#@motherjudgeprincess

[jurisjonah]

(Report 10) Article 1422, Civil Code of the Philippines, Book IV Obligations and Contracts

Article 1422. A contract which is the direct result of a previous illegal contract, is also void and inexistent.

Explanation Article 1422 states that if a contract is created as a direct result of a previous illegal contract, it is also invalid and non-existent. This means that any agreement stemming from an illegal contract has no legal effect. Essentially, the illegality of the initial contract carries over to any subsequent contracts directly resulting from it.

Illustrative Example Ms. O and I entered into an illegal contract to smuggle rare animals. We then made a second contract to share the profits from selling these animals. However, because our profit-sharing contract directly resulted from our initial illegal smuggling agreement, it is also void and non-existent. Therefore, any profits or obligations outlined in the second contract have no legal standing.

Assigned Case FILINVEST LAND, INC., PETITIONER, VS. EDUARDO R. ADIA et al with G.R. No. 192629 Penned by Justice Brion on November 25, 2015

Facts of the Case:

Respondents owned land in Trece Martires, Cavite, awarded under the Comprehensive Land Reform Law (CARL).

In 1995, Filinvest Land, Inc. (Filinvest) took possession of these lands based on affidavits from the respondents, relinquishing their rights for a valuable consideration.

Respondents believed Filinvest would develop the land into a residential subdivision under a Joint Venture Agreement (JVA), and handed over their land titles.

Filinvest did not start development and fenced the area, barring respondents from entering.

Respondents filed notices of adverse claim and later a complaint for recovery of possession with damages.

Filinvest contended that the respondents had legally transferred possession and no JVA was signed.

The RTC ruled in favor of the respondents, declaring them lawful possessors, ordering Filinvest to vacate and return the titles.

The CA affirmed the RTC's decision, ruling the affidavits void for violating Section 27 of CARL and denying Filinvest's motion for reconsideration.

Filinvest petitioned the Supreme Court, arguing the affidavits were valid, and if void, respondents should return the consideration received.

Issues of the Case:

Whether or not Filinvest had lawful possession of the properties based on the affidavits.

Whether or not the affidavits violated Section 27 of the CARL and are therefore void.

Whether or not the pari delicto doctrine applies to this case, preventing recovery of possession by the respondents.

Ruling to the Case:

NO, Filinvest does not have lawful possession of the properties. The affidavits are void for violating Section 27 of the CARL. The affidavits, as worded, totally waive or transfer the respondents' rights and interests over the properties. The CA correctly observed that the affidavits do not only assign possessory rights but perpetually surrender the respondents' ownership rights.

YES, the affidavits violated Section 27 of the CARL. These affidavits effectively transferred ownership rights, which is prohibited within ten years from the awarding of the land.

NO, the pari delicto doctrine does not apply. Article 1416 of the Civil Code provides an exception, allowing recovery of what was delivered in a prohibited contract when the prohibition is for the plaintiff's protection and public policy is enhanced by such recovery. The prohibition under Section 27 of the CARL is meant to protect farmer-beneficiaries, and public policy is promoted by returning the land to the respondents. Thus, the respondents may recover the subject properties.

Application of the Assigned Case In the case of Filinvest Land, Inc. vs. Eduardo R. Adia, et al., the court declared the affidavits transferring possession of lands void for violating the Comprehensive Agrarian Reform Law (CARL). Since these affidavits were based on illegal contracts (transfers within the prohibited period), any resulting contracts were also deemed void. This aligns with Article 1422 of the Civil Code, which states that a contract resulting from a previous illegal contract is also void and inexistent.

[michm-law]

Article 1416 Obligations and Contracts

Article 1416. When the agreement is not illegal per se but is merely prohibited, and the prohibition by the law is designed for the protection of the plaintiff, he may, if public policy is thereby enhanced, recover what he has paid or delivered.

Related Case :

[ G.R. No. 192629, November 25, 2015 ]

FILINVEST LAND, INC., PETITIONER,

VS. EDUARDO R. ADIA, etal . RESPONDENTS .

FACTUAL BACKGROUND

The respondents were the registered owners of various parcels of land located in Barangay Hugo Perez, Trece Martires, Cavite. These properties were awarded to them pursuant to the Comprehensive Land Reform Law (CARL). and had a total land area of about 709,910 square meters under seventy-five (75) TCTs.

In 1995, Filinvest Land, Inc. (Filinvest) acquired possession of these properties. Each of the respondents executed a Sinumpaang Salaysay entitled Pagbibitaw ng Karapatan (affidavits). Based on these affidavits, the respondents relinquished all their rights over the properties for valuable consideration.

The respondents alleged that they surrendered possession of their properties with the understanding that Filinvest would develop these into a residential subdivision, pursuant to a joint venture agreement (JVA). They also entrusted their respective owner's duplicate original copies of the TCTs to Filinvest because they were told that these would be used in preparing the development plans. The respondents added that they were even given money to find their own place while the development was taking place.

The respondents repeatedly requested Filinvest to return their owner's TCT copies and to give them a copy of the JVA. Since development had not yet begun, they also sent a letter to Filinvest to allow them to temporarily return to their lands. They received no response. Instead, Filinvest began to fence the area and prohibited entry. To protect their rights, the respondents filed notices of adverse claim.1aшphi1

In 2010, the respondents filed a complaint for recovery of possession with damages against Filinvest.

Issue :

The Core issue in an accion publiciana is who between Filinvest and the respondents are the properties lawful possessors.

Held :

In the present case, the parties do not dispute that the transfers occurred within the ten-year period. Filinvest contends, however, that only transfer of ownership is prohibited, not of possession.

Filinvest claims that if the affidavits are void, this Court should consider the parties to be in pari delicto. Both parties came to court with unclean hands because they voluntarily entered into the void transactions. Thus, the court should leave them where they are Filinvest possessing the properties and the respondents keeping the money they received.

We see no merit in Filinvest's position.

To elaborate, Article 1416 of the Civil Code provides an exception to the pari delicto doctrine. Under this article, the plaintiff may recover what he paid or delivered pursuant to a void contract if the following requisites are met: (a) the contract is not illegal per se but merely prohibited; (b) the prohibition is for the plaintiffs protection; and (c) public policy will be enhanced by his recovery. These requisites are present in this case.

In sum, we hold that the respondents are the lawful possessors of the disputed properties. Their affidavits are void and did not transfer possessory rights.

of real estate or any interest therein affecting registered land judgment is entered for the plaintiff, such judgment shall be entitled to registration on presentation of a certificate of the entry thereof from the clerk of court where the action is pending to the Register of Deeds for the province or city where the land lies, who shall enter a memorandum upon the certificate of title of the land to which such judgment relates. If the judgment does not apply to all the land described in the certificate of title, the certificate of the clerk of court where the action is pending and the memorandum entered by the Register of Deeds shall contain a description of the land affected by the judgment." (emphasis supplied)

WHEREFORE, we hereby DENY the petition for lack of merit.

[jd2a-fb]

Article 37

Article 34. No license shall be necessary for the marriage of a man and a woman who have lived together as husband and wife for at least five years and without any legal impediment to marry each other. The contracting parties shall state the foregoing facts in an affidavit before any person authorized by law to administer oaths. The solemnizing officer shall also state under oath that he ascertained the qualifications of the contracting parties and found no legal impediment to the marriage. (76a)

[florida-blogs]

𝙰𝚛𝚝𝚒𝚌𝚕𝚎 8. 𝙹𝚞𝚍𝚒𝚌𝚒𝚊𝚕 𝚍𝚎𝚌𝚒𝚜𝚒𝚘𝚗𝚜 𝚊𝚙𝚙𝚕𝚢𝚒𝚗𝚐 𝚊𝚗𝚍 𝚒𝚗𝚝𝚎𝚛𝚙𝚛𝚎𝚝𝚒𝚗𝚐 𝚝𝚑𝚎 𝚕𝚊𝚠𝚜 𝚘𝚛 𝚝𝚑𝚎 𝙲𝚘𝚗𝚜𝚝𝚒𝚝𝚞𝚝𝚒𝚘𝚗 𝚜𝚑𝚊𝚕𝚕 𝚏𝚘𝚛𝚖 𝚊 𝚙𝚊𝚛𝚝 𝚘𝚏 𝚝𝚑𝚎 𝚕𝚎𝚐𝚊𝚕 𝚜𝚢𝚜𝚝𝚎𝚖 𝚘𝚏 𝚝𝚑𝚎 𝙿𝚑𝚒𝚕𝚒𝚙𝚙𝚒𝚗𝚎𝚜. (𝚗)

𝙳𝚎𝚌𝚒𝚜𝚒𝚘𝚗 𝚘𝚛 𝚓𝚞𝚍𝚐𝚖𝚎𝚗𝚝 𝚍𝚎𝚏𝚒𝚗𝚎𝚍. 𝙰 𝚓𝚞𝚍𝚐𝚖𝚎𝚗𝚝 𝚒𝚜 𝚝𝚑𝚎 𝚕𝚊𝚠’𝚜 𝚕𝚊𝚜𝚝 𝚠𝚘𝚛𝚍 𝚒𝚗 𝚊 𝚓𝚞𝚍𝚒𝚌𝚒𝚊𝚕 𝚌𝚘𝚗𝚝𝚛𝚘𝚟𝚎𝚛𝚜𝚢. 𝙸𝚝 𝚒𝚜 𝚝𝚑𝚎 𝚌𝚘𝚗𝚌𝚕𝚞𝚜𝚒𝚘𝚗 𝚘𝚏 𝚝𝚑𝚎 𝚕𝚊𝚠 𝚞𝚙𝚘𝚗 𝚝𝚑𝚎 𝚖𝚊𝚝𝚝𝚎𝚛𝚜 𝚌𝚘𝚗𝚝𝚊𝚒𝚗𝚎𝚍 𝚒𝚗 𝚝𝚑𝚎 𝚛𝚎𝚌𝚘𝚛𝚍, 𝚘𝚛 𝚝𝚑𝚎 𝚊𝚙𝚙𝚕𝚒𝚌𝚊𝚝𝚒𝚘𝚗 𝚘𝚏 𝚝𝚑𝚎 𝚕𝚊𝚠 𝚝𝚘 𝚝𝚑𝚎 𝚙𝚕𝚎𝚊𝚍𝚒𝚗𝚐𝚜 𝚊𝚗𝚍 𝚝𝚘 𝚝𝚑𝚎 𝚏𝚊𝚌𝚝𝚜, 𝚊𝚜 𝚝𝚑𝚎𝚢 𝚊𝚙𝚙𝚎𝚊𝚛 𝚏𝚛𝚘𝚖 𝚝𝚑𝚎 𝚎𝚟𝚒𝚍𝚎𝚗𝚌𝚎 𝚒𝚗 𝚝𝚑𝚎 𝚌𝚊𝚜𝚎𝚜 𝚊𝚗𝚍 𝚊𝚜 𝚏𝚘𝚞𝚗𝚍 𝚋𝚢 𝚝𝚑𝚎 𝚌𝚘𝚞𝚛𝚝, 𝚊𝚍𝚖𝚒𝚝𝚝𝚎𝚍 𝚋𝚢 𝚝𝚑𝚎 𝚙𝚊𝚛𝚝𝚒𝚎𝚜 𝚘𝚛 𝚊𝚜 𝚍𝚎𝚎𝚖𝚎𝚍 𝚝𝚘 𝚎𝚡𝚒𝚜𝚝 𝚞𝚙𝚘𝚗 𝚝𝚑𝚎𝚒𝚛 𝚍𝚎𝚏𝚊𝚞𝚕𝚝 𝚒𝚗 𝚊 𝚌𝚘𝚞𝚛𝚜𝚎 𝚘𝚏 𝚓𝚞𝚍𝚒𝚌𝚒𝚊𝚕 𝚙𝚛𝚘𝚌𝚎𝚎𝚍𝚒𝚗𝚐𝚜. (𝚉𝚊𝚗𝚎𝚛 𝚟𝚜. 𝚃𝚑𝚛𝚘𝚠𝚎𝚛, 155 𝙲𝚊𝚕. 199 𝙿𝚊𝚌. 371). 𝙸𝚗𝚝𝚎𝚛𝚙𝚛𝚎𝚝𝚊𝚝𝚒𝚘𝚗 — 𝚝𝚑𝚎 𝚘𝚏𝚏𝚒𝚌𝚎 𝚘𝚏 𝚝𝚑𝚎 𝚓𝚞𝚍𝚒𝚌𝚒𝚊𝚛𝚢. 𝙰𝚜 𝚋𝚎𝚝𝚠𝚎𝚎𝚗 𝚝𝚑𝚎 𝚝𝚑𝚛𝚎𝚎 𝚍𝚎𝚙𝚊𝚛𝚝𝚖𝚎𝚗𝚝𝚜 𝚘𝚏 𝚐𝚘𝚟𝚎𝚛𝚗𝚖𝚎𝚗𝚝, 𝚝𝚑𝚎 𝚘𝚏𝚏𝚒𝚌𝚎 𝚘𝚏 𝚌𝚘𝚗𝚜𝚝𝚛𝚞𝚒𝚗𝚐 𝚊𝚗𝚍 𝚒𝚗𝚝𝚎𝚛𝚙𝚛𝚎𝚝𝚒𝚗𝚐 𝚝𝚑𝚎 𝚠𝚛𝚒𝚝𝚝𝚎𝚗 𝚕𝚊𝚠𝚜 𝚋𝚎𝚕𝚘𝚗𝚐𝚜 𝚝𝚘 𝚝𝚑𝚎 𝚓𝚞𝚍𝚒𝚌𝚒𝚊𝚛𝚢 𝚞𝚕𝚝𝚒𝚖𝚊𝚝𝚎𝚕𝚢, 𝚊𝚕𝚝𝚑𝚘𝚞𝚐𝚑 𝚝𝚑𝚎 𝚎𝚡𝚎𝚌𝚞𝚝𝚒𝚟𝚎 𝚊𝚗𝚍 𝚕𝚎𝚐𝚒𝚜𝚕𝚊𝚝𝚒𝚟𝚎 𝚍𝚎𝚙𝚊𝚛𝚝𝚖𝚎𝚗𝚝𝚜 𝚖𝚊𝚢 𝙰𝚛𝚝. 8 37 𝚋𝚎 𝚛𝚎𝚚𝚞𝚒𝚛𝚎𝚍, 𝚋𝚢 𝚗𝚎𝚌𝚎𝚜𝚜𝚒𝚝𝚢, 𝚝𝚘 𝚙𝚞𝚝 𝚝𝚑𝚎𝚒𝚛 𝚘𝚠𝚗 𝚌𝚘𝚗𝚜𝚝𝚛𝚞𝚌𝚝𝚒𝚘𝚗 𝚞𝚙𝚘𝚗 𝚝𝚑𝚎 𝚕𝚊𝚠𝚜 𝚒𝚗 𝚊𝚍𝚟𝚊𝚗𝚌𝚎 𝚘𝚏 𝚝𝚑𝚎𝚒𝚛 𝚎𝚡𝚙𝚘𝚜𝚒𝚝𝚒𝚘𝚗 𝚋𝚢 𝚝𝚑𝚎 𝚌𝚘𝚞𝚛𝚝𝚜. 𝚆𝚑𝚎𝚗 𝚝𝚑𝚎𝚛𝚎 𝚊𝚛𝚒𝚜𝚎𝚜 𝚊 𝚗𝚎𝚌𝚎𝚜𝚜𝚒𝚝𝚢 𝚏𝚘𝚛 𝚌𝚘𝚗𝚜𝚝𝚛𝚞𝚒𝚗𝚐 𝚘𝚛 𝚒𝚗𝚝𝚎𝚛𝚙𝚛𝚎𝚝𝚒𝚗𝚐 𝚝𝚑𝚎 𝚠𝚛𝚒𝚝𝚝𝚎𝚗 𝚕𝚊𝚠𝚜, 𝚒𝚗 𝚘𝚛𝚍𝚎𝚛 𝚝𝚘 𝚍𝚒𝚜𝚌𝚘𝚟𝚎𝚛 𝚝𝚑𝚎𝚒𝚛 𝚊𝚙𝚙𝚕𝚒𝚌𝚊𝚝𝚒𝚘𝚗 𝚝𝚘 �� 𝚐𝚒𝚟𝚎𝚗 𝚌𝚊𝚜𝚎 𝚘𝚛 𝚜𝚝𝚊𝚝𝚎 𝚘𝚏 𝚏𝚊𝚌𝚝𝚜, 𝚝𝚑𝚎 𝚚𝚞𝚎𝚜𝚝𝚒𝚘𝚗 𝚘𝚏 𝚝𝚑𝚎 𝚖𝚎𝚊𝚗𝚒𝚗𝚐 𝚊𝚗𝚍 𝚒𝚗𝚝𝚎𝚗𝚝𝚒𝚘𝚗 𝚘𝚏 𝚝𝚑𝚎 𝚕𝚎𝚐𝚒𝚜𝚕𝚊𝚝𝚞𝚛𝚎 𝚒𝚗 𝚝𝚑𝚒𝚜 𝚛𝚎𝚐𝚊𝚛𝚍 𝚒𝚜 𝚊 𝚚𝚞𝚎𝚜𝚝𝚒𝚘𝚗 𝚘𝚏 𝚕𝚊𝚠, 𝚊𝚗𝚍 𝚊𝚜 𝚜𝚞𝚌𝚑 𝚒𝚝 𝚖𝚞𝚜𝚝 𝚋𝚎 𝚜𝚘𝚕𝚟𝚎𝚍 𝚋𝚢 𝚝𝚑𝚎 𝚌𝚘𝚞𝚛𝚝; 𝚒𝚝 𝚒𝚜 𝚗𝚘𝚝 𝚏𝚘𝚛 𝚝𝚑𝚎 𝚍𝚎𝚝𝚎𝚛𝚖𝚒𝚗𝚊𝚝𝚒𝚘𝚗 𝚘𝚏 𝚝𝚑𝚎 𝚓𝚞𝚛𝚢.

#motherjudgeprincesss

[mari-dor]

Article 1158 - Round 1

Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen, by the provisions of this Book. (1090)

Explanation:

Article 1158 refers to legal obligations or obligations arising from law. They are not presumed because because they are considered a burden upon the obligor. They are the exception, not the rule. To be demandable, they must be clearly set forth in the law, i.e., the Civil Code or special laws.

Agreement Unnecessary. – The law cannot exist as a source of obligations, unless the acts to which its principles may be applied exist. But once those acts or facts exist, the obligations arising therefrom by virtue of express provisions of the law are entirely independent of the of the parties. Such obligations and their correlative rights are govern by the law by which they are created.

Obligation Not Presumed. – Under the terms of this article, obligations derived from law are not to be presumed. Only those expressly provided for in this code or in special laws are enforceable.

Under Article 1158, Special laws refer to all other laws not contained in the Civil Code. Examples of such laws are  Corporate Code, Negotiable Instruments Law, Insurance Code, National Internal Revenue Code, Revised Penal Code, Labor Code, etc

Case Illustrations:

An employer has no obligation to furnish free legal assistance to his employees because no law requires this, and therefore, an employee may not recover from his employer the amount he may have paid a lawyer hired by him to recover damages caused to said employee by a stranger or strangers while in the performance of his duties. (De la Cruz vs. Northern Theatrical Enterprise, 95 Phil. 739)

A private school has no legal obligation to provide clothing allowance to its teachers because there is no law which imposes this obligation upon schools. But a person who wins money in gambling has the duty to return his winnings to the loser. This obligation is provided by law. (Art. 2014)

Reference: https://cdizonoblicon.wordpress.com/2017/02/24/article-1158/

@motherjudgeprincess

[angelapcuello]

Case: Roehr v. Rodriguez et al. G.R. No. 142820 June 20, 2003

Facts: Wolfgang Roehr, a German citizen, married Carmen Rodriguez, a Filipina, in Germany on December 11, 1980. They had two daughters. Carmen filed a petition for the nullity of their marriage at the Makati RTC on August 28, 1996, but it was denied. Meanwhile, Wolfgang obtained a divorce decree from the Court of First Instance on December 16, 1997, and was granted custody of the children. Wolfgang filed a Second Motion to Dismiss, arguing that the trial court had no jurisdiction due to the foreign divorce decree. The motion was granted, but Carmen filed a Motion for Partial Reconsideration, seeking to proceed with the issues of custody and property distribution. The judge partially set aside the order of dismissal to tackle these issues.

Issue: Can the Philippine courts take cognizance of the custody issue of the children?

Ruling: Yes. The divorce obtained by Wolfgang is valid and recognized in the Philippines. It is established that a divorce obtained abroad by an alien may be recognized in our jurisdiction if it is valid according to the foreigner's national law. In this case, the divorce decree has not been questioned by either party. However, the custody of the children is still in doubt. While the German court that granted the divorce decree decided on the custody issue

[jurisjonah]

(Report 9) Article 1395, Civil Code of the Philippines, Book IV Obligations and Contracts

Article 1395. Ratification does not require the conformity of the contracting party who has no right to bring the action for annulment. (1312)

Definition of Key Terms Ratification: Ratification is the act of confirming or validating a contract or agreement that was initially voidable. It involves the voluntary approval of the contract by the party who had the right to annul it, thereby making the contract fully binding.

Conformity: Conformity refers to agreement or compliance. In this context, it means the acceptance or approval of the ratification by a contracting party.

Annulment: Annulment is the legal process of declaring a contract or agreement void and unenforceable. It effectively erases the contract as if it never existed, usually because of some defect or issue present at the time of its formation.

Explanation Ratification of a contract does not need the approval of the party who cannot request its annulment. Only the party with the right to annul the contract needs to agree to the ratification. This means that the contract can be validated without the consent of the non-affected party.

Illustrative Example Ms. O and I entered into a contract of lease for a farmland. Later, it came to light that I had the right to annul the contract because it was signed under misleading circumstances. However, I decided to ratify the lease, making it fully binding. Ms. O, who had no right to annul the contract in the first place, did not need to agree to this ratification for it to be valid.

Assigned Case ECE REALTY AND DEVELOPMENT INC., Petitioner, vs. RACHEL G. MANDAP, Respondent. with G.R. No. 196182 Penned by Justice Peralta on September 1, 2014

Facts of the Case

ECE Realty and Development Inc. (petitioner) constructed the Central Park Condominium Building in Pasay City, but advertised it as being located in Makati City.

Rachel G. Mandap (respondent) purchased a unit in December 1995, paying a reservation fee, downpayment, and monthly installments.

On June 18, 1996, Mandap and ECE Realty signed a Contract to Sell, indicating the project's actual location in Pasay City.

On October 30, 1998, Mandap demanded the return of her payments upon discovering the actual location.

ECE Realty responded on November 30, 1998, informing Mandap that her unit was ready for inspection and occupancy.

Mandap filed a complaint with the HLURB for annulment of the contract and return of payments.

The HLURB dismissed Mandap’s complaint for lack of merit, a decision affirmed by the HLURB Board of Commissioners and the Office of the President.

The Court of Appeals (CA) reversed these decisions, annulled the contract, and ordered ECE Realty to return Mandap’s payments with interest.

Issue of the Case Whether or not ECE Realty's misrepresentation constitutes fraud sufficient to annul the contract with Mandap.

Ruling to the Case NO. The Court ruled that the misrepresentation did not constitute causal fraud sufficient to annul the contract. The ruling stated:

"The misrepresentation made by petitioner in its advertisements does not constitute causal fraud which would have been a valid basis in annulling the Contract to Sell between petitioner and respondent."

"Respondent's act of affixing her signature to the said Contract, after having acquired knowledge of the property's actual location, can be construed as an implied ratification thereof."

"Ratification extinguishes the action to annul a voidable contract."

Connection to the Assigned Article The case is connected to Article 1395 because the Court determined that Mandap's continued payments and eventual signing of the Contract to Sell constituted implied ratification of the contract despite the initial misrepresentation. According to Article 1395, ratification does not require the agreement of the party who cannot annul the contract, meaning Mandap’s actions alone were sufficient to validate the contract. Thus, her implied ratification extinguished her right to seek annulment based on fraud.

[jurisjonah]

(Report 8) Article 1368, Civil Code of the Philippines, Book IV Obligations and Contracts

Article 1368. Reformation may be ordered at the instance of either party or his successors in interest, if the mistake was mutual; otherwise, upon petition of the injured party, or his heirs and assigns.

Explanation Article 1368 says that if both sides made a mistake in a contract, either side or their successors can ask for it to be corrected. If only one side made the mistake, only that side or their successors can ask for the correction.

Illustrative Example For example, I and Ms. O signed a rental agreement for an apartment. We both mistakenly wrote the wrong rental amount in the contract. Realizing this, either Ms. O or I could ask the court to correct the mistake since it was mutual. Later, if I pass away, my heirs, Melchor, Gaspar, and Baltazar, could also ask for the contract to be corrected. If the mistake was only on Ms. O's part and she included incorrect lease terms, I, as the injured party, or my heirs, Melchor, Gaspar, and Baltazar, could petition the court to fix it.

Assigned Case ALLIED BANKING CORPORATION AND ERNESTO PASCUAL, PETITIONERS, VS. CRISTINA B. FUKUOKA, AND SPOUSES CRISOSTOMO AND WARLITA BORILLO, RESPONDENTS Penned by Justice Reyes on November 23, 2015

Facts of the Case Cristina B. Fukuoka engaged Crisostomo Borillo for the renovation of her house and later became interested in buying an adjacent lot. Fukuoka had no money for the lot purchase, and Crisostomo suggested using the title to her land for a loan. Crisostomo applied for a loan from Allied Bank, which was approved, and a promissory note was executed. Fukuoka signed a Real Estate Mortgage (REM) over her property in favor of Allied Bank to secure the ₱1 million loan. Monthly amortizations were deducted from Evelyn Pajarillaga's savings account from January 1996 to May 1999. Allied Bank stopped deducting the monthly amortization in June 1999, prompting Fukuoka to file a complaint for reformation of contract and damages. The RTC ruled in favor of Fukuoka, awarding damages and ordering the deletion of Crisostomo's name from the REM contract. Allied Bank's cross-claim against Crisostomo was dismissed. The CA upheld the RTC decision and dismissed the petitioners' appeal. The petitioners filed a petition for review with the Supreme Court.

Issues of the Case Whether or not the requisites for reformation of contract are present given that Fukuoka never obtained any loan from Allied Bank but bound herself as a surety for Crisostomo's loan.

Ruling of the Case YES, the requisites for reformation of contract are present. "After a careful scrutiny of the facts of the instant case, the Court affirms the CA ruling that there exists a contract of loan secured by a REM between Allied Bank and Fukuoka. Hence, a reformation of the instrument is proper."

Application of the Assigned Article In this case, Fukuoka, the injured party, sought to correct the contract to reflect that her property should only secure her own loan, not Crisostomo's loans. The court agreed with Fukuoka, finding that the contract should be reformed to show the real agreement and intentions of the parties involved.

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(Report 7) Article 1341, Civil Code of the Philippines, Book IV Obligations and Contracts

Article 1341. A mere expression of an opinion does not signify fraud, unless made by an expert and the other party has relied on the former's special knowledge. (n)

Definition of Key Term Fraud- a knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment.

Explanation Article 1341 states that simply giving an opinion does not count as fraud. However, if an expert gives an opinion and the other person trusts that expert's special knowledge, it can be considered fraud.

Illustrative Example For example, I entered into a contract to lease an apartment with Ms. O. Before signing the lease, I asked Mr. Cabaluna, who is a certified building inspector, for his opinion on the apartment's condition. He assured me that the apartment was in excellent shape and free from any major issues. Relying on Mr. Cabaluna's expertise, I went ahead and signed the lease with Ms. O. However, after moving in, I discovered significant structural problems and pest infestations that Mr. Cabaluna should have noticed during his inspection. In this scenario, Mr. Cabaluna's opinion could be considered fraudulent because he is an expert and I relied on his special knowledge when deciding to lease the apartment.

Assigned Case PHILIPPINE STEEL COATING CORP., Petitioner, vs. EDUARD QUINONES, Respondent. with G.R. No. 194533 Penned by CJ Sereno on April 19, 2017

Facts of the Case Eduard Quinones, owner of Amianan Motors, filed a complaint for damages against Philippine Steel Coating Corp. (PhilSteel). In early 1994, Richard Lopez, a sales engineer from PhilSteel, offered Quinones primer-coated, long-span, rolled galvanized iron (G.I.) sheets. Quinones inquired about the compatibility of these sheets with the Guilder acrylic paint process used by Amianan Motors. Lopez referred the query to Ferdinand Angbengco, PhilSteel's sales manager, who assured Quinones of the product's compatibility based on laboratory tests. Quinones purchased and used the primer-coated sheets but received complaints in 1995 about the paint breaking and peeling off from customers. Quinones attributed the damage to the incompatibility of the primer-coated sheets with the paint process and demanded repairs from PhilSteel. PhilSteel countered, claiming the paint issues were due to Quinones' incorrect application. The RTC found in favor of Quinones, concluding the paint problems were due to incompatibility and that Angbengco's assurances constituted an express warranty under Article 1546 of the Civil Code. The CA affirmed the RTC's decision, holding PhilSteel liable for actual and moral damages and attorney's fees.

Issues of the Case Whether or not vague oral statements made by the seller on the characteristics of a generic good can be considered warranties that may be invoked to warrant payment of damages.

Ruling to the Case YES. The Court held that the oral statements made by Angbengco constituted an express warranty "Petitioner expressly represented to respondent that the primer-coated G.I. sheets were compatible with the acrylic paint process used by the latter on his bus units." "The oral statements of Angbengco created an express warranty. They were positive affirmations of fact that the buyer relied on, and that induced him to buy petitioner's primer-coated G.I. sheets."

Connection to the Assigned Article In this case, PhilSteel's sales manager, Angbengco, assured Quinones that their primer-coated G.I. sheets were compatible with the acrylic paint process used by Amianan Motors. According to Article 1341, expressing an opinion is not considered fraud unless the opinion comes from an expert and the other party relies on that expert's knowledge. Here, Angbengco, representing PhilSteel, acted as an expert. Quinones relied on his expertise and assurances, believing that PhilSteel had conducted tests proving compatibility. Because Quinones trusted PhilSteel's expert opinion, the statements were considered express warranties and not mere opinions. Therefore, PhilSteel was held liable for the damages caused by the defective product.

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(Report 6) Article 1314, Civil Code of the Philippines, Book IV Obligations and Contracts

Article 1314. Any third person who induces another to violate his contract shall be liable for damages to the other contracting party.

Explanation Article 1314 states that if a third person persuades someone to break a contract, they must pay damages to the other party in the contract. This means that interference with a contractual agreement is punishable. The article aims to protect contractual relationships from external disruptions.

Illustrative Example I have a contract with Ms. O to lease her apartment for one year. Mr. Cabaluna, a third party, offers Ms. O more money to break our contract and lease the apartment to him instead. If Ms. O ends our lease early because of Mr. Cabaluna's offer, I can seek damages from Mr. Cabaluna for causing the breach of our agreement.

Assigned Case CALTEX (PHILIPPINES), INC., Petitioner, vs. PNOC SHIPPING AND TRANSPORT CORPORATION, Respondent. Penned by Justice Antonio Carpio on August 10, 2006

Facts of the Case On 6 July 1979, PSTC and Luzon Stevedoring Corporation (LUSTEVECO) entered into an Agreement of Assumption of Obligations, where PSTC agreed to assume all LUSTEVECO's obligations specified in the annexes of the Agreement. Among the obligations assumed by PSTC was a judgment debt owed by LUSTEVECO to Caltex (Phils.), Inc., as affirmed by the Intermediate Appellate Court (IAC) on 12 November 1985. Caltex sought to enforce the judgment debt but was unsuccessful because LUSTEVECO's properties had been foreclosed. Caltex learned of the Agreement between PSTC and LUSTEVECO and demanded PSTC to satisfy the judgment debt, but PSTC refused, stating it was not a party to the original lawsuit. Caltex filed a complaint for sum of money against PSTC, leading to a trial court decision in favor of Caltex on 1 June 1994, ordering PSTC to pay the judgment debt. PSTC appealed, and the Court of Appeals reversed the trial court's decision on 31 May 2001, ruling that Caltex had no personality to sue PSTC as it was not a party to the Agreement. Caltex then petitioned for review before the Supreme Court.

Issues of the Case Whether or not PSTC is bound by the Agreement when it assumed all the obligations of LUSTEVECO.

Ruling to the Case YES, PSTC is bound by the Agreement when it assumed all the obligations of LUSTEVECO. The Court held that PSTC is bound by the Agreement of Assumption of Obligations. The Agreement clearly stated that PSTC shall assume all the obligations of LUSTEVECO, including the debt owed to Caltex. PSTC cannot accept the benefits of the Agreement without assuming the obligations. PSTC's refusal to honor its commitment would amount to defrauding the creditors of LUSTEVECO. The Court also noted that the transfer of assets from LUSTEVECO to PSTC without the knowledge of its creditors could be considered fraudulent and rescissible.

Connection of Article 1314 In application, PSTC, by assuming LUSTEVECO's obligations, effectively induced LUSTEVECO to breach its contract with Caltex by refusing to pay the judgment debt. PSTC's refusal to fulfill the assumed obligations led to damages for Caltex. Thus, PSTC is liable for these damages, as stipulated by Article 1314.

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(Report 5) Article 1287, Civil Code of the Philippines, Book IV Obligations and Contracts

Article 1287. Compensation shall not be proper when one of the debts arises from a depositum or from the obligations of a depositary or of a bailee in commodatum.

Neither can compensation be set up against a creditor who has a claim for support due by gratuitous title, without prejudice to the provisions of paragraph 2 of article 301. (1200a)

Definition of Key Words: Depositum: A depositum is a type of contract where one person (the depositor) delivers a movable item to another person (the depositary) for safekeeping without transferring ownership.

Depositary: A depositary is the person who receives an item in a depositum for safekeeping. The depositary is responsible for taking care of the item and returning it to the depositor when required.

Bailee in commodatum: A bailee in commodatum is a person who receives a movable item in a loan for use (commodatum). In this type of contract, the item is loaned for the bailee's use without any payment, and the bailee must return the same item after the use or at the end of the agreed period.

Gratuitous title: A gratuitous title refers to an act or agreement made without any payment or compensation. For example, a claim for support due by gratuitous title means the support is provided without expecting anything in return, typically out of generosity or legal obligation.

Explanation: Article 1287 states that debts cannot be offset against each other if one debt arises from a deposit or the obligations of a depositary or bailee in a loan for use. Additionally, compensation cannot be used against a creditor who has a claim for support provided for free, unless specified otherwise in Article 301, paragraph 2. This means that certain types of debts and claims, particularly those involving deposits, loans for use, and support provided gratuitously, are protected from being nullified through compensation.

Illustrative Example: I owe Mr. Sabado 1,000,000 pesos. However, Mr. Sabado also owes me 500,000 pesos because he deposited his valuable painting with me for safekeeping, and I had to spend money on its maintenance and protection. I thought I could offset this 500,000 pesos against my 1,000,000 peso debt to him. However, because the 500,000 pesos arises from a depositum, the law states that I cannot use this to offset my debt. Additionally, Mr. Sabado provides monthly financial support to my elderly mother as a gesture of goodwill and without any charge. Even though I owe Mr. Sabado a significant amount of money, I cannot offset my debt against the support he provides to my mother since it is given gratuitously. The law protects these types of obligations from being nullified through compensation.

Assigned Case: MONDRAGON PERSONAL SALES, Petitioner, vs. VICTORIANO S. SOLA, JR, Respondent. with G.R. No. 174882 Penned by Justice Peralta on January 21, 2013

Facts of the Case Mondragon Personal Sales Inc. and Victoriano S. Sola, Jr. entered into a three-year Contract of Services from October 2, 1994, to October 1, 1997, requiring Sola to provide service facilities in General Santos City. Sola was entitled to service fees based on monthly sales with a tiered structure. Sola's wife, Lina, had a debt of ₱1,973,154.73 to Mondragon, which Sola acknowledged on January 26, 1995, agreeing to pay it in installments. Mondragon withheld Sola's service fees from February to April 1995 to cover this debt, leading Sola to suspend operations on April 29, 1995, and file a complaint on May 24, 1995. The RTC ruled in favor of Mondragon on July 6, 2000, ordering Sola to pay ₱1,543,643.96 plus interest and fees, finding that Sola had assumed his wife's debt. The CA reversed this decision, ruling that Mondragon breached the contract by withholding fees and that Sola did not assume his wife's debt. Mondragon's appeal to the Supreme Court contested the CA’s findings, highlighting Sola's January 26, 1995, letter acknowledging the debt.

Issue of the Case Whether or not Sola assumed his wife's debt and is obligated to pay it.

Ruling to the Case: The Supreme Court ruled in favor of Mondragon and ordered Sola to pay the remaining balance of his wife's debt. The court held that Sola became a co-debtor of his wife's accountabilities with Mondragon based on his letter confirming the debt. There was legal compensation between Mondragon and Sola, as both parties were principal obligors and creditors of each other. Mondragon's act of withholding Sola's service fees and applying them to the debt was lawful.

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Article 1389

Article 1389. The action to claim rescission must be commenced within four years.

For persons under guardianship and for absentees, the period of four years shall not begin until the termination of the former's incapacity, or until the domicile of the latter is known. (1299)

Related Case

G.R. No. 191178               March 13, 2013

ANCHOR SAVINGS BANK (FORMERLY ANCHOR FINANCE AND INVESTMENT CORPORATION), Petitioner, vs. HENRY H. FURIGAY, GELINDA C. FURIGAY, HERRIETTE C. FURIGAY and HEGEM C. FURIGAY, Respondents.

Facts :

On April 21, 1999, ASB filed a verified complaint for sum of money and damages with application for replevin against Ciudad Transport Services, Inc. (CTS), its president, respondent Henry H. Furigay; his wife, respondent Gelinda C. Furigay; and a "John Doe."

Issue :

WHETHER OR NOT THE COURT OF APPEALS, IN CA G.R. CV NO 90123, HAS DECIDED A QUESTION OF SUBSTANCE, NOT HERETOFORE DETERMINED BY THE SUPREME COURT, OR HAS DECIDED IT IN A WAY PROBABLY NOT IN ACCORDANCE WITH LAW OR THE APPLICABLE DECISIONS OF THE SUPREME COURT, WHEN IT RENDERED THE DECISION DATED 28 MAY 2009, AND RESOLUTION DATED 22 JANUARY 2010, IN FINDING THAT PETITIONER FAILED TO PROVE THAT IT HAS RESORTED TO ALL LEGAL REMEDIES TO OBTAIN SATISFACTION OF ITS CLAIM, WITHOUT GIVING PETITIONER THE OPPORTUNITY TO BE HEARD OR THE CHANCE TO PRESENT EVIDENCE TO SUPPORT ITS ACTION, THEREBY DEPRIVING THE LATTER OF THE RIGHT TO DUE PROCESS.

Held :

Ruling of the Court

The Court finds the petition bereft of merit.

Section 1 of Rule 2 of the Revised Rules of Court requires that every ordinary civil action must be based on a cause of action. Section 2 of the same rule defines a cause of action as an act or omission by which a party violates the right of another. In order that one may claim to have a cause of action, the following elements must concur: (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages or other appropriate relief. In other words, "a cause of action arises when that should have been done is not done, or that which should not have been done is done."

"Essentially, the issue for resolution posed by petitioners is this: When did the four (4) year prescriptive period as provided for in Article 1389 of the Civil Code for respondent Philam to file its action for rescission of the subject deeds of donation commence to run?

The petition is without merit.

Article 1389 of the Civil Code simply provides that, ‘The action to claim rescission must be commenced within four years.’ Since this provision of law is silent as to when the prescriptive period would commence, the general rule, i.e, from the moment the cause of action accrues, therefore, applies. Article 1150 of the Civil Code is particularly instructive.

its cause of action and in apprising the respondents of the same so that they could defend themselves intelligently and effectively pursuant to their right to due process. It is a rule of universal application that courts of justice are constituted to adjudicate substantive rights. While courts should consider public policy and necessity in putting an end to litigations speedily they must nevertheless harmonize such necessity with the fundamental right of litigants to due process.

WHEREFORE, the petition is DENIED.

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ARTICLE 1362 OBLIGATIONS AND CONTRACTS

Article 1362. If one party was mistaken and the other acted fraudulently or inequitably in such a way that the instrument does not show their true intention, the former may ask for the reformation of the instrument.

Example :

A and B agreed to enter into a contract of lease .a made a mistake of preparing and sending a mortgage contract to B. B fraudulently edited the contract into a Deed of Sale.

A may ask for the reformation of the contract because A made a mistake of sending a wrong contract .A was mistaken while B fraudulently edited the contract .

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Article 1335 Obligations and Contracts

Article 1335. There is violence when in order to wrest consent, serious or irresistible force is employed.

There is intimidation when one of the contracting parties is compelled by a reasonable and well-grounded fear of an imminent and grave evil upon his person or property, or upon the person or property of his spouse, descendants or ascendants, to give his consent.

To determine the degree of intimidation, the age, sex and condition of the person shall be borne in mind.

A threat to enforce one's claim through competent authority, if the claim is just or legal, does not vitiate consent. (1267a)

Explanation

Violence here is more on physical coercion .

For example :

A repeatedly punched B in oder for B to sell his laptop to a .There is violence in this case .because in order to get the consent of B , A employed a serious and irressitible force of punching B repeatedly .

intimidation here is more on a moral and metal coercion .

Example :

A pointed a gun to B ,to compel be to sell her property to A. Here there is intimidation by a reasonable and well grounded fear of B upon his life .

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ARTICLE 1308 Obligations and Contracts

Article 1308. The contract must bind both contracting parties; its validity or compliance cannot be left to the will of one of them. (1256a)

This article refers to one of the characteristics of contract

THE MUTUALITY OF CONTRACT

Related Case

FLORENDO VS METROBANK

GR NO. 148325 SEPTEMBER 3,2007

Facts :

FLORENDO obtained a loan of Php 1.000,000.00 from Metrobank and signed a promissory note to secure the loan fixing the rate of 15.446 %per annum for the first 30days ,subject to upward /downward adjustments every 30days thereafter and a penalty charge of 18%per annum.

Issue :

Whether the escalation clause in the promissory note is illegal, excessive and arbitrary .

Held :

The court held that according to Article 1308 of this code ,"The contract must bind both the contracting parties ; it's validity and compliance cannot be left to the will of one of them .

Here ,the increase of interest rate unilaterally imposed by the bank without the petitioners assent are violative of the principle of mutuality of contracts ordained in Article 1308 and it is illegal ,excessive and arbitrary.

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ARTICLE 1281 OBLIGATIONS AND CONTRACTS

Article 1281. Compensation may be total or partial. When the two debts are of the same amount, there is a total compensation. (n)

Example :

A owes B Php 100,000.00.B owes A Php 50,000.00 .Both debts are due and demandable . Will there still be compensation?

Answer :Yes .There will be partial compensation in this case .