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G.R. No. 144735 October 18, 2001 23.[4].

The defendant YU BUN GUAN is ordered to pay to the said


plaintiff, the following:
YU BUN GUAN, petitioner,
vs. 23.[4].1. P48,631.00 – As reimbursement of the capital gains
ELVIRA ONG, respondent. tax (Exh. FF);

PANGANIBAN, J.: 23.[4].2. Six (6) percent of P48,631.00 – per annum from
November 23, 1993, until the said P48,631.00 is paid – as
A simulated deed of sale has no legal effect, and the transfer certificate of title issued damages;
in consequence thereof should be cancelled. Pari delicto does not apply to simulated
sales. 23.[4].3. P100,000.00 – as moral damages;

Statement of the Case 23.[4].4. P50,000.00 as exemplary damages;

Before us is a Petition for Review under rule 45 of the Rules of Court, assailing the April 23.[4].5. P100,000.00 – as attorney's fees.
25, 2000 Decision1 and the August 31, 2000 Resolution2 of the Court of Appeals3 (CA)
in CA-GR CV No. 61364. The decretal portion of the Decision reads as follows: 23.[5]. The COUNTERCLAIM is DISMISSED.

"We cannot see any justification for the setting aside of the contested Decision. 23.[6]. Cost is taxed against the defendant.

"THE FOREGOING CONSIDERED, the appealed Decision is hereby "24. In Chambers, City of Makati, June 23, 1998.
AFFIRMED."4
The Facts
The assailed Resolution denied petitioner's "Supplemental Motion for Reconsideration
with Leave to Submit [Newly] Discovered Evidence."
The antecedents of the case are succinctly summarized by the Court of Appeals in this
wise:
The CA sustained the Decision of the Regional Trial Court (RTC) of Makati City (Branch
60), which had disposed as follows:5
'[Herein respondent] said that she and [petitioner] are husband and wife, having
been married according to Chinese rites on April 30, 1961. They lived together
"23. WHEREFORE, the Court hereby renders judgment as follows: until she and her children were abandoned by [petitioner] on August 26, 1992,
because of the latter's 'incurable promiscuity, volcanic temper and other vicious
23.1 The Deed of Sale dated July 24, 1992 (Exh. EE on Exh. 3) is vices'; out of the reunion were born three (3) children, now living with her
declared VOID. [respondent].

23.2 The plaintiff ELVIRA ONG is declared the OWNER of the property "She purchased on March 20, 1968, out of her personal funds, a parcel of land,
covered by Transfer Certificate of Title No. 217614, Registry of Deeds, then referred to as the Rizal property, from Aurora Seneris, and supported by
Makati (Exh. DD). Title No. 26795, then subsequently registered on April 17, 1968, in her
name.1âwphi1.nêt
23.3 The Register of Deeds, City of Makati is ordered to:
"Also during their marriage, they purchased, out of their conjugal funds, a
23.2.1. Cancel Transfer Certificate of Title No. 181033 (Exh. house and lot, in 1983, thereafter, registered in their names, under Title No.
HH); and 118884.

23.2.2. Issue in lieu thereof, a transfer certificate of title in the 'Before their separation in 1992, she 'reluctantly agreed' to the [petitioner's]
name of ELVIRA A. ONG, of legal age, single, Filipino'; 'importunings' that she execute a Deed of Sale of the J.P. Rizal property in his
favor, but on the promise that he would construct a commercial building for the
benefit of the children. He suggested that the J.P. Rizal property should be in
his name alone so that she would not be involved in any obligation. The of [respondent], although the consideration was his own and from his personal
consideration for the 'simulated sale' was that, after its execution in which he funds.
would represent himself as single, a Deed of Absolute Sale would be executed
in favor of the three (3) children and that he would pay the Allied Bank, Inc. the "When he finally acquired a Filipino citizenship in 1972, he purchased another
loan he obtained. property being referred to as the 'Juno lot' out of his own funds. If only to reflect
the true ownership of the JP Rizal property, a Deed of Sale was then executed
"Because of the 'glib assurances' of [petitioner], [respondent] executed a Deed in 1972. Believing in good faith that his owner's copy of the title was lost and
of Absolute Sale in 1992, but then he did not pay the consideration of not knowing that the same was surreptitiously 'concealed' by [respondent], he
P200,000.00, supposedly the 'ostensible' valuable consideration. On the filed in 1993 a petition for replacement of the owner's copy of the title, in court.
contrary, she paid for the capital gains tax and all the other assessments even
amounting to not less than P60,000.00, out of her personal funds. "[Petitioner] added that [respondent] could not have purchased the property
because she had no financial capacity to do so; on the other hand, he was
"Because of the sale, a new title (TCT No. 181033) was issued in his name, financially capable although he was financially capable although he was
but to 'insure' that he would comply with his commitment, she did not deliver disqualified to acquire the property by reason of his nationality. [Respondent]
the owner's copy of the title to him. was in pari delicto being privy to the simulated sale.

"Because of the refusal of [petitioner] to perform his promise, and also because "Before the court a quo, the issues were: who purchased the JP Rizal property?
he insisted on delivering to him the owner's copy of the title [to] the JP Rizal [W]as the Deed of Sale void? and damages.6
property, in addition to threats and physical violence, she decided executing an
Affidavit of Adverse Claim. Ruling of the Trial Court

Also to avoid burdening the JP Rizal property with an additional loan amount, After examining the evidence adduced by both parties, the RTC found that the JP Rizal
she wrote the Allied Bank, Inc. on August 25, 1992, withdrawing her authority property was the paraphernal property of the respondent, because (1) the title had been
for [petitioner] to apply for additional loans. issued in her name; (2) petitioner had categorically admitted that the property was in
her name; (3) petitioner was estopped from claiming otherwise, since he had signed the
"To save their marriage, she even sought the help of relatives in an earnest Deed of Absolute Sale that stated that she was the "absolute and registered owner"; (4)
effort [at] reconciliation, not to mention a letter to [petitioner] on November 3, she had paid the real property taxes thereon.7
1992.
The trial court further held that the in pari delicto rule found in Articles 1411 and 1412
"[Petitioner], on the other hand, filed with the RTC, Makati, in 1993 (Case No. of the Civil Code was not applicable to the present case, because it would apply only to
M-2905), a 'Petition for Replacement' of an owner's duplicate title. existing contracts with an illegal cause or object, not to simulated or fictitious contracts
or to those that were inexistent due to lack of an essential requisite such as cause or
"Attached to the Petition was the Affidavit of Loss dated March 26, 1993, in consideration.8 It likewise voided the Deed of Absolute Sale of the JP Rizal property for
which he falsely made it appear that the owner's copy of the title was lost or having been simulated and executed during the marriage of the parties.9
misplaced, and that was granted by the court in an Order dated September 17,
1993, following which a new owner's copy of the title was issued to [petitioner]. Ruling of the Court of Appeals

"Upon discovery of the 'fraudulent steps' taken by the [petitioner], [respondent] The Court of Appeals upheld the trial court's findings that the JP Rizal property had
immediately executed an Affidavit of Adverse Claim on November 29, 1993. been acquired by respondent alone, out of her own personal funds. It ruled thus:

"She precisely asked the court that the sale of the JP Rizal property be declared "x x x [T]he JP Rizal property was purchased by the [respondent] alone;
as null and void; for the title to be cancelled; payment of actual, moral and therefore it is a paraphernal property. As a matter of fact, the title was issued
exemplary damages; and attorney's fees. in her name, Exh. 'DD' This was even admitted by [petitioner] in the Answer
that the sale was executed in her name alone. He also signed the sale
"It was, on the other hand, the version of [petitioner] that sometime in 1968 or mentioning [respondent] to be an absolute owner; therefore he should be
before he became a Filipino, 'through naturalization' the JP Rizal property was estopped from claiming otherwise. She alone likewise did the payment of the
being offered to him for sale. Because he was not a Filipino, he utilized taxes.10
[respondent] as his 'dummy' and agreed to have the sale executed in the name
The CA debunked the contention of petitioner that he had purchased the property out Nature of the Property
of his own funds and merely used respondent as his dummy.11 It also held that the latter
was not in pari delicto with him, because the contract was simulated or fictitious due to Petitioner contends that the JP Rizal property should be deemed as co-owned,
the lack of consideration. The contract was deemed void for having been executed considering that respondent testified during trial that the money she used in purchasing
during the couple's marriage.12 The CA likewise affirmed the award of actual, moral and it had come from her income, salaries and savings, which are conjugal in nature.
exemplary damages to respondent.13
On the other hand, respondent maintains that the finding of the two lower courts that
Hence, this Petition.14 the property was acquired using funds solely owned by her is binding and supported by
evidence. She further argues that the two defenses of petitioner are contradictory to
Issues each other because, if the property is co-owned, he cannot claim to own it in its entirety.

In his Memorandum, petitioner raises the following issues for the Court's consideration: We find no reason to disturb the findings of the RTC and the CA that the source of the
money used to acquire the property was paraphernal. This issue is factual in nature. It
I is axiomatic that "factual findings of the trial court, especially when affirmed by the Court
of Appeals, as in this case, are binding and conclusive on the Supreme Court. It is not
the function of this Court to reexamine the lower courts' findings of fact. While there are
"Whether or not the Court of Appeals gravely erred in not applying [the] rules exceptions to this rule, petitioner has not shown its entitlement to any of them."16
on co-ownership under Article 144 of the New Civil Code in determining the
proprietary rights of the parties herein even as respondent herself expressly
declared that the money with which she allegedly bought the property in The testimony of petitioner as to the source of the money he had supposedly used to
question in 1968 came from her funds, salaries and savings at the time she purchase the property was at best vague and unclear. At first he maintained that the
and petitioner already lived as husband and wife. money came from his own personal funds. Then he said that it came from his mother;
and next, from his father. Time and time again, "we [have] held that the unnatural and
contradictory testimony of a witness, x x x makes him unreliable x x x."17 His statement
II
that the JP Rizal property was bought with his own money can hardly be believed, when
he himself was unsure as to the source of those funds.
"Whether or not the Court of Appeals likewise palpably erred in declaring the
sale of the subject property to herein petitioner in 1992 to be fictitious, On the other hand, the capacity of respondent to purchase the subject property cannot
simulated and inexistent.
be questioned. It was sufficiently established during trial that she had the means to do
so. In fact, her testimony that she had purchased several other lots using her personal
III funds was not disputed.

"Whether or not the Court of Appeals further erred in not applying the '[in] pari Equally without merit is the contention of petitioner that, because he was a Chinese
delicto' rule to the sale of the subject property in favor of the petitioner in 1992 national at the time, respondent was merely used as a dummy in acquiring the property;
contrary to the express declaration to that effect in the very same case it cited thus, she could not have legally acquired title thereto. He testified that sometime during
(Rodriguez v. Rodriguez; 20 SCRA 908) in the decision herein sought to be the last month of 1968, he had consulted a certain Atty. Flores, who advised him that
reviewed. the property be registered in the name of respondent. However, TCT No. 217614 had
been issued earlier on April 17, 1968. Thus, it appears that the subject property had
IV already been bought and registered in the name of respondent, long before Atty. Flores
allegedly advised him to have the property registered in her name.
"Whether or not the Court of Appeals gravely erred in annul[l]ing the title (TCT
No. 181033) to the subject property in the name of herein petitioner in the We therefore agree with the CA's affirmation of the RTC's findings that the property had
absence of actual fraud."15 (Underscoring in the original.) been acquired using respondent's paraphernal property. The CA rule thus:

This Court's Ruling "The fact however, is that Yu never refuted Elvira's testimony that: (a) the
money with which she acquired the JP Rizal property came from": (1) her
The Petition is devoid of merit. income as a cashier in the Hong Kiat Hardware: a (2) income from her
paraphernal property – a lot in Guadalupe; (3) her savings from the money
which her parents gave her while she was still a student; and (4) the money
First Issue:
which her sister gave her for helping her run the beauty parlor; (b) her parents "The principle of in pari delicto non oritur actio denies all recovery to the guilty
were well off – they had stores, apartments and beauty parlors from which they parties inter se. It applies to cases where the nullity arises from the illegality of
derived income; (c) before her marriage she bought lots in different places (p. the consideration or the purpose of the contract. When two persons are equally
8, TSN, Jan. 26, 1998; pp. 22-23, TSN March 10, 1998)."18 at fault, the law does not relieve them. The exception to this general rule is
when the principle is invoked with respect to inexistent contracts."22
Second Issue:
Fourth Issue:
Fictitious, Simulated and Inexistent Sale
Cancellation of TCT
Next, petitioner argues that there was a valid sale between the parties, and that the
consideration consisted of his promise to construct a commercial building for the benefit Finally, based on the foregoing disquisition, it is quite obvious that the Court of Appeals
of their three children and to pay the loan he had obtained from Allied Bank. did not err in ordering the cancellation of TCT No. 181033, because the Deed of
Absolute Sale transferring ownership to petitioner was completely simulated, void and
We disagree. In Rongavilla v. Court of Appeals,19 the Court declared that a deed of sale, without effect. In fact, there was no legal basis for the issuance of the certificate
in which the stated consideration had not in fact been paid, is null and void: itself.1âwphi1.nêt

"The 'problem' before the Court is whether a deed which states a consideration WHEREFORE, the Petition is hereby DENIED and the assailed. Decision AFFIRMED.
that in fact did not exist, is a contract, without consideration, and therefore void Costs against petitioner.
ab initio, or a contract with a false consideration, and therefore, at least under
the Old Civil Code, voidable. x x x." SO ORDERED.

"In our view, therefore, the ruling of this Court in Ocejo, Perez & Co. vs. Flores, G.R. No. 120724-25 May 21, 1998
40 Phil. 921[,] is squarely applicable herein. In that case we ruled that a contract
of purchase and sale is null and null and void and produces no effect FERNANDO T. MATE, petitioner,
whatsoever where the same is without cause or consideration in that the vs.
purchase price which appears thereon as paid has in fact never been paid by THE HONORABLE COURT OF APPEALS and INOCENCIO TAN, respondents.
the purchaser to vendor."20

In the present case, it is clear from the factual findings of both lower courts that the
Deed of Sale was completely simulated and, hence, void and without effect. No portion
MARTINEZ, J.:
of the P200,000 consideration stated in the Deed was ever paid. And, from the facts of
the case, it is clear that neither party had any intention whatsoever to pay that amount.
In this petition for review, petitioner assails the Decision 1 of the Court of Appeals dated
August 29, 1994 in CA-G.R. CV No. 28225-26, which affirmed with modification the
Instead, the Deed of Sale was executed merely to facilitate the transfer of the property
decision of the trial court, the dispositive portion of which reads, to wit:
to petitioner pursuant to an agreement between the parties to enable him to construct a
commercial building and to sell the Juno property to their children. Being merely a
subterfuge, that agreement cannot be taken as the consideration for the sale. WHEREFORE, this Court finds the Deed of Sale with Right of
Repurchase executed October 6, 1986 valid and binding between
Third Issue: plaintiff and defendant (as vendor and vendee-a-retro respectively);
that as the period to redeem has expired, ownership thereof was
consolidated by operation of law, and the Register of Deeds is hereby
Inapplicability of the in Pari Delicto Principle ordered to REGISTER this decision consolidating the defendant's
ownership over the properties covered by Transfer Certificate of Title
The principle of in pari delicto provides that when two parties are equally at fault, the No. T-90-71, covering Lot 8; Original Certificate of Title No. N-311
law leaves them as they are and denies recovery by either one of them. However, this covering Lot 5370, all of the Tacloban Cadastre, and issuing to
principle does not apply with respect to inexistent and void contracts. Said this Court defendant Inocencio Tan his titles after cancellation of the titles
in Modina v. Court of Appeals:21 presently registered in plaintiff Fernando T. Mate's name and that of
his wife.
The plaintiff Fernando Mate is further ordered to pay defendant the and notarized, it was given to private respondent together with the
sum of ONE HUNDRED FORTY THOUSAND (P140,000.00) PESOS, titles of the properties and the latter did not register the transaction in
for and as attorney's fees. the Register of Deeds as agreed upon.

With costs against the plaintiff Fernando Mate. On January 14, 1987, petitioner deposited the check for
P1,400,000.00 (Exh. B) in his account at the United Coconut Planters
SO ORDERED.2 Bank and the other check for P420,000.00 (Exh. D) in his account at
METROBANK preparatory to the redemption of his properties.
However, both of them were dishonored by the drawee bank for having
The facts of this case, as summarized in the petition, are reproduced hereunder:
been drawn against a closed account. Realizing that he was swindled,
he sent Josie a telegram about her checks and when she failed to
On October 6, 1986 Josefina R. Rey (hereafter referred to as "Josie" respond, he went to Manila to look for her but she could not be found.
for short) and private respondent went to the residence of petitioner at So he returned to Tacloban City and filed Criminal Cases Nos. 8310
Tacloban City. Josie who is a cousin of petitioner's wife solicited his and 8312 against her for violation of B.P. 22 but the cases were later
help to stave off her and her family's prosecution by private respondent archived as the accused (Josie) could not be found as she went into
for violation of B.P. 22 on account of the rubber checks that she, her hiding. To protect his interest, he filed Civil Case No. 7396 of the
mother, sister and brother issued to private respondent amounting to Regional Trial Court of Leyte, Branch VII, entitled "Fernando T. Mate
P4,435067.00. She requested petitioner to cede to private respondent vs. Josefina R. Rey and Inocencio Tan" for Annulment of Contract with
his three (3) lots in Tacloban City in order to placate him. On hearing Damages. Defendant Josefina R. Rey (Josie) was declared in default
Josie's proposal he immediately rejected it as he owed private and the case proceeded against private respondent. But during the
respondent nothing and he was under no obligation to convey to him trial the RTC court asked private respondent to file an action for
his properties. Furthermore, his lots were not for sale. Josie explained consolidation of ownership of the properties subject of the sale and
to him that he was in no danger of losing his properties as he will pursuant thereto he filed Civil Case No. 7587 that was consolidated
merely execute a simulated document transferring them to private with the case he filed earlier which were later decided jointly by the
respondent but they will be redeemed by her with her own funds. After trial court in favor of private respondent and was subsequently
a long discussion, he agreed to execute a fictitious deed of sale with appealed to respondent Court that affirmed it with modification.
right to repurchase covering his three (3) lots mentioned above subject Thereupon, petitioner filed a motion to reconsider the decision but it
to the following conditions: was denied. Hence, the instant petition for review.3

1. The amount to be stated in the document is P1,400,000.00 with In this petition for review, the petitioner presents as the sole issue the validity of the
interest thereon at 5% a month; Deed of Sale with Right to Repurchase. He contends that it is null and void for lack of
consideration because allegedly no money changed hands when he signed it and the
2. The properties will be repurchased within six (6) months or on or checks that were issued for redemption of the properties involved in the sale have been
before April 4, 1987; dishonored by the drawee bank for having been drawn against a closed account. 4

3. Although it would appear in the document that petitioner is the The contention is without merit.
vendor, it is Josie who will provide the money for the redemption of the
properties with her own funds; There was a consideration. The respondent court aptly observed that —

4. Titles to the properties will be delivered to private respondent but In preparing and executing the deed of sale with right of repurchase
the sale will not be registered in the Register of Deeds and annotated and in delivering to Tan the land titles, appellant actually
on the titles. accommodated Josefina so she would not be charged criminally by
Tan. To ensure that he could repurchase his lots, appellant got a check
To assure petitioner that Josie will redeem the aforesaid properties, of P1,400,000.00 from her. Also, by allowing his titles to be in
she issued to him two (2) BPI checks both postdated December 15, possession of Tan for a period of six months, appellant secured from
1986. One check was for P1,400,000.00 supposedly for the selling her another check for P420,000.00. With this arrangement, appellant
price and the other was for P420,000.00 corresponding to the interests was convinced he had a good bargain. Unfortunately his expectation
for 6 months. Immediately thereafter petitioner prepared the Deed of crumbled. For this tragic incident, not only Josefina, but also Tan,
Sale with Right to Repurchase (Exh. A) and after it has been signed according to appellant must be answerable.
xxx xxx xxx Josefina but also Tan for annulment of contract on the ground of lack
of consideration and false pretenses on their part.
It is plain that consideration existed at the time of the execution of the
deed of sale with right of repurchase. It is not only appellant's kindness Petitioner then postulates that "it is not only illegal but immoral to require him to
to Josefina, being his cousin, but also his receipt of P420,000.00 from repurchase his own properties with his own money when he did not derive any benefit
her which impelled him to execute such contract. 5 from the transaction." Thus, he invokes the case of Singson vs. Isabela Sawmill, 88
SCRA 633, 643, where the Court said that "where one or two innocent persons must
Furthermore, while petitioner did not receive the P1.4 Million purchase prices from suffer, that person who gave occasion for the damages to be caused must bear
respondent Tan, he had in his possession a postdated check of Josie Rey in an consequences." Petitioner's reliance on this doctrine is misplaced. He is not an innocent
equivalent amount precisely to repurchase the two lots on or before the sixth month. person. As a matter of fact, he gave occasion for the damage caused by virtue of the
deed of sale with right to repurchase which he prepared and signed. Thus, there is the
equitable maxim that between two innocent parties, the one who made it possible for
As admitted by petitioner, by virtue of the sale with pacto de retro, Josie Rey gave him, the wrong to be done should be the one to bear the resulting loss.6
as vendor-a-retro, a postdated check in the amount of P1.4 Million, which represented
the repurchase price of the two (2) lots. Aside from the P1.4 Million check, Josie gave
another postdated check to petitioner in the amount of P420,000.00, ostensibly as Petitioner further insinuates that private respondent deceived him into signing the deed
interest for six (6) months but which apparently was his fee for having executed of sale with right to repurchase. This is not borne out by the evidence nor by petitioner's
the pacto de retrodocument. Josie thus assumed the responsibility of paying the own statement of facts which we heretofore produced. As aptly observed by the
repurchase price on behalf of petitioner to private respondent. respondent court "We are at a loss why herein appellant ascribes false pretenses to
Tan who merely signed the contract." 7 Contrary to petitioner's pretension, respondent
Tan did not employ any devious scheme to make the former sign the deed of sale. It is
Unfortunately, the two checks issued by Josie Rey were worthless. Both were to be noted that Tan waived his right to collect from Josefina Rey by virtue of the pacto
dishonored upon presentment by petitioner with the drawee banks. However, there is de retro sale. In turn, Josefina gave petitioner a postdated check in the amount of P1.4
absolutely no basis for petitioner to file a complaint against private respondent Tan and Million to ensure that the latter would not lose his two lots. Petitioner, a lawyer, should
Josie Rey to annul the pacto de retro sale on the ground of lack of consideration, have known that the transaction was fraught with risks since Josefina Rey and family
invoking his failure to encash the two checks. Petitioner's cause of action was to file had a checkered history of issuing worthless checks. But had petitioner not agreed to
criminal actions against Josie Rey under B.P. 22, which he did. The filing of the criminal the arrangement, respondent Tan would not have agreed to waive prosecution of
cases was a tacit admission by petitioner that there was a consideration of the pacto de Josefina Rey.
retro sale.
Apparently, it was petitioner's agreed for a huge profit that impelled him to accede to
Petitioner further claims that the pacto de retro sale was subject to the condition that in
the scheme of Josefina Rey even if he knew it was a dangerous undertaking. When the
the event the checks given by Josie Reyes to him for the repurchase of the property
drafted the pacto de retro document, he threw caution to the winds forgetting that
were dishonored, then the document shall be declared null and void for lack of prudence might have been the better course of action. We can only sympathize with
consideration.
petitioner's predicament. However, a contract is a contract. One agreed upon, and
provided all the essential elements are present, it is valid and binding between the
We are not persuaded. parties.

Private respondent Tan was already poised to file criminal cases against Josie Rey and Petitioner has no one to blame but himself for his misfortune.
her family. It would not be logical for respondent Tan to agree to the conditions allegedly
imposed by petitioner. Petitioner knew that he was bound by the deed of sale with right
WHEREFORE, the Decision of the Court of Appeals dated August 29, 1994 is hereby
to repurchase, as evidenced by his filing criminal cases against Josie Rey when the two AFFIRMED. The petition for review is hereby DENIED DUE COURSE for lack of merit.
checks bounced.
SO ORDERED.
The respondent court further made the candid but true observation that:
G.R. No. 153206 October 23, 2006
If there is anybody to blame for his predicament, it is appellant himself.
He is a lawyer. He was the one who prepared the contract. He knew
what he was entering into. Surely, he must have been aware of the ONG ENG KIAM a.k.a. WILLIAM ONG, petitioner,
risk involved. When Josefina's checks bounced, he should have vs.
repurchased his lots with his own money. Instead, he sued not only LUCITA G. ONG, respondent.
below. In the afternoon of December 14, 1995, their laundrywoman told him that Lucita
left the house.7

DECISION On January 5, 1998, the RTC rendered its Decision decreeing legal separation, thus:

WHEREFORE, premises considered, judgment is hereby rendered decreeing


the legal separation of plaintiff and defendant, with all the legal effects
attendant thereto, particularly the dissolution and liquidation of the conjugal
AUSTRIA-MARTINEZ, J.: partnership properties, for which purpose the parties are hereby ordered to
submit a complete inventory of said properties so that the Court can make a
just and proper division, such division to be embodied in a supplemental
Before this Court is a Petition for Review seeking the reversal of the Decision 1 of the decision.
Court of Appeals (CA) in CA G.R. CV No. 59400 which affirmed in toto the Decision of
the Regional Trial Court (RTC) Branch 41, Dagupan City granting the petition for legal
separation filed by herein respondent, as well as the Resolution2 of the CA dated April SO ORDERED.8
26, 2002 which denied petitioner’s motion for reconsideration.
The RTC found that:
Ong Eng Kiam, also known as William Ong (William) and Lucita G. Ong (Lucita) were
married on July 13, 1975 at the San Agustin Church in Manila. They have three children: It is indubitable that plaintiff (Lucita) and defendant (William) had their frequent
Kingston, Charleston, and Princeton who are now all of the age of majority.3 quarrels and misunderstanding which made both of their lives miserable and
hellish. This is even admitted by the defendant when he said that there was no
On March 21, 1996, Lucita filed a Complaint for Legal Separation under Article 55 par. day that he did not quarrel with his wife. Defendant had regarded the plaintiff
(1) of the Family Code4before the Regional Trial Court (RTC) of Dagupan City, Branch negligent in the performance of her wifely duties and had blamed her for not
41 alleging that her life with William was marked by physical violence, threats, reporting to him about the wrongdoings of their children. (citations omitted)
intimidation and grossly abusive conduct.5
These quarrels were always punctuated by acts of physical violence, threats
Lucita claimed that: soon after three years of marriage, she and William quarreled and intimidation by the defendant against the plaintiff and on the children. In
almost every day, with physical violence being inflicted upon her; William would shout the process, insulting words and language were heaped upon her. The plaintiff
invectives at her like "putang ina mo", "gago", "tanga", and he would slap her, kick her, suffered and endured the mental and physical anguish of these marital fights
pull her hair, bang her head against concrete wall and throw at her whatever he could until December 14, 1995 when she had reached the limits of her endurance.
reach with his hand; the causes of these fights were petty things regarding their children The more than twenty years of her marriage could not have been put to waste
or their business; William would also scold and beat the children at different parts of by the plaintiff if the same had been lived in an atmosphere of love, harmony
their bodies using the buckle of his belt; whenever she tried to stop William from hitting and peace. Worst, their children are also suffering. As very well stated in
the children, he would turn his ire on her and box her; on December 9, 1995, after she plaintiff’s memorandum, "it would be unthinkable for her to throw away this
protested with William’s decision to allow their eldest son Kingston to go to Bacolod, twenty years of relationship, abandon the comforts of her home and be
William slapped her and said, "it is none of your business"; on December 14, 1995, she separated from her children, whom she loves, if there exists no cause, which
asked William to bring Kingston back from Bacolod; a violent quarrel ensued and is already beyond her endurance.9
William hit her on her head, left cheek, eye, stomach, and arms; when William hit her
on the stomach and she bent down because of the pain, he hit her on the head then William appealed to the CA which affirmed in toto the RTC decision. In its Decision
pointed a gun at her and asked her to leave the house; she then went to her sister’s dated October 8, 2001, the CA found that the testimonies for Lucita were straightforward
house in Binondo where she was fetched by her other siblings and brought to their and credible and the ground for legal separation under Art. 55, par. 1 of the Family
parents house in Dagupan; the following day, she went to her parent’s doctor, Dr. Code, i.e., physical violence and grossly abusive conduct directed against Lucita, were
Vicente Elinzano for treatment of her injuries.6 adequately proven.10

William for his part denied that he ever inflicted physical harm on his wife, used insulting As the CA explained:
language against her, or whipped the children with the buckle of his belt. While he
admits that he and Lucita quarreled on December 9, 1995, at their house in Jose Abad The straightforward and candid testimonies of the witnesses were
Santos Avenue, Tondo, Manila, he claimed that he left the same, stayed in their uncontroverted and credible. Dr. Elinzano’s testimony was able to show that
Greenhills condominium and only went back to their Tondo house to work in their office the [Lucita] suffered several injuries inflicted by [William]. It is clear that on
December 14, 1995, she sustained redness in her cheek, black eye on her left THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN
eye, fist blow on the stomach, blood clot and a blackish discoloration on both DISREGARDING CLEAR EVIDENCE THAT THE PETITION FOR LEGAL
shoulders and a "bump" or "bukol" on her head. The presence of these injuries SEPARATION WAS INSTITUTED BY THE PRIVATE RESPONDENT FOR
was established by the testimonies of [Lucita] herself and her sister, Linda Lim. THE SOLE PURPOSE OF REMOVING FROM PETITIONER THE CONTROL
The Memorandum/Medical Certificate also confirmed the evidence presented AND OWNERSHIP OF THEIR CONJUGAL PROPERTIES AND TO
and does not deviate from the doctor’s main testimony --- that [Lucita] suffered TRANSFER THE SAME TO PRIVATE RESPONDENT’S FAMILY.
physical violence on [sic] the hands of her husband, caused by physical
trauma, slapping of the cheek, boxing and fist blows. The effect of the so-called II
alterations in the Memorandum/Medical Certificate questioned by [William]
does not depart from the main thrust of the testimony of the said doctor.
THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN
DISREGARDING CLEAR EVIDENCE REPUDIATING PRIVATE
Also, the testimony of [Lucita] herself consistently and constantly established RESPONDENT’S CLAIM OF REPEATED PHYSICAL VIOLENCE AND
that [William] inflicted repeated physical violence upon her during their GROSSLY ABUSIVE CONDUCT ON THE PART OF PETITIONER.13
marriage and that she had been subjected to grossly abusive conduct when he
constantly hurled invectives at her even in front of their customers and
employees, shouting words like, "gaga", "putang ina mo," tanga," and "you William argues that: the real motive of Lucita and her family in filing the case is to wrest
don’t know anything." control and ownership of properties belonging to the conjugal partnership; these
properties, which include real properties in Hong Kong, Metro Manila, Baguio and
Dagupan, were acquired during the marriage through his (William’s) sole efforts; the
These were further corroborated by several incidents narrated by Linda Lim only parties who will benefit from a decree of legal separation are Lucita’s parents and
who lived in their conjugal home from 1989 to 1991. She saw her sister after siblings while such decree would condemn him as a violent and cruel person, a wife-
the December 14, 1995 incident when she (Lucita) was fetched by the latter on beater and child abuser, and will taint his reputation, especially among the Filipino-
the same date. She was a witness to the kind of relationship her sister and Chinese community; substantial facts and circumstances have been overlooked which
[William] had during the three years she lived with them. She observed that warrant an exception to the general rule that factual findings of the trial court will not be
[William] has an "explosive temper, easily gets angry and becomes very disturbed on appeal; the findings of the trial court that he committed acts of repeated
violent." She cited several instances which proved that William Ong indeed physical violence against Lucita and their children were not sufficiently established;
treated her wife shabbily and despicably, in words and deeds. what took place were disagreements regarding the manner of raising and disciplining
the children particularly Charleston, Lucita’s favorite son; marriage being a social
xxx contract cannot be impaired by mere verbal disagreements and the complaining party
must adduce clear and convincing evidence to justify legal separation; the CA erred in
That the physical violence and grossly abusive conduct were brought to bear relying on the testimonies of Lucita and her witnesses, her sister Linda Lim, and their
upon [Lucita] by [William] have been duly established by [Lucita] and her parent’s doctor, Dr. Vicente Elinzanzo, whose testimonies are tainted with relationship
witnesses. These incidents were not explained nor controverted by [William], and fraud; in the 20 years of their marriage, Lucita has not complained of any cruel
except by making a general denial thereof. Consequently, as between an behavior on the part of William in relation to their marital and family life; William
affirmative assertion and a general denial, weight must be accorded to the expressed his willingness to receive respondent unconditionally however, it is Lucita
affirmative assertion. who abandoned the conjugal dwelling on December 14, 1995 and instituted the
complaint below in order to appropriate for herself and her relatives the conjugal
properties; the Constitution provides that marriage is an inviolable social institution and
The grossly abusive conduct is also apparent in the instances testified to by shall be protected by the State, thus the rule is the preservation of the marital union and
[Lucita] and her sister. The injurious invectives hurled at [Lucita] and his
not its infringement; only for grounds enumerated in Art. 55 of the Family Code, which
treatment of her, in its entirety, in front of their employees and friends, are
grounds should be clearly and convincingly proven, can the courts decree a legal
enough to constitute grossly abusive conduct. The aggregate behavior of separation among the spouses.14
[William] warrants legal separation under grossly abusive conduct. x x x 11
Respondent Lucita in her Comment, meanwhile, asserts that: the issues raised in the
William filed a motion for reconsideration which was denied by the CA on April 26, present petition are factual; the findings of both lower courts rest on strong and clear
2002.12
evidence borne by the records; this Court is not a trier of facts and factual findings of
the RTC when confirmed by the CA are final and conclusive and may not be reviewed
Hence the present petition where William claims that: on appeal; the contention of William that Lucita filed the case for legal separation in
order to remove from William the control and ownership of their conjugal properties and
I to transfer the same to Lucita’s family is absurd; Lucita will not just throw her marriage
of 20 years and forego the companionship of William and her children just to serve the
interest of her family; Lucita left the conjugal home because of the repeated physical for being negligent of her wifely duties and for not reporting to him the wrongdoings of
violence and grossly abusive conduct of petitioner.15 their children.23

Petitioner filed a Reply, reasserting his claims in his petition, 16 as well as a Lucita and her sister, Linda Lim, also gave numerous accounts of the instances when
Memorandum where he averred for the first time that since respondent is guilty of William displayed violent temper against Lucita and their children; such as: when
abandonment, the petition for legal separation should be denied following Art. 56, par. William threw a steel chair at Lucita;24 threw chairs at their children;25 slapped Lucita
(4) of the Family Code.17 Petitioner argues that since respondent herself has given and utter insulting words at her;26 use the buckle of the belt in whipping the
ground for legal separation by abandoning the family simply because of a quarrel and children;27pinned Lucita against the wall with his strong arms almost strangling her, and
refusing to return thereto unless the conjugal properties were placed in the smashed the flower vase and brick rocks and moldings leaving the bedroom in
administration of petitioner’s in-laws, no decree of legal separation should be issued in disarray;28 shouted at Lucita and threw a directory at her, in front of Linda and the
her favor.18 employees of their business, because he could not find a draft letter on his table; 29 got
mad at Charleston for cooking steak with vetchin prompting William to smash the plate
Respondent likewise filed a Memorandum reiterating her earlier assertions.19 with steak and hit Charleston, then slapped Lucita and shouted at her "putang ina mo,
gago, wala kang pakialam, tarantado" when she sided with Charleston;30 and the
December 9 and December 14, 1995 incidents which forced Lucita to leave the conjugal
We resolve to deny the petition. dwelling.31

It is settled that questions of fact cannot be the subject of a petition for review under
Lucita also explained that the injuries she received on December 14, 1995, were not
Rule 45 of the Rules of Court. The rule finds more stringent application where the CA the first. As she related before the trial court:
upholds the findings of fact of the trial court. In such instance, this Court is generally
bound to adopt the facts as determined by the lower courts.20
q. You stated on cross examination that the injuries you sustained on
December 14, 1995 were the most serious?
The only instances when this Court reviews findings of fact are:

a. Unlike before I considered December 14, 1995 the very serious because
(1) when the findings are grounded entirely on speculation, surmises or
before it is only on the arm and black eye, but on this December 14, I suffered
conjectures; (2) when the inference made is manifestly mistaken, absurd or bruises in all parts of my body, sir.32
impossible; (3) when there is grave abuse of discretion; (4) when the judgment
is based on a misapprehension of facts; (5) when the findings of facts are
conflicting; (6) when in making its findings the Court of Appeals went beyond To these, all William and his witnesses, could offer are denials and attempts to downplay
the issues of the case, or its findings are contrary to the admissions of both the the said incidents.33
appellant and the appellee; (7) when the findings are contrary to that of the trial
court; (8) when the findings are conclusions without citation of specific evidence As between the detailed accounts given for Lucita and the general denial for William,
on which they are based; (9) when the facts set forth in the petition as well as the Court gives more weight to those of the former. The Court also gives a great amount
in the petitioner’s main and reply briefs are not disputed by the respondent; of consideration to the assessment of the trial court regarding the credibility of witnesses
(10) when the findings of fact are premised on the supposed absence of as trial court judges enjoy the unique opportunity of observing the deportment of
evidence and contradicted by the evidence on record; and (11) when the Court witnesses on the stand, a vantage point denied appellate tribunals.34 Indeed, it is settled
of Appeals manifestly overlooked certain relevant facts not disputed by the that the assessment of the trial court of the credibility of witnesses is entitled to great
parties, which, if properly considered, would justify a different conclusion.21 respect and weight having had the opportunity to observe the conduct and demeanor
of the witnesses while testifying.35
As petitioner failed to show that the instant case falls under any of the exceptional
circumstances, the general rule applies. In this case, the RTC noted that:

Indeed, this Court cannot review factual findings on appeal, especially when they are William’s denial and that of his witnesses of the imputation of physical violence
borne out by the records or are based on substantial evidence. 22 In this case, the committed by him could not be given much credence by the Court. Since the
findings of the RTC were affirmed by the CA and are adequately supported by the office secretary Ofelia Rosal and the family laundrywoman Rosalino Morco are
records. dependent upon defendant for their livelihood, their testimonies may be tainted
with bias and they could not be considered as impartial and credible witnesses.
As correctly observed by the trial court, William himself admitted that there was no day So with Kingston Ong who lives with defendant and depends upon him for
that he did not quarrel with his wife, which made his life miserable, and he blames her support.36
Parenthetically, William claims that that the witnesses of Lucita are not credible because Costs against petitioner.
of their relationship with her. We do not agree. Relationship alone is not reason enough
to discredit and label a witness’s testimony as biased and unworthy of credence 37 and SO ORDERED.
a witness’ relationship to one of the parties does not automatically affect the veracity of
his or her testimony.38 Considering the detailed and straightforward testimonies given
G.R. No. L-38498 August 10, 1989
by Linda Lim and Dr. Vicente Elinzano, bolstered by the credence accorded them by
the trial court, the Court finds that their testimonies are not tainted with bias.
ISAAC BAGNAS, ENCARNACION BAGNAS, SILVESTRE BAGNAS MAXIMINA
BAGNAS, SIXTO BAGNAS and AGATONA ENCARNACION, petitioners,
William also posits that the real motive of Lucita in filing the case for legal separation is
in order for her side of the family to gain control of the conjugal properties; that Lucita vs.
HON. COURT OF APPEALS, ROSA L. RETONIL TEOFILO ENCARNACION, and
was willing to destroy his reputation by filing the legal separation case just so her
JOSE B. NAMBAYAN respondents.
parents and her siblings could control the properties he worked hard for. The Court finds
such reasoning hard to believe. What benefit would Lucita personally gain by pushing
for her parents’ and siblings’ financial interests at the expense of her marriage? What is Beltran, Beltran & Beltran for petitioners.
more probable is that there truly exists a ground for legal separation, a cause so strong,
that Lucita had to seek redress from the courts. As aptly stated by the RTC, Jose M. Legaspi for private respondents.

...it would be unthinkable for her to throw away this twenty years of relationship,
abandon the comforts of her home and be separated from her children whom
she loves, if there exists no cause, which is already beyond her endurance.39 NARVASA, J.:

The claim of William that a decree of legal separation would taint his reputation and The facts underlying this appeal by certiorari are not in dispute. Hilario Mateum of Kawit,
label him as a wife-beater and child-abuser also does not elicit sympathy from this Cavite, died on March 11, 1964, single, without ascendants or descendants, and
Court. If there would be such a smear on his reputation then it would not be because of survived only by collateral relatives, of whom petitioners herein, his first cousins, were
Lucita’s decision to seek relief from the courts, but because he gave Lucita reason to the nearest. Mateum left no will, no debts, and an estate consisting of twenty-nine
go to court in the first place. parcels of land in Kawit and Imus, Cavite, ten of which are involved in this appeal. 1

Also without merit is the argument of William that since Lucita has abandoned the family, On April 3, 1964, the private respondents, themselves collateral relatives of Mateum
a decree of legal separation should not be granted, following Art. 56, par. (4) of the though more remote in degree than the petitioners, 2 registered with the Registry of
Family Code which provides that legal separation shall be denied when both parties Deeds for the Province of Cavite two deeds of sale purportedly executed by Mateum in
have given ground for legal separation. The abandonment referred to by the Family their (respondents') favor covering ten parcels of land. Both deeds were in Tagalog,
Code is abandonment without justifiable cause for more than one year. 40 As it was save for the English descriptions of the lands conveyed under one of them; and each
established that Lucita left William due to his abusive conduct, such does not constitute recited the reconsideration of the sale to be" ... halagang ISANG PISO (Pl.00), salaping
abandonment contemplated by the said provision. Pilipino, at mga naipaglingkod, ipinaglilingkod sa aking kapakanan ..." ("the sum of ONE
PESO Pl.00), Philippine Currency, and services rendered, being rendered and to be
As a final note, we reiterate that our Constitution is committed to the policy of rendered for my benefit"). One deed was dated February 6,1963 and covered five
strengthening the family as a basic social institution.41 The Constitution itself however parcels of land, and the other was dated March 4, 1963, covering five other parcels,
does not establish the parameters of state protection to marriage and the family, as it both, therefore, antedating Mateum's death by more than a year. 3 It is asserted by the
remains the province of the legislature to define all legal aspects of marriage and petitioners, but denied by the respondents, that said sales notwithstanding, Mateum
prescribe the strategy and the modalities to protect it and put into operation the continued in the possession of the lands purportedly conveyed until his death, that he
constitutional provisions that protect the same.42With the enactment of the Family Code, remained the declared owner thereof and that the tax payments thereon continued to
this has been accomplished as it defines marriage and the family, spells out the be paid in his name. 4 Whatever the truth, however, is not crucial. What is not disputed
corresponding legal effects, imposes the limitations that affect married and family life, is that on the strength of the deeds of sale, the respondents were able to secure title in
as well as prescribes the grounds for declaration of nullity and those for legal their favor over three of the ten parcels of land conveyed thereby. 5
separation.43 As Lucita has adequately proven the presence of a ground for legal
separation, the Court has no reason but to affirm the findings of the RTC and the CA, On May 22,1964 the petitioners commenced suit against the respondents in the Court
and grant her the relief she is entitled to under the law. of First Instance of Cavite, seeking annulment of the deeds of sale as fictitious,
fraudulent or falsified, or, alternatively, as donations void for want of acceptance
WHEREFORE, the petition is DENIED for lack of merit. embodied in a public instrument. Claiming ownership pro indiviso of the lands subject
of the deeds by virtue of being intestate heirs of Hilario Mateum, the petitioners prayed than P10,000.00, the questioned deeds of sale each state a price of only one peso
for recovery of ownership and possession of said lands, accounting of the fruits thereof (P1.00) plus unspecified past, present and future services to which no value is assigned,
and damages. Although the complaint originally sought recovery of all the twenty-nine said deeds were void or inexistent from the beginning ("nulo") or merely voidable, that
parcels of land left by Mateum, at the pre-trial the parties agreed that the controversy is, valid until annulled. If they were only voidable, then it is a correct proposition that
be limited to the ten parcels subject of the questioned sales, and the Trial Court ordered since the vendor Mateum had no forced heirs whose legitimes may have been impaired,
the exclusion of the nineteen other parcels from the action. 6 Of the ten parcels which and the petitioners, his collateral relatives, not being bound either principally or
remained in litigation, nine were assessed for purposes of taxation at values subsidiarily to the terms of said deeds, the latter had and have no actionable right to
aggregating P10,500 00. The record does not disclose the assessed value of the tenth question those transfers.
parcel, which has an area of 1,443 square meters. 7
On the other hand, if said deeds were void ab initio because to all intents and purposes
In answer to the complaint, the defendants (respondents here) denied the alleged without consideration, then a different legal situation arises, and quite another result
fictitious or fraudulent character of the sales in their favor, asserting that said sales were obtains, as pointed out by the eminent civil law authority, Mr. Justice J.B.L. Reyes who,
made for good and valuable consideration; that while "... they may have the effect of in his concurring opinion in Armentia, said:
donations, yet the formalities and solemnities of donation are not required for their
validity and effectivity, ... that defendants were collateral relatives of Hilario Mateum and I ... cannot bring myself to agree to the proposition that the heirs
had done many good things for him, nursing him in his last illness, which services intestate would have no legal standing to contest the conveyance
constituted the bulk of the consideration of the sales; and (by way of affirmative defense) made by the deceased if the same were made without any
that the plaintiffs could not question or seek annulment of the sales because they were consideration, or for a false and fictitious consideration. For under the
mere collateral relatives of the deceased vendor and were not bound, principally or Civil Code of the Philippines, Art. 1409, par. 3, contracts with a cause
subsidiarily, thereby. 8 that did not exist at the time of the transaction are inexistent and void
from the beginning. The same is true of contracts stating a false cause
After the plaintiffs had presented their evidence, the defendants filed a motion for (consideration) unless the persons interested in upholding the contract
dismissal in effect, a demurrer to the evidence reasserting the defense set up in their should prove that there is another true and lawful consideration
answer that the plaintiffs, as mere collateral relatives of Hilario Mateum, had no light to therefor. (lbid., Art. 1353).
impugn the latter's disposition of his properties by means of the questioned
conveyances and submitting, additionally, that no evidence of fraud maintaining said If therefore the contract has no causa or consideration, or the causa is
transfers had been presented. 9 false and fictitious (and no true hidden causa is proved) the property
allegedly conveyed never really leaves the patrimony of the transferor,
The Trial Court granted the motion to dismiss, holding (a) on the authority of Armentia and upon the latter's death without a testament, such property would
vs. Patriarca, 10 that the plaintiffs, as mere collateral relatives, not forced heirs, of Hilario pass to the transferor's heirs intestate and be recoverable by them or
Mateum, could not legally question the disposition made by said deceased during his by the Administrator of the transferor's estate. In this particular regard,
lifetime, regardless of whether, as a matter of objective reality, said dispositions were I think Concepcion vs. Sta. Ana, 87 Phil. 787 and Sobs vs. Chua Pua
valid or not; and (b) that the plaintiffs evidence of alleged fraud was insufficient, the fact Hermanos, 50 Phil. 536, do not correctly state the present law, and
that the deeds of sale each stated a consideration of only Pl.00 not being in itself must be clarified.
evidence of fraud or simulation. 11
To be sure the quoted passage does not reject and is not to be construed as rejecting
On appeal by the plaintiffs to the Court of Appeals, that court affirmed, adverting with the Concepcion and Solisrulings 13 as outrightly erroneous, far from it. On the contrary,
approval to the Trial Court's reliance on the Armentia ruling which, it would appear, both those rulings undoubtedly read and applied correctly the law extant in their time: Art.
courts saw as denying, without exception, to collaterals, of a decedent, not forced heirs, 1276 of the Civil Code of 1889 under which the statement of a false cause in a contract
the right to impugn the latter's dispositions inter vivos of his property. The Appellate rendered it voidable only, not void ab initio. In observing that they "... do not correctly
Court also analyzed the testimony of the plaintiffs' witnesses, declared that it failed to state the present law and must be clarified," Justice Reyes clearly had in mind the fact
establish fraud of any kind or that Mateum had continued paying taxes on the lands in that the law as it is now (and already was in the time Armentia) no longer deems
question even after executing the deeds conveying them to the defendants, and closed contracts with a false cause, or which are absolutely simulated or fictitious, merely
with the statement that "... since in duly notarized and registered deeds of sale voidable, but declares them void, i.e., inexistent ("nulo") unless it is shown that they are
consideration is presumed, we do not and it necessary to rule on the alternative supported by another true and lawful cause or consideration. 14 A logical consequence
allegations of the appellants that the said deed of sale were (sic) in reality donations. 12 of that change is the juridical status of contracts without, or with a false, cause is that
conveyances of property affected with such a vice cannot operate to divest and transfer
One issue clearly predominates here. It is whether, in view of the fact that, for properties ownership, even if unimpugned. If afterwards the transferor dies the property descends
assuredly worth in actual value many times over their total assessed valuation of more to his heirs, and without regard to the manner in which they are called to the succession,
said heirs may bring an action to recover the property from the purported transferee. As
pointed out, such an action is not founded on fraud, but on the premise that the property 3. assert that Art. 1458 of the Civil Code, in prescribing that a sale be for a ... price
never leaves the estate of the transferor and is transmitted upon his death to heirs, who certain in money or its equivalent ... requires that "equivalent" be something
would labor under no incapacity to maintain the action from the mere fact that they may representative of money, e.g., a check or draft, again citing Manresa 16 to the effect that
be only collateral relatives and bound neither principally or subsidiarily under the deed services are not the equivalent of money insofar as said requirement is concerned and
or contract of conveyance. that a contract is not a true sale where the price consists of services or prestations;

In Armentia the Court determined that the conveyance questioned was merely 4. once more citing Manresa 17 also point out that the "services" mentioned in the
annullable not void ab initio, and that the plaintiff s action was based on fraud vitiating questioned deeds of sale are not only vague and uncertain, but are unknown and not
said conveyance. The Court said: susceptible of determination without the necessity of a new agreement between the
parties to said deeds.
Hypothetically admitting the truth of these allegations (of plaintiffs
complaint), the conclusion is irresistible that the sale is merely Without necessarily according all these assertions its full concurrence, but upon the
voidable. Because Marta Armentia executed the document, and this is consideration alone that the apparent gross, not to say enormous, disproportion
not controverted by plaintiff. Besides, the fact that the vendees were between the stipulated price (in each deed) of P l.00 plus unspecified and unquantified
minors, makes the contract, at worst, annullable by them, Then again, services and the undisputably valuable real estate allegedly sold worth at least
inadequacy of consideration does not imply total want of P10,500.00 going only by assessments for tax purposes which, it is well-known, are
consideration. Without more, the parted acts of Marta Armentia after notoriously low indicators of actual value plainly and unquestionably demonstrates that
the sale did not indicate that the said sale was void from the being. they state a false and fictitious consideration, and no other true and lawful cause having
been shown, the Court finds both said deeds, insofar as they purport to be sales, not
The sum total of all these is that, in essence, plaintiffs case is bottomed merely voidable, but void ab initio.
on fraud, which renders the contract voidable.
Neither can the validity of said conveyances be defended on the theory that their
It therefore seems clear that insofar as it may be considered as setting or reaffirming true causa is the liberality of the transferor and they may be considered in reality
precedent, Armentia only ruled that transfers made by a decedent in his lifetime, which donations 18 because the law 19 also prescribes that donations of immovable property,
are voidable for having been fraudulently made or obtained, cannot be posthumously to be valid, must be made and accepted in a public instrument, and it is not denied by
impugned by collateral relatives succeeding to his estate who are not principally or the respondents that there has been no such acceptance which they claim is not
subsidiarily bound by such transfers. For the reasons already stated, that ruling is not required. 20
extendible to transfers which, though made under closely similar circumstances, are
void ab initio for lack or falsity of consideration. The transfers in question being void, it follows as a necessary consequence and
conformably to the concurring opinion in Armentia, with which the Court fully agrees,
The petitioners here argue on a broad front that the very recitals of the questioned deeds that the properties purportedly conveyed remained part of the estate of Hilario Mateum,
of sale reveal such want or spuriousness of consideration and therefore the void said transfers notwithstanding, recoverable by his intestate heirs, the petitioners herein,
character of said sales. They: whose status as such is not challenged.

1. advert to a decision of the Court of Appeals in Montinola vs. Herbosa (59 O.G. No. The private respondents have only themselves to blame for the lack of proof that might
47, pp, 8101, 8118) holding that a price of P l.00 for the sale of things worth at least have saved the questioned transfers from the taint of invalidity as being fictitious and
P20,000.00 is so insignificant as to amount to no price at all, and does not satisfy the without ilicit cause; proof, to be brief, of the character and value of the services, past,
law which, while not requiring for the validity of a sale that the price be adequate, present, and future, constituting according to the very terms of said transfers the
prescribes that it must be real, not fictitious, stressing the obvious parallel between that principal consideration therefor. The petitioners' complaint (par. 6) 21 averred that the
case and the present one in stated price and actual value of the property sold; transfers were "... fraudulent, fictitious and/or falsified and (were) ... in reality donations
of immovables ...," an averment that the private respondents not only specifically
denied, alleging that the transfers had been made "... for good and valuable
2. cite Manresa to the same effect: that true price, which is essential to the validity of a
consideration ...," but to which they also interposed the affirmative defenses that said
sale, means existent, real and effective price, that which does not consist in an
transfers were "... valid, binding and effective ...," and, in an obvious reference to the
insignificant amount as, say, P.20 for a house; that it is not the same as the concept of
services mentioned in the deeds, that they "... had done many good things to (the
a just price which entails weighing and measuring, for economic equivalence, the
transferor) during his lifetime, nursed him during his ripe years and took care of him
amount of price against all the factors that determine the value of the thing sold; but that
during his previous and last illness ...," (pars. 4, 6, 16 and 17, their
there is no need of such a close examination when the immense disproportion between
answer).lâwphî1.ñèt 22 The onus, therefore, of showing the existence of valid and illicit
such economic values is patent a case of insignificant or ridiculous price, the
consideration for the questioned conveyances rested on the private respondents. But
unbelievable amount of which at once points out its inexistence; 15
even on a contrary assumption, and positing that the petitioners initially had the burden Under date of November 3, 1968, the Court of First Instance of Quezon City, after
of showing that the transfers lacked such consideration as they alleged in their hearing on the merits, rendered a decision in civil case 7761, dismissing the complaint
complaint, that burden was shifted to the private respondents when the petitioners filed by the petitioners against the Magdalena Estate, Inc. (hereinafter referred to as the
presented the deeds which they claimed showed that defect on their face and it became respondent) for the purpose of compelling specific performance by the respondent of
the duty of said respondents to offer evidence of existent lawful consideration. an alleged deed of sale of a parcel of residential land in favor of the petitioners. The
basis for the dismissal of the complaint was that the alleged purchase and sale
As the record clearly demonstrates, the respondents not only failed to offer any proof agreement "was not perfected".
whatsoever, opting to rely on a demurrer to the petitioner's evidence and upon the
thesis, which they have maintained all the way to this Court, that petitioners, being mere On November 18, 1968, after the perfection of their appeal to the Court of Appeals, the
collateral relatives of the deceased transferor, were without right to the conveyances in petitioners received a notice from the said court requiring them to file their printed record
question. In effect, they gambled their right to adduce evidence on a dismissal in the on appeal within sixty (60) days from receipt of said notice. This 60-day term was to
Trial Court and lost, it being the rule that when a dismissal thus obtained is reversed on expire on January 17, 1969.
appeal, the movant loses the right to present evidence in his behalf. 23
Allegedly under date of January 15, 1969, the petitioners allegedly sent to the Court of
WHEREFORE, the appealed Decision of the Court of Appeals is reversed. The Appeals and to counsel for the respondent, by registered mail allegedly deposited
questioned transfers are declared void and of no force or effect. Such certificates of title personally by its mailing clerk, one Juanito D. Quiachon, at the Makati Post Office, a
as the private respondents may have obtained over the properties subject of said "Motion For Extension of Time To File Printed Record on Appeal." The extension of time
transfers are hereby annulled, and said respondents are ordered to return to the was sought on the ground "of mechanical failures of the printing machines, and the
petitioners possession of an the properties involved in tills action, to account to the voluminous printing jobs now pending with the Vera Printing Press. ..."
petitioners for the fruits thereof during the period of their possession, and to pay the
costs. No damages, attorney's fees or litigation expenses are awarded, there being no On February 10, 1969, the petitioners filed their printed record on appeal in the Court
evidence thereof before the Court. of Appeals. Thereafter, the petitioners received from the respondent a motion filed on
February 8, 1969 praying for the dismissal of the appeal on the ground that the
SO ORDERED. petitioners had failed to file their printed record on appeal on time. Acting on the said
motion to dismiss the appeal, the Court of Appeals, on February 25, 1969, issued the
G.R. No. L-31018 June 29, 1973 following resolution:

LORENZO VELASCO AND SOCORRO J. VELASCO, petitioners, Upon consideration of the motion of counsel for defendant-appellee
vs. praying on the grounds therein stated that the appeal be dismissed in
HONORABLE COURT OF APPEALS and MAGDALENA ESTATE, accordance with Rules of Court, and of the opposition thereto filed by
INC., respondents. counsel for plaintiff-appellants, the Court RESOLVED to DENY the
said motion to dismiss.
Napoleon G. Rama for petitioners.
Upon consideration of the registry-mailed motion of counsel for
plaintiffs appellants praying on the grounds therein stated for an
Dominador L. Reyes for private respondent.
extension of 30 days from January 15, 1969 within which to file the
printed record on appeal, the Court RESOLVED to GRANT the said
motion and the printed record on appeal which has already been filed
is ADMITTED.
CASTRO, J.:
On March 11, 1969, the respondent prayed for a reconsideration of the above-
This is a petition for certiorari and mandamus filed by Lorenzo Velasco and Socorro J. mentioned resolution, averring that the Court of Appeals had been misled bythe
Velasco (hereinafter referred to as the petitioners) against the resolution of the Court of petitioners' "deceitful allegation that they filed the printed record on appeal within the
Appeals dated June 28, 1969 in CA-G.R. 42376, which ordered the dismissal of the reglementary period," because according to a certification issued by the postmaster of
appeal interposed by the petitioners from a decision of the Court of First Instance of Makati, Rizal, the records of the said post office failed to reveal that on January 15,
Quezon City on the ground that they had failed seasonably to file their printed record 1969 — the date when their motion for extension of time to file the printed record on
on appeal. appeal was supposedly mailed by the petitioners — there was any letter deposited there
by the petitioners' counsel. The petitioners opposed the motion for reconsideration.
They submitted to the appellate court the registry receipts (numbered 0215 and 0216),
both stampled January 15, 1969, which were issued by the receiving clerk of the registry 0216 for dispatch to Quezon City and Manila, respectively; however,
section of the Makati Post Office covering the mails for the disputed motion for extension such registry book for February 7, 1969 shows no letters with such
of time to file their printed record on appeal and the affidavit of its mailing clerk Juanito numbers posted on the said date.
D. Quiachon, to prove that their motion for extension was timely filed and served on the
Court of Appeals and the respondent, respectively. After several other pleadings and The Acting Postmaster of the Commercial Center Post Office of
manifestations were filed by the parties relative to the issue raised by the respondent's Makati, Rizal, further certifies that "Registry Receipts Nos. 0215 and
above-mentioned motion for reconsideration, the Court of Appeals promulgated on June 0216 addressed to Atty. Abraham F. Sarmiento of the Magdalena
28, 1969, its questioned resolution, the dispositive portion of which reads as follows: Estate, Quezon City and the Honorable Court of Appeals, respectively,
does not appear in our Registry Record Book which was allegedly
WHEREFORE, the motion for reconsideration filed on March 11, 1969 posted at this office on January 15, 1969."
is granted and appeal interposed by plaintiff-appellants from the
judgment of the court below is hereby dismissed for their failure to file From the foregoing, it is immediately apparent that the motion for
their printed Record on Appeal within the period authorized by this extension of time to file their Record on Appeal supposedly mailed by
Court. Atty. Patrocino R. Corpuz [counsel of the petitioner] is required the plaintiffs on January 15, 1969 was not really mailed on that date
to show cause within ten (10) days from notice why he should not be but evidently on a date much later than January 15, 1969. This is
suspended from the practice of his necessary investigation against further confirmed by the affidavit of Flaviano Malindog, a letter carrier
Juanito D. Quiachon of the Salonga, Ordoñez, Yap, Sicat & Associates of the Makati Post Office, which defendant attached as Annex 1 to its
Law Office, Suite 319 337 Rufino Building, Ayala Avenue, Makati Post supplemental reply to plaintiffs' opposition to the motion for
Office, to file the appropriate criminal action against them as may be reconsideration. In his said affidavit, Malindog swore among others:
warranted in the premises, and to report to this Court within thirty (30)
days the action he has taken thereon.
'That on February 7, 1969, between 12:00 o'clock
noon and 1:00 o'clock in the afternoon, JUANITO D.
The foregoing desposition was based on the following findings of the Court of Appeals: QUIACHON approached me at the Makati Post
Office and talked to me about certain letters which
An examination of the Rollo of this case, particularly the letter his employer had asked him to mail and that I should
envelope on page 26 thereof, reveals that on January 15, 1969, help him do something about the matter; but I asked
plaintiffs supposedly mailed via registered mail from the Post Office of him what they were all about, and he told me that
Makati, Rizal their motion for extension of 30 days from that date to they were letters for the Court of Appeals and for
file their printed Record on Appeal, under registered letter No. 0216. Atty. Abraham Sarmiento and that his purpose was
However, in an official certification, the Postmaster of Makati states to show that they were posted on January 15, 1969;
that the records of his office disclose: (a) that there were no registered that I inquired further, and he said that the letters
letters Nos. 0215 and 0216 from the Salonga, Ordoñez, Yap, Sicat & were not so important and that his only concern was
Associates addressed to Atty. Abraham F. Sarmiento, 202 Magdalena to have them post maker January 15, 1969;
Building, España Ext., Quezon City, and to the Court of Appeals,
Manila, respectively, that were posted in the Post Office of Makati, 'That believing the word of JUANITO D. QUIACHON
Rizal, on January 15, 1969; (b) that there is a registered letter that the letters were not really important I agreed to
numbered 215 but that the same was posted on January 3, 1969 by his request; whereupon, I got two (2) registry receipts
Enriqueta Amada of 7 Angel, Pasillo F-2, Cartimar, Pasay City, as from an old registry receipt booklet which is no longer
sender, and Giral Amasan of Barrio Cabuniga-an, Sto. Niño, Samar, being used and I numbered them 0215 for the letter
as addressee; and that there is also a registered letter numbered 216; addressed to Atty. Abraham Sarmiento in Quezon
but that the same was likewise posted on January 3, 1969 with E.B.A. City and 0216 for the letter addressed to the Court of
Construction of 1049 Belbar Building, Metropolitan, Pasong Tamo, Appeals, Manila; that I placed the same numbering
Makati, as sender, and Pres. R. Nakaya of the United Pacific Trading on the respective envelopes containing the letters;
Co., Ltd., 79, 6 Chamo, Nakatu, Yokohari, Japan, as addressee; (c) and that I also post maker them January 15, 1969;
that on January 15, 1969, the registered letters posted at the Makati
Post Office were numbered consecutively from 1001-2225, inclusive,
'That to the best of my recollection I wrote the correct
and none of these letters was addressed to Atty. Abraham F.
date of posting, February 7, 1969, on the back of one
Sarmiento of to the Court of Appeals; (d) that in Registry Bill Book No.
or both of the registry receipts above mentioned;
30 for Quezon City as well as that Manila, corresponding to February
7, 1969, there are entries covering registered letters Nos. 0215 and
'That the correct date of posting, February 7, 1969 The petitioner contend that in promulgating its questioned resolution, the Court of
also appears in the Registry Bill Books for Quezon Appeals acted without or in excess of jurisdiction, or with such whimsical and grave
City and Manila where I entered the subject abuse of discretion as to amount to lack of jurisdiction, because (a) it declared that the
registered letters; motion for extension of time to file the printed record on appeal was not mailed on
January 15, 1969, when, in fact, it was mailed on the record on appeal was filed only
Of course, plaintiff's counsel denies the sworn statement of Malindog on February 10, 1969, beyond the time authorized by the appellate court, when the truth
and even presented the counter-affidavit of one of his clerk by the is that the said date of filing was within the 30-day extension granted by it; (c) the
name of Juanito D. Quiachon. But between Malindog, whose sworn adverse conclusion of the appellate court are not supported by the records of the case,
statement is manifestly a declaration against interest since he can be because the said court ignored the affidavit of the mailing clerk of the petitioners'
criminally prosecuted for falsification on the basis thereof, and that of counsel, the registry receipts and postmarked envelopes (citing Henning v. Western
Quiachon, whose statement is self-serving, we are very much inclined Equipment, 62 Phil. 579, and Caltex Phil., Inc. v. Katipunan Labor Union, 52 O.G. 6209),
to give greater weight and credit to the former. Besides, plaintiffs have and, instead, chose to rely upon the affidavit of the mail carrier Malindog, which affidavit
not refuted the facts disclosed in the two (2) official certifications above was prepared by counsel for the respondent at the affiant himself so declared at the
mentioned by the Postmakers of Makati, Rizal. These two (2) preliminary investigation at the Fiscal's office which absolved the petitioners' counsel
certifications alone, even without to move this Court to reconsider its mailing clerk Quiachon from any criminal liability; (d) section 1, Rule 50 of the Rules of
resolution of February 25, 1969 and order the dismissal of this appeal. Court, which enumerates the grounds upon which the Court of Appeals may dismiss an
appeal, does not include as a ground the failure to file a printed record on appeal; (e)
the said section does not state either that the mismailing of a motion to extend the time
On September 5, 1969, after the rendition of the foregoing resolution, the Court of
to file the printed record on appeal, assuming this to be the case, may be a basis for the
Appeals promulgated another, denying the motion for reconsideration of the petitioner,
dismissal of the appeal; (f) the Court of Appeals has no jurisdiction to revoke the
but, at the same time, accepting as satisfactory the explanation of Atty. Patrocino R.
extention of time to file the printed record on appeal it had granted to the petitioners
Corpuz why he should not be suspended from the practice of the legal profession.
based on a ground not specified in section 1, Rule 50 of the Rules of Court; and (g) the
objection to an appeal may be waived as when the appellee has allowed the record on
On September 20, 1969, the First Assistant Fiscal of Rizal notified the Court of Appeals appeal to be printed and approved (citing Moran, Vol. II, p. 519).
that he had found a prima facie case against Flaviano C. Malindog and would file the
corresponding information for falsification of public documents against him. The said
Some of the objections raised by the petitioners to the questioned resolution of the Court
fiscal, however, dismissed the complaint against Quiachon for lack of sufficient
of Appeals are obviously matters involving the correct construction of our rules of
evidence. The information subsequently filed against Malindog by the first Assistance
procedure and, consequently, are proper subjects of an appeal by way of certiorari
Fiscal of Rizal reads as follow:
under Rule 45 of the Rules of Court, rather than a special civil action for certiorari under
Rule 65. The petitioners, however, have correctly appreciated the nature of its
That on or about the 7th day of February 1969, in the municipality of objections and have asked this Court to treat the instant petition as an appeal by way
Makati, province of Rizal, and a place within the jurisdiction of this of certiorari under Rule 45 "in the event ... that this Honorable Supreme Court should
Honorable Court, the above-named accused, conspiring and deem that an appeal is an adequate remedy ..." The nature of the case at bar permits,
confederating together and mutually helping and aiding with John Doe, in our view, a disquisition of both types of assignments.
whose true identity and present whereabout is still unknown, did then
and there willfully, unlawfully and feloniously falsify two registry
We do not share the view of the petitioners that the Court of Appeals acted without or
receipts which are public documents by reason of the fact that said
in excess of jurisdiction or gravely abused its discretion in promulgating the questioned
registry receipts are printed in accordance with the standard forms resolution.
prescribed by the Bureau of Posts, committed as follows: the above-
named accused John Doe, on the date above-mentioned approached
and induced the accused Malindog, a letter-carrier at the Makati Post While it is true that stamped on the registry receipts 0215 and 0215 as well as on the
Office, to postmark on Abraham Sarmiento in Quezon City, and the envelopes covering the mails in question is the date "January 15, 1969," this, by itself,
other to the Court of Appeals, Manila, and the accused Malindog, does not establish an unrebuttable presumption of the fact of date of
acceding to the inducement of, and in conspiracy with, his co-accused mailing. Henning and Caltex, cited by the petitioners, are not in point because the
John Doe, did then and there willfully and feloniously falsify said specific adjective issue resolved in those cases was whether or not the date of mailing
registry receipts of the Makati Post Office on January 15, 1969, a pleading is to be considered as the date of its filing. The issue in the case at bar is
thereby making it appear that the said sealed envelopes addressed to whether or not the motion of the petitioners for extension of time to file the printed record
Atty. Sarmiento and the Court of Appeals were actually posted, and on appeal was, in point of fact, mailed (and, therefore, filed) on January 15, 1969.
causing it to appear that the Postmaster of Makati participated therein
by posting said mail matters on January 15, 1969, when in truth and In resolving this issue in favor of the respondent, this Court finds, after a careful study
in fact he did not so participate. and appraisal of the pleadings, admissions and denials respectively adduced and made
by the parties, that the Court of Appeals did not gravely abuse its discretion and did not this dictum in matters of procedure is self-evident. For, were the doctrine otherwise, the
act without or in excess of its jurisdiction. We share the view of the appellate court that uncertainties that would follow when litigants are left to determine and redetermine for
the certifications issued by the two postmasters of Makati, Rizal and the sworn themselves whether to seek further redress in court forthwith or take their own sweet
declaration of the mail carrier Malindog describing how the said registry receipts came time will result in litigations becoming more unreable than the very grievances they are
to be issued, are worthy of belief. It will be observed that the said certifications explain intended to redness.
clearly and in detail how it was improbable that the petitioners' counsel in the ordinary
course of official business, while Malindog's sworn statement, which constitutes a very The argument raised by the petitioner — that the objection to an appeal maybe waived,
grave admission against his own interest, provides ample basis for a finding that where as when the appellee allows the record on appeal to be printed and approved — is
official duty was not performed it was at the behest of a person interested in the likewise not meritorious considering that the respondent did file a motion in the Court of
petitioners' side of the action below. That at the preliminary investigation at the Fiscal's Appeals on February 8, 1969 praying for the dismissal of the below of the petitioners
office, Malindog failed to identify Quiachon as the person who induced him to issue had not yet filed their record on appeal and, therefore, must be considered to have
falsified receipts, contrary to what he declared in his affidavit, is of no moment since the abandoned their appeal.
findings of the inquest fiscal as reflected in the information for falsification filed against
Malindog indicate that someone did induce Malindog to make and issue false registry
receipts to the counsel for the petitioners. In further assailing the questioned resolution of the Court of Appeals, the petitioners
also point out that on the merits the equities of the instant case are in their favor. A
reading of the record, however, persuades us that the judgment a quo is substantially
This Court held in Bello vs. Fernando1 that the right to appeal is nota natural right nor a correct and morally just.
part of due process; it is merely a statutory privilege, and may be exercised only in the
manner provided by law. In this connection, the Rule of Court expressly makes it the
The appealed decision of the court a quo narrates both the alleged and proven facts of
duty of an appellant to file a printed record on appeal with the Court of Appeals within
the dispute between the petitioners and the respondent, as follows:
sixty (60) record on appeal approved by the trial court has already been received by the
said court. Thus, section 5 of Rule 46 states:
This is a suit for specific performance filed by Lorenzo Velasco against
Sec. 5. Duty of appellant upon receipt of notice. — It shall be the duty the Magdalena Estate, Inc. on the allegation that on November 29,
of the appellant within fifteen (15) days from the date of the notice 1962 the plaintiff and the defendant had entered into a contract of sale
referred to in the preceding section, to pay the clerk of the Court of (Annex A of the complaint) by virtue of which the defendant offered to
Appeals the fee for the docketing of the appeal, and within sixty (60) sell the plaintiff and the plaintiff in turn agreed to buy a parcel of land
with an area of 2,059 square meters more particularly described as
days from such notice to submit to the court forty (40) printed copies
Lot 15, Block 7, Psd-6129, located at No. 39 corner 6th Street and
of the record on appeal, together with proof of service of fifteen (15)
printed copies thereof upon the appelee. Pacific Avenue, New Manila, this City, for the total purchase price of
P100,000.00.
As the petitioners failed to comply with the above-mentioned duty which the Rules of
Court enjoins, and considering that, as found by the Court of Appeals, there was a It is alleged by the plaintiff that the agreement was that the plaintiff was
deliberate effort on their part to mislead the said Court in grating them an extension of to give a down payment of P10,000.00 to be followed by P20,000.00
time within which to file their printed record on appeal, it stands to reason that the and the balance of P70,000.00 would be paid in installments, the equal
appellate court cannot be said to have abused its discretion or to have acted without or monthly amortization of which was to be determined as soon as the
in excess of its jurisdiction in ordering the dismissal of their appeal. P30,000.00 down payment had been completed. It is further alleged
that the plaintiff paid down payment of P10,000.00 on November 29,
1962 as per receipt No. 207848 (Exh. "A")and that when on January
Our jurisprudence is replete with cases in which this Court dismissed an appeal on 8, 1964 he tendered to the defendant the payment of the additional
grounds not mentioned specifically in Section 1, Rule 50 of the Rules of Court. (See, for P20,000.00 to complete the P30,000.00 the defendant refused to
example, De la Cruz vs. Blanco, 73 Phil. 596 (1942); Government of the Philippines vs. accept and that eventually it likewise refused to execute a formal deed
Court of Appeals, 108 Phil. 86 (1960); Ferinion vs. Sta. Romana, L-25521, February 28, of sale obviously agreed upon. The plaintiff demands P25,000.00
1966, 16 SCRA 370, 375). exemplary damages, P2,000.00 actual damages and P7,000.00
attorney's fees.
It will likewise be noted that inasmuch as the petitioners' motion for extension of the
period to file the printed record on appeal was belated filed, then, it is as though the The defendant, in its Answer, denies that it has had any direct
same were non-existent, since as this Court has already stated in Baquiran vs. Court of dealings, much less, contractual relations with the plaintiff regarding
Appeals,2 "The motion for extension of the period for filing pleadings and papers in court the property in question, and contends that the alleged contract
must be made before the expiration of the period to be extended." The soundness of described in the document attached to the complaint as Annex A is
entirely unenforceable under the Statute of Frauds; that the truth of the Inc. since December 29, 1961; that the Velasco family sometime in
matter is that a portion of the property in question was being leased 1962 offered to purchase the lot as a result of which Lorenzo Velasco
by a certain Socorro Velasco who, on November 29, 1962, went to the thru Socorro Velasco made the P10,000.00 deposit or, in the language
office of the defendant indicated her desire to purchase the lot; that of the defendant 'earnest money or down payment' as evidenced by
the defendant indicated its willingness to sell the property to her at the Exhibit A. The only matter that remains to be decided is whether the
price of P100,000.00 under the condition that a down payment of talks between the Magdalena Estate, Inc. and Lorenzo Velasco either
P30,000.00 be made, P20,000.00 of which was to be paid on directly or thru his sister-in-law Socorro Velasco ever ripened into a
November 31, 1962, and that the balance of P70,000.00 including consummated sale. It is the position of the defendant (1) that the sale
interest a 9% per annum was to be paid on installments for a period of was never consummated and (2) that the contract is unenforceable
ten years at the rate of P5,381.32 on June 30 and December of every under the Statute of Frauds.
year until the same shall have been fully paid; that on November 29,
1962 Socorro Velasco offered to pay P10,000.00 as initial payment The court a quo agreed with the respondent's (defendant therein) contention that no
instead of the agreed P20,000.00 but because the amount was short contract of sale was perfected because the minds of the parties did not meet "in regard
of the alleged P20,000.00 the same was accepted merely as to the manner of payment." The court a quo appraisal of this aspect of the action below
deposited and upon request of Socorro Velasco the receipt was made is correct. The material averments contained in the petitioners' complaint themselves
in the name of her brother-in-law the plaintiff herein; that Socorro disclose a lack of complete "agreement in regard to the manner of payment" of the lot
Velasco failed to complete the down payment of P30,000.00 and in question. The complaint states pertinently:
neither has she paid any installments on the balance of P70,000.00
up to the present time; that it was only on January 8, 1964 that Socorro
4. That plaintiff and defendant further agreed that the total down
Velasco tendered payment of P20,000.00, which offer the defendant
payment shall by P30,000.00, including the P10,000.00 partial
refused to accept because it had considered the offer to sell rescinded
payment mentioned in paragraph 3 hereof, and that upon completion
on account of her failure to complete the down payment on or before
December 31, 1962. of the said down payment of P30,000.00, the balance of P70,000.00
shall be said by the plaintiff to the defendant in 10 years from
November 29, 1962;
The lone witness for the plaintiff is Lorenzo Velasco, who exhibits the
receipt, Exhibits A, issued in his favor by the Magdalena Estate, Inc.,
5. That the time within the full down payment of the P30,000.00 was
in the sum of P10,000.00 dated November 29, 1962. He also identifies
to be completed was not specified by the parties but the defendant
a letter (Exh. B)of the Magdalena Estate, Inc. addressed to him and
was duly compensated during the said time prior to completion of the
his reply thereto. He testifies that Socorro Velasco is his sister-in-law
down payment of P30,000.00 by way of lease rentals on the house
and that he had requested her to make the necessary contacts with
existing thereon which was earlier leased by defendant to the plaintiff's
defendant referring to the purchase of the property in question.
sister-in-law, Socorro J. Velasco, and which were duly paid to the
Because he does not understand English well, he had authorized her
defendant by checks drawn by plaintiff.
to negotiate with the defendant in her whenever she went to the office
of the defendant, and as a matter of fact, the receipt for the P10,000.00
down payment was issued in his favor. The plaintiff also depends on It is not difficult to glean from the aforequoted averments that the petitioners themselves
Exhibit A to prove that there was a perfected follows: "Earnest money admit that they and the respondent still had to meet and agree on how and when the
for the purchase of Lot 15, Block 7, Psd-6129, Area 2,059 square down-payment and the installment payments were to be paid. Such being the situation,
meters including improvements thereon — P10,000.00." At the bottom it cannot, therefore, be said that a definite and firm sales agreement between the parties
of Exhibit A the following appears: "Agreed price: P100,000.00, had been perfected over the lot in question. Indeed, this Court has already ruled before
P30,000.00 down payment, bal. in 10 years." that a definite agreement on the manner of payment of the purchase price is an essential
element in the formation of a binding and unforceable contract of sale. 3 The fact,
therefore, that the petitioners delivered to the respondent the sum of P10,000 as part of
To prove that the Magdalena Estate, Inc. had been dealing all along
the down-payment that they had to pay cannot be considered as sufficient proof of the
with him and not with his sister-in-law and that the Magdalena Estate,
perfection of any purchase and sale agreement between the parties herein under article
Inc. knew very well that he was the person interested in the lot in
1482 of the new Civil Code, as the petitioners themselves admit that some essential
question and not his sister-in-law, the plaintiff offers in evidence five
matter — the terms of payment — still had to be mutually covenanted.
checks all drawn by him in favor of Magdalena Estate, Inc. for payment
of the lease of the property. ....
ACCORDINGLY, the instant petitioner is hereby denied. No pronouncement as to costs.
There does not seem to be any dispute regarding the fact that the
Velasco family was leasing this property from the Magdalena Estate, G.R. No. L-12888 April 29, 1961
R. F. NAVARRO, doing business under the firm name of R.F. NAVARRO & 5. On the same day plaintiff made the foregoing clariffications of his acceptance
COMPANY, plaintiff-appellant, of the sale, the defendant hurried advised plaintiff that it committed a
vs. typographical error indicating the specific gravity of the molasses at 185-
SUGAR PRODUCERS COOPERATIVE MARKETING ASSOCIATION degrees which should be only 85-degrees, the latter being the high for
INC., defendant-appellee. molasses at 60% sugar by invert, and requesting plain that the "specific gravity"
be amended accordingly, which correction and amendment plaintiff readily
Marquez, Quirino and Associates for plaintiff-appellant. agreed to and accepted:
San Juan, Africa and Benedicto for defendant-appellee.
6. That neither on September 24th, 1956 when plaintiff exercised his option nor
BARRERA, J.: on September 25th when he request plaintiff to clarify his acceptance to
indicate the manner payment, nor upon the submittal of the clarification which
presented by plaintiff himself and received by the defendant thru its President,
Plaintiff-appellant R. F. Navarro (doing business under the firm name R.F. Navarro & Amado Garcia, and for three days the after, there was no single word, effort or
Company) appeals directly to us from the order of the Court of First Instance of Rizal hint that the defendant's offer, accepted by the plaintiff, was qualified in any
(in Civil Case No. 1733-P) dismissing his complaint for lack of cause of action, on the way whatsoever;
assertion that only questions of law are involved herein.
7. That on September 24th, 1956, relying upon the consummation and
The material and pertinent allegations of plaintiff's complaint are:
perfection of the purchase and sale of 20,000 metric tons of molasses in
question as indicated above, plaintiff through his business associate here in
2. On September 19th, 1956, defendant formally offered to plaintiff the sale Manila (J.D. QUIRINO) continued negotiations for the resale of said molasses
from 15,000 to 20,000 metric tons of molasses, 1st-degrees gravity, 60% sugar to foreign buyers of said conunodity by immediately communicating the
by invert, at P50.00 per metric ton, ex-warehouse San Carlos and Bais, Negros availability of said commodity through letters, cablegrams a long-distance calls
Occidental, giving him up to noon of September 24th, 1956 within which to to the latter's business contacts in U.S.A., a Japan, and ultimately disposing
accept the offer, with the admonition that upon its failure to hear from him by and reselling the said molasses for forward deliveries in accordance with
then, the defendant shall feel free to negotiate the sale with other possible plaintiff's agreement with the defendant;
buyers;
8. On September 28th, 1956, three days after an agreement had been
3. On September 21st, 1956, answering an inquiry made by the plaintiff, the consummated on the price, quantity and quality of said molasses and the
defendant advised the latter that the cost of pumping the molasses offered by manner of payment thereof, the defendant, belatedly and abruptly advised
it for sale is P1.20 per metric ton in San Carlos district and P3.00 per metric ton plaintiff of its desire add certain additional conditions to be incorporated in the
in Bais district and that the date of delivery thereof shall start from February on formal contract of purchase and sale then under preparation by it for signature,
to March, April and May, 1957, as milling in the districts indicated (San Carlos — which were never even mentioned nor hinted at in its original offer or
and Bais) starts during the month of January; proposal, on the untenable pretext that they were 'standard conditions' on all
contracts for the sale said commodity, the most onerous of which were, —
4. Promptly at five minutes before noon of September 24th, 1956, plaintiff
formally accepted the offer of sale tendered by the defendant by informing the "(a) That upon the signing of the contract of purchased and sale; plaintiff shall
latter in writing that he binds himself to purchase from the preferred 20,000 pay defendant in cash an amount equivalent to 50% of the purchase value Of
metric tons of molasses in question for P50.00 per metric ton, and the day after the molasses;
September 21st, 1956, plaintiff upon the request of defendant, made the
following clarifications of his agreement to purchase the said molasses, — (1)
"(b) that to cover the remaining and unpaid balance of the purchase price,
20,000 metric tons of Philippine molasses, 185-degrees specific gravity, 60%
plaintiff shall open with the Philippine National Bank an irrevocable domestic
sugar by invert; (2) Price — P50.00 Philippine currency, per metric ton ex-
letter of credit in favor of defendant, which shall be assignable and divisible;
warehouse; (3) shipments to be in quantities of 3,000 or more metric tons every and
each shipment during the month of February, March, April and May until the
whole amount has been completely shipped; and (4)payment shall be by
irrevocable, divisible and assignable domestic letter of credit to be opened in a "(c) that in negotiating the said letter of credit, plaintiff shall allow defendant
local bank in defendant's favor; immediately to withdraw from the same the corresponding amount
representing 50% of the value of the molasses withdrawn from the central,
upon presentation of the requisite certificate thereof (certainly a condition
which, taken with (a) above, is most one-sided in favor only of the seller);
9. On October 2nd, 1956, plaintiff personally conferred with the defendant's The defendant contends that the complaint states no cause of action because
manager, Amado G. Garcia, with a view of threshing out the difficulties defendant's promise to sell, although accepted by the plaintiff, is not supported
necessarily evoked by the foregoing conditions belatedly demanded by the by any consideration distinct from the price and, under Article 1479 of the New
defendant, but the latter remained adamant in the defendant, and the day after Civil Code, is not binding. Article 1479 provides:
(October 3rd, 1956), it peremptorily gave plaintiff up to noon again of October
26th, 1956, within which to decide upon his acceptance of said additional "A promise to buy and sell a determinate thing for a price certain is
conditions with the warning that if he failed to do so, it would feel free to advise reciprocally demandable.
its planters concerned that they could negotiate their molasses with other
parties;
"An accepted unilateral promise to buy or sell a determinable thing for
a price certain is binding upon the promissor if the promise is
10. On October 5th, 1956, plaintiff, in a spirit of cooperation and in his desire supported by a consideration distinct from the price."
to insure the success of his purchase of the molasses in question, reiterated to
the defendant his readiness and willingness, — already imparted to it during
their conference on October 2nd —, to assist defendant in working out certain Although the existence of a lawful consideration or cause of support a contract
financing transactions with the bank whereby it may be possible to provide in is presumed, yet from the allegations of the herein complaint, it is apparent that
the letter of credit to be opened in favor of the defendant authority to draw cash the defendant's promise to sell is not supported by any consideration. In fact,
the absence of any consideration of the option given to the plaintiff was
advances up to 50% of the contract value of the molasses, under certain
admitted by plaintiff's counsel in his oral argument opposing the defendant's
conditions, and alternatively, plaintiff expressed his willingness to satisfy
motion to dismiss. Plaintiff, however, contends that the option became binding
defendant's desire to be paid in advance an amount equivalent to 50% of the
on the defendant when plaintiff gave notice of its acceptance and that having
purchase value of the molasses, but provided, that their original agreement of
been accepted within the period of the option, the offer can no longer be
P50.00 for metric ton were to be converted into what is known as "equal
withdrawn and, in any event, such withdrawal is ineffective because there had
standard condition", under which the purchase value would be only P32.00 per
already arisen an existing bilateral contract which can be enforced.
metric ton;

11. On the very same day and evidently without even any attempt to consider The case of Southwestern Sugar & Molasses Co. v. Atlantic Gulf & Pacific Co.
the matter further, defendant simply and rudely turned down the foregoing (51 O.G. 3447) is practically on all fours with the case at bar. In said case, on
friendly gesture of the plaintiff caused by the additional conditions demanded March 24, 1953, defendant Atlantic Gulf & Pacific Co. granted an option to
plaintiff Southwestern Sugar & Molasses Co. to buy its barge for P30,000.00
by the defendant in its letter of September 28, 1956 (indicated in par. 7 above),
to be exercised within ninety days. On May 11, 1953, Atlantic Gulf wrote
and bluntly informed plaintiff that in view of his non-acceptance of said
Southwestern Sugar that it was exercising its option and that it be notified as
conditions it would not continue with the sale of the molasses in question to
plaintiff and that it felt free to offer the same to any other interested buyer. soon as the barge was available. On May 12, 1953, Atlantic Gulf replied that
their understanding was that the "offer of option" is to be cash transaction and
to be effected at the time the barge was available. On June 25, 1953, Atlantic
Claiming breach of contract, plaintiff prayed that judgment be rendered ordering Gulf informed Southwestern Sugar that the damage action could not be turned
defendant to comply with and perform its contractual obligations, pursuant to its over to the latter. On June 27, 1953, Southwestern Sugar instituted an action
agreement with plaintiff of September 19 and 24, 1956 and in case of failure to do so, for specific performance in line with the accepted option, depositing with the
to pay plaintiff any and all damages he may suffer by reason of such non-compliance, Court the purchase price of 30,000.00. Atlantic Gulf, relying upon Article 1479
plus moral damages and to pay plaintiff reasonable attorney's fees and actual costs of of the New Civil Code, contended that the option was not valid because it was
the litigation. not supported by any consideration apart from the price. Southwestern Sugar
contended that the option became binding on Atlantic Gulf when plaintiff gave
As heretofore stated, upon defendant's motion to dismiss on the ground that it notice of its acceptance during the option period citing as its authority Article
(complaint) states no cause of action for the reason that "there is no binding contract 1324 of the New Civil Code which provides that 'when the offer or has allowed
between" plaintiff and defendant, under Article 1479 of the New Civil Code, the trial the offeree a certain period to accept, the offer may be withdrawn at any time
court dismissed the action in an order which in part reads: before acceptance by communicating such withdrawal except "when the option
is founded upon a consideration, as something paid or promised." Upholding
ORDER the contention of Atlantic Gulf and holding that the promise to sell was not valid
because it was not supported by a consideration distinct from the price, the
(Supreme) Court stated:
xxx xxx xxx
"There is no question that under Article 1479 of the New Civil Code It is the contention of plaintiff-appellant that "the lower court erred in characterizing the
"an option to sell" or a "promise to buy or to sell", as used in said article, transaction had between plaintiff and the defendant as an accepted unilateral promise
to be valid must be "supported by a consideration distinct from the to buy or to sell, and in deciding that as there was no consideration therefor, Article
price". This is clearly inferred from the context of said article that a 1479, paragraph 2 of the Civil Code, and the ruling in Southwestern Sugar & Molasses
unilateral promise to buy or to sell, even if accepted, is only binding if Co. v. Atlantic Gulf & Pacific Co., 51 Off. Gaz. 3447, are applicable thereto."
supported by a consideration. In other words, "an accepted unilateral
promise" can only have a binding effect if supported by a In support of his claim, appellant seeks in his brief to differentiate his case from that of
consideration. Here, it is not disputed that the option is without Southwestern Sugar & Molasses Company v. Atlantic Gulf & Pacific Company relied
consideration. It can, therefore, be withdrawn notwithstanding the upon by the trial court by arguing that what was involved in the Atlantic Gulf case was
acceptance made of it by appellee." a mere option, while here the transaction is a bilateral promise to sell and buy which
requires no consideration distinct from the selling price.
"It is true that under Article 1324 of the New Civil Code, the general
rule regarding offer and acceptance is that, when the offer or gives to This contention is not borne out by the facts alleged in the complaint. In the first place,
the offeree a certain period to accept, "the offer may be withdrawn at as noted by the trial court in its order denying plaintiff's motion for reconsideration,
any time before acceptance" except when the option is founded upon plaintiff himself, in paragraph 6 of his complaint, referred to the transaction as an
consideration, but this general provision must be interpreted as "option" which he exercised on September 24, 1956. Then again, in his memorandum
modified by the provision of Article 1479 above referred to, which in lieu of oral argument, he expressly agreed that the offer made by defendant and
applies to "a promise to buy and sell" specifically. As already stated, described in paragraph 2 of plaintiff's complaint is, In option, a unilateral promise to sell.
this rule requires that a premise to sell to be valid must be supported (See page 4 of the memorandum.) And, undoubtedly, this is the offer, the option, the
by a consideration distinct from the price." unilateral promise to sell that was accepted by plaintiff five minutes before the deadline
— noon of September 24, 1956.(See first part of paragraph 4 of the complaint.) This
On the strength of the above ruling laid down in the above cited case of acceptance, without consideration, did not create an enforceable obligation on the part
Southwestern Sugar & Molasses Co. v. Atlantic Gulf & Pacific Co., supra, the of the defendant. The offer as well as the acceptance, did not contemplate nor produce
facts of which are identical with those alleged in the present complaint, this an immediately binding and enforceable contract of sale. Both lack a most essential
Court rules that since the herein defendant's promise to sell is not supported element — the manner of payment of the purchase price. In fact, it was only after the
by any consideration distinct from the price, said promise si invalid and exercise of the option or acceptance of the unilateral promise to sell that the terms of
enforceable. Plaintiff's complaint does not, hence state a cause of action. payment were first discussed. This was in connection with the clarification of plaintiff's
acceptance which was transmitted to defendant on September 25, 1956. (See last part
While under the allegations of the present complaint, here in defendant may of paragraph 6 of the complaint.) Plaintiff's offer of a domestic letter of credit was not
have assumed a clear obligation to sell it molasses to plaintiff at P50.00 per accepted by defendant who insisted on a cash payment of 50% of the purchase value,
metric ton and, under the complaint, said defendant may have no justifiable upon signing of a contract. (See paragraphs 8 and 9 of the complaint.) Plaintiff, on the
reason not to proceed with the sale, yet, this Court cannot do otherwise that other hand, agreed to accede to this provided the price is reduced from P50.00 per
declare the option not binding and unenforceable in view of the clear provisions metric ton to 7132.00 Defendant rejected defendant's alternative counter-offer. In the
of the law on the matter. Thus, said the Supreme Court in the above-mentioned circumstance, there was no complete meeting of the minds of the parties necessary for
case of Southwestern Sugar v. Atlantic Gulf: the perfection of a contract of sale. Consequently, appellee was justified in withdrawing
its offer to sell the molasses in question.(See Zayco vs. Serra, 44 Phil. 326; Montinola
v. Victorias Milling Co., et al., 54 Phil. 782; and Batangan v. Cojuangco 78 Phil. 481.)
"While under the "offer of option" in question, appellant has assumed
a clear obligation to sell its barge to appellee and the option has been
exercised in accordance with its terms, and there appears to be no In view of the conclusion we have reached, it would not be necessary to pass upon
valid or justifiable reason for the appellant to withdraw its offer, this appellee's motion to dismiss the appeal.
Court cannot adopt a different attitude because the la on the matter is
clear. Our imperative duty is to apply it unless modified by Congress." WHEREFORE, finding no reversible error in the order appealed from, the same is
hereby affirmed, with cost against the plaintiff-appellant. So ordered.
WHEREFORE, the Court sustains, as it hereby sustain the defendant's motion
to dismiss and hereby declares plaintiff's complaint dismissed, without costs.

SO ORDERED.

His motion for reconsideration having been denied, plain plaintiff interposed this appeal.