ESTOPPEL Adoracion E. Cruz, et al. v. CA and Sps.

Eliseo & Virginia Malolos

 “An important branch of American Law
GR 126713, Jul. 27, 1998
is estoppel. It is a source of many rules
FACTS: Petitioners, in their transactions
which work out justice between the
with others, have declared that the other
parties, thru the operation of the
lands covered by the Memorandum of
principle that an admission or
Agreement are absolutely owned, without
representation is rendered conclusive
indicating the existence of a co-ownership
upon the person making it, and cannot
over such properties.
be denied or disproved as against the
Issue: Are petitioners estopped from
person relying thereon.”
claiming otherwise?
HELD: Yes, because the petitioners’ very
ARTICLE 1431 own acts and representations, as evidenced
Concept of Estoppel by the deeds of mortgage and of sale, have
 “Speaking generally, it may be said that denied such co-ownership. Under the
estoppel is a bar which precluded a principle of estoppel, petitioners are barred
person from denying or asserting from claiming co-ownership of the lands in
anything contrary to that which has issue. In estoppel, a person, who by his
been, in contemplation of law, deed or conduct has induced another to act
established as the truth either by acts in a particular manner, is barred from
of judicial or legislative officers, or by adopting an inconsistent position, attitude
his own deed or representation either or course of conduct that thereby causes
express or implied.” loss or injury to another. It further bars him
 NOTE: In Lopez v. Ochoa (L-7955, May from denying the truth of a fact which has,
30, 1958), the Supreme Court held that in the contemplation of law, become
waiver and estoppel are frequently settled by the acts and proceedings of
used as convertible terms. The doctrine judicial or legislative offi cers or by the act
of waiver belongs to the family of, is of of the party himself, either by conventional
the nature of, is based on, estoppel. writing or by representations, express or
The essence of waiver is estoppel, and implied of in pais.
where there is no estoppel, there is no
waiver. This is especially true where Origin of Estoppel
the waiver relied upon is constructive  The doctrine of estoppel has its origin
or implied from the conduct of a party. in equity, and is based on moral rights
Thus, when it is asserted that a “party and natural justice.
is in estoppel,” this is the same as  Its applicability to any particular case
saying that said party had made a depends to a very large extent upon
waiver. the special circumstances of the case.

Royales v. Intermediate Appellate Court: Examples of Estoppel

 If recourse to the barangay courts is (a) If a husband in a sworn declaration
not availed of, the complaint may be constituting a family home has stated in
dismissed for lack of a cause of action, said documents that he was married,
unless the requisite has been waived naming his wife, he cannot thereafter be
by failure to set up a timely objection. heard to say that he and the girl are not
The aggrieved person may be deemed married. Therefore, the family home should
to be in estoppel. be considered as conjugal property.
(b) A holder of a promissory note given it would be very easy for the registered
because of gambling who indorses the owner to escape responsibility by simply
same to an innocent holder for value and transferring the property to an indefinite
who assures said party that the note has no person or to one who possesses no
legal defect, is estopped from asserting that property with which to respond fi nancially
there had been an illegal consideration for for the damage or injury done.
the note, and so, he has to pay its value. However, the registered owner who
(c) A person who alleged at one time in has already conveyed or transferred a
court that he was the owner of a certain vehicle has a right to be indemnified by the
cabaret cannot afterwards deny his vendee or transferee for the amount that
ownership thereof. he may be required to pay as damages to
(d) A person claiming for his salary was the person injured by the vehicle.
selling his interest in the stock of a (h) A government employee who accepts
corporation to said corporation. The the benefits accruing from the abolition of
corporation refused to consider the sale his offi ce is estopped from questioning the
unless the claim for salary was omitted. So, validity of the abolition and is deemed to
the seller drew another contract, this time have waived the right to contest the same.
with no mention of the salary. He cannot
now claim the salary in view of estoppel. Fieldman’s Insurance Co., Inc. v. Mercedes
(e) A vendee a retro who at one time Vargas Vda. de Songco, et al.
recognized ownership in the subject matter L-24833, Sept. 23, 1968
by the vendor a retro cannot now claim FACTS: Federico Songco, a man of scant
ownership over the same. education being only a first grader, owned a
(f) “He who prevents a thing from being private jeepney, which was covered by a
done may not avail himself of the non- common carrier’s liability insurance by the
performance which he himself has Fieldman’s Insurance Co. The contract was
occasioned,” for the law says to him in procured by the company’s agent, who
effect, ‘this is your own act, and therefore induced Federico to have the vehicle
you are not damnifi ed.’ Where, therefore, insured, although it was NOT a COMMON
a taxpayer repeatedly requested for CARRIER, but a private one. In fact the 42-
reinvestigation of his case and therefore year-old son of Federico had misgivings, for
persuaded the government to postpone the vehicle was merely for private use. The
collection of the tax, he cannot set up agent assured Federico, however, that the
prescription of the action. contract was valid. Sometime later, the
(g) If the registered owner of a private or vehicle was involved in a collision, resulting
public vehicle sells it to another, but does in death to Federico and one of his sons,
not cancel its registration under his name, and physical injuries to two others. When
he will still be responsible if the buyer the surviving widow and other children
causes damage or injury to another. He will sued the Company under the terms of the
be estopped from asserting that the contract, the latter alleged that the same
property had already been transferred by was not valid, for it was not a common
him to another. The Motor Vehicle Law carrier.
requires registration so as to identify the Issue: Is the Company liable?
owner in case of an accident or injury on HELD: Yes, the Company is liable on
the highways. Responsibility is thus fixed on account of estoppel. Moreover, the
a definite individual, the registered owner. contract of insurance is one of perfect good
If this were not the rule, faith (uberrima fi des) not for the insured
alone, but equally so for the insurer; in fact, ARTICLE 1432
it is more so for the latter, since its
Suppletory Effect of the General Principles
dominant bargaining position carries with it
of Estoppel
stricter responsibility.
The principles of estoppel are only
suppletory.
Manila Electric Co. v. Court of Appeals
L-33794, May 31, 1982
Pleading of Alleged Estoppel
If a party fails to object to the construction
If facts are alleged as constituting estoppel,
of an electric sub-station within his
they must be expressly pleaded.
property, and only asked for assurance that
the station would not be a nuisance or
dangerous, he can be said to be in ARTICLE 1433
“contractual estoppel.” Kinds of Estoppel
(a) estoppel IN PAIS (equitable estoppel);
Luzon Stevedoring Co., Inc. v. Luzon this may be estoppel:
Marine Dept. Union, et al. 1) by conduct or by acceptance of benefi ts,
101 Phil. 257 2) by representation or concealment,
Estoppel by laches (unreasonable delay 3) by silence,
in making a claim in court) does not apply 4) by omission,
to employees in claiming overtime pay, for 5) by laches (unreasonable delay in suing).
to allow estoppel in this case would be to
bring about a situation whereby the (b) estoppel BY DEED (technical estoppel);
employee or laborer, who cannot expressly this may be:
renounce the right to extra compensation 1) estoppel by deed proper (written
under the law, may be compelled to instrument may also be in the form of a
accomplish the same thing by mere silence bond or a mortgage).
or lapse of time, thereby frustrating by 2) estoppel by judgment as a court record
indirection the purpose of the law. (this happens when there could have been
However, laches may favor the RES JUDICATA). (See Rule 131, Sec. 3[3] and
inference that no such overtime work had Rule 39, Sec. 47, Revised Rules of Court)
been made; or that, even if it existed, it has [NOTE: While res judicata makes a
already been duly compensated. No judgment conclusive between the parties as
estoppel can be invoked if the complaining to things which were directly adjudged,
party has not been misled. estoppel by judgment prevents the parties
If a public officer makes an erroneous from raising questions that could have been
application and enforcement of the law, he put in issue and decided in the previous
is not considered in estoppel. However, case.
other affi rmative acts of officials may raise
estoppel against the government. Makati Leasing and Finance Corporation v.
NOTE: However, omission or neglect of Weaver Textile Mills, Inc. & Court of
governmen officials does not create Appeals
estoppel against the government. GR 58469, May 16, 1983
A machine movable by nature, which
 A petitioner cannot be estopped in becomes immobilized by destination or
questioning the validity of a customer’s purpose, may be treated as movable
agreement and from denying the property. One who agrees to executing a
effects of his conduct. chattel mortgage is estopped from denying
the chattel mortgage on the ground that sale of certain goods imported by the
the subject matter is immovable property. former, it (NAMARCO) cannot question
the validity of the transaction particularly
Estoppel IN PAIS (Equitable Estoppel) after it has received and accepted certain
(a) Definition: It arises when one, by his benefi ts from the Federation as a result of
acts, representations or admissions, or by the contract.
his silence when he ought to speak out,
intentionally or thru culpable negligence, Some Doctrines
induces another to believe certain facts to 1) Conduct because of ignorance or mistake
exist, and such other rightfully relies and does not result in estoppel. Indeed if
acts on such belief, so that he will be someone was ignorant of the truth or was
prejudiced if the former is permitted to mistaken, he cannot be said to be in
deny the existence of such facts. estoppel.
2) Estoppel by laches (unreasonable delay
Carolina Liquete Ganzon v. CA in bringing a court action, even if the period
GR 136831, Jul. 30, 2002
Estopped in pais, or equitable estoppel arises when of prescription has not yet lapsed) bars an
one, by his acts, representations or admissions or by his action to create a vested right (executory
silence when he ought to speak out, intentionally or thru interest) but does not bar an action to
culpable negligence, induces another to believe certain
facts to exist and such other rightfully relies and acts on protect a vested right (executed interest).
such belief so that he will be prejudiced if the former is NOTE: In Liguez v. Lopez, 102 Phil. 577, the
permitted to deny the existence of such facts. The real offi Supreme Court held that the rule of
ce of the equitable norm of estoppel is limited to
supplying deficiency in the law, but it should not supplant
estoppel by laches cannot apply to prevent
positive law. enforcement of the principle that a party to
In the case at bar, the requisites for the existence of an illegal contract cannot recover what he
a tenancy relationship are explicit in the law and these
elements cannot be done away with by conjectures.
has given pursuant thereto, for the latter is
[NOTE: It takes place in a situation where because of a a rule of superior public policy.
party’s action or omission, he is denied the right to plead NOTE: In Viloria v. Sec. of Agriculture and
or prove a fact otherwise important.
[NOTE: Its purpose is to serve the objectives of justice. It is
Natural Resources, et al., L-11754, April 29,
founded on morality and fair dealing. 1960, the Court held that the equitable
[NOTE: Estoppel should not be confused with fraud. defense of LACHES requires four elements:
Firstly, estoppel exists with or without a contract; fraud
presupposes an attempt to enter into a valid agreement or
a) conduct on the part of the defendant, or
contract. of one under whom he claims, giving rise to
Secondly, while estoppel may be raised as a defense, fraud the situation of which the complaint is
may properly be a cause of action, on account of the
vitiated consent that it produces.]
made and for which the complaint seeks a
remedy;
Examples of estoppel in pais: b) delay in asserting the complainant’s
1) If a vendee a retro agrees to accept a rights, the complainant having had
check in payment of the repurchase price, knowledge or notice of the defendant’s
he cannot afterwards allege that the check conduct and having been afforded an
is not legal tender. He is bound by his own opportunity to institute a suit;
act. c) lack of knowledge or notice on the part
2) If the real owner of a house pretends to of the defendant that the complainant
be merely a broker in the sale thereof, he is would assert the right on which he bases
estopped from asserting ownership over his suit;
the same. d) injury or prejudice to the defendant in
3) If the NAMARCO has entered into a valid the event relief is accorded to the
contract with a certain Federation for the complainant, or the suit is not held to be
barred 1) If the deed or instrument is null and void
because the contract, let us say, is illegal,
 Just because a person is silent does not there is NO estoppel.
necessarily mean that he will be in 2) Ordinarily, the person estopped must be
estoppel. There should have been a capacitated. But if a minor is clever enough
duty or obligation to speak. to deceive others, estoppel may result.
Thus, minors who sell real estate
 A mere promise to perform or to omit pretending, by the execution of a public
at some future time does not instrument, to have reached their majority,
necessarily result in estoppel cannot be permitted afterwards to excuse
(promissory estoppel). For this to exist, themselves from compliance with the
the promise must have been relied obligation assumed by them or to seek their
upon, and prejudice would result annulment. And the circumstance that
unless estoppel is applied. after the conveyance, they inform the
vendee of their minority is of no moment,
Estoppel BY DEED because their misrepresentation had
(a) Definition: It is a bar which precludes a already estopped them from disavowing
party to a deed and his privies from the contract.
asserting as against the other and his 3) If a person notarizes (and is not a party
privies any right or title in derogation of the to) the instrument, he is NOT in estoppel.
deed, or from denying the truth of any
material fact asserted in it. ARTICLE 1434
(NOTE: There must be a written
Sale or Alienation by Non-Owner
instrument.)
(a) Example:
Jose sold in his own name Brigitte’s car to
Examples of estoppel by deed:
Gina. He also delivered the car to Gina. If
1) If several persons, each claiming
later on Brigitte donates the car to Jose,
ownership over certain property deposited
ownership over the same passes to Gina,
in a warehouse, in a written document
not by tradition or delivery, but by
agree it should be sold, said persons cannot
operation of law.
later on modify the terms of the
(b) In this kind of estoppel, prejudice is not
agreement.
essential.
2) If a shipper has his goods valued at only
(c) Art. 1434 applies to the sale of “after-
P200, he cannot later on recover damages
acquired property.” This is allowed by the
for its value more than what he has
law on Sales under the Civil Code.
declared in the bill of lading, even if the
value of the goods be worth much more,
Inquimboy v. Paez Vda. de Cruz
for he is in estoppel.
L-13953, Jul. 26, 1960
3) Purchase in one’s own name with
FACTS: Inquimboy sold a parcel of land to
another’s money generally gives title to the
Albea in 1941, who in turn, without having
purchaser, that is, to him who appears in
fully paid the price, sold the same land to
the deed to have made the purchase in his
Cruz in 1943. The land was registered land,
own name.
and when Albea sold it to Cruz, the land
was still registered in Inquimboy’s name. It
was only in Feb. 1944 that the sale in favor
of Albe was recorded. In May 1944, Albea’s
Some Doctrines
title was cancelled and the transfer
certificate of title was issued to Cruz. Did If the alleged tenant does not admit
Cruz really acquire title over the property? expressly or implicitly the existence of the
HELD: Yes, because although Albea was not lease contract (such as when the landlord
yet the registered owner at the time he did not attach or plead in his complaint the
sold it to Cruz, the fact remains that he contract of lease), the presumption does
(Albea) subsequently acquired valid title in not apply.
his own name. This title was later
transferred to Cruz. ARTICLE 1437
Estoppel Concerning Immovable Property
ARTICLE 1435 To apply this Article, one should have been
Sale or Alienation in Representation of misled, otherwise there is no estoppel.
Another Knowledge of the true facts by the stranger
This is estoppel created in a representative prevents deception, so estoppel cannot
capacity. In this kind of estoppel, prejudice apply. On the part of the party who is to be
is also not essential. in estoppel, should have made a fraudulent
representation or wrongful concealment of
Example facts known to him.
Amalia, in representation of Romeo, sells to
Juanito a car. Amalia cannot afterwards Fabie, et al. v. City of Manila
allege that she was really the owner of the 10 Phil. 64
car, and that, therefore, the sale is not FACTS: Prior to his application for title,
valid. Fabie made a plan where he mentioned a
certain “estero” as the boundary of his
ARTICLE 1436 property, implying that it was not included
in the estate. Later, he submitted a formal
Estoppel on the Part of a Lessee or a Bailee
application, this time including the “estero”
(a) Under the Revised Rules of Court, one of
inside the estate. It was proved that the
the instances of conclusive presumptions is
City of Manila, to whom the application was
in the case of the tenant, who is not
submitted, never saw the plan hereinabove
permitted to deny the title of his landlord at
referred to.
the time of the commencement of the
Issue: Is Fabie in estoppel?
relation of landlord and tenant between
HELD: No, for the City could not have been
them.
misled, since its officials never saw the plan.
(b) Ordinarily, therefore, it is enough for
the landlord to prove the existence of the
Effect of Consent on the Part of the True
lease contract, for the presumption to
Owner
apply.
Acquiescence by the true owner estops him
(c) Note that the law refers to a lessee or
from asserting any right over the property.
bailee (such as a depository).
(d) The presumption has also been applied
Cementina, et al. v. Court of Appeals, et al.
to a donee who had accepted the donation
91 Phil. 922
in due form, as well as to a servant or
FACTS: Ireneo and Isabel Cervantes owned
agent. (Barlin v. Ramirez, et al., 7 Phil. 41).
conjugal land, which was sold after Isabel’s
death to Pablo Concepcion by Ireneo, with
his children’s consent. Later the children
claimed part of the property stating that
When Presumption Does Not Apply
the sale, insofar as it referred to the portion
inherited by them from their mother, Estoppel on the Part of a Minor
Isabel, should be considered void because A minor possessed of discretion and
Ireneo could not validly sell the same. cleverness may be bound by his own
HELD: The children are estopped from contract, even if entered into without
asserting their rights in view of their parental authority. (Sia Suan v. Alcantara,
acquiescence to the sale. 47 O.G. 4561).

ARTICLE 1438 Is the Government Bound by Estoppel?

Generally, the Government is not bound by
Allowing Someone to Assume Apparent
estoppel, particularly so if there has been
Ownership of Personal Property
an erroneous application and enforcement
This is estoppel that results from
of the law.
acceptance of benefits (with knowledge of
the true facts).
Examples:
(a) In People v. Go, et al., L-11368-69, Oct.
Example:
30, 1959, the Supreme Court held that the
A has a diamond ring. He allowed B to
fact that the clerk of the Supreme Court
assume apparent ownership over the ring
served notice upon the appellant that its
so that B might sell the same. Instead, B
brief must be printed and filed with the
pledged the ring with C to obtain a loan.
Court within 45 days from receipt of notice
The money lent was later handed over to A.
does not and cannot confer appellate
Later A attacks the validity of the pledge
jurisdiction upon said Court, where the
claiming that under the law, the pledgee
appeal was taken BEYOND the period
must be the owner thereof, and since B in
prescribed by the Rules of Court.
this case acted without authority, the
(b) Any error made by a tax official in the
pledge is invalid. Is A allowed to do this?
assessment or computation of taxes does
ANS.: No, A is not allowed to do this. His
NOT have the effect of relieving the
receipt of the sum for which the pledge was
taxpayer from the full amount of liability as
made is an implied ratification of the pledge
fixed by law. Errors of tax officers do not
and A is, therefore, in estoppel.
bind the government or prejudice its right
to the taxes or dues collectible by it from
When Estoppel Applies Even if There Be No
the citizen. Estoppel cannot operate
Benefits
against a court and it can therefore dismiss
Even if there be NO benefits, estoppel
a case anytime it discovers it has no
would also apply if the “agent” was given
jurisdiction.
apparent authority, and the other party
[NOTE: In Nilo, et al. v. Romero, L-15195,
was misled into giving him credit.
Mar. 29, 1961, it was however held that
where the defendant City was wrongly
ARTICLE 1439 represented and its city attorney failed to
Persons Bound by Estoppel file a motion to dismiss based on such
Both parties are, however, bound (Andres ground, estoppel operates against said
v. Pimentel, 21 Phil. 431) such as parties to defendant City. The erroneous designation
a sale. (Borlaza v. Borgonio, GR 3433, July of the representative when the defendant
16, 1951). Successors-in-interest (as well as City itself is named, is NOT sufficient to set
privies and grantees) are bound. (19 Am. aside the proceeding had in the case.
Jur. 809). But third parties are not.
Antonio Favis, et al. v. Municipality of
 Sabongan invoked to validate a void contract. As
L-26522, Feb. 27, 1969 between parties to a contract, validity
ISSUE: Does estoppel apply against a cannot be given to it by estoppel if it is
Municipal Corporation? prohibited by law or is against public policy.
HELD: No. The doctrine of estoppel cannot No citizen is competent to barter away
be applied as against a Municipal what public policy by law seeks to preserve.
Corporation to validate a contract which it
has no authority to make — otherwise, it Promissory Estoppel
would be enabled to do indirectly what it
cannot do directly. Medoza v. CA
HELD: The RTC’s ruling is based on the
Applicability to Questions of Fact doctrine of promissory estoppel enunciated
The rule on estoppel applies only to in Ramos v. Central Bank (41 SCRA 565).
questions of fact, not of law, about the This doctrine may arise from the making of
truth of which the other party is ignorant. a promise, even though without
consideration, if it was intended that the
Abines v. BPI promise should be relied upon, and if a
482 SCRA 421 (2006) refusal to enforce it would be virtually to
Note here that the public policy sanction the perpetration of fraud or would
considerations behind forum shopping are result in other injustice. Reliance by
superior to that of a party‘s claim of promissee is generally evidenced by action
estoppel. or forbearance on his part, and the idea has
been expressed that such action or
Estoppel by Record forbearance would reasonably have been
The doctrine of estoppel by record only expected by the promissor.
applies as between the same parties or With the doctrine serving as an
their privies and cannot be used against exception to the general rule that a promise
strangers. If in two cases the plaintiffs be of future conduct does not constitute
different but the defendants are the same, estoppel, certain elements, however, have
the new plaintiffs are neither bound by the to be established so as to be entitled to its
first proceedings, nor may they take benefit:
advantage of the same. (a) a promise reasonably expected to
induce action or forbearance;
[NOTE: If party-litigant submit a case for (b) such promise did, in fact, induce action
decision without objection they cannot or forbearance; and
claim, for the fi rst time on appeal, that (c) the party suffered a detriment as a
they were deprived of the opportunity to result. Clearly, then, the doctrine
submit additional evidence. They are guilty presupposes the existence of a promise on
of estoppel. the part of one against whom estoppel is
claimed. The promise must be plain and
unambiguous and suffciently specific so
that the judiciary can understand the
obligations assumed and enforce the
Estoppel Cannot Validate a Void Contract promise according to its terms.
Prudential Bank v. Panis In the case at bar, the petitioner failed
GR 50008, Aug. 31, 1987 to prove that the bank had promised to
The doctrine of estoppel may not be approve the plan in exchange for the
submission of the proposal. Because no
such promise was proven, the doctrine
does not apply.

Concept of an “Agency by Estoppel”

Litonjua, Jr. v. Eternit Corp.
490 SCRA 204 (2006)
For an “agency by estoppel” to exist, the
following must be established:
1. the principal manifested a representation
of the agent’s authority or knowingly
allowed the agent to assume such
authority; or
2. the third person, in good faith, relied
upon such representation; or
3. relying upon said representation, a third
person has changed his position to his
detriment. An agency by estoppel, which is
similar to the “doctrine of apparent
authority,” requires proof of reliance upon
the representations, and that, in turn,
needs proof that the representations
predated the action taken in reliance.