CERILA J.

CALANASAN, REPRESENTED BY TEODORA On March 8, 2006, the CA rejected the petitioner’s motion for
J. CALANASAN AS ATTORNEY-IN-FACT, PETITIONER, reconsideration.
VS. SPOUSES VIRGILIO DOLORITO AND EVELYN C.
DOLORITO, RESPONDENTS.
THE PARTIES’ ARGUMENTS
DECISION
The petitioner filed the present petition for review
on certiorari with this Court to challenge the CA rulings.  The
BRION, J.: petitioner insists that Evelyn committed acts of ingratitude against
her.  She argues that, if the donation was indeed onerous and was
subject to the rules of contracts, then greater reason exists to revoke
Through a petition for review on certiorari,[1] filed under it. According to the petitioner, Evelyn violated all the terms of the
Rule 45 of the Rules of Court, petitioner Cerila J. Calanasan seeks contract, especially the provision enjoining the latter from
the reversal of the decision[2] dated September 29, 2005, and the acquiring ownership over the property during the lifetime of the
resolution[3] dated March 8, 2006 of the Court of Appeals (CA) in donor.
CA-G.R. CV No. 84031.
The respondents, for their part, point out that the petitioner raises
THE FACTS factual issues that a petition under Rule 45 of the Rules of Court
does not allow.  Furthermore, the petitioner misleads the Court in
The petitioner, Cerila J. Calanasan (Cerila), took care of her claiming that the deed of donation prohibited Evelyn from
orphan niece, respondent Evelyn C. Dolorito, since the latter was a acquiring ownership of the land.  In fact, the deed of donation
child.  In 1982, when Evelyn was already married to respondent confined the donation to only two conditions: 1) redemption of the
Virgilio Dolorito, the petitioner donated to Evelyn a parcel of land mortgage; and 2) the petitioner’s usufruct over the land as long as
which had earlier been mortgaged for P15,000.00. The donation she lived.  The respondents complied with these conditions. The
was conditional:  Evelyn must redeem the land and the petitioner respondents likewise remind the Court that issues not advanced
was entitled to possess and enjoy the property as long as she lived.  before the lower courts should not be entertained – the objective
Evelyn signified her acceptance of the donation and its terms in the that Teodora is now trying to accomplish.  Finally, the respondents
same deed.  Soon thereafter, Evelyn redeemed the property, had the applaud the CA in finding that the donation, being inter vivos and
title of the land transferred to her name, and granted the petitioner onerous, is irrevocable under Article 765 of the New Civil Code.
usufructuary rights over the donated land.
THE COURT’S RULING
On August 15, 2002, the petitioner, assisted by her sister Teodora
J. Calanasan, complained with the Regional Trial Court (RTC) that We resolve to deny the petition for lack of merit.
Evelyn had committed acts of ingratitude against her.  She prayed
that her donation in favor of her niece be revoked; in their answer, The petitioner may not raise factual issues;
the respondents denied the commission of any act of ingratitude. arguments not raised before the lower courts
may not be introduced on appeal.
The petitioner died while the case was pending with the RTC.  Her
sisters, Teodora and Dolores J. Calanasan, substituted for her. Teodora insists that Evelyn perpetrated ungrateful acts against the
petitioner. Moreover, the donation never materialized because
After the petitioner had rested her case, the respondents filed a Evelyn violated a suspensive condition of the donation when she
demurrer to evidence.  According to them, the petitioner failed to had the property title transferred to her name during the petitioner’s
prove that it was Evelyn who committed acts of ingratitude against lifetime.
the petitioner; thus, Article 765[4] of the New Civil Code found no
application in the case. As correctly raised by the respondents, these allegations are factual
issues which are not proper for the present action.  The Court is not
THE RTC’S RULING a trier of facts.[7]  The Court cannot re-examine, review or re-
evaluate the evidence and the factual review made by the lower
In its September 3, 2004  order,[5]  the RTC  granted  the courts.[8] In the absence of compelling reasons, the Court will not
demurrer to evidence  and dismissed the complaint. Article 765 deviate from the rule that factual findings of the lower tribunals are
of the New Civil Code did not apply because the ungrateful acts final and binding on this Court.
were committed against Teodora, the donor’s sister, and not against
the donor, the petitioner.  Equally important, the perpetrator of the It has not escaped the Court’s attention that this is the only time the
ungrateful acts was not Evelyn, but her husband Virgilio. petitioner raised the arguments that donation never materialized
because the donee violated a condition of the donation when she
THE CA’S RULING had the title of the property transferred to her name. The petitioner
never raised this issue before the lower courts. It can’t be
The petitioner challenged the RTC’s ruling before the CA. emphasized enough that the Court will not revisit the evidence
presented below as well as any evidence introduced for the first
In its September 29, 2005 decision,[6] the CA affirmed the RTC time on appeal.[9]  Aside from being a factual issue that is not
ruling but on a different legal ground.  The CA, after legal proper for the present action, the Court dismisses this new
analysis, found that the donation was inter vivos and onerous.  argument for being procedurally infirm and violative of due
Therefore, the deed of donation must be treated as an ordinary process.  As we have held in the past: “points of law, theories,
contract and Article 765 of the New Civil Code finds no relevance. issues and arguments not brought to the attention of the trial court
will not be and ought not to be considered by a reviewing court, as
these cannot be raised for the first time on appeal.   Basic Attorney-in-Fact.
consideration of due process impels this rule.”[10]
SO ORDERED.
Rules of contract govern the
onerous portion of donation; rules of CONCHITA LIGUEZ, PETITIONER, VS. THE
donation only apply to the excess, if any. HONORABLE COURT OF APPEALS, MARIA NGO VDA.
DE LOPEZ, ET AL., RESPONDENTS.
We now come to the appreciation of the legal incidents of the
donation vis-à-vis the alleged ungrateful acts. DECISION

In Republic of the Phils. v. Silim,[11] we classified donations

REYES, J.B.L., J.:
according to purpose.  A pure/simple donation is the truest form of
donation as it is based on pure gratuity.  The
remuneratory/compensatory type has for its purpose the rewarding
of the donee for past services, which services do not amount to a From a  decision  of  the Court  of  Appeals, affirming that of  the 
demandable debt. A conditional/modal donation, on the other hand, Court  of  First Instance  of  Davao dismissing  her complaint  for
is a consideration for future services; it also occurs where the donor recovery of land, Conchita  Liguez has resorted  to this Court, 
praying that the  aforesaid decision be reversed on points of law. 
imposes certain conditions, limitations or charges upon the donee,
We granted certiorari on October 9,  1956.
whose value is inferior to the donation given. Lastly, an onerous
donation imposes upon the donee a reciprocal obligation; this is The  case began upon complaint filed by petitioner-appellant
made for a valuable consideration whose cost is equal to or more against the widow and heirs of the late Salvador P.  Lopez to
than the thing donated.[12] recover  a parcel of 51.84 hectares  of land, situated in  Barrio
Bogac-Linot, of the municipality of Mati, Province of Davao. 
Plaintiff averred to be its legal owner, pursuant to a deed of
In De Luna v. Judge Abrigo,[13] we recognized the distinct, albeit
donation of said land, executed in her favor by the late owner,
old, characterization of onerous donations when we declared: Salvador P. Lopez,  on 18 May 1943.   The defense interposed was
“Under the old Civil Code, it is a settled rule that donations with an that the donation was null and void for having an illicit causa or
onerous cause are governed not by the law on donations but by the consideration, which was  plaintiff's  entering into marital relations
rules on contracts, as held in the cases of Carlos v. Ramil, L-6736, with Salvador P. Lopez, a married  man; and that the property had
September 5, 1911, 20 Phil. 183, Manalo vs. de Mesa, L-9449, been adjudicated to the  appellees as  heirs of  Lopez by the Court
February 12, 1915, 29 Phil. 495.”[14]  In the same case, we of First Instance,  since  1949.
emphasized the retention of the treatment of onerous types of
The Court of Appeals found that the deed of donation was prepared
donation, thus: “The same rules apply under the New Civil Code as by the Justice of the Peace of Mati,  Davao, before whom it was
provided in Article 733 thereof which provides: signed and ratified on the date  aforesaid.   At the  time, appellant
Liguez  was  a minor, only 16  years' of age.  While the  deed
Article 733. Donations with an onerous cause shall be recites—
governed by the rules on contracts, and remuneratory donations by
"That the  DONOR, Salvador P. Lopez, for and in consideration of
the provisions of the present Title as regards that portion which
his Jove  and  affection  for the  said DONEE,  Conchita Liguez,
exceeds the value of the burden imposed.”[15] and also for the good and valuable  services rendered to  the
DONOR by the DONEE, docs by these presents, voluntarily give,
We agree with the CA that since the donation imposed on the grant and donate to the said donee, etc."  (Paragraph 2, Exhibit
donee  the burden of redeeming the property for P15,000.00, the "A") the Court of Appeals found that when the donation was made,
donation was onerous. As an endowment for a valuable Lopez had been living with the parents of appellant for barely a
consideration, it partakes of the nature of an ordinary contract; month; that the  donation  was made in view of the desire of
Salvador P. Lopez, a man of mature years, to have sexual relations
hence, the rules of contract will govern and Article 765 of the New
with appellant Conchita Liguez; that Lopez  had confessed to his
Civil Code finds no application with respect to the onerous portion love for appellant to the instrumental witnesses, with the  remark
of the donation. that her parents would  not  allow Lopez to live  with her  unless he
first donated the land  in  question;  that  after the donation,
Insofar as the value of the land exceeds the redemption price paid Conchita Liguez and Salvador P. Lopez lived together in the house 
for by the donee, a donation exists, and the legal provisions on that was built upon the latter's orders,  until Lopez  was  killed on 
July  1st, 1943,  by some  guerrillas who believed him to be pro-
donation apply.  Nevertheless, despite the applicability of the
Japanese.
provisions on donation to the gratuitous portion, the petitioner may
not dissolve the donation.  She has no factual and legal basis for its It was also ascertained by the Court of Appeals that the donated
revocation, as aptly established by the RTC. First, the ungrateful land originally belonged to the conjugal  partnership of Salvador P.
acts were committed not by the donee; it was her husband who Lopez and his wife, Maria Ngo;  that the  latter  had  met  and 
committed them. Second, the ungrateful acts were perpetrated not berated Conchita for  living maritally  with  her husband, 
against the donor; it was the petitioner’s sister who received the sometime  during  June of 1943; that the widow  and children of
Lopez  were in  possession  of the land and made improvements
alleged ill treatments.  These twin considerations place the case out
thereon;  that the land was  assessed in the tax rolls first  in the
of the purview of Article 765 of the New Civil Code. name of Lopez  and  later in that of  his widow;  and that the deed
of donation was  never recorded.
WHEREFORE, premises considered, the Court DENIES the
petition for review on certiorari. The decision dated September 29, Upon these facts, the Court of Appeals held that the deed of
2005, and the resolution dated March 8, 2006, of the Court of donation was  inoperative,  and null  and void  (1) because the
Appeals in CA-G.R. CV No. 84031 are hereby AFFIRMED. Costs husband,  Lopez, had no right to donate  conjugal property to the 
plaintiff appellant;  and  (2) because the donation was tainted with
against Cerila J. Calanasan, represented by Teodora J. Calanasan as
illegal  causa or consideration, of which donor and donee were
participants. embodied  in Article 1306 of the  Code of 1889  (reproduced in
Article 1412 of the new Civil Code)  :
Appellant vigorously contends that the Court  of First Instance as
well  as the Court of Appeals erred in holding the donation void "ART. 1412. If the act in which the unlawful or forbidden cause
for  having an illicit causa or consideration.  It is argued that under consists does  riot constitute a  criminal offense, the  following
Article 1274 of the Civil Code of 1889  (which was the governing rules shall be observed:
law in 1943, when the donation was executed),  "in contracts of
pure beneficence  the  consideration is the  liberality of  the donor",
and that liberality per se can never be illegal, since  it is neither (1)  When the fault is on the part  of both contracting parties,
against law or morals  or public policy. neither may recover what ho has given by virtue of the contract, or
demand the performance of  the other's undertaking;
The flaw in this argument lies in ignoring that under Article  1274, (2)  When  only one of the contracting parties is at  fault, he cannot
liberality of the donor is deemed causa  only in  those  contracts recover what  he has  given by reason  of the contract, or ask for 
that are of  "pure"  beneficence;  that is to say, contracts  designed  fulfillment of what  has been promised  him.  The other, who is not
solely  and  exclusively to procure the welfare of the beneficiary, at fault, may demand the return of what he has given without any
without any intent of  producing  any  satisfaction for the donor; obligation to comply with  his promise."
contracts, in other words, in which the idea of self-interest is totally
absent on the part of the transferor. For this very reason, the same In our opinion, the Court of Appeals  erred in  applying to the
Article 1274 provides that in remuneratory  con- tracts, the present case the pari delicto  rule.  First,  because it can not be said 
consideration is the service  or benefit for which the  remuneration  that both parties here had equal guilt when we consider that as
is  given;  causa is  not  liberality in these cases because  the against the deceased Salvador P, Lopez, who  was a man  advanced
contract  or  conveyance is  not made out of pure  beneficence, but in years and mature experience, the appellant was a mere minor,
"solvendi animo."  In consonance with this view, this Supreme 16  years of age, when the donation was made; that  there  is no
Court in Philippine Long Distance  Co. vs. Jeturian* G. B. L-7756,  finding made by the Court of Appeals  that  she was  fully aware of
July 30,  1955, like the  Supreme Court of Spain in its decision of  the terms of the bargain entered  into by  and between Lopez and
16 Feb. 1899, has ruled that bonuses granted to employees to excite her parents; that her acceptance  in the deed of donation  (which
their zeal and efficiency, with consequent 'benefit for the employer, was authorized by Article 626 of the old Civil  Code)  did not
do not constitute donation having liberality for a consideration. necessarily imply knowledge of conditions and terms  not set forth
therein;  and  that the substance  of the testimony  of the
Here the facts as  found by the Court of Appeals (and which we can instrumental  witnesses is that it was the appellant's  parents who
not vary) demonstrate that in  making the donation  in question, the insisted on the donation  before allowing her to  live with  Lopez. 
late  Salvador  P.  Lopez was not moved exclusively by the  desire These facts  are  more suggestive  of  seduction than of immoral
to benefit  appellant Conchita Liguez, but also to secure her  bargaining  on the part of appellant.  It must  not  be forgotten that
cohabiting, with him, so  that  he  could  gratify  his sexual illegality is not presumed, but must be duly and adequately proved.
impulses.  This  is clear from the  confession  of  Lopez to the
witnesses Rodriguez and Ragay,  that  he was in love with In the  second place, the  rule that parties to  an illegal contract,  if
appellant, but her parents would  not agree  unless he  donated the equally guilty,  will not be  aided by the law but will both be left
land in question to her.   Actually, therefore, the donation was but where  it  finds them, has been interpreted by  this  Court  as
one part of  an onerous transaction (at least with appellant's barring the party  from pleading the illegality of the bargain  either
parents)  that  must be  viewed  in  its totality. Thus considered, the as a  cause,  of action or  as  a defense.   Memo auditor proprian 
conveyance was clearly predicated upon an illicit causa. turpitudinem allegans.   Said this Court  in  Perez vs. Herranz,  7 
Phil. 695-696:
Appellant  seeks to differentiate between  the  alleged liberality  of
Lopez, as causa for the donation in her  favor, and his  desire  for "It is unnecessary  to  determine whether a vessel  fox  which a
cohabiting  with appellant, as motives that impelled him to make certificate and license have  been fraudulently  obtained  incurs
the donation, and  quotes from Manresa  and the  jurisprudence of forfeiture under these or  any other provisions of this act.  It is
this  Court on  the distinction that must be  maintained enough for this case that the statute  prohibits such an arrangement 
between causa and motives (De Jesus vs. Urrutia and  Co., 33 Phil. as that between  the plaintiff and  defendant so as to  render illegal
171).   It is well to note, however,  that Manresa himself  (Vol.  8, both the arrangement itself and all contracts between  the parties
pp.   641-642), while  maintaining the  distinction  and upholding growing out of it.
the imperativeness of  the motives  of  the parties to determine the
validity of the contract, expressly excepts from the rule those  It does not, however,  follow  that the plaintiff can  succeed  in this
contracts  that  are  conditioned  upon the attainment of the motives action.   There are two answers to his claim  as urged in  his brief. 
of either party. It is a familiar principle  that the courts  will not aid either party to
enforce  an  illegal contract, but  will  leave  them  both where it
"* * * distincion  importantisimii,   que impide  amilar el contrato finds them; but where  the plaintiff can establish a  cause of action
por  la sola iniluencia de los motivos a no ser que se hubiera without exposing  its  illegality,  the vice does not  affect his  right
subordlnado al cumplimiento de estos como condiciones la eficaeia to  recover.  The American authorities cited by the plaintiff;. fully 
de aquel." sustain  this doctrine.  The  principle applies  equally  to a defense. 
The law in  those Islands  applicable to the case  is  found in article 
The same view is held by the Supreme Court of Spain, in its 1305 of the Civil Code,  shutting out  from relief either of the  two 
decisions of February  4,  1941,  and  December 4, 1946, holding  guilty parties to an  illegal or vicious contract.
that  the  motive may be regarded  as causa when it predetermines
the purpose of the contract. In the case at bar the plaintiff  could establish prima facie  his sole 
ownership by the bill of sale  from Smith, Bell & Co. and  the
In the present case, it is scarsely disputable that Lopez would not  official  registration. The defendant, on his part, might overthrow
have conveyed  the  property in  question  had he known that this title by proof through a certain subsequent  agreement 
appellant would refuse to cohabit with him; so that the cohabitation between him and the plaintiff, dated March 16, 1902, that they had
was an implied condition to the donation, and  being  unlawful,  become owners  in common of the vessel, the agreement  not
necessarily  tainted  the donation itself. disclosing  the illegal  motive for placing the formal  title in the
plaintiff.  Such an  ownership is  not  in itself  prohibited, for  the
The Court  of Appeals  rejected  the  appellant's  claim on the basis United States courts recognize the equitable  ownership  of  a
of the well-known rule "in pari delicto  non oritur actio" as vessel as against the holder  of a  legal  title,  where the 
arrangement  is not one in fraud  of the law.  (Weston vs.  enajenaciones  que  deban  considerarse ilcgales o fraudulentas,
Penniman,  Federal Case 17455; Scudder us. Calais Steamboat con sujecion al art.  1.413.'   (Debio tambien citarse  cl artieulo 
Company, Federal  Case 12566.) 1.415, que es el  que habla  de donaeiones.)"

On this proof, the defendant being a part  owner  of the vessel, "En rcsumen:  el marido solo puede donar los  bienes gananciales
would have defeated the action for its  exclusive possession by the dentro de los  limites  marcados en  el art.  1.415.   Sin embargo,
plaintiff.  The burden would then be east upon the plaintiff to show solo la mujer  o  sus hercderos pueden  reelamar  contra la  valides
the illegality of  the arrangement,  which under the  cases  cited ho de la donacion,  pues solo en su interes  se establece  la 
would not be allowed to  do." prohibicion.  La mujer o sus herederos, para poder dejar sin efecto 
el acto,  han  de sufrir verdadero perjuicio, entendiendose que no 
The rule  was reaffirmed  in  Lima vs.  Lim Chu  Kao, 51 Phil. 477. le hay hasta,  tanto que, terminada por cualquier  causa la 
sociedad  de gananciales, y hecha  su liquidacion,  no  pueda
The situation confronting us is  exactly analogous.   The appellant  imputarse lo  donado al habcr por cualquier concepto del marido, 
seeks recovery  of  the   disputed  land  on   the strength of a m obtener  en su  consccucncia  ]a mujer  la  dibida 
donation regular on  its face.  To defeat its effect, the  appellees indemniKacion.   La  donacion   reviste por tanto legalmente, una
must plead and  prove that the same is illegal.   But such plea on eficaeia condicional, y en armonia con esto caracter, deben fijarse 
the part of the  Lopez heirs is not receivable,  since Lopez  himself, log efeetos  de la  misma con  relacion a los adquirentes y  a los
if living, would be barred from setting up  that  plea; and his heirs, terceros  poseedores,  leniendo,  en.  su caso, en  cuenta  lo
as  his privies and  successors   in  interest,  can have  no better dispueato en la Icy Hipotecaria.  Para prevenir todo perjuicio,
rights than Lopez himself. puede la mujer,  durante  el matrimonio inmediatamente al acto,
haeer constar ante los  Tribunales su existencia y soicitar meclidas 
Appellees, as successors  of  the  late  donor",  being thus de precaucion, como  ya se ha dicho. Para  evitarlo en lo  sucesivo,
precluded  from pleading  the  defense   of  immorality or y cuando las eircunstancias lo rcquieran, puede instar la declaration
illegal causa of the donation,  the  total  or partial ineffectiveness do prodigalidad."
of  the same must be decided by  different legal principles.  In this 
regard,  the Court of Appeals correctly held that Lopez could not To determine the prejudice to the widow,  it must  be shown that
donate the  entirety  of the property in litigation,  to the  prejudice  the  value of her share in  the property donated can not be paid out
of  his wife  Maria Ngo, because  said  property  was conjugal in  of  the husband's share of the community  profits.  The  requisite 
character,  and the  right  of the husband  to  donate  community data,  however, are not available  to us and necessitate a  remand of
property is strictly limited  by law (Civil  Code of 1889, Arts. the records  to the  court of origin that  settled the  estate of the late
1409, 1415, 1413;  Baello vs. Villanueva, 54 Phil. 213). Salvador  P.  Lopez.

"ART. 1409. The conjugal partnership shall also be chargeable The situation of the children and forced heirs of Lopez
with anything  which  may have been  given or promised  by the approximates that  of  the  widow.   As  privies of their parent,
husband alone to the children born of the marriage in order  to they  are  barred from invoking  the illegality  of the  donation. 
obtain employment  for  them or  give  them a profession or by But  their right  to a  legitime out  of his estate is not thereby
both spouses by common  consent,  should  they not have affected,  since the legitime is granted them by the law itself, over
'Stipulated  that  such  expenditures should be borne  in  whole or and above the wishes  of the deceased.  Hence, the forced heirs are
in part by  the separate property of one  of them." entitled to have the donation  set aside in so far as inofficious:  i.e.,
in excess  of the  portion of free  disposal (Civil Code of 1889,
"ART. 1415. The husband  may  dispose of  the  property of  the Articles 636, 654), computed as provided in Articles 818 and 819,
conjugal partnership  for the  purposes mentioned in Article 1409." and  bearing in  mind that  "collationable  gifts"  under Article 818
should include gifts made not only in favor  of the forced heirs, but
"ART. 1413. In addition  to  his  powers as  manager  the husband even those made  in favor of strangers, as decided by the Supreme
may for a valuable consideration alienate and  encumber the Court of Spain in its decisions of 4 May 1899  and  16 June 1902. 
property of the  conjugal partnership without the consent of the So that in computing the  legitimes, the value of the property
wife." donated to herein appellant, Conchita  Liguez,  should be 
considered part  of the  donor's estate.   Once again,  only the 
court  of  origin has  the requisite  date  to determine whether the
The text  of the  articles  makes it plain that the donation made  by donation is  inofficious or  not.
the husband in contravention of law  is not void in its entirety,  but 
only  in  so far  as it prejudices the interest of  the  wife.   In  this With regard to the improvements in the land in question, the same 
regard,  as  Manresa  points out  (Commentaries,  5th  Ed.,  pp.  should be governed by the rules of accession and possession in
650-651,  652-653), the law  makes   no  distinction  between  good faith, it being undisputed that the  widow and  heirs of Lopez
gratuitous transfers and  conveyances for a consideration. were unaware of the donation in favor of the appellant when the
improvements were made.
"Puede la  mujer como  proprietaria hacer  aimlar las donaciones
aun durante el matrimonio?  Esta es, en suma, la cuestion, reducida The appellees, relying on Galion vs. Garayes, 53 Phil. 43, contend
a dctcrminar  si la  distinta naturaleza entre los actos a titulo  that by her failure to appear at the liquidation proceedings of the
oneroso y los actos a  tftulo lucrative, y sus espcciales  y diversas estate of Salvador P.  Lopez  in July 1943, the appellant has
eireunstan- cias,  pueden  motivar  una solucion" diferente  en  forfeited her  right to  uphold the donation if the prejudice to the
cuanto a la epoca en que la muj er he  de  reelamar  y obtener la  widow Maria Ngo resulting from the donation could be made good
nulidad del  acto; cuestian quc  no deja de  ser  interesantisima. out of the husband's share in the conjugal  profits.   It  is also
argued that appellant was guilty of laches in failing to enforce her
El  Codigo,  a pesar  de  la variacion que ha  introducido en  el rights as. donee until 1951.   This line  of argument overlooks the
prooycoto do  1851, poniendo  corooosegundo parrafo  del  articulo capital fact that in 1943, appellant was still a minor of sixteen; and
1.413, como  limitation de las enajenaciones u obligaciones a tftulo she did not reach the age of majority until 1948.   Hence, her 
oneroso, lo que  era  una  Iimitaci6n general de todos  los actos del action  in 1951  was only delayed three years.   Nor could  she be
marido, muestra,  sin  embargo, que no ha variado  de criterio, y properly expected to intervene in the settlement of the estate  of
que  para el las  donaciones  deben  en todo equipararse  a Lopez: first, because she was a  minor  during the  great  part of
cualquier otro acto ilegal o fraudulento de caructer oneroso,  al the  proceedings; second, because she was not given notice thereof;
decir en el art. 1.419: 'Tambicn  se  traera a colacion' en  el and third, because the donation did  not make her  a creditor of the
inventario  de  la  sociedad—el importe de  las dotiacio7ies y estate.   As  we  have ruled in  Lopez  vs.  Olbes, 15  Phil. 547-548:
"The prima facie donation  inter vivos and its  acceptance by the defendant Salomon Ramas. Prior to July 30, 1917, the plaintiffs,
donees having been proved by means of a public instrument, and Teodoro Velez and wife, were the owners of a pawnshop and had
the  donor having been duly notified  of said acceptance,  the  employed Restituta Quirante in some capacity or other therein.
contract is perfect and obligatory  and it is perfectly in.  order to
While thus employed, Restituta Quirante abstracted various sums
demand its fulfillment, unless an exception is proved whicn is
based  on some legal reason opportunely alleged by the  donor or of money belonging to the plaintiffs, amounting altogether to
her heirg. P2,363.60, under conditions which Supposedly constituted the
offense of estafa. When this fact was discovered by the plaintiffs
So long  as the  donation  in question  has  not been judicially they threatened to prosecute her, and in order to prevent this
proved  and  declared  to be  null,  inefficacious,  or  irregular, the eventuality the contract in question was executed by the
land donated is of the absolute ownership of the  donees and defendants.
consequently,  does not form a part of thre property of  the estate of
the deceased  Martina, Lopez; wherefore the action  instituted
demanding'  compliance with  the contract,  the  delivery by  the The preliminary recitals and the principal obligatory clause of this
deforciant of the land donated,  or that  it be prohibited to  disturb contract are expressed in the following terms:
the right of the donees, should  not be considered as incidental to "Whereas, it was discovered that Restituta Quirante,
the probate proceedings aforementioned." being an employee of Teodoro Velez and Hermenegilda Ch.
Veloso, has illegally abstracted various sums of money entrusted to
The ease  of  Gallon vs.  Gayares,  supra, is not in point. First, her for safe-keeping, amounting altogether to P2,303.60 (two
because that case involved a simulated transfer that can have no thousand three hundred and three pesos and sixty centavos).
effect,  while a donation with illegal causa may produce  effects 
under  certain  circumstances  where the parties  are  not  of equal
"Whereas, in order to prevent said woman from being brought
guilt; and  again, because the transferee  in  the  Gallon   case  took
the property  subject to lis pendens  notice,  that in  this case does before the courts for the unlawful act She has executed, the persons
not exist. subscribing this document have guaranteed to the said Teodoro
Velez and Hermenegilda Ch. Veloso the payment of the aforesaid
In  view of the  foregoing, the  decisions appealed from are sum plus an interest of 12 per cent per annum until fully paid.
reversed and  set aside,  and  the appellant Conchita Liguez
declared  entitled to so  much of the donated property  as  may be "Whereas, by virtue of the foregoing obligation, said Velez and
found, upon  proper liquidation,  not  to prejudice the share  of  the
Hermenegilda Ch. Veloso agree to suspend the action they intend
widow Maria Ngo in the conjugal  partnership with Salvador P.
Lopez or the Iegitimes of the forced heirs of the latter.  The records to bring against Restituta Quirante.
are ordered remanded  to the court of origin for further 
proceedings in accordance with this opinion.   Costs  against "Therefore, we, Salomon Ramas and Roberto Quirante, the first a
appellees. So  ordered. resident of the city of Cebu and the second of the municipality of
Dumanjug of the same province, jointly and severally bind
TEODORO VELEZ ET AL., PLAINTIFFS AND APPELLANTS, ourselves to pay Teodoro Velez and Hermenegilda Ch. Veloso the
VS. SALOMON RAMAS ET AL., DEFENDANTS AND aforementioned sum of two thousand three hundred three pesos and
APPELLEES. sixty centavos (P2,303.60) with interest."
We are of the opinion that the trial court was correct in
DECISION
the conclusion that an action cannot be maintained upon this
contract. The preliminary recitals clearly disclose the fact that the
purpose of the contracting parties was to prevent a prosecution for
STREET, J.:
crime; and the injured parties, on their part, agree to suspend the
criminal proceedings which they had intended to promote. As
This action was instituted in the Court of First Instance of regards the defendant Roberto Quirante there was absolutely no
the Province of Cebu by the plaintiff, Teodoro Velez, and his wife, other motive for making the contract than a desire to prevent the
Hermenegilda Chiong Veloso, to recover of the defendants, prosecution of his daughter; and the only consideration in the legal
Salomon Ramas and Roberto Quirante, a sum of money evidenced sense for his promise to pay was the engagement of the plaintiffs
by a written obligation signed by said defendants under date of July whereby they bound themselves to suspend criminal proceedings.
30, 1917, wherein they acknowledged themselves to be jointly and As regards the defendant Salomon Ramafe, it might be supposed
severally bound for the payment to the plaintiff of the Sum of that the act of his wife, Restituta Quirante, in embezzling the
P2,303.60. It is admitted that the defendant Ramas had paid P300 money of her employers created a civil debt which was binding on
upon said obligation prior to the institution of the suit, leaving a him as a member of the community partnership and that he at any
balance due of P2,003.60. Salomon Ramas answered the rate would be liable for that money without reference to the
complaint, admitting in effect the facts alleged therein, and stating contract. But that liability cannot be enforced in an action to which
as his sole ground of defense that the alleged contract was illegal the wife is not a party. It results that, even as against Ramas, this
on its face. This defendant further interposed a counterclaim, case must be decided on the question of the legality, or illegality, of
seeking to recover the P300 which he had already paid. The the contract sued on.
defendant Roberto Quirante did not appear, and no defense was
made for him. When the case was submitted for decision the trial In our opinion the consideration for this agreement is clearly illicit,
court sustained the defense, absolved both the defendants from the which fact is apparent on the face of the contract; and the case is
complaint and gave judgment upon the counterclaim in favor of accordingly governed by article 1275 of the Civil Code.
Salomon Ramas jointly and severally against the plaintiffs for the
sum of P300, with interest at the legal rate from the date the answer There has been no period since contract law reached the stage of
was filed. From this judgment the plaintiffs appealed. consciousness, when the maxim ex turpi causa non oritur
actio was not recognized. A contract based upon an unlawful
It appears in evidence that the defendant Roberto Quirante is the consideration or designed to promote an unlawful object is and
father of Restituta Quirante, who in turn is the wife of the
always has been void ab initio by the common law, by the civil This is an action to recover the sum of P1,777.00, plus
law, moral law, and all laws whatsoever (Collins vs. Bantern, 2 P1,000.00 as moral damages and P500.00 as attorney's fees.
Wils. C. Pl., 341.) It is immaterial whether the illegal character of Defendant, Filomeno Melegrito, filed an answer admitting some
the contract is revealed in the matter of the consideration, in the allegations of the complaint and denying other allegations thereof,
promise as expressed in the agreement, or in the purpose which the and setting up some special defenses and a counterclaim. In due
agreement, though legal in expression, is intended to accomplish. If course, the Court of First Instance of Nueva Ecija rendered a
the illegality lurks in any element, or even subsists exclusively in decision dismissing the case with costs against plaintiff, Miguel
the purpose of the parties, it is fatal to the validity of the contract. Mactal, upon the ground that the consideration of the promissory
(Manresa, Codigo Civil, 2d ed.f vol. 8, p. 686.) note upon which the complaint is based was the dismissal of a
criminal case for estafa against the defendant and, hence, illicit,
By the universal consensus of judicial opinion in all ages it has immoral and contrary to public policy, as well as void ab initio.
been considered contrary to public policy to allow parties to make The case is before us on appeal taken by the plaintiff, who
agreements designed to prevent or stifle prosecutions for crime. It maintains that the lower court erred in holding that this action is
is self-evident that the law cannot sanction an engagement which is based, upon the aforementioned promissory note, and that the
subversive of the law itself or which tends to weaken the consideration thereof was the dismissal of the estafa case against
foundations of human society. The machinery for the the appellee.
administration of justice cannot be used to promote an unlawful
purpose. It appears, and the lower court held, that, on or about February 5,
1953, Mactal delivered P1,770.00 to Melegrito, to be used by him
The case of Arroyo vs. Berwin (36 Phil. Rep., 386), would seem to in the purchase of palay for Mactal, with a ten (10%) per cent
be conclusive, as it is based upon the doctrine above announced, commission in his (Melegrito's) favor, or returned to Mactal, within
and we see no just basis for discriminating between the facts there ten (10) days, should he (Melegrito) fail to buy palay. This
obligation was set forth in a receipt signed by Melegrito, who
involved and those here presented.
neither bought palay nor returned said amount. Hence, Mactal
accused him or estafa in the Justice of the Peace Court of Guimba,
It seems to us that an arguable question might have been raised as Nueva Ecija. When the case was about to be heard, on October 19,
to the propriety of allowing Salomon Ramas to recover the P300 1953, Florencio Paraso, then chief of police of Guimba, acting
which he had in fact paid upon the contract in question; but the upon Melegrito's request, prevailed upon Mactal to move for the
point has not been made the subject of any assignment of error in dismissal of the case and be contented with a promise on the part of
Melegrito to pay, not later than January, 1954, said P1,777.00, plus
this Court and must be passed without discussion.
the sum of P7,000, balance of his account with Mactal in
connection with another transaction. Accordingly, Melegrito signed
The action of the trial court in absolving the defendant Roberto a document Exhibit A (also Exhibit 1), prepared by Paraso in the
Quirante, although he had made no defense, was correct and is Tagalog dialect, which translated into English, reads:
worthy of some comment as embodying a point of practice which
should be called to the attention of courts and practitioners. The "I, Filomeno Melegrito, married, of age, at present residing at
rule is this: Where a complaint states a common cause of action barrio Cabaruan, Guimba, Nueva Ecija, this 15th day of October
against several defendants and some appear to defend the case on 1953, hereby certify to the following:
the merits while others make default, the defense interposed by
those who appear to litigate the case inures to the benefit of those "That I am indebted to Mr. Miguel Mactal in the sum of P1,777.00
who fail to appear; and if the court finds that a good defense has Philippine Currency, which I promise to pay him within the month
been made, all of the defendants must be absolved. The proper of January, 1954,
mode of proceeding where a complaint states a common cause of
action against several defendants, and one of them makes default, "In witness whereof, I have hereunto affixed my name
is simply to enter a formal default order against him, and proceed and surname in the presence of two (2) witnesses, this 19th day of
with the cause upon the answers of the others. The defaulting October, 1953, in Guimba, Nueva Ecija.
defendant merely loses his standing in court, he not being entitled (Sgd.)
to the service of notices in the cause, nor to appear in the suit in   Filomeno
any way. He cannot adduce evidence; nor can he be heard at the Melegrito"
final hearing. If the case is finally decided in the plaintiff's favor, a
final decree is then entered against all the defendants; but if the suit Forthwith, the receipt above mentioned was destroyed and the
should be decided against the plaintiff, the action will be dismissed criminal case was, on the same day, dismissed on motion of
Mactal. Despite, however, repeated demands by the latter,
as to all the defendants alike. (Frow vs. De la Vega, 15 Wall., 552; Melegrito subsequently failed to pay the aforementioned sum of
21 L. ed., 60.) P1,777.00. Hence, this action, which was begun on January 26,
1955.
For the reasons stated the judgment must be affirmed; and it is so
ordered, with costs against the appellants. The lower court specifically found that Melegrito had on February
5, 1953, received from Mactal P1,777.00 to be used in the purchase
MIGUEL MACTAL, PLAINTIFF AND APPELLANT, VS. of palay for the latter, with the obligation to return, said amount,
FILOMENO MELEGRITO, DEFENDANT AND APPELLEE. within ten (10) days, if not spent for said purpose. In fact,
Melegrito admitted, on the witness stand, that he is indebted to the
DECISION plaintiff in the aggregate sum of P1,777.00, although he claims that
his liability therefor was merely that of a guarantor, not principal
debtor. So when the chief of police succeeded in persuading Mactal
to withdraw the criminal case for estafa, Melegrito was only too
CONCEPCION, J.: willing to sign Exhibit A, in which he promised to pay the
aforementioned amount in January, 1954. The consideration for
this promise was, therefore, the aforesaid pre-existing debt of
Melegrito, not the dismissal of the estafa case, which merely Jasminia, caused the latter to sign a Deed of Absolute Sale in her
furnished the occasion for the execution of Exhibit A (see favor. Thereafter, Lolita, aided by her brother Wilfredo Mendoza
Garrido vs. Cardenas, L-10631 [promulgated April 25, 1958]; as witness, entered it for registration with the Office of the Registry
Hibberd vs. Rhode and McMillan, 32 Phil., 476; Goodrum vs. of Deeds. Thus, TCT (Torrens [sic] Certificate of Title) No. T-
Merchants & Planters Bank, 102 Ark. 326). 308560 in the name of Jasminia was cancelled and TCT No. T-
1077041 was issued in the name of Lolita.
Wherefore, the decision appealed from is hereby reversed and.
another one shall be entered sentencing defendant Filomeno [Respondents], upon learning from the Office of the Registry of
Melegrito to pay the plaintiff Miguel Mactal the sum of P1,777.00, Deeds that Jasminia's certificate of title has been cancelled,
with interest thereon at the legal rate, from January 26, 1955, as executed an Affidavit of Adverse Claim of their right and interest
well as the costs of the proceedings. It is so ordered. over the property as the only compulsory and legitimate heirs of
Jasminia. However, [petitioner] Lolita, knowing fully well of the
impending suit, made it appear that she mortgaged the property to
LOLITA ESPIRITU SANTO MENDOZA AND SPS. [petitioners] Spouses Gutierrez as a security for a loan amounting
ALEXANDER AND ELIZABETH GUTIERREZ, to Php800,000.00.
PETITIONERS, VS. SPS. RAMON, SR. AND NATIVIDAD
PALUGOD, RESPONDENTS. Thus, [respondents] filed a complaint for Declaration of Nullity of
the Deed of Absolute Sale and the Deed of Real Estate
DECISION Mortgage with the RTC of Bacoor[,] Cavite.

On March 14, 2013, the RTC of Bacoor, Cavite, Branch 19,

CAGUIOA, J: rendered the assailed Decision in favor of [respondents]. The RTC
declared that there can be no contract unless the following concur:
Before the Court is a petition for review on certiorari (Petition) (a) consent; (2) object certain; and (3) cause of the obligation.
under Rule 45 of the Rules of Court assailing the Decision[1] dated [Respondents] were able to prove by preponderance of evidence
April 29, 2015 (Decision) of the Court of Appeals[2] (CA) in CA- that the Deed of Sale involved no actual monetary consideration.
G.R. CV No. 102904, denying the appeal of petitioners for lack of [Petitioner] Lolita, in her testimony, admitted that the sale was
merit, and the CA[3] Resolution[4] dated September 10, 2015, without monetary consideration. The RTC ruled that the Deed of
denying petitioners' motion for reconsideration. The CA Decision Sale is void for being simulated, hence, the Deed of Real Estate
affirmed the Decision[5] dated March 14, 2013 in favor of Mortgage executed therein by [petitioner] Lolita in favor of
respondents and Order[6] dated May 8, 2014, denying petitioners' [petitioners] Spouses Gutierrez is likewise void, since, in a real
motion for reconsideration, of the Regional Trial Court of Bacoor, estate mortgage, it is essential that the mortgagor be the absolute
Cavite, Branch 19 (RTC) in Civil Case No. BCV 2004-217. owner of the property to be mortgaged.

The Facts and Antecedent Proceedings [The dispositive portion of the RTC Decision states:
WHEREFORE, premises considered, the judgment is hereby
The CA Decision's brief narration of facts and proceedings before rendered in favor of the [respondents] Sps. Ramon, Sr. and
the RTC follows: Natividad Palugod and against the [petitioners] Lolita Espiritu
[Petitioner] Lolita Espiritu Santo Mendoza (Lolita, for brevity) and Santo Mendoza and Sps. Alexander and Elizabeth Gutierrez as
Jasminia Palugod (Jasminia, for brevity) were close friends. Lolita follows:
was a businesswoman engaged in selling commodities and houses
and lots, while Jasminia was then working as a Supervisor in the 1. That the Deed of Absolute Sale dated May 11, 2004
Philippine Long Distance Telephone Company (PLDT). In 1991, purportedly executed by x x x Jasminia Palugod in favor
Lolita and Jasminia bought the subject lot [with an area of 120 sq. of [petitioner] Lolita Espiritu Santo Mendoza as null and
m.[7]] on installment for one (1) year until they decided to pay the void;
balance in full. [The lot is located in Sagana Remville [8] Homes,
Habay, Bacoor, Cavite.[9] In 1995, Jasminia became afflicted with 2. That the Deed of Real Estate Mortgage dated November
breast cancer. Sometime in 1996, Lolita and Jasminia constructed a 19, 2004 executed by [petitioner] Lolita Espiritu Santo
residential house on the subject lot. Although Lolita has no Mendoza in favor of [petitioners] Spouses Alexander and
receipts, she shared in the cost of the construction of the house Elizabeth Gutierrez as null and void;
from her income in the catering business and selling of various
products. [Jasminia, based on a certification[10], was separated from
3. To cancel the Transfer Certificate of Title No. T-
employment on December 30, 1998, and on January 18, 1999, she
1077041 in the name of [petitioner] Lolita Espiritu Santo
received her retirement pay[11] in the amount of P1,383,773.59.[12]]
Mendoza and to reinstate Transfer Certificate of Title
On May 11, 2004, Jasminia executed a Deed of [Absolute] Sale in
No. 308560 in the name of Jasminia P. Palugod;
favor of Lolita, who eventually mortgaged [on November 19,
2004[13]] the subject property to [petitioner] Elizabeth Gutierrez as a
security for a loan in the amount of Php800,000.00. 4. Declaring [respondents] as the lawful owner[s] of the
subject property by succession as the only and
On the other hand, [respondents spouses Ramon, Sr. and Natividad compulsory heirs of the late Jasminia P. Palugod; and
Palugod] alleged that their daughter, the late Jasminia, acquired the
property located in Sagana Homes, Habay, Bacoor[,] Cavite. Prior 5. Ordering [petitioners], jointly and severally, to pay
to and after the said acquisition of the subject property, Jasminia [respondents] the amount of Php200,000.00 in attorney's
was living with [petitioner] Lolita, a lesbian. Jasminia was an fees.
employee of PLDT who rose to the rank of Traffic Supervisor
before her separation from service. [Petitioner] Lolita has no work SO ORDERED.[15]]
or means of livelihood of her own and was fully dependent on [Petitioners] filed [a] motion for reconsideration, but the RTC, in
Jasminia. Unfortunately, Jasminia was afflicted with Stage IV the assailed Order dated May 8, 2014, denied the same for lack of
breast cancer with multiple bone metastasis. When she was nearing merit.
her death, she told her mother, [respondent] Natividad Palugod,
that her house and lot shall go to her brother Ramonito Palugod, Aggrieved, [petitioners] interposed [an] appeal [before the CA]. [16]
but [petitioner] shall be allowed to stay therein. [Jasminia died on The CA Ruling
September 26, 2004 at the Philippine General Hospital. [14]]
Meanwhile, Lolita, taking advantage of her relationship with
The CA denied petitioners' appeal for lack of merit. The CA ruled Court which has jurisdiction to rule only on questions of law in
that respondents, being the only surviving heirs of Rule 45 petitions to review.[30]
Jasminia[17] Paloma Palugod (Jasminia), have the legal personality
to question the validity of the deed of sale between Jasminia and The Court in Pascual v. Burgos[31] reiterated that:
petitioner Lolita Espiritu Santo Mendoza (petitioner Lolita). [18] The A question of fact requires this [C]ourt to review the truthfulness or
CA found no cogent reason to deviate from the finding of the RTC falsity of the allegations of the parties.[32] This review includes
that the deed of sale is null and void for being absolutely simulated assessment of the "probative value of the evidence
since it did not involve any actual monetary consideration. [19] The presented."[33] There is also a question of fact when the issue
CA likewise agreed with the RTC's finding that the real estate presented before this [C]ourt is the correctness of the lower courts'
mortgage between petitioner Lolita and petitioners spouses appreciation of the evidence presented by the parties. [34]
Alexander and Elizabeth Gutierrez is null and void because the There are, however, recognized exceptions where the Court may
mortgagor was not the absolute owner of the mortgaged property. review questions of fact. These are: (1) when the factual conclusion
[20]
 The dispositive portion of the CA Decision reads as follows: is a finding grounded entirely on speculations, surmises and
WHEREFORE, the appeal is DENIED for lack of merit. The conjectures; (2) when the inference is manifestly mistaken, absurd
assailed March 14, 2013 Decision and May 8, 2014 Order of the or impossible; (3) when there is abuse of discretion; (4) when the
RTC of Bacoor, Cavite, Branch 19, in Civil Case No. BCV 2004- judgment is based on a misapprehension of facts; (5) when the
217, are AFFIRMED. findings of fact are conflicting; (6) when the CA went beyond the
issues of the case in making its findings, which are further contrary
SO ORDERED.[21] to the admissions of both the appellant and the appellee; (7) when
Petitioners filed a motion for reconsideration, which was denied by the CA's findings are contrary to those of the trial court; (8) when
the CA in its Resolution[22] dated September 10, 2015. the conclusions do not cite the specific evidence on which they are
based; (9) when the facts set forth in the petition as well as in the
Hence, the present Petition. The Court in its Resolution [23] dated petitioner's main and reply briefs are not disputed by the
January 13, 2016 denied the Petition for failure to sufficiently show respondents; (10) when the CA's findings of fact, supposedly
any reversible error in the challenged CA Decision and Resolution premised on the absence of evidence, are contradicted by the
as to warrant the exercise of the Court's appellate jurisdiction. evidence on record;[35] or (11) when the CA manifestly overlooked
Petitioners filed a Motion for Reconsideration[24] dated March 28, certain relevant facts not disputed by the parties, which, if properly
2016. Respondents opposed the Motion for Reconsideration and considered, would justify a different conclusion.[36]
filed an Opposition/Comment[25] dated April 20, 2016. In its
Resolution[26] dated October 3, 2016, the Court granted petitioners' As will be demonstrated below, the Court's review of the factual
Motion for Reconsideration, reinstated the Petition and required findings of the courts below is justified by the fourth, tenth and
respondents to comment on the Petition. Respondents filed their eleventh exceptions the assailed judgments of the CA and the RTC
Comment[27] dated February 4, 2017. Petitioners filed a are based on a misapprehension of facts; the findings of fact of the
Reply[28] dated July 10, 2017. CA and the RTC, supposedly premised on the absence of evidence,
are contradicted by the evidence on record; and the CA as well as
Issues the RTC manifestly overlooked certain relevant facts not disputed
by the parties, which, if properly considered, would justify a
The Petition raises the following issues: different conclusion.

At the heart of the present controversy between respondents

1. Whether the CA erred in not upholding as applicable to spouses Ramon, Sr. (respondent Ramon) and Natividad Palugod
the case the legal principle that a written contract is for a (respondent Natividad), the parents of the late Jasminia and her
valuable consideration despite the utter failure to prove "close friend"[37] petitioner Lolita is the (unilateral) Deed of
beyond a selective appreciation of the transcript of Absolute Sale[38] (DAS) notarized on May 11, 2004 executed by
stenographic notes that there was indeed no Jasminia in favor of petitioner Lolita, the validity of which is the
consideration; central issue in this case. The DAS partly states:
I, JASMINIA PALOMA PALUGOD x x x hereinafter referred to
2. Whether the CA erred in not upholding as applicable to as the VENDOR, FOR AND IN CONSIDERATION of the sum
this case the legal principle that inadequacy of monetary of FOUR HUNDRED THOUSAND PESOS
consideration does not render a conveyance null and (P400,000.00) Philippine Currency, receipt of which is hereby
void; and acknowledged and confessed, have SOLD,
TRANSFERRED, and CONVEYED, absolutely and perpetually
3. Whether the CA erred when it affirmed the finding of the to LOLITA ESPIRITU SANTO MENDOZA x x x hereinafter
RTC that petitioners-mortgagees are jointly liable with referred to as the VENDEE, her heirs, successors, and assigns,
petitioner-mortgagor despite the lack of evidence against my ONE HUNDRED TWENTY (120) SQUARE METERS lot
their innocence contrary to the legal principle that located at Habay, Bacoor, Cavite, including all improvements
innocent parties must not be held liable for damages. [29] found therein x x x.[39]
Both the RTC and the CA declared the DAS void on the ground
that it was fictitious or simulated on account of lack of
The Court's Ruling
consideration. According to the RTC, petitioner Lolita "admitted
that she has no receipts showing the staggered payment of
The Petition is meritorious.
P400,000.00 or any agreement made between her and Jasminia as
to the consideration of the subject property."[40] On the other hand,
While petitioners couch the issues based on erroneous application
the CA stated that:
of certain legal principles - presumption and adequacy of
Although, on its face, the Deed of Sale appears to be supported by
consideration of contracts, they inherently involve a determination
valuable consideration, since it states that Lolita paid the purchase
of the correctness of the finding by both the CA and the RTC that
price of Php400,000.00 for the subject property. However, based
respondents have established by preponderance of evidence the
on the testimony of [petitioner] Lolita, it has been proven that she
lack of consideration of the disputed deed of sale. Necessarily,
gave no consideration therefor. Having proven that the price, as
questions of fact must be hurdled in the resolution of the issues
reflected in the Deed of Sale is simulated, it is beyond doubt that
raised by petitioners.
the sale is null and void. Article 1471 of the New Civil Code
provides that "If the price is simulated, the sale is void, x x x."
As a rule, the factual findings of the CA affirming those of the
Thus, [respondents] are the lawful owners of the subject property
RTC are final and conclusive, and they cannot be reviewed by the
by intestate succession as the only and compulsory heirs of the late mere assertion that the DAS has no consideration is inadequate.
Jasminia.[41]
Both the RTC and the CA relied on the following testimony of Regarding the determination of preponderance of evidence, Section
petitioner Lolita: 1, Rule 133 of the Rules provides:
ATTY. ARANDIA: Also, in the presence of Atty. Bongon [the SECTION 1. Preponderance of evidence, how determined. - In
notary public], did you pay Jasminia the consideration on the Deed civil cases, the party having the burden of proof must establish his
of Absolute Sale? case by a preponderance of evidence. In determining where the
preponderance or superior weight of evidence on the issues
WITNESS: No, sir. involved lies, the court may consider all the facts and
circumstances of the case, the witnesses' manner of testifying, their
ATTY. ARANDIA: There was none? intelligence, their means and opportunity of knowing the facts to
which they are testifying, the nature of the facts to which they
WITNESS: Yes, sir.[42] testify, the probability or improbability of their testimony, their
To the lower courts, the above-quoted testimony of petitioner interest or want of interest, and also their personal credibility so far
Lolita, plus the absence of receipts, is the unrebutted proof of the as the same may legitimately appear upon the trial. The court may
DAS' lack of consideration. also consider the number of witnesses, though the preponderance is
not necessarily with the greater number.
In their motion for reconsideration before the CA and in their The basic rule in civil cases is:
Petition, petitioners argue, however, that petitioner Lolita's x x x that "the party having the burden of proof must establish his
principal proof that she did purchase the subject property is the case by a preponderance of evidence."[52] By "preponderance of
DAS itself while the evidence against her by respondents are all evidence is meant simply evidence which is of greater weight, or
verbal averments, which are mere conjectures and even hearsay. [43] more convincing than that which is offered in opposition to it." [53] x
xx
While petitioner Lolita concedes that she did not pay the
consideration for the purchase of the subject property before xxxx
Notary Public Atty. Jesus Bongon[44], she asserts that the payment
was made prior to the notarization of the DAS as shown in her "Where the evidence on an issue of fact is in equipoise or there is
testimony taken on February 23, 2010.[45] She likewise argued this doubt on which side the evidence preponderates[,] the party having
point before the CA in petitioners' motion for reconsideration. [46] the burden of proof fails upon that issue."[54] Therefore, as "neither
party was able to make out a case, neither side could establish its
The lower courts, as will be explained below, failed to properly cause of action and prevail with the evidence it had. They are thus
consider the foregoing argument and evidence that petitioner Lolita no better off than before they proceeded to litigate, and, as a
raised and adduced. The outcome of the case would have been consequence thereof, the courts can only leave them as they are. In
different had the lower courts given them the due consideration such cases, courts have no choice but to dismiss the
they deserved. complaints/petitions."[55]
While the RTC ruled that "[respondents] established by a
As correctly pointed out by petitioner Lolita, the DAS is itself the preponderance of evidence that the Deed of Sale dated May 11,
proof that the sale of the property is supported by sufficient 2004 involved no actual monetary consideration, executed by
consideration. This is anchored on the disputable presumption of Jasminia in favor of [petitioner] Lolita,"[56] it relied not on the
consideration inherent in every contract. Thus, Article 1354 of the testimony of the lone witness for respondents, respondent
Civil Code provides: "Although the cause is not stated in the Natividad, but on the testimony of petitioner Lolita admitting that
contract, it is presumed that it exists and is lawful, unless the debtor "in the presence of the Notary Public, Atty. Bongon, the sale was in
proves the contrary." fact without consideration"[57] and "she has no receipts showing the
staggered payment of P400,000.00 or any agreement made between
This disputable presumption is reiterated in the Rules of Court her and Jasminia as to the consideration of the subject
(Rules). Section 3, Rule 131 of the Rules provides: property."[58] Thus, the RTC Decision made no mention of the
SEC. 3. Disputable presumptions. - The following presumptions pertinent testimony of respondent Natividad wherein she
are satisfactory if uncontradicted, but may be contradicted and controverted the presumption of consideration.
overcome by other evidence:
The CA echoed the finding of the RTC and stated: "A perusal of
xxxx the records of the case reveals that [respondents] were able to
establish by a preponderance of evidence that the Deed of Sale is
(r) That there was a sufficient consideration for a contract[.] absolutely simulated, since, it did not involved (sic) any actual
In Mangahas v. Brobio,[47] the Court explained how the monetary consideration."[59] The CA then quoted the testimony of
presumption of sufficient consideration can be overcome, to wit: petitioner Lolita where she admitted that the consideration of the
A contract is presumed to be supported by cause or consideration. DAS was not paid in the presence of Atty. Bongon. The CA, like
[48]
 The presumption that a contract has sufficient consideration the RTC, did not advert to the testimonial evidence adduced by
cannot be overthrown by a mere assertion that it has no respondents through respondent Natividad.
consideration. To overcome the presumption, the alleged lack of
consideration must be shown by preponderance of evidence. [49] The Since preponderance of evidence is the required quantum of proof
burden to prove lack of consideration rests upon whoever alleges it, in this case, the evidence of respondents, who are the plaintiffs
which, in the present case, is respondent.[50] before the RTC, must be weighed against the petitioners' evidence,
Guided by the above provisions of the Civil Code and the Rules as and a determination of which one has superior weight must be
well as jurisprudence, petitioners stand to benefit from the made.
disputable presumption of consideration with the presentation of
the DAS. Indeed, they can rely on the DAS as proof that it has As mentioned earlier, respondents relied solely on the testimony of
consideration - "FOR AND IN CONSIDERATION of the sum of respondent Natividad. A careful reading of the testimony of
FOUR HUNDRED THOUSAND PESOS respondent Natividad, the mother of Jasminia, reveals that
(P400,000.00) Philippine Currency, receipt of which is hereby respondents' evidence on the lack of consideration of the DAS can
acknowledged and confessed."[51] be inferred from the following:
[Atty. Edgardo Arandia, respondents' counsel, to witness
With the presumption in favor of petitioner Lolita who is the respondent Natividad]
vendee, it became incumbent upon respondents to present ATTY. ARANDIA
preponderant evidence to prove lack of consideration. Respondents' Q Why did you say that they were living as if they were husband
 and wife? [Atty. Lawrence[63] Rubio, petitioners' counsel, to petitioner Lolita]
WITNESS ATTY. RUBIO:
A They were living in that house and Lolita Mendoza is a lesbian Miss witness, can you tell us your occupation?
"tomboy", sir. WITNESS:
ATTY. ARANDIA I am a businesswoman, sir.
Q And who was spending for their everyday living? ATTY. RUBIO:
WITNESS Can you tell us what kind of business are you engaged into?
A Jasminia, sir. WITNESS:
ATTY. ARANDIA I am engaged in selling food, catering services. I am also
Q Why? Was (sic) Lolita has no income of her own? engaged in selling house and lot, sir.
WITNESS ATTY. RUBIO:
A No, sir. She has none. Your (sic) are telling us that you are engaged into selling as
ATTY. ARANDIA agent. Do you have any proof to show that you are engaged in
Q What was the occupation or job of Jasminia at that time? such business?
WITNESS WITNESS:
A My daughter is a Supervisor at the PLDT, sir. Yes sir, I have.
ATTY. ARANDIA ATTY. RUBIO:
Q You are telling us that Lolita was purely dependent from What are those documents, madame witness?
Jasminia? WITNESS:
WITNESS I have documents coming from the offices wherein I was able to
A Yes, sir. sell house and lot and also documents coming from other
xxxx offices wherein I transacted business catering with them, sir.
ATTY. ARANDIA ATTY. RUBIO:
Q What did you talk about? Madame witness, I am showing to you Exhibit "3["][64] and "3-
WITNESS A",[65] is this the one that I am (sic) referring to?
A She [Jasminia] told me that the house and lot is for Ramonito WITNESS:
and she requested not to evict Lolita from the house and I said Yes sir.
"yes" we will not asked (sic) Lolita to leave the house, sir. [60] xxxx
Respondent Natividad further testified as follows: ATTY. RUBIO:
ATTY. ARANDIA: When we say occupation, we are talking of income. Can you
Mrs. Palugod, what can you say on this Deed of Absolute Sale tell us if you receive any income from this occupation?
marked as Exhibit "F"? WITNESS:
WITNESS: Yes sir.
That's not true because in fact my daughter when she's still alive ATTY. RUBIO:
had been telling me that the said house and lot will be given to Can you show us any proof that you had received any income
her brother Ronnie and we will not ask Lolita Mendoza to from this business or occupation that you mentioned?
vacate or to leave the place, sir. WITNESS:
xxxx I have a statement of account, I invested the money with the
ATTY. ARANDIA: bank. I also bought a house and lot and I invested money with
Mrs. Palugod, what else did you discover with the Office of the MMG, sir.
Register of Deeds for the Province of Cavite in connection with ATTY. RUBIO:
this property of Jasmina in addition to its transfer from the I am showing to you a document previously marked as Exhibit
name of your daughter to the name of Lolita? "4"[66]. Can you tell us if you are referring to this document that
WITNESS: you mentioned?
We also discovered that the Deed of Sale is not true and that is WITNESS:
a fake "gawa-gawa lang po", sir.[61] Yes sir.
In fine, respondent Natividad simply reiterated the allegations in ATTY. RUBIO:
the "Sinumpaang Salaysay ng Paghahabol (Affidavit of Adverse How about Exhibits "5"[67] & "6"[68]?
Claim)" dated November 24, 2004 that she and her husband, WITNESS:
respondent Ramon, executed, to wit: Yes sir.
Nalagay sa pangalan ni Lolita Espiritu Santo Mendoza ang titulong xxxx
lupa't-bahay sang-ayon sa isang Deed of Absolute Sale na COURT:
lumalabas ay binili niya iyon sa aming namayapang anak na si By the way, what are those properties owned by the defendants?
Jasminia sa halagang P400,000.00 piso daw; ATTY. RUBIO:
Your honor, these are savings accounts from banks.
Wala pong katotohanan ang nasabing bilihan sapagkat iyon ay COURT:
isang hindi tatoo at isang simulated or fictitious na bilihan lamang How many savings accounts does she have?
dahil imposibleng bayaran [ni] Lolita ang anak [namin] dahil sila ATTY. RUBIO:
ay nagsasama bilang mag-asawa (tomboy po si Lolita) at si Lolita She has one from China Bank and the Memorandum of
ay walang hanapbuhay at umaasa lamang sa aming anak nasi Agreement which the witness identified were investments from
Jasminia. Ang katotohanan pa nga, ay na[n]g magkasakit ang holdings company which she has invested, your honor.
aming anak, lahat ng ginagastos sa pagpapagamot sa kanya ay COURT:
galing sa kanyang mga kapatid na ibinibigay [namin] kay Lolita. How much was her investments in those companies and what
Bukod pa doon, bago siya namatay ay ibinilin niya sa amin n[a] are those companies? She mentioned that she invested with the
huwag paaalisin si Lolita sa bahay kung iyon ay manahin [namin] MMG, is it not? So, how much was she invested (sic) with
at hindi kailanman iyon ay ipinagbili sa kanya; MMG?
WITNESS:
Kung kaya[']t bilang tanging tagapagmana at sa ilalim ng batas ay Four Hundred Thousand Pesos (PhP400,000.00) and another
kami na ang may-ari ng nasabing lupa[']t bahay, ay aming Two Hundred Thousand pesos (PhP200,00.00) (sic), your
isinasagawa ang sinumpaang salaysay na ito upang patunayang honor.
lahat ang nakasaad sa itaas x x x.[62] COURT:
On the other hand, petitioner Lolita disputed the assertion that she What else? Aside from MMG, do you invest your money to
has no income and means of livelihood, and presented documents other investing company?
in support thereof, to wit: WITNESS:
 At China Bank, your honor. PESOS (Php20,000.00) sometimes FORTY THOUSAND
COURT: PESOS (Php40,000.00) until it reached the amount of TWO
Was it investment or deposit? HUNDRED THOUSAND PESOS (Php200,000.00), sir.
WITNESS: xxxx
Deposit, your honor.[69] ATTY. RUBIO:
The foregoing testimony of petitioner Lolita and the documentary You only paid Php200,000.00 that time[.]
evidence in support thereof show that she had income and the WITNESS:
means to pay the consideration stated in the DAS. These Because that's the only money left with me and the other
documentary evidence - (1) Certification from E.B. Loredo Realty Php200,000.00 was borrowed by Jasminia from my sister in
Corporation dated January 6, 2005 that petitioner Lolita had been a Australia, sir.
sales agent of the said realty corporation from January 2001 up to xxxx
December 2002 (Exh. "3"); (2) Certification from Cesar C. Cruz & COURT:
Partners Law Offices dated December 22, 2004 that petitioner What transpired during the meeting between your sister and
Lolita was supplying food consisting of lunch and snacks to the Jasminia when you said you were present?
employees of the said law office from 1982 to 1988 (Exh. "3-A"); WITNESS:
(3) Certification from Chinabank, SM City Bacoor Branch dated That my sister will lend money to Jasminia, you honor.
December 16, 2004 that since 1998 petitioner Lolita maintained COURT:
accounts with the said bank under TD#168020017540, Do you know how much money is she going to lend to
TD#168020018239, SA#2680029315 and SA#2680873817 (Exh. Jasminia?
"4"); (4) Notarized Memorandum of Agreement between MMG WITNESS:
International Holdings Co., Ltd. (MMG) and Jasminia Palugod Two Hundred Thousand Pesos (Php200,000.00), your honor.
&/or Lolita Mendoza (Capitalist) dated June 26, 2002 wherein the xxxx
Capitalist turned over P800,000.00 for MMG to use as capital for ATTY. RUBIO:
six months at 2.5% monthly compensation, expiring on December After agreeing to let Jasminia borrow money from your sister,
26, 2002 (Exh. "5"); and (6) Notarized Memorandum of what happened next?
Agreement between MMG and Lolita Mendoza (Capitalist) dated WITNESS:
June 26, 2002 wherein the Capitalist turned over P200,000.00 for She was given first Fifty thousand Pesos (Php50,000.00), sir.
MMG to use as capital for six months at 2.5% monthly COURT:
compensation, expiring on December 26, 2002 (Exh. "6") - were When was that?
all unrebutted by respondents. For their part, both the CA and the WITNESS:
RTC totally ignored them. That was also in the year 2002, you honor.
COURT:
As to the consideration of the DAS, both the RTC and the CA Was it during the meeting wherein Jasminia and your sister
concluded that since Lolita admitted in her testimony, as quoted talked about this loan?
earlier, that she did not pay the consideration of the DAS before the WITNESS:
notary public, the DAS lacks consideration. However, petitioner Yes your honor.
Lolita offered the following explanation: COURT:
RE-DIRECT-EXAMINATION: So, immediately your sister lend her Php50,000.00?
[Atty. Rubio to petitioner Lolita] WITNESS:
ATTY. RUBIO: Yes your honor.
During the hearing last June 30, 2009 you were asked by the ATTY. RUBIO:
counsel or (sic) the plaintiff "Did you pay Jasminia for the What about the balance of Php150,000.00?
consideration of the Deed of Absolute Sale? You answered, No, WITNESS:
sir." As appearing on the Transcript of Stenographic Notes of When she returned to Australia she's sending money to my
the same date. My question madame witness is, can you clarify mother including the money that Jasmin[ia] is (sic) asking, sir.
why you were not able to pay the consideration? xxxx
xxxx COURT:
ATTY. RUBIO: By the way, when your sister gave Jasminia the amount of
My question madame witness is, since you were not able to pay Php50,000.00, was there any receipt prepared to show that your
her at that time, when did you pay her? sister indeed lend (sic) money in the amount of Php50,000.00?
xxxx WITNESS:
WITNESS: There's none, your honor.
I paid in 2002, sir. COURT:
xxxx How about the other money that your sister sent to your mother
ATTY. RUBIO: in order to give to Jasminia, were there any receipts?
Madame witness, you answered 2002, can you tell us when the WITNESS:
Deed of Absolute Sale was executed? None also you honor.
WITNESS: xxxx
May 11, 2004, sir. RE-CROSS EXAMINATION:
ATTY. RUBIO: [Atty. Arandia to petitioner Lolita]
You paid Jasminia the consideration of the property before the ATTY. ARANDIA:
execution of the Deed of Absolute Sale? Miss. (sic) Mendoza, you mentioned that you paid Jasminia
WITNESS: Palugod Php200,000.00 in partial payment of the property the
Yes sir. subject matter in this case and according to you the payment
ATTY. RUBIO: was on a staggered basis way back in 2002. Now, my question
Can you tell us the circumstances how you paid Jasminia the is, do you have receipts showing that you paid Jasminia
consideration of the property subject of this case? Php200,000.00 on staggered basis?
xxxx WITNESS:
ATTY. RUBIO: None, sir.[70]
Can you tell us the manner of payment, madame witness? From the foregoing, it is evident to the Court that petitioner Lolita's
xxxx proof of payment of the DAS' consideration was her sworn
WITNESS: testimony. Testimony, given under oath, and subjected to cross-
Whenever Jasminia needs money since she's having her examination is proof.[71] Unfortunately, both the CA and the RTC
treatment so I gave her the amount of TWENTY THOUSAND brushed this aside only because the RTC zeroed in on the lack of
receipts. Q Do you know if Jasminia and Lolita went abroad from that
retirement benefit?
Since the evidence of the parties are mainly testimonial, it xxxx
behooved the RTC, as well as the CA, to weigh the version of WITNESS
respondents against that of petitioners. The Court is called upon to A They went to Hong Kong, Australia and Norway, sir.
do the same in order to determine which evidence preponderates. COURT
Q Why do you know that they went to those places?
Before the narrations of respondent Natividad and petitioner Lolita WITNESS
are pitted against each other to determine which one preponderates A Because we were living in the same house and I was with them
over the other, the Court notes the glaring inconsistencies in when they went to Hong Kong, Your Honor.
respondent Natividad's testimony: COURT
Q So, do you mean to say that you were living with Lolita and
1. According to respondent Natividad, Jasminia used her retirement Jasminia in their house at Sagana Remville, Habay, Bacoor,
pay to buy the lot and constructed the house in Sagana Remville, Cavite?
Habay, Bacoor, Cavite, to wit: WITNESS
[Atty. Arandia to respondent Natividad] A Not me, only the two of them, Your Honor.[75]
ATTY. ARANDIA On the other hand, petitioner Lolita's version is as follows:
Q Was Jasminia able to retire from PLDT before her death? ATTY. ARANDIA:
WITNESS And from this separation benefit which Jasminia received from
A Yes, sir. PLDT you even went wither (sic) in Europe, in Hong Kong and
xxxx in Australia?
ATTY. ARANDIA WITNESS:
xxxx That's not true, sir. At the time we went to Europe and Hong
Q Do you know if Jasminia able (sic) to get her retirement benefit Kong, Jasminia had not yet separated from PLDT and in fact
from PLDT? we went together with her mother at the time we went in those
xxxx places, sir.
WITNESS COURT:
A Yes, sir. She was able to receive it. Do you still recall what year was that when you, Jasminia and
ATTY. ARANDIA together with her mother went to Europe?
Q Do you know what Jasminia did on her retirement benefit? WITNESS:
WITNESS In Europe, that was May, 1997, you honor.
A Yes, sir. COURT:
ATTY. ARANDIA How about in Hong Kong?
Q What? WITNESS:
WITNESS In Hong Kong, that was September, 1995, your honor.
A She bought a lot and constructed a house, sir. COURT:
ATTY. ARANDIA How about in Australia?
Q And that property or lot you are saying now is the same WITNESS:
property located in Sagana Remville, Habay, Bacoor, Cavite? In Australia, that was in March, 1999, your honor.
WITNESS COURT:
A Yes, sir.[72] So, that was after her separation?
Respondent Natividad's account could not have happened because WITNESS:
Jasminia received her retirement pay equivalent to P1,383,773.59 Yes your honor.
on January 18, 1999 based on the Receipt, Release and Quitclaim ATTY. ARANDIA:
(Exh. "8"[73]) that Jasminia executed on even date, which was after With all these tours and trips with these countries which you
the purchase of the subject lot and the construction of the mentioned, it was Jasminia who spent for the travel?
subject house. WITNESS:
In Hong Kong, it was her mother who paid. In Norway, the
Indeed, petitioner Lolita disputed respondent Natividad's version, three (3) tickets were sent by her brother because we had an
to wit: invitation to go to Norway so that we will (sic) be able to get a
[Atty. Rubio to petitioner Lolita] Visa.
ATTY. RUBIO: COURT:
x x x Madame witness, during the hearing dated November 27, In other words, the expenses came from the brother of
2007, when the plaintiff testified you were present in Court? Jasminia?
WITNESS: WITNESS:
Yes sir. Yes you honor, but I paid my ticket when we reached Norway.
ATTY. RUBIO: ATTY. ARANDIA:
So, when the witness was asked: "Do you know what Jasminia And what is the name of the brother of Jasminia in Norway?
did on her retirement benefit?["] And the witness answered: WITNESS:
"Yes, sir.". "What?["], asked by counsel and the witness Ramonito Palugod, sir.
answered: "She bought a lot and constructed a house, sir." Can ATTY. ARANDIA:
you tell us, what can you say about this testimony? And according to you, you reimbursed the ticket given to you
WITNESS: upon arrival in Norway?
That's not true, sir. WITNESS:
ATTY. RUBIO: Yes sir, I paid it in dollar.
Why? ATTY. ARANDIA:
WITNESS: To whom did you pay?
Because we bought that lot in 1991 and the house was WITNESS:
constructed in February of 1996, sir.[74] To Ramonito, sir.
2. According to respondent Natividad, Jasminia's retirement pay ATTY. ARANDIA:
was used by Jasminia and petitioner Lolita for their trips to Hong How much did you pay Ramonito?
Kong, Norway and Australia, to wit: WITNESS:
[Atty. Arandia to respondent Natividad] One Thousand Dollars ($1,000.00), sir.
ATTY. ARANDIA ATTY. ARANDIA:
 Do you have receipt that you have actually reimbursed On cross-examination, Dr. Ortin further testified:
Ramonito for that ticket? [Atty. Arandia to Dr. Ortin]
WITNESS: ATTY. ARANDIA:
None, sir.[76] How long is the radiation treatment being conducted for each
3. According to respondent Natividad, her daughter Jasminia could exposure?
not possibly travel from Bacoor to Pasay City where the DAS was WITNESS:
notarized because she had a brace and her bone is "napupulbos About fifteen (15) minutes, sir.
na."[77] Her testimony in this aspect is reproduced below: ATTY. ARANDIA:
ATTY. ARANDIA: After exposing the patient on radiation therapy, what is the
On the second page of this Exhibit "F" is the acknowledgment effect thereof on her physical condition?
portion wherein it is stated here that it was allegedly WITNESS:
acknowledged before the Notary Public in Pasay City and this Radiation therapy is a local treatment, so the side effect should
Deed of Absolute Sale appears to have been executed on May end on where the radiation is directed. For example, there were
11, 2004. My question is, during the time, May 11, 2004 can exposure on the arms, other parts of the body would not have
Jasmina travel from Bacoor to Pasay City to acknowledge this any significant side effect.
Deed of Sale before a Notary Public? ATTY. ARANDIA:
xxxx In the case of Ms. Palugod, who was according to you, afflicted
WITNESS: with cancer which has metastasized. So what part of her body
On the said date and time my daughter cannot possibly travel was subjected to radiation exposure therapy?
from Bacoor in going to Pasay City because during that time WITNESS:
she already had a bone cancer and she had a brace and her bone According to the records, it was in the thoraxic spine.
is "napupulbos na", sir.[78] ATTY. ARANDIA:
To dispute respondent Natividad's account, petitioner Lolita What would be the effect of that radiation on the patient after
presented Dr. Teresa Sy Ortin (Dr. Ortin), a Radiation Oncologist exposure?
at Makati Medical Center, who issued a Medical WITNESS:
Certificate[79] dated December 20, 2004. Dr. Ortin's testimony The side effect is very minimal. You may feel a little weak but
follows: as you can see most of our patients are treated in my clinic as
[Atty. Lawrence Rubio to Dr. Ortin]       out patient. They don't need to be confined. Most of our patients
ATTY. RUBIO:        can walk around and able to do their other duties after
Madam witness, can you recall your employment in the year May treatment.
11, 2004? Where were you employed at that time?        ATTY. ARANDIA:
WITNESS:    Will they feel weakness after the therapy?
I'm a Radiation Oncologist at Makati Medical Center. I'm a cancer WITNESS:
specialist, sir.   Yes, but not very significant for us to require them to stay in the
x x x x        hospital.
ATTY. RUBIO:    ATTY. ARANDIA:
x x x Can you remember a patient by the name of Jasminia In the case of Ms. Palugod considering that her cancer has
Palugod?        already metastasized. I will assume that during those times, Ms.
WITNESS:    Palugod was weak already?
Yes, sir. I have her records with me.        xxxx
ATTY. RUBIO:    WITNESS:
Can you tell us what is the nature of her illness?       I remember she was coming on a wheelchair and her main
WITNESS:    problem at that time, the reason for the radiation, is that because
She had breast cancer. I treated her for several times and the last she was in pain.
treatment was on April 16, 2004 for which she received treatment ATTY. ARANDIA:
for the period April 16 to May 13, 2004, sir.        On wheelchair. Meaning to say that she was weak to walk by
ATTY. RUBIO:    herself?
I have here a Medical Certificate dated December 20, 2004. I am WITNESS:
showing to you this document. Can you tell us what is the relation Yes, sir.
of this document to the one you have mentioned?        ATTY. ARANDIA:
WITNESS:    And that her weakness will be aggravated after weeks of
Actually, I have a copy of that on my record and this certifies that radiation therapy?
she came to us for treatment, in my clinic.        WITNESS:
x x x x       Not significantly.
ATTY. RUBIO:    ATTY. ARANDIA:
x x x During that time, madam witness, April 16, 2004 to May 13, What do you mean, "not significantly["]?
2004, how often does (sic) your patient Jasminia Palugod came WITNESS:
(sic) to Makati Medical Center?        It's not going to be extremely weak that you need to confine her
WITNESS:    because of the problem?
She was treated daily, because our schedule of radiation therapy is COURT:
everyday, from 8:00 to 5:00. So, it's a total of eighteen (18) What would be the end result of that radiation treatment to a
treatments. So, that is over four (4) weeks.        person afflicted by cancer? Would she be cured or would she be
ATTY. RUBIO:    strong after each treatment?
During that time, do you know who was with her?        WITNESS:
WITNESS:   The main problem why she was referred to us was because she
I remember as her companion... I don't know her name but I was in extreme pain, and radiation is supposed to regress the
recognize her face.     pain and makes her to feel better.
ATTY. RUBIO:    COURT:
For the record, your Honor, may I state that the witness is pointing During this treatment, and you said that it was on a daily basis,
to the defendant Lolita Mendoza as the companion of patient after being treated for at least fifteen (15) minutes of radiation,
Jasminia Palugod at the time the patient is being assisted at the what should be the effect to Ms. Palugod?
Makati Medical Center.        WITNESS:
COURT:    After few days of treatment, we expect her to be relieved....
Noted.[80] COURT:
 From the pain that she is suffering. petitioner Lolita that she did not pay the consideration before the
WITNESS: Notary Public. They excised from their judgments petitioner
Yes. Her treatment started on April 16 and on April 30, she Lolita's sworn testimony as to how the consideration was paid by
claimed that she felt some relief from her back pain.
her. The portion of petitioner Lolita's testimony that the lower
xxxx
ATTY. ARANDIA: courts quoted in their respective Decisions does not even
x x x Ordinarily, if the patient like Ms. Palugod, who has been indubitably show that no consideration had been paid. What
suffering from cancer which has metastasized and who was petitioner Lolita admitted was that the consideration was not paid
undergoing radiation therapy, would it be natural for that "before the Notary Public," and, as correctly pointed out by her,
patient like Ms. Palugod to go to a notary public to there is no legal requirement that the consideration of a sale be paid
acknowledge a document? in the very presence of the Notary Public before whom the deed of
xxxx
sale is acknowledged.
WITNESS:
I don't think there's problem with that. For patients who are
terminally ill, we advise them to take care of things, important Given the foregoing, contrary to the findings of the CA and the
decisions that they have to decide on. So, I don't think that RTC, which evidently arose from their misapprehension and non-
should be a problem for patients who are suffering from illness consideration of relevant facts, respondents have not discharged
with that concern. their burden of proof to rebut either the presumption of sufficient
ATTY. ARANDIA: consideration of the DAS or the evidence of petitioner Lolita. In
For all the treatments that you had been undertaken to Ms.
fine, respondents failed to establish their cause of action by
Palugod, was she always accompanied by somebody?
WITNESS: preponderance of evidence.
Yes, as far as I can remember.
ATTY. ARANDIA: All told, petitioners' evidence has superior weight. While petitioner
So in other words, she cannot come to your office without being Lolita could not present receipts to show her payments to the late
assisted by another person? Jasminia, her sworn testimony which in certain portions were
WITNESS:
corroborated by pertinent documents, remains more credible than
Probably, not.
ATTY. ARANDIA: that of respondent Natividad. Indeed, the lack of receipts may be
What do you mean, "probably, not"? explained by the "close friendship" between petitioner Lolita and
WITNESS: Jasminia. The non-admission by petitioner Lolita of the "husband
Because she has a very advance disease, I don't think, anybody and wife" relationship that she shared with Jasminia and her being
would want her to go for treatment by herself, especially a "lesbian or tomboy," as respondent Natividad claimed, is of no
because of her disease, it affected her bone, and she was in pain, moment. Whatever transpired between her and Jasminia is a private
probably, she would not be able to travel by herself.
matter, which the Court would not even speculate on. As to the
ATTY. ARANDIA:
What about the mental capacity of the witness, in your gender identity and sexual preference of petitioner Lolita, that is
assessment, how was Ms. Palugod during that time? Was her likewise a private matter.
mental capacity affected by her illness?
xxxx Even from a pure evaluation of only the parties' testimonial
WITNESS: evidence, wherein doubts on the truthfulness of their respective
In my clinical assessment, there is no reason to prove that her narrations of the relevant facts are perceived and there may be
mental capacity has been affected. If we notice something, the
difficulty in determining who between respondent Natividad and
usual is we talk to the patient and we would request additional
test, and there is no such evaluation in our record, so I would petitioner Lolita is the more credible witness and in which side the
think that at that time, in our clinical judgment, her disease does testimonial evidence preponderates, the evidence of the parties
not affect her mental capacity or function. [81] should, at the very least, be held to be in equipoise. That being the
Based on Dr. Ortin's clear, categorical and compelling situation, respondents, who have the burden of proof in the present
testimony, Jasminia was not physically incapable of traveling from case, fail upon their cause of action. Following Rivera v.
Bacoor, Cavite to Makati Medical Center and to Pasay City for the CA[82] quoted above, as neither party was able to make out a case,
acknowledgment of the DAS before the Notary Public and she was neither side having established his/her cause of action, the Court
not mentally incapacitated to know the import thereof. can only leave them where they are and it has no choice but to
dismiss the complaint, as the lower courts should have done.
Given the significant inconsistencies in the testimony of respondent
Natividad, the credibility of her testimony is, to the Court, Consequently, the DAS executed by Jasminia in favor of petitioner
doubtful. To be sure, a witness' credibility is determined by the Lolita over the subject property is valid, the presumption that it has
probability or improbability of his testimony. As well, the witness' sufficient consideration not having been rebutted. The same holds
means and opportunity of knowing the facts that he is testifying to true regarding the Real Estate Mortgage between petitioner Lolita
are relevant. The improbability of respondent Natividad's and petitioners spouses Alexander and Elizabeth Gutierrez.
assertions is demonstrated by the evidence, both documentary and
testimonial, that petitioner Lolita adduced to rebut the same. Put WHEREFORE, the Petition is hereby GRANTED. The Decision
simply, respondent Natividad's observations are those of an of the Court of Appeals dated April 29, 2015 and its Resolution
outsider because she was not living with her daughter during the dated September 10, 2015 in CA-G.R. CV No. 102904 as well as
period at issue and cannot be relied upon. the Decision dated March 14, 2013 and Order dated May 8, 2014
of the Regional Trial Court of Bacoor, Cavite, Branch 19 in Civil
The RTC and the CA also did not even mention the glaring Case No. BCV 2004-217 are REVERSED AND SET ASIDE.
inconsistencies noted above, which if properly considered, would The complaint filed in Civil Case No. BCV 2004-217
have seriously affected the outcome of the case. is DISMISSED for lack of cause of action.

In addition, the lower courts misapprehended the admission by

 PROCESO QUIROS AND LEONARDA VILLEGAS,
PETITIONERS, VS. MARCELO ARJONA, TERESITA Witnesses:
BALARBAR, JOSEPHINE ARJONA, AND CONCHITA
ARJONA, RESPONDENTS. 1)      (Sgd.) Teresita Balarbar
2)      (Sgd.) Josephine Arjona
DECISION 3)      (Sgd.) Conchita Arjona
On the same date, another “PAKNAAN” was executed
YNARES-SATIAGO, J.: by Jose Banda, as follows:
AGREEMENT
Assailed in this petition for review is the decision of the
Court of Appeals in an action for the execution/enforcement of I, JOSE BANDA, married to Cecilia L. Banda, of legal age, and
amicable settlement between petitioners Proceso Quiros and resident of Sitio Torrod, Barangay Labney, San Jacinto,
Leonarda Villegas and respondent Marcelo Arjona.  Appellate Pangasinan. There is a land in which they entrusted to me and the
court reversed the decision of the Regional Trial Court of Dagupan same land is situated in Sitio Torrod, Brgy. Labney, San Jacinto,
City-Branch 44 and reinstated the decision of the Municipal Trial Pangasinan, land of Arjona family.
Court of San Fabian-San Jacinto, Pangasinan.
I am cultivating/tilling this land but if ever Leonarda Villegas and
On December 19, 1996, petitioners Proceso Quiros and Leonarda Proceso Quiros would like to get this land, I will voluntarily
Villegas filed with the office of the barangay captain of Labney, surrender it to them.
San Jacinto, Pangasinan, a complaint for recovery of ownership
and possession of a parcel of land located at Labney, San Jacinto, In order to attest to the veracity and truthfulness of this agreement,
Pangasinan. Petitioners sought to recover from their uncle Marcelo I affixed (sic) my signature voluntarily below this document this
Arjona, one of the respondents herein, their lawful share of the 5th day (Sunday) of January 1997.
inheritance from their late grandmother Rosa Arjona Quiros alias
Doza, the same to be segregated from the following parcels of land: (Sgd.) Jose Banda
A parcel of land (Lot 1, plan Psu-189983, L.R. Case
)  No. D-614, LRC Record No. N- 22630), situated in the Barrio Signed in the presence of:
of Labney, Torud, Municipality of San Jacinto, Province of (Sgd) Avelino N. de la Masa, Sr.
Pangasinan x x x Containing an area of Forty Four Thousand Barangay Captain
Five Hundred and Twenty (44,520) square meters, more or less, Brgy. Labney, San Jacinto
covered by Tax Decl. No. 607; Pangasinan
A parcel of Unirrig. riceland situated at Brgy.
) Labney, San Jacinto,  San Jacinto, Pangasinan with an area of Witnesses:
6450 sq. meters, more or less declared under Tax Decl. No.
2066 of the land records of San Jacinto, Pangasinan assessed at 1) Irene Banda
P2390.00 x x x; (sgd.)
A parcel of Unirrig. riceland situated at Brgy. 2) Jose (illegible) x x x
) Labney, San Jacinto, Pangasinan with an area of 6450 sq. Petitioners filed a complaint with the Municipal Circuit
meters, more or less, declared under Tax Declaration No. 2047 Trial Court with prayer for the issuance of a writ of execution of
of the land records of San Jacinto, Pangasinan assessed at the compromise agreement which was denied because the subject
P1700.00 x x x property cannot be determined with certainty.
A parcel of Unirrig. riceland situated at Brgy.
) Labney, San Jacinto, Pangasinan assessed at P5610.00 x x x; The Regional Trial Court reversed the decision of the municipal
A parcel of Cogon land situated at Brgy. Labney, San court on appeal and ordered the issuance of the writ of execution.
) Jacinto, Pangasinan, with an area of 14133 sq. meters, more or
less declared under Tax Declaration No. 14 of the land records Respondents appealed to the Court of Appeals, which reversed the
of San Jacinto, Pangasinan assessed at P2830.00 x x x.[1] decision of the Regional Trial Court and reinstated the decision of
On January 5, 1997, an amicable settlement was reached the Municipal Circuit Trial Court. [2]
between the parties. By reason thereof, respondent Arjona executed
a document denominated as “PAKNAAN” (“Agreement”, in Hence, this petition on the following errors:
Pangasinan dialect), which reads: I
AGREEMENT THE PAKNAAN BEING A FINAL AND
EXECUTORY JUDGMENT UNDER THE LAW IS AN
I, MARCELO ARJONA, of legal age, resident of Barangay IMMUTABLE JUDGMENT CAN NOT BE ALTERED,
Sapang, Buho, Palayan City, Nueva Ecija, have a land consisting of MODIFIED OR CHANGED BY THE COURT INCLUDING
more or less one (1) hectare which I gave to Proceso Quiros and THE HIGHEST COURT; and
Leonarda Villegas, this land was inherited by Doza that is why I II
am giving the said land to them for it is in my name, I am affixing THE SECOND PAKNAAN ALLEGEDLY EXECUTED
my signature on this document for this is our agreement besides IN CONJUNCTION WITH THE FIRST PAKNAAN WAS
there are witnesses on the 5th day (Sunday) of January 1997. NEVER ADDUCED AS EVIDENCE BY EITHER OF THE
Signed in the presence of: PARTIES, SO IT IS ERROR OF JURISDICTION TO
(Sgd) Avelino N. De la Masa, Jr. CONSIDER THE SAME IN THE DECISION MAKING.
The pivotal issue is the validity and enforceability of the
(Sgd) Marcelo Arjona amicable settlement between the parties and corollary to this,
whether a writ of execution may issue on the basis thereof. unjust, may warrant the suspension of execution of a decision that
has become final and executory.  In the case at bar, the ends of
In support of their stance, petitioners rely on Section 416 of the justice would be frustrated if a writ of execution is issued
Local Government Code which provides that an amicable considering the uncertainty of the object of the agreement.  To do
settlement shall have the force and effect of a final judgment upon so would open the possibility of error and future litigations.
the expiration of 10 days from the date thereof, unless repudiated
or nullified by the proper court.  They argue that since no such The Paknaan executed by respondent Marcelo Arjona purports to
repudiation or action to nullify has been initiated, the municipal convey a parcel of land consisting of more or less 1 hectare to
court has no discretion but to execute the agreement which has petitioners Quiros and Villegas. Another Paknaan, prepared on the
become final and executory. same date, and executed by one Jose Banda who signified his
intention to vacate the parcel of land he was tilling located at
Petitioners likewise contend that despite the failure of Torrod, Brgy. Labney, San Jacinto, Pangasinan, for and in behalf
the Paknaan to describe with certainty the object of the contract, of the Arjona family. On ocular inspection however, the municipal
the evidence will show that after the execution of the agreement, trial court found that the land referred to in the
respondent Marcelo Arjona accompanied them to the actual site of second Paknaan was different from the land being occupied by
the properties at Sitio Torod, Labney, San Jacinto, Pangasinan and petitioners. Hence, no writ of execution could be issued for failure
pointed to them the 1 hectare property referred to in the said to determine with certainty what parcel of land respondent intended
agreement. to convey.

In their Comment, respondents insist that respondent Arjona could In denying the issuance of the writ of execution, the appellate court
not have accompanied petitioners to the subject land at Torrod, ruled that the contract is null and void for its failure to describe
Labney because he was physically incapacitated and there was no with certainty the object thereof. While we agree that no writ of
motorized vehicle to transport him to the said place. execution may issue, we take exception to the appellate court’s
reason for its denial.
The Civil Code contains salutary provisions that encourage and
favor compromises and do not even require judicial approval.  Since an amicable settlement, which partakes of the nature of a
Thus, under Article 2029 of the Civil Code, the courts must contract, is subject to the same legal provisions providing for the
endeavor to persuade the litigants in a civil case to agree upon validity, enforcement, rescission or annulment of ordinary
some fair compromise. Pursuant to Article 2037 of the Civil Code, contracts, there is a need to ascertain whether the Paknaan in
a compromise has upon the parties the effect and authority of res question has sufficiently complied with the requisites of validity in
judicata, and this is true even if the compromise is not judicially accordance with Article 1318 of the Civil Code. [5]
approved.  Articles 2039 and 2031 thereof also provide for the
suspension of pending actions and mitigation of damages to the There is no question that there was meeting of the minds between
losing party who has shown a sincere desire for a compromise, in the contracting parties. In executing the Paknaan, the respondent
keeping with the Code’s policy of encouraging amicable undertook to convey 1 hectare of land to petitioners who accepted. 
settlements.[3] It appears that while the Paknaan was prepared and signed by
respondent Arjona, petitioners acceded to the terms thereof by not
Cognizant of the beneficial effects of amicable settlements, disputing its contents and are in fact now seeking its enforcement. 
the Katarungang Pambarangay Law (P.D. 1508) and later the The object is a 1-hectare parcel of land representing petitioners’
Local Government Code provide for a mechanism for conciliation inheritance from their deceased grandmother. The cause of the
where party-litigants can enter into an agreement in contract is the delivery of petitioners’ share in the inheritance. The
the barangay level to reduce the deterioration of the quality of inability of the municipal court to identify the exact location of the
justice due to indiscriminate filing of court cases.  Thus, under inherited property did not negate the principal object of the
Section 416 of the said Code, an amicable settlement shall have the contract. This is an error occasioned by the failure of the parties to
force and effect of a final judgment of the court upon the expiration describe the subject property, which is correctible by reformation
of 10 days from the date thereof, unless repudiation of the and does not indicate the absence of the principal object as to
settlement has been made or a petition to nullify the award has render the contract void. It cannot be disputed that the object is
been filed before the proper court determinable as to its kind, i.e.1 hectare of land as inheritance, and
can be determined without need of a new contract or agreement.
[6]
Petitioners submit that since the amicable settlement had not been  Clearly, the Paknaan has all the earmarks of a valid contract.
repudiated or impugned before the court within the 10-day
prescriptive period in accordance with Section 416 of the Local Although both parties agreed to transfer one-hectare real property,
Government Code, the enforcement of the same must be done as a they failed to include in the written document a sufficient
matter of course and a writ of execution must accordingly be issued description of the property to convey.  This error is not one for
by the court. nullification of the instrument but only for reformation.

Generally, the rule is that where no repudiation was made during Article 1359 of the Civil Code provides:
the 10-day period, the amicable settlement attains the status of When, there having been a meeting of the minds of the
finality and it becomes the ministerial duty of the court to parties to a contract, their true intention is not expressed in the
implement and enforce it. However, such rule is not inflexible for it instrument purporting to embody the agreement by reason of
admits of certain exceptions.  In Santos v. Judge Isidro,[4] the Court mistake, fraud, inequitable conduct or accident, one of the parties
observed that special and exceptional circumstances, the may ask for the reformation of the instrument to the end that such
imperatives of substantial justice, or facts that may have transpired true intention may be expressed.
after the finality of judgment which would render its execution
If mistake, fraud, inequitable conduct, or accident has prevented a
meeting of the minds of the parties, the proper remedy is not
reformation of the instrument but annulment of the contract.
Reformation is a remedy in equity whereby a written
instrument is made or construed so as to express or conform to the
real intention of the parties where some error or mistake has been
committed.[7] In granting reformation, the remedy in equity is not
making a new contract for the parties, but establishing and
perpetuating the real contract between the parties which, under the
technical rules of law, could not be enforced but for such
reformation.

In order that an action for reformation of instrument as provided in

Article 1359 of the Civil Code may prosper, the following
requisites must concur: (1) there must have been a meeting of the
minds of the parties to the contract; (2) the instrument does not
express the true intention of the parties; and (3) the failure of the
instrument to express the true intention of the parties is due to
mistake, fraud, inequitable conduct or accident. [8]

When the terms of an agreement have been reduced to writing, it is

considered as containing all the terms agreed upon and there can
be, between the parties and their successors in interest, no evidence
of such terms other than the contents of the written agreement,
except when it fails to express the true intent and agreement of the
parties thereto, in which case, one of the parties may bring an
action for the reformation of the instrument to the end that such
true intention may be expressed. [9]

Both parties acknowledge that petitioners are entitled to their

inheritance, hence, the remedy of nullification, which invalidates
the Paknaan, would prejudice petitioners and deprive them of their
just share of the inheritance. Respondent can not, as an
afterthought, be allowed to renege on his legal obligation to
transfer the property to its rightful heirs. A refusal to reform
the Paknaan under such circumstances would have the effect of
penalizing one party for negligent conduct, and at the same time
permitting the other party to escape the consequences of his
negligence and profit thereby. No person shall be unjustly enriched
at the expense of another.

WHEREFORE, in view of the foregoing, the petition

is DENIED.  The Decision dated March 21, 2003 of the Court of
Appeals, which reversed the decision of the Regional Trial Court
and reinstated the decision of the Municipal Trial Court,
is AFFIRMED.  This is without prejudice to the filing by either
party of an action for reformation of the Paknaan executed on
January 5, 1997.

SO ORDERED.