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ESTOPPEL #42: ROBLETT INDUSTRIAL CONSTRUCTION CONTRACTORS EQUIPMENT CORPORATION

CORPORATION

vs.

CA

AND

FACTS: Respondent Contractors Equipment Corporation (CEC) instituted an action for a sum of money against petitioner Roblett Industrial Construction Corporation (RICC) where the latter incurred unpaid accounts amounting to P342,909.38 by virtue of lease of formers construction equipment. RICCs Assistant Vice President for Finance entered into an Agreement with CEC confirming petitioner's account of the above amount offsetting an amount of Php112,000. CEC manager, sent a letter of demand to petitioner through its Vice President for Finance regarding the latter's overdue account. In reply, petitioner requested for thirty (30) days to have enough time to look for funds to substantially settle its account. On trial, RICC contended that the Agreement was signed with the real intention of having proof of payment. It contended that it has an obligation of only P103,000.00 and actually has an overpayment. It claimed however that the Agreement was not approved by the Board and that the AVP was not authorized to sign thereon. On rebuttal, CEC declared that RICC had received a statement of account in the amount of P376,350.18 which it never questioned. From this amount P3,440.80, based on respondent's account with petitioner and P30,000.00, representing payments made by the latter, were deducted thus leaving a balance of P342,909.38 as mentioned in the Agreement. The trial court rendered judgment holding that CEC was estopped by confirming the validity of the agreement where it confirmed its account with RICC. It was affirmed by CA. ISSUE: Whether CEC was estopped in alleging that it has paid its account with by confirming its account through the agreement? RULING: Yes. The genuineness and due execution of the agreement which was the basis for plaintiff's claim is deemed admitted (Section 8, Rule 8, Rules of Court). Such admission, under the principle of estoppel, is rendered conclusive upon defendant and cannot be denied or disproved as against plaintiff (Art. 1431, Civil Code). Either the agreement is valid or void. It must be treated as a whole and not to be divided into parts and consider only those provisions which favor one party (in this case the defendant). Contracts must bind both contracting parties, its validity or compliance cannot be left to the will of one of them (Art. 1308, New Civil Code). Estoppel in pais arises when one, by his acts, representations or admissions, or by his own silence when he ought to speak out, intentionally or through culpable negligence, induces another to believe certain facts to exist and such other rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted to deny the existence of such facts. This doctrine obtains in the present case. A statement of account for P376,350.18 covering the period above mentioned was received from respondent by petitioner with nary a protest from the latter. Neither did petitioner controvert the demand letter concerning the overdue account of P237,909.38; on the contrary, it asked for ample time to source funds to substantially settle the account.

TRUST #46: COMILANG V BURCENA GR 146853 Facts: Burcenas (respondents), together w/ their mother, Dominga (Dominga), filed a complaint for annulment of document (DONATION) w/ damages against Comilang (petitioner). The complaint alleges that respondents are the owners of the subject property (parcel of land house with a house built thereon) where they acquired the subject property through their earnings while working abroad. The subject property was declared for taxation purposes in Dominga's name as administrator thereof and petitioner caused the execution of a Deed of Donation over said property by taking advantage of Dominga's old age and physical infirmity In his Answer, petitioner contends that: the Deed of Donation was freely and voluntarily executed by Dominga in consideration of her love and affection for him and the subject property was acquired by Dominga together w/ her 2 sisters. Dominga financed out of her own money the construction of the house and subsequent improvements thereof, she being a merchant when she could still travel to Cagayan Valley. During the pendency of the case and before she could take the witness stand, Dominga died. Following pretrial, trial on the merits ensued. Witnesses for the plaintiffs were respondents and their aunt, Margarita Burcena (Margarita); while petitioner testified on his own behalf. RTC held that the donation is void because Dominga could not have validly disposed of the subject property since it was bought with the money sent by respondents while working abroad, although declared for taxation purposes in Dominga's name. On appeal, the CA held that the case involves an implied trust known as purchase price resulting trust under Article 1448, CC where property sold is granted to one party but the price is paid for by another. Thus, the CA sustained the conclusion of the RTC that the donation is void. Issue: Whether CA erred in discussing an issue not brought before it (implied trust)? Held: 1. NO. Reasoning An appellate court is clothed with ample authority to review rulings even if they are not assigned as errors in the appeal (See R51, sec 8, ROC) In this case, since the petitioner directly brought in issue on appeal in his Appellants Brief the declaration of the RTC that Dominga could not have validly disposed of the subject property because respondents are the real owners of the subject property since it was bought with money sent by them, it was well-within the CAs authority to review and evaluate the propriety of such ruling. In holding that an implied trust exists between respondents and Dominga in relation to the subject property and therefore Dominga had no right to donate the same to petitioner, the CA merely clarified the RTC's findings.

The trust created under the 1st sentence of Art 1448, CC is sometimes referred to as a purchase money resulting trust, the elements of which are: (a) an actual payment of money, property or services, or an equivalent, constituting valuable consideration; and (b) such consideration must be furnished by the alleged beneficiary of a resulting trust. Respondents have shown that the two elements are present in the instant case. Dominga was merely a trustee of the respondents in relation to the subject property. Therefore, Dominga could not have validly donated the subject property to petitioner, as expressly provided in Article 736, CC (guardians and trustees cannot donate the property entrusted to them.) SALES #50: EQUATORIAL REALTY DEVELOPMENT, INC. & CARMELO & BAUERMANN, INC., petitioners, vs. MAYFAIR THEATER, INC., respondent. Facts: Carmelo entered into a contract with respondent for the latter to lease A PORTION OF THE SECOND FLOOR of the two-storey building and THE SECOND FLOOR AND MEZZANINE of the two-storey building to respondent Mayfair Theater Inc. Stipulated in the contract was; That if the LESSOR should desire to sell the leased premises, the LESSEE shall be given 30-days exclusive option to purchase the same. Carmelo informed Mayfair that it will sell the property to Equatorial. Mayfair made known its interest to buy the property but only to the extent of the leased premises. Notwithstanding Mayfairs intention, Carmelo sold the property to Equatorial. Mayfair instituted the action a quo for specific performance and annulment of the sale of the leased premises to Equatorial. Carmelo contended that the option to purchase invoked by Mayfair is null and void for lack of consideration. Equitorials allegation; that the option is void for lack of consideration (sic) and is unenforceable by reason of its impossibility of performance because the leased premises could not be sold separately from the other portions of the land and building. Trial Court rendered decision in favor of Carmelo and Equitorial. Issue: Whether the OPTION CLAUSE IN THE CONTRACTS OF LEASE IS ACTUALLY A RIGHT OF FIRST REFUSAL PROVISO? Held: The sale of the property should be rescinded because Mayfair has the right of first refusal. Both Equatorial and Carmelo are in bad faith because they knew of the stipulation in the contract regarding the right of first refusal.

The stipulation is a not an option contract but a right of first refusal and as such the requirement of a separate consideration for the option, has no applicability in the instant case. The consideration is built in the reciprocal obligation of the parties. In reciprocal contract, the obligation or promise of each party is the consideration for that of the other. (Promise to lease in return of the right to first refusal) With regard to the impossibility of performance, only Carmelo can be blamed for not including the entire property in the right of first refusal. Court held that Mayfair may not have the option to buy the property. Not only the leased area but the entire property. LEASE #54: TRISTAN LOPEZ as Attorney-in-Fact of LETICIA and CECILIA LOPEZ v. LETICIA R. FAJARDO A month-to-month lease under the New Civil Code is a lease with a definite period and expires after the last day of any given thirty-day period, upon proper demand and notice by the lessor to vacate. Facts: Leonor Sobrepena and her kins (the Sobrepenas) were the owners of a 2-door apartment at 1326 and 1328 Tomas Mapua St., Sta. Cruz, Manila. The apartment at No. 1328 has for so many years been occupied under a verbal contract of lease Leticia Fajardo (Fajardo). The Sobrepenas sold such property to Leticia and Cecilia Lopez (the Lopez sisters). The Lopez sisters filed before the Metropolitan Trial Court of Manila (MeTC) a complaint for ejectment with damages, against Fajardo on the ground of failure to pay her monthly rentals from May 1999 to February 2000. This was settled after Fajardo paid P35,000.00 representing rental in arrears and current rental for June 2000. Fajardo again failed and refused to pay her July and August 2000 rentals, prompting Lopez, et al. to send her a letter informing her that they have decided to terminate their monthly lease contract effective midnight of August 31, 2000, the very time their oral lease contract shall expire and they are giving her a grace period of one (1) month within which to vacate the premises. Fajardo then remitted to Lopez, et al. a check in the amount of P30,000 representing payment of the rentals in arrears for July 2000, August 2000 and September 2000, and advance rentals for October 2000 up to July 2001 but it was not accepted by Lopez, et al. Having no settlement, Lopez, et al. filed a new complaint for ejectment and damages against Fajardo before the MeTC wherein it held that Lopez, et al. had sufficiently established their cause of action arising from the expiration of the lease contract, the lease being terminable at the end of any month after due notice, and failure of Fajardo to pay the stipulated rental which are the grounds for ejectment under Article 1673 of the Civil Code. Such was appealed by Fajardo to the Regional Trial Court of Manila (RTC) which affirmed in toto the decision of MeTC. Fajardo appealed to the Court of Appeals which held that a minimum of 3-month arrearages is required to justify a lessor to eject a lessee and held that Fajardo had incurred back rentals of only 2 months when Lopez, et al. sent her the letter of demand hence, the filing of the ejectment case was premature. Issue: Whether Lopez, et al. has a valid ground for the ejectment of Fajardo?

Held: A month-to-month lease under Article 1687 is a lease with a definite period and expires after the last day of any given thirty-day period, upon proper demand and notice by the lessor to vacate. Under the Rent Control Law, the prohibition against the ejectment of a lessee by his lessor is not absolute. There are exceptions expressly provided by law, which include the expiration of a lease for a definite period. In the instant case, it was noted that the rentals were paid on a month-tomonth basis. Thus, the lease could be validly terminated at the end of any given month upon prior notice to that effect on the lessee. After all, when the rentals are paid monthly, the lease is deemed to be for a definite period, i.e., it expires at the end of every month. When Lopez, et al. then sent the August 18, 2000 letter to respondent informing her that the lease would be terminated effective at the end of the same month, it was well within his rights. In fine, it was error for the appellate court to ignore the fact that by the earlier-quoted August 18, 2000 letter of which was annexed as Annex "F" to the complaint, they had notified Fajardo of the expiration of the lease contract, another legal ground for judicial ejectment.