NATURAL OBLIGATIONS JOHN F. VILLARROEL, appellant and appellant AGAINST BERNARDINO ESTRADA, appealed and appealed.

promise. Judgment is reversed and the costs to the plaintiff. Ruling: The first essential requisite, therefore, required by the cited article 1261 of the Civil Code for the existence of a contract, does not exists. As to the third essential requisite, namely, "A consideration for the obligation established," article 1274 of the same Code provides:lawphi1.net In onerous contracts the consideration as to each of the parties is the delivery or performance or the promise of delivery or performance of a thing or service by the other party; in remuneratory contracts the consideration is the service or benefit for which the remuneration is given, and in contracts of pure beneficence the consideration is the liberality of the benefactors. And article 1275 of the same Code provides: ART. 1275. Contracts without consideration or with an illicit consideration produce no effect whatsoever. A consideration is illicit when it is contrary to law or morality.

Facts: On May 9, 1912, Alejandra F. Callao, mother of defendant John F. Villarroel, obtained from the spouses Mariano Estrada and Severina a loan of P1, 000 payable within seven aiios. Upon death of both creditors and debtors, On August 9, 1930, John F. Villarroel signed a document with Bernardino Estrada by which the applicant must declare in the amount of P1, 000, with 12 percent of interest to be recovered. Lower court ruled that payment should be made. Issues: Whether action will prosper despite original debt has prescribed? Held: Yes. Ruling: The right to succeed her in his inheritance, that debt legally contracted by his mother, although it lost its effectiveness by prescription, is now, however, for a moral obligation is sufficient consideration to create and make effective and enforceable obligation voluntarily contracted. The rule that a new promise to pay a debt required to be made by the same person obligated or otherwise legally authorized by it, not applicable to the present case is not required in compliance with the obligation of the originally required, but which later would voluntarily assume this obligation.

ESTOPPEL OCTAVIO A. KALALO, plaintiff-appellee, vs. ALFREDO J. LUZ, defendant-appellant.

A.O. FISHER, plaintiff-appellee, vs. JOHN C. ROBB, defendant-appellant.

Facts: John C. Robb met A.O. Fisher in a business trip in Shanghai. The two became acquainted through friends and exchanged knowledge regarding dog racing. Plaintiff as manager of a dog racing course, became interested with the business of the Philippine Greyhound Club, Inc., in Manila and later informed defendant of his interest to subscribe and be a stockholder of said business. He sent his first installment via Manila telegram. Later, said business was later change to The Philippine Racing Club, and upon asking for the second installment from plaintiff, he said he already did send the second installment. The defendant endeavored to save the investment of those who had subscribed to the Philippine Greyhound Club, Inc., by having the Philippine Racing Club acquire the remaining assets of the Philippine Greyhound Club, Inc. Through exchange of letters, the plaintiff-appellee wrote the defendant-appellant requiring him to return the entire amount paid by him to the Philippine Greyhound Club, Inc., Upon receiving this letter, the defendant-appellant answered the plaintiffappellee for any loss which he might have suffered in connection with the Philippine Greyhound Club, Inc., in the same way that he could not expect anyone to reimburse him for his own losses which were much more than those of the plaintiff-appellee Issues: Whether a moral obligation will sustain an express executory promise? Held: No. Defendant although was morally responsible because of the failure of the enterprise, is not the consideration required by article 1261 of the Civil Code as an essential element for the legal existence of an onerous contract which would bind the promisor to comply with his

Facts:Octavio A. Kalalo, a licensed civil engineer doing business under the firm name of O. A. Kalalo and Associates, entered into an agreement with defendant-appellant Alfredo J . Luz a licensed architect, doing business under firm name of A. J. Luz and Associates, whereby the former was to render engineering design services to the latter for fees, as stipulated in the agreement. The fees agreed upon were percentages of the architect's fee, to wit: structural engineering, 12-%; electrical engineering, 2-%. The agreement was subsequently supplemented by a "clarification to letter-proposal". 10 projects was rendered by Kalalo to Luz. Appellee sent to appellant a statement of account to which was attached an itemized statement of defendant-appellant's account according to which the total engineering fee asked by appellee for services rendered.appellant sent appellee a check for said amount, which appellee refused to accept as full payment of the balance of the fees due him. The assessment of the proper fees and the balance due to appellee after deducting the admitted payments made by appellant, the trial court, upon agreement of the parties, authorized the case to be heard before a Commissioner. The trial court favored plaintiff and against the defendant, Issues:1) whether under the facts stated in the Report, the doctrine of estoppel would apply; and (2) whether the recommendation in the Report that the payment of the amount. due to the plaintiff in dollars was legally permissible, and if not, at what rate of exchange it should be paid in pesos.

Held: We find merit in the stand of appellee. Ruling: (1) Under article 1431 of the Civil Code, in order that estoppel may apply the person, to whom representations have been made and who claims the estoppel in his favor must have relied or acted on such representations. Said article provides: Art. 1431. 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 thereon. An essential element of estoppel is that the person invoking it has been influenced and has relied on the representations or conduct of the person sought to be estopped, and this element is wanting in the instant case. The essential elements of estoppel in pais may be considered in relation to the party sought to be estopped, and in relation to the party invoking the estoppel in his favor. As related to the party to be estopped, the essential elements are: (1) conduct amounting to false representation or concealment of material facts or at least calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (2) intent, or at least expectation that his conduct shall be acted upon by, or at least influence, the other party; and (3) knowledge, actual or constructive, of the real facts. As related to the party claiming the estoppel, the essential elements are (1) lack of knowledge and of the means of knowledge of the truth as the facts in questions; (2) (reliance, in good faith, upon the conduct or statements of the party to be estopped; (3) action or inaction based thereon of such character as To change the position or status of the party claiming the estoppel, to his injury, detriment or prejudice. The first essential element in relation to the party sought to be estopped does not obtain in the instant case, for, as appears in the Report of the Commissioner, appellee testified "that when he wrote Exhibit 1 and prepared Exhibit 1-A, he had not yet consulted the services of his counsel and it was only upon advice of counsel that the terms of the contract were interpreted to him resulting in his subsequent letters to the defendant demanding payments of his fees pursuant to the contract. In the instant case, it has been shown that Exhibit 1-A was written through mistake by appellee and that the latter is not estopped by it. Hence, even if said Exhibit 1-A be considered as practical construction of the contract by appellee, he cannot be bound by such erroneous interpretation. It has been held that if by mistake the parties followed a practice in violation of the terms of the agreement, the court should not perpetuate the error. (2) In the Commissioner's report, it is specifically recommended that the appellant be ordered to pay the plaintiff the sum of "$28,000. 00 or its equivalent as the fee of the plaintiff under Exhibit A on the IRRI project." It is clear from this report of the Commissioner that no payment for the account of this $28,000.00 had been made. Indeed, it is not shown in the record that the peso equivalent of the $28,000.00 had been fixed or agreed upon by the parties at the different times when the appellant had made partial payments to the appellee.

No. L-41012 September 30, 1976 TARLAC DEVELOPMENT CORPORATION, petitioner, vs. HONORABLE COURT OF APPEALS, CITY OF MANILA, LODGE NO. 761, BENEVOLENT AND PROTECTIVE ORDER OF ELKS, INC., respondents. Facts: Philippine Commission enacted Act No. l360 which authorized the City of Manila to reclaim a portion of Manila Bay. The Act provided that the reclaimed area "Shall be the property of the City of Manila" and that "the City of Manila is hereby authorized to set aside a tract of the reclaimed land formed by the Luneta extension. Philippine Commission passed on May 18, 1907 Act No. 1657, amending Act No. 1360, so as to authorize the City of' Manila either to lease or to sell the portion set aside as a hotel site. The City of Manila applied for the registration of the reclaimed area, and on January 20, 1911, O.C.T. No. 1909 was issued in the name of the City of Manila. City of Manila, affirming a prior sale dated January 16, 1909 cancelled 5,543.07 square meters of the reclaimed area to the Manila Lodge No. 761, Benevolent and Protective Order of Elks of the U.S.A. (BPOE) on the basis of which TCT No. 2195 was issued to the latter over the Marcela. Manila Lodge No. 761, BPOE, subsequently sold the said 5,543.07 square meters to the Elks Club, Inc., to which was issued TCT No. 67488. 4 The registered owner, "The Elks Club, Inc.," was later changed by court oder to "Manila Lodge No. 761, Benevolent and Protective Order of Elks, Inc." BPOE sold for the sum of P4,700,000 the land together with all the improvements thereon to the Tarlac Development Corporation (TDC) City of Manila filed with the Court of First Instance of Manila a petition for the reannotation of its right to repurchase; the court, after haering, issued an order, dated November 19, 1964, directing the Register of Deeds of the City of Manila to reannotate in toto the entry regarind the right of the City of Manila to repurchase the property after fifty years. TDC and BPOE appealed to this Court which on July 31, 1968 affirmed in G.R. Nos. L-24557 and L-24469 the trial court's order of reannotation, but reserved to TDC the right to bring another action for the clarification of its rights. Trial court rendered decision that subject land to be part of the "public park or plaza" and, therefore, part of the public domain, dismissing the complaint. CA affirmed the decision of lower court. Issues: Whether or not property subject of the action, pursuant to the provisions of Act No. 1360, as amended by Act No. 1657, was patrimonial property of the City of Manila and not a park or plaza? Held: Neither. It is public dominion. Petitions in both G.R. Nos. L-41001 and L-41012 are denied for lack of merit, and the decision of the Court of Appeals of June 30, 1975, is hereby affirmed. Ruling: (1) Although the City of Manila was to pay for the construction of such work and timber bulkheads or sea walls as may be necessary for the making of the Luneta extension, the area to be reclaimed would be filled at the expense of the Insular Government and without cost to the City of Manila, with material dredged from Manila Bay. Hence, the letter of the statute should be narrowed to exclude maters which if included would defeat the policy of the legislation. The reclaimed area, an extension to the Luneta, is declared to be property of the City of Manila. Property, however, is either of public ownership or of private ownership. It is of public dominion, intended for public use.

MANILA LODGE NO. 761, BENEVOLENT AND PROTECTIVE ORDER OF THE ELKS, INC., petitioner, vs. THE HONORABLE COURT OF APPEALS, CITY OF MANILA, and TARLAC DEVELOPMENT CORPORATION,respondents.

Without the authorization expressly given by Act No. 1360, the City of Manila could not lease or sell even the northern portion; much less could it dispose of the whole reclaimed area. Consequently, the reclaimed area was granted to the City of Manila, not as its patrimonial property. At most, only the northern portion reserved as a hotel site could be said to be patrimonial property for, by express statutory provision it could be disposed of, and the title thereto would revert to the City should the grantee fail to comply with the terms provided by the statute. The subject property is not that northern portion authorized to be leased or sold; the subject property is the southern portion. Hence, applying the rule of expresio unius est exlusio alterius, the City of Manila was not authorized to sell the subject property. Article 344 of the Civil Code of Spain provides that to property of public use, in provinces and in towns, comprises the provincial and town roads, the squares streets fountains, and public waters the promenades, and public works of general service paid for by such towns or provinces." A park or plaza, such as the extension to the Luneta, is undoubtedly comprised in said article. (2) The sale of the subject property executed by the City of Manila to the Manila Lodge No. 761, BPOE, was void and inexistent for lack of subject matter. It suffered from an incurable defect that could not be ratified either by lapse of time or by express ratification. The Manila Lodge No. 761 therefore acquired no right by virtue of the said sale. Hence to consider now the contract inexistent as it always has seen, cannot be, as claimed by the Manila Lodge No. 761, an impairment of the obligations of contracts, for there was it, contemplation of law, no contract at all. SIMEON B. MIGUEL, ET AL., plaintiffs-appellants, vs. FLORENDO CATALINO, defendant-appellee.

(1)The laws applicable to the said sale are: Section 145(b) of the Administrative Code of Mindanao and Sulu, providing that no conveyance or encumbrance of real property shall be made in that department by any non-christian inhabitant of the same, unless, among other requirements, the deed shall bear indorsed upon it the approval of the provincial governor or his representative duly authorized in writing for the purpose; Section 146 of the same Code, declaring that every contract or agreement made in violation of Section 145 "shall be null and void"; and Act 2798, as amended by Act 2913, extending the application of the above provisions to Mountain Province and Nueva Vizcaya. Since the 1928 sale is technically invalid, Bacaquio remained, in law, the owner of the land until his death in 1943, when his title passed on, by the law on succession, to his heirs, the plaintiffsappellants. Even granting appellants' proposition that no prescription lies against their father's recorded title, their passivity and inaction for more than 34 years (1928-1962) justifies the defendant-appellee in setting up the equitable defense of laches in his own behalf. As a result, the action of plaintiffs-appellants must be considered barred and the Court below correctly so held. Courts can not look with favor at parties who, by their silence, delay and inaction, knowingly induce another to spend time, effort and expense in cultivating the land, paying taxes and making improvements thereon for 30 long years, only to spring from ambush and claim title when the possessor's efforts and the rise of land values offer an opportunity to make easy profit at his expense. As in the Gamponia case, the four elements of laches are present in the case at bar, namely: (a) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation of which complaint is made and for which the complaint seeks a remedy; (b) delay in asserting the complainant's rights, the complainant having had knowledge or notice, of the defendant's conduct and having been afforded an opportunity to institute a suit; (c) lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit; and (d) injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held to be barred. (2) The difference between prescription and laches was elaborated in Nielsen & Co., Inc. vs. Lepanto Consolidated Mining Co., L-21601, 17 December 1966, 18 SCRA p. 1040, as follows: Appellee is correct in its contention that the defense of laches applies independently of prescription. Laches is different from the statute of limitations. Prescription is concerned with the fact of delay, whereas laches is concerned with the effect of delay. Prescription is a matter of time; laches is principally a question of inequity of permitting a claim to be enforced, this inequity being founded on some change in the condition of the property or the relation of the parties. Prescription is statutory; laches is not. Laches applies in equity, whereas prescription applies at law. Prescription is based on fixed time laches is not, (30 C.J.S., p. 522. See also Pomeroy's Equity Jurisprudence, Vol. 2, 5th ed., p. 177) (18 SCRA 1053).

Facts: Simeon, Emilia and Marcelina Miguel, and Florendo Catalino brought suit against Florendo Catalino for the recovery of the land, plaintiffs claiming to be the children and heirs of the original registered owner. The defendant was in possession of property for 30 years. The land in dispute is situated in the Barrio of San Pascual, Municipality of Tuba, Benguet, Mountain Province and contains an area of 39,446 square meters, more or less. It is covered by Original Certificate of Title No. 31, which was issued on 28 December 1927 in the name of Bacaquio (or Bakakew), a widower, who has an only child to a first wife. Bacaquio acquired the land and sold it to Catalino Agyapao, father of the defendant Florendo Catalino, for P300.00 in 1928. No formal deed of sale was executed, but since the sale in 1928, or for more than 30 years, vendee Catalino Agyapao and his son, defendant-appellee. Florendo Catalino, had been in possession of the land, in the concept of owner, paying the taxes thereon and introducing improvements. Issues: Who is the rightful owner? Does principle of estoppel apply? Held: Florendo Catalino is the rightful owner. Since the plaintiffs-appellants are barred from recovery, their divestiture of all the elements of ownership in the land is complete; and the Court a quo was justified in ordering that Bacaquio's original certificate be cancelled, and a new transfer certificate in the name of Florendo Catalino be issued in lieu thereof by the Register of Deeds. Ruling: