Bobis v.

The Provincial Sheriff of Camarines Norte and Zosimo Rivera

GR No. L-29838
March 18, 1983

Facts
Rufina Camino and Pastor Eco were the registered owners of a parcel of land.
The said land was cultivated by spouses Fermin Bobis and Emilia Guadalupe.
On July 25, 1950, Alfonso Ortega filed a complaint against the four for the
recovery of possession of one-half of the cleared and planted portion of the
land, or the payment of Php1,650, which is the value of the improvements he
introduced thereon. The parties, on August 16, 1950, executed a compromise
agreement, which states that Camino and Eco shall pay Ortega Php140 as
payment for the improvements and that after such payment is made, Ortega
would respect the absolute and exclusive ownership of the land.
On August 26, 1950, just ten days after the execution of the compromise
agreement, Eco and Camino sold the land to Bobis and Guadalupe. Later, on
January 22, 1951, the compromise agreement was approved by the court.
When the obligation became due on February 28, 1951, Eco and Camino paid
Ortega only Php50 instead of the agreed upon Php140. As a result, a writ of
execution was issued, commanding the sheriff to levy the good and chattels of
the four defendants. Consequently, the sheriff levied on the land sold to Bobis
and Guadalupe. The land was later on sold to Zosimo Rivera at an execution
sale.

Issue
1. Was the writ of execution valid?
2. Was the sale of the land to Bobis and Guadalupe done to defraud Ortega?
 Ruling
1. No. The writ of execution was null and void with respect to Bobis and
Guadalupe. Thus, the subsequent sale to Rivera was also void. It can be seen
in the compromise agreement that only Eco and Camino were obliged to pay
Php140 to Ortega even though Bobis and Guadalupe were made a party to
the case. The court acted in excess of jurisdiction. The judgement in the civil
case was based upon a compromise agreement of the parties. In Yboleon v.
Sison, the Court ruled that “a judge or court, which sets aside a judgment
rendered upon consent of the parties and based on a compromise entered
into by them, which is converted into such judgment, cannot amend or set it
aside without the consent of said parties, or without first having declared in an
incidental preliminary hearing that such compromise is vitiated by any of the
ground for nullity enumerated in Art 2038 of the Civil Code.”
2. No. The rule is that fraud is not presumed. Being criminal in nature, fraud
should be proved by clear preponderance of evidence. In order that the
contract may be rescinded by reason of fraud to creditors, the following must
concur:
a.    It should be shown that both contracting parties have acted maliciously and
with fraud and for the purpose of prejudicing said creditors
b.    The creditors must be deprived by the transaction of all means by which they
may effect collection of their claims.
All these circumstances must be present.
There is no evidence that Camino and Eco connived with Bobis and
Guadalupe to defraud Ortega. There is also no evidence that the sale tended
to deprive Ortega of means to collect his claim from the obligors. Even if the
circumstances can be considered as badges of fraud, the sale cannot be
considered in fraud of creditors in absence of proof that Camino and Eco have
no other properties except that parcel of land sold to Bobis and Guadalupe.

Provincial Sheriff of Pampanga vs. Court of Appeals GR

No. L-25152. February 26, 1968 case digest
 Concept:  Art. 1387
Facts:
         An action for recovery of a sum of money was filed on June 4, 1960, by Cirilo D. Cabral and Zacarias
Perez (both are the petitioners) against Elpidio Agustin and Manuel Flores in the Court of First Instance of
Bulacan.
         Elpidio has a business, the cleverly titled  “Modern Furniture Store” (wow, such creative, much original,
very clever).  On January 9, 1961 a fire broke out, shit destroyed Elpidio’s store.  On January 12, 1961
Elpidio surrendered his license to operate to the municipal treasury.
         Not long thereafter, Elpidio’s brother, Marciano (respondent), erected a store in the same site where
Elpidio’s store burned down, Marciano named his store *wait for it* “MODERN FURNITURE STORE”
(really dude? Same shit again?). On February 20, 1961, for business purposes, Marciano secured a new
license and privilege tax to operate the store. And on the same date, Elpidio verbally transferred "Modern
Furniture Store" to his brother Marciano.
         July 13, 1961. The Court of First Instance of Bulacan, in the aforementioned case, rendered judgment
against Elpidio (who had confessed judgment) and Manuel Flores jointly and severally, for P10,685.15
plus interest and P500.00 attorney's fees.
         CA affirmed the decision.
         May 3, 1963. The Provincial Sheriff levied some of the pieces of furniture found in "Modern Furniture
Store." Stating that said properties do not belong to Elpidio Agustin but to him, Marciano filed a third party
claim with the sheriff. An indemnity bond, however, was posted by the judgment creditors (Cabral and
Perez) in the sheriff's favor, so he issued notice that the properties levied upon will be sold at public
auction on May 18, 1963.
         May 17, 1963. Marciano filed in the Court of First Instance of Pampanga the present action, against
judgment creditors Cabral and Perez and the sheriff, to be declared owner of the pieces of furniture levied
upon, with preliminary injunction and damages. A writ of preliminary injunction was issued enjoining the
sheriff from proceeding with the sale.
         The Court of First Instance dismissed the complaint but the CA reversed the decision of the lower court
and claimed that Marciano is the owner.

Issue: W/ON Article 1387 of the Civil Code on presumption of fraud apply?

Held:
No. The provision in question applies only when there has in fact been an alienation or transfer, whether
gratuitously or by onerous title. In the present case, the finding of the Court of Appeals, which is factual
and therefore not proper for Us to alter in this appeal, is that the store of Marciano Agustin is a new and
different one from that of Elpidio Agustin. True, Marciano Agustin testified that "Modern Furniture Store"
was transferred, verbally to him by Elpidio Agustin on February 20, 1961. As the Court of Appeals found,
however, this referred to the business name and style, not to the store or its contents, as the store and
contents were completely new, coming from the capital of Marciano Agustin, whereas Elpidio's store and
its contents of furniture were destroyed totally by the fire of January 9, 1961

Dilag v. Intermediate Appellate Court Case Digest (GR No. 72727)

Posted byPingApril 25, 2019Posted inUncategorizedTags:Law Notes

Dilag v. Intermediate Appellate Court

GR No. 72727

July 30, 1987

Facts

Herminio Arellano died in a vehicular accident on July 1, 1968 involving a

truck owned by spouses Pablo and Socorro Dilag. His father, Marciano
Arellano, was awarded by the trial court money damages, and the decision
became final and executory. A writ of execution was issued on February 16,
1979.

The Dilag spouses and Arellano came into a compromise agreement but the
same was disapproved by the court for failure of the Dilags to sign it. Pursuant
to the writ of execution, a notice of Levy on Execution was annotated on a
parcel of land owned by the Dilags. An examination of the title shows that
there is an adverse claim inscribed therein, dated March 11, 1974 filed by the
Dilag spouses’ children. The children had a Deed of Absolute Sale executed
on November 21, 1973. The adverse claim also stated that the owner’s
duplicate certificate was then in the possession of the Development Bank of
the Philippines, to which the property had been mortgaged. The title further
shows an inscription on July 25, 1979 of a Contract of Lease executed on
February 9, 1979. The lease was in favor of David and Erlinda Diancin.

But pursuant to the writ of execution, the provincial sheriff sold at a public
auction to Marciano Arellano the parcel of land. This was on August 26, 1981.
The next day, a corresponding Certificate of Sale was inscribed to the title,
subject to the right of redemption. However, on the same date of the sale
(August 26, 1981), another inscription appears bearing a Deed of Absolute
Sale executed by the Dilag spouses in favor of their children. The land was
supposedly sold for Php30,000.
A year after the Certificate of Sale was inscribed in favor or Arellano, the Dilag
spouses failed to exercise their right of redemption. Thus, a Definite Deed of
Sale was executed. According to the Sheriff’s Return of Service, the delivery
was made to Arellano, who executed a Delivery Receipt. Later on, Arellano
sold the parcel of land to Marcelino Florete Jr. and Leon Coo for Php150,000.

David Diancin, the lessee, executed a deed giving up his claim or interest as a
lessee over the land in favor of Arellano in consideration of Php38,000 as
payment for his fish fry in the fish pond in the property. Because of this,
Sussie Dilag, one of the Dilag children, executed a Notarial Rescission of the
Lease Contract effective July 2, 1983.

Issue

Was the sale of the land in 1973 by the Dilag spouses in favor of their children
valid?

Ruling

No. Clearly, the Deed of Absolute Sale in favor of the Dilag children executed
in 1973 was a simulated and fictitious transaction to defraud Arellano who
obtained a money judgment against the Dilag spouses. First of all, the
consideration was insufficient. Second, the Dilag spouses continued
exercising acts of ownership over the land as evidenced by the fact that they
leased it to Diancin in 1979. Third, the Dilag children relied on the Deed of
Absolute Sale executed in 1981 instead of the one in 1974 when they secured
the cancellation of the title. Fourth, even assuming that the children became
the valid owners of the land by virtue of the 1981 Deed of Absolute Sale, they
failed to exercise their right to redemption within the period provided by law.

Ada v. Baylon Case Digest (GR No. 182435)

Posted byPingApril 25, 2019Posted inUncategorizedTags:Law Notes

Ada v. Baylon

GR No. 182435

August 13, 2012

Facts

Florentino and Maximina Baylon died in 1961 and 1974, respectively. They
were survived by their children Rita, Victoria, Dolores, Panfila, Ramon, and
Lilia. Victoria died in 1981, survived by a daughter, Luz Adanza, one of the
petitioners. Ramon, on the other hand, was survived by respondent Florante
Baylon when he died in 1989.

The petitioners allege that Florentino and Maximina Baylon owned 43 parcels
of land in their lifetime and that Rita took possession of the said parcels of
land, appropriating for herself the income from the same. They further allege
that Rita used the income to buy two parcels of land. Because of this, the
petitioners wanted to include those two parcels of land in the partition by filing
a civil case.

During the pendency of the case, Rita executed a Deed of Donation dated
July 6, 1997, in favor of her nephew Florante Baylon. The petitioners now
seek to rescind the Deed of Donation.
Issue

Should rescission be granted?

Ruling

Yes. Pursuant to Article 1381 (4) of the Civil Code, contracts which “refer to
things under litigation, if they have been entered into by the defendant without
the knowledge and approval of the litigants or of competent judicial authority,
are rescissible.” The rescission of such a contract requires the concurrence of
the following:

1. The defendant, during the pendency of the case, enters into a contract
which refers to the thing subject of litigation

2. The said contract was entered into without the knowledge and approval of
the litigants or of a competent judicial authority

The purpose of Article 1381 (4) is to secure the possible effectivity of the
impending judgment by a court with respect to the thing subject of litigation.
The rescission not preconditioned upon the judicial determination as to the
ownership of the thing subject of litigation. Rita’s failure to inform and seek the
approval of the petitioners or the RTC regarding the conveyance gave the
petitioners the right to rescind the said donation.
 Yao Ka Sin Trading v CA
G.R. No. 53820. June 15, 1992
Art. 1317 – No one may contract in the name of another without authority.

Facts:
         Constancio B. Maglana, President and Chairman of the Board of PWCC, submitted a letter-offer
to YKS, to wit:
(a)     To deliver 45,000 bags of white cement;
(b)     At YKS option: a) P24.30 per 94 Ibs. bag net, FOB Cebu City; and b) P23.30 per 94 Ibs. bag net, FOB
Asturias Cebu;
(c)     With downpayment of P243k, et al.
         But 23 days after the signing of the confirmation of the said letter, PWCC Board disapproved the
same as evidenced on the minutes of their meeting.
         PWCC informed YKS of the disapproval of the letter-offer. But it issued the corresponding
Delivery Order of 10,000 bags of cement at P24.30, and Official Receipt for the payment of the same in
the amount of P243,000.00, which YKS accepted without protest.
         Then, a series of correspondence ensued between the parties: YKS demanding the delivery of
the balance 35,000 bags of cement as per letter-offer; while PWCC insisting on the full compliance with
the terms thereof and informing the latter that it is exercising the option therein stipulated.
         YKS filed a complaint against PWCC, on the basis of the aforesaid letter-offer, as accepted by
YKS, as a contract that binds the PWCC.
         The CFI Leyte ruled in favor of YKS, but reversed by the CA on the ground that the said letter-
offer is not binding upon it because Mr. Maglana was not authorized to make the offer and sign the
contract in behalf of the corporation as the Board rejected the same.

Issue:
          WoN Mr. Maglana, the PWCC President and Chairman, was empowered to execute the contract for
the corporation as implied from its  By-Laws.

Held:
          No, the Court holds that Mr. Maglana was not so authorized under the By-Laws of PWCC to enter
into contracts for the corporation independently of the Board of Directors.
          "ARTICLE 1317. No one may contract in the name of another without being authorized by the
latter, or unless he has by law a right to represent him. A contract entered into in the name of another by
one who has no authority or legal representation, or who has acted beyond his powers, shall be
unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has been
executed, before it is revoked by the other contracting party."
          In the case at bar, the letter-offer 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
YKS its decision to accept the new transaction involving only 10,000 bags of white cement within 10
days, otherwise it will return the latter’s payment in check of P243k.
          Thus, judgment appealed is AFFIRMED.

Paul Reiss, et. al. vs. Jose Memije

G.R. L-5447
March 1, 1910

FACTS
The defendant entered into a contract with contractor Buenaventura Kabalsa in repairing a house
in the city of Manila. Since the contractor is unable to secure credit, his materials, specifically
lumber, had to be purchased in cash in the plaintiff’s store. Hence, the work on the house was
delayed. The defendant accompanied the contractor to the plaintiff’s lumber yard and assured his
financial responsibility for the lumber needed for the repair of the house so an agreement has been
entered into.

Delivery was made and judgment in this action was rendered in favor of the plaintiff for the unpaid
balance.  The defendant had numerous allegations such as: not being allowed to amend his answer
to deny the plaintiff’s claim of a guaranty, there is no evidence in finding him assuming
responsibility for the payment of the lumber delivered to his contractor and even if he did, such was
not made in writing which makes it inadmissible under Sec 335 of the Code of Civil Procedure.

The trial court ruled that even if evidence be admitted and complaint amended, the weight of all the
evidence suggests that the plaintiff indeed delivered the said lumber to the contractor for the
construction of the defendant’s house.

ISSUES

Whether or not a guaranty was established; and  

Whether or not it is enforceable since it was not in writing

RULING

Petition is GRANTED. Under Sec. 335 of Act No. 195, in cases an agreement has been entered, such
should be made in writing otherwise, it would be unenforceable. Hence, any evidence obtained, in
this case for a debt, cannot be received without the writing or secondary evidence of its contents. In
order to ascertain the provision’s application, there must be a determination whether the promise
is an original or a collateral one.

If the promise is an original or independent one, whereby the promisor is primarily liable for
payment of debt, the promise is not within the statute. On the other hand, if it is collateral, whereby
the promisor acts as a surety, the promise must be in writing. The ultimate question is: “Upon
whose credit the goods were sold or the money advanced, or whatever other thing done which the
defendant by his promise procured be done?” This can be determined from the language and
expression used by the parties and from the examination of the circumstance showing the
understanding of the parties.

The Court is convinced that the credit for the lumber delivered by the plaintiff to the contractor was
extended SOLELY and EXCLUSIVELY to the defendant under verbal agreement and under the
provisions of the statute, it need not be in writing. It is clear that the contractor was unable to
secure credit so the payment for lumber was clearly undertaken by the defendant.

Cui v. Arellano University

G.R. No. L-15127
May 30, 1961
EMETERIO CUI, plaintiff-appellant,
vs.
ARELLANO UNIVERSITY, defendant-appellee

Facts:
Emeterio Cui was a law student in Arellano University from the school year
1948-1949 up to and including the first semester of his fourth year. During his
stay there, Cui received a scholarship from the university for scholastic merit.
Before Arellano University gave Cui the scholarship, however, the former was
made to sign the following:

“In consideration of the scholarship granted to me by the University, I hereby

waive my right to transfer to another school without having refunded to the
University the equivalent of my scholarship cash.”

On August 16, 1949, the Director of Private Schools issued Memorandum No.
38, stating that scholarships given to students for excellence in scholarship or
for leadership in extra-curricular activities should be given because of the
merits of said students and not merely to keep them in the school.

Francisco Capistrano, the brother of Cui’s mother, was the dean of the college
of law of Arellano University, but on Cui’s last semester in law school,
Capistrano transferred to the College of Law of Abad Santos University.
Wishing to follow his uncle, Cui left Arellano and enrolled in Abad Santos
University. When he was about to take the bar exam, Cui needed the
transcripts from Arellano, but the latter would not give it to him unless he paid
the sum Php1,033.87, the amount he got as scholarship during his enrolment
there. Cui had no choice but to pay the same so he could take the bar exam
but has since then petitioned the court for the reimbursement of the said
amount.

Issue:
Was the provision of the contract between Cui and Arellano University waiving
the former’s right to transfer to another school valid?

Ruling:
No. The contract was “repugnant to sound morality and civic honesty.” In
Gabriel v. Monte de Piedad, the Court said that “in order to declare a contract
void as against public policy, a court must find that the contract as to
consideration or the thing to be done contravenes some established interest
of society or is inconsistent with sound policy and good morals.” The policy
given by Memorandum No. 38 is a sound policy and therefore should be
followed by Arellano University.

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