#oblicon

[hermosa-oblicon24]

Article 1410

The action or defense for the declaration of the inexistence of a contract does not prescribe.

The action for the declaration of inexistence or the defense on such is imprescriptible. The mere lapse of time does not validate a void contract, unlike in voidable contracts, which, if not assailed within the specific period provided by law, shall remain valid.

It is not necessary to go to the court to declare the nullity of a void contract if both parties agree that it is void and henceforth, on their own volition, change it. However, to avoid instances where one party refuses to restore what he has received out of a void contract, it is better to go to the court first to avoid inconvenience or to avoid taking the law into his own hands. Taking the law into one’s hands may lead to coercion which is a criminal offense.

The right to have a contract declared void ab initio may be barred by laches although not barred by prescription. It is an application of equity, based upon the grounds of public policy which require for the peace of society, discouraging stale claims. It is however exercised on the discretion of the court, its application controlled by equitable consideration.

Related/Cited Case

Heirs of Ureta v Heirs of Ureta

FACTS: Alfonso Ureta had 14 children, including, Policronio. The children of Policronio (Heirs of Policronio), are opposed to the validity of the Extrajudicial Partition. On October 1969, in order to reduce the inheritance taxes, Alfonso executed four (4) Deeds of Sale in favor of his children including Policronio. Since the sales were only made for taxation purposes and no monetary consideration was given, Alfonso continued to own, possess and enjoy the lands and their produce. On October 11, 1972, Alfonso died and his children acted as the administrator of his father’s estate. on November 22, 1974, Policronio died. The subject land under the deed of sale was never taken possession of by Policronio nor his heirs. On April 19, 1989, Alfonso’s heirs executed a Deed of Extra-Judicial Partition, which included all the lands that were covered by the four (4) deeds of sale that were previously executed by Alfonso for taxation purposes. Conrado, Policronio’s eldest son, representing the Heirs of Policronio, signed the Deed of Extra-Judicial Partition in behalf of his co-heirs.

On July 30, 1995, the Heirs of Policronio allegedly learned about the Deed of Extra-Judicial Partition involving Alfonso’s estate when it was published in the July 19, 1995issue of the Aklan Reporter. Believing that the six parcels of land belonged to their late father, and excluded from the Deed of Extra-Judicial Partition, the Heirs of Policronio sought to amicably settle but despite earnest efforts, the Heirs of Policronio filed a Complaint for Declaration of Ownership, Recovery of Possession over the subject land.

ISSUES:  Whether or not the Deed of Extra-Judicial Partition was valid.

HELD: It is valid. The Deed of Sale entered between Alfonso and Policronio is void for being an absolutely simulated sale. No actual consideration or money was given and there was no actual intent to enter into a sale. It was merely to avoid tax purposes The Deed of Extra-Judicial Partition did not need an SPA because partition among heirs is not legally deemed a conveyance of real property resulting in change of ownership. It is not a transfer of property from one to the other, but rather, it is a confirmation or ratification of title or right of property that an heir is renouncing in favor of another heir who accepts and receives the inheritance. Partition is not an act of strict dominion which requires an SPA. In fact, as between the parties, even an oral partition by the heirs is valid if no creditors are affected. The requirement of a written memorandum under the statute of frauds does not apply to partitions effected by the heirs where no creditors are involved. In the case of Badillo v. Ferrer, the court held a deed of extrajudicial partition is not voidable by lack of parties to give consent but unenforceable as an unauthorized contract in 1403(1). However, the Deed of Extra-Judicial Partition is not unenforceable but, in fact, valid, binding, and enforceable against all the Heirs of Policronio.  because of several circumstances which shows they gave their consent to Conrado to sign on their behalf such as that Extra-Judicial Partition was signed on 1989 but the siblings only came to know about it 1995, 5 years after, and Conrado didn’t inform his siblings during such span; Conrado retained possession of land under the Extra-Judicial Partition; 1 year after the sale, the Heirs of Policronio executed an SPA to have the land under the Extra-Judicial Partition be the subject of mortgage. Such acts shows the Heirs of Policronio were aware of the said Partition and the vitiation of consent is a mere afterthought

[digestsbymarianpurpleink]

PINGOL v. CA G.R. No. 102909 September 6, 1993

DOCTRINE

A deed of sale is absolute in nature although denominated as a "Deed of Conditional Sale" where there is no stipulation in the deed that title to the property sold is reserved in the seller until the full payment of the price, nor is there a stipulation giving the vendor the right to unilaterally resolve the contract the moment the buyer fails to pay within a fixed period. Moreover, in a contract of sale, the title passes to the vendee upon the delivery of the thing sold, whereas in a contract to sell, by agreement, ownership is reserved in the vendor and is not to pass until the full payment of the price. In a contract of sale, the vendor has lost and cannot recover ownership until and unless the contract is resolved or rescinded, whereas in a contract to sell, title is retained by the vendor until the full payment of the price, such payment being a positive suspensive condition, failure of which is not a breach but an event that prevented the obligation of the vendor to convey title from becoming effective. 

FACTS

Petitioner Vicente Pingol is the owner of Lot No. 3223 of the Cadastral Survey of Caloocan, with an area of 549 square meters, located at Bagong Barrio, Caloocan City. On 17 February 1969, he executed a "DEED OF ABSOLUTE SALE OF ONE-HALF OF (1/2) [OF] AN UNDIVIDED PORTION OF A PARCEL OF LAND" in favor of Francisco N. Donasco which was acknowledged before a notary public, in consideration of the sum of TWENTY THOUSAND AND FIVE HUNDRED THIRTY (P20,530.00) PESOS to be paid in several equal installments within a period of six (6) years, beginning January 1970. 

Private Respondent Francisco immediately took possession of the subject lot and constructed a house thereon. In January 1970, he started paying the monthly installments but was able to pay only up to 1972.

When Francisco Donasco died. At the time of his demise, he had paid P8,369.00, plus the P2,000.00 advance payment, leaving a balance of P10,161.00 on the contract price.  Lot No. 3223-A remained in the possession of Donasco's heirs. Not long after, the heirs filed an action for Specific Performance against spouses Pingol, and prayed that the defendants be ordered to accept the payment of the balance for the agreed price on the lot. 

In their answer, Spouses Pingol argued that the deed of sale embodied a conditional contract of sale as the consideration is to be paid on installment basis and considering the breach by Francisco of his contractual obligation, the sale was deemed to have been cancelled.  

The trial court ruled in favor of Spouses Pingol and held that the contract agreed upon by the parties was a “Contract to Sell” not a “Contract of Sale”, since Vicente Pingol had no intention to part with the ownership of the loan unless the full amount of the agreed price had been paid. The Court of Appeals reversed and set aside the decision, hence this petition for Certiorari. 

ISSUE/S

Whether the parties entered into a contract to sell. 

RULING

The Court ruled in the NEGATIVE. 

In Dignos vs. Court of Appeals, 16 we held that a deed of sale is absolute in nature although denominated as a "Deed of Conditional Sale" where there is no stipulation in the deed that title to the property sold is reserved in the seller until the full payment of the price, nor is there a stipulation giving the vendor the right to unilaterally resolve the contract the moment the buyer fails to pay within a fixed period. Exhibit "A" contains neither stipulation. What is merely stated therein is that "the VENDEE agrees that in case of default in the payment of the installments due the same shall earn a legal rate of interest, and to which the VENDOR likewise agrees."

Furthermore, as found by the Court of Appeals, the acts of the parties, contemporaneous and subsequent to the contract, clearly show that an absolute deed of sale was intended, by the parties and not a contract to sell:

P]ursuant to the deed, the vendor delivered actual and constructive possession of the property to the vendee, who occupied and took such possession, constructed a building thereon, had the property surveyed and subdivided and a plan of the property was prepared and submitted to the Land Registration Commission which approved it preparatory to segregating the same and obtaining the corresponding TCT in his name. Since the sale, appellee continuously possessed and occupied the property as owner up to his death on July 13, 1984 and his heirs, after his death, continued the occupancy and possession of the property up to the present. Those contemporaneous and subsequent events are demonstrative acts that the vendor since the sale recognized the vendee as the absolute owner of the property sold. All those attributes of ownership are admitted by defendants in their answer, specifically in paragraphs 7 and 9 of their special and affirmative defenses.

The contract here being one of absolute sale, the ownership of the subject lot was transferred to the buyer upon the actual and constructive delivery thereof. The constructive delivery of the subject lot was made upon the execution of the deed of sale while the actual delivery was effected when the private respondents took possession of and constructed a house on Lot No. 3223-A.

The delivery of the object of the contract divested the vendor of the ownership over the same and he cannot recover the title unless the contract is resolved or rescinded pursuant to Article 1592 of the New Civil Code which provides that:

In the sale of immovable property, even though it may have been stipulated that upon failure to pay the price at the time agreed upon the rescission of the contract shall of right take place, the vendee may pay, even after the expiration of the period, as long as no demand for rescission of the contract has been made upon him either judicially or by a notarial act. After the demand, the court may not grant him a new term.

Both the trial court and the Court of Appeals did not find that a notarial or judicial rescission of the contract had been made. Although Vicente Pingol asserts that he had declared to Francisco Donasco that he was cancelling the contract, he did not prove that his demand for rescission was made either judicially or by a notarial act.

[jdnoriel]

Tender of Payment and Consignation

ARTICLE 1257

In order that the consignation of the thing due may release the obligor, it must first be announced to the persons interested in the fulfillment of the obligation.

The consignation shall be ineffectual if it is not made strictly in consonance with the provisions which regulate payment. (1177) 

Stage that three possible situations may arise in Article 1257

The creditor may accept the thing or amount deposited. In such a case, the question of payment is settled altogether.

The creditor may refuse to accept the thing or amount deposited. In such as case, the debtor shall then bring an action against him in order to compel him to accept said thing or amount. In order that such action shall prosper, all of the requisites of a valid and effective consignation must be proved.

The creditor may neither accept nor impugn the consignation because he is not interested, or he is not known, or he is absent.

IMPUGN – MEANS TO THROW DOUBT OR QUESTION THE TRUTH OR VALIDITY

Example for Art 1257

Pedro the lessor of the apartment and Juan is the lessee Juan announced to Pedro that he would like to pay his due thru consignation, so the consignation is accepted by Pedro.

[cjoanalyn]

OBLICON

Art. 1182. When the Fulfilment of the condition depends upon the solve will of the debtor, the conditional obligations shall be void. If it depends upon chance or upon the will of a third party, the obligations shall take effect in conformity with the provision of this code.

DEFINITION

Potestative Condition – (Potestas – Power, Authority) it is a condition which one depends upon the will of one of the contracting parties. It is the power in which one of the party realise or prevent

Kinds of Potestative Condition

Simple Potestative Condition – it is not only manifestation of a will but also a realization of an external act, it depends on the voluntary act of the obligor

Purely Potestative Condition – depends solely upon the will,

Casual Condition – one which depends on upon chance or other factors, and not upon the will of the contracting parties.

Mixed Conditions – it is a will of the other contracting parties and other circumstances, including the will of a third person

___________________________________________________________________

SAMPLE CASE:

Nazario Trillana vs Quezon College, Inc.

G.R. No. L-5003. June 27, 1953

Facts:

On June 1, 1948, Damasa Crisostomo subscribed to a 200 shares of stock with a par value of P100.00 each with Quezon College. Included in her letter to the to the Board of Trustees of the Quezon College was the initial payment and statement that she will pay the balance after she has harvested some fish. On October 26, 1948, Damasa Crisostomo passed away.  No payment appears to have been paid, hence the claim before the CFI of Bulacan in her testate proceeding, for the collection of the sum of P20,000, representing the value of the subscription to the capital stock of the Quezon College, Inc. which was then opposed by the administrator of the estate.

Issue:

Whether or not the condition entered into by both parties is valid.

Ruling:

There is nothing in the record to show that the Quezon College, Inc. accepted the term of payment suggested by Damasa Crisostomo.

Under article 1182 of the new Civil Code: "If the fulfillment of the condition should depend upon the exclusive will of the debtor, the conditional obligation shall be void.”

[noelmendozasblog]

A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. (Art. 1305.) It is the formal expression by the parties of their rights and obligations they have agreed upon with respect to each other.

[pusakalye]

its kinda funny how i do really well w the 1-unit, 2-unit courses but if its like. major subject im like kill me now

[b1mb0bunny]

why must law be so fucking hard

[tfshouldidohere]

IM TIRED OF READUNG THE WORD CONSIGNATION !!!!!!!!!!!!!!!!!!!!!!!!!

[strilondestudies]

🌆 July 13, 2024 🌆

Today I finished studying in advance for the quiz 3 coverage of oblicon! I used up the rest of my pen writing notes lol but it's okay because I'm a huge pen hoarder and I have plenty more to spare. I also got ahold of my old notebooks from highschool that have a few pages left blank in them, so I thought of tearing them out, trimming them to remove the torn edge, and punching them to make new binder refills.

[denisaurwithclaws]

kala ko maliit na yung letters sa oblicon book ko pero nung nakapg-adjust na mata ko sa rfbt material na binabasa ko, malaki na pala eon 🧐

[cl4173]

laptop died.... guess it's a sign to rest na 😴 see you tomorrow, oblicon and intacc, wreck my brains for me xx

[hermosa-oblicon24]

Article 1382

Payments made in a state of insolvency for obligations to whose fulfillment the debtor could not be compelled at the time they were effected, are also rescissible. (1292)

Rescission under Article 1191 is a result of what people usually call as breach of contract. In reciprocal contracts, parties have mutual obligations and the obligation by either party to do, not to do or to give something is actually the cause for the other party to agree to also do, not do or give something in return. So when one does not perform his obligations under his contract, the other party has remedies under the law. Under the said Article 1191, the injured party can choose between fulfillment and rescission, with payment of damages in either case. This means that the injured party can either compel the guilty party to perform his part of the contract and claim for damages as a result of the breach, or it can rescind the contract and also claim for damages.

Illustration:

Question: Juan, an insolvent, owes Pedro P 1,000, but which debt has already been prescribed, Juan nevertheless still paid Pedro the P 1,000. May Pablo, another creditor of Juan rescind the payment made by Juan to Pedro?

Answer: Yes, although the payment should have been valid under the natural obligation (Art 1424), the creditor may rescind the payment made in the state of insolvency for an obligation to whose fulfillment the debtor could be compelled at the time they were effected.

[digestsbymarianpurpleink]

Resuena, et al v. CA G.R. NO. 128338: March 28, 2005

Doctrine

Article 1358 of the Civil Code provides that acts which have for their object the creation, transmission, modification, or extinguishment of real rights over immovable property must appear in a public instrument. [to affect third parties]

FACTS

Private respondent, Juanito Borromeo, Sr., is the co-owner and overseer of certain parcels of land located in Pooc, Talisay, Cebu, designated as Lots Nos. 2587 and 2592 of the Talisay-Manglanilla Estate. Respondent owns six-eighths (6/8) of Lot No. 2587 while the late spouses Inocencio Bascon and Basilisa Maneja (Spouses Bascon) own two-eights (2/8) thereof. On the other hand, Lot No. 2592 is owned in common by respondent and the heirs of one Nicolas Maneja. However, the proportion of their undivided shares was not determined a quo.

Borromeo developed portions of Lots Nos. 2587 and 2592 occupied by him into a resort known as the Borromeo Beach Resort. In his desire to expand and extend the facilities of the resort that he established on the subject properties, respondent demanded that petitioners, Resuena et. al to vacate the property. Petitioners, however, refused to vacate their homes.

Petitioners Tining Resuena, Alejandra Garay, Lorna Resuena, Eleuterio Resuena, and Unisima Resuena resided in the upper portion of Lot No. 2587, allegedly under the acquiescence of the Spouses Bascon and their heir, Andres Bascon. On the other hand, Eutiquia Rosario occupied a portion of Lot No. 2592, allegedly with the permission of the heirs of Nicolas Maneja, one of the original co-owners of Lot No. 2587. Respondent claims that all petitioners have occupied portions of the subject property by virtue of his own liberality.

The MTC held that Borromeo et. al had no right to evict petitioners therefrom. Consequently, respondent's Complaint was dismissed. On appeal, the RTC reversed the Decision of the MTC. The Court of Appeals affirmed the Decision of the RTC; hence, this petition. 

ISSUE/S

Whether the verbal contract between Borromeo and Spouses Bascon as to the portions each would occupy gave the latter capacity to assign their portion to the petitioners.

Whether the tolerance of one of the co-owners suffice to establish the petitioners right to occupancy? 

RULING

The Court ruled in the NEGATIVE. 

It is of no moment whether indeed, as petitioners claim, there was a verbal contract between Basilisa Maneja and Borromeo when the latter indicated the portions, they each were to occupy in Lot No. 2587. Such verbal contract, assuming there was one, does not detract from the fact that the common ownership over Lot No. 2587 remained inchoate and undivided, thus casting doubt, and rendering purely speculative any claim that the Spouses Bascon somehow had the capacity to assign or transmit determinate portions of the property to petitioners.

Thus, in order that the petition may acquire any whiff of merit, petitioners are obliged to establish a legal basis for their continued occupancy of the properties. 

The Court ruled in the NEGATIVE. 

The mere tolerance of one of the co-owners, assuming that there was such, does not suffice to establish such right. Tolerance does not bear any legal fruit, and it can easily be supplanted by a sudden change of heart on the part of the owner. Petitioners have not adduced any convincing evidence that they have somehow become successors-in-interest of the Spouses Bascon, or any of the owners of Lot No. 2587.

Indeed, there is no writing presented to evidence any claim of ownership or right to occupancy to the subject properties. There is no lease contract that would vest on petitioners the right to stay on the property. 

As discussed by the Court of Appeals, Article 1358 of the Civil Code provides that acts which have for their object the creation, transmission, modification, or extinguishment of real rights over immovable property must appear in a public instrument. Assuming that there was any verbal agreement between petitioners and any of the owners of the subject lots, Article 1358 grants a coercive power to the parties by which they can reciprocally compel the documentation of the agreement. 

Thus, the appellate court correctly appreciated the absence of any document or any occupancy right of petitioners as a negation of their claim that they were allowed by the Spouses Bascon to construct their houses thereon and to stay thereon until further notice. 

[jdnoriel]

OBLIGATION WITH A PERIOD

ARTICLE 1193

Obligations for whose fulfillment a day certain has been fixed, shall be demandable only when that day comes.

Obligations with a resolutory period take effect at once, but terminate upon arrival of the day certain.

A day certain is understood to be that which must necessarily come, although it may not be known when.

If the uncertainty consists in whether the day will come or not, the obligation is conditional, and it shall be regulated by the rules of the preceding Section. (1125a)

G.R. No. L-6648             July 25, 1955

VICTORIAS PLANTERS ASSOCIATION, INC., NORTH NEGROS PLANTERS ASSOCIATION, INC., FERNANDO GONZAGA, JOSE GASTON and CESAR L. LOPEZ, on their own behalf and on behalf of other sugar cane planters in Manapla, Cadiz and Victorias Districts, petitioners-appellees,

vs.

VICTORIAS MILLING CO., INC., respondent-appellant.

Ross, Selph, Carrascoso and Janda for appellant.

Tañada, Pelaez and Teehankee for appellees.

PADILLA, J.:           

FACTS:

Sometime around 1918, the petitioners Victorias Planters Association, Inc. and North Negros Planters Association, Inc. and the respondent Victorias Milling Co., Inc entered into a milling contract whereby they stipulated a 30-year period within which the sugarcane produced by the petitioner would be milled by the respondent.

The parties also stipulated that in the event of force majeure, the contract shall be deemed suspended during this period. During the Japanese occupation, the petitioners failed to deliver the sugar cane for four years. Added into those years was another two years after liberation when the mill was being rebuilt.

When both parties knew that their contract ended, petitioners assumed that they wouldn’t have any problem. On the other hand, defendant felt that petitioners, having failed to deliver for six years, should add another six years to fulfill their obligation, thus the case roused.

ISSUE:

Can the petitioners be compelled to deliver sugarcane for six more years after the expiration of the 30-year period to make up for what they failed to deliver to the respondent?

HELD:

No. Fortuitous event relieves the obligor from fulfilling the obligation. The stipulation in the contract that in the event of force majeure the contract shall be deemed suspended during the said period does not mean that the happening of any of those events stops the running of the period agreed upon. It only relieves the parties from the fulfillment of their respective obligations during that time the petitioner from delivering the sugar cane and the respondent central from milling. In order that the respondent may be entitled to demand from the petitioner the fulfillment of their part in the contracts, the latter must have been able to perform it but failed or refused to do so and not when they were prevented by force majeure such as war. To require the petitioners to deliver the sugar cane which they failed to deliver during the six years is to demand from them the fulfillment of an obligation, which was impossible of performance during the time it became due. Nemo tenetur ed impossibilia. The performance of what the law has written off cannot be demanded and required. The prayer that the petitioners be compelled to deliver sugar cannot for six years more to make up for what they failed to deliver, the fulfillment of which was impossible, of granted, would in effect be an extension of the terms of the contracts entered into by and between the parties.

[supremojohndee]

Article 1407 - ObliCon

Art. 1407. In a contract where both parties are incapable of giving consent, express or implied ratification by the parent, or guardian, as the case may be, of one of the contracting parties shall give the contract the same effect as if only one of them were incapacitated.

Asia Production Co., inc. vs. Pano

Facts:

Private respondents claim to be the owners of a building on a lot leased from Lucio San Andres. Respondents offered to sell the building to petitioner for 170k. The agreement and promise however was not put into writing and consequently there was a failure by the respondent to execute the Deed of Sale of the building and Deed of Assignment of the contract of lease. As a result, the petitioners removed all their properties and machineries in said lot and vacated the building and demanded the return of their partial payment from the respondents which was refused, hence the complaint. The RTC dismissed the complaint on the grounds that the complaint is barred by the statute of frauds.

Issue:

Whether or not statute of frauds is applicable in this case.

Held:

The purpose of the statute of frauds in Art. 1403 of the Civil Code which declares certain contracts to be unenforceable unless ratified is to prevent fraud & perjury in the enforcement of obligations depending for their evidence by  requiring parties to sign said contracts and transactions.

[noelmendozasblog]

An obligation is a juridical necessity to give, to do or not to do.

Obligation is a juridical necessity because in case of non-compliance, the courts of justice may be called upon to enforce its fulfi llment or, in default thereof, the economic value that it represents.