, and must take the consequences of his own imprudence.

Mercado and Mercado v. Espiritu

G.R. No. L-11872, 1 December 1917

FACTS:
The case was about the contract made by Luis Espiritu (father of Jose Espiritu, the defendant) and
the heirs of his sister Margarita Mercado; Domingo and Josepha Mercado, who pretended to be of
legal age to give their consent into the contract of sale of the land they inherited from their deceased
mother Margarita Mercado (sister of Luis Mercado). The siblings Domingo et. al., sought for the
annulment of contract asserting that Domingo and Josepha were minors during the perfection of
contract.

ISSUE:

Whether or not the deed of sale is valid, when the minors presented themselves of legal age, at the
time of the perfection of the contract.

RULING:

The court declared that the contract of sale was VALID, even if it were made and entered into by
minors, who pretended to be of legal age.

Whenever a party has, by its own declaration, act or omission, intentionally and deliberately led
another party to believe a particular thing to be true, and to act upon such belief, he cannot, in any
litigation arising out of such declaration, cannot be permitted to falsify it. Furthermore, the sale of real
estate made by a minor who pretend to be of legal age, when in fact he is not, is VALID, and he will
not be permitted to excuse himself from the fulfillment of the obligations contracted by him or to have
it annulled. The judgment that holds such sale to be valid and absolves the purchaser from the
complaint filed against him does not violate the laws relative to the sale of minor’s property, nor the
judicial rules established in consonance therewith.

In the given case, annulment of the sale cannot be invoked on the ground of minority, since at the time
of the perfection of the contract; Domingo and Josefa presented themselves to be of legal age.

Braganza v. Villa Abrille

G.R. No. L-12471, 13 April 1959
FACTS:

Rosario Braganza and her sons loaned from De Villa Abrille P70,000 in Japanese war notes and in
consideration thereof, promised in writing to pay him P10,000 + 2% per annum in legal currency of the
Philippines 2 years after the cessation of the war. Because they have not paid, Abrille sued them in
March 1949.

The Manila court of first instance and CA held the family solidarily liable to pay according to the contract
they signed. The family petitioned to review the decision of the CA whereby they were ordered to
solidarily pay De Villa Abrille P10,000 + 2% interest, praying for consideration of the minority of the
Braganza sons when they signed the contract.

They also averred that Guillermo and Rodolfo were minors when they signed the promissory note.

Court of Appeals found them liable pursuant to the following reasoning:

. . . . These two appellants did not make it appears in the promissory note that they were not yet of
legal age. If they were really to their creditor, they should have appraised him on their incapacity, and
if the former, in spite of the information relative to their age, parted with his money, then he should
have contended with the consequence of his act. But, that was not the case. Perhaps defendants in
their desire to acquire much-needed money, they readily and willingly signed the promissory note,
without disclosing the legal impediment with respect to Guillermo and Rodolfo. When minor, like in the
instant case, pretended to be of legal age, in fact, they were not, they will not, later on, be permitted
to excuse themselves from the fulfillment of the obligation contracted by them or to have it annulled.
(Mercado, et al. vs. Espiritu, 37 Phil., 215.)

ISSUE:

Whether or not the minors are liable for the promissory note?

RULING:

No, in order to hold them liable, the fraud must be actual and not constructive. It has been held that
his mere silence when making a contract as to his age does not constitute a fraud which can be made
the basis of an action of deceit.

The fraud of which an infant may be held liable to one who contracts with him in the belief that he is
of full age must be actual, not constructive, and mere failure of the infant to disclose his age is not
sufficient.

However, the boys though not bound by the provisions of the contract, are still liable to pay the actual
amount they have profited from the loan. Art. 1340 states that even if the written contract is
unenforceable because of their non-age, they shall make restitution to the extent that they may have
profited by the money received.

Suntay v. CA
G.R. No. 114950, 19 December 1995
FACTS:

Federico Suntay, herein private respondent, was the registered owner of a parcel of land and a rice
mill. He applied as a miller-contractor of NARIC. His application was denied because he was tied up
with several unpaid loans. For purposes of circumvention, he thought of letting his nephew-layer,
herein petitioner, to make the application for him. Rafael prepared the deed of sale, wherein Federico
sold the parcel of land and the rice mill to Rafael. Three months later, the second deed of sale was
made, wherein Rafael sold back the properties in question to Federico for a consideration of P20,000.
A Certificate of Title in the name of Federico was canceled and a new was one was issued in the name
of Rafael. In spite of this, Federico was remained in possession of the property and continued to
exercise rights of absolute ownership over the property. Rafael, meanwhile, did not make any attempt
to take possession thereof at any time. Federico requested Rafael to deliver his copy of the TCT so
that Federico could have the counter-deed of sale in his favor registered in his name. Rafael declined
and furthered contended that the second deed of sale was a counterfeit. Federico filed a complaint
about reconveyance assailing the validity of the first deed of sale, interjecting that he has been in
continuous possession of the properties in question. While the trial court favored the petitioner, the CA
reversed the decision of the trial court by stating that the first deed of sale is absolutely simulated and
fictitious.

ISSUE:

WON the first Deed of Sale is simulated and therefore invalid.

RULING:

Yes. It can be adduced by the facts that the first deed of sale stipulating a transfer of property from
Federico to Rafael is absolutely simulated and fictitious. Rafael and Federico were relatives, whose
blood relation was the foundation of their professional and business relationship. Rafael admits that
he came into possession thereof in the course of rendering legal services to his uncle. Their close
relationship, as considered by the CA, is a badge of simulation. Rafael further attempted to claim that
the transfer was consideration for his attorney’s fees. The most protuberant index of simulation is the
complete absence of an attempt in any manner on the part of the late Rafael to assert his rights of
ownership over the land and rice mill in question. After the sale, he should have entered the land and
occupied the premises thereof. He did not even attempt to. If he stood as owner, he would have
collected rentals from Federico for the use and occupation of the land and its improvements. All that
the late Rafael had was a title in his name.

Blas v. Santos
G.R. No. L-14070, 29 March 1961
FACTS:

Simeon Blas contracted the first marriage with Marta Cruz sometime before 1898. They had three
children, only one of whom, Eulalio, left children, namely, Maria Gervacio Blas, one of the plaintiffs,
Marta Gervacio Blas, one of the defendants, and LazaroGervacio Blas. Lazaro died in 1950 and is
survived by three legitimate children who are plaintiffs herein, namely, Manuel Gervacio Blas, Leoncio
Gervacio Blas and Loida Gervacio Blas. Marta Cruz died in 1898, and the following year, Simeon Blas
contracted a second marriage with Maxima Santos. At the time of this second marriage, no liquidation
of the properties required by Simeon Blas and Marta Cruz was made. Three of the properties left are
fishponds located in Obando, Bulacan. Maxima Santos does not appear to have apported properties
to her marriage with Simeon Blas.

On December 26, 1936, only over a week before his death on January 9, 1937, Simeon Blas executed
a last will and testament. In the said testament Simeon Blas gave to Maxima Santos de Blas one-half
of all her properties. MAXIMA SANTOS DE BLAS, on the other hand, made a document giving one
half of all her inheritance to the children of maximum in the first marriage, labeled as exhibit “A”. The
court below held that said Exhibit “A” has not created any right in favor of plaintiffs which can serve as
the basis for the complaint; that neither can it be considered as a valid and enforceable contract for
lack of consideration and because it deals with future inheritance. The court also declared that Exhibit
“A” is not a will because it does not comply with the requisites for the execution of a will; nor could it
be considered as a donation, etc. Both the court below in its decision and the appellees in their brief,
argue that the heirs of Simeon Blas and his wife Marta Cruz can no longer make any claim for the
unliquidated conjugal properties acquired during said first marriage, because the same were already
included in the mass of properties constituting the estate of the deceased Simeon Blas and in the
adjudications made by virtue of his will, and that the action to recover the same has prescribed.
ISSUE:

Is exhibit “A” a contract involving future inheritance, hence should be declared void?

RULING:

No. Exhibit “A” is not a contract on future inheritance. it is an obligation or promise made by the maker
to transmit one-half of her share in the conjugal properties acquired with her husband, which properties
are stated or declared to be conjugal properties in the will of the husband. The conjugal properties
were in existence at the time of the execution of Exhibit “A” on December 26, 1936. As a matter of
fact, Maxima Santos included these properties in her inventory of her husband’s estate of June 2,
1937. The promise does not refer to any properties that the maker would inherit upon the death of her
husband, because it is her share in the conjugal assets. That the kind of agreement or promise
contained in Exhibit “A” is not void under Article 1347 of the old Civil Code, has been decided by the
Supreme Court of Spain in its decision of October 8, 19154, thus: It will be noted that what is prohibited
to be the subject matter of a contract under Article 1347 of the Civil Code is “future inheritance.” To
us, future inheritance is any property or right not in existence or capable of determination at the time
of the contract, that a person may in the future acquire by succession. The properties subject of the
contract Exhibit “A” are well-defined properties, existing at the time of the agreement, which Simeon
Blas declares in his statement as belonging to his wife as her share in the conjugal partnership.
Certainly, his wife’s actual share in the conjugal properties may not be considered as future inheritance
because they were actually in existence at the time Exhibit “A” was executed.

J.L.T. Agro, Inc. v. Balansag and Cadayday

G.R. No. 141882, 11 March 2005
FACTS:

Don Julian contracted two marriages. He had two children with the first wife Antonia and 4 children on
the second wife Milagros. The present controversy involves a parcel of land which was originally
registered in the name of Don Julian and Antonia. Don Julian married Milagros without partitioning the
properties in his first marriage. To avoid conflict, the parties entered into a Compromise Agreement
which embodied the partition of all the properties of Don Julian. The above parcel of land was included
to be the share of Milagros and her children. Milagros took possession of the said property which was
subsequently sold to respondents herein. Respondents, upon registering the said land discovers that
the title to the above land was on the name of Petitioner herein.

Don Julian after the execution of the Compromise Agreement executed a Deed of Assignment of
Assets with Assumption of Liabilities to petitioner which transfers the ownership of the subject land in
favor to the petitioner. Don Julian died intestate.

ISSUE:

Whether or not a future legitime can be determined, adjudicated and reserved prior to the death of the
testator.

RULING:
Yes. Well-entrenched is the rule that all things, even future ones, which are not outside the commerce
of man may be the object of a contract. The exception is that no contract may be entered into with
respect to future inheritance, and the exception to the exception is the partition inter vivos referred to
in Article 1080 which states that: “Should a person make a partition of his estate by an act inter vivos,
or by will, such partition shall be respected, insofar as it does not prejudice the legitime of the
compulsory heirs.”

The partition will, of course, be effective only after death. It does not necessarily require the formalities
of a will for after all, it is not the partition that is the mode of acquiring ownership. Neither will the
formalities of a donation be required since donation will not be the mode of acquiring the ownership
here after death; since no will has been made it follows that the mode will be succession (intestate
succession). Besides, the partition here is merely the physical determination of the part to be given to
each heir.
The partition inter vivos of the properties of Don Julian is undoubtedly valid pursuant to Article 1347.
However, considering that it would become legally operative only upon the death of Don Julian, the
right of his heirs from the second marriage to the properties adjudicated to him under the compromise
agreement was but a mere expectancy. It was a bare hope of succession to the property of their father.
Being the prospect of a future acquisition, the interest by its nature was inchoate. It had no attribute of
property, and the interest to which it related was at the time nonexistent and might never exist.

Evidently, at the time of the execution of the deed of assignment covering Lot No. 63 in favor of
petitioner, Don Julian remained the owner of the property since ownership over the subject lot would
only pass to his heirs from the second marriage at the time of his death. Thus, as the owner of the
subject lot, Don Julian retained the absolute right to dispose of it during his lifetime. His right cannot
be challenged by Milagros Donio and her children on the ground that it had already been adjudicated
to them by virtue of the compromise agreement. However, it was proven that there was no evidence
showing the acceptance by the petitioner as the donee. Such acceptance will never be presumed
being Don Julian as the Majority stockholder of such Corporation.

WHEREFORE, the decision of the CA was affirmed granting ownership to respondents herein. Costs
against petitioner J.L.T. Agro, Inc.

Liguez v. CA
G.R. No. L-11240, 18 December 1957
FACTS:

Conchita Liguez filed a complaint against the widow and heirs of Salvador Lopez to recover a parcel
of 51.84 hectares of land in Davao. She averred to be its legal owner, pursuant to a deed of donation
executed in her favor by Salvador. At the time the deed was executed, Conchita was 16. She had also
been living with Salvador’s parents for barely a month. The deed of donation recites that the donor
Salvador, “for and in consideration of his love and affection” for Conchita, and “also for the good and
valuable services rendered to [Salvador] by [Conchita], does by these presents, voluntarily give, grant
and donate…”

The donation was made in view of Salvador’s desire to have sexual relations with Conchita.
Furthermore, Conchita’s parents would not allow Conchita to live with him unless he first donated the
subject land. The donated land originally belonged to the conjugal partnership of Salvador and his
wife, Maria Ngo. The deed of donation was inoperative, and null and void because: (a) Lopez had no
right to donate conjugal property to Conchita; and (b) the donation was tainted with illegal causa or
consideration.

ISSUE:

Whether or not the conveyance was predicated on illegal causa.

RULING:

Yes. Conchita Liguez entitled to so much of the donated property as may be found, upon proper
liquidation, not to prejudice the share of the widow Maria Ngo in the conjugal partnership or the
legitimes of Salvador’s forced heirs. Under the cited Art. 1274, liberality of the donor is
deemed causa only in contracts that are of “pure” beneficence, or contracts designed solely and
exclusively to procure the welfare of the beneficiary, without any intent of producing any satisfaction
for the donor.

In this case, Salvador was not moved exclusively by the desire to benefit Conchita, but also to secure
her cohabiting with him, and so that he could gratify his sexual impulses. This is clear from Salvador’s
confession to two witnesses that he was in love with her but her parents would not agree unless he
donated the land in question to her. Actually, therefore, the donation was but one part of an onerous
transaction (at least with Conchita’s parents) that must be viewed in its totality. Thus considered, the
conveyance was clearly predicated upon an illicit causa. Lopez would not have conveyed the property
in question had he known that Conchita would refuse to cohabit with him. The cohabitation was an
implied condition to the donation and being unlawful, necessarily tainted the donation.

Moreover, the CA erred in applying the pari delicto rule. It cannot be said that both parties had equal
guilt. Salvador was a man advanced in years and mature experience, and Conchita was only 16 when
the donation was made. Her acceptance of the deed does not imply knowledge of conditions and
terms not set forth therein. Witnesses testified that it was Conchita’s parents who insisted on the
donation. The rule that parties to an illegal contract, if equally guilty, will not be aided by the law but
will both be left where it finds them, has been interpreted by this Court as barring the party from
pleading the illegality of the bargain either as a cause of action or as a defense. But where the plaintiff
can establish a cause of action without exposing its illegality, the vice does not affect the right to
recover.

Sps. Buenaventura v. CA
G.R. No. 126376, 20 November 2003
FACTS:

Sought to be declared null and void ab initio are certain deeds of sale of real property executed by
defendant parents Leonardo Joaquin and Feliciana Landrito in favor of their co-defendant children and
the corresponding certificates of title issued in their names because of:

1. a) Firstly, there was no actual valid consideration for the deeds of sale xxx over the
properties in litis;
2. b) Secondly, assuming that there was consideration in the sums reflected in the questioned
deeds, the properties are more than three-fold times more valuable than the measly sums
appearing therein;
 3. c) Thirdly, the deeds of sale do not reflect and express the true intent of the parties (vendors
and vendees); and
4. d) Fourthly, the purported sale of the properties in litiswas the result of a deliberate conspiracy
designed to unjustly deprive the rest of the compulsory heirs (plaintiffs herein) of their legitime.

Defendants, on the other hand, aver (1) that plaintiffs do not have a cause of action against them as
well as the requisite standing and interest to assail their titles over the properties in litis; (2) that the
sales were with sufficient considerations and made by defendants parents voluntarily, in good faith,
and with full knowledge of the consequences of their deeds of sale; and (3) that the certificates of title
were issued with sufficient factual and legal basis.

ISSUE:

Whether the Deeds of Sale are void for the gross inadequacy of price.

RULING:

No. Petitioners failed to prove any of the instances mentioned in Articles 1355 and 1470 of the Civil
Code which would invalidate, or even affect, the Deeds of Sale. Indeed, there is no requirement that
the price is equal to the exact value of the subject matter of sale. All the respondents believed that
they received the commutative value of what they gave.