DISCUSSSION ON: VOID OR INEXISTENT CONTRACT

1. Chesca Paredes (Seller) and Mayo Samonte (buyer) entered an absolutely simulated
contract of sale of a parcel of land. Chesca Paredes brought action in court to recover
the land only after 20 years. Is it correct for the court to dismiss the action because of
the long lapse of time?
 It is not correct for the court to dismiss the action. Both Chesca and Mayo
entered into an absolutely simulated contract.
 Article 1410 states that “The action or defense for the declaration of the
inexistence of a contract does not prescribe.”
2. In consideration of P 10,000 given by Rhen Escaňo to Cindy Miranda, the latter agreed to
burn the house of Cesca Paredes. Later, Rhen Escaňo told Cindy Miranda to forget the
agreement and to return the money. Cindy Miranda refuse. Is Rhen Escaňo entitled to
recover from Cindy Miranda?
 Yes, Rhen is entitled to recover from Cindy. In the case at bar, in
consideration of P10,000 given by Rhen to Cindy, the latter agreed to
burn the house of Cesca. Later, Rhen told Cindy to forget the agreement
and to return the money from Cindy. As stated in the law, when money is
paid for an illegal purpose, the contract may be repudiated by one of the
parties before the purpose has been accomplished, or before any
damage has been caused to a third person. Here, the money was paid by
Rhen for an illegal purpose which is to burn the house of Cesca. However,
Rhen repudiated from the contract before Cindy would actually burn the
house of Cesca.
 Article 1414 of the New Civil Code of the Philippines states that “When
money is paid or property delivered for an illegal purpose, the contract
may be repudiated by one of the parties before the purpose has been
accomplished, or before any damage has been caused to a third person.
In such case, the courts may if the public interest will thus be subserved,
 allow the party repudiating the contract to recover the money or
property.”
3. Yam Laranas (woman) agreed to stay in the house of Ash Mahinay (man) as the latter’s
live-in partner for one year in consideration of the latter’s promise to pay her P 100,000
after said period. Yam Laranas (woman) complied with her part of the agreement but
Ash Mahinay (man) reneged on his promise. Is Yam Laranas (woman) entitled to recover
from Ash Mahinay?
 Yes, Yam is entitled to recover from Ash. When Yam agreed to stay in the
house of Ash for a givern period, the two parties entered into a legally
binding agreement that is constituted by an offer, considerations,
acceptance, and mutual obligation. These are elements that satisfy a
contract to be valid and enforceable in the court of law. Each party had a
contractual obligation to fulfill where Ash promised to pay to Yam
P100,000 in an agreement that was going to see Yam living in Ash’s house
for one year as a partner. Any reneged by any party will attract penalties
and damage recoveries. The only reason why Yam agreed to enter into
the contract was because of the P100,000 that Ash promised.
 Article 1412 states that “If the act in which the unlawful or forbidden
cause consists of does not constitute a criminal offense, the following
rules shall be observed:
(1) When the fault is on the part of both contracting parties,
neither may recover what he has given by virtue of the contract, or
demand the performance of the other’s undertaking;