6. Estoppel

C. Estoppel (Civil Code, arts. 1431-1439)

Civil Code, arts. 1431-1439

TITLE IV

ESTOPPEL (n)

Article 1431. Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon.

Article 1432. The principles of estoppel are hereby adopted insofar as they are not in conflict with the provisions of this Code, the Code of Commerce, the Rules of Court and special laws.

Article 1433. Estoppel may be in pais or by deed.

Article 1434. When a person who is not the owner of a thing sells or alienates and delivers it, and later the seller or grantor acquires title thereto, such title passes by operation of law to the buyer or grantee.

Article 1435. If a person in representation of another sells or alienates a thing, the former cannot subsequently set up his own title as against the buyer or grantee.

Article 1436. A lessee or a bailee is estopped from asserting title to the thing leased or received, as against the lessor or bailor.

Article 1437. When in a contract between third persons concerning immovable property, one of them is misled by a person with respect to the ownership or real right over the real estate, the latter is precluded from asserting his legal title or interest therein, provided all these requisites are present:

(1) There must be fraudulent representation or wrongful concealment of facts known to the party estopped;

(2) The party precluded must intend that the other should act upon the facts as misrepresented;

(3) The party misled must have been unaware of the true facts; and

(4) The party defrauded must have acted in accordance with the misrepresentation.

Article 1438. One who has allowed another to assume apparent ownership of personal property for the purpose of making any transfer of it, cannot, if he received the sum for which a pledge has been constituted, set up his own title to defeat the pledge of the property, made by the other to a pledgee who received the same in good faith and for value.

Article 1439. Estoppel is effective only as between the parties thereto or their successors in interest.

Estoppel a condition or state by virtue of which an admission or representation is rendered conclusive upon the person making it and cannot be denied or disproved as against the person relying thereon. (CIVIL CODE, art. 1431)

Estoppel is effective only between the parties thereto or their successors in interest. (CIVIL CODE, art. 1439)

VIII. OBLIGATIONS AND CONTRACTS

A. Obligations

B. Contracts

C. Estoppel (Civil Code, arts. 1431-1439)

Kinds:

• Estoppel in pais (by conduct)
• Estoppel by silence
• Estoppel by acceptance of benefits
• Technical estoppel
• Estoppel by deed
• Estoppel by record
• Estoppel by judgment
• Estoppel by laches

B. As related to the party claiming the estoppel (IRA)

• Ignorance or lack of knowledge and of the means of knowledge of the truth as to the facts in question
• Reliance in good faith, upon the conduct or statement of the party to be estopped; and
• Action or inaction based thereon of such a character as to change the position or status of the party claiming the estoppel, to his injury, detriment, or prejudice. (Manila International Airport Authority v. Ding Velayo Sports Center, Inc., G.R. No. 161718, February 4, 2013)

Requisites of estoppel by laches (CLID)

• Conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation of which complaint is made;
• Delay in asserting the complainant’s right, the complainant having had knowledge or notice of the defendant’s conduct and having been afforded an opportunity to sue; actual knowledge of the commission of the adverse act is not necessary, it being enough that such knowledge may be imputed to the complainant because of circumstances of which he was cognizant;
• Lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit; and
• Injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held to be barred. (Cimafranca v. IAC, G.R. No. L-68687, Jan. 31, 1987)

Estoppel against lessee

A lessee is estopped from asserting title to the thing leased as against the lessor (NCC, Art. 1436), or to deny the lessor’s title, or to assert a better title not only in himself, but also in some third person, including the State while he remains in possession of the leased property and until he surrenders possession to the lessor. (VSC Commercial Enterprises, Inc. v. CA, G.R. No. 121159, December 16, 2002)

This estoppel applies even though the lessor had no title at the time the relation of lessor and lessee was created. It may be asserted not only by the original lessor, but also by those who succeed to his title. (Geminiano v. CA, G.R. No. 120303, June 23, 1997)

Q: Fred sold to Juan a parcel of land, belonging to his minor son, Lino, then under his guardianship, without judicial approval. After the sale, Juan immediately took possession of the land, built a house, and religiously paid the taxes thereon. Nine years thereafter, Lino, no longer a minor, rented the ground floor of the house built by Juan. Lino paid the rent for the first month, then stopped paying. Two years thereafter, when pressed for payment of the accrued rent, Lino refused, claiming ownership over the property, alleging that the sale of the property to Juan, while he was a minor without the approval of the guardianship court, rendered the sale null and void. Is the claim of Lino valid and meritorious? Explain.

A: While Lino remains Juan’s lessee in possession, he is estopped from denying Juan’s title as lessor. His rental of the ground floor does not, by itself, ratify Fred’s unauthorized sale of Lino’s land; ratification requires a separate legal basis and supporting facts. (NCC, Art. 1436; VSC Commercial Enterprises, Inc. v. CA, G.R. No. 121159, December 16, 2002)

Who can be estopped to deny Agency?

• Estoppel of Agent - one professing to act as agent is estopped to deny his agency both as against his asserted principal and the third persons interested in the transaction in which he is engaged
• Estoppel by the Principal
• As to agent one knowing another is acting as his agent and fails to repudiate his acts, or accepts the benefits of them, will be estopped to deny the agency as against such other
• As to sub-agent for the principal to be estopped from denying his liability to a third person, he must have known or be charged with knowledge of the transaction and the terms of the agreement between the agent and sub-agent
• As to third persons one who knows that another is acting as his agent or permitted another to appear as his agent, to the injury of third persons who have dealt with the apparent agent as such in good faith and in the exercise of reasonable prudence, is estopped to deny the agency (Litonjua, Jr. v. Eternit Corp., G.R. No 144805, June 8, 2006.)
• Estoppel of Third Persons – a third person, having dealt with one as an agent may be estopped to deny the agency as against the principal, agent or 3rd persons in interest.
• Estoppel of the Government - government neither estopped by the mistake/error of its agents; may be estopped through affirmative acts of its officers acting within the scope of their authority.

Distinction between Ratification and Estoppel