Sales Parties To A Contract of Sale
Sales Parties To A Contract of Sale
This petition[1] seeks to annul the decision of the Court of Appeals dated
August 29, 1996, which set aside the decision of the Regional Trial Court of
Batac, Ilocos Norte, Branch 17, in Civil Case No. 582-17 for reinvindicacion
consolidated with Cadastral Case No. 1.[2] The petition likewise seeks to
annul the resolution dated December 11, 1996, denying petitioners motion
for reconsideration.
The facts of this case, culled from the records, are as follows:
Paulina Rigonan owned three (3) parcels of land, located at Batac and
Espiritu, Ilocos Norte, including the house and warehouse on one parcel. She
allegedly sold them to private respondents, the spouses Felipe and
Concepcion Rigonan, who claim to be her relatives. In 1966, herein
petitioners Eugenio Domingo, Crispin Mangabat and Samuel Capalungan,
who claim to be her closest surviving relatives, allegedly took possession of
the properties by means of stealth, force and intimidation, and refused to
vacate the same. Consequently, on February 2, 1976, herein respondent
Felipe Rigonan filed a complaint for reinvindicacion against petitioners in
the Regional Trial Court of Batac, Ilocos Norte. On July 3, 1977, he amended
the complaint and included his wife as co-plaintiff. They alleged that they
were the owners of the three parcels of land through the deed of sale
executed by Paulina Rigonan on January 28, 1965; that since then, they had
been in continuous possession of the subject properties and had introduced
permanent improvements thereon; and that defendants (now petitioners)
entered the properties illegally, and they refused to leave them when asked to
do so.
During trial, Juan Franco, Notary Public Evaristo P. Tagatag[3] and plaintiff
Felipe Rigonan testified for plaintiffs (private respondents now).
Franco testified that he was a witness to the execution of the questioned deed
of absolute sale. However, when cross-examined and shown the deed he
stated that the deed was not the document he signed as a witness, but rather it
was the will and testament made by Paulina Rigonan.
Atty. Tagatag testified that he personally prepared the deed, he saw Paulina
Rigonan affix her thumbprint on it and he signed it both as witness and
notary public. He further testified that he also notarized Paulinas last will and
testament dated February 19, 1965. The will mentioned the same lots sold to
private respondents. When asked why the subject lots were still included in
the last will and testament, he could not explain. Atty. Tagatag also
mentioned that he registered the original deed of absolute sale with the
Register of Deeds.
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Plaintiff Felipe Rigonan claimed that he was Paulinas close relative. Their
fathers were first cousins. However, he could not recall the name of Paulinas
grandfather. His claim was disputed by defendants, who lived with Paulina as
their close kin. He admitted the discrepancies between the Register of Deeds
copy of the deed and the copy in his possession. But he attributed them to the
representative from the Office of the Register of Deeds who went to
plaintiffs house after that Office received a subpoena duces tecum.
According to him, the representative showed him blanks in the deed and then
the representative filled in the blanks by copying from his (plaintiffs) copy.
Jose Flores testified that he knew defendants, herein petitioners, who had
lived on the land with Paulina Rigonan since he could remember and
continued to live there even after Paulinas death. He said he did not receive
any notice nor any offer to sell the lots from Paulina, contrary to what was
indicated in the deed of sale that the vendor had notified all the adjacent
owners of the sale. He averred he had no knowledge of any sale between
Paulina and private respondents.
On March 23, 1994, the trial court rendered judgment in favor of defendants
(now the petitioners). It disposed:
The alleged deed of sale (Exhs. A, A-1, 1 and 1-a) is hereby declared null
and void and fake and the prayer for the issuance of a writ of preliminary
injunction is hereby denied.
Plaintiffs are hereby ordered to pay defendants:
a) P20,000.00 as moral damages;
b) P10,000.00 as exemplary damages;
Ruben Blanco, the acting Registrar of Deeds, testified that only the carbon
copy, also called a duplicate original, of the deed of sale was filed in his
office, but he could not explain why this was so.
Zosima Domingo testified that her husband, Eugenio Domingo, was Paulinas
nephew. Paulina was a first cousin of Eugenios father. She also said that they
lived with Paulina and her husband, Jose Guerson, since 1956. They took
care of her, spent for her daily needs and medical expenses, especially when
she was hospitalized prior to her death. She stated that Paulina was never
badly in need of money during her lifetime.
On August 29, 1996, the CA reversed the trial courts decision, thus:
WHEREFORE, the decision dated March 23, 1994 is hereby SET ASIDE.
The plaintiffs-appellants Felipe Rigonan and Concepcion Rigonan are
declared the owners of the properties under litigation and the defendants-
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appellees are hereby ordered to VACATE the subject properties and
SURRENDER the possession thereof to the heirs of the plaintiffs-appellants.
V
THAT THE FINDINGS OF FACT OF RESPONDENT COURT OF
APPEALS ARE PREMISED ON SUPPOSED ABSENCE OF EVIDENCE
BUT IS CONTRADICTED BY THE EVIDENCE ON RECORD THUS
CONSTITUTES GRAVE ABUSE OF DISCRETION.[6]
The basic issue for our consideration is, did private respondents sufficiently
establish the existence and due execution of the Deed of Absolute and
Irrevocable Sale of Real Property? Marked as Exhibits A, A-1, 1 and 1-a, this
deed purportedly involved nine (9) parcels of land, inclusive of the three (3)
parcels in dispute, sold at the price of P850 by Paulina Rigonan to private
respondents on January 28, 1965, at Batac, Ilocos Norte.[7] The trial court
found the deed fake, being a carbon copy with no typewritten original
presented; and the court concluded that the documents execution was tainted
with alterations, defects, tamperings, and irregularities which render it null
and void ab initio.[8]
Petitioners argue that the Court of Appeals erred in not applying the doctrine
that factual findings of trial courts are entitled to great weight and respect on
appeal, especially when said findings are established by unrebutted
testimonial and documentary evidence. They add that the Court of Appeals,
in reaching a different conclusion, had decided the case contrary to the
evidence presented and the law applicable to the case. Petitioners maintain
that the due execution of the deed of sale was not sufficiently established by
private respondents, who as plaintiffs had the burden of proving it. First, the
testimonies of the two alleged instrumental witnesses of the sale, namely,
Juan Franco and Efren Sibucao, were dispensed with and discarded when
Franco retracted his oral and written testimony that he was a witness to the
execution of the subject deed. As a consequence, the appellate court merely
relied on Atty. Tagatags (the notary public) testimony, which was incredible
because aside from taking the double role of a witness and notary public, he
was a paid witness. Further his testimony, that the subject deed was executed
in the house of Paulina Rigonan, was rebutted by Zosima Domingo, Paulinas
housekeeper, who said that she did not see Atty. Tagatag, Juan Franco and
Efren Sibucao in Paulinas house on the alleged date of the deeds execution.
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Secondly, petitioners said that private respondents failed to account for the
typewritten original of the deed of sale and that the carbon copy filed with
the Register of Deeds was only a duplicate which contained insertions and
erasures. Further, the carbon copy was without an affidavit of explanation, in
violation of the Administrative Code as amended, which requires that if the
original deed of sale is not presented or available upon registration of the
deed, the carbon copy or so-called duplicate original must be accompanied
by an affidavit of explanation, otherwise, registration must be denied.[9]
Thirdly, petitioners aver that the consideration of only P850 for the parcels of
land sold, together with a house and a warehouse, was another indication that
the sale was fictitious because no person who was financially stable would
sell said property at such a grossly inadequate consideration.
due to inadvertence. Petitioners ask for the Courts indulgence for anyway
there was substantial compliance with Revised Circular No. 28-91.
On the contention that here only factual issues had been raised, hence not the
proper subject for review by this Court, petitioners reply that this general rule
admits of exceptions, as when the factual findings of the Court of Appeals
and the trial court are contradictory; when the findings are grounded entirely
on speculations, surmises or conjectures; and when the Court of Appeals
overlooked certain relevant facts not disputed by the parties which if properly
considered would justify a different conclusion. All these, according to
petitioners, are present in this case.
Before proceeding to the main issue, we shall first settle procedural issues
raised by private respondents.
Lastly, petitioners assert that there was abundant evidence that at the time of
the execution of the deed of sale, Paulina Rigonan was already senile. She
could not have consented to the sale by merely imprinting her thumbmark on
the deed.
In their comment, private respondents counter that at the outset the petition
must be dismissed for it lacks a certification against forum-shopping.
Nonetheless, even disregarding this requirement, the petition must still be
denied in due course for it does not present any substantial legal issue, but
factual or evidentiary ones which were already firmly resolved by the Court
of Appeals based on records and the evidence presented by the parties.
Private respondents claim that the factual determination by the trial court
lacks credibility for it was made by the trial judge who presided only in one
hearing of the case. The trial judge could not validly say that the deed of
absolute sale was fake because no signature was forged, according to private
respondents; and indeed a thumbmark, said to be the sellers own, appears
thereon.
In their reply, petitioners said that the copy of the petition filed with this
Court was accompanied with a certification against forum shopping. If
private respondents copy did not contain same certification, this was only
While the trial judge deciding the case presided over the hearings of the case
only once, this circumstance could not have an adverse effect on his decision.
The continuity of a court and the efficacy of its proceedings are not affected
by the death, resignation or cessation from the service of the presiding judge.
A judge may validly render a decision although he has only partly heard the
testimony of the witnesses.[10] After all, he could utilize and rely on the
records of the case, including the transcripts of testimonies heard by the
former presiding judge.
While the issues raised in this petition might appear to be mainly factual, this
petition is properly given due course because of the contradictory findings of
the trial court and the Court of Appeals. Further, the latter court apparently
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overlooked certain relevant facts which justify a different conclusion.[12]
Moreover, a compelling sense to make sure that justice is done, and done
rightly in the light of the issues raised herein, constrains us from relying on
technicalities alone to resolve this petition.
and June 10, 1966, 3:16 P.M.,[18] and different entry numbers: 66246,
74389[19] and 64369.[20] The deed was apparently registered long after its
alleged date of execution and after Paulinas death on March 20, 1966.[21]
Admittedly, the alleged vendor Paulina Rigonan was not given a copy.[22]
Now, on the main issue. Did private respondents establish the existence and
due execution of the deed of sale? Our finding is in the negative. First, note
that private respondents as plaintiffs below presented only a carbon copy of
this deed. When the Register of Deeds was subpoenaed to produce the deed,
no original typewritten deed but only a carbon copy was presented to the trial
court. Although the Court of Appeals calls it a duplicate original, the deed
contained filled in blanks and alterations. None of the witnesses directly
testified to prove positively and convincingly Paulinas execution of the
original deed of sale. The carbon copy did not bear her signature, but only
her alleged thumbprint. Juan Franco testified during the direct examination
that he was an instrumental witness to the deed. However, when crossexamined and shown a copy of the subject deed, he retracted and said that
said deed of sale was not the document he signed as witness.[13] He declared
categorically he knew nothing about it.[14]
Furthermore, it appears that the alleged vendor was never asked to vacate the
premises she had purportedly sold. Felipe testified that he had agreed to let
Paulina stay in the house until her death.[23] In Alcos v. IAC, 162 SCRA
823 (1988), the buyers immediate possession and occupation of the property
was deemed corroborative of the truthfulness and authenticity of the deed of
sale. The alleged vendors continued possession of the property in this case
throws an inverse implication, a serious doubt on the due execution of the
deed of sale. Noteworthy, the same parcels of land involved in the alleged
sale were still included in the will subsequently executed by Paulina and
notarized by the same notary public, Atty. Tagatag.[24] These circumstances,
taken together, militate against unguarded acceptance of the due execution
and genuineness of the alleged deed of sale.
We note that another witness, Efren Sibucao, whose testimony should have
corroborated Atty. Tagatags, was not presented and his affidavit was
withdrawn from the court,[15] leaving only Atty. Tagatags testimony, which
aside from being uncorroborated, was self-serving.
Secondly, we agree with the trial court that irregularities abound regarding
the execution and registration of the alleged deed of sale. On record, Atty.
Tagatag testified that he himself registered the original deed with the
Register of Deeds.[16] Yet, the original was nowhere to be found and none
could be presented at the trial. Also, the carbon copy on file, which is
allegedly a duplicate original, shows intercalations and discrepancies when
compared to purported copies in existence. The intercalations were allegedly
due to blanks left unfilled by Atty. Tagatag at the time of the deeds
registration. The blanks were allegedly filled in much later by a
representative of the Register of Deeds. In addition, the alleged other copies
of the document bore different dates of entry: May 16, 1966, 10:20 A.M.[17]
Thirdly, we have to take into account the element of consideration for the
sale. The price allegedly paid by private respondents for nine (9) parcels,
including the three parcels in dispute, a house and a warehouse, raises further
questions. Consideration is the why of a contract, the essential reason which
moves the contracting parties to enter into the contract.[25] On record, there
is unrebutted testimony that Paulina as landowner was financially well off.
She loaned money to several people.[26] We see no apparent and compelling
reason for her to sell the subject parcels of land with a house and warehouse
at a meager price of P850 only.
In Rongavilla vs. CA, 294 SCRA 289 (1998), private respondents were in
their advanced years, and were not in dire need of money, except for a small
amount of P2,000 which they said were loaned by petitioners for the repair of
their houses roof. We ruled against petitioners, and declared that there was
no valid sale because of lack of consideration.
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In the present case, at the time of the execution of the alleged contract,
Paulina Rigonan was already of advanced age and senile. She died an
octogenarian on March 20, 1966, barely over a year when the deed was
allegedly executed on January 28, 1965, but before copies of the deed were
entered in the registry allegedly on May 16 and June 10, 1966. The general
rule is that a person is not incompetent to contract merely because of
advanced years or by reason of physical infirmities.[27] However, when such
age or infirmities have impaired the mental faculties so as to prevent the
person from properly, intelligently, and firmly protecting her property rights
then she is undeniably incapacitated. The unrebutted testimony of Zosima
Domingo shows that at the time of the alleged execution of the deed, Paulina
was already incapacitated physically and mentally. She narrated that Paulina
played with her waste and urinated in bed. Given these circumstances, there
is in our view sufficient reason to seriously doubt that she consented to the
sale of and the price for her parcels of land. Moreover, there is no receipt to
show that said price was paid to and received by her. Thus, we are in
agreement with the trial courts finding and conclusion on the matter:
The whole evidence on record does not show clearly that the fictitious
P850.00 consideration was ever delivered to the vendor. Undisputably, the
P850.00 consideration for the nine (9) parcels of land including the house
and bodega is grossly and shockingly inadequate, and the sale is null and
void ab initio.[28]
SO ORDERED.
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2. Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-15113
On the thesis that the sales made by petitioner to his wife were null and void
pursuant to the provisions of Article 1490 of the Civil Code of the
Philippines (formerly, Art. 1458, Civil Code of 1889), the Collector
considered the sales made by Mrs. Medina as the petitioner's original sales
taxable under Section 186 of the National Internal Revenue Code and,
therefore, imposed a tax assessment on petitioner, calling for the payment of
P4,553.54 as deficiency sales taxes and surcharges from 1949 to 1952. This
same assessment of September 26, 1953 sought also the collection of another
sum of P643.94 as deficiency sales tax and surcharge based on petitioner's
quarterly returns from 1946 to 1952.
The records show that on or about May 20, 1944, petitioning taxpayer
Antonio Medina married Antonia Rodriguez. Before 1946, the spouses had
neither property nor business of their own. Later, however, petitioner
acquired forest, concessions in the municipalities of San Mariano and
Palanan in the Province of Isabela. From 1946 to 1948, the logs cut and
removed by the petitioner from his concessions were sold to different persons
in Manila through his agent, Mariano Osorio.
847.28
5% tax due on 16,874.52 - 1951
843.75
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5% tax due on 11,009.94 - 1952
by the petitioner to his wife could be considered as his original taxable sales
under the provisions of Section 186 of the National Internal Revenue Code.
550.50
TOTAL sales tax due
P2,602.0
25% Surcharge thereon
650.51
Short taxes per quarterly returns, 3rd quarter, 1950
58.52
25% Surcharge thereon
14.63
TOTAL AMOUNT due & collectible
P3,325.68
Petitioner again requested for reconsideration, but respondent Collector, in
his letter of April 4, 1955, denied the same.
In his petition for review to this Court, petitioner raises several assignments
of error revolving around the central issue of whether or not the sales made
Relying mainly on testimonial evidence that before their marriage, he and his
wife executed and recorded a prenuptial agreement for a regime of complete
separation of property, and that all trace of the document was lost on account
of the war, petitioner imputes lack of basis for the tax court's factual finding
that no agreement of complete separation of property was ever executed by
and between the spouses before their marriage. We do not think so. Aside
from the material inconsistencies in the testimony of petitioner's witnesses
pointed out by the trial court, the circumstantial evidence is against
petitioner's claim. Thus, it appears that at the time of the marriage between
petitioner and his wife, they neither had any property nor business of their
own, as to have really urged them to enter into the supposed property
agreement. Secondly, the testimony that the separation of property agreement
was recorded in the Registry of Property three months before the marriage, is
patently absurd, since such a prenuptial agreement could not be effective
before marriage is celebrated, and would automatically be cancelled if the
union was called off. How then could it be accepted for recording prior to the
marriage? In the third place, despite their insistence on the existence of the
ante nuptial contract, the couple, strangely enough, did not act in accordance
with its alleged covenants. Quite the contrary, it was proved that even during
their taxable years, the ownership, usufruct, and administration of their
properties and business were in the husband. And even when the wife was
engaged in lumber dealing, and she and her husband contracted sales with
each other as aforestated, the proceeds she derived from her alleged
subsequent disposition of the logs incidentally, by and through the same
agent of her husband, Mariano Osorio were either received by Osorio for
the petitioner or deposited by said agent in petitioner's current account with
the Philippine National Bank. Fourth, although petitioner, a lawyer by
profession, already knew, after he was informed by the Collector on or about
September of 1953, that the primary reason why the sales of logs to his wife
could not be considered as the original taxable sales was because of the
express prohibition found in Article 1490 of the Civil Code of sales between
spouses married under a community system; yet it was not until July of 1954
that he alleged, for the first time, the existence of the supposed property
separation agreement. Finally, the Day Book of the Register of Deeds on
which the agreement would have been entered, had it really been registered
as petitioner insists, and which book was among those saved from the
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ravages of the war, did not show that the document in question was among
those recorded therein.
We have already ruled that when the credibility of witnesses is the one at
issue, the trial court's judgment as to their degree of credence deserves
serious consideration by this Court (Collector vs. Bautista, et al., G.R. Nos.
L-12250 & L-12259, May 27, 1959). This is all the more true in this case
because not every copy of the supposed agreement, particularly the one that
was said to have been filed with the Clerk of Court of Isabela, was accounted
for as lost; so that, applying the "best evidence rule", the court did right in
giving little or no credence to the secondary evidence to prove the due
execution and contents of the alleged document (see Comments on the Rules
of Court, Moran, 1957 Ed., Vol. 3, pp. 10.12).
Petitioner's contention that the respondent Collector can not assail the
questioned sales, he being a stranger to said transactions, is likewise
untenable. The government, as correctly pointed out by the Tax Court, is
always an interested party to all matters involving taxable transactions and,
needless to say, qualified to question their validity or legitimacy whenever
necessary to block tax evasion.
Contracts violative of the provisions of Article 1490 of the Civil Code are
null and void (Uy Sui Pin vs. Cantollas, 70 Phil. 55; Uy Coque vs. Sioca 45
Phil. 43). Being void transactions, the sales made by the petitioner to his wife
It is also the petitioner's contention that the lower court erred in using
illegally seized documentary evidence against him. But even assuming
arguendo the truth of petitioner's charge regarding the seizure, it is now
settled in this jurisdiction that illegally obtained documents and papers are
admissible in evidence, if they are found to be competent and relevant to the
case (see Wong & Lee vs. Collector of Internal Revenue, G.R. No. L-10155,
August 30, 1958). In fairness to the Collector, however, it should be stated
that petitioner's imputation is vehemently denied by him, and relying on
Sections 3, 9, 337 and 338 of the Tax Code and the pertinent portions of
Revenue Regulations No. V-1 and citing this Court's ruling in U.S. vs.
Aviado, 38 Phil. 10, the Collector maintains that he and other internal
revenue officers and agents could require the production of books of
accounts and other records from a taxpayer. Having arrived at the foregoing
conclusion, it becomes unnecessary to discuss the other issues raised, which
are but premised on the assumption that a premarital agreement of total
separation of property existed between the petitioner and his wife.
Separate Opinions
CONCEPCION, J., concurring:
I concur in the result. I do not share the view that documents and papers
illegally obtained are admissible in evidence, if competent and relevant to the
case. In this connection, I believe in the soundness of the following
observations of the Supreme Court of the United States in Weeks v. United
States (232 US 383, 58 L. ed. 652, 34 S. Ct. 341):1
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The effect of the Fourth Amendment is to put the courts of the United States
and Federal officials, in the exercise of their power and authority, under
limitations and restraints as to the exercise of such power and authority, an to
forever secure the people, their persons, houses, papers, and effects against
all unreasonable searches and seizures under the guise of law. This protection
reaches all alike, whether accused of crime or not, and the duty of giving to it
force and effect is obligatory upon all entrusted under our Federal system
with the enforcement of the laws. The tendency of those who execute the
criminal laws of the country to obtain conviction by means of unlawful
seizures and enforced confessions, the latter often obtained after subjecting
accused persons to unwarranted practices destructive of rights secured by the
Federal Constitution, should find no sanction in the judgments of the courts
which are charged at all times with the support of the Constitution and to
which people of all conditions have a right to appeal for the maintenance of
such fundamental rights.
xxx
xxx
xxx
If letters and private documents can thus be seized and held and used in
evidence, against a citizen accused of an offense, the protection of the
Fourth. Amendment declaring his right to be secured against such searches
and seizures is of no value, and, so far as those thus placed are concerned
well be stricken from the Constitution. The efforts of the courts and their
officials to bring the guilty to punishment, praiseworthy as they are, are not
to be aided by the sacrifice of those great principles established by years of
endeavor and suffering which have resulted in their embodiment in the
fundamental law of the land." as applied and amplified in Elkins v. United
States (June 27, 1960), 4 L. ed. 1669.
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3. EN BANC
[G.R. No. L-28771. March 31, 1971.]
donations should subsist lest the condition of those who incurred guilt should
turn out to be better. So long as marriage remains the cornerstone of our
family law, reason and morality alike demand that the disabilities attached to
marriage should likewise attach to concubinage.
SYLLABUS
DECISION
FERNANDO, J.:
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view merits fully the acceptance of this Court. The decision must be
reversed.
In the decision of November 23, 1965, the lower court, after stating that in
plaintiffs complaint alleging absolute ownership of the parcel of land in
question, she specifically raised the question that the donation made by Felix
Matabuena to defendant Petronila Cervantes was null and void under the
aforesaid article of the Civil Code and that defendant on the other hand did
assert ownership precisely because such a donation was made in 1956 and
her marriage to the deceased did not take place until 1962, noted that when
the case was called for trial on November 19, 1965, there was stipulation of
facts which it quoted. 4 Thus: "The plaintiff and the defendant assisted by
their respective counsels, jointly agree and stipulate: (1) That the deceased
Felix Matabuena owned the property in question; (2) That said Felix
Matabuena executed a Deed of Donation inter vivos in favor of Defendant,
Petronila Cervantes over the parcel of land in question on February 20, 1956,
which same donation was accepted by defendant; (3) That the donation of the
land to the defendant which took effect immediately was made during the
common law relationship as husband and wife between the defendant-done
and the now deceased donor and later said donor and done were married on
March 28, 1962; (4) That the deceased Felix Matabuena died intestate on
September 13, 1962; (5) That the plaintiff claims the property by reason of
being the only sister and nearest collateral relative of the deceased by virtue
of an affidavit of self-adjudication executed by her in 1962 and had the land
declared in her name and paid the estate and inheritance taxes thereon" 5
The judgment of the lower court on the above facts was adverse to plaintiff.
It reasoned out thus: "A donation under the terms of Article 133 of the Civil
Code is void if made between the spouses during the marriage. When the
donation was made by Felix Matabuena in favor of the defendant on
February 20, 1956, Petronila Cervantes and Felix Matabuena were not yet
married. At that time they were not spouses. They became spouses only
when they married on March 28, 1962, six years after the deed of donation
had been executed." 6
We reach a different conclusion. While Art. 133 of the Civil Code considers
as void a "donation between the spouses during the marriage," policy
considerations of the most exigent character as well as the dictates of
morality require that the same prohibition should apply to a common-law
relationship. We reverse.
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as much a part of it as what is written, this is it. Otherwise the basic purpose
discernible in such codal provision would not be attained. Whatever omission
may be apparent in an interpretation purely literal of the language used must
be remedied by an adherence to its avowed objective. In the language of
Justice Pablo: "El espiritu que informa la ley debe ser la luz que ha de guiar a
los tribunales en la aplicacin de sus disposiciones. 10
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4. Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-57499
In 1978, FERNANDO abandoned his family and was living with private
respondent Corazon DAGUINES. During the pendency of this appeal, they
were convicted of concubinage in a judgment rendered on October 27, 1981
by the then Court of First Instance of Pangasinan, Branch II, which judgment
has become final.
On April 15, 1980, FERNANDO sold the subject property with the house
thereon to DAGUINES for the sum of P2,000.00. In the document of sale,
FERNANDO described the house as "also inherited by me from my deceased
parents."
MELENCIO-HERRERA, J.:
(1)
Declaring plaintiff as the true and lawful owner of the land in
question and the 10 coconut trees;
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(2)
Declaring as null and void the sale of the conjugal house to plaintiff
on April 15, 1980 (Exhibit A) including the 3 coconut trees and other crops
planted during the conjugal relation between Fernando Canullas (vendor) and
his legitimate wife, herein defendant Mercedes Calimlim- Canullas;
xxx
xxx
xxx
The issues posed for resolution are (1) whether or not the construction of a
conjugal house on the exclusive property of the husband ipso facto gave the
land the character of conjugal property; and (2) whether or not the sale of the
lot together with the house and improvements thereon was valid under the
circumstances surrounding the transaction.
It is true that in the case of Maramba vs. Lozano, 3 relied upon by respondent
Judge, it was held that the land belonging to one of the spouses, upon which
the spouses have built a house, becomes conjugal property only when the
conjugal partnership is liquidated and indemnity paid to the owner of the
land. We believe that the better rule is that enunciated by Mr. Justice J.B.L.
Reyes in Padilla vs. Paterno, 3 SCRA 678, 691 (1961), where the following
was explained:
xxx
xxx
xxx
We hold that pursuant to the foregoing provision both the land and the
building belong to the conjugal partnership but the conjugal partnership is
indebted to the husband for the value of the land. The spouse owning the lot
becomes a creditor of the conjugal partnership for the value of the lot, 1
which value would be reimbursed at the liquidation of the conjugal
partnership. 2
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Anent the second issue, we find that the contract of sale was null and void for
being contrary to morals and public policy. The sale was made by a husband
in favor of a concubine after he had abandoned his family and left the
conjugal home where his wife and children lived and from whence they
derived their support. That sale was subversive of the stability of the family,
a basic social institution which public policy cherishes and protects. 5
Article 1409 of the Civil Code states inter alia that: contracts whose cause,
object, or purpose is contrary to law, morals, good customs, public order, or
public policy are void and inexistent from the very beginning.
Article 1352 also provides that: "Contracts without cause, or with unlawful
cause, produce no effect whatsoever. The cause is unlawful if it is contrary to
law, morals, good customs, public order, or public policy."
We reach a different conclusion. While Art. 133 of the Civil Code considers
as void a donation between the spouses during the marriage, policy
considerations of the most exigent character as wen as the dictates of
SO ORDERED.
SALES
5. Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-35702
under a claim of title many years before Francisco Militante sold the land to
the plaintiff."
Furthermore, even assuming that Militante had anything to sell, the deed of
sale executed in 1956 by him in favor of plaintiff at a time when plaintiff was
concededly his counsel of record in the land registration case involving the
very land in dispute (ultimately decided adversely against Militante by the
Court of Appeals' 1958 judgment affirming the lower court's dismissal of
Militante's application for registration) was properly declared inexistent and
void by the lower court, as decreed by Article 1409 in relation to Article
1491 of the Civil Code.
Such dismissal was proper, plaintiff having no cause of action, since it was
duly established in the record that the application for registration of the land
in question filed by Francisco Militante, plaintiff's vendor and predecessor
interest, had been dismissed by decision of 1952 of the land registration court
as affirmed by final judgment in 1958 of the Court of Appeals and hence,
there was no title or right to the land that could be transmitted by the
purported sale to plaintiff.
As late as 1964, the Iloilo court of first instance had in another case of
ejectment likewise upheld by final judgment defendant's "better right to
possess the land in question . having been in the actual possession thereof
On December 9, 1964, the trial court issued a pre-trial order, after a pre-trial
conference between the parties and their counsel which order reads as
follows..
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'When this case was called for a pre-trial conference today, the plaintiff
appeared assisted by himself and Atty. Gregorio M. Rubias. The defendant
also appeared, assisted by his counsel Atty. Vicente R. Acsay.
A. During the pre-trial conference, the parties have agreed that the following
facts are attendant in this case and that they will no longer introduced any
evidence, testimonial or documentary to prove them:
1.
That Francisco Militante claimed ownership of a parcel of land
located in the Barrio of General Luna, municipality of Barotac Viejo
province of Iloilo, which he caused to be surveyed on July 18-31, 1934,
whereby he was issued a plan Psu-99791 (Exhibit "B"). (The land claimed
contained an area of 171:3561 hectares.)
2.
Before the war with Japan, Francisco Militante filed with the Court
of First Instance of Iloilo an application for the registration of the title of the
land technically described in psu-99791 (Exh. "B") opposed by the Director
of Lands, the Director of Forestry and other oppositors. However, during the
war with Japan, the record of the case was lost before it was heard, so after
the war Francisco Militante petitioned this court to reconstitute the record of
the case. The record was reconstituted on the Court of the First Instance of
Iloilo and docketed as Land Case No. R-695, GLRO Rec. No. 54852. The
Court of First Instance heard the land registration case on November 14,
1952, and after the trial this court dismissed the application for registration.
The appellant, Francisco Militante, appealed from the decision of this Court
to the Court of Appeals where the case was docketed as CA-GR No. 13497R..
3.
Pending the disposal of the appeal in CA-GR No. 13497-R and more
particularly on June 18, 1956, Francisco Militante sold to the plaintiff,
Domingo Rubias the land technically described in psu-99791 (Exh. "A"). The
sale was duly recorded in the Office of the Register of Deeds for the province
of Iloilo as Entry No. 13609 on July 11, 1960 (Exh. "A-1").
(NOTE: As per deed of sale, Exh. A, what Militante purportedly sold to
plaintiff-appellant, his son-in-law, for the sum of P2,000.00 was "a parcel of
untitled land having an area Of 144.9072 hectares ... surveyed under Psu
99791 ... (and) subject to the exclusions made by me, under (case) CA-i3497,
Land Registration Case No. R-695, G.L.R.O. No. 54852, Court of First
SALES
1946, for the year 1950, and for the year 1960 as shown by the certificate of
the treasurer (Exh. "3"). The defendant may present to the Court other land
taxes receipts for the payment of taxes for this lot.
9.
The land claimed by the defendant as his own was surveyed on June
6 and 7,1956, and a plan approved by Director of Land on November 15,
1956 was issued, identified as Psu 155241 (Exh. "5").
2.
On September 22, 1934, Yap Pongco sold this land to Francisco
Militante as evidenced by a notarial deed (Exh. "J") which was registered in
the Registry of Deeds on May 13, 1940 (Exh. "J-1").
10.
On April 22, 1960, the plaintiff filed forcible Entry and Detainer case
against Isaias Batiller in the Justice of the Peace Court of Barotac Viejo
Province of Iloilo (Exh. "4") to which the defendant Isaias Batiller riled his
answer on August 29, 1960 (Exh. "4-A"). The Municipal Court of Barotac
Viejo after trial, decided the case on May 10, 1961 in favor of the defendant
and against the plaintiff (Exh. "4-B"). The plaintiff appealed from the
decision of the Municipal Court of Barotac Viejo which was docketed in this
Court as Civil Case No. 5750 on June 3, 1961, to which the defendant, Isaias
Batiller, on June 13, 1961 filed his answer (Exh. "4-C"). And this Court after
the trial. decided the case on November 26, 1964, in favor of the defendant,
Isaias Batiller and against the plaintiff (Exh. "4-D").
3.
(NOTE: As per Exh. 4-B, which is the Iloilo court of first instance decision
of 26 November 1964 dismissing plaintiff's therein complaint for ejectment
against defendant, the iloilo court expressly found "that plaintiff's complaint
is unjustified, intended to harass the defendant" and "that the defendant,
Isaias Batiller, has a better right to possess the land in question described in
Psu 155241 (Exh. "3"), Isaias Batiller having been in the actual physical
possession thereof under a claim of title many years before Francisco
Militante sold the land to the plaintiff-hereby dismissing plaintiff's complaint
and ordering the plaintiff to pay the defendant attorney's fees ....")
B.
During the trial of this case on the merit, the plaintiff will prove by
competent evidence the following:
C.
Defendants, on the other hand will prove by competent evidence
during the trial of this case the following facts:
1.
That lot No. 2 of the Psu-1552 it (Exh. '5') was originally owned and
possessed by Felipe Batiller, grandfather of the defendant Basilio Batiller, on
the death of the former in 1920, as his sole heir. Isaias Batiller succeeded his
father , Basilio Batiller, in the ownership and possession of the land in the
year 1930, and since then up to the present, the land remains in the
possession of the defendant, his possession being actual, open, public,
peaceful and continuous in the concept of an owner, exclusive of any other
rights and adverse to all other claimants.
2.
That the alleged predecessors in interest of the plaintiff have never
been in the actual possession of the land and that they never had any title
thereto.
3.
That Lot No. 2, Psu 155241, the subject of Free Patent application of
the defendant has been approved.
4.
The damages suffered by the defendant, as alleged in his
counterclaim."' 1
The appellate court further related the developments of the case, as follows:
1.
That the land he purchased from Francisco Militante under Exh. "A"
was formerly owned and possessed by Liberato Demontao but that on
September 6, 1919 the land was sold at public auction by virtue of a
judgment in a Civil Case entitled "Edw J. Pflieder plaintiff vs. Liberato
Demontao Francisco Balladeros and Gregorio Yulo, defendants", of which
Yap Pongco was the purchaser (Exh. "1-3"). The sale was registered in the
Office of the Register of Deeds of Iloilo on August 4, 1920, under Primary
Entry No. 69 (Exh. "1"), and a definite Deed of Sale was executed by
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which aforesaid case plaintiff was the counsel on record of his father-in-law,
Francisco Militante. Invoking Arts. 1409 and 1491 of the Civil Code which
reads:
'Art. 1409. The following contracts are inexistent and void from the
beginning:
xxx
xxx
xxx
(7)
void. In due season plaintiff filed a motion for reconsideration (pp. 50-56
Record on Appeal) which was denied by the lower court on January 14, 1966
(p. 57, Record on Appeal).
Hence, this appeal by plaintiff from the orders of October 18, 1965 and
January 14, 1966.
xxx
xxx
(5)
Justices, judges, prosecuting attorneys, clerks of superior and inferior
courts, and other officers and employees connected with the administration
of justice, the property and rights of in litigation or levied upon an execution
before the court within whose jurisdiction or territory they exercise their
respective functions; this prohibition includes the act of acquiring an
assignment and shall apply to lawyers, with respect to the property and rights
which may be the object of any litigation in which they may take part by
virtue of their profession.'
defendant claims that plaintiff could not have acquired any interest in the
property in dispute as the contract he (plaintiff) had with Francisco Militante
was inexistent and void. (See pp. 22-31, Record on Appeal). Plaintiff
strongly opposed defendant's motion to dismiss claiming that defendant can
not invoke Articles 1409 and 1491 of the Civil Code as Article 1422 of the
same Code provides that 'The defense of illegality of contracts is not
available to third persons whose interests are not directly affected' (See pp.
32-35 Record on Appeal).
On October 18, 1965, the lower court issued an order disclaiming plaintiffs
complaint (pp. 42-49, Record on Appeal.) In the aforesaid order of dismissal
the lower court practically agreed with defendant's contention that the
contract (Exh. A) between plaintiff and Francism Militante was null and
'1.
The lower court erred in holding that the contract of sale between the
plaintiff-appellant and his father-in-law, Francisco Militante, Sr., now
deceased, of the property covered by Plan Psu-99791, (Exh. "A") was void,
not voidable because it was made when plaintiff-appellant was the counsel of
the latter in the Land Registration case.
'2.
The lower court erred in holding that the defendant-appellee is an
interested person to question the validity of the contract of sale between
plaintiff-appellant and the deceased, Francisco Militante, Sr.
'3.
The lower court erred in entertaining the motion to dismiss of the
defendant-appellee after he had already filed his answer, and after the
termination of the pre-trial, when the said motion to dismiss raised a
collateral question.
'4.
The lower court erred in dismissing the complaint of the plaintiffappellant.'
The appellate court concluded that plaintiffs "assignment of errors gives rise
to two (2) legal posers (1) whether or not the contract of sale between
appellant and his father-in-law, the late Francisco Militante over the property
subject of Plan Psu-99791 was void because it was made when plaintiff was
counsel of his father-in-law in a land registration case involving the property
in dispute; and (2) whether or not the lower court was correct in entertaining
defendant-appellee's motion to dismiss after the latter had already filed his
answer and after he (defendant) and plaintiff-appellant had agreed on some
matters in a pre-trial conference. Hence, its elevation of the appeal to this
Court as involving pure questions of law.
SALES
It is at once evident from the foregoing narration that the pre-trial conference
held by the trial court at which the parties with their counsel agreed and
stipulated on the material and relevant facts and submitted their respective
documentary exhibits as referred to in the pre-trial order, supra, 2 practically
amounted to a fulldress trial which placed on record all the facts and exhibits
necessary for adjudication of the case.
The four points on which defendant on his part reserved the presentation of
evidence at the trial dealing with his and his ancestors' continuous, open,
public and peaceful possession in the concept of owner of the land and the
Director of Lands' approval of his survey plan thereof, supra, 5 are likewise
already duly established facts of record, in the land registration case as well
as in the ejectment case wherein the Iloilo court of first instance recognized
the superiority of defendant's right to the land as against plaintiff.
1.
The stipulated facts and exhibits of record indisputably established
plaintiff's lack of cause of action and justified the outright dismissal of the
complaint. Plaintiff's claim of ownership to the land in question was
predicated on the sale thereof for P2,000.00 made in 1956 by his father-in-
With the Court of Appeals' 1958 final judgment affirming the dismissal of
Militante's application for registration, the lack of any rightful claim or title
of Militante to the land was conclusively and decisively judicially
determined. Hence, there was no right or title to the land that could be
transferred or sold by Militante's purported sale in 1956 in favor of plaintiff.
2.
No error could be attributed either to the lower court's holding that
the purchase by a lawyer of the property in litigation from his client is
categorically prohibited by Article 1491, paragraph (5) of the Philippine
Civil Code, reproduced supra; 6 and that consequently, plaintiff's purchase of
the property in litigation from his client (assuming that his client could sell
the same since as already shown above, his client's claim to the property was
defeated and rejected) was void and could produce no legal effect, by virtue
of Article 1409, paragraph (7) of our Civil Code which provides that
contracts "expressly prohibited or declared void by law' are "inexistent and
that "(T)hese contracts cannot be ratified. Neither can the right to set up the
defense of illegality be waived."
The 1911 case of Wolfson vs. Estate of Martinez 7 relied upon by plaintiff as
holding that a sale of property in litigation to the party litigant's lawyer "is
not void but voidable at the election of the vendor" was correctly held by the
lower court to have been superseded by the later 1929 case of Director of
Lands vs. Abagat. 8 In this later case of Abagat, the Court expressly cited
two antecedent cases involving the same transaction of purchase of property
in litigation by the lawyer which was expressly declared invalid under Article
1459 of the Civil Code of Spain (of which Article 1491 of our Civil Code of
the Philippines is the counterpart) upon challenge thereof not by the vendor-
SALES
client but by the adverse parties against whom the lawyer was to enforce his
rights as vendee thus acquired.
These two antecedent cases thus cited in Abagat clearly superseded (without
so expressly stating the previous ruling in Wolfson:
The spouses, Juan Soriano and Vicente Macaraeg, were the owners of twelve
parcels of land. Vicenta Macaraeg died in November, 1909, leaving a large
number of collateral heirs but no descendants. Litigation between the
surviving husband, Juan Soriano, and the heirs of Vicenta immediately arose,
and the herein appellant Sisenando Palarca acted as Soriano's lawyer. On
May 2, 1918, Soriano executed a deed for the aforesaid twelve parcels of
land in favor of Sisenando Palarca and on the following day, May 3, 1918,
Palarca filed an application for the registration of the land in the deed. After
hearing, the Court of First Instance declared that the deed was invalid by
virtue of the provisions of article 1459 of the Civil Code, which prohibits
lawyers and solicitors from purchasing property rights involved in any
litigation in which they take part by virtue of their profession. The
application for registration was consequently denied, and upon appeal by
Palarca to the Supreme Court, the judgement of the lower court was affirmed
by a decision promulgated November 16,1925. (G.R. No. 24329, Palarca vs.
Director of Lands, not reported.)
In the very case of Abagat itself, the Court, again affirming the invalidity and
nullity of the lawyer's purchase of the land in litigation from his client,
ordered the issuance of a writ of possession for the return of the land by the
lawyer to the adverse parties without reimbursement of the price paid by him
and other expenses, and ruled that "the appellant Palarca is a lawyer and is
presumed to know the law. He must, therefore, from the beginning, have
been well aware of the defect in his title and is, consequently, a possessor in
bad faith."
As already stated, Wolfson and Abagat were decided with relation to Article
1459 of the Civil Code of Spain then adopted here, until it was superseded on
August 30, 1950 by the Civil Code of the Philippines whose counterpart
provision is Article 1491.
Article 1491 of our Civil Code (like Article 1459 of the Spanish Civil Code)
prohibits in its six paragraphs certain persons, by reason of the relation of
trust or their peculiar control over the property, from acquiring such property
in their trust or control either directly or indirectly and "even at a public or
judicial auction," as follows: (1) guardians; (2) agents; (3) administrators; (4)
public officers and employees; judicial officers and employees, prosecuting
attorneys, and lawyers; and (6) others especially disqualified by law.
SALES
hereinbefore referred to must be asserted by the person having the necessary
legal capacity to do so and decreed by a competent
court." 11
The Supreme Court of Spain and modern authors have likewise veered from
Manresa's view of the Spanish codal provision itself. In its sentencia of 11
June 1966, the Supreme Court of Spain ruled that the prohibition of Article
1459 of the Spanish Civil Code is based on public policy, that violation of
the prohibition contract cannot be validated by confirmation or ratification,
holding that:
Citing the same decisions of the Supreme Court of Spain, Gullon Ballesteros,
his "Curso de Derecho Civil, (Contratos Especiales)" (Madrid, 1968) p. 18,
affirms that, with respect to Article 1459, Spanish Civil Code:.
Que caracter tendra la compra que se realice por estas personas? Porsupuesto
no cabe duda de que el caso (art.) 1459, 40 y 50, la nulidad esabsoluta porque
el motivo de la prohibicion es de orden publico. 14
... la prohibicion que el articulo 1459 del C.C. establece respecto a los
administradores y apoderados, la cual tiene conforme a la doctrina de esta
Sala, contendia entre otras, en S. de 27-5-1959, un fundamento de orden
moral lugar la violacion de esta a la nulidad de pleno derecho del acto o
negocio celebrado, ... y prohibicion legal, afectante orden publico, no cabe
con efecto alguno la aludida retification ... 13
The criterion of nullity of such prohibited contracts under Article 1459 of the
Spanish Civil Code (Article 1491 of our Civil Code) as a matter of public
order and policy as applied by the Supreme Court of Spain to administrators
and agents in its above cited decision should certainly apply with greater
reason to judges, judicial officers, fiscals and lawyers under paragraph 5 of
the codal article.
SALES
new article of our Civil Code, viz, Article 1409 declaring such prohibited
contracts as "inexistent and void from the beginning." 18
Indeed, the nullity of such prohibited contracts is definite and permanent and
cannot be cured by ratification. The public interest and public policy remain
paramount and do not permit of compromise or ratification. In his aspect, the
permanent disqualification of public and judicial officers and lawyers
grounded on public policy differs from the first three cases of guardians,
agents and administrators (Article 1491, Civil Code), as to whose
transactions it had been opined that they may be "ratified" by means of and in
"the form of a new contact, in which cases its validity shall be determined
only by the circumstances at the time the execution of such new contract.
The causes of nullity which have ceased to exist cannot impair the validity of
the new contract. Thus, the object which was illegal at the time of the first
contract, may have already become lawful at the time of the ratification or
second contract; or the service which was impossible may have become
possible; or the intention which could not be ascertained may have been
clarified by the parties. The ratification or second contract would then be
valid from its execution; however, it does not retroact to the date of the first
contract." 19
As applied to the case at bar, the lower court therefore properly acted upon
defendant-appellant's motion to dismiss on the ground of nullity of plaintiff's
alleged purchase of the land, since its juridical effects and plaintiff's alleged
cause of action founded thereon were being asserted against defendantappellant. The principles governing the nullity of such prohibited contracts
and judicial declaration of their nullity have been well restated by Tolentino
in his treatise on our Civil Code, as follows:
Parties Affected. Any person may invoke the in existence of the contract
whenever juridical effects founded thereon are asserted against him. Thus, if
there has been a void transfer of property, the transferor can recover it by the
accion reinvindicatoria; and any prossessor may refuse to deliver it to the
transferee, who cannot enforce the contract. Creditors may attach property of
the debtor which has been alienated by the latter under a void contract; a
mortgagee can allege the inexistence of a prior encumbrance; a debtor can
If the void contract is still fully executory, no party need bring an action to
declare its nullity; but if any party should bring an action to enforce it, the
other party can simply set up the nullity as a defense. 20
SALES
6. EN BANC
[G.R. No. L-8477. May 31, 1956.]
THE PHILIPPINE TRUST COMPANY, as Guardian of the Property of
the minor, MARIANO L. BERNARDO, Petitioner, vs. SOCORRO
ROLDAN, FRANCISCO HERMOSO, FIDEL C. RAMOS and EMILIO
CRUZ, Respondents.
DECISION
BENGZON, J.:
The action rests on the proposition that the first two sales were in reality a
sale by the guardian to herself therefore, null and void under Article 1459
of the Civil Code. As to the third conveyance, it is also ineffective, because
Socorro Roldan had acquired no valid title to convey to Cruz.
The material facts of the case are not complicated. These 17 parcels located
in Guiguinto, Bulacan, were part of the properties inherited by Mariano L.
Bernardo from his father, Marcelo Bernardo, deceased. In view of his
minority, guardianship proceedings were instituted, wherein Socorro Roldan
was appointed his guardian. She was the surviving spouse of Marcelo
Bernardo, and the stepmother of said Mariano L. Bernardo.
The court of first instance, following our decision in Rodriguez vs. Mactal,
60 Phil. 13 held the article was not controlling, because there was no proof
that Fidel C. Ramos was a mere intermediary or that the latter had previously
agreed with Socorro Roldan to buy the parcels for her benefit.
However, taking the former guardian at her word - she swore she had
repurchased the lands from Dr. Fidel C. Ramos to preserve it and to give her
protege opportunity to redeem the court rendered judgment upholding the
contracts but allowing the minor to repurchase all the parcels by paying
P15,000, within one year.
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The Court of Appeals affirmed the judgment, adding that the minor knew the
particulars of, and approved the transaction, and that only clear and positive
evidence of fraud or bad faith, and not mere insinuations and inferences will
overcome the presumptions that a sale was concluded in all good faith for
value.
Again, supposing she knew the parcels were actually worth P17,000; chan
roblesvirtualawlibrarythen she agreed to sell them to Dr. Ramos at P14,700;
chan roblesvirtualawlibraryand knowing the realtys value she offered him
the next day P15,000 or P15,500, and got it. Will there be any doubt that she
was recreant to her guardianship, and that her acquisition should be nullified?
Even without proof that she had connived with Dr. Ramos. Remembering the
general doctrine that guardianship is a trust of the highest order, and the
trustee cannot be allowed to have any inducement to neglect his wards
interest and in line with the courts suspicion whenever the guardian acquires
the wards property 1 we have no hesitation to declare that in this case, in the
eyes of the law, Socorro Roldan took by purchase her wards parcels thru Dr.
Ramos, and that Article 1459 of the Civil Code applies.
In order to bring the sale in this case within the part of Article 1459, quoted
above, it is essential that the proof submitted establish some agreement
between Silverio Chioco and Trinidad Mactal to the effect that Chioco
should buy the property for the benefit of Mactal. If there was no such
agreement, either express or implied, then the sale cannot be set aside cralaw
. (Page 16; chan roblesvirtualawlibraryItalics supplied.)
SALES
elapsed from the judicial approval of the sale (August 12), to the purchase by
the guardian (Aug. 13).
Hence, from both the legal and equitable standpoints these three sales should
not be sustained:chanroblesvirtuallawlibrary the first two for violation of
article 1459 of the Civil Code; chan roblesvirtualawlibraryand the third
because Socorro Roldan could pass no title to Emilio Cruz. The annulment
carries with is (Article 1303 Civil Code) the obligation of Socorro Roldan to
return the 17 parcels together with their fruits and the duty of the minor,
through his guardian to repay P14,700 with legal interest.
Authorizing the minor to deliver directly to Emilio Cruz, out of the price of
P14,700 above mentioned, the sum of P3,000; chan
roblesvirtualawlibraryand f. charging Appellees with the costs. SO
ORDERED.
SALES
7. Republic of the Philippines
SUPREME COURT
Manila
original owner. However, they failed to register the sale or secure a transfer
certificate of title in their names.
EN BANC
A.M. Nos. 1302, 1391 and 1543
PER CURIAM:
1.
Summoned to plead in Civil Case No. V-2170, the Valencias engaged the
services of Atty. Dionisio Antiniw. Atty. Antiniw advised them to present a
notarized deed of sale in lieu of the private document written in Ilocano. For
this purpose, Paulino gave Atty. Antiniw an amount of P200.00 to pay the
person who would falsify the signature of the alleged vendor (Complaint, p.
2; Rollo, p. 7). A "Compraventa Definitiva" (Exh. B) was executed
purporting to be a sale of the questioned lot.
Paulino, thereafter, filed a Petition for Certiorari, under Rule 65, with
Preliminary Injunction before the Court of Appeals alleging that the trial
court failed to provide a workable solution concerning his house. While the
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petition was pending, the trial court, on March 9, 1973, issued an order of
execution stating that "the decision in this case has already become final and
executory" (Exhibits 3 and 3-A). On March 14, 1973, a writ of execution was
issued.
On March 20, 1973, Serapia sold 40 square meters of the litigated lot to Atty.
Jovellanos and the remaining portion she sold to her counsel, Atty. Arsenio
Fer. Cabanting, on April 25, 1973. (Annex "A" of Administrative Case No.
1302).
2.
In the year 1954 Atty. Eduardo Jovellanos, fraudulently and in bad faith, in
confabulation with Rosa de los Santos as vendee had, as Notary Public,
executed and ratified before him, two (2) deeds of sale in favor of said Rosa
de los Santos when as a matter of fact the said deeds were not in fact
executed by the supposed vendor Rufino Rincoraya and so Rufino Rincoraya
had filed a Civil Case in Court to annul and declare void the said sales (p. 7,
Report)
On March 21, 1974 the appellate court dismissed the petition of Paulino.
2.
1.
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Felicidad Bernal-Duzon, her aunt who had a claim over the property filed a
complaint against her (Lydia Bernal) and her counsel, Atty. Antiniw for
falsification of a public document. (Complaint, pp. 1-2) The fiscal exonerated
the counsel for lack of evidence, while a case was filed in court against Lydia
Bernal.
Pursuant to the resolution of the First Division of this Court dated December
9, 1974, the resolution of the Second Division dated March 3, 1975 and the
two resolutions of the Second Division both dated December 3, 1975,
Administrative Cases Nos. 1302, 1391 and 1543 were referred to the Office
of the Solicitor General for investigation, report and recommendation.
In view of the seriousness of the charge against the respondents and the
alleged threats against the person of complainant Constancia L. Valencia, We
directed the transfer of investigation to the Regional Trial Court of Manila.
The three administrative cases were raffled to Branch XVII of the Regional
Trial Court of Manila, under the sala of Judge Catalino Castaneda, Jr.
I
Under Article 1491 of the New Civil Code:
xxx
xxx
xxx
SALES
(5)
. . . this prohibition includes the act of acquiring by assignment and
shall apply to lawyers, with respect to the property and rights which may be
the object of any litigation in which they make take part by virtue of their
profession.
Art. 1491, prohibiting the sale to the counsel concerned, applies only while
the litigation is pending. (Director of Lands vs. Adaba, 88 SCRA 513;
Hernandez vs. Villanueva, 40 Phil. 775).
In the case at bar, while it is true that Atty. Arsenio Fer. Cabanting purchased
the lot after finality of judgment, there was still a pending certiorari
proceeding. A thing is said to be in litigation not only if there is some contest
or litigation over it in court, but also from the moment that it becomes subject
to the judicial action of the judge. (Gan Tingco vs. Pabinguit, 35 Phil. 81).
Logic indicates, in certiorari proceedings, that the appellate court may either
grant or dismiss the petition. Hence, it is not safe to conclude, for purposes
under Art. 1491 that the litigation has terminated when the judgment of the
trial court become final while a certiorari connected therewith is still in
progress. Thus, purchase of the property by Atty. Cabanting in this case
constitutes malpractice in violation of Art. 1491 and the Canons of
Professional Ethics. Clearly, this malpractice is a ground for suspension.
The sale in favor of Atty. Jovellanos does not constitute malpractice. There
was no attorney-client relationship between Serapia and Atty. Jovellanos,
considering that the latter did not take part as counsel in Civil Case No. V2170. The transaction is not covered by Art. 1491 nor by the Canons
adverted to.
II
It is asserted by Paulino that Atty. Antiniw asked for and received the sum of
P200.00 in consideration of his executing the document "Compraventa
Definitiva" which would show that Paulino bought the property. This charge,
Atty. Antiniw simply denied. It is settled jurisprudence that affirmative
testimony is given greater weight than negative testimony (Bayasen vs. CA,
L-25785, Feb. 26, 1981; Vda. de Ramos vs. CA, et al., L40804, Jan. 31,
1978). When an individual's integrity is challenged by evidence, it is not
enough that he deny the charges against him; he must meet the issue and
overcome the evidence for the relator and show proofs that he still maintains
the highest degree of morality and integrity which at all time is expected of
him. (De los Reyes vs. Aznar, Adm. Case No. 1334, Nov. 28, 1989).
Although Paulino was a common farmer who finished only Grade IV, his
testimony, even if not corroborated by another witness, deserves credence
and can be relied upon. His declaration dwelt on a subject which was so
delicate and confidential that it would be difficult to believe the he fabricated
his evidence.
A lawyer owes entire devotion to the interest of his client (Santos vs.
Dichoso, 84 SCRA 622), but not at the expense of truth. (Cosmos Foundry
Shopworkers Union vs. La Bu, 63 SCRA 313). The first duty of a lawyer is
not to his client but to the administration of justice. (Lubiano vs. Gordalla,
115 SCRA 459) To that end, his client's success is wholly subordinate. His
conduct ought to and must always be scrupulously observant of law and
ethics. While a lawyer must advocate his client's cause in utmost earnestness
and with the maximum skill he can marshal, he is not at liberty to resort to
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illegal means for his client's interest. It is the duty of an attorney to employ,
for the purpose of maintaining the causes confided to him, such means as are
consistent with truth and honor. (Pangan vs. Ramos, 93 SCRA 87).
The other charges of malpractice against Atty. Antiniw and Atty. Jovellanos
should be dismissed for lack of evidence.
The additional charge against Atty. Antiniw in Administrative Case No. 1391
is predicated on the information furnished by Lydia Bernal. It was not based
on the personal knowledge of Constancia L. Valencia: hence, hearsay. "Any
evidence, whether oral or documentary, is hearsay if its probative value is not
based on the personal knowledge of the witness but on the knowledge of
some other person not on the witness stand." (Regalado, Remedial Law
Compendium, 6th ed., vol. 2, 1989, p. 486). Being hearsay, the evidence
presented is inadmissible.
III
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He appeared in Civil Case No. V-2170 as an involuntary witness to attest to
the holding of the conference.
SO ORDERED.
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8. Republic of the Philippines
SUPREME COURT
Manila
fruits to be produced on the said parcel of land during the years period;
which shag commence to run as of SEPTEMBER 15,1968; up to JANUARY
1, 1976 (sic);
FIRST DIVISION
G.R. No. L-36902 January 30, 1982
LUIS PICHEL, petitioner,
vs.
PRUDENCIO ALONZO, respondent.
GUERRERO, J.:
This case originated in the lower Court as an action for the annulment of a
"Deed of Sale" dated August 14, 1968 and executed by Prudencio Alonzo, as
vendor, in favor of Luis Pichel, as vendee, involving property awarded to the
former by the Philippine Government under Republic Act No. 477. Pertinent
portions of the document sued upon read as follows:
That for the herein sale of the coconut fruits are for all the fruits on the
aforementioned parcel of land presently found therein as well as for future
That the delivery of the subject matter of the Deed of Sale shall be from time
to time and at the expense of the VENDEE who shall do the harvesting and
gathering of the fruits;
That the Vendor's right, title, interest and participation herein conveyed is of
his own exclusive and absolute property, free from any liens and
encumbrances and he warrants to the Vendee good title thereto and to defend
the same against any and all claims of all persons whomsoever. 1
After the pre-trial conference, the Court a quo issued an Order dated
November 9, 1972 which in part read thus:
On August 14, 1968, plaintiff and his wife sold to defendant an the fruits of
the coconut trees which may be harvested in the land in question for the
period, September 15, 1968 to January 1, 1976, in consideration of
P4,200.00. Even as of the date of sale, however, the land was still under lease
to one, Ramon Sua, and it was the agreement that part of the consideration of
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the sale, in the sum of P3,650.00, was to be paid by defendant directly to
Ramon Sua so as to release the land from the clutches of the latter. Pending
said payment plaintiff refused to snow the defendant to make any harvest.
In July 1972, defendant for the first time since the execution of the deed of
sale in his favor, caused the harvest of the fruit of the coconut trees in the
land.
xxx
xxx
xxx
Considering the foregoing, two issues appear posed by the complaint and the
answer which must needs be tested in the crucible of a trial on the merits, and
they are:
First. Whether or nor defendant actually paid to plaintiff the full sum of
P4,200.00 upon execution of the deed of sale.
all legal intents and purposes, a contract of lease of the land itself. According
to the Court:
... the sale aforestated has given defendant complete control and enjoyment
of the improvements of the land. That the contract is consensual; that its
purpose is to allow the enjoyment or use of a thing; that it is onerous because
rent or price certain is stipulated; and that the enjoyment or use of the thing
certain is stipulated to be for a certain and definite period of time, are
characteristics which admit of no other conclusion. ... The provisions of the
contract itself and its characteristics govern its nature. 4
Anent the first issue, counsel for plaintiff Alonzo subsequently 'stipulated
and agreed that his client ... admits fun payment thereof by defendant. 3 The
remaining issue being one of law, the Court below considered the case
submitted for summary judgment on the basis of the pleadings of the parties,
and the admission of facts and documentary evidence presented at the pretrial conference.
Any occupant or applicant of lands under this Act who transfers whatever
rights he has acquired on said lands and/or on the improvements thereon
before the date of the award or signature of the contract of sale, shall not be
entitled to apply for another piece of agricultural land or urban, homesite or
residential lot, as the case may be, from the National Abaca and Other Fibers
Corporation; and such transfer shall be considered null and void. 5
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WHEREFORE, it is the judgment of this Court that the deed of sale, Exhibit
'A', should be, as it is, hereby declared nun and void; that plaintiff be, as he
is, ordered to pay back to defendant the consideration of the sale in the sum
of P4,200.00 the same to bear legal interest from the date of the filing of the
complaint until paid; that defendant shall pay to the plaintiff the sum of
P500.00 as attorney's fees.
This brings Us to the issues raised by the instant Petition. In his Brief,
petitioner contends that the lower Court erred:
1.
In resorting to construction and interpretation of the deed of sale in
question where the terms thereof are clear and unambiguous and leave no
doubt as to the intention of the parties;
Before going into the issues raised by the instant Petition, the matter of
whether, under the admitted facts of this case, the respondent had the right or
authority to execute the "Deed of Sale" in 1968, his award over Lot No. 21
having been cancelled previously by the Board of Liquidators on January 27,
1965, must be clarified. The case in point is Ras vs. Sua 7 wherein it was
categorically stated by this Court that a cancellation of an award granted
pursuant to the provisions of Republic Act No. 477 does not automatically
divest the awardee of his rights to the land. Such cancellation does not result
in the immediate reversion of the property subject of the award, to the State.
Speaking through Mr. Justice J.B.L. Reyes, this Court ruled that "until and
unless an appropriate proceeding for reversion is instituted by the State, and
its reacquisition of the ownership and possession of the land decreed by a
competent court, the grantee cannot be said to have been divested of
whatever right that he may have over the same property." 8
There is nothing in the record to show that at any time after the supposed
cancellation of herein respondent's award on January 27, 1965, reversion
proceedings against Lot No. 21 were instituted by the State. Instead, the
admitted fact is that the award was reinstated in 1972. Applying the doctrine
announced in the above-cited Ras case, therefore, herein respondent is not
deemed to have lost any of his rights as grantee of Lot No. 21 under Republic
Act No. 477 during the period material to the case at bar, i.e., from the
cancellation of the award in 1965 to its reinstatement in 1972. Within said
period, respondent could exercise all the rights pertaining to a grantee with
respect to Lot No. 21.
2.
In declaring granting without admitting that an interpretation is
necessary the deed of sale in question to be a contract of lease over the
land itself where the respondent himself waived and abandoned his claim that
said deed did not express the true agreement of the parties, and on the
contrary, respondent admitted at the pre-trial that his agreement with
petitioner was one of sale of the fruits of the coconut trees on the land;
3.
In deciding a question which was not in issue when it declared the
deed of sale in question to be a contract of lease over Lot 21;
4.
In declaring furthermore the deed of sale in question to be a contract
of lease over the land itself on the basis of facts which were not proved in
evidence;
5.
In not holding that the deed of sale, Exhibit "A" and "2", expresses a
valid contract of sale;
6.
In not deciding squarely and to the point the issue as to whether or
not the deed of sale in question is an encumbrance on the land and its
improvements prohibited by Section 8 of Republic Act 477; and
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7.
In awarding respondent attorney's fees even granting, without
admitting, that the deed of sale in question is violative of Section 8 of
Republic Act 477.
Art. 1458. By the contract of sale one of the contracting parties obligates
himself to transfer the ownership of and to deliver a determinate thing, and
the other to pay therefor a price certain in money or its equivalent.
The first five assigned errors are interrelated, hence, We shall consider them
together. To begin with, We agree with petitioner that construction or
interpretation of the document in question is not called for. A perusal of the
deed fails to disclose any ambiguity or obscurity in its provisions, nor is there
doubt as to the real intention of the contracting parties. The terms of the
agreement are clear and unequivocal, hence the literal and plain meaning
thereof should be observed. Such is the mandate of the Civil Code of the
Philippines which provides that:
Art. 1370. If the terms of a contract are clear and leave no doubt upon the
intention of the contracting parties, the literal meaning of its stipulation shall
control ... .
Pursuant to the afore-quoted legal provision, the first and fundamental duty
of the courts is the application of the contract according to its express terms,
interpretation being resorted to only when such literal application is
impossible. 9
Simply and directly stated, the "Deed of Sale dated August 14, 1968 is
precisely what it purports to be. It is a document evidencing the agreement of
herein parties for the sale of coconut fruits of Lot No. 21, and not for the
lease of the land itself as found by the lower Court. In clear and express
terms, the document defines the object of the contract thus: "the herein sale
of the coconut fruits are for an the fruits on the aforementioned parcel of land
during the years ...(from) SEPTEMBER 15, 1968; up to JANUARY 1,
1976." Moreover, as petitioner correctly asserts, the document in question
expresses a valid contract of sale. It has the essential elements of a contract
of sale as defined under Article 1485 of the New Civil Code which provides
thus:
The subject matter of the contract of sale in question are the fruits of the
coconut trees on the land during the years from September 15, 1968 up to
January 1, 1976, which subject matter is a determinate thing. Under Article
1461 of the New Civil Code, things having a potential existence may be the
object of the contract of sale. And in Sibal vs. Valdez, 50 Phil. 512, pending
crops which have potential existence may be the subject matter of the sale.
Here, the Supreme Court, citing Mechem on Sales and American cases said
which have potential existence may be the subject matter of sale. Here, the
Supreme Court, citing Mechem on Sales and American cases said:
Mr. Mechem says that a valid sale may be made of a thing, which though not
yet actually in existence, is reasonably certain to come into existence as the
natural increment or usual incident of something already in existence, and
then belonging to the vendor, and the title will vest in the buyer the moment
the thing comes into existence. (Emerson vs. European Railway Co., 67 Me.,
387; Cutting vs. Packers Exchange, 21 Am. St. Rep. 63) Things of this nature
are said to have a potential existence. A man may sell property of which he is
potentially and not actually possess. He may make a valid sale of the wine
that a vineyard is expected to produce; or the grain a field may grow in a
given time; or the milk a cow may yield during the coming year; or the wool
that shall thereafter grow upon sheep; or what may be taken at the next case
of a fisherman's net; or fruits to grow; or young animals not yet in existence;
or the goodwill of a trade and the like. The thing sold, however, must be
specific and Identified. They must be also owned at the time by the vendor.
(Hull vs. Hull 48 Conn. 250 (40 Am. Rep., 165) (pp. 522-523).
We do not agree with the trial court that the contract executed by and
between the parties is "actually a contract of lease of the land and the coconut
trees there." (CFI Decision, p. 62, Records). The Court's holding that the
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contract in question fits the definition of a lease of things wherein one of the
parties binds himself to give to another the enjoyment or use of a thing for a
price certain and for a period which may be definite or indefinite (Art. 1643,
Civil Code of the Philippines) is erroneous. The essential difference between
a contract of sale and a lease of things is that the delivery of the thing sold
transfers ownership, while in lease no such transfer of ownership results as
the rights of the lessee are limited to the use and enjoyment of the thing
leased.
In Rodriguez vs. Borromeo, 43 Phil. 479, 490, the Supreme Court held:
Since according to article 1543 of the same Code the contract of lease is
defined as the giving or the concession of the enjoyment or use of a thing for
a specified time and fixed price, and since such contract is a form of
enjoyment of the property, it is evident that it must be regarded as one of the
means of enjoyment referred to in said article 398, inasmuch as the terms
enjoyment, use, and benefit involve the same and analogous meaning relative
to the general utility of which a given thing is capable. (104 Jurisprudencia
Civil, 443)
In concluding that the possession and enjoyment of the coconut trees can
therefore be said to be the possession and enjoyment of the land itself
because the defendant-lessee in order to enjoy his right under the contract, he
actually takes possession of the land, at least during harvest time, gather all
of the fruits of the coconut trees in the land, and gain exclusive use thereof
without the interference or intervention of the plaintiff-lessor such that said
plaintiff-lessor is excluded in fact from the land during the period aforesaid,
the trial court erred. The contract was clearly a "sale of the coconut fruits."
The vendor sold, transferred and conveyed "by way of absolute sale, all the
coconut fruits of his land," thereby divesting himself of all ownership or
dominion over the fruits during the seven-year period. The possession and
enjoyment of the coconut trees cannot be said to be the possession and
enjoyment of the land itself because these rights are distinct and separate
from each other, the first pertaining to the accessory or improvements
(coconut trees) while the second, to the principal (the land). A transfer of the
accessory or improvement is not a transfer of the principal. It is the other way
around, the accessory follows the principal. Hence, the sale of the nuts
cannot be interpreted nor construed to be a lease of the trees, much less
extended further to include the lease of the land itself.
The real and pivotal issue of this case which is taken up in petitioner's sixth
assignment of error and as already stated above, refers to the validity of the
"Deed of Sale", as such contract of sale, vis-a-vis the provisions of Sec. 8,
R.A. No. 477. The lower Court did not rule on this question, having reached
the conclusion that the contract at bar was one of lease. It was from the
context of a lease contract that the Court below determined the applicability
of Sec. 8, R.A. No. 477, to the instant case.
Resolving now this principal issue, We find after a close and careful
examination of the terms of the first paragraph of Section 8 hereinabove
quoted, that the grantee of a parcel of land under R.A. No. 477 is not
prohibited from alienating or disposing of the natural and/or industrial fruits
of the land awarded to him. What the law expressly disallows is the
encumbrance or alienation of the land itself or any of the permanent
improvements thereon. Permanent improvements on a parcel of land are
things incorporated or attached to the property in a fixed manner, naturally or
artificially. They include whatever is built, planted or sown on the land
which is characterized by fixity, immutability or immovability. Houses,
buildings, machinery, animal houses, trees and plants would fall under the
category of permanent improvements, the alienation or encumbrance of
which is prohibited by R.A. No. 477. While coconut trees are permanent
improvements of a land, their nuts are natural or industrial fruits which are
meant to be gathered or severed from the trees, to be used, enjoyed, sold or
otherwise disposed of by the owner of the land. Herein respondents, as the
grantee of Lot No. 21 from the Government, had the right and prerogative to
sell the coconut fruits of the trees growing on the property.
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of living, but likewise to help provide for the annual payments to the
Government of the purchase price of the lots awarded to them. Section 8 was
included, as stated by the Court a quo, to protect the grantees from
themselves and the incursions of opportunists who prey on their misery and
poverty." It is there to insure that the grantees themselves benefit from their
respective lots, to the exclusion of other persons.
The purpose of the law is not violated when a grantee sells the produce or
fruits of his land. On the contrary, the aim of the law is thereby achieved, for
the grantee is encouraged and induced to be more industrious and productive,
thus making it possible for him and his family to be economically selfsufficient and to lead a respectable life. At the same time, the Government is
assured of payment on the annual installments on the land. We agree with
herein petitioner that it could not have been the intention of the legislature to
prohibit the grantee from selling the natural and industrial fruits of his land,
for otherwise, it would lead to an absurd situation wherein the grantee would
not be able to receive and enjoy the fruits of the property in the real and
complete sense.
the question of whether or not in accordance with Our ruling in this case,
respondent is entitled to an award of attorney's fees. The Civil Code provides
that:
(2) When the defendant's act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the
plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to
satisfy the plaintiff's plainly valid, just and demandable claim;
Respondent through counsel, in his Answer to the Petition contends that even
granting arguendo that he executed a deed of sale of the coconut fruits, he
has the "privilege to change his mind and claim it as (an) implied lease," and
he has the "legitimate right" to file an action for annulment "which no law
can stop." He claims it is his "sole construction of the meaning of the
transaction that should prevail and not petitioner. (sic). 10 Respondent's
counsel either misapplies the law or is trying too hard and going too far to
defend his client's hopeless cause. Suffice it to say that respondent-grantee,
after having received the consideration for the sale of his coconut fruits,
cannot be allowed to impugn the validity of the contracts he entered into, to
the prejudice of petitioner who contracted in good faith and for a
consideration.
The issue raised by the seventh assignment of error as to the propriety of the
award of attorney's fees made by the lower Court need not be passed upon,
such award having been apparently based on the erroneous finding and
conclusion that the contract at bar is one of lease. We shall limit Ourselves to
In all cases, the attorney's fees and expenses of litigation must be reasonable.
We find that none of the legal grounds enumerated above exists to justify or
warrant the grant of attorney's fees to herein respondent.
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IN VIEW OF THE FOREGOING, the judgment of the lower Court is hereby
set aside and another one is entered dismissing the Complaint. Without costs.
SO ORDERED.