Tankeh vs DBP (2013)

[709 scra 19; G.R. No. 171428; November 11, 2013] Civil Law|Contracts|Vitiated Consent| Fraud

ALEJANDRO V. TANKEH
vs.
DEVELOPMENT BANK OF THE PHILIPPINES, STERLING SHIPPING LINES, INC., RUPERTO V.
TANKEH, VICENTE ARENAS, and ASSET PRIVATIZATION TRUST

FACTS:

Respondent Ruperto V. Tankeh is the President of Sterling Shipping Lines who applied a loan from
Development Bank of the Philippines for the partial financing of M/V Golden Lilac (now as M/V Sterling
Ace).

Petitioner Dr. Alejandro V. Tankeh alleged that his younger brother, Ruperto approached and informed him
that the latter was operating a new shipping line business and offered him (Dr.) 1,000 shares to be the director
of the business worth 1M Pesos.

In 1981, petitioner signed the Assignment of Shares of Stock with Voting Rights and the promissory note. The
loan was then approved by DBP. Sometime in 1987, DBP sold the M/V Sterling Ace in Singapore. Petitioner
filed several Complaints and that the promissory note he signed in 1981 be declared null and void on the
ground that he was fraudulently deceive into signing the contract.

ISSUE:

Whether the fraud contemplated serious enough to render a contract voidable.

HELD:

Ruperto V. Tankeh was liable for the commission of incidental fraud for refusing to allow petitioner to
participate in the management of the business. Although there was no fraud that had been undertaken to obtain
petitioner’s consent, there was fraud in the performance of the contract. The records showed that petitioner had
been unjustly excluded from participating in the management of the affairs of the corporation. This exclusion
from the management in the affairs of Sterling Shipping Lines, Inc. constituted fraud incidental to the
performance of the obligation.There are two types of fraud contemplated in the performance of contracts: dolo
incidente or incidental fraud and dolo causante or fraud serious enough to render a contract voidable.

Dolo Causante or causal fraud (Art.1338)

 are those deceptions or misrepresentations of a serious character employed by one party and without which
the other party would not have entered into the contract.
 Dolo causante determines or is the essential cause of the consent.
 The effects of dolo causante are the nullity of the contract and the indemnification of damages.

Dolo incidente, or incidental fraud (Art. 1344)

 are those which are not serious in character and without which the other party would still have entered into the
contract.
 refers only to some particular or accident of the obligation. and
 dolo incidente obliges the person employing it to pay damages.