SECOND DIVISION
[G.R. No. 127540. October 17, 2001]
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.
SYLLABUS
Courts; Judges; Judgments; 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.—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. After all, he could utilize and rely on the records of the case,
including the transcripts of testimonies heard by the former presiding judge.
Actions; Pleadings and Practice; Certification Against Forum-Shopping; Where
the petitioners attached the certification against forum-shopping in the copy intended
for the Supreme Court, the same constitutes substantial compliance.—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.
Appeals; While the issues raised in a petition might appear to be mainly factual,
the petition may properly be given due course where there are contradictory findings of
the trial court and the Court of Appeals.—While the issues raised in this petition might
appear to be mainly factual, this petition is properly given due course because of the
contradictory 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. 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.
Sales; The alleged vendor’s continued possession of the property throws an
inverse implication, a serious doubt on the due execution of the deed of sale.—
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. 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. These circumstances, taken
together, militate against unguarded acceptance of the due execution and genuineness
of the alleged deed of sale.
Same; Consideration is the “why” of a contract, the essential reason which moves
the contracting parties to enter into the contract.—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. On record, there is
unrebutted testimony that Paulina as landowner was financially well off. She loaned
money to several people. 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.
Same; Contracts; Capacity; The general rule is that a person is not incompetent
to contract merely because of advanced years or by reason of physical infirmities, but
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.—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. 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.
PETITION for review on certiorari of a decision of the Court of Appeals.
DECISION
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 Rigonan did not sell her properties to
anyone. As her nearest surviving kin 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 Paulinas 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 Paulinas close relative. Their fathers
were first cousins. However, he could not recall the name of Paulinas 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 (plaintiffs) 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 Paulinas 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 office, but he could
not explain why this was so.
Zosima Domingo testified that her husband, Eugenio Domingo, was Paulinas
nephew. Paulina was a first cousin of Eugenios father. She also said that 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 when she was hospitalized prior
to her death. She stated that Paulina was never badly in need of money during her
lifetime.
On March 23, 1994, the trial court rendered judgment in favor of defendants (now
the petitioners). It disposed:
WHEREFORE, premises considered, judgment is hereby rendered in favor of
defendants and against the plaintiffs, and as prayed for, the Amended Complaint is
hereby DISMISSED.
Defendants are hereby declared, by virtue of intestate succession, the lawful owners
and possessors of the house including the bodega and the three (3) parcels of land in
suit and a Decree of Registration adjudicating the ownership of the said properties to
defendants is hereby issued.
The alleged deed of sale (Exhs. A, A-1, 1 and 1-a) is hereby declared null and void and
fake and the prayer for the issuance of a writ of preliminary injunction is hereby denied.
Plaintiffs are hereby ordered to pay defendants:
a) P20,000.00 as moral damages;
b) P10,000.00 as exemplary damages;
c) P10,000.00 attorneys fees and other litigation expenses.
No pronouncement as to costs.[4]
Private respondents herein appealed to the Court of Appeals.
On August 29, 1996, the CA reversed the trial courts decision, thus:
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.
Costs against the defendants-appellees.[5]
Hence, this petition assigning the following as errors:
I
THE RESPONDENT COURT OF APPEALS HAS DECIDED
QUESTIONS OF LEGAL SUBSTANCE AND SIGNIFICANCE NOT IN
ACCORDANCE WITH THE EVIDENCE, LAW AND WITH THE
APPLICABLE DECISIONS OF THIS HONORABLE COURT.
II
THAT THE FINDINGS OF RESPONDENT COURT OF APPEALS ARE
CONTRARY TO THOSE OF THE TRIAL COURT AND CLEARLY
VIOLATES THE RULE THAT THE 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.
III
THAT THE FINDINGS AND CONCLUSIONS OF RESPONDENT
COURT OF APPEALS ARE GROUNDED ENTIRELY ON
SPECULATIONS, SURMISES, CONJECTURES, OR ON
INFERENCES MANIFESTLY MISTAKEN.
IV
THAT THE RESPONDENT COURT OF APPEALS MANIFESTLY
OVERLOOKED CERTAIN RELEVANT FACTS NOT DISPUTED BY
THE PARTIES AND WHICH, IF PROPERLY CONSIDERED, WOULD
JUSTIFY A DIFFERENT CONCLUSION.
V be dismissed for it lacks a certification against forum-shopping. Nonetheless, even
THAT THE FINDINGS OF FACT OF RESPONDENT COURT OF
APPEALS ARE PREMISED ON SUPPOSED ABSENCE OF EVIDENCE
BUT IS CONTRADICTED BY THE EVIDENCE ON RECORD THUS
CONSTITUTES GRAVE ABUSE OF DISCRETION.[6]
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 documents 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.
Tagatags (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, Paulinas housekeeper, who said that she did not see
Atty. Tagatag, Juan Franco and Efren Sibucao in Paulinas house on the alleged date
of the deeds 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
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 sellers 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 Courts 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 courts
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 Paulinas 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. Tagatags, was not presented and his affidavit was withdrawn from
the court,[15]leaving only Atty. Tagatags 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 deeds
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 Paulinas 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 buyers
immediate possession and occupation of the property was deemed corroborative of the
truthfulness and authenticity of the deed of sale. The alleged vendors 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 houses
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 courts 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
REVERSEDand 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.
[1]
Rollo, pp. 4-30.
[2]
Id. at 34-44.
[3] Also spelled as Tagatac.
[4] Rollo, p. 72.
[5] Id. at 43-44.
[6] Id. at 6-7.
[7] Records, Civil Case No. 582-17, pp. 108-109.
[8] Decision penned by Judge Ariston Rubio, Rollo, p. 67.
[9] Rollo, p. 22.
[10] Ayco vs. Fernandez, 195 SCRA 328, 333 (1991).
[11] Philippine Coconut Authority vs. Corona International, Inc., G.R. No. 139910,
September 29, 2000, p. 8.
[12] Medel vs. People, G.R. No. 137143, December 8, 2000, p. 7.
[13] Records, p. 101.
[14] TSN, July 6, 1978, pp. 5-26.
[15] TSN, January 15, 1981, p. 26.
[16] TSN, August 22, 1979, p. 19.
[17] Records, pp. 19 and 112.
[18] Id. at 19.
[19] Id. at 108, 109 and 112.
[20] Id. at 112.
[21] Records for Cadastral Case for lot no. 949, p. 138.
[22] TSN, August 22, 1979, p. 23.
[23] Records, pp. 94 and 100.
[24] TSN, August 22, 1979, p.14.
[25] Villamor vs. Court of Appeals, 202 SCRA 607, 615 (1991).
[26] Records, p. 139.
[27] Loyola, et al. vs. Court of Appeals, G.R. No. 115734, February 23, 2000, p. 8.
[28] Decision, p. 11; CA Rollo, p. 89; Rollo, p. 71.
EN BANC
G.R. No. L-15113 January 28, 1961
ANTONIO MEDINA, petitioner,
vs.
COLLECTOR OF INTERNAL REVENUE and THE COURT OF TAX
APPEALS respondents.
Eusebio D. Morales for petitioner.
Office of the Solicitor General for respondents.
SYLLABUS
1. TAXATION; SALES TAX; SALES BETWEEN HUSBAND AND WIFE VOID; SALES
MADE BY WIFE TO THIRD PERSON DEEMED ORIGINAL AND TAXABLE. —
Contracts violative of the provisions of Article 1490 of the Civil Code are null and void
(Uy Sui Pin vs. Cantollas, 70 Phil. 55; Uy Coque vs. Sioca, 45 Phil., 43), and the sales
made by the petitioner to his wife being void, the sales made by the latter are deemed
the original sales subject to tax.
2. ID.; EVIDENCE; ILLEGALLY SEIZED DOCUMENTS ADMISSIBLE IN EVIDENCE.
— Illegally obtained documents and papers are admissible in evidence if they are found
to be competent and relevant to the case (see Wong & Lee vs. Collector of Internal
Revenue, 104 Phil., 469; 55 Off. Gaz., [51] 10539).
3. ID.; BOOKS OF ACCOUNT; WHO MAY REQUIRE THEIR PRODUCTION. — The
Collector of Internal Revenue or any officer and agents thereof could require the
production of books or accounts and other records from a taxpayer.
4. ID.; COLLECTOR OF INTERNAL REVENUE AN INTERESTED PARTY IN ALL
TAXABLE TRANSACTIONS. — The Collector of Internal Revenue is always an
interested party in all matters involving taxable transactions and may question their
validity or legitimacy whenever necessary to block tax evasion.
REYES, J.B.L. J.:
Petition to review a decision of the Court of Tax Appeals upholding a tax assessment
of the Collector of Internal Revenue except with respect to the imposition of so-called
compromise penalties, which were set aside.
The records show that on or about May 20, 1944, petitioning taxpayer Antonio Medina
married Antonia Rodriguez. Before 1946, the spouses had neither property nor
business of their own. Later, however, petitioner acquired forest, concessions in the
municipalities of San Mariano and Palanan in the Province of Isabela. From 1946 to
1948, the logs cut and removed by the petitioner from his concessions were sold to
different persons in Manila through his agent, Mariano Osorio.
Some time in 1949, Antonia R. Medina, petitioner's wife, started to engage in business
as a lumber dealer, and up to around 1952, petitioner sold to her almost all the logs
produced in his San Mariano, concession. Mrs. Medina, In turn, sold in Manila the logs
bought from her husband through the same agent, Mariano Osorio. The proceeds were,
upon instructions from petitioner, either received by Osorio for petitioner or deposited
by said agent in petitioner's current account with the Philippine National Bank.
On the thesis that the sales made by petitioner to his wife were null and void pursuant
to the provisions of Article 1490 of the Civil Code of the Philippines (formerly, Art. 1458,
Civil Code of 1889), the Collector considered the sales made by Mrs. Medina as the
petitioner's original sales taxable under Section 186 of the National Internal Revenue
Code and, therefore, imposed a tax assessment on petitioner, calling for the payment
of P4,553.54 as deficiency sales taxes and surcharges from 1949 to 1952. This same
assessment of September 26, 1953 sought also the collection of another sum of
P643.94 as deficiency sales tax and surcharge based on petitioner's quarterly returns
from 1946 to 1952.
On November 30, 1953, petitioner protested the assessment; however, respondent
Collector insisted on his demand. On July 9, 1954, petitioner filed a petition for
reconsideration revealing for the first time the existence of an alleged premarital
agreement of complete separation of properties between him and his wife, and
contending that the assessment for the years 1946 to 1952 had already prescribed.
After one hearing, the Conference Staff of the Bureau of Internal Revenue eliminated
the 50% fraud penalty and held that the taxes assessed against him before 1948 had
already prescribed. Based on these findings, the Collector issued a modified
assessment, demanding the payment of only P3,325.68, computed as follows:
5% tax due on P7,209.83 -1949 P 360.49
5% tax due on 16,945.55 - 1950 847.28
5% tax due on 16,874.52 - 1951 843.75
5% tax due on 11,009.94 - 1952 550.50
TOTAL sales tax due P2,602.0
25% Surcharge thereon 650.51
Short taxes per quarterly returns, 3rd quarter, 1950 58.52
25% Surcharge thereon 14.63
TOTAL AMOUNT due & collectible P3,325.68
Petitioner again requested for reconsideration, but respondent Collector, in his letter of
April 4, 1955, denied the same.
Petitioner appealed to the Court of Tax Appeals, which rendered judgment as aforesaid.
The Court's decision was based on two main findings, namely, (a) that there was no
premarital agreement of absolute separation of property between the Medina spouse;
and (b) assuming that there was such an agreement, the sales in question made by
petitioner to his wife were fictitious, simulated, and not bona fide.
In his petition for review to this Court, petitioner raises several assignments of error
revolving around the central issue of whether or not the sales made by the petitioner to
his wife could be considered as his original taxable sales under the provisions of
Section 186 of the National Internal Revenue Code.
Relying mainly on testimonial evidence that before their marriage, he and his wife
executed and recorded a prenuptial agreement for a regime of complete separation of
property, and that all trace of the document was lost on account of the war, petitioner
imputes lack of basis for the tax court's factual finding that no agreement of complete
separation of property was ever executed by and between the spouses before their
marriage. We do not think so. Aside from the material inconsistencies in the testimony
of petitioner's witnesses pointed out by the trial court, the circumstantial evidence is
against petitioner's claim. Thus, it appears that at the time of the marriage between
petitioner and his wife, they neither had any property nor business of their own, as to
have really urged them to enter into the supposed property agreement. Secondly, the
testimony that the separation of property agreement was recorded in the Registry of
Property three months before the marriage, is patently absurd, since such a prenuptial
agreement could not be effective before marriage is celebrated, and would
automatically be cancelled if the union was called off. How then could it be accepted
for recording prior to the marriage? In the third place, despite their insistence on the
existence of the ante nuptial contract, the couple, strangely enough, did not act in
accordance with its alleged covenants. Quite the contrary, it was proved that even
during their taxable years, the ownership, usufruct, and administration of their
properties and business were in the husband. And even when the wife was engaged in
lumber dealing, and she and her husband contracted sales with each other as
aforestated, the proceeds she derived from her alleged subsequent disposition of the
logs — incidentally, by and through the same agent of her husband, Mariano Osorio —
were either received by Osorio for the petitioner or deposited by said agent in
petitioner's current account with the Philippine National Bank. Fourth, although
petitioner, a lawyer by profession, already knew, after he was informed by the Collector
on or about September of 1953, that the primary reason why the sales of logs to his
wife could not be considered as the original taxable sales was because of the express
prohibition found in Article 1490 of the Civil Code of sales between spouses married
under a community system; yet it was not until July of 1954 that he alleged, for the first
time, the existence of the supposed property separation agreement. Finally, the Day
Book of the Register of Deeds on which the agreement would have been entered, had
it really been registered as petitioner insists, and which book was among those saved
from the ravages of the war, did not show that the document in question was among
those recorded therein.
We have already ruled that when the credibility of witnesses is the one at issue, the trial
court's judgment as to their degree of credence deserves serious consideration by this
Court (Collector vs. Bautista, et al., G.R. Nos. L-12250 & L-12259, May 27, 1959). This
is all the more true in this case because not every copy of the supposed agreement,
particularly the one that was said to have been filed with the Clerk of Court of Isabela,
was accounted for as lost; so that, applying the "best evidence rule", the court did right
in giving little or no credence to the secondary evidence to prove the due execution and
contents of the alleged document (see Comments on the Rules of Court, Moran, 1957
Ed., Vol. 3, pp. 10.12).
The foregoing findings notwithstanding, the petitioner argues that the prohibition to sell
expressed under Article 1490 of the Civil Code has no application to the sales made by
said petitioner to his wife, because said transactions are contemplated and allowed by
the provisions of Articles 7 and 10 of the Code of Commerce. But said provisions merely
state, under certain conditions, a presumption that the wife is authorized to engage in
business and for the incidents that flow therefrom when she so engages therein. But
the transactions permitted are those entered into with strangers, and do not constitute
exceptions to the prohibitory provisions of Article 1490 against sales between spouses.
Petitioner's contention that the respondent Collector can not assail the questioned
sales, he being a stranger to said transactions, is likewise untenable. The government,
as correctly pointed out by the Tax Court, is always an interested party to all matters
involving taxable transactions and, needless to say, qualified to question their validity
or legitimacy whenever necessary to block tax evasion.
Contracts violative of the provisions of Article 1490 of the Civil Code are null and void
(Uy Sui Pin vs. Cantollas, 70 Phil. 55; Uy Coque vs. Sioca 45 Phil. 43). Being void
transactions, the sales made by the petitioner to his wife were correctly disregarded by
the Collector in his tax assessments that considered as the taxable sales those made
by the wife through the spouses' common agent, Mariano Osorio. In upholding that
stand, the Court below committed no error.
It is also the petitioner's contention that the lower court erred in using illegally seized
documentary evidence against him. But even assuming arguendo the truth of
petitioner's charge regarding the seizure, it is now settled in this jurisdiction that illegally
obtained documents and papers are admissible in evidence, if they are found to be
competent and relevant to the case (see Wong & Lee vs. Collector of Internal Revenue,
G.R. No. L-10155, August 30, 1958). In fairness to the Collector, however, it should be
stated that petitioner's imputation is vehemently denied by him, and relying on Sections
3, 9, 337 and 338 of the Tax Code and the pertinent portions of Revenue Regulations
No. V-1 and citing this Court's ruling in U.S. vs. Aviado, 38 Phil. 10, the Collector
maintains that he and other internal revenue officers and agents could require the
production of books of accounts and other records from a taxpayer. Having arrived at
the foregoing conclusion, it becomes unnecessary to discuss the other issues raised,
which are but premised on the assumption that a premarital agreement of total
separation of property existed between the petitioner and his wife.
WHEREFORE, the decision appealed from is affirmed, with costs against the
petitioner.
Padilla, Bautista Angelo, Labrador, Barrera, Gutierrez David and Dizon, JJ., concur.
Separate Opinions
CONCEPCION, J., concurring:
I concur in the result. I do not share the view that documents and papers illegally
obtained are admissible in evidence, if competent and relevant to the case. In this
connection, I believe in the soundness of the following observations of the Supreme
Court of the United States in Weeks v. United States (232 US 383, 58 L. ed. 652, 34 S.
Ct. 341):1
The effect of the Fourth Amendment is to put the courts of the United States
and Federal officials, in the exercise of their power and authority, under
limitations and restraints as to the exercise of such power and authority, an to
forever secure the people, their persons, houses, papers, and effects against
all unreasonable searches and seizures under the guise of law. This
protection reaches all alike, whether accused of crime or not, and the duty of
giving to it force and effect is obligatory upon all entrusted under our Federal
system with the enforcement of the laws. The tendency of those who execute
the criminal laws of the country to obtain conviction by means of unlawful
seizures and enforced confessions, the latter often obtained after subjecting
accused persons to unwarranted practices destructive of rights secured by the
Federal Constitution, should find no sanction in the judgments of the courts
which are charged at all times with the support of the Constitution and to which
people of all conditions have a right to appeal for the maintenance of such
fundamental rights.
xxx xxx xxx
If letters and private documents can thus be seized and held and used in
evidence, against a citizen accused of an offense, the protection of the Fourth.
Amendment declaring his right to be secured against such searches and
 seizures is of no value, and, so far as those thus placed are concerned well
be stricken from the Constitution. The efforts of the courts and their officials to
bring the guilty to punishment, praiseworthy as they are, are not to be aided
by the sacrifice of those great principles established by years of endeavor and
suffering which have resulted in their embodiment in the fundamental law of
the land." as applied and amplified in Elkins v. United States (June 27, 1960),
4 L. ed. 1669.
Footnotes
1See also Silverthorne Lumber Co. v. United States, 251 US 385, 64 L. ed.
319, 40 Ct. 182, 24 ALR 1426; Gouled v. United States, 255 US 298, 65 L.
ed. 647, 41 S. Ct. 261; Amos v. United States, 255 US 313, 65 L. ed. 654, 41
S. Ct. 266; Agello v. United States, 269 US 20, 70 L. ed. 145, 46 S. Ct. 4, 51
ALR 409; Go Bart Importing Co. v. United States, 282 US 344, 75 L. ed. 374,
51 S. Ct. 153; Grau v. United States, 287 US 124, 77 L. ed. 212, 53 S. Ct. 38;
McDonald v. United States, 335 US 451, 93 L. ed. 153, 69 S. Ct. 191; United
States, v. Jeffers 342 US 48, 96 L. ed. 59, 72 S. Ct 93.
EN BANC
[G.R. No. L-28771. March 31, 1971.]
CORNELIA MATABUENA, Plaintiff-Appellant, v. PETRONILA
CERVANTES, Defendant-Appellee.
Alegre, Roces, Salazar & Sañez, for Plaintiff-Appellant.
Fernando Gerona, Jr., for Defendant-Appellee.
SYLLABUS
1. CIVIL LAW; PROPERTY RELATIONS BETWEEN HUSBAND AND WIFE;
DONATIONS BY REASON OF MARRIAGE; PROHIBITION AGAINST DONATION
BETWEEN SPOUSES DURING MARRIAGE; APPLICABLE TO COMMON LAW
RELATIONSHIP. — While Art. 133 of the Civil Code considers as void a "donation
between the spouses during the marriage", policy considerations of the most exigent
character as well as the dictates of morality require that the same prohibition should
apply to a common-law relationship. A 1954 Court of Appeals decision Buenaventura
v. Bautista, (50 O.G. 3679) interpreting a similar provision of the old Civil Code speaks
unequivocally. If the policy of the law is, in the language of the opinion of the then
Justice J.B.L. Reyes of that Court, "to prohibit donations in favor of the other consort
and his descendants because of fear of undue and improper pressure and influence
upon the donor, a prejudice deeply rooted in our ancient law; ‘porque no se engañen
despojandose el uno al otro por amor que han de consuno,’ [according to] the Partidas
(Part. IV, Tit. Xl, LAW IV), reiterating the rationale ‘Ne mutuato amore invicem
spoliarentur’ of the Pandects (Bk 24, Tit. I, De donat, inter virum et uxorem); then there
is every reason to apply the same prohibitive policy to persons living together as
husband and wife without benefit of nuptials. For it is not to be doubted that assent to
such irregular connection for thirty years bespeaks greater influence of one party over
the other, so that the danger that the law seeks to avoid is correspondingly increased.
Moreover, as already pointed out by Ulpian (in his lib. 32 ad Sabinum, fr. 1), it would
not be just that such donations should subsist lest the condition of those who incurred
guilt should turn out to be better. So long as marriage remains the cornerstone of our
family law, reason and morality alike demand that the disabilities attached to marriage
should likewise attach to concubinage.
2. ID.; SUCCESSION; INTESTATE SUCCESSION; SURVIVING SPOUSE; RULE
WHERE A SISTER SURVIVES WITH THE WIDOW. — The lack of validity of the
donation made b~ the deceased to defendant Petronila Cervantes does not necessarily
result in plaintiff having exclusive right to the disputed property. Prior to the death of
Felix Matabuena, the relationship between him and the defendant was legitimated by
their marriage on March 28. 1962. She is therefore his widow. As provided in the Civil
Code, she is entitled to one-half of the inheritance and the plaintiff, as the surviving
sister to the other half.
DECISION
FERNANDO, J.:
A question of first impression is before this Court in this litigation. We are called upon
to decide whether the ban on a donation between the spouses during a marriage
applies to a common-law relationship. 1 The plaintiff, now appellant Cornelia
Matabuena, a sister to the deceased Felix Matabuena, maintains that a donation made
while he was living maritally without benefit of marriage to defendant, now appellee
Petronila Cervantes, was void. Defendant would uphold its validity. The lower court,
after noting that it was made at a time before defendant was married to the donor,
sustained the latter’s stand. Hence this appeal. The question, as noted, is novel in
character, this Court not having had as yet the opportunity of ruling on it. A 1954
decision of the Court of Appeals, Buenaventura v. Bautista, 2 by the then Justice J. B.
L. Reyes, who was appointed to this Court later that year, is indicative of the appropriate
response that should be given. The conclusion reached therein is that a donation
between common-law spouses falls within the prohibition and is "null and void as
contrary to public policy." 3 Such a view merits fully the acceptance of this Court. The
decision must be reversed.
In the decision of November 23, 1965, the lower court, after stating that in plaintiff’s
complaint alleging absolute ownership of the parcel of land in question, she specifically
raised the question that the donation made by Felix Matabuena to defendant Petronila
Cervantes was null and void under the aforesaid article of the Civil Code and that
defendant on the other hand did assert ownership precisely because such a donation
was made in 1956 and her marriage to the deceased did not take place until 1962,
noted that when the case was called for trial on November 19, 1965, there was
stipulation of facts which it quoted. 4 Thus: "The plaintiff and the defendant assisted by
their respective counsels, jointly agree and stipulate: (1) That the deceased Felix
Matabuena owned the property in question; (2) That said Felix Matabuena executed a
Deed of Donation inter vivos in favor of Defendant, Petronila Cervantes over the parcel
of land in question on February 20, 1956, which same donation was accepted by
defendant; (3) That the donation of the land to the defendant which took effect
immediately was made during the common law relationship as husband and wife
between the defendant-done and the now deceased donor and later said donor and
done were married on March 28, 1962; (4) That the deceased Felix Matabuena died
intestate on September 13, 1962; (5) That the plaintiff claims the property by reason of
being the only sister and nearest collateral relative of the deceased by virtue of an
affidavit of self-adjudication executed by her in 1962 and had the land declared in her
name and paid the estate and inheritance taxes thereon’" 5
The judgment of the lower court on the above facts was adverse to plaintiff. It reasoned
out thus: "A donation under the terms of Article 133 of the Civil Code is void if made
between the spouses during the marriage. When the donation was made by Felix
Matabuena in favor of the defendant on February 20, 1956, Petronila Cervantes and
Felix Matabuena were not yet married. At that time they were not spouses. They
became spouses only when they married on March 28, 1962, six years after the deed
of donation had been executed." 6
We reach a different conclusion. While Art. 133 of the Civil Code considers as void a
"donation between the spouses during the marriage," policy considerations of the most
exigent character as well as the dictates of morality require that the same prohibition
should apply to a common-law relationship. We reverse.
1. As announced at the outset of this opinion, a 1954 Court of Appeals decision,
Buenaventura v. Bautista, 7 interpreting a similar provision of the old Civil Code 8
speaks unequivocally. If the policy of the law is, in the language of the opinion of the
then Justice J.B.L. Reyes of that Court, "to prohibit donations in favor of the other
consort and his descendants because of fear of undue and improper pressure and
influence upon the donor, a prejudice deeply rooted in our ancient law; ‘porque no se
engañen despojandose el uno al otro por amor que han de consuno [according to] the
Partidas (Part IV, Tit. XI, LAW IV), reiterating the rationale ‘Ne mutuato amore invicem
spoliarentur’ of the Pandects (Bk. 24, Tit. 1, De donat, inter virum et uxorem); then there
is every reason to apply the same prohibitive policy to persons living together as
husband and wife without the benefit of nuptials. For it is not to be doubted that assent
to such irregular connection for thirty years bespeaks greater influence of one party
over the other, so that the danger that the law seeks to avoid is correspondingly 8. Art. 1334 of the former Civil Code was similarly worded: "All donations between the
increased. Moreover, as already pointed out by Ulpian (in his lib. 32 ad Sabinum, fr. 1), spouses made during the marriage shall be void."
‘it would not be just that such donations should subsist, lest the condition of those who 9. Buenaventura v. Bautista, 50 O.G. 3679, 3686 (1954).
incurred guilt should turn out to be better.’ So long as marriage remains the cornerstone 10. The excerpt from Yellow Taxi and Pasay Trans. Workers Union v. Manila Yellow
of our family law, reason and morality alike demand that the disabilities attached to Taxicab Co., 80 Phil. 833, 838 (1948) reads in full: "Esta interpretación de la ley es
marriage should likewise attach to concubinage." 9 insostenible. El espiritu que informa la ley debe ser la luz que ha de guiar a los
tribunales en la aplicación de sus dispociones. No deben atenerse a la letra de la ley
2. It is hardly necessary to add that even in the absence of the above pronouncement, cuando la interpretación literal se separa de la intención de la legislatura
any other conclusion cannot stand the test of scrutiny. It would be to indict the framers especialmente cuando lleva a conclusiones incompatibles con objeto manifesto de la
of the Civil Code for a failure to apply a laudable rule to a situation which in its essentials ley. Cuando hay conflicto entre la interpretación literal y la interpretación fundada en
cannot be distinguished. Moreover, if it is at all to be differentiated, the policy of the law el proposito de la ley, la última debe prevalecer." Cf. Tañada v. Cuenco, 103 Phil,
which embodies a deeply-rooted notion of what is just and what is right would be 1051 (1957); Hidalgo v. Hidalgo, L-25326-27, May 29, 1970, 33 SCRA 105; Casela v.
nullified if such irregular relationship instead of being visited with disabilities would be Court of Appeals, L-26754, Oct. 16, 1970, 35 SCRA 279.
attended with benefits. Certainly a legal norm should not be susceptible to such a 11. According to Art. 1001 of the Civil Code: "Should brothers and sisters or their
reproach. If there is ever any occasion where the principle of statutory construction that children survive with the widow or widower, the latter shall be entitled to one-half of
what is within the spirit of the law is as much a part of it as what is written, this is it. the inheritance and the brothers and sisters or their children the other half. (953,
Otherwise the basic purpose discernible in such codal provision would not be attained. 837a)."
Whatever omission may be apparent in an interpretation purely literal of the language
used must be remedied by an adherence to its avowed objective. In the language of
Justice Pablo: "El espiritu que informa la ley debe ser la luz que ha de guiar a los
tribunales en la aplicación de sus disposiciones.’’ 10
3. The lack of validity of the donation made by the deceased to defendant Petronila
Cervantes does not necessarily result in plaintiff having exclusive right to the disputed
property. Prior to the death of Felix Matabuena, the relationship between him and the
defendant was legitimated by their marriage on March 28, 1962. She is therefore his
widow. As provided for in the Civil Code, she is entitled to one-half of the inheritance
and the plaintiff, as the surviving sister, to the other half. 11
WHEREFORE, the lower court decision of November 23, 1965 dismissing the
complaint with costs is reversed. The questioned donation is declared void, with the
rights of plaintiff and defendant as pro indiviso heirs to the property in question
recognized. The case is remanded to the lower court for its appropriate disposition in
accordance with the above opinion. Without pronouncement as to costs.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Barredo, Villamor
and Makasiar, JJ., concur.
Teehankee, J, took no part.
Endnotes:

1. Art 133 of the Civil Code provides: "Every donation between the spouses during
the marriage shall be void. This prohibition does not apply when the donation takes
effect after the death of the donor. Neither does this prohibition apply to moderate
gifts which the spouses may give each other on the occasion of any family rejoicing."
2. 50 O.G. 3679 (1954).
3. Ibid., p. 3686.
4. Decision, Record on Appeal, pp. 17-19.
5. Ibid, pp. 19-20.
6. Ibid, p. 21.
7. 50 O.G. 3679.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-57499 June 22, 1984
MERCEDES CALIMLIM- CANULLAS, petitioner,
vs.
HON. WILLELMO FORTUN, Judge, Court of First instance of Pangasinan,
Branch I, and CORAZON DAGUINES, respondents.
Fernandez Law Offices for petitioner.
Francisco Pulido for respondents.
SYLLABUS
1. CIVIL LAW; PERSONS; PROPERTY RELATIONS BETWEEN HUSBAND AND
WIFE; CONJUGAL PARTNERSHIP OF GAINS; CONSTRUCTION OF CONJUGAL
HOUSE ON LAND BELONGING EXCLUSIVELY TO ONE SPOUSE CONVERTS
LAND FROM CAPITAL/PARAPHERNAL TO CONJUGAL. — The determination of the
issue of whether or not the construction of a conjugal house on the exclusive property
of the husband ipso facto gave the land the character of conjugal property revolves
around the interpretation to be given to the second paragraph of Article 158 of the Civil
Code. We hold that pursuant to the said vision of law both the land and the building
belong to the conjugal partnership but the conjugal partnership is indebted to the
husband for the value of the land. The spouse owning the lot becomes a creditor of the
conjugal partnership for the value of the lot (Tabotabo vs. Molero, 22 Phil. 418 [1912]),
which value would be reimbursed at the liquidation of the conjugal partnership.
2. ID.; ID.; ID.; ID.; OWNERSHIP OF LAND RETROACTS TO THE TIME THE
CONJUGAL BUILDING WAS FIRST CONSTRUCTED. — It is true that in the case of
Maramba vs. Lozano, (20 SCRA 474 [1967]), relied upon by respondent Judge, it was
held that land belonging to one of the spouses, upon which the spouses have built a
house, becomes conjugal property only when the conjugal partnership is liquidated and
indemnity paid to the owner of the land. We believe that the better rule is that
enunciated by Mr. Justice JBL Reyes in Padilia vs. Paterno, 3 SCRA 678, 691, (1961),
where the following was explained: "As to the above properties, their conversion from
paraphernal to conjugal assets should be deemed to retroact to the time the conjugal
buildings were first constructed thereon or at the very latest, to the time immediately
before the death of Narciso A. Padilla that ended the conjugal partnership. They can
not be considered to have become conjugal property only as to the time their values
were paid to the estate of the widow Concepcion Paterno because by that time the
conjugal partnership no longer existed and it could not acquire the ownership of said
properties. The acquisition by the partnership of these properties was, under the 1943
decision, subject to the suspensive condition that their values would be reimbursed to
the widow at the liquidation of the conjugal partnership; once paid, the effects of the
fulfillment of the condition should be deemed to retroact to the date the obligation was
constituted (Article 1187, New Civil Code). . . ."
3. ID.; ID.; ID.; ID.; CANNOT BE ALIENATED WITHOUT THE CONSENT OF THE
WIFE; CASE AT BAR. — Since FERNANDO'S lot on which he and his wife
MERCEDES have built their conjugal house became conjugal property from the time
the house was first built thereon, it follows that FERNANDO could not have alienated
the house and lot to
DAGUINES since MERCEDES had not given her consent to said sale (Article 166, Civil
Code).
4. ID.; OBLIGATIONS AND CONTRACTS; VOID AND INEXISTENT CONTRACTS;
SALE MADE IN FAVOR OF CONCUBINE. — The contract of sale was null and void
for being contrary to morals and public policy. The sale was made by the husband in
favor of a concubine after he had abandoned his family and left the conjugal home
where his wife and children lived and from whence they derived their support. That sale
was subversive of the stability of the family, a basic social institution which public policy
cherishes and protects (Article 216, Civil Code). Article 1409 of the Civil Code states
inter alia that: contracts whose cause, object, or purpose is contrary to law, morals,
good customs, public order, or public policy are void and inexistent from the very
beginning. Article 1352 also provides that: "Contracts without cause, or with unlawful
cause, produce no effect whatsoever. The cause is unlawful if it is contrary to law,
morals, good customs, public order, or public policy."
5. ID.; ID.; PROHIBITION AGAINST TRANSFERS OR CONVEYANCES OF
PROPERTY BETWEEN SPOUSES DURING THE MARRIAGE; PROHIBITION
APPLIES TO COUPLES LIVING WITHOUT BENEFIT OF MARRIAGE; RATIONALE.
— Additionally, the law emphatically prohibits the spouses from selling property to each
other subject to certain exceptions. Similarly, donations between spouses during
marriage are prohibited. And this is so because if transfers or conveyances between
spouses were allowed during marriage, that would destroy the system of conjugal
partnership, a basic policy in civil law. It was also designed to prevent the exercise of
undue influence by one spouse over the other, as well as to protect the institution of
marriage, which is the cornerstone of family law. The prohibitions apply to a couple
living as husband and wife without benefit of marriage, otherwise, "the condition of
those who incurred guilt would turn out to be better than those in legal union." Those
provisions are dictated by public interest and their criterion must be imposed upon the
will of the parties. That was the ruling in Buenaventura vs. Bautista, also penned by
Justice JBL Reyes (CA) 50 O.G. 3679, and cited in Matabuena vs. Cervantes, 38 SCRA
284 (1971).
MELENCIO-HERRERA, J.:
Petition for Review on certiorari assailing the Decision, dated October 6, 1980, and the
Resolution on the Motion for Reconsideration, dated November 27, 1980, of the then
Court of First Instance of Pangasinan, Branch I, in Civil Case No. 15620 entitled
"Corazon DAGUINES vs. MERCEDES Calimlim-Canullas," upholding the sale of a
parcel of land in favor of DAGUINES but not of the conjugal house thereon'
The background facts may be summarized as follows: Petitioner MERCEDES
Calimlim-Canullas and FERNANDO Canullas were married on December 19, 1962.
They begot five children. They lived in a small house on the residential land in question
with an area of approximately 891 square meters, located at Bacabac, Bugallon,
Pangasinan. After FERNANDO's father died in 1965, FERNANDO inherited the land.
In 1978, FERNANDO abandoned his family and was living with private respondent
Corazon DAGUINES. During the pendency of this appeal, they were convicted of
concubinage in a judgment rendered on October 27, 1981 by the then Court of First
Instance of Pangasinan, Branch II, which judgment has become final.
On April 15, 1980, FERNANDO sold the subject property with the house thereon to
DAGUINES for the sum of P2,000.00. In the document of sale, FERNANDO described
the house as "also inherited by me from my deceased parents."
Unable to take possession of the lot and house, DAGUINES initiated a complaint on
June 19, 1980 for quieting of title and damages against MERCEDES. The latter resisted
and claimed that the house in dispute where she and her children were residing,
including the coconut trees on the land, were built and planted with conjugal funds and
through her industry; that the sale of the land together with the house and
improvements to DAGUINES was null and void because they are conjugal properties
and she had not given her consent to the sale,
In its original judgment, respondent Court principally declared DAGUINES "as the
lawful owner of the land in question as well as the one-half () of the house erected on
said land." Upon reconsideration prayed for by MERCEDES, however, respondent
Court resolved:
WHEREFORE, the dispositive portion of the Decision of this Court,
promulgated on October 6, 1980, is hereby amended to read as follows:
(1) Declaring plaintiff as the true and lawful owner of the land in question and
the 10 coconut trees;
(2) Declaring as null and void the sale of the conjugal house to plaintiff on April
15, 1980 (Exhibit A) including the 3 coconut trees and other crops planted
during the conjugal relation between Fernando Canullas (vendor) and his
legitimate wife, herein defendant Mercedes Calimlim- Canullas;
xxx xxx xxx
The issues posed for resolution are (1) whether or not the construction of a conjugal
house on the exclusive property of the husband ipso facto gave the land the character
of conjugal property; and (2) whether or not the sale of the lot together with the house
and improvements thereon was valid under the circumstances surrounding the
transaction.
The determination of the first issue revolves around the interpretation to be given to the
second paragraph of Article 158 of the Civil Code, which reads:
xxx xxx xxx
Buildings constructed at the expense of the partnership during the marriage
on land belonging to one of the spouses also pertain to the partnership, but
the value of the land shall be reimbursed to the spouse who owns the same.
We hold that pursuant to the foregoing provision both the land and the building belong
to the conjugal partnership but the conjugal partnership is indebted to the husband for
the value of the land. The spouse owning the lot becomes a creditor of the conjugal
partnership for the value of the lot, 1 which value would be reimbursed at the liquidation
of the conjugal partnership. 2
In his commentary on the corresponding provision in the Spanish Civil Code (Art. 1404),
Manresa stated:
El articulo cambia la doctrine; los edificios construidos durante el matrimonio
en suelo propio de uno de los conjuges son gananciales, abonandose el valor
del suelo al conj uge a quien pertenezca.
It is true that in the case of Maramba vs. Lozano, 3 relied upon by respondent Judge, it
was held that the land belonging to one of the spouses, upon which the spouses have
built a house, becomes conjugal property only when the conjugal partnership is
liquidated and indemnity paid to the owner of the land. We believe that the better rule
is that enunciated by Mr. Justice J.B.L. Reyes in Padilla vs. Paterno, 3 SCRA 678, 691
(1961), where the following was explained:
As to the above properties, their conversion from paraphernal to conjugal
assets should be deemed to retroact to the time the conjugal buildings were
first constructed thereon or at the very latest, to the time immediately before
the death of Narciso A. Padilla that ended the conjugal partnership. They can
not be considered to have become conjugal property only as of the time their
values were paid to the estate of the widow Concepcion Paterno because by
that time the conjugal partnership no longer existed and it could not acquire
the ownership of said properties. The acquisition by the partnership of these
properties was, under the 1943 decision, subject to the suspensive condition
that their values would be reimbursed to the widow at the liquidation of the
conjugal partnership; once paid, the effects of the fulfillment of the condition
should be deemed to retroact to the date the obligation was constituted (Art.
1187, New Civil Code) ...
The foregoing premises considered, it follows that FERNANDO could not have
alienated the house and lot to DAGUINES since MERCEDES had not given her
consent to said sale. 4
Anent the second issue, we find that the contract of sale was null and void for being
contrary to morals and public policy. The sale was made by a husband in favor of a
concubine after he had abandoned his family and left the conjugal home where his wife
and children lived and from whence they derived their support. That sale was
subversive of the stability of the family, a basic social institution which public policy
cherishes and protects. 5
Article 1409 of the Civil Code states inter alia that: contracts whose cause, object, or
purpose is contrary to law, morals, good customs, public order, or public policy
are void and inexistent from the very beginning.
Article 1352 also provides that: "Contracts without cause, or with unlawful cause,
produce no effect whatsoever. The cause is unlawful if it is contrary to law, morals,
good customs, public order, or public policy."
Additionally, the law emphatically prohibits the spouses from selling property to each
other subject to certain exceptions.6 Similarly, donations between spouses during
marriage are prohibited. 7 And this is so because if transfers or con conveyances
between spouses were allowed during marriage, that would destroy the system of
conjugal partnership, a basic policy in civil law. It was also designed to prevent the
exercise of undue influence by one spouse over the other, 8 as well as to protect the
institution of marriage, which is the cornerstone of family law. The prohibitions apply to
a couple living as husband and wife without benefit of marriage, otherwise, "the
condition of those who incurred guilt would turn out to be better than those in legal
union." Those provisions are dictated by public interest and their criterion must be
imposed upon the wig of the parties. That was the ruling in Buenaventura vs.
Bautista, also penned by Justice JBL Reyes (CA) 50 O.G. 3679, and cited
in Matabuena vs. Cervantes. 9 We quote hereunder the pertinent dissertation on this
point:
We reach a different conclusion. While Art. 133 of the Civil Code considers as
void a donation between the spouses during the marriage, policy
considerations of the most exigent character as wen as the dictates
 of morality require that the same prohibition should apply to a common-law
relationship.
As announced in the outset of this opinion, a 1954 Court of Appeals decision,
Buenaventura vs. Bautista, 50 OG 3679, interpreting a similar provision of the
old Civil Code speaks unequivocally. If the policy of the law is, in the language
of the opinion of the then Justice J.B.L. Reyes of that Court, 'to prohibit
donations in favor of the other consort and his descendants because of fear
of undue influence and improper pressure upon the donor, a prejudice deeply
rooted in our ancient law, ..., then there is every reason to apply the same
prohibitive policy to persons living together as husband and wife without
benefit of nuptials. For it is not to be doubted that assent to such irregular
connection for thirty years bespeaks greater influence of one party over the
other, so that the danger that the law seeks to avoid is correspondingly
increased'. Moreover, as pointed out by Ulpian (in his lib 32 ad Sabinum, fr.
1), "It would not be just that such donations — should subsist, lest the
conditions of those who incurred guilt should turn out to be better." So long as
marriage remains the cornerstone of our family law, reason and morality alike
demand that the disabilities attached to marriage should likewise attach
to concubinage (Emphasis supplied),
WHEREFORE, the Decision of respondent Judge, dated October 6, 1980, and his
Resolution of November 27, 1980 on petitioner's Motion for Reconsideration, are
hereby set aside and the sale of the lot, house and improvements in question, is hereby
declared null and void. No costs.
SO ORDERED.
Teehankee (Chairman), Plana, Relova, Gutierrez, Jr., and De la Fuente, JJ., concur.
Footnotes
1 Tabotabo vs. Molero, 22 Phil. 418 (1912).
2 Vda. de Padilla vs. Paterno, 3 SCRA 678, 691 (1961).
3 20 SCRA 474 (1967).
4 Article 166, Civil Code.
5 Article 216, Civil Code.
6 Article 1490, Ibid.
7 Article 133, Ibid.
8 Article 1337, Ibid.
9 38 SCRA 284 (1971).
EN BANC
G.R. No. L-35702 May 29, 1973
DOMINGO D. RUBIAS, plaintiff-appellant,
vs.
ISAIAS BATILLER, defendant-appellee.
Gregorio M. Rubias for plaintiff-appellant.
Vicente R. Acsay for defendant-appellee.
SYLLABUS
Actions; Dismissal of complaint for declaration of absolute ownership and
restoration of possession of land where plaintiff has no right or title thereto; Case at
bar.—The stipulated facts and exhibits of record indisputably established plaintiff's lack
of cause of action and justified the outright dismissal of the complaint. Plaintiff's claim
of ownership to the land in question was predicated on the sale thereof made in 1956
by his father-in-law in his favor at a time when the latter's application for registration
thereof had already been dismissed by the land registration court and was pending
appeal in the Court of Appeals. With the appellate court's 1958 final judgment affirming
the dismissal of the vendor's application for registration, the lack of any rightful claim or
title of the said vendor to the land was conclusively and decisively judicially determined.
Hence, there was no right or title to the land that could be transferred or sold by the
vendor's purported sale in 1956 in favor of the plaintiff. Manifestly then, plaintiff's
complaint against defendant, to be declared absolute owner of the land and to be
restored to possession thereof with damages was bereft of any factual or legal basis.
Sales; Prohibition against purchase by lawyer of property in litigation from his
client; Article 1491, paragraph (5) of the Philippine Civil Code construed.—Article 1491
of the Civil Code of the Philippines (like Article 1459 of the Spanish Civil Code) prohibits
in its six paragraphs certain persons, by reason of the relation of trust or their peculiar
control either directly or indirectly and "even at a public or judicial auction," as follows:
(1) guardians; (2) agents; (3) administrators; (4) public officers and employees; (5)
judicial officers and employees, prosecuting attorneys, and lawyers; and (6) others
specially disqualified by law.
Same; Prohibited purchase void and produces no legal effect.—Castan's
rationale for his conclusion that fundamental considerations of public policy render void
and inexistent such expressly prohibited purchases (e.g. by public officers and
employees of government property intrusted to them and by justices, judges, fiscals
and lawyers of property and rights in litigation submitted to or handled by them, under
Article 1491, paragraphs (4) and (5) of the Civil Code of the Philippines) has been
adopted in a new article of the Civil Code of the Philippines, viz,Article 1409 declaring
such prohibited contracts as "inexistent and void from the beginning."
Same; Nullity of such prohibited contracts cannot be cured by ratification.—The
nullity of such prohibited contracts is definite and permanent and cannot be cured by
ratification. The public interest and public policy remain paramount and do not permit
of compromise or ratification.
Same; Nullity of such prohibited contracts differentiated from the nullity of
contracts of purchase by the guardians, agents and administrators.—The permanent
disqualification of public and judicial officers and lawyers grounded on public policy
differs from the first three cases of guardians, agents and administrators (Article 1491,
Civil Code), as to whose transactions, its has been opined, may be "ratified" by means
of and "in the form of a new contract, in which case its validity shall be determined only
by the circumstances at the time of execution of such new contract. The causes of
nullity which have ceased to exist cannot impair the validity of the new contract. Thus,
the object which was illegal at the time of the first contract, may have already become
lawful at the time of ratification or second contract; or the service which was impossible
may have become possible; or the intention which could not be ascertained may have
been clarified by the parties. The ratification or second contract would then be valid
from its execution; however, it does not retroact to the date of the first contract.
APPEAL from a decision of the Court of First Instance of Iloilo. Rovira, J.
TEEHANKEE, J.:
In this appeal certified by the Court of Appeals to this Court as involving purely legal
questions, we affirm the dismissal order rendered by the Iloilo court of first instance
after pre-trial and submittal of the pertinent documentary exhibits.
Such dismissal was proper, plaintiff having no cause of action, since it was duly
established in the record that the application for registration of the land in question filed
by Francisco Militante, plaintiff's vendor and predecessor interest, had been dismissed
by decision of 1952 of the land registration court as affirmed by final judgment in 1958
of the Court of Appeals and hence, there was no title or right to the land that could be
transmitted by the purported sale to plaintiff.
As late as 1964, the Iloilo court of first instance had in another case of ejectment
likewise upheld by final judgment defendant's "better right to possess the land in
question . having been in the actual possession thereof under a claim of title many
years before Francisco Militante sold the land to the plaintiff."
Furthermore, even assuming that Militante had anything to sell, the deed of sale
executed in 1956 by him in favor of plaintiff at a time when plaintiff was concededly his
counsel of record in the land registration case involving the very land in dispute
(ultimately decided adversely against Militante by the Court of Appeals' 1958 judgment
affirming the lower court's dismissal of Militante's application for registration) was
properly declared inexistent and void by the lower court, as decreed by Article 1409 in
relation to Article 1491 of the Civil Code.
The appellate court, in its resolution of certification of 25 July 1972, gave the following
backgrounder of the appeal at bar:
On August 31, 1964, plaintiff Domingo D. Rubias, a lawyer, filed a suit to
recover the ownership and possession of certain portions of lot under Psu-
99791 located in Barrio General Luna, Barotac Viejo, Iloilo which he bought
from his father-in-law, Francisco Militante in 1956 against its present occupant
defendant, Isaias Batiller, who illegally entered said portions of the lot on two
occasions — in 1945 and in 1959. Plaintiff prayed also for damages and
attorneys fees. (pp. 1-7, Record on Appeal). In his answer with counter-claim
defendant claims the complaint of the plaintiff does not state a cause of action,
the truth of the matter being that he and his predecessors-in-interest have
always been in actual, open and continuous possession since time
immemorial under claim of ownership of the portions of the lot in question and
for the alleged malicious institution of the complaint he claims he has suffered
moral damages in the amount of P 2,000.00, as well as the sum of P500.00
for attorney's fees. ...
On December 9, 1964, the trial court issued a pre-trial order, after a pre-trial
conference between the parties and their counsel which order reads as
follows..
'When this case was called for a pre-trial conference today, the
plaintiff appeared assisted by himself and Atty. Gregorio M. Rubias.
The defendant also appeared, assisted by his counsel Atty. Vicente
R. Acsay.
A. During the pre-trial conference, the parties have agreed that
the following facts are attendant in this case and that they will no
longer introduced any evidence, testimonial or documentary to prove
them:
1. That Francisco Militante claimed ownership of a parcel of land located in
the Barrio of General Luna, municipality of Barotac Viejo province of Iloilo,
which he caused to be surveyed on July 18-31, 1934, whereby he was issued
a plan Psu-99791 (Exhibit "B"). (The land claimed contained an area of
171:3561 hectares.)
2. Before the war with Japan, Francisco Militante filed with the Court of First
Instance of Iloilo an application for the registration of the title of the land
technically described in psu-99791 (Exh. "B") opposed by the Director of
Lands, the Director of Forestry and other oppositors. However, during the war
with Japan, the record of the case was lost before it was heard, so after the
war Francisco Militante petitioned this court to reconstitute the record of the
case. The record was reconstituted on the Court of the First Instance of Iloilo
and docketed as Land Case No. R-695, GLRO Rec. No. 54852. The Court of
First Instance heard the land registration case on November 14, 1952,
and after the trial this court dismissed the application for registration. The
appellant, Francisco Militante, appealed from the decision of this Court to the
Court of Appeals where the case was docketed as CA-GR No. 13497-R..
3. Pending the disposal of the appeal in CA-GR No. 13497-R and more
particularly on June 18, 1956, Francisco Militante sold to the plaintiff, Domingo
Rubias the land technically described in psu-99791 (Exh. "A"). The sale was
duly recorded in the Office of the Register of Deeds for the province of Iloilo
as Entry No. 13609 on July 11, 1960 (Exh. "A-1").
(NOTE: As per deed of sale, Exh. A, what Militante purportedly sold to plaintiff-
appellant, his son-in-law,for the sum of P2,000.00 was "a parcel
of untitled land having an area Of 144.9072 hectares ... surveyed under Psu
99791 ... (and) subject to the exclusions made by me, under (case) CA-i3497,
Land Registration Case No. R-695, G.L.R.O. No. 54852, Court of First
Instance of the province of Iloilo. These exclusions referred to portions of the
original area of over 171 hectares originally claimed by Militante as applicant,
but which he expressly recognized during the trial to pertain to some
oppositors, such as the Bureau of Public Works and Bureau of Forestry and
several other individual occupants and accordingly withdrew his application
over the same. This is expressly made of record in Exh. A, which is the Court
of Appeals' decision of 22 September 1958 confirming the land registration
court's dismissal of Militante's application for registration.)
4. On September 22,1958 the Court of appeals in CA-G.R. No. 13497-R
promulgated its judgment confirming the decision of this Court in Land Case
No. R-695, GLRO Rec. No. 54852 which dismissed the application for
Registration filed by Francisco Militante (Exh. "I").
5. Domingo Rubias declared the land described in Exh. 'B' for taxation
purposes under Tax Dec. No. 8585 (Exh. "C") for 1957; Tax Dec. Nos. 9533
(Exh. "C-1") and 10019 (Exh. "C-3")for the year 1961; Tax Dec. No. 9868 (Exh.
"C-2") for the year 1964, paying the land taxes under Tax Dec. No. 8585 and
9533 (Exh. "D", "D-1", "G-6").
6. Francisco Militante immediate predecessor-in-interest of the plaintiff, has
also declared the land for taxation purposes under Tax Dec. No. 5172 in 1940
(Exh. "E") for 1945; under Tax Dec. No. T-86 (Exh. "E-1") for 1948; under Tax
Dec. No. 7122 (Exh. "2"), and paid the land taxes for 1940 (Exhs. "G" and "G-
7"), for 1945 46 (Exh. "G-1") for 1947 (Exh. "G-2"), for 1947 & 1948 (Exh. "G-
3"), for 1948 (Exh. "G-4"), and for 1948 and 1949 (Exh. "G-5").
7. Tax Declaration No. 2434 in the name of Liberato Demontaño for the land
described therein (Exh. "F") was cancelled by Tax. Dec. No. 5172 of Francisco
Militante (Exh. "E"). Liberato Demontaño paid the land tax under Tax Dec. No.
2434 on Dec. 20, 1939 for the years 1938 (50%) and 1959 (Exh. "H").
8. The defendant had declared for taxation purposes Lot No. 2 of the Psu-
155241 under Tax Dec. Not. 8583 for 1957 and a portion of Lot No. 2, Psu-
155241, for 1945 under Tax Dec. No. 8584 (Exh. "2-A" Tax No. 8583 (Exh.
"2") was revised by Tax Dec. No. 9498 in the name of the defendant (Exh. "2-
B") and Tax Dec. No. 8584 (Exh. "2-A") was cancelled by Tax Dec. No. 9584
also in the name of the defendant (Exh. "2-C"). The defendant paid the land
taxes for Lot 2, Psu-155241, on Nov. 9, 1960 for the years 1945 and 1946, for
the year 1950, and for the year 1960 as shown by the certificate of the
treasurer (Exh. "3"). The defendant may present to the Court other land taxes
receipts for the payment of taxes for this lot.
9. The land claimed by the defendant as his own was surveyed on June 6 and
7,1956, and a plan approved by Director of Land on November 15, 1956 was
issued, identified as Psu 155241 (Exh. "5").
10. On April 22, 1960, the plaintiff filed forcible Entry and Detainer
case against Isaias Batiller in the Justice of the Peace Court of Barotac Viejo
Province of Iloilo (Exh. "4") to which the defendant Isaias Batiller riled his
answer on August 29, 1960 (Exh. "4-A"). The Municipal Court of Barotac Viejo
after trial, decided the case on May 10, 1961 in favor of the defendant and
against the plaintiff (Exh. "4-B"). The plaintiff appealed from the decision of the
Municipal Court of Barotac Viejo which was docketed in this Court as Civil
Case No. 5750 on June 3, 1961, to which the defendant, Isaias Batiller, on
June 13, 1961 filed his answer (Exh. "4-C"). And this Court after the trial.
decided the case on November 26, 1964, in favor of the defendant, Isaias
Batiller and against the plaintiff (Exh. "4-D").
(NOTE: As per Exh. 4-B, which is the Iloilo court of first instance decision of
26 November 1964 dismissing plaintiff's therein complaint for ejectment
against defendant, the iloilo court expressly found "that plaintiff's complaint
is unjustified, intended to harass the defendant" and "that the defendant,
 Isaias Batiller, has a better right to possess the land in question described in
Psu 155241 (Exh. "3"), Isaias Batiller having been in the actual physical
possession thereof under a claim of title many years before Francisco
Militante sold the land to the plaintiff-hereby dismissing plaintiff's complaint
and ordering the plaintiff to pay the defendant attorney's fees ....")
B. During the trial of this case on the merit, the plaintiff will prove by competent evidence
the following:
1. That the land he purchased from Francisco Militante under Exh. "A" was
formerly owned and possessed by Liberato Demontaño but that on September
6, 1919 the land was sold at public auction by virtue of a judgment in a Civil
Case entitled "Edw J. Pflieder plaintiff vs. Liberato Demontaño Francisco
Balladeros and Gregorio Yulo, defendants", of which Yap Pongco was the
purchaser (Exh. "1-3"). The sale was registered in the Office of the Register
of Deeds of Iloilo on August 4, 1920, under Primary Entry No. 69 (Exh. "1"),
and a definite Deed of Sale was executed by Constantino A. Canto, provincial
Sheriff of Iloilo, on Jan. 19, 1934 in favor of Yap Pongco (Exh. "I"), the sale
having been registered in the Office of the Register of Deeds of Iloilo on
February 10, 1934 (Exh. "1-1").
2. On September 22, 1934, Yap Pongco sold this land to Francisco Militante
as evidenced by a notarial deed (Exh. "J") which was registered in the Registry
of Deeds on May 13, 1940 (Exh. "J-1").
3. That plaintiff suffered damages alleged in his complaint.
C. Defendants, on the other hand will prove by competent evidence during the trial of
this case the following facts:
1. That lot No. 2 of the Psu-1552 it (Exh. '5') was originally owned and
possessed by Felipe Batiller, grandfather of the defendant Basilio Batiller, on
the death of the former in 1920, as his sole heir. Isaias Batiller succeeded his
father , Basilio Batiller, in the ownership and possession of the land in the year
1930, and since then up to the present, the land remains in the possession of
the defendant, his possession being actual, open, public, peaceful and
continuous in the concept of an owner, exclusive of any other rights and
adverse to all other claimants.
2. That the alleged predecessors in interest of the plaintiff have never been in
the actual possession of the land and that they never had any title thereto.
3. That Lot No. 2, Psu 155241, the subject of Free Patent application of the
defendant has been approved.
4. The damages suffered by the defendant, as alleged in his counterclaim."' 1
The appellate court further related the developments of the case, as follows:
On August 17, 1965, defendant's counsel manifested in open court that before
any trial on the merit of the case could proceed he would file a motion to
dismiss plaintiff's complaint which he did, alleging thatplaintiff does not have
cause of action against him because the property in dispute which he (plaintiff)
allegedly bought from his father-in-law, Francisco Militante was the subject
matter of LRC No. 695 filed in the CFI of Iloilo, which case was brought on
appeal to this Court and docketed as CA-G.R. No. 13497-R in which aforesaid
case plaintiff was the counsel on record of his father-in-law, Francisco
Militante. Invoking Arts. 1409 and 1491 of the Civil Code which reads:
'Art. 1409. The following contracts are inexistent and void from the
beginning:
xxx xxx xxx
(7) Those expressly prohibited by law.
'ART. 1491. The following persons cannot acquire any purchase,
even at a public auction, either in person of 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 of 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 an
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.'
defendant claims that plaintiff could not have acquired any interest in the
property in dispute as the contract he (plaintiff) had with Francisco Militante
was inexistent and void. (See pp. 22-31, Record on Appeal). Plaintiff strongly
opposed defendant's motion to dismiss claiming that defendant can not invoke
Articles 1409 and 1491 of the Civil Code as Article 1422 of the same Code
provides that 'The defense of illegality of contracts is not available to third
persons whose interests are not directly affected' (See pp. 32-35 Record on
Appeal).
On October 18, 1965, the lower court issued an order disclaiming plaintiffs
complaint (pp. 42-49, Record on Appeal.) In the aforesaid order of dismissal
the lower court practically agreed with defendant's contention that the contract
(Exh. A) between plaintiff and Francism Militante was null and void. In due
season plaintiff filed a motion for reconsideration (pp. 50-56 Record on
Appeal) which was denied by the lower court on January 14, 1966 (p. 57,
Record on Appeal).
Hence, this appeal by plaintiff from the orders of October 18, 1965 and
January 14, 1966.
Plaintiff-appellant imputes to the lower court the following errors:
'1. The lower court erred in holding that the contract of sale between
the plaintiff-appellant and his father-in-law, Francisco Militante, Sr.,
now deceased, of the property covered by Plan Psu-99791, (Exh.
"A") was void, not voidable because it was made when plaintiff-
appellant was the counsel of the latter in the Land Registration case.
 '2. The lower court erred in holding that the defendant-appellee is an
interested person to question the validity of the contract of sale
between plaintiff-appellant and the deceased, Francisco Militante,
Sr.
'3. The lower court erred in entertaining the motion to dismiss of the
defendant-appellee after he had already filed his answer, and after
the termination of the pre-trial, when the said motion to dismiss raised
a collateral question.
'4. The lower court erred in dismissing the complaint of the plaintiff-
appellant.'
The appellate court concluded that plaintiffs "assignment of errors gives rise to two (2)
legal posers — (1) whether or not the contract of sale between appellant and his father-
in-law, the late Francisco Militante over the property subject of Plan Psu-99791 was
void because it was made when plaintiff was counsel of his father-in-law in a land
registration case involving the property in dispute; and (2) whether or not the lower
court was correct in entertaining defendant-appellee's motion to dismiss after the latter
had already filed his answer and after he (defendant) and plaintiff-appellant had agreed
on some matters in a pre-trial conference. Hence, its elevation of the appeal to this
Court as involving pure questions of law.
It is at once evident from the foregoing narration that the pre-trial conference held by
the trial court at which the parties with their counsel agreed and stipulated on the
material and relevant facts and submitted their respective documentary exhibits as
referred to in the pre-trial order, supra,2 practically amounted to a fulldress trial which
placed on record all the facts and exhibits necessary for adjudication of the case.
The three points on which plaintiff reserved the presentation of evidence at the-trial
dealing with the source of the alleged right and title of Francisco Militante's
predecessors, supra,3 actually are already made of record in the stipulated
facts and admitted exhibits. The chain of Militante's alleged title and right to the land as
supposedly traced back to Liberato Demontaño was actually asserted by Militante (and
his vendee, lawyer and son-in-law, herein plaintiff) in the land registration case
and rejected by the Iloilo land registration court which dismissed Militante's application
for registration of the land. Such dismissal, as already stated, was affirmed by the final
judgment in 1958 of the Court of Appeals.4
The four points on which defendant on his part reserved the presentation of evidence
at the trial dealing with his and his ancestors' continuous, open, public and peaceful
possession in the concept of owner of the land and the Director of Lands' approval of
his survey plan thereof, supra,5 are likewise already duly established facts of record, in
the land registration case as well as in the ejectment case wherein the Iloilo court of
first instance recognized the superiority of defendant's right to the land as against
plaintiff.
No error was therefore committed by the lower court in dismissing plaintiff's complaint
upon defendant's motion after the pre-trial.
1. The stipulated facts and exhibits of record indisputably established plaintiff's lack of
cause of action and justified the outright dismissal of the complaint. Plaintiff's claim of
ownership to the land in question was predicated on the sale thereof for P2,000.00
made in 1956 by his father-in- law, Francisco Militante, in his favor, at a time when
Militante's application for registration thereof had already been dismissed by the Iloilo
land registration court and was pending appeal in the Court of Appeals.
With the Court of Appeals' 1958 final judgment affirming the dismissal of Militante's
application for registration, the lack of any rightful claim or title of Militante to the land
was conclusively and decisively judicially determined. Hence, there was no right or
title to the land that could be transferred or sold by Militante's purported sale in 1956 in
favor of plaintiff.
Manifestly, then plaintiff's complaint against defendant, to be declared absolute owner
of the land and to be restored to possession thereof with damages was bereft of any
factual or legal basis.
2. No error could be attributed either to the lower court's holding that the purchase by
a lawyer of the property in litigation from his client is categorically prohibited by Article
1491, paragraph (5) of the Philippine Civil Code, reproduced supra;6 and that
consequently, plaintiff's purchase of the property in litigation from his client (assuming
that his client could sell the same since as already shown above, his client's claim to
the property was defeated and rejected) was void and could produce no legal effect, by
virtue of Article 1409, paragraph (7) of our Civil Code which provides that contracts
"expressly prohibited or declared void by law' are "inexistent and that "(T)hese contracts
cannot be ratified. Neither can the right to set up the defense of illegality be waived."
The 1911 case of Wolfson vs. Estate of Martinez7 relied upon by plaintiff as holding that
a sale of property in litigation to the party litigant's lawyer "is not void but voidable at
the election of the vendor" was correctly held by the lower court to have been
superseded by the later 1929 case of Director of Lands vs. Abagat.8 In this later case
of Abagat, the Court expressly cited two antecedent cases involving the same
transaction of purchase of property in litigation by the lawyer which was expressly
declared invalid under Article 1459 of the Civil Code of Spain (of which Article 1491 of
our Civil Code of the Philippines is the counterpart) upon challenge thereof not by the
vendor-client but by the adverse parties against whom the lawyer was to enforce his
rights as vendee thus acquired.
These two antecedent cases thus cited in Abagat clearly superseded (without so
expressly stating the previous ruling in Wolfson:
The spouses, Juan Soriano and Vicente Macaraeg, were the owners of twelve
parcels of land. Vicenta Macaraeg died in November, 1909, leaving a large
number of collateral heirs but no descendants. Litigation between the
surviving husband, Juan Soriano, and the heirs of Vicenta immediately arose,
and the herein appellant Sisenando Palarca acted as Soriano's lawyer. On
May 2, 1918, Soriano executed a deed for the aforesaid twelve parcels of land
in favor of Sisenando Palarca and on the following day, May 3, 1918, Palarca
filed an application for the registration of the land in the deed. After hearing,
the Court of First Instance declared that the deed was invalid by virtue of the
provisions of article 1459 of the Civil Code, which prohibits lawyers and
solicitors from purchasing property rights involved in any litigation in which
they take part by virtue of their profession. The application for registration was
consequently denied, and upon appeal by Palarca to the Supreme Court, the
judgement of the lower court was affirmed by a decision promulgated
November 16,1925. (G.R. No. 24329, Palarca vs. Director of Lands, not
reported.)
 In the meantime cadastral case No. 30 of the Province of Tarlac was instituted,
and on August 21, 1923, Eleuteria Macaraeg, as administratrix of the estate
of Vicente Macaraeg, filed claims for the parcels in question. Buenaventura
Lavitoria administrator of the estate of Juan Soriano, did likewise and so did
Sisenando Palarca. In a decision dated June 21, 1927, the Court of First
Instance, Judge Carballo presiding, rendered judgment in favor of Palarea and
ordered the registration of the land in his name. Upon appeal to this court by
the administration of the estates of Juan Soriano and Vicente Macaraeg, the
judgment of the court below was reversed and the land adjudicated to the two
estates as conjugal property of the deceased spouses. (G.R. No. 28226,
Director of Lands vs. Abagat, promulgated May 21, 1928, not reported.) 9
In the very case of Abagat itself, the Court, again affirming the invalidity and nullity of
the lawyer's purchase of the land in litigation from his client, ordered the issuance of a
writ of possession for the return of the land by the lawyer to the adverse parties without
reimbursement of the price paid by him and other expenses, and ruled that "the
appellant Palarca is a lawyer and is presumed to know the law. He must, therefore,
from the beginning, have been well aware of the defect in his title and is, consequently,
a possessor in bad faith."
As already stated, Wolfson and Abagat were decided with relation to Article 1459 of the
Civil Code of Spain then adopted here, until it was superseded on August 30, 1950 by
the Civil Code of the Philippines whose counterpart provision is Article 1491.
Article 1491 of our Civil Code (like Article 1459 of the Spanish Civil Code) prohibits in
its six paragraphs certain persons, by reason of the relation of trust or their peculiar
control over the property, from acquiring such property in their trust or control either
directly or indirectly and "even at a public or judicial auction," as follows: (1) guardians;
(2) agents; (3) administrators; (4) public officers and employees; judicial officers and
employees, prosecuting attorneys, and lawyers; and (6) others especially disqualified
by law.
In Wolfson which involved the sale and assignment of a money judgment by the client
to the lawyer, Wolfson, whose right to so purchase the judgment was being challenged
by the judgment debtor, the Court, through Justice Moreland, then expressly reserved
decision on "whether or not the judgment in question actually falls within the prohibition
of the article" and held only that the sale's "voidability can not be asserted by one not a
party to the transaction or his representative," citing from Manresa 10 that
"(C)onsidering the question from the point of view of the civil law, the view taken by the
code, we must limit ourselves to classifying as void all acts done contrary to the express
prohibition of the statute. Now then: As the code does not recognize such nullity by the
mere operation of law, the nullity of the acts hereinbefore referred to must be asserted
by the person having the necessary legal capacity to do so and decreed by a
competent
court." 11
The reason thus given by Manresa in considering such prohibited acquisitions under
Article 1459 of the Spanish Civil Code as merely voidable at the instance and option of
the vendor and not void — "that the Code does not recognize such nullity de pleno
derecho" — is no longer true and applicable to our own Philippine Civil Code
which does recognize the absolute nullity of contracts "whose cause, object, or purpose
is contrary to law, morals, good customs, public order or public policy" or which are
"expressly prohibited or declared void by law" and declares such contracts "inexistent
and void from the beginning." 12
The Supreme Court of Spain and modern authors have likewise veered from Manresa's
view of the Spanish codal provision itself. In its sentencia of 11 June 1966, the Supreme
Court of Spain ruled that the prohibition of Article 1459 of the Spanish Civil Code is
based on public policy, that violation of the prohibition contract cannot be validated by
confirmation or ratification, holding that:
... la prohibicion que el articulo 1459 del C.C. establece respecto a los
administradores y apoderados, la cual tiene conforme a la doctrina de esta
Sala, contendia entre otras, en S. de 27-5-1959, un fundamento de orden
moral lugar la violacion de esta a la nulidad de pleno derecho del acto o
negocio celebrado, ... y prohibicion legal, afectante orden publico, no cabe
con efecto alguno la aludida retification ... 13
The criterion of nullity of such prohibited contracts under Article 1459 of the Spanish
Civil Code (Article 1491 of our Civil Code) as a matter of public order and policy as
applied by the Supreme Court of Spain to administrators and agents in its above cited
decision should certainly apply with greater reason to judges, judicial officers, fiscals
and lawyers under paragraph 5 of the codal article.
Citing the same decisions of the Supreme Court of Spain, Gullon Ballesteros, his
"Curso de Derecho Civil, (Contratos Especiales)" (Madrid, 1968) p. 18, affirms that,
with respect to Article 1459, Spanish Civil Code:.
Que caracter tendra la compra que se realice por estas personas?
Porsupuesto no cabe duda de que el caso (art.) 1459, 40 y 50, la nulidad
esabsoluta porque el motivo de la prohibicion es de orden publico. 14
Perez Gonzales in such view, stating that "Dado el caracter prohibitivo delprecepto, la
consequencia de la infraccion es la nulidad radical y ex lege." 15
Castan, quoting Manresa's own observation that.
"El fundamento do esta prohibicion es clarisimo. No sa trata con este precepto tan solo
de guitar la ocasion al fraude; persiguese, ademasel proposito de rodear a las
personas que intervienen en la administrcionde justicia de todos los retigios que
necesitan pora ejercer su ministerio librandolos de toda suspecha, que aunque fuere
in fundada, redundura endescredito de la institucion." 16 arrives at the contrary and now
accepted view that "Puede considerace en nuestro derecho inexistente 'o radicalmente
nulo el contrato en los siguentes cases: a) ...; b) cuando el contrato se ha celebrado en
violacion de una prescripcion 'o prohibicion legal, fundada sobre motivos de orden
publico (hipotesis del art. 4 del codigo) ..." 17
It is noteworthy that Caltan's rationale for his conclusion that fundamental consideration
of public policy render void and inexistent such expressly prohibited purchase (e.g. by
public officers and employees of government property intrusted to them and by justices,
judges, fiscals and lawyers of property and rights in litigation and submitted to or
handled by them, under Article 1491, paragraphs (4) and (5) of our Civil Code) has
been adopted in a new article of our Civil Code, viz, Article 1409 declaring such
prohibited contracts as "inexistent and void from the beginning." 18
Indeed, the nullity of such prohibited contracts is definite and permanent and cannot be
cured by ratification. The public interest and public policy remain paramount and do not
permit of compromise or ratification. In his aspect, the permanent disqualification of 7 Phil. 340, 342-343 (Oct. 13, 1911).
public and judicial officers and lawyers grounded on public policy differs from the first 8 Phil. 147 (March 27, 1929).
three cases of guardians, agents and administrators (Article 1491, Civil Code), as to 9 53 Phil. at pp. 147-148; emphasis added.
whose transactions it had been opined that they may be "ratified" by means of and in 10 Vol. 10, P.108.
"the form of a new contact, in which cases its validity shall be determined only by the 11 Phil. at p. 343.
circumstances at the time the execution of such new contract. The causes of nullity 12 Article 1409, pars. (1) and (7), Philippine Civil Code.
which have ceased to exist cannot impair the validity of the new contract. Thus, the 13 Rodriguez Navarro, Doctrina Civil del Tribunal Supremo, Appendice de 1961-1966,
object which was illegal at the time of the first contract, may have already become lawful pp. 693-694; emphasis added.
at the time of the ratification or second contract; or the service which was impossible 14 Emphasis added.
may have become possible; or the intention which could not be ascertained may have 15 Perez Gonzales & Alguer: Enneccerus, Derecho Civil, Tomo II have been clarified
been clarified by the parties. The ratification or second contract would then be valid by the parties. The ratification or second — 20, p.26.
from its execution; however, it does not retroact to the date of the first contract." 19 16 Castan, Derecho Civil Tomo 4, p. 73 (9a Ed.), citing 10 Manresa 107; emphasis
added.
As applied to the case at bar, the lower court therefore properly acted upon defendant- 17 Castan, Derecho Civil, Tomo 3, p. 437 (8a Ed.); emphasis added.
appellant's motion to dismiss on the ground of nullity of plaintiff's alleged purchase of 18 Tolentino in Vol. IV, p. 575, states that as to the "Source of Article(that) This
the land, since its juridical effects and plaintiff's alleged cause of action founded thereon provision is new but merely groups together contracts which have already been
were being asserted against defendant-appellant. The principles governing the nullity considered as void and initio under the old Civil Code, as interpreted by jurispundence
of such prohibited contracts and judicial declaration of their nullity have been well and commentators."
restated by Tolentino in his treatise on our Civil Code, as follows: 19 Idem, at pp. 578-579.
Parties Affected. — Any person may invoke the in existence of the contract 20 Idem, at p. 578.
whenever juridical effects founded thereon are asserted against him. Thus, if
there has been a void transfer of property, the transferor can recover it by
the accion reinvindicatoria; and any prossessor may refuse to deliver it to the
transferee, who cannot enforce the contract. Creditors may attach property of
the debtor which has been alienated by the latter under a void contract; a
mortgagee can allege the inexistence of a prior encumbrance; a debtor can
assert the nullity of an assignment of credit as a defense to an action by the
assignee.
Action On Contract. — Even when the contract is void or inexistent, an action
is necessary to declare its inexistence, when it has already been fulfilled.
Nobody can take the law into his own hands; hence, the intervention of the
competent court is necessary to declare the absolute nullity of the contract
and to decree the restitution of what has been given under it. The judgment,
however, will retroact to the very day when the contract was entered into.
If the void contract is still fully executory, no party need bring an action to
declare its nullity; but if any party should bring an action to enforce it, the other
party can simply set up the nullity as a defense. 20
ACCORDINGLY, the order of dismissal appealed from is hereby affirmed, with costs in
all instances against plaintiff-appellant. So ordered.
Makalintal, Zaldivar, Castro,. Fernando, Barredo, Makasiar, Antonio and Esguerra, JJ.,
concur.
Footnotes
1 Notes in parenthesis are added.
2 At pages 2 to 5; sub-paragraphs 1 to 10 of Par. A.
3 At pages 5 to 6; sub-paragraphs 1 to 3 of Par. B.
4 Exhibit "1".
5 At page 6; sub-paragraphs 1 to 4 of Par. C.
6 At page 7.
EN BANC
[G.R. No. L-8477. May 31, 1956.]
THE PHILIPPINE TRUST COMPANY, as Guardian of the Property of the minor,
MARIANO L. BERNARDO, Petitioner, vs. SOCORRO ROLDAN, FRANCISCO
HERMOSO, FIDEL C. RAMOS and EMILIO CRUZ, Respondents.
GUARDIANS AND WARD; PURCHASE OF WARD's PROPERTY BY
GUARDIAN OR THROUGH INTERMEDIARY.—As Guardianship is a trust of the
highest order, the trustee cannot ke allowed to have any inducement to neglect his
ward's interest; and whenever the guardian acquires the ward's property through
an intermediary, he violates the provision of Article 1459 of the Civil Code and such
transaction and .soibsequent ones emanating therefrom shall be annulled.
PETITION for review by certiorari of a decision of the Court of Appeals.
DECISION
BENGZON, J.:
As guardian of the property of the minor Mariano L. Bernardo, the Philippine Trust
Company filed in the Manila court of first instance a complaint to annul two contracts
regarding 17 parcels of land: (a) sale thereof by Socorro Roldan, as guardian of said
minor, to Fidel C. Ramos; and (b) sale thereof by Fidel C. Ramos to Socorro Roldan
personally. The complaint likewise sought to annul a conveyance of four out of the said
seventeen parcels by Socorro Roldan to Emilio Cruz.
The action rests on the proposition that the first two sales were in reality a sale by the
guardian to herself — therefore, null and void under Article 1459 of the Civil Code. As
to the third conveyance, it is also ineffective, because Socorro Roldan had acquired no
valid title to convey to Cruz.
The material facts of the case are not complicated. These 17 parcels located in
Guiguinto, Bulacan, were part of the properties inherited by Mariano L. Bernardo from
his father, Marcelo Bernardo, deceased. In view of his minority, guardianship
proceedings were instituted, wherein Socorro Roldan was appointed his guardian. She
was the surviving spouse of Marcelo Bernardo, and the stepmother of said Mariano L.
Bernardo.
On July 27, 1947, Socorro Roldan filed in said guardianship proceedings (Special
Proceeding 2485, Manila), a motion asking for authority to sell as guardian the 17
parcels for the sum of P14,700 to Dr. Fidel C. Ramos, the purpose of the sale being
allegedly to invest the money in a residential house, which the minor desired to have
on Tindalo Street, Manila. The motion was granted.
On August 5, 1947 Socorro Roldan, as guardian, executed the proper deed of sale in
favor of her brother-in-law Dr. Fidel C. Ramos (Exhibit A-1), and on August 12, 1947
she asked for, and obtained, judicial confirmation of the sale. On August 13, 1947, Dr.
Fidel C. Ramos executed in favor of Socorro Roldan, personally, a deed of conveyance
covering the same seventeen parcels, for the sum of P15,000 (Exhibit A-2). And on
October 21, 1947 Socorro Roldan sold four parcels out of the seventeen to Emilio Cruz
for P3,000, reserving to herself the right to repurchase (Exhibit A-3).
The Philippine Trust Company replaced Socorro Roldan as guardian, on August 10,
1948. And this litigation, started two months later, seeks to undo what the previous
guardian had done. The step-mother in effect, sold to herself, the properties of her
ward, contends the Plaintiff, and the sale should be annulled because it violates Article
1459 of the Civil Code prohibiting the guardian from purchasing “either in person or
through the mediation of another” the property of her ward.
The court of first instance, following our decision in Rodriguez vs. Mactal, 60 Phil. 13
held the article was not controlling, because there was no proof that Fidel C. Ramos
was a mere intermediary or that the latter had previously agreed with Socorro Roldan
to buy the parcels for her benefit.
However, taking the former guardian at her word - she swore she had repurchased the
lands from Dr. Fidel C. Ramos to preserve it and to give her protege opportunity to
redeem — the court rendered judgment upholding the contracts but allowing the minor
to repurchase all the parcels by paying P15,000, within one year.
The Court of Appeals affirmed the judgment, adding that the minor knew the particulars
of, and approved the transaction, and that “only clear and positive evidence of fraud or
bad faith, and not mere insinuations and inferences will overcome the presumptions
that a sale was concluded in all good faith for value”.
At first glance the resolutions of both courts accomplished substantial justice: the minor
recovers his properties. But if the conveyances are annulled as prayed for, the minor
will obtain a better deal: he receives all the fruits of the lands from the year 1947 (Article
1303 Civil Code) and will return P14,700, not P15,000.
To our minds the first two transactions herein described couldn’t be in a better juridical
situation than if this guardian had purchased the seventeen parcels on the day following
the sale to Dr. Ramos. Now, if she was willing to pay P15,000 why did she sell the
parcels for less? In one day (or actually one week) the price could not have risen so
suddenly. Obviously when, seeking approval of the sale she represented the price to
be the best obtainable in the market, she was not entirely truthful. This is one phase to
consider.
Again, supposing she knew the parcels were actually worth P17,000; then she agreed
to sell them to Dr. Ramos at P14,700; and knowing the realty’s value she offered him
the next day P15,000 or P15,500, and got it. Will there be any doubt that she was
recreant to her guardianship, and that her acquisition should be nullified? Even without
proof that she had connived with Dr. Ramos. Remembering the general doctrine that
guardianship is a trust of the highest order, and the trustee cannot be allowed to have
any inducement to neglect his ward’s interest and in line with the court’s suspicion
whenever the guardian acquires the ward’s property 1 we have no hesitation to declare
that in this case, in the eyes of the law, Socorro Roldan took by purchase her ward’s
parcels thru Dr. Ramos, and that Article 1459 of the Civil Code applies.
She acted it may be true without malice; there may have been no previous agreement
between her and Dr. Ramos to the effect that the latter would buy the lands for her. But
the stubborn fact remains that she acquired her protege’s properties, through her
brother-in-law. That she planned to get them for herself at the time of selling them to
Dr. Ramos, may be deduced from the very short time between the two sales (one
week). The temptation which naturally besets a guardian so circumstanced,
necessitates the annulment of the transaction, even if no actual collusion is proved (so
hard to prove) between such guardian and the intermediate purchaser. This would
uphold a sound principle of equity and justice. 2
We are aware of course that in Rodriguez vs. Mactal, 60 Phil. p. 13 wherein the
guardian Mactal sold in January 1926 the property of her ward to Silverio Chioco, and
in March 1928 she bought it from Chioco, this Court said:
Paras, C.J., Padilla, Montemayor, Reyes, A., Bautista Angelo, Concepcion,
Reyes, J.B.L., and Endencia, JJ., concur.
Endnotes:
1. 25 Am. Jur. pp. 128, 130; Daniel vs. Tolon, 53 Okla. 666, 4 A. L. R. 704.

“In order to bring the sale in this case within the part of Article 1459, quoted above, it is 2. cf. Saverino vs. Severino, 44 Phil. 343. “No fraud in fact need be shown”.
essential that the proof submitted establish some agreement between Silverio Chioco 3. Appellee’s brief, p. 20.
and Trinidad Mactal to the effect that Chioco should buy the property for the benefit of
Mactal. If there was no such agreement, either express or implied, then the sale cannot 4. The contract with the builder called for P16,500.00; and Roldan said its total cost
be set aside . (Page 16; Italics supplied.)” amounted to P18,720.00.
However, the underlined portion was not intended to establish a general principle of
law applicable to all subsequent litigations. It merely meant that the subsequent
purchase by Mactal could not be annulled in that particular case because there was no
proof of a previous agreement between Chioco and her. The court then considered
such proof necessary to establish that the two sales were actually part of one scheme
— guardian getting the ward’s property through another person — because two years
had elapsed between the sales. Such period of time was sufficient to dispel the natural
suspicion of the guardian’s motives or actions. In the case at bar, however, only one
week had elapsed. And if we were technical, we could say, only one day had elapsed
from the judicial approval of the sale (August 12), to the purchase by the guardian (Aug.
13).
Attempting to prove that the transaction was beneficial to the minor, Appellee’s attorney
alleges that the money (P14,700) invested in the house on Tindalo Street produced for
him rentals of P2,400 yearly; whereas the parcels of land yielded to his step-mother
only an average of P1,522 per year. 3 The argument would carry some weight if that
house had been built out of the purchase price of P14,700 only. 4 One thing is
certain: the calculation does not include the price of the lot on which the house was
erected. Estimating such lot at P14,700 only, (ordinarily the city lot is more valuable
than the building) the result is that the price paid for the seventeen parcels gave the
minor an income of only P1,200 a year, whereas the harvest from the seventeen
parcels netted his step-mother a yearly profit of P1,522.00. The minor was thus on the
losing end.
Hence, from both the legal and equitable standpoints these three sales should not be
sustained:the first two for violation of article 1459 of the Civil Code; and the third
because Socorro Roldan could pass no title to Emilio Cruz. The annulment carries with
is (Article 1303 Civil Code) the obligation of Socorro Roldan to return the 17 parcels
together with their fruits and the duty of the minor, through his guardian to repay
P14,700 with legal interest.
Judgment is therefore rendered:
a. Annulling the three contracts of sale in question; b. declaring the minor as the owner
of the seventeen parcels of land, with the obligation to return to Socorro Roldan the
price of P14,700 with legal interest from August 12, 1947; c. Ordering Socorro Roldan
and Emilio Cruz to deliver said parcels of land to the minor; d. Requiring Socorro
Roldan to pay him beginning with 1947 the fruits, which her attorney admits, amounted
to P1,522 a year; e. Authorizing the minor to deliver directly to Emilio Cruz, out of the
price of P14,700 above mentioned, the sum of P3,000; and f. charging Appellees with
the costs. SO ORDERED.
EN BANC
[A.C. No. 1302. April 26, 1991.]
PAULINO VALENCIA, complainant, vs. ATTY. ARSENIO FER. CABANTING,
respondent.
[A.C. No. 1391. April 26, 1991.]
CONSTANCIA L. VALENCIA, complainant, vs. ATTY. DIONISIO C. ANTINIW, ATTY.
EDUARDO U. JOVELLANOS and ATTY. ARSENIO FER. CABANTING, respondents.
[A.C. No. 1543. April 26, 1991.]
LYDIA BERNAL , complainant, vs. ATTY. DIONISIO C. ANTINIW , respondent.
SYLLABUS
1. LEGAL AND JUDICIAL ETHICS; ATTORNEY AND CLIENT; PROHIBITED
TRANSACTIONS. — Public policy prohibits the transactions in view of the fiduciary
relationship involved. It is intended to curtail any undue in􏰂uence of the lawyer upon
his client. Greed may get the better of the sentiments of loyalty and disinterestedness.
Any violation of this prohibition would constitute malpractice (In re Attorney Melchor
Ruste, 40 O.G. p. 78) and is a ground for suspension. (Beltran vs. Fernandez, 70 Phil.
248).
2. ID.; ID.; ID.; APPLIES WHILE LITIGATION IS PENDING. — Art. 1491, prohibiting
the sale to the counsel concerned, applies only while the litigation is pending. (Director
of Lands vs. Adaba, 88 SCRA 513; Hernandez vs. Villanueva, 40 Phil. 775).
3. ID.; ID.; ID.; ID.; A THING IS IN LITIGATION WHILE A CERTIORARI IS STILL IN
PROGRESS; CASE AT BAR. — In the case at bar, while it is true that Atty. Arsenio
Fer Cabanting purchased the lot after finality of judgment, there was still a pending
certiorari proceeding. 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. (Gan Tingco vs. Pabinguit, 35 Phil. 81). Logic dictates, in
certiorari proceedings, that the appellate court may either grant or dismiss the petition.
Hence, it is not safe to conclude, for purposes under Art. 1491 that the litigation has
terminated when the judgment of the trial court become final while a certiorari
connected therewith is still in progress. Thus, purchase of the property by Atty.
Cabanting in this case constitutes malpractice in violation of Art. 1491 and the Canons
of Professional Ethics. Clearly, this malpractice is a ground for suspension.
4. REMEDIAL LAW; EVIDENCE; CREDIBILITY OF WITNESSES; AFFIRMATIVE
TESTIMONY IS GIVEN GREATER WEIGHT THAN NEGATIVE TESTIMONY. — It is
asserted by Paulino that Atty. Antiniw asked for and received the sum of P200.00 in
consideration of his executing the document "Compraventa Definitiva" which would
show that Paulino bought the property. This charge, Atty. Antiniw simply denied. It is
settled jurisprudence that affirmative testimony is given greater weight than negative
testimony (Bayasen vs. CA, L- 25785, Feb. 26, 1981; Vda. de Ramos vs. CA, et al., L-
40804, Jan. 31, 1978). When an individual's integrity is challenged by evidence, it is
not enough that he deny the charges against him; he must meet the issue and
overcome the evidence for the relator and show proofs that he still maintains the highest
degree of morality and integrity which at all time is expected of him. (De los Reyes vs.
Aznar, Adm. Case No. 1334, Nov. 28, 1989).
5. ID.; ID.; ID.; TESTIMONY OF A FARMER WHO FINISHED ONLY GRADE IV ON
DELICATE SUBJECT GIVEN CREDENCE. — Although Paulino was a common farmer
who finished only Grade IV, his testimony, even if not corroborated by another witness,
deserves credence and can be relied upon. His declaration dwelt on a subject which
was so delicate and confidential that it would be difficult to believe that he fabricated
his evidence.
6. LEGAL AND JUDICIAL ETHICS; ATTORNEY AND CLIENT; FIRST DUTY OF A
LAWYER IS NOT TO CLIENT BUT TO ADMINISTRATION OF JUSTICE. — A lawyer
owes entire devotion to the interest of his client (Santos vs. Dichoso, 84 SCRA 622),
but not at the expense of truth. (Cosmos Foundry Shop workers Union vs. La Bu, 63
SCRA 313). The first duty of a lawyer is not to his client but to the administration of
justice. (Lubiano vs. Gordalla, 115 SCRA 459) To that end, his client's success is wholly
subordinate. His conduct ought to and must always be scrupulously observant of law
and ethics. While a lawyer must advocate his client's cause in utmost earnestness and
with the maximum skill he can marshal, he is not at liberty to resort to illegal means for
his client's interest. It is the duty of an attorney to employ, for the purpose of maintaining
the causes confided to him, such means as are consistent with truth and honor.
(Pangan vs. Ramos, 93 SCRA 87).
7. ID.; DISBARMENT; NOT MEANT AS PUNISHMENT BUT INTENDED TO
PROTECT THE ADMINISTRATION OF JUSTICE. — Membership in the Bar is a
privilege burdened with conditions. By far, the most important of them is mindfulness
that a lawyer is an officer of the court. (In re: Ivan T. Publico, 102 SCRA 722). This
Court may suspend or disbar a lawyer whose acts show his unfitness to continue as a
member of the Bar. (Halili vs. CIR, 136 SCRA 112). Disbarment, therefore, is not meant
as a punishment depriving him of a source of livelihood but is rather intended to protect
the administration of justice by requiring that those who exercise this function should
be competent, honorable and reliable in order that courts and the public may rightly
repose confidence in them. (Noriega vs. Sison, 125 SCRA 293). Atty. Antiniw failed to
live up to the high standards of the law profession.
8. ID.; ID.; RESPONDENT LAWYER SHOULD BE GIVEN OPPORTUNITY TO
CROSS-EXAMINE WITNESSES. — Procedural due process demands that respondent
lawyer should be given an opportunity to cross-examine the witnesses against him. He
enjoys the legal presumption that he is innocent of the charges against him until the
contrary is proved. (Santos vs. Dichoso, 84 SCRA 622). The case must be established
by clear, convincing and satisfactory proof. (Camus vs. Diaz, Adm. Case No. 1616,
February 9, 1989). Since Atty. Antiniw was not accorded this procedural due process,
it is but proper that the direct testimony of Lydia Bernal be stricken out.
9. ID.; ID.; AFFIDAVIT OF DESISTANCE DOES NOT RESULT IN DISMISSAL OF
CASE; EXCEPTION. — In view also of the affidavit of desistance executed by the
complainant, Administrative Case No. 1543 should be dismissed. Although the filing of
an affidavit of desistance by complainant for lack of interest does not ipso facto result
in the termination of a case for suspension or disbarment of an erring lawyer. (Munar
vs. Flores, 122 SCRA 448), We are constrained in the case at bar, to dismiss the same
because there was no evidence to substantiate the charges.
10. REMEDIAL LAW; EVIDENCE; HEARSAY. — The additional charge against Atty.
Antiniw in Administrative Case No. 1391 is predicated on the information furnished by
Lydia Bernal. It was not based on the personal knowledge of Constancia L. Valencia:
hence, hearsay. "Any evidence, whether oral or documentary, is hearsay if its probative
value is not based on the personal knowledge of the witness but on the knowledge of
some other person not on the witness stand." (Regalado, Remedial Law Compendium,
6th ed., vol. 2, 1989, p. 486). Being hearsay, the evidence presented is inadmissible.
11. LEGAL AND JUDICIAL ETHICS; ATTORNEY; CAMARADERIE AMONG
LAWYERS IS NOT PROOF OF CONSPIRACY. — Besides, the camaraderie among
lawyers is not proof of conspiracy, but a sign of brotherhood among them. One of the
fourfold duties of a lawyer in his duty to the Bar. A lawyer should treat the opposing
counsel, and his brethren in the law profession, with courtesy, dignity and civility. They
may "do as adversaries do in the law: strive mightily but (they) eat and drink as friends."
This friendship does not connote conspiracy.
 DECISION
PER CURIAM p:
These consolidated administrative cases seek to disbar respondents Dionisio Antiniw,
Arsenio Fer Cabanting and Eduardo Jovellanos (the last named, now an MCTC Judge)
for grave malpractice and misconduct in the exercise of their legal profession committed
in the following manner:
1. Administrative Cases No. 1302 and 1391
In 1933, complainant Paulino Valencia (Paulino in short) and his wife Romana allegedly
bought a parcel of land, where they built their residential house, from a certain Serapia
Raymundo, an heir of Pedro Raymundo the original owner. However, they failed to
register the sale or secure a transfer certificate of title in their names.
Sometime in December, 1968, a conference was held in the house of Atty. Eduardo
Jovellanos to settle the land dispute between Serapia Raymundo (Serapia in short)
another heir of Pedro Raymundo, and the Valencia spouses since both were relatives
and distant kin of Atty. Jovellanos. Serapia was willing to relinquish ownership if the
Valencias could show documents evidencing ownership. Paulino exhibited a deed of
sale written in the Ilocano dialect. However, Serapia claimed that the deed covered a
different property. Paulino and Serapia were not able to settle their differences. (Report
of Investigating Judge Catalino Castañeda, Jr., pp. 21-22).
On December 15, 1969 Serapia, assisted by Atty. Arsenio Fer Cabanting, filed a
complaint against Paulino for the recovery of possession with damages. The case was
docketed as Civil Case No. V-2170, entitled "Serapia Raymundo, Plaintiff, versus
Paulino Valencia, Defendant." (Report, p. 11)
Summoned to plead in Civil Case No. V-2170, the Valencias engaged the services of
Atty.
Dionisio Antiniw. Atty. Antiniw advised them to present a notarized deed of sale in lieu
of the private document written in Ilocano. For this purpose, Paulino gave Atty. Antiniw
an amount of P200.00 to pay the person who would falsify the signature of the alleged
vendor (Complaint, p. 2; Rollo, p. 7). A "Compraventa Definitiva" (Exh. B) was executed
purporting to be a sale of the questioned lot.llcd
On January 22, 1973, the Court of First Instance of Pangasinan, Branch V, rendered a
decision in favor of plaintiff, Serapia Raymundo. The lower court expressed the belief
that the said document is not authentic. (Report, p. 14).
Paulino, thereafter, filed a Petition for Certiorari, under Rule 65, with Preliminary
Injunction before the Court of Appeals alleging that the trial court failed to provide a
workable solution concerning his house. While the petition was pending, the trial court,
on March 9, 1973, issued an order of execution stating that "the decision in this case
has already become final and executory" (Exhibits 3 and 3-A). On March 14, 1973, a
writ of execution was issued.
On March 20, 1973, Serapia sold 40 square meters of the litigated lot to Atty. Jovellanos
and the remaining portion she sold to her counsel, Atty. Arsenio Fer Cabanting, on April
25, 1973. (Annex "A" of Administrative Case No. 1302).
On March 4, 1974, Paulino filed a disbarment proceeding (docketed as Administrative
Case No. 1302) against Atty. Cabanting on the ground that said counsel allegedly
violated Article 1491 of the New Civil Code as well as Article II of the Canons of
Professional Ethics, prohibiting the purchase of property under litigation by a counsel.
On March 21, 1974 the appellate court dismissed the petition of Paulino.
On October 14, 1974, Constancia Valencia, daughter of Paulino, filed a disbarment
proceeding (docketed as Administrative Case No. 1391) against Atty. Dionisio Antiniw
for his participation in the forgery of "Compraventa Definitiva" and its subsequent
introduction as evidence for his client; and also, against Attys. Eduardo Jovellanos and
Arsenio Cabanting for purchasing a litigated property allegedly in violation of Article
1491 of the New Civil Code; and against the three lawyers, for allegedly rigging Civil
Case No. V-2170 against her parents.
On August 17, 1975, Constancia Valencia filed additional charges against Atty. Antiniw
and Atty. Jovellanos as follows:
"1. AGAINST ATTY. DIONISIO ANTINIW:
"In the year 1973 Atty. Dionisio Antiniw fraudulently and in confabulation with one Lydia
Bernal had a deed of sale, fabricated, executed and ratified before him as Notary Public
by one Santiago Bernal in favor of Lydia Bernal when as a matter of fact said Santiago
Bernal had died already about eight years before in the year 1965.
"2. AGAINST ATTY. EDUARDO JOVELLANOS:
"In the year 1954 Atty. Eduardo Jovellanos, fraudulently and in bad faith, in
confabulation with Rosa de los Santos as vendee had, as Notary Public, executed and
ratified before him, two (2) deeds of sale in favor of said Rosa de los Santos when as
a matter of fact the said deeds were not in fact executed by the
supposed vendor Rufino Rincoraya and so said Rufino Rincoraya had filed a Civil Case
in Court to annul and declare void the said sales." (p. 7, Report)
2. Administrative Case No. 1543.
A deed of donationpropter nuptias, involving the transfer of a piece of land by the
grandparents of Lydia Bernal (complainant) in favor of her parents, was lost during the
last world war. For this reason, her grandmother (the living donor) executed a deed of
confirmation of the donation propter nuptias with renunciation of her rights over the
property. (Complaint, p. 1). Notwithstanding the deed, her grandmother still offered to
sell the same property in favor of the complainant, ostensibly to strengthen the deed of
donation (to prevent others from claiming the property).prLL
On consultation, Atty. Antiniw advised them to execute a deed of sale. Atty. Antiniw
allegedly prepared and notarized the deed of sale in the name of her grandfather
(deceased at the time of signing) with her grandmother's approval.
Felicidad Bernal-Duzon, her aunt who had a claim over the property, filed a complaint
against her (Lydia Bernal) and her counsel, Atty. Antiniw for falsification of a public
document. (Complaint, pp. 1-2) The fiscal exonerated the counsel for lack of evidence,
while a case was filed in court against Lydia Bernal.
On October 3, 1975, Lydia Bernal filed a disbarment proceeding (docketed as
Administrative Case No. 1543) against Atty. Antiniw for illegal acts and bad advice.
Pursuant to the resolution of the First Division of this Court dated December 9, 1974,
the resolution of the Second Division dated March 3, 1975 and the two resolutions of
the Second Division both dated December 3, 1975, Administrative Cases Nos. 1302,
1391 and 1543 were referred to the Office of the Solicitor General for investigation,
report and recommendation.
Upon formal request of Constancia L. Valencia and Lydia Bernal dated March 3, 1976,
all of these cases were ordered consolidated by Solicitor General Estelito P. Mendoza
per his handwritten directive of March 9, 1976.
On April 12, 1988, We referred the investigation of these cases to the Integrated Bar of
the Philippines. When Atty. Jovellanos was appointed as Municipal Circuit Trial Court
Judge of Alcala-Bautista, Pangasinan, We referred the investigation of these cases to
Acting Presiding Judge Cesar Mindaro, Regional Trial Court, Branch 50, Villasis,
Pangasinan, for further investigation.
In view of the seriousness of the charge against the respondents and the alleged
threats against the person of complainant Constancia L. Valencia, We directed the
transfer of investigation to the Regional Trial Court of Manila.
The three administrative cases were raf􏰂ed to Branch XVII of the Regional Trial Court
of Manila, under the sala of Judge Catalino Castañeda, Jr.
After investigation, Judge Catalino Castañeda, Jr., recommended the dismissal of
cases against Atty. Jovellanos and Atty. Arsenio Fer Cabanting; dismissal of
Administrative Case No. 1543 and the additional charges in Administrative Case No.
1391 against Antiniw and Judge Jovellanos; however, he recommended the
suspension of Atty. Antiniw from the practice of law for six months finding him guilty of
malpractice in falsifying the "Compraventa Definitiva."
The simplified issues of these consolidated cases are:
I. Whether or not Atty. Cabanting purchased the subject property in violation of Art.
1491 of the New Civil Code.cdll
II. Whether or not Attys. Antiniw and Jovellanos are guilty of malpractice in falsifying
notarial documents.
III. Whether or not the three lawyers connived in rigging Civil Case No. V-2170.
I Under Article 1491 of the New Civil Code:
The following persons cannot acquire by purchase, even at a public of judicial auction,
either in person or through the mediation of another:
xxx xxx xxx
(5) . . .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 make take part by virtue of their profession.
Public policy prohibits the transactions in view of the fiduciary relationship involved. It
is intended to curtail any undue in􏰂uence of the lawyer upon his client. Greed may get
the better of the sentiments of loyalty and disinterestedness. Any violation of this
prohibition would constitute malpractice (In re Attorney Melchor Ruste, 40 O.G. p. 78)
and is a ground for suspension. (Beltran vs. Fernandez, 70 Phil. 248).
Art. 1491, prohibiting the sale to the counsel concerned, applies only while the litigation
is pending. (Director of Lands vs. Adaba, 88 SCRA 513; Hernandez vs. Villanueva, 40
Phil. 775).
In the case at bar, while it is true that Atty. Arsenio Fer Cabanting purchased the lot
after finality of judgment, there was still a pending certiorari proceeding. 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. (Gan Tingco
vs. Pabinguit, 35 Phil. 81). Logic dictates, in certiorari proceedings, that the appellate
court may either grant or dismiss the petition. Hence, it is not safe to conclude, for
purposes under Art. 1491 that the litigation has terminated when the judgment of the
trial court become final while a certiorari connected therewith is still in progress. Thus,
purchase of the property by Atty. Cabanting in this case constitutes malpractice in
violation of Art. 1491 and the Canons of Professional Ethics. Clearly, this malpractice
is a ground for suspension.
The sale in favor of Atty. Jovellanos does not constitute malpractice. There was no
attorney-client relationship between Serapia and Atty. Jovellanos, considering that the
latter did not take part as counsel in Civil Case No. V-2170. The transaction is not
covered by Art. 1491 nor by the Canons adverted to.
II
It is asserted by Paulino that Atty. Antiniw asked for and received the sum of P200.00
in consideration of his executing the document "Compraventa Definitiva" which would
show that Paulino bought the property. This charge, Atty. Antiniw simply denied. It is
settled jurisprudence that affirmative testimony is given greater weight than negative
testimony
(Bayasen vs. CA, L-25785, Feb. 26, 1981; Vda. de Ramos vs. CA, et al., L-40804, Jan.
31, 1978). When an individual's integrity is challenged by evidence, it is not enough
that he deny the charges against him; he must meet the issue and overcome the
evidence for the relator and show proofs that he still maintains the highest degree of
morality and integrity which at all time is expected of him. (De los Reyes vs. Aznar,
Adm. Case No. 1334, Nov. 28, 1989).
Although Paulino was a common farmer who finished only Grade IV, his testimony,
even if not corroborated by another witness, deserves credence and can be relied upon.
His declaration dwelt on a subject which was so delicate and confidential that it would
be difficult to believe the he fabricated his evidence.llcd
There is a clear preponderant evidence that Atty. Antiniw committed falsification of a
deed of sale, and its subsequent introduction in court prejudices his prime duty in the
administration of justice as an officer of the court.
A lawyer owes entire devotion to the interest of his client (Santos vs. Dichoso, 84 SCRA
622), but not at the expense of truth. (Cosmos Foundry Shop workers Union vs. La Bu,
63 SCRA 313). The first duty of a lawyer is not to his client but to the administration of
justice. (Lubiano vs. Gordalla, 115 SCRA 459) To that end, his client's success is wholly
subordinate. His conduct ought to and must always be scrupulously observant of law
and ethics. While a lawyer must advocate his client's cause in utmost earnestness and
with the maximum skill he can marshal, he is not at liberty to resort to illegal means for
his client's interest. It is the duty of an attorney to employ, for the purpose of maintaining
the causes confided to him, such means as are consistent with truth and honor. There is no evidence on record that the three lawyers involved in these administrative
(Pangan vs. Ramos, 93 SCRA 87). cases conspired in executing the falsified "Compraventa Definitiva" and rigged the Civil
Case No. V-2170.
Membership in the Bar is a privilege burdened with conditions. By far, the most
important of them is mindfulness that a lawyer is an officer of the court. (In re: Ivan T. Atty. Jovellanos is a distant kin of the Raymundos and Valencias. In fact, he and the
Publico, 102 SCRA 722). This Court may suspend or disbar a lawyer whose acts show Valencias are neighbors and only two meters separate their houses. It would not be
his unfitness to continue as a member of the Bar. (Halili vs. CIR, 136 SCRA 112). believable that Atty. Jovellanos, a practicing lawyer, would hold a meeting with the heirs
Disbarment, therefore, is not meant as a punishment depriving him of a source of of Pedro Raymundo in his house with the intention of inducing them to sue the
livelihood but is rather intended to protect the administration of justice by requiring that Valencias. Atty. Jovellanos even tried to settle the differences between the parties in a
those who exercise this function should be competent, honorable and reliable in order meeting held in his house. He appeared in Civil Case No. V-2170 as an involuntary
that courts and the public may rightly repose confidence in them. (Noriega vs. Sison, witness to attest to the holding of the conference.
125 SCRA 293). Atty. Antiniw failed to live up to the high standards of the law
profession. Besides, the camaraderie among lawyers is not proof of conspiracy, but a sign of
brotherhood among them. One of the fourfold duties of a lawyer in his duty to the Bar.
The other charges of malpractice against Atty. Antiniw and Atty. Jovellanos should be A lawyer should treat the opposing counsel, and his brethren in the law profession, with
dismissed for lack of evidence. courtesy, dignity and civility. They may "do as adversaries do in the law: strive mightily
but (they) eat and drink as friends." This friendship does not connote conspiracy.
During the proceedings in Administrative Case No. 1543, Lydia Bernal testified in full
on direct examination, but she never submitted herself for cross-examination. Several WHEREFORE, judgment is hereby rendered declaring: 1. Dionisio Antiniw
subpoenas for cross-examination were unheeded. She eventually requested the DISBARRED from the practice of law, and his name is ordered stricken off from the roll
withdrawal of her complaint. of attorneys; 2. Arsenio Fer Cabanting SUSPENDED from the practice of law for six
months from finality of this judgment; and 3. Administrative Case No. 1391 against
Procedural due process demands that respondent lawyer should be given an Attorney Eduardo Jovellanos and additional charges therein, and Administrative Case
opportunity to cross-examine the witnesses against him. He enjoys the legal No. 1543 DISMISSED.
presumption that he is innocent of the charges against him until the contrary is proved.
(Santos vs. Dichoso, 84 SCRA 622). The case must be established by clear, convincing SO ORDERED.
and satisfactory proof. (Camus vs. Diaz, Adm. Case No. 1616, February 9, 1989). Since
Atty. Antiniw was not accorded this procedural due process, it is but proper that the Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano,
direct testimony of Lydia Gancayco, Padilla, Bidin, Sarmiento, Griño-Aquino, Medialdea, Regalado and Davide,
Jr., JJ., concur.
Bernal be stricken out.
In view also of the affidavit of desistance executed by the complainant, Administrative
Case No. 1543 should be dismissed. Although the filing of an affidavit of desistance by
complainant for lack of interest does not ipso facto result in the termination of a case
for suspension or disbarment of an erring lawyer. (Munar vs. Flores, 122 SCRA 448),
We are constrained in the case at bar, to dismiss the same because there was no
evidence to substantiate the charges.
The additional charge against Atty. Antiniw in Administrative Case No. 1391 is
predicated on the information furnished by Lydia Bernal. It was not based on the
personal knowledge of Constancia L. Valencia: hence, hearsay. "Any evidence,
whether oral or documentary, is hearsay if its probative value is not based on the
personal knowledge of the witness but on the knowledge of some other person not on
the witness stand." (Regalado, Remedial Law Compendium, 6th ed., vol. 2, 1989, p.
486). Being hearsay, the evidence presented is inadmissible.LLjur
The additional charge filed by Constancia L. Valencia against Atty. Jovellanos in
Administrative Case No. 1391 was not proved at all. Complainant failed to prove her
additional charges.
III
FIRST DIVISION
G.R. No. L-36902 January 30, 1982
LUIS PICHEL, petitioner,
vs.
PRUDENCIO ALONZO, respondent.
SYLLABUS
Public Lands; Cancellation of award of public land does not automatically divest
the awardee of his rights to the land.—Before going into the issues raised by the instant
Petition, the matter of whether, under the admitted facts of this case, the respondent
had the right or authority to execute the “Deed of Sale” in 1968, his award over Lot No.
21 having been cancelled previously by the Board of Liquidators on January 27, 1965,
must be clarified. The case in point is Ras vs. Sua wherein it was categorically stated
by this Court that a cancellation of an award granted pursuant to the provisions of
Republic Act No. 477 does not automatically divest the awardee of his rights to the
land. Such cancellation does not result in the immediate reversion of the property
subject of the award, to the State. Speaking through Mr. Justice J.B.L. Reyes, this Court
ruled that “until and unless an appropriate proceeding for reversion is instituted by the
State, and its reacquisition of the ownership and possession of the land decreed by a
competent court, the grantee cannot be said to have been divested of whatever right
that he may have over the same property.”
Contracts; Interpretation of a document is not called for where its terms are
clear.—The first five assigned errors are interrelated, hence, We shall consider them
together. To begin with, We agree with petitioner that construction or interpretation of
the document in question is not called for. A perusal of the deed fails to disclose any
ambiguity or obscurity in its provisions, nor is there doubt as to the real intention of the
contracting parties. The terms of the agreement are clear and unequivocal, hence the
literal and plain meaning thereof should be observed.
Same; Sale; Potential fruits of apiece of land may be the subject of sale.—The
subject matter of the contract of sale in question are the fruits of the coconut trees on
the land during the years from September 15, 1968 up to January 1, 1976, which
subject matter is a determinate thing. Under Article 1461 of the New Civil Code, things
having a potential existence may be the object of the contract of sale.
And in Sibal vs. Valdez, 50 Phil 512, pending crops which have potential
existence may be the subject matter of sale.
Same; Same; A transfer of possession or ownership of the fruits of apiece of land
cannot be equated with the transfer of possession or ownership of the land.—The
contract was clearly a “sale of the coconut fruits.” The vendor sold, transferred and
conveyed “by way of absolute sale, all the coconut fruits of his land,” thereby divesting
himself of all ownership or dominion over the fruits during the seven-year period. The
possession and enjoyment of the coconut trees cannot be said to be the possession
and enjoyment of the land itself because these rights are distinct and separate from
each other, the first pertaining to the accessory or improvements (coconut trees) while
the second, to the principal (the land). A transfer of the accessory or improvement is
not a transfer of the principal. It is the other way around, the accessory follows the
principal. Hence, the sale of the nuts cannot be interpreted nor construed to be a lease
of the trees, much less extended further to include the lease of the land itself.
Public Lands; Sale; The grantee of public land is not prohibited from selling the
fruits thereof, like coconut fruits, which are meant to be gathered and severed from the
trees.—Resolving now this principal issue, We find after a close and careful
examination of the terms of the first paragraph of Section 8 hereinabove quoted, that
the grantee of a parcel of land under R. A. No. 477 is not prohibited from alienating or
disposing of the natural and/or industrial fruits of the land awarded to him. What the law
expressly disallows is the encumbrance or alienation of the land itself or any of the
permanent improvements thereon. Permanent improvements on a parcel of land are
things incorporated or attached to the property in a fixed manner, naturally or artificially.
They include whatever is built, planted or sown on the land which is characterized by
fixity, immutability or immovability. Houses, buildings, machinery, animal houses, trees
and plants would fall under the category of permanent improvements, the alienation or
encumbrance of which is prohibited by R.A. No. 477. While coconut trees are
permanent improvements of a land, their nuts are natural or industrial fruits which are
meant to be gathered or severed from the trees, to be used, enjoyed, sold or otherwise
disposed of by the owner of the land. Herein respondents, as the grantee of Lot No. 21
from the Government, had the right and prerogative to sell the coconut fruits of the trees
growing on the property.
Same; Same; Sale of produce or fruits of land acquired from the government
under RA. 477 does not violate the purpose of said law.—The purpose of the law is not
violated when a grantee sells the produce or fruits of his land. On the contrary, the aim
of the law is thereby achieved, for the grantee is encouraged and induced to be more
industrious and productive, thus making it possible for him and his family to be
economically self-sufficient and to lead a respectable life. At the same time, the
Government is assured of payment on the annual installments on the land. We agree
with herein petitioner that it could not have been the intention of the legislature to
prohibit the grantee from selling the natural and industrial fruits of his land, for
otherwise, it would lead to an absurd situation wherein the grantee would not be able
to receive and enjoy the fruits of the property in the real and complete sense.
Same; Same; Contracts; A contracting party cannot be allowed to impugn the
contract he has entered into by saying he can change his mind.—Respondent through
counsel, in his Answer to the Petition contends that even granting arguendo that he
executed a deed of sale of the coconut fruits, he has the “privilege to change his mind
and claim it as (an) implied lease,” and he has the “legitimate right” to file an action for
annulment “which no law can stop.” He claims it is his “sole construction of the meaning
of the transaction that should prevail and not petitioner, (sic).” Respondent’s counsel
either mis-applies the law or is trying too hard and going too far to defend his client’s
hopeless cause. Suffice it to say that respondent-grantee, after having received the
consideration for the sale of his coconut fruits, cannot be allowed to impugn the validity
of the contracts he entered into, to the prejudice of petitioner who contracted in good
faith and for a consideration.
PETITION to review on certiorari the decision of the Court of First Instance of Basilan
City.
The facts are stated in the opinion of the Court.
GUERRERO, J.:
This is a petition to review on certiorari the decision of the Court of First Instance of
Basilan City dated January 5, 1973 in Civil Case No. 820 entitled "Prudencio Alonzo,
plaintiff, vs. Luis Pichel, defendant."
This case originated in the lower Court as an action for the annulment of a "Deed of
Sale" dated August 14, 1968 and executed by Prudencio Alonzo, as vendor, in favor of
Luis Pichel, as vendee, involving property awarded to the former by the Philippine
Government under Republic Act No. 477. Pertinent portions of the document sued upon
read as follows:
 That the VENDOR for and in consideration of the sum of FOUR THOUSAND
TWO HUNDRED PESOS (P4,200.00), Philippine Currency, in hand paid by
the VENDEE to the entire satisfaction of the VENDOR, the VENDOR hereby
sells transfers, and conveys, by way of absolute sale, all the coconut fruits of
his coconut land, designated as Lot No. 21 - Subdivision Plan No. Psd- 32465,
situated at Balactasan Plantation, Lamitan, Basilan City, Philippines;
That for the herein sale of the coconut fruits are for all the fruits on the
aforementioned parcel of land presently found therein as well as for future
fruits to be produced on the said parcel of land during the years period; which
shag commence to run as of SEPTEMBER 15,1968; up to JANUARY 1, 1976
(sic);
That the delivery of the subject matter of the Deed of Sale shall be from time
to time and at the expense of the VENDEE who shall do the harvesting and
gathering of the fruits;
That the Vendor's right, title, interest and participation herein conveyed is of
his own exclusive and absolute property, free from any liens and
encumbrances and he warrants to the Vendee good title thereto and to defend
the same against any and all claims of all persons whomsoever. 1
After the pre-trial conference, the Court a quo issued an Order dated November 9, 1972
which in part read thus:
The following facts are admitted by the parties:
Plaintiff Prudencio Alonzo was awarded by the Government that parcel of land
designated as Lot No. 21 of Subdivision Plan Psd 32465 of Balactasan,
Lamitan, Basilan City in accordance with Republic Act No. 477. The award
was cancelled by the Board of Liquidators on January 27, 1965 on the ground
that, previous thereto, plaintiff was proved to have alienated the land to
another, in violation of law. In 197 2, plaintiff's rights to the land were
reinstated.
On August 14, 1968, plaintiff and his wife sold to defendant an the fruits of the
coconut trees which may be harvested in the land in question for the period,
September 15, 1968 to January 1, 1976, in consideration of P4,200.00. Even
as of the date of sale, however, the land was still under lease to one, Ramon
Sua, and it was the agreement that part of the consideration of the sale, in the
sum of P3,650.00, was to be paid by defendant directly to Ramon Sua so as
to release the land from the clutches of the latter. Pending said payment
plaintiff refused to snow the defendant to make any harvest.
In July 1972, defendant for the first time since the execution of the deed of
sale in his favor, caused the harvest of the fruit of the coconut trees in the
land.
xxx xxx xxx
Considering the foregoing, two issues appear posed by the complaint and the
answer which must needs be tested in the crucible of a trial on the merits, and
they are:
First.— Whether or nor defendant actually paid to plaintiff the full sum of
P4,200.00 upon execution of the deed of sale.
Second.— Is the deed of sale, Exhibit 'A', the prohibited encumbrance
contemplated in Section 8 of Republic Act No. 477? 2
Anent the first issue, counsel for plaintiff Alonzo subsequently 'stipulated and agreed
that his client ... admits fun payment thereof by defendant. 3 The remaining issue being
one of law, the Court below considered the case submitted for summary judgment on
the basis of the pleadings of the parties, and the admission of facts and documentary
evidence presented at the pre-trial conference.
The lower court rendered its decision now under review, holding that although the
agreement in question is denominated by the parties as a deed of sale of fruits of the
coconut trees found in the vendor's land, it actually is, for all legal intents and purposes,
a contract of lease of the land itself. According to the Court:
... the sale aforestated has given defendant complete control and enjoyment
of the improvements of the land. That the contract is consensual; that its
purpose is to allow the enjoyment or use of a thing; that it is onerous because
rent or price certain is stipulated; and that the enjoyment or use of the thing
certain is stipulated to be for a certain and definite period of time, are
characteristics which admit of no other conclusion. ... The provisions of the
contract itself and its characteristics govern its nature. 4
The Court, therefore, concluded that the deed of sale in question is an encumbrance
prohibited by Republic Act No. 477 which provides thus:
Sec. 8. Except in favor of the Government or any of its branches, units, or
institutions, land acquired under the provisions of this Act or any permanent
improvements thereon shall not be thereon and for a term of ten years from
and after the date of issuance of the certificate of title, nor shall they become
liable to the satisfaction of any debt contracted prior to the expiration of such
period.
Any occupant or applicant of lands under this Act who transfers whatever
rights he has acquired on said lands and/or on the improvements thereon
before the date of the award or signature of the contract of sale, shall not be
entitled to apply for another piece of agricultural land or urban, homesite or
residential lot, as the case may be, from the National Abaca and Other Fibers
Corporation; and such transfer shall be considered null and void. 5
The dispositive portion of the lower Court's decision states:
WHEREFORE, it is the judgment of this Court that the deed of sale, Exhibit
'A', should be, as it is, hereby declared nun and void; that plaintiff be, as he is,
ordered to pay back to defendant the consideration of the sale in the sum of
P4,200.00 the same to bear legal interest from the date of the filing of the
complaint until paid; that defendant shall pay to the plaintiff the sum of P500.00
as attorney's fees.
Costs against the defendant. 6
Before going into the issues raised by the instant Petition, the matter of whether, under
the admitted facts of this case, the respondent had the right or authority to execute the
"Deed of Sale" in 1968, his award over Lot No. 21 having been cancelled previously by
the Board of Liquidators on January 27, 1965, must be clarified. The case in point
is Ras vs. Sua 7 wherein it was categorically stated by this Court that a cancellation of
an award granted pursuant to the provisions of Republic Act No. 477 does not
automatically divest the awardee of his rights to the land. Such cancellation does not
result in the immediate reversion of the property subject of the award, to the State.
Speaking through Mr. Justice J.B.L. Reyes, this Court ruled that "until and unless an
appropriate proceeding for reversion is instituted by the State, and its reacquisition of
the ownership and possession of the land decreed by a competent court, the grantee
cannot be said to have been divested of whatever right that he may have over the same
property." 8
There is nothing in the record to show that at any time after the supposed cancellation
of herein respondent's award on January 27, 1965, reversion proceedings against Lot
No. 21 were instituted by the State. Instead, the admitted fact is that the award was
reinstated in 1972. Applying the doctrine announced in the above-cited Ras case,
therefore, herein respondent is not deemed to have lost any of his rights as grantee of
Lot No. 21 under Republic Act No. 477 during the period material to the case at bar,
i.e., from the cancellation of the award in 1965 to its reinstatement in 1972. Within said
period, respondent could exercise all the rights pertaining to a grantee with respect to
Lot No. 21.
This brings Us to the issues raised by the instant Petition. In his Brief, petitioner
contends that the lower Court erred:
1. In resorting to construction and interpretation of the deed of sale in question
where the terms thereof are clear and unambiguous and leave no doubt as to
the intention of the parties;
2. In declaring — granting without admitting that an interpretation is necessary
— the deed of sale in question to be a contract of lease over the land itself
where the respondent himself waived and abandoned his claim that said deed
did not express the true agreement of the parties, and on the contrary,
respondent admitted at the pre-trial that his agreement with petitioner was one
of sale of the fruits of the coconut trees on the land;
3. In deciding a question which was not in issue when it declared the deed of
sale in question to be a contract of lease over Lot 21;
4. In declaring furthermore the deed of sale in question to be a contract of
lease over the land itself on the basis of facts which were not proved in
evidence;
5. In not holding that the deed of sale, Exhibit "A" and "2", expresses a valid
contract of sale;
6. In not deciding squarely and to the point the issue as to whether or not the
deed of sale in question is an encumbrance on the land and its improvements
prohibited by Section 8 of Republic Act 477; and
7. In awarding respondent attorney's fees even granting, without admitting,
that the deed of sale in question is violative of Section 8 of Republic Act 477.
The first five assigned errors are interrelated, hence, We shall consider them together.
To begin with, We agree with petitioner that construction or interpretation of the
document in question is not called for. A perusal of the deed fails to disclose any
ambiguity or obscurity in its provisions, nor is there doubt as to the real intention of the
contracting parties. The terms of the agreement are clear and unequivocal, hence the
literal and plain meaning thereof should be observed. Such is the mandate of the Civil
Code of the Philippines which provides that:
Art. 1370. If the terms of a contract are clear and leave no doubt upon the
intention of the contracting parties, the literal meaning of its stipulation shall
control ... .
Pursuant to the afore-quoted legal provision, the first and fundamental duty of the courts
is the application of the contract according to its express terms, interpretation being
resorted to only when such literal application is impossible. 9
Simply and directly stated, the "Deed of Sale dated August 14, 1968 is precisely what
it purports to be. It is a document evidencing the agreement of herein parties for
the sale of coconut fruits of Lot No. 21, and not for the lease of the land itself as found
by the lower Court. In clear and express terms, the document defines the object of the
contract thus: "the herein sale of the coconut fruits are for an the fruits on the
aforementioned parcel of land during the years ...(from) SEPTEMBER 15, 1968; up to
JANUARY 1, 1976." Moreover, as petitioner correctly asserts, the document in question
expresses a valid contract of sale. It has the essential elements of a contract of sale as
defined under Article 1485 of the New Civil Code which provides thus:
Art. 1458. By the contract of sale one of the contracting parties obligates
himself to transfer the ownership of and to deliver a determinate thing, and the
other to pay therefor a price certain in money or its equivalent.
A contract of sale may be absolute or conditional.
The subject matter of the contract of sale in question are the fruits of the coconut trees
on the land during the years from September 15, 1968 up to January 1, 1976, which
subject matter is a determinate thing. Under Article 1461 of the New Civil Code, things
having a potential existence may be the object of the contract of sale. And in Sibal vs.
Valdez, 50 Phil. 512, pending crops which have potential existence may be the subject
matter of the sale. Here, the Supreme Court, citing Mechem on Sales and American
cases said which have potential existence may be the subject matter of sale. Here, the
Supreme Court, citing Mechem on Sales and American cases said:
Mr. Mechem says that a valid sale may be made of a thing, which though not
yet actually in existence, is reasonably certain to come into existence as the
natural increment or usual incident of something already in existence, and
then belonging to the vendor, and the title will vest in the buyer the moment
the thing comes into existence. (Emerson vs. European Railway Co., 67 Me.,
387; Cutting vs. Packers Exchange, 21 Am. St. Rep. 63) Things of this nature
are said to have a potential existence. A man may sell property of which he is
potentially and not actually possess. He may make a valid sale of the wine
that a vineyard is expected to produce; or the grain a field may grow in a given
time; or the milk a cow may yield during the coming year; or the wool that shall
thereafter grow upon sheep; or what may be taken at the next case of a
fisherman's net; or fruits to grow; or young animals not yet in existence; or the
goodwill of a trade and the like. The thing sold, however, must be specific and
Identified. They must be also owned at the time by the vendor. (Hull vs. Hull
48 Conn. 250 (40 Am. Rep., 165) (pp. 522-523).
We do not agree with the trial court that the contract executed by and between the
parties is "actually a contract of lease of the land and the coconut trees there." (CFI
Decision, p. 62, Records). The Court's holding that the contract in question fits the
definition of a lease of things wherein one of the parties binds himself to give to another
the enjoyment or use of a thing for a price certain and for a period which may be definite
or indefinite (Art. 1643, Civil Code of the Philippines) is erroneous. The essential
difference between a contract of sale and a lease of things is that the delivery of the
thing sold transfers ownership, while in lease no such transfer of ownership results as
the rights of the lessee are limited to the use and enjoyment of the thing leased.
In Rodriguez vs. Borromeo, 43 Phil. 479, 490, the Supreme Court held:
Since according to article 1543 of the same Code the contract of lease is
defined as the giving or the concession of the enjoyment or use of a thing for
a specified time and fixed price, and since such contract is a form of enjoyment
of the property, it is evident that it must be regarded as one of the means of
enjoyment referred to in said article 398, inasmuch as the terms enjoyment,
use, and benefit involve the same and analogous meaning relative to the
general utility of which a given thing is capable. (104 Jurisprudencia Civil,
443)
In concluding that the possession and enjoyment of the coconut trees can therefore be
said to be the possession and enjoyment of the land itself because the defendant-
lessee in order to enjoy his right under the contract, he actually takes possession of the
land, at least during harvest time, gather all of the fruits of the coconut trees in the land,
and gain exclusive use thereof without the interference or intervention of the plaintiff-
lessor such that said plaintiff-lessor is excluded in fact from the land during the period
aforesaid, the trial court erred. The contract was clearly a "sale of the coconut fruits."
The vendor sold, transferred and conveyed "by way of absolute sale, all the coconut
fruits of his land," thereby divesting himself of all ownership or dominion over the fruits
during the seven-year period. The possession and enjoyment of the coconut trees
cannot be said to be the possession and enjoyment of the land itself because these
rights are distinct and separate from each other, the first pertaining to the accessory or
improvements (coconut trees) while the second, to the principal (the land). A transfer
of the accessory or improvement is not a transfer of the principal. It is the other way
around, the accessory follows the principal. Hence, the sale of the nuts cannot be
interpreted nor construed to be a lease of the trees, much less extended further to
include the lease of the land itself.
The real and pivotal issue of this case which is taken up in petitioner's sixth assignment
of error and as already stated above, refers to the validity of the "Deed of Sale", as such
contract of sale, vis-a-vis the provisions of Sec. 8, R.A. No. 477. The lower Court did
not rule on this question, having reached the conclusion that the contract at bar was
one of lease. It was from the context of a lease contract that the Court below determined
the applicability of Sec. 8, R.A. No. 477, to the instant case.
Resolving now this principal issue, We find after a close and careful examination of the
terms of the first paragraph of Section 8 hereinabove quoted, that the grantee of a
parcel of land under R.A. No. 477 is not prohibited from alienating or disposing of the
natural and/or industrial fruits of the land awarded to him. What the law expressly
disallows is the encumbrance or alienation of the land itself or any of the permanent
improvements thereon. Permanent improvements on a parcel of land are things
incorporated or attached to the property in a fixed manner, naturally or artificially. They
include whatever is built, planted or sown on the land which is characterized by fixity,
immutability or immovability. Houses, buildings, machinery, animal houses, trees and
plants would fall under the category of permanent improvements, the alienation or
encumbrance of which is prohibited by R.A. No. 477. While coconut trees are
permanent improvements of a land, their nuts are natural or industrial fruits which are
meant to be gathered or severed from the trees, to be used, enjoyed, sold or otherwise
disposed of by the owner of the land. Herein respondents, as the grantee of Lot No. 21
from the Government, had the right and prerogative to sell the coconut fruits of the trees
growing on the property.
By virtue of R.A. No. 477, bona fide occupants, veterans, members of guerilla
organizations and other qualified persons were given the opportunity to acquire
government lands by purchase, taking into account their limited means. It was intended
for these persons to make good and productive use of the lands awarded to them, not
only to enable them to improve their standard of living, but likewise to help provide for
the annual payments to the Government of the purchase price of the lots awarded to
them. Section 8 was included, as stated by the Court a quo, to protect the grantees
from themselves and the incursions of opportunists who prey on their misery and
poverty." It is there to insure that the grantees themselves benefit from their respective
lots, to the exclusion of other persons.
The purpose of the law is not violated when a grantee sells the produce or fruits of his
land. On the contrary, the aim of the law is thereby achieved, for the grantee is
encouraged and induced to be more industrious and productive, thus making it possible
for him and his family to be economically self-sufficient and to lead a respectable life.
At the same time, the Government is assured of payment on the annual installments
on the land. We agree with herein petitioner that it could not have been the intention of
the legislature to prohibit the grantee from selling the natural and industrial fruits of his
land, for otherwise, it would lead to an absurd situation wherein the grantee would not
be able to receive and enjoy the fruits of the property in the real and complete sense.
Respondent through counsel, in his Answer to the Petition contends that even
granting arguendo that he executed a deed of sale of the coconut fruits, he has the
"privilege to change his mind and claim it as (an) implied lease," and he has the
"legitimate right" to file an action for annulment "which no law can stop." He claims it is
his "sole construction of the meaning of the transaction that should prevail and not
petitioner. (sic). 10 Respondent's counsel either misapplies the law or is trying too hard
and going too far to defend his client's hopeless cause. Suffice it to say that respondent-
grantee, after having received the consideration for the sale of his coconut fruits, cannot
be allowed to impugn the validity of the contracts he entered into, to the prejudice of
petitioner who contracted in good faith and for a consideration.
The issue raised by the seventh assignment of error as to the propriety of the award of
attorney's fees made by the lower Court need not be passed upon, such award having
been apparently based on the erroneous finding and conclusion that the contract at bar
is one of lease. We shall limit Ourselves to the question of whether or not in accordance
with Our ruling in this case, respondent is entitled to an award of attorney's fees. The
Civil Code provides that:
Art. 2208. 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 7 L-23302, September 25, 1968, 25 SCRA 153.
with third persons or to incur expenses to protect his interest; 8 Ibid, p. 160.
9 See Pacific Oxygen and Acetylene Co. vs. Central Bank, L-21881, March 1, 1968, 22
(3) In criminal cases of malicious prosecution against the plaintiff; SCRA 917, 921.
(4) In case of a clearly unfounded civil action or proceeding against the 10 Respondent's Answer to Petition for Review, p. 5; Rollo, p. 74.
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;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that
attorney's fees and expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable.
We find that none of the legal grounds enumerated above exists to justify or warrant
the grant of attorney's fees to herein respondent.
IN VIEW OF THE FOREGOING, the judgment of the lower Court is hereby set aside
and another one is entered dismissing the Complaint. Without costs.
SO ORDERED.
Teehankee (Chairman), Makasiar, Fernandez, Melencio-Herrera and Plana, JJ.,
concur.
Footnotes
1 Exhibit "A", Folder of Exhibits.
2 Order of the lower Court dated November 9, 1972, Original Record on Appeal pp. 9-
10. The first issue was originally phrased thus: "Was the partial consideration of sale in
the sum of P 3,650.00 paid by defendant to Ramon Sua as agreed upon by the
parties?," but was later changed to what appears above, in an Order dated November
21, 197 2, Original Record on Appeal p. 12.
3 Decision of the lower Court dated January 5, 1973, Original Record on Appeal p. 16.
4 Ibid, pp. 17-18.
5 This provision has been amended by Section 2 of Presidential Decree No. 967,
promulgated on June 24, 1976, to read as follows:
"Sec. 8. Any provision of law, executive order, rules or regulations to the contrary
notwithstanding, an applicant who has acquired land pursuant to the provisions of this
Act and to whom a certificate of title has been issued covering such land may sell, cede,
transfer, or convey his rights and interests therein, including the permanent
improvements on the land, to any interested party."
6 Decision of the lower Court dated January 5, 1973, Original Record on Appeal, p. 19.