hypothecated to the bank to secure the indebtedness of Aldecoa & Co., but that this
obligation had been wrongfully transferred by Alejandro S. Macleod into an obligation
in favor in his wife, Mercedes Martinez, to the prejudice of the bank. In May, 1907,
Aldecoa & Co. began a civil action against Alejandro S. Macleod and others for the
recovery of certain shares of stock of the par value of P161.000 and for damages in the
sum of P150,000, basing its right to recover upon alleged criminal misconduct of Mr.
Macleod in his management of the firm's affairs.
Haussermann & Cohn and Rosado, Sanz & Opisso, for appellees.
MORELAND, J.:
This is an action to set aside a contract on the ground that plaintiff's consent thereto was
given under duress and undue influence. Alejandro S. Macleod is joined as plaintiff only
for the reason that he is the husband of Mercedes Martinez and he takes no part in the
action personally.
In the statement of facts and some of the legal propositions involved, we have made free
use of the forms contained in the briefs of both parties.
Alejandro S. Macleod was for many years the managing partner of the house of Aldecoa
& Co. in the city of Manila. He withdrew from the management on the 31st day of
December, 1906, when Aldecoa & Co. went into liquidation. At the time that Aldecoa &
Co. ceased active business the Hongkong & Shanghai banking Corporation was a
creditor of that firm to the extent of several hundred thousand pesos and claimed to have
a creditor's lien in the nature of a pledge over certain properties of the debtor. In April,
1907, the bank began a civil action against Alejandro S. Macleod, his wife, Mercedes
Martinez, Aldecoa & Co., and the firm known as Viuda e Hijos de Escao. In the bank's
complaint it was alleged that a certain undertaking in favor of Aldecoa & Co. had been
When the two causes of action above referred to were discovered and the suits there
mentioned commenced, Alejandro S. Macleod and Mercedes Martinez, his wife, engaged the
services of Messrs. Del-Pan, Ortigas and Fisher, attorneys at law, to represent and defend
them in the matter. Soon thereafter these attorneys made overtures to the liquidation of
Aldecoa & Co, for the settlement of the latter's claims. While these negotiations were
pending Aldecoa & Co. claimed that they had made discoveries of many frauds which
Macleod had perpetrated against the company during the period of his management, whereby
the company had been defrauded of many thousands of pesos.
On the 13th day of July, 1907, it becoming apparent that criminal proceedings would be
instituted against him, Macleod went from Manila to the Portuguese colony of Macao, a
territory not covered, it appears, by extradition treaty between the United States and the
Portuguese Government. Four days thereafter, on the 17th day of July, Aldecoa & Co.
filed a complaint against Mr. Macleod, charging him with the falsification of a
commercial document, and a warrant for his arrest was issued by the Court of First
Instance of Manila, and the executive department of the Philippine Government issued a
formal request to the Portuguese authorities for the extradition of the accused. This
request was denied. In the meantime the attorneys for the respective parties were
engaged in negotiations for the settlement and compromise of the difference then
pending and a clearance of Mr. Macleod from all claims and demands of his creditors.
Aldecoa & Co. and the bank, as a consideration for such settlement, insisted upon the
conveyance not only of all the property of Alejandro S. Macleod but also of at least a
portion of the property claimed by his wife, the plaintiff herein. The settlement offered
at that time was the same which was subsequently accepted and consummated on the
14th of August as shown by Exhibit A. There appears to have been little resistance to
this demand on the part of the representatives of Mr. Macleod, but his wife, the plaintiff
herein, stoutly objected to the conveyance required of her, maintaining that the property
which she was asked to transfer was her separate and exlusive property and not liable for
the debts of her husband. Her position was fully stated by her to her attorney, Mr. Fisher,
and to her attorney-in-fact, Mr. William Macleod. An interview between her attorney
and the attorney for Aldecoa & Co. followed this declaration on her part. Thereafter and
on the night of August 4 another interview was had between the plaintiff and her
counsel, Mr. Fisher, and others, at which a long list of claims against Mr. Macleod,
prepared by Aldecoa & Co., was exhibited to the plaintiff and its contends explained to
her by Mr. Fisher and her attorney-in-fact. Some of these claims involved criminal as
well as civil liability. Mr. Fisher at that time favored a settlement in accordance with the
terms proposed by Aldecoa & Co. The plaintiff, however, refused to accept such
settlement.
This being the state of affairs, one of the attorneys for the bank, on the 7th of August,
1907, was called upon by counsel for both Aldecoa & Co. and the plaintiff in this action,
who requested him to act as intermediary between the parties and to suggest means by
which a settlement could be obtained. At that interview it was agreed that a full
explanation of the condition of affairs should be made to Mr. Kingcome, a son-in-law of
the plaintiff and a businessman. This explanation was made by Mr. Stephen, manager of
the settlement were consummated additional and mortifying misfortunes wound fall
upon Mr. Macleod's family.
About the time that the inmterview between Kingcome and Stephen was celebrated Mr.
Fisher was enlisting the services of Mr. William Macleod, a nephew and close friend of
plaintiff and her husband, and plaintiff's attorney-in-fact, for a mission to plaintiff of a
similar character to that of Mr. Kingcome. Mr. William Macleod, as well as Mr. Kingcome,
seems to have been persuaded by what he was told that the consequences of plaintiff's
continued refusal to make the settlement would be disastrous to Alejandro S. Macleod and
his family and would be an exhibition of very bad judgment in every way.
On August 9, 1907, the prosecuting attorney filed a second complaint against Alejandro
S. Macleod and his associate, Osorio, charging them with embezzlement and causing
warrants of extradition to issue. The complaint was made at the instance of the
prosecuting attorney because he had heard that Macleod and Osorio were about to leave
for Europe and he wanted to intercept them in territory from which they could be
extradited.
On the 11th of August a long conference was held between plaintiff, her attorney, Mr.
Kingcome, her son-in-law, and William Macleod, her attorney-in-fact, at which she was
informed in substance that if she assented to the requirements of Aldecoa & Co. and the
bank the civil suits against herself and her husband would be dismissed and the criminal
charges against him withdrawn, while if she refused her husband must either spend the
rest of his life in Macao or be criminally prosecuted on the charged already filed and
tobe filed. At that interview plaintiff refused to accede to the terms of settlement and that
interview was terminated by a statement on the part of Mr. Fisher, which was
the Hongkong & Shanghai Banking Corporation, one of the friends of Mr. Kingcome, at
an interview arranged between them pursuant to the arrangements made by the attorneys
for the parties. Whether or not Mr. Kingcome communicated the substance of that
interview with Mr. Stephen to his mother-in-law, the plaintiff, before she signed the
document in question is in dispute in this case. There is some doubt from the record as to
the exact language used in this conversation between Kingcome and Stephen, but it
appears that some reference was made tothe interest which the British colony in Manila,
of which Messrs. Stephen, Kingcome, and Macleod were prominent members, would
have in avoiding the scandal and disgrace to the latter which might be expected to ensue
unless the differences between the parties to this action were amicably arranged. It
seems at that interview that Mr. Stephen suggested to Mr. Kingcome that he advise his
mother-in-law to act reasonably in negotiating the proposed settlement. It appears that
Mr. Kingcome got the impression from that interview that Mr. Stephen thought unless
"Gentlemen, it is evident that there can be no compromise or settlement, and the only
thing left us to do is to defend Mr. Macleod in the best possible manner."
On the 12th of August, at an interview had between theplaintiff and her attorney-in-fact,
Mr. William Macleod, the plaintiff acceded to the terms proposed by the defendants and
authorized Mr. William Macleod to execute the contractof settlement on her behalf. The
document of settlement was prepared and after certain corrections upon the part of the
plaintiff's attorneys, making the same entirely satisfactory to them, it was signed by the
plaintiff's attorney-in-fact on her behalf on the 14th of August. It was thereafter and on
the same day ratified by the plaintiff, who executed the same in person.
After Adecoa & Co. and the bank had taken possession of the property of plaintiff and
her husband, conveyed to them by Exhibit A, the civil suits were dismissed, the criminal
charges withdrawn, and Mr. Macleod returned from macao to Manila. The plaintiff had a
surveyor divide the property in Malate, of which she had conveyed a half interest, into
two equal parts. She negotiated for apartition of the land on the basis of this survey. She
joined in the motion for the dismissal of the civil action to which she had been a party
and in the motion in the Court of Land Registration for the recording in the name of
thegrantees of a half interest in the Malate land. All of these acts were in pursuance of
Exhibit A.
On December 3, 1907, the plaintiff filed her complaint in the present action, and, after
the joining of issue and thehearing of evidence, judgment was rendered in favor of
defendants on the 29th day of May, 1909. From this judgment, after the usual motion for
a new trial, its denial and exception to such denial, plaintiff appealed to this court.
The Civil Code in relation to the subject-matter in hand contains the following
provisions:
ART. 1265. Consent given under error, violence, intimidation, or deceit shall be null.
ART. 1267. There is violence when, inorder to obtain the consent, irresistible force is
used.
There is intimidation when one of the contracting parties gives his consent on account of
a reasonable and well-grounded fear of suffering an imminent and serious injury to his
person or property, or to the person or property of his spouse, descendants, or
ascendants.
In determining whether or not there is intimidation the age, sex, and status of the person
intimidated must be considered.
Fear of displeasing the persons to whom obedience and respect are due shall not annul
the contract.
ART. 1268. Violence or intimidation shall annul the obligation, even though such
violence or intimidation shall have been used by a third person who did not take part in
the contract.
In order that this contract be annuled it must be shown that the plaintiff never gave her
consent to the execution thereof. If a competent person has once assented to a contract
freely and fairly, he is bound. Contracts which are declared void and of no force upon
the ground that they were obtained by fraud, duress, or undue influence are so declared
for the reason that the complaining party never really gave his consent thereto. The
consent in such case is not in the eye of the law a consent at all. The person has not
acted. He has done nothing he was in vinculis.
It is 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 and against the
strong desires of the party making the reparation. He is confronted with a situation in which
he finds the necessityeither of making reparation or of taking the consequences, civil or
criminal, of his unlawfull acts. Hemakes the contract of reparation with extreme reluctance
and only by thecompelling
made reparation for that which he had mis appropriated or misapplied. In legal effect
there is no difference between a contract wherein one of the contracting parties
exchanges one condition for another because he looks for greater gain or profit by
reason of such change and an agreement wherein one of the contracting parties agrees to
accept the lesser of two disadvantages. In either case he makes a choice free and
untrammeled and must accordingly abide by it. These are evidence of duress, facts from
which duress may be inferred, but they are not duress of themselves. In the absence of
other proof and circumstances, they might very well be held to establish duress. But
there is other proof and we do not believe that under all the facts of this case as
disclosed by the record we can say that the court below erred when he refused to
findthat the plaintiff entered into the contract in question by reason of duress and undue
influence. We find lacking in this case amny of the essential elements usually found in
cases of duress. The most that the facts disclose is that the plaintiff was loath to
relinquish certain rights which she claimed to have in certain property to the end that
she might be relieved from litigation then pending against her and that her husband
might escape prosecution for crimes alleged to have been committed; and that she
persisted for a considerable time in her refusal to relinquish such claimed rights. The
fact that she did relinquish them upon such consideration and under such condition does
not of itself constitute duress or intimidation, nor does it destroy the obligatory effect
and force of her consent. In order to do so something more is needed. Such influence
must havebeen exercised over her that she was deprived of her free will and choice. She
must have acted from fear and not from judgment.
Not every contract made by a wife to relieve her husband from the consequences of his
crimes is viodable. Subject to certain restrictions a wife may legally dispose of
herproperty as she pleases; she may squander it; she may give it away; she may pledge
or transfer it to keep her husband out of state prison. The question in each case is exactly
the same as in all such relations, was she acting according to the dictates of her own
judgment, whether good or bad, or from fear, force, or undue influence? If there are time
and opportunity for judgment to take the place of fear, and if apart from the threat there
are reasons disclosed which might lead one in the exercise of good judgment to perform
the acts complained of, then the evidence as to duress and undue influence must be very
clear in order that such acts may be recalled.
The appellant cites many cases in support of her contention that the contract of the 14th
of August should be abrogated.
We have carefully examined not only all of the cases cited by the appellant but also
substancially all of the cases within our reach relating to the questions before vs. Among
them are the following: Adams vs. Irving National Bank (116 N.Y., 606); Allen vs
Laflore County (76 Miss., 671); Bently vs. Ronson (11 Mich., 691; Burton vs McMillan
(8 L. R. A., N.S., 991); Bell vs. Campbell (123 Mo., 1); Galusha vs Sherman (47 L. R.
A., 417); MaMahon vs. Smith (47 Conn., 221, 36 Am Rep., 67); Gorringe vs Reed (23
Utah, 120, 90 Am St. Rep., 692); Bank vs Bryan (62 Ia., 42); Rau vs. Zedlitz (132 Mass.,
164); Lomerson vs. Johnston (47 N. J. Eq., 312); McGrory vs. Reilly (14 Phila., 111);
Foley vs. Greene (14 R.I., 618); Coffman vs. Lookout Bank (5 Lea., 232); Haynes vs.
Rudd (102 N. Y., 372); Cribbs vs. Sowle (87 Mich., 340); Osborne vs. Robins (36 N.Y.,
365); Rall vs. Raguet (4 Ohio, 400); Bank vs. Kirk (90 Pa. St., 49); Eadie vs. Slimmon
(26 N.Y., 9); Harris vs. Carmody (131 Mass., 51; Taylor vs. Jacques (106 Mass., 291);
Bryant vs. Peck & W. Co. (154 Mass., 460); Hesinger vs. Dyer (147 Mo., 219); Mack vs.
Praug (104 Wis., 1); Benedict vs. Broome (106 Mich., 378); Williams vs Bayley (1 Eng.
& Ir. App. Cas., 200); Central Bank vs. Copeland (18 Md., 305 , 81 Am. Dec., 597);
Bradley vs. Irish (42 Ill. app., 85); Snyder vs. Willey (33 Mich., 483).
All of the above cases, except Harris vs. Carmody, Hesinger vs. Dyer, and Williams vs.
Bayley, are distinguishable from the case at bar in the following particulars:
In those cases there was no time within which to deliberate the matter as it should have
been deliberated.
The treats made to secure the performance of the acts complained of were made directly
to the complaining party by the person directly interested or by somene in his behalf
who was working in his interest and who had no interest whatever in the welfare of the
complaining party.
There was no consideration for the performance of the act complained of except
immunity from the prosecution threatened.
The property transferred or incumbered by the act complained of was the separate
property of the person performing the act in which the person for whome the act was
performed claimed no interest whatever.
In the cases of Harris vs. Carmody, Hesinger vs. Dyer, and Williams vs. Bayley, above
excepted, the complainant had the benefit of legal advice and the advice of some friend but
in none of those were there present any of the other circumstances just enumerated.
In the case of Hesinger and another vs. Dyer (147 Mo., 219), it appeared that the
plaintiffs were the tenants of the defendant on defendant's farm. During the last year that
they had occupied this farm they raised some 500 bushels of corn upon which the
defendant claimed to have a lien under the statue. The plaintiff Hesinger sold the corn
and applied the proceeds to his own use. Dyer threatened to institute criminal
proceedings against Hesinger for embezzling the corn if he and his wife did not execute
to him their note for its value, secured by a deed of trust upon the land of Mrs. Hesinger.
They testified that because of this threat and in fear of said prosecution they executed
the note and deed of trust as required. Shortly before the papers were executed the
defendant's home, taking with him a notary public to take the acknowledgement of the
deed of trust in the event that he succeeded in getting the plaintiffs to execute it. This
was one of the occasions upon which the defendant threatened to prosecute Hesinger if
he and his wife did not execute the deed of trust as required. Mrs. Hesinger had all the
time refused and still refused to execute the deed; but upon the afternoon of that day
plaintiffs went to Sedalia to consult with their son and with their attorney and thereafter
went to J.M. Bailer's office and there executed the papers in question. The court held
that the note and deed of trust were voidable as having been executed under duress.
It is at once apparent, however, that the facts differ materially from those in the case at
bar. In that case the plaintiffs contended against the personal presence of the defendant
and all of the influence which that presence implies. In that case there was absolutely no
consideration moving to Mrs. Hesinger inducing the execution of the papers in question
except the release of her husband from prosecution. There was lacking in that case
everything, every consideration which would appeal to the judgment or reason of the
complaining party.
There was no dispute as to the title of the property transferred or incumbered, no claim
made to it by anybody, no suits pending to recover it or any portion of it, and no
pretension that it could be taken for the debts of the husband or of any other person.
The same may be said of the other two cases, Harris vs. Carmody and Williams vs.
Bayley.
The plaintiff cites also the case of Jalbuena vs. Ledesma et al. (8 Phil. Rep., 601). In that
case it appeared, as stated by the court, that
Ildefonso Doronila, having been the tutor of the Ledesma minor children, was cited in
August, 1900, before the provost court of Iloilo on the petition of the defendant Lopez,
to show cause why he should not surrender the papers, securities, and money in his
charge, and he was in the course of the proceeding ordered to render his accounts as
tutor, and it is to be inferred from the testimony of the defendant Ledesma that the
accounts were in fact rendered. On December 3 he came to an agreement with the
defendant Lopez, as representative of the children, whereby his accounts were allowed
and accepted and the value of the missing papers, claimed to have been lost in the
bombardment of Iloilo, was fixed at P12,000, and a certain obligation of the estate to
Juan Casells to the amount of P4,000 was assumed by him. Subsequently this agreement
was ratified by the family council, which
imposed, however, an additional condition that security should be given by Doronila for
the payment of P16,000 in case the missing papers should not be produced within six
months and the novation of the debt of Juan Casells accepted by the debtor. Thereafter
he was brought before the provost judge in the pending proceeding and was ordered to
give additional security, and failing to do so was committed to jail, where he had already
been once confined on the institution of the proceeding. As all of his property was
already bound to the estate for the performance of his duty as guardian, it became
expedient to find a surety for him, and the plaintiff (wife of Doronila), who had
accompanied him to the court, was thereupon induced to join with him in this
undertaking. As to the preceedings in court, the testimony of the plaintiff, reduced to
narrative form, is as follows:
"I remeber having been in the office of the provost judge of Iloilo in December, 1900. I
went there to visit my husband, who was in jail. While there I was summoned before the
provost judge by a soldier, and I went up before the provost and requested him to set my
husband free, he not being guilty of anything. I asked him, crying, to put my husmand at
liberty, but the provost did not listen to me; on the contrary, he asked me to file security
for what was lost in my house during the bombardment, and he told me that he was
going to put my husband in jail if I did not obligate my property as security. Fearing that
he was going to be put in jail again, I was compelled to sign, it being a time when we
and others were under fear and I was afraid that he would be punished and that they
would deport him. In the fear that I was then under I did not know any other remedy but
to sign. He told me that my husband would be sent again to jail if I did not sign."
A careful analysis of this case discloses the following pecularities:
In the first place, the undisputed evidence demostrates that the first offers of
compromise were made by the plaintiff herself through her representatives. It appears
that from first to last the effort and anxiety to compromise the claims of the defendants
were on the part of the plaintiff through her representatives. The position of Aldecoa &
Co. throughout the negotiations, as it appears from the testimony in the case, was that a
settlement of their claims against the plaintiffs would not result in any peculiar or
especial benefit to them inasmuch as by the actions already commenced against the
plaintiff and her husband the defendants would be able, so they contended, to secure
exactly the same property that they would obtain by the settlement proposed. The
soundness of this contention was admitted by the attorneys for the plaintiff. It was the
desire on the part of at least one of the persons especially interested in Aldecoa & Co.
that Alejandro S. Macleod should suffer criminally for the acts which he had committed
against that company and such person did not hesitate to say so repeatedly. There seems
to have been throughout the negotations a fear of the part of the attornets for the plaintiff
that, partly, at least, by reason of this especial desire of said person, the negotiations
This communication was carried on through the medium of an interpreter, one Pedro
Regalado, who testified:
"The provost judge told Sra. Vicenta . . . in these terms: "You sign a document
guaranteeing with your property the obligation contracted by Sr. Doronila, your
husband." She answered to these words that her husband was not guilty of the loss of the
documents, as when the bombardment came the documents were in a trunk and were
lost during the bombardment. When she said that she could not respond, then the
provost said: "You sign this document; you either sign this document or I will send you
husband back to jail." More or less I remember that he said: "Interpreter, tell her to
either sign this document or I will have her husband sent again to jail."
In this case the wife sued to set aside the obligation upon the ground that it was obtained
from her by duress and undue influence. She justly succeded.
A mere reading of the facts in that case discloses that it can not be used as an authority
in the case at bar. It is widely different in its facts.
would be broken off by Aldecoa & Co. before a settlement could be consummated. The
defendants never urged the ultimatum laid down by the defendants. They simply stated
to the attorneys for the plaintiffs that they must claims, and it appeared from the position
assumed that it was immaterial to them whether they obtained those properties through
the courts or by means of a settlement. They left Macleod and his wife to choose foir
themselves, upon their own judgment and upon the advice of their attorneys and
relatives, the course to be by them pursued. That the defendants were not especially
urging the settlement in question is demonstrated by the fact that Mr. Fisher, the attorney
for the plaintiffs, was doubtful about securing the participation of Aldecoa & Co. in the
agreement up to the very moment of its execution, and it appears from the evidence of
Mr. Cohn that Mr. Fisher, laboring under such apprehension, actually withheld important
information from Aldecoa & Co. for fear such information would deter them at the last
moment from giving their assent to the arrangement.
In the secon place, there were at no time during the course of these negotiations for
settlement any direct personal relations or communications between the parties to this
action. During the whole course of the negotiations no person communicated with the
plaintiffs on behalf of the defendants alone. The offers, proposition, or treats, if any,
made by the defendants were filtered to her through the personality, mind, and judgment
of her own attorneys or relatives, all of them being persons who had her welfare and the
welfare of her family deeply at heart and who were acting for her and her husband and
not for the defendants. That personal presence of threatening party and the influence
springing therefrom, factors so potent in duress and undue influence, were wholly
lacking.
On the trial an attempt was made to show that the defendants had attempted to influence the
plaintiff, Mercedes Martinez, by acting upon her through her son-in-law, Mr. Kingcome. As
stated above, Mr. Stephen was asked by the attorneys for the plaintiff, as well as the
attorneys for the defendants, to see Mr. Kingcome and ask him to explain to his mother-inlaw the facts and circumstances which were the cause of the attempts at settlement for the
purpose of inducing her to act reasonably in the premises. There was
some dispute as to whether or not Mr. Kingcome actually communicated the substance
of the interview to his mother-in-law prior to her signing the contract in question. Mr.
Kingcome in his testimony states that according to his best recollection he
communicated the substance of that interview to his mother-in-law on the 11th day of
August. In considering this matter it must be remembered that the interview between
Mr. Stephen and Mr. Kingcome was not brought about by Aldecoa & Co. or its
representative. It was brought about by Mr. Cohn acting as mediary between Mr. Fisher
and Mr. Rosado, the one the attorney for the plaintiffs and the other the attorney for the
defendant company, upon the request and with the express approval of both of them.
The interview which followed between Mr. Stephen and Mr. Kingcome was the direct
act of plaintiff in exactly the same manner and in exactly the same degree as it was the
act of Aldecoa & Co.
In the third place, the plaintiff by means of the negotiations and settlement in question
was engaged partly at least in the settlement of her own suits and controversies. The
plaintiff, Mercedes Martinez, together with Aldecoa & Co. and Viuda e Hijos de F.
significance in determining the question whether duress and undue influence were
exercised or weighing the reasons pro and con.
In the fifth place, we must bot overlook the fact that the plaintiff took advantage of said
contract after its execution and required the complete fulfilling of every one of its
provisions favorable to herself. She negotiated with Aldecoa & Co. for a partition of the
Escao were sued in April, 1907, by the Hongkong & Shanghai Banking Corporation in
relation to P45,000 worth of notes claimed to have been fraudulently taken from the
assets of Aldecoa & Co. and transferred into the name and possessio of the plaintiff,
Mercedes Martinez. This was one of the actions settled and terminated by the contract in
question. In this property the plaintiff released her rights under the settlement. The only
other property to which she released her rights was a half interest in property in Malate.
As to the legality of her claim that this property was her own individual property there
was a serious question, so serious in fact that she was formally and reapetedly advised
by her attorneys that such claim was in their judgment unfounded. These are the only
interest which the plaintiff, Mercedes Martinez, released or gave over in the settlement
complainted of. Both of the claims were substantially in litigation and the legality of
both was seriously questioned and strongly doubted by her own attorneys. While it is not
necessary to decide and we do not decide whether her claim to either of those properties
was valid or invalid, still the fact that the validity of her claims thereto was denied by
her own attorneys strongly tends to impeach the claim that she released those properties
by reason of duress and undue influence, rather that as a result of her own deliberate
judgment.
In the fourt place, it must be remembered that the plaintiff, Mercedes Martinez, never at
any time stood alone in the negotiations. There was never a moment when she did not
have interposed between her and the defendants the counsel of skilled attorneys and of
interested relatives. Whatever came to her from the defendants, their demands or their
threats, if any, reached her through the medium of her friends and advisers. She had the
assistance of legal learning and business intelligence and experience. She had the careful
and thoughtful advice of her family. She was as far as possible relieved from all fear,
stress, or influence except such as were inherent in the circumstances themselves. It
appears undisputed that she and her relatives and lawyers considered throughout the
negotiations and down to and including the time of the execution of the agreement of
settlement that her best interest would be subserved by acceding to the terms laid down
by the defendants. From the evidence in the case it is difficult to arrive at a conclusion
other that that the acts which she performed in making the settlement in question were
acts which contributed to her welfare and the welfare of her whole family. While this
fact may not be conclusive in the present case, it nevertheless is of very importance and
Malate property and to that end caused a survey and a division thereof to be made. She
demanded of Aldecoa & Co. payment of the P2,000 provided for by the contract, which
said sum she received. She caused one-half of said Malate property to be assessed
against said company. She caused a change to be made in the proceedings to register the
title to said Malate lands, previously begun by her, so as to register her title to only onehalf thereof. She caused to be dismissed the action pending against her on account of the
Escao notes, which dismissal occured after this present action was commenced.
These acts are mentioned not to show a ratification of the contract in the sence that those
acts estopped her from thereafter questioning the same, but rather as confirmatory of the
theory that in the execution of the contract complained of she acted accroding to the
dictates of good business judgment rather that from duress and undue influence.
As we have already stated, not every contract executed by a wife, even though made
solely to save her husband from the consequences of his crimes, is voidable.
Solicitation, importunity, argument, and persuasion are not undue influence and a
contract is not to be set aside merely because one party used these means to obtain the
consent of the other. Influence obtained by persuation or argument or by appeals to the
affection is not prohibited either in law or morals and is not obnoxious even in courts of
equity. Such may be termed "due influence." The line between due and undue influence,
when drawn, must be with full recognition of the liberty due every true owner to obey
the voice of justice, the dictates of friendship, of gratitude and of benevolence, as well
as the claims of kindred, and, when not hindered by personal incapacity or particular
regulation, to dispose of his own property according to his own free choice. (9 Cyc. 455,
and cases there cited.)
On the other hand contracts entered into by a wife whereby she conveys property
unquestionably hers, the sole and only consideration for which contract is the obtaining for
her husband immunity from criminal prosecution, are always justly the objects of suspicion,
and it is a wise jurisprudence which holds that, where she defends upon the ground that she
was duressed, the party enforcing such contract must expect the very closest scrunity of the
transaction with the presumptions all against him. Where, however, as in this case, there is a
real question as to the validity of claims laid by the wife to the property transferred, some of
which claimed rights are involved in actual litigation in which she is a party, while the
remainder are alleged by opposing claimants to be subject to seizure and sale under
judgements against the husband; and competent and honorable counsel, after careful and
extended consideration of the facts and the law, advise her that the rights so claimed by her
in the property transferred are fictitious, unreal, and defeasible, having no foundation in law,
and she, after abundant opportunity for deliberate consideration, release such claimed rights
and thereby not only secures immunity for her husband, but also quiets litigation against
herself, a very different question is presented. It is undisputed that the attorneys for the
plaintiff in this case
advised her that, from the facts which they had before them, facts of which she was fully
informed, her husband had been guilty of embezzlement and misappropriation in the
management of the business of Aldecoa & Co. and that, in their judgment, if prosecuted
therefor, he would be convicted. They further advised her that the P45,000 worth of
notes claimed by her and to recover which was part of the purpose of the action against
her and her husband by the Hongkong & Shanghai Banking Corporation were a part of
the property of which her husband had criminally deprived the said company. They
advised her that she would not be able to hold such notes as her own. They further
advised her that from the facts before them Aldecoa & Co. would have no difficulty in
getting a judgment for a very large amount against her husband, and, in that event, the
interest which she claimed in the Malate property would be liable in their judgment
ganancial. They informed her that all that Aldecoa & Co. required of here was the
transfer of her claims rights in said property. They further advised her that if she did not
so transfer such property, Aldecoa & Co. would nevertheless obtain it by means of the
actions already commenced and to be commenced; that if she did transfer it she would
lose no more than she would lose by means of said action and she would gain in
addition the immunity of her husband from criminal prosecution. In other words, under
the advice of her counsel, the situation was so presented to her that it was evidenct that
in signing the agreement of the 14th of August she had all to gain and nothing to lose,
whereas, in refusing to sign said agreement, she had all to lose and nothing to gain. In
the one case she would lose her property and save her husband. In the other, she would
lose her property and her husband too. The argument thus presented to her by her
attorneys addressed itself to judgment and not to fear. It appealed to reason and not to
passion. It asked her to be moved by common sense and not by love of family. It spoke
to her own interest as much as to those of her husband. The argument went to her
financial interest as well as to those of the defendants. It spoke to her business judgment
as well as to her wifely affections. From the opinions of her attorneys, as they were
presented to her upon facts assumed by all to be true, we do not well see how she could
reasonably have reached a conclusion other than that which she did reach. It is of no
consequence here whether or not her lawyers, as matter of law, she would have been
deprived of her alleged interests in the properties mentioned in the manner described
and advised by her attorneys. The important thing is that she believed and accepted their
judicial and acted upon it. The question is not did he make a mistake, but did she
consent; not was she wrongly advised, but was she coerced; not was she wise, but was
she duressed.
From the whole case we are of the opinion that the finding of the court below that the
plaintiff executed the contract in suit of her own free will and choice and not from
duress is fully sustained by the evidence.
The judgment of the court below, is therefore, affirmed with costs against the appellant.
So ordered.
Arellano, C.J., Torres, Mapa and Johnson, JJ., concur.
G.R. No. L-48194 March 15, 1990
in favor
REGALADO, J.:
WHEREFORE, the judgment appealed from is hereby set aside and another
one entered ordering the defendants-appellees, jointly and solidarily, to pay
plaintiff-appellant the sum of P79,338.15 with legal interest thereon from the
filing of the complaint, plus attorney's fees in the amount of P8,000.00. Costs
against defendants-appellees.
That for and in consideration of the aforementioned transfer of rights over said
additional area to TIMBERWEALTH
actually produced from the forest concession of Timberwealth Corporation.
That I hereby agree to sign and endorse the stock certificate in favor of Mr. &
Mrs. Jose M. Javier, as soon as stock certificates are issued.
At the time the said deed of assignment was executed, private respondent had
a pending application, dated October 21, 1965, for an additional forest
concession covering an area of 2,000 hectares southwest of and adjoining the
area of the concession subject of the deed of assignment. Hence, on February
28, 1966, private respondent and petitioners entered into another "Agreement"
with the following stipulations:
That this Agreement is subject to the approval of the members of the Board of
Directors of the TIMBERWEALTH
CORPORATION.
xxx xxx xxx
xxx xxx
That LEONARDO TIRO hereby agrees and binds himself to transfer, cede and
convey whatever rights he may acquire, absolutely and forever, to
TIMBERWEALTH CORPORATION, a corporation duly organized and existing
under the laws of the Philippines, over a forest concession which is now
pending application and approval as additional area to his existing licensed
area under O.T. License No. 391-103166, situated at Medina, Misamis Oriental;
On November 18, 1966, the Acting Director of Forestry wrote private respondent that
his forest concession was renewed up to May 12, 1967 under O.T.L. No.
391-51267, but since the concession consisted of only 2,535 hectares, he was
therein informed that:
In pursuance of the Presidential directive of May 13, 1966, you are hereby given
until May 12, 1967 to form an organization such as a cooperative, partnership or
corporation with other adjoining licensees so as to have a total holding area of not
less than 20,000 hectares of contiguous and compact territory and an aggregate
allowable annual cut of not less than 25,000 cubic meters, otherwise, your license
will not be further renewed.
Forest Consolidation Agreement on April 10, 1967 with other ordinary timber
license holders in Misamis Oriental, namely, Vicente L. De Lara, Jr., Salustiano
R. Oca and Sanggaya Logging Company. Under this consolidation agreement,
they all agreed to pool together and merge their respective forest concessions
into a working unit, as envisioned by the aforementioned directives. This
consolidation agreement was approved by the Director of Forestry on May 10,
1967. The working unit was subsequently incorporated as the North Mindanao
Timber Corporation, with the petitioners and the other signatories of the
aforesaid Forest Consolidation Agreement as incorporators.
On July 16, 1968, for failure of petitioners to pay the balance due under the two
deeds of assignment, private respondent filed an action against petitioners,
based on the said contracts, for the payment of the amount of P83,138.15 with
interest at 6% per annum from April 10, 1967 until full payment, plus P12,000.00
for attorney's fees and costs.
On September 23, 1968, petitioners filed their answer admitting the due
execution of the contracts but interposing the special defense of nullity thereof
since private respondent failed to comply with his contractual obligations and,
further, that the conditions for the enforceability of the obligations of the parties
failed to materialize. As a counterclaim, petitioners sought the return of
On October 7, 1968, private respondent filed his reply refuting the defense of
nullity of the contracts in this wise:
What were actually transferred and assigned to the defendants were plaintiff's rights
and interest in a logging concession described in the deed of assignment, attached
to the complaint and marked as Annex A, and agreement Annex E; that the
"shares of stocks" referred to in paragraph II of the complaint are terms used therein
merely to designate or identify those rights and interests in said logging concession.
The defendants actually made use of or enjoyed not the "shares of stocks" but the
logging concession itself; that since the proposed
one and the same. Besides, before the logging concession of the plaintiff or the
latter's rights and interests therein were assigned or transferred to defendants,
they never became the property or assets of the Timberwealth Corporation
which is at most only an association of persons composed of the defendants.
10
11
After trial, the lower court rendered judgment dismissing private respondent's
complaint and ordering him to pay petitioners the sum of P33,161.85 with legal
interest at six percent per annum from the date of the filing of the answer until
complete payment.
12
On April 11, 1978, petitioners filed their motion for reconsideration in the Court of
15
Court of Appeals for the reason that on April 20, 1978, prior to its receipt of said
opposition, a resolution was issued denying petitioners' motion for
reconsideration, thus:
The motion for reconsideration filed on April 11, 1978 by counsel for defendantsappellees is denied. They did not file any brief in this case. As a matter of fact
this case was submitted for decision without appellees' brief. In their said
motion, they merely tried to refute the rationale of the Court in deciding to
reverse the appealed judgment.
16
On March 28, 1978, petitioners filed a motion in respondent court for extension of
time to file a motion for reconsideration, for the reason that they needed to change
Petitioners then sought relief in this Court in the present petition for review on
certiorari. Private respondent filed his comment, reiterating his stand that the
decision of the Court of Appeals under review is already final and executory.
13
counsel. Respondent court, in its resolution dated March 31, 1978, gave
petitioners fifteen (15) days from March 28, 1978 within which to file said motion for
reconsideration, provided that the subject motion for extension was filed on time.
14
Petitioners countered in their reply that their petition for review presents
substantive and fundamental questions of law that fully merit judicial
The one (1) day delay in the filing of the said motion for extension can justifiably
be excused, considering that aside from the change of counsel, the last day for
filing the said motion fell on a holiday following another holiday, hence, under
such circumstances, an outright dismissal of the petition would be too harsh.
Litigations should, as much as possible, be decided on their merits and not on
technicalities. In a number of cases, this Court, in the exercise of equity
jurisdiction, has relaxed the stringent application of technical rules in order to
17
resolve the case on its merits. Rules of procedure are intended to promote,
not to defeat, substantial justice and, therefore, they should not be applied in a
very rigid and technical sense.
Petitioners contend that the deed of assignment conveyed to them the shares of
stocks of private respondent in Timberwealth Corporation, as stated in the deed
itself. Since said corporation never came into existence, no share of stocks was
ever transferred to them, hence the said deed is null and void for lack of cause
or consideration.
19
on the agreement, we pay P10,000.00 every after (sic) shipment. We had only 2
shipments"
20
21
Both parties, at the time of the execution of the deed of assignment knew that
the Timberwealth Corporation stated therein was non-existent.
18
parties are properly cognizable indica of their true intention. Where the parties
to a contract have given it a practical construction by their conduct as by acts in
partial performance, such construction may be considered by the court in
construing the contract, determining its meaning and ascertaining the mutual
23
24
25
per se. Under Article 1346 of the Civil Code, a relatively simulated contract,
when it does not prejudice a third person and is not intended for any purpose
contrary to law, morals, good customs, public order or public policy binds the
parties to their real agreement.
The Court of Appeals, therefore, did not err in holding petitioners liable under the
said deed and in ruling that
. . . In view of the analysis of the first and second assignment of errors, the
defendants-appellees are liable to the plaintiff-appellant for the sale and transfer in
their favor of the latter's forest concessions. Under the terms of the contract, the
(Exhibit D-3), then the unpaid balance of P49,338.15 (the amount of P70,661.85
having been received by the plaintiff-appellant from the defendants-appellees)
became due and demandable.
27
As to the alleged nullity of the agreement dated February 28, 1966, we agree
with petitioners that they cannot be held liable thereon. The efficacy of said
deed of assignment is subject to the condition that the application of private
respondent for an additional area for forest concession be approved by the
Bureau of Forestry. Since private respondent did not obtain that approval, said
deed produces no effect. When a contract is subject to a suspensive condition,
its birth or effectivity can take place only if and when the event which constitutes
the condition happens or is fulfilled.
28
place, the parties would stand as if the conditional obligation had never existed.
29
30
Moreover, under the second paragraph of Article 1461 of the Civil Code, the
efficacy of the sale of a mere hope or expectancy is deemed subject to the
condition that the thing will come into existence. In this case, since private
respondent never acquired any right over the additional area for failure to
secure the approval of the Bureau of Forestry, the agreement executed therefor,
which had for its object the transfer of said right to petitioners, never became
effective or enforceable.
MODIFIED. The agreement of the parties dated February 28, 1966 is declared
without force and effect and the amount of P30,000.00 is hereby ordered to be
deducted from the sum awarded by respondent court to private respondent. In all
other respects, said decision of respondent court is affirmed.
SO ORDERED.
MENDOZA, J.:
vs.
VICENTE RODRIGUEZ,
respondent.
(Sgd.)
VICENTE
RODRIGUEZ
Vendee
Respondent also
attached to his
answer a letter of
judicial administrator
Ramon San Andres
6
Dear Inting,
Please accommodate
my request for Three
Hundred (P300.00)
Pesos as I am in need
Noted:
Thanks.
S
A
A
N
D
R
E
S
Vendor
Vicente Rodriguez
Penafrancia
Subdivision, Naga
City
P.S.
3/30/66
You can let bearer Enrique del
Castillo sign for the amount.
(Sgd.)
Rodriguez, widow of
respondent Vicente Rodriguez,
testified that they had purchased
the subject lot from Juan San
Andres, who was their compadre,
on September 29, 1964, at P15.00
per
ELEMENTS OF A
CONTRACT,
NAMELY, OBJECT CERTAIN
AND
BY RESPONDENT OF THE
CONDITION
CONTRACT TO SELL
DESPITE ITS
THEREIN OF PAYMENT OF
THE
BALANCE OF THE
PURCHASE PRICE.
INDIRECTLY TO ENFORCE
THE
PURPORTED CONTRACT
AFTER THE
LAPSE OF 24 YEARS.
equivalent.
12
15
16
we held:
it was stated:
evidenced by the receipt (Exh. 2). Time and again, we have stressed the
rule that a contract is the law between the parties, and courts have no
choice but to enforce such contract so long as they are not contrary to
law, morals, good customs or public policy. Otherwise, court would be
interfering with the freedom of contract of the parties. Simply put, courts
cannot stipulate for the parties nor amend the latter's agreement, for to do
so would be to alter the real intentions of the contracting parties when the
contrary function of courts is to give force and effect to the intentions of
the parties.
case. Considering that a survey of the lot has already been conducted and
approved by the Bureau of Lands, respondent's heirs, assign or successorsin-interest should reimburse the expenses incurred by herein petitioners,
pursuant to the provisions of the contract.
SO ORDERED.
vs.
FIELDMEN'S INSURANCE
CO., INC., defendant-appellant.
CONCEPCION, C.J.:
Section I Liability to
Passengers. 1. The Company will,
subject to the Limits of Liability
and under the Terms of this
Policy, indemnify the Insured in
the event of accident caused by or
arising out of the use of Motor
Vehicle against all sums which the
Insured will become legally liable
to pay in respect of: Death or
bodily injury to any fare-paying
passenger including the Driver ...
who is
xxx
xxx
xxx
Conditions
xxx
xxx
xxx
waive it.
xxx
xxx
xxx
xxx
xxx
xxx
vs.
FERNANDO, J.:p
COURT OF APPEALS and JOSE A.
VILLAMOR, (Deceased) Substituted by
FELISA VILLAMOR, ROSARIO V. LIAO
LAMCO, MANUEL VILLAMOR, AMPARO V.
COTTON, MIGUEL VILLAMOR and
CARMENCITA VILLAMOR, respondents.
of a decision of
review
12
11
In Abella v.
this
19
20
21
as "not less
22
24
25
33
31
36
37
"to afford
and "what
38
DECISION
CARPIO, J.:
The Case
The Facts
TEN MILLION
(P10,000,000.00) PESOS upon
signing of this Contract to Sell;
On 8 December 1997,
Reyes14[14] filed a Petition for
Certiorari15[15] with the Court of
Appeals. Reyes prayed that the
The Issues
On balance, it is unreasonable
and unjust for Reyes to object to
the deposit of the P10 million
down payment. The application
of equity always involves a
balancing of the equities in a
particular case, a matter
addressed to the sound
discretion of the court. Here, we
find the equities weigh heavily
in favor of Lim, who paid the
P10 million down payment in
good faith only to discover later
that Reyes had subsequently
sold the Property to another
buyer.
In Government of the
Philippine Islands v. Wagner
and Cleland Wagner,37[37] the
Court ruled the refund of
amounts received under a
contract is a precondition to the
rescission of the contract. The
Court declared:
The principle that no person may unjustly enrich himself at the expense
of another is embodied in Article 2238[38] of the Civil Code. This principle
applies not only to substantive rights but also to procedural remedies.
One condition for invoking this principle is that the aggrieved party has
no other action based on contract, quasi-contract, crime, quasi-delict or
any other provision of law.39[39] Courts can extend this condition to the
hiatus in the Rules of Court where the aggrieved party, during the
pendency of the case, has no other recourse based on the provisional
remedies of the Rules of Court.
Thus, a court may not permit a seller to retain, pendente lite, money paid
by a buyer if the seller himself seeks rescission of the sale because he has
subsequently sold the same property to another buyer.40[40] By seeking
rescission, a seller necessarily offers to return what he has received from
the buyer. Such a seller may not take back his offer if the court deems it
equitable, to prevent unjust enrichment and ensure restitution, to put the
money in judicial deposit.
SO ORDERED.
VERMEN REALTY
DEVELOPMENT
CORPORATION, petitioner, vs.
BIDIN, J.:
WHEREFORE, the
decision a quo is set
aside. As prayed for by
plaintiff-appellant, the
"Offsetting Agreement"
(Exhibit "E" or "2") is
hereby rescinded.
Room 601 of Phase I of
the Vermen Pines
Condominium should
be returned by plaintiffappellant to defendantappellee upon payment
by the latter of the sum
of P330,855.25 to the
former, plus damages
in the sum of P5,000.00
and P50.00 for the
furnishings of Phase I
of Condo (sic) Units
Nos. 601 and 602, and
three (3) day rental of
Room 402 during the
Holy Week of 1982,
respectively. In
addition, defendantappellee is hereby
PINES
CONDOMINIUM
located at Bakakeng
Road, Baguio
City;
PESOS only;
That the FIRST PARTY is the
owner/developer of VERMEN
Condominium at Bakakeng
Road, Baguio City;
PINES
CONDOMINIUM
PHASE II which is the
subject of this contract,
shall deliver to the
SECOND PARTY the
possession of
residential
condominium, Phase I,
Unit Nos. 601 and 602,
I
As of December 16, 1986, private
respondent had paid petitioner
P110,151.75 in cash, made
deliveries of construction materials
worth P219,727.00, leaving a
balance of P27,848.25 representing
the purchase price of unit 601
(Rollo, p. 28). The price of one
condominium unit was
P138,000.00.
II
RESPONDENT AND
DISCONTINUED THE
CONSTRUCTION OF THE
CONDOMINIUM PROJECT
DESPITE THE FACT THAT THE
EXHIBITS ATTESTING TO THIS
FACT WAS
FORMALLY OFFERED IN
EVIDENCE IN COURT AND
MENTIONED BY IT IN ITS
DECISION.
BREACHED THE "OFFSETTING
AGREEMENT" DESPITE THE
ADMISSION MADE BY PRIVATE
RESPONDENT'S OWN
Before us is a petition
for review on certiorari
from the judgment
rendered by the Court
of Appeals which,
except as to the award
of exemplary damages,
affirmed the decision of
the Regional Trial Court
of Lucena City, Branch
60, setting aside the
"Agreement of
Purchase and Sale"
THOUSAND PESOS
(P600,000.00) as verbally
agreed by the parties, shall be
broken down as follows:
1. P103,499.91 shall be
paid, and as already paid
by the
BUYER to the
SELLERS on
Philippine Islands to
answer for the loan of
the SELLERS which as
of March 15, 1983
P496,500.09, shall be
chargeable from the time
deposit of the SELLERS with
the aforesaid bank.
xxx xxx
11
SO ORDERED.
12
13
Rescission, as contemplated in
Articles 1380, et seq., of the
New Civil Code, is a remedy
granted by law to the
contracting parties and even to
third persons, to secure the
reparation of damages caused
to them by a contract, even if
this should be valid, by
restoration of things to their
condition at the moment prior to
the celebration of the contract.
It implies a contract,
which even if initially
valid, produces a lesion
or a pecuniary damage
to someone.
15
17
"
Those undertaken in
fraud of creditors when
the latter cannot in any
manner collect the
claims due them;
18
In a contract
19
Respondents in the
case at bar bound
themselves to deliver a
deed of absolute sale
and clean title covering
the two parcels of land
upon full payment by
the buyer of the
purchase price of
P2,000,000.00. This
promise to sell was
subject to the fulfillment
of the suspensive
condition of full
payment of the
purchase price by the
petitioner. Petitioner,
however, failed to
complete payment of
the purchase price. The
non-fulfillment of the
condition of full
payment rendered the
contract to sell
ineffective and without
20
Petitioner insists,
however, that the
contract was novated
as to the manner and
time of payment.
21
Novation is never
presumed, it must be
proven as a fact either by
express stipulation of the
parties or by implication
derived from an
irreconcilable
incompatibility between the
Contrary to petitioner's
claim, records show that
the parties never even
intended to novate their
previous agreement. It is
true that petitioner paid
respondents small sums of
money amounting to
P48,680.00, in
contravention of the
manner of payment
stipulated in their contract.
These installments were,
however, objected to by
respondent spouses, and
petitioner replied that these
represented the interest of
the principal amount which
23
It is also mutually
understood that this
payment to the Bank of
Philippine Islands will be
reimbursed to Mr. and Mrs.
Miguel K. Robles by the
undersigned. [Emphasis
supplied]
24
deposited by petitioner to
the Bank of Philippine
Islands to answer for the
loan of respondent
spouses, petitioner only
managed to deposit
P393,679.60. When the
bank threatened to
foreclose the properties,
petitioner apparently could
not even raise the sum
needed to forestall any
action on the part of the
bank. Consequently, he
authorized respondent
spouses to sell the three (3)
transformers. However,
although the parties agreed
to credit the proceeds from
the sale of the transformers
to petitioner's obligation, he
was supposed to reimburse
the same later to
respondent spouses. This
can only mean that there
was never an intention on
the part of either of the
parties to novate
petitioner's manner of
payment.
As regards the
improvements introduced
by petitioner to the
premises and for which he
claims reimbursement, we
see no reason to depart
from the ruling of the trial
court and the appellate
court that petitioner is a
builder in bad faith. He
introduced the
improvements on the
premises knowing fully well
that he has not paid the
consideration of the
contract in full and over the
vigorous objections of
respondent spouses.
Moreover, petitioner
introduced major
improvements on the
premises even while the
BELLOSILLO, J.:
the contract to sell by petitioner without opposition from private respondents who, in
turn, sold the property to other persons, private respondent BARRETTO
REALTY, as the vendor, had the obligation to return the earnest money of
P1000,000.00 plus legal interest from the date it received notice of rescission
from petitioner, i.e., 30 August 1988, up to the date of the return or payment. It
would be most inequitable if resondent BARRETTO REALTY would be allowed
to retain petitioner's payment of P1,000,000.00 and at the same time
appropriate the proceeds of the second sale made to another.
SO ORDERED.
represented by EDUARDO S.
TENORLAS, and HEIRS OF
DOMINADOR, namely: NAPOLEON
SEBASTIAN, RUPERTO
SEBASTIAN, ADORACION
SEBASTIAN, PRISCILLA
SEBASTIAN, LITA SEBASTIAN,
TITA SEBASTIAN and GLORIA
SEBASTIAN, represented by
NAPOLEON SEBASTIAN; EVELYN
SEBASTIAN; AURORA
SEBASTIAN; and JULIETA
SEBASTIAN, respondents.
DECISION
CORONA, J.:
Q: What happened?
Yes, sir.
Q: Did they tell you their purpose?
Q: Who was the companion of your
half sister Corazon Sebastian when she
arrived in your house?
Yes, sir.
She is my niece, sir.
ATTY. L. TULAGAN
Q: And then when they got inside the
house, what happened?
Q: Did you read the document?
ATTY. TULAGAN
ATTY. D. TULAGAN
(continuing)
ATTY. O. DE GUZMAN
COURT
INTERPRETER:
ATTY. O. DE GUZMAN:
ATTY. L. TULAGAN:
WITNESS:
ATTY. O. DE GUZMAN:
Somebody that kind of name appeared
before me.
Your Honor please, before the witness
answer, may we examine the
certification first and may we state for
the record that the month of July, 1998
does not specify any date.
ATTY. L. TULAGAN:
July.
ATTY. L. TULAGAN:
Yes, possible.[23]
Private respondents also maintain that petitioner has no cause of action since the remedy that
should be pursued is an action for annulment and not for declaration of nullity. Private
respondents therefore pray for the dismissal of this petition on the ground of lack of cause of
action.
Before ruling on this procedural matter, a distinction between an action for annulment and one for
declaration of nullity of an agreement is called for.
An action for annulment of contract is one filed where consent is vitiated by lack of legal capacity
of one of the contracting parties, or by mistake, violence, intimidation, undue influence or fraud.
[29] By its very nature, annulment contemplates a contract which is voidable, that is, valid until
annulled. Such contract is binding on all the contracting parties until annulled and set aside by a
court of law. It may be ratified. An action for annulment of contract has a four-year prescriptive
period.[30]
On the other hand, an action for declaration of nullity of contract presupposes a void contract or
one where all of the requisites prescribed by law for contracts are present but the cause, object or
purpose is contrary to law, morals, good customs, public order or public policy, prohibited by law
or declared by law to be void.[31] Such contract as a rule produces no legal and binding effect
even if it is not set aside by direct legal action. Neither may it be ratified. An action for the
declaration of nullity of contract is imprescriptible.[32]
The petitioners pleading was for the declaration of nullity of the extrajudicial settlement of estate.
However, this did not necessarily mean the automatic dismissal of the case on the ground of lack
of cause of action.
Granting that the action filed by petitioner was incompatible with her allegations, it is not the
caption of the pleading but the allegations that determine the nature of the action.[33] The court
should grant the relief warranted by the allegations and the proof even if no such relief is prayed
for.[34] In this case, the allegations in the pleading and the evidence adduced point to no other
remedy but to annul the extrajudicial settlement of estate because of vitiated consent.
WHEREFORE, the decision of the Court of Appeals dated 23 May 1996 is hereby REVERSED.
The extrajudicial settlement of the estate of Tomasina Paul and Jose Sebastian is hereby
ANNULLED and SET ASIDE. No cost.
SO ORDERED.
PUNO, J.:
MANOLO SAMSON
Sir:
Angel C. Santos
10
11
Private
SO ORDERED.
13
SO ORDERED.
15
LESSOR.
II
18
20
February 5, 1985
Accountant-Real Estate
23
25
26
27
DECISION
TINGA, J.:
SO ORDERED.
Thus, the Court cannot forthwith order
dismissal of the complaint without affording
respondents an opportunity to substantiate
Transfer Certificate of Title No. T124731 in the name of defendantappellant and issue a new one in the
name of plaintiffs-appellants.
However, defendant-appellee
disregards the fact that plaintiffsappellants have been in continuous
possession of the land
SO ORDERED.
DECISION
PUNO, J.:
WHEREFORE, it is
respectfully prayed of the
Honorable Court that judgment
issue in the case:
SO ORDERED.viii[8]
ASIDE. Plaintiffs-Appellants
Spouses Amadeo Apacionado
and Herminia Sta. Ana are
declared owners of the subject
house and lot now covered by
Tax Declaration No. 026368.ix[9]
x.
PAGPAPATUNAY
DAPAT MALAMAN NG
LAHAT:
Akong si BONIFACIO
APARATO, binata, Pilipino,
husto sa gulang, at kasalukuyang
naninirahan sa Layunan,
Binangonan, Rizal, ay
nagpapatunay nitong mga
sumusunod:
(SGD.)
SA KATUNAYAN NG LAHAT,
lumagda ako ng aking pangalan
at apelyido ngayong ika-10 ng
Disyembre 1981, dito sa
Layunan, Binangonan, Rizal.
(Thumbmarked) BONIFACIO
APARATO
Nagpatunay
(SGD.)
2, 1979.xxviii[28]
Bonifacio, respondent
Apacionados, and a woman and
her husband. He was given a sheet
of paper to read. He read the
paper and understood that it was a
deed of sale of the house and lot
executed by Bonifacio in favor of
the Apacionados. Thereafter,
Bonifacio requested him to sign
the document as witness.
Reexamining the Pagpapatunay,
Inabayan saw that Bonifacio
affixed his thumbmark on the
Pagpapatunay remains.
The Pagpapatunay is
undisputably a private
document. And this fact does not
detract from its validity. The
Civil Code, in Article 1356
provides:
1405.
xxx
(3) x x x.
Those that do not comply with the
Statute of Frauds as set forth in
this number. In the following
cases an agreement hereafter
made shall be unenforceable by
action, unless the same, or some
note or memorandum thereof,
be in writing, and subscribed
and by the party charged, or by
his agent; evidence, therefore, of
the agreement cannot be received
without the writing, or a
secondary evidence of its
contents:
xxx
Pagpapatunay is sufficient to
transfer and convey title to the
land for purposes of original
registrationxlvi[46] or the issuance
of a real estate tax declaration in
respondent spouses' names, as
prayed for by respondent
spouses,xlvii[47] is another matter
altogether.xlviii[48] For greater
efficacy of the contract,
convenience of the parties and to
The Real Property Tax Code provides that real property tax be assessed in
the name of the person owning or administering the property on which
the tax is levied.lxvi[66] Since petitioner Cenido has not proven any
successional or administrative rights to Bonifacio's estate, Tax
Declaration No. 02-6368 in Cenido's name must be declared null and
void.
No costs.
SO ORDERED.
VILLARANDA; and
COLORHOUSE LABORATORIES,
INC., respondents.
VICENTE G. VILLARANDA,
petitioner, vs.
DECISION
Spouses HONORIO G.
VILLARANDA and ANA MARIA Y.
PANGANIBAN, J.:
The Case
"WITHOUT PRONOUNCEMENT AS
TO COSTS."
2138.
The Facts
building thereon.
11
12
15
18
not void.
19
and
20
27
21
26
The Issues
I.
lands.
25
First Issue:
There was no specific identification
and delineation of the object of the
Deed of Exchange and that there was a
condition precedent for petitioner to
examine and accept the specific area to
effect the exchange;
II.
28
31
32
34
38
35
36
Second Issue:
used.
43
and Nicolas v.
44
46
48
50
SO ORDERED.
DECISION
PANGANIBAN, J.:
The Case
ACCORDINGLY, judgment is
rendered for the plaintiff and
against the defendants,
(Exh. A);
No pronouncement as to costs in
view of the factual circumstances
of the case.
Dissatisfied, petitioners-spouses
filed an appeal with the Court of
Appeals. Respondent Court, in its
challenged Decision, ruled as
follows:lxxii[6]
The Facts
Defendant-spouses Guiang
followed thru the amicable
settlement with a motion for the
execution of the amicable
settlement, filing the same with the
Municipal Trial Court of Koronadal,
South Cotabato. The proceedings
[are] still pending before the said
court, with the filing of the instant
suit.
II
Hence, this petition.lxxv[9]
The Issues
III
In a nutshell, petitioners-spouses
contend that (1) the contract of sale
(Deed of Transfer of Rights) was
merely voidable, and (2) such
contract was ratified by private
respondent when she entered into an
amicable settlement with them.
xxx
xxx
xxx
Q
Now, on March 1, 1990,
could you still recall where you
were?
A
I was still in Manila during
that time.
xxx
xxx
xxx
ATTY. FUENTES:
Q
When did you come back
to Koronadal, South Cotabato?
A
That was on March 11,
1990, Maam.
The position is not well taken. The trial and the appellate courts have resolved
this issue in favor of the private respondent. The trial court correctly
held:lxxxi[15]
By the specific provision of the law [Art. 1390, Civil Code] therefore, the Deed
of Transfer of Rights (Exh. A) cannot be ratified, even by an amicable
settlement. The participation by some barangay authorities in the amicable
settlement cannot otherwise validate an invalid act. Moreover, it cannot be
denied that the amicable settlement (Exh. B) entered into by plaintiff Gilda
Corpuz and defendant spouses Guiang is a contract. It is a direct offshoot of
the Deed of Transfer of Rights (Exh.
A). By express provision of law, such a contract is also void. Thus, the legal
provision, to wit:
Art. 1422. A contract which is the direct result of a previous illegal contract, is also
void and inexistent. (Civil Code of the
Philippines).
In summation therefore, both the Deed of Transfer of Rights (Exh. A) and the
amicable settlement (Exh. 3) are null and void.
Neither can the amicable settlement be considered a continuing offer that was
accepted and perfected by the parties, following the last sentence of Article 124.
The order of the pertinent events is clear: after the sale, petitioners filed a complaint
for trespassing against private respondent, after which the barangay authorities
secured an amicable settlement and petitioners filed before the
MTC a motion for its execution. The settlement, however, does not mention a
continuing offer to sell the property or an acceptance of such a continuing offer.
Its tenor was to the effect that private respondent would vacate the property. By
no stretch of the imagination, can the Court interpret this document as the
acceptance mentioned in Article 124.
WHEREFORE, the Court hereby DENIES the petition and AFFIRMS the
challenged Decision and Resolution. Costs against petitioners.
SO ORDERED.