URETA vs. URETA, G.R. No. 165748, September 14, 2011 -Lacking in an absolutely simulated contract is consent which is essential to a valid and enforceable contract. Thus, where a person, in order to place his property beyond the reach of his creditors, simulates a transfer of it to another, he does not really intend to divest himself of his title and control of the property; hence, the deed of transfer is but a sham. Similarly, in this case, Alfonso simulated a transfer to Policronio purely for taxation purposes, without intending to transfer ownership over the subject lands.
RUBIAS vs. BATILLER, G.R. NO. L-35702 May 29, 1973
The lower court held that the purchase by a lawyer of the property in litigation from his client is categorically prohibited by Article 1491, paragraph (5) of the Philippine Civil Code, and that consequently, plaintiff's purchase of the property in litigation from his client was void
and could produce no legal effect, by virtue of Article 1409, paragraph (7) of our Civil Code. Contracts "expressly prohibited or declared void by law' are "inexistent and that "(T)hese contracts cannot be ratified, neither can the right to set up the defense of illegality be waived."
ART 1410
TONGOY vs. THE HONORABLE COURT OF APPEALS, G.R. NO. L- 45645 June 28, 1983
The issue in this case is whether or not the rights of herein respondents over subject properties, which were the subjects of simulated or fictitious transactions, have already prescribed. A void or inexistent contract is one which has no force and effect from the very beginning, as if it had never been entered into, and which cannot be validated either by time or by ratification.
LITA ENTERPRISES, INC.,vs. IAC, G.R. NO. L-64693 April 27, 1984 Unquestionably, the parties herein operated under an arrangement, commonly known as the "kabit system", whereby a person who has been granted a certificate of convenience allows another person who owns motors vehicles to operate under such franchise for a fee, and the petitioner prays that private respondents be declared liable to petitioner for whatever amount the latter has paid. It is a fundamental principle of in pari delicto that the court will not aid either party to enforce an illegal contract, but will leave them both where it finds them.
ARSENAL vs. IAC, G.R. NO. L-66696 July 14, 1986
Petitioner questions the validity of the sale between the respondent and Suralta but the lower court held that the benefit of said prohibition in the Public Land Act against the disposal of any land granted to a citizen under that law does not inure to any third party. 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 annulable or voidable contracts. The right to set up the nullity of a void or non-existent contract is extended to third persons who are directly affected by the contract.
MANOTOK REALTY, INC., vs. THE HON. COURT OF APPEALS, G.R. NO. L-45038 April 30, 1987
Don Legarda sold the paraphernal property of Dona Clara to the respondent. It was sold three months after he was appointed as administrator of the estate of Dona Clara Tambunting. The sale between Don Vicente Legarda and the private respondent is void ab initio, the
former being neither an owner nor administrator of the subject property, and the sale cannot be the subject of the ratification by the probate court.
PORTUGAL vs. IAC, G.R. NO. 73564 March 25, 1988
Respondent, through fraudulent means was able to transfer the lot from his parents to himself without consideration or cause through a purported deed of The IAC held that the action had already prescribed because an action to annul a contract based on fraud prescribes in four years. The SC, however, held that the alleged contract of sale is vitiated by the total absence of a valid cause or consideration which is an indispensable requisite for the existence of a valid contract. Thus, Article 1410 of the Civil Code provides that '(T)he action or defense for the declaration of the inexistence of a contract does not prescribe.
PHILIPPINE BANKING CORPORATION vs. LUI SHE, G.R. NO. L- 17587, September 12, 1967
The illicit purpose becomes the illegal causa rendering the contracts void. TEJA MARKETING vs. IAC, G.R. NO. L-65510 March 9, 1987
The parties operated under an arrangement, commonly known as the "kabit system" whereby a person who has been granted a certificate of public convenience allows another person who owns motor vehicles to operate under such franchise for a fee. 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 and 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.
B. VOIDABLE CONTRACTS ART 1327
FRANCISCO vs. HERRERA, G.R. NO. 139982, November 21, 2002 The vendor Eligio, Sr. entered into an agreement with petitioner, but that the former’s capacity to consent was vitiated by senile dementia. Insane or demented persons cannot give consent to a contract, but if an insane
or demented person does enter into a contract, the legal effect is that the contract is voidable or annullable.
CORONEL vs. CONSTANTINO, G.R. NO. 121069, February 7, 2003 Applying Articles 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. Ratification means that one under no disability voluntarily adopts and gives sanction to some unauthorized act or defective proceeding, which without his sanction would not be binding on him , hence, an alleged silence and inaction may not be interpreted as an act of ratification on their part.
C. UNENFORCEABLE CONTRACTS
YUVIENCO vs. DACUYCUY, G.R. NO. L-55048 May 27, 1981
Respondent judge assumed that as long as the requirements of perfection of a contract are present in a contract which involves payment in installments, the Statute of Frauds would no longer apply as long as the total price or consideration is mentioned in some note or memorandum and there is no need of any indication of the manner in which such total price is to be paid. In any sale of real property on installments, the Statute of Frauds read together with the perfection requirements of Article 1475 of the Civil Code must be understood and applied in the sense that the idea of payment on installments must be in the requisite of a note or memorandum therein contemplated.
BISAYA LAND TRANSPORTATION CO., INC., vs. SANCHEZ, G.R. NO. 74623 August 31, 1987
In the case at bar, it is undisputed that Atty. Adolfo Amor was entrusted, as receiver, with the administration of BISTRANCO and it business, but the act of entering into a contract is one which requires the authorization of the court which appointed him receiver. The questioned contracts can rightfully be classified as unenforceable for having been entered into by one who had acted beyond his powers, due to Receiver Amor's failure to secure the court's approval of said Contracts.