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16 Menchavez vs. Teves5.25

1) The Supreme Court ruled that a contract leasing a fishpond owned by the state between Menchavez and Teves was void. 2) Teves sued Menchavez for damages, arguing he was an innocent party. However, the Court found Teves knew or should have known the fishpond's ownership was doubtful since Menchavez's lease application was still pending. 3) Since both parties were at fault, neither could recover damages from the other according to the legal principle of being "in pari delicto," or equally at fault.

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88 views1 page

16 Menchavez vs. Teves5.25

1) The Supreme Court ruled that a contract leasing a fishpond owned by the state between Menchavez and Teves was void. 2) Teves sued Menchavez for damages, arguing he was an innocent party. However, the Court found Teves knew or should have known the fishpond's ownership was doubtful since Menchavez's lease application was still pending. 3) Since both parties were at fault, neither could recover damages from the other according to the legal principle of being "in pari delicto," or equally at fault.

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cassandra lee
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Menchavez v.

Teves ISSUE:
449 SCRA 380 (2005) 1.) W/N the Contract of Lease was void.
2.) W/N Teves can recover damages from Menchavez, contending that he
Art. 1412 - When the act is unlawful but does not constitute a criminal offense / is an innocent party to the Contract of Lease under Art. 1412, par. 2?
In pari delicto rule
HELD:

FACTS:
1.) Yes.

On 28 February 1986, a 5-year "Contract of Lease" was executed by Void are all contracts in which the cause, object or purpose is contrary to
petitioner Jose S. Menchavez et.al, as lessor and Florentino Teves Jr. as lessee law, public order or public policy. The RTC correctly held that it was the State,
over a Fishpond located at Cebu. not petitioners, that owned the fishpond. Being merely applicants for the lease of
the fishponds, petitioners had no transferable right over them. And even if the
In 1988, Cebu RTC Sheriffs demolished the fishpond dikes constructed by State were to grant their application, the law expressly disallowed sublease of the
Teves and delivered possession of the subject property to other parties. As a fishponds to respondent.
result, Teves filed a Complaint for damages against Menchavez. He alleged that
Menchavez had violated their Contract of Lease, specifically the peaceful and 2.) No.
adequate enjoyment of the property for the entire duration of the Contract.
Art. 1412, par. 2 of the NCC provides that: “xxx .. The other, who is not at fault,
may demand the return of what he has given without any obligation to comply with his
Further, Menchavez had withheld from Teves the findings of the trial court promise."
in a separate Civil case. In that case involving the same property, subject of the
lease, Menchavez was ordered to remove the dikes illegally constructed and to His own evidence rebuts his contention that he did not know that
pay damages. Menchavez lacked ownership. At the very least, he had notice of their doubtful
ownership of the fishpond.
The RTC held that the lease contract is invalid and void ab-initio, for being
Respondent himself admitted that he was aware that the petitioners’ lease
a patent nullity under the Regalian Doctrine considering that the property in
application for the fishpond had not yet been approved. Thus, he knowingly
litigation belongs to the State and not to Menchavez. It also held that the parties
entered into the Contract with the risk that the application might be disapproved.
are in pari-delicto.
More so, his counsel’s presence during the negotiations, prior to the
The CA disagreed with the RTC’s finding that petitioners and respondent parties’ meeting of minds, further debunks his claim of lack of knowledge.
were in pari delicto. It contended that while there was negligence on the part of Lawyers are expected to know that fishponds belong to the State and are
respondent for failing to verify the ownership of the subject property, there was inalienable. It was reasonably expected of the counsel herein to advise his client
no evidence that he had knowledge of petitioners’ lack of ownership. regarding the matter of ownership.

Hence, this Petition. As both parties are equally at fault, neither may recover against the other.
(As provided in Art. 1412, par. 1)

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