STUDY GUIDE (No.

9)

Discuss/Comment:

Part I.
1. The congressional franchise of ABS-CBN expired on May 4, 2020 without the congress extending the
franchise even as ABS-CBN has a pending application for the renewal of its franchise before the
congress. Consequently, The National Telecommunications Commission on May 5, 2020 issued ABS-CBN
a CEASE AND DESIST ORDER.
a. Comment/Argue on the legality and validity of the Cease and Desist Order issued by the NTC.
Cite your legal bases therefor.
b. Did the NTC commit grave abuse of discretion? If you are the counsel of NTC, what is your
legal defense against the charge of grave abuse of discretion?
c. Would it be legally possible for the NTC to have just issued a provisional or temporary
authority to operate pending the resolution of its pending application before the congress instead of the
Cease and Desist Order?
d. May the Cease and Desist Order issued by the NTC to ABS-CBN be considered as a usurpation
of the power of the congress?

2. May ABS-CBN be allowed to continue its operation on the basis of the resolution of the congress
allowing the same to continue its operation pending resolution of its congressional application?

3. May ABS-CBN be allowed to continue its operation without a congressional franchise based on the
principle of equity?

4. Assuming a charge for grave abuse of discretion is filed against the NTC,
a. May the court exercise its jurisdiction even as the issue is not a justiciable but a political
question?
b. If you are the counsel of the NTC, will you file a motion to dismiss on the ground that the
issue is political not justiciable?
c. If you are the counsel of the NTC, will you file a motion to dismiss on the ground that there is
prematurity for failure the exhaust the administrative remedies?
d. NTC is under the executive branch of government, can the President of the Philippines recall
the Cease and Desist Order and order the NTC to issue ABS-CBN a provisional authority to operate?

5. Outline the possible and legally feasible remedies available to ABS-CBN.

Part 11.
1. Spouses Boy and Liza wanted to sell their house. They found a prospective buyer, Ramon. Liza
negotiated with Ramon for the sale of the property. They agreed on a fair price of P2 Million. Ramon
sent Liza a letter confirming his intention to buy the property.  Later, another couple, Bert and Emy,
offered a similar house at a lower price. But Ramon insisted on buying the house of Boy and Liza for
sentimental reasons. Ramon prepared a deed of sale to be signed by the couple and a manager’s check
for P2 Million. After receiving the P2 Million, Boy signed the deed of sale. However, Liza was not able to
sign it because she was abroad. On her return, she refused to sign the document saying she changed her
mind. Liza filed suit for nullification of the deed of sale and for moral and exemplary damages against
Ramon.
a. Will the suit prosper? Explain. 

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 b. Does Ramon have any cause of action against Boy and Liza? Can he also recover damages
from the spouses? Explain.
References:
1. Pelayo v. CA, G.R. No. 141323, June 8, 2005
2. Art. 2219 and 2232 of the Civil Code.
3. Art. 96, Family Code
4. Abalos v. Macatangay, G.R. No. 155043, sept. 30, 2004
5. Ponce v. Legaspi, G.R.No.79184, May 6, 1992

2. On June 15, 2015, Jesse sold a parcel of registered land to James. On June 30, 2015, he sold the same

land to Josua. Who has a better right if:
a. the first sale is registered ahead of the second sale, with knowledge of the latter. Why?
b. the second sale is registered ahead of the first sale, with knowledge of the latter? Why?

3. JV, owner of a parcel of land, sold it to PP.  But the deed of sale was not registered.  One year later, JV

sold the parcel again to RR, who succeeded to register the deed and to obtain a transfer certificate of
title over the property in his own name. Who has a better right over the parcel of land, RR or PP? Why?  
Explain the legal basis for your answer.

4. Juan and his sister Juana inherited from their mother two parcels of farmland with exactly the same
areas. For convenience, the Torrens certificates of title covering both lots were placed in Juan's name
alone. In 1996, Juan sold to an innocent purchaser one parcel in its entirety without the knowledge and
consent of Juana, and wrongfully kept for himself the entire price paid.
a. What rights of action, if any, does Juana have against Juan and/or the buyer?
b. Since the two lots have the same area, suppose Juana flies a complaint to have herself
declared sole owner of the entire remaining second lot, contending that her brother had forfeited his
share thereof by wrongfully disposing of her undivided share in the first lot. Will the suit prosper?

5. Under what circumstances would an implied new lease or a tacita reconduccion arise?

6. In actions based on quasi-delict, may a principal be held liable for tort committed by its agents?
Read: Sps. Bernardo and Lourdes Viloria vs. Continental Airlines, Inc., G.R. No. 188288, January 16, 2012.

7. a. Enumerate the ways a trust may be created? b. How may an implied trust be proved?

We agree with the CA ruling that petitioner Lorenza, by affixing her signature to the Deed of
Sale on the space provided for witnesses, is deemed to have given her implied consent to the
contract of sale.

Sale is a consensual contract that is perfected by mere consent, which may either be express or
implied.[7]  A wife's consent to the husband's disposition of conjugal property does not always
have to be explicit or set forth in any particular document, so long as it is shown by acts of the
wife that such consent or approval was indeed given.[8]  In the present case, although it appears
on the face of the deed of sale that Lorenza signed only as an instrumental witness,
circumstances leading to the execution of said document point to the fact that Lorenza was fully
aware of the sale of their conjugal property and consented to the sale.

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Human experience tells us that a wife would surely be aware of serious problems such as
threats to her husband's life and the reasons for such threats.  As they themselves stated,
petitioners' problems over the subject property had been going on for quite some time,
so it is highly improbable for Lorenza not to be aware of what her husband was doing to
remedy such problems.  Petitioners do not deny that Lorenza Pelayo was present during
the execution of the deed of sale as her signature appears thereon.  Neither do they
claim that Lorenza Pelayo had no knowledge whatsoever about the contents of  the 
subject  document.  Thus, it is quite certain that she knew of the sale of their conjugal
property between her husband and respondent.

Under the rules of evidence, it is presumed that a person takes ordinary care of his
concerns.[10]  Petitioners did not even attempt to overcome the aforementioned
presumption as no evidence was ever presented to show that Lorenza was in any way
lacking in her mental faculties and, hence, could not have fully understood the
ramifications of signing the deed of sale. Neither did petitioners present any evidence
that Lorenza had been defrauded, forced, intimidated or threatened either by her own
husband or by respondent into affixing her signature on the subject document.  If
Lorenza had any objections over the conveyance of the disputed property, she could
have totally refrained from having any part in the execution of the deed of sale.  Instead,
Lorenza even affixed her signature thereto.

Moreover, under Article 173, in relation to Article 166, both of the New Civil Code, which
was still in effect on January 11, 1988 when the deed in question was executed, the lack
of marital consent to the disposition of conjugal property does not make the contract
void ab initio but merely voidable.  Said provisions of law provide:

Art. 166.  Unless the wife has been declared a non compos mentis or a spendthrift, or is
under civil interdiction or is confined in a leprosarium, the husband cannot alienate or
encumber any real property of the conjugal property without the wife's consent.  If she
refuses unreasonably to give her consent, the court may compel her to grant the same .

. . .

Art. 173.  The wife may, during the marriage, and within ten years from the transaction
questioned, ask the courts for the annulment of any contract of the husband entered into
without her consent, when such consent is required, or any act or contract of the husband which
tends to defraud her or impair her interest in the conjugal partnership property.  Should the wife
fail to exercise this right, she or her heirs, after the dissolution of the marriage, may demand the
value of property fraudulently alienated by the husband.
Hence, it has been held that the contract is valid until the court annuls the same and only upon
an action brought by the wife whose consent was not obtained. [11]  In the present case, despite
respondent's repeated demands for Lorenza to affix her signature on all the pages of the deed of
sale, showing respondent's insistence on enforcing said contract, Lorenza still did not file a case
for annulment of the deed of sale.  It was only when respondent filed a complaint for specific
performance on August 8, 1991 when petitioners brought up Lorenza's alleged lack of consent as

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an affirmative defense.  Thus, if the transaction was indeed entered into without Lorenza's
consent, we find it quite puzzling why for more than three a

nd a half years, Lorenza did absolutely nothing to seek the nullification of the assailed contract.

The foregoing circumstances lead the Court to believe that Lorenza knew  of  the  full  import  of 
the  transaction  between  respondent  and  her husband; and, by affixing her signature on the
deed of sale, she, in effect, signified her consent to the disposition of their conjugal property.

As a rule, the holder of the option, after accepting the promise and before he exercises his
option, is not bound to buy.  He is free either to buy or not to buy later.  In Sanchez v.
Rigos[13] we ruled that in an accepted unilateral... promise to sell, the promissor is not
bound by his promise and may, accordingly, withdraw it, since there may be no valid
contract without a cause or consideration. Pending notice of its withdrawal, his accepted
promise partakes of the nature of an offer to sell which, if... acceded or consented to, results
in a perfected contract of sale.
As a rule, the holder of the option, after accepting the promise and before he exercises his
option, is not bound to buy.  He is free either to buy or not to buy later.  In Sanchez v.
Rigos[13] we ruled that in an accepted unilateral... promise to sell, the promissor is not
bound by his promise and may, accordingly, withdraw it, since there may be no valid
contract without a cause or consideration. Pending notice of its withdrawal, his accepted
promise partakes of the nature of an offer to sell which, if... acceded or consented to, results
in a perfected contract of sale
With regard to the payment of Five Thousand Pesos (P5,000.00), the Court is of the view
that the amount is not earnest money as the term is understood in Article 1482 which
signifies proof of the perfection of the contract of sale, but merely a guarantee that
respondent... is really interested to buy the property.  It is not the giving of earnest money,
but the proof of the concurrence of all the essential elements of the contract of sale which
establishes the existence of a perfected sale.[16] No reservation of... ownership on the part
of Arturo is necessary since, as previously stated, he has never agreed to transfer
ownership of the property to respondent.
Granting for the sake of argument that the RMOA is a contract of sale, the same would still
be void not only for want of consideration and absence of respondent's signature thereon,
but also for lack of Esther's conformity thereto.  Quite glaring is the absence of the...
signature of Esther in the RMOA, which proves that she did not give her consent to the
transaction initiated by Arturo. The husband cannot alienate any real property of the
conjugal partnership without the wife's consent.[17
However, it was the Contract to Sell executed by Esther through her attorney-in-fact which
the Court of Appeals made full use of.  Holding that the contract is valid, the appellate court
explained that while Esther did not authorize Arturo to sell the property, her... execution of
the SPA authorizing her sister to sell the land to respondent clearly shows her intention to
convey her interest in favor of respondent. In effect, the court declared that the lack of
Esther's consent to the sale made by Arturo was cured by her subsequent conveyance... of
her interest in the property through her attorney-in-fact.
We do not share the ruling.

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Granting for the sake of argument that the RMOA is a contract of sale, the same would still
be void not only for want of consideration and absence of respondent's signature thereon,
but also for lack of Esther's conformity thereto.  Quite glaring is the absence of the...
signature of Esther in the RMOA, which proves that she did not give her consent to the
transaction initiated by Arturo. The husband cannot alienate any real property of the
conjugal partnership without the wife's consent.[17]
However, it was the Contract to Sell executed by Esther through her attorney-in-fact which
the Court of Appeals made full use of.  Holding that the contract is valid, the appellate court
explained that while Esther did not authorize Arturo to sell the property, her... execution of
the SPA authorizing her sister to sell the land to respondent clearly shows her intention to
convey her interest in favor of respondent. In effect, the court declared that the lack of
Esther's consent to the sale made by Arturo was cured by her subsequent conveyance... of
her interest in the property through her attorney-in-fact.
We do not share the ruling
As a rule, the holder of the option, after accepting the promise and before he exercises his
option, is not bound to buy.  He is free either to buy or not to buy later.  In Sanchez v.
Rigos[13] we ruled that in an accepted unilateral... promise to sell, the promissor is not
bound by his promise and may, accordingly, withdraw it, since there may be no valid
contract without a cause or consideration. Pending notice of its withdrawal, his accepted
promise partakes of the nature of an offer to sell which, if... acceded or consented to, results
in a perfected contract of sale.
Even conceding for the nonce that respondent had accepted the offer within the period
stated and, as a consequence, a bilateral contract of purchase and sale was perfected, the
outcome would be the same.  To benefit from such situation, respondent would have to pay
or at... least make a valid tender of payment of the price for only then could he exact
compliance with the undertaking of the other party.[14] This respondent failed to do. By his
own admission, he merely informed respondent spouses of his readiness and willingness...
to pay.  The fact that he had set aside a check in the amount of One Million Two Hundred
Ninety Thousand Pesos (P1,290,000.00) representing the balance of the purchase price
could not help his cause.  Settled is the rule that tender of payment must be made in... legal
tender.  A check is not legal tender, and therefore cannot constitute a valid tender of
payment.[15]  Not having made a valid tender of payment, respondent's action for specific
performance must fail.
With regard to the payment of Five Thousand Pesos (P5,000.00), the Court is of the view
that the amount is not earnest money as the term is understood in Article 1482 which
signifies proof of the perfection of the contract of sale, but merely a guarantee that
respondent... is really interested to buy the property.  It is not the giving of earnest money,
but the proof of the concurrence of all the essential elements of the contract of sale which
establishes the existence of a perfected sale.[16] No reservation of... ownership on the part
of Arturo is necessary since, as previously stated, he has never agreed to transfer
ownership of the property to respondent.
Granting for the sake of argument that the RMOA is a contract of sale, the same would still
be void not only for want of consideration and absence of respondent's signature thereon,
but also for lack of Esther's conformity thereto.  Quite glaring is the absence of the...
signature of Esther in the RMOA, which proves that she did not give her consent to the

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transaction initiated by Arturo. The husband cannot alienate any real property of the
conjugal partnership without the wife's consent.[17]
However, it was the Contract to Sell executed by Esther through her attorney-in-fact which
the Court of Appeals made full use of.  Holding that the contract is valid, the appellate court
explained that while Esther did not authorize Arturo to sell the property, her... execution of
the SPA authorizing her sister to sell the land to respondent clearly shows her intention to
convey her interest in favor of respondent. In effect, the court declared that the lack of
Esther's consent to the sale made by Arturo was cured by her subsequent conveyance... of
her interest in the property through her attorney-in-fact.
We do not share the ruling.
The nullity of the RMOA as a contract of sale emanates not only from lack of Esther's
consent thereto but also from want of consideration and absence of respondent's signature
thereon.  Such nullity cannot be obliterated by Esther's subsequent confirmation of the
putative... transaction as expressed in the Contract to Sell.  Under the law, a void contract
cannot be ratified[18] and the action or defense for the declaration of the inexistence of a
contract does not prescribe.[19] A void contract... produces no effect either against or in
favor of anyone it cannot create, modify or extinguish the juridical relation to which it refers.
[20]
True, in the Contract to Sell, Esther made reference to the earlier RMOA executed by Arturo
in favor of respondent.  However, the RMOA which Arturo signed is different from the deed
which Esther executed through her attorney-in-fact.  For one, the first is sought to be...
enforced as a contract of sale while the second is purportedly a contract to sell only.  For
another, the terms and conditions as to the issuance of title and delivery of possession are
divergent.
The congruence of the wills of the spouses is essential for the valid disposition of conjugal
property.     Where the conveyance is contained in the same document which bears the
conformity of both husband and wife, there could be no question on the validity of... the
transaction. But when there are two documents on which the signatures of the spouses
separately appear, textual concordance of the documents is indispensable. Hence, in this
case where the wife's putative consent to the sale of conjugal property appears in a
separate... document which does not, however, contain the same terms and conditions as
in the first document signed by the husband, a valid transaction could not have arisen.
Quite a bit of elucidation on the conjugal partnership of gains is in order.
Arturo and Esther appear to have been married before the effectivity of the Family Code. 
There being no indication that they have adopted a different property regime, their property
relations would automatically be governed by the regime of conjugal partnership of... gains.
[21]
The subject land which had been admittedly acquired during the marriage of the spouses
forms part of their conjugal partnership.[22]
Under the Civil Code, the husband is the administrator of the conjugal partnership.  This
right is clearly granted to him by law.[23] More, the husband is the sole administrator.  The
wife is not entitled as of right to joint... administration.[24]

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The husband, even if he is statutorily designated as administrator of the conjugal
partnership, cannot validly alienate or encumber any real property of the conjugal
partnership without the wife's consent.[25] Similarly, the wife cannot dispose of any...
property belonging to the conjugal partnership without the conformity of the husband. The
law is explicit that the wife cannot bind the conjugal partnership without the husband's
consent, except in cases provided by law.[26]
More significantly, it has been held that prior to the liquidation of the conjugal partnership,
the interest of each spouse in the conjugal assets is inchoate, a mere expectancy, which
constitutes neither a legal nor an equitable estate, and does not ripen into title until it...
appears that there are assets in the community as a result of the liquidation and
settlement.   The interest of each spouse is limited to the net remainder or "remanente
liquido" (haber ganancial) resulting from the liquidation of the affairs... of the partnership
after its dissolution.[27] Thus, the right of the husband or wife to one-half of the conjugal
assets does not vest until the dissolution and liquidation of the conjugal partnership, or after
dissolution of the marriage, when it is finally... determined that, after settlement of conjugal
obligations, there are net assets left which can be divided between the spouses or their
respective heirs.[28]
In not a few cases, we ruled that the sale by the husband of property belonging to the
conjugal partnership without the consent of the wife when there is no showing that the latter
is incapacitated is void ab initio because it is in contravention of the mandatory...
requirements of Article 166 of the Civil Code.[29]  Since Article 166 of the Civil Code
requires the consent of the wife before the husband may alienate or encumber any real
property of the conjugal partnership, it follows that acts or transactions... executed against
this mandatory provision are void except when the law itself authorizes their validity.[30]
Quite recently, in San Juan Structural and Steel Fabricators, Inc. v. Court of Appeals,[31]
we ruled that neither spouse could alienate in favor of another, his or her interest in the
partnership or in any property belonging to it, or ask for... partition of the properties before
the partnership itself had been legally dissolved.  Nonetheless, alienation of the share of
each spouse in the conjugal partnership could be had after separation of property of the
spouses during the marriage had been judicially decreed,... upon their petition for any of the
causes specified in Article 191[32] of the Civil Code in relation to Article 214[33] thereof.
As an exception, the husband may dispose of conjugal property without the wife's consent if
such sale is necessary to answer for conjugal liabilities mentioned in Articles 161 and 162 of
the Civil Code.[34] In Tinitigan v. Tinitigan,... Sr.,[35] the Court ruled that the husband may
sell property belonging to the conjugal partnership even without the consent of the wife if
the sale is necessary to answer for a big conjugal liability which might endanger the family's
economic... standing.  This is one instance where the wife's consent is not required and,
impliedly, no judicial intervention is necessary.
Significantly, the Family Code has introduced some changes particularly on the aspect of
the administration of the conjugal partnership. The new law provides that the administration
of the conjugal partnership is now a joint undertaking of the husband and the wife.  In the...
event that one spouse is incapacitated or otherwise unable to participate in the
administration of the conjugal partnership, the other spouse may assume sole powers of
administration. However, the power of administration does not include the power to dispose
or encumber property... belonging to the conjugal partnership.[36] In all instances, the

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present law specifically requires the written consent of the other spouse, or authority of the
court for the disposition or encumbrance of conjugal partnership property without which,
the... disposition or encumbrance shall be void.[37]
Inescapably, herein petitioner's action for specific performance must fail. Even on the
supposition that the parties only disposed of their respective shares in the property, the
sale, assuming that it exists, is still void for as previously stated, the right of the husband
or... the wife to one-half of the conjugal assets does not vest until the liquidation of the
conjugal partnership.  Nemo dat qui non habet.  No one can give what he has not.