HILL v VELOSO
before the execution of the
Parties: D: Veloso, Franco; C: Michael & Co
O: pay 6,319.33 w/ int, 500/m0
Defense: defrauded by Franco, co-debtor to sign a
blank paper that would purportedly be a promissory
note acknowledging debt to Levering, guardiam of
some minors and NOT to Michael & Co for the said
products
Court held: No proof of error and deceit,
contradicting testimonies, 2 yrs after said promissory
note, she answered in a suit commenced by the
guardian that she doesn’t owe her anything
1338 does not apply, Franco is not ONE of the
contracting parties who may have deceitfully induced
the other contracting party, Michael & Co., to execute
the contract.
- They both are but one single contracting
party in contractual relation with, or as
against, Michael & Co.
Applying 1342 (misrep by a 3 rd person), there is no
reason for making one of the parties suffer for the
consequences of the act of a third person in whom the
other contracting party may have reposed an
imprudent confidence. HOWEVER, when the third
person causes the deceit in connivance with, or at
least with the knowledge, without protest, of the
favored contracting party, the latter is NOT exempt
fro responsibility – accomplice to the fraud w/c then
makes the contract voidable; another case is when 3 rd
person NOT in connivance but leads the contracting
party to error, this may vitiate consent under 1331
AZARRAGA v GAY
Parties: S: Aza B: Gay
- 60ha lang yung 2nd parcel not 96ha
Court held: No fraud. Before execution of the
contract, defendant went over the plaintiff's land and
made her own calculations as to the area of said two
parcels. Furthermore, it was the defendant who
intrusted the drawing of the deed of sale to her
attorney and notary, Hontiveros.
- She had ample opportunity to appraise
herself of the condition of the land and
plaintif fdid nothing to prevent her from
making such investigation as she deemed fit
- she knew that the area of the 2nd parcel was
by the fact that she received the document
Exhibit 4.
contract
SIERRA v CA
Parties: C: Sierra D: Ebarle O: pay 85k, promissory
Defense: amt owed is only 20k, loan of their mother;
they signed the notes bec. Sierra assured them that
the documents were a mere formality that he had to
show his business partner
Court held: RoC – when evidence is reduced to
writing, there is no other evidence of the terms of the
agreement other than the contents of the writing;
parol evidence (EXTRINSIC. Evidence relating to a
contract but NOT appearing on the face of the contract
because it comes from other sources, such as statements
between the parties or the circumstances surrounding the
agreement.); educated ppl, operate business, hacienda,
professor, degree holders; notes are in plain English;
no fine print, hidden meanings; simple promise to pay
- If she only received only 20k, why would
they all sign a promissory note way beyond
what she owes; kahit may apprehensions,
none of them voiced his/her own and made
efforts to dissuade others. EVEN MORE,
Having signed one note in the morning, all of
them again signed the second promissory
note in the afternoon, again with no one
expressing his or her misgivings.
- The deceit must be serious. The fraud is
serious when it is sufficient to impress, or to
lead an ordinarily prudent person into error;
that which cannot deceive a prudent person
cannot be a ground for nullity.
- It is well settled that the evidentiary nature
of public documents must be sustained in the
absence of strong, complete, and conclusive
proof of its nullity.
TUASON v MARQUEZ
Parties: C: Marquez D: Tuason O: pay 14,4 for the
purchace of an electric light plant
- Plant was sold under execution by judgment
and was bought by brother of Marquez
- Granted Lucena Elec Co a 35 yr franchise,
didn’t turn out well so Marquez gave it up
(Public Utility Comm who in turn, cancelled
the same)
- Tuason – special license and eventually
granted franchise provided they renovate
- Concealed fact of loss of franchise
Court held:
- The innocent non-disclosure of a fact does
not affect the formation of the contract or
operate to discharge the parties from their
agreement.
CAVEAT EMPTOR Estoppel by Laches applies
here! The plaintiff operated the electric light plant for
about sixteen months without question; he made the
first payment on the contract without protest; he
bestirred himself to secure what damages he could
from the defendant only after the venture had proved
disastrous and only after the property had passed into
the hands of a third party.
LAURETA v TRINIDAD
Parties: Seller: Franciso Buyer: Trinidad
- House, commonwealth vill, QC
Court held: NO fraud. First, it was the petitioner
who admittedly approached the private respondent,
who never advertised the property nor offered it for
sale to her. Second, the petitioner had full
opportunity to inspect the premises, including the
drainage canals indicated in the vicinity map that was
furnished her. Third, it is assumed that she made her
appraisal of the property not with the untrained eye of
the ordinary prospective buyer but with the
experience and even expertise of the licensed real
estate broker that she was
Fourth, seeing that the lot was depressed and there
was a drainage lot abutting it, she cannot say she was
not forewarned of the possibility that the place might
be flooded.
 - What we see here is a bad bargain, not an - Songco guaranteed the amt in the course of
illegal transaction vitiated by fraud. negotiations and thereby presented evidence
during trial that the disparity would have
been less if the cutting and hauling of the
cane had been more expeditiously
conducted.
Court held: Songco greatly exaggerated the probably
RURAL BANK OF STA. MARIA v CA produce of his fields. Impossible to believe that his
Parties: C: Rural Bank D: Behis O: 6 pomissory estimate honestly reflected his true opinion.
notes w/ mortgage (the land in question) - He knew what these same fields had been
- Delinquent in payment; sold the land w/ producing over a long period of years
assumption of mortgage to the plaintiffs and HOWEVER, Sellner is still bound to pay. The
executed another agreement where the latter representation in question can only be considered
is indebted to Behis; Before Behis died, matter of opinion, and the quantity of sugar could not
plaintiffs only paid 2ook plus (2.4m dapat) be known with certainty until it should be harvested
meanwhile the loan in the Bank continued to and milled
be delinquent; plaintiffs entered in to a new - Undoubtedly Songco had better experience
agreement w/ bank as assignees of behis; aon which to form an opinion on the
cristina, the wife, protested the final transfer question than Sellner. Nevertheless the latter
of the land to plaintiffs could judge with his own eyes as to the
- Character of the cane, and it is shown that he
Court held: No fraud. The omission or measured the fields and ascertained that
concealment of the real purchase price could not have they contained 96½ hectares
induced the bank into giving its consent to the - a misrepresentation upon a mere matter of
agreement; or that the bank would not have otherwise opinion is not an actionable deceit
given its consent had it known of the real purchase
price. The consideration for the purchase could not SPS BUENAVENTURA v CA
have been the determining cause for the petitioner Respondent-parents executed deeds of sale in favor
bank to enter into the memorandum of agreement. respondent-children. Petitioners (siblings w/
- Plaintiffs had no duty, and therefore did not respondent-children so heirs din of the former) assails
act in bad faith, in failing to disclose the real the deeds of sale claiming that they are null and void
consideration of the sale because
- w/ regard to the financial capacity, the bank 1) the respondent-children did not actually pay, hence
had other means and opportunity of there is lack of consideration, and
verifying the financial capacity 2) assuming that there is consideration, the same is
grossly inadequate as to invalidate them
For the petitioners, said transfer of properties is a
SONGCO v SELLNER “deliberate conspiracy designed to unjustly deprive
- They both owned a farm w/ sugar cane. the rest of the compulsory heirs of their legitime.”
Sugar central declined to mill Sellner’s cane
but accepted Songco’s. Court Held:
- Sellner decided to buy Songco’s and get a First, petitioners have no legal right to properties in
right of way; he bought and executed 3 litis. There rights are merely inchoate and vests only
promissory notes; defaulted on the 3 rd; upon death of their parents. (Art 777) -- In their
Songco allegedly misrepresented as to the overzealousness to safeguard their future legitime,
quantity of uncut cane 3k sabi pero 2k lang petitioners forget that theoretically, the sale of the lots
raw to their siblings does not affect the value of their
parents’ estate. While the sale of the lots reduced
the estate, cash of equivalent value replaced
the lots taken from the estate
1st contention: Petitioners assert that their
respondent siblings did not actually pay the prices
stated in the Deeds of Sale to their respondent father,
hence, the Deeds are void for lack of consideration.
It is not the act of payment of price that
determines the validity of a contract of sale.
A contract of sale becomes a binding and valid
contract upon the meeting of the minds as to price. If
there is a meeting of the minds as to the price, the
contract of sale is valid, despite the manner of
payment, or even the breach of that manner of
payment.
Failure to pay is different from lack of
consideration. The former results in a right to
demand the fulfillment or cancellation of the
obligation under an existing valid contract while the
latter prevents the existence of a valid contract.
In this case, there was consideration as seen from the
Deed of Sales presented (cost of the lots) and as of the
filing of the complaint, respondent siblings have also
fully paid the price to their respondent father.
2nd contention: Petitioners failed to prove fraud,
mistake or undue influence upon their parents who
executed the deeds of sale (Art 1355) or that there was
defect in the consent, or that the parties really
intended a donation or some other act or contract (Art
1470).
There is no requirement that the price be
equal to the exact value of the subject matter
of sale.
In the instant case, the trial court found that the lots
were sold for a valid consideration, and that the
defendant children actually paid the purchase price
stipulated in their respective Deeds of Sale. Actual
payment of the purchase price by the buyer to
the seller is a factual finding that is now
conclusive upon us.
Art. 1352. Contracts without cause, or with unlawful
cause, produce no effect whatever. The cause is
unlawful if it is contrary to law, morals, good customs,
public order or public policy.
Art. 1355. Except in cases specified by law, lesion or
inadequacy of cause shall not invalidate a contract,
unless there has been fraud, mistake or undue
influence.
Art. 1470. Gross inadequacy of price does not affect a
contract of sale, except as may indicate a defect in the
consent, or that the parties really intended a donation
or some other act or contract.
Art. 1471. If the price is simulated, the sale is void, but
the act may be shown to have been in reality a
donation or some other act or contract