Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-5671

August 24, 1910

BENITO DE LOS REYES, plaintiff-appellant,

vs.
VERONICA ALOJADO, defendant-appellee.
Ramon Diokno, for appellant.
No appearance for appellee.
TORRES, J.:
On or about January 22, 1905, Veronica Alojado received, as a loan, from Benito de los Reyes that
the sum P67 .60, for the purpose of paying a debt she owed to Olimpia Zaballa. It was agreed
between Alojado and Reyes that the debtor should remain as a servant in the house and in the
service of her creditor, without any renumeration whatever, until she should find some one who
would furnish her with the said sum where with to repeat the loan. The defendant, Veronica Alojado,
afterwards left the house of the plaintiff, on March 12, 1906, without having paid him her debt, nor
did she do so at any subsequent date, notwithstanding his demands. The plaintiff, therefore, on the
15th of march, 1906, filed suit in the court of the justice of the peace of Santa Rosa, La Laguna,
against Veronica Alojado to recover the said sum or, in a contrary case, to compel her to return to his
service. The trial having been had, the justice of the peace, on April 14, 1906, rendered judgment
whereby he sentenced the defendant to pay to the plaintiff the sum claimed and declared that, in
case the debtor should be insolvent, she should be obliged to fulfill the agreement between her and
the plaintiff. The costs of the trial were assessed against the defendant.
The defendant appealed from the said judgment to the Court of First Instance to which the plaintiff,
after the case had been docketed by the clerk of court, made a motion on May 4, 1906, requesting
that the appeal interposed by the defendant be disallowed, with the costs of both instances against
her. The grounds alleged in support of this motion. were that the appeal had been filed on the sixth
day following that when judgment was rendered in the trial, on April 14th, and that it, therefore, did
not come within the period of the five days prescribed by section 76 of the Code of Civil Procedure,
as proven by the certificate issued by the justice of the peace of Santa Rosa. The Court of First
Instance, however, by order of July 16, 1906, overruled the motion of the plaintiff-appellee, for the
reasons therein stated, namely, that the defendant was not notified of the judgment rendered in the
case on April 14th of that year until the 16th of the same month, and the appeal having been filed
four days later, on the 20th, it could having seen that the five days specified by section 76 of the
Code of Civil Procedure had not expired. The plaintiff was advised to reproduce his complaint within
ten days, in order that due procedure might he had thereupon.

The plaintiff took exception to the aforementioned order and at the same time reproduced the
complaint he had filed in the court of the justice of the peace, in which, after relating to the facts
hereinbefore stated, added that the defendant, besides the sum above-mentioned, had also received
from the plaintiff, under the same conditions, various small amounts between the dates of January
22, 1905, and March 10, 1906, aggregating altogether P11.97, and that they had not been repaid to
him. He therefore asked that judgment be rendered sentencing the defendant to comply with the
said contract and to pay to the plaintiff the sums referred to, amounting in all to P79.57, and that until
this amount should have been in paid, the defendant should remain gratuitously in the service of
plaintiff's household, and that she should pay the costs of the trial.
The defendant, in her written answer of August 15, 1906, to the aforesaid complaint, denied the
allegations contained in paragraphs 1 and 2 of the complaint and alleged that, although she had left
the plaintiff's service, it was because the latter had paid her no sum whatever for the services she
had rendered in his house. The defendant likewise denied the conditions expressed in paragraph 4
of the complaint, averring that the effects purchased, to the amount of P11.97, were in the
possession of the plaintiff, who refused to deliver them to her. She therefore asked that she be
absolved from the complaint and that the plaintiff be absolved from the complaint the wages due her
for the services she had rendered.
The case came to trial on October 19, 1906, and, after the production of testimony by both parties,
the judge, on November 21st of the same year, rendered judgment absolving the defendant from the
complain, with the costs against the plaintiff, and sentencing the latter to pay to the former the sum
of P2.43, the balance found to exist between the defendant's debt of P79.57 and the wages due her
by the plaintiff, which amounted to P82. The plaintiff, on the 6th of December, filed a written
exception to the judgment aforesaid through the regular channels, and moved for a new trial on the
ground that the findings of fact set forth in the judgment were manifestly contrary to the weight of the
evidence. This motion was overruled on the 17th of the same month, to which exception was taken
by the appellant, who afterwards filed the proper bill of exceptions, which was approved, certified,
and forwarded to the clerk of this court.
The present suit, initiated in a justice of the peace court and appealed to the Court of First Instance
of La Laguna at a time prior to the enactment of Act No. 1627, which went into effect on July 1, 1907,
which limited to two instances the procedure to be observed in verbal actions, concerns the
collection of certain sum received as a loan by the defendant from the plaintiff, and of the wages
earned by the former for services rendered as a servant in the said plaintiff's house.
Notwithstanding the denial of the defendant, it is a fact clearly proven, as found in the judgment
appealed from, that the plaintiff did deliver to Hermenegildo de los Santos the sum of P67.60 to pay
a debt was paid by De los Santos with the knowledge and in behalf of the said defendant who, of her
free will, entered the service of the plaintiff and promised to pay him as soon as she should find the
money wherewith to do so.
The duty to pay the said sum, as well as that of P11.97 delivered to the defendant in small amounts
during the time that she was in the plaintiff's house, is unquestionable, inasmuch as it is a positive
debt demandable of the defendant by her creditor. (Arts. 1754, 1170, Civil Code.) However, the
reason alleged by the plaintiff as a basis for the loan is untenable, to wit, that the defendant was

obliged to render service in his house as a servant without remuneration whatever and to remain
therein so long as she had not paid her debt, inasmuch as this condition is contrary to law and
morality. (Art. 1255, Civil Code.)
Domestic services are always to be remunerated, and no agreement may subsist in law in which it is
stipulated that any domestic service shall be absolutely gratuitous, unless it be admitted that slavery
may be established in this country through a covenant entered into between the interested parties.
Articles 1583, 1584, and 1585 of the Civil Code prescribe rules governing the hiring of services of
domestics servants, the conditions of such hire, the term during which the service may rendered and
the wages that accrue to the servant, also the duties of the latter and of the master. The first of the
articles cited provides that a hiring for life by either of the contracting parties is void, and, according
to the last of three articles just mentioned, besides what is prescribed in the preceding articles with
regard to masters and servants, the provisions of special laws and local ordinances shall be
observed.
During the regime of the former sovereignty, the police regulations governing domestic service, of
the date of September 9, 1848, were in force, article 19 of which it is ordered that all usurious
conduct toward the servants and employees of every class is prohibited, and the master who, under
pretext of an advance of pay or of having paid the debts or the taxes of his servant, shall have
succeeded in retaining the latter in his service at his house, shall be compelled to pay to such
servant all arrears due him and any damages he may have occasioned him, and the master shall
also be fined.
The aforementioned article 1585 of the Civil Code undoubtedly refers to the provisions of the
regulations just cited.
When legal regulations prohibit even a usurious contract and all abuses prejudicial to subordinates
and servant, in connection with their salaries and wages, it will be understood at once that the
compact whereby service rendered by a domestic servant in the house of any inhabitant of this
country is to be gratuitous, is in all respects reprehensible and censurable; and consequently, the
contention of the plaintiff, that until the defendant shall have paid him her debt she must serve him in
his house gratuitously is absolutely inadmissible.
The trial record discloses no legal reason for the rejection of the findings of fact and of law contained
in the judgment appealed from, nor for an allowance of the errors attributed appealed from, nor for
an allowance of the errors attributed thereto; on the contrary, the reasons hereinabove stated show
the propriety of the said judgment.
For the foregoing reasons, and accepting those set forth in the judgment appealed from, it is proper,
in our opinion, to affirm and we hereby affirm the said judgment, with the costs against the appellant.
Arellano, C. J., Johnson, Moreland and Trent, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-61311 September 2l, 1987
FELICIDAD VILLANUEVA, FERNANDO CAISIP, ANTONIO LIANG, FELINA MIRANDA, RICARDO
PUNO, FLORENCIO LAXA, and RENE OCAMPO, petitioners,
vs.
HON. MARIANO CASTAEDA, JR., Presiding Judge of the Court of First Instance of
Pampanga, Branch III, VICENTE A. MACALINO, Officer-in-Charge, Office of the Mayor, San
Fernando, Pampanga, respondents.

CRUZ, J.:
There is in the vicinity of the public market of San Fernando, Pampanga, along Mercado Street, a
strip of land measuring 12 by 77 meters on which stands a conglomeration of vendors stalls together
forming what is commonly known as a talipapa. This is the subject of the herein petition. The
petitioners claim they have a right to remain in and conduct business in this area by virtue of a
previous authorization granted to them by the municipal government. The respondents deny this and
justify the demolition of their stalls as illegal constructions on public property. At the petitioners'
behest, we have issued a temporary restraining order to preserve the status quobetween the parties
pending our decision. 1 Now we shall rule on the merits.
This dispute goes back to November 7, 1961, when the municipal council of San Fernando adopted
Resolution No. 218 authorizing some 24 members of the Fernandino United Merchants and Traders
Association to construct permanent stags and sell in the above-mentioned place. 2 The action was
protested on November 10, 1961, in Civil Case No. 2040, where the Court of First Instance of Pampanga,
Branch 2, issued a writ of preliminary injunction that prevented the defendants from constructing the said
stalls until final resolution of the controversy. 3 On January 18, 1964, while this case was pending, the
municipal council of San Fernando adopted Resolution G.R. No. 29, which declared the subject area as
"the parking place and as the public plaza of the municipality, 4 thereby impliedly revoking Resolution No.
218, series of 1961. Four years later, on November 2, 1968, Judge Andres C. Aguilar decided the
aforesaid case and held that the land occupied by the petitioners, being public in nature, was beyond the
commerce of man and therefore could not be the subject of private occupancy. 5 The writ of preliminary
injunction was made permanent. 6
The decision was apparently not enforced, for the petitioners were not evicted from the place; in fact,
according to then they and the 128 other persons were in 1971 assigned specific areas or space
allotments therein for which they paid daily fees to the municipal government. 7 The problem appears
to have festered for some more years under a presumably uneasy truce among the protagonists, none of

whom made any move, for some reason that does not appear in the record. Then, on January 12, 1982,
the Association of Concerned Citizens and Consumers of San Fernando filed a petition for the immediate
implementation of Resolution No. 29, to restore the subject property "to its original and customary use as
a public plaza. 8

Acting thereon after an investigation conducted by the municipal attorney, 9 respondent Vicente A.
Macalino, as officer-in-charge of the office of the mayor of San Fernando, issued on June 14, 1982, a
resolution requiring the municipal treasurer and the municipal engineer to demolish the stalls in the
subject place beginning July 1, 1982. 10 The reaction of the petitioners was to file a petition for prohibition with the Court of First
Instance of Pampanga, docketed as Civil Case No. 6470, on June 26, 1982. The respondent judge denied the petition on July 19,
1982, 11 and the motion for reconsideration on August 5, 1982, 12 prompting the petitioners to come to this Court on certiorari to challenge
his decision. 13

As required, respondent Macalino filed his comment 14 on the petition, and the petitioners countered with their
reply. 15 In compliance with our resolution of February 2, 1983, the petitioners submitted their memorandum 16 and respondent Macalino,
for his part, asked that his comment be considered his memorandum. 17 On July 28, 1986, the new officer-in-charge of the office of the
mayor of San Fernando, Paterno S. Guevarra, was impleaded in lieu of Virgilio Sanchez, who had himself earlier replaced the original
respondent Macalino. 18

After considering the issues and the arguments raised by the parties in their respective pleadings,
we rule for the respondents. The petition must be dismissed.
There is no question that the place occupied by the petitioners and from which they are sought to be
evicted is a public plaza, as found by the trial court in Civil Case No. 2040. This finding was made
after consideration of the antecedent facts as especially established by the testimony of former San
Fernando Mayor Rodolfo Hizon, who later became governor of Pampanga, that the National
Planning Commission had reserved the area for a public plaza as early as 1951. This intention was
reiterated in 1964 through the adoption of Resolution No. 29. 19
It does not appear that the decision in this case was appealed or has been reversed. In Civil Case
G.R. No. 6740, which is the subject of this petition, the respondent judge saw no reason to disturb
the finding in Civil Case No. 2040 and indeed used it as a basis for his own decision sustaining the
questioned order. 20
The basic contention of the petitioners is that the disputed area is under lease to them by virtue of
contracts they had entered into with the municipal government, first in 1961 insofar as the original
occupants were concerned, and later with them and the other petitioners by virtue of the space
allocations made in their favor in 1971 for which they saw they are paying daily fees. 21 The municipal
government has denied making such agreements. In any case, they argue, since the fees were collected
daily, the leases, assuming their validity, could be terminated at will, or any day, as the claimed rentals
indicated that the period of the leases was from day to day. 22
The parties belabor this argument needlessly.
A public plaza is beyond the commerce of man and so cannot be the subject of lease or any other
contractual undertaking. This is elementary. Indeed, this point was settled as early as in Municipality
of Cavite vs. Rojas, 23decided in 1915, where the Court declared as null and void the lease of a public
plaza of the said municipality in favor of a private person.

Justice Torres said in that case:

According to article 344 of the Civil Code: "Property for public use in provinces and in
towns comprises the provincial and town roads, the squares, streets, fountains, and
public waters, the promenades, and public works of general service supported by
said towns or provinces.
The said Plaza Soledad being a promenade for public use, the municipal council of
Cavite could not in 1907 withdraw or exclude from public use a portion thereof in
order to lease it for the sole benefit of the defendant Hilaria Rojas. In leasing a
portion of said plaza or public place to the defendant for private use the plaintiff
municipality exceeded its authority in the exercise of its powers by executing a
contract over a thing of which it could not dispose, nor is it empowered so to do.
The Civil Code, article 1271, prescribes that everything which is not outside the
commerce of man may be the object of a contract, and plazas and streets are
outside of this commerce, as was decided by the supreme court of Spain in its
decision of February 12, 1895, which says: "communal things that cannot be sold
because they are by their very nature outside of commerce are those for public use,
such as the plazas, streets, common lands, rivers, fountains, etc."
Therefore, it must be concluded that the contract, Exhibit C, whereby the municipality
of Cavite leased to Hilaria Rojas a portion of the Plaza Soledad is null and void and
of no force or effect, because it is contrary to the law and the thing leased cannot be
the object of a was held that the City of contract.
In Muyot vs. de la Fuente, 24 it was held that the City of Manila could not lease a portion of a public
sidewalk on Plaza Sta. Cruz, being likewise beyond the commerce of man.
Echoing Rojas, the decision said:
Appellants claim that they had obtained permit from the present of the City of Manila,
to connect booths Nos. 1 and 2, along the premises in question, and for the use of
spaces where the booths were constructed, they had paid and continued paying the
corresponding rentals. Granting this claim to be true, one should not entertain any
doubt that such permit was not legal, because the City of Manila does not have any
power or authority at all to lease a portion of a public sidewalk. The sidewalk in
question, forming part of the public plaza of Sta. Cruz, could not be a proper subject
matter of the contract, as it was not within the commerce of man (Article 1347, new
Civil Code, and article 1271, old Civil Code). Any contract entered into by the City of
Manila in connection with the sidewalk, is ipso facto null and ultra vires. (Municipality
of Cavite vs. Roxas, et a1, 30 Phil. 603.) The sidewalk in question was intended for
and was used by the public, in going from one place to another. "The streets and
public places of the city shall be kept free and clear for the use of the public, and the
sidewalks and crossings for the pedestrians, and the same shall only be used or
occupied for other purpose as provided by ordinance or regulation; ..." (Sec. 1119,

Revised Ordinances of the City of Manila.) The booths in question served as fruit
stands for their owners and often, if not always, blocked the fire passage of
pedestrians who had to take the plaza itself which used to be clogged with vehicular
traffic.
Exactly in point is Espiritu vs. Municipal Council of Pozorrubio, 25 where the Supreme Court declared:
There is absolutely no question that the town plaza cannot be used for the
construction of market stalls, specially of residences, and that such structures
constitute a nuisance subject to abatement according to law. Town plazas are
properties of public dominion, to be devoted to public use and to be made available
to the public in general They are outside the common of man and cannot be
disposed of or even leased by the municipality to private parties.
Applying this well-settled doctrine, we rule that the petitioners had no right in the first place to occupy
the disputed premises and cannot insist in remaining there now on the strength of their alleged lease
contracts. They should have realized and accepted this earlier, considering that even before Civil
Case No. 2040 was decided, the municipalcouncil of San Fernando had already adopted Resolution
No. 29, series of 1964, declaring the area as the parking place and public plaza of the municipality.
It is the decision in Civil Case No. 2040 and the said resolution of the municipal council of San
Fernando that respondent Macalino was seeking to enforce when he ordered the demolition of the
stags constructed in the disputed area. As officer-in-charge of the office of the mayor, he had the
duty to clear the area and restore it to its intended use as a parking place and public plaza of the
municipality of San Fernando, conformably to the aforementioned orders from the court and the
council. It is, therefore, not correct to say that he had acted without authority or taken the law into his
hands in issuing his order.
Neither can it be said that he acted whimsically in exercising his authority for it has been established
that he directed the demolition of the stalls only after, upon his instructions, the municipal attorney
had conducted an investigation, to look into the complaint filed by the Association of Concerned
Citizens and Consumers of San Fernando. 26 There is evidence that the petitioners were notified of this
hearing, 27which they chose to disregard. Photographs of the disputed area, 28 which does look congested
and ugly, show that the complaint was valid and that the area really needed to be cleared, as
recommended by the municipal attorney.
The Court observes that even without such investigation and recommendation, the respondent
mayor was justified in ordering the area cleared on the strength alone of its status as a public plaza
as declared by the judicial and legislative authorities. In calling first for the investigation (which the
petitioner saw fit to boycott), he was just scrupulously paying deference to the requirements of due
process, to remove an taint of arbitrariness in the action he was caged upon to take.
Since the occupation of the place in question in 1961 by the original 24 stallholders (whose number
later ballooned to almost 200), it has deteriorated increasingly to the great prejudice of the
community in general. The proliferation of stags therein, most of them makeshift and of flammable
materials, has converted it into a veritable fire trap, which, added to the fact that it obstructs access

to and from the public market itself, has seriously endangered public safety. The filthy condition of
the talipapa, where fish and other wet items are sold, has aggravated health and sanitation
problems, besides pervading the place with a foul odor that has spread into the surrounding areas.
The entire place is unsightly, to the dismay and embarrassment of the inhabitants, who want it
converted into a showcase of the town of which they can all be proud. The vendors in
the talipapa have also spilled into the street and obstruct the flow of traffic, thereby impairing the
convenience of motorists and pedestrians alike. The regular stallholders in the public market, who
pay substantial rentals to the municipality, are deprived of a sizable volume of business from
prospective customers who are intercepted by the talipapa vendors before they can reach the
market proper. On top of all these, the people are denied the proper use of the place as a public
plaza, where they may spend their leisure in a relaxed and even beautiful environment and civic and
other communal activities of the town can be held.
The problems caused by the usurpation of the place by the petitioners are covered by the police
power as delegated to the municipality under the general welfare clause. 29 This authorizes the
municipal council "to enact such ordinances and make such regulations, not repugnant to law, as may be
necessary to carry into effect and discharge the powers and duties conferred upon it by law and such as
shall seem necessary and proper to provide for the health and safety, promote the prosperity, improve the
morals, peace, good order, comfort, and convenience of the municipality and the inhabitants thereof, and
for the protection of property therein." This authority was validly exercised in this casethrough the
adoption of Resolution No. 29, series of 1964, by the municipal council of San Fernando.
Even assuming a valid lease of the property in dispute, the resolution could have effectively
terminated the agreement for it is settled that the police power cannot be surrendered or bargained
away through the medium of a contract. 30 In fact, every contract affecting the public interest suffers a
congenital infirmity in that it contains an implied reservation of the police power as a postulate of the
existing legal order. 31 This power can be activated at any time to change the provisions of the contract, or
even abrogate it entirely, for the promotion or protection of the general welfare. Such an act will not
militate against the impairment clause, which is subject to and limited by the paramount police power. 32
We hold that the respondent judge did not commit grave abuse of discretion in denying the petition
for prohibition. On the contrary, he acted correctly in sustaining the right and responsibility of the
mayor to evict the petitioners from the disputed area and clear it of an the structures illegally
constructed therein.
The Court feels that it would have been far more amiable if the petitioners themselves, recognizing
their own civic duty, had at the outset desisted from their original stance and withdrawn in good
grace from the disputed area to permit its peaceful restoration as a public plaza and parking place
for the benefit of the whole municipality. They owned this little sacrifice to the community in general
which has suffered all these many years because of their intransigence. Regrettably, they have
refused to recognize that in the truly democratic society, the interests of the few should yield to those
of the greater number in deference to the principles that the welfare of the people is the supreme law
and overriding purpose. We do not see any altruism here. The traditional ties of sharing are absent
here. What we find, sad to say, is a cynical disdaining of the spirit of "bayanihan," a selfish rejection
of the cordial virtues of "pakikisama " and "pagbibigayan" which are the hallmarks of our people.

WHEREFORE, the petition is DISMISSED. The decision dated July 19, 1982, and the order-dated
August 5, 1982, are AFFIRMED. The temporary restraining order dated August 9, 1982, is LIFTED.
This decision is immediately executory. Costs against the petitioners.
SO ORDERED.
Teehankee, C.J., Narvasa and Paras, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-47806

April 14, 1941

LEONCIO GABRIEL, petitioner,

vs.
MONTE DE PIEDAD Y CAJA DE AHARROS and THE COURT OF APPEALS, respondents.
Vicente J. Francisco and Rody M. Jalandoni for petitioner.
Cavanna, Jazmines and Tianco for respondent.
LAUREL, J.:

The herein petitioner was employed as appraiser of jewels in the pawnshop of the Monte de Piedad
from 1913 up to May, 1933. On December 13, 1932, he executed a chattel mortgage to secure the
payment of the deficiencies which resulted from his erroneous appraisal of the jewels pawned to the
appellee, amounting to P14,679.07, with six per cent (6%) interest from said date. In this chattel
mortgage, the appellant promised to pay to the appellee the sum of P300 a month until the sum of
P14,679.07, with interest is fully paid. The document was registered on December 22, 1932
(statement, decision of Court of Appeals). To recover the aforementioned sum less what had been
paid, amounting to P3,333.25 or the balance of P11,345.75, and in case of default to effectuate the
chattel mortgage, an action was instituted against the petitioner by the respondent Monte de Piedad
in the Court of First Instance of Manila (civil case No. 50847). The petitioner answered, denying
generally and specifically all the specifications therein, and also denied under oath the genuiness of
the execution of the alleged chattel mortgage attached thereto. By way of special defense, he
alleged (1) that the chattel mortgage was a part of a scheme on the part of the management of the
Monte de Piedad to cover up supposed losses incurred in its pawnshop department; (2) that a
criminal action had been instituted at the instance of the plaintiff against him wherein said chattel
mortgage was presented by the prosecution with regard his supposed responsibility as expert
appraiser of jewels of the plaintiff entity but he was therein acquitted; and (3) that said acquittal
constituted a bar to the civil case. By way of cross-complaint, the petitioner alleged (1) that the
chattel mortgage was entered into by E. Marco for and in behalf of the Monte de Piedad without
being duly authorized to do so by the latter; (2) that the defendant was induced, through false
representation, to sign said chattel mortgage against his will; (3) that the chattel mortgage was
based upon all non-existing subject matter and non-existing consideration; and (4) that the chattel
mortgage was null and void ab initio. By way of counterclaim, the petitioner alleged (1) that the
payments made by for him the account of the chattel mortgage amounting to P3,333.25 were made
through deceit and without his consent and consisted of P300 monthly deductions from his salary,
printing job for plaintiff done by him in his printing press, and reimbursement made from the pocket
of E. Marco; (2) that he has received P356.25 a month as expert appraiser of the plaintiff and that he
was separated arbitrarily at the end of the month of May 1933, from notice and plaintiff failed to pay
him his salary for the month of May, 1933 and the month of June, 1933, in accordance with law; and
(3) that due to the malicious and systematic prosecution brought in criminal case No. 49078 and in
the present case, he suffered damages and losses both materially and in his reputation in the
amount of at least P15,000. Wherefore, petitioner, among others, prayed that the Monte de Piedad
be ordered to return the unlawful deductions from his monthly remuneration, to pay his salary for the
months of May and June, 1933, and damages and losses he suffered amounting to P15,000.
The lower court rendered judgment in favor of the Monte de Piedad against the herein petitioner.
Petitioner brought the case on appeal to the Court of Appeals, which affirmed the judgment of the
lower court in a decision rendered May 29, 1940. Hence, this petition for review by certiorari.
Petitioner contends that the provisions of the chattel mortgage contract by which he guaranteed to
pay the deficiencies amounting of P14,679.07 are contrary to law, morals and public policy, and
hence, the chattel mortgage contract is ineffective and the principal obligation secured by it is void. A
contract is to be judge by its character, and courts will look to the substances and not to the mere
form of the transaction. The freedom of contract is both a constitutional and statutory right and to
uphold this right, courts should move with all the necessary caution and prudence in holding
contracts void. (People vs. Pomar, 46 Phil., 440; Ferrazzini vs. Gsell, 34 Phil., 697.) At any rate,

courts should not rashly extend the rule which holds that a contract is void as against public policy.
The term "public policy" is vague and uncertain in meaning, floating and changeable in connotation.
It may be said, however, that, in general, a contract which is neither prohibited by law nor
condemned by judicial decision, nor contrary to public morals, contravenes no public policy. In the
absence of express legislation or constitutional prohibition, a court, in order to declare a contract
void as against public policy, must find that the contract as to the consideration or thing to be done,
has a tendency to injure the public, is against the public good, or contravenes some established
interests of society, or is inconsistent with sound policy and good morals, or tends clearly to
undermine the security of individual rights, whether of personal liability or of private property.
Examining the contract at bar, we are of the opinion that it does not in anyway militate against the
public good. Neither does it contravene the policy of the law nor the established interests of society.
Petitioner also contends that the chattel mortgage in question is void because it lacks consideration.
A consideration, in the legal sense of the word, is some right, interest, benefit, or advantage
conferred upon the promisor, to which he is otherwise not lawfully entitled, or any detriment,
prejudice, loss, or disadvantage suffered or undertaken by the promisee other than to such as he is
at the time of consent bound to suffer. We think that there is sufficient consideration in this contract,
for accounting to the Court of Appeals, "it has been satisfactorily established that it was executed
voluntarily by the latter to guarantee the deficiencies resulting from his erroneous appraisals of the
jewels." A preexisting admitted liability is a good consideration for a promise. The fact that the
bargain is a hard one will not deprived it of validity. The exception to this rule in modern legislation is
where the inadequacy is so gross as to amount to fraud, oppression or undue influence, or when
statutes require the consideration to be adequate. We are not convinced that the instant case falls
within the exception.
Another objection raised is that the requirement of section 5 of Act No. 1508 has not been complied
with. We think that there is substantial compliance with the requirements of the Chattel Mortgage
Law on this point. The wording of the affidavit under discussion, as it appears from the record, is
almost in the same language of the statute. Likewise, it appears that it was signed by E. Marco, who
was Director-General of the Monte de Piedad at the time of the execution of the contract of chattel
mortgage. The Court of Appeals found that "the contention that director Marco had no authority to
enter into the agreement is without merit. It appears that there was confirmation of Exhibit A by
the Consejo de Administracion of the Monte de Piedad." Statutory requirements as to forms or words
of the affidavits in chattel mortgage contracts must be substantially, but need not be literally,
complied with.
The second assignment of error made by the petitioner is that the Court of Appeals erred in not
holding that the acquittal of the petitioner in criminal case No. 49078 of the Court of First Instance of
Manila bars the action to enforce any civil liability under said chattel mortgage. We do not need to
dwell at length on this assignment of error, for we find no reason for distributing the conclusion
reached by the Court of Appeals on this point:
The appellant claims that his acquittal in criminal case No. 49078 of the Court of First
Instance of Manila is a bar to the institution of the present case. The evidence of record does
not bear out this contention. There is no identity of subject matter between the two cases;
nor is the instant case defendant upon the said criminal action. We agree with the trial court

that the transactions involved in this case are different from those involved in criminal case
No. 49078. The court's finding that the transactions involved in the case at the bar
commenced in August, 1932, can not be considered erroneous simply because Exhibit F-32
of the plaintiff is allegedly dated August 20, 1931. Exhibit F-22 can not be given any
probative value, it was undated during the hearing of the case.
We do not find it necessary to discuss the last assignment of error.
The petition is hereby dismissed and the judgment sought to be reviewed is affirmed, with costs
against the petitioner. So ordered.

SECOND DIVISION
[G.R. No. 133643. June 6, 2002]

RITA SARMING, RUFINO SARMING, MANUEL SARMING, LEONORA

VDA. DE LOY, ERLINDA DARMING, NICANDRA SARMING,
MANSUETA SARMING, ARTURO CORSAME, FELY CORSAME,
FEDERICO CORSAME, ISABELITA CORSAME, NORMA
CORSAME, CESAR CORSAME, RUDY CORSAME, ROBERTA
CORSAME, ARTEMIO CORSAME, ELPIDIO CORSAME,
ENRIQUITA
CORSAME,
and
GUADALUPE
CORSAME
TAN, petitioners, vs. CRESENCIO
DY,
LUDIVINA
DY-CHAN,
TRINIDAD FLORES, LUISA FLORES, SATURNINA ORGANISTA,
REMEDIOS
ORGANISTA,
OFELIA ORGANISTA,
LYDIA
ORGANISTA, ZOSIMO ORGANISTA, DOMISIANO FLORES,
FLORITA FLORES, EDUARDO FLORES, BENIGNA FLORES,
ANGELINA FLORES, MARCIAL FLORES, and MARIO
FLORES, respondents.
DECISION
QUISUMBING, J.:

This petition for review assails the decision[1] dated September 23, 1997 of the Court of
Appeals in CA-G.R. CV No. 39401, which affirmed the decision [2] of the Regional Trial Court,
Branch 41 in Negros Oriental, Dumaguete City and the resolution [3] dated April 21, 1998 denying
petitioners motion for reconsideration.

The facts as culled from records are as follows:

Petitioners are the successors-in-interest of original defendant Silveria Flores, while
respondents Cresencio Dy and Ludivina Dy-Chan are the successors-in-interest of the original
plaintiff Alejandra Delfino, the buyer of one of the lots subject of this case. They were joined in
this petition by the successors-in-interest of Isabel, Juan, Hilario, Ruperto, Tomasa, and Luisa
and Trinidad themselves, all surnamed Flores, who were also the original plaintiffs in the lower
court. They are the descendants of Venancio[4] and Jose[5], the brothers of the original defendant
Silveria Flores.
In their complaint for reformation of instrument against Silveria Flores, the original
plaintiffs alleged that they, with the exception of Alejandra Delfino, are the heirs of Valentina
Unto Flores, who owned, among others, Lot 5734, covered by OCT 4918-A; and Lot 4163,
covered by OCT 3129-A, both located at Dumaguete City.
After the death of Valentina Unto Flores, her three children, namely: Jose, Venancio, and
Silveria, took possession of Lot 5734 with each occupying a one-third portion. Upon their death,
their children and grandchildren took possession of their respective shares. The other parcel, Lot
4163 which is solely registered under the name of Silveria, was sub-divided between Silveria and
Jose. Two rows of coconut trees planted in the middle of this lot serves as boundary line.
In January 1956, Luisa, Trinidad, Ruperto and Tomasa, grandchildren of Jose and now
owners of one-half of Lot 4163, entered into a contract with plaintiff Alejandra Delfino, for the
sale of one-half share of Lot 4163 after offering the same to their co-owner, Silveria, who
declined for lack of money. Silveria did not object to the sale of said portion to Alejandra
Delfino.
Before preparing the document of sale, the late Atty. Deogracias Pinili, Alejandras lawyer,
called Silveria and the heirs of Venancio to a conference where Silveria declared that she owned
half of the lot while the other half belonged to the vendors; and that she was selling her three
coconut trees found in the half portion offered to Alejandra Delfino for P15. When Pinili asked
for the title of the land, Silveria Flores, through her daughter, Cristita Corsame, delivered
Original Certificate of Title No. 4918-A, covering Lot No. 5734, and not the correct title
covering Lot 4163.At that time, the parties knew the location of Lot 4163 but not the OCT
Number corresponding to said lot.
Believing that OCT No. 4918-A was the correct title corresponding to Lot 4163, Pinili
prepared a notarized Settlement of Estate and Sale (hereinafter deed) duly signed by the parties
on January 19, 1956. As a result, OCT No. 4918-A was cancelled and in lieu thereof, TCT No.
5078 was issued in the names of Silveria Flores and Alejandra Delfino, with one-half share

each.Silveria Flores was present during the preparation and signing of the deed and she stated
that the title presented covered Lot No. 4163.
Alejandra Delfino immediately took possession and introduced improvements on the
purchased lot, which was actually one-half of Lot 4163 instead of Lot 5734 as designated in the
deed.
Two years later, when Alejandra Delfino purchased the adjoining portion of the lot she had
been occupying, she discovered that what was designated in the deed, Lot 5734, was the wrong
lot. She sought the assistance of Pinili who approached Silveria and together they inquired from
the Registry of Deeds about the status of Lot 4163. They found out that OCT No. 3129-A
covering Lot 4163 was still on file. Alejandra Delfino paid the necessary fees so that the title to
Lot 4163 could be released to Silveria Flores, who promised to turn it over to Pinili for the
reformation of the deed of sale. However, despite repeated demands, Silveria did not do so,
prompting Alejandra and the vendors to file a complaint against Silveria for reformation of the
deed of sale with damages before the Regional Trial Court of Negros Oriental, Branch 41,
docketed as Civil Case No. 3457.
In her answer, Silveria Flores claimed that she was the sole owner of Lot 4163 as shown by
OCT No. 3129-A and consequently, respondents had no right to sell the lot. According to her, the
contract of sale clearly stated that the property being sold was Lot 5734, not Lot 4163. She also
claimed that respondents illegally took possession of one-half of Lot 4163. She thus prayed that
she be declared the sole owner of Lot 4163 and be immediately placed in possession thereof. She
also asked for compensatory, moral, and exemplary damages and attorneys fees.
The case lasted for several years in the trial court due to several substitutions of parties. The
complaint was amended several times. Moreover, the records had to be reconstituted when the
building where they were kept was razed by fire. But, earnest efforts for the parties to amicably
settle the matters among themselves were made by the trial court to no avail.
On September 29, 1992, the trial court found in favor of herein respondents, who were the
plaintiffs below, decreeing as follows:

WHEREFORE, this Court finds the preponderance of evidence in favor of the

plaintiffs and veritably against the defendants and, as such, renders judgment
accordingly, thereby ORDERING the defendants, the heirs of the deceased-defendant
SILVERIA FLORES and her successors-in-interest the following:
1) To enter into the reformation of the subject contract or execute a mutual
conveyance of sale, by making the one-half (1/2) eastern portion of Lot 4163, the

subject of the document of sale, in favor of plaintiff, the late Alejandra Delfino or her
heirs and/or successors-in-interest;
2) To sign a document ceding to the heirs of the heirs of Maxima Flores and Venancio
Flores the excess of her one-third (1/3) share; and further ordering the heirs of the late
Alejandra Delfino to correspondingly sign a document for the return of the one-half
(1/2) portion of Lot 5734 to the original registered owners, in exchange thereby;
3) To pay to the heirs of the late plaintiff Alejandra Delfino, the sum of P5,000.00 as
actual damages and the sum of P10,000.00 as moral damages;
4) To pay P2,000.00 as attorneys fees plus the costs of this suit.
SO ORDERED.[6]
According to the trial court, the claims of herein respondents were anchored on valid
grounds. It noted that Alejandra had been occupying one-half portion of Lot 4163 since 1956 and
it was the one pointed to her by the vendors. Citing the case of Atilano vs. Atilano[7], it ruled that
when one sells or buys real property, he sells or buys the said property as is shown to her and as
he sees it, at its actual setting and by its physical metes and bounds, not by the mere lot number
assigned to it in the certificate of title. Thus, it concluded that from the facts and circumstances
of the case, it is clear that the object of the sale, as understood by the parties, was that portion Y
of Lot 4163 and that its designation as Lot 5734 in the document of sale was a simple mistake in
the drafting of the document, which mistake, however, did not vitiate the consent of the parties or
affect the validity and the binding effect of the contract between them. Hence, the remedy of
reformation of instrument is proper.[8]
Petitioners appealed the decision to the Court of Appeals, which affirmed the ruling of the
trial court as follows:

WHEREFORE, the appealed decision is hereby AFFIRMED. Costs against

defendants-appellants.
SO ORDERED.[9]
In affirming the decision of the trial court, the Court of Appeals agreed that the real intention
of the parties was for the sale of Lot 4163 which Alejandra Delfino had been occupying, and the
designation of Lot 5734 in the deed was a mistake in the preparation of the document. It noted
that Silveria Flores did not object when Alejandra Delfino took possession of one-half portion of

Lot 4163 immediately after the sale, considering that it was Silverias son, Michael Corsame, who
developed the area purchased by Alejandra.[10]
Aggrieved but undeterred, the successors-in-interest of defendant Silveria Flores seasonably
filed their petition for review under Rule 45 of the Rules of Court. They assail the decision of the
Court of Appeals on the following grounds:
1. THE COURT OF APPEALS COMMITTED AN ERROR IN LAW WHEN IT FAILED TO
ORDER THE DISMISSAL OF CIVIL CASE NO. 3457 FOR LACK OF CAUSE OF
ACTION.
2. THE COURT OF APPEALS AND THE TRIAL COURT COMMITTED A REVERSIBLE
ERROR IN LAW AND JURISPRUDENCE WHEN IT FAILED TO RULE THAT, BASED
ON THE UNDISPUTED EVIDENCE ON RECORD AND THE SETTLEMENT OF
ESTATE AND SALE ITSELF, THE PLAINTIFFS HAVE NO CAUSE OF ACTION
AGAINST SILVERIA FLORES BECAUSE SHE DID NOT SELL HER LAND TO
ALEJANDRA DELFINO. HENCE SILVERIA FLORES CANNOT BE BOUND NOR
PREJUDICED BY THE CONTRACT OF SALE ENTERED BY ALEJANDRA DELFINO
AND HER CO-PLAINTIFFS (CAPITOL INSURANCE & SURETY CO INC. V. CENTRAL
AZUCARERA DEL DAVAO, 221 SCRA 98; OZAETA V. CA, 228 SCRA 350).
3. THE COURT OF APPEALS AND THE TRIAL COURT COMMITTED A REVERSIBLE
ERROR WHEN IT FAILED TO PRONOUNCE THAT SILVERIA FLORES WHO IS NOT
A PARTY TO THE CONTRACT OF SALE INVOLVING LOT NO. 5734 COVERED BY
OCT NO. 4918-A CANNOT BE LEGALLY COMPELLED BY ALEJANDRA DELFINO
THRU AN ACTION FOR REFORMATION OF CONTRACT TO EXECUTE A
CONVEYANCE OF SALE INVOLVING LOT NO. 4163 COVERED BY OCT NO. 3129-A
OWNED AND REGISTERED SOLELY IN THE NAME OF SILVERIA FLORES.
4. THE COURT OF APPEALS AND THE TRIAL COURT GROSSLY MISAPPREHENDED
THE FACTS WHEN IT RULED THAT THE OBJECT OF THE CONTRACT OF SALE
WAS LOT NO. 4163 COVERED BY OCT NO. 3129-A, DESPITE THE UNASSAILABLE
FACT THAT THE OBJECT OF THE SETTLEMENT AND SUBJECT OF THE
CONTRACT OF SALE WAS LOT NO. 5734 COVERED BY OCT NO. 4918-A.
5. THE COURT OF APPEALS AND THE TRIAL COURT GROSSLY MISAPPREHENDED
THE FACTS IN NOT UPHOLDING THAT THERE WAS NO MISTAKE IN THE
DRAFTING OF THE DOCUMENT AS WELL AS IN THE OBJECT OF THE
SETTLEMENT OF ESTATE AND SALE BECAUSE THE DOCUMENT WAS
PREPARED BY ATTY. DEOGRACIAS PINILI, THE LAWYER OF ALEJANDRA
DELFINO.
6. THE COURT OF APPEALS AND THE TRIAL COURT GROSSLY MISAPPREHENDED
THE FACTS WHEN IT RULED THAT THE GRANDCHILDREN OF JOSE FLORES ARE

OWNERS AND COULD SELL THE ONE-HALF (1/2) PORTION OF LOT NO. 4163 TO
ALEJANDRA DELFINO DESPITE THE INCONTROVERTIBLE EVIDENCE THAT LOT
NO. 4163 COVERED BY OCT NO. 3129-A IS REGISTERED AND SOLELY OWNED
BY SILVERIA FLORES WHO IS PAYING THE REAL PROPERTY TAXES.
7. THE COURT OF APPEALS AND THE TRIAL COURT COMMITTED A REVERSIBLE
ERROR IN LAW WHEN IT DISREGARDED ARTICLE 1370 OF THE CIVIL CODE OF
THE PHILIPPINES AND PERTINENT JURISPRUDENCE RELEVANT TO THIS CASE
EVEN IF THE TERMS OF THE SETTLEMENT OF ESTATE AND SALE ARE CLEAR
AND LEAVE NO DOUBT ON THE INTENTION OF THE CONTRACTING PARTIES.
8. THE COURT OF APPEALS AND THE TRIAL COURT GRAVELY ERRED IN
DISREGARDING SETTLED JURISPRUDENCE THAT A PUBLIC DOCUMENT
EXECUTED AND ATTESTED THROUGH THE INTERVENTION OF A NOTARY
PUBLIC IS EVIDENCE OF THE FACTS IN CLEAR, UNEQUIVOCAL MANNER AND
TO CONTRADICT IT THERE MUST BE CLEAR AND CONVINCING EVIDENCE NOT
MERELY PREPONDERANT EVIDENCE (GEVERO VS. INTERMEDIATE APPELLATE
COURT, G.R. NO. 77029, AUGUST 30, 1990; ZAMBO V. COURT OF APPEALS, 224
SCRA 855; REBULDEDA V. IAC, 155 SCRA 520; CHILIANCHIN V. COQUINCO, 84
PHIL. 714; CENTENERA V. GARCIA PALICIO, 29 PHIL. 470).
9. THE COURT OF APPEALS AND THE TRIAL COURT COMMITTED A REVERSIBLE
ERROR WHEN IT SUBSTITUTED, REVISED AND MODIFIED THE AGREEMENT OF
THE PARTIES DESPITE THE ABSENCE OF FRAUD, MISTAKE, INEQUITABLE
CONDUCT OR ACCIDENT.
10. THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN LAW WHEN IT
FAILED TO RULE ON THE ISSUE OF WHETHER THE TRIAL COURT GRAVELY
ERRED IN ORDERING THE HEIRS OF SILVERIA FLORES TO PAY ACTUAL AND
MORAL DAMAGES AS WELL AS ATTORNEYS FEES TO THE HEIRS OF
ALEJANDRA DELFINO.[11]

After careful consideration, we find the following relevant issues for our resolution: (1)
whether or not there is a cause of action for reformation of instrument against Silveria Flores,
and consequently the petitioners; (2) whether or not reformation of the subject deed is proper by
reason of mistake in designating the correct lot number; and (3) whether or not the heirs of
Alejandra Delfino are entitled to actual and moral damages including attorneys fees.
In seeking the reversal of the appellate courts decision, the heirs of Silveria Flores, herein
petitioners, ascribe to the appellate court several errors: first, the Court of Appeals committed
error in failing to appreciate that there is no cause of action against Silveria as she was never a
party to the contract of sale; second, the appellate court erred in giving probative value to the
biased testimony of Trinidad Flores to the effect that Lot No. 4163 was subdivided into two, onehalf of which is occupied by her and her siblings; and third, the appellate court erred in not

considering the fact that Silveria is the only registered owner of Lot 4163. Petitioners submit that
the evidence adduced is insufficient to sustain a decision in respondents favor.
Respondents, for their part, maintain that the present petition is pro forma as it does not raise
any new matter worth considering. They also assert that the arguments and issues raised by
petitioners have been more than adequately and exhaustively discussed by the trial court as well
as the Court of Appeals.[12]
On the first issue, petitioners contend that there is no cause of action against them and their
predecessor-in-interest, Silveria Flores, because she and they were not parties to the contract
sought to be reformed.
However, a close perusal of the deed would show that Silveria Flores was a party to the
contract. She is not only the seller of the coconut trees worth P15 but she was also one of the
heirs entitled to the estate of Venancio and Maxima, one of the heirs of Jose Flores. Her name did
not appear as one of the sellers of one-half lot to Alejandra Delfino because she never sold her
share.What was sold was the one-half share of Jose Flores, as represented by his heirs. It is also
established that it was Silveria Flores herself who delivered the subject lot to the vendee
Alejandra Delfino. Said the lower court:

The truth of the matter, is that what the plaintiffs-vendors really intended to sell and
what Alejandra Delfino intended to buy, of which both of the parties agreed to be the
subject of the transaction, was actually that parcel of land, with two rows of coconut
trees as the dividing line, and which lot is known as Lot 4163. This lot, on the western
portion, was the very portion which was pointed to and delivered to Alejandra Delfino
by the original defendant Silveria Flores and her two children, together with the
vendors on January 19, 1956. When the title to the said property was delivered to the
notary public, for the preparation of the document of sale, the title that was delivered
was for Lot 5734. So, the document, that was executed, was done by reason of
mistake, inequitable conduct and accident, because the said document did not express
the true and real agreement and intention of the contracting parties. What was made to
appear in the said document was the sale of the one-half portion of another lot. Lot
5734, when in truth and in fact, the subject property sold was Lot 4163.
[13]
(Underscoring and italics supplied.)
Through her actions, Silveria Flores had made the parties to the deed believe that the lot
intended to be the object of the contract was the same lot described in the deed. Thus, by mistake
or accident, as well as inequitable conduct, neither she nor her successors-in-interest could deny
involvement in the transaction that resulted in a deed that now ought to be reformed.

Worth stressing, the existence of a cause of action is not determined by ones involvement in
a contract. Participation in a contract is not an element to determine the existence of a cause of
action. The rule is that only the allegations in the complaint may properly be considered in
ascertaining the existence of a cause of action. Lack of cause of action must appear on the face of
the complaint and its existence may be determined only by the allegations of the
complaint. Consideration of other facts is proscribed and any attempt to prove extraneous
circumstances is not allowed.[14]
The test of sufficiency of the facts found in a complaint as constituting a cause of action is
whether or not, admitting the facts alleged, the court can render a valid judgment upon the same
in accordance with the prayer in the complaint. [15] An examination of the complaint[16] shows
herein respondents, as plaintiffs in the trial court, are entitled to the relief of reformation of
instrument if the following factual allegations of respondents are deemed admitted, to wit: (1)
that Silveria is a co-owner of Lots No. 5734 and 4163, in different shares; (2) that the heirs of
Jose, her co-owner in Lot No. 4163, offered to sell to her their one-half share but she declined for
lack of money; (3) that said share was later sold to Alejandra; (4) that Silveria was asked to
deliver the title of Lot No. 4163 but instead she delivered the title of Lot No. 5734; (5) that after
the sale, Alejandra occupied one-half portion of Lot No. 4163 while Lot No. 5734 was still in the
possession of Venancio and the heirs of Maxima and Silveria; (6) that it was only when
Alejandra was about to buy the adjacent lot that she realized that what was indicated in the
Settlement of Estate and Sale was Lot No. 5734 and not 4163. In sum, we find that the original
plaintiffs in the trial court alleged sufficient facts in the complaint that properly constituted a
cause of action against the defendants.
On the second issue, petitioners contend respondents failed to show, specifically, a cause of
action for the reformation of the instrument in question. Reformation is that remedy in equity by
means of which a written instrument is made or construed so as to express or conform to the real
intention of the parties.[17] As provided in Article 1359 of the Civil Code:

Art. 1359. When, there having been a meeting of the minds of the parties to a contract,
their true intention is not expressed in the instrument purporting to embody the
agreement by reason of mistake, fraud, inequitable conduct or accident, one of the
parties may ask for the reformation of the instrument to the end that such true
intention may be expressed.
If mistake, fraud, inequitable conduct, or accident has prevented a meeting of the
minds of the parties, the proper remedy is not reformation of the instrument but
annulment of the contract.

An action for reformation of instrument under this provision of law may prosper only upon
the concurrence of the following requisites: (1) there must have been a meeting of the minds of
the parties to the contact; (2) the instrument does not express the true intention of the parties; and
(3) the failure of the instrument to express the true intention of the parties is due to mistake,
fraud, inequitable conduct or accident.[18]
All of these requisites, in our view, are present in this case. There was a meeting of the
minds between the parties to the contract but the deed did not express the true intention of the
parties due to mistake in the designation of the lot subject of the deed. There is no dispute as to
the intention of the parties to sell the land to Alejandra Delfino but there was a mistake as to the
designation of the lot intended to be sold as stated in the Settlement of Estate and Sale.
While intentions involve a state of mind which may sometimes be difficult to decipher,
subsequent and contemporaneous acts of the parties as well as the evidentiary facts as proved
and admitted can be reflective of ones intention. The totality of the evidence clearly indicates
that what was intended to be sold to Alejandra Delfino was Lot 4163 and not Lot 5734. As found
by both courts below, there are enough bases to support such conclusion. We particularly note
that one of the stipulated facts during the pre-trial is that one-half of Lot 4163 is in the possession
of plaintiff Alejandra Delfino since 1956 up to the present. [19] Now, why would Alejandra occupy
and possess one-half of said lot if it was not the parcel of land which was the object of the sale to
her? Besides, as found by the Court of Appeals, if it were true that Silveria Flores was the sole
owner of Lot 4163, then she should have objected when Alejandra Delfino took possession of
one-half thereof immediately after the sale. Additionally, we find no cogent reason to depart
from the conclusion of both the Court of Appeals and the trial court, based on the evidence on
record, that Silveria Flores owns only one-half of Lot 4163. The other half belongs to her brother
Jose, represented now by his grandchildren successors-in-interest. As such, the latter could
rightfully sell the land to Alejandra Delfino.
Furthermore, on record, it has been shown that a spot investigation conducted by a duly
licensed surveyor revealed that Lot 4163 is subdivided into two portions, one belonging to
Silveria Flores and the other to the heirs of Jose Flores.[20] As found by the trial court, if indeed it
was Lot 5734 that was sold, then Silveria Flores was occupying more than her share of the
inherited lot.Thus:

x x x That, with respect to Lot No. 5734 and Lot No. 4292, in an on-the-spot
investigation, made by a licensed surveyor, Mr. Rilthe Dorado, his findings thereon
show that Silveria Flores is in possession on the western portion of Lot 5734, with an
area of more than one-half and, to be exact, with an area of 2,462, in spite of the fact
that she is the registered owner only of a one-third (1/3) share; and admitting, for the
sake of argument, that it was the one-half portion, of Lot 5734, that was sold, why

should Silveria Flores possess more than 2,190 square meters, which is the 1/2 of Lot
5734, Isabel Flores, the daughter of Venancio Flores is possessing the middle portion,
with an area of only 884 square meters; and Trinidad Flores Nodado, in representation
of her aunt, Maxima Flores, is possessing an area of 1,034 sq. m. [21]
As a matter of fact, the trial court also found that in spite of her title over Lot 4163, Silveria
recognized the right of Joses grandchildren over one-half portion of the property.[22] The trial
court gave credence to the testimony of Trinidad Flores, one of the grandchildren, who testified
as follows:
Q: During the lifetime of Jose and Silveria when they were possessing Lot 4163, did they subdivide it
because they were possessing it in common?
A: They subdivided it into two halves.

xxx
Q: And after Jose and Silveria subdivided Lot 4163, they possessed their respective shares of Lot
4163?
A: Yes.

xxx
Q: Now you said that you are the heirs of Jose and Roman Flores (father and son) and so when they
died this portion of Lot 4163 devolved on you, did you ever take possession of Lot 4163?
A: Yes, we, the brothers and sisters immediately took possession of it. [23]

On cross-examination, Trinidad sufficiently explained why the title to Lot No. 4163 is in the
name of Silveria Flores alone. Thus:
Q: Now, this Lot No. 4163, do you know if this lot is also titled?
A: Yes, it was titled, only in the name of Silveria Flores because my aunt was not able to go with her;
only my aunt was alone at that time.[24]

xxx
Q: And as you have stated earlier, that what you are intending to sell was Lot 4163 to plaintiff
Alejandra Delfino, and during this time that you sold this intended lot 4163, you were not aware
this particular lot 4163 was titled exclusively in the name of Silveria Flores, is that correct?

A: I knew already that the said lot was already titled, but it was titled only in the name of Silveria
Flores because she was the only one who went there to have it titled in her name. And at the time
of the sale of the lot, we demanded for the title from Silveria Flores, and what she delivered was
the 5734 (sic).[25]

Petitioners now claim that the foregoing testimony of Trinidad Flores was biased. But we
note that the appellate court sustained the trial courts reliance on her testimony, which both found
to be credible. As consistently held, factual findings of the trial court, especially when affirmed
by the appellate court, are binding upon this Court [26] and entitled to utmost respect.
[27]
Considering these findings, we see no reason to disturb the trial courts finding, affirmed by the
Court of Appeals, that the object of the contract of sale, as intended and understood by the
parties, was Lot 4163 covered by OCT 3129-A which Alejandra, and now her heirs, have been
occupying. The designation of the lot in the deed of sale as Lot 5734, covered by OCT 4918-A,
was a mistake in the preparation of the document. Thus, we concur in the conclusion reached by
the courts a quo that reformation of the instrument is proper.
However, on the matter of damages, the award of actual damages in the amount of P5,000
lacks evidentiary support. Actual damages if not supported by the evidence on record cannot be
granted.[28] Moral damages for P10,000 was also improperly awarded, absent a specific finding
and pronouncement from the trial court that petitioners acted in bad faith or with
malice.However, the award of attorneys fees for P2,000 is justified under Article 2208(2) of the
Civil Code,[29] in view of the trial courts finding that the unjustified refusal of petitioners to
reform or to correct the document of sale compelled respondents to litigate to protect their
interest.
WHEREFORE, the decision of the Court of Appeals in CA-G.R. CV No. 39401 is
AFFIRMED with MODIFICATION. It is hereby ordered that the document entitled Settlement
of Estate and Sale be reformed by changing the phrase Lot 5734 to Lot 4163 found in the sixth
paragraph of the deed, thereby ceding in favor of respondents one-half portion of Lot 4163
instead of Lot 5734. The award to respondents of attorneys fees in the amount of P2,000 is
affirmed. However, the award of actual damages in the amount of P5,000 and of moral damages
in the amount ofP10,000 are both SET ASIDE. No pronouncement as to costs.
SO ORDERED.
Bellosillo, (Acting C.J.,), (Chairman), Mendoza, De Leon, Jr., and Corona, JJ., concur.