5 . a.
Machinations in public auctions (Article 185, RPC)
Vicente Diaz vs. Ruperto Kapunan, 8 December 1923 (45 Phil 482)
ACTS:
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In 1917, Vicente Diaz andSecundinodeMendezonaformedapartnershipwithacapitalofP380,000,butthe
business failed, resulting in a loss of P67,000. During settlement, Mendezona acknowledged owing Diaz
P80,000,plusanadditionalP10,000securedbythehacienda"Mapuyo."WhenMendezonafailedtopaywithin
theyear,foreclosureproceedingsbegan,leadingtoapublicauctiononDecember23,1922.Diaz,accompanied
by his lawyer Emilio Benitez and Ruperto Kapunan, participated in the auction. Kapunan initially offered
P12,000,butafterbiddingwithDiaz,theyagreedonthefollowingarrangement:Kapunanwouldwithdrawhis
bid, and Diaz would pay him a premium of P1,000 in exchange for Kapunan refraining from further bidding.
fter the auction, Diaz paid Kapunan P500 of the P1,000premiumonDecember26,1922,andfollowedthe
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processtoacquireMendezona'sproperty.Despitethis,onJanuary4,1923,DiazfiledchargesagainstKapunan
forunprofessionalconduct.Kapunan,onJanuary10,1923,requestedtoretaintheP500aspartpaymentofhis
fees,butlaterwithdrewthemotiononFebruary4,1923,andagreedtoreturntheP500toDiaz.Thecourtclerk
handed the P500 to DiazonJuly10,1923.TheMendezonafamilywasledtobelievethattheP500wouldbe
sent to them, though they never received it.
apunan'sinvolvementinthesaleofMendezona'spropertywasdeemedaviolationoftheCivilCodeandPenal
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Code. The Attorney-General recommended corrective measures for Kapunan’s misconduct.
I SSUE:
Whether Kapunan is guilty of Machinations in public auctions
ULING:
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Yes.UnderArticle185oftheRPC, MachinationsinpublicauctionsiswhenaAnypersonwhoshallsolicitany
gift or promise as a consideration for refraining from taking part in any public auction, andanypersonwho
shallattempttocausebidderstostayawayfromanauctionbythreats,gifts,promises,oranyotherartifice,with
intent to cause the reduction of the price of the thing auctioned.
ere,theagreementbetweenDiazandKapunan,inwhichKapunanrefrainedfrombiddingontheMendezona
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property in exchange for Diaz’s promise to pay him P1,000, clearly falls under this article. The crime is
committed by merely soliciting such a gift or promise.
ublic policy opposes agreements among bidders at execution sales that aim to stifle competition. Such
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agreements, unless all parties involved areawareandconsent,arevoid.Executionsalesshouldallowforfree
competition to maximize the benefit for the debtor.
he conclusion is that Attorney Kapunan the said article, but mitigating circumstances suggest a less severe
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response.Diazisequallyguilty,andKapunanactedingoodfaithforhisclient,despitetheirregularityandhis
tardy restitution of the money received.
he decision is that Attorney Kapunan should be reprimanded, and Vicente Diaz must return the P500 he
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receivedfromtheclerktotheCourtofFirstInstanceofLeyte,tobeforwardedtoSecundinodeMendezonaor
Carmen de Mendezona if he is absent.
