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Gaite v. Fonacier

Facts: Fonacier was the owner of an iron lode mineral claims. In a deed of assignment, Fonacierassigned Gaite to enter into contracts in his behalf to develop the mining claims.

Gaite in turn executed a general assignment (Record on Appeal, pp. 17-19) conveyingthe development and exploitation of said mining claims into the Larap Iron Mines, a single

proprietorship owned solely by and belonging to him.

For some reason or another, Isabelo Fonacier decided to revoke the authority granted byhim to Gaite to exploit and develop the mining claims in question, and Gaite assented theretosubject to certain conditions.

In the revocation including the trasfer subject to certain conditions, it was stated thatFonacier and the others would pay first 10, 000 to Gaite and:

b. The balance of SIXTY-FIVE THOUSAND PESOS (P65,000.00) will be paid from andout of the first letter of credit covering the first shipment of iron ores and of the first amountderived from the local sale of iron ore made by the Larap Mines & Smelting Co. Inc., its assigns,administrators, or successors in interests.

Fonacier failed to pay Gaite the remaining balance of P65, 000.

Issue: W/N the shipment or local sale of the iron ore is a condition precedent (or suspensive) tothe payment of the balance of P65,000.00.

Ruling: NO. It was only a suspensive period or term.

To subordinate the obligation to pay the remaining P65,000.00 to the sale or shipment ofthe ore as a condition precedent, would be tantamount to leaving the payment at the discretion ofthe debtor, for the sale or shipment could not be made unless the appellants took steps to sell theore.

Assuming that there could be doubt whether by the wording of the contract the partiesindented a suspensive condition or a suspensive period (dies ad quem) for the payment of theP65,000.00, the rules of interpretation would incline the scales in favor of "the greater reciprocityof interests", since sale is essentially onerous. The Civil Code of the Philippines, Article 1378,paragraph 1, in fine, provides:

If the contract is onerous, the doubt shall be settled in favor of the greatest reciprocity of interests.

and there can be no question that greater reciprocity obtains if the buyer' obligation isdeemed to be actually existing, with only its maturity (due date) postponed or deferred, that ifsuch obligation were viewed as non-existent or not binding until the ore was sold.

Quiroga v. CA

Facts: A contract was entered between Quiroga and Parsons for the exclusive sale of Quirogabeds in the Visayas Islands, specifically Iloilo.

Quiroga furnishes the beds to Parson, who in turn pay the price in the manner stipulated.Quiroga provided a discount of 20 to 25% for the beds, depending on their class.

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Later, Quiroga filed a case against Parsons for violation of its obligation not to sell thebeds at higher price than those of the invoices, etc. (which are not expressly stipulated in thecontract, except for the manner the beds are ordered by the dozen). Quiroga maintains thatParson is his agent for the sale of his beds in Iloilo, and that the contract is that of commercialagency.

Issue: Whether the contact is that of sale or of commercial agency.

Held: The contract between the parties is a contract of purchase and sale as Parson, by receivingthe bed, was necessarily obliged to pay their price within the term fixed, without any otherconsideration and regardless as to whether he had or had not sold the bed. The wordscommission on sales in the contract is nothing else than a mere discount on the invoice price.Further, the word agency used thereon only expresses that Parson was the sole seller ofQuiroga beds in the Visayas. None of the other clauses of the contract are not incompatible withthe contract of purchase and sale.

Puyat & Sons v. Arco Amusement

Facts: Gonzalo Puyat & Sons is the exclusive agent of Starr Piano Company of Richmond,Indiana USA, in the Philippines. Teatro Arco, or Arco Amusement Company, desiring to equip itscinematograph with sound reproducing devices, approached Puyat. It was agreed by the partiesthat Puyat would in behalf of Arco order equipment from Starr Piano and that Arco would payPuyat in addition to price of the equipment, 10% commission plus all expenses such as freight,insurance, banking charges, cables, etc. Puyat informed Arco that the price of the equipment was$1,700, to which Arco agreed. Later, a similar arrangement was made by Arco for the purchase ofsimilar equipment for $1,600 with 10% commission, with Puyat charging an additional flat chargeof $160 for all expenses and charges. 3 years later, Arco learned that the price quoted by Puyaton the 2 orders were not the net price but the list price for the equipment. Arco filed a complaintwith the trial court (CFI) demanding reimbursement from said overpriced sales. The trial courtruled in favor of Puyat, but the Court of Appeals reversed such decision and declared Puyat anagent of Arco Amusement in the purchase of said equipment.

Issue: Whether the agreement made between Puyat and Arco Amusement is that of purchaseand sale or that of agency.

Held: Gonzalo Puyat & Sons cannot be the agent of Arco Amusement in the purchase ofequipment from Starr Piano Company as Puyat & Sons is already the exclusive agent of StarrPiano in the Philippines. Puyat cannot be the agent of both vendor and purchaser. The fact that acommission was offered to the other does not necessarily mean that the latter has become theagent of the former, as this was only an additional price which Arco bound itself to pay and whichis not incompatible with the contract of purchase and sale. Puyat is not bound to reimburse theprofit acquired in the transaction, as this is the very essence of commerce involving middlemenand merchants. The contract is the law between the parties. What does not appear on the face ofthe contract should be regarded as dealers or traders talk which cannot bind either party. Notevery concealment is fraud, short of fraud, and such as that in this case, is considered as

business acumen.

SONNY LO, petitioner, vs. KJS ECO-FORMWORK SYSTEM PHIL., INC., respondent.

Facts: Lo was a contractor for buildings while the respondent was a engaged in steelscaffoldings.

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Facts: Fernando Canullas and Mercedes Calimlim were married in 1962. They lived in a smallhouse on a 891 sq.m. residential land in Pangasinan (Bagabac, Bugallon). When Canullas fatherdied in 1965, he inherited the land. In 1978, he abandoned the family and lived with CorazonDaguines. In 1980, he sold the property to Daguines for P2,000. Daguines filed a complaint forquieting of title and damages against Mercedes, after the former was unable to take possessionof the house and lot. The trial court (CFI) ruled in favor of Daguines, ruling that she is the ownerof of the land as well as of the house erected on said land. Upon reconsideration, thejudgment was modified wherein Daguines is the owner of the land and 10 coconut trees thereon,and the sale of the conjugal house including 3 coconuts and other crops planted during theconjugal relation of the spouses is null and void.

Issue: Whether the sale made by Fernando Canullas to Corazon Daguines was valid.

Held: The contract of sale was null and void for being contrary to morals and public policy,pursuant to Article 1409 of the Civil Code. The sale was made by a husband in favor of aconcubine after he had abandoned his family and left the conjugal home where his wife andchildren lived and from whence they derived their support. That sale was subversive of thestability of the family, a basic social institution which public policy cherishes and protects.

Rubias v. Batiller

51 SCRA 120

Facts: Francisco Militante claimed ownership over land in Iloilo (Bo. Gen. Luna, Barotac Viejo), towhich he filed an application for registration of title with the CFI Iloilo. The application wasopposed by the Director of Lands. The CFI dismissed the registration. Pending disposal of theappeal in the Court of Appeals, Militante sold the land to Domingo Rubias, his son-in-law and alawyer by profession. Rubias declared the land for taxation purposes under various taxdeclarations and land taxes. The CA likewise dismissed Militantes application. Meanwhile, otherclaimants declared the same land for taxation purposes (tax declaration and land tax), one of

whom is Isaias Batiller. In 1960, Rubias filed a forcible entry case against Batiller before themunicipal court, which the latter ruled in favor of Batiller. Rubias appealed to the CFI, whichaffirmed the judgment in favor of Batiller. In 1964, Rubias filed a suit to recover ownership andpossession of land to claim portions of lot, bought from Militante, which were occupied by Batiller.The lower court (CFI) dismissed the case. Rubias appealed to the Court of appeals whichcertified the appeal to the Supreme Court for involving purely legal questions.

Issue: Whether the sale of the lot by Francisco Militante to his son-in-law Domingo Rubias is validfor the latter to claim ownership over said lot

Held: The purchase by a lawyer of the property in litigation from his client is categoricallyprohibited by Article 1491, paragraph (5) of the Civil Code, and that consequently, Rubiaspurchase of the property in litigation from his father-in-law was void and could produce no legaleffect (Article 1409 [7] of the Civil Code). It is void and not voidable (as the 1929 case of Directorof Lands v. Abagat which declared such purchase void superceded the 1911 case of Wolfson v.Estate of Martinez which declared such purchase mere voidable). The nullity of prohibitedcontracts is definite and permanent and cannot be cured by ratification. The public interest andpublic policy remain paramount and do not permit of compromise or ratification. However, when

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the causes of nullity which have ceased to exist, a second contract may be executed and wouldthen be valid from its execution; however, it does not retroact to the date of the first contract.

Still, Rubias complaint, to be declared absolute owner of the land and to be restored topossession thereof with damages, was bereft of any factual or legal basis. The CAs final

judgment affirming the dismissal of Militantes application of registration made it conclusive thatMilitante lack rightful claim or title to the land. There was no right or title to the land that could betransferred or sold by Militantes purported sale in favor of Rubias in 1956.

Philippine Trust Co. v. Roldan

99 Phil 392

Facts: 17 parcels of land (Guiguinto, Bulacan) were inherited by Mariano L. Bernardo from hisfather. Socorro Roldan, his stepmother, was appointed by the court as his guardian. Roldan was

able to secure permission later on to sell his wards property for the alleged purpose of investingthe proceeds thereof in a residential house in Manila, to which Mariano allegedly desired. Roldansold the parcels of land to his brother-in-law Dr. Fidel C. Ramos, to which a judicial confirmationof the sale was obtained. The next day, Ramos executed a deed of conveyance covering thesame parcels for the sum of P15,000. Two months later, Roldan sold 4 parcels to Emilio Cruz forP3,000, reserving to herself the right to purchase. The Philippine Trust Company replaced Roldanas guardian a year later, and thereafter, filed a complaint in the lower court to annul the contractsregarding the parcel of land pursuant to the prohibitions provided in Article 1459. The trial courtupheld the validity of the contracts but allowing the minor to repurchase the land for P15,000within one year.

Issue: Whether the contracts of sale involving the 17 parcels of land are valid.

Held: The three contracts of sale are void; the first two for violation of article 1459 of the CivilCode; and the third because Roldan could pass no title to Emilio Cruz. The annulment carrieswith is (Article 1303 Civil Code) the obligation of Roldan to return the 17 parcels together withtheir fruits and the duty of the minor, through his guardian to repay P14,700 with legal interest.Guardianship is a trust of the highest order, and the trustee cannot be allowed to have anyinducement to neglect his wards interest and in line with the courts suspicion whenever theguardian acquires the wards property, the Court has no hesitation to declare that, in the eyes ofthe law, the guardian (Roldan) took by purchase her wards parcels (thru Dr. Ramos), and thatArticle 1459 of the Civil Code applies. The reconveyance of the property to Roldan after beingsold to her brother-in-law within a week of each other, or a day after the judicial confirmation of

sale was obtained, raises suspicions. Even if arguendo she acted without malice, the temptationwhich naturally besets a guardian so circumstanced, necessitates the annulment of thetransaction, even if no actual collusion is proved (so hard to prove) between such guardian andthe intermediate purchaser. This would uphold a sound principle of equity and justice.

Fabillo v. IAC, Murillo

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Facts: Fabillo inherited a land. He lost a land to a case. Now, he wanted the services of Murilloas his lawyer in order to get the land back.

Murillo requested that if he would win the case, as a contingent fee, Fabillo should give40% of the money value of the house and lot. They have agreed to the said stipulation.

Murillo and Fabillo died. The heirs of Fabillo are now questioning the validity of the

ownership of Murillo based on Art. 1491 of the CC.

Issue: W/N Murillo is the owner of the land.

Ruling: YES. a contract between a lawyer and his client stipulating a contingent fee is notcovered by said prohibition under Article 1491 (5) of the Civil Code because the payment of saidfee is not made during the pendency of the litigation but only after judgment has been rendered inthe case handled by the lawyer. In fact, under the 1988 Code of Professional Responsibility, alawyer may have a lien over funds and property of his client and may apply so much thereof asmay be necessary to satisfy his lawful fees and disbursements. 10

As long as the lawyer does not exert undue influence on his client, that no fraud is committed orimposition applied, or that the compensation is clearly not excessive as to amount to extortion, acontract for contingent fee is valid and enforceable. 11 Moreover, contingent fees were impliedlysanctioned by No. 13 of the Canons of Professional Ethics which governed lawyer-clientrelationships when the contract of services was entered into between the Fabillo spouses andMurillo. 12