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Estoppel

1. CONCEPT

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 1431, Civil Code)

a. Principle of estoppel

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 1432, Ibid.)

b. Who are covered

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

c. Kinds of estoppel

Estoppel may be in pais or by deed.(Article 1433, Ibid.)

There are three kinds of estoppels, to wit:

1) Estoppel in pais;

2) Estoppel by deed; and

3) Estoppel by laches.

(Go v. BSP, G.R. No. 202262, 08 July 2015)

2. ESTOPPEL IN PAIS

Under the first kind [estoppel in pais], a person is considered in estoppel if by his conduct, representations, admissions or silence when he ought to speak out, whether intentionally or through culpable negligence, “causes another to believe certain facts to exist and such other rightfully relies and acts on such belief, as a consequence of which he would be prejudiced if the former is permitted to deny the existence of such facts.” (Ibid.)

a. Examples

1) Seller or grantor

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 1434, Ibid.)

2) Authorized person or agent

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 1435, Ibid.)

3) Lessee or bailee

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

4) Contract between third persons

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 1437, Ibid.)

5) Pledge

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 1438, Ibid.)

3. ESTOPPEL BY DEED

Under estoppel by deed, a party to a deed and his privies are precluded from denying any material fact stated in the deed as against the other party and his privies. (Go v. BSP, supra.)

4. ESTOPPEL BY LACHES

Under estoppel by laches, an equitable estoppel, a person who has failed or neglected to assert a right for an unreasonable and unexplained length of time is presumed to have abandoned or otherwise declined to assert such right and cannot later on seek to enforce the same, to the prejudice of the other party, who has no notice or knowledge that the former would assert such rights and whose condition has so changed that the latter cannot, without injury or prejudice, be restored to his former state. (Ibid.)

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