MANOTOK REALTY, INC.

, PETITIONER,
VS.
THE HON. COURT OF APPEALS AND FELIPE MADLANGAWA, RESPONDENTS.
G.R. No. L-45038, April 30, 1987
Ponente: GUTIERREZ, JR.

FACTS:
- On April 2, 1950, the owner of the lot, Clara Tambunting, died and her entire estate,
including her paraphernal properties which covered the lot occupied by the private
respondent were placed under custodia legis.
- On April 22, 1950, the private respondent made a deposit for the said lot in the sum of
P1,500.00 which was received by Vicente Legarda, husband of the late owner.
- As evidenced by the receipt issued by Vicente Legarda, the lot consisted of an area of 240
square meters and was sold at P30.00 per square meter.
- There, thus, remained an unpaid balance of P5,700.00 but the private respondent did not pay
or was unable to pay this balance because after the death of the testatrix, Clara Tambunting
de Legarda, her heirs could not settle their differences. Apart from the initial deposit, no
further payments were made from 1950.
- On April 28, 1950, Don Vicente Legarda was appointed as a special administrator of the
estate. Meanwhile the private respondent remained in possession of the lot in question.
- The petitioner became the successful bidder and vendee of the Tambunting-Legarda
Subdivision consisting of 44 parcels of land spread out in the districts of Tondo and Sta.
Cruz, Manila, pursuant to the deeds of sale executed in its favor by the Philippine Trust
Company on March 13 and 20, 1959, as administrator of the Testate Estate of Clara
Tambunting de Legarda, in Special Proceeding No. 10808 of the Manila probate court.
- The petitioner caused the publication of several notices in the Manila Times’ issues of
January 1, 1966 and the Taliba issues of January 2 and March 16, 1966, advising the
occupants to vacate their respective premises, otherwise, court action with damages would
follow. In addition to these notices by publication, the petitioner sent circulars to the
occupants to vacate. To clear the Tambunting Subdivision.
- The private respondent was one of the many occupants who refused to vacate the lots they
were occupying, so April 26, 1968, the petitioner filed the action below to recover the said
lot.
ISSUE:
WHETHER OR NOT THE HUSBAND OF THE DECEASED, DON VICENTE LEGRADA
HAVE THE CAPACITY TO DISPOSE THE LOT.
RULING:
Article 136 and 137 of the Civil Code of the Philippines provide:
“Article 136. The wife retains the ownership of the paraphernal property”.
“Article 137. The wife shall have the administration of the paraphernal property, unless she delivers
the same to the husband by means of a public instrument empowering him to administer it.”
In this case, the public instrument shall be recorded in the Registry of Property. As for the
movables, the husband shall give adequate security.”
There is nothing in the records that will show that Don Vicente Legarda was the administrator of
the paraphernal properties of Dona Clara Tambunting during the lifetime of the latter. Thus, it
cannot be said that the sale with the private respondent and Don Vicente Legarda had its inception
before the death of Dona Clara Tambunting and was entered into by former for and on behalf of
the latter, but was only consummated after her death. Don Vicente Legarda, therefore, could not
have validly disposed of the lot in dispute as a continuing administrator of the paraphernal
properties of Dona Clara Tambunting.
Article 1409, Civil Code provide, a void contract is inexistent from the beginning. It cannot be
ratified neither can the right to set up the defense of its illegality be waived.
To further distinguish this contract from the other kinds of contract has:
“The right to set up the nullity of a void or non-existent contract is not limited to the parties as in
the case of annullable or voidable contracts; it is extended to third persons who are directly affected
by the contract.”

TEJA MARKETING AND/OR ANGEL JAUCIAN, petitioner,

vs.
HONORABLE INTERMEDIATE APPELLATE COURT * AND PEDRO N. NALE,
respondents.
G.R. No. L-65510 March 9, 1987
Ponente: PARAS.
FACTS:
- On May 9, 1975, the defendant bought from the plaintiff a motorcycle with complete
accessories and a sidecar in the total consideration of P8,000.00.
- Out of the total purchase price the defendant gave a downpayment of P1,700.00 with a
promise that he would pay plaintiff the balance within sixty days.
- The defendant, however, failed to comply with his promise and so upon his own request, the
period of paying the balance was extended to one year in monthly installments until January
1976 when he stopped paying anymore.
- The plaintiff made demands but just the same the defendant failed to comply with the same
thus forcing the plaintiff to consult a lawyer and file this action for his damage in the amount
of P546.21 for attorney's fees and P100.00 for expenses of litigation.
 - The plaintiff also claims that as of February 20, 1978, the total account of the defendant was
already P2,731.06 as shown in a statement of account.
- The agreement also of the parties here was for the plaintiff to undertake the yearly
registration of the motorcycle with the Land Transportation Commission.
- Pursuant to this agreement the defendant on February 22, 1976 gave the plaintiff P90.00, the
P8.00 would be for the mortgage fee and the P82.00 for the registration fee of the
motorcycle.
- Eventually, petitioner Teja Marketing and/or Angel Jaucian filed an action for "Sum of
Money with Damages" against private respondent Pedro N. Nale in the City Court of Naga
City.
ISSUE:
WHETHER OR NOT RESPONDENT COURT ERRED IN APPLYING THE DOCTRINE
OF “PARI DELECTO”.
RULING:
Unquestionably, the parties herein operated under an arrangement, commonly known “kabit
system” whereby a person who was been granted a certificate of public convenience allows another
person who owns motor vehicles to operate under such franchise for a fee. A certificate of public
convenience is a special privilege conferred by the government. Abuse of his privilege by the
grantees thereof cannot countenanced. The “kabit system” has been identified as one of the root
causes of the prevalence of graft and corruption in the government transportation.
Although not outrightly penalized as a criminal offense, the kabit system is invariably recognized as
being contrary to public policy, and, therefore, void and in existent under Article 1409 of the Civil
Code. It is a fundamental principle that the court will not aid either party to enforce an illegal
contract, but will leave both where it finds then. Upon this premise it would be error to accord the
parties relief from their predicament. Article 1412 of the Civil Code denies them such aid.

ISIDORA L. CABALIW AND SOLEDAD SADORRA, PETITIONERS,

VS.
SOTERO SADORRA, ENCARNACION SADORRA, EMILIO ANTONIO, ESPERANZA
RANJO, ANSELMO RALA, BASION VELASCO, IGNACIO SALMAZAN, AND THE
HONORABLE COURT OF APPEALS, RESPONDENTS.
G. R. No. L-25650, June 11, 1975
Ponente: MUNOZ PALMA
FACTS:
- Isidora Cabaliw was the wife of Benigno Sadorra by his second marriage solemnized on May
5, 1915, before the Justice of the Peace of Bayambang, Pangasinan. This couple had a
daughter named Soledad Sadorra.
- During their marriage, the spouses acquired two (2) parcels of land situated in Iniangan,
Dupax, Nueva Vizcaya.
- One parcel with an area of 14.4847 hectares was acquired by a Sales Patent and covered by
Original Certificate of Title No. 1 of the Land Records of Nueva Vizcaya issued in the name
of Benigno Sadorra.
- The other piece of land of about 1-1/2 hectares and covered by Tax Declaration Nos. 6209
and 6642 was secured through purchase.
- Having been abandoned by her husband, Isidora Cabaliw instituted an action for support
with the Court of First Instance of Manila, entitled "Isidora Cabaliw de Orden versus
Benigno Sadorra”.
- On January 30, 1933, judgment was rendered requiring Benigno Sadorra to pay his wife,
Isidora Cabaliw, the amount of P75.00 a month in terms of support as of January 1, 1933,
and P150.00 in concept of attorney's fees and the costs.
- On August 19, 1933, Benigno Sadorra executed two (2) deeds of sale over the two parcels of
land above described in favor of his son-in-law, Sotero Sadorra, the latter being married to
Encarnacion Sadorra, a daughter of Benigno Sadorra by his first marriage. This is unknown
to Isidora Cabaliw.
- Isidora Cabaliw filed in Civil Case 43192 a motion to cite Benigno Sadorra for contempt and
the Court of First Instance of Manila in its Order of May 12, 1937, authorized Isidora to take
possession of the conjugal property, to administer the same, and to avail herself of the fruits
thereof in payment of the monthly support in arrears.
- On February 1, 1940, Isidora filed with the Court of First Instance of Nueva Vizcaya Civil
Case No. 449 against her husband and Sotero Sadorra for the recovery of the lands in
question on the ground that the sale was fictitious; at the same time a notice of lis pendens
was filed with the Register of Deeds of Nueva Vizcaya.
- On October 1, 1954, Isidora and her daughter Soledad filed with the Court of First Instance
of Nueva Vizcaya Civil Case 634 to recover from the spouses Sotero and Encarnacion
Sadorra the aforementioned two parcels of land; they also caused the annotation of a
cautionary notice and notice of lis pendens over T.C.T. 522.
- From the foregoing decision of the lower court in civil case 634 spouses Sotero and
Encarnacion Sadorra appealed to the Court of Appeals and so did the intervenors whose
claims were dismissed.
ISSUES:
WHETHER OR NOT THE CONTRACT OF SALE WAS VALID WITHOUT THE CONSENT
OF THE WIFE AND BY MEANS OF FRAUD.
RULING:
Article 1297 of the old Civil Code which was the law in force at the time of the transaction provides:
“Contracts by virtue of which debtor alienates property by title are presumed to be made in fraud of
creditors”.
“Alienations by onerous title are also presumed fraudulent when made by persons against whom
some judgement has been rendered in any instance or some writ of attachment has been issued. The
decision or attachment need not refer to the property alienated and need not have been obtained by
the party seeking rescission”.
The parties here do not stand in equipoise, for the petitioners have in their favor, by a specific
provision of law, the presumption of a fraudulent transaction which is not overcome by the mere
fact that the deeds of sale in question were in the nature of public instruments.
The principle invoked by the majority opinion that to destroy the validity of an existing public
document "strong and convincing evidence is necessary", operates "where the action was brought by
one party against the other to impugn the contract . . . but that rule cannot operate and does not,
where the case is one wherein the suit is not between the parties inter se but is one instituted by a
third person, not a party to the contract but precisely the victim of it because executed to his
prejudice and behind his back; neither law, nor justice, nor reason, nor logic, should so permit,
otherwise, in such a suit, the courts would be furnishing a most effective shield of defense to the
aggressor.

AIR FRANCE, PETITIONER,

VS.
HONORABLE COURT OF APPEALS, IOLANI DIONISIO, MULTINATIONAL
TRAVEL CORPORATION OF THE PHIL., FIORELLO AND VICKY PANOPIO,
RESPONDENTS.
June 30, 1995
Ponente: ROMERO

FACTS:
- Air France filed a complaint for sum of money and damages against private respondents
Multinational Travel Corporation of the Philippines, Fiorello Panopio and Vicky Panopio
before the Regional Trial Court of Manila, Branch 27, then presided over by the Hon.
Ricardo Diaz.
- On August 31, 1987 in favor of petitioner, ordering private respondents to pay petitioner,
jointly and severally, the amount of P2,518,698.66, with legal rate of interest per annum from
September 22, 1986, until fully paid and P50,000.00 as and for attorney's fees.
- On December 29, 1989, petitioner moved for the issuance of an alias writ of execution on
the ground of unsatisfied judgment. It likewise moved to declare the sale to Iolani Dionisio
of a parcel of land with a house erected thereon in the name of the Multinational Food
 Corporation and covered by Transfer Certificate of Title No. 353935 as one in fraud of
creditors.
- The Corporation, through its President Iolani Dionisio, filed a sworn statement to this effect
with the SEC dated July 28, 1986. However, petitioner alleged that despite its being non-
operational, Multinational Food acquired from Ayala Investment and Development
Corporation (Ayala Corporation) the subject property on February 1, 1985.
- Petitioner further alleged that private respondent spouses subsequently sold the property to
Iolani Dionisio on April 11, 1985.
- On January 4, 1990, on which date the respondent court ordered the issuance of an alias writ
of execution and on January 8, 1990, the same was issued.
- On January 19, 1990, the trial court issued an order requiring Iolani Dionisio and
Multinational Food to answer the allegations contained in petitioner's motion. However,
both parties failed to file their respective answers thereto.
- On November 19, 1990, the court issued an order finding the sale in favor of Iolani Dionisio
of the subject property covered by TCT No. 353935 registered with the Registry of Deeds of
Quezon City in the name of Multinational Food as having been made in fraud of creditors.
- Private respondents filed a motion for reconsideration which was denied in the order of
February 15, 1991
- They then filed a petition for certiorari with the Court of Appeals, alleging that the lower
court acted with grave abuse of discretion amounting to lack of jurisdiction.
- On February 24, 1992, the appellate court rendered a decision annulling and setting aside the
questioned orders.
ISSUE:
WHETHER OF NOT A RESCISSIBLE CONTRACT BE VOID WITHOUT FILING
INDEPENDENT CIVIL ACTION.
RULIING:
Under Art. 1381 of the Civil Code, the following contracts are rescissible:
(1) Those which are entered into by guardians whenever the wards whom they represent suffer
lesion by more than one fourth of the value of the things which are the object thereof;

(2) Those agreed upon in representation of absentees, if the latter suffer the lesion stated in the
preceding number;

(3) Those undertaken in fraud of creditors when the latter cannot in any other manner collect the
claims due them;

(4) Those which refer to things under litigation if they have been entered into by the defendant
without the knowledge and approval of the litigants or of competent judicial authority;
(5) All other contracts specially declared by law to be subject to rescission."

Rescissible contracts, not being void, they remain legally effective until set aside in a rescissory
action and may convey title. Nor can they be attacked collaterally upon the grounds for rescission in
a land registration proceeding.
An action for rescission may not be raised or set up in a summary proceeding through a motion, but
in an independent civil action and only after a full-blown trial. As Article 1383 of the Civil Code
provides:

"Art. 1383. The action for rescission is subsidiary; it cannot be instituted except when the party
suffering damage has no other legal means to obtain reparation for the same."
Clearly, the rights and defenses which the parties in a rescissible contract may raise or set up cannot
be properly ventilated in a motion but only in a full trial.

CORNELIA CLANOR VDA. DE PORTUGAL, FRANCISCO C. PORTUGAL,

PETRONA C. PORTUGAL, CLARITA PORTUGAL, LETICIA PORTUGAL, AND
BENEDICTO PORTUGAL, JR., PETITIONERS,
VS.
INTERMEDIATE APPELLATE COURT AND HUGO C. PORTUGAL,
RESPONDENTS.
G.R. No. 73564, March 25, 1988
Ponente: SARMIENTO

FACTS:
- Cornelia Clanor and her late husband Pascual Portugal, during the lifetime of the latter, were
able to accumulate several parcels of real property.
- In January, 1967, the private respondent Hugo Portugal, a son of the spouses, borrowed
from his mother, Cornelia, the certificates of title to the above-mentioned parcels of land on
the pretext that he had to use them in securing a loan that he was negotiating. Cornelia, the
loving and helpful mother that she was, assented and delivered the titles to her son.
- After Pascual Portugal died on November 17, 1974. (Cornelia herself died on November 12,
1987.)
- The petitioners herein, for the purposes of executing an extra-judicial partition of Pascual's
estate, wished to have all the properties of the spouses collated, Cornelia asked the private
 respondent for the return of the two titles she previously loaned, Hugo manifested that the
said titles no longer exist.
- This falsification was triggered by a deed of sale by which the spouses Pascual Portugal and
Cornelia Clanor purportedly sold for P8,000.00 the two parcels of land adverted to earlier to
their two sons, Hugo and Emiliano.
- Confronted by his mother of this fraud, Emiliano denied any participation.
ISSUES:
(1) WHETHER OR NOT THE ACTION HAS PRESCRIBED.
(2) WHETHER OR NOT THE APPELLATE COURT COULD ENTERTAIN THE
DEFENSE OF PRESCRIPTION WHICH WAS NOT RAISED BY THE PRIVATE IN
THEIR ANSWER TO THE COMPLAINT NOR IN A MOTION DISMISS.
RULING:
Article 1391 of the Civil Code which lays down the rule that an action to annul a contract based on
fraud prescribes in four years, applies. Hence, according to the respondent court, as more than four
years had elapsed from January 23, 1967 when the assailed deed was registered and the petitioners'
cause of action supposedly accrued, the suit has already become stale when it was commenced on
October 26, 1976, in the Court of First Instance of Cavite. For reasons shortly to be shown, we
cannot give our imprimatur to either view.
The case at bar is not purely an action for reconveyance based on an implied or constructive trust.
Neither is it one for the annullment of a fraudulent contract. A closer scrutiny of the records of the
case readily supports a finding that fraud and mistake are not the only vices present in the assailed
contract of sale as held by the trial court.
Applying the provisions of Articles 1350, 1352, and 1409 of the new Civil Code in relation to the
indispensable requisite of a valid cause or consideration in any contract, and what constitutes a void
or inexistent contract, we rule that the disputed deed of sale is void ab initio or inexistent, not
merely voidable. And it is provided in Article 1410 of the Civil Code, that “The action or defense
for the declaration of the inexistence of a contract does not prescribe."

JULIAN FRANCISCO (SUBSTITUTED BY HIS HEIRS, NAMELY: CARLOS ALTEA

FRANCISCO; THE HEIRS OF LATE ARCADIO FRANCISCO, NAMELY: CONCHITA
SALANGSANG-FRANCISCO (SURVIVING SPOUSE), AND HIS CHILDREN
NAMELY: TEODULO S. FRANCISCO, EMILIANO S. FRANCISCO, MARIA
THERESA S. FRANCISCO, PAULINA S. FRANCISCO, THOMAS S. FRANCISCO;
PEDRO ALTEA FRANCISCO; CARINA FRANCISCO-ALCANTARA; EFREN ALTEA
FRANCISCO; DOMINGA LEA FRANCISCO-REGONDON; BENEDICTO ALTEA
FRANCISCO AND ANTONIO ALTEA FRANCISCO), PETITIONER,
VS.
PASTOR HERRERA, RESPONDENT.
November 21, 2002
Ponente: QUISUMBING
FACTS:
- Eligio Herrera, Sr., the father of respondent, was the owner of two parcels of land, one
consisting of 500 sq. m. and another consisting of 451 sq. m.
- On January 3, 1991, petitioner bought from said landowner the first parcel, covered by TD
No. 01-00495, for the price of P1,000,000, paid in installments from November 30, 1990 to
August 10, 1991.
- On March 12, 1991, petitioner bought the second parcel covered by TD No. 01-00497, for
P750,000.
- That the contract price for the two parcels of land was grossly inadequate, the children of
Eligio, Sr., namely, Josefina Cavestany, Eligio Herrera, Jr., and respondent Pastor Herrera,
tried to negotiate with petitioner to increase the purchase price.
- He likewise claimed that the first parcel, the lot covered by TD No. 01-00495, was subject to
the co-ownership of the surviving heirs of Francisca A. Herrera, the wife of Eligio, Sr.,
considering that she died intestate on April 2, 1990, before the alleged sale to petitioner.
- Finally, respondent also alleged that the sale of the two lots was null and void on the ground
that at the time of sale, Eligio, Sr. was already incapacitated to give consent to a contract
because he was already afflicted with senile dementia, characterized by deteriorating mental
and physical condition including loss of memory.
- Petitioner contended that respondent had effectively ratified both contracts of sales, by
receiving the consideration offered in each transaction.
- Petitioner then elevated the matter to the Court of Appeals in CA-G.R. CV No. 47869. On
August 30, 1999, however, the appellate court affirmed the decision of the Regional Trial
Court.
ISSUE:
WHETHER OR NOT THE ASSAILED CONTRACTS OF SALE VOID OR MERELY
VOIDABLE AND HENCE CAPABLE OF BEING RATIFIED.
RULING:
A void or inexistent contract is one of which has no force and effect from the very beginning.
Hence, it is as if it has never been entered into and cannot be validated either by the passage of a
time or by ratification. There are two of void contracts: (1) those where one of the essential
requisites of a valid contract as provided by the Article 1318 of the Civil Code is totally wanting; and
(2) those declared to be so under Article 1409 of the Civil Code of the Philippines. By contrast, a
voidable or annullable contract is one on which the essential requisites for validity under Article
1318 are present, but vitiated by want of capacity, error, violence, intimidation, undue influence, or
deceit.
Article 1318 of the Civil Code states that no contract exist unless there is a concurrence of a consent
of the parties, object certain as subject matter, and cause of the obligation established. Article 1327
provides that the insane or demented persons cannot give consent to a contract. But, if an insane or
demented person does enter into contract, the legal effect is that the contract is voidable or
annullable as specifically provided in Article 1390.
In the present case, it was established that the vendor Eligio, Sr. entered into an agreement with the
petitioner, but that the former’s capacity to consent was vitiated by senile dementia. Hence, we must
rule that the assailed contracts are not void or inexistent per se; rather, these are contracts that are
valid and binding unless annulled through a proper action filed in court seasonably.

BENJAMIN CORONEL AND EMILIA MEKING VDA. DE CORONEL,

PETITIONERS,
VS.
FLORENTINO CONSTANTINO, AUREA BUENSUCESO, AND THE HONORABLE
COURT OF APPEALS, RESPONDENTS.
G.R. No. 121069, February 07, 2003
Ponente: AUSTRIA-MARTINEZ
FACTS:
- The subject property consists of two parcels of land situated in Sta. Monica, Hagonoy,
Bulacan, designated as Cadastral Lots Nos. 5737 and 5738.
- The property is originally owned by Honoria Aguinaldo. One-half (1/2) of it was inherited
by Emilia Meking Vda. de Coronel together with her sons Benjamin, Catalino and Ceferino,
all surnamed Coronel. The other half was inherited by Florentino Constantino and Aurea
Buensuceso.
- On February 20, 1991, Constantino and Buensuceso filed a complaint for declaration of
ownership, quieting of title and damages with prayer for writ of mandatory and/or
prohibitory injunction with the Regional Trial Court of Bulacan (Branch 8) against Benjamin,
Emilia and John Does, docketed as Civil Case No. 105-M-91.
- On April 23, 1981, Jess C. Santos and Priscilla Bernardo purchased the property belonging
to Emilia and her sons by virtue of a deed of sale signed by Emilia; on June 21, 1990, Santos
and Bernardo in turn sold the same to Constantino and Buensuceso by virtue of a
compromise agreement in Civil Case No. 8289-M.
- They are the owners of the subject property and defendants have illegally started to
introduce construction on the premises in question; and pray that “defendants respect,
acknowledge and confirm the right of ownership of the plaintiffs to the share, interest and
participation of the one-third (1/3) portion of the above described property”.
- Defendants filed their Answer, pre-trial ensued wherein the parties stipulated that: (1) the
property in question was previously owned by Honoria Aguinaldo, one-half (1/2) of which
was inherited by the defendants while the other half was inherited by the plaintiffs from the
same predecessor; (2) it was admitted by counsel for the defendants that there was a sale
between Jess Santos and the plaintiffs covering the subject property; and (3) that there was
 no evidence presented in Civil Case No. 8289-M by either of the parties and that the
decision therein was based on a compromise agreement.
ISSUES:
I - WHETHER OR NOT THE CONTRACT OF SALE EXECUTED BY A PARENT-CO-
OWNER, IN HER OWN BEHALF, IS UNENFORCEABLE WITH THE REPSECT TO THE
SHARES OF HER CO-HEIRS-CHILDREN;
II – WHETHER OR NOT THE MINOR CHILDREN CAN RATIFY UNAUTHORIZED
ACTIONS OF THEIR PARENTS
III – WHETHER OR NOT THE CO-HEIRS ARE INDISPENSIBLE DEFENDANTS IN AN
ACTION FOR DECLARATION OF OWNERSHIP AND QUIETING PF TITLE
IV – WHETER OR NOT THE DEED OF SALE WHICH IS A PRIVATE DOCUMENT WAS
SUFFICIETLY ESTABLISHED WHEN THE COUNSEL FOR THE DEFENDANTS-
PETITIONERS ADMITTED ONLY ITS EXISTENCE BUT NOT ITS CONSENTS.

RULING:
To answer the third issue, Article 493 of the Civil Code states, “Each co-owner shall have the full
ownership of his part of the fruits and benefits pertaining thereto, and he may therefore alienate,
assign or mortgage it, and even substitute another person in its enjoyment, except when personal
rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners,
shall be limited to the portion which may be allotted to him in the division upon the termination of
the co-ownership.”
Consequently, the sale of the subject property made by Emilia in favor of Santos and Bernardo is
limited to the portion which may be allotted to her upon the termination of her co-ownership over
the subject property with her children.
To answer the first, second and fourth issue, applying Article 1317 and 1403 of the Civil Code, the
Court of Appeals ruled that through their inaction and silence, the three sons of Emilia are
considered to have ratified the aforesaid sale of the subject property by their mother.
Article 1317 and 1403(1) of the Civil Code provide:
“Article 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 whose behalf it has been executed, before it is revoked by the other
contracting parties.”
“Article 1403. The following contracts are enforceable, unless they are ratified”
 (1) Those 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.

The three sons of Emilia did not ratify the sale.

“Ratification means that one under no disability voluntarily adopts and give sanction to some
unauthorized act or defective proceeding, which without his sanction would not be binding on him.
It is this voluntary choice, knowingly made, which amounts to a ratification of what was therefore
unauthorized, and becomes the authorized act of the party so making the ratification”.
No evidence was presented to show that the three brothers were aware of the sale made by their
mother. Unaware of such sale, Catalino, Ceferino and Benjamin could not be considered as having
voluntarily remained silent and knowingly chose not to file an action for the annulment of the sale.
Their alleged silence and inaction may not be interpreted as an act of ratification on their part.
We also find no concrete evidence to show that Ceferino, Catalino and Benjamin benefited from the
sale. It is true that private respondent Constantino testified that Benjamin took money from Jess
Santos but this is mere allegation on the part of Constantino. No other evidence was presented to
support such allegation.

IGLESIA FILIPINA INDEPENDIENTE, PETITIONER,

VS.
HEIRS OF BERNARDINO TAEZA, RESPONDENTS.
G.R. No. 179597, February 03, 2014

Ponente: PERALTA
FACTS:
- The plaintiff-appellee Iglesia Filipina Independiente (IFI, for brevity), a duly registered
religious corporation, was the owner of a parcel of land described as Lot 3653, containing an
area of 31,038 square meters, situated at Ruyu (now Leonarda), Tuguegarao, Cagayan, and
covered by Original Certificate of Title No. P-8698.
- Between 1973 and 1974, the plaintiff-appellee, through its then Supreme Bishop Rev.
Macario Ga, sold Lot 3653-D, with an area of 15,000 square meters, to one Bienvenido de
Guzman.
- On February 5, 1976, Lot Nos. 3653-A and 3653-B, with a total area of 10,000 square
meters, were likewise sold by Rev. Macario Ga, in his capacity as the Supreme Bishop of the
plaintiff-appellee, to the defendant Bernardino Taeza, for the amount of P100,000.00,
through installment, with mortgage to secure the payment of the balance. Subsequently, the
defendant allegedly completed the payments.
 - In 1977, a complaint for the annulment of the February 5, 1976 Deed of Sale with Mortgage
was filed by the Parish Council of Tuguegarao, Cagayan, represented by Froilan Calagui and
Dante Santos, the President and the Secretary, respectively, of the Laymen's Committee,
with the then Court of First Instance of Tuguegarao, Cagayan, against their Supreme Bishop
Macario Ga and the defendant Bernardino Taeza.
- Bishop Abdias dela Cruz was elected as the Supreme Bishop. Thereafter, an action for the
declaration of nullity of the elections was filed by Rev. Ga, with the Securities and Exchange
Commission (SEC).
- Supreme Bishop Rev. Soliman F. Ganno, filed a complaint for annulment of the sale of the
subject parcels of land against Rev. Ga and the defendant Bernardino Taeza, which was
docketed as Civil Case No. 3747.
- On February 11, 1988, the Securities and Exchange Commission issued an order resolving
the leadership issue of the IFI against Rev. Macario Ga.
- The defendant Bernardino Taeza registered the subject parcels of land. Consequently,
Transfer Certificate of Title Nos. T-77995 and T-77994 were issued in his name.
- In January 1990, a complaint for annulment of sale was again filed by the plaintiff-appellee
IFI, this time through Supreme Bishop Most Rev.
- Tito Pasco, against the defendant-appellant, with the Regional Trial Court of Tuguegarao
City, Branch 3.
- On November 6, 2001, the court a quo rendered judgment in favor of the plaintiff-appellee.
It held that the deed of sale executed by and between Rev. Ga and the defendant-appellant is
null and void.
ISSUES:
I – WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT FINDING THE
FEBRUARY 5, 1976 DEED OF SALE WITH MORTGAGE AS UNENFORCEABLE; AND

RULING:
This case clearly falls under the category of unenforceable contracts mentioned in Article 1403,
paragraph (1) of the Civil Code, which provides, thus:
Article 1403. The following contracts are unenforceable, unless ratified:
(1) Those entered into in the name of another person by one who was given no authority of
legal representation, or who has acted beyond his powers
Unenforceable contracts are those which cannot be enforced by a proper action in court, unless they
are ratified, because either they are entered into without in the excess of authority or they do not
comply with the statute of frauds or both the contracting do not possess the required legal capacity.
In the present case, however respondents’ predecessor-in-interest, Bernardino Taeza, had already
obtained a transfer certificate of title in his name over the property in question. Since the person
supposedly transferring ownership was not authorized to do so, the property had evidently been
acquired by mistake.
In Vda. de Esconde v. Court of Appeals, the Court affirmed the trial court's ruling that the
applicable provision of law in such cases is Article 1456 of the Civil Code which states that “if
property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered
a trustee of an implied trust for the benefit of the person from whom the property comes.”