Rigonan did not sell her properties to anyone.
As her nearest surviving kin
EUGENIO DOMINGO, CRISPIN MANGABAT and SAMUEL
CAPALUNGAN, petitioners, vs. HON. COURT OF APPEALS, FELIPE C.
RIGONAN and CONCEPCION R. RIGONAN, respondents. / EUGENIO
DOMINGO, CRISPIN MANGABAT and SAMUEL CAPALUNGAN,
petitioners, vs. HON. COURT OF APPEALS, THE DIRECTOR OF LANDS,
and FELIPE C. RIGONAN and CONCEPCION R. RIGONAN, respondents.
G.R. No. 127540 | 2001-10-17
D E C I S I O N
QUISUMBING, J.:
This petition[1] seeks to annul the decision of the Court of Appeals dated
August 29, 1996, which set aside the decision of the Regional Trial Court of
Batac, Ilocos Norte, Branch 17, in Civil Case No. 582-17 for reinvindicacion
consolidated with Cadastral Case No. 1.[2] The petition likewise seeks to
annul the resolution dated December 11, 1996, denying petitioners' motion
for reconsideration.
The facts of this case, culled from the records, are as follows:
Paulina Rigonan owned three (3) parcels of land, located at Batac and
Espiritu, Ilocos Norte, including the house and warehouse on one parcel. She
allegedly sold them to private respondents, the spouses Felipe and
Concepcion Rigonan, who claim to be her relatives. In 1966, herein
petitioners Eugenio Domingo, Crispin Mangabat and Samuel Capalungan,
who claim to be her closest surviving relatives, allegedly took possession of
the properties by means of stealth, force and intimidation, and refused to
vacate the same. Consequently, on February 2, 1976, herein respondent
Felipe Rigonan filed a complaint for reinvindicacion against petitioners in the
Regional Trial Court of Batac, Ilocos Norte. On July 3, 1977, he amended the
complaint and included his wife as co-plaintiff. They alleged that they were
the owners of the three parcels of land through the deed of sale executed by
Paulina Rigonan on January 28, 1965; that since then, they had been in
continuous possession of the subject properties and had introduced
permanent improvements thereon; and that defendants (now petitioners)
entered the properties illegally, and they refused to leave them when asked
to do so.
Herein petitioners, as defendants below, contested plaintiffs' claims.
According to defendants, the alleged deed of absolute sale was void for
being spurious as well as lacking consideration. They said that Paulina
within the fifth degree of consanguinity, they inherited the three lots and the
permanent improvements thereon when Paulina died in 1966. They said they
had been in possession of the contested properties for more than 10 years.
Defendants asked for damages against plaintiffs.
During trial, Juan Franco, Notary Public Evaristo P. Tagatag[3] and plaintiff
Felipe Rigonan testified for plaintiffs (private respondents now).
Franco testified that he was a witness to the execution of the questioned
deed of absolute sale. However, when cross-examined and shown the deed
he stated that the deed was not the document he signed as a witness, but
rather it was the will and testament made by Paulina Rigonan.
Atty. Tagatag testified that he personally prepared the deed, he saw Paulina
Rigonan affix her thumbprint on it and he signed it both as witness and notary
public. He further testified that he also notarized Paulina's last will and
testament dated February 19, 1965. The will mentioned the same lots sold to
private respondents. When asked why the subject lots were still included in
the last will and testament, he could not explain. Atty. Tagatag also
mentioned that he registered the original deed of absolute sale with the
Register of Deeds.
Plaintiff Felipe Rigonan claimed that he was Paulina's close relative. Their
fathers were first cousins. However, he could not recall the name of Paulina's
grandfather. His claim was disputed by defendants, who lived with Paulina as
their close kin. He admitted the discrepancies between the Register of
Deeds' copy of the deed and the copy in his possession. But he attributed
them to the representative from the Office of the Register of Deeds who went
to plaintiffs' house after that Office received a subpoena duces tecum.
According to him, the representative showed him blanks in the deed and then
the representative filled in the blanks by copying from his (plaintiff's) copy.
Counsel for defendants (petitioners herein) presented as witnesses Jose
Flores, the owner of the adjacent lot; Ruben Blanco, then acting Registrar of
Deeds in Ilocos Norte; and Zosima Domingo, wife of defendant Eugenio
Domingo.
Jose Flores testified that he knew defendants, herein petitioners, who had
lived on the land with Paulina Rigonan since he could remember and
continued to live there even after Paulina's death. He said he did not receive
any notice nor any offer to sell the lots from Paulina, contrary to what was
indicated in the deed of sale that the vendor had notified all the adjacent
owners of the sale. He averred he had no knowledge of any sale between
Paulina and private respondents.
Ruben Blanco, the acting Registrar of Deeds, testified that only the carbon
copy, also called a duplicate original, of the deed of sale was filed in his Costs against the defendants-appellees.[5]
office, but he could not explain why this was so.
Hence, this petition assigning the following as errors:
Zosima Domingo testified that her husband, Eugenio Domingo, was Paulina's
nephew. Paulina was a first cousin of Eugenio's father. She also said that I
they lived with Paulina and her husband, Jose Guerson, since 1956. They
took care of her, spent for her daily needs and medical expenses, especially THE RESPONDENT COURT OF APPEALS HAS DECIDED QUESTIONS
when she was hospitalized prior to her death. She stated that Paulina was OF LEGAL SUBSTANCE AND SIGNIFICANCE NOT IN ACCORDANCE
never badly in need of money during her lifetime. WITH THE EVIDENCE, LAW AND WITH THE APPLICABLE DECISIONS OF
THIS HONORABLE COURT.
On March 23, 1994, the trial court rendered judgment in favor of defendants
(now the petitioners). It disposed: II

WHEREFORE, premises considered, judgment is hereby rendered in favor of THAT THE FINDINGS OF RESPONDENT COURT OF APPEALS ARE
defendants and against the plaintiffs, and as prayed for, the Amended CONTRARY TO THOSE OF THE TRIAL COURT AND CLEARLY VIOLATES
Complaint is hereby DISMISSED. THE RULE THAT THE FACTUAL FINDINGS OF TRIAL COURTS ARE
ENTITLED TO GREAT WEIGHT AND RESPECT ON APPEAL, ESPECIALLY
Defendants are hereby declared, by virtue of intestate succession, the lawful WHEN SAID FINDINGS ARE ESTABLISHED BY UNREBUTTED
owners and possessors of the house including the bodega and the three (3) TESTIMONIAL AND DOCUMENTARY EVIDENCE.
parcels of land in suit and a Decree of Registration adjudicating the
ownership of the said properties to defendants is hereby issued. III

The alleged deed of sale (Exhs. "A", "A-1", "1" and "1-a") is hereby declared THAT THE FINDINGS AND CONCLUSIONS OF RESPONDENT COURT OF
null and void and fake and the prayer for the issuance of a writ of preliminary APPEALS ARE GROUNDED ENTIRELY ON SPECULATIONS, SURMISES,
injunction is hereby denied. CONJECTURES, OR ON INFERENCES MANIFESTLY MISTAKEN.

Plaintiffs are hereby ordered to pay defendants: IV

a) P20,000.00 as moral damages; THAT THE RESPONDENT COURT OF APPEALS MANIFESTLY

OVERLOOKED CERTAIN RELEVANT FACTS NOT DISPUTED BY THE
b) P10,000.00 as exemplary damages; PARTIES AND WHICH, IF PROPERLY CONSIDERED, WOULD JUSTIFY A
DIFFERENT CONCLUSION.
c) P10,000.00 attorney's fees and other litigation expenses.
V
No pronouncement as to costs.[4]
THAT THE FINDINGS OF FACT OF RESPONDENT COURT OF APPEALS
Private respondents herein appealed to the Court of Appeals. ARE PREMISED ON SUPPOSED ABSENCE OF EVIDENCE BUT IS
CONTRADICTED BY THE EVIDENCE ON RECORD THUS CONSTITUTES
On August 29, 1996, the CA reversed the trial court's decision, thus: GRAVE ABUSE OF DISCRETION.[6]

WHEREFORE, the decision dated March 23, 1994 is hereby SET ASIDE.
The plaintiffs-appellants Felipe Rigonan and Concepcion Rigonan are
declared the owners of the properties under litigation and the defendants-
appellees are hereby ordered to VACATE the subject properties and
SURRENDER the possession thereof to the heirs of the plaintiffs-appellants.
The basic issue for our consideration is, did private respondents sufficiently
establish the existence and due execution of the Deed of Absolute and
Irrevocable Sale of Real Property? Marked as Exhibits "A," "A-1," "1" and "1-
a," this deed purportedly involved nine (9) parcels of land, inclusive of the
three (3) parcels in dispute, sold at the price of P850 by Paulina Rigonan to
private respondents on January 28, 1965, at Batac, Ilocos Norte.[7] The trial
court found the deed "fake," being a carbon copy with no typewritten original
presented; and the court concluded that the document's execution "was
tainted with alterations, defects, tamperings, and irregularities which render it
null and void ab initio".[8]
Petitioners argue that the Court of Appeals erred in not applying the doctrine
that factual findings of trial courts are entitled to great weight and respect on
appeal, especially when said findings are established by unrebutted
testimonial and documentary evidence. They add that the Court of Appeals,
in reaching a different conclusion, had decided the case contrary to the
evidence presented and the law applicable to the case. Petitioners maintain
that the due execution of the deed of sale was not sufficiently established by
private respondents, who as plaintiffs had the burden of proving it. First, the
testimonies of the two alleged instrumental witnesses of the sale, namely,
Juan Franco and Efren Sibucao, were dispensed with and discarded when
Franco retracted his oral and written testimony that he was a witness to the
execution of the subject deed. As a consequence, the appellate court merely
relied on Atty. Tagatag's (the notary public) testimony, which was incredible
because aside from taking the double role of a witness and notary public, he
was a paid witness. Further his testimony, that the subject deed was
executed in the house of Paulina Rigonan, was rebutted by Zosima Domingo,
Paulina's housekeeper, who said that she did not see Atty. Tagatag, Juan
Franco and Efren Sibucao in Paulina's house on the alleged date of the
deed's execution.
Secondly, petitioners said that private respondents failed to account for the
typewritten original of the deed of sale and that the carbon copy filed with the
Register of Deeds was only a duplicate which contained insertions and
erasures. Further, the carbon copy was without an affidavit of explanation, in
violation of the Administrative Code as amended, which requires that if the
original deed of sale is not presented or available upon registration of the
deed, the carbon copy or so-called "duplicate original" must be accompanied
by an affidavit of explanation, otherwise, registration must be denied.[9]
Thirdly, petitioners aver that the consideration of only P850 for the parcels of
land sold, together with a house and a warehouse, was another indication
that the sale was fictitious because no person who was financially stable
would sell said property at such a grossly inadequate consideration.
Lastly, petitioners assert that there was abundant evidence that at the time of
the execution of the deed of sale, Paulina Rigonan was already senile. She
could not have consented to the sale by merely imprinting her thumbmark on
the deed.
In their comment, private respondents counter that at the outset the petition
must be dismissed for it lacks a certification against forum-shopping.
Nonetheless, even disregarding this requirement, the petition must still be
denied in due course for it does not present any substantial legal issue, but
factual or evidentiary ones which were already firmly resolved by the Court of
Appeals based on records and the evidence presented by the parties. Private
respondents' claim that the factual determination by the trial court lacks
credibility for it was made by the trial judge who presided only in one hearing
of the case. The trial judge could not validly say that the deed of absolute
sale was "fake" because no signature was forged, according to private
respondents; and indeed a thumbmark, said to be the seller's own, appears
thereon.
In their reply, petitioners said that the copy of the petition filed with this Court
was accompanied with a certification against forum shopping. If private
respondents' copy did not contain same certification, this was only due to
inadvertence. Petitioners ask for the Court's indulgence for anyway there was
substantial compliance with Revised Circular No. 28-91.
On the contention that here only factual issues had been raised, hence not
the proper subject for review by this Court, petitioners reply that this general
rule admits of exceptions, as when the factual findings of the Court of
Appeals and the trial court are contradictory; when the findings are grounded
entirely on speculations, surmises or conjectures; and when the Court of
Appeals overlooked certain relevant facts not disputed by the parties which if
properly considered would justify a different conclusion. All these, according
to petitioners, are present in this case.
Before proceeding to the main issue, we shall first settle procedural issues
raised by private respondents.
While the trial judge deciding the case presided over the hearings of the case
only once, this circumstance could not have an adverse effect on his
decision. The continuity of a court and the efficacy of its proceedings are not
affected by the death, resignation or cessation from the service of the
presiding judge. A judge may validly render a decision although he has only
partly heard the testimony of the witnesses.[10] After all, he could utilize and
rely on the records of the case, including the transcripts of testimonies heard
by the former presiding judge.
On the matter of the certification against forum-shopping, petitioners aver
that they attached one in the copy intended for this Court. This is substantial
compliance. A deviation from a rigid enforcement of the rules may be allowed
to attain their prime objective for, after all, the dispensation of justice is the
core reason for the court's existence.[11]
While the issues raised in this petition might appear to be mainly factual, this
petition is properly given due course because of the contradictory findings of
the trial court and the Court of Appeals. Further, the latter court apparently
overlooked certain relevant facts which justify a different conclusion.[12]
Moreover, a compelling sense to make sure that justice is done, and done
rightly in the light of the issues raised herein, constrains us from relying on
technicalities alone to resolve this petition.
Now, on the main issue. Did private respondents establish the existence and
due execution of the deed of sale? Our finding is in the negative. First, note
that private respondents as plaintiffs below presented only a carbon copy of
this deed. When the Register of Deeds was subpoenaed to produce the
deed, no original typewritten deed but only a carbon copy was presented to
the trial court. Although the Court of Appeals calls it a "duplicate original," the
deed contained filled in blanks and alterations. None of the witnesses directly
testified to prove positively and convincingly Paulina's execution of the
original deed of sale. The carbon copy did not bear her signature, but only
her alleged thumbprint. Juan Franco testified during the direct examination
that he was an instrumental witness to the deed. However, when cross-
examined and shown a copy of the subject deed, he retracted and said that
said deed of sale was not the document he signed as witness.[13] He
declared categorically he knew nothing about it.[14]
We note that another witness, Efren Sibucao, whose testimony should have
corroborated Atty. Tagatag's, was not presented and his affidavit was
withdrawn from the court,[15] leaving only Atty. Tagatag's testimony, which
aside from being uncorroborated, was self-serving.
Secondly, we agree with the trial court that irregularities abound regarding
the execution and registration of the alleged deed of sale. On record, Atty.
Tagatag testified that he himself registered the original deed with the Register
of Deeds.[16] Yet, the original was nowhere to be found and none could be
presented at the trial. Also, the carbon copy on file, which is allegedly a
duplicate original, shows intercalations and discrepancies when compared to
purported copies in existence. The intercalations were allegedly due to
blanks left unfilled by Atty. Tagatag at the time of the deed's registration. The
blanks were allegedly filled in much later by a representative of the Register
of Deeds. In addition, the alleged other copies of the document bore different
dates of entry: May 16, 1966, 10:20 A.M.[17] and June 10, 1966, 3:16 P.M.,
[18] and different entry numbers: 66246, 74389[19] and 64369.[20] The deed
was apparently registered long after its alleged date of execution and after
Paulina's death on March 20, 1966.[21] Admittedly, the alleged vendor
Paulina Rigonan was not given a copy.[22]
Furthermore, it appears that the alleged vendor was never asked to vacate
the premises she had purportedly sold. Felipe testified that he had agreed to
let Paulina stay in the house until her death.[23] In Alcos v. IAC, 162 SCRA
823 (1988), the buyer's immediate possession and occupation of the property
was deemed corroborative of the truthfulness and authenticity of the deed of
sale. The alleged vendor's continued possession of the property in this case
throws an inverse implication, a serious doubt on the due execution of the
deed of sale. Noteworthy, the same parcels of land involved in the alleged
sale were still included in the will subsequently executed by Paulina and
notarized by the same notary public, Atty. Tagatag.[24] These circumstances,
taken together, militate against unguarded acceptance of the due execution
and genuineness of the alleged deed of sale.
Thirdly, we have to take into account the element of consideration for the
sale. The price allegedly paid by private respondents for nine (9) parcels,
including the three parcels in dispute, a house and a warehouse, raises
further questions. Consideration is the why of a contract, the essential reason
which moves the contracting parties to enter into the contract.[25] On record,
there is unrebutted testimony that Paulina as landowner was financially well
off. She loaned money to several people.[26] We see no apparent and
compelling reason for her to sell the subject parcels of land with a house and
warehouse at a meager price of P850 only.
In Rongavilla vs. CA, 294 SCRA 289 (1998), private respondents were in
their advanced years, and were not in dire need of money, except for a small
amount of P2,000 which they said were loaned by petitioners for the repair of
their house's roof. We ruled against petitioners, and declared that there was
no valid sale because of lack of consideration.
In the present case, at the time of the execution of the alleged contract,
Paulina Rigonan was already of advanced age and senile. She died an
octogenarian on March 20, 1966, barely over a year when the deed was
allegedly executed on January 28, 1965, but before copies of the deed were
entered in the registry allegedly on May 16 and June 10, 1966. The general
rule is that a person is not incompetent to contract merely because of
advanced years or by reason of physical infirmities.[27] However, when such
age or infirmities have impaired the mental faculties so as to prevent the
person from properly, intelligently, and firmly protecting her property rights
then she is undeniably incapacitated. The unrebutted testimony of Zosima
Domingo shows that at the time of the alleged execution of the deed, Paulina
was already incapacitated physically and mentally. She narrated that Paulina
played with her waste and urinated in bed. Given these circumstances, there
is in our view sufficient reason to seriously doubt that she consented to the
sale of and the price for her parcels of land. Moreover, there is no receipt to
show that said price was paid to and received by her. Thus, we are in
agreement with the trial court's finding and conclusion on the matter:
The whole evidence on record does not show clearly that the fictitious
P850.00 consideration was ever delivered to the vendor. Undisputably, the
P850.00 consideration for the nine (9) parcels of land including the house
and bodega is grossly and shockingly inadequate, and the sale is null and
void ab initio.[28]

WHEREFORE, the petition is GRANTED. The decision and resolution of the

Court of Appeals dated August 29, 1996 and December 11, 1996,
respectively, are REVERSED and SET ASIDE. The decision of the Regional
Trial Court of Batac, Ilocos Norte, Branch 17, dated March 23, 1994, is
REINSTATED.

Costs against private respondents.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.


RAFAEL ALMEDA, EMERLINA ALMEDA-LIRIO, ALODIA ALMEDA-TAN,
LETICIA ALMEDA-MAGNO, NORMA ALMEDA-MATIAS AND PUBLIO
TIBI, Petitioners, v. HEIRS OF PONCIANO ALMEDA IN SUBSTITUTION
OF ORIGINAL DEFENDANT PONCIANO ALMEDA, INTESTATE ESTATE
Emerlina, Alodia, Leticia, Norma, Benjamin Almeda and Severina Almeda-
Santos (Severina) and Rosalina Almeda-Tibi (Rosalina), Publio's deceased
wife.5
On May 19, 1976, a Power of Attorney 6 was executed by Venancio and
Leonila, who were then 80 and 81 years old respectively, 7 granting Ponciano,
among others, the authority to sell the parcels of land covered by Original
Certificate of Title (OCT) Nos. O-197 and O-443 of the Office of the Register
of Deeds for Tagaytay City, which Leonila inherited 8 from her parents.

OF SPOUSES PONCIANO AND EUFEMIA PEREZ-ALMEDA AND THE OCT Nos. O-197 and O-443 were registered in the name of "Leonila L.
Almeda married to Venancio Almeda." OCT No. O-1979 embraced four (4)
REGISTER OF DEEDS OF TAGAYTAY CITY, Respondent.
parcels of land with an aggregate area of 95,205 square meters more or less,
to wit: Lot 10 (48,512 sq m), Lot 17 (37,931 sq m), Lot 30 (8,047 sq m) and
Lot 32 (715 sq m); and OCT No. O-44310 covered Lot 9 measuring 33,946 sq
m, more or less.
CESAR SANTOS, ROSANA SANTOS, NORMAN SANTOS AND
Venancio died at the age of 90 on February 27, 1985; Leonila died eight
FERDINAND SANTOS, Unwilling Plaintiffs/Petitioners. years later on April 3, 1993, aged 97. 11 Within the year of Leonila's death on
April 17, 1993,12 Rafael, Emerlina, Alodia, Leticia and Norma filed a notice of
G.R. No. 194189 | 2017-09-14 adverse claim with the Register of Deeds of Tagaytay City over their parents'
Republic of the Philippines properties.13
Supreme Court
Manila On October 10, 1996, a Complaint for Nullity of Contracts, Partition of
Properties and Reconveyance of Titles with Damages, 14 docketed as Civil
FIRST DIVISION Case No. TG-1643, was filed before the RTC of Tagaytay City by the
petitioners against Ponciano and his wife Eufemia Perez Almeda (Eufemia)
DECISION and the Register of Deeds of Tagaytay City, with Severina's surviving spouse,
Cesar Santos and children, Rosana, Norman and Ferdinand, as unwilling
TIJAM, J.: plaintiffs.15 Petitioners alleged that the parties were the only heirs of the late
spouses Venancio and Leonila who died without leaving any will and without
This Petition for Review on Certiorari1 assails the May 25, 2010 Decision2 of any legal obligation.16
the Court of Appeals (CA) in CA-G.R. CV No. 86953, denying Rafael Almeda
(Rafael), Emerlina Almeda-Lirio (Emerlina), Alodia Almeda-Tan (Alodia), In support of their Complaint, petitioners claimed that Ponciano, taking
Leticia Almeda-Magno (Leticia), Norma Almeda-Matias (Norma) and Publio advantage of his being the eldest child and his close relationship with their
Tibi's (Publio) (collectively, the petitioners) appeal from the Order 3 dated parents, caused the simulation and forgery of the following documents: 17
September 2, 2004 of the Regional Trial Court (RTC) of Tagaytay City, (1) Deed of Absolute Sale dated June 9, 1976, over Lot 30 under OCT No. O-
Branch 18, in Civil Case No. TG-1643, which dismissed their Complaint for 197, executed by Ponciano as Venancio and Leonila's attorney-in-fact, in
Nullity of Contracts, Partition of Properties and Reconveyance of Title with favor of Julian Y. Pabiloña, Virginia Go, Gemma Tan Ongking, Arthur C. Chua
Damages, and the CA Resolution 4 dated October 13, 2010 denying and Lee Hiong Wee (Pabiloña, et al.), for the price of P160,940.00; 18 and
petitioners' Motion for Reconsideration.
(2) Deed of Absolute Sale dated October 3, 1978, executed by Venancio and
The Facts Leonila in favor of Ponciano, over the remaining lots under OCT No. O-197
and Lot 9 under OCT No. O-443, and over Lots 6, 4 and 9-A with a total area
Spouses Venancio Almeda (Venancio) and Leonila Laurel-Almeda (Leonila) 71,520 sq m which then had no technical description, for the total
were the parents of nine children: Ponciano L. Almeda (Ponciano), Rafael, consideration of P704,243.77.19
By virtue of the aforesaid Deeds of Absolute Sale, OCT Nos. O-197 and O- Petitioners presented the lone testimony of Emerlina. 29 After Ponciano's
443 were cancelled, the former with respect only to Lots 10 and 17. heirs/substitutes (private respondents) failed to present their evidence
Resultantly, Transfer Certificate of Title (TCT) Nos. T-15125, T-24806, T- despite several opportunities given them, the RTC considered the case
24807, T-24808 and T-24809,20 all of the Registry of Deeds for Tagaytay City, submitted for decision.30
were issued to Ponciano,21 while TCT No. T-10330 of the same
Registry22 was issued to Julian Y. Pabiloña, Virginia Go, Gemma Tan In the course of the trial, two other documents figured in the dispute, which
Ongking, Arthur C. Chua and Lee Hiong Wee. 23 petitioners likewise impugned, showing:

According to petitioners, their parents did not sign the October 3, 1978 Deed
of Absolute Sale (1978 Deed) in favor of Ponciano and their signatures may
have been forged. They also averred that their parents did not receive due
consideration for the transaction, and if Ponciano succeeded in making them
sign said 1978 Deed, they did so without knowledge of its import. Petitioners,
however, would not claim rights and interest legally transferred to third
parties.24
Petitioners further alleged that Ponciano withheld from them the existence of
the 1978 Deed in his favor, and when they learned of it and demanded
partition, Ponciano merely promised to cause the same at a proper time.
When petitioners could no longer wait, they filed their notice of adverse claim
with the Register of Deeds. 25
(1) an Agreement to Sell31 dated November 9, 1976 whereby Venancio and
Leonila agreed to sell to Ponciano the parcels of land covered by OCT Nos.
O-197 and O-443, as well as Lots 6, 4 and 9-A, for the total price of P1
Million with P200,000.00 as down payment and the balance payable in one
year without interest; and
(2) a Deed of Sale with Mortgage 32 (Deed with Mortgage) dated November
11, 1977, which expressly superseded the Agreement to Sell dated
November 9, 1976, whereby Venancio and Leonila sold to Ponciano the
parcels of land covered by OCT Nos. 0-197 and 0-443, as well as Lots 6, 4
and 9-A, for P1 Million, with the payment of the P700,000.00 balance
secured by the said properties. This Deed wih Mortgage was expressly
superseded by the 1978 Deed in favor of Ponciano.

Petitioners, thus, prayed that the 1978 Deed in favor of Ponciano be declared On September 2, 2004, the RTC issued an Order33 dismissing petitioners'
null and void; that OCT No. O-197 be partitioned among the heirs of complaint. The dispositive portion of the order reads:
Venancio and Leonila; that the derivative titles obtained by Ponciano under
his name be reconveyed to petitioners; that the Register of Deeds for WHEREFORE, premises considered, the same is hereby ordered
Tagaytay City be ordered to cancel said derivative titles and to restore title to DISMISSED.
the property in the name of Venancio and Leonila; that the unwilling plaintiffs
be ordered to share in the expenses of the suit; and that Ponciano and his SO ORDERED.34
wife be ordered to pay moral and exemplary damages, attorney's fees and
the costs of litigation.26 The RTC held that the questioned documents, having been notarized and
executed in the presence of two instrumental witnesses, enjoy the
In their Answer,27 Ponciano and his wife, Eufemia, denied that the 1978 Deed presumption of regularity, and petitioners failed to overcome this presumption
was simulated or forged, asserting its genuineness and execution for by clear and convincing evidence. It stressed that petitioners failed to present
valuable consideration from which some of the petitioners, including Rafael, any proof of simulation or forgery of the subject documents.
received substantial pecuniary benefits. They asserted that Ponciano no
longer participated in the division of the estate of Venancio and Leonila In an Order35 dated November 29, 2005, the RTC denied petitioners' Motion
whose assets amounted to millions of pesos. They accused petitioners of not for Reconsideration.
coming to court with clean hands, claiming the latter may have themselves
resorted to falsification of documents to transfer said assets in their names Petitioners brought the case to the CA on appeal which was denied in the
and subsequently to other persons. Ponciano and Eufemia also averred that assailed Decision36 dated May 25, 2010, the dispositive portion of which
petitioners were guilty of laches. reads:

Ponciano died on October 16, 1997 and was substituted by his wife and IN VIEW OF ALL THESE, the Appeal is DENIED. The Order a
children.28 quo is AFFIRMED.

SO ORDERED.37
The CA held that petitioners failed to discharge their burden of proving the
purported forgery with clear and convincing evidence. The CA stressed that
such evidence was especially needed in this case given that the assailed
documents, being notarized, enjoy the presumption of regularity and of due
execution and authenticity. The CA noted that petitioners merely relied on
Emerlina's testimony that the questioned signatures were forged. 38
The CA further stressed that mere variance in the genuine and disputed
signatures is not proof of forgery. 39 To establish forgery, said the appellate
court, presentation of documents bearing the genuine signatures of Venancio
and Leonila was required, for comparison with the alleged false
signatures.40 The CA held that petitioners' failure to submit such documents
was fatal as it was necessary for petitioners to show not only the material
differences between the signatures, but also (1) the extent, kind and
significance of the variation; (2) that the variation was due to the operation of
a different personality and not merely an expected and inevitable variation
found in the genuine writing of the same writer; and (3) that the resemblance
was the result of a more or less skillful imitation and not merely a habitual
and characteristic resemblance which naturally appears in a genuine
writing.41
Petitioners' Motion for Reconsideration42 was subsequently denied in the
Resolution43 dated October 13, 2010.
The issue of the genuineness of a deed of sale is essentially a question of
fact. It is settled that this Court is not duty-bound to analyze and weigh again
the evidence considered in the proceedings below. This is especially true
where the trial court's factual findings are adopted and affirmed by the CA as
in the present case. Factual findings of the trial court, affirmed by the CA, are
final and conclusive and may not be reviewed on appeal. 47
At any rate, to remove any doubt as to the correctness of the assailed ruling,
We have examined the records and, nonetheless, reached the same
conclusion.48
Notarized documents enjoy the
presumption of regularity
A notarized Deed of Absolute Sale has in its favor the presumption of
regularity, and it carries the evidentiary weight conferred upon it with respect
to its due execution.49 It is admissible in evidence without further proof of its
authenticity and is entitled to full faith and credit upon its face. 50 Thus, a
notarial document must be sustained in full force and effect so long as he
who impugns it does not present strong, complete and conclusive proof of its
falsity or nullity on account of some flaws or defects. 51
Absent evidence of falsity so clear, strong and convincing, and not merely
preponderant, the presumption of regularity must be upheld. 52 The burden of
proof to overcome the presumption of due execution of a notarial document
lies on the party contesting the same. 53

Dissatisfied with the outcome of its appeal, petitioners filed the instant Forgery is not presumed
petition, asserting that the CA's ruling was contrary to the evidence, the law
and existing jurisprudence. Furthermore, as a rule, forgery cannot be presumed. 54 An a1legation of
forgery must be proved by clear, positive and convincing evidence, and the
The Court's Ruling burden of proof lies on the party alleging forgery. 55

The petition lacks merit. Petitioners failed to overcome the

presumption of due execution
Factual findings of the RTC, as
affirmed by the CA, deserve a high Since petitioners are assailing the genuineness of the 1978 Deed, they
degree of respect evidently have the burden of making out a clear-cut case that the questioned
document is bogus.56 Both the trial and appellate courts concluded that
Well-entrenched is the rule that the Supreme Court's role in a petition under petitioners failed to discharge this burden. We agree.
Rule 45 is limited to reviewing or reversing errors of law allegedly committed
by the appellate court.44 Equally settled is the rule that this Court is not a trier The Complaint, at the outset, did not allege in definite terms that Venancio
of facts.45 and Leonila's signatures on the 1978 Deed were forged. It stated:

In Spouses Villaceran, et al. v. De Guzman,46 the Court held that: VIII

 and admittedly genuine signatures
That [petitioners'] parents did not sign said documents of sale purportedly to reveal prominent similarities
transfer rights, titles and interest in favor of defendants, and, in fact their
signatures thereon may have been forged, and, that they did not receive due Section 22, Rule 132 of the Rules of Court explicitly authorizes the court, by
consideration thereof, and, said documents are merely simulated if ever itself, to make a comparison of the disputed handwriting with writings
defendant [Ponciano] succeeded in making them [sign] the same without admitted or treated as genuine by the party against whom the evidence is
knowledge of the import thereof, likewise, in making them appear as having offered, or proved to be genuine to the satisfaction of the judge. 64
executed and affixed their signatures on said controversial documents
although the transactions were inexistent.57 (Emphasis ours) Petitioners assert that the 1976 Power of Attorney 65 executed in favor of
Ponciano, which bore the true and genuine signatures of Venancio and
Likewise, Emerlina's testimony, upon which petitioners' case was built, is Leonila, could have been used as basis for comparison with the questioned
unclear and uncertain as to the supposed forgery. Emerlina testified that the signatures to determine their authenticity.66
vendors' signatures appearing on the 1978 Deed did not belong to her
parents, Venancio and Leonila. 58 Subsequently, however, she testified that if Comparing these two sets of signatures, the Court finds prominent
the latter did affix their signatures, they did not know what they signed. 59 Still similarities as to indicate the habitual and characteristic writing of Venancio
further to her testimony, Emerlina declared that she could not say if the and Leonila. Leonila's signature on the 1978 Deed, in particular, appears
signatures indeed belonged to her parents. 60 Eventually, she conceded to almost the same as her signature on the 1976 Power of Attorney. Venancio's
having two alternative answers to the question of forgery: first, that Venancio signature on the 1978 Deed was not as smooth as his signature on the 1976
and Leonila did not sign the document, and second, that it is possible that Power of Attorney, but the similarities in the angles and slants cannot be
they signed it but without knowing the consequences of their action. 61 ignored.

The uncertainty in petitioners' stance, as echoed in Emerlina's testimony, To support their claim of forgery, petitioners described the questioned
clearly militates against their claim of forgery. signatures as "wiri-wiri," or containing "wild strokes."67 The Court, however,
does not find such wild strokes in the questioned signatures. Leonila's was
Furthermore, it is undeniable that Emerlina stands to benefit from a judgment nearly as smooth as her signature on the 1976 Power of Attorney. Venancio's
annulling the 1978 Deed. Her testimony denying the validity of the sale, signature gives the impression that it had been affixed by a less than steady
having been made by a party who has an interest in the outcome of the case, but determined hand, and though not as fluid as his previous signature,
is not as reliable as written or documentary evidence. Moreover, self-serving reveals the characteristic imprint of his handwriting. Indeed, the resemblance
statements are inadequate to establish one's claims. Proof must be in the questioned and standard signatures are more prominent or
presented to support the same. 62 pronounced than the apparent variance which could be attributed to the
signatories' old age.
To establish forgery, the extent, kind and significance of the variation in the
standard and disputed signatures must be demonstrated; it must be proved In fine, the apparent dissimilarities in the signatures are overshadowed by the
that the variation is due to the operation of a different personality and not striking similarities and, therefore, fail to overcome the presumption of validity
merely an expected and inevitable variation found in the genuine writing of in favor of a notarized document.68
the same writer; and it should be shown that the resemblance is a result of a
more or less skillful imitation and not merely a habitual and characteristic Presumption of competence was not
resemblance which naturally appears in a genuine writing. 63 Emerlina's adequately refuted
uncorroborated testimony failed to demonstrate, based on the foregoing
criteria, that the questioned signatures were forgeries. "The law presumes that every person is fully competent to enter into a
contract until satisfactory proof to the contrary is presented." 69 The party
Indeed, petitioners failed to present the requisite proof of falsity and forgery claiming absence of capacity to contract has the burden of proof and
of the notarized 1978 Deed to overcome the presumption of regularity and discharging this burden requires that clear and convincing evidence be
due execution. adduced.70

Visual comparison of the questioned Petitioners have not satisfactorily shown that their parents' mental faculties
were impaired as to deprive them of reason or hinder them from freely The unrebutted testimony of Zosima Domingo shows that at the time of the
exercising their own will or from comprehending the provisions of the sale in alleged execution of the deed, Paulina was already incapacitated physically
favor of Ponciano. and mentally. She narrated that Paulina played with her waste and urinated
in bed. Given these circumstances, there is in our view sufficient reason to
Petitioners assert that their parents were "uliyanin" or forgetful, of advanced seriously doubt that she consented to the sale of and the price for her parcels
age and "at times" sickly during the time of the execution of the 1978 Deed in of land. x x x.76
favor of Ponciano.71
No similar circumstances, indicating senility and clear incapacity to contract,
Mere forgetfulness, however, without evidence that the same has removed have been alleged or proved in the instant case.
from a person the ability to intelligently and firmly protect his property rights,
will not by itself incapacitate a person from entering into contracts. "A person is presumed to be of sound mind at any particular time and the
condition is presumed to exist, in the absence of proof to the contrary." 77 In
In Mendezona v. Ozamiz,72 the Court affirmed a vendor's capacity to contract this case, petitioners failed to discharge their burden of proving, by clear and
despite a doctor's revelation that the former was afflicted with certain convincing evidence, that their parents were mentally incompetent to execute
infirmities and was, at times, forgetful, holding that: the 1978 Deed in favor of Ponciano.

The revelation of Dr. Faith Go did not also shed light on the mental capacity Undue influence was not proved
of Carmen Ozamiz on the relevant day – April 28, 1989 when the Deed of
Absolute Sale was executed and notarized. At best, she merely revealed "There is undue influence when a person takes improper advantage of his
that Carmen Ozamiz was suffering from certain infirmities in her body power over the will of another, depriving the latter of a reasonable freedom of
and at times, she was forgetful, but there was no categorical statement choice."78
that Carmen Ozamiz succumbed to what respondents suggest as her
alleged "second childhood" as early as 1987. The petitioners' rebuttal Other than petitioners' general allegation that Ponciano unduly took
witness, Dr. William Buot, a doctor of neurology, testified that no conclusion advantage of his being the eldest child and his close relationship with their
of mental incapacity at the time the said deed was executed can be parents, no other circumstance or evidence has been presented to show how
inferred from Dr. Faith Go's clinical notes nor can such fact be deduced Ponciano exerted his undue influence or how Venancio and Leonila were
from the mere prescription of a medication for episodic memory thereby deprived of the freedom to exercise sufficient judgment in selling the
loss.73 (Emphasis ours) subject properties to Ponciano.

In this case, petitioners' claim that Venancio and Leonila were forgetful and at "[U]ndue influence that vitiated a party's consent must be established by full,
times sickly was not even supported by medical evidence. It was based clear and convincing evidence, otherwise, the latter's presumed consent to
solely on Emerlina's testimony, which failed to demonstrate that Venancio the contract prevails."79
and Leonila's mental state had prevented them from freely giving their
consent to the 1978 Deed or from understanding the nature and effects of Lack or inadequacy of consideration
their disposition. was not established

It is settled that a person is not incapacitated to enter into a contract merely While maintaining that the 1978 Deed was a forgery, petitioners also insist
because of advanced years or by reason of physical infirmities, unless such that the deed was simulated. The incompatibility of these two contentions
age and infirmities impair his mental faculties to the extent that he is unable does not help petitioners' case. Forgery suggests that no consent was given
to properly, intelligently and fairly understand the provisions of said contract, to the transaction, while simulation indicates a mutual agreement albeit to
or to protect his property rights.74 deceive third persons.

Petitioners' reliance on the case of Domingo v. CA75 is misplaced. There, the Simulation has been defined as the declaration of a fictitious will, made
Court declared a deed of sale null and void given that the seller was already deliberately by mutual agreement of the parties, in order to produce the
of advanced age and senile at the time of its execution, thus: appearances of a juridical act which does not exist or is different from that
which was really executed, for the purpose of deceiving third persons.
Accordingly, simulation exists when: (a) there is an outward declaration of will
different from the will of the parties; (b) the false appearance was intended by
mutual agreement of the parties; and (c) their purpose is to deceive third
persons.80
None of the foregoing requisites have been shown to exist in this case.
In claiming that the 1978 Deed was simulated, petitioners assert that there
was no consideration and the vouchers supposedly showing Ponciano's
payment of P704,243.77 should not be considered as evidence since private
respondents failed to offer them, having been deemed to have waived their
presentation of evidence. Petitioners likewise argue that the price, in said
amount, was unconscionable.81
That the vouchers were not offered in evidence will not serve to strengthen
petitioners' theory of simulation. The notarized 1978 Deed shows on its face
that the properties were sold for the price of P704,243.77. The 1978 Deed
also appears to have gone through the procedure of registration, leading to
the issuance of TCT in Ponciano's name.
In Mendezona,82 the appellate court ruled that the assailed deed of absolute
sale was a simulated contract since the petitioners therein, in whose favor
the deed was executed, failed to prove that the consideration was actually
paid. This Court disagreed with the CA's ruling, holding that:
Contrary to the erroneous conclusions of the appellate court, a simulated
contract cannot be inferred from the mere non-production of the
checks. It was not the burden of the petitioners to prove so. It is
significant to note that the Deed of Absolute Sale dated April 28, 1989 is a
notarized document duly acknowledged before a notary public. As such, it
has in its favor the presumption of regularity, and it carries the evidentiary
weight conferred upon it with respect to its due execution. It is admissible in
evidence even without further proof of its authenticity and is entitled to full
faith and credit upon its face.
Payment is not merely presumed from the fact that the notarized Deed
of Absolute Sale dated April 28, 1989 has gone through the regular
procedure as evidenced by the transfer certificates of title issued in
petitioners' names by the Register of Deeds. In other words, whosoever
alleges the fraud or invalidity of a notarized document has the burden of
proving the same by evidence that is clear, convincing, and more than merely
preponderant. Therefore, with this well-recognized statutory presumption, the
burden fell upon the respondents to prove their allegations attacking the
validity and due execution of the said Deed of Absolute Sale. Respondents
failed to discharge that burden; hence, the presumption in favor of the said
deed stands. But more importantly, that notarized deed shows on its
face that the consideration of One Million Forty Thousand Pesos
(P1,040,000.00) was acknowledged to have been received by Carmen
Ozamiz.
x x x x
Considering that Carmen Ozamiz acknowledged, on the face of the
notarized deed, that she received the consideration at One Million Forty
Thousand Pesos (P1,040,000.00), the appellate court should not have
placed too much emphasis on the checks, the presentation of which is
not really necessary. Besides, the burden to prove alleged non-payment of
the consideration of the sale was on the respondents, not on the petitioners.
Also, between its conclusion based on inconsistent oral testimonies and a
duly notarized document that enjoys presumption of regularity, the appellate
court should have given more weight to the latter. Spoken words could be
notoriously unreliable as against a written document that speaks a
uniform language.83 (Citations omitted and emphasis ours)
Contending that the price paid by Ponciano for the properties was
unconscionably low, petitioners point to the alleged sale of Lot 30, measuring
8,047 sq m, by Pabiloña, et al.84 to Cityland, Inc., on September 18, 1992 for
P12,070,500.00.85
Petitioners, however, have not demonstrated how the alleged selling price for
Lot 30 in 1992 proves that the price paid by Ponciano under the 1978 Deed
was unconscionable.
Furthermore, it is beyond dispute that the Deed of Absolute Sale in favor of
Ponciano was executed in 1978, or nearly 14 years before the alleged sale of
Lot 30 to Cityland, Inc. Given the obvious difference in the time of
transaction, the prevailing market conditions, and the size of the properties,
petitioners cannot sweepingly conclude that the price paid by Ponciano in
1978 was unconscionable on the basis of the 1992 sale of Lot 30.
In Ceballos v. Intestate Estate of the Late Mercado, 86 the Court had occasion
to rule:
Harping on the alleged unconscionably low selling price of the subject land,
petitioner points out that it is located in a tourist area and golf haven in Cebu.
Notably, she has failed to prove that on February 13, 1982, the date of the
sale, the area was already the tourist spot and golf haven that she describes
it to be. In 1990, the property might have been worth ten million pesos, as
she claimed; however, at the time of the sale, the area was still undeveloped.
Hence, her contention that the selling price was unconscionably low lacks
sufficient substantiation.87 (Citations omitted)

With more reason should the Court, in this case, hold that petitioners failed to
substantiate their claim of an unconscionable selling price, considering that
they have not shown any evidence of either the condition of the subject
properties in 1978 or other factors affecting their valuation, which may
possibly indicate the gross inadequacy of the price paid by Ponciano.
Petitioners would have this Court appreciate, as additional indications of
simulation of the 1978 Deed, the alleged late registration thereof in 1993 or
15 years after the sale, and the Tax Declarations that were allegedly still in
Leonila's name up to the time the Complaint was filed. 88 These contentions,
however, do not suffice to constitute the strong, positive and convincing
evidence that will overcome the presumption of due execution of a notarized
document.
In any event, records show that the 1978 Deed was in fact registered in
1984, during Venancio and Leonila's lifetime. Both OCT No. O-197 89 and
OCT No. O-44390 bear an annotation referring to the 1978 Deed, inscribed on
November 12, 1984, and based on such annotation, new transfer certificates
of title were issued in lieu of OCT No. O-197 and OCT No. O-443 in
Ponciano's name; TCT No. 15125,91 in particular, appears to have been
issued on November 12, 1984. By such registration and by obtaining
certificates of title in his name, Ponciano had clearly asserted his ownership
over the properties. Thus, that the Tax Declarations were still in Leonila's
name cannot be the basis to conclude that the 1978 Deed was a simulation.
A contract or conduct apparently honest and lawful must be treated as such
until it is shown to be otherwise by either positive or circumstantial evidence.
A duly executed contract enjoys the presumption of validity, and the party
assailing its regularity has the burden to prove its simulation. Indeed, it is
settled that notarized documents carry the presumption of due execution,
lending truth to the statements therein contained and to the authenticity of the
signatures thereto affixed.92 Petitioners have failed to adduce the requisite
clear and convincing evidence to overturn this presumption.
Alleged defects in the notarization
were raised only before this Court
Petitioners argue that the parties' Acknowledgment of the 1978 Deed before
the Notary Public, Federico Magdangal, whose notarial commission was for
Makati City, was done outside the latter's "territorial limits" because the
property is in Tanauan, Batangas. Furthermore, while the Acknowledgment
was done in Makati City, its printed text expressly states that the parties
personally appeared before the Notary Public in Tanauan,
Batangas.93 Petitioners also assert that their parents were residents of
Tanauan, Batangas, and given their advanced age, would not have gone to
Makati on the same day that the 1978 Deed was executed, to have the same
notarized.94
Petitioners further assert that while the Acknowledgment indicated that
Ponciano exhibited his residence certificate to the Notary Public, it did not
reflect any identification document from Venancio and Leonila. They argue
that the absence of such document contravened the Notary Public's
statement that Venancio and Leonila were known to him. 95
As private respondents have pointed out, however, these claims were only
raised for the first time before this Court. 96
"It is well-settled that issues not raised in the court a quo cannot be raised for
the first time on appeal in the Supreme Court without violating the basic rules
of fair play, justice and due process." 97 Due process dictates that when a
party who adopts a certain theory upon which the case is tried and decided
by the lower court, he should not be allowed to change his theory on appeal.
The reviewing court will not consider a theory of the case which has not been
brought to the lower court's attention; a new theory cannot be raised for the
first time at such late stage.98 Thus, We cannot bend backwards to examine
the issue belatedly raised by petitioners at this late stage in the proceedings.
Granting the Acknowledgment was defective, the same will merely strip the
document of its public character and reduce it to a private instrument. 99 It
remains incumbent upon petitioners to prove, by preponderance of evidence,
their allegation that the deed of sale was forged even though that document
no longer enjoys any significantly weighted presumption as to its validity. 100
The Court has explained "preponderance of evidence" thus:
"Preponderance of evidence" is the weight, credit, and value of the aggregate
evidence on either side and is usually considered to be synonymous with the
term "greater weight of the evidence" or "greater weight of the credible
evidence." Preponderance of evidence is a phrase which, in the last analysis,
means probability of the truth. It is evidence which is more convincing to the
court as worthy of belief than that which is offered in opposition
thereto.101 (Italics ours)
Petitioners have argued that their evidence is of greater weight since private
respondents did not at all present any evidence, particularly, to prove the
notarization of the 1978 Deed and the genuineness of their parents'
signatures thereon.102
We are not convinced. Time and again, this Court has ruled that:
In civil cases, it is a basic rule that the party making allegations has the failed to substantiate their claims that their parents were mentally incapable
burden of proving them by a preponderance of evidence. The parties of executing the 1978 Deed, that Ponciano exerted undue influence on their
must rely on the strength of their own evidence and not upon the parents, and that there was no consideration for the sale or that it was
weakness of the defense offered by their opponent. This rule holds true unconscionable.
especially when the latter has had no opportunity to present
evidence because of a default order. Needless to say, the extent of the All told, We find that the CA did not err in upholding the RTC's decision to
relief that may be granted can only be so much as has been alleged and dismiss petitioners' complaint.
proved with preponderant evidence required under Section 1 of Rule
133.103(Citations omitted and emphasis ours) WHEREFORE, the petition is DENIED. The Decision dated May 25, 2010
and Resolution dated October 13, 2010 of the Court of Appeals in CA-G.R.
The same principle applies here where private respondents were considered CV No. 86953 are AFFIRMED.
to have waived the presentation of their evidence at trial. "Ei incumbit
probatio qui dicit, non qui negat. He who asserts, not he who denies, must SO ORDERED.
prove."104 "We have consistently applied the ancient rule that if the plaintiff,
upon whom rests the burden of proving his cause of action, fails to show in a Sereno, C.J., (Chairperson), Leonardo-De Castro, Del
satisfactory manner facts on which he bases his claim, the defendant is Castillo, and Jardeleza, JJ., concur.
under no obligation to prove his exception or defense." 105

Thus, petitioners' evidence must stand on its own merit and must be
scrutinized for veracity and probative value. It is not rendered conclusive
simply because it was not met with evidence from the defense.

Section 1, Rule 133 of the Revised Rules of Court states how preponderance
of evidence is determined, viz:

In determining where the preponderance or superior weight of evidence on

the issues involved lies, the court may consider all the facts and
circumstances of the case, the witnesses' manner of testifying, their
intelligence, their means and opportunity of knowing the facts to which
[they] are testifying, the nature of the facts to which they testify, the
probability or improbability of their testimony, their interest or want of
interest, and also their personal credibility so far as the same may
legitimately appear upon the trial. The court may also consider the number of
witnesses, though the preponderance is not necessarily with the greater
number. (Emphasis ours)

Considering all the circumstances of this case and all evidence adduced in
support of the complaint, We find that even by the standard of
preponderance of evidence, petitioners have failed to establish the alleged
simulation or forgery of the 1978 Deed.

As previously explained, petitioners' claim of forgery is built on Emerlina's

testimony which we have found to be both uncertain and self-serving. More
importantly, a visual comparison of the disputed and admittedly genuine
signatures of Venancio and Leonila has led this Court to find striking
similarities that negate petitioners' claim of forgery. Petitioners have likewise

NATIVIDAD ARIAGA VDA. DE GURREA, CARLOS GURREA, JULIETA
GURREA, TERESA GURREA-RODRIGUEZ, RICARDO GURREA, Jr., MA.
VICTORIA GURREA-CANDEL, and RAMONA GURREA-MONTINOLA,
Petitioners, versus ENRIQUE SUPLICO, Respondent.
G.R. No. 144320 | 2006-04-26
FIRST DIVISION
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for review on certiorari under Rule 45 of the Rules of
Court assailing the Decision [1] of the Court of Appeals (CA) dated February
24, 2000 in CA-G.R. CV No. 56210, which affirmed in toto the Decision [2]
dated July 5, 1996 of the Regional Trial Court (RTC) of Pasig City, Branch
268, in Civil Case No. 47543; and the CA Resolution [3] dated August 7,
2000 which denied petitioners' motion for reconsideration.
The present petition arose from a complaint for annulment of title with prayer
for preliminary injunction filed with the Court of First Instance (CFI) of Rizal,
docketed as Civil Case No. 47543, by Rosalina Gurrea (plaintiff) in her
capacity as attorney-in-fact of the heirs of Ricardo Gurrea (Ricardo), namely:
Natividad, Carlos, Juliet and Ricardo, Jr., all surnamed Gurrea, and Teresa
Gurrea Colemenares. [4] The complaint was filed against Atty. Enrique
Suplico (defendant), Gen. Gaudencio Tobias, in his capacity as General
Manager of the National Housing Authority, and Joseph Estrada, in his
capacity as Municipal Mayor of San Juan, Rizal. [5]
The CA adopted the facts of the case as summarized by the RTC, to wit:
The lot in question situated at 245 Marne Street, San Juan, Metro Manila was
originally owned by one of herein plaintiffs' Attorney-in-Fact, Rosalina Gurrea,
as evidence (sic) by TCT No. 49767 (Exhibit "A"). That sometime in 1958,
Rosalina Gurrea transferred the ownership of said lot to Adelina Gurrea,
whose ownership was evidenced by TCT No. 58253 (Exhibit "B"). That
Adelina Gurrea continued to be the owner of the lot until her death.
Thereafter, Special Proceedings No. 7185 was instituted to have the will she
executed during her lifetime probated and to settle her estate. Under the said
will, the San Juan lot was bequeathed to Pilar and Luis Gurrea, while
700,000 pesetas, ¼ of the lot in Baguio City and a one-hectare piece of
land in Pontevedra, Negros Occidental were given to Ricardo Gurrea.
Ricardo Gurrea, represented by and through his counsel Atty. Enrique
Suplico (the defendant), filed an Opposition in Special Proc. No. 7185. In
consideration of said representation, Ricardo Gurrea agreed to pay Atty.
Suplico "a contingent fee of twenty (20%) of whatever is due me, either real
or personal property" (Exhibit "5"). During the pendency of the proceedings
and upon the oral instructions of Ricardo Gurrea, Atty. Suplico negotiated
with the other heirs of Adelina Gurrea regarding the transfer of the piso
(apartment building) in Spain to Ricardo Gurrea's daughter, Juliet Gurrea de
Melendres. Ricardo Gurrea further instructed Atty. Suplico not to enter into
any settlement with the heirs unless the piso is transferred to his daughter.
Finally, the transfer of the piso worth P64,000.00 was executed and the heirs
arrived at an amicable settlement regarding the estate of Adelina Gurrea.
Hence, Ricardo Gurrea withdrew his Opposition and the heirs then drew up a
project of partition which was eventually approved by the probate court.
Pursuant to the project of partition, the following properties were adjudicated
to Ricardo Gurrea: (1) the whole of the Baguio lot (with assessed value of
P26,350.00); (2) the whole of the San Juan lot (with assessed value of
P9,630.00); and (3) a parcel of land in Pontevedra, Negros Occidental (with
assessed value of P300.00). (Exhibit "R" for plaintiff and exhibit "19" for
defendant).
As payment of his attorney's fees, Ricardo Gurrea offered the San Juan lot to
Atty. Suplico who was initially hesitant to accept the same as the property is
occupied by squatters. However, in order not to antagonize his client, Atty.
Suplico agreed to Ricardo Gurrea's proposal with the further understanding
that he will receive an additional commission of 5% if he sells the Baguio
property. Thereafter, the deed of Transfer of Rights and Interest was drafted.
The said deed was presented to Ricardo Gurrea for his signature. That
before signing the same, the contents of the deed were first explained to
Ricardo Gurrea by Atty. Suplico and Atty. Manuel Pama, the notary public. On
August 20, 1975, the deed was finally signed by Ricardo Gurrea at the office
of Atty. Pama, in the presence of the latter, Atty. Suplico, Victor Tupas and
another person, the last two acting as witnesses. Later, on October 7, 1980,
Atty. Suplico registered the deed and obtained a title/TCT to the San Juan
property under his name. Ricardo Gurrea died on October 22, 1980. After his
death, his heirs instituted Special Pro. No. 2722 for the settlement of Ricardo
Gurrea's estate. In the said proceedings, Atty. Suplico filed several claims for
unpaid attorney's fees (no claim was filed relative to Special Proc. No. 7185);
however, all were dismissed with finality (Exhibits "I" and "J"). Also in the
same case, the estate's administrator, Carlos Gurrea, filed an Inventory of
Properties left by the decedent, which did not initially include the property
subject of this case. The said lot was included only subsequently in the
Amended Inventory (Exhibit "G"). [6]
On July 11, 1985, the RTC issued an Order dismissing the complaint on the
ground that it does not state a cause of action because the plaintiff is not the
real party-in-interest. [7] The complaint-in-intervention was likewise
dismissed. Plaintiff filed an appeal with the CA questioning the July 11, 1985
Order of the RTC. [8] The case was docketed as CA-G.R. CV No. 14790.
Thereafter, defendant filed a Motion for Issuance of Writ of Execution
Pending Appeal. [9] In its Order dated May 20, 1986, the RTC granted
defendant's motion. [10] Plaintiff then filed a petition for certiorari, prohibition
and mandamus with the CA seeking to annul the trial court's Order of May
20, 1986. The case was docketed as CA-G.R. SP No. 09394.
Subsequently, CA-G.R. CV No. 14790 and CA-G.R. SP No. 09394 were
consolidated.
On November 21, 1989, the CA promulgated its Decision in the consolidated
cases, the dispositive portion of which reads as follows:
WHEREFORE, judgment is hereby rendered, as follows:
(1) REVERSING the order appealed from in CA-G.R. CV No. 14790 and
GRANTING the appellant Rosalina Gurrea a period of sixty (60) days from
finality of this decision within which to implead in Civil Case No. 47543 the
real parties-in-interest; after compliance herewith by the appellant, the trial
court shall proceed to hear and decide the case accordingly; and
(2) GRANTING the petition for certiorari and prohibition in CA-G.R. SP No.
09394, hereby ANNULLING and SETTING ASIDE the respondent Court's
order dated May 20, 1986, granting the respondent Enrique Suplico's motion
for execution pending appeal (Annex C, petition), and the writ issued
pursuant thereto (Annex D, petition).
Costs against the appellee and respondent Enrique Suplico in both cases.
SO ORDERED. [11]
Accordingly, an Amended Complaint was filed in the RTC impleading the
heirs of Ricardo as additional plaintiffs, to wit: Natividad Ariaga Vda. de
Gurrea, Carlos Gurrea, Julieta Gurrea, Teresa Gurrea-Rodriguez, Ricardo
Gurrea, Jr., Ma. Victoria Gurrea Candel and Ramona Gurrea-Montinola. [12]
Thereafter, trial ensued.
In the course of the trial, Gen. Gaudencio Tobias of the NHA and then Mayor
Joseph Estrada of San Juan, were dropped as defendants upon motion of
plaintiffs and without the objection of defendant.
After trial, the RTC rendered judgment the dispositive portion of which reads:
WHEREFORE, taking all the foregoing into consideration, the Court finds that
the preponderance of evidence is in favor of the defendant and against the
plaintiffs, hence, orders the DISMISSAL of the above entitled case. No
pronouncement as to damages, costs and attorney's fees.
SO ORDERED. [13]
Plaintiffs and defendant appealed the case to the CA.
Plaintiffs-appellants contended that the RTC erred: in upholding the validity of
the supposed contract of attorney's fees between Ricardo and defendant-
appellant which provided for the payment of attorney's fees in the form of real
property because such an agreement is prohibited by Article 1491 of the Civil
Code; in limiting its evaluation of the transfer of rights and interests in
defendant-appelant's favor only on the basis of whether the deed evidencing
said transfer of rights and interests was forged, without regard to the facts
and circumstances surrounding its execution; in not finding that defendant-
appellant has been fully paid for all the services he had rendered for Ricardo;
in not declaring the payment of the subject lot as attorney's fees to be
unconscionable based on the guidelines for determining attorney's fees.
On the other hand, defendant-appellant asserted that the RTC erred in
refusing to dismiss the complaint for lack of cause of action; and in refusing
to award counterclaim in his favor.
On February 24, 2000, the CA rendered its Decision affirming, in toto, the
judgment of the RTC. The CA maintained the lower court's ruling that the
plaintiffs-appellants failed to present clear and convincing evidence that
defendant-appellant defrauded and exerted undue influence on Ricardo in
the latter's execution of the deed of Transfer of Rights and Interest and in
consequently transferring his ownership of the San Juan lot in his (defendant-
appellant's) favor; and that based on the evidence, the San Juan lot may be
considered as reasonable attorney's fees for defendant-appellant.
However, the CA did not discuss the issue of whether the contract of
attorney's fees between the late Ricardo and defendant-appellant and the
consequent transfer of rights and interest in favor of the latter is invalid for
being violative of Article 1491 of the Civil Code.
Plaintiffs-appellants (hereinafter petitioners), with the exception of plaintiff-
appellant Rosalina Gurrea, who died on June 2, 1999, filed a Motion for
Reconsideration, but the CA denied the same in a Resolution issued on
August 7, 2000.
Hence, the present petition raising the following issues:
1. WHETHER OR NOT, ASSUMING WITHOUT ADMITTING, THAT THE
'TRANSFER OF RIGHTS AND INTERESTS' (EXHIBIT E; 1) WAS DULY
EXECUTED BY RICARDO GURREA, THE SAME VIOLATES ARTICLE 1491
OF THE NEW CIVIL CODE AND, THEREFORE, NULL AND VOID.
2. WHETHER OR NOT THE SUPPOSED CONTRACT FOR ATTORNEY'S
FEES IN THE FORM OF THE 'MANIFESTATION' DATED JUNE 24, 1972
(EXHIBIT 5) PROVIDING FOR THE PAYMENT OF ATTORNEY'S FEES OUT
OF THE PROPERTIES IN LITIGATION, IS VALID;
3. WHETHER OR NOT, ASSUMING THAT THE 'MANIFESTATION' AND
'TRANSFER OF RIGHTS AND INTERESTS' ARE VALID, AND FURTHER
ASSUMING THAT RESPONDENT-ATTORNEY HAS NOT YET BEEN PAID
HIS ATTORNEY'S FEES IN SPECIAL PROCEEDINGS NO. 7185, THE
PAYMENT OF SAID FEES BY WAY OF THE WHOLE PROPERTY
SUBJECT MATTER OF THE INSTANT CASE IS UNCONSCIONABLE OR
UNREASONABLE CONSIDERING THE GUIDELINES FOR FIXING
ATTORNEY'S FEES;
4. WHETHER OR NOT PETITIONERS ARE ENTITLED TO THE
CANCELLATION OF RESPONDENT ATTORNEY'S TITLE OVER THE
SUBJECT PROPERTY AND THE RECONVEYANCE THEREOF TO THE
HEREIN PETITIONERS OR TO THE ESTATE OF THE LATE RICARDO
GURREA.
5. WHETHER OR NOT PETITIONERS ARE ENTITLED TO THE DAMAGES
CLAIMED IN THE ACTION SUBSTANTIATED BY THEIR EVIDENCE. [14]
As to the first issue, petitioners argue on the premise that, under the law,
estate proceedings shall be deemed closed and terminated when the court
declares it to be so and only after delivery of the remaining estate to the heirs
entitled to receive the same. Petitioners contend that no evidence was
presented to show that the probate court issued an order declaring Special
Proceedings No. 7185 closed and terminated. In addition, when the Transfer
of Rights and Interest in favor of respondent was notarized on August 20,
1975, the title over the subject lot was still in the name of Adelina Gurrea and
that said title was transferred only in the name of Ricardo on October 7,
1980. On these bases, petitioners conclude that at the time the Transfer of
Rights and Interest was notarized, there is no dispute that the subject
property still formed part of the estate of Adelina Gurrea and was, therefore,
still the subject of litigation. Hence, the transfer of rights and interest over the
subject property in favor of Atty. Suplico (respondent) is null and void.
Anent the second issue, petitioners contend that the Manifestation dated
June 24, 1972 executed by Ricardo providing for the payment in favor of
respondent of a contingent fee of twenty percent (20%) of whatever is due to
Ricardo, either real or personal property is invalid because based on
jurisprudence, attorney's fees, based on a contingent fee contract, may be
paid only out of a certain percentage of the value of the real property in
litigation; and that the real property itself may not be given as payment of
attorney's fees.
As to the third issue, petitioners assert that even assuming that the above-
mentioned Manifestation and Transfer of Rights and Interest are valid and
that respondent had not yet been paid his attorney's fees, the subject
property is an unreasonable and unconscionable payment for the actual
services that respondent had rendered for Ricardo, taking into consideration
the guidelines for fixing attorney's fees.
Petitioners did not elaborate on the fourth issue while, in the fifth issue, they
submitted to the discretion of the Court their entitlement to damages and
attorney's fees, as claimed before the trial court.
On his part, respondent contends that the issue as to whether Special
Proceedings No. 7185 was already closed and terminated at the time of
execution of the deed of Transfer of Rights and Interest, involves the
determination of factual matters and appreciation of pieces of evidence which
cannot be raised in a petition for review on certiorari before this Court. Even
assuming that petitioners may properly raise a factual issue in the present
petition, respondent submits that there is sufficient evidentiary basis for the
trial court's conclusion that the Transfer of Rights and Interest was executed
and entered into after the termination of Special Proceedings No. 7185.
Respondent also contends that based on jurisprudence, the Court has
upheld the validity of contingency fee contracts providing for the payment of
attorney's fees out of a portion or part of the property subject of litigation; that
the subject property is just, reasonable and equitable payment for the
services he rendered for the late Ricardo, consisting of the signing of the
Project of Partition, filing of an Opposition during the estate proceedings, and
negotiating with the other heirs which resulted in Ricardo's recovery of three
parcels of land.

The Court finds the petition meritorious.
It is a fundamental rule that the Supreme Court's jurisdiction in a petition for
review on certiorari as a mode of appeal under Rule 45 of the Rules of Court,
as amended, such as the one at bar, is limited to reviewing only errors of law,
not of fact. [15] The rationale of this rule is founded on the fact that the Court
is not a trier of facts and does not normally undertake the re-examination of
the evidence presented by the contending parties during the trial of the case
considering that the findings of facts of the CA are conclusive and binding on
the Court. [16]
However, there are recognized exceptions to this rule, to wit:
(1) when the findings are grounded entirely on speculation, surmises or
conjectures; (2) when the inference made is manifestly mistaken, absurd or
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 CA went beyond the
issues of the case, or its findings are contrary to the admissions of both the
appellant and the appellee; (7) when the findings are contrary to the trial
court; (8) when the findings are conclusions without citation of specific
evidence on which they are based; (9) when the facts set forth in the petition
as well as in the petitioner's main and reply briefs are not disputed by the
respondent; (10) when the findings of fact are premised on the supposed
absence of evidence and contradicted by the evidence on record; and (11)
when the CA manifestly overlooked certain relevant facts not disputed by the
parties, which, if properly considered, could justify a different conclusion. [17]
The Court finds the present case falling under the second exception for
reasons discussed hereunder.
At the outset, it should be stressed that the question as to whether the deed
of Transfer of Rights and Interest was forged was resolved by the CA when it
affirmed the ruling of the RTC that herein petitioners failed to present clear,
convincing and satisfactory evidence that respondent defrauded Ricardo.
The CA also ruled that there is no evidence on record to show that the
signature of the late Ricardo on the questioned deed is simulated or false.
This matter is not assailed in the present petition.
However, despite having been specifically assigned as an error by petitioners
in their appellant's brief filed with the CA, the appellate court failed to rule on
the question of whether the subject Transfer of Rights and Interest was
executed even before the estate proceedings were closed and terminated.
Anent the first issue, it is necessary to resolve whether the subject property
was still the object of litigation at the time the deed of Transfer of Rights and
Interest in favor of respondent was executed; and if so, whether the same
should be considered null and void for being violative of the provisions of
Article 1491 of the Civil Code.
Article 1491(5) of the Civil Code provides:
1491. The following persons cannot acquire by purchase, even at a public or
judicial auction, either in person or through the mediation of another:
...
(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior
courts, and other officers and employees connected with the administration
of justice, the property and rights in litigation or levied upon an execution
before the court within whose jurisdiction or territory they exercise their
respective functions; this prohibition includes the act of acquiring by
assignment and shall apply to lawyers, with respect to the property and
rights which may be the object of any litigation in which they may take
part by virtue of their profession.
... (emphasis supplied)
In its Decision, the RTC made the following disquisition:
[A]ccording to the evidence for the defendant, a Motion for Termination of
Proceeding and Discharge of the Executor and Bond dated June 20, 1975
was filed in the case, alleging in paragraphs 3 and 5 thereof, that the
executor Angel E. Ordoñez has already turned over to the respective heirs
and devisees all their respective shares in accordance with the Project of
Partition duly approved by the Court. Thereafter, more than one month from
the filing thereof, the Transfer of Rights and Interest was executed on August
20, 1975. Hence, at the time of the execution of the questioned
document, it may be concluded that Special Proceedings No. 7185 had
been terminated. The property in San Juan is no longer the subject of a
litigation and may be alienated by the client to his lawyer as payment of
attorney's fees rendered. (emphasis supplied)
It is clear from the above-quoted ruling of the trial court that its sole basis in
concluding that Special Proceedings No. 7185 had been terminated and that
the subject property is no longer the object of litigation at the time the deed of
Transfer of Rights and Interest was executed on August 20, 1975 is the
allegation of the executor, Angel E. Ordoñez, in his Motion [18] for
Termination of Proceeding and Discharge of the Executor and Bond dated
June 20, 1975, that he had already turned over to the respective heirs and
devisees all their respective shares in accordance with the project of partition
duly approved by the probate court.
The Court finds the trial court's inference to be without sufficient basis. How
can the trial court conclude that Special Proceedings No. 7185 had been
terminated and the subject property no longer the object of litigation when no
evidence was presented to show that when the Transfer of Rights and
Interest was executed, the probate court had already issued an order
declaring the estate proceedings closed and terminated? A thing is said to be
in litigation not only if there is some contest or litigation over it in court, but
also from the moment that it becomes subject to the judicial action of the
judge. [19] In the present case, there is no proof to show that at the time the
deed of Transfer of Rights and Interest was executed, the probate court had
issued an order granting the Motion for Termination of Proceeding and
Discharge of the Executor and Bond. Since the judge has yet to act on the
above-mentioned motion, it follows that the subject property which is the
subject matter of the deed of Transfer of Rights and Interest, is still the object
of litigation, that is Special Proceedings No. 7185.
Furthermore, we agree with the petitioners' undisputed contention that when
the deed of Transfer of Rights and Interest was executed, the title over the
subject lot was still in the name of Adelina Gurrea and that it was only on
October 7, 1980 that the title was transferred in the name of Ricardo. The
rule is that as long as the order for the distribution of the estate has not been
complied with, the probate proceedings cannot be deemed closed and
terminated. [20] The probate court loses jurisdiction of an estate under
administration only after the payment of all the debts and the remaining
estate delivered to the heirs entitled to receive the same. [21] In the present
case, while the subject lot was assigned as Ricardo's share in the project of
partition executed by the heirs of Adelina Gurrea, the title over the subject lot
was still in the name of the latter and was not yet conveyed to Ricardo when
the Transfer of Rights and Interest was executed. As correctly cited by
petitioners, the Court held in Lucero v. Bañaga [22] that:
[t]he term "delivery" or tradition has two aspects: (1) the de jure delivery or
the execution of deeds of conveyance and (2) the delivery of the material
possession (Florendo vs. Foz, 20 Phil. 388, 393). The usual practice is that, if
the land to be delivered is in the name of the decedent, the administrator
executes a deed, conveying the land to the distributee. That deed, together
with the project of partition, the order approving it, the letters of administration
and the certification as to the payment of the estate, inheritance and realty
taxes, is registered in the corresponding Registry of Deeds. Title would then
be issued to the distributee. Thereafter, the administrator or executor places
him in material possession of the land if the same is in the custody of the
former. [23]
It follows that, since at the time of execution of the deed of Transfer of Rights
and Interest, the subject property still formed part of the estate of Adelina,
and there being no evidence to show that material possession of the property
was given to Ricardo, the probate proceedings concerning Adelina's estate
cannot be deemed to have been closed and terminated and the subject
property still the object of litigation.
Having been established that the subject property was still the object of
litigation at the time the subject deed of Transfer of Rights and Interest was
executed, the assignment of rights and interest over the subject property in
favor of respondent is null and void for being violative of the provisions of
Article 1491 of the Civil Code which expressly prohibits lawyers from
acquiring property or rights which may be the object of any litigation in which
they may take part by virtue of their profession.
Article 1409 of the same Code provides, among others, that contracts which
are expressly prohibited or declared void by law are considered inexistent
and void from the beginning.
Anent the second issue, the Court has already held that the said property is
still the object of litigation at the time the subject Manifestation and Transfer
of Rights and Interest were executed and, thus, may not be acquired by
respondent pursuant to the provisions of Article 1491 of the Civil Code.
Considering that the subject Transfer of Rights and Interest is null and void,
the Court no longer finds it necessary to resolve the third issue.
As to the fourth issue, it follows that respondent's title over the subject
property should be cancelled and the property reconveyed to the estate of
Ricardo, the same to be distributed to the latter's heirs. This is without
prejudice, however, to respondent's right to claim his attorney's fees from the
estate of Ricardo, it being undisputed that he rendered legal services for the
latter.
Anent the last issue, the Court is not persuaded by petitioners' prayer for the
grant of attorney's fees in an amount as the Court may determine. The
general rule is that attorney's fees cannot be recovered as part of damages
because no premium should be placed on the right to litigate. [24] Article
2208 of the Civil Code provides that in the absence of stipulation, attorney's
fees and expenses of litigation, other than judicial costs, cannot be
recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his interest;

(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the
plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to
satisfy the plaintiff's plainly valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and
skilled workers;
(8) In actions for indemnity under workmen's compensation and employer's
liability laws;
WHEREFORE, the assailed Decision and Resolution of the Court of Appeals
in CA-G.R. No. CV No. 56210 together with the Decision dated July 5, 1996
of the Regional Trial Court of Pasig City, Branch 268 in Civil Case No. 47543
are REVERSED and SET ASIDE. A new judgment is rendered canceling
Transfer Certificate of Title No. 24474 in the name of respondent Enrique P.
Suplico and reinstating Transfer Certificate of Title No. 24473 in the name of
Ricardo Gurrea.
No pronouncement as to costs.
SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
WE CONCUR:

(9) In a separate civil action to recover civil liability arising from a crime; ARTEMIO V. PANGANIBAN
Associate Justice
(10) When at least double judicial costs are awarded;
CONSUELO YNARES-SANTIAGO ROMEO J. CALLEJO, SR.
(11) In any other case where the court deems it just and equitable that Associate Justice Associate Justice
attorney's fees and expenses of litigation should be recovered.
MINITA V. CHICO-NAZARIO
The Court finds that the present case does not fall under any of the Associate Justice
enumerated exceptions. It is settled that even if a claimant is compelled to
litigate with third persons or to incur expenses to protect its rights, still CERTIFICATION
attorney's fees may not be awarded where no sufficient showing of bad faith
could be reflected in a party's persistence in a case other than an erroneous Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified
conviction of the righteousness of his cause. [25] In the present case, even that the conclusions in the above Decision were reached in consultation
granting that petitioners were compelled to litigate and incur expenses to before the case was assigned to the writer of the opinion of the Court's
protect their interests, attorney's fees may not be awarded in their favor Division.
because there is no sufficient showing that respondent acted in gross and
evident bad faith in refusing to satisfy their claim, in view of his erroneous ARTEMIO V. PANGANIBAN
belief and judgment that he has lawfully acquired the subject property. Chief Justice

As to petitioners' entitlement to other forms of damages, while the complaint

filed by herein petitioners with the trial court contains a general prayer for the
grant of other reliefs, the rule is that evidence should be taken of the
damages claimed and the court should determine who are the persons
entitled to such indemnity. [26] The power of the courts to grant damages and
attorney's fees demands factual, legal and equitable justification; its basis
cannot be left to speculation or conjecture. [27] In the present case, no
allegation, much less, evidence was presented by petitioners to prove that
they are entitled to damages.
 Decision4 dated February 20, 2012 of the Court of Appeals (CA) in CA-G.R.
CEB SP No. 03886.

The Facts

Jesus Delos Santos (Jesus) and Rosita Delos Santos Flores (Rosita) were
the judgment awardees of the two-thirds portion or 9,915 square meters of
four adjoining lots designated as Lots 393-A, 393-B, 394-D and 394-E,
measuring 14,771 sq m, located in Boracay Island, Malay, Aklan. 5 The award
was embodied in the Decision dated April 29, 1996 of the Regional Trial
Court (RTC) of Kalibo, Aklan in the herein Civil Case No. 3683, the fallo of
which reads:

WHEREFORE, in view of the foregoing considerations, judgment is hereby

rendered as follows:
JOEY R. PEÑA, Petitioner,
(1.) Dismissing the complaint filed by the plaintiffs [Vicente Delos Santos, et
al.] as well [as] the complaint in intervention filed by the second set of
vs. intervenors Casimeros, et al. for lack of merit;

(2.) Declaring the two deeds of sale (Exhibits 29 and 30) as null and void
JESUS DELOS SANTOS AND THE HEIRS OF ROSITA DELOS SANTOS insofar as they affect the two-thirds (2/3) share of intervenors Jesus and
[Rosita];
FLORES, Respondents.
(3.) Declaring intervenors Jesus and [Rosita] as the lawful owners of
the two-thirds portion of the land in question or 9,915 square meters on
Present: the northwest portion, representing as their shares in the intestate
estate of Leonardo Delos Santos;

(4.) Declaring defendant Fred Elizalde as the rightful owner of one-third of the
VELASCO, JR., J., Chairperson
land in question or 4,957 square meters on the southeast portion, segregated
PERALTA, by a boundary line running from the seashore to the inland or from the
southwest to northeast;
PEREZ,
REYES, and (5.) Ordering the cancellation or revision of Tax Declaration No. 4422 in the
name of Fred Elizalde (Exhibit 26) and all tax declarations issued subsequent
JARDELEZA, JJ. thereto to conform to paragraphs 3 and 4 hereof as well as the issuance of a
new tax declaration to intervenors Jesus and [Rosita] covering their two-
G.R. No. 202223 | 2016-03-02 thirds (2/3) share;
RESOLUTION
(6.) Ordering the plaintiffs or any persons claiming interest therein to deliver
REYES, J.: complete possession of the land to [Fred and Joan Elizalde] and Jesus and
[Rosita].
This resolves the Motion for Reconsideration 1 of petitioner Joey R. Peña
(Peña) of the Court's Resolution2 dated September 9, 2013 which denied his No pronouncement as to costs.
Petition for Review3 on the ground of lack of reversible error in the assailed
SO ORDERED.6 (Citation omitted and emphasis ours)
The losing parties in the case, Vicente Delos Santos, et al. (plaintiffs) and
Spouses Fred and Joan Elizalde (appellants), appealed the foregoing
judgment to the CA thru petitions separately docketed as CA-G.R. CV No.
54136 and CA-G.R. SP No. 48475, respectively. Both appeals were
dismissed and considered withdrawn in the CA Resolution dated May 11,
1999 upon the appellants' motion to withdraw appeal. In the subsequent CA
Resolution dated January 31, 2000, the motion for reconsideration and
motion to reinstate appeal filed by the plaintiffs were denied for being time-
barred as it was filed nine days late.7
The plaintiffs sought recourse with the Court via a petition for review
on certiorari docketed as G.R. Nos. 141810 and 141812.8 In a Decision dated
February 2, 2007, the Court denied the petition on the ground that the
plaintiffs already lost their right of appeal to the CA when they failed to file an
appellant's brief during the more than 180-day extension. 9The Court
reiterated its ruling in a Resolution dated April 23, 2007, which denied
reconsideration. An Entry of Judgment in the case was forthwith issued. 10
The case was then remanded to the RTC of Kalibo, Aklan for the execution
proceedings during which a Motion for Substitution with a Motion for a Writ of
Execution and Demolition11 dated March 14, 2008 was filed by Peña.
Peña averred that he is the transferee of Jesus and Rosita's adjudged
allotments over the subject lots. He claimed that he bought the same from
Atty. Romeo Robiso (Atty. Robiso) who in turn, acquired the properties from
Jesus and Rosita through assignment and sale as evidenced by the following
documents, viz:
a. Deed of Transfer or Conveyance dated May 4, 2005 transferring 2,000
sq m of Lots No. 394-PT and 393-A to Atty. Robisso;12
b. Deed of Absolute Sale dated May 4, 2005 over the 2,000 sq m of Lots No.
394-PT and 393-A in favor of Atty. Robiso;13
c. Confirmation of Sale and Transfer dated December 5, 2006 affirming the
two foregoing instruments executed by Jesus and Rosita in favor of Atty.
Robiso.14
Atty. Robiso later on sold Lots No. 393-A and 394-D to Peña on December
15, 2006 thru a Deed of Absolute Sale. 15 The tax declarations over the said
portions were subsequently registered in Peña’s name.16
The plaintiffs opposed Peña’s motion claiming that the conveyance made by
Jesus and Rosita in favor of Atty. Robiso was null and void for being a
prohibited transaction because the latter was their counsel in the case.
Apparently, Atty. Robiso by was engaged Jesus and Rosita to be their
counsel in Civil Case No. 3683 by virtue of anAttorney's Agreement and
Undertaking dated July 11, 1998.17 Under the agreement, Atty. Robiso bound
himself to render his legal services in connection with Jesus and Rosita's
involvement as party-litigants in Civil Case No. 3683 and to any proceedings
that may arise in connection therewith before the CA and this Court Atty.
Robiso undertook to advance his own funds for all expenses and costs he
may incur in relation to the case. In consideration thereof, Jesus and Rosita
obliged themselves to give or pay to him as contingent professional fees,
2,000 sq m of any and all lands that the courts will award to them in the case.
Ruling of the RTC
In an Order18 dated June 11, 2008, the RTC partially granted Pena's motion
and ruled that Jesus and Rosita lost their standing in the case upon the
conveyance of their adjudged 2,000 sq m portion in favor of Atty. Ro bi so
whose ownership rights were afterwards acquired by Peña.
The RTC upheld that the conveyance made by Jesus and Rosita in favor of
Atty. Robiso is valid since it was not made during the pendency of litigation
but after judgment has been rendered. The RTC disposed as follows:
WHEREFORE, premises considered, the instant Motion for Substitution and
the Motion for a Writ of Execution and Demolition is partially
granted. Accordingly, it is hereby directed that:
1. Movant Joey Peña is joined with the original party in the First Set of
Intervenors (Jesus and Rosita) in accordance with Section 19, Rule 3 of the
Rules of Court; and
2. A Writ of Execution be issued to implement the Decision dated April 29,
1996.
SO ORDERED.19 (Emphasis in the original)
The writ of execution was issued on July 10, 2008. 20 The RTC denied
reconsideration in an Order dated September 8, 2008. 21
Ruling of the CA
Jesus, together with the heirs of Rosita, elevated the matter to the CA thru a
special civil action for certiorari docketed as CA-G.R. CEB SP No. 03886.
In its Decision22 dated February 20, 2012, the CA reversed the RTC and
ruled that the conveyance made by Jesus and Rosita in favor of Atty. Robiso
was null and void because it is a prohibited transaction under Article 1491(5)
of the Civil Code. When the two Deeds of Sale in favor of Atty. Robiso were
executed on May 4, 2005 and December 5, 2005 and the Confirmation of
Sale on December 15, 2006, the case was still pending with the Supreme
Court, before which Jesus and Rosita were still represented by Atty. Robiso.
Accordingly, the CA decision disposed as follows:
WHEREFORE, the Order dated June 11, 2008, Order dated September 8,
2008, and the Alias Writ of Execution dated July 10, 2008 in Civil Case No.
3683 are hereby ANNULLED and SET ASIDE. The trial court is directed to
cause the execution of the final judgment in favor of [Jesus and the heirs of
Rosita] in this case with dispatch.
SO ORDERED.23
The CA reiterated the foregoing ruling when it denied Pena's motion for
reconsideration in a Resolution24 dated May 24, 2012. Aggrieved, Pena filed
a petition for review on certiorari before the Court. In a Minute
Resolution25 dated September 9, 2013, the Court denied the petition for lack
of reversible error in the assailed CA judgment.
On December 23, 2013, Peña filed a Motion for Reconsideration 26 insisting
that the deeds of conveyance between Atty. Robiso and Jesus and Rosita
were executed long after the decision in Civil Case No. 3683 became final
and executory. Even assuming arguendo that the deeds were void, a
separate action for declaration of their inexistence is necessary because their
terms have already been fulfilled.
Ruling of the Court
The Court denies reconsideration.
The basis of Peña 's motion for substitution is infirm because the lots were
transferred to his predecessor-in-interest, Atty. Robiso, through a prohibited
sale transaction. Article 1491(5) of the Civil Code expressly prohibits lawyers
from acquiring property or rights that may be the object of any litigation in
which they may take part by virtue of their profession, thus:
Art. 1491. The following persons cannot acquire by purchase, even at a
public or judicial auction, either in person or through the mediation of another:
xx xx
(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior
courts, and other officers and employees connected with the administration
of justice, the property and rights in litigation or levied upon an execution
before the court within whose jurisdiction or territory they exercise their
respective functions; this prohibition includes the act of acquiring by
assignment and shall apply to lawyers, with respect to the property rights and
which may be the object of any litigation in which they may take part by virtue
of their profession.
xx xx
A complementary prohibition is also provided in Rule I 0 of the Canons of
Professional Ethics which states:
10. Acquiring interest in litigation.
The lawyer should not purchase any interest in the subject matter of the
litigation which he is conducting.
A property is in litigation if there is a contest or litigation over it in court or
when it is subject of a judicial action. 27Records show that the judicial action
over the subject lots was still in the appellate proceedings stage when they
were conveyed to Jesus and Rosita's counsel, Atty. Robiso. The Deed of
Transfer or Conveyance and the Deed of Absolute Sale both dated May 4,
2005 as well as the Confirmation of Sale and Transfer dated December 5,
2006 were all executed long before the termination of the appellate
proceedings before this Court in G.R. Nos. 141810 and 141812 on February
2, 2007.
Clearly then, since the property conveyed to Atty. Robiso by Jesus and
Rosita was still the object of litigation, the deeds of conveyance executed by
the latter are deemed inexistent. Under Article 1409 of the Code, contracts
which are expressly prohibited or declared void by law are considered
inexistent and void from the beginning. 28 This being so, Atty. Robiso could not
have transferred a valid title in favor of Pena over the lots awarded to Jesus
and Rosita in Civil Case No. 3683. Consequently, Pena has no legal standing
to be substituted in the stead of or joined with Jesus and Rosita as the first
set of intervenors and to move for issuance of a writ of execution in Civil
Case No. 3683.
There is no need to bring a separate action for the declaration of the subject
deeds of conveyance as void. A void or inexistent contract is one which has
no force and effect from the very beginning. Hence, it is as if it has never
been entered into and cannot be validated either by the passage of time or The other issues raised by Peña are merely procedural in nature and are too
by ratification.29 inconsequential to override the fundamental considerations of public policy
underlying the prohibition set forth in Article 1491 (5) of the Civil Code.
The need to bring a separate action for declaration of nullity applies only if
the void contract is no longer fully executory. Contrary to Pena's stance, the WHEREFORE, foregoing considered, the Motion for Reconsideration is
deeds of conveyance made in favor of Atty. Robiso in 2005 cannot be hereby DENIED for lack of merit.
considered as executory because at that time the judgment award ceding the
subject lots to Jesus and Rosita was not yet implemented. A writ of SO ORDERED.
execution30 was issued only on July 10, 2008. "If the void contract is still fully
executory, no party need bring an action to declare its nullity; but if any party BIENVENIDO L. REYES
should bring an action to enforce it, the other party can simply set up the Associate Justice
nullity as a defense.”31
WE CONCUR:
This is notwithstanding the fact that the sale to Atty. Robiso was made
pursuant to a contingency fee contract. It is true that contingent fee PRESBITERO J. VELASCO, JR.
agreements are recognized in this jurisdiction as a valid exception to the Associate Justice
prohibitions under Article 1491(5) of the Civil Code. 32 the Court cannot extend Chairperson
a similar recognition to the present case, however, since the payment to Atty.
Robiso of his contingency fees was made during the pendency of litigation. DIOSDADO M. PERALTA
"A contingent fee contract is an agreement in writing where the fee, often Associate Justice
fixed percentage of what may be recovered in the action, is made to depend
upon the success of the litigation. The payment of the contingent fee is not JOSE PORTUGAL PEREZ
made during the pendency of the litigation involving the client's property but Associate Justice
only after the judgment has been rendered in the case handled by the
lawyer."33 FRANCIS H. JARDELEZA
Associate Justice
Peña cannot rely on Article 1437 34 by claiming that Jesus and Rosita are
already estopped from questioning the validity of their deeds of conveyance ATTESTATION
with Atty. Robiso. Estoppel is a principle in equity and pursuant to Article
1432 it is adopted insofar as it is not in conflict with the provisions of the Civil I attest that the conclusions in the above Resolution had been reached in
Code and other laws. Otherwise speaking, estoppel cannot supplant and consultation before the case was assigned to the writer of the opinion of the
contravene the provision of law clearly applicable to a case. 35 Conversely, it Court's Division.
cannot give validity to an act that is prohibited by law or one that is against
public policy.36 PRESBITERO J. VELASCO, JR.
Associate Justice
The rationale advanced for the prohibition in Article 1491(5) is that public Chairperson
policy disallows the transactions in view of the fiduciary relationship involved,
i.e., the relation of trust and confidence and the peculiar control exercised by CERTIFICATION
these persons. It is founded on public policy because, by virtue of his office,
an attorney may easily take advantage of the credulity and ignorance of his Pursuant to Section 13, Article VIII of the Constitution and the Division
client and unduly enrich himself at the expense of his client. 37 The principle of Chairperson's Attestation, I certify that the conclusions in the above
estoppel runs counter to this policy and to apply it in this case will be Resolution had been reached in consultation before the case was assigned
tantamount to sanctioning a prohibited and void transaction. to the writer of the opinion of the Court's Division.

MARIA LOURDES P.A. SERENO

Chief Justice

BERNARDITA R. MACARIOLA, complainant, vs. HONORABLE ELIAS B.
ASUNCION, Judge of the Court of First Instance of Leyte, respondent.
A.C. No. 133-J | 1982-05-31
EN BANC
DECISION
MAKASIAR, J.:
In a verified complaint dated August 6, 1968 Bernardita R. Macariola charged
respondent Judge Elias B. Asuncion of the Court of First Instance of Leyte,
now Associate Justice of the Court of Appeals, with "acts unbecoming a
judge."
The factual setting of the case is stated in the report dated May 27, 1971 of
then Associate Justice Cecilia Muñoz Palma of the Court of Appeals now
retired Associate Justice of the Supreme Court, to whom this case was
referred on October 28, 1968 for investigation, thus:
"Civil Case No. 3010 of the Court of First Instance of Leyte was a complaint
for partition filed by Sinforosa R. Bales, Luz R. Bakunawa, Anacorita Reyes,
Ruperto Reyes, Adela Reyes, and Priscilla Reyes, plaintiffs, against
Bernardita R. Macariola, defendant, concerning the properties left by the
deceased Francisco Reyes, the common father of the plaintiff and
defendant.
"In her defenses to the complaint for partition, Mrs. Macariola alleged among
other things that: a) plaintiff Sinforosa R. Bales was not a daughter of the
deceased Francisco Reyes; b) the only legal heirs of the deceased were
defendant Macariola, she being the only offspring of the first marriage of
Francisco Reyes with Felisa Espiras, and the remaining plaintiffs who were
the children of the deceased by his second marriage with Irene Ondes; c) the
properties left by the deceased were all the conjugal properties of the latter
and his first wife, Felisa Espiras, and no properties were acquired by the
deceased during his second marriage; d) if there was any partition to be
made, those conjugal properties should first be partitioned into two parts, and
one part is to be adjudicated solely to defendant it being the share of the
latter's deceased mother, Felisa Espiras, and the other half which is the
share of the deceased Francisco Reyes was to be divided equally among his
children by his two marriages.
"On June 8, 1963, a decision was rendered by respondent Judge Asuncion in
Civil Case 3010, the dispositive portion of which reads:
"'IN VIEW OF THE FOREGOING CONSIDERATIONS, the Court, upon a
preponderance of evidence, finds and so holds, and hereby renders
judgment (1) Declaring the plaintiffs Luz R. Bakunawa, Anacorita Reyes,
Ruperto Reyes, Adela Reyes and Priscilla Reyes as the only children
legitimated by the subsequent marriage of Francisco Reyes Diaz to Irene
Ondez; (2) Declaring the plaintiff Sinforosa R. Bales to have been an
illegitimate child of Francisco Reyes Diaz; (3) Declaring Lots Nos. 4474,
4475, 4892, 5265, 4803, 4581, 4506 and 1/4 of Lot 1145 as belonging to the
conjugal partnership of the spouses Francisco Reyes Diaz and Felisa
Espiras; (4) Declaring Lot No. 2304 and 1/4 of Lot No. 3416 as belonging to
the spouses Francisco Reyes Diaz and Irene Ondez in common partnership;
(5) Declaring that 1/2 of Lot No. 1184 as belonging exclusively to the
deceased Francisco Reyes Diaz; (6) Declaring the defendant Bernardita R.
Macariola, being the only legal and forced heir of her mother Felisa Espiras,
as the exclusive owner of one-half of each of Lots Nos. 4474, 4475, 4892,
5265, 4803, 4581, 4506; and the remaining one-half (1/2) of each of said
Lots Nos. 4474, 4475, 4892, 5265, 4803, 4581, 4506 and one-half (1/2) of
one-fourth (1/4) of Lot No. 1154 as belonging to the estate of Francisco
Reyes Diaz; (7) Declaring Irene Ondez to be the exclusive owner of one-half
(1/2) of Lot No. 2304 and one-half (1/2) of one-fourth (1/4) of Lot No. 3416;
the remaining one-half (1/2) of Lot 2304 and the remaining one-half (1/2) of
one fourth (1/4) of Lot No. 3416 as belonging to the estate of Francisco
Reyes Diaz; (8) Directing the division or partition of the estate of Francisco
Reyes Diaz in such a manner as to give or grant to Irene Ondez, as surviving
widow of Francisco Reyes Diaz, a hereditary share of one-twelfth (1/12) of
the whole estate of Francisco Reyes Diaz (Art. 996 in relation to Art. 892, par
2, New Civil Code), and the remaining portion of the estate to be divided
among the plaintiffs Sinforosa R. Bales, Luz R. Bakunawa, Anacorita Reyes,
Ruperto Reyes, Adela Reyes, Priscilla Reyes and defendant Bernardita R.
Macariola, in such a way that the extent of the total share of plaintiff
Sinforosa R. Bales in the hereditary estate shall not exceed the equivalent of
two-fifth (2/5) of the total share of any or each of the other plaintiffs and the
defendant (Art. 983, New Civil Code), each of the latter to receive equal
shares from the hereditary estate, (Ramirez vs. Bautista, 14 Phil. 528;
Diancin vs. Bishop of Jaro, O.G. [3rd Ed.] p. 33); (9) Directing the parties,
within thirty days after this judgment shall have become final to submit to this
court, for approval, a project of partition of the hereditary estate in the
proportion above indicated, and in such manner as the parties may, by
agreement, deemed convenient and equitable to them taking into
consideration the location, kind, quality, nature and value of the properties
involved; (10) Directing the plaintiff Sinforosa R. Bales and defendant
Bernardita R. Macariola to pay the costs of this suit, in the proportion of one-
third (1/3) by the first named and two-thirds (2/3) by the second named; and
(11) Dismissing all other claims of the parties [pp. 27-29 of Exh. C].
"The decision in civil case 3010 became final for lack of an appeal, and on
October 16, 1963, a project of partition was submitted to Judge Asuncion
which is marked Exh. A. Notwithstanding the fact that the project of partition
was not signed by the parties themselves but only by the respective counsel
of plaintiffs and defendant, Judge Asuncion approved it in his Order dated
October 23, 1963, which for convenience is quoted hereunder in full:
'The parties, through their respective counsels, presented to this Court for
approval the following project of partition:
'COMES NOW, the plaintiffs and the defendant in the above-entitled case, to
this Honorable Court respectfully submit the following Project of Partition:
'1. The whole of Lots Nos. 1154, 2304 and 4506 shall belong exclusively to
Bernardita Reyes Macariola;
'2. A portion of Lot No. 3416 consisting of 2,373.49 square meters along the
eastern part of the lot shall be awarded likewise to Bernardita R. Macariola;
'3. Lots Nos. 4803, 4892 and 5265 shall be awarded to Sinforosa Reyes
Bales;
'4. A portion of Lot No. 3416 consisting of 1,834.55 square meters along the
western part of the lot shall likewise be awarded to Sinforosa Reyes-Bales;
'5. Lots Nos. 4474 and 4475 shall be divided equally among Luz Reyes
Bakunawa, Anacorita Reyes, Ruperto Reyes, Adela Reyes and Priscilla
Reyes in equal shares;
'6. Lot No. 1184 and the remaining portion of Lot No. 3416 after taking the
portions awarded under item (2) and (4) above shall be awarded to Luz
Reyes Bakunawa, Anacorita Reyes, Ruperto Reyes, Adela Reyes and
Priscilla Reyes in equal shares, provided, however that the remaining portion
of Lot No. 3416 shall belong exclusively to Priscilla Reyes.
'WHEREFORE, it is respectfully prayed that the Project of Partition indicated
above which is made in accordance with the decision of the Honorable Court
be approved.
'Tacloban City, October 16, 1963.
(SGD) BONIFACIO RAMO
Atty. for theDefendant
Tacloban City
'(SGD) ZOTICO A. TOLETE
Atty. for the Plaintiff
Tacloban City
'While the Court thought it more desirable for all the parties to have signed
this Project of Partition, nevertheless, upon assurance of both counsels of the
respective parties to this Court that the Project of Partition, as above-quoted,
had been made after a conference and agreement of the plaintiffs and the
defendant approving the above Project of Partition, and that both lawyers had
represented to the Court that they are given full authority to sign by
themselves the Project of Partition, the Court, therefore, finding the above-
quoted project of Partition to be in accordance with law, hereby approves the
same. The parties, therefore, are directed to execute such papers,
documents or instrument sufficient in form and substance for the vesting of
the rights, interests and participations which were adjudicated to the
respective parties, as outlined in the Project of Partition and the delivery of
the respective properties adjudicated to each one in view of said Project of
Partition, and to perform such other acts as are legal and necessary to
effectuate the said Project of Partition.
'SO ORDERED.
'Given in Tacloban City, this 23rd day of October, 1963.
'(SGD) ELIAS B. ASUNCION
Judge'
"EXH. B.
"The above Order of October 23, 1963, was amended on November 11,
1963, only for the purpose of giving authority to the Register of Deeds of the
Province of Leyte to issue the corresponding transfer certificates of title to the
respective adjudicatees in conformity with the project of partition (see Exh.
U).
"One of the properties mentioned in the project of partition was Lot 1184 or
rather one-half thereof with an area of 15,162.5 sq. meters. This lot, which
according to the decision was the exclusive property of the deceased
Francisco Reyes, was adjudicated in said project of partition to the plaintiffs
Luz, Anacorita, Ruperto, Adela, and Priscilla all surnamed Reyes in equal
shares, and when the project of partition was approved by the trial court the
adjudicatees caused Lot 1184 to be subdivided into five lots denominated as
Lot 1184-A to 1184-E inclusive (Exh. V).
"Lot 1184-D was conveyed to Enriqueta D. Anota, a stenographer in Judge
Asuncion's court (Exhs. F, F-1 and V-1), while Lot 1184-E which had an area
of 2,172.5556 sq. meters was sold on July 31, 1964 to Dr. Arcadio Galapon
(Exh. 2) who was issued transfer certificate of title No. 2338 of the Register of
Deeds of the city of Tacloban (Exh. 12).
"On March 6, 1965, Dr. Arcadio Galapon and his wife sold a portion of Lot
1184-E with an area of around 1,306 sq. meters to Judge Asuncion and his
wife, Victoria S. Asuncion (Exh. 11), which particular portion was declared by
the latter for taxation purposes (Exh. F).
"On August 31, 1966, spouses Asuncion and spouses Galapon conveyed
their respective shares and interest in Lot 1184-E to 'The Traders
Manufacturing and Fishing Industries Inc.' (Exh. 15 & 16). At the time of said
sale the stockholders of the corporation were Dominador Arigpa Tan, Humilia
Jalandoni Tan, Jaime Arigpa Tan, Judge Asuncion, and the latter's wife,
Victoria S. Asuncion, with Judge Asuncion as the President and Mrs.
Asuncion as the secretary (Exhs. E-4 to E-7). The Articles of Incorporation of
'The Traders Manufacturing and Fishing Industries, Inc.' which we shall
henceforth refer to as 'TRADERS' were registered with the Securities and
Exchange Commission only on January 9, 1967 (Exh. E)" [pp. 378-385,
rec.].
Complainant Bernardita R. Macariola filed on August 9, 1968 the instant
complaint dated August 6, 1968 alleging four causes of action, to wit: [1] that
respondent Judge Asuncion violated Article 1491, paragraph 5, of the New
Civil Code in acquiring by purchase a portion of Lot No. 1184-E which was
one of those properties involved in Civil Case No. 3010 decided by him; [2]
that he likewise violated Article 14, paragraphs 1 and 5 of the Code of
Commerce, Section 3, paragraph H, of R.A. 3019, otherwise known as the
Anti-Graft and Corrupt Practices Act, Section 12, Rule XVIII of the Civil
Service Rules, and Canon 25 of the Canons of Judicial Ethics, by associating
himself with the Traders Manufacturing and Fishing Industries, Inc., as a
stockholder and a ranking officer while he was a judge of the Court of First
Instance of Leyte; [3] that respondent was guilty of coddling an impostor and
acted in disregard of judicial decorum by closely fraternizing with a certain
Dominador Arigpa Tan who openly and publicly advertised himself as a
practising attorney when in truth and in fact his name does not appear in the
Rolls of Attorneys and is not a member of the Philippine Bar; and [4] that
there was a culpable defiance of the law and utter disregard for ethics by
respondent Judge (pp. 1-7, rec.).
Respondent Judge Asuncion filed on September 24, 1968 his answer to
which a reply was filed on October 16, 1968 by herein complainant. In Our
resolution of October 28, 1968, We referred this case to then Justice Cecilia
Muñoz Palma of the Court of Appeals, for investigation, report and
recommendation. After hearing, the said Investigating Justice submitted her
report dated May 27, 1971 recommending that respondent Judge should be
reprimanded or warned in connection with the first cause of action alleged in
the complaint, and for the second cause of action, respondent should be
warned in case of a finding that he is prohibited under the law to engage in
business. On the third and fourth causes of action, Justice Palma
recommended that respondent Judge be exonerated.
The records also reveal that on or about November 9 or 11, 1968 (pp. 481,
477, rec.), complainant herein instituted an action before the Court of First
Instance of Leyte, entitled "Bernardita R. Macariola, plaintiff, versus Sinforosa
R. Bales, et al., defendants," which was docketed as Civil Case No. 4235,
seeking the annulment of the project of partition made pursuant to the
decision in Civil Case No. 3010 and the two orders issued by respondent
Judge approving the same, as well as the partition of the estate and the
subsequent conveyances with damages. It appears, however, that some
defendants were dropped from the civil case. For one, the case against Dr.
Arcadio Galapon was dismissed because he was no longer a real party in
interest when Civil Case No. 4234 was filed, having already conveyed on
March 6, 1965 a portion of lot 1184-E to respondent Judge and on August 31,
1966 the remainder was sold to the Traders Manufacturing and Fishing
Industries, Inc. Similarly, the case against defendant Victoria Asuncion was
dismissed on the ground that she was no longer a real party in interest at the
time the aforesaid Civil Case No. 4234 was filed as the portion of Lot 1184
acquired by her and respondent Judge from Dr. Arcadio Galapon was already
sold on August 31, 1966 to the Traders Manufacturing and Fishing Industries,
Inc. Likewise, the cases against defendants Serafin P. Ramento, Catalina
Cabus, Ben Barraza Go, Jesus Perez, Traders Manufacturing and Fishing
Industries, Inc., Alfredo R. Celestial and Pilar P. Celestial, Leopoldo Petilla
and Remedios Petilla, Salvador Anota and Enriqueta Anota and Atty. Zotico
A. Tolete were dismissed with the conformity of complainant herein, plaintiff
therein, and her counsel.
On November 2, 1970, Judge Jose D. Nepomuceno of the Court of First
Instance of Leyte, who was directed and authorized on June 2, 1969 by the
then Secretary (now Minister) of Justice and now Minister of National
Defense Juan Ponce Enrile to hear and decide Civil Case No. 4234,
rendered a decision, the dispositive portion of which reads as follows:
"A. IN THE CASE AGAINST JUDGE ELIAS B. ASUNCION -
"(1) declaring that only Branch IV of the Court of First Instance of Leyte has
jurisdiction to take cognizance of the issue of the legality and validity of the
Project of Partition [Exhibit "B"] and the two Orders [Exhibits 'C' and 'C-3']
approving the partition;
"(2) dismissing the complaint against Judge Elias B. Asuncion;
"(3) adjudging the plaintiff, Mrs. Bernardita R. Macariola to pay defendant
Judge Elias B. Asuncion,
"(a) the sum of FOUR HUNDRED THOUSAND PESOS [P400,000.00] for
moral damages;
"(b) the sum of TWO HUNDRED THOUSAND PESOS [P200,000.00] for
exemplary damages;
"(c) the sum of FIFTY THOUSAND PESOS [P50,000.00] for nominal
damages; and
"(d) the sum of TEN THOUSAND PESOS [P10,000.00] for Attorney's Fees.
"B. IN THE CASE AGAINST THE DEFENDANT MARIQUITA VILLASIN, FOR
HERSELF AND FOR THE HEIRS OF THE DECEASED GERARDO
VILLASIN -
"(1) Dismissing the complaint against the defendants Mariquita Villasin and
the heirs of the deceased Gerardo Villasin;
"(2) Directing the plaintiff to pay the defendants Mariquita Villasin and the
heirs of Gerardo Villasin the cost of the suit.
"C. IN THE CASE AGAINST THE DEFENDANT SINFOROSA R. BALES, ET
AL., WHO WERE PLAINTIFFS IN CIVIL CASE NO. 3010 -
"(1) Dismissing the complaint against defendants Sinforosa R. Bales, Adela
R. Herrer, Priscilla R. Solis, Luz R. Bakunawa, Anacorita R. Eng and Ruperto
O. Reyes.
"D. IN THE CASE AGAINST DEFENDANT BONIFACIO RAMO -
"(1) Dismissing the complaint against Bonifacio Ramo;
"(2) Directing the plaintiff to pay the defendant Bonifacio Ramo the cost of the
suit.
"SO ORDERED" [pp. 531-533, rec.].
It is further disclosed by the record that the aforesaid decision was elevated
to the Court of Appeals upon perfection of the appeal on February 22, 1971.
I
WE find that there is no merit in the contention of complainant Bernardita R.
Macariola, under her first cause of action, that respondent Judge Elias B.
Asuncion violated Article 1491, paragraph 5, of the New Civil Code in
acquiring by purchase a portion of Lot No. 1184-E which was one of those
properties involved in Civil Case No. 3010.
That Article provides:
"Article 1491. The following persons cannot acquire by purchase, even at a
public or judicial action, either in person or through the mediation of another:
xxx xxx xxx
"(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior
courts, and other officers and employees connected with the administration
of justice, the property and rights in litigation or levied upon an execution
before the court within whose jurisdiction or territory they exercise their
respective functions; this prohibition includes the act of acquiring by
assignment and shall apply to lawyers, with respect to the property and rights
which may be the object of any litigation in which they may take part by virtue
of their profession".
The prohibition in the aforesaid Article applies only to the sale or assignment
of the property which is the subject of litigation to the persons disqualified
therein. WE have already ruled that ". . . for the prohibition to operate, the
sale or assignment of the property must take place during the pendency of
the litigation involving the property" (The Director of Lands vs. Ababa, et al.,
88 SCRA 513, 519 [1979]; Rosario vda. de Laig vs. Court of Appeals, 86
SCRA 641, 646 [1978]).
In the case at bar, when the respondent Judge purchased on March 6, 1965
a portion of Lot 1184-E, the decision in Civil Case No. 3010 which he
rendered on June 8, 1963 was already final because none of the parties
therein filed an appeal within the reglementary period; hence, the lot in
question was no longer subject of the litigation. Moreover, at the time of the
sale on March 6, 1965, respondent's order dated October 23, 1963 and the
amended order dated November 11, 1963 approving the October 16, 1963
project of partition made pursuant to the June 8, 1963 decision, had long
become final for there was no appeal from said orders.
Furthermore, respondent Judge did not buy the lot in question on March 6,
1965 directly from the plaintiffs in Civil Case No. 3010 but from Dr. Arcadio
Galapon who earlier purchased on July 31, 1964 Lot 1184-E from three of the
plaintiffs, namely, Priscilla Reyes, Adela Reyes, and Luz R. Bakunawa after
the finality of the decision in Civil Case No. 3010. It may be recalled that Lot
1184 or more specifically one-half thereof was adjudicated in equal shares to
Priscilla Reyes, Adela Reyes, Luz Bakunawa, Ruperto Reyes and Anacorita
Reyes in the project of partition, and the same was subdivided into five lots
denominated as Lot 1184-A to 1184-E. As aforestated, Lot 1184-E was sold
on July 31, 1964 to Dr. Galapon for which he was issued TCT No. 2338 by
the Register of Deeds of Tacloban City, and on March 6, 1965 he sold a
portion of said lot to respondent Judge and his wife who declared the same
for taxation purposes only. The subsequent sale on August 31, 1966 by
spouses Asuncion and spouses Galapon of their respective shares and
interest in said Lot 1184-E to the Traders Manufacturing and Fishing
Industries, Inc., in which respondent was the president and his wife was the
secretary, took place long after the finality of the decision in Civil Case No.
3010 and of the subsequent two aforesaid orders therein approving the
project of partition.
While it appears that complainant herein filed on or about November 9 or 11,
1968 an action before the Court of First Instance of Leyte docketed as Civil
Case No. 4234, seeking to annul the project of partition and the two orders
approving the same, as well as the partition of the estate and the subsequent
conveyances, the same, however, is of no moment.
The fact remains that respondent Judge purchased on March 6, 1965 a
portion of Lot 1184-E from Dr. Arcadio Galapon; hence, after the finality of the
decision which he rendered on June 8, 1963 in Civil Case No. 3010 and his
two questioned orders dated October 23, 1963 and November 11, 1963.
Therefore, the property was no longer subject of litigation.
The subsequent filing on November 9, or 11, 1968 of Civil Case No. 4234
can no longer alter, change or affect the aforesaid facts - that the questioned
sale to respondent Judge, now Court of Appeals Justice, was effected and
consummated long after the finality of the aforesaid decision or orders.
Consequently, the sale of a portion of Lot 1184-E to respondent Judge having
taken place over one year after the finality of the decision in Civil Case No.
3010 as well as the two orders approving the project of partition, and not
during the pendency of the litigation, there was no violation of paragraph 5,
Article 1491 of the New Civil Code.
It is also argued by complainant herein that the sale on July 31, 1964 of Lot
1184-E to Dr. Arcadio Galapon by Priscilla Reyes, Adela Reyes and Luz R.
Bakunawa was only a mere scheme to conceal the illegal and unethical
transfer of said lot to respondent Judge as a consideration for the approval of
the project of partition. In this connection, We agree with the findings of the
Investigating Justice thus:
"And so we are now confronted with this all-important question whether or
not the acquisition by respondent of a portion of Lot 1184-E and the
subsequent transfer of the whole lot to 'TRADERS' of which respondent was
the President and his wife the Secretary, was intimately related to the Order
of respondent approving the project of partition, Exh. A.
"Respondent vehemently denies any interest or participation in the
transactions between the Reyeses and the Galapons concerning Lot 1184-E,
and he insists that there is no evidence whatsoever to show that Dr. Galapon
had acted, in the purchase of Lot 1184-E, in mediation for him and his wife.
(See p. 14 of Respondent's Memorandum).
xxx xxx xxx
"On this point, I agree with respondent that there is no evidence in the record
showing that Dr. Arcadio Galapon acted as a mere 'dummy' of respondent in
acquiring Lot 1184-E from the Reyeses. Dr. Galapon appeared to this
investigator as a respectable citizen, credible and sincere, and I believe him
when he testified that he bought Lot 1184-E in good faith and for valuable
consideration from the Reyeses without any intervention of, or previous
understanding with Judge Asuncion" (pp. 391-394, rec.).
On the contention of complainant herein that respondent Judge acted illegally
in approving the project of partition although it was not signed by the parties,
We quote with approval the findings of the Investigating Justice, as follows:
"1. I agree with complainant that respondent should have required the
signature of the parties more particularly that of Mrs. Macariola on the project
of partition submitted to him for approval; however, whatever error was
committed by respondent in that respect was done in good faith as according
to Judge Asuncion he was assured by Atty. Bonifacio Ramo, the counsel of
record of Mrs. Macariola, that he was authorized by his client to submit said
project of partition, (See Exh. B and tsn. p. 24, January 20, 1969). While it is
true that such written authority if there was any, was not presented by
respondent in evidence, nor did Atty. Ramo appear to corroborate the
statement of respondent, his affidavit being the only one that was presented
as respondent's Exh. 10, certain actuations of Mrs. Macariola lead this
investigator to believe that she knew the contents of the project of partition,
Exh. A, and that she gave her conformity thereto. I refer to the following
documents:
"1) Exh. 9 - Certified true copy of OCT No. 19520 covering Lot 1154 of the
Tacloban Cadastral Survey in which the deceased Francisco Reyes holds a
'1/4 share' (Exh. 9-a). On this certificate of title the Order dated November 11,
1963, (Exh. U) approving the project of partition was duly entered and
registered on November 26, 1963 (Exh. 9-D);
"2) Exh. 7 - Certified copy of a deed of absolute sale executed by Bernardita
Reyes Macariola on October 22, 1963, conveying to Dr. Hector Decena the
one-fourth share of the late Francisco Reyes-Diaz in Lot 1154. In this deed of
sale the vendee stated that she was the absolute owner of said one-fourth
share, the same having been adjudicated to her as her share in the estate of
her father Francisco Reyes Diaz as per decision of the Court of First Instance
of Leyte under case No. 3010 (Exh. 7-A). The deed of sale was duly
registered and annotated at the back of OCT 19520 on December 3, 1963
(see Exh. 9-e).
"In connection with the abovementioned documents it is to be noted that in
the project of partition dated October 16, 1963, which was approved by
respondent on October 23, 1963, followed by an amending Order on
November 11, 1963, Lot 1154 or rather 1/4 thereof was adjudicated to Mrs.
Macariola. It is this 1/4 share in Lot 1154 which complainant sold to Dr.
Decena on October 22, 1963, several days after the preparation of the
project of partition.
"Counsel for complainant stresses the view, however, that the latter sold her
one-fourth share in Lot 1154 by virtue of the decision in Civil Case 3010 and
not because of the project of partition, Exh. A. Such contention is absurd
because from the decision, Exh. C, it is clear that one-half of one-fourth of
Lot 1154 belonged to the estate of Francisco Reyes Diaz while the other half
of said one-fourth was the share of complainant's mother, Felisa Espiras; in
other words, the decision did not adjudicate the whole of the one-fourth of Lot
1154 to the herein complainant (see Exhs. C-3 & C-4). Complainant became
the owner of the entire one fourth of Lot 1154 only by means of the project of
partition, Exh. A. Therefore, if Mrs. Macariola sold Lot 1154 on October 22,
1963, it was for no other reason than that she was well aware of the
distribution of the properties of her deceased father as per Exhs. A and B. It
is also significant at this point to state that Mrs. Macariola admitted during the
cross-examination that she went to Tacloban City in connection with the sale
of Lot 1154 to Dr. Decena (tsn. p. 92, November 28, 1968) from which we
can deduce that she could not have been kept ignorant of the proceedings in
civil case 3010 relative to the project of partition.
"Complainant also assails the project of partition because according to her
the properties adjudicated to her were insignificant lots and the least
valuable. Complainant, however, did not present any direct and positive
evidence to prove the alleged gross inequalities in the choice and distribution
of the real properties when she could have easily done so by presenting
evidence on the area, location, kind, the assessed and market value of said
properties. Without such evidence there is nothing in the record to show that
there were inequalities in the distribution of the properties of complainant's
father" (pp. 386-389, rec.).
Finally, while it is true that respondent Judge did not violate paragraph 5,
Article 1491 of the New Civil Code in acquiring by purchase a portion of Lot
1184-E which was in litigation in his court, it was, however, improper for him
to have acquired the same. He should be reminded of Canon 3 of the
Canons of Judicial Ethics which requires that: "A judge's official conduct
should be free from the appearance of impropriety, and his personal
behavior, not only upon the bench and in the performance of judicial duties,
but also in his everyday life, should be beyond reproach." And as aptly
observed by the Investigating Justice: ". . . it was unwise and indiscreet on
the part of respondent to have purchased or acquired a portion of a piece of
property that was or had been in litigation in his court and caused it to be
transferred to a corporation of which he and his wife were ranking officers at
the time of such transfer. One who occupies an exalted position in the
judiciary has the duty and responsibility of maintaining the faith and trust of
the citizenry in the courts of justice, so that not only must he be truly honest
and just, but his actuations must be such as not give cause for doubt and
mistrust in the uprightness of his administration of justice. In this particular
case of respondent, he cannot deny that the transactions over Lot 1184-E are
damaging and render his actuations open to suspicion and distrust. Even if
respondent honestly believed that Lot 1184-E was no longer in litigation in his
court and that he was purchasing it from a third person and not from the
parties to the litigation, he should nonetheless have refrained from buying it
for himself and transferring it to a corporation in which he and his wife were
financially involved, to avoid possible suspicion that his acquisition was
related in one way or another to his official actuations in civil case 3010. The
conduct of respondent gave cause for the litigants in civil case 3010, the
lawyers practising in his court, and the public in general to doubt the honesty
and fairness of his actuations and the integrity of our courts of justice" (pp.
395-396, rec.).
II
With respect to the second cause of action, the complainant alleged that
respondent Judge violated paragraphs 1 and 5, Article 14 of the Code of
Commerce when he associated himself with the Traders Manufacturing and
Fishing Industries, Inc. as a stockholder and a ranking officer, said
corporation having been organized to engage in business. Said Article
provides that:
"Article 14 - The following cannot engage in commerce, either in person or by
proxy, nor can they hold any office or have any direct, administrative, or
financial intervention in commercial or industrial companies within the limits
of the districts, provinces, or towns in which they discharge their duties:
"1. Justices of the Supreme Court, judges and officials of the department of
public prosecution in active service. This provision shall not be applicable to
mayors, municipal judges, and municipal prosecuting attorneys nor to those
who by chance are temporarily discharging the functions of judge or
prosecuting attorney.
xxx xxx xxx
"5. Those who by virtue of laws or special provisions may not engage in
commerce in a determinate territory."
It is Our considered view that although the aforestated provision is
incorporated in the Code of Commerce which is part of the commercial laws
of the Philippines, it, however, partakes of the nature of a political law as it
regulates the relationship between the government and certain public officers
and employees, like justices and judges.
Political Law has been defined as that branch of public law which deals with
the organization and operation of the governmental organs of the State and
define the relations of the state with the inhabitants of its territory (People vs.
Perfecto, 43 Phil. 887, 897 [1922]). It may be recalled that political law
embraces constitutional law, law of public corporations, administrative law
including the law on public officers and elections. Specifically, Article 14 of
the Code of Commerce partakes more of the nature of an administrative law
because it regulates the conduct of certain public officers and employees
with respect to engaging in business; hence, political in essence.
It is significant to note that the present Code of Commerce is the Spanish
Code of Commerce of 1885, with some modifications made by the "Comision
de Codificacion de las Provincias de Ultramar," which was extended to the
Philippines by the Royal Decree of August 6, 1888, and took effect as law in
this jurisdiction on December 1, 1888.
Upon the transfer of sovereignty from Spain to the United States and later on
from the United States to the Republic of the Philippines, Article 14 of this
Code of Commerce must be deemed to have been abrogated because
where there is change of sovereignty, the political laws of the former
sovereign, whether compatible or not with those of the new sovereign, are
automatically abrogated, unless they are expressly re-enacted by affirmative
act of the new sovereign.
Thus, We held in Roa vs. Collector of Customs (23 Phil. 315, 330, 311
[1912]) that:
"'By well-settled public law, upon the cession of territory by one nation to
another, either following a conquest or otherwise, . . . those laws which are
political in their nature and pertain to the prerogatives of the former
government immediately cease upon the transfer of sovereignty.' (Opinion,
Atty. Gen., July 10, 1899).
"While municipal laws of the newly acquired territory not in conflict with the
laws of the new sovereign continue in force without the express assent or
affirmative act of the conqueror, the political laws do not. (Halleck's Int. Law,
chap. 34, par. 14). However, such political laws of the prior sovereignty as
are not in conflict with the constitution or institutions of the new sovereign,
may be continued in force if the conqueror shall so declare by affirmative act
of the commander-in-chief during the war, or by Congress in time of
peace. (Ely's Administrator vs. United States, 171 U.S. 220, 43 L. Ed. 142).
In the case of American and Ocean Ins. Cos. vs. 356 Bales of Cotton (1 Pet.
[26 U.S.] 511, 542, 7 L. Ed. 242), Chief Justice Marshall said:
'On such transfer (by cession) of territory, it has never been held that the
relations of the inhabitants with each other undergo any change. Their
relations with their former sovereign are dissolved, and new relations are
created between them and the government which has acquired their territory.
The same act which transfers their country, transfers the allegiance of those
who remain in it; and the law which may be denominated political, is
necessarily changed, although that which regulates the intercourse and
general conduct of individuals, remains in force, until altered by the newly-
created power of the State.'"
Likewise, in People vs. Perfecto (43 Phil. 887, 897 [1922]), this Court stated
that: "It is a general principle of the public law that on acquisition of territory
the previous political relations of the ceded region are totally abrogated."
There appears no enabling or affirmative act that continued the effectivity of
the aforestated provision of the Code of Commerce after the change of
sovereignty from Spain to the United States and then to the Republic of the
Philippines. Consequently, Article 14 of the Code of Commerce has no legal
and binding effect and cannot apply to the respondent, then Judge of the
Court of First Instance, now Associate Justice of the Court of Appeals.
It is also argued by complainant herein that respondent Judge violated
paragraph H, Section 3 of Republic Act No. 3019, otherwise known as the
Anti-Graft and Corrupt Practices Act, which provides that:
"Sec. 3. Corrupt practices of public officers. - In addition to acts or omissions
of public officers already penalized by existing law, the following shall
constitute corrupt practices of any public officer and are hereby declared to
be unlawful:
xxx xxx xxx
"(h) Directly or indirectly having financial or pecuniary interest in any
business, contract or transaction in connection with which he intervenes or
takes part in his official capacity, or in which he is prohibited by the
Constitution or by any law from having any interest."
Respondent Judge cannot be held liable under the aforestated paragraph
because there is no showing that respondent participated or intervened in his
official capacity in the business or transactions of the Traders Manufacturing
and Fishing Industries, Inc. In the case at bar, the business of the corporation
in which respondent participated has obviously no relation or connection with
his judicial office. The business of said corporation is not that kind where
respondent intervenes or takes part in his capacity as Judge of the Court of
First Instance. As was held in one case involving the application of Article 216
of the Revised Penal Code which has a similar prohibition on public officers
against directly or indirectly becoming interested in any contract or business
in which it is his official duty to intervene, "(I)t is not enough to be a public
official to be subject to this crime: it is necessary that by reason of his office,
he has to intervene in said contracts or transactions; and, hence, the official
who intervenes in contracts or transactions which have no relation to his
office cannot commit this crime" (People vs. Meneses, C.A. 40 O.G. 11th
Supp. 134, cited by Justice Ramon C. Aquino; Revised Penal Code, p. 1174,
Vol. II [1976]).
It does not appear also from the records that the aforesaid corporation
gained any undue advantage in its business operations by reason of
respondent's financial involvement in it, or that the corporation benefited in
one way or another in any case filed by or against it in court. It is undisputed
that there was no case filed in the different branches of the Court of First
Instance of Leyte in which the corporation was either party plaintiff or
defendant except Civil Case No. 4234 entitled "Bernardita R. Macariola,
plaintiff, versus Sinforosa O. Bales, et al.," wherein the complainant herein
sought to recover Lot 1184-E from the aforesaid corporation. It must be
noted, however, that Civil Case No. 4234 was filed only on November 9 or
11, 1968 and decided on November 2, 1970 by CFI Judge Jose D.
Nepomuceno when respondent Judge was no longer connected with the
corporation, having disposed of his interest therein on January 31, 1967.
Furthermore, respondent is not liable under the same paragraph because
there is no provision in both the 1935 and 1973 Constitutions of the
Philippines, nor is there an existing law expressly prohibiting members of the
Judiciary from engaging or having interest in any lawful business.
It may be pointed out that Republic Act No. 296, as amended, also known as
the Judiciary Act of 1948, does not contain any prohibition to that effect. As a
matter of fact, under Section 77 of said law, municipal judges may engage in
teaching or other vocation not involving the practice of law after office hours
but with the permission of the district judge concerned.
Likewise, Article 14 of the Code of Commerce which prohibits judges from
engaging in commerce is, as heretofore stated, deemed abrogated
automatically upon the transfer of sovereignty from Spain to America,
because it is political in nature.
Moreover, the prohibition in paragraph 5, Article 1491 of the New Civil Code
against the purchase by judges of a property in litigation before the court
within whose jurisdiction they perform their duties, cannot apply to
respondent Judge because the sale of the lot in question to him took place
after the finality of his decision in Civil Case No. 3010 as well as his two
orders approving the project of partition; hence, the property was no longer
subject of litigation.
In addition, although Section 12, Rule XVIII of the Civil Service Rules made
pursuant to the Civil Service Act of 1959 prohibits an officer or employee in
the civil service from engaging in any private business, vocation, or
profession or be connected with any commercial, credit, agricultural or
industrial undertaking without a written permission from the head of
department, the same, however, may not fall within the purview of paragraph
h, Section 3 of the Anti-Graft and Corrupt Practices Act because the last
portion of said paragraph speaks of a prohibition by the Constitution or law
on any public officer from having any interest in any business and not by a
mere administrative rule or regulation. Thus, a violation of the aforesaid rule
by any officer or employee in the civil service, that is, engaging in private
business without a written permission from the Department Head may not
constitute graft and corrupt practice as defined by law.
On the contention of complainant that respondent Judge violated Section 12,
Rule XVIII of the Civil Service Rules, We hold that the Civil Service Act of
1959 (R.A. No. 2260) and the Civil Service Rules promulgated thereunder,
particularly Section 12 of Rule XVIII, do not apply to the members of the
Judiciary. Under said Section 12: "No officer or employee shall engage
directly in any private business, vocation, or profession or be connected with
any commercial, credit, agricultural or industrial undertaking without a written
permission from the Head of Department . . ."
It must be emphasized at the outset that respondent, being a member of the
Judiciary, is covered by Republic Act No. 296, as amended, otherwise known
as the Judiciary Act of 1948 and by Section 7, Article X, 1973 Constitution.
Under Section 67 of said law, the power to remove or dismiss judges was
then vested in the President of the Philippines, not in the Commissioner of
Civil Service, and only on two grounds, namely, serious misconduct and
inefficiency, and upon the recommendation of the Supreme Court, which
alone is authorized, upon its own motion, or upon information of the
Secretary (now Minister) of Justice to conduct the corresponding
investigation. Clearly, the aforesaid section defines the grounds and
prescribes the special procedure for the discipline of judges.
And under Sections 5, 6 and 7, Article X of the 1973 Constitution, only the
Supreme Court can discipline judges of inferior courts as well as other
personnel of the Judiciary.
It is true that under Section 33 of the Civil Service Act of 1959: "The
Commissioner may, for . . . violation of the existing Civil Service Law and
rules or of reasonable office regulations, or in the interest of the service,
remove any subordinate officer or employee from the service, demote him in
rank, suspend him for not more than one year without pay or fine him in an
amount not exceeding six months' salary." Thus, a violation of Section 12 of
Rule XVIII is a ground for disciplinary action against civil service officers and
employees.
However, judges cannot be considered as subordinate civil service officers or
employees subject to the disciplinary authority of the Commissioner of Civil
Service; for, certainly, the Commissioner is not the head of the Judicial
Department to which they belong. The Revised Administrative Code (Section
89) and the Civil Service Law itself state that the Chief Justice is the
department head of the Supreme Court (Sec. 20, R.A. No. 2260) [1959]); and
under the 1973 Constitution, the Judiciary is the only other or second branch
of the government (Sec. 1, Art. X, 1973 Constitution). Besides, a violation of
Section 12, Rule XVIII cannot be considered as a ground for disciplinary
action against judges because to recognize the same as applicable to them,
would be adding another ground for the discipline of judges and, as
aforestated, Section 67 of the Judiciary Act recognizes only two grounds for
their removal, namely, serious misconduct and inefficiency.
Moreover, under Section 16(i) of the Civil Service Act of 1959, it is the
Commissioner of Civil Service who has original and exclusive jurisdiction
"(T)o decide, within one hundred twenty days, after submission to it, all
administrative cases against permanent officers and employees in the
competitive service, and, except as provided by law, to have final authority to
pass upon their removal, separation, and suspension and upon all matters
relating to the conduct, discipline, and efficiency of such officers and
employees; and prescribe standards, guidelines and regulations governing
the administration of discipline" (emphasis supplied). There is no question
that a judge belong to the non-competitive or unclassified service of the
government as a Presidential appointee and is therefore not covered by the
aforesaid provision. WE have already ruled that ". . . in interpreting Section
16(i) of Republic Act No. 2260, we emphasized that only permanent officers
and employees who belong to the classified service come under the
exclusive jurisdiction of the Commissioner of Civil Service" (Villaluz vs.
Zaldivar, 15 SCRA 710, 713 [1965l, Ang-Angco vs. Castillo, 9 SCRA 619
[1963]).
Although the actuation of respondent Judge in engaging in private business
by joining the Traders Manufacturing and Fishing Industries, Inc. as a
stockholder and a ranking officer, is not violative of the provisions of Article
14 of the Code of Commerce and Section 3(h) of the Anti-Graft and Corrupt
Practices Act as well as Section 12, Rule XVIII of the Civil Service Rules
promulgated pursuant to the Civil Service Act of 1959, the impropriety of the
same is clearly unquestionable because Canon 25 of the Canons of Judicial
Ethics expressly declares that:
"A judge should abstain from making personal investments in enterprises
which are apt to be involved in litigation in his court; and, after his accession
to the bench, he should not retain such investments previously made, longer
than a period sufficient to enable him to dispose of them without serious loss.
It is desirable that he should, so far as reasonably possible, refrain from all
relations which would normally tend to arouse the suspicion that such
relations warp or bias his judgment, or prevent his impartial attitude of mind
in the administration of his judicial duties. . . ."
WE are not, however, unmindful of the fact that respondent Judge and his
wife had withdrawn on January 31, 1967 from the aforesaid corporation and
sold their respective shares to third parties, and it appears also that the
aforesaid corporation did not in anyway benefit in any case filed by or against
it in court as there was no case filed in the different branches of the Court of
First Instance of Leyte from the time of the drafting of the Articles of
Incorporation of the corporation on March 12, 1966, up to its incorporation on
January 9, 1967, and the eventual withdrawal of respondent on January 31,
1967 from said corporation. Such disposal or sale by respondent and his wife
of their shares in the corporation only 22 days after the in corporation of the
corporation, indicates that respondent realized that early that their interest in
the corporation contravenes the aforesaid Canon 25. Respondent Judge and
his wife therefore deserve the commendation for their immediate withdrawal
from the firm after its incorporation and before it became involved in any
court litigation.
III
With respect to the third and fourth causes of action, complainant alleged that
respondent was guilty of coddling an impostor and acted in disregard of
judicial decorum, and that there was culpable defiance of the law and utter
disregard for ethics. WE agree, however, with the recommendation of the
Investigating Justice that respondent Judge be exonerated because the
aforesaid causes of action are groundless, and WE quote the pertinent
portion of her report which reads as follows:
"The basis for complainant's third cause of action is the claim that respondent
associated and closely fraternized with Dominador Arigpa Tan who openly
and publicly advertised himself as a practising attorney (see Exhs. I, I-1 and
J) when in truth and in fact said Dominador Arigpa Tan does not appear in the
Roll of Attorneys and is not a member of the Philippine Bar as certified to in
Exh. K.
action unless it be clearly shown that his social relations beclouded his
official actuations with bias and partiality in favor of his friends" (pp. 403-405,
rec.).
In conclusion, while respondent Judge Asuncion, now Associate Justice of
the Court of Appeals, did not violate any law in acquiring by purchase a
parcel of land which was in litigation in his court and in engaging in business
by joining a private corporation during his incumbency as judge of the Court
of First Instance of Leyte, he should be reminded to be more discreet in his
private and business activities, because his conduct as a member of the
Judiciary must not only be characterized with propriety but must always be
above suspicion.
WHEREFORE, THE RESPONDENT ASSOCIATE JUSTICE OF THE
COURT OF APPEALS IS HEREBY REMINDED TO BE MORE DISCREET
IN HIS PRIVATE AND BUSINESS ACTIVITIES.
SO ORDERED.

The "respondent denies knowing that Dominador Arigpa Tan was an

'impostor' and claims that all the time he believed that the latter was a bona
fide member of the bar. I see no reason for disbelieving this assertion of
respondent. It has been shown by complainant that Dominador Arigpa Tan
represented himself publicly as an attorney-at-law to the extent of putting up
a signboard with his name and the words 'Attorney-at-Law' (Exh. I and I-1) to
indicate his office, and it was but natural for respondent and any person for
that matter to have accepted that statement on its face value.

"Now with respect to the allegation of complainant that respondent is guilty of

fraternizing with Dominador Arigpa Tan to the extent of permitting his wife to
be a godmother of Mr. Tan's child at baptism (Exh. M & M-1), that fact even if
true did not render respondent guilty of violating any canon of judicial ethics
as long as his friendly relations with Dominador A. Tan and family did not
influence his official actuations as a judge where said persons were
concerned. There is no tangible convincing proof that herein respondent
gave any undue privileges in his court to Dominador Arigpa Tan or that the
latter benefitted in his practice of law from his personal relations with
respondent, or that he used his influence, if he had any, on the Judges of the
other branches of the Court to favor said Dominador Tan.

"Of course it is highly desirable for a member of the judiciary to refrain as

much as possible from maintaining close friendly relations with practising
attorneys and litigants in his court so as to avoid suspicion 'that his social or
business relations or friendship constitute an element in determining his
judicial course" (par. 30, Canons of Judicial Ethics), but if a Judge does have
social relations, that in itself would not constitute a ground for disciplinary
 Before this Court is the Petition for Review on Certiorari under Rule 45 of the
Rules of Court dated, April 20, 2015, of petitioner Ramon R. Villarama that
seeks to reverse and set aside the Decision [1] dated March 31, 2014 and the
Resolution[2] dated February 18, 2015 of the Court of Appeals (CA) reversing
the Decision[3] dated May 25, 2011 of the Regional Trial Court (RTC), Branch
100, Quezon City in a case for collection of sum of money with damages.

The facts follow.

Respondent Atty. Clodualdo De Jesus (Atty. De Jesus) and petitioner,

sometime in October 1996, entered into a contract denominated as "Contract
for Legal Services" and "Professional Fees" wherein it was agreed upon that
Atty. De Jesus shall render legal services for petitioner in order for the latter
to take full possession of a property located at No. 19 Jose Escaler St.,
Loyola Heights, Quezon City and the titling of the same property under
petitioner's name; thus, under the heading, "Scope of Legal Work," it reads:

1.1 The main objective in this case is to see to it that the property involved in
this case (a parcel of land located at #19 Jose Escaler St., Loyola Heights,
Quezon City, with an area of 1,754 square meters) shall remain in the
possession and be titled under the name of the Client. [4]

The contract also provides for a provision on Success Fee which reads as
follows:

2.3 Success Fee:

In the event Client is successful in retaining possession and having said

property titled under the name of the Client, Counsel shall be paid ONE
MILLION (1,000,000.00) PESOS.[5]

Thereafter, in conformance to the contract, Atty. De Jesus handled eight (8)

cases that involved petitioner in relation to the property mentioned in the
contract.

To be clear, the subject property was formerly registered in the name of

petitioner's sister, Rita Reyes, and her husband Marcial Reyes. The property
was then sold to Crisantomas Guno. Prudential Bank lent Guno some
RAMON R. VILLARAMA, PETITIONER, VS. ATTY. CLODUALDO C. DE
amount as partial payment for the purchase of the subject property secured
JESUS, RESPONDENT. by a mortgage of the same property. After Guno failed to pay the loan, the
same property was foreclosed by Prudential Bank; thus, the 8 cases handled
G.R. No. 217004 | 2017-04-17 by Atty. De Jesus stemmed from such premise.
DECISION
While acting as lawyer for petitioner, Atty. De Jesus was able to obtain a
favorable judgment by having the Decision of the Metropolitan Trial Court
PERALTA, J.:
(MeTC) of Quezon City in Civil Case No, 43-12872 reversed by the RTC of
Quezon City, Branch 85 in Civil Case No. 43-12872. Petitioner has also
retained, and is still enjoying, the possession of the said property. Atty. De
Jesus was also able to obtain favorable decision for petitioner when the RTC
of Makati City declared him to be the owner of the subject property to the
extent of 70%, the remaining 30% of which was adjudged in favor of
Prudential Bank.
As such, Atty. De Jesus claims that the first condition for the payment of the
success fee, petitioner's retention of possession, had been fulfilled. Thus,
Atty. De Jesus was able to pave the way for the partial fulfillment of the
second condition to the extent of 70% of the property. According to Atty. De
Jesus, what remains to be titled is only the 30% portion of the property from
Prudential Bank. Hence, Atty. De Jesus feels that he is entitled to claim the
success fee provided under the contract for legal services.
Subsequently, Atty. De Jesus stopped rendering legal services to petitioner
after the former drafted the letter offer dated November 30, 2005 stating that
petitioner is offering to buy Prudential Bank's ownership of the 30% portion of
the subject property. Atty. De Jesus further made a formal demand for
petitioner to settle at least 50% of the P1,000,000.00 stipulated in the
contract as success fee.
Petitioner, on the other hand, claims that he has not paid the success fee
because one condition for the payment thereof - the property being titled to
his name has not yet been fulfilled. According to petitioner, he cannot yet
transfer the title of the subject property to his name because there are
pending cases initiated by the Spouses Guno that involves the same
property. Petitioner also avers that there is a Decision of the RTC of Quezon
City, Branch 95, in Civil Case No. Q-52422 annulling Prudential Bank's title
over the property and ordering the reinstatement thereof to the Spouses
Guno. The said decision has already been affirmed by this Court and
attained its finality. However, petitioner still paid Atty. De Jesus the amount of
P100,000.00 after the latter made a demand.
Thus, Atty. De Jesus filed a complaint for the collection of sum of money with
damages with the RTC of Quezon City and, on May 25, 2011, the said court
found in favor of petitioner. The dispositive portion of the Decision reads:
WHEREFORE, premises considered, the complaint is hereby ordered
dismissed for lack of cause of action and prematurity. Likewise dismissed is
the defendant's claim for attorney's fees, moral damages and exemplary
damages.
SO ORDERED.[6]
Atty. De Jesus elevated the case to the CA and, on March 31, 2014, the CA
reversed and set aside the Decision of the RTC, thus:
WHEREFORE, in view of the foregoing premises, the Appeal is PARTIALLY
GRANTED. Accordingly, the Decision dated May 25, 2011 of the Regional
Trial Court of Quezon City, Branch 100 in Civil Case No. Q-06-57463 is
hereby ANNULLED AND SET ASIDE and a new one is entered declaring
Atty. Clodualdo C. De Jesus entitled to fifty percent (50%) of the success fee
as stated in the Contract of Legal Services or FIVE HUNDRED THOUSAND
(Php500,000.00) PESOS. The amount of ONE HUNDRED THOUSAND
PESOS (Php100,000.00) earlier paid to him by Ramon R. Villarama as
advanced payment is ordered deducted therefrom.
SO ORDERED.[7]
His motion for reconsideration having been denied by the CA, petitioner thus
filed the present petition with this Court raising the following Issues:
A. Whether the Court of Appeals is correct in holding that the respondent is
discharged from fulfilling the second condition for the entitlement of the
P1,000,000.00 success fee because the same has been rendered legally
impossible due to the final decision annulling Prudential Bank's title to the
subject property.
B. Whether respondent is entitled to fifty percent (50%) of the success fee
less the P100,000.00 previously paid by the petitioner to respondent. [8]
Petitioner argues that the CA is not correct in discharging Atty. De Jesus from
fulfilling the second condition for the entitlement of the P1,000,000.00
success fee because there is no legal impossibility for the transfer of title to
the property to petitioner. The CA, in its Decision, ruled that due to the facts
of the case and the attendant circumstances, the happening of the second
condition was jeopardized, placed beyond performance, became legally
impossible and manifestly difficult to perform. Petitioner, however, claims that
there were still several remedies that Atty. De Jesus could have utilized in
order to meet the second condition but the latter had given up and
abandoned such task. As such, according to petitioner, Atty. De Jesus is not
entitled to fifty (50%) of the success fee less the P100,000.00 previously paid
by petitioner.
In his Comment[9] dated September 11, 2015, Atty. De Jesus contends that
while it is true that there was no legal impossibility to have the title of the
property transferred to petitioner, it was petitioner upon the advice of his
counsel who refused to pay the value of the 30% equity of the property in the
amount of P1,325,000.00. Thus, the second condition is deemed fulfilled
because petitioner voluntarily prevented its fulfillment. Atty. De Jesus further
asserts that it was only him who secured for petitioner permanent possession
of the property and paved the way for petitioner to get a complete title by
merely paying the 30% equity of the property.
The Rules of Court require that only questions of law should be raised in
petitions filed under Rule 45. [10] This Court is not a trier of facts. It will not
entertain questions of fact as the factual findings of the appellate courts are
"final, binding[,] or conclusive on the parties and upon this [c]ourt" [11] when
supported by substantial evidence.[12] Factual findings of the appellate courts
will not be reviewed nor disturbed on appeal to this Court. [13]
In Cheesman v. Intermediate Appellate Court,[14] this Court distinguished
questions of law from questions of fact, thus:
As distinguished from a question of law-which exists "when the doubt or
difference arises as to what the law is on a certain state of facts" - "there is a
question of fact when the doubt or difference arises as to the truth or the
falsehood of alleged facts;" or when the "query necessarily invites calibration
of the whole evidence considering mainly the credibility of witnesses,
existence and relevancy of specific surrounding circumstances, their relation
to each other and to the whole and the probabilities of the situation." [15]
However, these rules do admit of exceptions.[16] Over time, the exceptions to
these rules have expanded. At present, there are 10 recognized exceptions
that were first listed in Medina v. Mayor Asistio, Jr.:[17]
(1) When the conclusion is a finding grounded entirely on speculation,
surmises or conjectures;
(2) When the inference made is manifestly mistaken, absurd or impossible;
(3) Where there is a grave abuse of discretion;
(4) When the judgment is based on a misapprehension of facts;
(5) When the findings of fact are conflicting;
(6) When the Court of Appeals, in making its findings, went beyond the
issues of the case and the same is contrary to the admissions of both
appellant and appellee;
(7) The findings of the Court of Appeals are contrary to those of the trial
court;
(8) When the findings of fact are conclusions without citation of specific
evidence on which they are based;
(9) When the facts set forth in the petition as well as in the petitioner's main
and reply briefs are not disputed by the respondents; and
(10) The finding of fact of the Court of Appeals is premised on the supposed
absence of evidence and is contradicted by the evidence on record. [18]
In the present case, the findings of facts of the RTC and the CA are
apparently in contrast, hence, this Court deems it proper to rule on the issues
raised in the petition.
After careful consideration, this Court finds the petition unmeritorious.
The payment of the success fee, as contained in the Contract for Legal
Services, is dependent on the fulfillment of two conditions, namely:
1) petitioner retaining possession of the subject property, and
2) the property being titled under the name of petitioner. Clearly, this falls
under a contingent fee contract. In The Conjugal Partnership of the Spouses
Cadavedo v. Lacaya,[19] this Court defined a contingent fee contract as
"anagreement in writing where the fee, often a fixed percentage of what may
be recovered in the action, is made to depend upon the success of the
litigation. Contingent fee contracts are permitted in this jurisdiction because
they redound to the benefit of the poor client and the lawyer "especially in
cases where the client has meritorious cause of action, but no means with
which to pay for legal services unless he can, with the sanction of law, make
a contract for a contingent fee to be paid out of the proceeds of litigation.
Oftentimes, the contingent fee arrangement is the only means by which the
poor clients can have their rights vindicated and upheld." Further, such
contracts are sanctioned by Canon 13 of the Canons of Professional Ethics.
[20]
In this case, it is beyond dispute that the first condition stipulated in the
Contract for Legal Services, through the services of Atty. De Jesus, petitioner
was able to retain possession of the subject property. The second condition,
the transfer of title of the property under the name of petitioner, however, is
yet to be fulfilled. According to the CA, the second condition has been
rendered legally impossible to fulfill or considered manifestly difficult to
perform, thus:
With respect to the second condition, however, the trial court's assessment is
that the same is yet to be fulfilled and Atty. De Jesus' claim is premature. We
disagree.
The facts of the case reveal that the second condition has been rendered
legally impossible to fulfill or considered manifestly difficult to perform. The
trial court failed to take into consideration the manifestation in Villarama's
evidence particularly Exhibit "4" which states that:
On 1 December 1987, [Crisantomas Guno] and his wife filed the complaint Prudential Bank the value of the 30% equity of the property in the amount of
for nullification of defendant Bank's title due to defect in foreclosure P1,325,000.00. Although petitioner insists that it has already taken steps in
proceedings, entitled 'Spouses Crisantomas and Carmelita Guno vs. offering Prudential Bank an amount to settle the issue, this still negates the
Prudential Bank and Trust Company docketed as Civil Case No. Q-52422 in finding of the CA that it is legally impossible for petitioner to transfer the title
the Regional Trial Court Branch 95 of Quezon City. On 18 October 1991, the of the property under his name.
RTC rendered a Decision annulling defendant Bank's Title and ordering the
reinstatement of the spouses Guno's title. The RTC Decision was affirmed on Be that as it may, the fact still remains that petitioner was already awarded
appeal by the Supreme Court and became final and executory on 11 March 70% of the subject property by virtue of the RTC's decision in Civil Case No.
1997. This the Decision which [Crisantomas Guno] seeks to enforce in this 95-973 through the services of Atty. De Jesus. Thus, this Court finds that Atty.
action. De Jesus, as well as every attorney, is entitled to have and receive a just and
reasonable compensation for services performed at the special instance and
It must also be noted that when the terms of the agreement was drafted in request of his client. Once the attorney has performed the task assigned to
1996, the prevailing circumstance then was that the 30% portion of the him in a valid agreement, his compensation is determined on the basis of
property was titled in the name of Prudential Bank. Later, however, spouses what he and the client agreed. [22] In the absence of the written agreement, the
Guno was able to obtain a final and favourable judgment in 1997 ordering the lawyer's compensation shall be based on quantum meruit, which means "as
cancellation of Prudential Bank's title. Spouses Guno has yet to implement much as he deserved."[23] The determination of attorney's fees on the basis
said Decision. Thus, the previous understanding that after Atty. De Jesus of quantum meruit is also authorized "when the counsel, for justifiable
shall have ensured the ownership of Villarama over the 70% portion of the cause, was not able to finish the case to its
property and the latter shall buy the remaining 30% of said property from the conclusion."[24] Moreover, quantum meruitbecomes the basis of recovery of
bank so that Atty. De Jesus can now have it fully titled to Villarama's name compensation by the attorney where the circumstances of the engagement
was also rendered legally impossible because of the final Decision annulling indicate that it will be contrary to the parties' expectation to deprive the
Prudential Bank's title to the subject property. attorney of all compensation. [25] In this case, since respondent was not able
to fulfill one of the conditions provident in the Contract for Legal Services, his
Accordingly, under the foregoing subsequent circumstances, the happening attorney's fees shall be based on quantum meruit.
of the second condition was jeopardized and placed beyond performance
because of these intervening legal developments. Had the trial court been Quantum meruit - literally meaning as much as he deserves - is used as
more circumspect and receptive of the present factual circumstances it would basis for determining an attorney's professional fees in the absence of an
have considered that our laws on contract admit certain exceptions in order express agreement. The recovery of attorney's fees on the basis of quantum
to discharge the obligor from fulfilling the condition when said condition is meruit is a device that prevents an unscrupulous client from running away
rendered beyond performance or it has become so difficult to perform. with the fruits of the legal services of counsel without paying for it and also
avoids unjust enrichment on the part of the attorney himself. An attorney
xxxx must show that he is entitled to reasonable compensation for the effort in
pursuing the client's cause, taking into account certain factors in fixing the
Here, there is no dispute that the legal developments that transpired in the amount of legal fees.[26]
string of cases of Villarama relative to the subject property has rendered the
second condition impossible to perform which factor cannot be attributed to Rule 20.01 of the Code of Professional Responsibility lists the guidelines for
Atty. De Jesus. Thus, the condition should be annulled and excuse atty. De determining the proper amount of attorney's fees, to wit:
Jesus from the obligation of fulfilling the same before he could obtain the
success fee.[21] Rule 20.1 - A lawyer shall be guided by the following factors in determining
his fees:
Upon consideration of the arguments of both parties, this Court finds that the
above-reasoning of the CA is erroneous. There is no legal impossibility in the a) The time spent and the extent of the services rendered or required;
fulfillment of the second condition. There is still a remedy upon which
petitioner may be able to transfer the title of the subject property under his b) The novelty and difficulty of the questions involved;
name. In fact, respondent admitted in his Comment that there was no legal
impossibility and that the only hindrance was the refusal of petitioner to pay c) The importance of the subject matter;
 It must always be remembered that the fact that the practice of law is not a
d) The skill demanded; business and the attorney plays a vital role in the administration of justice
underscores the need to secure him his honorarium lawfully earned as a
e) The probability of losing other employment as a result of acceptance of the means to preserve the decorum and respectability of the legal profession. A
proffered case; lawyer is as much entitled to judicial protection against injustice, imposition or
fraud on the part of his client as the client against abuse on the part of his
f) The customary charges for similar services and the schedule of fees of the counsel. The duty of the court is not alone to see that a lawyer acts in a
IBP chapter to which he belongs; proper and lawful manner; it is also its duty to see that a lawyer is paid his
just fees. With his capital consisting of his brains and with his skill acquired at
g) The amount involved in the controversy and the benefits resulting to the tremendous cost not only in money but in expenditure of time and energy, he
client from the service; is entitled to the protection of any judicial tribunal against any attempt on the
part of his client to escape payment of his just compensation. It would be
h) The contingency or certainty of compensation; ironic if after putting forth the best in him to secure justice for his client he
himself would not get his due.[29]
i) The character of the employment, whether occasional or established; and
WHEREFORE, the Petition for Review on Certiorari under Rule 45 of the
j) The professional standing of the lawyer. Rules of Court, dated April 20, 2015, of petitioner Ramon R. Villarama
is DENIED for lack of merit. Consequently, the Decision dated March 31,
Having established that petitioner is entitled to attorney's fees and that he 2014 and the Resolution dated February 18, 2015 of the Court of Appeals
filed his claim well within the prescribed period, the proper remedy is to are AFFIRMED.
remand the case to the RTC for the determination of the correct amount of
attorney's fees. Such a procedural route, however, would only contribute to SO ORDERED.
the delay of the final disposition of the controversy as any ruling by the trial
court on the matter would still be open for questioning before the CA and this Carpio, (Chairperson), Mendoza, Leonen, and Martires, JJ., concur.
Court. In the interest of justice, this Court deems it prudent to suspend the
rules and simply resolve the matter at this level. [27]

Based on the considerations set forth in Rule 20.01 of the Code of

Professional Responsibility, this Court rules that the CA was correct in its
determination that Atty. De Jesus is entitled to the extent of 50% of the
Php1,000,000.00 success fee stipulated in the contract. As ruled by the CA:

At any rate, Atty. De Jesus cannot claim the entire Php1,000,000.00 success
fee because the fact remains that Villarama has yet to place the entire
subject property to his name. Thus, applying the quantum meruit principle in
this case, Atty. De Jesus is deemed to be entitled only to half of the success
fee for the effort and legal services he had provided to Villarama. xxx

In fine, Villarama, under the Contract of Legal Services, is obliged to pay Atty.
De Jesus his success fee to a fair and reasonable extent of 50% or
Php500,000.00 considering the latter's substantial performance of his part of
the contract. The previous payment made by Villarama in the amount of
Php100,000.00 shall be considered as an advanced payment deductible
from the Php500,000.00 of which Atty. De Jesus is entitled. [28]