Asain vs Jalandoni

Facts: Plaintiff and respondent are adjacent land owners.

 Asain told Jalandoni that he is willing to sell a
portion of his lot for 55k
 He also said that the lot he would be selling would
harvest around 2000 piculs of sugar and that It is
more or less 25 hectares
 Jalandoni was doubtful but Asain repeatedly
assured him. Jalandoni paid 30k initially
 When he was in the possession of the land, he had it
surveyed and discovered that it was only 18k and
that it yielded 800 piculs of sugar
 Because the 25k remained unpaid, Asain filed an
action against Jalandoni and to obtain the
certificate plus rent
 Jalandoni filed a counter-complaint, asking for
annulment and rescission.
 CFI held mutual restitution

Issue: WON the return id proper

Held: Yes. It was a sale with a mutual mistake as regards to
the harvest and land area. The phrase “more or less” covers
only reasonable deficiency. What happened in the case was
gross deficiency.
The mistake with reference to the subject matter of the
contract is such that, at the option of the purchaser, it is
rescindable. Without such mistake the agreement would not
have been made.
Hence, the agreement is inoperative and void. The ultimate
result is to put the parties back in exactly their respective
positions before they became involved in the negotiations
and before accomplishment of the agreement.

Heirs of William Sevilla vs Leopold Sevilla

Facts: Filomena Sevilla died intestate leaving her 8 children
several properties
 Property number one was her paraphernal property
with her sisters, who were single. One sister died,
resulting to ½ share to Filomena and ½ share to
Felisa
 Leopoldo took care of Felisa. Felisa made a
donation itervivos giving leopold her ½ share of lot.
 One day, Felisa Peter executed a DPP.
 Heirs of Filomena asked for the annulment of the
Deed of Donation and DPP asserting that there is
fraud employed to Felisa being 81 and of unsound
mind
 Defendant contended that there was no fraud
involved, that Felisa gave it out of liberality, notary
public also testified that DD was given out of her
free will
 TC held that DD was valid; DPP unenforceable
because Felisa was not in capacity to give since
she already gave her share to Leopold
 CA affirmed

Issue: WON there was fraud involved?

Held.NO. One who assets fraud must prove the same.
Petitioners failed to establish that there is fraud.
HILL VS VELOSO July 24, 1915
Maximina Veloso claimed that she was tricked by her son-in-
law Domingo Franco into signing a blank document,
unknowingly binding her to a debt of P6,319 to Michael & Co.
She thought, according to her, she was made to sign to
acknowledge an obligation to pay for the guardianship of
the minor children of Potenciano Veloso (her brother?). And
that she learned of the true nature of the document (a
promissory note to Michael & Co.) only after Franco’s death.
But, clearly, her signatures on the promissory note were
obtained by means of fraud.
HELD: Granted there was deceit in executing the Promissory
Note to Michael & Co., still the deceit and error alleged
could not annul the consent of Veloso nor exempt her from
the obligation incurred. The deceit, in order that it may annul
the consent, must be that which the law defines as a cause.
“There is deceit when by words or insidious machinations on
the part of one of the contracting parties, the other is
induced to execute a contract which without them he would
not have made.” (Art 1269, Civil Code) Franco was not one
of the contracting parties who may have deceitfully induced
the other contracting party, Michael & Co., to execute the
contract. The one and the other of the contracting parties, to
whom the law refers, are the active and passive subjects of
the obligation, the party of the first part and the party of the
second part who execute the contract. The active subject
and the party of the first part of the Promissory Note in
question was Michael & Co., and the passive subject and
party of the second part were Veloso and Franco. Veloso
and Franco, therefore, composed a single contracting party
in contractual relation with or against Franco, like any other
person who might have induced Veloso into signing the
Promissory Note under the influence of deceit, would be but
a third person. Under the Civil Code, deceit by a third person
does not in general annul consent. This deceit may give rise
to more or less extensive and serious responsibility on the part
of the third person (Franco) and a corresponding right of
action for the contracting party prejudiced (Veloso). [Veloso
will probably just have to file an action against the estate of
Franco.]
Woodhouse vs. Halili
 Facts: the parties entered into an agreement to establish a
partnership for bottling and distribution of softdrink Mission.
 Prior to the execution of the agreement, Halili required
Woodhouse to secure a franchise.
 Woodhouse was able to secure franchise but only
temporary, up to 30 days only
 Because of the franchise, parties entered into the
partnership agreement.
 Halili knew about the temporary franchise, it was different
from the franchise they stipulated in the contract
 Plaintiff demanded for the execution if the contract,
defendant said no need to hurry
 CFI ordered defendant for the accounting of profits
 CFI also held that the partnership cannot be executed by
the defendant
 The accused fraud was also not proved
 ISSUE: WON the erroneous representation of the franchise
invalidated the contract?
 Held: the court cannot compel each other to execute a
partnership because a partnership is bound with the mutual
agreement or the liberty of the contract
 Although it can be clearly inferred that fraud is involved,
said fraud is only incidental (dolo causante) thus not
sufficient to render the contract null and void or hold the
plaintiff liable for damages
 It is not causal fraud (dolo causante) that is detrimental to
the contract
Geraldez vs CA
 A case was filed by plaintiff Geraldez to Kenstar Corporation
for alleged contractual breach
 Geraldez booked a 22 day European tour with the said
agency and paid 190k for her and her sister
 To her surprise, she was very disappointed as the tour did
not come out as what the agency has promised them
 Hotel wasn’t first class, visit to leather factory was not
included, and most of all, the tour guide is a first timer
ISSUE: WON the agency committed fraud in order for
petitioner to enter into a contract
HELD: YES. There is fraud. But whether fraud employed here is
dolo causante or incidente, the travel agency is still liable for
damages to the plaintiff
Tuason vs Marquez
Facts: Marquez, owner of an electric company in Lucena,
gave an option to Antonio Tuazon to sell the said electric
company.
 Mariano Tuason took advantage of the sale; they
agreed to a purchase price of 14,400, 2,40o payable in
60 days and the balance within 1 year.
 Tuason paid the first installment but defaulted in the
second
 Originally, the electric company had a franchise of 35
years but when marquez got disgusted with the
operations, he communicated with the public utility
commissioner.
 Franchise was cancelled but they continued to operate
by virtue of the new franchise, which would require
major renovation to the plant
 The facts were concealed to Tuazon
Issue: WON defendant can ask for rescission?
Held: NO. based on the principle caveat emptor.
Innocent non disclosure of facts does not affect the
formation of the contract or operate to discharge the
parties from this agreement.
Rural Bank of Sta. Maria vs CA
Facts: Manuel Behis mortgaged a parcel of land to Rural
Bank of Sta Maria. It was evidenced by 6 promissory
notes and was annotated in the land title
 Manuel Behis executed a deed of sale with assumption
of mortgage in favor or Rayandayan and arceno. They
also exceuted another instrument which states that
Ryandayan and Arceno are indebted to manuel for
2.4m and that in case of default, manuel has legal
recourse to the portions of the land equivalent to the
price.
 Unknowingly, the 2.4m represent the purchase price of
the said lot
 Plaintiffs did not annotate it with the ROD so Manuel is
still the registered owner
 Plaintiffs were unable to complete their payments to
manuel and the loan to the bank continued to
accumulate and was delinquent
ISSUE: WON the concealment of the purchase price to the
bank tantamounts to fraud
Held: No. . It is believed that the non-disclosure to the bank of
the purchase price of the sale of the land between private
respondents and Manuel Behis cannot be the "fraud"
contemplated by Article 1338 of the Civil Code.
silence or concealment, by itself, does not constitute fraud,
unless there is a special duty to disclose certain facts, or
unless according to good faith and the usages of commerce
the communication should be made. Verily, private
respondents Rayandayan and Arceño had no duty, and
therefore did not act in bad faith, in failing to disclose the
real consideration of the sale between them and Manuel
Behis.
Azarraga vs Gay
Facts: Azaragga sold to Gay 2 parcels of land at a lump sum
price of 47k payable in installments
 Defendant has complied with the first few installments but
failed to pay the remaining 22k
 Defendant contends that the plaintif has mislead her to
believe that the second parcel of land has an area of 98
hectares when the defendant knew that the area was
only 60 hectares.. and led her to believe that the two
parcels would be 200 hectares
 Had she knew that the area was smaller, she should’ve
not agreed with the purchase price.
 The vendee asked for a reduction in price but vendor did
not accept
ISSUE: WON there Is fraud regarding the area of land
Held: NO. Vendee has a copy of the deed and it is
evident that the second lot is 70 hectares
 No evidence that vendor employed fraud on the sale
 No reduction In price. In case of the sale of real estate for
a lump sum and not at the rate of a specified price for
each unit of measure, there shall be no increase or
decrease of the price even if the area be found to be
more or less than that stated in the contract
SC: Gay to accept the second parcel

Trinidad vs IAC-exaggerations in trade
Facts: Trinidad approached Francisco to buy his house.
Francisco was willing to sell. Trinidad inspected the house,
with the drainage systems well in place. They arrived to the
agreement of 70k, 17.5k dp, balance to be paid in 5 equal
installments
 Trinidad paid earnest money of 5k and began
occupying the property. One day, her neighbor
approached her and told her that 2 previous owners left
the house because it was flooded. She said she had
talked to Francisco and assured her that the drainage
have been fixed
 Trinidad paid the first few installments and asked for
extension. Later, she decided not to continue paying as
the house was flooded again
 She asked the City Engineer’s about the problem and
was informed that the land was lying low and it is near
the narrow portion of a creek
 She filed an action against Francisco for inducing her to
enter into the contract by means of misrepresentation
 Defendant said that he did not apply misrepresentation
as the plaintiff inspected the house and that the flood is
common in mania. He asked for recission and
demanded monthly rentals of 700 plus litigation cost
 CFI ordered the annulment of the contract and asked
defendant to return money plus interest and indemnify
plantiff for her lost property and for plaintiff to return
house
 Decision was reversed in the CA
Issue: WON there was misrepresentation by Francisco
Held: NO. Art 1338,1339 and 1340
Fraud was not established in this case because fraud cannot
be lightly inferred
It was Trinidad who offered to buy, she inspected it, she must
have known that area is flooded because she was an
appraiser, seeing the area was low lying thus cannot avoid
instances of flood no evidence that two buyers vacated
property
SC afiirmed CA’s decision
Sonco vs CA-Opinion
Facts: Songco and Sellner are farm owners.
 Sellner wants to mill his canes in the sugar central.
However, the miller did not give him assurance that they
can accommodate his cane
 Upon learning that Songco’s cane will be milled, he
wanted to buy Songco’s cane so that he can have his
sugarcanes milled together with Songco’s
 Also, he wants to have a right of way so that he could
convey his own cane to the Central
 Songco said that his canes would harvest 3000 piculs, but
did not give guarantee to such.
 Sellner bought it by executing 3 promissory notes. 2 were
paid and 1 was not. Thus, case at bar
 Sellner contended that he wants the contract to be
annulled because his sugar only amounted to 2000 piculs.
 He stresses that fraud has been employed by Songco,
thus he is not liable for the debt
ISSUE: WON sale is valid
Held: Yes. The 3000 piculs of sugar was just an opinion of
songco. It is difficult to determine harvest when canes are
still standing, except to give areasonable estimate.
sellner, being a farmer should have realized that it won’t
reach 3000.
 Also, sellner has motives and even if the canes were
lesser than 3000, he would by it because of such
motives
 SC: Sale is valid, no damages
Mercado vs Espiritu-misrepresentation
Facts: Margarita Espiritu owned a parcel of land. When she
died, she left it with her heirs wenceslao (husband), domingo
and josefa (children)
 However, during her lifetime, she already executed a
deed of sale in favor of luis, her brother, 71% of the lot
 Because of financial difficulty, wenceslao obtained a
loan from luis with the remainder lot as security
 Later, luis entered into a contract with domingo and
josefa (who represented as of legal age) to transfer the
remainder lot for additional consideration
 Later, siblings contested the validity of agreement. Luis
died and was substituted by his son
 Siblings claimed they were only 18 and 19, 21 was
majority age that time
Issue: WON contract is valid
Held: Yes. Siblings failed to present their birth records.
Also, for sale involving real estate, minors who represented
themselves as of legal age is valid and they cannot excuse
themselves from the agreement
 Further, there was no evidence showing that
consent was obtained thru VIMFU
Bragaza vs Abrille-misrepresentation
Facts: Bragaza and her sons loaned from Abrille the amount
of 70k in the form of Japanese war notes and promised to
pay 10k in legal currency two years after the cessation of the
war plus 2% interest per annum
 Plaintiff contended that they only received 40k and that
her children were minors
ISSUE: Are the minors liable for the debt?
HELD: Rosario to pay 1/3 ok 10k plus 2% interest as
stipulated; his sons to pay equivalent to 2/3 of 70k in phil
legal tender
 In order for a minor to be liable, fraud must be actual and
not constructive. A concealment of their age does not
tantamount to fraud
 They are liable for restitution of what they have received
because they are benefited for it. They are not entirely
absolved from liability
  Sale is void when purchase price that appears thereon
Rodriguez vs Rodriguez
Facts: Conception Felix, a widow, with one daughter owns 2
fishponds. She has executed a deed of sale transferring the
property to her only child
 She married again, to rodriguez who has 4 children
 The said propery is conveyed back to the spouses
rodriguez
 The husband, rodriguez, died. They pursued a dpp
 ½ was for the wife; ¾ of ½ for children and ¼ of ½ for
grandchildren
 Children and grandchildren granted a lifetime usufruct
to the widow
 Things worsened when the widow failed to deliver part
of the profit to the children
 The widow filed for the annulment of the case,
contending that the transfer from her daughter of the
property to the conjugal property was void because his
husband pressured her to do the same
 CFI ruled that consent was voluntary and contracts
without consideration are only voidable
Issue: WON the transfer is valid
Held: Yes. Plaintiff should have filed and action within 4
years from intimidation. In this case, it took her 28 years and
no less than 9 years after the culprit has died.
Appellant’s inaction to enforce her right, for 28 years, cannot
be justified by the lame excuse that she assumed that the
transfer was valid. Knowledge of the effect of that
transaction would have been obtained by the exercise of
diligence. Ignorance which is the effect of inexcusable
negligence, it has been said, is no excuse for laches
Suntay vs CA
facts: Suntay owns a parcel of land with a rice mill and a
warehouse. He applied as a rice miller at National Rice and
Corn Corp but was declined due to his debts.
 He asked the help of his nephew lawyer to facilitate the
application. He executed a deed of sale to him of his
property for 20k. in less than 3 months, it was conveyed
back to him.
 The deed of sale appears to be notarized but was later
found out to be unrecorded in the notarial register.
 Plaintiff contends that the docuent was
ficticious/simulated
 CFI upheld the first deed but declared the second deed
to be void because of technicalities
 CA upheld decision but considered the first deed
simulated because of their relationship and that 20k
was never given
 ISSUE: WON the deed of sale is valid
 Held: NO. the history and relationship of the parties are
grounds for simulation
 Rafael’s ground that it was dacion en pago for his legal
services was untenable because plaintiff is liquid
 SC: affirmed in toto
has never been paid nor was there any consideration.