CIVIL LAW – ESTOPPEL

Estoppel  (Article 1431)

1. An admission;
2. Is rendered conclusive
3. Upon the person making it; and
4. Cannot be denied or disproved against the person relying thereon
 

Concept of Estoppel
Estoppel is a bar which precludes a person from denying or asserting anything
to the contrary of that which has, in contemplation of law, been established as
the truth, either by the acts of judicial or legislative officers or by his own deed or
representation, either expressed or implied.
It concludes the truth in order to prevent fraud and falsehood, and imposes
silence on a party only when in conscience and honesty he should not be
allowed to speak.
 
Distinguished from Waiver
A waiver is a voluntary and intentional abandonment or relinquishment of a
known right. It carries no implication of fraud. It involves the act or conduct of
only one of the parties.
An equitable estoppel may arise, however, even where there is no intention on
the part of the person estopped to relinquish any existing right and frequently
carries the implication of fraud. It involves the conduct of both parties.
In Lopez v. Ochoa (L- 7955, May 30, 1958), the Supreme Court held that waiver
and estoppel are frequently used as convertible terms. The doctrine of waiver
belongs to the family of, is of the nature of, is based on, estoppel. The essence
of waiver is estoppel and where there is no estoppel, there is no waiver. This is
especially true where the waiver relied upon is constructive or implied from the
conduct of a party.
 
Distinguished from Ratification
In ratification, the party is bound because he intended to be bound; in estoppel,
the party is bound notwithstanding the fact that there was no such intention
because the other party will be prejudiced and defrauded by his conduct unless
the law treats him as legally bound.
 
Distinguished from  Fraud
Estoppel exists with or without a contract; fraud presupposes an attempt to enter
into a valid agreement or contract.
While estoppel may raised as a defense, fraud may properly be a cause of
action on account of the vitiated consent that it produces.

 Admissions
A party may be estopped to insist upon a claim, assert an objection, or take a
position which is inconsistent with an admission which he had previously made
and in reliance upon which the other party has changed his position.

Silence or Inaction
This is sometimes referred to as estoppel by “standing by” or “laches.” Mere
innocent silence will not work an estoppel. There must also be some element of
turpitude or negligence connected with the silence by which another is misled to
his injury. But one who invokes this doctrine of estoppel must show not only
unjustified inaction but also some unfair injury would result to him unless the
action is held barred.
Estoppel by acquiescence is closely related to estoppel by silence. In the
former, a person is prevented from maintaining a position inconsistent with one
in which he has acquiesced.

Nature of Laches
Laches is failure or neglect, for an unreasonable and unexplained length of time,
to do that which, by exercising due diligence, could or should have been done
earlier; it is negligence or omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to assert it either has
abandoned or declined to assert it.
 
Elements of Laches
1. Conduct on the part of the defendant or of one under whom he claims,
giving rise to the situation complained of;
2. Delay in asserting complainant’s rights after he had knowledge of the
defendant’s conduct and after he has had an opportunity to sue;
3. Lack of knowledge or notice on the part of the defendant that the
complainant would assert the right on which he bases his suit;
4. Injury or prejudice to the defendant in the event relief is accorded to the
complainant.

Laches and Prescription Distinguished

PRESCRIPTION LACHES
Concerned with the fact of delay Concerned with the fact of delay
Principally a question of inequity
founded on some change in the
condition of the property or the
A matter of time relation of the parties
Statutory Not statutory
Applies to law Applies to equity
Based on a fixed time Not based on a fixed time

Kinds of Estoppel
1.    Technical Estoppels
1. Estoppel by record – the preclusion to deny the truth of matters set forth in
a record, whether judicial or legislative, and also to deny the facts
adjudicated by a court of competent jurisdiction
Example:  the conclusiveness of a judgment on the parties to a case
1. Estoppel by deed – a bar which precludes one party to a deed and his
privies from asserting as against the other party and his privies any right or
title in derogation of the deed, or from denying the truth of any material
facts asserted in it; a written instrument is necessary for there to be
estoppel by deed
Æ    Some doctrines:
1. If the deed or instrument is null and void because of the contract, there is
no estoppel
2. Ordinarily, the person estopped must be capacitated; but a minor is clever
enough to deceive others, estoppel may result
3. If a person, who is not a party to the instrument, notarizes the same, he is
not in estoppel

2.   Equitable Estoppel or Estoppel in Pais

It arises when one by his acts, representations or admissions, or by his silence
when he ought to speak out, intentionally or through culpable negligence,
induces another to believe certain facts to exist, and such other rightfully relies
and acts on such belief, so that he will be prejudiced if the former is permitted to
deny the existence of such facts.  It takes place in a situation where because if a
party’s action or omission, he is denied the right to plead or prove an otherwise
important fact.
This may be estoppel:
1. by conduct or by acceptance of benefits
2. by representation or concealment
3. by silence
4. by omission
5. by laches

Æ   Some doctrines:

 1. Conduct because of ignorance or mistake does not result in estoppel
2. Estoppel by laches bars an action to create a vested right (executory
interest) but does not bar an action to protect a vested right (executed
interest)
3. Just because a person is silent does not necessarily mean that he will be
in estoppel; there should have been a duty or obligation to speak
4. A mere promise to perform or to omit at some future time does not
necessarily result in estoppel (promissory estoppel); for this to exist, the
promise must have been relied upon and prejudice would result unless
estoppel is applied
 
Elements of Estoppel in Pais
In relation to the party sought to be estopped:
1. Conduct amounting to false representation or concealment of material
facts or at least calculated to convey the impression that the facts are
otherwise than and consistent with those which the party subsequently
attempts to assert;
2. Intent or at least expectation that this conduct shall be acted upon by at
least influence the other party;
3. Knowledge, actual or constructive, of the real facts

In relation to the party claiming the estoppel:

1. Lack of knowledge or of the means of knowing the truth as to the facts in
question;
2. Reliance, in good faith, upon the conduct or statement as to the facts in
question;
3. Action or inaction based thereon of such character as to change the
position or status of the party claiming the estoppel to his injury, detriment,
or prejudice
 

Estoppel against Owner

When in a contract between third persons concerning immovable property, one
of them is misled by a person with respect to the ownership of real right over the
real estate, the latter is precluded from asserting his legal title or interest therein,
provided all these requisites are present:
1. There must be fraudulent representation or wrongful concealment of facts
known to the party estopped;
2. The party precluded must intend that the other should act upon the facts
as misrepresented;
3. The party misled must have been unaware of the true facts; and
4. The party defrauded must have acted in accordance with the
misrepresentation.
Æ   An estoppel operates on the parties to the transaction out of which it arises
and their privies.
Æ   The government is not estopped by mistake or error on the part of its
officials or agents; the erroneous application and enforcement of the law by
public officers does not prevent a subsequent correct application of the statute.
 
Natural Law
1. Immutable and independent of all human regulations
2. Includes those rules which are neither written nor promulgated, but are
derived from reason and nature
 
Types of Obligations:
1. Moral obligations – duties of conscience completely outside the field of
law
2. Natural obligations – not sanctioned by any action but have a relative
juridical effect
3. Civil obligations – juridical obligations which apparently are in conformity
with positive law but are contrary to juridical principles and susceptible of
being annulled
4. Mixed obligations – have full juridical effect
 
Conditions Necessary for Natural Obligation to Arise:
 1. Juridical tie which is not prohibited by law
2. This tie is not given effect by law
Æ   When a debtor offers a guarantor for his natural obligation, he impliedly
accepts the coercive remedies to enforce the guaranty, and therefore, the
transformation of the natural obligation into a civil obligation.
 
Source:
Civil Law (Estoppel)  Memory Aid
Ateneo Central Bar Operations 2001