G.R. No.

L-60174 February 16, 1983

EDUARDO FELIPE, HERMOGENA V. FELIPE AND VICENTE V. FELIPE, petitioners,

vs.
HEIRS OF MAXIMO ALDON, NAMELY: GIMENA ALMOSARA, SOFIA ALDON, SALVADOR ALDON, AND THE
HONORABLE COURT OF APPEALS, respondents.

Maximo Aldon married Gimena Almosara in 1936. The spouses bought several pieces of land sometime between
1948 and 1950. In 1960-62, the lands were divided into three lots, 1370, 1371 and 1415 of the San Jacinto Public
Land Subdivision, San Jacinto, Masbate.

In 1951, Gimena Almosara sold the lots to the spouses Eduardo Felipe and Hermogena V. Felipe. The sale was
made without the consent of her husband, Maximo.

On April 26, 1976, the heirs of Maximo Aldon, namely his widow Gimena and their children Sofia and Salvador
Aldon, filed a complaint in the Court of First Instance of Masbate against the Felipes. The complaint which was
docketed as Civil Case No. 2372 alleged that the plaintiffs were the owners of Lots 1370, 1371 and 1415; that they
had orally mortgaged the same to the defendants; and an offer to redeem the mortgage had been refused so they
filed the complaint in order to recover the three parcels of land.

The defendants asserted that they had acquired the lots from the plaintiffs by purchase and subsequent delivery to
them. The trial court sustained the claim of the defendants and rendered the following judgment:

a. declaring the defendants to be the lawful owners of the property subject of the present litigation;

b. declaring the complaint in the present action to be without merit and is therefore hereby ordered dismissed;

c. ordering the plaintiffs to pay to the defendants the amount of P2,000.00 as reasonable attorney's fees and to
pay the costs of the suit.

The plaintiffs appealed the decision to the Court of Appeals which rendered the following judgment:

PREMISES CONSIDERED, the decision appealed from is hereby REVERSED and SET ASIDE, and a new one is hereby
RENDERED, ordering the defendants-appellees to surrender the lots in question as well as the plaintiffs'-appellants'
muniments of title thereof to said plaintiffs-appellants, to make an accounting of the produce derived from the
lands including expenses incurred since 1951, and to solidarity turn over to the plaintiffs-appellants the NET
monetary value of the profits, after deducting the sum of P1,800.00. No attorney's fees nor moral damages are
awarded for lack of any legal justification therefor. No. costs.

The ratio of the judgment is stated in the following paragraphs of the decision penned by Justice Edgardo L. Paras
with the concurrence of Justices Venicio Escolin and Mariano A. Zosa:

One of the principal issues in the case involves the nature of the aforementioned conveyance or transaction, with
appellants claiming the same to be an oral contract of mortgage or antichresis, the redemption of which could be
done anytime upon repayment of the P1,800.00 involved (incidentally the only thing written about the transaction
is the aforementioned receipt re the P1,800). Upon the other hand, appellees claim that the transaction was one
of sale, accordingly, redemption was improper. The appellees claim that plaintiffs never conveyed the property
because of a loan or mortgage or antichresis and that what really transpired was the execution of a contract of sale
thru a private document designated as a 'Deed of Purchase and Sale' (Exhibit 1), the execution having been made
by Gimena Almosara in favor of appellee Hermogena V. Felipe.

After a study of this case, we have come to the conclusion that the appellants are entitled to recover the
ownership of the lots in question. We so hold because although Exh. 1 concerning the sale made in 1951 of the
disputed lots is, in Our opinion, not a forgery the fact is that the sale made by Gimena Almosara is invalid, having
been executed without the needed consent of her husband, the lots being conjugal. Appellees' argument that this
was an issue not raised in the pleadings is baseless, considering the fact that the complaint alleges that the parcels
'were purchased by plaintiff Gimena Almosara and her late husband Maximo Aldon' (the lots having been
purchased during the existence of the marriage, the same are presumed conjugal) and inferentially, by force of
law, could not, be disposed of by a wife without her husband's consent.

The defendants are now the appellants in this petition for review. They invoke several grounds in seeking the
reversal of the decision of the Court of Appeals. One of the grounds is factual in nature; petitioners claim that
"respondent Court of Appeals has found as a fact that the 'Deed of Purchase and Sale' executed by respondent
Gimena Almosara is not a forgery and therefore its authenticity and due execution is already beyond question."
We cannot consider this ground because as a rule only questions of law are reviewed in proceedings under Rule 45
of the Rules of Court subject to well-defined exceptions not present in the instant case.

The legal ground which deserves attention is the legal effect of a sale of lands belonging to the conjugal
partnership made by the wife without the consent of the husband.

It is useful at this point to re-state some elementary rules: The husband is the administrator of the conjugal
partnership. (Art. 165, Civil Code.) Subject to certain exceptions, the husband cannot alienate or encumber any
real property of the conjugal partnership without the wife's consent. (Art. 166, Idem.) And the wife cannot bind
the conjugal partnership without the husband's consent, except in cases provided by law. (Art. 172, Idem.)

In the instant case, Gimena, the wife, sold lands belonging to the conjugal partnership without the consent of the
husband and the sale is not covered by the phrase "except in cases provided by law." The Court of Appeals
described the sale as "invalid" - a term which is imprecise when used in relation to contracts because the Civil Code
uses specific names in designating defective contracts, namely: rescissible (Arts. 1380 et seq.), voidable (Arts. 1390
et seq.), unenforceable (Arts. 1403, et seq.), and void or inexistent (Arts. 1409 et seq.)

The sale made by Gimena is certainly a defective contract but of what category? The answer: it is a voidable
contract.

According to Art. 1390 of the Civil Code, among the voidable contracts are "[T]hose where one of the parties is
incapable of giving consent to the contract." (Par. 1.) In the instant case-Gimena had no capacity to give consent to
the contract of sale. The capacity to give consent belonged not even to the husband alone but to both spouses.

The view that the contract made by Gimena is a voidable contract is supported by the legal provision that
contracts entered by the husband without the consent of the wife when such consent is required, are annullable at
her instance during the marriage and within ten years from the transaction questioned. (Art. 173, Civil Code.)

Gimena's contract is not rescissible for in such contract all the essential elements are untainted but Gimena's
consent was tainted. Neither can the contract be classified as unenforceable because it does not fit any of those
described in Art. 1403 of the Civil Code. And finally, the contract cannot be void or inexistent because it is not one
of those mentioned in Art. 1409 of the Civil Code. By process of elimination, it must perforce be a voidable
contract.

The voidable contract of Gimena was subject to annulment by her husband only during the marriage because he
was the victim who had an interest in the contract. Gimena, who was the party responsible for the defect, could
not ask for its annulment. Their children could not likewise seek the annulment of the contract while the marriage
subsisted because they merely had an inchoate right to the lands sold.

The termination of the marriage and the dissolution of the conjugal partnership by the death of Maximo Aldon did
not improve the situation of Gimena. What she could not do during the marriage, she could not do thereafter.
The case of Sofia and Salvador Aldon is different. After the death of Maximo they acquired the right to question
the defective contract insofar as it deprived them of their hereditary rights in their father's share in the lands. The
father's share is one-half (1/2) of the lands and their share is two-thirds (2/3) thereof, one-third (1/3) pertaining to
the widow.

The petitioners have been in possession of the lands since 1951. It was only in 1976 when the respondents filed
action to recover the lands. In the meantime, Maximo Aldon died.

Two questions come to mind, namely: (1) Have the petitioners acquired the lands by acquisitive prescription? (2) Is
the right of action of Sofia and Salvador Aldon barred by the statute of limitations?

Anent the first question, We quote with approval the following statement of the Court of Appeals:

We would like to state further that appellees [petitioners herein] could not have acquired ownership of the lots by
prescription in view of what we regard as their bad faith. This bad faith is revealed by testimony to the effect that
defendant-appellee Vicente V. Felipe (son of appellees Eduardo Felipe and Hermogena V. Felipe) attempted in
December 1970 to have Gimena Almosara sign a ready-made document purporting to self the disputed lots to the
appellees. This actuation clearly indicated that the appellees knew the lots did not still belong to them, otherwise,
why were they interested in a document of sale in their favor? Again why did Vicente V. Felipe tell Gimena that the
purpose of the document was to obtain Gimena's consent to the construction of an irrigation pump on the lots in
question? The only possible reason for purporting to obtain such consent is that the appellees knew the lots were
not theirs. Why was there an attempted improvement (the irrigation tank) only in 1970? Why was the declaration
of property made only in 1974? Why were no attempts made to obtain the husband's signature, despite the fact
that Gimena and Hermogena were close relatives? An these indicate the bad faith of the appellees. Now then,
even if we were to consider appellees' possession in bad faith as a possession in the concept of owners, this
possession at the earliest started in 1951, hence the period for extraordinary prescription (30 years) had not yet
lapsed when the present action was instituted on April 26, 1976.

As to the second question, the children's cause of action accrued from the death of their father in 1959 and they
had thirty (30) years to institute it (Art. 1141, Civil Code.) They filed action in 1976 which is well within the period.

WHEREFORE, the decision of the Court of Appeals is hereby modified. Judgment is entered awarding to Sofia and
Salvador Aldon their shares of the lands as stated in the body of this decision; and the petitioners as possessors in
bad faith shall make an accounting of the fruits corresponding to the share aforementioned from 1959 and
solidarity pay their value to Sofia and Salvador Aldon; costs against the petitioners.
ZENAIDA K. CASTILLO and EMILIO CORDOVA, JR., plaintiffs- appellants,
vs.
HORACIO K. CASTILLO, BEATRIZ K. CASTILLO, CONRADO VALERA (Formal Party), LOURDES K. CASTILLO, PELAGIO
ARAMBULO, JR. (Formal Party), ENRIQUETA LEONOR K. CASTILLO, YSIDRO K. CASTILLO, JR., CRISPIN K. CASTILLO,
ALICIA K. CASTILLO, BENJAMIN SORIANO (Formal Party), ERNESTO K. CASTILLO, and ENRIQUETA K. VDA. DE
CASTILLO, defendants-appellants.

Crispin Baisas & A Associates for plaintiffs-appellants.

Manuel O. Chan for defendants-appellants.

GUERRERO, J.:

This is a joint appeal from the decision dated January 13, 1961 as amended by an order dated February 4, 1961 of
the Court of First Instance of Manila in Civil Case No. 42496 entitled "Zenaida K. Castillo, et al versus Horacio K.
Castillo, et al." The dispositive portion of the decision states thus:

IN VIEW WHEREOF,

1. The Court orders the partition of the properties as follows.

a). The private properties of Ysidro Castillo consisting ill 38 parcels described in the project of partition shall be
partitioned in the proportion of 1/9 to each of the children, i.e., 1/9 to plaintiff;

b). The four (4) parcel of land share of the children in the conjugal properties as set forth in the project of partition
shall be also partitioned in the same proportion;

c). The seven (7) parcels of land under usufruct of Enriqueta shall also be partitioned in the same proportion but
subject to said usufruct.

d). The share in the property described in Exh. Plaintiff 2 shall be partitioned in the proportion of 1/36 to each of
the children and 1/4 unto Enriqueta Castillo the Court grants the partition as to the other in the proportion
outlined in par. (h) below;

e). The property described in Exh. Plaintiff 3, 7, 8 and 9 shah be partitioned in the proportion of to Enriqueta and
1/18 to each of the 9 children;

f). The property in Tagaytay City, exh. Plaintiff 63, shall be partitioned among the 9 children in the proportion of
1/9 each;

g). The partition of the properties in the names of defendants (with the exception of Enriqueta) i.e., these in Exhs.
36, 37, 38, 39, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 65, 66, 67, 68, 69, 70, 25, 26, 62, 56, 57, 58, 22, 59, 60, 61,
52, 53, 54, and 55 is denied; h).

h). The properties described in the remaining of Exh. Plaintiff 2 and those in Exhs. 6, 10, 12, 13, 15, 16, 17, 18,
19, 20, 21, 40, 72, 74, 75, 76, 78 and 78-A are ordered to be partitioned, giving unto plaintiff a 6/100ths undivided
share in the same;

i). The parties are given 30 days from notice to arrive at an amicable partition under the proportions set forth
above of the properties whose partition is decreed, should they fail to do so, the Court orders commissioners of
partition to be appointed to proceed accordingly
1. From and after the date of the filing of the complaint and until partition shall have been terminated, all the
income on the properties be partitioned shall he also partitioned in the proportion already stated:

2. The stock of plaintiff in the Tiaong Rural Bank is ordered cancelled and placed in the name of Enriqueta Vda. de
Castillo;

3. The counterclaims are dismissed.

4. No pronouncement as to costs except the costs of partition which shall be borne by all in proportion to the
share of each.

SO ORDERED, Manila, Philippines, 12 January, 1961.

Acting on the motion for reconsideration filed by plaintiff 's the court a quo on February 4, 1961, issued an Order,
amending its decision as follows:

... the Court does not agree that the situation of Dr. Horacio and his brothers and sisters is the same as that of
Enriqueta for the reason that with respect to Enriqueta there is definite proof and it is admitted by her that she
had been in administration of the common property even after the closing of the probate case; with respect to the
other portion of ground two as well as ground three concerning the monies which Enriqueta had used in her
personal investment and borrowings, the Court having adopted for this purpose the total of P153,591.69 and the
plaintiff complaining that this should be reduced because the money was raised after the properties of the
children had been used as collateral the Court does not agree that the said amount should be reduced; in the mind
of the Court the point is that this total sum of P153,591.69 were used by Enriqueta herself in her personal
investments; this will dispose of ground three, paragraph three; and for the reason that the mention by the Court
of the sale of the Moret property is only a preliminary to the acceptance by the court of the sum of P153,591.69,
stated otherwise, the proceeds of the sale of the Moret property having in fact been already in the computation by
the Court made a part of the investments by Enriqueta, there is no more need to modify this amount of
P153,591.69 with respect to the claim that Enriqueta had bought shares of stock in the Tiaong Rural Bank in the
sum of P107,410.00 if this is correct, and it is correct according to Exhibit Plaintiff 122, that really should be added
to the original sum of P359,350.00 found by this court as her acquisition and investments so that the total will be
P466,760.00; deducting from this the amount of P153,591.69 would leave a balance of P313,168.31; divide this by
9 which is the number of the children would give a quotient of P34,795.37 which is equivalent to 7% of
P466,760.00; the result will be to grant the motion in part and to deny it in part.

IN VIEW WHEREOF, the dispositive part of the decision on page 496, specifically paragraph (h) thereof is hereby
amended to read, as follows:

(h) The properties described in the remaining of Exh. plaintiff 2 and those in Exhs. 6, 10, 12, 13, 15, 16, 17, 18,
19, 20, 21, 40, 72, 74, 75, 76, 78 and 78-A are ordered to be partitioned, giving unto plaintiff a 7/100ths undivided
share in the same.

SO ORDERED.

The records disclose that Ysidro C. Castillo died on October 15, 1947 leaving as his heirs his wife Enriqueta Katigbak
and their nine children Horacio, Beatriz, Zenaida, Ysidro, Jr., Leonor, Crispin, Lourdes, Alicia and Ernesto.
Intestate proceedings for the settlement of the deceased's estate (Special Proceedings No. 4211 of the Court of
First Instance of Manila) were instituted and in January, 1948, Enriqueta Katigbak Vda. de Castillo was appointed
administratrix. On June 21, 1948, she filed an inventory of the properties as well as the obligations left by the
deceased. Two months thereafter, she was ordered to submit a project of partition. On August 23, 1948, she filed
an urgent petition asking the Court to reconsider its order on the ground that there were pending obligations of
the estate amounting to P90,920.00. However, on November 11, 1948, the surviving spouse as administratrix of
the intestate estate of Ysidro C. Castillo submitted a project of partition, stating that the properties which
constituted the residuary hereditary estate of the deceased Ysidro C. Castillo, after complete payment of debts,
funeral charges, expenses of administration, the allowance of the widow and inheritance and estate taxes are: (1)
38 parcels of land which are properties brought to the marriage by the deceased Ysidro C. Castillo and (2) 19
parcels of land which are conjugal properties of the spouses. Under said project of partition, all the 38 parcels of
land brought by the deceased into the marriage and 4 parcels of the conjugal properties were adjudicated to all
the nine children in equal shares, pro-indiviso; 8 parcels of the conjugal properties were adjudicated to the widow
as her share in the conjugal partnership and the remaining 7 parcels given in usufruct to the widow. Despite
approval of the project of partition and the closing of the intestate proceedings, the properties remained under
the administration of Enriqueta K. Vda. de Castillo.

On February 4, 1960, after an extrajudicial demand for partition failed, herein plaintiff-appellant Zenaida K.
Castillo, assisted by her husband, filed an action for partition with accounting and receivership against her mother
Enriqueta K. Vda. de Castillo and her brothers and sisters (Civil Case No. 42496, CFI of Manila). Alleging that the
project of partition omitted to include certain properties acquired by the defendants using community funds in
their acquisition, she prayed that said properties be divided and partitioned accordingly. The complaint was duly
answered by the defendants-appellants. After hearing, the Court of First instance of Manila rendered judgment on
January 12, 1961, which was amended on February 4, 1961. From said judgment, both parties appealed to this
court, raising the following assignment of errors:

PLAINTIFFS-APPELLANTS' ASSIGNMENT OF ERRORS

I. The lower court erred in finding that -plaintiff Zenaida K. Castillo was entitled to an undivided share of only
7/100ths in the properties described in the remaining 1/2 of Exhibit Plaintiff 2, and those in Exhibits 6, 10, 12, 13,
15, 16, 17, 18, 19, 20, 21, 40, 72, 74, 75, 76, 78 and 78-A.

II. The lower court erred in not finding that the income and the fruits of the common properties were used in the
acquisition of those properties in the names of defendants (with the exception of Enriqueta Vda. de Castillo) and in
consequently denying thu partition of the same.

III. The lower court likewise erred in not holding that the investments in the Tiaong Rural Bank of defendants (with
the exception of Enriqueta Vda. de Castillo) including the investment of P20,000.00 in the name of plaintiff Zenaida
Castillo, having an aggregate value of P318,950.00 were made with the fruits and income of the common
properties and consequently erred in not ordering the Partition of the same among the nine of them.

DEFENDANTS-APPELLANTS' ASSIGNMENT OF ERRORS

I. The lower court erred when it held that the money used in the purchase of 1/2 of the land covered by Exhibit
Plaintiff 2 below to the spouses Ysidro C. Castillo and Enriqueta Katigbak and therefore, erred when it ordered that
the same be partitioned as a conjugal partnership property.

II. The lower court erred when it held that the properties covered by Exhibit 2 (the remaining half 6, 10, 12, 13, 15,
16, 17, 18, 19, 20, 21, 40, 72, 74, 75, 76, 78 and 78-A were acquired with the fruits of the properties of Enriqueta K.
Vda. de Castillo under her administration and, therefore, erred when it ordered that the said properties be
partitioned.

III. The lower court erred when it denied the counterclaim of defendants-appellants.

Both plaintiffs-appellants and defendants-appellants under their respective assignments of errors the derision
rendered by the trial court on the following properties which the trial court itself classified as follows:

I. Those not included in the project of partition and allegedly acquired before the death of Ysidro Castillo;

II. Those acquired or purchased by Enriqueta Vda. de Castillo after the death of Ysidro Castillo; and
III. Those acquired by the brothers and sisters of plaintiff appellant Zenaida Castillo after the death of Ysidro
Castillo.

The first classification of properties are those claimed to be not included in the project of partition and allegedly
acquired before the death of Ysidro Castillo. And among these properties is the land described under Exhibit
Plaintiff 2, situated in Cabay, Tiaong, Quezon, with an area of 262,421 sq. meters originally co-owned by Romeo
Baldeo Ona. The lower court ruled that of this property was conjugal and therefore subject to partition among
the heirs. The defendants-appellants in their first assignment of error maintain that the lower court erred when it
held that the money used in the purchase of one-half of the land covered by said Exhibit belonged to the spouses
Ysidro C. Castillo and Enriqueta Katigbak and, therefore, it was erroneous for the court to order that it be
partitioned as conjugal partnership property. Defendants-appellants contend that in ruling thus, the lower court
committed error in disregarding the testimony of Enriqueta K. Vda. de Castillo which was corroborated by her
eldest son, defendant-appellant Horacio K. Castillo, that although she and her husband appear as two of the
buyers of said property, neither of them paid any part of the purchase price for lack of money at the time the deed
of sale was executed (Exhibit Plaintiff 2) 1 ; that neither did their co-buyers, the spouses Paulo Macasaet and
Gabriela Macasaet pay the whole price but merely gave a down-payment; that after the death of her husband and
the intestate proceedings were closed, Paulo Macasaet, upon learning that the land was involved in a litigation,
sold the entire parcel of land to her; that She had to make arrangements with the Baldeos in whose favor there still
remained the unpaid balance of the purchase price; that Macasaet agreed that Enriqueta K. Vda. de Castillo pay on
installment basis that portion of the purchase price he had already paid; and that the said installments were paid
from the fruits of the property sold and her other properties.

We find no error in the lower court's ruling that the money used in the purchase of of the land covered by
Exhibit Plaintiff 2 belonged to the spouses Ysidro C. Castillo and Enriqueta Katigbak and ordering that such land be
partitioned as conjugal partnership property. We must here underscore the specific rule in our civil law that all
properties of the marriage shall be presumed conjugal unless it be proved that they belong exclusively to either of
the spouses. 2 To rebut or overcome this presumption, there must be clear, convincing and satisfactory proof that
this consideration of the sale was paid by only one of the spouses and from her exclusive or separate property. 3

We agree with the plaintiffs-appellants that the version of Enriqueta K. Vda. de Castillo that the controverted
property is paraphernal cannot be given serious consideration. The improbability that her name and that of her
husband would not have been written as co- buyers of the land in Exhibit Plaintiff 2 unless they were the actual co-
purchasers thereof can easily be discerned It is indeed extremely difficult to believe that the vendor Romeo Baldeo
Ona would have acknowledged in the deed of sale receipt in full of the purchase price of P30,000.00 from the
vendees if he had not really received full payment from the latter, This version of Enriqueta becomes even more
doubtful in view of the fact that the vendor, Romeo Baldeo Ona, signed and executed the said deed of sale not
only in his personal capacity but also as attorney-in-fact of his brother Claro Baldeo Ona and his sister Adelaida
Baldeo Ona, for such fiduciary capacity naturally and rightly would have made him more careful and cautious in
entering into the transaction. It stands to reason to conclude that Romeo Baldeo Ona would not have signed or
executed the document in question unless its recital were in truth and in fact as therein stated. Although the
testimony of the surviving spouse regarding the nature of the property is corroborated by defendant- appellant
Horacio K. Castillo, the eldest of the surviving children, such corroboration cannot carry weight, the same being
self-serving. In fine, defendants-appellants have not come up with such substantial, satisfactory and convincing
proof as would be sufficient to rebut the presumption that the property in controversy is conjugal.

The document in question, Exhibit Plaintiff 2, is a public instrument valid and binding even as against third parties,
the said deed of sale having been duly registered in the Register of Deeds on June 23, 1947. The Register of Deeds
has duly certified that said deed of sale was duly recorded in the Registration Book under Act 3344. It needs no
further argumentation to hold that the defendants-appellants' gratuitous testimony cannot prevail over the
recitals in said public instrument, for it must be here reiterated that:
A recital in a public instrument celebrated with all the legal formalities under the safeguard of a notarial certificate
is evidence against the parties and a high degree of proof is necessary to overcome the legal presumption that
such recital is true." (Valencia vs. Tantoco, et al., 99 Phil. 824).

The second classification of properties are those acquired or purchase by Enriqueta Vda. de Castillo after the death
of Ysidro Castillo, among them the remaining one-half of the property described in Exhibit Plaintiff 2 as well as the
properties shown under Exhibits 6, 10, 12, 13, 15, 16, 17, 18, 19, 20, 21, 40, 72, 74, 75, 76, 78 and 78-A. The lower
court ruled that these properties were acquired with the fruits of the properties of the children of the spouses
Ysidro Castillo and Enriqueta K. de Castillo and, therefore, ordered that the said properties be partitioned.
Defendants-appellants under the second assignment of error take the position that the lower court committed a
reversible error. On the other hand, plaintiffs-appellants in their first assignment of error maintain that the lower
court erred in finding that Zenaida K. Castillo was entitled to an undivided share of only 7/100ths in these
properties mentioned under the second classification. Zenaida claims that she should be entitled to an undivided
share of at least 9/100ths of the said properties.

We agree with the reasoning of the trial court in its disposition of the properties enumerated under the second
classification, stated thus:

... (A)s to these, it must be conceived for the plaintiff that as there is no question that Enriqueta was the one who
administered the properties of the children not only after the death of Ysidro but even after the approval of the
project of partition, harvesting their fruits and it being established in the evidence that she did not during the
period after the closure of the intestate proceeding ever account to their children formally, for said harvests, to
the court, this is evidence that would indicate that she had obtained moneys of her claims one of them being
plaintiff, and it is a question what she did with these moneys; nor can the court account her version and that of her
witnesses that the lands hardly gave any creditable income being only coconut lands; what so the court is telling is
that they were 180 hectares assessed at no less than P100,000.00 and it is not easy for the Court to believe that
they had produced no creditable income for the ten years that she was alone in possession.

There is of course the difficulty that there is no clear proof on how much use the harvest she collected year after
year; this however, in the face of the established administration by her conducted and the admitted fact that she
was the one who harvest would be enough for the court to make her responsible x x x. now appears that for all
these properties, she spent at least a total of P359,350.00, the court making its additions, as follows:

Defendants-appellants maintain that contrary to the ruling of the lower court, Enriqueta K. Vda. de Castro, the
surviving widow and administratrix of the properties of her children, did not use the assets of her children for her
personal acquisitions. They argue that these properties in question were not acquired by her overnight but slowly,
involving thrift and knowledge of financing, by mortgaging her personal properties to obtain loans from the banks
and use the proceeds in building houses which were rent producing, by sewing a piece of her property located at
Moret Street, Sampaloc and invested the proceeds in the construction of other houses, sari-sari store and the
purchase of other parcels of land as well as investments in the Tiaong Rural Bank in the name of the children. She
had also income from the fruits of her citrus, rice and coconut plantation which increased her income, enabling her
to buy other parcels of land. On the other hand, the properties of their children produced no creditable income,
rather she testified that their income was not sufficient to defray all their expenses for their living, education,
medicine, and maintenance and improvement of the children's properties.

Defendants-appellants also claim that the court a quo erred in determining the total investments of the appellant
Enriqueta K. Vda. de Castillo and the appellant Zenaida Castillo's participation in the same when it included the
properties described under Exhibits 7, 8, and 9 which are admittedly conjugal partnership properties which the
court had already ordered their partition as such in its decision, hence, they cannot again be appreciated as
properties acquired with funds of the children to increase their share correspondingly.
The properties covered or described under Exhibits 10 and 40 which the lower court ordered to be partitioned are
also claimed by defendants-appellants not to belong to the defendant-appellant Enriqueta K. Vda. de Castillo. It is
claimed that Exhibit 10 is a deed entitled "Kasunduan ng Pagbibile at Magbibile Ulit" executed by Juan Maralit and
Maria Salamat in favor of the appellant Enriqueta K. Vda. de Castillo but the vendors, however, exercised their
right of repurchase and the lot was transferred to them. With respect to the land under Exhibit 40, the same
belongs to defendant-appellant Horacio Castillo, who purchased it from his mother, Enriqueta, for good and
sufficient consideration.

We cannot agree with defendants-appellants' theory that Enriqueta K. Vda. de Castillo did not use the fruits of the
properties of her children for her personal acquisitions. Since the evidence has fully established that Enriqueta
remained in administration and management of the common properties for quite a considerable period of time
after her husband's death which, from an examination of the documents evidencing the same would reach some
P800,000.00 in worth, whereas the fact was that her personal income alone was greatly disproportionate to her
acquisitions because for the years 1951-1958 her income was only P43,674.34 or a net average yearly income of a
little more than P5,400.00 a year, and the court a quo considered her explanation on how she was able to raise
and acquire her huge acquisitions, as unacceptable, We are not persuaded nor convinced to review, revise or alter
the lower court's conclusion. In fact, there is merit to plaintiffs-appellants' argument that the personal income of
Enriqueta was false and misleading since the sources thereof were questionable, the 16 hectares of citrus land
having been given to her only in May, 1956 per Exhibit 121-Plaintiff, the sale of her Moret property gave her only a
net of P19,500.00 in cash from the sale and the P75,000.00 loan from the Philippine National Bank was taken in
her capacity as attorney-in-fact of the children with properties of the children mortgaged as security therefor.
Moreover, the vastness of the properties allotted to the children in the project of partition consisting of 42 parcels
of land, assessed at about P100,000.00 with a combined area of more than 180 hectares, 84.36 hectares of which
consist of riceland and the rest being residential lots and coconut land planted with approximately 2,050 trees
cannot but be productive of substantial fruits and profits, an accounting of which Enriqueta as administratrix had
not submitted to the court.

As to defendants-appellants' claim that the properties described under Exhibits 7, 8 and 9 should not be
considered or included as properties acquired with funds of the children because they are admittedly conjugal
partnership properties and the court had already ordered their partition as such in its decision, We find the same
to be meritorious. Indeed, said lands under Exhibits 7, 8 and 9 were already ruled by the lower court as conjugal
partnership properties and subject to partition, pursuant to paragraph (e) of the dispositive portion of the
decision. Hence, from the total investment of P466,760.00 should be deducted the amount of P20,260.00
representing the investments relating to Exhibits 7, 8 and 9, thereby arriving at the sum of P446,500.00.

With respect to the property under Exhibit 10, We find the ruling of the lower court to be correct and meritorious.
Exhibit 10, of the plaintiff refers to a deed of sale with right of repurchase executed on April 30, 1955 by Juan
Maralit and Maria Salamat in favor of Enriqueta K. Vda. de Castillo for the sum of P3,600.00 with the following
conditions: (1) that vendors can exercise their right of repurchase for the same amount within two (2) years from
date of execution of contract; (2) that if repurchase is not effected within the 2-year period, then vendors would
be given a one-year extension; (3) that if after the one year extension vendors have not repurchased the property,
then the sale would be considered an absolute sale and said property can no more be the subject of repurchase.
Defendants- appellants through Exhibit Defendant 6 5 sought to show that the vendors repurchased the property
from Enriqueta K. Castillo in April, 1957 but that they could not locate the document relative thereto and that said
vendors have sold this same property to one Reynaldo Manguiat who was then the councilor of Tiaong, Quezon.
This exhibit which is an affidavit executed by the vendors on April 1, 1960 was rejected by the court a quo and to
this We acquiesce, since the affidavit (Exhibit 6) executed in 1960 is self-serving and cannot supersede or revoke
the deed of sale executed on April 30, 1955.
Defendants-appellants' assignment that the court erred in the inclusion of the property under Exhibit 40 in the
determination of the total investments, is without merit. Exhibit 40 covers a parcel of land in the name of
defendant-appellant Horacio Castillo, and while it is admitted that said property was purchased by Enriqueta K.
Vda. de Castillo from Florentino Villaverde the same was thereafter purchased by Horacio for good and sufficient
consideration and, therefore, the latter has exclusive right of ownership thereto. It is also pointed out that
although a discrepancy appears in the purchase price paid by the defendant-appellant Enriqueta K. Vda. de Castillo
for the land and the price appearing in Exhibit 40 as paid by Horacio to his mother, the latter explained that when
her husband band Ysidro Castillo died, Horacio was awarded his war damage claim which he gave to Mrs. Castillo
and when Exhibit 40 was executed, he delivered P1,500.00 more, thereby giving the impression that the
consideration for the parcel of land was the war damage claim amount plus P1,500.00 in cash. The recitals of
Exhibit Plaintiff 40, however, clearly belie Mrs. Castillo's assertion that the consideration was other than the
P1,500.00 as shown and cited as follows:

Na ako, ENRIQUETA K. CASTILLO, pilipino, balo, may sapat na gulang, naninirahan at may padalang sulat sa 1107
Pennsylvania, Malate, Manila, alang-alang at dahilan sa halagang ISANG LIBO AT LIMANG DAANG (Pl,500.00) PISO,
kuartang Pilipino, an ibinayad sa akin ni Dr. HORACIO K. CASTILLO, pilipino rin may sapat na gulang, binata,
naninirahan at may padalang sulat sa Poblacion, Bayan ng Tiaong, Lalawigan ng Quezon, ay aking ipinagbibili,
inililipat at isinasalin, at sa pamamagitan ng kasunduang ito ng BILIHANG LUBOS AT TULUYAN ay akin ngang
IPINAGBIBILI, INILILIPAT at ISINASALIN sa naulit na Dr. Horacio K. Castillo, sa kanyang magiging tagapagmana at
kahalili, ang isang lagay ng lupang tubigan, sampo ng lahat ng mga mejoras dito...

The document evidencing the sale of the property by Enriqueta to Horacio clearly indicates that the consideration
is the amount of P1,500.00, no more, no less. Said document is a notarized absolute deed of sale duly
acknowledged by Enriqueta before Notary Public Restituto C. de Ramos on May 3, 1955 in Tiaong, Quezon. We
must apply the rule deeply-rooted in Our jurisprudence that mere preponderance of evidence is not sufficient to
overthrow a certification of a notary public to the effect that a grantor executed a certain document and
acknowledged the fact of its due execution before him. To accomplish this result, the evidence must be so clear,
strong and convincing as to exclude all reasonable controversy as to the falsity of the certification. And when the
evidence is conflicting, the certification will be upheld. 6

We agree with the ruling of the court a quo that the property under Exhibit Plaintiff 40 was a property acquired
first by Enriqueta with the fruits of the common properties of the children and although it was later transferred to
defendant-appellant Horacio for P1,500.00 barely three months after it had been purchased by Enriqueta from
the, original owner Florentino Villaverde for P5,400.00, the patent disparity in the sale price to Horacio as well as
the evident partiality of the disposition in favor of Horacio, the eldest child who was her alter ego in the
administration of the undivided portion of her husband's estate, are strong and cogent reasons supporting the
holding of the lower court that this particular property should be considered part or included in the classification
of properties bought with the fruits of the children's properties and should, therefore, be partitioned in favor of all
the children of the deceased Ysidro Castillo.

We shall now address Ourselves to plaintiffs- appellants' assignment of errors and the third classification of
properties.

The first error assigned by plaintiffs-appellants is that the lower court erred in finding that plaintiff-appellant
Zenaida K. Castillo is entitled to an undivided share of only 7/100ths in the properties describe in the remaining
of Exhibit Plaintiff 2, and those in Exhibits 6, 10, 12, 13, 15, 16, 17, 18, 19, 20, 21, 40, 72, 74, 75, 76, 78 and 78-A.
According to her, she should be entitled to an undivided share of at least 9/100ths of the said properties.

According to the decision of the trial court, Enriqueta K. Vda. de Castillo spent at least a total of P359,350.00 in
acquiring the properties described under Exhibits 6, 10, 12, 13, 15, 16, 17, 18, 19, 20, 21, 72, 74, 75, 76, 78, 78-A,
40, of Exh. 2, E exh. 7, 8, and 9 (Decision, pp. 107-108, Record on Appeal). The court then added her investment
of P107,410.00 in the Tiaong Rural Bank, thus making an aggregate total of P466,760.00 as the value of properties
and investments acquired by Enriqueta after the death of her husband (Order of February 4, 1961, pp. 130-131,
Record on Appeal). And from the aggregate total of P466,760.00, there was deducted a sum of P153,591.69 which
the lower court accepted as Enriqueta's personal investments and borrowings, on the basis of her mortgage loans
as appearing in her statements of assets and liabilities (Exh. Plaintiff 123) as follows:

And after deducting P153,591.69 from the total investments of P466,760.00, leaving a balance of P313,168.31, the
court divided this by 9 which is the number of the children resulting in a quotient of P34,795-37 which is
equivalent to 7% of ?466,760.00. The court concluded that plaintiff-appellant Zenaida K. Castillo was entitled to a
7/100ths undivided share in the properties described in the remaining one-half of Exhibit Plaintiff 2 and those in
Exhibits 6, 10, 12, 13, 15, 16, 17, 18, 19, 20, 21, 40, 12, 74, 75, 76, 78 and 78-A.

Plaintiffs-appellants contend that the above computation of the court a quo is erroneous, claiming that the
P75,000.00 loan from the Philippine National Bank should not be included in Enriqueta's personal borrowings
because the collateral used in obtaining the same were three parcels of land belonging to the 9 children and that
in securing said loan from these collaterals, Enriqueta Vda. de Castillo signed not in her personal capacity but as
the attorney-in- fact of her children (Exhs. Plaintiff 125 and 125-A) and was in duty-bound to account for the same
to the children. And following the process adopted by the trial court, the amount of the P75,000.00 loan should be
deducted from P153,591.69, leaving a balance of P78,591.69 which should represent Enriqueta's personal
investments and borrowings. This amount of P78,591.69 should be deducted from P466,760.00 (the aggregate
total of properties and investments of Enriqueta acquired after her husband's death) and get a balance of
P388,168.31 representing the value of those properties impressed with the character of a trust to be divided
among the 9 children. P388,168.31 divided by 9 will give a quotient of P43,129.80 which is slightly over 9/100ths of
the aggregate total, as the share of each of the 9 children, including plaintiff-appellant Zenaida Castillo.

Disposing of this contention of plaintiffs-appellants, the court a quo in its order granting the motion for
reconsideration of plaintiffs-appellants in part and denying it in part, said: with respect to the other portion of
ground two as well as ground three concerning the monies which Enriqueta had used in her personal investment
and borrowings, the Court having adopted for this purpose the total of P153,591.69 and the plaintiff complaining
that this should be reduced because the money was raised after the properties of the children had been used as
collateral, the Court does not agree that the said amount should be reduced; in the mind of the Court the point is
that this total sum of P153,591.69 were used by Enriqueta herself in her personal investments;" (pp. 129-130,
Record on Appeal).

We agree with the above ruling of the lower court because, as pointed out by defendants-appellants, Enriqueta
was the sole debtor of the loan, the use of the collaterals not being authorized by the court or the children, and as
such should also be the sole benefactor thereof

In disposing previously defendants-appellants' second assignment of error in relation to the properties under
Exhibits 7, 8 and 9, We have ruled that from the total investment of P466,760.00 should be deducted the amount
of P20,260.00 representing the investments made in the acquisition of the properties under Exhibits 7, 8 and 9,
leaving a balance of P446,500.00. From this balance of P446,500.00 must be deducted the personal investments of
Enriqueta in the sum of P153,591.69 as accepted by the lower court, giving a balance of P292,908.31 which should
be divided by 9 (there being 9 children) making a quotient of P32,565.35, which is 7/100ths, more or less, of the
aggregate total, as the share of each of the 9 children, including plaintiff-appellant Zenaida K. Castillo. As a result
thereof, We reject plaintiffs-appellants' claim of 9/100ths and affirm the lower Court's disposition of 7/100ths in its
order of February 4, 1961.

With respect to the third classification of properties which are those acquired by the brothers and sisters of
plaintiff-appellant Zenaida Castillo after the death of their father Ysidro Castillo and which plaintiff-appellant
claims the court a quo erred in not finding that the income and the fruits of the common properties were used in
the acquisition of those properties in the names of defendants-appellants (with the exception of Enriqueta Vda. de
Castillo) and in consequently denying the partition of the same, We are in full agreement with the disposition by
the trial court and its rationale stated thus:

II ANow, however, the Court believes that it should eliminate from the right of plaintiff to demand partition, the
properties acquired not by her mother but by her brothers and sisters, Horacio, Crispin, Ysidro, Jr., Lourdes, Nita,
Alice and Ernesto, for the reason that there is no proof at all that the moneys with which they had acquired said
properties now claimed as common by plaintiff after the death of their father, had been so acquired with fruits of
the common properties to all of them adjudicated in the project of partition inasmuch that they had made use of
the share of plaintiff in said fruits; it is true that there is in the evidence an indication that the mother, Enriqueta,
had made Dr. Horacio Castillo her alter ego in her de facto administration after the death of her husband and even
after the approval of the project of partition; but the evidence points to the effect just the same that Dr. Horacio
was only such alter ego and no more and that his mother was the one that ultimately gathered the harvest; now
since this is the evidence, it cannot be said with reason that plaintiff has proved that her share in the fruits of the
common properties had been used by her brothers and sisters in their acquisition of these questioned properties;
if as she claims in her counsel's memorandum, said brothers and sisters were in no financial position to buy said
properties that alone while suspicious is no proof that they had used her money; the result will be to discard the
right to partition the properties described in Exhs. 36, 37, 38, 39, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 55, 66,
67, 68, 69, 70, 25, 26, 62, 56, 57, 58, 22, 59, 60, 61, 52, 53, 54, and 55." (Decision, pp. 104-105, Record on Appeal).

Ruling on the same point raised in plaintiffs- appellants' motion for reconsideration, the lower court was correct in
declaring that

... the fact that Dr. Horacio Castillo was an alter ego of the mother Enriqueta is no proof that he had used the
money coming from the fruits of his own purposes; the natural presumption should be that the money coming
from the fruits went to the principal and not to the agent; this will relieve Horacio; with respect to the brothers
and sisters neither is there any proof at all that the money coming from the fruits of the properties are or were
being used to enrich said brothers and sisters; mere suspicion cannot take the place of evidence; the Court does
not agree that the situation of Dr. Horacio and his brothers and sisters is the same as that of Enriqueta, for the
reason that with respect to Enriqueta there is definite proof and it is admitted by her that she had been in
administration of the common property even after the closing of the probate case. (Order of February 4, 1961, p.
129, Record on Appeal).

For the same reasons that We reject plaintiffs-appellants' second assignment of error, We find no merit to her
third assignment of error. Her claim that the investments in the Tiaong Rural Bank of defendants excepting her
mother Enriqueta, including the investment of P20,000.00 in the name of plaintiff-appellant Zenaida having an
aggregate value of P318,950.00 were made with the fruits and income of the common properties, is not supported
by factual evidence; at most, they are simply suspicions which, however, do not constitute proof. Circumstantial
evidence showing gross disparity in their income and investments as well as their refusal to submit their respective
income tax returns do not substantially support plaintiffs-appellants' contentions for it is her duty to establish her
allegations with preponderance of evidence based on clear, competent and cogent proofs which she failed to
discharge in the case at bar.

As regards the P20,000.00 shares of stock subscribed by defendant- appellant Enriqueta K. Vda. de Castillo for
plaintiff-appellant 'Zenaida K. Castillo in the Tiaong Rural Bank, without the knowledge of the latter, the lower
court disposed of it, saying: "There is no need to debate on the same since plaintiff is willing to have her share
subscribed without her knowledge, surrendered unto Enriqueta," (Decision, p. 109, Record on Appeal) and in the
dispositive portion of the decision ordered "2.The stock of plaintiff in the Tiaong Rural Bank is ordered cancelled
and placed in the name of Enriqueta Vda. de Castillo;" (Decision, p. 11 5, Record on Appeal).
Plaintiff-appellant in her Brief stated that she was willing to have these stocks cancelled and placed in her mother's
name but this manifestation was made under the belief and presumption that all properties and investments,
including this P20,000.00 stock, acquired with the fruits of the common properties, would be partitioned equally
among the 9 children. This is manifest from her evidence and pleadings and such willingness on her part would not
in any reasonable manner be taken as an intention on her part to waive her rights to said stock (Brief for Plaintiffs-
Appellants, p. 25). In other words, she contends that her willingness to surrender the stocks was conditional and
not absolute, to which We agree.

We note that in plaintiffs-appellants' Exhibit No. 122 listing the stockholders of the Tiaong Rural Bank as of
September 30, 1960, there are also subscribed shares in the same amount of P20,000.00 in the name of Alicia K.
Castillo, another P20,000.00 in the name of Lourdes K. Castillo, and another P20,000.00 in the name of Beatriz K.
Castillo, all sisters of the plaintiff-appellant Zenaida K. Castillo. 'There is strong and cogent reason to conclude that
Enriqueta K. Vda. de Castillo, the mother, intended her children Alicia, Lourdes, Beatriz and Zenaida to be the
beneficiary of these stocks but with respect to Zenaida, Enriqueta has now adopted a volte face stance because of
the complaint filed by Zenaida. Since there is no unequivocal and categorical waiver of her rights to said stocks, We
rule that the same be maintained in her name, just as the shares of Alicia, Lourdes and Beatriz are recognized in
their respective names.

Defendants-appellants under their third assignment of error maintain that the lower court erred when it denied
the counterclaims of defendants-appellants. We are in full agreement with the ruling laid down by the lower court
that absent any showing that the complaint was malicious and Chat in fact said court found the complaint
meritorious to a reasonable extent, damages may not be claimed by defendants-appellants. The lower court ruled
correcting when it said:

III. Those of the brothers and sisters hardly need any discussion; they refer to moral damages of defendants
Beatriz, (answer, p. 32), Crispin (Answer, p. 62), Horacio, Lourdes, Leonor, Alicia, Ysidro, Jr. and Ernesto, (Answer,
p. 35) but there is no showing that the complaint was malicious, in fact the court has found it meritorious to a
reasonable extent; as to the counterclaims of the mother, Enriqueta, while it must be admitted that this case is
peculiar in that it is one filed by a daughter against her own mother, that alone does not justify any counterclaim,
specifically for the exemplary damages and moral damages sought to be collected since the complaint as has been
said has been found to have some merit; as to the counterclaim for expenses for Zenaida's education, living
maintenance, medical expenses, vacation to Hongkong and Japan for her health the court does not see that they
are proper items for counterclaim; it does not appear that they were loaned moneys from which Enriqueta had
expected to be repaid; on the contrary to an indications they were spent if truly all of them were, as part of the
obligation she believed herself bound to perform for her daughter; at least that is the law that the parent should
support the child; as to the counterclaim for the stay of Zenaida in the apartment in Pennsylvania, there is no proof
either other than the mother's uncorroborated testimony that Zenaida had agreed to pay for her stay; to all
indications, once again, she was allowed to stay because she is her own child, apart from the finding already made
by the Court that virtually, Zenaida was a co-owner and could therefore stay without paying; as to the
counterclaim for damages allegedly suffered because Zenaida cancelled the authority by her previously given unto
her mother to give their properties in security for her mother's overdraft, the Court accepts Zenaida's contention
that it was her right and that being the case, the cancellation and its effect was damnum absque injuria as to the
counterclaim for the share of Zenaida in the P60,000.00 allegedly paid by the mother unto the creditors of the
intestate, and which seeks to impose upon Zenaida the payment of that share in the sum of P6,666.00, the Court
once again will have to accept her contention that in the very project of partition presented by her in Special
Proceeding No. 4211, Enriqueta manifested that there were no more debts; (Page 1, Project of Partition, Exh. Plff.
1); and her testimony that she had paid them after the closing of the intestate neither is clear and convincing:

xxx xxx xxx

at any rate, while it may have been true that she did really pay the RFC after the closing of the intestate, as can be
seen in Exh. Def. 4, the bank book of the RFC and her total debt therein satisfied after that was P17,452-53 so that
1/9 of it would be P1,939.17 and this should be shouldered by Zenaida, it should be remembered that the Court
already had adjudicated unto Enriqueta the worth of all her borrowings in the total sum of P153,591,69, so that
she no longer should be allowed once again to recover that from the children; ...

Indeed, the right of plaintiff-appellant Zenaida Castillo to demand partition is indisputable, such right being
embodied in paragraph 1, Article 494 of the New Civil Code which provides thus:

No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time the partition
of the thing owned in common, insofar as his share is concerned.

With respect to Zenaida's brothers and sisters as co-owners, they were necessary parties and had to be joined as
defendants in compliance with the procedural requirement embodied in Section 1, Rule 69 of the Revised Rules of
Court which provides thus:

A person having the right to compel the partition of real estate may do so as in this rule prescribed, setting forth in
his complaint the nature and extent of his title and an adequate description of the real estate of which partition is
demanded and joining as defendants all the other persons interested in the property.

The finding of the trial court that the firing of the complaint in the case at bar was not malicious is a finding of fact
which is binding and conclusive upon Us, thereby negating any award of damages against plaintiffs-appellants,
following the ruling that it is not a sound policy to place a penalty on the right to litigate (Koster Inc. vs. Zulueta, 99
Phil. 945; Receiver for North Negros Sugar Co., Inc. vs. Ybanez, L-22183, Aug. 30, 1968), and that in order that a
person may be made liable to the payment of moral damages, the law requires that his act be wrongful. The
adverse result of an action does not per se make the act wrongful and subject the actor to the payment of moral
damages. The law could not have meant to impose a penalty on the right to litigate; such right is so precious that
moral damages may not be charged on those who may exercise it erroneously." (Barreto vs. Arevalo, 99 Phil. 771).

WHEREFORE, the judgment appealed from is hereby AFFIRMED but with the modification that the stocks of
plaintiff-appellant Zenaida K. Castillo in the amount of P20,000.00 in the Tiaong Rural Bank remain in her name. No
pronouncement as to costs.

SO ORDERED.

Teehankee (Chairman), Makasiar, Fernandez, De Castro and Melencio-Herrera, JJ., concur.

SIXTO HERNANDEZ, complainant,

vs.
Attorney FRANCISCO VILLANUEVA, respondent.

Attorney-General Paredes for the Government.

The respondent in his own behalf.

MALCOLM, J.:

Proceedings having for their purpose the suspension or disbarment of Francisco Villanueva, an attorney admitted
to practice in the Philippine Islands, have been initiated in this Court by complaint of one Sixto Hernandez. An
investigation has been held by the Attorney-General who, in a report to this Court, recommends that the first and
second charges be dismissed, and that disciplinary action be taken on the third charge. The respondent has filed a
written argument in his own behalf and an oral argument has been made for him by counsel.

The charges made against the professional conduct of Attorney Francisco Villanueva are grave. The first count
against him relates to a simulation of a contract, and the second to his acceptance of retainers in two suites
involving the same property from parties having adverse interest. We agree with the Attorney-General that these
allegations have not been substantiated. The remaining charge is to the effect that the respondent Villanueva
purchased from his client Florencia Anuran, a parcel of land that was the subject-matter of the litigation. Our task
narrows, therefore, to ascertaining the truth relative to the last charge and to applying the law to the facts.

We find as a fact, substantiated by the evidence, likewise found by the Attorney-General, and partially admitted by
the respondent, that while the case involving the property of his client, Florencia Anuran, was pending before the
Supreme Court, Attorney Francisco Villanueva purchased from her in consideration of P500, and the value of his
professional services, a parcel of land that was the subject-matter of the litigation which he was conducting. Is this
a breach of professional ethics and does it violate any of the regulations laid down for the guidance of attorneys-
at-law?

Chapter 2, title IV, book IV of the Spanish Civil Code, is entitled, "Capacity to Purchase or Sell." Article 1459 names
the persons who cannot take by purchase either in person or through the mediation of another. By the last
paragraph of the article, the prohibition is made to include lawyers "with respect to any property or rights involved
in any litigation in which they may take part by virtue of their professional and office."

Our first inquiry, naturally, is whether this provision of the Civil Code is still in effect. It is a general rule that such
municipal law of the former sovereignty as is consistent with the Constitution and laws of the United States, or the
characteristics and institutions of government, continues in force until abrogated or changed by the new
government. Article 1459 of the Civil Code has never been expressly repealed by any Act of the United States
Congress or the Philippine Legislature. The codal provisions of the Civil Law are moreover consonant with the
principles of the Common Law and the Statute Law which have been evolve for the guidance of lawyers. For
instance, section 10 of the Code of Ethics of the American Bar Association, adopted by the Philippine Bar
Association, provides that: "The lawyer should not purchase any interest in the subject-matter of the litigation
which he is conducting." While most of the American statutes aim to prevent the purchase of a law suite as the
most odious form of champerty, there is nothing to indicate that the mischief which our statue aims to prevent is
opposed to any maxim of American jurisprudence. All the reason of the case corroborates a rule so amply
protective of the confidential relations, which must necessarily exist between attorney and client, and of the rights
of both. The high trust and confidence which the citizen must repose in the attorney can only be attained if the
attorney observes the utmost good faith toward the client. Public policy will be promoted by the observance of the
Code provision.

We hold the last paragraph of division 5 of article 1459 of the Civil Code to be in full force and effect.

Counsel argues that when Attorney Villanueva purchased the interest of his client he did so in good faith, believing
that the last paragraph of article 1459 of the Civil Code had been abrogated by the Common Law. While as we said
in another case, a lawyer is not supposed to know all the law, he is supposed to take such reasonable precautions
for his professional guidance as will not make him who is expected to uphold the law, a transgressor of its
precepts. Ignorance of the law or error of judgment as to the attorneys' rights, as urged at the bar, may possibly
slightly condone, but certainly cannot entirely pardon, the action of the attorney.

Counsel finally invites attention to the fact that the proceedings have been instituted not by the client, the injured
party, but by a third person. This is not fatal, since the proceeding is not in the nature of a civil action to nullify the
transaction, but is a charge presented in the public interest in an effort to purge the legal profession of an
undesirable member. Any citizen would have sufficient interest to justify him in bringing unprofessional conduct of
any character to the attention of the proper authorities. The decision of this Court in the case of Wolfson vs. Estate
of Martinez ([1911], 20 Phil., 340) is not applicable.

In determining what action should be taken relative to the misconduct of the respondent Attorney Francisco
Villanueva, we call to mind the following: Attorney Villanueva's violation of the law and of the canons of legal
ethics partly balanced by his alleged good faith, his long professional career and former high standing at the bar
 and the fact that this was his first transgression against the ethics of the profession. A mere reprimand would be
mistaken charity; permanent disqualification would be overly stern punishment; suspension for a reasonable
period is applied justice. (See In re Calderon [1907], 7 Phil., 427; State vs. Nix [1914], 135 La., 811.)

It is the order of this Court that the license to practice law heretofore issued to Francisco Villanueva be suspended
for six months, to begin from this data. The costs shall be taxed in accordance with Section 24 of the Code of Civil
Procedure. So ordered.

VICENTE GODINEZ, ET AL., plaintiffs-appellants,

vs.
FONG PAK LUEN ET AL., defendants, TRINIDAD S. NAVATA, defendant-appellee.

Topic: Kinds of Contracts as to Validity Void or Inexistent Contracts

Facts:
The plaintiffs filed a case to recover a parcel of land sold by their father Jose Godinez to defendant
Fong Pak Luen. Said defendant executed a power of attorney in favour of his co-defendant Kwan Pun
Ming, who conveyed and sold the above described parcel of land to co-defendant Trinidad S. Navata. The
latter is aware of and with full knowledge that Fong Pak Luen is a Chinese citizen as well as Kwan Pun
Ming, who under the law are prohibited and disqualified to acquire real property; that Fong Pak Luen has
not acquired any title or interest in said parcel of land as purported contract of sale executed by Jose
Godinez alone was contrary to law and considered non-existent. The defendant filed her answer that the
complaint does not state a cause of action since it appears from the allegation that the property is
registered in the name of Jose Godinez so that as his sole property he may dispose of the same; that the
cause of action has been barred by the statute of limitations as the alleged document of sale executed by
Jose Godinez on November 27, 1941, conveyed the property to defendant Fong Pak Luen as a result of
which a title was issued to said defendant; that under Article 1144(1) of the Civil Code, an action based
upon a written contract must be brought within 10 years from the time the right of action accrues; that
the right of action accrued on November 27, 1941 but the complaint was filed only on September 30,
1966, beyond the 10-year period provided by law.
The trial court issued an order dismissing the complaint.
A motion for reconsideration was filed by plaintiffs but was denied.

Issue:
Whether or not the sale was null and void ab initio since it violates applicable provisions of the
Constitution and the Civil Code.

Held: No.

Prescription may never be invoked to defend that which the Constitution prohibits. However, we
see no necessity from the facts of this case to pass upon the nature of the contract of sale executed by
Jose Godinez and Fong Pak Luen whether void ab initio, illegal per se, or merely prohibited. It is enough
to stress that insofar as the vendee is concerned, prescription is unavailing. But neither can the vendor or
his heirs rely on an argument based on imprescriptibility because the land sold in 1941 is now in the hands
of a Filipino citizen against whom the constitutional prescription was never intended to apply. As earlier
mentioned, Fong Pak Luen, the disqualified alien vendee later sold the same property to Navata, a Filipino
citizen qualified to acquire real property. Navata, as a naturalized citizen, was constitutionally qualified to
own the subject property.
THE UNITED STATES, plaintiff-appellee,
vs.
POLICARPIO TAYONGTONG, defendant-appellant.

Jose M. Arroyo for appellant.

Acting Attorney-General Harvey for appellee.

MORELAND, J.:

The defendant in this case was convicted of the crime of homicide by negligence (homicidio por imprudencia
temeraria). He appealed, basing his whole case here upon the proposition that the evidence does not warrant the
conviction.

It appears that on the 19th day of January, 1911, one Severino Resume was engaged in painting telephones poles
located along the highway between Jaro and Iloilo. On that day he was killed by being run over by an automobile
driven by the defendant. The highway at the point where Severino met his death was straight, of considerable
width, and in good condition. The telephone pole upon which Severino was at work at the time of the accident was
outside of the beaten portion of the highway and located about 2 feet into the grass at the side. Between it and
the edge of the road was a pathway used by people traveling on foot. The machine which caused the death of the
deceased is a large passengers, and having upon each side and extending about 2 feet out beyond the wheels a
rack or other contrivance for the carrying of parcels, baggage, and freight. It is used solely for the purpose of
carrying passengers back and forth between Iloilo and Jaro.

The accident happened at about 10 o' clock in the morning. The automobile was then engaged in making its third
trip from Iloilo at Jaro, and was loaded to its fullest capacity. There were several people who claim to have
witnessed the accident. One of them, the principal witness for the prosecution, and its only witness who saw the
occurrence, named Pablo Tayson, is alleged to have been standing within a few feet of the deceased, talking with
him, at the time he was run down. Another person, who was near by at the time of the accident, was Basilio
Severaldo, who was engaged in the same work as the deceased but, just prior to the passage of the automobile,
had gone away from the locality where the accident occurred and saw nothing of what happened. Two other
persons, who have been produced as witnesses for the defendant, allege that they were present and saw the
whole occurrence.

Pablo Tayson, who, as we have said, is the only witness for the prosecution testifying directly to the facts and
substantially the only witness upon whom the prosecution relies for a conviction, testified that at the time of the
accident he and the deceased were located on the left-hand side of the highway going from Iloilo at Jaro; that he
was standing a few feet from the deceased who was also on the same side of the highway; that the deceased was
standing up painting the side of the telephone pole toward Jaro; that the telephone pole was, therefore, between
the deceased and Iloilo, the direction from which the automobile was coming; that the road on that day was very
dusty and the automobile, as he saw it coming from Iloilo toward him and the deceased, was raising a cloud of
dust which he was drifting to the side of the road upon which he and the deceased were located. This witness
further asserted that he saw the automobile when it was within about 1,200 feet of the place where he stood; that
it was coming at a rate of speed variously termed by him "very fast" and "at full speed;" that, on observing the
machine as it approached, he saw that the driver, the accused, was turning the steering wheel first in one direction
and then the other, as if uncertain what course he was going to pursue; that the machine, as a consequence, was
darting first to one side of the road and then to the other, thus zigzagging back and forth across the traveled
portion of the highway; that just before reaching the place where deceased was painting the telephone pole it
crossed to the side of the road opposite to him and then suddenly started back across the road opposite to him
and then suddenly started back across the road, striking the deceased as he stood painting; that by the impact the
deceased was thrown upon the ground somewhat toward the front of the machine, which was going so fast that,
although the accused was not within the reach of its wheels, nevertheless, the "suction," as the witness called it,
created by the swift passage of the machine drew the deceased under its wheels where he was run over and
crushed.

From the testimony of the witness it does not appear that the deceased moved or stirred in any way until he was
hit by the automobile.

The accused testified, and produced several witnesses to support his testimony, that at the time of the accident he
was driving the machine, which was loaded to its fullest capacity with passengers and baggage, at about 10 to 15
miles an hour; that he was driving in or near the center of the road and pas to either side; that the machine was
under full control and was going steadily and smoothly without deviating to the right or to the left; that on
approaching the place where the witness Pablo Tayson stood he saw him turn his back toward the road and place
his cap over his face in such a way as to cover his nose, mouth and eyes, evidently to protect them from the cloud
of dust which was rolling from behind the machine over toward the side of the road on which he was; that the
deceased, as the machine approached, probably seeing the cloud of dust which it was raising and which would
inevitably drift in his direction, and observing his companion, Pablo Tayson, under the necessity of protecting
himself from the dust in the manner described, just before the machine reached a point opposite him, started to
cross the road to the other side, evidently to escape the dust; that he misjudged the distance and started too late;
that in attempting to cross he placed himself squarely in front of the machine; that his movement was so sudden
and unexpected and, when he reached the road, he was so close to the machine that it was impossible to stop it in
time to avert the catastrophe; that he did everything that was possible to be done to avoid the accident; that he
put on both brakes as hard as possible and turned the machine as much as could be done under the
circumstances; that in proof thereof he shows that only the front wheel of the machine passed over the body of
the deceased, it having been turned by him sufficiently so that the mind wheel missed him, and that the machine
was stopped a very few feet beyond the point where the accident occurred. The accused testified, and his
evidence in this regard is uncontradicted, that he was thoroughly qualified as a driver, having served his
apprenticeship on this very road and this very machine before being employed.

The accused denies absolutely that portion of the story told by Pablo Tayson in which he alleges that the accused
was driving at a high rate of speed; that he was zigzagging from one side of the road to the other; and that he
struck the deceased while he stood painting the telephone pole.

We are satisfied that the evidence is not sufficient to convict. On the contrary, we believe that, under all of the
facts and circumstances of the case, the fair preponderance of the evidence indicates that the deceased met his
death in substantially the manner described by the accused. In the first place, the testimony of Pablo Tayson is
affected by an attack made upon his credibility during the progress of the trial. It was shown that, on the
preliminary investigation had by the justice of the peace, this witness testified, precisely as the accused asserted in
his evidence, that just as the machine was arriving at a point in the highway opposite him, he, desiring to avoid the
unpleasantness of the dust, turned his back toward the road and covered his face with his cap, thereby excluding
the dust from his mouth, eyes, and nostrils. That he so testified on the preliminary investigation, according to the
record thereof, is admitted. In his testimony on the trial of this case he stated, at first, that he turned his right side
to the road and placed his hand over the side of his face. leaving his eyes uncovered, so that he was able to see
and did see the deceased at the time he was run down. Upon cross-examination he changed this testimony to the
extent of saying that he covered the right side of his face with his cap instead of his hand, maintaining, however,
that he did not cover his eyes and that he was able to see the deceased and all that transpired. When confronted
with the evidence which he gave on the preliminary examination, he sought to explain the difference between his
two declarations by stating that the testimony before the justice of the peace, which was reduced to writing and
signed by him, was in a different language from that which he was able to speak and to speak and that it was not
translated so that he knew what he was signing.

In the second place, the testimony of this witness is unreasonable. It is improbable that a machine as large as the
one in question, going at the rate of speed described by Pablo Tayson, could zigzag from one side of the highway
to the other in the manner described by the witness. It is still more improbable that this machine could have
dodged from the right-hand side of the road to the left and, in some unknown manner, picked the deceased out
from behind the telephone pole, dragged him into the highway and there run over him. It is not clear how an
automobile can run over a man when it is admitted that he is on the opposite side of a telephone post from the
machine which ruins him down, with only a portion of his body extending beyond it. Even if the machine had
started toward him in the manner described he would undoubtedly have seen it quickly enough to have passed
around the other side of the post and save himself from being touched. This is especially evident when we observe
that it is admitted that the deceased stood facing the automobile all the time and could see it plainly and its every
movement. It is difficult to believe that a machine of the size of the one in question, driven at the high rate of
speed alleged by the witness, could have turned suddenly, darted toward the ditch, and struck the deceased while
located partly on the opposite side of a post from the machine without having collided with the post or gone into
the ditch, it being remembered that the post was not more than 6 feet from the ditch.

From the transcription given of the machine it appears, as we have already seen, that there were certain portions
of the body of the machine extending over and beyond the wheels, which were used as receptacles for the
baggage and bundles of passengers. This projection, under the theory of the prosecution, would necessarily have
been the portion of the machine to hit the deceased for the reason that no other part of the machine could have
come in contact with him without the projection referred to striking the telephone pole. If this projection is that
which struck the deceased first, then he would have been thrown into the ditch away from the machine and not
into the highway under the machine. This is what would necessarily have happened when we remember that at
the time the deceased was struck the machine was going at full speed toward the ditch. It was apparently to avoid
the contradiction of his previous testimony inherent in this necessary result that the witness testified that the
force which prevented the deceased from going into the ditch and drew him under the machine was the "suction"
created by its rapid passage along the highway.

It is undisputed evidence of the case that that portion of the machine which struck the deceased first was the
mudguard over the left wheel. This fact alone shows the impossibility of the machine having hit the deceased
while standing at the post, as it is admitted that no part of the automobile collided with the post. If the deceased
had been at the post, as described by Tayson, the guard could not possibly have struck him without the extended
portions described having struck the post itself.

On the otherhand, the story told by the accused and supported by some of the passengers who saw the accident is
entirely reasonable, accords with common sense and ordinary experience. It was clearly told, in a manner frank
and straightforward, was free from contradictions and needs no explanation or excuses.

We have read with detention the opinion upon which the judgment of conviction is based. In spite of careful study,
we are unable to discover anything therein that alters our views in relation to the merits. As between the two
theories, the one of the prosecution and the other of the defense, we cannot have, under the evidence and record,
any hesitation in choosing. The evidence presented by the prosecution itself, and it is upon that evidence alone
that the conviction must stand, every other fact in the record being conspicuously in exculpation of the accused,
shows the deceased standing upon the east side of a telephone pole facing an automobile coming toward him
from the west, about half of his body extending beyond the pole toward the highway on his left. On his right was
the highway drainage ditch. The pole was outside of the travelled portion of the highway so far that a footpath lay
between it and said traveled portion. The automobile was coming toward him at a high rate of speed, to judge
from the evidence of this witness, at least 40 miles an hour, possibly more. The machine was not proceeding in a
straight line but it was going from one side of the road to the other. Just before arriving opposite the deceased it
darted to the right-hand side of the road and then, turning, it started toward the left-hand side directly at the
deceased. All of these things the deceased saw, yet he did not move or attempt to save himself in any way. On the
contrary, he stood still and permitted the machine to strike him upon his left side. Having collided with him, the
machines turned back toward the center of the highway, carrying the deceased with it, depositing him within the
traveled portion of the highway, where it ran over him. On the other hand, the evidence of the defendant shows
that he was driving the machine at a moderate rate of speed within the usually traveled portion of the highway,
guiding it in a substantially straight line and handling it in the usual and ordinary manner. The machine, one of
extraordinary size and capable of carrying 35 passengers with their baggage and effects, was incapable of running
at the rate of speed described by the prosecution. Arriving at a point in the highway just in front of the deceased,
the latter, to avoid the cloud of dust which was drifting to his side of the road, started to cross the road to the
other side. He miscalculated the time and distance and as a result was struck by the automobile and run over. His
action in starting across the road was so sudden and unexpected and, when he reached the road, he was so close
to the automobile, that it was impossible to stop the machine in time to save him. The body was picked up within
the traveled portion of the highway.

Which of these two stories is the most reasonable? We have no hesitation in answering. The story of the
prosecution presents so many things that are unreasonable and incredible and for which there exists in the record
no explanation whatever, and concerning which no reasonable explanation can give, that it must necessarily be
rejected. Even if, going at such a high rate of speed, the accused could have driven the automobile from one side
of the road to the other as alleged, what could possibly be his reason for so doing? It was market day at Jaro; this
was his third trip; the machine was loaded to its utmost capacity, both with passengers and with baggage; he was
doubtedly running according to a schedule and would have no time to waste in going from one side of the road to
the other; no reason is suggested and one can be supplied why a driver should handle his machine in the manner
described by the only witness for the prosecution who saw the whole occurrence. Instead of Kepping to the
travelled portion of the highway, which was admittedly in fine condition, why should the accused go outside of it,
across a foothpath used by pedestrians, and skin alongside of the telephone poles located on that side? What
object could he have had in thus exposing himself, his passengers, and his machine to the risks and dangers of
plunging into the drainage ditch or driving against the telephone poles or meeting the other disasters and dangers
which might be encountered outside of the usually traveled portion of the highway? No explanation of such
extraordinary conduct is given in the record and none can be conceived. He was not engaged in taking a party of
hilarious companions on a "joy" ride, nor in giving an exhibition of his skill in handling an automobile of that size
and class. It does not appear that he was drunk or foolish. He was engaged in a business enterprise, employed by a
businessman purposes. What could possibly have been his purpose when, or arriving at a point in front of the
deceased, he turned his automobile across the road and started squarely toward the telephone pole and the
deceased? That he saw the deceased and that the deceased saw him is admitted. What spirit or purpose could
have animated him in driving his automobile outside of the highway directly toward not only a telephone post but
the drainage ditch itself in order to run down an unoffending person? What motive can be assigned by the
prosecution when it asserts that the accused did this unaccountable thing? What purpose does the prosecution
allege the accused sought to subserve when, by this conduct, he placed the safety of his passengers and of his
machine, as well as of himself, at stake in thus driving directly toward a place of great danger? Above all, why did
the deceased stand still, instead of stepping around behind the post, and permit himself to be crushed to death by
the machine which he clearly saw bearing down upon him? These unreasonable and accountable things must be
satisfactorily explained by the prosecution when it is confronted by the statement of the accused, supported by a
number of disinterested witnesses, that none of those things ever occurred. We have already pointed out that,
giving the story as told by the prosecution credence, it would have been little short of an impossibility for the body
of the deceased to have found itself in the travelled portion of the highway after the accident. He would inevitably
have been driven further away from the highway and toward the ditch by the blow from the machine going in the
direction in which it was alleged by the prosecution to have been going.

Turning to the story of the event as given by the defendant and his witnesses, we meet nothing that requires
explanation. There can, therefore, be no hesitation on our part in accepting the truth of the story told by the
defendant.
Although we have held in a recent case (U. S. vs. Reyes, 10 Off. Gaz., 1045), a criminal action for homicide
by imprudencia temeraria, that contributory negligence on the part of the person killed is no defense, provided the
driver of automobile himself was negligent and that negligence was the proximate cause of the death,
nevertheless, that doctrine does not in any way inveigh against the proposition which we here assert that, where
death is due to the negligence of the decedent himself and not to the negligence of the driver of the automobile,
the latter cannot be held for homicide. In this case the death of the deceased was due entirely to his own
negligence. There is not sufficient reliable proof in the record to establish negligence on the part of the accused.
There being no negligence, he is not responsible, no matter what the result of the accident may have been.

The judgment of conviction is reversed and the accused acquitted.

MUNICIPAL COUNCIL OF ILOILO vs. EVANGELISTA

(55 Phil 290); November 17, 1930

FACTS: The Court of First Instance of Iloilo rendered judgment wherein the appellant herein Tan Ong Sze Vda. De
Tan Toco sought to recover the value of a strip of land belonging to said appellant taken by the petitioner herein to
widen a public street. After the case was remanded to the court of origin and the judgment rendered therein had
become final and executor, Atty. Evangelista in his own behalf and counsel for the administratrix of Jose Ma.
Arroyos interest estate filed a claim in the same case for professional services rendered by him. At the hearing on
the said claim various claimants appeared claiming the amount judgment.

After the hearing all the adverse claims on the amount of the judgment were recorded in favor of Atty.
Evangelista, in his own behalf and as counsel for the administratrix of the deceased Arroyo and directed the
Municipality of Iloilo to file an action of interpleading against the adverse claimants, the PNB, Antero Soriano,
Mauricio Cruz & Co., Jose Evangelista and Jose Arroyo. Thereafter, the municipal treasurer of Iloilo paid the late
Antero Soriano the amount of 6,000 in part payment of the judgment assigned to him by Tan Boon Tiong, acting as
attorney-in-fact of Tan Ong Sze Vda. De Tan Toco. The amount of 6,000 in part as payment of the judgment was
also delivered to Atty. Evangelista as counsel for the late Jose Ma. Arroyo. With these two payments of 6,000 each,
the judgment for 42,966.44 against municipality of Iloilo was reduced to 30,966.40, which was adjudicated by said
court to Mauricio Cruz & Co.

ISSUE: WON the assignment of credits, rights and interest belonging to Tan Ong Sze made by Tan Boon Tiong, as
attorney-in-fact of Tan Ong Sze Vda. De Tan Toco to Atty. Antero Soriano by virtue of the judgment rendered in
civil case in consideration of professional service rendred is in contravention of the prohibition contained in Article
1459, paragrapg 5 of the Civil Code.

RULING: No! The appellants contention that the amounts of P200 and P500 should be considred as payments
made to Atty. Antero Soriano for professional services rendered by him personally to the interest of the widow of
Tan Toco is untenable. In view of the fact that the amounts involved in the cases prosecuted by Atty. Soriano as
counsel for Tan Tocos widow, some of which cases have been appealed to this court, run into hundreds of
thousands of peos, and considering that said attorney had won several of those cases for his clients, the sum of
P10,000 to date paid to him for professional services is wholly inadequate, and even if indirectly, that the
assignment of appellants rights and interests made to the late Atty. Soriano was made in consideration of the
professional services rendered by the latter to the widow and her co-heirs.
 Article 1459: The following persons cannot take by purchase, even at a public or judicial action, either in
person or through the mediation of another:

Xxxxxxxxxxxxxxxxxx 5. Justices, judges, members of the department of public prosecution, clerks of superior and
inferior courts, and other officers of such courts, the property and rights in litigation before the court within whose
jurisdiction or territory they perform their respective duties. This prohibition shall include the acquisition of such
property by assignment.

The prohibition contained in this paragraph shall include lawyers and solicitors with respect to any
property or rights involved in any litigation in which they may take part by virtue of their profession and office.

In this case, it does not appear that Atty. Soriano was counsel for the appellant in civil case, which the
appellant instituted against the Municipality of Iloilo for the recovery of the value of a strip of land expropriated by
said municipality for the widening of a certain public street. The only lawyers who appear to have represented her
in the case were Atty. Arroyo and Atty. Evangelista, who filed claim for their professional fees. There was no
relation of attorney and client, then, between Antero Soriano and the appellant, in this case where the judgment
was rendered, and therefore the assignment of her credit, right and interest to Atty. Soriano did not violate
prohibition cited above.

A.C. No. 724 January 31, 1969

FLORENTINO B. DEL ROSARIO, complainant,

vs.
EUGENIO MILLADO, respondent.

RESOLUTION

CONCEPCION, C.J.:

Complainant Florentino B. del Rosario seeks the disbarment of respondent, Attorney Eugenio Millado, upon
the ground that the latter had committed malpractice, in violation of Article 1491 of the Civil Code of the
Philippines and Canon No. 10 of the Canons of Legal Ethics, by acquiring an interest in the land involved in a
litigation in which he had taken part by reason of his profession; that said interest was adverse to that of his client
in the aforementioned litigation; and that he filed therein pleadings containing allegations which were inconsistent
with those made in another pleading subsequently filed by him in the same proceedings, as well as false.

In his answer to these charges, respondent alleged that his interest in said land had been acquired before he
intervened in said proceedings, as counsel for one of the parties therein; that his client therein was aware of his
aforementioned interest; that there is no conflict between the same and that of his client; and that there is neither
a false allegation of facts in the pleadings alluded to in the complaint herein nor any inconsistency between said
pleadings. By way of "counterclaim," respondent alleged, also, that the present charges had been preferred as a
means to offset an action for damages and some criminal charges filed by him against complainant herein.

After due investigation conducted by the office of the Solicitor General, to whom said charges were referred
therefor, the aforementioned officer submitted his report exonerating, in effect, respondent herein.

Indeed, the provisions of the Civil Code and of the Canons of Legal Ethics, prohibit the purchase by lawyers
of any interest in the subject matter of the litigation in which they participated by reason of their profession, and
complainant herein has not established a violation of such injunction. In this connection, respondent introduced
evidence, which is uncontradicted, to the effect that one Eladio Tiburcio, now deceased, claimed title to a tract of
land of about 430 hectares, in Diliman, Quezon City; that parts of said land were the object of two (2) ejectment
cases of the City Court of Quezon City, against La Paz Mesina Vda. de Pascual, one of the heirs of said deceased,
one filed by herein complainant, Florentino B. del Rosario, and the other by Leonor Sta. Clara; that prior to the
institution of said cases, one Conrado Baluyot, who claims to be another heir of Eladio Tiburcio, offered to allow
respondent to construct a house on part of said land of about 430 hectares, in consideration of his professional
services in defense of the claim thereto of the Tiburcios; that Baluyot's understanding with respondent was that,
should he succeed in securing a decision favorable to the Tiburcios, he (respondent) could buy the land on which
his house was built, namely, lots 4 and 5 of Block E-102 of Quezon City, by paying the current value thereof; that
Mrs. Pascual, who occupied another lot in the same block, knew that respondent was in possession of said lots 4
and 5 and had constructed a house thereon, by agreement with Baluyot, as one of the heirs of the deceased; that
Mrs. Pascual, who claimed an interest in the whole Block E-102, asked respondent to be her counsel in said
ejectment cases; that, after filing the answer of Mrs. Pascual, as defendant in said two (2) cases, respondent
ceased to be her counsel therein; and that, although in her aforementioned answer, he alleged that Mrs. Pascual
was the owner and possessor of the lots involved in said cases, there is no real inconsistency between this
allegation and his claim over said lots 4 and 5, much less a misrepresentation of facts, because the issue in the
ejectment cases hinged upon the right of possession whereas the alleged ownership of Mrs. Pascual merely
tended to bolster up her alleged prior possession, and because he could not acquire title to said lots 4 and 5 from
the heirs of the late Eladio Tiburcio, unless they and, hence, Mrs. Pascual, as one of the heirs of the deceased
were the true owners thereof.1awphil.t

Thus, the records show that respondent's alleged interest in said lots was acquired before he intervened as
counsel for Mrs. Pascual in the ejectment cases against her and that said interest is not necessarily inconsistent
with that of his aforementioned client, aside from the fact that he had made no substantial misrepresentation in
the pleadings filed by him in said cases. This fact and the absence of said conflict are made more manifest by the
circumstance that the charges under consideration have been preferred, not by Mrs. Pascual, but by her opponent
in one of the ejectment cases above mentioned.1awphil.t

Finding no merit in the complaint herein, the same is, accordingly, dismissed. It is so ordered.

G.R. No. L-68838 March 11, 1991

FLORENCIO FABILLO and JOSEFA TANA (substituted by their heirs Gregorio Fabillo, Roman Fabillo, Cristeta F.
Maglinte and Antonio Fabillo), petitioners,
vs.
THE HONORABLE INTERMEDIATE APPELLATE COURT (Third Civil Case Division) and ALFREDO MURILLO
(substituted by his heirs Fiamita M. Murillo, Flor M. Agcaoili and Charito M. Babol), respondents.

Francisco A. Tan for petitioners.

Von Kaiser P. Soro for private respondent.

FERNAN, C.J.:

In the instant petition for review on certiorari, petitioners seek the reversal of the appellate court's decision
interpreting in favor of lawyer Alfredo M. Murillo the contract of services entered into between him and his clients,
spouses Florencio Fabillo and Josefa Taa.

In her last will and testament dated August 16, 1957, Justina Fabillo bequeathed to her brother, Florencio, a house
and lot in San Salvador Street, Palo, Leyte which was covered by tax declaration No. 19335, and to her husband,
Gregorio D. Brioso, a piece of land in Pugahanay, Palo, Leyte. 1 After Justina's death, Florencio filed a petition for
the probate of said will. On June 2, 1962, the probate court approved the project of partition "with the reservation
that the ownership of the land declared under Tax Declaration No. 19335 and the house erected thereon be
litigated and determined in a separate proceedings." 2

Two years later, Florencio sought the assistance of lawyer Alfredo M. Murillo in recovering the San Salvador
property. Acquiescing to render his services, Murillo wrote Florencio the following handwritten letter:
Dear Mr. Fabillo:

I have instructed my stenographer to prepare the complaint and file the same on Wednesday if you are ready with
the filing fee and sheriffs fee of not less than P86.00 including transportation expenses.

Considering that Atty. Montilla lost this case and the present action is a revival of a lost case, I trust that you will
gladly give me 40% of the money value of the house and lot as a contigent (sic) fee in case of a success. When I
come back I shall prepare the contract of services for your signature.

Thank you.

Cordially yours,
(Sgd.) Alfredo M. Murillo
Aug. 9, 1964 3

Thirteen days later, Florencio and Murillo entered into the following contract:

CONTRACT OF SERVICES

KNOW ALL MEN BY THESE PRESENTS:

That I, FLORENCIO FABILLO, married to JOSEFA TANA, of legal age, Filipino citizen and with residence and postal
address at Palo, Leyte, was the Petitioner in Special Proceedings No. 843, entitled "In the Matter of the Testate
Estate of the late Justina Fabillo, Florencio Fabillo, Petitioner" of the Court of First Instance of Leyte;

That by reason of the Order of the Court of First Instance of Leyte dated June 2, 1962, my claim for the house and
lot mentioned in paragraph one (1) of the last will and testament of the late Justina Fabillo, was denied altho the
will was probated and allowed by the Court;

That acting upon the counsel of Atty. Alfredo M. Murillo, I have cause(d) the preparation and filing of another case,
entitled "Florencio Fabillo vs. Gregorio D. Brioso," which was docketed as Civil Case No. 3532 of the Court of First
Instance of Leyte;

That I have retained and engaged the services of Atty. ALFREDO M. MURILLO, married and of legal age, with
residence and postal address at Santa Fe, Leyte to be my lawyer not only in Social Proceedings No. 843 but also in
Civil Case No. 3532 under the following terms and conditions;

That he will represent me and my heirs, in case of my demise in the two cases until their successful conclusion or
until the case is settled to my entire satisfaction;

That for and in consideration for his legal services, in the two cases, I hereby promise and bind myself to pay Atty.
ALFREDO M. MURILLO, in case of success in any or both cases the sum equivalent to FORTY PER CENTUM (40%) of
whatever benefit I may derive from such cases to be implemented as follows:

If the house and lot in question is finally awarded to me or a part of the same by virtue of an amicable settlement,
and the same is sold, Atty. Murillo, is hereby constituted as Atty. in-fact to sell and convey the said house and lot
and he shall be given as his compensation for his services as counsel and as attorney-in-fact the sum equivalent to
forty per centum of the purchase price of the house and lot;

If the same house and lot is just mortgage(d) to any person, Atty. Murillo shall be given the sum equivalent to
forty per centum (40%) of the proceeds of the mortgage;

If the house and lot is leased to any person, Atty. Murillo shall be entitled to receive an amount equivalent to 40%
(FORTY PER CENTUM) of the rentals of the house and lot, or a part thereof;
If the house and lot or a portion thereof is just occupied by the undersigned or his heirs, Atty. Murillo shall have the
option of either occupying or leasing to any interested party FORTY PER CENT of the house and lot.

Atty. Alfredo M. Murillo shall also be given as part of his compensation for legal services in the two cases
FORTY PER CENTUM of whatever damages, which the undersigned can collect in either or both cases, provided,
that in case I am awarded attorney's fees, the full amount of attorney's fees shall be given to the said Atty.
ALFREDO M. MURILLO;

That in the event the house and lot is (sic) not sold and the same is maintained by the undersigned or his heirs, the
costs of repairs, maintenance, taxes and insurance premiums shall be for the account of myself or my heirs and
Attorney Murillo, in proportion to our rights and interest thereunder that is forty per cent shall be for the account
of Atty. Murillo and sixty per cent shall be for my account or my heirs.

IN WITNESS HEREOF, I hereby set unto my signature below this 22nd day of August 1964 at Tacloban City.

(Sgd.) FLORENCIO FABILLO

(Sgd.) JOSEFA T. FABILLO

WITH MY CONFORMITY:

(Sgd.) ALFREDO M. MURILLO

(Sgd.) ROMAN T. FABILLO (Sgd.) CRISTETA F. MAGLINTE

(Witness) (Witness) 4

Pursuant to said contract, Murillo filed for Florencio Fabillo Civil Case No. 3532 against Gregorio D. Brioso to
recover the San Salvador property. The case was terminated on October 29, 1964 when the court, upon the
parties' joint motion in the nature of a compromise agreement, declared Florencio Fabillo as the lawful owner not
only of the San Salvador property but also the Pugahanay parcel of land.

Consequently, Murillo proceeded to implement the contract of services between him and Florencio Fabillo by
taking possession and exercising rights of ownership over 40% of said properties. He installed a tenant in the
Pugahanay property.

Sometime in 1966, Florencio Fabillo claimed exclusive right over the two properties and refused to give Murillo his
share of their produce. 5 Inasmuch as his demands for his share of the produce of the Pugahanay property were
unheeded, Murillo filed on March 23, 1970 in the then Court of First Instance of Leyte a complaint captioned
"ownership of a parcel of land, damages and appointment of a receiver" against Florencio Fabillo, his wife Josefa
Taa, and their children Ramon (sic) Fabillo and Cristeta F. Maglinte. 6

Murillo prayed that he be declared the lawful owner of forty per cent of the two properties; that defendants be
directed to pay him jointly and severally P900.00 per annum from 1966 until he would be given his share of the
produce of the land plus P5,000 as consequential damages and P1,000 as attorney's fees, and that defendants be
ordered to pay moral and exemplary damages in such amounts as the court might deem just and reasonable.

In their answer, the defendants stated that the consent to the contract of services of the Fabillo spouses was
vitiated by old age and ailment; that Murillo misled them into believing that Special Proceedings No. 843 on the
probate of Justina's will was already terminated when actually it was still pending resolution; and that the
contingent fee of 40% of the value of the San Salvador property was excessive, unfair and unconscionable
considering the nature of the case, the length of time spent for it, the efforts exerted by Murillo, and his
professional standing.

They prayed that the contract of services be declared null and void; that Murillo's fee be fixed at 10% of the
assessed value of P7,780 of the San Salvador property; that Murillo be ordered to account for the P1,000 rental of
the San Salvador property which he withdrew from the court and for the produce of the Pugahanay property from
1965 to 1966; that Murillo be ordered to vacate the portion of the San Salvador property which he had occupied;
that the Pugahanay property which was not the subject of either Special Proceedings No. 843 or Civil Case No.
3532 be declared as the exclusive property of Florencio Fabillo, and that Murillo be ordered to pay moral damages
and the total amount of P1,000 representing expenses of litigation and attorney's fees.

In its decision of December 2, 1975, 7 the lower court ruled that there was insufficient evidence to prove that the
Fabillo spouses' consent to the contract was vitiated. It noted that the contract was witnessed by two of their
children who appeared to be highly educated. The spouses themselves were old but literate and physically fit.

In claiming jurisdiction over the case, the lower court ruled that the complaint being one "to recover real property
from the defendant spouses and their heirs or to enforce a lien thereon," the case could be decided independent
of the probate proceedings. Ruling that the contract of services did not violate Article 1491 of the Civil Code as said
contract stipulated a contingent fee, the court upheld Murillo's claim for "contingent attorney's fees of 40% of the
value of recoverable properties." However, the court declared Murillo to be the lawful owner of 40% of both the
San Salvador and Pugahanay properties and the improvements thereon. It directed the defendants to pay jointly
and severally to Murillo the amount of P1,200 representing 40% of the net produce of the Pugahanay property
from 1967 to 1973; entitled Murillo to 40% of the 1974 and 1975 income of the Pugahanay property which was on
deposit with a bank, and ordered defendants to pay the costs of the suit.

Both parties filed motions for the reconsideration of said decision: Fabillo, insofar as the lower court awarded 40%
of the properties to Murillo and the latter insofar as it granted only P1,200 for the produce of the properties from
1967 to 1973. On January 29, 1976, the lower court resolved the motions and modified its decision thus:

ACCORDINGLY, the judgment heretofore rendered is modified to read as follows:

(a) Declaring the plaintiff as entitled to and the true and lawful owner of forty percent (40%) of the parcels of land
and improvements thereon covered by Tax Declaration Nos. 19335 and 6229 described in Paragraph 5 of the
complaint;

(b) Directing all the defendants to pay jointly and severally to the plaintiff the sum of Two Thousand Four Hundred
Fifty Pesos (P2,450.00) representing 40% of the net produce of the Pugahanay property from 1967 to 1973;

(c) Declaring the plaintiff entitled to 40% of the 1974 and 1975 income of said riceland now on deposit with the
Prudential Bank, Tacloban City, deposited by Mr. Pedro Elona, designated receiver of the property;

(d) Ordering the defendants to pay the plaintiff the sum of Three Hundred Pesos (P 300.00) as attorney's fees; and

(e) Ordering the defendants to pay the costs of this suit.

SO ORDERED.

In view of the death of both Florencio and Justina Fabillo during the pendency of the case in the lower court, their
children, who substituted them as parties to the case, appealed the decision of the lower court to the then
Intermediate Appellate Court. On March 27, 1984, said appellate court affirmed in toto the decision of the lower
court. 8

The instant petition for review on certiorari which was interposed by the Fabillo children, was filed shortly after
Murillo himself died. His heirs likewise substituted him in this case. The Fabillos herein question the appellate
court's interpretation of the contract of services and contend that it is in violation of Article 1491 of the Civil Code.

The contract of services did not violate said provision of law. Article 1491 of the Civil Code, specifically paragraph 5
thereof, prohibits lawyers from acquiring by purchase even at a public or judicial auction, properties and rights
which are the objects of litigation in which they may take part by virtue of their profession. The said prohibition,
however, applies only if the sale or assignment of the property takes place during the pendency of the litigation
involving the client's property. 9

Hence, a contract between a lawyer and his client stipulating a contingent fee is not covered by said prohibition
under Article 1491 (5) of the Civil Code because the payment of said fee is not made during the pendency of the
litigation but only after judgment has been rendered in the case handled by the lawyer. In fact, under the 1988
Code of Professional Responsibility, a lawyer may have a lien over funds and property of his client and may apply
so much thereof as may be necessary to satisfy his lawful fees and disbursements. 10

As long as the lawyer does not exert undue influence on his client, that no fraud is committed or imposition
applied, or that the compensation is clearly not excessive as to amount to extortion, a contract for contingent fee
is valid and enforceable. 11 Moreover, contingent fees were impliedly sanctioned by No. 13 of the Canons of
Professional Ethics which governed lawyer-client relationships when the contract of services was entered into
between the Fabillo spouses and Murillo. 12

However, we disagree with the courts below that the contingent fee stipulated between the Fabillo spouses and
Murillo is forty percent of the properties subject of the litigation for which Murillo appeared for the Fabillos. A
careful scrutiny of the contract shows that the parties intended forty percent of the value of the properties as
Murillo's contingent fee. This is borne out by the stipulation that "in case of success of any or both cases," Murillo
shall be paid "the sum equivalent to forty per centum of whatever benefit" Fabillo would derive from favorable
judgments. The same stipulation was earlier embodied by Murillo in his letter of August 9, 1964 aforequoted.

Worth noting are the provisions of the contract which clearly states that in case the properties are sold,
mortgaged, or leased, Murillo shall be entitled respectively to 40% of the "purchase price," "proceeds of the
mortgage," or "rentals." The contract is vague, however, with respect to a situation wherein the properties are
neither sold, mortgaged or leased because Murillo is allowed "to have the option of occupying or leasing to any
interested party forty per cent of the house and lot." Had the parties intended that Murillo should become the
lawful owner of 40% of the properties, it would have been clearly and unequivocally stipulated in the contract
considering that the Fabillos would part with actual portions of their properties and cede the same to Murillo.

The ambiguity of said provision, however, should be resolved against Murillo as it was he himself who drafted the
contract. 13 This is in consonance with the rule of interpretation that, in construing a contract of professional
services between a lawyer and his client, such construction as would be more favorable to the client should be
adopted even if it would work prejudice to the lawyer. 14 Rightly so because of the inequality in situation between
an attorney who knows the technicalities of the law on the one hand and a client who usually is ignorant of the
vagaries of the law on the other hand. 15

Considering the nature of the case, the value of the properties subject matter thereof, the length of time and
effort exerted on it by Murillo, we hold that Murillo is entitled to the amount of Three Thousand Pesos (P3,000.00)
as reasonable attorney's fees for services rendered in the case which ended on a compromise agreement. In so
ruling, we uphold "the time-honored legal maxim that a lawyer shall at all times uphold the integrity and dignity of
the legal profession so that his basic ideal becomes one of rendering service and securing justice, not money-
making. For the worst scenario that can ever happen to a client is to lose the litigated property to his lawyer in
whom all trust and confidence were bestowed at the very inception of the legal controversy." 16

WHEREFORE, the decision of the then Intermediate Appellate Court is hereby reversed and set aside and a new
one entered (a) ordering the petitioners to pay Atty. Alfredo M. Murillo or his heirs the amount of P3,000.00 as his
contingent fee with legal interest from October 29, 1964 when Civil Case No. 3532 was terminated until the
amount is fully paid less any and all amounts which Murillo might have received out of the produce or rentals of
the Pugahanay and San Salvador properties, and (b) ordering the receiver of said properties to render a complete
report and accounting of his receivership to the court below within fifteen (15) days from the finality of this
decision. Costs against the private respondent.