Facts: The Defendant Philippine Holding, Inc.

is the former owner of a piece of land located at

Soler St., Sta. Cruz, Manila, and a two storey building erected thereon, consisting of six units.
The owner Philippine Holding, Inc. secured an order from the City Engineer of Manila to
demolish the building. Antonio Young, then a tenant of said Unit 1352, filed an action to annul
the City Engineer's demolition As an incident in said case, the parties submitted a Compromise
Agreement to the Court. Paragraph 3 of said agreement provides that plaintiff (Antonio
S.Young) and Rebecca Young and all persons claiming rights under them bind themselves to
voluntarily and peacefully vacate the premises which they were occupying as lessees which are
the subject of the condemnation and demolition order and to surrender possession. A case was
filed to the RTC and Young contended that even assuming that her supposed right of first
refusal is a stipulation for the benefit of a third person, she did not inform the obligor of her
acceptance as required by the second paragraph of Article 1311 of the Civil Code.

Issue: Whether or not Young’s stipulation that gave her the right of refusal is a stipulation pour
autrui

Ruling: The stipulation that young gave may be a stipulation pour autrui but it is unrebutted
that she did not communicate her acceptance whether expressly or impliedly. The requisites of
a stipulation pour autrui or a stipulation in favor of a third person are the following: (1) there
must be a stipulation in favor of a third person (2) the stipulation must be a part, not the whole
of the contract (3) the contracting parties must have clearly and deliberately conferred a favor
upon a third person, not a mere incidental benefit or interest (4) the third person must have
communicated his acceptance to the obligor before its revocation. (5) Neither of the
contracting parties bears the legal representation or authorization of the third party. The
argument is pointless, considering that the sale of subject property to some other person or
entity constitutes in effect a revocation of the grant of the right of first refusal to Rebecca C.
Young.
PHILIPPINE BANK OF COMMUNICATION, petitioner, vs. COURT OF APPEALS and GAW LE JA
CHUA, respondents.

G.R. No. 106858.  September 5, 1997

FACTS:

·         In 1984, Philippine Bank of Communication (PBCom) filed two (2) collection suits against,
among  others, Joseph L. G. Chua, husband of herein private respondent, who acted as one of
the sureties for the financial obligations of Fortune Motors (Phils.), Inc. and the Forte Merchant
Finance, Inc., with the petitioner.   After the filing of the complaint, the co-defendants of Joseph
L.G. Chua  had no more properties left to answer for their obligations to the bank.   Since
Joseph L.G. Chua bound himself solidarity with the two principal debtors, the bank chose to run
after Joseph L.G. Chua who was found to own a property situated in Dasmarinas, Makati.  Said
property was, however, discovered to have been earlier transferred to Jaleco Development
Corporation by virtue of a Deed of Exchange dated October 24, 1983 executed by Joseph L.G.
Chua with the conformity of private respondent.   The bank considered such transfer as in fraud
of creditors and thereby sought its annulment before the Regional Trial Court of Makati,
docketed as Civil Case No.7889.  A notice of Lis Pendens was thereafter registered on July 17,
1984.

·         Meanwhile, the collection suits filed by petitioners (Civil Case No. 84-25159 and Civil Case
No. 84-25260) which reached this  Court and the Court of Appeals, respectively, became final in
xecut of  PBCom.

·         On  July 24, 1991,  private respondent Gaw Le Ja Chua, wife of Joseph L. G. Chua, filed a
Third Party Claim with the Sheriffs of Branches 8 and 9 of RTC, Manila.   At the same time, she
initiated two separate reinvindicatory actions on the subject property in the lower court.

·         Petitioner, on the other hand, filed an Urgent Motion to Direct the Sheriff to Enforce the
Writ of Execution/Auction Sale.

·         On August 15, 1991, the RTC denied petitioner’s motion.  The Motion for Reconsideration
with a motion to quash the third party claim was, likewise, denied in an Order dated October
21, 1991.

·         Dissatisfied, the petitioner came to this Court assailing the RTC’s Orders. The matter was,
however, referred to the Court of Appeals for proper disposition. On August 31, 1992, the
respondent court dismissed the petition.
ISSUE:  Whether or not private respondent is considered a stranger within the meaning of
Section 17, Rule 39 of the Rules of Court, as to entitle her to the remedy of a third-party claim
or reinvidicatory actions over the subject property.

RULING:

·         NO. A stranger is a third-party who is any person other than the judgment debtor or his
agent.   While we are aware of the legal maxim that no man shall be affected by proceedings to
which he is a stranger, the attendant circumstances, however,  in the case at bar constrain us to
rule that private respondent cannot be considered a stranger within the purview of the law. .  In
the present case, although Ignacio was not named as defendant there is no doubt that as wife
of defendant Sunga she shares a common interest with him in the litigation.  Indeed she
represented herself to be the agent of Sunga by signing the answer in their behalf. She is
therefore as much a judgment debtor and agent of the defendant and not a third party to the
litigation.

·         Private respondent gave her marital consent or conformity to the Deed of Exchange and
that by that act she became necessarily a party to the instrument..   She cannot, therefore,
feign ignorance to the simulated transaction where the intention was really to defraud her
husband’s creditors.

·         In a last ditch effort to retain the property,   private respondent now contends that
it belongs to the conjugal partnership which should not answer for the obligations of the
husband.  While previously in the Deed of Exchange, private respondent conceded that the
property was solely owned by her husband and that it was ceded to Jaleco Development
Corp.,  after  this Court  ruled against the husband, she changed task by claiming that
the  property is conjugal and, as an afterthought, she filed a third party claim.  Notably, she
never intervened in said case where the validity of the Deed of Exchange was being questioned
to protect her rights and interests if indeed she truly believed that the property belonged to the
conjugal partnership.  At the very least, private respondent is now xecuto from claiming that
property in question belongs to the conjugal partnership.  She cannot now take an inconsistent
stance after an adverse decision in G.R. No. 92067.
·         Inaction or silence may under some circumstances amount to a misrepresentation and
concealment of facts, so as to raise an equitable xecutor.  When the silence is of such a
character and under such circumstances that it would become a fraud on the other party to
permit the party who has kept silent to deny what his silence has induced the other to believe
and act on, it will operate as an xecutor.  This doctrine rests on the principle that if one
maintains silence, when in conscience he ought to speak, equity will debar him from speaking
when in conscience he ought to remain silent.  He who remains silent  when he ought to speak
cannot be heard to speak when he should be silent.’

·         Finally, we take special note of the fact that this case has been going on for several
years.  Because of a dubious third party claim filed by private respondent, petitioner has been
deprived of the fruits of the  judgment in its xecut which has become final and xecutor since
1991.