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OBLICON April 6, 2018

Jurado Cases
1. De Jesus v Urutia & Co, 33 Phil 171 (Untalan)

● Diego Liñan, the son-in-law of the appellant, executed a mortgage to the defendant
company, appellee, on certain lands then belonging to the mortgagor to secure the payment
of the sum of P12,591.35
● The mortgage was not paid and judgment of foreclosure was obtained on July 5, 1911, the
principal, interest and costs amounting, on that date, to P14,224.53. The property was duly
sold pursuant to the judgment of foreclosure, there resulting a deficiency of P7,874.97, for
which the mortgagee was given a judgment.
● The appellant, claiming to be the owner of the lands levied on, presented to the sheriff, who
made the levy, a claim in pursuance of section 451 of the Code of Civil Procedure. The
appellee insisted on the sale of said lands and gave the bond required in that section. The
sheriff thereupon proceeded with the execution of the judgment and sold the land for the sum
of P4,700. This action was thereupon begun for the recovery of the land so sold.
● Trial Court Ruling – in favor of defendant
○ Diego Liñan, well knowing that the property mortgaged to G. Urrutia & Co. was insu
cient to pay the mortgage debt, and with the intention and for the purpose of
defrauding the said G. Urrutia & Co., showed himself to be insolvent by executing the
conveyances marked Exhibits A, B, C and D, which together appeared to be a sale of
the lands in question to his father-in-law, which, with the same fraudulent intent, he
caused to be registered in the registry of property of the Province of Ambos
○ The said conveyances were stimulated and ctitious and without any consideration
and pursuant to a conspiracy between Diego Liñan and his father-in-law to place said
lands beyond the reach of G. Urrutia & Co. and thereby defraud them by preventing
the collection of the debt which said company held against said Liñan

Whether or not the transfers made by Liñan to De Jesus were simulated

RULING – in favor of plaintiff
NO. The findings of the trial court were not supported by a preponderance of evidence. There was no
active fraud at by Liñan to the appellant at the time the mortgage was executed or when the land was
sold by Liñan to De Jesus.

While the conveyances by which the lands in controversy were transferred to the plaintiff were not
acknowledged before a notary public, they were in fact executed and delivered before the existence of
the mortgage. Moreover, it is clearly established by the evidence that, at the time the mortgage was
executed in favor of appellee, Liñan was the owner of a considerable number of parcels of land in
addition to those mortgaged; and that the mortgagor and the mortgagee mutually agreed on the lands
which should be encumbered; and that it was believed at the time by both parties to the instrument that
the lands so hypothecated would be sufficient on sale to cover the mortgage debt and interest.

Nor do we believe the evidence sufficient to sustain the finding that the conveyances which are the object
of this controversy were without consideration. During the trial, the appellant testified that, prior to the
sales in controversy, Liñan had borrowed of him a considerable sum of money, to pay which he

made the transfers referred to. This testimony was corroborated and supported by that of Rosario
de Jesus, another witness for the appellee, who testified that the transfers of the land in question
were made to the plaintiff to satisfy a preexisting obligation arising from money loaned. It thus
appears from appellee's own evidence that there was a valuable consideration for the sales in suit
and that, consequently, there was neither fraud nor intention to defraud.

The motives which impel one to a sale or purchase are not always the consideration of the
contract as that term is understood in law. One may purchase an article not because it is cheap, for in
fact it may be dear, but because he may have some particular use to which it may be put, because of a
particular quality which that article has, or the relation which it will bear to other articles with which it will
be associated. These circumstances may constitute the motive which induces the purchase, but
the real consideration of the purchase is the money which passed. Whatever may have been the
motive which impelled Liñan to transfer the properties in question to appellant, the consideration
of the sale was a debt due and owing from him to the former. With one's motives the law cannot
deal in actions of this character; while with the consideration the law is always concerned.

The judgment appealed from is reversed and the cause remanded to the court whence it came with
instructions to enter a judgment declaring appellant to be the owner of the lands in question and annulling
the levy made thereon under the deficiency judgment. Without costs in this instance. So ordered.

1. Enriguez de Cavada v Diaz, 37 Phil 982 (Bercasio)

Parties entered into a “contract of option” which involves a hacienda at Pitogo consisting of 100 and odd
hectares, owned by respondent. The said contract stipulated how the price of the property will be paid; for
which the petitioner herein may pay him either the sum of thirty thousand pesos (P30,000), Philippine
currency, in cash, or within the period of six (6) years, beginning with the date of the purchase, the sum of
forty thousand pesos (P40,000), Philippine currency, at six per cent interest per annum.

After the execution of the contract, defendant filed a petition with the Court of Land Registration in order
to obtain the registration of a part of the hacienda, which was granted.

Later, and pretending to comply with the terms of said contract, the defendant offered to transfer to the
plaintiff one of said parcels only, which was a part of said "hacienda." The plaintiff refused to accept said
certificate for a part only of said "hacienda" upon the ground (a) that it was only a part of the "Hacienda de
Pitogo," and (b) under the contract (Exhibits A and B) he was entitled to a transfer to him all said

The theory of the defendant is that the contract of sale of said "Hacienda de Pitogo" included only 100
hectares, more or less, of said "hacienda," and that by offering to convey to the plaintiff a portion of said
"hacienda" composed of "100 hectares, more or less," he thereby complied with the terms of the contract.

Lower Court ruled in favor of Petitioner.

Whether or not the defendant was obliged to convey to the plaintiff all of said "hacienda."


may be a good consideration (causa) for a promise made by another party. Civil Code. value of the logs exported.On May 25. 11 SCRA 733 (Layug) Topic: Cause in Onerous Contracts.The parties immediately began implementing the provisions of the contract by having the Distributor (Gen. Inc. at any time within the agreed period. General Enterprises Inc v Lianga Bay Co. . for which he had paid a consideration. Inc. for example. the Lianga Bay Logging Company. 1274. a corporation duly organized under the laws of the Philippines." An optional contract is a privilege existing in one person.A promise made by one party. and General Enterprises. Enterprises) deliver to the Producer (Lianga Bay) the tractor it agreed to deliver and by having the Producer deliver logs to the Distributor for export as agreed upon. under the conditions named. from another person. if made in accordance with the forms required by the law. A contract of option is a contract by virtue of the terms of which the parties thereto promise and obligate themselves to enter into contract at a future time.. another corporation. in fact. entered into a contract. p 468 FACTS . 1959.b. Inc. The defendant promised to convey to the plaintiff the land in question as soon as the same was registered under the Torrens system.o.) In other words. . and the plaintiff promised to pay to the defendant the sum of P70. The contract was not. which gives him the right to buy. Surigao. if he chooses. an "optional contract" as that phrase is generally used. what is generally known as a "contract of option. 1. a producer of logs from a timber concession at Lianga.000. (Art. in fact. . as Distributor. the consideration (causa) need not pass from one to the other at the time the contract is entered into.In the agreement. Lianga Bay Logging Company. . Reading the said contract from its four corners it is clearly as absolute promise to sell a definite parcel of land for a fixed price upon definite conditions. upon the happening of certain events. certain merchandise of certain specified property. The contract of option is a separate and distinct contract from the contract which the parties may enter into upon the consummation of the option. upon the happening of that event.Liangga Bay Logging Company. at a fixed price. was named as Producer and the General Enterprises. or the fulfillment of certain conditions. The said contract (Exhibits A and B) was not. Inc. designated General Enterprises as distributor of a portion of its log production to Korea and Europe on condition that it would pay the distributor a commission of 13% of the gross f.

A perusal of the agreement . the Producer sent a notice to the Distributor stating that after the November shipment there will no longer be logs available for export to Korea and Europe "unless the price of such logs become comparable to what we may expect to receive in the way of returns from lumber and veneer of barterable and export grades" NOTE: reasons: the needed additional logging machinery which they had agreed to buy had been sold to another purchaser under rather peculiar circumstances and they have decided that we must take advantage of the situation and use their lumber for barter offered by a U. Freider.00 by way of loan to enable it to purchase the needed logging equipment. (NOTE: Basis of the alleged fraud and misrepresentation is the claim that Mr. but the Producer did not heed this reminder causing the Distributor to initiate the present action before the Court of First Instance of Rizal alleging breach of contract and praying for damages both actual and compensatory.00 for the purchase of logging equipment.We also find untenable the claim that the agreement has no cause or consideration considering that the same imposes reciprocal obligations.000.. ISSUE: W/N agreement (Annex A) in the contract is valid? RULING: YES . led Lianga Bay to believe that he could secure for said Lianga Bay a certain Surigao logging equipment on which General Enterprises had a second mortgage and that he would place at the disposal of Lianga Bay at any time the sum of P95. Freider stated in his testimony that the Distributor could take steps to secure the Surigao logging equipment for the use of Lianga Bay no assurance was given that such equipment would be acquired as a necessary incident of their contract.The court ruled that the claim of fraud has no basis. . 1959. .On October 27.Neither can the court attribute fraud to General Enterprises’ failure to grant Lianga Bay the loan of P95. whereupon the Distributor reminded the Producer (Gen Enterprises) that it had a contract to fulfill relative to its log production as otherwise it would be held responsible for the consequences of the breach that may ensue.Lianga Bay claims that the agreement Annex A on which the complaint is based is null and void on the ground that it has no cause or consideration or that it was secured thru fraud or misrepresentation.000. president of General Enterprises. .RTC rendered decision in favor of the plaintiff and against the defendant.The Producer (Lianga Bay) thereafter stopped supplying logs for export. . for while Mr.S Firm which net result will be that they will not have logs for the sales area of the distributor. when General Enterprises knew well that it did not have such money nor could secure the Surigao logging equipment) . for the evidence shows that Lianga Bay did not make any demand for it.This is an appeal from said decision.

no weight can be given to the claim that because it was not explicitly expressed in the agreement that Gen Enterprises has the corresponding obligation to sell and export the additional 2.The contention that the essential reason which induced Lianga Bay to enter into the contract is the promise of General Enterprises to secure for it the Surigao logging equipment and to make available the loan of P95. Fisher v Robb.000 board feet beginning September.would show that Lianga Bay designated General Enterprises as its distributor to export logs to Korea and Europe at the best market price obtainable on condition that it would pay General Enterprises a commission of 13% of the gross value of the logs. direct and proximate reason which justifies the creation of an obligation thru the will of the contracting parties. 1959 (paragraph 9) . the cause is the immediate. National Bank v Maza. 48 Phil 207 (Hung) 1. for such could clearly be inferred from a mere perusal of the whole paragraph 5 of the agreement. and it should not be forgotten that the term of the agreement is two years beginning June 1. A contrary interpretation would be irrational and absurd. 1.000.It is explicit therein that General Enterprises bound itself to export abroad whatever may be produced in the form of logs by Lianga Bay during the first months of the agreement. Such being the case. as well as those that may be produced thereafter. it is clear that for Lianga Bay the cause of the agreement is the distribution of its logs in the areas agreed upon which General Enterprises undertook to accomplish. Perez & Co. that portion of the agreement has no consideration. there is no point for Lianga Bay to agree to make available additional 2. whereas for General Enterprises the cause is its commitment to sell or export the logs for onerous consideration. Villaroel v Estrada. In other words. 71 Phil 14 (Digested) 1. 1959 if General Enterprises should not be given the corresponding commitment to export under the same terms agreed upon in connection with previous production. Perez and Co .Finally. .Indeed.000 board feet Lianga Bay agreed to make available for export beginning September. .000. . v Flores. 69 Phil 101 (Digested) 1. 1959. The cause of a contract is the essential reason which moves the contracting parties to enter into it. 40 Phil 921 (Baclao) FACTS: Buyer: Chua Teng Chong Seller: Ocejo.00 likewise has no merit.000. Ocejo.

Petitioners filed a complaint.000 piculs mentioned in the contract. asserts a preferential right proceeds of its sale. leaving it entirely subject to his control. Ocejo. by virtue of which it passed into the possession and control of Chua Teng Chong. Chua Teng Chong gave a promissory note to International Banking Corporation in exchange for Php 20k. 1914. which the latter refused. but the buyer refused to make payment. Muelle de la Industria. Muelle de la Industria. Article 1462 of the . alleging that the bank was unlawfully holding the property of the plaintiff firm. and further that until such payment was in fact made. Chua Seco. upon the ground that the delivery of the sugar by plaintiff. Chua Teng Chong said that the rest of the sugar was in a warehouse at No.200 piculs which they immediately seized. The lower court rendered judgment in favor of Ocejo. did his failure to pay the purchase price authorize the seller to rescind the sale? Yes (c) Was the commencement of a replevin suit by the seller equivalent to the rescission of the sale? No Seller argues: Despite the fact that no term was stipulated within which the payment should be made. indicates that the sugar is the property of the insolvent estate represented by him. The sugar was delivered to the buyer on April 16. located in a warehouse in Calle Toneleros. The seller delivered it into the buyer's warehouse. the bank made the effort to exercise active ownership over the sugar (Coincidentally. the assignee of now insolvent Chua Teng Chong. ISSUES/DECISION: (a) Did title to the sugar pass to the buyer upon its delivery to him? Yes (b) Assuming that the title passed to the buyer. It seems that at the end of March. The sugar was brought to Manila in the month of April. Perez & Co and from this decision appeals have been taken by the bank and by the intervener. it discovered that the amount of sugar in his warehouse was less than the 5. the sugar was sold and the proceeds of the sale deposited in the bank. he was entitled to demand payment at any time after delivery. title to the sugar did not pass to the buyer. was put up as security for the note. Ocejo demand the bank to return the sugar. with the bank as defendant. and 5. When the promissory note executed had fallen due and was unpaid. 119. The bank’s representatives then went to this warehouse and upon arrival there found some 3. petitioners attempted to collect the purchase price of the sugar. subject to the order of the court upon the final disposition.On March. In the written contract between them. nothing was said concerning the time and place for payment. on the same day it was delivered to Chua Teng Chong by March. entered into contract with Chua Teng Chong for the sale of some sugar. 119. HELD a) The obligation of the seller to make delivery of the thing sold was not subject to the condition that the buyer was to pay the price before delivery. 1914. Perez and Co). closing the warehouse with the bank's padlocks. Ocejo. 5000 piculs of sugar. By agreement of the parties.000 piculs were delivered by to Chua Teng Chong whereupon it was stored in the a warehouse at No. The next day. Perez and Co.

. The same article provides that "the court shall decree the rescission demanded. the pledge asserted by the International Bank is inefficacious. the principal and most important of which being the conveyance of the ownership by means of the delivery of the thing old to the purchaser. signifies that title has passed from the seller to the buyer. tradition is a true mode of acquiring ownership "which effects the passage of title and the birth of the right in rem." . Even if an attempt was made to pledge the sugar when it was delivered. In the contract of the sale the obligation to pay the price is correlative to the obligation to deliver the thing sold. But he does become entitled to payment upon demand made upon the buyer. . Therefore. Although the right to rescind a sale. while delivery or tradition is the method of accomplishing the same. In Gonzalez vs." Therefore. The mere will of the plaintiff will not produce the rescission of the sale. the delivery of the thing . When no term for payment is stipulated. Rojas: . the effect of the delivery was to transmit the title of the sugar to the buyer. is established by article 1506 and 1124 and such right so conferred is not an absolute one. however short and indeterminate it may be. Contracts only constitute titles or rights to the transfer or acquisition of ownership. the latter immediately produced its natural effects in law.” According to Manresa. after its delivery to the buyer. the title and the method of acquiring it being different in our law. the sugar pledged is not the same as that here in dispute. The pledge was for the sugar in the Calle Toneleros warehouse. But if delivery is consummated." The Transaction is not a like a cash sale in which delivery and payment are to be made simultaneously. and waives his right to insist upon payment in advance or simultaneously with delivery. nor can it be. it would be void as against third persons since it was not recorded in a public instrument. The fact that the price of the property has not yet been paid in full is not. . because as such a condition was not stipulated in the contract. he in fact grants a term of credit to the buyer. to the right of the vendor to claim payment of any sum still due. alleging that the sugar was pledged to it. The bank argues this principle. b-c) Article 1124 of the Civil Code states that reciprocal obligations are rescindable when one of the parties bound should fail to perform that which is incumbent upon him. However.Civil Code provides that the thing sold is deemed to be delivered "when it passes into the possession and control of the buyer. The sugar in question could not be possibly have been the subject matter of the contract of pledge which was formed in March as it was not the property of the defendant at the time. But the right to rescind the sale for nonperformance on the part of the buyer is not absolute. Therefore. unless there are causes which justify him in allowing a term. of the course. not the one in Muelle de la Industria. the seller is not bound to deliver the thing sold until the buyer has paid the price. an obstacle to the acquisition of the ownership thereof by the plaintiff. . ownership of things is not transferred by mere contract but by delivery. the law subordinates it to the rights of third persons in good faith. without prejudice. Nonperformance by one of the parties authorizes the other to exercise the right to demand the performance of the obligation or its rescission.

such as when the purpose of the grantor is to defraud his creditors and prevent the attachment of his property. it shall shall not produce any effect. Gerardo Garcia who stated that in a conversation between himself and the present plaintiff soon after the service of the complaint. Puato v Mendoza. conceived and executed for the purpose of placing the trucks in question beyond the reach of the creditors of Tienzo. Note: Writ of Replevin . Tienzo procured a permit from the Insular Collector for the withdrawal of 12. For Tienzo’s non-compliance. Said bill of lading.issued to recover an item of personal property wrongfully taken ISSUE: Whether petitioner de Belen is the rightful owner of the trucks levied by the sheriff. was never produced by Tienzo or his principal. Note: Bill of Lading . however. The document referred to (Exhibit A) was evidently a fictitious transfer. FACTS: Timoteo Tienzo is a customs broker in the City of Manila who is also operating a number of trucks for the purpose of conveying merchandise arriving at the port of Manila to various consignees. to recover judgment for the value thereof in the amount of P47. the latter said that Tienzo was owner of the trucks and that he (Belen) was merely an instrument of Tienzo. the Sheriff levied seven trucks owned and operated by Tienzo. 64 Phil 457 (Untalan) . Therefore. After the sheriff had taken the trucks into custody.32. Of Customs. the plaintiff in this case. Leopoldo de Belen. and he held said instrument to be completely without effect.a detailed list of a shipment of goods in the form of a receipt given by the carrier to the person consigning the goods. The bill of lading for said flour was not produced by Tienzo at the time he procured the delivery permit. 1. De Belen v Collector. with the result that the collector of customs caused an action of replevin to be begun in the name of the Government to recover the flour which had been delivered as aforesaid. a brother- in-law of Tienzo. This admission of the plaintiff. and in order to get possession of the flour he obligated himself to have the bill of lading “to follow” in due time. said transfer of ownership to petitioner produces no effect. made claim to the trucks. The sheriff ignored the claim of Belen to the ownership of the trucks.000. 1. HELD: No. establish a strong presumption that the transfer referred to was made for the purpose of placing the trucks beyond the reach of legal process directed against Tienzo. then a merchant in the City of Manila.816. Chua Soco. 46 Phil 241 (Montenegro) DOCTRINE: Where the transfer of properties is simulated without any cause. this present action of replevin instituted by Belen against the Collector of Customs and the sheriff for the recovery of the trucks and compensation for the unlawful detention of the same. relying on a document of transfer (Exhibit A) which states that Tienzo purports to convey to Belen all of the trucks involved in this controversy. said to have been advanced upon previous occasions to Tienzo by Belen as payments for the said trucks. thus. The court finds sufficient the testimony of a witness.500 sacks of flour from one of the piers for delivery to one Chua Soco. in connection with the relation of the parties and the financial difficulties then impending over Tienzo. or in case the flour itself could not be secured. The consideration stated in this instrument is the sum of P25.

that said defendant told the plaintiff that as he had not yet seen the land he could not place tenants thereon until the following year. when the plaintiff was in possession of the land.000 that induced the plaintiff to sell his land to the defendants and in the transfer of the title of . receiving as rental a total of 400 cavans.000.700 to date. and in the deed. it would only be considered as fourth class rice land.500 forming a part of the P39. proposing to purchase it. that said defendant Filomeno Mendoza agreed and the corresponding deed was executed. the unpaid balance of the selling price of P39. after deducting the sum of P1. ● Plaintiff’s contention: ○ When the defendants mortgaged said land to him. palay was quoted at P4 a cavan.500 paid upon the execution of the deed of sale in question. ● Trial Court Ruling – in favor of the plaintiff ISSUE Whether or not the deeds of sale should be declared null and void for lack of cause or consideration. RULING – in favor of plaintiff NO. ● Defendant’s contention: ○ The plaintiff called at their house offering to sell them his said land but the defendant Filomeno Mendoza told him that he had no money. it is stated that said land is mortgaged to secure payment of the sum of P37. that after the land shall have been cleaned. 1932. that they did not visit the land before buying it because they had no time and because they relied on what the plaintiff had told them. that the land is partly clean and partly uncultivated and produces from 50 to 55 cavans a hectare. palay was quoted at P1. that on the 28th of said month and year. an agent of the plaintiff took said defendant to the barrio of Maquibang.000. Bulacan. Baliwag. about the month of November.000 for which said land was sold to the defendants by the plaintiff. and when he filed his complaint for foreclosure of mortgage. which consists in the stipulated price of P39. that of said sum of P37. the defendant delivering to the plaintiff the sum of P1. The deed of sale states that the land referred to therein is sold and conveyed in consideration of the sum of P39. he never saw it and he leased it by parcels to several persons.000.500. that it was the defendants who approached him. making a cash payment of only P1. that from the year 1926 to 1928.500 which he had with him.500 and the balance of P37.50 a cavan. that he became acquainted with the defendants only when they voluntarily went to his house to see him. The failure of the defendants to fully pay for the land purchased by them from the plaintiff does not constitute lack of cause or consideration.500 the defendants have paid only P12.PARTIES Plaintiff-appellee: GUILLERMO PUATO Y CONSTANTINO defendant-appellants: FILOMENO MENDOZA and VALENTIN DAVID FACTS ● The land described in the complaint has been legally mortgaged to the plaintiff as property of the defendants to answer for the sum of P37.500 in four annual installments. ● The defendants decided to purchase the land because the plaintiff told them that it was good and promised to help them by not pressing them for payment of the installments and by not attaching the land. where the plaintiff again offered to sell him his said land for the sum of P39.

is perfectly valid. In stating that the land is good. who also wished to purchase the land.75 that is why he assumed Perez’ obligation to Ramirez.25 as a consequence of the indorsement in Azarraga’s favor.25 on May 15. Meyer & Co v Davis. FACTS: ● Anastacio Cuizon secured from petitioner Miguel Mulet a loan of P200 at 30 percent interest per annum and to that effect signed a receipt for P260. Bhen. Rodriguez did not pay Azarraga. with the costs to the appellants. Azurraga decided to file a complaint against Rodriguez. testified that if the entire land were cleaned and made arable. This was in payment of Fray Lesmes Perez’ debt to Ramirez. Azarraga wrote a letter to Rodriguez requesting payment of P400. the sale is void because of the illegality of the cause or consideration. 1. it would be second class. 37 Phil 431 (Bercasio) 1. 9 Phil 637 (Lipana) FACTS: · Jose Rodriguez executed in favor of Regino Ramirez a document whereby he bound himself to pay Ramirez the amount of P400. . the document was endorsed by Ramirez in favor of Azarraga as payment of debt. Wherefore. it must be presumed that one exists and that it is a lawful one. CFI ruled that Rodriguez is liable for the amount. unless the debtor should prove the contrary. One of the witnesses for the defendants. made by Ramirez. 73 Phil 63 (Montenegro) DOCTRINE: Where the cause or consideration for the sale of a property is no other than the accumulated usurious interests which the vendor-debtor has not yet paid. and notwithstanding the fact that the cause or consideration for the transfer is not stated in the indorsement. The assignment or transfer of the credit in question. Azarraga v Rodriguez. Mulet v People. and instead asked for several extensions. the creditor. ISSUES: WON the assignment or transfer of credit is valid even if the cause or consideration is not stated in the contract? Held: Yes. contrary to the defendants’ contentions. it is affirmed in toto. So ordered. 1. · Rodriguez owed Perez P1. Neither was there deceit in obtaining the consent of the defendant in the contract. 1899. which he has not done in this case.ownership thereof that induced said defendants to part with their money. · Subsequently. · Thus.983. it not being essential for its existence that full payment be made at the time of the execution of the contract. there being no error in the appealed judgment. · Despite several requests for payment. · Rodriguez wrote a letter acknowledging his indebtedness and obligation and engaging to pay the same. the plaintiff undoubtedly based his opinion upon the rental he received and the production per hectare his previous tenants gave him.

Petitioner. 1936.) The offended party may recover from appellant whatever he has given. conveyed the same to one Ricardo D. or P240 for two years. Ricardo D. but having paid. instead of paying to the offended party the sum of P589. 1936. and on July 3. Arroyo v Berwin. the consideration sustaining the last deed of sale could be no other than the accumulated usurious interests. ● For failure of Cuizon to pay the interest at the maturity of this new obligation. petitioner made Cuizon sign a deed of sale.630. plaintiff-appellant ALFRED BERWIN. wherein he obligated himself to resell the properties to Anastacio Cuizon within five years for the sum of P580. adding thereto the value of repairs and other expenses which Omega might have made thereon. in default thereof. ● Shortly before September. at Cuizon’s remonstrance. at its maturity on September 26. the sum of P105 on account of interest. Cuizon was charged again 50 per cent per annum. to pay the sum of P1. 1275. with pacto de retro. Omega for P580. respectively. At the maturity of this renewed obligation on September 26. this time reciting a consideration of P480.500 and P130. that the obligation has been renewed from year to year with the usurious interests on the original loan capitalized accordingly. Civil Code. ● For Cuizon’s failure to pay upon maturity. representing the original amount of P390 and the unpaid interest of P90. with interest thereon. Omega is therefore. including the fruits or interests thereof. leaving a balance of P70 on the interest. Cuizon paid the interest of P130. and.appellee. of which Cuizon paid P170. ● This amount represented the sum of P260 and one year’s interest thereon at 50 per cent. of the latter’s house and lot assessed at P1. defendant. or P195. Considering that Cuizon had already paid P405 on petitioner’s original loan to him of P200. 1931. 1934. petitioner was convicted in the trial court and the decision was affirmed by the Court of Appeals. a new deed of sale of the same properties was executed. or. with legal interest thereon from the date of the complaint. A reserved right to institute a separate civil action for the recovery of the properties from Ricardo D. ● Prosecuted on November 18. which is the assessed value of the house and lot aforementioned. and another deed was again executed reciting the same consideration of P390. ISSUE: Whether the petitioner extended a usurious loan to Cuizon which constitute an unlawful cause to the contract. defendant took the instant appeal. reduced the interest on the new amount of P480 to 25 per cent. Omega executed in favor of Anastacio Cuizon another deed. unnecessary and the Court of Appeals should have ordered the accused to return to the offended party the house and lot described in the documents Exhibits H and I. petitioner finally consolidated in himself the ownership of the lot and house. with the sum of P260 as the apparent consideration thereon. with the right of repurchase for two years. 1932. ● On this amount. (Art. or the value thereof of P1. 36 Phil 386 (Untalan) PARTIES IGNACIO ARROYO. ● Upon Cuizon’s failure again to pay the sum of P260 one year thereafter. as such is illicit and renders the contract null and void. . for the violation of the Usury Law. this time reciting the sum of P390 as its consideration. however. was executed.630. or P130. A motion for reconsideration of the affirmatory judgment having been denied. is hereby ordered to return to him the house and lot described in Exhibits H and I within thirty (30) days from notice of this judgment. ● On the same date. 1. HELD: YES. another document of sale. ● Another deed of pacto de retro sale was thereupon executed reciting now a consideration of P550 which represents the amount of P480 and the unpaid interest of P70. appellant.

and that all criminal proceedings should be instituted and maintained in the form and manner prescribed by law. Marcela Juaneza. 28 Phil 571 (Lipana) FACTS: . for a pecuniary or other valuable consideration. municipality of Iloilo.FACTS ● That the defendant. and stipulated with the plaintiff the following: ○ That his client Marcela Juaneza would recognize the plaintiff's ownership in the land situated on Calle San Juan. Mactal v Melegrito. that said cause was decided by the said justice of the peace against the accused. and that the defendant's client. and the latter appealed to the Court of First Instance of Iloilo. be affirmed. So ordered. 1. ● The defendant requested the plaintiff to agree to dismiss the said criminal proceeding. The order entered in the court below should. ● Trial Court Ruling – in favor of defendant ○ Cause of the agreement is illegal ISSUE Whether or not the cause of the agreement between the parties is illegal RULING – in favor of defendant YES. with the costs of this instance against the appellant. Province of Iloilo. Gutierrez Hnos v Orense. now prays the court to render judgment ordering the defendant to comply with the agreement by causing the latter’s said client to sign the document. having done his part in the agreement with the defendant. represented Marcela Juaneza in the justice of the peace court of Iloilo in proceeding for theft prosecuted by the plaintiff Ignacio Arroyo. provided that the plaintiff would ask the prosecuting attorney to dismiss the said proceedings led against Marcela Juaneza and Alejandro Castro for the crime of theft ● The plaintiff. In the interest of the public it is if the utmost importance that criminals should be prosecuted. and to permit an offender to escape the penalties prescribed by law by the purchase of immunity from private individuals would result in a manifest perversion of justice. as procurador judicial. 111 Phil 363 (Hung) 1. would not oppose the application for registration to be led by the said applicant. An agreement by the owner of stolen goods to stifle the prosecution of the person charged with the theft. suburb of Molo. where his said client ordered the cane cut. which land and which cut cane are referred to in the cause for theft above-mentioned ○ That the plaintiff should obtain a Torrens title to the said land during the next term of the court for the trial of cadastral cases. is manifestly contrary to public policy and the due administration of justice. therefore.

Gutierrez asked Orense to deliver the property to the company and to pay rentals for the use of the property. respondents FACTS . the court acquitted Duran for charge of Estafa. 1. Dauden-Hernaez v De los Angeles. with Orense’s knowledge and consent.Engracio Orense had been the owner of a parcel of land in Guinobatan. Peyer v Peyer. Gutierrez Hermanos then charged Duran with Estafa. 1913 Gutierrez Hermanos then filed a complaint in the CFI Albay against Engracio Orense. AND RAMON VALENZUELA. Because of this. He claimed that the sale was void because it was done without his authority and that he did not authorize his nephew to enter into such contract.”. On February 14. Judge of the Court of First Instance of Quezon City. Held: Yes. WALFRIDO DELOS ANGELES. 77 Phil 366 (Baclao) 1. virtually confirms and ratifies the sale of his property effected by his nephew. (Civil Code. who acted within the scope of his authority. After the lapse of four years. Orense refused to do so. a nephew of Orense. and. arts. The said public instrument contained a provision giving Duran the right to repurchase it for the same price within a period of four years from the date of the said instrument. pursuant to article 1313 of the Civil Code. petitioner HON. who accepted it in the same way by selling the said property. unless it should be ratified by the person in whose name it was executed before being revoked by the other contracting party. sold the property for P1. power of agency upon his nephew Duran. Duran. executed before a notary a public instrument. for having represented himself in the said deed of sale to be the absolute owner of the land. 1710 and 1727) Article 1259 of the Civil Code prescribes: "No one can contract in the name of another without being authorized by him or without his legal representation according to law. Orense continued occupying the land by virtue of a contract of lease. It having been proven at the trial that he gave his consent to the said sale. 2 Phil 261 (Layug) 1. HOLLYWOOD FAR EAST PRODUCTIONS. Issue: Whether or not Orense is bound by Duran’s act of selling plaintiff’s property.. 1709. while testifying as a witness at the trial of Duran for Estafa.The sworn statement made by the defendant. Orense was presented as witness of the defense. During trial.500 to Gutierrez Hermanos. Albay. it follows that the defendant conferred verbal. Thunga Chui v Que Bentec. On Mar 5. A contract executed in the name of another by one who has neither his authorization nor legal representation shall be void. Jose Duran. INC. or at least implied. remedies all defects which the contract may have contained from the moment of its execution. 27 SCRA 1276 (Untalan) PARTIES MARLENE DAUDEN-HERNAEZ. 1907. Orense. The principal must therefore fulfill all the obligations contracted by the agent.

The contract sued upon by petitioner herein (compensation for services) does not come under either exception. whether they be oral or written. and to recover damages. to wit: a) Contracts for which the law itself requires that they be in some particular form (writing) in order to make them valid and enforceable (the so-called solemn contracts)." But Article 1358 nowhere provides that the absence of written form in this case will make the agreement invalid or unenforceable. ● Trial Court Ruling – in favor of defendant ○ Claim of plaintiff was not evidenced by any written document..700. because the amount involved exceeds five hundred pesos. Ramon Valenzuela. once the contract has been perfected. last clause.00 representing a balance allegedly due said petitioner for her services as leading actress in two motion pictures produced by the company.” b) Contracts that the law requires to be proved by some writing (memorandum) of its terms. as it does in Article 1358. In general. Article 1356 of the Code establishes only two exceptions. providing that "all other contracts where the amount involved exceeds five hundred pesos must appear in writing. and its President and General Manager. and that the second motion for reconsideration did not interrupt the period for appeal. On the contrary. ARTICLE 1357 If the law requires a document or other special form. that by Article 1358 the writing was absolute and indispensable. It is true that it appears included in Article 1358. the contracting parties may compel each other to observe that form. these contracts are exceptional in requiring a writing embodying the terms thereof for their enforceability by action in court. Article 1357 clearly indicates that contracts covered by Article 1358 are binding and enforceable by action or suit despite the absence of writing. ● Petitioner Marlene Dauden Hernaez. Their existence not being provable by mere oral testimony (unless wholly or partly executed). contracts are valid and binding from their perfection regardless or form. The basic error in the lower court's decision lies in overlooking that in our contractual system it is not enough that the law should require that the contract be in writing. even a private one. had filed a complaint against herein private respondents. Of these typical example is the donation of immovable property that the law (Article 749) requires to be embodied in a public instrument in order "that the donation may be valid. as in the acts and contracts enumerated in the following article. ISSUE Whether or not the contract should have been in writing for it to be valid RULING – in favor of petitioner NO. Hollywood Far East Productions. because it was not served on three days' notice. a motion picture actress. This right may be exercised simultaneously with the action upon the contract. to recover P14. ● Defense: the contract sued upon was not alleged to be in writing. as in those covered by the old Statute of Frauds. . now Article 1403(2) of the Civil Code. either public or private" and the complaint "was defective on its face" for violating Articles 1356 and 1358 of the Civil Code of the Philippines. Inc.

the object sought is the correction of an alleged mistake in a deed of sale covering a piece of land.. defendants executed in favor of plaintiff a deed of sale covering a parcel of land therein described. 97 Phil 609 (Layug) FACTS . therefore. 6579 in the Office of the Register of Deeds of Oriental Mindoro" .Both appellant and appellees apparently regard the present action as one for the reformation of an instrument under Chapter 4. There being nothing in the pleadings to show that the error was discovered more than ten years before the present action was filed on May 20. the lower court dismissed the case on the ground that plaintiff's action had already prescribed.On May 20. 1. defendants have refused to do so. while.That despite persistent demand from plaintiff to have the error corrected. nor under the Spanish Mortgage Law) when in truth and in fact said land is a portion of a big mass of land registered under Original Certificate of Title No. NO
 . The action. alleging that: On November 12.
 . prayed for judgment ordering defendants to make the aforesaid correction in the deed of sale. Inc.The law must further prescribe that without the writing the contract is not valid or not enforceable by action. the order dismissing the complaint is set aside.That the said land "was erroneously designated by the parties in the deed of sale as an unregistered land (not registered under Act 496. Title II. on the other hand. there is allegation that the error was discovered "only recently". WON the action for reformation of instruments has already prescribed 2. it should prescribe in ten years counted from the day it could have been instituted. From this order plaintiff has appealed directly to the SC ISSUES 1. 1938. Costs to be solidarily paid by private respondents Hollywood Far Fast Productions. 1952. . and Ramon Valenzuela. Obviously. . Book IV of the new Civil Code. WHEREFORE. Garcia v Bisaya. 1952. Specifically. being upon a written contract. and the case is ordered remanded to the court of origin for further proceedings not at variance with this decision. plaintiff filed a complaint against the defendants in the Court of First Instance of Oriental Mindoro.Defendants denied having executed the alleged deed of sale and pleaded prescription as a defense
 - Without trial on the merits and merely upon motion. we think the action should not have been dismissed as having already prescribed before the factual basis for prescription had been established and clarified by evidence. WON the action for reformation of instruments may prosper HELD 1. Plaintiff. appellant could not have instituted his action to correct an error in a deed until that error was discovered.

Appellant's complaint states no cause of action. nor shall it have a total gross floor area of more than five (5) times the lot area. Such allegation is essential since the object sought in an action for reformation is to make an instrument conform to the real agreement or intention of the parties. now respondent. 1988. and c) Any breach of the stipulations and restrictions entitles AYALA to rescission of the contract. 
 Disposition Order of dismissal is affirmed not because of prescription but because of failure to state the cause of action 1. 294 SCRA 48 (Lipana) FACTS: Petitioner Ayala Corporation (AYALA) is the owner of the Ayala estate located in Makati City.188 square meters. On March 20. located at Salcedo Village. [1] The transaction was documented in a Deed of Sale which provides. But the complaint does not even allege what the real agreement or intention was.2. Makati City. which is now the subject of this case. AYALA gave its written conformity to the sale but reflecting in its approval the same special conditions/restrictions as in the previous sale. NO
 . On February 18. b) The lot shall not be sold without the building having been completed. for it fails to allege that the instrument to the reformed does not express the real agreement or intention of the parties. commercial and industrial purposes. on April 11. (KARAMFIL) bought from AYALA a piece of land consisting of 1. among others. [3] Special Conditions: a) The vendee must obtain final approval from AYALA of the building plans and specifications of the proposed structures that shall be constructed on the land. PALMCREST in turn sold the lot to Ray Burton Development Corporation (RBDC). that the vendee would comply with certain special conditions and restrictions on the use or occupancy of the land. courts do not reform instruments merely for the sake of reforming them. This deed was submitted to AYALA for approval in order to obtain the latter’s waiver of the special condition prohibiting the resale of the lot until after KARAMFIL shall have constructed a building thereon. The said land. PALMCREST did not object to the stipulated [7] conditions and restrictions. Karamfil Import-Export Company Ltd. among which are - [2] Deed Restrictions: a) The total height of the building to be constructed on the lot shall not be more than forty-two (42) meters. with the agreement that AYALA retains possession of the Owner’s Duplicate copy of the title until a building is erected on said parcel of land in accordance with the requirements and/or . The said estate was originally a raw land which was subdivided for sale into different lots devoted for residential. 1988. Moreover. Ayala Corporation v Ray Burton Development Corp. 1984. but only to enable some party to asserts right under them as reformed. KARAMFIL sold the lot to Palmcrest Development and Realty Corporation (PALMCREST). and b) The sewage disposal must be by means of connection into the sewerage system servicing the area.

Luis’ wife. ignorance. and that he. that “contracts of adhesion wherein one party imposes a ready-made form of contract on the other x x x are contracts not entirely prohibited. . (c) violate the constitutional provision on equal protection of the laws. GR No. (BECC). on the grounds. 1989. (MADAI). Meanwhile. et. [8] restrictions of AYALA. Moreover. ISSUE: Whether the Deed of Restriction was a contract of adhesion. represented RBDC in the [56] negotiations and in the eventual purchase of the subject lot from PALMCREST. President of RBDC. as testified to by Edwin Ngo. there was even no attempt on the part of RBDC to prove that. and (d) are [15] contracts of adhesion since AYALA would not sell the lots unless the buyers agree to the deed restrictions. the latter is a realty firm and has been [54] [55] engaged in realty business. the stipulations in the Deed Restrictions and Special Conditions are plain and unambiguous which leave no room for interpretation. (b) have been superseded by Presidential Decree No. thereby depriving the vendees of the full enjoyment of the lots they bought. inter alia. filed a complaint against AYALA before the Housing and Land Use Regulatory Board (HLRB). a businessman for 30 years. 1096 (the National Building Code) and Metro Manila Commission Zoning Ordinance No. if he adheres he gives his consent. on November 28. 81-01. Edwin Ngo's testimony proves that RBDC was not an unwary party in the subject transaction. Instead. it was a weaker or a disadvantaged party on account of its moral dependence. We have emphatically ruled in the case of Ong Yiu vs. mental weakness or other handicap. Edwin Ngo has portrayed RBDC as a knowledgeable realty firm experienced in real estate business. The one who adheres to the contract is in reality free to reject it entirely. 127246 (Montenegro) FACTS: · Luis applied for a credit card from BPI Express Card Corp. Inc. [12] Like PALMCREST. and other lot owners. RBDC was not also averse to the aforesaid conditions and restrictions. They often exceed this but BECC didn't protest. in violation of Article 428 of the Civil Code. HELD: NO. the validity and/or enforceability of a contract of adhesion will have to be determined by the peculiar circumstances obtaining in each case and the situation of the parties concerned. of which RBDC is a member. RBDC. with credit limit of Php 10k per day. On the contrary. subject to RBDC’s compliance with the special conditions/restrictions which were annotated in the deed of sale. Spouses Ermitano v CA. that said restrictions purportedly: (a) place unreasonable control over the lots sold by AYALA. In the instant case. Court of [50] Appeals.” Thus. al. together with the Makati Developers Association. 1. A contract of adhesion in itself is not an invalid agreement. This type of contract is as binding as a mutually executed transaction. with Manuelita. The complaint sought the nullification of the very same Deed Restrictions incorporated in the deeds of sale of the lots purchased by the complainants from AYALA and annotated on their certificates of title. since the restrictions are imposed without regard to reasonable standards or classifications. as extension cardholder. in the execution of the Deed of Sale on the subject lot. AYALA gave its conformity to the sale.

she called BECC to inform it of the loss. puts the cardholder at the mercy of the credit card company which may delay indefinitely the notification of its members to minimize if not to eliminate the possibility of incurring any loss from unauthorized purchases. she wrote a letter to BECC the following day. On the matter of the damages petitioners are seeking. [The Court] likewise reduce the amount of moral damages to P50. In the instant case. reckless. they were charged for purchases they didn't do (thru the lost card). including the card. absent any clear showing that BECC acted in a wanton. BECC renewed card until March 1991. Luis insisted that purchases were made after they reported the card loss. or malevolent manner. son of the Alberto Zamora. as required by Article 2232 of the Civil Code. surrendered Luis’ card and asked for replacement cards. The Court cannot give its assent to such a stipulation which could clearly run against public policy. . · On August 30. fraudulent. considering the circumstances of the parties to the case. After the call. Syllabus cases 1. To require the cardholder to still pay for unauthorized purchases after he has given prompt notice of the loss or theft of his card to the credit card company would simply be unfair and unjust. it was dishonored ('cos the unauthorized charges were added to his balance so he reached his credit limit). CA reversed the decision. Or. Spouses sued BECC for damages. we must delete the award of exemplary damages. RTC ruled in their favor. on August 29. 27 SCRA 1276 (Repeated) 1. The questioned stipulation in this case. the credit card company may for some reason fail to promptly notify its members through absolutely no fault of the card-holder. Hernaez v De los Angeles. Prompt notice by the cardholder to the credit card company of the loss or theft of his card should be enough to relieve the former of any liability occasioned by the unauthorized use of his lost or stolen card. as in this case. the cardholder agrees to immediately report its loss or theft in writing to BECC . . · BECC continued to hold Luis liable for the unauthorized charges on the ground that there is a stipulation in their contract that says: “In the event the card is lost or stolen. thereafter. BECC cancelled their cards and told spouses to pay immediately or else they will be sued for collection of money.00. purchases made/incurred arising from the use of the lost/stolen card shall be for the exclusive account of the cardholder and the cardholder continues to be liable for the purchases made through the use of the lost/stolen BPI Express Card until after such notice has been given to BECC and the latter has communicated such loss/theft to its member establishments. Zamora v Miranda.000. Manuelita wrote BECC again. which still requires the cardholder to wait until the credit card company has notified all its member-establishments. the spouses should not be held liable for the unauthorized charges and must be awarded damages. ISSUE: Should a cardholder pay for the unauthorized purchases made after he reported the card’s loss to the bank? RULING: NO. GR No 162930 (Bercasio) FACTS ● Petitioner – widow of the Fernando Zamora.” · When Luis used his card at Caltex. oppressive. · Manuelita's bag was snatched. .

through Eduardo Cecilio (encargado) was in possession of the property in question. ○ Oct 1972 – P claimed that she went to the residence of Beatriz and they talked about the property and she drew a sketch depicting the location of the property. ○ She identified the genuine signatures of her mother (Beatriz) which were reflected on several IDs ● After examination by NBI people. ISSUE: WON the receipt evidencing sale of real property be used as a basis of claim of ownership. P learned that the occupants of the property in question were being harassed and were told to vacate. 1972 was not the signature of her mother. ○ Alberto told her that the property was owned by Beatriz whose family was residing in Manila. Alberto Zamora. ○ 26 Jun 1972 – she gave birth to her first child and that she and her mother. Her mother owned the property in question. ○ Jan 1996 – the tenants reported to her that there were two men who went to the property in question. she did not appoint anyone to administer or take care of her property. RATIO: ● Article 1358 of the Civil Code provides that acts and contracts which have for their object the transmission of real rights over immovable property or the sale of real property must appear . ○ P filed with the RTC an action for specific performance and annulment of sale.cousin of Alberto Zamora. took care of her child. An acknowledgement receipt was prepared. Joe Ang. Beatriz. and she went to Davao City for vacation only. The property was turned over to her and she was introduced to Cacilio. ● PETITIONER ○ P’s father-in-law. ○ Thereafter. it was found that the signatures were written by different persons. P went to Manila and confronted Beatriz. ● Respondent (Beatriz Miranda) . which Beatriz signed. Cabebe and Mr. ○ When her mother (Beatriz) left Davao City. ○ Feb 1996 – P met Atty. Beatriz was the registered owner of a parcel of land. P alleged that Beatriz sold to her the property for P50k. HELD: No. She informed them that she was the owner of the property in question as she bought it in 1972. ○ 1952 – P was designated by Alberto Zamora as his assistant in land matters. She (Rose Marie) disputed the claim of petitioner that the latter visited her mother in 1972. There was a notation “Documents for Agdao Property follows”. She is the daughter of Beatriz. ○ Sometime after. She declared that the signature on the receipt dated October 9 23. and told her that she would file a case in court. She likewise claimed that after 1972. ○ Cecilio allegedly continued to be her encargado as there were squatters on the property. she rented out portions of the property in question. ● TC: dismissed the complaint. ● RESPONDENT ○ Her mother left Davao City in 1942 and resided in Manila. ○ P prepared the document relative to the Agdao property.

● Fule v. WT Construction Inc v Province of Cebu. are hereby AFFIRMED. On July 26.951. In November 2006. which cannot be made the basis of petitioner’s claim of ownership over the property as Mr. established that the signature appearing on the said receipt is not the signature of respondent Beatriz Miranda. Arcadio Ramos. there is no need to discuss the other issues. 2006. the Province of Cebu caused WTCI to perform additional works on the project. in a public document. it decided to construct the Cebu International Convention Center (CICC or the project). Formal requirements are. If the law requires a document or other special form. weeks before the scheduled ASEAN Summit. in this case. WTCI agreed to perform the additional works notwithstanding the lack of public bidding. 2004. As Phase II neared completion. accordingly.478. ● The receipt dated October 23. To cater to the event. 1972 (Exhibit "B") is a worthless piece of paper. the Province of Cebu was chosen to host the 12th Association of Southeast Asian Nations (ASEAN) Summit scheduled on December 10. Non-compliance therewith does not adversely affect the validity of the contract nor the contractual rights and obligations of the parties thereunder.R. the petition is DENIED. and with the repeated assurances that it would be promptly paid. including the additional works and. GR No 208984 (Baclao) FACTS: In 2005. 2006. FALLO: WHEREFORE. 2003 in CA-G. has been found to be forged by the NBI handwriting expert. once the contract has been perfected. an NBI handwriting expert. as vendor. Court of Appeals – the embodiment of certain contracts in a public instrument. CV No. and registration of the instrument only adversely affects third parties. SMPI v BF Homes. demanded payment therefor. is only for convenience. The Province of Cebu conducted a public bidding for the project and WTCI emerged as the winning bidder for the construction of Phase I thereof which consists of the substructure of CICC. In a separate letter WTCI billed the Province of Cebu the amount of .69 corresponding to the added cost for the site development and extended structural and architectural works. ● However. and its Resolution dated February 9. 1. the contracting parties may compel each other to observe that form. 1972 has no evidentiary value to prove petitioner's claim of ownership over the property in question. raised by petitioner based on the assumption that she has a valid claim over the subject property. WTCI billed the Province of Cebu the amount of P175. therefore. GR No 169343 (Hung) 1. WTCI again won the bidding for Phase II of the project involving the adjacent works on CICC. ● As the receipt dated October 23. Cognizant of the need to complete the project in time for the ASEAN Summit. for the benefit of third parties. 1972 cannot prove ownership over the subject property as respondent Beatriz Miranda's signature on the receipt. the trial court and the Court of Appeals. 74156. The Court of Appeals' Decision dated September 17. the trial court dismissed petitioner's complaint on the ground that the receipt dated October 23. after completing Phase I and receiving payment therefor. which would serve as venue for the ASEAN Summit. WTCI completed the project.

goods or credits pending the happening of certain events or fulfillment of certain conditions such that if these conditions are breached. i. The liability arising . the Province of Cebu admitted the existence of the additional works but maintained that there was no contract between it and WTCI therefor. based on WTCI's claim that it merely advanced the cost of the additional works.” The RTC ruled in favor of WTCI and ordered the Province of Cebu to pay P257.66. The term "forbearance. For its defense. or credit refers to arrangements other than loan agreements where a person acquiesces to the temporary use of his money. the said person is entitled not only to the return of the principal amount given." within the context of usury law. and electrical works thereon. The Province of Cebu. this case involves WTCI's performance of a particular service.413. additional structural.73 with legal interest at the rate of 12% per annum. WTCI maintained that the obligation is one for forbearance of money since its performance of the additional works was a mere financial accommodation to the Province of Cebu. otherwise.97 representing the cost for the additional electrical and plumbing works. the Court finds that the liability of the Province of Cebu to WTCI is not in the nature of a forbearance of money as it does not involve an acquiescence to the temporary use of WTCI's money. otherwise known as the "Government Procurement Reform Act. It also claimed that the additional works did not undergo public bidding as required by Republic Act No.911. plumbing. consisting of site development. the Court has repeatedly recognized that liabilities arising from construction contracts do not partake of loans or forbearance of money but are in the nature of contracts of service. the Province of Cebu would be unjustly enriched. goods. during a given period of time. Verily. refused to pay thereby prompting WTCI to send a Final Billing dated February 21.P85. has been described as a contractual obligation of a lender or creditor to refrain.217. HELD: What is at issue is whether the liability of the Province of Cebu involves a forbearance of money.. Applying the foregoing standards to the case at hand.e. Forbearance of money. goods or credits. WTCI reiterated its demand for payment but the Province of Cebu still refused to pay.266. The CA affirmed the RTC's Order however The CA pointed reduced the interest rate from 12% to 6% per annum is warranted given that the liability of the Province of Cebu did not arise from a loan or forbearance of money but from the non¬payment of services rendered by WTCI. and that WTCI must be duly compensated therefor under the doctrine of quantum meruit. as originally decreed by the RTC. the performance of additional works on CICC. Thus. (RA) 9184.407. from requiring the borrower or debtor to repay the loan or debt then due and payable. architectural.886. however. 2007 where it demanded payment of the aggregate sum of P261. Rather. thereby warranting the imposition of legal interest at the rate of 12% per annum. but also to compensation for the use of his money equivalent to the legal interest since the use or deprivation of funds is akin to a loan. WTCI filed a complaint for collection of sum of money before the RTC. The RTC found that there was a perfected oral contract between the parties for the additional works on CICC. ISSUE: Whether or not the liability of the Province of Cebu is in the nature of a loan or forbearance of money.

i. therefore. among them.Juan Yusay died leaving a widow. The actual base for the computation of legal interest shall. Numeriana. not constituting a loan or forbearance of money. the rate of interest shall be 12% per annum to be computed from default. . community property of his marriage to Juana. When the obligation is breached. After his death his descendants (5 children: Candido. be on the amount finally adjudged. In the absence of stipulation.. 4 pages lang siya masyado kasing detailed yung proceedings need talaga basahin para magets yung facts na nilagay ko general overview lang lacks details cause important lahat) . a loan or forbearance of money. the interest due shall itself earn legal interest from the time it is judicially demanded.e.Though Juana took no part in the partition her interest in the land was nevertheless distributed among the descendants (5 children). please read the case. When an obligation. Tinsay v Yusay. do not partake of a loan or forbearance of money but is more in the nature of a contract of service. the interest due should be that which may have been stipulated in writing. is breached. shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. 47 Phil 639 (Layug) Topic: Classification of Contacts according to name (b) Innominate.e. 1. Juana Servando. Jovita and Petra. sustains the CA's ruling that the rate of legal interest imposable on the liability of the Province of Cebu to WTCI is 6% per annum. Jovito. where the demand is established with reasonable certainty. No interest. an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. Accordingly. NCC 1307 Those which are not given any names or designations are innominate contracts. the interest shall begin to run from the time the claim is made judicially or extrajudicially but when such certainty cannot be so reasonably established at the time the demand is made. went into possession of the respective portions allotted to them in said partition. however. in any case. Furthermore.. The Court. On the strength of the partition the descendants. innominate contracts shall be governed by the following: · Stipulations of the parties
 · Provisions of Obligations and Contracts in the Civil Code · Rules governing the most analogues nominate contracts · Customs of the Place FACTS: (Guys. . from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code. and it consists in the payment of a sum of money.from the non-payment for the construction works. Jovita and Petra) made a partition by a private instrument of certain lands. the interest shall begin to run only from the date the judgment of the court is made. i.

Dizon through his lawyer. nevertheless. Petitioner defaulted in the payment of his debt. Petitioner..813. Dizon. alleging that the documents Deed of Sale With Assumption of Mortgage and the Option to Purchase Real Estate did not express the true intention and agreement between the parties.000. contended that the two deeds constitute in fact a single transaction that their real agreement was not an absolute sale of the land but merely an equitable mortgage or conveyance by way of security for the reimbursement or refund by Dizon . 83 SCRA 688 (Lipana) Facts: Petitioner. They then entered into a contract captioned as “Deed of sale with assumption of mortgage” and the second contract executed the same day. Gaborro to the petitioner. He constituted a first mortgage to DBP to secure a loan of P38. Gaborro took possession of the three parcels of land. the appellant as heirs of the widow claimed a share of her interest in the land. Jose P. (c) that. (b) that the partition of her interest among her heirs before her death constituted a partition of a future inheritance and was therefore invalid under the second paragraph of article 1271 of the Civil Code.831. He improved. if the appellants have accepted the benefit of the partition agreement to the prejudice of the other heirs and refuse to make restitution of the property received by them by virtue of said agreement. Dizon v Gaborro. After the execution of said contracts. Alfredo G. Jose P. Dizon instituted a complaint in the Court of First Instance of Pampanga. Pampanga.00 and a second mortgage to PNB amounting P93. Gaborro did not agree to the demands of the petitioner. therefore. wrote a letter to Gaborro informing him that he is formally offering reimburse Gaborro of what he paid to the banks.91 which purports to be the consideration of the sale was not actually paid by Alfredo G. they are estopped from repudiating the agreement and from claiming an interest in the property allotted to the other heirs.Upon the subsequent death of the widow Juana.Some years later the portions of Jovita and Petra from the lands were registered in their names in a cadastral proceeding. . Juana not being a party to the partition agreement. Jose P. situated in Mabalacat. cultivated the kinds raised sugarcane and other crops produce. Gaborro became interested in the lands of Dizon. is called “Option to Purchase Real Estate” The sum of P131. ISSUE: W/N The attempt to partition Juana’s land among her heirs. hence. the Development Bank of the Philippines foreclosed the mortgage extrajudicially. 1.91. was the owner of the three parcels of land. The court ruled (a) That. But since the property was already foreclosed by the DPB. Gaborro made several payments to the DBP and PNB. the agreement standing alone was ineffective as to her interest in the property partitioned. The said amount represents the aggregate debts of the petitioner with the Development Bank of the Philippines trial the Philippine National Bank. constituting a partition of a future inheritance is valid Held: NO.

to Gaborro of any and all sums which the latter may have paid on account of the mortgage debts in favor of the DBP and the PNB. respondent Gaborro. in his capacity as Presiding Judge of RTC. and in consideration therefor. petitioner Dizon and respondent Gaborro. Branch 8. ● RTC ruling – in favor of petitioners . respondent Gaborro was given the possession. are concerned. Inc. 1. respondents FACTS ● On May 15. SAMUEL PORMIDA and CHARITO PORMIDA. and the facts established. ● 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. respondent corporation has the right to equal the highest offer. (b) make the lands productive for the benefit of the possessor. Tacloban City. and LEYTE GULF TRADERS. petitioner Bentir sold the leased premises to petitioner spouses Samuel Pormada and Charito Pormada. petitioners HONORABLE MATEO M. LEANDA. petitioner Dizon. INC. 330 SCRA 591 (Untalan) PARTIES YOLANDA ROSELLO-BENTIR. The lease was extended for another four (4) years or until May 31. Issue: Whether or not the contract showed the true agreement between the parties. a legal point of primary importance here. ● Respondent corporation questioned the sale alleging that it had a right of first refusal. the enjoyment and use of the lands until petitioner can reimburse fully the respondent the amounts paid by the latter to DBP and PNB. It sought 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. (c) assure the return of the land to the original owner. but partaking of the nature of the antichresis insofar as the principal parties. 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 Leyte Gulf Traders. In the light of the foreclosure proceedings and sale of the properties. ● On May 5. 1992. 1307 of the New Civil Code whereby petitioner and respondent agreed "to give and to do" certain rights and obligations respecting the lands and the mortgage debts of petitioner which would be acceptable to the bank. (herein referred to as respondent corporation) filed a complaint for reformation of instrument against petitioners Yolanda Rosello-Bentir and the spouses Samuel and Charito Pormida. 97 Phil 609 (Repeated) 1. Bentir v Leande. Garcia v Bisaya.. to accomplish the following ends: (a) payment of the bank obligations. as well as other relevant facts and circumstances. Held: No. 1968. 1989. the law and Jurisprudence. In view of all these considerations. We agree with the findings of the trial and appellate courts that the true intention of the parties is that respondent Gaborro would assume and pay the indebtedness of petitioner Dizon to DBP and PNB. 1992. We find that the agreement between petitioner Dizon and respondent Gaborro is one of those innominate contracts under Art. thus rendering equity and fairness to all parties concerned.

the result is that an oral agreement is by court decree made legally effective. and not to settle issues arising from an alleged breach thereof. . the time when the contract of lease was executed. being an extraordinary one. Here. it may be entertained only before the breach or violation of the law or contract to which it refers." ● That the foregoing provision has been included in the lease agreement if only to convince the defendant-lessor that plaintiff desired a priority right to acquire the property (by purchase. The prescriptive period for actions based upon a written contract and for reformation of an instrument is ten (10) years under Article 1144 of the Civil Code. A suit for reformation of an instrument may be barred by lapse of time. Consequently. respondent corporation had ten (10) years from 1968. time- barred. Since the purpose of an action for declaratory relief is to secure an authoritative statement of the rights and obligations of the parties for their guidance in the enforcement thereof. IMPROVEMENT. the respondent judge reversed the order of dismissal: ● Included in said covenant of lease is the verbal understanding and agreement between the contracting parties. This agreement (sic) is made apparent by paragraph 4 of the lease agreement stating: ● 4. respondent corporation brought the present action for reformation after an alleged breach or violation of the contract was already committed by petitioner Bentir. . 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. ■ On appeal. hence. among which is laches. The right of reformation is necessarily an invasion or limitation of the parol evidence rule since. The lessee shall have the right to erect on the leased premises any building or structure that it may desire without the consent or approval of the Lessor . that when the defendant (as lessor) will sell the subject property. or compliance therewith. the remedy of reformation no longer lies. ● CA – affirmed RTC decision ISSUE Whether or not the contract may be reformed RULING – in favor of respondents NO. hence. it did so only on May 15. must be subject to limitations as may be provided by law. Consequently. Our law and jurisprudence set such limitations. provided that any improvements existing at the termination of the lease shall remain as the property of the Lessor without right to reimbursement to the Lessee of the cost or value thereof. to file an action for reformation. ■ The RTC first dismissed the case. In the case at bar. that is. Sadly. must necessarily exercise that power sparingly and with great caution and zealous care. Moreover. the plaintiff as (lessee) has the "right of first refusal". its cause of action has become stale. the remedy. 1992 or twenty-four (24) years after the cause of action accrued. upon expiration of the effectivity of the deed of lease. . as the agencies authorized by law to exercise the power to reform an instrument. the courts. saying that the action for reformation had already prescribed. the right to equal the offer of any other prospective third-party buyer. when a writing is reformed.

When Pinili asked for the title of the land. ● After the death of Valentina Unto Flores. the petition is hereby GRANTED. which was actually one-half of Lot 4163 instead of Lot 5734 as designated in the deed. for the sale of one-half share of Lot 4163 after offering the same to their co-owner. TCT No. Trinidad. However. Two rows of coconut trees planted in the middle of this lot serves as boundary line. grandchildren of Jose and now owners of one-half of Lot 4163. Sarming v Dy. Silveria Flores was present during the preparation and signing of the deed and she stated that the title presented covered Lot No. The Order of the Regional Trial Court of Tacloban City. ● Before preparing the document of sale. who promised to turn it over to Pinili for the reformation of the deed of sale. The Decision of the Court of Appeals dated January 17. covering Lot No. through her daughter. Tomasa. when Alejandra Delfino purchased the adjoining portion of the lot she had been occupying. with the exception of Alejandra Delfino. ● In January 1956.Alejandra Delfino paid the necessary fees so that the title to Lot 4163 could be released to Silveria Flores. Luisa. 1. 5078 was issued in the names of Silveria Flores and Alejandra Delfino. 1995 dismissing the action for reformation is REINSTATED. with one-half share each. Silveria did not do so. she discovered that what was designated in the deed. Silveria did not object to the sale of said portion to Alejandra Delfino. prompting Alejandra and the vendors to file a complaint against Silveria for . At that time. who declined for lack of money. Pinili prepared a notarized Settlement of Estate and Sale (hereinafter deed) duly signed by the parties on January 19. her three children. Silveria. Ruperto. was sub-divided between Silveria and Jose. 4918-A was cancelled and in lieu thereof. and Luisa and Trinidad who are the descendants of Venancio and Jose. their children and grandchildren took possession of their respective shares. ● Alejandra Delfino immediately took possession and introduced improvements on the purchased lot. Upon their death. Juan. Hilario. are the heirs of Valentina Unto Flores. She sought the assistance of Pinili who approached Silveria and together they inquired from the Registry of Deeds about the status of Lot 4163. Lot 5734. Ruperto and Tomasa. 383 SCRA 131 (Bercasio) FACTS: ● Petitioners are the successors-in-interest of Silveria (defendant) ● Respondents Cresencio Dy and Ludivina Dy-Chan are the successors-in-interest of Delfino (plaintiff)) – he is the buyer of one of the lots subject of this case. the late Atty. 1956. They found out that OCT No. entered into a contract with plaintiff Alejandra Delfino. 4163. dated December 15. delivered Original Certificate of Title No. called Silveria and the heirs of Venancio to a conference where Silveria declared that she owned half of the lot while the other half belonged to the vendors. the parties knew the location of Lot 4163 but not the OCT Number corresponding to said lot. 3129-A covering Lot 4163 was still on file. namely: Jose. 4918-A. despite repeated demands. Deogracias Pinili. Venancio.WHEREFORE. The other parcel.As a result. Lot 4163 which is solely registered under the name of Silveria. and that she was selling her three coconut trees found in the half portion offered to Alejandra Delfino for P15. who owned several lots located at Dumaguete City. the brothers of Silveria. and not the correct title covering Lot 4163. ● Two years later. Cristita Corsame. Branch 7. Silveria Flores. 4918-A was the correct title corresponding to Lot 4163. 5734. Alejandras lawyer. took possession of Lot 5734 with each occupying a one-third portion. OCT No. ● Dy alleged that they. 1997 is REVERSED and SET ASIDE. They were joined in this petition by the successors-in-interest of Isabel. was the wrong lot. and Silveria. ● Believing that OCT No.

3457. RATIO: PETITIONERS: absence of cause of action against Flores because they were not parties to the contract sought to be reformed. ISSUE ● WON there is a cause of action for reformation of the deed.) All of the requisites for the reformation of an instrument are present in this case. Branch 41. 2. 1. As found by both courts below. We particularly note that one of the stipulated facts during the pre-trial is that one-half of Lot 4163 is in the possession of plaintiff Alejandra Delfino since 1956 up to . 3.) There was a meeting of the minds between the parties to the contract but the deed did not express the true intention of the parties due to mistake in the designation of the lot subject of the deed. reformation of the deed of sale with damages before the Regional Trial Court of Negros Oriental. She also claimed that respondents illegally took possession of one-half of Lot 4163. the contract of sale clearly stated that the property being sold was Lot 5734. ● In her answer. There is no dispute as to the intention of the parties to sell the land to Alejandra Delfino but there was a mistake as to the designation of the lot intended to be sold as stated in the Settlement of Estate and Sale. docketed as Civil Case No. She also asked for compensatory. What was sold was the one-half share of Jose. inequitable conduct or accident. Her name did not appear as one of the sellers of one-half lot to Delfino because she never sold her share. ● TC: ordered for the reformation of the contract. subsequent and contemporaneous acts of the parties as well as the evidentiary facts as proved and admitted can be reflective of ones intention. HELD: DOCTRINE: Reformation is that remedy in equity by means of which a written instrument is made or construed so as to express or conform to the real intention of the parties. (2) the instrument does not express the true intention of the parties. ● WON the reformation of the deed is proper.) The SC held that a close perusal of the deed showed that Flores was a party to the contract. – The totality of the evidence clearly indicates that what was intended to be sold to Delfino was Lot 4163 and not Lot 5734. fraud. It is also established that it was Silveria herself who delivered the subject lot to the vendee Delfino. not Lot 4163. respondents had no right to sell the lot. 1. An action for reformation of instrument under this provision of law may prosper only upon the concurrence of the following requisites: (1) there must have been a meeting of the minds of the parties to the contact. As provided in Article 1359 of the Civil Code. there are enough bases to support such conclusion. She was not only the seller but also one of the heirs of entitled to the estate of Venancio and Maxima. PETITIONER: respondents failed to show a cause of action for the reformation of the instrument in question. and (3) the failure of the instrument to express the true intention of the parties is due to mistake. Silveria Flores claimed that she was the sole owner of Lot 4163 as shown by OCT No. and exemplary damages and attorneys fees. moral. She thus prayed that she be declared the sole owner of Lot 4163 and be immediately placed in possession thereof. 3129-A and consequently. According to her. ● CA: affirmed.) While intentions involve a state of mind which may sometimes be difficult to decipher.

one belonging to Silveria Flores and the other to the heirs of Jose Flores. RTC ruled in favor of the petitioner.) Furthermore. Atty. The other half belongs to her brother Jose. However. No pronouncement as to costs 1. 39401 is AFFIRMED with MODIFICATION. Silveria recognized the right of Joses grandchildren over one-half portion of the property.000. 14 SCRA 170 (Baclao) 11. It is hereby ordered that the document entitled Settlement of Estate and Sale be reformed by changing the phrase Lot 5734 to Lot 4163 found in the sixth paragraph of the deed. m. the award of actual damages in the amount of P5. it has been shown that a spot investigation conducted by a duly licensed surveyor revealed that Lot 4163 is subdivided into two portions. the CA reversed the decision of the trial court stating that the she failed to prove her reason and the absence of proof of illiteracy. Additionally. . 4. Respondent. Cosio v Palileo.000 are both SET ASIDE.R. CV No. if it were true that Silveria Flores was the sole owner of Lot 4163. then Silveria Flores was occupying more than her share of the inherited lot. together with the house constructed thereon. by virtue of a grant from the National Housing Authority (NHA). had been leasing a portion of the house situated therein. became the registered owner of a parcel of land situated in Caloocan City. the petitioner filed a case in the RTC claiming the reformation of the said document for the reason that she did not understand its text and her true intention was not reflected. Balao-Ga of the Public Attorneys Office notarized a document entitled Sale and Transfer of Rights over a Portion of a Parcel of Land executed by petitioner whereby she sold to respondent 27 sq.] Now. The trial court gave credence to the testimony of Trinidad Flores. the present. the trial court also found that in spite of her title over Lot 4163. as found by the Court of Appeals.000 and of moral damages in the amount of P10. of her lot. one of the grandchildren. on record. the decision of the Court of Appeals in CA-G. Emilio v Rapal. on the other hand. represented now by his grandchildren successors-in-interest. As found by the trial court. if indeed it was Lot 5734 that was sold.00. The award to respondents of attorneys fees in the amount of P2. 617 SCRA 199 (Montenegro) FACTS: Petitioner. who testified. 5. based on the evidence on record. that Silveria Flores owns only one-half of Lot 4163. FALLO WHEREFORE. As such. then she should have objected when Alejandra Delfino took possession of one-half thereof immediately after the sale. Afterwards.000 is affirmed. we find no cogent reason to depart from the conclusion of both the Court of Appeals and the trial court. However.) As a matter of fact. thereby ceding in favor of respondents one-half portion of Lot 4163 instead of Lot 5734. for a consideration of P90. the latter could rightfully sell the land to Alejandra Delfino. why would Alejandra occupy and possess one-half of said lot if it was not the parcel of land which was the object of the sale to her? Besides.

However. inequitable conduct or accident. like the deed in question. convincing and more than merely preponderant evidence. HELD: No. what remains to be resolved is whether the contract expressed the true intention of the parties. the petitioner failed to establish the burden of proving the same. if not. enjoy the presumption of regularity which can be overturned only by clear. whether it was due to mistake. Petitioner having admitted the existence and execution of the instrument. . It is to be noted that Notarized documents.ISSUE: Whether or not the reformation of the deed of sale and transfer of rights between the parties at bar can be reformed. fraud.