Guzman, Bocaling & Co. vs.

Bonnevie Facts: A 600 sqm parcel of land with two buildings belonging to the Intestate Estate of Jose Reynoso was leased to Raoul and Christopher Bonnevie by the administratix Africa Valdez for a period of one year at a rate of 4K a month starting Aug. 1976. In the contract of lease, there is a stipulation that ³in case the lessor desires or decides to sell the leased property, the lessees shall be given a first priority to purchase the same, all things and considerations being equal. y In Nov. 1976, administratix notified the resp by registered mail that she is selling the premises for 600K less a mortgage loan and giving them 30 days from receipt to exercise their right of first priority. If they would not exercise, she expects them to vacate the prop in March 1977. In Jan 1977, she sent a letter notifying them that in their failure to exercise their right, she has already sold the property. This is the only letter that the Bonnevies received. They informed agent that they are willing to make negotiations and that they refuse the termination of the lease. In March 1977, property formally sold to Guzman, Bocaling & Corp for 400K and the balance of this amount shall be paid when the Bonnevies have already vacated the premises. Administratix demanded that they vacate the premises and pay the rentals for four months. They had a Compromise Agreement that the Bonnevies shall vacate the premises not later than Oct. 1979 but this was set aside. The Bonnevies filed an action for annulment of the sale between REynoso and the GBC and ancellation of the transfer certificate. They also asked that Reynoso be required to sell the property to them under the same terms and conditions agreed upon the Contract of sale. Issue: WON the Bonnevies can file for an action for annulment of the sale between Reynoso and the GBC considering that they are third parties to the contract. Held: Yes. The Contract of Sale was not voidable but rescissible. Under Art 1380 to 1381 (3) of the CC, a contract otherwise valid may nonetheless be subsequently rescinded by reason of injury to third persons, like creditors. The status of creditors could be validly accorded the Bonnevies for they had substantial interest that were prejudiced by the sale of the subject property to the petitioner without recognizing their right of first priority under the Contract of Lease. Tolentino: rescission is a remdy granted by law to the contracting parties and even to third persons, to secure reparation for damages caused to them by a contract, even if this should be valid, by means of the resotoration of things to their condition at the moment prior to the celebration of said contract. It is a relief allowed for the protection of one of the contracting parties and even third persons from all injury and damage the contract may cause, or to protect some incompatible and preferred right created by the contract. Rescission implies a contract which, even if initially valid, produces a lesion or pecuniary damage to someone that justifies its invalidation for reasons of equity. GBC cannot be buyers in good faith bec they had knowledge of the lease of the premise. They were negligent in not inquiring about the terms of the Lease Contract.

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Maneclang v. IAC [G.R. No. L-66575. September 30, 1986.] Second Division, Fernan (J): 4 concur Facts: Adriano Maneclang, et.al., petitioners, filed before the then CFI Pangasinan (Branch XI) a complaint for quieting of title over a certain fishpond located within 4 parcels of land belonging to them situated in Barrio Salomague, Bugallon, Pangasinan, and the annulment of Resolutions 38 and 95 of the Municipal Council of Bugallon, Pangasinan. On 15 August 1975, the trial court dismissed the complaint upon a finding that the body of water traversing the titled properties is a creek constituting a tributary of the Agno River (therefore public in nature and not subject to private appropriation); and held that Resolution 38, ordering an ocular inspection of the Cayangan Creek situated between Barrios Salomague Sur and Salomague Norte, and Resolution 95 authorizing public bidding for the lease of all municipal ferries and fisheries were passed by the members of the Municipal Council of Bugallon, Pangasinan in the exercise of their legislative powers. Maneclang appealed said decision to the IAC, which affirmed the same on 29 April 1983. Hence, the petition for review on certiorari. Before the respondents were able to comment on the petition, the petitioners manifested that for lack of interest on the part of respondent Alfredo Maza, the awardee in the public bidding of the fishpond, as the parties desire to amicably settle the case by submitting to the Court a Compromise Agreement praying that judgment be rendered recognizing the ownership of the petitioners over the land the body of water found within their titled properties. The Supreme Court dismissed the petition for lack of merit, and set aside the Compromise Agreement and declare the same null and void for being contrary to law and public policy. 1. Stipulations null and void for being contrary to law and public policy The stipulations contained in the Compromise Agreement partake of the nature of an adjudication of ownership of the fishpond in dispute, which was originally a creek forming a tributary of the Agno River. A creek, defined as a recess or arm extending from a river and participating in the ebb and flow of the sea, is a property belonging to the public domain which is not susceptible to private appropriation and acquisitive prescription (Mercado vs. Municipal President of Macabebe), and as a public water, it cannot be registered under the Torrens System in the name of any individual (Diego v. CA; Mangaldan v. Manaoag) and considering further that neither the mere construction of irrigation dikes by the National Irrigation Administration which prevented the water from flowing in and out of the subject fishpond, nor its conversion into a fishpond, alter or change the nature of the creek as a property of the public domain. The Compromise Agreement, thus, is null and void and of no legal effect, the same being contrary to law and public policy. 2. Municipal council authorized to pass laws dealing with its municipal waters The Municipality of Bugallon, acting thru its duly-constituted municipal council is clothed with authority to pass, as it did the two resolutions dealing with its municipal waters. 3. Publication a constructive notice to the whole world; due process followed Petitioners were not deprived of their right to due process as mere publication of the notice of the public bidding suffices as a constructive notice to the whole world.