20. JOSE P.

DIZON
vs
ALFREDO G. GABORRO
83 SCRA 688-691

FACTS:
Petitioner, Jose P. Dizon, was the owner of the three parcels of land, situated in
Mabalacat, Pampanga. He constituted a first mortgage to DBP to secure a loan of
P38,000.00 and a second mortgage to PNB amounting P93,831.91.

Petitioner defaulted in the payment of his debt, therefore, the Development Bank of

the Philippines foreclosed the mortgage extrajudicially. Gaborro became interested
in the lands of Dizon. But since the property was already foreclosed by the
DPB. They then entered into a contract captioned as “Deed of sale with assumption
of mortgage” and the second contract executed the same day, is called “Option to
Purchase Real Estate” After the execution of said contracts, Alfredo G. Gaborro took
possession of the three parcels of land.
After the execution of the contract and its conditions to him, Gaborro made several
payments to the DBP and PNB. He improved, cultivated the kinds raised sugarcane
and other crops produce.

Jose P. Dizon through his lawyer, wrote a letter to Gaborro informing him that he is
formally offering reimburse Gaborro of what he paid to the banks. Gaborro did not
agreed to the demands of the petitioner, hence, Jose P. Dizon instituted a complaint
in the Court of First Instance of Pampanga, alleging that the documents Deed of
Sale With Assumption of Mortgage and the Option to Purchase Real Estate did not
express the true intention and agreement between the parties. Petitioner,
contended that the two deeds constitute in fact a single transaction that their real
agreement was not an absolute sale of the land but merely an equitable mortgage
or conveyance by way of security for the reimbursement or refund by Dizon to
Gaborro of any and all sums which the latter may have paid on account of the
mortgage debts in favor of the DBP and the PNB.

ISSUE:
Whether or not the contract showed the true agreement  between the parties.

HELD:
No. The court held that the true agreement between the plaintiff and defendant is
that the defendant would assume and pay the indebtedness of the plaintiff to
DBP and PNB, and in consideration therefore, the defendant was given the
possession and enjoyment of the properties in question until the plaintiff shall have
reimbursed to defendant fully the amount of P131,831.91 plus 8% interest per
annum from October 6, 1959 until full payment, said right to be exercised within
one year from the date the judgment becomes final, if he fails to do so within the
said period, then he is deemed to have lost his right over the lands forever.
 21. R. MARINO CORPUS
vs
COURT OF APPEALS and JUAN T. DAVID
G.R. No. L-40424 ; June 30, 1980

FACTS:
Alvarado and Corpuz were tenants of Lorenzo Barredo. In May 1988, Barredo
decided to sell his property to the tenants. Due to economic difficulties, Alvarado
and the other lessees executed an "Affidavit of Waiver" granting Barredo the right
to sell his house to any person who can afford to purchase it. Barredo sold his
house to Corpuz for P37,500.00 and thus, Alvarado became the tenant of Corpuz.

In October 1991, Corpuz sent a written notice to Alvarado to vacate the room which
he was occupying because Corpuz’ children needed it for their own use. Alvarado
refusal to vacate the room prompted Corpuz to file an action for unlawful detainer
against the former with the MeTC of Manila for recovery of possession of said room.

In his answer, Alvarado raised two major defenses: (1) the "Affidavit of Waiver"
executed between him and Barredo was a forgery; and (2) the dispute was not
referred to the Lupong Tagapayapa.

MTC ordered Alvarado to vacate the room. Alvarado appealed to the RTC.

RTC reversed MTC’s decision on the ground that the purported sale between Corpuz
and Barredo was the subject of a controversy pending before the NHA which must
be resolved first by said agency. The "Affidavit of Waiver" was a forgery and
dismissed the case for unlawful detainer. MR of Corpuz was denied.

CA affirmed in its entirety the RTC decision. MR denied. Hence, this petition.

ISSUES:

1. Whether or not Corpuz' unlawful detainer suit against Alvarado should be

suspended until the resolution of the NHA case impugning the sale of said property.

2. Whether or not the ejectment suit was not referred to the Lupon Tagapayapa as
required by PD1508.

HELD:
1.  NO. MTC has exclusive jurisdiction over ejectment cases. As the law now stands,
the only issue to be resolved in forcible entry and unlawful detainer cases is the
physical or material possession over the real property, that is, possession de facto.

In Refugia v. CA, citing De la Santa vs. CA, it was held that the inferior court may
look into the evidence of title or ownership and possession de jure insofar as said
evidence would indicate or determine the nature of possession. It cannot resolve
the issue of ownership by declaring who among the parties is the true and lawful
owner of the subject property because the resolution of said issue would effect an
adjudication on ownership which is not sanctioned in the summary action for
unlawful detainer.

The prevailing doctrine is that suits or actions for the annulment of sale, title or
document do not abate any ejectment action respecting the same property. The
underlying reason is for the defendant not to trifle with the ejectment suit, which is
summary in nature, by the simple expedient of asserting ownership thereon.

Thus, the controversy pending before the NHA for the annulment of the Deed of
Sale and assailing the authenticity of the "Affidavit of Joint Waiver" cannot deter the
MTC from taking cognizance of the ejectment suit merely for the purpose of
determining who has a better possessory right among the parties.
Alvarado is not without remedy. A judgment rendered in an ejectment case shall
not bar an action between the same parties respecting title to the land or building
nor shall it be conclusive as to the facts therein found in a case between the same
parties upon a different cause of action involving possession.

2. NO. This defense was only stated in a single general short sentence in Alvarado's
answer. In Dui v.  CA, SC held that failure of a party to specifically allege the fact
that there was no compliance with the Barangay conciliation procedure constitutes
a waiver of that defense. Alvarado's answer stated no reason or explanation to
support his allegation, which is deemed a mere general averment. The proceeding
outlined in PD1508 is not a jurisdictional requirement and non-compliance therewith
cannot affect the jurisdiction which the lower court had already acquired over the
subject matter and the parties therein.

36. HILLTOP MARKET FISH VENDORS ASSOCIATION

vs.
HON. MAYOR BRAULIO YARANON
GR NO. 188057 ; JULY 12, 2017

FACTS:
Hilltop and City of Baguio entered into a Contract of Lease over a lot owned by the
City of Baguio, which provided the lease period of 25 years, renewable for the same
period at the option of both parties, and the annual rental of P25,000, with the first
payment commencing upon the issuance by the City Engineer’s Office of the
Certificate of Full Occupancy of the building constructed by Hilltop on the lot, which
its ownership shall transfer to the City of Baguio at the termination of the lease
period. In 1975, Hilltop constructed the Rillera Building and its members occupied it
and conducted business in it, even though the City Engineer’s Office did not issue a
Certificate. On October 16, 1980, the City Council of Baguio issued resolutions
rescinding the contract of lease with Hilltop for its continued failure to comply with
its obligation to complete the Rillera Building. Few floor levels were closed for
failure to comply with the minimum safety standards, and the entire building, on
February 28, 2005, for its completion and sanitation thereby preparing it for
commercial use.
On March 7, 2005, Hilltop asked the lower courts to prevent it and order the City
Engineer’s Office to issue the Certificate to make the Contract of Lease effective.
City of Baguio argued that the issuance of the Certificate shall only signal the start
of payment of annual lease rental and not the effectivity of the contract.

ISSUE:
Whether or not the court of appeals erred in ruling that the petitioner is estopped
from claiming that the period of lease has not yet began contrary to evidence and
to law.

HELD:
No. Hilltop is also estopped from claiming that the contract of lease did not
commence since it based its occupancy of the Rillera building on the contract of
lease. In its petition, Hilltop alleged that "an examination of the provisions of the
contract of lease would show that the terms and conditions for the possession and
occupation of the building before the issuance of the occupancy permit by
respondents has, likewise, been contemplated by the parties.
Parties who do not come to court with clean hands cannot be allowed to profit from
their own wrongdoing. The action (or inaction) of the party seeking equity must be
"free from fault, and he must have done nothing to lull his adversary into repose,
thereby obstructing and preventing vigilance on the part of the latter."

37. HEIRS OF IGNACIO

VS.
HOME BANKERS SAVINGS AND TRUST CO.
G.R. No. 177783 ; January 23, 2013

FACTS:
The case sprang from a real estate mortgage of two parcels of land in August 1981.
Fausto C. Ignacio mortgaged the properties to Home Bankers Savings and Trust
Company (Bank) as security for a loan extended by the Bank. After Ignacio
defaulted in the payment of the loan, the property was foreclosed and subsequently
sold to the Bank in a public auction.Ignacio offered to repurchase the property.
Universal Properties Inc. (UPI), the bank’s collecting agent sent Ignacio a letter on
March 22, 1984 which contained the terms of the repurchase. However, Ignacio
annotated in the letter new terms and conditions. He claimed that these were
verbal agreements between himself and the Bank’s collection agent, UPI.No
repurchase agreement was finalized between Ignacio and the Bank. Thereafter the
Bank sold the property to third parties. Ignacio then filed an action for specific
performance against the Bank for the reconveyance of the properties after payment
of the balance of the purchase price. He argued that there was implied acceptance
of the counter-offer of the sale through the receipt of the terms by representatives
of UPI. The Bank denied that it gave its consent to the counter-offer of Ignacio. It
countered that it did not approve the unilateral amendments placed by Ignacio.

ISSUE:
Whether or not the negotiations between Ignacio and UPI is binding on the Bank.

HELD:
A contract of sale is perfected only when there is consent validly given. There is no
consent when a party merely negotiates a qualified acceptance or a counter-offer.
An acceptance must reflect all aspects of the offer to amount to a meeting of the
minds between the parties.In this case, while it is apparent that Ignacio proposed
new terms and conditions to the repurchase agreement, there was no showing that
the Bank approved the modified offer.

The negotiations between Ignacio and UPI, the collection agent, were merely
preparatory to the repurchase agreement and, therefore, was not binding on the
Bank. Ignacio could not compel the Bank to accede to the repurchase of the
property.

A corporation may only give valid acceptance of an offer of sale through its
authorized officers or agents. Specifically, a counter-offer to repurchase a property
will not bind a corporation by mere acceptance of an agent in the absence of
evidence of authority from the corporation’s board of directors.

38.ROBERN DEVELOPMENT CORPORATION

vs
PEOPLE'S LANDLESS ASSOCIATION
G.R. No. 173622 ; March 11, 2013

FACTS:
Al-Amanah Davao Branch, thru its OIC Dalig, asked some of the members of PELA
to desist from building their houses on its lot and to vacate the same, unless they
are interested to buy it. The informal settlers thus expressed their interest to buy
the lot at P100.00 per square meter, which Al-Amanah turned down. The informal
settlers together with other members comprising PELA offered to purchase the lot
for P300,000.00, half of which shall be paid as down payment and the remaining
half to be paid within one year. In the meantime, the PELA members remained in
the property and introduced further improvements. Al-Amanah wrote then PELA
informing him of the disapproval of PELA’s offer to buy the lot. Subsequently, Al-
Amanah sent similarly worded letters, to 19 PELA members demanding that they
vacate the lot. Meanwhile, acting on Robern’s undated written offer, Al-Amanah
issued a Recommendation Sheet indicating therein that Robern is interested to buy
the lot for P400,000.00; that it has already deposited 20% of the offered purchase
price; that it is buying the lot on "as is" basis; and, that it is willing to shoulder the
relocation of all informal settlers therein. The Head Office informed the Davao
Branch Manager that the Board Operations Committee had accepted Robern’s offer.

ISSUE:
Whether there was a perfected contract of sale between PELA and Al-Amanah.

HELD:
There is no perfected contract of sale between PELA and Al-Amanah for want of
consent and agreement on the price. The rule is that except where a formal
acceptance is so required, although the acceptance must be affirmatively and
clearly made and must be evidenced by some acts or conduct communicated to the
offeror, it may be made either in a formal or an informal manner, and may be
shown by acts, conduct, or words of the accepting party that clearly manifest a
present intention or determination to accept the offer to buy or sell. Contracts
undergo three stages: "a) negotiation which begins from the time the prospective
contracting parties indicate interest in the contract and ends at the moment of their
agreement; b) perfection or birth, x x x which takes place when the parties agree
upon all the essential elements of the contract x x x; and c) consummation, which
occurs when the parties fulfill or perform the terms agreed upon, culminating in the
extinguishment thereof."

In the case at bench, the transaction between Al-Amanah and PELA remained in the
negotiation stage. The offer never materialized into a perfected sale, for no oral or
documentary evidence categorically proves that Al-Amanah expressed amenability
to the offered P300,000.00 purchase price.

39. CE CONSTRUCTION CORPORATION

vs.
ARANETA CENTER, INC.
G. R. No. 192725 ; August 9, 2017

FACTS:
In this case, the respondent Araneta Center, Inc. (ACI) sent invitations to different
construction companies, including CE Construction Corporation (CECON), to bid for
the design and construction of the Gateway Mall. The tender documents described
the Project’s contract sum to be a “lump sum fixed price and restricted cost
adjustments.” CECON offered the lowest tender amount. However, ACI did not
award the project to any bidder. CECON was only informed orally that the project
was awarded to it a month after its proposal lapsed. ACI later accepted CECON’s
tender for an adjusted contract sum, but no formal contract documents were
delivered or executed. From the commencement of CECON’s engagement, several
changes in the project like the increase of prices of steel products and cement,
changes in specifications, and delays in delivering drawings and specifications
caused CECON to request cost adjustments and time extensions which ACI failed to
timely act on and, eventually, to initiate arbitration before the CIAC. The arbitral
tribunal mainly ruled in favor of CECON, noting that CECON could claim cost
adjustments because the initial lump sum offer was no longer availing in view of the
events which actually unfolded. The Tribunal held that ACI was to blame for the
delays. It ordered the ACI to pay CECON the total of P217,428,155.75. Due to
arithmetical errors, it modified the decision, indicating the total amount to CECON
was P231,357,136.72. ACI appealed to the CA. The CA reduced the award in favor
of CECON and increased the award to ACI on the ground that the lump sum fixed
price arrangement between ACI and CECON was inviolable. Thus, the CA deleted
much of the tribunal’s monetary award to CECON. CECON appealed to the Supreme
Court insisting on the propriety of the CIAC Tribunal’s conclusions and findings.

ISSUE:
Whether or not the CIAC Tribunal’s findings and conclusions are proper.

HELD:
Yes. The Supreme Court reinstated the arbitral tribunal’s award primarily on the
ground that there was never a meeting of minds on the lump sum price.
Subsequent events not only showed that there was no meeting of minds on the
initial offer contract sum, but there was no meeting of the minds on the contract
sum at all. Thus, it was necessary for the CIAC to unravel the terms binding on the
parties from sources other than the documents. This was well within the CIAC’s
jurisdiction. The Supreme Court reiterated that by reason of the technical expertise
of the CIAC, its decisions must be accorded primacy and deference. There is only
very narrow scope for assailing CIAC’s rulings and any appeal must be limited to
questions of law. Consistent with this approach, the Supreme Court is duty-bound
to be extremely watchful and to ensure that an appeal does not become an artifice
for the parties to undermine the process in which they voluntarily elected to
engage. Consequently, the Supreme Court’s instinctive inclination must be to
uphold the factual findings of arbitral tribunals.

40. METRO RAIL TRANSIT DEVELOPMENT CORPORATION

vs
GAMMON PHILIPPINES, INC.,
G.R. No. 200401 ; January 17, 2018

FACTS:
This case involves MRT's MRT-3 North Triangle Description Project (Project),
covering 54 hectares of land, out of which 16 hectares were allotted for a
commercial center. Parsons Interpro JV (Parsons) was the Management Team
authorized to oversee the construction’s execution.8 On April 30, 1997, Gammon
received from Parsons an invitation to bid for the complete concrete works of the
Podium. Gammon submitted three (3) separate bids. Gammon won the bid. On
August 27, 1997, Parsons issued a Letter of Award and Notice to Proceed (First
Notice to Proceed) to Gammon.11 It was accompanied by the formal contract
documents. Gammon signed and returned the First Notice to Proceed without the
contract documents. Gammon transmitted to Parsons a signed Letter of Comfort to
guarantee its obligations in the Project.15 However, in a Letter dated September 8,
1997, MRT wrote Gammon that it would need one (1) or two (2) weeks before it
could issue the latter the Formal Notice to Proceed: In a facsimile transmission sent
on the same day, Parsons directed Gammon "to hold any further mobilization
activities. On April 2, 1998, MRT issued in favor of Gammon another Notice of
Award and Notice to Proceed (Third Notice to Proceed). Gammon received from
Parsons the Contract for the Construction and Development of the Superstructure,
MRT-3 North Triangle - Amended Notice to Proceed dated June 10, 1998 (Fourth
Notice to Proceed). Gammon wrote MRT, acknowledging the latter's intent to grant
the Fourth Notice to Proceed to another party despite having granted the First
Notice to Proceed to Gammon. Thus, it notified MRT of its claims for reimbursement
for costs, losses, charges, damages, and expenses it had incurred due to the rapid
mobilization program in response to MRT's additional work instructions, suspension
order, ongoing discussions, and the consequences of its award to another party.45
In a Letter dated July 15, 1998, MRT expressed its disagreement with Gammon and
its amenability to discussing claims for reimbursement. Gammon filed a Notice of
Claim before CIAC against MRT. CIAC ruled in favor of Gammon. CA affirmed the
decision. ISSUE: Whether there was a perfected contract of sale between MRT and
Gammon. (YES) RULING: This Court rules that there is a perfected contract
between MRT and Gammon.

The requisites of a valid contract are provided for in Article 1318 of the Civil Code:
(1) Consent of the contracting parties; (2) Object certain which is the subject
matter of the contract; (3) Cause of the obligation which is established. A contract
is perfected when both parties have consented to the object and cause of the
contract. There is consent when the offer of one party is absolutely accepted by the
other party. The acceptance of the other party may be express or implied.
However, the offering party may impose the time, place, and manner of acceptance
by the other party, and the other party must comply. In bidding contracts, this
Court has ruled that the award of the contract to the bidder is an acceptance of the
bidder's offer. Its effect is to perfect a contract between the bidder and the
contractor upon notice of the award to the bidder. Thus, the award of a contract to
a bidder perfects the contract. Failure to sign the physical contract does not affect
the contract's existence or the obligations arising from it. Applying this principle to
the case at bar, this Court finds that there is a perfected contract between the
parties. MRT has already awarded the contract to Gammon, and Gammon's
acceptance of the award was communicated to MRT before MRT rescinded the
contract. The Invitation to Bid issued to Gammon stated that MRT "will select the
Bidder that [MRT] judges to be the most suitable, most qualified, most responsible
and responsive, and with the most attractive Price and will enter into earnest
negotiations to finalize and execute the Contract." On May 30, 1997, Gammon
tendered its bids. In a Letter dated July 14, 1997, Gammon submitted another offer
to MRT in response to the latter's invitation to submit a final offer considering the
fluctuation in foreign exchange rates and an odd-and-even vehicle restriction plan.
Parsons thereafter issued the First Notice to Proceed In its First Letter, Gammon
signed and returned the First Notice to Proceed to signify its consent to its
prestations. In its Second Letter, Gammon transmitted to Parsons the signed Letter
of Comfort to guarantee its obligations in the Project. On September 9, 1997,
Gammon returned to Parsons the contract documents. MRT argues that the return
of the contract documents occurred after it had already revoked its offer However,
MRT had already accepted the offered bid of Gammon and had made known to
Gammon its acceptance when it awarded the contract and issued it the First Notice
to Proceed on August 27, 1997. The First Notice to Proceed clearly laid out the
object and the cause of the contract. In exchange for P1,401,672,095.00, Gammon
was to furnish "labor, supervision, materials, plant, equipment and other facilities
and appurtenances necessary to perform all the works in accordance with [its bid]."
This acceptance is also manifested in the First Notice to Proceed when it authorized
Gammon to proceed with the work seven (7) days from its receipt or from the time
the site is de-watered and cleaned up. Thus, Gammon's receipt of the First Notice
to Proceed constitutes the acceptance that is necessary to perfect the contract.

41. SPOUSES FRANCISCO ONG and BETTY LIM ONG, ET AL

vs
BPI FAMILY SAVINGS BANK, INC.
G.R. No. 208638 ; January 24, 2018

FACTS:
Spouses Francisco Ong and Betty Lim Ong and Spouses Joseph Ong Chuan and
Esperanza Ong Chuan (collectively referred to as the petitioners) are engaged in
the business of printing under the name and style "MELBROS PRINTING CENTER.
Sometime in December 1996, Bank of Southeast Asia's (BSA) managers, Ronnie
Denila and Rommel Nayve, visited petitioners' office and discussed the various loan
and credit facilities offered by their bank. In view of petitioners' business expansion
plans and the assurances made by BSA's managers, they applied for the credit
facilities offered by the latter. Sometime in April 1997, they executed a real estate
mortgage (REM) over their property situated in Paco, Manila, covered by Transfer
Certificate of Title No. 143457, in favor of BSA as security for a P15,000,000.00
term loan and P5,000,000.00 credit line or a total of P20,000,000.00. With regard
to the term loan, only P10,444,271.49 was released by BSA. With regard to the
P5,000,000.00 credit line, only P3,000,000.00 was released. BSA promised to
release the remaining P2,000,000.00 conditioned upon the payment of the
P3,000,000.00 initially released to petitioners.

Petitioners acceded to the condition and paid the P3,000,000.00 in full. However,
BSA still refused to release the P2,000,000.00. Petitioners then refused to pay the
amortizations due on their term loan. Later on, BPI Family Savings Bank (BPI)
merged with BSA, thus, acquired all the latter's rights and assumed its obligations.
BPI filed a petition for extrajudicial foreclosure of the REM for petitioners' default in
the payment of their term loan. In order to enjoin the foreclosure, petitioners
instituted an action for damages with Temporary Restraining Order and Preliminary
Injunction against BPI. On November 10, 2008, the trial court resolves in favor of
the plaintiffs and against the defendant bank for the latter to pay the former. BPI
thereafter appealed to the CA averring that the court a quo erred when it ruled that
petitioners were entitled to damages. BPI posited that petitioners are liable to them
on the principal balance of the mortgage loan agreement. The CA reversed the
decision of the lower court and ruled in favor of BPI. Petitioners filed a Motion for
Reconsideration but the same was denied by the CA. Aggrieved, petitioners filed the
present petition.

ISSUE:
Whether BSA incurred delay in the performance of its obligations.

HELD:
Yes. Loan is a reciprocal obligation, as it arises from the same cause where one
party is the creditor and the other the debtor. The obligation of one party in a
reciprocal obligation is dependent upon the obligation of the other, and the
performance should ideally be simultaneous. This means that in a loan, the creditor
should release the full loan amount and the debtor repays it when it becomes due
and demandable. In this case, BSA did not only incur delay in releasing the pre-
agreed credit line of P5,000,000.00 but likewise violated the terms of its agreement
with petitioners when it deliberately failed to release the amount of P2,000,000.00
after petitioners complied with their terms and paid the first P3,000,000.00 in full.
The default attributed to petitioners when they stopped paying their amortizations
on the term loan cannot be sustained by this Court because long before they sent a
Letter to BSA informing the latter of their refusal to continue paying amortizations,
BSA had already reneged on its obligation to release the amount previously agreed
upon, i.e., the P5,000,000.00 covered by the credit line. Article 1170 of the Civil
Code enumerates the instances when parties to a contract may be held liable for
damages, viz.: Article 1170. Those who in the performance of their obligations are
guilty of fraud, negligence, or delay, and those who in any manner contravene the
tenor thereof, are liable for damages.

The direct consequences therefore of the acts of BSA are: the machinery and
equipment that were essential to petitioners' business and requisite for its
operations had to be procured so late in time and had crippled the printing of school
supplies, hence, petitioners were constrained to cancel purchase orders of their
clients to petitioners' damage. BSA claims that the release of the amount covered
by the credit line was subject to the "availability of funds" thus only a part of the
proceeds of the entire omnibus line was released. Assuming for the sake of
discussion that the funds at the time were insufficient to cover the entire
P5,000,000.00, BSA should have at least informed petitioners in advance so that
the latter could have resorted to other means to secure the amount needed for
their printing business. The omnibus line was approved and became effective on
January 1997 yet BSA did not allow petitioners to draw from the line until
November 1997. Moreover, BSA downgraded petitioners' drawdown to only
P3,000,000.00 despite the clear wordings of their credit agreement whereby
petitioners were allowed to draw any portion or all of the omnibus line not to
exceed P5,000,000.00. The almost 10 months delay in releasing the amount
applied for by petitioners negates good faith on the part of BSA. Since BSA incurred
delay in the performance of its obligations and subsequently cancelled the omnibus
line without petitioners' consent, its successor BPI cannot be permitted to foreclose
the loan for the reason that its successor BSA violated the terms of the contract
even prior to petitioners' justified refusal to continue paying the amortizations.
 42. MIGUEL FLORENTINO ET AL
vs
SALVADOR ENCARNACION SR. ET. AL
G.R. No. L-27696 ; September 30, 1977

FACTS:
On May 22, 1964, the petitioners-appellants and the petitioner-appellee filed with
CFI an application for the registration under Act 496 of a parcel of agricultural land
located at Cabugao, Ilocos Sur. The application alleged among other things that the
applicants are the common and pro-indiviso owners in fee simple of the said land
with the improvements existing thereon; that to the best of the knowledge and
belief; there is no mortgage, hen or encumbrance of any kind whatsoever affecting
said land, nor any other person having any estate or interest thereon, legal or
equitable, remainder, reservation at in expectancy; that said applicants had
acquired the aforesaid land thru and by inheritance from their predecessors in
interest, their aunt, Doña Encarnacion Florentino, and Angel Encarnacion acquire
their respective shares of the land thru purchase from the original heirs, Jesus,
Caridad, Lourdes and Dolores, all surnamed Singson, on one hand and from
Asuncion Florentino on the other. After due notice and publication, the Court set the
application for hearing. Only the Director of Lands filed an opposition but was later
withdrawn so an order of general default was issued. Upon application of the
applicants, the Clerk of Court was commissioned and authorized to receive the
evidence of the applicants and ordered to submit the same for the Court’s proper
resolution.

Exhibit O-1 embodied in the deed of extrajudicial partition (Exhibit O), which states
that with respect to the land situated in Barrio Lubong, Dacquel, Cabugao, Ilocos
Sur, the fruits thereof shall serve to defray the religious expenses, was the source
of contention in this case (Spanish text). Florentino wanted to include ExhibitO-1 on
the title but the Encarnacion supposed and subsequently withdrawn their
application on their shares, which was opposed by the former.

The Court after hearing the motion for withdrawal and the opposition issued an
order and for the purpose of ascertaining and implifying that the products of the
land made subject matter of this land registration case had been used in answering
for the payment of expenses for the religious functions specified in the Deed of
Extrajudicial Partition which was no registered in the office of the Register of Deeds
from time immemorial; and that the applicants knew of thisarrangement and the
Deed of Extrajudicial Partition of August 24,1947, was not signed by Angel
Encarnacion or Salvador Encarnacion, Jr.-CFI: The self-imposed arrangement in
favor of the Church is a simple donation, but is void since the done has not
accepted the donation and Salvador Encarnacion, Jr. and Angel Encarnacion had not
made any oral or written grant at all so the court allowed the religious expenses to
be made and entered on the undivided shares, interests and participations of all the
applicants in this case, except that of Salvador Encarnacion, Sr., Salvador
Encarnacion, Jr. and Angel Encarnacion.”-the petitioners-appellants filed their Reply
to the Opposition reiterating their previous arguments, and also attacking the
jurisdiction of the registration court to pass upon the validity or invalidity of the
agreement Exhibit O-1, alleging that such is litigable only in an ordinary action and
not proper in a land registration proceeding.

The Motion for Reconsideration and of New Trial was denied for lack of merit, but
the court modified in highlighting that the donee Church has not showed its clear
acceptance of the donation, and is the real party of this case, not the petitioners-
appellants.

ISSUE:
Whether or not the court erred in concluding that the stipulation is just an
arrangement stipulation.

HELD:
YES, the court erred in concluding that the stipulation is just an arrangement
stipulation. It cannot be revoked unilaterally.

The contract must bind both parties, based on the principles (1) that obligation
wising from contracts has the force of law between the contracting parties; and (2)
that they must be mutuality between the parties band on their essential equality, to
which is repugnant to have one party bound by the contract leaving the other free
therefrom. The stipulation (Exhibit O-1) is part of an extrajudicial partition (Exh. O)
duly agreed and signed by the parties, hence the same must bind the contracting
parties thereto and its validity or compliance cannot be left to the will of one of
them. The said stipulation is a Stipulation pour autrui. A stipulation pour autrui is a
stipulation in favor of a third person conferring a clear and deliberate favor upon
him, and which stipulation is merely a part of a contract entered into by the parties,
neither of whom acted as agent of the third person, and such third person may
demand its fulfillment provided that he communicates his acceptance to the obligor
before it is revoked.

43. MELECIO COQUIA

vs
FIELDMEN’S INSURANCE CO.
G.R. No. L-23276 ; November 29,1968

FACTS:
The Fieldmen’s Company (company) issued a common carrier accident insurance
policy to Manila Yellow Taxicab Co. Inc. (insured). In the policy it stipulated that
accident arising from a motor vehicle shall be insured with respect to the death or
bodily injured driver, conductor and/or inspector riding in the motor vehicle.
Carlito Coquia met an accident while driving resulting in his death. The insured
asked the company for the insurance of Carlito. The company refused to give
insurance to the said insured, the paaboutts of Carlito filed a complaint about a sum
of money for the insurance of their dead child. The company contends that parents
had no contractual relation with the company, thus they are not the proper parties
in the said case.

ISSUE:
Whether or not the policy in question belong to such class of contracts pour autrui.

HELD:
Yes.Pursuant to these stipulations, the Company “will indemnify any authorized
Driver  who is driving the Motor Vehicle” of the Insured and, in the event of death of
said driver, the Company shall, likewise, “indemnify his personal representatives.”
In fact, the Company “may, at its option, make indemnity payable directly  to
the claimants or heirs of claimants  … it being the true intention of this Policy to
protect … the liabilities of the Insured  towards the passengers of the Motor Vehicle
and the Public” — in other words, third parties.
Thus, the policy under consideration is typical of contracts pour autrui, this
character being made more manifest by the fact that the deceased driver paid fifty
per cent (50%) of the corresponding premiums, which were deducted from his
weekly commissions. Under these conditions, it is clear that the Coquias — who,
admittedly, are the sole heirs of the deceased — have a direct cause of action
against the Company, and, since they could have maintained this action by
themselves, without the assistance of the Insured, it goes without saying that they
could and did properly join the latter in filing the complaint herein.

44. PASTOR B. CONSTANTINO

Vs
HERMINIA ESPIRITU
G.R. No. L-22404 ; 31 May 1971

FACTS:

The deed of absolute sale as the binding contract between appellant and appellee
conveyed the two storey house in favor of the appellee. The appellee is entrusted of
the properties of the appellant’s illegitimate son. The appellee mortgaged the said
property to Republic Savings Bank for the payment of the appellee’s loan and
thereafter the appellee offered them for sale. The appellant then prayed for the
issuance of a writ of execution restraining the appellee and her agents to further
alienate or disposed of the said property. The appellant wanted to execute a deed
of absolute sale in favor of his son who is the beneficiary.

ISSUE:

Whether or not the contract between appellant and appellee was a contract pour
autrui.

HELD:
Yes. It appears then that, upon the facts alleged by appellant, the contract between
him and appellee was a contract pour autrui, although couched in the form of a
deed of absolute sale, and that appellant’s action was, in effect, one for specific
performance. That one of the parties to a contract is entitled to bring an action for
its enforcement or to prevent its breach is too clear to need any extensive
discussion. Upon the other hand, that the contract involved contained a stipulation
pour autrui amplifies this settled rule only in the sense that the third person for
whose benefit the contract was entered into may also demand its fulfillment
provided he had communicated his acceptance thereof to the obligor before the
stipulation in his favor is revoked.
It appears that the amended complaint submitted by appellant to the lower court
impleaded the beneficiary under the contract as a party co-plaintiff, it seems clear
that the three parties concerned therewith would, as a result, be before the court
and the latter’s adjudication would be complete and binding upon them.