ARTICLE 1401

THE MANILA BANKING CORPORATION VS. EDMUNDO S. SILVERIO and THE

COURT OF APPEAL
G.R. No. 132887, AUGUT 9, 1973
CHICO-NAZARIO, J.

FACTS:

Santiago Pastrana Uy Toco (Santiago), a Chinese, married Candida Vivares

(Candida), a Filipina and had two (2) daughters Francisca and Concepcion. Before
Santiago’s marriage to Candida, he only had ₱2,000 worth of property. His properties
amassed during his marriage to Candida.
Santiago stayed a little less than a year at China and had an affair with Chan
Quieg. After his return to the Philippines, Santiago never saw Chan Queg again.
However, Chan Queg, in her letters, told Santiago that she bore him a son, Uy Soo Lim.
Santiago never saw Uy Soo Lim but he believed that the latter was his son and put a large
portion of his properties in his will.
Santiago died and left a big fortune for his wife Candida, Francisca, Concepcion
and Uy Soo Lim. Santiago’s will was probated in the Court of First Instance (CFI) of Cebu
and named Benito Tan Unchuan (Francisca’s husband) as the executor of Santiago’s will.
Basilio Uy Bundan (Basilio) was named by Santiago as guardian of Francisca,
Concepcion and Uy Soo Lim at that time as they were minors. Upon the Order of the CFI
of Cebu, the properties which were under the administration of Benito were forwarded to
Basilio for guardianship and administration.
The CFI again furnished an Order noting therein that Francisca reached the age
of majority while Concepcion would reach the age of majority in a few months’ time and
Uy Soo Lim got married in China and ordered Basilio to present a plan of distribution of
Santiago’s properties. Basilio did not comply with the Order and the will was questioned
by the heirs. Francisca and Concepcion filed a motion to oppose the distribution of
Santiago’s estate to Uy Soo Lim as he was not a son, legitimate or illegitimate, alleging
that Santiago’s marriage to Chan Quieg was null and void. Francisca and Concepcion
asked that the distribution proceedings be suspended and the moved to reopen the
testamentary estate of Santiago to properly determine and readjudge the distribution of
such. During the pendency of the proceedings, Uy Soo Lim, who was still a minor at the
time, assisted by Choa Tek Hee, sold to Francisca his right, title and interest over
Santiago’s estate for a consideration of ₱82,500. Upon reaching the age of majority and
after spending all the amount in consideration of relinquishing his right, title and interest
in favor of Francisca, Uy Soo Lim filed an action to rescind and annul the contract he
made in favor of Francisca. Uy Soo Lim alleged among others that Basilio and Benito
induced his consent to execute such deed taking advantage of his young age,
inexperience and misrepresentation of facts. The CFI dismissed Uy Soo Lim’s complaint
on the ground that he was well advised before executing the contract. Further Uy Soo
Lim was not induced by deceit or undue influence to enter into the contract but he entered
into it deliberately with full knowledge of the facts.
ISSUE:
Whether Uy Soo Lim who is incapacitated to enter a contract with Francisca has a
right of action against the latter.
RULING:
Yes. The law provides that, if the right of action is based upon the incapacity of
any one of the contracting parties, the loss of the thing shall not be an obstacle to the
success of the action, unless said loss took place through the fraud of fault of the plaintiff.
In this case, plaintiff has disposed of the whole of the P85,000 which was paid him
in consideration of the execution of the contract he is now seeking to annul. Whatever
difference may exist in the authorities as to the obligation of the infant to return the entire
consideration received as a condition precedent to disaffirming the contract, they are
unanimous in holding that he must return such portion thereof as remains in his
possession when reaching majority.