Midterm Output

CASE DIGEST

Herbert Diano

&

John Rhil Ramos

Law 1

Obligations and Contracts

MWF 5:00-6:00pm

Atty. Ma. Cassandra TevesG.R. No. 172239

MARMAN TRADING Vs. PLANTERS PRODUCTS, INC.,March 28, 2008Facts:

OnApril 27, 1992andJune 10, 1992, respondent PPI, as lessor, and petitioner Marman, as lessee, entered into two contracts of lease of sulfuric acid tanks and ammonium tanks for a period of ten years.The two contracts have identical stipulations on renewal of the lease at the expiration of the ten-year term. OnDecember 4, 2001,Marmanmanifested to PPI its intention to renew the lease contracts. Two months later, Marman communicated to PPI its proposed terms for the renewal of the lease.PPI replied with a counter offer which included, among others, lessening the period of the lease and increase in the variable fee, escalation rate and minimum required volume per year. OnApril 16, 2002, Marman wrote a letter urging PPI to adhere to the ten year renewal period under the original lease contracts.Marmanalso manifested its willingness to discuss the other points raised by PPI in the counter offer. OnJanuary 15, 2003, PPI wrote a letter to Marman expressing its inclination not to renew the lease contracts because of alleged violations of the original contracts of lease, specifically Marmans failure to conduct due maintenance of the pier facilities and overextension of its pipeline from the middle dock to the causeway area. At that time, the original lease contract had expired. OnFebruary 28, 2003, Marman filed a complaint for specific performanceagainst PPI with theRTCin Makati.Marman prayed, among others, that PPI execute new lease contracts for ten years pursuant to its option under Section 1 of the original contracts of lease. Issue:

Whether or not the MARMAN TRADING has a legal ground on renewing the contract of lease for another 10 years.Courts Ruling:

It is equally true that the contract cannot be renewed on the mere whim of the plaintiff since there has to be a mutual agreement as to the terms and conditions of the renewal.However, it should be noted that the provision had already specified a period of time for the renewal,particularly ten years.To follow defendant's line of thinking would be to disregard completely a contractual agreement between the parties.Clearly, the term of the renewal had already been pre-agreed upon, and can no longer be the subject of further negotiation. Moreover, this Court has the legal duty to uphold and enforce to the letter the contractual obligations of the parties, absent any showing that such obligations are contrary to laws, morals, good customs and public policy. Using such discretion, this Court finds that plaintiff is entitled to the renewal of the lease contracts under the commercial terms mutually agreed upon for an additional period of ten years, counted from the time of the expiration of the original contracts. First of all, the length of the term is already stated in the lease contracts, thus can no longer be altered by one party without the consent of the other. The terms of the renewal provisions cannot be disregarded ten years is ten years no matter how you look at it. Thus, the intent of the parties when the contracts were perfected should stand. Furthermore, this Court finds that the shortening of the term despite the increased rental rates and minimum volume constitutes unreasonable and exorbitant terms that would leave one party unable to recoup its investments while leaving the other party unjustly enriched at the expense of plaintiff. This Court cannot permit such an injustice to take place.

WHEREFORE, the appealed Decision isAFFIRMED INFULL.

SO ORDERED.G.R. No. 183035

OPTIMA REALTY CORPORATION vs. HERTZ PHIL. EXCLUSIVE CARS, INC.,

January 9, 2013

Facts:

Optima is engaged in the business of leasing and renting out commercial spaces and buildings to its tenants. On 12 December 2002, it entered into a Contract of Lease with Hertz over a 131-square-meter office unit and a parking slot in the Optima Building for a period of three years commencing on 1 March 2003 and ending on 28 February 2006. On 9 March 2004, the parties amended their lease agreement by shortening the lease period to two years and five months, commencing on 1 October 2003 and ending on 28 February 2006. Starting August 2005 to February 2006 Hertz failed to pay its monthly rental to Optima. In addition, Hertz likewise failed to pay its utility bills for the months of November 2005 to February of 2006. On 8 December 2005, Optima wrote another letter to Hertz, reminding the latter that the Contract of Lease could be renewed only by a new negotiation between the parties and upon written notice by the lessee to the lessor at least 90 days prior to the termination of the lease period. As no letter was received from Hertz regarding its intention to seek negotiation and extension of the lease contract within the 90-day period, Optima informed it that the lease would expire on 28 February 2006 and would not be renewed. On 21 December 2005, Hertz wrote a letter belatedly advising Optima of the formers desire to negotiate and extend the lease. However, as the Contract of Lease provided that the notice to negotiate its renewal must be given by the lessee at least 90 days prior to the expiration of the contract, petitioner no longer entertained respondents notice. On 1 March 2006, Optima, through counsel, wrote Hertz a letter requiring the latter to surrender and vacate the leased premises in view of the expiration of the Contract of Lease on 28 February 2006. It likewise demanded payment of the sum of 420,967.28 in rental arrearages, unpaid utility bills and other charges. Hertz, however, refused to vacate the leased premises.

Issue:

Whether or not Optima has the right to eject Hertz from the leased premises.

Courts Ruling:

The court finds the ejectment of Hertz from the building premises was proper. On the first ground, the records show that Hertz failed to pay rental arrearages and utility bills to Optima. Failure to pay timely rentals and utility charges is an event of default under the Contract of Lease,entitling the lessor to terminate the lease. Moreover, the failure of Hertz to pay timely rentals and utility charges entitles the lessor to judicially eject it under the provisions of the Civil Code. On the second ground, the records likewise show that the lease had already expired on 28 February 2006 because of Hertzs failure to request a renegotiation at least 90 days prior to the termination of the lease period. As the lease was set to expire on 28 February 2006, Hertz had until 30 November 2005 within which to express its interest in negotiating an extension of the lease with Optima. However, Hertz failed to communicate its intention to negotiate for an extension of the lease within the time agreed upon by the parties. Thus, by its own provisions, the Contract of Lease expired on 28 February 2006. Under the Civil Code, the expiry of the period agreed upon by the parties is likewise a ground for judicial ejectment.

WHEREFORE, in view of the foregoing, the instant Rule 45 Petition for Review is GRANTED. The Decision of the Regional Trial Court is hereby REINSTATED and AFFIRMED.

SO ORDERED.G.R No. 138677

TOLOMEO LIGUTAN and LEONIDAS DE LA LLANA, vs.HON. COURT OF APPEALS & SECURITY BANK & TRUST COMPANY

February 12, 2002

Facts:

Petitioner Ligutan and Dela Llana obtained a loan in the amount of P120,000 from, respondent Security Band and Trust Company. As a result, petitioner executed a promissory note binding them, jointly and severally, to pay the sum borrowed with an interest of 15.189% per annul upon maturity and pay a penalty of 5% every month on the outstanding principal and interest in case of default. Moreover, they agreed to pay 10% ofthe total amount due by way of attorneys fees if thematter were indorsed to a lawyer for collection or if a suit were instituted to enforce payment.The obligation matured and the bank granted an extension to pay. Despite several demands, petitioners failed to settle their debt. Consequently, the bank filed a complaint for recovery of the amount due with the Regional Trial Court (RTC). Due to petitioners absence on a certain hearing, the court considered the case submitted for decision. Thereafter,petitionersfiledamotionfor reconsideration; however, the trial court denied thesame and rendered a decision in favor of respondent. On appeal, petitioners assailed the imposition of the 2% service charge, the 5% per month penalty charge and 10% attorney's fees. Issue:

Whether or not respondent Security Band and Trust Company has legal right to impose the service and penalty charges, also the attorneys fee to Ligutan and Dela Llana.Courts Ruling:

According to the court, this is an example of an obligation with a penal clause. A penal clause, expressly recognized by law, is an accessory undertaking to assume greater liability on the part of an obligor in case of breach of an obligation.It functions to strengthen the coercive force ofthe obligation and to provide, in effect, for what could be the liquidated damages resulting from such breach.The obligor would then be bound to pay the stipulated indemnity without the necessity of proofon the existence and on the measure of damages caused by the breach. Although a court may not at liberty ignore the freedom of the parties to agree on such terms and conditions as they see fit that contravene neither law nor morals, good customs, public order or public policy, a stipulated penalty, nevertheless, may be equitably reduced by the courts if it is iniquitous or unconscionable or if the principal obligation has been partly orirregularly complied with.

WHEREFORE, the petition is DENIED.

SO ORDERED.

G.R. No. 128991

YOLANDA ROSELLO-BENTIR, SAMUEL PORMIDA and CHARITO PORMIDA vs.HONORABLE MATEO M. LEANDA and LEYTE GULF TRADERS, INC.

April 12, 2000Facts:

On May 15, 1992, respondent Leyte Gulf Traders, Inc. filed a complaint for reformation of instrument, specific performance, annulment of conditional sale and damages with prayer for writ of injunction against petitioners Yolanda Rosello-Bentir and the spouses Samuel and Charito Pormida. Respondent Corporation alleged that it entered into a contract of lease of a parcel of land with petitioner Bentir for a period of twenty (20) years starting May 5, 1968. According to Respondent Corporation, the lease was extended for another four (4) years or until May 31, 1992. On May 5, 1989, petitioner Bentir sold the leased premises to petitioner spouses Samuel Pormada and Charito Pormada. Respondent Corporation questioned the sale alleging that it had a right of first refusal. Rebuffed, it filed a case seeking the reformation of the expired contract of lease on the ground that its lawyer inadvertently omitted to incorporate in the contract of lease executed in 1968, the verbal agreement or understanding between the parties that in the event petitioner Bentir leases or sells the lot after the expiration of the lease, respondent corporation has the right to equal the highest offer. In due time, petitioners filed their answer alleging that the inadvertence of the lawyer who prepared the lease contract is not a ground for reformation. They further contended that respondent corporation is guilty of laches for not bringing the case for reformation of the lease contract within the prescriptive period of ten (10) years from its execution.Issue:

Whether the complaint for reformation of instrument hasprescribed or not.Courts Ruling:

Reformation of an instrument is that remedy in equity by means of which a written instrument is made orconstrued so as to expressor conform to the real intention ofthe parties when some error or mistakehas been committee. An action for reformation must be bought within the period prescribed by law; otherwise, it will be barred by the mere lapse of time. The prescriptive period for actions based upon a written contract and for reformation of aninstrument is ten (10) years.Prescription is intended to suppress stale and fraudulent claims arising from transactions like the one at bar which facts had become so obscure from the lapse of time or defective memory. In the case at bar, respondent had ten (10) years from 1968, the time when the contract of lease was executed, to file anaction for reformation. Sadly, it did so only on May 15, 1992 or twenty-four (24) years after the cause of action accrued, hence, its cause ofaction has become stale,hence, time-barred.

WHEREFORE,the petition is hereby GRANTED. The Decision of the Court of Appeals dated January 17, 1997 is REVERSED and SET ASIDE. The Order of the Regional Trial Court of Tacloban City, Branch 7, dated December 15, 1995 dismissing the action for reformation is REINSTATED.

SO ORDERED.G.R. No. 152071PRODUCERS BANK OF THE PHILIPPINESvs.EXCELSA INDUSTRIES, INC.May 8, 2009

Facts:

On 17 March 1987, respondent, EXCELSA INDUSTRIES, INC., presented for negotiation to petitioner drafts drawn under the letter of credit and the corresponding export documents in consideration for its drawings. Petitioner purchased the drafts and export documents by paying respondent the peso equivalent of the drawings. The purchase was subject to the conditions laid down in two separate undertakings by respondent dated 17 March and 10 April 1987. On 24 April 1987, Kwang Ju Bank, Ltd. notified petitioner through cable that the Korean buyer refused to pay respondents export documents because of typographical discrepancies. Kwang Ju Bank, Ltd. returned to petitioner the export documents. Upon learning about the Korean importers non-payment, respondent sent petitioner a letter dated 27 July 1987, informing the latter that respondent had brought the matter before the Korea Trade Court and that it was ready to liquidate its past due account with petitioner. Respondent sent another letter dated 08 September 1987, reiterating the same assurance. In a letter 05 October 1987, Kwang Ju Bank, Ltd. informed petitioner that it would be returning the export documents because of the non-acceptance by the importer. Petitioner demanded from respondent the payment of the peso equivalent of the export documents, plus interest and other charges, and also of the other due and unpaid loans. Due to respondents failure to heed the demand, petitioner moved for the extrajudicial foreclosure on the real estate mortgage over respondents properties.

Issue:

Whether the foreclosure of the real property valid or not.

Courts Ruling:

Respondent executed a real estate mortgage containing a "blanket mortgage clause,"also known as a "dragnet clause." It has been settled in a long line of decisions that mortgages given to secure future advancements are valid and legal contracts, and the amounts named as consideration in said contracts do not limit the amount for which the mortgage may stand assecurity if from the four corners of the instrument the intent to secure future and otherindebtedness can be gathered. Petitioner, therefore, was not precluded from seeking the foreclosure of the real estate mortgage based on the unpaid drafts drawn by respondent. In any case, respondent had admitted that aside from the unpaid drafts, respondent also had due and demandable loans secured from another account as evidenced by Promissory Notes. However , the Court of Appeals invalidated the extrajudicial foreclosure of the real estate mortgage on the ground that the posting and publication of the notice of extrajudicial foreclosure proceedings did not comply with the personal notice requirement under paragraph 12of the real estate mortgage executed between petitioner and respondent. The Court of Appeals also overturned the RTCs finding that respondent was guilty of estoppel by laches in questioning the extrajudicial foreclosure sale. The validity of the extrajudicial foreclosure of the mortgage is dependent on the following issues posed by petitioner: (1) the coverage of the blanket mortgage clause; (2) petitioners failure to furnish personal notice of the foreclosure to respondent; and (3) petitioners obligation as negotiating bank under the letter of credit.WHEREFORE, the instant petition for review on certiorari is GRANTED.

SO ORDERED.G.R. No. 141323

Pelayo vs. Perez

June 8, 2005

Facts:

David Pelayo through a Deed of Absolute Sale executed a deed of sale and transferred to Melki Perez two parcel of agricultural lands. Loreza Pelayo and another one whose signature is eligible witnesses such execution of deed.

Loreza signed only on the third page in the space provided for witnesses, as such, Perez application was denied.

Perez asked Loreza to sign on the first and should pages of the deed of sale but she refused. He then filed a complaint for specific performance against the Pelayo spouses.

The spouses moved to dismiss the complaint on the ground for lack of marital consent as provided by art 166 of the Civil Code.

Issue:

Whether or not the deed of sale was null and viod.

Courts Ruling:

Defendant Pelayo claimed in any event, in his Pre-trial brief filed on March 19, 1996, that the deed was without his wife Lorezas consent, hence, in light of Art. 166 of the Civil Code which provides:Article 166. Unless the wife has been declared a non-compos mentis or a spendthrift, or is under civil interdiction or is confined in a leprosarium, the husband cannot alienate or encumber any real property of the conjugal partnership without the wifes consent, it is null and void.

However, according to the Court of Appeals, Petitioners not having questioned the Decision of the CA dated November 24, 1994 which then attained finality, the ruling that the deed of sale subject of this case is not among the transactions deemed as invalid under R.A. No. 6657, is now immutable. CA ruled that petitioner Lorenza, by affixing her signature to the Deed of Sale on the space provided for witnesses, is deemed to have given her implied consent to the contract of sale.

Sale is a consensual contract that is perfected by mere consent, which may either be express or implied.A wifes consent to the husbands disposition of conjugal property does not always have to be explicit or set forth in any particular document, so long as it is shown by acts of the wife that such consent or approval was indeed given.In the present case, although it appears on the face of the deed of sale that Lorenza signed only as an instrumental witness, circumstances leading to the execution of said document point to the fact that Lorenza was fully aware of the sale of their conjugal property and consented to the sale.

IN VIEW OF THE FOREGOING, the petition isDENIED.

SO ORDERED.

G.R. Nos. 180631-33

PHILIPPINE CHARTER VS. CENTRAL COLLEGES

February 22, 2012

Facts:

Petitioner Central Colleges of the Philippines (CCP), an educational institution, contracted the services of respondents Dynamic planners and Construction Corporation (DPCC) to be its general contractor for the construction of its five (5)-storey school building. The construction of the entire building would be done in two phases with each phase valued at P124,000,000.00. To guarantee the fulfillment of the obligation, DPCC posted three (3) bonds, all issued by the Philippine Charter Insurance Corporation. The Phase 1 of the project was completed without issue. A down payment for the Phase 2 of the project was thereafter made. However, Phase 2 of the project encountered numerous delays. Only 47% of the work to be done was actually finished. CCP wrote DPCC and PCIC informing them of the breach in the contract and its plan to claim on the construction bonds. DPCC wrote PCIC confirming the delay, at the same time, requesting for the extension of its performance and surety bonds because the supposed revision of the plans would require more days. PCIC approved DPCCs request for extension of the bonds. However, negotiations to continue with the construction between CCP and DPCC reached an end. CCP hired another contractor to work on the school site. CCP sent a letter to PCIC of its final demand for the payment of P13,924,351.47 as indicated in the bonds. The latter denied formers claims against the three bonds.

Issue:

Whether or not there is a legal delay or default in part of DPCC. If there is, what are the legal remedies of CPP in relation to the delay? Courts Ruling:

Article 1169 of the New Civil Code provides: Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation. The civil law concept of delay or default commences from the time the obligor demands, judicially or extrajudicially, the fulfillment of the obligation from the obligee. Hence, DPCC incurred delay from the time CCP called its attention that it had breached the contract and extrajudicially demanded the fulfillment of its commitment against the bonds. It is the obligors culpable delay, not merely the time element, which gives the obligee the right to seek the performance of the obligation.Thus, the court held that due to DPCCs inexcusable delay, CCP has a legal right to demand but cant compel DPCC the fulfillment of its obligation for it is a violation on the principle of civil servitude. Moreover, CCP can hire another contractor to fulfill the obligation of DPCC in the expense of DPCC. Also CCP can demand and compel DPCC to pay damages suffered by CCP due to the delay.G.R. No. 156841

GF EQUITY, INC. vs. ARTURO VALENZONA

June 30, 2005

Facts:

Under the contract, GF Equity would pay Valenzona the sum of Thirty Five Thousand Pesos (P35,000.00) monthly, net of taxes, and provide him with a service vehicle and gasoline allowance. While the employment period agreed upon was for two years. The last sentence of paragraph 3 of the contract carried the following condition: 3. If at any time during the contract, the COACH, in the sole opinion of the CORPORATION, fails to exhibit sufficient skill or competitive ability to coach the team, the CORPORATION may terminate this contract. The caveat notwithstanding, Valenzona still acceded to the terms of the contract. Thereafter, Valenzona was terminated as coach of the Alaska team. Valenzona demanded from GF Equity payment of compensation arising from the arbitrary and unilateral termination of his employment. GF Equity, however, refused the claim. Valenzona thus filed before the RTC Manila a complaint against GF Equity for breach of contract with damages. The trial court, upholding the validity of the assailed provision of the contract, dismissed the complaint.

Issue:

Whether the questioned last sentence of paragraph 3 is violative of the principle of mutuality of contracts.

Courts Ruling:

Mutuality is one of the characteristics of a contract, its validity or performance or compliance of which cannot be left to the will of only one of the parties. The ultimate purpose of the mutuality principle is thus to nullify a contract containing a condition which makes its fulfillment or pre-termination dependent exclusively upon the will of one of the contracting parties. In the case at bar, the contract incorporates in paragraph 3 the right of GF Equity to pre-terminate the contract that if the coach, in the sole opinion of the corporation, fails to exhibit sufficient skill or competitive ability to coach the team, the corporation may terminate the contract. The assailed condition clearly transgresses the principle of mutuality of contracts. It leaves the determination of whether Valenzona failed to exhibit sufficient skill or competitive ability to coach Alaska team solely to the opinion of GF Equity. Whether Valenzona indeed failed to exhibit the required skill or competitive ability depended exclusively on the judgment of GF Equity. In other words, GF Equity was given an unbridled prerogative to pre-terminate the contract irrespective of the soundness, fairness or reasonableness, or even lack of basis of its opinion. To sustain the validity of the assailed paragraph would open the gate for arbitrary and illegal dismissals, for void contractual stipulations would be used as justification therefor. The assailed stipulation being violative of the mutuality principle underlying Article 1308 of the Civil Code, it is null and void.WHEREFORE, the decision of the Court of Appeals is hereby SET ASIDE and another rendered declaring the assailed provision of the contract NULL AND VOID and ORDERING petitioner, GF Equity, to pay private respondent, Arturo Valenzona, actual and attorneys. Costs against petitioner.

SO ORDERED.G.R. No. 165420

CONCEPCION R. AINZA, substituted by her legal heirs, DR. NATIVIDAD A. TULIAO, CORAZON A. JALECO and LILIA A. OLAYON vs. SPOUSES ANTONIO PADUA and EUGENIA PADUA

June 30, 2005Facts:

Spouses Eugenia and Antonio Padua owned a 216.40 sq. m. lot with an unfinished residential house Thereafter, Concepcion Ainza bought one-half of an undivided portion of the property from her daughter, Eugenia and the latters husband, Antonio, for P100,000.00. No Deed of Absolute Sale was executed to evidence the transaction, but cash payment was received by the respondents, and ownership was transferred to Concepcion through physical delivery to Natividad Tuliao. However, respondents caused the subdivision of the property into three portions and registered it in their names in violation of the restrictions annotated at the back of the title. Antonio claimed that his wife, Eugenia, admitted that Concepcion offered to buy 1/3 of the property who gave her small amounts over several years which totaled P100,000.00 by 1987 and for which she signed a receipt.

Issue:

Whether there was a valid contract of sale between Eugenia and Concepcion.

Courts Ruling:

There was a perfected contract of sale between Eugenia and Concepcion. The records show that Eugenia offered to sell a portion of the property to Concepcion, who accepted the offer and agreed to pay P100,000.00 as consideration. The contract of sale was consummated when both parties fully complied with their respective obligations. Eugenia delivered the property to Concepcion, who in turn, paid Eugenia the price of P100, 000.00, as evidenced by the receipt. The verbal contract of sale between Eugenia and Concepcion did not violate the provisions of the Statute of Frauds. When a verbal contract has been completed, executed or partially consummated, as in this case, the Statute of Frauds, which applies only to an executory agreement, will not bar its enforceability. However, the sale of the conjugal property by Eugenia without the consent of her husband is voidable. It is undisputed that the subject property was conjugal and sold by Eugenia in April 1987 or prior to the effectivity of the Family Code on August 3, 1988. Thus, the contract of sale between Eugenia and Concepcion being an oral contract, the action to annul the same must be commenced within six years from the time the right of action accrued. It is binding unless annulled. Antonio failed to exercise his right to ask for the annulment within the prescribed period, hence, he is now barred from questioning the validity of the sale between his wife and Concepcion.

WHEREFORE, the petition is GRANTED. The decision dated February 24, 2004 of the Court of Appeals in CA-G.R. CV No. 70239 and its resolution dated September 28, 2004 are REVERSED and SET ASIDE.

SO ORDERED.

G.R. No. 130913

OLIVERIO LAPERAL& FILIPINAS GOLF & COUNTRY CLUB INC. vs. SOLID HOMES, INC.

June 21, 2005

Facts:

Filipinas Golf Sales and Development Corporation, predecessor-in-interest of Filipinas Golf and Country Club, Inc., represented by its then President, Oliverio Laperal, entered into a Development and Management Agreement with respondent Solid Homes, Inc., a registered subdivision developer, involving several parcels of land owned by Laperal and FGSDC. Under the terms and conditions of the aforementioned Agreement and the Supplement, respondent undertook to convert at its own expense the land subject of the agreement into a first-class residential subdivision, in consideration of which respondent will get 45% of the lot titles of the saleable area in the entire project. The aforementioned Agreement was cancelled by the parties, and, in lieu thereof, two contracts identically denominated Revised Development and Management Agreement were entered into by respondent with the two successors-in-interest of FGSDC. Unlike the original agreement, both Revised Agreements omitted the obligation of petitioners Laperal and FGCCI to make available to respondent Solid Homes, Inc. the owners duplicate copies of the titles covering the subject parcels of land. It appears, however, that even as the Revised Agreements already provided for the non-surrender of the owners duplicate copies of the titles, respondent persisted in its request for the delivery thereof .Then, petitioners served on respondent notices of rescission of the Revised Agreements with a demand to vacate the subject properties and yield possession thereof to them.

Issue:

Whether the termination of the Revised Agreement and Addendum, because of the contractual breach committed by respondent solid homes, carried with it the effect provided under Article 1385 of the New Civil Code.

Courts Ruling:

Mutual restitution is required in cases involving rescission under Article 1191. Since Article 1385 of the Civil Code expressly and clearly states that rescission creates the obligation to return the things which were the object of the contract, together with their fruits, and the price with its interest, the Court finds no justification to sustain petitioners position that said Article 1385 does not apply to rescission under Article 1191.As a consequence of the resolution by petitioners, rights to the lot should be restored to private respondent or the same should be replaced by another acceptable lot. Applying the clear language of the law and the consistent jurisprudence on the matter, therefore, the Court rules that rescission under Article 1191 in the present case, carries with it the corresponding obligation of restitution.

WHEREFORE, the petition is hereby GRANTED. Accordingly, the assailed decision and resolution of the Court of appeals are REVERSED and SET ASIDE and the decision dated December 19, 1991 of the Regional Trial Court in Civil Case No. B-2069 REINSTATED.

No pronouncement as to costs.

SO ORDERED.

G.R. No. 188661

Estelita Villamar vs. Balbino Mangaoil

April 11, 2012Facts:

The petitioner Villamar, the registered owner of the property, entered into an agreement with the respondent Mangaoil to purchase and sale a parcel of land. The terms in their agreement includes the down payment of P 185,000, which will be for the payment of a loan secured from the Rural Bank of Cauayan so that it will be withdrawn and released from the bank and that a deed of absolute sale will be executed in favor of the respondent Mangaoil which was compliedby the parties. Consequently, the respondent Mangaoil informed the petitioner that he will withdraw from the agreement for the land was not yet free from encumbrances as there were still tenants who were not willing to vacate the land without giving them back the amount that they mortgaged the land. Also, the petitioner failed and refused, despite repeated demands, to handover the Certificate of Title. Then, the respondent Mangaoil demanded the refund of the downpaymentthathehadsecuredwiththepetitioner andfiledacomplaintwith the RTC torescind the contract of sale. In the response of the petitioner, she averred that she had already complied with the obligations and caused the release of the mortgaged land and a certain Atty. Pedro C. Antonio will facilitate the delivery of the Certificate of Title. The respondent insisted that he could rescind the contract for the petitioner had failed to deliver the Certificate ofTitle. The RTC and the CA dismissed the complaints for upon the deed of absolute sale, there was already a valid andconstructive delivery.

Issue:

Whether or not the failure of delivery of the Certificate of Title will constitute rescission of the contract.Courts Ruling:

TheCourtheldthatthefailureofthepetitionertocomplywiththeobligationto deliver to the respondent the possession of theproperty and the certificate of the title, Based on Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him. The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible. The respondent cannot be deprived of his right to demand for rescission in view of the petitioners failure to abide with item nos. 2 and 3 of the agreement. This remains true notwithstanding the absence of express stipulations in the agreement indicating the consequences of breaches, which the parties may commit. To hold otherwise would render Article 1191 of the NCCas useless.

IN VIEW OF THE FOREGOING,the instant petition isDENIED.The February 20, 2009 Decision and July 8, 2009 Resolution ofthe Court of Appeals, directing the rescission of the agreement and absolute deed of sale entered into by Estelita Villamar and Balbino Mangaoil and the return of the down payment made for the purchase of the subject property, areAFFIRMED.However, pursuant to our ruling inEastern Shipping Lines, Inc. v. CA,[31]aninterest of 12% per annumis imposed on the sum ofP185,000.00 to be returned to Mangaoil to be computed from the date offinality ofthisDecision until full satisfaction thereof.SO ORDERED.G.R. No. 174118The Roman Catholic Church vs. Regino Pante

April 11, 2012Facts:

The Roman Catholic Church, represented by the Archbishop of Caceres sold a 32-squaremeter lot to the respondent Regino Pante, who in the belief of the Church as an actual occupant of the lot. Terms fixed at a purchase price of P 11,200, a down payment P 1,120 and a balancepayablein threeyears. Subsequently, theChurchsold alot tothe spousesRubi,which included the lot that was previously sold to the respondent Pante. Then, the spouses Rubi erected a fence along the lot, including the lot of Pante, which blocked the access of Pante from their family home to the municipal road. Pante instituted an action before the RTC to annul the sale between the Church and spouses Rubi. The Church contended that Pante misrepresented that they were the actual occupant ofthe said lot. Also, the sale was a mistake that would constitute a voidable contract because Pant made them believe that he was a qualified occupant and Pante was aware that they sell lots only to those occupants and residents. Pante averred that they were using it as passageway from his family home to the road, whichsignifies that he is really using the actual lot. The RTC ruled in favor to the Church, for it was a misrepresentation of Pante and he delayed in the payment of the lot for he only consigned the balance with the RTC after the church refused to accept the payments. Then, the respondent Pante appealed to the appellate court, which reversed the decision of the RTC and granted the annulment of the sale. Thus, a petition by the Church was broughtbefore the certiorari.

Issue:

Whether the sale is voidable or not.Courts Ruling:

TheSupremeCourtruledthattherewerenomisrepresentationmadethatwould vitiate the consent and render the contract as voidable. Such consent should be free, voluntary, willful and a reasonable understanding of the various obligations that the parties have assumed for themselves. Howeverif consent is given through mistake, violence, intimidation, undue influence and fraud, it would render a contract voidable. In this case, there is no mistake as to the qualifications as to the policy of the Church on selling only for those who are occupants and residents as none of them had occupied or resided on the lot. Also, records show that the Parish Priest was aware that Parte was not an actual occupant and still he allowed the sale to Pante. So, the Church cannot by any means contend that the Church was misled by the act of Pante, that there was vitiation of consenton the said sale. From the time the sale to Pante was made and up until it sold the subject property to the spouses Rubi, the Church made no move to reject the contract with Pante; it did not even return the down payment he paid. The Churchs bad faith in selling the lot to Rubi without annulling its contract with Pantenegates its claim for damages. There was no vitiation of consent; therefore, the contract between the Church and Pant stands valid and existing. The delay of Pante in paying the full price could not nullify the contract, since it was a contract of sale In the terms of the contract, it did not stipulate that the Church will retain ownership until full payment of the price. The right to repurchase given to the Church if ever Pante fails to pay within the grace periodprovided would have been unnecessary had ownership not already passed to Pante.WHEREFORE, weDENYthe petition for review oncertiorari, andAFFIRMthe decision of the Court of Appeals dated May 18, 2006. Costs against the Roman Catholic Church.

SO ORDERED.G.R. No. 158597Prieto vs. CA

June 18, 2012Facts:

The plaintiff Marcos V. Prieto with his spouse and Susan Prieto executed a Special Power of Attorney (SPA) to spouses Antonio and Monette Prieto to use their realproperty in La Union. The real property was used as collateral for a loan of P 5,000,000 from Far Eastern Bank and Trust Company(FEBTC). The defendants spouses Antonio and Monette Prieto obtained the loan evidenced bypromissory notesandrealestatemortgagecontractswereinthenameofthedefendants,which later on was extra-judicially foreclosed by FEBTC because of the defendant failed to pay theirloans. The plaintiff Marcos Prieto filed Temporary Restraining Order (TRO) against the bank with the RTC, which was granted, contending that the real estate mortgage andpromissorynoteswasinthenameofthedefendant spousesthusit shouldbenullandvoid. The RTC dismissed the application for the writ of preliminary injunction stating that although the name of the petitioner/plaintiff Marcos as a registered owner, did not appear in the real estate contracts, the petitioner/plaintiff cannot be absolved from liability because he ratified the contract by acknowledging the contract. Such acknowledgement was sent through a said letter of acknowledgement and was found as a document of adhesion. As a principal, the contracts entered into by his agent on his behalf even if assuming that the agent has exceeded his authority. Thus, the plaintiff Marcos Prieto filed an appeal with the CA, which was dismissed because of the delay in filing and this petition was sought oncertiorari.Issue:

Whether or not the ratification by the plaintiff would validate the real estate mortgage and promissory notes and such ratification in letter of acknowledgment couldbe treated as a contract of adhesion.

Courts Ruling:

TheSupreme Courtheld thatthe plaintiffhad preciselygranted the defendant Antonio as his agent the authority to borrow money, and to transfer and convey thepropertybywayofmortgagetoFEBTC;tosign,executeanddeliverpromissory notesandto receive the proceeds of the loans on the formers behalf. In other words, the mortgage contracts were valid and enforceable against plaintiff, who is fully bound by their terms. It is stipulated under Article 1898 of the Civil Code, the acts of an agent done beyond the scope of his authority do not bind theprincipal unless the latter expressly or impliedly ratifies the same. As to the ratification by the contract of adhesion, although his agent, the defendant, had exceeded the express authority, the plaintiff is liable by virtue of the expressed ratification. In agency, ratification is the adoption or confirmation by one person of an actperformedonhisbehalfby anotherwithoutauthority.Thesubstanceofratificationistheconfirmation after the act, amounting to a substitute for a prior authority. The court held that the plaintiff was a lawyer that he is aware of the import and consequences of the letter of acknowledgment. It is not a contract of adhesion for theplaintiffisnottheweaker partybecauseheisfullyawareofthemeaningofeveryphrase and letter of the letter of acknowledgment as well as the legal effect of his confirmation ofthe act of his agent. Thus, the court affirms the decision of the CA.

WHEREFORE,the CourtAFFIRMSthe resolution promulgated by the Court of Appeals on April 24, 2002; andORDERSpetitioner to pay the costs of suit.

SOORDERED.G.R. No. 129928

Virgilio S. David vs. Misamis Occidental II Electric Cooperative,Inc.

August 25, 2005

Facts:

The petitioner Virgilio David was the proprietor of VSD Electric Sales, a company engaged in the business of supplying electrical hardware including transformers for rural electric cooperatives. It entered into a contract with the respondent Misamis Occidental II Electric Cooperative, Inc. (MOELCI) in order to solve its problem of power shortage affecting some areas within its coverage; MOELCI expressed its intention to purchase a 10 MVA powertransformer from David. The General Manager of MOELCI, Engr. Reynaldo Rada, went to meet David in the latters office in Quezon City. David agreed to supply the powertransformer provided that MOELCI would secure a board resolution because the item would still have to be imported. Both parties agreement on the purchase of transformers and its terms amounting to P 5,000,000 and it was shipped even without the down payment of MOELCI. After such time, nothing was heard from MOELCI and David went to Ozamis City to confirm if the shipment was made, which subsequently MOELCI had said that they were not stalling physical possession of the shipment. Contrary to what MOELCI had said, the shipment was actually received by them and copies of the bill of lading evidenced the receipt of the company of the said shipment. Several demand letters have been made to collect the amount of the transformers and David filed a complaint with the RTC for specific performance. MOELCI replied that there was no contract of sale because it was under the Statute of Frauds and that there was only a quotation letter that could not be considered as a binding contract.

Issue:

Whether or not there is a perfected contract of sale and the delivery consummated the contract?

Courts Ruling:

The Court ruled that there was a perfected contract of sale since there was a meeting of the minds, there was consent on the part of David to transfer ownership of the powertransformer to MOELCI in exchange for the price, thereby complying with the first element. Thus, the said document cannot just be considered a contract to sell but rather a perfected contract of sale. Also, the Court held that delivery consummated the contract, as one of the requisites ofcontract of sale. In the contract of sale, the seller is required to send the goods the goods to thebuyerdeliveryofthegoodstoacarrier, whethernamedbythebuyerornot,for thepurposeoftransmission to the buyer is deemed to bea delivery of the goods tothe buyer. Therefore, the contract between David and MOELCI is valid and enforceable. The petition is granted in favor of Davidto collect P5,472,722.27 with interests from the respondent.

WHEREFORE, the instant petition is DENIED.Costs against petitioner.

SO ORDERED.

G.R. No. 171076Goldloop Properties Inc. vs. GSIS

August 1, 2012

Facts:

The petitioner Goldloop Properties executed a Memorandum of Agreement (MOA) with the respondent Government Service Insurance System (GSIS) undertaking the construction of a condominium on the parcel of land and the renovation of the faade of Philcomcen Building at its own expense, which both was owned by the GSIS. Under the terms of their agreement, thepetitionerwillpayGSISforthelandineight installments.Also,thepartieswillsharefortheprofits of every condominium sold with a certain percent. Goldloop then performed the preparatory works, such as selling the condominiums but was not able to proceed because the building permits was not yet been approved and there were still accrued real property taxes that were unpaid. Later on, Goldloop received a letter from GSIS to rescind the MOA and Goldloop replied that the work stoppage was caused of the pending approval of the building permits. Still, GSIS sent a notice of rescission because Goldloop still have pending obligations under their MOA. Goldloop filed a complaint with the RTC contending that it had begun with thepreparatoryworksandsuchMOAshouldnotberescinded,whichRTCgrantedin favorofGoldloop. Upon the decision, GSIS appealed with the CA that it had the right to rescind thecontract for failure of Goldloop to comply with the obligation as stated in the MOA, which theCA granted in favor of theGSIS. Thus, the petitioner appealed with theSupreme Court.Issue:

Whether or not the Memorandum ofAgreement may be rescinded?

Courts Ruling:

The Court ruled that GSIS have every right to rescind the contract under the terms ofthe MOA. The parties may validly stipulate the unilateral rescission of their contract. UnderSection 2.4 of the MOA, if Goldloop fail to start construction Should Goldloop fail to start the construction works within the thirty (30) working days from date all relevant permits and licenses from concerned agencies are obtained, or within six (6) months from the date of the execution of this Agreement, whichever is earlier, or at any given time abandon the same orotherwise commit any breach of their obligations and commitments under this Agreement, this agreement shall be deemed terminated and cancelled without need of judicial action by giving thirty (30) days written notice to that effect to Goldloop who hereby agrees to abide by the decision of the GSIS. It is the duty of both parties to surrender whatever amount received or property to part with. Goldloop should return to GSIS the possession and control of the property subject of theiragreements while GSIS should reimburse Goldloop whatever amount it had received from the latter due to the MOA and the Addendum. The Court also held that rescission constitute a mutualrestitution of the things pursuant to Article 1191 of the Civil Code. In case both parties have committed a breach of the obligation, the liability of the first infractor shallbe equitably tempered by the courts.If it cannot be determined, which of the parties first violated the contract, the same shall be deemed extinguished, and each shall bear his own damages. The first infractor cannot be determined in this case but it cannot be conclusively presumed who is the first infractor, thus both parties shallbear the damages. Thus, it was direct by the Court for Goldloop to surrender possession of the land to the GSIS and that Goldloop should be reimbursed for expenses plus the return of the machineries, equipment and materials in the premises of the lot.G.R. No. 179505FIRST PHILIPPINE HOLDINGS CORPORATION Vs. TRANS MIDDLE EAST (PHILS.) EQUITIES INC.December 4, 2009Facts:

FPHC, formerly known as Meralco Securities Corporation, which was incorporated in30 June 1961by Filipino entrepreneurs led by Eugenio Lopez, Sr., is a holding company engaged in power generation and distribution, property development and manufacturing. FPHCs controlling interest is owned by the Lopez family. TMEE, on the other hand, is also a domestic corporation, allegedly owned by Benjamin (Kokoy) Romualdez. On24 May 1984, FPHC allegedly sold its 6,299,179 shares of common stock in Philippine Commercial International Bank (PCIB), now Equitable-PCI Bank, to TMEE. The 6,299,179 shares of common stock in PCIB are part of the sequestered properties that were allegedly illegally amassed by Benjamin Romualdez during the twenty-year reign of former President Ferdinand E. Marcos, and are among the purported ill-gotten wealth sought to be recovered by the Presidential Commission on Good Government (PCGG)viaa civil case docketed as Civil Case No. 0035 before the Sandiganbayan. According to FPHC, said shares were obtained by TMEE through fraud and acts contrary to law, morals, good customs and public policy. Such being the case, their acquisition is either voidable or void or unenforceable. On27 June 2006, TMEE filed a Motion to Dismiss the Complaint-in-Intervention of FPHC on the ground, among other things, that the action of FPHC had already prescribed.TMEE argued that under Article 1391 of the Civil Code, FPHC only had four years from 24 May 1984, the date of the sale or until 24 May 1988 within which to annul the validity of the sale transaction on the ground of fraud.Since FPHC filed the Complaint-in-Intervention only on28 December 1988, it meant that the action was seven months late from the prescriptive period.

Issue: Whether the contract of sale of stock is void. Whether there is a prescribe time to file an action for the annulment of a contract of sale.Courts Ruling:

In its Resolution dated6 September 2007, the Sandiganbayan denied FPHCs motion for reconsideration stressing anew that the subject sale was not voidab initio,but merely voidable. Grounded on having been obtained fraudulentlywith the connivance of defendant Kokoy Romualdezs dummy directors and officers in plaintiff Board and Executive Committee, in breach of their fiduciary obligations to plaintiff and its stockholders under the Corporation Code. Under Article 1391 of the Civil Code, a suit for the annulment of a voidable contract on account of fraud shall be filed within four years from the discovery of the same. Here, from the time the sale transactiontook place, FPHC did not deny that it had actual knowledge of the same. Despite all this knowledge, petitioner did not question the said sale from its inception and sometime thereafter.It was only after four years and seven months had lapsed following the knowledge or discovery of the alleged fraudulent sale that petitioner assailed the same.By then, it was too late for petitioner to beset the same transaction, since the prescriptive period had already come into play.

WHEREFORE, the instant petition is DENIED. Costs against petitioner.

SO ORDERED.G.R. No. 176841

ANTHONY ORDUA, DENNIS ORDUA, and ANTONITA ORDUA vs. EDUARDO J. FUENTEBELLA, MARCOS S. CID, BENJAMIN F. CID, BERNARD G. BANTA, and ARMANDO GABRIEL, JR.June 29, 2010Facts:

Gabriel Sr. sold the subject lot to petitioner Antonita Ordua (Antonita), but no formal deed was executed to document the sale. The contract price was apparently payable in installments as Antonita remitted from time to time and Gabriel Sr. accepted partial payments. One of the Orduas would later testify that Gabriel Sr. agreed to execute a final deed of sale upon full payment of the purchase price. After the death of Gabriel Sr., his son and namesake, respondent Gabriel Jr., secured over the subject lot and continued accepting payments from the petitioners. Despite all those payments made for the subject lot, Gabriel Jr. would later sell it to Bernard Banta (Bernard) obviously without the knowledge of petitioners. the subject lot has a lot of successive buyers, Bernard, then Marcos and Benjamin, and finally Eduardo. Furthermore, respondent Eduardo, before buying the property, was said to have inspected the same and found it unoccupied by the Orduas. Eduardo, through his lawyer, sent a letter addressed to the residence of Gabriel Jr. demanding that all persons residing on or physically occupying the subject lot vacate the premises or face the prospect of being ejected. According to Eduardo, the sale between Gabriel Sr. and Ordua is in violation of Statute of Fraud since there is no formal deed was executed to document the sale of real property.Issue:

Whether or not the sale of the subject lot by Gabriel Sr. to Antonita is unenforceable under the Statute of Frauds.

Courts Ruling:

Statute of Frauds expressed in Article 1403, par. (2), of the Civil Code apply only to executory contracts. The Statute of Frauds, in context, provides that a contract for the sale of real property or of an interest therein shall be unenforceable unless the sale or some note or memorandum thereof is in writing and subscribed by the party or his agent. However, where the verbal contract of sale has been partially executed through the partial payments made by one party duly received by the vendor, as in the present case, the contract is taken out of the scope of the Statute. The Statute requires certain contracts to be evidenced by some note or memorandum in order to be enforceable. The term Statute of Frauds is descriptive of statutes that require certain classes of contracts to be in writing. The Statute does not deprive the parties of the right to contract with respect to the matters therein involved, but merely regulates the formalities of the contract necessary to render it enforceable. There can be no serious argument about the partial execution of the sale in question. The records show that petitioners had, on separate occasions, given Gabriel Sr. and Gabriel Jr. sums of money as partial payments of the purchase price. Gabriel Jr. duly receipted these payments. Hence, the sale between Gabriel Sr. to Antonita is valid and enforceable, since there is a partial execution on the part of Antonita. The subject sale is no longer within the purview of the Statute of Frauds.

WHEREFORE, the petition is herebyGRANTED. No pronouncement as to costs.

SO ORDERED.G.R. No. 173227

SEBASTIAN SIGA-AN vs. ALICIA VILLANUEVAJanuary 20, 2009

Facts:

Respondent Alicia Villanueva was a businesswoman engaged in supplying office materials and equipment to the Philippine Navy Office while petitioner was a military officer and comptroller of the PNO from 1991 to 1996. Respondent claimed that sometime in 1992, petitioner approached her inside the PNO and offered to loan her the amount ofP540, 000.00. Since she needed capital for her business transactions with the PNO, she accepted petitioners proposal.The loan agreement was not reduced in writing.Also, there was no stipulation as to the payment of interest for the loan. On 31 August 1993, respondent issued a check as partial payment of the loan.Later, she issued another check as payment of the remaining balance of the loan.Petitioner told her that since she paid a total amount ofP700,000.00, the excess would be applied as interest for the loan.Not satisfied with the amount applied as interest, petitioner pestered her to pay additional interest.Petitioner threatened to block or disapprove her transactions with the PNO if she would not comply with his demand.asked petitioner for receipt for the payments but petitioner told her that it was not necessary as there was mutual trust and confidence between them. According to her computation, the total amount she paid to petitioner for the loan and interest accumulated toP1,200,000. Thereafter, respondent consulted a lawyer regarding the propriety of paying interest on the loan despite absence of agreement to that effect.Her lawyer told her that petitioner could not validly collect interest on the loan because there was no agreement between her and petitioner regarding payment of interest. Moreover, her lawyer told her she could demand for the return of the excess amount under the principle of solutio indebiti.

Issue:

Whether or not the principle of solutio indebiti can be a ground to demand the return of the excessive interest.

Courts Ruling:

Under Article 1960 of the Civil Code, if the borrower of loan pays interest when there has been no stipulation therefor, the provisions of the Civil Code concerning solutio indebitishall be applied.Said provision provides that if something is received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arise. The quasi-contract ofsolutio indebitiharks back to the ancient principle that no one shall enrich himself unjustly at the expense of another. The principle ofsolutio indebitiapplies where (1) a payment is made when there exists no binding relation between the payor, who has no duty to pay, and the person who received the payment; and (2) the payment is made through mistake, and not through liberality or some other cause. We have held that the principle ofsolutio indebitiapplies in case of erroneous payment of undue interest. Respondent was under no duty to make such payment because there was no express stipulation in writing to that effect.There was no binding relation between petitioner and respondent as regards the payment of interest.The payment was clearly a mistake.Since petitioner received something when there was no right to demand it, he has an obligation to return it. Since we have previously found that petitioner is not entitled to payment of interest and that the principle ofsolutio indebitiapplies to the instant case, petitioner should return to respondent the excess with its interest, moral damage and attorneys fee.

So ORDERED.G.R. No. 182435Lilia and Luz, et al. vs. Florante BaylonAugust 13, 2012Facts:

The spouses Florentino Baylon and Maximina Baylon who died survived by their legitimate children, namely, Rita , Victoria, Dolores, Panfila, Ramon and herein petitioner Lilia. Subsequently,the legitimate children Doloresdiedand without issue and Victoria who died was survived by her daughter, herein petitioner Luz B. Adanza. Ramon died and was survived by herein respondent Florante Baylon, his child from his first marriage, as well as by petitioner Flora Baylon, his second wife, and their legitimate children, namely, Ramon, Jr. and herein petitioners Remo, Jose, Eric, Florentino and Ma. Ruby, all surnamed Baylon. The petitioners questioned the land that was owned by the spouses Baylon and were notpartitioned betweenthe heirs.The petitioners contended that RitaBaylon tookpossession oftheparcels ofland andappropriated itfor herself,plus theincomefrom the same. Thus, the petitioners filed a complaint with the RTC and during the pendency of the case, Rita had donated a parcel of land to Florante Baylon then Rita died and without issue. Upon learning this, the petitioners filed a supplemental petition to rescind the donation in accordance with Article 1381(4) of the Civil Code for such land belonged to the estate of the Spouses Baylon. They further alleged that Rita was already sick and cannot consent to such donation. Issue:

Whether or not the donation may only be rescinded if such property belonged to the estate of the Spouses Baylon.

Courts Ruling:

The Court held that rescission under Article 1381(4) of the Civil Code is not preconditioned upon the judicial determination as to the ownership of the thing subject of litigation. Such rescission does not dependon the decision of thecourts on the thing in litigation. The primal purpose of Article 1381 is to secure the possible effectivity of the impending judgment by acourt with respect to the thing subject of litigation. It seeks to protect the binding effect of acourts impending decision vis--vis the thing subject of litigation regardless of which among the contending claims therein would subsequently be upheld. The petitioners had sufficiently established the presence of the requisites for the rescission of a contract pursuant to Article 1381. It is undisputed that, atthe time Rita gratuitously conveyed them, the lots are among the properties that were the subject of the partition case then pending with the RTC.It is also undisputed that Rita did not inform nor sought the approval from the petitioners or ofthe RTC with regard to the donation inter vivos of the said parcels of land to Florante. Also, the Court held that Even if the donation inter vivos is validly rescinded, a determination as to the ownership of the subject parcels of land is still necessary. It should be stressed that the partition proceedings before the RTC only covers the properties co-owned by the parties therein in their respective capacity as the surviving heirs of Spouses Baylon. Hence, the authority of the RTC to issue an order of partition in the proceedings before it only affects those properties which actually belonged to theestate of Spouses Baylon. In this regard, lots as claimed by Florante, are indeed exclusively owned by Rita, then the saidparcelsoflandmaynotbepartitionedsimultaneouslywiththeotherproperties subjectofthepartition casebefore theRTC.In suchcase,although theparties inthe case beforetheRTC are still co-owners of the said parcels of land, the RTC would not have the authority to direct thepartition of thesaid parcels ofland as theproceedings before itis only concerned with theestate of Spouses Baylon.

WHEREFORE, in consideration of the foregoing disquisitions, the

petition is PARTIALLY GRANTED.

So. ORDERED.G.R. No. 165907Spouses Narvaez vs. Spouses Alciso

July 27, 2009Facts:

Larry A. Ogas owned a 1,329-square meter parcel of land situated in Pico, La Trinidad, Benguet.The property was subject to a 30-year lease agreement with Esso Standard Eastern, Inc.Ogas sold the property to his daughter Rose O. Alciso. On 25 August 1979, Alciso entered into a Deed of Sale with Right to Repurchase, selling the property to Jaime Sansano forP10,000.Alciso later repurchased the property from Sansano and, on 28 March 1980, she entered into another Deed of Absolute Sale,this time selling the property to Celso S. Bate forP50,000.On 14 August 1981, Bate entered into a Deed of Sale of Realty,selling the property to the spouses Dominador R. Narvaez and Lilia W. Narvaez forP80,000. In 1982, the Spouses Narvaez built a commercial building on the property amounting toP300,000. Alciso demanded that a stipulation be included in the 14 August 1981 Deed of Sale of Realty allowing her to repurchase the property from the Spouses Narvaez.In compliance with Alcisos demand, the Deed stated that, The SELLER (Bate) carries over the manifested intent of the original SELLER of the property (Alciso) to buy back the same at a price under such conditions as the present BUYERS (Spouses Narvaez) may impose.The Spouses Narvaez furnished Alciso with a copy of the Deed. Alciso alleged that she informed the Spouses Narvaez that she wanted to repurchase the property.The Spouses Narvaez demandedP300,000, but Alciso was willing to pay onlyP150,000.Alciso and the Spouses Narvaez failed to reach an agreement on the repurchase price.Issue:

Whether or not Alciso can repurchase the property on the grounds of stipulation pour autrui.Courts Ruling:

InLimitless Potentials, Inc. v. Quilala,[15]the Court laid down the requisites of a stipulationpour autrui: (1) there is a stipulation in favor of a third person; (2) the stipulation is a part, not the whole, of the contract;(3) the contracting parties clearly and deliberately conferred a favor to the third person the favor is not an incidental benefit; (4) the favor is unconditional and uncompensated; (5) the third person communicated his or her acceptance of the favor before its revocation; and (6) the contracting parties do not represent, or are not authorized by, the third party. All the requisites are present in the instant case: (1) there is a stipulation in favor of Alciso; (2) the stipulation is a part, not the whole, of the contract; (3) Bate and the Spouses Narvaez clearly and deliberately conferred a favor to Alciso; (4) the favor is unconditional and uncompensated; (5) Alciso communicated her acceptance of the favor before its revocation she demanded that a stipulation be included in the 14 August 1981 Deed of Sale of Realty allowing her to repurchase the property from the Spouses Narvaez, and she informed the Spouses Narvaez that she wanted to repurchase the property; and (6) Bate and the Spouses Narvaez did not represent, and were not authorized by, Alciso.

WHEREFORE, the CourtDENIESthe petition Spouses Narvaez and let Spouses Alciso repurchase the property on the grounds of stipulation pour autrui.Herbert Diano Cases 1-10John Rhil Ramos Cases 11-20