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Peuio Constantino Si. owneu seveial lanus, one of which is an uniegisteieu paicel of lanu consisting of 24u
sq m. situateu in Bagonoy Bulacan. Be was suiviveu by his 6 chiluien:
- Peuio }i. (gianufathei of the iesponuents)
- Antonia (uieu without issue)
- Claia (uieu without issue)
- Biuno (suiviveu by his 6 chiluien incluuing petitionei Casimiia)
- Euuaiuo (suiviveu by his uaughtei Nauia)
- Santiago (suiviveu by his S chiluien incluuing petitionei 0scai)

Responuents Asuncion anu }osefina, gieat gianuchiluien of Peuio Si. in iepiesentation of theii gianufathei,
Peuio }i. fileu a complaint against petitioneis foi the nullification of the uocument "Pagmamana sa Labas ng
Bukuman" anu two tax ueclaiations; they likewise askeu foi the ieinstatement of Tax Beclaiation 2u814 in
the name of Peuio Si.

Responuents allegeu that in 0ctobei 1998, petitioneis asseiteu theii claim of owneiship ovei the 24u sq m
lanu owneu by Peuio Si. to theii exclusion. They latei on leaineu that Tax Bec 2u814 was cancelleu anu
anothei tax uec was unlawfully issueu in the name of petitionei 0scai anu cousin Naxima. They allegeu
that the unlawful issuance was uue to the execution of a simulateu, fabiicateu anu fictitious uocument
uenominateu as "Pagmamana sa Labas ng Bukuman" wheie petitioneis misiepiesenteu themselves as the
sole anu only heiis of Peuio Si. Saiu lanu was fuithei uiviueu equally between petitionei 0scai anu
Naxima iesulting to the issuance of anothei tax ueclaiation.

0n the othei hanu, the petitioneis aveiieu that iesponuents have no cause of action because theii lawful
shaies ovei the estate of Peuio Si. hau alieauy been tiansfeiieu to petitioneis as eviuenceu by the Beeu of
Extiajuuicial Settlement with Waivei executeu on Becembei S, 1968 by Angelo anu Naiia Constantino
(mothei of Asuncion), Aicauio Constantino anu Neiceues Constantino, all heiis of Peuio }i. In the saiu
ueeu, they aujuuicateu among themselves to the exclusion of othei heiis, the paicel of lanu with an aiea of
192 sq m by misiepiesenting that they weie the only legitimate heiis of Peuio Si.

Consiueiing the abovementioneu ciicumstances, petitioneis position was that the ueeu of extiajuuicial
settlement with waivei was acquiesceu in by the othei heiis of Peuio Si. on the unueistanuing that the
iesponuent heiis of Peuio }i woulu no longei shaie anu paiticipate in the settlement anu paitition of the
iemaining lot coveieu by the Pagmamana sa Labas ng Bukuman.

844<>F Whethei the uoctiine of in paii uelicto is applicable

=>C;F No. Although the paities thiough the ueeus they sepaiately executeu uepiiveu each othei of theii
iightful shaies in the two lots subject of the sepaiate contiacts, the piinciple of in paii uelicto cannot be
applieu. The inapplicability is uictateu not only by the fact that two ueeus, not one contiact, aie involveu,
but because of the moie impoitant ieason that such an application woulu iesult in the valiuation of both
ueeus insteau of theii nullification as necessitateu by theii illegality. It must be emphasizeu that the
unueilying agieement iesulting in the execution of the ueeus is nothing but a voiu agieement.

It was, in ieality, an assignment of specific poitions of the estate of Peuio Si., without iesoiting to a lawful
paitition of estate as both sets of heiis intenueu to excluue the othei heiis.

ART. 14u9. The following contiacts aie inexistent anu voiu fiom the beginning:

(1) Those whose cause, object oi puipose is contiaiy to law; moials, goou customs, public oiuei oi public
policy;
xxx xxx xxx

Coiollaiily, given the chaiactei anu natuie of the ueeus as being voiu anu inexistent, it has, as a
consequence, of no foice anu effect fiom the beginning, as if it hau nevei been enteieu into anu which
cannot be valiuateu eithei by time oi iatification.

Wheiefoie, the !./0.0.&. (. 2.3.( &/ 45650.& anu Extiajuuicial Settlement with Waivei aie heieby
ueclaieu voiu without piejuuice to the paitition of the estate of Peuio Constantino Si. with the full
paiticipation of all the lattei's heiis.
-------


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Latin foi "in equal fault," $& ,.'$ -"7$8#% connotes that two oi moie people aie at fault oi aie guilty of a
ciime. Neithei couits of law noi equity will inteipose to giant ielief to the paities, when an illegal
agieement has been maue, anu both paities stanu $& ,.'$ -"7$8#%.

0nuei the ,.'$ -"7$8#% uoctiine, the paities
to a contioveisy aie equally culpable oi guilty, they shall have no action against each othei, anu it shall
leave the paities wheie it finus them. This uoctiine finus expiession in the maxims ""9 -%7% 0.7% &%& %'$#5'
.8#$%" anu "$& ,.'$ -"7$8#% ,%#$%' "(# 8%&-$#$% -":"&-"&#$(*"

When ciicumstances aie piesenteu foi the application of such uoctiine, couits will take a hanu off stance in
inteipieting the contiact foi oi against any of the paities.

As a uoctiine in civil law, the iule on ,.'$ -"7$8#% is piincipally goveineu by Aiticles 1411 anu 1412 of the
Civil Coue

The rescission of a contract of sale is not a prejudicial question that will warrant the
suspension of the criminal proceedings commenced to prosecute the buyer for violations
of the Bouncing Checks Law (Batas Pambansa Blg. 22) arising from the dishonor of the
checks the buyer issued in connection with the sale.

To avoid unjust enrichment to a party from resulting out of a substantially performed
contract, the principle of quantum meruit may be used to determine his compensation in
the absence of a written agreement for that purpose. The principle of quantum meruit
justifies the payment of the reasonable value of the services rendered by him.

This Court has recognized a penalty clause as an accessory obligation which
the parties attach to a principal obligation for the purpose of insuring the
performance thereof by imposing on the debtor a special prestation (generally
consisting in the payment of a sum of money) in case the obligation is not
fulfilled or is irregularly or inadequately fulfilled. The enforcement of the
penalty can be demanded by the creditor only when the non-performance is
due to the fault or fraud of the debtor. The non-performance gives rise to the
presumption of fault; in order to avoid the payment of the penalty, the debtor
has the burden of proving an excuse the failure of the performance was due
to either force majeure or the acts of the creditor himself

In a contract to sell, payment of the price is a positive suspensive condition,
failure of which is not a breach of contract warranting rescission under Art
1191 but rather just an event that prevents the supposed seller from being
bound to convey title to the supposed buyer. Art 1191 cannot be applied to
sales of real property on installment since they are governed by Maceda Law.
Tender of payment is the manifestation by the debtor of a desire to comply
with or pay an obligation. If refused without just cause, the tender of payment
will discharge the debtor of the obligation to pay but only after a valid
consignation of the sum due shall have been made with the proper court.
Consignation is the deposit of the proper amount in accordance with rules
prescribed by law after the tender of payment has been refused or because of
circumstances which render direct payment to the creditor impossible or
inadvisable. Accrual of interest on the obligation will be suspended from the
date of such tender. But when the tender of payment is not accompanied by
the means of payment and the debtor did not take any immediate step to make
a consignation, then the interest is not suspended from the time of such tender.

acceptance may be shown by the acts, conduct, or words of a party recognizing
the existence of the contract of sale

unless the parties stipulate, personal notice to the mortgagor in extrajudicial foreclosure
proceedings is not necessary116 because Section 3117 of Act 3135 only requires the posting of
the notice of sale in three public places and the publication of that notice in a newspaper of
general circulation. The failure of DBP to comply with their contractual agreement with
petitioners, i.e., to send notice, is a breach sufficient to invalidate the foreclosure sale. Thus,
the payment of interest and penalties in loans is allowed only if the parties agreed to it and
reduced their agreement in writing.

Mutual restitution is required in cases involving rescission
under Article 1191. This means bringing the parties back to their original
status prior to the inception of the contract. Article 1385 of the Civil Code
provides

The parties verbal partition is valid, and has been ratified by their taking possession of
their respective shares. Anent the issue of oral partition, We sustain the validity of said partition. An
agreement of partition may be made orally or in writing. An oral agreement for the partition of the property
owned in common is valid and enforceable upon the parties. The Statute of Frauds has no operation in this
kind of agreements, for partition is not a conveyance of property but simply a segregation and designation of
the part of the property which belong to the co-owners. A parol partition may also be sustained on the
ground that the parties thereto have acquiesced in and ratified the partition by taking possession in severalty,
exercising acts of ownership with respect thereto, or otherwise recognizing the existence of the partition. A
possessor of real estate property is presumed to have title thereto unless the adverse claimant
establishes a better right.59 Moreover, under Article 541 of the Civil Code, one who possesses
in the concept of owner has in his favor the legal presumption that he possesses with a just
title, and he cannot be obliged to show or prove it. Similarly, Article 433 of the Civil Code
provides that actual possession under a claim of ownership raises a disputable presumption
of ownership. Thus, actual possession and exercise of dominion over definite portions of the
property in accordance with an alleged partition are considered strong proof of an oral
partition60 which the Court will not hesitate to uphold.

Contracts are perfected by mere consent, which is manifested by the meeting of the offer
and the acceptance upon the thing and the cause which are to constitute the contract.
20

The requisite acceptance of the offer is expressed in Article 1319 of the Civil Code which
states

Substantial breach substantial, unlike slight or casual breaches of contract, are fundamental
breaches that defeat the object of the parties in entering into an agreement, since the law is
not concerned with trifles. Depends upon the attending circumstances.

Through estoppel, an admission or representation is rendered conclusive upon
the person making it, and cannot be denied or disproved as against the person
relying on it.
16
This doctrine is based on the grounds of public policy, fair dealing,
good faith, and justice and its purpose is to forbid one to speak against his own
act, representations or commitments to the injury of one to whom they were
directed and who reasonably relied on it.
17
Thus, in order for this doctrine to
operate, a representation must have been made to the detriment of another who
relied on it. In other words, estoppel would not lie against one who, in the first
place, did not make any representation. The general rule in redemption is that it
is not sufficient that a person offering to redeem manifests his desire to do so.
The statement of intention must be accompanied by an actual and simultaneous
tender of payment. This constitutes the exercise of the right to repurchase.

Compensation is a mode of extinguishing to the concurrent amount the obligations of
persons who in their own right and as principals are reciprocally debtors and creditors of
each other. Legal compensation takes place by operation of law when all the requisites are
present, as opposed to conventional compensation which takes place when the parties agree
to compensate their mutual obligations even in the absence of some requisites.18 Legal
compensation requires the concurrence of the following conditions:
(1) That each one of the obligors be bound principally, and that he be at the same time a principal creditor
of the other;
(2) That both debts consist in a sum of money, or if the things due are consumable, they be of the same
kind, and also of the same quality if the latter has been stated;
(3) (4) (5) commenced by third persons and communicated in due time to the debtor.19
That the two debts be due; That they be liquidated and demandable; That over neither of them there be any
retention or controversy,

In a contract to sell, the seller retains ownership of the property until the buyer
has paid the price in full. A -buyer who covertly usurps the seller's ownership of
the property prior to the full payment of the price is in breach of the contract and
the seller is entitled to rescission because the breach is substantial and
fundamental as it defeats the very object of the parties in entering into the
contract to sell. n the case at bar, while there was no written agreement evincing
the intention of the parties to enter into a contract to sell, its existence and partial
execution were sufficiently established by, and may be reasonably inferred from
the actuations of the parties, n the case at bar, we find that respondent Rowenas
act of transferring the title to the subject land in her name, without the knowledge
and consent of petitioners and despite non-payment of the full price thereof,
constitutes a substantial and fundamental breach of the contract to sell.