Tuesday, July 11, 2023

Case Digest: Tan Ah Chan vs Gonzales, 52 Phil 180

Tan Ah Chan vs Gonzales, 52 Phil 180

Subject: Obligations and Contracts

FACTS

On July 28,1924, Eduardo B. Gonzalez, as the result of negotiations conducted by the broker, Mrs. Helen Dahlke, conveyed to Tang Ah Chan and his wife Kwong Kam Koon three parcels of land contiguous to each other of an aggregate area of 5,635.40 square meters for the sum of P106,000. Of this amount, Tang Ah Chan paid P6,000 in cash. To secure the payment of the balance of P100,000,

Tang Ah Chan mortgaged to Gonzales the land thus conveyed and another property located City of Manila. The interest on the mortgage was paid up to and including December, 1924, but since that time Tang Ah Chan has been in default.

The broker Dahlke delivered to Tang Ah Chan at the beginning of the negotiations a blueprint plan of the land with the border cut off so that Tang Ah Chan would not know who the owner was, and this plan showed the property. This is admitted by all the parties and is inconsistent with the theory of fraud.

ISSUE

Can the action for the rescission of the contract on the ground of deceit prosper?

RULING

No. Art. 1393 provides that, Ratification may be effected expressly or tacitly. It is understood that there is a tacit ratification if, with knowledge of the reason which renders the contract voidable and such reason having ceased, the person who has a right to invoke it should execute an act which necessarily implies an intention to waive his right.

The case comes squarely within the purview of the provisions of the Civil Code under the subject of Nullity of Contracts which pertain to ratification. “

“Ratification may be either express or implied. It shall be deemed that there is an implied ratification

when a person entitled to avail himself of any ground for the annulment of the contract should, with knowledge of its existence and after it has ceased, do anything which necessarily implies an intention to waive such right.

ART. 1396 of the NCC provides that “Ratification purges the contract of all defects to which it may have been subject as from the moment it was entered into.”

It results, therefore, that after a contract is validly ratified, no action to annul the same can be maintained based upon defects relating to its original validity.

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