REGAL FILMS, INC., petitioner, vs. GABRIEL CONCEPCION, respondent.

Facts: In 1991, Concepcion, a movie star, entered into a contract with Regal Films, through his manager, Lolita Solis, for his services rendered to the latters motion pictures. Regal, in turn, undertook to give two parcels of land to Concepcion on top of the "talent fees" it had agreed to pay. In 1993, the parties renewed the contract, incorporating the same undertaking on the part of petitioner to give respondent on the part of petitioner to give respondent the two parcels of land mentioned in the first agreement. Despite the appearance of respondent in several films produced by petitioner, the latter failed to comply with its promise to convey to respondent the two aforementioned lots. Respondent and his manager filed an action against petitioner for rescission of contract with damages. In his complaint, respondent contended that he was entitled to rescind the contract, plus damages, and to be released from further commitment to work exclusively for petitioner owing to the latter's failure to honor the agreement. Petitioner averred that both parties had executed an agreement, dated 17 June 1994, which was to so operate as an addendum to the 1991 and 1993 contracts between them. The agreement was signed by a representative of petitioner and by Solis purportedly acting for and in behalf of respondent Concepcion. Solis filed a motion to dismiss the complaint reiterating that the issue was resolved amicably between the petitioner and the respondent. Concepcion opposed to the dismissal stating that the addendum had provisions which are disadvantageous to him and the contract was entered without his knowledge and consent. Solis since then ceased to be his manager and had no right to sign the addendum for him. Petitioner intimated to respondent and his counsel its willingness to allow respondent to be released from his 1991 and 1993 contracts with petitioner rather than to further pursue the addendum which respondent had challenged. Respondent filed a manifestation with the trial court to the effect that he was now willing to honor the addendum to the 1991 and 1993 contracts and to have it considered as compromise agreement as to warrant a judgment in accordance therewith. The manifestation elicited a comment from both petitioner and Solis to the effect that the relationship between the parties had by then become strained, following the notorious Manila Film Festival scam involving respondent, but that it was still willing to release respondent from his contract. Issue: WON the addendum is an valid contract. Held: No. There was no contract in the first place The addendum was not the basis for the for the compromise judgment. A compromise is an agreement between two or more persons who, for preventing or putting an end to a lawsuit, adjust their respective positions by mutual consent in the way they feel they can live with. It is, in essence, a contract. Law and jurisprudence recite three minimum elements for any valid contract (a) consent; (b) object certain which is the subject matter of the contract; and (c) cause of the obligation which is established. Consent is manifested by the meeting of the offer and cause which are to constitute the agreement. The offer, however, must be certain and the acceptance seasonable and absolute; if qualified, the acceptance would merely constitute a counter-offer. In this instance, the addendum was flatly rejected by respondent on the theses (a) that he did not give his consent thereto nor authorized anyone to enter into the agreement, and (b) that it contained provisions grossly disadvantageous to him. The outright rejection of the addendum made known to the other ended the offer. When respondent later filed his Manifestation, stating that he was, after all, willing to honor the addendum, there was nothing to still accept. Consent could be given by the duly authorized person not only himself but also the person who represents him. However, he earlier admitted that the addendum was entered without his knowledge and consent. A contract entered into in the name of another by one who ostensibly might have but who, in reality, had no real authority or legal representation, or who, having such authority, acted beyond his powers, would be unenforceable. Assuming that the addendum was an unenforceable contract, if susceptible for ratification, the contract might be valid and can be enforced. But because of the adamant refusal of the respondent to accept the agreement during the preliminary conference constrained the petitioner. Therefore the subsequent attempt of the respondent to accept the addendum was late for it was deemed revoked by the petitioner. ROMANA LOCQUIAO VALENCIA and CONSTANCIA L. VALENCIA, petitioners, vs. BENITO A. LOCQUIAO, now deceased and substituted by JIMMY LOCQUIAO, TOMASA MARA and the REGISTRAR OF DEEDS OF PANGASINAN, respondents. CONSTANCIA L. VALENCIA, petitioner, vs. BENITO A. LOCQUIAO, now deceased and substituted by JIMMY LOCQUIAO, respondent. Facts: Locquiao spouses executed a deed of donation propter nuptias written in Ilocano in favor of their son, Benito and his soon-to-be bride, Tomasa Mara. By the terms of the agreement, the donation

consist of 4 parcels of land, one male cow and 1/3 of the conjugal house of the spouses Locquiao. The marriage took place on 1944. The spouses died on 1962 and 1968, respectively leaving their 6 children as heirs. With the permission of Benito, Romana, one of the heirs took over the possession of the donated lands and cultivated it. When her husband got sick, her daughter, Constancia took over the position in cultivating the land. Meanwhie Benito and Tomasa registered the Inventario Ti Sagut leaving the old title cancelled. Later, the heirs of the Locquiao spouses, including respondent Benito and petitioner Romana, executed a Deed of Partition with Recognition of Rights, wherein they distributed among 3 out of the 12 parcels of land left by their common progenitors, excluding the land in question and other lots disposed of by the Locquiao spouses earlier. Contained in the deed is a statement that respondent Benito and Marciano Locquiao, along with the heirs of Lucio Locquiao, have already received our shares in the estates of our parents, by virtue of previous donations and conveyances, and that for that reason the heirs of Lucio Locquaio were not made parties to the deed. All the living children of the Locquaio spouses at the time, including petitioner Romana, confirmed the previous dispositions and waived their rights to whomsoever the properties covered by the deed of partition were adjudicated. Subsequently, disagreements among the heirs surfaced leading to execution of deed of compromise agreement. Benito, although not directly involved, signed the agreement. Sometime in 1983, Constancia filed for the annulment of the agreement. The lower court dismissed the petition. This lead an ejectment case raised by Benito in favor of Constancia. Petitioners Romana and Constancia countered with a Complaint for the annulment of the donated and registered land against respondents Benito and Tomasa. Petitioners alleged that the issuance of the transfer certificate of title was fraudulent; that the Inventario Ti Sagut is spurious; that the notary public who notarized the document had no authority to do so, and; that the donation did not observe the form required by law as there was no written acceptance on the document itself or in a separate public instrument. Issue: (1) whether the donation propter nuptias is authentic; (2) whether acceptance of the donation by the donees is required; (3) if so, in what form should the acceptance appear, and; (4) whether the action is barred by prescription and laches. Held:

1st Issue To buttress their claim that the document was falsified, the petitioners rely mainly on the Certification that there was no notarial record for the year 1944 of Cipriano V. Abenojar who notarized the document on May 22, 1944 and that therefore a copy of the document was not available. The certification is not sufficient to prove the alleged inexistence or spuriousness of the challenged document. The mere absence of the notarial record does not prove that the notary public does not have a valid notarial commission and neither does the absence of a file copy of the document with the archives effect evidence of the falsification of the document. The failure of the notary public to furnish a copy of the deed to the appropriate office is a ground for disciplining him, but certainly not for invalidating the document or for setting aside the transaction therein involved. Moreover, the heirs of the Locquaio spouses, including petitioner Romana, made reference in the deed of partition and the compromise agreement to the previous donations made by the spouses in favor of some of the heirs. Benito was not allotted any share in the deed of partition precisely because he received his share by virtue of previous donations. His name was mentioned in the deed of partition only with respect to one parcel of land which is the eleventh (11th) parcel in the deed but that is the same onethird (1/3) portion of conjugal lot of their progenitors included in the donation propter nuptias. Similarly, Marciano Locquiao and the heirs of Lucio Locquiao were not allocated any more share in the deed of partition since they received theirs by virtue of prior donations or conveyances. 2nd Issue: Unlike ordinary donations, donations propter nuptias or donations by reason of marriage are those made before its celebration, in consideration of the same and in favor of one or both of the future spouses. The distinction is crucial because the two classes of donations are not governed by exactly the same rules, especially as regards the formal essential requisites. Under the Old Civil Code, donations propter nuptias must be made in a public instrument in which the property donated must be specifically described. However, Article 1330 of the same Code provides that acceptance is not necessary to the validity of such gifts. In other words, the celebration of the marriage between the beneficiary couple, in tandem with compliance with the prescribed form, was enough to effectuate the donation propter nuptias under the Old Civil Code.

Under the New Civil Code, the rules are different. Article 127 thereof provides that the form of donations propter nuptias are regulated by the Statute of Frauds. Article 1403, paragraph 2, which contains the Statute of Frauds requires that the contracts mentioned thereunder need be in writing only to be enforceable. However, as provided in Article 129, express acceptance is not necessary for the validity of these donations. Thus, implied acceptance is sufficient. It is settled that only laws existing at the time of the execution of a contract are applicable thereto and not later statutes, unless the latter are specifically intended to have retroactive effect. Consequently, it is the Old Civil Code which applies in this case since the donation propter nuptias was executed in 1944 and the New Civil Code took effect only on August 30, 1950. The fact that in 1944 the Philippines was still under Japanese occupation is of no consequence. It is a well-known rule of the Law of Nations that municipal laws, as contra-distinguished from laws of political nature, are not abrogated by a change of sovereignty. Thus, the Old Civil Code was in force. As a consequence, applying Article 1330 of the Old Civil Code in the determination of the validity of the questioned donation, it does not matter whether or not the donees had accepted the donation. The validity of the donation is unaffected in either case. Even if the provisions of the New Civil Code were to be applied, the case of the petitioners would collapse just the same. As earlier shown, even implied acceptance of a donation propter nuptias suffices under the New Civil Code. 3rd Issue: It is barred by prescription. Under the Old Code of Civil Procedure, an action for recovery of the title to, or possession of, real property, or an interest therein, can only be brought within ten years after the cause of such action accrues. Thus, petitioners action, which was filed on December 23, 1985, or more than forty (40) years from the execution of the deed of donation on May 22, 1944, was clearly time-barred. Even following petitioners theory that the prescriptive period should commence from the time of discovery of the alleged fraud, the conclusion would still be the same. As early as May 15, 1970, when the deed of donation was registered and the transfer certificate of title was issued, petitioners were considered to have constructive knowledge of the alleged fraud, following the jurisprudential rule that registration of a deed in the public real estate registry is constructive notice to the whole world of its contents, as well as all interests, legal and equitable, included therein. As it is now settled that the prescriptive period for the reconveyance of property allegedly registered through fraud is ten (10) years, reckoned from the date of the issuance of the certificate of title, the action filed on December 23, 1985 has clearly prescribed. The elements of laches are present in this case, viz: (1) conduct on the part of the defendant, or one under whom he claims, giving rise to the situation that led to the complaint and for which the complainant seeks a remedy; (2) delay in asserting the complainants rights, having had knowledge or notice of defendants conduct and having been afforded an opportunity to institute a suit; (3) 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 (4) injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held barred Of the facts which support the finding of laches, stress should be made of the following: (a) the petitioners Romana unquestionably gained actual knowledge of the donation propter nuptias when the deed of partition was executed in 1973 and the information must have surfaced again when the compromise agreement was forged in 1976, and; (b) as petitioner Romana was a party-signatory to the two documents, she definitely had the opportunity to question the donation propter nuptias on both occasions, and she should have done so if she were of the mindset, given the fact that she was still in possession of the land in dispute at the time. But she did not make any move. She tarried for 11 more years from the execution of the deed of partition until she, together with petitioner Constancia, filed the annulment case in 1985.

request, petitioner, owner of JMG Publishing House, a printing shop, submitted to respondent draft samples and price quotation of campaign materials. Respondent wife approved the price quotation and thereby giving the petitioner a go signal to print the campaign materials. With limited time, petitioner availed the services and facilities of Metro Angeles Printing and of St. Joseph Printing Press, owned by his daughter Jennifer Gozun and mother Epifania Macalino Gozun, respectively. Petitioner delivered the campaign materials to the respondents quarters. Meanwhile, Lilian Soriano, respondents sister-in-law obtained cash advance from petitioner for payment of the poll watchers and other related expenses. The said cash advance was indicated in the diary of the petitioner. Later, respondents wife paid the petitioner P1M which the latter issued a receipt for. Despite the repeated demands, the respondent failed to pay the said obligation. Petitioner and respondent being compadres, they having been principal sponsors at the weddings of their respective daughters, waited for more than three (3) years for respondent to honor his promise but to no avail, compelling petitioner to endorse the matter to his counsel who sent respondent a demand letter. Respondent, however, failed to heed the demand. Petitioner thus filed a complaint against respondent to collect the remaining amount of P1,177,906 plus "inflationary adjustment" and attorneys fees. Respondent denied the allegation that there was an obligation to pay petitioner for the campaign materials were understood to be a donation from his family and friends and that all contracts pertaining to his personal expenses were coursed through and signed by him following the mandate of the COMELEC. With regards to cash advance, he denied having given her authority to do so. With regards to the receipt received upon payment, it was the respondents first time to see the receipt and that the P1M was to compensate with the services rendered by petitioner out of respondents good will.

Issue: WON the respondent is liable for the obligation incurred from the petitioner. Held: Yes but only with respect to the services rendered by the petitioner in printing the campaign materials by his own printing shop for the respondent. - By the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. Contracts entered into in the name of another person by one who has been given no authority or legal representation or who has acted beyond his powers are classified as unauthorized contracts and are declared unenforceable, unless they are ratified. - Generally, the agency may be oral, unless the law requires a specific form. However, a special power of attorney is necessary for an agent to, as in this case, borrow money, unless it be urgent and indispensable for the preservation of the things which are under administration. Since nothing in this case involves the preservation of things under administration, a determination of whether Soriano had the special authority to borrow money on behalf of respondent is in order. On the amount borrowed by Lilian Soriano: - the receipt issued by petitioner presented by petitioner to support his claim unfortunately only indicates the P253,0000.00 was received by one Lilian R. Soriano on 31 March 1995, but without specifying for what reason the said amount was delivered and in what capacity did Lilian R. Soriano received the money. Nowhere in the note can it be inferred that defendantappellant was connected with the said transaction. Under Article 1317 of the New Civil Code, a person cannot be bound by contracts he did not authorize to be entered into his behalf. It bears noting that Lilian signed in the receipt in her name alone, without indicating therein that she was acting for and in behalf of respondent. She thus bound herself in her personal capacity and not as an agent of respondent or anyone for that matter. It is a general rule in the law of agency that, in order to bind the principal by a mortgage on real property executed by an agent, it must upon its face purport to be made, signed and sealed in the name of the principal, otherwise, it will bind the agent only. It is not enough merely that the agent was in fact authorized to make the mortgage, if he has not acted in the name of the principal.

JESUS M. GOZUN, petitioner, vs. JOSE TEOFILO T. MERCADO respondent. Facts:

a.k.a.

DON

PEPITO

MERCADO,

In the local elections of 1995, respondent vied for the gubernatorial post in Pampanga. Upon respondents

On the amount incurred with the other two printing press: The parties to a contract are the real parties in interest in an action upon it, as consistently held by the Court. Only the contracting parties are bound by the stipulations in the contract; they are the ones who would benefit from and could violate it. Thus, one who is not a party to a contract, and for whose benefit it was not expressly made, cannot maintain an action on it. One cannot do so, even if the contract performed by the contracting parties would incidentally inure to one's benefit. - In light thereof, petitioner is the real party in interest in this case. - In sum, respondent has the obligation to pay the total cost of printing his campaign materials delivered by petitioner in the total of P1,924,906, less the partial payment of P1,000,000, or P924,906. Litonjua v. Fernandez Facts:

2nd

Issue: 1. 2.

Sometime in 1995, brokers Alimario and Fisisco offered to sell 2 parcels of land to Antonio and Aurelio Litonjua, herein petitioners. The owners were represented by Fernandez and Eleiosida herein respondents. The petitioners agreed to buy the subject property for a price of P5M. They also agreed that the respondents would shoulder the capital gains tax, transfer tax and the expenses for the documentation of the sale. Both parties agreed to meet on Dec. 8, 1995 to finalize the sale. It was also agreed that Fernandez would present SPA, authorizing her to sell the property and to secure the petitioners by the respondent that there were no tenants in the property. However, the broker Fisico only attended the meeting who informed the petitioners that Fernandez was encountering problems with the tenants. After a few weeks of waiting, petitioners wrote to Fernandez demanding their transaction be finalized. Without response, petitioners sent another letter asking for the Deed of Absolute sale covering the subject property and demanden also the turnover of the subject properties to them within 15 days otherwise they will seek legal means. Upon receipt of the letter, Fernandez clarified her stand on the matter with a letter indicating that she did not commit to pay the taxes of the property. With the appearance of the alleged tenants, Fernandez and her cousin changed their minds and the sale will not push through until problems are resolved. Since there is no earnest money demanded, there is no obligation to honor. Thus the petitioners filed for specific performance and damages. WON there is a perfected contract. WON the contract is under the statute of frauds.

Held: 1st issue No perfected contract. Art. 1403. The following contracts are unenforceable, unless they are ratified: (2) Those that do not comply with the Statute of Frauds as set forth in this number. In the following cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or secondary evidence of its contents: (e) An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein. In the case at bar, the court agrees with the appellate court. The last letter of Fernandez can hardly be said to constitute a note or memorandum evidencing the agreement of both parties to enter into a contract as Fernandez did not accept the condition that respondents will be responsible for the payment of the taxes of the property and categorically denied that she did commit to the said agreement. The letter indicated a reason beyond the control of Fernandez that the sale will not push through because of the alleged tenants which was yet to be settled. The defendantsrespondents cannot be said that they arbitrarily changed their minds not to commit to such sale. The phrase

changed their minds does not refer to selling the property to the petitioners but not to sell the property itself to all by reason of the apparent problem. This was buttressed by the respondents statement that we are not selling the property until problems are fully settled. To read a definite previous agreement for the sale of the property in favor of plaintiffs-appellees into the contents of this letter is to unduly restrict the freedom of the contracting parties to negotiate and prejudice the right of every property owner to secure the best possible offer and terms in such sale transactions. Thus the lower court erred in finding that there was a perfected contract of sale or contract to sell under the foregoing circumstances. Hence, Fernandez and the other respondents may not be liable for specific performance and damages. Issue: Not under the satute of frauds. The application of such statute presupposes the existence of a perfected contract. However, for a note or memorandum to satisfy the statute, it must be complete in itself and cannot rest partly in writing and partly in parol. The note or memorandum must contain the names of the parties, the terms and conditions of the contract and a description of the property sufficient to render it capable of identification. Such note or memorandum must contain the essential elements of the contract expressed with certainty that may be ascertained from the note or memorandum itself, or some other writing to which it refers or within which it is connected, without resorting to parol evidence. To be binding on the persons to be charged, such note or memorandum must be signed by the said party or by his agent duly authorized in writing. - In the case at bar, there is no documentation evidence on record that the respondent-owners specifically authorized Fernandez to sell the property. Special Power of the Attorney is required to enter into a contract which involves the transmission of ownership of an immovable property, or for any dominion. Any sale of real property by one purporting to be the agent of the registered owner without any authority therefor in writing from the said owner is null and void. The declarations of the agent alone are generally insufficient to establish the fact or extent of her authority. - In the present case, only the testimony of Antonio Litonjua was adduced to prove that Fernandez represented herself in behalf of the owners and that she promised to present written authorization to sell the property. This was rebutted by the respondent as she indicated in her testimony that she indeed represented the owners but she cannot agree on anything upon the preliminary meeting because she has to secure authorities and relate the matter to her relatives, brothers and sisters. Thus, it was consistent in her complaint and in her testimony that there was no written authorization from the owners to sell the property and the letter relied by the petitioners was not binding on the respondent as the subject owner. - the letter is not a note or memorandum within the context of Article 1403(2) because it does not contain the following: (a) all the essential terms and conditions of the sale of the properties; (b) an accurate description of the property subject of the sale; and, (c) the names of the respondentsowners of the properties. Furthermore, the letter made reference to only one property. The court also noted that the petitioners were not even certain as to the specific area of the property to buy. Their testimony and complaint were inconsistent as to the description of the property. Hence, there was no contract falling under the statute of frauds.