CASE DOCTRINES

Case no 1. BAYLA VS SILANG TRAFFIC

Corporations; Distinction between Subscription to Capital Stock and
Contract of Sale of Shares of Stock.—Eight years after the corporation was
organized, it entered into an "agreement for installment sale" of its shares of stock
with various individuals. After the latter had paid several instalments on account of
the purchase price agreed upon, and upon default in the payment of the succeeding
installment, the board of directors of the corporation passed a resolution
authorizing the refund of the amounts paid and the reversion of the shares of stock
to the corporation. Held: That such resolution is valid because the contract was not
one of subscription but of purchase and sale. In some particulars, the rules
governing subscriptions and sales of shares are different. For instance, the
provisions of our Corporation Law regarding calls for unpaid subscriptions and
assessment of stock (sections 37-60) do not apply to a purchase of stock. Likewise
the rule that the corporation has no legal capacity to release an original subscriber
to its capital stock from the obligation to pay for his shares, is inapplicable to a
contract of purchase of shares.
Whether a particular contract is a subscription or a sale of stock is a matter of
construction and depends upon its terms and the intention of the parties. In Salmon,
Dexter & Co. vs. Unson, 47 Phil. 649, it was held that a subscription to stock in an
existing corporation is, as between the subscriber and the corporation, simply a
contract of purchase and sale. A subscription, properly speaking, is the mutual
agreement of the subscribers to take and pay for the stock of a corporation, while a
purchase is an independent agreement between the individual and the corporation
to buy shares of stock from it at a stipulated price.
Obligations and Contracts; Necessity of Demand upon Default as Requisite to
Forfeiture.—The contract here involved provides that if the purchaser fails to pay
any of the instalments when due, the shares of stock which are the object of the
sale are to revert to the seller and the payments already made are to be forfeited in
favor of said seller. The seller, through its board of directors, annulled a previous
resolution rescinding the sale and declared the forfeiture of the payments already
made and the reversion of the shares of stock to the corporation. Held: That such
forfeiture was ineffective. The contract did not expressly provide that the failure of
the purchaser to pay any instalment would give rise to forfeiture and cancellation
without the necessity of any demand from the seller; and under article 1100 of the
Civil Code persons obliged to deliver or do something are not in default until the
moment the creditor demands of them judicially or extrajudicially the fulfilment of
their obligation, unless (1) the obligation or the law expressly provides that
demand shall not be necessary in order that default may arise, or (2) by reason of
the nature and circumstances of the obligation it shall appear that the designation
of the time at which the thing was to be delivered or the service rendered was the
principal inducement to the creation of the obligation.
CASE NO 2. CAGAYAN FISHING DEVELOPMENT VS SANDIKO
CORPORATIONS; TRANSFER MADE TO A NON-EXISTENT
CORPORATION; JURIDICAL CAPACITY TO ENTER INTO A
CONTRACT.—The transfer made by T to the C, F. D. Co,, Inc., was effected on
May 31, 1930 and the actual incorporation of said company was effected later on
October 22, 1930. In other words, the transfer was made almost five months before
the incorporation of the company. Unquestionably, a duly organized corporation
has the power to purchase and hold such real property as the purposes for which
such corporation was formed may permit and for this purpose may enter into such
contracts as may be necessary. But before a corporation may be said to be lawfully
organized, many things have to be done. Among other things, the law requires the
filing of articles of incorporation. Although there is a presumption that all the
requirements of law have been complied with in the case before us it cannot be
denied that the plaintiff was not yet incorporated when it entered into the contract
of sale. The contract itself referred to the plaintiff as "una sociedad en vías de
incorporación." It was not even a de facto corporation at the time. Not being in
legal existence then, it did not possess juridical capacity to enter into the contract.
Corporations are creatures of the law, and can only come into existence in the
manner prescribed by law. General laws authorizing the formation of corporations
are general offers to any persons who may bring themselves within their
provisions; and if conditions precedent are prescribed in the statute, or certain acts
are required to be done, they are terms of the offer, and must be complied with
substantially before legal corporate existence can be acquired. That a corporation
should have a full and complete organization and existence as an entity before it
can enter into any kind' of a contract or transact any business, would seem to be
self-evident.
A corporation, until organized, has no life and, therefore, no faculties. It is, as it
were, a child in ventre sa mere. This is not saying that under no circumstances may
the acts of promoters of a corporation be ratified by the corporation if and when
subsequently organized. There are, of course, exceptions, but under the peculiar
facts and circumstances of the present case the doctrine of ratification should not
be extended because to do so would result in injustice or fraud to the candid and
unwary.
CASE NO 3. HALL VS PICCIO
1.CORPORATION "DE FACTO"; DISSOLUTION BY SUIT OF
STOCKHOLDERS; JURISDICTION OF COURT.—An entity whose
certificate of incorporation had not been obtained may be terminated in a private
suit for its dissolution between stockholders, without 'the intervention of the state.
The question as to the right of minority stockholders to sue for dissolution does not
affect the court's jurisdiction, and is a matter for decision by the judge, subject to
review on appeal by the aggrieved party at the proper time.
2.ID.; RIGHTS OF.—Persons acting as corporation may not claim rights of "de
facto" corporation if they have not obtained certificate of incorporation. Hall vs.
Piccio, 86 Phil. 603, No. L-2598 June 29, 1950
CASE NO 4. ALBERT VS UNIVERSITY PUBLISHING
Corporations; Principle of corporation by estoppel; Not invokable by one who
misrepresented corporation as duly organized against his victim.—One who
has induced another to act upon his willful misrepresentation that a corporation
was duly organized and existing under the law, cannot thereafter set up against his
victim the principle of corporation by estoppel.
Person acting for corporation with no valid existence is personally liable for
contracts entered into as such agent.—A person acting or purporting to act on
behalf of a corporation which has no valid existence assumes such privileges and
obligations and becomes personally liable for contracts entered into or for other
acts performed as such agent.
Parties to Action; Suit against corporation with no valid existence; Real
defendant is person who has control of its proceedings.—In a suit against a
corporation with no valid existence the person who had and exercised the rights to
control the proceedings, to make defense, to adduce and cross-examine witnesses,
and to appeal from a decision, is the real defendant, and .the enforcement of a
judgment against the corporation upon him is substantial observance of due
process of law.
Real party in interest; Person who acted as representative of non-existent
principal and who reaped benefits from its contracts.—A person who acted as
representative of a non-existent principal, who reaped the benefits resulting from a
contract entered into by him as such, and who violated its terms, thereby
precipitating a suit, is the real party to the contract sued upon.
Due Process of Law; Purpose is to secure justice and not to sacrifice it by
technicalities.—The “due process” clause of the Constitution is designed to secure
justice as a living reality, not to sacrifice it by paying undue homage to formality.
For substance must prevail over form.
CASE NO. 5 LOZANO VS DE LOS SANTOS
Securities and Exchange Commission; Jurisdiction; The jurisdiction of the
Securities and Exchange Commission is determined by a concurrence of two
elements: (1) the status or relationship of the parties; and (2) the nature of the
question that is the subject of their controversy.—The grant of jurisdiction to the
SEC must be viewed in the light of its nature and function under the law. This
jurisdiction is determined by a concurrence of two elements: (1) the status or
relationship of the parties; and (2) the nature of the question that is the subject of
their controversy.
The principal function of the Securities and Exchange Commission is the
supervision and control of corporations, partnerships and associations with
the end in view that investments in these entities may be encouraged and
protected, and their activities pursued for the promotion of economic
development.—The first element requires that the controversy must arise out of
intracorporate or partnership relations between and among stockholders, members,
or associates; between any or all of them and the corporation, partnership or
association of which they are stockholders, members or associates, respectively;
and between such corporation, partnership or association and the State in so far as
it concerns their individual franchises. The second element requires that the dispute
among the parties be intrinsically connected with the regulation of the corporation,
partnership or association or deal with the internal affairs of the corporation,
partnership or association. After all, the principal function of the SEC is the
supervision and control of corporations, partnerships and associations with the end
in view that investments in these entities may be encouraged and protected, and
their activities pursued for the promotion of economic development.
There is no intracorporate nor partnership relation between two jeepney
drivers’ and operators’ associations whose plan to consolidate into a single
common association is still a proposal—consolidation becomes effective not
upon mere agreement of the members but only upon issuance of the certificate
of consolidation by the SEC.—There is no intracorporate nor partnership relation
between petitioner and private respondent. The controversy between them arose
out of their plan to consolidate their respective jeepney drivers’ and operators’
associations into a single common association. This unified association was,
however, still a proposal. It had not been approved by the SEC, neither had its
officers and members submitted their articles of consolidation in accordance with
Sections 78 and 79 of the Corporation Code. Consolidation becomes effective not
upon mere agreement of the members but only upon issuance of the certificate of
consolidation by the SEC. When the SEC, upon processing and examining the
articles of consolidation, is satisfied that the consolidation of the corporations is
not inconsistent with the provisions of the Corporation Code and existing laws, it
issues a certificate of consolidation which makes the reorganization official. The
new consolidated corporation comes into existence and the constituent
corporations dissolve and cease to exist.
The SEC has no jurisdiction over a dispute between members of separate and
distinct associations.—The KAMAJ-DA and SAMAJODA to which petitioner
and private respondent belong are duly registered with the SEC, but these
associations are two separate entities. The dispute between petitioner and private
respondent is not within the KAMAJDA nor the SAMAJODA. It is between
members of separate and distinct associations. Petitioner and private respondent
have no intracorporate relation much less do they have an intracorporate dispute.
The SEC therefore has no jurisdiction over the complaint.
Corporation Law; Doctrine of Corporation by Estoppel; The doctrine of
corporation by estoppel cannot override jurisdictional requirements—
jurisdiction is fixed by law and cannot be acquired through or waived,
enlarged or diminished by, any act or omission of the parties, and neither can
it be conferred by the acquiescence of the court.—The doctrine of corporation
by estoppel advanced by private respondent cannot override jurisdictional
requirements. Jurisdiction is fixed by law and is not subject to the agreement of the
parties. It cannot be acquired through or waived, enlarged or diminished by, any
act or omission of the parties, neither can it be conferred by the acquiescence of the
court.
Corporation by estoppel is founded on principles of equity and is designed to
prevent injustice and unfairness. It applies when persons assume to form a
corporation and exercise corporate functions and enter into business relations with
third persons. Where there is no third person involved and the conflict arises only
among those assuming the form of a corporation, who therefore know that it has
not been registered, there is no corporation by estoppel.
CASE NO 6. PIROVANO VS DELA RAMA
CORPORATIONS; DONATIONS; DONATION GlVEN "OUT OF
GRATITUDE FOR SERVICES RENDERED" Is REMUNERATIVE. —A
donation given by the corporation to the minor children of its late president
because he "was to a large extent responsible for the rapid and very successful
development and expansion of the activities of this company" is remunerative in
nature in contemplation of law.
PERFECTED DONATION CAN ONLY BE RESCINDED ON LEGAL
GROUNDS.—Where the donation made by the corporation has not only been
granted in several resolutions duly adopted by its board of directors but also it has
been formally ratified by its stockholders, with the concurrence of its only creditor,
and accepted by the donee, the donation -has reached the stage of perfection which
is valid and binding upon the corporation and as such cannot be rescinded unless
there exist legal grounds for doing so.
DONATION DISTINGUISHED FROM GRATUITY.—While a donation may
technically be different from a gratuity, in substance they are the same. They are
even similar to a pension. Thus, it was said that "A pension is a gratuity only when
it is granted for services previously rendered, and which at the time they were
rendered gave rise to no legal obligation.
POWERS OF A CORPORATION; ACTS PERFORMED WITHIN THE
POWERS GRANTED ARE NOT "ULTRA VIRES".—Where the corporation
was given broad and almost unlimited powers to carry out the purposes for which
it was organized among them, to aid in any other manner any person in the affairs
and prosperity of whom it has a lawful interest, a donation made to the heirs of its
late president in recognition of the valuable services rendered by the latter which
had immensely contributed to its growth, comes within this broad grant of power
and can not be considered an ultra vires act.
"ULTRA VIRES" ILLEGAL ACTS DISTINGUISHED; EFFECT OF
RATIFICATION BY STOCKHOLDERS.—Illegal acts of a corporation
contemplate the doing of an act which is contrary to law, morals, or public order,
or contravene some rules of public policy or public duty, and are, like similar
transactions between individuals, void. They cannot serve as basis of a court
action, nor acquire validity by performance, ratification, or estoppel. On the other
hand, ultra vires acts or those which are not illegal and void ab initio but are
merely within the scope of the article of incorporation, are merely voidable and
may become binding and enforceable when ratified by the stockholders.
"ULTRA VIRES" ACTS; RATIFICATION BY STOCKHOLDERS OF
"ULTRA VIRES" ACTS CURES INFIRMITY.—The ratification by the
stockholders of an ultra vires act which is not illegal cures the infirmity of the
corporate act and makes it perfectly valid and enforceable, specially so if it is not
merely executory but executed and consummated and no creditors are prejudiced
thereby.
ATTORNEY'S FEES, WHEN MAY BE AWARDED AS DAMAGES.—When
the defendant's act or omission has compelled the plaintiff to litigate with third
persons or to incur expenses to protect his interest, attorney's fees may be awarded
as damages (Article 2208, paragraph 2, of the new Civil Code).
CASE NO 7. CRISOLOGO JOSE VS CA
Negotiable Instruments Law; Corporations; Rule that an accommodation
party liable on the instrument to a holder for value does not apply to
corporations which are accommodation parties; Reasons.—The aforequoted
provision of the Negotiable Instruments Law which holds an accommodation party
liable on the instrument to a holder for value, although such holder at the time of
taking the instrument knew him to be only an accommodation party, does not
include nor apply to corporations which are accommodation parties. This is
because the issue or indorsement of negotiable paper by a corporation without
consideration and for the accommodation of another is ultra vires. Hence, one who
has taken the instrument with knowledge of the accommodation nature thereof
cannot recover against a corporation where it is only an accommodation party. If
the form of the instrument, or the nature of the transaction, is such as to charge the
indorsee with knowledge that the issue or indorsement of the instrument by the
corporation is for the accommodation of another, he cannot recover against the
corporation thereon.
Exception; An officer or agent of a corporation shall have the power to
execute or indorse a negotiable paper in the name of the corporation for
accommodation only if specifically authorized to do so; Personal liability of
signatories in the instrument.—By way of exception, an officer or agent of a
corporation shall have the power to execute or indorse a negotiable paper in the
name of the corporation for the accommodation of a third person only if
specifically authorized to do so. Corollarily, corporate officers, such as the
president and vice-president, have no power to execute for mere accommodation a
negotiable instrument of the corporation for their individual debts or transactions
arising from or in relation to matters in which the corporation has no legitimate
concern. Since such accommodation paper cannot thus be enforced against the
corporation, especially since it is not involved in any aspect of the corporate
business or operations, the inescapable conclusion in law and in logic is that the
signatories thereof shall be personally liable therefor, as well as the consequences
arising from their acts in connection therewith.
Consignation; Payment; Remedy of consignation, proper; Case at bar; Effects
of consignation.—We interpose the caveat,however, that by holding that the
remedy of consignation is proper under the given circumstances, we do not thereby
rule that all the operative facts for consignation which would produce the effect of
payment are present in this case. Those are factual issues that are not clear in the
records before us and which are for the Regional Trial Court of Quezon City to
ascertain in Civil Case No. Q-33160, for which reason it has advisedly been
directed by respondent court to give due course to the complaint for consignation,
and which would be subject to such issues or claims as may be raised by defendant
and the counterclaim filed therein which is hereby ordered similarly revived.

Checks; B.P. 22; Presumptive rule to determine whether or not there was
insufficiency of funds in or credit with the drawee bank.—These are aside the
considerations that the disputed period involved in the criminal case is only a
presumptive rule, juris tantum at that, to determine whether or not there was
knowledge of insufficiency of funds in or credit with the drawee bank; that
payment of civil liability is not a mode for extinguishment of criminal liability; and
that the requisite quantum of evidence in the two types of cases are not the same.
Case No. 8 PRIMEWHITE CEMENT VS INTERMEDIATE APPELATE
COURT
Corporation Law; Contracts; When contracts signed by corporate officers
binding on corporation.—Under the Corporation Law, which was then in force at
the time this case arose, as well as under the present Corporation Code, all
corporate powers shall be exercised by the Board of Directors, except as otherwise
provided by law. Although it cannot completely abdicate its power and
responsibility to act for the juridical entity, the Board may expressly delegate
specific powers to its President or any of its officers. In the absence of such
express delegation, a contract entered into by its President, on behalf of the
corporation, may still bind the corporation if the board should ratify the same
expressly or impliedly. Implied ratification may take various forms—like silence
or acquiescence; by acts showing approval or adoption of the contract; or by
acceptance and retention of benefits flowing therefrom. Furthermore, even in the
absence of express or implied authority by ratification, the President as such may,
as a general rule, bind the corporation by a contract in the ordinary course of
business, provided the same is reasonable under the circumstances. These rules are
basic, but are all general and thus quite flexible. They apply where the President or
other officer, purportedly acting for the corporation, is dealing with a third person,
i.e., a person outside the corporation.
A board director or other corporate officer cannot readily enter into a
contract with his own corporation; Exceptions.—A director of a corporation
holds a position of trust and as such, he owes a duty of loyalty to his corporation.
In case his interests conflict with those of the corporation, he cannot sacrifice the
latter to his own advantage and benefit. As corporate managers, directors are
committed to seek the maximum amount of profits for the corporation. This trust
relationship "is not a matter of statutory or technical law. It springs from the fact
that directors have the control and guidance of corporate affairs and property and
hence of the property interests of the stockholders."
On the other hand, a director's contract with his corporation is not in all instances
void or voidable. If the contract is fair and reasonable under the circumstances, it
may be ratified by the stockholders provided a full disclosure of his adverse
interest is made.
Granting arguendo that the "dealership agreement" involved here would be valid
and enforceable if entered into with a person other than a director or officer of the
corporation, the fact that the other party to the contract was a Director and Auditor
of the petitioner corporation changes the whole situation. First of all, We believe
that the contract was neither fair nor reasonable. The "dealership agreement"
entered into in July, 1969, was to sell and supply to respondent Te 20,000 bags of
white cement per month, for five years starting September, 1970, at the fixed price
of P9.70 per bag. Respondent Te is a businessman himself and must have known,
or at least must be presumed to know, that at that time, prices of commodities in
general, and white cement in particular, were not stable and were expected to rise.
At the time of the contract, petitioner corporation had not even commenced the
manufacture of white cement, the reason why delivery was not to begin until 14
months later. He must have known that within that period of six years, there would
be a considerable rise in the price of white cement. In fact, respondent Te's own
Memorandum shows that in September, 1970, the price per bag was P 14.50, and
by the middle of 1975, it was already P37.50 per bag. Despite this, no provision
was made in the "dealership agreement" to allow for an increase in price mutually
acceptable to the parties. Instead, the price was pegged at P9.70 per bag for the
whole five years of the contract. Fairness on his part as a director of the
corporation from whom he was to buy the cement, would require such a provision.
In fact, this unfairness in the contract is also a basis which renders a contract
entered into by the President, without authority from the Board of Directors, void
or voidable, although it may have been in the ordinary course of business. We
believe that the fixed price of P9.70 per bag for a period of five years was not fair
and reasonable. Respondent Te, himself, when he subsequently entered into
contracts to resell the cement to his "new dealers" Henry Wee and Gaudencio
Galang stipulated as follows: The price of white cement shall be mutually
determined by us but in no case shall the same be less than P14.00 per bag (94
Ibs)."
Damages; No moral damages for lost goodwill are awardable to a corporation.
—As a result of this action which has been proven to be without legal basis,
petitioner corporation's reputation and goodwill have been prejudiced. However,
there can be no award for moral damages under Article 2217 and succeeding
articles on Section 1 of Chapter 3 of Title XVIII of the Civil Code in favor of a
corporation.
CASE NO 9. YAO KA SIN TRADING VS CA
Actions; A sole proprietorship does not have legal capacity to sue. Its owner
shall be deemed the plaintiff.—The complaint then should have been amended to
implead Yao Ka Sin as plaintiff in substitution of Yao Ka Sin Trading. However, it
is now too late in the history of this case to dismiss this petition and, in effect,
nullify all proceedings had before the trial court and the respondent Court on the
sole ground of petitioner's lack of capacity to sue, Considering that private
respondent did not pursue this issue before the respondent Court and this Court;
that, as We held in Juasing, the defect is merely formal and not substantial, and an
amendment to cure such defect is expressly authorized by Section 4, Rule 10 of the
Rules of Court which provides that "[a] defect in the designation of the parties may
be summarily corrected at any stage of the action provided no prejudice is caused
thereby to the adverse party;" and that "[a] sole proprietorship does not, of course,
possess any juridical personality separate and apart from the personality of the
owner of the enterprise and the personality of the persons acting in the name of
such proprietorship," We hold and declare that Yao Ka Sin should be deemed as
the plaintiff in Civil Case No. 5064 and the petitioner in the instant case.
Corporations; Contracts; A contract signed by the President and Board
Chairman without authority from the Board of Directors is void; Exceptions.
—While there can be no question that Mr, Maglana was an officer—the President
and Chairman—of private respondent corporation at the time he signed Exhibit
"A", the above provisions of said private respondent's By-Laws do not in any way
confer upon the President the authority to enter into contracts for the corporation
independently of the Board of Directors. That power is exclusively lodged in the
latter. Nevertheless, to expedite or facilitate the execution of the contract, only the
President—and not all the members of the Board, or so much thereof as are
required for the act—shall sign it for the corporation. This is the import of the
words through the president in Exhibit "8-A" and the clear intent of the power of
the chairman "to execute and sign for and in behalf of the corporation all contracts
and agreements which the corporation may enter into" in Exhibit "1-1". Both
powers presuppose a prior act of the corporation exercised through the Board of
Directors. No greater power can be implied from such express, but limited,
delegated authority. Neither can it be logically claimed that any power greater than
that expressly conferred is inherent in Mr. Maglana's position as president and
chairman of the corporation.
Petitioner's last refuge then is his alternative proposition, namely, that private
respondent had clothed Mr. Maglana with the apparent power to act for it and had
caused persons dealing with it to believe that he was conferred with such power.
The rule is of course settled that "[a]lthough an officer or agent acts without, or in
excess of, his actual authority if he acts within the scope of an apparent authority
with which the corporation has clothed him by holding him out or permitting him
to appear as having such authority, the corporation is bound thereby in favor of a
person who deals with him in good faith in reliance on such apparent authority, as
where an officer is allowed to exercise a particular authority with respect to the
business, or a particular branch of it, continuously and publicly, for a considerable
time." Also, "if a private corporation intentionally or negligently clothes its officers
or agents with apparent power to perform acts for it, the corporation will be
estopped to deny that such apparant authority is real, as to innocent third persons
dealing in good faith with such officers or agents." This "apparent authority may
result from (1) the general manner by which the corporation holds out an officer or
agent as having power to act or, in other words, the apparent authority with which
it clothes him to act in general, or (2) the acquiescence in his acts of a particular
nature, with actual or constructive knowledge thereof, whether within or without
the scope of his ordinary powers."
Petitioner failed to prove President of herein corporation clothe with apparent
authority to constract with it.—lt was incumbent upon the petitioner to prove
that indeed the private respondent had clothed Mr. Maglana with the apparent
power to execute Exhibit "A" or any similar contract. This could have been easily
done by evidence of similar acts executed either in its favor or in favor of other
parties. Petitioner miserably failed to do that. Upon the other hand, private
respondent's evidence overwhelmingly shows that no contract can be signed by the
president without first being approved by the Board of Directors; such approval
may only be given after the contract passes through, at least, the comptroller, who
is the NIDC representative, and the legal counsel.
Acceptance of goods and receipt therefor without protest, resulted in a new
transaction.—The second ground is based on a wrong premise. It assumes,
contrary to Our conclusion above, that Exhibit "A" is a valid contract binding upon
the private respondent. It was effectively disapproved and rejected by the Board of
Directors which, at the same time, considered the amount of P243,000.00 received
by Maglana as payment for 10,000 bags of white cement, treated as an entirely
different contract, and forthwith notified petitioner of its decision that "If within
ten (10) days from date hereof we will not hear from you but you will withdraw
cement at P24.30 per bag from our plant, then we will deposit your check of
P243,000.00 dated June 7, 1973 issued by the Producers Bank of the Philippines,
per instruction of the Board." Petitioner received a copy of this notification and
thereafter accepted without any protest the Delivery Receipt covering the 10,000
bags and the Official Receipt for the P243,000.00. The respondent Court thus
correctly ruled that petitioner had in fact agreed to a new transaction involving
only 10,000 bags of white cement.
Option given without consideration is void.—The third ground must likewise
fail. Exhibit "A" being unenforceable, the option to renew it would have no leg to
stand on. The river cannot rise higher than its source. In any event, the option
granted in this case is without any consideration. Article 1324 of the Civil Code
expressly provides that: "When the offerer has allowed the offeree a certain period
to accept, the offer may be withdrawn at any time before acceptance by
communicating such withdrawal, except when the option is founded upon a
consideration, as something paid or promised."
Actions; Sec. 8, Rule 8 of the Rules of Court on how to contest genuineness of
a document does not apply to a person not privy thereto.—lt is clear that the
petitioner is not a party to any of the documents attached to the private
respondent's Answer. Thus, the above quoted rule is not applicable. While the
respondent Court erred in holding otherwise, the challenged decision must,
nevertheless, stand in view of the above disquisitions on the first to the third
grounds of the petition Yao Ka Sin Trading vs. Court of Appeals, 209 SCRA 763,
G.R, No. 53820 June 15, 1992