[G.R. No. 127540. October 17, 2001.

]
EUGENIO DOMINGO, CRISPIN MANGABAT and SAMUEL CAPALUNGAN, Petitioners, v. HON.
COURT OF APPEALS, FELIPE C. RIGONAN and CONCEPCION R. RIGONAN, Respondents.
EUGENIO DOMINGO, CRISPIN MANGABAT and SAMUEL CAPALUNGAN, Petitioners, v. HON.
COURT OF APPEALS, THE DIRECTOR OF LANDS, and FELIPE C. RIGONAN and CONCEPCION R.
RIGONAN, Respondents.
DECISION
QUISUMBNG, J.:
This petition 1 seeks to annul the decision of the Court of Appeals dated August 29, 1996, which set aside
the decision of the Regional Trial Court of Batac, Ilocos Norte, Branch 17, in Civil Case No. 582-17 for
reinvindicacion consolidated with Cadastral Case No. 1. 2 The petition likewise seeks to annul the resolution
dated December 11, 1996, denying petitioners motion for reconsideration.
The facts of this case, culled from the records, are as follows:chanrob1es virtual 1aw library
Paulina Rigonan owned three (3) parcels of land, located at Batac and Espiritu, Ilocos Norte, including the
house and warehouse on one parcel. She allegedly sold them to private respondents, the spouses Felipe and
Concepcion Rigonan, who claim to be her relatives. In 1966, herein petitioners Eugenio Domingo, Crispin
Mangabat and Samuel Capalungan, who claim to be her closest surviving relatives, allegedly took
possession of the properties by means of stealth, force and intimidation, and refused to vacate the same.
Consequently, on February 2, 1976, herein respondent Felipe Rigonan filed a complaint for reinvindicacion
against petitioners in the Regional Trial Court of Batac, Ilocos Norte. On July 3, 1977, he amended the
complaint and included his wife as co-plaintiff. They alleged that they were the owners of the three parcels
of land through the deed of sale executed by Paulina Rigonan on January 28, 1965; that since then, they
had been in continuous possession of the subject properties and had introduced permanent improvements
thereon; and that defendants (now petitioners) entered the properties illegally, and they refused to leave
them when asked to do so.chanrob1es virtua1 1aw 1ibrary
Herein petitioners, as defendants below, contested plaintiffs claims. According to defendants, the alleged
deed of absolute sale was void for being spurious as well as lacking consideration. They said that Paulina
Rigonan did not sell her properties to anyone. As her nearest surviving kin within the fifth degree of
consanguinity, they inherited the three lots and the permanent improvements thereon when Paulina died in
1966. They said they had been in possession of the contested properties for more than 10 years.
Defendants asked for damages against plaintiffs.chanrob1es virtua1 1aw 1ibrary
During trial, Juan Franco, Notary Public Evaristo P. Tagatag 3 and plaintiff Felipe Rigonan testified for
plaintiffs (private respondents now).
Franco testified that he was a witness to the execution of the questioned deed of absolute sale. However,
when cross-examined and shown the deed he stated that the deed was not the document he signed as a
witness, but rather it was the will and testament made by Paulina Rigonan.
Atty. Tagatag testified that he personally prepared the deed, he saw Paulina Rigonan affix her thumbprint
on it and he signed it both as witness and notary public. He further testified that he also notarized Paulinas
last will and testament dated February 19, 1965. The will mentioned the same lots sold to private
respondents. When asked why the subject lots were still included in the last will and testament, he could not
explain. Atty. Tagatag also mentioned that he registered the original deed of absolute sale with the Register
of Deeds.
Plaintiff Felipe Rigonan claimed that he was Paulinas close relative. Their fathers were first cousins.
However, he could not recall the name of Paulinas grandfather. His claim was disputed by defendants, who
lived with Paulina as their close kin. He admitted the discrepancies between the Register of Deeds copy of
the deed and the copy in his possession. But he attributed them to the representative from the Office of the
Register of Deeds who went to plaintiffs house after that Office received a subpoena duces tecum. According
to him, the representative showed him blanks in the deed and then the representative filled in the blanks by
copying from his (plaintiffs) copy.chanrob1es virtua1 1aw 1ibrary

Counsel for defendants (petitioners herein) presented as witnesses Jose Flores, the owner of the adjacent
lot; Ruben Blanco, then acting Registrar of Deeds in Ilocos Norte; and Zosima Domingo, wife of defendant
Eugenio Domingo.
Jose Flores testified that he knew defendants, herein petitioners, who had lived on the land with Paulina
Rigonan since he could remember and continued to live there even after Paulinas death. He said he did not
receive any notice nor any offer to sell the lots from Paulina, contrary to what was indicated in the deed of
sale that the vendor had notified all the adjacent owners of the sale. He averred he had no knowledge of
any sale between Paulina and private respondents.chanrob1es virtua1 1aw 1ibrary
Ruben Blanco, the acting Registrar of Deeds, testified that only the carbon copy, also called a duplicate
original, of the deed of sale was filed in his office, but he could not explain why this was so.
Zosima Domingo testified that her husband, Eugenio Domingo, was Paulinas nephew. Paulina was a first
cousin of Eugenios father. She also said that they lived with Paulina and her husband, Jose Guerson, since
1956. They took care of her, spent for her daily needs and medical expenses, especially when she was
hospitalized prior to her death. She stated that Paulina was never badly in need of money during her
lifetime.chanrob1es virtua1 1aw 1ibrary
On March 23, 1994, the trial court rendered judgment in favor of defendants (now the petitioners). It
disposed:chanrob1es virtual 1aw library
WHEREFORE, premises considered, judgment is hereby rendered in favor of defendants and against the
plaintiffs, and as prayed for, the Amended Complaint is hereby DISMISSED.
Defendants are hereby declared, by virtue of intestate succession, the lawful owners and possessors of the
house including the bodega and the three (3) parcels of land in suit and a Decree of Registration
adjudicating the ownership of the said properties to defendants is hereby issued.
The alleged deed of sale (Exhs. "A", "A-1", "1" and "1-a") is hereby declared null and void and fake and the
prayer for the issuance of a writ of preliminary injunction is hereby denied.
Plaintiffs are hereby ordered to pay defendants:chanrob1es virtual 1aw library
a) P20,000.00 as moral damages;
b) P10,000.00 as exemplary damages;
c) P10,000.00 attorneys fees and other litigation expenses.
No pronouncement as to costs. 4
Private respondents herein appealed to the Court of Appeals.
On August 29, 1996, the CA reversed the trial courts decision, thus:chanrob1es virtual 1aw library
WHEREFORE, the decision dated March 23, 1994 is hereby SET ASIDE. The plaintiffs-appellants Felipe
Rigonan and Concepcion Rigonan are declared the owners of the properties under litigation and the
defendants-appellees are hereby ordered to VACATE the subject properties and SURRENDER the possession
thereof to the heirs of the plaintiffs-appellants.
Costs against the defendants-appellees. 5
Hence, this petition assigning the following as errors:chanrob1es virtual 1aw library
I
THE RESPONDENT COURT OF APPEALS HAS DECIDED QUESTIONS OF LEGAL SUBSTANCE AND
SIGNIFICANCE NOT IN ACCORDANCE WITH THE EVIDENCE, LAW AND WITH THE APPLICABLE DECISIONS
OF THIS HONORABLE COURT.
II

THAT THE FINDINGS OF RESPONDENT COURT OF APPEALS ARE CONTRARY TO THOSE OF THE TRIAL
COURT AND CLEARLY VIOLATES THE RULE THAT THE FACTUAL FINDINGS OF TRIAL COURTS ARE ENTITLED
TO GREAT WEIGHT AND RESPECT ON APPEAL, ESPECIALLY WHEN SAID FINDINGS ARE ESTABLISHED BY
UNREBUTTED TESTIMONIAL AND DOCUMENTARY EVIDENCE.
III
THAT THE FINDINGS AND CONCLUSIONS OF RESPONDENT COURT OF APPEALS ARE GROUNDED ENTIRELY
ON SPECULATIONS, SURMISES, CONJECTURES, OR ON INFERENCES MANIFESTLY MISTAKEN.
IV
THAT THE RESPONDENT COURT OF APPEALS MANIFESTLY OVERLOOKED CERTAIN RELEVANT FACTS NOT
DISPUTED BY THE PARTIES AND WHICH, IF PROPERLY CONSIDERED, WOULD JUSTIFY A DIFFERENT
CONCLUSION.
V
THAT THE FINDINGS OF FACT OF RESPONDENT COURT OF APPEALS ARE PREMISED ON SUPPOSED
ABSENCE OF EVIDENCE BUT IS CONTRADICTED BY THE EVIDENCE ON RECORD THUS CONSTITUTES
GRAVE ABUSE OF DISCRETION. 6
The basic issue for our consideration is, did private respondents sufficiently establish the existence and due
execution of the Deed of Absolute and Irrevocable Sale of Real Property? Marked as Exhibits "A," "A-1," "1"
and "1-a," this deed purportedly involved nine (9) parcels of land, inclusive of the three (3) parcels in
dispute, sold at the price of P850 by Paulina Rigonan to private respondents on January 28, 1965, at Batac,
Ilocos Norte. 7 The trial court found the deed "fake," being a carbon copy with no typewritten original
presented; and the court concluded that the documents execution "was tainted with alterations, defects,
tamperings, and irregularities which render it null and void ab initio." 8
Petitioners argue that the Court of Appeals erred in not applying the doctrine that factual findings of trial
courts are entitled to great weight and respect on appeal, especially when said findings are established by
unrebutted testimonial and documentary evidence. They add that the Court of Appeals, in reaching a
different conclusion, had decided the case contrary to the evidence presented and the law applicable to the
case. Petitioners maintain that the due execution of the deed of sale was not sufficiently established by
private respondents, who as plaintiffs had the burden of proving it. First, the testimonies of the two alleged
instrumental witnesses of the sale, namely, Juan Franco and Efren Sibucao, were dispensed with and
discarded when Franco retracted his oral and written testimony that he was a witness to the execution of
the subject deed. As a consequence, the appellate court merely relied on Atty. Tagatags (the notary public)
testimony, which was incredible because aside from taking the double role of a witness and notary public,
he was a paid witness. Further his testimony, that the subject deed was executed in the house of Paulina
Rigonan, was rebutted by Zosima Domingo, Paulinas housekeeper, who said that she did not see Atty.
Tagatag, Juan Franco and Efren Sibucao in Paulinas house on the alleged date of the deeds execution.
Secondly, petitioners said that private respondents failed to account for the typewritten original of the deed
of sale and that the carbon copy filed with the Register of Deeds was only a duplicate which contained
insertions and erasures. Further, the carbon copy was without an affidavit of explanation, in violation of the
Administrative Code as amended, which requires that if the original deed of sale is not presented or
available upon registration of the deed, the carbon copy or so-called "duplicate original" must be
accompanied by an affidavit of explanation, otherwise, registration must be denied. 9
Thirdly, petitioners aver that the consideration of only P850 for the parcels of land sold, together with a
house and a warehouse, was another indication that the sale was fictitious because no person who was
financially stable would sell said property at such a grossly inadequate consideration.
Lastly, petitioners assert that there was abundant evidence that at the time of the execution of the deed of
sale, Paulina Rigonan was already senile. She could not have consented to the sale by merely imprinting her
thumbmark on the deed.
In their comment, private respondents counter that at the outset the petition must be dismissed for it lacks
a certification against forum shopping. Nonetheless, even disregarding this requirement, the petition must
still be denied in due course for it does not present any substantial legal issue, but factual or evidentiary

ones which were already firmly resolved by the Court of Appeals based on records and the evidence
presented by the parties. Private respondents claim that the factual determination by the trial court lacks
credibility for it was made by the trial judge who presided only in one hearing of the case. The trial judge
could not validly say that the deed of absolute sale was "fake" because no signature was forged, according
to private respondents; and indeed a thumbmark, said to be the sellers own, appears thereon.chanrob1es
virtua1 1aw 1ibrary
In their reply, petitioners said that the copy of the petition filed with this Court was accompanied with a
certification against forum shopping. If private respondents copy did not contain same certification, this was
only due to inadvertence. Petitioners ask for the Courts indulgence for anyway there was substantial
compliance with Revised Circular No. 28-91.
On the contention that here only factual issues had been raised, hence not the proper subject for review by
this Court, petitioners reply that this general rule admits of exceptions, as when the factual findings of the
Court of Appeals and the trial court are contradictory; when the findings are grounded entirely on
speculations, surmises or conjectures; and when the Court of Appeals overlooked certain relevant facts not
disputed by the parties which if properly considered would justify a different conclusion. All these, according
to petitioners, are present in this case.
Before proceeding to the main issue, we shall first settle procedural issues raised by private respondents.
While the trial judge deciding the case presided over the hearings of the case only once, this circumstance
could not have an adverse effect on his decision. The continuity of a court and the efficacy of its proceedings
are not affected by the death, resignation or cessation from the service of the presiding judge. A Judge may
validly render a decision although he has only partly heard the testimony of the witnesses. 10 After all, he
could utilize and rely on the records of the case, including the transcripts of testimonies heard by the former
presiding judge.chanrob1es virtua1 1aw 1ibrary
On the matter of the certification against forum-shopping, petitioners aver that they attached one in the
copy intended for this Court. This is substantial compliance. A deviation from a rigid enforcement of the
rules may be allowed to attain their prime objective for, after all, the dispensation of justice is the core
reason for the courts existence. 11
While the issues raised in this petition might appear to be mainly factual, this petition is properly given due
course because of the contradictory findings of the trial court and the Court of Appeals. Further, the later
court apparently overlooked certain relevant facts which justify a different conclusion. 12 Moreover, a
compelling sense to make sure that justice is done, and done rightly in the light of the issues raised herein,
constrains us from relying on technicalities alone to resolve this petition.
Now, on the main issue. Did private respondents establish the existence and due execution of the deed of
sale? Our finding is in the negative. First, note that private respondents as plaintiffs below presented only a
carbon copy of this deed. When the Register of Deeds was subpoenaed to produce the deed, no original
typewritten deed but only a carbon copy was presented to the trial court. Although the Court of Appeals
calls it a "duplicate original," the deed contained filled in blanks and alterations. None of the witnesses
directly testified to prove positively and convincingly Paulinas execution of the original deed of sale. The
carbon copy did not bear her signature, but only her alleged thumbprint. Juan Franco testified during the
direct examination that he was an instrumental witness to the deed. However, when cross-examined and
shown a copy of the subject deed, he retracted and said that said deed of sale was not the document he
signed as witness. 13 He declared categorically he knew nothing about it. 14
We note that another witness, Efren Sibucao, whose testimony should have corroborated Atty. Tagatags,
was not presented and his affidavit was withdrawn from the court, 15 leaving only Atty. Tagatags
testimony, which aside from being uncorroborated, was self-serving.
Secondly, we agree with the trial court that irregularities abound regarding the execution and registration of
the alleged deed of sale. On record, Atty. Tagatag testified that he himself registered the original deed with
the Register of Deeds. 16 Yet, the original was nowhere to be found and none could be presented at the
trial. Also, the carbon copy on file, which is allegedly a duplicate original, shows intercalations and
discrepancies when compared to purported copies in existence. The intercalations were allegedly due to
blanks left unfilled by Atty. Tagatag at the time of the deeds registration. The blanks were allegedly filled in
much later by a representative of the Register of Deeds. In addition, the alleged other copies of the
document bore different dates of entry: May 16, 1966, 10:20 A.M. 17 and June 10, 1966, 3:16 P.M., 18 and
different entry numbers: 66246, 74389 19 and 64369. 20 The deed was apparently registered long after its
alleged date of execution and after Paulinas death on March 20, 1966. 21 Admittedly, the alleged vendor
Paulina Rigonan was not given a copy. 22

Furthermore, it appears that the alleged vendor was never asked to vacate the premises she had
purportedly sold. Felipe testified that he had agreed to let Paulina stay in the house until her death. 23 In
Alcos v. IAC, 162 SCRA 823 (1988), the buyers immediate possession and occupation of the property was
deemed corroborative of the truthfulness and authenticity of the deed of sale. The alleged vendors
continued possession of the property in this case throws an inverse implication, a serious doubt on the due
execution of the deed of sale. Noteworthy, the same parcels of land involved in the alleged sale were still
included in the will subsequently executed by Paulina and notarized by the same notary public, Atty.
Tagatag. 24 These circumstances, taken together, militate against unguarded acceptance of the due
execution and genuineness of the alleged deed of sale.chanrob1es virtua1 1aw 1ibrary
Thirdly, we have to take into account the element of consideration for the sale. The price allegedly paid by
private respondents for nine (9) parcels, including the three parcels in dispute, a house and a warehouse,
raises further questions. Consideration is the why of a contract, the essential reason which moves the
contracting parties to enter into the contract. 25 On record, there is unrebutted testimony that Paulina as
landowner was financially well off. She loaned money to several people. 26 We see no apparent and
compelling reason for her to sell the subject parcels of land with a house and warehouse at a meager price
of P850 only.
In Rongavilla v. CA, 294 SCRA 289 (1998), private respondents were in their advanced years, and were not
in dire need of money, except for a small amount of P2,000 which they said were loaned by petitioners for
the repair of their houses roof. We ruled against petitioners, and declared that there was no valid sale
because of lack of consideration.
In the present case, at the time of the execution of the alleged contract, Paulina Rigonan was already of
advanced age and senile. She died an octogenarian on March 20, 1966, barely over a year when the deed
was allegedly executed on January 28, 1965, but before copies of the deed were entered in the registry
allegedly on May 16 and June 10, 1966. The general rule is that a person is not incompetent to contract
merely because of advanced years or by reason of physical infirmities. 27 However, when such age or
infirmities have impaired the mental faculties so as to prevent the person from properly, intelligently, and
firmly protecting her property rights then she is undeniably incapacitated. The unrebutted testimony of
Zosima Domingo shows that at the time of the alleged execution of the deed, Paulina was already
incapacitated physically and mentally. She narrated that Paulina played with her waste and urinated in bed.
Given these circumstances, there is in our view sufficient reason to seriously doubt that she consented to
the sale of and the price for her parcels of land. Moreover, there is no receipt to show that said price was
paid to and received by her. Thus, we are in agreement with the trial courts finding and conclusion on the
matter:chanrob1es virtua1 1aw 1ibrary
The whole evidence on record does not show clearly that the fictitious P850.00 consideration was ever
delivered to the vendor. Undisputably, the P850.00 consideration for the nine (9) parcels of land including
the house and bodega is grossly and shockingly inadequate, and the sale is null and void ab initio. 28
WHEREFORE, the petition is GRANTED. The decision and resolution of the Court of Appeals dated August 29,
1996 and December 11, 1996, respectively, are REVERSED and SET ASIDE. The decision of the Regional
Trial Court of Batac, Ilocos Norte, Branch 17, dated March 23, 1994, is REINSTATED.
Costs against private respondents.
SO ORDERED.

[G.R. No. L-15113. January 28, 1961.]

ANTONIO MEDINA, Petitioner, v. COLLECTOR OF INTERNAL REVENUE and THE COURT OF TAX
APPEALS, Respondents.
Eusebio D. Morales for Petitioner.
Solicitor General for Respondent.
SYLLABUS
1. TAXATION; SALES TAX; SALES BETWEEN HUSBAND AND WIFE VOID; SALES MADE BY WIFE TO THIRD
PERSON DEEMED ORIGINAL AND TAXABLE. Contracts violative of the provisions of Article 1490 of the
Civil Code are null and void (Uy Sui Pin v. Cantollas, 70 Phil. 55; Uy Coque v. Sioca, 45 Phil., 43), and the
sales made by the petitioner to his wife being void, the sales made by the latter are deemed the original
sales subject to tax.
2. ID.; EVIDENCE; ILLEGALLY SEIZED DOCUMENTS ADMISSIBLE IN EVIDENCE. Illegally obtained
documents and papers are admissible in evidence if they are found to be competent and relevant to the
case (see Wong & Lee v. Collector of Internal Revenue, 104 Phil., 469; 55 Off. Gaz., [51] 10539).
3. ID.; BOOKS OF ACCOUNT; WHO MAY REQUIRE THEIR PRODUCTION. The Collector of Internal Revenue
or any officer and agents thereof could require the production of books or accounts and other records from
a taxpayer.
4. ID.; COLLECTOR OF INTERNAL REVENUE AN INTERESTED PARTY IN ALL TAXABLE TRANSACTIONS.
The Collector of Internal Revenue is always an interested party in all matters involving taxable transactions
and may question their validity or legitimacy whenever necessary to block tax evasion.
DECISION
REYES, J.B.L., J.:
Petition to review a decision of the Court of Tax Appeals upholding a tax assessment of the Collector of
Internal Revenue except with respect to the imposition of so-called compromise penalties, which were set
aside.
The records show that on or about May 20, 1944, petitioning taxpayer Antonio Medina married Antonia
Rodriguez. Before 1946, the spouses had neither property nor business of their own. Later,
however,Petitioner, acquired forest concessions in the municipalities of San Mariano and Palanan in the
Province of Isabela. From 1946 to 1948, the logs cut and removed by the petitioner from his concessions
were sold to different persons in Manila through his agent, Mariano Osorio.
Some time in 1949, Antonia R. Medina, petitioners wife, started to engage in business as a lumber dealer,
and up to around 1952, petitioner sold to her almost all the logs produced in his San Mariano concession.
Mrs. Medina, in turn, sold in Manila the logs bought from her husband through the same agent, Mariano
Osorio. The proceeds were, upon instructions from petitioner, either received by Osorio for petitioner or
deposited by said agent in petitioners current account with the Philippine National Bank.
On the thesis that the sales made by petitioner to his wife were null and void pursuant to the provisions of
Article 1490 of the Civil Code of the Philippines (formerly, Art. 1458, Civil Code 1889), the Collector
considered the sales made by Mrs. Medina as the petitioners original sales taxable under Section 186 of the
National Internal Revenue Code and, therefore, imposed a tax assessment on petitioner, calling for the
payment of P4,653.54 as deficiency sales taxes and surcharges from 1949 to 1952. This same assessment
of September 26, 1953 sought also the collection of another sum of P643.94 as deficiency sales tax and
surcharge based on petitioners quarterly returns from 1946 to 1952.
On November 30, 1963, petitioner protested the assessment; however, respondent Collector insisted on his

demand. On July 9, 1954, petitioner filed a petition for reconsideration, revealing for the first time the
existence of an alleged premarital agreement of complete separation of properties between him and his
wife, and contending that the assessment for the years 1946 to 1952 had already prescribed. After one
hearing, the Conference Staff of the Bureau of Internal Revenue eliminated the 50% fraud penalty and held
that the taxes assessed against him before 1948 had already prescribed. Based on these findings, the
Collector issued a modified assessment, demanding the payment of only P3,325.68, computed as
follows:chanrob1es virtual 1aw library
5% tax due on P7,209.83 1949 P 360.49
5% tax due on 16,945.55 1950 847.28
5% tax due on 16,874.52 1951 843.75
5% tax due on 11,009.94 1952 550.50

TOTAL sales tax due P2,602.02

25% Surcharge thereon 650.51
Short taxes per quarterly return, 3rd quarter, 1950 58.52
25% Surcharge thereon 14.63

TOTAL AMOUNT due & collectible P3,325.68

Petitioner again requested for reconsideration, but respondent Collector, in his letter of April 4, 1955, denied
the same.
Petitioner appealed to the Court of Tax Appeals, which rendered judgment as aforesaid. The courts decision
was based on two main findings, namely, (a) that there was no pre-marital agreement of absolute
separation of property between the Medina spouses; and (b) assuming that there was such an agreement,
the sales in question made by petitioner to his wife were fictitious, simulated, and not bona fide.
In his petition for review to this Court, petitioner raises several assignments of error revolving around the
central issue of whether or not the sales made by the petitioner to his wife could be considered as his
original taxable sales under the provisions of Section 186 of the National Internal Revenue Code.
Relying mainly on testimonial evidence that before their marriage, he and his wife executed and recorded a
pre-nuptial agreement for a regime of complete separation of property, and that all trace of the document
was lost on account of the war, petitioner imputes lack of basis for the tax courts factual findings that no
agreement of complete separation of property was ever executed by and between the spouses before their
marriage. We do not think so. Aside from the material inconsistencies in the testimony of petitioners
witnesses pointed out by the trial court, the circumstantial evidence is against petitioners claim. Thus, it
appears that at the time of the marriage between the petitioner and his wife, they neither had any property
nor business of their own, as to have really urged them to enter into the supposed property agreement.
Secondly, the testimony that the separation of property agreement was recorded in the Registry of Property
three months before the marriage, is patently absurd, since such a pre-nuptial agreement could not be
effective before marriage is celebrated, and would automatically be cancelled if the union was called off.
How then could it be accepted for recording prior to the marriage? In the third place, despite their insistence
on the existence of the ante-nuptial contract, the couple, strangely enough, did not act in accordance with
its alleged covenants. Quite the contrary, it was proved that even during their taxable years, the ownership,
usufruct, and administration of their properties and business were in the husband. And even when the wife
was engaged in lumber dealing, and she and her husband contracted sales with each other as aforestated,
the proceeds she derived from her alleged subsequent disposition of the logs incidentally, by and through
the same agent of her husband, Mariano Osorio were either received by Osorio for the petitioner or
deposited by said agent in petitioners current account with the Philippine National Bank. Fourth, although
petitioner, a lawyer by profession, already knew, after he was informed by the Collector on or about
September of 1953, that the primary reason why the sales of logs to his wife could not be considered as the
original taxable sales was because of the express prohibition found in Article 1490 of the Civil Code of sales
between spouses married under a community system; yet it was not until July of 1954 that he alleged, for

the first time, the existence of the supposed property separation agreement. Finally, the Day Book of the
Register of Deeds on which the agreement would have been entered, had it really been registered as
petitioner insists, and which book was among those saved from the ravages of the war, did not show that
the document in question was among those recorded therein.
We have already ruled that when the credibility of witnesses is the one at issue, the trial courts judgment
as to their degree of credence deserves serious consideration by this Court (Collector v. Bautista, Et Al., G.
R. Nos. L-12250, L-12259, May 27, 1959). This is all the more true in this case because not every copy of
the supposed agreement, particularly the one that was said to have been filed with the Clerk of Court of
Isabela, was accounted for as lost; so that, applying the "best evidence rule", the court did right in giving
little or no credence to the secondary evidence to prove the due execution and contents of the alleged
document (see Comments on the Rules of Court, Moran, 1957 Ed., Vol. 3, pp. 10-12).
The foregoing findings notwithstanding, the petitioner argues that the prohibition to sell expressed under
Article 1490 of the Civil Code has no application to the sales made by said petitioner to his wife, because
said transactions are contemplated and allowed by the provisions of Articles 7 and 10 of the Code of
Commerce. But said provisions merely state, under certain conditions, a presumption that the wife is
authorized to engage in business and for the incidents that flew therefrom when she so engages therein.
But the transactions permitted are those entered into with strangers, and do not constitute exceptions to
the prohibitory provisions of Article 1490 against sales between spouses.
Petitioners contention that the respondent Collector cannot assail the questioned sales, he being a stranger
to said transactions, is likewise untenable. The government, as correctly pointed out by the Tax Court, is
always an interested party to all matters involving taxable transactions and, needless to say, qualified to
question their validity or legitimacy whenever necessary to block tax evasion.
Contracts violative of the provisions of Article 1490 of the Civil Code are null and void (Uy Sui Pin v.
Cantollas, 70 Phil. 55; Uy Coque v. Sioca, 45 Phil. 43). Being void transactions, the sales made by the
petitioner to his wife were correctly disregarded by the Collector in his tax assessments that considered as
the taxable sales those made by the wife through the spouses common agent, Mariano Osorio. In upholding
that stand, the Court below committed no error.
It is also the petitioners contention that the lower court erred in using illegally seized documentary
evidence against him. But even assuming arguendo the truth of petitioners charge regarding the seizure, it
is now settled in this jurisdiction that illegally obtained documents and papers are admissible in evidence, if
they are found to be competent and relevant to the case (see Wong & Lee v. Collector of Internal Revenue,
104 Phil., 469). In fairness to the Collector, however, it should be stated that petitioners imputation is
vehemently denied by him, and relying on Sections 3, 9, 337 and 338 of the Tax Code and the pertinent
portions of Revenue Regulations No. V-1 and citing this Courts ruling in U.S. v. Aviado 38 Phil., 10, the
Collector maintains that he and other internal revenue officers and agents could require the production of
books of accounts and other records from a taxpayer.
Having arrived at the foregoing conclusion, it becomes unnecessary to discuss the other issues raised, which
are but premised on the assumption that a pre-marital agreement of total separation of property existed
between the petitioner and his wife.
WHEREFORE, the decision appealed from is affirmed with costs against the petitioner.
Padilla, Bautista Angelo, Labrador, Barrera, Gutierrez David and Dizon, JJ., concur.
Separate Opinions
CONCEPCION, J., concurring:chanrob1es virtual 1aw library
I concur in the result. I do not share the view that documents and papers illegally obtained are admissible in
evidence, if competent and relevant to the case. In this connection, I believe in the soundness of the
following observations of the Supreme Court of the United States in Weeks v. United States (232 U.S. 383,
58 L. ed. 652, 34 S. Ct. 341): 1
"The effect of the Fourth Amendment is to put the courts of the United States and Federal officials, in the
exercise of their power and authority, under limitations and restraints as to the exercise of such power and
authority, and to forever secure the people, their persons, houses, papers and effects against all
unreasonable searches and seizures under the guise of law. This protection reaches all alike, whether
accused of crime or not, and the duty of giving to it force and effect is obligatory upon all entrusted under

our Federal system with the enforcement of the laws. The tendency of those who execute the criminal laws
of the country to obtain conviction by means of unlawful seizures and enforced confessions, the latter often
obtained after subjecting accused persons to unwarranted practices destructive of rights secured by the
Federal Constitution, should find no sanction in the judgments of the courts which are charged at all times
with the support of the Constitution and to which people of all conditions have a right to appeal for the
maintenance of such fundamental rights.
x

". . . If letters and private documents can thus be seized and held and used in evidence against a citizen
accused of an offense, the protection of the Fourth Amendment declaring his right to be secure against such
searches and seizures is of no value, and, so far as those thus placed are concerned, might as well be
stricken from the constitution. The efforts of the courts and their officials to bring the guilty to punishment,
praiseworthy as they are, are not to be aided by the sacrifice of those great principles established by years
of endeavor and suffering which have resulted in their embodiment in the fundamental law of the
land."cralaw virtua1aw library
as applied and amplified in Elkins v. United States (June 27, 1960), 4 L. ed. 1669.

[G.R. No. L-28771. March 31, 1971.]

CORNELIA MATABUENA, Plaintiff-Appellant, v. PETRONILA CERVANTES, Defendant-Appellee.
Alegre, Roces, Salazar & Saez, for Plaintiff-Appellant.

Fernando Gerona, Jr., for Defendant-Appellee.

SYLLABUS
1. CIVIL LAW; PROPERTY RELATIONS BETWEEN HUSBAND AND WIFE; DONATIONS BY REASON OF
MARRIAGE; PROHIBITION AGAINST DONATION BETWEEN SPOUSES DURING MARRIAGE; APPLICABLE TO
COMMON LAW RELATIONSHIP. While Art. 133 of the Civil Code considers as void a "donation between the
spouses during the marriage", policy considerations of the most exigent character as well as the dictates of
morality require that the same prohibition should apply to a common-law relationship. A 1954 Court of
Appeals decision Buenaventura v. Bautista, (50 O.G. 3679) interpreting a similar provision of the old Civil
Code speaks unequivocally. If the policy of the law is, in the language of the opinion of the then Justice
J.B.L. Reyes of that Court, "to prohibit donations in favor of the other consort and his descendants because
of fear of undue and improper pressure and influence upon the donor, a prejudice deeply rooted in our
ancient law; porque no se engaen despojandose el uno al otro por amor que han de consuno, [according
to] the Partidas (Part. IV, Tit. Xl, LAW IV), reiterating the rationale Ne mutuato amore invicem spoliarentur
of the Pandects (Bk 24, Tit. I, De donat, inter virum et uxorem); then there is every reason to apply the
same prohibitive policy to persons living together as husband and wife without benefit of nuptials. For it is
not to be doubted that assent to such irregular connection for thirty years bespeaks greater influence of one
party over the other, so that the danger that the law seeks to avoid is correspondingly increased. Moreover,
as already pointed out by Ulpian (in his lib. 32 ad Sabinum, fr. 1), it would not be just that such donations
should subsist lest the condition of those who incurred guilt should turn out to be better. So long as
marriage remains the cornerstone of our family law, reason and morality alike demand that the disabilities
attached to marriage should likewise attach to concubinage.
2. ID.; SUCCESSION; INTESTATE SUCCESSION; SURVIVING SPOUSE; RULE WHERE A SISTER SURVIVES
WITH THE WIDOW. The lack of validity of the donation made b~ the deceased to defendant Petronila
Cervantes does not necessarily result in plaintiff having exclusive right to the disputed property. Prior to the
death of Felix Matabuena, the relationship between him and the defendant was legitimated by their
marriage on March 28. 1962. She is therefore his widow. As provided in the Civil Code, she is entitled to
one-half of the inheritance and the plaintiff, as the surviving sister to the other half.
DECISION
FERNANDO, J.:
A question of first impression is before this Court in this litigation. We are called upon to decide whether the
ban on a donation between the spouses during a marriage applies to a common-law relationship. 1 The
plaintiff, now appellant Cornelia Matabuena, a sister to the deceased Felix Matabuena, maintains that a
donation made while he was living maritally without benefit of marriage to defendant, now appellee
Petronila Cervantes, was void. Defendant would uphold its validity. The lower court, after noting that it was
made at a time before defendant was married to the donor, sustained the latters stand. Hence this appeal.
The question, as noted, is novel in character, this Court not having had as yet the opportunity of ruling on
it. A 1954 decision of the Court of Appeals, Buenaventura v. Bautista, 2 by the then Justice J. B. L. Reyes,
who was appointed to this Court later that year, is indicative of the appropriate response that should be
given. The conclusion reached therein is that a donation between common-law spouses falls within the
prohibition and is "null and void as contrary to public policy." 3 Such a view merits fully the acceptance of
this Court. The decision must be reversed.
In the decision of November 23, 1965, the lower court, after stating that in plaintiffs complaint alleging
absolute ownership of the parcel of land in question, she specifically raised the question that the donation
made by Felix Matabuena to defendant Petronila Cervantes was null and void under the aforesaid article of
the Civil Code and that defendant on the other hand did assert ownership precisely because such a donation
was made in 1956 and her marriage to the deceased did not take place until 1962, noted that when the
case was called for trial on November 19, 1965, there was stipulation of facts which it quoted. 4 Thus: "The
plaintiff and the defendant assisted by their respective counsels, jointly agree and stipulate: (1) That the
deceased Felix Matabuena owned the property in question; (2) That said Felix Matabuena executed a Deed
of Donation inter vivos in favor of Defendant, Petronila Cervantes over the parcel of land in question on
February 20, 1956, which same donation was accepted by defendant; (3) That the donation of the land to
the defendant which took effect immediately was made during the common law relationship as husband and

10

wife between the defendant-done and the now deceased donor and later said donor and done were married
on March 28, 1962; (4) That the deceased Felix Matabuena died intestate on September 13, 1962; (5) That
the plaintiff claims the property by reason of being the only sister and nearest collateral relative of the
deceased by virtue of an affidavit of self-adjudication executed by her in 1962 and had the land declared in
her name and paid the estate and inheritance taxes thereon" 5
The judgment of the lower court on the above facts was adverse to plaintiff. It reasoned out thus: "A
donation under the terms of Article 133 of the Civil Code is void if made between the spouses during the
marriage. When the donation was made by Felix Matabuena in favor of the defendant on February 20, 1956,
Petronila Cervantes and Felix Matabuena were not yet married. At that time they were not spouses. They
became spouses only when they married on March 28, 1962, six years after the deed of donation had been
executed." 6
We reach a different conclusion. While Art. 133 of the Civil Code considers as void a "donation between the
spouses during the marriage," policy considerations of the most exigent character as well as the dictates of
morality require that the same prohibition should apply to a common-law relationship. We reverse.
1. As announced at the outset of this opinion, a 1954 Court of Appeals decision, Buenaventura v. Bautista, 7
interpreting a similar provision of the old Civil Code 8 speaks unequivocally. If the policy of the law is, in the
language of the opinion of the then Justice J.B.L. Reyes of that Court, "to prohibit donations in favor of the
other consort and his descendants because of fear of undue and improper pressure and influence upon the
donor, a prejudice deeply rooted in our ancient law; porque no se engaen despojandose el uno al otro por
amor que han de consuno [according to] the Partidas (Part IV, Tit. XI, LAW IV), reiterating the rationale Ne
mutuato amore invicem spoliarentur of the Pandects (Bk. 24, Tit. 1, De donat, inter virum et uxorem); then
there is every reason to apply the same prohibitive policy to persons living together as husband and wife
without the benefit of nuptials. For it is not to be doubted that assent to such irregular connection for thirty
years bespeaks greater influence of one party over the other, so that the danger that the law seeks to avoid
is correspondingly increased. Moreover, as already pointed out by Ulpian (in his lib. 32 ad Sabinum, fr. 1),
it would not be just that such donations should subsist, lest the condition of those who incurred guilt should
turn out to be better. So long as marriage remains the cornerstone of our family law, reason and morality
alike demand that the disabilities attached to marriage should likewise attach to concubinage." 9
2. It is hardly necessary to add that even in the absence of the above pronouncement, any other conclusion
cannot stand the test of scrutiny. It would be to indict the framers of the Civil Code for a failure to apply a
laudable rule to a situation which in its essentials cannot be distinguished. Moreover, if it is at all to be
differentiated, the policy of the law which embodies a deeply-rooted notion of what is just and what is right
would be nullified if such irregular relationship instead of being visited with disabilities would be attended
with benefits. Certainly a legal norm should not be susceptible to such a reproach. If there is ever any
occasion where the principle of statutory construction that what is within the spirit of the law is as much a
part of it as what is written, this is it. Otherwise the basic purpose discernible in such codal provision would
not be attained. Whatever omission may be apparent in an interpretation purely literal of the language used
must be remedied by an adherence to its avowed objective. In the language of Justice Pablo: "El espiritu
que informa la ley debe ser la luz que ha de guiar a los tribunales en la aplicacin de sus disposiciones. 10
3. The lack of validity of the donation made by the deceased to defendant Petronila Cervantes does not
necessarily result in plaintiff having exclusive right to the disputed property. Prior to the death of Felix
Matabuena, the relationship between him and the defendant was legitimated by their marriage on March 28,
1962. She is therefore his widow. As provided for in the Civil Code, she is entitled to one-half of the
inheritance and the plaintiff, as the surviving sister, to the other half. 11
WHEREFORE, the lower court decision of November 23, 1965 dismissing the complaint with costs is
reversed. The questioned donation is declared void, with the rights of plaintiff and defendant as pro indiviso
heirs to the property in question recognized. The case is remanded to the lower court for its appropriate
disposition in accordance with the above opinion. Without pronouncement as to costs.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Barredo, Villamor and Makasiar,JJ.,
concur.
Teehankee, J, took no part.

11

[G.R. No. 57499. June 22, 1984.]

MERCEDES CALIMLIM-CANULLAS, Petitioner, v. HON. WILLELMO FORTUN, Judge, Court of First
Instance of Pangasinan, Branch I, and CORAZON DAGUINES, Respondents.
Fernandez Law Offices for Petitioner.
Francisco Pulido for Respondents.
SYLLABUS
1. CIVIL LAW; PERSONS; PROPERTY RELATIONS BETWEEN HUSBAND AND WIFE; CONJUGAL PARTNERSHIP
OF GAINS; CONSTRUCTION OF CONJUGAL HOUSE ON LAND BELONGING EXCLUSIVELY TO ONE SPOUSE
CONVERTS LAND FROM CAPITAL/PARAPHERNAL TO CONJUGAL. The determination of the issue of
whether or not the construction of a conjugal house on the exclusive property of the husband ipso facto
gave the land the character of conjugal property revolves around the interpretation to be given to the
second paragraph of Article 158 of the Civil Code. We hold that pursuant to the said vision of law both the
land and the building belong to the conjugal partnership but the conjugal partnership is indebted to the
husband for the value of the land. The spouse owning the lot becomes a creditor of the conjugal partnership
for the value of the lot (Tabotabo v. Molero, 22 Phil. 418 [1912]), which value would be reimbursed at the
liquidation of the conjugal partnership.
2. ID.; ID.; ID.; ID.; OWNERSHIP OF LAND RETROACTS TO THE TIME THE CONJUGAL BUILDING WAS
FIRST CONSTRUCTED. It is true that in the case of Maramba v. Lozano, (20 SCRA 474 [1967]), relied
upon by respondent Judge, it was held that land belonging to one of the spouses, upon which the spouses
have built a house, becomes conjugal property only when the conjugal partnership is liquidated and
indemnity paid to the owner of the land. We believe that the better rule is that enunciated by Mr. Justice
JBL Reyes in Padilia v. Paterno, 3 SCRA 678, 691, (1961), where the following was explained: "As to the
above properties, their conversion from paraphernal to conjugal assets should be deemed to retroact to the
time the conjugal buildings were first constructed thereon or at the very latest, to the time immediately
before the death of Narciso A. Padilla that ended the conjugal partnership. They can not be considered to
have become conjugal property only as to the time their values were paid to the estate of the widow
Concepcion Paterno because by that time the conjugal partnership no longer existed and it could not acquire
the ownership of said properties. The acquisition by the partnership of these properties was, under the 1943
decision, subject to the suspensive condition that their values would be reimbursed to the widow at the
liquidation of the conjugal partnership; once paid, the effects of the fulfillment of the condition should be
deemed to retroact to the date the obligation was constituted (Article 1187, New Civil Code). . . ."cralaw
virtua1aw library
3. ID.; ID.; ID.; ID.; CANNOT BE ALIENATED WITHOUT THE CONSENT OF THE WIFE; CASE AT BAR.
Since FERNANDOS lot on which he and his wife MERCEDES have built their conjugal house became conjugal
property from the time the house was first built thereon, it follows that FERNANDO could not have alienated
the house and lot to DAGUINES since MERCEDES had not given her consent to said sale (Article 166, Civil
Code).
4. ID.; OBLIGATIONS AND CONTRACTS; VOID AND INEXISTENT CONTRACTS; SALE MADE IN FAVOR OF
CONCUBINE. The contract of sale was null and void for being contrary to morals and public policy. The
sale was made by the husband in favor of a concubine after he had abandoned his family and left the
conjugal home where his wife and children lived and from whence they derived their support. That sale was
subversive of the stability of the family, a basic social institution which public policy cherishes and protects
(Article 216, Civil Code). Article 1409 of the Civil Code states inter alia that: contracts whose cause, object,
or purpose is contrary to law, morals, good customs, public order, or public policy are void and inexistent
from the very beginning. Article 1352 also provides that: "Contracts without cause, or with unlawful cause,
produce no effect whatsoever. The cause is unlawful if it is contrary to law, morals, good customs, public
order, or public policy."cralaw virtua1aw library
5. ID.; ID.; PROHIBITION AGAINST TRANSFERS OR CONVEYANCES OF PROPERTY BETWEEN SPOUSES
DURING THE MARRIAGE; PROHIBITION APPLIES TO COUPLES LIVING WITHOUT BENEFIT OF MARRIAGE;
RATIONALE. Additionally, the law emphatically prohibits the spouses from selling property to each other
subject to certain exceptions. Similarly, donations between spouses during marriage are prohibited. And this
is so because if transfers or conveyances between spouses were allowed during marriage, that would
destroy the system of conjugal partnership, a basic policy in civil law. It was also designed to prevent the
exercise of undue influence by one spouse over the other, as well as to protect the institution of marriage,

12

which is the cornerstone of family law. The prohibitions apply to a couple living as husband and wife without
benefit of marriage, otherwise, "the condition of those who incurred guilt would turn out to be better than
those in legal union." Those provisions are dictated by public interest and their criterion must be imposed
upon the will of the parties. That was the ruling in Buenaventura v. Bautista, also penned by Justice JBL
Reyes (CA) 50 O.G. 3679, and cited in Matabuena v. Cervantes, 38 SCRA 284 (1971).
DECISION
MELENCIO-HERRERA, J.:
A Petition for Review on Certiorari assailing the Decision, dated October 6, 1980, and the Resolution on the
Motion for Reconsideration, dated November 27, 1980, of the then Court of First Instance of Pangasinan,
Branch I, in Civil Case No, 15620 entitled "Corazon DAGUINES v. MERCEDES Calimlim-Canullas", upholding
the sale of a parcel of land in favor of DAGUINES but not of the conjugal house
thereon.chanroblesvirtualawlibrary
The background facts may be summarized as follows: Petitioner MERCEDES Calimlim-Canullas and
FERNANDO Canullas were married on December 19, 1962. They begot five children. They lived in a small
house on the residential land in question with an area of approximately 891 square meters, located at
Bacabac, Bugallon, Pangasinan. After FERNANDOs father died in 1965, FERNANDO inherited the land.
In 1978, FERNANDO abandoned his family and was living with private respondent Corazon DAGUINES.
During the pendency of this appeal, they were convicted of concubinage in a judgment rendered on October
27, 1981 by the then Court of First Instance of Pangasinan, Branch II, which judgment has become final.
On April 15, 1980, FERNANDO sold the subject property with the house thereon to DAGUINES for the sum
of P2,000.00. In the document of sale, FERNANDO described the house as "also inherited by me from my
deceased parents."cralaw virtua1aw library
Unable to take possession of the lot and house, DAGUINES initiated a complaint on June 19,1980 for
quieting of title and damages against MERCEDES. The latter resisted and claimed that the house in dispute
where she and her children were residing, including the coconut trees on the land, were built and planted
with conjugal funds and through her industry; that the sale of the land together with the house and
improvements to DAGUINES was null and void because they are conjugal properties and she had not given
her consent to the sale.chanrobles law library
In its original judgment, respondent Court principally declared DAGUINES "as the lawful owner of the land in
question as well as the one-half (1/2) of the house erected on said land." Upon reconsideration prayed for
by MERCEDES, however, respondent Court resolved:jgc:chanrobles.com.ph
"WHEREFORE, the dispositive portion of the Decision of this Court, promulgated on October 6, 1980, is
hereby amended to read as follows:jgc:chanrobles.com.ph
"(1) Declaring plaintiff as the true and lawful owner of the land in question and the 10 coconut trees;
(2) Declaring as null and void the sale of the conjugal house to plaintiff on April 15, 1980 (Exhibit A)
including the 3 coconut trees and other crops planted during the conjugal relation between Fernando
Canullas (vendor) and his legitimate wife, herein defendant Mercedes Calimlim-Canullas;
x

x"

The issues posed for resolution are (1) whether or not the construction of a conjugal house on the exclusive
property of the husband ipso facto gave the land the character of conjugal property; and (2) whether or not
the sale of the lot together with the house and improvements thereon was valid under the circumstances
surrounding the transaction.
The determination of the first issue revolves around the interpretation to be given to the second paragraph
of Article 158 of the Civil Code, which reads:jgc:chanrobles.com.ph
"x

"Buildings constructed at the expense of the partnership during the marriage on land belonging to one of

13

the spouses also pertain to the partnership, but the value of the land shall be reimbursed to the spouse who
owns the same."cralaw virtua1aw library
We hold that pursuant to the foregoing provision both the land and the building belong to the conjugal
partnership but the conjugal partnership is indebted to the husband for the value of the land. The spouse
owning the lot becomes a creditor of the conjugal partnership for the value of the lot, 1 which value would
be reimbursed at the liquidation of the conjugal partnership. 2
In his commentary on the corresponding provision in the Spanish Civil Code (Art. 1404), Manresa
stated:jgc:chanrobles.com.ph
"El articulo cambia la doctrina; los edificios construidos durante el matrimonio en suelo propio de uno de los
conjuges son gananciales, abonandose el valor del suelo al conjuge a quien pertenezca."cralaw virtua1aw
library
It is true that in the case of Maramba v. Lozano, 3 relied upon by respondent Judge, it was held that the
land belonging to one of the spouses, upon which the spouses have built a house, becomes conjugal
property only when the conjugal partnership is liquidated and indemnity paid to the owner of the land. We
believe that the better rule is that enunciated by Mr. Justice JBL Reyes in Padilla v. Paterno, 3 SCRA 678,
691 (1961), where the following was explained:jgc:chanrobles.com.ph
"As to the above properties, their conversion from paraphernal to conjugal assets should be deemed to
retroact to the time the conjugal buildings were first constructed thereon or at the very latest, to the time
immediately before the death of Narciso A. Padilla that ended the conjugal partnership. They can not be
considered to have become conjugal property only as of the time their values were paid to the estate of the
widow Concepcion Paterno because by that time the conjugal partnership no longer existed and it could not
acquire the ownership of said properties. The acquisition by the partnership of these properties was, under
the 1943 decision, subject to the suspensive condition that their values would be reimbursed to the widow
at the liquidation of the conjugal partnership; once paid, the effects of the fulfillment of the condition should
be deemed to retroact to the date the obligation was constituted (Art. 1187, New Civil Code). . . ."cralaw
virtua1aw library
The foregoing premises considered, it follows that FERNANDO could not have alienated the house and lot to
DAGUINES since MERCEDES had not given her consent to said sale. 4
Anent the second issue, we find that the contract of sale was null and void for being contrary to morals and
public policy. The sale was made by a husband in favor of a concubine after he had abandoned his family
and left the conjugal home where his wife and children lived and from whence they derived their support.
That sale was subversive of the stability of the family, a basic social institution which public policy cherishes
and protects. 5
Article 1409 of the Civil Code states inter alia that: contracts whose cause, object, or purpose is contrary to
law, morals, good customs, public order, or public policy are void and inexistent from the very beginning.
Article 1352 also provides that: "Contracts without cause, or with unlawful cause, produce no effect
whatsoever. The cause is unlawful if it is contrary to law, morals, good customs, public order, or public
policy."cralaw virtua1aw library
Additionally, the law emphatically prohibits the spouses from selling property to each other subject to
certain exceptions. 6 Similarly, donations between spouses during marriage are prohibited. 7 And this is so
because if transfers or conveyances between spouses were allowed during marriage, that would destroy the
system of conjugal partnership, a basic policy in civil law. It was also designed to prevent the exercise of
undue influence by one spouse over the other, 8 as well as to protect the institution of marriage, which is
the cornerstone of family law. The prohibitions apply to a couple living as husband and wife without benefit
of marriage, otherwise, "the condition of those who incurred guilt would turn out to be better than those in
legal union." Those provisions are dictated by public interest and their criterion must be imposed upon the
will of the parties. That was the ruling in Buenaventura v. Bautista, also penned by Justice JBL Reyes (CA)
50 O.G. 3679, and cited in Matabuena v. Cervantes. 9 We quote hereunder the pertinent dissertation on this
point:jgc:chanrobles.com.ph
"We reach a different conclusion. While Art. 133 of the Civil Code considers as void a donation between the
spouses during the marriage, policy considerations of the most exigent character as well as the dictates of
morality require that the same prohibition should apply to a common-law relationship.
"As announced in the outset of this opinion, a 1954 Court of Appeals decision, Buenaventura v. Bautista, 50

14

OG 3679, interpreting a similar provision of the old Civil Code speaks unequivocally. If the policy of the law
is, in the language of the opinion of the then Justice J.B.L. Reyes of that Court, to prohibit donations in
favor of the other consort and his descendants because of fear of undue influence and improper pressure
upon the donor, a prejudice deeply rooted in our ancient law, . . ., then there is every reason to apply the
same prohibitive policy to persons living together as husband and wife without benefit of nuptials. For it is
not to be doubted that assent to such irregular connection for thirty years bespeaks greater influence of one
party over the other, so that the danger that the law seeks to avoid is correspondingly increased. Moreover,
as pointed out by Ulpian (in his lib 32 ad Sabinum, fr. 1), It would not be just that such donations should
subsist, lest the conditions of those who incurred guilt should turn out to be better. So long as marriage
remains the cornerstone of our family law, reason and morality alike demand that the disabilities attached
to marriage should likewise attach to concubinage" (Emphasis supplied).
WHEREFORE, the Decision of respondent Judge, dated October 6, 1980, and his Resolution of November 27,
1980 on petitioners Motion for Reconsideration, are hereby set aside and the sale of the lot, house and
improvements in question, is hereby declared null and void. No costs.
SO ORDERED.

15

[G.R. No. L-35702. May 29, 1973.]

DOMINGO D. RUBIAS, Plaintiff-Appellant, v. ISAIAS BATILLER, Defendant-Appellee.
Gregorio M. Rubias, for Plaintiff-Appellant.
Vicente R. Acsay, for Defendant-Appellee.
DECISION
TEEHANKEE, J.:
In this appeal certified by the Court of Appeals to this Court as involving purely legal questions, we affirm
the dismissal order rendered by the Iloilo court of first instance after pre-trial and submittal of the pertinent
documentary exhibits.
Such dismissal was proper, plaintiff having no cause of action, since it was duly established in the record
that the application for registration of the land in question filed by Francisco Militante, plaintiffs vendor and
predecessor in interest, had been dismissed by decision of 1952 of the land registration court as affirmed by
final judgment in 1958 of the Court of Appeals and hence, there was no title or right to the land that could
be transmitted by the purported sale to plaintiff.
As late as 1964, the Iloilo court of first instance had in another case of ejectment likewise upheld by final
judgment defendants "better right to possess the land in question . . . having been in the actual possession
thereof under a claim of title many years before Francisco Militante sold the land to the plaintiff."cralaw
virtua1aw library
Furthermore, even assuming that Militante had anything to sell, the deed of sale executed in 1956 by him in
favor of plaintiff at a time when plaintiff was concededly his counsel of record in the land registration case
involving the very land in dispute (ultimately decided adversely against Militante by the Court of Appeals
1958 judgment affirming the lower courts dismissal of Militantes application for registration) was properly
declared inexistent and void by the lower court, as decreed by Article 1409 in relation to Article 1491 of the
Civil Code.
The appellate court, in its resolution of certification of 25 July 1972, gave the following backgrounder of the
appeal at bar:jgc:chanrobles.com.ph
"On August 31, 1964, plaintiff Domingo D. Rubias, a lawyer, filed a suit to recover the ownership and
possession of certain portions of lot under Psu-99791 located in Barrio General Luna, Barotac Viejo, Iloilo
which he bought from his father-in-law, Francisco Militante in 1956 against its present occupant defendant,
Isaias Batiller, who allegedly entered said portions of the lot on two occasions in 1945 and in 1959.
Plaintiff prayed also for damages and attorneys fees. (pp. 1-7, Record on Appeal). In his answer with
counter-claim defendant claims the complaint of the plaintiff does not state a cause of action, the truth of
the matter being that he and his predecessors-in-interest have always been in actual, open and continuous
possession since time immemorial under claim of ownership of the portions of the lot in question and for the
alleged malicious institution of the complaint he claims he has suffered moral damages in the amount of
P2,000.00, as well as the sum of P500.00 for attorneys fees. . . .
"On December 9, 1964, the trial court issued a pre-trial order, after a pre-trial conference between the
parties and their counsel which order reads as follows:chanrob1es virtual 1aw library
When this case was called for a pre-trial conference today, the plaintiff appeared assisted by himself and
Atty. Gregorio M. Rubias. The defendant also appeared, assisted by his counsel Atty. Vicente R. Acsay.
A. During the pre-trial conference, the parties have agreed that the following facts are attendant in this case
and that they will no longer introduce any evidence, testimonial or documentary to prove them:chanrob1es
virtual 1aw library
1. That Francisco Militante claimed ownership of a parcel of land located in the Barrio of General Luna,
municipality of Barotac Viejo, province of Iloilo, which he caused to be surveyed on July 18-31, 1934,
whereby he was issued a plan Psu-99791 (Exhibit B). (The land claimed contained an area of 171.3561
hectares.)

16

2. Before the war with Japan, Francisco Militante filed with the Court of First Instance of Iloilo an application
for the registration of title of the land technically described in Psu-99791 (Exh.B) opposed by the Director
of Lands, the Director of Forestry and other oppositors. However, during the war with Japan, the record of
the case was lost before it was heard, so after the war Francisco Militante petitioned this Court to
reconstitute the record of the case. The record was reconstituted in the Court of First Instance of Iloilo and
docketed as Land Case No. R-695, GLRO Rec. No. 54852. The Court of First Instance heard the land
registration case on November 11, 1952, and after trial this Court dismissed the application for registration.
The applicant, Francisco Militante, appealed from the decision of this Court to the Court of Appeals where
the case was docketed as CA-G.R. No. 13497-R.
3. Pending the disposal of the appeal in CA-G.R. No. 13497-R and more particularly on June 18, 1956,
Francisco Militante sold to the plaintiff Domingo Rubias, the land technically described in Psu-99791
(Exh.A). The sale was duly recorded in the Office of the Register of Deeds for the Province of Iloilo as Entry
No. 13609 on July 14, 1960 (Exh.A-1).
(NOTE: As per the deed of sale, Exh. A, what Militante purportedly sold to plaintiff-appellant, his son-in-law,
for the sum of P2,000.00 was "a parcel of untitled land having an area of 144.9072 hectares . . . surveyed
under Psu 99791 . . . (and) subject to the exclusions made by me, under (case) CA-13497, Land
Registration Case No. R-695, G.L.R.O. No. 54852, Court of First Instance of the province of Iloilo. These
exclusions referred to portions of the original area of over 171 hectares originally claimed by Militante as
applicant, but which he expressly recognized during the trial to pertain to some oppositors, such as the
Bureau of Public Works and Bureau of Forestry and several other individual occupants and accordingly
withdrew his application over the same. This is expressly made of record in Exh. A, which is the Court of
Appeals decision of 22 September 1958 confirming the land registration courts dismissal of Militantes
application for registration.)
4. On September 22, 1958 the Court of Appeals in CA-G.R. No. 13497-R promulgated its judgment
confirming the decision of this Court in Land Case No. R-695, GLRO Rec. No. 54852 which dismissed the
application for Registration filed by Francisco Militante (Exh.I).
5. Domingo Rubias declared the land described in Exh.B for taxation purposes under Tax Dec. No. 8585
(Exh.C) for 1957; Tax Dec. Nos. 9533 (Exh.C-1) and 10019 (Exh.C-3) for the year 1961; Tax Dec. No.
9868 (Exh.C-2) for the year 1964, paying the land taxes under Tax Dec. No. 8585 and 9533 (Exh.D, D-1
& G-6).
6. Francisco Militante immediate predecessor-in-interest of the plaintiff, has also declared the land for
taxation purposes under Tax Dec. No. 5172 in 1940 (Exh.E) for 1945; under Tax Dec. No. T-86 (Exh.E-1)
for 1948; under Tax Dec. No. 7122 (Exh.2), and paid the land taxes for 1940 (Exhs.G and G-7), for 1945
46 (Exh.G-1) for 1947 (Exh.G-2), for 1947 & 1948 (Exh.G-3), for 1948 (Exh.G-4), and for 1948 and
1949 (Exh.G -5).
7. Tax Declaration No. 2434 in the name of Liberato Demontao for the land described therein (Exh.F) was
cancelled by Tax. Dec. No. 5172 of Francisco Militante (Exh.E). Liberato Demontao paid the land tax
under Tax Dec. No. 2434 on Dec. 20, 1939 for the years 1938 (50%) and 1959 (Exh.H).
8. The defendant had declared for taxation purposes Lot No. 2 of the Psu-155241 under Tax Dec. Nos. 8583
for 1957 and a portion of Lot No. 2, Psu-155241, for 1945 under Tax Dec. No. 8584 (Exh.2-A.) Tax No.
8583 (Exh.2) was revised by Tax Dec. No. 9498 in the name of the defendant (Exh.2-B, and Tax Dec. No.
8584 (Exh.2-A) was cancelled by Tax Dec. No. 9584 also in the name of the defendant (Exh.2-C). The
defendant paid the land taxes for Lot 2, Psu-155241, on Nov. 9, 1960 for the years 1945 and 1946, for the
year 1950, and for the year 1960 as shown by the certificate of the treasurer (Exh.3). The defendant may
present to the Court other land taxes receipts for the payment of taxes for this lot.
9. The land claimed by the defendant as his own was surveyed on June 6 and 7, 1956, and a plan approved
by Director of Lands on November 15, 1956 was issued, identified as Psu 155241 (Exh.5).
10. On April 22, 1960, the plaintiff filed a forcible Entry and Detainer case against Isaias Batiller in the
Justice of the Peace Court of Barotac Viejo, Province of Iloilo (Exh.4) to which the defendant Isaias Batiller
filed his answer on August 29, 1960 (Exh 4-A). The Municipal Court of Barotac Viejo after trial, decided the
case on May 10, 1961 in favor of the defendant and against the plaintiff (Exh.4-B). The plaintiff appealed
from the decision of the Municipal Court of Barotac Viejo which was docketed in this Court as Civil Case No.
5750 on June 3, 1961 to which the defendant, Isaias Batiller, on June 13, 1961 filed his answer (Exh.4-C).
And this Court after the trial, decided the case on November 26, 1964, in favor of the defendant, Isaias
Batiller and against the plaintiff (Exh.4-D).

17

(NOTE: As per Exh. 4-B, which is the Iloilo court of first instance decision of 26 November 1964 dismissing
plaintiffs therein complaint for ejectment against defendant, the Iloilo court expressly found "that plaintiffs
complaint is unjustified, intended to harass the defendant" and "that the defendant, Isaias Batiller, has a
better right to possess the land in question described in Psu 155241 (Exh. "3"), Isaias Batiller having been
in the actual physical possession thereof under a claim of title many years before Francisco Militante sold
the land to the plaintiff; hereby dismissing plaintiffs complaint and ordering the plaintiff to pay the
defendant attorneys fees . . .")
B. During the trial of this case on the merit, the plaintiff will prove by competent evidence the
following:chanrob1es virtual 1aw library
1. That the land he purchased from Francisco Militante under Exh.A was formerly owned and possessed by
Liberato Demontao, but that on September 6, 1919 the land was sold at public auction by virtue of a
judgment in a Civil Case entitled Edw. J. Pflieder, plaintiff v. Liberato Demontao, Francisco Balladeros and
Gregorio Yulo, defendants, of which Yap Pongco was the purchaser (Exh.1-2). The sale was registered in
the Office of the Register of Deeds of Iloilo on August 4, 1920, under Primary Entry No. 69 (Exh.1-3) and a
definite Deed of Sale was executed by Constantino A. Canto, provincial Sheriff of Iloilo, on Jan. 19, 1934 in
favor of Yap Pongco (Exh.1), the sale having been registered in the Office of the Register of Deeds of Iloilo
on February 10, 1934 (Exh.1-1).
2. On September 22, 1934, Yap Pongco sold this land to Francisco Militante as evidenced by a notarial deed
(Exh.J) which was registered in the Registry of Deeds on May 13, 1940 (Exh.J-1).
3. That plaintiff suffered damages alleged in his complaint.
C. Defendants, on the other hand will prove by competent evidence during the trial of this case the following
facts:chanrob1es virtual 1aw library
1. That Lot No. 2 of the Psu-155241 (Exh.5) was originally owned and possessed by Felipe Batiller,
grandfather of the defendant, who was succeeded by Basilio Batiller, on the death of the former in 1920, as
his sole heir. Isaias Batiller succeeded his father, Basilio Batiller, in the ownership and possession being
actual, open, public, peaceful and continuous in the concept of an owner, exclusive of any other rights and
adverse to all other claimants.
2. That the alleged predecessors in interest of the plaintiff have never been in the actual possession of the
land and that they never had any title thereto.
3. That Lot No. 2, Psu 155241, the subject of Free Patent application of the defendant has been approved.
4. The damages suffered by the defendant as alleged in his counterclaim." 1
The appellate court further related the developments of the case, as follows:jgc:chanrobles.com.ph
"On August 17, 1965, defendants counsel manifested in open court that before any trial on the merit of the
case could proceed he would file a motion to dismiss plaintiffs complaint which he did, alleging that plaintiff
does not have a cause of action against him because the property in dispute which he (plaintiff) allegedly
bought from his father-in-law, Francisco Militante was the subject matter of LRC No. 695 filed in the CFI of
Iloilo, which case was brought on appeal to this Court and docketed as CA-G.R. No. 13497-R in which
aforesaid case plaintiff was the counsel on record of his father-in-law, Francisco Militante. Invoking Arts.
1409 and 1491 of the Civil Code which reads:chanrob1es virtual 1aw library
Art. 1409. The following contracts are inexistent and void from the beginning:chanrob1es virtual 1aw
library
x

(7) Those expressly prohibited or declared void by law.

ART. 1491. The following persons cannot acquire any purchase, even at a public or judicial auction, either
in person or through the mediation of another:chanrob1es virtual 1aw library
x

18

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and
employees connected with the administration of justice, the property and rights in litigation or levied upon
an execution before the court within whose jurisdiction or territory their exercise their respective functions;
this prohibition includes the act of acquiring by assignment and shall apply to lawyers, with respect to the
property and rights which may be the object of any litigation in which they may take part by virtue of their
profession.
defendant claims that plaintiff could not have acquired any interest in the property in dispute as the contract
he (plaintiff) had with Francisco Militante was inexistent and void (See pp. 22, 31, Record on Appeal).
Plaintiff strongly opposed defendants motion to dismiss claiming that defendant can not invoke Articles
1409 and 1491 of the Civil Code as Article 1422 of the same Code provides that The defense of illegality of
contracts is not available to third persons whose interests are not directly affected (See pp. 32-36, Record
on Appeal).
"On October 18, 1965, the lower court issued an order dismissing plaintiffs complaint (pp. 42-49, Record on
Appeal.) In the aforesaid order of dismissal, the lower court practically agreed with defendants contention
that the contract (Exh. A) between plaintiff and Francisco Militante was null and void. In due season plaintiff
filed a motion for reconsideration (pp. 50-56, Record on Appeal) which was denied by the lower court on
January 14, 1966 (p. 57, Record on Appeal).
"Hence, this appeal by plaintiff from the orders of October 18, 1966 and January 14, 1966.
"Plaintiff-appellant imputes to the lower court the following errors:chanrob1es virtual 1aw library
1. The lower court erred in holding that the contract of sale between the plaintiff-appellant and his fatherin-law, Francisco Militante, Sr., now deceased, of the property covered by Plan Psu-99791, (Exh.A) was
void, not voidable because it was made when plaintiff-appellant was the counsel of the latter in the Land
Registration case.
2. The lower court erred in holding that the defendant-appellee is an interested person to question the
validity of the contract of sale between plaintiff-appellant and the deceased, Francisco Militante, Sr.
3. The lower court erred in entertaining the motion to dismiss of the defendant-appellee after he had
already filed his answer, and after the termination of the pre-trial, when the said notion to dismiss raised a
collateral question.
4. The lower court erred in dismissing the complaint of the plaintiff-appellant."
The appellate court concluded that plaintiffs "assignment of errors gives rise to two (2) legal posers (1)
whether or not the contract of sale between appellant and his father-in-law, the late Francisco Militante over
the property subject of Plan Psu-99791 was void because it was made when plaintiff was counsel of his
father-in-law in a land registration case involving the property in dispute; and (2) whether or not the lower
court was correct in entertaining defendant-appellees motion to dismiss after the latter had already filed his
answer and after he (defendant) and plaintiff-appellant had agreed on some matters in a pre-trial
conference. Hence, its elevation of the appeal to this Court as involving pure questions of law.
It is at once evident from the foregoing narration that the pre-trial conference held by the trial court at
which the parties with their counsel agreed and stipulated on the material and relevant facts and submitted
their respective documentary exhibits as referred to in the pre-trial order, supra, 2 practically amounted to
a fulldress trial which placed on record all the facts and exhibits necessary for adjudication of the case.
The three points on which plaintiff reserved the presentation of evidence at the trial dealing with the source
of the alleged right and title of Francisco Militantes predecessors, supra, 3 actually are already made of
record in the stipulated facts and admitted exhibits. The chain of Militantes alleged title and right to the
land as supposedly traced back to Liberato Demontao was actually asserted by Militante (and his vendee,
lawyer and son-in-law, herein plaintiff) in the land registration case and rejected by the Iloilo land
registration court which dismissed Militantes application for registration of the land. Such dismissal, as
already stated, was affirmed by the final judgment in 1958 of the Court of Appeals. 4
The four points on which defendant on his part reserved the presentation of evidence at the trial dealing
with his and his ancestors continuous, open, public and peaceful possession in the concept of owner of the
land and the Director of Lands approval of his survey plan thereof, supra, 5 are likewise already duly
established facts of record, in the land registration case as well as in the ejectment case wherein the Iloilo

19

court of first instance recognized the superiority of defendants right to the land as against plaintiff.
No error was therefore committed by the lower court in dismissing plaintiffs complaint upon defendants
motion after the pre-trial.
1. The stipulated facts and exhibits of record indisputably established plaintiff s lack of cause of action and
justified the outright dismissal of the complaint. Plaintiffs claim of ownership to the land in question was
predicated on the sale thereof for P2,000.00 made in 1956 by his father-in-law, Francisco Militante, in his
favor, at a time when Militantes application for registration thereof had already been dismissed by the Iloilo
land registration court and was pending appeal in the Court of Appeals.
With the Court of Appeals 1958 final judgment affirming the dismissal of Militantes application for
registration, the lack of any rightful claim or title of Militante to the land was conclusively and decisively
judicially determined. Hence, there was no right or title to the land that could be transferred or sold by
Militantes purported sale in 1956 in favor of plaintiff.
Manifestly, then plaintiffs complaint against defendant, to be declared absolute owner of the land and to be
restored to possession thereof with damages was bereft of any factual or legal basis.
2. No error could be attributed either to the lower courts holding that the purchase by a lawyer of the
property in litigation from his client is categorically prohibited by Article 1491, paragraph (5) of the
Philippine Civil Code, reproduced supra; 6 and that consequently, plaintiffs purchase of the property in
litigation from his client (assuming that his client could sell the same, since as already shown above, his
clients claim to the property was defeated and rejected) was void and could produce no legal effect, by
virtue of Article 1409, paragraph (7) of our Civil Code which provides that contracts "expressly prohibited or
declared void by law" are "inexistent and void from the beginning" and that" (T)hese contracts cannot be
ratified. Neither can the right to set up the defense of illegality be waived."cralaw virtua1aw library
The 1911 case of Wolfson v. Estate of Martinez 7 relied upon by plaintiff as holding that a sale of property in
litigation to the party litigants lawyer "its not void but voidable at the election of the vendor" was correctly
held by the lower court to have been superseded by the later 1929 case of Director of Lands v. Abagat. 8 In
this later case of Abagat, the Court expressly cited two antecedent cases involving the same transaction of
purchase of property in litigation by the lawyer which was expressly declared invalid under Article 1459 of
the Civil Code of Spain (of which Article 1491 of our Civil Code of the Philippines is the counterpart) upon
challenge thereof not by the vendor-client but by the adverse parties against whom the lawyer was seeking
to enforce his rights as vendee thus acquired.
These two antecedent cases thus cited in Abagat clearly superseded (without so expressly stating) the
previous ruling in Wolfson:jgc:chanrobles.com.ph
"The spouses, Juan Soriano and Vicenta Macaraeg, were the owners of twelve parcels of land. Vicenta
Macaraeg died in November, 1909, leaving a large number of collateral heirs but no descendants. Litigation
between the surviving husband Juan Soriano, and the heirs of Vicenta Macaraeg immediately arose, and the
herein appellant Sisenando Palarca acted as Sorianos lawyer. On May 2, 1918, Palarca filed an application
for the registration of the land described in the deed. After hearing, the Court of First Instance declared that
the deed was invalid by virtue of the provisions of article 1459 of the Civil Code, which provides lawyers and
solicitors from purchasing property rights involved in any litigation in which they may take part by virtue of
their profession. The application for registration was consequently denied, and upon appeal by Palarca to
the Supreme Court, the judgment of the lower court was affirmed by a decision promulgated November 16,
1925. (G.R. No. 24329, Palarca v. Director of Lands, not reported.)
"In the meantime cadastral case No. 30 of the Province of Tarlac was instituted, and on August 21, 1923,
Eleuteria Macaraeg, as administratrix of the estate of Vicenta Macaraeg, filed claims for the parcels in
question. Buenaventura Lavitoria, administrator of the estate of Juan Soriano, did likewise and so did
Sisenando Palarca. In a decision dated June 21, 1927, the Court of First Instance, Judge Carballo presiding,
rendered judgment in favor of Palarca and ordered the registration of the land in his name. Upon appeal to
this court by the administrators of the estates of Juan Soriano and Vicenta Macaraeg, the judgment of the
court below was reversed and the land adjudicated to the two estates as conjugal property of the deceased
spouses. (G.R. No. 28226, Director of Lands v. Abagat, promulgated May 21, 1928, not reported.)" 9
In the very case of Abagat itself, the Court, again affirming the invalidity and nullity of the lawyers
purchase of the land in litigation from his client, ordered the issuance of a writ of possession for the return
of the land by the lawyer to the adverse parties without reimbursement of the price paid by him and other
expenses, and ruled that "the appellant Palarca is a lawyer and is presumed to know the law. He must,
therefore, from the beginning, have been well aware of the defect in his title and is, consequently, a

20

possessor in bad faith."cralaw virtua1aw library

As already stated, Wolfson and Abagat were decided with relation to Article 1459 of the Civil Code of Spain
then adopted here, until it was superseded on August 30, 1950 by the Civil Code of the Philippines whose
counterpart provision is Article 1491.
Article 1491 of our Civil Code (like Article 1459 of the Spanish Civil Code) prohibits in its six paragraphs
certain persons, by reason of the relation of trust or their peculiar control over the property, from acquiring
such property in their trust or control either directly or indirectly and "even at a public or judicial auction,"
as follows: (1) guardians; (2) agents; (3) administrators; (4) public officers and employees; judicial officers
and employees, prosecuting attorneys, and lawyers; and (6) others especially disqualified by law.
In Wolfson, which involved the sale and assignment of a money judgment by the client to the lawyer,
Wolfson, whose right to so purchase the judgment was being challenged by the judgment debtor, the Court,
through Justice Moreland, then expressly reserved decision on "whether or not the judgment in question
actually falls within the prohibition of the article" and held only that the sales "voidability can not be
asserted by one not a property to the transaction or his representative," citing from Manresa 10 that"
(C)onsidering the question from the point of view of the civil law, the view taken by the code, we must limit
ourselves to classifying as void all acts done contrary to the express prohibition of the statute. Now then: As
the code does not recognize such nullity by the mere operation of law, the nullity of the acts hereinbefore
referred to must be asserted by the person having the necessary legal capacity to do so and decreed by a
competent court." 11
The reason thus given by Manresa in considering such prohibited acquisitions under Article 1459 of the
Spanish Civil Code as merely voidable at the instance and option of the vendor and not void "that the
Code does not recognize such nullity de pleno derecho" is no longer true and applicable to our own
Philippine Civil Code which does recognize the absolute nullity of contracts "whose cause, object, or purpose
is contrary to law, morals, good customs, public order or public policy" or which are "expressly prohibited or
declared void by law" and declares such contracts "inexistent and void from the beginning." 12
The Supreme Court of Spain and modern authors have likewise veered from Manresas view of the Spanish
codal provision itself. In its sentencia of 11 June 1966, the Supreme Court of Spain ruled that the
prohibition of Article 1459 of the Spanish Civil Code is based on public policy, that violation of the
prohibition contract cannot be validated by confirmation or ratification, holding that:jgc:chanrobles.com.ph
". . . la prohibicion que el articulo 1459 del C.C. establece respecto a los administradores y apoderados, la
cual tiene conforme a la doctrina de esta Sala, contenida entre otras, en S. de 27-5-1959, un fundamento
de orden moral, dando lugar la violacion de esta regla a la nulidad de pleno derecho del acto" negocio
celebrado, . . . y porque al realizarse el acto juridico en contravencion con una prohibicion legal, afectante al
orden publico, no cabe con efecto alguno la aludida ratificacion . . ." 13
The criterion of nullity of such prohibited contracts under Article 1459 of the Spanish Civil Code (Article
1491 of our Civil Code) as a matter of public order and policy as applied by the Supreme Court of Spain to
administrators and agents in its above-cited decision should certainly apply with greater reason to judges,
judicial officers, fiscals and lawyers under paragraph 5 of the codal article.
Citing the same decision of the Supreme Court of Spain, Gullon Ballesteros, in his "Curso de Derecho Civil,
(Contratos Especiales)" (Madrid, 1968) p. 18, affirms that, with respect to Article 1459, Spanish Civil
Code:jgc:chanrobles.com.ph
"Que caracter tendra la compra que se realice por estas personas? Por supuesto no cabe duda de que en el
caso del (art.) 1459, 4 y 5, la nulidad es absoluta porque el motivo de la prohibicion es de orden publico."
14
Perez Gonzales concurs in such view, stating that "Dado el caracter prohibitivo del precepto, la
consequencia de la infraccion es la nulidad radical y ex lege." 15
Castan, quoting Manresas own observation that
"El fundamento de esta prohibicion es clarisimo. No se trata con este precepto tan solo de quitar la ocasion
al fraude; persiguese, ademas, el proposito de rodear a las personas que intervienen en la admunistracion
de justicia de todos los restigios que necesitan para ejercer su ministerio, librandolos de toda sospecha, que
aunque fuere infundada, redundar!a en descredito de la institucion." 16
arrives at the contrary and now accepted view that "Puede considerarse en nuestro derecho inexistente o

21

radicalmente nulo el contrato en los siguentes cases: a) . . .; b) cuando el contrato se ha celebrado en

violacion de una prescripcion o prohibicion legal, fundada sobre motivos de orden publico (hipotesis del art.
4 del Codigo) . . ." 17
It is noteworthy that Castans rationale for his conclusion that fundamental considerations of public policy
render void and inexistent such expressly prohibited purchase (e.g. by public officers and employees of
government property entrusted to them and by justices, judges, fiscals and lawyers of property and rights
in litigation submitted to or handled by them, under Article 1491, paragraphs (4) and (5) of our Civil Code)
has been adopted in a new article of our Civil Code, viz, Article 1409 declaring such prohibited contracts as
"inexistent and void from the beginning." 18
Indeed, the nullity of such prohibited contracts is definite and permanent and cannot be cured by
ratification. The public interest and public policy remain paramount and do not permit of compromise or
ratification. In this aspect, the permanent disqualification of public and judicial officers and lawyers
grounded on public policy differs from the first three cases of guardians, agents and administrators (Article
1491, Civil Code), as to whose transactions, it has been opined that they may be "ratified" by means of and
in "the form of a new contract, in which case its validity shall be determined only by the circumstances at
the time of execution of such new contract. The causes of nullity which have ceased to exist cannot impair
the validity of the new contract. Thus, the object which was illegal at the time of the first contract, may
have already become lawful at the time of the ratification or second contract; or the service which v. as
impossible may have become possible; or the intention which could not be ascertained may have been
clarified by the parties. The ratification or second contract would then be valid from its execution; however,
it does not retroact to the date of the first contract." 19
As applied to the case at bar, the lower court therefore properly acted upon defendant appellants motion to
dismiss on the ground of nullity of plaintiffs alleged purchase of the land, since its juridical effects and
plaintiffs alleged cause of action founded thereon were being asserted against defendant-appellant. The
principles governing the nullity of such prohibited contracts and judicial declaration of their nullity have been
well restated by Tolentino in his treatise on our Civil Code, as follows:jgc:chanrobles.com.ph
"Parties Affected. Any person may invoke the inexistence of the contract whenever juridical effects
founded thereon are asserted against him. Thus, if there has been a void transfer of property, the transferor
can recover it by the accion reivindicatoria; and any possessor may refuse to deliver it to the transferee,
who cannot enforce the contract. Creditors may attach property of the debtor which has been alienated by
the latter under a void contract; a mortgagee can allege the inexistence of a prior encumbrance; a debtor
can assert the nullity of an assignment of credit as a defense to an action by the assignee.
"Action On Contract. Even when the contract is void or inexistent, an action is necessary to declare its
inexistence, when it has already been fulfilled. Nobody can take the law into his own hands; hence, the
intervention of the competent court is necessary to declare the absolute nullity of the contract and to decree
the restitution of what has been given under it. The judgment, however, will retroact to the very day when
the contract was entered into.
"If the void contract is still fully executory, no party need bring an action to declare its nullity; but if any
party should bring an action to enforce it, the other party can simply set up the nullity as a defense." 20
ACCORDINGLY, the order of dismissal appealed from is hereby affirmed, with costs in all instances against
plaintiff-appellant. So ordered.
Makalintal, Actg. C . J., Zaldivar, Castro, Fernando, Barredo, Makasiar, Antonio and Esguerra, JJ., concur.

22

[G.R. No. L-8477. May 31, 1956.]

THE PHILIPPINE TRUST COMPANY, as Guardian of the Property of the minor, MARIANO L.
BERNARDO, Petitioner, vs. SOCORRO ROLDAN, FRANCISCO HERMOSO, FIDEL C. RAMOS and
EMILIO CRUZ, Respondents.
DECISION
BENGZON, J.:
As guardian of the property of the minor Mariano L. Bernardo, the Philippine Trust Company filed in the
Manila court of first instance a complaint to annul two contracts regarding 17 parcels of
land:chanroblesvirtuallawlibrary (a) sale thereof by Socorro Roldan, as guardian of said minor, to Fidel C.
Ramos; chan roblesvirtualawlibraryand (b) sale thereof by Fidel C. Ramos to Socorro Roldan personally. The
complaint likewise sought to annul a conveyance of four out of the said seventeen parcels by Socorro
Roldan to Emilio Cruz.
The action rests on the proposition that the first two sales were in reality a sale by the guardian to herself
therefore, null and void under Article 1459 of the Civil Code. As to the third conveyance, it is also
ineffective, because Socorro Roldan had acquired no valid title to convey to Cruz.
The material facts of the case are not complicated. These 17 parcels
part of the properties inherited by Mariano L. Bernardo from his father,
of his minority, guardianship proceedings were instituted, wherein
guardian. She was the surviving spouse of Marcelo Bernardo, and
Bernardo.

located in Guiguinto, Bulacan, were

Marcelo Bernardo, deceased. In view
Socorro Roldan was appointed his
the stepmother of said Mariano L.

On July 27, 1947, Socorro Roldan filed in said guardianship proceedings (Special Proceeding 2485, Manila),
a motion asking for authority to sell as guardian the 17 parcels for the sum of P14,700 to Dr. Fidel C.
Ramos, the purpose of the sale being allegedly to invest the money in a residential house, which the minor
desired to have on Tindalo Street, Manila. The motion was granted.
On August 5, 1947 Socorro Roldan, as guardian, executed the proper deed of sale in favor of her brother-inlaw Dr. Fidel C. Ramos (Exhibit A-1), and on August 12, 1947 she asked for, and obtained, judicial
confirmation of the sale. On August 13, 1947, Dr. Fidel C. Ramos executed in favor of Socorro Roldan,
personally, a deed of conveyance covering the same seventeen parcels, for the sum of P15,000 (Exhibit A2). And on October 21, 1947 Socorro Roldan sold four parcels out of the seventeen to Emilio Cruz for
P3,000, reserving to herself the right to repurchase (Exhibit A-3).
The Philippine Trust Company replaced Socorro Roldan as guardian, on August 10, 1948. And this litigation,
started two months later, seeks to undo what the previous guardian had done. The step-mother in effect,
sold to herself, the properties of her ward, contends the Plaintiff, and the sale should be annulled because it
violates Article 1459 of the Civil Code prohibiting the guardian from purchasing either in person or through
the mediation of another the property of her ward.
The court of first instance, following our decision in Rodriguez vs. Mactal, 60 Phil. 13 held the article was not
controlling, because there was no proof that Fidel C. Ramos was a mere intermediary or that the latter had
previously agreed with Socorro Roldan to buy the parcels for her benefit.
However, taking the former guardian at her word - she swore she had repurchased the lands from Dr. Fidel
C. Ramos to preserve it and to give her protege opportunity to redeem the court rendered judgment
upholding the contracts but allowing the minor to repurchase all the parcels by paying P15,000, within one
year.
The Court of Appeals affirmed the judgment, adding that the minor knew the particulars of, and approved
the transaction, and that only clear and positive evidence of fraud or bad faith, and not mere insinuations
and inferences will overcome the presumptions that a sale was concluded in all good faith for value.
At first glance the resolutions of both courts accomplished substantial justice:chanroblesvirtuallawlibrary the
minor recovers his properties. But if the conveyances are annulled as prayed for, the minor will obtain a
better deal:chanroblesvirtuallawlibrary he receives all the fruits of the lands from the year 1947 (Article
1303 Civil Code) and will return P14,700, not P15,000.
To our minds the first two transactions herein described couldnt be in a better juridical situation than if this
guardian had purchased the seventeen parcels on the day following the sale to Dr. Ramos. Now, if she was
willing to pay P15,000 why did she sell the parcels for less? In one day (or actually one week) the price
could not have risen so suddenly. Obviously when, seeking approval of the sale she represented the price to
be the best obtainable in the market, she was not entirely truthful. This is one phase to consider.

23

Again, supposing she knew the parcels were actually worth P17,000; chan roblesvirtualawlibrarythen she
agreed to sell them to Dr. Ramos at P14,700; chan roblesvirtualawlibraryand knowing the realtys value she
offered him the next day P15,000 or P15,500, and got it. Will there be any doubt that she was recreant to
her guardianship, and that her acquisition should be nullified? Even without proof that she had connived
with Dr. Ramos. Remembering the general doctrine that guardianship is a trust of the highest order, and the
trustee cannot be allowed to have any inducement to neglect his wards interest and in line with the courts
suspicion whenever the guardian acquires the wards property 1 we have no hesitation to declare that in
this case, in the eyes of the law, Socorro Roldan took by purchase her wards parcels thru Dr. Ramos, and
that Article 1459 of the Civil Code applies.
She acted it may be true without malice; chan roblesvirtualawlibrarythere may have been no previous
agreement between her and Dr. Ramos to the effect that the latter would buy the lands for her. But the
stubborn fact remains that she acquired her proteges properties, through her brother-in-law. That she
planned to get them for herself at the time of selling them to Dr. Ramos, may be deduced from the very
short time between the two sales (one week). The temptation which naturally besets a guardian so
circumstanced, necessitates the annulment of the transaction, even if no actual collusion is proved (so hard
to prove) between such guardian and the intermediate purchaser. This would uphold a sound principle of
equity and justice. 2
We are aware of course that in Rodriguez vs. Mactal, 60 Phil. p. 13 wherein the guardian Mactal sold in
January 1926 the property of her ward to Silverio Chioco, and in March 1928 she bought it from Chioco, this
Court said:chanroblesvirtuallawlibrary
In order to bring the sale in this case within the part of Article 1459, quoted above, it is essential that the
proof submitted establish some agreement between Silverio Chioco and Trinidad Mactal to the effect that
Chioco should buy the property for the benefit of Mactal. If there was no such agreement, either express or
implied, then the sale cannot be set aside cralaw . (Page 16; chan roblesvirtualawlibraryItalics supplied.)
However, the underlined portion was not intended to establish a general principle of law applicable to all
subsequent litigations. It merely meant that the subsequent purchase by Mactal could not be annulled in
that particular case because there was no proof of a previous agreement between Chioco and her. The court
then considered such proof necessary to establish that the two sales were actually part of one scheme
guardian getting the wards property through another person because two years had elapsed between the
sales. Such period of time was sufficient to dispel the natural suspicion of the guardians motives or actions.
In the case at bar, however, only one week had elapsed. And if we were technical, we could say, only one
day had elapsed from the judicial approval of the sale (August 12), to the purchase by the guardian (Aug.
13).
Attempting to prove that the transaction was beneficial to the minor, Appellees attorney alleges that the
money (P14,700) invested in the house on Tindalo Street produced for him rentals of P2,400 yearly; chan
roblesvirtualawlibrarywhereas the parcels of land yielded to his step-mother only an average of P1,522 per
year. 3 The argument would carry some weight if that house had been built out of the purchase price of
P14,700 only. 4 One thing is certain:chanroblesvirtuallawlibrary the calculation does not include the price of
the lot on which the house was erected. Estimating such lot at P14,700 only, (ordinarily the city lot is more
valuable than the building) the result is that the price paid for the seventeen parcels gave the minor an
income of only P1,200 a year, whereas the harvest from the seventeen parcels netted his step-mother a
yearly profit of P1,522.00. The minor was thus on the losing end.
Hence, from both the legal and equitable standpoints these three sales should not be
sustained:chanroblesvirtuallawlibrary the first two for violation of article 1459 of the Civil Code; chan
roblesvirtualawlibraryand the third because Socorro Roldan could pass no title to Emilio Cruz. The
annulment carries with is (Article 1303 Civil Code) the obligation of Socorro Roldan to return the 17 parcels
together with their fruits and the duty of the minor, through his guardian to repay P14,700 with legal
interest.
Judgment is therefore rendered:chanroblesvirtuallawlibrary
a. Annulling the three contracts of sale in question; chan roblesvirtualawlibraryb. declaring the minor as the
owner of the seventeen parcels of land, with the obligation to return to Socorro Roldan the price of P14,700
with legal interest from August 12, 1947; chan roblesvirtualawlibraryc. Ordering Socorro Roldan and Emilio
Cruz to deliver said parcels of land to the minor; chan roblesvirtualawlibraryd. Requiring Socorro Roldan to
pay him beginning with 1947 the fruits, which her attorney admits, amounted to P1,522 a year; chan
roblesvirtualawlibrarye. Authorizing the minor to deliver directly to Emilio Cruz, out of the price of P14,700
above mentioned, the sum of P3,000; chan roblesvirtualawlibraryand f. charging Appellees with the
costs. SO ORDERED.
Paras, C.J., Padilla, Montemayor, Reyes, A., Bautista Angelo, Concepcion, Reyes, J.B.L., and
Endencia, JJ., concur.

24

[A.C. No. 1302, 1391 and 1543. April 26, 1991.]

PAULINO VALENCIA, Complainant, v. ATTY. ARSENIO FER. CABANTING, Respondent.
CONSTANCIA L. VALENCIA, Complainant, v. ATTY. DIONISIO C. ANTINIW, ATTY. EDUARDO U.
JOVELLANOS and ATTY. ARSENIO FER. CABANTING, Respondents.
LYDIA BERNAL, Complainant, v. ATTY. DIONISIO C. ANTINIW, Respondent.

SYLLABUS

1. LEGAL AND JUDICIAL ETHICS; ATTORNEY AND CLIENT; PROHIBITED TRANSACTIONS. Public policy
prohibits the transactions in view of the fiduciary relationship involved. It is intended to curtail any undue
influence of the lawyer upon his client. Greed may get the better of the sentiments of loyalty and
disinterestedness. Any violation of this prohibition would constitute malpractice (In re Attorney Melchor
Ruste, 40 O.G. p. 78) and is a ground for suspension. (Beltran v. Fernandez, 70 Phil. 248).
2. ID.; ID.; ID.; APPLIES WHILE LITIGATION IS PENDING. Art. 1491, prohibiting the sale to the counsel
concerned, applies only while the litigation is pending. (Director of Lands v. Adaba, 88 SCRA 513;
Hernandez v. Villanueva, 40 Phil. 775).
3. ID.; ID.; ID.; ID.; A THING IS IN LITIGATION WHILE A CERTIORARI IS STILL IN PROGRESS; CASE AT
BAR. In the case at bar, while it is true that Atty. Arsenio Fer Cabanting purchased the lot after finality of
judgment, there was still a pending certiorari proceeding. A thing is said to be in litigation not only if there
is some contest or litigation over it in court, but also from the moment that it becomes subject to the
judicial action of the judge. (Gan Tingco v. Pabinguit, 35 Phil. 81). Logic dictates, in certiorari proceedings,
that the appellate court may either grant or dismiss the petition. Hence, it is not safe to conclude, for
purposes under Art. 1491 that the litigation has terminated when the judgment of the trial court become
final while a certiorari connected therewith is still in progress. Thus, purchase of the property by Atty.
Cabanting in this case constitutes malpractice in violation of Art. 1491 and the Canons of Professional
Ethics. Clearly, this malpractice is a ground for suspension.
4. REMEDIAL LAW; EVIDENCE; CREDIBILITY OF WITNESSES; AFFIRMATIVE TESTIMONY IS GIVEN GREATER
WEIGHT THAN NEGATIVE TESTIMONY. It is asserted by Paulino that Atty. Antiniw asked for and received
the sum of P200.00 in consideration of his executing the document "Compraventa Definitiva" which would
show that Paulino bought the property. This charge, Atty. Antiniw simply denied. It is settled jurisprudence
that affirmative testimony is given greater weight than negative testimony (Bayasen v. CA, L-25785, Feb.
26, 1981; Vda. de Ramos v. CA, Et Al., L-40804, Jan. 31, 1978). When an individuals integrity is
challenged by evidence, it is not enough that he deny the charges against him; he must meet the issue and
overcome the evidence for the relator and show proofs that he still maintains the highest degree of morality
and integrity which at all time is expected of him. (De los Reyes v. Aznar, Adm. Case No. 1334, Nov. 28,
1989).
5. ID.; ID.; ID.; TESTIMONY OF A FARMER WHO FINISHED ONLY GRADE IV ON DELICATE SUBJECT GIVEN
CREDENCE. Although Paulino was a common farmer who finished only Grade IV, his testimony, even if
not corroborated by another witness, deserves credence and can be relied upon. His declaration dwelt on a
subject which was so delicate and confidential that it would be difficult to believe the he fabricated his
evidence.
6. LEGAL AND JUDICIAL ETHICS; ATTORNEY AND CLIENT; FIRST DUTY OF A LAWYER IS NOT TO CLIENT
BUT TO ADMINISTRATION OF JUSTICE. A lawyer owes entire devotion to the interest of his client (Santos
v. Dichoso, 84 SCRA 622), but not at the expense of truth. (Cosmos Foundry Shop workers Union v. La Bu,
63 SCRA 313). The first duty of a lawyer is not to his client but to the administration of justice. (Lubiano v.
Gordalla, 115 SCRA 459) To that end, his clients success is wholly subordinate. His conduct ought to and
must always be scrupulously observant of law and ethics. While a lawyer must advocate his clients cause in
utmost earnestness and with the maximum skill he can marshal, he is not at liberty to resort to illegal
means for his clients interest. It is the duty of an attorney to employ, for the purpose of maintaining the
causes confided to him, such means as are consistent with truth and honor. (Pangan v. Ramos, 93 SCRA

25

87).
7. ID.; DISBARMENT; NOT MEANT AS PUNISHMENT BUT INTENDED TO PROTECT THE ADMINISTRATION OF
JUSTICE. Membership in the Bar is a privilege burdened with conditions. By far, the most important of
them is mindfulness that a lawyer is an officer of the court. (In re: Ivan T. Publico, 102 SCRA 722). This
Court may suspend or disbar a lawyer whose acts show his unfitness to continue as a member of the Bar.
(Halili v. CIR, 136 SCRA 112). Disbarment, therefore, is not meant as a punishment depriving him of a
source of livelihood but is rather intended to protect the administration of justice by requiring that those
who exercise this function should be competent, honorable and reliable in order that courts and the public
may rightly repose confidence in them. (Noriega v. Sison, 125 SCRA 293). Atty. Antiniw failed to live up to
the high standards of the law profession.
8. ID.; ID.; RESPONDENT LAWYER SHOULD BE GIVEN OPPORTUNITY TO CROSS-EXAMINE WITNESSES.
Procedural due process demands that respondent lawyer should be given an opportunity to cross-examine
the witnesses against him. He enjoys the legal presumption that he is innocent of the charges against him
until the contrary is proved. (Santos v. Dichoso, 84 SCRA 622). The case must be established by clear,
convincing and satisfactory proof. (Camus v. Diaz, Adm. Case No. 1616, February 9, 1989). Since Atty.
Antiniw was not accorded this procedural due process, it is but proper that the direct testimony of Lydia
Bernal be stricken out.
9. ID.; ID.; AFFIDAVIT OF DESISTANCE DOES NOT RESULT IN DISMISSAL OF CASE; EXCEPTION. In view
also of the affidavit of desistance executed by the complainant, Administrative Case No. 1543 should be
dismissed. Although the filing of an affidavit of desistance by complainant for lack of interest does not ipso
facto result in the termination of a case for suspension or disbarment of an erring lawyer. (Munar v. Flores,
122 SCRA 448), We are constrained in the case at bar, to dismiss the same because there was no evidence
to substantiate the charges.
10. REMEDIAL LAW; EVIDENCE; HEARSAY. The additional charge against Atty. Antiniw in Administrative
Case No. 1391 is predicated on the information furnished by Lydia Bernal. It was not based on the personal
knowledge of Constancia L. Valencia: hence, hearsay. "Any evidence, whether oral or documentary, is
hearsay if its probative value is not based on the personal knowledge of the witness but on the knowledge
of some other person not on the witness stand." (Regalado, Remedial Law Compendium, 6th ed., vol. 2,
1989, p. 486). Being hearsay, the evidence presented is inadmissible.
11. LEGAL AND JUDICIAL ETHICS; ATTORNEY; CAMARADERIE AMONG LAWYERS IS NOT PROOF OF
CONSPIRACY. Besides, the camaraderie among lawyers is not proof of conspiracy, but a sign of
brotherhood among them. One of the fourfold duties of a lawyer in his duty to the Bar. A lawyer should
treat the opposing counsel, and his brethren in the law profession, with courtesy, dignity and civility. They
may "do as adversaries do in the law: strive mightily but (they) eat and drink as friends." This friendship
does not connote conspiracy.
DECISION
PER CURIAM:
These consolidated administrative cases seek to disbar respondents Dionisio Antiniw, Arsenio Fer Cabanting
and Eduardo Jovellanos (the last named, now an MCTC Judge) for grave malpractice and misconduct in the
exercise of their legal profession committed in the following manner:chanrob1es virtual 1aw library
1. Administrative Cases No. 1302 and 1391
In 1933, complainant Paulino Valencia (Paulino in short) and his wife Romana allegedly bought a parcel of
land, where they built their residential house, from a certain Serapia Raymundo, an heir of Pedro Raymundo
the original owner. However, they failed to register the sale or secure a transfer certificate of title in their
names.
Sometime in December, 1968, a conference was held in the house of Atty. Eduardo Jovellanos to settle the
land dispute between Serapia Raymundo (Serapia in short) another heir of Pedro Raymundo, and the
Valencia spouses since both were relatives and distant kin of Atty. Jovellanos. Serapia was willing to
relinquish ownership If the Valencias could now documents evidencing ownership. Paulino exhibited a deed
of sale written in the Ilocano dialect. However, Serapia claimed that the deed covered a different property.
Paulino and Serapia were not able to settle their differences. (Report of Investigating Judge Catalino

26

Castaeda, Jr., pp. 21-22).

On December 15, 1969 Serapia, assisted by Atty. Arsenio Fer Cabanting, filed a complaint against Paulino
for the recovery of possession with damages. The case was docketed as Civil Case No. V-2170, entitled
"Serapia Raymundo, Plaintiff, versus Paulino Valencia, Defendant." (Report, p. 11)
Summoned to plead in Civil Case No. V-2170, the Valencias engaged the services of Atty. Dionisio Antiniw.
Atty. Antiniw advised them to present a notarized deed of sale in lieu of the private document written in
Ilocano. For this purpose, Paulino gave Atty. Antiniw an amount of P200.00 to pay the person who would
falsify the signature of the alleged vendor (Complaint, p. 2; Rollo, p. 7). A "Compraventa Definitiva" (Exh.
B) was executed purporting to be a sale of the questioned lot.chanrobles lawlibrary : rednad
On January 22, 1973, the Court of First Instance of Pangasinan, Branch V, rendered a decision in favor of
plaintiff, Serapia Raymundo. The lower court expressed the belief that the said document is not authentic.
(Report, p. 14).
Paulino, thereafter, filed a Petition for Certiorari, under Rule 65, with Preliminary Injunction before the Court
of Appeals alleging that the trial court failed to provide a workable solution concerning his house. While the
petition was pending, the trial court, on March 9, 1973, issued an order of execution stating that "the
decision in this case has already become final and executory" (Exhibits 3 and 3-A). On March 14, 1973, a
writ of execution was issued.
On March 20, 1973, Serapia sold 40 square meters of the litigated lot to Atty. Jovellanos and the remaining
portion she sold to her counsel, Atty. Arsenio Fer Cabanting, on April 25, 1973. (Annex "A" of Administrative
Case No. 1302).
On March 4, 1974, Paulino filed a disbarment proceeding (docketed as Administrative Case No. 1302)
against Atty. Cabanting on the ground that said counsel allegedly violated Article 1491 of the New Civil Code
as well as Article II of the Canons of Professional Ethics, prohibiting the purchase of property under litigation
by a counsel.
On March 21, 1974 the appellate court dismissed the petition of Paulino.
On October 14, 1974, Constancia Valencia, daughter of Paulino, filed a disbarment proceeding (docketed as
Administrative Case No. 1391) against Atty. Dionisio Antiniw for his participation in the forgery of
"Compraventa Definitiva" and its subsequent introduction as evidence for his client; and also, against Attys.
Eduardo Jovellanos and Arsenio Cabanting for purchasing a litigated property allegedly in violation of Article
1491 of the New Civil Code; and against the three lawyers, for allegedly rigging Civil Case No. V-2170
against her parents.
On August 17, 1975, Constancia Valencia filed additional charges against Atty. Antiniw and Atty. Jovellanos
as follows:jgc:chanrobles.com.ph
"1. AGAINST ATTY. DIONISIO ANTINIW:jgc:chanrobles.com.ph
"In the year 1973 Atty. Dionisio Antiniw fraudulently and in confabulation with one Lydia Bernal had a deed
of sale, fabricated, executed and ratified before him as Notary Public by one Santiago Bernal in favor of
Lydia Bernal when as a matter of fact said Santiago Bernal had died already about eight years before in the
year 1965.
"2. AGAINST ATTY. EDUARDO JOVELLANOS:jgc:chanrobles.com.ph
"In the year 1954 Atty. Eduardo Jovellanos, fraudulently and in bad faith, in confabulation with Rosa de los
Santos as vendee had, as Notary Public, executed and ratified before him, two (2) deeds of sale in favor of
said Rosa de los Santos when as a matter of fact the said deeds were not in fact executed by the supposed
vendor Rufino Rincoraya and so said Rufino Rincoraya had filed a Civil Case in Court to annul and declare
void the said sales." (p. 7, Report)
2. Administrative Case No. 1543.
A deed of donation propter nuptias, involving the transfer of a piece of land by the grandparents of Lydia
Bernal (complainant) in favor of her parents, was lost during the last world war. For this reason, her
grandmother (the living donor) executed a deed of confirmation of the donation propter nuptias with
renunciation of her rights over the property. (Complaint, p. 1). Notwithstanding the deed, her grandmother
still offered to sell the same property in favor of the complainant, ostensibly to strengthen the deed of

27

donation (to prevent others from claiming the property).chanrobles.com.ph : virtual law library
On consultation, Atty. Antiniw advised them to execute a deed of sale. Atty. Antiniw allegedly prepared and
notarized the deed of sale in the name of her grandfather (deceased at the time of signing) with her
grandmothers approval.
Felicidad Bernal-Duzon, her aunt who had a claim over the property, filed a complaint against her (Lydia
Bernal) and her counsel, Atty. Antiniw for falsification of a public document. (Complaint, pp. 1-2) The fiscal
exonerated the counsel for lack of evidence, while a case was filed in court against Lydia Bernal.
On October 3, 1975, Lydia Bernal filed a disbarment proceeding (docketed as Administrative Case No. 1543)
against Atty. Antiniw for illegal acts and bad advice.
Pursuant to the resolution of the First Division of this Court dated December 9, 1974, the resolution of the
Second Division dated March 3, 1975 and the two resolutions of the Second Division both dated December
3, 1975, Administrative Cases Nos. 1302, 1391 and 1543 were referred to the Office of the Solicitor General
for investigation, report and recommendation.
Upon formal request of Constancia L. Valencia and Lydia Bernal dated March 3, 1976, all of these cases
were ordered consolidated by Solicitor General Estelito P. Mendoza per his handwritten directive of March 9,
1976.
On April 12, 1988, We referred the investigation of these cases to the Integrated Bar of the Philippines.
When Atty. Jovellanos was appointed as Municipal Circuit Trial Court Judge of Alcala-Bautista, Pangasinan,
We referred the investigation of these cases to Acting Presiding Judge Cesar Mindaro, Regional Trial Court,
Branch 50, Villasis, Pangasinan, for further investigation.
In view of the seriousness of the charge against the respondents and the alleged threats against the person
of complainant Constancia L. Valencia, We directed the transfer of investigation to the Regional Trial Court
of Manila.
The three administrative cases were raffled to Branch XVII of the Regional Trial Court of Manila, under the
sala of Judge Catalino Castaeda, Jr.
After investigation, Judge Catalino Castaeda, Jr., recommended the dismissal of cases against Atty.
Jovellanos and Atty. Arsenio Fer Cabanting; dismissal of Administrative Case No. 1543 and the additional
charges in Administrative Case No. 1391 against Antiniw and Judge Jovellanos; however, he recommended
the suspension of Atty. Antiniw from the practice of law for six months finding him guilty of malpractice in
falsifying the "Compraventa Definitiva."cralaw virtua1aw library
The simplified issues of these consolidated cases are:chanrob1es virtual 1aw library
I. Whether or not Atty. Cabanting purchased the subject property in violation of Art. 1491 of the New Civil
Code.chanroblesvirtualawlibrary
II. Whether or not Attys. Antiniw and Jovellanos are guilty of malpractice in falsifying notarial documents.
III. Whether or not the three lawyers connived in rigging Civil Case No. V-2170.

I
Under Article 1491 of the New Civil Code:chanrob1es virtual 1aw library
The following persons cannot acquire by purchase, even at a public of judicial auction, either in person or
through the mediation of another:chanrob1es virtual 1aw library

(5) . . .this prohibition includes the act of acquiring by assignment and shall apply to lawyers, with respect

28

to the property and rights which may be the object of any litigation in which they make take part by virtue
of their profession.
Public policy prohibits the transactions in view of the fiduciary relationship involved. It is intended to curtail
any undue influence of the lawyer upon his client. Greed may get the better of the sentiments of loyalty and
disinterestedness. Any violation of this prohibition would constitute malpractice (In re Attorney Melchor
Ruste, 40 O.G. p. 78) and is a ground for suspension. (Beltran v. Fernandez, 70 Phil. 248).
Art. 1491, prohibiting the sale to the counsel concerned, applies only while the litigation is pending.
(Director of Lands v. Adaba, 88 SCRA 513; Hernandez v. Villanueva, 40 Phil. 775).
In the case at bar, while it is true that Atty. Arsenio Fer Cabanting purchased the lot after finality of
judgment, there was still a pending certiorariproceeding. A thing is said to be in litigation not only if there is
some contest or litigation over it in court, but also from the moment that it becomes subject to the judicial
action of the judge. (Gan Tingco v. Pabinguit, 35 Phil. 81). Logic dictates, in certiorari proceedings, that the
appellate court may either grant or dismiss the petition. Hence, it is not safe to conclude, for purposes
under Art. 1491 that the litigation has terminated when the judgment of the trial court become final while
a certiorari connected therewith is still in progress. Thus, purchase of the property by Atty. Cabanting in this
case constitutes malpractice in violation of Art. 1491 and the Canons of Professional Ethics. Clearly, this
malpractice is a ground for suspension.
The sale in favor of Atty. Jovellanos does not constitute malpractice. There was no attorney-client
relationship between Serapia and Atty. Jovellanos, considering that the latter did not take part as counsel in
Civil Case No. V-2170. The transaction is not covered by Art. 1491 nor by the Canons adverted to.

II
It is asserted by Paulino that Atty. Antiniw asked for and received the sum of P200.00 in consideration of his
executing the document "Compraventa Definitiva" which would show that Paulino bought the property. This
charge, Atty. Antiniw simply denied. It is settled jurisprudence that affirmative testimony is given greater
weight than negative testimony (Bayasen v. CA, L-25785, Feb. 26, 1981; Vda. de Ramos v. CA, Et Al., L40804, Jan. 31, 1978). When an individuals integrity is challenged by evidence, it is not enough that he
deny the charges against him; he must meet the issue and overcome the evidence for the relator and show
proofs that he still maintains the highest degree of morality and integrity which at all time is expected of
him. (De los Reyes v. Aznar, Adm. Case No. 1334, Nov. 28, 1989).
Although Paulino was a common farmer who finished only Grade IV, his testimony, even if not corroborated
by another witness, deserves credence and can be relied upon. His declaration dwelt on a subject which was
so delicate and confidential that it would be difficult to believe the he fabricated his evidence.chanrobles
lawlibrary : rednad
There is a clear preponderant evidence that Atty. Antiniw committed falsification of a deed of sale, and its
subsequent introduction in court prejudices his prime duty in the administration of justice as an officer of
the court.
A lawyer owes entire devotion to the interest of his client (Santos v. Dichoso, 84 SCRA 622), but not at the
expense of truth. (Cosmos Foundry Shop workers Union v. La Bu, 63 SCRA 313). The first duty of a lawyer
is not to his client but to the administration of justice. (Lubiano v. Gordalla, 115 SCRA 459) To that end, his
clients success is wholly subordinate. His conduct ought to and must always be scrupulously observant of
law and ethics. While a lawyer must advocate his clients cause in utmost earnestness and with the
maximum skill he can marshal, he is not at liberty to resort to illegal means for his clients interest. It is the
duty of an attorney to employ, for the purpose of maintaining the causes confided to him, such means as
are consistent with truth and honor. (Pangan v. Ramos, 93 SCRA 87).
Membership in the Bar is a privilege burdened with conditions. By far, the most important of them is
mindfulness that a lawyer is an officer of the court. (In re: Ivan T. Publico, 102 SCRA 722). This Court may
suspend or disbar a lawyer whose acts show his unfitness to continue as a member of the Bar. (Halili v. CIR,
136 SCRA 112). Disbarment, therefore, is not meant as a punishment depriving him of a source of
livelihood but is rather intended to protect the administration of justice by requiring that those who exercise
this function should be competent, honorable and reliable in order that courts and the public may rightly
repose confidence in them. (Noriega v. Sison, 125 SCRA 293). Atty. Antiniw failed to live up to the high
standards of the law profession.

29

The other charges of malpractice against Atty. Antiniw and Atty. Jovellanos should be dismissed for lack of
evidence.
During the proceedings in Administrative Case No. 1543, Lydia Bernal testified in full on direct examination,
but she never submitted herself for cross-examination. Several subpoenas for cross-examination were
unheeded. She eventually requested the withdrawal of her complaint.
Procedural due process demands that respondent lawyer should be given an opportunity to cross-examine
the witnesses against him. He enjoys the legal presumption that he is innocent of the charges against him
until the contrary is proved. (Santos v. Dichoso, 84 SCRA 622). The case must be established by clear,
convincing and satisfactory proof. (Camus v. Diaz, Adm. Case No. 1616, February 9, 1989). Since Atty.
Antiniw was not accorded this procedural due process, it is but proper that the direct testimony of Lydia
Bernal be stricken out.
In view also of the affidavit of desistance executed by the complainant, Administrative Case No. 1543
should be dismissed. Although the filing of an affidavit of desistance by complainant for lack of interest does
not ipso facto result in the termination of a case for suspension or disbarment of an erring lawyer. (Munar v.
Flores, 122 SCRA 448), We are constrained in the case at bar, to dismiss the same because there was no
evidence to substantiate the charges.
The additional charge against Atty. Antiniw in Administrative Case No. 1391 is predicated on the information
furnished by Lydia Bernal. It was not based on the personal knowledge of Constancia L. Valencia: hence,
hearsay. "Any evidence, whether oral or documentary, is hearsay if its probative value is not based on the
personal knowledge of the witness but on the knowledge of some other person not on the witness stand."
(Regalado, Remedial Law Compendium, 6th ed., vol. 2, 1989, p. 486). Being hearsay, the evidence
presented is inadmissible.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
The additional charge filed by Constancia L. Valencia against Atty. Jovellanos in Administrative Case No.
1391 was not proved at all. Complainant failed to prove her additional charges.

III
There is no evidence on record that the three lawyers involved in these administrative cases conspired in
executing the falsified "Compraventa Definitiva" and rigged the Civil Case No. V-2170.
Atty. Jovellanos is a distant kin of the Raymundos and Valencias. In fact, he and the Valencias are neighbors
and only two meters separate their houses. It would not be believable that Atty. Jovellanos, a practicing
lawyer, would hold a meeting with the heirs of Pedro Raymundo in his house with the intention of inducing
them to sue the Valencias. Atty. Jovellanos even tried to settle the differences between the parties in a
meeting held in his house. He appeared in Civil Case No. V-2170 as an involuntary witness to attest to the
holding of the conference.
Besides, the camaraderie among lawyers is not proof of conspiracy, but a sign of brotherhood among them.
One of the fourfold duties of a lawyer in his duty to the Bar. A lawyer should treat the opposing counsel, and
his brethren in the law profession, with courtesy, dignity and civility. They may "do as adversaries do in the
law: strive mightily but (they) eat and drink as friends." This friendship does not connote conspiracy.
WHEREFORE, judgment is hereby rendered declaring: 1. Dionisio Antiniw DISBARRED from the practice of
law, and his name is ordered stricken off from the roll of attorneys; 2. Arsenio Fer Cabanting SUSPENDED
from the practice of law for six months from finality of this judgment; and 3. Administrative Case No. 1391
against Attorney Eduardo Jovellanos and additional charges therein, and Administrative Case No. 1543
DISMISSED.
SO ORDERED.

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[G.R. No. L-36902. January 30, 1982.]

LUIS PICHEL, Petitioner, v. PRUDENCIO ALONZO, Respondent.
Flavio G. Macaso for Petitioner.
Reynaldo Santos for Respondent.
SYNOPSIS
Respondent was awarded a parcel of land by the government under Republic Act No. 477. The award was
cancelled by the Board of Liquidators on January 27, 1965, but no reversion proceedings were thereafter
instituted, as in fact, respondents right to the land was reinstated in 1972. On August 14, 1968, however,
respondent and his wife, in consideration of P4,200.00, had executed a Deed of Sale in favor of petitioner of
all the fruits which may be harvested from the coconut trees in the said land for the period covering
September 15, 1968 to January 1, 1976. After reinstatement of respondents right to the land in 1972, he
filed an action to annul the Deed of Sale. The lower court, construing the contract in question as a contract
of lease of the land itself, held, that the contract was null and void for being violative of Section 8, Republic
Act No. 477, which prohibits the alienation or encumbrance of the land or the improvement thereon within
the period prescribed therein.
On review, the Supreme Court, after clarifying the matter that respondent has not been divested of
whatever rights he may have over the property granted to him by virtue of Republic Act No. 477 after
cancellation of the award by the Board of Liquidators since no reversion proceedings have been instituted by
the State, ruled that it was error for the lower court to construe or interpret the subject Deed of Sale since a
perusal of the deed fails to disclose any ambiguity or absurdity in its provisions; that there is no doubt that
the real intention of the contracting parties is of the fruits of the coconut trees and not the lease of the land
itself; and that the prohibition against the alienation or encumbrance of the land and/or improvements
therein awarded pursuant to Republic Act No. 477 does not include alienation or encumbrance of natural
and/or industrial fruits derived therefrom.
Judgment reversed
SYLLABUS
1. ADMINISTRATIVE LAW; REPUBLIC ACT NO. 477; EFFECT OF CANCELLATION OF AWARD. A cancellation
of an award granted pursuant to the provisions of RA 477 does not automatically divest the awardee of his
rights to the land. Until and unless an appropriate proceeding for reversion is instituted by the State, and its
reacquisition of the ownership and possession of the land decreed by a competent court, the grantee can
not be said to have been divested of whatever right he may have over the property.
2. CIVIL LAW; CONTRACTS; RULE ON INTERPRETATION THEREOF; CASE AT BAR. Construction or
interpretation of the document in question is not called for. A perusal of the deed fails to disclose any
ambiguity or obscurity in its provisions, nor is there doubt as to the real intention of the contracting parties.
The terms of the agreement are clear and unequivocal, hence the literal and plain meaning thereof should
be observed. Such is the mandate of the Civil Code of the Philippines. Pursuant to the provision of Article
1370 thereof, the first and fundamental duty of the courts is the application of the contract according to its
express terms, interpretation being resorted to only when such literal application is impossible. Simply and
directly stated, the "Deed of Sale" dated August 14, 1968 is precisely what it purports to be. It is a
document evidencing the agreement of herein parties for the sale of coconut fruits of Lot No. 21, and not for
the lease of the land itself as found by the lower Court. In clear and express terms, the document defines
the object of the contract thus: "the herein sale of the coconut fruits are for all the fruits on the
aforementioned parcel of land during the years . . ." from SEPTEMBER 15, 1968; up to JANUARY 1,
1976."cralaw virtua1aw library
3. ID.; ID.; SALE; ESSENTIAL ELEMENTS; FUTURE CROPS, VALID SUBJECT MATTER; CASE AT BAR. The
document in question expresses a valid contract of sale. It has the essential elements of a contract of sale
as defined under Article 1458 of the New Civil Code. The subject matter of the contract of sale in question
are the fruits of the coconut trees on the land during the years from September 15, 1968 up to January 1,
1976, which subject matter is a determinate thing. Under Article 1461 of the New Civil Code, things having
a potential existence may be the object of the contract of sale. And in Sibal v. Valdez, 50 Phil. 512, pending
crops which have potential existence may be the subject matter of sale.

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4. ID.; CONTRACTS; SALE; DISTINGUISHED FROM CONTRACT OF LEASE. The essential difference
between a contract of sale and lease of things is that the delivery of the thing sold transfers ownership,
while in lease no such transfer of ownership results as the rights of the lease are limited to the use and
enjoyment of the thing leased.
5. ID.; ID.; ID.; ID.; DOCUMENT IN CASE AT BAR CANNOT BE CONSTRUED AS A LEASE CONTRACT. The
contract was clearly a "sale of the coconut fruits." The vendor sold, transferred and conveyed "by way of
absolute sale, all the coconut fruits of his land," thereby divesting himself of all ownership or dominion over
the fruits during the seven-year period. The possession and enjoyment of the coconut trees cannot be said
to be the possession and enjoyment of the land itself because these rights are distinct and separate from
each other, the first pertaining to the accessory or improvements (coconut trees) while the second, to the
principal (the land). A transfer of the accessory or improvement is not a transfer of the principal. It is the
other way around, the accessory follows the principal. Hence, the sale of the nuts cannot be interpreted nor
construed to be a lease of the trees, much less extended further to include the lease of the land itself.
6. ADMINISTRATIVE LAW; REPUBLIC ACT 477; ALIENATION OR DISPOSITION OF FRUITS OF THE LAND
NOT PROHIBITED THEREBY. Under Section 8 of R.A. 477, the grantee of a parcel of land is not prohibited
from alienating or disposing of the natural and/or industrial fruits of the land awarded to him. What the law
expressly disallows is the encumbrance or alienation of the land itself for of any of the permanent
improvements thereon.
7. CIVIL LAW; PROPERTY; PERMANENT IMPROVEMENTS, DEFINED. Permanent improvements on a parcel
of land are things incorporated or attached to the property in a fixed manner, or sown on the land which is
characterized by fixity, immutability or immovability. Houses, buildings, machinery, animal houses, trees
and plants would fall under the category of permanent improvements.
8. ID.; ID.; ID.; COCONUT FRUITS ARE NATURAL OR INDUSTRIAL FRUITS. While coconut trees are
permanent improvements of a land, their nuts are natural or industrial fruits which are meant to be
gathered or severed from the trees, to be used, enjoyed, sold or otherwise disposed of by the owner of the
land. Herein respondents as the grantee of Lot No. 21 from the Government, had the right and prerogative
to sell the coconut fruits of the trees growing on the property.
9. ADMINISTRATIVE LAW; REPUBLIC ACT NO. 477; PURPOSE OF THE LAW, NOT VIOLATED WHEN GRANTEE
SELLS PRODUCE OF LAND. By virtue of RA. No. 477, bona fide occupants, veterans, members of guerrilla
organizations and other qualified persons were given the opportunity to acquire government lands by
purchase, taking into account their limited means. It was intended for these persons to make good and
productive use of the lands awarded to them, not only to enable them to improve their standard of living,
but likewise to help provide for the annual payments to the Government of the purchase price of the lots
awarded to them. Section 8 was included, as stated by the Court a quo, to protect the grantees "from
themselves and the incursions of opportunists who prey on their misery and poverty." It is there to insure
that the grantees themselves benefit from their respective lots, to the exclusion of other persons. The
purpose of the law is not violated when a grantee sells the produce or fruits of his land. On the contrary, the
aim of the law is thereby achieved, for the grantee is encouraged and induced to be more industrious and
productive, thus making it possible for him and his family to be economically self-sufficient and to lead a
respectable life. At the same time, the Government is assured of payment on the annual installments on the
land.
10. CIVIL LAW; CONTRACTS; RECEIPT OF CONSIDERATION PRECLUDES SELLER TO IMPUGN CONTRACT.
The respondent-grantee, after having received the consideration for the sale of his coconut fruits, can not
be allowed to impugn the validity of contracts he entered into, to the prejudice of petitioner who contracted
in good faith and for consideration.
11. LEGAL ETHICS; ATTORNEYS FEES; LEGAL GROUNDS FOR RECOVERY THEREOF. Article 2208 of the
New Civil Code enumerates the legal grounds which justify or warrant the grant of attorneys fees. None of
the said grounds exists to entitle respondent to recover attorneys fees in the case at bar.
DECISION
GUERRERO, J.:
This is a petition to review on certiorari the decision of the Court of First Instance of Basilan City dated
January 5, 1973 in Civil Case No. 820 entitled "Prudencio Alonzo, Plaintiff, v. Luis Pichel, Defendant."cralaw

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virtua1aw library
This case originated in the lower Court as an action for the annulment of a "Deed of Sale" dated August 14,
1968 and executed by Prudencio Alonzo, as vendor, in favor of Luis Pichel, as vendee, involving property
awarded to the former by the Philippine Government under Republic Act No. 477. Pertinent portions of the
document sued upon read as follows:jgc:chanrobles.com.ph
"That the VENDOR for and in consideration of the sum of FOUR THOUSAND TWO HUNDRED PESOS
(P4,200.00), Philippine Currency, in hand paid by the VENDEE to the entire satisfaction of the VENDOR, the
VENDOR hereby sells, transfers, and conveys, by way of absolute sale, all the coconut fruits of his coconut
land, designated as Lot No. 21 Subdivision Plan No. Psd-32465, situated at Balactasan Plantation,
Lamitan, Basilan City, Philippines;
"That for the herein sale of the coconut fruits are for all the fruits on the aforementioned parcel of land
presently found therein as well as for future fruits to be produced on the said parcel of land during the years
period; which shall commence to run as of SEPTEMBER 15, 1968; up to JANUARY 1, 1976 (sic);
"That the delivery of the subject matter of the Deed of Sale shall be from time to time and at the expense of
the VENDEE who shall do the harvesting and gathering of the fruits;
"That the Vendors right, title, interest and participation herein conveyed is of his own exclusive and
absolute property, free from any liens and encumbrances and he warrants to the Vendee good title thereto
and to defend the same against any and all claims of all persons whomsoever." 1
After the pre-trial conference, the Court a quo issued an Order dated November 9, 1972 which in part reads
thus:chanrobles law library
"The following facts are admitted by the parties:jgc:chanrobles.com.ph
"Plaintiff Prudencio Alonzo was awarded by the Government that parcel of land designated as Lot No. 21 of
Subdivision Plan Psd-32465 of Balactasan, Lamitan, Basilan City in accordance with Republic Act No. 477.
The award was cancelled by the Board of Liquidators on January 27, 1965 on the ground that, previous
thereto, plaintiff was proved to have alienated the land to another, in violation of law. In 1972, plaintiffs
rights to the land were reinstated.
"On August 14, 1968, plaintiff and his wife sold to defendant all the fruits of the coconut trees which may be
harvested in the land in question for the period, September 15, 1968 to January 1, 1976, in consideration of
P4,200.00. Even as of the date of sale, however, the land was still under lease to one, Ramon Sua, and it
was the agreement that part of the consideration of the sale, in the sum of P3,650.00, was to be paid by
defendant directly to Ramon Sua so as to release the land from the clutches of the latter. Pending said
payment plaintiff refused to allow the defendant to make any harvest.
"In July 1972, defendant for the first time since the execution of the deed of sale in his favor, caused the
harvest of the fruit of the coconut trees in the land.
x

"Considering the foregoing, two issues appear posed by the complaint and the answer which must needs be
tested in the crucible of a trial on the merits, and they are:jgc:chanrobles.com.ph
"First. Whether or not defendant actually paid to plaintiff the full sum of P4,200.00 upon execution of the
deed of sale.
"Second. Is the deed of sale, Exhibit A, the prohibited encumbrance contemplated in Section 8 of
Republic Act No. 477?" 2
Anent the first issue, counsel for plaintiff Alonzo subsequently "stipulated and agreed that his client ..
admits full payment thereof by defendant." 3 The remaining issue being one of law, the Court below
considered the case submitted for summary judgment on the basis of the pleadings of the parties, and the
admission of facts and documentary evidence presented at the pre-trial conference.
The lower court rendered its decision now under review, holding that although the agreement in question is
denominated by the parties as a deed of sale of fruits of the coconut trees found in the vendors land, it
actually is, for all legal intents and purposes, a contract of lease of the land itself. According to the

33

Court:jgc:chanrobles.com.ph
". . . the sale aforestated has given defendant complete control and enjoyment of the improvements of the
land. That the contract is consensual; that its purpose is to allow the enjoyment or use of a thing; that it is
onerous because rent or price certain is stipulated; and that the enjoyment or use of the thing certain is
stipulated to be for a certain and definite period of time, are characteristics which admit of no other
conclusion.. The provisions of the contract itself and its characteristics govern its nature." 4 The Court,
therefore, concluded that the deed of sale in question is an encumbrance prohibited by Republic Act No. 477
which provides thus:jgc:chanrobles.com.ph
"Sec. 8. Except in favor of the Government or any of its branches, units, or institutions, land acquired under
the provisions of this Act or any permanent improvements thereon shall not be subject to encumbrance or
alienation from the date of the award of the land or the improvements thereon and for a term of ten years
from and after the date of issuance of the certificate of title, nor shall they become liable to the satisfaction
of any debt contracted prior to the expiration of such period.
"Any occupant or applicant of lands under this Act who transfers whatever rights he has acquired on said
lands and/or on the improvements thereon before the date of the award or signature of the contract of sale,
shall not be entitled to apply for another piece of agricultural land or urban, homesite or residential lot, as
the case may be, from the National Abaca and Other Fibers Corporation; and such transfer shall be
considered null and void." 5
The dispositive portion of the lower Courts decision states:jgc:chanrobles.com.ph
"WHEREFORE, it is the judgment of this Court that the deed of sale, exhibit A, should be, as it is, hereby
declared null and void; that plaintiff be, as he is, ordered to pay back to defendant the consideration of the
sale in the sum of P4,200.00 the same to bear legal interest from the date of the filing of the complaint until
paid; that defendant shall pay to the plaintiff the sum of P500.00 as attorneys fees.
Costs against the defendant." 6
Before going into the issues raised by the instant Petition, the matter of whether, under the admitted facts
of this case, the respondent had the right or authority to execute the "Deed of Sale" in 1968, his award over
Lot No. 21 having been cancelled previously by the Board of Liquidators on January 27, 1965, must be
clarified. The case in point is Ras v. Sua 7 wherein it was categorically stated by this Court that a
cancellation of an award granted pursuant to the provisions of Republic Act No. 477 does not automatically
divest the awardee of his rights to the land. Such cancellation does not result in the immediate reversion of
the property subject of the award, to the State. Speaking through Mr. Justice J.B.L. Reyes, this Court ruled
that "until and unless an appropriate proceeding for reversion is instituted by the State, and its reacquisition
of the ownership and possession of the land decreed by a competent court, the grantee cannot be said to
have been divested of whatever right that he may have over the same property." 8
There is nothing in the record to show that at any time after the supposed cancellation of herein
respondents award on January 27, 1965, reversion proceedings against Lot No. 21 were instituted by the
State. Instead, the admitted fact is that the award was reinstated in 1972. Applying the doctrine announced
in the above-cited Ras case, therefore, herein respondent is not deemed to have lost any of his rights as
grantee of Lot No. 21 under Republic Act No. 477 during the period material to the case at bar, i.e., from
the cancellation of the award in 1965 to its reinstatement in 1972. Within said period, respondent could
exercise all the rights pertaining to a grantee with respect to Lot No. 21.chanrobles virtual lawlibrary
This brings Us to the issues raised by the instant Petition. In his Brief, petitioner contends that the lower
Court erred:chanrob1es virtual 1aw library
1. In resorting to construction and interpretation of the deed of sale in question where the terms thereof are
clear and unambiguous and leave no doubt as to the intention of the parties;
2. In declaring granting without admitting that an interpretation is necessary the deed of sale in
question to be a contract of lease over the land itself where the respondent himself waived and abandoned
his claim that said deed did not express the true agreement of the parties, and on the contrary, respondent
admitted at the pre-trial that his agreement with petitioner was one of sale of the fruits of the coconut trees
on the land;
3. In deciding a question which was not in issue when it declared the deed of sale in question to be a
contract of lease over Lot 21;

34

4. In declaring furthermore the deed of sale in question to be a contract of lease over the land itself on the
basis of facts which were not proved in evidence;
5. In not holding that the deed of sale, Exhibit "A" and "2", expresses a valid contract of sale;
6. In not deciding squarely and to the point the issue as to whether or not the deed of sale in question is an
encumbrance on the land and its improvements prohibited by Section 8 of Republic Act 477; and
7. In awarding respondent attorneys fees even granting, without admitting, that the deed of sale in
question is violative of Section 8 of Republic Act 477.
The first five assigned errors are interrelated, hence, We shall consider them together. To begin with, We
agree with petitioner that construction or interpretation of the document in question is not called for. A
perusal of the deed fails to disclose any ambiguity or obscurity in its provisions, nor is there doubt as to the
real intention of the contracting parties. The terms of the agreement are clear and unequivocal, hence the
literal and plain meaning thereof should be observed. Such is the mandate of the Civil Code of the
Philippines which provides that:jgc:chanrobles.com.ph
"Art. 1370. If the terms of a contract are clear and leave no doubt upon the intention of the contracting
parties, the literal meaning of its stipulation shall control. . . ."cralaw virtua1aw library
Pursuant to the afore-quoted legal provision, the first and fundamental duty of the courts is the application
of the contract according to its express terms, interpretation being resorted to only when such literal
application is impossible. 9
Simply and directly stated, the "Deed of Sale" dated August 14, 1968 is precisely what it purports to be. It
is a document evidencing the agreement of herein parties for the sale of coconut fruits of Lot No. 21, and
not for the lease of the land itself as found by the lower Court. In clear and express terms, the document
defines the object of the contract thus: "the herein sale of coconut fruits are for all the fruits on the
aforementioned parcel of land during the years .. (from) SEPTEMBER 15, 1968; up to JANUARY 1, 1976."
Moreover, as petitioner correctly asserts, the document in question expresses a valid contract of sale. It has
the essential elements of a contract of sale as defined under Article 1458 of the New Civil Code which
provides thus:jgc:chanrobles.com.ph
"Art. 1458. By the contract of sale one of the contracting parties obligates himself to transfer the ownership
of and to deliver a determinate thing, and the other to pay therefor a price certain in money or its
equivalent.
A contract of sale may be absolute or conditional."cralaw virtua1aw library
The subject matter of the contract of sale in question are the fruits of the coconut trees on the land during
the years from September 15, 1968 up to January 1, 1976, which subject matter is a determinate thing.
Under Article 1461 of the New Civil Code, things having a potential existence may be the object of the
contract of sale. And in Sibal v. Valdez, 50 Phil. 512, pending crops which have potential existence may be
the subject matter of sale. Here, the Supreme Court, citing Mechem on Sales and American cases
said:jgc:chanrobles.com.ph
"Mr. Mechem says that a valid sale may be made of a thing, which though not yet actually in existence, is
reasonably certain to come into existence as the natural increment or usual incident of something already in
existence, and then belonging to the vendor, and the title will vest in the buyer the moment the thing
comes into existence. Emerson v. European Railway Co., 67 Me., 387; Cutting v. Packers Exchange, 21 Am.
St. Rep., 63) Things of this nature are said to have a potential existence. A man may sell property of which
he is potentially and not actually possessed. He may make a valid sale of the wine that a vineyard is
expected to produce; or the grain a fieldmay grow in a given time; or the milk a cow may yield during the
coming year; or the wool that shall thereafter grow upon sheep; or what may be taken at the next case of a
fishermans net; or fruits to grow; or young animals not yet in existence; or the good will of a trade and the
like. The thing sold, however, must be specific and identified. They must be also owned at the time by the
vendor (Hull v. Hull, 48 Conn., 250; 40 Am. Rep., 165)" pp. 522-523).
We do not agree with the trial court that the contract executed by and between the parties is "actually a
contract of lease of the land and the coconut trees there" (CFI Decision, p. 62, Records). The Courts
holding that the contract in question fits the definition of a lease of things wherein one of the parties binds
himself to give to another the enjoyment or use of a thing for a price certain and for a period which may be
definite or indefinite (Art. 1643, Civil Code of the Philippines) is erroneous. The essential difference between
a contract of sale and a lease of things is that the delivery of the thing sold transfers ownership, while in

35

lease no such transfer of ownership results as the rights of the lessee are limited to the use and enjoyment
of the thing leased.
In Rodriguez v. Borromeo, 43 Phil. 479, 490, the Supreme Court held:jgc:chanrobles.com.ph
"Since according to Article 1543 of the same Code the contract of lease is defined as the giving or the
concession of the enjoyment or use of a thing for a specified time and fixed price, and since such contract is
a form of enjoyment of the property, it is evident that it must be regarded as one of the means of
enjoyment referred to in said Article 398, inasmuch as the terms enjoyment, use, and benefit involve the
same and analogous meaning relative to the general utility of which a given thing is capable." (104
Jurisprudencia Civil, 443).
In concluding that the possession and enjoyment of the coconut trees can therefore be said to be the
possession and enjoyment of the land itself because the defendant-lessee in order to enjoy his right under
the contract, he actually takes possession of the land, at least during harvest time, gathers all of the fruits
of the coconut trees in the land, and gains exclusive use thereof without the interference or intervention of
the plaintiff-lessor such that said plaintiff-lessor is excluded in fact from the land during the period
aforesaid, the trial court erred. The contract was clearly a "sale of the coconut fruits." The vendor sold,
transferred and conveyed "by way of absolute sale, all the coconut fruits of his land," thereby divesting
himself of all ownership or dominion over the fruits during the seven-year period. The possession and
enjoyment of the coconut trees cannot be said to be the possession and enjoyment of the land itself
because these rights are distinct and separate from each other, the first pertaining to the accessory or
improvements (coconut trees) while the second, to the principal (the land). A transfer of the accessory or
improvement is not a transfer of the principal. It is the other way around, the accessory follows the
principal. Hence, the sale of the nuts cannot be interpreted nor construed to be a lease of the trees, much
less extended further to include the lease of the land itself.
The real and pivotal issue of this case which is taken up in the petitioners sixth assignment of error and as
already stated above, refers to the validity of the "Deed of Sale", as such contract of sale, vis-a-vis the
provisions of Sec. 8, R.A. No. 477. The lower Court did not rule on this question, having reached the
conclusion that the contract at bar was one of lease. It was from the context of a lease contract that the
Court below determined the applicability of Sec. 8, R.A. No. 477, to the instant case.
Resolving now this principal issue, We find after a close and careful examination of the terms of the first
paragraph of Section 8 hereinabove quoted, that the grantee of a parcel of land under R.A. No. 477 is not
prohibited from alienating or disposing of the natural and/or industrial fruits of the land awarded to him.
What the law expressly disallows is the encumbrance or alienation of the land itself or any of the permanent
improvements thereon. Permanent improvements on a parcel of land are things incorporated or attached to
the property in a fixed manner, naturally or artificially. They include whatever is built, planted or sown on
the land which is characterized by fixity, immutability or immovability. Houses, buildings, machinery, animal
houses, trees and plants would fall under the category of permanent improvements, the alienation or
encumbrance of which is prohibited by R.A. No. 477. While coconut trees are permanent improvements of a
land, their nuts are natural or industrial fruits which are meant to be gathered or severed from the trees, to
be used, enjoyed, sold or otherwise disposed of by the owner of the land. Herein respondents, as the
grantee of Lot No. 21 from the Government, had the right and prerogative to sell the coconut fruits of the
trees growing on the property.
By virtue of R.A. No. 477, bona fide occupants, veterans, members of guerilla organizations and other
qualified persons were given the opportunity to acquire government lands by purchase, taking into account
their limited means. It was intended for these persons to make good and productive use of the lands
awarded to them, not only to enable them to improve their standard of living, but likewise to help provide
for the annual payments to the Government of the purchase price of the lots awarded to them. Section 8
was included, as stated by the Court a quo, to protect the grantees "from themselves and the incursions of
opportunists who prey on their misery and poverty." It is there to insure that the grantees themselves
benefit from their respective lots, to the exclusion of other persons.
The purpose of the law is not violated when a grantee sells the produce or fruits of his land. On the
contrary, the aim of the law is thereby achieved, for the grantee is encouraged and induced to be more
industrious and productive, thus making it possible for him and his family to be economically self-sufficient
and to lead a respectable life. At the same time, the Government is assured of payment on the annual
installments on the land. We agree with herein petitioner that it could not have been the intention of the
legislature to prohibit the grantee from selling the natural and industrial fruits of his land, for otherwise, it
would lead to an absurd situation wherein the grantee would not be able to receive and enjoy the fruits of
the property in the real and complete sense.chanrobles virtual lawlibrary

36

Respondent through counsel, in his Answer to the Petition contends that even granting arguendo that he
executed a deed of sale of the coconut fruits, he has the "privilege to change his mind and claim it as (an)
implied lease," and he has the "legitimate right" to file an action for annulment "which no law can stop." He
claims it is his "sole construction of the meaning of the transaction that should prevail and not petitioner
(sic)." 10 Respondents counsel either mis-applies the law or is trying too hard and going too far to defend
his clients hopeless cause. Suffice it to say that respondent-grantee, after having received the consideration
for the sale of his coconut fruits, cannot be allowed to impugn the validity of the contracts he entered into,
to the prejudice of petitioner who contracted in good faith and for a consideration.
The issue raised by the seventh assignment of error as to the propriety of the award of attorneys fees
made by the lower Court need not be passed upon, such award having been apparently based on the
erroneous finding and conclusion that the contract at bar is one of lease. We shall limit Ourselves to the
question of whether or not in accordance with Our ruling in this case, respondent is entitled to an award of
attorneys fees. The Civil Code provides that:jgc:chanrobles.com.ph
"Art. 2208. In the absence of stipulation, attorneys fees and expenses of litigation, other than judicial costs,
cannot be recovered, except:chanrob1es virtual 1aw library
(1) When exemplary damages are awarded;
(2) When the defendants act or omission has compelled the plaintiff to litigate with third persons or to incur
expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiffs plainly
valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;
(8) In actions for indemnity under workmens compensation and employers liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorneys fees and expenses of
litigation should be recovered.
In all cases, the attorneys fees and expenses of litigation must be reasonable."cralaw virtua1aw library
We find that none of the legal grounds enumerated above exists to justify or warrant the grant of attorneys
fees to herein Respondent.
IN VIEW OF THE FOREGOING, the judgment of the lower Court is hereby set aside and another one is
entered dismissing the Complaint. Without costs.
SO ORDERED.

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38