Arroyo v Berwin

Facts:
Ignacio Arroyo and Alfred Berwin are residents of Iloilo.

Berwin is a procurador judicial (a person granted permission to appear before the courts relating on behalf of clients, etc. without being a lawyer) in the law
office of Atty. John Bordman.

Berwin represented Marcela Juaneza in the Justice of the Peace of Iloilo in proceeding for a theft case filed by plaintiff Ignacio Arroyo. Marcela Juaneza lost then
appealed at the CFI of Iloilo.

On the day of the hearing at the CFI, Berwin requested Ignacio Arroyo to agree to dismiss the criminal proceeding and thereafter stipulated in the
presence of Roque Samson that
 "1) his client, Marcela would recognize the plaintiff's ownership in the land situate on Calle San Juan, Molo, Iloilo where Marcela ordred the
cane (as in sugar cane) cut, which land and which cut cane are referred to in the cause for the theft. Furthermore, they agreed that "

 2) the plaintiff should obtain a Torrens title to said land and Marcela would not oppose such application for registration".

 PROVIDED THAT Arroyo would ask that the case be dismissed against Marcela

Arroyo complied with the agreement. The case against Marcela was dismissed. Berwin did not wish to comply with their agreement (Arroyo delivered to him the
written agreement for Marcela's signature but Berwin failed to give him back the same).

Arroyo filed for specific performance praying that judgment be rendered ordering Arroyo to cause his client Marcela to sign the written agreement.

CFI- dismissed, the consideration of the contract is illegal.

Issue:
WON Berwin may be ordered to comply with the agreement?

Held:
No, an agreement to stifle the prosecution of the person charged with theft for a valuable consideration is manifestly contrary to public policy and due
administration of justice.
Art. 1255- The contracting parties may make the agreement and establish the clauses and condition which they may deem advisable, provided they are not in
contravention of law, morals or public order.
Art. 1275- Contracts without consideration or with an illicit one have no effect whatsoever. A consideration is illicit when it is contrary to law and good
morals.

Petition denied.

DKC HOLDINGS CORP v. CA, BARTOLOME, ROD – contracts are inherited

FACTS
 DKC entered into a Contract of Lease with Option to Buy a parcel of land from/with Encarnacion Bartolome –
 Option reserved at P3K monthly payment
 Option may be exercised within 2 years from signing
 Formal notice should be served to Encarnacion should DKC wish to buy land
 DKC regularly paid the monthly P3K to Encarnacion until her death
 Thereafter, DKC made the P3K payments to Victor Bartolome (sole heir of Encarnacion)
 Victor refused to accept payments
 Victor executed Affidavit of self-adjudication of land to himself – ROD issued corresponding title
 DKC served formal notice of exercise of Option and tendered rental payments to Victor
 Victor refused to accept rent, to recognize notice, or to surrender land
 So DKC opened Chinabank account under Victor’s name where it deposited all its payments
 DKC tried to register and annotate the Contract on the title of Victor to the property
 ROD refused
 DKC filed complaint for specific performance and damages
 Victor’s defense:
 He is not a party to the contract
 Encarnacion terminated the contract

ISSUE
WON the Contract between DKC and Encarnacion was terminated upon her death OR
WON Victor may be compelled to honor the terms of his ascendant’s contract

HELD
 NO/YES.
 Art. 1311. Contracts take effect only between the parties, their assigns and heirs, except in case where the rights and obligations arising from the contract
are not transmissible by their nature, or by stipulation or by provision of law. The heir is not liable beyond the value of the property he received from the
decedent
 GR: heirs are bound
 EXC: nature, stipulation, law
 Case: exceptions do not apply, thus Victor is bound to honor contract
 Stipulation – nothing in contract stipulates termination upon death
 Nature – nature of obligation is not intransimissible
 Tolentino: examples of intransmissible: (a) purely personal obligations; (b) money debts are charged against estate not against heirs
 American jurisprudence: Purely personal obligations – require the exercise of special knowledge, genius, skill, taste, ability, experience,
judgment, discretion, integrity, or other personal qualification of one or both parties, the agreement is of a personal nature, and terminates on
the death of the party who is required to render such service
 Law – no law excusing Victor
 Instead: involved is a property right – nonperformance is not excused by the death of the party when the other party has a property interest in
the subject matter of the contract
 THUS: Victor should surrender possession of land and copy of title to DKC
 GUTIERREZ HERMANOS (firm) v. ORENSE – principal and agent

FACTS
 Orense owned a parcel of land with buildings and improvements thero
 Orense’ nephew Duran sold said land with right to redeem w/in 4yrs via notarized contract to Hermanos
 Orense and Duran continued to occupy land thru contract of lease over sold land
 4yrs elapsed without land being repurchased – Hermanos now demanded Orense and Duran vacate property – Orense refused
 Orense contends: he did not execute any written power of atty. for Duran to sell property
 Hermanos filed estafa case against Duran for fraudulently presenting himself as authorized to sell land
 Orense as witness: testified under oath that he gave consent (LOL)
 Thus, Duran was acquitted
 Hermanos filed complaint to compel Orense to execute deed of transfer and conveyance
 Submitted as evidence Orense’s public admittance in open court under oath of his consent

ISSUE
WON Orense may be compelled to execute deed of transfer and conveyance over land to Hermanos

HELD
 YES.
 Art. 1317. No one may contract in the name of another without being authorized by the latter, or unless he has by law a right to represent him.
A contract entered into in the name of another by one who has no authority or legal representation, or who has acted beyond his powers, shall be
unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has been executed, before it is revoked by the other contracting
party.
 Case: proven fact that Orense gave his consent
 Duran was authorized to sell land; thus Orense is bound
 Case: and even IF at first there was no authority at inception (i.e. sale was null and void) –
 It was cured when Orense ratified via his testimony in court; thus Orense now bound
 THUS: Orense should execute the deed of transfer and conveyance of land to Hermanos
 FLORENTINO et al v. ENCARNACION et al. – stipulations pour atrui

FACTS
 Both Florentino et al and Encarnacion et al are undisputed pro-indiviso co-owners of a parcel of land
 Florentino et al acquired their shares directly thru inheritance; while Encarnacion et al are subsequent purchasers-owners who purchased their shares from
some of the original heirs
 The ownership shares were determined via Deed of Extrajudicial Partition, which expressly provided –
 That products of the land will be used to defray expenses for religious functions
Note: The church whose expenses were defrayed was not in any capacity a party to the Deed of extrajudicial partition – a third party
 Florentino petitioned to have said stipulation annotated on the face of the title (as an encumbrance)
 Encarnacion opposed the petition contending mainly that since –
 They were not parties to the original deed and cannot be bound by the stipulation; and
 The Church did not expressly accept donation (of products from land to defray expenses),
 Thus: Controverted stipulation may now be revoked

ISSUE
WON the controverted stipulation may be revoked (and may not be annotated on the face of the land title)

HELD
 NO.
 Art. 1311. Contracts take effect only between the parties, their assigns and heirs, except in case where the rights and obligations arising from the contract
are not transmissible by their nature, or by stipulation or by provision of law. The heir is not liable beyond the value of the property he received from the
decedent.
If a contract should contain some stipulation in favor of a third person, he may demand its fulfillment provided he communicated his acceptance to the obligor
before its revocation. A mere incidental benefit or interest of a person is not sufficient. The contracting parties must have clearly and deliberately conferred a
favor upon a third person.
 Even if only subsequent-purchaser, still bound to honor terms
 they are successors-in-interest
 had knowledge of arrangement when they purchased shares and did not question nor oppose the same for years
 admitted/acknowledged arrangement when they previously executed a REM noting that subject land was already encumbered
 Controverted arrangement is a stipulation pour atrui as it meets all 3 requisites:
 Stipulation in favour of 3rd party is only part, not whole, of contract
 Favorable stipulation (i.e. real intent, not just incidental) should not be conditioned or compensated by any kind of obligation whatever
 Neither of the contracting parties bears the legal representation or authorization of third party
 Church accepted donation by accepting the products and used the same to defray church expenses without any opposition – no required particular form for
acceptance – may be implied
 Given that Church already accepted, stipulation pour atrui now has legal effect and binds all parties
 THUS: arrangement/obligation may not be revoked; annotation mere guarantee of enforcement and is allowed