G.R. No.

L-57499 June 22, 1984

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.