“March 16, 1977

G.R. No. 80965. June 6, 1990.  “Mrs. Macaria Madrigal de Leon

*

SYLVIA LICHAUCO DE LEON, petitioner, vs. THE HON. COURT OF 12 Jacaranda, North Forbes Park
APPEALS, MACARIA DE LEON AND JOSE VICENTE DE LEON, Makati, Metro Manila
respondents. Dear Doña Macaria:
This letter represents a contractual undertaking among (A) the
Contracts; Statutory Construction; Ambiguous contract is construed against
the party who caused the ambiguity.—Besides, the Letter-Agreement shows on its
undersigned (B) your son, Mr. Jose Vicente de Leon, represented by you,
face that it was prepared by Sylvia, and in this regard, the ambiguity in a contract is and (C) yourself in your personal capacity.
to be taken contra proferentem, i.e., construed against the party who caused the You hereby bind yourself jointly and severally to answer for the
ambiguity and could have also avoided it by the exercise of a little more care. Thus, undertakings of Joe Vincent under this contract.
Article 1377 of the Civil Code provides: “The interpretation of obscure words or In consideration for a peaceful and amicable termination of relations
stipulations in a contract shall not favor the party who caused the obscurity”. between the undersigned and her lawfully wedded husband, Jose Vicente
de Leon, your son, the following are agreed upon:
Same; Same; Consent; Intimidation to vitiate consent, requisites.—In order
that intimidation may vitiate consent and render the contract invalid, the following
requisites must concur: (1) that the intimidation must be the determining cause of the Obligations of Jose Vicente de Leon and/or yourself in a joint and several
contract, or must have caused the consent to be given; (2) that the threatened act be capacity:
unjust or unlawful; (3) that the threat be real and serious, there being an evident
disproportion between the evil and the resistance which all men can offer, leading to
the choice of the contract as the lesser evil; and (4) that it produces a reasonable and 1. 1.To deliver with clear title free from all liens and
well-grounded fear from the fact that the person from whom it comes has the encumbrances and subject to no claims in any form
necessary means or ability to inflict the threatened injury. Applying the foregoing to whatsoever the following properties to Sylvia Lichauco-
the present case, the claim of Macaria that Sylvia threatened her to bring Jose Vicente de Leon hereinafter referred to as the wife:
to court for support, to scandalize their family by baseless suits and that Sylvia would
pardon Jose Vicente for possible crimes of adultery and/or concubinage subject to the
transfer of certain properties to her, is obviously not the intimidation referred to by 348
law. With respect to mistake as a vice of consent, neither is Macaria’s alleged mistake
in having signed the Letter-Agreement because of her belief that Sylvia will thereby 34 SUPREME COURT REPORTS
eliminate inheritance rights from her and Jose Vicente, the mistake referred to in 8 ANNOTATED
Article 1331 of the Civil Code, supra. It does not appear that the condition that Sylvia
“will eliminate her inheritance rights” principally moved Macaria to enter into the De Leon vs. Court of Appeals
contract. Rather, such condition was but an incident of the consideration thereof
which, as discussed earlier, is the termination of
_______________
1. A.Suite 11-C, Avalon Condominium, Ortigas Ave.,
corner Xavier St., Mandaluyong, Rizal, Philippines.
*
 FIRST DIVISION.
2. B.Apartment 702, Wack Wack Condominium,
346 Mandaluyong, Rizal, Philippines.
3. C.The rights to assignment of 2 Ayala lots in Alabang,
Rizal (Corner lots, 801 sq. meters each). (Fully paid).
3 SUPREME COURT REPORTS 4. D.2470 Wexford Ave., South San Francisco, California,
46 ANNOTATED U.S.A. (Lot 18 Block 22 Westborough Unit No. 2). (Fully
paid).
De Leon vs. Court of Appeals 5. E.1) The sum of One Hundred Thousand Pesos
marital relations. (P100,000)

Same; Same; Same; Pari delicto; Article 1414 of the New Civil Code,

exception to the pari delicto rule.—In the ultimate analysis, therefore, both parties 1. 2)$30,000
acted in violation of the laws. However, the pari delicto rule, expressed in the 2. 3)$5,000
maxims “Ex dolo malo non oritur actio” and “In pari delicto potior est conditio
defendentis,” which refuses remedy to either party to an illegal agreement and leaves
them where they are, does not apply in this case. Contrary to the ruling of the 1. 2.To give monthly support payable six (6) months in
respondent Court that “x x x. [C]onsequently, intervenor appellees’ obligation under advance every year to any designated assignee of the wife
the said agreement having been annulled, the contracting parties shall restore to each for the care and upbringing of Susana Lichauco de Leon
other that things which have been subject matter of the contract, their fruits and the which is hereby pegged at the exchange rate of 7.50 to the
price or its interest, except as provided by law (Art. 1398, Civil Code).” Article 1414 dollar subject to adjustments in the event of monetary
of the Civil Code, which is an exception to the pari delicto rule, is the proper law to exchange fluctuations. Subsequent increase on actual
be applied.
need upon negotiation.
2. 3.To respect the custody of said minor daughter as
PETITION for certiorari to review the decision of the Court of Appeals. pertaining exclusively to the wife except as herein
provided.
The facts are stated in the opinion of the Court.
     Angara, Abello, Concepcion, Regala & Cruz for petitioner. Obligations of the wife:
     De Jesus & Associates for Macaria de Leon.
     Quisumbing, Torres & Evangelista for Jose Vicente de Leon.
1. 1.To agree to a judicial separation of property in
MEDIALDEA, J.: accordance with Philippine law and in this connection to
do all that may be necessary to secure said separation of
property including her approval in writing of a joint
This is a petition for review on certiorari of the decision of the Court of petition or consent decree.
Appeals in CA-G.R. CV No. 06649 dated June 30, 1987 affirming the 2. 2.To amend her complaint in the United States before the
decision of the Regional Trial Court of Pasig in SP Proc. No. 8492 dated Federal Court of California, U.S.A. entitled “Sylvia
December 29, 1983; and its resolution dated November 24, 1987 denying Lichauco de Leon vs. Jose V. de Leon” in a manner
the motion for reconsideration. compatible with the objectives of this herein agreement. It
The antecedent facts are as follows: is the stated objective of this agreement that said divorce
On October 18, 1969, private respondent Jose Vicente De Leon and proceedings will continue.
petitioner Sylvia Lichauco De Leon were united in wedlock before the 3. 3.All the properties herein described for assignment to the
Municipal Mayor of Binangonan, Rizal. On August 28, 1971, a child wife must be assigned to Sylvia Lichauco de Leon upon
named Susana L. De Leon was born from this union. the decree of the Court of First Instance in the Joint
Sometime in October, 1972, a de facto separation between the Petition for Separation of Property; except for the
spouses occured due to irreconcilable marital differences, with Sylvia P100,000, $30,000 and $5,000 which will be paid
leaving the conjugal home. Sometime in March, 1973, immediately.
347
4. 4.This contract is intended to be applicable both in the
VOL. 186, JUNE 6, 1990 347 Republic of the Philippines and in the United States of
America. It is agreed that this will constitute an actionable
De Leon vs. Court of Appeals document in both jurisdictions and the parties herein
Sylvia went to the United States where she obtained American citizenship. waive their right to object to the use of this document in
On November 23, 1973, Sylvia filed with the Superior Court of the event a legal issue should arise relating to the validity
California, County of San Francisco, a petition for dissolution of marriage of this document. In the event of a dispute, this letter is
against Jose Vicente. In the said divorce proceedings, Sylvia also filed subject to interpretation under the laws of California,
claims for support and distribution of properties. It appears, however, that U.S.A.
since Jose Vicente was then a Philippine resident and did not have any
assets in the United States, Sylvia chose to hold in abeyance the divorce
349
proceedings, and in the meantime, concentrated her efforts to obtain some
sort of property settlements with Jose Vicente in the Philippines. VOL. 186, JUNE 6, 1990 349
Thus, on March 16, 1977, Sylvia succeeded in entering into a Letter-
Agreement with her mother-in-law, private respondent Macaria De Leon, De Leon vs. Court of Appeals
which We quote in full, as follows (pp. 40-42, Rollo):
 1. 5.To allow her daughter to spend two to three months agreement embodied in paragraph 5 of the petition, except insofar as the adjudication
each year with the father upon mutual convenience. to petitioner Sylvia L. De Leon of the properties belonging to and owned by
Intervenor Macaria De Leon is concerned.
“Henceforth, (a) each spouse shall own, dispose of, possess, administer and
Very truly yours, enjoy his or her separate estate, present and future without the consent of the other;
(Sgd.) Sylvia de Leon (b) all earnings from any profession, business or industry shall likewise belong to
t/ SYLVIA L. DE LEON each of them separately; (c) the minor child Susana De Leon shall stay with petitioner
Sylvia Lichauco De Leon for two to three months every year—the transportation both
ways of the child for the trip to the Philippines to be at the expense of the petitioner
CONFORME: Jose Vicente De Leon; and (d) petitioner Jose Vicente De Leon shall give petitioner
s/t/MACARIA M. DE LEON Sylvia Lichauco De Leon the sum of P4,500.00 as monthly support for the minor
with my marital consent: child Susana to commence from February 19, 1980.
s/t/JUAN L. DE LEON”
Sylvia appealed to the respondent Court of Appeals raising the following
On the same date, Macaria made cash payments to Sylvia in the amount of errors:
P100,000 and US $35,000.00 or P280,000.00, in compliance with her
obligations as stipulated in the aforestated Letter-Agreement.
On March 30, 1977, Sylvia and Jose Vicente filed before the then 1. 1)The trial court erred in finding that the cause or consideration
Court of First Instance of Rizal a joint petition for judicial approval of of the Letter-Agreement is the termination of marital
dissolution of their conjugal partnership, the main part of which reads as relations;
follows (pp. 37-38, Rollo): 2. 2)The trial court failed to appreciate testimonial and
“5. For the best interest of each of them and of their minor child, petitioners have documentary evidence proving that Macaria de Leon’s claims
agreed to dissolve their conjugal partnership and to partition the assets thereof, under of threat, intimidation and mistake are baseless; and
the following terms and conditions—this document, a pleading being intended by 3. 3)The trial court erred in finding that Sylvia Lichauco de Leon
them to embody and evidence their agreement:
committed breach of the Letter-Agreement; and further, failed
xxx
“(c) The following properties shall be adjudicated to petitioner Sylvia Lichauco to appreciate evidence proving Macaria de Leon’s mate
De Leon. These properties will be free of any and all liens and encumbrances, with
clear title and subject to no claims by third parties. Petitioner Jose Vicente De Leon 352
fully assumes all responsibility and liability in the event these properties shall not be
as described in the previous sentence: 35 SUPREME COURT REPORTS
Sedan (1972 model)
2 ANNOTATED
Suite 11-C, Avalon Condominium,
Ortigas Ave., corner Xavier St.,
De Leon vs. Court of Appeals
Mandaluyong, Rizal, Philippines rial breach thereof.
The respondent court affirmed the decision in toto. The motion for
Apt. 702, Wack-Wack Condominium, reconsideration was denied. Hence, the present petition.
Mandaluyong, Rizal, Philippines The only basis by which Sylvia may lay claim to the properties which
are the subject matter of the Letter-Agreement, is the Letter-Agreement
350 itself. The main issue, therefore, is whether or not the Letter-Agreement is
35 SUPREME COURT REPORTS valid.
The third paragraph of the Letter-Agreement, supra, reads:
0 ANNOTATED “In consideration for a peaceful and amicable termination of relations between the
undersigned and her lawfully wedded husband, Jose Vicente De Leon, your son, the
De Leon vs. Court of Appeals following are agreed upon:” (italics supplied)
The rights to assignment of 2 Ayala lots in Alabang Rizal (corner lots, 801 sq. meters
each) (Fully paid)
It is readily apparent that the use of the word “relations” is ambiguous,
perforce, it is subject to interpretation. There being a doubt as to the
2470 Wexford Ave., South San Francisco, California, U.S.A. (Lot 18, Block 22 meaning of this word taken by itself, a consideration of the general scope
Westborough Unit 2) (Fully paid) and purpose of the instrument in which it occurs (see Germann and Co. v.
Donaldson, Sim and Co., 1 Phil. 63) and Article 1374 of the Civil Code
The sum of One Hundred Thousand Pesos (100,000.00) which provides that the various stipulations of a contract shall be
interpreted together, attributing to the doubtful ones that sense which may
$30,000.00 at current exchange rate result from all of them taken jointly, is necessary.
$5,000.00 at current exchange rate” Sylvia insists that the consideration for her execution of the Letter-
Agreement was the termination of property relations with her husband.
After ex-parte hearings, the trial court issued an Order dated February 19, Indeed, Sylvia and Jose Vicente subsequently filed a joint petition for
1980 approving the petition, the dispositive portion of which reads (p. judicial approval of the dissolution of their conjugal partnership,
143, Rollo): sanctioned by Article 191 of the Civil Code. On the other hand, Macaria
“WHEREFORE, it is hereby declared that the conjugal partnership of the Spouses is and Jose Vicente assert that the consideration was the termination of
DISSOLVED henceforth, without prejudice to the terms of their agreement that each marital relationship.
spouse shall own, dispose of, possess, administer and enjoy his or her separate estate,
We sustain the observations and conclusion made by the trial court, to
without the consent of the other, and all earnings from any profession, business or
industries shall likewise belong to each spouse.” wit (pp. 44-46, Rollo):
“On page two of the letter agreement (Exhibit ‘E’), the parties contemplated not only
to agree to a judicial separation of property of the spouses but likewise to continue
On March 17, 1980, Sylvia moved for the execution of the above- with divorce proceedings (paragraphs 1 and 2, Obligations of the Wife, Exhibit ‘E-
mentioned order. However, Jose Vicente moved for a reconsideration of 1’). If taken with the apparently ambiguous provisions in Exhibit ‘E’ regarding
the order alleging that Sylvia made a verbal reformation of the petition as termination of ‘relations’, the parties clearly contemplated not only the termination
there was no such agreement for the payment of P4,500.00 monthly
support to commence from the alleged date of separation in April, 1973 353
and that there was no notice given to him that Sylvia would attempt verbal VOL. 186, JUNE 6, 1990 353
reformation of the agreement contained in the joint petition.
While the said motion for reconsideration was pending resolution, on De Leon vs. Court of Appeals
April 20, 1980, Macaria filed with the trial court a motion for leave to of property relationship but likewise of marital relationship in its entirety.
intervene alleging that she is the owner of the properties involved in the Furthermore, it would be safe to assume that the parties in Exhibit ‘E’ not having
case. The motion was granted. On October 29, 1980, Macaria, assisted by specified the particular relationship which they wanted to peacefully and amicably
her husband Juan De Leon, filed her complaint in intervention. She terminate had intended to terminate all kinds of relations, both marital and property.
While there could be inherent benefits to a termination of conjugal property
assailed the validity and legality of the Letter-Agreement which had for its relationship between the spouses, the court could not clearly perceive the underlying
purpose, according to her, the termination of marital relationship between benefit for the intervenor insofar as termination of property relationship between
Sylvia and Jose Vicente. However, before any hearing could be had, the petitioners is concerned, unless the underlying consideration for intervenor is the
judicial reorganization took place and the case was transferred to the termination of marital relationship by divorce proceedings between her son Jose
Regional Trial Court of Pasig. Vicente and his wife petitioner Sylvia. The last sentence of paragraph 2 under
351 “Obligations of the Wife” unequivocally states: “It is the stated objective of this
agreement that said divorce proceedings (in the United States) will continue.”There is
VOL. 186, JUNE 6, 1990 351 merit in concluding that the consideration by which Intervenor executed Exhibit ‘E’
to ‘E-2’ was to secure freedom for her son petitioner Jose Vicente De Leon,
De Leon vs. Court of Appeals especially if Exhibit ‘R’—Intervenor, which is (sic) agreement signed by petitioner
On December 29, 1983, the trial court rendered judgment, the dispositive Sylvia to consent to and pardon Jose Vicente De Leon for adultery and concubinage
portion of which reads (pp. 35-36, Rollo): (among others) would be considered. In the light, therefore, of the foregoing
“WHEREFORE, judgment is hereby rendered on the complaint in intervention in circumstances, this Court finds credible the testimony of intervenor as follows:
favor of the intervenor, declaring null and void the letter agreement dated March 16,
1977 (Exhibits ‘E’ to ‘E-2’), and ordering petitioner Sylvia Lichauco De Leon to
restore to intervenor the amount of P380,000.00 plus legal interest from date of “ Will you please go over the Exhibit ‘E’ to
complaint, and to pay intervenor the amount of P100,000.00 as and for attorney’s
fees, and to pay the costs of suit. Q ‘E-2’—intervenor consisting of three pages
“Judgment is likewise rendered affirming the order of the Court dated February
19, 1980 declaring the conjugal partnership of the spouses Jose Vicente De Leon and
and inform us whether or not this is the
Sylvia Lichauco De Leon DISSOLVED; and adjudicating to each of them his or her letter of March 16, 1977 which you just
share of the properties and assets of said conjugal partnership in accordance with the
 by reason of the Letter-Agreement nor ask for the fulfillment of what has
referred to? been promised her. On her part, Macaria raises the defenses of intimidation
“ Yes, this is the letter. and mistake which led her to execute the Letter-Agreement. In resolving
this issue, the trial court said (pp. 148-151, Rollo):
A “In her second cause of action, intervenor claims that her signing of Exhibits ‘E’ to
‘E-2’ was due to a fear of an unpeaceful and troublesome separation of her son with
“ Why did you affix your signature to this petitioner Sylvia Lichauco de Leon. In support of her claim, intervenor testified as
Q Exh. ‘E’—intervenor (sic)? follows:

“ Because at that time when I signed it I want

‘Q Will you please inform us how did Sylvia
A to buy peace for myself and for the whole
Lichauco disturb or threaten your son or
family.
yourself?
“ From whom did you want to buy peace
‘A Despite the fact that Sylvia Lichauco
Q and/or what kind of peace?
voluntarily left my son Joe Vincent and
“ I wanted to buy peace from Sylvia Lichauco
abandoned him, she unashamedly nagged
A whom I knew was kind of ‘matapang;’ so I
Joe and me to get money and when her
want peace for me and primarily for the
demands were not met she resorted to
peaceful and amicable termination of
threats like, she threatened to bring Joe to
maritalrelationship between my son, Joe
court for support. Sylvia threatened to
Vincent and Sylvia.” (Deposition dated
scandalize our family by these baseless
September 6, 1983—Macaria de Leon, p. 6-
suits; in fact she caused the service of
7)
“This Court, therefore, finds and holds that the cause or consideration for the summons to Joe when he went to the United
intervenor Macaria De Leon in having executed Exhibits ‘E’ to ‘E-2’ was the
termination of the marital relationship between her son Jose Vicente De Leon and States.’ (Intervenor’s deposition dated Sept.
Sylvia Lichauco de Leon. 6, 1983, p. 8).
“Article 1306 of the New Civil Code provides: 356

354 35 SUPREME COURT REPORTS

35 SUPREME COURT REPORTS 6 ANNOTATED
4 ANNOTATED De Leon vs. Court of Appeals
“On the other hand, petitioner Sylvia claims that it was intervenor and petitioner
De Leon vs. Court of Appeals Jose Vicente who initiated the move to convince her to agree to a dissolution of their
‘Art. 1306. The contracting parties may establish such stipulations, clauses, terms, and conditions as conjugal partnership due to the alleged extra-marital activities of petitioner Jose
they may deem convenient, provided they are not contrary to law, morals, good customs, public
order or public policy.’
Vicente de Leon. She testified as follows:
‘If the stipulation is contrary to law, morals or public policy, the contract is void and
inexistent from the beginning.
‘Q Now in her testimony, Macaria Madrigal de
“Art. 1409. The following contracts are inexistent and void from the beginning:
‘(1) Those whose cause, object or purpose is contrary to law, morals, good customs, public order or
Leon also said that you threatened her by
public policy;
xxx demanding money and nagged her until she
‘(7) Those expressly prohibited or declared void by law.
‘These contracts cannot be ratified. Neither can the right to set up the defense of illegality be agreed to the letter agreement of March
waived.’
1977, what can you say about that?
“But marriage is not a mere contract but a sacred social institution. Thus, Art. ‘A I think with all the people sitting around
52 of the Civil Code provides:
‘Art. 52. Marriage is not a mere contract but an inviolable social institution. Its nature, with Atty. Quisumbing, Atty. Chuidian, my
consequences and incidents are governed by law and not subject to stipulations . . .’
father-in-law, my sister-in-law and I, you
“From the foregoing provisions of the New Civil Code, this court is of the
considered opinion and so holds that intervenor’s undertaking under Exhibit ‘E’ know, it can be shown that this was a
premised on the termination of marital relationship is not only contrary to law but friendly amicable settlement that they were
contrary to Filipino morals and public policy. As such, any agreement or obligations
based on such unlawful consideration and which is contrary to public policy should much really interested in settling down as I
be deemed null and void.” (italics supplied)
was. I think there were certain reasons that
Additionally, Article 191 of the Civil Case contemplates properties they wanted to get done or planned, being at
belonging to the spouses and not those belonging to a third party, who, in
the case at bar, is Macaria. In the petition for the dissolution of the that time Jose was already remarried and
conjugal partnership, it was made to appear that the said properties are
had a child. That since she then found out
conjugal in nature. However, Macaria was able to prove that the
questioned properties are owned by her. Neither Sylvia nor Jose Vicente that since she was worried about what might
adduced any contrary evidence.
Granting, in gratia argumenti, that the consideration of the Letter- be, you know, involved in any future
Agreement was the termination of property relations, We agree with the matters. She just wanted to do what she
respondent court that (pp. 46-47, Rollo):
“x x x the agreement nevertheless is void because it contravenes the following could. She just want me out of the picture.
provisions of the Civil Code:
So in no way, it cannot be said that I nagged
355 and threatened her.’ (TSN dated December
VOL. 186, JUNE 6, 1990 355 8, 1983, p. 137-138)
“In resolving this issue, this Court leans heavily on Exhibit ‘R’—intervenor,
De Leon vs. Court of Appeals which was not controverted by petitioner Sylvia. A reading of Exhibit ‘R’ would
‘Art. 221. The following shall be void and of no effect:
‘(1) Any contract for personal separation between husband and wife;
show that petitioner Sylvia would consent to and pardon petitioner Jose Vicente, son
‘(2) Every extra-judicial agreement, during marriage, for the dissolution of the conjugal of intervenor, for possible crimes of adultery and/or concubinage, with a string
partnership of gains or of the absolute community of property between husband and wife;” attached; that is, the transfer of the properties subject herein to her. There appears
some truth to the apprehensions of intervenor for in petitioner Sylvia’s testimony she
confirms the worry of intervenor as follows:” . . . being at that time Jose (De Leon)
Besides, the Letter-Agreement shows on its face that it was prepared by
was already remarried and had a child. That since she (intervenor) found out that, she
Sylvia, and in this regard, the ambiguity in a contract is to be taken contra was worried about what might be, you know, involved in any future matters. She just
proferentem, i.e., construed against the party who caused the ambiguity want me out of the picture.” The aforesaid fear of intervenor was further corroborated
and could have also avoided it by the exercise of a little more care. Thus, by her witness Concepcion Tagudin who testified as follows:
Article 1377 of the Civil Code provides: “The interpretation of obscure
words of stipulations in a contract shall not favor the party who caused the
obscurity” (see Equitable Banking Corp. vs. IAC, G.R. No. 74451, May ‘Q Now, you mentioned that you were present
25, 1988, 161 SCRA 518). when Mrs. Macaria De Leon signed this
Sylvia alleges further that since the nullity of the Letter-Agreement
proceeds from the unlawful consideration solely of Macaria, applying Exhibit ‘E-2,’ will you inform us whether
the pari delicto rule, it is clear that she cannot recover what she has given there was anything unusual which you
 property, or upon the person or property of his spouse, descendants or ascendants, to
noticed when Mrs. Macaria M. De Leon give his consent.
“To determine the degree of the intimidation, the age, sex and condition of the
signed this Exhibit ‘E-2’? person shall be borne in mind.
‘A Mrs. Macaria M. De Leon was in a state of “A threat to enforce one’s claim through competent authority, if the claim is just
or legal, does not vitiate consent.”
tension and anger. She was so mad that she
In order that intimidation may vitiate consent and render the contract
remarked: ‘Puñetang Sylvia ito bakit ba
invalid, the following requisites must concur: (1) that the intimidation must
niya ako ginugulo. Ipakukulong daw be the determining cause of the contract, or must have caused the consent
357 to be given; (2) that the threatened act be unjust or unlawful; (3) that the
VOL. 186, JUNE 6, 1990 357 threat be real and serious, there being an evident disproportion between the
evil and the resistance which all men can offer, leading to the choice of the
De Leon vs. Court of Appeals contract as the lesser evil; and (4) that it produces a reasonable and well-
grounded fear from the fact that the person from whom it comes has the
  niya si Joe Vincent kung hindi ko necessary means or ability to inflict the threatened injury. Applying the
pipirmahan ito. Sana matapos na itong foregoing to the present case, the claim of Macaria that Sylvia threatened
her to bring Jose Vicente to court for support, to scandalize their family by
problemang ito pagkapirmang ito,’ sabi baseless suits and that Sylvia would pardon Jose Vicente for possible
crimes of adultery and/or concubinage subject to the transfer of certain
niya.’ (Deposition—Concepcion
properties to her, is obviously not the intimidation referred to by law. With
Tagudin, Oct. 21, 1983, pp.10-11) respect to mistake as a vice of consent, neither is Macaria’s alleged
“In her third cause of action, intervenor claims mistake or error in having signed mistake in having signed the Letter-Agreement because of her belief that
Exhibits ‘1’ to ‘E-2’ alleging in her testimony as follows: Sylvia
359

‘Q Before you were told such by your lawyers VOL. 186, JUNE 6, 1990 359
what if any were your basis to believe that De Leon vs. Court of Appeals
will thereby eliminate inheritance rights from her and Jose Vicente, the
Sylvia would no longer have inheritance mistake referred to in Article 1331 of the Civil Code, supra. It does not
rights from your son, Joe Vincent? appear that the condition that Sylvia “will eliminate her inheritance rights”
principally moved Macaria to enter into the contract. Rather, such
‘A Well, that was what Sylvia told me. That condition was but an incident of the consideration thereof which, as
she will eliminate any inheritance rights discussed earlier, is the termination of marital relations.
In the ultimate analysis, therefore, both parties acted in violation of
from me or my son Joe Vincent’s properties the laws. However, the pari delicto rule, expressed in the maxims “Ex dolo
if I sign the document amicably. x x x’ malo non oritur actio” and “In pari delicto potior est conditio defendentis,”
which refuses remedy to either party to an illegal agreement and leaves
(Intervenor’s deposition—Sept. 6, 1983, pp. them where they are, does not apply in this case. Contrary to the ruling of
the respondent Court that (pp. 47-48, Rollo):
9-10). “x x x. [C]onsequently, intervenor appellees’ obligation under the said agreement
“On the other hand, petitioner Sylvia claims that intervenor could not have been having been annulled, the contracting parties shall restore to each other that things
mistaken in her having signed the document as she was under advice of counsel which have been subject matter of the contract, their fruits and the price or its
during the time that Exhibits ‘E’ to ‘E-2’ was negotiated. To support such claims by interest, except as provided by law (Art. 1398, Civil Code).”
Sylvia Lichauco De Leon, the deposition testimony of Atty. Vicente Chuidian was
presented before this Court:
Article 1414 of the Civil Code, which is an exception to the pari
delicto rule, is the proper law to be applied. It provides:
‘Atty. Herbosa: Now you mentioned Atty. “When money is paid or property delivered for an illegal purpose, the contract may
be repudiated by one of the parties before the purpose has been accomplished, or
Norberto Quisum- before any damage has been caused to a third person. In such case, the courts may, if
the public interest will thus be subserved, allow the party repudiating the contract to
bing, would you be able to tell us in what recover the money or property.”
capacity he was
Since the Letter-Agreement was repudiated before the purpose has been
present in that negotiation? accomplished and to adhere to the pari delicto rule in this case is to put a
‘Atty. Chuidian: He was counsel for Doña premium to the circumvention of the laws, positive relief should be
granted to Macaria. Justice would be served by allowing her to be placed
Macaria and for Joe in the position in which she was before the transaction was entered into.
With the conclusions thus reached, We find it unnecessary to discuss
Vincent, the spouse of Sylvia.’ (Deposition of
the other issues raised.
V. Chuidian, ACCORDINGLY, the petition is hereby DENIED. The decision of
the respondent Court of Appeals dated June 30, 1987
December 16, 1983, p. 8) 360
“The New Civil Code provides:
‘Art. 1330. A contract where consent is given through mistake, violence, intimidation, undue 360 SUPREME COURT REPORTS
influence or fraud is void-able.’
‘Art. 1331. In order that mistake may invalidate consent, it should refer to the substance of ANNOTATED
the thing which is the object of the contract, or to those conditions which have principally moved
one or both parties to enter into a contract. x x x’ De Ocampo, Jr. vs. National Labor Relations
“The preponderance of evidence leans in favor of intervenor who even utilized Commission
the statement of the divorce lawyer of petitioner Sylvia (Mr. Penrod) in support of the and its resolution dated November 24, 1987 are AFFIRMED.
fact that intervenor was mistaken in having signed Exhibits ‘E’ to ‘E-2’ because SO ORDERED.
when she signed said Exhibits she believed that fact that petitioner Sylvia would
     Narvasa  (Chairman), Cruz and Gancayco, JJ., concur.
eliminate her inheritance rights and there is no showing that said intervenor was
properly advised by any American lawyer on the fact whether petitioner Sylvia, being      Griño-Aquino, J., On leave.
an American citizen, could rightfully do the same. Transcend-
Petition denied. Decision and resolution affirmed.
358

35 SUPREME COURT REPORTS

8 ANNOTATED
De Leon vs. Court of Appeals
ing, however, the issue of whether there was mistake of fact on the part of intervenor
or not, this Court could not see a valid cause or consideration in favor of intervenor
Macaria De Leon having signed Exhibits ‘E’ to ‘E-2.’ For even if petitioner Sylvia
had confirmed Mr. Penrod’s statement during the divorce proceedings in the United
States that she would undertake to eliminate her hereditary rights in the event of the
property settlement, under Philippine laws, such contract would likewise be voidable,
for under Art. 1347 of the New Civil Code ‘no contract may be entered into upon
future inheritance.’ ”

We do not subscribe to the aforestated view of the trial court. Article 1335
of the Civil Code provides:
“x x x.
“There is intimidation when one of the contracting parties is compelled by a
reasonable and well-grounded fear of an imminent and grave evil upon his person or