Gaite v. Fonacier Facts: Fonacier was the owner of an iron lode mineral claims.

In a deed of assignment, Fonacier assigned Gaite to enter into contracts in his behalf to develop the mining claims. Gaite in turn executed a general assignment (Record on Appeal, pp. 17-19) conveying the development and exploitation of said mining claims into the Larap Iron Mines, a single proprietorship owned solely by and belonging to him. For some reason or another, Isabelo Fonacier decided to revoke the authority granted by him to Gaite to exploit and develop the mining claims in question, and Gaite assented thereto subject to certain conditions. In the revocation including the trasfer subject to certain conditions, it was stated that Fonacier and the others would pay first 10, 000 to Gaite and: b. The balance of SIXTY-FIVE THOUSAND PESOS (P65,000.00) will be paid from and out of the first letter of credit covering the first shipment of iron ores and of the first amount derived from the local sale of iron ore made by the Larap Mines & Smelting Co. Inc., its assigns, administrators, or successors in interests. Fonacier failed to pay Gaite the remaining balance of P65, 000.

Issue: W/N the shipment or local sale of the iron ore is a condition precedent (or suspensive) to the payment of the balance of P65,000.00.

Ruling: NO. It was only a suspensive period or term. To subordinate the obligation to pay the remaining P65,000.00 to the sale or shipment of the ore as a condition precedent, would be tantamount to leaving the payment at the discretion of the debtor, for the sale or shipment could not be made unless the appellants took steps to sell the ore. Assuming that there could be doubt whether by the wording of the contract the parties indented a suspensive condition or a suspensive period (dies ad quem) for the payment of the P65,000.00, the rules of interpretation would incline the scales in favor of "the greater reciprocity of interests", since sale is essentially onerous. The Civil Code of the Philippines, Article 1378, paragraph 1, in fine, provides: If the contract is onerous, the doubt shall be settled in favor of the greatest reciprocity of interests. and there can be no question that greater reciprocity obtains if the buyer' obligation is deemed to be actually existing, with only its maturity (due date) postponed or deferred, that if such obligation were viewed as non-existent or not binding until the ore was sold.

Quiroga v. CA Facts: A contract was entered between Quiroga and Parsons for the exclusive sale of Quiroga beds in the Visayas Islands, specifically Iloilo. Quiroga furnishes the beds to Parson, who in turn pay the price in the manner stipulated. Quiroga provided a discount of 20 to 25% for the beds, depending on their class.

Later, Quiroga filed a case against Parsons for violation of its obligation not to sell the beds at higher price than those of the invoices, etc. (which are not expressly stipulated in the contract, except for the manner the beds are ordered by the dozen). Quiroga maintains that Parson is his agent for the sale of his beds in Iloilo, and that the contract is that of commercial agency. Issue: Whether the contact is that of sale or of commercial agency. Held: The contract between the parties is a contract of purchase and sale as Parson, by receiving the bed, was necessarily obliged to pay their price within the term fixed, without any other consideration and regardless as to whether he had or had not sold the bed. The words commission on sales in the contract is nothing else than a mere discount on the invoice price. Further, the word agency used thereon only expresses that Parson was the sole seller of Quiroga beds in the Visayas. None of the other clauses of the contract are not incompatible with the contract of purchase and sale.

Puyat & Sons v. Arco Amusement Facts: Gonzalo Puyat & Sons is the exclusive agent of Starr Piano Company of Richmond, Indiana USA, in the Philippines. Teatro Arco, or Arco Amusement Company, desiring to equip its cinematograph with sound reproducing devices, approached Puyat. It was agreed by the parties that Puyat would in behalf of Arco order equipment from Starr Piano and that Arco would pay Puyat in addition to price of the equipment, 10% commission plus all expenses such as freight, insurance, banking charges, cables, etc. Puyat informed Arco that the price of the equipment was $1,700, to which Arco agreed. Later, a similar arrangement was made by Arco for the purchase of similar equipment for $1,600 with 10% commission, with Puyat charging an additional flat charge of $160 for all expenses and charges. 3 years later, Arco learned that the price quoted by Puyat on the 2 orders were not the net price but the list price for the equipment. Arco filed a complaint with the trial court (CFI) demanding reimbursement from said overpriced sales. The trial court ruled in favor of Puyat, but the Court of Appeals reversed such decision and declared Puyat an agent of Arco Amusement in the purchase of said equipment. Issue: Whether the agreement made between Puyat and Arco Amusement is that of purchase and sale or that of agency. Held: Gonzalo Puyat & Sons cannot be the agent of Arco Amusement in the purchase of equipment from Starr Piano Company as Puyat & Sons is already the exclusive agent of Starr Piano in the Philippines. Puyat cannot be the agent of both vendor and purchaser. The fact that a commission was offered to the other does not necessarily mean that the latter has become the agent of the former, as this was only an additional price which Arco bound itself to pay and which is not incompatible with the contract of purchase and sale. Puyat is not bound to reimburse the profit acquired in the transaction, as this is the very essence of commerce involving middlemen and merchants. The contract is the law between the parties. What does not appear on the face of the contract should be regarded as dealers or traders talk which cannot bind either party. Not every concealment is fraud, short of fraud, and such as that in this case, is considered as business acumen.

SONNY LO, petitioner, vs. KJS ECO-FORMWORK SYSTEM PHIL., INC., respondent. Facts: Lo was a contractor for buildings while the respondent was a engaged in steel scaffoldings.

Lo bought steel scaffoldings from the respondent. They have agreed that Lo would pay a downpayment and pay the remaining balance every month. However, Lo was not able to pay the complete balance despite of the demands made by the respondent. Lo and the respondent executed a Deed of Assignment that stated that the rights to the receivables of Lo from a company shall be transferred to the respondent. When the respondent was claiming the receivables, the company stated that Lo was also indebted to it and their debts to one another had been extinguished. Thus, the respondent was not able to claim the receivables. The respondent filed a case for the collection of sum of money against the petitioner. On the other hand, Lo argued that his obligation to pay was extinguished by the perfection of the Deed of Assignment. Lo did not do his obligation to do whatever was necessary to collect from the company as stated in the DEED OF ASSINGMENT. Issue: W/N Los obligation to pay is extinguished. Ruling: NO. it may well be that the assignment of credit, which is in the nature of a sale of personal property,19 produced the effects of a dation in payment which may extinguish the obligation.20 However, as in any other contract of sale, the vendor or assignor is bound by certain warranties. More specifically, the first paragraph of Article 1628 of the Civil Code provides: The vendor in good faith shall be responsible for the existence and legality of the credit at the time of the sale, unless it should have been sold as doubtful; but not for the solvency of the debtor, unless it has been so expressly stipulated or unless the insolvency was prior to the sale and of common knowledge. From the above provision, petitioner, as vendor or assignor, is bound to warrant the existence and legality of the credit at the time of the sale or assignment. When the company claimed that it was no longer indebted to petitioner since the latter also had an unpaid obligation to it, it essentially meant that its obligation to petitioner has been extinguished by compensation.21 In other words, respondent alleged the non-existence of the credit and asserted its claim to petitioners warranty under the assignment. Therefore, it behooved on petitioner to make good its warranty and paid the obligation. Furthermore, we find that petitioner breached his obligation under the Deed of Assignment, to wit: And the ASSIGNOR further agrees and stipulates as aforesaid that the said ASSIGNOR, his heirs, executors, administrators, or assigns, shall and will at times hereafter, at the request of said ASSIGNEE, its successors or assigns, at his cost and expense, execute and do all such further acts and deeds as shall be reasonably necessary to effectually enable said ASSIGNEE to recover whatever collectibles said ASSIGNOR has in accordance with the true intent and meaning of these presents.22 (underscoring ours)

Calimlim-Canullas v. Fortun 128 SCRA 675

Facts: Fernando Canullas and Mercedes Calimlim were married in 1962. They lived in a small house on a 891 sq.m. residential land in Pangasinan (Bagabac, Bugallon). When Canullas father died in 1965, he inherited the land. In 1978, he abandoned the family and lived with Corazon Daguines. In 1980, he sold the property to Daguines for P2,000. Daguines filed a complaint for quieting of title and damages against Mercedes, after the former was unable to take possession of the house and lot. The trial court (CFI) ruled in favor of Daguines, ruling that she is the owner of of the land as well as of the house erected on said land. Upon reconsideration, the judgment was modified wherein Daguines is the owner of the land and 10 coconut trees thereon, and the sale of the conjugal house including 3 coconuts and other crops planted during the conjugal relation of the spouses is null and void. Issue: Whether the sale made by Fernando Canullas to Corazon Daguines was valid. Held: The contract of sale was null and void for being contrary to morals and public policy, pursuant to Article 1409 of the Civil Code. The sale was made by a husband in favor of a concubine after he had abandoned his family and left the conjugal home where his wife and children lived and from whence they derived their support. That sale was subversive of the stability of the family, a basic social institution which public policy cherishes and protects.

Rubias v. Batiller 51 SCRA 120

Facts: Francisco Militante claimed ownership over land in Iloilo (Bo. Gen. Luna, Barotac Viejo), to which he filed an application for registration of title with the CFI Iloilo. The application was opposed by the Director of Lands. The CFI dismissed the registration. Pending disposal of the appeal in the Court of Appeals, Militante sold the land to Domingo Rubias, his son-in-law and a lawyer by profession. Rubias declared the land for taxation purposes under various tax declarations and land taxes. The CA likewise dismissed Militantes application. Meanwhile, other claimants declared the same land for taxation purposes (tax declaration and land tax), one of whom is Isaias Batiller. In 1960, Rubias filed a forcible entry case against Batiller before the municipal court, which the latter ruled in favor of Batiller. Rubias appealed to the CFI, which affirmed the judgment in favor of Batiller. In 1964, Rubias filed a suit to recover ownership and possession of land to claim portions of lot, bought from Militante, which were occupied by Batiller. The lower court (CFI) dismissed the case. Rubias appealed to the Court of appeals which certified the appeal to the Supreme Court for involving purely legal questions.

Issue: Whether the sale of the lot by Francisco Militante to his son-in-law Domingo Rubias is valid for the latter to claim ownership over said lot

Held: The purchase by a lawyer of the property in litigation from his client is categorically prohibited by Article 1491, paragraph (5) of the Civil Code, and that consequently, Rubias purchase of the property in litigation from his father-in-law was void and could produce no legal effect (Article 1409 [7] of the Civil Code). It is void and not voidable (as the 1929 case of Director of Lands v. Abagat which declared such purchase void superceded the 1911 case of Wolfson v. Estate of Martinez which declared such purchase mere voidable). The nullity of prohibited contracts is definite and permanent and cannot be cured by ratification. The public interest and public policy remain paramount and do not permit of compromise or ratification. However, when

the causes of nullity which have ceased to exist, a second contract may be executed and would then be valid from its execution; however, it does not retroact to the date of the first contract.

Still, Rubias complaint, to be declared absolute owner of the land and to be restored to possession thereof with damages, was bereft of any factual or legal basis. The CAs final judgment affirming the dismissal of Militantes application of registration made it conclusive that Militante lack rightful claim or title to the land. There was no right or title to the land that could be transferred or sold by Militantes purported sale in favor of Rubias in 1956.

Philippine Trust Co. v. Roldan 99 Phil 392

Facts: 17 parcels of land (Guiguinto, Bulacan) were inherited by Mariano L. Bernardo from his father. Socorro Roldan, his stepmother, was appointed by the court as his guardian. Roldan was able to secure permission later on to sell his wards property for the alleged purpose of investing the proceeds thereof in a residential house in Manila, to which Mariano allegedly desired. Roldan sold the parcels of land to his brother-in-law Dr. Fidel C. Ramos, to which a judicial confirmation of the sale was obtained. The next day, Ramos executed a deed of conveyance covering the same parcels for the sum of P15,000. Two months later, Roldan sold 4 parcels to Emilio Cruz for P3,000, reserving to herself the right to purchase. The Philippine Trust Company replaced Roldan as guardian a year later, and thereafter, filed a complaint in the lower court to annul the contracts regarding the parcel of land pursuant to the prohibitions provided in Article 1459. The trial court upheld the validity of the contracts but allowing the minor to repurchase the land for P15,000 within one year.

Issue: Whether the contracts of sale involving the 17 parcels of land are valid.

Held: The three contracts of sale are void; the first two for violation of article 1459 of the Civil Code; and the third because Roldan could pass no title to Emilio Cruz. The annulment carries with is (Article 1303 Civil Code) the obligation of Roldan to return the 17 parcels together with their fruits and the duty of the minor, through his guardian to repay P14,700 with legal interest. Guardianship is a trust of the highest order, and the trustee cannot be allowed to have any inducement to neglect his wards interest and in line with the courts suspicion whenever the guardian acquires the wards property, the Court has no hesitation to declare that, in the eyes of the law, the guardian (Roldan) took by purchase her wards parcels (thru Dr. Ramos), and that Article 1459 of the Civil Code applies. The reconveyance of the property to Roldan after being sold to her brother-in-law within a week of each other, or a day after the judicial confirmation of sale was obtained, raises suspicions. Even if arguendo she acted without malice, the temptation which naturally besets a guardian so circumstanced, necessitates the annulment of the transaction, even if no actual collusion is proved (so hard to prove) between such guardian and the intermediate purchaser. This would uphold a sound principle of equity and justice.

Fabillo v. IAC, Murillo

Facts: Fabillo inherited a land. He lost a land to a case. Now, he wanted the services of Murillo as his lawyer in order to get the land back. Murillo requested that if he would win the case, as a contingent fee, Fabillo should give 40% of the money value of the house and lot. They have agreed to the said stipulation. Murillo and Fabillo died. The heirs of Fabillo are now questioning the validity of the ownership of Murillo based on Art. 1491 of the CC. Issue: W/N Murillo is the owner of the land. Ruling: YES. a contract between a lawyer and his client stipulating a contingent fee is not covered by said prohibition under Article 1491 (5) of the Civil Code because the payment of said fee is not made during the pendency of the litigation but only after judgment has been rendered in the case handled by the lawyer. In fact, under the 1988 Code of Professional Responsibility, a lawyer may have a lien over funds and property of his client and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements. 10

As long as the lawyer does not exert undue influence on his client, that no fraud is committed or imposition applied, or that the compensation is clearly not excessive as to amount to extortion, a contract for contingent fee is valid and enforceable. 11 Moreover, contingent fees were impliedly sanctioned by No. 13 of the Canons of Professional Ethics which governed lawyer-client relationships when the contract of services was entered into between the Fabillo spouses and Murillo. 12