1. Clarin v.

Rulona
Facts Clarin executed two documents showing evidence of a contract of sale between the
parties.
− Exhibit A provides for the authorization of a surveyor to survey on behalf of the
Rulonas a portion of the
share of a lot from the Clarin, the 10 hectares awarded to Rulonas which the couple
purchased from Clarin.
− Exhibit B provides that Clarin received from Rulona the sum of 800Php as initial
payment for the 10 hectares of land in Carmen Bohol.
− Clarin returned the downpayment and the first installment of the Rulonas saying that
his co-heirs refused to sell the specific portion of his share. The Rulonas then filed for
an action for specific performance.
-Clarin argues that there is no contract since it was subject to the approval of his co-
heirs.
Issue/s − Was there a perfected contract in this case? – YES
Hel − Exhibits A and B are by themselves prima facie evidence that indeed, there existed a
perfected contractbetween the petitioners and the respondent and such contract has
already been partially executed and fulfilled.
− The petitioner’s acceptance of the 800Php as evidenced by Exhibit B clearly showed
his consent (implied) to the contract thereby precluding him from rejecting its binding
effect.
 2. Rosenstock v. Burke
Facts Burke owns a yacht known as Bronzewing acquired from Australia for the purpose of
selling it. The yachtat that time was also mortgaged to Asia Banking Corp to secure the
debt of Burke.
− Elser began negotiations with Burke for the purchase of the same.
− Elser had been using the yacht even before they came up with a finalized sale
agreement. Elser even paid for the repairs of the yacht.
− Now Elser saw the need to replace its engine and tried to obtain from the manager of
Asia Banking Corp a new loan but was refused.
− Sometime in April, Elser wrote a letter to Burke saying “I am in position and willing
to entertain the purchase of Yacht” followed by several terms.
− However, after 2 days, Elser wrote another letter to Burke saying that in view of the
attitude of the bank manager regarding the loan, it is impossible for him to take charge
of the boat and he made delivery thereof to Burke. Burke is now demanding from him
the performance of the offer to purchase the yacht based on their agreement.
Issue/s − Was there a definite offer and a binding sale in this case? - NO
Held − The Court ruled that it is not a definite offer. The word "entertain" applied to an act
does not mean the resolution to perform said act, but simply a position to deliberate for
deciding to perform or not toperform said act. Taking into account only the literal and
technical meaning of the word "entertain," it seems to us clear that the letter of the Elser
cannot be interpreted as a definite offer to purchase the yacht,
but simply a position to deliberate whether or not he would purchase the yacht.
 3. Korean Air v. Yuson
Facts Korean Air suffered net loss which prompted it to implement Early Retirement Program
(ERP) to its employees. They sent a memorandum offering the said ERP to their
employees on their discretion.
− Yuson accepted the early retirement offer however the general manager claimed that
she was not entitled to the ERP because she was already due for retirement and the
purpose of the ERP was for the employees who ought to work for more years in the
company.
− Yuson claimed that Korean Air was bound by the perfected contract the offer being
the memorandum sent and the acceptance the letter which Yuson sent.

Issue/s − Was there a perfected contract between Yuson and Korean Air? – NO
Held − For an offer to be certain, a contract must come into existence by the mere acceptance
of the offeree without any further act on the offeror’s part. The offer must be definite,
complete and intentional.
− In the present case, the offer is not certain.
− The memorandum clearly states that, "MNLSM Management, on its discretion, is
hereby offering the said early retirement program to its staff"
− Also, applications for the ERP were forwarded to the head office for approval, and
further acts on the offeror’s part were necessary before the contract could come into
existence
 4. Batañgan v. Cojuangco
Facts − A case was pending between the parties in the civil courts when a statement was made
by Cojuangco wherein she promised on her part to resell the land in question to
Batañga. However, judgment was
rendered in the case before Batañgan agreed to the offer.
− Batañgan, offered payment for what he purported to be a compromise agreement
between him and Mrs. Cojuangco.
− Cojuangco refused several tenders of payment saying that no such agreement exists.
Batañgan instituted an action to compel Mrs. Cojuangco to comply with the agreement.

Issue/s − Was Cojuangco’s acceptance duly accepted by Batañgan? – NO acceptance was late
Held − An offer of compromise settlement must be accepted within a reasonable time. And
acceptance or rejection of an offer of compromise may be inferred from circumstances.
− The Batañgan’s failure to act on the offer before the judgment was entered was an
implied rejection of said offer. In pushing the appeal to final conclusion the he made it
clear that he was not interested in his
creditor's liberal concession.
− A compromise has for its purpose the avoidance or termination of a law suit.
Acceptance in order to conclude the agreement must in every respect meet and
correspond with the terms and conditions of the
offer.
− Granting that the appellant acted on time, payment of P800 fell short of the appellee's
requirement. The appellee wanted P1, 508.28 in cash. This was the least she was
entitled to, being the amount which the court below had found to be due her.
 5. Zayco v. Serra
Facts − Zayco and Serra entered into an option contract to buy Palma Central for 1 million
pesos and that in case the party cannot pay the whole, then he will be given a period not
exceeding 3 years to pay the balance.
− Zayco wrote a letter to Serra accepting the contract and placing at his disposal a cash
order of BPI of P100,000, in part payment. He demanded Serra to execute the deed of
sale.
− Serra argued that since the contract does not specify the amount of initial payment
and the part to be paid within 3 years in the contract, Zayco’s acceptance is not
sufficient to perfect the contract.

Issue/s − Was there a perfected contract between Zayco and Serra? – NO

Held − Zayco’s acceptance could not, in itself, convert the offer of sale made by Serra as
provided in their option contract into a perfect contract. His acceptance did not imply
conformity with the offer of Serra, but only when the latter shall, in turn, have accepted
his proposal that the amount to be paid in the first payment was P100,000.
− The amount of the first payment and the balance to be paid within 3 years were not
determined in the option contract. Consequently, when Zayco accepted the offer,
tendering the sum of P100,000 as first payment, his acceptance involved a proposal, not
contained in the offer, that this precisely, and not any other, should be the amount of the
first payment. This proposal, in turn, required the acceptance on the part of Serra.
 6. Villanueva v. CA
Facts -The disputed lots were originally owned by the spouses Celestino Villanueva and
Miguela Villanueva, acquired by the latter during her husband's sojourn in the United
States since 1968.

-Sometime in 1975, Miguela Villanueva sought the help of one Jose Viudez, the then
Officer-in-Charge of the PVB branch in Makati if she could obtain a loan from said
bank. Jose Viudez told Miguela Villanueva to surrender the titles of said lots as
collaterals.

-And to further facilitate a bigger loan, Viudez, in connivance with one Andres
Sebastian, swayed Miguela Villanueva to execute a deed of sale covering the two (2)
disputed lots, which she did but without the signature of her husband Celestino.

-The PVB was placed under receivership pursuant to Monetary Board (MB) Resolution
No. 334 dated 3 April 1985 and later, under liquidation pursuant to MB Resolution No.
612 dated 7 June 1985. Afterwards, a petition for liquidation was filed with the RTC of
Manila, which was docketed as Sp. Proc. No. 85-32311 and assigned to Branch 39 of
the said court.

-On 26 May 1987, Ong tendered the sum of P100,000.00 representing the balance of the
purchase price of the litigated lots. 10 An employee of the PVB received the amount
conditioned upon approval by the Central Bank liquidator.

-Ong's demand for a deed of conveyance having gone unheeded, he filed on 23 October
1987 with the RTC of Manila an action for specific performance against the Central
Bank. 12 It was raffled to Branch 47 thereof. Upon learning that the PVB had been
placed under liquidation, the presiding judge of Branch 47 ordered the transfer of the
case to Branch 39, the liquidation court.
Issue/s -Do petitioners have a better right than private respondent Ildefonso Ong to purchase
from the Philippine Veterans Bank (PVB) the two parcels of land -YES
Held -In a nutshell, the insolvency of a bank and the consequent appointment of a receiver
restrict the bank's capacity to act, especially in relation to its property, Applying Article
1323 of the Civil Code, Ong's offer to purchase the subject lots became ineffective
because the PVB became insolvent before the bank's acceptance of the offer came to his
knowledge.
-Hence, the purported contract of sale between them did not reach the stage of
perfection. Corollarily, he cannot invoke the resolution of the bank approving his bid as
basis for his alleged right to buy the disputed properties.
 7. Laudico v. Arias
Facts − Arias wrote a letter to Laudico giving him an option to lease the building to a third
person. Laudico presented Mr. Fred Harden, as the party desiring to lease the building.
− After negotiations, Laudico wrote a letter to Mr. Arias advising him that all his
propositions, as amended and supplemented, were accepted. This letter of acceptance
was received by Arias at 2:53pm of that day.
-On that same day, at 11:25am, Arias had also sent a letter of revocation to Laudico
withdrawing the offer to lease the building.
Issue/s − Was there a valid acceptance of the offer? – NO
Held − The Court held that an acceptance by letter does not have any effect until it comes to
the knowledge of
− the offerer. Therefore, before he learns of the acceptance, the latter is not yet bound
by it and can still withdraw the offer. There was no meeting of the minds, through offer
and acceptance, which is the essence of the contract.
− While there was an offer, there was no acceptance, and when the latter was made and
could have a binding effect, the offer was then lacking. Though both the offer and the
acceptance existed, they did not meet to give birth to a contract.
 8. Ang Yu Asuncion v. CA
Facts Facts:
Petitioners Ang Yu Asuncion et. al. are lessees of residential and commercial spaces
owned by the Unjiengs. They have been leasing the property and possessing it since
1935 and have been paying rentals.

In 1986, the Unjiengs informed Petitioners Ang Yu Asuncion that the property was
being sold and that Petitioners were being given priority to acquire them (Right of First
Refusal). They agreed on a price of P5M but they had not yet agreed on the terms and
conditions. Petitioners wrote to the Unjiengs twice, asking them to specify the terms
and conditions for the sale but received no reply. Later, the petitioners found out that
the property was already about to be sold, thus they instituted this case for Specific
Performance [of the right of first refusal].

The Trial Court dismissed the case. The trial court also held that the Unjieng’s offer to
sell was never accepted by the Petitioners for the reason that they did not agree upon the
terms and conditions of the proposed sale, hence, there was no contract of sale at all.
Nonetheless, the lower court ruled that should the defendants subsequently offer their
property for sale at a price of P11-million or below, plaintiffs will have the right of first
refusal.

The Court of Appeals affirmed the decision of the Trial Court.

In the meantime, in 1990, the property was sold to De Buen Realty, Private Respondent
in this case. The title to the property was transferred into the name of De Buen and
demanded that the Petitioners vacate the premises.

Because of this, Petitioners filed a motion for execution of the CA judgement. At first,
CA directed the Sheriff to execute an order directing the Unjiengs to issue a Deed of
Sale in the Petitioner’s favour and nullified the sale to De Buen Realty. But then, the
CA reversed itself when the Private Respondents Appealed.

Issue/s 1. Whether or not the Contract of Sale is perfected by the grant of a Right of First
Refusal.
2. Whether or not a Right of First Refusal may be enforced in an action for
Specific Performance.

Held 1. No. A Right of First Refusal is not a Perfected Contract of Sale under Art. 1458
or an option under Par. 2 Art 1479 or an offer under Art. 1319. In a Right of
First Refusal, only the object of the contract is determinate. This means that no
vinculum juris is created between the seller-offeror and the buyer-offeree.
2. No. Since a contractual relationship does not exist between the parties, a Right
of First Refusal may not be enforced through an action for specific
performance. Its conduct is governed by the law on human relations under Art.
19-21 of the Civil Code and not by contract law.
 9. Sanchez v. Rigos
Facts − An Option to Purchase was executed by Rigos in favor of Sanchez, where the former
“agreed, promised and committed to sell” a parcel of land in Nueva Ecija to the latter
for the price of Php1,510.
− The option must be made within 2 years from the date of the issuance of the option.
− Sanchez made several tenders of payment as way of buying the land, which Rigos
rejected. This prompted Sanchez to consign the said payment, and ask for special
performance on the part of Rigos.
Issue/s − Can Rigos be compelled to sell the property? – YES
Held − An Option to Purchase did not bind Rigos to sell or Sanchez to buy. It is unilateral,
not binding as a contract, unless an acceptance to the offer/option/promise is made
before the expiration of the period given and before the promiser/prospective vendor
withdraws his promise, in which case, it becomes a bilateral reciprocal contract to buy
and sell. In the case at bar, Sanchez had shown his acceptance by his tenders of payment
even before Rigos withdrew the option, and even before the period expired.
 10. Jardine Davies v. CA
Facts Purefoods held a bidding for the purchase of 2 generators. In its letter, they awarded the
contract to FEMSCO. In the letter, there are 6 conditions stated. After sometime,
Purefoods unilaterally cancelled the contract. Femsco protested but before the matters
can be resolved, Purefoods awarded the contract to Jardine.
Issue/s Was there a perfected contract between Purefoods and Femsco? - YES
Held The court ruled that there was already a perfected contract between Purefoods nd
Femsco.

The letter by Purefoods constituted acceptance by Femsco. The conditions in the letter
were not conditions where the perfection of contract was dependent rather they were
conditions in performing the obligation. Even if weassume that the letter was a
conditional counter offer, subsequent acts such as the return of the bidding bond and
the payment of the all-risk insurance policy confirmed that there was already a perfected
contract.
 11. Bambalan v. Maramba
Facts − There was an alleged contract between Isidro Bambalan and Maramba regarding the
sale of the land in question. Isidro Bambalan at time of the execution of the contract
was a minor.
Issue/s − Was the contract valid? – NO
Held − The document is vitiated to the extent of being void as regards the said plaintiff, for
the reason that the latter, at the time he signed it, was a minor, which is clearly shown
by the record and it does not appear that it was his real intention to sell the land in
question.
− In the case now before us the plaintiff did not pretend to be of age; his minority was
well known to the purchaser, the defendant, who was the one who purchased the
plaintiff's first cedula used in the acknowledgment of the document.
 12. Mercado, et al. v. Espiritu
Facts − This is a case of active misrepresentation made by Domingo and Josefa Mercado who
now asks the court to declare the deed of sale with respect to Espiritu annulled for they
signed said contracts during their
minority.
− It could be deduced from the long line of facts that when the instrument was being
crafted, Domingo and Josefa, as revealed upon perusal of the evidences presented stated
that they were of legal age at the time they executed and signed it. (They were 18 and
19, legal age then was 21)

Issue/s − Can the deed of sale be validly declared annulled? - NO

Held − No evidence appears in the record that the plaintiffs Josefa and Domingo Mercado
were in fact minors, for no certified copies were presented of their baptismal
certificates, nor did the plaintiffs adduce any supplemental evidence.
− Even assuming that there is sufficient evidence to warrant the petitioners claims that
they were minors, the sale of real estate made by minors who pretend to be of legal age,
when in fact they are not, is valid, and they will not be permitted to excuse themselves
from the fulfillment of the obligations contracted by them.
 13. Braganza v. de Ville Abrille
Facts − Rosario Braganza and her sons Rodolfo (18 yrs old) and Guillermo (16 yrs old) issued
a promissory note in favor of Abrille for the loan they received from him. Because of
failure to pay, Abrille sued Braganza.

Issue/s − Can the defense of minority be invoked by Rosario Braganza even though there was
failure to disclose minority in the note? – YES
Held − In order to hold the minor liable the fraud must be actual and not constructive. There
was no active misrepresentation on the part of the minors and no explicit mention of
majority was made by the minors in executing the instrument Therefore, the minors
cannot be legally bound by their signatures.
− However, these minors may not be entirely absolved from monetary responsibility. In
accordance with the provisions of Civil Code, even if their written contact is
unenforceable because of non-age, they shall make restitution to the extent that they
have profited by the money they received.
 14. Hernandez v. Hernandez
Facts − Respondent Cecilio Hernandez was appointed by his family to be their representative
in the expropriation
case involving a parcel of land they own in Sto. Tomas, Batangas.
− When the trial court arrived at the amount of just compensation, it ruled that the full
amount should be given to the attorney-in-fact (Cecilio).
− When Cornelia, a part-owner of the land, sought her share in the just compensation,
Cecilio issued her a
check with an amount of ONE MILLION accompanied by a Receipt and Quitclaim
document. Because of the urgent need of Cornelia for money, she signed the Receipt
and Quitclaim document. When she learned of the actual amount she is entitled to
which is SEVEN MILLION, she filed for the annulment of the said document together
with Recovery of the remaining sum of money.

Issue/s − Was the receipt, and the quitclaim, valid? – NO

Held − What is on record is that Cornelia asked for an accounting of the just compensation
from Cecilio several times, but the request remained unheeded. Right at that point, it
can be already said that Cecilio violated the fiduciary relationship of an agent and a
principal.
− Instead of an accounting, what Cornelia received was a receipt and quitclaim
document that was ready for signing. As testified to by Cornelia, due to her frail
condition and urgent need of money in order to buy medicines, she nevertheless signed
the quitclaim in Cornelio’s favor.
− Quitclaims are also contracts and can be voided if there was fraud or intimidation that
leads to lack of consent. Based on the attending circumstances, the receipt and quitclaim
document is an act of fraud perpetuated by Cecilio.
 15. Gomez v. Linton
Facts − Petitioner Gomez Marino and Linton, et al. entered into a contract to purchase a land
in Cavite.
− Petitioner alleged that respondents failed to carry out the contract and that by reason
thereof, he lost some money.
− Respondents, on the other hand, alleged that petitioner falsely represented the
boundaries of the land and that by reason thereof, they refused to consummate the deal.
Issue/s − Was the consent given by the respondents void by reason of error and deceit? – YES
Held − The facts show conclusively that the respondents were misled and deceived by the
petitioner as to the actual boundaries of he land, and, as to the important fact, that
petitioner could not make a good title to all of the land within the boundaries.
− Respondents admit that before the signing of the contract, plaintiff took them out over
the land, which he proposed to sell and showed them the corners and exterior
boundaries.
− After the contract was signed and upon making further examinations of the record
title, it was found that a large portion of the most valuable part of the tract was not
included in the land, which the petitioner proposed to covey.
 16. Atilano v. Atilano
Facts − Eulogio Atilano I executed a deed of sale covering lot E in favor of his brother
Eulogio Atilano II while retaining for himself the only remaining portion of the land, lot
A.
− When Eulogio Atilano II became a widower, they had the land resurveyed so that it
could properly be subdivided; and it was then discovered that the land they were
actually occupying on the strength of the deed of sale executed in 1920 was lot A and
not lot E while the land which remained in the possession of the vendor, Eulogio
Atilano I was lot E and instead of A.
− The heirs of Eulogio Atilano II (plaintiffs) filed an action and demanded the return of
possession of lot E, but the defendants refused to accept the exchange.
Issue/s − Did the mistake vitiate the consent of the parties thereby affecting the validity of the
agreement? – NO
Held − Based on the facts and circumstances, the Court finds that the object thereof, as
intended and understood by the parties, was that specific portion where the vendee was
then already residing (lot A) ; and that its designation as lot E in the deed of sale was
simple mistake in the drafting of the document, and thus such mistake did not vitiate the
consent of the parties, or affect the validity and binding effect of the contract between
them.
 17. Teran v. Villanueva
Facts − A Deed of Sale was executed wherein defendants Villanueva and Viuda de Rosa sold
to plaintiff Teran a parcel of land containing an area of 34 hectares, 52 ares and 43
centares.
− An agent of the defendants accompanied Teran to investigate the land. The former
only pointed to the boundaries of the land, but did not go over all of them.
− Without further investigating the area of the land, Teran purchased it. Unfortunately,
after acquiring a sketch of the said land from proper authorities, Teran found out that
the land actually contained only 10 hectares. He now wanted to rescind the contract.
Issue/s − Was the sale binding even though the actual land is smaller than what is written on
the deed? – YES
Held − The Court ruled against Teran. He obviously had ample opportunity to investigate the
conditions of the land, without any hindrance from the defendants, because of this he
had no right to allege that the vendors made false representation. Besides, no evidence
shows that the area was an essential element of the contract. A mistake on an element
not essential to the contract could not vitiate the same.
− Furthermore, parties did not consider the area as an essential element of the contract.
Teran could not now argue that a mistake on an element not essential to the contract
vitiated the whole obligation.
 18. Tan v. Mandap
Facts − The Mandaps are the legitimate children of Mandap Sr. and Maria Mandap. When
their parents parted ways, the respondents opted to stay with Maria.
− Mandap Sr., until his death, lived with Diorita Dojoles. He suffered from diabetes
since 1931, became totally blind in 1940, and was crippled for about 10 years until his
death.
− Before his death on May 25, 1989, he conveyed the subject properties to his common-
law wife’s sister, Elenita Dojoles Vasquez; and her husband, Crispulo Vasquez. Such
sale was challenged by the Mandaps stating that the sale of subject properties by their
father was fictitious, and without any consideration.
Issue/s − Was the sale between Mandap Sr. and the Vasquez spouses valid? – NO
Held − At the time Dionisio Mandap, Sr., purportedly sold the lots in question to the Vasquez
spouses, he was already totally blind and paralyzed. He could not possibly have read the
contents of the deeds of sale. He could not have consented to a contract whose terms he
never knew nor understood. It cannot be presumed Mandap, Sr., knew the contents of
the deeds of sale disposing of his properties.
− As the party seeking to enforce the contract, the petitioners should have presented
evidence showing that the terms of the deeds of sale to the Vasquez spouses were fully
explained to Mandap, Sr. But petitioners failed to comply with the strict requirements of
Article 1332, thereby casting doubt on the alleged consent of the vendor.
 19. Dela Cruz vs. Dela Cruz

Facts Pacencia dela Cruz is the owner of a parcel of land. Pacencia allegedly executed a
Deed of Sale in favor 
of her son Fortunato whereby she conveyed said parcel of
land for P21,000. 


Fortunato subsequently sold said land to Clark and Divina Gutierrez. 


Pacencia instituted an action for reconveyance of the property saying that the sale
of the property to the 
Gutierrezes was null and void and was fraudulently made by
Fortunato who has no authority to sell the 
same. 


Pacencia died and was substituted by her children, the petitioners herein. 


Petitioners fault the court a quo for failing to appreciate the fact that the Deed was
entirely and completely 
written in English, a language neither known nor
understood by their mother, against the dictates of 
Articles 1330 and 1332 of the
Civil Code.

Issue/s Was the deed executed by Pacencia simulated and thus void? – NO 


Held The Court held that for Article 1332 to apply, it must first be convincingly
established that the illiterate or 
disadvantaged party could not read or understand
the language in which the contract was written or that 
the contract was left
unexplained to said party. 


Plaintiffs failed to discharge this burden. The sale was valid. 


There is nothing on record to support sufficiently petitioners’ contention. Fortunato

declared the property 
in his name for taxation purposes and paid the realty taxes,
without any protest from Paciencia or petitioners. His actions are contrary to
petitioners’ allegation that the parties never intended to be bound by the assailed
contract. 

 20. Calilap-Asmeron v. DBP
Facts Petitioner Calilap and her brother executed a real mortgage over two parcels of land
to serve as a security 
over a loan obligation with DBP. DBP foreclosed the
mortgage and thereafter acquired the property being the highest bidder. Petitioner
Calilap and DBP had conflicting versions as to what has transpired after such
events. Calilap contends that she had not given her full consent to the deed of
conditional sale on account of her lack of legal and technical knowledge. The issue
is whether or not the provisions of the Civil Code on fraud or mistakes by an
illiterate (Art. 1332) is to be applied to petitioner Calilap. 


Issue/s Is Article 1332 applicable to the case at bar? – NO! 


Held It is quite notable that the petitioner did not specify which of the stipulations of the
deed of conditional 
sale she had difficulty or deficiency in understanding. Her
generalized averment of having been misled should, therefore, be brushed aside as
nothing but a last attempt to salvage a hopeless position. Our impression is that the
stipulations of the deed of conditional sale were simply worded and plain enough for
even one with a slight knowledge of English to easily understand. 


Nor was the petitioner’s ignorance of the true nature of the deed of conditional sale
probably true. By her own admission, she had asked the bank officer why she had
been made to sign a deed of conditional sale instead of an absolute sale, which in
itself reflected her full discernment of the matters subject of her dealings with DBP.


 21. Asian Construction v. Cathay Pacific Steel
Facts Asian Construction and Development Corporation (ACDC) purchased from Cathay
Pacific Steel Corporation (CAPASCO) reinforcing steel bars.
ACDC made few
partial payments but defaulted on the balance of P214, 704.91 which prompted
CAPASCO to file an action against ACDC. The RTC ruled in favor of CAPASCO
and ordered ACDC to pay a sum of money plus 2% interest per month. Court of
Appeals modified the interest rate into 24% per annum as this was, according to the
court, expressly provided in the sales invoice.
ACDC now contends that the Court
should follow the ruling in Eastern Shipping lines vs. CA which provided for the legal
interest of 6% per annum. CAPASCO countered saying that the sales invoices are
clear and unequivocal as regards the stipulated interest rate of 24% per annum.


Issue/s Should the stipulated interest rate on the sales invoice be followed? – YES


Held The sales invoices expressly stipulated the payment of interest and attorney’s fees
in case of overdue accounts and collection of suits. The sales invoices are in the
nature of contracts of adhesion. The court has repeatedly held that contracts of
adhesion are as binding as ordinary contracts. Those who adhere to the contract
are in reality free to reject it entirely and if they adhere, they give their consent.
By
contracting with the respondent and not objecting to the stipulations in the sales
invoice, ACDC bound itself to what is stipulated therein.
 22. Martinez v. HSBC
Facts Alejandro Macleod (husband of petitioner) was the managing partner of Aldecoa &
Co. Due to Macleod’s 
alleged acts of fraud to the prejudice of the company, HSBC
and Aldecoa & Co. filed charges. But before the filing, Macleod went to Macao, a
territory not covered by extradition treaties to escape the criminal charges. 


The respondents proposed a settlement that if the wife of Macleod assented to the
requirements of defendants, the civil suit against her and her husband would be
dismissed and the criminal charges against her husband would be withdrawn; but if
she refused, her husband must either spend the rest of his life in Macao or be
criminally prosecuted. 


Wife assented to the settlement: the respondents had taken possession of spouses’
properties, the charges were dismissed and withdrawn, and her husband returned
to Manila. 


Wife negotiated for a portion of land in Malate but the respondents refused. The
wife now argues that the agreement cannot be binding because her consent was
obtained under duress. 


Issue/s Was the consent of the wife obtained under duress thus rendering the
agreement void? – NO 


Held In the case at bar, it is not sufficient nor conclusive that the petitioner now regrets
having entered into the 
contract and that she disliked entering into such. Petitioner
was given the opportunity to take the advice of her attorneys and if ever there were
threats, it was not made directly to her because it was her attorneys who
negotiated. 


Cases where duress is applicable or present: 


1. in cases where there was no time within which to deliberate the matter as it
should have been 
deliberated 


2. there was no time or opportunity to take the advice of friends or of disinterested

persons 


3. there was no time or opportunity to take the advice of counsel 


4. the threats made to secure the performance of the act complained of were made
directly to the 
complaining party 


5. there was no consideration for the performance of the act complained of except
immunity from the 
prosecution threatened 


6. the property transferred or encumbered was the separate property of the person
performing the act in 
which the person for whom the act was performed claimed no
interest whatever 


7. there was no dispute as to the title of the property transferred or encumbered, no

claim made by anybody and no pretension that it could be taken for the debts of the
 husband or any other person.

23. Bañez v. CA
Facts Pio Arcilla was a squatter in the land owned by PHHC. PHHC awarded such lot to
Cristeta Laguihon by 
virtue of a contract to sell. When Cristeta died, she was
survived by her father, Basilio. 


Basilio requested for the transfer of said land to Bañez, to whom Cristeta was
indebted. 


Mr. Epis (Head Executive Assistant), after restudying the matter, considered the
transfers from Cristeta to 
Basilio, and from the latter to Bañez, to be proper and
meritorious, and recommended the approval of the 
same. 


CA held that the approval of the transfer of the rights to the lot was due to the
intercession of the then 
Senator Estanislao Fernandez. 


Issue/s Was the letter of Senator Fernandez constitutive of undue influence? – NO 


Held The evidence on which the finding of the Court of Appeals that the PHHC
accommodated petitioners 
because of the intercession of whoever wrote "Exhibit
C, has no evidentiary basis, for Exhibit C was 
rejected by the trial court" for being
immaterial, irrelevant, impertinent and not properly identified. 


But assuming that the letter was written by Senator Fernandez, it cannot be implied
from the facts of the 
case that the transfer of rights from Basilio to Bañez was
approved solely on the strength of such letter, for the approval of the transfer was
recommended as "extremely meritorious" by the Head Executive Assistant, and by
the Homesite Sales Supervisor. 


This Court has already said that 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 others. Influence obtained by
persuasion or argument or by appeals to the affections is not prohibited either in law
or morals, and is not obnoxious even in courts of equity. Such may be termed "due
influence." 

 24. Vales v. Villa

Facts Plaintiff Vales owned certain properties in Ermita to which he conveyed in favor of
defendants for the 
consideration of his Php25,000 debt to the latter. The
conveyance had a clause giving Vales right to 
repurchase the properties within
one year, but he failed to do so. 


Some of the properties were then sold. Vales now wished to set aside the
conveyance on the ground that 
his consent was obtained by undue influence. He
thought it was insane for a man to sell his properties valued at Php78,515 for
Php25,000, so the only explanation he could think of was that he was deceived
into agreeing to the conveyance. 


Issue/s Was there undue influence placed upon Vales? – NO

Held No deception took place in this case. Although Vales was in a disadvantageous
position, he acted 
independently and voluntarily. The only fear he had that time
was the fear of losing his properties. He could have gone to courts to recover his
properties, instead he continued dealing with the defendants, and even
repurchased the properties from them years later. The court took it as his way of
accepting all that had happened to his person, no matter how unfavorable. 

 25. Strong v. Gutierrez
Facts Mr. Strong owned 800 shares of the capital stock of the Philippine Sugar Estates
Development Company, 
Limited, an anonymous society formed to hold the
Dominican friar lands. 


Gutierrez bought such shares from Jones which was alleged to be an agent of Mrs.
Strong. Mrs. Strong 
contends that Jones had no power to sell or deliver her stock
in the Philippine Sugar Estates Development Company, Limited; and that its sale,
through her agent, was procured by fraud on the part of the defendant.

Issue/s Was Jones authorized and was there fraud in the sale? – NO authority, NO
fraud 


Held We fail to find proof of an effective power given Jones to dispose of this stock. The
difficulty of this 
branch of the case is the scantiness of the evidence. 


The defendant violated no duty in not communicating to the plaintiff his purpose in
buying her shares and 
has been guilty of no fraud. 


The machinations with which the defendant is charged consist in the suppression of
his identity while 
negotiating for the stock and were paying for it and also of his
intention as majority stockholder in the company to close the negotiation then
pending with the Government for the sale of the friar lands owned by the company.
The prospect of such a sale would have materially affected the price of the stock. 


This negotiation and the defendant's management of it in behalf of the vendors was
known to Jones and had been for same time a matter of public notoriety and
newspaper comment in the Islands 

 26. Woodhouse v. Halili
Facts Woodhouse and Halili entered into a contract for organizing a partnership
Woodhouse as an industrial 
partner or manager and Halili as a capitalist for
Mission softdrinks bottling and distribution. 


After Woodhouse and Halili signed a contract, they went to US where they entered
into a franchise 
agreement with Mission Dry Corporation. 


When the plant was already operating, Woodhouse demanded that partnership
papers be executed which 
Halili never did. 


Woodhouse sued Halili but Halili claimed that Woodhouse falsely represented
himself as the owner or 
was about to become owner of the franchise when in fact
the franchise was given to Halili himself. 


Issue/s Was there false representation by Woodhouse as the sole owner of the
franchise? – YES 


Held The defendant was made to believe, and he actually believed, that plaintiff had the
exclusive franchise. 
Defendant would not perhaps have gone to California and
incurred expenses for the trip, unless he believed that plaintiff did have that
exclusive privilege, and that the latter would be able to get the same from the
Mission Dry Corporation itself. 


This Court had held that in order that fraud may vitiate consent, it must be the
causal (dolo causante), not merely the incidental (dolo causante), inducement to the
making of the contract. 


The record abounds with circumstances indicative that the fact that the principal
consideration, the main cause that induced defendant to enter into the partnership
agreement with plaintiff, was the ability of plaintiff to get the exclusive franchise to
bottle and distribute for the defendant or for the partnership. 


The principal obligation that he assumed or undertook was to secure said franchise
for the partnership, as the bottler and distributor for the Mission Dry Corporation.
We declare, therefore, that if he was guilty of a false representation, this was not
the causal consideration, or the principal inducement, that led plaintiff to enter into
the partnership agreement. 


We conclude from the above that while the representation that plaintiff had the
exclusive franchise did not vitiate defendant's consent to the contract, it was used
by plaintiff to get from defendant a share of 30 per cent of the net profits; in other
words, by pretending that he had the exclusive franchise and promising to transfer it
to defendant, he obtained the consent of the latter to give him (plaintiff) a big slice in
the net profits. This is the dolo incidente defined in article 1270 of the Spanish Civil
Code, because it was used to get the other party's consent to a big share in the
profits, an incidental matter in the agreement. 

 27. Cacho v. Bonifacio
Facts Respondent Bonifacio spouses leased 3 commercial stalls to Edira Food
Corporation owned by the 
spouses David. Due to nonpayment despite repeated
demands, respondents filed a complaint for unlawful 
detainer against David. 


Meanwhile, a new lease contract was executed by petitioner Cacho and David
(lessees) and respondents 
(lessors) over the same premises. Judgment was
rendered by the MTC against David concerning the 1st lease and a writ of
execution was issued. 


The writ was served upon petitioner’s son, levying upon the personal properties
found inside the leased premises. Petitioner filed a complaint for annulment of the
MTC decision and damages with the RTC alleging that the decision and the writ of
execution was obtained by fraud, malice and bad faith, as a consequence of which,
she suffered damages. 


RTC dimissed the complaint for annulment of the MTC decision but declared the
execution of the writ as void and awarded damages to the plaintiff. 


CA alleged that the RTC erred in awarding the damages while dismissing the
prayer for annulment of the MTC decision. 


Issue/s Is the petitioner entitled to damages due to the writ of execution being
obtained by fraud? – YES 


Held The RTC found that respondents had the writ of execution implemented against
petitioner even if she was 
not a party in Civil Case No. 1800 and that, in doing so,
respondents acted in bad faith. In the course of 
the implementation of the writ of
execution, they ordered the sheriff to padlock the leased premises. 


The closure of the premises caused damage to petitioner by way of unrealized

profits of P2,000 for each 
day the restaurant did not operate. 


The appellate court itself found that respondents' act of reviving Civil Case No.
1800 without impleading 
petitioner (who, as respondents were very much aware,
was the one already occupying and actively managing the restaurant) was "very
revealing of their dishonest intention and bad faith that resulted to (sic) [the]
prejudice and damage" of petitioner. 

 28. Araneta v. De Paterno
Facts Paz Tuason owns a residential land in Santa Mesa, Manila where it was occupied
by lessees. Their 
contract of lease contained a provision that should Paz Tuason
sell the land, the lessees shall be give 
preferential right to buy their leaseholds. 


Paz Tuason obtained a loan from Vidal which was secured the by the subject land.



When Paz Tuason decided to sell the land to Gregorio Araneta, Inc., most of the
tenants took advantage 
of their preferential rights to buy their leaseholds. 


When there were only 11 unencumbered lots, Paz Tuason and Gregorio Araneta,
entered into an absolute 
deed of sale (Exhibit A). Paz Tuason offered to pay his
mortgage obligation but Vidal refused. 


Gregorio Araneta now files an action to compel Paz Tuason to deliver to him a clear
title to the lots. 


It was alleged that Attorneys Salvador Araneta and J. Antonio Araneta who Paz
Tuason said had been her 
attorneys and had drawn Exhibit A, and not informed or
had misinformed her about its contents; that being English, she had not read the
deed of sale; that if she had not trusted the said attorneys she would not have been
so foolish as to affix her signature to a contract so one-sided. 


Issue/s Was there fraud in obtaining the consent of Paz Tuason? – NO

Held It is difficult to believe that the defendant was deceived into signing Exhibit A, as
she had been intelligent 
and well educated in managing her affairs, she had an
able attorney who was assisting her in the suit against Vidal, a case which was
instituted precisely to carry into effect Exhibit A or Exhibit 1, and a son who is
leading citizen and a business-man and knew the English language very well if she
did not. 


If the defendant signed Exhibit A without being apprised of its import, it can hardly
be conceived that she did not have her attorney or her son read it to her afterward.



Only after she was confronted with the signed copy of the document on the witness
did she spring up the defense of fraud. It would look as if she gambled on the
chance that no signed copy of the deed had been saved from the war. 

 29. Tuason v. Marquez
Facts Respondent Marquez gave an option to Antonio Tuason for the purchase of the
Lucena electric light 
plant. The option was taken advantage of by petitioner
Mariano Tuason and the contract was then 
formulated. 


It appears that Lucena Electric Co. was granted a 35-year franchise but prior to the
accomplishment of the 
contract between Tuason and Marquez, Marquez
announced his intention to give up the franchise. 


Subsequent to the accomplishment of the contract, Public Utility Commissioner

declared the cancellation 
of the franchise 


Tuason asks for judgment against Marquez and for the rescission of the contract on
the ground of 
misrepresentation and fraud. 


Issue/s Is Marquez guilty of fraud? – NO 


Held It must be emphasized that in making mention of the property of the electric light
company, merely 
renewed a previous inventory of the property. The franchise,
therefore, was not a determining cause of the 
purchase. 


The franchise was then in force and either party could have easily ascertained its
status by applying at the 
office of the Public Utility Commissioner. 


The innocent non-disclosure of a fact does not affect the formation of the contract or
operate to discharge 
the parties from their agreement. The maxim caveat emptor
should be recalled. 

 30. Songco v. Sellner
Facts Sellner, the defendant, entered into a contract with Songco, plaintiff. Sellner
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, Sellner 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. 


The petitioner was contending that promissory note in question was obtained from
the defendant by 
means of certain false and fraudulent representations therein
specified. Songco estimated that this cane would produce 3,000 piculs of the sugar
and that Sellner bought the crop believing this estimate to be substantially correct.
As the crop turned out it produced 2,017 piculs, gross, and after the toll for milling
was deducted the net left to Sellner was very much less. 


Issue/s Was the contract void because Sellner’s consent was obtained through
fraud? – NO

Held We think it is fairly shown by the evidence that Songco knew at the time he made
the representation in 
question that he was greatly exaggerating the probable
produce of his fields, and it is impossible to believe that his estimate honestly
reflected his true opinion. He knew what these same fields had been producing over
a long period of years; and he knew that, judging from the customary yield, the
harvest of this year should fall far below the amount stated. Sellner was bound and
that 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. 


It is not every false representation relating to the subject matter of a contract which
will render it void. It must be as to matters of fact substantially affecting the buyer's
interest, not as to matters of opinion, judgment, probability, or expectation. 

 31. Songco v. Sellner (2)
Facts Sellner, the defendant, entered into a contract with Songco, plaintiff. Sellner
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. 


Songco estimated that this cane would produce 3,000 piculs of the sugar and that
Sellner bought the crop 
believing this estimate to be substantially correct. As the
crop turned out it produced 2,017 piculs. 


It appears that in the course of negotiations Sellner requested Songco to guarantee

the quantity which the 
latter claimed to be in fields but he would not do so. 


He, however, repeated that he was sure the fields contained the quantity estimated
by him.

Issue/s Was the consent of Sellner’s consent was vitiated due to the fact that there
was misrepresentation done 
by Songco? – NO 


Held Sellner was bound and that 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. 


When the purchaser undertakes to make an investigation of his own, and the seller
does nothing to prevent this investigation from being as full as he chooses to make
it, the purchaser cannot afterwards allege that the seller made misrepresentations.


 32. Hill v. Veloso
Facts Veloso and Franco executed a promissory note wherein they promised to pay
Michael and Co 6,000 
pesos. The note was indorsed to Hill in which 2000 was
already collected. For the collection of the 
remaining amount, this case was filed
by Hill. 


Defendants alleged that when Franco was still alive, Atty. Levering suggested to
him that they execute a 
document wherein the Velosos would promise to pay Atty.
Levering, the guardian of the minor children of the Velosos, 8,000 pesos so that he
can pay the debt of the Velosos which they owed their former guardian. Franco
allegedly made them sign a blank sheet of paper, which he said would be filled out
in his office afterwards. After his death, it turned out that Franco never executed the
document, and a promissory note was created in the paper instead. 


Defendants alleged that they had had no transaction whatever with Michael & Co.,
S. en C., nor with the plaintiff, and as they had not received any kind of goods
whatever from said firm. 


Issue/s Can the defense of deceit be used in this case to nullify the promissory note?
– NO

Held The deceit, in order that it may annul the consent, must be that which the law
defines as a cause. 


Domingo Franco is not one contracting party with regard to Maximina Ch. Veloso as
the other 
contracting party. They both are but one single contracting party in
contractual relation with, or as 
against, Michael & Co. 


Domingo Franco, like any other person who might have been able to to induce
Maximina Ch. Veloso to 
act in the manner she is said to have done, under the
influence of deceit, would be, for this purpose, but a third person . There would then
not be deceit on the part of the one of the contracting parties exercised upon the
other contracting party, but deceit practiced by a third person. 


Deceit by a third person does not in general annul consent, and in support of this
opinion it is alleged that, in such a case, the two contracting parties act in good
faith. 

 33. Asiasin v. Jalandoni

Facts Asiain is the owner of Hacienda Maria while Jalandoni is the owner of another
hacienda adjoining that of 
Asiain. 


Asiain offered to sell a portion of his hacienda to Jalandoni affirming that it

contained MORE OR LESS 
between 25 and 30 hectares and would produce not
less than 2,000 piculs of sugar. Jalandoni was doubtful as to the extent of the land
and the amount of crop on it but sometime later, the two eventually entered into an
agreement for the sale. 


Once in the possession of the land, Jalandoni was able to find out that the land is
only 18 hectares and is capable of producing only 800 piculs. Asiain filed a
complaint to recover the unpaid balance of the price from Jalandoni while Jalandoni
filed a counter-complaint to annul the contract. 


Issue/s Was the misrepresentation made in good faith, and does it constitute as a
ground for rescission? –YES 


Held There was no fraud on Asiasin’s part but rather a mutual mistake on both parties.
Since the mistake is so material as to go to the essence of the contract, it is a
ground for relief and rescission. Innocent and mutual mistake alone are sufficient
grounds for rescission. 


It is well settled hat a purchaser of land, when it is sold in gross, or with the
description “more or less” does not thereby ipso facto take all the risk of quantity in
the tract. 


If the difference between the real and represented quantity is very great, both
parties act obviously under a mistake which it is the duty of the court of equity to
correct. 


Mutual mistake of the contracting parties which is so material as to go to the

essence of the contract is a ground for relief and rescission. 

 34. Rodriguez v. Rodriguez
Facts Concepcion, a widow, entered into a second marriage with Domingo. 


As under her paraphernal property, Concepcion sold two of her fishponds to her
daughter (of the first 
marriage) for the sum of 2500. Subsequently, Concepcion’s
daughter transferred the same properties to 
her mother Concepcion and stepfather
Domingo. 


When Domingo died, Concepcion and the children of Domingo (of his first marriage)
partitioned the 
fishponds named under the conjugal properties among themselves.
When the relationship of Concepcion with Domingo’s children turned problematic,
she filed an action to declare the conveyances made upon the fishponds null and
void. 


She contends that the transfer was based on the alleged employment or exercise
Domingo of force and pressure on her; that the conveyances of the properties —
from Concepcion to her daughter and then to the conjugal partnership of her
marriage with Domingo— are both without consideration

Issue/s Were the contracts simulated and without consideration, thus void? – NO 


Held The characteristic of simulation is the fact that the apparent contract is not really
desired or intended to 
produce legal effects or in way alter the juridical situation of
the parties. 


Concepcion and her daughter must have intended the two conveyance to be real
and effective; for 
appellant could not intend to keep the ownership of the fishponds
and at the same time vest half of them 
in her husband. 


Since in each conveyance the buyer became obligated to pay a definite price in
money, 2.5k in the first 
and 3k in the second, such undertaking constituted in
themselves actual causa or consideration for the conveyance of the fishponds. The
considerations need not pass from one party to another at the time the contract is
entered into. 

 35. Gonzales v. Trinidad
Facts Respondents Primitivo Trinidad and Ynares executed in favor of petitioners
Gonzales and Alfredo 
Trinidad a deed of sale of an urban property in Manila. As
the property was mortgaged to the Bureau of 
Lands for P6,500, the purchasers
assumed the encumbrance. 


The sale was simulated but the supposed vendors did not receive the alleged price,
the idea being to save 
the property, which was fictitiously sold, from attachment by
Dr. Ramon Papa to whom Lorenzo Perez 
had endorsed a note for P4,000
executed and signed by Primitivo. 


Dr. Papa however died and the credit represented by the note was adjudicated to
Carmen Papa with whom 
the said Primitivo had a subsequent agreement to the
effect that he would pay the note as soon as he had 
the money. Thus the litigation
and attachment which Primitivo feared were averted.

Issue/s Was the contract of sale null and void for being simulated? – YES

Held The contract of sale, being onerous has for its cause or consideration the price of
P10,000; and both this 
consideration as well as the subject matter of the contract
namely, the property, are lawful and not penalized by law. However, as the contract
was fictitious and simulated and the supposed vendors did not receive the
stipulated price, the consideration being thus lacking, said contract is null and void
per se or non-existent.
 36. Borromeo v. Borromeo
Facts Johanna Borromeo, widow of the late Dr. Maximo Borromeo, brought an action
alleging that before the 
death of her husband and at the time when he was
seriously ill and bedridden, her husband signed, or was made to sign, a fictitious
deed of sale of said property in favor of the defendants purporting to convey a
conjugal property to them for P3k when the property was assessed to be worth
P42k and had a market value of P80k. 


Petitioner sought to declare the sale as null and void.

Issue/s Was the sale during the lifetime of Johanna’s husband fictitious? – YES 


Held In the case at bar the sale is alleged to be fictitious because no payment of the
stated price was made. The sale, therefore, was non-existent, because one of the
elements, that of consideration, was absent.
In cases where no consideration
exists, the contracts or agreements lack one of the essential elements for their
validity , namely, cause or consideration, and, therefore, they are considered as
non-existent. It is under this category (of non-existent contracts) that the fictitious
sale, alleged in the case at bar to have been executed by the husband without
consideration or with false consideration, falls.
 37. Bravo Guerrero v. Bravo
Facts Spouses Mauricio and Simona owned two parcels of land with. Simona executed a
general power of attorney in favor of Mauricio, granting him authority to mortgage or
sell the properties.
Mauricio carried out a Deed of Sale to his son Roland, and
grandchildren, Ofelia and Elizabeth (as vendees). The sale was conditioned on the
payment of Php1, 000. Mauricio and Simona died.
In 1997, Edward, one of the
spouses’ grandchildren, filed for judicial partition of the lands, and for the annulment
of the Deed of Sale on the ground that it was simulated to prejudice the other heirs
as shown by the grossly inadequate consideration.

Issue/s Was the deed of sale simulated? – NO


Held Respondents had not proved any of the instances that would invalidate the Deed of
Sale. If anything, the deed only has gross inadequacy (two parcels of land for only
Php1,000) of price. Besides, the Deed of Sale was executed in 1970; the
consideration might be considered inadequate in the present time, but in 1970, it
might have been sensible.
Simulation of contract and gross inadequacy of price are
distinct legal concepts. The former shows no real agreement between the parties,
hence, void. The latter may embody a true agreement between the parties,
especially as to the price negotiation in contracts of sale. It does not affect the
validity of the contract.