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Compilation Last Exam ObliccoonnnN!!!!!!

Compilation Last Exam ObliccoonnnN!!!!!!

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1 |
OBLICON FINAL EXAM CASES DIGEST
 
ROSENCOR vs Inquing
 
 
Facts: Respondents were lessees of a property own by the spouses Tiangco. They entered to an oralagreement. . The lessees were renting the premises then for P150.00 a month and were allegedlyverbally granted by the lessors the pre-emptive right to purchase the property if ever they decide to sell thesame. Upon the death of the spouses in 1975, the management of the properties were adjudicated to theheirs who were represented by Eufrocina de Leon. The lessees were allegedly promised the same pre-emptive right by the heirs of Tiangcos since the latter had knowledge that this right was extended to theformer by the late spouses Tiangcos.The lessees continued to stay in the premises and allegedly spent their own money amountingfrom P50,000.00 to P100,000.00 for its upkeep. These expenses were never deducted from the rentalswhich already increased to P1,000.00. The respondents received a demand letter from Atty Aguila for themto vacate the premises but they refused to. On June 1990, they received a letter from De Leon offering tosell the property for 2M but made a counter-offer of 1M. In November 1990, a certain Rene Juaquin came tothe leased premises introducing himself as its new owner. In January 1991, the lessees again receivedanother letter from Atty. Aguila demanding that they vacate the premises. A month thereafter, the lesseesreceived a letter from de Leon advising them that the heirs of the late spouses Tiangcos have already soldthe property to Rosencor. The following month Atty.. Aguila wrote them another letter demanding the rentalpayment and introducing herself as counsel for Rosencor/Rene Joaquin, the new owners of the premises.
 
The lessees offered to reimburse de Leon the selling price of P726,000.00 plus an additional P274,000.00 to complete their P1,000.000.00earlier offer.When their offer was refused, they filed the present action praying for the following: a)rescission of the Deed of Absolute Sale between de Leon and Rosencor datedSeptember 4, 1990 Held: Thus, the prevailing doctrine, as enunciated in thecited cases, is that a contract of sale entered into in violation of a right of first refusal of another person, while valid, is rescissible. There is, however, a circumstance which preventsthe application of this doctrine in the case at bench. In the cases cited above, the Courtordered the rescission of sales made in violation of a right of first refusal precisely because the vendeestherein could not have acted in good faith as they were aware or should have been aware of the right of firstrefusal granted to another person by the vendors therein. The rationale for this is found in theprovisions of the New Civil Code on rescissible contracts.Under Article 1381 of the New Civil Code, paragraph 3, a contract validly agreed upon may be rescinded if itis
 ―undertaken in fraud of creditors when the latter cannot in any manner collect
 
the claim due them.‖ 
Moreover,
under Article 1385, rescission shall not take place ―when the things which
are the object of the contract are legally in the possession of third persons who did not act in bad faith. Itmust be borne in mind that, unlike the cases cited above, the right of first refusal involved in the instant casewas an oral one given to respondents by the deceased spouses Tiangco and subsequently recognized bytheir heirs. As such, in order to hold that petitioners were in bad faith, there must be clear and convincing proof thatpetitioners were made aware of the said right of first refusal either by the respondents or by the heirs of thespouses Tiangco. It is axiomatic that good faith is always presumed unless contrary evidence is adduced Apurchaser in good faith is one who buys the property of another without notice that some other person has aright or interest in such a property and pays a full and fair price at the time of the purchase or before he hasnotice of the claim or interest of some other person in the property In this regard, the rule on constructivenotice would be inapplicable as it is undisputed that the right of first refusal was an oral one and that thesame was never reduced to writing, much less registered with the Registry of Deeds. In fact, even the leasecontract by which respondents derive their right to possess the property involved was an oral one.On this point, we hold that the evidence on record fails toshow that petitioners acted in bad faith in entering into the deed of sale overthe disputed property with the heirs of the spouses Tiangco. Respondents failed to present anyevidence that prior to the sale of the property on September 4, 1990,petitioners were aware or had notice of the oral right of first refusal.Respondents point to the letter dated June 1, 1990
as indicative of petitioners’ 
 knowledge of the said right. Inthis letter, a certain Atty. Erlinda Aguila demanded that respondent IreneGuillermo vacate the structure they were occupying to make way for itsdemolition.We fail to see how the letter could give rise to bad faithon the part of the petitioner. Nomention is made of the right of first refusal granted to respondents. The name of petitioner Rosencor or anyof it officers did not appear on the letter and the letter did not state that Atty. Aguila was writing in behalf of petitioner. In fact, Atty. Aguila stated duringtrial that she wrote the letter in behalf of the heirs of the spousesTiangco. Moreover, evenassuming that Atty. Aguila was indeed writing in behalf of petitioner Rosencor,there is no showing that Rosencor was aware at that time that such a right of first refusal existed.Neither was there any showing that after receipt of thisJune 1, 1990 letter, respondents notified Rosencor or Atty. Aguila of theirright of first refusal over the property. Respondents did not try to communicatewith Atty. Aguila and inform her about their preferential right over thedisputed property. There iseven no showing that they contacted the heirs of the spouses Tiangco after theyreceived this letter to remind them of their right over the property.Respondents likewise point to the letter dated October 9,1990 of Eufrocina de Leon, where she recognized the right of first refusal of respondents, as indicative of the bad faith of petitioners. We do not agree. Eufrocina de Leon wrote theletter onher own behalf and not on behalf of petitioners and, as such, it only showsthat Eufrocina de Leon was aware of the existence of the oral right of firstrefusal. It does not showthat petitioners were likewise aware of the existence of the said right.. Moreover, the letter was made amonthafter the execution of the Deed of Absolute Sale on September 4, 1990 betweenpetitioner Rosencor and the heirs of the spouses Tiangco. There is no showing that prior to thedate of the execution of the said Deed, petitioners were put on notice of theexistence of the right of first refusal.Clearly, if there was any indication of bad faith based on
respondents’ evidence, it would only be on the part of Eufrocina de Leon as she
 was aware of the right of first refusal of respondents yet she still sold thedisputed property to Rosencor. However,bad faith on the part of Eufrocina de Leon does not mean that petitionerRosencor likewise acted in bad faith. Thereis no showing that prior to the execution of the Deed of Absolute Sale,petitioners were made aware or put on notice of the existence of the oral rightof first refusal. Thus,
 
2 |
OBLICON FINAL EXAM CASES DIGEST
 
absent clear and convincing evidence to the contrary, petitioner Rosencor willbe presumed to have acted in good faith in entering into the Deed of AbsoluteSale over the disputed property.Considering that there is no showing of bad faith on thepart of the petitioners, the Court of Appeals thus erred in ordering therescission of the Deed of Absolute Sale dated September 4, 1990 betweenpetitioner Rosencor and the heirs of the spouses Tiangco. The acquisition by Rosencor of theproperty subject of the right of first refusal is an obstacle to the action forits rescission where, as in this case, it was shown that Rosencor is in lawfulpossession of the subject of the contract and that it did not act in bad faith..[34]This does not mean however that respondents are leftwithout any remedy for the unjustified violation of their right of firstrefusal. Their remedyhowever is not an action for the rescission of the Deed of Absolute Sale but anaction for damages against the heirs of the spouses Tiangco for the unjustifieddisregard of their right of first refusal.WHEREFORE, premises considered, the decision of the Court of Appeals datedJune 25, 1999 is REVERSED and SET ASIDE. The Decision dated May 13, 1996 of theQuezon City Regional Trial Court, Branch 217 is hereby REINSTATED insofar as itdismisses the action for rescission of the Deed of Absolute Sale datedSeptember 4, 1990 and orders the payment of monthly rentals of P1,000.00 permonth reckoned from May 1990 up to the time respondents leave the premises.
 
Khe hong cheng vs CA 355 scra 701
By Samboy Fajardo in Exclusively for 1-Manresa · Edit Doc · Delete  Facts:Petitioner is the owner of Butuan Shipping Lines. In 1985, the Phi agricultural Trading corporationshipped on board the vessel M/V Prince Eric, owned by petitioner, 3,400 bags of copra at Masbate for delivery toDipolog City. Said shipment was covered by a marine insurance policy issued by American Home Insurance Co.
(respondent Philam’s assured). However, the vessel sank resulting in the total loss of the
shipment. American HomeInsurance Company paid the amount of Php354K (the value of the copra) to the consignee.Having been subrogated to the rights of the consignee, AHIC instituted a civil case to recover the moneypaid to the consignee. While the case was still pending, on December 20, 1989, petitioner executed deeds of donations of parcels of land in favor of his children, co-petitioners Sandra Joy and Ray Steven. December 29, 1993(4 years after the donation and registration in the names of co-petitioners) the Trial Court rendered judgment infavor of petitioner. After the said decision became final and executor, a writ of execution, however was not served. An alias writ of execution was, thereafter, applied and granted on October 1996. Despite earnest efforts, the sheriff found no
property under the name of Butuan Shipping Lines/ or petitioner to levy or garnish the satisfaction of the TC’s
decision. When the sheriff went to Butuan City to enforce the alias writ of execution, they discovered that petitionerno longer had any property and that he had conveyed the subject properties to hi children.Thereafter, respondent Philam filed a complaint for the rescission of the deeds of donation executed bypetitioner in favor of his children and for the nullification of their titles alleging that petitioner executed the aforesaiddeeds in fraud of his creditors. Petitioner subsequently filed their answer to the complaint a quo. They moved for itsdismissal on the ground that the action has already prescribed. They posited that the registration of the deeds of donation in December 1989 constituted a constructive notice and since the complaint a quo was FILED IN February1997, or more than 4 years after said registration, the action was already barred by prescription.Issue:WON the prescriptive period to file an action for rescission of the subject deed of donation has already commenced.Ruling:
 Article 1389 of the CC simply provides that, ― The action to
claim rescission must commenced within four
years.‖ Since this provision 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 pf the CC is particularly instructive whichprovides that: The time for prescription for all kinds of actions, when there is no special provision which ordainsotherwise, shall be counted from the day they may be brought.The SC enunciated the principle that it is the legal possibility of bringing the action which determines thestarting point for the computation of the prescriptive period for the action. Article 1383 of the CC provides that: anaction for rescission is subsidiary; it cannot be instituted except when the party suffering damages has no otherlegal means to obtain reparation for the same. It is thus apparent that an action to rescind or an
accion pauliana 
 must be of last resort, availed of only after all other legal remedies have been exhausted and have been provenfutile.In the case at bar, it bears stressing that petitioner even expressly declared and represented that he hadreserved to himself property sufficient to answer for his debts contracted prior to this date. Respondent Philam onlylearned about the unlawful conveyance made by petitioner in January 1997 when its counsel accompanied thesheriff to butuan City to attach the properties of petitioner. There they found that he no longer had any propertiesin his name. It
was only then that respondent Philam’s action for rescission of the deeds of donation accruedbecause then it could be said that respondent Philam had exhausted all legal means to satisfy the trial court’s
 judgment in its favor. Since respondent Philam filed its complaint for
accion pauliana 
against petitioners barely amonth from its discovery that petitioner had no other property to satisfy the judgment award against him, its actionfor rescission of the subject deeds clearly had not yet prescribed.
UNION BANK VS ONG 491 S 581
ByRechilda OquiasinExclusively for 1-Manresa·Edit Doc·Delete This case is about an action for rescission of a contract of sale.
FACTS:
 
 
3 |
OBLICON FINAL EXAM CASES DIGEST
 
Spouses Alfredo and Susana Ong, respondents in this case, are majority stockholders of Baliwag mahoganyCorporation (BMC).On 10 October 2012, spouses Ong executed a Continuing Surety Agreement in favor of Union Bank (UB), thepurpose of which is to secure a credit line facility made available by the bank to BMC in the amount of Php40,000,000.00.The surety agreement expressly stipulated a solidary liability undertaking. About a year after, spouses Go sold a 974 sqm property consisting of a house and lot and all the improvementsstanding thereon, located at Greenhills, San Juan, Metro Manila to Jackson Kee, a co-respondent in this case, forthe amount of Php 12,500,000.00.The day after, Lee registered the sale and was issued a Transfer Certificate Title (TCT) in his name.It should be noted that during this time, BMC has already availed of the credit line facility and in fact had alreadyissued a total of 22 promissory notes in favor of Union Bank. A month after the sale of the Greenhills property, BMC filed a Petition for Rehabilitation and for Declaration of Suspension of Payments with the Securities and Exchange Commission (SEC).To protect its interest, UB lost no time and filed for an action for rescission of the sale between spouses Ong andLee for purportedly being in fraud of creditors, before the Pasig regional Trial Court.UB assailed the validity of the sale. It alleged that spouses Ong and Lee only entered into the transaction with thesole purpose of fraudulently removing the property from the reach of Union Bank and other creditors. And thisallegation is supported by the prersence of the following circumstances:1. Insufficiency of Consideration - as per UB, the 12.5M purchase price is below the fair market value at that time.2. Lack of Financial Capacity of Lee to bu the property - at that time his gross annual income is only 300K as perthe credit investigation conducted by the bank.3. Lee did not assert absolute ownership- he allowed the spouses Ong to retain possession of the property under apurported Contract of Lease.The respondents, as defendants amintained in their answer that:- both the contract of sale as well as the contract of lease are founded with good and valid consideration- both contracts were executed in good faithThe RTC ruled in favor of Union Bank which was later reversed and set aside by the Court of Appeals, hence wehave again the petition of Union Bank before the Supreme Court.
ISSUE:
 Whether or not, the Ong-Lee Contract of Sale partakes of a conveyance to defraud the creditor UB.
RULING:
 To settle the issue, the Court first addressed how the petitioner anchored its case on Art 1381 of the Civil Codewhich lists as among the rescissible contracts " those undertaken in fraud of creditors when the latter cannot in anyother manner collect the claim due them."1. Contracts in fraud of creditors are those executed with the intention to prejudice the rights of the creditors.Itshould not be confused with contracts entered into wthout such mal-intent even though as a direct consequence,the creditor may suffer some damages.In determining whether a contract is fraudulent, the first question that should come to mind is whether theconveyance was a bona fide transaction, a trick or a contrivance to defeat creditor. The burden of proof lies on thecreditor seking rescission. Creditor has to prove with competent evidence that such fraudulent intent exists on thepart of the debtor.In the case at bar, spouses Ong had sufficiently established the validity and legitimacy of the sale. They were ableto present a deed of sale that is duly notarized, which carries with it the presumption of validity and regularity. Thesale was also duly recorded and annotated on the title. Lee also caused the transfer of title to his name.

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