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Standard Oil Co. vs.

Arenas
(19 Phil. 363)
July 25, 1911
Ponente; Arellano, C.J.

Facts:
On December 15, 1908, Juan Codina Arenas, with one other persons as principals, along with
Vicente Sixto Villanueva, who with two others as sureties, assumed the obligation to pay jointly and
severally Standard Oil Co. On April 5, 1909, Standard Oil sued for payment of the debt. On May 12, 1909
Villanueva was declared to be in default. The wife of Villanueva, declared while the judgement was in
execution; (1) that her husband was declared insane on June 24, 1909 by Manila’s Court of First Instance;
(2) that she was appointed as guardian on Oct. 11, with authority to institute legal proceedings for
annulment of bonds given by her husband while insane; (3) that her husband was already permanently
insane when he gave the bond to Standard Oil an was insane and unable to defend himself during the
litigation and for this reason asked the court to reopen the trial to allow for the introduction of evidence
for Villanueva regarding his incapacity to act at the time he gave the bond. The court reopened the trial
but concluded that Villanueva had capacity to act at the time he gave the bond on Dec. 15, 1908.

Issue:
(1) Whether or not (WON) suffering from monomania of wealth necessarily warrants the conclusion
that the person does not have capacity to act.
(2) WON Villanueva, appellant, was incapable of entering into contract at the time the bond was
executed on December 15, 1908.

Held: affirmed the judgement of the Court of First Instance of Manila

Ratio:
1) No, it does not.

- from the knowledge at that time of the state of mental alienation, there is not evidence to warrant the
conclusion, in a judicial decision, that a person suffering from monomania of wealth is really insane
and therefore is deranged and incapable of binding himself in a contract.

2) No, he wasn’t

- “Capacity to act must be supposed to attach to a person who has not previously been declared
incapable, and such capacity is presumed to continue so long contrary is not proved, that is, at the
time of his acting he was incapable, crazy or out of his mind; which, in the opinion of the court, has
not been proved in this case.”
- There was no direct proof that showed that at the date of the giving of the bond, December 15, 1908,
the appellant was incapable of acting because of insanity. The witnesses who as physicians, testified
that they observed insane periods in Villanueva twice prior to 1903, once on 1908, but none at the
time of the execution of the said bond on December 15, 1908.
- It was also shown that the wife never before sought to legally deprive her husband management over
his estate knowing full well that he was insane.