CIVIL LAW

Soledad Dalton v. FGR Realty and Development Corp., Felix Ng, Nenita Ng, and
Florita Dayrit or Florita Regner
G.R. No. 172577, 19 Janary 2!11, S"C#ND D$%$S$#N, &Carpio, J.'
Failure to comply strictly with any of the requisites will render the consignation
void. Substantial compliance is not enough. The giving of notice to the persons
interested in the performance of the obligation is mandatory. Failure to notify the
persons interested in the performance of the obligation will render the consignation void
A parcel of land owned by respondent Flora R. Dayrit was leased to petitioners
Dalton, et. al. Eventually, the land was sold to respondent FGR Realty and
Development Corporation. FGR Realty and Dayrit decided not to accept payments from
Dalton, et. al. for the purpose of terminating the lease agreements.
Dalton, et. al. filed a complaint with the Regional rial Court and attached was a
consignation of the rental payments. !owever, they failed to notify the other party of
such action. FGR Realty and Dayrit withdrew the consigned amount with reservation to
"uestion the validity of the consignation.
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'hether or not the consignation made by Dalton, et. al. is void
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(etition D"N$"D.
Compliance with the re"uisites of a valid consignation is mandatory. Failure to
comply strictly with any of the re"uisites will render the consignation void. $ubstantial
compliance is not enough. he giving of notice to the persons interested in the
performance of the obligation is mandatory. Failure to notify the persons interested in
the performance of the obligation will render the consignation void.
%nder Art. )*+, of our Civil Code, in order that consignation of the thing due may
release the obligor, it must first be announced to the persons interested in the fulfillment
of the obligation. he consignation shall be ineffectual if it is not made strictly in
consonance with the provisions which regulate payment . #n said Article )*+-, it is
further stated that the consignation having been made, the interested party shall also be
notified thereof.
'e hold that the essential re"uisites of a valid consignation must be complied
with fully and strictly in accordance with the law, Articles )*+. to )*.), /ew Civil Code.
hat these Articles must be accorded a mandatory construction is clearly evident and
plain from the very language of the codal provisions themselves which re"uire absolute
compliance with the essential re"uisites therein provided. $ubstantial compliance is not
enough for that would render only a directory construction to the law. he use of the
words 0shall0 and 0must0 which are imperative, operating to impose a duty which may be
enforced, positively indicate that all the essential re"uisites of a valid consignation must
be complied with.
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Carolina )ernande*+Nievera, et. al. v. ,il-redo )ernande*, et.al.
G.R. No. 1711.5, 1/ Fe0rary 2!11, S"C#ND D$%$S$#N, &(eralta, J.'
The test of incompatibility is whether the two obligations can stand together,
each one having its independent existence. If they cannot, they are incompatible, and
the latter obligation novates the first.
1ro2ect 3overs Realty 4 Development Corporation 513RDC6, one of the
respondents, entered into different agreements with the other respondents !ome
#nsurance 4 Guaranty Corporation 5!#GC6 and (and 7an8 of the 1hilippines through its
president 3ario 9illamor in reference to construction pro2ects contemplated to be
e:ecuted in 7atangas and Caloocan City. 13RDC then entered into a 3emorandum of
Agreement 53;A6 with petitioners Carolina !ernande<=/ievera, 3argarita !. 3alvar
and Demetrio 1. !ernande< wherein 13RDC was given the option to buy pieces of land
owned by the former within )* months from the date of the instrument along with the
payment of option money. #t was further stated that in case there is failure to avail within
the stipulated option period of )* months, the option money shall be forfeited in favor of
the vendor and the vendee shall return all the ransfer Certificates of itle 5C6 of the
covered parcels of land to the former.
'hen 13RDC decided to convey more properties to its Asset 1ool, it entered a
Deed of Assignment and Conveyance with (71 and Demetrio, who acted through the
same special power of attorney used in the 3;A. he DAC sought to transfer and
assign some lands in Area ## to the asset pool in e:change for a number of shares of
stoc8 which had been issued in favor and in the name of Demetrio.
13RDC admits that they did not avail the e:press stipulation of )*=month option
period in the 3;A. !ernande<=/ievera, et. al. demands that the Cs be returned to
them but 13RDC refused contending that the properties were already transferred and
assigned to the Asset 1ool pursuant to the DAC. !ernande<=/ievera, et. al. filed an
action to rescind the 3;A and to declare the DAC a nullity. he trial court ruled in favor
of !ernande<=/ievera. Aggrieved, the other party appealed to the Court of Appeals
which reversed and set aside the ruling of the trial court. !ence, this petition.
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'hether or not the 3emorandum of Agreement was novated by the Deed of
Assignment and Conveyance
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(etition D"N$"D.
!ernande<=/ievera, et. al.>s cause stems from the failure of 13RDC to restore to
them the possession of the Cs of the lands within Area ## upon its failure to e:ercise
the option to purchase within the )*=month period stipulated in the 3;A. !ernande<,
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et. al. maintain, however, that said obligation, dependent as it is on the e:ercise of the
option to purchase, has altogether been e:pressly obliterated by the terms of the DAC
whereby !ernande<=/ievera, et. al., through Demetrio as attorney=in=fact, have agreed
to novate the terms of the 3;A by e:tinguishing the core obligations of 13RDC on the
payment of option money. his seems to suggest that with the e:ecution of the DAC,
13RDC has already entered into the e:ercise of its option e:cept that its obligation to
deliver the option money has, by subse"uent agreement embodied in the DAC, been
substituted instead by the obligation to issue participation certificates in Demetrio>s
name but which, li8ewise, has not yet been performed by 13RDC. 7ut !ernande<=
/ievera, et. al.>s stand against the validity of the DAC on the ground that the signature
of Demetrio therein was spurious.

;n this score, this Court "uotes with approval the decision of the Court of
Appeals, aptly citing the case of California us !ines, Inc. v. State Investment "ouse,
Inc. thus ?

here are two ways which could indicate, in fine, the presence of
novation and thereby produce the effect of e:tinguishing an obligation by
another which substitutes the same. he first is when novation has been
e:plicitly stated and declared in une"uivocal terms. he second is when
the old and the new obligations are incompatible on every point. he test
of incompatibility is whether the two obligations can stand together, each
one having its independent e:istence. #f they cannot, they are
incompatible, and the latter obligation novates the first. Corollarily,
changes that breed incompatibility must be essential in nature and not
merely accidental. he incompatibility must ta8e place in any of the
essential elements of the obligation such as its ob2ect, cause or principal
conditions thereof@ otherwise, the change would be merely modificatory
in nature and insufficient to e:tinguish the original obligation.
F.1.2. 3ee Compter Sy4tem4, $n5. v. #nline Net6or74 $nternational, $n5.
G.R. No. 171289, 2 Fe0rary 2!11, F$RS2 D$%$S$#N, &:eonardo+De Ca4tro, J.'
#ne who claims the benefit of an estoppel on the ground that he has been
misled by the representations of another must not have been misled through his own
want of reasonable care and circumspection. $ lac% of diligence by a party claiming
an estoppel is generally fatal. If the party conducts himself with careless indifference to
means of information reasonably at hand, or ignores highly suspicious circumstances,
he may not invo%e the doctrine of estoppel.
1etitioner F.A.. Aee Computer $ystems, #nc. is engaged in the business of
selling computer e"uipment and in the rendering of maintenance services for its sold
units. ;n the other hand, ;/(#/E is engaged in business of selling computer units,
parts, and software.
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#n its complaint, it was alleged that ;/(#/E sold computer printers to FA AEE
which was evidenced by invoice receipts containing a stipulation that an Binterest of
*-C per annum is to be charged on all accounts overdueD and Ban additional sum e"ual
to *+C of the amount will be charged by vendor for attorney>s fees plus cost of
collection in case of suit.D #t was also said that the president of FA AEE, 1resident
Frederic8 !uang, Er., made an offer to pay the amount which was originally in %$
dollars into 1hilippine legal tender which ;/(#/E accepted. After payments made in
3arch to 3ay )FF-, ;/(#/E decided to stop the application of interest in view of its
good relationship with FA AEE. FA AEE continued to pay@ however, a balance
remained according to ;/(#/E>s computations. Despite the repeated demands of
;/(#/E, FA AEE failed to pay the remaining balance without a valid reason.
FA AEE answered the complaint stating that they were never informed of
;/(#/E>s agreement to its offer of paying %$ dollars. #t also alleged that the invoice
receipts were unilaterally prepared by ;/(#/E. Furthermore, FA AEE stated that the
payments tendered were in 1hilippine peso, in accordance with the $tatement of
Account, and that these were accepted by ;/(#/E. hey said they already had paid
the total amount of the debt.
According to the testimony of !uang, he said that there was no agreement
between FA AEE and ;/(#/E for the payment in %$ dollars. here was neither an
agreement to a specific e:change rate.
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'hether or not ;/(#/E was estopped by the December $tatement of Account
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(etition D"N$"D.
#n ritish $merican Tobacco v. Camacho, the Court emphasi<ed the doctrine of
estoppel as follows&

he elements of estoppel are& first, the actor who usually must have
8nowledge, notice or suspicion of the true facts, communicates something
to another in a misleading way, either by words, conduct or
silence@ second, the other in fact relies, and relies reasonably or 2ustifiably,
upon that communication@ third, the other would be harmed materially if
the actor is later permitted to assert any claim inconsistent with his earlier
conduct@ and fourth, the actor 8nows, e:pects or foresees that the other
would act upon the information given or that a reasonable person in the
actorGs position would e:pect or foresee such action.

#n the instant case, we find that FA AEE cannot invo8e estoppel against
;/(#/E for the latter>s issuance of the $;A on December F, )FF,. he testimonial
evidence of both ;/(#/E and FA AEE establish that, during the meeting, the parties
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tried but failed to reach an agreement as regards the payment of FA AEE>s
outstanding obligation and the e:change rate to be applied thereto. 7y their act of
submitting their respective proposals and counter=proposals on the mode of payment
and the e:change rate, FA AEE and ;/(#/E demonstrated that it was not their
intention to be further bound by the $;A, especially with respect to the e:change rate to
be used. 3oreover, FA AEE only started ma8ing payments vis&'&vis the sub2ect
invoice receipts on 3arch ),, )FF-, or two months after the aforementioned meeting.

At this point, (i)ares v. Court of $ppeals is instructive in declaring that&

;ne who claims the benefit of an estoppel on the ground that he
has been misled by the representations of another must not have been
misled through his own want of reasonable care and circumspection. A
lac8 of diligence by a party claiming an estoppel is generally fatal. #f the
party conducts himself with careless indifference to means of information
reasonably at hand, or ignores highly suspicious circumstances, he may
not invo8e the doctrine of estoppel. Good faith is generally regarded as
re"uiring the e:ercise of reasonable diligence to learn the truth, and
accordingly estoppel is denied where the party claiming it was put on
in"uiry as to the truth and had available means for ascertaining it, at least
where actual fraud has not been practised on the party claiming
the estoppel.
$n4ran5e o- t;e (;ilippine $4land4 Corporation v. Spo4e4 %idal S. Gregorio and
Jlita Gregorio
G.R. No. 17/1!/, 1/ Fe0rary 2!11, S"C#ND D$%$S$#N, &(eralta, J.'
*ltimately, the question of laches is addressed to the sound discretion of the
court and, being an equitable doctrine, its application is controlled by equitable
considerations. It cannot be used to defeat )ustice or perpetrate fraud and in)ustice. It is
the better rule that courts, under the principle of equity, will not be guided or bound
strictly by the statute of limitations or the doctrine of laches when to be so, a manifest
wrong or in)ustice would result.
Respondent spouses 9idal $. Gregorio and Eulita Gregorio obtained loan from
petitioner #nsurance of the 1hilippine #slands Corporation. As a security, the spouses
e:ecuted a Real Estate 3ortgage of a parcel of land in Ri<al. Again, they obtained
another loan along with a security of another parcel of land in the same property in
Ri<al. For the third time, a loan was obtained and this time, two parcels of land was
e:ecuted as mortgage.
he Gregorio spouses failed to perform their obligation to pay. !ence, their
mortgaged properties were e:tra2udicially foreclosed. #n the e:tra2udicial foreclosure
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sale, #nsurance of the 1hilippine #slands was the highest bidder. he latter assumed
ownership because the Gregorio spouses were not able to redeem their properties.
hen the petitioner Corporation filed a Complaint against the spouses because
they found out while processing the documents for the application and confirmation of
its title over the foreclosed properties that the parcels of land were already registered
under the names of third persons and the ransfer Certificates of itle 5C6 were also
issued to them. hey alleged that the Gregorio spouses committed fraud in obtaining
loans from them by misrepresenting ownership over the foreclosed properties. ;n the
other hand, the spouses argue that petitionerGs cause of action and right of action are
already barred by prescription and laches.
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'hether or not the Court of Appeals erred in ruling that petitionerGs right to any
relief under the law has already prescribed or is barred by laches
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(etition GR1N2"D.
#nsurance of the 1hilippine #slands filed an action for damages on the ground of
fraud committed against it by the spouses. %nder the provisions of Article ))H. of the
Civil Code, actions upon an in2ury to the rights of the plaintiff or upon a "uasi=delict must
be instituted within four years from the time the cause of action accrued.
he Court finds no error in the ruling of the CA that #nsurance of the 1hilippine
#slandGs cause of action accrued at the time it discovered the alleged fraud committed by
the Gregorio spouses. #t is at this point that the four=year prescriptive period should be
counted. !owever, the Court does not agree with the CA in its ruling that the discovery
of the fraud should be rec8oned from the time of registration of the titles covering the
sub2ect properties.
/either may the principle of laches apply in the present case.
he essence of laches or Bstale demandsD is the failure or neglect for an
unreasonable and une:plained length of time to do that which, by e:ercising due
diligence, could or should have been done earlier, thus, giving rise to a presumption that
the party entitled to assert it either has abandoned or declined to assert it. #t is not
concerned with mere lapse of time@ the fact of delay, standing alone, being insufficient
to constitute laches.

#n addition, it is a rule of e"uity and applied not to penali<e neglect or sleeping on
oneGs rights, but rather to avoid recogni<ing a right when to do so would result in a
clearly unfair situation. here is no absolute rule as to what constitutes laches or
staleness of demand@ each case is to be determined according to its particular
circumstances. %ltimately, the "uestion of laches is addressed to the sound discretion
of the court and, being an e"uitable doctrine, its application is controlled by e"uitable
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considerations. #t cannot be used to defeat 2ustice or perpetrate fraud and in2ustice. #t is
the better rule that courts, under the principle of e"uity, will not be guided or bound
strictly by the statute of limitations or the doctrine of laches when to be so, a manifest
wrong or in2ustice would result.

#t is significant to point out at this 2uncture that the overriding consideration in the
instant case is that petitioner Corporation was deprived of the sub2ect properties which it
should have rightly owned were it not for the fraud committed by the Gregorio spouses.
!ence, it would be the height of in2ustice if the spouses would be allowed to go scot=free
simply because the petitioner Corporation relied in good faith on the formerGs false
representations.

Spo4e4 :igi <. Ganio and 1nna )ernande*+Ganio v. <a7ati S;angri+:a )otel
and Re4ort, $n5., a7a S;angri+:a )otel <anila
G.R. No. 19!.!1, 7 Fe0rary 2!11, S"C#ND D$%$S$#N, &Carpio+<orale4, J.'
The law, recogni+ing the obligatory force of contracts, will not permit a party to
be set free from liability for any %ind of misperformance of the contractual underta%ing
or a contravention of the tenor thereof. $ breach upon the contract confers upon the
in)ured party a valid cause for recovering that which may have been lost or suffered.
1etitioner spouses, (uigi 3. Guanio and Anna !ernande<=Guanio, boo8ed
respondent 3a8ati $hangri=(a !otel for their reception. !owever, during the wedding
itself and even during the initial food tasting they encountered bad service from the
employees of the hotel. Due to that, the Guanio spouses sent a letter=complaint to
3a8ati $hangri=(a wherein the latter responded with an apology. Despite that, the
Guanio spouses still filed a Complaint for breach of contract to the Regional rial Court
of 3a8ati City.
he Guanio spouses contends that the apology is an admission of the bad
service the hotel has rendered to them. ;n the other hand, 3a8ati $hangri=(a denies it
stating that their apology is a only standard followed by their employees to e:press
empathy in reference to the inconvenience e:perienced by their dissatisfied customers.
#$$%E&
'hether or not the apology made by 3a8ati $hagri=(a is considered an
admission of breach of contract
!E(D&
C1 De5i4ion (1R2$1::= R"%"RS"D.
'hat applies in the present case is Article )),I of the Civil Code which reads&
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Art. )),I. hose who in the performance of their obligations are guilty of fraud,
negligence or delay, and those who in any manner contravene the tenor thereof, are
liable for damages.
,C-I v. .erche+, et al. enlightens&
#n culpa contractual : : : the mere proof of the e:istence of the contract
and the failure of its compliance 2ustify, prima facie , a corresponding
right of relief. he law, recogni<ing the obligatory force of contracts, will
not permit a party to be set free from liability for any 8ind of
misperformance of the contractual underta8ing or a contravention of the
tenor thereof. A breach upon the contract confers upon the in2ured party
a valid cause for recovering that which may have been lost or
suffered. he remedy serves to preserve the interests of the promissee
that may include his >expe5tation intere4t ,> which is his interest in
having the benefit of his bargain by being put in as good a position as he
would have been in had the contract been performed, or his >relian5e
intere4t,> which is his interest in being reimbursed for loss caused by
reliance on the contract by being put in as good a position as he would
have been in had the contract not been made@ or his>re4tittion
intere4t,> which is his interest in having restored to him any benefit that
he has conferred on the other party. #ndeed, agreements can accomplish
little, either for their ma8ers or for society, unless they are made the
basis for action. he effect of every infraction is to create a new duty,
that is, to ma8e REC;31E/$E to the one who has been in2ured by the
failure of another to observe his contractual obligation unless he can
show e:tenuating circumstances, li8e proo- o- ;i4 exer5i4e o- de
diligen5e : : : or of the attendan5e o- -ortito4 event, to e:cuse him
from his ensuing liability. 5emphasis and underscoring in the original@
capitali<ation supplied6
he Court notes that 3a8ati $hangri=(a could have managed the 0situation0
better, it being held in high esteem in the hotel and service industry. Given its vast
e:perience, it is safe to presume that this is not its first encounter with boo8ed events
e:ceeding the guaranteed cover. #t is not audacious to e:pect that certain measures
have been placed in case this predicament crops up. hat regardless of these
measures, respondent still received complaints as in the present case, does not
amuse.
3a8ati $hangri=(a admitted that three hotel functions coincided with
petitionersG reception. o the Court, the delay in service might have been avoided or
minimi<ed if respondent e:ercised prescience in scheduling events. /o less than
"uality service should be delivered especially in events which possibility of repetition is
close to nil. 1etitioners are not e:pected to get married twice in their lifetimes.
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1nt;ony #rd?a, et al. v. "dardo J. Fente0ella, et al.
G.R. No. 17.9/1, 29 Jne 2!1!, F$RS2 D"C$S$#N, &%ela45o, Jr., J.'
The Statute of Frauds expressed in $rticle /012, par. 345, of the Civil
Code applies only to executory contracts, i.e., those where no performance has yet
been made.
-erceived inadequacy of price, on the other hand, is not a sufficient ground for
setting aside a sale freely entered into, save perhaps when the inadequacy is shoc%ing
to the conscience.
he sub2ect of this case is a residential lot located at Fairview $ubdivision,
7aguio City, which was firstly registered under Amando Gabriel, $r. Around )FF.,
Gabriel, $r. sold the sub2ect lot to Antonita ;rduJa but there was no e:ecuted formal
deed. he price of the lot was payable in installments and Gabriel, $r. accepted the set=
up. Antonita and her sons have long been residing in the lot since )F,F and even had a
house constructed therein. hey also paid real property ta:es and declared the lot for
ta: purposes.
After the death of Gabriel, $r., his son and one of the respondents Gabriel, Er.
continued to accept installment payments from Antonita. hen he wrote a letter to her
ordering her to fence off the lot and to construct a road on the ad2acent lot. !owever,
despite the payments made by Antonita, Gabriel, Er. sold the sub2ect lot to 7ernard
7anta without the 8nowledge of Antonita and the rest of petitioners. 7anta then sold the
sub2ect lot to 3arcos Cid and 7en2amin Cid. he Cids thereafter ceded the sub2ect lot to
Eduardo Fuentebilla, Er. Eduardo, through his lawyer, sent a letter to the residence of
Gabriel, Er. ordering those living therein to vacate the lot or else e2ectment would
commence.
'hen Antonita, et. al. went directly to Gabriel, Er.>s house after receiving the
letter, they were informed by the wife of Gabriel, Er., eresita Gabriel that she filed an
affidavit=complaint against her husband and the Cids for falsification of public
documents, because according to her, her signature was forged in the deed of sale
between Gabriel, Er. and 7anta. eresita accompanied Antonita to file a Complaint for
Annulment of $ale, itle, Reconveyance with Damages and along with this a prayer to
ac"uire ownership over the sub2ect lot upon payment of their remaining balance.
#$$%E$&
'hether or not the $tatute of Frauds is applicable to partially e:ecuted contracts
!E(D&
(etition GR1N2"D.
he $tatute of Frauds e:pressed in Article )HIK, par. 5*6, of the Civil
Code applies only to e:ecutory contracts, i.e., those where no performance has yet
been made. $tated a bit differently, the legal conse"uence of non=compliance with the
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$tatute does not come into play where the contract in "uestion is completed, e:ecuted,
or partially 5on4mmated.
he $tatute of Frauds, in conte:t, 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. !owever,
where the verbal contract of sale has been partially exe5ted t;rog; t;e partial
payment4 made by one party duly received by the vendor, as in the present case, the
contract is ta8en out of the scope of the $tatute.

(est it be overloo8ed, a contract that infringes the $tatute of Frauds is ratified by
the acceptance of benefits under the contract. Evidently, Gabriel, Er., as his father
earlier, had benefited from the partial payments made by the petitioners. hus, neither
Gabriel Er. nor the other respondentsLsuccessive purchasers of sub2ect lotsLcould
plausibly set up the $tatute of Frauds to thwart petitioners> efforts towards establishing
their lawful right over the sub2ect lot and removing any cloud in their title. As it were,
petitioners need only to pay the outstanding balance of the purchase price and that
would complete the e:ecution of the oral sale.
Jo4e <ar@e4 and <axilite 2e5;nologie4, $n5., v. Far "a4t Aan7 and 2r4t
Company, Far "a4t Aan7 $n4ran5e Aro7er4, $n5., and <a7ati $n4ran5e
CompanyBFar "a4t Aan7 and 2r4t Company and <a7ati $n4ran5e Company,
v. Jo4e <ar@e4 and <axilite 2e5;nologie4, $n5.,
G.R. No. 171879, 171/19, 1! Janary 2!11
Silence may support an estoppel whether the failure to spea% is intentional or
negligent.
3a:ilite echnologies, #nc. is engaged in the importation and trade of e"uipments
for energy=efficiency systems. ;n the other hand, Far East 7an8 and rust Co.
5FE7C6 is a local ban8 entrusted in the financing and re"uirements of 3a:ilite and
3a:ilite>s president Eose /. 3ar"ues.
Far East 7an8 #nsurance 7ro8ers, #nc. 5FE7#7#6 and 3a8ati #nsurance Company
are insurance companies which are subsidiaries of FE7C.
'hen 3a:ilite and 3ar"ues entered into a trust receipt transaction with FE7C
for the shipping of high=technology e"uipment from the %nited $tates, they put the
merchandise as collateral. hen around August )FFK, FE7#7# was advised by FE7C to
initiate and manage the procurement and processing from 3a8ati #nsurance Company
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of four separate and independent fire insurance policies over the sub2ect merchandise.
3a:ilite did their part by paying the premiums through debit arrangement and FE7C
would debit the paid amount evidenced by the statement of accounts sent to 3a:ilite.
;n ;ctober )FFH, the trust receipt account was completely settled.
hen on 3arch )FF+, 3a:ilite suffered losses amounting to at least 1 *.) million
when a fire destroyed their office in Cebu City. hey filed claims against the fire
insurance company with 3a8ati #nsurance Company. !owever, it denied the fire loss
claim putting up as a defense that they have not paid their premium. FE7C and
FE7#7# stated they have no responsibility for the denial of the claim.
#$$%E&
'hether or not there was an estoppel when 3a:ilite and 3ar"ues were led to
believe and they in fact believed that the settlement of 3a:iliteGs trust receipt account
included the payment of the insurance premium
!E(D&
(etition GR1N2"D.
#n estoppel, a party creating an appearance of fact, which is false, is bound by
that appearance as against another person who acted in good faith on it. Estoppel is
based on public policy, fair dealing, good faith and 2ustice. #ts purpose is to forbid one to
spea8 against his own act, representations, or commitments to the in2ury of one who
reasonably relied thereon. #t springs from e"uity, and is designed to aid the law in the
administration of 2ustice where without its aid in2ustice might result.
MEstoppel by silence> arises where a person, who by force of circumstances is
obliged to another to spea8, refrains from doing so and thereby induces the other to
believe in the e:istence of a state of facts in reliance on which he acts to his pre2udice.
$ilence may support an estoppel whether the failure to spea8 is intentional or negligent.
7oth trial and appellate courts basically agree that FE7C is estopped from
claiming that the insurance premium has been unpaid. hat FE7C induced 3a:ilite
and 3ar"ues to believe that the insurance premium has in fact been debited from
3a:ilite>s account is grounded on the the following facts& 5)6 FE7C represented and
committed to handle 3a:ilite>s financing and capital re"uirements, including the related
transactions such as the insurance of the trust receipted merchandise@ 5*6 prior to the
sub2ect #nsurance 1olicy /o. )I*HHKF, the premiums for the three separate fire
insurance policies had been paid through automatic debit arrangement@ 5K6 FE7#7# sent
FE7C, not 3a:ilite nor 3ar"ues, written reminders dated )F ;ctober )FFH, *H
Eanuary )FF+, and . 3arch )FF+ to debit 3a:ilite>s account, establishing FE7C>s
obligation to automatically debit 3a:ilite>s account for the premium amount@ 5H6 there
was no written demand from FE7C or 3a8ati #nsurance Company for 3a:ilite or
3ar"ues to pay the insurance premium@ 5+6 the sub2ect insurance policy was released to
3a:ilite on )F August )FFH@ and 5.6 the sub2ect insurance policy remained uncancelled
despite the alleged non=payment of the premium, ma8ing it appear that the insurance
policy remained in force and binding.
CIVIL LAW