HILL v VELOSO
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 3rd 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 3rd
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. before the execution of the 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
illegal transaction vitiated by fraud.
RURAL BANK OF STA. MARIA v CA
Parties: C: Rural Bank D: Behis O: 6 pomissory notes
w/ mortgage (the land in question)
- Delinquent in payment; sold the land w/
assumption of mortgage to the plaintiffs and
executed another agreement where the latter
is indebted to Behis; Before Behis died,
plaintiffs only paid 2ook plus (2.4m dapat)
meanwhile the loan in the Bank continued to
be delinquent; plaintiffs entered in to a new
agreement w/ bank as assignees of behis;
cristina, the wife, protested the final transfer
of the land to plaintiffs
- opinion is not an actionable deceit
Court held: No fraud. The omission or concealment
of the real purchase price could not have induced the
bank into giving its consent to the agreement; or that
the bank would not have otherwise given its consent
had it known of the real purchase price. The
consideration for the purchase could not have been the
determining cause for the petitioner bank to enter into
the memorandum of agreement.
- Plaintiffs had no duty, and therefore did not
act in bad faith, in failing to disclose the real
consideration of the sale
- w/ regard to the financial capacity, the bank
had other means and opportunity of verifying
the financial capacity
SONGCO v SELLNER
- They both owned a farm w/ sugar cane. Sugar
central declined to mill Sellner’s cane but
accepted Songco’s.
- Sellner decided to buy Songco’s and get a right
of way; he bought and executed 3 promissory
notes; defaulted on the 3rd; Songco allegedly
misrepresented as to the quantity of uncut
cane 3k sabi pero 2k lang raw
- Songco guaranteed the amt in the course of
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
produce of his fields. Impossible to believe that his
estimate honestly reflected his true opinion.
- He knew what these same fields had been
producing over a long period of years
HOWEVER, Sellner is still bound to pay. The
representation in question can only be considered
matter of opinion, and the quantity of sugar could not
be known with certainty until it should be harvested
and milled
- Undoubtedly Songco had better experience
aon which to form an opinion on the question
than Sellner. Nevertheless the latter could
judge with his own eyes as to the Character of
the cane, and it is shown that he measured the
fields and ascertained that they contained
96½ hectares
- a misrepresentation upon a mere matter of
SPS BUENAVENTURA v CA
Respondent-parents executed deeds of sale in favor
respondent-children. Petitioners (siblings w/
respondent-children so heirs din of the former) assails
the deeds of sale claiming that they are null and void
because
1) the respondent-children did not actually pay, hence
there is lack of consideration, and
2) assuming that there is consideration, the same is
grossly inadequate as to invalidate them
For the petitioners, said transfer of properties is a
“deliberate conspiracy designed to unjustly deprive the
rest of the compulsory heirs of their legitime.”
Court Held:
First, petitioners have no legal right to properties in
litis. There rights are merely inchoate and vests only
upon death of their parents. (Art 777) -- In their
overzealousness to safeguard their future legitime,
petitioners forget that theoretically, the sale of the lots
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