 SUNVILLE TIMBER PRODUCTS, INC v. HON. ALFONSO G. ABAD, as Judge RTC, Br.

r. 22 of Pagadian City, COURT OF APPEALS, ISIDRO GILBOLINGO AND

ROBUSTIANO BUGTAI

 Facts:

 The petitioner was granted a Timber License Agreement (TLA), authorizing it to cut, remove and utilize timber within the concession area covering
29,500 hectares of forest land in Zamboanga del Sur, for a period of ten years expiring in 1992.

 In 1987, the herein private respondents filed a petition with DENR for the cancellation of the TLA on the ground of serious violations of its conditions and
the provisions of forestry laws and regulations. The same charges were subsequently made, also by the herein private respondents, in a complaint for
injunction with damages against the petitioner, docketed in the RTC.

 The petitioner moved to dismiss this case on the ground, among others, that the plaintiffs had not yet exhausted administrative remedies. The
respondent judge denied the motion of the petitioner. It then elevated the matter to the respondent CA, which sustained the RTC decision.

 In its decision, CA pointed several exceptions where the doctrine of exhaustion of administrative remedies could be dispensed with. CA argued that the
applicable exception was the urgent need for judicial intervention, which it explained thus: “The adverse effects of the logging operations of the
defendant have already covered a wider area than that feared to be adversely affected by the City Council of Pagadian City. Thus, it is urgent that
indiscriminate logging be stopped. Irreparable damage would ensue unless the court intervenes. Reliance on the DENR may not be enough, judging from
its inaction on the council's request seven years back.” The respondent court cited in support of this conclusion that "irreparable damage and injury" was
allowed as an exceptional ground, and "the strong public interest in having the matter settled" as soon as possible.

 Issue: Was the doctrine of exhaustion of administrative remedies properly applied?

 Ruling: (1)

 No. The doctrine of exhaustion of administrative remedies calls for resort first to the appropriate administrative authorities in the resolution of a
controversy falling under their jurisdiction before the same may be elevated to the courts of justice for review. Non-observance of the doctrine results in
lack of a cause of action, which is one of the grounds allowed in the Rules of Court for the dismissal of the complaint. The deficiency is not jurisdictional.
Failure to invoke it operates as a waiver of the objection as a ground for a motion to dismiss and the court may then proceed with the case as if the
doctrine had been observed.

 One of the reasons for the doctrine of exhaustion is the separation of powers, which enjoins upon the Judiciary a becoming policy of non-interference
with matters coming primarily (albeit not exclusively) within the competence of the other departments. The theory is that the administrative authorities
are in a better position to resolve questions addressed to their particular expertise and that errors committed by subordinates in their resolution may be
rectified by their superiors if given a chance to do so.
 As correctly suggested by the respondent court, however, there are a number of instances when the doctrine may be dispensed with and judicial action
validly resorted to immediately. Among these exceptional cases are: 1) when the question raised is purely legal; 2) when the administrative body is in
estoppel; 3) when the act complained of is patently illegal; 4) when there is urgent need for judicial intervention; 5) when the claim involved is small; 6)
when irreparable damage will be suffered; 7) when there is no other plain, speedy and adequate remedy; 8) when strong public interest is involved; 9)
when the subject of the controversy is private land; and 10) in quo warranto proceedings.
 There is no question that civil case comes within the jurisdiction of the respondent court. Nevertheless, as the wrong alleged in the complaint was
supposedly committed as a result of the unlawful logging activities of the petitioner, it will be necessary first to determine whether or not the TLA and
the forestry laws and regulations had indeed been violated. To repeat for emphasis, determination of this question is the primary responsibility of the
Forest Management Bureau of the DENR. The application of the expertise of the administrative agency in the resolution of the issue raised is a condition
precedent for the eventual examination, if still necessary, of the same question by a court of justice.

 As for the alleged urgent necessity for judicial action and the claimed adverse impact of the case on the national interest, the record does not show that
the petitioners have satisfactorily established these extraordinary circumstances to justify deviation from the doctrine by exhaustion of administrative
remedies and immediate resort to the courts of justice.

 Petition is granted.

Arsenal v. IAC

 GUTIERREZ, JR., J.:

 In 1954, Filomeno Palaos secured Original Certificate of Title from the Register of Deeds for Lot 81 in Bukidnon, by virtue of Homestead Patent granted
to him. In 1957, Palaos executed a deed in favor of Torcuato Suralta, where he sold 4 hectares of the land embraced in his Torrens Certificate for the sum
of P 890.00. Plaintiff Suralta immediately took possession thereof.

 In 1964, the spouses Francisca Arsenal and Remedio Arsenal became tenants of the adjoining land. They came to know the Suralta as their neighbor who
became their compadre later. In the course of their relationship, Suralta came to know of their intention to buy the remaining land of Palaos. On March
14, 1967, Palaos executed a notarial Deed of Sale in consideration of the amount of P800.00 supposedly for the remaining three (3) hectares of their land
without knowing that the document covered the entirety of Lot 81 including the four-hectare portion previously deeded by Palaos to Suralta.
 On March 28, 1967, Francisca Arsenal caused the tax declaration of the entire lot to be transferred in her name. Suralta learned of this and he agreed
with Arsenal to contribute in the payment of the land taxes and paid yearly from 1968 to 1973 the amount of P10.00 corresponding to his four-hectare
portion to Francisca Arsenal.

 On July 11, 1973, Suralta presented his Sales Contract in the Office of the Register of Deeds but it was refused registration for having been executed
within the prohibitive period of five years from the issuance of the patent. In order to cure the defect, he caused Filomeno Palaos to sign a new Sales
Contract in his favor covering the same four-hectare portion of Lot 81.

 In August 1973, Suralta caused the segregation of his portion from the rest of the land without protest from Francisca Arsenal who was notified thereof.
In December 1973, however, Suralta saw for the first time the Deed of Sale embracing the whole Lot 81 signed by Palaos in favor of Arsenal.
Immediately he asked Palaos for explanation but the latter told him that he sold only three hectares to Arsenal.

 Plaintiff approached Francisca Arsenal for a satisfactory arrangement but she insisted on abiding by her contract. Because of their disagreement,
Francisca Arsenal registered her Deed of Sale on December 6, 1973 and obtained Transfer Certificate of Title for the entire Lot 81 without the knowledge
of the Suralta.

 On March 6, 1974, Suralta filed a case for the annulment of TCT issued to the Arsenals insofar as it covers the four-hectare portion previously sold to him.
In answer to the complaint, the Arsenals denied previous knowledge of the sale to Suralta of the land in question. As a special defense, they assailed the
validity of the purchase by Suralta in 1957, pointing to the prohibition contained in the Public Land Law against its disposal within the period of five years
from the issuance of the homestead patent. They also questioned the legality of the sale made to Suralta in 1957 by Palaos for not having been approved
by the Commission on National Integration despite the fact that Palaos and his wife belong to the cultural minorities, are illiterates, and do not
understand the English language in which the deed of sale in favor of Suralta was written.

 On May 4, 1976, the trial court rendered judgment in favor of Suralta. It imputed bad faith to the Arsenals and declared them disqualified to avail of the
protection afforded by the provisions of the Civil Code to innocent purchasers although they registered their purchase ahead of Suralta. IAC affirmed in
toto.

 The court held that:

 xxx xxx xxx

 The defendants Arsenal could not also avail of the prohibition in the Public Land Act against the disposal of any land granted to a citizen under that law
because the benefit of said prohibition does not inure to any third party. Only the government could have filed the adequate proceedings for
confiscation of the land for violation of the condition of the grant by Palaos. Moreover, a verbal sale of land is valid and effective as between the parties
 to the agreement and Filomeno Palaos had reaffirmed the sale he made in favor of the plaintiff in 1957 by executing another instrument in 1973 to cure
whatever defects which may have affected their formal contract.

 Likewise, Francisca Arsenal cannot take advantage of the lack of approval by the Commission on National Integration of the sale made by Filomeno
Palaos in favor of plaintiff Torcuato Suralta. Only the latter, in whose favor the protection is afforded, could contest the document on the ground, as
Francisca Arsenal was not a party to said contract and even if she is also a member of the cultural minority for being only half a native of Bukidnon
because she and her husband who is from Cebu are both literates.

 On appeal to the Intermediate Appellate Court, the aforestated decision was affirmed in toto on October 24, 1983. The Court maintained that:

 The disquisition of the lower court having been made mainly upon assessment of the facts as borne by the testimonies of witnesses presented as
resolved in a long line of decisions, this Court is loath to overturn findings of facts of the court a quo, which is more in a position to determine their truth
or falsity, having heard the witnesses testify ... .

 On March 20, 1984, the spouses Arsenal went to this Court in a petition for review on certiorari assigning the following alleged errors of the court below:

 I

 THE INTERMEDIATE APPELLATE COURT ERRED IN NOT DISMISSING THE APPEALED CASE FOR LACK OF CAUSE OF ACTION.

 II

 THE INTERMEDIATE APPELLATE COURT ERRED IN AFFIRMING THE TRIAL COURT'S ARGUMENT TO THE EFFECT THAT THE BENEFIT OF THE PROHIBITION IN
THE PUBLIC LAND LAW AGAINST THE DISPOSAL OF ANY LAND GRANTED TO A CITIZEN UNDER THAT LAW DOES NOT INSURE TO ANY THIRD PARTY,
HENCE, PETITIONERS COULD NOT AVAIL OF THE SAID PROHIBITION.

 III

 THE INTERMEDIATE APPELLATE COURT ERRED IN AFFIRMING THE TRIAL COURT'S ARGUMENT THAT THE PETITIONERS COULD NOT TAKE ADVANTAGE OF
THE LACK OF APPROVAL BY THE COMMISSION ON NATIONAL INTEGRATION OF THE SALE MADE BY RESPONDENT TORCUATO SURALTA.

 IV

 THE INTERMEDIATE APPELLATE COURT ERRED IN GIVING TOO MUCH WEIGHT TO THE ALLEGED BAD FAITH OF PETITIONERS.

 V

 THE INTERMEDIATE APPELLATE COURT ERRED IN AFFIRMING THE DECISION OF THE TRIAL COURT DECLARING RESPONDENT TORCUATO SURALTA TO BE
THE LEGITIMATE OWNER OF THE DISPUTED LAND AND IN ORDERING THE REGISTER OF DEEDS OF BUKIDNON TO CANCEL TCT NO. T-7879 AND ORDERING
THE ISSUANCE OF ANOTHER TITLE FOR THE PORTION DESIGNATED AS LOT 8l-A OF THE SUBDIVISION PLAN LRC-PLD-198451.

 VI

 THE INTERMEDIATE APPELLATE COURT ERRED IN AFFIRMING THE AWARD OF MORAL DAMAGES AND ATTORNEY's FEES TO PRIVATE RESPONDENTS.
 In resisting respondent Suralta's claim, the petitioners rely heavily on the nullity of the contract of sale executed in 1957 between the respondents Palaos
and Suralta. They allege that because the previous sale was void from the beginning, it cannot be ratified and "No amount of bad faith on the part of the
petitioners could make it valid and enforceable in the courts of law."

 Issue: Who between the two alleged purchasers of a four-hectare portion of land granted in homestead has acquired a valid title thereto

 Ruling:

 Neither Suralta nor Arsenal acquired valid title to the subject lot.

 As to the contract of sale between Palaos and Suralta:

 The law on the matter which is the Public Land Act (Commonwealth Act No. 141, as amended) provides:

 Sec. 118. Except in favor, of the Government or any of its branches, units or institutions, lands acquired under free patent or homestead provisions shall
not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of
issuance of the patent or grant nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period, but the
improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations.

 No alienation, transfer, or conveyance of any homestead after five years and before twenty-five years after issuance of title shall be valid without the
approval of the Secretary of Agriculture and Natural Resources, which approval shall not be denied except on constitutional and legal ground.

 xxx xxx xxx

 Sec. 120. Conveyance and encumbrance made by persons belonging to the so-called 'non-Christian Filipinos' or national cultural minorities, when proper,
shall be valid if the person making the conveyance or encumbrance is able to read and can understand the language in which the instrument or
conveyance or encumbrance is written. Conveyances and encumbrances made by illiterate non-Christians or literate non-Christians where the
instrument of conveyance is in a language not understood by the said literate non-Christian shall not be valid unless duly approved by the Chairman of
the Commission on National Integration. (As amended by Rep. Act No. 3872, approved June 18, 1964).

 xxx xxx xxx

 Sec. 124. Any acquisition, conveyance, alienation, transfer, or other contract made or executed in violation of any of the provisions of sections one
hundred and eighteen, one hundred and twenty, one hundred and twenty-one, one hundred and twenty-two, and one hundred twenty-three of this Act
 shall be unlawful and null and void from its execution and shall produce the effect of annulling and cancelling the grant, title, patent, or permit originally
issued, recognized or confirmed, actually or presumptively, and cause the reversion of the property and its improvements to the State.

 The above provisions of law are clear and explicit. A contract which purports of alienate, transfer, convey or encumber any homestead within the
prohibitory period of five years from the date of the issuance of the patent is void from its execution. In a number of cases, this Court has held that such
provision is mandatory. Concededly, the contract of sale executed between the respondents Palaos and Suralta in 1957 is void. It was entered into three
(3) years and eight (8) months after the grant of the homestead patent to the respondent Palaos in 1954.

 As to whether or not the execution by the respondents Palaos and Suralta of another instrument in 1973 cured the defects in their previous contract, we
reiterate the rule that an alienation or sale of a homestead executed within the five-year prohibitory period is void and cannot be confirmed or ratified.
This Court has on several occasions ruled on the nature of a confirmatory sale and the public policy which proscribes it. In the case of Menil v. Court of
Appeals (84 SCRA 413), we stated that: It cannot be claimed that there are two contracts: one which is undisputably null and void, and another, having
been executed after the lapse of the 5-year prohibitory period, which is valid. The second contract of sale executed on March 3, 1964 is admittedly a
confirmatory deed of sale. Even the petitioners concede this point. (Record on Appeal, pp. 55-56). Inasmuch as the contract of sale executed on May 7,
1960 is void for it is expressly prohibited or declared void by law (CA 141, Section 118), it therefore cannot be confirmed nor ratified. ... .Further,
noteworthy is the fact that the second contract of sale over the said homestead in favor of the same vendee, petitioner Potenciano Menil, is for the same
price of P415.00. Clearly, the unvarying term of the said contract is ample manifestation that the same is simulated and that no object or consideration
passed between the parties to the contract. It is evident from the whole record of the case that the homestead had long been in the possession of the
vendees upon the execution of the first contract of sale on May 7, 1960; likewise, the amount of P415.00 had long been paid to Agueda Garan on that
same occasion. ...

 In another case, Manzano v. Ocampo (1 SCRA 691, 697), where the sale was perfected during the prohibitory period but the formal deed of conveyance
was executed after such period, this Court ruled that:... This execution of the formal deed after the expiration of the prohibitory period did not and could
not legalize a contract that was void from its inception. Nor was this formal deed of sale 'a totally distinct transaction from the promissory note and the
deed of mortgage', as found by the Court of Appeals, for it was executed only in compliance and fulfillment of the vendor's previous promise, under the
perfected sale of January 4, 1938, to execute in favor of his vendee the formal act of conveyance after the lapse of the period of inhibition of five years
from the date of the homestead patent. What is more, the execution of the formal deed of conveyance was postponed by the parties precisely to
circumvent the legal prohibition of their sale.

 The law prohibiting any transfer or alienation of homestead land within five years from the issuance of the patent does not distinguish between
executory and consummated sales; and it would hardly be in keeping with the primordial aim of this prohibition to preserve and keep in the family of the
homesteader the piece of land that the State had gratuitously given to them, (Pascua v. Talens, 45 O.G. No. 9 [Supp.] 413; De los Santos v. Roman
Catholic Church of .Midsayap, G.R. No. L-6088, Feb. 25, 1954.) to hold valid a homestead sale actually perfected during the period of prohibition but with
the execution of the formal deed of conveyance and the delivery of possession of the land sold to the buyer deferred until after the expiration of the
prohibitory period, purposely to circumvent the very law that prohibits and declares invalid such transaction to protect the homesteader and his family.
To hold valid such arrangements would be to throw the door wide open to all possible fraudulent subterfuges and schemes that persons interested in
land given to homesteaders may devise to circumvent and defeat the legal provision prohibiting their alienation within five years from the issuance of
the homestead's patent.
 The respondents Palaos and Suralta admitted that they executed the subsequent contract of sole in 1973 in order to cure the defects of their previous
contract. The terms of the second contract corroborate this fact as it can easily be seen from its terms that no new consideration passed between them.
The second contract of sale being merely confirmatory, it produces no effect and can not be binding.

 Notwithstanding the above circumstances of the case, however, we still think that the petitioners' claim to the land must fail.

 As to the contract of sale Palaos and Arsenal

 The issue of bad faith constitutes the fundamental barrier to Arsenal’s claim of ownership. In this case, there is substantial evidence to sustain the verdict
of bad faith. It is unusual for the petitioners, who have, been occupying the disputed land for four years with respondent Suralta to believe, without first
verifying the fact, that the latter was a mere mortgagee of the portion of the land he occupies.

 Second, it is unlikely that the entire 8.7879 hectares of land was sold to them for only P800,00 in 1967 considering that in 1957, a four-hectare portion of
the same was sold to the respondent Suralta for P819.00. The increased value of real properties through the years and the disparity of the land area
show a price for the land too inadequate for a sale allegedly done in good faith and for value.

 Third, contrary to the usual conduct of good faith purchasers for value, the petitioners actively encouraged the respondent Suralta to believe that they
were co-owners of the land. There was no dispute that the petitioners, without informing the respondent Suralta of their title to the land, kept the latter
in peaceful possession of the land he occupies and received annual real estate tax contributions from him. It was only in 1973 when the respondent
Suralta discovered the petitioners' title to the land and insisted on a settlement of the adverse claim that the petitioners registered their deed of sale and
secured a transfer certificate of title in their favor.

 Clearly, the petitioners were in bad faith in including the entire area of the land in their deed of sale. They cannot be entitled to the four-hectare portion
of the land for lack of consideration. To uphold their claim of ownership over that portion of land would be contrary to the well-entrenched principle
against unjust enrichment consecrated in our Civil Code to the end that in cases not foreseen by the lawmaker, no one may unjustly benefit himself to
the prejudice of another.

 Thus, the two contracts of sale are void and the ownership of the subject lot is reverted to Palaos.


YU TEK and CO., plaintiff-appellant, vs. BASILIO GONZALES, defendant-appellant.

 In 1912, the parties executed a written contract; where Basilio Gonzalez received P3,000 from Yu Tek and obligated himself to deliver 600 piculs of sugar
to the latter within the period of three months. It was agreed that should Gonzales default, said contract will be rescinded and Gonzales will then be
obligated to return to Yu Tek the P3,000 received and also the sum of P1,200 by way of indemnity for loss and damages.

 However, no sugar had been delivered to Yu Tek under this contract nor had it been able to recover the P3,000. Plaintiff prayed for judgment for the
P3,000 and, in addition, for P1,200. Judgment was rendered in favor of Yu Tek for P3,000 only, and from this judgment both parties appealed.
 In its defense, defendant assumed that the contract was limited to the sugar he might raise upon his own plantation; that the contract represented a
perfected sale; and that by failure of his crop he was relieved from complying with his undertaking by loss of the thing due.

Issue: Was there a perfected sale?

Ruling:

 No. Article 1450 (1475 of the new Civil Code) defines a perfected sale as follows: "The sale shall be perfected between vendor and vendee and shall be
binding on both of them, if they have agreed upon the thing which is the object of the contract and upon the price, even when neither has been
delivered."

 This court has consistently held that there is a perfected sale with regard to the "thing" whenever the article of sale has been physically segregated from
all other articles. In the case at bar the undertaking of the defendant was to sell to the plaintiff 600 piculs of sugar of the first and second classes. Was
this an agreement upon the "thing" which was the object of the contract within the meaning of article 1450? Sugar is one of the staple commodities of
this country. For the purpose of sale its bulk is weighed, the customary unit of weight being denominated a "picul." There was no delivery under the
contract. Now, if called upon to designate the article sold, it is clear that the defendant could only say that it was "sugar." He could only use this generic
name for the thing sold. There was no "appropriation" of any particular lot of sugar. Neither party could point to any specific quantity of sugar and say:
"This is the article which was the subject of our contract."

 In the case at bar the undertaking of the defendant was to sell to the plaintiff 600 piculs of sugar of the first and second classes. Was this an agreement
upon the "thing" which was the object of the contract within the meaning of article 1450, supra? Sugar is one of the staple commodities of this country.
For the purpose of sale its bulk is weighed, the customary unit of weight being denominated a "picul." There was no delivery under the contract. Now, if
called upon to designate the article sold, it is clear that the defendant could only say that it was "sugar." He could only use this generic name for the
thing sold. There was no "appropriation" of any particular lot of sugar. Neither party could point to any specific quantity of sugar and say: "This is the
article which was the subject of our contract."

 We conclude that the contract in the case at bar was merely an executory agreement; a promise of sale and not a sale. As there was no perfected sale, it
is clear that articles 1452, 1096, and 1182 are not applicable. The defendant having defaulted in his engagement, the plaintiff is entitled to recover the
P3,000 which it advanced to the defendant, and this portion of the judgment appealed from must therefore be affirmed.

 How different is this from the contracts discussed in the cases referred to above!
 In the McCullough case, for instance, the tobacco factory which the parties dealt with was specifically pointed out and distinguished from all other
tobacco factories. In the Barretto case, the particular shares of stock which the parties desired to transfer were capable of designation. In the Tan Leonco
case, where a quantity of hemp was the subject of the contract, it was shown that that quantity had been deposited in a specific warehouse, and thus set
apart and distinguished from all other hemp.

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 Republic of the Philippines

SUPREME COURT
Manila

 FIRST DIVISION

 G.R. No. L-67888 October 8, 1985

 IMELDA ONG, ET AL., petitioners,

vs.
 ALFREDO ONG, ET AL., respondents.

 Faustino Y Bautista and Fernando M. Mangubat for private respondent.

 RELOVA, J.:

 This is a petition for review on certiorari of the decision, dated June 20, 1984, of the Intermediate Appellate Court, in AC-
G.R. No. CV-01748, affirming the judgment of the Regional Trial Court of Makati, Metro Manila. Petitioner Imelda Ong
assails the interpretation given by respondent Appellate Court to the questioned Quitclaim Deed.

 Records show that on February 25, 1976 Imelda Ong, for and in consideration of One (P1.00) Peso and other valuable
considerations, executed in favor of private respondent Sandra Maruzzo, then a minor, a Quitclaim Deed whereby she
transferred, released, assigned and forever quit-claimed to Sandra Maruzzo, her heirs and assigns, all her rights, title,
interest and participation in the ONE-HALF (½) undivided portion of the parcel of land, particularly described as follows:

 A parcel of land (Lot 10-B of the subdivision plan (LRC) Psd 157841, being a portion of Lot 10, Block 18, Psd-13288, LRC
(GLRC) Record No. 2029, situated in the Municipality of Makati, Province of Rizal, Island of Luzon ... containing an area of
ONE HUNDRED AND TWENTY FIVE (125) SQUARE METERS, more or less.

 On November 19, 1980, Imelda Ong revoked the aforesaid Deed of Quitclaim and, thereafter, on January 20, 1982 donated
the whole property described above to her son, Rex Ong-Jimenez.

 On June 20, 1983, Sandra Maruzzo, through her guardian (ad litem) Alfredo Ong, filed with the Regional Trial Court of
Makati, Metro Manila an action against petitioners, for the recovery of ownership/possession and nullification of the Deed of
Donation over the portion belonging to her and for Accounting.

 In their responsive pleading, petitioners claimed that the Quitclaim Deed is null and void inasmuch as it is equivalent to a
Deed of Donation, acceptance of which by the donee is necessary to give it validity. Further, it is averred that the donee,
Sandra Maruzzo, being a minor, had no legal personality and therefore incapable of accepting the donation.

 Upon admission of the documents involved, the parties filed their responsive memoranda and submitted the case for
decision.

 On December 12, 1983, the trial court rendered judgment in favor of respondent Maruzzo and held that the Quitclaim Deed
is equivalent to a Deed of Sale and, hence, there was a valid conveyance in favor of the latter.

 Petitioners appealed to the respondent Intermediate Appellate Court. They reiterated their argument below and, in addition,
contended that the One (P1.00) Peso consideration is not a consideration at all to sustain the ruling that the Deed of
Quitclaim is equivalent to a sale.

 On June 20, 1984, respondent Intermediate Appellate Court promulgated its Decision affirming the appealed judgment and
held that the Quitclaim Deed is a conveyance of property with a valid cause or consideration; that the consideration is the
One (P1.00) Peso which is clearly stated in the deed itself; that the apparent inadequacy is of no moment since it is the
usual practice in deeds of conveyance to place a nominal amount although there is a more valuable consideration given.

 Not satisfied with the decision of the respondent Intermediate Appellate Court, petitioners came to Us questioning the
 interpretation given by the former to this particular document.

 On March 15, 1985, respondent Sandra Maruzzo, through her guardian ad litem Alfredo Ong, filed an Omnibus Motion
informing this Court that she has reached the age of majority as evidenced by her Birth Certificate and she prays that she be
substituted as private respondent in place of her guardian ad litem Alfredo Ong. On April 15, 1985, the Court issued a
resolution granting the same.

 A careful perusal of the subject deed reveals that the conveyance of the one- half (½) undivided portion of the above-
described property was for and in consideration of the One (P 1.00) Peso and the other valuable considerations (emphasis
supplied) paid by private respondent Sandra Maruzzo through her representative, Alfredo Ong, to petitioner Imelda Ong.
Stated differently, the cause or consideration is not the One (P1.00) Peso alone but also the other valuable considerations.
As aptly stated by the Appellate Court-

 ... although the cause is not stated in the contract it is presumed that it is existing unless the debtor proves the contrary
(Article 1354 of the Civil Code). One of the disputable presumptions is that there is a sufficient cause of the contract (Section
5, (r), Rule 131, Rules of Court). It is a legal presumption of sufficient cause or consideration supporting a contract even if
such cause is not stated therein (Article 1354, New Civil Code of the Philippines.) This presumption cannot be overcome by
a simple assertion of lack of consideration especially when the contract itself states that consideration was given, and the
same has been reduced into a public instrument with all due formalities and solemnities. To overcome the presumption of
consideration the alleged lack of consideration must be shown by preponderance of evidence in a proper action. (Samanilla
vs, Cajucom, et al., 107 Phil. 432).

 The execution of a deed purporting to convey ownership of a realty is in itself prima facie evidence of the existence of a
valuable consideration, the party alleging lack of consideration has the burden of proving such allegation. (Caballero, et al.
vs. Caballero, et al., (CA), 45 O.G. 2536).

 Moreover, even granting that the Quitclaim deed in question is a donation, Article 741 of the Civil Code provides that the
requirement of the acceptance of the donation in favor of minor by parents of legal representatives applies only to onerous
and conditional donations where the donation may have to assume certain charges or burdens (Article 726, Civil Code). The
acceptance by a legal guardian of a simple or pure donation does not seem to be necessary (Perez vs. Calingo, CA-40 O.G.
53). Thus, Supreme Court ruled in Kapunan vs. Casilan and Court of Appeals, (109 Phil. 889) that the donation to an
incapacitated donee does not need the acceptance by the lawful representative if said donation does not contain any
condition. In simple and pure donation, the formal acceptance is not important for the donor requires no right to be protected
and the donee neither undertakes to do anything nor assumes any obligation. The Quitclaim now in question does not
impose any condition.

 The above pronouncement of respondent Appellate Court finds support in the ruling of this Court in Morales Development
Co., Inc. vs. CA, 27 SCRA 484, which states that "the major premise thereof is based upon the fact that the consideration
stated in the deeds of sale in favor of Reyes and the Abellas is P1.00. It is not unusual, however, in deeds of conveyance
adhering to the Anglo-Saxon practice of stating that the consideration given is the sum of P1.00, although the actual
consideration may have been much more. Moreover, assuming that said consideration of P1.00 is suspicious, this
circumstance, alone, does not necessarily justify the inference that Reyes and the Abellas were not purchasers in good faith
and for value. Neither does this inference warrant the conclusion that the sales were null and void ab initio. Indeed, bad faith
and inadequacy of the monetary consideration do not render a conveyance inexistent, for the assignor's liberality may be
sufficient cause for a valid contract (Article 1350, Civil Code), whereas fraud or bad faith may render either rescissible or
voidable, although valid until annulled, a contract concerning an object certain entered into with a cause and with the
consent of the contracting parties, as in the case at bar."
  WHEREFORE. the appealed decision of the Intermediate Appellate Court should be, as it is hereby AFFIRMED, with costs
against herein petitioners.

 SO ORDERED.

 Teehankee (Chairman), Melencio-Herrera, Plana, De la Fuente and Patajo, JJ., concur.

 Gutierrez, Jr., J., in the result.


The Lawphil Project - Arellano Law Foundation

Ramos v. Director of Lands

 In 1882, Restituto Romero acquired possession of a considerable tract of land located in Nueva Ecija. He took advantage of the Royal Decree of February 13,
1894 to obtain a possessory information title to the land, registered as such in 896. Parcel No. 1, included within the limits of the possessory information title of
Romero, was sold in 1907 to Cornelio Ramos.

 Ramos instituted appropriate proceedings to have his title registered. However, his registration was objected by the Director of Lands on the ground that Ramos
had not acquired a good title from the Spanish government and by the Director of Forestry on the ground that the first parcel was forest land. The trial court
agreed with the objectors and excluded parcel No. 1 from registration.

 The principal argument of the SolGen is based on the provisions of the Spanish Mortgage Law and of the Royal Decree of February 13, 1894, commonly known
as the Maura Law. The SolGGen emphasized that for land to be under Maura Law, it must have been shown that the land was cultivated for six years previously,
and that it was not land which pertained to the zonas forestales (forest zones). As proof that the land was, even as long ago as the years 1894 to 1896, forestal
and not agricultural in nature is the fact that there are yet found thereon trees from 50 to 80 years of age.

 Also, subsection 6 of Section 54, of Act No. 926, entitled The Public Land Law, as amended by Act No. 1908, reads as follows: All persons who by themselves or
jgc:ch

their predecessors in interest have been in the open, continuous, exclusive, and notorious possession and occupation of agricultural public lands, as defined by
said Act of Congress of July 1, 1902, under a bona fide claim of ownership except as against the Government, for a period of ten years next preceding July 26,
1904, except when prevented by war or force majeure, shall be conclusively presumed to have performed all the conditions essential to a government grant and
to have received the same, and shall be entitled to a certificate of title to such land under the provisions of this chapter.

Issues:

(1) Is that actual occupancy of a part of the land described in the instrument giving color of title sufficient to give title to the entire tract of land?
(2) Is the land agricultural land? (This issue was not resolved directly but the Court said that even if they resolve the case in favor a private claim,
the Government still has a remedy.)

Ruling:
 (1) Yes, as per doctrine of constructive possession. The general rule is that the possession and cultivation of a portion of a tract under claim of ownership of all is
a constructive possession of all, if the remainder is not in the adverse possession of another.Of course, there are a number of qualifications to the rule, one
particularly relating to the size of the tract in controversy with reference to the portion actually in possession of the claimant. It is here only necessary to apply
the general rule.

 The claimant has color of title; he acted in good faith; and he has had open, peaceable, and notorious possession of a portion of the property, sufficient to
apprise the community and the world that the land was for his enjoyment. (See Arts. 446, 448, Old Civil Code.) Possession in the eyes of the law does not mean
that a man has to have his feet on every square meter of ground before it can be said that he is in possession. Ramos and his predecessor in interest fulfilled the
requirements of the law on the supposition that the premises consisted of agricultural public land.

 (2) The phrase “agricultural land” is denied by the Act of Congress of July 1st, 1902, known as the Philippine bill. Turning to the Philippine Bill the classes
of land are divided into: public land or public dominion, mineral land, and timber land. Section 18 of the Act of Congress comes nearest to a precise
definition, when it makes the determination of whether the land is more valuable for agricultural or for forest uses the test of its character.

 In the case which gave most serious consideration to the subject, it was found that there does exist in the Act of Congress a definition of the phrase
"agricultural public lands." It was said that the phrase "agricultural public lands" as used in Act No. 926 means "those public lands acquired from Spain
which are not timber or mineral lands."

 The presumption should be, in lieu of contrary proof, that land is agricultural in nature. One very apparent reason is that it is for the good of the
Philippine Islands to have the large public domain come under private ownership. Such is the natural attitude of the sagacious citizen.

 If in this instance, we give judicial sanction to a private claim, let it be noted that the Government, in the long run of cases, has its remedy. Forest
reserves of public land can be established as provided by law. When the claim of the citizen and the claim of the Government as to a particular piece of
property collide, if the Government desires to demonstrate that the land is in reality a forest, the Director of Forestry should submit to the court
convincing proof that the land is not more valuable for agricultural than for forest purposes.”

 Great consideration, it may be stated, should, and undoubtedly will be, paid by the courts to the opinion of the technical expert who speaks with
authority on forestry matters. But a mere formal opposition on the part of the Attorney-General for the Director of Forestry, unsupported by satisfactory
evidence will not stop the courts from giving title to the claimant.

Petition was granted.

The Royal Decree of February 13, 1894, better known as the Maura law, gave landholders only one year within which to secure legal title to their lands. After
the deadline, untitled lands were deemed forfeited. Naturally, only those aware of the law were able to register their lands.
RA 926 - An Act To Authorize The President To Convey Public Land And Other Public Property In Payment Of Landed Estates Acquired By The Government.

446, 448, old Civil Code (539, 541 new Civil Code)

Art. 539. Every possessor has a right to be respected in his possession; and should he be disturbed therein he shall be protected in or restored to said possession by
the means established by the laws and the Rules of Court.

A possessor deprived of his possession through forcible entry may within ten days from the filing of the complaint present a motion to secure from the competent
court, in the action for forcible entry, a writ of preliminary mandatory injunction to restore him in his possession. The court shall decide the motion within thirty (30)
days from the filing thereof.

Art. 541. A possessor in the concept of owner has in his favor the legal presumption that he possesses with a just title and he cannot be obliged to show or prove it.