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Case Digest on Obligations and Contracts: Void Contracts - Jose Menchavez, et al vs. Florentino Teves, Jr., G.R. No. 153201

Jose Menchavez, et al vs. Florentino Teves, Jr., 
G.R. No. 153201, January 26, 2005
Facts: 
Sometime in 1986, a “Contract of Lease” was executed by Menchavez as lessor and Teves Jr. as lessee for a term of five years. 
In 1988, RTC Sheriffs demolished the fishpond dikes constructed by the respondent and delivered possession of the subject property to other parties. As a result, he filed a Complaint for damages against the petitioner, alleging violation of their Contract of Lease, specifically the peaceful and adequate enjoyment of the property for the entire duration of the Contract. 
The lessors had withheld from respondents the findings of the trial court in a separate case. In that case involving the same property, subject of the lease, Menchavez was ordered to remove the dikes illegally constructed and to pay damages.
After the trial, the RTC ruled that the contract is a patent nullity. Respondent elevated the case to the CA. The CA disagreed with the RTC’s finding that petitioners and respondent were in pari delicto. It contended that while there was negligence on the part of the respondent for failing to verify the ownership of the subject property, there was no evidence that he had knowledge of petitioner’s lack of ownership. Hence, this petition. 
Ruling:
A void contract is deemed legally nonexistent.
A void contract is equivalent to nothing; it produces no civil effect. It does not create, modify or extinguish a juridical relation. Parties to a void agreement cannot expect the aid of the law; the courts leave them as they are, because they are deemed in pari delicto or "in equal fault. 

Petition granted. Decision of the trial court granted. 
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