Emiliano Valdez v Leon Sibal

G.R. No. L-21178.

March 18, 1924

ART. 1270:

Condonation or remission is essentially gratuitous, and requires the acceptance by the

obligor. It may be made expressly or impliedly.

One and other kinds shall be subject to the rules which govern inofficious donations.
Express condonation shall, furthermore, comply with the forms of donation.

FACTS:

The parties had stipulated a contract that Valdez will pay Sibal P 12,833.30 for the sugar
that he may produce in 1920-1921. Sibal promised to make a weekly delivery of the sugar not
less than 1, 500 piculs until March of 1921. In case of breach of contract, Sibal will pay Valdez
all damages as may be caused him, P4 for each picul that he may fail to deliver, and P2,000 in
case of litigation. They also executed two documents that will secure the payment of P12,883.30
on December 31, 1920, with interest rate of 12 ½ per annum, plus 25 % for attorney's fees and
expenses of collection and, mortgaged by the defendant in the first document all the sugar-cane
growing in his estate in Tarlac, and in a land leased by him, in said barrio, and in the second
document, a parcel of land in the sitio of Pascual of the barrio. These documents are registered as
a chattel mortgage.

On the records, Valdez paid P17,321.05 for sugar to be obtained from the crop covered by
the agreement. To be remembered, Sibal is bound deliver not less than 1,500 piculs of sugar, but
he only produced the value of the sugar amounting to P3,913.44 or 1,325.7 piculs only therefore,
failed to deliver 175.93 piculs. It appears, at any event, Valdez and Sibal agreed afterwards not to
be governed by such quotations of November, 1920, because the contract was not quoted in the
following contracts.

Sibal now questions the validity of the stipulation made in 1920.

ISSUE:

WON the stipulated contract is void due to fraud due to the agreement of both parties not
to be governed by the contract stipulated.

HELD:

The contract between Valdez and Sibal is not void due fraud even if both parties agreed
not to be governed by the contract stipulated.

In order that fraud may render a contract void, it is necessary, among other things, that it
was not employed by the two contracting parties (Art. 1270, Civil Code). So that a party cannot
escape the consequences of a stipulation that he had and the other party stated in a document for
the purpose of making other persons believe false things; in such a case, both parties are guilty of
fraud, and neither of them can repudiate the stipulation made by both in bad faith.

In this case, the parties were both in fault, because both of them decided to violate the
said stipulation. That Valdez has failed to deliver the promised 1, 500 piculs of sugar, that has
been in the agreement. And that Sibal has failed to pay Valdez in two occasions the amount of P
12,833.30 for the fact that his payment were for advance payment on account of the sale of the
sugar, and that it was an error of the one who prepared the document that a promissory note was
inserted in Exhibits B and B-1. With that, it appears that Valdez and Sibal agreed afterwards not
to be governed by such quotations of November, 1920

For all of the foregoing reasons, Sibal is sentenced to pay the Valdez the sum P13,407.61
with legal interest thereon, plus the sum of P703.72 for his failure to deliver 175.93 piculs of
sugar and in addition thereto the sum of P2,000, which was stipulated to be paid in case of
litigation, as is the present action.