MERCEDES CALIMLIM- CANULLAS, petitioner, vs. HON. WILLELMO FORTUN, Judge, Court of First instance of Pangasinan, Branch I, and CORAZON DAGUINES, respondents FACTS: Petitioner MERCEDES Calimlim-Canullas and FERNANDO Canullas were married on December 19, 1962. They begot five children. They lived in a small house on the residential land in question with an area of approximately 891 square meters, located at Bacabac, Bugallon, Pangasinan. After FERNANDO's father died in 1965, FERNANDO inherited the land. In 1978, FERNANDO abandoned his family and was living with private respondent Corazon DAGUINES. During the pendency of this appeal, they were convicted of concubinage in a judgment rendered on October 27, 1981 by the then Court of First Instance of Pangasinan, Branch II, which judgment has become final. On April 15, 1980, FERNANDO sold the subject property with the house thereon to DAGUINES for the sum of P2,000.00. In the document of sale, FERNANDO described the house as "also inherited by me from my deceased parents." Unable to take possession of the lot and house, DAGUINES initiated a complaint on June 19, 1980 for quieting of title and damages against MERCEDES. The latter resisted and claimed that the house in dispute where she and her children were residing, including the coconut trees on the land, were built and planted with conjugal funds and through her industry; that the sale of the land together with the house and improvements to DAGUINES was null and void because they are conjugal properties and she had not given her consent to the sale, In its original judgment, respondent Court principally declared DAGUINES "as the lawful owner of the land in question as well as the one- half () of the house erected on said land." Upon reconsideration prayed for by MERCEDES, however, respondent Court resolved by (1) Declaring plaintiff as the true and lawful owner of the land in question and the 10 coconut trees; (2) Declaring as null and void the sale of the conjugal house to plaintiff on April 15, 1980. ISSUES: Whether or not the sale of the lot together with the house and improvements thereon was valid under the circumstances surrounding the transaction? RULING: We find that the contract of sale was null and void for being contrary to morals and public policy. The sale was made by a husband in favor of a concubine after he had abandoned his family and left the conjugal home where his wife and children lived and from whence they derived their support. That sale was subversive of the stability of the family, a basic social institution which public policy cherishes and protects. Article 1409 of the Civil Code states inter alia that: contracts whose cause, object, or purpose is contrary to law, morals, good customs, public order, or public policy are void and inexistent from the very beginning. Article 1352 also provides that: "Contracts without cause, or with unlawful cause, produce no effect whatsoever.The cause is unlawful if it is contrary to law, morals, good customs, public order, or public policy." Additionally, the law emphatically prohibits the spouses from selling property to each other subject to certain exceptions. 6 Similarly, donations between spouses during marriage are prohibited. 7 And this is so because if transfers or con conveyances between spouses were allowed during marriage, that would destroy the system of conjugal partnership, a basic policy in civil law. It was also designed to prevent the exercise of undue influence by one spouse over the other, 8 as well as to protect the institution of marriage, which is the cornerstone of family law. The prohibitions apply to a couple living as husband and wife without benefit of marriage, otherwise, "the condition of those who incurred guilt would turn out to be better than those in legal union." WHEREFORE, the Decision of respondent Judge, dated October 6, 1980, and his Resolution of November 27, 1980 on petitioner's Motion for Reconsideration, are hereby set aside and the sale of the lot, house and improvements in question, is hereby declared null and void. No costs. G.R. No. 81552 May 28, 1990 DIONISIO FIESTAN and JUANITA ARCONADO, petitioners vs. COURT OF APPEALS; DEVELOPMENT BANK OF THE PHILIPPINES, LAOAG CITY BRANCH; PHILIPPINE NATIONAL BANK, VIGAN BRANCH, ILOCOS SUR, FRANCISCO PERIA and REGISTER OF DEEDS OF ILOCOS SUR, respondents. FACTS: In this petition for review on certiorari, petitioners spouses Dionisio Fiestan and Juanita Arconada owners of a parcel of land (Lot No. 2B) situated in Ilocos Sur which they mortgaged to the Development Bank of the Philippines (DBP) as security for their P22,400.00 loan, seek the reversal of the decision of the Court of Appeals.
Records show that Lot No. 2-B was acquired by the DBP as the highest bidder at a public auction sale on August 6, 1979 after it was extrajudicially foreclosed by the DBP in accordance with Act No. 3135, as amended by Act No. 4118, for failure of petitioners to pay their mortgage indebtedness. A certificate of sale was subsequently issued by the Provincial Sheriff of Ilocos Sur on the same day and the same was registered on September 28, 1979 in the Office of the Register of Deeds of Ilocos Sur. Earlier, or on September 26, 1979, petitioners executed a Deed of Sale in favor of DBP which was likewise registered on September 28, 1979. Upon failure of petitioners to redeem the property within the one (1) year period which expired on September 28, 1980, petitioners' TCT T-13218 over Lot No. 2-B was cancelled by the Register of Deeds and in lieu thereof TCT T- 19077 was issued to the DBP upon presentation of a duly executed affidavit of consolidation of ownership. On April 13,1982, the DBP sold the lot to Francisco Peria in a Deed of Absolute Sale and the same was registered on April 15, 1982 in the Office of the Register of Deeds of Ilocos Sur. Subsequently, the DBP's title over the lot was cancelled and in lieu thereof TCT T-19229 was issued to Francisco Peria. After title over said lot was issued in his name, Francisco Peria secured a tax declaration for said lot and accordingly paid the taxes due thereon. He thereafter mortgaged said lot to the PNB Vigan Branch as security for his loan of P115,000.00 as required by the bank to increase his original loan from P49,000.00 to P66,000.00 until it finally reached the approved amount of P115,000.00. Since petitioners were still in possession of Lot No. 2-B, the Provincial Sheriff ordered them to vacate the premises. On the other hand, petitioners filed on August 23, 1982 a complaint for annulment of sale, mortgage and cancellation of transfer certificates of title against the DBP-Laoag City, PNB Vigan Branch, Ilocos Sur, Francisco Peria and the Register of Deeds of Ilocos Sur, docketed as Civil Case No. 3447-V before the Regional Trial Court of Vigan, Ilocos Sur. After trial, the RTC of Vigan, Ilocos Sur, Branch 20, rendered its decision 2 on November 14, 1983 dismissing the complaint, declaring therein, as valid the extrajudicial foreclosure sale of the mortgaged property in favor of the DBP as highest bidder in the public auction sale held on August 6, 1979, and its subsequent sale by DBP to Francisco Peria as well as the real estate mortgage constituted thereon in favor of PNB Vigan as security for the P115,000.00 loan of Francisco Peria. The Court of Appeals affirmed the decision of the RTC of Vigan, Ilocos Sur on June 20, 1987. The motion for reconsideration having been denied 3 on January 19, 1988, petitioners filed the instant petition for review on certiorari with this Court. Petitioners seek to annul the extrajudicial foreclosure sale of the mortgaged property on August 6, 1979 in favor of the Development Bank of the Philippines (DBP) on the ground that it was conducted by the Provincial Sheriff of Ilocos Sur without first effecting a levy on said property before selling the same at the public auction sale. Petitioners thus maintained that the extrajudicial foreclosure sale being null and void by virtue of lack of a valid levy, the certificate of sale issued by the Provincial Sheriff cannot transfer ownership over the lot in question to the DBP and consequently the deed of sale executed by the DBP in favor of Francisco Peria and the real estate mortgage constituted thereon by the latter in favor of PNB Vigan Branch are likewise null and void. ISSUE: Whether or not DBP can acquire by purchase the mortgaged property at the public auction sale by virtue of par. (2) of Article 1491 and par. (7) of Article 1409 of the Civil Code? RULING: No, the nullity of the extrajudicial foreclosure sale in the instant case is further sought by petitioners on the ground that the DBP cannot acquire by purchase the mortgaged property at the public auction sale by virtue of par. (2) of Article 1491 and par. (7) of Article 1409 of the Civil Code which prohibits agents from acquiring by purchase, even at a public or judicial auction either in person or through the mediation of another, the property whose administration or sale may have been entrusted to them unless the consent of the principal has been given. The prohibition mandated by par. (2) of Article 1491 in relation to Article 1409 of the Civil Code does not apply in the instant case where the sale of the property in dispute was made under a special power inserted in or attached to the real estate mortgage pursuant to Act No. 3135, as amended. It is a familiar rule of statutory construction that, as between a specific statute and general statute, the former must prevail since it evinces the legislative intent more clearly than a general statute does. 7 The Civil Code (R.A. 386) is of general character while Act No. 3135, as amended, is a special enactment and therefore the latter must prevail. Under Act No. 3135, as amended, a mortgagee- creditor is allowed to participate in the bidding and purchase under the same conditions as any other bidder, as in the case at bar, thus: Section 5. At any sale, the creditor, trustee, or other person authorized to act for the creditor, may participate in the bidding and purchase under the same conditions as any other bidder, unless the contrary has been expressly provided in the mortgage or trust deed under which the sale is made. In other words, Section 5 of Act No. 3135, as amended, creates and is designed to create an exception to the general rule that a mortgagee or trustee in a mortgage or deed of trust which contains a power of sale on default may not become the purchaser, either directly or through the agency of a third person, at a sale which he himself makes under the power. Under such an exception, the title of the mortgagee-creditor over the property cannot be impeached or defeated on the ground that the mortgagee cannot be a purchaser at his own sale. Needless to state, the power to foreclose is not an ordinary agency that contemplates exclusively the representation of the principal by the agent but is primarily an authority conferred upon the mortgagee for the latter's own protection. It is an ancillary stipulation supported by the same cause or consideration for the mortgage and forms an essential and inseparable part of that bilateral agreement. 9 Even in the absence of statutory provision, there is authority to hold that a mortgagee may purchase at a sale under his mortgage to protect his own interest or to avoid a loss to himself by a sale to a third person at a price below the mortgage debt. 10 The express mandate of Section 5 of Act No. 3135, as amended, amply protects the interest of the mortgagee in this jurisdiction. WHEREFORE, in view of the foregoing, the petition is DENIED for lack of merit and the decision of the Court of Appeals dated June 20, 1987 is hereby AFFIRMED. No cost. SO ORDERED. [A.C. No. 6210. December 9, 2004] FEDERICO N. RAMOS, complainant, vs. ATTY. PATRICIO A. NGASEO, respondent. This is a complaint for suspension of respondent Atty. Patricio A. Ngaseo for violation of the Code of Professional Responsibility and Article 1491 of the Civil Code by demanding from his client, complainant Federico N. Ramos, the delivery of 1,000 square meters of land, a litigated property, as payment for his appearance fees. FACTS: Sometime in 1998, complainant Federico Ramos went to respondent Atty. Patricio Ngaseos Makati office to engage his services as counsel in a case [1] involving a piece of land in San Carlos, Pangasinan. Respondent agreed to handle the case for an acceptance fee of P20,000.00, appearance fee of P1,000.00 per hearing and the cost of meals, transportation and other incidental expenses. Complainant alleges that he did not promise to pay the respondent 1,000 sq. m. of land as appearance fees. [2]
On September 16, 1999, complainant went to the respondents office to inquire about the status of the case. Respondent informed him that the decision was adverse to them because a congressman exerted pressure upon the trial judge. Respondent however assured him that they could still appeal the adverse judgment and asked for the additional amount of P3,850.00 and another P2,000.00 on September 26, 2000 as allowance for research made. [3]
Although an appeal was filed, complainant however charges the respondent of purposely failing to submit a copy of the summons and copy of the assailed decision. Subsequently, complainant learned that the respondent filed the notice of appeal 3 days after the lapse of the reglementary period. On January 29, 2003, complainant received a demand-letter from the respondent asking for the delivery of the 1,000 sq. m. piece of land which he allegedly promised as payment for respondents appearance fee. In the same letter, respondent also threatened to file a case in court if the complainant would not confer with him and settle the matter within 30 days. Respondent alleged that sometime in the late 1997, a former client, Federico Ramos and his brother, Dionisio, went to his Makati office to engage his professional services in connection with a 2-hectare parcel of land situated in San Carlos, Pangasinan which the complainants family lost 7 years earlier through an execution sale in favor of one Alfredo T. Castro. Complainant, who was deaf and could only speak conversational Tagalog haltingly, was assisted by his brother Dionisio. They came all the way from Pangasinan because no lawyer in San Carlos City was willing to handle the case. Complainant, through Dionisio, avers that he has consulted 2 local lawyers but did not engage their services because they were demanding exorbitant fees. One local lawyer was willing to handle the case for at least one-half of the land involved as his attorneys fee, plus cash expenses, while the other asked for of the land in addition to a large sum of money. Respondent agreed to handle the case for an acceptance fee of P60,000.00 plus an appearance fee of P3,000.00 per hearing. Complainant told him that he would consult his siblings on the matter. Six months later, i.e., in April 1998, complainant, assisted by one Jose Castillo, went to respondents office to discuss the legal fees. Complainant, through Castillo, told respondent that he was willing to pay an acceptance fee of P40,000.00, P20,000.00 of which shall be paid upon engagement and the remaining P20,000.00 to be paid after their treasure hunt operations in Nueva Viscaya were terminated. Further, complainant offered, in lieu of P3,000.00 per appearance, 1,000 sq. m. of land from the land subject matter of the case, if they win, or from another piece of property, if they lose. In addition, complainant also offered to defray the expenses for transportation, meals and other incidental expenses. Respondent accepted the complainants offer. Respondent claims that after the trial court dismissed Civil Case No. SCC 2128, he filed a timely notice of appeal and thereafter moved to be discharged as counsel because he had colon cancer. Complainant, now assisted by one Johnny Ramos, implored respondent to continue handling the case, with an offer to double the 1,000 sq. m. piece of land earlier promised and the remaining balance of P20,000.00 acceptance fee. Johnny Ramos made a written commitment and gave respondents secretary P2,000.00 of the P3,850.00 expenses for the preparation of the appellants brief. On July 18, 2001, the Court of Appeals rendered a favorable decision ordering the return of the disputed 2-hectare land to the complainant and his siblings. The said decision became final and executory on January 18, 2002. Since then complainant allegedly failed to contact respondent, which compelled him to send a demand letter on January 29, 2003. On February 14, 2003, complainant filed a complaint before the IBP charging his former counsel, respondent Atty. Ngaseo, of violation of the Code of Professional Responsibility for demanding the delivery of 1,000 sq. m. parcel of land which was the subject of litigation. In a report dated July 18, 2003, IBP Commissioner Rebecca Villanueva-Maala found the respondent guilty of grave misconduct and conduct unbecoming of a lawyer in violation of the Code of Professional Responsibility and recommended that he be suspended from the practice of law for 1 year. [4]
On August 30, 2003, the IBP Board of Governors passed Resolution No. XVI-2003-47 the full text of which reads: [5]
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this Resolution/Decision as Annex A; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, with modification, and considering that respondent have violated the Code of Professional Responsibility for grave misconduct and conduct unbecoming of a lawyer Atty. Patricio A. Ngaseo is hereby SUSPENDED from the practice of law for six (6) months. On December 11, 2003, respondent filed a petition for review assailing IBP Resolution No. XVI-2003-47 for having been issued without or in excess of jurisdiction. [6]
Respondent argues that he did not violate Article 1491 of the Civil Code because when he demanded the delivery of the 1,000 sq. m. of land which was offered and promised to him in lieu of the appearance fees, the case has been terminated, when the appellate court ordered the return of the 2-hectare parcel of land to the family of the complainant. Respondent further contends that he can collect the unpaid appearance fee even without a written contract on the basis of the principle of quantum meruit. He claims that his acceptance and appearance fees are reasonable because a Makati based legal practitioner, would not handle a case for an acceptance fee of only P20,000.00 and P1,000.00 per court appearance. Under Article 1491(5) of the Civil Code, lawyers are prohibited from acquiring either by purchase or assignment the property or rights involved which are the object of the litigation in which they intervene by virtue of their profession. [7] The prohibition on purchase is all embracing to include not only sales to private individuals but also public or judicial sales. The rationale advanced for the prohibition is that public policy disallows the transactions in view of the fiduciary relationship involved, i.e., the relation of trust and confidence and the peculiar control exercised by these persons. [8] It is founded on public policy because, by virtue of his office, an attorney may easily take advantage of the credulity and ignorance of his client and unduly enrich himself at the expense of his client. [9] However, the said prohibition applies only if the sale or assignment of the property takes place during the pendency of the litigation involving the clients property. Consequently, where the property is acquired after the termination of the case, no violation of paragraph 5, Article 1491 of the Civil Code attaches. Invariably, in all cases where Article 1491 was violated, the illegal transaction was consummated with the actual transfer of the litigated property either by purchase or assignment in favor of the prohibited individual. In Biascan v. Lopez, respondent was found guilty of serious misconduct and suspended for 6 months from the practice of law when he registered a deed of assignment in his favor and caused the transfer of title over the part of the estate despite pendency of Special Proceedings No. 98037 involving the subject property. [10] In the consolidated administrative cases of Valencia v. Cabanting, [11] the Court suspended respondent Atty. Arsenio Fer Cabanting for six (6) months from the practice of law when he purchased his client's property which was still the subject of a pending certiorari proceeding. In the instant case, there was no actual acquisition of the property in litigation since the respondent only made a written demand for its delivery which the complainant refused to comply. Mere demand for delivery of the litigated property does not cause the transfer of ownership, hence, not a prohibited transaction within the contemplation of Article 1491. Even assuming arguendo that such demand for delivery is unethical, respondents act does not fall within the purview of Article 1491. The letter of demand dated January 29, 2003 was made long after the judgment in Civil Case No. SCC- 2128 became final and executory on January 18, 2002. We note that the report of the IBP Commissioner, as adopted by the IBP Board of Governors in its Resolution No. XVI-2003-47, does not clearly specify which acts of the respondent constitute gross misconduct or what provisions of the Code of Professional Responsibility have been violated. We find the recommended penalty of suspension for 6 months too harsh and not proportionate to the offense committed by the respondent. The power to disbar or suspend must be exercised with great caution. Only in a clear case of misconduct that seriously affects the standing and character of the lawyer as an officer of the Court and member of the bar will disbarment or suspension be imposed as a penalty. [12] All considered, a reprimand is deemed sufficient and reasonable. WHEREFORE, in view of the foregoing, respondent Atty. Patricio A. Ngaseo is found guilty of conduct unbecoming a member of the legal profession in violation of Rule 20.04 of Canon 20 of the Code of Professional Responsibility. He is REPRIMANDED with a warning that repetition of the same act will be dealt with more severely.SO ORDERED. [G.R. No. 154645. July 13, 2004] MILAGROS JOAQUINO a.k.a. MILAGROS J. REYES, petitioner, vs. LOURDES REYES, MERCEDES, MANUEL, MIRIAM and RODOLFO JR. -- all surnamed REYES, respondents. FACTS: [Respondents] filed a Complaint for reconveyance and damages, dated January 23, 1982, before the Court of First Instance of Rizal, containing the following allegations: The complaint alleges that [respondent] Lourdes P. Reyes is the widow of Rodolfo A. Reyes who died on September 12, 1981; that [respondents] Mercedes, Manuel, Miriam and Rodolfo, Jr. are the legitimate children of [respondent] Lourdes P. Reyes and the deceased Rodolfo A. Reyes; that for years before his death, Rodolfo A. Reyes had illicit relations with [petitioner] Milagros B. Joaquino; that before his death, x x x Rodolfo A. Reyes was Vice President and Comptroller of Warner Barnes and Company with an income of P15,000.00 a month and, after retirement on September 30, 1980, received from said company benefits and emoluments in the amount of P315,0[1]1.79; that [respondent] wife was not the recipient of any portion of the said amount. The complaint further alleges that on July 12, 1979, a [D]eed of [S]ale of a property consisting of a house and lot at BF Homes, Paraaque, Metro Manila was executed by the spouses Ramiro Golez and Corazon Golez in favor of [petitioner] Milagros B. Joaquino for which Transfer Certificate of Title No. 90293 of the Register of Deeds of Metro Manila, District IV was issued in the name of [petitioner] Milagros B. Joaquino; that the funds used to purchase this property were conjugal funds and earnings of the deceased Rodolfo A. Reyes as executive of Warner Barnes and Company as [petitioner] Joaquino was without the means to pay for the same; that [petitioner] executed a Special Power of Attorney in favor of Rodolfo A. Reyes to mortgage the property to Commonwealth Insurance Corporation in order to pay the balance of the purchase price; that said Rodolfo A. Reyes executed a mortgage in favor of Commonwealth Insurance Corporation for P140,000.00 and to guaranty payment thereof, he secured a life insurance [policy] with Philam Life Insurance Corporation for the said amount, assigning the proceeds thereof to Commonwealth Insurance Corporation; that the monthly amortizations of the mortgage were paid by said Rodolfo A. Reyes before his death and at the time of his death, the outstanding balance of P110,000.00 was to be paid out of his Philam Life Insurance [p]olicy. The complaint finally alleges that the deceased had two cars in [petitioners] possession and that the real and personal properties in [petitioners] possession are conjugal partnership propert[ies] of the spouses Lourdes P. Reyes and Rodolfo A. Reyes and one-half belongs exclusively to [respondent] Lourdes P. Reyes and the other half to the estate of Rodolfo A. Reyes to be apportioned among the [other respondents] as his forced heirs. [Respondents] therefore, pray that the property covered by T.C.T. No. 90293 be declared conjugal property of the spouses Lourdes P. Reyes and Rodolfo A. Reyes and that [petitioner] be ordered to reconvey the property in [respondents] favor; that the two cars in [petitioners] possession be delivered to [respondents] and that [petitioner] be made to pay actual, compensatory and moral damages to [respondents] as well as attorneys fees. [Petitioner] eventually filed her Answer, dated August 1, 1982, the allegations of which have been summarized by the trial court in the following manner: In her Answer, [petitioner] Milagros B. Joaquino alleges that she purchased the real property in question with her own exclusive funds and it was only for convenience that the late Rodolfo Reyes facilitated the mortgage over the same; that although the late Rodolfo Reyes paid the monthly amortization of the mortgage as attorney-in-fact of [petitioner], the money came exclusively from [her]. [Petitioner] further alleges in her answer, by way of special and affirmative defenses, that during all the nineteen (19) years that [she] lived with Rodolfo Reyes from 1962 continuously up to September 12, 1981 when the latter died, [petitioner] never had knowledge whatsoever that he was married to someone else, much less to [respondent] Lourdes P. Reyes; that [petitioner] was never the beneficiary of the emoluments or other pecuniary benefits of the late Rodolfo Reyes during his lifetime or after his death because [she] had the financial capacity to support herself and her children begotten with the late Rodolfo Reyes. [Petitioner] prays for a judgment dismissing [respondents] complaint and for the latter to pay unto [petitioner] moral and exemplary damages in such amounts as may be determined during the trial, including atto[r]neys fees and the costs of the suit. On February 2, 1993, [respondent] Lourdes Reyes died. Subsequently, the trial court granted the complaint based on the following factual findings: Lourdes Reyes was legally married to Rodolfo Reyes on January 3, 1947 in Manila. They have four children, namely: Mercedes, Manuel, Miriam and Rodolfo Jr., all surnamed Reyes and co-[respondents] in this case. Rodolfo Reyes died on September 12, 1981. At the time of his death, Rodolfo Reyes was living with his common-law wife, Milagros Joaquino, x x x with whom she begot three (3) children namely: Jose Romillo, Imelda May and Charina, all surnamed Reyes. During his lifetime, Rodolfo Reyes worked with Marsman and Company and later transferred to Warner Barnes & Co., where he assumed the position of Vice-President [Comptroller] until he retired onSeptember 30, 1980. His monthly salary at Warner Barnes & Co. was P15,000.00 x x x and upon his separation or retirement from said company, Rodolfo Reyes received a lump sum of P315,011.79 in full payment and settlement of his separation and retirement benefits. During the common-law relationship of Rodolfo Reyes and [petitioner] Milagros Joaquino and while living together, they decided to buy the house and lot situated at No. 12 Baghdad Street, Phase 3, BF Homes, Paraaque, Metro Manila. A Deed of Absolute Sale dated July 12, 1979 was executed in favor of [petitioner] Milagros Joaquino and Transfer Certificate of Title No. S-90293 covering the said property was issued in the name of [petitioner only] on July 20, 1979. To secure the finances with which to pay the purchase price of the property in the amount of P140,000.00, [petitioner] executed on July 20, 1979, a Special Power of Attorney in favor of Rodolfo A. Reyes for the latter, as attorney-in- fact, to secure a loan from the Commonwealth Insurance Company. An application for mortgage loan was filed by Rodolfo Reyes with the Commonwealth Insurance Company and a Real Estate Mortgage Contract was executed as collateral to the mortgage loan. The loan was payable in ten (10) years with a monthly amortization of P1,166.67. The monthly amortizations were paid by Rodolfo Reyes and after his death, the balance of P109,797.64 was paid in full to the Commonwealth Insurance by the Philam Life Insurance Co. as insurer of the deceased Rodolfo A. Reyes. [5]
On appeal to the CA, petitioner questioned the following findings of the trial court: 1) that the house and lot had been paid in full from the proceeds of the loan that Rodolfo Reyes obtained from the Commonwealth Insurance Company; 2) that his salaries and earnings, which were his and Lourdes conjugal funds, paid for the loan and, hence, the disputed property was conjugal; and 3) that petitioners illegitimate children, not having been recognized or acknowledged by him in any of the ways provided by law, acquired no successional rights to his estate. Ruling of the Court of Appeals Affirming the RTC, the CA held that the property had been paid out of the conjugal funds of Rodolfo and Lourdes because the monthly amortizations for the loan, as well as the premiums for the life insurance policy that paid for the balance thereof, came from his salaries and earnings. Like the trial court, it found no sufficient proof that petitioner was financially capable of buying the disputed property, or that she had actually contributed her own exclusive funds to pay for it. Hence, it ordered her to surrender possession of the property to the respective estates of the spouses. The appellate court, however, held that the trial court should not have resolved the issue of the filiation and the successional rights of petitioners children. Such issues, it said, were not properly cognizable in an ordinary civil action for reconveyance and damages and were better ventilated in a probate or special proceeding instituted for the purpose. Hence, this Petition. [6]
ISSUE: What is the nature of the house and lot on Baghdad Street (BF Homes Paraaque, Metro Manila) RULING: The Petition is devoid of merit. Under the circumstances, therefore, the purchase and the subsequent registration of the realty in petitioners name was tantamount to a donation by Rodolfo to Milagros. By express provision of Article 739(1) of the Civil Code, such donation was void, because it was made between persons who were guilty of adultery or concubinage at the time of the donation. The prohibition against donations between spouses [35] must likewise apply to donations between persons living together in illicit relations; otherwise, the latter would be better situated than the former. [36] Article 87 of the Family Code now expressly provides thus: Art. 87. Every donation or grant of gratuitous advantage, direct or indirect, between the spouses during the marriage shall be void, except moderate gifts which the spouses may give each other on the occasion of any family rejoicing. The prohibition shall also apply to persons living together as husband and wife without a valid marriage. (Italics supplied) Regarding the registration of the property in petitioners name, it is enough to stress that a certificate of title under the Torrens system aims to protect dominion; it cannot be used as an instrument for the deprivation of ownership. [37] It has been held that property is conjugal if acquired in a common-law relationship during the subsistence of a preexisting legal marriage, even if it is titled in the name of the common-law wife. [38] In this case, a constructive trust is deemed created under Article 1456 of the Civil Code, which we quote: Art. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. The registration of the property in petitioners name was clearly designed to deprive Rodolfos legal spouse and compulsory heirs of ownership. By operation of law, petitioner is deemed to hold the property in trust for them. Therefore, she cannot rely on the registration in repudiation of the trust, for this case is a well-known exception to the principle of conclusiveness of a certificate of title. [39]
G.R. No. 108515 October 16, 1995 LUIS BALANTAKBO, AMADEO BALANTAKBO and HEIRS OF SANCHO BALANTAKBO, petitioners, vs. COURT OF APPEALS and LAGUNA AGRO- INDUSTRIAL, COCONUT COOPERATIVE, INC., respondents. FACTS: Private respondent Laguna Agro-Industrial Coconut Cooperative, Inc. (hereafter simply LAGUNA), a family corporation organized by the heirs of the deceased spouses Honorio Sumaya and Crispina Orlanda, was the plaintiff in an action to quiet title over a parcel of unregistered coconut land in Bo. Dita. Liliw, Laguna, filed in the Regional Trial Court, Br. XXVII, Laguna against herein private respondents and docketed as Civil Case No. SC-1367 The complaint in said action alleged basically that the land in question had been purchased by the Sumaya spouses (LAGUNA's predecessors) for P800.00 from Consuelo Vda. de Balantakbo (mother of petitioner Luis Balantakbo and Sancho Balantakbo), the sale being evidenced by a deed 1 executed by Consuelo on December 13, 1955; and that some twenty (20) years later, or on March 8, 1975, the seller's heirs, intruded into the land and harvested the coconuts found therein. In their answer the Balantakbos denied knowledge of the sale and alleged that the land claimed sued for was different from that owned and held by them. The Regional Trial Court rendered judgment (per Judge Francisco C. Manabat, Branch 27, Sta. Cruz, Laguna) in favor of the Balantakbos, dismissing LAGUNA's complaint, upholding the former's theory of the case and ruling that what was contemplated in the descriptive words "more or less" immediately following the stated area of 2,000 square meters in the description of the land was construable as referring only to a "slight difference" in said area, 2 not to a difference as large as 4,870 square meters, or more than double the 2,000 square meters actually stated and intended to be sold. The judgment was appealed to the Court of Appeals which after due proceedings reversed it by decision promulgated on July 9, 1992. The Appellate Court declared LAGUNA the owner of the entire land, not only of a 2,000-square meter portion thereof, ruling that the area embraced within the stated boundaries prevails over the area set forth in the descriptions which must have been based on mere estimates, and that the buyer was entitled to receive all that was included within the boundaries thus stated in the deed of sale. 3
The Court finds no reversible error in said judgment now on appeal by certiorari by the Balantakbos. ISSUE: In case of conflict between the area described and the actual boundaries of the land, which should prevail? RULING: And it is by no means a novel question. On the contrary, the rule is quite well-settled that what really defines a piece of land is not the area, calculated with more or less certainty mentioned in the description, but the boundaries therein laid down, as enclosing the land and indicating its limits. In Dichoso, supra, this Court held: . . . In a contract of sale of land in mass, it is well established that the specific boundaries stated in the contract must control over any statement with respect to the area contained within its boundaries. It is not of vital consequence that a deed or contract of sale of land should disclose the area with mathematical accuracy. It is sufficient that its extent is objectively indicated with sufficient precision to enable one to identify it. An error as to the superficial area is immaterial. In the present case, it is clear that the disputed parcel of unregistered land was sufficiently identified and described. The Second Partial Stipulation of Facts submitted by the Parties sufficiently demonstrates that the parties lay claim to one and the same parcel of land, that descended to Raul Balantakbo from his father Jose Balantakbo, Sr. 10 later inherited by Consuelo Joaquin Vda. de Balantakbo from the same Raul, her son 11 and then sold by Consuelo to the Spouses Honorio Sumaya and Crispina Orlanda. Uniform descriptions of the subject lot were made in the Deed of Sale executed by Consuelo Joaquin Vda. de Balantakbo in favor of herein private respondent in 1955, in the Affidavit of Self-Adjudication executed by Consuelo on November 3, 1952, and in the Extrajudicial Partition of December 10, 1945. It appears, too, that after the 1970 survey of the property when the true area of the lot was determined to be 6,870 square meters, more or less, Luis Balantakbo was able to secure in 1975 a new Tax Declaration No. 9397 in the name of the Heirs of Jose Balantakbo, Sr., covering a 4,873 square-meter parcel of land located at Dita, Liliw, Laguna. Tax Declaration No. 9397 was supposedly a revival of Tax Declaration No. 42, which, as mentioned in the first paragraph of the Second Partial Stipulation of Facts, covered the property then described as containing an area of 2,000 square meters, more or less. This shows that the Tax Declaration No. 9397, obtained by Luis Balantakbo, covers the same lot, which contains an area equivalent to the difference between the actual area of the subject land and the area mentioned in the deed of sale, sold to the Sumayas and not another separate parcel of land. Moreover, in his testimony, petitioner Luis Balantakbo admitted that the supposed separate parcel of land for which he obtained a tax declaration is part and parcel of the land inherited by his brother Raul, then by his mother Consuelo, and thereafter sold by the latter to the Sumayas, Since it was only in 1970 that the true area of the disputed property was determined after a survey, Consuelo Joaquin Vda. de Balantakbo could not have sold in 1955 only a portion of the lot which then was known (or believed) to have an area of only 2,000 square meters, more or less, as mentioned in all the documents covering the land. And apart from the Tax Declaration secured by Luis Balantakbo after the survey of the subject property, petitioners failed to present other proof in support of their argument that the land claimed by them is different from that sold by their mother Consuelo Joaquin Vda. de Balantakbo to the Sumayas. Clearly, therefore, the position taken by petitioners that there are two different parcels of land involved is untenable. Only one parcel of land is involved and the respondent Appellate Court correctly formulated and resolved affirmatively in favor of private respondent the issue of whether the actual boundaries should prevail over the area described. Petitioners' reliance on the Asiain case 13 is misplaced. Following the arguments advanced by the trial court, petitioners contend that the descriptive words "more or less" after the area which is 2,000 square meters refer only to a slight or inconsiderable difference or a reasonable excess or deficiency, hence could not have included the 4,870 square meters claimed by petitioners, which is more than double the area of the lot sold by petitioners' mother to the Sumayas in 1955. InAsiain, the main consideration of the transaction between the seller Asiain and the buyer Jalandoni was the size or the area of the land. To convince Jalandoni to buy the land, Asiain even guaranteed that the land would produce so much sugar in piculs, hence the relevance of the phrase "more or less" which followed the statement if area in hectares which Asiainassured his land contains. It developed, however that the area was much less than what was thus represented by the seller. The Court therein ruled that the mistake with reference to the subject matter of the contract was such as to render it rescindable, at the buyer's option. The case at bar is clearly quite different, the stated area being only an additional description of the land already sufficiently identified and described as being fenced by madre cacao trees and bounded on all sides by properties with identified owners or holders. As correctly held by the respondent Appellate Court, this is a case where the land was sold a cuerpo cierto for a lump sum of P800.00 and not at the rate of a certain sum per unit of measure or number, with boundaries clearly delimited, hence the area embraced within said boundaries must be held to prevail over the area indicated in the documents. WHEREFORE, the petition is DENIED for lack of merit. The appealed decision of the respondent Court of Appeals is AFFIRMED in toto. SO ORDERED. Philippine Suburban Dev Corp vs Auditor General G.R. No. L-19545 Facts: On June 8, 1960, at a meeting with the Cabinet, the President of the Philippines, acting on the reports of the Committee created to survey suitable lots for relocating squatters in Manila and suburbs, approved in principle the acquisition by the Peoples Homesite and Housing Corporation of the unoccupied portion of the Sapang Palay Estate in Sta. Maria, Bulacan and of another area either in Las Pias or Paraaque, Rizal, or Bacoor, Cavite for those who desire to settle south of Manila. On June 10, 1960, the Board of Directors of the PHHC passed Resolution No. 700 (Annex C) authorizing the purchase of the unoccupied portion of the Sapang Palay Estate at P0.45 per square meter subject to the following conditions precedent:
That the President of the Philippines shall first provide the PHHC with the necessary funds to effect the purchase and development of this property from the proposed P4.5 million bond issue to be absorbed by the GSIS. That the contract of sale shall first be approved by the Auditor General pursuant to Executive Order dated February 3, 1959. On July 13, 1960, the President authorized the floating of bonds under Republic Act Nos. 1000 and 1322 in the amount of P7,500,000.00 to be absorbed by the GSIS, in order to finance the acquisition by the PHHC of the entire Sapang Palay Estate at a price not to exceed P0.45 per sq. meter. On December 29,1960, Petitioner Philippine Suburban Development Corporation, as owner of the unoccupied portion of the Sapang Palay Estate and the Peoples Homesite and Housing Corporation, entered into a contract embodied in a public instrument entitled Deed of Absolute Sale whereby the former conveyed unto the latter the two parcels of land abovementioned. This was not registered in the Office of the Register of Deeds until March 14, 1961, due to the fact, petitioner claims, that the PHHC could not at once advance the money needed for registration expenses. In the meantime, the Auditor General, to whom a copy of the contract had been submitted for approval in conformity with Executive Order No. 290, expressed objections thereto and requested a re-examination of the contract, in view of the fact that from 1948 to December 20, 1960, the entire hacienda was assessed at P131,590.00, and reassessed beginning December 21, 1960 in the greatly increased amount of P4,898,110.00. It appears that as early as the first week of June, 1960, prior to the signing of the deed by the parties, the PHHC acquired possession of the property, with the consent of petitioner, to enable the said PHHC to proceed immediately with the construction of roads in the new settlement and to resettle the squatters and flood victims in Manila who were rendered homeless by the floods or ejected from the lots which they were then occupying.
On April 12, 1961, the Provincial Treasurer of Bulacan requested the PHHC to withhold the amount of P30,099.79 from the purchase price to be paid by it to the Philippine Suburban Development Corporation. Said amount represented the realty tax due on the property involved for the calendar year 1961. Petitioner, through the PHHC, paid under protest the abovementioned amount to the Provincial Treasurer of Bulacan and thereafter, or on June 13, 1961, by letter, requested then Secretary of Finance Dominador Aytona to order a refund of the amount so paid. Upon recommendation of the Provincial Treasurer of Bulacan, said request was denied by the Secretary of Finance in a letter-decision dated August 22, 1961. **Petitioner claimed that it ceased to be the owner of the land in question upon the execution of the Deed of Absolute Sale on December 29, 1960. It is now claimed in this appeal that the Auditor General erred in disallowing the refund of the real estate tax in the amount of P30,460.90 because aside from the presumptive delivery of the property by the execution of the deed of sale on December 29, 1960, the possession of the property was actually delivered to the vendee prior to the sale, and, therefore, by the transmission of ownership to the vendee, petitioner has ceased to be the owner of the property involved, and, consequently, under no obligation to pay the real property tax for the year 1961.
**Respondent, however, argues that the presumptive delivery of the property under Article 1498 of the Civil Code does not apply because of the requirement in the contract that the sale shall first be approved by the Auditor General, pursuant to the Executive Order. ISSUE: WON there was already a valid transfer of ownership between the parties.
HELD: Considering the aforementioned approval and authorization by the President of the Philippines of the specific transaction in question, the prior approval by the Auditor General envisioned by Administrative Order would therefore, not be necessary.
Under the civil law, delivery (tradition) as a mode of transmission of ownership maybe actual (real tradition) or constructive (constructive tradition).
When the sale of real property is made in a public instrument, the execution thereof is equivalent to the delivery of the thing object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred.
In other words, there is symbolic delivery of the property subject of the sale by the execution of the public instrument, unless from the express terms of the instrument, or by clear inference therefrom, this was not the intention of the parties. Such would be the case, for instance, when a certain date is fixed for the purchaser to take possession of the property subject of the conveyance, or where, in case of sale by installments, it is stipulated that until the last installment is made, the title to the property should remain with the vendor, or when the vendor reserves the right to use and enjoy the properties until the gathering of the pending crops, or where the vendor has no control over the thing sold at the moment of the sale, and, therefore, its material delivery could not have been made.
In the case at bar, there is no question that the vendor had actually placed the vendee in possession and control over the thing sold, even before the date of the sale. The condition that petitioner should first register the deed of sale and secure a new title in the name of the vendee before the latter shall pay the balance of the purchase price, did not preclude the transmission of ownership. In the absence of an express stipulation to the contrary, the payment of the purchase price of the good is not a condition, precedent to the transfer of title to the buyer, but title passes by the delivery of the goods.
WHEREFORE, the appealed decision is hereby reversed, and the real property tax paid under protest to the Provincial Treasurer of Bulacan by petitioner Philippine Suburban Development Corporation, in the amount of P30,460,90, is hereby ordered refunded. Without any pronouncement as to costs.
TO FOLLOW: MEDRANO, FORTUNE TOBACCO and FROILAN Cases.