CASE NO.

44 - VALENTINA CLEMENTE VS CA AND ANNIE SHOTWELL JALANDOON,

ET. AL
GR NO. 175483; October 14, 2015

TOPIC: SIMULATED CONTRACTS

FACTS: Adela, the grandmother of herein respondents, owned three (3) adjoining parcels of land in
Quezon City. During her lifetime, Adela allowed her children the use and possession of the Properties
and its improvements.
However, before Adela went to the US, she executed a deed of absolute sale over Lots 32 and
34, and their improvements, in favor of petitioner, bearing on its face the price of 250,000.00. On the
same day, Adela also executed a special power of attorney (SPA) in favor of petitioner. Petitioner’s
authority under the SPA included the power to administer, take charge and manage, for Adela’s
benefit, the Properties and all her other real and personal properties in the Philippines. The deed of
absolute sale and the SPA were notarized on the same day by Atty. Dionilo D. Marfil in Quezon City.
Adela and petitioner left for the United States. 15 When petitioner returned to the Philippines,
she registered the sale over Lots 32 and 34 with the Registry of Deeds. After a year Adela died in the
US and was succeeded by her 4 children.
Soon thereafter, petitioner sought to eject Annie and Carlos Sr., who were then staying on the
Properties. Only then did Annie and Carlos Sr. learn of the transfer of titles to petitioner. Respondents
then filed a complaint for reconveyance of property against petitioner as they alleged that no
consideration was given by petitioner to Adela in exchange for the simulated conveyances.
RTC ruled in favor of respondents. CA affirmed.
ISSUE: WON CA ERRED IN RULING THAT THE DEED OF ABSOLUTE SALE IS
SIMULATED AND WITHOUT CONSIDERATION, HENCE VOID AND INEXISTENT
RULING: NO. The deed of Absolute Sale between petitioner and the late Adela Shotwell
are NULL AND VOID for lack of consent and consideration.

The Civil Code defines a contract as a meeting of minds between two persons whereby one
binds himself, with respect to the other, to give something or to render some service. Article 1318
provides that there is no contract unless the following requisites concur:

(1) Consent of the contracting parties;

(2) Object certain which is the subject matter of the contract; and

(3) Cause of the obligation which is established.

All these elements must be present to constitute a valid contract; the absence of one renders
the contract void. As one of the essential elements, consent when wanting makes the contract non-
existent. Consent is manifested by the meeting of the offer and the acceptance of the thing and the
cause, which are to constitute the contract. A contract of sale is perfected at the moment there is a
meeting of the minds upon the thing that is the object of the contract, and upon the price.
 Here, there was no valid contract of sale between petitioner and Adela because their consent
was absent. The contract of sale was a mere simulation.

Simulation takes place when the parties do not really want the contract, they have executed to
produce the legal effects expressed by its wordings. Article 1345 of the Civil Code provides that the
simulation of a contract may either be absolute or relative. The former takes place when the parties do
not intend to be bound at all; the latter, when the parties conceal their true agreement.
In ruling that the Deeds of Absolute Sale were absolutely simulated, the lower courts
considered the totality of the prior, contemporaneous and subsequent acts of the parties. Petitioner’s
letter to her cousin Dennis dated July 3, 1989 also sufficiently establishes that Adela retained control
over the Properties, even after the execution of the Deeds of Absolute Sale. Petitioner herself admitted
that she was only following the orders of Adela, and that she has no claim over the Properties.
Clearly, the submission of petitioner to the orders of Adela does not only show that the latter
retained dominion over the Properties, but also that petitioner did not exercise acts of ownership over
it. If at all, her actions only affirm the conclusion that she was merely an administratrix of the
Properties by virtue of the SPA.
PETITION IS DENIED.
 CASE NO. 34 – MANDARIN VILLA, INC. VS. CA ANF CLODUALDO DE JESUS
GR NO. 175483; October 14, 2015
TOPIC: STIPULATION POUR AUTRI
FACTS: Private respondent, Clodualdo de Jesus, a practicing lawyer and businessman, hosted a
dinner for his friends at the petitioner's restaurant, the Mandarin Villa Seafoods Village Greenhills,
Mandaluyong City. After dinner the waiter handed to him the bill in the amount of P2,658.50. Private
respondent offered to pay the bill through his credit card issued by Philippine Commercial Credit
Card Inc. (BANKARD). This card was accepted by the waiter who immediately proceeded to the
restaurant's cashier for card verification.
Ten minutes later, however, the waiter returned and audibly informed private respondent that
his credit card had expired. Private respondent remonstrated that said credit card had yet to expire on
September 1990, as embossed on its face. The waiter was unmoved, thus, private respondent and two
of his guests approached the restaurant's cashier who again passed the credit card over the
verification computer. The same information was produced, i.e., CARD EXPIRED.

Thereupon, private respondent left the restaurant and got his BPI Express Credit Card from his
car and offered it to pay their bill. This was accepted and honored by the cashier after
verification. Petitioner and his companions left afterwards.

The incident triggered the filing of a suit for damages by private respondent.

RTC ruled in favor of respondent and awarded moral, exemplary damages and attorneys fees;
CA modified RTC’s decision absolving BANKARD of any responsibility for damages and finding
petitioner as the sole responsible for damages in favor of appellee.
ISSUE: WON PETITIONER IS BOUND TO ACCEPT PAYMENT BY MEANS OF CREDIT
CARD;
RULING: YES, by virtue of stipulation pour autri.
In an agreement entered into by Mandarin Villa with Bankard, it provides that it shall honor
validly issues PCCI credit cards presented by their corresponding holder in the purchase of goods
and/or services supplied by it provided that the card expiration date has not elapsed and the card
number does not appear on the latest cancellation bulletin of lost, suspended and canceled PCCCI
credit cards and, no signs of tampering, alterations or irregularities appear on the face of the credit
card.
While private respondent, may not be a party to the said agreement, the above-quoted
stipulation conferred a favor upon the private respondent, a holder of credit card validly issued by
BANKARD. This stipulation is a stipulation pour autri and under Article 1311 of the Civil Code private
respondent may demand its fulfillment provided he communicated his acceptance to the petitioner
before its revocation.8 In this case, private respondent's offer to pay by means of his BANKARD credit
card constitutes not only an acceptance of the said stipulation but also an explicit communication of
his acceptance to the obligor.

PETITION DENIED.
 CASE NO. 35 – BPI EXPRESS CARD CORPORATION VS. MA. ANTONIA ARMOVIT
GR NO 163654; OCTOBER 8, 2014
TOPIC: CONTRACTUAL RELATIONSHIP
FACTS:Ma. Antonia Armovit, herein respondent, treated her British friends to lunch at a restaurant.
She handed to the waiter her BPI Express Credit Card to settle the bill but to her astonishment, the
waiter returned and informed that her card had been cancelled upon verification with the BPI Express
Credit (BPI). Armoit called BPI and the latter told her that her credit card had been summarily
cancelled for failure to pay her outstanding obligations. She denied having defaulted on her payments
and demanded for compensation for the shame and embarrassment she suffered. BPI claimed that it
sends Armovit a telegraphic message requesting her to pay her arrears for three consecutive months.
As she did not comply with the request, it temporarily suspended her credit card with due notice to
her. BPI further claimed that Armovit failed to submit the required application form in order to
reactivate her credit card privileges.
Later on, Armovit received a telegraphic message from BPI apologizing for its error of
inadvertently including her credit card in Caution List sent to its affiliated merchants. Armovit sued
BPI for damages insisting that she had been a credit card incident. RTC ordered BPI to pay Armovit
moral, exemplary and attorneys fees for each in the amount of 10k which CA affirmed.
ISSUE: WON THERE IS CONTRACTUAL RELATIONSHIP BETWEEN CREDIT CARD
ISSUER AND THE CREDIT CARD HOLDER;
RULING: Yes, the relationship between the credit card issuer and the credit card holder is a
contractual one that is governed by the terms and conditions found in the card membership
agreement. Such terms and conditions constitute the law between the parties. In case of their breach,
moral damages may be recovered where the defendant is shown to have acted fraudulently or in bad
faith.
The Terms and Conditions Governing the Issuance and Use of the BPI Express Credit Card22
printed on the credit card application form spelled out the terms and conditions of the contract
between BPI Express Credit and its card holders, including Armovit. Such terms and conditions
determined the rights and obligations of the parties.23 Yet, a review of such terms and conditions did
not reveal that Armovit needed to submit her new application as the antecedent condition for her
credit card to be taken out of the list of suspended cards.
 CASE NO. 36 – ECE REALTY AND DEVELOPMENT, INC. VS. RACHEL MANDAP
GR NO 196182; SEPTEMBER 1, 2014
TOPIC:
FACTS:
ISSUE:
RULING: