Jurisprudence on illegality of the consideration:

Ignacio Arroyo vs. Alfred Berwin G.R. No. l-10551, 03 March

1917
Facts:
On August 14, 1914, which was the day set for the hearing of the
appeal of the said cause against Marcela Juaneza for theft, Case
No. 3120, the defendant requested the plaintiff to agree to
dismiss the said criminal proceeding, and, on August 14, 1914,
stipulated with the plaintiff in the presence of Roque Samson,
among other things, that his client Marcela Juaneza would
recognize the plaintiff's ownership in the land situated on Calle
San Juan, suburb of Molo, municipality of Iloilo, Province of
Iloilo, where his said client ordered the cane cut, which land and
which cut cane are referred to in the cause for theft abovementioned; and the defendant furthermore agreed that the
plaintiff should obtain a Torrens title to the said land during the
next term of the court for the trial of cadastral cases, and that
the defendant's client, Marcela Juaneza, would not oppose the
application for registration to be filed by the said applicant;
provided that the plaintiff would ask the prosecuting attorney to
dismiss the said proceedings filed against Marcela Juaneza and
Alejandro Castro for the crime of theft.
Plaintiff on his part complied with the agreement, and requested
the prosecuting attorney to dismiss the above-mentioned
criminal cause; that the latter petitioned the court and the court
did dismiss the said cause; that in exchange the defendant does
not wish to comply with the above-mentioned agreement; that the
plaintiff delivered to the defendant for the signature of the said
Marcela Juaneza a written agreement stating that the defendant's
said client recognized the plaintiff's ownership in the described
land and that she would not oppose the plaintiff's application for
registration; and that up to the present time, the defendant has

not returned to the plaintiff the said written agreement,

notwithstanding the plaintiff's many demands.
Issue:
Whether or not the plaintiff could pray to the court to render
judgment ordering the defendant to comply with the agreement.
Ruling:
The trial judge dismissed this complaint on the ground of the
illegality of the consideration of the alleged contract, and without
stopping to consider any other objection to the complaint than
that indicated by the court below, we are of opinion that the order
appealed from must be affirmed.
An agreement by the owner of stolen goods to stifle the
prosecution of the person charged with the theft, for a pecuniary
or other valuable consideration, is manifestly contrary to public
policy and the due administration of justice. In the interest of the
public it is of the utmost importance that criminals should be
prosecuted, and that all criminal proceedings should be
instituted and maintained in the form and manner prescribed by
law; and to permit an offender to escape the penalties prescribed
by law by the purchase of immunity from private individuals
would result in a manifest perversion of justice.
Article 1255 of the Civil Code provides that:
The contracting parties may make the agreement and
establish the clauses and conditions which they may dream
advisable, provided they are not in contravention of law,
morals, or public order.

Article 1275 provides that:

Contracts without consideration or with an illicit one have
no effect whatsoever. A consideration is illicit when it is
contrary to law and good morals.
The order entered in the court below should, therefore, be
affirmed, with the costs of the instance against the appellant. So
ordered.
Miguel Mulet vs. People of the Philippines G.R. No. L-47069
19 July 1941.
On July 25, 1929, Alejandra Rubillos and Espectacion Rubillos
secured from petitioner Miguel Mulet a loan of P550, payable
within 5 years at 30 per cent interest per annum. In the deed of
mortgage executed by the Rubillos as a security, the sum of
P1,375 was made to appear as the capital of the loan. This
amount obviously represented the actual loan of P550 and the
total interest of P825 computed at 30 per cent per annum for 5
years. Within four years following the execution of the mortgage,
the debtors made partial payments agregating P278.27, on
account interest. Thereafter, the debtors paid the whole capital of
P550, due to petitioner's promise to condone the unpaid interest
upon payment of such capital. But to their surprise, petitioner
informed them that they were still indebted in the sum of
P546.73 which represented the balance of the usurious interest.
And in consideration of this amount, petitioner pressed upon the
debtors to execute in October, 1933, in his favor, a deed of sale
with pacto de retro of a parcel of land, in substitution of the
original mortgage which was cancelled. From the date of the
execution of the new deed up to 1936, petitioner received, as his
share of the conducts of the land, the total sum of P480.
Prosecuted on November 18, 1936, for the violation of the Usury

Law, petitioner was convicted by the trial court, and on appeal,

the judgment was affirmed by the Court of Appeals. The instant
petition for certiorari is directed at that portion of the decision of
the appellate court ordering petitioner to return to the offended
parties the sum of P373.27, representing interests received by
him in excess of that allowed by law.

Petitioner claims that as the amount in question has been paid

more than two years prior to the filing of the complaint for usury,
its return can no longer be ordered, as the prescriptive period
provided therefore by section 6 of the Usury Law has expired. The
amount of P373.27 appears to have been arrived at by adding the
usurious interest of P278.27, which was paid in cash, and that of
P480, which was paid in kind, and deducting from the agregate
that 14 per cent interest allowed by law amounting to P385.
Regardless of this conclusion, we are of the opinion that
petitioner should be ordered to return, not the amount of
P373,27, but of P480. This last amount is not usurious interest
on the capital of the loan but the value of the produce of the land
sold to petitioner under pacto de retro, with the unpaid balance of
the usurious interest (P546.73) as the consideration of the
transaction. This consideration because contrary of law, is illicit,
and the contract which results therefrom, null and void. (Art.
1275, Civil Code.) And, under the provisions of article 1305, in
connection with article 1303, of the Civil Code, when the nullity
of a contract arises from the illegality of the consideration which
in itself constitutes a felony, the guilty party shall be subject to
criminal proceeding while the innocent party may recover
whatever he has given, including the fruits thereof.

Teodor Velez, et. Al. vs. Salomon Ramas, et.al. G.R. No. L14997 16 February 1920

Facts:
It appears in evidence that the defendant Roberto Quirante is the
father of Restituta Quirante, who in turn is the wife of the
defendant Salomon Ramas. Prior to July 30, 1917, the plaintiffs,
Teodoro Velez and wife, were the owners of a pawnshop and had
employed Restituta Quirante in some capacity or other therein.
While thus employed, Restituta Quirante abstracted various
sums of money belonging to the plaintiffs, amounting altogether
to P2,303.60, under conditions which supposedly constituted the
offense of estafa. When this fact was discovered by the plaintiffs
they threatened to prosecute her, and in order to prevent his
eventuality the contract in question was executed by the
defendants.
Issue:
Whether or not the contract between the may be enforced

Ruling:
We are of the opinion that the trial court was correct in the
conclusion that an action cannot be maintained upon this
contract. The preliminary recitals clearly disclose the fact that
the purpose of the contracting parties was to prevent a
prosecution for crime; and the injured parties, on their part,
agree to suspend the criminal proceedings which they had
intended to promote. As regards the defendant Roberto Quirante
there was absolutely no other motive for making the contract
than a desire to prevent the prosecution of his daughter; and the
only consideration in the legal sense for his promise to pay was
the engagement of the plaintiffs whereby they bound themselves
to suspend criminal proceedings. As regards the defendant
Salomon Ramas, it might be supposed that the act of his wife,
Restituta Quirante, in embezzling the money of her employers

created a civil debt which was binding on him as a member of the

community partnership and that he at any rate would be liable
for that money without reference to the contract. But that liability
cannot be enforced in an action to which the wife is not a party. It
results that, even as against Ramas, this case must be decided
on the question of the legality, or illegality, of the contract sued
on.

In our opinion the consideration for this agreement is clearly

illicit, which fact is apparent on the face of the contract; and the
case is accordingly governed by article 1275 of the Civil Code.

There has been no period since contract law reach the stage of
consciousness, when the maxim ex turpi causa non oritur
actio was not recognized. A contract based upon an unlawful
consideration or designed to promote an unlawful object is an
always has been void ad initio by the common law, by the civil
law, moral law, and all laws whatsoever (Collins vs. Bantern, 2
Wils. C. Pl., 341.) It is immaterial whether the illegal character of
the contract is revealed in the matter of the consideration, in the
promise as expressed in the agreement, or in the purpose which
the agreement, though legal in expression, is intended to
accomplish. if the illegality lurks in any element, or even subsists
exclusively in the purpose of the parties, it is fatal to the validity
of the contract. (Manresa, Codigo Civil, 2d ed., vol. 8, p. 685.)

By the universal consensus of judicial opinion in all ages it has

been considered contrary to public policy to allow parties to make
agreements designed to prevent or stifle prosecutions for crime, It
is self-evident that the law cannot sanction an engagement which
is subversive of the law itself or which tends to weaken the

foundations of human society. The machinery for the

administration of justice cannot be used to promote an unlawful
purpose.

The case of Arroyo vs. Berwin (36 Phil. Rep., 386), would seem to
be conclusive, as it is based upon the doctrine above announced,
and we see no just basis for discriminating between the facts
there involved and those here presented.

Jurisprudence on Consent of Contract

First Philippines Holdings Corporation vs. Trans Middle

East (Phils.) Equities Inc. G.R. No. 179505 04 December
2009

A contract is void if one of the essential requisites of

contracts under Article 1318 of the New Civil Code is
lacking. Article 1318 provides:

Art. 1318. There is no contract unless the following requisites concur:

(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established.

All these elements must be present to constitute a valid

contract. Consent is essential to the existence of a contract;
and where it is wanting, the contract is non-existent. In
a contract of sale, its perfection is consummated at the
moment there is a meeting of the minds upon the thing that
is the object of the contract and upon the price. Consent is
manifested by the meeting of the offer and the acceptance of
the thing and the cause, which are to constitute the
contract. To enter into a valid contract of sale, the parties
must have the capacity to do so. Every person is presumed
to be capacitated to enter into a contract until satisfactory
proof to the contrary is presented. The burden of proof is on
the individual asserting a lack of capacity to contract, and
this burden has been characterized as requiring for its
satisfaction clear and convincing evidence.

Sps. Tongson vs. Emergency Pawnshop Bula Inc. and Danilo

R. Napala G.R. No. 167874 15 January 2010

A contract is a meeting of the minds between two persons,

whereby one is bound to give something or to render some
service to the other.
A valid contract requires the concurrence of the following
essential elements: (1) consent of meeting of the minds, that
is, consent to transfer ownership in exchange for the price;
(2) determinate subject matter; and, (3) price certain in
money or its equivalent.

Sargasso Construction & Development Corporation / Pick &

Shovel, Inc. / Atlantic Erectors, Inc. (Joint Venture) vs.
Philippine Ports Authority, G.R. No. 170530 05 July 2010

Every contract has the following essential elements: (i)

consent, (ii) object certain, and (iii) cause. Consent has been
defined as the concurrence of the wills of the contracting
parties with respect to the object and cause which shall
constitute the contract. In general, contracts undergo three
distinct stages, to wit: negotiation, perfection or birth, and
consummation. Negotiation begins from the time the
prospective contracting parties manifest their interest in the
contract
and
ends
at
the
moment
of
their
agreement. Perfection or birth of the contract takes place
when the parties agree upon the essential elements of the
contract, i.e.,
consent,
object
and
price. Consummation occurs when the parties fulfill or
perform the terms agreed upon in the contract, culminating
in the extinguishment thereof. The birth or the perfection of
the contract, which is the crux of the present controversy,
refers to that moment in the life of a contract when there is
finally a concurrence of the wills of the contracting parties
with respect to the object and the cause of the contract.

Jurisprudence on object of the contract

Jurisprudence on consideration of the contract