ABELLANA vs.

PONCE
FACTS: Felomina Abellana is the aunt of respondent Lucila
Ponce; on 15 July 1981, Felomina bought a parcel of
agricultural land which she intended to give to her niece,
Lucila. Because of this, the deed of sale showed that it was
Lucila who bought the land. However, Felomina remained in
possession and developed the same land and continued
paying real property taxes relative to it. Meanwhile the
relationship of the aunt and niece turned sour, as the latter
even threatened Felomina physically and has become
disrespectful. Because of this development, Felomina filed a
case for revocation of implied trust to recover the property
and its legal title over it. On August 28, 2000, the trial court
rendered a decision holding that an implied trust existed
between Felomina and Lucila, such that the latter is merely
holding the lot for the benefit of the former. It thus ordered
the conveyance of the subject lot in favor of Felomina. On
appeal, the Court reversed the lower courts decision and
said that Felomina wasnt able to prove an implied trust.
HELD: The Supreme Court ruled that it was Felomina and not
Lucila who truly owned the parcel of land. The lone testimony
of Felomina is sufficient to prove her claim if it is credible.
The presentation of the brother of the seller who witnessed
Felomina as the real buyer and paid the purchase price,
debunks the claim of Lucila. In the instant case, a donation of
an immovable was effected NOT on a public instrument as
required by law. Because it was only an oral donation, it is
thus void. Unlike ordinary contracts (which are perfected by
the concurrence of the requisites of consent, object and
cause pursuant to Article 1318 of the Civil Code), solemn
contracts like donations are perfected only upon compliance
with the legal formalities under Articles 748 and 749.
Otherwise stated, absent the solemnity requirements for
validity, the mere intention of the parties does not give rise
to a contract. Hence, Felomina can still recover title from
Lucila. Dispensation of such solemnities would give rise to
anomalous situations where the formalities of a donation and
a will in donations inter vivos, and donations mortis causa,
respectively, would be done away with when the transfer of
the property is made in favor of a child or one to whom the

donor stands in loco parentis. Such a scenario is clearly

repugnant to the mandatory nature of the law on donation.

ABELLANA vs. PONCE

YNARES-SANTIAGO, J.:
This is a petition for review on certiorari assailing the June 16,
2003 decision[2] of the Court of Appeals in CA-G.R. CV No.
69213, which reversed and set aside the August 28, 2000
decision[3] of the Regional Trial Court of Butuan City, Branch
2, in Civil Case No. 4270.
The facts as testified to by petitioner Felomina Abellana are
as follows:
On July 15, 1981, Felomina, a spinster, pharmacist and aunt
of private respondent Lucila Ponce, purchased from the late
Estela Caldoza-Pacres a 44,297[4] square meter agricultural
lot[5] with the intention of giving said lot to her niece, Lucila.
Thus, in the deed of sale,[6] the latter was designated as the
buyer of Lot 3, Pcs-10-000198, covered by Original Certificate
of Title No. P-27, Homestead Patent No. V-1551 and located
at Los Angeles, Butuan City.[7] The total consideration of the
sale was P16,500.00, but only P4,500.00 was stated in the
deed upon the request of the seller.[8]
Subsequently, Felomina applied for the issuance of title in the
name of her niece. On April 28, 1992, Transfer Certificate of
Title (TCT) No. 2874[9] over the subject lot was issued in the
name of Lucila.[10] Said title, however, remained in the
possession of Felomina who developed the lot through
Juanario Torreon[11] and paid real property taxes thereon.
[12]
The relationship between Felomina and respondent spouses
Romeo and Lucila Ponce, however, turned sour. The latter
allegedly became disrespectful and ungrateful to the point of
hurling her insults and even attempting to hurt her physically.
Hence, Felomina filed the instant case for revocation of
implied trust to recover legal title over the property.[13]
Private respondent spouses Lucila, also a pharmacist, and
Romeo, a marine engineer, on the other hand, claimed that
the purchase price of the lot was only P4,500.00 and that it

was them who paid the same. The payment and signing of
the deed of sale allegedly took place in the office of Atty.
Teodoro Emboy in the presence of the seller and her siblings
namely, Aquilino Caldoza and the late Lilia Caldoza.[14]
A year later, Juanario approached Lucila and volunteered to
till the lot, to which she agreed.[15] In 1987, the spouses
consented to Felominas proposal to develop and lease the
lot. They, however, shouldered the real property taxes on the
lot, which was paid through Felomina. In 1990, the spouses
demanded rental from Felomina but she refused to pay
because her agricultural endeavor was allegedly not
profitable.[16]
When Lucila learned that a certificate of title in her name had
already been issued, she confronted Felomina who claimed
that she already gave her the title. Thinking that she might
have misplaced the title, Lucila executed an affidavit of loss
which led to the issuance of another certificate of title in her
name.[17]
On August 28, 2000, the trial court rendered a decision
holding that an implied trust existed between Felomina and
Lucila, such that the latter is merely holding the lot for the
benefit of the former. It thus ordered the conveyance of the
subject lot in favor of Felomina. The dispositive portion
thereof, reads:
IN VIEW OF THE FOREGOING, judgment is hereby rendered
declaring, directing and ordering that:
a) An implied trust was created with plaintiff as trustor and
private defendant Lucila A. Ponce married to private
defendant Engr. Romeo D. Ponce as trustee pursuant to
Article 1448 of the New Civil Code;
b) The implied trust, having been created without the
consent of the trustee and without any condition, is revoked;
c) The private defendants, who are spouses, execute the
necessary deed of conveyance in favor of the plaintiff of the
land, covered by and embraced in TCT NO. T-2874, in

controversy and in the event private defendants refuse to

execute the deed of conveyance, the public defendant City
Register of Deeds of Butuan to cancel TCT No. T-2874 and
issue a new one in lieu thereof in the name of the plaintiff;
d) The private defendants spouses to pay jointly and
severally plaintiff the sum of PhP25,000.00 as attorneys fees
and PhP4,000.00 as expenses of litigation;
e) The dismissal of the counterclaim of private defendants
spouses[;] and
f) The private defendants to pay the costs.

lot? To resolve this issue, it is necessary to determine who

paid the purchase price of the lot.
After a thorough examination of the records and transcript of
stenographic notes, we find that it was Felomina and not
Lucila who truly purchased the questioned lot from Estela.
The positive and consistent testimony of Felomina alone, that
she was the real vendee of the lot, is credible to debunk the
contrary claim of respondent spouses. Indeed, the lone
testimony of a witness, if credible, is sufficient as in the
present case.[21] Moreover, Aquilino Caldoza, brother of the
vendor and one of the witnesses[22] to the deed of sale,
categorically declared that Felomina was the buyer and the
one who paid the purchase price to her sister, Estela.[23]

SO ORDERED.[18]
Private respondent spouses appealed to the Court of Appeals
which set aside the decision of the trial court ruling that
Felomina failed to prove the existence of an implied trust and
upheld respondent spouses ownership over the litigated lot.
The appellate court further held that even assuming that
Felomina paid the purchase price of the lot, the situation falls
within the exception stated in Article 1448 of the Civil Code
which raises a disputable presumption that the property was
purchased by Felomina as a gift to Lucila whom she
considered as her own daughter. The decretal portion
thereof, states
WHEREFORE, premises considered, the appealed decision of
the Regional Trial Court, Branch 2, Butuan City, in Civil Case
No. 4270, is hereby REVERSED AND SET ASIDE. A new one is
heretofore rendered dismissing the complaint below of
plaintiff-appellee, F[e]lomina Abellana.
SO ORDERED.[19]
Felomina filed a motion for reconsideration but the same was
denied.[20] Hence, the instant petition.
The issue before us is: Who, as between Felomina and
respondent spouses, is the lawful owner of the controverted

Then too, Juanario, who was allegedly hired by Lucila to

develop the lot, vehemently denied that he approached and
convinced Lucila to let him till the land. According to Juanario,
he had never spoken to Lucila about the lot and it was
Felomina who recruited him to be the caretaker of the
litigated property.[24]
The fact that it was Felomina who bought the lot was further
bolstered by her possession of the following documents from
the time of their issuance up to the present, to wit: (1) the
transfer certificate of title[25] and tax declaration in the
name of Lucila;[26] (2) the receipts of real property taxes in
the name of Felomina Abellana for the years 1982-1984,
1992-1994 and 1995;[27] and (3) the survey plan of the lot.
[28]
Having determined that it was Felomina who paid the
purchase price of the subject lot, the next question to resolve
is the nature of the transaction between her and Lucila.
It appears that Felomina, being of advanced age[29] with no
family of her own, used to purchase properties and
afterwards give them to her nieces. In fact, aside from the lot
she bought for Lucila (marked as Exhibit R-2), she also
purchased 2 lots, one from Aquilino Caldoza (marked as
Exhibit R-1) and the other from Domiciano Caldoza (marked

as Exhibit R-3), which she gave to Zaida Bascones (sister of

Lucila), thus:

name. It is clear therefore that Felomina donated the land to

Lucila. This is evident from her declarations, viz:

Q I am showing to you again Exhibit R, according to you[,]

you bought Exhibits R-1, R-2 and R-3, do you remember that?
A Yes sir.

Witness

xxxxxxxxx

A In 1981 there was a riceland offered so I told her that I will

buy that land and I will give to her later (sic), because since
1981 up to 1992 Mrs. Lucila Ponce has no job.

Q Aquilin[o] Caldoza conveyed this land in Exhibit R-1 to you?

A Yes, sir.

Q Where is the land located?

A In Los Angeles, Butuan City.

Q Is this now titled in your name?

A No. I was planning to give this land to my nieces. One of
which [was] already given to Mrs. [Lucila] Ponce.

Q Who was the owner of this land?

A The owner of that land is Mrs. Estela Caldoza-Pacr[e]s.
The husband is Pacr[e]s.

Q I am talking only about this lot in Exhibit R-1[.]

A Not in my name.

xxxxxxxxx

Q In whose name was this lot in Exhibit R-1 now?

A In the name of Zaida Bascones.
Q Who prepared the deed of sale?
A At the start it was in the name of Rudy [Torreon].[30]
Because Rudy [Torreon] knew that there is some trouble
already about that lot he made a deed of sale to the name of
Zaida Bascones, which I planned to give that land to her (sic).
Q As regards Exhibit R-1, you bought it actually?
A Yes, sir.
Q But the original deed of sale was in the name of Rudolfo
[Torreon]?
A Yes, sir.

Q What did you do with this land belonging to Mrs. EstelaCaldoza- Pacr[e]s?
A I paid the lot, then worked the lot, since at the start of my
buying the lot until now (sic).
Q You said that you told Lucila Ponce that you would give the
land to her later on, what did you do in connection with this
intention of yours to give the land to her?
A So I put the name of the title in her name in good faith
(sic).
Q You mean to tell the court that when you purchased this
land located at Los Angeles, Butuan City, the instrument of
sale or the deed of sale was in the name of Lucila Ponce?
A Yes, sir.[32]
xxxxxxxxx

Q And later on Rudolfo [Torreon] again transferred it to Zaida

Bascones?
A Yes, sir.[31]
Likewise, in the case of Lucila, though it was Felomina who
paid for the lot, she had Lucila designated in the deed as the
vendee thereof and had the title of the lot issued in Lucilas

Q Did you not ask your adviser Rudolfo [Torreon] whether it

was wise for you to place the property in the name of Lucila
Ponce when you are the one who is the owner?
A Because we have really the intention to give it to her.[33]

Generally, contracts are obligatory in whatever form they

may have been entered into, provided all the essential
requisites for their validity are present. When, however, the
law requires that a contract be in some form in order that it
may be valid, that requirement is absolute and indispensable.
Its non-observance renders the contract void and of no
effect.[34] Thus, under Article 749 of the Civil Code
Article 749. In order that the donation of an immovable
property may be valid, it must be made in a public
document, specifying therein the property donated and the
value of the charges which the donee must satisfy.
The acceptance may be made in the same deed of donation
or in a separate public document, but it shall not take effect
unless it is done during the lifetime of the donor.
If the acceptance is made in a separate instrument, the
donor shall be notified thereof in an authentic form, and this
step shall be noted in both instruments.
In the instant case, what transpired between Felomina and
Lucila was a donation of an immovable property which was
not embodied in a public instrument as required by the
foregoing article. Being an oral donation, the transaction was
void.[35] Moreover, even if Felomina enjoyed the fruits of the
land with the intention of giving effect to the donation after
her demise, the conveyance is still a void donation mortis
causa, for non-compliance with the formalities of a will.[36]
No valid title passed regardless of the intention of Felomina
to donate the property to Lucila, because the naked intent to
convey without the required solemnities does not suffice for
gratuitous alienations, even as between the parties inter se.
[37] At any rate, Felomina now seeks to recover title over the
property because of the alleged ingratitude of the
respondent spouses.
Unlike ordinary contracts (which are perfected by the
concurrence of the requisites of consent, object and cause
pursuant to Article 1318[38] of the Civil Code), solemn
contracts like donations are perfected only upon compliance
with the legal formalities under Articles 748[39] and 749.[40]
Otherwise stated, absent the solemnity requirements for

validity, the mere intention of the parties does not give rise
to a contract. The oral donation in the case at bar is therefore
legally inexistent and an action for the declaration of the
inexistence of a contract does not prescribe.[41] Hence,
Felomina can still recover title from Lucila.
Article 1448[42] of the Civil Code on implied trust finds no
application in the instant case. The concept of implied trusts
is that from the facts and circumstances of a given case, the
existence of a trust relationship is inferred in order to effect
the presumed intention of the parties.[43] Thus, one of the
recognized exceptions to the establishment of an implied
trust is where a contrary intention is proved, [44] as in the
present case. From the testimony of Felomina herself, she
wanted to give the lot to Lucila as a gift. To her mind, the
execution of a deed with Lucila as the buyer and the
subsequent issuance of title in the latters name were the acts
that would effectuate her generosity. In so carrying out what
she conceived, Felomina evidently displayed her unequivocal
intention to transfer ownership of the lot to Lucila and not
merely to constitute her as a trustee thereof. It was only
when their relationship soured that she sought to revoke the
donation on the theory of implied trust, though as previously
discussed, there is nothing to revoke because the donation
was never perfected.
In declaring Lucila as the owner of the disputed lot, the Court
of Appeals applied, among others, the second sentence of
Article 1448 which states
x x x However, if the person to whom the title is conveyed is
a child, legitimate or illegitimate, of the one paying the price
of the sale, no trust is implied by law, it being disputably
presumed that there is a gift in favor of the child.
Said presumption also arises where the property is given to a
person to whom the person paying the price stands in loco
parentis or as a substitute parent.[45]
The abovecited provision, however, is also not applicable
here because, first, it was not established that Felomina
stood as a substitute parent of Lucila; and second, even

assuming that she did, the donation is still void because the
transfer and acceptance was not embodied in a public
instrument. We note that said provision merely raised a
presumption that the conveyance was a gift but nothing
therein exempts the parties from complying with the
formalities of a donation. Dispensation of such solemnities
would give rise to anomalous situations where the formalities
of a donation and a will in donations inter vivos, and
donations mortis causa, respectively, would be done away
with when the transfer of the property is made in favor of a
child or one to whom the donor stands in loco parentis. Such
a scenario is clearly repugnant to the mandatory nature of
the law on donation.
While Felomina sought to recover the litigated lot on the
ground of implied trust and not on the invalidity of donation,
the Court is clothed with ample authority to address the
latter issue in order to arrive at a just decision that
completely disposes of the controversy.[46] Since rules of
procedure are mere tools designed to facilitate the
attainment of justice, they must be applied in a way that
equitably and completely resolve the rights and obligations
of the parties.[47]
As to the trial courts award of attorneys fees and litigation
expenses, the same should be deleted for lack of basis. Aside
from the allegations in the complaint, no evidence was
presented in support of said claims. The trial court made
these awards in the dispositive portion of its decision without
stating any justification therefor in the ratio decidendi. Their
deletion is therefore proper.[48]
Finally, in deciding in favor of Felomina, the trial court
ordered respondent spouses to execute a deed of sale over
the subject lot in favor of Felomina in order to effect the
transfer of title to the latter. The proper remedy, however, is
provided under Section 10 (a), Rule 39 of the Revised Rules
of Civil Procedure which provides that x x x [i]f real or
personal property is situated within the Philippines, the court
in lieu of directing a conveyance thereof may by an order
divest the title of any party and vest it in others, which shall

have the force and effect of a conveyance executed in due

form of law.
WHEREFORE, in view of all the foregoing, the petition is
GRANTED and the June 16, 2003 decision of the Court of
Appeals in CA-G.R. CV No. 69213 is REVERSED and SET
ASIDE. The August 28, 2000 decision of the Regional Trial
Court of Butuan City, Branch 2, in Civil Case No. 4270, is
REINSTATED with the following MODIFICATIONS:
(1) Declaring petitioner Felomina Abellana as the absolute
owner of Lot 3, Pcs-10-000198;
(2) Ordering the Register of Deeds of Butuan City to cancel
TCT No. T-2874 in the name of respondent Lucila Ponce and
to issue a new one in the name of petitioner Felomina
Abellana; and
(3) Deleting the awards of attorneys fees and litigation
expenses for lack of basis.
No pronouncement as to costs.
SO ORDERED.

TITO R. LAGAZO, petitioner, vs. COURT OF APPEALS

and ALFREDO CABANLIT, respondents.

2.
Ordering the defendant to pay plaintiff the sum of Five
Thousand (P5,000.00) Pesos, as and for attorney's fees; and

PANGANIBAN, J.:

3.

Where the acceptance of a donation was made in a separate

instrument but not formally communicated to the donor, may
the donation be nonetheless considered complete, valid and
subsisting? Where, the deed of donation did not expressly
impose any burden the expressed consideration being
purely one of liberality and generosity a separate but the
recipient actually paid charges imposed on the property like
land taxes and installment arrearages, may the donation be
deemed onerous and thus governed by the law on ordinary
contracts?

The defendant's counterclaims are hereby dismissed.

The Case
The Court answers these questions in the negative as it
resolves this petition for review under Rule 45 of the Rules of
Court seeking to set aside the Decision1 of the Court of
Appeals2 in CA-GR CV No. 38050 promulgated on November
29, 1993. The assailed Decision reversed the Regional Trial
Court, Branch 30, Manila, in Civil Case No. 87-39133 which
had disposed3 of the controversy in favor of herein petitioner
in the following manner:4
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against the defendant as follows:
1.
Ordering the defendant, or any person claiming rights
under him, to surrender to plaintiff possession of the
premises known as Lot 8w, Block 6, Psd-135534 of the
Monserrat Estate, and the improvement standing thereon,
located at 3320 2nd St., V. Mapa, Old Sta. Mesa, Manila;

Costs against the defendant.

The Facts
Although the legal conclusions and dispositions of the trial
and the appellate courts are conflicting, the factual
antecedents of the case are not substantially disputed.5 We
reproduce their narration from the assailed Decision:
Civil Case No. 83-39133 involves an action filed by plaintiffappellee [herein petitioner] on January 22, 1987 seeking to
recover from defendant-appellant [a] parcel of land which the
former claims to have acquired from his grandmother by
donation. Defendant-appellant [herein private respondent],
on the other hand, put up the defense that when the alleged
donation was executed, he had already acquired the property
by a Deed of Assignment from a transferee of plaintiffappellee's grandmother.
The evidence for plaintiff-appellee [herein petitioner] is
summarized as follows:
Catalina Jacob Vda. de Reyes, a widow and grandmother of
plaintiff-appellee, was awarded in July 1975 a 60.10-square
meter lot which is a portion of the Monserrat Estate, more
particularly described as Lot 8W, Block 6 of Psd-135834,
located at 3320 2nd St., V. Mapa, Old Sta. Mesa, Manila. The
Monserrat Estate is a public land owned by the City of Manila
and distributed for sale to bona fide tenants under its landfor-the-landless program. Catalina Jacob constructed a house
on the lot.

On October 3, 1977, or shortly before she left for Canada

where she is now a permanent resident, Catalina Jacob
executed a special power of attorney (Exh. "A") in favor of
her son-in-law Eduardo B. Espaol authorizing him to execute
all documents necessary for the final adjudication of her
claim as awardee of the lot.
Due to the failure of Eduardo B. Espaol to accomplish the
purpose of the power of attorney granted to him, Catalina
Jacob revoked said authority in an instrument executed in
Canada on April 16, 1984 (Exh. "D"). Simultaneous with the
revocation, Catalina Jacob executed another power of
attorney of the same tenor in favor plaintiff-appellee.
On January 30, 1985, Catalina Jacob executed in Canada a
Deed of Donation over a Lot 8W in favor of plaintiff-appellee
(Exh. "E"). Following the donation, plaintiff-appellee checked
with the Register of Deeds and found out that the property
was in the delinquent list, so that he paid the installments in
arrears and the remaining balance on the lot (Exhs. "F", "F-1"
and "F-2") and declared the said property in the name of
Catalina Jacob (Exhs. "G", "G-1", "G-2" and "G-3").
On January 29, 1986, plaintiff-appellee sent a demand letter
to defendant-appellant asking him to vacate the premises
(Exh. "H"). A similar letter was sent by plaintiff-appellee's
counsel to defendant on September 11, 1986 (Exh. "I").
However, defendant-appellant refused to vacate the
premises claiming ownership thereof. Hence, plaintiffappellee instituted the complaint for recovery of possession
and damages against defendant-appellant.
Opposing plaintiff-appellee's version, defendant-appellant
claimed that the house and lot in controversy were his by
virtue of the following documents:

1.
Deed of Absolute Sale executed by Catalina Jacob
dated October 7, 1977 in favor of Eduardo B. Espaol
covering the residential house located at the premises (Exh.
"4").
2.
Deed of Assignment over Lot 8W executed by Catalina
Jacob in favor of Eduardo Espaol dated September 30, 1980
(Exh. "5"); and
3.
Deed of Assignment executed by Eduardo B. Espaol
over Lot 8W and a residential house thereon in favor of
defendant-appellant dated October 2, 1982 (Exh. "6").
After trial, the lower court decided in favor of plaintiffappellee and against defendant-appellant, rationalizing that
the version of the former is more credible than that of the
latter. According to the lower court:
From the oral and documentary evidence adduced by the
parties[,] it appears that the plaintiff- has a better right over
the property, subject matter of the case. The version of the
plaintiff is more credible than that of the defendant. The
theory of the plaintiff is that the house and lot belong to him
by virtue of the Deed of Donation in his favor executed by his
grandmother Mrs. Jacob Vda. de Reyes, the real awardee of
the lot in question. The defendant's theory is that he is the
owner thereof because he bought the house and lot from
Eduardo Espaol, after the latter had shown and given to him
Exhibits 1, 4 and 5. He admitted that he signed the Deed of
Assignment in favor of Eduardo Espaol on September 30,
1980, but did not see awardee Catalina Jacob Vda. de Reyes
signed [sic] it. In fact, the acknowledgement in Exhibit "5"
shows that the assignor/awardee did not appear before the
notary public. It may be noted that on said date, the original
awardee of the lot was no longer in the Philippines, as both

parties admitted that she had not come back to the

Philippines since 1977. (Exhs. K, K-1). Defendant, claiming to
be the owner of the lot, unbelievably did not take any action
to have the said house and lot be registered or had them
declared in his own name. Even his Exhibit 7 was not mailed
or served to the addressee. Such attitude and laxity is very
unnatural for a buyer/owner of a property, in stark contrast of
[sic] the interest shown by the plaintiff who saw to it that the
lot was removed from the delinquent list for non-payment of
installments and taxes due thereto [sic].6
Ruling of the Appellate Court
In reversing the trial court's decision,7 Respondent Court of
Appeals anchored its ruling upon the absence of any showing
that petitioner accepted his grandmother's donation of the
subject land. Citing jurisprudence that the donee's failure to
accept a donation whether in the same deed of donation or in
a separate instrument renders the donation null and void,
Respondent Court denied petitioner's claim of ownership over
the disputed land. The appellate court also struck down
petitioner's contention that the formalities for a donation of
real property should not apply to his case since it was an
onerous one he paid for the amortizations due on the land
before and after the execution of the deed of donation
reasoning that the deed showed no burden, charge or
condition imposed upon the donee; thus, the payments made
by petitioner were his voluntary acts.
Dissatisfied with the foregoing ruling, petitioner now seeks a
favorable disposition from this Court.8
Issues
Petitioner anchors his petition on the following grounds:9

[I.]
In reversing the decision of the trial court, the Court of
Appeals decided a question of substance in a way not in
accord with the law and applicable decisions of this
Honorable Court.
[II.]
Even granting the correctness of the decision of the
Court of Appeals, certain fact and circumstances transpired
in the meantime which would render said decision manifestly
unjust, unfair and inequitable to petitioner.
We believe that the resolution of this case hinges on the
issue of whether the donation was simple or onerous.
The Court's Ruling
The petition lacks merit.
Main Issue:
Simple or Onerous Donation?
At the outset, let us differentiate between a simple donation
and an onerous one. A simple or pure donation is one whose
cause is pure liberality (no strings attached), while an
onerous donation is one which is subject to burdens, charges
or future services equal to or more in value than the thing
donated. 10 Under Article 733 of the Civil Code, donations
with an onerous cause shall be governed by the rules on
contracts; hence, the formalities required for a valid simple
donation are not applicable.
Petitioner contends that the burdens, charges or conditions
imposed upon a donation need not be stated on the deed of
donation itself. Thus, although the deed did not categorically
impose any charge, burden or condition to be satisfied by
him, the donation was onerous since he in fact and in reality
paid for the installments in arrears and for the remaining

balance of the lot in question. Being an onerous donation, his

acceptance thereof may be express or implied, as provided
under Art. 1320 of the Civil Code, and need not comply with
the formalities required by Art. 749 of the same code. His
payment of the arrearages and balance and his assertion of
his right of possession against private respondent clearly
indicate his acceptance of the donation.
We rule that the donation was simple, not onerous. Even
conceding that petitioner's full payment of the purchase price
of the lot might have been a burden to him, such payment
was not however imposed by the donor as a condition for the
donation. Rather, the deed explicitly stated:

q
After you have received this [sic] documents, the . . .
revocation of power of attorney and the Special Power of
Attorney in your favor, what did you do?
WITNESS:
a
I went here in City Hall and verif[ied] the status of the
award of my grandmother.
q
When you say the award, are you referring to the
award in particular [of the] lot in favor of your grandmother?
a

Yes, Sir.

That for and in consideration of the love and affection which

the DONEE inspires in the DONOR, and as an act of liberality
and generosity and considering further that the DONEE is a
grandson of the DONOR, the DONOR hereby voluntarily and
freely gives, transfer[s] and conveys, by way of donation
unto said DONEE, his heirs, executors, administrators and
assigns, all the right, title and interest which the said DONOR
has in the above described real property, together with all
the buildings and improvements found therein, free from all
lines [sic] and encumbrances and charges whatsoever; 11
[emphasis supplied]

What was the result of your verification?

It is clear that the donor did not have any intention to burden
or charge petitioner as the donee. The words in the deed are
in fact typical of a pure donation. We agree with Respondent
Court that the payments made by petitioner were merely his
voluntary acts. This much can be gathered from his
testimony in court, in which he never even claimed that a
burden or charge had been imposed by his grandmother.

ATTY. FORONDA:

ATTY FORONDA:

a
According to the person in the office, the papers of my
grandmother is [sic] includ[ed] in the dilinquent [sic] list.
q
What did you do then when you found out that the lot
was includ[ed] in the dilinquent [sic] list?
a
I talked to the person in charged [sic] in the office and
I asked him what to do so that the lot should not [be]
included in the dilinquent [sic] list.

q
And what was the anwer [sic] given to you to the
inquiry which you made?
WITNESS:
a
According to the person in the office, that I would pay
the at least [sic] one half of the installment in order to take
[out] the document [from] the delinquent list.

And [were] you able to pay?

I was able to pay, sir.

q
What were you able to pay, one half of the balance or
the entire amounts [sic]?
a
First, I paid the [sic] one half of the balance since the
time the lot was awarded to us.
q
What about the remaining balance, were you able to
pay it?
a

I was able to pay that, sir.

q
So, as of now, the amount in the City of Manila of the
lot has already been duly paid, is it not?
a

Yes, sir. 12

The payments even seem to have been made pursuant to

the power of attorney 13 executed by Catalina Reyes in favor
of petitioner, her grandson, authorizing him to execute acts
necessary for the fulfillment of her obligations. Nothing in the
records shows that such acts were meant to be a burden in
the donation.
As a pure or simple donation, the following provisions of the
Civil Code are applicable:
Art. 734.
The donation is perfected from the moment the
donor knows of the acceptance by the donee.
Art. 746.
Acceptance must be made during the lifetime of
the donor and the donee.

Art. 749.
In order that the donation of an immovable may
be valid, it must be made in a public instrument, specifying
therein the property donated and the value of the charges
which the donee must satisfy.
The acceptance may be made in the same deed of donation
and in a separate public document, but it shall not take effect
unless it is done during the lifetime of the donor.
If the acceptance is made in a separate instrument, the
donor shall be notified thereof in authentic form, and this
step shall be noted in both instruments.
In the words of the esteemed Mr. Justice Jose C. Vitug, 14
"Like any other contract, an agreement of the parties is
essential. The donation, following the theory of cognition
(Article 1319, Civil Code), is perfected only upon the moment
the donor knows of the acceptance by the donee."
Furthermore, "[i]f the acceptance is made in a separate
instrument, the donor shall be notified thereof in an
authentic form, and this step shall be noted in both
instruments." 15
Acceptance of the donation by the donee is, therefore,
indispensable; its absence makes the donation null and void.
16 The perfection and the validity of a donation are well
explained by former Sen. Arturo M. Tolentino in this wise:
. . . Title to immovable property does not pass from the donor
to the donee by virtue of a deed of donation until and unless
it has been accepted in a public instrument and the donor
duly notified thereof. The acceptance may be made in the
very same instrument of donation. If the acceptance does not
appear in the same document, it must be made in another.
Solemn words are not necessary; it is sufficient if it shows the

intention to accept. But in this case it is necessary that

formal notice thereof be given to the donor, and the fact that
due notice has been given must be noted in both instruments
(that containing the offer to donate and that showing the
acceptance). Then and only then is the donation perfected. If
the instrument of donation has been recorded in the registry
of property, the instrument that shows the acceptance
should also be recorded. Where the deed of donation fails to
show the acceptance, or where the formal notice of the
acceptance, made in a separate instrument, is either not
given to the donor or else not noted in the deed of donation
and in the separate acceptance, the donation is null and
void. 17
Exhibit E (the deed of donation) does not show any indication
that petitioner-donee accepted the gift. During the trial, he
did not present any instrument evidencing such acceptance
despite the fact that private respondent already raised this
allegation in his supplemental pleading 18 to which petitioner
raised no objection. It was only after the Court of Appeals had
rendered its decision, when petitioner came before this
Court, that he submitted an affidavit 19 dated August 28,
1990, manifesting that he "wholeheartedly accepted" the lot
given to him by his grandmother, Catalina Reyes. This is too
late, because arguments, evidence, causes of action and
matters not raised in the trial court may no longer be raised
on appeal. 20
True, the acceptance of a donation may be made at any time
during the lifetime of the donor. And granting arguendo that
such acceptance may still be admitted in evidence on appeal,
there is still need for proof that a formal notice of such
acceptance was received by the donor and noted in both the
deed of donation and the separate instrument embodying
the acceptance. At the very least, this last legal requisite of
annotation in both instruments of donation and acceptance

was not fulfilled by petitioner. For this reason, the subject lot
cannot be adjudicated to him.
Secondary Issue:
Supervening Events
Petitioner also contends that certain supervening events
have transpired which render the assailed Decision
"manifestly unjust, unfair and inequitable" to him. The City of
Manila has granted his request for the transfer to his name of
the lot originally awarded in favor of Catalina Reyes. A deed
of sale 21 covering the subject lot has in fact been executed
between the City of Manila, as the vendor; and petitioner, as
the vendee. The corresponding certificate of title 22 has also
been issued in petitioner's name.
A close perusal of the city government's resolution 23
granting petitioner's request reveals that the request for and
the grant of the transfer of the award were premised on the
validity and perfection of the deed of donation executed by
the original awardee, petitioner's grandmother. This is the
same document upon which petitioner, as against private
respondent, asserts his right over the lot. But, as earlier
discussed and ruled, this document has no force and effect
and, therefore, passes no title, right or interest.
Furthermore, the same resolution states:
WHEREAS, in a report submitted by Ms. [Menchu C.] Bello [,
Special Investigator,] on February 7, 1990, it is stated
that . . . constructed on the lot is a make-shift structure used
for residential purposes by the proposed transferee Tito
Lagazo and his family; . . . and that constructed at Lot 8,
Block 6, former Monserrat Estate is a make-shift structure
used as a dwelling place by Lagazo and family because the
front portion of their house which was constructed on a road

lot was demolished, and the structure was extended

backward covering a portion of the old temporary road
lot. . . .
The above findings of the investigator are, however, directly
contradictory to the testimonies in court of petitioner himself
and of private respondent. Petitioner claimed the following:
that the house constructed on the subject lot was owned by
his grandmother Catalina Jacob; that before the latter left for
Canada in 1977, Eduardo Espaol had already been living in
the same house and continued to do so until 1982; and that
private respondent occupied the premises after Espaol left.
24 On the other hand, private respondent testified that he
bought the subject house and lot from Eduardo Espaol in
1982, after which he and his family occupied the same; but
sometime in 1985, they had to leave the place due to a roadwidening project which reduced the house to "about three
meters [in] length and one arm[']s width." 25
Between the testimonies under oath of the contending
parties and the report not subjected to cross-examination
which was prepared by the investigator who
recommended the approval of petitioner's request for
transfer, it is the former to which the Court is inclined to give
more credence. The investigator's report must have been
based on the misrepresentations of petitioner who arrogated
unto himself the prerogatives of both Espaol and private
respondent. Further, it is on record that petitioner had
required private respondent to vacate the subject premises
before he instituted this complaint. This shows he was not in
actual possession of the property, contrary to the report of
the investigator.
Cabanlit's Claim of Ownership

Petitioner also assails Respondent Court's conclusion that it is

unnecessary to pass upon private respondent's claim over
the property. Petitioner insists that the principal issue in the
case, as agreed upon by the parties during pretrial, is "who
between the parties is the owner of the house and lot in
question."
In disposing of the principal issue of the right of petitioner
over the subject property under the deed of donation, we
arrive at one definite conclusion: on the basis of the alleged
donation, petitioner cannot be considered the lawful owner of
the subject property. This does not necessarily mean,
however, that private respondent is automatically the rightful
owner.
In resolving private respondent's claim of ownership, the
examination of the genuineness of the documents (deeds of
assignment over the lot between Catalina Reyes and Eduardo
Espaol and between Espaol and private respondent) upon
which he asserts his right is necessary, especially in light of
petitioner's allegations of forgery. However, the respective
assignors in both documents are not parties to the instant
case. Not having been impleaded in the trial court, they had
no participation whatsoever in the proceedings at bar.
Elementary norms of fair play and due process bar us from
making any disposition which may affect their rights. Verily,
there can be no valid judgment for or against them. 26
Anyhow, since petitioner, who was the plaintiff below, failed
to prove with clear and convincing evidence his ownership
claim over the subject property, the parties thus resume their
status quo ante. The trial court should have dismissed his
complaint for his failure to prove a right superior to that of
private respondent, but without prejudice to any action that
Catalina Reyes or Eduardo Espaol or both may have against
said private respondent. Stating this point otherwise, we are

not ruling in this case on the rights and obligations between,

on the one hand, Catalina Reyes, her assigns and/or
representatives; and, on the other, Private Respondent
Cabanlit.
Not having proven any right to a valid, just and demandable
claim that compelled him to litigate or to incur expenses in
order to protect his interests by reason of an unjustified act
or omission of private respondent, petitioner cannot be
awarded attorney's fees. 27
WHEREFORE, the petition is hereby DENIED and the assailed
Decision is AFFIRMED.
SO ORDERED.

ARANGOTE vs. MAGLUNOB

CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari under
Rule 45 of the 1997 Revised Rules of Civil Procedure seeking
to reverse and set aside the Decision[1] dated 27 October
2006 and Resolution[2] dated 29 June 2007 of the Court of
Appeals in CA-G.R. SP No. 64970. In its assailed Decision, the
appellate court affirmed the Decision[3] dated 12 September
2000 of the Regional Trial Court (RTC), 6th Judicial Region,
Branch 1, Kalibo, Aklan, in Civil Case No. 5511, which
reversed the Decision[4] dated 6 April 1998 of the 7th
Municipal Circuit Trial Court (MCTC) of Ibajay-Nabas, Ibajay,
Aklan, in Civil Case No. 156; and declared[5] the herein
respondent-Spouses Martin and Lourdes Maglunob (Spouses
Maglunob) and respondent Romeo Salido (Romeo) as the
lawful owners and possessors of Lot 12897 with an area of
982 square meters, more or less, located in Maloco, Ibajay,
Aklan (subject property). In its assailed Resolution, the
appellate court denied herein petitioner Elvira T. Arangotes
Motion for Reconsideration.
Elvira T. Arangote, herein petitioner married to Ray Mars E.
Arangote, is the registered owner of the subject property, as
evidenced by Original Certificate of Title (OCT) No. CLOA1748.[6] Respondents Martin (Martin II) and Romeo are first
cousins and the grandnephews of Esperanza MaglunobDailisan (Esperanza), from whom petitioner acquired the
subject property.
The Petition stems from a Complaint[7] filed by petitioner
and her husband against the respondents for Quieting of
Title, Declaration of Ownership and Possession, Damages
with Preliminary Injunction, and Issuance of Temporary
Restraining Order before the MCTC, docketed as Civil Case
No. 156.
The Complaint alleged that Esperanza inherited the subject
property from her uncle Victorino Sorrosa by virtue of a
notarized Partition Agreement[8] dated 29 April 1985,
executed by the latters heirs. Thereafter, Esperanza declared

the subject property in her name for real property tax

purposes, as evidenced by Tax Declaration No. 16218 (1985).
[9]
The Complaint further stated that on 24 June 1985,
Esperanza executed a Last Will and Testament[10]
bequeathing the subject property to petitioner and her
husband, but it was never probated. On 9 June 1986,
Esperanza executed another document, an Affidavit,[11] in
which she renounced, relinquished, waived and quitclaimed
all her rights, share, interest and participation whatsoever in
the subject property in favor of petitioner and her husband.
On the basis thereof, Tax Declaration No. 16218 in the name
of Esperanza was cancelled and Tax Declaration No.
16666[12] (1987) was issued in the name of the petitioner
and her husband.
In 1989, petitioner and her husband constructed a house on
the subject property. On 26 March 1993, OCT No. CLOA-1748
was issued by the Secretary of the Department of Agrarian
Reform (DAR) in the name of petitioner, married to Ray Mars
E. Arangote. However, respondents, together with some hired
persons, entered the subject property on 3 June 1994 and
built a hollow block wall behind and in front of petitioners
house, which effectively blocked the entrance to its main
door.
As a consequence thereof, petitioner and her husband were
compelled to institute Civil Case No. 156.
In their Answer with Counterclaim in Civil Case No. 156,
respondents averred that they co-owned the subject property
with Esperanza. Esperanza and her siblings, Tomas and
Inocencia, inherited the subject property, in equal shares,
from their father Martin Maglunob (Martin I). When Tomas
and Inocencia passed away, their shares passed on by
inheritance to respondents Martin II and Romeo, respectively.
Hence, the subject property was co-owned by Esperanza,
respondent Martin II (together with his wife Lourdes), and
respondent Romeo, each holding a one-third pro-indiviso
share therein. Thus, Esperanza could not validly waive her

rights and interest over the entire subject property in favor of

the petitioner.
Respondents also asserted in their Counterclaim that
petitioner and her husband, by means of fraud, undue
influence and deceit were able to make Esperanza, who was
already old and illiterate, affix her thumbmark to the Affidavit
dated 9 June 1986, wherein she renounced all her rights and
interest over the subject property in favor of petitioner and
her husband. Respondents thus prayed that the OCT issued
in petitioners name be declared null and void insofar as their
two-thirds shares are concerned.
After trial, the MCTC rendered its Decision dated 6 April 1998
in Civil Case No. 156, declaring petitioner and her husband as
the true and lawful owners of the subject property. The
decretal portion of the MCTC Decision reads:
WHEREFORE, judgment is hereby rendered:
A. Declaring the [herein petitioner and her husband] the true,
lawful and exclusive owners and entitled to the possession of
the [subject property] described and referred to under
paragraph 2 of the [C]omplaint and covered by Tax
Declaration No. 16666 in the names of the [petitioner and
her husband];
B. Ordering the [herein respondents] and anyone hired by,
acting or working for them, to cease and desist from
asserting or claiming any right or interest in, or exercising
any act of ownership or possession over the [subject
property];
C. Ordering the [respondents] to pay the [petitioner and her
husband] the amount of P10,000.00 as attorneys fee. With
cost against the [respondents].[13]
The respondents appealed the aforesaid MCTC Decision to
the RTC. Their appeal was docketed as Civil Case No. 5511.

Respondents argued in their appeal that the MCTC erred in

not dismissing the Complaint filed by the petitioner and her
husband for failure to identify the subject property therein.
Respondents further faulted the MCTC for not declaring
Esperanzas Affidavit dated 9 June 1986 -- relinquishing all her
rights and interest over the subject property in favor of
petitioner and her husband -- as null and void insofar as
respondents two-thirds share in the subject property is
concerned.
On 12 September 2000, the RTC rendered its Decision
reversing the MCTC Decision dated 6 April 1998. The RTC
adjudged respondents, as well as the other heirs of Martin
Maglunob, as the lawful owners and possessors of the entire
subject property. The RTC decreed:
WHEREFORE, judgment is hereby rendered as follows:
1) The appealed [D]ecision is REVERSED;
2) [Herein respondents] and the other heirs of Martin
Maglunob are declared the lawful owners and possessors of
the whole [subject property] as described in Paragraph 2 of
the [C]omplaint, as against the [herein petitioner and her
husband].
3) [Petitioner and her husband] are ordered to immediately
turn over possession of the [subject property] to the
[respondents] and the other heirs of Martin Maglunob; and
4) [Petitioner and her husband] are ordered to pay
[respondents] attorneys fees of P5,000.00, other litigation
expenses of P5,000.00, moral damages of P10,000.00 and
exemplary damages of P5,000.00.[14]
Petitioner and her husband filed before the RTC, on 26
September
2000,
a
Motion
for
New
Trial
or
Reconsideration[15] on the ground of newly discovered
evidence consisting of a Deed of Acceptance[16] dated 23
September 2000, and notice[17] of the same, which were
both made by the petitioner, for herself and in behalf of her
husband,[18] during the lifetime of Esperanza. In the RTC

Order[19] dated 2 May 2001, however, the RTC denied the

aforesaid Motion for New Trial or Reconsideration.
The petitioner and her husband then filed a Petition for
Review, under Rule 42 of the 1997 Revised Rules of Civil
Procedure, before the Court of Appeals, where the Petition
was docketed as CA-G.R. SP No. 64970.
In their Petition before the appellate court, petitioner and her
husband raised the following errors committed by the RTC in
its 12 September 2000 Decision:
I.

It erred in reversing the

[D]ecision of the [MCTC];

II.
It erred in declaring the [herein
respondents] and the other heirs of Martin Maglunob as the
lawful owners and possessors of the whole [subject
property];
III.
It erred in declaring [OCT] No.
CLOA-1748 in the name of [herein petitioner] Elvie T.
Arangote as null and void;
IV.
It erred in denying [petitioner and
her husbands] [M]otion for [N]ew [T]rial or [R]econsideration
dated [26 September 2000; and
V.
It erred in not declaring the
[petitioner and her husband] as possessors in good faith.[20]
On 27 October 2006, the Court of Appeals rendered a
Decision denying the Petition for Review of petitioner and her
husband and affirming the RTC Decision dated 12 September
2000. Petitioner and her husbands subsequent Motion for
Reconsideration was similarly denied by the Court of Appeals
in its Resolution dated 29 June 2007.
Hence, petitioner[21] now comes before this Court raising in
her Petition the following issues:

I.
Whether the [RTC] acted with
grave abuse of discretion amounting to lack or excess of
jurisdiction when it declared the [petitioner and her husbands
title to the subject property] null and void;
II.
Whether the [RTC] acted with
grave abuse of discretion amounting to lack of jurisdiction
when it declared the Affidavit of Quitclaim null and void; and
III.
Whether the [RTC] and the
Honorable Court of Appeals acted with grave abuse of
discretion amounting to lack or excess of jurisdiction when it
rejected petitioners claim as possessors (sic) in good faith,
hence, entitled to the rights provided in [Article] 448 and
[Article] 546 of the Civil Code.[22]
Petitioner contends that the aforesaid OCT No. CLOA-1748
was issued in her name on 26 March 1993 and was
registered in the Registry of Deeds of Aklan on 20 April 1993.
From 20 April 1993 until the institution of Civil Case No. 156
on 10 June 1994 before the MCTC, more than one year had
already elapsed. Considering that a Torrens title can only be
attacked within one year after the date of the issuance of the
decree of registration on the ground of fraud and that such
attack must be through a direct proceeding, it was an error
on the part of the RTC and the Court of Appeals to declare
OCT No. CLOA-1748 null and void.
Petitioner additionally posits that both the RTC and the Court
of Appeals committed a mistake in declaring null and void
the Affidavit dated 9 June 1986 executed by Esperanza,
waiving all her rights and interest over the subject property
in favor of petitioner and her husband. Esperanzas Affidavit is
a valid and binding proof of the transfer of ownership of the
subject property in petitioners name, as it was also coupled
with actual delivery of possession of the subject property to
petitioner and her husband. The Affidavit is also proof of
good faith on the part of petitioner and her husband.
Finally, petitioner argues that, assuming for the sake of
argument, that Esperanzas Affidavit is null and void,

petitioner and her husband had no knowledge of any flaw in

Esperanzas title when the latter relinquished her rights to
and interest in the subject property in their favor. Hence,
petitioner and her husband can be considered as possessors
in good faith and entitled to the rights provided under
Articles 448 and 546 of the Civil Code.
This present Petition is devoid of merit.
It is a hornbook doctrine that the findings of fact of the trial
court are entitled to great weight on appeal and should not
be disturbed except for strong and valid reasons, because
the trial court is in a better position to examine the
demeanor of the witnesses while testifying. It is not a
function of this Court to analyze and weigh evidence by the
parties all over again. This Courts jurisdiction is, in principle,
limited to reviewing errors of law that might have been
committed by the Court of Appeals.[23] This rule, however, is
subject to several exceptions,[24] one of which is present in
this case, i.e., when the factual findings of the Court of
Appeals and the trial court are contradictory.
In this case, the findings of fact of the MCTC as regards the
origin of the subject property are in conflict with the findings
of fact of both the RTC and the Court of Appeals. Hence, this
Court will have to examine the records to determine first the
true origin of the subject property and to settle whether the
respondents have the right over the same for being co-heirs
and co-owners, together with their grand aunt, Esperanza,
before this Court can resolve the issues raised by the
petitioner in her Petition.
After a careful scrutiny of the records, this Court affirms the
findings of both the RTC and the Court of Appeals as regards
the origin of the subject property and the fact that
respondents, with their grand aunt Esperanza, were co-heirs
and co-owners of the subject property.
The records disclosed that the subject property was part of a
parcel of land[25] situated in Maloco, Ibajay, Aklan,
consisting of 7,176 square meters and commonly owned in
equal shares by the siblings Pantaleon Maglunob (Pantaleon)

and Placida Maglunob-Sorrosa (Placida). Upon the death of

Pantaleon and Placida, their surviving and legal heirs
executed a Deed of Extrajudicial Settlement and Partition of
Estate in July 1981,[26] however, the Deed was not
notarized. Considering that Pantaleon died without issue, his
one-half share in the parcel of land he co-owned with Placida
passed on to his four siblings (or their respective heirs, if
already deceased), namely: Placida, Luis, Martin I, and
Victoria, in equal shares.
According to the aforementioned Deed of Extrajudicial
Settlement and Partition of Estate, the surviving and legal
heirs of Pantaleon and Placida agreed to have the parcel of
land commonly owned by the siblings declared for real
property tax purposes in the name of Victorino Sorrosa
(Victorino), Placidas husband. Thus, Tax Declarations No.
5988 (1942),[27] No. 6200 (1945)[28] and No. 7233 (1953)
[29] were all issued in the name of Victorino.
Since Martin I already passed away when the Deed of
Extrajudicial Settlement and Partition of Estate was executed,
his heirs[30] were represented therein by Esperanza. By
virtue of the said Deed, Martin I received as inheritance a
portion of the parcel of land measuring 897 square meters.
After the death of Victorino, his heirs[31] executed another
Partition Agreement on 29 April 1985, which was notarized on
the same date. The Partition Agreement mentioned four
parcels of land. The subject property, consisting of a portion
of the consolidated parcels 1, 2, and 3, and measuring
around 982 square meters, was allocated to Esperanza. In
comparison, the property given to Esperanza under the
Partition Agreement is bigger than the one originally
allocated to her earlier under the Deed of Extrajudicial
Settlement and Partition of Estate dated July 1981, which had
an area of only 897 square meters. It may be reasonably
assumed, however, that the subject property, measuring 982
square meters, allocated to Esperanza under the Partition
Agreement dated 29 April 1985, is already inclusive of the
smaller parcel of 897 square meters assigned to her under
the Deed of Extrajudicial Settlement and Partition of Estate

dated July 1981. As explained by the RTC in its 12 September

2000 Decision:
The [subject property] which is claimed by the [herein
petitioner and her husband] and that which is claimed by the
[herein respondents] are one and the same, the difference in
area and technical description being due to the repartition
and re-allocation of the parcel of land originally co-owned by
Pantaleon Maglunob and his sister Placida Maglunob and
subsequently declared in the name of [Victorino] under Tax
Declaration No. 5988 of 1949.[32]
It is clear from the records that the subject property was not
Esperanzas exclusive share, but also that of the other heirs of
her father, Martin I. Esperanza expressly affixed her
thumbmark to the Deed of Extrajudicial Settlement of July
1981 not only for herself, but also on behalf of the other heirs
of Martin I. Though in the Partition Agreement dated 29 April
1985 Esperanza affixed her thumbmark without stating that
she was doing so not only for herself, but also on behalf of
the other heirs of Martin I, this does not mean that Esperanza
was already the exclusive owner thereof. The evidence shows
that the subject property is the share of the heirs of Martin I.
This is clear from the sketch[33] attached to the Partition
Agreement dated 29 April 1985, which reveals the
proportionate areas given to the heirs of the two siblings,
Pantaleon and Placida, who were the original owners of the
whole parcel of land[34] from which the subject property was
taken.
Further, it bears emphasis that the Partition Agreement was
executed by and among the son, grandsons, granddaughters
and cousins of Victorino. Esperanza was neither the
granddaughter nor the cousin of Victorino, as she was only
Victorinos grandniece. The cousin of Victorino is Martin I,
Esperanzas father. In effect, therefore, the subject property
allotted to Esperanza in the Partition Agreement was not her
exclusive share, as she holds the same for and on behalf of
the other heirs of Martin I, who was already deceased at the
time the Partition Agreement was made.

To further bolster the truth that the subject property was not
exclusively owned by Esperanza, the Affidavit she executed
in favor of petitioner and her husband on 6 June 1985 was
worded as follows:
That I hereby renounce, relinquish, waive and quitclaim all
my rights, share, interest and participation whatsoever in the
[subject property] unto the said Sps. Ray Mars Arangote and
Elvira T. Arangote, their heirs, successors, and assigns
including the improvement found thereon;[35]
Logically, if Esperanza fully owned the subject property, she
would have simply waived her rights to and interest in the
subject property, without mentioning her share and
participation in the same. By including such words in her
Affidavit, Esperanza was aware of and was limiting her
waiver, renunciation, and quitclaim to her one-third share
and participation in the subject property.
Going to the issues raised by the petitioner in this Petition,
this Court will resolve the same concurrently as they are
interrelated.
In this case, the petitioner derived her title to the subject
property from the notarized Affidavit executed by Esperanza,
wherein the latter relinquished her rights, share, interest and
participation over the same in favor of the petitioner and her
husband.
A careful perusal of the said Affidavit reveals that it is not
what it purports to be. Esperanzas Affidavit is, in fact, a
Donation. Esperanzas real intent in executing the said
Affidavit was to donate her share in the subject property to
petitioner and her husband.
As no onerous undertaking is required of petitioner and her
husband under the said Affidavit, the donation is regarded as
a pure donation of an interest in a real property covered by
Article 749 of the Civil Code.[36] Article 749 of the Civil Code
provides:

Art. 749. In order that the donation of an immovable may be

valid, it must be made in a public document, specifying
therein the property donated and the value of the charges
which the donee must satisfy.

If the acceptance is made in a separate instrument, the

donor shall be notified thereof in an authentic form, and this
step shall be noted in both instruments.

In the present case, the said Affidavit, which is tantamount to

a Deed of Donation, met the first requisite, as it was
notarized; thus, it became a public instrument. Nevertheless,
it failed to meet the aforesaid second and third requisites.
The acceptance of the said donation was not made by the
petitioner and her husband either in the same Affidavit or in
a separate public instrument. As there was no acceptance
made of the said donation, there was also no notice of the
said acceptance given to the donor, Esperanza. Therefore,
the Affidavit executed by Esperanza in favor of petitioner and
her husband is null and void.

From the aforesaid provision, there are three requisites for

the validity of a simple donation of a real property, to wit: (1)
it must be made in a public instrument; (2) it must be
accepted, which acceptance may be made either in the same
Deed of Donation or in a separate public instrument; and (3)
if the acceptance is made in a separate instrument, the
donor must be notified in an authentic form, and the same
must be noted in both instruments.

The subsequent notarized Deed of Acceptance[39] dated 23

September 2000, as well as the notice[40] of such
acceptance, executed by the petitioner did not cure the
defect. Moreover, it was only made by the petitioner several
years after the Complaint was filed in court, or when the RTC
had already rendered its Decision dated 12 September 2000,
although it was still during Esperanzas lifetime. Evidently, its
execution was a mere afterthought, a belated attempt to
cure what was a defective donation.

The acceptance may be made in the same deed of donation

or in a separate public document, but it shall not take effect
unless it is done during the lifetime of the donor.

This Court agrees with the RTC and the Court of Appeals that
the Affidavit executed by Esperanza relinquishing her rights,
share, interest and participation over the subject property in
favor of the petitioner and her husband suffered from legal
infirmities, as it failed to comply with the aforesaid requisites
of the law.
In Sumipat v. Banga,[37] this Court declared that title to
immovable property does not pass from the donor to the
donee by virtue of a Deed of Donation until and unless it has
been accepted in a public instrument and the donor duly
notified thereof. The acceptance may be made in the very
same instrument of donation. If the acceptance does not
appear in the same document, it must be made in another.
Where the Deed of Donation fails to show the acceptance, or
where the formal notice of the acceptance, made in a
separate instrument, is either not given to the donor or else
not noted in the Deed of Donation and in the separate
acceptance, the donation is null and void.[38]

It is true that the acceptance of a donation may be made at

any time during the lifetime of the donor. And granting
arguendo that such acceptance may still be admitted in
evidence on appeal, there is still need for proof that a formal
notice of such acceptance was received by the donor and
noted in both the Deed of Donation and the separate
instrument embodying the acceptance.[41] At the very least,
this last legal requisite of annotation in both instruments of
donation and acceptance was not fulfilled by the petitioner.
Neither the Affidavit nor the Deed of Acceptance bears the
fact that Esperanza received notice of the acceptance of the
donation by petitioner. For this reason, even Esperanzas onethird share in the subject property cannot be adjudicated to
the petitioner.
With the foregoing, this Court holds that the RTC and the
Court of Appeals did not err in declaring null and void
Esperanzas Affidavit.

The next issue to be resolved then is whether the RTC, as

well as the Court of Appeals, erred in declaring OCT No.
CLOA-1748 in the name of petitioner and her husband null
and void.
Again, this Court answers the said issue in the negative.
Section 48 of Presidential decree No. 1529 states:
SEC. 48. Certificate not subject to collateral attack. - A
certificate of title shall not be subject to collateral attack. It
cannot be altered, modified, or cancelled except in a direct
proceeding in accordance with law.
Such proscription has long been enshrined in Philippine
jurisprudence. The judicial action required to challenge the
validity of title is a direct attack, not a collateral attack.[42]
The attack is considered direct when the object of an action
is to annul or set aside such proceeding, or enjoin its
enforcement. Conversely, an attack is indirect or collateral
when, in an action to obtain a different relief, an attack on
the proceeding is nevertheless made as an incident thereof.
Such action to attack a certificate of title may be an original
action or a counterclaim, in which a certificate of title is
assailed as void.[43]
A counterclaim is considered a new suit in which the
defendant is the plaintiff and the plaintiff in the complaint
becomes the defendant. It stands on the same footing as,
and is to be tested by the same rules as if it were, an
independent action.[44]
In their Answer to the Complaint for Quieting of Title filed by
the petitioner and her husband before the MCTC,
respondents included therein a Counterclaim wherein they
repleaded all the material allegations in their affirmative
defenses, the most essential of which was their claim that
petitioner and her husband -- by means of fraud, undue
influence and deceit -- were able to make their grand aunt,
Esperanza, who was already old and illiterate, affix her

thumbmark to the Affidavit, wherein she renounced, waived,

and quitclaimed all her rights and interest over the subject
property in favor of petitioner and her husband. In addition,
respondents maintained in their Answer that as petitioner
and her husband were not tenants either of Esperanza or of
the respondents, the DAR could not have validly issued in
favor of petitioner and her husband OCT No. CLOA-1748.
Thus, the respondents prayed, in their counterclaim in Civil
Case No. 156 before the MCTC, that OCT No. CLOA-1748
issued in the name of petitioner, married to Ray Mars E.
Arangote, be declared null and void, insofar as their twothirds shares in the subject property are concerned.
It is clear, thus, that respondents Answer with Counterclaim
was a direct attack on petitioners certificate of title.
Furthermore, since all the essential facts of the case for the
determination of the validity of the title are now before this
Court, to require respondents to institute a separate
cancellation proceeding would be pointlessly circuitous and
against the best interest of justice.
Esperanzas Affidavit, which was the sole basis of petitioners
claim to the subject property, has been declared null and
void. Moreover, petitioner and her husband were not tenants
of the subject property. In fact, petitioner herself admitted in
her Complaint filed before the MCTC that her husband is out
of the country, rendering it impossible for him to work on the
subject property as a tenant. Instead of cultivating the
subject property, petitioner and her husband possessed the
same by constructing a house thereon. Thus, it is highly
suspicious how the petitioner was able to secure from the
DAR a Certificate of Land Ownership Award (CLOA) over the
subject property. The DAR awards such certificates to the
grantees only if they fulfill the requirements of Republic Act
No. 6657, otherwise known as the Comprehensive Agrarian
Reform Program (CARP).[45] Hence, the RTC and the Court of
Appeals did not err in declaring null and void OCT No. CLOA1748 in the name of the petitioner, married to Ray Mars E.
Arangote.
Considering that Esperanza died without any compulsory
heirs and that the supposed donation of her one-third share

in the subject property per her Affidavit dated 9 June 1985

was already declared null and void, Esperanzas one-third
share in the subject property passed on to her legal heirs, the
respondents.

Esperanza, so Esperanza had no authority to relinquish the

entire subject property to petitioner. From that moment, the
good faith of the petitioner had ceased.

As petitioners last-ditch effort, she claims that she is a

possessor in good faith and, thus, entitled to the rights
provided for under Articles 448 and 546 of the Civil Code.

Petitioner cannot be entitled to the rights under Articles 448

and 546 of the Civil Code, because the rights mentioned
therein are applicable only to builders in good faith and not
to possessors in good faith.

This claim is untenable.

The Civil Code describes a possessor in good faith as follows:
Art. 526. He is deemed a possessor in good faith who is not
aware that there exists in his title or mode of acquisition any
flaw which invalidates it.
He is deemed a possessor in bad faith who possesses in any
case contrary to the foregoing.
Mistake upon a doubtful or difficult question of law may be
the basis of good faith.
Art. 1127. The good faith of the possessor consists in the
reasonable belief that the person from whom he received the
thing was the owner thereof, and could transmit his
ownership.
Possession in good faith ceases from the moment defects in
the title are made known to the possessor by extraneous
evidence or by a suit for recovery of the property by the true
owner. Every possessor in good faith becomes a possessor in
bad faith from the moment he becomes aware that what he
believed to be true is not so.[46]
In the present case, when respondents came to know that an
OCT over the subject property was issued and registered in
petitioners name on 26 March 1993, respondents brought a
Complaint on 7 August 1993 before the Lupon of Barangay
Maloco, Ibajay, Aklan, challenging the title of petitioner to the
subject property on the basis that said property constitutes
the inheritance of respondent, together with their grandaunt

Moreover, the petitioner cannot be considered a builder in

good faith of the house on the subject property. In the
context that such term is used in particular reference to
Article 448 of the Civil Code, a builder in good faith is one
who, not being the owner of the land, builds on that land,
believing himself to be its owner and unaware of any defect
in his title or mode of acquisition.[47]
The various provisions of the Civil Code, pertinent to the
subject, read:
Article 448. The owner of the land on which anything has
been built, sown, or planted in good faith, shall have the right
to appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in Articles 546 and
548, or to oblige the one who built or planted to pay the price
of the land, and the one who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the
land if its value is considerably more than that of the building
or trees. In such a case, he shall pay reasonable rent, if the
owner of the land does not choose to appropriate the building
or trees after proper indemnity. The parties shall agree upon
the terms of the lease and in case of disagreement, the court
shall fix the terms thereof.
Article 449. He who builds, plants, or sows in bad faith on the
land of another, loses what is built, planted or sown without
right to indemnity.
Article 450. The owner of the land on which anything has
been built, planted or sown in bad faith may demand the
demolition of the work, or that the planting or sowing be

removed, in order to replace things in their former condition

at the expense of the person who built, planted or sowed; or
he may compel the builder or planter to pay the price of the
land, and the sower the proper rent.
Under the foregoing provisions, the builder in good faith can
compel the landowner to make a choice between
appropriating the building by paying the proper indemnity or
obliging the builder to pay the price of the land. The choice
belongs to the owner of the land, a rule that accords with the
principle of accession, i.e., that the accessory follows the
principal and not the other way around. Even as the option
lies with the landowner, the grant to him, nevertheless, is
preclusive. He must choose one. He cannot, for instance,
compel the owner of the building to instead remove it from
the land. In order, however, that the builder can invoke that
accruing benefit and enjoy his corresponding right to demand
that a choice be made by the landowner, he should be able
to prove good faith on his part.[48]
Good faith, here understood, is an intangible and abstract
quality with no technical meaning or statutory definition, and
it encompasses, among other things, an honest belief, the
absence of malice and the absence of design to defraud or to
seek an unconscionable advantage. An individuals personal
good faith is a concept of his own mind and, therefore, may
not conclusively be determined by his protestations alone. It
implies honesty of intention, and freedom from knowledge of
circumstances which ought to put the holder upon inquiry.
The essence of good faith lies in an honest belief in the
validity of ones right, ignorance of a superior claim, and
absence of intention to overreach another. Applied to
possession, one is considered in good faith if he is not aware
that there exists in his title or mode of acquisition any flaw
which invalidates it.[49]
In this case, the subject property waived and quitclaimed by
Esperanza to the petitioner and her husband in the Affidavit
was only covered by a tax declaration in the name of
Esperanza. Petitioner did not even bother to look into the
origin of the subject property and to probe into the right of

Esperanza to relinquish the same. Thus, when petitioner and

her husband built a house thereon in 1989 they cannot be
considered to have acted in good faith as they were fully
aware that when Esperanza executed an Affidavit
relinquishing in their favor the subject property the only proof
of Esperanzas ownership over the same was a mere tax
declaration. This fact or circumstance alone was enough to
put the petitioner and her husband under inquiry. Settled is
the rule that a tax declaration does not prove ownership. It
is merely an indicium of a claim of ownership. Payment of
taxes is not proof of ownership; it is, at best, an indicium of
possession in the concept of ownership. Neither tax receipts
nor a declaration of ownership for taxation purposes is
evidence of ownership or of a right to possess realty when
not supported by other effective proofs.[50]
With the foregoing, the petitioner is not entitled to the rights
under Article 448 and 546 as the petitioner is not a builder
and possessor in good faith.
WHEREFORE, premises considered, the instant Petition is
hereby DENIED. The Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 64970, dated 27 October 2006 and
29 June 2007, respectively, affirming the RTC Decision dated
12 September 2000 in Civil Case No. 5511 and declaring the
respondents the lawful owners and possessors of the subject
property are hereby AFFIRMED. No costs.

AGAPAY vs. PALANG

GR No. 116668, July 28, 1997
FACTS: Miguel Palang contracted marriage with Carlina in
Pangasinan on 1949. He left to work in Hawaii a few months
after the wedding. Their only child Herminia was born in May
1950. The trial court found evident that as early as 1957,
Miguel attempted to Divorce Carlina in Hawaii. When he
returned for good in 1972, he refused to lived with Carlina
and stayed alone in a house in Pozzorubio Pangasinan.
The 63 year old Miguel contracted a subsequent marriage
with 19 year old Erlinda Agapay, herein petitioner. 2 months
earlier, they jointly purchased a parcel of agricultural land
located at Binalonan Pangasinan. A house and lot in the
same place was likewise purchased. On the other hand,
Miguel and Carlina executed a Deed of Donation as a form of
compromise agreement and agreed to donate their conjugal
property consisting of 6 parcels of land to their child
Herminia.
Miguel and Erlindas cohabitation produced a son named
Kristopher. In 1979, they were convicted of concubinage
upon Carlinas complaint. 2 years later, Miguel died. Carlina
and her daughter instituted this case for recovery of
ownership and possession with damages against petitioner.
They sought to get back the land and the house and lot
located at Binalonan allegedly purchase by Miguel during his
cohabitation with petitioner. The lower court dismissed the
complaint but CA reversed the decision.
ISSUE: Whether the agricultural land and the house and lot
should be awarded in favor of Erlinda Agapay.
HELD: The sale of the riceland on May 17, 1973, was made
in favor of Miguel and Erlinda. However, their marriage is
void because of the subsisting marriage with Carlina. Only
the properties acquired by both parties through their actual
joint contribution shall be owned by them in proportion to
their respective contributions. It is required that there be an
actual contribution. If actual contribution is not proved, there
will be no co-ownership and no presumption of equal shares.

Erlinda established in her testimony that she was engaged in

the business of buy and sell and had a sari-sari store.
However, she failed to persuade the court that she actually
contributed money to but the subjected riceland. When the
land was acquired, she was only around 20 years old
compared to Miguel who was already 64 years old and a
pensioner of the US Government.
Considering his
youthfulness, its unrealistic how she could have contributed
the P3,750 as her share. Thus, the court finds no basis to
justify the co-ownership with Miguel over the same. Hence,
the Riceland should, as correctly held by CA, revert to the
conjugal partnership property of the deceased and Carlina.
It is immaterial that Miguel and Carlina previously agreed to
donate their conjugal property in favor of Herminia.
Separation of property between spouses during the marriage
shall not take place except by judicial order or without
judicial conferment when there is an express stipulation in
the marriage settlements. The judgment resulted from the
compromise was not specifically for separation of property
and should not be so inferred.
With respect to the house and lot, Atty Sagun, notary public
who prepared the deed of conveyance for the property
revealed the falshood of Erlindas claim that she bought such
property for P20,000 when she was 22 years old. The lawyer
testified that Miguel provided the money for the purchase
price and directed Erlindas name alone be placed as the
vendee.
The transaction made by Miguel to Erlinda was properly a
donation and which was clearly void and inexistent by
express provision of the law because it was made between
persons guilty of adultery or concubinage at the time of the
donation. Moreover, Article 87 of the Family Code, expressly
provides that the prohibition against donation between
spouses now applies to donations between persons living
together as husband and wife without a valid marriage, for
otherwise, the condition of those who incurred guilt would
turn out to be better than those in legal union.

AGAPAY vs. PALANG

Before us is a petition for review of the decision of the Court
of Appeals in CA-G.R. CV No. 24199 entitled Erlinda Agapay v.
Carlina (Cornelia) Palang and Herminia P. Dela Cruz dated
June 22, 1994 involving the ownership of two parcels of land
acquired during the cohabitation of petitioner and private
respondents legitimate spouse.
Miguel Palang contracted his first marriage on July 16, 1949
when he took private respondent Carlina (or Cornelia)
Vallesterol as a wife at the Pozorrubio Roman Catholic Church
in Pangasinan. A few months after the wedding, in October
1949, he left to work in Hawaii. Miguel and Carlinas only
child, Herminia Palang, was born on May 12, 1950.
Miguel returned in 1954 for a year. His next visit to the
Philippines was in 1964 and during the entire duration of his
year-long sojourn he stayed in Zambales with his brother, not
in Pangasinan with his wife and child. The trial court found
evidence that as early as 1957, Miguel had attempted to
divorce Carlina in Hawaii.[1] When he returned for good in
1972, he refused to live with private respondents, but stayed
alone in a house in Pozorrubio, Pangasinan.
On July 15, 1973, the then sixty-three-year-old Miguel
contracted his second marriage with nineteen-year-old
Erlinda Agapay, herein petitioner.[2] Two months earlier, on
May 17, 1973, Miguel and Erlinda, as evidenced by the Deed
of Sale, jointly purchased a parcel of agricultural land located
at San Felipe, Binalonan, Pangasinan with an area of 10,080
square meters. Consequently, Transfer Certificate of Title No.
101736 covering said rice land was issued in their names.
A house and lot in Binalonan, Pangasinan was likewise
purchased on September 23, 1975, allegedly by Erlinda as
the sole vendee. TCT No. 143120 covering said property was
later issued in her name.
On October 30, 1975, Miguel and Cornelia Palang executed a
Deed of Donation as a form of compromise agreement to
settle and end a case filed by the latter.[3] The parties

therein agreed to donate their conjugal property consisting of

six parcels of land to their only child, Herminia Palang.[4]
Miguel and Erlindas cohabitation produced a son, Kristopher
A. Palang, born on December 6, 1977. In 1979, Miguel and
Erlinda were convicted of Concubinage upon Carlinas
complaint.[5] Two years later, on February 15, 1981, Miguel
died.
On July 11, 1981, Carlina Palang and her daughter Herminia
Palang de la Cruz, herein private respondents, instituted the
case at bar, an action for recovery of ownership and
possession with damages against petitioner before the
Regional Trial Court in Urdaneta, Pangasinan (Civil Case No.
U-4265). Private respondents sought to get back the riceland
and the house and lot both located at Binalonan, Pangasinan
allegedly purchased by Miguel during his cohabitation with
petitioner.
Petitioner, as defendant below, contended that while the
riceland covered by TCT No. 101736 is registered in their
names (Miguel and Erlinda), she had already given her half of
the property to their son Kristopher Palang. She added that
the house and lot covered by TCT No. 143120 is her sole
property, having bought the same with her own money.
Erlinda added that Carlina is precluded from claiming
aforesaid properties since the latter had already donated
their conjugal estate to Herminia.
After trial on the merits, the lower court rendered its decision
on June 30, 1989 dismissing the complaint after declaring
that there was little evidence to prove that the subject
properties pertained to the conjugal property of Carlina and
Miguel Palang. The lower court went on to provide for the
intestate shares of the parties, particularly of Kristopher
Palang, Miguels illegitimate son. The dispositive portion of
the decision reads:
WHEREFORE, premises considered, judgment is hereby
rendered1) Dismissing the complaint, with costs against plaintiffs;

2) Confirming the ownership of defendant Erlinda Agapay of

the residential lot located at Poblacion, Binalonan,
Pangasinan, as evidenced by TCT No. 143120, Lot 290-B
including the old house standing therein;

3. Ordering the Register of Deeds of Pangasinan to cancel

Transfer Certificate of Title Nos. 143120 and 101736 and to
issue in lieu thereof another certificate of title in the name of
plaintiffs-appellants.
No pronouncement as to costs.[7]

3) Confirming the ownership of one-half (1/2) portion

piece of agricultural land situated at Balisa, San
Binalonan, Pangasinan, consisting of 10,080 square
and as evidenced by TCT No. 101736, Lot 1123-A to
Agapay;

of that
Felipe,
meters
Erlinda

4) Adjudicating to Kristopher Palang as his inheritance from

his deceased father, Miguel Palang, the one-half (1/2) of the
agricultural land situated at Balisa, San Felipe, Binalonan,
Pangasinan, under TCT No. 101736 in the name of Miguel
Palang, provided that the former (Kristopher) executes, within
15 days after this decision becomes final and executory, a
quit-claim forever renouncing any claims to annul/reduce the
donation to Herminia Palang de la Cruz of all conjugal
properties of her parents, Miguel Palang and Carlina
Vallesterol Palang, dated October 30, 1975, otherwise, the
estate of deceased Miguel Palang will have to be settled in
another separate action;
5) No pronouncement as to damages and attorneys fees.

Hence, this petition.

Petitioner claims that the Court of Appeals erred in not
sustaining the validity of two deeds of absolute sale covering
the riceland and the house and lot, the first in favor of Miguel
Palang and Erlinda Agapay and the second, in favor of Erlinda
Agapay alone. Second, petitioner contends that respondent
appellate court erred in not declaring Kristopher A. Palang as
Miguel Palangs illegitimate son and thus entitled to inherit
from Miguels estate. Third, respondent court erred, according
to petitioner, in not finding that there is sufficient pleading
and evidence that Kristoffer A. Palang or Christopher A.
Palang should be considered as party-defendant in Civil Case
No. U-4625 before the trial court and in CA-G.R. No. 24199.
[8]
After studying the merits of the instant case, as well as the
pertinent provisions of law and jurisprudence, the Court
denies the petition and affirms the questioned decision of the
Court of Appeals.

SO ORDERED.[6]
On appeal, respondent court reversed the trial courts
decision. The Court of Appeals rendered its decision on July
22, 1994 with the following dispositive portion:
WHEREFORE, PREMISES CONSIDERED, the appealed decision
is hereby REVERSED and another one entered:
1. Declaring plaintiffs-appellants the owners of the properties
in question;
2. Ordering defendant-appellee to vacate and deliver the
properties in question to herein plaintiffs-appellants;

The first and principal issue is the ownership of the two

pieces of property subject of this action. Petitioner assails the
validity of the deeds of conveyance over the same parcels of
land. There is no dispute that the transfers of ownership from
the original owners of the riceland and the house and lot,
Corazon Ilomin and the spouses Cespedes, respectively, were
valid.
The sale of the riceland on May 17, 1973, was made in favor
of Miguel and Erlinda. The provision of law applicable here is
Article 148 of the Family Code providing for cases of
cohabitation when a man and a woman who are not
capacitated to marry each other live exclusively with each
other as husband and wife without the benefit of marriage or

under a void marriage. While Miguel and Erlinda contracted

marriage on July 15, 1973, said union was patently void
because the earlier marriage of Miguel and Carlina was still
susbsisting and unaffected by the latters de facto separation.
Under Article 148, only the properties acquired by both of the
parties through their actual joint contribution of money,
property or industry shall be owned by them in common in
proportion to their respective contributions. It must be
stressed that actual contribution is required by this provision,
in contrast to Article 147 which states that efforts in the care
and maintenance of the family and household, are regarded
as contributions to the acquisition of common property by
one who has no salary or income or work or industry. If the
actual contribution of the party is not proved, there will be no
co-ownership and no presumption of equal shares.[9]
In the case at bar, Erlinda tried to establish by her testimony
that she is engaged in the business of buy and sell and had a
sari-sari store[10] but failed to persuade us that she actually
contributed money to buy the subject riceland. Worth noting
is the fact that on the date of conveyance, May 17, 1973,
petitioner was only around twenty years of age and Miguel
Palang was already sixty-four and a pensioner of the U.S.
Government. Considering her youthfulness, it is unrealistic to
conclude that in 1973 she contributed P3,750.00 as her share
in the purchase price of subject property,[11] there being no
proof of the same.
Petitioner now claims that the riceland was bought two
months before Miguel and Erlinda actually cohabited. In the
nature of an afterthought, said added assertion was intended
to exclude their case from the operation of Article 148 of the
Family Code. Proof of the precise date when they commenced
their adulterous cohabitation not having been adduced, we
cannot state definitively that the riceland was purchased
even before they started living together. In any case, even
assuming that the subject property was bought before
cohabitation, the rules of co-ownership would still apply and
proof of actual contribution would still be essential.

Since petitioner failed to prove that she contributed money to

the purchase price of the riceland in Binalonan, Pangasinan,
we find no basis to justify her co-ownership with Miguel over
the same. Consequently, the riceland should, as correctly
held by the Court of Appeals, revert to the conjugal
partnership property of the deceased Miguel and private
respondent Carlina Palang.
Furthermore, it is immaterial that Miguel and Carlina
previously agreed to donate their conjugal property in favor
of their daughter Herminia in 1975. The trial court erred in
holding that the decision adopting their compromise
agreement in effect partakes the nature of judicial
confirmation of the separation of property between spouses
and the termination of the conjugal partnership.[12]
Separation of property between spouses during the marriage
shall not take place except by judicial order or without
judicial conferment when there is an express stipulation in
the marriage settlements.[13] The judgment which resulted
from the parties compromise was not specifically and
expressly for separation of property and should not be so
inferred.
With respect to the house and lot, Erlinda allegedly bought
the same for P20,000.00 on September 23, 1975 when she
was only 22 years old. The testimony of the notary public
who prepared the deed of conveyance for the property
reveals the falsehood of this claim. Atty. Constantino Sagun
testified that Miguel Palang provided the money for the
purchase price and directed that Erlindas name alone be
placed as the vendee.[14]
The transaction was properly a donation made by Miguel to
Erlinda, but one which was clearly void and inexistent by
express provision of law because it was made between
persons guilty of adultery or concubinage at the time of the
donation, under Article 739 of the Civil Code. Moreover,
Article 87 of the Family Code expressly provides that the
prohibition against donations between spouses now applies
to donations between persons living together as husband and
wife without a valid marriage,[15] for otherwise, the

condition of those who incurred guilt would turn out to be

better than those in legal union.[16]
The second issue concerning Kristopher Palangs status and
claim as an illegitimate son and heir to Miguels estate is here
resolved in favor of respondent courts correct assessment
that the trial court erred in making pronouncements
regarding Kristophers heirship and filiation inasmuch as
questions as to who are the heirs of the decedent, proof of
filiation of illegitimate children and the determination of the
estate of the latter and claims thereto should be ventilated in
the proper probate court or in a special proceeding instituted
for the purpose and cannot be adjudicated in the instant
ordinary civil action which is for recovery of ownership and
possession.[17]
As regards the third issue, petitioner contends that Kristopher
Palang should be considered as party-defendant in the case
at bar following the trial courts decision which expressly
found that Kristopher had not been impleaded as party
defendant but theorized that he had submitted to the courts
jurisdiction through his mother/guardian ad litem.[18] The
trial court erred gravely. Kristopher, not having been
impleaded, was, therefore, not a party to the case at bar. His
mother, Erlinda, cannot be called his guardian ad litem for he
was not involved in the case at bar. Petitioner adds that there
is no need for Kristopher to file another action to prove that
he is the illegitimate son of Miguel, in order to avoid
multiplicity of suits.[19] Petitioners grave error has been
discussed in the preceeding paragraph where the need for
probate proceedings to resolve the settlement of Miguels
estate and Kristophers successional rights has been pointed
out.
WHEREFORE, the instant petition is hereby DENIED. The
questioned decision of the Court of Appeals is AFFIRMED.
Costs against petitioner.

EDUARTE vs. COURT OF APPEALS

FACTS: Pedro Calapine was the registered owner of a parcel
of land located in San Cristobal, San Pablo City, with an area
of 12,199 square meters, as evidenced by Original Certificate
of Title No. P-2129. On April 26, 1984, he executed a deed
entitled Pagbibigay-Pala (Donacion Inter-Vivos) ceding onehalf portion thereof to his niece Helen S. Doria.
On July 26, 1984, another deed identically entitled was
purportedly executed by Pedro Calapine ceding unto Helen S.
Doria the whole of the parcel of land covered by OCT No. P2129), on the basis of which said original certificate was
cancelled and in lieu thereof Transfer Certificate of Title No. T23205 was issued in her name.
On February 26, 1986, Helen S. Doria donated a portion of
157 square meters of the parcel of land covered by TCT No.
T-23205 to the Calauan Christian Reformed Church, Inc.
On March 25, 1988, Helen S. Doria sold, transferred and
conveyed unto the spouses Romulo and Sally Eduarte the
parcel of land covered by TCT No. T-24445, save the portion
of 700 square meters on which the vendors house had been
erected.
Claiming that his signature to the deed of donation was a
forgery and that, she was unworthy of his liberality, Pedro
Calapine brought suit against Helen S. Doria, the Calauan
Christian Reformed Church, Inc. and the spouses Romulo and
Sally Eduarte to revoke the donation made in favor of Helen
S. Doria, to declare null and void the deeds of donation and
sale that she had executed in favor of the Calauan Christian
Reformed Church, Inc. and the spouses Romulo and Sally
Eduarte and to cancel TCT Nos. T-24444, 24445 and T-27434.
The RTC rendered judgment in favor of plaintiff and against
defendant Eduartes. On appeal, the Court dismissed
petitioners appeal and affirmed the decision of the trial
court..

ISSUE: WON there was a valid revocation of the first

donation?
HELD: YES. All crimes which offend the donor show
ingratitude and are causes for revocation. There is no doubt,
therefore, that the donee who commits adultery with the wife
of the donor, gives cause for revocation by reason of
ingratitude. The crimes against the person of the donor
would include not only homicide and physical injuries, but
also illegal detention, threats, and coercion; those against
honor include offenses against chastity; and those against
the property, include robbery, theft, usurpation, swindling,
arson, damages, etc.
By falsifying Pedro Calapines signature, Helen Doria
committed an act of ingratitude which is a valid ground for
revocation of the donation made in her favor in accordance
with Article 765 of the Civil Code.

EDUARTE vs. COURT OF APPEALS

A donation is an act of liberality whereby a person disposes
gratuitously of a thing or right in favor of another, who
accepts it.[1] On the part of the donor, it is an exercise of
ones generosity. However, on several occasions, instead of
being accorded recognition and appreciation for this act of
beneficence, the donor ends up as a victim of greed and
ingratitude. This was the fate that befell Pedro Calapine
(herein original plaintiff) constraining him to cause the
revocation of the donation that he made to his niece in 1984.
The instant petition for certiorari is interposed by the spouses
Romulo and Sally Eduarte, assailing the decision of the Court
of Appeals in CA-G.R. CV No. 29175 which affirmed the
revocation of the donation made by Pedro Calapine to his
niece, Helen Doria, and at the same time declared petitioners
as purchasers in bad faith of the property donated.
As set out in the appealed decision, the undisputed facts are
as follows:
Pedro Calapine was the registered owner of a parcel of land
located in San Cristobal, San Pablo City, with an area of
12,199 square meters, as evidenced by Original Certificate of
Title No. P-2129 (Exhibits A and 1). On April 26, 1984, he
executed a deed entitled Pagbibigay-Pala (Donacion InterVivos) ceding one-half portion thereof to his niece Helen S.
Doria (Exhibit B).
On July 26, 1984, another deed identically entitled was
purportedly executed by Pedro Calapine ceding unto Helen S.
Doria the whole of the parcel of land covered by OCT No. P2129 (Exhibits C and D), on the basis of which said original
certificate was cancelled and in lieu thereof Transfer
Certificate of Title No. T-23205 was issued in her name
(Exhibits G and 2).
On February 26, 1986, Helen S. Doria donated a portion of
157 square meters of the parcel of land covered by TCT No.
T-23205 to the Calauan Christian Reformed Church, Inc.
(Exhibit H), on the basis of which said transfer certificate of
title was cancelled and TCT No. T-24444 was issued in its

name covering 157 square meters (Exhibit 2-A) and TCT No.
T-24445, in the name of Helen S. Doria covering the
remaining portion of 12,042 square meters (Exhibit 3).
On March 25, 1988, Helen S. Doria sold, transferred and
conveyed unto the spouses Romulo and Sally Eduarte the
parcel of land covered by TCT No. T-24445, save the portion
of 700 square meters on which the vendors house had been
erected (Exhibits I and 3-F), on the basis of which TCT No.
24445 was cancelled and in lieu thereof TCT No. T-27434,
issued in the name of the vendees (Exhibit 4).
Claiming that his signature to the deed of donation (Exhibits
C and D) was a forgery and that, she was unworthy of his
liberality, Pedro Calapine brought suit against Helen S. Doria,
the Calauan Christian Reformed Church, Inc. and the spouses
Romulo and Sally Eduarte to revoke the donation made in
favor of Helen S. Doria (Exhibit B), to declare null and void
the deeds of donation and sale that she had executed in
favor of the Calauan Christian Reformed Church, Inc. and the
spouses Romulo and Sally Eduarte (Exhibits H, I and 3-F) and
to cancel TCT Nos. T-24444, 24445 and T-27434.
Answering the complaint, the defendants spouses denied
knowledge of the first deed of donation and alleged that after
a part of the property was donated to the defendant Calauan
Christian Reformed Church, Inc., the remaining portion
thereof was sold to them by the defendant Helen S. Doria;
and that the plaintiffs purported signature in the second deed
of donation was his own, hence genuine. They prayed that
the complaint against them be dismissed; that upon their
counterclaim, the plaintiff be ordered to pay them moral and
exemplary damages and attorneys fees; and that upon their
cross-claim the defendant Helen S. Doria be ordered to
reimburse them the purchase price of P110,000 and to pay
them moral and exemplary damages and attorneys fees (pp.
23-31, rec.).
The defendant Calauan Christian Reformed Church, Inc.
manifested in its answer the willingness to reconvey to the
plaintiff that part of the property donated to it by Helen S.
Doria (pp. 36-38, rec.). And having executed the

corresponding deed of reconveyance, the case as against it

was dismissed(pp. 81-83; 84, rec.).
The defendants Helen S. Doria and the City Assessor and the
Registrar of Deeds of San Pablo City did not file answers to
the plaintiffs complaint.
After the plaintiffs death on August 27, 1989, on motion, he
was substituted by his nephews Alexander and Artemis
Calapine upon order of the Court (pp. 147-152; 250, rec.).
After trial, the Regional Trial Court, Fourth Judicial Region,
Branch 30, San Pablo City rendered judgment, the dispositive
part of which provides:
WHEREFORE, premises considered, judgment is hereby
rendered by the Court in the instant case in favor of plaintiff
and against defendant Eduartes to wit:
1. DECLARING as it is hereby declared, the revocation of the
Deed of Donation dated April 26,1984;
2. ANNULLING, voiding, setting aside and declaring of no
force and effect the Deed of Donation dated July 26, 1984,
the deed of absolute sale executed on March 25, 1988 by and
between spouses Eduartes and Helen Doria, and the Transfer
Certificate of Title No-T-27434 issued under the name of
spouses Romulo and Sally Eduarte;
3. ORDERING the office of the Register of Deeds, San Pablo
City, to cancel TCT No. T-27434 or any other adverse title
emanating from OCT No. P-2129 and in lieu thereof, to issue
a new transfer certificate of title covering the subject
property under the names of the substitute-plaintiffs
Alexander and Artemis both surnamed Calapine, after
payment of the corresponding fees and taxes therefor; and
4. ORDERING defendant Helen Doria to pay substituteplaintiffs the sum of P20,000.00 as and for attorneys fees.
Judgment on the cross-claim of defendant Eduartes against
Helen Doria is further rendered by ordering the latter to pay

the former the sum of P110,000.00 with legal interest

thereon starting from March 25, 1988 until full payment, and
the further sum of P20,000.00 as and for attorneys fees.
The counterclaim of defendant Eduartes against plaintiff is
hereby dismissed for lack of merit.
Costs against defendant Helen Doria in both the complaint
and the cross-claim (pp. 11-12, decision, pp. 264-265, rec.).
Only the defendants Eduarte spouses took an appeal (p. 266,
rec.), claiming that the trial court erred 1. In annulling, voiding, setting aside, and declaring of no
force and effect (a) the deed of donation (Exhibits C and 1-A), dated July
26,1984;
(b) the deed of absolute sale (Exhibits 1 and 3-E) executed on
March 25, 1988 by and between Spouses Eduartes and Helen
Doria;
(c) TCT No. T-27434 (Exhibit 4) issued in the name of spouses
Romulo Eduarte and Sally Eduarte; and in revoking the deed
of donation (Exhibit B) dated April 26,1984;
2. In declaring the appellants Eduartes buyers in bad faith;
3. In not finding the plaintiffs guilty of estoppel by silence
and/or guilty of suppression of evidence instead of finding
the appellants Eduartes guilty of suppression of evidence;
and
4. In finding that the signature of Pedro Calapine in the deed
of donation (Exhibits C and 1-A) dated July 26,1984 a forgery
based on the opposite findings of the handwriting experts
presented by each party and in the absence of the testimony
of Pedro Calapine who was then still alive (pp. 1-2, appellants
brief.)[2]

In its decision dated April 22, 1992,[3] respondent Court of

Appeals dismissed petitioners appeal and affirmed the
decision of the trial court. Respondent court was in complete
accord with the trial court in giving more credence to the
testimony of private respondents expert witness, NBJ
document examiner Bienvenido Albacea, who found Pedro
Calapines signature in the second deed of donation to be a
forgery. It also ruled that by falsifying Pedro Calapines
signature, Helen Doria committed an act of ingratitude which
is a valid ground for revocation of the donation made in her
favor in accordance with Article 765 of the Civil Code.
Furthermore, respondent court upheld the trial courts finding
that petitioners are not buyers in good faith of the donated
property as they failed to exercise due diligence in verifying
the true ownership of the property despite the existence of
circumstances that should have aroused their suspicions.
Petitioners are now before us taking exception to the
foregoing findings of respondent Court of Appeals and
contending that the same are not in accord with the law and
evidence on record.
Anent the revocation of the first deed of donation, petitioners
submit that paragraph (1) of Article 765 of the Civil Code
does not apply in this case because the acts of ingratitude
referred to therein pertain to offenses committed by the
donee against the person or property of the donor. Petitioners
argue that as the offense imputed to herein donee Helen
Doria - falsification of a public document - is neither a crime
against the person nor property of the donor but is a crime
against public interest under the Revised Penal Code, the
same is not a ground for revocation.
In support of this contention, petitioners cite the following
portions found in Tolentinos Commentaries and Jurisprudence
on the Civil Code:
Offense against Donor - x x x. The crimes against the person
of the donor would include not only homicide and physical
injuries, but also illegal detention, threats and coercion; and
those against honor include offenses against chastity and
those against the property, include robbery, theft,

usurpation, swindling, arson, damages, etc. (5 Manresa 175176).[4]

This assertion, however, deserves scant consideration. The
full text of the very same commentary cited by petitioners
belies their claim that falsification of the deed of donation is
not an act of ingratitude, to wit:
Offense Against Donor. All crimes which offend the donor
show ingratitude and are causes for revocation. There is no
doubt, therefore, that the donee who commits adultery with
the wife of the donor, gives cause for revocation by reason of
ingratitude. The crimes against the person of the donor
would include not only homicide and physical injuries, but
also illegal detention, threats, and coercion; those against
honor include offenses against chastity; and those against
the property, include robbery, theft, usurpation, swindling,
arson, damages, etc. [Manresa 175-176].[5] (Italics supplied).
Obviously, the first sentence was deleted by petitioners
because it totally controverts their contention. As noted in
the aforecited opinion all crimes which offend the donor show
ingratitude and are causes for revocation. Petitioners attempt
to categorize the offenses according to their classification
under the Revised Penal Code is therefore unwarranted
considering that illegal detention, threats and coercion are
considered as crimes against the person of the donor despite
the fact that they are classified as crimes against personal
liberty and security under the Revised Penal Code.[6]
Petitioners also impute grave error to respondent Court of
Appeals in finding that the second deed of donation dated
July 26, 1984 was falsified. Petitioners deplore the fact that
more credence was given to the testimony of the NBI
handwriting expert who found Pedro Calapines signature in
the second deed of donation to be a forgery despite the
existence of controverting testimony by PC-INP Crime
Laboratory (PCCL) Chief Document Examiner which
petitioners adduced as evidence on their part.
We are not persuaded. Respondent Court of Appeals and the
trial court cannot be faulted for giving more weight and

credence to the testimony of the NBI handwriting expert

considering that the examination of the said witness proved
to be complete, thorough and scientific.
In gauging the relative weight to be given to the opinion of
handwriting experts, we adhere to the following standards:
We have held that the value of the opinion of a handwriting
expert depends not upon his mere statements of whether a
writing is genuine or false, but upon the assistance he may
afford in pointing out distinguishing marks, characteristics
and discrepancies in and between genuine and false
specimens of writing which would ordinarily escape notice or
detection from an unpracticed observer. The test of
genuineness ought to be the resemblance, not the formation
of letters in some other specimens but to the general
character of writing, which is impressed on it as the
involuntary and unconscious result of constitution, habit or
other permanent course, and is, therefore itself permanent.
[7]
Confronted with contradicting testimonies from two
handwriting experts, the trial court and respondent Court of
Appeals were convinced by the opinion of the NB!
handwriting expert as it was more exhaustive, in contrast
with the testimony of petitioners witness from the PCCL
which was discarded on account of the following flaws:
The Court is not convinced with Cruzs explanations. Apart
from the visual inconsistencies, i.e., the strokes with which
some letters were made, the variety in the sizes of the
letters, the depth, the difference in the slant which the Court
itself observed in its own examination of both the questioned
signatures and those standard specimen signatures, there is
evidence showing that Cruz did not make a thorough
examination of all the signatures involved in this particular
issue. Thus even in the report submitted by the PCCL it was
admitted that they omitted or overlooked the examination of
at least three (3) standard specimen signatures of Pedro
Calapine which were previously subject of the NBI
examination marked as Exhibits S-9, S-10 and S-il. When
questioned regarding this oversight, Cruz testified that in his

opinion, the inclusion or non-inclusion of said exhibits in their

examination will not affect the same and they would have
arrived at the same conclusion anyway. Again, when asked
why they did not bother to have the original copies of the
documents being questioned (Exhs. Q-1 through Q-3) for
their examination, Cruz replied that they are using a special
film so it will not matter whether the documents being
examined are the original or a mere photocopy (TSN 8, 10,
12 and 26, Hearing of Nov. 23, 1989).
The Court will not attempt to make its own conclusion or
resolution on such a technical issue as the matter at hand in
the light of the cavalier attitude of Cruz. In fine, between the
examinations made by the two witnesses, that of Albaceas
proved to be complete, thorough and scientific and is worthy
of credence and belief.[8]
The afore-quoted findings confirm beyond doubt the failure of
petitioners expert witness to satisfy the above-mentioned
criteria for evaluating the opinion of handwriting experts. At
the same time, petitioners witness failed to rebut the
convincing testimony of the NB! handwriting expert
presented by private respondents. We therefore find no
reason to deviate from the assailed conclusions as the same
are amply supported by the evidence on record.
Finally, proceeding to the crucial issue that directly affects
herein petitioners, it is reiterated that petitioners are buyers
in good faith of the donated property, and therefore, it was
grave error to annul and set aside the deed of sale executed
between petitioners and donee Helen Doria.
In adjudging petitioners as buyers in bad faith, respondent
Court of Appeals affirmed the trial courts finding that the
attendant circumstances, that is, the presence of other
occupants as well as houses built of strong materials and
fruit bearing trees in the subject land, should have aroused
the suspicion of petitioners and impelled them to exercise
due diligence in verifying the true ownership of the property
being sold. Petitioners dispute the tower courts conclusion
and argue that although there were other occupants in the
subject property, no adverse claim was made by the latter as

they were mere tenants therein, thus, petitioners were not

obliged to make any further inquiry because the property
being sold was covered by a certificate of title under Helen
Dorias name.

a right or interest in such property, and paid a full price for

the same at the time of the purchase or before they had
notice of the claim or interest of some other person in the
property.[11]

We agree with petitioners. The rule is well-settled that mere

possession cannot defeat the title of a holder of a registered
torrens title to real property.[9] Moreover, reliance on the
doctrine that a forged deed can legally be the root of a valid
title is squarely in point in this case:

Respondent Court therefore committed a reversible error

when it affirmed the ruling of the trial court annulling and
setting aside the deed of absolute sale dated March 25, 1988
between petitioners and Helen

Although generally a forged or fraudulent deed is a nullity

and conveys no title, however there are instances when such
a fraudulent document may become the root of a valid title.
One such instance is where the certificate of title was already
transferred from the name of the true owner to the forger,
and while it remained that way, the land was subsequently
sold to an innocent purchaser. For then, the vendee had the
right to rely upon what appeared in the certificate.
Where there was nothing in the certificate of title to indicate
any cloud or vice in the ownership of the property, or any
encumbrance thereon, the purchaser is not required to
explore further than what the Torrens Title upon its face
indicates in quest for any hidden defect or inchoate right that
may subsequently defeat his right thereto. If the rule were
otherwise, the efficacy and conclusiveness of the certificate
of title which the Torrens System seeks to insure would
entirely be futile and nugatory.[10]
When herein petitioners purchased the subject property from
Helen Doria, the same was already covered by TCT No. T23205 under the latters name. And although Helen Dorias
title was fraudulently secured, such fact cannot prejudice the
rights of herein petitioners absent any showing that they had
any knowledge or participation in such irregularity. Thus, they
cannot be obliged to look beyond the certificate of title which
appeared to be valid on its face and sans any annotation or
notice of private respondents adverse claim. Contrary
therefore to the conclusion of respondent Court, petitioners
are purchasers in good faith and for value as they bought the
disputed property without notice that some other person has

Doria, as well as the Transfer Certificate of Title No. T-27434

issued under petitioners name, the established rule being
that the rights of an innocent purchaser for value must be
respected and protected notwithstanding the fraud employed
by the seller in securing his title.[12]
!n this regard, it has been held that the proper recourse of
the true owner of the property who was prejudiced and
fraudulently dispossessed of the same is to bring an action
for damages against those who caused or employed the
fraud, and if the latter are insolvent, an action against the
Treasurer of the Philippines may be filed for recovery of
damages against the Assurance Fund.[13]
Conformably with the foregoing, having established beyond
doubt that Helen Doria fraudulently secured her title over the
disputed property which she subsequently sold to petitioners,
Helen Doria should instead be adjudged liable to private
respondents, and not to petitioners as declared by the trial
court and respondent Court of Appeals, for the resulting
damages to the true owner and original plaintiff, Pedro
Calapine.
ACCORDINGLY, the petition is GRANTED and the appealed
decision is hereby MODIF!ED. The portions of the decision of
the Regional Trial Court of San Pablo City, Branch 30, as
affirmed by the Court of Appeals in CA-G.R. CV No. 29175
which ordered the following:
xxx xxx xxx;

2. ANNULLING, voiding, setting aside and declaring of no

force and effect x x x , the deed of absolute sale executed on
March 25, 1988 by and between spouses Eduartes and Helen
Doria, and the Transfer Certificate of Title No. T-27434 issued
under the name of spouses Romulo and Sally Eduarte;
3. ORDERING the office of the Register of Deeds, San Pablo
City, to cancel TCT No. T-27434 or any other adverse title
emanating from OCT No. P-2129 and in lieu thereof, to issue
a new transfer certificate of title covering the subject
property under the names of the substitute-plaintiffs
Alexander and Artemi s both surnamed Calapine, after
payment of the corresponding fees and taxes therefor: and
4 xxx . xxx xxx
Judgnient on the cross-claim of defendant Eduartes against
Helen Doria is further rendered by ordering the latter to pay
the former the sum of P110,000.00 with legal interest
thereon starting from March 25, 1988 until full payment, x x
x.
are hereby REVERSED and SET ASIDE.
Instead, Helen Doria is hereby ordered to pay herein private
respondents the sum of P110,000.00 with legal interest
counted from March 25, 1988 until full payment, as damages
for the resulting loss to original plaintiff Pedro Calapine.
In all other respects, the appealed decision is hereby
affirmed.
SO ORDERED.

ELOY IMPERIAL vs. COURT OF APPEALS

FACTS: Leoncio Imperial was the registered owner of a
32,837-square meter parcel of land covered by Original
Certificate of Title No. 200, also known as Lot 45 of the
Cadastral Survey of Albay. Leoncio sold the said lot for P1.00
to his acknowledged natural son, petitioner herein, who then
acquired title over the land and proceeded to subdivide it
into several lots. Petitioner and private respondents admit
that despite the contracts designation as one of Absolute
Sale, the transaction was in fact a donation.
On July 28, 1953, or barely two years after the donation,
Leoncio filed a complaint for annulment of the said Deed of
Absolute Sale on the ground that he was deceived by
petitioner herein into signing the said document. The dispute,
however, was resolved through a compromise agreement.
Pending execution of the above judgment, Leoncio died,
leaving only two heirs --- the herein petitioner, who is his
acknowledged natural son, and an adopted son, Victor
Imperial. Victor moved for execution of judgment which was
granted.
Fifteen years thereafter, Victor died single and without issue,
survived only by his natural father, Ricardo Villalon, who was
a lessee of a portion of the disputed land. Four years hence,
Ricardo died, leaving as his only heirs his two children, Cesar
and Teresa Villalon.
Five years thereafter, Cesar and Teresa filed a complaint for
annulment of the donation with the Regional Trial Court of
Legazpi City. Petitioner moved to dismiss on the ground of res
judicata, by virtue of the compromise judgment rendered by
the Court of First Instance of Albay. The trial court granted
the motion to dismiss, but the Court of Appeals reversed the
trial courts order and remanded the case for further
proceedings.
Cesar and Teresa filed an amended complaint in the same
case for Annulment of Documents, Reconveyance and

Recovery of Possession with the Regional Trial Court of

Legazpi City, seeking the nullification of the Deed of Absolute
Sale affecting the above property, on grounds of fraud, deceit
and inofficiousness. It was alleged that petitioner caused
Leoncio to execute the donation by taking undue advantage
of the latters physical weakness and mental unfitness, and
that the conveyance of said property in favor of petitioner
impaired the legitime of Victor Imperial, their natural brother
and predecessor-in-interest.
The RTC held the donation to be inofficious and impairing the
legitime of Victor, on the basis of its finding that at the time
of Leoncios death, he left no property other than the 32,837square meter parcel of land which he had donated to
petitioner. The Court of Appeals affirmed the RTC Decision in
toto.
ISSUE:

IMPERIAL vs. COURT OF APPEALS

Petitioner seeks to set aside the Decision of the Court of
Appeals in C.A.-G.R. CV No. 31976[1], affirming the Decision
of the Regional Trial Court of Legazpi City[2], which rendered
inofficious the donation made by Leoncio Imperial in favor of
herein petitioner, to the extent that it impairs the legitime of
Victor Imperial, and ordering petitioner to convey to herein
private respondents, heirs of said Victor Imperial, that portion
of the donated land proportionate to Victor Imperials
legitime.
Leoncio Imperial was the registered owner of a 32,837square meter parcel of land covered by Original Certificate of
Title No. 200, also known as Lot 45 of the Cadastral Survey of
Albay. On July 7, 1951, Leoncio sold the said lot for P1.00 to
his acknowledged natural son, petitioner herein, who then
acquired title over the land and proceeded to subdivide it
into several lots. Petitioner and private respondents admit
that despite the contracts designation as one of Absolute
Sale, the transaction was in fact a donation.
On July 28, 1953, or barely two years after the donation,
Leoncio filed a complaint for annulment of the said Deed of
Absolute Sale, docketed as Civil Case No. 1177, in the then
Court of First Instance of Albay, on the ground that he was
deceived by petitioner herein into signing the said document.
The dispute, however, was resolved through a compromise
agreement, approved by the Court of First Instance of Albay
on November 3, 1961[3], under which terms: (1) Leoncio
recognized the legality and validity of the rights of petitioner
to the land donated; and (2) petitioner agreed to sell a
designated 1,000-square meter portion of the donated land,
and to deposit the proceeds thereof in a bank, for the
convenient disposal of Leoncio. In case of Leoncios death, it
was agreed that the balance of the deposit will be withdrawn
by petitioner to defray burial costs.
On January 8, 1962, and pending execution of the above
judgment, Leoncio died, leaving only two heirs --- the herein
petitioner, who is his acknowledged natural son, and an
adopted son, Victor Imperial. On March 8, 1962, Victor was

substituted in place of Leoncio in the above-mentioned case,

and it was he who moved for execution of judgment. On
March 15, 1962, the motion for execution was duly granted.
Fifteen years thereafter, or on July 26, 1977, Victor died
single and without issue, survived only by his natural father,
Ricardo Villalon, who was a lessee of a portion of the
disputed land. Four years hence, or on September 25, 1981,
Ricardo died, leaving as his only heirs his two children, Cesar
and Teresa Villalon.
Five years thereafter, or sometime in 1986, Cesar and Teresa
filed a complaint for annulment of the donation with the
Regional Trial Court of Legazpi City, docketed as Civil Case
No. 7646. Petitioner moved to dismiss on the ground of res
judicata, by virtue of the compromise judgment rendered by
the Court of First Instance of Albay. The trial court granted
the motion to dismiss, but the Court of Appeals reversed the
trial courts order and remanded the case for further
proceedings.
On October 18, 1989, Cesar and Teresa filed an amended
complaint in the same case, Civil Case No. 7646, for
Annulment of Documents, Reconveyance and Recovery of
Possession with the Regional Trial Court of Legazpi City,
seeking the nullification of the Deed of Absolute Sale
affecting the above property, on grounds of fraud, deceit and
inofficiousness. In the amended complaint, it was alleged
that petitioner caused Leoncio to execute the donation by
taking undue advantage of the latters physical weakness and
mental unfitness, and that the conveyance of said property in
favor of petitioner impaired the legitime of Victor Imperial,
their natural brother and predecessor-in-interest.[4]
In his Answer, petitioner: (1) alleged that Leoncio had
conveyed sufficient property to Victor to cover his legitime,
consisting of 563 hectares of agricultural land in Manito,
Albay; (2) reiterated the defense of res judicata, and (3)
raised the additional defenses of prescription and laches.
Plaintiff Cesar Villalon died on December 26, 1989, while the
case was pending in the Regional Trial Court, and was

substituted in this action by his sons, namely, Antonio,

Roberto, Augusto, Ricardo and Cesar, Jr., all surnamed
Villalon, and his widow, Esther H. Villalon.
The RTC held the donation to be inofficious and impairing the
legitime of Victor, on the basis of its finding that at the time
of Leoncios death, he left no property other than the 32,837square meter parcel of land which he had donated to
petitioner. The RTC went on further to state that petitioners
allegation that other properties existed and were inherited by
Victor was not substantiated by the evidence.[5]
The legitime of Victor was determined by the trial court in
this manner:
Considering that the property donated is 32,837 square
meters, one half of that or 16,418 square meters becomes
the free portion of Leoncio which could be absorbed in the
donation to defendant. The other half, which is also 16,418
square meters is where the legitime of the adopted son
Victor Imperial has to be taken.
The proportion of the legitime of the legitimate child
(including the adopted child) in relation to the acknowledged
natural child (defendant) is 10 is to 5[,] with the
acknowledged natural child getting of the legitime of the
legitimate (adopted) child, in accordance with Art. 895 of the
New Civil Code which provides:
The legitime of each of the acknowledged natural children
and each of the natural children by legal fiction shall consist
of one-half of the legitime of each of the legitimate children
or descendants.

that the original complaint having been filed in 1986, the

action has not yet prescribed. In addition, the trial court
regarded the defense of prescription as having been waived,
this not being one of the issues agreed upon at pre-trial.
Thus, the dispositive portion of the RTCs Decision of
December 13, 1990 reads:
WHEREFORE, premises considered, the Deed of Absolute Sale
otherwise known as Doc. No. 8; Book No. 14; Page No. 1;
Series of 1951 of the Notarial file of Pompeyo B. Calleja which
is considered a donation, is hereby reduced proportionately
insofar as it affected the legitime of the late Victor Imperial,
which share is inherited by the plaintiffs herein, to the extent
that plaintiffs are ordered to be given by defendant a portion
of 10,940 square meters thereof.
In order to avoid further conflict, the 10,940 share to be
given to plaintiffs should include the portion which they are
presently occupying, by virtue of the extended lease to their
father Ricardo Villalon, where the bungalow in question
stands.
The remaining portion to be given to plaintiffs may come
from any other portion that may be agreed upon by the
parties, otherwise, this court will appoint a commissioner to
undertake the partition.
The other 21,897 square meters should go to the defendant
as part of his legitime and by virtue of the reduced donation.
No pronouncement as to damages as they were not
sufficiently proved.

From the 16,418 square meters left (after the free portion has
been taken) plaintiffs are therefore entitled to 10,940 square
meters while defendant gets 5,420 square meters.[6]

SO ORDERED.[8]

The trial court likewise held that the applicable prescriptive

period is 30 years under Article 1141 of the Civil Code[7],
reckoned from March 15, 1962, when the writ of execution of
the compromise judgment in Civil Case 1177 was issued, and

Before us, petitioner questions the following findings of

respondent court: (1) that there was no res judicata, there
being no identity of parties and cause of action between the
instant case and Civil Case No. 1177; (2) that private

The Court of Appeals affirmed the RTC Decision in toto.

respondents had a right to question the donation; (3) that

private respondents action is barred by prescription, laches
and estoppel; and (4) that the donation was inofficious and
should be reduced.
It is an indispensable requirement in res judicata that there
be, between the first and second action, identity of parties, of
subject matter and of cause of action.[9] A perusal of the
records leads us to conclude that there is no identity of
parties and of cause of action as between Civil Case No. 1177
and Civil Case No. 7646. Civil Case No. 1177 was instituted
by Leoncio in his capacity as donor of the questioned
donation. While it is true that upon his death, Victor was
substituted as plaintiff of the action, such does not alter the
fact that Victors participation in the case was in
representation of the interests of the original plaintiff,
Leoncio. The purpose behind the rule on substitution of
parties is to ensure that the deceased party would continue
to be properly represented in the suit through the duly
appointed legal representative of the estate[10], or his heir,
as in this case, for which no court appointment is required.
[11] Petitioners argument, therefore, that there is substantial
identity between Leoncio and private respondents, being
heirs and successors-in-interest of Victor, is unavailing.
Moreover, Leoncios cause of action as donor of the property
was fraud, purportedly employed upon him by petitioner in
the execution of the donation. While the same circumstances
of fraud and deceit are alleged in private respondents
complaint, it also raises the additional ground of
inofficiousness of donation.
Contrary to petitioners contentions, inofficiousness of
donation does not, and could not, form part of Leoncios
cause of action in Civil Case No. 1177. Inofficiousness as a
cause of action may arise only upon the death of the donor,
as the value of the donation will then be contrasted with the
net value of the estate of the donor-deceased.[12]
Consequently, while in Civil Case No. 1177, Leoncio sought
the revocation in full of the donation on ground of fraud, the
instant case actually has two alternative causes of action.

First, for fraud and deceit, under the same circumstances as

alleged in Leoncios complaint, which seeks the annulment in
full of the donation, and which the trial court correctly
dismissed because the compromise agreement in Civil Case
No. 1177 served as a ratification and waiver on the part of
Leoncio of whatever defects in voluntariness and consent
may have been attendant in the making of the donation. The
second cause of action is the alleged inofficiousness of the
donation, resulting in the impairment of Victors legitime,
which seeks the annulment, not of the entire donation, but
only of that portion diminishing the legitime.[13] It is on the
basis of this second cause of action that private respondents
prevailed in the lower courts.
Petitioner next questions the right of private respondents to
contest the donation. Petitioner sources his argument from
Article 772 of the Civil Code, thus:
Only those who at the time of the donors death have a right
to the legitime and their heirs and successors in interest may
ask for the reduction of inofficious donations. xxx
As argued by petitioner, when Leoncio died on January 8,
1962, it was only Victor who was entitled to question the
donation. However, instead of filing an action to contest the
donation, Victor asked to be substituted as plaintiff in Civil
Case No. 1177 and even moved for execution of the
compromise judgment therein.
No renunciation of legitime may be presumed from the
foregoing acts. It must be remembered that at the time of
the substitution, the judgment approving the compromise
agreement has already been rendered. Victor merely
participated in the execution of the compromise judgment.
He was not a party to the compromise agreement.
More importantly, our law on succession does not
countenance tacit repudiation of inheritance. Rather, it
requires an express act on the part of the heir. Thus, under
Article 1051 of Civil Code:

The repudiation of an inheritance shall be made in a public or

authentic instrument, or by petition presented to the court
having jurisdiction over the testamentary or intestate
proceedings.
Thus, when Victor substituted Leoncio in Civil Case No. 1177
upon the latters death, his act of moving for execution of the
compromise judgment cannot be considered an act of
renunciation of his legitime. He was, therefore, not precluded
or estopped from subsequently seeking the reduction of the
donation, under Article 772. Nor are Victors heirs, upon his
death, precluded from doing so, as their right to do so is
expressly recognized under Article 772, and also in Article
1053:
If the heir should die without having accepted or repudiated
the inheritance, his right shall be transmitted to his heirs.
Be that as it may, we find merit in petitioners other
assignment of errors. Having ascertained this action as one
for reduction of an inofficious donation, we cannot sustain
the holding of both the trial court and the Court of Appeals
that the applicable prescriptive period is thirty years, under
Article 1141 of the Civil Code. The sense of both courts that
this case is a real action over an immovable allots undue
credence to private respondents description of their
complaint, as one
for Annulment of Documents,
Reconveyance and Recovery of Possession of Property, which
suggests the action to be, in part, a real action enforced by
those with claim of title over the disputed land.
Unfortunately for private respondents, a claim for legitime
does not amount to a claim of title. In the recent case of
Vizconde vs. Court of Appeals[14], we declared that what is
brought to collation is not the donated property itself, but the
value of the property at the time it was donated. The
rationale for this is that the donation is a real alienation
which conveys ownership upon its acceptance, hence, any
increase in value or any deterioration or loss thereof is for
the account of the heir or donee.[15]

What, then, is the prescriptive period for an action for

reduction of an inofficious donation? The Civil Code specifies
the following instances of reduction or revocation of
donations: (1) four years, in cases of subsequent birth,
appearance, recognition or adoption of a child;[16] (2) four
years, for non-compliance with conditions of the donation;
[17] and (3) at any time during the lifetime of the donor and
his relatives entitled to support, for failure of the donor to
reserve property for his or their support.[18] Interestingly,
donations as in the instant case,[19] the reduction of which
hinges upon the allegation of impairment of legitime, are not
controlled by a particular prescriptive period, for which
reason we must resort to the ordinary rules of prescription.
Under Article 1144 of the Civil Code, actions upon an
obligation created by law must be brought within ten years
from the time the right of action accrues. Thus, the ten-year
prescriptive period applies to the obligation to reduce
inofficious donations, required under Article 771 of the Civil
Code, to the extent that they impair the legitime of
compulsory heirs.
From when shall the ten-year period be reckoned? The case
of Mateo vs. Lagua, 29 SCRA 864, which involved the
reduction for inofficiousness of a donation propter nuptias,
recognized that the cause of action to enforce a legitime
accrues upon the death of the donor-decedent. Clearly so,
since it is only then that the net estate may be ascertained
and on which basis, the legitimes may be determined.
It took private respondents 24 years since the death of
Leoncio to initiate this case. The action, therefore, has long
prescribed.
As for the trial courts holding that the defense of prescription
had been waived, it not being one of the issues agreed upon
at pre-trial, suffice it to say that while the terms of the pretrial order bind the parties as to the matters to be taken up in
trial, it would be the height of injustice for us to adhere to
this technicality when the fact of prescription is manifest in
the pleadings of the parties, as well as the findings of fact of
the lower courts.[20]

A perusal of the factual antecedents reveals that not only has

prescription set in, private respondents are also guilty of
estoppel by laches. It may be recalled that Leoncio died on
January 8, 1962. Fifteen years later, Victor died, leaving as
his sole heir Ricardo Villalon, who also died four years later.
While Victor was alive, he gave no indication of any interest
to contest the donation of his deceased father. As we have
discussed earlier, the fact that he actively participated in
Civil Case No. 1177 did not amount to a renunciation of his
inheritance and does not preclude him from bringing an
action to claim his legitime. These are matters that Victor
could not possibly be unaware of, considering that he is a
lawyer[21]. Ricardo Villalon was even a lessee of a portion of
the donated property, and could have instituted the action as
sole heir of his natural son, or at the very least, raised the
matter of legitime by way of counterclaim in an ejectment
case[22] filed against him by petitioner in 1979. Neither does
it help private respondents cause that five years have
elapsed since the death of Ricardo in 1981 before they filed
their complaint with the RTC.
Estoppel by laches is the failure or neglect for an
unreasonable or unexplained length of time to do that which,
by exercising due diligence, could or should have been done
earlier, warranting a presumption that the person has
abandoned his right or declined to assert it.[23] We find the
necessity for the application of the principle of estoppel by
laches in this case, in order to avoid an injustice.
A final word on collation of donations. We observe that after
finding the donation to be inofficious because Leoncio had no
other property at the time of his death, the RTC computed
the legitime of Victor based on the area of the donated
property. Hence, in its dispositive portion, it awarded a

portion of the property to private respondents as Victors

legitime. This was upheld by the Court of Appeals.
Our rules of succession require that before any conclusion as
to the legal share due to a compulsory heir may be reached,
the following steps must be taken: (1) the net estate of the
decedent must be ascertained, by deducting all the payable
obligations and charges from the value of the property
owned by the deceased at the time of his death; (2) the
value of all donations subject to collation would be added to
it.[24]
Thus, it is the value of the property at the time it is donated,
and not the property itself, which is brought to collation.
Consequently, even when the donation is found inofficious
and reduced to the extent that it impaired Victors legitime,
private respondents will not receive a corresponding share in
the property donated. Thus, in this case where the collatable
property is an immovable, what may be received is: (1) an
equivalent, as much as possible, in property of the same
nature, class and quality;[25] (2) if such is impracticable, the
equivalent value of the impaired legitime in cash or
marketable securities;[26] or (3) in the absence of cash or
securities in the estate, so much of such other property as
may be necessary, to be sold in public auction.[27]
We believe this worth mentioning, even as we grant the
petition on grounds of prescription and laches.
ACCORDINGLY, the decision of the Court of Appeals in C.A.
G.R. CV No. 31976, affirming in toto the decision of the
Regional Trial Court in Civil Case No. 7646, is reversed and
set aside. No costs.
SO ORDERED.