Gochan & Sons Realty Corp. vs Heir of Raymundo Baba

By Ashley Patalinjug

Facts:
The case at bar is an estate lot owned by spouses Raymundo Baba and Dorotea Inot. That upon the demise of the husband, an extrajudicial settlement of his estate was divided among his heirs, Dorotea Inot and his 2 children, Victoriano Baba and Gregorio Baba.

The estate lot was sold and was issued with TCT to petitioner Felix Gochan and Sons Realty Corporation. However, a complaint was filed against Gochan Corp. for quieting of title and reconveyance with damages by the respondents Bestra, Maricel, Crecencia, Antonio and Petronila, all surnamed Baba. Their contentions were:


1. THEY WERE AMONG THE 7 CHILDREN AND HEIRS OF DOROTEA INOT AND RAYMUNDO BABA;

2. THAT THAT PETITIONERS CONNIVED WITH DOROTEA ET.AL IN EXECUTING THE EXTRAJUDICIAL SETTLEMENT AND DEED OF SALE WITH FRAUD, DEPRIVING THEM OF THEIR HEREDITARY SHARE;

3. THAT SAID TRANSACTIONS WERE VOID BECAUSE THEY NEVER CONSENTED TO THE SAID SALE AND EXTRAJUDICIAL SETTLEMENT.



Issue:
Whether an absence of any of the essential requisites can be considered as a valid contract.


Held:

Under Article 1318 of the Civil Code, there is no contract unless the following requisites concur:

1. consent of the contracting parties;
2. object certain which is the subject matter of the contract; and
3. cause of the obligation.


The absence of any of these essential requisites renders the contract inexistent and an action or defense to declare said contract void ab initio does not prescribe, pursuant to Article 1410 of the same Code.

One of the requisites of a valid contract namely, the consent and the capacity to give consent of the parties to the contract, is an indispensable condition for the existence of consent. Legal consent presupposes capacity. Thus, there is no contract when the agreement is entered into by one in behalf of another who has never given him authorization therefor unless he has by law a right to represent the latter.

Contracting parties must be juristic entities at the time of the consummation of the contract. Stated otherwise, to form a valid and legal agreement it is necessary that there be a party capable of contracting and a party capable of being contracted with. Hence, if any one party to a supposed contract was already dead at the time of its execution, such contract is undoubtedly simulated and false and therefore null and void by reason of its having been made after the death of the party who appears as one of the contracting parties therein. The death of a person terminates contractual capacity.

Petition is DENIED. The case is REMANDED to the RTC.