G.R. No. L-14070 March 29, 1961 II. 1.
1961 II. 1. Ang kalahati ng lahat ng aming pag-aari, matapos mabayaran ang lahat ng aking o aming pag-kakautang na
MARIA GERVACIO BLAS, MANUEL GERVACIO BLAS, LEONCIO GERVACIO BLAS and LODA GERVACIO
BLAS, plaintiffs-appellants,
vs.
ROSALINA SANTOS, in her capacity as Special Administratrix of the Estate of the deceased MAXIMA SANTOS
VDA. DE BLAS, in Sp. Proc. No. 2524, Court of First Instance of Rizal, defendants-appellants. MARTA GERVACIO
BLAS and DR. JOSE CHIVI, defendants-appellants.
This action was instituted by plaintiffs against the administration of the estate of Maxima Santos, to secure a judicial
declaration that one-half of the properties left by Maxima Santos Vda. de Blas, the greater bulk of which are set forth and
described in the project of partition presented in the proceedings for the administration of the estate of the deceased
Simeon Blas, had been promised by the deceased Maxima Santos to be delivered upon her death and in her will to the
plaintiffs, and requesting that the said properties so promised be adjudicated to the plaintiffs. The complaint also prays
for actual damages in the amount of P50,000. (Record on Appeal, pp. 1-65.) The alleged promise of the deceased Maxima
Santos is contained in a document executed by Maxima Santos on December 26, 1936 attached to the complaint as Annex
"H" and introduced at the trial as Exhibit "A". (Ibid., pp. 258-259.) The complaint also alleges that the plaintiffs are entitled
to inherit certain properties enumerated in paragraph 3 thereof, situated in Malabon, Rizal and Obando, Bulacan, but which
properties have already been in included in the inventory of the estate of the deceased Simeon Blas and evidently
partitioned and conveyed to his heirs in the proceedings for the administration of his (Simeon Blas) estate.
Defendant, who is the administratrix of the estate of the deceased Maxima Santos Vda. de Blas, filed an answer with a
counterclaim, and later, an amended answer and a counterclaim. The said amended answer admits the allegations of the
complaint as to her capacity as administratrix the death of Simeon Blas on January 3, 1937; the fact that Simeon Blas
and Marta Cruz begot three children only one of whom, namely, Eulalio Blas, left legitimate descendants; that Simeon
Blas contracted a second marriage with Maxima Santos on June 28, 1898. She denies for lack of sufficient information and
belief, knowledge edge of the first marriage of Simeon Blas to Marta Cruz, the averment that Simeon Blas and Marta Cruz
acquired properties situated in Obando, Bulacan, that said properties were utilized as capital, etc. As special defenses, she
alleges that the properties of the spouses Blas and Santos had been settled and liquidated in the project of partition of the
estate of said Simeon Blas; that pursuant to the project of partition, plaintiffs and some defendants had already received
the respective properties adjudicated to them; that the plaintiffs and the defendants Marta Geracio and Jose Chivi are
estopped from impugning the validity of the project of partition of the estate of the deceased Simeon Blas and from
questioning the ownership in the properties conveyed in the project of partition to Maxima Santos as her own exclusive
property; that the testament executed by Maxima Santos is valid, the plain plaintiffs having no right to recover any portion
of Maxima Santos' estate now under administration by the court. A counterclaim for the amount of P50,000 as damages
is also included in the complaint, as also a cross-claim against Marta Gervacio Blas and Jose Chivi.
Trial of the case was Conducted and, thereafter, the court, Hon. Gustave Victoriano, presiding, rendered judgment
dismissing the complaint, with costs against plaintiff, and dismissing also the counterclaim and cross-claim decision ,the
plaintiffs filed by the defendants. From this district have appealed to this Court.
The facts essential to an understanding of the issues involved in the case may be briefly summarized as follows: Simeon
Blas contracted a first marriage with Marta Cruz sometime before 1898. They had three children, only one of whom,
Eulalio, left children, namely, Maria Gervacio Blas, one of the plaintiffs, Marta Gervacio Blas, one of the defendants, and
Lazaro Gervacio Blas. Lazaro died in 1950, and is survived by three legitimate children who are plaintiffs herein, namely,
Manuel Gervacio Blas, Leoncio Gervacio Blas and Loida Gervacio Blas. Marta Cruz died in 1898, and the following year,
Simeon Blas contracted a second marriage with Maxima Santos. At the time of this second marriage, no liquidation of the
properties required by Simeon Blas and Marta Cruz was made. Three of the properties left are fishponds located in Obando,
Bulacan. Maxima Santos does not appear to have apported properties to her marriage with Simeon Blas.
On December 26, 1936, only over a week before over a week before his death on January 9, 1937, Simeon Blas executed
a last will and testament. In the said testament Simeon Blas makes the following declarations:
I. 2. Sa panahon ng aking pangalawang asawa, MAXIMA SANTOS DE BLAS, ay nagkaroon ako at nakatipon ng mga
kayamanan (bienes) at pag-aari (propriedades) na ang lahat ng lupa, palaisdaan at iba pang pag-aari ay umaabot
sa halagang ANIM NA RAAN PITONG PU'T WALONG DAAN LIBO WALONG DAAN WALONG PUNG PISO (678,880-00)
sang-ayon sa mga halaga sa amillarimento (valor Amillarado.)
mag-asawa, kung mayroon man, yayamang ang lahat ng ito ay kita sa loob ng matrimonio (bienes ganaciales) ay
bahagi ng para sa aking asawa, MAXIMA SANTOS DE BLAS, sang-ayon sa batas. (Record on Appeal, pp. 250-251.)
The above testamentary provisions may be translated as follows:
I. 2. During my second marriage with Maxima Santos de Blas, I possessed and acquired wealth and properties,
consisting of lands, fishponds and other kinds of properties, the total assessed value of which reached the amount
P678,880.00.
II. 1. One-half of our properties, after the payment of my and our indebtedness, all these properties having been
acquired during marriage (conjugal properties), constitutes the share of my wife Maxima Santos de Blas, according
to the law.
At the time of the execution of said will, Andres Pascual a son-in-law of the testator, and Avelina Pascual and others, were
present. Andres Pascual had married a descendant by the first marriage. The will was prepared by Andres Pascual, with
the help of his nephew Avelino Pascual. The testator asked Andres Pascual to prepare a document which was presented
in court as Exhibit "A", thus:
Q — Was there anybody who asked you to prepare this document?
A — Don Simeon Blas asked me to prepare this document (referring to Exhibit "A"), (t.s.n., Sarmiento to, P. 24).
The reason why the testator ordered the preparation of Exhibit "A" was because the properties that the testator had
acquired during his first marriage with Marta Cruz had not been liquidated and were not separated from those acquired
during the second marriage. Pascual's testimony is as follows:
Q — To whom do you refer with the word "they"?
A — Simeon Blas and his first wife, Marta Cruz. When Marta Cruz died they had not made a liquidation of their conjugal
properties and so all those properties were included all in the assets of the second marriage, and that is the reason why
this document was prepared. (t.s.n., Sarmiento, p. 36.)
The above testimony is fully corroborated by that of Leoncio Gervacio, son-in-law of Simeon Blas.
Q — Please state to the Court?
A — My children were claiming from their grandfather Simeon Blas the properties left by their grandmother Marta Cruz
in the year 1936.
Q — And what happened with that claim of your children against Simeon Blas regarding the assets or properties of the
first marriage that were left after the death of Marta Cruz in 1936?
A — The claim was not pushed through because they reached into an agreement whereby the parties Simeon Blas Maxima
Santos, Maria Gervacio Bias, Marta Gervacio Blas and Lazaro Gervacio Blas agreed that Simeon Blas and Maxima Blas
will give one-half of the estate of Simeon Blas. (t.s.n., Sarmiento, pp. 143-144).
The document which was thus prepared and which is marked as Exhibit "A" reads in Tagalog, thus: and which, translated
into English, reads as follows:
KNOW ALL MEN BY THESE PRESENTS:
That I MAXIMA SANTOS DE BLAS, of legal age, married to SIMEON BLAS, resident of Malabon, Rizal, Philippines,
voluntarily state:
That I have read and knew the contents of the will signed by my husband, SIMEON BLAS, (2) and I promise on my word
of honor in the presence of my husband that I will respect and obey all and every disposition of said will (3) and
furthermore, I promise in this document that all the properties my husband and I will leave, the portion and share
corresponding to me when I make my will, I will give one-half (½) to the heirs and legatees or the beneficiaries named
in the will of my husband, (4) and that I can select or choose any of them, to whom I will give depending upon the
respect, service and treatment accorded to me.
IN WITNESS WHEREOF, I signed this document this 26th day of December, 1936 at San Francisco del Monte, San Juan,
Rizal, Philippines. (Exh. "A", pp. 30-31, Appellant's brief).
The court below held that said Exhibit "A" has not created any right in favor of plaintiffs which can serve as basis for the
complaint; that neither can it be considered as a valid and enforceable contract for lack of consideration and because it
deals with future inheritance. The court also declared that Exhibit "A" is not a will because it does not comply with the
requisites for the execution of a will; nor could it be considered as a donation, etc.
Both the court below in its decision and the appellees in their brief before us, argue vehemently that the heirs of Simeon
Blas and his wife Marta Cruz can no longer make any claim for the unliquidated conjugal properties acquired during said
first marriage, because the same were already included in the mass of properties constituting the estate of the deceased
Simeon Blas and in the adjudications made by virtue of his will, and that the action to recover the same has prescribed.
This contention is correct. The descendants of Marta Cruz can no longer claim the conjugal properties that she and her
husband may have required during their marriage although no liquidation of such properties and delivery thereof to the
heirs of Marta Cruz have been made, no action to recover said propertied having been presented in the proceedings for
the settlement of the estate of Simeon Blas.
But the principal basis for the plaintiffs' action in the case at bar is the document Exhibit "A". It is not disputed that th is
document was prepared at the instance of Simeon Blas for the reason that the conjugal properties of me on Blas for the
reason his first marriage had not been liquidated; that it was prepared at the same time as the will of Simeon Blas on
December 26, 1936, at the instance of the latter himself. It is also not disputed that the document was signed by Maxima
Santos and one copy thereof, which was presented in court as Exhibit "A", was kept by plaintiffs' witness Andres Pascual.
Plaintiffs-appellants argue before us that Exhibit "A" is both a trust agreement and a contract in the nature of a compromise
to avoid litigation. Defendants-appellees, in answer, claim that it is neither a trust agreement nor a compromise a
agreement. Considering that the properties of the first marriage of Simeon Blas had not been liquidated when Simeon Blas
executed his will on December 26, 1936', and the further fact such properties where actually , and the further fact that
included as conjugal properties acquired during the second marriage, we find, as contended by plaintiffs-appellants that
the preparation and execution of Exhibit "A" was ordered by Simeon Blas evidently to prevent his heirs by his first marriage
from contesting his will and demanding liquidation of the conjugal properties acquired during the first marriage, and an
accounting of the fruits and proceeds thereof from the time of the death of his first wife.
Exhibit "A", therefore, appears to be the compromise defined in Article 1809 of the Civil Code of Spain, in force at the time
of the execution of Exhibit "A", which provides as follows:
Compromise is a contract by which each of the parties in interest, by giving, promising, or retaining something avoids
the provocation of a suitor terminates one which has already the provocation been instituted. (Emphasis supplied.)
Exhibit "A" states that the maker (Maxima Santos) had read and knew the contents of the will of her husband read and
knew the contents of the will Simeon Blas — she was evidently referring to the declaration in the will(of Simeon Blas) that
his properties are conjugal properties and one-half thereof belongs to her (Maxima Santos) as her share of the conjugal
assets under the law. The agreement or promise that Maxima Santos makes in Exhibit "A" is to hold one-half of her said
share in the conjugal assets in trust for the heirs and legatees of her husband in his will, with the obligation of conveying
the same to such of his heirs or legatees as she may choose in her last will and testament. It is to be noted that the
conjugal properties referred to are those that were actually existing at that time, December 26, 1936. Simeon Blas died
on January 9, 1937. On June 2, 1937, an inventory of the properties left by him, all considered conjugal, was submitted
by Maxima Santos herself as administratrix of his estate. A list of said properties is found in Annex "E", the complete
inventory submitted by Maxima Santos Vda. de Blas, is administratrix of the estate of her husband, dated March 10, 1939.
The properties which were given to Maxima Santos as her share in the conjugal properties are also specified in the project
of partition submitted by said Maxima Santos herself on March 14, 1939. (Record on Appeal, pp. 195-241.) Under Exhibit
"A", therefore, Maxima Santos contracted the obligation and promised to give one-half of the above indicated properties
to the heirs and legatees of Simeon Blas.
Counsel for the defendant-appellee claims Exhibit "A" is a worthless piece of paper because it is not a will nor a
donation mortis causa nor a contract. As we have in indicated above, it is a compromise and at the same time a contract
with a sufficient cause or consideration. It is also contended that it deals with future inheritance. We do not think that
Exhibit "A" is a contract on future inheritance. it is an obligation or promise made by the maker to transmit one-half of
her share in the conjugal properties acquired with her husband, which properties are stated or declared to be conjugal
properties in the will of the husband. The conjugal properties were in existence at the time of the execution of Exhibit "A"
on December 26, 1936. As a matter of fact, Maxima Santos included these properties in her inventory of her husband's
estate of June 2, 1937. The promise does not refer to any properties that the maker would inherit upon the death of her
husband, because it is her share in the conjugal assets. That the kind of agreement or promise contained in Exhibit "A" is
not void under Article 1271 of the old Civil Code, has been decided by the Supreme Court of Spain in its decision of October
8, 19154, thus:
Que si bien el art. 1271 del Codigo civil dispone que sobre la herenciafutura no se podra celebrar otros contratos que aquellos cuyo objecto
seapracticar entre vivos la division de un caudal, conforme al articulo 1056, esta prohibicion noes aplicable al caso, porque la obligacion que
contrajoel recurr en contrato privado de otorgar testamento e instituir heredera a su subrina de los bienes que adquirio en virtud de herencia,
procedentes desu finada consorte que le quedasen sobrantes despues de pagar las deudas, y del ganacial que se expresa, asi como de
reconocer, ademas, con alguna cosaa otros sobrinos, se refiere a bienes conocidos y determinados existentes cuando tal compromisi se
otorgo, y no a la universalidad de una herencia que, sequn el art. 659 del citado Codigo civil, as determina a muerte, constituyendola todos
los bienes, derechos y obligaciones que por ella no sehayan extinguido: ..." (Emphasis supplied.)
It will be noted that what is prohibited to be the subject matter of a contract under Article 1271 of the Civil Code is " future
inheritance." To us future inheritance is any property or right not in existence or capable of determination at the time of
the contract, that a person may in the future acquire by succession. The properties subject of the contract Exhibit "A" are
well defined properties, existing at the time of the agreement, which Simeon Blas declares in his statement as belonging
to his wife as her share in the conjugal partnership. Certainly his wife's actual share in the conjugal properties may not be
considered as future inheritance because they were actually in existence at the time Exhibit "A" was executed.
The trial court held that the plaintiffs-appellants in the case at bar are concluded by the judgement rendered in the
proceedings for the settlement of the estate of Simeon Blas for the reason that the properties left by him belonged to
himself and his wife Maxima Santos; that the project of partition in the said case, adjudicating to Maxima Santos one-half
as her share in the conjugal properties, is a bar to another action on the same subject matter, Maxima Santos having
become absolute owner of the said properties adjudicated in her favor. As already adverted to above, these contentions
would be correct if applied to the claim of the plaintiffs-appellants that said properties were acquired with the first wife of
Simeon Blas, Marta Cruz. But the main ground upon which plaintiffs base their present action is the document Exhibit "A",
already fully considered above. As this private document contains the express promise made by Maxima Santos to convey
in her testament, upon her death, one-half of the conjugal properties she would receive as her share in the conjugal
properties, the action to enforce the said promise did not arise until and after her death when it was found that she did
not comply with her above-mentioned promise. (Art. 1969, old Civil Code.) The argument that the failure of the plaintiffs-
appellants herein to oppose the project of partition in the settlement of the estate of Simeon Blas, especially that portion
of the project which assigned to Maxima Santos one-half of all the conjugal properties bars their present action, is,
therefore, devoid of merit. It may be added that plaintiffs-appellants did not question the validity of the project of partition
precisely because of the promise made by Maxima Santos in the compromise Exhibit "A"; they acquised in the approval
of said project of partition because they were relying on the promise made by Maxima Santos in Exhibit "A", that she
would transmit one-half of the conjugal properties that she was going to receive as her share in the conjugal partnership
upon her death and in her will, to the heirs and legatees of her husband Simeon Blas.
Neither can the claim of prescription be considered in favor of the defendants. The right of action arose at the time of the
death of Maxima Santos on October 5,1956, when she failed to comply with the promise made by her in Exhibit "A". The
plaintiffs-appellants immediately presented this action on December 27, 1956, upon learning of such failure on the part of
Maxima Santos to comply with said promise. This defense is, therefore, also without merit.
It is next contended by the defendant-appellee that Maxima Santos complied with her above-mentioned promise, — that
Andres Pascual, Tomasa Avelino, Justo Garcia, Ludovico Pimpin and Marta Gervacio Blas were given substancial legacies
in the will and testament of Maxima Santos. To determine whether she had actually complied with the promise made in
Exhibit "A", there is herein set forth a list only of the fishponds and their respective areas as contained in the list of
properties she acquired as her share in the conjugal partnership, which list includes, besides many ricelands as well as
residential lots, thus:
31. Paco, Obando, Bulacan 5.8396 has.
32. Pangjolo, Obando 3.5857 "
34. Batang Pirasuan, Lubao, Pampanga 11.9515 "
35. Calangian, Lubao, Pampanga 30.2059 "
38. Bakuling, Lubao, Pampanga 215.4325 "
39. Bakuling, Lubao, Pampanga 8.3763 "
40. Bangkal, Sinubli 23.0730 "
41. Tagulod, 6.8692 "
44. Bangkal Pugad (a) 34.2779 "
 (b) 51.7919 " Court of First Instance of Rizal in Civil Case No. 6707, entitled "Testamentaria del Finado Don Simeon Blas, Maxima Santos
(c) 2.5202 " Vda. de Bias, Administradora"; and that she failed to comply with her aforementioned obligation. (Exhibit "A")
45. Magtapat Bangkal, Lubao, Pampanga (a) 18.0024 "
WHEREFORE, the judgment appealed from is hereby reversed and the defendant-appellee, administratrix of the estate of
(b) 7.3265 " Maxima Santos, is ordered to convey and deliver one-half of the properties adjudicated o Maxima Santos as her share in
(c) 53.5180 " the conjugal properties in said Civil Case No. 6707, entitled "Testamentaria del Finado Don Simeon Blas, Maxima Santos
46. Pinanganakan, Lubao, Pampanga 159.0078 " Vda. de Blas, Administradora", to the heirs and the legatees of her husband Simeon Blas. Considering that all said heirs
47. Emigdio Lingid, Lubao, Pampanga 34.5229 "
and legatees, designated in the will of Simeon Blas as the persons for whose benefit Exhibit "A" had been executed, have
not appeared in these proceedings, the record is hereby remanded to the court below, with instructions that, after the
48. Propios, Lubao, Pampanga 80.5382 "
conveyance of the properties hereinabove ordered had been effected, the said heirs and legatees (of Simeon Blas) file
49. Batang Mabuanbuan, Sexmoan, Pampanga 43.3350 "
adversary pleadings to determine the participation of each and every one of them in said properties. Costs against the
50. Binatang Mabuanbuan, Sexmoan, Pampanga 3.5069 " defendant- appellee Rosalina Santos.
51. Sapang Magtua, Sexmoan, Pampanga 56,8242 "

52. Kay Limpin, Sexmoan, Pampanga 5.0130 "

53. Calise Mabalumbum, Sexmoan, Pampanga 23.8935 "

54. Messapinit Kineke, Sexmoan, Pampanga (a) 5.2972 "

(b) 5.9230 "

(c) 1.4638 "

(d) 1.4638 "

(e) 2.8316 "

(f) 10.4412 "

(g) 3.9033 "

(h) 11.9263 "

(i) 6.0574 "

55. Dalang, Banga, Sexmoan, Pampanga 23.3989 "

62. Alaminos, Pangasinan 147.1242 "

80. Mangasu Sexmoan, Pampanga 10.000 "

81. Don Tomas, Sexmoan, Pampanga 21.6435 "

82. Matikling, Lubao, Pampanga 16.0000 "

Total area ............................... 1045.7863 "

In her will, Maxima Santos devised to Marta Gervacio Blas the 80-hectare fishpond situated in Lubao, Pampanga. The
fishpond devised is evidently that designated as "Propios" in Lubao, Pampanga, item No. 8 in the list of properties
adjudicated to her in the project of partition. (Record on Appeal, p. 215.) Considering that the total area of the fishponds
amount to 1045.7863 hectares, the 80 hectares devised to Marta Gervacio Blas is not even one-tenth of the total area of
the fishponds. Add to this the fact that in the will she imposed upon Marta Gervacio Blas de Chivi an existing obligation on
said fishponds, namely, its lease in 1957 and the duty to pay out of the rentals thereof an obligation to the Rehabilitation
Finance Corporation RFC (Ibid., pp. 262-263.) Angelina Blas was given only a lot of 150 square meters in Hulong Duhat,
Malabon, Rizal, and Leony Blas, the sum of P300.00 (Ibid., p. 264.)

It is evident from a consideration of the above figures and facts that Maxima Santos did not comply with her obligation to
devise one-half of her conjugal properties to the heirs and legatees of her husband. She does not state that she had
complied with such obligation in her will. If she intended to comply therewith by giving some of the heirs of Simeon Blas
the properties mentioned above, the most that can be considered in her favor is to deduct the value of said properties
from the total amount of properties which she had undertaken to convey upon her death.

All the issues in the pleadings of the parties and in their respective briefs, have now been fully discussed and considered.
Reiterating what we have stated above, we declare that by Exhibit "A", a compromise to avoid litigation, Maxima Santos
promised to devise to the heirs and legatees of her husband Simeon Blas, one-half of the properties she received as her
share in the conjugal partnership of herself and her husband, which share is specified in the project of partition submitted
by herself on March 14, 1939 in the settlement of the estate of her husband, and which is found on pages 195 to 240 of
the record on appeal and on pages 27 to 46 of the project of partition, submitted by Maxima Santos herself before the
G.R. No. L-4963 January 29, 1953 the new Civil Code in favor of the illegitimate children of the deceased cannot, therefore, be asserted to the impairment
of the vested right of Maria Uson over the lands in dispute.
MARIA USON, plaintiff-appellee,
vs. As regards the claim that Maria Uson, while her deceased husband was lying in state, in a gesture of pity or compassion,
MARIA DEL ROSARIO, CONCEPCION NEBREDA, CONRADO NEBREDA, DOMINADOR NEBREDA, AND FAUSTINO agreed to assign the lands in question to the minor children for the reason that they were acquired while the deceased
NEBREDA, Jr., defendants-appellants. was living with their mother and Maria Uson wanted to assuage somewhat the wrong she has done to them, this much
can be said; apart from the fact that this claim is disputed, we are of the opinion that said assignment, if any, partakes of
Maria Uson was the lawful wife of Faustino Nebreda who upon his death in 1945 left the lands involved in this litigation. the nature of a donation of real property, inasmuch as it involves no material consideration, and in order that it may be
Faustino Nebreda left no other heir except his widow Maria Uson. However, plaintiff claims that when Faustino Nebreda valid it shall be made in a public document and must be accepted either in the same document or in a separate one (Article
died in 1945, his common-law wife Maria del Rosario took possession illegally of said lands thus depriving her of their 633, old Civil Code). Inasmuch as this essential formality has not been followed, it results that the alleged assignment or
possession and enjoyment. donation has no valid effect.

Defendants in their answer set up as special defense that on February 21, 1931, Maria Uson and her husband, the late WHEREFORE, the decision appealed from is affirmed, without costs.
Faustino Nebreda, executed a public document whereby they agreed to separate as husband and wife and, in consideration
of their separation, Maria Uson was given a parcel of land by way of alimony and in return she renounced her right to
inherit any other property that may be left by her husband upon his death (Exhibit 1).

After trial, at which both parties presented their respective evidence, the court rendered decision ordering the defendants
to restore to the plaintiff the ownership and possession of the lands in dispute without special pronouncement as to costs.
Defendants interposed the present appeal.

There is no dispute that Maria Uson, plaintiff-appellee, is the lawful wife of Faustino Nebreda, former owner of the five
parcels of lands litigated in the present case. There is likewise no dispute that Maria del Rosario, one of the defendants-
appellants, was merely a common-law wife of the late Faustino Nebreda with whom she had four illegitimate children, her
now co-defendants. It likewise appears that Faustino Nebreda died in 1945 much prior to the effectivity of the new Civil
Code. With this background, it is evident that when Faustino Nebreda died in 1945 the five parcels of land he was seized
of at the time passed from the moment of his death to his only heir, his widow Maria Uson (Article 657, old Civil Code).As
this Court aptly said, "The property belongs to the heirs at the moment of the death of the ancestor as completely as if
the ancestor had executed and delivered to them a deed for the same before his death" (Ilustre vs. Alaras Frondosa, 17
Phil., 321). From that moment, therefore, the rights of inheritance of Maria Uson over the lands in question became vested.

The claim of the defendants that Maria Uson had relinquished her right over the lands in question because she expressly
renounced to inherit any future property that her husband may acquire and leave upon his death in the deed of separation
they had entered into on February 21, 1931, cannot be entertained for the simple reason that future inheritance cannot
be the subject of a contract nor can it be renounced (1 Manresa, 123, sixth edition; Tolentino on Civil Code, p. 12;
Osorio vs. Osorio and Ynchausti Steamship Co., 41 Phil., 531).

But defendants contend that, while it is true that the four minor defendants are illegitimate children of the late Faustino
Nebreda and under the old Civil Code are not entitled to any successional rights, however, under the new Civil Code which
became in force in June, 1950, they are given the status and rights of natural children and are entitled to the successional
rights which the law accords to the latter (article 2264 and article 287, new Civil Code), and because these successional
rights were declared for the first time in the new code, they shall be given retroactive effect even though the event which
gave rise to them may have occurred under the prior legislation (Article 2253, new Civil Code).

There is no merit in this claim. Article 2253 above referred to provides indeed that rights which are declared for the first
time shall have retroactive effect even though the event which gave rise to them may have occurred under the former
legislation, but this is so only when the new rights do not prejudice any vested or acquired right of the same origin. Thus,
said article provides that "if a right should be declared for the first time in this Code, it shall be effective at once, even
though the act or event which gives rise thereto may have been done or may have occurred under the prior legislation,
provided said new right does not prejudice or impair any vested or acquired right, of the same origin." As already stated
in the early part of this decision, the right of ownership of Maria Uson over the lands in question became vested in 1945
upon the death of her late husband and this is so because of the imperative provision of the law which commands that the
rights to succession are transmitted from the moment of death (Article 657, old Civil Code). The new right recognized by
G.R. No. 104482 January 22, 1996
BELINDA TAÑEDO, for herself and in representation of her brothers and sisters, and TEOFILA CORPUZ
TAÑEDO, representing her minor daughter VERNA TAÑEDO, petitioners,
vs.
THE COURT OF APPEALS, SPOUSES RICARDO M. TAÑEDO AND TERESITA BARERA TAÑEDO, respondents.
Is a sale of future inheritance valid? In multiple sales of the same real property, who has preference in ownership? What is the probative value
of the lower court's finding of good faith in registration of such sales in the registry of property? These are the main questions raised in this
Petition for review on certiorari under Rule 45 of the Rules of Court to set aside and reverse the Decision 1 of the Court of Appeals2 in CA-G.R.
CV NO. 24987 promulgated on September 26, 1991 affirming the decision of the Regional Trial Court, Branch 63, Third Judicial Region, Tarlac,
Tarlac in Civil Case No. 6328, and its Resolution denying reconsideration thereof, promulgated on May 27, 1992.
By the Court's Resolution on October 25, 1995, this case (along with several others) was transferred from the First to the Third Division and
after due deliberation, the Court assigned it to the undersigned ponente for the writing of this Decision.
On October 20, 1962, Lazardo Tañedo executed a notarized deed of absolute sale in favor of his eldest brother, Ricardo
Tañedo, and the latter's wife, Teresita Barera, private respondents herein, whereby he conveyed to the latter in
consideration of P1,500.00, "one hectare of whatever share I shall have over Lot No. 191 of the cadastral survey of Gerona,
Province of Tarlac and covered by Title T-13829 of the Register of Deeds of Tarlac", the said property being his "future
inheritance" from his parents (Exh. 1). Upon the death of his father Matias, Lazaro executed an "Affidavit of Conformity"
dated February 28, 1980 (Exh. 3) to "re-affirm, respect, acknowledge and validate the sale I made in 1962." On January
13, 1981, Lazaro executed another notarized deed of sale in favor of private respondents covering his "undivided ONE
TWELVE (1/12) of a parcel of land known as Lot 191 . . . " (Exh. 4). He acknowledged therein his receipt of P10,000.00
as consideration therefor. In February 1981, Ricardo learned that Lazaro sold the same property to his children, petitioners
herein, through a deed of sale dated December 29, 1980 (Exh. E). On June 7, 1982, private respondents recorded the
Deed of Sale (Exh. 4) in their favor in the Registry of Deeds and the corresponding entry was made in Transfer Certificate
of Title No. 166451 (Exh. 5).
Petitioners on July 16, 1982 filed a complaint for rescission (plus damages) of the deeds of sale executed by Lazaro in
favor of private respondents covering the property inherited by Lazaro from his father.
Petitioners claimed that their father, Lazaro, executed an "Absolute Deed of Sale" dated December 29, 1980 (Exit. E).
Conveying to his ten children his allotted portion tinder the extrajudicial partition executed by the heirs of Matias, which
deed included the land in litigation (Lot 191).
Petitioners also presented in evidence: (1) a private writing purportedly prepared and signed by Matias dated December
28, 1978, stating that it was his desire that whatever inheritance Lazaro would receive from him should be given to his
(Lazaro's) children (Exh. A); (2) a typewritten document dated March 10, 1979 signed by Lazaro in the presence of two
witnesses, wherein he confirmed that he would voluntarily abide by the wishes of his father, Matias, to give to his (Lazaro's)
children all the property he would inherit from the latter (Exh. B); and (3) a letter dated January 1, 1980 of Lazaro to his
daughter, Carmela, stating that his share in the extrajudicial settlement of the estate of his father was intended for his
children, petitioners herein (Exh. C).
Private respondents, however presented in evidence a "Deed of Revocation of a Deed of Sale" dated March 12, 1981 (Exh.
6), wherein Lazaro revoked the sale in favor of petitioners for the reason that it was "simulated or fictitious without any
consideration whatsoever".
Shortly after the case a quo was filed, Lazaro executed a sworn statement (Exh. G) which virtually repudiated the contents
of the Deed of Revocation of a Deed of Sale (Exh. 6) and the Deed of Sale (Exh. 4) in favor of private respondents.
However, Lazaro testified that he sold the property to Ricardo, and that it was a lawyer who induced him to execute a
deed of sale in favor of his children after giving him five pesos (P5.00) to buy a "drink"
The trial court decided in favor of private respondents, holding that petitioners failed "to adduce a proponderance of
evidence to support (their) claim." On appeal, the Court of Appeals affirmed the decision of the trial court, ruling that the
Deed of Sale dated January 13, 1981 (Exh. 9) was valid and that its registration in good faith vested title in said
respondents.
Petitioners raised the following "errors" in the respondent Court, which they also now allege in the instant Petition:
I. The trial court erred in concluding that the Contract of Sale of October 20, 1962 (Exhibit 7, Answer) is merely voidable
or annulable and not void ab initio pursuant to paragraph 2 of Article 1347 of the New Civil Code involving as it does a
"future inheritance".
II. The trial court erred in holding that defendants-appellees acted in good faith in registering the deed of sale of January
13, 1981 (Exhibit 9) with the Register of Deeds of Tarlac and therefore ownership of the land in question passed on to
defendants-appellees.
III. The trial court erred in ignoring and failing to consider the testimonial and documentary evidence of plaintiffs-
appellants which clearly established by preponderance of evidence that they are indeed the legitimate and lawful owners
of the property in question.
IV. The decision is contrary to law and the facts of the case and the conclusions drawn from the established facts are
illogical and off-tangent.
From the foregoing, the issues may be restated as follows:
1. Is the sale of a future inheritance valid?
2. Was the subsequent execution on January 13, 1981 (and registration with the Registry of Property) of a deed of sale
covering the same property to the same buyers valid?
3. May this Court review the findings of the respondent Court (a) holding that the buyers acted in good faith in registering
the said subsequent deed of sale and (b) in "failing to consider petitioners' evidence"? Are the conclusions of the
respondent Court "illogical and off-tangent"?
The Court's Ruling
At the outset, let it be clear that the "errors" which are reviewable by this Court in this petition for review on certiorari are
only those allegedly committed by the respondent Court of Appeals and not directly those of the trial court, which is not a
party here. The "assignment of errors" in the petition quoted above are therefore totally misplaced, and for that reason,
the petition should be dismissed. But in order to give the parties substantial justice we have decided to delve into the
issues as above re-stated. The errors attributed by petitioners to the latter (trial) court will be discussed only insofar as
they are relevant to the appellate court's assailed Decision and Resolution.
The sale made in 1962 involving future inheritance is not really at issue here. In context, the assailed Decision conceded
"it may be legally correct that a contract of sale of anticipated future inheritance is null and void." 3
But to remove all doubts, we hereby categorically rule that, pursuant to Article 1347 of the Civil Code, "(n)o contract may
be entered into upon a future inheritance except in cases expressly authorized by law."
Consequently, said contract made in 1962 is not valid and cannot be the source of any right nor the creator of any
obligation between the parties.
Hence, the "affidavit of conformity" dated February 28, 1980, insofar as it sought to validate or ratify the 1962 sale, is
also useless and, in the words of the respondent Court, "suffers from the same infirmity." Even private respondents in
their memorandum4 concede this.
However, the documents that are critical to the resolution of this case are: (a) the deed of sale of January 13, 1981 in
favor of private respondents covering Lazaro's undivided inheritance of one-twelfth (1/12) share in Lot No. 191, which
was subsequently registered on June 7, 1982; and (b) the deed of sale dated December 29, 1980 in favor of petitioners
covering the same property. These two documents were executed after the death of Matias (and his spouse) and after a
deed of extra-judicial settlement of his (Matias') estate was executed, thus vesting in Lazaro actual title over said property.
In other words, these dispositions, though conflicting, were no longer infected with the infirmities of the 1962 sale.
Petitioners contend that what was sold on January 13, 1981 was only one-half hectare out of Lot No. 191, citing as
authority the trial court's decision. As earlier pointed out, what is on review in these proceedings by this Court is the Court
of Appeals' decision — which correctly identified the subject matter of the January 13, 1981 sale to be the entire undivided
1/12 share of Lazaro in Lot No. 191 and which is the same property disposed of on December 29, 1980 in favor of
petitioners.
3. There is allegedly sufficient evidence showing that the deed of revocation of the sale in favor of petitioners "was tainted
with fraud or deceit."
4. There is allegedly enough evidence to show that private respondents "took undue advantage over the weakness and
unschooled and pitiful situation of Lazaro Tañedo . . ." and that respondent Ricardo Tañedo "exercised moral ascendancy
over his younger brother he being the eldest brother and who reached fourth year college of law and at one time a former
Vice-Governor of Tarlac, while his younger brother only attained first year high school . . . ;
5. The respondent Court erred in not giving credence to petitioners' evidence, especially Lazaro Tañedo's Sinumpaang
Salaysay dated July 27, 1982 stating that Ricardo Tañedo deceived the former in executing the deed of sale in favor of
private respondents.

Critical in determining which of these two deeds should be given effect is the registration of the sale in favor of private
respondents with the register of deeds on June 7, 1982. To be sure, there are indeed many conflicting documents and testimonies as well as arguments over their probative value
and significance. Suffice it to say, however, that all the above contentions involve questions of fact, appreciation of
evidence and credibility of witnesses, which are not proper in this review. It is well-settled that the Supreme Court is not
Article 1544 of the Civil Code governs the preferential rights of vendees in cases of multiple sales, as follows:
a trier of facts. In petitions for review under Rule 45 of the Revised Rules of Court, only questions of law may be raised
Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person
and passed upon. Absent any whimsical or capricious exercise of judgment, and unless the lack of any basis for the
who may have first taken possession thereof in good faith, if it should be movable property.
conclusions made by the lower courts be amply demonstrated, the Supreme Court will not disturb their findings. At most,
Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded
it appears that petitioners have shown that their evidence was not believed by both the trial and the appellate courts, and
it in the Registry of Property.
that the said courts tended to give more credence to the evidence presented by private respondents. But this in itself is
Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession;
not a reason for setting aside such findings. We are far from convinced that both courts gravely abused their respective
and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.
authorities and judicial prerogatives.

The property in question is land, an immovable, and following the above-quoted law, ownership shall belong to the buyer
As held in the recent case of Chua Tiong Tay vs. Court of Appeals and Goldrock Construction and Development Corp.7
who in good faith registers it first in the registry of property. Thus, although the deed of sale in favor of private respondents
was later than the one in favor of petitioners, ownership would vest in the former because of the undisputed fact of
registration. On the other hand, petitioners have not registered the sale to them at all. The Court has consistently held that the factual findings of the trial court, as well as the Court of Appeals, are final and
conclusive and may not be reviewed on appeal. Among the exceptional circumstances where a reassessment of facts found
by the lower courts is allowed are when the conclusion is a finding grounded entirely on speculation, surmises or
Petitioners contend that they were in possession of the property and that private respondents never took possession
conjectures; when the inference made is manifestly absurd, mistaken or impossible; when there is grave abuse of
thereof. As between two purchasers, the one who registered the sale in his favor has a preferred right over the other who
discretion in the appreciation of facts; when the judgment is premised on a misapprehension of facts; when the findings
has not registered his title, even if the latter is in actual possession of the immovable property. 5
went beyond the issues of the case and the same are contrary to the admissions of both appellant and appellee. After a
careful study of the case at bench, we find none of the above grounds present to justify the re-evaluation of the findings
As to third issue, while petitioners conceded the fact of registration, they nevertheless contended that it was done in bad of fact made by the courts below.
faith. On this issue, the respondent Court ruled;
Under the second assignment of error, plaintiffs-appellants contend that defendants-appellees acted in bad faith when
In the same vein, the ruling in the recent case of South Sea Surety and Insurance Company, Inc. vs. Hon. Court of
they registered the Deed of Sale in their favor as appellee Ricardo already knew of the execution of the deed of sale in
Appeals, et al.8 is equally applicable to the present case:
favor of the plaintiffs; appellants cite the testimony of plaintiff Belinda Tañedo to the effect that defendant Ricardo Tañedo
We see no valid reason to discard the factual conclusions of the appellate court. . . . (I)t is not the function of this Court
called her up on January 4 or 5, 1981 to tell her that he was already the owner of the land in question "but the contract
to assess and evaluate all over again the evidence, testimonial and documentary, adduced by the parties, particularly
of sale between our father and us were (sic) already consumated" (pp. 9-10, tsn, January 6, 1984). This testimony is
where, such as here, the findings of both the trial court and the appellate court on the matter coincide. (emphasis
obviously self-serving, and because it was a telephone conversation, the deed of sale dated December 29, 1980 was not
supplied)
shown; Belinda merely told her uncle that there was already a document showing that plaintiffs are the owners (p. 80).
Ricardo Tañedo controverted this and testified that he learned for the first time of the deed of sale executed by Lazaro
in favor of his children "about a month or sometime in February 1981" (p. 111, tsn, Nov. 28, 1984). . . . 6 WHEREFORE, the petition is DENIED and the assailed Decision of the Court of Appeals is AFFIRMED. No Costs.

The respondent Court, reviewing the trial court's findings, refused to overturn the latter's assessment of the testimonial
evidence, as follows;
We are not prepared to set aside the finding of the lower court upholding Ricardo Tañedo's testimony, as it involves a
matter of credibility of witnesses which the trial judge, who presided at the hearing, was in a better position to resolve.

In this connection, we note the tenacious allegations made by petitioners, both in their basic petition and in their
memorandum, as follows:
1. The respondent Court allegedly ignored the claimed fact that respondent Ricardo "by fraud and deceit and with
foreknowledge" that the property in question had already been sold to petitioners, made Lazaro execute the deed of
January 13, 1981;
2. There is allegedly adequate evidence to show that only 1/2 of the purchase price of P10,000.00 was paid at the time
of the execution of the deed of sale, contrary to the written acknowledgment, thus showing bad faith;
G.R. No. L-11240 December 18, 1957
CONCHITA LIGUEZ, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, MARIA NGO VDA. DE LOPEZ, ET AL., respondents.
The case began upon complaint filed by petitioner-appellant against the widow and heirs of the late Salvador P. Lopez to
recover a parcel of 51.84 hectares of land, situated in barrio Bogac-Linot, of the municipality of Mati, Province of Davao.
Plaintiff averred to be its legal owner, pursuant to a deed of donation of said land, executed in her favor by the late owner,
Salvador P. Lopez, on 18 May 1943. The defense interposed was that the donation was null and void for having an illicit
causa or consideration, which was the plaintiff's entering into marital relations with Salvador P. Lopez, a married man;
and that the property had been adjudicated to the appellees as heirs of Lopez by the court of First Instance, since 1949.
The Court of Appeals found that the deed of donation was prepared by the Justice of the Peace of Mati, Davao, before
whom it was signed and ratified on the date aforesaid. At the time, the appellant Liguez was a minor, only 16 years of
age. While the deed recites—
That the DONOR, Salvador P. Lopez, for and in the consideration of his love and affection for the said DONEE, Conchita
Liguez, and also for the good and valuable services rendered to the DONOR by the DONEE, does by these presents,
voluntarily give grant and donate to the said donee, etc. (Paragraph 2, Exhibit "A")
the Court of Appeals found that when the donation was made, Lopez had been living with the parents of appellant for
barely a month; that the donation was made in view of the desire of Salvador P. Lopez, a man of mature years, to have
sexual relations with appellant Conchita Liguez; that Lopez had confessed to his love for appellant to the instrumental
witnesses, with the remark that her parents would not allow Lopez to live with her unless he first donated the land in
question; that after the donation, Conchita Liguez and Salvador P. Lopez lived together in the house that was built upon
the latter's orders, until Lopez was killed on July 1st, 1943, by some guerrillas who believed him to be pro-Japanese.
It was also ascertained by the Court of Appeals that the donated land originally belonged to the conjugal partnership of
Salvador P. Lopez and his wife, Maria Ngo; that the latter had met and berated Conchita for living maritally with her
husband, sometime during June of 1943; that the widow and children of Lopez were in possession of the land and made
improvements thereon; that the land was assessed in the tax rolls first in the name of Lopez and later in that of his widow.;
and that the deed of donation was never recorded.
Upon these facts, the Court of Appeals held that the deed of donation was inoperative, and null and void (1) because the
husband, Lopez, had no right to donate conjugal property to the plaintiff appellant; and (2) because the donation was
tainted with illegal cause or consideration, of which donor and donee were participants.
Appellant vigorously contends that the Court of First Instance as well as the Court of Appeals erred in holding the donation
void for having an illicit cause or consideration. It is argued that under Article 1274 of the Civil Code of 1889 (which was
the governing law in 1948, when the donation was executed), "in contracts of pure beneficence the consideration is the
liberality of the donor", and that liberality per se can never be illegal, since it is neither against law or morals or public
policy.
The flaw in this argument lies in ignoring that under Article 1274, liberality of the do or is deemed causa in those contracts
that are of "pure" beneficence; that is to say, contracts designed solely and exclusively to procure the welfare of the
beneficiary, without any intent of producing any satisfaction for the donor; contracts, in other words, in which the idea of
self-interest is totally absent on the part of the transferor. For this very reason, the same Article 1274 provides that in
remuneratory contracts, the consideration is the service or benefit for which the remuneration is given; causa is not
liberality in these cases because the contract or conveyance is not made out of pure beneficence, but "solvendi animo."
In consonance with this view, this Supreme Court in Philippine Long Distance Co. vs. Jeturian * G.R. L-7756, July 30, 1955,
like the Supreme Court of Spain in its decision of 16 Feb. 1899, has ruled that bonuses granted to employees to excite
their zeal and efficiency, with consequent benefit for the employer, do not constitute donation having liberality for a
consideration.
Here the facts as found by the Court of Appeals (and which we can not vary) demonstrate that in making the donation in
question, the late Salvador P. Lopez was not moved exclusively by the desire to benefit appellant Conchita Liguez, but
also to secure her cohabiting with him, so that he could gratify his sexual impulses. This is clear from the confession of
Lopez to the witnesses Rodriguez and Ragay, that he was in love with appellant, but her parents would not agree unless
he donated the land in question to her. Actually, therefore, the donation was but one part of an onerous transaction (at
least with appellant's parents) that must be viewed in its totality. Thus considered, the conveyance was clearly predicated
upon an illicit causa.
Appellant seeks to differentiate between the alleged liberality of Lopez, as causa for the donation in her favor, and his
desire for cohabiting with appellant, as motives that impelled him to make the donation, and quotes from Manresa and
the jurisprudence of this Court on the distinction that must be maintained between causa and motives (De Jesus vs. Urrutia
and Co., 33 Phil. 171). It is well to note, however that Manresa himself (Vol. 8, pp. 641-642), while maintaining the
distinction and upholding the inoperativeness of the motives of the parties to determine the validity of the contract,
expressly excepts from the rule those contracts that are conditioned upon the attainment of the motives of either party.
. . . distincion importantisima, que impide anular el contrato por la sola influencia de los motivos a no ser que se hubiera
subordinando al cumplimiento de estos como condiciones la eficacia de aquel.
The same view is held by the Supreme Court of Spain, in its decisions of February 4, 1941, and December 4, 1946, holding
that the motive may be regarded as causa when it predetermines the purpose of the contract.
In the present case, it is scarcely disputable that Lopez would not have conveyed the property in question had he known
that appellant would refuse to cohabit with him; so that the cohabitation was an implied condition to the donation, and
being unlawful, necessarily tainted the donation itself.
The Court of Appeals rejected the appellant's claim on the basis of the well- known rule "in pari delicto non oritur actio"
as embodied in Article 1306 of 1889 (reproduced in Article 1412 of the new Civil Code):
ART. 1412. If the act in which the unlawful or forbidden cause consists does not constitute a criminal offense, the following
rules shall be observed:
(1) When the fault is on the part of both contracting parties, neither may recover what he has given by virtue of the
contract, or demand the performance of the other's undertaking;
(2) When only one of the contracting parties is at fault, he cannot recover, what he has given by reason of the contract,
or ask for fulfillment of what has been promised him. The other, who is not at fault, may demand the return of what he
has given without any obligation to comply with his promise.
In our opinion, the Court of Appeals erred in applying to the present case the pari delicto rule. First, because it can not be
said that both parties here had equal guilt when we consider that as against the deceased Salvador P. Lopez, who was a
man advanced in years and mature experience, the appellant was a mere minor, 16 years of age, when the donation was
made; that there is no finding made by the Court of Appeals that she was fully aware of the terms of the bargain entered
into by and Lopez and her parents; that, her acceptance in the deed of donation (which was authorized by Article 626 of
the Old Civil Code) did not necessarily imply knowledge of conditions and terms not set forth therein; and that the
substance of the testimony of the instrumental witnesses is that it was the appellant's parents who insisted on the donation
before allowing her to live with Lopez. These facts are more suggestive of seduction than of immoral bargaining on the
part of appellant. It must not be forgotten that illegality is not presumed, but must be duly and adequately proved.
In the second place, the rule that parties to an illegal contract, if equally guilty, will not be aided by the law but will both
be left where it finds them, has been interpreted by this Court as barring the party from pleading the illegality of the
bargain either as a cause of action or as a defense. Memo auditor propriam turpitudinem allegans. Said this Court in Perez
vs. Herranz, 7 Phil. 695-696:
It is unnecessary to determine whether a vessel for which a certificate and license have been fraudulently obtained incurs
forfeiture under these or any other provisions of this act. It is enough for this case that the statute prohibits such an
arrangement as that between the plaintiff and defendant so as to render illegal both the arrangement itself and all
contracts between the parties growing out of it.
It does not, however, follow that the plaintiff can succeed in this action. There are two answers to his claim as urged in
his brief. It is a familiar principle that the courts will not aid either party to enforce an illegal contract, but will leave them
both where it finds them; but where the plaintiff can establish a cause of action without exposing its illegality, the vice
does not affect his right to recover. The American authorities cited by the plaintiff fully sustain this doctrine. The principle
 applies equally to a defense. The law in those islands applicable to the case is found in article 1305 of the Civil Code,
shutting out from relief either of the two guilty parties to an illegal or vicious contract.
In the case at bar the plaintiff could establish prima facie his sole ownership by the bill of sale from Smith, Bell and Co.
and the official registration. The defendant, on his part, might overthrow this title by proof through a certain subsequent
agreement between him and the plaintiff, dated March 16, 1902, that they had become owners in common of the vessel,
'the agreement not disclosing the illegal motive for placing the formal title in the plaintiff. Such an ownership is not in
itself prohibited, for the United States courts recognize the equitable ownership of a vessel as against the holder of a
legal title, where the arrangement is not one in fraud of the law.
On this proof, the defendant being a part owner of the vessel, would have defeated the action for its exclusive possession
by the plaintiff. The burden would then be cast upon the plaintiff to show the illegality of the arrangement, which the
cases cited he would not be allowed to do.
The rule was reaffirmed in Lima vs. Lini Chu Kao, 51 Phil. 477.
The situation confronting us is exactly analogous. The appellant seeks recovery of the disputed land on the strength of a
donation regular on its face. To defeat its effect, the appellees must plead and prove that the same is illegal. But such
plea on the part of the Lopez heirs is not receivable, since Lopez, himself, if living, would be barred from setting up that
plea; and his heirs, as his privies and successors in interest, can have no better rights than Lopez himself.
Appellees, as successors of the late donor, being thus precluded from pleading the defense of immorality or illegal causa of
the donation, the total or partial ineffectiveness of the same must be decided by different legal principles. In this regard,
the Court of Appeals correctly held that Lopez could not donate the entirety of the property in litigation, to the prejudice
of his wife Maria Ngo, because said property was conjugal in character and the right of the husband to donate community
property is strictly limited by law (Civil Code of 1889, Arts. 1409, 1415, 1413; Baello vs. Villanueva, 54 Phil. 213).
ART. 1409. The conjugal partnership shall also be chargeable with anything which may have been given or promised by
the husband alone to the children born of the marriage in order to obtain employment for them or give then, a profession
or by both spouses by common consent, should they not have stipulated that such expenditures should be borne in whole
or in part by the separate property of one of them.".
ART. 1415. The husband may dispose of the property of the conjugal partnership for the purposes mentioned in Article
1409.)
ART. 1413. In addition to his powers as manager the husband may for a valuable consideration alienate and encumber
the property of the conjugal partnership without the consent of the wife.
The text of the articles makes it plain that the donation made by the husband in contravention of law is not void in its
entirety, but only in so far as it prejudices the interest of the wife. In this regard, as Manresa points out the law asks no
distinction between gratuitous transfers and conveyances for a consideration.
Puede la mujer como proprietaria hacer anular las donaciones aun durante el matrimonio? Esta es, en suma, la cuestion,
reducida a determinar si la distinta naturaleza entre los actos a titulo oneroso y los actos a titulo lucrativo, y sus especiales
y diversas circunstancias, pueden motivar una solucion diferente en cuanto a la epoca en que la mujer he de reclamar y obtener la nulidad
del acto; cuestion que no deja de ser interesantisima.lawphi1.net
El Codigo, a pesar de la variacion que ha introducido en el proyecto de 1851, poniendo como segundo parrafo del articulo 1.413, o como
limitacion de las enajenaciones u obligaciones a titulo oneroso, lo que era una limitacion general de todos los actos del marido, muestra, sin
embargo, que no ha variado de criterio y que para el las donaciones deben en todo equipararse a cualquier otro acto ilegal o frraudulento de
caracter oneroso, al decir en el art. 1.419: "Tambien se traera a colacion en el inventario de la sociedad— el importe de las donaciones y
enajenaciones que deban considerarse ilegales o fraudulentas, con sujecion al art. 1.413.' (Debio tambien citarse el articulo 1.415, que es el
que habla de donaciones.)lawphi1.net
"En resumen: el marido solo puede donar los bienes gananciales dentro de los limites marcados en el art. 1.415. Sin embargo, solo la mujer
o sus herederos pueden reclamar contra la valides de la donacion, pues solo en su interes establece la prohibicion. La mujer o sus herederos,
para poder dejar sin efecto el acto, han de sufrir verdadero perjuicio, entendiendose que no le hay hasta, tanto que, terminada por cualquier
causa la sociedad de gananciales, y hecha su liquidacion, no pueda imputarse lo donado al haber por cualquier concepto del marido, ni
obtener en su consecuencia la mujer la dibida indemnizacion. La donacioni reviste por tanto legalmente, una eficacia condicional, y en
armonia con este caracter, deben fijarse los efectos de la misma con relacion a los adquirentes y a los terceros poseedores, teniendo, en su
caso, en cuenta lo dispuesto en la ley Hipotecaria. Para prevenir todo perjuicio, puede la mujer, durante el matrimonio inmediatamente al
acto, hacer constar ante los Tribunales su existencia y solicitor medidas de precaucion, como ya se ha dicho. Para evitarlo en lo sucesivo , y
cuando las circunstancias lo requieran, puede instar la declaracion de prodigalidad.
To determine the prejudice to the widow, it must be shown that the value of her share in the property donated can not be
paid out of the husband's share of the community profits. The requisite data, however, are not available to us and
necessitate a remand of the records to the court of origin that settled the estate of the late Salvador P. Lopez.
The situation of the children and forced heirs of Lopez approximates that of the widow. As privies of their parent, they are
barred from invoking the illegality of the donation. But their right to a legitime out of his estate is not thereby affected,
since the legitime is granted them by the law itself, over and above the wishes of the deceased. Hence, the forced heirs
are entitled to have the donation set aside in so far as in officious: i.e., in excess of the portion of free disposal (Civil Code
of 1889, Articles 636, 654) computed as provided in Articles 818 and 819, and bearing in mind that "collationable gifts"
under Article 818 should include gifts made not only in favor of the forced heirs, but even those made in favor of strangers,
as decided by the Supreme Court of Spain in its decisions of 4 May 1899 and 16 June 1902. So that in computing the
legitimes, the value of the property to herein appellant, Conchita Liguez, should be considered part of the donor's estate.
Once again, only the court of origin has the requisite date to determine whether the donation is inofficious or not.
With regard to the improvements in the land in question, the same should be governed by the rules of accession and
possession in good faith, it being undisputed that the widow and heirs of Lopez were unaware of the donation in favor of
the appellant when the improvements were made.
The appellees, relying on Galion vs. Garayes, 53 Phil. 43, contend that by her failure to appear at the liquidation
proceedings of the estate of Salvador P. Lopez in July 1943, the appellant has forfeited her right to uphold the donation if
the prejudice to the widow Maria Ngo resulting from the donation could be made good out of the husband's share in the
conjugal profits. It is also argued that appellant was guilty of laches in failing to enforce her rights as donee until 1951.
This line of argument overlooks the capital fact that in 1943, appellant was still a minor of sixteen; and she did not reach
the age of majority until 1948. Hence, her action in 1951 was only delayed three years. Nor could she be properly expected
to intervene in the settlement of the estate of Lopez: first, because she was a minor during the great part of the
proceedings; second, because she was not given notice thereof ; and third, because the donation did not make her a
creditor of the estate. As we have ruled in Lopez vs. Olbes, 15 Phil. 547-548:
The prima facie donation inter vivos and its acceptance by the donees having been proved by means of a public
instrument, and the donor having been duly notified of said acceptance, the contract is perfect and obligatory and it is
perfectly in order to demand its fulfillment, unless an exception is proved which is based on some legal reason opportunely
alleged by the donor or her heirs.
So long as the donation in question has not been judicially proved and declared to be null, inefficacious, or irregular, the
land donated is of the absolute ownership of the donees and consequently, does not form a part of the property of the
estate of the deceased Martina Lopez; wherefore the action instituted demanding compliance with the contract, the
delivery by the deforciant of the land donated, or that it be, prohibited to disturb the right of the donees, should not be
considered as incidental to the probate proceedings aforementioned.
The case of Galion vs. Gayares, supra, is not in point. First, because that case involved a stimulated transfer that case
have no effect, while a donation with illegal causa may produce effects under certain circumstances where the parties are
not of equal guilt; and again, because the transferee in the Galion case took the property subject to lis pendens notice,
that in this case does not exist.
In view of the foregoing, the decisions appealed from are reversed and set aside, and the appellant Conchita Liguez
declared entitled to so much of the donated property as may be found, upon proper liquidation, not to prejudice the share
of the widow Maria Ngo in the conjugal partnership with Salvador P. Lopez or the legitimes of the forced heirs of the latter.
The records are ordered remanded to the court of origin for further proceedings in accordance with this opinion. Costs
against appellees. So ordered.
G.R. No. L-33360 April 25, 1977
MAXIMINO CARANTES (Substituted by Engracia Mabanta Carantes), petitioner,
vs.
COURT OF APPEALS, BILAD CARANTES, LAURO CARANTES, EDUARDO CARANTES and MICHAEL
TUMPAO, respondents,
This is an appeal by certiorari from the decision of the Court of Appeals in CA-G.R. 36078-R promulgated on December
23, 1970 reversing the judgment of the Court of First Instance of Baguio City, Branch II, in Civil Case 804, and from the
appellate court's resolution dated March 7, 1971 denying herein petitioner's motion for reconsideration.
Mateo Carantes was the original owner of Lot No. 44 situated at Loakan, Baguio City, as evidenced by Original Certificate
of Title No. 3 issued in his name on September 22, 1910 by virtue of Free Patent No. 5 granted to him on the same date.
In 1913 Mateo died. He was survived by his widow Ogasia and six children, namely, Bilad, Lauro, Crispino, Maximino,
Apung and Sianang, all surnamed Carantes.
In 1930 construction of the Loakan Airport was commenced by the Government. Because a portion of Lot No. 44 was
needed for the landing field, the Government instituted proceedings (Civil Case 338) for its expropriation. For the purpose,
Lot No. 44 was subdivided into Lots Nos. 44-A, 44-B, 44-C, 44-D and 44-E. The portion expropriated by the Government
was Lot No. 44-A.
In 1933 Special Proceedings Nos. 409 to 413 were filed with the court for the settlement of the estate of the late Mateo
Carantes. One of his sons, herein petitioner Maximino Carantes, was appointed and qualified as judicial administrator of
the estate. In his capacity as administrator, Maximino filed on June 20, 1939 a project of partition wherein he listed as
the heirs of Mateo Carantes who were entitled to inherit the estate, himself and his brothers and sisters, or the latter's
surviving children Apparently because negotiations were, by that time, under way for the purchase by the Government of
Lots Nos. 44-B and 44-C for the purpose of widening the Loakan Airport, the only property listed by Maximino in the
project of partition was the remaining portion of Lot No. 44.
On October 23, 1939 a deed denominated "Assignment of Right to Inheritance" was executed by four of Mateo Carantes
children, namely, Bilad, Sianang, Lauro and Crispino, and the heirs of Apung Carantes (also a son of Mateo who died in
1923), namely, Pitag, Bill, Alson, Eduardo and Juan, assigning to Maximino Carantes their rights to inheritance in Lot No.
44. The stated monetary consideration for the assignment was P1.00. However, the document contains a recital to the
effect that the said lots, "by agreement of all the direct heirs and heirs by representation of the deceased Mateo Carantes
as expressed and conveyed verbally. by him during his lifetime, rightly and exclusively belong to the particular heir,
Maximino Carantes, now and in the past in the exclusive, continuous, peaceful and notorious possession of the same for
more than ten years."
On the same date Maximino Carantes sold to the Government Lots Nos. 44-B and 44-C and divided the proceeds of the
sale among himself and the other heirs of Mateo.
On February 6, 1940, upon joint petition of the heirs of Mateo Carantes, the Court of First Instance of Baguio City issued
an Order in another proceeding — Administrative Case No. 368 — cancelling O.C.T. No. 3. Pursuant thereto the said title
was cancelled, and in its place Transfer Certificate of Title No. 2533 was issued in the joint names of the five children of
Mateo Carantes and the children of Apung Carantes (representing their deceased father) as co-owners pro indiviso, or
one-sixth share for each child.
On March 16, 1940 Maximino Carantes registered the deed of "Assignment of Right to Inheritance." Accordingly, T.C.T.
No. 2533 in the names of the heirs was cancelled, and in lieu thereof Transfer Certificate of Title No. 2540 was issued on
the same date in the name of Maximino Carantes. Also on the same date, Maximino, acting as exclusive owner of the land
covered by T.C.T. No. 2540, executed a formal deed of sale in favor of the Government over Lots Nos. 44-B and 44-C.
On February 21, 1947, as a result of the approval of the Subdivision Survey Plan psd-16786, and pursuant to the deed of
sale executed in 1940 by Maximino Carantes in favor of the Government, T.C.T. No. 2540 in Maximino's name was
cancelled, and in lieu thereof Transfer Certificate of Title No. T98, covering Lots Nos. 44-A, 44-B arid 44-C, was issued in
the name of the Government, while Transfer Certificate of Title No. T-99, covering the remaining Lots Nos. 44-D (100,
345 square meters) and 44-E (10,070 square meters) was issued in the name of Maximino Carantes, who has up to the
present remained the registered owner of said lots.
On September 4, 1958 the present complaint was filed by three children of the late Mateo Carantes, namely, Bilad, Lauro
and Crispino, and by some of the surviving heirs of Apung and of Sianang ('also children of Mateo Carantes). Maximino
Carantes was named principal defendant, and some of the heirs of Apung and Sianang were impleaded as parties-
defendants in view of their alleged reluctance to join as parties-plaintiffs.
In their complaint the plaintiffs alleged inter alia that they and/or their predecessors-in-interest executed the deed of
"Assignment of Right to Inheritance" on October 23, 1939, only because they were made to believe by the defendant
Maximino Carantes that the said instrument embodied the understanding among the parties that it merely authorized the
defendant Maximino to convey portions of Lot No. 44 to the Government in their behalf to minimize expenses and facilitate
the transaction; and that it was only on February 18, 1958, when the plaintiffs secured a copy of the deed, that they came
to know that the same purported to assign in favor of Maximino their rights to inheritance from Mateo Carantes. The
plaintiffs prayed that the deed of "Assignment of Right to Inheritance" be declared null and void; that Lots Nos. 44-D and
44-E covered by T.C.T. No. T99 be ordered partitioned into six (6) equal shares and the defendant Maximino Carantes be
accordingly ordered to execute the necessary deeds of conveyance in favor of the other distributees and that the said
defendant be ordered to pay the plaintiffs the sum of P1,000 as attorney's fees and the sum of P200 as costs of suit.
On September 10, 1958 the defendants filed a motion to dismiss on the grounds (1) that the plaintiffs' cause of action is
barred by the statute of limitations because the deed of assignment was recorded in the Registry of Property at the latest
on February 21, 1947, hence, plaintiffs' cause of action accrued from the said date, and since pursuant to article 1144 of
the new Civil Code an action based on a written contract must be brought within ten years from the time the right of action
accrues, plaintiffs' right to file the complaint had already prescribed on September 4, 1958; and (2) that the complaint
states no cause of action because ownership over the property became vested in Maximino Carantes by acquisitive
prescription ten years from its registration in his name on February, 21, 1947.
In an Order dated September 30, 1958, the trial court denied the motion to dismiss on the grounds that there are
allegations of co-ownership and trust in the complaint, and, therefore, prescription did not lie, and that the complaint
alleges that the plaintiffs discovered the alleged fraud only in February, 1958.
In their answer filed on October 7, 1958, the defendants traversed the material averments of the complaint and
alleged inter alia that the property of the deceased Mateo Carantes and his wife had been divided and distributed among
their six children; that the deed of "Assignment of Right to Inheritance" was an acknowledgment of the fact of designation
of the property therein described as specifically pertaining or belonging by right of inheritance to the defendant Maximino
Carantes: that there was never any agreement between the assignors and the assignee authorizing the latter to merely
represent his co-heirs in negotiations with the Government; and that the assignors knew fully well that the deed of
assignment contained what, on its face, it represented, By way of special defenses, the defendants alleged that any
supposed agreement between the plaintiffs and/or their predecessors-in-interest and the defendant Maximino Carantes,
other than the deed of assignment, is barred by the statute of frauds and is null and void because not in writing, much
less, in a public instrument; that the only agreement between the parties is what appears in the deed of assignment; that
the plaintiffs' right of action has already prescribed; that the defendant Maximino Carantes acquired absolute ownership
over the property in question by acquisitive prescription and registration; and that any obligation on the part of the
defendants in relation to the property had been discharged by novation, condonation and compensation. The defendants
set up the counterclaim that in the event the rights of the heirs are disturbed, the produce from the lands inherited by the
plaintiffs from Mateo Carantes as well as the real estate taxes on the land paid by the defendant Maximino Carantes should
be collated; and that the filing of the complaint being malicious, the defendants should be awarded the sum of P4,500 by
way of nominal, compensatory, moral and corrective damages, including attorney's fees and expenses of litigation. The
defendants prayed for the dismissal of the complaint and payment of damages to them.
An answer to the counterclaim was filed by the plaintiffs on November 7, 1958 denying the material allegations of the
counterclaim.
After trial, the court rendered its decision on January 28, 1965. It was the trial court's opinion that since an action based
on fraud prescribes in four years from the discovery of the fraud, and in this case the fraud allegedly perpetrated by the
defendant Maximino Carantes must be deemed to have been discovered on March 16, 1940 when the deed of assignment
was registered, the plaintiffs' right of action had already prescribed when they filed the action in 1958; and even assuming
that the land remained the common property of the plaintiffs and the defendant Maximino Carantes notwithstanding the
execution of the deed of assignment, the co-ownership was completely repudiated by the said defendant by performance
of several acts, the first of which was his execution of a deed of sale in favor of the Government on October 23, 1939,
hence, ownership had vested in the defendant Maximino Carantes by acquisitive prescription. The court accordingly
dismissed the complaint. It likewise dismissed the counterclaim.
The plaintiffs moved for reconsideration. Their motion having been denied in an Order dated March 8, 1965, they appealed
to the Court of Appeals.
As adverted to above, the Court of Appeals reversed the judgment of the trial court, hence the present recourse.
-I-
In her brief filed with this Court, the petitioner argues that the private respondents' action is not actually one for annulment
of the deed of "Assignment of Right to Inheritance" but for the reformation thereof, hence, the said action has prescribed
long before the filing of the complaint.
The petitioner's theory that the private respondents' action is for reformation of an instrument is a new one, adopted by
the petitioner for the first time on appeal to this Court. Her husband did not raise it as a defense in his answer filed with
the trial court, where, consequently, trial proceeded on the theory that the action sought the declaration of nullity of the
deed of assignment. When the case reached the respondent court the petitioner likewise did not raise this issue, although
in truth, even had she done so, it would have been a belated and futile exercise. She cannot be allowed to change her
theory of the case at this stage of the proceedings.
The settled rule is that defenses not pleaded in the answer may not be raised for the first time on appeal. 1 A party cannot,
on appeal, change fundamentally the nature of the issue in the case. 2 When a party deliberately adopts a certain theory
and the case is decided upon that theory in the court below, he will not be permitted to change the same on appeal,
because to permit him to do so would be unfair to the adverse party. 3
Consequently, we have to disregard the petitioner's theory that the action is for reformation of an instrument, and must
proceed on the basis of the issues properly raised and ventilated before the trial court.
- II -
We do not agree with the respondent court's legal conclusion that the deed of "Assignment of Right to Inheritance" is
void ab initio and inexistent on the grounds that real consent was wanting and the consideration of P1.00 is so shocking
to the conscience that there was in fact no consideration, hence, the action for the declaration of the contract's inexistence
does not prescribe pursuant to article 1410 of the new Civil Code.
Article 1409 (2) of the new Civil Code relied upon by the respondent court provides that contracts "which are absolutely
simulated or fictitious" are inexistent and void from the beginning. The basic characteristic of simulation is the fact that
the apparent contract is not really desired or intended to produce legal effects or in any way alter the juridical situation of
the parties. 4
The respondents' action may not be considered as one to declare the inexistence of a contract for lack of consideration. It
is total absence of cause or consideration that renders a contract absolutely void and inexistent. 5 In the case at bar
consideration was not absent. The sum of P1.00 appears in the document as one of the considerations for the assignment
of inheritance. In addition — and this of great legal import — the document recites that the decedent Mateo Carantes had,
during his lifetime, expressed to the signatories to the contract that the property subject-matter thereof rightly and
exclusively belonged to the petitioner Maximino Carantes. This acknowledgment by the signatories definitely constitutes
valuable consideration for the contract.
- III -
The present action is one to annul the contract entitled "Assignment of Right to Inheritance" on the ground of fraud.
Article 1390 of the new Civil code provides that a contract "where the consent is vitiated by mistake, violence, intimidation,
undue influence or fraud," is voidable or annullable. Even article 1359, which deals on reformation of instruments, provides
in its paragraph 2 that "If mistake, fraud, inequitable conduct, or accident has prevented a meeting of the minds of the
parties, the proper remedy is not reformation of the instrument but annulment of the contract," When the consent to a
contract was fraudulently obtained, the contract is avoidable. 6 Fraud or deceit does not render a contract void ab initio and
can only be a ground for rendering the contract voidable or annullable pursuant to article 1390 of the new Civil Code by a
proper action in court. 7
The present action being one to annul a contract on the ground of fraud, its prescriptive period is four years from the time
of the discovery of the fraud. 8
The next question that must be resolved is: from what time must fraud, assuming that there was fraud, be deemed to
have been discovered in the case at bar? From February, 1958, when, according to the private respondents, and as found
by the respondent court, the private respondents actually discovered that they were defrauded by the petitioner Maximino
Carantes when rumors spread that he was selling the property for half a million pesos? Or from March 16, 1940, when, as
admitted by the parties and found by both the trial court and the respondent court, the deed of "Assignment of Right to
Inheritance" was registered by the petitioner in the Office of the Register of Deeds?
The weight of authorities is to the effect that the registration of an instrument in the Office of the Register of Deeds
constitutes constructive notice to the whole world, and, therefore, discovery of the fraud is deemed to have taken place
at the time of the registration. 9 In this case the deed of assignment was registered on March 16, 1940, and in fact on the
same date T.C.T. No. 2533 in the names of the heirs of Mateo Carantes was cancelled, and T.C.T. No. 2540 in the name
of the petitioner was issued in lieu thereof. The four-year period within which the private respondents could have filed the
present action consequently commenced on March 16, 1940; and since they filed it only on September 4, 1958, it follows
that the same is barred by the statute of limitations.
The respondent court refused to accord recognition to the rule of constructive notice, because, according to it, there was
a fiduciary relationship between the parties. Upon this premise it concluded that the four-year prescriptive period should
be deemed to have commenced in February, 1958 when private respondents had actual notice of the fraud. Without
resolving the question of whether or not constructive notice applies when a fiduciary relationship exists between the parties
— a point which is not in issue in this case — we hold that the respondent court's conclusion, lacking the necessary premise
upon which it should be predicated, is erroneous.
Definitely, no express trust was created in favor of the private respondents. If trust there was, it could only be — as held
by respondent court — a constructive trust, which is imposed by law. In constructive trusts there is neither promise nor
fiduciary relations; the so-called trustee does not recognize any trust and has no intent to hold the property for the
beneficiary. 10 In at least two cases, the rule of constructive notice was applied by this Court although a constructive trust
had been created. Thus, in Lopez, et al. vs. Gonzaga, et al., 11 where the plaintiffs and the defendants were co-heirs and
the decedent owner of the lands had merely allowed the principal defendant to use the products and rentals of the lands
for purposes of coconut oil experimentation, but said defendant later caused the transfer of the certificates of title in his
own name through the registration of certain judicial orders, this Court held that the recording of the judicial orders
sufficed as notice to the other heirs, for the rule is that knowledge of what might have been revealed by proper inquiry is
imputable to the inquirer. In Gerona, et al. vs. De Guzman, et a., supra, the petitioners and the private respondents were
co-heirs, and the petitioners' action for partition and reconveyance was based upon a constructive trust resulting from
fraud. This Court held that the discovery of the fraud "is deemed to have taken place, in the case at bar, on June 25,
1948, when said instrument was filed with the Register of Deeds and new certificates of title were issued in the name of
respondents exclusively, for the registration of the deed of extra-judicial settlement constituted constructive notice to the
whole world."
- IV -
The decision under review found that a constructive trust was created in favor of the private respondents, and, holding
that an action for reconveyance based on constructive trust is imprescriptible, recognized the right of the private
respondents to file an action for reconveyance regardless of the lapse of time, citing Gayandato vs. Treasurer of the
Philippine Islands, et al. 12
We have examined Gayandato, and have failed to find support therein for the holding of the respondent court. In any
event, it is now settled that an action for reconveyance based on implied or constructive trust is prescriptible it prescribes
in ten years. 13 In this case the ten-year prescriptive period began on March 16, 1940, when the petitioner registered the
deed of "Assignment of Right to Inheritance" and secured the cancellation of the certificate of title in the joint names of
the heirs of Mateo Carantes, and, in lieu thereof, the issuance of a new title exclusively in his name. 14 Since the present
action was commenced only on September 4, 1958, it is clear that the same is barred by extinctive prescription.
-V-
It was also held by the respondent court that the petitioner was merely holding the property in trust for the benefit of his
co-heirs as administrator, hence, there was a continuing and subsisting trust, and pursuant to section 38 of the Code of
Civil Procedure, the provisions of the said Code on prescription (Secs. 40-41) do not apply. It is our view, however, that
there was no continuing and subsisting trust.
From March 16, 1940, when the petitioner registered the deed of assignment and had the Certificate of title in the names
of the heirs cancelled and a new certificate of title issued in his own name, he began to hold the property in open and
clear repudiation of any trust. 15 It will be noted that on the same date, the petitioner also executed a formal deed of sale
over portions of Lot No. 44 in favor of the Government. In 1948 he mortgaged Lot No. 44-D with the Philippine National
Bank as his exclusive property. The petitioner's exercise of such rights of dominion is anathema to the concept of a
continuing and subsisting trust. The circumstances, found by the respondent court, that the name of Mateo Carantes still
appeared in the tax declaration as owner of the land and the name of the petitioner as administrator, that the real estate
taxes, were shared by the other heirs with the petitioner, and that some of the heirs are living in houses erected by them
on the land, wane in legal significance in the face of the petitioner's aforesaid uncontroverted acts of strict dominion. In
connection with the payment of real estate taxes, it is to be noted that the respondent court also found that all the receipts
were issued in the name of the petitioner. The circumstances mentioned above do not make out a case of a continuing
and subsisting trust.
ACCORDINGLY, the judgment of the Court of Appeals appealed from is set aside, and another entered dismissing the
complaint in Civil Case No. 804 of the Court of First Instance of Baguio. No costs.
G.R. No. 126376 November 20, 2003
SPOUSES BERNARDO BUENAVENTURA and CONSOLACION JOAQUIN, SPOUSES JUANITO EDRA and NORA
JOAQUIN, SPOUSES RUFINO VALDOZ and EMMA JOAQUIN, and NATIVIDAD JOAQUIN, petitioners,
vs.
COURT OF APPEALS, SPOUSES LEONARDO JOAQUIN and FELICIANA LANDRITO, SPOUSES FIDEL JOAQUIN and
CONCHITA BERNARDO, SPOUSES TOMAS JOAQUIN and SOLEDAD ALCORAN, SPOUSES ARTEMIO JOAQUIN and
SOCORRO ANGELES, SPOUSES ALEXANDER MENDOZA and CLARITA JOAQUIN, SPOUSES TELESFORO CARREON
and FELICITAS JOAQUIN, SPOUSES DANILO VALDOZ and FE JOAQUIN, and SPOUSES GAVINO JOAQUIN and
LEA ASIS, respondents.
This is a petition for review on certiorari1 to annul the Decision2 dated 26 June 1996 of the Court of Appeals in CA-G.R. CV
No. 41996. The Court of Appeals affirmed the Decision 3 dated 18 February 1993 rendered by Branch 65 of the Regional
Trial Court of Makati ("trial court") in Civil Case No. 89-5174. The trial court dismissed the case after it found that the
parties executed the Deeds of Sale for valid consideration and that the plaintiffs did not have a cause of action against the
defendants.
The Facts
The Court of Appeals summarized the facts of the case as follows:
Defendant spouses Leonardo Joaquin and Feliciana Landrito are the parents of plaintiffs Consolacion, Nora, Emma and
Natividad as well as of defendants Fidel, Tomas, Artemio, Clarita, Felicitas, Fe, and Gavino, all surnamed JOAQUIN. The
married Joaquin children are joined in this action by their respective spouses.
Sought to be declared null and void ab initio are certain deeds of sale of real property executed by defendant parents
Leonardo Joaquin and Feliciana Landrito in favor of their co-defendant children and the corresponding certificates of title
issued in their names, to wit:
1. Deed of Absolute Sale covering Lot 168-C-7 of subdivision plan (LRC) Psd-256395 executed on 11 July 1978, in favor
of defendant Felicitas Joaquin, for a consideration of ₱6,000.00 (Exh. "C"), pursuant to which TCT No. [36113/T-172]
was issued in her name (Exh. "C-1");
2. Deed of Absolute Sale covering Lot 168-I-3 of subdivision plan (LRC) Psd-256394 executed on 7 June 1979, in favor
of defendant Clarita Joaquin, for a consideration of ₱1[2],000.00 (Exh. "D"), pursuant to which TCT No. S-109772 was
issued in her name (Exh. "D-1");
3 Deed of Absolute Sale covering Lot 168-I-1 of subdivision plan (LRC) Psd-256394 executed on 12 May 1988, in favor
of defendant spouses Fidel Joaquin and Conchita Bernardo, for a consideration of ₱54,[3]00.00 (Exh. "E"), pursuant to
which TCT No. 155329 was issued to them (Exh. "E-1");
4. Deed of Absolute Sale covering Lot 168-I-2 of subdivision plan (LRC) Psd-256394 executed on 12 May 1988, in favor
of defendant spouses Artemio Joaquin and Socorro Angeles, for a consideration of ₱[54,3]00.00 (Exh. "F"), pursuant to
which TCT No. 155330 was issued to them (Exh. "F-1"); and
5. Absolute Sale of Real Property covering Lot 168-C-4 of subdivision plan (LRC) Psd-256395 executed on 9 September
1988, in favor of Tomas Joaquin, for a consideration of ₱20,000.00 (Exh. "G"), pursuant to which TCT No. 157203 was
issued in her name (Exh. "G-1").
6. Deed of Absolute Sale covering Lot 168-C-1 of subdivision plan (LRC) Psd-256395 executed on 7 October 1988, in
favor of Gavino Joaquin, for a consideration of ₱25,000.00 (Exh. "K"), pursuant to which TCT No. 157779 was issued in
his name (Exh. "K-1").]
In seeking the declaration of nullity of the aforesaid deeds of sale and certificates of title, plaintiffs, in their complaint,
aver:
The deeds of sale, Annexes "C," "D," "E," "F," and "G," [and "K"] are simulated as they are, are NULL AND VOID AB
INITIO because –
a) Firstly, there was no actual valid consideration for the deeds of sale xxx over the properties in litis;
b) Secondly, assuming that there was consideration in the sums reflected in the questioned deeds, the properties are
more than three-fold times more valuable than the measly sums appearing therein;
c) Thirdly, the deeds of sale do not reflect and express the true intent of the parties (vendors and vendees); and
d) Fourthly, the purported sale of the properties in litis was the result of a deliberate conspiracy designed to unjustly
deprive the rest of the compulsory heirs (plaintiffs herein) of their legitime.
Necessarily, and as an inevitable consequence, Transfer Certificates of Title Nos. 36113/T-172, S-109772, 155329,
155330, 157203 [and 157779] issued by the Registrar of Deeds over the properties in litis xxx are NULL AND VOID AB
INITIO.
Defendants, on the other hand aver (1) that plaintiffs do not have a cause of action against them as well as the requisite
standing and interest to assail their titles over the properties in litis; (2) that the sales were with sufficient considerations
and made by defendants parents voluntarily, in good faith, and with full knowledge of the consequences of their deeds of
sale; and (3) that the certificates of title were issued with sufficient factual and legal basis. 4 (Emphasis in the original)
The Ruling of the Trial Court
Before the trial, the trial court ordered the dismissal of the case against defendant spouses Gavino Joaquin and Lea
Asis.5 Instead of filing an Answer with their co-defendants, Gavino Joaquin and Lea Asis filed a Motion to Dismiss. 6 In
granting the dismissal to Gavino Joaquin and Lea Asis, the trial court noted that "compulsory heirs have the right to a
legitime but such right is contingent since said right commences only from the moment of death of the decedent pursuant
to Article 777 of the Civil Code of the Philippines." 7
After trial, the trial court ruled in favor of the defendants and dismissed the complaint. The trial court stated:
In the first place, the testimony of the defendants, particularly that of the xxx father will show that the Deeds of Sale
were all executed for valuable consideration. This assertion must prevail over the negative allegation of plaintiffs.
And then there is the argument that plaintiffs do not have a valid cause of action against defendants since there can be
no legitime to speak of prior to the death of their parents. The court finds this contention tenable. In determining the
legitime, the value of the property left at the death of the testator shall be considered (Art. 908 of the New Civil Code).
Hence, the legitime of a compulsory heir is computed as of the time of the death of the decedent. Plaintiffs therefore
cannot claim an impairment of their legitime while their parents live.
All the foregoing considered, this case is DISMISSED.
In order to preserve whatever is left of the ties that should bind families together, the counterclaim is likewise
DISMISSED.
The Ruling of the Court of Appeals
The Court of Appeals affirmed the decision of the trial court.1âwphi1 The appellate court ruled:
To the mind of the Court, appellants are skirting the real and decisive issue in this case, which is, whether xxx they have
a cause of action against appellees.
Upon this point, there is no question that plaintiffs-appellants, like their defendant brothers and sisters, are compulsory
heirs of defendant spouses, Leonardo Joaquin and Feliciana Landrito, who are their parents. However, their right to the
properties of their defendant parents, as compulsory heirs, is merely inchoate and vests only upon the latter’s death.
While still alive, defendant parents are free to dispose of their properties, provided that such dispositions are not made
in fraud of creditors.
Plaintiffs-appellants are definitely not parties to the deeds of sale in question. Neither do they claim to be creditors of
their defendant parents. Consequently, they cannot be considered as real parties in interest to assail the validity of said
deeds either for gross inadequacy or lack of consideration or for failure to express the true intent of the parties. In point
is the ruling of the Supreme Court in Velarde, et al. vs. Paez, et al., 101 SCRA 376, thus:
The plaintiffs are not parties to the alleged deed of sale and are not principally or subsidiarily bound thereby; hence, they
have no legal capacity to challenge their validity.
Plaintiffs-appellants anchor their action on the supposed impairment of their legitime by the dispositions made by their
defendant parents in favor of their defendant brothers and sisters. But, as correctly held by the court a quo, "the legitime
of a compulsory heir is computed as of the time of the death of the decedent. Plaintiffs therefore cannot claim an
impairment of their legitime while their parents live."
With this posture taken by the Court, consideration of the errors assigned by plaintiffs-appellants is inconsequential.
WHEREFORE, the decision appealed from is hereby AFFIRMED, with costs against plaintiffs-appellants.
Issues
Petitioners assign the following as errors of the Court of Appeals:
1. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE CONVEYANCE IN QUESTION HAD NO VALID
CONSIDERATION.
2. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT EVEN ASSUMING THAT THERE WAS A CONSIDERATION, THE
SAME IS GROSSLY INADEQUATE.
3. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE DEEDS OF SALE DO NOT EXPRESS THE TRUE INTENT OF
THE PARTIES.
4. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE CONVEYANCE WAS PART AND PARCEL OF A CONSPIRACY
AIMED AT UNJUSTLY DEPRIVING THE REST OF THE CHILDREN OF THE SPOUSES LEONARDO JOAQUIN AND FELICIANA
LANDRITO OF THEIR INTEREST OVER THE SUBJECT PROPERTIES.
5. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT PETITIONERS HAVE A GOOD, SUFFICIENT AND VALID CAUSE
OF ACTION AGAINST THE PRIVATE RESPONDENTS.10
The Ruling of the Court
We find the petition without merit.
We will discuss petitioners’ legal interest over the properties subject of the Deeds of Sale before discussing the issues on
the purported lack of consideration and gross inadequacy of the prices of the Deeds of Sale.
Whether Petitioners have a legal interest over the properties subject of the Deeds of Sale
Petitioners’ Complaint betrays their motive for filing this case. In their Complaint, petitioners asserted that the "purported
sale of the properties in litis was the result of a deliberate conspiracy designed to unjustly deprive the rest of the
compulsory heirs (plaintiffs herein) of their legitime." Petitioners’ strategy was to have the Deeds of Sale declared void so
that ownership of the lots would eventually revert to their respondent parents. If their parents die still owning the lots,
petitioners and their respondent siblings will then co-own their parents’ estate by hereditary succession.11
It is evident from the records that petitioners are interested in the properties subject of the Deeds of Sale, but they have Petitioners ask that assuming that there is consideration, the same is grossly inadequate as to invalidate the Deeds of
failed to show any legal right to the properties. The trial and appellate courts should have dismissed the action for this Sale.
reason alone. An action must be prosecuted in the name of the real party-in-interest.12
Articles 1355 of the Civil Code states:
[T]he question as to "real party-in-interest" is whether he is "the party who would be benefitted or injured by the judgment, Art. 1355. Except in cases specified by law, lesion or inadequacy of cause shall not invalidate a contract, unless there
or the ‘party entitled to the avails of the suit.’" has been fraud, mistake or undue influence. (Emphasis supplied)

In actions for the annulment of contracts, such as this action, the real parties are those who are parties to the agreement
or are bound either principally or subsidiarily or are prejudiced in their rights with respect to one of the contracting parties
and can show the detriment which would positively result to them from the contract even though they did not intervene
in it (Ibañez v. Hongkong & Shanghai Bank, 22 Phil. 572 [1912]) xxx.
These are parties with "a present substantial interest, as distinguished from a mere expectancy or future, contingent,
subordinate, or consequential interest…. The phrase ‘present substantial interest’ more concretely is meant such interest
of a party in the subject matter of the action as will entitle him, under the substantive law, to recover if the evidence is
sufficient, or that he has the legal title to demand and the defendant will be protected in a payment to or recovery by
him."13
Petitioners do not have any legal interest over the properties subject of the Deeds of Sale. As the appellate court stated,
petitioners’ right to their parents’ properties is merely inchoate and vests only upon their parents’ death. While still living,
the parents of petitioners are free to dispose of their properties. In their overzealousness to safeguard their future legitime,
petitioners forget that theoretically, the sale of the lots to their siblings does not affect the value of their parents’ estate.
While the sale of the lots reduced the estate, cash of equivalent value replaced the lots taken from the estate.
Article 1470 of the Civil Code further provides:
Art. 1470. Gross inadequacy of price does not affect a contract of sale, except as may indicate a defect in the consent,
or that the parties really intended a donation or some other act or contract. (Emphasis supplied)
Petitioners failed to prove any of the instances mentioned in Articles 1355 and 1470 of the Civil Code which would
invalidate, or even affect, the Deeds of Sale. Indeed, there is no requirement that the price be equal to the exact value of
the subject matter of sale. All the respondents believed that they received the commutative value of what they gave. As
we stated in Vales v. Villa:19
Courts cannot follow one every step of his life and extricate him from bad bargains, protect him from unwise investments,
relieve him from one-sided contracts, or annul the effects of foolish acts. Courts cannot constitute themselves guardians
of persons who are not legally incompetent. Courts operate not because one person has been defeated or overcome by
another, but because he has been defeated or overcome illegally. Men may do foolish things, make ridiculous contracts,
use miserable judgment, and lose money by them – indeed, all they have in the world; but not for that alone can the law
intervene and restore. There must be, in addition, a violation of the law, the commission of what the law knows as an
actionable wrong, before the courts are authorized to lay hold of the situation and remedy it. (Emphasis in the original)

Whether the Deeds of Sale are void for lack of consideration Moreover, the factual findings of the appellate court are conclusive on the parties and carry greater weight when they
coincide with the factual findings of the trial court. This Court will not weigh the evidence all over again unless there has
Petitioners assert that their respondent siblings did not actually pay the prices stated in the Deeds of Sale to their been a showing that the findings of the lower court are totally devoid of support or are clearly erroneous so as to constitute
respondent father. Thus, petitioners ask the court to declare the Deeds of Sale void. serious abuse of discretion.20 In the instant case, the trial court found that the lots were sold for a valid consideration, and
that the defendant children actually paid the purchase price stipulated in their respective Deeds of Sale. Actual payment
of the purchase price by the buyer to the seller is a factual finding that is now conclusive upon us.
A contract of sale is not a real contract, but a consensual contract. As a consensual contract, a contract of sale becomes
a binding and valid contract upon the meeting of the minds as to price. If there is a meeting of the minds of the parties
as to the price, the contract of sale is valid, despite the manner of payment, or even the breach of that manner of payment. WHEREFORE, we AFFIRM the decision of the Court of Appeals in toto.
If the real price is not stated in the contract, then the contract of sale is valid but subject to reformation. If there is no
meeting of the minds of the parties as to the price, because the price stipulated in the contract is simulated, then the
contract is void.14 Article 1471 of the Civil Code states that if the price in a contract of sale is simulated, the sale is void.

It is not the act of payment of price that determines the validity of a contract of sale. Payment of the price has nothing to
do with the perfection of the contract. Payment of the price goes into the performance of the contract. Failure to pay the
consideration is different from lack of consideration. The former results in a right to demand the fulfillment or cancellation
of the obligation under an existing valid contract while the latter prevents the existence of a valid contract. 15

Petitioners failed to show that the prices in the Deeds of Sale were absolutely simulated. To prove simulation, petitioners
presented Emma Joaquin Valdoz’s testimony stating that their father, respondent Leonardo Joaquin, told her that he would
transfer a lot to her through a deed of sale without need for her payment of the purchase price. 16 The trial court did not
find the allegation of absolute simulation of price credible. Petitioners’ failure to prove absolute simulation of price is
magnified by their lack of knowledge of their respondent siblings’ financial capacity to buy the questioned lots. 17 On the
other hand, the Deeds of Sale which petitioners presented as evidence plainly showed the cost of each lot sold. Not only
did respondents’ minds meet as to the purchase price, but the real price was also stated in the Deeds of Sale. As of the
filing of the complaint, respondent siblings have also fully paid the price to their respondent father. 18

Whether the Deeds of Sale are void for gross inadequacy of price
G.R. No. 104892 November 14, 1994 a) Defendant Bonifacio Olegario is hereby ordered to pay cross-claimants Elena Adaon and Nestor Tejon in the amount
of P60,000.00 with legal interest from August 1, 1989;
BONIFACIO OLEGARIO and ADELAIDA VICTORINO, petitioners, b) Defendant Adelaida Victorino is hereby ordered to pay cross-claimants Elena Adaon and Nestor Tejon in the amount
vs. of P30,000.00 with legal interest from August 1, 1989;
THE HONORABLE COURT OF APPEALS, MANUEL RIVERA, PAZ OLEGARIO, and SOCORRO OLEGARIO- c) Defendants Bonifacio Olegario and Adelaida Victorino, jointly and severally, to pay cross-claimants the amount of
TEVES, respondents. P5,000.00 for and/as attorney's fees;

Spouses Marciliano Olegario and Aurelia Rivera-Olegario owned a parcel of land measuring 91 square meters at 198 J.P. Counter-claim interposed by herein defendants and cross-claimants are hereby DISMISSED for lack of evidence to
Rizal corner Antipolo Streets, Caloocan City as evidenced by Transfer Certificate of Title (TCT) No. 124222 of the Register support the same.
of Deeds of Caloocan City.1
Petitioners elevated the case to respondent Court of Appeals. On January 7, 1992, the Sixteenth Division of respondent
The Olegario couples were childless but reared and educated private respondents Manuel Rivera, Paz Olegario, and Socorro court affirmed the impugned Decision with modifications, viz.:
Olegario-Teves. Petitioner Bonifacio Olegario is the brother of Marciliano while petitioner Adelaida Victorino is the niece of WHEREFORE, except for the following modifications, to wit:
Aurelia. a) The extra-judicial settlement of estate executed by defendants-appellants Bonifacio Olegario and Adelaida Victorino
on May 23, 1989 as well as Transfer Certificates of Title issued subsequent thereto, namely TCT No. 190363 in the
On March 19, 1986, Aurelia Rivera-Olegario died at the age of eighty-three (83). To preclude her heirs from inheriting and
name of Bonifacio Olegario and Adelaida Victorino and TCT No. 190132 in the name of cross-appellants Elena Adaon
to avoid payment of taxes, Marciliano, then eighty (80) years old, executed on April 15, 1986 a Deed of Absolute Sale of
and Nestor Tejon are hereby declared NULL and VOID and without legal force and effect with respect to 3/4 portion of
the subject property in favor of private respondents. 2 The purported consideration was FIFTY THOUSAND PESOS
the subject lot pertaining to the plaintiffs-appellees;
(P50,000.00). The contract of sale was not registered.
b) The Register of Deeds of Caloocan City is hereby ordered to issue unto the herein plaintiffs-appellees new title
corresponding to the 3/4 part of the disputed lot; and to cancel TCT No. 190363 in the name of defendants-appellants
On March 10, 1988, Marciliano died intestate. Petitioners Bonifacio Olegario and Adelaida Victorino were the sole heirs of
Bonifacio Olegario and Adelaida Victorino and TCT No. 190132 in the name of cross-claimants-appellants Elena Adaon
spouses Olegario. On May 23, 1989, they executed a Deed of Extra-judicial Settlement of Estate3 covering the subject lot
and Nestor Tejon, and issue in lieu thereof new title corresponding only to 1/4 portion of the subject property; and
which was published in the Metropolitan Newsweek for three (3) consecutive weeks. On July 13, 1989, the said Extra-
c) Defendants-appellants Bonifacio Olegario and Adelaida Victorino are hereby ordered to pay the herein plaintiffs-
judicial Settlement was recorded in the Register of Deeds of Caloocan City. TCT No. C-124222 was then cancelled and TCT
appellees, jointly and severally, the amount of P10,000.00 as nominal damages and the further sum of P5,000.00 for
No. 190363 was issued in their names.4
and/as attorney's fees, the appealed decision is hereby AFFIRMED in all other respects. No costs.
On August 1, 1989, petitioners sold the subject lot for TWO HUNDRED THOUSAND PESOS (P200,000.00) to Elena Adaon
Petitioners now claim that respondent court erred in the following wise:
and Nestor Tejon.5 TCT No. 190132 was then issued in vendees' names.
I. THAT THE RESPONDENT COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION WHEN IT FAILED TO RESOLVE
Private respondents alleged that the Extra-judicial Settlement came to their knowledge only on August 21, 1989. On that
PETITIONERS' SECOND ASSIGNMENT OF ERROR BEFORE IT AND CLOSING ITS EYES ON THE EVIDENCE ON RECORD
same day, they tried to register their contract of sale three (3) years from its execution. The registration was denied as
PATENTLY ERRED IN NOT DECLARING THAT THE PURPORTED DEED OF ABSOLUTE SALE BETWEEN MARCILIANO
the subject property has been transferred to Elena Adaon and Nestor Tejon.
OLEGARIO AND THE PRIVATE RESPONDENTS IS NULL AND VOID FOR BEING ABSOLUTELY SIMULATED AND FICTITIOUS
The fight for ownership of the subject lot ensued. Private respondents filed Civil Case No. C-13973 for Annulment of Extra- AND FOR BEING VIOLATIVE OF ARTICLE 130 OF THE FAMILY CODE.
judicial Settlement of Estate and Damages against petitioners. 6 As special and affirmative defense, petitioners assailed
II. THAT THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN SUSTAINING THE EFFICACY OF THE UNRECORDED
the Deed of Absolute Sale between Marciliano Olegario and private respondents. On the other hand, cross-claimants Elena
DEED OF ABSOLUTE SALE OVER THAT OF THE EXTRA-JUDICIAL SETTLEMENT OF ESTATE WHICH WAS EXECUTED AND
Adaon and Nestor Tejon maintained they were buyers in good faith and for value.
RECORDED IN GOOD FAITH, CONTRARY TO THE EXPRESS PROVISIONS OF ARTICLE 1544 OF THE CIVIL CODE.
In due course, the trial court ruled in favor of private respondents. It annulled the Extra-judicial Settlement of the subject
III. THAT THE RESPONDENT COURT OF APPEALS PATENTLY ERRED IN HOLDING THAT CROSS-CLAIMANTS ELENA ADAON
lot and its sale to Adaon and Tejon, viz.:
AND NESTOR TEJON ARE NOT BUYERS IN GOOD FAITH OF THE SUBJECT PROPERTY.
WHEREFORE, the judgment is rendered for the plaintiffs and against the herein defendants, as follows:
a) The extra-judicial settlement of estate executed by defendants Bonifacio Olegario and Adelaida Victorino on May 23,
IV. THAT THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN AWARDING P30,000.00 NOMINAL DAMAGES AND
1989 as well as Transfer Certificates of Title issued subsequent thereto, namely TCT No. 190363 in the name of Bonifacio
P10,000.00 ATTORNEY'S FEES IN FAVOR OF THE PRIVATE RESPONDENTS DESPITE THE PATENT ABSENCE OF FACTUAL
Olegario and Adelaida Victorino and TCT No. 190132 in the name of Elena Adaon and Nestor Tejon are hereby declared
AND LEGAL BASIS THEREFORE.
NULL and VOID and without legal force and effect;
b) The Register of Deeds of Kaloocan City is hereby ordered to issue unto the herein plaintiffs new title in lieu of the We find merit in the petition.
aforesaid cancelled titles in the name of the deceased Marciliano Olegario married to Aurelia R. Olegario containing the
same entry and/or inscription before said Title No. 124222 was cancelled; There is no question that petitioners are the lawful heirs of spouses Olegario. Under Article 160 of the New Civil Code, the
c) Defendants Bonifacio Olegario and Aurelia Victorino Rivera are hereby ordered to pay the herein plaintiffs, jointly and subject lot is presumed to be conjugal property. The death of Aurelia Rivera-Olegario on March 19, 1986 dissolved the
severally, the amount of P30,000.00 as nominal damages and the further sum of P10,000.00 for and/as attorney's fees; conjugal partnership. By virtue of such dissolution, 1/2 of the property should appertain to Marciliano as his share from
and the conjugal estate plus another 1/4 representing his share as surviving spouse of Aurelia. 9 Petitioner Adelaida Victorino,
d) To pay costs of suit. as the sole surviving niece of Aurelia, is entitled to the other 1/4 of the lot. 10 When Marciliano died intestate on March 10,
1986, petitioner Bonifacio Olegario, the only surviving brother of Marciliano, stepped into his shoe.
With regards to the cross-claim of defendants Elena Adaon and Nestor Tejon, judgment is hereby rendered against
Bonifacio Olegario and Adelaida Victorino who are hereby ordered as follows: We shall now determine whether the inheritance right of petitioners can be prejudiced by the sale of the subject lot by the
deceased Marciliano to private respondents. In a contract of sale, consideration is, as a rule, different from the motive of
the parties. Consideration is defined as some right, interest, benefit, or advantage conferred upon the promissor, to which
he is otherwise not lawfully entitled, or any detriment, prejudice, loss, or disadvantage suffered or undertaken by the
promisee other than to such as he is at the time of consent bound to suffer. 11 As contradistinguished, motive is the
condition of mind which incites to action, but includes also the inference as to the existence of such condition, from an
external fact of a nature to produce such a condition. 12 Under certain circumstances, however, the motive of the parties
may be regarded as the consideration when it predetermines the purpose of the contract. 13 When they blend to that
degree, and the motive is unlawful, then the contract entered into is null and void. 14
In the case at bench, the primary motive of Marciliano is selling the controverted 91-square meter lot to private
respondents was to illegally frustrate petitioners' right of inheritance and to avoid payment of estate tax. This was
unabashedly admitted by witness Susan Rivera, wife of private respondent Manuel Rivera, on cross-examination. She
declared:
Atty. Meris: (p. 12, TSN, June 18, 1991 [sic])
Q You mean to say that despite of your claim that your husband is the son of Marciliano Olegario and Aurelia Olegario,
they still executed a deed of absolute sale over the said lot owned by your parents in law in favor of your husband and
his two sisters?
A It was decided that way to avoid paying tax, sir.
Q In other words the sale was only fictitious or was only made in a way of avoiding paying taxes?
A It was not that way but my parents in law were just avoiding distant relatives who might claim it. 15
Q When was the money given, after it (Deed of Sale) was executed on April 15, 1986?
A Last week of April, sir.
Q Do you know where the money came from?
Atty. Buenaventura: May we manifest to the Honorable Court that there are some signal coming from the other witness that has been
presented before the Honorable Court and it seems that the witness is getting clue from the other witness. (Emphasis supplied) 20
21
Applying Articles 1352 and 1409 of the Civil Code in relation to the indispensable requisite of a valid cause, we hold that
the alleged deed of sale is void.
It is also obvious to the eye that the contract of sale in 1986 is unregistered. Section 51 of Presidential Decree No. 1529,
otherwise known as the Property Registration Decree, provides that "[T]he act of registration shall be the operative act to
convey or affect the land insofar as third persons are concerned." Thus, even if the contract of sale is valid, it cannot
adversely affect third persons because of its non-registration. More specifically, it cannot prejudice petitioners as well as
Elena Adaon and Nestor Tejon.
IN VIEW WHEREOF, the Decision of respondent court dated January 7, 1992 is REVERSED and SET ASIDE; the Complaint
in Civil Case No. C-13973 is ordered DISMISSED. No costs.

Atty. Buenaventura: (p. 15, TSN, June 18, 1990)

Q And as a husband (sic) of Manuel you are familiar of the reason why this deed of sale was executed?
A I have stated earlier that my father in law sold it to them for the reason that he would not want the said property to
be given to another party, sir.
Q In other words, it was not really intended as honest to goodness sale between the former owner and Manuel Rivera,
your husband and her sister? (sic)
A Yes, sir. 16

We also note that in their comment, rejoinder, and memorandum private respondents did not refute petitioners' charge
that the said sale is fictitious. The conclusion is thus inescapable that the purported sale of April 15, 1986 of the subject
lot is null and void. Illegal motive predetermined the purpose of the contract. 17

In addition, the trial court and respondent court failed to consider the lack of cause in the alleged deed of sale of
1986. 18 The evidence does not show that private respondents had FIFTY THOUSAND PESOS (P50,000.00) and paid
the same to Marciliano. Private respondents allegedly borrowed THIRTY THOUSAND PESOS (P30,000.00) from the
cooperative of Mary Help of Christian Parish to prove their financial capacity. However, they floundered in their cross-
examinations.

Atty. Meris: (Cross-examination of respondent Manuel Rivera) (p. 39, TSN, June 4, 1990)
Q And how much did you buy the said property?
A P50,000.00, sir.
Q And did you bring this money at the City Hall?
A No, sir.
Q Did you give your father the said amount?
A We spent it for the treatment of my father, for payment of the real estate tax and burial of my mother Aurelia Olegario sir. (Emphasis
supplied). 19

Atty. Buenaventura on cross-examination of Paz Olegario (respondent), pp. 22, TSN, June 23, 1990.
Q Do you know how much was paid?
A P50,000.00, sir
Q Was it paid in cash or in other form?
A No, sir.
Q What do you mean by "no sir."

Atty. Buenaventura:
May we make on record that the witness is having difficulty in answering the question despite being repeatedly interpreted the meaning of
the question propounded on to.