#9 FRANCISCO v HERRERA
GR NO. 139982
NOVEMBER 21, 2002
By: GUZMAN
Topic: VOIDABLE CONTRACTS
Petitioners: JULIAN FRANCISCO, (SUBSTITUTED BY HIS HEIRS, NAMELY:
CARLOS ALTEA FRANCISCO; THE HEIRS OF LATE ARCADIO FRANCISCO,
NAMELY CONCHITA SALNGSANG-FRANCISCO (SURVIVING SPOUSE), AND HIS
CHILDREN NAMELY: TEODULO S. FRANCISCO, ET AL.
Respondents: PASTOR HERRERA
Ponente: QUISUMBING, J.
ISSUE
RECIT-READY: In this case, Eligio Herrera Sr., is the father of the respondent,
owned two parcels of land which were bought by the petitioner. However, now, the
HELD/RATIO
respondent, realizing that price was grossly inadequate, tried to negotiate to increase
the purchase price of the lands. But the petitioner refused. Hence, the respondent
filed for a complaint stating that the contracts were null and void, because his father
was afflicted with seniled dementia which already incapacitated to give consent. On
the other hand, in the reply of the petitioner, they said that the respondent ratified
both contracts, by receiving the money. The TC ruled in favor of the respondent,
declaring the contracts were null and void, and ordering the petitioners to return the
said lots, and same with the respondent, to return the money received. The SC ruled
in favor of the petitioners, stating that the contracts were voidable because the
vendor is incapable of giving consent and the actions of the respondent is deemed
ratified such contracts by receiving money and negotiating for a higher purchase
price.
DOCTRINE: An implied or tacit ratification may take the form of accepting and retaining
the benefits of a contract. Hence, in the case at hand, it was clearly shown that the
respondent’s act to negotiate for a higher price of the lots is an implied ratification.
FACTS
 The case is a petition for review on certiorari of the decision of CA, affirming
the decision of RTC which rendered judgment in favor of the respondent.
o Declaring the deeds of sale of the properties, null and void;
o Directed the petitioner to return the subject properties to
respondent, and must refund to petitioner the purchase price.
 The case started when the father of respondent was the owner of two parcels
of land, located at Cainta, Rizal.
o 1st land – 500 sqm; 2nd land – 451 sqm.
 These two parcels of land were bought by the petitioner.
o 1st land – P1 million; 2nd land – P750k
 Now, the respondents (heirs), contended that the price for the two parcels of
land was grossly inadequate.
o They tried to negotiate the price to the petitioner, but it was refused.
 Thereafter, respondents, filed a complaint for annulment of sale with the
RTC.
o Claimed ownership over the second land, allegedly by virtue of a
sale in his favor.
o Likewise, claimed that the 1st land, was subject to co-ownership of
the surviving heirs of the wife of Eligio, Sr.
o Finally, they alleged that the sale of two lots were 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 afflicted
with senile dementia, characterized by deteriorating mental and
physical condition including loss of memory.
 In his answer, petitioner alleged that respondent was estopped from assailing
the sale of the lots because it was already ratified both contracts of sales, by
receiving the consideration offered in each transaction.
 WON the 2 contracts of sale is voidable and capable of being ratified?
 YES. THE SC RULED IN FAVOR OF THE PETITIONER, STATING THAT
THE CONTRACTS OF SALES WERE VOIDABLE CONTRACTS AND
CAPABLE OF BEING RATIFIED.
o Under Art. 1327 of the New Civil Code, provides that 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 as specifically
provided in Art. 1390.
o In the instant case, it was established that the vendor, Eligio, Sr.
entered into an agreement with petitioner, but the former’s capacity
to consent was vititated by senile dementia.
o Thus, the contract is voidable contract – contracts are valid and
binding unless annulled through a proper action.
o Since the said contracts are annullable, they may be rendered
perfectly valid by ratification, which can be express or implied.
o Implied ratification may take the form of accepting and retaining the
benefits of a contract.
o In the case at hand, the SC can’t agree on the contention that the
respondent merely received payments on behalf of his father to
avoid their misuse and that he did not intend to concur with
contracts.
 If he didn’t agree with the contracts, he could have
prevented the petitioner from delivering the payments.
 It was also found that respondent negotiated for the
increase of purchase price while receiving the
installment payments.
o Clearly, respondent was agreeable to the contracts. Thus, through
the actions of the respondent, the contracts are ratified, or it was
clearly there was a ratification on the part of the respondents.